Who has the stronger brand?

AT&T: iPhone greases branding wheel

AT&T is banking on the iPhone as the ticket to saving its rocky switch from Cingular to AT&T, according to observers of the provider's latest investment gathering. Analysts from UBS Investment Research have noted that AT&T blames at least some of its poor results for the opening quarter of 2007 on the awkwardness of the change in name, which has many users still assuming the Cingular title. The Apple device is seen by AT&T as a "branding event" that will cement the name in people's minds, says UBS.

Contributing to the issue has been a reluctance to brand phones with the new label. The carrier has so far continued to label even higher-profile phones with its new name, showing some phones such as the LG CU500v with AT&T branding while releasing them as Cingular devices.

Also gleaned from the meeting is the belief that initial announcements by Apple and AT&T on the lack of subsidies are correct: the iPhone isn't likely to be discounted by AT&T and may even turn a small profit for the company at retail, the report notes. Apple's portion of the sale, however, might actually hurt AT&T with existing subscribers since most of the profit would only come from service plans for new users.

Though full details of the contract between AT&T and Apple remain a secret, UBS believes such terms could create a genuine problem for the former unless the profit-taking changes for customers trading up versus new subscribers. The deal might also have some built-in flexibility that could alter profit based on the split between new and old subscribers.

Brandjacking on the Web

I thought this was an interesting article, particularly since even today, much of the emphasis on brand monitoring is still geared towards more traditional methods of control, with relatively little said about online activities. In my opinion, however, firms really need to focus on this emerging threat, especially for companies that rely on the internet as a major acquisition/ retention channel. Additionally, "controversial" brands have much to lose if intelligent objectors can capitalize on similar sounding domain names to promote their own anti-brand agenda at the detriment of the victim company. The article below, sheds further light on the issue.

"Brandjacking" is on the rise
Do you know how your brand is being used online? According to a new report called the Brandjacking Index, many brands are being hijacked online - and companies don't even know about it.
Bizreport.com, May 2, 2007 by Kristina Knight

Cybersquatting is the leading cause of brand manipulation. By buying relevant domain names, cybersquatters abuse the brand image for their own gain. Phishing attacks, click fraud and similar tactics are used to make money or steal information.
The Brandjacking Index tracked 25 popular brands on 134 million public online records in March. The report authors found more than 285,000 instances of cybersquatting during the four-week study period.
Frederick Felman, MarkMonitor's chief marketing officer, said (in an interview with Reuters) that cybersquatting is a starting point for other forms of abuse, including search marketing tricks designed to pull traffic away from reputable Web sites. "Brand-holders face a double whammy: The volume of these abuses is significant, while abusers are becoming alarmingly savvy marketers," he said.
In another report, researchers found that phishing attacks increase 104% between March 2006 and March 2007.
What can a business, online or offline, do to protect themselves?
Stay on top of where your brand and trademarks are being used with a brand tracker like this one from ACNielsen, and invest in an email authentication program for email campaigns.

Branding Lessons From GM: What Not To Do

I thought that this was interesting in light of GM deteriorating performance.




New York -
Toyota is about to pass General Motors' seven-decade reign as the world's largest car producer by volume. That’s right 70 years of leadership coming to an end. Today, Toyota has America’s best selling car, the Camry, and GM is struggling to make dwindling brands, such as Buick and Pontiac, mean something to consumers.
When something like this happens to a company of this stature, it's important to discover why this occurred. These are important lessons as George Santayana warned, "Those who cannot remember the past are condemned to repeat it." I mentioned the GM brand schizophrenia problem in an earlier column. Here’s a more detailed analysis of what went wrong.
When Alfred Sloan joined GM in 1924 as operating vice president, he inherited what he called an "irrational product line"--one that had no guiding policy for the marketing of its many brands. The company's only objective was to sell the cars. The brands stole volume from each other and, with the exception of Buick and Cadillac, all lost money.
Sloan immediately realized that GM had too many models and too much duplication and lacked a product policy. In one of the earliest examples of market segmentation, he reduced GM’s offerings to five models, separated them by price grades and emphasized individual brand image to entice customers into the GM family and move them up.
These distinct and strong brands allowed GM to capture more than 57% of the U.S. market by 1955. Aware that pursuing more market share could lead to antitrust actions and the threat of a breakup, GM fatefully shifted its strategy from making better cars to making more and more money from a relatively stable number of sales.
Nothing dramatized this new direction more than the concept of "badge engineering," or selling identical vehicles under different model names. This invention of GM's finance staff was a way to increase profits through uniformity, by, among other things, making parts interchangeable. Slowly but surely, the different brands lost the individual personalities that the company had so painstakingly established. At the same time, to improve their numbers (and bonuses), the GM divisions began to push the boundaries of the product policies that defined their brands: Chevrolet went up in price with fancier models, as did Pontiac. Buick and Oldsmobile offered cheaper versions. In time, GM was once again producing multiple cars of different brands that both looked and were priced alike. For GM, it was 1921 all over again, with brands that look alike and are priced alike.
Like BMW, Toyota (nyse: TM - news - people ) pushed one brand in many forms. All these cars benefited by sharing in one powerful differentiating idea: reliability. And when they went up into the super-premium category, it became a Lexus with all "Toyota" identity carefully eliminated. Also, they are quick to invest in new innovations such as the hybrid (Prius) and, coming soon, the wheelchair friendly Porte, aimed at Japan’s elderly population.
The bottom line is that in the branding business, less is more.
A successful brand has to stand for something. And the more variations to attach to it, the more you risk standing for nothing. This is especially true when what you add actually clashes with your perception. If Altira's (nyse: MO - news - people ) Marlboro stands for cowboys out in Marlboro Country, how can it sell Marlboro Menthol or Marlboro Ultra Light cigarettes? Real cowboys don’t smoke Menthols or Ultra Lights.
If Coca-Cola (nyse: KO - news - people ) is the company that invented cola and the owner of that special formula, how can it be the "Real Thing" when the company offers a parade of new things including one called "Zero"? Why change that unique formula?
Should Wal-Mart Stores (nyse: WMT - news - people ) try to sell more up-market products to compete with Target (nyse: TGT - news - people )? No, that's not its market.
Should Porsche risk its sports car image by selling SUVs? No, it's an iconic sports car brand.
Should Dell (nasdaq: DELL - news - people ) try to sell home electronics to compete with the Japanese and Koreans in this category? No, it sells computers directly to businesses.
Until companies come to grips with the simple fact that they don’t really have an inordinate need to grow, but an inordinate desire to grow (because of Wall Street), bad things will continue to happen. Slowly but surely, brands will lose their meaning as they try to become more.
What is happening to General Motors (nyse: GM - news - people ) should be a lesson to all companies no matter how big and powerful they are. You cannot be everything for everybody, and the more you try, the more you risk sinking the ship.
As I say to many senior executives as a reminder of what can happen, put a simple sign on the wall that reads: Remember the Titanic.
With more than 40 years of experience in advertising and marketing, Jack Trout is the acclaimed author of many marketing classics, including Positioning: The Battle for Your Mind , Marketing Warfare , The 22 Immutable Laws of Marketing , Differentiate or Die , Big Brands, Big Trouble , A Genie's Wisdom and his latest, Trout on Strategy . He is president of marketing consultancy Trout & Partners and has consulted for such companies as AT&T, IBM, Southwest Airlines, Merck, Procter & Gamble and others. Recognized as one of the world's foremost marketing strategists, Trout is the originator of "Positioning" and other important concepts in marketing strategy.
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It's All About The Green

…let’s hope it lasts

http://www.brandweek.com/brandweek/images/pdf/BrandweekGreen.pdf

Brandweek recently ran this piece on the rise of eco-friendly brands. The idealist in me delights in seeing major corporations jumping on the eco-bandwagon while the skeptic in me questions their motives. Are they in it for the long haul or is this a short-term brand strategy which enables them to get "their share" of dollars from the socially-responsible consumer? It would be wonderful if this truly represented a culture shift but I fear that it may turn out to be just another flash-in-the-pan fad.

When big brands enter green territory they not only serve a target market that is hungry for eco-friendly products, they can also help to raise awareness of environmental issues in the minds of consumers that haven’t put much thought into the concept of sustainable living. My advice to them (the corporations) is to tread lightly for if they fail to abide by the very principles they claim to espouse, they will abuse consumer trust and may suffer from negative publicity and consumer backlash.

Sam's vs Costco

Today, we talked about more and more people go to warehouse club chains, and those channels improve the sales of cK jeans. It seems that warehouse club chains help those brandings a lot to increase their sales.

However, there is an interesting thought from this article. Do warehouse club chains increase the sales of brandings, or brandings bring customers to their stores?

In this article, some customers said that the reason they shops at Costco is because they can buy high-end products in cheaper price. Warehouse club chains love to sell high-end products in cheaper price to attract more customers.

Therefore, my point is that not only warehouse club chains increase the sales of branding products, but those branding products also create profit and bring customers to warehouse club chains. That's why those results about the number of customers shop at warehouse club chains is more than before.

Hence, if those high-end products do not sell their products in warehouse club chains, will people still want to shop at warehouse club chains ? Will customers go back to departments to buy high-end products? I think it is interesting to think about it.

You can read the whole article from the link
http://www.wcpo.com/content/news

Brand Stewardship

I interned at an famous PR firm last summer, and its 360 brand stewardship help clients to manage their brand stewardship. This is a perspective from an agency to help their brand management. It might be useful for those who are interested in brand management at an agency.



The Brand InfluencersIf you have been involved in branding a company, a product, a service or even a public education program during the last decade, you have quickly come to realize Figure 1, below, is a simplistic way of looking at brand communications. Frankly I'm not sure this model was ever in sync with reality, but it was the way branding was viewed up until the late 80s and by some into the mid 90s. It was a simple world back then—or at least we thought it was. A company created a product's brand image, brand attribute and brand promise. Then it communicated the brand—usually through advertising—directly to each of its target audiences.

Figure 1 Mass Communication Transmission Model
Marketers slowly came to realize that "the company" was not the only holder to the "brand key." Marketers who continued to rely on the Transmission Model fell behind. We saw products like Levi lose their foothold on the blue jean market partly because there was more competition in the marketplace, but also because they did not realize other influencers were affecting the buying habits and brand loyalty of their traditional customers. More direct advertising wasn't the answer to Levi's troubles in the 80s and 90s, what Levi's needed was to identify who (in addition to the company itself) was influencing their marketplace and more importantly their products' image.
Smart marketers quickly embraced the Network Marketing model of brand building (Figure 2) in the late 80s. But when they did, they realized that the hard work had only just begun. Once they agreed that there are multiple influencers who affect a brand's position in the marketplace, they realized it was vitally important to identify each influencer and communications build programs to reach them—traditional advertising was only one tool and not always the most effective way to influence a specific target.

Figure 2 Network Marketing Interconnection
Figure 2 is actually a simplistic 2-dimensional model of the interconnection between brand influencers. The model should actually be 3-dimensional and include arrows between and among all the target audiences—they influence each other and in turn influence the perception of the brand. There is no beginning and no end. Welcome to the world of Ogilvy PR's 360° Brand Stewardship®. Ogilvy PR developed 360° Brand Stewardship® to identify all the potential brand influencers and create a process for communicating to each of them, not just through advertising but by the most powerful channel available depending on the characteristics of the specific target. The premise of the Ogilvy PR process is that the brand must actually surround the target audience through every channel and influencer appropriate whether that includes advertising, direct mail, the Internet, public relations, community relations, events and promotions, word of mouth or product placement.
If you are a brand manager, how do you start the process of identifying all the brand influencers, how they communicate and how you can communicate with them? Charting it out on paper is the first step. Listening closely to your customer and their customers is also important. Understanding the competitive, consumer and cultural context of your product is absolutely essential. And remember, just when you think you understand each and every influencer—the marketplace dynamics will likely pull the rug out from under you so don't become complacent.
Smart brand stewards keep an influencer chart on the corner of their desk constantly updating it and making notes in the margins. There is rarely a week that goes by in which they don't hear an insight or uncover a piece of research worth noting.

Your communications partner should be doing the same thing no matter which marketing discipline they call home. At Ogilvy PR, we start from a brand-neutral perspective and then combine the right messages, with the right messenger and the appropriate communications channels to reach brand influencers and ultimately our target audience. Today, successful brands are not constructed, they are nurtured, massaged and painstakingly molded, and refined over time.

Budweiser Faddish Drink Catches Attention...

They've got the Buzz through the media, but will the 2 ounce energy drink malted beverage shot from Budweiser stick or are they riding the health, energy kick wave? You make the call is it a Fad, could it be a trend, or even higher?

Managing a Brand through Tragedy

We were all devastated to learn of the tragedy that took place at Virginia Tech on April 16, 2007. It will be a day when most of us remember what we were doing and who we were with when we heard. As the school and its community move on, they are all in our thoughts and prayers.

As I was watching all the news coverage of the shootings, I thought to myself, when all of this settles down, how does the leadership at Virginia Tech ensure their school and their brand are not defined by this one tragic moment in a long history of prestigious achievements? Throughout the semester we have learned how to create brand meanings, develop them and guide them through the brand life cycle via good stewardship. Can we apply any of these techniques to such a dramatic situation? I think so.

The group presentation on crisis management provides some insight on dealing with a situation like this (copied from the team's presentation on crisis management):
1. Respect the role of the media
2. Communicate, communicate, communicate
3. Take responsibility
4. Centralize information
5. Establish a crisis team
6. “Plan for the worst; hope for the best”
7. Communicate with employees
8. Use third parties to speak on your behalf
9. Use research to determine responses
10. Create a website

I think Virginia Tech can (and has been) following these same steps to ensure they are taking care of their community as well as managing the perceptions of those outside the community. For example, they have taken the following steps:

1. Engaged the media to help distribute information as well as to showcase their response to the tragedy.
2. Maintained a steady stream of communication as information became available about the events as well as the University's plans.
3. Created a comprehensive website for those within the Virginia Tech community as well as those just seeking information out of curiosity or concern.
4. Established a crisis team.
5. Provided options for the current students to finish the semester in a way they were most comfortable given the extreme circumstances.

The reality is Virginia Tech is very much like any other business which relies on students attendance to survive and thrive. If students and faculty are not comfortable at the school based on the University's response to such a tragedy, the school will suffer on many levels. Given the dramatic situation, there was, and will continue to be, scrutiny by the media on how the situation is handled and Virginia Tech can use this opportunity to build their brand rather than allowing the situation to detract from it.

A Reason to Believe: Finding the dramatic difference in retail brand revitalization

http://www.brandchannel.com/papers_review.asp?sp_id=1287

This is an interesting article by a retail brand consultant regarding the steps needed for retailers to succeed in the brand revitalization process, and why many retailers fail at it. Many retailers fail because the changes they implemented were superficial, instead of making fundamental changes to address the fact that the brand has lost its relevance. This is the situation the Gap finds itself in currently, as we discussed in class earlier.

The author points out that brand revitalization is often necessary once a company has reached the point where its perception of its brand differs significantly from the customer's perception. This forces the company to undergo a revitalization. The author also points out the importance of the employees in this process - getting employee buy-in is crucial to the success of the revitalization. Chances are that if the employees feel strongly about the new direction of the company, the changes will take hold and be more than just superficial.

The author finishes with an example of a company (REI) that implemented a successful brand revitalization.

Barbie goes from Vinyl to Virtual

Last Monday our team talked about brand revitalization. Now, Mattel is going to put the Barbie onto the internet: a $60 device that connects girls to a new Website, BarvieGirls.com. Mattel is hoping that Barbie Girls will invigorate the brand and serve as case study in how a 1950s-era business finds its place in the Digital Age.

In my point of view, Barbie is worth revitalizing based on the revitalization requirements scorecard: It is premium position, slightly under-advertised, wildly distributed, and has long-held heritage and distinct point of view. Besides, the aging cause for them is the offer, since kids right now spend lots of time on the internet and thus the traditional Barbie became a little obsolete.

But, how Mattel can turn this into cold, hard cash? The Company will sell snap-on accessories to dress up the Barbie Girls device, much the way people customize cell phones and iPods. But unlike some gaming companies, Mattel won’t charge real money for virtual clothes and accessories; its goal is still to well dolls, not run a Web business.

Reference Article:http://www.businessweek.com/magazine/content/07_19/b4033084.htm?campaign_id=rss_daily

BarbieGirls.com:http://www.barbiegirls.com/

Brand Steward/ Non-profit

Interesting article on the role of branding and brand stewardship in organizations.

http://foundationcenter.org/pnd/npodesign/npodesign_print.jhtml;jsessionid=2RM4NVSCNGFK1TQRSI4CGXD5AAAACI2F?id=44800019

Absolute Brand Maneuvers

As a follow up on the J&B case, check out this article on Absolute and how it's brand managers are trying to keep it's brand fresh in the minds of consumers. In an attempt to recreate it's double digit growth that resulted from the Absolute campaign in the 80's and 90's, the company's brand managers are asking customers to imagine an "Absolute world".

"On Planet Absolut, for instance, men can get pregnant, the Curse of the Billy Goat is lifted from the hapless Chicago Cubs and the garish billboards in Times Square are replaced by masterpiece paintings. Lying leaders are exposed by their Pinocchio noses, protesters and the police wage street fights with feather pillows, nice Manhattan apartments cost $300 a month and it takes only one exercise lap in a pool for a fatty to become a hottie."

Testing what's hot in the cradle of cool

Remember last time we were talking about cool hunting? I just read an article about cool hunting in Tokyo, Japan.

Right now, fashion houses are trying out new products on the teenyboppers of Tokyo. Some Western companies have signed on with local partners who can better read the Japanese market.

"I can see something happen in Tokyo and watch the ripple effect across the Pacific to New York and then watch as it goes back to L.A. ," says Kiester, who travels to the Japanese capital four times a year in search of inspiration.

Ohio-based Abercrombie & Fitch and Sweden's H&M plan to set up shop in Tokyo in 2008, while Spain's Zara is expected to double its store acount to 50 over the new three years in Japan.

However, sometimes, though, all those Tokyo teenagers can be a bit too fashion-forward. Last year LeSportsac launched a range of bags in Japan with a pattern featuring brightly colored button mushrooms, a motif that figures prominently in the kawaii (Japanese for "cute") genre that includes icons such as Hello Kitty. Although the mushroom bags were a hit in Japan, Kiester has been reluctant to introduce them in the U.S. "It's too 1970s. Too psychedelic," she says. "We weren't ready for that at home."


Reference:
http://www.businessweek.com/magazine/content/07_19/b4033073.htm?chan=globalbiz_asia+index+page_top+stories

BenQ to spin off BenQ, change name

BenQ Corporation consists of three main business groups — Computing Products, Digital Media and Mobile Business. Although these business groups encompass a broad range of products, each retains a focus on providing consumer-oriented solutions designed especially for the digital lifestyle. 2004 revenues exceeded US$5.1 billion dollars.

In order to become an international brand, BenQ purchased Siemens in 2005 June. BenQ got the patent skill to produce 2G and 3G from Siemens. Moreover, BenQ could use brand name Siemens as BenQ-Siemens to launch their mobile phone. If the plan could go smoothly, BenQ mobile phone would become the top 4th branding in the worldwide. BenQ would not be only OEM, ODM, or local company anymore.

However, the plan is fail. BenQ got a huge loss from this M&A, over $10billion.
The reasons that BenQ failed from this M&A are cultural understanding and detail plan before M&A. BenQ wanted to be an international brand, so they made a rash decision. BenQ thought they could transfer their successful experience of Asia to Siemens. However, there were so many unpredictable factors, such as culture in Europe and the truth situation of Siemens. The loss of Siemens is much more than what BenQ thoughts before merging.

So the next step they will do is to spin off BenQ, change its name. All of you could read the news to get more information about their new milestone.

Reference: http://www.itworld.com/Man/3920/070425benq/

Milward Brown releases Top 100 Brands report

The report gives an overview of the familiar metrics they use to calculate brand value:
Brand Value = Intangible earnings X Brand contribution X Brand multiple

The trends they highlight include:
The rise of consumers in emerging markets
Converging technologies
Corporate social responsibility
The response of fast-food makers to obesity concerns

Brands of note:

• Google was ranked #1 this year, with a 77% increase in brand value ($66 million)

• BMW 14 with an 8% increase

• Harley is 64th with a 3% increase

From the report...
"The Brandz ranking provides sector and geographic coverage of market facing brands, including brands in Apparel, Beer, Cars, Fast Food, Financial Services, Luxury Goods, Mobile Communications, etc. It covers brands in developed markets currently driving world GDP and emerging markets whose share of world GDP is expected to grow in the future.

The ranking is based on the brand's 'dollar value', calculated by using an economic use approach; the brand value shown in our ranking is based on the present value of the earnings that the brand is expected to generate in the future."

You can find the full report, with breakdowns by industry and other criteria here:

Follow-up to J&B Case

While talking about the J&B case last night and the rise of competition though beer and wine, I was reminded of the linked article in BusinessWeek titled "The Great Indian Beer Rush". The article addresses the marketing challenges from the beer industry's perspective and how to break into a primarily whisky drinking country. Will they be as successful in India as they have been in the US?
http://www.businessweek.com/globalbiz/content/apr2007/gb20070412_651937.htm

Volkswagen Goes Cashmere

Not sure if this is as far of a stretch as Kleenex diapers but there are definitely brand & organizational misalignments in VW's attempt to produce fashion accessories. Volkswagen however believes that cashmere wraps will help them sell their new “Eo” vehicle, which they claim is targeted to female consumers.

Any thoughts on whether this might work?


Full article: http://www.businessweek.com/innovate/content/feb2007/id20070213_212980.htm?chan=search

Brand Crisis- Aftermath of Ford/Firestone

In doing research for our group project on brand crises, I exchanged emails with Jon Harmon, the former Director of Communications for Ford during the 2000-2001 Ford/Firestone tire recall fiasco. He also has a great blog where he talks about the event, and also offers his expert advice about public relations and crisis management:

http://jon8332.typepad.com/force_for_good/2007/02/crisis_communic.html

I'd be interested to hear your thoughts on how you think Ford really handled the crisis, and Jon's blog comments that state their efforts to defend Ford’s reputation and the Explorer brand paid off...

As many have already heard, after much finger pointing about who was at fault, Firestone ended the co-branded relationship in May 2001, blaming Ford Explorer vehicles and the weight as the cause of the tire ruptures. Ford in turn declared it would voluntarily replace 13 mil questionable Firestone tires outside those recalled the previous summer. So how did things end up after the dust cleared?

Jon points out a few interesting facts:

-Later, the National Highway Traffic Safety Administration (NHTSA) concluded that the tires were indeed defective and ordered Firestone to recall any tires that Ford hadn't got to yet. Ford later sued Firestone to pay for this massive recall which should have been Firestone's responsibility to pay, and eventually Ford and F/S settled on F/S paying Ford a few hundred million dollars, far less than the tiremaker had cost the auto maker.

-At the same time (Aug 2001) that NHTSA found those tires defective, it found no reason to move forward with an investigation in F/S's claims that the Explorer itself was unsafe, effectively exonerating the Explorer. Explorer sales indeed continued to recover and eventually (Aug 2002) sent an all-time sales record of more than 51,000 for the month and would finish the year with about 450,000 sales, breaking its own records for best-selling SUV ever. This after many "experts" had urged Ford to drop the Explorer brand as fatally wounded.

-Amazingly however, Firestone has still survived all of this and their overall parent company (Bridgestone) stock price is up higher than it was pre-crisis.

-It's not all rosy for Ford either, as in recent years, sales of Explorers and other SUVs have waned because of changing customer tastes and high gas prices. Ford stock has plummeted and never recovered. Firestone tires are no longer sourced on new Ford vehicles.

Would You Buy a $30,000 Hyundai?

Hyundai is still struggling for its brand image. Although they couol succeed in moving upward, they are still regarded as an “Entry-Level” and, the sales of Sonata are down by 30%.

Just Toyoda did for Lexus, Hyudai also should set up sub-brand for Sonata.
Otherwise, they will be regarded as just "Entry-level".


http://www.businessweek.com/autos/content/apr2007/bw20070417_362089.htm?chan=autos_autos+index+page_top+stories