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Showing posts with label brand. Show all posts
Showing posts with label brand. Show all posts

Sunday, January 27, 2013

Cost Control Gone Bad..Subway Agrees to Make all "Footlongs" well.. A Foot Long

We have all seen it in just about everything you buy; packaging is thinner (resulting in more damaged product), metal is replaced with plastic, minor features just no longer exist, what was 4oz is now 3.8oz (same price)... well, you get the picture.  To "manage costs" just about every company eventually goes too far.  What is that limit you ask?  It is when the brand promise is violated to save a few cents.

This is the case of the "Footlong" sandwich which it turns out was not a footlong.  At first the company declared that the word "footlong" was more of a trade name and not intended to imply the sandwich was actually a foot long.  Yea right.  And now the company finally comes out and agrees they will make all future sandwiches a foot long.  

I bring this up because all who run companies have to realize there is an unwritten brand promise to customers which cannot be violated or you risk huge backlash.  Virtually every company's single largest asset is its brand and the brand is based solely on trust.  The only reason any brand would command any premium over a commodity price is that the consumer believes somehow the people behind that brand name are doing something no one else is.  So, without knowing what that is (i.e, they trust) people will pay a premium.

When the consumer realizes the trust has been violated they turn on the brand fast and furiously.

This is the reason why there is virtually no intrinsic brand loyalty in air travel.  Most (not all with Southwest being a notable exception) have decided the best way to make money from customers is to declare war on them.  Every consumer of air travel knows it does not cost the company $150 to change a flight.  Yet, the airlines charge it because they are exerting quasi-monopoly power.  Because of this there is no trust and therefore the brand is essentially meaningless.

So, don't forget:  The brand is built on trust and as we see here when the trust is violated, the wrath will come down.

Sunday, November 14, 2010

Supply Chains Used As An Extension of The Brand - Part 1

This week I am going to put some thoughts down about whether companies use their supply chain as an extension of their brand or just as an evil necessity that they would rather do without.  I have personally been involved in many companies and I have seen it done many ways.

Here are some characteristics of supply chains when used in the following manner:

1) Used as an extension

  • Company does not separate the product from the acquisition experience for the customer. They are intertwined.
  • Company puts protection of brand above all else (including cost).
  • Company probably does not do a lot of outsourcing in supply chain (Do you want your brand in another person's hands?).
  • Company cross trains between marketing, sales, product development and supply chain.
  • Company is most likely not "stovepiped". In other words they are not organized around functional silos but rather around products, categories of products or channels / customers.
2) Not used as an extension

  • The reverse of everything above.
  • The customer gets additional feeling of benefiting when dealing with the supply chain. 
  • Service is matched to the brand experience the company is going after
  • Supply Chain is seen as a cost to be cut. 
  • The big one:  When people in the commercial side of the business refer to themselves uniquely as "the business" and the supply chain is just something to execute at the lowest cost imaginable. 
This is just a short list and as I develop my thoughts further I am sure this list will be adjusted and added to.

Can anyone think of a company that makes their supply chain experience part of the brand v other companies which make it just a back office function?