The CMO President’s Circle Award recognizes a marketing executive’s demonstrated dedication to the mission of the CMO Club by building relationships with peer members, collaborating and sharing with members and helping new CMOs to benefit from the peer-based community conversations.

Alan Hart, host of Marketing Today, goes behind the scenes with the world’s best marketers and business thought leaders. Listen in to learn from the best of the best. What makes a great brand, marketing campaign, or turnaround. Where is marketing going in the future? Learn from the stories of these great leaders and how you can unleash your potential.

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Alan B. Hart is founder and managing partner at ATOMCK.

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There are many possible explanations and many have come before me trying to explain either the “Steve Jobs effect” or that the Apple  brand is the main component. Two points I think are at play are 1) differentiation and 2) marketing capabilities (the Big “M” marketing not marketing communications). And yes, brand is at play and I will show you that too.

First consider this statistic on differentiation, 80% of managers say their company is strongly differentiated but only 10% of customers agree (C. Zook and J.Allen, “The Great Repeatable Business Model”, Harvard Business Review, November 2011).  I think this is more true than most technology executives would allow themselves to admit. Unfortunately for those companies, this is within any organizations full control to find relevant differentiate in their respective markets.

The second is marketing capabilities, Keen’s body of academic research we know that a 1% increase in market orientation and marketing capabilities yields a 6% increase in return on assets. This coupled with a brand impact for Technology firms where 1% increase in brand equity drives over $650 million in additional cash flow the next year or over $1.3 billion in market capitalization.

The bottom line is Apple is excelling at creating meaningful differentiation and has built the right market orientation and capabilities to manage the business and as a result the brand. Apple is also taking advantage of arbitrage (whether they realize it or not) because in the technology sector companies just are not as good on these dimensions and hence there is more upside for a firm that can get this formula right.

Adage reports that Starbucks will enter the single-serve coffeemaker market this holiday season. Green Mountain has largely created the category and continues to dominate it, followed by lesser known players Tassimo, Senseo, Nesspresso. Will this work for Starbucks?

Likely Starbucks will sell units and Green Mountain dropping 15% in trading after the announcement signals The Street agrees, but I think they are missing a core ingredient to this business model — Selection.

Mr. Schultz [CEO of Starbucks] pointed out that the at-home coffee machine will not cannibalize Starbucks’ own retail business. Also, he said, while Starbucks plans to offer only Starbucks-branded coffee for now, “we reserve the right to open the system to others, and we have not made that decision as of today.”

Without choice besides Starbucks, where does Mr. Schultz see volume coming from? Looks to me to be a “finger in the eye” of Kraft who distributes the Starbucks brand coffee in grocery channels. Shifting consumers from a bagged coffee to predictably higher margin per serving single-serve option will take a sizable investment from Starbucks.  This is a challenged business proposition with sizable investment to limit choice and market size this early in the game.

Keurig, the Green Mountain owned device, offers K-Cupswith almost every imaginable flavor or branded product from Starbucks to Dunkin Donuts to now iced tea and coffee products. What Keurig recognizes is that this is a network effect provided by the physical device and you have to serve the whole house along multiple need states (e.g. morning start caffeine, afternoon relaxation)  to generate growth.

I am curious to see where Schultz and Starbucks takes this and whether they see the opportunity here to create a real shift in how they have operated — from exceptionally designed, controlled choices for consumers to allowing the consumer to drive choice in their home.

MASB President Meg Blair noted that four major brand-valuation firms (Interbrand, Millward Brown’s BrandZ, CoreBrand and Brand Finance) peg General Electric’s brand value at between $30.5 billion to $50.3 billion. Two of those firms had GE’s brand value rising in the past year: one by 2%, one by 12%. Two showed its valuation falling: one by 4%, one by 10%.

Here is the visual from the report, which I highly recommend you download here.

Are you surprised? Probably not, we do need a better system and measures. More importantly as Ivan Cayabyab from GE points out the utility of these tools are suspect. We need more diagnostic, actionable and predictive measures of Brand Equity.

Keen® is working on this problem with our Brand Value Maximizer methodology. I would love to talk to you if you are looking for a better way.

I like to think I am ahead of the curve on understanding technology and especially wireless, but some how this iOS feature for iPhone to iPhone messaging did not get through. iMessages do not count towards your text usage. 

This is doubly painful since I recently upgraded my plan to include unlimited text on our family plan because my lovely wife has all but left email behind and replaced with texting. Maybe I should reconsider?

Anyway, I would love to know why I haven’t heard about this until now? Was it downplayed by Apple because it wasn’t inclusive of Android and other phones? Or was it an attempt by the carrier to push cost back to Apple (their user are notorious for high data usage vs. compressed data from Blackberry devices), which has now backfired (lowering the need for text plans)?