Mercedes-Benz Perfumes was launched in 2012 as “the new star of the perfume world”. Ten years later, the product line is still around.
The Mercedes-Benz Perfumes product line is according to Mercedes-Benz an obvious product range expansion because defined style and exquisite design are central to Mercedes-Benz as a leader within the design industry worldwide.
Design and style are not only essential ingredients for the world of luxury cars, it is a natural step to extend this expertise into other luxury categories.”
Creating luxury products beyond the cars has been a natural evolution, starting with Mercedes-Benz eyewear, leather accessories and other luxury goods. In recent years, the brand has naturally gained visibility and credibility in the most exciting, joyful and vibrant industry: fashion.
The Mercedes-Benz Perfumes are available for Him, Her and Home. The parfum product line follows eyewear, leather accessories and other “luxury goods”.
So far so good!
The idea behind launching all these extensions is of course that Mercedes-Benz owners would finally have an all-encompassing Mercedes-Benz lifestyle. Drink coffee in a Mercedes-Benz cup, spray some Mercedes-Benz perfume, leave home in a Mercedes-Benz Bodywarmer, drive in the Mercedes-Benz, call with an iPhone covered in a nice Mercedes-Benz cover and when it rains use the Mercedes-Benz umbrella. This is the Mercedes-Benz life.
The question is who is living the encompassing Mercedes-Benz brand life? And who wants to live life like this?
Still the Instagram account of the Mercedes Benz Parfums has 46.8K followers, not a lot compared to the fashion brands. The Facebook page has 1.36M followers and almost the same amount of likes.
I cannot help thinking that this conversation feels weird for anyone linking the brand Mercedes-Benz with cars “Hey want kind of perfume are you wearing?” “Mercedes-Benz”. And this is the key: if you have a strong connection with the Mercedes Benz brand as a car brand (in Europe traditionally the car of taxi drivers), it will be much harder to accept the brand in another space. If, however, there is no strong connection, the brand will be more accepted, like in the case of Caterpillar, the brand for tough equipment and shoes.
To recap: Birkenstock is known for its quality sandals and shoes, and Google confirms its strong positioning. Yet the company wants to be known for: sandals, shoes, socks, bags, cosmetics (creams, cleansing, oils) and belts, mattresses, frames, beds, and pillows.
Birkenstock also saw the opportunity in sleep systems and connected the world of a Shoe with Sleeping. In their words:
“Taking a great idea one step further: Just like the original BIRKENSTOCK footbed, our anatomically designed sleep systems also adapt to the shape of your body. This enables our mattresses, slatted frames and beds to support and ease the strain on the human body in an ideal manner when lying – helping you sleep as comfortably as possible. Feel refreshed from tip to toe.”
If you think this sounds like any other sleeping systems brand, then you are right – it does. Great mattresses adapt to your body and all great sleeping systems help you sleep as comfortably as possible, so you can feel refreshed when it is time to wake up…
The thinking inside the company must have something like this: we are known for our “anatomically shaped cork-latex footbed” – this is all about adapting. In which growing category can we extend this thinking? SLEEP SYSTEMS!
The question is: will consumers buy Sleep Systems from a high-quality shoe and sandal brand?
Turn it around, would people buy Shoes or Sandals from sleep systems brands like Tempur or Hästens because they have great nights of sleep?
I seriously doubt it.
The secondary problem with these many line extensions is that Birkenstock signals that they are not so serious about what the brand is known for: shoes and sandals. Shoes and sandals are now part of the many other things the brand does.
In other words: if you have to make a call on buying shoes and you can choose between a brand that is only designing, manufacturing and selling shoes or one that does shoes, skincare, bedding and more… which one would you pick? Most often, the specialist wins over the generalist.
The best path for Birkenstock would have been to do exactly what Google and Facebook recently did: sell products with different target audiences or purchase intensions under different brands. The product looks so great that it would be a shame if they do not succeed because of the position Birkenstock has in the mind of the buyer: Birkenstock = Shoe/Sandals.
Birkenstock stands for comfortable and stylish quality sandals and shoes. With Birkenstock Natural Skin Care, the company moves into a new category.
Birkenstock is known for its quality sandals and shoes, using the legendary footbed, providing support and comfort since 1774. A quick search on Google confirms the strong positioning.
The brand is moving in many directions. Its 1774 line is taking a position in the luxury sandals and show segment. Birkenstock joined forces with, for example, Maison Valentino, “Dior by Birkenstock” (reread the last three words again…), and other high-end brands.
While the 1774 product line is connects to the Birkenstock core, Natural Skin Care is an actual departure into a new category.
The product development team connected the world of sandals and shoes with skin care using a cork cap on all-natural skin care products.
The question is: will consumers buy natural skin care products from a high-quality shoe and sandal brand?
Like any other professional company, Birkenstock has probably done all the research to answer the question with a firm Yes.
My experience is that consumers who purchase the core product are often asked whether they would buy the line extended products as well.
The answer is often Yes, simply because the people who were asked the question already like the core product. Never mix the intention to purchase with an actual purchase decision. People buying skin care products will do so in the context of the skin care category. Birkenstock competes with brands like SkinCeuticals, CeraVe, Kiehl’s, and Rituals. A tough one!
To answer whether Birkenstock Natural Skin Care will be a huge success inside the skincare category, we could turn the question around. Would Kiehl’s “Finest Apothecary Skincare” ever be a success as the finest shoe and sandal brand? I doubt it.
What Birkenstock could have done is to apply the Conquer strategy: growing a new brand in a new category. Using a new brand gives freedom to operate and grow into currently impossible areas. At the same time it is also easier to stop without harming the brand in the original category. The Birkenstock Natural Skin Care products look great on the paper – it would be a shame if they do not succeed because of the “wrong logo”.
Apple announced the end of iPod. It is not only the end of a well positioned brand, but also the end of the portable music player category.
In 2001 Apple launched the iPod. One look at the above advertisement made clear what the iPod brand was all about: a digital music player holding 1000 songs in your pocket. The advertisement combined a clear product image, brand name, and category benefit.
Consumers went en masse to the shops to buy iPods. Repeat: consumers went out to buy the iPod, not the Apple. For many it was in fact the first real encounter with the company Apple.
The advertisements were very consistent and therefore recognizable for consumers:
The portable music category got an enormous boost and iPod became very quickly the leading brand inside the category. In fact the brand iPod became synonymous with music player.
Changes inside the category
Inside the overall music category, the medium to enjoy music changed in the last decades. It went from CDs bought in record stores and played on CD players to digital music players (iPod) and digital music stores (iTunes). For years the iPod and iTunes brands made room for the smartphone and apps such as Spotify. Every change impacted the brands representing the category.
The shift from music players to phones impacted Apple, iPod and other electronic brands operating inside the ‘Portable Music Player’ category.
Companies only manufacturing & selling portable music players do not exist anymore in the same way Apple would not exist anymore if the company would only be active in portable music.
The change in medium and ultimately killing iPod does not harm Apple. Apple uses a Multi-Category Strategy with strong brands like iPhone in phones, Mac in computers. Unfortunately over the last years, Apple started using descriptively named line extensions. For example, the company bought the Beats streaming music service, merged it with iTunes, and renamed it to Apple Music. The company launched Apple TV and Apple Watch. Often the line extensions are inspired by the company leadership.
The Multi-Category Strategy using descriptive line extensions make a lot of sense with the leadership team and shareholders. The thinking could go like this: ‘when we rename all our products Apple, then they contribute directly to the Apple brand, a key indicator for shareholders and investors.’
The thinking goes wrong with the consumer. Unique names are so much easier to talk about and recommend.
‘I stream music using Beats on my iWatch’ is much better in terms of positioning and owning a unique category than ‘I stream music from Apple Music on my Apple Watch’. Consumers are likely to even remove the Apple brand in the conversation – the exact opposite Apple these days wants to achieve.
The success of the iPod and iPhone were instrumental to the success of the Apple brand. But too often, successful companies fall in love with the company name, forgetting that people buy brands and not companies.
This article is based on content in the book Win With What – the first category-led growth book for anyone who wants their business to thrive and survive.
Segway is a brand that failed to take a position and communicate clearly the What of the brand.
According to Wikipedia, Segway is ‘a two-wheeled, self-balancing personal transporter’ . The problem is apparent: it is not possible to relate Segway to anything we know. Until a brand can be related to something people know, the brand keeps drifting in the brain – trying to find a category to ground itself.
Below is the hompage from March 2002. Segway is welcoming visitors to ” the evolution in mobility” without explaining What the product is.
When diving into the “Segway HT” section the focus is on communication what the product does “Human Transporter” and the benefits “that functions like an extension of you”. Also on this page it is still unclear what the Segway exactly is. Human Transporter comes close, but nobody would say “hey, can you get my human transporter?”
After almost 20 years of trying to convince people to buy a Segway, the company decided in June 2020 to stop making the product. FastCompany wrote, ‘Exclusive: Segway, the most hyped invention since the Macintosh, ends production’.
The expectations at launch were enormous :
‘Its inventor, Dean Kamen, famously predicted in a 2001 Time magazine interview that the Segway ‘will be to the car what the car was to the horse and buggy.’ In the same story, venture capitalist John Doerr predicted the company would be the fastest ever to reach $1 billion in sales.’
Unfortunately the company failed to create a clear need by explaining the What of Segway. Those who bought Segway would likely not refer to it as the ‘human transporter’, ‘personal transporter’, or the ‘two-wheeled self-balancing personal transporter’.
What Segway could have done is to stay closer to what people already knew and were familiar with at the time of launch. Explore a variation of the scooter category, promote the What and create a need by showing how people benefit from the new category and with that, the Segway.
This article is from the book Win With What – the first category-led growth book for anyone who wants their business to thrive and survive.
Over the years Apple lost its touch with the creative sector. The Mac Pro got very little attention and hardly any updates. The iMac Pro came and vanished again. But now Apple is back with the Mac Studio.
The launch of the Studio was about time. In 1997 Steve Jobs returned to Apple and launched the Think Different campaign. The campaign was the start of the reintroduction of Apple and linked the company brand to a new computer category: the computer for creatives.
Between 1997 to 2002, Apple told buyers of PCs that a better and more exciting alternative was required next to the IBM PCs. The reason? If every human did the same, using the same tools, the outcome would be similar, and society would not progress.
To support establishing the new category, Apple featured and promoted the creative ideas of people like Alfred Hitchcock, Pablo Picasso, Mahatma Gandhi, and Thomas Edison in ads.
The company established the need for the computer for creatives and successfully linked it to the brand Apple. The Apple company and Apple products became known for products optimized for the creatives of our time. Apple computers quickly found their way into marketing, creative agencies, DTPers, designers, musicians, writers, and anyone who aspired to be creative. Apple linked the brand to those who shape business, science, or society.
After the successful linking Apple with the creative sector the company got very sluggish in serving the creative crowd.
The release dates of the Mac Pro (a product made for the PROs!) tell it all:
2006 – First generation
2013 – Second generation
2019 – Third generation
The iMac Pro did not even get pass one generation.
Any Studio owner must have been thinking many times to switch to powerful Intel and Windows machines!
Till now: The Mac Studio is the answer to the creatives. Even the name indicates where the product will be used: in the Studio.
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.
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 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 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.”
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.
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.
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.
No-nonsense brand bites since 2009