The Tom Dougherty Blog



Posts tagged “Branding”

The sixth reason to bring brand into the boardroom

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Ever wonder why brand is important to corporate growth? Check out Jennifer Barron’s “5 Reasons To Bring Brand Into the Boardroom,” in Marketing Daily.

Barron contends that brand is a company’s most valuable asset and a driver of customer purchase. She says brand requires investment and must be aligned with everything the company does.

Most importantly, Barron says brand should not be confused with marketing.

Insightful reasons.

I’d like to add one more: Brand is the best way to steal market share.

Some foolishly believe that discount prices or superior products steal share. Yet prices and products often yield short-term gains and may not be important to consumers.

For example, the iPhone may not be the best mobile phone on the market, but it leads the market because of the Apple brand.

The best way to offer true choice to consumers is to offer a different brand. When everything is equal, as it is in most industries, consumers stay with familiar products.

They will switch only when they see something that is different, a true choice. That’s where brand comes in. If your brand is different and better than the competition’s, you will steal share.




Zipcar and Avis can be a success but will depend on brand

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With the acquisition of Zipcar underway by Avis Budget group, Avis should take this time to consider how closely the Zipcar should be integrated. The joining of Avis, a traditional car rental company, and Zipcar, a car sharing company in which members pay for access to a network of Zipcar vehicles (located throughout large cities such as Portland and Chicago), is a match that makes sense from a business sense but one that will need more attention from a brand sense.

From a business sense Zipcar’s can expand its fleet easily with vehicles already in use by Avis, and Zipcar can help Avis diversify itself a bit from rental competitors like Hertz.  However, things are a bit less cut and dry when it comes to brand. From a brand perspective Avis is about utility and Zipcar is about a lifestyle.zipcar brand avis brand

The brand considerations are more about context than anything else. Take for example the Avis customer. They are someone in a position in which a car rental has become a necessity. The context in which they choose the Avis brand is most likely at an airport and in that moment, either due to business or vacation, a rental vehicle is needed. Zipcar on the other hand is about the day-to-day. Zipcar is for the city dweller where vehicle ownership might simply be impractical. The end result for an Avis customer and a Zipcar member might be the same (each gains use of a car for a period of time), but the context is very different.

There is certainly a commonality between Avis and Zipcar, and from an acquisition standpoint, it should not have many people scratching their heads as to why. But speaking as someone who first sees brand implications and then business implications, Avis needs to find the emotional thread that is shared between the Avis customer and the Zipcar member and should use that intensity to bridge the two brands. The fact that the two companies rent cars should simply be  filler.

 




Customers love you when you’re hot and hate you when you’re not

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There are many fascinating things about consumer behavior and their effect on brand preference. One of the most interesting is how quickly tides can shift and how the apple of a consumer’s eye quickly becomes rotten.

The most recent example of this is Facebook. Sure, there are still legions of loyal followers, but, since the first whiff of negativity from its IPO, we’ve seen a constant barrage about its long-term viability, usership on the decline, lawsuits, negative press, you name it. The same happened with Netflix when it attempted Qwikster. Almost overnight, the angry mobs grabbed their pitchforks, where just a few days earlier they would have sung Netflix’s praises. Yes, consumers love you when your hot, but is cold comfort.

Customers are emotional. They are human. This is why, when rebranding companies, we find the highest emotional intensity in the market. The higher the intensity, the more willing a consumer is to switch to you and the more loyal your current customers become. Never take for granted decisions that your customers will remain loyal if your brand is not aligned with that intensity. Loyalty is created by consistent and intense brand meaning. If you are not consistent, the intensity you have built will come crashing down. If your brand strays, so too will the customer.

So take heed brands. Make your decisions wisely and, above all, respect the power of an emotionally intensive brand. The decisions you make have a great effect on it.




JCPenney should remain patient with its rebranding

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Despite a turnaround in its image, messaging and overall brand, JCPenny has not done well so far this year. My message to JCPenney, however: Stay the course, and focus on the long term.

JCPenney’s rebranding to “fair and square” is a good one if only for the fact that it positions JCPenney against the competition. Suggested in the themeline is that the rest are not fair and square, which may tap into consumers’ belief that other retailers bilk them. It touches on an idea that is steeped with a bit more emotion, a first step in establishing a brand. What is refreshing about the move is the operational changes JCPenney has made to reinforce the new language.

Even though there is slow change, the rebranding positions JCPenney positively for multiple reasons.

First, it creates greater distinction in defining who the brand is for. It is for those who value fairness.

“Fair and square” has been taking a hit so far, with most of that hit being attributed to JCPenney’s elimination of coupons and replacing them with fairer prices.

Sure, this change might cause some coupon’ers to stop shopping at JCPenney but a coupon’er is only loyal to the coupon, not the brand. They are deal shoppers and, most often, the least brand loyal by defintion.

While “fair and square” has lost some of these customers, with constancy of message, it will begin attracting new ones in their place. Think of it this way: Those of us who do not coupon, believe that, if I need to coupon, that means the listed price is not fair. The building of preference for JCPenney will slowly build with those who are not necessarily looking for the lowest price (which those who coupon are), but the fairest.

Secondly, JCPenney is taking steps to make “fair and square” more than just talk. It is easy to say something. It is much more difficult to put it into action. An intensive marketing message can draw customers, but, if it is not backed up with action to reinforce that message, customers soon become the wiser. It is better to be trusted by customers and represent nothing than to try to stand for something and it not be true. JCPenney is taking a bold step with its brand and it shows it understands its importance by the actions it is taking to make its new messaging believed.

Lastly, it is different. The initial downturn for JCPenney proves the point that those who coupon are not brand loyal. And, to coupon, you must believe that all retailers are the same. Fortunately for JCPenney, there is value in putting a stake in the ground. It provides direction and creates a brand identity.

A brand rarely changes the market overnight. Often marketers become nervous and make an about-face at the first sign of trouble. JCPenney must stay committed and remember that the changes it has made make a brand. It doesn’t want to revert back to simply being a store.




Nostalgia is a clever branding tactic, but not very wise

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Design books rarely tickle my fancy, yet, when I recently perused Stylepedia: A guide to graphic design mannerisms, quirks, and conceits recently, I was hooked. The chapter that grabbed me was entitled, “Pastiche”. For those like me who are unfamiliar with the definition of “pastiche”, it means: “a dramatic, literary, or musical piece openly imitating the works of previous artists.” Which is a perfect title for the selection. I found the chapter an absolute gem as it conveyed an engrossing explanation on the laziness of brands reusing vintage concepts.

Traditionally, when companies reuse nostalgic imagery, it draws upon our sentimental feelings of the past. (Pepsi “Throwback”, anyone?) But the bigger question remains — does the reemergence of vintage design symbolize a lack of branding smarts? I believe it does.

As stated in Stylepedia, the initial re-exposure to vintage concepts is indeed a sentimental experience, but doing so alludes to a lack of fresh concepts, modern brand recognition, and moreover “courage, inspiration or ingenuity.”

Noted by Debbie Millman (a brand expert and also the director of the Sterling Group) in Stylepedia:

“I think that the brand is suffering from ‘no new-news’ situation, and thus management is trying to drum up any reason possible for consumers – and/or the media – to take notice. While the packaging had a certain charm to it, there was no real ‘reason’ for doing it other than to (potentially) tug at older consumers heartstrings waxing for anything nostalgic.”

It’s hard to not agree with these sentiments. While there are absolutely brands whose look and feel can stand the test of time (Classic Coca-Cola bottles, Converse All-Stars and Heinz, for instance), these are companies whose brands are at the forefront of their respective markets. More than not, the followers of those market leaders only appear weak when they rely on their past, rather than examining the endless possibilities of their future.

Nostalgia only works if a yearning for that bygone time – and what it means in context of the market – has the highest emotional intensity in the market. More often than not, however, it’s just lazy rebranding.




Wendy’s claiming #2 is the easy part, #1 is another story

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With sales of $8.5 billion in 2011, Wendy’s just the claimed number 2 spot, moving ahead of Burger King but was well short of McDonald’s $34.2 billion. This second place battle of the pygmies needs to find greater meaning in the market if either ever wants a crack at McDonalds.

My worry for Wendy’s is that its rise will prompt it to confuse activity with accomplishment. Yes, from a marketing perspective, Wendy’s is doing things, but its rise has been relative to Burger King’s inconsistent execution of any strategy.

Most of our battles at Stealing Share when rebranding companies is changing the internal mindset of those companies. Positive news, like Wendy’s received, provides a false sense of security. Fortune favors the bold and, if my past experience has taught me anything, it is that a third place Wendy’s would be strategically more bold than a second place Wendy’s.

Strategically, Wendy’s should set its sights on the white whale: McDonald’s. At the moment, however, it seems to be doing the same as Burger King by marketing product instead of brand. Copy in a recent Wendy’s ads goes: “No matter who you are, Wendy’s will make a Dave’s Hot and Juicy Cheeseburger fresh just for you, so its special, just like you.” Give me a moment while I my eyes stop rolling. Beyond its campy verbiage, it provides no switching trigger for the customer. Does anyone believe they would be refused service when they go to a fast food restaurant? Or that a competitor will not make hamburgers?

McDonald’s has been successful due to its message clarity, consistency and firm brand meaning of “fun.” In fact, that brand promise is represented as an experience rather then product.

Wendy’s is certainly in a good position. Number two is nothing to scoff at. But it will take focus to clear the gap with McDonalds and being able to spot the pivotal brand difference between its brand  and the Mickey-Dee one.




Peyton Manning will always represent the “Horseshoe”

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Peyton Manning, unarguably one of the best quarterbacks ever to play in the NFL, was been released today by the Indianapolis Colts. Recovering from a series of neck surgeries, the Colts’ owner, Jim Irsay, decided that it was time to release Manning outright, while also saving $28 million on an option Manning was due.

You often hear about how players in professional sports are overpaid and, in most instances, I wholeheartedly concur. Paying Manning that kind of money does seem questionable, especially considering the salary cap, Peyton’s surgery and ability to play again at age 36.

But it just feels wrong, and I think I know why.

Since he was drafted by Indianapolis in 1998, Manning has been the face of the “Horseshoe.” Until last year, he never missed a game, led his team to the playoffs in all but two of his 13 seasons (not including 2011), including winning a Super Bowl, and five MVP awards. He has led the league in nearly all categories for a quarterback, is a leader in the locker room and generally accepted as an all around nice guy with his head on straight. (He’s also the best actor among all great quarterbacks, judging by his many hilarious commercials.) Last year without him, the Colts had the worst record in the NFL.

What is at issue here is the value of Peyton Manning beyond his playing football and his value to the Indianapolis Colts brand. I am not arguing that Manning should be paid $28 million dollars because of this. It doesn’t feel right even though today’s news conference was emotional from both sides – and retiring his jersey was a nice touch.

But it can still be hard to let go, just from an emotional standpoint as a fan. Imagine what Apple would be like if the moment Steve Jobs got the news of his cancer, the board decided to fire him. Or if the Chicago Bulls opted not to take Jordan back after he retired the first time (he led the Bulls to three more NBA championships after his return).

Peyton Manning deserves better than this, probably not $28 million better. But better to some measure. Yes, there is always some young buck (Andrew Luck) that can come in and maybe replace him on the field as Indy reboots. The Colts are hoping this is akin to Brett Favre being released and Aaron Rodgers taking his place.

But Manning’s value to the Colts brand goes beyond what happened on the field and I fear that we won’t feel the same about the Colts.

 




Ironically, the Super Bowl heralds traditional media’s demise

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In this day and age of hyper-segmentation, with broadcasters and media providers developing programming for a specific audience (i.e., those they deem they can market to), there is still a single bastion of commonality that brings consumer segments spanning the gambit together for no less that 4 hours – the Super Bowl.

Some companies spend nearly their entire annual advertising budget on a 30-second ad, hoping it will be the subject of “Super Bowl top 10 commercial” lists or get the all important social media title of “viral.” For advertisers, the Super Bowl has become more than a football championship. It’s become the championship of advertisers and their agencies.

Analysts, bloggers, newscasters, and everyone in between will spend the weeks and months before and after the Super Bowl dissecting the ads, saying which one they believe were the most entertaining, provocative, and funny. There is often a hush at Super Bowl parties at the first commercial break with viewers expecting to see a commercial that will blow their minds. For many, the ads have become as important as the game itself.

This year’s Super Bowl will change everything. For the first time, the Super Bowl will be streamed on the Internet. Viewers will have unprecedented control over camera angles and replays.  Computers, hand-held devices, and Internet-capable TVs will be tuned in to the game like never before, giving users of these devices a novel way to see an event they have come to love.

This is exactly why streaming the Super Bowl heralds in a new era of media.

First, viewers who are seeing the game streamed on the Internet now have the ability to easily navigate away from the torrent of advertising that accompanies the game. Not to say that those who have no interest in the ads previously did not get up to go to the bathroom, get another beer, or refill their plate of food. But watching it on a phone or computer, it is much easier to open a new tab or check email during the ad breaks.

Secondly, and more importantly, streaming the game is a signal that the NFL understands that the world is changing and that perhaps it will eventually not need traditional over-the-wire or cable broadcast to get their product out to the masses. Though the game will still, and probably always, be on a major over-the-air network, the shift in strategy by the NFL is a signal to viewers and advertisers alike that the world of programming transmission is changing, forever.

For advertisers, bringing the Super Bowl online means viewers will have the immediate ability to interact with a message, including choosing what messages to view, interact with or avoid.  For the viewer, it means more control over the content and, equally important, a reminder that they do not need a cable subscription to get content. Although the Super Bowl will continue to be broadcast, cable companies should be very concerned about a program with this much impact being broadcast over a different venue than their own.

For local cable providers as well as local major network affiliates, the time allotted to local advertising ceases to exist when the Super Bowl is streamed. Though they are not getting the obscene money the national broadcasters are getting, they were getting a sizable amount of revenue for their local ads. It does not seem so far fetched to think that one day the NFL may just decide to stream the Super Bowl ONLY and profit from the entire program, including the ad revenue that is now being collected by the network. Clearly, it sees the possibility.

The writing on the wall has been there for a couple of years. The Internet allows viewers to control the content when and where to see it, and eliminate the carrier. Rather, they are going directly to the content producer and will be doing so more and more as all forms of media displays, TVs, phones, and computers are designed to do one thing: deliver content regardless of its source.  The old saying “content is king” is absolutely true in this age of the Internet and it is the content creators who stand the most to benefit from the demise of traditional media.




Grocery store loyalty programs go unnoticed until it's too late

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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?




US Postal Service – Confusing what you do with what you sell.

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The United States Postal Service lost $8 billion last year and warns that it will be insolvent in just a couple of years.  I guess “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds” assumes there will always be enough money to pay our postal carriers. Though the Post Office has no official motto, the preceding statement had become the marching orders and battle cry since at least 1912 when it was inscribed on the James A. Farley Post office in New York City. Though true to a point, the Post Office has and continues to fail to live up to the sprit of that statement.

First off, I do not think that the Post Office has done a poor job in delivering the mail. I simply do not use the Postal Service. I have no need. Bills get paid online and letters that I once wrote are now sent electronically complete with movies, pictures, and sounds. We at Stealing Share use the Postal Service to send out new business information from time to time, but I never think of using the Postal Service to send packages. Although it does send packages, it is not in my considered set.

And this is what leads me to the USPS confusing what it does with what it sells.

Going back to the unofficial motto, there is one segment of it that must be noticed: “…completion of their appointed rounds.” It does not say, “completion of their appointed door to door mail route.” It says “appointed rounds.” As a branding company, this is exactly the kind of single-minded proposition we work to get clients to adopt. It is focused and easy to understand.

More importantly, it gives the brand the ability to grow as it is purposive instead of prossesive. Taken as a whole, the statement says, ‘Nothing will stop our people from delivering your message, no matter what kind of message it is.”

For the history of the Post Office, this simply means “We’ll get you the mail.”

The simple truth is that the Post Office has confused delivering the mail with what it really sells – getting customers what they need no matter what. It is only now that it understands the mistake and I fear it may be too late. It is a common fallacy for business to be so literal about what it thinks it is selling that it misses the opportunities right under its nose. While there is merit in saying focused on what you do, tunnel vision can be the death knell of a business and, unfortunately, the USPS is now coming to that reality.