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.

Macy’s declines in importance. Tip of the iceberg.

MACY’s declinesMacy’s declines in market share and revenue because department stores are holding onto a model of the market that no longer meets the needs of shoppers. Competition is everywhere and shoppers have more choices than ever. All too often, these choices seem better than the traditional department store model.(Read a market study of the retail market here)

Many of the brands that stores like Macy’s rely on for magnetism (attracting shoppers into the store) have recognized that the worm has turned and are pulling their brands form the retailers. Like Coach, for example. Even Michael Kors has decided not to play the game anymore and has asked retailers to stop couponing and discounting their products.

Macy’s declines can be predicted by looking at the world of magazines

MACY’s declinesI think you can see a corollary to Macy’s declines in the periodical market back in the late 60s. All businesses naturally seek economies and the broad-based and horizontal magazines like Look and Life found it increasingly difficult to attract advertising dollars. Advertisers learned that it was more effective to spend their dollars in vertical publications that mined the exact consumer they hoped to influence.

The magazine world learned a lesson in focus and these once heralded magazines folded up and went away. Meanwhile, there was a rise in vertical publication advertising because, if you wanted to sell bird seed, it was smarter to buy a small add in Bird Lover magazine then spend for greater subscription numbers in Life magazine.

Today’s world is about focus.

It was all about focus. It still is.

Today’s shopper is accustomed to laser-like focus. Some retailers even specialize in clothing of a particular color or style. Others specialize in a demographic segment or price point. At the end of the day, shoppers are placing a premium on their time. Wondering through a department store to locate only what you are looking for seems like a fool’s errand.

MACY’s declinesTimes are different and the desire for greater focus will remain for quite some time… until a broad nostalgia for the experience of bygone times surfaces. Macy’s declines and Belks’ failures can’t wait that long. My suggestion is to split off the departments as separate brands and run them independently. It’s how you retain value for your shareholders but asks for great pain from the traditional department stores in the transition.

Those retailers won’t do it. They will stick their heads in the sand and maybe invite a new branding initiative. (Like Belks did. It got a new logo with no new meaning and no new customers from the effort.) That initiative will be confusing and without new and improved brand meaning.

Extra Crispy Sunscreen does what for KFC?

A few days ago, KFC announced that it would sell a brief run of Extra Crispy Sunscreen that works like regular sunscreen with the added benefit of smelling like extra crispy fried chicken.

Extra Crispy Sunscreen
Is Extra Crispy Sunscreen mean Yum Brands and KFC have lost their minds?

At first, this just seems like a mindless marketing tactic to build on the current campaign starring George Hamilton. I knew it was a thinly veiled attempt to generate social media activity and get some play in publications. I passed it off as sophomoric and lacking any real ability to gain any sort of preference.

Until I read the press release.

It reads like most other releases on promotional gimmicks, carefully weaving in the details of the gimmick with how it is supposed to relate to the brand. However, as I read the last paragraph, I was dumbfounded. It is a quote from Kevin Hochman, chief marketing officer of KFC US. It reads:

“While I’d love to tell you our customers have been asking for this, they haven’t,” Hochman added. “In fact, I’m pretty confident nobody ever asked for this. It’s just some crazy idea we dreamed up.”

Extra Crispy Sunscreen doesn’t help the brand.

I have been a very outspoken critic of how Yum brands have lacked much considered thought in its brands. I’ve been hard on the company because it’s my job to find issues with brands and develop a strategy to fix them.

But now it appears I haven’t been too hard on them at all. Yum and KFC have no idea where they are going from a strategic direction as evidenced by the statement, “…It’s just some crazy idea we dreamed up.”

Make no mistake, out of the box thinking is how I operate, but that thinking has to be tied to an overarching strategy. KFC’s foray into skin protection has no strategy – and the quote proves they know it.

There is nothing about Extra Crispy Sunscreen that ties people to the brand meaning of KFC. Sure it may tie them to the nostalgia of the brand, it does not make consumers more loyal or apt to try KFC for a meal. It generated some buzz, but it’s buzz about the sunscreen, not KFC’s brand.

If I were an investor, I would be worried about what was going on in that C-suite. In quick service, activity without accomplishment is costly, especially for brands that are already struggling.

The fallacy of today’s marketing messages

balance

Today’s marketing messages take on many forms – better, safer, longer lasting, friendlier or cheaper. Or it can take on the form of more as in more value or the most legroom in economy class or even as best as in the best in class customer service.

It is remarkable at just how many brands still rely on these kinds of marketing messages that are simply not believable to sell their wares.

Most people today have a bank account that you access online. To hear banks say it, they have better online banking or the best mobile app. All of them claim some form of best but how does a consumer know that’s true? It’s difficult to compare one versus the other because banks typically don’t allow you to use their services until you are an account holder. So given that, coupled with the fact that all banks claim to have better online services, are any of the statements true? How do prospective consumers know, particularly if they are happy with their current online banking? (The definition of a switching trigger is switching for something you don’t already have.)

For the most part, online banking is now just part of banking – everyone has it and everyone does it pretty well. Pretty well is used here rather than great because, in banking, pretty well is enough as the hassle to switch banks is so high. And research clearly shows that a customer has to be basically beyond their wit’s end end to even consider switching.

This is the problem with most of marketing messages, not just with banks, but with the vast majority of brands. When brands claim to be better, the most, the best or whatever, the only time that can possibly be meaningful to a prospect is at the exact point of failure of the current brand. If these statements were so powerful than the best, measured by science, would always win and logic would dictate that there would be only one or two brands per category.

But we all know that is not the case.

As consumers decide which products and services to buy, they use any number of criteria to make their decision. Cost vs value figured into it, but even that is different for each individual. Marketers claim that they can measure this, but in truth this mix is as fluid as the ocean, ebbing and flowing with the tide. Much like today’s marketing messages, these marketers are simply measuring something that isn’t really there.

This is the rub of all of this, truth. Saying better, best and the like can actually be measured and, if truth actually mattered, it could be proven.

Something more powerful than truth in marketing messages

Marketing Messages TodayBut there is something much more powerful than truth – belief. You see, beliefs do not have to be true to be powerful. They just have to be believed. Every war that has ever been waged in the world was based on a belief – religious, economic, social, you name it. Belief is something that people are willing to die and kill for. That’s how powerful belief is.

But most marketers forget, overlook or simply ignore the power of belief. They stop short and only look to satisfy simple wants and needs that are constantly in flux. While belief isn’t completely unwavering, it is much more cemented into the fabric of what make individuals individuals. At their core, beliefs guide us in almost every decision we make.

There are many different kinds of beliefs beyond those above that have been used as an excuse to wage war. Clearly that is the most extreme of examples. But there are beliefs that power our actions. Do you believe that time is your most valuable resource? Or do you believe that if you are not keeping up you are falling behind? Those are the kinds of beliefs that marketers must align their brand with.

If you believe that time is your most valuable resource, think about the decisions you make in your life and how they are a reflection of this belief. Are you constantly on the lookout for ways to save time or do things faster? Do you use products or services that help you achieve that? The answer is certainly yes.

The trick here is in identifying which belief or beliefs apply to your target audience, made up of your customers and, more importantly, those that do not currently use you. Then, you articulate that belief into a single emotionally intensive statement. This can never be about the brand itself. It is about those the brand wishes to influence.

Aligning your brand with a belief gives your brand gravitas and tells consumers who it is for and who it is not for, giving consumers a reason and true choice and why they should care about it in the first place. It makes being better even less important because the brand becomes about them. Consumers choose brands that they believe are a reflection of who they are, not brands who say best, friendly, cheap and the rest of the non-effective marketing messages.

 

Pharmaceutical Marketing Strategy

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.

Pharmaceutical marketing strategyThe 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?

Generics

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.

Pharmaceutical marketing strategyPharmaceuticals 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.

Pharmaceutical marketing strategy
This imagery is typical for pharmaceutical marketing

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.

Creating preference

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.

That’s because creating actual preference is difficult work. Launching quantitative research that asks the emotional questions that drive behavior is not easy. The usual attitude & usage studies the industry has traditionally relied on don’t do the entire job.

Pharmaceutical marketing strategyCreating 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.