|
Number
43: March 10, 2004
If you think your friends and colleagues would enjoy this newsletter
feel free to forward it to them. If someone
sent this to you,
today. Outlook 2003 and AOL 9 users, please add us to your trusted or buddy lists, so you won't miss an issue.
This week in Katydid:
Keeping
Your Head through a Crisis
All public figures experience swings in popularity. Some even find
themselves in legal difficulty. Many sponsors include a morality clause
in endorsement contracts so they can pull support (and express
disappoint) while looking for a new personality.
Unfortunately, when your company is the personality, it is, by
definition, impossible to separate. So, one can imagine what is going in
the executive offices of Martha
Stewart Living Omnimedia, Inc. (NYSE: MSO)
MSO's board met on Monday, but they gave us a hint of their strategy
in a press release following the conviction
of their Chief Creative Officer, Martha Stewart on charges of
obstruction of justice.
We are confident that our assets – our senior management team, our
talented employees, our quality brand labels, our omni business model
and infrastructure, and our financial strength reflecting $169 million
cash in the bank and no debt – are more than sufficient to continue
MSO's development as a leading "how to" brand building
company.
This may be wishful thinking on their part. This may be just an
attempt to stanch the flow of blood from stock sales. It may also not be
a bad idea.
A recent article
in Money asserts that Stewart's conviction is the deathblow to the
company. It quotes Howard Davidowitz, a retail consultant, "Any
brand that's built exclusively around a single personality can't survive
something like this."
It's easy to say. If the stock drops too low, there won't be enough
money to fund a rebranding. If K-mart, which accounts for 85% of sales
last quarter, drops their contract, they will lose a major revenue
stream. However, there's not a lot of precedent for situations like this
and Martha Stewart has created a brand that may survive a few years in
jail.
None would blame the board of MSO if they closed up shop, but the
stockholders deserve some attempt on their behalf to revive the brand.
In preparation, MSO has already tested two magazine titles without the
Martha Stewart name. They've also removed her picture from many of their
products and most pages of their web site.
By distancing themselves too far from Ms. Stewart, MSO risks
alienating the very enthusiastic fan base that have stood beside her
throughout the controversy. Savemartha.com
will stage a knit-in at K-mart stores on Saturday, March 13 to encourage
K-mart to renew their contract with MSO.
For her part, Stewart has tried to maintain her fan base through her
personal web site, MarthaTalks.com.
She has been careful in her language to defend herself and without
sounding defiant. The site is full of letters of support. She lets the
fans be defiant on her behalf.
As a marketer, how could you turn all this around? Do you cut all
ties with Stewart, rename the company, and try to build business back
up? Should you keep the business as is and try to ride out the storm?
While one has to respect the verdict and realize you have a convicted
criminal on your board, dropping all ties with Martha would be seen as
disloyalty by the core base. Since they're all you have to build on, it
just doesn't make sense to alienate them. Similarly, if you try to hide
her name by rebranding as MSO, you would lose support.
You could try and transition the fan base over to the new brand by
highlighting the aesthetic values she embraced, declaring your
unwavering support of those values, and ensuring fans that Stewart would
have a place waiting for her. You would lose some customers, and it
would take longer to establish yourself as a new brand in a crowded
how-to market.
You could try to find another personality to represent the MSO
aesthetic, and that would require an endorsement from Ms. Stewart, but
since she has not brought anyone along in this role, it's not likely to
happen.
That leaves you with one choice, keep the Martha Stewart Living
brand, energize and reward the fan base for their loyalty, and focus on
the aesthetic values rather than the moral values.
Undoubtedly, some customers have been disillusioned by Stewart's
behavior, but most see her prosecution as an arbitrary attack on a
high-profile personality. They often favorably compare her crime of
lying to protect herself against the deliberate cons of executives from
Tyco, Enron, and WorldCom who seem to have escaped the kind of zeal
applied to Ms. Stewart. Additionally, they look at the estimated $40-50
thousand she saved as minor compared to the millions of dollars these
other executives allegedly stole from their own stockholders.
In short, despite her guilt, Martha's fans see her crime as a minor
infraction and her prosecution as selective, mean-spirited, and spiteful
of her success. In fact, they identify strongly with her as a woman
doing her best, making mistakes, and holding her head up even when
other's try to bring her down.
The survival strategy then would be to keep the name, but withdraw
her face from the brand. Because of this, Viacom dropping her television
show from CBS stations may actually help them. As a phrase you recite
repeatedly loses it's meaning over time, Martha Stewart the name will
naturally dissociate from the personality. People will naturally project
their own feelings onto images of her face. Depending on your point of
view, Stewart's Mona Lisa smile will seem smug or stoic. The color
palette is a key brand element that people identify with quality;
leverage this identification, slowly move the brand away from Martha
Stewart, the personality, and focus on her aesthetic values.
While it may turn out that the financial wherewithal to weather the
storm may not be there, I believe the board of MSO have done everything
possible to prepare for this course of action. Stewart may have to
resign from the board before the SEC forces her.
The board announced Tuesday that they will not make any hasty
decisions and see how their customers and advertisers respond. Those who
take pleasure in Stewart's fall were never customers and not likely to
become customers even with a new brand. Any effort to chase that
customer would be seen as desperate and rejected by everybody.
Finally, Ms. Stewart's behavior and demeanor have actually supported
her brand values. Those that love Martha identify with her
perfectionism. They see her cover-up as part of her need to remain
perfect and wonder what they might do in the face of a challenge to
their perfect worlds. While some have made fun of Stewart's possible
jailhouse transformation, her fans look at it perhaps as the ultimate
challenge for her aesthetic sensibilities; because, after all, Martha
Stewart is a woman of conviction.
Top »
Thanks for Reading
This e-mail newsletter spreads mainly by word of
mouth. Please send it on to your colleagues. Also, you can
read other back issues.
If you have suggestions of web sites to review, writing that buzzes,
or a new way of looking at things, let me know. Send your suggestions to
.
If you received this newsletter from a friend, please
today. Our subscriber lists are confidential; we never sell or rent our
lists to third parties. If you want to
from this newsletter,
please let us know.
Kind regards,
Kevin Troy Darling
Top »
|
