In my previous blog, I made an argument that people buy brands and not products. They have little or no affection towards the taste, feel, smell, sound, appeal and so on of a product. Well, they might say they do but at a subconscious level, these feelings are for the brands, not for the products. I will justify this claim in the following paragraphs. I also claimed that clearly differentiating brands from products is extremely important from a strategic perspective and could have significant implications to the business as a whole. I will discuss, with examples, just what those implications are and why a strong brand idea should be central to the overall business.
A few years back, I was invited to “blind test” a new Rum that a company was planning to launch in India. Now I wasn’t picked at random for this test. I was chosen because I had claimed to be a major Rum fan and loyal to a certain brand (I distinctly remember saying that I could identify my brand of Rum from among a 1000 other Rum brands. Like a needle in a haystack, I had claimed!) . So, as expected, I was blindfolded when I arrived at the venue and made to taste some 6 different Rum products. When asked which one was my Rum brand, I confidently said, “Sample No. 3”. It was raw, hard, and bitter (more like a cough syrup!). Just the rough-‘n’-tough stuff that I was accustomed to drinking. Surely, it had to be my brand! Surely, I was wrong!
I was wrong because I had never consciously tasted the product! The brand of Rum I used to drink – Old Monk – was popular in India as “the Rum that army men drink”! The brand never positioned itself as such but it was the popular perception nevertheless. So throughout my Rum drinking days, I always preferred “Old Monk” because it made me feel rough & tough! The unique design of the bottle and the content inside (Rum) reinforced that feeling. It wasn’t the suave and smooth Bacardi that college students drink. Nah! Bacardi was boyish. Old Monk was manly!
So did I change my loyalties from Old Monk to “Sample No. 3”? Surely I didn’t! In fact, I can’t even remember what brand of Rum that was! It tasted rough & tough alright, but didn’t make me feel as such. Old Monk did that!
So ask yourselves this question – what is Old Monk? A hard, bitter Rum? An alcoholic beverage? Or a rough & tough, manly brand? Ask a die-hard Old Monk fan if he (not being sexist here but it’s definitely more likely to be a “he”) would accept an Old Monk beer and you would get a resounding NO!
By now you might be asking what point I am trying to make. Well, for starters, I am simply making a case for brand-led thinking instead of product-led thinking. And rest assured, this is not fluffy stuff. Nor is it theoretical bullshit with little practical relevance. After all, how many times have we encountered product managers talking excitedly and animatedly about a product that they’ve conceived without actually understanding the product’s brand-fit? Coca-cola coffee? Really? Frito-Lay Lemonade? You gotta be kidding me…
Point is, most “brand extensions” are hardly brand extensions. They seem logical product extensions but hardly fit the brand. And since a brand is what customers think of you, they won’t buy your logic! Hence, Xerox shouldn’t wonder why its “Data Systems” didn’t work. Well, it didn’t because for a customer, Xerox is a photocopier, not a “technology-based office solutions provider”!
To justify my claim (in fact, the test my hypothesis!), I conducted a small, unscientific show-of-hands survey on Facebook. In the survey, I asked participants which new products they would accept from established brands if they were to launch them tomorrow. Brand names such as Apple were followed by options such as a) Internet enabled wrist watch b) New OS c) Memory chip for human brain d) Intelligent car e) Stereo system. Now OS is a logical extension for Apple but here’s the twist. Surprisingly (or not!), the new OS ranked 3rd in the acceptance list whereas the internet enabled wrist watch was most acceptable. So was the intelligent car. Now what does an intelligent car mean is anybody’s guess but Apple’s core brand values of “innovation, imagination and simplicity” together with convergence and interactivity of its products are so ingrained in people’s brains that the logical extension for them has to be a car that redefines the driving experience! The same was true for most other brands that the participants responded to – FedEx = pizza delivery and time machine, Durex = A book on Kamasutra and sex toys, and Coca-cola = fast food restaurants! The participants didn’t look at what products/services these brands offer today; they went with what these brands stand for!
This reinforces the point that for brand extensions to be successful, they must emanate from a core brand idea more than from operational synergies or market opportunities. They must follow the brand logic more than the product logic. I am not saying that operational synergies are not important but what good are these operational synergies if the customers don’t accept your brand extensions in the first place? In fact, the operational synergies would automatically fall in place if you follow the brand logic effectively. And that’s the whole idea of brand-led thinking.
The same goes with New Product Developments (NPDs). How many times have you seen the R&D and the Brand/Marketing teams working together? More importantly, how many R&D teams look towards the brand teams for direction/insights? Hardly ever! Most products are developed either because they could be developed, or in some more marketing savvy companies, to fill a need-gap. Does anyone ever ask whether those products really fit the brand?
The biggest drawback of this product-led thinking is that at worst, such ill-conceived products – and there are many (Harley Davidson perfumes, Bic underwear, Marmite crisps, Smith & Wesson mountain bikes and on and on!) – would simply fail and at best they would succeed but dilute the brand in a big way. You could imagine how much money these companies would’ve lost in developing, producing and marketing these products. Such failures affect your bottom-lines, demoralize the employees and devalue the brand.
Brand-led thinking, on the other hand, inspires new products. Because products are conceived from a core brand idea, they are innovative, fit the brand perfectly, bolster the brand’s positioning and feed into each other, and ultimately increase the brand value. That’s how brands such as Google, Apple, 3M, and Lego became, and still remain, the greatest in their business. It’s the brand-led thinking that made Virgin into the company that it is. Prima facie, trains, telecom, music, gymnasiums, banking and so on, have nothing in common and yet, looking at them from the Virgin perspective, they do! The Virgin brand is all about “making a difference” – shaking the markets where customers are getting a bad deal and stepping in and giving them a good deal! (www.virgin.com). The company extend its brand only to industries if there is a potential to restructure the market, serve customers better and add value! Simply put, Virgin is the “Robin hood” of the corporate world! It’s a strong brand idea and that’s why its extensions simply work!
Brand-led thinking also engages the customers and employees alike. The cult-like following that Red Bull has cultivated amongst its customers, and maintained over the years, is spellbinding. Red Bull’s core brand idea – “to revitalize body and mind” – is central to its recruitment strategy too. Red Bull was one of the first companies to realise the power of Student Brand Managers (SBMs). The brand manager role is an informal one, with students chosen for their outgoing personalities and only those SBMs are recruited whose personalities match with those of Red Bull! This way, Red Bull not only ensures that the brand is lived by its recruits but also creates brand champions in the process.
All in all, brand-led thinking enables innovative organisations, engages customers and employees, creates a clear, unique and consistent positioning in the market and ultimately improves bottom-lines. It is, ultimately, the difference between sustainable success and otherwise.
