Galaxy Note 7 fire hazard disaster

Galaxy Note 7 fire hazardThe Samsung Galaxy Note 7 recall because of the Galaxy Note 7 fire hazard has me thinking. What if any long term effect could this Galaxy Note 7 fire hazard have on the BRAND of Samsung?

Sure an exploding or smoldering smart phone is not a product feature in even the most optimistic consumer’s mind. But could this product recall seriously and permanently damage this mega-brand consumer products company?

In a word. Maybe.

Brands have meaning to consumers and great brands have great emotional meaning to customers. They associate with that brand meaning and, because that association should be about the customer and not the product, it becomes personal.

Galaxy Note 7 fire hazardNike has a premier consumer product position, not because it makes the best athletic shoes, but because Nike means the wearer feels like a winner. It’s the Nike promise that you should just do it. Forget the distractions. Keep focused because YOU are a winner for choosing Nike (read about the NIKE brand here). That is the power of BRAND.

I am trying to think about Samsung. What does the brand MEAN? Does the Galaxy Note 7 fire hazard in any way damage that association? I think it does and here is why.

Samsung is the largest electronics company in South Korea. It makes quality products and has infiltrated almost every category of consumer electronics. But it has a very poorly defined brand promise.

Galaxy Note 7 fire hazardLacking that emotional connection, it has allowed the consumer to position it as a value brand. That means Samsung is lower priced than the competition but are generally well made and dependable.

It might not be fair to dis Samsung as lacking in innovation but I think the market does not view it as being an innovator in any way. It is a fast follower, often copying the market leader’s products with a slightly cheaper (value) positioning.

This model has allowed them to steal the thunder from many storied brands. Take Son (Read about the Sony brands here) for instance. Its Trinitron TV brand reinvented the category.

Sony even led the way in flat screen innovation. But Samsung copied those products and dared to make side by side comparisons of product features — all with a value twist. The result? Growth in market share.

Galaxy Note 7 fire hazard has reshaped the smart phone pecking order

Same is true with the smart phone. Everyone knows the category was invented by Apple. Even the courts backed up that statement. Samsung entered the category with a cheaper reproduction and an nearly all-open sourced operating system. Side-by-side comparisons with the iPhone showed similar capabilities at about 50% of the cost.

Galaxy Note 7 fire hazardBut the Galaxy Note 7 fire hazard has undone much of that value cache. The great enemy of value brands is an underlying and almost universal human belief that, at the end of the day, you ALWAYS get what you pay for.

Customers who invest their emotional soul to value brands sit around waiting for the shoe to drop and hoping it does not. Want proof? Ask Value Jet.(Read about the fire that burned up an airline here: ValueJet). A failure by a low cost provider can be fatal to the brand.

Galaxy Note 7 fire hazardI worry that all the problems and bad press over the Galaxy Note 7 fire hazard feels like the shoe has dropped. (You are reminded of it every time you fly on a US passenger airline because they warn you before boarding that, having a Samsung Galaxy Note 7 turned on or charging, is forbidden because of the recall.)

To survive, Samsung might have to double down on its value proposition and make the risk worth the reward by gutting its profit margins.

Or it could call us and we could help them create a REAL brand that incorporates brand repair with a new juggernaut of meaning. Samsung won’t call however. It thinks brand is a logo and name. But there is no need to change either. There is a need to change the meaning.

Remembering the great Steve Jobs

Today marks the fifth anniversary of Steve Jobs’ death. If you are like me, it is amazing that it has been that long. And yet it feels like a long winding and dark road since I last saw him live at an Apple event.

Steve Jobs
The late, great Steve Jobs

This date is a seminal moment in the modern world of technologies and innovation. Steve heralded in the development of most of the gadgets and appliances on which we all rely. My MacBook is my rock. Without Steve Jobs and his insistence on simplicity, the OSX operating system would be a pipe dream. Even Windows would not be what it is without the relentless pressure of this innovator.

Certainly his vision for a computer for the rest of us, at a time when they were only for nerds and programmers, has come to fruition.

My iPhone has become the staple of my connectivity. We are no longer dependent on the clumsy Blackberry or complicated Palm Pilot to manage our calendar, phone and email, thanks to Steve and the wizards at Apple. I no longer own an iPod because all of my music resides nicely on one device. I even migrated to Bluetooth headphones last year.

We use the products that Steve Jobs created every day.

I am writing this blog while sitting in the United Club at O’Hare Airport. I am writing it on an iPad Pro. Meanwhile, my granddaughter is home watching a Pixar movie and I will FaceTime her from my hotel tonight.

It is easy to lament Apple’s lack of innovations since Steve Jobs left us. It is, after all, an incredibly high bar. But I must tell you my new iPhone and new iPad are head and shoulders above the first generations. My new Mac is smaller, faster and the battery lasts longer.

So I want to publicly thank Steve Jobs on this moment of reflection for a lifetime achievement that makes me feel incredibly humble in its wake. It’s much like looking at The Beatles and realizing you would have been immensely pleased to have penned even one of their tunes.

I still love Apple. I even like Tim Cook, who has tamed the beast and transformed it into a formidable business model.

I want to cheer again for blinding innovation and I am hopeful at every Apple event that the notoriously secretive company of geniuses is about to transform my life. Again.

Losing strategies from AT&T, Target

You know a brand is failing when it gets desperate to find new customers and keep its current ones, often by reducing prices. It’s the last gasp of brands in markets where brand meaning is ineffective and often similar across the board.

That’s what has happened for both cell phone carriers and retailers. Two cases in point: AT&T and Target.

AT&T
AT&T is in defense mode…

AT&T is doing away with overage fees for data plans, instead reducing the speed of data customers receive if they go over their limit. AT&T is hoping customers will opt to buy bigger data plans or simply be satisfied that they are not getting unexpected fees.

AT&T is following in the footsteps of both Verizon and Sprint, who have similar processes. (Although Verizon actually charges for what it calls its Safety Mode.) This is a defense tactic. And once you are in defense mode, your brand message isn’t working.

Target isn’t doing any better, and maybe worse.

Then there is Target. CEO Brian Cornell told investors that it will double down on the second half of its brand promise: The Pay Less section of “Expect More, Pay Less.”

Target
…and so is Target.

Great. That means Target, which saw a dip in sales of 1.1% last quarter, will reduce prices (and, therefore, margins) to compete with Walmart, which already owns the “Save Money, Live Better” space in retail.

One thing retailers like Target have not learned is that, if you copy the market leader, customers will default to that market leader because market leadership becomes the only reason to choose.

You see that strategy all the time in many markets. Someone takes market leadership with a unique claim and everyone in the industry follows suit, thinking it’s a winning strategy for them as well.

But that’s not how it works. To steal market share, especially if you are not the market leader, you need to be different and better than the market leader. You have to present yourself as a true choice.

AT&T could hold onto its customers with a better brand message than “Mobilizing Your World” because that’s just a definition of its category. If it had something more meaningful, then reducing data speeds to eliminate overage fees wouldn’t need to happen. It would already have true preference.

Same with Target. Give customers a reason to prefer you, not just put your thumb in the hole of a collapsing dam.

Verizon’s purchase of Yahoo makes little sense

My first question upon hearing that Verizon is paying $4.8 billion to buy Yahoo was: Why would Verizon do that?

Yahoo has been a declining brand for some years. In the 90s, it was the search engine and counted millions among those who had an email address with the tech company. It won its battle with AOL and its future was bright.

Yahoo
The price may be cheap, but I don’t know what Verizon is getting from Yahoo.

But Yahoo never evolved after Google entered the market and took over so overwhelmingly that google is now a verb.

A better way to judge Yahoo’s downfall is to remember that Microsoft was willing to pay $45 billion for it just nine years ago. The $4.8 billion Verizon just ponied up is chicken feed in comparison.

The strategic purpose of buying Yahoo

Verizon’s overall strategy is to become a larger technology and media company rather than just a mobile carrier. It wants to count Google, Time Warner and Amazon as its competitors. Its recent purchases of AOL and the Huffington Post prove that. But it has an overall strategy that has yet to come to true fruition.

So why Yahoo? I suppose Verizon wants access to its one billion users. But AOL once boasted of those kinds of numbers. As we learned, those AOL customers were basically empty ones as they sported AOL email addresses they never used. Yahoo did buy Tumblr and brought in Katie Couric to be some sort of news anchor, for what it’s worth.

But it has been a brand without purpose. All that mishmash of what it had didn’t add up to a satisfying whole. It was a collection of disconnected parts.

Part of the reason why I wonder why Verizon would buy Yahoo is that, so far, Verizon’s collection also seems jumbled. What is Verizon going to become?

I suppose we should let this play out and see what Verizon will emerge as. But it worries me when companies grow through acquisition and not organically.

Verizon needs to come up with a brand promise that unites all its offerings. That was the problem Yahoo always had. No one could state what how its users were different than any other kind of user. It had no unifying brand.

If Verizon wants to make some sense of what it will become, then it needs to re-examine its brand. Because, right now, it doesn’t have one that will impact the market the way it should and buying companies like Yahoo don’t fix the problem.

Nintendo is finally making apps

When I was young, I enjoyed arcade classics like Donkey Kong and Pac-Man. Simple games that involved a joystick and a couple of buttons. These days, I am afraid I could never learn what the plethora of buttons do on a Playstation or X-Box controller. Ultimately, I would end up doing the button “mash” to accomplish much of anything. This is why a video game controller hasn’t touched my hand in decades.

Nintendo
This is where Nintendo needs to put its games.

It is also probably why the one gaming brand I am attracted to is Nintendo. Its systems have always felt like they were rooted in simplicity. Which is an attribute I admire. The brand houses some of the most recognizable gaming characters like Mario and Link.

A handful of years ago, Nintendo was riding high on its Wii system. A Wii system was once next to impossible to wrangle. Customers would snatch them up as soon as they hit the selling floor almost a year after their release.

Since then, Nintendo has been on the decline. The Wii U, an updated version of its predecessor, never hit home with audiences. Moreover, the company recently reported mediocre Q4 results.

Nintendo needs to think outside of the box.

All of this means that Nintendo doesn’t have the same permission to release the action packed, shoot-em up games as its rivals do and must consider a new strategy. For instance, the company has to think more innocently with its games — consider the titles it offers compared to its competitors. Yoshi World vs. Grand Theft Auto.

A few years back, I was contemplating the next steps that the gaming giant should make. Then, I suggested that the company needed to look outside of itself and partner with a company that is top-of-mind, like Apple.

Turns out, Nintendo is doing just that.

Its first foray into the Apple app world was a failed social network/game attempt. However, I have high hopes for its second attempt which will feature a “very familiar character.” This is its best move since the release of the Wii.

By joining the Apple ecosystem, Nintendo’s reach expands tenfold. With Sony and Microsoft ruling the gaming category, Nintendo now has permission to “Think Different.”