17.3.09
Direct Marketing as a Branding Tool
Every now and then I see an article in DMNews that challenges conventional marketing values. Such an article was co-authored in the February 23rd 2009 issue by Daniel Morel, CEO of Wunderman and John Gerzema, Chief Insights Officer, Young & Rubicam.
What drew me into the article was its title: "Branding and response are the same."
Well now, for many marketers -- in particular brand marketers -- those are fighting words.
The article compares the economic meltdown with another crisis.
"We discovered the value that brands bring to a company's total business value are exaggerated. The financial markets attach more value to brands' worth when compared to the consumers who buy the brands ascribe."
They go on to name it the "brand bubble" that is twice the ascribed value of the entire sub prime mortgage market.
Their impressive research data show that "85% of brands are stagnant or eroding in brand differentiation." And of Interbrands top 100 valuable brands from 2004 through 2007, 45% are declining in consumer perceptions.
The most interesting part of this article was how the authors combined the two different disciplines of branding and direct marketing into a single strategy.
As marketers, many of us bought into the AIDA model of awareness, interest, desire and then action. So branding pushed the demand and direct marketing harvested the desire branding developed into a purchase action.
The authors contend that this linear model no longer works.
In other words, AIDA now occurs during the direct marketing messaging because consumers now act immediately to brand/direct response messages. "Direct response no longer exists at the end of the tunnel."
Direct marketing actually creates the messaging and imagery that contribute to the brand as it always has. Only now, the Internet has given direct response new influence in the marketing community. The Internet and it's live interactivity gave direct response its ultimate medium.
Now most marketing activities are driven by CRM (Customer Relationship Marketing) and response.
In a very real sense, strong direct marketing programs have created the advertiser's reputation and product sell simultaneously from the beginning. But few in those early days were willing to ascribe that kind of mission to direct marketers.
Besides, branding is much bigger than brand advertising or direct marketing.
It is the culmination of the advertisers complete interaction with customers including customer service, phone answering systems, product quality, product warranties, market reputation and finally consistent positioning messages.
Direct marketing reveals much more about a company's true operating procedures and customer friendliness than a brand campaign.
Direct marketing includes offers, warranty information, shipping costs, refund policies, attitudes in the inbound and outbound telemarketing calls, email communications and so forth. All of these actions build or weaken brands. So direct marketing strategies go far beyond pure messaging.
Direct marketing interweaves with the advertiser's delivery of the brand on the ground where all of the action is.
In this new Internet world, companies like Zappos "created an Internet juggernaut with a call center and great product diversity that was at the heart of the brand." Several other examples are enumerated in the article.
The bottom line: direct marketing not only represents a potent branding tool, but it moves product all in a single integrated marketing strategy.
How important do you see direct marketing as a player in the brand arena? Does this article go too far?
What drew me into the article was its title: "Branding and response are the same."
Well now, for many marketers -- in particular brand marketers -- those are fighting words.
The article compares the economic meltdown with another crisis.
"We discovered the value that brands bring to a company's total business value are exaggerated. The financial markets attach more value to brands' worth when compared to the consumers who buy the brands ascribe."
They go on to name it the "brand bubble" that is twice the ascribed value of the entire sub prime mortgage market.
Their impressive research data show that "85% of brands are stagnant or eroding in brand differentiation." And of Interbrands top 100 valuable brands from 2004 through 2007, 45% are declining in consumer perceptions.
The most interesting part of this article was how the authors combined the two different disciplines of branding and direct marketing into a single strategy.
As marketers, many of us bought into the AIDA model of awareness, interest, desire and then action. So branding pushed the demand and direct marketing harvested the desire branding developed into a purchase action.
The authors contend that this linear model no longer works.
In other words, AIDA now occurs during the direct marketing messaging because consumers now act immediately to brand/direct response messages. "Direct response no longer exists at the end of the tunnel."
Direct marketing actually creates the messaging and imagery that contribute to the brand as it always has. Only now, the Internet has given direct response new influence in the marketing community. The Internet and it's live interactivity gave direct response its ultimate medium.
Now most marketing activities are driven by CRM (Customer Relationship Marketing) and response.
In a very real sense, strong direct marketing programs have created the advertiser's reputation and product sell simultaneously from the beginning. But few in those early days were willing to ascribe that kind of mission to direct marketers.
Besides, branding is much bigger than brand advertising or direct marketing.
It is the culmination of the advertisers complete interaction with customers including customer service, phone answering systems, product quality, product warranties, market reputation and finally consistent positioning messages.
Direct marketing reveals much more about a company's true operating procedures and customer friendliness than a brand campaign.
Direct marketing includes offers, warranty information, shipping costs, refund policies, attitudes in the inbound and outbound telemarketing calls, email communications and so forth. All of these actions build or weaken brands. So direct marketing strategies go far beyond pure messaging.
Direct marketing interweaves with the advertiser's delivery of the brand on the ground where all of the action is.
In this new Internet world, companies like Zappos "created an Internet juggernaut with a call center and great product diversity that was at the heart of the brand." Several other examples are enumerated in the article.
The bottom line: direct marketing not only represents a potent branding tool, but it moves product all in a single integrated marketing strategy.
How important do you see direct marketing as a player in the brand arena? Does this article go too far?
Fitness First’s Weighty Advertising Campaign
and simple advertising campaign by Dutch agency N=5 for Fitness First. (Though you have to wonder - how much reality is too much reality?)
Origami In the Pursuit of Perfection
http://vimeo.com/2188162
To tell the story of Japanese sports brand ASICS, Nordpol + Hamburg created this beautiful stop-motion movie showcasing the origami models of Mabona Origami.
To tell the story of Japanese sports brand ASICS, Nordpol + Hamburg created this beautiful stop-motion movie showcasing the origami models of Mabona Origami.
British Car, American Camper, and Scandinavian Furniture Meet in Italy
Mini in partnership with Airsteam Inc. have created a one-off Mini Cooper S Clubman coupled with a trailer designed by Copenhagen based furniture brand Republic of Fritz Hansen. It will be displayed at the next Salone del Mobile show in Milan.
Airstream Inc. and MINI have teamed with a one-off MINI Cooper S Clubman and Airstream creation designed by Republic of Fritz Hansen.
Airstream Inc. and MINI have teamed with a one-off MINI Cooper S Clubman and Airstream creation designed by Republic of Fritz Hansen.
The concept will be presented for the first time at the INTERNI DESIGN ENERGIES exhibition in the courtyards of Università degli Studi di Milano during the upcoming world-renowned Salone del Mobile show in Milan.
The exhibition will be open each day from Tuesday 21 to Thursday 30 April from 10:00 a.m. until midnight.
The exhibition will be open each day from Tuesday 21 to Thursday 30 April from 10:00 a.m. until midnight.
Republic of Fritz Hansen, the Copenhagen based premium furniture brand known for its minimalist and functional design, has spared no details when it came to designing the interior of the MINI Cooper S Clubman and Airstream trailer.
Drawing inspiration from the outdoor lifestyle of surfing, the Airstream interior will feature, amongst others, new interpretations of Arne Jacobsen’s Egg and Swan Chair and a table set up with four unique Series Seven chairs, allowing plenty of room for guests.
Sleek wood panelling will top it off giving it the ultimate “modern surfer” look.
“Here at Republic of Fritz Hansen we are thrilled with the collaboration and really look forward to introducing this unique and eye catching concept,” says Jacob Holm, President and CEO at Republic of Fritz Hansen.
Drawing inspiration from the outdoor lifestyle of surfing, the Airstream interior will feature, amongst others, new interpretations of Arne Jacobsen’s Egg and Swan Chair and a table set up with four unique Series Seven chairs, allowing plenty of room for guests.
Sleek wood panelling will top it off giving it the ultimate “modern surfer” look.
“Here at Republic of Fritz Hansen we are thrilled with the collaboration and really look forward to introducing this unique and eye catching concept,” says Jacob Holm, President and CEO at Republic of Fritz Hansen.
The MINI Cooper S Clubman will also reflect the same adventurous personality and style with clean lines, bold colours such as lightning green and all the interior gadgets you can expect to find in a MINI plus more.
The MINI Cooper SClubman will be predominately jet black with black “wetsuit” neoprene accents along with green trim. The 22ft silver Airstream trailer will also enjoy the same exterior details as the MINI but will have an interior designed for beach goers with features such as a waterproof interior and a sun bathing bed.
“Partnering with MINI was a given,” said Bob Wheeler, CEO of Airstream, Inc. “As one of the oldest manufacturers of recreational vehicles in the U.S. and MINI’s longstanding history producing unmistakable sport cars, we knew that we would make a dynamite team,” said Wheeler.
“It has always been important for us to implement new products and ideas in unconventional ways. The concept MINI and Airstream, designed by Republic of Fritz Hansen, presents a surprisingly different way of using a MINI and an Airstream with a design, which consciously transcends into the world of the surfer. At the same time, we have achieved a successful co-operation with two international cult brands which authentically embodies the MINI attitude to life” said, Andreas-Christoph Hofmann, Head of MINI Brand Communication.
The MINI Cooper SClubman will be predominately jet black with black “wetsuit” neoprene accents along with green trim. The 22ft silver Airstream trailer will also enjoy the same exterior details as the MINI but will have an interior designed for beach goers with features such as a waterproof interior and a sun bathing bed.
“Partnering with MINI was a given,” said Bob Wheeler, CEO of Airstream, Inc. “As one of the oldest manufacturers of recreational vehicles in the U.S. and MINI’s longstanding history producing unmistakable sport cars, we knew that we would make a dynamite team,” said Wheeler.
“It has always been important for us to implement new products and ideas in unconventional ways. The concept MINI and Airstream, designed by Republic of Fritz Hansen, presents a surprisingly different way of using a MINI and an Airstream with a design, which consciously transcends into the world of the surfer. At the same time, we have achieved a successful co-operation with two international cult brands which authentically embodies the MINI attitude to life” said, Andreas-Christoph Hofmann, Head of MINI Brand Communication.
16.3.09
Be proud of your wiener
BRAND :Pogo
BRAND OWNER :ConAgra Foods
CATEGORY :Food
REGION :Canada
DATE :Mar 2008 - Jul 2008
BRAND OWNER :ConAgra Foods
CATEGORY :Food
REGION :Canada
DATE :Mar 2008 - Jul 2008
Pogo is a Canadian brand of corn dog – that is to say a frankfurter sausage on a stick, covered in batter. Pogos weren’t considered particularly cool by teenagers, so the challenge was to make a latent brand likeable among teen boys, and remind them to look in the freezer or ask their parents to buy some.
Pogo decided to incite the competitive nature of boys with a unique campaign idea: “Be proud of your wiener”. The somewhat puerile double-entendre clearly resonated with the target audience. Teens were challenged to hold their Pogo high for as long as they could and whoever held it up for the longest was crowned “The Proudest of their Wiener” in an event they named the Mega-Pogothon.
The campaign launched unbranded to create intrigue and excitement, with guerilla activity seeing the Pogo icon seeded in unusual places including on stickers on street signs, on t-shirts and in chalk art in high teen traffic areas. Pogo “sticker” poster pads were wild-posted in popular teen hangouts. The target engaged with the brand by peeling off the stickers and sticking them on everything around them Pogo also infiltrated the airwaves on popular teen programming, flashing the icon throughout after-school shows and planting teens in the audience holding his Pogo high.
The activity culminated with the Mega-Pogothon, held in an amusement park and aired on TV.
Some 63% of teens were aware of the campaign and sales increased by 10%, a market share increase of 29%.
Saffola oil spill
March 16, 2009 issue
Saffola, a leading brand of commodity products in India, knows that it must pay attention to online customer engagement to ensure that visitors stick around for more than just a few minutes—as they do at a supermarket shelf.
The Saffola brand, owned by Marico Industries, retails a portfolio of products like salt and flour, but the brand name is popularly associated with its core product—cooking oil. In the cooking oil segment, the brand has garnered tremendous trust and is practically a generic name among homemakers.
The brand has been very successful in promoting health as a central theme throughout its messaging—especially on its website, where a diverse selection of products is featured.
On the brand’s homepage, the site’s color scheme is reminiscent of the brand’s bright yellow packaging that stands out in grocery stores. The center of the homepage is dedicated to promoting the brand’s latest offering in the market—a salty baked snack called Saffola Zest.
The imagery of a happy Indian family grabbing a bowl of snacks conveys that the product is a healthy snack meant for everyone. Given the health controversies revolving around the oil and salt content of potato crisps, the launch of this “healthy” option—with its call to “Say No To Fried Snacks. Say Yes To Baked Goodness.”—is well timed, and should garner sales among health-conscious consumers.
Details on the product are displayed in a simple manner—flavor, price and some bullet points on its healthy aspects. There are no overwrought or glitzy descriptions—perhaps to compel visitors to stay curious and take the extra effort to learn about the product.
The rest of the homepage follows a clean layout and is focused on other relevant details about Saffola’s brand—its products and recipes and its commitment to health and wellness. Clicking on the Products section leads to a page that explains how Saffola flour is beneficial for diabetics. Sadly, other products are somewhat hidden—for no apparent reason—on the left menu bar of the page.
In terms of layout, the brand could definitely take a few pointers from Wesson—a brand of vegetable oil produced by ConAgra foods. Rather than scattered content, the Wesson site has a well-structured products page where color and layout blend beautifully together to create a page that is visually appealing.
Sticking to its objective, the site has all the necessary tools to effectively characterize Saffola as a “health-conscious” brand. The Eating Right section educates the reader about nutrition myths, beverages, health benefits from particular plants and other pertinent health topics. Also, accompanying images break any content monotony and make the page more reader friendly.
The Healthy Heart link on the homepage transports the web user to a section that outlines the initiatives the brand has taken in the community. The company has organized several outreach programs, and details on such events are available online. Corporate social responsibility is an important facet of any brand today, and Saffola does an admirable job describing these initiatives on its site. A more prominent header, however, would ensure that visitors don’t miss this section while browsing.
Given that Saffola is in the food business, the Recipes section is important. Saffola keeps its target audience (housewives) happy with an extensive roster of recipes but could exhibit more business savvy by weaving Saffola products into the recipes—similar to what Bertolli has done. Another value addition to the site could be a section on “quotes from the experts,” where leading Indian doctors can give their opinion on the benefits of Saffola products.
From health tips to the Dial-a-Dietician feature, the site successfully conveys the message that Saffola is a health-conscious brand that cares about its consumers. Yet the website could expand its online presence by providing information detailing its parent company's plans to leverage Saffola’s brand equity.
The Saffola website is a wise place to execute this endeavor.
Preeti Khicha currently lives in Mumbai, India. She graduated from the University of Bath, UK, with a master's degree in management, specializing in marketing. She holds an undergraduate degree in economics and psychology from the University of Virginia, USA.
The Saffola brand, owned by Marico Industries, retails a portfolio of products like salt and flour, but the brand name is popularly associated with its core product—cooking oil. In the cooking oil segment, the brand has garnered tremendous trust and is practically a generic name among homemakers.
The brand has been very successful in promoting health as a central theme throughout its messaging—especially on its website, where a diverse selection of products is featured.
On the brand’s homepage, the site’s color scheme is reminiscent of the brand’s bright yellow packaging that stands out in grocery stores. The center of the homepage is dedicated to promoting the brand’s latest offering in the market—a salty baked snack called Saffola Zest.
The imagery of a happy Indian family grabbing a bowl of snacks conveys that the product is a healthy snack meant for everyone. Given the health controversies revolving around the oil and salt content of potato crisps, the launch of this “healthy” option—with its call to “Say No To Fried Snacks. Say Yes To Baked Goodness.”—is well timed, and should garner sales among health-conscious consumers.
Details on the product are displayed in a simple manner—flavor, price and some bullet points on its healthy aspects. There are no overwrought or glitzy descriptions—perhaps to compel visitors to stay curious and take the extra effort to learn about the product.
The rest of the homepage follows a clean layout and is focused on other relevant details about Saffola’s brand—its products and recipes and its commitment to health and wellness. Clicking on the Products section leads to a page that explains how Saffola flour is beneficial for diabetics. Sadly, other products are somewhat hidden—for no apparent reason—on the left menu bar of the page.
In terms of layout, the brand could definitely take a few pointers from Wesson—a brand of vegetable oil produced by ConAgra foods. Rather than scattered content, the Wesson site has a well-structured products page where color and layout blend beautifully together to create a page that is visually appealing.
Sticking to its objective, the site has all the necessary tools to effectively characterize Saffola as a “health-conscious” brand. The Eating Right section educates the reader about nutrition myths, beverages, health benefits from particular plants and other pertinent health topics. Also, accompanying images break any content monotony and make the page more reader friendly.
The Healthy Heart link on the homepage transports the web user to a section that outlines the initiatives the brand has taken in the community. The company has organized several outreach programs, and details on such events are available online. Corporate social responsibility is an important facet of any brand today, and Saffola does an admirable job describing these initiatives on its site. A more prominent header, however, would ensure that visitors don’t miss this section while browsing.
Given that Saffola is in the food business, the Recipes section is important. Saffola keeps its target audience (housewives) happy with an extensive roster of recipes but could exhibit more business savvy by weaving Saffola products into the recipes—similar to what Bertolli has done. Another value addition to the site could be a section on “quotes from the experts,” where leading Indian doctors can give their opinion on the benefits of Saffola products.
From health tips to the Dial-a-Dietician feature, the site successfully conveys the message that Saffola is a health-conscious brand that cares about its consumers. Yet the website could expand its online presence by providing information detailing its parent company's plans to leverage Saffola’s brand equity.
The Saffola website is a wise place to execute this endeavor.
Preeti Khicha currently lives in Mumbai, India. She graduated from the University of Bath, UK, with a master's degree in management, specializing in marketing. She holds an undergraduate degree in economics and psychology from the University of Virginia, USA.
Lufthansa Italia winging it?
March 16, 2009 issue
There is an air war brewing that is changing the way European airlines operate. Driven by a sputtering economy, airlines in Europe are gradually departing from the one government/one airline model. They are increasingly looking to cross-country mergers, sometimes involving private investors, as a means of survival.
Alitalia is a case in point. The Italian government-owned airline filed for bankruptcy last August, and a group of private Italian investors stepped in. Then, in January 2009, Air France-KLM (itself a merged airline) bought a stake in Alitalia. That action precipitated the creation of another airline’s new brand: German carrier Lufthansa quickly launched a separate operation, christening it Lufthansa Italia.
Lufthansa had an interest in buying a stake in Alitalia but lost out to Air France-KLM. Rather than cede the lucrative Italian routes, Lufthansa took a calculated risk and created its own new brand. It’s the first time Lufthansa has established a carrier outside its home market of Germany.
Granted, Lufthansa is an established worldwide brand. Known for its German punctuality and efficiency, Lufthansa has fared better than most European airlines. Still, the question is, will Lufthansa be able to bring the same magic to Lufthansa Italia?
Lufthansa Italia may have taken off suddenly, but Lufthansa has already shown commitment to the integrity of the new brand. Lufthansa has set up the airline as a separate subsidiary based in Milan, Italy. The airline adorned two Airbus jets with the new airline’s name and designated the planes “Milano” and “Varese” after two Italian cities. Previously, Lufthansa had named its planes only after German cities. Lufthansa Italia started operations in early February 2009, flying out of Malpensa (Milan) Airport to Paris, France, and Barcelona, Spain. More aircraft were scheduled to be added in March, and routes to Brussels, Bucharest, Budapest, Lisbon, London and Madrid were scheduled to be online by the end of March.
Lufthansa says it will imbue the new Lufthansa Italia with “reliability and high quality blended with Italian flair.” The airline says it has developed “special Italian-style in-flight services” for Lufthansa Italia (although it doesn’t specify what they are). The planes are configured to seat 138 passengers in business and economy class. Lufthansa’s operations at Malpensa Airport will be upgraded to include dedicated check-in counters, more quick check-in terminals, refurbished gate and baggage reclaim areas, and a new and improved Lufthansa lounge.
Also in February, Lufthansa Cargo announced the launch of freighter services between Milan and New York and Chicago, taking advantage of Alitalia’s failed cargo operations. Lufthansa said it will use the freight capacity of its Lufthansa Italia jets to increase the company’s Italian cargo business.
There was another motivation to starting Lufthansa Italia. Lufthansa Executive Vice President Karl Ulrich Garnadt told ATWOnline.com that the airline will seek an Italian Air Operators Certificate so that it can gain the right to fly to Eastern Europe and other non–European Union destinations.
For the present, at least, Lufthansa Italia will need to operate primarily as a budget airline. That’s because there is heavy competition for the Malpensa routes. But according to Der Spiegel, competition could also benefit Lufthansa Italia: “… there's a good chance Lufthansa will obtain flight rights on the lucrative route between Milan and Rome for the first time. Until now, the lucrative route has been largely reserved for Alitalia and Air One, but after their merger there is significant probability that the European Commission will require that the route be opened up to other competitors” (January 13, 2009).
Upstart airline brands have succeeded in Europe before. Richard Branson’s Virgin Atlantic famously came on the scene in 1984 to challenge British Airways’ monopoly. The two airlines have been fierce rivals ever since. Ryanair, arguably Europe’s most successful low-fare airline, began flying between Ireland and London in 1985. By 2006, Ryanair had carried a record 42.5 million passengers, and became the world’s first airline to carry more than four million international passengers in one month. Today Ryanair owns 30 percent of Aer Lingus, Ireland’s national airline and Ryanair’s former archrival.
Lufthansa Italia may have a different kind of challenge ahead, however. Alitalia is still a formidable brand. It has been in existence since 1946, and it has carried the colors of the Italian flag in its logo, a stylized capital A, since 1969. Italian air travelers could well remain committed to a brand that has been closely tied to their homeland for more than sixty years.
On the other hand, Alitalia has endured union strikes, poor service, management problems and a recent bankruptcy. With private investors and Air France as part owner, Alitalia is moving further away from, not closer to, its Italian roots. That presents a market opportunity for Lufthansa’s new venture. If Lufthansa Italia can show it is well run, competitive and respectful of Italian culture, this upstart airline could quickly make gains with Italian travelers. They will likely pick superior economical service over loyalty to a former national airline that is in serious need of a makeover. This is the new global economy, after all.
Barry Silverstein is a freelance writer/marketing consultant and co-author of the McGraw-Hill book, The Breakaway Brand.
Lufthansa had an interest in buying a stake in Alitalia but lost out to Air France-KLM. Rather than cede the lucrative Italian routes, Lufthansa took a calculated risk and created its own new brand. It’s the first time Lufthansa has established a carrier outside its home market of Germany.
Granted, Lufthansa is an established worldwide brand. Known for its German punctuality and efficiency, Lufthansa has fared better than most European airlines. Still, the question is, will Lufthansa be able to bring the same magic to Lufthansa Italia?
Lufthansa Italia may have taken off suddenly, but Lufthansa has already shown commitment to the integrity of the new brand. Lufthansa has set up the airline as a separate subsidiary based in Milan, Italy. The airline adorned two Airbus jets with the new airline’s name and designated the planes “Milano” and “Varese” after two Italian cities. Previously, Lufthansa had named its planes only after German cities. Lufthansa Italia started operations in early February 2009, flying out of Malpensa (Milan) Airport to Paris, France, and Barcelona, Spain. More aircraft were scheduled to be added in March, and routes to Brussels, Bucharest, Budapest, Lisbon, London and Madrid were scheduled to be online by the end of March.
Lufthansa says it will imbue the new Lufthansa Italia with “reliability and high quality blended with Italian flair.” The airline says it has developed “special Italian-style in-flight services” for Lufthansa Italia (although it doesn’t specify what they are). The planes are configured to seat 138 passengers in business and economy class. Lufthansa’s operations at Malpensa Airport will be upgraded to include dedicated check-in counters, more quick check-in terminals, refurbished gate and baggage reclaim areas, and a new and improved Lufthansa lounge.
Also in February, Lufthansa Cargo announced the launch of freighter services between Milan and New York and Chicago, taking advantage of Alitalia’s failed cargo operations. Lufthansa said it will use the freight capacity of its Lufthansa Italia jets to increase the company’s Italian cargo business.
There was another motivation to starting Lufthansa Italia. Lufthansa Executive Vice President Karl Ulrich Garnadt told ATWOnline.com that the airline will seek an Italian Air Operators Certificate so that it can gain the right to fly to Eastern Europe and other non–European Union destinations.
For the present, at least, Lufthansa Italia will need to operate primarily as a budget airline. That’s because there is heavy competition for the Malpensa routes. But according to Der Spiegel, competition could also benefit Lufthansa Italia: “… there's a good chance Lufthansa will obtain flight rights on the lucrative route between Milan and Rome for the first time. Until now, the lucrative route has been largely reserved for Alitalia and Air One, but after their merger there is significant probability that the European Commission will require that the route be opened up to other competitors” (January 13, 2009).
Upstart airline brands have succeeded in Europe before. Richard Branson’s Virgin Atlantic famously came on the scene in 1984 to challenge British Airways’ monopoly. The two airlines have been fierce rivals ever since. Ryanair, arguably Europe’s most successful low-fare airline, began flying between Ireland and London in 1985. By 2006, Ryanair had carried a record 42.5 million passengers, and became the world’s first airline to carry more than four million international passengers in one month. Today Ryanair owns 30 percent of Aer Lingus, Ireland’s national airline and Ryanair’s former archrival.Lufthansa Italia may have a different kind of challenge ahead, however. Alitalia is still a formidable brand. It has been in existence since 1946, and it has carried the colors of the Italian flag in its logo, a stylized capital A, since 1969. Italian air travelers could well remain committed to a brand that has been closely tied to their homeland for more than sixty years.
On the other hand, Alitalia has endured union strikes, poor service, management problems and a recent bankruptcy. With private investors and Air France as part owner, Alitalia is moving further away from, not closer to, its Italian roots. That presents a market opportunity for Lufthansa’s new venture. If Lufthansa Italia can show it is well run, competitive and respectful of Italian culture, this upstart airline could quickly make gains with Italian travelers. They will likely pick superior economical service over loyalty to a former national airline that is in serious need of a makeover. This is the new global economy, after all.
Barry Silverstein is a freelance writer/marketing consultant and co-author of the McGraw-Hill book, The Breakaway Brand.
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