Brands Create Customers

The New Scientist reports that Philips has applied for a patent to force viewers to watch TV ads. The technology would disable TV controls while the ads played in live or recorded programming.

Philips suggests adding flags to commercial breaks to stop a viewer from changing channels until the adverts are over. The flags could also be recognised by digital video recorders, which would then disable the fast forward control while the ads are playing.

Philips’ patent acknowledges that this may be “greatly resented by viewers” who could initially think their equipment has gone wrong. So it suggests the new system could throw up a warning on screen when it is enforcing advert viewing. The patent also suggests that the system could offer viewers the chance to pay a fee interactively to go back to skipping adverts.

If your brand intent is to make customers less free, insult them in the process, and take their money, your brand is officially DOA.

If Philips were smart they would assign this patent to EFF or Creative Commons on the condition that it only be acted upon to prevent similar idiocies from being pursued. That might snatch a win-win from the mouth of unmitigated disaster.

MySpace is not a “container.” It is the uncontained.

Lesson A: Rupert Murdoch

Lesson B: Tila

Markets and customers are constantly changing, but if you look at traditional brand methods, they really seem frozen in time. Some of their assumptions, concepts and practices date back a hundred years or more, when societies were far less diverse and dynamic than they are today.

Brands are not forever, and brand inertia is no virtue. Brands that cling to the past soon lag behind customers–who are a brand’s real bridge to the future.

Common Weaknesses of Traditional Brand Methods
Traditional brand practices can be handcuffs from the past. There are many ways they can limit a company’s ability to innovate on brand.

This chart identifies some of these weaknesses:

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Strategy: find an underserved market overlooked by the big players, or one that’s too tiny for them to bother. Start small. Focus on improvements in speed to market, simplicity and convenience. Better yet, shape your products to the needs of customers in ever smaller market niches—like those two guys over by the fountain.

Above all, be patient about the new venture’s size, but impatient for profits. (Oil pedals often.)

Starbucks may claim the corners, but you own the streets.

Source: Flickr, hummanna

When you’re building brands you’re building communities. In today’s world this often means creating brand ecosystems far from conventional brand territories, across national borders, and across market boundaries.

More often than not, this also means brands for the “bottom of the pyramid.” These are the four billion individuals that live in undeveloped economies. They had the misfortune to be born into non-industrialized societies, yet they have no shortage of intelligence, courage, ingenuity, and drive.

They’re ready to grow. The question is: how will your brand help them grow, even when they have little money? In other words, how do you create customers for your brands when people can scarcely afford them?

Sachet sizes are not the answer. Low price sub-brands are not the answer. Maybe sales are not the answer. Maybe your brand should think of itself as an NGO, and consider investing in infrastructures that can return your investment as platform strength. Instead of pursuing the conventional price premium, maybe your brand’s future is best served by the human premium.

C.K. Prahalad has analyzed new profit opportunities in developing economies. Here is his list of the top areas where innovation is needed at the bottom of the pyramid:

1. Focus on (quantum jumps in) price performance.
2. Hybrid solutions, blending old and new technology.
3. Scaleable and transportable operations across countries, cultures and languages.
4. Reduced resource intensity: eco-friendly products.
5. Radical product redesign from the beginning: marginal changes to existing Western products will not work.
6. Build logistical and manufacturing infrastructure.
7. Deskill (services) work.
8. Educate (semiliterate) customers in product usage.
9. Products must work in hostile environments: noise, dust, unsanitary conditions, abuse, electric blackouts, water pollution.
10. Adaptable user interface to heterogeneous consumer bases.
11. Distribution methods should be designed to reach both highly dispersed rural markets and highly dense urban markets.
12. Focus on broad architecture, enabling quick and easy incorporation of new features.

Prahalad frames the issue:

What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win–win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable.

Let’s look at some of these terms: “partnering with customers,” “actively engaged,” “innovation,” and “win-win scenarios.” Those sound like brand elements to me. Is there any reason why brands, with their protean social powers, should not lead this effort?

The bottom line
It’s a new context out there at the bottom of the pyramid. Old brands won’t work. New brand concepts are needed.

(Thanks to Vinnie Mirchandani)

Via Metafilter, a YouTube video that shows how to dramatically improve the performance of your regular adhesive bandage.

YouTube (and services like it) will set the pace for brands to come. As customers take more initiative in product creation and re-creation, brands will need a new agility to avoid falling behind the curve.

The breakthrough example of this genre was, of course, the now classic how to fold a shirt.

It usually happens like this: I’m describing how a new approach to brands can be the best thing since sliced bread when someone in the room says: “That sounds great, but my company really doesn’t need a brand. We’re not in retail. We’re not a consumer goods company. We don’t worry about packaging and shelf space and stuff like that.”

There are several ways to address the “brands don’t apply to us” issue. I like to start with the universal form of brand that runs like a dial-tone through all markets, affecting all companies.

“What about your default brand?” I ask. “That’s the brand your market assigns to you. Every company has a default brand, whether they realize it or not.”

I explain that a company’s default brand is called caveat emptor. This brand premise is embedded in potential customers. It’s been driven deep into their minds by society, the market, and by their own experience. It tells them that until they know otherwise, their behavior toward you should be “buyer beware.”

Caveat emptor is the first hurdle you cross as you build your active brand to create customers.

And yes, it is your brand, until you demonstrate otherwise.

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One strategy for product introduction is to unleash your innovation in an edge market, build your brand in a proven customer base, and then go for the big time.

Alas, there is a fine line between innovation at the edge, and, you know, just . . . edge.

Location: outside Skagway, Alaska.

Date: 2003.

Still waiting to see one in the SF Bay Area.