My Photo
Blog powered by Typepad

« Focus or Flexibility | Main | Grassroots Innovation »

August 03, 2006

Comments

Hussain Ahmed

hi, i wanna learn branding i have basic concepts just entered into real business world though my job is not branding yet ? but how i can learn branding . would it be a good career ? what does it take to be a A branding Guy

yasser brohi

Brand Identity:
Apple stands more for 'revolutionary design'than anything else.(OSX, EMAC, IMAC GEN1, IMAC GEN2, IPOD with the nano variant) It's starting to establish a visual taste similar to Bang & Olufsen. I don't think that Apple can survive (at this point in time) without Jobs.

Brand Representation:
Observing factual brand history, i gather that line extension works where the brand does establish an element of trust, and that has to be spearheaded by a leader as in the case of Richard Branson and Steve Jobs. Jobs got fired, Apple went off the radar, Jobs came back, Apple came back.)Having said that, the IPOD did more for Apple than Apple did for the IPOD. Makes me wonder if Virgin Records would have been better off as a unique brand.

Line Extension Disparity
The much criticised phenomenon of line extension seems to work only with seemingly disparate products. I give Virgin Cola better odds than Virgin Luggage, although i maintain that Vera Wang Fragrances, Dunhill Menswear, Mont Blanc Watches etc would all do better as different brands.

Credibility via time & quality
If all their brands are successful, a corporate brand like Unilever can hope to benefit from slapping its name on every product, but that is providing they are consistent in their corporate brand communication.
Even though i have no concrete statistics, a hunch says Dell might have made a mistake by line-extending their brand to televisions a few years before they should have( IF they should have), even though the utilization of LCD's as Monitors is increasing adding more fuel to that iffy 'convergence' fire

The focus & positioning school of thought works particularly well in the FMCG category. However, how does it translate to creating brands in the service industry?

Gregor Zavcer

Excellent discussion. I completely agree with Jennifer’s “how you do it” logic while at the same time I’m sceptic about the concept of brand loyalty itself as I think that absolute brand loyalty at the end of the day does not exist.

Personally, I see brand loyalty like a some sort of narcotic disfunction, let’s say something like love. It can last forever but rarely does. Customers are loyal to a brand until they come in the situation where the product isn't available, something becomes easier to get hold of, is more appealing or they just get tired of the brand. In that moment they just go for the other. This is also the breaking point when the narcotic disfunction comes to an end and they realise that that particular brand isn't the only one fulfilling their needs. That’s why you constantly need to be working on the brand and try to be as much emphatic as possible towards your customers. Today’s customer is just a spoiled princess which you can influence if you play the right notes and keep her happy. To extend that analogy, I also agree with Laura’s “being first” as you never forget your first love.

I still regard amazon as a bookstore and always thought they are going to expand into publishing. I’ve never even looked at all the categories they have while I bought a book there last week. However, considering their actions I could see Amazon functioning as a grocery store if they would implement some A.I. logic into the ordering process and thus achieving automation of grocery shopping (back to “how you do it” or innovation). When I don’t need to think anymore about going to the store, because I get it automatically to my home, I would only change my shopping list once in a while, that is more or less just update it. There is already a big number of apps for PDAs to organise your shopping list, why shouldn’t I do that online and get it home? “Subscribed customers” could now and then get a free sample of a new product based on customers buying preferences. Eventually this could become a similar kind of income for Amazon as Google’s adwords, where Amazon would charge companies for promotion of their products. But at the end of the day, would you really like to get delivered your groceries from the Amazon?

The expansion of Branson's empire and prolonging the life of the Virgin brand could be done by extending the Branson brandname, that is extending the foundation of the brand. Branson is still just one person and now we’re in the times when we’re moving from individuals to communities or “tribes”. Branson should put alongside himself new faces, people who dare to go one step further but at the same time be careful that those aren’t just walking in his footsteps but can express their individuality.

I wouldn’t necessarily agree that creating new brands is easy, maybe for brands with a short life. However, I see that lifestyle brands are way harder to create. Should first be created a “simple niche” brand focused on the advantages of the product and when earning trust expanded into a lifestyle brand? When this brand becomes mature it can then expand even further. This is how I see the story of Virgin.

I also see a major problem with perceiving a category which to some extent is also present in this debate. Some categories make sense for statistics and trend analysis but as also pointed here, customer perception is a pretty strange thing.

Currently I’m working on a brand in the beverage business, so I pretty much think in those frames. For example, how does a brand extension like Smirnoff did with Smirnoff Ice influence the core brand? Is the premixed drink (Smirnoff Ice) a complement to the brand or is it actually a substitute? Is it really a different category or do these products fit into the category of party drinks? Smirnoff would say that they’ve extended their market to drinkers who aren’t into the “heavy stuff” but did they do that? Would it be better that they would just create Ice and put a tag on it that it contains Smirnoff vodka to give the new brand a boost? Afterall, most of the people mix vodka with something else.

While Smirnoff still can get away with it if that brand flops, how is it with new lifestyle brands? How far can they go?

How far can a brand go before it is perceived as a threat? From google-mania to google-phobia.

Sorry for the longer post. Please regard it as a compliment as I actually don’t post at all but this conversation just got me going.

Scott Miller

Just saw an ad for V8's new line of fruit juices, using a line extended name, something like, V8 V-Fusion Fruit Juice.

So, we have V8, known as a vegetable drink, now trying to position itself also as a fruit drink. That's like Bayer coming out with a non-aspirin pain reliever.

Oh wait! They did that. And it totally flopped.

People think of Bayer as aspirin, so a non-aspirin Bayer product reads in the consumer mind as, "non-aspirin aspirin." I'm sure the clueless managers running Bayer mistaken thought their brand had a broader, more generic meaning: "pain reliever." (Much like Weber mistaken thinks their brand means the more generic "grill" rather than "coal grill.")

V8's fruity execs must mistaken think their brand means "juice" rather than "vegetable juice."

And this supports what I said before: Brand managers far too often believe their brand casts a wider net in our minds than it really does. It's just far too easy for brand managers to believe that their successful brand has equal qualifications in categories adjacent to the one they're successful in.

V-Fusion might have had a chance had they not killed it with a line-extended ball-n-chain. But then, that's doubtful too, because V-Fusion doesn't invent a new category, it's just a me-too product.

I give it two years max.

Snit

Small point, but do you really think that real people out in the world (consumers) associate Steve Jobs that closely with Apple? I suspect future falters might come from having someone less visionary at the helm or because that future leader makes poorer choices, but not because consumers link SJ inescapably with the brand a la Branson and Virgin. Apple's brand is so strong, and its products so well designed, that i dont think Apple needs Jobs to survive.

Tim Sunderland

I can think of two examples of branding and brand dilution here:

The first comes from Dr. Pepper. I have been a religious Dr. Pepper consumer since my teens (I'm 51 now). Used to drink the regular Dr. Pepper, but someplace in my '30s I made the change to Diet Dr. Pepper. Came to like it more than the regular Dr. Pepper. Last year I was in a market and got a Diet Dr. Pepper attack. Had to have it. Reached into the cooler at the check-out stand (what an impulse buying tool that one is) and pulled one out. I checked out, got into my car in the parking lot, opened the bottle and took a long pull --- it was vanilla flavored Diet Dr. Pepper! My first thought (and I don't know if this was as a marketer or as a consumer) was, "What the hell did they do that for?" The bottle looked enough like Diet Dr. Pepper that I was fooled. Now Dr. Pepper has expanded to new flavors. What are these people thinking? All they are doing is cannibalizing the mother brand. We all know that very few people are going to try vanilla or cherry-flavored Diet Dr. Pepper unless they are Diet Dr. Pepper devotees in the first place. But more importantly they tend to irritate folks like me, who are their core market.

(By the way, as I wrote this, I signed up for the current Dr. Pepper promo on the web).

My other example is cigars. I typically smoke a cigar or two a week, maybe less. Usually smoke them when I am golfing, because in California the only place you can legally smoke a cigar is a golf course. I a not a cigar connoisseur, but I have smoked Cuban cigars, upper end brands from a lot of countries, and the cheap ones, too. I have smoked some really excellent Cuban Cohiba cigars, and some really poor ones. The same goes for many non-Cuban brands like Aurturo Fuente. However there are some less expensive brands, Republica de Nicaragua and JR, that are not perhaps the best cigars, but they are consistent. Nothing is worse for me than to buy an Aurturo Fuente for $15 and get a bad cigar. Especially when I know I can purchase a Republic de Nicaragua for less than $5 and get a decent cigar. The later may not be as good as a good Fuente, but the Republica de Nicaragua brand has instilled in me a trust -- trust that I will not get a bad cigar.

Dr. Pepper is betraying the brand, while Republic de Nicaragua supports their brand. It's not the best cigar around, but when I don't have a lot of time to spend in the humidor, I know I can rely on them.


Diary of an Ad Man

It all boils down to a promise, that's a brand. The promise may be great product, great feeling, great experience, but the definition must be true. If the experience doesn't match the brand, then all the marketing falls flat.

I don't think Amazon stands for anything, like you I think it's overextended. Same for HP. So is their brand failing, or does it just mean conglomerate? I think the latter.

Anyway, great read, I enjoyed it very much.

jennifer rice

Mike, thanks for the example. This is one of those cases where I have to say "it depends." You could create a single base architecture and allow customers to select one industry-specific feature set... same base price, but perhaps the add-on feature set price is variable (sort of like ordering a pizza; people expect to pay the same amount for a basic cheese pizza, and extra for the quality/quantity of toppings.) I have no idea if that would work in your specific case. It does come down to perceived value; I've run into interesting discoveries when talking with clients' customers to better understand their perceptions of value. I worked with one software company who believed their software was worth more than customers were willing to pay. In talking with customers, they were looking for a specific benefit that the software should have delivered but didn't. So it's often tough to answer these types of brand questions without getting into customer's heads. I'd have to see your specific case. And of course, I'm available for hire. :-)

Mike

Regarding Amazon and groceries. I live in Minneapolis. Here we have a chain of grocery stores called Cub Foods where I spend a fair amount of money. We also have Target stores. Some Target stores also sell groceries, and not just a few items either. I'm talking about stores with a bakery, produce dept, dairy, and dry goods. I still haven't gotten it into my head that Target sells groceries. Target does not = groceries. Target = general mechandise that's nice and not expensive. But food? Sure, I'll buy a bagel or a box of cookies from Target but I'm not buying lettuce or chicken. That doesn't make sense.

I'm not sure how well Target is doing in groceries. I have heard that WalMart is doing very well, but then again, WalMart is probably the exception to the rule. Maybe Amazon will be the exception to the rule as well and succeed selling groceries. However, Amazon stands about as much chance getting my grocery business as the local gas station. I'm not going to buy groceries from Amazon because it just seems crazy. Groceries from Amazon? How does that make sense?

Byerly's is an upscale grocery chain in Minneapolis. Very nice carpeted stores, tons of amenities, and the prices to go along with it. For years I shopped at Byerly's religiously. I wasn't a fanatic but I do like the stores very, very much. Anyone who's ever shopped at Byerly's will tell you that the Byerly's brand is synonymous with excellence in the industry. Well Cub built a store that's much closer to my house. Sorry Byerly's but I'm not going to drive through seven traffic lights when only a single light stands between me and Cub Foods. Even if Cub Foods is huge, impersonal, has long lines, and a warehouse feel.

So much for brand loyalty. When the new Cub Foods store opened, Byerly's sales supposedly fell by half a million dollars a month. Byerly's doesn't advertise much and as a result, I sort of forgot about them. The other night I ended up going in to Byerly's -their magazine selection is vastly superior to Cub's- and I was very surprised to see a lot of discounted items. Seems that despite all the sophisticated marketing/branding tools, the four P's are still very important. In this case, Byerly's could work on its "p"romotion variable!! [They're addressing their "p"rice variable.]

The entire idea of Amazon selling groceries reminds me of Amway. I had a friend who was involved in their program but the idea of buying toilet paper from a catalog seemed weird. However, their new offshoot Quixstar is apparently successful. So who knows. There seem to be exceptions to every rule and/or deviance from every theory. Even though I'm fairly young [not close to 40] I might be some kind of exception to the whole online boom. Isn't it nice to go to the grocery store and pick out the things you want to buy? I like going to the store and looking at products. I like people watching. This is part of the experience offered by a store, it's part of their brand, it's part of what the offer. I know that streamlining and superior pricing is part of the buy online transformation of society, but sometimes I go to the store because I want to get out of the house.

Mike

Sure, I can give a concrete example. Many software products have "lite" versions -vs- "pro" versions, with an often significant difference in price. These products are always built from the same codebase but features are eliminated from the less expensive version.

3D Studio Max, by AutoDesk, is a professional grade application ... $2500 and up for each license or "seat". Autodesk also makes a program called Gmax, for game end-users, which is like a lite version of Max. Gmax is free. Both products are built on the same architecture. Both products "look" the same and "work" the same. Gmax does have reduced features, but it is very usable.

Let's say there are three core market segments for a product. A smart company develops one set of infrastructure or "platform", so as to enhance a common look/feel while benefiting from a common workflow. However, each segment has slightly different requirements and thus needs different features. Instead of developing three different products, the company develops three sets of extensions for the platform. These extensions contain different features for each market segment.

In one market segment, tool prices might range from between $100-$1000 per unit. In another segment, prices might range between $1000-$5000 per unit. Perhaps one market needs far more technical support or has more stringent precision/accuracy requirements.

At any rate, because a common platform is required to reduce development expenses, market segment features are implemented as extensions to the platform. You're absolutely right to note the move towards transparency ... which results in the following: despite the fact that each segment is happy to outline their special needs, these segments tend to 1.] regard the actual product differences as minor, 2.] react badly to the "perceived" attempt to charge different people more or less money for the same thing. Even if different brands are used.

It's very tricky indeed. That's why I've been asking about middle ground strategies ... I'm not sure how a brand strategist can create the right architecture in this case.

Customers don't seem to mind the difference between "lite" and "pro". It makes sense to spend less and get fewer features. Customers probably like this option. What doesn't make sense to the customer is the idea that there are three separate brands of "pro", perhaps at different prices, with different features. Even if the customers initially express their desire for this arrangement. Yet this does follow some of the laws of branding.

Separate brands don't make sense to customers in this case, but neither does one application that "purports to do it all". Customers don't appear to like either approach.

One more thing. I know that the separate brands approach works well for some companies. I also understand the the integrated approach can work well too. I think some of my brand strategy confusion results from the opposing camps: focus your brand -vs- line extend your brand. I know a focused brand probably won't scale between markets. Yet a do it all brand won't appeal to anyone.

jennifer rice

They're in UK, Germany, France, China, Canada & Japan. I would have thought they'd be in more countries by now.

Scott Miller

>>> how can an established brand like Amazon continue to set and meet revenue goals without diluting its brand? <<<

Is Amazon in Europe? Australia? Russia? (Russian's love to read.)

jennifer rice

David, I think your suggestion stretches the Amazon brand too far. People know it for online commerce and fulfillment of nonperishable goods. Delivery and perishable items are both quite far from the core brand. But this is an interesting thought experiment: how can an established brand like Amazon continue to set and meet revenue goals without diluting its brand?

jennifer rice

Mike, can you give an example of what you're talking about in your software example?

I'll try to address what I think you're saying: I believe there is a problem if you're using a common architecture, customizing it for different segments and then charging different prices. There's a movement towards transparency; customers can find out if they're paying more than others. If it's a common architecture, then I can't see how you'd create different brands off of it, or be able to justify different prices. The benefit of the architecture is part of the brand; any adaptation or customization should hang under the main brand. (unless, of course, the architecture is not something that's visible or promotable). I think a tangible example would be easier to discuss here... does anyone have one?

david foster

I'm not sure Amazon's problems with the grocery biz have much to do with branding. Probably due to the nature of their delivery system, they are focusing only on non-perishable items. It seems unlikely that people want to segment their grocery shopping into perishable and non-perishable segments.

Thought experiment: Suppose Amazon had acquired, at a bargain price, a company with the ability for local shopping and delivery of *all* grocery items. Would their historical brand identification really get in the way of their success in the grocery biz?

Mike

Interesting column. I really like the "what works for one company won't necessarily work for another" angle. For example, I see marketing advice that says "know thy customer" and I see advice that says "your customers don't know what they want". I see branding advice that says line extensions are bad and I see branding advice that says using brand equity is simply good business sense. Confusion ensues.

Virgin is an example of how a brand can sometimes be abstracted from the products and services. In this sense, Virgin seems like a corporate brand that when attached to a product or service, comes with some kind of built-in differentiation.

This leads me to a question: how can a brand strategist ensure that their brand is extensible? I get the sense that new products often require a highly focused brand strategy. Yet later this focused, specific, narrow brand might not translate to other market segments.

In software for example, one common or centralized architecture might be used to create separate products for several related market segments. In this case, a lot of customers regard "additional brands" as little more than line extensions. This can cause problems or resentment if customers perceive this "tactic" as little more than a method to charge different people different prices for the same thing. Yet the customers would be the first to tell you that their segment *is* different from the other segments you wish to address.

jennifer rice

And to revisit the Weber discussion in the context of innovation: Weber was an innovator in charcoal, but a "me-too" in gas. It would have been better for Weber to innovate a new kind of grill under the Weber brand rather than introduce a gas grill under the same brand. An innovative grill would extend the Weber brand while simultaneously reinforcing it as a leader. More difficult, certainly; but if you're not going to innovate, it's better to limit your brand than to dilute it with me-too products.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name is required. Email address will not be displayed with the comment.)