Why It's Important to Invest in Brands

Last week Volvo Cars had a successful IPO on the Nasdaq Stockholm exchange and was valued at $23 billion. That is more than 10x what China's Geely bought it for in 2010 from Ford for $1.8 billion. Personally I think Volvo cars look so much better since Geely took over. They are no longer boxy-looking, safe "tanks" on the road. The product lineup looks quite stylish these days and is better positioned as a luxury brand. It just goes to show that Volvo was mismanaged under Ford and how a brand can be turned around with proper investment and strategic focus. 

A similar outcome can be seen from another Ford divestiture. In 2008, Tata Motors, an Indian automotive manufacturer based in Mumbai, bought Jaguar and Land Rover for $2.3 billion. They had cost Ford $5.3 billion! Today, both brands and their product lineup looks so much better. I personally love the look of the understated Jaguar XF sedan, F-Pace SUV, and the flashier F-Type. 

Jaguar F-Type

Outside the automotive sector, look at ThinkPad. IBM sold ThinkPad to China's Lenovo in 2005 when it was going through one of its many restructurings in the 2000's. ThinkPads were highly regarded by executive road warriors back in my days. I was recently shopping for a new work laptop. And guess what? I ended up getting a Lenovo ThinkPad after researching a few options. I was glad to see Lenovo maintained the high quality of the product, the red mouse nub 😊, and the brand.  

Here's the deal. Very few Chinese and Indian companies own global brands, so the acquirers above really valued a chance to own these 3 global well-known, high-end brands. They nurtured them because they were viewed as strategic brands within their portfolio, invested in their product development where their prior parents didn't, and let them run mostly autonomously, especially from a brand perspective. They did a fantastic job not alienating their brand loyalists and I would argue did a good job expanding the brand audience. 

Bottom line: troubled storied brands starved for attention within large enterprises can be turned around with proper product innovation and brand support. 

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Elon, it's not too late to rename TESLA Model 3!

Confusion over the upcoming Tesla Model 3 and how it fits into the Tesla model line-up is a great example of a brand architecture gone wrong! Sorry, Elon, you're a great visionary, but not a brand strategist.

While trying to be cute to spell a word with his cars, Musk wanted to spell S-E-X but Ford stopped them from making a Model E. So, being clever, he chose to make it the Model 3 (a backward E).

And now there are rumors of an upcoming compact crossover called the Model Y, modeled after the Model X, to spell S-3-X-Y. Really?!?

It's imperative for automakers to have a clear brand architecture and naming convention to signal to consumers how their portfolio of cars fit together as a lineup. Let's face it -- consumers are not that smart or too lazy often times to try to understand a brand's cleverness. Was anyone else besides Musk really thinking S, X, and 3 had a hidden meaning?

Acura learned a hard lesson in the 1990s when research showed consumers did not recognize the Acura brand and could not associate the beloved Legend and Integra model brands to their parent brand Acura. So they switched to the more common alphanumeric naming convention that most luxury brands use today, such as RL for the Legend. While RL is not as cool sounding as Legend, the intent is to concentrate the brand equity on the parent brand Acura. So if consumers can't recall if they have the RL or TL, the hope is they can at least say, "I have an Acura sedan." It's similar to how people say they have a Bimmer or Mercedes, even if they can't always name the exact model letter or number.

Tesla will eventually need to evolve its brand architecture so consumers can understand how the cars differ. Model S and X model names were a great start. Even the "battery configuration options" (e.g., P100D and 90D) make sense. It's really the Model 3 that are messing things up for several reasons. It deviates from the 1-letter naming convention like "S" and "X". Also, "3" also is the 3rd generation of Tesla's vehicles, but when consumers hear next generation, they assume it will have the most advanced technology in it. But, it's really being positioned as a more "affordable" version of the Model S, as Musk keeps proclaiming! The Model 3 runs the risk if greatly disappointing its new owners if it doesn't meet their over-inflated expectations.

BMW is one of the cleanest and classic case studies in brand architecture. For decades, it's naming convention for its models has been simple and logical. Take the 3 Series, 5 Series, and 7 Series sedans. Folks knew that a higher number meant it was bigger, better, and more expensive. In past years, the last 2 digits referred to it's engine size. (e.g., 330 was its 3 Series sedan with a 3.0-liter engine). It's crossover SUVs all start with X and follow a similar numeric convention X3 and X5.

It's not too late, Elon. Rename the Model 3 before you deliver the first model. Abandon your cutesy brand strategy!

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Reese's: Innovator or Copycat?

For the past few months, I have noticed Reese's, famous originally for its tasty Reese's Peanut Butter Cups, has branched out to other product categories. But some bear an uncanny resemblance to other established products.

Exhibit A: Reese's Pieces - This has been out for a while and not new. But it was one of the first product extensions I remember. Don't these look like M&M's?

Exhibit B: Reese's Sticks - This is a wafer bar with chocolate and Reese's Peanut Butter. Kit Kat is a similar wafer biscuit bar with chocolate. And Reese's even has the exact same number of 3 wafers stacked with 2 layers of filling in between. (This reminds me of the Jeep vs. Hummer legal case on why Hummer had to have the same number of vertical slots on their front grill as Jeep.)

Exhibit C: Reese's Spreads - Boy, that plastic jar sure looks a lot like Nutella. Granted peanut butter is not the same as hazelnut, but the concept is the same. And the 2 are stacked side-by-side when I've seen it in store shelves. So, you bet Reese's is hoping to grab share from Nutella!

Exhibit D: Reese's Headphones - Then there are some brand licensing deals that just seem silly. Reese's headphones! Really? Yes, I did not Photoshop the image below. Google "reese's headphones" and you'll see I'm not joking. Who would buy this? Do they really love Reese's and music that much, that they would want to combine the two? Even if someone made Skittles-branded headphones, I doubt that even Seattle Seahawks runningback Marshawh Lynch would wear them!

But Reese's also got a taste of its own medicine with others copying them, such as Butterfinger Peanut Butter Cups. At least Nestle made the effort to make their cups rounded square-shaped instead of a circle.

In the end, driven by the need to grow their brands, the Nestles, Hersheys, and Mars of the world can only come up with so many original innovative creations in their own kitchens and just can't help to notice the success of a competitor.

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Palm Brand Resurrected?

I was surprised to hear this week that Chinese consumer electronics company TCL had acquired the rights to the Palm (yes, as in Palm Pilot!) brand name from HP. As described by its CEO, TCL plans to resurrect the brand for the smartphone market, billing it as the largest "crowd sourcing" project the world will ever see. TCL currently has a lesser known phone brand called Alcatel OneTouch.

I was an early adopter and huge fan of Palm handhelds at the turn of the millennium. I was quite sad when HP mothballed Palm in 2011 (see related blog post). Thanks, Leo Apotheker!

Ultimately, LG acquired the WebOS from HP in 2013 for their smart TVs. It was nice to see LG continue to innovate with WebOS 2.0 at CES this week. (Samsung recently announced it's using its own Tizen OS for its smart TVs.) In this capacity, WebOS is more of an ingredient brand to LG products and consumers probably don't associate it with Palm.

This play by TCL to resurrect the Palm brand is an interesting branding case study in the making. Their plan to tap into the developer community and legacy Palm fans is a bold move and an assumption that all these folks, including myself, have not already moved on to the 2 most popular mobile OS platforms out there today -- iOS and Android.

In my mind, Palm was an early pioneer in tapping into developers for 3rd-party apps that ran on Palm handhelds. Documents To Go, Avantgo, and IR Battleship were some of my favorite Palm apps. But where they fell short was not having a centralized app store that Apple launched years later in 2008 in order to help users discover and trust these 3rd-party apps and a developer-friendly revenue share model for monetization. And the Treo was a good early smartphone. It makes me sad just thinking about how Palm squandered its leadership position in this space, but it happens to the best brands.

So the question now is can latecomer TCL succeed where Microsoft and Blackberry are still struggling to gain OS market share?

What brand equity is left in Palm after being absent from the consumer mindset really for so many years? My own professional experience working with developers, whether they are start-ups or major brands, is there is always a need to prioritize which OS to build your app for first. Today, that's iOS and Android. I remember even just a few short years ago how hard it was to convince clients to build for Android and not just iOS! And Microsoft has even tried to "bribe" developers to build for Windows with little success in moving the needle.

How many brands have succeeded in similar situations? Not many. Myspace, even with the star power of Justin Timberlake, has not rebounded. In 1999, LG acquired Zenith (who believe it or not was the first to develop HDTV in North America), and that didn't really work out for that storied brand.

Blackberry is trying now too and its recent launch of the Classic is really trying to go back to its most loyal fans. Good luck, Mr. Chen.

Perhaps the most famous exception and success story of all is the revival of Apple when Steve Jobs returned in 1997. Apple computers were replaced by Wintel PCs until Apple, through Jobs' vision, product innovation and memorable advertising, was reborn from the ashes like the legendary phoenix. Enough said as we all know how that has turned out for Apple and its shareholders!

It'll be interesting to see if TCL can turn this brand around. Fellow Chinese tech company Lenovo did a great job with the IBM Thinkpad brand. Of course, Lenovo has its hands full as well with their $2.9 billion acquisition of Motorola, another storied brand that brought us the original flip phone and Razr. So far I like how Lenovo CEO has said he will differentiate the Lenovo and Motorola brands through pricing and distribution channels.

While I'm an Android fan today, a small part of me will cheer on Palm (and TCL) for a comeback.

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Amazon Changes Brand Strategy With Release of New Tablets

This week, Amazon rolled out a bunch of new Amazon Fire tablets, along with a new Kindle e-reader.

This includes the launch or updates of:

• Fire 6" tablet
• Fire 7" tablet
• Fire HDX 8.9" tablet
• Fire HD Kids Edition
• Kindle Voyager e-reader

I'm not going to review the products. Instead, what was not really highlighted in these product announcements was how Amazon has changed its brand strategy for its tablets because of all the other recently-launched devices.

The new Amazon tablets no longer include the "Kindle" sub-brand before "Fire". They are now just called Amazon Fire tablets. But when the first Amazon tablet came out at the end of 2011, it was launched as the Amazon Kindle Fire. (I was a proud owner of one.) At the time, that made sense because the Kindle e-reader was wildly successful and had great brand equity as an Amazon hardware. By launching the Fire with the Kindle sub-brand, it was an easy way to communicate to consumers that this was the same great e-reader you have come to love and expect from Amazon, but now you have an Android-based tablet too!

That worked well for the Kindle Fire tablets for a few years until Amazon started expanding its consumer electronics devices, and e-readers became viewed as "old school" single-function devices.

So, the "Kindle" brand must evolve too. It has morphed from just an e-reader device brand to really a reading platform. By that I mean, there's the Kindle hardware, but there's also the software, which is the Kindle app that can be downloaded on almost any mobile device or tablet on all the major O/S's. And the integration between the Kindle app across all the devices one may own is amazing, being able to continue a book you're reading as you switch from one device to another! The Kindle app has also popped up as a suggested reader now when I download attachments from my emails on my Samsung Galaxy S phone. And so "Kindle" is really a great brand to associate to reading anything on anything!

Sure, there's still the low-tech, no-longer-growing aspect of this category. (But they're still taking the Nook to the cleaners by the way!) And that's a big reason why you don't want to hitch the "Kindle" brand to Amazon's other faster-growing, sexier products. 

Enter "Fire" 

The "Fire" sub-brand, which was introduced with the original Kindle Fire, has come a long way in 3 years. Along with many iterations of Kindle Fire tablets, 2 new high-profile Amazon Fire products were released this year.

The Amazon Fire TV introduced in April as a TV streaming device. With all the content Amazon has made available on its tablets, this was a natural extension in the battle for consumers in the living room. They face a host of competitors, including Apple, Google, Roku, and others. 

 

Then in July, Amazon finally took the covers off its much-rumored Fire phone. The high-tech smartphone has some unique features such as its Dynamic Perspective feature, X-Ray find feature, Firefly, and the extension of its Mayday service from its tablets to the phone. The reviews were mixed on this smartphone, especially given its price tag.

Taken together, Amazon's tablets, streaming TV device, and smartphone all make sense under the "Fire" sub-brand (sans "Kindle"). The "Fire" sub-brand can now be extended from just a tablet association to more of a high-tech, cool and sexy, multimedia entertainment devices association. The last thing you want to do is associate all this advanced technology in growth markets to an "e-reader and then some" brand!

So, I say bravo to Amazon's marketing team for making this brand transition at this juncture.

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How Product Recalls Spread Through Social Media

February was a busy month for major product recalls.

Let's look at how the web and social media responded to 3 different companies in 3 different industries that announced major recalls. (A companion set of slides is also available on SlideShare.) The goal is to see if there were any similarities and differences based on how it was handled in those critical first 7 days.

General Motors 

GM announced on February 13th a major ignition switch recall, affecting 1.6 million vehicles. Many believe GM allegedly knew about the risks years ago and should have reported it sooner. A federal investigation is under way.

In the chart above, it is the number of mentions about the GM recall in the first week after the announcement.
As shown, GM instantly got lots of mentions in the mainstream media (under Other), such as Automotive News, USA Today, and Reuters. GM is an established global brand in a 100-year old auto industry that is heavily covered by traditional journalists. It was "front page" news in business publications, automotive publications, and those covering it from the angle of this being the first true test for the new female CEO Mary Barra.

Then news spread quickly on Facebook within 24 hours. Interestingly, Twitter had less conversations. But on Twitter, the top posters were still traditional news outlets like USAToday (with nearly 1 million followers) and @ReutersBiz.

Ironically, if you go to GM's Media site and look at February 12th (around the time of this recall), there is no mention of the ignition switch recall. Instead, there's a press release on how "GM Leads Automakers in Dependability Awards."

Even though @GMCustomerSvc responded to a few users on Twitter, GM was a bit slow to leverage social media to manage this PR crisis. @ChevyCustCare didn't really take to social media to address consumer concerns until nearly 2 weeks later when consumer backlash in social media risked long-term brand damage (a la Toyota's 2010 recall #FAIL). By then #gmrecall was trending quickly.

In a letter to employees, CEO Mary Barra defended GM and said it was a top priority for her to investigate this. Time will tell how this plays out.

Fitbit

Fitbit is a relatively young company that is the category leader in the nascent wearable tech industry. It's Fitbit Force is a wristband you wear that can track your activity. In January, customers were complaining on Fitbit's forums about skin rashes. Initially Fitbit attributed the issues to allergic reactions to nickel and said the device was tested by medical professionals. But consumer complaints piled up, Fitbit finally announced a product recall on February 20th with a blog post by CEO James Park. The Wall Street Journal was one of the first to break the news on mainstream media on February 21st. Then the floodgates burst open when the company's @FitbitSupport Twitter team started to responding to Twitter users. Word also spread, but to a lesser degree, on Facebook. (See below)

Fitbit got news out rapidly across all channels -- on its website and its social media channels instantly. That really helped calm the masses, as shown above.

FreeStyle / Omnipod

FreeStyle, from Abbott Diabetes Care, is a popular brand of blood glucose monitors for diabetes patients. Omnipod is an insulin management system made by Insulet. FreeStyle issued a product recall press release on February 19th on its corporate website about FreeStyle test strips leading to erroneous blood glucose readings when used with Omnipod.

As shown above, news spread rapidly in the first day on Facebook and Twitter via individuals and major diabetes organizations, such as JDRF. Discussions and lots of questions started developing by the first weekend in online forums, such as the American Diabetes Association's community.diabetes.org. A few influential bloggers, such as DiabetesMine and TheBloodSugarWhisperer, also posted the news early on.

By Monday, people were reporting in forums, Facebook, and Twitter of finally receiving letters in the mail and experiencing long wait times in the call center. This led to a second wave of online discussions as shown above.

Mainstream media was not as prominent in this case.

Conclusions

It's generally true that Facebook and Twitter is like gasoline on fire. And brands need to be ready to respond in those channels.

It is also interesting to see there isn't one common pattern for how news, such as major recalls, propagates online. It depends a lot on the industry, the brand's online presence (whether it has active social networks that are engaging with users in a customer support capacity), and an integrated online and offline communication strategy and execution.

When you look at a heavily watched and discussed industry like automotive, consumers (lots of people own, depend on, and love their cars), business people, and journalists all engage in conversations online.

Now look at a traditional regulated industry like medical devices. This industry tends to move slower in general, but it's even more cautious and slow to embrace social media. Heck, it wasn't until January of this year that the FDA finally released its draft guidelines for social media/UGC usage - 10 years after Facebook was founded by Mark Zuckerberg.

As Abbott Diabetes Care and Insulet learned, a few crucial days between the online press release and patient receiving mailed letters, coupled with a lack of a major presence in social networks, really fanned the flames online. Hjalte Hojsgaard, Insulet's manager of consumer marketing, sums up the issue quite well: “We would have liked to get the letter out even sooner, and get the word out on our website and social media, but these things sometimes take some time."

It was the opposite case with Fitbit, which is a company born in the Internet age. So it's not surprising that it had all the info consumers needed online when the recall was announced. It took full advantage of its robust social media presence that includes 13K @FitbitSupport Twitter followers to engage concerned customers. While GM has several decent-sized social media accounts, it waited too long to start engaging customers online, threatening to hurt the GM and Chevy brands.

Overall, Fitbit was the best of the 3 companies in managing the recall, once they "admitted" there was a problem.

(A companion set of slides is also available on SlideShare: Analyzing Online Consumer Reaction to 3 Major Product Recalls in February 2014

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Lexus' Bold Brand Identity Move: The Spindle Grill

Have you noticed new Lexus cars and trucks with the "spindle" grill lately?

Nearly 2 years ago, Lexus designers and executives made a bold design decision to establish a unified look for all Lexus vehicles. Since it takes a while for new cars to go from design to showrooms, only recently have the new "spindle" grill design become more commonplace in the streets.

While the initial news led to heavy debate among auto enthusiasts, it'll take some time before we'll know if the bet pays off.

This is not a new phenomenon in the auto industry. BMW's "kidney" grill is a well-established trade dress. If you only saw the front of a BMW sans logo, there is no mistaking the Ultimate Driving Machine!

BMW's "kidney" grill over the years

In the legal world, this is also known as "trade dress," which is protected much like a copyright or trademark. And it can definitely be a competitive advantage and a key element of a brand's visual identity.

Front grill trade dress can be so important, that a company might even sue over it. Like when DaimlerChrysler (before it became Fiat Chrysler) sued GM back in the early 2000's. GM had recently acquired Hummer and was planning to launch the H2, a smaller version of the military-grade Hummer targeted and priced for the consumer market. It's the same market that DaimlerChrysler's Jeep had enjoyed success in for years. DaimlerChrysler alleged the H2's 7-slot grill infringed on Jeep's 7-slot grill trade dress, confusing consumers. DaimlerChrysler claimed that market research showed that two-thirds of Jeep owners confused the H2 for a Jeep model.

7-slot grill: Jeep (left) vs. Hummer H2 (right)

As for Lexus, I actually like this move and don't think it's a bad design either. Time will tell if this will be a long lasting brand strategy for Toyota.

Do you like the Spindle grill?

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Why Intel's Internet TV Business Had No Chance

This week, there were rumors that Intel was likely to sell its Internet TV venture to Verizon.

I am not surprised. Even with all of Intel's vast resources and over 300 employees behind it, the TV service is on the auction block. What went wrong? A lot!

I believe the service was doomed from the beginning. It probably looked great on a PowerPoint slide in the board room. A nice white space in the upper right quandrant of a 2x2 matrix that represented a big growth opportunity for the company.

If a proper Market Opportunity Assessment (MOA) was done years ago, by looking at the market/industry dynamics, competitors, customers, and the company's capabilities, Intel should have realized this was not a good idea. Here's my armchair strategic take on things.

Company

Intel is a hardware company no matter how you look at it. It's not a media company or a telecommunications company. Even its previous foray into communications (on the hardware side) didn't work out. It's really hard to be something different and hardware + service or hardware + software is one of the greatest challenges for any tech company. Look no further than Microsoft and its hardware ambitions (Zune, Surface). Samsung is trying now to build out its software capabilities, and just had its first developer conference in San Francisco last week. Few companies, like Apple, have pulled it off. Basically, media is not the company's core competency and its failure to secure any content media partners reflects that.

Competition

Has Intel learned nothing from watching media companies and cable/satellite companies fight and go into blackouts from soured negotiations? Why would you want to get into that space? Not only that, Intel would face additional competition from deep-pocketed tech competitors, such as Apple, Google, and Amazon, who also have their eyes on the same prize! But unlike Intel, these tech giants have experience negotiating and securing deals with music and media companies for their online app stores.

The supplier power from the oligopoly of the major media companies may have been underestimated. These media companies are paranoid and threatened from all sides. (Anyone appreciate the irony of Intel ex-CEO Andy Grove's Only the Paranoid Survive in this case?) Cable TV, satellite TV, Netflix, Aereo, Bit Torrent, and then Intel comes a-knocking. Is anyone going to return Intel's call? Some, like Netflix, have started to show their potential value as a partner to these media companies. But what did Intel bring to the party besides some buzz on the UX of its interactive TV guide?

Customer

I don't believe the Intel brand has brand credibility or license to go into consumer living room. Remember how Viiv failed and quietly went away? Viiv was Intel's attempt to be a home entertainment hub. Intel also has a poor track record in consumer electronics. It used to sell digital cameras, MP3 players, and Intel Play PC toys. That business was eventually shut down. Intel Inside, despite being one of the greatest branding stories of all time, has its limits.

Conclusion

While I am impressed by how Intel continues to innovate in the microprocessor space and I personally prefer Intel Inside my PC, it's a whole different story to want it in my TV.

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AutoNation Moves to One Brand

AutoNation announced the rollout of the AutoNation brand across its network of auto dealerships this week. The move to switch the local, family sounding dealership names (e.g., Maroone Automotive Group in South Florida) to a national brand is a bold move and a first in auto retail on a large scale. We're talking about 264 new-vehicle franchises, selling 32 brands across 15 states!

This makes sense to reap the benefits of economies of scale in marketing. In digital, it should elevate the autonation.com search equity.

I think this is a good brand move by AutoNation. There are certainly concerns about migrating quickly from its current state. And perhaps a more deliberate endorsed brand strategy for a few years could have eased some of these concerns. So, imagine, say, Honda of Dulles, Part of AutoNation, where "Part of AutoNation" could be visually treated like a tagline or a smaller moniker below the Honda of Dulles brand name. Then, at some point, Honda of Dulles goes away and AutoNation is the one and only master brand.

It is also interesting to note the luxury dealerships will keep their local names, such as Mercedes-Benz of Fort Lauderdale. This could be rationalized that luxury car sales is a relationships-based business and a single AutoNation brand feels more cookie-cutter and value-oriented for the McDonald's population. So, why take the risk at this time and let's watch how the AutoNation rollout plays out in the marketplace first.

It will be interesting to see how this unfolds. Macy's made a similar move a few years ago and it seems to have paid off!

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Happy 3rd Birthday, DROID!!!

DROID DOES a third birthday today.

On this 3-year anniversary of the launch of the DROID brand on Verizon Wireless, let's take a look back at how far DROID and the Android operating system has come.

Original DROID

I had the first slider keyboard DROID and loved it for its anti-iPhone-ness. The DROID was (and still is) a strategic brand and product for both Verizon and the Google Android team. It had over 1 million in sales in 74 days! The DROID's debut single-handedly put Android on the map and has since led to Android's stellar growth. IDC announced last week that 75% of new smartphone shipped in Q3 ran Android OS. Of course, not all of those were DROID-branded phones on Verizon.

But as the premium Android brand on the largest US carrier in one of the largest mobile markets in the world, the DROID brand graced many historic phones.

DROID Incredible

DROID Incredible - A truly incredible, large touchscreen phone by HTC that launched soon after the DROID.

DROID X

DROID X - A bold, big, thin phone with strong multimedia capabilities at the time went right after the iPhone and sold like hotcakes.

DROID R2D2

DROID R2D2 - How can you license the DROID name from Lucasfilms and not build a Star Wars-themed phone, right?

DROID Charge 4G

DROID CHARGE 4G - At launch, it was super fast and one of the first devices to exploit Verizon's 4G LTE network. It was an impressive device that demonstrated Samsung's engineering prowess.

DROID RAZR

DROID RAZR - This ultrathin, ultra-sleek DROID even resurrected the RAZR brand for Motorola. Today, Motorola's DROID RAZR family of products are the represent the high-end of Verizon Android phones.

Verizon's DROID brand strategy appears to have worked from 3 years ago. I'm going to upgrade my phone soon and will be looking at a DROID again. And I can't imagine driving without my Google Maps navigation. Apparently, I'm not the only one as the iPhone 5's launch demonstrated!

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Good Move: Re-branding Hotmail as Outlook.com

Microsoft announced it is going to re-brand its hugely popular Hotmail web mail service as Outlook.com. That's a great move from a branding perspective.

Hotmail has gone through various brand names from a brand architecture perspective. When it was founded in 1996, it was just Hotmail obviously.

When Microsoft bought them in 1997, it was a great strategic move to enter a hot (no pun intended) space. Hotmail got an updated logo.

Then in 1998 it was co-branded MSN Hotmail when it was integrated better with other Microsoft online services. I would've co-branded it with MSN sooner to transfer the brand equity from Hotmail to Microsoft and MSN sooner, but I suspect it wasn't a branding decision but a technical decision (when it was better integrated to MSN) that this was done later.

Then in 2005, when Windows Live was introduced as a new platform for Microsoft's online services, MSN Hotmail was going to be Windows Live Mail, which I thought was a mouthful. But during the beta test, they realized users still preferred the Hotmail name. So what happened? The name go longer and became Windows Live Hotmail. It was bet at the time by Microsoft that the Windows brand could extend from desktop PCs to online. I'm not so sure Windows Live achieved that.

  

And here we are today. Hotmail is now Outlook.com.

I think it's a good move to concentrate their web mail brand equity around Outlook as the online communication hub. Outlook already has that equity from the desktop. Windows Live never really stuck when it was applied to online (Windows Live Hotmail) and desktop (Windows Live Mail Desktop replaced Outlook Express). I always thought Outlook Express was a better name for the consumer email application vs. Outlook for the corporate email application.

Since Outlook is so well-known for corporate email, one could argue it does not need strong Microsoft, Office, or Windows brand linkage. And not even Hotmail. Let's see what happens...

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Samsung Finally Fixes its Brand Strategy for Galaxy Smartphone

They say the third time's a charm. And it is certainly true for Samsung. It just announced its "third-generation" of its flagship mobile phone will be called the Galaxy S III across all major carriers in the U.S. market. That's huge!

I had previously wrote about how the Samsung Galaxy S's brand strategy was flawed when the smartphone line was first launched across multiple US carriers. While it has taken over a year and a half, Samsung is finally executing the correct brand strategy for its Galaxy S line of smartphones in the U.S.

Source: Engadget

This is likely due to the fact that Samsung has more supplier power now with carriers as it just passed Apple as the world's largest smartphone manufacturer. Also, carriers fear the market power of Apple, who receives lots of $$$ from carriers for the iPhone and then the carriers heavily subsidize the cost to subscribers. That's bad economics for carriers so it behooves them to create a viable challenger to Apple in the market place.

It's good thing when the brand strategy and channel strategy can be aligned!

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Image-driven Brands Poised for Growth in China

Today, the Wall Street Journal had an intriguing story on the brand preference of the burgeoning working class in China and how they are increasingly willing to pay for genuine brands versus fakes.

The article quotes a young man who captures the growing sentiment in China about fake brands:
"The difference of buying real and fake products is how you feel after."..."I can wear a label I've paid for and  feel proud." 

More proof? 95% of Chinese women between 28 and 35 said they'd be embarrassed to carry counterfeit handbags, according to China Market Research.

Image-driven brands that offer self-expressive benefits stand to gain most from this trend. Fashion apparel, jewelry, and beauty product categories are great examples.

Automotive is another image-driven category. Luckily, it's hard to "knock off" a car. Instead, auto manufacturers will continue to benefit from the growing middle class that can afford a car. This trend is clear from the latest earnings from auto manufacturers, even the Big 3, that demonstrated strong growth in Asia.

Unfortunately, I doubt software brands will be impacted by this trend. US and Chinese governments, in conjunction with technology companies, will need to continue their crackdown on intellectual property infringement to help this category. Also, software provides more of a functional benefit (not self-expressive) and the fakes function like the genuine articles because it's just digital code after all. Thus, offering less incentive for people to pay more for the authentic versions.

Image-driven brands like Nike are well aware that all this will further accelerate growth for them in China. As a marketer observing from the outside, it's fascinating to watch US consumerism sweep across China.

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Why Your Brand Strategy is Critical to Social Media Success

As we kick off 2012, no one will argue that social media is now mainstream...for consumers and brands. A few years ago I was advising clients on social media strategy and how companies should organize for social media. Depending on the client's corporate structure and capabilities, it spanned having a dedicated social media manager or a social media team to a cross-functional "tiger" team where primarily marketing and PR collectively represented the brand. Back then, it was about training a small team within the company to engage with customers. Fast forward a few years and social media responsibility and engagement now rests with almost every employee...as brand ambassadors.

Now more than ever, a company's brand strategy must be clear and understandable and worn on every employee's sleeve as they engage with consumers in social media, sometimes from their private social network accounts. One inappropriate tweet and the entire company is held liable for his/her post. The super information highway was littered with social media road kill this year from brands such as Kenneth Cole and Chrysler.

I've always advocated that defining a clear brand identity as part of a company's brand strategy is critical. The main benefits enjoyed by a strong brand are:

• Higher brand awareness that increases the likelihood the brand is in the consideration set
• Competitive advantage by simplifying customers' decision making by reducing their search efforts
• Price premium due to perceived higher quality
• Management in absentia that serves as an organizational touchstone that provides internal clarity and focus 

For social media, the last point is the most important: management in absentia. What does the rank and file worker do when the manager is not around and a customer has an issue? This is the customer moment of truth. Does the employee do the right thing? A brand is supposed to serve as a compass for the employee for moments like these. Disney and Nordstrom knows this better than anyone in the offline world.

And Zappos is great example in the online world, where employees are frequently providing customer service via Twitter. Employees are trained and empowered to do the right thing on the company's behalf. It's no coincidence that these companies also have strong brand identities and cultures. It's because employees have fully internalized the brand values. I had the pleasure of meeting Dr. Vic, Zappos' former Life Coach, a while back. He met with every employee, handed them a huge culture book, and had them go through extensive training and orientation, which included a stint in the call centers. During this training, every employee was asked to start a Twitter account (recall this was back in 2009!) and practice posting in order to ingrain in them that they were all spokespeople for the brand. In the end, (I was told) Zappos is not a company that sells shoes, but a customer service company.

In a nutshell, I call this "digital brand translation," taking the brand strategy and making sure its execution in online channels align with the strategy. A well-executed and fully internalized brand strategy by employees will be the key to social media success.

Is your company's brand strategy ready to take on social media in 2012?

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Angry Birds Brand Over-Extended?

I love Angry Birds, which I mentioned in my Amazon Appstore post. What's not to love? Globally, 200 minutes of Angry Birds is played every day.

Rovio recently said the game has been downloaded over 250 million times! I think I contributed to 5 or 6 of those downloads alone on all my various devices in my home. (On a side note, I recently downloaded Angry Birds on my desktop Chrome browser and was quite surprised how good the user experience was!) I wonder how many of the 250 mil are unique users?...but I digress.

Back to the point of my post.

Yes, Rovio has a runaway success with this mobile game.

And yes, some of its product extensions made sense:

• Plush toys - Got the classic red bird and green pig myself.
• Angry Birds-inspired movie, Rio - I had my doubts, but it did well and was still dealing with cute cartoon characters in the movie that was close to the premise of the game.
• Angry Birds Magic that leverages NFC capabilities. The Plush toys could activate elements in the game. Geo-location could be leveraged too. Definitely some cool offline/online spins to the core game play.

But egg recipe cookbooks? Come on! I think that's a stretch for the brand. Just because I love the game, do I really trust Rovio's culinary tastes?

I still can't find the Angry Birds Game on Facebook. =(

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Verizon Takes Brand in New Direction and Sends the Test Man Packing

Looks like the Verizon "Can you hear me now?" guy, Paul Marcarelli, is about to be the "Can you see me now?" guy, as Verizon is ending its nearly 10 year old campaign and relationship with him. Paul recently talked about life during and after as the Test Man with The Atlantic.

Verizon's Test Man

So, he joins the ranks of mothballed advertising icons like the Where's the Beef lady and the Maytag repair man.



I admit. He and the ads got me to switch to Verizon years ago, and I don't regret it one bit. From a marketing perspective, I thought the brand strategy and execution was excellent. Verizon carved out a relevant, ownable space around "coverage". The singular focus has contributed to their dominated position in the wireless industry.

But brands need to evolve over time with its customers. As Verizon clearly owns "coverage" now, it makes sense for it to take the brand to the next level. In this case, the focus is on "speed." Its recent heavy promotion around 4G LTE and the rapid adoption of bandwidth-hogging smartphones supports the need for speed.



If all goes well, Verizon will build on "coverage" and add "speed" to its brand associations.

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Marketing spin: Partial Zero Emission Vehicles

As a marketer, there are times when I think no one is really thinking about consumer reaction when it comes to branding technology.

I give you Exhibit A: PZEV

PZEV stands for "partial zero emission vehicle." You can read the full definition from wikipedia. But it basically means they are "close to" meeting the California Air Resources Board's stringent zero emission standards in California. But close only counts in horseshoes!


It's just the auto industry and California doing a little political dance. But this kind of marketing can confuse consumers, who are already trying to make sense of alternative fuel technologies for cars. From hybrids to ULEV (ultra low emission vehicle) to the upcoming zero emission electric vehicles, such as the Chevy Volt and Nissan Leaf, marketers need to do a better job explaining things to consumers.


And something like "partial zero emission" is an oxymoron to me. Either you are zero emission or you are not!

It's like a guy telling a girl he meets in a bar that he's "partially married" =)

Auto makers, stop the marketing spin and just call PZEV what it really is: a INACAWWL vehicle. ("It's not as clean as we would like" vehicle).

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Why the Samsung Galaxy Mobile Brand Strategy is Flawed

Today, Verizon Wireless released the Samsung Fascinate, the latest high-end Android phone to hit the carrier. Unlike the spate of recent Android phones bearing the famous DROID branding, this Verizon Android phone does not.

The Samsung Fascinate is from a family of Samsung Galaxy S high-end Android phones that Samsung has been releasing across all the major carriers in the US. It is Samsung's attempt to establish Galaxy S as a major subbrand for Android devices. And while Samsung has already sold 1 million units in the US through AT&T, T-Mobile, and Sprint, there is a major flaw in its brand strategy.

The Samsung Galaxy S phone has different names on all the 4 major US carriers:

• Captivate (AT&T)
• Vibrant (T-Mobile)
• Epic 4G (Sprint)
• Fascinate (Verizon)
  

As if that's not confusing enough, if you look at the creative below promoting the Fascinate, an average user might ask:

Is this a Samsung Galaxy S or a Samsung Fascinate phone?

Source: TalkAndroid
Uhh, both.

Now let's throw in the ecosystem of partners and to promote the phone, you've got a tongue twister such as.. the Samsung Fascinate is the latest Google Android phone on the Verizon network that is part of the Samsung Galaxy S family of phones.

And to pile on to the branding strategy confusion, this is the first high-end Android phone on Verizon without the DROID subbrand. Frankly, I'm surprised Samsung had enough market power to convince Verizon to do this. Or perhaps Verizon intentionally wanted to mitigate any brand risk if this Android phone from Samsung was a bust. Perhaps I should be glad it's not called the Samsung Galaxy Droid Fascinate! =)


What would I do?

I would have developed an alphanumeric name for the Galaxy S models for each carrier. If Galaxy is going to be Samsung's global subbrand for high-end Android phones (and tablet PCs), then it should invest in that subbrand. And the end goal should be for consumers to say with pride that "I have a Galaxy phone." Samsung should not have evocative product names like Fascinate. Instead, it could be called the Samsung Galaxy 540 on one network and Samsung Galaxy 320 on another.

This is actually a common brand strategy used by luxury auto makers who want consumers to say "I have a Bimmer" or "I have a Mercedes."

But even within the telco industry, look no further than Motorola's brand strategy for the RAZR phone a few years ago. Every carrier had a version of the RAZR with alphanumeric names that no one remembered. But you just knew you had a RAZR. And despite Motorola's stumble on a follow-up successor, the RAZR was highly successful and its brand strategy was spot on.

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My Brand Strategy for HP and Palm

Now that HP has bought Palm, there is lots of speculation about what will happen to their employees, their webOS, their devices, etc. But I'm intrigued about the brand strategy and transition.



There are a few branding options for Palm:

Palm - Keep it as Palm and change nothing. This is unlikely to happen and not a good idea. HP should associate its brand to Palm so that it can build greater brand awareness in the mobile space, which is a primary benefit of acquiring a company in a space you don't have a strong presence in. The other reason why the child brand is left alone after acquisition is if the parent brand is a liability. For example, luxury brands often aren't closely aligned to a mainstream parent brand. For example, Ritz-Carlton (and Marriott) and Lexus (and Toyota). But Palm is not a luxury brand.

HP - Kill the Palm name altogether and call the devices HP. Presumably, HP bought Palm because Palm still has a strong brand name and awareness in the market. Switching instantly to HP would be unwise because you just threw away all that Palm brand equity of the original PDA pioneer!

So that leaves 2 scenarios: co-branding and endorsed branding.

Palm by HP - This endorsed brand strategy is very common for mergers and acquisitions. It is not as aggressive as co-branding and is used regularly when there is perceived risk in too closely associating the parent brand (HP) with the child brand (Palm). For new ventures, this is quite common. For example, Courtyard by Marriott when it launched. In this case, I think the risk is not that high for HP. Palm and HP are similar brands in terms of target audience and brand premium. For example, with Courtyard, it was a different customer and different price point.

HP Palm - That leaves a co-brand strategy, which I like. This gives both brands equal billing because I believe both brands offer the target customer benefits. Also, it will accelerate the brand equity transfer from Palm to HP in the mobile space. I would however consider dropping Palm subbrands like Pre or Pixi. With HP Palm, it's already a mouthful. You don't need to say HP Palm Pre. Instead, to focus all the marketing on HP Palm, I'd consider a numeric naming convention for models. E.g., HP Palm 750. People will call the phones HP Palm 750 or say I have the latest HP Palm phone. If they forget the number, big deal. It's all about building the HP Palm brand name. This strategy is deployed successfully by all luxury auto companies (e.g., BWM 330ci, Acura RL) and even tech companies (e.g., iPhone 3GS).

On a side note, I was a big fan of Palm for years. I owned 7 Palm OS-based devices (Palm II, III, Vx, VII, 2 Sony Clies, and the Tungsten E2) and wish Palm well...or should I say HP Palm?

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