The defining essence. Getting a handle on Oroton.

Australia’s Oroton Group as Australia's only luxury clothing and accesories group, used to be a bellwhether for contemporary Australian luxury but not any more.

At the turn of the century, the company began an aggressive acquisition program that saw it acquire the Morrissey and Marcs brands. At one stage both of these brands were originally positioned at the higher end of the Australian fashion market, Marcs used to import leading European designer brands and Peter Morrissey, alongside long-time partner Leona Edminston, used to sell into New York department stores. Since 2003 the group has shown static growth, with both the Marcs and Morrissey brands subject to constant revision and somewhat arbitary repositioning. We think we might have some idea why the Oroton Group might be getting it wrong.

This is Oroton’s customer segmentation model from a recent presentation:

Oroton
Contemporary consumers who spoil themselves and others through quality purchases

Polo Ralph Lauren
Quintessential classic contemporary shopper

Polo Jeans
Classic youth minded shopper

Marcs
Contemporary consumers who seek quality fashion

BabyDoll
Fashion driven youth-oriented shopper “Gotta have it now”

Morrissey
Sophisticated consumers who value individuality

Aldo
Fashion aware, on-brand shoppers who place price and quality as paramount

The interesting thing about what these descriptors reveal is how little Oroton seem to know about their customers, interchanging the word “shopper”, “consumer” and “individual”, without really attaching any single unique detail or benefit to purchase. Instead, they use ambiguous outcomes like “quality”, “ value individuality” and “contemporary” in a naive attempt to segment their customers. All seemingly simplistic, almost as if they are frightened to actually say who their customers are. More importantly, we believe the poor performance of some of these brands can be attributed, not to a flat trading environment which the group cites, but to their failure to actually understand and get inside the minds of their customers.

One of the opportunities we see for Oroton is the adoption of a more benefit-based market segmentation approach for their portfolio. This involves segmenting the market for their products across all the brands and introducing a brand lifecycle based on the intrinsic value that their customers get from their products, not by traditional conjoint analysis, which identifies customers on variables such as how much money she makes or where he lives. This intrinsic value (benefit) could take various forms such as the snob appeal of Polo, the perceived quality of Oroton or the derived economy in an Aldo shoe customer.

This method of market segmentation is significantly different from other methods of market segmentation in use. It gets inside the consumer’s thinking and finds out what the customer feels about a product or brand. The underlying principle is that consumers do not seek a product or brand, rather they seek alignment with a brand essence - they want what it does for them, or the derived benefit – how it makes them feel, look and the status they get from the purchase. With benefit-based segmentation, the objective is to identify why the customer is buying the product, and group customers accordingly.

Oroton Group currently seems to see the outward benefit of segmentation as a way to market to customers within the brand portfolio rather than across it. However, using a benefit-based market segmentation model, the objective is to group customers together for the most effective targeting, not separate them out to be targeted separately. Something that fits with the Group’s recent stated goal to adopt a “whole of company” approach to their brands.

No one will save Myer now.

It comes as no surprise to hear that embattled Myer is pulling out all stops with a new Christmas advertising campaign [Sydney Morning Herald 12/10/2005] in the lead up to its fire sale by parent Coles Myer Limited [CML]. Even more telling is the heat around the corner from a falling share price.

There have been a number of tell tale warning signs, all of which both CML boss, John Fletcher, and Myer MD, Dawn Robertson, have either ignored, misread or more likely, simply not noticed. Part of the problem stems from a greater issue, to do with CML and its inability to understand brand, both at a corporate level and at an individual business level. Secondly, like many other corporates, CML continues to relegate brand strategy to advertising agencies, who roll out tvc and print campaigns that do little to build brand in a way that is committed to integrity and longevity. Thirdly, CML has lost its ‘reason for being’ beyond that of economic rationalism [which is taking a beating anyway!]; yes, they provide millions of products to millions of Australians, but aside from this functional attribute, CML, our largest Australian company, doesn’t stand for anything in our hearts and minds.

Which brings us to the specific problem of Myer. I grew up in Queensland and as such, am familiar with the Myer brand. Intrinsically Melbournian [as evidenced by their choice of spokesperson Barry Humphries, about as much of a Melbourne icon that you can get], in Brisbane, that didn’t really matter…Melbourne represented a culture we didn’t have; it was aspirational, European, stylish, black and white, classical. However, Sydney was a different story. The move in 2004 to replace the iconic shopping brand Grace Bros with Myer, was always going to be problematic. Not only because Myer wasn’t NSW or more importantly ‘Sydney’, but because Grace Bros provided differentiation to David Jones [who can tell the black and white sales ads in our newspapers apart?] and had a significant and meaningful brand heritage.

In 2004 I co-authored a joint research paper examining the loss of the 119 year old name, Grace Bros. The paper, 'Out of the Red into the Black' [Murphy, Ringma & Jetland] examined the narratives [or stories] of both Grace Bros and Myer. It found that ‘Grace Bros played an important role “as a rhetorical interface between organisational culture and organisational identity” (Faber, 1998), an identity that had resonance in the community beyond its role as a retailer’. The research found that CML over 16 years of ownership, had systematically removed the history of Grace Bros and its related stories, ‘representing a deep disconnect between the current organisation and its narrative, cultural and value history’. It was a history and stories which customers, both young and old, continued to relate to, regardless of their attraction to Robertson’s “newer, brighter better” mantra.

It is now too late for Myer and one only hopes that CML has learnt some lessons, so that it won’t all be in vain. It’s unfortunately apt that the latest Myer catalogue is headlined, “Big, black bag”, all too reminiscent of a body bag they use for the newly departed.

Photo: John Woudstra. Courtesy Sydney Morning Herald 12/10/05.

Place branding. Are they serious, Mum?

Want some elementary school kids to name your suburb? Any takers for Pokemonville? Disney? Nelly? This is what the NSW Property Council in Sydney wants to see happen following a decision of the State Government to rename an area east of the city after the popular entertainment precinct, Darling Harbour.

The Council is up in arms because they believe that branding "East Darling Harbour", a 22 hectare site in an area formerly called Millers Point, will be difficult under the proposed name.

According to one Sydney Morning Herald report, NSW Property Council executive director, Ken Morrison thinks the name will be regarded as something of a last minute tack-on; both meaningless and not memorable, just convenient for untaxed imaginations.

“East Darling Harbour sounds like its left on the edge of something else", Morrison is reported as saying and thinks elementary school kids could come up with a better name.

As we note in our 21 June blog Place branding. Not so new., both the naming and branding of distinct urban areas is something that is serious and should be performed by professionals in consultation with the local communities. And anyway, what was wrong with Millers Point?

Meanwhile, the State Government says they will listen to proposals. We think given the Minister’s reputation, nothing much will happen.