Archive for the ‘Uncategorized’ Category

Is Toyota’s “Brand Insulation Effect” Protecting Its Sales?

March 9, 2010

In a recent study released by Rice University, of the Toyota faithful, “Toyota owners maintained a more positive view of the company than their counterparts.” Furthermore the survey found that…

“When Toyota owners were asked to rate on the same 0-to-10 scale whether they would consider Toyota if they were to buy a new vehicle today, their ratings averaged an 8, whereas other automobile owners’ ratings averaged a 4.”

The study’s author, Vikas Mittal, the J. Hugh Liedtke Professor of Marketing at Rice, and co-authors Rajan Sambandam, chief research officer at TRC, and Utpal Dholakia, associate professor of marketing at Rice, termed this a “brand insulation effect” built upon previous positive customer experience with the company.

If this is true, (and it remains to see if future customer actions support their stated intentions,) then it bodes well for companies that perform consistently over the long haul. Tylenol faced a similar challenge when they recalled millions of dollars of products off store shelves from a product tampering incident. Tylenol’s share reportedly dropped from 35% down to 8%, but quickly rebounded within a year. Consumers came back to Tylenol due in large part to their proactive response and proven history.

It will be interesting to watch Toyota and see if their brand image withstands this withering assault of news reports. What are your thoughts? Is there a “brand insulation effect?” Will it work for Toyota, or is this a case of too little, too late?

Has the Brand Bubble Finally Burst?

March 2, 2010

Traditional thinking is that consumers will pay a premium for a brand name vs. an unbranded or store brand product. That thinking has faced a stiff challenge in the face of the recent economic downturn and changes in consumer sentiment. This is especially true of luxury brands. Witness the recent demise of Hummer, a once iconic symbol of status and wealth — now the object of derision and the poster child of conspicuous consumption.

In this “new economy”, a brand name must deliver more than familiarity, more than fame, more than fancy packaging. These tried and true methods have worked in better times, based in part of the theory that a known evil is better than an unknown evil. In other words, most people are reluctant to try something different and unproven. And that’s part of the problem. Big brands have banked on this comfortable “I-know-you, you-know-me” relationship. But with pressure on the wallet, consumers are reaching out for less expensive choices. Wal-Mart, for example, recently took Hefty and Glad bags off the shelves in favor of its own store brands. To add to the sticky mess, well-established brands have created “brand children” or brand extensions, which have only added to the crowded clutter on the shelves. Just how many varieties of Cheerios can the consumer stomach? Frosted? Mulit-grain? Honey Nut? All this in an attempt to increase market share.

What has been lost in all of this is the basics of branding, which involves creating a unique marketing position, a point of differentiation. Brands need to get back to the basics of being better, not just famous. Apple has done a great job of this with their iPod. Imagine giving your kid a knock off mp3 player for a birthday present. They have invested in their industrial design, intuitive use, and ease of the iTunes interface. There are any number of mp3 players with more memory and perhaps even more functionality, but it’s not enough to unseat the iPod.

But this differentiation requires an investment. It means understanding what your products and services really deliver to your customers, benefits they don’t get from competitive products. Do you know the answer to that question? Are there any real differences? Or are you relying on name recognition alone to carry the day? It might even require rolling up the sleeves and creating something “new and improved!”

The easy ride is over, and probably will be for some time. Good. It means getting back to what great brands should have been doing all along… improving, innovating and enhancing the customer experience.

Strategic Branding: Has Apple Found Its New “Pivot Point?”

February 3, 2010

In my branding presentations, I frequently discuss the importance of knowing your company’s “pivot point,” the common thread that runs through all your products and service offerings. Without that knowledge, companies tend to behave as commodities, and eventually get priced that way.

In the big picture, Apple has succeeded in walking to the beat of a different drummer. They have never really behaved as a “computer company,” although until just a year ago, that was their official name… Apple Computer.

At the iPad unveiling this past week, Steve Job reported that Apple was now “the world’s largest mobile device company.” Could he have just articulated their new pivot point?

Let’s look…

Are most of their products mobile?

Considering the number of laptops, iPods and iPhones they sell (in contrast to the big towers) then it would be safe to say yes.

Are they a “device company?”

That certainly takes them out of the limiting sphere of computer manufacturer.

Are they the largest?

Well, perhaps, (though Nokia might have an issue with that statement.)

My best shot at Apple’s pivot point would be to call them a “digital lifestyle provider.” That would expand them beyond the functionality and equipment positioning and allow them to incorporate music, video and e-reader services.

In pressing times, it’s more important than ever to differentiate your company, and its products and services. So before making your next move, have you thought about your pivot point? In Apple’s case, they might have just found their “core” strength…

Branding Basics… Should you “Google-ize” Your Logo for the Holidays?

December 15, 2009

The mantra in branding has always been consistency, consistency, consistency. But of late, I’ve been asked about logo updates, thanks in large part to the ever changing look of the iconic Google logo. Google will update their brand image for holidays, important events and historic anniversaries. Recently they had the Sesame Street characters adorning their famed font face. So is this something your company should undertake?

The answer is maybe yes… and most likely no.

The maybe yes answer depends on the amount of repeat customers you have. If your client base is a die-hard following of loyal customers, then it might be beneficial to dress up your logo (assuming it’s done tastefully) to create a little flair. And on a web site, it demonstrates that someone is paying attention, making updates, and taking action to keep things current.

The answer is most likely no, if you have an ever changing client base, or are continually reaching out to new customers. If they haven’t seen the original logo, how are they going to “get it” when you make a twist on it? It’s like telling a joke that plays off another joke. You have to know the first one to get the second one. And it’s easy to overestimate how well established your logo has become, (mainly because you see it everyday.)

So if you have a well known, iconic brand that serves a steady audience, then by all means have some fun and “Google-ize” your logo for the holidays. But for most businesses, it’s better to stay the course and build steady brand awareness.