There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorsed sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

Driver sub-brand

Definition:

• The parent brand retains its primary influence as a driver, and the sub-brand can act as a descriptor-a word or phrase that tells end-users that the company is offering a slight variation on the same product or service they have come to know.

Note: Of the three types of relationships, a driver brand with a descriptor sub-brand is the most risky. The parent brand is vulnerable to cannibalization because very little distinguishes one brand from the other. The risk of cannibalization is greatest when a descriptor signifies merely a lower-quality offering. The risk is minimized when the descriptor signals a different application.

Examples:

• Mercedes provides a good illustration of a driver brand that has successfully accessed a downscale market with a descriptor sub-brand. In the early 1980s, Mercedes introduced that is now it’s C Class, a small car to compete with the BMW 3 series, as well as with Acura and Lexus.
• Now priced around $30,000, the line sells nearly 30,000 cars annually in the United States (around one-third of all Mercedes sales in the United States).
• How could a brand that has historically been identified with prestige and that offers a car selling for more than $100,000 pull off this kind of downscale move?
• First, Mercedes delivered a quality product.
• Second, the C Class introduction was accompanied by an intensive effort to reposition the core brand’s message from prestige to performance.
• Third, marketing for the C class aggressively targeted young buyers. The C Class name creates a distinction that allows the sub-brand to attract a slightly different consumer, but it does not drive that consumer’s decision to buy the car. The Mercedes brand retains that power.

Celeron – B to B (Intel) 1997

• To combat AMD’s $260.00 K6 processor chip, and to avoid having to lower prices on its Pentium processor, Intel launched a sub-brand dubbed Celeron.
• Despite a couple of early pricing mistakes and mishaps in expectations management, Intel succeed in combating and keeping AMD from creating a strong foothold in the low-end market. With a share of 80% of the overall processor market and their ability to roll out new processors frequently, Intel proved to be a testament to both the power of fighter brands to open up lower-tier market opportunities and their unequaled ability to keep competitors at bay.
• Note: The EU have recently been successful in winning a ruling against Intel regarding antitrust issues and pricing manipulation resulting in a fine of $1.5 billion dollars. We wonder whether the costs of the now 5 year old lawsuit brought by AMD, the fine and the distractions for Intel’s senior management team, would justify the launch of another Celeron value sub-brand when you already have more than 80 percent of the total market share.

There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorsed sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

Co-driver

Definition:

• The parent brand and the sub-brand act as co-drivers with roughly equal influence on consumers.

Examples:

United Express (United Airlines)

The United Airlines brand provides United Express, a commuter line, with the convenience of connections to United flights and a reputation for safety. There is no cannibalization because the flights do not compete. United Express is differentiated from its parent brand by its lower level of on-board service, its use of smaller planes, and its less formal personality.

Good News (Gillette)

Gillette Good News also illustrates a successful co-driver relationship. Gillette Good News disposable razors are a definite cut below ‘the best a man can get” that is the Gillette legacy in shaving. But disposable razors are qualitatively different from the upscale razors such as Sensor and Atra with which Gillette has long held a technological edge. Gillette could provide a rationale for a disposable brand by being the best in the disposable category. But the Good News user’s personality – younger and more carefree than the traditionally masculine and sophisticated Gillette persona – plays a key role in distinguishing the disposable brand from the rest of the line. Both brand names – Gillette and Good News – influence the customer’s decision to buy the product.

Since all businesses have a number of case studies that are relevant to their target audience, we suggest that you establish a CSS style web site, with a blog and content management backend where posting a new page or new blog is as easy as writing a word document or an e-mail. If you take a closer look at your competition, you will also realize that they aren’t effectively using the social media and other means of SEO friendly web sites, which in turn will send you scores of inquiries from new prospects.

Building a well designed and professional site, writing content and educating you on how to maintain or update the site is fairly inexpensive, and can be done for about $7,500 – $10,000.

Even though our own site www.KompaniGroup.com and www.ActiveServe.com are more complex than what you may need, they represent the web 2.0 CSS type of web site we are talking about. Both of these sites are receiving new hits and leads every week, mainly because they both are optimized for SEO and because we are active in posting blogs.

This is a great article from Roger Martin from the Harvard Business Review. We think this explains why most corporations don’t have a “big idea” for how to communicate their brand and essence to their stakeholders. Enjoy. Well done Roger!

A good strategy is the product of the creative combination of two disparate logics — rather than a single linear analytical logic flow — but CEOs and “strategists” are seldom conditioned to become skilled at the requisite creative combination.

There is a lot of strategy in the world, produced by all types of CEOs, corporate heads of strategy, and strategy consultants. Yet very little of this strategy is any good. There are undoubtedly many possible explanations for why this is the case, but here is my own pet theory, which I offer up to elicit your reactions and surface alternatives:

A good strategy is the product of the creative combination of two disparate logics — rather than a single linear analytical logic flow — but CEOs and “strategists” are seldom conditioned to become skilled at the requisite creative combination.

The two most fundamental strategic choices are deciding where to play and how to win. These two decisions — in what areas will the company compete, and on what basis will it do so — are the critical one-two punch to generate strategic advantage. However, they can’t be considered independently or sequentially. In a great strategy, your where-to-play and how-to-win choices fit together and reinforce one another.

For example, operating only in your home country market may seem to be a perfectly fine where-to-play choice and winning on the basis of technological superiority a perfectly fine how-to-win choice, but their combination almost always produces a bad strategy — because of global economies of scale in R&D, some competitor will globalize and blow out the geographically narrow national player. These choices don’t fit or reinforce.

In contrast, Apple wins because its where-to-play choice — broad participation across a number of high-involvement consumer electronics categories (computers, music, phones) — is matched wonderfully with its how-to-win choice — competing on user experience design and eco-system orchestration. It leverages the winning capabilities it has built in these two areas across the domains in which it has chosen to play to produce its winning Macs, iPods, and iPhones.

The trouble is, CEOs don’t usually get to the top by integrating different logics in that way. More often they rise by pushing a single logic. They like to analyze a problem and come up with a single, sufficient answer, like how to globalize or get costs under control or introduce a new product, rather than trying to look for answers to two questions that fit together elegantly.

As a consequence, many of them come to think of strategy as either where-to-play or how-to-win. For example, in the global pharma industry today, it appears that most CEOs define their strategies as simply playing in the historically lucrative pharma industry and doing whatever the rest of their competitors do. This is silent on how-to-win and the resultant set of me-too strategies is one reason why performance in the industry is going downhill fast.

Or alternatively, for many high-tech CEOs, the dominant choice is to win with a proprietary technology. This is silent on where-to-play and that has led many technology companies astray because it really matters where exactly that technology is used — as we see with Nortel Networks, which is now in the bankruptcy court despite its treasure trove of technology patents.

Meanwhile, corporate strategists and strategy consultants get ahead by demonstrating mastery of all sorts of conceptual tools for analyzing where-to-play (five forces, profit maps, etc.) or how-to-win (experience curve, value chain, VIRO, etc.). However, there as yet is no analytical tool for combining a given where-to-play choice with a congenial how-to-win choice or vice versa. That takes creative insight. But the majority of people who seek to become corporate strategists or strategy consultants do so because they are much more comfortable with analysis than what they perceive as guesswork. So they tend to become expert at strategic analyses, not strategy.

That, I submit, is why CEOs and “strategists” so seldom produce good strategies. Strategy is a creative act and the way to produce good strategy is go beyond basic analysis to creatively integrate your choices concerning where you play and how you propose to win.

Roger Martin is the Dean of the Rotman School of Management at the University of Toronto in Canada and the author of The Design of Business: Why Design Thinking is the Next Competitive Advantage (Harvard Business Press, 2009).

Who is the best damn chef in Miami, and which chef has the most contagious personality. We think we know the answer. Check out the new Chef Michelle Bernstein website.  For Michelle we developed a site that has a simple and easy- to- use content management system which allows her staff to update textual content, press releases, and photos throughout the site. The integration fits perfectly with the design work created by Matt Cohen from CAT5 creative. Using a hybrid development strategy we have allowed search engines to index the website while allowing elegant flash slide show functionality. The same methodology was used to build and release two smaller satellite sites for Michelle Bernstein’s restaurants, Sra. Martinez and Michy’s Miami. Maybe now she will consider adding the roasted pork squares on a bed of water melon back on the menu? Anyway, Kompani Group wish they they never got pulled from the menu in the first place.

Click here to judge for yourself.

Looking for experienced PHP/MySQL freelance developers to work remotely on our internal and external brands.

Technical Skills

• Extensive PHP5 OOP experience within MVC frameworks
• MySQL
• Solid grasp of HTML and CSS with extensive JavaScript/AJAX/JQuery experience
• Knowledge of UI design principles & expertise in developing interactive websites

Personal

• Self motivated and ready for a challenge
• Enjoy fast moving development cycles
• Ability to maintain high Quality standards, be a self learner and have the drive to Innovate
• Excellent verbal and written communication skills.

Desired (optional)

• Wordpress customization and expansion
• Amazon Web Services (EC2, S3)
• ActionScript 3
• Flex

Please send example sites, your involvement with those sites, rate structure and ball park costs on example projects. Email us at jobs@kompanigroup.com.

The economic strains are causing your end-users to trade down, resulting in that the mid-tier and premium brands are losing share to low-price rivals. You face a classic strategic conundrum: Do you tackle the threat head-on by reducing prices, knowing that will destroy profits in the short term and brand equity in the long term? Or do you hold the line, hope for better times to return, and in the meantime lose customers who might never come back? Given how unpalatable both of those alternatives are, you now must make a decision of how to combat manufacturers and distributors of lower priced and inferior products, to avoid losing additional market share and eroding margins.

There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorsed sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

Option Two – Endorsed Sub-Brand

Definition:

• A sub-brand is a brand with its own name that uses the name of its parent brand in some capacity to bolster equity.
• In the case of downscale offerings, the role of sub-brands is to help managers differentiate new offerings from the parent brand while using the parent’s equity to influence consumers.
• The idea is both to maintain the parent’s credibility and prestige regardless of how the sub-brand performs and to protect the original brand from cannibalization.

Endorser

• Definition: The parent brand acts as the endorser of the sub-brand. In this case, the sub-brand is the more dominant of the two, and drives end-users’ decisions to purchase the product as well as their perceptions of the experience of using the product.
• When a company offers an endorsed sub-brand, there are three brands at work. The parent brand itself is split into two: a product brand and an organizational brand. The product brand remains as it was, a premium brand delivering a certain image and associated benefits.
• The endorser strategy provides an excellent chance to minimize damage and reduce the threat of cannibalization to the parent brand. Keep in mind that all three brands need to be managed actively.

Examples:

Sabre B to C (John Deere)

• John Deere’s foray into value lawn tractors provides a good illustration of an endorser relationship. John Deere was well known for making a lawn tractor that sold for approximately $2,000 through full-service specialty dealers.
• Although the manufacturer was still able to command that price in the specialty market, volume retailers such as Sears and Home Depot had begun to serve a growing portion (around 30%) of that market, selling products at half John Deere’s prices.
• So the company introduced an endorsed sub-brand for the value retailers: a low-cost tractor, Sabre from John Deere, that featured an inexpensive design and a different color and feel that John Deere’s other products

Medalist B to B (Hobart)

• The Hobart Company, which makes an industrial-grade mixer for use in bakeries and restaurants.
• Managers decided to create an inexpensive mixer for us in commercial and industrial kitchens to compete with offshore entries without damaging its flagship “gold standard” Hobart mixer line.
• In 1996 the company introduced Medalist from the Hobart Company. Medalist mixers were lighter than Hobart mixers.
• In addition, they were made with less costly materials and construction processes; and they had a color and logo distinct from those of the flagship Hobart.
• In this example, The Hobart Company, has become an organizational brand that endorses the sub-brand, Medalist. Medalist itself is a new product brand. Thus the parent brand, Hobart, is separated from the sub-brand, Medalist, by the organizational brand, The Hobart Company.

This is the first of 4 posts about how to combat manufactures and distributors of inferior products that are being reverse engineered and produced in China and sold at much lower prices to your existing clients. You are losing market share fast, and it is time to do something about it.

The economic strains are causing your end-users to trade down, resulting in that the mid-tier and premium brands are losing share to low-price rivals. You face a classic strategic conundrum: Do you tackle the threat head-on by reducing prices, knowing that will destroy profits in the short term and brand equity in the long term? Or do you hold the line, hope for better times to return, and in the meantime lose customers who might never come back? Given how unpalatable both of those alternatives are, you now must make a decision of how to combat manufacturers and distributors of lower priced and inferior products, to avoid losing additional market share and eroding margins.

There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorse sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

1) Definition of a fighter brand

• A fighter brand is designed to combat, and ideally eliminate, low-price competitors while protecting an organization’s premium-price offerings.
• A fighter brand, however, is not easy to introduce. First creating a new brand-building awareness, establishing perceptions of identity and quality, developing distributions channels is expensive, often prohibitively so.

• Concerns about launching fighter brands
  • Will it cannibalize our premium offering?
  • Will it fail to bury the competition?
  • Will it lose money?
  • Will it miss the mark with end-users?
  • Will it consume too much management attention?

• Other strategic questions to consider before launching at fighter brand
  • Determine whether another brand is truly necessary
  • Run the numbers, including what it will cost to build and sustain a new brand
  • Listen to your clients and customers, early and often
  • Reinvest in your core business and consistently calibrate between the two brands.
  • Is the market you are entering still growing

Examples of fighter brands

Saturn – B to C (General Motors) 1982

• To combat the growing threat from fuel-efficient and affordable cars being launched into America from Japan, GM decided to launch of an “a different kind of car company” dubbed Saturn.
• Despite the fact that Saturn won accolades for being one of the strongest brands in the U.S, Saturn proved to be a financial disaster with losses in excess of 10 billion dollars. With no budgetary discipline and so much focus on differentiating Saturn from the other GM brands, completely defeated the purpose of launching the brand in the first place.

Jetstar – (Quantas) 2004

• To combat low-fare entrant Virgin Blue, Quantas decided to launch their own low-fare airline in 2003.
• Since Quantas only had one single brand, it did not want to create a new brand unless it had to.
• Exhaustive strategic sessions confirmed, however, that the Quantas brand was simply not in a position to combat Virgin Blue’s explosive growth. A fighter brand was the only option.
• Quantas’ detailed projections showed that by offering no frills, its new airline could achieve a 20% cost advantage over its rival; thus allowing it to undercut Virgin Blue’s prices while sustaining a profit.
• Quantum spent considerable time on focus groups across Australia and listening to their customers to validate the planned initiatives.
• In 2004 Jetstar was launched with 14 planes flying to 14 destinations. The speed at which Jetstar attacked took Virgin Blue by surprise and knocked it off balance.
• Jetstar took over the tourist routes that Quantas had lost money on. Because Jetstar proved profitable on those routes, it cannibalized only revenues, not profits.
• Thanks to Jetstar, Quantas was able to refocus on its more profitable business routes and increase the frequency of its flights on those legs.
• The subsequent boost in profits, along with Jetstar’s growing contribution, were reinvested in overhauls of Quantas’s business lounges and business class cabins – strengthening the Quantas brand and the distinction between it and Jetstar.
• Jetstar has stopped the growth of Virgin Blue, and Quantas is now using the brand to fight other competitors in Asia and New Zealand.

Ambra – B to professional (IBM) 1992

• To combat the growing threat from direct marketers of personal computers like Dell and Gateway and other IBM models.
• The Ambra was sourced in Asia and marketed between 1992 and 1994 by mail order in Europe and the United States.
• Due to lack of brand equity and distribution barriers the Ambra was cancelled 2 years after its birth.

Gary Vaynerchuk grew his family business from $4 million to $50 million using social media.  Gary’s eccentric personality and offbeat oenophile knowledge have proven a natural path to success with his Wine TV Library. Vaynerchuk found first hand that $15,000 in Direct Mail = 200 new customers, $7,500 Billboard = 300 new customers, $0 Twitter = 1,800 new customers.

Dell sold $3,000,000 worth of computers on Twitter

eBay found participants in online communities spend 54% more

These are some startling and inspiring facts. If you are currently utilizing social media, what has been your measure of success?

And, when there is an opening in the seafood procurement department at your company, take the job, and consider teaming up with our friends from Portunus Group. Their CEO Palmi Palmason is one of these steadfast honest Vikings from Iceland, who will source the most nutritious and healthiest seafood from anywhere on the face of the planet and land it fresh in your seafood aisle. Enjoy. www.PortunusGroup.com