Category Archives: Positioning

Naming, Portfolio, Positioning

ORGANICS by Red Bull – Great range wrong endorsement

Red Bull is the best-known energy drink globally. In 2019 Red Bull sold a stunning 7.9 billion cans. In a search for growth markets, the Red Bull company found the market for all-natural organic sodas. ‘ORGANICS by Red Bull’ stands for everything Red Bull is not: all-natural.

The Red Bull slogan ‘Red Bull gives you wings’ summarizes the brand very well. To get the drinker energized, Red Bull contains four key ingredients: caffeine, taurine, B-group vitamins, and sugars.

The brand has organized itself around the Energy Drinks category by connecting itself with high-energy sports, like Formula 1 and Football clubs. The brand is engaged in events like the Red Bull Stratos, where the Austrian skydiver Felix Baumgartner performed a free fall from approximately 39 kilometers / 24 miles above the Earth. Red Bull gives you wings.

In a search for growth markets, the Red Bull company found the market for natural products. In 2008 Red Bull introduced to several countries an all-natural Cola containing just natural flavoring and caffeine. The issue is not the category or product but the name. Red Bull Cola is Red Bull and Red Bull = Energy Drinks that are anything but all-natural. Red Bull Cola did not go well. In late 2011 Red Bull decided to only sell Cola in Austria and Germany with limited availability outside these core markets.

Once a company has identified a growth market, it will try to find a way to take the opportunity, even more, when the current business is going well. Red Bull decided to take another chance by introducing the new label ‘ORGANICS by Red Bull’ and expanding the all-natural range of sodas.

ORGANICS by Red Bull stands for everything Red Bull is not:

ORGANICS by Red Bull are made with ingredients from natural sources and are certified organic in accordance with the USDA National Organic Program.

Four Distinctive Varieties. Organic Sodas, Not Energy Drinks.

ORGANICS by Red Bull do not contain artificial flavors, colors, preservatives, GMOs, or other artificial ingredients. The end result is four distinct, great-tasting, and refreshing organic sodas made for your enjoyment.

It is clear that the perception problem remains:

Q: Are the new ORGANICS by Red Bull products energy drinks?

A: The new ORGANICS by Red Bull products are not energy drinks; they are lightly carbonated, organic soft drinks with a distinctive taste.

Unfortunately, the faith of ORGANICS by Red Bull will be similar to the fate of Red Bull Cola. In the mind of consumers, Red Bull = Energy Drinks. Nothing else. It is clear that Red Bull GmbH wants to succeed in the all-natural organic soda category. Success and growth are possible, but the What (Organic sodas) requires association with a different brand name and company name – removing all connections to Red Bull or Red Bull GmbH.


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

 

 

Brand Strategy, Portfolio, Positioning

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

 

Brand Strategy, Portfolio, Positioning

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.

Brand Promise, Brand Strategy, Perception, Portfolio, Positioning

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.  

Naming, Positioning

The brand iPod is dead – the brand Apple lives on

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.

 

Strong brand

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.

Line Extensions

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.

Get your preview at WinWithWhat.com

 

Positioning

Segway – a brand that failed to take a position

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.

Get your preview at WinWithWhat.com

 

 

Brand Strategy, Positioning

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.

 

Brand Strategy, Portfolio, Positioning

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.

 

Portfolio, Positioning

Volvo Corporation attacks electric with the Polestar brand

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

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

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

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

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

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

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

When we apply the Flip-test:

Current: Volvo gasoline cars
Extension: Volvo electric cars

Flip it!

Current: Tesla electric cars
Extension: Tesla gasoline cars

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

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

Perception, Positioning

Reddit Nailed It

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

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

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

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

The 5 second commercial:

The key message (JPG):