You are viewing Aaker on Brands blog posts from November 17, 2011 through January 26, 2012. You can also view the most recent posts.
GROW: How Ideals Power Growth and Profit at the World’s Greatest Companies by Jim Stengel, the former CMO of P&G who has made several notable contributions advancing the field of brand management, is an important brand book and a good read. Its central and provocative thesis is that growth brands tend to have a higher purpose, termed by Stengel as a “brand ideal.” A brand ideal has a shared goal of improving people’s lives and comes in five types. It elicits joy, enables connections, inspires exploration, evokes pride and/or impacts society.
A brand ideal is often based on a brand’s heritage and can be pivotal in driving both culture and strategy. The elaboration of this idea in dozens of case studies such as Method, Pizza Hut, Crisco, Discovery Channel, Jack Daniels, Pampers, Innocent, Zappos and more is very instructive. It often provides a fascinating look at…
January 26, 2012 • Permalink
The Berkeley-Haas school has codified a well-defined culture into a set of core brand values: namely, “question the status quo (innovate and champion bold ideas),” “students always (never feel you have learned all you need),” “beyond yourself (consider larger interests than short-term profits, go beyond personal ambition), and “confidence without attitude (without arrogance employ analysis, trust and collaboration).” The values are oriented toward the reduction of overconfidence and self-focus, which are perceived to be excessively present among the business graduates and leaders of the leading business schools.
These values are highly differentiated, have substance, are true to the heritage and are consistent with the perceptions of the school. Most remarkably, they are not simply communication tools but drive operations from the curriculum, research priorities to staff programs and faculty hiring. The curriculum, for example, has been extensively revamped in order…
January 18, 2012 • Permalink
Bob Lutz in his recent book Car Guys vs. Bean Counters makes the point that GM was doing fine until in the mid 1970s the MBA-trained finance guys took control of product development from the "car guys," who were engineers and designers. The result, he says, was inferior cars and a decline in the firm. He believes that CEOs and the top management should not be bean counters but rather should be a "product guys."
The poster child for his view was Roger Smith who was an MBA-trained accounting and finance specialist. During his ten year tenure as GE's CEO during the 80s, Smith made breathtaking strategic and operating blunders. He invested in robotics that did not work, created a disastrous reorganization that resulted in cars so similar they were a joke (remember the Cadillac Cimarron?), mismanaged some ill-conceived acquisitions, built up enormous debt, and on and…
January 12, 2012 • Permalink
I was told by the computer doctor that my wife's desktop computer had all but died at the hands of a virus and, in addition, it had been obsolete for years. A new replacement was needed. My mind immediately went to a two-brand consideration class — Dell (most of my computers had been Dell) and HP (I have HP printers and have always like the "HP Way"). But minutes later, I decided to buy an ASUS computer even though I had never heard of it. Why? Three factors were convincing.
1. The recommendation. The computer doctor said that he had just bought and installed for another client an ASUS computer and liked the price, specs, and firm and the fact that it was available at a local electronics store that stood behind its product with service and assistance.
2. The story. He told me that ASUS has been the motherboard supplier for most of the leading computer brands. This was critical because performance and reliability is much more important to me than price.
January 5, 2012 • Permalink
After some 14 months of blogging about branding, I have over 60 postings. Looking over that list, I picked out three that had the most impact in terms of interest, comments, and readership and three that described a topic that had a big influence on me.
Impact on the audience
The post “Secrets of Social Media Revealed 50 Years Ago,” also published in HBR, coincidentally got a lot of attention on Twitter. It describes Ernest Dichter’s classic study of WofM brand communication, which revealed four motivations to talk about brands and two motivations to listen - findings that are relevant to social media today.
The post “Brand…
December 29, 2011 • Permalink
Stephan Sondheim, the brilliant writer of many great musicals including “Sweeney Todd, the Demon Barber of Fleet Street,” has some lines in his work, “Into the Woods” that caught my eye. Little Red Riding Hood is going down a straight path to visit her grandmother, a path she has walked many times before. However, a giant has altered the landscape, and she becomes lost. One of her companions suggests that they find another way, but she asserts that “my mother warned me to never stray from the path.” The companion replies, “The path has strayed from you.”
Most organizations have found success with “stick-to-your-knitting” strategies in which a single minded focus on a business strategy results in staple or increasing sales and profits. The team does not allow resources to be diverted from the job of always maintaining the offering and operation at a high level and engaging in incremental innovation to stay ahead of competitors.
The problem is that the path…
December 19, 2011 • Permalink
The only way to achieve real growth is to create offerings so innovative that they contain “must haves” that define new subcategories, because market inertia makes alternatives ineffective. What is needed is substantial or transformative innovation that disrupts the marketplace. The remarkable fact is that such innovation rarely occurs in the organizations that have strong profitable positions in established categories, and thus have the resources to deliver change.
Why? It is the curse of success that can take several forms:
First on the list is the insidious and common “stick-to-your-knitting” curse. Firms have been successful focusing on their core businesses: investing vigorously in incremental innovation to reduce costs and improve the offering, pursuing “my brand is better than your brand marketing” to engender more customers and higher loyalty, and building assets and capabilities that support the business. This commitment strategy however, leads to:
December 12, 2011 • Permalink
Patagonia is one of the few corporations that has gotten credit for its environmental programs. The credit is well earned. It comes in part from their values that have driven their actions since their founding over 40 years ago. Their early niche was mountain climbing equipment with a concern for “clean climbing,” which meant reducing the damage to climbing walls. Soon after they got traction in the marketplace, they were visibly supporting environmental programs with a portion of their sales and profits. Their latest initiative “Common Threads” takes it to a new level.
Common threads aims to minimize the environmental cost of clothing through its programs to reduce, repair, reuse and recycle clothing. Repair clothing by returning your items to Patagonia to have the clothing repaired at nominal cost. Reuse clothing by donating clothing to charity, selling clothing through eBay’s Common Threads site or on the Patagonia website. Patagonia will give unsold items to someone…
December 1, 2011 • Permalink
John Smale who died last Saturday had a major impact on branding strategy as the CEO of P&G during the 80s when he championed the advent of category management to address brand silo issues. The vaulted brand management system of P&G, given credit for the professionalization of branding, created problems with multiple brands within a category that competed with each other with overlapping positions. Worse, the allocation of technology and resources did not follow a coherent strategy. The solution, which was a major organizational change, was to have a category manager with the authority to coordinate the brands and make allocation decisions. This was indeed a major advance in the management of brands.
Smale had other notable achievements. He convinced the American Dental Association to put its seal on Crest toothpaste, thereby creating a new subcategory and dramatically changing the competitive landscape in the dentifrice category. As Chairman of GM in the 90s he is credited with leading…
November 22, 2011 • Permalink
The only way to achieve real growth is to engage in what I call brand relevance competition, using innovation to create new categories or subcategories for which competitors are irrelevant and build barriers to keep them out of the game. The alternative - fighting the brand preference battle with “my brand is better than your brands” strategy based on incremental innovation and expensive marketing - virtually never changes the marketplace. There is too much inertia. Customers simply lack the motivation to change habitual brand purchases even in the face of brilliant market programs that ask them to do just that.
In virtually every industry the only meaningful change in market share patterns occurs when one brand succeeds in changing the game by establishing a new category or subcategory. Enterprise Rent-A-car, for example, created a subcategory that focused on those needing to replace a car being repaired that did not need or want an airport-based car. Another game changer was…
November 17, 2011 • Permalink