You are viewing Aaker on Brands blog posts from May 15, 2013 through July 17, 2013. You can also view the most recent posts.
In a column for the New York Times, David Brooks posited that the U.S. has one clear advantage over Chinese competition: branding. He notes that U.S. firms are powered by "eccentric failed novelists" (presumably from agencies and consulting firms that are gifted at brand positioning and execution) and "visionary founders" (think Steve Jobs) who have created exceptional brands. This talent is lacking in the Chinese market where "executives tend to see business deals in transactional, not in relationship terms," as Brooks says. This observation is important because there are Chinese firms that seem to have everything to win globally except for branding and marketing.
Speaking as a long-time observer of brands and brand strategy, I believe that Brooks is correct but his analysis…
July 17, 2013 • Permalink
Treating employees “right” as a priority over profits is unlikely to be rewarded by customers. It is difficult for firms to get credit from customers for good works such as sustainability or social programs because they are difficult to attain prolonged effectiveness, and because they fail to get visibility. So how can employee programs that are usually mostly invisible to customers, make an impact on preferences or loyalty?
Employee policies that do stand out can generate “respect” for the organization, and that respect turns into liking and trust.
Consider Costco versus its competitors. Their average employee pay is nearly $21/hr compared to under $13 hr at Walmart. 88% of Costco employees have company-sponsored health insurance and pay less that 10% of the fees while Walmart…
July 10, 2013 • Permalink
A full page newspaper ad for a major hospital group, Dignity Health recently caught my eye with the headline “The Earth’s health is our health.” It turns out that Dignity Health, formerly Catholic Healthcare West (about 60% of its current hospitals are Catholic), has 60,000 providers in over 40 hospitals and hundreds of locations in 17 Western states. And it has a very unique brand message.
The ad talks about how our health is connected to the health of the planet, and how the healthcare industry needs to be involved in removing toxic and non-biodegradable substances from the environment and to help conserve resources. And this should be done in the name of “humankindness” – where the power to heal, to inspire and to love is harnessed to do good.
The premise is that there is…
July 3, 2013 • Permalink
Velcro, from Velcro Industries, is a fascinating brand. It’s a wonderful example of a single product (hook-and-loop-fasteners) brand that created a new category and maintained control and exemplar status over that category for nearly a half century. It illustrates how even a strong brand can get tired and need a rebranding effort.
The Velcro founder story is a powerful part to the brand. It has human interest and also serves to explain the value proposition of their product. A Swiss electrical engineer, George de Mestral came home in 1941 from a hunting trip curious why burrs kept sticking to his clothes and to his dog’s fur. Under a microscope he found that they contained hundreds of “hooks.” That led to an inspiration to recreate the attachment properties of the burrs in cloth. It took nearly 20 years before he had something that was commercial, and several companies turned their back…
June 26, 2013 • Permalink
A key to building segments with high loyalty is to create brand relationships that have traction and meaning. To understand relationships, it’s useful to recall the classic work of Susan Fournier going way back to her dissertation in the mid-90s in which she used human relationship as a metaphor for brand relationships. She examined the work of psychologists who studied the nature of relationships and the characteristics of ideal relationships. Drawing in part on this body of work plus her own consumer research, she identified seven types of relationships that are important to understand and had intriguing insights into how brand-customer relationships should be conceived, measured and managed.
These dimensions provide lessons on…
June 19, 2013 • Permalink
Becoming an innovative firm capable of engaging in substantial and transformational innovation that will create new categories or subcategories requires an enabling organization. An innovative organization is difficult to create because it really requires three characteristics that are inconsistent with one another. The organization needs simultaneously to be “selectively opportunistic,” to have “dynamic strategic commitment” and to have an organization-wide resource allocation system.
The organization practicing selective opportunism actively but selectively seeks to identify opportunities through insight or technology development, and then takes advantage of them. The idea is that the environment is so dynamic and uncertain that the prudent and profitable route is to detect and capture opportunities when they present themselves. Strategic…
June 12, 2013 • Permalink
In my book, Brand Relevance I argue that the only path to real growth, with rare exceptions, is to engage in transformational or substantial innovation that creates “must haves” that define new subcategories (or categories). In virtually any product arena that you examine over a long period of time, from water to banking to computers, any growth spurt, (again, with rare exceptions) can be associated with such an innovation. For example, in the Japanese beer market the market share trajectories changed only four times in over 40 years. In three of those instances new subcategories were formed, and in the fourth two subcategories were repositioned.
June 5, 2013 • Permalink
Top athletic teams create exceptional levels of performance of people and teams. They aspire to move beyond competence to excellence. Their concepts and methods provide lessons to those that would build excellence in marketing teams. In that spirit, I was attracted to the new book entitled Toughness: Developing True Strength on and off the Court by Jay Bilas. Jay was a top level basketball player for four years under fabled Coach Mike Krzyzewski at Duke, played professional ball in Italy and is now an ESPN basketball analyst. He explores the value of toughness in a basketball player and team, a quality much admired in the sports world. His observations contain some familiar and some less-familiar admonitions, but his “toughness” perspective provides insights into how to achieve…
May 29, 2013 • Permalink
P&G’s Pampers completely reframed the diaper category in China, and in doing so created enormous growth for the category and for the brand. It is a good example of how focusing on category competition is a better route to growth than trying to win the “my brand is better than your brand” battle. The story is fascinating and informative, not only with respect to framing a category but to entering a new country with a different culture.
Pampers entered the China market in 1998 with a strategy of making a cheaper version of their Western product. The result was indeed cheap, and also was of inferior quality. The product was perceived as plastic and irritating, and it didn’t go anywhere. In 2006 a revised product, called the Pampers Cloth Like & Dry, was soft, effective and half the cost of U.S. versions. But still, sales lagged. The problem was that Chinese consumers were not motivated by…
May 22, 2013 • Permalink
A pioneer in energy drinks three decades ago, Red Bull is now the world sales leader with estimated 2012 fiscal sales of over $3 billion, profits over $400 million, and a 43% leading US dollar market. To establish a new category in the face of Coke and Pepsi and then hold it for decades is very impressive.
Four quick observations about Red Bull’s unique approach to brand building:
- Red Bull’s brand building is largely based on associating its brand with an amazingly wide range of people, teams and events.
- Red Bull believes in owning teams and events rather than being one of several sponsors.
- Because of this ownership model, they can and have turned this buzz machine into a profit center.
- Their on-brand activities reflect two very different personalities that live side by side.
The scope of Red Bull activities is overwhelming.…
May 15, 2013 • Permalink