Kodak and the Tyranny of Brand-Centrism - a post by Kevin Clancy (Brand ManageCamp 2005 speaker, Chairman/CEO of Copernicus Marketing and author of Couterintuitive Marketing)
In a recent piece for Ad Age, marketing guru Al Ries made the statement: “Fundamentally there are two ways to increase sales: (1) Expand the brand, or (2) expand the brand’s market share....While it’s more difficult to expand a brand’s market share, this is the better way to go. The larger the market share,” Ries writes, “the more powerful a brand becomes. Unfortunately, he laments, “Overwhelmingly, marketing managers believe in the expand-the-brand philosophy.”
I’d substitute market share for customer base, but commiserate with venerable Al. When it comes to taking actions to grow the bottom-line in the short- and long-term, the discussion more often than not is what are we going to do with the brand, not what are we going to do with customers.
Take the recent marketing efforts by Eastman Kodak. “Most corporate marketers would be overjoyed if consumers considered their brand to be a loyal, reliable, trustworthy old friend,” reported The New York Times. With its film business in decline, Kodak began building its digital business where it could channel its vast capabilities and customer relationships, developing new service offerings (digital radiography, internet archiving, commercial digital print runs) and products (the EasyShare). The company seemed to be taking the customer-centered approach, but then brand-centrism reared its ugly head.
“I told Carl [Gustin, Kodak’s CMO], ‘Keep the trust and the warmth, but make the brand innovative and cool and digital’,” Antonio Perez, Kodak’s CEO, told The New York Times. “The only thing we’re keeping constant is the red and yellow colors, and the Kodak name,” added Mr. Gustin. The company points to research conducted by its ad agency that consumers around the world think that Kodak is not only not cool, but also that when it comes to digital, “they perceive the brand as lacking momentum, credentials, or innovation stripes,” according to Kodak’s agency account chief. Now Kodak’s digital business is growing at an impressive 35+ percent annual rate and the Kodak EasyShare camera occupies the top spot on the world’s best-seller list, so one might ask the question how critical “coolness” and “innovation stripes” really are to Kodak customers who seem to gravitate to the brand even though by all accounts it’s pretty dull and basic. One might also ask the question what kind of new products and innovations is the company coming up with to substantively address this apparent hole in its image—according to the Times article, there have been design changes, but it doesn’t sound like truly innovative, leading edge new products. Instead, there’s a new ad campaign, potentially a new logo, and a PR effort with consumer electronics folks.
As an alternative to Kodak’s approach, take a look at American Express, “the 155-year-old financial-services firm long known for catering to gray-haired executives with expense accounts,” courtesy of The Wall Street Journal, in “a high-stakes hunt for young customers.” Rather than try to convince anyone that American Express isn’t for corporate suits, it introduced a new series of no-fee credit cards, “for urbanites who are single, age 25 to 35, dine out often, like to drink and aspire to be hip,” the first of which it dubbed “In:NYC,” with “In:Chicago,” and “In:LA” cards planned for later this year. Like other Amex cards, it plays up the benefits of membership (holders can earn points toward a private booth at an ultra-hip bar and discounts at trendy restaurants), the common denominator among all of its card marketing efforts, and it’s clear it’s an Amex card. Yet marketing efforts focus on building membership for In:NYC—ads tout the “über-glam lifestyle you’ll easily become accustom to” not American Express. Amex reports 90% of the people who have signed up for the card have never had any type of American Express card before and more than half are under age 35.
The tyranny of brand-centrism continues to undermine otherwise healthy brands and companies will continue to struggle with expanding into new business areas and/or attracting a new segment of customer if they put brands before customers.