Branding Strategy Insider

Leadership is No.1

I've received some push-back on my last post on "leadership" as a powerful differentiator. Several marketers felt that being the leader is not critical to success. All right, let's spend some more time on this subject.

First, let's start with the numbers. If you study categories, you will discover a simple but startling reality about market share: Your place in the market tends to be geometric. If the leader has a 40% share, the number two brand usually has half that, or a 20% share. Number three has half again, or a 10% share, while number four has a 5% share. Believe me, over time these numbers are very accurate. This means that number one is wonderful, number two can be terrific, number three is threatened and number four can be fatal.

Jack Welsh of General Electric fame made his reputation on the following principle. He said to his people, "I want to be a number one or number two. If not, I will sell the business." What he recognized was what I call "The Law of Duality." Most markets, over time, become a two-horse race.

The bottom line supports what we have always said, "Better to be first than to be better."

Let's continue to talk about why leadership is a powerful communications message. As I wrote in the New Positioning, my 1996 sequel to Positioning, the human mind tends to be insecure when it comes to purchasing things.

Customer Service Is Dead

Back in the day, when customer service was king, I worked after school pumping gas and handing out collectable tumblers at my father’s service station. That’s what they called it back then: a service station, not a gas station.  The consistent delivery of fast and friendly service was a significant source of differentiation and, in many cases, a customer’s compelling reason to choose.  It is strikingly different today. Customers not only pump their own gas (except in New Jersey and Oregon, where the law prohibits it), they also scan and bag their groceries, configure their computers, manage their stock portfolios, and check themselves in at the airport.  On the chance occasion a customer needs assistance, more often than not it’s to have a question answered or a product exchanged.

If you take a few minutes to Google the phrase “customer service is dead” and read the horror stories listed in the search results, you’ll eventually come to believe that customer service is a quaint thing of the past.  Is it? Is customer service, as we lovingly remember it, really dead?  Is it, like the modern-day kings of constitutional monarchies, a mere symbol of a bygone era?  I think so. I can remember, as part of my aforementioned job, routinely checking customers’ oil levels.  And I was never questioned when I advised them, frequently, that they were down a quart.  When was the last time you had to add a quart of oil to your car between oil changes?  I also remember squeegeeing windows and attending to tumbler requests, never once barked at to “hurry up!” Today, the fastest of fast food isn’t fast enough.

Dangers Of Extending The Brand

One of the biggest dangers is a brand extension that repositions the parent brand in a negative light (like Bayer “aspirin-free” products or “Fat Free” Fig Newtons).  One of the trickiest extensions is creating a “value” version of the parent brand. Extending your brand up to a premium segment or down to a value segment has the greatest potential for negative impact, as a brand’s quality and value perceptions are often central to its positioning.  You don’t want to create the perception that the original brand was overpriced.

Often the best solution is creating a new brand or sub-brand.  If the market is moving away from your brand’s position, it may be better in the long run, despite the cost, to create a new brand to meet and own the solution to the evolving needs of consumers. This is a more expensive approach with a higher probability of failure and is not a brand extension.

Sponsored By: Brand Aid

Great Moments In Advertising: Leo Burnett's Speech

This speech was delivered by Leo Burnett at a meeting of the entire Chicago Burnett office on December 1, 1967.

'When to take my name off the door'

"Somewhere along the line, after I’m finally off the premises, you – or your successors – may want to take my name off the premises, too.

You may want to call yourselves " Twain, Rogers, Sawyer and Finn, Inc."….. or "Ajax Advertising" or something.

That will certainly be OK with me – if it’s good for you.

But let me tell you when I might demand that you take my name off the door.

That will be the day when you spend more time trying to make money and less time making advertising – our kind of advertising.

When you forget that the sheer fun of ad making and the lift you get out of it – the creative climate of the place – should be as important as money to the very special breed of writers and artists and business professionals who compose this company of ours – and make it tick.

When you lose that restless feeling that nothing you do is ever quite good enough.

When you lose your itch to the job well for it’s sake – regardless of the client, or money, or the effort it takes.

Top 10 Advertising Icons Of The 20th Century

Some of the best-loved ad images of the 20th century have names like Tony, Betty and Ronald. Others, like the Marlboro Man, may not be as beloved, but grew to have tremendous worldwide impact as an instant identifier of Philip Morris Co.'s Marlboro cigarettes.

From frozen vegetables to packaged cake mix, from fast food to automobile tires, these carefully drawn characters are the personifications of businesses that began small but grew to become dominant brands in their fields -- thanks in large part to their famous icons.

Many of the most famous ad icons were the brainchild of one agency: Chicago-based Leo Burnett Co., which specialized in building brands through the use of enormously popular characters, including the most effective icon of all time, the Marlboro Man.

Advertising Age's list of the Top 10 ad icons of the 20th century recognizes those images that have had the most powerful resonance in the marketplace. The criteria include effectiveness, longevity, recognizability and cultural impact.

   1. The Marlboro Man - Marlboro cigarettes
   2. Ronald McDonald - McDonald's restaurants
   3. The Green Giant - Green Giant vegetables
   4. Betty Crocker - Betty Crocker food products
   5. The Energizer Bunny - Eveready Energizer batteries
   6. The Pillsbury Doughboy - Assorted Pillsbury foods
   7. Aunt Jemima - Aunt Jemima pancake mixes and syrup
   8. The Michelin Man - Michelin tires
   9. Tony the Tiger - Kellogg's Sugar Frosted Flakes
  10. Elsie - Borden dairy products

Advertising Age has created a comprehensive site on advertising in the 20th Century.

Sponsored By: Brand Aid

BrandQuote - October 26

"The more you engage with customers the clearer things become and the easier it is to determine what you should be doing"

                             - John Russell, President, Harley-Davidson

Sponsored By: Brand Aid

The Death Of Supremacy

A few weeks ago, about 40 Christian evangelical leaders met in Salt Lake City to discuss a branding dilemma.They believe it’s in the best interest of brand USA to nominate a social conservative to lead their Republican Party into the upcoming elections. The problem is that they’ve given up on authentically principled conservatives, like Mike Huckabee and Sam Brownback, because they’re too far behind in the polls. To have any chance of beating the amoral Democrats, they’ll have to support a morally deficient front runner, like the thrice-married, pro-choice, gay-friendly Giuliani.

It appears that evangelicals are confused, and not simply about how to vote. They’re stuck in the age of supremacy, believing that behavior is best influenced through a patriarchal approach. They see the Government as the father, which must create and enforce policy that will ultimately shape the conduct of its children. They hope to grow a strong, socially conservative brand America from the top-down, through edict and control. It reminds me of the antediluvian thinking of many of today’s business leaders: brand growth through controlled rhetoric.

Behavior as Communication

In his 1971 book Silent Messages, Dr. Albert Mehrabian revealed the importance of the verbal, vocal and visual elements on communications believability. The verbal cues - what was actually being said - were dominant only seven percent of the time, the vocal 38 percent of the time, and the visual cues were the primary carrier of trust and believability, a whopping 55 percent of the time. Communications experts subsequently grabbed those insights and played up the fact that human beings are primarily visual creatures. And that’s true. But it totally misses the good doctor’s point.

What Mehrabian’s research really tells us is that people are persuaded primarily by behavior.

Brand Leadership: Differentiation Power

What most bewilders me in the marketing world are companies that don't exploit their leadership. Instead of "I'm lovin' it," McDonald’s could be, "The world's favorite place to eat." Instead of "Connecting people," Nokia could be "The world's No. 1 cell phone."

Leadership is the most powerful way to differentiate a brand. The reason is that it's the most direct way to establish a brand's credentials. And these credentials are the collateral you put up to guarantee performance.

Also, when you have leadership credentials, your prospects are likely to believe almost anything you say about your brand. (Because you're the leader.) Humans tend to equate "bigness" with success, status and leadership. We give respect and admiration to those that are the biggest.

Powerful leaders can take ownership of the words that stands for their brands' categories. You can test the validity of a leadership claim by a word association test.

If the given words are "computer," "copier," "chocolate bar" and "cola," the four most associated companies are IBM, Xerox, Hershey and Coca-Cola.

Astute leaders will go one step further to solidify their positions. Heinz owns the word "ketchup." But the company went on to isolate the most important ketchup attribute. "Slowest ketchup in the West" is how the company is preempting its product's thickness attribute. Owning the word "slow" has helped Heinz maintain a 50% market share.

Despite all of the benefits of being the perceived leader, we continue to come across leaders who don't want to talk about their leadership. Their explanation for not laying claim to what is rightfully theirs is often the same: They don't want to brag.

Of Big Tobacco Brands, Bans and Profits

Back in July England's smokers were officially banned from lighting up in pubs, restaurants, offices and any other enclosed public space. The ban almost certainly has had an impact on cigarette consumption as about one in every eight cigarettes was smoked in a pub or restaurant. The ban has eliminated these sales, yet no one from the tobacco industry appears too perturbed.

One might have expected the English ban, which follows a series of similar acts of European legislation, to cut deep into tobacco companies' profits. But despite the growing restrictions on cigarette consumption, Big Tobacco remains remarkably healthy.

In fact, shares in tobacco companies have surged in recent years, with many stocks doubling in value since 2000. For all the talk of increasing restrictions on smokers, anyone who put money into tobacco five years ago looks like a very prudent investor today. Big brands such as Imperial (which makes almost a third of its global sales in the UK) and British American Tobacco are already up more than 10% for 2007 alone.

Techniques To Retain Customers

The “lifetime value of the consumer” concept is based on the fact that it is much more cost effective to keep a good consumer than to attract a new one.  For large ticket items (automobiles) or items that require frequent purchase over time (breakfast cereals), the lifetime value of a consumer can be very high.  So, encourage young customers to buy your products and services.  This will help your business to remain healthy over time and to create a longer lifetime value of the customer.

Techniques for keeping good consumers include the following:

•    database marketing,
•    special services,
•    product customization,
•    personal touches,
•    legendary service,
•    communication that reinforces previously made purchases (especially to overcome post purchase anxiety and doubts for large ticket items),
•    programs that reward loyalty and heavy brand consumption, and
•    avoiding programs that encourage brand switching.

Can you think of others?

Sponsored By: Brand Aid