Brand Categories: for measuring performance, not attracting customers.

As marketers, we have been taught to classify competitors into product or service categories. It’s a prime basis for the process called positioning. You, then, faithfully compete within your brand’s category.

It’s also been claimed that brands which are the pioneers in their respective categories are usually first in awareness, preference and market share.

So you don’t want to launch a “me too” product in an existing category.

That’s where innovation shines. If you can invent, combine, add, subtract, increase, decrease, and otherwise make your product different from the competition, you may have created a new category in which to participate. More likely it’ll be a subcategory if the product essentially provides the same function as the products in an existing category, but with a bit “extra”.

Name that category

Now category definition is certainly not an exact science. In a strict sense it’s only target market participants who define categories even if they do not consciously do so. Consumers do not think in term of categories, they think in terms of function and affordability. But market researchers and product developers like to develop a structure of categories for purposes of reporting and analyzing performance, and subsequently develop both strategic and tactical product planning.

choosing a category in which to compete

Charting categories and sub-categories containing over 60 varieties plus multiple combinations: helpful in tracking success but customers don’t make choices based upon artificial classifications.

So defining categories is an artificial though helpful exercise.

Classification systems might help

The U.S. government, specifically the Department of Commerce, has a method of classifying business types – North American Industrial Classification System (NAICS). This system is very helpful, particularly when the U.S.Census reports its business census data by classification. But, again, consumers aren’t even aware such a classification system exists. And a majority of businesses don’t use that structure for the basis of their product classification process.

In some industries, a trade association might establish a system of product categories that assure some uniform reporting of statistics by category and subcategory. But where this isn’t the case, each business, if they are even concerned about product classification, will likely establish their own hierarchy of categories.

Positioning in a new category

When you’ve developed a new feature or use or market for you product, you may believe you can establish it as the first product in a new category, a category defined by your innovation. And your industry may, upon launch, agree with you.

But the real test is the market. Do customers believe it’s a new product, not just a “new and improved” claim for the same old product? Do retailers recognize this as a new category and display it appropriately? Will reporters and editors in the popular press proclaim it a breakthrough product? Do product sales increase at rates faster than occurred in the old category against established competition? Until then, you’re still participating the old category. That’s the market’s verdict.

The moral: the market is the ultimate arbiter concerning with whom you compete and how you are perceived.

Martin Jelsema

Compromising the brand – two examples

Recently I’ve observed a couple of companies who should be more careful in maintaining their brand and the attributes that differentiate them from competition. One, Kia, is now marketing a “premium” automobile. The other, Whole Foods, wants to dispel their high-price image.

Aspiring up or down can be difficultBoth will experience big problems in their respective efforts.

It’s so hard to change a brand perception, even with large budgets and aggressive activity. One of the great benefits of a strong brand is that it’s difficult to dislodge it from the minds of people exposed to its communications and promotions.

So Kia has been the low-priced darling of many a satisfied customer. The brand wedged into the market as economy transportation and will remain in that position in the minds of affluent car buyers who have multiple choices, most which have built solid premium reputations over time. And several – Toyota, Nisson and Honda – created new brands to encroach upon the German-led luxury monopoly. So will Kia penetrate the high-end market on the basis of a quality product and a little lower price? I think not. I think the mind set of those able to afford expensive cars will stick with the models offering traditional prestige. Sorry, Kia.

As for Whole Foods, their reputation for quality, natural and exotic foods overrides any other image in the minds of customers and prospects. And those differentiators equate to higher prices. What’s more, there’s a hard core band of customers who are more than willing to pay higher prices – and brag about it.  If Whole Foods strays away from its base it’s likely to alienate a percentage of their customer base. Even though Whole Foods claims they will not sacrifice their approach to merchandise, an emphasis on competing with the corner super market will take some of the mystique from shopping at Whole Foods.

So you have two companies, one aspiring to a more affluent market, the other to a more mass market. Both are motivated by pressures to grow and believing that the way to do so is to tap markets at one or the other end of their existing customer base.

Both are heading into that abyss typified by the Chevrolet in attempting to be everything for everybody and ending up being an undifferentiated, so-so transportation commodity. Tom Peters said it best: “nobody aspires to a Chevrolet”.

Martin Jelsema

Brand positioning: find differentiating attributes

A client came to me several years ago wishing to establish and brand a multi-location dry cleaning business in a major metro area.

He was a refreshing change from most clients in that he appreciated the need to differentiate his business from established competitors. He hadn’t heard the term “positioning” before we talked, but he was well on his way of establishing one through the preliminary work he’d done.

A Competitive Analysis

The first step in differentiating your business is to know the positions of your competitors. So the first thing my client had done was to develop a checklist and then visit each and every significant dry cleaner in his market. He not only did business with each, he spoke to customers entering the shops as if he were looking for a recommendation for a dry cleaner.

He first developed the checklist based upon his knowledge of the industry and his market, but he was flexible enough to make a few additions as he heard the responses from his competitor’s customers.

Identifying Differentiating Attributes

There were, of course, the obvious characteristics that may or may not be potential differentiators – store hours, location, drive through service, delivery, work done on premise, breadth of services. These were just listed for each location. For competitors with more than one location, he would at least visit and rate three locations.

Then he developed a pricing matrix to chart posted prices. He also noted the amount and extent of couponing, bulk discounts and other incentive activity.

Next he listed several factors concerning stores and employees – location, identification, appearance, cleanliness, counter clutter, helpfulness, knowledge and attitude – and applied an A to F grading system to them.

In visiting with customers, he asked about their motivation for visiting this particular store, whether they only used this competitor, what they liked about this provider, whether the provider participated in community, and whether they had used a coupon or other incentive while visiting.

Finally, he collected competitive ads – coupons, fliers, newspaper ads, etc. He got some info from media reps about who was advertising and at what volumes. He visited websites and observed signage.

Information Determines Position

He presented all this raw data in individual competitor “reports”. I then plotted those attributes he had graded, see diagram below, and analyzed the remaining information to establish a position which was relatively unoccupied, but where customers said they would like to see a dry cleaner.

Analysis of filled and available positions

That position will be the subject of a future blog. The point of this one was to demonstrate how easy but vital the collection and analysis of competitive data is to the positioning process, even for a local business with few competitors.

Martin Jelsema

Brand Development: Elements and Sequence

The order in which many entrepreneurs tackle the elements of branding can cause major brand weakness.

Many have picked a name and registered it even before they’ve written a mission statement. They’ve written a tagline before they’ve identified target markets. They’ve developed a brand story after all the obvious elements are created and in use. And they’ll not have provided writers and designers with a brand platform on which the creative structure is to be built.

This is restrictive because once invested, financially and emotionally, in several brand elements, entrepreneurs don’t want to backtrack or invest in a “re-do”. So they limp along with a semi-effective brand, or perhaps a brand just not suited for the offering or the market.

The diagram below depicts the recommended sequence of creating branding elements.

Brand Development Sequence

First thing first should be the rule

There is a sequence to developing a brand, just as there is to developing the business itself. When you get things out of sequence you find you need to start over which is expensive and time-consuming, or even worse, you live with a brand with weak elements that become more burdensome as time goes by.

I suggest anyone starting a business or introducing a new product follow the simple process outlined below:

+ Write a vision statement
+ Write a mission statement
+ Write a value statement
+ Write down the goals of the business or product
+ Describe the business model you are planning to implement
+ Identify the market segments you will serve
+ Identify the product category in which you will compete
+ Identify and assess your major competitors
+ Write your business plan

Now, the business plan is the basis for your brand and much more. But for our purposes, we will just suggest that those items in the list above should be transferred from the business plan into a new document the Brand Platform.

Building the Branding Platform

At this point, you may want to consider bringing in a branding consultant to help you fashion the brand strategies upon which the brand platform is constructed. He or she should be able to translate and integrate the vision, mission, goals, business model, and the information concerning markets, product categories and competition into a brand platform. Upon completion of the platform, and not before, you can begin to think of names, logos, taglines, color palettes, etc. Then, the process of branding the business or product can begin.

Now you can, and probably should, create your brand story. This might be an expanded “elevator speech” that concentrates on how your business will differentiate itself from competitors. At the same time, you might want to craft a “brand creed”, or you might call it a “customer bill of rights”. This is primarily an internal document to guide employee interactions with the public and decision making concerning customers and prospects.

Name Development

The name is the single most important branding element. So creating the name, and then assuring it “fits” the product, differentiates you from competitors and resonates with your market members is critical.

+ Generate name candidates
+ Screen name for availability, obscenity and adverse connotations
+ Select three to five name candidates
+ Develop name preference questionnaire
+ Survey members of relevant market segments
+ Select and register name

Once the name is selected, other branding elements can be initiated, probably in the order below:

Other elements fall in line

It is possible some of the elements below can be established concurrently. However, at this stage be flexible. The entire assortment of elements must mesh so there are no conflicting or confusing messages being given. Therefore, nothing should be set in stone until the brand itself is completed and reviewed for consistency.

+ Determine if a tagline needs to amplify the name.
+ If so, generate tagline candidates
+ Select several candidates for evaluation by market segment members
+ Select final tagline.
+ Bring in graphic designer with branding experience
+ Create logo candidates and color palette
+ Select several candidates for evaluation by Market segment members
+ Select a final logo design
+ Develop a graphic standards manual documenting the standards for logo usage, selection of colors and type faces, and other graphic elements. This manual should be available to all who will have the need to produce brand collateral materials. It should also be a component of the master Brand Style Guide.
+ Create or revise brand story
+ Create or revise brand creed (principals)

At this point, materials can begin to be prepared for use in soliciting investors/bankers/partners. But there is more to do as outlined below.

+ Document color palette, type fonts, illustrative styles and other visual elements of the brand
+ If audio signature is desired, brainstorm and then create appropriate sounds, music, voice using professional talent
+ If a video/flash signature is desired, brainstorm and them create appropriate clips, commercials, presentations using professional talent
+ If a web site is desired, brainstorm and then create your website and/or your blog using professional talent
+ If packaging, signage, marketing materials are required, brainstorm and then create the required materials using professional talent
+ If trade dress (physical style of facilities, uniforms, vehicles and signage associated with the brand) is required, establish and document specifications.
+ If promotional literature, data sheets, application notes, etc. are to be part of the brand presentation material, establish and document the standards by which they will be developed. Usually this will take the form of templates.

There may be additional items and requirements to address. There certainly will be as time passes. But for a business or product launch, the materials above will suffice.

Document and distribute brand standards

There is one more vitally important component of the branding process that needs to be developed at this point. To ensure employees, channel members, the press and others use your branding elements consistently and with accuracy, develop and distribute brand standards.

+ Develop a Brand Style Guide/manual. The materials it will contain will come from the Brand Platform, the Brand Story and Creed, the Naming brief, the Graphic Standards, and the guidelines and templates for the additional brand elements.
+ Hold meeting(s) with employees, and possibly supply chain members, to provide them an understanding of the brand and their part in communicating and representing the brand
+ Distribute the Brand Style Guide to all suppliers, distributors and employees who will be producing materials, or in any way representing the “brand”
+ Post the Brand Style Guide on the Internet, along with logos so suppliers can access the approved designs without needing to “reconstruct” them.

So there’s a sequence that builds from idea through launch of a potentially strong brand whose elements are integrated and meaningful. There may be variations on this theme, but for an entrepreneur beginning the branding process, the basics are outlined here.

Summing up: Brand Smart from the Start

You’ll save money and energy by doing it right the first time. No re-dos or living with a crippled brand. Faster start from beginning to positive cash flow. Touch point groups becoming aware and active on your behalf sooner and with more enthusiasm. Better relations with investors, suppliers and the press.

The benefits are almost limitless.

So please, please, brand smart from the start.

Evaluating logos and logo designers.

I’ve blogged about logos and the need to keep them simple and unique. Now I know that’s not as simple as I make it out to be. In trying to be more helpful, I found a couple of blogs that may be of some help.

Jack Trout recently blogged at BrandStrategyInsider about Evaluating Brands.

Then PonderMarketing provided five criteria as well as pointed us to some trends in logo design uncovered by OrangeLogo. Continue reading Evaluating logos and logo designers.

Differentiating your brand: heritage

Last week I blogged about nostalgia and it’s power as a brand reminder.

In Differentiate or Die by Jack Trout and Steve Rivkin, a brand’s heritage is identified as a strong differentiator. So if you have an old brand  (a relative term based upon product category) you might consider heritage as the differentiator for your company or product.

A symbol of a simpler lifestyleActually though, the age of the brand is not the only determinant for a brand differentiated by heritage.

A brand can “borrow” a heritage just by being true to a culture or principal associated with the past. For instance, Smuckers uses an apocryphal and bucolic remembrance of the founders childhood to illustrate the “hominess” of their jams and jellies. Vanguard Mutual Funds has long associated itself with the lure of the sailing ship. Continue reading Differentiating your brand: heritage