What is it?

You might be aware of the Mr. Clean AutoDry Carwash System.  Well, Mr. Clean Car Wash I am talking about here is not a product.  It is an actual car wash service that P&G opened up in Ohio.  Two locations have been opened so far, one in Mason and the other in Cincinnati.  Besides this innovative brand extension, it has also been reported that P&G is opening up Tide-Y dry cleaners in the Kansas City area.

Why is it a good idea?

(1) Household products are a highly-saturated market.  Branching out from the product market to services opens up a whole new set of opportunities and revenue potentials. As an added bonus, the services area is also highly fragmented competition-wise, unlike the product market.

(2) A physical shop gives P&G an opportunity to put a face to its products. Managed well, this can lead to more intimate and meaningful customer relationships.

(3) The shops can serve the function of advertising and publicity for the physical product/brand.

(4) Having first-experience with people’s carwashing and dry-cleaning behavior can give P&G valuable market research information.

Small Print

Sometimes an idea is so pioneering and unusual that it naturally comes with some risks. For P&G, the biggest risk is in its ability to execute these service shops well.  Being a consumer packaged goods company, it is not exactly an expert on services marketing and service logistics.  If not done right, bad customer experience from the physical shops can have a damaging effect on the core brand.  I suspect this is partially the reason why P&G has been very cautious in this area, so far keeping a very low key, only experimenting with the idea in selected local areas and possibly rolling out nationally if the experiments prove successful.

Starting with this entry, I am adding a new feature called “Best Practices” to my blog. Entries in this category will discuss in a succinct way some of the best business and marketing strategies in the current market. These discussions are meant to help both practitioners learn from others and to offer business educators current examples to use in the classroom. Today, I would like to talk about the Cisco Learning Network.

What is it?

This is a social learning network by Cisco. It allows IT professionals to share professional knowledge, network with others, and learn new professional skills. Read the CCNA blog to get more background information about the network.

Why is it a good idea?

The Cisco Learning Network is a good idea because it creates values for both its customers and Cisco itself in a clever way.

Benefits for customers (i.e., IT professionals):

(1) More targeted social/professional networking than generic sites such as LinkedIn;

(2) An opportunity for self-promotion to peers and to the source (i.e., Cisco);

(3) An opportunity to learn from the source.

Benefits for Cisco:

(1) In a helpful kind of way, Cisco Learning Network builds brand awareness and loyalty among IT professionals, who are Cisco’s target market;

(2) The Network creates an IT talent pool and helps identify influential IT professionals. Cisco can then draw from this talent pool at time of need, which is essential in the relatively tight IT market.

I just attended a talk by Debbie Millman on branding. One idea that I found very interesting from the talk was discussion on the current wave of tribal branding since 2000. Ms. Millman made the point that in this wave of branding, a brand that builds/facilitates connectivity is likely to be successful. She enlisted statistics that show 1 in 3 households in America now consists of a single person, in contrast with only 1 in 10 households as a one-person household in 1950. As traditional communion places like the household downsizes to be a single’s cave, our need for connectivity as human beings has to be channeled through other places and other objects such as brands.

This association between brand and connectivity is very interesting and is consistent with the evolution of contemporary marketing. So I’d like to elaborate on this idea a little further. The marketing discipline is witnessing two interconnected trends: an increasing emphasis on building customer relationships (i.e., relationship marketing) and a perception change of consumers as objects/targets of marketing efforts to consumers as collaborators (see Vargo and Lusch 2004). Both of these are manifestations of connectivity and how marketing may play a role in building connectivity.

So to use some concrete examples to illustrate the concept, a brand can build or contribute to connectivity in two ways: physical or infrastructural connectivity; and psychological connectivity. Brands in the former category build infrastructure for people to connect with each other, such as T-Mobile, MySpace, and Facebook. These brands derive their value not necessarily from consumers’ emotional connection with the brands per se but rather from the value of relationships that are built on these infrastructures. For example, the popularity of a social networking website such as Facebook is dependent on the people that we as users can connect to through the website and how satisfying that connection experience is. Consumer collaboration dominates in this setting as a demonstration of connectivity.

Brands in the second category aim more toward establishing actual psychological connections between consumers and the brand and between consumers and consumers. While the connection between people is still essential to the connected nature of such brands, each individual’s connection with the brand is an essential ingredient to this type of connectivity. For example, Harley Davidson or Apple owners identify among themselves because of a mutual connection with the brand. In this type of situation, rather than functioning as an underlying platform for connectivity to occur, the brand becomes an indispensable bridge in the connection process. Relationship marketing and CRM become key strategies for enhancing connectivity in such cases.

It is possible for brands to crossover between categories. An example of crossover from psychological connectivity to infrastructural connectivity is the online communities that many CPG companies have established, such as Kraft community. Consumer interaction in those communities may no longer be brand-centric and may broaden beyond the brand to other realms of life. An example of crossover in the other direction is Second Life, where devotees who have been able to build meaningful relationships in the virtual world come to love SL as their virtual country, no less than the feeling of patriotism that we feel as citizens of a country. By crossing over or occupying both realms of connectivity, these brand names build a stronger hybrid form of connectivity that is valuable to today’s single-dominant world.