Consulting to a client list that includes the who's who of top global and UK brands such as Tesco, Sony Playstation, Virgin, Unilever, Orange, Microsoft, Loreal, etc. etc., Nick led us informally through 5 key themes in marketing branding and consumer orientated thinking.
If you fall into the first camp and your business is all about a product that you believe in, the whole thrust of your marketing strategy will need to be sales driven and PR orientated and your marketing decisions will be based on yourself. If you believe the second half of the question to be more relevant to your company, then your marketing strategy will, by necessity, be more customer oriented in an environment where tough market factors drive your company's decision making policies.
Throwing out the supposition that - your product does not exist, all that exists is the PERCEPTION of your product in your customers' heads - Nick drove home the point that making people buy things is the sole purpose of marketing. Marketing is not a battle of products, but a battle of perception. The message that marketers are in the business of shifting units, is a fact that is often not fully understood even by many advertising agencies, who think that marketing is about winning awards or going to Cannes. Now there's a perception that needs changing.
Anyway, staying with the topic of PERCEPTION, Nick revealed some interesting case studies. What is the answer to the research question "Which car scores the highest on tests of safety, Volvo or the Toyota Camry?" (Bet you thought you had it waxed) In fact the answer derived from automotive tests is that both are equally safe vehicles. In a 20 year campaign of reliability, Volkswagen dominates consumer mindspace as far as reliability goes, when in reality, apparently VW comes 44th out of a total of 70 cars tested for reliabilty. In another case study, research groups were asked in connection with two leading UK banking brands, HSBC and 1st Direct "How satisfied are you with your ATM?" 1st Direct recorded much higher satisfaction scores, when in reality, it is owned by HSBC anyway. The difference, 1st Direct is seen as a "cool" brand, its ATM card is black and sexy, while HSBC is still perceived as the conservative brand that used to be Midland Plc.
The power of brands was demonstrated yet again by the case study of the 1980's "Baked Bean Wars" in the UK. Heinz as the market leader for many decades had a 45% share of the market at 33p per unit. As price goes, the next in line was an own label at 25p and value own label at 16p. At that point, using PRICE CUTS as a strategy Tesco slashed the price of a can of beans from 16p to 9p and then even further to 3p! And the effect on Heinz as a brand leader? - while their volume shares were down only 2% as a result of all this price cutting activity, in reality their value shares rose by 5%. The moral of the story - price cuts kill brands and are not a viable marketing strategy.
So what is? Asking a few home truths about your customer's relationship with your product, such as: How do our customers think, feel and behave? How are they likely to think, feel and behave in the future? How can we influence and shape how our customers think, feel and behave?How can we capture the hearts and minds of our customers and very importantly, how can we identify the ideas, commitments and values that keep challenging us to grow?
The case study of the gaming consol giants of the early 90's is a landmark case study in branding. As the story goes, the two brands Sego and Nintendo dominated the target market of teenage gaming junkies. And the market was saturated. A fact that, at the time, kept any and every competitor in the category well away. In 1995 a small contingent at Sony wanted to create a new and better consol from scratch, begging the question "How can we come into a market already saturated?" It seems they did one or two things right, as Sony Playstations still outsell any other consol. How did they do it? Firstly they decided not to go for the teenage market, but to concentrate instead on a new 20-something target audience. Although the Sony product was better, faster and more technologically advanced, they did not use this as their marketing platform, focussing instead on the model of appealing to the hearts and minds of the customer. The experience of the category was enhanced by introducing better games, by improving the design, packaging and ultimately the perception of the brand. By 1998 the Sony Playstation was contributing 49% to Sony Corporates worldwide profits. If there is any case that can be made for a well thought out branding strategy, this is it. That a parity product can outstrip its competition even in a saturated market by anticipating and creating desire in the marketplace.
Marketing is working with managing perception, Jankel-Elliot went on. It is about MINDSPACE or what we often call positioning. Today's busy consumers have only a limited amount of space in their minds for your marketing message and people can only think one thing about a brand ie Volvo=safety. What is it about your brand that creates those powerful experiences and connections with the customer that stays in their minds, while they are making the 1000's of decisions that make up their daily existence? If there is no one right answer as to what a brand is, then the closest we can come to a definition, is that a brand is a shortcut to making a purchase decision.
Two must read books on Nick's list are Jeffrey Moore's "Crossing the Chasm" and "Eat the Big Fish" by one time colleague Adam Morgan. So there you have it from the horse's mouth.
Here is an excellent business exercise for you to try. Get together with your business partner, management team or friends and make the decision to fire yourself. Go across the road to MacDonalds for a coffee and while there identify the one thing that you should be doing in your business, then return as the "new CEO" and implement it immediately. You know how new managers always try to do something bigger and better than their predecessors, well that's how you should be doing on a regular basis. When in the 1980's Intel, (who were at the time producing only memory chips) embraced this exercise, the CEO came back from his coffee asking the question: "Why aren't we in processors?" and never looked back. Sometimes we have to be ruthless, to do things that hurt, get rid of pet projects, embrace the fear and bring refreshing change. Oh, and if you're a start up company, as many of the listeners at the Bandwidth Barn obviously were, Nick's advice is to get a business partner, if you don't, he reckons, you will never survive.
