The Blake Project, the brand consultancy behind Branding Strategy Insider, delivers interactive brand education workshops and keynote speeches designed to align marketers on essential concepts in brand management and empower them to release the full potential of the brands they manage.
My friend and colleague Erik du Plessis once observed to me that “survival of the fittest” was really a misnomer and that it should be “death of the least fit.” As he noted, the lion gets up every morning knowing that it just needs to be faster than the slowest buck, and the buck wakes up knowing it just needs to be faster than the slowest in its herd.
His comments are entirely relevant to the analysis presented by Chemi in Bloomberg Businessweek. Companies and brands do not need to be the best in their industry to survive, they simply need not to be the worst. However, another factor not considered by Chemi’s analysis was price. If a brand wants to command a price premium it needs to offer a better than average experience and be seen as different in a good way.
If all the companies in a product or service category are viewed badly by consumers, then it may not matter if they are dissatisfied with their current choice since they have no obvious alternative. Lacking alternatives they simple have to tough it out, getting more disgruntled and resentful the longer the poor experience continues. Particularly where service contracts or annual fees are involved, people will have limited opportunities to switch and prior experience of changing provider may prove painful and futile. Of course, from the company viewpoint it is a great business model to have customers who feel trapped and feel they have nowhere to go. You can squeeze as much profit out of them as possible… until, that is, someone comes up with a better offer.Read More
David Aaker thinks that it will be decades before Chinese companies are ready to develop strong brands capable of competing on the global stage. While I do not agree with his blanket assessment, I can personally vouch for one of the reasons he cites for his point of view. Unless senior managers at Chinese companies value the power of branding, then investment in brand and advertising will likely be wasted.
One thing that interests me about Aaker’s assessment is that it apparently ignores the fact that Chinese brands do not need to go global in order to scale.
China is a big market now, and McKinsey estimates that the number of households with an income over US$16,000 will increase by a factor of five in the next 10 years. However, many Chinese brands do aspire to go global, so let’s have a look at Aaker’s rationale for why they are unlikely to succeed.
First, Aaker asserts, existing multinationals have a set of brand management systems and tools that are lacking in Chinese firms. This may be true, but in high growth markets like China, even multinationals are struggling to attract people who can utilize those tools effectively. Another important point is that working from a Western playbook does not always work in China, and it would be wrong to assume that Chinese companies lack creativity when it comes to marketing.Read More
It is an indisputable fact that purchasing in product and service categories obeys the law of Double Jeopardy. This is – stated at its most simplistic – an empirical generalization that higher market share brands achieve stronger customer loyalty than lower market share brands in the same category. But the thing that always intrigues me is whether all brands obey the Double Jeopardy law to the same degree all of the time.
Take pretty much any data set at a point in time and plot brands on a graph comparing a penetration metric with a loyalty metric, and you will find a consistent relationship between the two; the higher a brand’s penetration the higher the loyalty. The metrics could be awareness and claimed trial, familiarity and favorable brand attitudes or actual penetration and repeat purchase, and the pattern will be there and favor the bigger brands. The obvious conclusion to be drawn from Double Jeopardy is that to grow market share, a brand must first grow its customer base.
But Double Jeopardy only holds if brands are broadly substitutable and appeal to the same target audience. And having spent more time than I care to think about looking at brand scatter plots like the one described above, I have noticed that some brands manage to break away from the category relationship. A few appear to do so on a consistent basis, and others do so only temporarily. Brands that manage to achieve a higher loyalty than is predicted by the category relationship tend also to be the ones that have managed to innovate, and create a perception of meaningful differentiation versus the competition. The ones that fall short tend to be premium brands that have lost their differentiation.
This observation makes me wonder if over time brands tend to revert to the category mean. In other words, from time-to-time brands find a way to innovate – either tangibly or intangibly – creating meaningful differentiation that allows them to command more loyalty than their size would normally dictate. But competitive pressures then erode that advantage, returning the brand to the category norm.Read More
One of the consistent findings from ad pre-testing and tracking research is that bits of ads go missing from people’s memories. A key reason for this finding is that our brains can’t deal with too many concepts at one time. I am not just speaking for myself, there is plenty of evidence that our conscious work space is limited, and things that don’t make it to our conscious attention, get forgotten.
So how does this memory loss happen? It all has to do with how our brains work. Our brains are incredibly good at focusing our conscious attention on things that are emotionally charged and relevant to us, and ignoring everything else.
Think of the “cocktail party” effect, where we can suddenly hear our name being mentioned across a crowded room, even though we were not previously conscious of that specific conversation taking place. The use of our name – something emotionally charged and relevant to an individual – implies the conversation could be important to us so our conscious attention is drawn to it.
The downside of the “cocktail party” effect, is that the conversation we were having with the person next to us, gets ignored for as long as our attention is distracted. A few seconds later, we suddenly realize we have no clue what the other person was saying to us.
The same sort of effect takes place in video ads. Our attention gets directed to interesting and enjoyable aspects of the ad – the emotionally charged and relevant bits – and that distracts our attention from other elements. No attention, essentially means no memory.Read More