Why some companies change a successful brand positioning

Recently I got a LinkedIn message from a reader about my Volvo Positioning articles (see Article 1, Article 2, Article 3). The question was: WHY did Volvo make the change to dump its historic positioning around safety?

While I do not have the exact answer on the Volvo case – I have seen in my brand advisory business and previous corporate life a couple of reasons WHY companies change their positioning.

 

The four top reasons I have come across for making big changes in positioning:

1: Boredom internally or with agencies
Many times people inside the organization and their supporting agencies get bored with the brand. They have worked on it for too long, the brand has become their daily reality and when constantly seeing and hearing the same things, it is only natural for people to get bored. Yet, consumers only interact and think about your brand a fraction of the time you spend with it. And that valuable time is needed to keep reminding them about something they know! Unfortunately, most brands fall sooner or later in the boredom trap.

 

2: Significant change in shareholders
New owners are often THE reason to make changes. After all, why would one need NEW leadership if all stays the same? In many ways, shareholders also expect that… when new leadership comes in big things are about to happen… and shares/ profits / … should go up. This is what likely happened to Volvo.

Ford Motor Company offered Volvo Cars for sale in December 2008, after suffering losses that year.  On 28 October 2009, Ford confirmed that, after considering several offers, the preferred buyer of Volvo Cars was Zhejiang Geely Holding Group, the parent of Chinese motor manufacturer Geely Automobile. On 23 December 2009, Ford confirmed the terms of the sale to Geely had been settled. A definitive agreement was signed on 28 March 2010, for $1.8 billion. (source)

 

3: CV builders
Another one to watch for – CV builders have an interest in well… building the CV, and that means… something substantial needs to happen to the company they work for (‘the host’).  Something really substantial is of course to change the positioning of a brand – a big CV ticket item!

 

4: New Marketing Lead
An obvious one – but when companies assign a new marketing lead, they do expect the marketing to change. There is nothing more profound and more interesting to do for a marketer than changing the positioning of a brand.

 

Now that you know some of the key reasons why companies change their positioning, let me explain HOW you can reinforce your positioning.

Keep the brand linked to a category or a ‘job to be done’.
For example, in case of Volvo the category is/was safety. The job the brand does/did was to protect the family in the best possible way.

Of course, over time many other cars have gotten safe as well, but only one brand can be the safest. So, the only job Volvo had to do, is to make sure consumers continue to link the brand Volvo with Safety. This is done through product development with a  focus on safety features, linking the brand to general traffic safety PR campaigns, and promote safety features in marketing … because even though other brands are safe too, the brand Volvo has a perceptual advantage.  And above all… why would Volvo want to waste millions of EURs in over many years build-up brand positioning?

Shift your category or ‘job to be done’ to an adjacent category if your current category is not relevant anymore
For example, analog photo camera’s are not that relevant anymore, but cameras (still) are. So, in this case, your job as a brand owner is to shift the brand from a camera that is analogue to a camera that is digital. There are plenty of examples that this works (Canon, Nikon), and the best being Fujifilm. Fujifilm was able to transition some of their amazing analog film rolls as simulations in their digital products. Fujifilm reinforced what made them big in the first place, just in a different, but adjecent category!

 

In conclusion – whenever you do change your positioning, keep in mind that you do it for the right reasons and that you need to continually build on the brand that you own in the mind of the consumer.  It is not just about “trying something new”, “renewing the essence of the brand” or “exploring the cool edges of the brand”. After all, learning and confirming the perception of a brand  is done best through repetition.

Leuchtturm – what an experience!

I would have not ever thought to buy a real notebook ever again…. but I did! While walking around in a stationary store , many colorful notebooks from Leuchtturm were looking at me.

And I could not resist… why? Because the brand works!

The Leuchttrum brand: a promise made is a promise delivered.

 

 

1. Heritage

Leuchttrum is around since 1917, that is a very long time indeed, and according to the message, they firmly believe that details matter.

 

2. Details make all the difference

Leuchttrum does live up to their belief. This ‘simple’ notebook has the following features:

  • Pagination
  • Labels
  • Page markers (2x)
  • Ink proof paper!
  • Table of content
  • Pocket to store stuff
  • Perforated sheets (8x)
  • Thread bound & acid-free paper

 

3. Focus

Leuchtturm does one thing and one thing very well:  Notebooks. Their product offer is huge.

From the Notebook category, they moved into Planners and a few storage options

This is very different than Moleskine, offering everything from notebooks to bags, to device accessories.

The ‘better’ notebook brand is perceptual of course the brand creating only notebooks! A quick look at the Instagram account will convince you immediately. The books are not only beautiful but also very functional.

The Leuchttrum brand in a nutshell: a promise made is a promise delivered. 

Blu-Ray is Dead, End of a category

The first ever Blu-Ray player to ship was the Samsung DB-P1000. Back in June 2006 there were only a few titles available but the market grew fast – in June 2008 there were more than 2,500 titles available in Australia and the UK,  3,500 in the USA  and Canada.  In Japan, as of July 2010, more than 3,300 titles have been released.

Blu-Ray was a growing category, the standard got the movie studios behind the specs and forced the HD-DVD competition to quit.

Fast forward to February 2019 and the same company, Samsung, the leading OEM simply quits the production of future Blu-Ray players. No more new players mean no incentives to produce content, which of course means that Blu-Ray is dead.

Streaming has taken over and will do so for any other physical medium. The DVD market will follow and so will finally the CD market.

The brand lesson? This is what we wrote in The Only Book You Will Ever Need on Branding  “Brands and product categories are locked. Category relevance drives brand relevance. When the product category is new and growing, your brand grows with it. When your brand is associated with a category that has evolved into something else or your product category is simply no longer relevant, then your brand will die with it.”

I am curious to see if we will see in the future a revival of the format –  similar to what we see in the Turntable – record business with currently over 3000 turntables  on Amazon.

Apple iPhone naming going bananas

The once extremely logical naming structure of the iPhone product range has gone bananas with the iPhone XS Max and iPhone XR

In product naming, it seems to happen a lot – the once so easily understood structures become very complicated. In cars, the same is happening to Mercedes-Benz and in some way to Volkswagen as well. These I will cover in an upcoming next article.

Apple was so simple from the start, in 2007 Apple launched the iPhone. Then it made the decision to add a key feature in the name, the iPhone 3G in 2008.  So far so good.

The 2009 model was an improvement over the 2008 model, but not a revolution. Apple decided to introduce the S marker for these improved (supercharged?) iPhones. The 2009 model was called iPhone 3GS.

This logic served well with the next models:
2010 – iPhone 4
2011 – iPhone 4S
2012 – iPhone 5
2013 – iPhone 5S
2014 – iPhone 6
2015 – iPhone 6S and 6S Plus (the bigger screen variant).
2016 – iPhone 7 and 7 Plus

Back in 2013 Apple tried the iPhone 5C, the model name could be post-rationalized: the C for color – it came in many different colorful covers.

Apple also tried in 2016 the iPhone SE, also here the model name could be post-rationalized to perhaps Slim Edition.  Apple never told consumers the meaning of the name even though consumers always like to put meaning in names, it makes them easier to remember.

But in 2017 it went wrong…. Apple skipped the iPhone 7S convention and went straight to iPhone 8.

Then it introduced the iPhone X (“ten”) as the new full screen most advanced product. It worked  – the iPhone X was the future and sales went well.

But what comes after the future? In the case of Apple, an improved future, the iPhone XS.  So far so good…  but instead of sticking to a successful and commonly understood naming convention Apple decided differently: it introduced the Apple iPhone XS Max, yes this is the previously called Apple iPhone Xs Plus and introduced a new iPhone called the iPhone XR.

At the moment of writing, sales have gone on for some time. It becomes very clear that the naming structure has gone bananas.

First of all the iPhone XS Max is a drag of a name for a consumer product. What comes after Max? The Max II? The MaxS (I hope not!) Why not simply stick with what people already know? There are the iPhone XS and the iPhone XS Plus for the bigger screen variant.

It might have been that the naming team at Apple decided to change to Max as the screen is the biggest of them all. But that would be a mistake as consumers read Product Brand – Identifier – Variant. So, consumers compare the “Max” against the version without the Max, and not against the iPhone XR.

Clearly, the screen is the differentiator if you follow the Apple messaging – but comparing the key messages on Apple.com does not make this very clear either.

Even comparing the screen sizes does not help – it turns out that in terms of Big Screens, the iPhone XR has a BIGGER screen than the iPhone XS. (of course, Apple is after screen resolution between the XS and XR but what you don’t tell, people don’t know)

 

In fact when going through the comparison on https://www.apple.com/iphone/compare/ you will find it very difficult to spot real differences between the XS and the XR. And when there are differences it is not clear how they impact you as a future user.

So the question becomes obvious – what is Apple trying to achieve with the iPhone XR? Is the confusion this product obviously is causing (through bad naming and communication) worth the effort?

Could Apple do without the product? I think so, the less the better. That is what the market has told Apple before, first with the iPhone 5C and another time with the iPhone SE. Now the market will tell again that there is no space for an iPhone above, beyond or below the core range of products.

The real question is: how will Apple fix the naming structure going forward?

Brand appeal among student

During the past couple of months, I had the opportunity to teach Global Branding to second-year international students at Avans University of Applied Sciences in the Netherlands. A great opportunity to test the appeal of some of the leading brands of today.

It is always fascinating to see how different age groups react to brands. It is especially interesting talking to students in their 20’s as they will become the generation of tomorrow.

One valuable lesson I learned while being employed at Nokia is that for brands to be successful in the future, they will need to be able to pass from one generation to another.

When looking at some of the leading brands of today according to, e.g. the Interband top 100 and using this group of students as a sample, there are some interesting observations. I did a similar test when teaching in 2016, and interestingly the ‘winning’ brands have become stronger.

In German cars, students want the brand Audi a lot more than BMW or Mercedes-Benz. In Interbrand Top 100, Audi is #42, BMW #13, Mercedes-Benz #8. In other words, the student appeal is in reversed order. This result is similar to 2016.

In social networks Facebook clearly had its peak, the sample group uses Facebook only to browse posts, not to engage or post updates. The reason? Instagram is more appealing because it is clear what it is all about. In Interbrand Top 100 Facebook is #9 (Instagram is not listed as a separate brand). The result is following the trend of 2016, with the exception that back then, some students were still very active on Facebook.

Coca-Cola(#5 in Interbrand) is hardly consumed, in fact, just a small percentage is drinking any of the Coca-Cola variants once per week … the alternative? Water! This is very much in line with the global trend of the decline of the soda category and growth of water.

In productivity apps, it is clear that Evernotehas trouble – just a very few students were using Evernote or had heard about it. In the Apple AppStore, Evernote is also slowly declining in the ranks.

What is happening? 

Some of the brands listed have perhaps grown too much with their audience, think BMW, Mercedes-Benz and Facebook and lost appeal with the younger generation. While Evernote has lost focus and evolved from taking notes to an all-round capture everything and anything tool and Coca-Cola is clearly in the middle of fighting the perception of soda drinks.

The lesson?

Brand appeal is not forever – even for the remarkable brands discussed in this post the battle between Brand identity (what the brand desires to stand for) and the Brand Image (how it is perceived) remains one of constant fine-tuning.

Happy Socks

Happy Socks is not anymore just socks, it is underwear and now as well swimwear. How a great brand idea to turn everyday accessories into happy designed colorful items gets limited by the name.

I am a huge fan of the Swedish brand Happy Socks. In fact, my closet is full of their happy colorful socks 🙂 Happy Socks did something remarkable – 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 band name that boozes energy in a boring category works well. Their socks are truly happy compared to the traditional socks – and don’t we all need a little bit more happiness once in a while?

So, I understand that at the Happy Socks Headquarters the owners must have been thinking…. let’s replicate the success to other closely related categories like underwear. Now, I do have a couple of Happy Socks underwear items too, and it is just weird. I mean, a logo that reads Happy Socks on underwear is not the best possible combination.

 

Recently I got an email about a new line of products: swimwear. Yes, seriously – think about the following conversation:
-A- You wear cool swimwear!
-B- Thanks!
-A- What is it?
-B- Happy socks
-A- Sorry?

Of course, the core idea of the brand can be replicated to other categories as well – but in case of Happy Socks, the core brand name will forever be limiting.

In this case there are two options:
1. Stick with the category of socks – and take more market share
2. Bring the other products under a different brand

 

Do you recognise the challenges of your company in this article? Do you need clarity in brand architecture and optimising it for long term cross-sell and up-sell? Just get in touch with me. 

Be decent

People perceive their favorite brands as trusted friends and react accordingly when a brand falls short of their expectations or promises. Think of a brand as a decent human being and act like one.

Here in the Netherlands one of the biggest banks has an issue with decency. Now for months, we hear ‘how Rabobank is growing a better world together’. Rabobank even announced a three-year programme to kick-start the transition to a more sustainable food and agricultural sector.

Perhaps unfortunately for Rabobank, two things have happened in society:

  1. People are in general more suspicious about what big companies are saying and especially in the banking industry.
  2. As Rabobank correctly has identified, sustainable food and agriculture have become more and more critical to choices people make.

The more relevant and important your brand or cause is to people, the more your actions will get noticed – and get reactions.

It took only a little bit of time for people to figure out where Rabobank invests. Turns out ‘6.8 out of the 8.8 billion that Dutch banks invest in ‘very animal-unfriendly meat industry’ comes from the bank that advocates a ‘better world.’

In our connected world, both positive and negative messages distribute faster and wider than ever before. As a result, the Dutch now know that the Rabobank is not what they advocate. They also know it is not only the Rabobank that has this issue, but many more banks – there are only a few without issues.

Suddenly consumers are getting aware of a new category in banking – ‘the animal friendly banks,’ opening the doors for the real sustainable banking brands who smartly so jump on the wagon and educate consumers about the wrong investments traditional banks make.

And how is the Rabobank responding? Just as how people expect from the big institutions: without taking real responsibility. Rabobank does not think of their brand as a decent human being and does not act like one. Only when a brand does, people will acknowledge the mistake and might forgive you for it.

Will the biggest change for Diet Coke in 35 years make a difference or is it lipstick on a pig?

A very exciting start of 2018 for Coca-Cola Company in America: the successful Coke Diet brand is renewed after 35(!) years.

Coca-Cola Company calls it a relaunch of the brand. The cans are smaller, have a fresh new design, and there are four extra flavors.

The renewal and modernization of the Diet Coke brand is done to attract a new generation of drinkers and offers millions of current fans a new look and more flavors.

Rafael Acevedo, the North America group director for Diet Coke, further explains that “we’re modernizing what has made Diet Coke so special for a new generation. The same unapologetic confidence still comes through, and the same great Diet Coke taste people love is here to stay, but we’re making the brand more relatable and more authentic.”

A two-year study has shown that younger Americans have an affinity for “big, yet refreshing and great-tasting flavors” in their favorite foods and beverages – from hoppy craft beers to spicy sauces.

So far everything goes according to the plan. Coca-Cola Company sees an opportunity to increase their share in the category of diet cola: welcoming new drinkers with new flavors and getting current drinkers to try new flavors.

The problem, however, is that whole soda category in America is in decline for the last 12 years. In 2017 the sales were similar to 1985 (!). These days, consumers know better: sugar is not good for you. This insight causes the whole category to decline.

You would think the war against sugar would give the sales of diet products a push – the fewer calories, the better – but it is not happening. Why? Consumers are getting more and more skeptical about artificial sweeteners, particularly aspartame. In fact, the skepticism is so bad, that currently, the high-sugar variants of Coca-Cola and Pepsi the number 1 and 2 most sold cola products.

It did not help that Coca-Cola in 2012 began to defend the use of sweeteners in newspapers. This way you achieve exactly the opposite effect: consumers will trust you even less.

And it becomes tough when your biggest competitor starts to make a point in advertising and on the can that aspartame is excluded from their Diet line.

Consumers move to other categories of drinks and the big winners in the fight for healthy drinks are not the Diet brands, but the water brands, including Dasani, a brand of Coca-Cola Company.

I expect that the new design and the new flavors will undoubtedly benefit the Diet Coke brand in the short term. However, in the long term it is “lipstick on a pig”. The trend against unnatural has started, and not just in the soft drink category. Also in the food category the organic market in America has grown from 1B USD in 1990 to 40B USD in 2017. This is a trend that will affect many categories.

In a declining category, a brand has to take what it can take while the category is still selling, but as a company, you will have to focus on new categories. And this is what Coca-Cola Company does very well, as we see with their new brand for ice tea: Fuze Tea, but more initiatives are needed to get back in growth mode.

Dutch supermarket brand Albert Heijn leaves the German market

Albert Heijn is a Dutch supermarket chain and part of the Ahold Delhaize food retail group. Ahold Delhaize operates in 11 countries with 21 brands.

Mid-2011 Ahold announced to open Albert Heijn (in the Netherlands abbreviated to AH) stores in Germany. The retail group naturally has a healthy growth strategy to expand in adjacent markets and beyond.

The retail group envisioned that the “AH To Go” convenience store formula could serve as a spearhead for growth in Germany. It has not worked: the doors of the stores in Germany will close as of 1 April 2018.

Very unfortunate, of course, because anyone who has ever entered one of the “AH to Go” stores in the Netherlands can conclude how sophisticated these stores are: a combination of the right products, location, and convenience.

The supermarket chain says that the stores did show ‘modest growth’, but that there were not enough possibilities to continue.

I have trouble believing that the “To Go” formula does not catch on in Germany. Even Nielsen sees that “convenience and drug stores” have strong growth potential in traditional brick-and-mortar stores.

Going forward, the ‘Albert Heijn’ brand is only available in the Netherlands, Belgium, and Curaçao. That, personally, seems sufficient to me. Because let’s be honest: the name Albert Heijn simply does not go well in non-Dutch speaking areas. Let alone the abbreviation “AH”, “Ahhhh To Go”? Don’t think so.

The photo above this article is from the opening of Albert Heijn in Köln (Neumarkt). Now, imagine for a moment that the picture below is from the opening of the German convenience store chain “Nahkauf” in Amsterdam, London or Partis. Is that going to be successful? I do not think so.

In Germany, the brand Nahkauf stands for shops in small villages with attention to fresh and locally produced products.

Also in the Netherlands, that concept would obviously be good, but it would never work with the Nahkauf brand. Similarly, you cannot expect the name Albert Heijn to work outside the Netherlands. You cannot be successful with a bad name, not even in an emerging, growing category. Even with all the knowledge and expertise available within the retail group, you will not be able to pull it off.

It seems to me time for a new attempt in Germany, but this time under a different brand name: a name that can be pronounced by anyone in the market without problems.

A new way to be even closer to your customers

We all know that humans are emotional beings. In every decision we make emotions play the decisive role.

Understanding emotions are therefore fundamental to be even closer to your customers because once customers are emotionally connected, they stay loyal.

Emotions drive loyalty – Loyalty drives profits.

Brands therefore continuously try to find new ways to be even closer to prospects and buyers, because, once a brand is in the heart and mind of buyers, it will affect purchases and increase publicity through word of mouth.

What if brands were able to accurately understand how consumers feel emotionally about their content, and be able to create content based on desired emotional responses?

This is the holy grail of advertising, and it is here today. With Artificial Emotional Intelligence, brands can create that deeper emotional connection.

Once brands accurately understand how consumers emotionally react to content it will change the way how we become even closer to our customers. Imagine being able to:

  • optimise text in headlines, websites, chats, PR etc to fit the desired emotion of the brand
  • perform emotional analysis on social media and influencers to finally see the true emotional impact of content and go far beyond sentiment analysis
  • Place digital ads only in emotionally suitable pages on websites – no more ads showing up in the wrong places
  • Text to speech engines that become more human
  • And many more!

This is not science fiction. Using Artificial Emotional Intelligence you can be even closer to your customers today.  

Take a look at the BMW slogan. Which slogan will evoke the right emotional reaction in the reader? The Ultimate Driving Machine or The Best Driving Machine?

The brand character of BMW is that of the Achiever archetype, thus fitting well with the evoked emotion of Amazement. Yes, BMW made the right decision.

As an international brand advisor, I am fortunate to work with brands around the globe. I know that many brands struggle to be even closer to customers. Understanding the emotional reaction of customers to content even prior publication sounds magical. 

With the company we have done what nobody else has been able to do before: we accurately forecast the emotional reaction of customers to text and do that in many languages.

Using EMRAYS brands can finally start connecting on an emotional level and be closer to their customers. Read more at emrays.com or contact me for a demo.

Originally published on 15 November in LinkedIn.

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