August 04, 2006

An Unusual Twist in Internal Branding: The Microsoft Way

An important element of internal brand readiness is preparing employees for change through effective internal communication and resource deployment.

The next version of Microsoft Windows, named Vista, is due out in 2007. It is making a preliminary version of the program available in advance for company employees. What does Microsoft do for internal awareness? It quenches its employees thirst and reminds them of the launch at the same time with a customized can of lemon-lime sparkling water.

Our bodies consist of 75% water and people have to drink liquids often to replenish this water balance. As such, this liquid ad appears to be an effective method of ensuring employees remember the important stuff. Microsoft might not have invented the notion of the office desktop billboard, but it seems to be making efficient use of it for internal branding.


Source:
“The Insider: Microsoft rolls out Windows Vista, the soft drink,” Seattle Post Intelligencer, Monday, July 31, 2006
Web: http://seattlepi.nwsource.com/business/279428_theinsider31.html

July 14, 2006

Hip-Hop’s Influence on Brands

hiphop.jpg

It has been 35 years since its founding and hip-hop continues to thrive in urban America. Once a block party fad that started in the Bronx, New York, hip-hop is now a $4 billion-a-year-music industry that spans the globe. Although it has always been the voice of inner city youth and young adults, hip-hop has evolved to include the 25 to 34 year-old demographic segment. Proving its staying power, for the past five years hip-hop remains the top-selling genre over country music and is second only to rock music.

Formerly known as rap, hip-hop is a moving cultural force that first garnered the attention of corporate America in the early 90’s. When hip-hop made its debut into mainstream, corporate heads began to turn. Enterprising brand managers embraced the culture and soon realized substantial results.

In an effort to be a hip drink of choice, Coca-Cola’s Sprite brand began using rap music in commercial ads in 1994. Sprite Brand manager, Pina Sciarra affirmed that Sprite’s appeal as a favorite soda quadrupled as a result of the ads. Taking notice of Coke’s commercial success, Burger King and several restaurant chains followed suit with similar advertising approaches.

By bringing the edgy styles of favorite rappers to specialty stores, the fashion industry became a key contributor to hip-hop’s brand influence. Department store retailers such as Macy’s took notice and filled their racks with the likes of FUBU, Phat Farm, Mecca, ENYCE, G-Unit, and Apple Bottoms. Traditional designers even realized revenue potential in the hip-hop market. In 1999, Tommy Hilfiger reported a significant increase in annual sales after tailoring his line for “the hip-hop set.” Sportswear giant, Nike expanded its celebrity-advertising list to include hip-hop artist, Nelly. In 2003, Nike released 1,000 pairs of the rapper’s $120 limited edition Air Derrty sneaker. The sneakers reportedly sold out within hours. Luxe designer, Louis Vuitton recently jumped on the hip-hop brand wagon by making musician, solo artist, and Grammy award producer, Pharrell Williams its “new face” for the brand’s 2006-2007 line of Italian suitcases and bags.

Today, the hip-hop influenced urban apparel market does $2.2 billion in annual sales, which includes a celebrity-based designer list from the likes of singer, Beyonce Knowles to entertainment magnate, Sean “Diddy” Combs.

Among its influences, hip-hop transcends boundaries in politics, music, fashion, and other forms of entertainment. With 100 million fans worldwide, hip-hop also dominates many parts of mainstream media. Filmmakers, television show writers, and print publishers for example, are among media professionals who readily incorporate hip-hop lingo and fashion concepts in their products.

Despite the often-negative connotations associated with the culture, booming balance sheets continue to compel companies to use hip-hop’s market appeal to gain leverage.

References
http://www.businessweek.com/bwdaily/dnflash/may2005/nf20050516_5797_db016.htm
http://www.brandchannel.com/brand_speak.asp?bs_id=120
http://usinfo.state.gov/scv/Archive/2006/May/12-522164.html
http://www.forbes.com/business/feeds/ap/2006/07/03/ap2855881.html
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060517/BIZ/605170338/1005/LIFESTYLE
http://www.time.com/time/archive/preview/0,10987,19134,00.html
http://www.nobodysmiling.com/hiphop/news/72003.php
http://www.pbs.org/newshour/bb/entertainment/jan-june99/hiphop_2-24.html
http://www.allhiphop.com/features/?ID=1278
http://www.csupomona.edu/~rrreese/HIPHOP.HTML
http://www.blackelectorate.com/articles.asp?ID=1014
http://www.economist.com/intelligentlife/luxury/displayStory.cfm?story_id=6905921
http://news.bbc.co.uk/1/hi/magazine/5056744.stm
http://www.riaa.com/News/newsletter/press2001/031301_2.asp
http://www.riaa.com/news/marketingdata/pdf/2005consumerprofile.pdf
http://www.icce.rug.nl/~soundscapes/VOLUME02/Trends_and_shifts_in_music_sales.html
http://www.agendainc.com/brand.html
http://msn.com.com/2100-9588_22-5553356.html
http://www.vibe.com/news/news_headlines/2006/06/pharrell_becomes_face_of_louis_vuitton/
http://www.msnbc.msn.com/id/13350034/

June 15, 2006

M&A and the Valuation Impact of Brand Essence

These days we are seeing quite a lot of co-branding in the ice cream isle. Tie-ins with innumerous candy bars (Godiva, Snickers, Twix, M&Ms etc), SpongeBob, Squarepants, Care Bear, and Disney’s Alladin have all graced the shelves.

However, what is of interest regarding brand essence is found in the superpremium ice cream category. This category is dominated by two brands: Ben & Jerry’s and Häagen Das.

Nestle and Unilever are going at it in the $32.4 billion ice cream market. Nestle merged with Dreyers in 2003 to create an ice cream empire which includes Dreyers, Edys, Starbucks ice cream, Nestle, and Dole fruit and Häagen Das. Dreyers had purchased Häagen Das from General Mills in 2004.

Unilever which owns Good Humor, Klondike and Beyer purchased Ben & Jerry’s in August 2000 for $326 million. Overall, Unilever has 2000 brands of ice cream and the category accounts for about 10% of its revenues.

Unilever thought it was doing a good thing purchasing Ben & Jerry’s. However, one thing it seems to have overlooked is the impact of brand essence. Brand essence represents the core values of the brand, and for the pre-acquisition Ben & Jerry’s this brand essence was quite strong. Ben & Jerry’s was run by two quirky guys that loved ice cream and also had a strong interest in social responsibility. The firm was well known for its environmental advocacy and social conscious sourcing from its headquarters in Vermont. It was seen through the eyes of the consumer as counter-culture and idealistic.

Häagen Das, on the other hand, was known to be simply a high-indulgence ice cream without any of these social responsibility values.

What happens when a massive global corporation purchases a “mom & pop” type of brand? The brand essence suffers from incongruity. As you can see from the chart Ben & Jerry’s is sliding in market share in comparison with Häagen Das, so this brand essence contradiction could be an underlying factor in the brands market performance.

Ben & Jerry's vs. Haagen Das.png

A similar issue happened with Beatrice. Beatrice, a food giant in the 1980’s, found that utilizing a corporate brand often was counter productive, especially on craftsman type of products where the corporate identify was would smother that of the child brand. For small dairy farms the corporate brand’s positive elements would be offset by its negative elements. Beatrice found this all out the hard way and has since vanished.

Acquirers in the M&A world would best learn from these experiences and be sure to measure brand essence to uncover divergent elements in the target brand which would wipeout other potential synergies.


Sources:
Nestle Investor Seminar June 2004, Presentation
Mintel Ice Cream Report June 2005

June 09, 2006

Branding your run.

Nike and Apple have teamed up to be your ultimate running buddy. A variety of new Nike running shoes are available in stores (or lately to be in stores) that come with a small cavity in the foot bed in which to place a transmitter. The transmitter, made exclusively for your iPod nano, is available in Apple stores, online or brick-&-mortar. The transmitter relays the distance traveled and “talks” to the iPod so that when you’re gasping for air and about to run into that Krispy Kreme for a little respite and reprieve you are gently reminded that you have only 1.2 miles to go. This is where the ability to kick it up a notch by playing your “power song” will propel you to steer clear of the donuts and stay on track until the finish. Further garnering the power of stick-to-itiveness is the tracking capabilities you can monitor on your iMac before and after your run.

The innovative part of this new product/service, aside from the actual cool-factor the iPod and Nike brands bring to the table, is the user interface Nike runs on nike.com to complement the product/service. The extension of the experience with the brands may be the key factor to making this product stick with customers. The key differentiation for this UI is the attention to design. It’s intuitive and easy to understand and interpret. Both the aesthetic and functionality make you want to get up off the couch, pull on those Nike shoes, strap on your iPod nano and run like the wind, just to see it working!

The real innovation here is the continuation of the Nike brand and iPod brand using a synergistic approach to building a brand experience. The value derived from the experience for the runner is enabled to be an emotional one; thus, a bond is created. And then to further develop that bond (or nurture that customer relationship) Nike built an engaging community encouraging ongoing interaction, input, creativity, and, ultimately, (and here’s the key, branding folk) a relationship.

We’ll have to wait and see if it success ensues. From a brand angle it sure seems like it will be off and running in no time flat.

June 07, 2006

How to get people all riled up.

How to get [business] people all riled up.

Talk about the following: Innovation, Branding, and Design.

Of course you don’t ever have to actually suggest a plan of action for making those key ideas and buzz words a part of your corporate culture or business strategy, but rather just sprinkle them in. A lot of people have been doing a lot of sprinkling these days. Talk, talk, talk. Very little action. We’ve seen what these “in” ideas and words can create in the case of P&G or IKEA or Target or Apple [And the list goes on] but really, how do these exemplary businesses turn a couple of big ideas and words into an action and an executable strategy that can sustain? How does a brand successfully leverage design to create innovation manifesting itself into a cutting-edge, desired, and obsessed-over brand?

Look no further than Mr. Nussbuam’s new magazine venture, INside Innovation. This magazine will “teach managers how innovation really gets done”. [Check it out for yourself: it goes live tomorrow night, June 8, 2006.]

What a great concept. You know Bruce Nussbuam as the BusinessWeek authority and guru on all things business, design, and innovation. Giving structure to what the majority sees as obvious and yet ambiguous is a behemoth task. But kudos to Mr. Nussbuam for taking on the challenge, for his expertise and the knowledge to surround himself with folks of the same caliber should prove inspiring and intriguing and will surely incite much debate. And, oh, how I love a good debate!

Speaking of which…

How to get [design] people all riled up.

Undermine their role by holding a contest rather than a client review from an employed design team/firm. Check out DesignObserver’s blog for the latest debate on this one. [Make sure you’ve got some time to read. You’ve been warned.]

April 26, 2006

Art and Branding: A Collision in the Desert


Art is about mythmaking.

Branding is about creating value.

Value creation also can involve mythmaking.

Since branding and art both involve mythmaking, it seems natural for art and branding to collide. That is exactly what happened with Prada Marfa.

Many people are quite familiar with Prada, the Italian fashion company which holds prime space in elite urban shopping centers around the globe. When Prada opens a new store in downtown Tokyo…well that is something that is expected.
What is completely unexpected is to find a Prada in Marfa, Texas. The town of Marfa is located in the West Texas desert near the Mexican border. It has a population of 2,121 and is about 9 hours drive from San Antonio.

In 2005, two Scandinavian artists installed a Prada mini-boutique in the desert 26 miles from Marfa. This sculpture is a 15 by 25 foot adobe building designed to look just like a Prada store, and even contains Prada merchandise. The main differences between this sculpture created by Michael Elmgreen and Ingar Dragset and a real Prada store are:
 It is completely out of context
 It is a mini version
 It will never open
 It will not be maintained

Well, the last item is debatable. The sculpture was vandalized soon after it was finished. Shoes were stolen and the building was spray painted with graffiti. After that break-in happened a handyman restored the building.

Art and clothing are intertwined. Clothing is already woven with myth. If you think about the functional value of clothing on Maslow’s hierarchy of needs you simply need clothes to stay warm. If that is all that mattered about clothing, then a $3 shirt, $10 pants, and $5 sandals from Walmart would suffice. That is a complete ensemble for less than $20. So, why then do people spend upwards of $500 on a mere shirt from Prada?

Clothing is transformational. It is aspirational. It is enveloped with social meaning. People are paying $3 for the shirt and $497 on symbolism.

By supporting the artists in this desert adventure, Prada reinforces its sphere of meaning beyond simple utility of clothing. As doing so it becomes a more interwoven part of the lexicon of the art world. And the myth grows.


Weblinks:

- Prada Marfa website

- article

April 17, 2006

Process Makes Perfect: A is for Apple, B is for Beatles, M is for Marriott

Applecorps.jpg


For those of us around long enough to remember that music was played on vinyl records, the apple logo was pretty famous. It is not the same apple logo that is associated with iTunes, but rather the apple logo that represents George, John, Paul and Ringo who you might remember as having the band called the Beatles.

Apple Corps is the company that was formed by the Beatles members and its main division, Apple Records, served as their record label. Apple Corps also included several other divisions in its portfolio including Apple Electronics, Apple Films, Apple Publishing and Apple Retail. The Apple Corps logo was based on the well known painting by Rene Magritte whose painting Paul McCartney acquired.

In 1981, Apple Corp sued Apple Computers and the latter agreed to restrict its use of the name to computer products. In 1991, Apple Corp sued again as the computer company started branding music synthesis products. As a result Apple Computers paid $38 million for the settlement.

If you seek out Apple iTunes on the web you will find it on the Apples Computer website. This website is undoubtedly branded with the Apple brand. So, it looks like even after two law suits about the trademark the management that launched iTunes overlooked the legal implications of launching the offer which directly overlapped with Apple Corps core business (pun intended). The case was recently tried in London and judge has not yet declared the ruling. If the judge rules against Apple Computers for the third time it could be a costly oversight for company as it quite possibly could have to pay a royalty on all future music sales on iTunes.

In the Hotel industry beds are front and center in the brand offer. That is why Marriott spent a year designing and testing its new luxurious bed which features “Down Surround” pillows, a down comforter with duvet cover, and a lightweight down blanket on a plush pillowtop. This was a mammoth undertaking involving 628,000 beds at over 2,400 hotels. The hotel touts the project as using 30 million meters of fabric, enough to stretch 75% around the world.

This all appears quite wonderful for the weary traveler, but it seems like Marriott overlooked the operational impact of the program on the housekeepers at the hotels. Housekeepers must change 16 rooms a day (containing 26 beds), and now with all the extra pillows and duvet covers they have less time to do each task. In a UCSF study researchers found 62 percent of housekeepers has seen a doctor for pain and 84 percent were taking medicine for pain they incurred at work. And these housekeepers are voicing their discontent with the program. When employees are unhappy, it’s bound to rub-off on the customers whether consciously or subconsciously. And that negativity will offset positive gains in the brand experience. Marketing actions impact business operations and it’s the entire process that needs consideration when developing new brand value.

In the development of brand value the new programs launched often have wide ranging implications and yet too often we see companies launching programs without thinking through the legal, operational or other consequences.

For quite some time the world of product development has focused on process management. That is because the engineers in product management understand that working with established procedures in new product development helps by reducing the chance of malpractice. Even commercial airline pilots who all are highly skilled professionals that fly commercial aircraft every working day use preflight checklists before takeoff. The pilots do not simply check the gas gauge and decide to make a go of it. There is something to be learned here. The brand experience is delivered cross-functionally and understanding the entire process of brand delivery is the perspective brand managers need to adopt. This is a call for action for brand managers to document, process map, and double check the flight plan before taking the controls.

Related Links:
- Apple Corps
- Apple Computer

Sources:
- After a Year Designing and Testing, Marriott Introduces New Bed, Featuring a Seven-inch Jamison Mattress, Hotels-Online.com, Accessed April 17, 2006

- 628,000 Marriott beds to get luxury makeover by the end of the year, CNBC, Accessed April 17, 2006

- Battle of the beds, SFGate.com, Accessed April 17, 2006

- A Couple of Apples Square Off, Wired.com, Accessed April 17, 2006

The Apple Corps logo is protected by copyright and/or trademark. It is believed that the use of low-resolution images of logos to illustrate the corporation, sports team, or organization in question qualifies as fair use under United States copyright law.