Tag: brands

Branding states requires integrated strategic initiatives

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I believe that traditional brand communications driven by traditional processes such as creativity, placement, repetition, positioning are being dragged, kicking and screaming, to the branding graveyard. Brand communications, as a numbers game of releases distributed, ads run, awards won and so on, that focussed on outputs, not outcomes, are finished.

But this doesn’t mean that there isn’t a place for superbly executed advertising, as part of a integrated, organisational driven, consumer influenced brand strategy.

When the Sussex Safer Roads Partnership launched a strategic initiative that has at its centre, a campaign developed to remind individuals that wearing seat belts is important, the county realised that repeating well executed advertising on TV was going to be expensive and unlikely to reduce the number of road accidents in the county. However, the ads are good and were viewed over a million times in two weeks. My personal favourite is here

But the ads are only part of the story. The initiative also includes Operation Crackdown, a residents driven initiative developed with the residents of the area in mind. Essentially, the initiative calls on Sussex residents to contribute to the safety of their communities by reporting instances of anti-social/dangerous driving.

These initiatives are part of an integrated strategy that also includes educating businesses by offering companies a complete managers’ safety pack of handbook, driver information and posters to display in public areas. There are also opportunities for businesses to apply for specialist help to devise their own occupational road risk strategy, or to have existing safety initiatives examined by the Sussex Safer Roads Partnership.

There are also other campaigns that focus on children. Schools across the county participate in a quiz. Cyclists, horse riders and pedestrians are also targetted via multiple channels.

Operation Crackdown received 1,608 speed complaints from across Sussex, between March 2009 and March 2010. Extensive data will be collected and analysed on an ongoing basis and used to improve the strategy.

Most Asian firms should not consider Positioning to be the right tool for Branding initiatives

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Two of the most famous names in marketing – Jack Trout and Al Ries developed the concept of positioning back in the 1970s. Their business/marketing book, Positioning: The battle for your mind was written in the early 1970s and almost forty years later, is a well thumbed addition to the book shelves of respected marketing professionals around the world.

Jack Trout and Al Ries developed the concept of positioning because they believed that branding was becoming increasingly difficult as audiences were inundated with numerous and confusing communications. Positioning was promoted as a tool to “break through the clutter.”

Today, the following product description for the latest edition of the book on Amazon is: “Positioning” describes a revolutionary approach to creating a “position” in a prospective customer’s mind – one that reflects a company’s own strengths and weaknesses as well as those of its competitors. It goes on to say, “Advertising gurus Ries and Trout explain how to: make and position an industry leader so that its name and message wheedles its way into the collective subconscious of your market – and stays there.”

I disagree with this statement. Positioning may have been revolutionary in the 1970s but it can hardly be described as such today. Furthermore, where I come from, ‘to wheedle’ is not really a flattering term. In fact the free online dictionary has this definition, “To obtain through the use of flattery or guile: a swindler who wheedled my life savings out of me.”

The concept of Positioning also suggests the ‘position’ should be based on being first in a particular category. If another company is already first in the category, then the company should work to redefine itself in a new category to ensure it is first in that category. This was really important to Ries and Trout. In fact so important, that they felt it was more important to be first in the mind than first in the marketplace.

In the mass markets of the 1970s and 1980s, positioning was defined by perceptions. To influence perceptions and maintain a position within the relevant minds, it was imperative that companies dictate the information consumers received.

And, because of the power of mass media, this wasn’t an impossible task. Moreover, because most audiences were relatively passive, and they had little choice of products, well-researched messages were likely to register with targeted audiences.

Furthermore, advertising agencies and in house marketing departments also embraced the concept of positioning because it gave them total control yet there was little opportunity for accountability. After all, it was relatively easy to show progress in awareness or top of mind, but first in the category was tough to measure.

As a result, positioning was adopted by many companies and became a successful tool. In the face of this increased competition, many companies took the wheedling part at face value and started to manipulate information to control a hard fought for position that was threatened on many fronts. Soon fantastic claims were being made in advertising and other channels.

One example is the tobacco industry that tried to convince consumers that tobacco wasn’t addictive. Ford made a similar attempt to persuade prospects that the Pinto did not have design issues. More recently there were some outrageous claims around the Enron scandal and certain financial institutions last year were wheedling furiously!

Unsurprisingly, this has caused consumers to become more disillusioned and cynical and less likely to pay attention to claims made by advertisers. Here in Malaysia, 84% of those polled in a recent study by a daily newspaper said they didn’t believe what they read in advertisements. This despite the fact that many of the companies featured in those ads were attempting to position themselves in the minds of those very consumers.

Because positioning relies on mass media, it has to appeal to as many people as possible. This may be alright in a single or homogeneous market but what happens when a market is segmented?

Furthermore, firms consider a positioning campaign to be the communication of a particular message to a mass audience. But what happens if that audience doesn’t listen or accept the message? The advertising agency will tell the company to do it again, perhaps after tweaking the creatives a bit. This is also known as repositioning.

Jack Trout, this time with Steve Rivkin, released a book last year entitled REPOSITIONING: Marketing in an Era of Competition, Change and Crisis. The back cover calls this “A brilliant new book” and states, “So you’ve mastered the art of marketing. You’ve positioned your company, branded your product, and targeted your consumer. Unfortunately, in today’s economy, that’s not enough. You need REPOSITIONING.”

I haven’t read the book so I can’t comment but I have my doubts as to the effectiveness of repositioning.

Don’t get me wrong, I do think that positioning is a tool that was, in its time and for many products, a very good tool. But I don’t think it has a role to play in today’s customer driven economy. There may be some exceptions such as in the destination branding sector and some soft drinks may benefit but these are the exceptions not the rule.

I know it is hard to let go and there will be a lot of resistance to what I have written. After all, so much effort by so many people has gone into learning about positioning. But the world has changed. More importantly, consumers have changed. And marketers should acknowledge this and change with it.

Communications and the way consumers live have changed a lot over the last 40 years. Isn’t it time Branding and the way brands are built and the tools used to build those brands changed too?

Self service can help brand profitability

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The other day, one of our computers froze. This is a scary moment for most companies and it was even more scary for us as we use Apple computers and it was the first time this happened in 7 years. More worrying, this particular PC is running some expensive design software and auto-save was off!

We had two options call tech support and wait 24 – 36 hours for them to come in or check out the Apple support site and see of we could solve the problem ourselves. We chose the latter and 20 minutes later the PC was up and running.

Enabling prospects and customers to answer their own questions is nothing new, but few Asian brands use it effectively. Yet it can have a significant impact on profitability. Forrester found that the cost of a customer sales or support call cost as much as US$33. The same report found that even email support can cost as much as US$10 per response. Yet Web-based self help averages US$1.17 per incident. And this doesn’t take into account the impact on reputation due to lost productivity by the customer.

Customers benefit too. In our case, we work to tight deadlines, sometimes spending the whole weekend in the office. If this had happened on a Saturday night, with a Monday delivery deadline, we may have lost the account.

One word of caution though. Self-service is not an excuse for avoiding service.

3 words that can ruin your brand in Malaysia and Singapore

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If you are in Malaysia or Singapore and you sell stuff to customers, there is one phrase that can ruin your brand.

“No stock Lah.” Is repeated time again by poorly trained and disinterested staff.

This seemingly innocuous phrase should be banned in your organization. While we’re at it, you should also ban the obligatory disinterested shrug of the shoulders that normally comes with the phrase.

For the uninitiated, the phrase is common in retail outlets the length and breadth of Malaysia and still, despite the alleged sophistication of the city state, in many of the malls up and down Orchard Road in Singapore.

This simple yet powerful phrase, used with annoying regularity in both discount stores and swank boutiques of luxury brands negates every penny your organization has spent on sales training, reputation development, customer service, customer relationship management and other operational excellence initiatives.

It renders worthless the massive investments you have made in licenses, real estate, interior design, stock, utilities and more.

It erases the hard work you have put into press releases, press conferences and other promotional efforts.

It undoes all the good of the advertising campaigns you have run for years in an attempt to get a consumer or two to give your brand a chance.

In a heartbeat, it ruins every single, expensive effort, financial and otherwise you have put into getting the consumer into your store.

In short, this seemingly innocuous phrase can ruin your brand.

Destination Branding: Branding Regions, States & Cities

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It’s estimated that there are more than 100,000 locations in Asia actively seeking to attract business, industry and tourists. As a result, it is increasingly important that locations seeking development, investment and visitors must have a structured, long-term approach for attracting visibility, investment and arrivals.

This conference brings together experts in the field of destination branding. Professionals who have been involved in the process of developing brands for regions, states and cities in Europe, USA and Asia.

The invaluable experience these respected practitioners bring to Asia will provide government servants and others responsible for driving investment into their regions, states and cities with the core elements and specific knowledge and tools required to build strong brands by matching attributes of their states and cities to the requirements for value of investors, businesses and businessmen as well as visitors, both domestic and international.

This ground breaking conference will also include examples of how other destinations have successfully branded themselves and attracted Foreign Direct Investment and visitors.

Venue: TBD Kuala Lumpur, MALAYSIA
Dates: Sunday March 27th 2011, 1900 – 2100. Cocktail Party & registration
Monday March 28th 2011, 0830 – 1700.
Tuesday March 28th 2011, 08:30 – 1700.

Confirmed speakers:
Keith Dinnie – author ‘Nation Branding – Concepts, Issues, Practice’
Bill Baker – author ‘Destination Branding for Small Cities’
Robert Govers – author ‘Place Branding’
Hamitabh Kant – author ‘Branding India – An Incredible Journey’
Dr Jim Hamill – leading expert ‘Destination Marketing in a Web 2.0 environment’
Courtney Fingar – editor FDI magazine

Branding is more than a communications exercise

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The most common definition of a brand that I hear is: “A brand is a name, sign, symbol, slogan or anything that is used to identify and distinguish a specific good (product), service, or business” This comes from the respected American Marketing Association. The problem is that this definition belongs to an era of limited competition, limited choice and limited knowledge of consumers.

In the mass economy that no longer exists, it was relatively easy to build a brand and your brand could easily become the name, in your category, on everyone’s lips. And it got to this position by mass advertising via mass media. 50 years ago, a good ad on prime time TV was enough to get someone to write a brand name down and ask for it at the department store the next day.

Quite often, even if the product was unable to deliver value, consumers would still buy it, quite often because they didn’t have a choice or because they were less demanding, and willing to put up with poor quality. In some cases consumers believed they were wrong and the product was good so they continued to buy it.

Today consumers are far more knowledgeable and much more demanding. They have more choice and there is more competition, especially for consumers attention via mass marketing channels. Moreover, a lot of those products with their flashy names, creative symbols and signs have lied to consumers in their slogans and consumers have been let down. It is no longer enough to tell a consumer your product is the best. If they are let down they won’t buy it again.

Instead, they go elsewhere. Today, to build a brand requires a comprehensive investment in organisational excellence. Building a brand is no longer a creative exercise or a communications exercise to differentiate a product. And the key metric must be profitability.

At this stage, most articles give an example of Nike, Coke, Apple or a similar brand. But these companies are exceptions and I’ll explain that in another article. But this time I am going to use Apple as an example because they have adopted their brand better than most.

Apple is a brand but 15 years ago the name, logo, etc that differentiated the good/product was not helping the company gain market share in the computer business. In fact, I wouldn’t be surprised if they were thinking of changing the name.

But instead, what happened was a massive investment in operational excellence, R&D, purchasing, supply chain, distribution and strategic alliances in manufacturing, etc plus a complete overhaul of sales processes, customer service, a huge stroke of luck and later, an investment in clever creatives.

The result, the ability to match product attributes to give consumers economic, experiential and emotional value that has built a global brand. I would say that the ads didn’t build Apple, it was the investment in R&D, organisational excellence and a lot of luck.

Another example is PAN AM. PAN AM had a great name, nice logo and spent a lot of money on mass marketing. I’m sure we all remember the tagline “PanAm. We’re flying better than ever”. Where is PAN AM today? PAN AM doesn’t exist.

So the next time someone says a brand is “A brand is a name, sign, symbol, slogan or anything that is used to identify and distinguish a specific good (product), service, or business” Ask them how many products they buy because of the name.

Another argument for building brands

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A year ago, the Wall Street Journal was telling us that wealthy consumers were suffering from ‘luxury shame’. Others were talking about the end of the luxury business. Certainly, the luxury business took a massive hit when the sub prime crisis blew up and the repercussions were still being felt at the end of 2009 when many luxury manufacturers and retailers reported poor sales over the traditionally lucrative Christmas and New Year period.

But even a global financial meltdown doesn’t seem to be able to keep the wealthy out of the stores for long as the luxury industry outperformed the MSCI World Index over 1Q 2010. And unsurprisingly, the wealthy don’t head for the department store to save pennies on same store brands.

So what brands are people, sorry the fabulously wealthy buying? Here’s a quick round up of the most popular brands at the mall or wherever it is the wealthy shop!

Last weekend, the Ferrari 599 GTO was officially unveiled at Modena’s Ducal Palace in Italy. This is the legendary brands fastest road car and does 0 – 100km/h in 3.35 seconds! Although a number of key clients were at the launch, all 599 units of the US$450,000 (RM1,500,000) monster have been sold.

Still with cars, top end ‘more affordable’ brands are also performing well, despite current figures reflecting the anniversary of the peak of the scrapping scheme in Europe. In Germany, car sales plummeted 26.6% last month, year-on-year, but Mercedes declined only 6.1 per cent, while BMW sales rose 9 per cent. During the same period in China Mercedes and BMW both increased their sales in 1Q 2010. Audi meanwhile was up a respectable 77%.

Here in Malaysia where cars are subject to astronomical taxes, BMW Malaysia sold 250 of the 7 Series from January 2009 to March 2010. With the cheapest 7 series costing around RM650,000 (US$200,000) and the top of the range 760Li costing RM1,400,000 (US$435,000), that’s impressive and shows the resilience of luxury automotive brands.

Down south in Singapore, Mercedes-Benz delivered 1,139 passenger cars in 1Q 2010, a 22.7% increase over the same period in 2009. Not to be outdone, BMW sold 960 units during the same period, a robust 29% increase over the same period.

Porsche meanwhile announced last week that orders for the latest version of the Cayenne SUV, due to arrive in European showrooms in May 2010 and priced at €56,000 (US$75,000) price tag, were ‘stronger than expected’.

Over in India, Porsche Design recently opened its first store in New Delhi, joining Prada, Louis Vuitton, Ferragamo and Mont Blanc to name a few luxury brand also taking up residence in the capital of the republic. Louis Vuitton now has 5 stores in the country.

LVMH, the company behind luxury brands such as Dior, Louis Vuitton and Moët Chandon recently reported a 11% increase in 1Q 2010 sales. Watches and jewellery sales rose by 33%, wines and spirits by 18% and fashion and leather goods by 8%. Sales of Dom Perignon and other LVMH owned champagnes shot up by 33% in the same period.

Watches and timepieces, there is a difference you know, are also having a bumper start to 2010 and the mood at Baselworld, the world’s largest watch and jewellery fair, was bullish after positive announcements from Bréguet, Blancpain, Omega and Longines whose sales were up 46%, 48%, 50% and 49% respectively in January and February 2010.

Meanwhile, due partly at least to the fact that it doesn’t have many high end high margin devices, Sony Ericsson has been plagued by declining sales for years and hasn’t made a net profit since 2Q 2008.

However the firm moved quickly to develop high end phones and launched the Xperia X10 and Vivaz last year. The result, the company reported a net profit for 1Q 2010 of €21 million, compared with a €293 million net loss a year earlier. Analysts were expecting a €128 million loss.

With the consultants, Bain & Co predicting luxury industry sales of €158bn in 2010, up 4% after a drop of 8% last year, it seems ‘luxury shame’ was nothing more than an itch!

Luxury branding in developing markets requires a different approach

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Patek Philippe, the eponymous luxury Swiss watch, or should I say, timepiece brand is known for running the same advertising campaign for years. Although the images may have changed, the tagline “You never actually own a Patek Philippe. You merely look after it for the next generation.” has remained consistent, usually along with a jaw droppingly handsome and immaculately dressed and coiffured ‘father and son’ portrait.

For the target market, the aristocracy and the wealthy of the world, and those that aspire to the class, the ads say many things, including ‘buy one and you’ll be like us and ‘You have class and you know class’.

The ads are a wonderful example of luxury branding – a great product manufactured with precision engineering, immaculate heritage, an aristocratic client base and creative genius in the advertising that communicates on a level that the target market will connect with and explains, in the limited time available to garner interest, the timeless character of the brand. And I am sure the quality of service at the point of sale will be equally as impressive.

PP has recently launched a new global print advertising campaign that focusses on the values of the company established by two Polish immigrants, Frantisek Czapek and Antoni Patek in Geneva in 1839. I’m not sure if this campaign is to replace the old one. I for one hope not.

The latest campaign revolves around the personal letter concept and has the current president, Thierry Stern waxing lyrical about the steps involved, the time taken and care and attention to detail invested in the production of a PP timepiece. He talks about ‘polishing steel wheel teeth and pinion leaves with wooden leaves and countersinking wheel holes’ and the fact that these efforts are ‘inspired by functional not just aesthetic objectives’.

He goes on to mention the Patek Philippe Seal, an ’emblem of horological excellence’ that appears to be an internal ‘quality benchmark’ that claims to be ‘beyond existing standards of the Swiss watch industry’.

The ads are set to appear in ‘quality daily newspapers and influential trade publications’ around the world and will also appear at the point of sale.

The first ad (I think) appeared in Malaysia in the New Straits Times on 15th April 2010. I can understand (although I don’t agree with the tactic) the mass market approach of running an ad in the New York Times or the London Times, South China Morning Post etc or any other developed country where there is significant market potential.

But I can’t understand the purpose of running the ad in a developing country such as Malaysia. A quick search of the net finds a rather old PWC report, that states ‘the mean monthly gross income per Malaysian household increased from MYR2,472 in 1999 to MYR3,011 in 2002, denoting average growth of 6.8% per annum’. So if we use that growth rate to bring us up to 2010, the mean monthly gross income per Malaysian household is now roughly RM5,096 or US$1,358. Don’t forget that is gross and does not take into account the impact of the economic crisis.

Another search of the Internet would suggest that the cheapest PP watch is around US$4,000 and the most expensive sold some time ago for about US$11,000,000 (that’s RM36 million in real money). The majority of PP watches appear to be in the US$10,000 to US$35,000. At those rates, the potential market in a country the size of Malaysia is tiny and an ad for such a luxury product in a daily newspaper is essentially a waste of money.

Just to put things into context, the ad after the PP ad is for Honda and the ad after that is for Panasonic household appliances such as an Alkoline ionizer, hair styler and hair dryer and men’s shaver (inner Blade and outer foil).

So what should PP do in developing markets like Malaysia?

Here are 5 suggestions

1) Rethink the one-size-fits-all mass market approach to building a brand, especially in developing markets. The consumers who can afford your products can be engaged much more effectively in other ways.
2) Build a database of prospects and customers. But all markets require different strategies and data collection techniques will be different.
3) Build relationships with your existing customers. Existing customers are often ignored by companies scared of asking too many probing questions. And certainly timing is important. But well trained luxury retail staff can build relationships with wealthy customers who are likely to be successful businessmen and politicians and their opinions will carry a lot of weight with prospective customers.
4) Advertising is important, but choose your channels carefully. Mass circulation newspapers and magazines are for shavers and hypermarkets.
5) Content is important too. I’m not sure anyone really cares what is hidden away inside the shell of a product with almost 200 years of heritage. After all, if the quality was a given in the previous campaign, why must it be addressed now?
6) Integrate your digital commuications with mobile channels to engage with prospects and customers interactively when they are on the move.

Building a brand is hard enough. PP has done it successfully for 200 years. But treating every market the same and using mass marketing tactics that belong to an era that no longer exists, will make it hard to do it successfully for the next 200 years.

Are we seeing the commoditisation of the iPhone in Asia?

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Here in Malaysia it took time for the mobile service providers to agree terms with Apple to offer the iPhone to subscribers. But finally, Maxis signed up and has invested heavily over past year or so in traditional aquisition focussed marketing.

Recently, another provider, the aggressive and innovative provider, Digi signed an agreement with Apple and has started to promote the iPhone.

Last night, I was watching TV and was astonished to see first a Maxis ad for the iPhone, featuring the numerous applications (there’s one for just about everything) and then, I think separated by another commercial but possibly even back to back, the same commercial for the iPhone, featuring all the applications, this time with a Digi logo!

I have a number of reactions to this. Firstly, don’t advertising agencies know how to do a deal with a TV station anymore? If you can’t get an exclusive deal at least ensure no competitor products advertise on the same program.

Secondly, what are these telcos doing slugging it out in public on TV? Do’t they have any understanding of the iPhone and what it stands for and means?

Thirdly, these telcos are commoditising a valuable brand that deserves better. A more sophisticated approach for a sophisticated product that offers value for many people in many ways targetted at existing subscribers and personalised would be far more effective than a mass economy spray and pray approach!

Creating awareness via TVCs is a complete waste of money for a product such as the iPhone. If anyone out there is unaware of the iPhone, the applications and how they can add value to a person’s life, then that person is not the type of customer Apple, or the telcos want!