WHY HENRY FORD IS THE MOST SIGNIFICANT AMERICAN WHO HAS EVER LIVED

                 All Americans should revere Henry Ford and the Model T. The man and the car simply revolutionized America as we know it., there are two sides to Henry Ford. There is a great side---a truly great side. This man understood the importance of his brand. He understood just how important and historic this product would be. Unfortunately, he also has a terrible and vile side---a truly terrible side and vile side.

            Henry Ford was a common man himself. He came from a farm. He came to Detroit and worked as a mechanic. He was renowned as probably the top mechanic in a town for known for machinery. He lived in a world in which the per capita income for an American was $500 a year. Henry Ford understood the importance that the automobile would bring to the average American. This is why he was adamant about creating a “car for the masses”.

            This was not easy. He fought with his early investors. The Ford Motor Company was his third motor company. His investors wanted Henry to create a car for the rich---this is where they thought the greatest payback would be. Ford thought the greatest payback, long-term, would be entry level. Ford did want to become rich. He also wanted to create a product that would revolutionize America and make the average person’s life a lot better. The intent was two-fold on the side of Ford. His $5 a day wage changed America. It created a middle class. We feel Henry Ford’s influence today.

            When $ 5 a day was announced, it brought blacks from the south, into the north, to work. Now they could vote. You cannot win the Presidency of the United States if you do not carry Michigan and Ohio. These are states that are traditionally Democratic---but still winnable for Republicans.

            To win these states, the Republicans have to field a moderate candidate. The Republican Party is a very conservative Party. Radical Republican candidates cannot win a national election. Our recent political history was created by the voting coalitions created by Henry Ford. The New Deal, Franklin Roosevelt, Harry Truman, Dwight Eisenhower, Jack Kennedy, Richard Nixon, Jimmy Carter, Ronald Regan, George Bush I and II,  Bill Clinton, and Barack Obama owe their Presidencies to the development of the car.

            There is also a tragic and terrible downside to Henry. Henry was probably the most significant racist and anti-Semite this nation has ever had. It is just hard to understand how one man has done so much and created so much turmoil for African Americans than has Henry Ford.

            No man has done more for the average American worker than Henry Ford. But no man has hurt the worker as much as Henry has, either. The Labor Strikes at Ford in the 1930’s are historic for their violence. Men were beaten and killed violently simply because they wanted a safe place to work.

            Adolph Hitler loved Henry Ford because of his organizational skills, but mostly for his Anti-Semitic views. Why was this man so hurtful in the latter years of his life? When Henry Ford came on the scene he was not a young man. There is a strong possibility that dementia overtook Henry.

            To their everlasting credit, no one in America has tried to quell Anti-Semitism as much as the contemporary Ford Family . They have given millions to Jewish organizations. Bill Ford should be lauded for the work he has done in creating understanding between Jew and non-Jew. If you know Bill Ford, please shake his hand and thank him.

            Let us take Henry Ford in his entirety. Let us focus on the wonderful things that he has done. Again, no man has influenced America in a way that he has.

Dean Hambleton

dnhambleton@gmail.com

HOW ALBERT SLOAN AND ALAN MULALLY USED SOCIAL MEDIA TO INSULATE THEMSELVES FROM IN EVOLVING MARKETS

Social media is about technology and techniques. These techniques and technology help us engage people to create deep relationships. The deep relationships created by social media are a tool that a modern marketer uses to insulate themselves from error. Marketing is about making bets in the market place. The size of social media allows a marketer to make better bets. When social media is used properly, the relationships created by engagements insulate a marketer from error. A marketer now can rely on the wisdom of many instead of just himself. There is a wisdom to crowds that insulates from error. Two example of this are Albert Sloan of General Motors in1923 and Alan Mullally of Ford Motor Company in 2011. Both of these CEO’s from different eras used the wisdom of crowds to make critical bets that repositioned their brands and insulated themselves and their companies from error.

Both of these CEOs came from a different era. They both used the social media of their era to adjust to the speed of their markets. This adjustment allowed them to understand the paradigm shifts in their markets that allowed them to adjust and to reposition their products so that they were able to create a brand that was unable for their opponent to compete against.

Henry Ford was autocratic and he made the important decisions for Ford in the early ‘20s. Alfred Sloan at General Motors organized executive committees to collaborate and make the important decisions after deep group discussion. This set up has great impact General Motors to this day. General Motors needed a luxury brand to offset Ford. Sloan had two choices, either the Seville or this thing called Cadillac. Seemingly from a cost standpoint the Seville had a cost advantage. There was a committee meeting that changed everything.

The manager of Cadillac, Nicholas Dreystadt, told the committee that Cadillac had an image with black professionals, which was an important niche market for General Motors,  that other managers weren’t aware of.  Black professionals purchased Cadillac as a symbol of their success. Because of this all blacks desired to purchase a Cadillac, even if they couldn’t afford it. This created a brand for GM among all blacks, a demographic that now becoming important. This information could only be developed through group discussion. It was not information that was common in the general car business. Cadillac was selected, and it is a major GM brand to this day.

In our modern era, General Motors had a technology that Ford had no answer to. It was a patented technology that was only available on General Motor products.  The emergence of social media allowed Ford to create a technology that has repositioned the modern automobile market.

Ford’s C.E.O Allan Mulalley ordered his Vice Presidents to embrace social media as a means to communicate with the customers of their markets.  This has given Ford a great deal of information and insight that they would never have developed on their own.

In talking with customers and in studying the technology, a Ford Vice-President, Doug Van Dagens, made a prescient observation.  He observed that General Motors technology originated inside the car. Social media is about taking your technology and connecting to other devices. This is what Ford has decided to do with its newest models. With the newer Fords, a customer brings their devices with them, and plugs them into the Ford.

Ford had made a major breakthrough in the area of texting. You hook up to a panel, activate voice recognition, dictate your text, and that text is sent out, safely.

Ford has repositioned the car. It is no longer a mechanism of transportation. The car is now a social media platform. Social media is fast markets. Embracing it has allowed Ford to adjust to the speed of the market.

Dean Hambleton

dnhambleton@gmail.com                                  

HOW ALBERT SLOAN USED COLLABORATION TO DEFEAT THE FORD BRAND IN 1923

HOW ALBERT SLOAN USED COLLABORATION TO DEFEAT THE FORD BRAND IN 1923

         Social media creates the wisdom of crowds.  The wisdom of crowds insulates a marketer from error. The purpose of social media is engagement. This engagement is between customer and brand.  Engagement also within the organization itself. This is why General Motors succeeded in creating a brand in 1923. It is the reason why Ford Motor Company failed. Markets change fast in a social media world. This is because there is so much scale. Social media is the tool that modern marketers use to adjust to this speed and scale. There is much material in modern business.  There is great wisdom in crowds. Alfred Sloan, the CEO of General Motors in 1923, understood this. He organized a system in which department heads had a say in how strategy would be developed. Alfred invented modern management. How he ran General Motors is a benchmark, and it is the reason why modern social media strategists should study Alfred Sloan of 1923, today. In 1923, nine out of ten cars on the road were Model T Fords. By 1926, General Motors gained the lead in market share. The reason why this happened is because Mr. Sloan created collaboration through the social media that was available to him in that era.

            In contrasting Albert Sloan and Henry Ford, and explaining why General Motors created a brand, let me quote Dr. Yogi Berra.  Yogi once said, “You can see an awful lot just by watching”.  Mr. Sloan created a brand at GM because he saw that Mr. Ford was making a significant mistake.

                   To be successful in social media marketing a professional has to be both humble and flexible. Albert Sloan of General Motors in 1923 was both of these. Henry Ford was neither and this is why his story had such a tragic ending. Henry Ford was autocratic. One man made the decisions in that company. Anyone who had an idea different than Mr. Ford’s was fired. This is why the Ford Motor Company missed the vast paradigm shifts in the American auto market in 1923.  

            Mr. Sloan was a brilliant man and the reason he was so brilliant is that he understood that he didn’t know everything. To offset this, to create policy and strategy, and to insulate himself from error, he created an executive committee in which the heads of the departments would get together and discuss things. This was the beginning of modern management. It was the beginning of modern social media. Mr. Sloan did not have Facebook or Twitter, but he used the social media of the day. He engaged his employees who had engaged their employees, who had engaged their employees. Today, people would send Mr. Sloan a wall post, or a tweet. In his day, Mr. Sloan’s Facebook page was talking to people face to face.. Mr. Sloan collaborated with his “friends”.  Issues were discussed; there was a meeting of the minds.

            From these committee meetings, Mr. Sloan realized that a strong middle class was developing in the United States. Women and African-Americans were now a significant market for a car producer. Mr. Sloan understood this through group discussion.   Mr. Ford wasn’t aware of these changes, and everyone at Ford was afraid to tell him.

            General Motors created a strong brand among women and blacks. This demographic was an important reason why General Motors became the market share leader in 1926. The committee set-up allowed Mr. Sloan to function in a world of change. Mr. Sloan made this observation about Mr. Ford, meant in honest and respectful manner. “The creator of change didn‘t realize when change had come”. Every modern social media strategist should understand how Mr. Sloan created a brand in 1923. I would like to end with a quote from Dr. Yogi Berra, “The future sure ain’t what it used to be”.

Dean Hambleton

dnhambleton@gmail

"VUN FOR VUN"--HOW ALFRED SLOAN USED CHEVROLET TO OVERCOME FORD'S MODEL T IN 1923

“Alfred Sloan used the social media of his time to overcome Ford’s seemingly insurmountable lead in 1923. When Mr. Sloan took over GM, he realized that to overtake Ford and to become the pre-eminent brand in cars, he would need a strong brand at the entry level and at the top level.

            He would need a strong entry level because the Ford Model T was predicated on a low price.  The Model T owned the entry level market. Sloan needed an entry level car to build a brand for GM. People’s initial car purchase was always a Model T. This initial purchase created a bond between customer and product that is hard to break. To create long-term customer value, an attractive entry level car was essential for GM. He needed a strong luxury brand because this segment that is not influenced by the national economy. The people in this demographic bought a car, without fail, every two years. A strong brand in Cadillac would give GM a dependable revenue stream that would help fund the rest of the organization.

            Sloan targeted the lower and upper segments. T he middle segments would take care of themselves. If people originally purchased an entry level Chevy, they would move into middle segments for subsequent purchases. Ford did not compete in the middle segments. Chevrolet was the critical piece in Alfred Sloan’s strategy.

            “Okay”,  Alfred said to himself in 1923. How do I get this strategy to work?  How he answered this question should be studied by contemporary social media marketers. Alfred used social media to create a social brand at GM that is equivalent to today’s strong social media brands.

  A simple definition of social media is when the brand and the consumer engage one another. The two develop a close, almost human relationship. The two become “friends”. This friendship creates many touch points between brand and the consumer. These multiple touch points create the consumer buying decision. When Alfred Sloan became head of General Motors, he traveled the country talking with customers. He engaged with them. In 1923, the General Motors brand created friendships with their market. These conversations allowed Mr. Sloan to realize that the car market was now different than it was in 1908. These differences changed the entire paradigm that the car market was based. This allowed Mr. Sloan to understand that he could overtake Ford with the right strategy.

America now had a middle class. This was in contrast to 1908, when the Model T began. People now had disposable income. They would pay extra for a good product. No longer was a low price the deciding factor in choosing a car. People wanted a car that was easy to operate and that would give them a comfortable ride. People wanted a car that looked nice. People wanted a “cool car”.  Manufacturing technology had also changed. In 1923, an assembly line could be shut down and rebuilt to offer customers variety in car options. This shut down could be done in such a way that the company would not lose any money.

The new Chevrolet came in a variety of colors. It had headlights for night driving. It had indoor heaters to offset cold weather. It had windshield wipers to offset bad weather.  The Chevrolet was entry level, but it was stylish, easy to drive, with options that an average customer would really need on a drive. Next to the Chevy, the Model T looked old, and dowdy, …”just so ‘08”.

Still, the Model T had a strong brand. In 1923, nine out of ten cars on the road were Model Ts.  Chevrolet dealers had to be energized and convinced that the Chevy could now compete with the Model T. Again, Sloan used social media of the day.  Social media is used, not just to engage customers, but to motivate workers in an organization. This is how Mr. Sloan used the social media of the day.

Bill Knudsen was a Danish gentlemen how headed the Chevrolet division. Mr. Sloan sent Bill Knudsen to dealerships around the country to excite them about the product.  One meeting changed the dealer’s outlook. When asked what his goals were for Chevrolet, Mr. Knudsen answered in his thick Danish accent, “I want vun for vun”---I want one for one. “Vun for Vun” became the rallying cry for the new Chevrolet division and soon the historic Model T brand was overtaken.

Dean Hambleton

dnhambleton@gmail.com

ANALOGIES BETWEEN ALFRED SLOAN OF GM AND COACH BILL BELICHICK

ANALOGIES BETWEEN ALFRED SLOAN OF GENERAL MOTORS  AND BILL BELICHICK

            In researching articles about Albert Sloan, the CEO of General Motors in the 1920s-1930, I found some significant analogies between Mr. Sloan and Bill  Belichick, coach of the New England Patriots of the National Football League. Both achieved their greatest victories against a foe which seemed unbeatable.  Those victories were achieved by taking their opponents greatest strengths and turning those strengths into weakness that allowed them to defeat that opponent.

            This is why social marketers should study both of these great leaders. An important fact about social media marketing is that many times a brand’s great strength is great weakness that an opponent can use to defeat that brand in the market place. Conversely, a great strength can also become a great weakness.

            Before their greatest victories, each leader had to defeat a foe which seemed unbeatable. Each used social media, engagement with customers, to create branding for their organizations. Each used their biggest weakness, and created their biggest strength.  

            In the case of Mr. Sloan, his opponent was The Ford Motor Company. In 1923, Ford autos made up 90% of the cars on the road.  Most business experts, including some executives inside of General Motors, thought that GM had no chance at ever overtaking Ford.  Albert Sloan, spent a great deal of time talking to people.  Because he engaged people, Mr. Sloan knew that Ford was extremely vulnerable in its greatest strength. 

            Coach Belichick’s greatest victory was the 2002 Super Bowl against the St. Louis Rams, “The Greatest Show on Turf”. This victory is the biggest upset in Super Bowl history.  They were talented, they were experienced. Just as in Mr. Sloan’s case at General Motors, no one thought that the Patriots would have a chance at beating the Rams.

Like Mr. Sloan, Coach Belichick used social media, in this case, intensive engagement was used to create a brand---in Coach Belichick’s case, intensive use of video was the means by which he created his “brand”.  Think of it like this in terms of analogy, NFL teams are social media brands because of their intensive use of video to create their brands.

In Mr. Sloan’s case, he engaged people in personal conversation about what they liked in a car.  From this engagement he knew that the car market had changed. The paradigm of the market didn’t revolve around low cost, but upon variety, comfort, enjoyment, as well as low cost. He also realized that people bought cars to define their financial position in relation to other people. Entry level people buy Chevrolet, successful business owners buy Cadillac.

Ford had no variety, and was looked up on as a very stodgy old brand. People in 1923 in comparison to 1908 wanted an attractive, cool product. They wanted a car that had an emphasis on image and styling. Knowing this, Sloan created a group of very stylish cars. Ford’s strength in low price, which seemed so insurmountable, was only a paper tiger in a world of social media.  Social media professionals should understand this in studying the case of Alfred Sloan at GM in 1923. Alfred Sloan did not have Facebook, Twitter, and YouTube. If had, he might have overtaken that 90% share in a couple of months, instead of the 3 years that it took him.

In Coach Belichick’s case, after watching film, he noticed that the Ram offense, “The Greatest Show on Turf”, revolved around two players----Kurt Warner and Marshall Faulk. He decided, just as Mr. Sloan in 1923, to make the Rams strength their biggest weakness, the means by which the Patriots would win the game.

Belichick did not want these two players out of the game. He wanted them in the game. He decided to have linebacker Teddy Bruschi shadow Faulk.  Teddy’s job was to go where Faulk went and to hit him every chance he had, legally. By doing this Faulk was worn out by the second quarter. Just as the 1923 Ford Motor Company, the Rams biggest strength was now their biggest liability. Faulk hurt the Rams during the game.  He wanted Warner to pass, because the more he passed, the greater the risk that a game changing, big play would be made.  

Warner did pass. He passed for 365 yards in the game, which is the second largest in Super Bowl history, but he also passed for two interceptions that lead to touchdowns, plus a big fumble. Belichick took the Rams strengths, made them into weaknesses that the Patriots used to win the game.

This is the message for social media strategists. There are no perfect brands. Each time you compete with a brand, understand that the brand has a weakness that you can exploit, with social media

Dean Hambleton

dnhambleton@gmail.com  

HOW ALBERT SLOAN CREATED A WOMAN'S SEGMENT FOR GENERAL MOTORS IN 1923 USING SOCIAL MEDIA

HOW ALBERT SLOAN CREATED A WOMAN’S SEGMENT FOR GENERAL MOTORS IN 1923 USING SOCIAL MEDIA

           

            Social media platforms are an important tool for modern marketers because they tell a marketer, in real time, when a market has evolved. In modern marketing, markets move very quickly. To have a strong brand, a marketer must understand what the main drivers of a consumer buying decision are. Drivers evolve quickly. Social medial platforms allow a marketer to engage with a great many consumers at one time. This scale creates the ability that a marketer needs to understand when a market has changed in real time.

            A perfect example of this is General Motors in 1923.  Think about just what social media is. Social media is a conversation between two “friends”. The two friends are the brand and the consumer.  Friends don’t have walls between them. They speak openly. When this happens great brands are created.

            Friends support one another. In speaking to a friend, you understand what they need in real time. If your car breaks down, you call a friend to pick you up. This is what happens on social media sights.  A consumer explains what they need or in what way they have changed. A brand adjusts quickly because they have real time information. In the 1920’s, women were beginning to become an important marketing niche for car companies. General Motors was able to create an important woman’s market through a strong social media platform---their C.E. O. Alfred Sloan.

            At this time, the Model T of Ford had what looked like an insurmountable lead over GM. Mr. Sloan hit the road and began to have conversations with consumers to find out what they needed from a GM car. Looking at like this, General Motors was a modern social media brand in 1923.

            In speaking to customers, Sloan realized that there was a paradigm shift in American culture beginning in the 1920’s. World War I changed things. For the first time, women began appearing in the job market. They needed transportation to work. They became to be a more important factor in the buying of a car---either for themselves or for the family.

            Woman began to head households. Many veterans from World War I did not come back. In these Gold Star families, women were known faced with being the bread winner. Because women had to work on assembly lines during the Great War, they began earning their own money. When the husbands came home, they discovered their wives being more demanding.  The divorce rate would triple between 1890 and 1930.

            This created changes in the market. These changes caused the car market to evolve. General Motors, through social media, talking to customers, picked up on this evolution. In times past, with the Model T, a crank was the means by which a car started. This was hard physically and very dangerous. With the advent of women, a self starter was mandatory. Women wanted a closed exterior on the car. Because of the physical makeup of women, lower axles and running boards were necessary. Women preferred car with lower roof ceilings. Women needed easy of steering, and gear shifts. The whole concept of the car changed. Under men, a car was a utility. Under women, the car was a social vehicle.  This changed things. A car had to look nice and sound nice.

            Men were concerned for the comfort of their wives. This was the beginning of front head lights for safe night driving, heaters in cars for winter warmth, and electrical signals. General Motors understood these subtle changes that were taking place in American society much better than Ford did. This is one reason why General Motors overcame an almost insurmountable lead that Ford had in market share. This was done because General Motors knew how to use the social media of the 1920’s.

Dean Hambleton

dnhambleton@gmail.com

HOW ALBERT SLOAN'S PRODUCT STRATEGY OF 1923 OVERTOOK THE MODEL T

HOW ALBERT SLOAN’S PRODUCT STRATEGY OF 1923 OVERTOOK THE MODEL T

           

            Based upon Social Media, Albert Sloan’s product strategy of 1923 overtook the Model T. This is a bench mark marketing strategy. This was the beginning of conventional, modern marketing strategy.  After this campaign, marketers understood how important conventional marketing was in branding a product.

               In 1923, for the first time, targeting, segmenting, and differentiation were used to brand a product.   Albert Sloan was an executive at General Motors for forty years.  Mr. Sloan has much to teach contemporary social media marketers because he understood how to integrate social media into his marketing strategy.

When Mr. Sloan first took the leadership of General Motors in 1920, he was faced with a daunting task. At this time, the Ford Model T dominated the automobile market. The numbers were staggering. The Model T controlled 60% of the market. General Motors only had 12%. To overcome this, Mr. Sloan used social media to create a brand. Remember, social Media is a conversation between two friends---the consumer and the brand.

This is what Mr. Sloan did. He toured the country and spoke to American consumers. He conversed with them. This is a benchmark for what modern marketers should do today.  This engagement with consumers allowed Mr. Sloan to detect how the car market was changing. This is a benchmark that contemporary marketers should follow as they use social media. To effectively brand products, the brands have to relate to the people in the markets.

The thing to learn from Mr. Sloan is this.  In our contemporary markets, because there are so many products and so much information, the markets evolve quickly. This is why social media platforms are such a great tool. By listening to customers, you know just when game changing factors have occurred that change the entire nature of a market.

Through customer engagement, Mr. Sloan understood some very important details.  America now, in 1923, had a middle class, with disposal income. Americans had more money available to them to purchase cars. They needed a car, as Mr. Ford had discovered in 1908, but they needed a car that was easy to drive, enjoyable to ride in, and easy to fix when it broke down. Mr. Sloan realized that product quality was a key factor in purchasing a car. Low price was no longer the key, deciding factor in purchasing a car.

A critical factor that Mr. Sloan realized about the American society was that people use their cars to define their state in life for everyone else to see. If people were rich and successful, they wanted to drive a car that reflected that. People wanted variety in their cars. They wanted more than just a black car. Armed with this information, Mr. Sloan realized that the Model T, even though it seemed to have an insurmountable market share, was a very venerable car.   

Mr. Sloan began to target, segment, and differentiate the car market. He began to brand General Motor cars. In 1923, a group of factors came together at one time which created a good brand for General Motors. The man who led General Motors before Mr. Sloan, Billy Durant left Mr. Sloan in a good position. Mr. Durant was a man ahead of his time. Mr. Durant gave Alfred many assets in confronting Ford. The market was now evolving to GM’s favor. General Motor’s cars now had technology that the average customer wanted.  The self starter was developed in 1913. Ford only could start with a hand crank, a very hard and dangerous act. Over the years, Billy Durand bought a lot of different brands, and put them under GM’s umbrella. It times past, they couldn’t compete with the Model T on an individual basis. The market wasn’t ready in 1908. The market had evolved. Now people wanted variety.

The GM lineup had Chevrolet as the entry level vehicle. This was the low cost car to compete with the Model T. People progress through life with better jobs, and better incomes. General Motors’ product lineup, allowed people  to reflect that.  The next step after Chevy, was the Pontiac, which were for people who weren’t entry level, but were lower-middle class.  For people on a career roll, but not truly top level, the Oldsmobile was the choice. For people getting work promotions, there was the Buick.  For those who made it, there was the Cadillac.

The strength of Sloan’s strategy is that he had a car for every niche. He had cars of quality.  People were now willing and able to pay a little more for quality. Ford had one car for everyone---and this is what killed the Model T. A rich successful man will not buy a Model T. He wants to communicate his success. He will buy a Cadillac and pay extra for the chance to proclaim his life success. 

Sloan created a strategy that the Model T had no answer for. Because of an emphasis on quality, GM could compete against Ford, and charge a premium. General Motors could now compete in both the high and low end, and make a lot of money each area.  Sloan’s product strategy allowed him to create a brand in each market segment, and still make premium amounts of money. This was all created because Sloan knew how to use the social media of the day.

Dean Hambleton

dnhambleton@gmail.com   

SOCIAL MEDIA STRATEGY AND BRANDING: HOW HAVE SOCIAL MEDIA PLATFORMS CHANGED THE MARKET PARADIGMS OF TRADITIONAL INDUSTRIES

SOCIAL MEDIA STRATEGY AND BRANDING: HOW HAVE SOCIAL MEDIA PLATFORMS CHANGED THE MARKET PARADIGMS OF TRADITIONAL INDUSTRIES

            Because there is so much content and engagement created on a social media platform, modern markets now move “at the speed of thought”. New products are constantly being created or repositioned. An effective marketer must constantly reposition their product. They must understand when to do this repositioning. This is analogous to the days of the early car business.  Modern marketing was developed during the branding of the early days of the car in the 1900’s.  In the early 1923, Ford’s Model T controlled 57% of the domestic automobile market. General Motors only had 12.7%.  It was thought that GM would never pass Ford. General Motors C.E.O Albert Sloan understood the structural changes happening in the domestic car market. This knowledge of a fast moving market allowed GM to overtake Ford and be the market leader that is today.

            Social media has created great scales of information. This large amount of information and the speed at which it can be transmitted, constantly changes the paradigm on which businesses and markets operate. To create a strong brand, a marketer must understand when a significant change has taken place.

            Two things that have changed market paradigms are globalization and social media platforms. These two things have created a lot of content that has to be developed and easily transported. The wonderful thing about social media is the engagement that it creates between customers and brands. Companies now have a knowledge base to create products that customers really do need in a form that they really need it. Customers really do define their products for a producer. It is almost as if companies are just bit players in the marketing of their own products.

            Instantaneous repositioning creates whole new companies and business models that make even main line companies to evolve drastically overnight. Social media platforms have made Ford Motor Company move from being a car company to a social media brand. With a new technology called In Sync, a Ford automobile is nothing more than just one big IPhone on four wheels.

This technology was created because Ford engaged with their customers. Since 1997 Ford has been trying to find an answer to GM’s in car technology. After speaking with customers, Ford created a social media technology that now makes the car THE PLATFORM. General Motor’s technology that seemed insurmountable a few years ago, is now a non factor in the automobile business. Social media technologies has created a role reverse from the 1930’s. Social media, through the leadership of Alan Mulley, has transformed Ford into a significant market player.

These sudden, massive paradigm shifts are the reason why the percentage of companies falling out of the top three rankings in their industry has increased from 2% in 1960 to 14% in 2008.  These intense quick paradigm shifts, created by social media, have created the seismic changes that are taking place in many markets. Many present day CEOs can’t define something as basic as what industry are in and who their competitors are in their industry.

Dean Hambleton

dnhambleton@gmail.com

WHY IS PIXAR'S BRAND SO SUCCESSFUL?

WHY IS PIXAR’S BRAND SO SUCCESSFUL?

            Pixar’s brand in animated movies is successful because they simply have strong content and they have high barriers of entry that a potential competitor has not been able to overcome.   Pixar is the animated movie wing of the Walt Disney Corporation. This organization is eminently successful. Each of its 14 movies has been very successful in terms of box office revenue and many of its movies have been nominated for Oscar consideration. I love their movies. Pixar is one of the top brands in media. They make animated movies that are a hit with kids, but their story lines have a lot of substance for adults.

            Recently, I attended one of their movies for leisure. I couldn’t help but mix business with pleasure. As the movie was progressing, I began to think about Pixar’s brand and how it is put together. In the business press, Pixar is well thought of.  It has a solid reputation in business and marketing circles. I observed the audience.  The audience was made up of both kids and adults. 

            Sure, Pixar’s movies are animated. This genre is attractive to kids. That’s why kids go. However, I am an adult, and Pixar has created a brand with me.  I was very expectant of the date of the release of the movie that I attended. Pixar’s movies have a brand with adults as well as kids.

            As a general rule, I have come to the conclusion that a company should never market to just one group.  This has made me think about Pixar’s branding strategy. A marketer wants as broad an audience has he can get, but a brand should never targeted for “everyone”.

            In observing, Pixar I have come to the conclusion that there is an exception to every rule and Pixar is the exception to the branding rule which says that products should be targeted.

            Pixar is something like the Model T in 1908. Henry Ford did a brilliant job of marketing and branding his car. The Model T was directed to everyone because virtually every American wanted a car, and there weren’t good alternatives. In 1908, there was a small middle class. In our nation, in 1908, most people were struggling financially. Low cost was the most important factor in any car brand in 1908.   The Model T could do this. The Model T was a unique brand in a unique time in our history.  Pixar is the same way.

            Pixar’s movies have a great story lines, and they have immersive computer aided technology. Pixar movies are an overwhelming content for adults to watch. The quality of its content and the capital that is needed to make and market these movies creates a huge barrier to entry. I don’t see how the brand could be varied ---an animated movie is an animated movie. Perhaps another movie house at some point will create an umbrella brand ---create two renditions of the same brand. The way this would happen is that if some movies were made just for kids, and another group of movies would be designed with adult themes and be obviously created for just adults. A General Motors model for branding in animated movies.

            In addition to the high barriers of capital, Pixar is also well run.  Pixar has 3 overriding principles that it uses in creating great movies. Everyone must have the freedom to communicate with everyone. There has to be an environment in which it is safe for everyone to offer ideas. At Pixar there is an attitude that there is no idea that is not to outlandish. The creators of the content for Pixar’s movies stay close to the academic community.

            Pixar is located in the Los Angeles area. It is located near technology houses, such as the lab at USC, that do game changing technology in the area of game technology.

SOCIAL MEDIA AND BRANDING: THE BENEFITS OF AN UMBRELLA BRAND

SOCIAL MEDIA STRATEGY AND BRANDING: THE BENEFITS OF AN UMBRELLA BRAND

                        A salient fact about social media marketing is the fact that markets move so very fast. Social media creates great scale. The scale creates the great speed that we find in contemporary markets.  The way that social media brands are created is that first a product is positioned. The scale of the market makes it evolve. This means that the product is repositioned. As the brand continues, the repositioning creates a new positioning.

            The way that the early car industry was branded is an example. Two great giants of this era were Henry Ford of the Ford Motor Company and Billy Durant who created General Motors. Both understood that the original market would depend upon low price. Durant also felt that the low price should also have variant brands to target different groups. Henry thought that price was the key and he created a world class brand in the Model T. For a time, Henry’s bet was the correct one.

            The market evolved overtime. As the decade of the 1910’s progressed a middle class developed. With more resources available, people began to want more than just a low price in a car. The variance of income created different targets for the car. This created the necessity for the car to be branded in different ways. Luckily, for GM, Billy Durant had created these different brands. In the General Motors model, Chevy was the entry level for low income people. Ponitac was the next level. This is for people who start a job, and start receiving  early career promotions. For the mature mid career there is the Oldsmobile. For those people know on the fast track there is the Buick. Finally, for the people who have made it, there is the Cadillac. I think the GM model is the model that modern social marketing should follow.  Different income groups define their products in a different manner. The brands help them define themselves. This is the beginning of what is called the “umbrella” brand. This is several brands of the same product, under the roof of one company. It is this strategy that allowed General Motors to overcome a seemingly insurmountable lead by Ford in the 1920’s to become the pre-eminent brand in cars.  What are the benefits to having an umbrella brand in relation to having just one big brand like the Model T.

                        As in the case of General Motors, a big benefit is MARKET GROWTH. There is strength in numbers.  With many brands, like the GM family, there is constant engagement with the General Motors brand, instead of the singular General Motors “car”.  As In the GM case, no one brand can control the entire market. This is the genius of Albert Sloan. It was Albert Sloan that has taught marketers the importance of targeting, segmenting, differentiation, and branding. This is in clear contrast to Mr. Ford’s assertion that you can have any color you want as long as it is black.

            Multi brands PREVENT BRAND EXTENSION. In 1923, there were many car companies, most with one brand. By having multi brands, Mr. Sloan was able to consolidate the market and to dissuade the smaller struggling companies not to extend their brand and to get out of the market, allowing General Motors to concentrate on Ford.

            Multi brands PROTECT THE BRAND IMAGE. Everyone knows that Chevy, Ponitac, Olds, Buick, and Cadillac were General Motor brands. Each of the cars contributed to the GM image. Ford singular brand in the Model T worked against Ford.  Because it had only one brand, Mr. Sloan was able to portray the Model T as a brand “built by farmers for farmers”.

SOCIAL MEDIA STRATEGY AND BRANDING: DECIDING BETWEEN A SINGLE OR MULTI-BRAND

Social media platforms create great scale. If Facebook were a nation, it would be the third largest in the world. When using a social media platform, because there is so many people in one place, a marketer must decide something early in their branding strategy.  Are we going to have a single brand or are we going to have multiple renditions of the same brand?

            The classic case of this is how the early car business was branded. In the early 1900’s, Henry Ford of Ford Motor and Billy Durant at General Motors had to make a decision on how the car should be branded. Both knew that the pre-eminent brand in automobiles would be company that could produce a low cost car that the masses could purchase.  If a single brand were created, this would contain costs. However, people want variety. Henry and Billy branded their products in different ways. Their dilemma is the dilemma of the modern social media marketer. Do we go with single or multiple brands for the same product?

            The early car business is an excellent benchmark because what happened from 1908-1928 is a barometer of how moden products develop their brands. In the social media age, in general, a brand is created in three ways. A product is positioned. It is then repositioned. It is the positioned again. This happened in the car business.

            Henry Ford made a brilliant assessment of the car market of 1908. At this time, there was a weak middle class. People were struggling. Henry Ford himself only paid his workers  $.39 an hour.  Creating a car for the masses hinged on one thing---the lowest cost. Henry created the greatest brand of all time, the Model T. Billy didn’t see this. He created multiple brands at GM. As the market evolved, this assessment turned out to be as brilliant as Henry’s.

            By 1923, the market had changed. Now there was now  a middle class in America.   People had disposable income. Albert Sloan, the new CEO of General Motors understood this. People wanted variety and they had the ability to pay for it. The car market was now repositioned. A new paradigm had developed in the car market. People now purchased cars to define their financial state in life. The new market would be based on making cars that people could afford, but low cost transportation was not the where the brand hinged.  There was a car for entry level people. There was a car for middle class people. There was also a car for rich people Alfred Sloan coined the phrase, “A car for every purse”. This contrasted to Henry Ford’s phrase of 1908, “you can have any color you want as long as it is black”. Rich people would not buy a poor man’s car.

            Henry didn’t understand this. Ford Motor Company almost went bankrupt because he didn’t realize how markets had evolved.  As a rule, in general, single brands are not effective in the long-term. As markets evolve, different renditions of a brand are created.  In many cases, you enter the market with a single brand, and then you expand. The great thing about social media is that its scale allows you to monitor the speed of the market. You now have a tool to monitor your markets in real time.

SOCIAL MEDIA STRATEGY AND BRANDING: HOW HENRY FORD MISSED THE PARADIGM SHIFT IN THE AUTO MARKET IN 1923

SOCIAL MEDIA BRANDING AND STRATEGY: HOW HENRY FORD MISSED THE PARADIGM SHIFT IN THE AUTO MARKET IN 1923

            The great fact of social media marketing is that the markets move so quickly. To be a great social media marketer you must be humble. A social media marketer must understand that the great scale that social media creates also causes markets to be repositioned quickly. This repositioning sometimes happens overnight. A social marketer must understand what Yogi Berra said, “It ain’t over to its over…and then it ain’t over”.  Henry Ford was probably the greatest social media marketer that ever lived but his brand failed because he failed to see how quickly the car market and the American society was changing in 1923. It is a sad tale. Perhaps by reliving it, contemporary social media strategists can avoid the terrible fate that fell upon Henry Ford.

            The Model T automobile is one of the greatest brands of all time. The reason why this brand was so successful is because Henry Ford made key observations about the car market in 1908.  It was through social media that Henry was able to do this. Social media is about brands and customers engaging. Henry did this. Because of this engagement with customers, Henry knew that America was thirsty for a car that all could afford. The market of 1908 revolved around price. By 1923, the paradigm had changed. It was Alfred Sloan of GM who used social media of the day to grasp the paradigm shift.

            As 1923 dawned the prospects dId not bode well for Mr. Sloan and GM. His story is an example for social media marketers. The analytics were absolutely in favor of Ford. In 1923, 13 Model Ts were sold for each Chevrolet. This did not phase Mr. Sloan. Why?   Through the social media that Mr. Sloan had available to him, Mr. Sloan knew that he had a great opportunity available to him.

            Mr. Sloan’s social media was engaging with customers. Mr. Sloan traveled extensively. He talked with many customers about cars. Through this engagement, which is what social marketers do today on greater scale through social media networks, Mr. Sloan knew that GM, by leveraging their strengths and by being creative, could overtake Ford. Sloan’s greatest asset was Henry Ford’s arrogance.

            Ford didn’t see that the engineering improvements and the innovations  of his competition were inevitably eroding the Model T’s appeal. These created real paradigm shifts in the auto market. Ford was an expert in driving costs down low, but this was not now an asset in 1923. The paradigm shifts in the market off set this. Mr. Ford could not grasp this. Mr. Sloan did. Mr. Sloan grasped this because he expertly used the social media of the day---which was talking to customers  and to car dealers.

            The Ford story of 1923 was a sad story because Henry Ford was a tragic victim to his own success. In 1913, Ford instituted the $5 a day wage. This act revolutionized American society. Other industries had to follow suit, and by 1923 there was a strong middle class who had much disposal income. In 1923 people wanted more from a car than just transportation. They wanted a car in more colors than black.

            By 1923, most people had already owned a car.  This changed the dynamic of the car market. Because there were so many cars around, the market at the lower end could be satisfied with used cars. In 1923, used car purchases started becoming a significant market dynamic. There was strong competition now at the lower end, which is the space that the Model T occupied.

            The big change was the development of the middle class. Dealers would now accept the trade in of a used car to be discounted for purchase of a new one from a higher price bracket. The higher bracket cars had more appearance, performance, and comfort than the Model T. By 1923, people were using the car to define their place in society. If a person were successful, he wanted to communicate that. He did this communication through the car that he drove. The car market had changed. The Model T was seen as an entry level car for people from the lower levels of society. Sloan grasped this.

            A new dynamic that was coming into play was development of loans to purchase cars.  In 1908, seldom did people take out loans to buy a car. With more disposable income, car buyers were more confident in taking out loans. In this area, General Motors was a pioneer.

            General Motors created their own financing arm in 1919---the General Motors Acceptance Corporation (GMAC). Ford refused to help dealers by creating their own financing arm.  Financing became major paradigm shift car marketing. It happened because of the countless conversations that Mr. Sloan had with customers that he met at the many dealerships that he visited around the country. By 1926, thanks to GMAC, three out of every four cars in the United States were bought on credit. In 1926 only 13 of the more than 130,000 banks in the country had more money available to lend than GMAC.

            Financing also changed something else involving the purchase of a car. Because people now had disposable income, a small monthly payment allowed people to feel that they could “move up” in their choice of a car.  Installment credit allowed individuals to purchase cars that were beyond their means in years past.  They could now afford to purchase 2 or 3 cars for a family, instead of just one.  Most of the time, those 2 or 3 were GMs and not Fords.

Dean Hambleton

dnhambleton@gmail.com

SOCIAL MEDIA STRATEGY AND BRANDING; HOW ALAN MULALLY HAS POSTIONED FORD AROUND SOCIAL MEDIA

Alan Mulally, the CEO of Ford, has positioned Ford around Social Media.  He has repositioned Ford as a  Social Media brand and not as a car company. He has created a technology called Sync. This technology transforms the car into a rolling Smartphone.  It allows all outside technology to be integrated into the car's system.

Ford now has competitive advantage over General Motors.  On Star is based upon TECHNOLOGY INSIDE THE CAR.  Sync is based upon technology OUTSIDE the car.

HOW HENRY FORD CREATED A MIDDLE CLASS THROUGH HIS MODEL T BRAND

Henry Ford completely revolutionized American society with the Model T. This brand created a strong middle class in this country

This nation was in need of a transportation tool that allowed people quick transportation.  On October 1, 1908, the date of the launch of the Model T, there were 88 car companies operating in this country. These brands were targeted for the rich. Most owners felt that to maximize profits a car had to be sold at the highest price possible.

            Henry Ford approached the market from a different perspective. Ford knew that this nation was in dire need of a means of transportation that an average wage earner could afford. He understood that if he did this he would create a pre-eminent brand in cars. He realized that people were thirsting for a car that they could afford to drive.  The Model T accomplished this.

            This created a problem for Mr. Ford. He had large orders that he couldn’t fill. His brand’s success was dependent quality. In 1908, there was a shortage of passable roads for a car. A car had to be tough to withstand the punishment. If the car did need service that car had to be repaired easily.  This placed a premium upon  the workers.  For the Model T to be successful it was essential that Ford use good workers who really cared about their job. This created a problem.

            In 1908, the work in auto plants was hard, dangerous, with terrible pay. The workers had no incentive to do good work. Mr. Ford’s solution revolutionized America. He offered a wage of $5 a day. At the time of this increase, auto workers were making $.39 a day. In this one masterstroke, workers now wanted to work at Ford. 

            This move created real problems for Ford’s competitors. Because of scale, the costs of creating costs were lowest at Ford. Ford was now attracting the very best workers from the competitive companies. The only way that other companies could compete is that if they offered comparable wages.

            This destroyed many competitive companies. The added labor costs made it    impossible for many of the original 88 brand  to compete. In one swoop, Ford created a middle class.

            The car business is one of the most significant businesses in this country. This is because the car business is a “feeder” business. The car business affects the 1 in 8 jobs in this country. To make a car, you need steel, tires, parts. The car business is one of the biggest upholstery clients in the country. All these job sectors now had pay $5 or close to it to attract workers good enough to supply their auto clients.

            Overnight , this created a middle class. Ford used the social media of the day to make sure that people knew where there sudden blessings were coming from. This created a brand for Ford that other automakers could not compete against. In 1908, Henry Ford became a folk hero. He became one of the most beloved men in American history. Unfortunately, things happened to change this, but in 1908 everyone wanted to buy a Ford. Everyone loved Mr. Ford. Mr. Ford and his car were synomous with one another.