Archive for April, 2009

Microsoft: the road not taken

Tuesday, April 28th, 2009

Michael Mace has penned a classic analysis of Microsoft’s strategic dead end.

Companies whose sole aim is to lock up customers eventually lock themselves in the same jail.


Apple reveals a key brand principle

Saturday, April 25th, 2009

During Apple’s recent 2Q conference call, COO Tim Cook revealed a key Apple brand principle. It caught my attention because it certainly seems like a bedrock brand principle at Apple, thoroughly infused into Apple’s culture, and into its hardware, software and services.

Brand principles guide business strategy

Midway through the call (at about 21:30 in the podcast), Cook was asked about Apple’s strategy toward the booming Netbook market, where many PC companies are introducing low-cost sub-notebooks and chasing low-margin sales.

Here is how Cook answered that question:

For us, it’s about doing great products. And when I look at what is being sold in the Netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience, and not something that we would put the Mac brand on, quite frankly. And so, it’s not a space as it exists today that we are interested in, nor do we believe that customers in the long term would be interested in. It’s a segment we would choose not to play in.

I’d call that a fairly principled assessment. Cook goes on to say that popular Netbook activities such as web browsing and email can also be done on an iPhone or an iPod Touch, so it’s not like Apple has ignored this market space.

An innovative product that makes a contribution

But then Cook adds a real brand declarative:

And then of course, if we find a way where we can deliver an innovative product that really makes a contribution, then we will do that—and we have some interesting ideas in the space. [Emphasis mine.]

That’s the key brand principle:   . . . deliver an innovative product that really makes a contribution . . ..

Have you heard that kind of statement from Acer, Asus, Dell, HP, Microsoft, Samsung and other Netbook players? I haven’t. It frames sub-notebook technology in a human context, not to be judged by commodity features and price but to be judged by value delivered: how it advances the customer experience, and customers themselves. In that context, commodity-driven products and price-point marketing can only make minor contributions, at best.



How the recession changes marketing and brands

Thursday, April 9th, 2009

A while back I set forth a three-phase history of brands, as an evolution from mark, to media, to means. I noted that the end of the “media” era was at hand, and that the days of mass market advertising and mass market brands, where brands were little more than stylized sales stimulants, were drawing to a close.

The current recession may have accelerated this process.

The recession impacts traditional marketing and brands

David Armano has some great diagrams and analysis of how the recession is upsetting traditional advertising and marketing models. This sea change is also impacting the traditional concept of marketing-driven brands, where brands were often developed to manipulate customer behavior in a credit-fueled economy. That era is also fading into the past.

Brand culture replaces sales culture

In my view, the current recession leaves brands in a perfect position to supersede the sales culture of marketing with a value culture of innovation and personal relationships. This is brand culture instead of sales culture. Instead of being part of a persuasion package, driven by advertising, brands can become a means of personal growth and expression, with brand platforms creatively designed to transform the personal growth of customers into value added back to the brand. A creative culture of brands is a far more productive environment than the often cynical and exploitative selling culture of advertising.

And, as I said previously, everybody wants a brand experience. Nobody wants a marketing experience.

Brands as a context of opportunity

All this means we have to re-think brands, of course–which is the very purpose of this blog. Going forward, brands are re-conceived as a shared context of value between a company and its customers. Their purpose isn’t to sell, but to unlock customer growth, innovation and opportunity. These deliverables are then networked back to the brand, raising its value and expanding its innovation horizons.

Brands as personal applications

What makes this possible is the advent of always-on digital technology. Think of the iPhone, and its successors. Thanks to digital technology, brands can take the form of “applications,” interactive enablers that are personal, portable and persistent. Instead of being creations of mass-market media, brands become enablers, as a second skin.

Goodbye consumer, hello customer

The current recession may also accelerate the end of the “consumer” era. That “era” was invented to justify a relentless sales culture based on ever-expanding credit. Thinking of fellow citizens as “consumers” treats them as little more than sheep with credit, and now the credit is gone. A “consumer” mindset also depersonalizes company innovation, lowering standards and making breakthrough innovation increasingly difficult, if not impossible.

Creating customers, on the other hand, is the springboard of innovation, and of business strategy. And that’s where brands come in.


A grocery extends its brand—to farming

Thursday, April 2nd, 2009

In order to provide better products to its customers, a San Francisco grocery has gone into farming. This new capability totally changes the context of its brand, and its customer relationships. For the products it grows and sells, it is a genuine “farmer’s market.”

Extending the brand chain to the farm

Bi-Rite Market has been a local leader in providing organic produce and artisan products. Having its own farm extends its brand chain into what was once “supplier” territory. It adds unique brand depth and brand trust. Currently, Bi-Rite is able to grow about 5% of the produce it sells. Because Bi-Rite can “grow its own,” when you shop there you are closer to the food you eat. You have one foot on the farm–and that’s a powerful connection.

Deepening the brand engagement

By bringing the farm into the retail experience, Bi-Rite dramatically deepens its brand engagement with customers. Customers now have first-hand access to the grower, enabling them to learn exactly how and where their food was planted, cultivated and harvested. What had been a “retail” engagement is now a fully-shared “food” engagement, from seed to checkout.

Changing the brand game

Bi-Rite states its mission as, “Creating community through food.”  Through its own farms, Bi-Rite is moving to change the brand game in food retail by changing the context of food retail itself. They’re integrating grower and grocer—and customer.

Admittedly, Bi-Rite is a small grocery in one city, but their end-to-end brand is one that large food chains (except perhaps Whole Foods) would find it very hard to match.


How Wall St. broke its brand

Wednesday, April 1st, 2009

Read Eric Dinallo’s enlightening op-ed piece in the Financial Times called How we modernized ourselves into this ice age.

Key brand take-away: what made the US brand of finance the strongest in the world in the last century was its safety, security and transparency. You could trust that system with your money more than any other financial system in the world.

It was regulation that made the brand

Dinallo notes that this brand of trust was born largely of regulation–a system of very strong ground rules for how the game is played. The brand governed the players.

In effect, Wall St. was a brand of regulation–and one of the strongest brands in the world.

But as Dinallo explains, in 2000 regulations were dialed back, leading to a short-term Wall St. boom and then catastrophic trillion dollar losses, and a finance system in tatters.

Taxpayers are now being asked to re-build the brand that Wall St. wrecked.

Interesting issues:

  1. The role of regulation as a builder of brand.
  2. Regulators as brand builders.

Hat tip: Yves Smith.