Feb 24, 2010 | Branding, Innovation, Marketing
It seems that most innovation is aimed at getting more of the same for the same price, rather than making the experience with the product better.
Every time I see an ad for a new car, it seems to have more airbags, more electronic gizmos to go wrong the day the warranty ends, but who really needs it all to get from point A to point B reliably, comfortably, at a modest cost, which is the point of having a car.
Surely it is time to innovate backwards, do less, strip the glitter, simplify.
I used to shave with a single blade, now I am a poof unless I shave with five, my stringy beard is not five times tougher than when I was 21, just a bit more gray worked its way in.
Two businesses, Gillette and Intel have led the way in adding features that they think will give them a marketing advantage through differentiation, and then turning them into benefits.
For a funny, sarcastic view of the trend to complication, follow the link to the Onion site, and have a laugh.
Feb 22, 2010 | Branding, Marketing, Sales, Small business
What will be the continuing impact of the development of housebrands by retailers, and the current heightened value awareness of consumers? Most FMCG suppliers lose sleep over the retailers undermining their profitability by hogging shelf space with far cheaper imitations of their brands, brought to market overnight without much concern about the long term health and development of the category, but delivering short term profitability to them at the expense of their suppliers.
This apparent duplicity, retailers demanding innovation and category building activity from their suppliers, whilst undermining their ability and willingness to invest has to have its limits. Clearly, the old mass market model of branding is over, but what has replaced it?
Increasingly I see the evolution of focused brands and retailers serving the more niche markets, and segments of larger markets where something different is being delivered to customers. Retailers are enabling a new breed of supplier with deep category expertise to emerge at the expense of the older mass market model, and they are in turn fuelling the growth of specialist retailers.
Feb 21, 2010 | Branding, Management, Marketing
Many brands over time have been built by using “mystique” as an ingredient, generally in the form of information withheld, scarcity, price, and the stories that surround the product.
In this connected world, we are bombarded with information, almost everything we could think of to ask is there, a few clicks away, and so it has become counter-intuitive to build a brand based on a lack of information.
Could we build Coca Cola from scratch today, its “secret” recipe held in a bank vault? Would that story hold, or would an employee be on a blog giving us the recipe, and dismembering the bank vault story.
There is a marketing trade-off to be made, mystique against a real, quantifiable product benefit, but how do you demonstrate a benefit that is essentially qualitative. Pepsi tried it with its “Taste Test” marketing, and came unstuck.
In the end it comes back to making the brand stand for something specific, and hard to copy, so it says something about those who choose to use it.
Feb 7, 2010 | Branding, Management, Marketing
During the brand development process, to the extend that is it deliberate, most conversations are about the activities that supposedly drive the objective measures of success, sales, margins, market share, household penetration, and so on.
However, during qualitative research, brands take on human qualities, they are described using personal pronouns, they are young, old, male, female, a farmer, or a merchant banker, funny, quirky, reliable, and so on, but these responses are usually pushed aside, and minimised in order to give the spreadsheets some air.
Sitting in on many market and brand development conversations over the years, it is surprising how often we forget the human dimension, and the difference it makes to our activities, and priorities when we actively set out to describe the brand in human terms, and give the humanity of the brand a central place in our considerations.
Feb 4, 2010 | Branding, Change, Leadership, Marketing
The corporate left brain/right brain conflict is alive and well in Jetstar.
Currently Jetstar is spending on TV advertising their Asian destinations, pushing that they are not just a cut price airline, at the same time they are facing a PR debacle, having left passengers in Penang airport for several days due to mechanical problems with an aircraft. (perhaps they should change their advertising; “an extra 4 days at your expense” not a great idea?)
Gail Kelly at Westpac got it horribly wrong a few weeks before Christmas, raising the banks home mortgage rate beyond the increase in the prime rate, how many advertising dollars did that send down the crapper? Anyone who actually thought about the pricing challenge from a customer perspective would have predicted such an outcome, that the mistake was made by the former CEO of St George whose culture was all about customer care is inexplicable. Even the vaunted Toyota is struggling with a recall in the US of 9 million cars with sticking accelerators, not a good addition to their market positioning.
The list of companies that sacrifice their long term position to get out of a hole in a crises goes on, and on. The corporate “numbers groupthink” takes over, no-one states the obvious, but uncomfortable truth that the P&L needs to take a short term hit for the benefit of the long term.
Very occasionally, someone does it right. The classic is J&J’s recall of Tylenol in 1982, and subsequent leadership in introducing tamper evident packaging. Short term cost was huge, but the long term position was enhanced enormously. Arnotts in Australia had a similar experience in 1993, and came out of it smelling like roses.
Why do most businesses continue to make the same mistake when faced with a crisis, a short term focused response?
My conclusion is that the power of the short term performance metrics overwhelms common sense, and the only antidote to this long term poison is to build a culture that genuinely sees customers as central to the reason for the business existing, and only by serving customers can commercial sustainability be achieved. This commitment to long term customer value needs to be a part of the culture, as fundamental to an organisations shape and actions as DNA.
Feb 1, 2010 | Branding, Marketing, Sales
Most products have a range of alternatives that the buyer can purchase and use in relative certainty that it will deliver pretty much as promised.
Consumers when in a supermarket have a basket of products in a category they buy, usually with a first and second choice, and sometimes a third choice. On any trip to the supermarket, the purchase decision is made at POS based on a whole range of factors, of which price is only one.
Our task as FMCG brand marketers is to find the means to reduce the importance of price in the purchase decision, in an environment where the supermarket is hell bent on convincing us that price is the only factor that matters, and they have all the power of the channel at their disposal.
The power of data mining techniques that have evolved in the last decade is stunning, but they do not remove the basic dilemma for FMCG marketers, who must find the balance between price, stock velocity, retail margin, and brand building that has to be funded from their margins and long term returns, and which carries substantial risk.
Only building a brand that consumers have as their first choice in the basket of acceptable choices, where price sensitivity is less than the category norm will offer longevity, the rest just contributes to retailer profitability at the expense of the supplier margin.
