The Brand Man Speaks

Lexus dumps brand's signature voice over talent; picked up by Mitsubishi

In a surprise branding move, Lexus has dumped its voice over pitchman of 20 years in favor of younger talent. Although changing voice overs is usually not a big deal in television advertising, the actor who launched the Lexus brand and its "relentless pursuit of perfection" slogan had become a key element of the brand and its identity.

James Sloyan's soothing, elegant, but firm voice became as recognizable as the Lexus car itself. You didn't have to see the ad to know it was for Lexus.

Then imagine my surprise the other day when I heard that same famous voice saying the words, "Lancer by Mitsubishi". I was incredulous. How could that be? I wondered if Sloyan wanted too much money during contract renewals or someone at Lexus had lost their mind? I even wondered if the voice for the Mitsubishi ad was a close copy and not the real thing, but after repeated hearings it was clearly Sloyan's.

Building instantly recognizable brands that transcend the actual media in which they are promoted is not an easy task to achieve and Lexus had made that happen.

So what gives here?

Here's what I learned today from an online automotive industry forum.

February 10, 2009 - A fresh voice narrates the latest commercials for Lexus. Continuing on that path of "The Pursuit of Perfection", Lexus has made that change, most recently with the latest blitz of new commercials for the 2010 RX. There is a new voice in town and like the previous voice over actor, his name happens to be James too.

Who is this new James you may ask? His name is James Remar. Some of you may know him as one of Samantha Jones (Kim Cattrall) boyfriends on the popular HBO show, Sex and the City. He was also casted in movies such as 48 Hours, The Phantom and also 2 Fast 2 Furious. Remar has narrated the latest commercial ads for the new RX spots. He will also be the voice for future Lexus ads.

For 20 years since the inception of Lexus, we have seen, heard and lived the many "Relentless" and "Passionate" evolutions featuring that distinct voice. That distinct voice belongs to actor James Sloyan. Although we will miss the original Lexus voice, we will never forget those original Lexus benchmark commercials and the regal narration that Sloyan established for the industry. Think LS400 commercials and the infamous champagne glass smoothness test. Thank you Mr. Sloyan for all the years of Lexus pursuits.

"Thank you Mr. Sloyan for all the years of Lexus pursuits"?......wait a minute. This might have been a major mistake for the Lexus brand and a smart move for Mitsubishi. Now, the Mitsu brand gets instant attention for the confusion and increases  awareness of its new sportier Lancer model. Yet, Lexus loses a valuable asset especially since this automaker isn't about radical changes it is about evolutionary improvements to a great automobile...staying the course...consistently delivering...so why would one risk undermining the brand strategy by dumping a brand component as golden as the product itself?

I plan to investigate further, but believe this was not a smart branding move.

Watching out for you everyday.

Eli

WalMart trying (again) to go upscale with offerings to keep more affluent consumers

WalMart has been one of the few bright spots in the retail industry over the past two years since the recession began. Its strong value proposition has reinforced its relationship with lower income Americans and has brought in more middle class consumers and some upper middle class folks as well. Everyone seems to be looking for a bargain or at least the lowest price on the items they need for everyday living.

Empirical evidence does show that more middle income consumers are willing to go to WalMart instead of Target and the other higher image stores they frequented in the past. The question remains can WalMart again try to win over these more affluent consumers for the long term and if they can, do they risk once again alienating their core customer?

Not more than a few years ago, WalMart in more robust times, was upgrading their stores, bringing in higher margin goods and "better" brand names. The plan failed simply because the more affluent consumer didn't become a regular consumer and the core customer felt that WalMart had forgotten them raised prices everywhere and drove these people to dollar stores.

WalMart, after a number of reporting periods with declining sales when others were doing well, figured it out...they did NOT belong in the more affluent consumer chase. They refocused their marketing and ad efforts back at savings and value and business began to boom again.

Along comes the recession and WalMart is perfectly positioned to benefit...and has...from this difficult economic environment. Yes, not unexpectedly given the extent of this near depression economy, more middle class shoppers (who now see themselves a lower middle income) have turned to WalMart. Some upper middle class shoppers (who now see themselves as more middle class) have also sought out savings at the big W. WalMart is benefiting greatly.

Now comes word that the retail giant is not satisfied and is hell-bent on figuring out a way to keep the higher income more status conscious shopper long term. They are already back bringing in higher margin goods, better brands and more "service". The stores are getting major overalls to look more like Targets (again). Will it work this time?

Yes and No.

To some extent the answer is YES because we have seen a significant buying behavioral change among middle and upper middle income consumers. They are giving up their need for status consumption (they can't afford it) and going for the basics with an occasional indulgence. They are acting more like lower income consumers than ever before. I do see a lot of these people continuing to shop for bargains and value over image and prestige long term. This recession has had a profound effect on millions of Americans. They like saving money and the stigma of shopping at WalMart is fading because saving money is more important than where something is purchased.

Will these consumers spend more at WalMart? They already are buying more than commodity items there. But, there does remain a major risk. Going too upscale with goods and brands may again backfire because consumers are in general doing without stuff they do not need regardless of store. Thus, WalMart could get stuck with inventory they shouldn't have added in the first place. I also believe some portion of the upper middle income consumer who now is willing to shop at WalMart will choose to go elsewhere when conditions improve why?

Simple. People still have a tendency to gravitate to people like themselves or those of a higher income level (if they can get into that club). I do not see that psychological element changing long term. Shopping at WalMart is still a stigma for many not just because it is WalMart but because of the fact that it still attracts the kind of lower income folks upper middle income people really rather not shop around.

In research my firm has conducted, we found upper middle income consumers still wary of unemployed young people loitering around the WalMart stores, especially in their parking lots. They find the stores unattractive (even the upgraded ones) and the service extremely poor (despite efforts to improve it). Finally, even though buying cheap is chic, upper middle income consumers still need to feel good about where they shop and indications are most will abandon WalMart when the economy turns upwards or sooner if other more image oriented retailers lure them back with better pricing and values.

Research also shows that lower income shoppers are having a harder time making ends meet at all and feel that WalMart is still charging more than they should for basics. Further, as before, when lower income shopper see (empirical evidence) more well-heeled folks in "their" store, they become suspicious that prices are going up further and feel maybe it's time to go elsewhere for better prices. Finally, research shows that prices are good at WalMart but many times not the lowest. Surprisingly, more upscale retailers and sundry/drug stores are competing with WalMart prices and in cases beating them. Consumers are more savvy than ever and will seek out the "best" prices. WalMart is trying to deal with this new competition by advertising they are constantly researching other stores prices to "ensure" the best prices in their stores....they clearly are aware their value positioning is being challenged by a whole new set of competitors.

Interest times. Interesting stuff. I will continue to monitor the WalMart strategy shift and report back as new information and findings surface. Until then....

Watching out for you everyday.

Eli

Ford takes bailout money from Energy Dept; Chance for brand to be #1

Ford Motor Company has successfully avoided the need to take the government's bailout money like both GM and Chrysler and has been able to keep its employees, dealers and operations mostly intact.

Now Ford has announced that it will take some US Taxpayer money but as an investment from the Energy Department to develop and launch fuel efficient automobiles.

I think Ford is doing the right thing and handling this economic situation far better than its (former) competitors. The Ford brand has enjoyed unprecedented positive perception among the American public because of its expert handling of this difficult economic condition in the auto industry. Fox News asked me if I thought this perceptive would be hurt now that Ford has taken bailout money.

View my interview here:
Ford Takes Government Money

I think that Ford has the opportunity to become the premier auto company in America, a position it has long desired but been unable to obtain. Ford could be the "hero" company that saves the American auto industry if it plays its cards right and brings the right product to market.

Watching out for you everyday.

Eli

Netflix brand evolving while unexpected competition grows from Redbox

I have been a fan of Netflix since its inception. The idea of ordering online, sitting back and having the movies come to your home and just mailing them back (at your leisure) when you're finished transformed how I watched movies. I hated going back and forth to Blockbuster stores incurring late fees and always wishing I had some DVD at home to watch on that unexpected rainy day or "special' evening.

Many didn't believe Netflix would survive. My mom's investment adviser said not to buy the stock despite my strong marketing intuition about the company and its future. To his surprise, but not mine, Netflix has done extremely well in this recession with its stock price doubling.

Netflix is actively competing with itself by offering more downloadable movies directly from the internet to laptop or home TV and smartly understands technology based entertainment is a rapidly moving target. I have yet to download a movie from them, although I have three free movies that are available to me to do so, because I think watching movies on my laptop is disappointing (size and impact-wise) and I have not bought the requisite equipment to send downloable movies directly to my big flat-screen TV....yet.

Despite their success, Netflix has strong competition from an unlikely source, Redbox. Redbox is a vending machine DVD rental business that was started by McDonald's during a time when McDonald's like Starbucks was looking for new revenue streams from ideas inconsistent with their core brands. McDonald's had some success with Redbox but sold the concept to Coinstar this past year after they started investing in the business in 2005.

I understand why Redbox can be successful. $1 rentals of recent releases sold like buying Coke from a vending machine in thousands of locations. However, it doesn't work for me. I hate the idea of having to take the DVD back to some place especially if I am not going that way and find dropping the DVD in the mail so easy and effortless. But I am obviously increasingly part of the minority. Redbox's old fashioned delivery system is growing fast even as movie downloads (on the other side of the technology spectrum) are also developing steam. I suspect I will go the download path far sooner than renting from a Redbox, but that's just me.

Watching out for you everyday.

Eli

Apple Launches new iPhone 3GS today but not without problems

Despite best efforts based on previous iPhone launches where Apple was ill-prepared, Apple faced few but in some cases major meltdowns today.

One horrific example took place at Apple's Lincoln Rd. Miami Beach location at which computer systems died within minutes of serving the first customer around 6:AM, 15 minutes earlier than planned. The early opening was to be a surprise to those who waited in lines from last evening or very early this morning.

The Miami Beach location was unable to take care of any of the people waiting for phones despite a long line of buyers many of whom had preregistered online to buy the phone being assured they would only need a few minutes to set up and pay for the phone and be on their way.

The wait was over three and half hours for many, more for those on line without pre-reserved phone reservations. Management at the local store miss handled their problem during the first two hours by failing to communicate honestly with those waiting. The store was the only one in Florida, possibly the US experiencing major technical difficulties but store personnel initially tried to explain the delay as system wide until people phoning into their friends in line told a different story. Apple Miami Beach ended up with egg on its face for its cover-up.

Even the local AT&T store three blocks away had no problems and no waiting time for the new phone however die hard Apple fans were afraid to leave the line in fear that the information about AT&T's South Beach store would prove faulty.

What still is clear is that despite all the problems Apple may encounter, it has built a brand with great loyalty to the point its fans will be made miserable and unhappy yet remain committed to the brand and its products.

Watching out for you everyday.

Eli

H&M, the cheap chic Swedish based retailer to sell high end Jimmy Choo line

As the economy continues to plague the retail industry, cheap chic Swedish based retailer H&M is taking a step to meld more high end fashion names with lower prices at its stores worldwide.

After showcasing limited edition apparel from such fashion and celebrity names as Madonna, Stella McCartney, Karl Langerfeld, Roberto Cavalli among others, H&M has struck a deal to sell shoes and accessories from luxury brand Jimmy Choo. Choo shoes are most well-known (and rose to notoriety) for their frequent appearance and inclusion in the story line of the TV Show, "Sex and the City". Many feel that Sarah Jessica Parker's character Carrie Bradshaw single-handily put Jimmy Choo on affluent and not so affluent women's "must have" list.

I believe the key to surviving this retail meltdown is providing meaningful and desirable as well as unique merchandise to consumers at a "good" value. Women will always love their shoes but will love them more at a better price. At the same time, luxury brands are suffering greatly and associations with retailers like H&M can help boost consumer interest and sales in these difficult times.

In a related effort, high end retailer Neiman-Marcus announced that it will begin offering more value-priced quality goods this summer and fall to offset the brand's image as only a purveyor of high priced goods. Neiman's like Saks 5th Avenue has seen double digit sales and profit declines for several reporting periods over the past two years and has been looking for ways to stop the bleeding a bit.

The question is; can a retailer like Neiman's go somewhat down market and not tarnish its years of branding itself as a retailer to the rich and famous? Can it offset its long-term brand image to bring in more shoppers? Is this a good idea or just a short-term revenue generating gap until economic conditions improve?

There is tremendous risk for Neiman's with this strategy especially since consumers see little reason for high end retailers to continue to exist favoring smaller boutiques for pricier goods these days...if they are buying at all. Are we seeing the end of the larger nation-wide luxury retailer? Possibly a slow death, however, just changing the goods to slightly less expensive ones isn't the answer. Saving Neiman's, if that even makes sense, requires a complete re-branding effort not a band-aid.

Watching out for you everyday.

Eli

Quirky Saab auto brand sold by GM to high end race car company

The quirky often times laughed at for its off-beat designs auto brand, Saab has found a new owner bringing the brand back to Swedish control.

In the 80's and early 90's Saab rose to prominence as a highly desired brand by American yuppie types who liked its sporty nature, safety and odd but unique look that distinguished it from brands like Audi, BMW and Mercedes. Its turbo convertible helped re-ignite the European small car convertible market.

GM bought the brand in the 90s and watered it down and sanitized it into a bland brand which began to look more like an American car than a unique European automobile. The brand's sales plummeted and have never recovered.

Now Koenigsegg Automotive AB a Swedish high end race car manufacturer has purchased Saab and plans to help the brand get back its prominence in the US market. Koenigsegg is not a player in the mainstream auto market but with financial help from various European sources and the Swedish Government, it feels it can do far more for the brand than GM has in the past two decades.

Koenigsegg will add back models like the 9-3 and larger 9-5 luxury model that GM eliminated.

Watching out for you everyday.

Eli

Yapta.com fare watching service continues to be faulty; check airlines directly

I have written about Yapta the online airline fare tracking service before as my personal experience has not matched the brand's hype. I have bantered with a senior executive over my comments in the past and decided to give Yapta the benefit of the doubt.

Well more bad news friends. Yapta's fare tracking service, based on another personal experience, is totally inaccurate...off by as much as 100%.

I contacted the company and they admitted their information is faulty...but blame outsourcing of data hopefully to be fixed soon. My advice, as before, do not use this service to do your fare checking. Do your own legwork to ensure you get accurate information and do it with the airlines directly.

Watching out for you everyday.

Eli

GM sells Hummer brand to Chinese company; no threat to US military

As part of bankruptcy plans for GM, the automaker is unloading its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Company Ltd. in China.

Hummer, probably the greatest example of how GM went wrong in the past few years, remains a symbol of excess and consumption in this country. Ironic that the brand will now have Chinese ownership as the Chinese people become the leading consumption advocates on the planet.

Good news, the Hummers made for the military are NOT made by GM but AM General an independent company based in Indiana. GM bought the rights to the brand in 1999.

GM is indicating jobs will be saved by this sale. But for how long? Likely the Chinese will take over production within a year's time only delaying the inevitable. Too bad GM hadn't gone the Hybrid route sooner to be able to reallocate these workers rather than laying so many of them off.

On a related note, do you think companies that go into bankruptcy and/or use government bail-out money should automatically fire their CEO and management teams and even maybe their Boards? Might be a good idea.  Why should anyone have confidence in someone or a group of managers who put a company into trouble in the first place to be able to fix THEIR own problems?

What do you think?

Watching out for you everyday.

Eli