Tag Archives: Focus

Brand Promise, Brand Strategy, Perception

Starbucks from Coffee to Wine to Food to Focus ?

Starbucks is the miracle story of a US-based company becoming the expert globally in selling quality coffee. The company gave us the concept of an extra living room, or as Starbucks says,’ the third place between work and home.’ The coffee is not cheap, but the perception (supported by the price) is that you get a quality cup. The company has tried several times to break out of the Coffee category but time after time realises that Focus on the Core remains the best strategy.

Back in 1971, the company was all about Coffee, Tea, and Spices. In 1987 the founders sold the company to Howard Schultz. Under Schultz, the company focused on coffee. It created a new logo, and gone were the Tea and Spices. The new logo linked the brand and category. Starbucks = Coffee. As a result, the company went through massive growth. Between 2005 and 2011, revenues increased from 494M to 1,246M, a staggering 152%.

By the end of 2010, the company was ready for more growth. The company took the thinking of a ‘third place between work and home’ to a new level. Their customer-led research revealed that ‘Starbucks customers are also wine enthusiasts’ and ‘Starbucks customers love beer too’. There was a demand for a casual meeting environment in the evening hours. Starbucks was going to fulfill that role and serve the customers what they enjoy: wine and craft beer. Starbucks became so much more than coffee alone. The logo was updated to reflect that. ‘Starbucks Coffee’ was removed.

The Starbucks website introduced the Evenings program :

‘Starbucks customers are already enjoying coffee at our stores in the evening, and now, they have more menu options including wine, craft beer, and small plates.’

‘Rachel Antalek, Starbucks in-house sommelier, led the Evenings team as they explored the world of wine, looking for the most interesting assortment that’s not only delicious, but a great value as well. The team evaluated different varietals of wine to offer the complex and unique flavors that customers expect from Starbucks.’

The menu consisted of ‘Savory small plates’ and ‘Perfectly paired wines’. Some tasty examples from the menu :

Truffle Mac & Cheese
Chicken Sausage & Mushroom Flatbread
Meatballs with Tomato Basil Sauce
Truffle Popcorn
Wines – Sparkling, White, Sparkling Rosé and Red
Craft Beer

The program grew eventually to 400 stores in the U.S. and locations outside the U.S. The 2015 annual stakeholders meeting listed the Evening Program as one of the seven strategies for growth :

‘By the end of 2019, we will double food sales in the Americas through breakfast, lunch, snacks and the Evenings program. We will grow our food business in the U.S. from 18% to 25% of revenues by the end of 2019 adding an additional $2 Billion to our base business.’

In 2016 Starbucks stopped the program. It failed. The official reason was a ‘counter service format’ issue:

‘It appears that this strategy did not work, especially since table service in the evenings conflicted with the counter service format in the mornings.’

Of course the Evenings program did not fail because of the counter service format. The Starbucks company forgot that the position of the brand in the minds of people is just Coffee. It was never about Evening food, wines, and craft beer. Just imagine people saying, ‘Let’s get a glass of wine at Starbuck’. Starbucks is not going to replace wine establishments or bars.

Once companies have put their minds to something, they do not give up. So Starbucks decided to take all the learnings from the Evening Program to create high-end Roastery stores. In 2019 Starbucks introduced six Reserve Roasteries around the world, in Seattle, Chicago, New York, Shanghai, Milan, and Tokyo. The Starbucks Reserve Roasteries serve ‘unique food and beverage experiences’. Once again everything is directly connected with Starbucks the coffee brand.

Starbucks keeps trying because food is a huge growth area. The mistake the company makes is to enter the food category with a coffee brand. Starbucks could have done a couple of things. First, it could have reinforced its leadership position in coffee by bringing the unique Reserve and Barrel-Aged Coffee from the Roasteries to some of its locations. Additionally, Starbucks should have expanded outside the box with the Conquer Strategy. Launch a new brand to grow in the evening food and drinks category. The new brand should operate in new locations, closer to where the bars and restaurants are.


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

 

Positioning

Will COVID19 force brands to get back to their core?

Looking back to the world prior COVID19 feels like a long time, most markets were growing and the economy was doing just fine. Companies focused on growth, and usually, that meant expanding the line with new products, trying to target different segments or purchasing companies.

Now when thew world has literally come to a standstill things have changed. And they have changed a lot.

The one thing that happens during every crisis is that both companies and people get back to focus on what is really important. For companies, this means going back to what made them memorable in the first place. All the activities beyond the core start to become the subject for discussion.

At my company, Monday Brand we have gone through a self-evaluation process as well. When we started back in 2012 the focus was on Brand Positioning and optimizing Brand Architectures. To facilitate brand ownership of positioning and architecture within client companies we started offering very successful In-Company Activation programs. Because after all, it is the people that need to make it happen!

And then it happened… our clients asked for more, which is a very natural thing when you like what someone does for you. And so we added Brand Identity Strategy to our services, helping our clients to translate the positioning into an authentic brand expression. In some sense it was perhaps one step too far, bringing us closer to full-service agencies and therefore undermining what we truly stand for.

So, today we decided to go back to the core and focus only on three services: Positioning, Brand Architecture and Company Activation.

In January we started thoroughly reviewing our services, and since then we made updates to incorporate the very latest thinking and approaches allowing us to be even more effective. As we work mainly internationally, one of the guiding principles has always been that everything we do has to work fully through ZOOM.

When COVID19 happened we were prepared – we are more focused on our core and in these times of physical distancing we will continue to work through ZOOM serving our clients globally.

In case you recognize as well the need to focus on your core within your company or personally and want to discuss more, then please contact me at michiel at mondaybrand.com.

Stay safe, stay healthy!

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. 

Brand Strategy, Portfolio

Mircosoft goes back to the future with renewed focus on productivity

It took a while, but slowly but surely Microsoft is becoming the company that truly stands for productivity.

Microsoft is going to make real strides in translating the brand into products and propositions and become again the company that stands for productivity; exactly as we came to know it.

After all, productivity is where the brand started for the masses. Think of the IBM PC with MS-DOS, first used in the business environment.

With the introduction of Windows and Office, it was, of course, completely clear: the combination in the workplace and synonyms for productivity.

Even the competition recognized this positioning. Apple made some jokes about PCs and PC users in its Mac vs PC ad, but deep down it was a character sketch of creative versus productive. This is also exactly the difference between the Office Suite and the Apple iWork Suite. One is focused on productivity, the other primarily on creativity.

Now it is clear again to Microsoft itself what the core of the company is. In an email, ceo Satya Nadella says that “at our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.’

The recent repositioning of the Surface tablets towards productivity is already a great example. In 2012, the Surface was launched as ‘a laptop in a tablet form’. Very inconvenient when the obvious trend is that the number of laptops is decreasing. In addition, the Surface had all sorts of problems such as a sky-high price (nota bene more expensive than a laptop with touch), moderate battery consumption and lack of applications. Due to its unclear positioning, the Surface was compared unfavorably to iPad, the #1 in the tablet category.

The new Surface website now provides more clarity. A translation of the brand into propositions is visible. I read ‘Surface – the most productive tablets on the world’. Of course this could have been even sharper, for example ‘Surface – the first tablet focused on productivity’ with a headline like ‘finally, a tablet that can replace your laptop’. But the beginning is there.

Now that Microsoft’s core is crystal clear, it needs to make a clear choice and then, of course, go for it. The recent news of 18,000 job cuts will certainly contribute to this. For example, how does the Xbox gaming platform fit with productivity? How does Nokia phones’ focus on their photographic capabilities fit with productivity?

If the brand is truly providing direction, then the character or values of the brand can be used as a compass. Creating and executing branded products & propositions then becomes easier. And consumers understand exactly what you do and-importantly-how you make a difference.

This article was published in Adformatie (Dutch).

General

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.

Brand Strategy, Portfolio

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

Brand Strategy, Positioning

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

Portfolio

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

Brand Strategy

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.