Insights on business

A good logo according to Paul Rand

2010-03-16T01:47:00.000-07:00

"A good logo, according to legendary graphic designer Paul Rand provides the 'pleasure of recognition and the promise of meaning.' The promise, of course, is only fulfilled over time. 'It is only by association with a product, a service, a business, or a corporation that a logo takes on any real meaning', Rand wrote in 1991. 'It derives its meaning and usefulness from the quality of that which it symbolizes.' "

Why broadening your brand’s appeal is bad – the Levi’s story.

2010-03-07T19:08:00.000-08:00

Brands are funny things. Building a brand should the single most important objective of a company’s marketing process, because if you do it well, customers will be loyal to your brand, and you will sell more products or services, and make more money.

So what is a brand exactly? A brand is nothing more than a name that represents something in the mind of a prospect. What that something is that the name represents is the brand. So when you think of Nike, you might think of athletic, sporty, flashy, winning etc. When you think of Rolls Royce you might think of expensive, luxury, exotic, or prestige.

What you’re trying to do when building a brand is differentiate your product or service from all the other products or services you compete against. Differentiate your sneaker from all the other sneakers at the store, or differentiate your brand of motor vehicle from the competition.

To do that, brands need to be specialised, and they need to be focused. They need to represent something - to stand for something. Branding should create a perception in the eye of the prospect that there is no other product or service offering in the market that’s quite like that brand.

No other sneakers are going to compare to Nike sneakers, and no other car is going to compare to a Rolls Royce. That’s not to say that a brand can appeal to everybody – not everyone is going to want Nike sneakers, and not everyone is going to want (or afford) a Rolls. No brand has universal appeal, because not everyone wants the same thing. Like the saying “You can’t please all of the people all of the time”, your brand can never have universal appeal.

One of the pitfalls big companies fall into is trying to appeal to too many people with their brand, and they lose focus.

Let’s take Levi’s Jeans as an example. Levi Strauss and Co. is a company that was foundered in 1853 when Mr Levi Strauss himself first started producing denim overalls, then a few years later in a spark of creativity invented the blue jeans his namesake brand is now famous for. In a stroke of marketing genius, Levis decided to put a bright red tab on the outside of a pocket with a distinctive embroidery shape of a birds wings in flight, with the result being that Levi’s jeans could be spotted straight away by people because of the distinctive pocket insignia and red tab. That was a key differentiator that helped Levi’s stand out from other ‘ordinary’ and lesser jeans brands.

This worked well for Levi’s for a little over a century, but in recent years the brand has lost its lustre. Jeans turned from being a utilitarian rugged clothing item 100 years ago, to being a cultural statement of personal identity today. Competing jeans manufacturers recognised this, and crafted their own brands to identify with different market segments to those attracted to the Levi’s brand.

In the face of this increased market competition, Levi’s tried to appeal to a broader audience of people in order to sell more jeans. That was a mistake. When you try to broaden your appeal, you lose what you stand for and what makes you unique, and you end up hurting your brand and actually lessening your appeal overall.

Levis decided to introduce many new styles, and they discarded the iconic red tab in some styles for a yellow tab, a white tab, even a leather tab or no tab at all. They came out with 28 different styles of jeans, all completely different, and even then if you couldn’t find a pair you liked, you could design your own style and have Levi’s make it for you. Levi’s went from being distinct to being bland.

The result was that Levi’s lost its differentiation, and it lost market share – from a high of 31 percent of the jeans market all the way down to 11 percent in the last fifteen years, laying off 5,900 workers in the process.

The thing Levi’s failed to understand was that good brands are typecast in consumer’s eyes. Good brands stand for something – in Levi’s case “the original” – and it’s very hard to change consumer’s perceptions of a brand image you have been building up for so long, even if you want to. Levi’s felt that they were not hip enough to a new generation of jeans wearers, so they changed their styles and lost their brand distinction. What they should have done is created a new brand with different core values to appeal to a different market segment, rather than dilute their existing strong brand.

A company that does this very well is LVMH S.A., or Moët Hennessy • Louis Vuitton. This French company is the master of creating and acquiring very distinct brands that appeal to different sections of the market. In perfumes and cosmetics, LVMH own the brands Christian Dior, Guerlain, Kenzo, Acqua di Parma, BeneFit Cosmetics, Fresh, Loewe, and Make Up For Ever. LVMH has so many brands because they appeal to different segments of the market. Just like young girls don’t wear the same clothes as their mothers, they don’t use the same makeup brands their mothers use either. Youth often prefer brighter edgier shades at cheaper prices, while older consumers that can afford it prefer more prestigious traditional brands at higher price points. LVMH knows the same brands cannot appeal to both ends of the market.

Another company that created a new brand to appeal to a different segment of the market was Black and Decker. Their namesake brand is one of the leaders in consumer power tools and outdoor garden products. Lots of people have Black and Decker power tools, dust busters, and outdoor tools in their homes and garages. But B&D wanted to get into the more lucrative professional power tools market – those tools used by tradesmen on work sites.

Although Black and Decker felt they were a well known brand in the home, they decided against trying to extend that brand into the professional tools market. Just like ‘the original’ Levi’s jeans will never appeal to the hip young crowd, trying to sell ‘mom and dad’ power tools to professional workmen was a bad idea. So B&D created a new brand to appeal to this market segment – DeWalt tools, clad in a distinctive industrial yellow casing. The brand was a great success and now B&D own a massive share of the professional tools market, without compromising their original brand.

Most companies are opposed to creating a new brand, citing cost, advertising and administration overheads. But creating a new brand to appeal to a different market segment is often cheaper and more effective in the long run than trying to extend an existing brand to fit a new demographic. As in the case of Levi’s, if you try to extend your brand you risk losing both the new target market segment and the old one.

Don't try to extend your brand into new markets. Instead, create new brands for new markets.

Whats in a name ?

2010-03-03T00:54:00.000-08:00

We get bombarded by hundreds of different names and brands every day, starting with the clothes we put on and the coffee we drink in the morning, to the brand of toothbrush we use before hopping into bed at night. When choosing a brand name for your product or service, what types of names does the brain remember best ?

Studies of the grey matter over the last few years have shown that our brains remember those names that are unique, distinctive and outstanding. I'll give you two examples.

The vodka business is very competitive. There are over 200 different brands of vodka in the world, and I'm sure you can name at least two or three off the top of your head. One of the most distinctive names is that of Absolut Vodka. It stands out from the crowd because it uses a very deliberate misspelling of an English word, made to look similar to a Swedish word. The brain instantly recognises the word, then spots the misspelling - and that's why you remember it.

It's the same for ice-cream. There are many different ice cream brands, but one that stands out is Häagen-Dazs. It's not actually a word in any language, and although it conjures up images of beautiful smooth ice-cream imported from somewhere in Nordic Scandinavia, it actually started life in the Bronx, New York. The two founders wanted their ice-cream to stand out from the rest, so made their name look like foreign word. The result is a very distinctive word that's easy to remember, although maybe not so easy to pronounce.

So distinctive names are easier to remember, and being remembered is one of the keys to getting more business. An ordinary name implies an ordinary product or service. A distinctive name implies a distinctive product or service - and that is exactly the type of impression you want to make. In a world full of brands for every conceivable thing, you need to stand out from the crowd.

Be distinctive and memorable, and start with your name.

Focus on doing one thing well.

2010-02-14T18:51:00.001-08:00

In 1960 Thomas Monaghan and his brother purchased a small pizza store in Yspilanti Michigan, USA for a down payment of just $75 on a loan of $500. Just six months later Tom's brother traded him his half of the business for the princely sum an old Volkswagen Beetle.

For six years Tom learned the ropes of the pizza business, and in 1965 he renamed the store Dominos Pizza and decided to revolutionise pizza delivery. Just two years later Tom had perfected his formula enough to expand, and he opened his first franchised store in tiny Yspilanti. By 1978 Domino's had over 200 stores, and quickly became the number one home delivered pizza in the USA.

What was Tom's secret ? He decided his pizza business had to be known for one thing, and one thing only - speed. For its first twenty years Dominos stressed its speed in all its advertising: "30 minutes or its free". Tom was hell bent on owning the concept of the speediest home delivery pizza service within the eyes of the public, and drummed it into people in ad after ad. It worked, and everyone came to know Dominos as the fast, reliable pizza delivery service.

This maniacal focus on doing one thing well is also detailed in Al Ries classic marketing book Positioning: The Battle for Your Mind, where he sums up positioning with four tips:

You must position yourself in your prospects mind.
Your position should be singular: one simple message
Your position must set you apart from your competitors.
You must sacrifice. You cannot be all things to all people; you must focus on one thing.

Domino's never mentioned the things that the other pizza brands touted all the time - quality, price, or value. His fanatical focus on "doing one thing extremely well" meant he carved out a niche in the hyper-competitive pizza business and his company thrived.

Stand for one thing that will differentiate you from competitors, and focus on that.