John Tantillo’s Winner and Loser of The Week: GM and Carnival Cruise Line

John Tantillo’s Winner and Loser of The Week

Brand Winner… And Loser…

John Tantillo’s Winner and Loser of The Week: 

 

Winner:  General Motors

 

Loser:  Carnival Cruise Line             

Winner: 

Every so often you need to toot your own horn.  This week please forgive me for doing exactly that with respect to my prediction for General Motors.

Almost a year and a half ago now, I argued that the naysaying pundits were wrong about GM and that the grand old company would make a comeback because of its great brands –which it was clearly focusing on once again.

The post appeared headlined under “What Will They Say When GM Makes a Profit For Taxpayers?” (read it here). 

Well, not only is GM profitable –they’ve earned 4.77 billion in the past nine months— but they’re stock IPO has generated unprecedented demand.  In fact, just today, GM’s underwriters lifted the initial price per share into the $30 to $33 range.

There’s a good reason for all this excitement –GM’s future looks very, very bright indeed.

How did this happen? 

Sure bankruptcy and government aid helped a lot, but what really helped and will help even more is GM’s fundamental strength which is the strength of individual car brands. 

Remember, people buy brands not companies!


Consumers don’t by a GM car, they buy a Cadillac or a Buick or a Chevy.  And on the backs of these brands, GM has come roaring back as a company.

I’m not recommending stock here by the way, but if GM keeps focusing on its brands then the company should be with us for a very long time.

Loser:

Sometimes brand crises come out of the blue and the brand isn’t really responsible for not seeing the problem coming. 


The Tylenol poisonings of the early 80s are a good example of this. 

In the case of a “bolt out of the blue” branding crisis, you can’t blame brand managers for the initial problem but you can hold them responsible for what happens next.  How do they respond?  How do they fix the damage?  In Tylenol’s case, the answer to both questions was “brilliantly”?  So brilliantly that Tylenol actually gained market share.

Now some may argue that Carnival Cruise Lines is in a similar situation with the heavily reported “cruise from hell” on board their ship Splendor.

Fact is, they’re not.

Why? 

I’m not going to say that poor brand management is behind the fire that caused the ship to become literally powerless in the water (but, folks, if cost-cutting somehow contributed then this instantly does become a brand management issue under the Doctor’s marketing concerns everything about running a business rule).

But poor brand management is behind the inability for Carnival to respond more rapidly and independently than they did.

Where was the contingency planning?  Why did the ship, its passengers and crew need to be rescued by two Mexican tug boats and a United States aircraft carrier? 

Basically, brand damage has been done here because questions that the general cruise-taking public never had in their heads about safety and what happens if there is a fire are there now and won’t  be going away anytime soon. 

Bottom line, because Carnival didn’t have the kind of contingency plan to take immediate and independent action like, for example, a way of getting passengers off the ship or improving their lives on board, non-stop media reporting of a ship helpless at sea with a corporate management helpless to do anything about it are what people will remember –some of the reports and images even reminiscent of the ordeal in New Orleans.

Carnival Cruise is starting to do the right thing now by extending generous compensation to the rescued Splendor passengers, but my guess is that they ought to do more.

They need to address the contingency plan question  by explicitly putting into place and publicizing fall back measures to prevent anything like this from ever happening again.

The Carnival brand has always been about escape in a good way (and part of this means safety and security on the high seas)…  They’ve got their work cut out for them now.  Full speed ahead.

And, remember, things are always easier when you keep marketing and branding in mind.

 

TODAY’S TANTILLO TAKEAWAY

Many brand crises that seem to come “out of the
blue” don’t and, in fact, can (and must) be planned and prepared for
.

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