Building Emotional Connections To Your Brand

-Brad VanAuken

If a brand is able to consistently connect with its customers on an emotional level, it is much more likely to achieve strong customer loyalty. So, how then does a brand create this emotional connection? We have created a process that enables organizations to understand how emotionally connected their customers are to their brands, and based on that insight, to develop ways to create stronger emotional connections. The first part of the process is research-based and seeks to understand the ways in which customers connect emotionally to the product or service category and then to the brand itself. The second part of the process generates hundreds of ideas for strengthening that emotional connection based on the insights from the research. Next, the ideas are culled down to those that can be implemented quickly and that have the highest potential for success at the lowest possible investment. Finally, we develop a plan to implement these ideas.

So, what have we learned from using this process with our clients? First and foremost, a brand must be trustworthy. It must consistently deliver on all of its promises. All customer touch points must be in alignment on this. Related to this, an organization should never oversell its capabilities. Set customer expectations realistically.

Next, organizations would do well to be customer-centric. That is, they should be driven by meeting and exceeding customer expectations rather than squeezing one more cent of profit out of each “transaction.” In a related manner, organizations should strive to treat every one of its customers as it would a beloved friend or family member, with that same level of caring and respect.

Organizations should try to be as transparent as possible in their interactions with customers so that customers don’t feel as though the organization is “hiding something from them,” or worse, lying to them or cheating them. It is always helpful for an organization’s managers and its other employees to “live the brand” with their customers or to at least “walk a day in their customer’s shoes.” The simplest way to do this is by monitoring customer service calls for at least one day each quarter. Better yet, people could experience the brand directly with their customers much as Harley-Davidson executives do as they ride and interact with their customers on H.O.G. (Harley Owners Group) rallies. Another strategy is to surprise and delight customers with extraordinary service as often as possible so that the customers themselves become the brand’s biggest evangelists. Create some brand legends. And the realization that happy employees make for happy customers cannot be overemphasized.

How does an organization achieve these ends? Through hiring criteria that includes ways of interacting with customers, balanced scorecards that include customer-centric measures, rewarding employees for treating customers well, designing specific brand proof points into each point of customer contact, developing new points of customer contact, simplifying and externally communicating customer processes and customer service policies, training customer facing employees in the art and science of superior customer service, designing ways for employees to experience the brand as their customers do, establishing a set of “guiding principles” by which employees should live and treating employees with the same caring and respect with which they should treat their organization’s customers.

Brand Naming Contest Helps Boeing Soar

-Steve Rivkin

We’ve reported before on the use of contests in naming. The maker of Crayola products, for instance, urged crayon enthusiasts to help rename an old color, and name suggestions poured in.

For the first time in its history, Boeing encouraged people around the world to name its newest airplane. In the process, the firm reaped a public relations windfall.

After tallying 500,000 votes in more than 160 countries, Boeing announced the winner at the Paris Air Show in June 2003: “Dreamliner” will be the name of the Boeing 7E7 aircraft.

The three other choices were eLiner, Global Cruiser and Stratoclimber. Consultants came up with a hundred potential names, and Boeing settled on those four. Through a marketing alliance with AOL Time Warner, people placed votes at a website devoted to the new jetliner.

The unusual contest was designed to generate some much-needed buzz for the new 250-seat plane – something that had been lacking since Boeing shelved plans for a fast, sleek and sexy sonic-cruiser in favor of the more conventional but super-fuel-efficient 7E7.

The hype happened. Boeing’s hometown newspapers in Seattle were all over the story, but so were Business Week, the wire services, radio stations – and media all over the globe. Breathless updates provided the play-by-play: “As of yesterday, more than 90,000 visitors to the site had voted, and Global Cruiser now has a slim lead…”

The use of special public relations events to promote companies is picking up steam. Boeing was smart to be among the first large firms out of the box to sponsor a global naming contest, thus generating global publicity. Watch how many others now follow their lead.

The grass-roots tactics actually are a new direction for Boeing, which traditionally focuses its sales and marketing efforts on airline executives. With this contest, the aerospace giant is taking its message straight to consumers in hopes they eventually will make their travel choices based on the brand of a jet in an airline’s fleet.

Aviation buffs will remember Boeing’s early passenger planes with names such as the Boeing Clipper, the Stratoliner, and the Stratocruiser. Its jet-age planes, starting with the 707, and most recently the 777, have only had 7-series designations.

Brand Licensing

-Pete Canalichio

An easy way to get started on the topic of Brand Licensing is to break the subject into its two component parts – brand and licensing. Let's start with the latter part first. What is licensing? Licensing means nothing more than the renting or leasing of an intangible asset. An example of intangible assets includes a song (Somewhere Over The Rainbow), a character (Donald Duck), a name (Michael Jordan) or a brand (The Ritz-Carlton). An arrangement to license a brand requires a licensing agreement. A licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor). Before we move any further, let's discuss what we mean when we use the term brand.

What is a brand?

According to Philip Kotler and Gary Armstrong a brand is defined as “a name, term, sign symbol or combination of these, that identifies the maker or seller of the product” or service. The brand or its legal term, trademark, affixed to the product helps the consumer understand where it was manufactured or produced. In essence, a trademark simply states “I made this”. From the brand owner's perspective, it distinguishes the products or services from those of its competitors. Consumers, in turn, can be assured the product they are purchasing is exactly what they want. Based on its reputation, a brand will convey a level of quality, reliability and durability.

Why do companies brand their products?

The primary reason companies choose to brand their products is to differentiate them from their competitors' products. For example, most consumers have no problem differentiating a Coke from a Pepsi. By giving their products a brand, a company or brand owner can begin to communicate with their consumers regarding the attributes of their products. Over time, a consumer can rely on the brand to connote not only a product's value but also its reputation. If a consumer likes what a brand represents and they have purchased it before, there is a higher likelihood they will choose the brand of their preference over a competitor. In fact, consumers will often purchase a brand for the first time if it has a strong reputation or if it is used by friends or celebrities. Brands also lead consumers to develop certain expectations of products. The longer they experience predictable, consistent quality and performance, the more they will expect any new products sold under the same brand to have the same. The brand, therefore, adds value to these products.

For example, customers expect new products sold under the BMW brand to be of the same quality as an existing BMW. Consumers will associate a brand with a certain price level and standard of performance. If we look at two distinct watch brands: Rolex and Timex, one is associated with a high price and high performance and the other with value through a low price and durability. These same attributes can also be of benefit to businesses. Many companies as well as consumers look to UPS for their shipping needs because Brown has developed the reputation of actually adding value to an organization through its understanding of its customers' needs and its consistent reliability.

When consumers and businesses get into the habit of buying certain brands, they automatically buy them again. This reduces the amount of time and promotion needed to make future sales, and it results in brand loyalty. According to Philip Kotler, brand loyalty, in marketing, consists of a “consumer's commitment to repurchase or otherwise continue using the brand" and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. Brands usually pass through successive stages of brand loyalty, which is the customers’ allegiance to a particular brand. The stronger the brand loyalty, the higher the value of the brand and the greater revenue it will drive for its owner.

Why do companies license their brands?

As we said above, a licensing agreement authorizes a company which markets a product or service (a licensee) to lease or rent a brand from a brand owner who operates a licensing program (a licensor). Companies who know their brands well will have a good understanding of the equity of the brand. A brand's equity is derived from the awareness and image a brand holds with its consumers.

Licensing enables companies whose brands have high preference to unlock a brand's latent value and satisfy pent up demand that exists. After Apple launched the iPod a number of years ago it created an immediate need for accessories; Apple could have chosen to manufacture and distribute these themselves, but decided they were not core to the business and therefore, chose to satisfy the need through licensing. Licensing the iPod brand enabled many companies to produce all kinds of terrific products to make the iPod more user-friendly and enhance the listening experience. Examples include the Bose Sound System with iPod docking station, other products that enable an iPod to be heard through a vehicle's built-in stereo and iPod holding devices that allow users “to take their music with them” when they go running. All these accessories are sold by licensees.

Apart from benefits to licensors, there are benefits to licensees as well. Licensees lease the rights to a certain property for incorporation into their merchandise, but traditionally they do not share ownership in it. Having access to major national and global brands, and the logos and trademarks associated with those brands, gives the licensee significant benefits they previously did not possess. The most important of these is the marketing power the brand brings to the licensee’s products. Building a brand from scratch can take years, millions of dollars and a lot of luck. The company which licenses a brand gains immediate access to all the positive brand and image building that went before it. The licensee also takes with them the reputation of the licensor. Often this “halo” effect can translate into many intangible and immeasurable benefits such as returned calls, an agreement to meet, or simply the benefit of the doubt.

Using licensing to enter new categories

Often brand managers will enter or extend their brands into new product categories to drive strategic growth for the company.

For example, Crest several years ago extended its brand from toothpaste into whitening (Crest Whitestrips). Before, Procter & Gamble (P&G), the owner of the Crest brand launched Crest Whitestrips, they conducted research to understand if the brand had permission to enter into the retail whitening category, long held by established brands such as Rembrandt and Aquafresh. P&G wanted to find out if consumers would expect Crest to offer a whitening product and if so, based on the preference for the Crest brand, purchase this new product. As we know Crest Whitestrips have performed well since their launch in the market and have achieved high rankings and advocacy ratings. While P&G decided to source the product overseas and distribute globally, they could have chosen to manufacturer it themselves and distribute or enter the market through licensing. In the case of P&G's Mr. Clean brand, P&G discovered that consumers expected them to sell cleaning accessories under the Mr. Clean brand. In this case, P&G decided to enter the market by licensing the category to Magla, a company that already had expertise and presence in this category.

The diagram below illustrates the different stages that are a part of the Licensed Product Process Flow:

What are the expectations of Licensors and Licensees?

Licensors expect that the licensee will be committed to investing in the category they license. This means they will work hard to understand the essence of the brand and develop their licensed product in a way that captures that essence. In other words, the licensed products should connect with the consumer both functionally and emotionally. If the licensee does this, the products they develop will normally be approved without delay or difficulty. To achieve this takes time and money. So while both parties want to commercialize the category as soon as possible, the licensor will expect the licensee to start with building the brand into the product first. The licensor will also expect the licensee to be familiar with the contract and to meet the obligations of the contract. That is why it is important for the licensee to ensure all employees in the licensee's organization working on the license are familiar with its contractual obligations. For example, when a product becomes approved, the licensor will expect the licensee to commercialize the licensed product expeditiously in each of the authorized channels. Finally, the licensor will expect the licensee to meet or exceed the projected sales targets for the category as outlined in the contract. When all of these things happen, the result can truly be award winning products that meet or exceed annual sales and royalty projections.

Licensees, in turn, expect that the license they have acquired will provide them with sales growth, and rightfully so. This sales growth may be in the form of growth within existing channels or the opportunity to enter a new channel or new market. To accomplish this objective, licensees expect that the brand they are licensing is as strong or stronger than they believe or have been told, that it will open doors and ultimately help them meet or exceed their business objectives. Moreover, licensees expect that the licensor or their agents will run a simple, straight forward licensing program that will not administratively tax their organization. Finally, they expect that the licensor will approach the licensing relationship with a win-win attitude that will allow them to move quickly to take advantage of opportunities that present themselves. Because licensing contracts obligate the licensee to sales targets and royalties, the licensee's goal will be to quickly achieve sales of licensed product to meet these requirements.

Royalty and Payment Flow

Royalty is the monies that are paid to a licensor by the licensee for the right to use the licensed property. It is calculated by multiplying the Royalty Rate by the Net Sales. Below is an example of how the royalty payments would flow from the retailer to the licensee and ultimately to the licensor. The example assumes a 10% royalty rate.

Brand Licensing is probably one of the least explored methods to enter a new product category by most brands. However, we hope that through this module, we have been able to explain what Brand Licensing is and the numerous benefits that it has to offer both to licensors and licensees.

Needless to say, the entire process is lengthy and time consuming. One must also keep in mind that the goal is not to achieve the license but to make a success of it and the activities that follow the signing of the contract. These processes, if executed well, on the one hand, can ensure huge success of the program. While on the other hand, if either the licensee or the licensor do not live up to their commitments, it can affect sales, and more importantly the reputation of the brand.

Google and the Value of Branding

-Paul Parkin

So Google’s potential withdrawal from China clearly allows them to play the moral high card and exhibit adherence to their brand values – epitomized by their motto “Do no evil.” Despite the significant business implications, they prioritized safeguarding the information and trust they’ve garnered from users around the world – and we applaud them for it.

But, as we all know Google’s footprint in the Chinese market was still nascent with local Chinese search brands like Baidu, Youku and Sogou established as the dominant players. Still with its proven tenacity and continuous innovation, Google would have undoubtedly expanded that footprint and still may.

Whatever the rationale, Google’s stance raises the bigger question – what will other global companies in the massive Chinese market be willing to sacrifice for the sake of business over brand value? At least 34 other technology companies including Adobe, Microsoft, Northrop Grumman, Symantec and Yahoo are all believed to have been targeted as well. We are still awaiting responses by most of these companies, who are looking into the allegations – although Microsoft, a common victim of global cyber-attacks, has stated that for now it’s still business as usual in China.

So has the brand gauntlet been thrown?

Are we about to see other companies evaluate the role of their brands in China and act out in response? Or, is it more about keeping your head down until it’s all blown over. Maybe their brand values are less dramatic than Google’s and their actions less scrutinized by the world. But they must consider what role do brand values play when juxtaposed with business ambitions? How will other brands balance the two under challenging circumstances?

Perhaps more importantly, this issue raises the question of what brand values really mean relative to financial performance and shareholder value. How are they prioritized amongst employees who are expected to deliver on brand values and business results? When a company upholds a motto like “Do no evil,” how do the employees who are asked to live by those values contribute to the debate? Perhaps when issues of ethics are involved it’s about time to start asking them firsthand.

Islamic branding: Is Bangladesh ready to cash in?

-Mishu Rahman

THE world is slowly but surely realising the importance of the "halal" branding as major companies around the world move in to capture a global Muslim community, where the "ummah" brings together nearly 1.8 billion people around the world.

The majority of those people are in Asia, particularly South and East Asia. It's also a very young demographic -- 52% are under 24. This means a trend-setting, ambitious, and internationally connected market is at hand here.

"The third one billion market" after China and India has attracted a lot of attention given its economic potential. The gathering momentum is obvious with leading international banking giants creating HSBC Amanah and Standard Chartered's first "saadiq" Visa gold card to Ogilvy and Mather's May 2010 launching of Ogilvy Noor, "offering expert, practical advice on how to build brands that appeal to Muslim consumers, globally."

This all shows how the western world and a global audience are taking the Market of Islam seriously.

The Saïd Business School, Oxford University, will host its inaugural Islamic branding and marketing forum in July 2010. The forum aims to bring together over 250 business leaders, branding and marketing experts and thought leaders to discuss the key issues that face this growing market.

According to the Pew Research Center a comprehensive demographic study of more than 200 countries finds that the market for Shariah-compliant products or services totals $2 trillion annually and is growing by $500 million annually.

Only 20% of the 1.8 billion Muslim population belong to the Arab world, with the majority in growing Asian economies that carry Muslim values and are open to adopting hi-tech lifestyles at par with any western country.

No wonder, therefore, that there is massive interest amongst non-Muslim owned companies about how to enter and penetrate this global market, which spans many industries, including finance, food and beverage, cosmetics, healthcare, pharmaceuticals, logistics, tourism, fashion, and others.

The halal appeal, depending largely on core values, calls for consumers to trust the authenticity and cleanliness of the product, and thus, draws on a brand loyalty which will be difficult to shake off -- it's a brand builder's dream tool it seems!

At the 6th World Islamic Economic Forum (WIEF) in Malaysia this month, leaders of a diverse political, economic and ethnic arena agreed on the strength of the Islamic branding and the need to cash in on the significant interest it is generating in the world today.

Bahrain's Ethmaar Bank's vice-chief pointed out that when the Islamic finance history will be written in the future, two non-Muslim names will be featured as its biggest drivers, instead of any Muslim individual.

One individual is Britain's former Prime Minister Gordon Brown who pioneered plans to make Britain the most Islam-friendly nation in the world and London a global centre for Islamic finance.

The other is French finance minister Christine Lagarde who announced France's intentions to make Paris the capital of Islamic finance.

Islamic countries have always worked more than conventional banking counterparts in regulating and tightening the industry specially after a crisis, and in today's global economy reeling from financial meltdown, the relevance of Islamic finance has gone up in leaps and bounds.

Even the Duke of York Prince Andrew, speaking at the WIEF said that there is no scope to stay aloof and not share ideas and best practices of Islamic finance with a global audience to avoid another meltdown in future.

He also said that the new UK Islamic Finance Secretariat (the first Islamic finance trade body in the UK), was launched at the end of March to promote and develop Islamic finance in the UK further, with 22 Islamic banks already operational, 20 Sukuk issues in the London Stock Exchange and 20 law firms in London providing specialist services on Islamic finance in London.

Bangladesh has seen how the "halal" branding can appeal to our local market when in the mid 90s the halal soap concept threw a leading international soap brand into dire straits.

Islamic finance started off in the early 90s in Bangladesh. However, the industry suffers from a lack of unified Shariah rulings, absence of an Islamic inter-bank money market , absence of courses in universities on Islamic financial products, shortage of skilled personnel who are well-versed in the complexities of this specific sector, and difficulty in identification of Shariah-compliant production and service chains are holding back potential of local financial institutions, local manufacturers, and service providers from signing up on this new economic wave.

Bangladesh has been working with Malaysia's Halal Development Corporation and other partners of the D-8 (eight developing Islamic countries) for a few years now, without much result.

A halal certification board, whether locally set up or integrated with OIC standards, could bolster our access to export markets. Bangladesh is frequently cited in global summits for its success in micro-finance and the success of economists from Bangladesh in changing the way the global economy will be shaped in the future.

Yet we are failing to set more such success milestones in bringing about great case studies in halal products and services production, marketing and distribution, while Japan, Korea, Indonesia, Malaysia, China and India are fast setting up infrastructure, guidelines and facilitative bodies to cash in on the Islamic branding potential.

Surely, the local market and export market combined, and with eager non-residents waiting for investment opportunities that build bridges, our economy needs to arm itself with all necessary platforms and guidelines immediately to move on to "greener" pastures.

Mishu Rahman is the Editor of PURPLE magazine and CEO of Media Arts & Technology Research. She can be reached at PURPLEbd@gmail.com.

Principles Of Marketing

-Al Ries

A number of people have asked us to summarize our marketing principles in a simple, easy-to-remember way.

Good thought. Having written (or co-written) 11 books on the subject, I can see how our basic principles can get buried in a blizzard of examples and case histories.

What’s the No.1 principle of marketing, at least as far as we’re concerned?

It’s the principle of focus. You narrow the focus in order to own a word in the mind of the consumer.

Without a focus, it’s very difficult to build a strong brand. And without a strong brand, any company’s future is in doubt.

While “focus” should be the key ingredient in any marketing campaign, it’s not the whole story. So we developed an acronym called “FOCVS” which does sum up our key thoughts.

FOCVS, a word using the original alphabet of the Roman Empire, consists of five key elements.

F is for “First.”

Nothing works better in marketing than being the first brand in a new category in the mind.

• Starbucks in high-end coffee.

• Red Bull in energy drinks.

• BlackBerry in wireless email.

There are two issues, however, than many people miss. The first issue is what we mean by being “first.”

It’s the first brand in the mind that matters. Not the first brand in the category. Powells.com was the first Internet bookstore, but not in the mind.

The first brand in the mind was Amazon.com.

The second issue is “focus.” It’s always possible to become the first brand in a new category by narrowing your focus.

Take Dell which became the world’s No.1 brand of personal computer. Dell wasn’t the first personal computer in the mind. (Apple, IBM and a host of other brands got into the mind long before Michael Dell’s creation.)

Dell Computer narrowed its focus to direct sales only, the first brand to do so. This was the key decision that made the Dell brand a worldwide success.

Dell didn’t get started until 1984, nine years after the first personal computer hit the market. By 1984, the market was saturated with computer manufacturers. As Business Week reported in its August 8, 1983 issue: “Pounding on corporate doors are more than 150 makers of personal computers.”

Suppose you had said to one of these 150: “Let’s narrow the focus to direct sales only.”

That’s probably the opposite of what they wanted to do. “We need more distribution, not less,” might have been the likely response.

It gets worse. In that same issue, Business Week reported: “Computer and office automation companies are beginning to pitch comprehensive office systems that offer everything from personal computers to large central computers as well as the communications to connect all the equipment. This list of companies includes Burroughs, Data General, Digital Equipment, International Business Machines, Sperry, and Wang.”

(None of these PC brands are currently being marketed.)

Narrow the focus? Everybody was doing exactly the opposite. Expansion, not contraction was the order of the day.

It’s also the order of today’s day. You’ve probably noticed that Dell has joined the expansion crowd with predictable results.

What mystifies many marketing mavens is how two companies can use the same strategy with diametrically different results. One is successful; the other is not. A mystery that can be solved by assuming that the successful company has superior products.

And we’re left with the same old canard: The better product wins in the marketplace.

Hewlett-Packard is expanding its product line at the same rate as Dell. By 2006, the two companies had virtually identical worldwide PC market shares. Dell 17.1 percent. Hewlett-Packard 17.0 percent.

Three years later, Hewlett-Packard’s market share is 19.9 percent and Dell’s market share is 12.8 percent.

Even more ominous is Dell’s drop in net profit margins. In the decade ending in 2006, Dell had a net profit margin of 6.2 percent. Last year it was 4.1 percent versus Hewlett-Packard’s 7.0 percent.

What differentiates Hewlett-Packard from Dell? Hewlett-Packard is perceived as the leader in personal computers. And “leadership” is the most important aspect of a marketing program. You lose your leadership (as Dell has done) and you lose your marketing power.

Dell used to mean “direct.” What does Dell mean today?

A company with problems.

O is for “Opposite.”

What if you can’t be first in a new category? Is there no hope? Sure, there is.

Just be the opposite of the brand that did get into the mind first.

Red Bull came in 8.3-oz. cans, so Monster came in 16-oz. cans and rapidly became the No.2 energy-drink brand with 25 percent of the U.S. market.

A number of years ago, all perfume brands were feminine. So Revlon introduced “Charlie.” For three straight years in a row, Charlie was the world’s best-selling perfume. The Home Depot is a messy, male-oriented home improvement warehouse, so Lowe’s became neat, clean, female-oriented and a strong No.2 brand.

Walmart is “cheap,” so Target became “cheap chic” and a strong No.2 brand.

Stuck in the mushy middle was Kmart which went bankrupt.

Coca-Cola is the old, established cola brand, the real thing. Your parents drank Coca-Cola. So Pepsi-Cola focused on the younger crowd. The Pepsi Generation. (An idea Pepsi needs to reprise.)

Look at the numbers. The last flickering of the Pepsi Generation idea was in 2002 when Pepsi-Cola ran the rather insipid campaign “Think young. Drink young.” That was the year Pepsi was 35 percent behind Coca-Cola in sales.

In 2003, Pepsi switched to: “The joy of Pepsi.”

In 2004: “It’s the cola.”

In 2009: “Refresh everything.”

Today, Pepsi is 41 percent behind Coca-Cola in sales.

In marketing, the rich get richer and the poor get poorer. Why is this so? Because the rich generally own a word in the mind (leadership) and the poor do not.

Refresh everything? Pepsi should be trying to refresh something. My choice would have been the younger generation.

C is for “Category dominance.”

What is the primary objective of a marketing program anyway? Is it to increase sales? To increase profits? To build a brand in consumers’ minds?

All of these things are important, but they are only markers on the road to success. The primary objective of any marketing campaign is to dominate a category. When you can do that, your long-term success is almost guaranteed.

(Until the category evaporates, but that’s another story.)

Take Sony, for example. In a recent survey of 3,600 Asian consumers the No.1 brand was Sony. In a recent survey of of 1,500 American consumers the No.1 brand was Sony.

Like most Japanese electronics companies, Sony is heavily line-extended. Sony puts its brand name on television sets, videocassette recorders, digital cameras, personal computers, cellphones, semiconductors, camcorders, DVD players, MP3 players, stereos, broadcast video equipment, batteries and a host of other products.

In which categories is Sony the leader?

I don’t know and I’m pretty sure that most consumers don’t know either. Sony’s lack of a leadership perception in any individual category, in my opinion, is the reason for Sony’s lackluster financial performance.

In the past 10 years, Sony has had revenues of $681.6 billion and net profits after taxes of $9.5 billion, or a net profit margin of just 1.4 percent. Which is one reason Sir Howard Stringer is now Sony’s CEO. (When a Japanese company is run by an Englishman, you know the Japanese company is in trouble.)

Compare Sony with Nintendo, the company that dominates the videogame player category. In the past 10 years, Nintendo has had revenues of $75.3 billion and net profits of $11.5 billion, or a net profit margin of an astonishing 15.3 percent.

Ask a few marketing managers which is the stronger brand, Sony or Nintendo? Don’t be surprised if most of them say “Sony.”

In category after category, well-known, highly-admired global megabrands are trying to compete with narrowly-focused brands. Invariably the narrowly-focused brands are the winners.

Take Duracell, the leader in appliance batteries. Sony, Kodak, Toshiba and other companies with well-known brand names have tried to compete with Duracell in the battery business with little to show for their efforts.

The category is the key to success. The brand is only a tool to facilitate that process.

V is for “Visual hammer.”

The verbally-oriented left brainers who run most major companies don’t seem to understand the power of a visual.

Take Boston Chicken which early in its history changed its name to Boston Market and promptly went bankrupt.

Why in the world would they have done that? Boston Chicken was the first food chain to feature “rotisserie chicken,” an easy-to-visualize concept.

But how do you visualize “market?”

Every brand needs two things: (1) A verbal nail to pre-empt a conceptual idea and (2) A visual hammer to hammer that conceptual idea into consumers’ minds.

Some effective verbal nails and their associated visual hammers.

• “The real thing” and the hobble-skirt Coke bottle.

• “Marlboro country” and cowboys.

• “Not from concentrate” and the straw in the orange.

• “The shoe that breathes” and the smoke from a Geox.

• “Engineered like no other car in the world” and the TriStar logotype.

• “King of Beers” and the Clydesdales.

One important point. The verbal decision should comes first, not the visual. That’s true even though the visual is often more powerful than the verbal.

Take the Marlboro cowboy. While the American cowboy is a universally-admired symbol, it would be useless for a brand that didn’t want to hammer the “masculine” idea into consumers’ minds.

The Budweiser frog and the Aflac duck are striking visuals, but what words do they hammer into prospects’ minds?

In Budweiser’s case, the “Bud . . weis . . er” slogan was redundant.

In Aflac’s case, “We’ve got you under our wing,” is a relatively weak slogan.

S is for “Second brands.”

In the boardrooms of corporate America, you seldom hear the word “focus.” A common perception is that “focus” means sacrifice and what left-brain CEO wants to do that.

What you do hear a lot of is the word “expand.” How do we expand our brand into more categories, more price points, more distribution outlets, etc.?

The FOCVS answer to that question is the “second brand.” Keep your existing brand focused and launch a second brand to exploit a new market.

• As Levi’s did with “Dockers.”

• As Toyota did with “Lexus.”

• As Black & Decker did with “DeWalt.”

• As Hanes did with “L’eggs.”

Another common perception is that the launch of a second brand requires a major advertising investment. Not true.

When you study the histories of famous brands, you are stuck by how slowly those brands took off. That is true whether the brands were initially supported by massive advertising or not.

• It took Red Bull 9 years to reach $100 million in sales.

• It took Microsoft 10 years to reach $100 million in sales.

• It took Walmart 14 years to reach $100 million in sales.

• It took Gatorade 18 years to reach $100 million in sales.

A successful new brand (Red Bull, for example) is usually based on a new category (energy drink.) At first, consumers are leery of buying such brands because they don’t fit into existing buying patterns. Advertising doesn’t have the credibility to break down those barriers.

The best way to launch a new brand is with PR. Unlike advertising, PR has credibility with many consumers. Then, too, PR drives word of mouth which is the ultimate in brand credibility.

Since a PR campaign is usually far less expensive than an advertising campaign, PR is a better fit with the slow growth pattern of a new brand.

Ultimately, of course, any new brand runs out of PR potential. That’s the time to switch to advertising.

F . . O . . C . . V . . S. That’s a summary of our marketing principles in a simple, easy-to-remember way.

Marketers Need To Better Understand Creativity

-Derrick Daye

It can be said that creative advertising is like brain surgery. When advertising is artfully done it cures people of the status quo by activating neural circuitry.

To be creative artfully requires a dynamic mix of imagination and understanding of how the world might work. This is not a matter of being correct, but rather a matter of making the audience wonder,

provoking a self-referring reverie that elicits an expanded idea of ones-self and how the world works. As a result, we see anew.

This, of course, flies in the face of traditional methods of measuring advertising effectiveness. It also runs counter to today's corporate metric-mania and near incapacity to conceive bold strategies and innovations.

Insight is the coin of business success. While numbers can provide a means for measurement they cannot "embody," or suggest, meaningful insights into the human experience. At worst, numbers provide an excuse to abdicate decision-making responsibility while placating executives desirous of propagating 'business-as-usual.

What's Needed for Creativity?

Creativity requires two things: focused subjectivity and doubt. One needs the ability to focus on something long enough to conjure possibilities not overtly manifest in the moment, along with an acknowledgement that not everything is known.

The unknown is fertile soil from which a world of wonders can be conjured. Here mere facts and data are circumvented in a non-linear, symbolic, not wholly rational way. The mind plays a cognitive trick on

itself by creating metaphor. "I call what I don't know by name something that I do know."

This mental leap-frogging allows the creative impulse to extrapolate unknown scenarios. It moves from the past, which instigates an inkling that lays the basis for the beginning of a new narrative, to a springboard that weaves a web of new patterns and associations, to an insinuation of the future kicked up by metaphor.

This process produces, from the outside-objective point of view, what can be perceived as seemingly off-topic meanderings. But nothing could be farther from the truth.

An Open Playfulness without NO

What is in operation is a kind of playfulness with ideas that is essential for creativity. This toying around contains a bunch of NOs - NO analyzing (yet), NO doubts. NO pressure to conform. NO pretense. NO

restrictions. NO judgment.

Those who are playfully creative possess a curiosity given backbone by their expectation that they will find what they seek even though they don't know what exactly that is.

People from many walks of life actually live this way: writer, designer, scientist, parent, small business owner. All share a belief in a beautiful human quality - Directed Serendipity.

Just listen to them, "I have a plan which allows me to begin to move forward, and in doing so I learn about myself such that when other doors open I sometimes walk in. But you have to have a plan to switch from

the plan."

Another version, "You go down a path and things evolve. By adapting to randomness you shape, but do not control, your end point. You define your end point by your own reaction to it: Ah, ha! I like this. This

is for me. This is me."

Buffeted by a Directed Serendipity

People who allow themselves to be buffeted by directed serendipity live at the creative point of becoming -who they are and what they do are the same. They don't know - and don't need to know - the end. They are

open to the process as process, and are gregarious with their fledgling notions. They share ideas before they are fully formed. They want camaraderie. They want feedback. They're excited.

In a state of directed serendipity you first focus on problem structuring rather than problem solving, seeking to understand rather than to explain. You try to comprehend meaning from the inside out, in

its unfolding. You are not approaching the world from an intellectual stance.

Einstein, in a 1945 speech at Princeton, gave elegant voice to this perspective:

"Words or data, as they are logically written or spoken, do not seem to play any role in my primary mechanism of thought. The psychical entities that do seem to serve as elements of thought are certain signs and images. These elements themselves are visual and muscular in type, originating in the intuition of the body." (emphasis added)

The creative communicator is an alchemist of thought, attending to the reasoning of emotion. That's what they should get paid for. That's what they need to have time to do. In their natural habitat, they are

artful image-gatherers, whose only enemies are cynicism, number crunchers and arbitrary tinkering.

Corporate executives should embrace their creatives and let them attack the status quo. Then CEO, CMO and their courtiers can sit back and count the profits.

Contributed by: Dr. Bob Deutsch, Brain-Sells

Brain Scan Strategy vs. Tobacco Marketers

-Martin Lindstrom

Ever wondered people still keep puffing away despite the fact that we’re better informed about the dangers of smoking than ever before? And despite the fact that there are no ads around? And despite the fact that you can’t consider smoking inside but instead have to relegate yourself to a corner with nothing but a seedy over-filled ashtray for company?

I wondered why smoking remained so prevalent, given all these discouraging factors. My intrigue helped inspire part of the world’s largest neuromarketing study ever undertaken. Project Buyology scanned the brains of smokers as they were exposed to all the stuff we thought should be encouraging them to quit smoking. Like dire health warnings on the cigarette packs and those nastily graphic anti-smoking commercials.

The shocking revelation from this part of the study was that, as you will have noticed yourself, the health warnings and anti-smoking messages have no effect at all in helping people give up the habit. Even more astounding is the finding that these health warnings and other ostensibly discouraging messages have the opposite effect entirely. Instead of helping people to quit smoking, they in fact encourage them to smoke even more. At least, this is what the most sophisticated brain scanning now tells us.

So, where does this leave us? If health warnings, a ban on tobacco advertising, and tons of education about the risks of smoking don’t do the trick, what can we possibly do to save the hundreds of thousands of people dying from smoking-related diseases in the United States every year? Do we need even bigger warnings on packs? Even more graphic anti-smoking commercials? Or something totally different?

The tobacco industry seems to get it. In fact, more than any other industry I know of. I tend to refer jokingly to the fact that the ban on tobacco advertising made the industry as clever as it is. Thanks governments everywhere! However, neuroscience might be the tool the world needs to help us understand the truth and lies about why we buy, and the science of the desire to smoke.

If you ask the Brits, they are inclined to think that even the explicit health warnings – displaying gangrenous limbs, mouth cancers and amputation – plastered on cigarettes sold in Australia, Brazil, Thailand and Canada still aren’t instructive enough. And they may be right. For ethical reasons, Project Buyology was not able to test people’s responses to these graphic images. But despite us not being allowed to test these pictures, I believe that they have no influence in persuading smokers to quit. The British believe in blank packs. Yes, you read it correctly. Packs with no graphics, logos or messages. Just pure blank cardboard. My response to this is go for it – if you want young people to smoke even more.

Just think about it: if you’re a 16-year-old, those white boxes would look pretty cool and enticing. Nothing written on them, glowing anonymously in the midst of the commercial clutter around them. A quiet patch in the consumer landscape that’s apparently not clamoring for attention. Those understated, unnamed items would make little show, and great success, of getting a kid’s attention. The anti-commercial tone would spike a sense of mystery and plug into the underground spirit that’s ever-present in youth counter culture. No, in my opinion, blank packs are not the answer.

I believe the health warnings need to change. We’ve discovered, through Project Buyology, that cigarette pack health warnings have cultivated a Pavolvian effect in smokers. Smokers are stimulated to light up when they see the images, the warnings, the typeface the messages come in. We need to disrupt the vicious cycle that has developed. The thing is, smokers don’t read the warnings. They see a graphic which, in around 12 seconds, makes them feel good as they inhale nicotine. This cycle can only be broken by changing the health warning formats, composition and design frequently – I mean really frequently. Large formats, no formats, picture formats, red formats, on the back, on the front – you name it. The changes need to be dramatic and enforced often. This way the brain will not manage to link the health warning with pleasure.

But this is not the full answer. We need a comprehensive strategy to combat smoking. Cigarette packs offer are just one opportunity to influence change. The decision to quit smoking is not made when you’ve purchased a pack of cigarettes. It’s too late. “Oh what the heck,” I can hear the smoker say. “I’ll just finish off these last cigarettes…”. A year later, they’re still hooked. The tactic has to be found long before the consumer gets to the counter. The war has to be won before it begins. We need to make cigarette smoking uncool. Seriously uncool.

Health warnings, bans and scary ads aren’t working. If they were, we’d have seen a decrease in tobacco sales. The fact is, we’re all influenced by trends. Let’s use this human foible for our own good. Perhaps uncool means releasing a brand around the anti-smoking message – even merchandising. I know tobaccofreekids, which I respect greatly and work with, is on the job. But extra muscle is needed. And this is where things get tricky. Individually run anti-smoking campaigns won’t achieve a big enough voice, just as small cigarette brands hardly exist these days. They simply don’t have the power to cut through the other advertising clutter, or the budget.

The answer is a global campaign. A campaign with one of those mammoth budgets, funded at national level, and run as a global brand, like Gillette or Dove. This way the message might cut through the commercial noise and reach the kids who we know to be the main target group for the tobacco industry. After all, it’s easier to get hooked for life if you’re smoking by the age of 21. Online, wireless and through the tons of entertainment channels, the global campaign could be shaped into popularity and accessed worldwide.

It’s a project which might seem overwhelming. And it means thinking globally instead of locally. But I think by now we realize how global our communities have become. The world is connected through Facebook, YouTube, and Google. The fact is, serious action is needed. The tobacco industry is armed with a killer marketing weapon – a weapon sponsored by well-intentioned governments and supported by legislation everywhere. So let’s treat anti-smoking activities like brands, and beat the cigarette companies at their own game.