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Home | LESSONS FOR MARKETERS FROM THE MIDTERM ELECTION 20

 

Monday, November 17, 2014

 

 

LESSONS FOR MARKETERS FROM THE MIDTERM ELECTION 2014

 

We’re most fortunate to work across and within many industries, throughout the world. We’ve worked within the services industry, medical devices and diagnostics, financial, fast moving consumer goods and pharmaceutical industries, among many others. And, we’ve learned much from each. But, we can also learn from observing what transpires in the public sector, including the theatre of politics. This article deals with lessons gleaned from the U.S. midterm election of 2014, which was conducted just 2-weeks ago.

 

The “midterm” elections are so named because they occur mid-way through the presidential elections. The last U.S presidential election took place in 2012 and the next will occur in 2016. Thus 2014 marks a midterm election. While the current U.S. president, Barrack Obama, is a Democrat, the midterm election proved to be vexing for his party. It was a huge win for Republicans at every level of government. Specifically, Republicans won ground in the Senate and are now the majority party. In the House of Representatives the Republican Party boosted their membership and lead over Democrats to the highest level in approximately 50-years. Additionally, at the state level, Republicans picked-up and/or held tight to gubernatorial positions. Moreover, so-called blue states (i.e., typically voting Democrat) bled red (voted Republican).

 

While Democrats were expected to lose based upon dissatisfaction of Americans with the present leadership and its significant domestic and international missteps, the fact of the matter is that no one predicted a Republican tidal wave. A disappointed President Obama said something along the lines that it was a bad day but he’d leave the analysis to the “pundits.” Well, we’re no pundits. Nor do we have a particular agenda to push forward with regard to our politics. Instead, we believe there are parallels between the private and public sector, politics and brand marketing, and, as such, important learning for marketers from this (and every) election (as we’ve noted in the past).

 
BOATS & HELICOPTERS:

Here’s our take regarding learning from the midterm election outcome and potential application for marketing:

1.  You’re only as strong as your lead brand. At the time of the election the president’s approval rating was at an all-time low, with only 41% of Americans approving of his performance. In fact, Democratic incumbents and hopefuls considered adverse public opinion of President Obama’s performance so detrimental to their (re)election chances that they actually distanced themselves from him, choosing instead not to have him campaign on their behalf. Hillary Clinton, former First Lady, senator from New York and Secretary of State, who has presidential ambitions and is considered at this time the front runner for the Democratic party’s nomination for 2016, and her husband, former President Bill Clinton, were campaigning Democrat Party candidates’ pick, over Obama, for support and endorsement.

 

It’s critical that the lead brand be strong. When a candidate sweeps the presidency he usually pulls party members into office on his coattails. When considering a line-extension make certain that your brand can support it. In order for a line-extension to be successful, the lead product must be healthy and able to bestow a positive hallo on the line-extension and any others that follow. Likewise, line extensions need to build the reputation and equity of the brand. Tide Detergent is an excellent example of this. Tide is the leading detergent in North America by a wide margin. Its sales exceed those of the next several brands combined! It has been able to support a slew of packaging, product and product line introductions such as Tide with Bleach and Tide with Wear Care. Importantly, the performance and ultimate success of these product line-extensions has further strengthened the equity of this leadership brand.

 

In the pharmaceutical sector, brands such as Avastin and Remicade have had similar success by gaining new indications in related science areas (e.g., anti-TNF therapy) that are effective in addressing different diseases (Rheumatoid Arthritis, Crohn’s Disease, etc.). The success in the primary, or first, indication lends credence for performance in other “indicated” disease states. In the case of Remicade its success in treating Rheumatoid Arthritis helped extend its success in being adopted to treat Psoriatic Arthritis. And these successes in turn led HCPs (health care practitioners) to choose Remicade over products with fewer indications. (There are other reasons for choosing Remicade but more indications in related science areas reinforce perception of efficacy they can count upon.) HCPs may even use a Rx product off-label based upon their success in treating other diseases and confidence in the drug’s efficacy.

 

2.  Stand for the things that matter to your constituents. The Democrats have pushed for social issues, which are certainly not unimportant. However, in some instances, many Americans may already be moving faster on these issues than their government. Importantly, Americans see other issues such as job creation, economic prosperity and education, as more critical to their future and that of the nation. Democrats did not advance their thinking on these issues nor did they support their stance on legislation they passed such as the Affordable Care Act, which is derogatorily referred to as “Obama Care.” In fact, they ran from it as they ran from the president.

 

Not only must marketers stand for something, it must be relevant to customers and meaningfully differentiated versus competition. It seems that so many brands claim the same exact benefits, in the same exact ways, as their competition. This reduces customer choice to pricing. Part of this sameness traces to similarity of products (and their performance) and focusing on the primary category, or generic, need of customers as revealed by marketing research. Marketers need to go beyond generic product benefits and tap into brand benefits (as in a Brand Idea, which we’ve also covered in past issues of DISPATCHES) if they are going to achieve meaningful differentiation. For example, Gatorade can’t beat PowerAde on thirst quenching or isotonic properties based upon their respective formulations. However, Gatorade can beat PowerAde with its brand equity, built upon professional and collegiate sports associations,’ along with professional “alpha” athletes,’ endorsements for Gatorade as the fuel of champions.

 

If Rx (prescription drug) compounds produce similar (or the same!) clinical results, then it is imperative for the marketer to find or create a place where s/he can win. Zithromax could not beat its antibiotic competitors on potency and ability to more significantly reduce infection. So it took a different route. HCPs believed that many patients were receiving more antibiotic than needed (or warranted). Zithromax was positioned as the first line antibiotic to reduce patients’ exposure to a level of antibiotics that they might not need. With Zithromax and its Z-Pak it has been “5-Days and you’re done!” It is not just about efficacy but HCPs making a smart and responsible choice.

 

3.  Do something. This congress is known as a do-nothing congress. (This includes Republicans!) They’ve passed very little legislation and that which they have passed tends to be either unpopular or controversial with mainstream voters.

 

Don’t just do anything. Focus on innovation. We need to keep our brands fresh through innovation. The innovation may come through product improvements (Colgate Total in the toothpaste category, IOS updates, iPhone 6) or new indications (Xarelto for joint replacement surgery, Enbrel for Psoriatic Arthritis and Crohn’s Disease), new to the world products (robotics in the medical device sector, natural antibody triggers to defeat cancer in the pharmaceutical sector), advertising campaigns (“Priceless” campaign for MasterCard, Snickers “You’re Not You When You’re Hungry), packaging (Coke Share Happiness can in Asia, Zithromax Z-Pak), use of new media (Ikea “bookbook” – Ha! Gotcha there!!, Coca-Cola’s use of vending machines to attract and engage consumers), promotion (Coca-Cola “consumer names on packaging”), service programs (Amazon Prime and Unlimited), etc.

 

Innovation need not be disruptive. (Although we like it to be disruptive because it turns competitors on their heads.) It could be evolutionary. But it should be more than a fresh coat of paint (i.e., changing the packaging graphics or issuing a new sales aid). Perhaps, we should consider the Japanese practice of Kaizen, continuous improvement. This is basically what we get with software updates. While it is not earth shattering it is adding value to your offering.

 

4.  Don’t believe your own press or, worse yet, your entourage. It’s important not just to talk to those who love you but also those who, well, think differently! Talking with those who love you may not only give you a false sense of security but it may even stunt your growth. Instead of making improvements and course corrections to get closer to customers one may actually lose connection and drift away from building a broader and/or deeper base of satisfied constituents. Oh, yes, we must be humble. President Obama initially claimed the election results were not repudiation of his policies or of his leadership. That’s certainly one way to look at it; some might even say it’s a very self-centered way. It suggests only one perspective and the firm belief that its holder believes it is the righteous one.

 

Initially following the public outcry against New Coke, the company’s leadership attributed it to the media as opposed to broadscale consumer dissatisfaction. Classic Coke (i.e., the original Coke formulation under a new trademark) was reintroduced to quiet the media and appease vocal consumers. Senior executives believed that once the noise died down New Coke would become the dominant brand. We all know that it didn’t happen quite that way.

 

When we listen to our customers we learn and with that learning comes the opportunity for change and growth. Apple believed that it did not need alternate sizes of iPhones and iPads. But the marketplace, through acceptance of competitive products, suggested otherwise. Apple listened and has introduced choices in sizes for each to help it remain competitive.

 

Please don’t believe, or allow others to lead you to believe, that your competitors are dumb, or don’t know what they are doing. Your competitors hire marketers that graduated from the same schools and have similar experiences and successes as you and your colleagues in your organization. If competitors are doing something different try to see it from their perspective. And, if it truly does not make sense, anticipate that they will learn from it and change course as the Republican Party did following their humbling defeat in 2012.

 

5.  Don’t blindly follow marketing research polls. The polls had this election figured incorrectly. They had Democratic candidates in the lead that lost at the voting booths. They suggested the margins would be closer only to be surprised by landslide victories. This was no different than the 2012 Presidential election, which predicted a closer race between President Obama and his opponent Mitt Romney.

 

Marketing research should aid our judgment not replace it. Customers may not know how they feel. Or they may say one thing only to our chagrin do something entirely different. Or they may simply have a change of heart brought on by reflection or the influence of others. Or it may merely be an indication of outdated or faulty research.

 

MasterCard has been growing its business over the past 17-years in large measure to the success of the “Priceless” campaign, which was introduced in 1997 (originally, “There are some things in life that money can’t buy. For everything else there’s MasterCard”; currently, it’s “That’s MasterCard. That’s Priceless.”) Yet advertising research predicted it would fail. It generated well below average purchase/use interest. Despite the research results, MasterCard management felt they had a strategically sound and differentiated, creatively impactful campaign. So they went with it. The results proved the research wrong and its success is a daily reminder of the limitations of research and blind obedience to it. Of course there have been times when marketers have misread or ignored valuable feedback from customers. Therefore, it’s important to get beyond the “what” to understand the “why” and use it to aid your judgment.

 

As we’ve stated many times, we believe in the importance of marketing research when intelligently applied and appropriately analyzed. We also repeat our earlier declaration that it should be used to aid judgment and not replace it.

 

6.  Analyze and adapt. No, the midterm election results aren’t something for just the pundits. It’ also important for the Democratic Party to conduct a thoughtful post-mortem on the results and look for learning (as the Republicans had to do following their loss in 2012). It might even be a good idea to listen to what the pundits have to say regardless of their biases and agendas. Importantly, it’s not enough to analyze; one must adapt or face future defeats.

 

Marketers need to inspect their outcomes to determine if they are consistent with what they expected. We say, “Inspect for what you expect.” Importantly, if we are not delivering what we expected then we need to address causal factors and take corrective action. Viagra was initially being studied for heart health but failed. Ah, but there was an interesting and unexpected outcome. It treated E.D. (Erectile Dysfunction). Similarly NutraSweet was intended for other uses but scientists found its sweetening properties to be compelling. So it became an artificial sweetener (left-hand sugar molecule that provides more sweetness than sugar without the calories).

 

The Marlboro cigarettes brand (Ugh!) was originally positioned as a cigarette for women. But it fared poorly in the marketplace. It was repositioned and the rest is history. It went from feminine to rugged masculinity to unbridled independence. It became a worldwide success,

 

Lite beers had failed before Miller Lite. Men weren’t interested in low calorie or carbohydrate (Gablinger’s) beer. Calories, or the lack thereof, weren’t important to heavy (i.e., high consumption) male beer drinkers. And, they firmly believed that reducing calories would compromise taste. (They probably didn’t know what a carbohydrate was at that time.) However, what was important was/is not getting bloated so they could pound down a few (or more) beer. As a result, the development of a campaign that built Miller Lite, (and legitimized the Lite segment) “Tastes great. Less filling.”

 

However, it’s not just about product and positioning, although these are key drivers. The practice of analyzing and adapting could and should encompass all marketing mix elements and tactics. For example the Democratic Party had great success in 2008 and 2012 using social media to win voters and get out the vote (particularly within minority segments of the population). The Republican Party was caught flatfooted. They learned, adapted and adopted the practices of their competitors to narrow the gap and achieve impressive wins at the polls (voting booths).

 

One last thought for your consideration, don’t rest on your laurels. Yesterday’s success does not guarantee success today nor in the future. If you doubt this then compare the results of 2012 and those of just two-years later, 2014. We’ll see what Republicans accomplish with their majority and be watchful for the 2016 results. Don’t let success breed complacency and inertia. Otherwise you may see your majority turn into a minority!

 

Customers cast their vote with purchases. Best wishes for getting out the vote, early (and often – ha-ha!) for your brand.

 
Richard Czerniawski and Mike Maloney

 


Richard Czerniawski


430 Abbotsford Road

Kenilworth, Illinois 60043

tel 847.256.8820 fax 847.256.8847


reply to Richard:

rdczerniawski@cs.com or

richardcz@bdn-intl.com

 

 

Mike Maloney


1506 West 13th

Austin, Texas 78703

tel 512.236.0971 fax 512.236.0972


reply to Mike:

mikewmaloney@gmail.com or

mwm@bdn-intl.com

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