‘It’s like [being] a freighter at sea – it takes a little while to know that you’re in trouble and then to turn the beast around.’

So says Karl Moore, professor of marketing strategy at the Faculty of Management, McGill University, in explaining the challenges facing today’s global brands. With tremendous success comes the probability to falter, he says, and that likelihood is becoming more prevalent in today’s global economy.

Certainly, the proof is out there: many big brands seem to have floundered of late. Kodak and the Big Three automakers have all seen profits drop significantly, while household names like McDonald’s and Coca-Cola have encountered turbulence in the last couple of years. (For more on Kodak’s woes, see Counter Strategy, page 2.)

But there are ways to avoid falling out of favour with consumers. As brands as varied as McDonald’s, Nike, Coke, Unilever and IBM have discovered, the panacea is to understand the target group inside out. Only then can a brand tap into relevant insights, and communicate effectively.

That’s easier said than done, of course, because large brands often don’t see trends coming until it’s too late. Says Moore: ‘Their own success can blind them to new trends and new directions in the marketplace. In some ways, we can expect that highly successful brands and companies may not cotton on as quickly to what’s happening.’

Moore cites a couple of other factors hampering the ability of mammoth brands to retain their superstar status. First, the market has become more fragmented and niche players are cutting holes out of the big guys’ market share like Swiss cheese. Secondly, the Nexter generation doesn’t have the same relationship with labels as their parents. Thus, while boomers ‘wore their brands proudly, literally on their shirts,’ for the younger group, it’s more about ‘word of mouth, and what people they respect think about the brand, as opposed to what marketing and advertising is booming out at them.’

That’s why it’s imperative to earn trust – and that’s exactly what McDonald’s hopes to do with its new ‘I’m lovin’ it’ campaign.

Neil Everett, VP marketing at McDonald’s Canada, says we now live in the age of ‘I,’ as opposed to ‘me,’ as was the case in earlier decades. In other words, ‘I want to be an individual, yet still part of a community,’ he explains. ‘The new wired world we live in allows people to reach out and connect with people of the same interest. It’s a hybrid between mass and me.’

McDonald’s has attempted to work its way into that community, as it goes after young adult males more aggressively than ever before, driven by the arrival of a new, smaller generation of children. Adds Everett: ‘We tend to be great at grabbing them when young, but when they get to be 14 or 15, even though we are still the number-one outlet, we don’t have the same share of occasion. Pizza Pizza and Subway have grabbed some of that share, primarily because we were not perceived as cool and contemporary.’

McDonald’s has set out to change that mind-set with ‘I’m loving it,’ which launched this fall. Developed by Unterhaching, Germany-based Heye & Partner, the five global TV spots feature the vocals of pop star Justin Timberlake and ‘a series of vignettes, each celebrating a special moment,’ says Everett.

There is also Canadian-specific advertising on the reel, by Toronto-based Cossette, most recently for the Steak’n Cheese Flatbread, a domestic initiative. A TV ad depicts a bunch of guys all tied up together, clowning around during frosh week.

McDonald’s has also gone underground to connect with this elusive target. One such example is a Web-based promotion, known as dugg.ca. During a TV commercial for a recent French fries promo, the URL was planted four times. For example, it was carved on a park bench in the ad. Those who caught on visited the unbranded site, which used artificial intel and asked them cryptic questions. In the end participants were offered the opportunity to win some unique prizes, like a white water rafting trip on the Amazon River. Each experience was distinct, and prize pools depended on responses.

According to Everett, 170,000 people visited the Web site, and in an online survey, 98% of participants rated it ‘very cool.’ Plus, it created word-of-mouth on chat sites. Says Everett: ‘You can spend a ton of money trying to be cool, or you can earn their respect. A lot of the cool brands, like Burton Snowboards, respect their target and provide a good experience.’

The ‘I’m lovin’ it’ platform, along with other tactics, like the introduction of healthier grub, the refurbishment of stores, and improved customer service, according to Everett, seem to have left a positive impression. McDonald’s recently reported that its third-quarter same-store sales increased by 9.5% in the U.S. and 3.9% worldwide – its best quarterly performance so far this year.

Everett promises fourth-quarter results will be even better. ‘We don’t care if we sell burgers or apples, as long as we sell a lot of them. We’re certainly refocused on the future and where growth marketing opportunities are.’

Like McD’s, Nike is also trying to immerse itself in the environment where its consumer lives and breathes. For instance, this summer, the Thornhill, Ont.-based firm launched its ‘battlegrounds’ campaign. The entire program was initiated at the grassroots level; Nike spent a year working with and building a relationship with real-life ballers in Toronto. Director of marketing Caroline Whaley says this type of interaction is ‘by far the most helpful and effective way to connect with the consumer.’

In fact, the urban athletes helped Nike create video invites that were mailed to 32 competitive ballers asking them to showcase their moves at a basketball tournament. The two-day affair was open to spectators and promoted through Footlocker retail locations. According to Whaley, 4,000 fans showed up at Trinity Bellwoods Park for the finals. Then Nike followed up with billboard advertising, which starred the athletes. The impact, says Whaley, is that Nike becomes a part of the community, thereby lending it authenticity.

Like its global peers, Coca-Cola has discovered that authenticity has become more ‘relevant than ever before with youth,’ says Susan Banbury, brand manger for Coca-Cola Classic and Diet Coke in Toronto.

Coke’s new ad campaign, which debuted in Canada in April, is based on the notion that, as the original soft drink, the brand is ‘real.’ Thus the advertising, created by Berlin Cameron & Partners in New York, stars ‘believable characters in real relationships.’

For instance, a new spot has a group of young males hanging out watching TV, but one of the guys is an obnoxious trash talker. He finally shuts up when he cracks open a can of Coke and it explodes in his face – to the delight of his pals.

According to Banbury, the soft drink manufacturer, which had 44.3% of the US$63-billion soft-drinks market in 2002, went this route because of a ‘huge shift away from packaged marketing and things that are fake.’

As a result, Coke strove to create ‘situations and emotions that teens immediately relate to and can see themselves in – and more importantly, want to be in,’ says Banbury. ‘There’s a link between our brand and this insight that resonates with youth today.’

But choosing the one insight that will have the most significance with the target market isn’t easy, especially for multinationals, as their audience is so large.

‘There are a million and one things you can identify as influences on day-to-day lives and you need to decide what is important,’ says Mike Welling, VP brand development, foods at Toronto-based packaged goods firm Unilever. ‘The danger is in getting milquetoast, by not focusing tight enough on the user group and trying to keep everyone happy.’

For Welling, getting there means checking and measuring to ensure the message is pertinent – all while using research for illumination rather than support.

That’s how Unilever approached a new campaign for Lipton soup. In a TV ad, by Toronto shop Zig, two grown men are locked in an arm wrestle at a big multigenerational family gathering.

Then one of the men takes a couple of spoonfuls of Lipton soup, and lets one of the little noodles dangle from his mouth as an intimidation factor, just before he wins the battle. The tagline is ‘The little noodle from Lipton. Have fun with it.’

Research indicated that consumers actually play with their Lipton soup, and that each person consumes the product in their own specific way. It also discovered that the little noodle was the ‘great equity’ and a major differentiator for the brand, says Welling, so it was important to give it a major role in the advertising.

IBM also keeps in close contact with its customers through focus groups, individual interviews, and workshops. And it works – the company reported income from continuing operations for the nine months ended Sept. 30 was US$4.9 billion compared with US$3.4 billion for the same period in 2002.

Graham Calderwood, senior partner at Ogilvy & Mather Toronto, which has been IBM’s AOR for the past nine years, says good creative doesn’t happen by chance. ‘It happens through a disciplined approach, and the first part of that is to understand what’s going on in the customer’s head. You have to make that connection between the advertiser and the target customer.’

This process of communicating with its audience is exactly what led to a shift in IBM’s strategy seven years ago, when the company began targeting C-level executives, as opposed to IT managers, by zeroing in on a concept called ‘e-business.’ Now the next phase of that evolution is ‘e-business on demand.’

A current ad, created by the New York office of O&M, depicts a businessman in a museum; he has become extinct – ‘executivis obseletis’ – because he wasn’t able to react to the rapidly changing business climate quickly enough.

‘In terms of being able to make great advertising, it’s knowing

what level of information will resonate with C-level people,’ says Calderwood, adding that a solid agency-client relationship also helps IBM excel creatively. ‘Ogilvy isn’t held to task if an ad doesn’t work. There’s no finger pointing or blame, because the relationship is built upon respect and trust.’

But Calderwood also believes that IBM was right to engage in an evolution, as opposed to a revolution. In other words, when you finally do turn the freighter around, there’s a risk you still aren’t headed in the right direction.

Adds Calderwood: ‘If you stray too far away from your identity, the target audience gets a schizophrenic view of the brand.’

The living brand

Even the slickest ad campaign is doomed to fail if a company doesn’t live and breathe its brand. And that means each member of the organization, from the executive to the front-line sales staff needs to be an ambassador, says Doug Lipp, founder of G. Douglas Lipp & Associates in Fair Oaks, Calif., and former head trainer at Walt Disney University, who recently spoke at a business conference in Toronto organized by the Schulich School of Business.

‘In many ways organizations don’t get it – they spend thousands on branding, but executives, for instance, will ignore trash [on site],’ he says, adding that such inaction sends a negative message to employees who would be less likely to believe the company rhetoric.

It’s also important to motivate staff on an ongoing basis. Lipp explains that Disney holds company canoe races (even VPs get thrown in the water), while a program called Disney One Way gives employees the opportunity to step into each other’s shoes, in an effort to create empathy among co-workers.

But it’s not just the magical world of Disney that’s boosting employee morale. Lately, McDonald’s, which hasn’t exactly been known for its formidable customer service, has reached out to the kids who serve their fries. Neil Everett, VP marketing at McDonald’s Canada, says the fast-food giant recently rented out Toronto’s Air Canada Centre, where 15,000 customer service reps were treated to a free concert featuring the bands Choclair, BrassMunk, Saukrates and Baby Blue Sound Crew. At the same time, McD’s educated them on the new ‘I’m lovin’ it’ campaign.

Says Everett: ‘The key to success is getting the right kids to work for us, and to get them motivated and excited about the brand.’ Going forward, McDonald’s will be measuring employees’ commitment to brand, turnover and morale, in addition to sales, he says. Perhaps we’ll get service with a smile after all.