Apple understands how to do (not) discounts

Black Friday is the day many brands offer discounts. Strong brands, like Apple, never discount the core products.

For companies, sales discounts are a great way to boost short- term sales. It is an approach with guaranteed success. Even people who do not need the product right away might buy because of the great discount. Like with everything, there is a flip side to discounts.

1. Postponing purchases
Consider carefully discounts for products that are not fast- moving consumer goods but substantial investments for consumers. Consumers can often wait to make the purchase when it is not highly necessary. It is not uncommon for people to sleep on the old bed a few months longer and wait for a good discount.

2. Creation of artificial purchase cycles
Some companies run discounts during specific times of the year. When consumers know about the cycle, they will wait for the following discount round. The brand has unwillingly created an artificial purchase cycle.

FujiFilm is a company with artificial purchase cycles. The company runs pretty steep discounts on its cameras and lenses in spring, summer, and winter. People who are in the FujiFilm camp make purchase decisions three times per year. If the desired products are not on sale in the current round, chances are the dream kit will show up in the next round.

3. Abandonment of retail prices
Discounts reduce the suggested retail sales prices of products in the mind of the consumer. Once buyers have seen a printer in a special offer for US$69, they won’t pay the US$99 suggested retail price ever again. Getting the product cheaper has now become a real possibility. The discount helped the short-term sales but made the brand and product positioning weaker.

 

The alternative to discounts
The best alternative to discounts is to provide perks around the core product. For example, a brand known for its leading Music composition software should not discount the core product, the What of the brand. Instead, it should provide extra perks around the core product like giving a plug-in or sound bank for free.

Apple follows this strategy. The company hardly ever gives direct discounts but turns discounts into Apple Gift cards. Of course, the Gift Cards are to be used in the Apple Stores.

Perks are a great way to give people ‘a good deal’ while in their minds, the value perception of the core product has not changed.

——
This post is taken from my new book Win With What – the first category-led growth book.

Icelandverse

Iceland’s parody on Metaverse – a new tourism video sparking thought about virtual versus real life.

Zuckerberg told the world “the metaverse’s defining quality is the feeling of presence … like you’re there with other people.”

The Iceland Tourism board made a brilliant move by positioning the country Iceland as a complete opposite of a virtual reality world envisioned by Zuckerberg.  Icelandverse is ”a place of “enhanced actual reality without silly looking headsets.”

 

 

It is good that brands (countries are brands too!) position themselves by presenting an alternative or an opposite. We humans still need alternatives. If you are not all-in Metaverse, then there is an alternative, the Icelandverse. If you do not like Coca-Cola, there is Pepsi. Alternatives and opposites help people to make a choice.

 

Facebook going Meta(verse)

Facebook is making a smart move – rebranding the corporate brand to Meta, linking itself directly to Metaverse  while allowing each of the product brands to flourish.

 

Facebook follows the strategy of Alphabet Inc. Back in 2015, Google implemented the critical principle of brand building: expand your business, not your brand. Google Inc changed its corporate brand from Google to Alphabet – to undo the Google link: “the whole point is that Alphabet companies should have independence and develop their own brands.

Facebook Company was struggling in a similar way, because of the direct link with Facebook the product. The company even made the mistake to bring the company brand Facebook into the UI of Instagram and WhatsApp. Visually showing the Facebook brand impacted clarity of all brands involved- imagine the screens with ‘From Microsoft’ or ‘From Google’.

 

Not only did the clarity of Instagram and WhatsApp start to dilute, but also that of Facebook and Facebook Company. If a brand tries to be everything to everybody, it will ultimately become nothing to no one.

So on the 28th of October 2021, Facebook “did an Alphabet” – and changed the company name from Facebook Company to Meta. A brilliant move and name. By disconnecting the Company from Facebook it gives all products room to expand.  The Meta products:

The name Meta is directly linked to Metaverse – the virtual reality-based successor to the Internet. Perceptually Meta and Metaverse might become the same.

“Metaverse was originally coined in Neal Stephenson’s 1992 science fiction novel Snow Crash, where humans, as avatars, interact with each other and software agents, in a three-dimensional virtual space that uses the metaphor of the real world. Stephenson used the term to describe a virtual reality-based successor to the Internet.” (wikipedia)

 

Under the new corporate brand Meta the company can align all product brands and efforts under the strong mission “help to bring the metaverse to life“. The mission can now be executed with focus and without diluting the Facebook product brand or the other product brands.

 

Mercedes-Benz transitioning to electric

Mercedes-Benz moves into electric using the ‘half-pregnant’ EQ sub-brand approach. The company misses  the point that buyers first and foremost need portfolio clarity.

Whenever there are ground-breaking developments, the incumbent businesses need to watch out. Category shifting breakthroughs are most of the time developed by new companies. They can be so impactful that complete new categories are established and make today’s brands look old and obsolete. Bad news for existing brands!

In the past, we saw it was Nokia versus iPhone, and today it is in the car business Tesla versus the rest. It was not Mercedes-Benz who established the new electric car category globally – it was Tesla. Interestingly, it was Karl Benz who invented the first gas-powered automobile already in 1886. Quite a few years later, in 1901, the Daimler Motors Corporation began selling cars.

Often when a category shift happens, and your brand represents or is a significant player in the old category, the brand will eventually follow the faith of the category. As a brand owner, you need to do everything you can to prevent a downfall.

At Mercedes-Benz, they saw the change to electric coming as well. The company was clearly not ready, and it took time to adapt. For the company, it was vital to continue selling the old gasoline cars to not go out of business. The ‘half pregnant’ business strategy translates directly to the product portfolio strategy. The current Mercedes-Benz portfolio visualizes a company in transition, and it is far from the Mercedez-Benz slogan “The Best or Nothing.”

Look at the entire portfolio as presented on https://www.mercedes-benz.com/en/ and ask yourself:

    • what is the car type? (small family, business, SUV, etc.)
    • what is the ranking of the car inside the overall portfolio (good, better, best)
    • what are the electric cars
    • what do all the letters and combinations of letters mean?

None of it is clear.

Unclear portfolio

 

To make things worse, Mercedes-Benz applied a strange form of sub & endorsed branding with the electric range.

Headlines in car magazines said “Mercedes-Benz’s EQ Sub-Brand Aims to Launch a New Electric Model Every Year” (Car and Driver in 2016) or just as recently as 14 Oct 2021 “Mercedes EQ subbrand to launch in U.S. with electric variant of S-Class sedan” (Automotive News).

What happened at the marketing department at the Mercedes-Benz headquarters? A sub-brand, really? Master-brands and sub-brands are all marketing talk, and they do not exist in the buyer’s mind. People are not shopping for sub-brands or master-brands. They shop for brands and might look for a product within a range.

The basic rule is that people think and buy in the following order:

Brand -> Product range -> Model
not Brand –> Brand -> Product range or Model

It is Mercedes-Benz (brand) -> EQ (range) -> Model
and not ‘Model by Range’ as the Mercedes-Benz Me Lifestyle magazine wants the reader to believe.

So what could Mercedes-Benz have done differently? There would have been two ways to transition the company Mercedes-Benz into the new category or electric.

 

1. Conquer and Switch
The  Geely Holding /  Volvo Corporation strategy. The company repurposed the Polestar brand for just electric cars to compete (conquer) in the electric car segment, while Volvo can switch to electric at its own pace.  For the Mercedes-Benz Company, a new brand (not EQ!) would take on electric while Mercedes-Benz could transition at its own pace.

 

2. Fix the portfolio outside-in and Switch
Let’s face it; the current portfolio is a complete mess with cars inside and outside classes (ranges). This does not help navigate the portfolio and  does not help buyers  relate or understand the order in the portfolio.

Mercedes-Benz should first create ranges that make sense to the buyer or already have meaning, like the A, B, C, G, M, S and V class ranges.  Then slot all cars inside the ranges. No exceptions.

The GLB would move into the G class, and so would the electric EQB. To create clarity, the car model would be renamed GLB EQ.

Then the brand can Switch at its own pace into electric, eventually letting go of all the gasoline models.

Inside-out portfolio

 

Outside-in portfolio

Mercedes-Benz in executing a Switch strategy without clarifying the portfolio to buyers. At this stage option 2 is  the  route to go. Does it come without risk?  Not at all.  It is all about the ‘old’ gasoline car brands versus the ‘new’ electric car brands in a category shift. To compete in electric,  Mercedes-Benz will need to be more convincing in the buyer’s mind than the perceived leader in electric.  This means that when a consumer is in the market for an electric luxury SUV, the Tesla Model X has the leadership perception in terms of the technology over the Mercedes-Benz EQC. Internally there will be a division between those who work on the cool new models and those who need to maintain the old – till the last old gasoline car is sold.

Generally the Conquer strategy is the safest and cleanest route to execute company transition into electric.  The Switch strategy involves  perception risks and can be complicated to execute internally.

Happy Socks is going slowly back to just selling Socks

Happy Socks is going back to its core of selling socks. The website is restructured around Socks. The Happy Socks Underwear is gone.

The brand’s core idea, to bring happiness and color to every corner of the world, can be replicated to other categories as well – but in the case of Happy Socks, the brand name will forever be limiting. 

Back in 2018, I wrote a post discussing the brand stretch of Happy Socks into underwear, swimming gear, and much more. I did not see a future for Happy Socks Underwear, Happy Socks Swimsuits, or Happy Socks Pool Sliders.  Strategically I saw two options for the Happy Socks company:

  1. Stick with the category of socks – and take more market share
  2. Bring the other products under a different brand

It seems that Happy Socks company is moving into the direction of option 1. The website is reworked, and the homepage has a clear focus on Socks.

 

The web menu makes the distinction even more clear. It is all about Socks and Not Socks.

The Not Socks section cover face masks and swimming gear. By positioning the products clearly as “Not Socks” it feels these products are more like accessories, not part of the brand’s core. This positioning gives Happy Socks Company more freedom to make changes to the portfolio. For example, if a line does not work, the company can easily replace it without hurting the core Socks offering. Of course, it is still weird to walk around in Happy Socks Swim shorts.

But how did the company get here?

Happy Socks got famous for its colorful socks. When the company was founded in 2008, most of the socks in the market were plain. The founders decided to change that and bring more color and design to our feet. Something remarkable happened: they made a boring accessory item (socks) into a hip fashion statement and succeeded.

The mix of focus on colorful socks, decent quality, and a brand name that boozes energy in a boring category worked well. Happy Socks are truly happy compared to traditional socks.
In 2017 the company sold most of the shares to a private equity firm – usually one of the warning signs that growth needs to be accelerated. The shareholders must have been thinking: the company knows about color and design, there are contracts with factories that can produce socks. Why not do some clothing? Happy Socks quickly expanded the product portfolio to underwear and swimwear.

Today the company seems to be getting more and more back to its core: socks. By positioning everything else as “Not Socks” it allows for freedom to experiment with the portfolio – without hurting the core.

ZOOM the company that delivers happiness

Some of my readers know that I am busy with a brand new book. At this stage, most of the book is written, but I continue my research. One of the companies I recently looked at was  ZOOM and specifically the About ZOOM web pages. My aim: to figure out what ZOOM stands for both inside and outside the company.

It was honestly a shock to read the content that defines ZOOM. In short: the About ZOOM page is a collection of empty and not differentiating brand & strategy blurbs. 

Let’s take a look at each of the elements of the About page:

#1. What is the Promise of ZOOM?ZOOM delivers happiness, every single day.

Yes, you are reading this right. Think about that the next time you are in a ZOOM call or get communications from ZOOM.

 

#2. What is the ZOOM culture?

To deliver on the ZOOM promise of Delivering Happiness, the company simply defined its culture as Delivering happiness – how thoughtful, differentiating and unique..

 

#3. How is the promise of ZOOM delivered?

Through one value: Care. Whatever ZOOM employees do for Community, Customers, Company, Teammates, and Selves: they Care.

I am not sure how just “Care” can be differentiating. Values should give clear guidance, like a compass, how decisions are made, actions are performed, and how employees communicate internally and externally. The company values should be so strong and unique to the company that users experience them every single time  when interacting with the brand.

So, what is ZOOM all about?

By now, you might be thinking, is ZOOM a new-age type of Happiness company, with dedicated employees delivering Happiness every day, and who are delivering this amazing Promise in a caring way.

Now, just hang on for a minute because the ZOOM Mission and Vision turn it all in a different direction.

 

#4 The Mission and Vision of ZOOM

The Mission and Vision seem an afterthought or leftover from previous strategy work.

The keywords of the previous sections Delivering Happiness and Care are replaced by Frictionless, Secure, Empowering, and  Accomplishing more.

Do you feel the difference? It is huge – when employees are focused on, e.g., empowering and accomplishing more, they are in a very different state of mind than when they Care or Deliver Happiness.

On the Mission and the Security element specifically: during the initial part of the Corona crisis, ZOOM got hit with severe security flaws, and even today, there are still privacy and security woes. Tom’s Guide keeps an up-to-date list here

 

#5 About ZOOM

The website continues with a small section, “About ZOOM” which again steers the company’s core into a different direction. In this section, ZOOM is there to help you express ideas, connect to others, and build toward a future limited only by your imagination.

 

Simple suggestions for improvement 

What is wrong with all of this with the stock-listed company ZOOMPretty much everything!

Let’s clarify the ZOOM brand in a straightforward way with just a few steps. 

#1 Firmly claim a position
It is vital to claim a position – only by doing so can people know precisely the difference between your brand and others in terms of what it concretely is and does.

Using ZOOM own words:
– ZOOM, the only frictionless video conferencing app
– ZOOM, the innovation standard in video conferencing

#2 Define the company character
What type of company is ZOOM? How do people work, decide and take action? This is not what we want the company to be, but what the culture is all about. Based on the direction given by ZOOM, I use the Caregiver character as an example. The Caregiver’s strategy is to do things for others, intending to help others. Compassion and Generosity are essential.

#3 Define brand values that steer 
Taking the Company Character and Care concept, we can define strong values, such as Thoughtful, Humane, Compassionate. These are all adjectives and are easy to use to steer activities. I can, for example, say, “this copy text feels thoughtful, humane, and compassionate. It is on ZOOM brand.” The values are also not the opposite or conflicting, which makes assessing actions focussed.

#4 Define the Belief
The Belief is rooted in the Company’s Character. As a belief, it is shared among all employees and is the foundation to deliver every single day the promise.
For example: At ZOOM we believe that the greatest, most sustainable happiness comes from making others happy.

#4 Define the promise
The Promise is also routed in the Company Character and delivered by employees to each other and external.
For example: At ZOOM we promise is to be good and do good

 

Summing at all up

The brand can be summed up in a few lines. While I did not include a mission or vision it feels more coherent in steering the brand in actions, decisions, products, and communications.

  • ZOOM is the only frictionless video conferencing app
  • Audience:  Community, Customers, Companies, Teammates, and Selves
  • Promise to each other and customers: to be good and do good
  • The promise is delivered through the values: Thoughtful, Humane, Compassionate
  • And ZOOM can make it happen because it firmly beliefs that the greatest, most sustainable happiness comes from making others happy.

 

Photo by Arjohn Janroe Queral on Unsplash

And so much more…

It is the Apple WorldWideDeveloperConference time of year again! Traditionally the moment that Apple showcases significant changes to all their operating systems: macOS, iOS, iPadOS, WatchOS.

This year was a mixed bag. The announcements were mostly a list of Apple app updates. Clearly, Apple is a fine-tuning mode and has difficulties coming up with breakthrough features in the current platforms and usage scenarios.

Engadget stated for MacOS “With macOS Monterey, Apple is trying to polish its desktop operating system even further.”

What is worrying is that on the Apple.com front page there is just a sheer amount of features listed under every OS.

iOS 15

Connect with family and friends while watching and listening together in SharePlay. Be more present in the moment with Focus. Explore the world in unprecedented detail with a reimagined Maps. And use powerful on‑device intelligence to do more with iPhone than ever before.

iPadOS 15 update

Do more things even more easily with powerful new multitasking tools. Create notes from any app using Quick Note. Add new widgets that let you see information at a glance right on your Home Screen. And enjoy many of the great features also coming to iOS 15.

MacOS Monterey

Share your screen with friends and coworkers in entirely new ways with SharePlay. Explore a more immersive, customizable, and streamlined Safari. And with Universal Control, you can now work seamlessly between your Mac and iPad.

Watch OS8

Give your Portrait mode photos from iPhone a starring role on a dynamic new watch face. Unlock your door from your wrist with home keys. Work out with tai chi and Pilates. And center yourself with new Mindfulness experiences.

Now – tell me quickly….
What is the key reason to upgrade your iPhone, iPad, Mac, or Watch?
or What is iOS 15, iPadOS15, Mac Monterey of Watch OS 8?

I know that the answer is not going to be a crisp one. Apple is not communicating the one reason to get completely excited about any of the updates, or the one reason you would want to have the updates running on your devices today.

Even when categories mature consumers need incentives to upgrade.  While difficult it is better to pick that One Feature to steer all communications and PR than having massive feature lists leaving consumers and media wondering where to focus on or determining which one is really important.

Volvo Corporation attacks electric with the Polestar brand

The car category is already for some time in turmoil because of the change to electric. On top of that, in the conventional car category the Volvo brand is struggling because of changes in positioning. The owner of Volvo Corporation, Geely Holding has determined that Polestar will be the brand to compete in electric. Is it the right move?

The change to electric genuine for car owners and drivers as they need to change the way they think about driving and “refueling” cars. Consumers experience, therefore, electric cars as a different category. There are conventional cars, and then there are electric cars – both require a different way to interact with driving and moving you from A to B.

When something so impactful happens in any category, we will likely experience a change of brands. There will be brands that only focus on the “new” electric category. There will be existing brands trying to extend from conventional to the electric category. When a category changes so profound, some of the car brands of today will need to make space for the electric car brands of tomorrow.

The impact to the current brand owners has everything to do with whether the existing car brands can compete with electric cars – at least on a level to be on par with the perceived leader in the category. In other words, if you are in the market for an electric luxury SUV, then it is easy to go for the Tesla Model X because the perception is that it is the best in electric and in-car technology. The Mercedes-Benz EQC would come close, but it needs to deliver more to change the perception of Mercedes-Benz and that of the perceived leader Tesla.

Volvo is executing two different strategies to conquer the electric car category. First, the company is moving the brand Volvo from a conventional to an electric car brand. At the same time, Volvo Corporation is following a conquer strategy with their new brand Polestar. Polestar is a standalone brand to focuses on electric cars.

The Polestar brand is not new to Volvo. It used the brand in the past for Performance upgrades of their vehicles. The real Volvo enthusiasts will know the brand with the desired perception of performance, technical advancements, etc. Unless you are a Volvo enthusiast, the Polestar brand will be new. As a bonus, the Polestar name has a nice Nordic / Scandinavian ring to it. Volvo bought Polestar in 2015. In 2017 Volvo Cars and their owner Geely Holding announced that Polestar would become a standalone to focus on electric cars.

Applying the earlier discussed Flip-test would indicate that Geely Holding made the right call to bet on two horses.

When we apply the Flip-test:

Current: Volvo gasoline cars
Extension: Volvo electric cars

Flip it!

Current: Tesla electric cars
Extension: Tesla gasoline cars

Does it make sense? Perhaps not so much. Geely Holding does the right thing to compete in electric with the new brand Polestar while not giving up on Volvo. It would be a shame if the Volvo brand will not make the transition to electric in the minds of buyers. The success of making the transition will depend on the number of cars at different price points from new electric car brands.

Personally I am very happy to see Volvo to take action. The brand has been in turmoil for years. I have written about Volvo in the  Volvo Positioning series Part 1Part 2Part 3  and a Reflection why successful companies change their positioning.

Credibility is lost when you do not live up to what you stand for

When you repeatedly go against your mission and values, you lose credibility, and your position is in danger. The audience will start to drift – first, slowly towards other platforms. Drifting will accelerate once a critical mass through worth of mouth is reached. Then there is no way back. 

Brands are like people.

If you for example do not like how a friend behaves, you can simply decide to no longer hang out with your friend. The same goes for brands. If a brand behaves terribly, you can decide to stop engaging, buying, or using that particular brand.

It gets tricky when your friend says that living according to noble values is essential and even points the noble way of living out to others. It comes then as an unpleasant surprise when you learn that your friend is everything but living up those dearly hold and communicated values. We get confused because the friend’s behavior does not match the perception we have about the person. The person is no longer credible.  If the friendship continues, it will be an unhealthy one based on disbelief and issues with trust. If a brand stops living the values, the same reaction of disbelief and distrust appears. And over time, we will look for alternatives.

Today I encountered a trust issue with YouTube, the brand that has brought video sharing to the masses. YouTube helped to accelerate the growth of humans by bringing immense knowledge to the fingertips of everyone.

Already for some time, YouTube is actively censoring freedom of speech by removing videos or channels about medical information, science, scientists, specific news channels, or simply videos containing an opinion (how scientific it might be) that is going against a set of guidelines, therefore stopping the debate and opportunity for humans to learn.

Earlier this morning, I decided to take a look at the About YouTube page (link, archive ) to understand what the company is all about and the brand credibility with me.

The first thing you encounter on the about page is a clear mission statement. Unfortunately, YouTube is actually actively going against their own mission. For YouTube not everyone is the same, some deserve to  have a voice, while others unfortunately do not.

When we look at the values we see a similar pattern.

The Freedom of Expression is striking:

We believe people should be able to speak freely, share opinions, foster open dialogue, and that creative freedom leads to new voices, formats and possibilities.

If YouTube in the last year has shown one thing it is that it is not a real advocate of Freedom of Expression.

I have therefore one simple question for YouTube:

—-
Dear YouTube,

You have given me a lot of opportunities to enrich my knowledge on virtually any topic. I thank you for that.

Unfortunately, I am distrusting you and as your friend I see two options going forward:

  1. You live up to your values,
  2. You update the values to reflect your behaviour.

Either way is acceptable because strong brands provide clarity regarding what they stand for and consistency in execution using company values as a steering compass. Only this way, they remain credible.

Make your choice.

—-

Photo by Adam Fejes from Pexels

Reddit Nailed It

Jep… Reddit nailed it with the first-ever JPG(!) SuperBowl Commercial

The actual message – that one slider – was nicely wrapped in a short reel controlling placement and impact. The total commercial was 5 seconds only. 

Reddit did a great job, and with only 5 seconds of airtime, the commercial generated a maximum impact. Those interested in learning what the message actually said had to go online to find out, and once online, the step to visit the Reddit platform to learn what it is all about is easy.  

In essence, Reddit tells us that “powerful things happen when people rally around something they really care about”. The old Nokia slogan “Connecting People” is still alive and well. This time, according to Reddit, the platform to connect is their online platform.  

The 5 second commercial:

The key message (JPG):

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