Cree LED lightbulbs have lost brand power

Cree LED lightbulbs. An Example of surrendering initiative.

Cree LED Lightbulbs
Cree was a growth stock

For Stealing Share, Cree LED lightbulbs is in our backyard. I follow the company because it is great to see a local company innovate and win.

I remember a few short years ago, Cree was the darling of Wall Street. Charles Swoboda, Cree CEO and President, seemed to be interviewed and featured everywhere.

2012 was a heady time for Cree. In 2013, Cree LED lightbulbs were King of the Hill.

Innovating its way to the top of the class and the news promoting LED bulbs as an eco-friendly and promising technology turned the incandescent bulb market on its head.

Cree LED LighbulbsLED bulbs have low heat, low comparative wattage, long life and more energy efficiency than the florescent bulbs that heretofore dominated the eco section of the market.

Cost and quality of light were the only downsides to LED bulbs. Often as not, they had a white-blue brightness that lacked the warmth of the incandescent bulbs that take history all the way back to Edison.

LED lightbulbs have become mainstream

Cree LED Lightbulbs The holiday lighting market transitioned from incandescent mini bulbs to the eerie, almost alien looking, LED strings of holiday lights just a few Christmas seasons ago.

They caught on despite the cost because of a longer lifetime and the ability to connect so many strings together that Clark Griswold would have lit the entire city without an electrical drain.

The transition to LED Christmas lights is almost complete. It is hard to find the old style mini lights today. The price is still steep, but it is more manageable.

You would think this is all good news for Cree LED lightbulbs. First movers have an advantage and the market now embraces LED lighting.

Just look at the displays at the big box do-it-yourself stores. The LED bulbs are featured more than the rest.

Cree LED lightbulbs have a retailer problem

One huge problem stands in the way of Cree however. Its bulbs are NOT featured at retailers. They are lost among the crowded competitive LED offerings.

What happened?

Cree LED Lightbulbs stock chart
Cree has been in rapid decline since 2014

I quote Mr. Wonderful from Shark Tank as if he was speaking to the engineers who pushed the envelope for Cree LED lightbulbs. “What’s to stop one of the big guys from waking up and crushing you like the cockroach you are?”

It is a fair question to ask in 2013. Today, with the current marketing, you can ask if it is too late?

The Cree advertising is top shelf. Well-produced spots featuring Lance Redick (you might remember Lance as the very deliberate Lieutenant Cedric Daniels from the HBO series The Wire). The problem is that the advertising campaign is fixing the wrong problem.

Watch the above advertisement and ask yourself what the advertising is intending to accomplish? The commercial obviously intends to laud the category transition Cree led. It informs the customer that the Cree LED lightbulbs were on the forefront of this movement.

They want us to know— borrowing from the copy, that the humble LED turns the lighting category on its head and that they (Cree) – told us so a while ago.

Nice clean TV spot. It might even work if being first in the category mattered a jot to the shopper today.

Cree LED lightbulbs need a new rebrand strategy

Stealing Share would not have created this strategy. It is an inside-out view of the market. Looking outside-in is the foundation of most of our business. Companies look at their own stories, decide what they feel is important about their own brands and then force fit that idea into the marketing and advertising.

Cree LED Lightbulbs
Where should Cree position the brand in this crowded space?

It is too late for Cree LED lightbulbs to regain preference? Is it too late for Cree to be doing this? The market is mature. Innovation in LED brightness, longevity or eco-friendly claims do not drive the market. PRICE drives it. Cree needs to rebrand (read a an example of a rebranding strategy for another troubled category here).

The current campaign only helps build the category. It sells the viability of LED lightbulbs. Anyone who has studied advertising communications knows that, in communications that builds the category, the advantage ALWAYS goes to the market leader. Sadly, for Cree, it is not the market leader. Not anymore.

The retail space is full of competitors to Cree LED lightbulbs

Look below at the offerings in LED bulbs from Home Depot and Lowes.  Cree LED lightbulbs is an afterthought. Giants in the industry like GE, Sylvania, and Phillips dominate the shelves. These behemoths not only control the shelf space, they also control the price point.

Cree LED Lightbulbs
Cree is lost in the big box stores

As a consumer decides to choose an LED bulb as a viable replacement item, does Cree believe the customer will have second thoughts about trusting any of the BIG BOY brands? Is there any chance that these name brands are seen as an inferior product? Do consumers care who brought the first viable LED bulb to the market?

Cree LED LightbulbsThe entire Cree LED lightbulbs advertising campaign has only one hope. You must feel so guilty about your preference that you want to switch to Cree.

The campaign asks you to reward the brand that first brought you the LED idea.

Even if the retailer has a smaller selection of Cree products and they might be a few pennies more expensive. Even though the original idea was expensive and the light was blueish.

Any brand named Edison would be an instant winner if that train of thought was correct. There is heritage for you. I’m not claiming to be the smartest guy in the room (research corrects that failing). I don’t know yet what the highest emotional intensity in the category is. I am not sure what incites a shopper to change and prefer the Cree LED lightbulbs.

But I know that the answer is knowable. The entire Stealing Share process aims to discover that trigger and position the brand to own that value. It is HOW you steal market share.

Real lessons here for us all

The lesson here is to not let your engineers dictate marketing and brand strategy. Don’t drink your own Kool-Aid. Don’t take an inside-out view of the market (navel gazing) and never leave the strategic brand point of view to the advertising agency (no matter how talented).

Even if they are good at what they do (and I believe Baldwin& is very good) agencies create advertisements and they don’t create robust brand strategy.

Cree LED LighbulbsThis market is mature and yet is growing at a blazing pace

The sheer power of the competitive set and the gravitational pull of lower pricing outweighs first mover advantage.

An upstart and innovative company is not a place for this strategy. The Cree brand is now outmanned and outgunned.

Today, Cree LED lightbulbs need a message that overcomes those barriers.

Cree. Light a better way (is NOT the answer).

As a symbol of all that is wrong, the theme is clever in its double entendre and  FEELS like an advertising theme-line. As such, it lacks powerful meaning and authority.

Cleverness always seems contrived and cliché.

Powerful brand themes are often a bit awkward because they strike the prospect as important and direct. They are about the customer, not the product. They seem authentic, not clever.

Maybe one of the most powerful brand themes of all time is great advice for Cree. Think different.

Why we don’t switch to alternative energy

We like to think we live in a world of alternative energy. There’s solar power and many of us drive hybrid cars that use electricity to increase gas mileage. There’s even a Hillary Clinton ad airing in my area, North Carolina, which showcases her promise to increase the number of solar panels in our country.

But you wouldn’t know that we are moving to an alternative energy world Saturday night in the South. A pipeline near Birmingham, Alabama, broke, starting a gas shortage, thus creating empty pumps, long lines and high gas prices.

What year is this? 1979?

Alternative energy
Switching to alternative energy is not easy, even during a crisis.

Many gas stations have that dreaded plastic bag over the pump handles, while increasing gas prices. We’re not in panic mode by any means, but it is still startling.

Fully switching to alternative energy will take more than concern over the environment.

It got me thinking that switching to anything is such difficult work. Most of us, including myself, talk a good game when it comes to the environment and alternative energy, but I do little about it. Oh, I have an energy efficient air conditioner, but honestly I have it because it reduces my energy costs. Not because I’m doing something for the greater world.

Think about this. Remember when the metric system was supposed to take over our highways? We were going to join the rest of the world in adopting the system. It only seemed logical.

But that effort failed.

I bring this up not to berate anyone. But to point out that getting people to switch to anything is enormously arduous.

That is the biggest reason why I do berate brands that believe the same old approach will get consumers to switch brands, even though there is little differentiation among each market’s players.

Each car ad looks and sounds the same. Each beer ad is a copy of another. Car insurance, which spends untold amounts on advertising, offers little reason to switch.

To actually prompt a change in any market you have to be different and better, and often that means being so different that you actually offer a true choice. The definition of a switching trigger is switching to something you don’t have. Otherwise, you stay put.

I don’t think we’ll be switching to the metric system anytime soon. To fully adopt alternative energy we’ll need a stronger and more emotional reason than saving the environment. When a gas shortage directly affects us, then we consider switching.

Sometimes it’s in the crisis where the greatest leap forward takes place. But there are better ways to prompt a switch.

Brand Development in Energy and Utilities

By Tom Dougherty

Utility/Energy Market Study. Common Ground

Brand development in energy could use new blood
Energy and Utilities tell similar stories

Energy and utilities have more in common than just the delivery of energy sources. Certainly there is a difference in a brand that delivers gasoline to automobiles (like multi-nationals like ExxonMobil and TEXACO) and public utilities that provide power and energy (both natural gas and electricity) to geographic specific areas like ConEdison and Southwest Gas. But they have an important asset in common. Both sell and/or deliver commodities to their customers and both groups seek to gain greater importance in the mindset of their customers thus increasing preference and subsequently protect margins. (Read about Ferrellgas here)

How Do You Differentiate a Commodity?

There are many companies that traffic in the delivery of commodities that believe investment in brand is a waste of money. They believe that the only differentiator in such a market is price and that any investment that has a cost attached to it is counterproductive to their desire to simply deliver the lowest priced commodity product on the market.

Such companies rely on the protection of geographic barriers and legislation for their business model and do not understand the human behaviors that influences all purchase decisions. Brand value to your customers can be boiled down to simplicity. They seek simplicity in decision-making and use brand to help them make their purchase decisions easier. The promise of that brand should never be a description of category benefits (table stakes) and yet often it is conveyed as exactly that.

Utilities

 

Brand development in energy seem to all group into one marketing sector
How can a Utility Differentiate?

How many public utility companies define their brand in terms of reliability? Can anyone possibly be a public utility and not be reliable? Which of your competitors claims to be unreliable? No, effective brand expression in this market space needs to be a reflection of the core beliefs and values of the customer you wish to influence. Being “GREEN” or environmentally friendly is a start at this identification, but it will not be long before such claims are themselves table stakes. (Read about analyzing a market here)

Gasoline Companies

 

Gasoline companies are in the energy sector too
All the Gasoline manufacturers claim the same ground

What does a PETROL (gasoline) brand offer their customers in terms of brand promise? BP has invested heavily in its “environmental” stance but has missed the opportunity to drive that message home in the expressions of that brand. Ask a purchaser of BP petrol what the BP brand means and environmentally friendly is way down the list.

 

Mobil, before its merger with EXXON, claimed its brand helped keep engines running cleaner. In other words, Mobil defined its brand by a product efficacy — not a brand equity. A simple turn in that idea would have presented the brand in a different light. Rather than a brand that keeps your engine running cleaner Mobil should have claimed to be a brand for consumers who value prevention over cure. Today, petrol (gasoline) brands are defined by location, location — LOCATION. Consumers are forced to choose based on convenience alone because there is no discernible difference in brand promise.

A Solution

 

 

Building a brand that fosters market share growth means looking at the market differently and defining your brand by the values of the target audience rather than descriptions of your own business delivery model. Who are your customers? Those that find themselves in the fabric of your brand equity. (Read about switching triggers here)

Ferrellgas Marketing and Branding Case Study

Ferrellgas Marketing and Branding Case Study

By Tom Dougherty

 

Blue Rhino is part of Ferrellgas marketing
Ferrellgas Owns Blue Rhino

Ferrellgas is a Fortune 1,000 company that provides propane to more than 1,000,000 customers nationwide. To many rural customers, Ferrellgas is a public utility. Its business is indicative of public utlity trends. Starting as a family owned business in 1936, Ferrellgas is now one of the largest propane suppliers in the United States. Recognized as industry leaders in operations, their technological advances place Ferrellgas in position for strong, sustained growth.

Ferrellgas marketingFerrellgas operates in a market with very low startup costs and a bevy of competitors from every level. This competitive landscape is what separates Ferrellgas from a public utility.

They came to Stealing Share because they were still hungry to grow and increase their business despite being a market leading company. Our task was to understand the market, uncover switching behaviors, and find brand strategies to exploit those findings.

 The behavioral brand model uncovered hidden and important beliefs in public utility trends that needed to be tested. While behavioral modeling typically uncovers nuances in consumer behavior, this model uncovered a series of beliefs that, when validated with the field research, gave Ferrellgas a distinctive and powerful position relative to all of its competition.

 

Visit Ferrellgas by clicking here

 

 

Petroleum retailers can create preference, but don’t know how

Many have thought one of the most difficult industries in which to successfully brand a company is in retail petroleum. Anymore, those retailers are called convenience stores but we know most of them by the petroleum producers, such as BP, Chevron, ExxonMobil and the like.

The difficulty lies in consumers picking gas stations based on price, location and convenience.

Well, at least that’s the excuse.

It’s the same excuse used by fast food restaurants, yet consumers will seek out the brands most important to them. Even in the petroleum industry, Sheetz has done a fine job in creating preference, even if its MTO (“made to order”) feature is a bit misguided.

So it was intriguing for me to see that Phillips 66 was beginning an initiative emphasizing the role of branded marketing.

brands_66stationBut it’s not brand the company is talking about. It’s about loyalty programs, such as a discount card and an app, as well as additional revenue streams by airing advertising on its TVs inside its stores.

Most petroleum retailers have loyalty cards and, while they should be offered, they do not create preference by themselves.

Maybe the problem isn’t that branding petroleum retailers is difficult. Maybe the problem is that the retailers themselves don’t know how to create preference for its brand beyond cost, location and convenience.