Brand Packaging: The Secret Weapon To Creating Buying Preference

Photo Credit: Nike

About 6 years ago I was in charge of launching a new brand in the durable goods category, consisting of over 1000 products, with everything it involves: brand differentiation and positioning, product sourcing, brand identity creation, packaging design, and communication strategy development.

The most difficult decision we had to make was how to differentiate the new brand from the current (established) players. The product itself offered very little opportunities to set the brand apart.

During the brainstorming process I noticed a commonality with all our future competitors: their packaging sucked.

The Role of Packaging In Building a Brand

The wine industry taught me the importance of packaging in selling the product. Hence, I immediately saw an opportunity to differentiate the new brand: using packaging to gain a competitive advantage.

Many organizations see packaging’s role as purely functional: it is designed to contain the product, protect it from damage during storage and transit, and comply with the regulations that govern the industry.

In the constant battle for differentiation, packaging should be used at its full potential: as a silent ambassador for the brand.

Brand packaging is part of the intimate interactions consumers have with brands.

On the shelves, it has the huge task of getting noticed, and convince undecided consumers the product it contains is the best choice. Packaging gets examined, read, flipped over, and often abused.

Here are some ways brands can create purchase preference through smart packaging.

Make it Informative

One the packaging’s basic function is to communicate what the product inside is all about.

Smart brands use packaging to communicate more than the manufacturer’s name, product number, contact information and website. They make it easier for consumers to choose their brands by using packaging to provide answers to many additional questions:

-how does the product look like? (include a product shot)

-what should I expect to get when I open it (list all the components, parts and accessories)

-how should the product be used, maintained, cared for (if it’s practical have all this information on the packaging, rather than an insert inside it)

-what is the warranty

I personally avoid specific brands of over the counter drugs because their instructions are written in such a small font that makes them impossible to read. With so many options available, why bother even trying?

Reinforce Your Brand Message

Packaging is a great opportunity to communicate what your brand stands for and make customers feel good about choosing it.

Brands can achieve this multiple ways: by writing inspiring copy, carefully selecting packaging materials (a common practice among eco-friendly brands), or through unique design and functionality.

Apple pays as much attention to its packaging as it does to its products and marketing message. I still have all the packages my iPhone, iPad and Mac Book came in, and remember the great experience I had opening them for the first time.

Make It Functional

A functional packaging eliminates the perception that packaging becomes waste as soon as the product is bought and used. Brands that pursue functional packaging turn a need (product container and protector) into a value-added benefit.

Returning to the wine industry, most wine comes packaged in bottles or carton boxes that get discarded, or, best case scenario, recycled.

The wine package designed by Icon Packaging for Aquilegia turns an ordinary carrying case into a beautiful and reusable wine rack. What a great and beautifully executed concept!

Tresdon-wine-wooden-packaging-design

 

Make it Eye Catching

Good design costs as much as bad design. With so much competition and our attention span getting shorter and shorter, brands have seconds to get noticed and make a good first impression.

When it comes to designing packaging, make sure you study the competition, and add as many value added elements that are missing from their packaging, to yours.

The next step is to go beyond my direct competitors and borrow ideas from industries where packaging is vital in selling the product, such as beverages and personal care markets.

Aside for being more noticeable, attractive packaging can help you gain more distribution for your brand. That’s exactly what happened to the new brand I had to launch: independent distributors appreciated the modern look and bold color scheme that elevate their showrooms to those of retail stores.

How do you make your package stand out? Through the use of colors, shapes or graphic design. If your competitors use conservative colors, go for bold ones. If they use rectangular boxes, go square. If their packaging looks busy, adopt simplicity.

In the highly commoditized categories most businesses compete in, brand packaging can become the secret weapon for creating awareness, desire and preference for your brand. And unlike other aspects on the business environment that a brand can’t control, “out of the box” packaging is within its reach.

Luxury Marketing: The Difference Between Fashion and Luxury Brands

Apple Watch

orologi-patek-philippe

The launch of Apple’s 18-Karat Rose Gold edition of the Watch, with the price tag of $USD 12,000, and supported by a stylish 12-page spread in Vogue magazine has signaled to many the company’s expansion into the luxury segment.

The hiring of Angela Ahrendts from the British luxury brand Burberry was considered the first move in the same direction.

But can the Apple Watch be positioned a luxury product? Are the high price tag, beautiful design, quality materials, and an emphasis on personal style enough to position Apple as a luxury brand?

The Fashion Brand: A Definition

In one of my previous articles on luxury marketing, I summarized the difference between premium and luxury brands. Is is time to highlight, for those involved in luxury marketing, the difference between fashion and luxury brands.

A clarification is needed before we continue.

The word “fashion” in the context of this analysis does not refer to brands in the fashion industry (clothing and accessories, jewelry, makeup, etc). Those brands can belong to any category, including luxury (Burberry, Prada, and Hermès for example).

A fashion brand offers products, in any category, that follow a popular trend or style. Most mobile phones are fashion objects that become obsolete once a new design/technology gains traction (usually in less than a year).

Luxury Versus Fashion Brands: Key Differences

It is very important for any marketer managing a brand at the borderline between fashion and luxury to properly answer the question: “Should I follow a luxury or a fashion brand strategy?”

Luxury brands should be managed fundamentally different than ordinary, premium and fashion ones, due to differences in product characteristics and target audience.

The chart below summarizes the key differences between a fashion and a luxury brand.

ATTRIBUTE

FASHION BRANDS

LUXURY BRANDS

Product Design

Changes frequently and drastically depending on the current popular trend.Iconic design that changes very rarely as an evolution, not drastic departure from the initial concept.

Price

Broad price range, depending on the brand positioning within its category.Inaccessible to most, price acts as a selection tool that limits the access to the brand.

Price Discounts

A very common strategy, in particular at the end of the season, when the product is no longer in fashion. Not advisable, the high price increases product desirability.

Celebrity Endorsement

Seeking endorsement from current trend setters in entertainment and sports is a very common strategy.Not advisable, as luxury brands transcend the current trends and celebrities.

Product Line

Can be broad-one product for each segment targeted.Very narrow-a flagship product and only few variations.

Country of Manufacture

Usually manufactured in low-cost countries, to allow for price flexibility at the end of the season.Manufacturing country is not important in purchase decision.Country of manufacture is part of the brand myth. Brand should not relocate manufacturing facilities to lower cost countries. Country of manufacture is very important in the purchase decision.

Delivery

Immediate. The goods have to be delivered in time to capture the latest trend.Not urgent. The wait for the product to be built/created/fully matured contributes to the overall luxury experience.

 

As seen above there are many differences between fashion and luxury products. High quality materials, state of the art manufacturing, and high prices are not enough credentials to justify the “luxury” label.

Can a Technology Company Offer a Luxury Product?

Technology companies, such as Apple, will face an impossible task in their quest to break the luxury barrier. Technology is probably the fashionable, ever changing category, where products become obsolete not long after purchase.

The Apple Watch is no exception. Luxury watches a passed on from generation to generation and increase in value, whereas the Watch will become irrelevant once a thinner, bigger, more performing model will be released next year.

How Important Should Social Media Be In Marketing Your New Business?

Image Credit: Sean MacEntee on Flickr

On March 20, 2015, Elon Musk, the visionary CEO of Tesla, put out this tweet:

“Major new Tesla product line — not a car — will be unveiled at our Hawthorne Design Studio on Thurs 8 pm, April 30”

Within 10 minutes of posting, Tesla shares jumped 4%, adding close to $US 1 billion to its market cap.

Examples such as this one make new entrepreneurs pencil social media at the top of their marketing to-do list for launching their new business.

And I don’t blame them.

If you are searching for advice on how to market your new business you will invariably come across a common recommendation: you have to “engage” your target audience on social media with compelling content that everybody will want to share.

Social media experts have long predicted the disappearance of traditional marketing communication channels, and the dominant role Facebook and Twitter will have in influencing consumer choices.

The rationale behind the prediction was that consumers hate advertising pushed through traditional mediums, such as TV, newspaper and magazines. The only way for brands to build reputation is by engaging in organic, spontaneous two-way conversation.

Judging by the Tesla example above, social media is a powerful tool for established brands with millions of followers.

But what about new businesses? Can social media help business owners reach potential customers more effectively, and ideally at a lesser cost?

People Socialize with People, Not Brands

The reality is that for most businesses social media play a minuscule role in finding new customers who will want to buy from you.

The word “social” refers to people, not businesses, and that’s how all social media platforms were initially designed.

Remember the first screen that appeared when you signed up for a new social media platform? It invariably presented you with a list of your friends and co-workers that you should add to your community.

There is only one problem with targeting your friends and family: they don’t want to buy from you, or “engage” with your brand. No matter how engaging your postings are, they want to know about you, and not what you have for sale.

Social Media is Unpredictable, and No Longer Free

Once the number of users becomes significant, social media platforms face the big challenge of monetizing this success. This is when they invariably turn to businesses for help.

Let’s take Facebook as an example.

In 2007 the most popular social media platform introduced Fan Pages and Facebook Ads, as a “revolutionary” opportunity for brands to move away from the traditional way of marketing to consumers and engage in conversations that will eventually translate into sales. Brands took notice and started investing time in building communities of fans, and delivering content to hopefully be shared with their friends.

But in 2012, brands were in for a big surprise.

Facebook announced that organic posts by brands were only reaching up to 16% of the fan base. In addition, the platform would further restrict organic reach of posts deemed to be too promotional.

The solution? In order for brands to become more visible, they would have to pay for it.

Needless to say these changes were met with frustration and even anger by business owners who spent years building an audience, just to discover that due to recent changes in algorithms and strategy by social media sites, they can no longer reach that target audience organically.

If you are curious to visit pages with impressive followings, you will notice the fans’ engagement is very low. According to Forester Research, only 0.07% of users interact with each post.

That is a ridiculously low number by any marketing metrics.

Those constant changes and updates makes it impossible for business owners to create any meaningful strategy around social media. And with organic reach nearing zero, the argument that maintaining a social media presence is free is no longer valid.

Social Media Revolution That Never Was

Social media will not revolutionize marketing as the expert predicted. Facebook, Twitter and Instagram are becoming alternative paid communication options, just like other forms of digital, print, outdoor and TV advertising.

So what should be the role of social media in the overall marketing communication for a new brand?

Once you build your community (through paid advertising), social media can successfully be used to augment the level of customer service your brand provides and to always improve your overall brand experience. Surrounded by the anonymity the internet provides, people are more comfortable expressing their true feelings about a brand and its actions.

This is not to deny the impact social media had on how brands communicate with their audience. I just want to set realistic expectations for new entrepreneurs, who are counting on social media to build their new brand: the days of building a brand through free organic reach are over.

Just like email, direct marketing and personal selling, social media requires knowledge, dedication, time, and money to effectively use.

Book Review: “The Management of Luxury”

The Management of Luxury

Luxury branding is the favorite topic among the readers of this blog. My previous articles on how to manage luxury brands received the most number of shares and some passionate comments and opinions.

Luxury brand management doesn’t receive the coverage it deserves, given the positive dynamics within the segment. According to Bain & Company, the number of consumers who shop for luxury products has tripled since 1995, reaching 330 million in 2013.

Given the limited amount of information on the topic I am very happy to introduce you to another book dedicated to those in charge of managing brands in the luxury segment: “The Management of Luxury-A Practitioner’s Handbook”, published Kogan Page USA in 2014.

Receiving this book was another confirmation of why I enjoy reading the printed editions: its covers have a nice velvety feel, and the choice of font and layout makes for a pleasant read. But, as I would soon discover, not an easy one.

The book is a comprehensive and multi-national collection of perspectives into the management of luxury brands. 50 contributors from 11 countries contributed to probably the most detailed and multifaceted coverage of luxury marketing I have come across.

The topics are grouped into 4 parts: the luxury market, luxury brand strategy, luxury business strategy and luxury responsibility.

Overall the book is very academic in nature and addresses the many questions any firm targeting the luxury consumer should answer: “how to enter a vast and foreign market and how to make an impact while not diluting the brand; how to optimize the retail experience and not sink millions in the process; how not only to sell online but also to be successful in doing so; and how to diversify without overstretching the scope of the firm”.

The level of detail the authors go into to illustrate the various concepts is impressive, and nothing is left to chance. The cases studies used to reinforce the key concepts cover well-known luxury brands such as Dior, Coach, Gucci, Escada and Ferrari, which reinforces the book’s practicality.

And if that wasn’t enough, the long list of notes at the end of each chapter invites the curious reader to further exploration and investigation.

One topic I particularly enjoyed was the one covered in Chapter 3, that explains the motivation behind luxury purchases.

According to the authors, there are five extrinsic (public reasons, called effects) for which people shop for luxury goods:

The Veblen Effect (showing off)-people in this category see luxury as a way to display and seek external validation of their wealth and status.

The Snob Effect-consumers in this category purchasing a luxury item makes them feel good psychologically.

The bandwagon effect- these category of luxury consumers associate luxury goods with belonging to a desired social group, like their wealthy friends, neighbors and other people they want to be associated with.

The hedonic effect—these consumers find personal pleasure in owning luxury goods.

The perfectionism effect-these consumers perceive luxury goods as a reflection of supreme quality, versus ordinary, mass-produced goods.

As I mentioned in the introduction this book is a complex read. Making the most of it requires important time commitment and taking many notes.

“The Management of Luxury” is probably the only book the specialist working in luxury brand management would need to read to feel more prepared to tackle the challenges the luxury market poses, and be able to make more informed decisions.

Fifty Shades of Branding

This is a guest post by Melissa Kelly*.

From building brand authority to dominating the market, what does it take to manage your brand in a changing digital world? In this work-appropriate slide show, you’ll discover statistics on brand management and best practices for helping your brand evolve today.

Here are some interesting statistics from the slide show:

Melissa Kelly is the marketing manager at WebDAM, a leading cloud-based digital asset management platform helping brands grow and thrive.

Better or Different? An Introduction to Horizontal Brand Differentiation

Horizontal Differentiation

The options to differentiate a brand can be narrowed down to three: “better”, “different”, or “cheaper”.

In a previous post we discussed the “better” strategy a brand can pursue through vertical differentiation. A brand can differentiate vertically by positioning itself on the quality ladder, and supporting that claim through price and attributes to justify it.

With vertical differentiation consumers are in agreement on which product is better, and buying choices are made based on individual needs and budget.

Now it’s time to focus on the “different” strategy.

What is Horizontal Differentiation?

Unlike vertical differentiation where product quality ranking is possible, a brand that chooses to use horizontal differentiation will offer a product that is different, but not necessarily better.

In other words, with horizontal differentiation the good-better-best options are not easily identifiable, and brand choices are made based on individual beliefs.

To illustrate the concept of horizontal differentiation let’s take a look at the smart phone market.

The question “Which smart phone is better: the IPhone or the Galaxy?” generates an intense debate with no definitive conclusion. Each of us has a different (and strong) opinion, but the reality is there is no unanimity on which smartphone is better.

Each of the two companies carved its own niche market, with very little overlap. Apple die-hards will never buy a Samsung product, and vice-versa.

Hence the main benefit horizontal differentiation provides: the ability to build a truly differentiated product and attract a loyal customer base, that will reduce the pressure to compete on price.

The key to success is to identify a less competitive market niche that you can profitably target, instead of launching a better alternative into an overcrowded segment.

Some Examples

Let’s take a look at some more examples of brands that use horizontal differentiation to successfully compete in crowded categories.

Subaru carved its unique niche in the automotive market, by deciding to focus exclusively on offering 4-wheel drive vehicles, and reinforcing the “car for people who love the outdoors” message.

The car rental market is dominated by big players such as Hertz, Avis and Enterprise. Zipcar pioneered the car sharing concept as a way to differentiate and gain market share.

The company offers the option of renting a car for only a one or two hours, and convenient pick up and drop off locations.

For Zipcar customers who calling themselves “Zipsters”, the brand encompasses not only the convenience of short term car rental, but also the “green” philosophy that comes with it.

The Subaru equivalent in the digital camera market is the GoPro brand. While big players such as Nikon, Canon, and Olympus compete on the number of pixels and LCD screen size, GoPro positioned itself as “the best action camera in the world”. In a few short years the brand has become the preferred choice for those with an active lifestyle.

Benefits of Horizontal Differentiation

There are a few benefits of the horizontal differentiation that are worth mentioning:

A more loyal customer base. Since consumers have less viable alternatives, they are less likely to switch brands or expect price reductions.

Less pressure to compete on price. Horizontal differentiation eliminates head to head comparison, resulting in less pressure for price reductions.

High barriers to entry for newcomers. Niche brands usually create a strong emotional connection with the consumer. As a result, a new entrant will have a difficult time changing customer perceptions, even if able to offer a product with similar features.

Vertical and horizontal differentiation usually coexist within the same category.

While Apple and Samsung are horizontally differentiated, Vertu, the luxury mobile phone division of Nokia, chose to differentiate vertically, by positioning their phones as luxury objects and highlighting the craftsmanship, exclusivity and personalized service, rather than screen resolution and camera performance.

Implementing horizontal differentiation implies that a brand chooses not to target the whole market and dominate the category, but rather focus on a niche segment and service it very well. It can be a highly profitable strategy that can pay huge dividends, however mass appeal is not part of the package.

Understanding Vertical Brand Differentiation Strategy

Vertical Differentiation

In today’s fiercely competitive and noisy environment, the need for strategic brand differentiation is acute.

At the macro level, a brand can be differentiated vertically, horizontally, or pursue the cost strategy.

This article explores the vertical differentiation strategies. Horizontal differentiation and the cost strategy will be addressed in future blog posts.

What is Vertical Differentiation

Products in most categories can be differentiated by their perceived quality level. The primary indicator, and the most visible, consumers use to evaluate quality is price.

Vertical differentiation involves finding a quality/price mix that will differentiate the brand from its competitors, that appeals to enough consumers and can be profitably implemented.

A company can also use this strategy to differentiate between products in its portfolio designed to target multiple consumer segments.

With vertical differentiation consumers agree on which product is better, and choices are made based on individual needs.

A product’s points of differentiation should be easy to explain, at least in theory. Its price should be reflective of the features it provides, vis-à-vis its competitors.

If you are in a market for a digital camera for example, there are plenty of options to choose from.

You might want to get a camera with interchangeable lens, that takes amazing pictures in low light conditions, and has a high enough resolution that allows you to create large format prints from your shots.

Or, you might just want to save money and buy a lightweight camera that takes decent enough pictures for you to publish online and share with your friends on social media.

There is no right answer as to what camera you should go for. It all depends on what’s important to you: you might want to become a professional photographer, or just capture your life’s moments with ease.

Pursuing Vertical Differentiation

Vertical differentiation requires a brand to find that quality/price value proposition that (ideally) no other competitor claims, and own it. Here are a few things to consider:

Identify the features/quality levels that justify a price difference. That is, make sure you understand what’s important for your customer when deciding on a product in your category. In the digital camera example above, the weight of the camera is a sought-after feature that justifies a price difference, while the camera color might not.

Ensure there is enough demand for your new offering. The goal with this strategy is to design a product or service for which there is enough demand to justify launching it. Surveying your consumers might not offer you a complete picture, as many will tell you they want highest quality product at the lowest price.

Ensure the quality level you choose to offer can be profitably implemented. It’s great to offer a product for which there is enough demand, but what’s driving a business forward is profits, not the number of consumers who like its products.Too many features at an attractive price is sure to create enough demand, but your profitability will most certainly suffer.

Disadvantages of Vertical Differentiation

Companies pursuing vertical differentiation face two potential risks.

Vertical differentiation is impacted by sudden or unexpected changes in the marketplace that might make this strategy obsolete.

Consider the fast-changing technology market. When a new feature-packed product comes out, its price is usually appealing only to early adopters. Once the market catches up, the “advanced” features quickly become obsolete, and the price goes down accordingly.

The second danger is imitation. Most innovative products, when proven successful, are forced to compete with virtually identical products at much lower products.

The Onda tablet, an identical copy of Apple’s Ipad,  offers users a dual operating system (Windows and Android) at a third of the Ipad’s price.

Even reputable manufacturers such as Lenovo are capable of shamelessly copying successful products. Just take a look at their latest phone, S90 “Sisley”, an otherwise decent device, but an identical copy of Apple’s Iphone.

In conclusion, claiming a spot on the “quality” ladder is a viable way to differentiate. The higher the quality (and consequently the price), the more “niche” your brand will become.

But that doesn’t mean you should always aim to launch products in the more crowded low and medium price segments. Niche brands might not enjoy mass appeal but are usually much more profitable.

Book Review: Hooked: How to Build Habit-Forming Products by Nir Eyal

Hooked by Nir Eyal

The first thing I do every morning is rush to my phone and check my emails. Every evening I promise myself to follow a different morning routine: drink my cup of coffee, relax my mind and plan the day ahead. And yet when the next morning comes, I am back to the same old habit.

If you want to learn more about why that Mail icon is so addictive, Nir Eyal’s book ” Hooked: How to Build Habit-Forming Products” is an excellent start.

Nir Eyal should be a familiar name to anyone interested in the topics of gamification, consumer motivation and influencing user behavior.

He worked in the video gaming and advertising industry and became an expert in techniques that motivate and influence users. Nir has designed and taught courses at Stanford Graduate School of Business and Hasso Plattner Institute of Design, and posts regularly on his blog, which I read regularly.

When I was asked to review his book I didn’t hesitate.

Being a regular reader of Nir’s articles, I knew his book was good. The fact that it got almost perfect reviews on Amazon reinforced my belief.

“Hooked” is a reference book for developing products that will get users engaged and coming back for more. It provides a clear, practical and easy to follow road map for designing products that become first to mind for satisfying a specific need.

Just thinking of the success companies such as Facebook and Google, that are illustrative of the Hook model, is enough to realize the developing a habit forming product is good for business.

And yet surprisingly “Hooked” is among the first to address the topic comprehensively, and provide a framework with clearly defined steps.

The book focuses on how to turn a user interaction with a product into a habit. But what is a habit?

According to the book “Habits are defined as “automatic behaviors triggered by situational cues: things we do with little of no conscious thought”.

Nir’s “Hooked model” requires four ingredients: trigger, action, variable reward and investment.

In the end “through consecutive hook cycles successful products reach their ultimate goal of unprompted user engagement, bringing users back repeatedly, without depending on costly advertising or aggressive marketing”

This sounds like a dream come true for any marketer, designer, or start-up founder. But Nir is cautioning that the Hooked model should not be viewed as a “one size fits all” concept. Companies who sell infrequently bought or used products might not benefit to the full extent of using it.

The book explores each of the four elements of the Hooked model in great details and through plenty of meaningful examples. Many of the companies exemplified operate in the technology field. However these concepts can be easily extrapolated to other industries that are in need of habitual users.

What ‘s unique about this book is its practicality: the end of each chapter summarizes the key concepts are summarized as a bullet list, which makes them easy to remember. Moreover, if you are planning to make your next new product habit forming, at the end of each chapter you will find a practical “to do plan” that will help you convert the information presented into actionable steps.

Overall “Hooked “is a great read great read, and a surprisingly easy one. This book is habit-forming in itself- once you start reading it you become hooked and don’t want to put it down.

Low Budget Marketing: How to Successfully Compete and Win

Low Budget Marketing

This is a guest post by Julian Padurariu*. 

Low budget marketing is one of the most popular topics during marketing conferences and training camps I frequently attend.

As a marketing practitioner, I have been confronted with this exact challenge starting with the first serious projects I was involved in as a Marketing Manager or consultant during the early 1990’s, in post-communist Romania.

In those early days of free market economy local brands were invariably launched on a significantly lower budget than those of the direct competition, usually multi-national brands that wanted to establish a local presence.

The “low budgets” challenge has been the driving force behind my continuous search for new solutions, not just on a creative level, alongside my advertising colleagues, but also on a business model level.

Build Loyalty Through Gamification

One of the innovative solutions I strongly believe in is the concept of “gamification” – an extremely useful method to increase clients’ loyalty.

For those of you less accustomed to the term, “Gamification” at its origins, is a reverse-engineering technique used in the gaming industry, by adding game elements and dynamics in non-game environments (such as a business), in order to increase users involvement.

If this concept sounds new to you, it’s not too late to consider exploring it. Gartner estimates that it would take another 5-10 years until gamification reaches the “productivity plateau“.

But before looking for new solutions, we must understand the limitations of classical solutions.

We must adjust the way of thinking in such a manner that we would not allow ourselves to think “well, company X or Y – market leaders– succeeded, so I must succeed too”.

I would call that “a dwarf’s trap“: The dwarf wants to be a dragon, and struggles to throw flames out of his mouth.

I have bad news for you: the dragon’s strategy will never work for the dwarf.

Forget Mass Advertising

One of the “flames” the dragon is using to get the message out is mass advertising. New entrepreneurs who plan to start a business, be it a new online trading platform or selling potato chips, might be tempted to consider mass advertising to promote their new ventures.

Mass advertising should not be part of the ” low budget marketing” tool-kit.

People in advertising will tell you that the first rule of mass advertising is “Big or Nothing.“ The “Big or Nothing“ rule has been scientifically proven: success in media depends on two big parameters: quantitative and qualitative.

Qualitative parameters are extremely important and can compensate for the quantitative ones only up to a point. I will elaborate on the topic later on.

Quantitative ones though are pretty straightforward: you can’t get a fair media visibility unless the “coverage“ (how many people you reach) and “frequency“ (how many times you reach them with your message) components position you above the “efficiency threshold” and outside the area of excessive exposure.

In our low budget situation, before entering the actual exposure area, the concern lies obviously with “the efficiency threshold”. This is where the “Big or Nothing” concept originated from – when you have budgets that don’t help you go over “the efficiency threshold” barrier, you are better off allocating your low marketing budget elsewhere.

As for the quality indicators, they are obviously a lot more difficult to manage.

The lower the budgets, the more I need to emphasize how important being consistent is. That is, consistency of your marketing actions and the message being communicated.

Consistency allows companies with a low marketing budget to communicate efficiently.

One word of advice: the saying “measure 7 times, cut once” applies to low marketing budgets as well: Before pulling the trigger on your next campaign, think about the desired effect it should have on your target audience. Otherwise, every change you make while the campaign is running will get you back to square one.

When it comes to relevance, things get a bit complicated. Being relevant in business means how the consumers perceive you. Generally speaking, relevance is closely connected to with the answer to the question “Who are YOU?”

Vitamins versus Painkillers

In his very successful book “Hooked: How to Build Habit-Forming Products”, Nir Eyal divides the problems businesses are trying to solve into two categories: “vitamins” and “painkillers”.

According to Nir, “vitamin” solutions are “nice to have” people can live without. “Vitamins” usually come in the form of enhanced product features, rather than radically innovative products. Consumers have a choice to pay a price premium for a “vitamin” solution, or leave without it.

Businesses that offer “painkiller” solutions solve a burning need. “Painkillers” don’t require price premiums-they solve a real problem in a certain way, for which there is already a set budget. “Painkillers” are much easier to sell once the need-solution connection is clearly presented.

To illustrate the difference between “vitamin” and “painkiller” solutions, think of your cell phone. The device itself solves a “painkiller” need: the need of people to communicate remotely. The Camera feature on most phones in a vitamin: people can leave without taking pictures with their phones (although some might argue otherwise).

Once the difference between “vitamins” and “painkillers” is understood I believe the answer to the question “Who are YOU?” can be much more easily structured by using elements of the problem you’re trying to solve, the market you’re targeting and the resulting solution.

Let’s think of Netflix. Who is Netflix? Netflix is an online movie rental company that targets movie lovers with easy access to a huge selection of content from the comfort of their house, without charging late fees.

Choose a “Descriptor”, Not a ”Tagline”

The lower the budget, the more important it is for a business to choose a “descriptor” rather than a “tagline”, as you might not have a second chance to become visible to a potential customer.

My suggestion is to put creativity aside for a moment and look for a descriptor, the essence of your business compressed in a few words that clearly define positioning or the solution to potential customers ‘problem.

Hootsuite is the Social Media Management Dashboard. No poetry here, but anyone can decrypt on the spot what Hootsuite is all about in the very crowded segment of online apps.

Think “Community”, Not “Target Audience”

If you are thinking about sending messages to your  “Target Audience” instead of building a “Community”, your low marketing budget will quickly evaporate.

When you have a low budget, “community” can represent a very powerful force that can work to your advantage.

Unlike the dragons that have a message to send to the “target audience” through advertising, you must build a community and manage it bit by bit as you see fit.

Even some dragons, such as Apple, Bosch, Ducati, Harley Davidson, Nike, have understood the importance of building a community.

The members of their communities not only act as true brand “ambassadors”, but are also generators of ideas meant to improve products and services.

The major difference between “target audience” approach and “community” approach is the way the information flows. With the “target audience” approach, the information is spread by the “only transmitter” to “receivers”, somewhat like an artist on stage trying to entertain us with his performance.

With the “community” approach, the company sets up a conversation platform that is accessible to the masses, which is being used not only to receive the company messages, but to become “message transmitters” within a given area of influence.

The task of transforming a potential client, who had just stumbled across your company website, into a brand ambassador who would eventually set up a local fan club for your brand, might seem impossible, or extremely expensive.

This is not the case. Generating community involvement happens gradually, but almost naturally and effortlessly if guided accordingly.

In the end, the solution to the question “How do I make to most of my low marketing budget?” is provided by answering some vital questions:

  1. Who are you (as a business)?
  2. What solution does your business provide: a vitamin or painkiller?
  3. Do you use a business descriptor or a poetic tagline?
  4. Are you an entertainer for the “target audience” or a community facilitator?

Julian Padurariu is one of the most famous business strategy consultants from Romania. He began the entrepreneurial life in 2005 with the opening of Jack Trout’s consulting office in Bucharest. Based in Vienna since 2008 he is actively involved in many European countries through various consultancy projects and  workshops focused on entrepreneurship and innovation. With a General MBA from Webster and a Professional MBA from Vienna’s Wirtschaftsuniversität specializing in Entrepreneurship and Innovation, Julian Padurariu is a major supporter of entrepreneurship, often bringing to attention innovative concepts and business design methods around the concepts of positioning and differentiation.

You can contact Julian via LinkedIn.

The 8 Crucial Laws of Rebranding [Infographic]

This is a guest post by Michael Yunat*.

A brand is much more than a name. It creates an identity that consumers can associate feelings with and give attributes to.

A brand can include anything from a choice of font in a logo to a flagship product to even a signature sound. Many companies that have been around for decades still maintain the same values as when they first began.

A brand tells a story. Ideally the story will be positive, and if it isn’t, a company will try to rebrand itself. A brand identifies a company’s ethics, whether it helps give away their products to charity or underpays its workers.

A brand tells the story of a company’s history, whether it was started in a garage or owned by a billionaire. A brand evokes emotion from an audience, which is why we feel connected to our favorite brands. Consumers connect the brand with the experience of using it.

Ultimately, a brand is determined not only by the company but by how the consumers interpret it. A brand meant for a mature audience, certain alcoholic beverages for example, can surprise everyone and be picked up by a hip niche audience.

The same comic book character can be dark and gritty for one audience, and colorful and hopeful for another. Many artists and television shows unintentionally create undertones that certain segments of the population pick up on and magnify.

Consistent branding leads to strong brand equity, but there is always a trade-off when a brand can be stale or even toxic, and it’s time to think about rebranding.

Your brand is precious. How do you determine what you can gain or what you risk losing by re-introducing yourself to consumers?

GetVoIP compiled a nifty infographic highlighting Eight Crucial Laws of Rebranding. Use these rules as a guide to predict whether you will strengthen or weaken your company by rebranding.

When It's Time To Rebrand

Michael Yunat heads content curation and topic development at GetVoIP. Currently residing in Queens, NY, Michael possesses a B.A. in business media backed by an extensive background in digital communications. While constantly at work on several projects by day, Michael is also an avid basketball player and a DJ by night. To contact Michael, you can email him at myunat@getvoip.com