Yet another iconic brand is changing its name. Smith & Wesson Holding Corporation, the parent company of the like-named gun manufacturer, is asking its shareholders to approve a name change to American Outdoor Brands Corporation. The company’s management believes that the name better reflects the corporate strategy of diversifying into other outdoor products. It intends to keep the Smith & Wesson name for its handguns.
It makes sense for the company to change its name as it diversifies. The iconic Smith & Wesson name is associated with a single product, handguns, which in some circles have a very negative connotation. Not all campers are handgun enthusiasts, for example, so it makes sense from that perspective.
However, the choice of American Outdoor Brands Corporation befuddles me.
Companies do not get the chance very often to change their names because it is a shout to audiences that something has changed and will stay that way.
American Outdoor Brands just names a category.
Name changes are expensive, cause a moderate degree of internal confusion and take time and money to convey to the target audiences. They should never be created haphazardly or without purpose.
This name change does not feel well thought out, even if it has a purpose (giving the company permission to offer other products). American Outdoor Brands Corporation lacks any gravitas, feels cheap and is completely void of any emotional intensity. It sounds like a private label company selling cheap camp chairs or rubber footballs. It certainly does not sound like a name of a parent company with a rich heritage brand like Smith & Wesson.
Any brand that the new company could create or acquire could never have the equity that Smith & Wesson has. This is not to say that changing the name is a bad idea. As I said, it makes sense to change the name but the new name should begin to create equity on its own. But it should have meaning. That’s where the opportunity lies.
A casual description of a category does not constitute as meaning. A name change is worthless if it’s easily dismissed or lacks meaning.
Nothing is set in stone yet for Smith & Wesson, so it still has time to reconsider. The success of its diversification may depend on it.
Introducing American Outdoor Brands? was last modified: November 10th, 2016 by Tom Dougherty
The bad news for grocery chains is that they have become a cauldron of consolidation. The past few years have seen major grocery chains buying smaller competitors to forestall the Walmart takeover of the industry.
Kroger’s buys Harris Teeter and Roundy’s. Albertson’s buys Safeway and Haggen. ACME Markets, a subsidiary of Albertson’s, buys a bankrupt A&P. On and on.
The consolidations hints at several trends for the grocery industry, even if the largest grocery chains (such as Kroger, Publix and Albertson’s) are seeing this as way to fight the retail behemoths of Walmart, Target, Costco and others. By increasing distribution, those chains are hoping to out-large those big boxes so they can overtake market leadership.
For the smaller and regional groceries, the consolidation spells doom. Soon, they will either be put out of business or forced to accept an offer from the large chains.
For all those groceries, this is not a good trend. Walmart isn’t going anywhere. It is already the market leader and some reports say more than half of its earnings come from grocery. It has even been able to win with its private label brand, Great Value, leading the way. If anything, Walmart will increase its emphasis on grocery.
So what are grocers to do?
Leveraging the trends
Before we answer that question, let’s take a step back. There are two trends flowing through the industry that are diametrically opposed to each other, if you think about it. On one hand, groceries have often captured market share through sales, low prices and couponing. The weekly newspaper circular still exists today even though newspapers themselves are not as relevant as they once were. (That’s why apps are becoming the couponing system of choice today.)
The problem is that, now that Walmart has entered the fray, that tactic is not as effective. Walmart’s brand, encapsulated in its theme of “Save Money. Live Better,” is so embedded in the minds of consumers that consumers who shop on price shop there.
Walmart beat grocers at the price game because low prices were never part of their brands. They were only marketing messages while Walmart means low prices.
In our corner of the world in North Carolina, a once-thriving Food Lion was doomed the instant the nearby Walmart added a grocery. It closed months later and has sat empty ever since.
Then there are the shifting eating trends. Consumers want healthier options, which have led most groceries to increase their organic offerings. Whole Foods is the organic food leader, but it will never be the market leader because organic foods are expensive. It remains only part of the equation.
So how do you approach the changing food environment (with its higher prices) with a large segment of shoppers buying based on price?
Grocery chains scouting themselves
Grocery shoppers have preferences but a majority of them will buy groceries from more than one place. You can buy the basics at Walmart (where price supersedes quality), a prime choice of meat at Fresh Market and have the occasional trip to Harris Teeter or Kroger on the way home.
What grocers have struggled with is finding their positions in the market. Kroger has used a theme of “Fresh Food, Low Prices.” How is that different than Walmart? When consumers are faced with all things being equal, they will choose the market leader. (Therefore, Kroger’s theme only works if there’s not a Walmart nearby.)
Couple the Walmart copycatting with other unemotional messages, and preference ends up depending on location. Hence, the number of mergers and acquisitions.
The messages have become throwaways
Even more, those messages are just used as just that. Messages. They are not firmly affixed to the brand the way Walmart has affixed its theme to the brand. When that happens, even if the message is differentiating (and most are not), they are not believed because they just sound like marketing.
Albertson’s has used “You’re in for something fresh,” which sounds like it was written by an ad agency and does nothing to distinguish the chain from the competition.
To compete with Walmart, those chains and others must be truly different and better. Copying Walmart’s ownership of low prices is simply a loser’s game. Trying to build your brand (or advertising campaign) on fresh food just defines you as a grocery store.
Instead, grocery chains must define who their customers are when they use your brand. That’s how preference is created. If your brand is a true reflection of the target audience, then consumers will be incapable of choosing anyone else because it would be going against their own emotional natures.
Apple users Think Different. Nike users Just Do It. What do your customers do?
Brands should hold every business to a high standard of eliminating wasteful spending. For example, few industries are worse at spending money on foolish efforts than medical devices. Pick up any corporate brochure from a medical device manufacturer and here’s what you’ll see: Mountains and mountains of individual product brand names.
For some reason, companies are in love with giving every single product they manufacture its own unique brand name. That’s not product naming for any meaningful purpose. That’s reducing preference.
The medical device industry is a $150 billion industry in the US alone. Few industries would tolerate the sheer amount of money wasted in product naming. In fact, the value of a company lies not in its individual products, but in the company brand and its equities. When consumers buy products, they are purchasing the brand.
But medical device manufacturers have gone insane over spending countless dollars that actually hurt the value of the company. No matter if it is a stent, wire or an ICD, it will have some clever brand name that means little to anyone but the company’s own marketers. Doing so does nothing to help define the parent brand or the brands of other products.
Instead, the medical device parent brands are crowded into the same space. They all claim to be forward thinking, innovative and reliable. Yet millions of dollars and countless resources are spent marketing the individual products like they are their own entities. Even when they are using the same language.
That reduces the corporate brand into an afterthought.
Cleverness is the enemy
The overabundance of cleverness is certainly not unique to the medical device industry. Marketing executives, in general, are convinced that a name or theme will be remembered if it’s clever enough.
The opposite is exactly true, which means the money to market them is ill spent. If the name or theme is clever, then it is not believable because it feels like an advertising firm wrote it. It will sound like marketing.
Let’s use an example from the medical device industry. St. Jude Medical, through its acquisition of Thoratec, has a left ventricular assist device called HeartMate. Its meaning is clear. It assists the heart.
But it still sounds like marketing and made up. It has no emotional meaning. Considering the sheer litany of products with made-up names like HeartMate, it won’t be remembered because no one says “Nurse, give me the HeartMate.”
Think about this. These names do nothing to create preference or add to any financial or emotional investment in the company. Just because a device has a clever name does not mean that hospital administrators and doctors will prefer that product. So why do it?
Product naming as an inhibitor to switching
Stealing market share means you must convince your target audience that what you offer is something you do not already have. That’s the definition of a switching trigger.
Switching is often seen as difficult because it means adjusting to something new. It’s a change even if it is a minor one. That means you must reduce the hurdles to switching if you want to attract the customers of your competition.
With so many branded products that have no relation to each other, but operate individually from other products, doctors and hospital administrators are reluctant to switch to them.
The same holds true for any manufacturer. A litany of unique product names creates a hurdle to adoption because audiences are asked to learn something new. That is especially difficult when you consider the entire scope of products.
It is easier for audiences to switch is if they know they are buying the company brand name instead of the product. It is just simpler.
What to do?
The answer to that question should be obvious. Don’t overdo product naming when it comes to individual products. We live in a world in which simplicity and control rule, meaning it’s the customer who is in charge.
Medtronic, the giant in this industry that actually does better than most, makes thousands of medical devices. Nobody can remember the sheer litany of branded product names.
A list of its endoscopic suturing accessories lists these products:
Endo Stitch Single-Stitch
Endo Stitch Tripe-Stitch
V-Loc Wound Closure
Surgitie Ligating Loop
Surgiwip Suture Ligature
Endo Slide Single Use Knot Pusher
It would be better if the names were:
Medtronic Wound Closure
Medtronic Ligating Loop
Medtronic Suture Ligature
Medtronic Single Use Knot Pusher
Now the company is actually investing in the parent brand and not just talking about it. And the sheer amount of wasteful spending has been reduced while market share increases. You’ve asked customers to choose the parent brand. That’s all any brand manager could want.
The wasted dollars of product naming was last modified: September 8th, 2016 by Tom Dougherty
How we helped American Fidelity find the right brand promise.
American Fidelity is one of the leading providers of supplemental insurance and benefits, specializing in auto dealerships, education, municipalities and health care. Its core customers are employers who offer supplemental insurance to their employees in those segments.
As a business, it operates in divisions based on those specialites. At issue was that American Fidelity had no overarching brand promise that brought the divisions together, increase preference with existing customers and attract new prospects.
Finding meaning for American Fidelity.
To achieve that, the project entailed qualitative and quantitative research with employers, employees and associations – both current customers and those who use a competitor. Also, an analysis of the competition and a brand audit was conducted to see where the current brand stood in the market and what it could claim.
Our competitive analysis found that competitors, which range from regional carriers to giants such as Aflac, focus solely on price, coverage and, in the case of Aflac, quick results.
The research demonstrated that administrators and employees believed all supplemental benefit providers were basically the same.
For the employer, who has complete control in selecting a supplemental benefits provider, the research clearly showed that they viewed their individual organization’s needs as unique. To find the right coverage for their particular needs, they seek something different.
Wanting something different was also part of their belief system, which is the emotional driver of human behavior.
Using an existing strength of the company – its niche focus – the new brand promise of American Fidelity stated that it represents a different opinion from the status quo because it is a specialist that knows there are no pat answers.
As the company says now, “When it comes to making health decisions, many seek a different opinion from a specialist. When choosing supplemental benefits, it’s important to seek a different opinion too.”
To reflect that brand, a new logo was developed that demonstrated American Fidelity being different and more important than the rest of the pack.
From advertising to collateral systems, signage to stationery systems, Stealing Share created a comprehensive brand structure for American Fidelity. Included was a brand standards guide that demonstrated cues for logo uses along with messaging and brand personality guidance. Stealing Share also conducted brand training for its thousands of employees.
American Fidelity. A case study in branding insurance. was last modified: August 26th, 2016 by Tom Dougherty
Pharmaceutical marketing strategy focuses on the mundane
Pharmaceutical marketing is faced with two issues: Its players must report the potential side effects of their drugs when promoting their uses and a increasingly prominent part of the market is generics, with most patents running out after 20 years.
Those are only a handful of the issues facing Big Pharma today. But pharmaceutical marketing strategy industry-wide is exacerbating the problems.
The companies address those hurdles by running expected and non-differentiating advertising. They take on the generics by creating made up names that they believe will set them apart and give them a unique URL.
Let’s take these issues one by one. We’ll finish with what changes should be employed in pharmaceutical marketing strategy so its marketing becomes different and more effective.
The side effects question
We’ve all seen the ads. People are living a healthy and fulfilled life while they are walking, running, gardening, being with friends and family in them. Meanwhile, a voiceover explains some scary side effects: Nausea, paralysis, shortness of breath, even death.
Pharmaceutical marketing strategy aims for the patient to provide the pull through for doctors prescribing those drugs. But those regulated messages prevent much of that from happening.
The regulatory rule reads that you must state the side effects if you state the benefits. That causes a dilemma for pharmaceuticals because they can’t avoid it. Therefore, they plop that verbal footnote in the middle of the ad so they can tell the good stuff at the beginning and the end. They are praying viewers forget about the side effects.
However, they would be more effective if the ads projected more interesting visuals than just the living my life images.
Some try different things. In an ad for Toujeo, a diabetes drug, a woman walks through a white-paper world that reflects her journal and her feelings.
Animation is the go-to tactic for many pharmaceuticals, often to uneven effect. The Toujeo spot is more visually interesting than most (thus slightly overcoming the side effects problem) while others are just stupid.
Internet circles have been alive over Movantik ads with a woman walking around carrying a suitcase of poop. Of course, that suitcase is supposed to represent constipation. But it visualizes something else.
The unintended hilarity does not mask the verbal footnote of side effects. It actually increases the awareness of it. The voiceover says: “Movantik may cause an increase in stomach pain or abdominal pain, or diarrhea and vomiting.” The dialogue narrates the images of the female character walking through a park with her suitcase of waste and an opioid capsule.
Showcasing a boring lifestyle imagery only places more focus on the side effects because the imagery is so expected and dull.
Even though the recent spots for Entresto sport a nice effect of its cast singing, “Tomorrow,” the spot looks like everything else.
Interesting visuals do not completely pull companies over the hump. But can’t pharmaceuticals be more imaginative? And provide imagery that is more meaningful?
To tackle generics, pharmaceutical marketing strategy focuses on blockbuster products. Pharmaceuticals have a limited window to capture an audience before generics and other competitors take hold. So they go big.
So each spends around $5 billion (billion, not million) on advertising, focusing on the blockbuster drugs that will capture large amounts of attention. It’s not a bad strategy. But it’s akin to movie studios depending entirely on blockbusters rather than the middle ground where most movie classics are produced.
Pharmaceuticals are so dependent on the blockbuster nature of their drugs that they figure the drug alone will sell the ad. They believe they don’t have to change the same imagery and tone. It’s like they are all feel playing from the same playbook.
In fact, they may be. Like many other industries, pharmaceuticals hire ad agencies long experience in creating drug commercials. That is, they believe experience is the key to producing good pharmaceutical advertising, not groundbreaking strategy.
That kind of thinking leads to ruts, much like what the automobile industry has been experiencing for years. The ads themselves are not creating preference. In fact, unless you are paying close attention, it’s difficult to separate one pharmaceutical ad from another.
The incestuous nature of using the same ad agencies over and over again creates this situation. If an ad stands out, it’s usually because the people in it – generally, not actors – have a particular quality that makes them seem human rather than stock figures.
If pharmaceuticals are determined to create preference in light of the cheaper costs of generics, then they need to do better.
Pharmaceutical marketing strategy has simply gotten lazy. Companies hire the same agencies, trot out similar advertising and rarely create long-term preference either for the parent brands or the individual products.
Creating preference means looking past the status quo to create advertising that is truly different and better.
Parent brands also need to create their own preference because creating preference for each individual product is expensive. (Hence, the $5 billion advertising bill.)
It would be much more efficient if the parent brands of Pfizer, GlaxoSmithKline, Merck and others were the generators of preference. Doctors and patient could more easily navigate all the offerings.
If, for example, Pfizer’s brand was focused on being less harmful than any other, that brand promise would filter to its products. So, Eliquis, a drug to reduce the risk of stroke, would be known as a less harmful way to treat that risk. Eliquis by Pfizer would mean something and give direction to its advertising that goes beyond the boring clichés of today’s marketing. (Such as an old guy pretending to play guitar.)
Pharmaceutical marketing strategy must address the advertising rut as few, if any, are creating anything that works. To make their dollars count, those companies should be looking toward brand. It’s cheaper, more effective and is the directional power all of them need.
Pharmaceutical Marketing Strategy was last modified: August 11th, 2016 by Tom Dougherty
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