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.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

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.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

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.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

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.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

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.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

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

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

Marketing Challenges: Breaking Though The Noise

Marketing Challenges- Breaking Through the Noise

What do you think is the biggest challenge Marketers face?

A good friend of mine who is also a Marketer asked me this question. It took me a while to come up with an answer.

My biggest marketing challenge is making the brand message heard in a noisy environment.

Let me explain.

There are many people with great business ideas. Only a few turn those ideas into successful businesses. Even fewer manage to build a strong brand for their business.

In theory brand building is a fairly straightforward process: a great product, a unique and differentiated message, and proper communication.

I’ve worked in marketing for over 15 years, and I think I became pretty good at developing the positioning strategy for a good product.

What I find increasingly challenging is breaking through the clutter and making the brand message heard. I often ask myself:

Why is it so hard to get the brand in front of customers?

Below are some thoughts.

Firstly, the business environment is more competitive than ever.  Globalization and technology allows almost anybody with a dream to start a business. There are many opportunities to find something to sell and suppliers willing to sell to you.

On the flip side, brands are fighting for something that is very limited: people’s attention.

With the level of noise that surrounds each of us increasing daily, many consumers have become immune to any form of communication that is perceived as advertising.

Many preach the need for brands to educate and engage, rather than advertise, and that’s OK. However, in real life, if you need to reach a certain sales target in a limited time frame you need to engage in some form of advertising.

Speaking of brand education, most brands turn to social media to share “engaging” content.  I will confess that I am becoming very doubtful of its effectiveness as an educational platform.

In fact I believe social media is a big contributor to the noise pollution we are currently experiencing.

I’ve seen great content being published on social media that got little to no attention. At the same time, a home-made video of a cat doing strange things around the house goes viral. This begs two questions:

How do we define “engaging” and “relevant” content from a business perspective?

and

Is there too much emphasis on social media as an effective marketing communication tool?

It’s not fair to blame social media exclusively for our inability to communicate with our target audience. There are internal factors that play and important role as well.

One is maintaining brand focus and message consistency.

In an era of multitasking, multi-devices and shorter attention spans, brands have to communicate quickly, simply and clearly. Given the multitude of communication platforms, brand managers have the huge task of maintaining brand consistency in terms of look and feel, as well as the message being communicated.

Many brands are responding to consumers’ need for instant gratification by communicating price discounts, latest items on sale, and other short term incentives.

This communication strategy leads to the creation of a category of consumers with no loyalty to the brand, who expects everything to be free, and are always willing to switch brands in the hunt for the latest deal.

Not the type the consumers you want to build your brand on.

The final point I want to make is that breaking through the noise require money, time and expertise. There is a common belief among many executives that the new communication platforms are free, so the company should just adopt them. This is a false perception.

With the same number of work hours in a day, marketers have to divide their time among many more initiatives, or request help from outside. In the end, the human and financial costs could be quite high.

So how do we tackle this marketing challenge? I think we just need to step back when we feel being pulled from different directions, and refocus our communication efforts.

I also think we need to avoid falling into the trap of adopting every communication platform without assessing its effectiveness as it relates to our individual business scenario.

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

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

How to Deliver on Your Brand Positioning

Image credit: underconsideration.com

In 1997 ING Direct disrupted the Canadian retail banking with a very narrow positioning: “the bank of choice for those who want to save money”.

The product offering was very simple: a savings account that paid significantly higher interest than all Canadian major banks, and no service charges.

How was ING Direct able to deliver on such an ambitious promise?

ING Direct pioneered the concept of online banking in North America. This strategy allowed the bank to achieve significantly lower operating costs versus its big competitors that service customers through a network of brick and mortar locations.

The savings were then passed on to customers.

Externally, the bank’s “actions” focused on communicating a single, very motivating message: save your money (with ING). The high interest rate and lack of transaction fees were very strong reasons to switch.

The banks’s bold strategy paid off: currently over 1.9 million Canadians save their money with ING.

To answer the question above, ING Direct’s success was possible because of strategic consistency.

Think of your business like a puzzle game: you can only get the beautiful picture if all the pieces fit nicely together.

Your brand’s positioning is the beautiful picture you are trying to paint to your customers. Delivering on it depends on what your company does internally, and how it acts externally.

Strategic Consistency Defined

A firm’s strategy is consistent when its internal and external resources support its positioning. That is, strategic consistencies are achieved when all the pieces of the business puzzle are properly in place to achieve the firm’ strategic goals.

Internal consistency is achieved when the firm’s internal resources (financial, technological, human) work together to support the overarching strategic goal.

In order to maintain its competitive advantage, your firm should invest in resources that are valuable, rare, and difficult for your competitors to imitate.

Internal Consistency at Apple

Let’s think for a moment at how Apple achieved internal strategic consistency to deliver on its “Think Different” brand positioning. A few key resources come to mind:

-a world class design team who is able to constantly deliver product innovation

-an almost complete vertical integration

-company-owned network of retail stores, offering the ability to control the customer experience

-a highly secretive company policy that makes it hard for competitors to anticipate its next moves

External consistency is achieved when the firm’s external behavior and strategic moves are in line with its overarching brand message.

Decisions such as moving the brand into a new segment, or up and down the price ladder, have to be analysed from a strategic consistency perspective.

In other words, the question should be asked “How will this decision reflect on my brand positioning?”

External Consistency at Amazon

The Amazon brand has become synonym to online shopping. Some of the external strategic consistencies Amazon has implemented to deliver on its brand positioning include:

-a vast product selection that cannot be matched by any retail chain

-a website that is easy to navigate

-a brand name known to everybody

-a reputation for doing things right

Amazon continues to be the e-commerce leader by implementing strategies that makes sense given its positioning.

ING Direct becomes Tangerine

In 2012 ING Direct Canada was acquired by one of Canada’s big players, Scotiabank. The new company’s first moves reflect poorly on its ability to maintain the strategic consistency that made the ING Direct brand successful in North America.

The first move was to change the company’s slogan from the very focused “Save Your Money” to the generic “Forward Banking”.

The second was to introduce a chequing account, at a time when the bank’s ATM network was non-existent. 

Is the ING Direct brand (now Tangerine) losing its focus? As an ING customer I believe so, but only time will tell.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

Brand Promise and Strategic Trade-Offs

Image credit: Sean MacEntee on Flickr

In 2008, when asked if Apple plans to offer an entry-level notebook, Steve Jobs replied:

“There are some customers which we chose not to serve. We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that… We’ve seen great success by focusing on certain segments of the market and not trying to be everything to everybody.

Achieving success in business is all about uncovering opportunities and making the right choices.

A brand is a promise made to a specific consumer segment. Once the promise is made, internal and external consistencies have to be put in place to constantly deliver on it.

Delivering on your brand promise requires compromises. Regardless of your brand positioning, and how carefully it was selected, strategic trade offs are always required.

What Are Strategic Trade-offs?

The quote above from Steve Jobs perfectly summarizes the concept of strategic trade-offs.

Strategic trade-offs are the “sacrifices” a brand has to make in order to deliver on its positioning.

Trade-offs include consumer segments you will not be able to service, service levels you are not be able to achieve, and products that are not a good fit to your portfolio.

Competition would not exist without strategic trade-offs. A company’s inability to cover a need is an opportunity for a new player to establish itself in the category.

Some Practical Examples

Let’s take a look at some examples that will better illustrate this concept.

Dell Computers

Dell  disrupted the computer industry in the 1990 with their “sell direct to consumers” business model. This strategy offers Dell many advantages including the ability to customize each product, and offer it at a lower price to the end consumer.

Dell became the worldwide leader in PC sales in 2001.

Although successful, the sell-direct strategy also meant important trade-offs for the brand, including:

  • Irrelevance to consumers who prefer the retail experience of touching, and trying their products before the purchase
  • Inability to service a consumer segment that doesn’t feel comfortable shopping online for computers
  • Limited brand exposure versus competitors with strong retail presence
  • Inability to attract a customer base that prefer to service their computers at a physical location

Walmart

Walmart is known to adopt a cost differentiation strategy. In order to constantly deliver on its strategy, the retail chain focuses on offering a narrow assortment in each category, while the service levels are kept to a minimum.

Although immensely successful, the Walmart brand is only appealing to a specific consumer demographic. Some of the strategic trade-offs the brand embraces include:

  • Inability to service consumers who prefer a wider product assortment and a more premium shopping experience
  • Inability to service consumers who prefer to shop at the smaller, local retail store
  • Impossibility to replicate the service levels provided by smaller, independent retail stores who are able to better motivate their staff
  • Inability to expand the brand into the more profitable premium segment, due to Walmart’s “low cost” brand image

Automakers That Utilize Platform Sharing

Car companies such as Toyota, Honda and Nissan share the same manufacturing platform across multiple models. Platform sharing provide many benefits, including cost savings, and the ability to build vehicles for different market segments (Toyota and Lexus, Honda and Acura, Nissan and Infiniti).

Although great from an efficiency perspective, this strategy comes with compromises:

  • Inability to appeal to customers who prefer premium cars manufacturers only, such as Mercedes-Benz and BMW
  • Usually all vehicles sharing the same platform are affected in case of a recall
  • Inability to offer a truly unique model design
  • Higher risk of brand dilution and cannibalization

Strategic trade-offs are a necessity of doing business. Instead of trying broaden their appeal, brands should remain true their roots, and constantly deliver on their promise.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.

Lead Generation Strategies: B2B versus B2C

Lead Generation Strategies-B2B vs B2C

I am starting a series of articles on one of the most requested topics by my readers: lead generation strategies.

Providing your sales team with hot qualified leads will allow them to spend more time selling. Moreover, sales personnel hate prospecting and performing administrative tasks. They’d rather be on the road closing deals.

Anything you can do to ease their pain will boost your credibility as a marketer.

We will take a look at the process from a strategic perspective, and identify the tools that work best in each scenario.

Don’t Follow the Crowd

The herd mentality affects not only consumers, but marketers as well. We get bombarded with advice on the latest and coolest lead generation techiques every company should adopt.

You have to be on Facebook and Twitter.

You have to leverage the power of LinkedIn.

You should never buy or rent email lists.

You should automate your marketing.

Direct marketing and cold calling are dead.

The reality is we all have limited budgets, and face the ambitious task of helping our sales teams with as many new qualified leads as possible.

Embracing all this advice puts pressure not only on your budget, but on the human resources as well (we can’t be specialists in everything).

Who Are You Targeting?

The effectiveness of lead generation strategies vary depending on your business model. So the starting point should be to understand the environment you operate in: are your trying to sell to businesses, or individual consumers?

As we will discover later, the strategies for attracting new B2B customers are quite different from the ones employed by a B2C company. The corporate buyer uses a different set of criteria to analyse and commit an offer versus people who buy stuff for personal use.

The chart below is meant to give you a quick overview of the differences and similarities between B2B and B2C customers:

B2B Customer

B2C Customer

Target Audience

Narrow

Lead generation strategies should be highly targeted and the message customized to almost each individual lead

Broad

The goal of lead generation strategies is to reach as many people as possible within the target group with a specific message

 Main Challenge  Building trust  Getting customer attention in an supersaturated market
 Number of Competitors

Relatively Few

Barriers to entry are usually high in the B2B segment, depending on product complexity and cost of entry

Many

Globalization and technology has lower barriers to entry in many consumer categories

 How Products are Sold  Trust/Personal Relationship  Quality/price perception
 Sales cycle  Long  Short
Customized offering  Mandatory  Less Important (unless you market custom made products)
 Importance of Personal Selling  Vital

Most B2B companies employ own sales force

 Less important

A lot of automation possible

 Impulse purchase  Very unlikely  Likely
Tolerance to Unsolicited Calls

Medium to Low

Unsolicited calls are generally expected by professionals during business hours

Low

Consumers typically see unsolicited calls as an invasion of their privacy and huge annoyance

Time Constraints

High

Most professionals operate under tight deadlines. Making and keeping appointments is a challenge

Low

Consumers have usually more time to spare and flexible for setting appointments

Lowest Price Guarantee

Not Very Important

Price is not the most important factor int he purchase decision

Very Important

Since many categories are highly comoditized, price comparison is a given in most consumer purchases

Product Education

Very Important

Important

The chart above is by no means universally valid. At some point the separation line between B2B and B2C can  become very blurry, depending on the product being sold.

The target audience of a B2B company that sells common office supplies to business might share many of the characteristics in the B2C column.

As well, a B2C company that sells a highly complex product to consumers might be better off employing B2B lead generation strategies.

In the next post I will rank specific lead generation strategies based on their effectiveness given a particular business model.

Michael Baicoianu is a premium and luxury brand strategist, and the publisher of BrandUNIQ.com. Michael is based in Toronto, Canada.