Branding Strategy Insider

A Brand That Discounts Or A Discount Brand?

2013-05-15T01:18:14Z

This article in Time on how to get the most out of Apple is a reminder that there is a noticeable difference psychologically between a brand that discounts (even if it’s only occasionally) and a discount brand. Apple does discount – but for selected parts of its range or for specific reasons: change-over on a model, for example. The most important thing is that they don’t give that impression.

Apple’s approach is to treat price as a reliable indicator of value. By not overtly or uniformly discounting, they maintain the value of the brand by making products that excite customers and they continue to charge for them at that level of value until there is a good reason not to do so. In other words, Apple’s ethos is never discount an Apple product while people are most excited about it – no matter whether that is days or years after it was first released.

But while Apple have worked hard to position themselves as a full-price, full value brand, that’s not always the case. As the article points out, “With the exception of the iPhone and the iPad, Apple products are typically discounted within eight days of first hitting the market …” Surprised? I was. But “As for the most in-demand Apple products—iPad and iPhone—there doesn’t seem to be much financial incentive to delay your gratification. The price for either is unlikely to change by waiting a few days, or even a few months … discounts have basically been non-existent until it’s time for Apple to introduce the latest new-new model.”

Even when Apple discounts, the wider motivation seems to be to give customers entry points to the Apple universe. By lowering the price of a laptop, they invite customers into their world, knowing that they will then be pre-disposed to go Apple all the way. At least that’s my theory, and it’s one I think extends to the pricing of their new operating system. Lower the barriers to entry to get people involved, but retain the pricing and the aspiration on the iconic products that people continue to be excited by and around which the world of Apple pivots.

Such an approach seems worlds away from the volume-driven approach taken by discount brands that advertise serial sales to drive up their top line. But as I’ve said many times before, there’s nothing wrong with that model if you’ve built your business and your brand around it. Smart discount brands rely on a very different perception of price though than a brand like Apple. Whereas Apple sees price as proof of value, astute discount brands treat price as a pain point. And they rely on easing perceived pain in order to generate interest. They rely on you paying less in one area but more in others to help balance the load. Just like with Apple, it’s a feel-good balancing act. The difference is that one brand makes itself known for discounting and the other doesn’t.

One truth straddles both approaches. No matter how you choose to use discounting, to use it effectively you need to hard-wire it into your ethos not just your pricing. You need to be very clear too about how it works to protect your margins store-wide.

You might like to ponder that the next time you see a sign advertising “30% off selected lines”. Which lines have been selected…and more importantly, why?

Contributed to Branding Strategy Insider by: Mark Di Somma, Brand Consultant

Sponsored by: The Brand Positioning Workshop

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Brand Advantage And The Reason For Buying

2013-05-14T07:05:03Z

It’s tempting when your product all but parallels that of your competitors to be drawn into a meaningless war: a fight for market share that revolves around devaluing (looking to price the other guy out), trivial pursuit (nit-picking on features in a bid to show technical advantage) or overshadowing (spending up large in mainstream media in a bid to raise “awareness”).

The problem with chasing competitive preference is that brands spend far too much time focusing on the competitive aspects and far too little insight on identifying where the preferences could lie.

All three approaches above are looking to provide consumers with reasons to buy, but while they may change perceptions, they actually do little to change affinity. It’s a distinction that’s easily overlooked. Changing what consumers think of you for now does not automatically translate into a shift in how consumers feel about you – especially in the longer term. They may, as a result of the above actions, see you as offering them more value, they may like the fact that your product contains ingredient X, you may even feel more familiar to them – but unless you have the pockets and tenacity to maintain the fight, and unless you too are prepared to up the ante even further in response to competitor activity, advances are tenuous.

If there is still little to distinguish what you offer and what others offer in their minds, you have not dismissed substitution because you have not changed the equation in their heads. You may have convinced them temporarily that they are getting more from you than they’re getting from the other brand, but the comparison is still quantitative not qualitative.

A reason for buying, on the other hand, provides a buyer with an incentive to chase a result. And the lesson from brands like Moleskine is that when you change the outcome for consumers, you change who they prefer and why they prefer.

Finding that starts with a deceptively simple question for brand owners: What are we going to give our customers that will excite them? A discount is not exciting. Features are not exciting. Familiarity is not exciting. Labels, identities, colours, celebrity endorsements – none of them are exciting. They may be exciting to the people who create them or manage them. But they are only of passing and functional interest to the man or woman in the aisle. They are just more ways to recognise. They explain.

I can’t even begin to imagine how many companies there are out there offering notebooks. The functional differences between those notebooks are non-existent, and yet Moleskine ties its products to a distinctive outcome that their audience craves. When you write in a Moleskine, you continue a tradition begun in a golden age of writing in Paris. You become part of a spirit that links to Hemingway and Picasso. Yes, that’s a beautiful and romantic story – but far more importantly, that feeling of inspired creation, of being in the moment and capturing something that will excite the world, is an outcome that every creative person treasures. It’s a ‘result’ that Moleskine has woven into every aspect of its business. They want their product to be more than something you write in. They want writing in a Moleskine to be an affirmation of the writer’s identity.

Starbucks changed the coffee market by convincing buyers not that they could have a nice(r) coffee, but that they could basically have the coffee of their dreams, served exactly the way they had always wanted it, in a place they loved to linger. When they stopped doing that, they quickly got into trouble.

Apple has consistently delivered people the most beautiful technology in the world (certainly by form, and for Macheads, also by performance).

Perhaps we should do away with the concept of competitive preference – and replace it instead with a mandate to find a competitive pleasure (result) that will then form the emotive basis for how the company does business. That’s because a distinctive and powerful outcome should also inspire and influence everything around it. Here are some examples:

Your purpose should define what you value most in all the world, and therefore what you are most seeking to achieve as a brand. (That goal should be a goal your consumers will be fascinated by.)
Your story should explain why you value what you value, the greatest result you want to achieve for your customers and what led you to pursue that
Your strategy should explain why and how your brand can deliver that result in a way that no-one can, or would dare
Your pricing should reflect what that special feeling is worth to the consumer

It’s clear. When you deliver what people are most looking for, they will continue to look for it – and they will continue to pay for it. After all, why would they want to feel anything less?

Contributed to Branding Strategy Insider by: Mark Di Somma, Brand Consultant

Sponsored by: The Brand Positioning Workshop

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The Brand Strategy Event For A Changing World

2013-05-08T16:00:16Z

Change is hard. That’s why the future can look so much like the past. And why brands and the marketers who manage them often lose their edge. For those marketers who see comfort zones as a dangerous place, we have designed a unique experience around brand strategy for you. One that challenges the thinking about brands and brand management. And one that breaks free from yesterday’s marketing conference format.

The Un-Conference: 360 Degrees of Brand Strategy for a Changing World, Featuring John Sculley of Apple and Pepsi Success

For two days next week, May 16 & 17 in San Diego, California we will focus on the most important concepts in brand strategy in a competitive-learning workshop where marketers compete and learn in teams. The walls are down — no podiums, no stages, the experts are embedded in the teams. Next, let’s look at the agenda, which does not include the BIG surprises we have planned.

Wednesday May 15^th, 2013

Meet & Greet Mixer 7:00-9:00 pm at The Andaz Hotel Rooftop Pool, where you will meet your teammates

Workshop Day 1

Thursday May 16^th, 2013

The Un-Conference starts at 8:00 am
Introductions with John Sculley
Competitive-Learning Game Description, Rules, Day 1 Prize Revealed, Game Begins

Brand Strategy in a Changing World, Brands in the 21^st Century

The Five Drivers of Customer Brand Insistence

Value Creation, The Role of Shared Values

First Break 10:00-10:30 am

Understanding Customer Motivations & Benefits

Using Marketing Research to Craft the Most Powerful Brand Position (Team Exercise)

Lunch 12:30-1:15 pm

The Five Most Powerful Sources of Brand Differentiation

Creating a “Category of One” Brand (Team Exercise)

Second Break 3:15-3:45 pm

Branding Commodities (Team Exercise)

Day 1 completed, Prize Awarded at 5:30 pm

Dinner 6:00 pm, Your Registration INCLUDES a Semi-Private Dinner at Petco Park and a seat to watch Major League Baseball’s San Diego Padres and Washington Nationals compete!

Workshop Day 2

Friday May 17^th, 2013

The Un-Conference starts 8:00 am
Welcome Back
Day 2 Prize Revealed
Game Resumes

The Art of Brand Storytelling

First Break 10:00-10:30 am

Brand Storytelling Strategy (Team Exercise)

Lunch 12 noon-1:00 pm

Customer Touch Point Design (Team Exercise)

Second Break 3:00-3:30 pm

The Art & Science of Brand Extension

Overcoming Complex Brand Challenges

Day 2 completed, Prize Awarded at 5:00 pm

These two days are reserved for those marketers who want to change the world by creating more value than ever before for those that are most important to their brand’s future. Are you one of these marketers?

The are NO attendees – Only Participants.

Who should participate:

Marketing oriented leaders
Marketing professionals (brand managers, product managers, directors, vice presidents, etc.)
Advertising agency professionals (account executives and planners)
All marketers faced with brand strategy issues
All professionals charged with brand building and management
All professionals officially numb to yesterday’s marketing conference format
Marketers from healthcare, consumer packaged goods, advertising and many other sectors are participating.

Join us Today.

The Un-Conference is Sponsored By: QualQuant Signals, American Marketing Association, Branding Strategy Insider and The Blake Project

Action vs. Reaction: The Un-Conference: 360° of Brand Strategy for a Changing World
Featuring John Sculley May 16-17, 2013 in San Diego, California
A unique, competitive-learning workshop limited to 100 participants
As in the marketplace — some will win, some will lose, All will learn

Evolve Or Transform? 17 Brand Factors

2013-05-06T17:41:01Z

No business these days can just sit pretty. But the extent and nature of changes confuses many. Brands evolve. Or die. But they must also retain something of what consumers know. Or they fade. So which is more important? And how should a brand act, when? I get asked about this a lot. So here are my takes on what must stay and what can go (sometimes):

Keep:

1. Your good name (in every sense) – it’s the thing people know you by. Unless of course you need to re-engineer your reputation or your old name doesn’t fit what you do anymore.

2. Your purpose – the ways you intend to change the world should remain an inspiring constant for staff and customers (providing it’s inspiring to start with, of course)

3. Your values – only change them if you’re going to make them more challenging

4. Your promises – trust is the basis for any brand’s success. Without that, you’re nothing.

5. Your principles – in today’s transparent markets, transgressions will be discovered. It’s just a question of time.

Consider Changing:

6. The category you compete in – if the current category isn’t working for you, if you can’t achieve breakthrough in that space or if there is a disruption opportunity in another market, look for a different place to compete, or change the business model under which you compete.

7. How others must compete against you – look for ways to shift how you do business so that any reaction from a competitor disadvantages them by forcing them to work in ways and/or places where you have advantages.

8. Where you’re positioned – adjust your market position to put daylight between yourself and others.

9. Who you target – if your current market isn’t buying, go in search of new segments and/or change your current offerings to better meet the changing needs of your customers.

10. Your story – adjust your story to reflect the other changes in your business. Tell people a story that haven’t heard yet.

11. Your personality – to better fit with what people want. Bring an attitude that inspires and excites people.

12. Your language – visual and verbal, to better converse with the people you’re trying to reach. But be aware too that complete overhauls of your identity in low-attention sectors can literally see customers walking past your brand.

13. How people perceive you – use advertising and smart content marketing to give people different perspectives.

14. What you offer people – through improvements, upgrades and limited edition versions of your products

15. How people experience the brand – reach them through new channels and/or change the levels of service that you offer customers

16. How people access the brand – by giving them a value alternative to get them started or by offering them different ways to acquire what the brand offers.

17. What people feel they get for their money – particularly important in budget-conscious sectors. That doesn’t necessarily mean you discount. It can mean you have to demonstrate more actively why you’re worth what you’re worth through added features, improved performance, complementary offers etc.

Evolution vs Transformation

The distinction between evolution and transformation lies in the extent of the changes rather than whether to change or not.

In the course of normal brand evolution, core beliefs and behaviours should remain constant but product lines, experiences and competitive approach need to keep pace with shifts across the marketplace. In this context, brands modernise but within a context that consumers clearly recognise.

A transformation process by contrast challenges the whole premise of the organisation and in so doing brings into question every aspect of the brand’s credo by requiring the business to redefine its ‘reason for value’. In this scenario, everything’s up for scrutiny including all the things that you might otherwise keep. The brand becomes something it has never been before by questioning everything it has previously held dear. This pulls the seat out from underneath everyone – but get it right, as organisations like IBM have done on a number of occasions, and new markets literally open up in front of you.

One thing we can safely assume: brands that don’t continue to change to the extent required of them (however radical that might be) must, in time, become extinct.

Contributed to Branding Strategy Insider by: Mark Di Somma, Brand Consultant

Sponsored by: The Brand Positioning Workshop

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Television Advertising: Destined For Eternity?

2013-05-05T18:54:00Z

The category killer of advertising was invented a long time ago. It still rules. It’s called TV.

One of the longest-running predictions in the history of marketing is the death of TV, a prediction that has been wrong decade after decade. TV has enormous staying power.

TV’s death knell chronology is instructive. From the very outset of broadcast TV to this day, lowest-common-denominator content and consumer resistance to advertising have been proclaimed as nails in its coffin. Remote controls were going to kill it by ending attention to ads. When I was a neophyte researcher in the early 1980s, cable was heralded as the end of networks and thus the end of TV as we knew it. The next batter-up as TV killer was videotaping. After that, pay-per-view, premium cable, satellite TV and videotape rentals.

By the late 1990s, the Internet was in full flower, with streaming and small screen videos being touted as the end of TV. Next up was video games, especially because it took away young men. Then TiVO. Then piracy. Then online video. Then DVRs. Then smartphones. Then cord-cutting.

On and on goes this belief that TV has hit the wall. But take another look at this chronology. What you see is not the emergence of TV killers but, instead, the evolution of TV. TV evolves. The business model of TV has gotten more complex and more sophisticated over time. TV is a robust medium unique among other media in its ability to morph its content and sources of revenue to stay current.

Henry Blodget of Business Insider wrote last year that TV would crash into a wall just like newspapers because of fundamental, underlying changes in consumer behaviors that have antiquated its business model. Blodget warned that newspapers looked great until the very moment they went off the cliff. That, wrote Blodget, is why the current success of TV is not a relevant guide to the future. But Blodget is not clear on what he means by TV because TV is not, nor has it ever been, any one sort of content or business model. TV has always responded to shifts in its competitive environment by changing. It will do so yet again.

In fact, when pressed, Blodget thought better of his hyperbole and disavowed it. In his original piece, he wrote, “Those who said that newspapers were screwed were dismissed as clueless doom-mongers, at least by newspaper executives…[But] newspapers were screwed. It just took a while for changing user behavior to really hammer the business. The same is almost certainly true for television.” Yet, in his follow-up to that piece, Blodget walked back from his hard line to just a step away from reversing his original conclusion, to wit: “TV is not going to disappear, just the way newspapers haven’t disappeared. But it just defies common sense to think that the huge change in user behavior over the past decade won’t ultimately hurt the TV business.”

Blodget’s follow-up, not his original claim, is closer to the truth. But what Blodget characterizes as ‘hurting’ TV is really nothing more than the evolutionary essence of TV that has been true throughout its history. This is what differentiates TV from newspapers. A medium with little history of content and revenue evolution is absolutely doomed in today’s digital universe. But that’s not TV.

The biggest flaw in contemplating TV’s demise is one key question. What’s the alternative?

Newspapers are not a good analogue for contemplating the future of TV. Newspapers lost their audience and rate base because the Internet gave rise to better ways of serving newspapers advertisers. Classified ads, in particular, are simply better done online by Angieslist.com or Craigslist.com. These are direct substitutes. The need for the advertising that was done historically by newspapers didn’t change. What changed was the emergence of a direct substitute to meet that advertising need. There is no such substitute for TV.

Two things can be said about this. First, it is often noted that if there is no audience for TV, it doesn’t matter if there is no direct substitute for TV advertising because nobody wants anything of that sort. Second, many argue that it is only a matter of time and a technological innovation or two before a new medium emerges that will be a direct substitute. A quick word about each of these points.

With respect to the TV audience, it is certainly changing, and changing a lot. But for the most part this audience is just changing formats and times. Only a few are totally abandoning the TV content in which ads are placed. Indeed, this shift is no surprise because people always opt for greater convenience, as noted in a prior post about innovation. Adapting to changing behaviors and a preference for greater convenience is what TV has always done so well, which is what TV is in the process of doing right now.

TV producers have already reworked both content and ads to accommodate multi-screens. But note that it’s TV at the center of this nexus. New devices and new ways of connecting, especially social media, are used to amplify TV and build upon the TV platform, not the other way around.

Certainly, new media have given rise to unique content. Twitter novels are one example; vlogs are another. But in the several years that this sort of innovative content has been around, not only has TV continued to thrive, TV producers have found ways to use such innovations to enhance TV content. Additionally, TV producers have even created popular new TV shows that highlight or repurpose digital content, not to mention developing new ways to distribute and sell TV content.

TV has always been an agile medium. It is no less nimble today, which is why it is moving forward with new media rather than, like newspapers, in competition.

As for time and new technologies, there is another flaw in the thinking around the future of media. Such speculation almost always focuses on non-TV innovation and rarely on TV innovation. But it’s not as if all the new stuff is only happening with TV. New TV technologies are just as much a part of today’s scene as new non-TV technologies. Plus, TV itself is enhanced not displaced by innovations in digital and Internet media.

TV is not standing still. This is another contrast with newspapers, which made only sporadic and inconsequential attempts to stay on the cutting-edge of technology. TV has a long history of evolving its delivery, technology, content, interfaces and advertising formats in order to adapt to new innovations and changing consumer behaviors.

In fact, the biggest development in media is not the Internet but Internet TV. Rather than squaring off, the Internet and TV are coming together. Apple, Microsoft and Google are battling for the lead in this arena. Obviously, this will be TV in a new format, so it won’t be TV as we know it today. But TV as we know it today is nothing like TV ever was in the past. What has always been true of TV is change and modernization not stasis and repudiation.

However, all of this begs the question the most important question. What is TV?

If TV endures because it evolves, then what is the essence of TV that is being carried forward? Or does the continual evolution of TV betray the lack of any real identity? Is TV just a revenue model and not really a singular medium?

The answer is found in the way that TV as a screen of content connects with people. To understand this, think of the traditional brand marketing purchase funnel. TV works at the top of the funnel. TV aggregates eyeballs like no other medium ever, so it is highly efficient at creating brand awareness. TV engages viewers emotionally like few other media, so it is highly effective at building emotional engagement for brands. TV captures attention when people are in the mood to be entertained, distracted or informed, all storytelling moments, so it is the best medium ever for communicating positioning stories to consumers. All of these things take place at the top of the purchase funnel. Other media connect here, too, but TV does it best (along with magazines).

At the bottom of the funnel, digital media have proven far more effective than traditional media. For example, search ads are the best way to connect with people when they want something specific, and thus search ads have diverted marketing dollars spent to close the sale. But search ads only work if consumers are searching, which is to say that search ads are great at converting active interest that gets to the bottom of the funnel but poor at energizing latent interest or creating new interest at the top of the funnel.

Put TV together with digital media and brand marketers have the entire purchase funnel at their command. But only deploy digital media and brand marketers are leaving money on the table because they are capturing no more than what trickles down rather than boosting the flow through the funnel.

The final thing to note about TV, and maybe the most important, is that whatever formats or times people select, they want to watch TV. This is worth repeating. People like TV content. People like watching TV.

Nielsen figures show TV viewing unchanged over the past several years, and an in-depth look at these viewing figures belie many of the statistics cited as evidence of TV’s demise. For example, hours spent watching TV always skews older, making it no surprise that point in time studies show a weakness among younger consumers. Similarly, people are choosing many new ways to watch TV content, making it no surprise that as new forms of purchase, subscription, ownership and viewing rise, others decline. Additionally, people are using more forms of media these days, often simultaneously, so the rise of new media usage does not presage or predict the decline of TV usage.

Brand marketers are not unaware of the staying power of TV. Spending on TV advertising is strong and growing. It’s clear that brand marketers don’t need much convincing about the power of TV. But with all the change stirring the pot these days, they just need some reassurance.

So rest assured, the category killer of advertising is still around. It still rules. It’s called TV.

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