Brand Health Check - May08

Motorola hang ups

In April, Motorola announced it would cease mobile phone manufacturing functions in Singapore affecting some 700 staff based here. The company that invented the mobile phone would no longer manufacture the product in Singapore, but the local office will still serve as its Asia Pacific operational headquarters.

It has been reported that the decision was part of a global initiative to reduce costs by US$500 million (S$677.4 million). In an effort to help its mobile devices business to regain market leadership, Motorola said it has split the company to create two independent and publicly traded companies called mobile devices, and broadband and mobility solutions. The separation of its businesses, when consummated, is expected to take place in 2009.

In a statement, Motorola president and CEO Greg Brown said creating two industry-leading companies will provide improved flexibility, more tailored capital structures, and increased management focus - as well as more targeted investment opportunities for its shareholders.

It's fair to say Motorola has been going through difficult times of late. Its brand name is one of the world's best known but its mobile phone division, which makes up a huge chunk of its revenue, hasn't hit the same heights since the popular Razr model hit stores.

It was just over a year ago in March where one branding expert, for Marketing, commented that riding on one product's popularity was not the solution to building long-term brand success and Motorola needs to find a clear, well-defined space as a brand, just like what its competitors have done.

What will our brand experts say this time round?

 

Diagnosis

Remember the old days when people smoked? And when by leaving your pack of Marlboros or Dunhills on the café table you made a statement?

Whilst today you can no longer smoke anywhere, the café table still matters. So these days you leave your mobile phone to tell the world about yourself. Only, I don't see a lot of Motorola phones on café tables.

You only get consumer acceptance if you are innovative and bring a constant flow of new phones to the market. Nokia, Samsung and Sony Ericsson do this, and have all been rewarded with a strong brand perception. Not so with Motorola. I only remember the Razr phone. A nice phone, but already a bit dated, so what is next?

Actually, it was Motorola itself saying the strongest marketing tool is the 20,000 people who buy the device. If they like it, they will tell their friends.

So when you don't have a new device, there is nothing to tell your friends about.

 

Cure

• More than sleek communication Motorola needs first to invest in product innovation and launch new phones. And when the population of mobile phones in China alone since 2000 grew from 87 million to 432 million, you know there are plenty of hungry consumers out there
• Then Motorola will need to develop a strong brand proposition which will resonate with consumers
• And finally, put together a communication program which at the same time has mass appeal as well as an edge. Doing a Dolce & Gabbana promotion might bring Motorola edge, but not mass appeal
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Asger Daugbjerg
Owner
Red Spider

 

Diagnosis

Motorola's problem is a simple one. It stopped innovating. My wife has never used anything but a Motorola but she defected to Samsung this year as the Razr is just too difficult to use. Quality is not a differentiating idea but it needs to be as good as competitors'. This is where Motorola has not kept up with its rivals. The technology market is one of the most unforgiving environments in the world where past success means diddly squat with customers.
Motorola also forgot what made it famous - the pioneering spirit that it had. Motorola created the first commercially successful car radio, it invented the mobile phone, and it even came up with the communications gear that the first men on the moon used to talk to Earth. Once you forget what made you famous in the first place, you start the journey down a very slippery slope.

A brand is simply an idea that you own in the minds of people. Apple sells many different types of products but Apple owns one powerful idea - cool. What is a Motorola? What idea does it own?

 
Cure

• Motorola needs to regain ownership of idea pioneering
• Create a breakthrough phone and brand it along the lines of: ‘We brought you the first mobile phone in 1983. Now, we are bringing you the next generation.' That will work because Motorola has the necessary credentials
• Splitting the company into two is also good but each must have a different name. The mobile unit should remain as Motorola

 

Jacky Tai

Principal Consultant

StrategiCom