Over the past five years I have observed some outrageously successful brand executions. But for the most part, I have watched large organizations wasting millions of euros/dollars on attempts to position their brands in ways that can never succeed. In this post, I will share one of the great brand positioning lessons I have learned; simplicity – or rather, the lack thereof.
When I talk to marketing managers, their market segmentation study is usually one of the greatest sources of professional satisfaction. But my next question usually brings the conversation to a standstill.
'And which of these segments are you targeting?' I enquire.
At this point the marketing manager looks down at the segments, looks back up at me, looks back at the segments and finally says: 'Well, er, all of them.'
Unfortunately, most marketers operate under the fallacy that the bigger the potential pool of customers they target (namely, all of them and any others who happen to cross their path mid-execution), the bigger the resulting market will be.
This is nonsense. While sales managers think that the more targets there are, the better, marketers realise that all customers are not created equal, and that a key challenge in marketing is identifying which customers are more equal than others.
There are several reasons why you should target only a select group of the segments in your market. First, because you can concentrate your resources on one group rather than spreading them too thinly.
These purchaser motivations are usually present in B2B buying situations:
• Perceived quality
• Technical specifications
• Other service or post-sale support
• Financial stability of the seller
• Buyer’s past experience
• Organizational policies
• Fear of making a mistake
• Seller’s interest in buyer’s business
• Persuasiveness of seller
Source: The Nuts and Bolts of Business-to-Business Marketing Research, Gabriel M. Gelb – Gelb Consulting Group, Inc. as featured on CRM University Learning Center
Sponsored By: Brand Aid
Visit any Fortune 500 company and ask the first 10 employees you meet about their brand. Not one, barring the brand manager (if you are lucky), will have a clue what values or positioning they should be delivering to customers. Their attention and potential support was lost long ago when a sea of circles, triangles and keyholes containing brand personalities, traits, values and attributes washed over the heads of an unsuspecting workforce.
The rumours began in 2007, and ran rife throughout the annual Baselworld Watch Fair in April. This month we have official confirmation: Tag Heuer is about to launch a mobile phone.
The Tag Heuer Meridiist will be assembled from 430 components and constructed from the same corrosion-resistant steel and unscratchable sapphire crystal used in the brand's luxury watches. The first glimpses of the phone online reveal a sleek, masculine design, very much in line with the style of Tag's watches. The time display on the top of the phone adds an innovative twist that tips its hat to the brand's origins. The Meridiist will go on sale in the UK in September through select watch and jewellery retailers, priced at about £3000.
This is a textbook brand extension. Tag Heuer is a very successful watchmaker, but, like most brands, it is not averse to exploring additional sources of revenue by launching products into other categories. A successful extension can also reinforce a brand's position due to the increased publicity and consumer excitement that it generates. In Tag Heuer's case, the Meridiist will also cement its position as a leading brand among watch retailers, which will vie to stock the phone.
But what about the downsides? Will the Meridiist dilute Tag's brand equity in its original category of watches? If it turns out to be a disappointment, will it damage Tag's exemplary image? The short answer is no. Too many marketers continue to labour under the misconception that a bad brand extension represents a hazard to the parent brand's equity. However, a mountain of research has now been compiled in Europe and the US indicating that it is extremely difficult for an extension to damage a brand's reputation in its original category.