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Brand Winners... And Losers: Hollywood and The American Steel Industry
Brand Winners… | And Losers |
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The Marketing Doctor says:
Winner: Hollywood
Loser: The American Steel Industry
Happy New Year from the Marketing Doctor! Now for two industries facing very different futures because of marketing choices.
The Winner:
Hollywood has emerged from 2008 a winner.
Despite a shaky DVD market, an economic crisis and even a shrinking audience, Hollywood managed to pull off increased profits and arguably the best mix of blockbusters, first-rate Oscar contenders and simple entertainment over this past year.
Here’s the story.
I’ll keep the marketing lesson about Hollywood short. Basically, Hollywood has always had to fight for its Target Market. In other words, this is an industry that has never taken its audience for granted and has always kept real marketing central to the way it does business. In other words, their default switch is set to “marketing” because if they don’t give their Target Market what it wants, it simply won’t come to the theater.
What this means is that Hollywood is always worrying about the competition (i.e., television, Internet, etc.) and as a result, it stays nimble and is always aware of price point and the delivery of value for money.
History has shown that movies usually do fine in economic hard times, but there’s more than that going on. Essentially, Hollywood is always refining and re-adjusting its brand to meet the Target Market.
One recent example is how the industry is focusing on 3-D technology. Why? Because this is a place where they can build on their old strength (people still like to get together in a dark theater) and add to it a technology that consumers can’t duplicate in the same way anywhere else.
The final takeaway: a great marketer never rests, and a great brand is always in motion.
The Loser:
Somewhere on the opposite side of the marketing spectrum is the steel industry. These guys have always had problems with the marketing concept.
After successfully reinventing and reinvigorating itself in the 1980s, it looks like the steel industry has once again gotten itself into trouble.
There are some industries where the marketing concept takes a backseat to strict financial models —models that tend to be cyclical or at least condemn the business to being cyclical. By this, I mean marketing isn’t central to their business model, and I’d argue that the bad times are more severe because of this. The auto and airline industries are like this too, by the way.
Basically, these are all businesses where there are high start-up costs, few competitors and usually little need to market to get results in the good times.
Unlike constant marketers like Hollywood, these industries move from boom times to bust and back again; lacking marketing in their corporate DNA, they are simply unprepared to market their way through the rough spots.
Great marketing gives a brand and a company antennae through which they can, if not see the future, at least anticipate changing times and respond to them quickly. But you have to be a constant marketer, not an episodic one, for this to work. You have to always be thinking of how your product or service satisfies a need —and if it’s not satisfying a need, find out why and fix the problem.
In good times, this marketing at your core will make you more prosperous; in bad times it will help you survive.
Hollywood, for example, has been doing a pretty good job of trying to stem the damage from the Internet and even harness its potential competitor’s power to push its own products. They were worrying about these things long before their bottom line was getting hurt.
If only the steel industry had a few Hollywood marketers at the helm instead of strict financial types. Basically the industry was humming along with some of the best profits in its history up until a few months ago when the economy fell off the cliff and the industry went off the cliff with it.
Now big steel is looking for a big bailout in the form of an anticipated big infrastructure spend out from the next administration. Here’s that NY Times story.
My marketing point from all of this is simple: no industry of this size should ever be caught out so badly. This is a failure of basic marketing. I don’t mean that big steel should be advertising its wares to John Q. Public on prime time. What I do mean is that big steel should have used marketing to get to know its Target Market and anticipate how quickly need for its product was going to change.
Part of the problem with big American steel in the 70s and 80s was that it could not compete with steel-exporting nations like Japan who had more nimble and cost-efficient processing technology.
Big steel addressed this problem, and the American industry clawed its way back to a stronger position. That was real marketing.
Unfortunately, it doesn’t look as if real marketing became an integral part of their business model. Sure, the economic crisis is unprecedented, but a strong tradition of consistent and aggressive marketing would have doubtlessly helped cushion the blow here. Even a small team of real marketers helping to guide these steel companies through good times and bad would have made a huge difference.
And remember, it’s always easier when you keep marketing and branding in mind.
TODAY'S TANTILLO TAKEAWAY -
Real marketing is the antidote to complacency and means that you never lose touch with your Target Market.
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