arrow7 Comments
  1. Luis G de la Fuente
    Sep 03 - 2:43 am

    I think your ‘iceberg’ metaphor between category and brand is very accurate. I wonder then what´s the most suitable name for a brand in a new category…

    1) should the entrepreneur choose the name of the category itself?
    2) or should we look just for some ‘easy to remember’ word?

  2. Pam
    Sep 03 - 10:35 am

    It will be interesting to see if Polaroid can deliver with the head of the Petters Group. Tom Petters is under federal investigation for fraud in Minnesota.

  3. Derrick Daye
    Sep 03 - 10:49 am

    Thanks Pam.

    If Polaroid does deliver they’ll being doing so without the help of Tom Petters as he has resigned.

    link to minnesota.publicradio.org

    Best,

    Derrick

  4. Brad VanAuken
    Sep 03 - 11:16 am

    It is problematic for brands when they become synonymous with a product category, which most do. If the category evaporates, this type of brand usually follows closely behind the category. I always try to move brands beyond categories to the fulfillment of a distinctive set of customer benefits. Disney delivers “fun family entertainment” in multiple product categories, from theme parks and movies to cruises and more. Starbucks was created based on the insight that people long for a place in between the responsibilities of work and home where they can relax and be pampered. The degree to which Starbucks has taken its coffee out to places where this promise cannot be fulfilled (such as airplanes and rest stop kiosks) more closely links the brand to coffee instead of “rewarding everyday moments.”

    When I was at Hallmark, I tried mightily to move the brand from “greeting cards” to “caring shared,” not only to avoid the demise of the brand with the demise of the category but also to provide it with numerous growth opportunities (as long as they supported the brand promise). I was pressing the company to add chocolates, flowers and other “just a little something” gift categories to Hallmark’s offering to expand its meaning. I still think Hallmark could offer romantic cruises under its name one day. Here is the problem. Most organizations are primarily operations focused and they are tied to specific product formats, manufacturing capabilities and distributions channels. The carefully thought out brand extensions that would expand the brand’s meaning are usually outside of management’s comfort zone.

    Extending brands to encompass broader customer meanings can and should lead to life immortal for those brands if carefully managed. The trick is to enter other categories that fulfill the same customer promise as the brand’s core categories in a way that the brand can excel in those categories too, and here is the tricky part – before the core categories begin to decline. It is very difficult to expand the meaning of a brand whose category has already significantly declined.

    So, here is what I think Kodak should have done. It should have tried to aggressively own digital photography and cameras (as a way to own a broader customer benefit) before the film business began to decline. It needed these additional product proof points. This is easy to recommend, but largely unpalatable to actually do. What company is willing to accelerate the demise of its core business before it absolutely has to?

    So, what was Kodak to do once traditional (non-digital) photography began its freefall? Quickly switch to digital photography? But doesn’t that require owning quality cameras in people’s minds? And, isn’t this space already owned by a few major competitors? Could owning the printing technology help them in this regard? But, HP is a formidable competitor in this space. Should they have taken their core competencies – emulsion coatings and other chemistry based processes/solutions and sold them in other categories on a B2B basis under the Kodak or other brand names?

    The brand is owned in the mind of the customer – period. Your brand is either synonymous with a product category or something else. If something else, it would be your good fortune (and perhaps, the result of your hard work) for it to be linked with a compelling customer benefit, one that allowed your brand to enter new product categories over time. This is what brands should strive for. You will know if you have gotten there, if through research you are able to verify that your customers are now linking your brand with a benefit rather than a product category. Good luck. This endeavor is well worth it in the long run – if you can pull it off.

  5. Craig
    Sep 03 - 12:26 pm

    Petters no longer owns Polaroid. It was bought by the brand related group at Gordon Brothers with the help of a few other brand players. Its been a fully licensed out brand for a while, and they are looking at reigning it in to relaunch it.

    link to dealbook.blogs.nytimes.com

    Polaroid isn’t a great example for this as the company has been run for a while based on extracting profits based almost purely on name recognition, not really brand positioning. GB and Hilco might change that. We looked at it during Petter’s acquisition, and we thought about it again as a potential acquisition when it was being sold from Petter’s. Its an interesting story, but probably a great one for Al’s point.

    While I agree with some of Al’s post here, it feels a little strange. Plenty of brands have plenty of value when they don’t stand for a category. Otherwise, there would only be about 15 valuable brands in the apparel space. Instead, that space has many brands that “stand for” lots of sub-categories and have plenty of value because they own differentiated positions that allow them to collect (i) higher profit margins (because they can charge a little more, or don’t incur as much customer acquisition costs) or (ii) more volume shelf space because of consumer preference for the brand. Even Rolex as he’s sited, doesn’t stand for watches. It does dominate luxury watches , but given that its ranked at about $5.5b of value and Cartier, which competes with Rolex in the space, but doesn’t dominate the space has $4.9 billion of value, hard to see such a clear cut difference. (#s are from 2009 Brandz100.)

    I think “Brands are important, but they have value only to the extent they stand for categories” is a bit of an oversimplification. While a brand may be falling, $67 bilion of value is still quite a bit of value. Certainly what to do to maintain that value in light the of industry changes is a massive challenge for all brands of that size. However, dominating a category isn’t necessarily the right answer. Dominating a category that has no profits often leads to BK, not value, so it seems there’s a bit of a counterbalance needed here.

    While I agree that brands can get lost if their categories decline, brands can also survive if they pay attention. I’m 100% sure that if Coca Cola was trying to still sell only fountain based soda from soda shops, it would be out of business or a tiny little brand. That category is now minuscule, but Coke survived the change in spite of the demise of the category.

    Looking at the BrandZ100 list:

    IBM: Much heralded, much documented changes in its business from international business machines to servers, to PCs to service, to, well, not even sure what it is today, but its brand value is 4th on top 100 at $66 billion.

    GE: A company that has owned and dominated many products and brands in its history, many of whom have died and gone away. General Electric products – was it on this blog that it was referenced that people still have opinions about GE blenders, but there hasn’t been a GE blender made in well over 7 years? brand value $59 billion.

    I think dominance of a discreet differentiation is absolutely key to a brand having value. I also think that dominating a category can increase that value. Icebergs as a metaphor work nicely to describe the deep vs wide knowledge concept, especially since they change over time. But even an iceberg has to float, and that requires a bit more balance than I think this post brought to my mind.

    -Craig

  6. Craig
    Sep 03 - 12:51 pm

    Brad:
    Your response makes sense to me. Many a thought in there I could have just inserted into what-I-see-is-a-diatribe that I wrote this morning…

  7. Adalberto Oliveira
    Sep 09 - 11:15 am

    Craig,

    Google has transcended it’s category (Internet search) a long time ago. And I think that it has contributed to the enormous Google Brand value increase.

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