Companies that beat the odds during a recession and actually grow usually have some sort of economic advantage working in their favor. Perhaps they operate in an industry that's essentially "recession-proof," where demand isn't affected as much by the macro-economy. Demand in the pharmaceutical and energy industries, for example, traditionally remains fairly constant regardless of a slowdown in consumer and business-to-business spending. Or maybe they are insulated more so than usual against a downturn because of a recent trend or event. In the wake of September 11, for instance, security and insurance companies have seen revenue growth as individuals and companies have responded to renewed concerns about protecting human and capital assets.

Most, however, aren't so lucky and companies operating in less-advantaged industries watch revenues decline right along with the economy. Typically we see the usual response of consolidation, downsizing, cost- and price-cutting from the not-so-fortunate as they try to adapt to an inhospitable market climate, but there are some notable exceptions. In fact, we have found proof of life at companies in industries pervious to macro-economic conditions.

Proof of Life #1: Harley-Davidson
Even in the midst of a global recession, Harley-Davidson announced yet another successful year. What's made this company resistant to the effects of market downturns? Neither flashy promotions nor superfluous advertising campaigns, but rather a strict dedication to targeting and positioning which it continuously adapts to changing times, new products, and line extensions.

Harley offers a range of motorcycles, from bikes designed for long-distance traveling to those intended for raw power, to satisfy the differing needs of the many segments of the motorcycle enthusiast market. In response to an aging and typically male consumer, Harley recently introduced the V-rod, a high-performance, high-horsepower bike aimed at younger and hipper riders, and its Buell line introduced the smaller Blast bike at a lower price tag to appeal to newcomers and women. Thus Harley can attract new customers without jeopardizing its place in the hearts and minds of its core loyalists.

To further grow its customer base, Harley recently launched the "Rider's Edge" program to ease intimidation for rookies who don't think they are hardcore enough for a Harley. Through its network of dealers and for a fee, Harley offers potential customers the chance to learn how to ride a motorcycle on a Harley bike and get help choosing appropriate apparel and accessories. Eighty-five percent of participants purchase something, and 25 percent buy a bike within three months.

Throughout its hundred-year history, Harley has remained fiercely dedicated to its positioning as the motorcycle for tough, rugged riders who demand superior quality. The company translated its "hardcore" positioning to its offspring products, including apparel and maintenance supplies. Products like the Harley-Davidson cleaning mitt and specialty detergents are sold with the notion that if you are truly a motorcycle enthusiast, then you must buy these superior products. Profits for Harley's parts and accessories branch rose 12.6 percent from last year and profits for apparel rose 7 percent.

Proof of Life #2: Kohl's
Though some might say the recession has helped boost sales at discount stores like Kohl's, keep in mind, when the economy started to head south, many established discounters folded—among them Bradlees and Ames—while others continued their struggle against industry giant WalMart—Kmart is a case in point.

But not Kohl's. Operating about 380 stores mostly in the Midwest and Mid-Atlantic, Kohl's has successfully grown sales at existing stores and expanded into new markets, including the Northeast. Sales were up 21 percent at the beginning of November and 61 new stores opened in 2001.

Like Harley, Kohl's relentlessly focuses on understanding what will keep its customer coming back and buying more. Instead of beating suppliers up (à la WalMart), Kohl's uses a centralized buying system and cultivates strong relationships with suppliers by, among other things, paying bills on time. As a result, suppliers give Kohl's better deals on leading brand names like NIKE and Levis. Thus, Kohl's offers leading brands—which its discount competitors do not—at lower prices than department stores. With locations strategically selected far away from shopping malls, the company enjoys proximity to target customers and further avoids price comparisons with department store competitors.

Unlike its competitors, Kohl's long ago began developing loyalty programs. Kohl's rewards its charge customers, for example, with eight special savings events per year. The retailer gives its most valuable customers—those who spend at least $600 on Kohl's charge every year—additional bonuses, including four personal sale days a year and a special savings every six months. In this way, Kohl's has given customers an incentive to keep coming back for more.

No Quick-Fix Marketing Here
Harley and Kohl's are making it with marketing, but not the kind of "quick-fix" marketing—primarily price-cutting and heavy discounting—popular among businesses operating in a less hospitable environment. They invested time and money over the course of several years to develop the marketing strategy and loyal customer base insulating them from this recession. Their ability to sustain performance should serve as a wake up call to players in non-recession proof industries to start thinking about the fundamentals of marketing—like targeting and positioning—today in order to make it tomorrow.

The situation facing Charlotte Beers, the Bush administration's point person on using the marketing communications techniques traditionally used in the private and public sectors for diplomatic purposes, and the U.S. government in launching an international branding campaign is not unlike that faced by a company like WalMart or McDonald's. Support for the war against terrorism, opinions of America, individual priorities, and cultural values vary wildly around the world, and even more so within the Middle East. In a recent Advertising Age article on the subject, Frederic Kropp, a marketing professor at the Monterey Institute of International Studies, explained we have multiple audiences in the global marketplace with different needs and interests: "There are the allies like the Saudis, who need to be reassured, the undecided in many of the other countries and the hard-core 'enemy.' Each needs a different mix of messages."

Communication of the U.S.'s objectives is certainly critical to getting and keeping "customers"—or more accurately, supporters and advocates—of the war against terrorism, so taking a marketing approach is certainly appropriate to the situation. Regardless of the disdain some may have for marketing and its tactics, whether you want people to buy a new car or a new point-of-view, you have to tell them why they should buy it.

But as Ms. Beers considers her audiences, messages, and mediums, we offer one caution against making the same mistake that has undone many a packaged goods manufacturer, retailer, business supplier, and dot-com at home and abroad.

Advertising on its own—whether via TV, radio, print, direct (e.g., air-dropped pamphlets), or web—will only go so far. The role of advertising in general is to create awareness and build interest, but it typically takes much more on the part of marketers to convert awareness into trial and adoption. So if the U.S. does not deliver on the advertised message…if we don't demonstrate a genuine interest in the issues facing people of Afghanistan and elsewhere in the Middle East through actions, not just words…any advertising campaign will fall short of its objectives. We will have done nothing more than promoted an empty message. And this will hurt the war against terrorism.

Relatively speaking, companies have a far easier time rallying employees and functional units to deliver on a brand promise than Beers will have bringing together the U.S. government and all of its branches and constituencies to deliver one. Of course, this adds yet another layer of complexity to marketing Brand USA—Ms. Beers needs to keep in mind not just the images and messages contained in the advertising executions, but what it will take to deliver on them to successfully change minds and behavior in order to aid the battle against terrorism.

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From humble beginnings way, way off Broadway in 1988, Blue Man Group—a combination musical/play/performance art exhibition starring three non-speaking, literally blue men—has become a virtual cult brand with thirty-three cast members, permanent gigs in New York, Boston, and, most recently, Las Vegas, a recurring role on The Tonight Show, and even a Grammy Award. New York and Las Vegas both featured clips of the group's performance in their tourism campaigns, and even Corporate America has taken notice, tapping into Brand Blue Man Group—Intel's latest advertising campaign included spots with three blue men and many including American Express and M&Ms have tried to recruit them. All this in a country that typically has not embraced nontraditional art!

The original creators of Blue Man Group carefully and deliberately manage their brand, maintaining their vision of a unique visual and aural spectacular, enjoyable to the average American. As the show's popularity and box office receipts started to grow, the creators integrated the performance and business aspects of the show, uniting all functions behind the Blue Man brand vision. Creator Matt Goldman explained: "We saw running the business as an artistic endeavor. We felt it was as important to have things go right in the office or backstage as on-stage."

Goldman and his cohorts toiled for nearly a year developing a company manual, complete with a "corporate" mission statement, focused on preserving their artistic integrity—a central theme of the Blue Man show—above all else. All new employees spend months of intensive training learning both the performance and the philosophy of the brand. The group weaves their vision into co-branding endeavors as well. The Blue Men produced the Intel advertisements as a series of short films, for example.

Blue Man Group continues to pack theaters and offers a compelling case for making the brand not just the responsibility of marketing, but the mission of the entire organization.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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We've been big fans of Jack Trout for a long time now and his new book doesn't disappoint. Big Brands Big Trouble charts the rise and fall of some of the biggest and best-known brands in a clear, matter-of-fact way—sometimes making it hard to see how the companies he's writing about didn't see their downfalls coming. Though the failures of Xerox and GM certainly aren't new news, the case studies and Trout's discussion illustrate the importance of carefully and consistently evolving marketing strategies and programs—not just products and services—to keep ahead of the competition.

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After many, many years of talking and planning, last year we realized a lifelong dream of building a museum where marketers of all ages could see—in all their glory—the marketing blockbusters and disasters of the recent past and present. Just as baseball fans make a pilgrimage to Cooperstown and basketball fans sojourn to Springfield, marketing fans can surf to our virtual place of honor to celebrate the practice at its very best and embarrassing worst:the Counterintuitive Marketing Hall of Fame and Shame, www.counterintuitivemarketing.com/hall.html.

We're ready for our next round of inductees into the Hall, and are currently accepting your nominations of marketing greatness and grossness.

Counterintuitive Marketing Hall of Famers have achieved great success adhering to marketing fundamentals such as clearly defining a profitable target and a compelling positioning, developing great advertising which clearly communicates benefits, and maintaining superior customer service.

Meanwhile, Hall of Shamers have encountered product flops and declining performance. They have no clear positioning or target customer group and their advertising is completely forgettable or confusing; sometimes down right silly. Their brands simply blend into the crowd, while they give away a first-mover advantage and brand equity.

To make a nomination, go to: www.counterintuitivemarketing.com/hallnom.html

Members of the Copernicus Board of Advisors, some of the world's leading marketing academics and consultants, will vote on the final selections from nominees submitted by businessmen and women from around the world. We'll announce the 2002 inductees in the April edition of The Copernicus Mzine, so stay tuned.

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