HP, Intel & Nissan – Corporate Celebrity Endorsements

Hewlett Packard (HP), Intel and Nissan are all using celebrity endorsements.  In fact, most major corporations have used celebrities to promote their products.  Why, then, have I mentioned these three companies?  HP Intel and Nissan are unique in that they have started using celebrity endorsements not to promote a specific product, but to improve corporate branding.  Corporate branding is simply creating a strong identity for the organization behind the products. This adds an extra layer of differentiation in order to gain a competitive advantage.  What I find particularly interesting about HP, Intel and Nissan is that they have taken celebrity endorsements to a new level.

They haven’t just made adverts with celebrities, they have gone as far as to ’employ’ them…

Here are the latest appointments to the boards of HP, Intel and Nissan:

  • Jay-Z has joined HP as ‘CEO of Hip-Hop’
  • Will.i.am has landed at job at Intel as ‘Director of Creative Innovation’
  • Usain Bolt has gone from Olympic gold medalist to a ‘Director of Excitement’ at Nissan

These alleged ‘jobs’ are designed to make consumers associate the characteristics of each celebrity with the corporation.  Hence, Nissan‘s selection of Usain Bolt suggests that they would like to be perceived as an exciting company which produces fast cars.

But I am really skeptical of these marketing campaigns for three reasons:
1. Not Cost-Effective – Instead of paying vast sums of money on a celebrity to pretend to work for a company, there are much better ways to develop a strong corporate brand.  For instance, Proctor and Gamble have sponsored Olympic games and produced powerful advertising to boost their corporate image.

2.  Celebrities Lack the Right Skills – Although they may be able to promote the corporation to their fan-base, they are very unlikely to make good employees.  As such, do not expect Will.i.am to actually deliver creative innovations that improves Intel computer chips.  In fact, based on the below video, asking him to explain why he wants to work for Intel appears to be too much to ask for:

3. Little Impact on Customers – For the most part, celebrity endorsements are effective are generating sales of specific products.  This is because consumers see a direct link between the celebrity and the product.  Therefore, classical conditioning happens faster and consumers are more likely to purchase the product if they like/trust the endorser.  But when you swap the product for a corporation, you effectively make the call-to-action less clear.  For example a consumer sees that Jay-Z is CEO of hip-hop for HP, is this supposed to make the consumer aspire to work for HP or buy their products?  If the former, what products are they supposed to buy?

This is an important issue because a celebrity endorser is unlikely to have relevance for every product a firm sells.  Does Jay-Z’s music talent make owning a HP printer cool?  Does Usain Bolt make Nissan Micras exciting? It may work for laptops and sports cars, but not printers or family cars.   Therefore, it is much more likely that a return on investment could be achieved by using a celebrity endorser at a product-level, rather than a corporate-level.

Ultimately, I do think developing a strong corporate brand is a really important marketing strategy.  But using celebrity endorsements to achieve this is a poor tactical decision.

© Josh Blatchford, author of Manifested Marketing 09/11/2013

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Cadbury – Just-Noticeable Difference Marketing

Cadbury is a confectionery brand originating from Birmingham in the United Kingdom.  The firm has been owned by Mondelez International since 2012, after acquiring the brand from Kraft Foods.  Cadbury is most famous for its Dairy Milk Chocolate and its use of purple packaging that has become part of the brand’s identity.  However, did you know that there have been 23 packaging redesigns?  The 23rd wrapper revamp has just been unveiled below:

And for reference, lets take a look at the 22nd (previous) design, introduced in 2008:

Can you spot the difference?

The key changes are:

According to Cadbury‘s Marketing Director, Matthew Williams, the new designs will appear more eye-catching on the shelves and less traditional. The traditional designs had been conflicting with Cadbury‘s competitive positioning as ‘fun’.

While this sounds straight forward, packaging designs are highly risky.  Packaging is the fundamental way consumers identify brands and, for a low involvement product, changing the look can destroy habitual buying behavior if suddenly the product is harder to find.

So how have Cadbury been so successful at redesigns?

This can be explained by the theory of ‘Just-noticeable difference’.  As the name implies, just-noticeable difference is the degree of change in packaging – or branding – that is only just noticeable to consumers.

An easy way to think of it is as continuous improvement of packaging. As shown below, just-noticeable differences eventually add-up to big changes:

Cadbury Just Noticeable Difference

The result is that the packaging never changes too much, and therefore reduces the risk of re-brands.

However, I am not too keen on Cadbury‘s new wrappers.  I particularly do not like the lower case font, which I think is a slightly too noticeable of a change.  On the other hand, if I was not interested in marketing, would I have noticed the difference if I was an unaware consumer?

Let me know what you think about Cadbury‘s latest packaging design in the comments below.  Is it too noticeable, or has it achieved a just-noticeable difference?

© Josh Blatchford, author of Manifested Marketing 07/11/2013

Diet Coke vs Coca-Cola Zero – Brand Positioning

A friend recently asked me what the difference is between Diet Coke and Coca-Cola Zero.  I don’t think he realized it, but this is a very good question from a marketing perspective.

Coca-Cola’s Diet Coke and Coca-Cola Zero both claim to be calorie and sugar free – why then would a firm want to produce almost identical products?

The answer, I believes, in the way that the drink’s have been positioned and differentiated as brands.

‘Positioning’ is how consumers view your product in the market place.  It is often valuable to map out positioning, relative to competitors and your other products in a perceptual map, such as below.

 

 

 

 

 

 

 

 

 

 

 

It is clear from above that Diet Coke and Coca-Cola Zero are viewed as very similar products.  Yet despite the similar positioning, differentiating the two drinks enables Coca-Cola to avoid cannibalizing sales and, in fact, make a profit.

Diet Coke has long been aimed at a Women, with the ‘Diet Coke Break’ advertisements forming a fundamental part of this.

 

Unfortunately for Coca-Cola, it is no longer women that are worried about calories and sugar.  The recognition of the importance of healthy eating means that men now also want a healthier alternative to regular Coca-Cola.  Hence, the firm needed to introduce a new ‘Diet Coke’ with branding and an integrated marketing communications plan to differentiate the product to appeal to men.  This prevents consumers defecting to Pepsi Max or Diet Pepsi.

In contrast to Diet Coke, Coca-Cola Zero is far more masculine, with darker packaging and Lynx-esque (or Axe-esque for US readers) advertising.

 

© Josh Blatchford, author of Manifested Marketing, 22/10/2013

Cadbury – Classical Conditioning

Cadbury is a confectionery brand originating from Birmingham in the United Kingdom.  The firm has been owned by Mondelez International since 2012, after acquiring the brand from Kraft Foods.  Cadbury is most famous for its Dairy Milk Chocolate and its use of purple wrappers that have become synonymous with the firm.  The particular shade of purple Cadbury use is known as Pantone 2865c and is very much part of the brand’s identity; the color has been used since 1905.  However, this could now be subject to change.  Cadbury has lost a legal battle with Nestle, regarding the trademark of the color.  A trademark is a unique design, expression or sign that identifies a product.  Unfortunately for Cadbury, the UK Court of Appeal has ruled that the color purple is not distinctive enough to qualify as a trademark.  Consequently, the color Pantone 2865c can now be used by other confectionery manufacturers.

But why is this such a big problem for Cadbury?

This post will look at how a color becomes associated with a brand and the potential damage the court’s decision can cause Cadbury.

The process of brand identity association can be best explained by Pavlov’s Classical Conditioning theory:

When consumers see the color purple, their main thoughts are of luxury, high quality and royalty: all of these are positive associations with the color.  Before the association with purple, back in the late 19th Century, Cadbury would have been just recognized by consumers as a confectionery manufacturer when presented with their products or advertisements.

In the early 20th Century, Cadbury decided that they wanted their brand to be associated with the same qualities as the color purple.  The brand embarked on a long – albeit highly rewarding – process of pairing the Cadbury brand with purple.  This involves an integrated marketing communications strategy and coordination of the marketing mix to use the color purple as much as possible and in consistent formats over a long period of time – over one hundred years!

As you can see, when it comes to Cadbury the one color any consumer would immediately associate with the brand is purple.  This has been reinforced – or ‘paired’ – over many years to entrench the color into the brand’s identity.  The result of this is that consumers’ responses to Cadbury and purple become merged.  Thus, when exposed to a Cadbury’s chocolate bar or marketing they see and think of purple and then of luxury chocolate; or when consumers are presented with purple, there is a good chance that Cadbury may come to their mind and subsequently luxury chocolate.

If you really want to drill-down into the fine details of how this ‘pairing’ process works (which I do!), then we need the help of something called Balance Theory:

1. Balanced state without pairing

The first triangle shows the consumer’s state of mind before classical conditioning has taken place.  The consumer associates purple and luxury (etc.) to be associated with one another; this is because of societal norms and culture.  However, Cadbury is not considered to be linked with the color purple and thus not luxury either.

2Unbalanced state during pairing process

This second triangle is the consumer’s state of mind during Cadbury’s branding campaign.  At this point in time, the consumer has been exposed to plenty of marketing stimuli containing the color purple.  Hence, the consumer now believes there is a connection with Cadbury and purple – yet still no link with Cadbury and Luxury.  But this is an unbalanced state, which a consumer cannot remain in for a long period of time.  Namely, it is illogical to believe luxury and purple are synonymous, and that Cadbury and purple are associated together, but not Cadbury and luxury.

3. Balanced state after successful pairing

The consumer was exposed to further marketing stimuli to build a stronger bond between Cadbury and purple so that their state of mind becomes so confused they undergo an attitude change.  Therefore, they reconcile the previous ‘unbalance’ by associating Cadbury and luxury together; now all three constructs are related, which is a logical response.

So why is the trademark loss of the purple Pantone 2865c so disastrous?  There are two main reasons:

1. Improved authenticity of copy-cat products – as pictured above, if generic alternatives to Cadbury can now use the exact shade of purple it increases the chances of consumers mistaking the two, therefore Cadbury lose sales.
2. Damage to reputation – if cheaper products start using Pantone 2865c on a mass-scale, this purple may lose its association with luxury.  Instead, it could – in the consumer’s state of mind – become paired with poor quality.  In this case, all of Cadbury’s marketing will back fire on them!

In summary, purple has become associated with Cadbury as a result of consistent and integrated marketing communications.  The ability of generic or cheaper brands to use this exact shade of purple makes it harder to identify Cadbury’s products and potentially damages the Cadbury brand.

© Josh Blatchford, author of Manifested Marketing, 05/10/2013

Mercedes-Benz – Brand Engagement

Mercedes-Benz is a premium, German automobile manufacture.  But as a brand worth, $30,097m – according to Interbrand – chances are you already know that.  What is particularly interesting about the Mercedes-Benz’s brand is that it’s valuation has increased by a rapid 10% in 2012.  So what are Mercedes-Benz doing right?

I think part of the success of the Mercedes-Benz brand is down to engagement; Mercedes-Benz World (pictured above) is a great example of this.  Mercedes-Benz World, is essentially a mash-up of different ways for consumers to interact with the Mercedes-Benz brand.  This includes learning about the brand’s history, taking part in driving experiences and viewing past, present and even future Mercedes-Benz cars.  While being the ‘holy grail’ from a  marketer’s perspective, from the consumers’ perspective the site is considered a great experience – and not just an attempt to brain-wash visitors with Mercedes-Benz advertising.

But what can marketer’s learn from Mercedes-Benz?  How can other brands increase their engagement with consumers?  Here are three key lessons that can be applied to just about any brand:

1)  Get permission!

Perhaps the most important ingredient to successful brand engagement is that consumers must want, and be willing to, interact with a brand.  Mercedes-Benz World is so effective because consumers choose to visit the place.  By doing so they essentially given Mercedes-Benz permission to engage with them.  This extends further: visitors enjoy sitting in the cars and testing them out as much as possible, whether this by a test-drive or track experience.  All this is done without a car salesman; the consumer is in total control of the service encounter.

Hence, successful brand engagement can be achieved by creating compelling content that ‘sells itself’.

2)  Do not rely on social media.

Although social media is an efficient way to connect with consumers, to an extent, I think there has been an over-statement of its effectiveness.  Namely, ‘engagement’ has almost become inter-twined with ‘online’, like engagement can only be achieved by digital technology.  However, it could easily be argued that when consumers physically interact with a brand with experience is more powerful and longer-lasting.

Having a consumer drive a car at Mercedes-Benz World has to have a greater impact than getting a click-through via social media.  This holds true when today consumers may be ‘following’ your brand, but they are also following 100+ other brands…

The lesson here is: social media is a great tool for efficient, low-cost engagement, but cannot rival offline engagement for effectiveness.

3)  Help consumers remember the engagement.

Lastly, Mercedes-Benz World augment the experience with memorabilia and merchandise that is available for sale on-site.  In addition to generating a quantifiable return on investment – via profit margins – physical products help extend the experience when consumers return home.  The amount of visitors likely to be converted into brand advocates should mean there are no shortages of consumers willing to wear a Mercedes-Benz t-shirt.  I cannot think of any other type of advertising medium where the brand is paid for having its logo on display.

Simply, consumers should receive both physical and emotional reminders of their brand engagement.

Earlier I said that these lessons can be applied to almost any brand; and I would like to re-enforce that brand.  Consumers have shown willingness to engage with even low-involvement products: take a look at the success of Cadbury World and M&Ms World.

This demonstrates low-involvement products can become high-involvement through brand engagement – and benefit financially from it.  With regards to finances, brands do not need to break the bank and develop these ‘worlds’ to engage effectively with consumers.  Rather applying the three above rules, where applicable, to a brand strategy can help generate incremental, low-cost engagement.

© Joshua Blatchford, author of Manifested Marketing, 19/05/2013

Coca Cola – Global Marketing Communications

The Coca-Cola brand has been ranked by Interbrand as the world’s most valuable at $77,839 million.  But what has lead to the creation of such a strong brand?

It would be next to impossible to name one reason for this; however, as suggested by Interbrand, the Coca-Cola corporation has managed to consistently strike a balance between leveraging the traditional values associated with the drink and supporting this with innovative marketing campaigns.

Heinz has also grown its brand through a very similar method: strong heritage, augmented by exciting campaigns and new products.

The latest innovation from Coca-Cola is the ‘Share a Coke’ campaign that has recently launched in the United Kingdom (U.K.). The said campaign entails bottles and cans being printed with customer names in place of the traditional Coca-Cola logo.  The aim of this is to primarily to engage consumers in the brand, particularly through social media.

Customisable Coke Can

Regarding social media, consumers are encouraged to share their bottles digitally on Twitter using the hastag ‘ShareACoke’ or through the ‘Share a Coke’ Facebook app.  The latter allows consumers to create their own digital bottle and share it with friends (see below).  Furthermore, kiosks, in town centres and shopping malls, will be created to allow consumers to create their own custom cans or bottles, in the case that their name is not one of the one hundred and fifty being mass-produced.

 

While the same programme has already been a success in Australia and New Zealand, will simple a ‘copy and paste’ of the campaign work for the U.K. market?  I think for the most part, it will.  However, despite  the below video giving the impression of an unqualified success there is not such thing as a perfect campaign…

Some marketers (see comments section) have criticised the campaign for simply being ‘lame’, while others – more constructively – allude to the idea being too novel.  As Coca-Cola Great Britain managing director, Jon Woods, identifies, there is an inherent risk of replacing the brand name.  According to Kotler’s model of a ‘product’, a given product is composed of not just the tangible item that is purchased, but also intangible benefits, such as branding.

Therefore, for this campaign to be a success, the increase in consumer engagement – generated by featuring a name on the product – needs to off-set the decrease in brand-derived benefits – lost via the removal of the ‘Coca-Cola’ logo.

Hence, given the power of a brand, particularly one of this statue, to influence consumer consumer behaviour this truly is a risky decision.

Additionally, I believe that the campaign’s call-to-action is rather weak.  Namely, it is a bit ambiguous whether you are supposed to buy a drink for yourself – with your own name on it – or a drink for a friend – with their name on it.

On this point, there may be a missed opportunity here to try and promote non-digital sharing.  Perhaps there could have been a multi-buy offer to support the campaign?  Such an offer might have re-enforced the encouragement to buy a drink for friends, rather than purely rely on the novelty of the campaign.

One last piece of criticism I have is regarding Jon Woods’ claim that ‘no other brand has gone to this level of personalisation’.  In fact, as you can read here, Starbucks has already used a very similar tactic on a global scale.

Share a Coke Facebook App

I think, simply, the question boils down to: ‘Do people care about having a name on a product?’.  In New Zealand and Australia this was a resounding ‘Yes’. As these markets are similar, the campaign will probably be replicated successful in the U.K.; consumers are starting to share their drinks over Twitter.

There is one final issue I will briefly touch upon.  Namely, will more and more companies start replicating national campaigns from one region into another?  To an extent this might be seen as a cost-effective way to ‘think globally, act locally’ and customise global campaigns more efficiently.

What do you think: will the campaign work and  will more corporations start to replicate national campaigns in several regions?

© Joshua Blatchford, author of Manifested Marketing, 05/05/2013

The Co-Operative Group – Brand Repositioning

The Co-Operative Group (Co-Op) is the UK’s largest mutually-owned business. In such a ‘mutual’ business, the owners of the Co-Op are not shareholders, but consumers and the general public, who can opt to become a member of the company and participate in decision-making.  The Co-Op group has brand-extensions into a wide range of services, including groceries, funeral care, travel, banking and even more.  Having said that – until now – the Co-Op’s strap-line has been ‘Good with food’; this seems rather narrow given the diversity of the firm.

Hence, it is, to an extent, no surprise that the Co-Op has updated their strap-line to reflect the firm’s diversification into wider consumer services.  Unveiled in their new Christmas campaign, the new strap-line is: ‘Here for you for life’.

Unfortunately for the Co-Op, this change has received a mixed-reaction among marketers.  However, this is often the case when any firm changes its logo, strap-line and almost any part of its brand-identity.

Click here, or on the image below to view one of the 20+ Co-Op Christmas TV advertisements.

Given the extent of the Co-Op’s diversification, I do feel the old strap-line – ‘Good with food’ – does not help create a strong corporate brand across the Co-Op’s full-range of services.  Furthermore, as the Co-Op continues to expand with a takeover of 600 Lloyd’s TSB bank branches, the old strap-line is only going to become even more ill-fitting of the mutual group.

Gill Bar, Co-Op’s Chief Marketing Officer, has told Marketing Week that ‘one of the objectives of our advertising is to make the links between the businesses more clear’. Thus, the old strap-line is clearly not in-line with the firm’s wider marketing strategy.

But – and this is a big but – although the old strap-line does not make the links clear between the Co-Op’s businesses, neither does the new strap-line!

Albeit this is down to personal opinion, the new strap-line – ‘Here for you for life’ sounds generic and dull.  Despite having read around this topic a lot, I am constantly having to remind myself what the new strap-line is.

It seems that the Co-Op have gone from a strap-line that is too specific to a new strap-line that is too general.

What I would have suggested to the Co-Op is to have an individual strap-line for each sub-brand that is centered around the  ‘Good with..’ message.  For example:

  • Good with insurance
  • Good with banking
  • Good with funeral care

I believe this would be more memorable and specific than ‘Here for you for life’, while still general  enough to allow the Co-Op to continue to diversify.  But ultimately, my suggestion clearly strengthens the links between the various sub-brands – it may also help consumers identify them as belonging to the Co-Op. And isn’t that what the chief marketing officer is trying to achieve?

The downside of my suggestion is that it is not consumer-focused, which other writers feel is important to build upon to leverage the Co-Op’s strengths as an ethical brand.

Sources and further reading:
Marketing Week – News

Marketing Magazine

The Grocer

Retail Gazette

The Guardian

Marketing Week – Opinion

© Josh Blatchford, author of Manifested Marketing, 05/10/2012

Converse Shoes – Celebrity Endorsement or CSR?

Converse, the American shoe company, may have been founded over 100 years ago,but does this mean that their marketing efforts lack innovation?

Converse have just launched a free-to-download song, ‘DoYaThing’, that is the collaborative work of the Gorillaz, Andree 3000 and James Murphy.  The song was recorded in Converse’s own studio called ‘Converse Rubber Tracks’.  This studio is completely free for up-and-comming artists, who have unlimited, and free, access to the recording facilities.

According to Converse’s Chief Marketing Officer (CMO), Geoff Cottrill, this a way for the company to give-back to the creative consumers who adopted the ‘Chuck Taylor’ shoe, which brought fame and fortune to the company.

Essentially, Converse claims this is Corporate Social Responsibility.  However, one could easily argue it is a very elaborated celebrity endorsement.  Either way, lets take a look at why both strategies make good marketing sense.

Without reading too much like a university lecture, it is interesting to understand how celebrity endorsements work.

It is essentially based on the theory of classical conditioning.  The simplest way to explain it is that using a celebrity endorsement ‘pares’ consumers perceptions of the celebrity to a brand so that they become ‘conditioned’, in the long-run, to associate the brand to the same set of feelings they have for a celebrity idol.  (Google classical conditioning, if you want an overly-complex explaination!)

Having said that, I personally believe that celebrity endorsements are not very effective anymore and they undermine the intelligence of consumers.

But I do think Converse shoes have avoided this trap by making sure the endorsement has a meaningful significance and actually makes sense.  For instance, as well as the song driving traffic to their site, they have allowed the Gorillaz to design some limited edition converses:

Hence, I do think that this use of endorsements to align the brand is more effective than the generic endorsements seen by others.  Namely, perfume and fashion ads that just rope in the latest celebrity that want to make some quick money.

In contrast, one could argue that Converse and music already share common brand values, such as creativity.  Meaning that the collaboration is actually appropriate.  Moreover, they are not forcing musicians to wear Converses for PR coverage.  In fact, musicians want to engage with Converse (as seen by the creation of songs by new artists and shoe designs by Gorillaz); this makes the endorsement seem much authentic.

But is this CSR if musicians and the company are getting so much out of this?

Their CMO is very adamant that it is all about ‘giving back to the community’.  But it is not hard to see that CSR provides the business with better PR and more website traffic.  This raises another question: is right to use CSR for marketing/ use marketing to ‘show-off’ a firms CSR?

Some business writers, such as Carrol, would argue that CSR takes different forms and that Converse are not being philanthropic as they are not simply giving away to a cause – they are instead  integrating profit-making/marketing and CSR together.

However is this integration right?  Micheal Porter believes so: CSR should even be integrated into a firm’s value chain.  But, fundamentalists – in particular Milton Friedman – think that integrating the two is inefficient and advocates a separation of CSR from profit-making.

Whatever your opinions of CSR are, I think ultimately this is a good marketing idea.  Which, as someone who is often skeptical of celebrity endorsements, is something that has surprised me.  I am sorry if this has sounded a lot more academic(ish) than my usual posts – which to be fair are already quite theory-based.  But it is quite nice that a recent topic has come-up in a same week I have learnt about relevant theories.

© Joshua Blatchford, author of Manifested Marketing, 27/02/2012

Domino’s Pizza – Brand Stretching

Domino’s Pizza is the U.K’s largest pizza delivery chain with almost one thousand franchises across the country.  Hitherto, the company has benefited from cash-strapped consumers staying in and ordering a take-away meal, rather than eat out at an expensive restaurant.  This, and the growth of online ordering through their website and smartphone apps, has helped boost sales by 9% this year.  However to keep this momentum rolling, Simon Wallis – marketing director – has decided to introduce gourmet pizzas aimed at the up-market consumer.  This is an example of an upward brand stretch: expanding a brand into more expensive, higher quality product ranges.

But will middle class consumers be prepared to pay for a premium take-away?  Will they even want to purchase from Domino’s Pizza?

The benefits are pretty straight-forward.  By focusing on a more upmarket consumer, the company can charge higher prices and increase their profit margins.  Moreover, the new product range will be great for the company’s reputation; a new product is far more effective than any advertisement, PR or branding at convincing consumers that the firm produces high-quality products.

This is particularly important for Domino’s Pizza, who are infamous for selling greasy pizzas to students and teenagers.  Hence, by launching a new range pizzas – which are easily distinguishable from their old menu, made from healthy ingredients and use thin crusts – they may find their brand image improves as the more affluent market become regular users.

However, brand stretching is a very risky business strategy – just how far can a brand stretch?  That is a question marketers at Domino’s Pizza must have thought long and hard about.  The problem with focusing up-market is that any company still has its old brand image associated with any new product ranges; this is bad news for Domino’s Pizza.  The firm’s brand image has never been good; consider the YouTube scandal a couple of years ago.  Can the firm convince this new market segment that the firm produces luxury pizzas?

The main problem is I am not sure that the new product range of gourmet pizzas is enough to convince the premium market that the firm can produce high-quality pizzas, even if it can.  The mistake I feel Domino’s Pizza have made is that they have focused too heavily on the product.  Although the actual product is the single most important factor in creating a brand image and is often over-looked, I feel that in this case other branding issues have been forgotten about.

For instance, the ‘People’ aspect of a service.  The company has given no thought to the delivery of these new gourmet pizzas.  Hence, when you pay a premium price for your luxury pizza, you will still receive it in a cardboard box from a man who arrived on his scooter, wearing an awful looking company cap.  It is hardly a service that boasts ‘luxury’.  Thus, although the pizzas may be amazing, this is irrelevant if everything else from the brand image to point-of-sale reminds the consumer of standard take-away food.

Ultimately, Domino’s Pizza have been very successful up to now at focusing on the budget range of the market.  They do particularly well at selling to students!  This makes me wonder why this brand stretching is necessary.  All good marketers know that true marketing is about building relationships with customers; these are highly profitable.  Hence, the company would be better off trying to retain their current customers, rather than trying to attract new up-market consumers.

Do you feel Domino’s Pizza have a good brand image?  If so, do you feel this is good enough to move up-market?

© Joshua Blatchford, author of Manifested Marketing, 19/08/2011

HTC – Brand Repositioning

HTC is the world’s third largest mobile phone manufacturer – with Apple in first place and Samsung in second place – according to market share.  Samsung better watch-out, however; HTC have just announced a strategic partnership with ‘Beats by Dr. Dre‘, the premium priced headphone producer.  By doing what could be considered a typical ‘market challenger’ strategy, HTC aim to increase their smartphone market share by targeting the teenage market that is dominated by RIM, who produce the Blackberry.  Hence, a new product range of smartphones that feature Beats audio will be launched later this year.

Although the teenage market is lucrative is it really wise to aim to reposition the brand to appeal to the mass market without acceptance from ‘early adopters’?

HTC essentially hope to steal away teenage blackberry consumers.  However, these users are considered to be the ‘early majority’ in purchasing new technological products.  For instance,  Blackberry was initial targeted at business users – who made up the early adopters – by positioning the full qwerty keyboard phones as being easy to use for sending emails.  It was not until their products had gained acceptance by these early adopters that teenage girls saw the product would also confer benefits for them too.  Namely, the keyboard would be great for instant messaging and texting.

The problem with HTC’s strategy is that they plan to completely avoid appealing to early adopters with their new Beats smartphones.  They are hoping Beats’ own branding – high-quality and fashionable – is strong enough to convince the mass market teenage to immediately purchase the new phones.  I think this is highly optimistic.

The teenage market has already demonstrated that they will not be enticed by a new product easily.  Hence, what I believe HTC should do is to target the audiophile market, who want a stellar sound performance from their mobile phone.  Thus, theoretically, the smartphone would be initial purchased by a few consumers – the innovators and early adopters – then by teenagers – the early majority, who need to see the benefits of a product before making a purchase.  Moreover, by targeting audiophiles, chances are HTC could steal market share away from Apple as well as RIM; consumers who want a mobile phone and an MP3 player in one device would now have an alternative to the iPhone.

Overall, I like the idea of repositioning HTC’s product mix by introducing a new range of music-orientated mobile phones.  The trouble is they are targeting the wrong consumer.  This highlights an oft forgotten fact of marketing: you must successfully target your consumer before trying to position the product in a way that would convince them to make a purchase.  In this case, HTC need to market to early adopters.  Then, through word-of-mouth promotion, can HTC tap into the goldmine that is the mass market.

Do you currently use a Blackberry – if so why? Does HTC’s Beats range appeal to you?

© Joshua Blatchford, author of Manifested Marketing, 12/08/2011

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