Failures and breakthroughs – exposed, reflected, considered

Posts Tagged ‘marketing

Branding, psychology and why we don’t get Apple

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In 1984, Apple launched its Think Different ad. Since then this ad is very much viewed and favorited. However, there seems to be a universal misunderstanding of its message.

Let’s start with Branding 101 before trying to understand the message of Apple. Branding and marketing are two different concepts. Branding has one and one objective only. It aims to establish and cultivate an emotional bond in your heart associated with some specific product or service or process. Marketing rationalizes and appeals to our logic whereas branding caters to our hearts and emotions. Marketing emphasizes quality, features and advantages whereas branding tries to establish an emotional bond, playing on our passions and aspirations or human irrationale, inciting us to act in a desired manner (buy a product/service).

Branding is simple enough to perceive intellectually, but difficult enough for many companies/people, not least because they don’t get the underlying psychology, to implement.  Apple, as well as companies like Nike and Disney, is very good at putting into practice this psychology-based business practice. There is no magic here. It is a business practice of branding  with expected results coming to fruition.

Coming back to Apple’s message in that ad. Many perceive the Apple message to be, “everyone wants to be a rebel.” In my view this is a wrong perception. Rebel is an outlier, an outcast of a society. He/she is challenging every status-quo and convention, Our societies are made of 98%  of the completely opposite stock, i.e. those who care about making living and leading their lives in as predictable and affordable way as possible. About the only time they pay attention to rebels is when a rebel becomes famous, for good or bad reasons.

Costs of being a rebel usually far outweigh advantages. Why then some become rebels and even succeed? Either a combination of character/aspirations/perseverance or purely statistical (for every successful rebel there is many that get thrashed by their societies, friends, etc.).

Successes of those successful ones, rebel or not, appeal to us. We all want to indulge in glories and successes of successful rebels, but we don’t want to shoulder the accompanying costs and challenges.

Apple, because of its “corporate rebel” status has until last few years been an underdog of the corporate world. Its branding has been its forte and that is why its brand value has been so high and still increases. Increasing number of Apple products, not least the notorious iPod, have competitors with in many cases some and in few cases many advantages over their Apple equivalents. We don’t know about those products, some of them with names Sony, Creative, etc., because of Apple’s unsurpassed branding strategy.

Apple’s ad was perfectly in line with its own mentality and branding. What it did was to create a personna of its own brand, associating it with some notorious rebels in science, etc., and by doing so elevating even further our emotional excitement. In this ad, Apple counted itself in ranks with Einstein, Martin Luther King, etc. Apple tried to lure customers to its products as Einstein would have lured students to attend his lectures or read his books.

Apple’s DNA has always been about exclusivity, coolness, simplicity (for customers) and, of course, being a rebel.

Being a rebel is always about bringing forth, advocating and fighting for change, which flies flatly in the face of a society, convention, tradition, or status-quo. We humans, however, are neither comfortable nor happy with change, let alone a dramatic one.

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Written by Hayk

November 22, 2011 at 7:41 pm

what physics can teach about marketing

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TED talk by Dan Cobley

Summary:

  1. a=F/m  (Anderson launched Accenture; Hoover is more than vacuum cleaner; why P&G keeps separate brands).
  2. Δx Δh ≥ 1/2 (McDonalds sells millions, while mothers talk about healthy life to their kids).
  3. You cannot prove a hypothesis through observation, you can only disprove it (scientific method) – BP spent millions building environment-friendly image and than one accident ruined it all; Toyota perceived as reliable and one big recall changed that image; Tiger Woods.
  4. Increasing entropy (2nd law of thermodynamics) – your brand is more and more  dispersed; you can’t fight it; embrace it.

Written by Hayk

September 9, 2011 at 7:12 am

How companies fail in commonsense marketing

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Beware of making five-year projections, unless you’re thinking of leaving the company after four years.

These words belong to the King of Manhattan, David Ogilvy. Perhaps what he meant is not to go without planning, but plan carefully, adjust consistenly and execute relentlessly, all of it driven by commonsense.

Commonsense indicates a certain approach to marketing: figure out your company’s goals, then decide on what and how (communication, advertising and contact) to market goods/services your company offers.  Drayton Bird’s book “Commonsense direct and digital marketing” puts it in the following order:

  1. business mission (what do you want to achieve?)
  2. business objectives (are your goals SMART?)
  3. marketing aims (ex. get new customers)
  4. marketing strategy (ex. how you will market)
  5. communication objectives (ex. tell your existing customers about your new products)
  6. communication strategy (ex. building up a new database of customers via limited offers)
  7. advertising objectives (what do you want to achieve by advertising, a general, mass communication weapon?)
  8. advertising strategy (via channels will you advertise – TV, online, print?)
  9. creative strategy + media strategy (how will you convey your message? + which media and how much?)
  10. contact strategy (points of communication between your company and your customers – when/how you will use selected media to reach out your target?)

You work your way from business mission, answering all relevant questions  to business objectives and so forth. Your end result, after going stage by stage, is a well-conceived and solid marketing plan.

Yet, as simple is this sequence looks, it is regularly and sometimes consistently violated/omitted/ignored. An impressive list of small, medium and big brand and product failures is a testimony to that. Financial and other consideration matter, but marketing represents a big chunk of and reason for failures both for new and existing products/services.

According to one research, fewer than 10% of all new products/services survive past the 3rd year, some of the reasons being wrong assessment of existing markets, insufficient awareness generated by advertising, and wrong target group. Even the largest (and most successful) direct-selling, person-to-person marketing company and manufacturer of health/beauty/homecare products, Amway, has not been immune (Amway’s China failure).

The recurring theme among the most famous product failures is also conspiciously featuring wrong pricing, erroneous market assessment, ambiguous positioning, unclear message and wrong naming.

The underlying logic (and its failure) is notably manifested in the online part of marketing planning and execution. Inappropriate channels, wrong targeting and poor execution are prominent in social media marketing failures.

To conclude, marketing planning and execution errors originate either while not following the inherent commonsense order of marketing mentality (in accordance to the list above) or in insufficient, erroneous, unclear research, planning and implementation of one or more stages of marketing.

Commonsense is indeed a sum-total of logical thinking, gut feeling and intuition. Unless we use commonsense in our marketing efforts, we will be a man Nietzsche had in mind when remarking:

To a man with a hammer everything looks like a nail.

Top 4 treats of failing business models

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Many entrepreneurs and businessmen, especially those tech-savvy (co-) founders whose rise is almost as accidental as that of Facebook, do not know or give enough consideration to business model of their businesses.  Small businesses and startups are especially prone to this problem, as they focus on (new) product releases and never pause to assess and review their businesses or just vow for a “marketplace” business model.  The results? Many startups created but most of them fail without achieving any traction nor causing any significant impact.

What is needed is a paradigm shift. Every business venture/initiative needs to have a business model in a short- or long-term. The model expands on how the parts of the business work together to create profit and (eventually/ideally) growth. While the proven razor-and-blades model has been working and stil lworks for many a business, many startups and small businesses grow exponentially by embracing innovative business models for such wide and overcrowded markets as online gaming or discount markets.

What is needed is creation of a business model around a thick value. A flawed/misconceived business model might have a number of shortcomings, including:

  1. un-Sustainable – if the business is built on momentary or not well-thought-out concept/trend, it cannot be sustained for long, only working (and perhaps providing profits in a short time span).
  2. un-Scalable – This is usually the result of business short-sight when first launching the business. User-base, marketing or demand growth can all lead to decreasing efficiencies/quality of the product.  ‘How long could my business continue to operate successfully without me?’ If the answer is not long then it is to dependent on you. The result is your business can not be scaled up beyond your own personal efforts.
  3. un-Profitable – Companies might grow but not become profitable, the eventual side-effect of any sustainable and successful business. There is a deep need of understand the concept of a profit model.
  4. un-Valuable – Is the business creating a real, thick value? Is it addressing an (un-addressed) need in a market? Is it addressing an (addressed) need in a more innovative, cheaper and sustainable manner? If NO for any of the two, than perhaps it is time to re-invent your business.

Stop. RE-view, RE-think and RE-assess your business. Do you want to be in it? If yes, can you pinpoint to a value that it creates and the business model that it works?

Written by Hayk

October 17, 2010 at 2:34 pm

Attempt to market America

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In the wake of 9/11 and subsequent invasion of Afghanistan, image of America became a rallying call of action for all anti-American elements abroad. When the White House finally decided it was time to address the rising tides of anti-Americanism around the world, it didn’t look for a seasoned diplomat. Instead, in keeping with the Bush administration’s neoconservative philosophy favoring private over public sector (Dick Cheney and Colin Powell being the other two neocons in the Bush Administration), it hired one of the then top brand managers in America.

From October 2001, as Undersecretary of State for Public Diplomacy and Public Affairs, Charlotte Beers‘ assignment was not to improve relations with other countries but rather to perform an overhaul of the American image abroad. A recipient of prestigious “Legend in Leadership Award” from the Chief Executive Leadership Institute of the Yale School of Management, Beers had no previous diplomatic experience but had held the top job at both the J. Walter Thompson and Ogilvy & Mather ad agencies.

The appointment of an inexperienced (in diplomacy and state politics) person to this post understandably raised some criticism, but the then Secretary of State Colin Powell shrugged it off. “There is nothing wrong with getting somebody who knows how to sell something. We are selling a product. We need someone who can rebrand American foreign policy, rebrand diplomacy.” “The whole idea of building a brand is to create a relationship between the product and its user,” she explained. “We’re going to have to communicate the intangible assets of the United States — things like our belief system and our values.”

From her point of view the tattered international image of America was little more than a communication problem. In fact, the problem was just the opposite: America’s marketing of itself has been too effective. School children could recite its claims to democracy, liberty and equal opportunity as readily as they could associate Nike with athletic prowess. And they expected the US to live up to its claims. And here lied the real problem. Results of economic and political decisions coming from Washington didn’t seem to correspond to the message and promises so staunchly promoted by American politicians. It was like a false ad, where promised qualities and real qualities of a product are different. America’s problem was not with its brand— which could scarcely be stronger — but with its product.

In the corporate world, once a “brand identity” is settled upon by the head office, it is enforced with military precision throughout a company’s operations. The brand identity may be tailored to accommodate local language and cultural preferences, but its core features — vision, aesthetic, message — remain unchanged. At its core, branding is about rigorously controlled one-way messages prevented to being turned into a social dialogue.

America already demands too much “consistency and discipline” from other nations; that beneath its stated commitment to democracy and sovereignty, it is deeply intolerant of deviations from the economic model known as the “the Washington Consensus.” Whether these policies, so beneficial to foreign investors, are enforced by the Washington-based IMF or through international trade agreements, critics generally feel that the world is already too influenced by America’s brand of governance and American brands.

There is another reason to be wary of mixing the logic of branding with the practice of governance. When companies try to implement global image consistency, they look like generic franchises. When governments do the same, they look authoritarian. It’s no coincidence that political leaders most preoccupied with branding themselves and their parties were also allergic to democracy and diversity. Think Mao and Hitler. Historically, this has been the ugly flip side of politicians striving for consistency of brand: censored information, state controlled media, reeducation camps, purging of dissidents, etc.

Democracy can be described as a confluence of different ideas. It is characterized by diversity of means, approaches and ends. The task was not only futile but dangerous: brand consistency and true human diversity are antithetical, one seeks sameness, the other celebrates difference, one fears all unscripted messages, the other embraces debate and dissent.

Little less than two years into her job, Beers stepped down. Indeed, if anything, prospects of improvement looked as gloomy as ever for this was when Blair and Bush were putting final touches for their next target — Iraq.

Written by Hayk

September 15, 2008 at 1:29 pm