Insight from a Marketing Master

John Quelch was one of ten marketing experts profiled in the 2007 book, Conversations with Marketing Masters, authored by Laura Mazur and Louella Miles. A professor at Harvard Business School since 1979, he is known worldwide for his research on global marketing, global branding and marketing communications.

Prof. Quelch is a non-executive director of WPP Group plc, the world’s second largest marketing services company, and of Pepsi Bottling Group. He served previously as a director of Reebok International.

His blog: John Quelch Marketing Knowledge can be found at http://discussionleader.hbsp.com/quelch. Following are some highly astute insights published on the blog:

Building the Global Brand

Quelch points out the Ford used to a global brand, but has lost its international status and has been replaced by Toyota.  The Ford formula was to adapt its manufacturing platforms, features and model names from one country to another, he writes.  However, this Ford system created major problems such as: added manufacturing and supply chain costs and bureaucracy stemming from regional managers fighting to defend their territories. Through the fall and decline of Ford and the rise of Toyota, Quelch identifies five qualities that have put Toyota into the spot once held by Ford:

• The same positioning worldwide. This provides a combination of functional product quality and innovation with emotional appeal. Think Coca-Cola and Disney.
• A focus on a single product category. Think Nokia and Intel.
• The company name is the brand name. All marketing dollars are concentrated on that one brand. Think GE and IBM.
• Access to the global village. Consuming the brand equals membership in a global club. Think IBM’s “solutions for a small planet.”
• Social responsibility. Consumers expect global brands to lead on corporate social responsibility, leveraging their technology to solve the world’s problems. Think Nestle and clean water.

Branding the Ingredient

A highly successful marketing ploy has been to brand the ingredient because it offers the consumer assurance of quality.  “Intel Inside” tells the computer buyer that the computer’s technology is based on a reliable microchip sub-brands such as “Pentium.”  The orange purchased in the supermarket produce department   takes on a perception of quality when it has a “Sunkist” sticker on it.

Quelch offers four conditions that make it optimal for the ultimate marketer to compromise its own brand by adding the ingredient brand to its packaging and the advertising:

• The ingredient is highly differentiated, usually supported by patent protection, and so adds an aura of quality to the overall product. Think Gore-tex for water resistant rainwear.
• The ingredient is central to the functional performance of the final product. Think Shimano gear systems on performance bicycles or Monsanto’s Nutrasweet, added to Equal sweetener.
• The final products are not well-branded themselves, either because the category is relatively new, because customers buy infrequently or because there is low perceived differentiation among the options. Think about all of Dupont’s ingredient brands for clothing, from Rayon through Lycra.
• The final products are complex, assembled from components supplied by multiple firms who may sell the “ingredients” separately in an aftermarket. Think cars with Michelin tires, Dolby stereo systems and Champion spark plugs.

Customer Clout

Quelch points out that marketing is “99 percent” focused on how to sell to customers.  However, he notes, very little attention is paid to how the customer can obtain a competitive advantage in competing for the attention and good-will of the seller.

Are all customers created equal?  Quelch observed the obvious when he says they clearly are not and points out the realities of the marketplace that give bigger customers  better treatment than smaller ones, and frequent customers better treatment than the occasional ones.

Quelch has some ideas on specific behaviors that, in vendors’ views, can elevate a customer:

• Be Demanding. Make sure the vendor knows you have other options, that you’re going to seek out more than one bid. Ask for references, a good supplier will be glad to provide them. Don’t be afraid to negotiate and pin the vendor down, but don’t overdo it.
• Be Respectful. If you want your vendor to do a good job, respect him (or her). Treat him as a professional. Don’t be haughty. Be on time. Ask his opinion. The golden rule applies to customer behavior as well as vendor behavior.
• Be Reliable. Do what you say you’ll do. Don’t keep the salesperson waiting if she’s come to your office for an appointment. Pay on time. Don’t try to nickel and dime the seller. Don’t ask for free value added services that weren’t part of the original deal.
• Be Surprising. Reward a job well done. Leave a tip. Pay a little over the contract price if the seller’s costs clearly exceed expectations or promise to refer the supplier to a friend. You may want to do business with the same supplier again (Why waste time on selecting another vendor from scratch?). You’re going to enjoy more timely and more customized service next time if you leave a good impression.
• Be Engaging. Differentiate yourself as a customer by engaging the seller in some friendly conversation. You may get an extra shot of whipped cream in your café mocha if you’re nice to the barista. Treat the seller as an equal, as a problem solver rather than a mere order taker. The seller may be able to confirm or broaden your perspective. In some cases, you may even have expertise that can help the seller do a better job for you.