Trashing Brands and Other Stuff
The idea that Bostonians would wake up one morning and find out that the Ritz-Carlton Boston was suddenly the Taj Boston is astonishing. Built in 1927, the Ritz-Carlton was to Boston what the Plaza was to New York; the Palmer House was to Chicago; and the Adams Mark was (and is) to San Francisco—a home away from home that offered unmatched elegance, service and ambiance. I’ll take it one step further: perpetual perfection.
The motto of the Ritz-Carlton staff: “We are ladies and gentlemen serving ladies and gentlemen.”
A second Ritz-Carlton exists in Boston. But if you Google “The Ritz-Carlton Boston,” the following is what appears on the screen, under the famous, blue Ritz-Carlton logo—a lion head atop a kingly crown:
We’re sorry, but we are unable to locate the page you have requested.
Please confirm that the URL has been spelled correctly. If so, then the page you requested no
longer exists at our website.
The implication that I’m too stupid to spell “Ritz-Carlton” is an insult. People are directed to other Ritz-Carltons. But THE Ritz-Carlton is dead.
In yesterday’s New York Times, there was a full-page ad that featured a stylized, black panther wearing a diamond necklace and matching earring. The headline: “LUXURY BEYOND YOUR WILDEST DREAMS.”
The subhead: “Introducing the Taj Boston. January 11, 2007.” No mention that the new Taj is the old Ritz. No mention of the Ritz anywhere in the ad.
Is it smart to take a grand brand—with an 80-year record of excellence and a roster of rich and famous customers from all over the world—trash it, and start over?
You have to shake your head in wonderment.
The Power of Brand
Over the years, a series of large, old-line American corporations—with wonderfully evocative names—switched to initials and acronyms. For example:
—International Business Machines became IBM.
—American Machine and Foundry was turned into AMF.
—West Virginia Pulp and Paper is now Westvaco (actually MeadWestvaco).
—National Cash Register went to NCR.
It made sense. These companies got into other areas. Cash registers and business machines are out of another century and these companies have moved on.
For example, in the 1970s, my wife, Peggy, and I bought a little Sunfish sailboat made by AMF. Had the conglomerate kept its original name, I would’ve stopped and thought, “Why is a machine and foundry company making a fiberglass boat?”
On the other hand, some changes are incomprehensible. One of the most brilliant men in direct marketing is the legendary Lester Wunderman who, in many ways, revolutionized the business. Out of the blue, its parent, Young & Rubicam of Chicago, summarily changed the name from Wunderman Cato Johnson to Impiric, apparently hoping to drop the stigma of it being primarily a direct marketing agency.
I ran into Lester—going strong in his eighties—happily signing books at a DMA conference. I asked him what the hell this Impiric thing was all about. He simply shook his head in bewilderment. Sixteen months later, the name of the agency was changed back to Wunderman.
The Marshall Field’s Fiasco
The May 4, 2006 edition of Business Common Sense was titled, “Trashing a Brand—Smart or Dumb? Cingular to bite the dust, joining Marshall Field’s and NDL.”
Cingular and NDL weren’t long-time brands that created warm fuzzies in the hearts of their customers. Marshall Field’s—a Chicago fixture for 154 years—is a different story. So offended by the change from Marshall Field’s to Macy’s, 60,000 irate Chicagoans signed an online petition pleading Federated executives to retain the Marshall Field’s name rather than change it to Macy’s.
It turns out, that during this past holiday season, customers stayed away in droves. “Macy’s Learning It’s What’s in a Name” was the title of the Jan. 3, 2007 story in the Chicago Tribune. In the words of Chicago retail consultant Keven Wilder, who lives across from the State Street store, during the lead-up to Christmas, “You could shoot a cannon through there most of the time.”
Updates on Stories From 2005-2007
Over the past year and a half that this cranky little e-zine has been in existence, I’ve touched on many current issues and tried to relate them to your life and particularly to your business and career.
The Marshall Field’s continuing brouhaha was one of a number of stories covered in these pages that suddenly reappeared in the news just during the past three weeks. Among the others:
7/26/05. A Celebration for Women Everywhere: Victory Amidst a Broken System and a Flawed Process
This was the account of Marin Alsop becoming the first female conductor of a major American symphony orchestra. It was a messy arrangement because the musicians were not consulted. Her tenure starts this fall.
Meanwhile, Alsop guest conducted the Philadelphia Orchestra and sent the audience into orbit. I sat in the Conductor’s Circle—several rows of seats behind the orchestra where viewers are facing the conductor and can watch the interaction with the musicians. Alsop, who was clad in black slacks and a long, black silk coat-like garment, was magical—fluid and intense—making continual eye contact with the musicians and wonderfully expressive.
My neighbor, Peter Dobrin, the usually reserved senior music critic of The Philadelphia Inquirer wrote:
Saturday night with the Philadelphia Orchestra, Alsop showed there is talent behind the news, a conductor who is a real personality … But the bigger statement came in what Alsop conducted and how strongly each piece reminded us what art can do: a new concerto for double bass by John Harbison, and Copland’s Symphony No. 3 … Harbison’s piece referenced the history of the instrument for which it was written. The Copland, however, came as an enormous surprise, at least to me. The work, premiered in 1946, is established as the American symphony. What’s so striking about it now is how it remains a most eloquent expression of what America is all about. Music can do all that? When you get to the fourth movement, when Copland quotes his own “Fanfare for the Common Man,” you have no doubt … For all of its common-man themes, the Symphony No. 3 is a complex work, and Alsop pressed upon it her view that its message remains urgent.
I ran into Bob Gill, a retired doctor, in the Union League parking garage and told him that the Baltimore musicians did not particularly want Alsop as their conductor. “They can send her up here any time,” Gill retorted.
8/18/05. Time Warner and the Vision Thing
Last summer, Time Warner got into a fight with corporate raider Carl Icahn, who claimed that the company was inefficient and changes needed to be made. I described the history of the signature publication, TIME, and how under the guidance of Henry Luce, just 20 people created the first 32-page issue containing 117 articles. I checked the current masthead and discovered that on Aug. 20, 2005, that it took 269 people to create 63 articles in 49 editorial pages.
“If I were in charge,” I wrote, “I would begin with the bloated, bloviating bore that is the company’s signature product, TIME. I would go through the masthead and delete 169 people, and I would double the salary of everyone who was left—around 100 people—and watch what the hell happened.”
On January 17, Chairman and CEO Ann S. Moore announced the elimination of 172 editorial jobs across its consumer magazines and 117 more from the business side.
9/20/2005. The 800-Pound Gorilla no one Talks About
Gendercide in China—the murder, abandonment, international adoption and abortion of girl babies—has resulted in an imbalance in the ratio of men to women. I wrote:
The current ratio of birth registrations in China is 118 boys for every 100 girls. In the rather droll, understated words of the BBC’s Adam Brookes, “In other words, nearly one-seventh of Chinese girl babies are going missing.” For second births, the ratio is 152 boys for every 100 girls, according to Arthur E. Dewey, assistant secretary of state for Population, Refugees and Migration. Although projections vary, several studies have indicated that by 2040 the population of China will reach 1.6 billion. If the gender gap is 10 percent, that means by mid-century China will have 160 million more men than women. That is roughly equivalent to the combined populations of Germany, France, Belgium and Switzerland today. China will be awash in testosterone. The World War slated for the middle of the 21st century will not fought be over territory, nor oil, or water or gold. The war will be over women.
My estimates of the numbers were high, but the problem is very real. On January 11, Jim McQuillan, The Adman, sent me a hyperlink to an AP story on a China Daily front-page report. It stated, “China will have 30 million more men of marriageable age than women in less than 15 years as a gender imbalance resulting from the country’s tough one-child policy becomes more pronounced, state media reported Friday. The tens of millions of men who will not be able to find a wife could also lead to social instability problems …”
11/20/05. Philly Phundraising Phollies
One weekend, I spent a magical afternoon at the Independence Seaport Museum with its splendid collection of paintings and interactive exhibits of ships from the early days of the colonies to today’s supertankers. Could I volunteer to help the museum acquire members or raise money as I had for the Whitney Museum in New York for many years? In particular, I was interested in the possibility of generating funds for the cruiser Olympia, anchored at the Penn’s Landing wharf. This 100-year-old battlewagon was part of Teddy Roosevelt’s Great White fleet that circled the globe in 1908. According to The History Channel, she was in desperate need of $15 million for restoration.
I wrote museum Director John S. Carter, and offered to raise money and help acquire members on a pro bono basis. At the very least, I suggested, he might like to see what other museums around the country were mailing so that his people were not reinventing the wheel.
A couple of weeks later, a large envelope from the Seaport Museum arrived. No letter acknowledged my letter. It was the annual report showing an endowment of $47 million.
The message from Carter was clear: “We do not need members, we do not need money, and above all, we do not need you, chum. We’re rich.”
From this morning’s Philadelphia Inquirer:
Seaport museum ex-chief accused: Officials claim John S. Carter defrauded the institution of $2.4 million to support his lifestyle.
The Independence Seaport Museum accused its former president yesterday of defrauding it of $2.4 million to pay for a “lavish lifestyle” that included trips to France and New Zealand and freewheeling spending on paintings, high-end furniture and expensive boats. The ex-director, John S. Carter, is under FBI investigation, Carter’s lawyer confirmed last night. Despite being paid $301,000 a year—more than the head of the Philadelphia Museum of Art—Carter systematically ripped off the seaport museum, the museum contends in a lawsuit.
—Craig R. McCoy and John Shiffman, The Philadelphia Inquirer, Jan. 23, 2007
8/31/06. Satellite Radio: Seriously, Folks, Are XM and Sirius Serious?
Two of the most fascinating business launches I’ve seen were the Sirius and XM satellite radio networks. They had to invest huge bucks in shooting transmitters into orbit, come up with programming and then do the marketing. The business model was impossible to test. Focus groups and surveys could be done. But the massively, expensive system had to be in place before they could ask for money.
I pointed out the many broken marketing rules and the gargantuan 2005 losses by Sirius ($863 million) and XM ($667 million) and suggested, “ My guess is that room exists for one such service, and that the two will eventually be forced to merge.”
The January 2 edition of the entertainment publication, Variety, reported that Sirius had 6,024 million subscribers as of December 31 and had reached “its first cash-flow-positive quarter.” The story ended with the line, “The two companies reportedly are in talks about merging in hopes of stemming their consistently large losses.?”
11/29/05. When Lousy Ideas Fly
The giant A380 Airbus was the subject. It’s slated to carry 800 passengers, cause billions of dollars in expenses at airports because its weight would destroy runways and overpasses. In addition, other airliners would be forced to fly twice the normal distance behind it to avoid the severe dangers of its wake.
On January 17, after warning of production delays that resulted in penalty payments, Airbus announced it would have an operating loss in 2006. Meanwhile, Boeing is kicking butt. In the Nov. 28, 2006 edition of The New York Times, Leslie Wayne reported that Boeing is turning down orders:
At Boeing, for instance, orders for its 787, nicknamed the Dreamline—which will not hit the market until 2008—are so strong that it is sold out for four years, and the earliest a new customer can get a plane is 2013. In all, 36 customers have ordered 455 planes. The venerable 747, which was headed to the end of the line, has, meanwhile, received a reprieve as airlines have shown renewed interest in the plane. Other popular jets have a two-year waiting list.
11/02/06. The New Robber Barons: Is It Time for Salary Caps on Publicly Held Corporations?
I mentioned my brief brush 30 years ago with a very young hotshot entrepreneur, Walter Forbes, who went on to become chairman of Cendant (CompuUCard/CUC, Avis, Ramada, Days Inn, Century 21). After two mistrials, Forbes was convicted of a $14 billion accounting fraud, and “takes his place in the pantheon of corporate rogues along with Enron’s Ken Lay and Jeff Skilling, Bernard Ebbers of WorldCom, Tyco’s Dennis Kozlowski, and the Rigas boys of Adelphia.”
As a result of that column, a U.K. reader sent me a private e-mail that said, “I wrote the first successful mailing for CompuCard over here. More to the point, I just KNEW Forbes was a crook. I could sense it. The 21st century is getting more and more like the mid-19th every day—I remember reading ‘The Robber Barons’ years ago.”
On January 17, District Judge Alan H. Nevas sentenced Forbes to 12 years in the minimum-security federal pokey in Otisville, New York and to pay $3.725 billion in restitution. John Christoffersen of the Associated Press reported, “The 64-year-old New Canaan, Conn., resident asked for leniency based on his age and charity work.”
Yeah, right. Tell that to John Rigas of Adelphia Corp. The 82-year-old founder is looking at 15 years in the slammer. He used the company as his private piggy bank, running up off-the-balance sheet private debt on bank loans of $2.3 billion.
10/26/06. Good Pilots and Dead Pilots: Flying as a Metaphor for Business
When New York Yankees pitcher Cory Lidle and his instructor crashed a Cirrus SR 20 high-performance two-seater sport plane into a high-rise condo on 72nd Street and the Hudson River, most analysts agreed that they were out of their element. “There are two kinds of pilots,” my late family friend, Miles H. Vernon—himself a superb pilot—used to say, “good pilots and dead pilots.”
The story looked into a number of private plane crashes over the years that killed some high-profile people: Will Rogers and Wiley Post, Elizabeth Taylor’s husband, Michael Todd, New York Yankee catcher Thurmon Munson, John F. Kennedy, Jr. and the son of NBC Sports producer, Dick Ebersol.
It turns out that dead pilots turn up in commercial airlines. When Comair Flight 5191 killed 49 when it crashed on take-off at the Lexington, Kentucky’s Blue Grass Airport on August 27, it was quickly determined that the pilot had used the wrong runway—one that was unlighted and too short for a jet of that size.
On January 18, the cockpit tapes were released and it turns out that the goofball pilot and co-pilot (who was the only survivor)—instead of concentrating on the pre-flight checklist—were chit-chatting about their dogs, pay and working conditions. This was a clear violation of the 1981 Federal Aviation Regulations FAR 121.542/135.100, also known as the “Sterile Cockpit Rule:
b) No flight crew member may engage in, nor may any pilot in command permit, any activity during a critical phase of flight which could distract any flight crew member from the performance of his or her duties or which could interfere in any way with the proper conduct of those duties. Activities such as eating meals, engaging in non-essential conversations within the cockpit and non-essential communications between the cabin and cockpit crews, and reading publications not related to the proper conduct of the flight are not required for the safe operation of the aircraft.
12/14/06. Speech Peculiarities That Make My Teeth Itch
Quite simply, people who say “ummmm,” “like,” “awesome,” “y’know,” “sort of,” “if you will” and dozens of other words and phrases drive me nuts.
According to “Um, Uh, Like Call in a Speech Coach,” in the January 11 edition of The New York Times, Hillary Chura reports that business is picking up for private speech coaches. “Whether to appear more confident, better organized or to stop the ‘ums,’” Chura writes, “entrepreneurs are realizing good voice and presentation skills can help them come into their own and even compete against larger competitors with big marketing budgets.” She writes:
Coaches, who may charge $100 an hour for one-on-one guidance to more than $10,000 a day for groups, work with clients on content and delivery, tone, organization, diction, timing, how to enter a presentation confidently and refining a message around essential words. They draw attention to flaws like blitzing through presentations as well as rising inflections that make every statement sound like a question from, like, a Valley Girl. They encourage people to use short sentences, speak in sound bites and pause so listeners can digest what has been said.
1/16/07. $250 Million for Kicks: Can David Beckham Change America’s Behaviour?
After Major League Soccer team, L.A. Galaxy, hired European superstar David Beckham for a mind-blowing $250 million over five years, I listed all the reasons why I believed soccer would never catch on in the United States.
It took a reader named Gordon to come up with the big, obvious reason why the game will always be a minor blip on the radar of American sports—a reason I missed completely—television. Much of European TV is non-commercial and so is happy to have soccer fill air time. Here, virtually all TV is advertiser driven. Gordon wrote:
I once heard a reason that made sense to me why broadcasters are less than enthusiastic to schedule soccer games. Because the play is continuous, there are no natural breaks for commercials. If you break away while the action is in progress and miss the one goal of the game, the audience will feel really cheated.