The brandgym blog

Extend the core: Grow the Core Book Post 4

This is the fourth of a series of weekly posts introducing key themes from the new brandbgym book, Grow the Core: How to Focus on Your Core Business for Brand Success. Here, we look at the final of the three main ways to grow the core, which is extending the core.

Our official launch day is next Monday, 4th Feb. But you can already get it here if you like: on Amazon.co.uk. Or, if you are a Kindle fan, the book can be dowloaded here.

Core range extension offers new versions of the core product or service, such as Dove bar introducing a Refreshing Green version. This is very different from brand stretch, where you move beyond the core into totally new markets, such as Dove launching deodorants. 

The double whammy: penetration x profitablity

Range extension can be a great way of growing the core. It can drive penetration by widening the brand’s appeal to more people on more occasions. But it can also deliver an additional business benefit for the core in the form of ‘premiumisation’: charging a higher price for new benefits. This drives not only volume share but also value share. As long as the new product features are genuinely adding value to the consumer, the premium price should at least recoup the extra cost of the product to maintain percentage profitability. In the best cases, the core range extension actually delivers significantly more profit per unit sold. 

A great example of this ‘double whammy’ of penetration and premiumisation is Gillette. The brand has been unrelenting in its drive to develop better and better razor systems. So, we have gone from Sensor (two blades) to Mach 3 (three blades) and now Fusion (five blades). Each of these is priced at a premium, supported by superior benefits. The growth in the UK core shaving business over this time was impressive, with the razor and blade business up from £128 million in 2002 to £180 million in 2006, with value share up from 60.1% to 67.9%;

Pack extension – WD-40 

Extending through packaging formats is a great way of growing the core. You sell more of the same core product, rather than adding new products. A great example is WD-40, the multi-purpose lubricant which stops squeaks and unlocks stuck bolts, amongst its many uses. WD-40 used to come with a little straw taped on the side, to help direct the spray. The problem was that people would often lose the straw. This led to the creation of ‘Smart Straw’, a new WD-40 pack with an integrated straw that flips up to use and back down to store. Smart Straw solves a real problem and makes the product easier to use. And as it offers consumers real added value it supports a premium vs. the normal can. 

Product extension – Ryvita 

After having done all you can to sell more of your existing product offer, the last step is to consider adding new products. Here, there is a need to focus on those products that genuinely offer potential to drive penetration by widening the brand’s user base. A good example is the Ryvita's ‘seeded’ crispbreads. These have played a role in re-positioning the brand from being a diet product to a tasty, crunchy and healthy product. The core extensions deliver a more interesting and tasty eating experience, whilst also offering extra health benefits. These extra benefits are worth paying more for, supporting a 60% price premium versus standard.

In conclusion, core range extension can be a great way of growing the core, providing your new formats and products add real consumer value that supports a price premium, delivering the double whammy of penetration and profitablity.

 

Will Volvic's request for consumer content erupt?

Volvic mineral water has joined the long line of brands trying to get us to create and share content. The brand is asking people to enter a contest by "Submitting a photo that they feel most strongly expresses the 'Volcanicity'brand idea", according to Marketing.

Hmmm. I'm not sure there is going to be an eruption of people wanting to "form an ongoing team of social media brand advocates called Team Volcanicity", as the campaign sets out to do. Here's why.

1. Most consumers want to consume content from brands, not create it

Only 5% of social media users can be bothered to create content for brands. People want to consume content, get offers, possibly comment or like on stuff, as shown by the research we did last year with UK and US consumers. This is 6 times lower than what marketing directors think, having bought the idea pitched by social media agencies that consumers want "a 2-way conversation" with brands. 

One indicator that Volvic is no exception to this is the very low % of people interacting with Volvic's facebook page. It has 39,306 likes. But only 78 people or 0.2% are "talking about this" (a measure of how many people are interacting by liking content, commenting etc.). That is really low. The average for the UK's top 10 brands we estimate at 1%.

2. Involvement needs WOW content x ease of entry

 To have any chance of getting consumer involvement of any kind you need a wow idea, and ease of entry. The Volvic contest offers a "state of the art camera" and "access to the hottest festivals", which is OK I guess, but not really wow. And as mentioned above, entry needs you to take and upload a photo inspired by the brand idea of Volcanicity. And I would expect that the number of people ready to do this to be only in the hundreds.

I've posted here on Carling's "Be the Coach" campaign, that got 11 million entries, through a wow offer (pick the team for your fave soccer club) and ease of entry (vote via SMS).  

3. Most brands have users, not "fans"

Jon Marchant, brand manager at Volvic, described the campaign in Marketing as "the first time we've reached out to our fans in this way". I find it hard to believe that there are many "fans" of Volvic mineral water. There are plenty of brand users. There are people who like it, and some maybe even prefer it. But I suggest that considering these people as fans is an exaggeration, and leads you down the wrong path in terms of marketing. This is mineral water, not a luxury goods or lifestyle brand.

In conclusion, brands like Volvic would be better off creating distinctive marketing to drive penetration, not asking consumers to create content for them.

Drive distribution (Grow the Core Book Post 3)

This is the third in a series of weekly posts introducing key themes from the new brandbgym book, "Grow the Core: How to Focus on Your Core Business for Brand Success". Here, we look at one of the three key ways to grow the core: driving distribution.

The book is officially out on 4th Feb, but there are limited stocks to order or pre-order on Amazon.co.uk or Amazon.com. Or, if you are a Kindle fan, the book is ready to dowload here.

Distribution: sure to help you SMS

No-one really knows what effect social media has on your core business. Come to that, a lot of marketing activity is still hard to evaluate. But one thing is sure to help you "SMS" (sell more stuff), and that is driving distribution. If you get your brand sold in more places, you will reach more people and so sell more.

Grow in existing channels

At the most basic level, this is about dirving distribution in existing channels. Tom Allchurch and the team at ready meal brand Charlie Bigham's have worked hard to get the brand into Sainsbury’s supermarket, in addition to Waitrose. This retailer also has an excellent reputation for fresh, tasty and high-quality food and, most importantly, it reaches a lot people, having a 16% share of the UK market. This extended distribution is forecast to dramatically increase the sales of Bigham’s by c. 70%. 

In addition to extending distribution, you can also grow the core by increasing your presence in store. One way of doing this is working on multiple placings in store, something that WD40 have used to great effect in DIY stores.

Grow in new channels

This tends to be much harder, requiring a change to the company’s whole business model. This is why, in many cases, channel innovation stays stuck in the ‘too difficult’ box. However, creating new routes to the market can be an excellent way of growing the core, and a way for brand owners to wrestle back some of the power currently held by the major retailers which have become increasingly dominant over brand owners. 

Examples of growing in new channels include Coke's extensive use of vending, linking to food in restaurants and selling at events. A step even further is creating your own retail channel, both online and physical, as has been done with great success by Nespresso, that I posted on here. 

In conclusion, driving distribution might not be the sexiest bit of marketing, but its definitely one of the best ways of growing your core.

Do you want to be a marketing director who can "Save the Children"?

This is one of my occasional plugs for great companies and organisations looking for talented marketers to join them. And this one is a cracker: Marketing & Communications Director for Save the Children UK, the leading children’s charity. 

This is to replace Jude Bridge, who has become Global Brand & Marketing Director at Mothercare.

You can dowload more detail on the role and what's required by clicking here: M&C Director Overview.

The contact is Alasdair MacDonald at a.macdonald@savethechildren.org.uk

 

Creating your brand's myth, using archetypes

Guest post from Prasad Narasimhan, our Managing Partner for Asia, based in Bangalore, India. 

In London recently, I made my customary pilgrimage to Hamleys, the ‘Finest Toy Shop in the World’. Even as I pretend to myself (each time) that I go there to shop for my kids, I know that it is really all about indulging to the kid in me. There is something special about the place, a magical cocktail-world of Willy Wonka, Peter Pan & Huckleberry Finn.

No other toyshop makes me feel this way. Of course they all sell toys. But Hamleys sells so much more – magic, adventure & the opportunity to be a child all over again. Vibrant & unique, it evokes very distinctive forms & images in the mind, making thousands like me visit it again & again.

Brands and archetypes 

It is these patterns of forms & images that we all recognize that Jung labeled ‘Archetypes’. He believed that archetypes spring from a universal shared unconscious, & further asserted that these archetypes have the same meaning for people around the world.

Jung postulated 12 basic archetypes & it is believed that brands, like people, evoke one of these in our heads based on their actions. In our experience however, brands often come through not as one, but as combination of 2-3 key archetypes.

Hamleys for me is clearly a Magician-Explorer-Creator, a set of associations & images that makes it distinctive from any of its competitors.

So What?

While the knowledge of archetypes is interesting to us as marketers, what is much more interesting & useful is to know that we can use this knowledge to create compelling identities for our brands. 

In today’s hypercompetitive markets where brands need to be really distinctive to even get noticed, archetypes offer a wonderful tool to imbue our brands with the X-factor they need to lead; brands with personalities that our consumers would ‘love to meet’.

At the brandgym, we often use archetypes as a projective thinking & creation tool. Whether we are creating new brands or refreshing old ones, we use archetypes to design imaginative brand actions, which when implemented over time, build brand myths.

How it works in practice

A typical session flow will be as follows:

1. We introduce the concept of Archetypes in simple terms
2. We then bring to life each archetype in an inspiring way, with brand examples
3. As a team, we pick up the ones that seem to fit the evolving Vision spaces
4. We finally apply to the brand to create ideas for action, benefits, values & personality

For example, in a recent workshop for a state government in India that was seeking investments in the state, we explored the following actions inspired by Archetypes.

1. As a Nurturer. Handhold investors with involvement & empathy. Super-fast clearances. Mitigate risk with steps including IP protection, good labour policies etc. Nurture businesses through creating modern infrastructure, timely service delivery, flexibility, attractive tax holidays, personalized B2B relationships & sensitivity in attitude.
   
   
2. As an Explorer: Pioneer all hi-tech industries such as aerospace & nanotechnology. Promote tech tourism & eco-sensitive manufacturing. Leverage local/rural populations. Explore new investor markets in Far East/ East Asia. Connect with Indian Diaspora globally. Create tailor-made investment packages etc.
   
   
3. As an Outlaw: Walk the talk. Create a sharp sectoral approach to business. Set up time guarantees & trackers for investors. Invest in rural markets. Support less advantaged groups. Promote alternate energy. Free education & food for all employees etc.

The Brand Personality traits that emerged (Boldly Imaginative, Efficient but not Stressed, Makes Friends Easily, Takes Care of Friends) were seen as refreshingly different from the bureaucratic stereotype of a state government, and the resulting Brand Vision is in the process of implementation.

Summing Up

In the ‘Zen and the Art of Motorcycle Maintenance’, the author suggests that “bones & flesh are the garments worn by the personality, not the other way around”. I believe that brands are pretty much like that - the more distinctively we can imagine the brand personality and surround it with the right ‘bones & flesh’, the more we can set them free for growth. And archetypes are one great way to do that.

Be distinctive, not different (Grow the Core Book Post 2)

This is the second of a series of weekly posts introducing key themes from the new brandbgym book, Grow the Core: How to Focus on Your Core Business for Brand Success. Here, we look at one of the three key ways to grow the core: by being distinctive, not different.

The book is out on 4th Feb, but you can pre-order here if you like: on Amazon.co.uk or Amazon.com.

Marketers are often exhorted to "Differentiate or Die". But in reality, differentiation limits your potential to grow the core. Differentiation drives you to seek out secondary benefits. And this risks reducing your appeal, as you have moved away from the middle-ground of the market and the most important core benefits people want. This is OK if you are happy to be a niche "follower" brand. But not if you want to be a leader.

Leader brands are not differentiated. Rather, they have distinctive marketing mixes. This allows them to express the core market benefits in a way that is more impactful and memorable. For example, O2 used a highly impactful blue and bubbly visual brand world to stand out in the mobile network market. 

The book goes into detail on the different ways you can create a distinctive marketing mix for your brand, including:

- Product: Nespresso's range of 16 ‘grands crus’ coffees with exotic names also makes it distinctive from the more conventionally presented competition. 

- Identity: Nivea's little blue tin has stayed consistent for over 50 years, and remains at the heart of Nivea's identity

- Activation: Carling Black Label in South Africa created the "Be the Coach" campaign, allowing soccer fans to vote to pick the teams for a special cup match between South Africa's top 2 teams, the Kaiser Chiefs and The Orlando Pirates

Look out next week for the thrid post, will look at the next key driver of core brand growth.

Tesco horse burgers: hope for brands?

One of our brandgym rallying calls is "Where's the Sausage?", or as they say in America, "Where's the beef?" And this is a question that millions of Tesco shoppers are asking this morning, following reports that Tesco's Everyday Value "beefburgers" have been found to contain ... 29% horse meat.

This is bad news for Tesco, who have remove all their burgers from stores and suffered a 1% drop in share price, wiping £300million off the company's value. But it could be a welcome ray of sunshine for brands, in today's tough times of retailer power, own label copy cats, consumer caution and raw material price hikes. 

Brands make life easier by standing for "A known and trusted experience, that appeals to head and heart." The key word here is trusted. And trust is easier to build when a brand focuses on a core business and being famous for something. Common sense says that someone focused on making a few things really well should sell better stuff than someone trying to be a "Jack of all trades", such as Tesco selling thousands of different own label products. So, we trust Heinz to make great Ketchup. Hellman's to make the best mayonnaise. This trust has been created through decades of consistent performance.

In contrast, many consumers tend to believe that standard own label is not quite as good. They question the quality of ingredients and production. After all, Tesco selling thousands of different own label products. And Tesco's horse burgers have reinforced this negative memory structure, helped by the power of online news propogation (a Google search for "Tesco horse burgers" have 750,000 results).

Here are some suggested action points for brands:

1. Sausage (or beef) matters

Tesco's troubles are another reminder that product quality, or sausage, cannot be taken for granted. Don't rely on emotional sizzle alone to be distinctive versus own label. The best brands combine both sausage and sizzle. A good example is Bird's Eye (Iglo), who are trusted to make the best frozen peas. And good burgers too. Will the brand be brave enough to run some burger ads today I wonder?!

2. Focus on the core

Trust is easier to build up if you focus on being famous for something. This means having a brilliant core business, and a stream of renovation to keep it fresh, exciting and up-to-date. For example, McCain have focused on the core of frozen potato products, delivering these in different formats for different occasions.

3. Strategic supply chain 

This story shows how important the supply chain and sourcing have become today. The occasional factory trip is no longer enough for marketing folk. Of course, the best companies have always known this, with Mars a shining example. Mars offices are built next to the factory. All Mars marketing and sales trainees work on a factory production line for couple of months. And the product is tasted daily on the production line, even if you work on Whiska's catfood.

In conclusion, Tesco's horse burgers are a reminder that being famous for product quality on the core still matters and is a key way for brands to build trust.

HMV failed to re-invent the core

We're only in the 2nd week of 2013, and high street music store chain HMV has announced that it has gone bust. This follows hot on the heels of Jessops, a chain of photography stores, that closed down last week. A total of almost 6,000 employees risk losing their jobs. 
What can we learn from this sorry start to the new year?

1. Re-inventing the core

The most successful companies have leadership in a core business they focus on. An ongoing stream of renovation keeps this core healthy. However, sometimes renovation is not enough, and the need is to re-invent the core. This is a topic I touch on in the Grow the Core book, that comes out on Feb 4th. This invloves bottling the magic of the brand and then delivering this via new business model. For example, IBM took their expertise in computing and IT, and transformed themselves into a consulting business, selling their PC business.

Companies like HMV and Jessops fail because they were to slow to re-invent the core in the face of disruptive change from shopping moving online. This was probably caused by "marketing intertia": carrying on with what you know works, and avoiding launching new services for the fear of "cannibalising" the existing business. This is well illustrated by some cartoon genius from Tom Fishburne below. However, if your core business really is undergoing disruptive change, "keeping the cannibals in the family" is a better approach, pro-actively launching a new version of the core before someone else does.

2. Think business model, not just marketing

The demise of HMV, along with other famous brands like Blockbuster and Kodak, was not caused by mediocre marketing. It was caused by more fundamental problems with the business model. As one analyst commented: "HMV's demise is a structural failure. In the digital era where 73.4% of music and film are downloaded or bought online, the business model has simply become increasingly irrelevant and unsustainable." The store chain tried to re-vamp the product offer, by selling iPods and other electronic devices in addition to DVDs and CDs. But this wasn't enough to save it owing to the growth of online shopping, and their lack of buying power to compete with Amazon.

Now if you're working in consumer goods, you might think that business model thinking is not for you. Wrong. All companies need to think about business models, not just the marketing side of things, such as communication, design and promotion. Take brand stretching for example. Lynx/Axe shavers had one of the brand's best ever marketing campaigns, but Unilever didn't have a viable business model to compete with Gillette. It had to out-source production to an Asian 3rd party, in addition to a lack of shelf presence in the shaving aisle.

3. Add value, not just cost

A common response to brand problems is to re-vamp the product or service, which adds cost. The problem in today's cash-strapped society is that in many cases consumers aren't prepared to pay more for these upgrades. In the case of Jessops, the camera shop tried to differentiate by offering advice and technical help. But consumers could take this advice, walk out the door and buy the camera somewhere cheaper, probably online.

The same goes in consumer goods. New features sometimes add cost, but not enough value to justify a higher price. The result is either a big hit in sales, or being forced to maintain price and suffer a lower profit margin.

In conclusion, HMV have shown the heavy price to pay for companies who fail to pro-actively renovate or even re-invent their core business.

 

Why grow the core? (Grow the Core Book Post 1)

This is the first of a series of weekly posts introducing key themes from the new brandbgym book, Grow the Core: How to Focus on Your Core Business for Brand Success. We start by looking at the question, "Why grow the core?"

The book is out on 4th Feb, but you can pre-order here if you like: Amazon.co.uk or Amazon.com

Marketers have been told to "innovate or die". They've looked longingly at the spectacular success of Apple in stretching away from their core in computers to launch the iPhone, iPod and iPad. And there's not shortage of help on the subject, with 40,000+ books on Amazon about innovation.

So, why bother growing your core business? 

Well, innovation might be the topic that grabs all the headlines and gets brand teams most excited. But when it comes to driving profitable growth, having a strong core business is the key to success. Research from Bain shows that the vast majority of "sustained value creators" focus on leadership in one core business (see below).

The benefits of growing the core

Growing your core makes what is strong even stronger, both in terms of your brand and business, and it does this without adding any complexity. A good example of this is the excellent work done by easyJet to improve on-time departures and introduce reserved seating

On the business side, growing the core increases economies of scale, as you are selling more of the same stuff. From an organisational standpoint, the company is honing the skills and competences where it is most effective. And from a brand view, you are refreshing and reinforcing the attributes that made you famous. 

The risks of brand stretching

In contrast, stretching into new markets risks dilution of core brand equity as the brand has to communicate multiple benefits. It also creates fragmentation of the brand’s sales, with these being spread over a larger number of smaller products. It can also provoke a dangerous decline in the core business, owing to resources being diverted to support the ‘new toys’. Marketing budget is taken away from the core and the best talent in the team gets distracted from the core business.

The brand stretch graveyard is full with examples of brands unsuccessfully trying to stretch beyond the core, such as Levi's Suits, Axe/Lynx shavers and Cosmopolitan yoghurt.

How to grow the core

Grow the Core focuses on three drivers you can uses as a practical toolbox on your business.

The first driver is using distinctive marketing to create ‘fresh consistency’. Consistency comes from creating and amplifying distinctive brand properties that work as a unifying force. Freshness comes from waves of marketing activity that deliver ‘new news’, including communication, product and activation.

The second driver is increasing distribution to make the core avail- able in more places, using both existing and new channels. Importantly, these first two types of core growth both help you sell more stuff, ‘SMS’ for short. They require no additional products or services, but rather increase revenue from what you already have.

The third and final growth driver is core range extension, both through new packaging formats and products.

Look out for next week's post that will focus on the first of the core growth drivers, distinctive marketing.

10 Reasons Your Top Talent Will Leave You

Great post on Forbes by Mike Myatt, about why top talent will leave your company. He suggests that companies focus too much on process and systems for talent retention, and not enough on really engaging with people at a human level.

And if you have any role in retaining tallent, you should read on. Some killer stats in his post: More than 30% believe they’ll be working someplace else inside of 12 months; More than 60% don’t feel their career goals are aligned with the plans their employers have for them; More than 70% don’t feel appreciated or valued by their employer.

Here are some highlights from his post on why top talent leaves:

1. You Failed To Unleash Their Passions: Smart companies align employee passions with corporate pursuits. Human nature makes it very difficult to walk away from areas of passion. Fail to understand this and you’ll unknowingly be encouraging employees to seek their passions elsewhere.

2. You Failed To Engage Their Creativity: Great talent is wired to improve, enhance, and add value. They are built to change and innovate. They NEED to contribute by putting their fingerprints on design. Smart leaders don’t place people in boxes – they free them from boxes. What’s the use in having a racehorse if you don’t let them run?

3. You Failed To Develop Their Skills:Leadership isn’t a destination – it’s a continuum. No matter how smart or talented a person is, there’s always room for growth, development, and continued maturation. If you place restrictions on a person’s ability to grow, they’ll leave you for someone who won’t.

4. You Failed To Give Them A Voice: Talented people have good thoughts, ideas, insights, and observations. If you don’t listen to them, I can guarantee you someone else will.

5. You Failed to Lead: Businesses don’t fail, products don’t fail, projects don’t fail, and teams don’t fail – leaders fail. The best testament to the value of leadership is what happens in its absence – very little. If you fail to lead, your talent will seek leadership elsewhere.

In conclusion, as Tom says: "If leaders spent less time trying to retain people, and more time trying to understand them, care for them, invest in them, and lead them well, the retention thing would take care of itself."