Branding its way into bankruptcy
The movie business invest 30 million dollars to launch a film. Marketing accounts to the bigger part of the production of a movie. I recall the name of a Schwarzenegger film written at the side of the fuel tank of space shuttle mission. (By the way the movie "True Lies" was flop)
Unfortunately or, fortunately for the marketing men, the telecom industry is following the movie industry. You can't watch a football game without one of the teams sporting a jersey with Siemens Mobile name on it. Watch a spitting competition or a frog race and you see a mobile vendor sponsoring it. Formula One car race is getting a competing race season: the drivers have run out of space in their uniforms to put the name of sponsors. Now even the stadium are named after a mobile vendor or operator. John Stuart Mill, the 19th-century philosopher, reminds us that lies and propaganda serve a purpose. They give us a "livelier impression" of the truth.
Mobile operators and vendors are pumping overtime hot air into the UMTS/3G balloon. They opened up the Pandora box and now there is not way to put it inside once again.
I we add to the amount of equipment gone to the scrapheap the amount of money going into keeping UMTS/3G in the eyes of the public despite of the undeniably fiasco, the bill can be even greater.
The rise of the mobile megabrand
> The451 - Sep 05, 2001, 04:20 PM ET
> European mobile operators, which have done a poor job of marketing in the past, are now trying to more fully exploit their branding. Some of their current efforts to leverage their brands, however, are destined to be ineffective or even a complete waste of time and money.
> BT has renamed its BT Wireless group as mmO2, and its Cellnet brand as O2. The aim of the branding is to create an image of something "necessary for life." More pragmatically, however, it has no link to BT, or indeed the telecom industry. The 'mm' in the group name does not currently stand for anything specific, although BT has suggested it may represent mobile multimedia or a yet-to-be-developed brand.
> The plan is to re-brand BT Wireless affiliates (Viag in Germany, Telfort in the Netherlands and Esat Digifone in Ireland) over the next 15 months. Although the name has already been subjected to great ridicule ('BT looked for inspiration and instead got respiration,' was one quip from the press), at least it is genuinely new and different (rejected names on the shortlist also included 'pure' and 'radiant'). It has a strong precursor in Orange, which was also subjected to much criticism on its launch, although admittedly a color is far easier to represent than a gas. MmO2 is still on course to float in October.
> Meanwhile, Deutsche Telekom has announced that it will re-brand its international mobile operations as T-Mobile. This will initially be applied to One2One in the UK and later to VoiceStream in the US and max.mobil in Austria. Deutsche Telekom was originally planning to adopt a completely new brand, which it hinted could be a color. Instead, caution has prevailed, and the operator has decided it should leverage the T-Mobile brand, even though it has little resonance outside Germany.
> At the end of August, Vodafone began an advertising campaign based around the slogan 'How Are You?' BNP Paribas estimates that the campaign, which will run in at least 12 countries, will cost "hundreds of millions of euros." Merrill Lynch believes Vodafone aims "to become a global brand like a Coca-Cola." This year, Vodafone began 'dual branding,' changing D2 in Germany to D2 Vodafone, for example. Global re-branding to simply 'Vodafone' is expected to be completed by March 2003, although JP Morgan believes it will be completed by the end of 2002. Vodafone will supplement its advertising with sponsorship of major sports teams.
> While only time will tell how effective these new brands and branding campaigns will be, there are five areas that are key to their success.
> The first and most important is the strength of the underlying operation. A superb advertising campaign cannot eradicate product deficiencies. The strength of Orange does not lie only in its marketing, but in its innovative packaging and pricing and strong customer service. BT may come up with a strong advertising campaign, but its poor European presence is still a major ha> ndicap. Bear Sterns believes that the global Vodafone campaign will "underscore Vodafone's unique potential to integrate services on an international scale, whilst also highlighting the deficiencies in the existing footprint of Vodafone's major competitors."
> The second issue is the brand's global impact and resonance. Vodafone has used dual branding in countries as diverse as South Africa, Japan and Greece, but BT has yet to even seek copyright in the US. At least O2 has some global resonance, though. T-Mobile has no recognition outside of Germany.
> Also important is the speed with which the re-branding occurs. The use of dual branding simply delays the inevitable transition to the new brand. It is understandable, of course, to try to retain the existing brand, but consumers often have little connection with the new brand in a dual-branding strategy. The dual-branding route is often chosen due to the unwillingness of local management, rather than local consumers, to give up a brand. In stark contr ast to this approach is France Telecom Mobiles, which changed its name to Orange and immediately disposed of brands such as Itineris. This is ultimately a far more successful strategy than 18-36-month changeovers.
> The fourth concern is long-term viability. Most financial analysts believe mmO2 will soon be acquired, thus making the investment in the new brand of little value. Vodafone, meanwhile, may have made an error in not changing its brand. The association with the telephone (VodaFONE) will increasingly seem misplaced in the mobile data world, and the 'red tear' logo is uninspiring.
> The final issue is the budget behind the branding. Vodafone is using sports sponsorship, and increasingly the renaming of sports stadia, to enhance its brand. Orange has cleverly linked advertising on multiple channels and taken the brand far away from traditional mobile advertising. Other branding campaigns have been comparatively weak. In the current economic climate, it will be interesting to see how much mobile operators are really prepared to spend in promoting their brands. |
