Friday, October 31, 2014

Brand Architecture and M&A

We are frequently called upon to help with brand architecture issues.  When a company grows through mergers and acquisitions it usually has a large portfolio of brands at least some of which are redundant. The key question becomes, “Which brands become rationalized and how should this be managed to minimize negative consequences while maximizing positive consequences?”

We have also had to help companies make decisions about brands that have been positioned differently in different regions of a country or the world. We have one client whose brands span a range from basic to premium, however in some places one brand is the premium brand, while in other places it is the basic brand. We have had clients that want to take strong regional master brands out nationally but repositioned for specific market segments. How does this affect existing regional customers who view those brands more broadly?

After a number of acquisitions, some companies hope to offer identical products under different brand names. Some companies do this by creating common product lines with common identities across different parent brands. This can become quite confusing and diluting.

Growing through M&A can also cause channel conflict issues. Now the wrong brands are in the wrong channels from certain retailers’ perspectives. Particularly powerful retailers have told some clients how they should position their brands within their stores. However, this is often out of step with how those manufacturers need to position those brands within their portfolios.

In M&A, the biggest problem is almost always the presence of too many brands. The system gets too complex. We worked with one company that had acquired dozens of companies that offered very similar products in the same categories. When we were retained, all of the acquired brands were intact. The client had been producing dozens of product catalogs selling virtually identical products under different brand and product names to the same customers.

Not only are complex brand architectures difficult and expensive to manage, but they are also confusing to customers. The trick is to simplify them in ways that make sense to customers without destroying brand equity-related value or alienating existing customers. Simplifying brand architecture after multiple mergers and acquisitions is necessary. It should be approached with careful analysis and forethought.

Thursday, October 30, 2014

Branding Municipalities

Branding municipalities is an interesting and complex activity. The target audiences are myriad and disparate, including at least the following:
  • Residents and potential residents
  • Businesses and potential businesses
  • Tourists/visitors
  • Meeting and an event planners (including convention planners and major sporting event organizers)
  • Transients (people passing through on their way to somewhere else)
  • Corporate commercial traffic

Each of these audiences has its own distinct issues and needs. And, there are typically separate place-based organizations established to market to each of these market’s needs – visitors & convention bureaus, economic development councils, business improvement districts, etc. Add mayor’s offices and district, county, provincial, state, regional and national entities, business leaders, cultural institution leaders, etc. and the stakeholder groups mushroom into a large mix of potentially competing points of view. This is why carefully orchestrating a branding project and facilitating consensus across all stakeholder groups is critical to a successful place branding effort. That is also why a place branding effort often takes much longer than a comparable product or organization branding effort.

Here is what tends to be important to each major audience:
Residents
  • Good job opportunities
  • Low crime
  • Good medical care
  • Affordable housing
  • Scenic beauty
  • Attractive neighborhoods
  • Friendly people
  • Good school systems
  • Clean highways and public spaces
  • Many places to go and things to do on the weekends
  • Abundant cultural amenities
  • Low cost of living
  • Good restaurants
  • Reasonable commutes

Businesses[1]
  • Prevailing wages
  • Labor force quality
  • Housing and quality of life
  • Labor market rigidities
  • Proximity to suppliers or final market
  • Energy and resource costs
  • Real estate costs
  • Political stability
  • Innovation capacity
  • Agglomeration benefits
  • Tax costs
  • Public services

Tourists
  • Reasonable travel distance and cost
  • A variety of interesting things to do and see
  • Affordable lodging with required amenities
  • Public toilets
  • Easy navigation/way finding
  • Aesthetically pleasing environment
  • Friendly people
  • Good restaurants
  • Shopping
  • Unique local sights and activities

Meeting and event planners
  • Air transportation (access, costs, distance to site)
  • Hotel rooms and ground transportation access
  • Space requirements (meeting rooms, banquet halls, exhibit space, etc.)
  • Contiguous venues
  • Close proximity to quality restaurants, retail and entertainment
  • Safety of the area
  • Tours and other activities


Clearly, this is a diverse and complicated set of needs and issues.  Having said that, a place ultimately becomes best known for one or two things. It is the job of branding to insure that those one or two things are unique to the place and highly compelling.



[1] Source: Brian Klinksiek, “Business Taxes in San Francisco: A Review of How Taxes Affect Business-Location Decisions” A San Francisco Planning and Urban Research Association (SPUR) report, SPUR newsletter, issue 424, February 2004.

The Importance of Building Brand Awareness

Awareness is one of the two most important drivers of strong brands (the other being relevant differentiation). Past research has shown brand awareness to have a high correlation with quality perceptions, purchase intent, market share and other important brand and business metrics. I have found top-of-mind unaided brand awareness for the product/service category in question to be the awareness measure most correlated with positive brand and business outcomes.

If your company has created a superior product offered at a price that delivers an outstanding value and supports the product with unparalleled service, but no one has ever heard of your company or its products, how many of those products are you likely to sell? Zero. That’s why awareness is so important. It is the cornerstone of strong brands.

Research indicates that the primary impact advertising has on brands is to build awareness for those brands.

What, in addition to advertising, can one do to build strong brand awareness? – (a) any form of repeated exposure to the brand and (b) a strong brand identity consistently presented. Any of the following can lead to repeated exposure:

  • Extensive distribution
  • Publicity and brand-related stories/articles
  • Publicity stunts
  • Product placement in movies, games, etc.
  • Direct marketing
  • A strong social media presence
  • Creating and distributing viral brand content
  • Customer referrals
  • Word of mouth marketing
  • Frequency programs
  • Insignia merchandise
  • Brand licensing
  • A strong presence at trade shows and in trade magazines
  • Thought leadership in the industry – white papers, speeches, roundtable discussions, user conferences, best practice benchmarking, etc.
  • Branding on employee uniforms, sides of vehicles, in front of buildings, etc.
  • Brand signature on all email messages
  • Programs promoting product trial
  • Brand-related contests
  • Brand participation in local activities and events


A strong identity requires a strong icon, a tagline that reinforces the brand promise, a highly functional identity system and guidelines and a champion (“identity police”) to ensure consistent use. Digital asset management systems are excellent in driving consistent use.

Tuesday, October 28, 2014

50 Ways to Differentiate Your Brand

  1. Go slow in a world of speed. Each Rolex takes a year to manufacture. The perception that a longer process is needed to build the world's best timepiece also reinforces the price.
  2. Use country of origin to your advantage. For example, brands from Switzerland are highly associated with precision and fine craftsmanship. Seek to build brand associations with countries that support your reputation for service, manufacturing, innovation etc.
  3. Behave differently. Online shoe retailer Zappos has built its advantage on an iron clad return policy and customer service that goes above and beyond.
  4. Look different. Apple always looks like Apple. Diesel always looks like Diesel. They’re in a sector but they don’t look like part of the sector.
  5. Be the underdog in a sector where everyone else wants to be top dog. Nantucket Nectars started "with only a blender and a dream," and Clif Bar proclaims that its founder once lived in a garage. Underdogs win the compassionate consumer. Look for the underdog story you can tell. 
  6. Be truly and unapologetically shocking. Benetton’s “Unhate” campaign ruffled feathers on almost every front. But – and this is critical – the outrage you generate must link to a solution and that solution should be your front. Otherwise, you simply risk shouting into the wind.
  7. “Discover” an untapped audience in your sector and, by drawing them in, intensify the sense of community around your brand and the interaction that people have with the brand [example]
  8. (Re)Invent a category – and own it. UFC became the fastest growing sports organization in the world by redefining the reach and the audience for mixed martial arts. Today, UFC produces more than 30 live events annually and is the largest pay-per-view event provider in the world
  9. Create a new category. The Toyota Prius, the Nintendo Wii, and Red Bull are all brands that created new categories, outside the established norms of their product category. By stepping outside the bounds of their categories, these brands created a space that they can call their own.
  10. Tell a story that defines you and is unique to you. The story may be about your founder as in the case with Virgin and Richard Branson. Your heritage like Hickory Farms or the value you bring to the world like Coca-Cola’s Open Happiness story. It may also be based in imagination – like the thought that Keebler elves make Keebler cookies. Or perhaps it’s a story based on your highly guarded secret – only two people in the world know Coca-Cola’s formula. Your story may also be about the source of your product or service, like Evian water.
  11. Forge new ground in the spirit of your founder. Chanel continues to personify the philosophies, ideals and legend of Coco Chanel look after her death
  12. Leverage your history to define tomorrow. National Geographic have redefined what it means to experience the world we never see by expanding their channels and offerings whilst still holding their history close.
  13. Own an eternal idea. Red Bull expresses in every action its belief in, and addiction to, excitement. Ingredients, spirit, sponsorships and the human desire to do things that make the heart race are inextricably linked.
  14. Change the possibilities. this is about more than just product innovation. It’s about the introduction of technologies that completely change how people can live. Boeing redefined travel forever with the 747. Google may well redefine how we can see with Google Glass. Dyson reinvented old technologies like the vacuum and the fan.
  15. Make active plans to be where others aren’t (yet). This article (http://www.jingdaily.com/label-overload-how-many-more-western-brands-can-the-chinese-market-sustain/24349/) looks at the fact that while Chinese consumers are now overwhelmed by Western brands and doing business in Greater China has become very expensive, other countries in Asia with booming economies like Indonesia, Malaysia and the Philippines remain largely overlooked.
  16. Solve a global problem. “Big bang” solutions in areas like pharmaceuticals or biotechnology require huge investment and scary timeframes, but when they work, they deliver huge distinction, kudos and profits.
  17. Build groundswell. Do something startling to generate attention. Use attention to build a crowd. Use a crowd to gain credibility. Use credibility as the jumping off point for your next distinctive act.
  18. Redefine how people buy. As I commented in this article in Entrepreneur, (http://www.entrepreneur.com/article/223125#ixzz2mk5NrRxD) With millions of products, 24/7 access, superior search and browse technology, user reviews and many other sources of in-depth product information, Amazon.com offers a superior purchase experience.”
  19. Bring unprecedented optimism to a sector. Nike redefined what people believed they should be capable of.
  20. Connect the previously unconnected. LinkedIn brought business people together so that they could network and share ideas in a way that was effortless, credible and global. In doing that, they resolved a problem that no-one realised they had until they saw the potential for what they would now be able to do.
  21. Rewrite the experience. Southwest Airlines put the fun, the quirkiness and the savings back into the serious and process-packed world of travel. Starbucks differntaied by creating a ‘third place’ – a respit between home and work.
  22. Make what you sell feel even more personal. This great infographic (http://www.entrepreneur.com/article/228668) hints at how much further retailers could take personalisation
  23. Link your brand to an Occasion. Habits are powerful, but occasions may be even more so. They engage us so effectively because they combine time and focus. And because of that, they provide permission – it’s OK to behave this way or that. It’s OK to do something you wouldn’t do on any ordinary day. De Beers, Hallmark, Mercedes, Hershey, Cadbury, MACY’s and others have tapped into occasions or created occasions.
  24. Brand Licensing can bring valuable new meaning to a brand, further differentiating it from its competitors. Pillsbury licenses the Cinnabon brand to do just that for its cinnamon rolls.
  25. Break away from conventional wisdom. Breakaway brands bring new meanings to the party and make the most of the stretch, holding on to enough of the old to avoid category defection. Breakaway brands stretch the boundaries and live as outliers. These brands are the opposite of the well-behaved brands in the category and consequently provide radical differentiation from the status quo. Cirque du Soleil is one such brand. It falls into the “circus” category, but this brand has skillfully crafted a highly valued and differentiated positioning as everything a circus is not. There are no tents, tigers and elephants. No ringmasters. Instead it borrows attributes from other entertainment categories like, dance, music, opera and theater. It becomes something all together different–far outside the bounds of a conventional circus.
  26. Change the name. Sometimes your original name doesn’t sound like it would be something you would want to put in your mouth. Like a Chinese gooseberry. When the name was changed to kiwi fruit, the world suddenly had a new favorite fruit that it wanted to put in its mouth.
  27. Personify. The Green Giant character became the difference in a family of vegetables in many forms. Frank Perdue became the tough man behind the tender chicken. The Gecko became the much-loved spokesperson for GEICO.
  28. Create a new generic. The cantaloupe people wanted to differentiate a special, big cantaloupe. But rather than call them just plain “big,” they introduced a new category called Crenshaw melons. Tyson wanted to sell miniature chickens, which doesn’t sound very appetizing. So it introduced Cornish game hens.
  29. Reposition the category. Pork was just pig for many years. All that did was conjure up mental pictures of animals wallowing in the mud. Then the industry jumped on the chicken bandwagon and became “the other white meat.” That was a very good move when red meat became a perceptual problem. 
  30. Identify. Ordinary bananas became better bananas when a small Chiquita label was added to the fruit. Dole did the same for pineapple with the Dole label, as did the lettuce people by putting each head into a clear Foxy lettuce package. Of course, you then have to communicate why people should look for these labels.
  31. Be the expert or specialist. The specialist can focus on one product, one benefit, and one message. This focus enables the marketer to put a sharp point on the message that quickly drives it into the mind. Domino’s can focus on home delivery. Pizza Hut has to talk about its different pizzas, home delivery, and sit-down service.
  32. Pricing. Starbucks prices its coffee higher to raise perceptions of the quality of its coffee.  Singapore Airlines, the most profitable airline in the world does the same thing and always sells at a premium. In each case, the price is a signal of supremacy - differentiation via perceived quality.
  33. Use Ingrediant Brands. The North Face uses Gore-Tex technology to differentiate. In the PC space Intel adds to the product's performance. Each brings noticeable differences in their own right.
  34. Highly target a market. Who you focus on can create a unique point of difference. Consider FOX News, an American news outlet designed to serve the Republican Party and its supporters. This laser focus has made it synonymous with conservative views and policies, creating by far the strongest commercial brand associated with those views. Wegmans Supermarkets belives that happy customers are generated by happy employees. They have built their powerful brand on the mantra that their employee’s are number one.
  35. Distribution. How your product or service reaches a customer can set you apart. Redbox specializes in the rental of DVD’s and video games. Through an easy to use kiosk it differentiates from its competitor Netflix and helped seal the fate of Blockbuster. Amazon has a futuristic plan to deliver some orders via drone.
  36. Access. The reason people flew Concorde was the opportunities that could come from who you would sit next to. You weren't paying for a faster flight, you were paying for the company. Country clubs in Asia are the same. It's not about the game of golf; it's about the networking.
  37. Shared Values. When a brand is built on shared values it can differentiate on those values and enjoy perhaps the strongest bond in the marketing world. Think of any brand that really matters and you’ll discover the type of people buying the stuff are the same type of people who design, make and sell the stuff. This is the awesome sauce of brand values and brand identity alignment. Apparel brands like Patagonia, L.L. Bean, and The North Face understand the importance of shared values. The bond that binds is a deep inter-personal connection between the users and the makers.
  38. Social Responsibility. In the same manner as the enthusiast apparel brands mentioned in #38, Kashi cereal customers see themselves, their values, and their identities in complete harmony with the Kashi brand. They’re one and the same. Likewise, the Kashi people care about the same stuff as their consumer– greater health and well-being for themselves and the planet. For Kashi, making food that enhances life is sacred business. For Kashi customers, living well is sacred business. More people are waking up to caring more about others and our planet, and buying Kashi products too. Your brand can differentiate as being the do-good brand in your space.
  39. Package Design offers one of the biggest opportunities for brand differentiation. Color, shape, size, functionality, texture and materials can influence purchase decisions. There’s no mistaking a Tiffany & Co. box and its distinctive blue. Innovative packaging proves  another signature differntiator for Apple as well as Tropicana which learned the value of this difference when it attempted to redesign its packaging.
  40. Engage the senses. Every marketer should explore the senses when ideating brand differentiation strategies. Each of the five senses offer a channel to connect with your target customer. The more each these are engaged at any one time during customer contact the more your brand and what it stands for will be remembered. Scent branding in the hotel world is one example. Sofitel, Le Meridién, The Ritz-Carlton, Westin, Sheraton and Marriott are some of the hotel brands employing a signature scent strategy to further move away from their competitors.
  41. Celebrity Endorsements. The age-old strategy of pairing products and services with a well known celebrity continues to be a viable option for brand differentiation. However, the rules have changed. There must be an authentic alignment between the brand and the celebrity. Case in point: Tiger Woods and golf: Yes. Tiger Woods and Buick: No. The association between brand and celebrity must be clear and obvious.
  42. Product Usage. How your product is used can serve as a key differentiator. Arm & Hammer Baking Soda became much more when customers discovered it also made for a powerful air freshener. This helped Arm & Hammer not only extend into new categories but also create a multi-use brand that is more meaningful to its target customers.
  43. Market highly valued values. With deep customer insight you will know what your target customers value most. That insight can help create highly valued brands. Honest Tea was born from the insight that simple and pure refreshment was missing from the market. The Method brand came to life through a quest to create household cleaning products that were not harmful.
  44. Tap into the power of emotions. Linking your brand with customer emotions can prove an effective differentiator. It was humor that helped GEICO pull away in the me-too world of insurance. While their competition focused on fear, GEICO used witty and funny campaigns to differentiate itself and gain an advantage. Brands like Hallmark found brand differntiation based on human emotions could lead to a 98% market share.
  45. Control the accessibility. Brands can differentiate on when they make their products and services available and who they make that accessibility for. Elite luxury brands will limit how many of its signature products are manufactured. The most influential customers will have access to those products first. This all builds into the frenzy that drives desire and purchase of the brand. It also helps command a premium price. Brands like Coca-Cola use accessibility on the other end of the spectrum. They desire to be the most accessible brand and have distribution channels into the deepest regions of the world.
  46. Focus on design and aesthetics. Consider Hermès scarves, Vilebrequin men’s swimwear, Robert Graham shirts and Alexander McQueen fashion wear. Or how about the Michael Graves Design’s collection at Target? This helps college and university brands too. Beautiful campuses tend to attract students. For municipality brands, “attractive neighborhoods” rates as one of the top things people consider when deciding where to live. Camden, ME, Niagara-on-the-Lake (ON, Canada), Quebec City (QC, Canada) and Bruges, Belgium are very popular as tourist destinations, in large part due to their superior aesthetics. Never underestimate the power of superior aesthetics to differentiate.
  47. Convey status. If you knew I went to Philips Academy Andover, Harvard and Stanford, lived in Atherton, CA, summered in Nantucket, drove a Mercedes-Benz model S-class, and sailed a Nautor’s Swan53, would these brands effectively communicating my social status?
  48. Create a unique product purchase experience. How different is purchasing a teddy bear with a child in a Build-A-Bear Workshop versus buying one off the shelf in a typical toy or department store?
  49. Create an unusual theme or twist to your brand. Consider the following unusual restaurant brands – Opaque (dining in the dark), Ice Restaurant (in Dubai), Underwater restaurant in Maldives, Magic Restroom (toilet-themed) Café in CA or Dinner in the Sky (suspended 50 meters above the ground). For more creative restaurant themes, see http://www.toxel.com/inspiration/2009/06/20/10-unusual-and-creative-restaurants/.
  50. Treat people differently than your competitors do. We love Ritz-Carlton’s “Ladies and gentlemen serving ladies and gentlemen” mantra. This alludes to a level of gentility, civility and respect not often experienced in product purchase or usage experiences.

This blog post was written with co-authors Thomson Dawson, Derrick Daye and Mark Di Somma.