Tag Archives: Focus

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.

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

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

Amazon.com, the online retailer where we used to shop

The other day when visiting Amazon.com I got a surprise: a new home page!  I guess Amazon is testing and therefore spreading the new home page in the wild with some customers.

The new home page shows the new direction of Amazon. In fact it is a long departure from the Amazon that we all know so well. You know,  the company that sells physical goods, “Earth’s Biggest Retailer“ and has a well earned number one position.

Not so any more. Today Amazon reinvents themselves as a digital retailer. What a really bad idea.  I wrote earlier about Amazon and their line extension move to digital. There were clear signs that Amazon might fall for the line extension trap.

Let take a look at the new home page:

Now take a close look at the categories:

  • Instant video
  • MP3 store
  • Cloud Player
  • Kindle
  • Cloud Drive
  • Appstore for Android
  • Game & Software Downloads
  • Audible Audiobooks

Hang on a minute? Where are:

  • Books
  • Film, Music, Games
  • Electronics
  • Computers & Office
  • Home, Garden, Pets
  • Toys, Children & Baby
  • Clothes, Shoes & Watches
  • Hobbies, Sports & Leisure
  • Grocery, Health & Beauty
  • DIY, Tools & Car

Clearly, in the “new” Amazon these are not as important anymore. It is now all about digital.

Let’s get somethings straight:

  • Amazon is currently in traffic #5 in the USA and #15 globally (via Alexa.com Sep 25)
  • Amazon is the undisputable #1 online retailer “Earth’s Biggest” both in numbers and in consumers mind
  • Some of Amazon product categories are challenged by more focussed brands like Diapers.com, Drugstore.com, Bookrepository.com and many more, but Amazon has still competitive advantage over many of the challengers by offering Amazon Prime (‘free’ shipping for 79USD per year) across all the product ranges.

Now, Amazon wants to “expand” the business and moving into digital. In other words moving from a category in which it is number one to a category it will need to compete really hard against established brands like  iTunes, Spotify, Pandora, Skydrive and many more…

The big question for me is: what are the guys at Amazon HQ’s thinking? Why dilute the meaning of the Amazon brand by entering in the digital space? You did it right with Kindle (you did not call it the Amazon reader) and MyHabit  (you did not call it Amazon Fashion Goldbox) and you should have done exactly the same with digital.

Keep your brand where it is established, especially when it is number one in a category and create a new brand for digital, that is what Amazon should have done.