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.

Choosing a Branding Company

When choosing a branding company, start with what they have accomplished

Choosing a Branding Company affects your successBranding companies promise to completely understand what your brand means.

In the most basic sense, a branding company examines the logic and relationships between the services and products you produce or offer, and help better define the connections between disparate offerings and promises.

We try to clarify the values inherent in everything your brand does.

This is an intellectual evaluation of everything you say about your brand and often it requires changes in your brand equities.

What are brand equities?

In a general sense, brand equities are the things your brand owns.

Some are visual representations that Brand Equitiesare immediately associated with your brand. For example, when someone sees the silhouette of a hat with mouse ears, they immediately recall the Disney brand.

These, like the NIKE Swoosh, are examples of a brand mark and are considered an equity— something the brand owns. Other visual cues can also be equities.

Pepto Bismol PinkFor example, a logo or a word mark is designed to be an equity.

A specific color palette may also be an equity (like the pink color of Pepto-Bismol or the blue of Chase Bank) as can a shape (like the unique shape of the Coca-Cola bottle) or packaging (like Air Wick).

The conventional wisdom amongst branding companies Chase features the color blueis to identify something important about the brand and give life to that importance.

This is why you see so many brands with a logo or brand mark that looks like what the brand does.

This is why we have so many brands that are named after the technology or product (think Duracell and Energizer).

The purpose of all of these created equities is to help the customer or prospect remember the brand by creating associations.

Human beings think visually and having something planted in their minds that is associated with a particular brand allows the brand to then place meaning and value in the minds of those they wish to influence.

When Choosing a branding company do they simply adhere to the traditional branding model?
The traditional branding model is about clarity but not importance

While some may do a better job with these tasks than others, most branding companies can point to examples of how they have created a brand by inventing these equities and identifying a distinct color palette.

All the brand consultancy needs is a few smart and strategically thinking minds and a design team that makes appealing images.

Why Stealing Share rejects this model

The commercial world today is different then it was just a few years ago. Almost every category is crowded with competitors, so brands find themselves surrounded by strong competition.

The customer has many choices and the field of battle is desperate to say the least. It is important to own something but that something needs to be important to the prospects you wish to attract and the customers that you wish to keep.

The Stealing Share Branding Model helps when choosing a branding company
The Stealing Share branding model includes the customer, research, brand anthropology and brand training

We ask more of your brand at Stealing Share than other branding companies. So should you.

The amount of importance your brand occupies is in direct relationship to what your target audience covets.

If you want your brand to grow and steal market share from your many competitors then the foundations of the brand equities are going to be found in the beliefs and needs of the people you need to influence— not in the things you make or your company itself.

Persuasive brands find a way to merge the brand value itself with a reflection of the company AND the customer’s highest emotional intensity.

This is not easy to accomplish. It requires all of the parts of standard branding companies (smart strategists and talented designers) but also requires in-house market research and brand anthropologists who study human behavior and find ways to influence it.

This rare element in branding science makes everything work together. The strategy, the research, the creative and the brand itself. Suddenly, nothing is the same and the game itself has changed.

So how do YOU choose a branding company?

Focus FroupStart by inviting us in for an hour of your time and we will change everything. Ask more of us because we brand for a purpose.

It’s in our name and our brand DNA. Is it in yours?

Our clients are aggressive, hungry and looking to grow. Clarity is what you want but purpose is what gets you there.

Blockbuster Marketing Mistakes

Blockbuster screwed up

Stealing Share President & CEO Tom Dougherty discusses the problems of Blockbuster to Reuters news agency.

New Jersey Attorney General Peter Harvey on Friday said he has filed a lawsuit accusing Blockbuster… FROM REUTERS

New Jersey Sues Blockbuster Over Ads

NEW YORK (Reuters) – New Jersey Attorney General Peter Harvey on Friday said he has filed a lawsuit accusing Blockbuster Inc. (BBLN: Quote, Profile, Research), the nation’s top movie renter, of deceiving customers with its new “No More Late Fees” rental policy. In a statement outlining his complaint, Harvey accused Blockbuster of failing to disclose key terms of the policy and said that some of its stores did not participate in the policy and continued to charge late fees.

Blockbuster marketing mistakes are legendary
Blockbuster: Missed Opportunity

“Blockbuster boldly announced its ‘No More Late Fees’ policy, but has not told customers about the big fees they are charged if they keep videos or games for more than a week after they are due,” said Harvey in the statement. “Blockbuster’s ads are fraudulent and deceptive,” he added. Blockbuster spokeswoman Karen Raskopf said the company was surprised that Harvey’s office “never directly contacted us about this” before filing the suit. She said Blockbuster stood by its new policy and has done everything to explain to customers how it works. “We are disappointed he took this action because we believe the end of late fees program is a terrific program and we’ve received tremendous feedback from our customers and employees,” Raskopf said.

Blockbuster — currently locked in a bitter takeover battle for No. 2 U.S. movie renter Hollywood Entertainment Corp. (HLYW.O: Quote, Profile, Research) — unveiled its “No More Late Fees” policy in December in an attempt to jump-start its business as competition escalates. Blockbuster at the time had said that under the new plan customers would have a one-week grace period after a rental due date. If a movie or game were not returned during that week, the customer would be charged for the purchase of the item. If the item was then returned within 30 days, the customer would be able to receive an account credit, but be charged a restocking fee of $1.25. Harvey said the state is seeking restitution for Blockbuster customers whose overdue rentals were converted to sales, were charged restocking fees and/or charged late fees by a non-participating store.

The state also seeks civil penalties of up to $10,000 for each violation of the Consumer Fraud Act. Tom Dougherty, managing director and senior strategist at brand development firm Stealing Share, Inc., said the new rental policy and fallout from it could tarnish Blockbuster’s brand in the eyes of its customers. “If I were a brand, I wouldn’t want to be known as slick,” said Dougherty. Blockbuster, he said, may have to reverse course and do away with any fees or charges tied to the new rental program, regardless of whatever name the movie renter assigned to them. “Consumers would want to go elsewhere because no one wants to feel like they are a sucker,” he said. “Blockbuster now looks like a greedy business. And, it looks like a business that assumes that their customers are stupid and naive,” he added.

Read more about Blockbusters Mistakes Here

Blockbuster has been facing increasing competition from discount retailer Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research). and online companies like Netflix Inc. (NFLX.O: Quote, Profile, Research). Blockbuster in October had cut its fee for online DVD rentals, in response to a similar move by Netflix. Its shares were up 6 cents at $9.14 in midday trade on the New York Stock Exchange.

Brand Meaning…Who Cares. You need to care deeply.

How Important is Brand Meaning

By Tom Dougherty

Have you ever played that game, “Telephone?” You know that game where you sit in a circle and the first person whispers something to the second, the second to third and so on until it is back around to the first person again. It starts out simple enough, whispering, “The dog wears red pajamas,” that eventually comes around as, “I jog and eat bananas.”

The funny thing is that so many companies today rely on this sort of idea to get their message and meaning out to the masses. Viral marketing, guerrilla tactics, meaningless advertising, and social networks have become the flavor of the day in an attempt to persuade and connect.

Don’t Make it Up

Failure happens when brand meaning is defined as a category benefit
Brand meaning is the key to importance

As if that isn’t bad enough, the worst part is that this all begins internally – that first person in the telephone game, so to speak. If you have ever been that first person in the game, there is a period of time where you actually have to think of something to whisper into the next person’s ear. Do you think about something witty or something that can easily be remembered? Or do you take the tactic of trying to throw people off and think of something difficult to remember or hard to say? Really, you never know what you are going to say until it is your turn, and only then do you make it up.

This is exactly what is happening with a great many companies today. Employees are being tasked in their daily roles, duties, and responsibilities of “making something up.” They do it as they talk to customers, they do it as they talk to each other, and they do it as they create external communications. They are all making something up to whisper to the person next to them. They make it up because they have not been told what to say.

It is remarkable how many companies, even hugely successful ones, have not defined who they are in a way that employees can understand and convey. Like the game of “telephone,” many organizations tend to leave it up to the employee to make something up when it is their turn to tell someone about the company.

Talk is Cheap

Sure, most employees can talk about the company. They will often tell you that they have the best or easiest or most convenient or, even worse, some generic description of the category.
However, most of the stuff they would say could also be said by any number of their competitors. It is our experience that many employees will quickly admit, without probing, that there is not a lot of difference between what they do and what their competitors do. Most employees talk about what the company DOES not what it MEANS. And generally, there is little to no consistency from one person to the next.

Meaning is not some marketing-speak. Sure, it helps in marketing but its value runs a lot deeper than that. Creating and, more importantly, maintaining meaning should be central in everything each and every employee says and does.

One Voice

It does not matter if you have a company of 50 or 5,000. Imagine if every person in the organization all said the same thing – instead of 5,000 meanings, your customers, current and potential, get one.

Brand meaning is a funny thing. We as humans strive for it. We look for it in everything we do, see, read, and hear. When meaning is not clear, we tend to make it up. So, in essence, consumers become the final person in that telephone game. There is no one standing in the middle of the circle with a sign that says, “The dog wears red pajamas.”

Manage Brand Meaning and Creating a Brand Culture

brand meaning is an art form
A harmony between emotional and rational needs

The worst thing a company can do is allow its employees to make meaning up. Consciously, an organization may not actually choose to allow this but, by not explicitly providing meaning, that is exactly what they are doing – allowing their employees to make it up.

This is where brand comes in. Brand is a device used to build meaning. No, it is not a simply a name or logo or clever ad tag line. Those are, in fact, executions of brand but are not THE BRAND.

Brand is about those a company wishes to influence. It is an aspirational goal or value that target audiences share. It goes beyond simple product benefits or attributes and is a way to emotionally connect with customers and prospects. It should represent a highly emotionally intense position that is not claimed by a competitor and that should be defended vigorously. This emotional connection can only start with those responsible for building it – the employees. They are the brand culture.

The first step in implementing a brand is starting internally. Brand should be a rallying cry for everything a company does – externally or internally. It must be the fabric that binds all aspects of an organization together from HR to R&D to customer service. Employees should be able to say what the brand is about and how it specifically affects what they do.

Therefore, instead of 5,000 meanings there is one: a single cohesive and compelling reason why what you do or make is different and better than your competitors – the sign in the middle of the circle that says, “The dog wears red pajamas.”

(Read about elements of the brand process here)

Remove Your Marketing Risk

Marketing Risk When You Steal Share

By Tom Dougherty

Marketing RiskWhat do you know? What don’t you know? What is knowable? Until you fully understand the issues facing your brand, you cannot solve your marketing problem. Your ultimate success is therefore much more dependent upon the questions you ask then the answers you find. The price of success is the risk of unsettling the boat — rocking the very foundation upon which your business currently floats. Committing your brand to grow its market share is a courageous effort. It is not the bailiwick of the feint of heart because it requires an intent to challenge everything — even slaying all the sacred cows.

Art and Science

Increasing your market share requires both a mixture of art and science (right and left brain thinking). The cognitive side of the process needs to lead the emotional side. The process will enable you to manage the risk of change. You would be surprised how many of your competitors inside-out when assessing opportunities and issues.

This fact is your biggest opportunity if you have the courage to look long and hard at your own business model and marketing strategy. Rest assured that most of your competitive set lacks the fortitude for such assessment — except, of course, the new market leader who rises to everyone’s surprise. Upsetting the apple cart is the recipe for success. Keeping to the old model is the recipe that the market leader hopes you salute in dead earnest.

A Concrete Example

Let’s look at this in a more concrete way. An old and well-accepted adage is if you are in second place in a category you will only help the market leader when your marketing is designed to grow or build the category. We agree with this, but not for the reasons you might think and our reasoning explains why it is so hard to kick the king of the hill off his throne by conventional and traditional means.

For the most part, category competitors, despite all protestations to the opposite, try to differentiate themselves and grow market share by touting category benefits. They, in effect, continue to support the supremacy of the market leader through their current marketing and advertising. Banks expect prospects to switch and customers to choose based on having multiple ATMs, online banking, friendly employees, competitive rates, and convenient locations — the very foundation upon which Bank of America has built its franchise.

Budweiser Too

Beers try to unseat Budweiser by out “budding” the King of Beers. They all claim great taste, choice ingredients and brewing prowess. Once again, the foundation of the Budweiser brand franchise. (Read our market study on the beer category here)

Marketing Risk
Creativity is not enough

Let’s look at these marketing challenges dispassionately. First, if you are a bank, take all the table stakes (the category descriptors that define your business) off the table. For the sake of this experiment, assume that all benefits are well understood by the category as equal. After all, no one remains with a bank if the employees are not pleasant, the ATMs convenient and the rates and fees are competitive. What is left? Something is left because the market claims to have preferences and, by simple deduction, we can eliminate 99% of the banking claims as not the culprit.

Will a beer drinker change brands because you claim to have won more awards, taste better or use better ingredients? Logic would say yes, provided the competitor’s customer does not like the taste of the beer they currently drink or dislike the quality of their current beer’s ingredients.

In blind taste tests, few beer drinkers can identify their own brand and seldom can they tell one American lager from another. Often, their taste choice is not their preferred brand yet beer brands continue to battle over category benefits like taste. So, if you eliminate the table stakes, what is left? We never said the answers were easy to find, we only promise that the answers can be found once you discount the obvious.

The Road Untaken

Marketing RiskThe easy road is not the best choice and finding the switching triggers to human behavior is a taxing endeavor. It is easier to assume that the obvious choice is the best choice, that the well-worn trails are the finest paths but this quite simply ignores our experience. The less traveled road is often the best choice when planning to grow market share because it is important to be both different and better then the competing messages.

Once you have asked the right questions, you need to start seeking the right answers. Let the market guide you, not your own tightly held beliefs. Research is a must but most of the research we see is not worth the paper upon which it is written. Open-ended questions might be great science but it is bad marketing. Ask beer drinkers why they choose the beer they drink with an open-ended question and they will respond, “I like the taste.”

Too bad that it is not why they choose. Finding the real triggers requires hard work and right brain creativity. It is the art in the science and the proof in the pudding. (Read about the Stealing Share process here)