You are viewing Aaker on Brands blog posts from March, 2011 (6 total). You can also view all blog posts.

Did Burger King panic?

3G Capital, the new owners of Burger King, fired their agency of seven years, Crispin Porter, and much of the Burger King senior marketing management. The brand had pursued a long-term campaign directed at delivering a male-oriented content often with sexual overtones and featured a cartoon character King. The idea was to break through the clutter with novel creative that would resonate with the heavy user of their product, notably the hungry male. It was a classic heavy-user, core-buyer strategy.

The logic to dump the existing creative was in part because it had not prevented a decline in sales which in the last year was over 3% overall and nearly 6% in the US and had gone on for six quarters. At least two reasons were hypothesized. First, strategically, in order to compete with McDonald’s throughout the day, Burger King needed to broaden the audience to include kids, families, women, and older consumers. A focus on the hungry male was limiting. McDonald’s realized decades…

Continue reading…

March 28, 2011  •  Permalink

Enterprise should position the subcategory instead of fighting a brand battle

Enterprise Rent-A-Car launched a new ad campaign in March in which they moved beyond value (weekend deals) and convenience (We’ll pick you up) to feature their service commitment, the professionalism of their people, the fact that employees are empowered to solve customer issues, and their heritage as a family firm. And the story is told by Enterprise people who add connection, interest, and credibility. The brand is thus defining itself in terms of its organization, its people, policies, and values, and is not focusing on comparing functional benefits with other firms.

My take is that this is exactly what Enterprise should have been doing all along. They should recognize that they formed a new subcategory in the 60s and 70s that always has been very different from the other rental car companies. Enterprise has aimed to serve those who need a car locally because they have a car under repair or want to take a locally originated trip as opposed to the “heavy users,” those…

Continue reading…

March 22, 2011  •  Permalink

The best path to growth and profits

While market expenditures in brand preference competition rarely move the needle, the successful creation of new categories and subcategories do. There are plenty of case studies in every industry. In the automobile industry, the Chrysler minivan went 16 years with a viable competitor and to date as sold over 12 million vehicles. Enterprise Rent-A-Car arguably went 35 years with no competitors. Prius dominated the market for ten years and still has a 50% share. But there is also quantitative data to support the premise.

McKinsey, analyzing a database of over 1,000 firms from fifteen industries over forty years, found that new entrants into the database achieved a higher shareholder return than their industry average for the first ten years after entry. That return premium was 13 percent the first year, falling to 3 percent in the fifth. Thus, since new firms are more likely to bring new business models than existing businesses, the implication is that those creating new categories…

Continue reading…

March 15, 2011  •  Permalink

Brand Preference vs. Brand Relevance—Two Ways to Compete

My book Brand Relevance: Making Competitors Irrelevant discusses two ways to compete. The first, to win the brand preference competition by making a brand preferred over other brands in an established category or subcategory, is tough and expensive. The second, to win the brand relevance competition by creating new categories or subcategories for which competitors are irrelevant, is a route to growth and profitability.

The first and most commonly used route to winning focuses on generating brand preference among the choices considered by customers, on beating the competition. The brand preference strategy involves incremental innovation to make the brand ever more attractive or reliable or the offering less costly. Faster, cheaper, better is the mantra. Resources are expended on communicating more effectively with more clever advertising, more impactful promotions, more visible sponsorships,…

Continue reading…

March 11, 2011  •  Permalink

Can brands enchant? Guy Kawasaki thinks so.

Guy Kawasaki in his new book, Enchantment provides a new end goal for brand builders wanting to create lasting customer relationships. A brand that enchants will create a voluntary change of hearts and minds by charm, intrinsic appeal, and shared values. It will not get there by manipulation or even persuasion but by a deep level of connection. Guy uses REI as an example of a brand with customers that have internalized the values. I would nominate Muji the understated “no-brand” retailer that I describe in my Marketing News column.

Guy goes on to describe some 80 different suggestions to those wanting to elevate their brand to one that provides enchantment. Many are relevant to any brand builder whatever their aspirations for the brand. These suggestions are compact and draw from academic research and proven thought leaders. Four caught my eye.

Build

Continue reading…

March 8, 2011  •  Permalink

GM’s Ewanick tackles country silos

One of the vexing global brand management issues is how to deal with country silos. In most cases country managers believe that their country is different, that they know the market and outsiders do not, and that if they are to make their “numbers” they need to have the autonomy to develop their own positioning, promotions, and advertising. Further, it is easy for an astute manager to undercut any central guidance. There are many global or corporate CMOs that see their plans fail to be implemented.

My research reported in the book Spanning Silos suggested that in dealing with this issue, it is usually dysfunctional to have centralization or standardization as an objective for central marketing. Rather, the best route is to replace isolation and competition with communication and cooperation. There are a host of ways to do that, including the use of cross-country teams, events to build relationships and communication channels, encouraging strategy commonalities, and the use…

Continue reading…

March 4, 2011  •  Permalink