World's Leading Suppliers Of Luxury Products

By Patrick Hanna

We spent endless hours trying to convince many executives at Eastern Airlines that Eastern was a bad name for airlines. Especially when that airline flies to the West Coast.

Worse, "Eastern" is not even synonymous with "good service". (Western maybe, Eastern definitely not.)

The East, especially New York City, is synonymous with bras

• Language: English
• Publisher: Patrick Hanna
• Release date: Feb 1, 2024
• ISBN: 9798869209108

Book preview

World's Leading Suppliers Of Luxury Products

World's Leading Suppliers Of Luxury Products

Copyright © 2023 by Patrick Hanna

All rights reserved

TABLE OF CONTENTS

CHAPTER 1 : WITH A BAD NAME COMES BAD PERCEPTION

CHAPTER 2 : IMPORTANT INVESTMENTS

CHAPTER 3 : SECRETS OF SUCCESS:

CHAPTER 4 : WITH AN AVERAGE FAMILY

CHAPTER 5 : FUNDERS ARE ALWAYS

CHAPTER 1 : WITH A BAD NAME COMES BAD PERCEPTION

ValueJet's reputation was damaged when the company lost a jet in the Florida Everglades.

Instead of spending millions of dollars to restore its reputation, the airline merged with AirTran.

21 - Managers hate changing names. Marketers always welcome new names.

You may have missed the news, but Schlotzsky's, a chain of 513 sandwich shops, has filed for Chapter 11 bankruptcy.

What happened to Scholotzsky's? If you believe what you read in the press, the cause stems from very normal things. Fierce competition from many other fast food companies, old menus, inefficient operations and insufficient advertising.

When things are bad, why don't managers blame one of the most obvious causes? Brand name.

Schlotzsky's? Who can spell that name? Who can pronounce that name? Who can google that name? Furthermore, the first syllable in that name sounds almost like schlock, Old German slang for cheap and low quality.

The most important marketing decision you can make

Many years ago, in a book called Positioning, we wrote: In the era of brand positioning, the most important marketing decision you can make is the name of your product.

Today, 27 years later, many left-brain managers are still not convinced. That is the reason why there are currently so many brand names that have become irreparable in the market.

It's not that these brands can't sell products. Lots of brands do that. If you price a product cheap enough, it will continue to sell well despite its bad name. Hyundai currently sells nearly half a million cars in the US each year.

But have you ever heard someone say, Look, I just bought a Hyundai?

Worse, Hyundai's new Genesis model is designed to compete with Mercedes-Benz, BMW and Lexus.

A Hyundai executive said: We debated a lot about whether to launch a new brand or not. But we decided to enhance the image of the Hyundai brand and increase profits for Hyundai car stores.

Instead of enhancing Hyundai's image, the Genesis model only made consumers more confused. What? $40,000 for a Hyundai?

Consumers find it very difficult to create a positive perception for a negative name. (The name reminds us of the World War I cry: Prussians! Die!)

The manager's argument for not changing the name is always the same: It's not the name that's important, it's the products, services and prices that matter.

That's not right. Must be product awareness, service awareness and price awareness.

With a bad name comes bad perception.

Eastern Airlines problem

We spent endless hours trying to convince many executives at Eastern Airlines that Eastern was a bad name for airlines. Especially when that airline flies to the West Coast.

Worse, Eastern is not even synonymous with good service. (Western maybe, Eastern definitely not.)

The East, especially New York City, is synonymous with brash, rude, curt, and insolent behavior. (It's a rough place and moves so fast that there's no time for life's niceties.)

Former astronaut Frank Borman(129), Eastern's president at the time, disagreed. What we overlooked, Mr. Borman wrote to us, was the fact that the name has a history of about 47 years.

(Eastern Airlines continued to live until it was 60 years old before filing for bankruptcy protection.)

Even stranger is the legend of the Atlanta investment group trying to raise another $550 million to relaunch the airline under the name New Eastern. Fortunately, the investor community did not believe in that crazy action.

A bad name is a bad name. You cannot change perception by changing your name to The New Bad.

Managers often ignore the ingenuity of marketers.

Do we really want Eastern Airlines to change its name? No, people will think it's just the old Eastern Airlines with a new name.

Our advice? Let's merge with Western Airlines to create a legitimate reason to change the airline's name. Furthermore, the merger between the two companies considered a national airline and eliminated Eastern's old reputation of being across the East Coast.

You cannot change your name

As marketing consultants, we often receive companies looking for new strategies with the request: You cannot change your name.

That's why we were not selected to carry out that project.

Canadian Airlines once approached us with a similar request. However, how can customers distinguish this airline from Air Canada, the airline that dominates the Canadian market, without changing the name? That's impossible.

So is Cathay Pacific. The name is very important. Whether right or wrong, consumers believe that the name a company uses has real meaning. It shouldn't be a name that suddenly appears without careful consideration.

We know where Pacific is. But where on earth is Cathay? We told the managers that they couldn't use the name Cathay with an airline unless people knew where the place was. Another job we didn't get.

Pulte Homes, the third largest home builder in the US, also approached us. We know that luxury apartment buyers will be proud of their apartments. But how can homebuyers take similar pride in a Pulte home built by Pulte?

I just bought a house from Pulte. We couldn't imagine many homebuyers bragging about their Pulte homes, so we said the company needed a new name.

The answer was: Mr. Pulte would never accept. That's another job we didn't get.

Ralph Lifshitz(130)Where would I be now if I didn't have the same attitude towards the name? Luckily, Mr. Lifshitz was smart enough to change his name to Ralph Lauren.

Consumers choose the name at their discretion. I Can't Believe It's Not Butter is one of the best-selling margarine brands in the US. Consumers think: Surely the product must taste like butter, otherwise people wouldn't use that name.

Consider Chi-Chi's, the casual dining chain that went bankrupt a few years ago. What is Chi-Chi and who can associate that name with the restaurant's Mexican food? (With the Mexican food trend going strong, only a very bad name could send a Mexican restaurant chain out of business.)

How did a name like Chi-Chi's (Mexican slang for woman's breasts) get chosen in the first place? Usually, it's a question of entertainment and games in the boardroom. Show up with a cute name, sing and dance a few songs, make the crowd laugh and you'll make the sale.

However, the manager will have to shorten the name

It's surprising how often managers wholeheartedly support a name change proposal. That's when they want to shorten the name or, even better, use the first letter instead of the whole phrase.

Managers fall in love with initials and acronyms. Managers use a lot of initials and acronyms in emails and memos. Managers memorize the stock codes of their favorite companies. (TV viewers clearly understand that you can't check stock prices on CNBC without knowing the initials that serve as the stock code.)

Furthermore, if you want to sell everything under the same brand as many managers do, the name itself cannot be too specific. The first letter satisfies this criterion perfectly.

In our 1981 book Positioning, we cursed the so-called nameless trap. That year, there were 27 unnamed companies on Fortune's list of America's 500 largest companies.

Today there are 46 companies. And the future will certainly bring more.

What makes a company abandon the perfect name for meaningless initials? There are two reasons.

One reason is the shorter is better argument. In today's high-speed world, long names are disadvantageous. So the advertising agency J.Walter Thompson changed its name to JWT.

J.Walter Thompson is now in the history books along with Doyle Bane Bernbach (renamed DDB) and Foote, Cone & Belding (renamed FCB).

The second reason is market change. The name J.Walter Thompson is associated with traditional advertising and the company naturally wants to expand to include modern media such as the Internet. Maybe the company wants a new name that keeps the company from being locked into the past.

However the opposite happened. By adopting the acronym JWT, the company forever connected its name to the J.Walter Thompson legacy.

It is virtually impossible to create a perception of the initial letter phrase that is distinct from the perception of the initial word. The first letter often reminds people of the past.

Kentucky Fried Chicken wants to distance itself from the unhealthy connotations of the word Fried. So the company changed its name to KFC.

What happens next? Whenever they see KFC's sign, consumers often think Kentucky Fried Chicken.

(KFC is currently considering its initialization program. A few exclusive stores have suggested changing the store brand name to Kentucky Fried & Grilled Chicken.)

What do these abbreviations mean?

Consumers are not stupid. When consumers see abbreviations, they try to figure out what the letters mean.

•      GE is reminiscent of General Electric.

•      HP is reminiscent of Hewlette-Packard.

•      IBM is reminiscent of International Business Machines.

•      MTV is reminiscent of Music Television.

•      The IRS is reminiscent of the Internal Revenue Service.

•      FBI is reminiscent of the Federal Bureau of Investigation.

•      USA is reminiscent of the United States of America.

Let's hope that the new US administration will not fall into the trap of having no name along with the words: We do not want to be considered a country consisting of many separate states. We want to be seen as a single entity, a single country. Let's hire JWT, a subsidiary of WPP, to change our name to USA.

What if the first letters of the company name are not abbreviations? At that time, consumers will be confused and unable to remember those first letters.

If you want your name to