Week 12 - Community Relations

Customer Relations and Social Media - Reflections from the Readings and Videos

The advent of social media and the internet has been transformational in how quickly information can be spread and accessed. This can have both positive and negative consequences. On the positive side, companies can reach farther and wider much more quickly and much more cost effectively than ever before. People can connect in a way that transcends geographical boundaries like never before, and support one another and create virtual communities for common causes. On the negative side, bad press (either justified or not) can spread much more quickly than a company may have time to respond, and also adding in the factor that it is impossible to control. Social media can be much more anonymous as well, which makes it very difficult to pursue legal remedies for misinformation.

And there is no limit to the amount of misinformation that gets published. Any person or group with an agenda can propagate whatever message they wish, and we see this play out in the bitter vitriol ever present in political campaigns. Another example is that Medical websites and wikis are not always accurate. This has resulted in the increase of technologically savvy public relations teams present in various organizations, which has now become a necessary tool to conduct business. Constant monitoring of the “buzz”, contingency plans on response to negative press will be the new norm. Privacy issues will need to be addressed, as the lines between work and play get more blurred in the online reality. Clear policies need to be established and communicated to employees on what is expected both at work and at home regarding what is published online.

At my company, we have embraced social media and internet technologies to promote the company vision, mission and values, as well as our product launches and services. I believe we have been especially effective in using social media to enhance our recruitment activities, reaching out to a younger generation of potential employees who have increasingly embraced new technology as a given. We have websites to process and advertise candidate applications, groups established on LinkedIn, Facebook pages, and Twitter feeds. In my role in the UK, we are using social media to market our upcoming launch of Euro6 engines: http://cumminseuro6.com/ . Our press release included all our marketing materials on a clever credit card sized USB flash drives with the logos emblazoned on them, including links to all of the social media regarding the products.

While I believe the social media formats will continue to establish as the dominant form of communication moving forward in the near future, I don’t believe this necessarily means it will fully replace more traditional formats. People are not online 24/7, they still watch television and drive by billboards, and do other things besides sit in front of the laptop or play with the Smartphone. The mail service is not going away anytime soon, as there is still a significant portion of the population who do not have access to online media. Although I would look forward to the day when I receive much less junkmail in the post! Although I will most likely not be around when this day comes, I do worry about the loss of significant pieces of our history which exists only in the virtual format – if we ever do run out of cost effective energy, it will be difficult for anything not in actual print to survive the ages.

Week 11 - Customer Lifetime Value and Rosewood Hotels

Customer Lifetime Value – Reflections from Customer Profitability and Lifetime Value

I do not have direct visibility to how my company knows the value of its customers. I believe there are some fundamental concepts of CLV that could be used, however, the nature of my company’s business is such that it primarily business to business relationships, rather than selling direct to the consumer. Since we sell engine systems, it is often necessary to work with OEM’s, which require individual attention and a case by case valuation. Our Marketing function therefore assigns account representatives for all of the major customers, and the smaller, more niche market customers are attended to by the Distributorship network. The Parts and Service division is probably the closest analogy to the model of product being bought directly by the consumer. Because of the B2B aspect, and being very tailored to each customer, I believe it would be difficult to apply the formula as it is being used for the retail examples in the article.

Unfortunately, all of my old pictures
of Massave Video are on "real" film, and
back in the US. But, this does look a little
 like my store.

I started a video rental business in 1997, called MassAve Video on 425 Massachusetts Avenue in downtown Indianapolis (no longer there though!). Although I sold my interest in the venture in early 1999, the business survived for almost another 10 years despite the shift in technology trends that buried most brick and mortar video rental stores, including Blockbuster. I can tell you from firsthand experience that there is certainly a cost to getting customers and quantifying the returns from those efforts, and I humbly wish that I would have had this Marketing Class back then. I could have definitely utilized the CLV aspect, to help me to identify which customers to target, measure from my own databases on which customers were actively renting for promotional considerations, and which customers to stop wasting my time with. I remember my first advertising campaign – I printed our logo with a coupon for a free introductory rental on colored half sheets of thick paper (about 5000 copies), and canvassed the Chatham Arch neighborhood with them, some by direct mail, others of me walking around and distributing them myself. The campaign netted around 300 customers in the first 3 months. By the time I sold my share, we had about 1700 customers in the database. I could certainly write many more blogs about things I learned (including many humorous stories) and what I would have done differently during that time. I also won’t go into my thoughts on their target segmentation after my departure, which was definitely towards the over 18 crowd!  Despite my lack of marketing knowledge at the time, the store actually did decent business and we broke even in the first year. Running a small business was a true learning experience that has helped me keep perspective working in a large corporation.

The Rosewood Hotels Case Study

The Rosewood Hotel case outlines the challenge in trying to keep those with a traditional view of the brand while trying to appeal to a larger market opportunity. The goal is that they want their customers to recognize and utilize other Rosewood locations, but customers seem to be unaware that these hotels exist or are connected to the same parent company. They want the enhanced name recognition by making the brand more prominent, but don’t want to lose the impression that each hotel is so distinctive and posh, that each property speaks for itself without needing such “common” advertising.

It seems to me that there can be a balance to achieve both goals, if the message is shaped thoughtfully. Associate the brand of Rosewood, but highlight the distinctiveness of each location while emphasizing the standard expectations of exceptional quality and service via the brand. I don’t believe this would really cost that much more than implementing the loyalty program proposed, and could be handled creatively while guests are staying at the hotel. Printed material in the guest rooms can highlight the other locations, and reservations can be directed through a common website using today’s internet technology. Email confirmations can include promotional material and links, and they can target major travel publications to advertise collectively rather than individually.

Rosewood Little Dix Bay

For myself, I am eyeing the resort in Virgin Gorda, BVI. After 6 months of dreary grey cold and rain that is the hallmark of English weather, I am ready for some warm Caribbean sun, beaches and fruity drinks!

Week 10 - Intro to Brand Valuation

Brands – what do they do, what makes them valuable, how do we account for them?



Honestly, what motivates someone to
put this on their vehicle, besides an
irrational brand loyalty? Still, these are
quite popular, and one can pick what
brand they want to show dislike for.



A successful brand evokes recognition and value in the eyes of the consumer. They can play upon strong emotions, such as tradition. If my mother’s mother used Clabber Girl Baking Powder for the traditional Christmas dessert, than that is the one that I also must use (or it just won’t be the same). My grandfather was a Ford dealer for decades starting back in the early 50’s (Tom O’Daniel Ford right in Bloomington), his dedication to the brand was so especially fierce, that my bringing home a Chevrolet resulted in open disappointment. He was always trying to get me to the dealership long after he retired, saying that only Ford had the value and quality worth having. He was thrilled in 1998 when I bought an Explorer… I never had the heart to tell him it was the worst vehicle (it was expensive, thirsty and had lots of problems) I had ever owned!    

The next Pepsi campaign to feature
Michael Jackson

A brand is a product’s reputation, built bit by painstaking bit, to portray what the company wants the consumer to perceive when they see the brand. This could be low cost, quality, performance, status, etc. It takes great effort to build the brand and it is all too easy for the reputation to become damaged, for instance by a quality issue or campaign. Once that trust is damaged, it can be rebuilt, but takes a tremendous amount of time and effort. We have the example of Tiger Woods to demonstrate this. However, in Tiger’s case, I do believe that he may be on the cusp of rebuilding much of what was lost. I see that Pepsi is getting ready to introduce a new promotion featuring Michael Jackson. Who would have thought, after all of the scandal surrounding MJ, that a strong brand like Pepsi would use this as their primary strategy to claw back declining market share from its competition? http://abcnews.go.com/blogs/business/2012/05/pepsi-announces-michael-jackson-ad-campaign/

A brand also defines to the consumer what to expect when they buy the product; a brand implies a consistency that consumers come to rely on. One can be assured that entering a McDonalds’ anywhere in the nation, that a QuarterPounder with Cheese will look and taste exactly the same. Although there is a focus to adapt the brand to respond to regional tastes and cultural expectations, McDonalds has been very effective at promoting the brand all over the world.

Where's the Beef? I took this picture while travelling in India
last year. Instead of the Big Mac with hamburger, McDonalds has
introduced the Chicken Maharaja Mac. The Filet-O-Fish is the same.

Therefore, what makes a brand valuable? It is that despite the availability of substitutes at lower prices, consumers are loyal to purchasing the brand. They promote the brand themselves by word of mouth, by wearing  promotional clothing, by decorating their homes and vehicles to let others know about the brand. Consumers derive self-esteem from promoting the brand. The fact that anyone would pay $1700+ for a Gucci handbag that costs $50 to make is the overwhelming argument (although incomprehensible to me personally) that brands matter, and that they are valuable.  

I believe that brands should be included on the balance sheet, although I still struggle with an objective way to quantify them, despite the methods mentioned in the Brand Valuation article. To me, it is just like a tangible asset, and Professor Talbot mentioned real estate as a good example in his video. True value is what someone else is willing to pay for the asset, no matter whether it is tangible or intangible. We know that if McDonalds’ or Coca Cola were to be acquired, it would cost much more to purchase than just the value of their buildings and equipment. It is this excess that should be placed on the balance sheet.