The Brand Man Speaks

How BMW is Undermining Years of Building Fiercely Loyal Consumers

BMW "The Ultimate Driving Machine" has successfully marched to the top of the luxury car sales chart over the past few years, surpassing their long time competitor Mercedes-Benz. However, the brand is beginning to undermine this success in a manner that could be akin to Audi's downfall several decades ago.

Audi, a division of VW, in the early 80s decided to fight claims of "unintended acceleration" made by owners of its vehicles in one of the most famous contemporary auto brand missteps every recorded. The damage was so great the brand nearly disappeared for two decades. Now, Audi, has a sculpted both new cars and a new vision and I believe they learned their lesson the hard way.

BMW has not done anything so bold or notable to many, yet. They are however eroding their loyal customer based in more insidious ways.

My own story is a case in point.

I am a very long time BMW loyalist. Having only owned this brand of car for nearly 35 years. I say that is loyalty. I have been a car club member for at least half those years or more. I have convinced countless numbers of friends and family to buy this brand. So what have they done? To squeeze as much profit out of their cars as possible despite the high price tags (and high margins) they are cutting corners, reducing quality and producing vehicles that start falling apart in half the time of BMWs built a mere 10 years ago. Given the vast majority of BMW buyers (luxury car buyers in general) lease their cars for 3 years, and in the case of BMW, have a four year or 50,000 bumper to bumper warranty (which ever comes first) included in the purchase price, the pain from lower quality product is virtually nill.

Unfortunately, if you keep your vehicle a bit longer than the warranty period REGARDLESS OF MILEAGE (and in my case it was 20,000 on a five year old X5) you have to pay out of pocket for various problems and defects, and you quickly see the problem at hand.

So many things have gone wrong with this vehicle but my dealer isn't surprised. Bushings that were protected with covers a few years back are now left open to the elements and disintegrate quickly. Door handles (essential for getting in and out of the car) are made of plastics that disintegrate from people using them, even not that often. Engines malfunction after 20,000 miles inexplicably. Electrical systems freak out if the car is driven a little harder than just to the grocery store and back.

Actively fighting with both the dealer and BMWNA...and not having use of the vehicle on too many occasions to note, did get some relief. BMWNA did pay for some of these repairs, but the weeks of back and forth were exhausting and anger producing. The lip service from the manufacturer is well studied and presented by staffers apparently specially trained to handle such unhappy consumers. BMW even uses an email account called ironically, "bmwcares". So much effort to stop the most ardent of consumer advocate BMW owners, instead of just building long lasting cars and/or helping vehicle owners more quickly and happily. But alas it is always about profit not about customer satisfaction.

Now dear reader you could say that maybe my car is a lemon and should be "bought back" (in BMW language) by the manufacturer. Well, BMWNA says there is nothing wrong with the car despite the fact that dealer experience proves otherwise...that the brand itself is cheapening the way it builds cars and if you keep your car a while, be in store for some incredibly expensive repairs...even if the car has very very low mileage. Kinda like a ticking timebomb once warranty period is over.

I have spent some time researching this matter and reaching out to other owners, and I am clearly not alone. Most either pay for the ridiculous repairs or dump the cars with fear that holding on to them too long will be crazy expensive. But again, since the vast majority (over 85 %) of luxury car buyers lease, they don't experience this issue and BMW is banking on this.

In my case after 35 years I think I am done with this brand and the manufacturer offered me a token sorry to see you leave $1,000 off a $90,000 replacement vehicle. Ya that means a whole lot to me.

Watching out for you everyday.

Eli

 

Bieber the new Calvin Klein Underwear model? Are you kidding me?

Not since The Gap made the huge error of hiring Sarah Jessica Parker to be the spokesperson for its brand some years back has a major apparel brand made such a celebrity endorsement error as Calvin Klein. Parker who in her own day to day life is a frugal style maven was seen by consumers as her character...Carrie Bradshaw the struggling perpetually single NY writer who was obsessed with trying to afford expensive clothing brands and shoes and wouldn't be the slightest interested in The Gap. The Gap which had given Parker a multi-year contract dropped the campaign less than two months after it first aired.

Clearly needing PR attention the ailing CK underwear brand which has been losing marketshare to numerous other brands (Diesel, Emporio Armani for example) choice of Justin Bieber seems desperate.

It's been quite some time since Mark Walberg then Marky Mark donned the Calvins and forever changed the way men felt about being "exposed" in their underwear. He brought a tough, sexy, alpha male, muscular look to the campaign that has followed with many other good looking well built men over the past decades.

Being a Calvin Klein underwear model has been a trophy for a group of select men who have posed on multi block long billboards in Times Square in NY and in fashion magazines and on the side of public buses for years in nothing but their Calvins. A level of achievement for a guy whose look body and swagger made the brand the choice of women who wanted their guys to look rugged and sexy in their undies as well as both gay and straight guys with great abs who bought the underwear for themselves to show the results of their hard work in the gym.

The brand was about showcasing your "assets" and sexiness.

The choice of Bieber is surprising and not surprising. Surprising because the performer is more little boy (trying hard to be tough) than man, has a skinny body most men are not inspired to want (rumor has it they heavily photoshopped his body to make it more masculine looking), and appeals to huge legions of little girls not testostorone infused guys. His millions of internet fans makes him one of the most followed celebrities, however, upon inspection the vast majority of the followers are not the targets for Calvin Klein underwear. That is, unless, the brand is now trying to sell its men's underwear to little girls?

Not surprising because the CK brand has been in trouble for some time as the hot men's underwear market has grown substantially with numerous smaller sexier more exclusive offerings. This campaign has already proved to generate millions in free publicity...and they say any publicity is always good...however, a general perusal of comments online about this celeb choice appears to show a HUGE negative reaction to Bieber and vows by CK fans to stop buying this brand and move on to others.

In my professional opinion, I don't think this ad effort will generate the kind of sales long term that the company hopes. Maybe a spike short term but the brands (Bieber/CK) do not match. Bieber is not worthy of becoming part of the Calvin Klein underwear legacy because he brings nothing to the party that is consistent with the history of the brand.

Radio Shack to close 500 stores just after launching new ad campaign

In what seems like ill-timed announcements and (superbowl ad) expenditures Radio Shack apparently will be closing 500 stores in the near future (Radio Shack Closing Stores). The electronics retailer has been struggling for years to figure out where it stands in the marketplace and in the opinion of this branding guy has been clueless. The new "brand" campaign launched on the superbowl shows 80s icons throwing out the old Radio Shack to make way for a new version, 3.0. (Yes, been there done that already folks a few times). Cute ad fun to watch but means nothing really.

Radio Shack reminds me of JC Penney and Linen and Things (now defunct)...retail brands that don't have any reason d'etre or purpose. No clear positioning but just seem to hang on and exist until they die.

Sure the stock surged a bit based on viewing of the new TV ad giving the impression the brand was finally throwing out dead wood to make room for the "future". But it remains to be seen what that future brand will really look like. Re-inventing a brand is FAR MORE than just one cute ad. What was missing is what is the positioning for the future. I know it was well received by viewers...sure, it was entertaining but as anyone in the ad business knows, entertaining ads many times do NOT drive business.

Years ago Radio Shack was the place to go for electronic hobbyists but as the world changed and the internet became our link to find stuff you needed--especially more up to date and relevant stuff you needed, the retailer readily became obsolete, just its management wasn't ready to give in. Numerous re-branding efforts have failed. (Most recently "The Shack"...huh? meaningless). It tried to become a mobile-phone centric retailer but failed because of too much competition in that field. Additionally, in my personal experience the retailer's staff are some of the most unfriendly people in electronics or any business for that matter....to the point of arrogance or maybe its disinterest. That certainly didn't help.

It is time for the brand to close shop OR find some very meaningful way to connect with consumers...which I do not think is in the cards despite Hulk Hogan and the other 80s icons who caused us to smile.

Watching out for you everyday.

Eli

JCPenney continues to make stupid branding mistakes. Changes logo again. Time to say goodbye

In another lame backwards move to try to stay alive, mid market retailer JCPenney has announced it is eliminating its contemporary American flag style acronym logo (JCP) and re-using its old (and tired) logo from the past.

This company just doesn't get it. Changing the logo for the 3rd time in a few years only causes confusion among consumers but more importantly is just a veneer fix. The real problems strategically with the retailer are not getting resolved and a graphics change won't save them. Period.

It is astounding to me that such a huge company can't find the right people with the right talent to save this place. Maybe it just shouldn't be saved, the brand should fold (the stock is tanking as would be expected) and just sell off its real estate and be done with it.

I have written numerous pieces on this failure of gigantic proportions as have many notable branding experts. This is just another case of my "father's Oldsmobile"....a dated out of touch business that has lost its way has no sense of its reason for being and connects with fewer and fewer consumers everyday.

This will surely be one of the great brand case studies how to destroy a brand.

Watching out for you everday.

Eli

Apple clearly losing its mojo, losing sight of its rasion d'etre

I have been unabashedly a long time fan of anything Apple. I don't own any IT equipment that isn't made by Apple along with all the rest of the accessories and other toys.

I have from the beginning talked and written about Apple as the gold standard of how to market a business and make it an iconic brand. The company was highly successful because it created a journey for its loyalists to go on even if the journey included the creation of demand for things none of knew we needed. It as brilliant.

People clammered for Apple products for more than just the product themselves but more importantly what it said about "you" as an owner/user of Apple branded technology and what kind of lifestyle you wanted to lead. People were enrolled in the brand's essence, emotionally connected to any and all things Apple.

In the past two years since Steve Jobs died it does seem Apple has lost its Mojo. The brand is losing its luster, and loyalists are bored and feel there is no longer a meaningful journey to follow. Focusing on pricing (the current debate about the iPhone 5C and 5S) and competiting as a commodity can mean the death for any company.

In recent days all I read about is how Wall Street analysts are finding fault with Apple's pricing strategy. That may be a valid point. The bigger issue for a brand marketeer such as myself is why isn't anybody calling Apple out for losing its brand focus? That's the real story.Apple's current Ad Campaign is the worst in years and puts most people to sleep or is just ignored. Millions wasted.

If Apple can't find that Mojo again and it doesn't bring its loyalists back on a journey the company may forever fall out of favor and become another Sony. Sony, as you may remember, lost its way when it signficantly cut back R and D to shore up its P and L (and its Wall St position) after spending years as the most innovative personal electronics company on the planet. That mistake proved fatal to Sony who is now considered a second or third tier electronics company with dull commodity products. The brand was forever damanged and weakened by that short term decision.

I am hopeful both as a current Apple loyalist and stockholder that someone will save the day and re-open that pathway to an exciting journey for another decade or more.

Watching out for you everyday.

Eli