Category Archives: Brand Strategy

Mercedes-Benz may drop its “EQ” branding

Mercedes-Benz is starting to solve its confusing portfolio.  Reuters reports that Mercedes is to drop the EQ product brand.

The Mercedes-Benz portfolio is confusing as I detailed in a previous post in Oct 2021. One of the most striking examples of bad portfolio branding and execution is the Mercedes-EQ product branding for all-electric cars.

“EQS by Mercedes-EQ”

There is so much wrong with that sentence. The car EQS is a model by Mercedes-Benz, not by the Mercedes-EQ model family. And of course, in the Mercedes-Benz context, there is no need to repeat the company brand at all.

A much better solution would have been “New era: the EQ line for all-electric”.

Mercedes-Benz took (I guess) the internal organizational division between Gasoline and EV very seriously and launched an entirely new line of cars, even though in terms of actual car type/categories (SUV, limousine etc) the electric cars are the same as the combustion engine car brothers and sisters.

The combustion engine B on the left, the electric on the right. Same category, same design but a  different name.

A much better solution would have been to just use the EQ moniker to indicate the EV variant, similar to the fully descriptive “Plug-in Hybrid” to indicate the hybrid variant.

 

All Electric

The removal of EQ as a complete product line might take some time:

“The decision is based on Chief Executive Ola Kaellenius’ focus on electric-only cars, making the EQ brand redundant as Mercedes turns away from the combustion engine, Handelsblatt cited the sources as saying.”

In other words: Mercedes-Benz is not really intending to provide portfolio clarity or remove the EQ as a separate line. The company is simply replacing all combustion engine cars with fully electric cars.

The executed Switch Strategy does not come without risk. 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 technology over the Mercedes-Benz GLC EQ.

Mercedes-Benz could have followed the Conquer Strategy, usually the safest and cleanest route to execute the company’s transition into a new category.



Read more about the Conquer and Switch Strategy in the book Win With What – the first category-led growth book for anyone who wants their business to thrive and survive.

Get your preview at WinWithWhat.com

 

Do you want to wake up with a nice cup of Mars, Twix, or Milky Way coffee?

The golden rule of branding is simple: extend your business, not your brand. Say hello to brand extensions gone crazy, and meet the Mars, Twix, and Milky Way coffee capsules.

Recently I walked into an XXL version of the Dutch supermarket chain Albert Heijn. It is always interesting to see what products are sold in these bigger supermarkets.

In the coffee section, I noticed immediately the candy bar coffee cups. They were hard to miss, conveniently positioned at eye height.

 

When expanding the business there is a natural tension between brand owners and brands. Brand owners love their brands and find it natural to extend them into new and different categories. Brands, on the other hand, want to stay focused and become the leader of their category. Brands are right. Think about football players for a moment. Have you ever seen a premium league football player and gymnastic athlete in the same person? Of course not. Sports managers would not even consider their athletes to focus on many sports at the same time. They do not even remotely believe ‘their’ athlete might become leading in both fields.

The same goes for brands people buy. When a know or leading candy bar brand sells coffee cups, does that make them a leader in coffee? Not for those who care about coffee! In their minds, the quality of the focused brand is always better. The thinking goes, ‘if they only do that, the brand must be good’.

Mars and many other candy bar brands love to explore line extensions, probably from the believe that it is good to have consumers to engage with the brand at many different points of sale, functioning as a reminder for the real deal (the candy bar). It seems to me though that while that might be working it cannot be that buyers take a known Candy bar brands serious in coffee. In the same way chocolate bars of the “Hawaii Premium Kona Coffee Company” would not be taken serious by candy bar lovers either.

My advice is simple: keep your brand focused within the category it is known for. Any side steps will cost money, which needs to be balanced carefully against the value of the brand reminder. In other words: what is the loss in revenue for Mars candy bars if there are no Mars coffee cups at all.

Now I do have a question: who has purchased “Candy Bar” Coffee? Or other products like chocolade drinks, ice creams? Please leave your thoughts in the comments.

The End of Facebook

Meta is running the last leg of its once so-popular social media platform Facebook: Facebook is on its way out.

In 2013 the Facebook CFO already warned of upcoming problems in the Q3 2013 earnings call “We did see a decrease in daily users partly among younger teens. … This is of questionable significance.”

In 2015 I concluded that Facebook, the brand leader of the extensive category social network, will eventually face issues with focused brands taking small bites out of the big pie and capturing users from the leader (link).

The combination of brand decline with the youth (= looking for another brand than Facebook) and new brands coming in (Snapchat, Insta, TikTok, and many more) eventually will lead to the end of Facebook. Facebook is not attracting the youth and grows along with the old.

In 2018 while teaching second-year students, I learned that the Facebook issues were more significant than I had thought: a few of the100 students used Facebook very specifically to browse posts. They did not post anything themselves.

Recently I decided to recheck the Facebook status with a large group of students. The trend has only gotten worse: Facebook is hardly in use with the group <25 years – not even to browse posts.

The generalist category “social network” is disappearing; with it, the brand Facebook will eventually disappear.

The company’s rebranding from Facebook to Meta was a vital move. Under Meta, each product brand can flourish without a link to the fading Facebook brand.  

Birkenstock – from “sandals and shoes” to “sleep systems” (Part II)

Birkenstock makes moves outside the perceptual category of “comfortable and stylish quality sandals and shoes”  

I discussed the Birkenstock Natural Skin Care line extension in the previous post. After sharing it on LinkedIn, I learned from Ruben Lekkerkerker that Birkenstock had already extended into sleep systems.  

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, socksbags, 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 sandals and shoes going natural skin care

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.

At the same time, the brand is moving into a new category with “Birkenstock Natural Skin Care

Birkenstock line extensions
Birkenstock line extension logos

 

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 is finally back at its core with the all-new Mac Studio and Studio Display

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.

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.

 

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