The soft drink industry sees trouble

The soft drink industry must wake up to a new reality.

You see, there are all kinds of business trends that are transforming industries. We’ve already seen what our smartphones have replaced. Streaming media has made CDs and DVDs obsolete. And, as we’ve written extensively, cold breakfast cereal is in its own mess.

The failure to recognize what’s going on and building your brand to respond to market forces will leave you in the dust. Retailers are flat-out ignorant of enacting true change to adapt to a new reality, which includes dead malls.

The soft drink industry is also experiencing massive change. Bottled water has replaced many of our sugar-infested soda drinking habits, with soda sales dropping 1.5% in 2015. The industry itself is responding with ads saying its players will reduce the amount of sugar and offer smaller sizes.

This is, of course, the equivalent of the tobacco industry saying it will have light cigarettes with less tar in them. The industry itself knows that it has a problem, but is trying to stem the tide of consumers leaving it.

However, the soft drink industry is also responding by diversifying their portfolios. The epitome of irony is that those soft drink companies now own most of the most recognizable bottled water brands.

How the soft drink industry can survive.

If I were to make a prediction, I’d say Coca-Cola has the best chance of surviving for one simple reason. It’s the only one with a meaningful and preferred brand. Pepsi once held a direct position against Coke by being about youth, while Coca-Cola was about nostalgia.

Since those heydays, however, Pepsi has been all over the map and must consider a new direction. Today’s youth are veering away from soft drinks. (A 19-year-old son of a co-worker has never sipped a soda in his life.) Capturing the imagination of Millennials is important, but that means all the players need a different strategy. Not just thumb plugging a hole in the dam.

Even Coke’s recent announcement of a selfie bottle won’t do the trick. It’s a gimmick. Big whoop.

A repositioning is in order for all the players. Otherwise, it demonstrates another industry failing to respond to trends in a meaningful manner.

American Airlines Rebranding Failure

American Airlines rebranding is an example of all that is wrong with branding

American Airlines RebrandingThe American Airlines rebranding initiative earlier this year is an example of what pisses me off with branding companies and the drivel they sell to clients.

It was a total waste of money. Worse still, it was a squandering of an opportunity to lead and grow.

Here is a little background for any of you who don’t follow the airline industry as closely as I do (read a market study on the industry here if you are interested).

American Airlines Rebranding
The old American Airlines logo

The merger

American Airlines merged (or purchased depending on your point of view) with US Airways.

American Airlines rebranding was necessary because the old American Airlines company was having a difficult time staying afloat.

It had to go through reorganization just to continue in the business. US Airways was not in any better shape.

Regulators approved the merger because it was believed that, without the acquisition, American Airlines would not be a viable company anymore. It was believed that having American go belly-up would be a bad thing for consumers (the flying public).

But who cares about you and I? What it really meant was that, as consumers, we would have less competition and fares would increase as a result. Same thing happened when United and Continental merged and when Delta and Northwest did the same.

The flying public is not a consideration in this equation, the viability of a large corporation was.

Here is the real problem with the American Airlines Rebranding

American Airlines RebrandingThe industry needs to rethink its business model and the airlines need to redefine their brands. Public sentiment hates the airlines.

They have become unreasonably difficult to use, are costly and unreliable. The passenger is always on back burner.

If your flight is delayed, they appolgize but it turns out to be only your problem. “Please stay in the gate area” even if the flight is delayed an hour or more.

You are captive to the gate because, if the airline should find another plane to run the route, they might take off before the projected delayed estimate— and if you are late, well screw you.

American Airlines had an opportunity at the time of merger to redefine its brand, change its business model and flip the playing field upon which all the copycat competitors compete.

It SHOULD have rebranded. Instead they went to Futurebrand and got a new logo.

A new logo is NOT Rebranding

Who is to blame for this? American Airlines should bare much of the blame. It was lazy and complacent in looking to redefine the category and the brand.

It is the sort of thinking that got it into financial trouble in the first place. But Futurebrand is complicit too.

American airlines rebranding
The NEW American Airlines logo

Why did it not tell American Airlines the truth?

That American was losing the opportunity to grow its market share beyond the simple fact that it was merging into a larger airline.

It’s because Stealing Share competes in an industry (rebranding) that does not understand the business it is in.

Other brand companies still sell corporate identity changes and pass it off as rebranding. No wonder the art of branding has a bad reputation.

Here is the result of that effort by American Airlines and Futurebrand. A new logo, a new name—The New American Airlines (absolute genius don’t you agree?) and a theme that tells the flying public that they are now the largest airline in the world.

God knows that is why we choose them!

Personal branding forms unbreakable bonds

Personal Branding

Personal BrandingPersonal branding is the most overused and most misunderstood of all the branding jargon I come across in my job title (Brand Strategist).

Luckily I have never been asked to work on a personal brand in my professional career.

The whole idea of personal branding caused Google to reconfigure the search engine dynamics of my branding category about four years ago.

Too many of the so called brand companies that specialized in personal branding were practicing what the industry calls black hat SEO.

This means they were using less than respectable practices to score higher in Google searches.

Like the snake-oil salesman of years ago, these personal branding charlatans took peoples hard earned cash for little or no return.

However, the idea of personal branding is not completely stupid

I try to help companies understand their brand equities by using VERY personal examples. I have been known to ask CEOs of fortune 100 companies to “pretend for just a moment that your brand was a person and not a corporation. How would you describe that person?”

Personal brandingIt is an important realization exercise because I want business executives to understand the emotional fabric of their brands.

When you bring a person to mind, it is not just a list of attributes that define that image in your mind’s eye. It is mostly a rag-tag conglomeration of feelings that color and form that memory.

Go ahead for just a moment and visualize your grandmother. When her image comes to mind do you FEEL more or THINK more? Proves my point.

Brand is an emotional connection that defies dissection in a rational manner. Personal branding, as it turns out, is the foundation of all branding. It is how we feel about everything in our lives.

The picture of personal branding is an intricate oil painting

The painting is created by a renaissance master. You.

So many corporate and product brands fail to see this that my work docket is always full. Sure, we talk to our clients about stealing market share and how their brand is the permission-switch that persuades the target audience that their brand is important (and therefore takes and grows market share).

Personal brandingBut, while we all are able to tap our imagination when thinking about personal branding we remain relatively blind when thinking about product and corporate branding.

Corporations are so sold on the rational benefits of their product or service that they can’t get out of their own way. When asked to talk about their own mother Chief Marketing Officers will freely admit that their moms are angels of love.

They describe them as beautiful (even if they were as ugly as a barn door). They attribute to her emotional ideas like caring, loving, considerate, gentle, self-sacrificing and tender. Even if they jokingly speak about her shortcomings they are emotional attributes like angry or formidable.

They NEVER list rational attributes like height, weight, eye color or dress size.

Corporate Brands

Personal brandingBut, contrast that with their business brands and most times all they can list is product attributes and measurable words.

Words like effective, better, new, revolutionary and the new term of the day— disruptive technology is about all they can think of.

So I remind them that the people, music, ideas, books, thoughts, beliefs and even loves in their life are ALL emotional connections. They are NEVER rational.

You might be willing to switch soap powders (read about packaged goods here), even if you are convinced that your first choice cleans better, for another cheaper brand.

But you would NEVER be willing to switch families no matter how dysfunctional yours might be. Emotional bonds are forever.

Emotional brand bonds last forever and can be stretched and contorted beyond belief but they seem never to break. They are self-healing and eternal because we don’t EVER need to think about them. We just KNOW them.

Personal Experiences Recalls Personal Branding

Personal experiences often give us glimpses into personal branding. When I heard that Leonard Cohen had died at age 82 on November 10th 2016 I was sad. Like all of his fans. Was I sad because I knew I would never have the pleasure of hearing his songs again for the first time?

Personal brandingNope. I was sad for me because someone and something I loved had passed away (you can read my blog on Leonard Cohen’s death here). He was not a songwriter and singer to me. He was a part of me. He was a part of my personal brand. His death was personal to me.

When we think about personal branding we envision a world not unlike our solar system (read an interesting article on Ptolemy here— and alternative theory on the universe).

We are the SUN and everything we hold as important revolves around us. It is the gravity of our nuclear furnace that provides the energy to keep the solar system alive and functioning.

But the SUN as metaphor is greater than the description provided to us through physics.

Personal brandingThe Sun, according to science is just a mass of gasses imploding and creating immense power and light through nuclear fusion.

It is, when described in this way, nothing more than a nuclear power plant like the one at Three Mile Island or Chernobyl. Very inspiring don’t you agree?

But, when you think about the Sun (yourself in my metaphor) How it works is not as important as what it represents. It is the source of life, warmth, and light. It is the promise of a new day and awakening. It IS life.

Rebranding as science

When branding or rebranding a company or product we distill its essence down to those emotional values that are in fact the only immutable values you can ever own.

They form for us the basis of our attachment to things, ideas and people. They defy rational understanding and never ask us to consider the basis for that affection because it is in so many ways unknowable.

We just feel it to be so. That’s plenty enough by the way.

When rebranding is needed. We will remind you that all branding, at the end of the day, is personal branding.

 

 

Rebranding Do’s and Don’ts for marketers

Rebranding is an effort that shouldn’t be taken lightly. That’s why, when the decision to rebrand is made, it should be completed with honesty and no holding back.

Many don’t choose that route, however. Most rebranding is actually just a refreshing of a logo, holding on to sacred cows that may not have any meaning in the marketplace anymore. Brands simply update their logos, refurnish their locations, add a category benefit-defining message and call it rebranding.

RebrandingThat’s not rebranding. That’s spitting into the wind.

The reason you rebrand is because your current brand does not resonate with target audiences. It isn’t helping you steal market share from the competition. Revenues have become static (or are in decline) and you understand that the brand’s meaning has lost relevancy.

Most companies who decide to rebrand understand the reasons why. But few know how to accomplish it successfully, especially when the effort must result in increased market share, an uptick on the bottom line and increased importance to target audiences so they cannot choose anyone else.

Rebranding for the right reasons

Every CMO would agree that rebranding without compromise is the only way to go. But getting there can be difficult. It takes a marketer with a strong spine and backing from the company leaders to get it done. There is simply too much at stake.

If you get the rebrand wrong (or, less than optimum) then you are stuck. Rebranding without truly becoming meaningful drops you into conducting the Burger King approach. You just keep adding meaningless menu items in the hope that something will catch on and give some oomph to the brand.

So what are the pitfalls during the rebranding process? Where are the opportunities to get it right?

Rebranding pitfalls

Let’s start with the pitfalls. To start, throw everything you know about your current brand out the window. While you have knowledge of your industry, that can sometimes be a hindrance to having a truly innovative brand.

Think about it this way. Every industry believes it is unique. There are market forces that exist in your industry that my not live in others. But the end result of any rebranding is still the same: Understanding human behavior. That is even important in B2B businesses where emotional preference often overcomes price.

RebrandingThe auto industry, for example, is one that believes so strongly that its market is unique that it rarely looks outside the industry for help. In fact, an agency must have auto experience in order to work on most auto brands.

Sounds reasonable, right? Well, like many other industries, that means that the players within that industry just trade agencies back and forth, believing that it will someday make a difference. Yet few industries spout such similar messages as automobile manufacturers do and market share stagnates.

Truly rebrand against the competition.

Another pitfall. Listening only to your own customers. The art of rebranding is to steal market share, not just keep the customers you already have. If you have preference with a portion of the audience, that means they have already bought into what your brand. It’s the customers of your competition that you are looking to attract. And, right now, they are ignoring you.

That means you must focus on them. Focusing on your current customers often leads to the stale refresh of a brand rather than something designed to steal market share. That’s how you become stagnant.

Where are the opportunities?

Quantitative research uncovers the main strategies of any rebrand. But there is research and there is research. Most do usage and attitude studies that rarely tell you anything groundbreaking that you already didn’t know. While some of that data is useful, it doesn’t help in the rebuilding of a brand.

There are honest values to test, but they should not be the category benefits of what you offer. “Better technology” or “low prices” are not switching triggers to test because they are simply definitions of what the category offers. The switching triggers to test are often the emotional messages that prompt audiences to prefer you in the face of rational reasons to not.

RebrandingThat’s where precepts come in. Few, if any, advertising agencies or brand companies understand how human behavior works. Our actions as humans are driven by our belief systems. Our wants and needs come from a belief. Most marketing and branding stops at needs and wants, without any understanding of why they are important.

Those belief systems are the emotional triggers to preference. These precepts are first uncovered in behavior modeling, then tested in the research.

Rebranding is difficult because it asks its guardians to take a hard look at what the brand is currently doing in the marketplace – and the news is usually not good. It means letting go of past efforts that are actually holding you back from creating true preference.

The root of emerging with a meaningful brand is understanding the emotional drivers of your target audience’s behavior. The brand is not something you own. It’s something the people you are attracting own. Therefore, a successful rebrand comes from those audiences, not yourself.

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.