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TGIF Case Studies - Twitter, Google, Internet & Facebook

TGIF Case Studies - Twitter, Google, Internet & Facebook

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Published by Franz Narcis
Everyone's talking about it. All the time. But having social profiles & doing proper social connections are just half-the-way. What's next? Find out here.
Everyone's talking about it. All the time. But having social profiles & doing proper social connections are just half-the-way. What's next? Find out here.

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Published by: Franz Narcis on Nov 20, 2009
Copyright:Attribution Non-commercial


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The TGIF 'Revolution' Is Nothing Without a MarketingStrategy
Social Media Isn't Enough to Save a Weak Brand
by Al Ries
November 09, 2009
If you were a first-time visitor from Mars and you happened to drop into a marketing meeting somewhere in theUnited States, you might assume that marketing people do nothing but talk about "TGIF."
That's Twitter, Google, the internet and Facebook.
There's no question these four revolutionary developments have forever changed the marketing function. Word-of-mouth has now become word of finger.A key difference: Word-of-mouth leaves an invisible trail in the ether. Word-of-finger leaves an electronic trail onthe internet.In the past, nobody paid much attention to word of mouth, even though by some estimates it accounted for amajority of brand impressions. Today, however, the visibility of word of finger has mesmerized the marketingworld.But will the skillful use of TGIF make you a good marketing manager? I think not. TGIF is only half the story.Linens 'N Things didn't go bankrupt because it didn't make effective use of Twitter. It went bankrupt because itwas a knockoff of Bed Bath & Beyond without a unique identity.DHL didn't pull out of the U.S. market because it didn't buy enough AdWords from Google. It pulled out of the U.S.market because it violated a basic law of marketing, the law of duality. DHL was the No. 3 brand in a categorydominated by UPS and FedEx.Kmart didn't go bankrupt because it couldn't figure out how to use the internet to promote the brand. It wentbankrupt because it was squeezed between Walmart at the low end of the mass merchandiser category and Targetat the high end.Coca-Cola didn't fail to build a leading energy-drink brand in three tries (KMX, Full Throttle and Tab) because itforgot to use Facebook to ignite the brands. It failed to build a leading energy-drink brand because it waited toolong after the launch of Red Bull.Marketing can be divided into two parts: 1) marketing strategy; 2) marketing tactics. What's more important? Idon't think there's any question that strategy is by far the most important half of a marketing program. It's likewarfare, also a mixture of strategy and tactics. The weapons of war are equivalent to the media used in amarketing campaign. How often has an army won a war with better soldiers, better guns, better tanks, betteraircraft?Seldom.What wins wars are better strategies. In World War II, the Germans had the advantage of the better weapons, thebetter discipline, the most experience. Yet their leader, Adolph Hitler, was a rank amateur when it came to militarystrategy.
Operation Barbarosssa, the code name for Germany's invasion of the Soviet Union, was launched on June 22,1941. Over 4.5 million troops invaded the USSR along a 1,800-mile front, the largest military operation in humanhistory, in terms of manpower and casualties.By January 1942, it was obvious that the Soviet Union had repelled the invaders. Although the war dragged on foranother three years, the Germans were never able to achieve the expected victory.The Germans' strategic error was trying to fight on two fronts. On the West with the English and the Americans.On the East with the Russians.Ironically, 129 years previously, Napoleon made exactly the same mistake. He invaded Russia with 690,000 men,the largest army assembled up to that point in European history.It was the same old story. Trying to fight on two fronts (the English to the West and the Russians to the East)ultimately cost Napoleon his crown and his empire.Then there's Japan which attacked the United States while still fighting a war in China.You might think that no intelligent business person would make the same mistake. But they do all the time.Take Lenovo, the Chinese company that bought IBM's personal-computer operations. Now they're trying to fightHewlett-Packard and Dell at the high end of the PC market and Acer and Asustek at the low end. Not a goodstrategy.Take Citigroup, one of our largest financial institutions with assets of $1,938.5 billion. Yet Citigroup managed tolose $27.7 billion last year and needed $45 billion in government bailout money to stay afloat.What happened at Citigroup? Same old story. It started with Citibank, its consumer banking operation. Then itbought Travelers (insurance), Smith Barney (stock brokerage) and Salomon Brothers (investment banking.) Inother words, Citigroup started as a bank in competition with the other major banks in America and then tried tofight on four fronts: banking, insurance, stock brokerage and investment banking. Not a good strategy.Getting bigger is not a marketing strategy. Yet it's the only strategy many companies seem to be using today. Lineextensions, mergers, acquisitions, multiple price points and other techniques are obviously designed to bulk up acompany's sales. But how do these techniques affect the brand's position in consumers' minds? In general, theyweaken it.Citigroup got bigger and weaker because the brand was stretched in so many directions. As a result, the brandlost its meaning.General Motors made the same mistake. Every one of its brands was stretched to encompass a wide range of vehicles. As a result, the brands lost their meanings and the corporation went bankrupt.I repeat. Bigger is not a strategy. In the past four years, General Motors sold more than 35 million vehiclesworldwide, more than any other automobile producer. Yet in the last four years, General Motors lost $82.1 billion.If your brands don't stand for anything, you have to sell your products on "price." And it's very difficult to makemoney by selling your products cheaper than the competition.In our work with many companies, we find similar thinking. Almost every company wants to get bigger in order toincrease sales and profits. And they take steps in that direction by branching out into many different businessesand many different markets.
That's not a strategy. That's a road to mediocrity.What does work in marketing? Dominating a category. Nothing is as effective in marketing as dominating acategory.Take Coca-Cola, which has dominated the cola market ever since the product was launched in 1886. (The No. 2brand, Pepsi-Cola, was launched in 1903.)For 106 years, Pepsi-Cola has been trying to overtake Coca-Cola without success. It's extremely difficult toovertake an established leader. That's why the most important objective of any brand is to establish a clear-cutleadership position in consumers' minds.In China, according to the research firm, Euromonitor International, Pepsi-Cola has 23% of the soda marketversus Coca-Cola's 22%. In other words, the two brands are neck and neck. That's an unstable situation. Thereare very, very few hydra-headed categories. That is, categories that have two dominant brands with virtuallyidentical market shares. Sooner or later, one brand will get its nose in front and the battle will be over.That's likely to happen in China. Sooner or later, either Coca-Cola or Pepsi-Cola will get out in front and the battlewill be over. From that point on, consumers will perceive one cola brand to be the "leader" and the other colabrand to be an "also-ran."That would be devastating for the loser. It would forever condemn the losing brand to a second-place position.Look at the fast-food business. McDonald's is perceived as the leader with 13,918 outlets in the United States.Burger King is buried in second place with only 7,207 outlets.Furthermore, McDonald's has taken its leadership position in the United States to build a large, profitable globalcorporation. Last year, for example, McDonald's had $23.5 billion in sales. $4.3 billion in net profits. And a netprofit margin of 18.3%.Burger King, on the other hand, had just $2.5 billion in sales. $200 million in net profits. Or a net profit margin of 7.9%.Conventional wisdom says that McDonald's is more successful than Burger King because they have better productsand better service.Nonsense. McDonald's is more successful than Burger King because it is perceived by consumers to be the leader.And consumers always associate the leader with better products and better service.What should Burger King do? Too many marketing gurus have only four answers to that question: Twitter, Google,the internet and Facebook.Actually, Burger King has had a number of widely admired TGIF successes, including the Subservient Chicken andthe Facebook Whopper sacrifice.But why doesn't Burger King consider a change in strategy? Why doesn't Burger King use one of the mostpowerful of all marketing strategies for a No.2 brand: Be the opposite of the leader.Year after year, Burger King has violated this powerful principle. Instead of being the opposite, they emulated theleader.

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