Update: Will Apple's Brand Become Its Downfall?

Update: Will Apple's Brand Become Its Downfall?

We now have some proof that Apple's brand is directly tied to Steve Jobs. Late on December 16th, it was announced that Mr. Jobs will not deliver the keynote address at Macworld, Apple's annual premiere event to announce its new products. Guess what happened? Apple stock prices sharply fell at the opening of December 17th:

If a benign announcement like this affects a 5.5% stock price drop overnight, what will happen if and when the news is more dour?

You're on thin ice, Apple.

"Judo Brand Marketing"

Monday's Wall Street Journal had a very interesting article written by Professor Ross Petty of Babson University (a fine university located in the berg of my alma mater in Waltham, MA). He's coined a term called "Judo brand marketing," taken from the core philosophies of Judo which involve using an opponent's size and momentum to one's advantage. The marketing ramifications are very similar: using a larger, more established brand to propel your own. Dr. Petty goes on to discuss the ways that this can be accomplished and how to stay on the right side of the law when doing so.

Some of the techniques involve using logos and brand marks alongside your own, copycat branding (see my article on Me-Too Brands), and compatible and comparative marketing, among others. All of this is very interesting and are, frankly, fiendishly clever marketing tactics. At the same time, however, these are very dangerous--something Dr. Petty states outright.

If you are going to make use of someone else's brand in your own marketing, you're treading in some very dangerous waters. The obvious pitfalls include copyright infringement and misuse. Other dangers include tying your own brand to something that you cannot control. What if the other firm goes under? Or has some PR nightmare descend on them? All of these are risks one assumes when implementing these tactics. But, like any other strategy, the risks are commensurate with the potential rewards.

Minimum Pricing: Oligopoly or Brand Maintenance?

On June 28, 2007, the Supreme Court reversed a 96 year-old ruling to allow manufacturers to set minimum pricing with its retail partners. Now, a group of retail discounters, led by Ebay and Costco, are returning to the Hill to plead their case and have the ruling overturned. Their argument is that rigid price controls impede their ability to remain competitive. The manufacturers argue that ensuring a minimum price for their product is part of their brand management.

Each argument on its own is not without merit, but who is right here? Ostensibly, both are a question of brand enforcement: the retailers need to maintain low prices and the manufacturers don't want to associate a "discount" message with their product.

What of the opposite phenomenon? Wal-Mart is a discount retailer so large that it is able to dictate to manufacturers not only the price for which they want to sell it but also what they want to pay for it. Although a much rarer occurrence, minimum pricing does go both ways.

In my opinion, the manufacturers do have a right to set a minimum price. Just as a manufacturer has merchandising, release date, and other demands, price is just another factor within their ability to effectively manage their brand once it is in the hands of the retailer. In addition, retailers are not completely without power. If a retailer doesn't want to sell at the manufacturer's minimum price, they have the option to buy from another supplier. If the retailer's argument is that they need that brand on their shelves in order to remain competitive...... well that kind of answers that question, now doesn't it?

What do you think?

Out of Control Branding: The Modder Community

If you don't play video games or race cars, you probably haven't heard too much about modding. Modding is simply the modification of a stock product to create something unique. In the case of games, there are entire communities that exist on the Web that are dedicated to creating new levels, graphics, characters, items, and even entire conversions for games. It sounds like a benign practice, but what happens when modders create something risque?

This is a major branding issue. When a video game publisher releases a product to the public, they are ceding partial control of their brand to this community who is able to transform the product into any number of permutations. There are handfuls of horror stories, too: Grand Theft Auto's "Hot Coffee" scandal, the nude-skin mod in Oblivion, and the "Nude Raider" mod for Tomb Raider have all made the headlines at some point for their gratuitous sex and nudity and the publishers (and developers) have taken the heat for this even though it's out of their control.

There have been 2 main courses of reaction to this:

1. Vigorous efforts from the developers to lock down the content so it cannot be edited, which is often broken by modders anyway;


2. The development of modding tools that are offered, usually free of charge, to modders so they can easily create their own content.

I firmly believe that embracing, rather than fighting, the modding community is the best course of action. Modders will always find a way to do what they do. But, if a company gives them the tools to do it, at least they have some say and some control over how those tools are used, what they are used to create, and sometimes how that material is distributed.

Brands are living things and sometimes take on a life of their own. As a brander, you have to choose if you are going to fight that change or evolve with it.

A New Way to Chip Away at Your Brand!

Today in the New York Times, I read about a new technology. It seems that there are a couple of firms out in California that are working on ways to deploy online ads that are assembled on-the-fly, with the user's customer profile in mind. It seemed like the perfect tool for someone that wanted to try them all before settling on an answer.

Basically, the technology can be seen "...creating hundreds of versions of clients' online ads, changing elements like color, type, font, message, and image to see what combination draws clicks on a particular site or from a specific audience." Like a kid in a candy store, this will lead those of us without brand awareness to investigate all sorts of possibilities!








This is interesting to think about when it comes time to create new advertisements for your business. If this technology is used and your ads change fonts, colors and so forth, does each new flavor fully represent the essence of your organization each time? If your customers remember you as the calm, composed company that produces publications in that special tone of beige, what does that mean if you suddenly are represented otherwise? One of the things that makes brands work is the prevalence of one message, both written and unwritten. Much of this consistency comes from subtleties implied by color, fonts, arrangement of text, open space in a design and other related features. Customers select a vendor because what is said (and shown) resonates with them. They feel comfortable with their choice. They like predictability and take comfort in that.

For new customers, the intent of a brand is to, again, attract interest from those who would be most likely select their products and services. So when new technology comes along offering many options, consider resisting temptation, and keep the integrity of the brand that is yours--your customers, new and existing, will thank you for that.

A Nail in the Retail Coffin?

A few weeks ago, I was speaking with a close acquaintance of mine who happens to own a very successful chain of high-end kitchen supply stores. My question to him was "With all this doom saying about the upcoming holiday shopping season, what are you planning and what do you expect to happen?" His answer, I thought, was the smartest thing I've heard from any retailer recently.

This holiday season, most retailers are bracing for impact. They are slashing their inventory orders, deeply discounting merchandise, and hiring far fewer employees, amongst other cost-cutting measures. For example, if the average consumer is spending $600 this year instead of $1,000, retailers are preparing themselves for a 40% hit. My friend has taken a different approach. His answer: "Everyone is still out there spending money, just a lot less. My strategy is to figure out how to make sure that out of that $600, I get as much of it as I can."

How is he going to to do this? Well, you've probably guessed it--through his brand. By carefully merchandising, positioning, and promoting his stores, he is going to maximize the amount of money a shopper spends while at his store instead of simply accepting the fact that they will spend less.

A high-end brand cannot use deep discounts or tacky promotions to move merchandise without cannibalizing its market position. Instead, one must use a delicate balance of shelving, pricing, and advertising strategies that all form one cohesive approach of motivating the customer to spend just a little more. This is a difficult and potentially dangerous strategy, but for the savvy brand manager, it can make all the difference in a market like this one.