Good news for all you Sony tablet oglers out there who just couldn’t bring yourself to make the purchase because its pricing was just too high: Sony just announced that it is dropping its price on its Android-based tablet base unit from $499 down to $399.

The misconception by many manufacturers releasing tablets priced at $499 is that consumers are willing to spend that $499 on a tablet since they purchase iPads so readily. This however is not true. Consumers are, in fact, willing to pay $499 for a tablet from Apple. Another tablet and an Apple tablet are not the same. With the latter, you have the ability to charge a premium because it matches a premium brand.

This pricing issue is not a first for Sony. The pricing teams still believe in the equity and clout its brand once carried, even though consumers don’t. From the P3S to the recently released Vita to its tablet to the upcoming release of its personal 3D viewer, Sony believes its brand justifies the premium pricing. It is not until sales figures begin rolling in and the over-forecasting of consumer interest becomes apparent that Sony’s prices find a more realistic level.

Big news from Sony at the 2011 E3 was a new “affordable” 3D television priced at $499. Now, a few months on the market, and it is regularly priced at retail stores for $399 and as low as $299 leading up to the holiday.

The point here is that only premium brands can justify premium prices. The power of a meaningful brand is that consumers will pay more for it and even inconvenience themselves for it. The fact that you are overpriced only becomes that much more apparent when the power of the brand doesn’t match it.

All hope for Sony is not lost. It just needs to get back in touch with the highest emotional intensities that exist in the market. Until then, expect more disappointing sales figures – and dropping prices.

I have yet to find a company that has succeeded by taking what has already failed at and made it worse in order to achieve improvements. However, USPS looks it will give it a whirl.

The USPS is in a bad spot financially. Trying to regain viability while down economically is a big hurdle to overcome and often causes cautious actions when bold, profound ones are needed. The finances of the postal service have made it resort to number-crunching rather than looking at how it can best create preference in the market. Number-crunching leads to arbitrary decision making, like the removal of Saturday delivery or an increase in price of first class mail (while at the same time extending its delivery time by an additional day) without a clear understanding of what the removal means long-term.

This is not to say that some things don’t need changing or even scrapping altogether. But the lack of any visible brand message leads me to believe that these strategic decisions are not being made to better align the USPS’s operational actions with a new, more clearly defined brand. The changes instead seem like the product of a spreadsheet that lists what services must be axed based on the greatest dollar value achieved while maintaining the least possible resistance. It all adds up to a strategy that buys time, but loses in the end.

The USPS ran a recent campaign touting priority mail and its “flat rate”, pitching the flat rate as reducing hassles in operating a business. The biggest folly of the campaign was part in parcel to the fact that, when the USPS ads mention competitors like FedEx, it used a generic envelope that said “fast” on it. The proposition for the consumer was “fast” versus “flat rate.” The problem with this strategy is that FedEx’s brand is not “fast,” the brand of FedEx is “piece of mind.” FedEx has been successful because its brand represents an emotional context not a procedural one. Real equity is at the highest emotional intensity, and “flat rate” is about procedure not emotion.

With whatever budget it has left, the USPS needs to look closely at the market and find where the value for consumers exists. Only then should they evaluate what should stay, what should change and what should go altogether.

The beauty of brand, and something we stress when talking to companies full of internal politics and silos, is that it not only provides meaning externally to your consumers but it also provides internal guidance as well. It lets you know “strategically” what is the right move for a company, what plans for growth are the right ones, even what acquisitions are the correct ones. Without the guided focus of a “brand,” the USPS will continue to flounder in the dark, cutting what might not need to be cut and basing decisions on a best guess and a bottom line rather then on an understanding of why customers choose or, in this case, have not chosen.

I am pretty sure that grocery stores have never viewed their rewards programs as a way to attract customers, but just to keep them.

Because, for the most part, preference in grocery stores is based on location, especially in the absence of meaningful brands. Oh, there are exceptions. Wegmans, Earth Fare, Fresh Market and Whole Foods have something close to brands. But, for most, your grocery store of choice is based on what is closest or most familiar. There are few people willing to drive across town to shop at Kroger when there is a Harris Teeter only a few minutes away.

Grocery store chains understand this. They also understand that margins are small and shrinking. So, the “rewards program” was born. The chains understood that the only way to remain profitable was to keep their current customers coming back.

For most chains, the rewards programs work on the idea that, if you shop enough, there is some benefit — be it a discount on your next order or some kind of rewards gift. But what happens when the “rewards” go away?

The strategic offices of Stealing Share are located in Greensboro, North Carolina. One of the local North Carolina grocery stores, Lowe’s Foods, has recently changed its “rewards” program to give its shoppers money off gas purchases. Previously, it had given customers a $5 coupon once their purchases of certain store brand items had reached a certain level.

Now it is graciously giving customers five cents off per gallon of gasoline for every $100 they spend, with a 25 gallon max. For all of us non-math majors, that is a benefit of only $1.25. What’s worse is that the savings is only good at Wilco/Hess gas stations (two miles away from my nearest Lowe’s Foods).

I contacted Lowe’s about how stupid I thought this new rewards program was, saying that the previous reward program had now turned into a big zero as I will never get gasoline at Wilco/Hess because I can get the same discout at nearby Costco or Sheetz.

The response I got was troubling. To paraphrase, I was told the reason Lowe’s decided to go to the new “rewards” program was because it had gotten such positive feedback from customers where it tested this program. In all of the test locations, Lowe’s had a gas station on the same footprint. Meaning, customers could shop and then go to the gas station in the same parking lot and redeem their savings.

It does not take a scientist to figure out why the test program was met with such positive feedback. These folks were getting rewarded for something they already do: shop, then fill up their tank. For the remainder of the 90+ stores Lowe’s has, their customers must inconvenience themselves for a $1.25 benefit (which may not even cover the cost in gas it takes to redeem it). Therefore, the “loyalty reward” for shopping has been completely removed.

I have a couple of grocery stores that are equal distance from my home. Both carry the same items and, in all honesty, there is not a lot of difference in price from one to the other. Though the “rewards” program was never a conscious reason for choosing one over the other, the removal of a benefit I had taken for granted has prompted me to reconsider which store I will do my grocery shopping in the future.

As a brand guy, I have to ask myself why it matters to me where I buy groceries. The answer is it really does not matter me. Grocery store brands, for the most part, do not matter and even fewer rebrand with any meaningful purpose.

Like most families, mine tends to get the same things each week – deli meat and cheese, milk, bread, bottled water, etc. As I think about it, I have no brand loyalty to any particular store. It is purely a matter of habit.

Grocery stores, in general, have done a poor job of investing in their brands. It’s no accident that those that have made an investment in their brands – such as Wegmans, Whole Foods, etc – have actually built preference, have higher margins and customers will drive across town to shop there.

Was the reason I used Lowes only because of the $5 off coupon I got?

As margins shrink, the only way to perserve and increase preference is through investing in brand. The brand, not the rewards program, needs to be the reason a shopper chooses a particular store. Rewards programs are nice, but are they only noticed when they are gone?

It is deja vous all over again.

The Wall Street Journal had a story almost a year ago about manufacturers of high-speed rail that were furious China “stole ”the intellectual property needed to build these trains.

QINGDAO, China—When the Japanese and European companies that pioneered high-speed rail agreed to build trains for China, they thought they’d be getting access to a booming new market, billions of dollars worth of contracts and the cachet of creating the most ambitious rapid rail system in history.

What they didn’t count on was having to compete with Chinese firms who adapted their technology and turned it against them just a few years later.

Well today I heard that GM (you remember GM, the US automaker that US taxpayers own) is entering into a joint agreement to build electronic cars in China. This article just appeared in the Boston Globe.

HONG KONG – General Motors said yesterday that it would develop electric cars in China through a joint venture with a Chinese automaker, and would transfer battery and other electric car technology to the venture.

Yesterday’s announcement was being made as the Chinese government was putting heavy pressure on foreign automakers to transfer electric car technology to joint ventures in China. But GM took pains to say that its joint-venture agreement was not connected to its plans to begin importing its new US-made Chevrolet Volt electric car to China this year.

So, the Heartbeat of America has decided that it makes great short-term financial sense to enter into a joint agreement with a Chinese manufacturer. It can’t be a long-term decision considering China’s track record, can it?

I guess GM knows best. It is not knowhow and innovation that sets the US apart from the rest of the world, it must be the ability to manufacture. So GM, feel free to give our expertise away. At the end of the day, the Heart Beat of America is a brand as real and as valued as Budweiser, the King of Belgian InBev Beer.

Back when Ally Bank first launched two years ago, I thought it had inched toward the sweet spot when it came to bank marketing. Its “straightforwardness” brand was positioned against other banks, whose reputation had dropped like a stone in the minds of consumers. Even the name of Ally suggested as much, being an ally of the consumer without serving its own self-interest.

Ally’s problem, at least at that moment, was that it came from GMAC, which already had its own reputation problems. No doubt that served as the reason for the name change, but there was little hope Ally could actually fulfill its brand promise. The name change felt like a swindle, especially when it was, in essence, positioned against itself.

Now, a year later, Ally is breaking out a new brand campaign centered around, “No nonsense. Just People Sense.” In the spots, a man on the street is given thousands of dollars to hold and the video taping reveals that the man doesn’t take “one dollar.” Therefore, why would you want a bank to hold your money when it charges you fees to hold it? See the ad here.

My take is that Ally Bank has sufficiently distanced itself from GMAC that the brand can be fulfilled and the recent spots certainly are positioned against the self-interest of banks. Changing the name and brand was a good idea.

But Ally Bank is still stuck at the halfway point. The position is right, but it’s played out in a comical and very soft way. It’s not positioned emotionally and tonally against the competition and certainly doesn’t build on the emotional anger consumers have about banks.

Tone is often the forgotten component in brand positioning. Many companies believe it’s all about words – “We’ll just say it!” – but fail to realize that, if they are not positioned against the competition emotionally and tonally, they will not get noticed.

If your brand is not emotional, it simply will not work. If the tone of the brand marketing is the same as the competition, the brand is not truly positioned against the rest.

This week saw a swift drop in the stock market as Standard & Poor’s threatened to cut the U.S. credit rating amid talks that the debt ceiling will not be increased possibly resulting in the U.S. defaulting on their loans.

It was the effect that this statement had on the stock market that hammered home the concept that when it comes too the permissions of a brand, the job of maintaining those permissions is much easier when a large amount of trust is unquestioningly granted by the customer.

With regards to Standard & Poor’s, it was not that long ago that they told investors that mortgage backed securities were an AAA investment.  This has since proved to be quite  the contrary.  At the end of the day, no one has a crystal ball and much like a weatherman who tells you it will be sunny and it rains or there will flurries and it blizzards, S&P’s rating system is only their opinion based on a variety of factors they have deemed to be important. And like with the weatherman, we continue to tune in, to listen and to dress accordingly.

In most instances once a brand wrongs its target audience, maintaining and recovering the permission that the brand once possessed becomes a difficult, sometimes impossible, task.

There is a team trust exercise in which a person falls back into the arms of their teammates. It is an exercise in which you only need to be dropped once to lose trust forever. In the case of Standard & Poor’s, their consumer’s have granted them what appears to be more permission leeway than is granted to the average brand.  They need to acknowledge this granted tolerance and remember that while they have permission now, the village eventually did let the wolf get the boy who repeatedly made a fool of them.

The Super Bowl is just around the corner and it brings this year’s new crop of commercials. (Sigh…).

I was reading an article in Brandweek that heralded the 27% rise in Super Bowl ad time since 2001. Think about that for a moment. For every 60 seconds of ads in the Super Bowl in 2001, we are now seeing about 77 seconds. Over the course of a three-hour game,  the added time is nearly 50 minutes and the costs for each 30-second spot have gone up more than 35% since 2001. In digestible numbers, advertisers are paying in excess of $100,000 a second.

While this is certainly great news for those hauling in the revenues like the media buyers and the networks,  it is not good news for the advertisers.  Super Bowl ads have morphed into an expensive game of one-upsmanship. The goal for most Super Bowl ads are to be funnier, more in your face, and “original” than all of the other ads. I can hear a creative agency in their brainstorming session: “Okay everyone, we need to make this ad more funny than what we did last year. Get to work.”

This meeting is repeated for each advertiser in the Super Bowl and, at the end of it, we have a series of 30-second skits where the product advertised is, at best, nothing more than a prop with many ads only showing the brand at the very end of the commercial. They are usually sophomoric, easily forgotten snippets of entertainment only.

But I am sure you have heard all that before.

What is really troubling to me is that, with the added advertising time, advertisers are turning a deaf ear to one of the fundamental truths in advertising: Clarity. This has nothing to do with clarity of message. While that is a problem as well, I’m speaking of clarity of the medium.

What is clarity of the medium? It is the clarity of a message in the context of how it is presented. Let’s assume for a moment (and it is a big assumption) that each and every commercial in the Super Bowl is absolutely clear, meaningful and resonates with the target audience. Even so, advertisers would still suffer from lack of clarity.

Clarity of the medium is an advertiser’s ability to stand out and break through the clutter of all the other messages that are being seen, heard, and felt by the target audience. It is not enough to stand out. You must stand out in a crowd of others trying to stand out.  This is one of the reasons why advertisers and their agencies have moved to entertainment – they want to stand out in the crowd.

But what they are not considering are the sheer numbers of advertising messages. With more and more time being dedicated to advertising, an advertiser’s message gets lost. If the advertising crowd gets bigger, it becomes more and more difficult to stand out. The more advertising space is sold in the Super Bowl, the more diluted each advertisers message becomes.

Economic laws predict that as a resource becomes less scarce, the value of that resource should decrease. So logically that would mean the more advertising space sold the more the value of that space decreases. The funny thing about this that the value of the Super Bowl advertising space has actually decreased but the cost for that space has not. Having almost an hour of additional commercials in the Super Bowl since 2001 has greatly reduced an advertiser’s ability to “stand out” and it is worrying that they haven’t seen it, judging by how many jump on board.

I think the fundamental problem is that most advertisers and their agencies are really at a loss as to what to do in many cases. Ad agencies want to protect their accounts and the revenue they receive from those accounts both in terms of fees and commissions on ad placements and advertisers are looking for ways to get their message out. Those fascinated with social media are searching for how their messages can go “viral.”  For some marketers, CEOs, and other executives having an ad in the Super Bowl means that they have “made it.” I think that this was the case with Buffalo Wild Wings last year, which incidentally, is the only ad I can remember now from last year.

There are better ways to spend more than $100,000 a second in order to get your target audiences attention. And it is a sad state of advertising when few see it.

The news is awash with stories about the dwindling funds for higher education.  As a matter of fact, there is a battle raging for all public funding in just about every sector you an imagine. So, it is not surprising that colleges and universities, especially public institutions, are engaged in plans to help the institution garner a greater share of available funds.

This morning, NPR had an interesting story about just this subject. The summary of the article from the NPR website follows: ”More and more states are looking to link college budgets to schools’ performance — such as number of degrees produced and the ability to graduate challenging students. The idea has been tried before, but now many states say tough finances make it more important than ever to get something for their investment.”

Now, universities and colleges have a serious brand problem and I worry that this new move will just make matters worse.

Most everyone in business today recognizes that the students that knock on their doors seeking a job are completely unprepared to do almost anything. They lack the ability to communicate clearly, they have supped on pop culture and are not well read, they write poorly, can’t seem to problem solve, believe they can multi-task and, on top of it all, are convinced of their own self-importance and worth.

For those of us who hire, the brand of colleges and universities means very little. A degree in just about anything simply means the applicant has great debt and few skills. They have been coddled and spoon-fed by educators and intellectuals that have as much experience and understanding as…well, those of you who recognize this scenario know exactly what I mean.

My dad used to say that a college degree today was the equivalent to a high school degree in his day. I think he was correct. College was not for everyone and those lucky enough to attend had to work their butts off.

Today, it seems everyone goes to college (even if they don’t graduate). Rather than a university representing a major step along the intellectual search, it has become a four (or five, in many cases) years of respite from responsibility, punctuated by binge drinking, non-stop partying, and video games. (My apologies to those to of which this does not apply, but this just proves the power of a brand and how all brands are judged by its common denominator.)

Many believe this erosion of the brand of higher education has been due to more open enrollment, remedial class work and a hunger by the university and college administration for bigger enrollment and a larger student body (and I’m not talking about the Freshman 15). They may be right. College as not meant for everyone, but it has become just that.

So does a focus on rewarding colleges for a higher graduation rate promise to fix the problem? Considering “no child left behind” and the propensity of education to make everything a process, I doubt it.

So tell me, if a college or university stands to lose funding if a student fails out of that university, what do you think the chances are of that university actually flunking that student? If we have learned anything in our lives it is that you cannot legislate hard work and achievement. You can’t incentivize it either from external sources. You either have the drive or you don’t. If you don’t, then maybe college isn’t for you.

If the higher education community cares at all about its brands, those responsible should remember that the basis of all value is scarcity. The more common anything is the less it is desired, rewarded and valued.

Sears announced what has become an epitaph to the once great department store – another quarterly loss. For the third quarter, Sears lost $218 million which is more than $91 million than it lost in 3Q last year. Clearly, Sears is hemorrhaging and it needs to do something or it too will go the way of Circuit City – and it must do something quickly.

Sears blames poor appliance and home improvement sales for the loss. It is even making the unprecedented move of remaining open on Thanksgiving in a frantic effort to bolster 4Q revenue. It seems to me that, if it is having problems getting people in the store on a regular day, I doubt many consumers will rush out of their Thanksgiving holiday meals and celebrations to go to Sears. (It actually might work if Sears had a brand whose meaning had permission to be a destination on a holiday.)

Sears executives can blame a poor economy all they want for their increasing losses.  They can blame the economy until investors run out of of patience (or cash) and the once-great icon of retail falls, leaving carcasses of retail space and an unemployed workforce in its wake.

It would be naive of me to suggest that the faltering economy is not a contributing factor to the problems at Sears. In fact, the faltering economy is the very thing that magnifies the problems at Sears (and many other companies for that matter), which is its lack of ability to create and sustain preference.

In a good economy, this inability to create and sustain preference is not as acute of an issue as revenues from sales and promotions can often mask the bigger problem.  But when the economy is off and people are being more particular about where and how they spend their money, preference is often the difference between survival and failure.

This lack of preference has a snowball effect. I drove by our local Sears on Tuesday and counted five cars in the parking lot. Ever pulled up to a restaurant with no cars in the parking lot? Did you go in and have dinner?

Throughout the last few years, we at Stealing Share have talked to great length about Sears and the problems it faces. We believe we have a strategy that can give it exactly what it is missing – preference and a reason to go to the store. This does not involve changing Sears’ advertising agency or hiring a social media expert to create a silly viral video or Facebook page.  It involves two things:  1. A willingness to change. 2.  A real desire to win.

By continuing to do what Sears has always done will only bring it to the same place – a continuation of hemorrhaging cash. Open yourself up to change, and embrace the opportunity the market is giving you and, not only will you survive the down economy, you will flourish.

1. Never define your brand by a technology or delivery system. No one has seen, let alone watched, a “video” in to years or more. When you define your brand by what it is you are selling, you open yourselves to the risk of a change in technology that renders your brand obsolete. Look to Apple as an example of a brand that has defined itself in terms of a brand promise rather than a technology. That’s is why the company is no longer called Apple Computer but rather just Apple, Inc.
2. Evolve your brand constantly to reflect and anticipate changes. All economies trend towards efficiencies (that is why they are called economies). This means that all markets will inevitably evolve towards the most efficient delivery system of the served benefit. If you can receive a benefit, without the inconvenience of having to go somewhere to purchase it, the destination aspect of your brand business will become a hindrance rather than an asset. Netflix is an example of this principal with its Instant Viewing availability. However, Netflix is in violation of the first principal if the delivery system moves from Internet to some other delivery system. After all, “Net” is part of their name.
3. “Local” is a value only in a market with inefficiency. Having stores on every corner is not a value. It is a cost. It only speaks to the brands inability to attract loyalty beyond what is “on the correct side of the road.” Markets trend once again to efficiencies and the value of local (as in your local bank) becomes way overstated. Anyone who forms an attachment to a brand believes the attachment is local and personal. Fashion has understood this for years. When someone buys a designer purse, they have developed a personal bond that transcends distance.

Brand evolution too often is shelved because the price of diligence and change is not insignificant. It requires every CEO and CMO to constantly reevaluate the brand’s proposition and adjust it to reflect customer changes. It is the textbook example of the epoch battle between what the company wants to have transpire and what the customer desires. At the end of the day, all that matters is the customer’s beliefs. The brand’s proposition needs to reflect it.

If we do not heed the lessons of Blockbuster and invest in the brand’s evolutionary cycle — recognizing that the investment may not be a short-term profit center but a long-term strategy — there will be a cost to sticking our head in a hole like an ostrich. Just ask Blockbuster. Unless it asks for help from us, whatever it does will be too little to late.