HOW DID REVERSE BRANDING CREATE THE MODEL T IN 1908?

HOW DID REVERSE BRANDING CREATE THE MODEL T IN 1908?

Reverse branding occurs when a customer brands the entrepreneur.  This is how the Model T was branded in 1908. How does reverse branding work and why is it so powerful?  The customer chooses the product simply because of the entrepreneur who created the product. This is a powerful form of branding.  An entrepreneur has such a powerful reputation with a customer that this automatically differentiates the product.  It is powerful because the brand is created by the customers themselves. Because of the entrepreneur involved, a product is chosen, to the exclusion of all others, simply because of the entrepreneur who created it.  The entrepreneur creates the product, and the customer creates the brand.  The Model T of 1908 was a successful brand in 1908, because customers had a positive brand for Henry Ford.

       When Henry Ford created a brand for the Model T in 1908, there were 253 auto companies in the US. How did Henry Ford succeed with his Model T.?  Why did the other entrepreneurs fail? Henry Ford offered a low price, but that is not the reason why the Model T went on to become an historic brand. The Model T succeeded because the city of Detroit had a strong brand for Henry Ford. By viewing this two-fold dynamic, modern social media marketers can observe a bench mark for branding. Two things happen when a product is branded. To be successful the product is branded by the marketer.  At the same time, the customer has a brand for the entrepreneur and brands the entrepreneur’s product.

 The Model T of 1908 was successful because it was a modern social media brand. A social media brand is created when the customer and brand create a personal friendship. The two become friends. The brand becomes friends to the product. The customer becomes friends to the brand. In a social media context, a relationship is created that is two-fold. The Model T became an historic brand because it “friended” the public. A two-fold conversation was created between brand and customer.

 It is interesting to study the world that Henry Ford functioned in because there are analogies between our era and his. In 1908, the automobile was seen as the next big thing. Detroit was the center of the action---much as Silicone Valley is the center of our technology world. Inside the car community, Henry Ford had a sterling personal brand. Detroit of 1908 was a machine town and Henry Ford was an ace mechanic. He was also a champion race driver. The lesson for contemporary marketers is that to create a strong social media brand, it helps you immeasurably if you have strong credibility within your community. In creating a brand, ask yourself this question, why should people listen to me? To create a brand, a marketer must have credibility with their customers.

            Because of his credibility, Henry Ford was like Steven Jobs in terms of his personal brand in that era. When the iPhone was first launched, it was highly anticipated because Steven Jobs was personally involved. This was the equivalent situation in 1908 before the Model T was launched. The Model T had strong, initial brand with the public because it was Henry Ford’s car. In a town of ace mechanics, Henry was the ace of aces. Henry was also one of them. Henry worked in machine shops right next to them. They knew that Henry wanted to create a car that would aid them, a “car for the masses”.  They knew that Henry wanted to create a car that would run well, that they could afford, that would be easy to repair. They knew this because Henry was their neighbor.  His car was for them. This sent him apart from Billy Durant and Ransome Olds, and other car entrepreneurs of the time. The other entrepreneurs positioned the car as a toy for the rich. Henry targeted working people.  Detroit created a brand for Henry Ford that the other entrepreneurs didn’t possess.

            The reason why the Model T stood out as a brand is that it had parts that were interchangeable, making repairs easy. Its frame used a new steel from Europe called vanadium that was strong but light, so that the Model T weighed about 25 per cent less than a comparable Buick. Most cars of the day, including the Buick, used ultra-heavy frames to cope with America’s rough and rutted roads, which made them prone to getting stuck.  Henry Ford had a brand for the Model T and this is why it stood out. Detroit had a brand for Henry Ford, which is why they were interested in his unique car creation. The fact that the Model T was Henry Ford’s car instantly gave it credibility. The Model T flexed the road. This allowed it to go places that other cars couldn’t. People had faith in this car because it was Henry’s car.

                        Social media brands are created when brands and customers create a friendship with one another. This is the relationship that developed between the public and Henry Ford.  Henry Ford’s product “friended” the public in 1908.

Dean Hambleton

dnhambleton@gmail.com

SOCIAL MEDIA STRATEGY AND BRANDING;HOW DID HENRY FORD CREATE A BRAND FOR THE MODEL T IN 1908

SOCIAL MEDIA BRANDING AND STRAGEGY: HOW DID HENRY FORD CREATE A BRAND FOR THE MODEL T IN 1908?           

            When Henry Ford created a brand for the Model T in 1908, there were 253 auto companies in the US. Henry Ford offered a low price, but that is not the reason why the Model T went on to become an historic brand. The Model T succeeded because Henry Ford was a brilliant marketer who knew how to brand a product. By observing him, we can gain great insights into branding a product. The Model T became an historic brand because it “friended” the public.

 It is interesting to study the world that Henry Ford functioned in because there are analogies between our era and his. In 1908, the automobile was seen as the next big thing. Detroit was the center of the action---much as Silicone Valley is the center of our technology world. Inside the car community, Henry Ford had a sterling personal brand. Detroit of 1908 was a machine town and Henry Ford was an ace mechanic. He was also a champion race driver. The lesson for contemporary marketers is that to create a strong social media brand, it helps you immeasurably if you have strong credibility within your community. In creating a brand, ask yourself this question, why should people listen to me? The answer to that questions tells you how you should brand your product.

            Because of his credibility, Henry Ford was like Steven Jobs in terms of personal brand. When the IPhone was first launched, it was highly anticipated because Steven Jobs was personally involved. This was the equivalent situation in 1908 before the Model T was launched.

            The reason why the Model T stood out as a brand is that it had parts that were interchangeable, making repairs easy. Its frame used a new steel from Europe called vanadium that was strong but light, so that the Model T weighed about 25 per cent less than a comparable Buick. Most cars of the day, including the Buick, used ultra-heavy frames to cope with America’s rough and rutted roads, which made them prone to getting stuck.  This is an area that Henry created a brand of his Model T. The Model T flexed the road. This allowed it to go places that other cars couldn’t.

            Working people needed a car.  In the market of 1908, price would be a key issue. The entrepreneur that could deliver a car that the masses could afford would create the pre-eminent brand. Ford didn’t invent the assembly line, but he did refine it and applied to a manufacturing situation. This gave the Model T the enormous cost advantages that were needed to create a brand.

            The assembly line was a key to the Ford brand. He could produce more cars quicker, with each new car less costly to produce than the one before it. On January 5, 1914, Ford did something that sealed the Ford brand. He offered to pay his workers $5 a day. For its time, this was a stunning announcement. The car business is a feeder. There are many businesses that must feed the car business for the car business to work. Now these companies had to come up in wages to attract good workers to produce a product that was acceptable to Ford Motor Company.

            A middle class was created. This middle class understood who had created their prosperity and people felt a loyalty to Henry Ford.  Henry Ford had created a brand with the middle class. The middle class now wanted Henry’s car.

            Social media brands are created when brands and customers create a friendship with one another. This is the relationship that developed between the public and Henry Ford.  Henry Ford’s product “friended” the public in 1908.

Dean Hambleton

dnhambleton@gmail.com

WHY MODEL T OF 1908 IS THE FIRST SOCIAL MEDIA BRAND

The Model T was unveiled on October 1, 1908 and it became the first social media brand. The Model T overnight changed American culture and because it did, it became the object of songs, poem, books, movies and plays. This created a dominant brand as does any contemporary product that becomes the object of social media branding.

         To create a brand, a product and customers have to create a friendship. In the Model T’s case, the car became like a family member. This created incredible brand for the Model T. For the first time, a product became branded through customer created content. We have this feeling that social media brands are a new thing. In studying the era one of the most interesting facets of studying the Model T is that it became an almost human being. The Model T became a part of the family. The Model T of 1908 is similar to how Ford introduced the Ford Fiesta in 2009. Customer created content branded the car. This created a relationship between customer and brand.

            One of the most successful social media campaigns has been Ford’s Fiesta Project. In the Fiesta Project, people took a Fiesta and made video around it, wrote posts and blogs, and created a lot of content that created a dominant brand. This happened in 1908. Some of the most popular songs, books, play, and movies revolved around the Model T. The Model T even had a name. “The Tin Lizzie” gave a human quality to Model T. In 1914, one of the most popular songs in America was “The Little Ford Rambled Right Along”.  There was even a Cars of 1908. “The Scandal of Little Lizzie Ford” depicts a demure T garaged with a rakish, low-slung sports car.  Scandalous.

            Simply put, the Model T changed the way Americans live in a way that no other product in our history has. Because this car was affordable to the average citizen, important support structure had to be built. Roads, parking lots, service stations, hotels, and a large part of the domestic hospitality industry were created as a result of the Model T. The car industry has developed the steel, rubber, and glass industry. The car business is the biggest customer of the upholstery business.

            This structure has created jobs. It has created a middle class. When the Model T appeared in 1908, the per capita income of the US was $500 per person. To attract workers, Henry Ford offered a $5 wage, which was radical in that era. Because the auto industry was a “feeder”, and because Ford was an attractive contract to have, supportive businesses had to pay a wage that was comparable.

            The automobile changed our dress, manners, social customs, vacation habits, the shape of our cities, consumer purchasing patterns, and created common tastes. Road construction spawned taxes. These taxes were the driver that allowed governments to create the publicly funded school system. One reason why America has been able to compete in the 20^th century is the education level of our citizens.

            The Model T influenced the way homes were built.  In the building of a house, the front porch and parlor gave way to the building of a garage. Because the Model T was so affordable, the garage was built so that it could contain 2 cars.  This also influenced the way in which couples courted one another. Before the Model T, couples courted one another in each other’s living room. The car created less supervision in dating.

            Auto safety created a new industry. The development of traffic lights became a major industry. Traffic safety made millionaires out of a select group of entrepreneurs. Garret Morgan of Cleveland, a gifted African American inventor whose parents had been Kentucky slaves, followed up by patenting the modern four-way traffic light now used all over the world.

Dean Hambleton

dnhambleton@gmail.com                     

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 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

HOW GENERAL MOTORS USED CADILLAC TO CREATE A BRAND

            Brand image is important separating one product from another. Brand image revolves around perception. It is this perception that creates world class brands. Brand image is significant in a social media era because there are just so many brands. A marketer must do something to set their product apart. Image is a powerful medium to do this.

            Brand image is speech. Through image, a brand talks to their customers. Brand image says “success” as in the case of Cadillac in 1923.  A famous brand image in contemporary marketing is an insurance company’s claim that “you are in good hands with…” followed by an image of a house in two hands. Another image from this company is “….the goods hand people”.  This is a strong speech. It tells people that if they sign for this company’s insurance, they can depend on this company if times go bad. In 1923, if you drove a Cadillac, it meant that you were “successful”.

            Albert Sloan was one of the first CEOs who understood the importance of brand image in creating brand. This is significant. In 1923, nine out of 10 cars on the road was a Ford. It seemed that GM would never overtake Ford. Mr. Sloan knew better.  In engaging with people, his social media of the day, Mr. Sloan knew that the market was changing.

            America now had a middle class. People used their car purchases as a means to define their professional state. Cars were no more than just a means of transportation.  Customers were looking for more than just a low cost car. People wanted a car that would brand them, as it were. Entry level people drove Chevrolet, supervisors drove Oldsmobile, and very successful people drove Cadillac.

            Mr. Sloan understood that brand image would help him overtake Ford. Ford had one car, the Model T. People bought his car because it was inexpensive and it provided cheap transportation. In 1923, people wanted more than that.

            Cadillac was a key brand in overtaking Ford because of the brand image Cadillac conveyed. The image that Cadillac conveyed was success. This cut two ways. Some people drove Cadillac---BUT ALL PEOPLE WANTED TO.  This created a brand for the entire GM family of brands---“GM drivers are successful, I want a GM car”.

            This image was significant in the Black community. Black people were now coming north. In the North, there was an enclave of blacks who were getting some opportunity. Though small, there was a group of blacks that were becoming doctors, lawyers, and business owners---successful people. These blacks wanted a car that would reflect that. To these people, who had to overcome significant obstacles to reach their state in life, a Cadillac was an important symbol.

            This was a significant niche in the car market for GM. The black professional niche created a dependable group of people who would buy Cadillac on a recurring cycle.  This created a significant brand in the black community, which was now beginning to become an important market segment. The importance of Cadillac transcended more than just the people who actually bought the car. It created an important touch point and symbol that helped GM create a significant brand in the entire black community.

            Not all blacks could own a Cadillac, BUT THEY ALL COULD ASPIRE TO owning one.  General Motors brand image was now “success”. Blacks now began to gravitate toward GM because “successful people drive GM”.

Dean Hambleton

dnhambleton@gmail.com

  

BRAND IMAGE; A COMPARSION BETWEEN HOW THE CADILLAC OF 1923 AND THE ACURA OF 1986 WERE INTRODUCED

BRAND IMAGE: A COMPARSION BETWEEN HOW THE CADILLAC OF 1923 AND ACURA OF 1986 WERE INTRODUCED

            A brand image is critical to creating a brand because a brand’s image makes a speech to a consumer. Through its image, a brand explains to the world what the brand’s importance is. The first man to understand the importance of brand image was Alfred Sloan, the CEO of General Motors in 1923.

            In 1923, General Motors wanted to become the pre-eminent brand in cars. To do that, GM had to convey to its customers that its cars are different than Ford’s because the people who drive them are different. The image that GM wanted to convey is that successful people drive Cadillac.  Because Cadillac is part of the GM group, the image that GM was trying to create is that GM is equivalent with success. If you drive GM, you are a successful person---you must be---you drive GM---and GM is successful. Cadillac was used to brand all GM products. Ford let them do it. Ford had only 1 car, the Model T. Henry Ford thought that expensive cars were unnecessary and frivolous.  He gave the field to GM. He wanted to communicate the image that a Model T was a practical car---you can have a dependable ride without an exorbitant cost. Henry Ford didn’t realize that the American society had changed. People now defined their station in life with a car. Sloan realized that Cadillac created a sense of accomplishment for the entire GM brand. This image is an important reason why GM became the leading brand in 1926.

            Times change, and it is important for social media strategists to understand why Honda created a different brand image of its luxury brand, the Acura, when it introduced the car in 1986.

            Cadillac and the other GM brands had been in existence for a long time before 1923. Customers had a history and a relationship with these brands. The Acura was a new car. It didn’t exist prior to 1986. This meant it had no image that it could communicate to people. Acura had to start from scratch. Honda felt that Acura had to create its own image. Honda felt that Acura should have conversations with a new demographic of customers. The customers that would be buying an Acura, were not the same customers that had been buying Civics, Accords, and Preludes.   It had no concept, such as success, to communicate to the public.  Because it is new, Honda did not want a poor introduction of the Acura to hinder their other brands.

            Honda’s strategy, in contrast to GM in 1923, is to create a new image for the Acura. Acura became a new thing. It had separate dealerships, and separate manufacturing factories. In terms of social media, Honda wanted the Acura to create their own fans, their own friends, their own following.

            By relying on a new network the Acura became very successful. Because it created a proper imaging campaign the Acura has gone on to become the largest selling luxury car in the American market. In a social media era, we must understand some things in creating a brand image.

            The image is created in the mind of the customer. Image is something that is received from the brand and interpreted by the customer.

            The prospect positions the image in relation to other products, with the help of marketer. General Motors was able to define Cadillac as successful and cool in relation to Model T, as old.

            The image must also be flexible. This is why Sloan invented annual model changes, to keep adding buzz to the image.

Dean Hambleton

dnhambleton@gmail.com  

           

"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 OF GENERAL MOTORS USED A PRODUCT MIX STRATEGY IN 1923 TO OVERCOME THE MODEL T INSURMONTABLE LEAD IN 1923

HOW ALBERT SLOAN OF GENERAL MOTORS USED A PRODUCT MIX STRATEGY IN 1923 TO OVERCOME FORD’S INSURMONTABLE LEAD

            In 1923, Albert Sloan of General Motors used a product mix strategy to become the preeminent brand in cars. This is a case that every social media marketer should follow.  At the time this happened the Ford Model T was the most significant and successful brand that has ever been created. Using the Social Media of the day, General Motors was able to quickly overcome Ford’s seeming overwhelming market lead. Studying the 1923 General Motors brand and social media strategy is important for two reasons. 

            To be a successful social marketer, you must be humble. You must realize that no matter how strong your brand is, it is vulnerable and can be easily overtaken with the proper strategy.  On the other hand, if you are an entry level brand, you must never feel ambivalent in confronting a major brand that is well- established. There are no perfect brands. In social media, any brand can be overtaken under the right kind of circumstances. Ford vs. GM in 1923 is a perfect example.

            As 1923 began, the Ford Model T had a brand that seemed insurmountable for a competitor to overtake. Ford had 60% of the overall market. Ford only possessed 12%.  In the entire auto market for the U.S. at the beginning of 1923, 90% of the cars that were on the road, belonged to Ford. No one thought that it was possible for GM to overtake Ford’s lead. Albert Sloan used the social media of the day. Because he did he knew that Ford was a very vulnerable brand.

            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 became head of GM, he traveled the country talking with customers. He realized that some very important things had occurred in the American society and this changed the entire makeup of the American car market.

            In 1908, when Henry Ford first developed the Model T, the average American citizen did not make a middle class wage. Few people made good money at their jobs. Even Henry Ford only paid $.39 @ hour. Henry made an historic observation. He observed that the brand that developed a low cost car, a car for the masses, would become the pre-eminent brand in cars. Henry bet that low cost would be the key factor in purchasing a car. Ford developed the Model T and sales simply took off.

            By 1923, in engaging people, Alfred Sloan realized that things had changed. There was now a middle class in America. “Morning had come to America”. They had disposable income. The American market wanted something more than just cheap transportation. They wanted a car that was enjoyable and comfortable to ride. Driver comfort was a critical touch point in the consumer buying decision.

            An important fact that Alfred discovered, through his social media, was that people used a car to define their economic position in life.  In the American society, there were entry level people, middle class people, and there were very successful people. People wanted a car that would reflect that. The Model T was now seen, in 1923, as a car “for farmers”.

            The difference between Henry Ford and Billy Durant, the creator of General Motors, in 1908 was that Henry thought that people only wanted low cost. Billy thought that people wanted affordable cost, but variety in their car products. Billy Durant decided to have several brands under one big umbrella brand. Billy understood how the long-term car market would develop. He made available the tools that Albert Sloan would need in 1923.

            Albert’s strategy was a “car for every purse”. His strategy also revolved around the fact that GM “made money not cars”.  People would begin their lives by buying a Chevrolet. Once they were at a job for a while and had some pay raises, they traded the Chevy in for a Pontiac. As they developed in their job and began to move up, they moved up to an Oldsmobile. When they became supervisors, they bought a Buick.  When they became a vice-President, when they were successful, people bought a Cadillac.

            This was a brilliant strategy---a strategy that simply offset Ford. GM’s product mix strategy left Ford with nowhere to go  It was a strategy that Ford had no answer for because Ford had just one large entry for the entire market---the Model T. The Chevy could now compete against Ford in the low cost market. Besides a low cost, the Chevy had a self-starter, headlights, had a closed body, and had interior heating. It appealed to women who were just now entering the work force.  Ford made a few Lincolns, but it had no major luxury brand in 1923 to compete with Cadillac. GM now owned the luxury market.. This market created an intense brand for GM and created a strong revenue stream which supported the entire General Motor organization. This branding created an important touch point in the consumer buying decision

            With this strategy, GM did the unthinkable. It overcame Ford by 1926. To this day, Ford has always lagged behind GM. The lesson for contemporary marketers is this. In a social media age you must be humble.  Irregardless of your market share, because of the size of social media platforms, your market share can easily and quickly be overcome if your opponent has a compelling competing product. In 1923, Ford had 90% of the car market. By 1926, General Motors had the leading market share. Albert Sloan did not have Facebook, Twitter, and YouTube. If he had, he could have taken away Ford’s 90% market share in a matter of months, or even weeks.

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   

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.