Focused brands have the future

A great example of being everything for everyone is Facebook, the world’s second most visited site. How can Facebook’s growth be in trouble? Simply by being everything to everyone.  Within the next few years we will see that Facebook gives up market share to more focused social networks. The trend is already there. The Conversation presented results from a study funded by the European Union on social media. From the study, we learn that for sixteen to eighteen year olds in the UK “Facebook is not only on the slide, but actually dead and buried. Often the youth feels embarrassed to be associated with Facebook.”

The findings are in line with Facebook’s own findings. CFO David Ebersam reported during the presentation of the third quarter results of 2013 “We did see a decrease in daily users partly among younger teens … This is of questionable significance.” Wow. What is happening here?

Nothing to nobody

Facebook is the current leader of the entire social networking category. “Facebook is a social network that brings friends, colleagues, classmates and acquaintances together”. And that is a long-term problem. If you are everything to everybody, you will eventually become nothing to nobody.

It is logical that new social networks that focus on smaller segments or new categories will divide the big Facebook pie. A good example is Pinterest, the social networking site that acts as a bulletin board and has a tremendous growth.

These focused sites attract new users who are not using any social network, but more often users of Facebook. This leads to a smaller group of Facebook users, resulting in content of inferior quality, making the brand less interesting for existing users and more difficult for advertisers to targeted audiences.

Focus

In the long run the market will simply demand a focused approach because the perception of a focused brand is always better than the perception of a comprehensive one.

Just ask yourself these questions:

  • Which brand do you think is better in high end watches, the one only making high end watches or the one making high end watches, jewelry and clothes?
  • Which restaurant brand makes better Thai food? The one preparing Chinese, Japanese and Thai or the one just preparing Thai food?
  • Would you rather have a TV+Bluray+Digibox combo or have it separate?
  • Do you trust the all-around surgeon for an operation or would you rather go with a specialist?

And finally,  which bakery brand bakes better French bread? The bakery called Rezé “Boulangerie Traditionnelle Francaise” or a bakery baking all kinds of breads, including French?

If you are an entrepreneur make sure you are focused enough and associate yourself with one category, not many.

If you are an established business and want to have relevant brands in the future, it is time to make choices about the category in which you are active.  Don’t follow Facebook.

Volvo – Keep your brand focus on safety or be toast – Part II

About 3 years ago I wrote how Volvo is turning from a school book example of brand building into one that is about destroying the brand.

Volvo is of course historically known for “safety”. Around 2011 it lost that edge in marketing with campaigns featuring for example the “All-New Naughty Volvo S60”.  Safety features and innovations were not brought to the attention of the public. In fact, Safety all together was put on the back burner and replaced by the new key selling points Performance and Luxury.

The real problem with this approach was that Volvo gave up the best positioning in the industry: after all, which car brand would not want to be perceived as the safest car?

Brands that go out of focus usually go out of focus in sales as well.  In 2006 Volvo sold 427.747 cars worldwide. In 2013 it sold almost the same, 427.840 cars. Indeed, zero growth over 8 years. This happened all at a time when markets like China continued to boom and last year also for Volvo. Still, Volvo sales in the USA are so bad that already in 2012 the WSJ Market Watch  suggested that Volvo might as well exit the market.

AdAge calls it an identity crisis.  A commenter quoted in the article says “Volvo used to be all about safety and long-term durability. But [now] everybody has safety. Many companies have more safety features than Volvo does, so they can’t own that anymore”.

Of course, all cars are safe and these days some cars might indeed be safer, but only one can be perceived the safest. Volvo stopped reminding consumers it was in fact the safest car on the planet. When you stop reminding consumers about your positioning you will slowly start losing it.

Just think for a minute that Volvo would have in fact continued the crash test advertising from the mid 1980s and put all of its innovation resources to safety. Introducing new safety features, setting the safety bar for the car industry higher every year… and reminding consumers that Safety = Volvo and Volvo = Safety.  Continuous reinforcement would have helped Volvo to be still today perceived as the safest car in the world.

Instead of drumming the safety message, in 2011 Volvo talked about “Naughty Cars”

And when that did not work out, in 2012 it moved from being naughty to cars “designed around you”

And fine-tuned in 2013 to “designed for real people”.

Here is a transcript of the voiceover: “A Volvo isn’t for everyone and we kind-a-like it that way. The Volvo XC60, designed for real people, designed around you”.

So what is Volvo in plain consumer language, max three words? It is hard, isn’t it?

Volvo is so desperately trying to be a brand that it is not. You cannot be Audi, you cannot be the brand for people who cannot afford Mercedes-Benz, you cannot indirectly say that Mercedes-Benz drivers are “unreal people”.  Everybody knows they are not. In fact, Mercedes-Benz has its own list of very impressive safety innovations. They have just not activated it in marketing. They could easily launch a counter campaign targeting women with a focus on safety and beat Volvo.

What should Volvo do? Continue to reinforce what consumers still might believe or want to believe Volvo is! My suggestion: revert as soon as possible back to “the world’s safest car”, continue to innovate in safety and talk about it… loudly! There is not too much time left before the brand will turn completely meaningless.

Let’s try some new colors for Santa!

Are you proposing new colors for Santa? Are you serious?
No, I am not proposing new colors for Santa. Consistency in the story, appearance and product has built the very powerful Santa brand. There will be very few people suggesting changes.

Yet, weirdly enough, when dealing with company brands everything seems possible and we seem to forget that consistency really matters. Logos, company slogans, even complete brand identities undergo changes, “updates” or get completely renewed.
While this sometimes makes sense, most of the time it does not. In fact, most changes are made for the wrong reasons.

These are the three top wrong reasons I have come across for making changes to brand identities:

1: The business is not going well
“Let’s refresh the brand to spark more interest” the thinking goes. However, when a company operates in a category that is in decline, refreshing a brand will not help to increase interest. Would it have saved Kodak in film or will it make Dell in computers more interesting?

2: New leadership
New leadership is a great tool to make changes in a company. But only when those changes become real to the outside world, a brand identity update makes sense. Only then there is a possibility for a real impact. The brand refresh at Yahoo was arguably done too early, because the real changes under Marissa Mayer are not yet all that visible.

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

 

There are four reasons to rightfully make some changes to the brand identity:

1: There is a real change
The brand change can be tied to something that is real for consumers. For example, when a company enters new markets or categories or focuses only on few products or segments. This might have been the reason for Starbucks to remove the text “Starbucks coffee” from their logo as Starbucks is now about more than coffee. Unfortunately, a logo without any text leaves it meaningless for those who do not know Starbucks, but that is a different topic altogether.

2: Big changes inside your category
Sometimes there are big changes inside your category and you want to show to the external world that you are really gearing up to take on the new opportunity. The rebranding of Windows to mark the step to move beyond the PC is a good example.

3: Mergers and takeovers
There is no escape when brands get merged. As portfolios change there are likely going to be some real changes for consumers.

4: The times have changed
Your brand identity is simply outdated or competition has increased and your brand does not stand out anymore. You just need to make some updates. A good example is the logo of Shell. It started out in 1900 as a clamshell in black & white and turned to its current modern shape and form while remaining a clamshell.

 

Whenever you do update your brand, keep in mind that you need to build on the brand that you own in the mind of the consumer. It is not just about “trying something new”, “renewing the essence of the brand” or “exploring the cool edges of the brand”. After all, consumers are constantly learning about brands and learning is done best through repetition.

Manage your brand like a band

There is a lot to learn from the music industry. It is a business that has gone through a lot of change ever since it started, yet it has a consistent approach in managing their superstars: the brands of the music industry!

The below lessons can help you to look at your brand differently or give you a different perspective. Have some fun while pretending you are managing your brand as if it were your number one band!

 

Lesson 1: A good story sells
Remember T.A.T.u? Profiled as lesbian singers causing controversy when kissing on a music video. It worked. A lot of press brought T.A.T.u. to the attention of many, resulting in singles and albums that were selling very well.
When it turned out the singers of T.A.T.u. were not lesbian things started to go downhill for the band. A good story sells, but it better be a real one.

Ask yourself: what is the story of your brand? Do you have one? Is it real? Is it personal?

Lesson 2: Never lose focus
Singers and bands all have unique styles. Their styles are their product categories and differentiation. When you hear on the radio your favourite brands, eh bands, you need only a couple of seconds to recognise them! It is the power of brand familiarity.

You will not see successful artists changing styles. Imagine the techno artist moving into classic or the rock band becoming a euro dance band? While many artists could do many different things they have learned that if they become everything to everyone, they will become nothing to no one.
Ask yourself: is your brand focused or does it mean many different things to many different people? Is there an opportunity to focus?

Lesson 3: Grow around your core
Artists grow, they modernise their style, they adapt to society and new trends. Growth is always natural and never radical. Think about Madonna, growing her brand by catching trends and expressing them in her own unique style.

Ask yourself: how has your brand grown? Have you stayed consistent or moved in many different categories? How do your consumers / customers really see you?

Lesson 4: Familiar but new
The music industry is a master in pushing new versions of the same songs. Think about all the special mixes, never heard before versions, live concerts, remixes, remastered versions, versions with booklets, ultimate editions and more.

Even bands that do not exist anymore still keep selling new materials. For example, The Doors released six studio albums, their last official album is from 1971. This does not stop them from pushing out new materials even as recent as last week!

The keyword here is New. After all, people are interested in New and buying New.

Ask yourself: do you clearly market new features or functionalities as New? Are they the main story in your marketing?

Lesson 5: Styles go out of tune
Music styles go out of tune. For example baroque music, once super popular, it is now a real niche. The same is happening to brands. Today’s popular product categories with popular brands will turn – over time – into a niche or simply die. Think MP3 music players, vinyl albums or CDs.

Ask yourself: in what business are you really in?

This post appeared in Markkinointi & Mainonta

Coca Cola should ride, not fight

Coca-Cola Company feels pressure as the overall soda drink category is in decline. At the moment Americans drink about 167 liter of soda per year. This is a drop from about 201 liter in 1998.

Water has again become America’s favorite drink, with an increase of 38% from 1998 to about 211 liter per person per year in 2013.

At the same time there is a growing pressure to fight obesity. Even so that New York City tried to put a size limit on sugar soda drinks served in the city.
It seems though, that it is not just the sugar soda category that is in decline, it is the diet soda category as well.

To turn the wheel Coca-Cola Company started running an advertisement to defend the use of artificial sweeteners.

The advertisement has the following headline “Quality products you can always feel good about” and then goes on saying “Our use of high-quality, low- and no-calorie sweeteners, including aspartame, allows us to give people great-tasting options they can feel good about”.

Why would Coca-Cola Company defend the use of artificial sweeteners while there is clearly a trend towards natural?

In the US the growth of organic food and beverages has grown from $1 billion in 1990 to $26.7 billion in 2010. The global alternative medicine sector is expected to reach close to $115 billion by 2015. This is all fuelled by a trend towards herbal and nature-based products.

Coca-Cola Company should see this trend as an opportunity and not fight it. After all, when consumers see an advertisement defending ingredients in products it can be interpreted as coming from somebody trying to ‘prove them wrong’. Especially since the perceived honesty and ethics standards of advertising practitioners are very low. In the US they are just above the bottom two: members of congress and car salespeople.

Instead, Coca-Cola Company should ride the trend and grasp the opportunities now before somebody else will.

First, Coca-Cola Company can position Coca-Cola as the number one brand in All Natural Cola: a Cola truly made of 100% natural ingredients, no chemicals, nothing, just natural.

Second, Coca-Cola Company should consider introducing the natural Stevia sweetener in Cola products. It recently started doing that in some countries with Sprite.

The tough question to answer is: will it keep using sugar in its normal Coca-Cola and use Stevia only in the diet/light variants or will it go the full way and kill the diet/light products all together?

Either way, the soda business is up for a change, a change towards becoming more natural.

This post appeared in Markkinointi & Mainonta

Instagram out of focus

We all know Instagram, the app to take photos with your mobile, apply beautiful filters and share them. Instagram makes pretty much any photo look good! Recently Instagram added the possibility to create videos, add beautiful filters and share them.

The question is: does it really matter? Will Instagram users care, follow and start sharing videos enhanced with filters en masse?

The answer depends very much on how Instagram is positioned in the minds of users. When users think “apply filters” but say “just Instagram it” then yes, users could make the leap.

But I have some doubts. First, Instagram is simply the #1 photo sharing site for photos with filters. The core of Instagram is photos + filters, it is not the other way around. This is very hard to change.

Secondly, in the photo and video online business it is not about convergence, it is all about divergence. Flickr has done videos since 2008, but videos are really hard to find on the site. In fact, there is not a single mentioning of “video” on the flickr.com home page. The same goes with professional photo editing tools. Adobe Lightroom and Apple Aperture both provide possibilities to edit videos, but no mentioning of this feature on their main product pages.

While the adoption rate for Instagram with video will be huge and we will see plenty of users trying it out, I do believe that the better route for Instagram in the long run would have been to keep focus and continue to bring only the best possible photos + filters experience under the Instagram brand.

At the same time Instagram could have expanded the business to video by either acquiring an existing company or by starting a new brand with a dedicated focus on video + filters. This would allow the company to innovate in both categories without dependencies. More importantly, in the long run, it might bring in users who are not using Instagram for photos or don’t want to use it.

Good examples are Twitter and Vine (which is owned by Twitter). Both are about snippets of information, Twitter in text, Vine in a 6 second looping video. Both are managed under a separate brand. A case could have probably been made for Vine to be called Twitter Videos, but luckily it got to remain as an own brand and look what happened!

This post appeared in Markkinointi & Mainonta

Marimekko, do not buy the rights!

After Kristina Isola acknowledged the plagiarism of a design, it has been very interesting to see the various reactions of Marimekko, media, marketing and branding professionals. However, the most important and defining factor for the Marimekko brand going forward has been left out: managing the associations that consumers have with the brand Marimekko.

In the end, brands are merely associations in the minds of consumers. For example, Coca-Cola is associated with the real Cola drink and Snickers is associated with a peanut candy bar. Brand associations are very difficult to change. That is, until something disastrous happens and the brand owner does not deal with it properly. We have seen that happening to BP after the oil disaster in the Gulf of Mexico in April 2010. The share price has still not recovered.

For Marimekko, the most important thing should be to ensure that consumers do not change their brand association. For example, if a consumer believed before that Marimekko equals “iconic Finnish fabric design”, Marimekko should do everything it can to avoid a change of association to “iconic Finnish fabric design and possible copies”.

The decision of the company to buy the rights to designs of Maria Pryimachenko will only give more opportunities for consumers to change the brand association. Why? Because it allows the discussion to continue and most importantly, it gives a constant physical reminder of the copy scandal. The continuous opportunity for consumers to change their brand associations is very harmful and can even be fatal for a brand.

If you are convinced that buying the rights to the designs of Maria Pryimachenko is the best thing to do, I invite you to go to a Marimekko shop and imagine you see those designs. Then be really honest with yourself: what do you think and feel about Marimekko? Has it changed? How?

What could Marimekko have done to ensure that consumers would have little opportunity to change their brand associations? They should have started with a different outcome in mind: a zero change in the brand association. As a result, the company should have been very firm and confident with consumers and media.

Don’t fight the facts, but deal with them. Don’t wait and see, but act. Don’t blame, don’t dismiss but take full responsibility and publicly end the relationship with Kristina Isola. By not distancing itself strongly from her, Marimekko indirectly indicates that ‘it is not a big deal’. From the moment this crisis started Marimekko should have followed its corporate value “fairness to everyone and everything” and actively reached out to the copyright holders.

When all of the above happens in an open and transparent way, a way that consumers can come to terms with and think ‘I understand and I would have done that too’, the brand is OK and brand associations have little opportunity to change.

This post appeared in Markkinointi & Mainonta

Burger Brand Battle

Context: In Finland is a burger fast food duopoly between McDonalds (American) and Hesburger (Finnish). In May Burger King announced it would re-enter the market (their first attempt years ago failed) through a local chain called Restel.

Big news when Restel announced to bring Burger King back to the Finnish fast food market! Of course, McDonald’s quickly pointed out that the fast-food market in Finland is tight. Indeed, after Hesburger bought Carrols in 2012 the common believe might have been that the Finnish market is to small to go beyond a duopoly. Nothing could be further from the truth: with the arrival of Burger King the burger brand battle is about to start!

So, what might happen?

For the current players in the market, McDonalds and Hesburger I can only see trouble at the horizon. In general brands are strongest when they mean one thing and one thing only, like Heinz = Ketchup. This is the power of focus. Both Hesburger and McDonalds are currently not very focussed brands. Let me ask you, how would you describe McDonalds or Hesburger to your friends in a couple of words without using any marketing talk? It is quite difficult, isn’t ? I have heard some: McDonalds is the original or American, Hesburger is Finnish, there is a difference in mayonnaise etc. These are all right, but they do not help McDonalds or Hesburger to position itself clearly in the market.

Burger King on the other hand can capitalise on a very strong position: Burger King = Fire-grilled beef. So, if you want a fire-grilled beef burger you go to Burger King. When it comes to brand clarity Burger King is currently the winner!

What could McDonalds do?
McDonalds could focus on being the really FAST, fast, food restaurant. After all, a fire-grilled beef burger does imply slowness to it. Another alternative is to (re)focus around family: McDonalds, the family fast food restaurant.
What McDonalds should not do is to further increase the number of products. For example, the current MyBurger campaign does not help to increase clarity of what McDonalds is. It is merely a nice marketing activity but it is not helping to build the brand.

What could Hesburger do?
Hesburger will be in an interesting position. Being a Finnish chain in the middle of the two American giants they should play the Finnish card. This could be done through ensuring everything they sell is produced in Finland. If this means reducing items on the menu, then go for it! For example, a Fish burger made of fish from Finland. Of course, on the box you can read which Finnish fish is used in the burger. Another alternative is to play on the Finnish taste buts. Hesburger will be perceived to know the Finns best!

Now, is the Finnish burger market really so tight that there is only space for three chains?
I don’t think so! Could you imagine a chain that only and only focuses on organic burgers? I can! Or what about a chain like the In-n-Out burger in the USA that has only three top notch quality burgers on the menu? Could that work? Of course it can!

I claim that in Finland there is space for at least five burger chains… let the burger brand battle begin!

This post appeared in Markkinointi & Mainonta

Flip your brand

There are many logical reasons to line extend or stretch a brand. There could be an opportunity in a business domain close to your core business. In this case, extending the current brand into the new business area is often preferred over building a new brand, especially when budgets are tight. Perhaps the current core business is declining, and in order to survive, new business areas must be entered. Often the thinking is to save the brand in order to save the company.

Therefore, at some point most companies will think about stretching their brands. The assumption is that consumers can make the stretch too and will follow the brand into new areas, purchasing more along the way. “Consumers love our brand, so they will love our brand in the new product category too”. To prove this thinking, a healthy dose of consumer research is then conducted. And guess what? The consumers usually see an option for the brand to stretch! All good, so you think…

Unfortunately that is often not the case. In research situations, consumers are not actually buying the line-extended products. Rather, they are getting compensated to participate in the research. In reality, consumers do not always understand the extension and actually grab their wallets to make a purchase.

To find out if consumers will follow you and buy your brand in a new category, I suggest that you first try the “Line Extension Flip”. This test is a simple rule of thumb, and you don’t need any consumer research to do it. You just need a clear, open mind and lots of common sense.

First, think of your brand extended into the new target category. Then, imagine a brand already in the target category trying to extend into your current category. Finally, ask yourself, “Does this make sense?”.

I’ll try it with some examples:

Your current brand and category: Angry Birds mobile game
Your brand extended to the new category: Angry Birds children’s book
FLIP IT
An established brand in the new category: Pip and Posy children’s book
That brand extended to your current category: Pip and Posy mobile game
Does it make sense? Yes!

Current: Angry Birds mobile game
Extension: Angry Birds HDMI connector
FLIP IT
Current: BlueRigger HDMI connector
Extension: BlueRigger mobile game
Does it make sense? No!

Current: Fazer Blue chocolate bar
Extension: Fazer Blue chocolate drink
FLIP IT
Current: Oatly chocolate drink
Extension: Oatly chocolate bar
Does it make sense? Yes! (Cannot wait!)

Current: SOL cleaning services
Extension: SOL security services
FLIP IT
Current: Securitas security services
Extension: Securitas cleaning services
Does it make sense? No!

There are a couple of things to keep in mind before you start “Flipping”. First, only flip product brands. Remember, consumers buy products, not companies. Secondly, if the brand you want to extend is the current category leader, then it will have strong associations to that category in the consumer’s mind, and therefore you will find it is less likely to make the stretch. On the other hand, if your brand has no strong associations with anything in particular or has association with many things, it is more likely to be extendable. Finally, always Flip brands in the context of today’s market situation. Don’t use the Flip test to post-rationalise past decisions.

Now, try the Line Extension Flip test on your brand extension idea and let me know the outcome!

This post appeared in Markkinointi & Mainonta

DealExtreme.com -> DX.com = waste of money

DealExteme is a Chinese based gadget web store. Al products are made in and shipped from China. Shipping is for free and prices are amazing. Personally I ordered some camera equipment, like remote controls etc here.

When I was visiting DealExtreme  I noticed a big banner on their site:

I know what the folks at DealExtreme must have been thinking… we have a great website, we are selling well, we have a reputation of delivering cheap gadgets with free shipping but we want to make it even more easier for consumers to find us, so … we buy DX.com and rebrand DealExtreme to DX.com, we cannot go wrong!

Unfortunately you do go wrong because “DX” are just two letters that do not mean anything… Let’s imagine the following conversation:

  • Wow, where did you buy that amazing gadget?
  • I bought it at DX.com
  • DX.com? What is that?
  • O, it is website with great deals from China

Versus

  • Wow, where did you buy that amazing gadget?
  • I bought it at DealExtreme.com a Chinese web store

The latter makes of course much more sense as the brain does not need to figure out the meaning of “DX” and in word of mouth it does not need explaining. Abbreviations are simply not a good idea: you want people to remember your name… not your abbreviation.

 

No-nonsense brand bites since 2009