DON’T KNOW… DON’T CARE

Thursday, August 26, 2010
He doesn’t care about your claims of “good” quality. He doesn’t care if you are number one. He buys only that product which makes him feel happy and which he thinks is right. The “market” is a totally different place today, than it was earlier. There is a new generation of consumers that thrives on products that didn’t even exist as recently as five years back. Technology has created new markets (cell phones, smart phones, iPhones, Twitter, Facebook) and a new breed of consumers that is very difficult to please.

Today’s consumer is even more demanding. He wants greater value from products and services, greater transparency, greater corporate responsibility towards the environment & the less fortunate. According to a survey by Landor Associates, 50% of the 18-25 year olds said they are ready to take a pay cut to work for a socially responsible company. Add to this, the global economic downturn which not just affected many people’s wallets but also their outlook, and the way they are making choices in their lives. As Sheena S. Iyengar in her book The Art of Choosing says “…we use choice as a powerful tool to define ourselves and mould our lives.” If you want your brand to be “valued”, you need to make sure it is the one that this demanding consumer chooses which helps him define his life. Just hoping your brand will sell because it is of good quality, is correctly priced et al, won’t work. The “Don’t Know, Don’t Care” (DKDC) generation wants more. Nissan is rolling out a new ad campaign (dubbed “Innovation for All”), which showcases not price, but innovative features of its cars like keyless entry, air purifiers and smartphone apps, to appeal to this new consumer.

DKDC… IF I CAN’T IDENTIFY WITH YOU

For the fourth year in a row, Google has been ranked the world’s strongest brand by Millward Brown Optimor. What is it that has kept customers loyal to this brand for years? It’s in the business of “search” and is the best & the simplest to use. This apart, it has a unique quality that it can be “personalised”. A Google user can personalise his home page! Much similar to an Apple iPhone user, who can personalise his phone by downloading applications. It’s one of the ways to make the consumer identify with you.

To remain relevant to today’s consumers, the one who innovates, survives! Look at IBM (no wonder it ranks No. 2). Look at those that relatively innovated less – Nokia, Intel, eBay et al. They all saw their values drop.

Launched decades ago, this brand has retained its number 1 spot in sports and no challenger gets counted even closely. It has done this by constantly innovating, so that the customer of every generation can identify with it. Nike! Mark Parker, the artistic, athlete & CEO of Nike, shook up the shoe business with his passion for innovation. “Irreverence inspires me,” he says. Well, it also inspires his buyers.

At 55, this brand is smoking hot! In spite of its product being condemned, in spite of laws stopping it from advertising, it is ranked #8 on the Forbes list. It innovated not just its product, but its marketing ways too & survived. Its secret to success – a growing database of 26 million smokers, who receive birthday cards, coupons and concert tickets (where they can smoke freely). A special booklet of 50 Marlboro prizes is sent to all. You could win the most exotic prizes, depending on the Marlboro Miles you earned on each pack brought. At #8, its value is more than the next 12 cigarette brands put together! New ways of marketing & new variations in the product have made it more relevant to the youth. It’s no more the “macho” effect but the “cool & trendy” effect that works. New flavors like Dark Mint and Cool Myst have been used to market it to the youth. The Marlboro man may be dead, but Marlboro remains the leader of the pack and the consumer still identifies with it.

Market innovatively to remain relevant. Molson Beer organises music concerts in Toronto. The power of the brand and its identification with youth culture is so high, that the company just advertises the event, without even mentioning the name of the performing artists. If it’s a Molson Beer concert, it’s cool! Clothing companies are hiring parking lots to hold a sale of their products and using the Internet to spread the word about the sale… That’s cool!

Be irreverent, or innovative, if you want to be the one that today’s consumer will choose. Remember – if you are perceived as “so yesterday”, the consumer doesn’t care. Google, though number one, is facing the heat from Facebook, which just might overtake it in the future, for Facebook is the brand that the consumer of today is identifying with more and more. Not surprising, Facebook though not yet in the top 100 lists of valuable brands, made its d├ębut in the Forbes list this year. Google, watch out!

DKDC… IF I DON’T FEEL HAPPY WITH YOU

Building a great brand is serious business – but you can’t be boring consumers to buy products that just make them feel good about themselves. Instead of explaining how good the product is, explain how the product can make them more successful, happier, and closer to the vision they hold of themselves. If you can do it with humour, your brand’s value increases more. In Australia, Virgin Mobile launched a “5¢ text service”, with a new campaign called “Warren campaign”. A nerdy looking guy, Warren, was the hero of this campaign. Warren was portrayed as a loser in search of a dream date. People were encouraged to talk to Warren, through TV, radio and Internet ads. His cheeky humour made him the most lovable loser & Virgin, the most lovable brand. In 10 weeks, Warren received 600,000 texts plus calls and 2 million hits on his website. Everybody loves underdogs. Supporting them makes them happy. Look at all the reality shows and you know what I mean. This hairy, plump, short middle-aged woman, who had never been kissed before, took Britain by storm with her singing. Susan Boyle, the underdog millionaire proved how much we love underdogs. Use them in your marketing business to make the consumer smile as you smile all the way to the bank with your valuable brand!

Smirnoff encouraged people to duck their responsibilities on December 7 (2003) and asked them to take a half-day off & enjoy Smirnoff at the participating bars. You could even enter a contest, where all you did was enter the names of three friends & you stood a chance of winning $25 coupons. Those three friends in turn, got similar messages from Smirnoff to win their $25 coupons. Not just did the campaign win many awards, its brand awareness increased from 38% to 57%. People loved the brand for making them switch off their computer & head-off to the bar! The more positive feelings people associate with your brand, the greater its value!

DKDC… IF I CAN’T TRUST YOU

This year, BMW surpassed last year’s winner Toyota to become the most valuable car brand. It was not the economic downturn, rather Toyota’s failure to keep its promise of delivering quality that resulted in this fall.

With so much exposure to marketing from such an early age, kids today are becoming more sophisticated consumers. One wrong move can ruin your image forever, for these are also your future consumers. They know what is authentic. No matter how “hip” your product is, if you don’t stay true to your values, they don’t care.

In a nutshell, great branding starts with a rigorous assessment of your audience. No wonder great brands sell, and sell all the time – whatever the generation. Look at Coca-Cola – it’s no more just sugared water and fizz.

A brand is a promise. Features will get copied faster than ever. Those are the intangibles, the love, and the emotions that consumers attach to your brand that make it great, make it last and make it valuable.

It’s emotions that make Apple ‘think different’, and make Coca-Cola ‘the real thing’.

Understand your audience, & care for them. If you don’t, they don’t know you & don’t care either!

CHANGING THE RULES OF THE GAME

Thursday, August 12, 2010
It’s everywhere. Look around – technology is changing, customers are changing, companies are changing, values are changing, so much so even the climate is changing. As John F. Kennedy said: “Change is law of life and those who look only to the past or present are certain to miss the future”. Yes, change is everywhere.

General Motors (GM) is back. From bowing out in 2008 and moving towards a 2009 bankruptcy reorganisation, the company is planning to advertise in the Super Bowl, the most expensive event to advertise in, in February. GM is now ready with its new ad campaign and a new tagline for the Cadillac which says, “The new standard for the world”. From down-and-out to up-and-about! What a change!

Gadgets have changed. Just look at the iPad and see what it has done to business. Not just have they changed the computer business, but have shown different businesses like Media, Advertising, Gaming etc, how to do business better! If you thought iPads and iPods were the only ones that got thinner this year, think again. If you thought “limited-editions” were for designer clothes, watches, cars etc, think again. Huggies launched limited-edition, denim-style diapers in May this year. The new, thinner and fashionable jean diapers sent moms into a tizzy. Everyone wanted one for their tiny tot. Its tagline “The coolest you’ll look pooping your pants” brought the smiles and laughs and big bucks too for the company. This change in design helped Huggies beat P&G and get back just about all the market share it had lost when P&G launched Pampers Dry Max. It was P&G’s biggest innovation in 25 years and it lost when Huggies changed.

Change is powerful! Keeping pace with it is the key. Earlier, social activism meant protest marches, and even giving up your life. Today it’s as simple as hitting the “Like” button on the Facebook!

In fact, Facebook has changed the world. A recent survey showed how people have reduced the practice of sending e-mails and text messages. They now Facebook! Hotmail is no more Hot!

What’s “Hot” is farming online! While you were busy buying seeds, farm animals and body armour, a company racked in $500 million almost entirely by selling virtual goods on its game sites like Farmville etc! Talk of “change”, selling could not have changed more. Whoever thought selling ‘virtually’ nothing could be so lucrative! Zynga is the company that has 240 million users playing Farmville, Mafia Wars and now Frontier Ville. Not surprising that on June 27, Disney acquired Playdom for $563 million plus $200 million as incentives. It too wants to get into this new gaming business. Brands like MTV and Google are trying to grab this virtual land too. For now, virtual goods are more powerful than the real ones! Those selling virtual goods are making more money than ones who are slogging it out in the factories.

While Zynga promises to change the world too, through games by selling virtual social goods that have benefited earthquake victims, children in Haiti etc, there is one game that people didn’t like being changed. Early this year when Mattle changed the rules of the game Scrabble, for the first time in 62 years, to allow proper nouns like “Shakira” as playable words, a lot of serious players got offended. While change is important, it’s important to know what not to change too!

WHY SOME THINGS SHOULD NOT CHANGE
There are some principles that are timeless! There are some “Core Values” that define you and give a meaning to things around. People and companies that have believed in not changing this have succeeded. At HP, their core value is “respect for individual. Bill & Packard turned down big government contracts that would have forced them to adopt the “hire & fire” strategy. Disney changed, from cartoons to feature films, to videos, to Disneyland, but never forgot “wholesome entertainment for family” as its core value.

When you know what not to change, that’s when you change best!

WHY SOME THINGS JUST HAVE TO CHANGE
Business, once used to be all about finding and honing your competitive advantage. Today it’s about the ability to find your “next” advantage, which is important. If you want to survive, you need to “create” your future moves. It’s much similar to the way the “high jump” event changed over the years at the Olympics. Earlier, all high-jumpers used the “scissors style”, similar to jumping hurdles, and for years people tried to better & better this technique. Then one day someone found a better way to jump higher. Instead of jumping like hurdles, you now launched & landed on the same foot called the “Western Roll”. For 25 years athletes mastered this. Then in 1968, Dick Fosbury, a former gymnast broke the Olympic Record by three inches when he discovered a totally new way of jumping and showed the world how “creating” new techniques could leave competition far behind. This new technique became famous as the “Fosbury Flop”. While everyone was jumping with their feet first touching the ground, Fosbury landed on his head and shoulders and jumped higher than 2.3 meters. A feat that would have been impossible to achieve with the older techniques!

Today, becoming the best is also not enough. Beating competition is not enough. You need to not just beat, but defeat competition in such a manner that they find it impossible to compete with you. You change the rules such that you stand totally apart. With a zillion similar brands popping up everywhere, you need to “change” to stand apart. As Kim and Mauborgne of Blue Ocean strategy said, “by just beating competition you remain in the ‘red-waters’, but when you create a new game, competition becomes irrelevant and you move to blue waters.”

When people did not want to buy entire CDs, iTunes gave them the option of buying a song, that too, very reasonably priced. While all low-priced watch manufacturers talked of functionality, in came “Swatch” and showed how low-price could be stylish and took away all the market share. While the world thought that music stores should sell – well, music, in came Virgin with its megastores which stocked CDs, videos, games, stereo and audio equipments and changed the rules. Barnes & Noble decided that a bookshop was not just meant to sell books, but help customers cherish the pleasures of reading. It added lounges, coffee bars etc, and changed the way bookshops of the future would look and the future of their balance sheets too! While most cosmetic companies played on the emotions of consumers and showed beautiful images, Body Shop talked facts. It talked about its ingredients and their benefi ts. Soon, natural cosmetics became the rage. All these companies changed the way business used to be done and created their own blue waters which competitors could not reach fast.

It’s important to remember not to forget to change, especially when you are growing. Growth gives satisfaction and that’s no good. As Katsuaki Watanabe, the President of Toyota Motor Co. once said: “Everyone should be dissatisfi ed, with the present situation.” Don’t be satisfy ed with the status quo, even if you are the best. Don’t be afraid to change. Change is always good.

Even a thing like “Climate change” is good. In June, Guyana’s President Bharrat Jagdeo said, “Climate change is good business for us,” thus embarrassing the UN, which in April awarded him the “Champions of the Earth” award! But maybe he had a point. Climate change has opened up a plethora of new businesses – from trading of carbon credits to green energy to alternative energy and many more...

Your success in life isn’t based on your ability to simply change. It is based on your ability to change faster than your competition, customers and business.

Change is unavoidable. Change is the norm. We at 4Ps B&M have changed too. Our promise to never change our “core value” of delivering you world-class content however doesn’t change. We hope you enjoy the change. Change, can change the rules of the game. Go ahead… change something too!!!