Category Archives: General

General

Virgin – The Extension Empire

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Virgin has extended to more categories than any other company. Does it do any good for the company?

The Entrepreneur Magazine did in June 2012 a special on Richard Branson, the founder of Virgin. The article opened up with the following:

‘Fueled by frustration with the status quo, Richard Branson built his Virgin Group empire attacking verticals that had long been dominated by lumbering legacy companies. Now he’s extending his entrepreneurial philosophies to a new market that’s out of this world.’

The extension referred to is Virgin Galactic, which aims to take people and satellites into space at ‘a fraction of the price it currently costs’.

The Virgin brand started as the label for a record shop founded in the 1970s. Currently, it operates in an extreme amount of categories. Virgin uses the simple Brand + Descriptor naming structure. The below list of extensions is directly from the Virgin Group website.

Entertainment: Virgin Racing, Virgin Bet, Virgin Books, Virgin Casino, Virgin Fest, Virgin Games, Virgin Megastore, Virgin Radio, Virgin Records

Health & Wellness: Virgin Active in Australia, Italy, Singapore, South Africa, Thailand and UK, Virgin Care, Virgin Pulse, Virgin Pure

Money: Virgin Money

Technology: Virgin Connect Virgin Media & Media Business, Virgin Media Ireland, Virgin Mobile Canada, Chile, Colombia, Poland, Saudi Arabia, and the United Arab Emirates, Virgin telco

Travel & Leisure: Virgin Atlantic, Virgin Australia, Virgin Balloon Flights, Virgin Experience Days, Virgin Holidays, Virgin Hotels, Virgin Hyperloop, Virgin Limited Edition, Virgin Voyages, Virgin Wines UK, Australia, and the USA.

Space: Virgin Galactic, Virgin Orbit

People & Planet: Virgin Money Giving, Virgin Startup

With this enormous list of companies and categories, most people think the Virgin Empire must be doing exceptionally well. The reality is that the group reported a profit in 2019 of £60 million, up from £53 million in 2018.

Virgin proves that a healthy business with a narrowly focused brand and a dominant market share is much better than having 30+ extensions with very low market shares.

General

Start With Why to Win With What

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When publishing a book with the title “Win With What – How Smart Companies Thrive and Survive” it is only natural to compare to the well-known book “Start With Why – how great leaders inspire anyone to take action” by Simon Sinek. In this post I explain why both approaches are needed in any successful business: you start with why to win with what.  

Start With Why

Sinek’s core idea is that by taking an inside-out approach, a company is much more effective in reaching its goals because employees are rallied around a shared belief. To inspire people to take action starts by giving a reason, the Why, and this is the reason the Why is at the core of the Golden Circle.

The Golden Circle (Simon Sinek)

 

A purposeful Why helps flow energy in the same direction – from How a company works, behaves, communicates and decides, to What is sold in terms of products and services.

Win With What

Without knowing the What, people will never experience the How or understand the Why. That is why the What is the outside layer of Sinek’s Golden Circle. Before getting interested, building desire, or making a purchase we must first know What the company, brand or product is.

When purchasing products or services, buyers take an outside-in or category-led approach.

Win With What advocates category-led growth because with a clearly defined What anyone can find, buy and promote a brand.

 


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.

Get your preview at WinWithWhat.com

 

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How to start a movement and build brands in the marketplace?

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The category comes first and the brand second. Once buyers understand the category and desire the products or services, they will look for credible brands. In this blogpost, four important aspects of brand building in the market are discussed. 

1. Get a follower

In the TED talk How to start a movement Derek Sivers shows how to create demand for a category in real life. He features a video of a guy dancing in a park full of people. At some point, the dancing guy gets a follower, and a movement starts to form. Sivers says:

‘It is the first follower that transforms a lone nut into a leader. The second follower is a turning point: it’s proof the first has done well. Now it’s not a lone nut, and it’s not two nuts. Three is a crowd, and a crowd is news. Everyone needs to see the followers because new followers emulate followers — not the leader.’

Brands need to go through the same process, growing desire for their category and connecting their brand to it. The dancing guy was not promoting himself. He did not do any advertisements. He just performed the act of dancing and got people interested. Successful brands promote their exciting category (the What of the brand) to get followers. Once people realize how it benefits and affect them positively the brand becomes an easier purchase.

2. Get people interested using the Stadium Pitch

An effective way to build a brand is by educating people about the category and using the brand as a prime example. The late Chet Holmes called this the Stadium Pitch. The idea is that a brand can take the stage with an audience that can leave at any moment. The purpose is to grab anyone’s attention and keep them as long as possible inside the stadium.

An ineffective Stadium Pitch would be something like ‘The top five reasons why you should buy my organic juice’. Probably only a few people are at the moment of pitching really interested in organic juice with an empty stadium as a result.

A much more effective Stadium Pitch starts by building the overall category and then slowly narrowing down to the category (the What) and finally the brand. An effective opening would be ‘The top five effective ways to improve your health right now’. The first way to improve health will have nothing to do with the organic juices the brand is selling. Towards the last step, the audience can relate the concept of Health with Organic juices, and the brand can start promoting the category. All the critical criteria for healthy organic juices can be reviewed. Of course, the brand fulfills all of them and many more! The presenter was a category educator and became a salesperson only in the very last step.

3. Get other people to talk about your brand

One of the best ways to promote the category and the brand is to have other people write or talk about it. When people read, hear, or see about categories and brands on trusted blogs, video channels, or review sites, they are more inclined to explore further. Credible voices in the Earned channel are required in building the category and attaching the brand to it. Established brands require a continuous stream of substantially new products, features, or stories to keep the Earned media interested. Without anything new, a brand becomes old news fast.

The brands’ Own channels are essential. Think of the brands’ social media accounts, website, and blogs. In the Own channels, it is also about creating a desire for the category/ the What. Research firm Nielsen published for years the report ‘Global Trust in Advertising’16. Every year, the most trusted type of ‘advertising’ is recommendations from friends and family. The second place is the brands’ website underlining that people do not expect a company or brand to lie on their own site.

Advertisements lack the credible voices of the Earned channel. The brand speaks in the Bought channel. People have learned how to read, watch or listen to advertisements. Contrary to what companies think, advertisements are not ranked high in trust. In the Gallup annual figures of the image of professions ranked by honesty and ethics, Advertising practitioners are at the bottom together with members of Congress and car salespeople.

Gallup Honesty and Ethics ranking – January 2020

The role of the Bought advertising channel should be to maintain or defend an already established position inside a category. Advertising should reinforce the unique What, the product, and benefits. Refrain from the fluffy ‘feel good’ commercials as these do not reinforce the position of the brand in de minds of people.

4. Keep excitement and interest high

Every brand has the task of keeping the excitement and interest in the category high. The excitement in the category will benefit every brand inside the category, relative to the market and mind share each brand has. The more the category remains on the radar of potential buyers, the more people will eventually convert and make a purchase.

 


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.

Get your preview at WinWithWhat.com

 

General

Al Ries – Father of Positioning passed away

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Al Ries – the father of positioning, passed away at home peacefully at the age of 95. The books and lectures by Al and his daughter Laura Ries continue to be my source of inspiration.

I remember the first time I read the book Positioning – the battle for the Mind.  The book describes an approach to creating a “position” in the consumer’s mind reflecting the brand’s strengths and weaknesses and those of its competitors. I was blown away by the simplicity.

I immediately purchased all the other books Al Ries wrote – they are all masterpieces and written in a distinct humorous way. Al also wrote great articles for AdAge. Reading was not enough; I watched most of his recorded speeches thanks to YouTube. While the core thinking of Al – positioning for the mind using categories- always comes through, I never got bored by his analysis.

Needless to say: Al Ries became my source of inspiration, and in 2020, I finally decided to thank him personally. I told him a personal story about Nokia – the company I worked for when first encountered the books of Al Ries.

To my great surprise and happiness, Al responded to me (fanboy moment!)

Dear Michiel: Thanks for your kind words and the Nokia story. We keep promoting the same thing. A new category, like the smartphone, demands a new brand name like the iPhone. Look at the electric vehicle business which Tesla dominates. Yet every major automobile company in the world did the same thing as Nokia when the iPhone was launched. They introduced electric vehicles with their existing brand names. All the best. Al

I end this post the same way I ended my message to Al:
Thank you Al for all your insights, lessons, and clear & crisp analysis.

 

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General Motors transitions to EV the Nokia way

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GM makes the strategic error of announcing a full transition to EV without having the portfolio of cars to back it up. 

 

General Motors started the year with a big splash…. a new logo and a new company direction (link)!

General Motors invites ‘Everybody In’ – underlying the change to electric vehicles using their new Ultium platform.

This is the new home page:

And yes, you are reading that right:
We’re making Electric Vehicles for all.

Never mind that the current product portfolio has one electric car!

The stats across the GM brands:

  • Chevrolet: 1 EV  out of  16 car models
  • Buick: 0 EV out of 5 car models
  • GMC: 0 EV out of 12 car models

This reminded me immediately to a company very dear to my heart: Nokia.

Back in 2011 (the 11th of February, a day I never will forget)  the Nokia CEO Stephen Elop announced transition from the  ‘smartphone OS’ Symbian to Windows Phone 7. All of this was done without a single Nokia Windows Phone ready to hit the market.

 

The fallout was massive… the Symbian sales went down the drain, and in fact the brand Nokia went down the drain.

What -on paper- appeared an ‘easy transition’ turned out to be not that easy. The company had an enormous knowledge of the ‘old technologies’ and very little of Windows Phone, it was a transition that was not easy, and it turned out to be very unsuccessful.

The reason for the failure was not alone the internal Nokia execution. The other part was  consumer perception. Whether Nokia employees liked it or not, Nokia as a brand was not Apple or Android.

Fast-forward to 2021 and GM… we see exactly the same happening:  introduction of a new strategy to ditch conventional car engines without having a line up ready to  underscore the strategic direction to consumers.

The result: consumers will pretty much stop buying GM conventional engine cars until the cheaper EV models are available. During this time GM will need to transition… at rapid speed. Similar to Nokia, GM is full of conventional engine experts and none of that is relevant anymore.  That is A LOT to bridge… especially in an economic downturn time.

On top of that GM is still not Tesla or any another EV car brand…

The only real benefit GM has at this point, is the fact that there are not yet any real affordable EV players in the market that consumers can buy right now.

GM: I am afraid you made a strategic error by pleasing shareholders (short term benefit) while ignoring the product portfolio and consumer perception (GM does, unfortunately, not equal EV). Announcing a transition without cars will result in stagnation in sales of conventional engine cars.

General

Be careful when leaving the brand core – case Fujifilm

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Fujifilm – a personal brand favorite of mine –  recently launched a new product line of cameras seen as Sony copy cats. Is that a good or a bad thing? While I realize not all of my readers are digital camera photography enthusiasts, the lessons in this article are applicable to any industry.

In his brilliant book Innovating Out of Crisis: How Fujifilm Survived (and Thrived) As Its Core Business Was Vanishing, Shigetaka Komori, the CEO who brought Fujifilm back from the brink explains how he engineered the transformative organizational innovation and product diversification of Fujifilm. It really is an amazing story.

The key principle during this process of organizational engineering was that Fujifilm remained true to its roots.  The mission of Fujifilm remained that of Preserving and Sustaining the Culture of Photography.

This result of this mission can be found in the design of the Digital Imaging products of Fujifilm. Fujifilm understood there are a couple of ingredients to a valuable imaging brand: lens, sensor, processor *and* connecting to the heritage of photography.

In the case of Fujifilm, this translated itself to the creation of cameras with a  distinct vintage look, with the same dials and buttons and the original Fujifilm. And very important, simulations of original Fujifilm analog films are built-in the camera.

Fujifilm. X100V, a vintage looking camera

 

The result: a huge fanbase of Fujifilm camera enthusiasts combined with a distinct positioning. Fujifilm Is the only “film” brand that made -without any doubt- the transition to digital! 

So far… so good!

But something happens to every focused brand: the need to expand or extend. In the case of Fujifilm, they decided to copycat their biggest competitor: Sony.

And with it, Fujifilm launches a new “S” product line, the first product being the S10. Gone is the retro look, gone are the dedicated buttons, gone is that vintage photography feeling Fuji brand advocates love so much.

Fujifilm X-S10 – the Sony copy, no more vintage

 

The Fujifilm site “Fujirumors” calls it exactly what it is The Vintage Departure.  And that is not a good thing.

Of course, Fujifilm will attract some new buyers, but while doing so it loses in being the distinct photography brand. In other words, all the carefully build up brand equity will get a hit.

And, perhaps easy to forget, but if buyers would have wanted a Sony, they would have purchased a Sony to start with. Nobody likes to have the copy, it gives the impression you would not be able to get the real thing.

The same would be for Sony. If Sony would make cameras looking like Fujifilm it might attract of course some people, but those who really go for the Fuji look, feel and operations will come to Fujifilm.

Think about it, do you rather drink Coca-Cola or a “supermarket own brand” version? Do you rather drive a Tesla or the Mercedes-Benz electric car?

My prediction is that the new Fujifilm S line will be one of short term gain and a long term pain. The better move would have been to invest in new and innovative ways to stick to the core and preserve, sustain, and expand the culture of photography.

 

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Spotify, claim your leadership position now

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The Spotify app for music streaming launched already back in 2008. For the majority of consumers, Spotify is still synonymous with Music Steaming.

The growth of Spotify in terms of subscribers is very impressive and in line with the uptake of 3G/4G data contracts and interest in ‘music as a service’ in general.
– 2011: 2M paying
– 2012: 15M free, 5M paying
– 2013: 18M free, 6M paying
– 2015: 55M free, 25M paying
– 2020: 133M paying

When looking at Google Trends data it is clear that very little people search for the product category “streaming music or streaming songs”. Instead, people search directly for the brand Spotify.

The insight:  the brand Spotify in the minds of consumers truly equals the category. What a wonderful position to be in!

Of course, the world changes, and like in every successful category competition comes in.  Besides Spotify, we now see players like Apple Music, TIDAL, Amazon Music, Youtube Music and Pandora (US only).

 

And while the fight is massive, with huge lock-in advantages for Apple and Amazon we still see that Spotify is leading the category (source: MidiaResearch)

  • Spotify: 36%
  • Apple Music: 18%
  • Amazon: 13%
  • TIDAL: not disclosed – part of  “the other” category at 11%

The market research results are in line with what we see in Google Search volume:  the clear leader is Spotify .

With all the new and very powerful competition, the overall marketing of “streaming music” grows and more and more people get interested.

The question is: who benefits? is it the perceived leader or the company doing all the marketing? It turns out, so far Spotify is benefitting. A Reuters technology news item from 2016 proved the point “Spotify says growth has quickened since Apple Music’s launch”.

There are two reasons for this:
1) Spotify remains to have the pioneering advantage – consumers know more about it and other services have not yet proven itself completely.

2) Consumers simply think “if Apple/ Youtube/ Amazon are active in streaming then (the leader) Spotify must be really good” and they default the purchase to the category leader. Consumers showed similar behavior during the famous Pepsi vs Coca-Cola challenge, also here the leader benefited.

 

Fast Forward to 2020…. 

Today we see many new streaming consumers, all people who do not know anything about the early days of streaming and might not have a perceived leader at all – they just go for what is most convenient “because they are all roughly the same anyway”

And looking at the brands in the App Store it seems they just don’t want to differentiate – at all!

Below are the descriptions in the App Store – try to find the differences or reasons to download one app over the other…

Spotify: Music and Podcasts
Discover the latest songs

Apple Music
60 million songs. All ad-free

TIDAL Music
Hifi Songs , Playlists & Video

Amazon Music: Listen Ad-Free
Stream & Download New Songs

YouTube Music
Stream Songs and play videos

 

Below is my attempt to position each app stronger by focussing on their strengths – helping consumers to navigate and make a choice.

Spotify: Music and Podcasts
The #1  streaming music app

Apple Music
The worlds biggest ad-free library

TIDAL Music
High fidelity sound, hi-def video

Amazon Music: Listen Ad-Free
Stream for free with Prime

YouTube Music
The #1 in music videos

 

In order for Spotify to keep their leadership position in the years to come, they will need to claim the position and live up to it – externally and internally.

Only then consumers who are in the market to spend money on streaming will be able to choose the leader because after all,  it is only the leaders who have followers.

 

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A new way to be even closer to your customers

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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.

General

Brand lessons from Donald Trump: clear focus, massive PR and a great slogan

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With the US elections in full swing it is interesting to take a brand approach to the candidates.

Without any exception Donald Trump is checking the brand boxes.

1. Clear Focus

First Donald Trump has a clear focus – he has picked his battles and topics. While many disagree he has at least picked his topics and sticks to them.  Great brands know that in the mind of the consumer a brand that does just one thing really well is more credible than a brand that does everything.

2. Massive PR

When you dominate the headlines you are top of mind.  Google Trends reveals that Donald Trump is dominating the headlines already for a long time. Bernie Sanders is recently topping Hillary Clinton.

PR-Elections-2015-onwards

What does this really mean? Somebody else is talking about what the Trump brands stands for. Whether the articles in the news are  positive or negative it will do one thing very well: making the focussed Trump brand even more real. This works especially well against brands/ candidates that are not outspoken enough: they will appear less firm or even a bit all over the place.

3. The slogan

A great slogan is a memorable phrase that is the summary of a brand. It  describes the product and its unique benefit and set the brand above the competition and ultimately create a reason for people to buy or join your brand.

Trump is nailing it here. Some might still subconsciously remember the slogan from the 80’s when Reagan used “Let’s Make America Great Again”. For others it gives a real reason to join the brand:

Trump_America_Great_Again

Anyone could say “I’d like to make America great again”.

The other slogans give a much less real reason to join the brand:

  • I’d like to be with her (Hillary Clinton, democrat)
  • I’d like a new American century (Marco Rubio, republican)
  • I’d like to be all in for Jeb (Jeb Bush, republican)
  • I’d like to  join courageous conservatives (Ted Cruz, republican)

All these slogans are in my opinion similar to Mitt Romney’s 2012 “Believe in America” (are there any Americans who deep down not believe in America?) and the John McCain 2008 slogan “reform, prosperity and peace”. Both lost against Obama with the slogans “Change” (2008) and “Forward” (2012).

In the 2016 elections there is one exception, the slogan of the democrat Ben Sanders who gives also a reason to join the brand “I’d like a future to believe in”.  Perhaps not surprisingly Ben Sanders is trailing Donald Trump in PR.

 

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Coca-Cola’s “Taste the Feeling” slogan does not differentiate

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Marking a significant shift in its marketing strategy, Coca-Cola  announced on Jan 19 that for the first time, all Coke Trademark brands will be united in one global creative campaign: “Taste the Feeling.”

Chief Marketing Officer Marcos de Quinto says that “The bigness of Coca-Cola resides in the fact that it’s a simple pleasure – so the humbler we are, the bigger we are. We want to help remind people why they love the product as much as they love the brand.”

Rudolf Echeveria the VP of global creative, connections and digital, adds “we’re going from ‘Open Happiness’ to exploring the role Coca-Cola plays in happiness, we make simple, everyday moments more special.”

Sounds like a convincing story except that it does not differentiate Coca-Cola from the competition – at all. “Taste the feeling” works just fine with Pepsi as well.

Pepsi-taste-the-feeling

The soda industry is in decline

CMO de Quinto explains the insight behind the campaign “we’ve found over time that the more we position Coca-Cola as an icon, the smaller we become.” This is a strange insight since the decline of the soft drinks category is happening with or without the iconic Coca-Cola brand.

In the USA the category is already for 10 years (!) in decline. In 2014, there was 14% less sold than in 2004 with the biggest losses for the Diet variants fuelled by concerns over the use of artificial sweeteners. “Water is hot and diet soda is not” writes the WSJ.

It is Coca-Cola and Pepsi again

Inside the soft drink category there is a shift happening: for the first time in years the regular Coca-Cola and Pepsi drinks are leading again. Cola drinkers are back to the core: real cola with sugar. The time could not be better to giver cola drinkers the real reason to choose Coca-Cola over Pepsi.

Taste the Real Thing

‘Taste the Feeling’ is not unique. What is? Taste the Real Thing of course!  No matter whether it is a regular Coca-Cola, Diet or Life, there can be only be one The Real Thing and that is Coca-Cola. The real reason to stay with the brand and buy it time after time again.

Coca-Cola-Taste-the-real-thing

Growth from other categories

To continue growth as a company the Coca-Cola Company will need to re-focus and reposition. Get leadership positions in new categories with new products under new brands.

And while exploring new categories and working on gaining leadership positions give current consumers the reason to drink Coca-Cola: Taste the real thing.