Apr 16, 2011 | Branding, Customers, Marketing
Most marketers will tell you what their brand stand for, premium quality, reliable performance, consistent taste, great service, and so on. Sounds a bit like a bunch of cliches doesn’t it?
However, it is just as valid to define your brand by what it is against, and often it seems the “againsts” are somewhat implied, allowing some latitude in interpretation.
The Green party in Australia is against native forest logging, Nike is against lounge lizards, Apple is against sameness, and closer to home, the SME Riverina Grove‘s brand is against average tasting mass produced “Italian” style packaged foods.
Think about it next time a branding discussion emerges, weather it be in a formal strategy session, or probably better, around the coffee machine.
Mar 23, 2011 | Branding, Communication, Marketing, Social Media, Strategy
How does a branded product withstand the power of a retailer duopoly that controls 65% of Australia’s supermarkets?
That question has exercised the minds of proprietary FMCG brand owners for over 30 years, since the first house-branded “No Frills” products appeared on the now almost defunct Franklins shelves. It has become a really serious question over the last couple of years as the big two retailers more actively set about building a brand of themselves as more than a place to shop, but also a range of products to buy, following the patterns set in the UK by Tesco and Sainsbury, and it hotted up a month ago with the beginning of the “milk war”.
The Nielsen Global Private Label report puts Australia’s private label penetration at 14%, not really accurate if you happen to own a milk brand. Milk had a sales channel split between supermarket and route sales about 60/40, with Housebrands holding a share around 50% in supermarkets, but nothing in route, until a month ago. Overnight, the “milk war” has dragged sales from route into supermarkets, (I do not have the numbers) and the house-brand sales must be now 85-90% plus, again, I do not have the numbers, just a set of eyes. “Dairy Farmers”, “Farmers Union” “Paul’s” all venerable brands in the milk market have had their value decimated almost overnight.
Now it seems we have Fosters pulling their beer brands from the shelves of Coles and Woolworths owned liquor outlets as a defense against the risk of having their brand equity, built over long periods, with huge investments, being trashed by under cost sales by retailers. It may lose them lots of sales in these outlets, but the 50% of the market still controlled by independent retailers will be cheering, it offers them a competitive advantage over the chains to have brands like “VB” on shelf when Woolies and Coles owned Dan Murphy and First Choice do not.
Suppliers of produce to supermarkets have faced the dilemma for many years. The retailers simply will not allow proprietary branded products on their shelves, if you want distribution of your oranges, potatoes, or lychees, it is as unbranded produce, or increasingly branded with the supermarket brand. In these categories, housebrand share is 100%, so I wonder where the innovation will come from in this drive to the bottom of the price equation, and will consumers in the long run be better off?.
Back to the core question, to which I wish I had a simple, glib answer, but I don’t. However, I think the answer is tangled up in the way we manage the changes emerging from the digital revolution we are undergoing.
- Mass media is dead, the cost cannot in the long term be recovered if hard won brand equity can be destroyed overnight by a retailer who wakes up with a good idea. In the future, mass media will not be used to build brands, with the exception of a few huge multinational brands. Apart from the cost/risk equation, the “mass audience” has fragmented anyway, and is increasingly hard to find. Time to sell your shares in TV networks.
- Social media now has a framework for communication, like it or not, that framework has two major dimensions, called “Facebook” and “Twitter”. As we figure out how to use them, these two related frameworks, and the others offering similar but more specifically targetted access to individuals, will drive the way brands engage with their adherents, attract new ones, reward their loyalty, and build equity that is remote from the ravages of duopoly bricks and mortar retailers.
- Marketers have to get to grips with this stuff, mostly it is beyond the young brand manager who does not understand, and should not have the power anyway to make brand related decisions. The case for the CEO to be the “Chief Brand Officer” in any business is getting stronger daily.
Building a brand just got a whole lot harder. Dollars to spend now bears no relationship to success, nor does longevity, (facebook had its 5th birthday day before yesterday), so just hanging around is not an option. Instead, markets have to do the hard yards to really deliver value, huge value, to customers, and keep “value-innovating” as if their lives depend on it, as it surely does.
Mar 22, 2011 | Branding
What sort of goose named the US operation against Libya as “Operation Odyssey Dawn”? OK, they might have had PR trouble calling it “Operation kill Gadhafi ” or “Operation Sandman mash”, but Odyssey Dawn??? Who are they kidding?
The US military has guidelines that emerged from some dodgy operational names during Vietnam which did little to endear them, but get a grip guys, and use one of the names the Pommies, (Ellamy) or Frogs, (Harmattan, which refers to the hot desert wind), their allies in this party, are using!!
Wars, or police actions, or whatever this ends up being called are now played out in the public arena, so the rules of marketing, as distasteful as that may be, apply, and the last thing you want is to have people like me making fun of your stupid brand names.
Feb 21, 2011 | Branding, Customers, Operations
The world-wide recall in 2009 of 10 million vehicles across Toyota’s range must have cost hundreds of millions of dollars, but is dwarfed by the long term cost to their brand.
Now, the software blamed by pundits, politicians, sensationalist media, and the generally uninformed, for the accident that killed a family in California sparking the recall, has been cleared. Toyota comes out blameless, driver and dealer error in supplying the wrong floor mats, and not securing them caused the deaths.
The TPS disciplines which spawned the “Lean manufacturing” movement that has transformed manufacturing worldwide took over when the furor broke, and Toyota went looking for facts, seeking a “root cause” of the so called “Sudden Unintended Acceleration” problem, and finding nothing, commissioned unimpeachable outside engineers (NASA) to have a look, and predictably, they found nothing either. Meanwhile, the public was blasted by messages undoing 30 years of effort that positioned Toyota as a safe, finely engineered vehicle that would deliver performance and reliability for many years.
Toyota forgot that perception becomes reality, and by allowing the perception of their failure to remain in the market while they exercised TPS disciplines to seek a root cause error, consumers turned away. It will take a very long time, and a lot of effort to undo the damage not of their making.
There is a lesson for all marketers in all this, perception becomes reality, and it is hard to undo, even when the perception is wrong.
Feb 6, 2011 | Branding, Marketing, Social Media
Advertising has a new coat, “adverfanning” as in advertising to attract “fans” for your social site, who are then the target of directed or “Permission Marketing“, a term coined by Seth Godin over a decade ago.
Adverfanning has been growing exponentially with the growth of social media, it is the foundation of the business model, but the cost/impact has been increasing as click through rates decrease. According to a report by analytics firm Webtrends, it now costs $1.07/fan, as reported in this WSJ article, which is getting close to TV cost/impact in some time slots.
The business of advertising has not changed, but the tools have. The old ones, TV, radio and magazines have fragmented enormously with choice, and new ones have emerged from the social media, but the objectives are unchanged.
Gain attention
Generate engagement
Motivate trial
Build repeat sales
Encourage brand evangelism.
