Genesis vs Hyundai Genesis

hyundai_genesis_sedan_by_shinjeongho

Hyundai has recently launched it’s new Genesis line of cars. They are to be vehicles of quality far beyond what you’d expect from the conventional Sonata and more inline with higher-end European imports. If the brand name sounds familiar, that’s because Hyundai has been trying and failing at selling a car into the luxury market called Hyundai Genesis for some time now.

Why have they had such a hard time of it under the Hyundai name? It’s a question of how far you can stretch the qualities of a brand before its limits are reached. Since it’s arrival in the US, the Hyundai automobile has developed a reputation for a reliable, cost-effective product. Increasingly, it’s been known to be of perhaps higher quality than equally-priced vehicles in their markets. I’d assume that the Sonata is to be put against the Ford Fusion, but really it could easily compete with it’s larger, more robust sibling, the Taurus. That’s how to create value. Hyundai is a master at it. The problem is that the luxury automobile market is not connected by a gradient of quality from standard car offerings. It’s a tribe unto its own. Just as a company like Cadillac has issues reaching down to the middle market, a brand like Hyundai has just as difficult a time reaching up.

x240-pag

A luxury car owner wants to be portrayed as set apart from the commoners, and that’s part of the reason for the difference in price. Quality is almost secondary to the inherent billboard that states the owner of a BMW or a Lincoln has the financial means to purchase one. The Genesis may always have had the qualities like a Lincoln but the name doesn’t garner that same economic pedestal that the latter’s badge indicates. In short, no Cadillac buyer is going to pass up a Cadillac showroom to mingle with the masses at a Hyundai dealership. Hyundai just could not get the right shopper to look at the car with the current brand.

After maybe a decade of trying, Hyundai finally succumbed to the process of building a new brand that could be distinct and one that could be positioned in the right space with the target customer. This is no surprise, as Honda (Acura), Toyota (Lexus) and Nissan (Infinity) have all done the same thing.
This is opposed to Volkswagen who never figured it out with the Phaeton.

Advertisements

Why it doesn’t matter if Microsoft Sells any Tablets (it’s all about Windows 8).

Microsoft launching their own tablet is big news. Lots of people talk about how this is a bad idea. The weirdness of a software company toying with selling hardware leads folks to usually bring up Zune as a rationale for why. The thought here that most are missing is that it doesn’t matter is Microsoft sells any Microsoft-branded tablets, but it does matter that Microsoft got to launch the first Windows 8 tablet.

Being first is very important. By taking the time to launch their product on the exact right hardware to show off all the features allows Microsoft to set the appropriate bar for where OEMs will need to start to make sure that Win8 becomes a viable tablet product at the onset, rather than playing a continuous game of catch-up like Android is having to do. Since the level has been set, it leaves OEMs no choice but to launch their Windows 8 tablets at the same bar or exceed it just to play in the market.

Thinking of Android tablets is a very good example. When Android tablets were first introduced, they were underpowered, over-priced and lacked a lot of the critical features that made the ipad great. A mess of short-sighted, noncompetitive products flooded the stores, and then glutted Woot. Second attempts at creating something competitive (aside from Samsung) have basically fallen flat. It is plainly obvious that most tablet OEMs have not understood where to be in terms of technology to be competitive. Microsoft could not take the chance for the same lackadaisical product work to happen with the launch of their tablet operating system. Vendors now can’t take the cheap route. They’ll have to create at least competitively spec’d products with the Surface.

The move is very sly and one that shows Microsoft learns from others’ mistakes. Coming out with the best possible spec machine forces OEMs to start competitively rather than to have the occasion to start at perhaps a less than optimum level—which is what had essentially doomed Vista (not to mention all of the Android tablets) when it was sold on under-powered machines to the masses, causing the OS to be sluggish, amongst other things.

Further, by putting out their ideal specs to the market before the OEMs , they’ll also get to set the price schedule for Win8 tablets. If pricing is done well, the Win8 tablets can price itself to be more than competitive with the ipad. For instance, if MS places the price of the Intel tablet within $100 dollars of the iPad, it will force the iPad to battle against something far more powerful (Intel-based full-version Windows), while the ARM tablet would have to price in lower, outside of competing against a more powerful and entrenched iPad. A pricing format like this would force Apple into competing with essentially a desktop-powered tablet and diving into a commodity market or watch its market share recede into the 5% niche it was in before the iPod. Not to mention, this creates the beginnings of the tiered pricing scenario seen in laptops and an entry point to essentially commodity tablet market that has gone nearly untouched.

Let’s not forget, Microsoft’s profitability is not based on one single product no matter how well this tablet sells and it may not make any difference if it never comes to market. Microsoft may even see it a shrewd move to sell it at a loss. A classic example of this is Amazon’s Kindle and even more indicative is Microsoft’s own Xbox platform. The hardware is sold for essentially a loss and it doesn’t matter as the profits come from the sales of the software. For the tablet, this may hold true as well. Proving that Win8 is a viable tablet operating system that can compete on an even footing with Apple’s is insurance in Microsoft’s viability for the future. Owning the tablet space with Win8 ensures Microsoft’s dominance in the OS world, and especially in enterprise, as a win for Win8 is a win for continuance of all of the other platforms MS has like Office, Outlook and so on. So watch out for the future, Microsoft is on the move and they may know exactly what they’re doing!

Logos Should Be Designed with Meaning and Why JCPenney Should Go Back to Its Roots

It’s always amazing to me that there are certain companies who change brand marks faster than governors get voted out of office. I have absolutely no idea why this happens. A perfect case in point is JCPenney.

While writing another post about pricing, I inadvertantly stumbled across the new logo for the store. I wasn’t aware there was a new logo. There is and this is the new logo:

The really sad part about all of this is that as soon as you go to another website you’ll forget this logo and when someone says JCPenney, you’ll remember this logo:

The reason for this effect is that there is so much brand cache in the old logo that it overshadows the new one. In this regard, the company’s best interest is then to keep the old logo, especially in the light of new strategy that aims to take the store back to the times when the old logo meant something.

Considering the design of the new logo on it’s own, two things jump out at me. The first is it’s amazing ability to inspire absolutely no subconcious corporate allegory. The old logo on it’s own has no story but it had a lifetime to make it up. What does a little blue box packed into a big red box mean, really?

When they teach you how to design logos, the first thing they say is that the logo has to mean something. The meaning could be easy to see or just instill a vague emotion. The smallest things can do a lot. To do this, the designer thinks about a lot of things, like how the company would like to be positioned, what the company is known for, what it ultimately would like to stand for as well as a number of environmental and competitive factors.

Ideally, the designer takes these thoughts and works within the constraints of the competitve market to create a mark that unequivically represents the company and brand. The next step is to create a series of rules and procedures to make sure the brand is operated in the proper manner without compromizing it’s goals.

The branding is then installed and the merits of not adding to or diluting the work is given. Generally, this is done to explain that a brand’s worth is enhansed by it’s longevity of continuance. The longer the mark is in place and unharmed, the greater the value becomes, all other things remaining equal – just like the old JCPenney logo.

The other thing that strikes me is the one thing the logo does make me think of: a big box store from the `80s. I don’t know what benefits that gets JCPenney, aside from getting people excited we might find a Chess King next door.

The interesting thing is while corporate branding seems to have bought into the logo, at the store level, they plainly have not. I am not sure if it’s a workers revolt or just a glacieral and amazingly terrible ‘soft roll-out’ – which could be the subject of another blog post, all by itself. This gives me hope that the new governance may come to their senses, ditch the new logo (and hire me as a brand consultant, as well:) and get back to the one that makes us remember why we like to go to JCPenney .

What Will JCPenney’s New Sales Strategy Mean for Its Branding?


The new pricing scheme unveiled recently is brave in a number of ways. Most importantly, it seems to draw a line in the sand against department stores’ downward race towards becoming discount stores. Stopping the roller coaster of sale pricing and the continuous need for price slashing could have some interesting effects for stores of their sort.

For the past 3 decades or so department stores have let the features that separate them from big box stores atrophy. The biggest difference was in the quality of attention and service a shopper would experience. This was cut in an attempt to control costs and compete with discount stores. The next thing cut was the quality of products, further blurring the line between department and discount stores. What was the difference between JCPenney and Wal*mart if the service was similar? Then, if there was no difference between products, what would justify the increased price?

In these occasions the brand is important. It has to stand for something different and for the longest time, department stores in general – and Penneys is no exception – have lost their way. The first step back is to begin to delineate itself from discount stores by holding price.

JCPenney halting a discount sale scenario is an excellent start in holding back further losses in its brand’s perception and its bottom line. The normalization of pricing is effective in moving the chain away from a discount perception and the vicious cycle of sales. More importantly, it begins to allude to the notion higher quality goods, not to mention a boost to its brand’s esteem. Penneys needs to create a difference between it and stores like Shopko and Target if it is to continue living. By not playing their pricing game is a great start.

The lack of crazy pricing will have to be filled up with some other reason to bring shoppers to the store. The more staid manner of actual close-outs and monthly featured items probably won’t provide it much. The next step would be to bring service back – the true differentiation between department stores and big box stores, as mentioned by the new head of JCPenney.

The concept for the average shopper of what ‘better service’ really is may be quite alien now. Obviously, there’s the Nordstroms level but what would be expected from Penneys in this regard? I don’t think you’d really need to go far. Putting more sales people on the floor might be the best start. Managing customer service quality would be an easier task when stores aren’t running skeleton crews. Thinking that the person in charge now has come from Apple, could also more employee empowerment be in the cards? There’s a lot of possibilities there.

The really interesting thing is that these changes are not going to make an immediate positive change to the financials. Dropping the sales is going to hurt in the short term. There might be an up-tick for a while with the novelty of the new pricing scheme for perhaps a quarter but after that, the changes are going to be much more incremental. Increases in quality of experience are not the easiest things to quantify and may take a while for gains to be attributed to it. In a world run by quarterly results, this all might just come down to results versus how patient the Board is.

If they do hold to their plans, these changes will eventually allow for Penneys to move to higher price points, both on better quality products and the perception of value stemming from a far better shopping experience. If done well, they’ll make some nice brand differentiation too. The real question might be if JCPenneys has the stomach to take the slog back into the segment where department stores used to occupy. My hope is that this doesn’t lead to another terrible JCPenney logo.

Subtle Branding Work in the Updated Hersheys Packaging

Packaging gets refreshed all the time. Initially, I thought this was just an update but I think there’s a few interesting points that are happening with the change.

Firstly, Hershey’s is putting greater emphasis on the sugar-free nature of the product, so that it’s easily discerned, especially when placed next to a non-sugar free item like these Dots. (I couldn’t find a more closely related package than the Dots. It seems this size and quantity belongs only to sugar free chocolates, so this will have to do for comparison…and yes, I ate them both!) The vertical “swoop bump” has given way to a large white band across the center of the front panel. The change makes completely clear there is a distinction between these and the standard offerings. It also stands out at shelf, doing a far better job of calling out Hershey’s offerings in this area.

The postulations I glean from these changes are that Hershey’s may have had issues with customers having difficulty finding the product or perhaps they confused the sugar-free product with normal offerings. The other possibility maybe that Hershey’s is making a bolder bid to own the sugar-free chocolate space. A louder package would go far in that regard. Seeing as the shelf-space set aside for such treats has increased drastically in the last few years, I can see the draw to advertise this feature.

For branding folks, the second interesting change is the ownership of the brown field on the packaging. Both the Dots and the new sugar free packaging have gone with a straight Hershey’s brown. The packaging my seem less ‘fun’ but it also comes off as more bold. The change to the simplified Hershey’s brown background also serves to increase ownership of that color in the merchandising space and condenses the brand message.

Not only that, but the border around the Hershey’s logo has been removed, essentially making the entire package the logo’s brown field. Breaking the logo out of the border tends to break the “badge-ing” effect. Instead of saying it is a product BY Hersheys, it IS a product of Hersheys. Sure that sounds a bit like a game of semantics, but the ownership is more clear with the border-less logo.

The great thing is all of these changes bring the new packaging more inline with the classic chocolate bar look.

There are always gyrations between packaging being simplified and overly styled to be eye catching. This new packaging look by Hershey’s is definitely the former, but a congruent brand look is always preferable, especially when you’d like to exclaim that the new product offerings are the same quality as the old standards. Since I have tasted both, I can say that there might just be truth to packaging.

What is a ‘brand’?

I saw this question posted on a discussion group. I was going to reply but I realized it’s a more thoughtful definition than could be written in a follow up, so I’m going to write it here. 

What is a brand? A brand is the perception of a company that lies in the minds of consumers. That’s pretty philosophical, huh? It’s true. A brand isn’t a logo or a catch phrase or a value statement. This is precisely why changing merely a company’s logo does nothing to change the perception of the brand.

A brand is what consumers think of when they think of a company – how good their products are, how easy it is to deal with the company, how owning their product makes them feel and so on. All of these feelings and experiences make up a company’s brand.

Truly great brands make sure that they hone every aspect of the customer experience to make sure it fits with what the company wants to be. IBM does a phenominal job of overseeing the entire customer experience, which is why ‘no one ever gets fired for choosing IBM’.

The brand is bigger than the logo. The logo is just shorthand for what the company stands for. It’s a little signal that says the product or service that bears the logo ascribes to everything we percieve the company as a whole is about. We know that everything that has the Apple ‘apple’ on it will have the same high standards and warranty as the rest of the line. This is why companies protect their logo.

When a company looses that logo stewardship it runs the risk of destroying the promise its brand offers. We all know of companies who license brands promiscuously. We trust those brands far less. Customers are smart and can smell carelessness and that’s when a brand can work against itself. Just as  you can extend a company’s brand promise to other products, a stretched brand, operated by a careless licensee, can send terrible tremors back to the brand.

Because a brand is not a logo or a saying, changing them will not change perceptions of the company as the experience of the company is still the same. If calling customer service is more infuriating than actually using the broken product, no softer typeface on a company’s website is going to change how a disgruntled customer is going to explain their experiences to prospective buyers.

It is important, when thinking of your brand, that you think of that brand as every way that the customer interacts with the company. This extends from the easy things like what happens when a customer uses your product or when it contacts the company and it matters in the indirect things like what the company aligns itself to and how the company carries itself in the world. All these things are taken into account by the customer when they consider supporting your brand (and your company).

If a company acts concerted in its mission as it exerts itself then its reward is a strong brand. A strong brand yields a solid and rewarding following of customers.

Think of a brand as the idea of law enforcement. The logo is a policeman’s badge. The badge does not make the lawman trustworthy or uphold the law. The words and deeds of that lawman does. If the lawman is corrupt, the shape or color of the badge will not fix the corruption to those who know – and soon enough, everyone will.

A company’s brand is a company’s ‘badge’. The company’s actions forge the meanings of the badge – not the other way around.

Branding for Shopping Bots, Apps and Tastemakers

In the world of today, humans are the prime benefactor and target for branding work. We see it with our eyes and we process our experiences and desires to make judgments whether products and services are for us or not. We also can divine through good branding campaigns the extensions of products or services we will enjoy or recognize the ones we will not.

We all have a personal brand that we use to keep track of the things we like, the things we didn’t and what we’d like others to think of us. From this, we determine if products align with our brand. If they do, we buy. If not, we pass it by.

As the world moves into the future, we can extrapolate how much more dependent we will be on technology. Already we have begun to trust our mobile devices more than we trust our own senses or knowledge. Maps and way-finding are a perfect examples. A few decades ago we relied on physical maps, sign-age and perhaps even a little intuition to find our way. Today, we have GPS and apps that just tell us the steps that we’d have to take. We blindly trust that Magellan knows the way.

What about knowing what we like? Would our technology then do the deciding of likes for us? Perhaps there’d be some sort of algorithm that would take into account similarly branded items and deliver our tastes to us?

Technology could easily understand our habits and predict our tastes, then deliver suggestions, creating blinders to everything else as we travel down our own long tails of personal taste. Google already does this for us, to a degree. They list our browsing habits and forecast similar sites. Why not do the same in physical stores? Couple this with a more finely tuned location aware application and the inside of a store becomes as specialized as a Nordstrom’s visit.

Now that things are far more helpful, what would this do to branding? It would essentially make the mobile device the brand consumer. The device would be in charge of continuing the loyalty to a brand, as long as the actual consumer does not specifically say not to. Brand loyalty may actually become like opt-out email campaigns, we continue to support them just because we’re too lazy to shut it off.

Devices will find the selected objects in stores by some sort of location awareness or NFC technology. This will save us time, primarily from the waste of browsing or deciding as we will trust our devices to understand our personal brand and the brand loyalties we enjoy.

Packaging will still serve to close the final decision. Instead of selling the product, it will serve to support the buying decision merely as a re-check against the branding algorithm. Advertising could have an immediate effect. Ads with QR codes could be instantly scanned (if liked) and added directly to the shopping list, and the buyer’s personal brand likes are updated.

Branding would become more of an algorithm than a face of a product or service – it will still be there on the packaging and in ads, but the brand’s most important component will be how it is found and interacted with in the mountains of cloud data that connects preferences with shoppers. A shopper’s buying habits will be analyzed along with countless other shoppers to form a kind of ‘like’-chain, making it easier to suggest products in other categories. Using their devices, the shopper will rate the product afterward and their preferences of brand and product will change slightly and the cloud would be updated.

As the world becomes more and more hectic, our reliance on our devices to make the more mundane decisions for us will only increase. These decisions will extend into shopping and having a program that recognizes what we like, keeps up with our (subtitle) changing tastes and recommends items will become invaluable. These apps will guide us through shopping experiences with precision and ease, cutting down on the time it takes to buy our needs. For that, we will be grateful, even though decisions on brand loyalty will be made by a small device and a large, distant server rather than by our own tastes.

What Will Happen to the Droid Brand Now That Google Bought Motorola Mobility?

Curiously, I was talking with a friend of mine about Motorola’s plans this past weekend and we had gotten on to a discussion about the equity in the Droid brand. Our conversation revolved mostly on how Motorola’s then plan to introduce another operating system and the destruction of the Droid brand it would bring. Obviously, things changed on Monday.

Google’s purchase could mean a number of things for the Droid brand. The interesting aspect is that this will essentially be Google’s first real consumer brand that lives outside of the Internet. Brands that extend to the tangible world – and especially the product world – are different beasts than purely digital ones. The care and feeding of a brand like this is much more than what Google has experienced in the past.

The Nexus line was probably their best foray into actual products and it could hardly be called a success. Otherwise, you have the current push for the Chrome laptops, which I am sure that many who are reading this probably haven’t even heard of. Even the Android operating system, which is poised to be ‘the’ mobile device platform in the coming years has anemic advertising behind it, smacking of Business-to-Business bland-our.

Should Google notice, they may have lucked into a solution that could make their own branded phone a success. With Droid, they have essentially a turn-key branding solution for their mobile products, as well as the channels necessary to make it easy to get things in front of clients. More importantly, they have the cache to convince shoppers to buy.

Motorola put a lot effort into creating the brand, which is possibly the strongest Android brand on the market, even though it seems that Motorola has backed away from the push, cutting down on the more pervasive, high-value advertising campaigns. With a little effort, Google could breathe some life back into the Droid brand and perhaps own the market once again, just as Motorola had done initially.

The question is will Google understand what needs to be done to maintain and grow the brand? There has been a lot of talk about Google’s purchase being merely for the mountain of patents that Motorola had relating to mobile devices and not so much about the actual product lines. Perhaps Google just doesn’t know what they have. It is not without precedent that large companies lack the understanding of everything they receive when they buy other companies. It happens all the time.

The other issue that’s brought up in this Businessweek article is that Google may just have to scuttle the brand to head off an exodus from the Android OS and scatter us to a number of proprietary mobile OSs. Should that exodus happen, WebOS and Windows phones may become the heirs to Androids other-than-iOS crown.

What would be the best way to operate this purchase? I would think that allowing Motorola Mobility to operate as a somewhat independent subsidiary would yield the best results. Google would get its patent protection for Android. Google would also get a premium supplier of handsets to make sure their Android vision is properly executed. In order to do this right, Mr. Page would have to keep Google’s branding off of Motorola – a hard thing to do with mergers. When people buy things, they can’t help changing those things.

For the Droid brand, it would be massive mistake to push forward a co-branding scenario that’s all too common in these situations, like ‘Droid by Google’ or ‘Google Droid’ Ruining strong brands is easy when you dilute them with the misplaced necessity of staking claim.

Personally, I am a big fan of Motorola and their mobile products. The Droid campaign was genius and perfectly executed against everything iPhone. I am also a fan of Google and the products they put forth, although I am unsure that this plan will work out on in the most fruitful manner.

Sears & the Perilous Nature of Selling Private Label Brands into Other Stores

So we all know how Sears/Kmart is just not making it happen. It seems to be a beast that’s trying to get it’s groove back while coasting on its massive inertia. It also doesn’t help that the owner looks at the business as giant real estate investment.

The lastest plan Sears has is to create profitability by selling its amazingly successful private label brands in other stores – instead of using them to create a basis for driving sales into their own stores. In some ways I imagine that this could work out, but there are a lot of reason why this would be folly, at best.

One of the first things to think about is that this will be the first time Craftsman (or Kenmore or Diehard) will have to compete against other brands.

You could say that they’ve always have, but if you take it store by store, Craftsman has never had to compete at the shelf level. There has never been another brand that’s hung right next to a Craftsman product where a customer would hold both and decide between them. You came to Sears to buy a Craftsman tool. The world is different when people go to a brand neutral store like Ace where Stanley and even Ace have their brands.

Hmmm, I don't see any Craftsman packaging there, do you?

Why does this matter? While Craftsman has a strong brand (and that may be enough for a while), they will now have to compete on features and perception in direct comparison with other brands. If they fail at this, then all they’ll have left is to compete on price – a dangerous place for any company to be.

Sears will now have to work to make their packaging and marketing amazingly more effective. If you’ve ever compared Craftsman’s packaging to say, Stanley, you can see that the design work has gotten soft due to the lack of in-store competiton. This re-treatment will be costly. Hopefully, they’ll decide against creating two lines of packaging for Sears and then for others.

I think the real question is what does Sears get out of this? It’s one thing to plow Craftsman into Kmart, a wholly owned subsidiary. It’s quite another to spread your private brand equity around to any other store that wants to carry it. Sears stands to gain a lot more product sales, sure, but at what cost?

Allowing other stores to carry your flagship products destroys any reason for consumers to visit Sears stores. If I can get Craftsman tools at Ace, why should I drive to Sears to buy them, right? What’s the problem? Sears still gets a sale, right? They do certainly, but what they lose is shoppers in their store…shopping for other things and impulse buying, No longer do you have someone coasting through clothing to get to tools. There’s a reason why you can get into the mall through Sears and Sears seems to have forgotten it.

My thinking is Sears essentially looses its anchor brand draw to its stores, losing Sears store traffic and now has the added burden of converting a non-competing store brand into a national name brand. What happens to Sears, now?

Throwback Packaging and Logos as Brands

There seems to be a lot of throw-back packaging making the rounds out there, from Pepsi to Tide, a lot of companies are getting into it. While it’s pretty fun to see and brings back some childhood nostalgia, this little fad illustrates a nice point: Your logo is really not your brand.

See, your brand is much bigger than an icon or a set of colors on a box. It encompasses far more than that. Your brand is the collections of feelings and perceptions you’d like people to see in your company or product. It is also the feelings and perceptions people actually feel about your brand. That’s a lot of stuff, but what it isn’t is a trade dress or an icon or anything else. This is why Doritos can dress their products in throwbacks, tossing aside mastheads and current brand marks while getting more interest without loosing anything, while crappy companies keep ‘re-branding’ themselves with new identity, hoping for more customers to no effect, as people notice that they haven’t changed their business practices.

To be a bit more specific, people know that Doritos makes really tasty chips and always have. They know that it doesn’t matter what the bag looks like as long as it says Doritos and they can make out that the triangular chips. The quality, taste and consistency of the product is Doritos’s brand. The logo doesn’t make it good, the company behind it and their actions does. The logo and trade dress are only a reminder and a method to drive interest, as well as to serve the distinction between Doritos and competitors.

Don’t get me wrong, trade dress and logos are important, but their only important when your company is consistently upholding it’s brand promise in all aspects. Otherwise, your brand mark is a lighthouse that signals, “stay away, rocky shores ahead!”