This post is drawn from an article that appeared first in The Washington Times on Sunday, May 10. For more detail, see Greater Good: How Good Marketing Makes For Better Democracy by John Quelch and Katherine Jocz (Harvard Business Press 2008).

Choice sells, in politics and in the supermarket. Distinct choices on the shelf attract our attention to a product category, engage and involve us, and increase the chances that we’ll make a purchase. In other words, choice drives consumption.

The same is true of the political marketplace. With no incumbent running in the United States, the unprecedented turnouts in primary states reflect the genuine choice that voters see on the ballot. The level of choice and the uncertainty about who will prevail has fueled heavy media coverage and grassroots activism that add to voter interest.

Choice and uncertainty also spawn fierce competition. The result of the winner-take-all political system is that politicians trailing in the polls become more desperate as the day of reckoning approaches. They flood the airwaves with negative ads, especially in closely fought states like Pennsylvania and Indiana where the margin of victory was as important as who wins.

Negative ads ask us to vote against someone rather than for someone. This lesser-of-two-evils approach to political marketing inevitably breeds cynicism and sometimes backfires but it often works against new candidates who haven’t yet locked down their supporters firmly enough to withstand the barrage. And, with no prospect of another debate to score points, and with Obama trying to stay positive and clinging to the moral high ground by staying positive, the underdog Clinton campaign will remain relentless in its advertising attacks on Obama.

Here are the four types of negative advertisements we've seen from the Clinton campaign:

"Fear appeal" ads, such as the 3am phone call, designed to worry voters about Obama’s lack of experience.

Guilt-by-association ads that include footage of Pastor Wright.

The roll-your-own ads that exploit gaffes or contradictions using the candidate’s own words.

Finally, there is the occasional policy comparison ad that contrasts the two candidates’ points of view. But, with minimal policy differences separating Clinton and Obama, the emphasis is inevitably on character and emotion, experience versus change.

In the Republican race, the better-known John McCain used negative ads effectively to bury the better financed Mitt Romney in Florida. These negative ads were complimented by positive ads burnishing McCain’s record. The ads ran in the final days before the Florida primary, leaving Romney little time to respond. Finally, McCain used high profile surrogates such as Governor Crist to reinforce concerns about his opponent.

Unlike politicians, companies hardly ever run negative ads. Pepsi ads don’t tear down Coke; they build the brand image of Pepsi. Why? Because a tit-for-tat war of words would turn off consumers of both brands. And sales growth, not just market share, is what puts money in shareholders’ pockets.

As the market leader, Coke would never give the underdog Pepsi the benefit of a mention in its ads. For its part, Pepsi would worry that negative ads against Coke would say more to consumers about the character of Pepsi than Coke. And when Pepsi did famously “challenge” Coke twenty years ago, it was with blindfolded consumers choosing between two unlabeled samples, as close as you could get to a scientific test.

The Coke and Pepsi formulas are different and they appeal to different consumers but they are what they are. A Pepsi today is the same as a Pepsi tomorrow. A Pepsi in Boston is the same as a Pepsi in LA. Political brands, on the other hand, are works in progress and consistency is not always their strong suit. Nor, based on past evidence, is their ability to deliver on the brand promise, once elected. So, no matter how many voters are turned off, no matter how much ammunition they provide the Republicans in the general election, negative ads will rule the airwaves until the Democrats select their nominee.

Normally, the Olympic Games are a positive force in marketing. Worldwide marketing expenditures increase as official sponsors and unofficial free-riders attach themselves to the Olympic logo, to particular sports, national teams or individual athletes. Global brands, in particular, see the Olympics and World Cup soccer as the two most important international sporting events; brand linkage to these events can boost brand awareness, preference and sales over competitors who cannot afford the global sponsorship prices set by the International Olympic Committee.

This year, however, concerns over the Chinese government's role in Tibet, Sudan and other alleged human rights abuses threaten to derail its plans to stage the Olympics as China’s coming out party. Tight security in Beijing may take some of the fun out of the Games, not just for the sports fans and athletes but also for the sponsors.

Take Lenovo, for example. The fourth largest personal computer manufacturer in the world is the first and only Chinese company to be a global sponsor of an Olympics. Lenovo's investment in the Games is around $100 million. The company paid millions, along with Samsung and Coca-Cola, to sponsor the torch relay. Lenovo’s sponsorship will doubtless reinforce its brand preference rankings in China. However, around the world, Lenovo hardly wishes to be known as the Chinese PC company that consumers find convenient to boycott.

Here are some trends I'm seeing among sponsoring companies:

First-time sponsors have a lot more to lose than long-term investors.
Lenovo, as a first-time global sponsor whose future depends heavily on success this year, has much more at stake than veteran Olympics sponsors such as Coca-Cola, Visa and McDonald’s. These companies are long-term investors in the Olympics; if Beijing fails to realize earlier commercial expectations, London in 2012 can make up for it. Around the world, the veteran sponsors may be careful not to over-identify with Beijing. They will emphasize sponsorships of national athletes and national teams rather than focus on the Olympic rings. But, in China, the Western multinationals will pursue a much more aggressive strategy. They will build goodwill for their brands by creating China-specific advertising and promotion programs that tap Chinese pride in hosting the Games.

"Two-faced" approaches.
Those companies that are not global sponsors of the Games will also take a two-faced approach, supporting the Games in China while being disinclined to associate with them in North American and European markets. Given the prominence of China as a supplier and customer, it is unlikely that we will witness grandstanding boycotts of the Games by any company. Most consumers around the world do not let their political views affect their purchase decisions. However, we are likely to see websites promoting boycotts of Chinese brands such as Haier, TCL and Lenovo.

Late campaign purchasing as a safety hedge.
The International Olympic Committee continues to argue that the Games and the aspirations and achievements of individual athletes should be independent of politics. The reality is that the Chinese government has always intended to use the Games to its political advantage and that further escalations of violence in Tibet could diminish public support and lead to national team and individual athlete boycotts, as occurred in Moscow following the Soviet Union's invasion of Afghanistan. As a result, marketers are not over-committing funds to Olympics-related brand advertising and promotions and the normal Olympics year advertising boost may be less than expected. Instead of long-term preset media advertising buys, many companies are planning short-term promotional bursts that they can activate as late as July and August if all appears to be in place for a successful, trouble-free Games.

Accounting for almost 30% of world GDP, the United States is the world’s largest and most demanding market for almost everything from oil to microprocessors to premium coffee. Companies around the world aspire to do business in the US, or at least with US companies in their home markets. By doing so, they learn much about the latest management practices, they can be closer to the cutting edge of innovation, and they can boost their reputations by supplying well-known US firms.

The market size of the US makes it important target but, in addition, foreign companies often feel they have to crack the US market in order to gain respect. No CEO can lead a global company if that company does not have a strong presence in the USA.

So how do you penetrate the US market? The annals of business are littered with foreign companies that have never quite succeeded in the USA. But here are four companies that have managed to crack the US market. Each carries a special lesson.

1. Royal Bank of Scotland. This company built up a strong retail market share in the US, not under the RBS brand, but through a series of acquisitions of regional (not national) banks. RBS is adding value for its shareholders by letting these banks retain their individual brand identities, by focusing on improving back office efficiencies and by having the highly respected CEO of one of the acquired entities lead the combined US organization. Meanwhile, RBS is building its B2B brand with institutional clients on Wall Street.

2. IKEA. IKEA offers a furniture retailing value proposition and experience unparalleled in the US market. IKEA’s location selection expertise and their established global supply chains enable them to offer exceptional category-killer prices that are further keys to success.

3. ING. The Dutch bank converted its weakness (no retail branches in the US) into a strength. Following a successful Canadian market test, ING gave its entrepreneurial general manager the green light to offer retail banking services to US consumers but exclusively on an on-line basis. Taking advantage of its low no-bricks-and-mortar cost structure, ING was able to offer generous rates on certificates of deposit. Just four years on, ING is the third-largest holder of consumer CD investments in the US.

4. Dyson. The British home appliance maker earned a break when it managed to get a Best Buy buyer to take one of its vacuum cleaners home to test. The buyer was impressed. Fortunately for Dyson, Best Buy became the first US retailer to stock Dyson vacuum cleaners--other US retailers invariably follow Best Buy’s lead. Electronics retailing in the US is concentrated (10 chains control 60% of the market) and tough to penetrate. But Dyson could not have succeeded had its products not been superior to other vacuum cleaners already in US stores.

A current case, well worth watching, is the effort of Tesco, the British retailer, to enter the US market with the new Fresh & Easy chain of discount grocery stores. Avoiding geographies where Wal-Mart is entrenched, Tesco has so far opened 50 stores in the growth markets of California, Nevada and Arizona. The question is whether Tesco’s assortment and value proposition will be appreciated by enough consumers fast enough for weekly store sales to reach profitable levels. Stay tuned.

In soccer, it’s axiomatic that controlling midfield is critical to success. The team that controls midfield dictates the pace of play, gives its forwards and defenders more time to set up their plays and breaks up attacks by the opposing team’s front line.

In business, it’s not fashionable to concentrate on midfield. Focus, we are told, is essential. But you either have to be a specialist niche provider of premium-priced products tailored to a particular customer segment, or you have to shoot for scale, using low prices and volume purchasing to attract a mass market and drive down your cost structure. Midfield has been characterized as a “ditch” populated by companies with lower returns on investment than those pursuing the first two strategies. The woes of once great retailers like Sears Roebuck are cited as evidence.

But midfield is critical. It represents the middle of the market, to which one end of the market aspires to trade up and the other end of the market may have to (for economic reasons) or decide to (for lifestyle reasons) to trade down. General Motors and Ford used to control midfield in the US auto market with the Chevrolet Malibu and the Ford Taurus. Nowadays, the Toyota Camry controls midfield. That control is critical to Toyota’s product line strategy.

It’s not that Toyota only sells in the middle market. Far from it. They sell to all segments (except the luxury segment which they address with Lexus). But midfield is where the Bell-curve distribution of auto buyers by price of car reaches its peak. Sales of midfield product are a bellwether for dealers and consumers alike. The other products in the line – and their relative prices – hinge on the midfield entry.

A company controls midfield by fielding a complete product line that includes backs and forwards. In its supermarkets, Tesco, the successful UK retailer, offers consumers three options – good, better and best - in most high turnover product categories. In addition, Tesco, doesn’t just sell groceries through one-size-fits-all supermarkets. Recognizing the need to shape as well as respond to an increasingly segmented market, Tesco reaches its consumers through at least seven different store formats, from convenient Tesco Express outlets at one end of the spectrum to full assortment hypermarkets at the other. But, within all its stores, Tesco implements the same merchandising principles: Better, Simpler, Cheaper.

The question arises: Can a company control midfield by playing only in midfield? The answer is “yes” but only if there is a precise and persuasive value proposition. Until three years ago, Charles Schwab had lost its way. The former king of discount brokerage had let its cost structure drift upwards and its prices had been undercut by Ameritrade and E*trade. Research identified a large middle market of investors, bruised by the end of the dot com bubble, in need of more advice and brand assurance than Vanguard and Fidelity provided but without enough investable assets to be important to Merrill Lynch. The successful “Talk to Chuck” campaign appealed to this group, presenting Charles Schwab as an approachable partner serving the best interests of investors. Charles Schwab’s asset growth over the past two years has topped the industry charts.

Midfield is a moving target. If Charles Schwab serves its customers well, their assets will grow to the point that they’ll need more sophisticated services and advice. To control midfield, companies like Charles Schwab must stay consistent in their positioning but also respond to the evolving needs of their existing customers with new products and services. Very careful cost and service tradeoffs are required of companies that continue to dominate the middle ground.

Nowhere is controlling midfield more important than politics. With just two mainstream political parties evenly balanced, the winner is invariably the party that appeals best to “middle class values” and “middle America” and that captures a majority of the independents in the middle. The middle may not be as clearcut or exciting as the left or the right. It is a fuzzy zone that requires constant compromise. Yet midfield is where the votes are.

Do you agree that controlling midfield is a viable strategy? Can you think of other success stories?

The signs of an imminent recession are all around us. The spillover from the subprime mortgage crisis is weakening both consumer confidence and the consumer spending--much of it on credit--that has been buoying the US economy.

Companies should bear eight factors in mind when making their marketing plans for 2008 and 2009:

1. Research the customer. Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. Consumers take more time searching for durable goods and negotiate harder at the point of sale. They are more willing to postpone purchases, trade down, or buy less. Must-have features of yesterday are today’s can-live-withouts. Trusted brands are especially valued and they can still launch new products successfully but interest in new brands and new categories fades. Conspicuous consumption becomes less prevalent.

2. Focus on family values. When economic hard times loom, we tend to retreat to our village. Look for cozy hearth-and-home family scenes in advertising to replace images of extreme sports, adventure and rugged individualism. Zany humor and appeals on the basis of fear are out. Greeting card sales, telephone use and discretionary spending on home furnishings and home entertainment will hold up well, as uncertainty prompts us to stay at home but also stay connected with family and friends.

3. Maintain marketing spending. This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brands--and more consumers at home watching television can deliver higher than expected audiences at lower cost-per-thousand impressions. Brands with deep pockets may be able to negotiate favourable advertising rates and lock them in for several years. If you have to cut marketing spending, try to maintain the frequency of advertisements by shifting from 30-to-15 second advertisements, substituting radio for television advertising, or increasing the use of direct marketing, which gives more immediate sales impact.

4. Adjust product portfolios. Marketers must reforecast demand for each item in their product lines as consumers trade down to models that stress good value, such as cars with fewer options. Tough times favour multi-purpose goods over specialised products and weaker items in product lines should be pruned. In grocery-products categories, good-quality own-brands gain at the expense of national brands. Industrial customers prefer to see products and services unbundled and priced separately. Gimmicks are out; reliability, durability, safety and performance are in. New products, especially those that address the new consumer reality and thereby put pressure on competitors, should still be introduced but advertising should stress superior price performance, not corporate image.

5. Support distributors. In uncertain times, no one wants to tie up working capital in excess inventories. Early-buy allowances, extended financing and generous return policies motivate distributors to stock your full product line. This is particularly true with unproven new products. Be careful about expanding distribution to lower-priced channels; doing so can jeopardise existing relationships and your brand image. However, now may be the time to drop your weaker distributors and upgrade your sales force by recruiting those sacked by other companies.

6. Adjust pricing tactics. Customers will be shopping around for the best deals. You do not necessarily have to cut list prices but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-standing customers and price smaller pack sizes more aggressively. In tough times, price cuts attract more consumer support than promotions such as sweepstakes and mail-in offers.

7. Stress market share. In all but a few technology categories where growth prospects are strong, companies are in a battle for market share and, in some cases, survival. Knowing your cost structure can ensure that any cuts or consolidation initiatives will save the most money with minimum customer impact. Companies such as Wal-Mart and Southwest Airlines, with strong positions and the most productive cost structures in their industries, can expect to gain market share. Other companies with healthy balance sheets can do so by acquiring weak competitors.

8. Emphasise core values. Although most companies are making employees redundant, chief executives can cement the loyalty of those who remain by assuring employees that the company has survived difficult times before, maintaining quality rather than cutting corners and servicing existing customers rather than trying to be all things to all people. CEOs must spend more time with customers and employees. Economic recession can elevate the importance of the finance director’s balance sheet over the marketing manager’s income statement. Managing working capital can easily dominate managing customer relationships. CEOs must counter this. Successful companies do not abandon their marketing strategies in a recession; they adapt them.

Go to the Complete Downturn Survival Guide

This post is based on an article by John Quelch that appeared in The Financial Times of London on February 19, 2008. Reproduced by permission.

This post is based on the new book, Greater Good: How Good Marketing Makes For Better Democracy, by John A. Quelch and Katherine E. Jocz, now available from Harvard Business Press.

Marketing is often dismissed. CEOs and CFOs claim it isn’t rigorous. Consumer advocates find it deceptive and intrusive. Sociologists contend it encourages self-centered materialism. Marketers, preoccupied with individual campaigns, do a pitiful job of understanding and marketing the importance of their profession.

Marketing contributes enormously to economic development -- and it is also a force for social good. The billions of mutually satisfying exchanges that occur daily in the commercial marketplace are part of the glue that builds the trust and respect that hold society together. The practice consumers gain choosing products makes them smarter citizens when they come to choose among political candidates. A world without marketing would be a wasteland of sameness, commoditization, and inertia. Marketing fuels the creative industries that bring us entertainment. Marketing know-how helps public policy makers change citizen behaviors by, for example, encouraging seat-belt usage or good nutrition.

Of course, marketing can be abused. A small minority of marketers deceive people. But the vast majority know that respecting the customer is key to a profitable long-term relationship. Customers, with all their cumulative experience in the marketplace, are rarely gullible. Yet a high percentage of consumers believe that marketing deceives people, even though a much lower percentage agrees to ever having been deceived themselves. That’s one of the democratic niceties of marketing. Everyone can have an opinion about the latest product or this year’s SuperBowl ads.

We compared the political marketplace and the commercial marketplace and asked the question: “Which is more democratic?” We discovered that the benefits that marketing and democracy deliver to society are remarkably similar.

Marketers give consumers information. They offer consumers choice. They want to engage consumers, to earn their interest and loyalty. Most marketers seek to be inclusive, to bring good quality to the masses. Finally, a marketer’s success depends on an exchange occurring with a customer and subsequent consumption of the goods and services purchased. These benefits are equally relevant in the political marketplace.

But which is more democratic? The answer is, surely, the commercial marketplace, where solutions can be customized for specific market segments, even for individual consumers. Diversity is addressed readily by marketers while public policymakers still struggle to find one-size-fits-all compromise solutions.

The political marketplace is winner takes all. Citizens who vote for the losing candidate have to live with the winner. In the commercial marketplace, consumers do not have to choose a single brand. They can drink Miller High Life during the week and Michelob on weekends.

Political democracies therefore require citizens to accept the collective judgment of the majority of voters. They get to make a purchase (i.e. cast a ballot) only once every two, four or six years, depending on the office. And the candidates only have to worry about achieving market share leadership on polling day, whereas commercial marketers are keen to increase market size as well as market share and they have to count consumers’ votes every single day.

So, if the commercial marketplace is more democratic than the political marketplace, why all the criticism? The answer is that commercial marketing is becoming too successful. For the 80% of American adults who are not political junkies, relationships with brands like Starbucks and BMW are more rewarding than associations with political parties. For most citizens, neither Democrat nor Republican is a trusted brand with a consistent, differentiated, and relevant positioning in the marketplace of ideas.

To respond, our politicians and parties must do a better job of marketing themselves. The development of grass roots campaign websites allowing voters to question candidates and engage in online debate can help. But a more fundamental shift in attitudes is called for. Instead of treating citizens merely as taxpayers, donors and voters, politicians must engage citizens as effectively as marketers engage consumers.

Which do you think is more democratic, politics or marketing?