Branding Strategy Insider

Complexity: Enemy of Brand Positioning

Over the past five years I have observed some outrageously successful brand executions. But for the most part, I have watched large organisations 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.

Ultimately, if we are successful, positioning will drive the company's behaviour to such a degree that it will appear in customer research as the things customers notice about that company. Unfortunately, most companies have such complicated positioning at the heart of their brands that there is no chance that this simple process will occur. Instead of a simple, tight definition of what the brand stands for, we find brand keyholes, triangles, wheels and dictionaries - layer after layer of complexity that will only serve to kill the brand's execution.

It's like the game of Chinese whispers. Whisper a complicated word into the ear of the first person in the group and by the time it reaches the end of the chain it has warped into something different. Whisper a simple word and it stays the same along the line. In most companies the positioning is so complex that even the originating brand manager, on closing the laptop holding the presentation, can't remember what it was. What hope, then, for the consumer at the end of a chain that spans strategy, marketing, sales and retail before reaching them?

Why so much complexity? The main reason is that brand managers believe the positioning is so important, and has taken up so much time and resources, that complexity equals greater impact. In reality, less is more. Finding one word for the brand is much harder than finding eight. Positioning is not like throwing shit against a wall - the more you throw at it, the greater the chance of something sticking.

Target Marketing and Greater Profitability

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.

B2B Purchaser Motivations

These purchaser motivations are usually present in B2B buying situations:

•    Price
•    Perceived quality
•    Technical specifications
•    Warranties
•    Other service or post-sale support
•    Financial stability of the seller
•    Buyer’s past experience
•    Organizational policies
•    Fear of making a mistake
•    Friendship
•    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

Worthless Brand Values

Visit any FTSE 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.

A correlation exists between the brevity of a brand's positioning and its potential to succeed. That success hinges on ensuring that the positioning is not only tight, but right. It is hard to know whether your positioning statement is right, but it is far easier to determine whether it is wrong.

Most companies use the same tired values to position their brand. Three brand values repeatedly emerge. This unholy trinity is generic, worthless and sadly symptomatic of indolent marketers who apply a branding-by-numbers approach to this most vital and unique of challenges. Irrespective of format or length, if your brand positioning contains any (or all) of the values described below, I steadfastly predict imminent failure to build the brand.

The first is quality. Quality is a multidimensional concept. It can mean hundreds of different concepts: luxury, reliability, rarity, performance, taste, durability, speed and slowness, to name a few. If the point of positioning is to focus the brand, why do it on something that means different things to different people at different times? If you cannot be specific about your brand in its positioning statement, everything that follows will be equally vague and mundane.

Tag Heuer's Textbook Brand Extension

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.

The Brand Differentiation Mandate

In 1960, an advertising agency chairman named Rosser Reeves was known as the high priest of hard sell. He wrote a very popular book titled "Reality in Advertising." His book was translated into twenty-eight languages and was widely used as a college textbook. In many ways it was the beginning of modern-day marketing.

In his book he introduced and defined a concept called the unique selling proposition, or U.S.P. for short.

The Definition

To Rosser, the U.S.P. was a precise term so he gave it a three-part definition:

1. Each advertisement must make a proposition to the consumer. Not just words, not just product puffery, not just show-window advertising. Each advertisement must say to each reader: "Buy this product, and you will get this specific benefit."

2. The proposition must be one that the competition either cannot, or does not, offer. It must be unique -- either a uniqueness of the brand or a claim not otherwise made in that particular field of advertising.

3. The proposition must be so strong that it can move the mass millions (i.e., to pull over new customers to your product).

He went on to say that most advertising in that day was "the tired art of puffery." There was no real message. Copywriters who did not understand reality wrote these advertisements.

Well, you might think that this was an argument of the past and that Mr. Reeves's ideas have long been accepted by today's advertising practitioner.

Wrong.

The Argument Still Rages

InBev: Catalyst for Bud Brand Crisis?

Earlier this month, US brewer Anheuser-Busch finally acknowledged that it had received a bid of $47.5bn (£24.2bn) from InBev to buy the firm. It is a massive potential deal.

InBev, based in Belgium, markets brands including Stella Artois and is the second-biggest brewer on the planet. Anheuser-Busch, based in St Louis, Missouri, is fourth, and famed for producing Budweiser.

In finance circles, the deal is widely seen as a winner. InBev has made a cash offer, which means Anheuser-Busch shareholders have the simple choice of taking $65 a share from it, or believing that Anheuser-Busch has a strategy that will see the current pre-offer share price of about $45 exceed the InBev offer in the near future.

Other analysts are sceptical. Like many major US businesses, Anheuser-Busch has been slow to expand globally and its performance has been flat in the US, where its 49% share of domestic beer sales limits the potential for further growth. The deal is seen as particularly strong because InBev does not have a strong position in the US, while Anheuser-Busch is weak internationally.

However, there are some strong reasons why the deal might not make sense from a branding point of view. One could assume that a firm such as InBev, with 200 brands and a market value of $50bn, would be a proven builder of brands, but the company is only four years old. It was created from an amalgam of deals including the acquisition of Labatts in 1995 and Bass in 2000, and Interbrew's 2004 merger with Brazil's AmBev.  Most of InBev's success, to date, has been derived from successful acquisition and strong cost management. The current questions about Stella Artois, InBev's leading brand in the UK, suggest that the company may not be the best custodian of Budweiser's brand equity over the long term. InBev may be an expert in acquiring brands, but its record in building them remains unproven.

Another worrying facet of InBev's approach is that it will almost certainly be looking to cut costs if the deal goes ahead.

Great Moments in Naming: Apple

"Steve (Jobs) came up with the name. He sometimes worked on orchards up in Oregon. I don't know what kind of orchards they were, but I assume there were apple trees there. I don't ask people where they get their ideas, and Steve doesn't tell. My first comment was, 'What about Apple records?' He said, 'Oh, that's a record company. This is computers.' "

                                         - Steve Wozniak, Apple co-founder

Sponsored By: Brand Aid

Color Psychology in Marketing

What colors have you chosen for your marketing materials? What were your reasons for making that particular choice? Was it because you liked those particular colors, or did you have a particular marketing message in mind? While visual appeal is an important consideration, your color choices could be sending a specific message to the people who view them. Are you sure you know what that message is?

You'd be wise to consider the psychology of color when designing your marketing materials. Be it business card, brochure, web site, posters or other material, you'll be making color choices. Colors not only enhance the appearance of the item -- they also influence our behavior. You will do well to consider the impact that the colors you use will have on your target audience.

For instance, have you noticed that most fast food restaurants are decorated with vivid reds and oranges? It's no accident that these colors show up so frequently. Studies have shown that reds and oranges encourage diners to eat quickly and leave -- and that's exactly what fast food outlets want you to do.

It's also no accident that you see a lot of reds and blacks on adult web sites. These colors are thought to have sexual connotations.

Ever notice that toys, books and children's web sites usually contain large blocks of bright, primary colors? Young children prefer these colors and respond more positively than they do to to pastels or muted blends.

Market researchers have had a field day identifying the colors and the likely effect they have upon us.

The Business Impact of Strong Brands

What is the business impact of strong brands?  Why are strong brands so important?

•    Brands deliver the following key benefits to organizations:
-    Increased revenues and market share
-    Decreased price sensitivity (or the ability to charge price premiums to consumers and the trade)
-    Increased customer loyalty
-    For manufacturers, additional leverage over retailers
-    Increased profitability
-    Increased stock price and shareholder value
-    Increased clarity of vision
-    Increased ability to mobilize an organization’s people and focus its activities
-    Ability to attract and retain high quality employees
-    A strong, well-positioned brand extends the life of your organization indefinitely by providing independence from a particular product category, increasing flexibility for future growth (through extension), and therefore, increasing the ability to expand into new product and service categories and alter the product and service mix to keep up with marketplace demands.  Without a strong brand, your organization’s life span will be tied to the life span of the products it manufactures or the services it provides.