Starting a New Business? Here Is Your Marketing Checklist (Part 2)

Once you have identified the differentiating idea and supporting elements that will set your new business apart from competitors and summarize them into a powerful slogan it is time to communicate with your target audience.

Develop you brand’s visual identity. If you think of your brand as a person then your brand’s visual identity is the person’s exterior appearance (hair style, clothing, etc.). The main elements that you need to work on are the logo, colours, fonts, and visual clues that make you brand visually distinctive. The brand identity has to match your positioning, otherwise there will be a disconnect between your brand’s personality and its exterior appearance.

Develop your communication tools. There are many ways of communicating with your potential customers in today’s environment: catalogs, flyers, websites, product samples, product presentations, etc. My advice for new businesses with tight marketing budgets is not to spread their resources too thin. Focus instead on the tools that are mandatory for your business and make use of them wisely.

Communicate your message consistently. There is no magic recipe when it comes to choosing the right communication channel(s). That’s where having an in-depth profile of your target clientele plays a critical role-you can then make assumptions and allocate your communication dollars efficiently. The good news is that the cost of delivering your message has decreased dramatically from the days when television and radio dominated the communication landscape.

In conclusion, if I have to summarize everything in three words, what I would recommend is: be different, be focused and be consistent. Good luck!

Starting a New Business? Here Is Your Marketing Checklist (Part 1)

The idea of starting a business is very tempting for many of us for different reasons: you have a great idea or an opportunity that you want to take full advantage of. You want to supplement your income. You want be your own boss. You find that being on your own is more challenging and rewarding than working for somebody else. This two-part post aims to provide new entrepreneurs with a marketing to-do list for successfully launching their business. Part 1 focuses on the first steps: crafting the differentiation strategy and developing a slogan.

Craft the differentiation strategy. The foundation of every successful business is identifying the elements that make it different from its competitors. The biggest challenge any new business has is getting customers. Why would a customer do business with you, a newcomer, and not with an established brand? Start your research with your competitors. Analyze their strengths and weaknesses, and more importantly, how they are perceived by their clientele, which you are trying to attract. Look at their websites, analyze their slogans, call their distributors, read customer reviews, forums, and books. If you have the budget hire a marketing research company to do a Brand Audit study.

Once you mapped out your competitors’ strengths and weaknesses, and the word(s) that they own in the mind of the customers, establish you differentiation idea ideally by going into the opposite direction. If your competitor is a “one-stop shop” be the “specialist”, if he’s “multinational” be “local”, if he’s “old and established” be “new and fresh”. The more you focus your new business on a specific word or benefit the more qualified customers you will attract. Avoid positioning yourself on points of parity such as “great customer service”, “your employees make the difference”, ”quality is our job one”.

Create a powerful slogan. The slogan (or tagline) should be the condensed version of your differentiation strategy. Use plain language to express your ideas and avoid the temptation of making it too short. If a slogan is too short it becomes meaningless, which is not good for a new business that nobody knows anything about. In my opinion the following slogans are meaningless: Volvo-For life, Acura-Advance, Mr. Transmission-Hey Mister you’re a friend of mine (the name Mr. Transmission is great). Examples of good slogans: “The best or nothing”-Mercedes-Benz, “The ultimate driving experience”-BMW, “A crown for every achievement”-Rolex, Better ingredients-better pizza (Papa John’s pizza).

Next week I will address the other elements that should be covered in the marketing plan for a new business: developing the brand’s visual identity, selecting the communication tools and elaborating the communication strategy.

Points of Parity versus Points of Differentiation

Points of Parity and Points of Differentiation
Identifying your brand’s points of parity and points of differentiation is the essential first step of every positioning project. That is, understanding the market you operate in and what makes your brand different from competition.

I am sure you are very familiar with slogans similar to these: “Our employees make the difference”, “Quality is our job number 1”, “We Deliver Great Customer Service”. These slogans are indeed very popular, but also a very ineffective way to differentiate a brand. That’s because they more often than not promote a brand’s point of parity instead of focusing on the points of differentiation.

My goal in today’s article is to explain these two important marketing concepts. Hopefully it will give you a better perspective on how to choose a strong differentiator, that is meaningful to the consumer, and your brand can sustain long term.

Don’t forget to heck out the brand positioning tutorials page for more articles on how to build strong and differentiated brands.

Points of Parity versus Points of Differentiation

Identifying the points of parity and points of differentiation is industry specific. There is no generic rule that can be applied across the board.

Points of parity are those elements that are considered mandatory for a brand to be considered a legitimate competitor in its specific category. It is what makes consumer consider your brand, along with your competitors. So before you work on identifying your competitive advantage, you want to make sure you identify what it takes to be a player in your category, and have all these points covered.

I will use a personal example to illustrate this concept.

I am currently in the market for a new car for my growing family. When comparing various offers, I consider the following aspects of buying and owning a car points of parity:

– a showroom located within reasonable proximity, where I can see the models

-a demo model that I can test-drive

-a 3 year comprehensive warranty

-available financing

I am not considering any car brand that is not able to meet these four criteria. Those elements will not bring any benefit to a brand if advertised because the consumer considers them as a given. (Nobody expects to buy a car with less than 3-year warranty).

On the other hand you cannot launch a new brand without making sure you meet the points of parity.

Points of differentiation are the attributes that make your brand unique. It is your competitive advantage. It is what your brand slogan should reflect.

Let’s come back to the automotive industry.

Hyundai took a point of parity and made it a point of differentiation: they were the first brand that offered a 5-year comprehensive warranty in Canada (10 in the USA), instead of the industry standard of 3 years.

Subaru made the all-wheel drive system its competitive advantage, brilliantly reflected in their slogan “Confidence in Motion”.

No car brand communicates the “3 year warranty” or “front wheel drive system” a competitive advantage. And rightfully so: these are points of parity, not points of differentiation.

The Meaningless Slogan Trap

Now let’s go back to the so-common slogans at the beginning of the article: “Our employees make the difference”, “Quality is our job number 1”, “We Deliver Great Customer Service”.

Good employees, quality, and service are a given in almost any category. Is anybody expecting to survive and grow with bad employees, poor quality products and rude customer service?

If your company is using a slogan similar to the ones in the first paragraph then it’s probably time for a brand repositioning exercise. That is unless your competition is famous for not delivering what you are promoting (be it quality, service, good employees. Then your slogan makes perfect sense. Otherwise don’t waste your advertising budget promoting points of parity. Find out what attributes make your brand unique and build your communication strategy around them.

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The Skills of A Great Marketer

Photo Credit: Ben Stanfield on Flickr

Marketing requires a very complex set of skills. Hiring a good marketer to build a brand and grow a business might be an intimidating task.

To make matters worse, with the array of self-promotion tools at their disposal, new “marketing specialists” seem to emerge daily, ready to help.

So how do you make sure you choose the right one?

A marketer is typically responsible for developing the company’s market positioning, elaborating the go-to-market strategy and tactics, and overseeing the implementation of those tactics to make sure the business goals are achieved.

During my marketing career I was fortunate to work with some excellent marketers, learn about their personality and admire their skills. Below is a list, by no means comprehensive, of the “ingredients” that a great marketer is made of:

Training– it might sound old-fashioned today, but I believe this is the foundation of a great marketer. He/she has to have a good understanding of concepts such as target market, segmentation, positioning as well as the 4 Ps of marketing: product, placement, price and promotion.

Vision-a great marketer looks beyond today and knows exactly where he wants the brand to be in the next 5 years. He realizes that brands take years and discipline to build and is consistent in communicating the differentiating idea.

Curiosity-a good marketer is always interested in what happens around him. He/she has to have a decent understanding of the various marketing sub-disciplines: market research, communications, digital marketing, event marketing, and public relations. Regular training is also mandatory.

The ability to multi-task-usually a marketer has to manage multiple projects, such as a website, a catalogue, a new brand identity development, that have a similar deadline (usually the launch/refresh of a new brand): He/she has to be able to dedicate sufficient time to each project and get them accomplished in time for the big event.

Excellent communications skills-a good marketer should be able to communicate in a very straightforward and succinct manner, in order to avoid confusion and miss deadlines.

Good people skills– typical brand management job for example involves spending 90% of the time collaborating with graphic and web designers, market researchers, event coordinators and other service providers. He/she has to be able to understand their personalities, work style and abilities, and make them feel part of the projects.

One last piece of advice: stay away from marketers who offer “marketing recipes” that they pretend are universally applicable to any business. Each successful brand has a unique competitive advantage, positioning, target market, distribution channel. As a result the marketing behind it should be unique too.

Criteria for Choosing a Brand Name

In a previous post I listed the four categories in which a brand name usually falls: family names, semi-descriptive names, initials and abstract names. Each category has its advantages and disadvantages, and there is no golden rule for a choosing a successful name.

I have been involved quite a few times in selecting a name for a brand. Based on my experience the name should:

  • Help position the brand in the mind of the consumer. Semi-descriptive names, which give customers some information about the product or service, are best in this regard.
  • Not be to generic but also not very limiting. Real life example: a auto insurance company called “Driver’s First Insurance” (a perfect name for their initial offering) decided to get into “Home Insurance”, and suddenly realized that their name is a strong barrier to getting the new message out. Their advertising is now focusing on explaining the customers that “Driver’s First” is not just for drivers, but for home owners too.
  • Be as short as possible. Short names are easier to remember and communicate than long ones.
  • Have no negative connotations in any language. This is particularly important in multi-cultural societies or if the company behind the brand wants to expand internationally.
  • Be easy to pronounce. Customers will be reluctant to talk about your new brand and recommend it if they are not confident about its pronunciation.
  • Be available. There is no point in choosing the name that you cannot protect with a trademark. Imagine the marketing resources you will waist building a brand around it just to find out that somebody else is using it.
  • Be available to register as a domain. In today’s society it’s almost impossible to build the brand without the use of Internet. Make sure you have a domain available for the name you choose.

One last thing: always go for a stand alone name rather than a brand extension. Brand extensions rarely work and end up weakening the brand, but this will be the subject of a different post.

Differentiation Strategy: The “Me Too” Strategy Can Damage A Premium Brand

A friend of mine, the proud owner of a BMW, sent me the e-mail above. He was outraged, and rightfully so. A premium car manufacturer, having an “Employee Pricing” event, just like the 3 big American car manufacturers that almost went bankrupt last year?

A premium brand is usually built on prestige and exclusivity, which has to reflect on the messages it communicates to its target market. Marketers are often very tempted to just copy the competition, “because if they are doing it, that means it’s working”. They forget about the segment in which they compete in and the emotions that their customers invest in the brand. Although this initiative may result in an increases in sales, in the long run the brand will loose its relevance to the target audience.

A premium brand is bought in most cases for emotional reasons. Let’s take the BMW example. Owning it is all about the driving sensation and the prestige that comes with being seen in one. BMW owners want exclusivity, and no associations with the drivers of ordinary cars (Ford, GM, Toyota). This is the reason they paid a premium to drive a BMW, isn’t it?

Premium brands are usually the ones that struggle the most to provide “value”, for least two reasons: increased competition in the premium segment, and attacks from “value brands” that create new market segments. However, the communication has to differ versus the “value” brands (interestingly enough BMW does a very good job at this) :

Offer bonuses rather than price reductions. BMW offers the “Luxury package” at no extra cost.

Focus on providing premium service. BMW does that with the “4 year free maintenance’ program.

Dedicate your Marketing communication budget to continuously elevating the brand. The communication materials should reflect the points of difference versus the competition in the premium segment and, just as important,as the “value” segment.

Associate the brand with “premium”. Get to know your target market in detail, including where they eat, what they do in their free time, what magazines they read. Then create the necessary links between their “habits” and your brand through product placement, sponsorship and special events.

It’s true that customers today are more informed than ever and want more “value” for their money, no matter if they are involved in a rational or emotional purchase. The amount of information they have available puts a lot of pressure on companies to deliver more. And so your brand should, just be careful what message you communicate when trying to accomplish this goal.

Naming Your New Brand

One of the first challenges every marketer faces when launching a new brand is choosing a name for it. Naming is very important in the overall brand strategy for at least three reasons: first, it is the first point of contact that your customers have with your brand, and you want to make a first good impression. Second, a well-chosen name reinforces the brand positioning in the mind of the consumer. And third, the name you choose has a direct influence on your brand building budget, as some names are easier to communicate than others.

Brand names fall into 4 categories: family names, semi-descriptive names, initials, and abstract names. Below is a quick overview of their advantages and disadvantages:

Family names, as the description implies, means that the brand is named after its founder. Some of the world’s strongest brands fall into this category: McDonald’s, Disney, Mercedes-Benz, Stanley Tools, Merrill Lynch, Harley-Davidson, Chanel, Gucci. Advantages: the family name implies personal endorsement, heritage, quality products, trust. They are mostly suitable for premium brands where the “personal touch” plays a crucial role. Disadvantages: Brands named after their founder take long a time, consistency in the message and important financial resources to build. They also require consistent and flawless delivery of brand promise.

Semi-descriptive names provide some information about the product or its uses. Familiar brands that have adopted this naming strategy are Craftsman, Intel, Microsoft and MasterCard. Advantages: this naming strategy is very “end-user friendly” and easy to communicate. Disadvantages: semi-descriptive names do not provide strong differentiation and are difficult to protect as trademarks.

Initials are a collection of letters with no evident connection to the product/service being marketed. This strategy is used by well-established companies and not recommended for new entries to the market. Examples include: IBM, GE, LG, ICI, AT&T.Advantages: initials are very distinctive and easy to remember. Disadvantages: Since initials are meaningless in the case of a new brand, this strategy requires most investment in brand building in order to create the connection between the brand and the name. They are also very difficult to protect as trademarks.

Abstract names, like the initials, provide no obvious description of the product or its uses. Examples include Nokia, Gap, Canon, Marlboro, Xerox, Kleenex, Apple. Advantages: abstract names provide powerful differentiation, with many products defining the product category (Xerox, Kleenex). They are also easy to protect as trademark and easily recognizable in different languages, making them the preferred choice for global brands. Disadvantage: abstract name requires more investment in communicating the brand and its positioning.

In conclusion your naming decision comes down to the type of product/service you want to launch, the marketing resources you have available and the ability to consistently deliver on the brand promise.


The Importance of Keeping Your Brand Focused

Mark's Warehouse

In 2010 Strategy Magazine selected “Mark’s Work Warehouse” as recipient of their “Brands of the Year” award for “developing a strong brand identity through a combination of business savvy clear vision and clever marketing”.

The clever marketing had to do, according to the magazine, with expanding the brand into the casual clothing market.

What Strategy Magazine considers a re-branding success for me it’s just another typical case of a brand loosing its focus in the quest for the “bigger pie”.

Mark’s Work Warehouse began in 1977 in Calgary with the simple strategy to sell quality work clothes. With the perfect name, a slogan very targeted to the industrial channel  (“Clothes That Work”), and a smart acquisition strategy, Mark’s Work Warehouse became the number one choice in the workwear segment in Canada.

Like most successful brands, Canadian Tire (the company who owns Mark’s Work Warehouse), was faced with a dilemma: how do you continue to grow a brand that dominates its category?

The answer was “obvious”: by expanding the brand beyond the workwear category ( estimated at $600 million) and into the casual clothing market ( estimated at $24 billion).

In order to broaden its appeal, the brand lost any reference to its established reputation as a leading workwear retailer: Mark’s Work Warehouse” becomes the more generic “Mark’s”, while the very focused slogan changes to a meaningless one: “Smart clothes. Everyday living.”

Brand stretching is pursued by many companies in quest for higher profits. This strategy of “refocusing” a brand rarely succeeds for at least three reasons:

  • You alienate your core customers who help build your brand.  I have no doubt that with sufficient resources “Mark’s” will manage to broaden its customer base. But I find it very hard to believe that the blue-collar workers will continue to make Mark’s their favorite destination  for work clothes. This move is a great opportunity for a competitor to take advantage and establish a strong position in this category.
  • You trade the “leader” positioning in a niche market with a “me too” positioning in a more competitive category. Mark’s has chosen to go from being number 1 in workwear category to the bottom of the preference list in the casual clothing category.
  • You invest more resources trying to change people’s perception than defending your established position. Mark’s will face fierce competition in the new segment. It’s possible that any profit gains as a result of this move might be offset by increased spending related to competing in the new segment.

Mark’s parent company, Canadian Tire, fell into the same trap of changing its focus from being the “tire specialist” to selling everything to everybody and competing with Lowe’s, Home Depot and Walmart.

The result: a perception of poor quality products (the company is sometimes referred to as “Crappy Tire”) and one of the poorest customer service experience in the Canadian retail environment (their Facebook page is inundated with customer complains).

Stretching the brand into another category rarely works in the long run. While the need for a brand to grow is understandable, there are other ways to make than happen while still being relevant to your core audience.

What may seem a success now (the implementation of  a new brand identity) might turn out to have tragic strategic consequences. Only time will tell.

Brought to you by: “Brand Positioning 1 on 1” Workshop

The Brand Slogan: How to Choose a Meaningful One

The brand slogan should summarize its positioning and give the customers a quick glimpse into what your brand stands for.

Besides summarizing the brand positioning a great slogan will also differentiate your brand from competition. Meaningless ones accomplish nothing, or, even worse, favor the competition.

Unfortunately more and more brands choose fancy words that have no effect on brand building. Even strong brands such as Coca Cola fall into the trap of meaningless slogans: the current “Open Happiness” does nothing to differentiate the brand. The original “The Real Thing” is much more meaningful.

An effective tagline:

  • Helps the brand differentiate from competition by owning a distinctive word in the mind of the consumer. If you want the best driving experience you buy a BMW (The Ultimate Driving Machine). If you want the best pizza you’ll order it from Papa John’s (Better ingredients. Better pizza).
  • Repositions the competition as inferior. The new Mercedes-Benz slogan does just that: people who want the best choose a Mercedes and not a Lexus.
  • Expresses the brand promise in a straight forward manner. Too many slogans make use of generic words that have nothing to do with the brand message.  Apple’s “Think different” is by far a better choice than Microsoft’s “Where do you want to go today”. The newest Toyota slogan “Let’s go places” is another bad example.
  • Uses enough words to generate emotions. The temptation today is to use a single word taglines: Acura (Advance); Goodyear (Get There); Volkswagen (Das Auto). The logic is the shorter the slogan, the easier it is to remember. However, the primary ingredient that makes people remember a slogan is emotions. So make sure you use enough words to generate emotional connections to your brand.
  • Complements the target audience. Mercedes-Benz’s current slogan “The Best or Nothing” is a perfect example. Who doesn’t want to be considered the best?
  • Preserves its meaning in different languages. This is very important for companies that plan to expand internationally.

Choosing the brand slogan is a critical step to successful brand building. Make sure you think about your competition and your brand promise when selecting the right one.

How Should A Premium Brand Respond to Competitive Price Pressure?

Imagine this scenario: your company owns a premium brand with a lot of history, strong local manufacturing content and positive attributes behind it. Back in the days when consumer had fewer choices your brand was shining and charging a price premium was not an issue. People loved your brand. But then the economy became global and your customer is bombarded with offers from your competitors for apparently similar products at a much more attractive price. If this is happening to your brand, your are not alone.

The big question becomes: how do I protect my premium brand without going bankrupt?

My recommendation: launch a new brand to successfully compete in the newly created segment.

The biggest concern that most management teams have with this strategy is the danger of cannibalizing the existing premium brand. Based on our experience, in order to be successful a few tactics should be taking into account:

  • Use a stand alone brand name, with no obvious connection to the premium brand. Don’t go for brand extensions such as X Light, X International, X Global.  Instead go slow, but safe: choose a stand alone name. The new brand takes more time and resources to build but your risk of cannibalization is much lower.
  • Develop a positioning strategy based on attributes that are meaningful for the price sensitive segment, and not for the premium one. Usually premium brands are positioned on emotions and experiences, while value brand use a product-based positioning. Think of Toyota (reliability) versus Lexus (“The pursuit of perfection”).
  • Leverage positive attributes associated with your company. If you are known for great service, speed of delivery, exceptional sales force, you can safely promote them when launching the value brand. These are attributes attached the your company, not the premium brand.
  • Be patient. Stand alone brands are built in time, especially in today’s crowded environment.

These tactics should work in both a business to consumer and business to business environment and should greatly diminish the risk of brand cannibalization.

Do you currently manage a premium brand? What challenges do you experience?