You are viewing Aaker on Brands blog posts from June, 2011 (5 total). You can also view all blog posts.
How did Subway, a maker of submarine sandwiches, become the clear leader in the healthy fast-food subcategory with so many large and a well-resourced competitors in place? Although like any success story, the answer is complex, I believe, however, that there are three explanations for Subway’s success.
There is no doubt that Subway won the battle for this fast growing and influential subcategory some years ago and has retained that position. In 2009, Zagat Fast-Food Survey rated the Subway brand as the number-one provider of “Healthy Options. A benchmarking 2011 study by CustomersDNA among a representative sample of some 15,000 U.S. consumers found that of the 15% of customers who eat regularly at fast food restaurant and choose brands based on health Subway just dominates — capturing 76% of the this segment. The subcategory is important over and above its sales because it provides brand energy and it influences those that are not primarily looking for healthy options.…
June 30, 2011 • Permalink
The only real way to grow sales and profits is to create innovative offerings that have some “must haves” that define new categories or subcategories for which competitors are not relevant. The goal is not only to find and successfully introduce such offerings, but to create barriers that inhibit or prevent competitors from entering and becoming serious customer options. The firms that have enjoyed years or even decades of life with no or weak competitors have created such barriers. Here are some twelve routes to real barriers — the last six of which involve the brand. I would be interested in examples of others.
• Proprietary technology. Diamond’s (formerly P&G’s) Pringles, Prius’ Hybrid Synergy Drive, and Dreyer’s Slow Churned Ice Cream all have technologies not easily copied.
• On-going innovation. Becoming a moving target as Apple did by following the iPod with products like the nano, shuffle, and iTouch, and Gillette did with razors from the…
June 23, 2011 • Permalink
Three books all written nearly a half century ago may have influenced my thinking with respect to marketing strategy more than any other books written since. The authors are Peter Drucker, Ted Levitt, and Alfred Sloan.
Peter Drucker’s 1964 book Managing for Results, in my view, is the best single book on management written. A few highlights. First, executives should exploit opportunities rather than solve problems and allocate resources accordingly. Second, a key role of management is to identify and actively manage key result areas. A key result area could be anything that drives success such as the leadership position for a product, superior technical staff, or efficient distribution. Third, business can be categorized into nine types such as today’s breadwinner, tomorrow’s breadwinner, investment in managerial ego, justified specialties, and the has-been. Each type should be managed and resourced differently. Years later, BCG popularized the growth-share matrix which…
June 17, 2011 • Permalink
I have been impacted by a host of books, many of which were written by CEOs or about CEOs because they provide a glimpse behind the strategy, insights into organizational change, and a picture of executive style. One such book, “Who Says Elephants Can’t Dance?” by Lou Gerstner stands out because of the insights into both business and brand strategy that it provided.
In early 1993, Lou Gerstner took over a financially troubled IBM that was threatened with bankruptcy and posed to break itself up into seven companies. The firm was ruled by 24 product fiefdoms and geographic silos organized around regional groupings of some 160 countries and areas with the US. These units had the budgets and power and focused on developing and promoting products rather than the IBM brand or customer needs. These silos groups often had their own ad agencies—there were over 70 agencies and there was virtually no cooperation between them. There would be a major trade magazine with 15 IBM…
June 13, 2011 • Permalink
The challenge for the CMO office is to create marketing and brand building that is both exceptional and efficient in the face of country, product, and functional silos. To study that problem, I interviewed over 40 CMOs and asked about silo issues and what works to address those issues and reported the results in the book Spanning Silos: The New CMO Imperative. One finding was that autonomous silos are simply no longer viable. They inhibit brilliant silo-spanning marketing, cross-silo offerings, brand consistency over products and markets, disciplined organization-wide marketing resource allocation, and the development of marketing excellence centers for capabilities such as social media or events.
The surprising finding was that the solution, with exceptions linked to crisis situations, was not centralization and standardization which too often led to either ineffective efforts or a total flame-out. The solution, rather, is much more likely to be based on replacing competition…
June 7, 2011 • Permalink