As I’ve mentioned before in a different context, Blockbuster is filing for bankruptcy. Honestly this comes as no surprise to me, I had been expecting it for a while now. In fact, I’ve been talking about this for more than year.
So now, as the stock is trading for pennies ($.08 as of this morning), the hope is that the bankruptcy filing will allow Blockbuster to get out of existing leases and close brick an mortar stores. Analysts believe the filing will allow Blockbuster to concentrate more on convenience vis-a-vis their kiosk business and digital downloads, thus making its brand more “convenient” for consumers.
However, as I see it, there is a fundamental flaw in the logic here. I do not believe that consumer trend is seeking “convenience” in their movie choices. Rather, the consumer trend is moving towards seeking immediacy. The advent of the rental kiosk is a simple tactic of meeting the consumer where they are, related to the traditional marketing idea of reach and frequency.
Kiosks in and of themselves are not convenient. They serve only to meet a need as an afterthought, such as when you are at the grocery store and you see a kiosk and think, “Oh, I could rent a move tonight.” I have seen a line of people at a Redbox kiosk, trying to herd their kids while attempting to keep their place in line, only to find out the movie they wanted to get was not available. For these consumers and countless others, standing in line to find the movie you want is not available does not qualify as convenient.
What I believe consumers want, and this is borne out if you look at the history of the video rental business, is a sense of discovery immediately followed by gratification. They want to find a movie and watch it.
What is missing from kiosks and most digital download sites is the “thrill of the find” and the experience of walking through a store and stumbling on something that you may have not been looking for or even known of its existence. Even the download leaders, such as Netflix, are having trouble with this. Netflix is still hard to navigate, but it does offer recommendations based on your previous choices. And iTunes attacks this through the Amazon model of showing what other users bought who made the same purchases you did.
C’est la vie Blockbuster video stores, but perhaps your story is not over yet. You were once the trailblazer who brought rental VHS to the masses and gave them the opportunity to find something great to watch. What Blockbuster has the opportunity to do now is to change the game once again by giving consumers an experience and immediacy that is no less convenient than not having to leave home.
Netflix and other digital download services give you immediacy but no experience. In fact, if you look at movie rental today, the experimental element has been essentially removed or is weakened. For the most part, people watch movies they have heard of. Very few browse. In order to survive, Blockbuster must once again revolutionize the movie rental business and return that experiential element back into video rental or it can start to draw the curtain and roll the credits.
Most outsiders (and even analysts) believe that the auto insurance market is driven by price and that the competition for customers is cost driven. After all, they reason, insurance coverage is quantifiable and, therefore, it is possible to compare (rationally) apples to apples.
Think about the television advertising “leader” in the auto insurance category. It is nearly impossible to watch any TV these days without seeing a GEICO ad. It might be the old familiar caveman or the ubiquitous gecko. The, usually, 15-second spots are often bought in back-to-back lots so you get a double dose of the gecko and his sidekicks. They are intended to be humorous but humor has a short shelf life. Therefore, GEICO has to churn out a bunch of these and keep them fresh. (It is a great gig for the advertising agency.)
As a result, the automobile insurance category is scared because GEICO and Progressive are on the airwaves constantly. Is it inevitable that only one brand promise (saves you money) that matters? After all, Allstate, Nationwide and State Farm – with two of them being bigger players than GEICO or Progressive – are trying to build a position around “saves you money.” This is not the highest emotional intensity in the market. It is just that no one can get out of their own way. No one really understand the customer and, therefore, act out of desperation.
One reason why the insurance market is so lost is because, for years, the players in the market have simply promised the minimum benefits in a category of insurance. Everyone believes that their insurance will be there when they need it or service them when they need it or they would not have chosen them in the first place. Those are not switching triggers. However, when that’s all your brand means, all that’s left for customers to choose is price.
As Sun Tzu once said, “Attack their weakness and emerge to their surprise.” Maybe someone will. After all, can any category survive when everyone owns lowest cost provider?
Over the last few years, we’ve all seen several companies and brands pass quickly from market leader to irrelevancy, especially with technology moving so fast now we’re already thinking Apple is taking too long for its next announcement.
Top among them at the moment is Blockbuster, which announced today it is filing for bankruptcy as iTunes, Netflix and the Internet have scorched it to the ground.
Looking ahead, there are other companies that could falter in a similar way, even in terms of everyday lingo.
Take Precision Tune. Its category of oil change is a highly competitive but scattered one, with many players. There are the direct competitors, like Jiffy Lube, tire retailers, auto parts stores with garages next to them (like many Merchants attached to some Advance Auto Parts) and the biggest fish in the pan, the dealers.
It’s an industry that keeps adding players yet remaining stagnant, which means the leaders are losing market share.
The industry is rope for change and innovation. What makes that so potentially damaging to Precision Tune is it has an additional problem: Its name. The name of Precision Tune has two things going against it. One, the name is aligned with its technology, which is both meaningless on an emotional level and becomes passé as soon as the technology advances.
The other problem is an even simpler: Who says they are going to their car tuned up anymore? That’s like something out of the 80s. Instead, consumers say they are getting the oil changed and, even if there is more likely a higher emotional intensity existing in the market, at least direct competitor Jiffy Lube suggests something other than the technology (fast service). It’s worth noting however, that “lube” has a similar problem as “tune,” although it’s closer to reality than “tune.”
Companies like Precision Tune, which are associated with old technology, need to ask themselves the hard questions so they remain viable in the market. Either that, or they may be making the same announcement soon that Blockbuster made today.
Based on the persuasive idea that effective brands tell the customer or prospect more about who the customer is when they use the brand than about the product or company, you would think that Dos Equis really nailed it.
After all, promoting the brand by claiming “the most interesting man in the world” as the brand spokesperson would make sense. It seems a lot more meaningful than the simple “cool” and “irreverent” brand espoused by the Bud franchises or the “COLD” erroneously claimed by Coors. But, there is something very wrong with the campaign and brand promise.
The campaign is a farce and a fascicle presentation because it is always greated with a wink and a nod. No one takes it seriously.
Too bad. The beer would be a powerful brand if, after seeing a message, I actually believed that only the most interesting people drink Dos Equis. If based upon that execution, the customer would fill in the blanks and the brand would be gangbusters.
It does not. All it does is make the viewer feel they are cool enough to be in on the joke. In other words, the brand promise is a lot like Budweiser’s. And, we all know who wins the copycat game: The market leader. What’s next? Well maybe Dos Equis will tell us that their beer is Beachwood aged?
As I flipped through my favorite TV channels last night, an ad caught my attention. It was for a company called Servpro, a fire and water damage restoration company. In the rather simple ad, a mother was doing laundry in her basement with her child sitting quietly reading on the floor. The scene cuts to the same basement under about a foot and a half of water with a Servpro employee using some kind of vacuum to suck up the water. Then the scene cuts again back to the same mom and her child and the voice over and overlaying graphic say, “Servpro – like it never happened.”
At Stealing Share, we talk a lot to our clients about highest emotional intensity. That is, we look to identify the most highly emotional value in the market that reflects back on the self-identification of the customer. Often, this is built on a negative intensity, or the fear of a bad outcome. Or, it can be a positive intensity, where we look for an emotional way to talk about positive outcomes.
Servpro, appears to have capitalized on both positive and negative emotional intensities here. The fear of something really horrible happening and the positive of making this horrible event go away as much as possible (“Like it Never Happened). If I am unfortunate enough to have my home in a fire or flood after ensuring the safety of my family, I think my most emotional intensity would be for my home to be back as close to it was before the disaster.
From a positioning standpoint, Servpro owns a unique space. The vast majority of Servpro’s competitors talk about “Immediate Response” and “24-hour service” both of which are unemotional and prerequisites to be a fire and water damage restoration service. Servpro has claimed a strong position, one that is memorable and, more importantly, meaningful.
It is a sad commentary on the state of advertising and branding today that there are not more companies like Servpro that, at least from a messaging standpoint, understand the power of positioning and words. But it is nice to be able to compliment them when they get it right.
We have, over the course of the 10-year history of Stealing Share, worked with several beer companies because they are often the ones in need of the most help. Even now, we use that industry as a demonstration of a category lost when it comes to brand.
The reasons are very simple: Only two beers have meaningful brands, the market leader (Budweiser) and Corona, and the rest of the market apes Budweiser’s brand and marketing so thoroughly you can’t tell the difference.
Because of that, Budweiser is practically a monopoly in the beer industry, with more than 40% of the market (when you combine Bud Light with the main Budweiser brand). That number is gigantic when you consider there are so many different brands of beer in market.
The copycat nature of the industry only helps Bud, as audiences walk away from most beer advertising thinking it was a Bud ad.
I bring this up because there is one shining brand in the market, Corona. Currently, it holds more than 5% of the U.S. market – good enough for sixth place – and is easily the top imported beer.
I was reminded of the band seeing its new football-themed ad over the weekend, in which two bikini-clad women are besieged by footballs so the men on the beach can be near them to retrieve the footballs. The spot inches toward the Bud brand (authentic guys) but within the context of the Corona brand (relaxing).
That does concern me a bit, as last year’s “lime” ad was much more effective and on brand. While the current ad does fine – there’s no mistaking it with a Bud spot – its meaning is that one step closer to Bud. I hope they don’t go all the way and keep it right at this temperature.
The rule of brand positioning is just as simple as the reasons for stagnation in the market: Be different and better (more meaningful) than your competition. Corona has done that because it has, for now at least, understood that’s the simplest way to steal market share.
They have in their nature and name the word “group” and group dynamics are very different from the intimate nature of how human beings actually prefer one product over another. It is a fact that we all act and speak differently in a group than we do in private. Yet, the private moments are when purchase decisions are made.
One client that hired us told us that they had already done focus groups and that we could skip the qualitative portion (the one-on-one interviews we require before going into the field with quantitative research) and save money.
Luckily, they listened to our reasoning and we conducted our familiar one-on-one interviews (and they ended up growing their market share by 18%).
A most revealing insight was repeated over and over again that we later tested and turned out to be the highest emotional intensity in the category. Yet, it had never been voiced in any of the dozens of focus groups conducted previously. The reason was very simple because everyone who mentioned it started the sentence timidly by saying, “I know it may seem silly but I believed…” There you have it. No one wants to appear silly in front of a group.
If you have ever read this blog, you know I hate to fly and, more to the point, I really hate the airlines. This is a real problem for me because, as a course of business, I have to do it pretty frequently.
I constantly hold onto the small glimmer of hope that one day the airlines will take the steps necessary to fix their problems, even from a brand perspective.
Needless to say, that already small glimmer faded even more when I saw what United and Continental are doing with their visual identity. I guess it shouldn’t surprise me as I am used to being disappointed by United. But like someone trapped in a dysfunctional relationship, I am always trying to look for the best in the airline whose best is a shadow of the past.
It’s not that the new identity is so horrific I shield my children’s eyes from its carnage. But it represents a sheer waste of an opportunity to capitalize on this merger in a way that strengthens the brand for flyers. The forceful combination of the United and Continental logos are symptoms of a much greater problem with the airline industry as whole: They simply do not care about their customers.
Want proof?
After visiting the link above, read the “Deal Details.” It says, “The combined company will provide a platform for increased profitability and sustainable long-term value for shareholders. It is expected to realize $1.0 billion to $1.2 billion in net annual synergies by 2013, including between $200 million and $300 million of net annual cost synergies.”
Where is the customer in this? Yes, there is some copy that this merger will create the biggest airline with the world’s most “comprehensive” network. Why would that matter to me? It seems this is all really just about the merger – the logo says as much – and stockholder value. It’s just about piling more cattle on the cattle cars and capitalizing on economies of scale.
United and Continental have really missed an opportunity here to take a true leadership role in the airline industry. The “new” logo, I guess, is supposed to be a reflection of the merged companies with special emphasis on the “global network” vis a vi the Continental globe.
But I ask you, isn’t having a route to get someone where they want to go the definition of an airline? Instead of defining who the new United/Continental is and how it is can be an extension of the aspirations and beliefs of its target audience (including the desire to be treated like a person rather than a cow), it is simply restating what it has always said, “We can get you to where you want to go.”
Come on United and Continental, you can do better than that.
The image says it all. I bring this up not because of outrage, but because it demonstrates the desperation many brands feel that leads to wrongheaded attempts to gain awareness. (As though no one is aware of Burger King.)
There are two points to be made here. Obviously, Burger King had no idea what to say when they unveiled this a year ago – and that’s one reason why it’s losing market share. (McDonald’s currently has about three times the market share owned by Burger King in the quick-service sector.)
Even more so, did they ever consider who is the target audience? Who are they speaking to? Men? Do men want to eat this sandwich, considering the context? Women?
I’ve come across this before. We once worked for a company in B2B that wanted to go a route similar to this. Awareness was a concern for them, but they didn’t understand that (at that time) that awareness is created by creating preference. Awareness alone means nothing.
We’re all aware of a lot of brands, but we filter them out if we don’t prefer them. Going for the shock value in the misguided attempt to increase awareness is money wasted. Awareness is achieved by being meaningful in the process of creating preference.
It’s this kind of desperation at reaching for awareness – either without meaning or meaning that hasn’t been thought through strategically – that makes brands irrelevant.
We’ve spoken previously about retailers rolling out their back-to-school campaigns, but the new campaign for Foot Locker brings up an issue we haven’t raised: Leveraging a product brand to increase traffic to the retailer.
Even if you think the ads are effective (and I’m dubious, with the one held in art class being especially cliché), the main problem is that they only serve to help the Nike brand, not Foot Locker’s.
Nike shoes, of course, are available at a variety of retailers, including Nike’s own outlet stores. If the ads have any point of view, it’s that Nike makes for good fashion among the teenage set. From the point of view of the consumer, that only means they’ll go looking for Nikes, not rushing to a Foot Locker.
Foot Locker is a lost brand right now, which is one reason why standing on the shoulders of Nike leaves Foot Locker slumped. It could make it work if Foot Locker’s brand tied into Nike’s, but neither what the Nike brand is really about (being a winner) or the point of the spots (fashion) fits into the relatively meaninglessness of Foot Locker’s brand.
Foot Locker was one of the first specialty retailers focused on sports and was once the market leader. While it is still a major retailer when it comes to athletic footwear, competitors Dick’s Sporting Goods and Sports Authority are increasing sales, while Foot Locker’s are decreasing. (Dick’s recorded a 6.8% increase in sales in 2009, while Foot Locker’s dropped 9.1%.)
Foot Locker hasn’t refreshed its brand since it first emerged on the market, and that’s a problem. It now feels downscale and unfashionable to audiences, which makes it a particular problem for reaching younger generations.
Foot Locker, like any retailer looking to create preference, must ensure its own brand means something powerful to audiences before it can stand shoulder-to-shoulder with its product brands. And a relationship between them is key.
Otherwise, “class is in session,” as Foot Locker says, will be held elsewhere.
Tom Dougherty is the President and CEO of Stealing Share, Inc., and has helped national and global companies steal market share for more than 20 years. A former brand strategist for the internationally acclaimed agency, Saatchi & Saatchi in London, he oversaw the development of many Procter & Gamble brands, such as Tide and Pampers, in the Middle East and North Africa.
He also headed up agencies in Philadelphia and Washington D.C., and was the prime strategist for many well-known brands such as Lexus, Coldwell Banker, Homewood Suites, McCormick, Tetley Tea and many others.
An often-quoted source on business and brands, he has been featured recently by the New York Times, CNN and Fox News, discussing topics ranging from television to Apple to airlines. He has written articles for BrandWeek, American Banker and Barron’s and has also been the featured speaker at conferences worldwide where his dynamic presentations have prompted CEOs to re-evaluate the direction of their companies and products.
He is also the author of market studies on the airline and banking industries, and is the creator of two strategic models that serve as tools for brand development and messaging that affects a company's entire culture.
As I’ve mentioned before in a different context, Blockbuster is filing for bankruptcy. Honestly this comes as no surprise to me, I had been expecting it for a while now. In fact, I’ve been talking about this for more than year.
