Tag Archives: Brand architecture

General

Virgin – The Extension Empire

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

Be careful when leaving the brand core – case Fujifilm

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.

 

Naming, Portfolio

Happy Socks

Happy Socks is not anymore just socks, it is underwear and now as well swimwear. How a great brand idea to turn everyday accessories into happy designed colorful items gets limited by the name.

I am a huge fan of the Swedish brand Happy Socks. In fact, my closet is full of their happy colorful socks 🙂 Happy Socks did something remarkable – 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 band name that boozes energy in a boring category works well. Their socks are truly happy compared to the traditional socks – and don’t we all need a little bit more happiness once in a while?

So, I understand that at the Happy Socks Headquarters the owners must have been thinking…. let’s replicate the success to other closely related categories like underwear. Now, I do have a couple of Happy Socks underwear items too, and it is just weird. I mean, a logo that reads Happy Socks on underwear is not the best possible combination.

 

Recently I got an email about a new line of products: swimwear. Yes, seriously – think about the following conversation:
-A- You wear cool swimwear!
-B- Thanks!
-A- What is it?
-B- Happy socks
-A- Sorry?

Of course, the core idea of the brand can be replicated to other categories as well – but in case of Happy Socks, the core brand name will forever be limiting.

In this case there are two options:
1. Stick with the category of socks – and take more market share
2. Bring the other products under a different brand

 

Do you recognise the challenges of your company in this article? Do you need clarity in brand architecture and optimising it for long term cross-sell and up-sell? Just get in touch with me. 

General

(A)lphabet, (B)rand, (C)orporate

The transition from the corporate brand Google into the new corporate brand Alphabet is a real success at the stock market. Since the Alphabet start date on the 5th of October there is an upward trend in the share price. The third quarter results announced last week made the party complete. Larry Page and Sergey Brin receive homage from investors!

Like most startups, Google had a very specific mission “to organize the world’s information and make it universally accessible and useful” achieved through a focused product: the search engine.

However, the company has thrown itself into all kinds of new product categories:

  • Calico for combating the aging process and associated diseases
  • Google X for advanced technologies such as the autonomous car
  • Google Fiber Internet and television
  • Nest for home automation (smoke detectors, thermostats, etc.)

If a brand tries to be everything to everybody, it will ultimately become nothing to no one. In Google’s case, where the most successful product uses the same brand name as the company and people use ‘to google’ as a verb, the company owners need to make a choice. A new corporate brand is the only real logical move.

Under the new corporate brand Alphabet can Google continue the pursuit its mission, while new product brands can explore and conquer other categories. This can now be done with focus and most importantly without diluting the Google brand. In addition, the new structure gives also investors more insight into where the money is spent.

Yet, this goes against the natural pursuit that many companies have: ensure a strong corporate brand identity. Too many product brands can indeed seem tiring for both consumers and employees. Both are reasons to consolidate brands under the corporate brand. Another reason may be -as in the case of Unilever- to bring the corporate brand more to the forefront to give it even more the role of authority and credibility.

Alphabet shows us that laser-sharp focused product brands may be the right tools to turn the corporate promise in broader spectrum, strengthen it and bring it to new heights!

General

Even Apple products deserve a beautiful name

The new Apple products are still very Apple and introduced to the market in an Apple way. Think different still counts.

Take Apple Photos. It is the replacement product for both the consumer and professional products iPhoto and Aperture. Apple Photos was received with criticism because of lacking functionality.

Exactly Apple!

Two existing products had to be replaced because they had to change. The fact that it will take time before the missing functionality is back is fine with Apple.

Power of the ecosystem

Then Apple Watch, the first real smart watch. Developers see opportunities through the power of the ecosystem. Again typical Apple, after all, as Jobs in 2004 said “the core technology [or consumer devices] is going to be software” and after iPod, iPhone and iPad that is also the case with Apple Watch.

And the latest addition is Apple Music, in which Apple took the old concept of Radio and give it a new look with Beats 1, the radio station that broadcasts live from different cities around the world.

The real big change

The real big change is that all these products are all brought directly under the Apple brand on the market: the strong Apple brand is followed by a descriptive name.

Apple is apparently abandoning the unique – recognizable – one word names such as Mac, iPhone and iPad for products.

This is in itself a logical “top-down” decision. In this way Apple Photos, Apple Watch and Apple Music all contribute immediately to the Apple brand.

However, if you look “bottom-up” I am convinced that when Apple had given all products unique names, such as iWatch, it would really contribute to the success of Apple. The success of iPod and iPhone were instrumental to the success of the Apple brand. You do not hear many people saying “I want an Apple”, but in stead your hear “I want an iPhone for my graduation”.

Unique names make it also easy to talk about your products. “I stream music from Beats on my iWatch” is much better than “I stream music using Apple Music on my Apple Watch”. Consider also the search query “how to edit photos in photos” which is weird in itself. In the result you find not only Apple Photos but also Google Photos. Or just search for “apple photos” and indeed you get photos of apples.

With beautiful brand-worthy products you make as a brand difference. With unique names you make it even easier to talk about them. And that is precisely the purpose of a brand!

General

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

Brand Promise, Brand Strategy, Perception, Portfolio

Netflix buys DVD.com, what’s next in the branding saga?

Netflix, once known as one of the most successful dot-com startups is going through a rough time with some serious branding mistakes. Today I read on engadget.com that Netflix bought DVD.com… why would they do that?

Seven years ago the world looked great for Netflix. In 2005 it was shipping 1 Million DVDs per day to its subscribers. Wow! Netflix had an amazing position: it simply was #1 in the DVD rental. Netflix was nicely riding on the DVD player sales. There was one problem though… the DVD player was eventually going to be replaced by digital distribution.

The Netflix folks saw that coming and in 2007 they introduced streaming under the same Netflix brand. The service became successful but times changed and in Q3 2011 Netflix lost 800.000 subscribers.

The Netflix folks saw that one coming too and decided that the strong brand Netflix should live on in the streaming business, making place for a new brand called Qwikster for the DVD rental business. A couple of months later the idea was buried.

Or… was it? Netflix has now bought DVD.com. I am sure one of the ideas of the folks at Netflix is to use that for the rental business, moving Netflix over to the streaming business forever.

Now… what is going on here? Is this really the smartest move? No it is not!

Firstly, Netflix should have retained the Netflix brand for the DVD rental business only. The brand was the number one in the category. Even though the category is dying (and with that the brand) it would have been the best thing.

Secondly, for the streaming business a second brand would have been appropriate. It is a substantial new business / category in which the company could have been number one again. This brand should have been positioned as the streaming service.

Thirdly, buying a generic domain “DVD.com” is really a waste of money. Consumers are not thinking “I’d like to rent a DVD so I go to DVD.com”,  they think “I’d like to rent a DVD so I go to Netflix.com”. The DVD.com “brand” is a waste of money.

 

General

The art of version numbers – II

Version numbers are everywhere… every piece of software,  many websites, photo camera firmware, well pretty much on anything that is software. Yet, in marketing we do not seem to get it right when communicating the meaning of version numbers to consumers.

For consumers this is rather annoying because in the end everybody can relate to numbers. 8 is perceived better than 7 and 7 is perceived better than 6. Even with sub numbers: version 5.2 is perceived better than version 5.1.

So, you might think: what is the problem? The problem comes in when we start adding the third sequence number: what is the difference for consumers between version 2.0 and 2.0.1?

I propose something very simple:

  • Version 2.0: the second version of a product, truly different/better from version 1.0
  • Version 2.1: the first iteration of version 2.0: new features are added, but it is not a complete overhaul. If it were a complete overhaul the version would be version 3.0.
  • Version 2.1.1: a bug fix release of version 2.1, there a no new features, it is just a better version of 2.1. If it would have new features it would be version 2.2.

So, let’s take a look how this works in practice with a couple of examples:

iOS software updates
These work great with the above principle: the last big upgrade was iOS 5, followed by release 5.0.1 which was a bug fixing release. This was followed by release 5.1, a feature release. All easy to understand!

Another division inside Apple follows a different approach with Final Cut Pro

Final Cut Pro
The latest release of Apple’s professional video editing software (version 10)  has not started of that well. Many of the Pro features like multi cam editing were missing in the first release. It did cost Apple lots of customers, who moved to Adobe products. Now months later Apple has made updates to its software. The latest release adds pretty much all the missing features from the first version. Yet… Apple calls this significant update version 10.0.3… For consumers just looking at the numbers: version 10 (10.), no significant updates (.0), some fixes (.3). In my view, marketing the product as version 10.3 would have clearly indicated the massive improvements to the product!

 

Version 10.0.3: significant or not so significant update?

Rather like this…

Version 10.3, this must be significant!

What do you say? Can we simplify versioning in communications?

 

General

What is a Volkswagen? (hint: their current portfolio is messy)

This morning I was driving behind a “Golf plus”. A Golf Plus? I had never heard about this car before so I decided to check out Volkswagen.de to see what other models I have missed. Turned out I missed quite a few! Volkswagen has so many models that their drop down menu does not even fit my 13 inch laptop screen. Here we go with the full list…

Volkswagen is a …

Fox, Polo, Golf, Golf Cabriolet, Golf Plus, Golf Variant, Golf GTI, New Beetle, New Beetle Cabriolet, Scirocco, Jetta, Touran, Tiguan, Eos, Passat, Passat Variant, Passat CC, Sharan, Touareg, Phaeton, Caddy, Multivan, California and then still some Volkswagen Exclusive and R/R-line ranges of some of the models…

Wow!

So what is a Volkswagen? Frankly I have no idea what it wants to be anymore, but to me it has always been the Beetle and the Golf. Check out the Volkswagen Classic website with all models between 1949-1999. I am curious to hear which models strike you as being a real Volkswagen.

There is a problem at the Volkswagen Group.  With four main brands in the <100K EUR segment (Volkswagen, Audi, Seat, Skoda) and each with an enormous amount of model brands there is overlap for sure. I wrote about VW versus Audi in the USA earlier. There has to be a way to optimize, reduce the overlaps and create clear(er) identities. This will prevent in the long run each of the brands at the Volkswagen Group to lose meaning and long term profitability.

General

The art of version numbers

Yes I love Canon cameras, they are just great! So I am following the Canon brand and see how they can improve themselves.

So yesterday Canon made the long waited firmware update for the Canon 5D Mark II available. The firmware update now allows the camera to record movies in 24p frame rate. This is a huge deal in the movie world because of this frame rate gives a film like experience. So, it is fair to say that pretty much every Canon 5D Mark II owner has been waiting for this update.

So… think about the massive marketing opportunity Canon has in the professional camera market… its huge! And what would now have been better than keeping it simple and calling the firmware simply version 2.0 and not version 2.0.3. It is the second iteration of something that was already great, that is why it is version 2.0. Everybody gets that.

How beautiful would it have been to call the second itteration simply Firware Upgrade 2.0 ?