second brand strategy - brandequitymagazine.com

BRAND STRATEGY
SECOND BRAND STRATEGY
A second brand strategy is where a company with an
existing brand (or brands) finds another segment of the
market to address with a different brand
proposition.
At least, this should be what happens.
In practice, it is often when an existing
premium brand owner decides to
discount its values into a second brand
in order to penetrate a larger share of
the market.
However, the second brand need
not be a discounted brand. Nestlé
launched its Gold Blend brand at a
premium to its Nescafé brand. Johnny
Walker’s Black Label is at a premium
to Red Label. Concorde was at a
premium to British Airways.
Key do’s
1. Have a differentiated compelling
brand proposition that you can
uniquely deliver
2. Address a market segment that is
profitable
3. Use a different sales and marketing
team as a guardian for the different
brand proposition
4. If you are undercutting your existing
premium brand(s), find the magic
operational formula that will deliver the
brand proposition more cheaply
Key don’ts
1. Don’t simply discount your existing
premium brand, as “premium brand,
but cheaper”
2. Don’t use the same sales and
marketing team
3. Don’t apply your existing overhead
costs to the new brand.
Multi-brand Strategies
Many, if not most brand owners
manage several brands in tandem.
These can be:
_Different brands into different product
categories – e.g. chocolate bars
and tooth paste
_A carefully defined hierarchy of
brands – for instance the hotel
chains Six Continents and Accor. Car
companies work the same way –
BMW 3 vs. 5 vs. 7 series; VW vs.
Skoda
_A move upmarket – Gold Blend vs.
Nescafé; Johnny Walker’s Black Label
vs. Red Label
_A move towards the mass market –
Hilton International vs. Hilton
National; Sony vs. Aiwa; BA vs. Go and
KLM vs. Buzz (before they were
both sold); Mercedes E vs. A class
_A proliferation of brands – each time
you develop a new product
technology, you create a new brand
name. This is less a brand strategy
than a brand pile-up.
Second Brand Strategies
Offensive – by successfully launching
new brands into the same market
space, albeit targeted at different
customer segments, you force your
competitors out of the market. This is
the opposite of the classic
Japanese strategy of launching into a
niche-of-a-niche and expanding
out. Here you are expanding into the
niches, and driving competitors out
of the market.
Defensive – when it became clear that
the easyJet low cost strategy would
work, other airlines had to respond.
BA launched Go as a second brand in
order to directly confront easyJet, but
BA did not know how to run a cheap
airline. KLM followed the same strategy
with Buzz, to the same effect.
Go now belongs to easyJet (and
is fazing out the Go brand name),
and Buzz has been acquired by
Ryanair (who are killing the Buzz
brand). British Midland took the whole
company into the pricecompetitive
section of the market, recognizing that
there is no middle ground between
the low cost airlines and the premium
positioning.
BA itself is offering competitively cheap
flights, so long as they are booked
sufficiently in advance, under the BA
brand. The lesson appears to be
that defensive second branding does
not work; there has to be a clearly
thought out strategy, as with Levis and
Dockers
Opportunity-led – this is the strategy
whereby second brands are launched
or acquired because there is a realistic
opportunity for them in the market
place. IKEA can co-exist with Habitat.
Hotel chains work well in brand
hierarchies. Fanta would not benefit
from being called Coke
How to Set-Up a
Second Brand
Done correctly, setting up a second
brand should be identical to setting
up a first brand. There needs to be:
1. A profitable business model (so that
it does not matter which brand gets
the business)
2. A clearly differentiated and
compelling brand proposition
3. A precise target customer
segmentation
4. A determined delivery of the brand
proposition in the market
5. A strategy of brand protection and
exploitation. BE
Source: This article has been sourced
with permission from Mud Valley’s e-book
‘Marketers from Space’ book; a compilation
of all Mud Valley’s on-going brand
marketing strategy articles. To purchase
the e-book log on to http://www.mudvalley.
co.uk/asp/shop.asp. This e-book contains
the revolutionary new auto-refill feature.
When you buy this e-book, you also buy
the right to regular updates for at least two
years, whereby you will receive new editions
of the book with additions and amendments
included.
Brand Equity Volume 1, 2010
33
C-LEVEL VIEWPOINT
CO-CREATION TO THE FORE
The situation is yet to normalize in
the context of consumer confidence
and spending. So what options are
open for brands in the space of
brand communications? Are there
more effective ways for engaging
consumers? Should brand builders
change the drumbeat, or the drum
itself? Here are the considered
viewpoints that emerged from the
office of the Chief Executive Officer
of Publicis Malaysia, a brand
communications agency that crafts
solutions for brands such as Citibank,
Nestle, Garnier, HP, Sanofi, MSIG, Sime
Darby etc.
Brand Equity: In the context of
communications, what strategies
should brand builders consider and
implement to better manage the
concerns of consumers – here and
now?
Dean Bramham: Today, consumers
trust intangible brands like Google or
facebook more than the brick-n-mortar
ones.
It’s not just about the online-offline
equation. It’s about control. For too long
we have been dictating consumers on
what to do. Now the tables have turned.
Equipped with superior information at
their finger tips and a plethora of choice,
consumers are deciding on a lot of things
that they previously had no control on.
We call it Co-Creation.
Co-creation is in and here to stay. It’s
time we relinquish some control to
consumers and involve them in the
brand development process – from
designs, prices, distribution choices to
communication nuances.
We need to make the whole
communication process a two-way
dialogue from just a manufacturer’s
monologue, the way it was all these
years. Some of the best communication
stories come from the consumers. We
call this tool “Story Storming” and use
it to a great extent in our planning and
creative process.
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Brand Equity Volume 1, 2010
Brand Equity: Shifting gears, what
is your take on the idea that brand
builders are slow to migrate to the
online space, and that caution seems
to guide their behavior?
Dean Bramham: I will be blatantly
honest here. Though every prediction
points toward online budgets
superseding all other mediums and
yes, it has superseded in the west, I
will be a bit more careful. A few factors
drive this element of caution for me.
One, internet penetration. If you keep
Japan and Korea aside, penetration
figures for most other markets are
not as high as the West. But if you
are talking to say the youth, it is a
hugely impactful vehicle, irrespective
of whether they are surfing from their
bedrooms or cafes or cybercafés.
Two, the content. We still lack the
critical mass of talent. The good people
are very few and far in between and
in most cases, in the name of online
communication, what we do is the
same old oft-repeated few things. We
need to invest and groom our talent
pool for our markets to come up with
cutting edge online stories.
Brand Equity: Surely, there must be
some key trends that will influence
the way brand builders of the future
will engage consumers. What are
they?
Dean Bramham: I will not get into a
laundry list of trend-spotting here…
but we at Publicis believe that the most
important challenge is to think how you
can change the category conversation
in your favour. Like I mentioned, the
consumer conversation is what will be
making or breaking brands.
Now how you manage the conversation
in your favour is the key to your
communication success. And I don’t
mean online or blogs. Your brand story
must have two elements – it must be
Contagious and it must have an element
of Co-Creation. Why this model helps is
that you get your consumer to become
your most effective medium and pass on
the story.
“We need to
make the whole
communication
process a
two-way
dialogue...”
Dean Bramham
The eternal ‘word of mouth’ is just being
replaced by the ‘word of mouse’ or word
on any other screen.
Brand Equity: And how do you
expect co-creation to impact the way
business is conducted at Publicis
Malaysia, and elsewhere?
Dean Bramham: Co-creation will impact
the way we do business in a big way.
Who knows, maybe we can get the best
consumer stories from the consumers
themselves.
Think of this scenario. A 28 year old male
copywriter trying to write a story about
the breakfast habits of a 35 year old
housewife. Sure, backed by research
and planning. Now all the data and
information still makes his writing ‘fiction’.
He is imagining a scenario that will
engage his consumer.
To reiterate, what we are doing is
involving the consumer in the process.
As I mentioned, we call it story-storming;
it’s all firsthand stories and little room for
fiction. Now chances of that ringing true
are way higher than anything else.
Brand Equity: Brand builders do need
some potent advice with regards
to how they should view 2010 and
beyond. What would you urge them to
consider, and do?
Dean Bramham: It’s like Darwin’s
‘Survival of the Fittest’ concept where
only those that can adapt to change will
survive.
I believe that what you need to make
these adaptations even possible
are specialist talent, listening skills,
passionate talent, open mindedness,
out of the box talent, innovation, luck, a
bit more talent and a clear belief that ‘no
one knows anything’. BE
CRM & WEB 2.0
By Rosie Hong
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37
WEB MARKETING
TOP THREE BASICS MANY
T
he company website
has become a
key component to
every organization’s
marketing
infrastructure. It is often
the first face to your
prospects and as such must constantly
be improved upon, added to, and/or
modified. Because we frequently design
and develop content for websites, we
recently asked Abbo Peterson, owner
of website evaluation service provider
Vista Point Consulting, what three web
design guidelines he often sees missed.
While there are a variety of elements
to a successful website, here are some
simple guidelines every website should
follow — YET MANY DON’T:
1. Your home page contains a clear
tag line or company description that
summarizes the website or your
organization’s purpose
For websites, the initial look is critical.
In these first few moments, there are
lots of questions. Did we find the right
place? Does it offer what we need?
Does it meet our expectations? Do we
want to stay longer?
You can help your website visitors
feel more comfortable in seconds by
using a very short phrase that clearly
summarizes the purpose of your
website.
_Use a complete phrase or sentence,
rather than a list of words
_Give the statement a prominent place
on your website
2. Your website contains the
information commonly expected for
the type of site
Are you effectively answering your
website visitors’ questions? The more of
their questions you answer, the better
they’ll feel about your organization, and
the more successful your website will
ultimately be.
Tips:
_Expected information may
include product descriptions and
photographs, service descriptions,
prices, benefits, samples of work,
event calendar, customer support
information, FAQs, organization
information, store locations, phone
numbers, etc.
_Possible questions to get you
started include: a) How much does it
cost; b) Do they offer the product or
service I’m looking for; c) What are
their hours; d) How are they better
than their competitors; e) How long
will it take to get the product shipped
to me; or f) What is their email
address and phone number?
Tips:
3. The link names throughout your
site are clear and descriptive
_Be clear and factual—this is not
the time to use abstract slogans (i.e.
Your complete resource for off-road
motorcycling in Washington state)
In one sense, using a website is like a
treasure hunt—you follow clues to reach
your destination.
_Focus on what you provide and what
benefit your customers will get with
your product or service (i.e. Improving
websites with a new point of view)
38
WEBSITES MISS!
Brand Equity Volume 1, 2010
On a website, those clues are link
names. If they lead to a destination
your website visitors expect, they’ll feel
confident and comfortable. If not, they
can feel bewildered, even frustrated.
Tips:
_Use accurate, descriptive link
names. They should describe the link
destination well enough so there is no
surprise when someone clicks the link
and views the resulting page.
_Avoid link names like “click here” or
“here.”
_Links aren’t required to be just one or
two words. When appropriate, use a
phrase, e.g., “How the process works,”
or “What clients are saying.”
_For links to files, rather than web
pages, indicate what type of file in
or near the link, e.g., “Annual Report
(.pdf)”.
_For email links, make the link text the
actual email address. Avoid links named
“contact us” that can surprise people
by unexpectedly launching an email
application.
_Test your link names by asking, “Is the
link destination about ?” (For example:
Is the link destination about “available
services”? or Is the link destination
about “click here”?)
Whether you are planning a new or
redesigned site or simply want to
learn some ways to improve what
you currently have, be sure you have
covered these top three basics! BE
This article is brought to you by Go-ToMarket Strategies, a resource center for
sales and marketing professionals and
business leaders. We help companies
practically integrate the magic of marketing
with the science of sales through Sales
& Marketing articles, tips, templates,
toolkits and more. For details log on to
www.gtms-inc.com.
BRANDS 2010
TEN 2010 PREDICTIONS
FOR BRANDS
By Russell Volckmann
founder of VÖLCKMANN (& friends), a marketing, branding & identity
boutique agency in San Francisco, Montreal, and New York.
Recently, someone asked me to step up to the plate
and predict 2010 brand trends. Well, here are 10
stunningly accurate 2010 predictions from the
branding crystal ball... enjoy!
1. Marketing metrics will flourish in
2010. In 2011, marketers will begin
to realize that the metrics alone
will not salvage their failing brands.
As quarterly upticks on marketing
dashboards become real time,
marketing damage control teams
will trip over themselves scrambling
to be accountable for sales by the
millisecond. Brands that survive the
melee will have learned to lead by
example and purpose rather than just
cater to analytic trends of the moment...
And/or a deeper understanding of what
those numbers imply. Not just living in
the moment, but brands’ future reasons
for being. Nearly every demographic
today is more concerned with their
future than ever before in modern
history.
2. More financial & banking
institutions, large & small, will fail—
driven by (a) a consumer backlash
against higher credit card interest rates
and other forms of legalized usury; (b)
general job losses that force a new
wave of foreclosures on traditionally
secure demographics. Newer, more
relevant bank brands emerge.
3. Credit Cards as we know them
will begin to disappear, replaced
increasingly by prepaid debit cards.
We’ll get new names and brands for
these.
4. Accountability will kill many
well-known and major brands—from
automobiles to kids’ toys. These brands
40
Brand Equity Volume 1, 2010
must deliver on promise or become
irrelevant, dying the slow death of
commodity brands. Or the quick death
of brands that misrepresent who they
are. The divide between relevant
brands and irrelevant brands will come
to an apex in 2010. New players in
a given brand space will be more
authentic, more relevant, deliver in
practice on all touchpoints, and gain
market share—overwhelming the
status quo brands, or absorbed by
status quo brands trying to salvage
themselves.
5. Major US automobile companies
will fail in the absence of further
government bailouts. Governments
will begin to examine buying back
rights of way for trains and other
alternative transportation modes. More
relevant upstart auto/transportation
brands will get the attention they
deserve.
6. Death of the barking 30-second
commercial. Rise in brand advertising.
Any medium. As audiences reach the
boiling point in an over-saturated world
of media, and the fact that only 6% of
audiences believe an ad is telling the
truth anyway—ad dollars will be pulled
out of trad 30-second TV spots (or the
ones reformatted for online) faster than
you can say “buy it now”. Experiential
branding—virtual and real—will fill the
void, along with branded efforts that
offer real value (on physical, intangible,
or emotional levels) in product,
message, and experience.
7. Facebook finally gets smarter
about digital music/video distribution,
aggregation, and streaming—doing a
better job integrating artists, publishers,
and fans. MySpace will never get this
fast enough, despite building a brand
around the music scene. MySpace
continues to lose market share to
Facebook. Once Facebook gets
onboard with serious music & video
integration, MySpace is left in the dust.
8. Internet Video/Broadcast makes
Broadcast Television a novelty... in
the same way that newspapers and
magazines are folding due to content
explosion on the Internet, so will the TV
as we know it. See #6 above as one of
several smoking guns.
9. Store brands (house brands), like
Trader Joe’s (although not necessarily
Trader Joe’s store brands), sales will
soar in 2010 throughout traditional
commodities like food, energy, and other
lower tier priced supplies. Manufacturer
brands in these categories will need to
offer a more than just a cute jingle to
justify their existence in today’s market.
10. Branding will become
increasingly important in 2010 from
positioning, building, and management
standpoints, as companies begin to
realize the only way to sustainability
is through holistic and kinetic brand
integration. Brands will be in motion
more, but increasingly so in order to
stay true to their brands and relevant to
audiences. BE