GM Crazy For Culling the Hummer – Branding Case Study

One of the strongest and newest automotive brands to hit the scene in the last decade has been the Hummer. It is a symbol of strength and one that says you have arrived. This is what intrigues Hummer buyers, as it is a sign of being king of the hill. But now we find with higher oil prices and the focus on more fuel efficient vehicles of the future, this brand maybe sold out of General Motors portfolio.

Yes, today sales of this large vehicle are down, but much can be done to save the brand, even if GM is hemorrhaging cash and needs to sell something to keep it out of bankruptcy. There are strategies that can be employed to prevent this chaos. For instance, General Motors could:

Make it a Hybrid Hummer
Make it out of lighter material
Make Military Vehicles for Third World Nations
Make Golf Carts with the same shape and brand
Collect Royalties for Toys, Movies, Etc.
Selling such a noteworthy line of automobiles for pennies on the dollar is completely unwise, even if GM thinks it needs to fire sale some of its assets to stay in business. This brand is a high-end brand and it stands for toughness and quality in the minds of the consumers. Indeed, it also stands for excess and waste in the minds of others, mostly non-buyers of the brand.

Still, with a loyal following and being the icon and symbol that it is today, selling it away on the cheap would be a mistake taken for short-term hemorrhaging, which in the end will hurt General Motors long-term. Thus, to sell it now would be a mistake. Think on this.

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Twitter As an Instrument For Increasing Brand Loyalty

For years internet use has consistently been on the rise. This development has lead consumers to take their own initiative when contacting and interacting with companies and brands. In addition to company websites, communities and blogs, in which consumers can exchange information and experiences about a product, are becoming increasingly significant.

With the emergence of Twitter the spread of information between users has experienced an even stronger dynamic. Messages are distributed at neck-break speed and even attract a high attention particularly on journalistic homepages; a comprehensive control for positive or negative information is hardly possible. While in the USA not just big players, the likes of Starbucks, Dell or Southwest Airlines, are using the micro-blogging service to get in touch with their customers, companies in Germany still seem to treat Twitter as strange stepchild. Use of this communication solution by the companies is situated easily in the lower six-figure range. Not completely to be outdone by new and meaningful communication tools, German DAX-companies and large brand manufacturers do set good examples by “twittering” amongst their important target groups.

The potential of Twitter for companies

o Attention in the online-world
o Distribution of news
o Communication
o Execution of viral marketing campaigns
o Nurturing of reputation
o Source of current trends

Twitter as a brand ambassador

The use of Twitter as a medium of company marketing begs the questions regarding the effectiveness of the method. Why is such an offer attractive to users? And what is the added value for companies? Basically, Twitter is a suitable medium to care for communities with regards to a random subject so that companies and their brands also realize a profit. The strategy consultancy 2hm & Associates together with the Marketing I Professorship of the University of Mainz delved into the issue whether a commitment to Twitter increases brand loyalty. To this end a comprehensive online-survey of Twitter users in the field of different automotive brands was duly executed.

Entertainment and interaction lead to brand commitment

The study shows that a brand presence on Twitter, as in the case of the AUDI brand, has an effect on emotional brand commitment; that is the psychological consumer loyalty attached to the brand. Owing to the speed at which the concept moves, and the minimal lifespan of messages, the information value of a Twitter note plays no significant role (the average “half life” of a Tweet is two to five minutes). Based upon this short time period they do not serve as well-founded information sources. On the other hand, in the case of AUDI, the entertainment value of a Tweet has very high impact. One explanation lies in the user interaction with different Tweets which spark inspirations, clues or ideas. The reciprocal character and the consequent vibrancy of Twitter create an association network. Within this network a game is developed which increases the entertainment value for the user; especially notable for users with a passion for automobiles and are interested to be in touch with the company and particularly with their brand company. In the case of AUDI the impact of Twitter is exceptionally noteworthy. To what extent, or whether at all, a Twitter presence may increase brand loyalty is for each company and brand to seriously examine.

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How to Create a Business in a Brand

These days many businesses are thriving and striving hard in order to create their presence and enjoy higher sales. The business branding overall has become an eternal need of every business and without which it would be more difficult for any business to survive.

Earlier, people thought that branding is only required for the large businesses, but as the time moves on it is proved that branding is not just required for large businesses, but also for the small businesses.

However, it doesn’t matter whether you are heading a large business or a small business, but most important is that you should have a detailed strategy of branding your business in order to achieve success.

Below are the steps that will help you to create a better business brand

Follow KISS:
KISS is a most prominent branding terminology which stands for Keep it Short and Simple. Use Kiss while defining the name of your business because it plays an important role in your business branding. Most of the successful business brands usually have very short and simple names which are easy to pronounce and remember. Just remember the names like BMW, Audi, Intel, Google etc. The longer or complicated business names are much difficult to pronounce and recall.

Use a creative logo:
People usually identify a business not only form its name but also from its logo. A business logo is the identity of every business that why special cares to be taken while designing the business logo. Remember, if somebody takes the name of Mercedes then the immediate thing that comes to the mind is the very famous three spoke Mercedes Benz logo. Same is with BMW and Audi. But this is not restricted to the automotive brands only, but other companies also like Microsoft, Apple, Nike, Mac Donald’s etc.

Choose the right color combination:
It’s not just the logo or business name, but the colour theme of your business also plays a major role in its branding. Once you have identified your business name and logo then all your branding and promotional material should revolve around the colour scheme that you have used in your logo. For example, most of the Mac Donald’s outlet uses the shades of Yellow in their interiors and promotional merchandise and even on the food packages because that colour represents their business. Same is done by other brands like Dominos, Shell and DHL etc. The colour of your business has a psychological impact on the minds of the consumers and that’s why it is important not to choose more vibrant or difficult colours. Use solid and simple colours like Blue, Green, Red, Yellow, White and Black in their different shades.

Choose your USP and stick around it:
USP or a Unique Selling Proposition is a very small word but it has made a huge impact on many businesses. These days competition is intense and therefore in order to stand out from the competition, you need to have a USP of your business and your entire branding strategy revolves around the USP. The brand like BMW and Mercedes has its USP, as they offer premium and high safety products. While brands like E bay and Ali Baba has the USP as they offer a wide selection of very affordable products. Similarly, Mac Donald’s have their USP of providing the delusions burgers. The USP helps people to identify your business with a product or services. For example, when someone talks about a burger then first thing comes to the mind is the Mac Donald and when someone talks about the sports shoes then brand name comes to mind are the Nike, Reebok, Adidas, and Fila.

Do brand hammering:
One of the most important things for every business is the brand hammering. The brand hammering involves continues to push to the brand to its target audience so that people could easily connect with the brand. Although sometimes a brand hammering proves quite expensive because it requires many promotional and marketing exposures. In order to make your brand stand apart from other brands, you need to create a chain of TV commercial and print advertisements so that it will hammer deep into the minds of the consumers. Although, today in the modern age there are many digital marketing channels which are very much affordable and good for brand hammering.

Bring emotion to your brand:
These days because of the excessive stress and hectic lifestyle people are getting more emotional even for the small things. Anything that connects to their emotion brings out more success to the brand managers. If you have a product or services then create an ad commercial keeping in mind the emotion of the consumer. These types of emotional ads would more connect with the consumer. The people who are emotionally attached to a product or a service were more likely to remain loyal towards them for many years. Example of an emotional connection could be seen in many car advertisements these days in which marketers put more focus on the safety of your family, especially your kids instead of talking about the luxury features of the car. This brings a sense of emotion and responsibility in the parents towards their family and that highly influences their buying decision. Sometimes they even ignore the most important factor i.e. price while buying a car based on their emotional concern.

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Benefits of Mobile Website for an Automotive Business

The present period of mobile revolution provides an opportunity for businesses to capitalize on the mobile marketing strategies. According to comScore, nearly 73 million Americans accessed Internet through their smartphones in 2010. The rise of smartphone usage for accessing Internet has made mobile web presence a competitive necessity for every business.

When it comes to automotive businesses, mobile websites aid greatly in improving business as automobiles are widely searched products over mobile Internet. Moreover, due to the easy access of mobile Internet, cell phone users also use it to find out nearest auto dealerships in their area.

This article discusses about the benefits of creating a mobile website for your auto business.

Mobile web usage for auto content: Statistics show that the growth of mobile Internet usage is robust. A significant number of people are looking for automobile related content on their mobile phones. According to ‘comScore/Millennial Media Mobile Automotive Study – 2011’, more than one in five (21 percent) mobile users in U.S. access auto content almost every day.

Mobile websites are easy to develop: Mobile specific version of websites can be developed easily. You need not create a new website for mobile display – you can simply modify your normal desktop website to suit the mobile browsers. You can even make use of readymade templates to develop a website as per your needs. But remember, when it comes to creating a mobile website for your business, it is better to approach a reputed marketing agency which offers mobile website development services specifically for automotive businesses.

Can reach wider audience: The increase in usage of smartphones and tablets, has also made a multi-faceted web presence reach wider audience. Recently, research firm IDC forecasted that there will be more mobile web users than PC web users in US by 2015. This clearly states that there are high chances for your mobile website to connect with large population and generate huge traffic. Especially, when a customer is looking for local information, he is most likely to access the mobile Internet and get the information. Hence, they prove to be much effective in getting customers for the business.

Goal specific content makes the search easy for the user: Due to the less screen size and the need for easy loading of the pages, the content provided in the mobile website is limited to only key information of a particular vehicle. This specific product-focused content makes the website highly optimized for the automotive searches. Hence, when user is looking for particular information of a vehicle, your website appears first in the search results due to the exact match of the key words in your website content with the search term. Also, optimizing your website for local search makes your website appear first in the local searches. Hence, mobile websites can make the search easier and also improve your automotive brand visibility.

Differentiates you from competitors: A mobile website of your auto business gives you a competitive advantage over your competitors in the market. It also enhances your business reputation. A mobile website helps you stand out of the crowd; presents a positive and contemporary brand image of your business in the market.

With increasing number of mobile users, mobile websites can make your business reach a large section of people. Therefore, it is necessary to create a mobile website for your business and enjoy all the above said benefits.

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The Automotive Industry and Global Trade

In the United States, one city is typically synonymous with the automotive industry. It’s challenging to think of an American made car without thinking of Detroit, Michigan, and in recent years the financial trouble the automobile giant has endured. Though foreign manufacturers in Japan and Korea have gained strength and drivers in the US, it doesn’t necessarily mean US automakers are done. MSNBC reported in late 2011 that the Big 3 in Detroit – Chrysler, Ford, and GM – enjoyed a nearly 30 percent increase due to a demand in sports utility vehicles and trucks.

Quick Facts About the Automotive Industry

Since 2000, an average of 48 million passenger cars alone have been manufactured annually around the world.

According to Worldometers, China produces one of every four new cars, and more than half of all cars are produced in Asia and Oceania.

Of the approximated one billion passenger cars on the road around the world, close to 25 percent of them are registered in the United States. (Source: International Organization of Motor Vehicle Manufacturers)

According to Businessweek, the top selling car in the world is the Toyota Corolla, with sales of well over 35 million.
Major Exporters of Automobiles

While China is one of the world’s largest producers of passenger vehicles, the country is not necessarily ranked high among top global exporters. The International Trade Centre recently put out a report on top automotive exporters, with the following leading the pack:

Germany – The roots of the German automotive industry date back to the late nineteenth century and the various patents owned by Karl Benz. Where in that time the country produced barely a thousand cars a year, now over five million are manufactured. Popular German brands include Mercedes-Benz, Volkswagen, BMW, and Porsche.

Japan – Gasoline-powered vehicles have been built in Japan early as 1907. Despite natural disasters that threatened the nation’s economy, Japan has worked to maintain its place among top car producers and exporters. Toyota, one of the top selling brands of all time, is based in Japan, as are Nissan, Honda, Mazda, and Subaru.

The United States – The US auto industry took a hit in recent years due to the economy. Through a combination of asset liquidation and government funding, the major brands (Ford, Chrysler, and General Motors) have worked to stay afloat. Despite this issues, the US remains a top producer with over seven million cars made on average in the country.

Republic of Korea – Over the last decade, South Korea has established itself as an automotive power thanks to an association between Daewoo Motors and GM, and Hyundai’s presence in the US with a major assembly plant.

Canada – While the country has no major native brand, Canada is important to the automotive industry by virtue of the many plants established by foreign brands, including Ford, Toyota, Chrysler and Honda.
Major Importers of Automobiles

While many countries produce domestic brands, automobile imports remain strong in economies that seek certain qualities, such as fuel efficiency and safety features. Among the top importers of automobiles:

The United States – Of the top brands sold in the US in the last year, many names bring to mind manufacturers from other lands: the Toyota Camry and Corolla, the Nissan Altima, and the Honda Civic and Accord.

Germany – While German brands dominated domestic sales in 2011, there is enough of a demand for foreign models to make Germany an important importer. Ford, Skoda (based in the Czech Republic), and Hyundai are popular names.

United Kingdom – Luxury is often synonymous with the British automotive industry. Aston Martin, Bentley, and Rolls Royce are three makes manufactured here, though Ford, Volkswagen, and the French Peugeot are seen more often on the roads.

Italy – Italy is known for the Fiat and Ferrari, but foreign makes like the Ford Fiesta, the French Citroen C3, and the Volkswagen Golf are also in demand.

France – The French appear greatly committed to domestic brands, particularly Renault and Peugeot, but foreign models from Ford, Volkswagen and the Romanian Dacia are gaining ground in the last year.
The Aftermarket

Equally important to the automotive industry is the manufacture and sale of auto parts and accessories, commonly known as the aftermarket. Sub-industries relevant to automobile sales may include products like tires and paint, stereo and GPS, engines and chemicals needed for operation, leather and vinyl for seating and safety features. According to the Automotive Aftermarket Industry Association (AAIA), the aftermarket in the US alone totals over $250 billion.

Though faltering economies and natural disasters have given the international automotive industry a number of challenges, one can conclude sales are destined to remain strong so long as the need for personal transportation remains. How and where people will by their cars may change over time as considerations for eco-friendly features grow in demand, but so long as people continue to buy automobiles the global industry will continue to gain speed.

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Project Risk Management and Assurance

Why do so many organisations embark on high-risk projects without demanding robust project assurance?

Projects fail for many reasons. Recent global studies indicate that inadequate risk management is a common cause.

Successful project managers aim to resolve high levels of exposure before they occur, via systematic risk management processes.

Many projects are inherently exposed to myriad risks and are often significant in scale, complexity and ambition. Delivering large-scale projects can often be adversely impacted by a bias towards being over-optimistic.

Imperfect, insufficient or inadequate data increases exposure that often results in over-estimating benefits and under-estimating costs.

Managing macro and micro-level events related to achieving project deliverables, whilst balancing the needs of many stakeholders, has become increasingly important.

Assessing risks at both portfolio and work-stream levels helps increase confidence that risks are understood.

Projects are often prioritised relevant to their levels of perceived exposure and one has its own risk profile.

Project Risk Management

Project risk management focuses on identifying, analysing and responding to project events.

It should be designed to systematically identify and manage levels of uncertainty and potential threats to delivering project objectives successfully.

Risk management processes should be iterative throughout a project’s life-cycle and embedded in project management planning and activities. Smaller projects often require minor work and periodic monitoring.

Complex projects need formalised processes to analyse, manage and report risks.

Good reporting relies on clear descriptions of all exposure, their impact on the projects, and potential costs for mitigation and inaction.

This helps ensure project personnel understand the potential impact risks may have on projects’ success and have prepared strategies to minimise negative consequences.

Problems occur when there is limited visibility of risks at project and portfolio levels or approaches to risk-management are ad-hoc and inconsistent.

Further problems can arise when risks are identified but recorded at a very high level accompanied by highly subjective risk ratings, rather than being the result of more substantive risk assessment.

When these problems arise, an organisation would benefit from clearer, more formal and wide-spread processes for capturing and monitoring risks.

Project and Portfolio Risk Assessments

Project and portfolio risk assessments should be undertaken to understand their risk profiles and associated threats in achieving business objectives.

Assessments should identify the action plans to address the risks identified and allocate executive responsibility to manage them. Additional risk assessments should be carried out on selected projects (perhaps by prioritising them by value or complexity).

Risk management processes should be on-going and monitored throughout a project’s life-cycle.

Regular risk reports would provide Project Sponsors, Senior Responsible Officers and Steering Groups with better visibility of projects’ risk profiles.

Whether you’re responsible for overseeing or managing a project, robust project assurance will help you address the risks that threaten its success.

Mark Gwilliam FCCA CA is the founder and Director of Business Advisory Services.

From humble beginnings, the firm has grown from strength to strength.

It has matured from a small accounting and tax services practice to one that helps small business owners, entrepreneurs and executives navigate complex challenges; including strategy, risk management and internal audit, managing shared-service centres and operations.

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