Thursday, 24 September 2009
Wednesday, 9 September 2009
The Obama Marketing Lesson
The Obama Marketing Lesson: "
Nov. 4, 2008, will go down in history as the biggest day ever in the history of marketing.
Take a relatively unknown man. Younger than all of his opponents. Black. With a bad-sounding name. Consider his first opponent: the best-known woman in America, connected to one of the most successful politicians in history. Then consider his second opponent: a well-known war hero with a long, distinguished record as a U.S. senator.
It didn't matter. Barack Obama had a better marketing strategy than either of them. 'Change.'
Nazi propaganda chief Joseph Goebbels was the master of the 'big lie.' According to Goebbels, 'If you tell a lie big enough and keep repeating it, people will eventually come to believe it.'
The opposite of that strategy is the 'big truth.' If you tell the truth often enough and keep repeating it, the truth gets bigger and bigger, creating an aura of legitimacy and authenticity.
Clinton's 'Solutions' Fizzle
What word did Hillary Clinton own? First she tried 'experience.' When she saw the progress Mr. Obama was making, she shifted to 'Countdown to change.' Then when the critics pointed out her me-too approach, she shifted to 'Solutions for America.'
What word is associated with Ms. Clinton today? I don't know, do you?
Then there's John McCain. An Oct. 26 cover story in The New York Times Magazine was titled 'The Making (and Remaking and Remaking) of the Candidate.' The visual listed some of the labels the candidate was associated with: 'Conservative. Maverick. Hero. Straight talker. Commander. Bipartisan conciliator. Experienced leader. Patriot.' Subhead: 'When a Campaign Can't Settle on a Central Narrative, Does It Imperil Its Protagonist?'
Actually, Mr. McCain did settle on a slogan, 'Country first,' but it was way too late in the campaign and it was a slogan that had little relevance to the average voter.
Tactically, both Ms. Clinton and Mr. McCain focused their messages on 'I can do change better than my opponent can do change.'
'Better' never works in marketing. The only thing that works in marketing is 'different.' When you're different, you can pre-empt the concept in consumers' minds so your competitors can never take it away from you.
The Ultimate Slogan
Look at what 'driving' has done for BMW. Are there vehicles that are more fun to drive than BMWs? Probably, but it doesn't matter. BMW has pre-empted the 'driving' position in the mind.
The sad fact is that there are only a few dozen brands that own a word in the mind and most of them don't even use their words as slogans. Mercedes-Benz owns 'prestige,' but doesn't use the word as a slogan. Toyota owns 'reliability,' but doesn't use the word as a slogan. Coca-Cola owns 'the real thing,' but doesn't use the words as a slogan. Pepsi-Cola owns 'Pepsi generation,' but doesn't use the words as a slogan.
As a matter of fact, most brands follow the Pepsi pattern. Every time they get a new CMO or a new advertising agency, they change the slogan. Since 1975, BMW has used one slogan: 'The ultimate driving machine.' Since 1975, Pepsi-Cola has used these advertising slogans:
? 1975: 'For those who think young.'
? 1978: 'Have a Pepsi day.'
? 1980: 'Catch that Pepsi spirit.'
? 1982: 'Pepsi's got your taste for life.'
? 1983: 'Pepsi now.'
? 1984: 'The choice of a new generation.'
? 1989: 'A generation ahead.'
? 1990: 'Pepsi: The choice of a new generation.'
? 1992: 'Gotta have it.'
? 1993: 'Be young. Have fun. Drink Pepsi.'
? 1995: 'Nothing else is a Pepsi.'
? 2002: 'Generation next.'
? 2003: 'Think young. Drink young.'
? 2004: 'It's the cola.'
Thirty-three years ago when the 'Ultimate driving machine' campaign started, BMW was the 11th-largest-selling European imported vehicle in the U.S. market. Today it's No. 1.
Thirty-three years ago, Pepsi-Cola was the No. 2-selling cola in the U.S. market. Today, many advertising slogans later, it's still No. 2.
The average Pepsi-Cola advertising slogan lasts just two years and two months. The average chief marketing officer lasts just two years and two months. The average corporate advertising campaign in BusinessWeek lasts just two years and six months.
The Obama campaign has a lot to teach the advertising community.
1. Simplicity.
About 70% of the population thinks the country is going in the wrong direction, hence Obama's focus on the word 'change.' Why didn't talented politicians like Ms. Clinton and John Edwards consider using this concept?
Based on my experience, in the boardrooms of corporate America 'change' is an idea that is too simple to sell. Corporate executives are looking for advertising concepts that are 'clever.' For all the money being spent, corporate executives want something they couldn't have thought of themselves. Hopefully, something exceedingly clever.
Here is a sampling of slogans from a recent issue of BusinessWeek:
? Chicago Graduate School of Business: 'Triumph in your moment of truth.'
? Darden School of Business: 'High touch. High tone. High energy.'
? Salesforce.com: 'Your future is looking up.'
? Zurich: 'Because change happenz.'
? CDW: 'The right technology. Right away.'
? Hitachi: 'Inspire the next.'
? NEC: 'Empowered by innovation.'
? Deutsche Bank: 'A passion to perform.'
? SKF: 'The power of knowledge engineering.'
Some of these slogans might be clever, some might be inspiring and some might be descriptive of the company's product line, but none will ever drive the company's business in the way that 'change' drove the Obama campaign. They're not simple enough.
2. Consistency.
What's wrong with 90% of all advertising? Companies try to 'communicate' when they should be trying to 'position.'
Mr. Obama's objective was not to communicate the fact that he was an agent of change. In today's environment, every politician running for the country's highest office was presenting him or herself as an agent of change. What Mr. Obama actually did was to repeat the 'change' message over and over again, so that potential voters identified Mr. Obama with the concept. In other words, he owns the 'change' idea in voters' minds.
In today's overcommunicated society, it takes endless repetition to achieve this effect. For a typical consumer brand, that might mean years and years of advertising and hundreds of millions of dollars.
Most companies don't have the money, don't have the patience and don't have the vision to achieve what Mr. Obama did. They jerk from one message to another, hoping for a magic bullet that will energize their brands. That doesn't work today. That is especially ineffective for a politician because it creates an aura of vacillation and indecisiveness, fatal qualities for someone looking to move up the political ladder.
The only thing that works today is the BMW approach. Consistency, consistency, consistency -- over decades, if not longer.
But not with a dull slogan. Hitachi has been 'inspiring the next' for as long as I can remember, but with little success.
Effective slogans needs to be simple and grounded in reality. What next has Hitachi ever inspired? Red ink, maybe. In the past 10 years, Hitachi has had sales of $786.9 billion and managed to lose $5.1 billion. When you put your corporate name on everything, as Hitachi does, it's difficult to make money because it's difficult to make the brand stand for anything.
3. Relevance.
'If you're losing the battle, shift the battlefield' is an old military axiom that applies equally as well to marketing. By his relentless focus on change, Mr. Obama shifted the political battlefield. He forced his opponents to devote much of their campaign time discussing changes they proposed for the country. And how their changes would differ from the changes that he proposed.
All the talk about 'change' distracted both Ms. Clinton and Mr. McCain from talking about their strengths: their track records, their experience and their relationships with world leaders.
As you probably know, Mr. Obama was selected as Advertising Age's Marketer of the Year by the executives attending the Association of National Advertisers' annual conference in Orlando last fall. But one wonders if these CMOs are getting the message.
As one marketing executive said: 'I look at it as something that we can all learn from as marketers. To see what he's done, to be able to create a social network and do it in a way where it's created the tools to let people get engaged very easily. It's very easy for people to participate.'
Whatever happened to 'change'?
"
Nov. 4, 2008, will go down in history as the biggest day ever in the history of marketing.
Take a relatively unknown man. Younger than all of his opponents. Black. With a bad-sounding name. Consider his first opponent: the best-known woman in America, connected to one of the most successful politicians in history. Then consider his second opponent: a well-known war hero with a long, distinguished record as a U.S. senator.
It didn't matter. Barack Obama had a better marketing strategy than either of them. 'Change.'
Nazi propaganda chief Joseph Goebbels was the master of the 'big lie.' According to Goebbels, 'If you tell a lie big enough and keep repeating it, people will eventually come to believe it.'
The opposite of that strategy is the 'big truth.' If you tell the truth often enough and keep repeating it, the truth gets bigger and bigger, creating an aura of legitimacy and authenticity.
Clinton's 'Solutions' Fizzle
What word did Hillary Clinton own? First she tried 'experience.' When she saw the progress Mr. Obama was making, she shifted to 'Countdown to change.' Then when the critics pointed out her me-too approach, she shifted to 'Solutions for America.'
What word is associated with Ms. Clinton today? I don't know, do you?
Then there's John McCain. An Oct. 26 cover story in The New York Times Magazine was titled 'The Making (and Remaking and Remaking) of the Candidate.' The visual listed some of the labels the candidate was associated with: 'Conservative. Maverick. Hero. Straight talker. Commander. Bipartisan conciliator. Experienced leader. Patriot.' Subhead: 'When a Campaign Can't Settle on a Central Narrative, Does It Imperil Its Protagonist?'
Actually, Mr. McCain did settle on a slogan, 'Country first,' but it was way too late in the campaign and it was a slogan that had little relevance to the average voter.
Tactically, both Ms. Clinton and Mr. McCain focused their messages on 'I can do change better than my opponent can do change.'
'Better' never works in marketing. The only thing that works in marketing is 'different.' When you're different, you can pre-empt the concept in consumers' minds so your competitors can never take it away from you.
The Ultimate Slogan
Look at what 'driving' has done for BMW. Are there vehicles that are more fun to drive than BMWs? Probably, but it doesn't matter. BMW has pre-empted the 'driving' position in the mind.
The sad fact is that there are only a few dozen brands that own a word in the mind and most of them don't even use their words as slogans. Mercedes-Benz owns 'prestige,' but doesn't use the word as a slogan. Toyota owns 'reliability,' but doesn't use the word as a slogan. Coca-Cola owns 'the real thing,' but doesn't use the words as a slogan. Pepsi-Cola owns 'Pepsi generation,' but doesn't use the words as a slogan.
As a matter of fact, most brands follow the Pepsi pattern. Every time they get a new CMO or a new advertising agency, they change the slogan. Since 1975, BMW has used one slogan: 'The ultimate driving machine.' Since 1975, Pepsi-Cola has used these advertising slogans:
? 1975: 'For those who think young.'
? 1978: 'Have a Pepsi day.'
? 1980: 'Catch that Pepsi spirit.'
? 1982: 'Pepsi's got your taste for life.'
? 1983: 'Pepsi now.'
? 1984: 'The choice of a new generation.'
? 1989: 'A generation ahead.'
? 1990: 'Pepsi: The choice of a new generation.'
? 1992: 'Gotta have it.'
? 1993: 'Be young. Have fun. Drink Pepsi.'
? 1995: 'Nothing else is a Pepsi.'
? 2002: 'Generation next.'
? 2003: 'Think young. Drink young.'
? 2004: 'It's the cola.'
Thirty-three years ago when the 'Ultimate driving machine' campaign started, BMW was the 11th-largest-selling European imported vehicle in the U.S. market. Today it's No. 1.
Thirty-three years ago, Pepsi-Cola was the No. 2-selling cola in the U.S. market. Today, many advertising slogans later, it's still No. 2.
The average Pepsi-Cola advertising slogan lasts just two years and two months. The average chief marketing officer lasts just two years and two months. The average corporate advertising campaign in BusinessWeek lasts just two years and six months.
The Obama campaign has a lot to teach the advertising community.
1. Simplicity.
About 70% of the population thinks the country is going in the wrong direction, hence Obama's focus on the word 'change.' Why didn't talented politicians like Ms. Clinton and John Edwards consider using this concept?
Based on my experience, in the boardrooms of corporate America 'change' is an idea that is too simple to sell. Corporate executives are looking for advertising concepts that are 'clever.' For all the money being spent, corporate executives want something they couldn't have thought of themselves. Hopefully, something exceedingly clever.
Here is a sampling of slogans from a recent issue of BusinessWeek:
? Chicago Graduate School of Business: 'Triumph in your moment of truth.'
? Darden School of Business: 'High touch. High tone. High energy.'
? Salesforce.com: 'Your future is looking up.'
? Zurich: 'Because change happenz.'
? CDW: 'The right technology. Right away.'
? Hitachi: 'Inspire the next.'
? NEC: 'Empowered by innovation.'
? Deutsche Bank: 'A passion to perform.'
? SKF: 'The power of knowledge engineering.'
Some of these slogans might be clever, some might be inspiring and some might be descriptive of the company's product line, but none will ever drive the company's business in the way that 'change' drove the Obama campaign. They're not simple enough.
2. Consistency.
What's wrong with 90% of all advertising? Companies try to 'communicate' when they should be trying to 'position.'
Mr. Obama's objective was not to communicate the fact that he was an agent of change. In today's environment, every politician running for the country's highest office was presenting him or herself as an agent of change. What Mr. Obama actually did was to repeat the 'change' message over and over again, so that potential voters identified Mr. Obama with the concept. In other words, he owns the 'change' idea in voters' minds.
In today's overcommunicated society, it takes endless repetition to achieve this effect. For a typical consumer brand, that might mean years and years of advertising and hundreds of millions of dollars.
Most companies don't have the money, don't have the patience and don't have the vision to achieve what Mr. Obama did. They jerk from one message to another, hoping for a magic bullet that will energize their brands. That doesn't work today. That is especially ineffective for a politician because it creates an aura of vacillation and indecisiveness, fatal qualities for someone looking to move up the political ladder.
The only thing that works today is the BMW approach. Consistency, consistency, consistency -- over decades, if not longer.
But not with a dull slogan. Hitachi has been 'inspiring the next' for as long as I can remember, but with little success.
Effective slogans needs to be simple and grounded in reality. What next has Hitachi ever inspired? Red ink, maybe. In the past 10 years, Hitachi has had sales of $786.9 billion and managed to lose $5.1 billion. When you put your corporate name on everything, as Hitachi does, it's difficult to make money because it's difficult to make the brand stand for anything.
3. Relevance.
'If you're losing the battle, shift the battlefield' is an old military axiom that applies equally as well to marketing. By his relentless focus on change, Mr. Obama shifted the political battlefield. He forced his opponents to devote much of their campaign time discussing changes they proposed for the country. And how their changes would differ from the changes that he proposed.
All the talk about 'change' distracted both Ms. Clinton and Mr. McCain from talking about their strengths: their track records, their experience and their relationships with world leaders.
As you probably know, Mr. Obama was selected as Advertising Age's Marketer of the Year by the executives attending the Association of National Advertisers' annual conference in Orlando last fall. But one wonders if these CMOs are getting the message.
As one marketing executive said: 'I look at it as something that we can all learn from as marketers. To see what he's done, to be able to create a social network and do it in a way where it's created the tools to let people get engaged very easily. It's very easy for people to participate.'
Whatever happened to 'change'?
Sponsored By: The Brand Positioning Workshop
"
Brand Positioning and Perceptual Maps
Brand Positioning and Perceptual Maps: "
"
A brand’s position is the set of perceptions, impressions, ideas and feelings that consumers have for the product compared with competing products. Marketers plan positions that give their products the greatest advantage in selected target markets, and they design marketing mixes to create these planned positions.
In planning their positioning, marketers often prepare perceptual maps that show consumer perceptions of their brand versus competing brands on attributes that are important to the consumer, whether functional or symbolic.
Perceptual Maps are useful for these key reasons:
* Assessing strengths and weaknesses relative to competing brands along certain criteria important to the customer.
o This is revealed by the positions of the marketer's brand and competing brands along the axes.
* Identification of competitive advantage for the brand
o Perceptual maps show differentiation among products in the customer's mind.
o For example, in a perceptual map representing the car market based on two dimensions, “conservative “ vs. “sporty” and “classy/ distinctive” vs. “practical/affordable,” Porsche will probability be seen as the classiest and sportiest of the cars in consumers’ minds, providing the brand with a strong competitive advantage. Assess opportunities for new brands, as well as for repositioning existing brands.
* Identifying market opportunities
o Empty spaces near an ideal point (meaning an attractive market segment) on the perceptual map represent potential market opportunities.
* See how ideal points are moving
o In addition, perceptual maps show how ideal points shift as markets mature, and therefore a brand might shift its positioning in order to retain or gain a competitive advantage.
What do you do when your product’s features are not registering with customers? If a brand has a competitive advantage on an attribute that is not salient, marketers can educate their customers as to why it is important and show them why they should care about this attribute.
If this does not work or if your positioning is not registering, marketers usually consider changing their positioning with a strategy that is more likely to be effective.
Contributed by: Ruth Stanat, President of SIS International Research and research partner of The Blake Project.
Sponsored By: The Brand Positioning Workshop
"
Innovation Is Not A Strategy
Innovation Is Not A Strategy: "
"
As most of you know, Sharper Image, home of innovative products like the Razor scooter, the robotic dog, the Ionic Breeze, the StressEraser and the R2-D2 interactive droid, filed for Chapter 11 bankruptcy. What remains is an important lesson.
Innovation is not a strategy and companies which depend on a constant flow of new, innovative products will someday find themselves in deep trouble. As Sharper Image did.
Every successful company needs a branding strategy, which may or may not include innovation. Yet many marketing gurus have elevated innovation to a point where it is widely perceived as the single, most-important function of a corporation. Witness the raft of recent articles on the subject, including an editorial in my favorite publication with the theme, Forget the recession and innovate.
There’s also the famous Peter Drucker quote, The business enterprise has two and only these two basic functions: marketing and innovation.
I would simplify that quote. A business enterprise has only one basic function: build a brand that can dominate a category. Early on, innovation can help a company build that kind of brand.
• Instant photography and Polaroid.
• The plain-paper copier and Xerox.
• The microprocessor and Intel.
• Wireless email and BlackBerry.
• The athletic shoe and Nike.
But when a category matures, the situation changes. Take the automotive industry. The significant innovations in the auto industry took place decades ago: the V-8 engine, automatic transmission, power steering, air conditioning, seat belts, air bags, etc.
What makes a powerful automobile brand today is not innovation, but a narrow focus on an attribute or a segment of the market. Reliability and Toyota. Driving and BMW. Youth and Scion.
Innovations outside of a brand’s core position can undermine a brand. What did the PT Cruiser do for Chrysler, except to confuse customers? What did the Phaeton do for Volkswagen? What did the Viper do for Dodge?
Dodge is a big truck brand. Does the truck buyer prefer Dodge because it accelerates like a Viper?
Most brands don’t need innovations; they need focus. They need to figure out what they stand for (or what they could stand for) and then what they need to sacrifice to get there.
It’s sacrifice that builds brands, not innovation. Search was a commodity on the Internet, first pioneered by AltaVista and then GoTo.com. AltaVista later added innovations like email, directories, topic boards and comparison-shopping to its home page. GoTo.com changed its name to Overture and turned itself into an innovative syndication service.
It took Google to narrow the focus to search only and in the process build a powerful brand. So what is Google doing lately?
They’re innovating. Google is planning to extend its brand into targeted advertising for radio, television and newspapers. Also, Google software for personal computers and cellphones. The company is even spending hundreds of millions of dollars to innovate in alternative energy sources like solar, geothermal and wind power.
The March 2007 issue of Fast Company features the worlds 50 most innovative companies. No. 1, as you might expect, is Google.
As a matter of fact, the magazine devotes 18 pages to the Google story. Prospective employees are often asked, If you could change the world using Google’s resources, what would you build?
My answer would have been, I’d use the resources to build a second brand, like Toyota did with Lexus, instead of using the resources to sabotage the base brand.
Then there’s Apple, which seems to be an exception to the principle that innovation cannot build a brand. Certainly Apple has been successful because of the widely held belief that all Apple products are highly innovative.
That’s true today, but what about tomorrow? Innovation cannot last forever. Sooner or later Apple is going to run up against a brick wall and find itself fighting a host of competitors who dominate their categories.
Apple doesn't dominate any category, yet manages to compete successfully against Hewlett-Packard and Dell in personal computers. Against Nokia and Motorola in cellphones. Against Sony and Samsung in consumer electronics. Against Microsoft in personal computer operating systems.
Like Sharper Image, that’s a situation that cannot last. As the categories mature, Apple is bound to run out of innovative new ideas.
Innovation, as a corporate strategy, is not limited to high-tech companies. No category has seen as many innovations as the cola category. Over the years, Pepsi-Cola has introduced Pepsi One, Pepsi A.M., Pepsi Kona, Pepsi Light, Pepsi Edge, Pepsi Max, Pepsi XL and Pepsi Blue.
Typical quote: Pepsi Blue has the potential to reinvigorate the cola category, said a company executive. Were convinced innovation is the key to growth.
In the United Kingdom, the company launched Pepsi Raw, the healthy cola, which the marketing director called the most significant innovation from Pepsi U.K. in the last 15 years.
Over at Coca-Cola, the innovations also roll out on a regular basis. The latest is Diet Coke Plus with five essential vitamins and minerals.
Meanwhile, per-capita consumption of cola in the U.S. continues its slow decline as consumers switch to water and other healthier beverages.
In general, a company should spend its innovation money to create new brands, not to salvage existing brands. Why didn’t Coke put the five essential vitamins and minerals into water instead of cola? The company could have saved the $4.1 billion it spent to buy Vitaminwater maker Glaceau.
As the Sharper Image story illustrates, innovation is not a strategy. It’s a tactic that needs to be used in support of a company’s branding strategy. Perhaps the management of the 'New' Sharper Image will embrace this?
Sponsored By: The Brand Positioning Workshop
"
Monday, 7 September 2009
How to improve your car efficiency
How to improve your car efficiency: "
In this instructable i'll give you some tips of how to improve your car efficiency in little things that you never notice.
This is my first instructable, you can bear me with my english, because I'm spanish and I can make some little mistakes
1. Let the car warm for itself while you're driving
Do...
By: jimmytvf"
In this instructable i'll give you some tips of how to improve your car efficiency in little things that you never notice.This is my first instructable, you can bear me with my english, because I'm spanish and I can make some little mistakes
1. Let the car warm for itself while you're driving
Do...
By: jimmytvf"
Sunday, 6 September 2009
Thursday, 3 September 2009
Category First. Brand Second.
Category First. Brand Second.: "
"
A brand is the tip of an iceberg. How big and how deep the iceberg is will determine how powerful the brand is.
The iceberg is the category. If it melts, the brand will melt too.
Take Kodak, for example. Just eight years ago, Interbrand ranked Kodak as the 16th most valuable brand in the world, worth $14.8 billion.
Every year since, the Kodak brand has fallen in both rank and value. In 2008 it fell off Interbrand's Top 100 list worth less than $3.3 billion.
What’s a Kodak? It’s the world’s best film-photography brand. Unfortunately for Kodak, the film-photography iceberg is melting as the world turns digital.
Years ago I was discussing the situation with a Kodak marketing manager. It was no secret then that digital photography was starting to replace film. You’re going to have to launch a second brand, I said.
Not so, the marketing manager replied. The Kodak brand stands for more than just film. It stands for ‘trust’.
Trust Kodak for film photography. Trust Kodak for digital photography. That seems to make sense. Furthermore, Kodak invented the digital camera and introduced the first model, the Kodak DCS, in 1991.
Sense doesn’t matter in marketing. The Kodak name was the tip of the film-photography iceberg. And so far no brand, including Kodak, has managed to climb to the top of the digital-photography iceberg.
As a matter of fact, all the digital camera products (Sony, Nikon, Olympus, Pentax, Casio, Samsung, Panasonic, etc.) are line extensions from other icebergs.
(There’s something wrong when a company called Fujifilm Holdings introduces Fujifilm digital cameras.)
Nobody is thinking category. Everybody is thinking brand. How do we take advantage of our well-known brand to carve out a piece of this new iceberg?
The Eastman Kodak Company has been devastated by its brand-oriented approach. Compare the past with the present.
In the last six years of the 20th century (1995 to 2000) the company had sales of $87.3 billion and net profits after taxes of $6.7 billion, or a 7.7 percent net profit margin.
In the first six years of the 21st century (2001 to 2006), Eastman Kodak had sales of $80.4 billion and managed to lose $296 million. (No wonder the stock market has lost its trust in the Kodak brand.)
The objective of a marketing program is not to build a brand, but to dominate a category. Red Bull dominates the energy-drink category. Starbucks dominates the high-end coffee category. Google dominates the search category. The Body Shop dominates the natural-cosmetics category. Whole Foods dominates the organic-food category. BlackBerry dominates the wireless-email category.
Does it surprise you that all of these relatively recent brand successes (Red Bull, Starbucks, Google, The Body Shop, Whole Foods and BlackBerry) were started by entrepreneurs, not by established companies?
It shouldn’t. Big companies are busy burnishing their brands while entrepreneurs are looking for ways to dominate new categories. Big companies think brands. Entrepreneurs think categories.
Brands are important, but they have value only to the extent they stand for categories. Take Coca-Cola, once the world’s most valuable brand, according to Interbrand. But the value of the Coca-Cola brand has been steadily falling. It was worth $83.8 billion in 1999. Today it’s worth only $67.5 billion. Why is the value of the Coke brand falling?
It’s not because Coca-Cola doesn’t support its keystone brand with advertising. In the U.S. market alone, the company spent $334 million on its Coke brand last year.
The Coke brand is dropping in value because the cola category is losing its share of the soft-drink market. A brand is only valuable to the extent it stands for a category.
The Marlboro brand, according to Interbrand, is worth $21.3 billion. As smoking continues to decline, someday the brand is going to be essentially worthless. (Maybe the nicotine-flavored chewing gum category will make the Marlboro brand worth a few dollars.)
As a category iceberg melts, so does its brand(s). As the minicomputer disappeared, so did the value of the Digital Equipment brand. As the word processor disappeared, so did the value of the Wang brand. As instant photography slowly disappears, so does the value of the Polaroid brand.
Most companies are so brand-oriented their first thought is, ‘How do I save my brand?’ So Digital Equipment launched a line of personal computers with the Digital name, as did Wang with the Wang name. And Polaroid launched a raft of new products including conventional cameras and film, printers, scanners, medical imaging systems, security systems, videotapes, etc. With the Polaroid name, of course.
All for naught. Polaroid went bankrupt in 2001 and through a series of transactions wound up in the hands of the Petters Group in 2005.
That year, when the new chairman was asked what would Polaroid be like in the year 2010, he replied, ‘a consumer electronics leader known for really cool products that offer quality and value.’
There’s no iceberg out there in the consumer ocean named cool products that offer quality and value in consumer electronics. So expect Polaroid’s second reincarnation to be no more successful than its first one.
There are two types of icebergs. The first type is narrow and deep. The second type is broad and shallow. While the second type might offer greater sales potential, the first type offers greater profit potential and greater brand stability.
(Just like a boat with a deep keel is more stable than a boat with a shallow keel.)
Brands that are narrow and deep are almost invulnerable to competitive attacks. Furthermore, they usually are incredibly profitable. Think Rolex in expensive watches, for example. But there are many other brands that fit this description.
• Hellmann’s in mayonnaise.
• Campbell’s in canned soup.
• Heinz in ketchup.
• Orville Redenbacher in popcorn.
• Tabasco in pepper sauce.
• Gatorade in sports drinks.
• Kleenex in tissue.
• WD-40 in slippery.
• Clorox in bleach.
• Ikea in unassembled furniture.
• Visa in credit cards.
Someday your brand’s iceberg might start to melt. So what. You can always look around for a new iceberg to dominate.
With a new brand name, of course.
Sponsored By: The Brand Positioning Workshop
"
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