Monthly Archives: August 2006

Rights and Wrongs of Brand Extension

Lot of times we see a company with a strong brand equity in one product grow exponentially when it takes that brand name and extend to other products. Examples that stand out are Apple and GE among others. At the same time, I can point out companies with a strong brand in one field and start going down as soon as they enter another fields. One that comes to mind right away is Amazon. I don’t know how much of their bad days are due to the extension of their product line to everything, but I (and lot of people will agree) that the pleasure of buying books at Amazon is not the same after all the remodeling they have been through. There is a third set of companies, which don’t fall in either one of these sets. They are the ones which use their brand to extend on to other product areas, the new products don’t catch up well, but at the same time the original product that built the brand remains solid and enjoy the brand loyalty. One example I would point is that of Dell. Dell is still the largest PC maker in the World but the numbers of their television and mp3 players are not that impressive.

Here’s my take on the rights and wrongs of brand extension (yeah I know there are a zillion case studies out there, but lets add one more). I think the companies succeed in brand extension if they apply creativity, innovation and link with existing product line during and after brand extension. Lets talk about Apple. Apple Macs and notebooks were always known for their cool factor. Though not adopted widely in the main stream (thanks to the tight hardware-software company and to certain extent Microsoft), the Apple computers were always liked by the people more involved in right brain activities – the artists, musicians, film makers etc. Apple took that same cool brand image and applied it to ipods, itunes and a lot more i…s to see the reemergence of the company with a bigger bang than ever before.

Creativity – same look and feel. The white color scheme and the sleek design.
Innovation – Arguably the best music player and music downloads site out there.
Link – Same hardware-software combination that Apple is known for, but this time it’s a bit loose coupling (they applied this loose link to Mac as well now, which is really the step in right direction).

Now lets switch to “the long tail” store on web. Amazon has been the model book store, or to generalize, the e-commerce site on the web. They are known to find the customer what book they are looking for as well as recommendation based on data-mining the information they have through the pool of customers visiting their site daily. There’s no denying that they are one of the best-managed content store on web. But the Wall Street view of the company and customer satisfaction numbers have been down stream since they started their brand extension to be a general store of everything, not just books. So what went wrong? I would attribute it to a couple of things. One, Amazon just turned out to be another humongous Internet store which sells everything. The uniqueness which Amazon had, to be a store for book lovers is lost. So by trying to be everything to everyone, they are turning out to be nothing to anyone. Another reason, the innovative idea of recommendations is all lost when it comes to the new areas like kitchen supplies and groceries. That was what Amazon was known for, and they lost, or at least misplaced that entire concept.

Creativity – Same “the long tail” concept of finding things you cannot find in physical stores.
Innovation – Pretty much nothing…hard to distinguish from other Internet stores when it comes to more general shopping.
Link – The recommendation link is all broken when it comes to the new marketplaces.

The third set of companies are the most interesting ones. This happens when a company has solid marketing plan for the existing product market, and then tries to go in for extensions. So the original brand product is not disturbed but the new ones don’t fly for some reason. My favorite example in this case is the Direct marketing place – Dell. As much as I love shopping (or at least configuring) a computer at Dell, I am indifferent to the entire new store they have to sell all sorts of electronics. But what Dell managed to do, that Amazon missed, was to keep the experience on the computer store intact. Still Dell is primary known as a computer store that also sells some electronics (to draw contrast with Amazon which is now a store that sells everything, that includes books as well). So what went wrong with the brand extension to Electronics? What I think happened is that people didn’t find what they were looking for in electronics at Dell. When someone goes to Dell, they expect to get a personalized shopping experience. Dell created this amazing build your own computer scene, so when it came to electronics, and they tried to a certain extent one size fits all, people didn’t buy that, or at least didn’t buy that from Dell. Again…

Creativity and innovation – Nothing can be pointed out as far as selling electronics.
Link – Well “Direct from Dell” is still there. But the link of configure your own is gone, or at least diminished a lot in the new space.

So as to sum it all, brand extension goes right if Creativity and Innovation are properly used in the process and the basic link to the original product of the company, or what the company is known for, is maintained intact.

Is your company sales focused?

Sales…not Marketing! Many companies focus on sales more as compared to marketing. Marketing and Sales are two entirely different concepts. Sales focuses on the needs of the seller while marketing focuses on the needs of the buyer. Sales is preoccupied in converting the products into cash, marketing is done with the idea of satisfying the needs of the customer by the means of products and a host of services attached with it. Any company that focuses on getting rid of the products through various sales techniques are sooner or later going to be in real trouble. In computer science equation, we can summarize that as –

IF (EXISTS (Sales Focus))
POISED TO BE DOOMED

Well you will argue with me that’s not the case. Many companies just focus on selling their products and succeed. Yes they may in the short run, or even in the long run if they get lucky. One example that stands out is that of the oil companies. When was the last time you saw one of them aggressively marketing their products? Well may be in the days of Rockefeller when he marketed the kerosene to light lamps. Oil is one unique industry where sales overtake marketing. They really just focus on the product. So the equation changes a bit. It looks like –

IF (EXISTS (Sales Focus) AND NOT (LUCKY AS OIL COMPANIES))
POISED TO BE DOOMED

Why is it so? How come there are few industries that stand out to be so product focused but still are so successful? I am very sure that the customers are not dumb enough to just buy products from companies who focus less on them and more on their products. Let’s shed light back on our oil industry example. What I believe is happening here is someone else is doing all the marketing for them. Yes, it’s the automobile industry, the airline industry, the tourism industry and so on. All these industries are incredibly customer focused. To survive in any of these industries, the companies need to place the customer first. These industries are highly marketing based. And they are in-turn directly or indirectly dependent on oil. Oil, luckily again, is placed in a unique position with no alternate source of energy that can be used for transportation. So how long will oil enjoy this luxury? Well till we do not find an alternate source to run our automobiles, fly our planes and run our cruises…or in other words, not anytime soon.

Bottomline – Marketing is the backbone of any company’s success, and if you are lucky enough to get favors from someone else to do all your marketing, you can survive just by sales.

IF (EXISTS (Sales Focus) AND NOT (Someone else doing the Marketing for you))
POISED TO BE DOOMED

Design creativity in Online Advertising

Which is the most creative online advertisement you have ever seen? Or should I ask – are the online advertisements you get most attracted to online the most creative ones? By creativity I mean the kind of imagination or style or design we see in other mediums, from television to billboards to magazines and newspapers.

Stats suggest that more and more people using internet are going to be attracted towards advertisements next to search results or ads contextual to the content on the page. Google’s AdWord and AdSense are amongst the most successful ad programs in the online market (which drives 99% of the revenue for this Wall Street darling). But the advertisements provided by Google or similar programs are the most simple form of advertisements ever.

Where’s the creativity? Or is this some other form of creativity? Here’s my take on this – I think the creative part of ad delivery is taken over by technology when it comes to advertisements in the online market. When the ultimate objective of an ad on internet is to drive traffic to a website, I think the context where advertisement takes multiple times priority over how well the advertisement is designed. Google stumbled across this concept and discovered the gold mine. For example searching for “internet telephone” on Google gives Vonage website as a sponsored link.

Vonage Google Ad

But this leads to another question – if the same advertisement is shown with more creative design then how it is shown by Google today, will it attract more hits? If the same Vonage advertisement looks something like the image below, will you be more inclined to click it?

Graphic ad of Vonage

The answer can be both yes and no. I think it depends on a lot of factors.

One way to look at it is how is the site designed? Majority of portals on internet today, which run on advertisement revenue, can be classified into two categories: Search-based-Content and Content-based-Search.
On a Search-based-Content site, like Google or Live.com, the user tends to look for specific content. In that case, a more simple textual advertisement is likely to be attractive because it tends to blend in with the content displayed on the web page. On the other hand, Content-based-Search portals like MSN or Yahoo themselves have rich content and the user navigates through the rich content (including pictures and videos) to search what they are looking for. At such portals, a graphical ad should attract more traffic.

Another way to look at this is what kind of viewers (or customers) are going to visit the page where the ad is displayed? Are they going to be sophisticated users? If yes, a simple textual ad will make more sense. On the contrary, if they are less sophisticated, casual visitors, a cool looking graphical ad will attract them more.

Yet another way to look at it is the purpose for which someone is visiting the page. If it is business or a relatively serious purpose – textual advertisement. If it is a fun or entertainment purpose – graphical advertisement.

I think we can go on and on with this. So I guess the online advertising has yet just scratched the surface with providing context to the ad. There is lots and lots of “creativity” left to be explored – both in the field of technology and design!

Is it just a bottle of water?

A couple of years back, I came across a wonderful “advertisement”. Actually I was completely blown away when I came to know that it was an ad (I thought it might be a preview of Pixar’s version of Aquaman or something ;)).

I am talking about the Epica award-winning ad for Evian bottled water where kids sing the Queen’s “We evian_water_kids.jpgwill rock you” while water characters travel across the screen, in what is actually water.
This is a real proof of the extent to which creativity can be applied. Evian, which charges two to three times a standard bottled water, convinced the people that they can feel young in body and mind by drinking Evian every day. The Evian’s “water boy” became a symbol of youth and energy, and it was soon used across different media as Evian’s youth icon. Water boy is an interesting example of the how Evian transformed itself into a “Badge of Youthfulness”.

Equally interesting is the “Naive” campaign launched by Evian in Cape Town in the summer of 2005 which added the humanitarian look to the same company. Cape Town was facing an acute shortage of water that summer. Evian decided to use advertisements to raise the awareness of the issue. The agency staff running the campaign were out on the streets of Cape Town handing out water bottles to the commuters, but instead of Evian, they were labeled “Naive” (Evian spelt backwards) with a message below it to conserve water. The bottle label also had stats and figures on how the rainfall for the year were dropped as compared to last year and gave tips on how to wisely use water. The campaign got its share of press coverage and this immediately added the tag of a brand that “cares” to Evian in Cape Town and around the World.

Evian runs a series of print advertisements from time to time, to show different characteristics of the brand. Each ad communicates a message, a message of beauty or purity, a vision or a promise which goes on to add the strength of soul and character to the brand.

Evian print ads

Evian, owned by France based Danone group, sells bottled water in more than 100 countries. Danone group is the world’s largest producer of bottled water (in terms of volume). It makes one think how do they do it? What are they actually selling? Is it just a bottle of water? No, absolutely not. They package youthfulness, energy, purity, humanity and well-being in a bottle, which also contains water!

Hello world!

I have been thinking over the past few days about how much time I spend talking to friends and family using emails and instant messaging? Well quite a lot. Normally these start with a simple point and after a few bounces across the wire, they’re like full-blown discussions. And often I noticed that I have discussed the same topic with different folks and thought that it would have been great if I can get comments of all of them at the same place. So I set out to look for something that could fix it up for me, is there anything out there which can make World even more reachable for me, can something called technology help…and bang came the answer – I can what they call blog it. So after months and months of “will do next weekend for sure”, here I am…ready to blog!

So what is this show blog all about? Well I can sum up the entire show blog for you in one word – “Nothing”. “Nothing”, then why am I watching reading it? Because it is on the TV Internet. Not yet Yes it is!

My Seinfeld fanaticism apart here’s what will be in there…lots of seasonal stuff, some marketing talk, tons of advertisement chitchat, little bit of finance, college football…well depends on how good we play (Go Longhorns, and yes, I bleed burnt orange), India talk and what else, technology and software (btw, I also write software for living and I’m lovin’ it!) So we can sum it all up to basically Nothing.

What will I gain? Freedom to express myself, talk to the World, have a voice and all that crap. What do I want from you? Lots of comments and chitchats.

So I will end this with one of my favorite Siddhuism (for those who don’t know Navjot Singh Siddhu is an Indian cricketer turned commentator turned member of parliament known for his nutty remarks) quote: “Experience is like a comb that life gives you when you are bald.”