Archive for April, 2010

Verizon’s Incredible Map

April 29, 2010

Finding points of difference is a huge challenge.

One of the core marketing theories is that brands need to be different. If you are in a competitive market, there are really only two ways to complete: be cheap or be different. Being cheap is certainly an option, but it is a very tough road. For most brands the core challenge is creating differentiation.

The problem is that in many categories the offerings are quite similar. The features are roughly comparable and the benefits all have a similar ring.

This is why Verizon’s map is so powerful. The marketing team at Verizon identified a clear point of difference versus key competitor AT&T, a point of difference that is each to understand and show. Why use Verizon? Because Verizon has a better network with more coverage.

For Verizon, this is a compelling message. Verizon can’t compete on devices at the moment, since AT&T has the iPhone. Verizon shouldn’t compete on price. Network quality is an important and clear point of difference, and the map visual shows this very clearly.

I suspect Verizon will keep running the map campaign for a very long time. It is hard to find a point of difference. Once you have one it makes sense to stick with it.

Goldman’s Falling Brand

April 22, 2010

Goldman Sachs is an incredibly special brand. Goldman is a clear industry leader, with a respected, admired and feared brand. People from Goldman are smart, tough and refined. If someone from Goldman gives you a ring, well, you will probably take the call.

But this is all changing. Goldman seems to be emerging as one of world’s most visible evil financial institutions. News this week that the Securities and Exchange Commission is charging Goldman Sachs with fraud hit home because it comes on top of simmering resentment. How has Goldman been making billions and billions when the U.S. government is going massively into debt, the U.S. worker struggles to avoid foreclosure and many financial firms topple? With the SEC’s complaint getting lots of press I’m sure many people will conclude the answer is now pretty obvious.

Goldman CEO Lloyd Blankfein’s efforts to defend Goldman this week do not seem to be helping. According to today’s Financial Times Blankfein is going on the offensive, defending the deal in question and claiming that the SEC’s move “hurts America.”

This is not the way to save the Goldman brand. Indeed, as soon as you start believing that your brand is so important that attacking it is bad for the country, you have lost touch with reality.

Instead, Blankfein should state that he is committed to discovering the truth. He should emphasize the fact that ethics are a top priority for Goldman, and if there was fraud, he wants to find it and address the problems. And he should do everything possible to reassure people that Goldman is an honest and respectable firm. Right now many people don’t believe this, and Goldman’s brand equity is falling fast.

The Big iPad Question: What is it?

April 15, 2010

One of the core parts of any positioning is the frame of reference. 

Before you can tell someone about the benefits of a particular product you first have to tell them what the product is.  This is a type of, well, what?  It is hard to discuss the unique benefits of chocolate ripple ice cream, for example, before you establish the fact that we are talking about ice cream.

So what is the frame of reference for the iPad?

This is a rather difficult question.

Is the iPad a type of computer?  It seems a bit like that, since there is a key board and it is about the size of a computer.  But it isn’t a very good computer.

Is the iPad a type of smart phone, like the iPhone?  It seems a bit like that, too, since it runs apps and is portable.  But it doesn’t make calls.

Is the iPad a type of ebook, like the Kindle?  This seems quite good, but then I’m not sure what is particularly good about the iPad versus the Kindle.

Is the iPad a type of television?  I guess it could be this, too, since there is a nice big color screen suitable for watching things.

The new ads for iPad seem to position it as an ebook, since they show people reading books on a couch.  But this doesn’t seem like a compelling proposition.

Sorting out this frame of reference question will determine much of what happens to the iPad long-term.  The frame certainly isn’t clear to me right now, but the folks at Apple are pretty savvy marketers so I’m confident they will clue us all in as the time goes by.

Any thoughts on this?  What is the iPad, anyway?

Spirit’s Bold Move

April 9, 2010

Spirit Airlines generated quite a bit of commotion this week by announcing that it would soon start charging passengers for carry-on luggage.

Every piece of carry-on luggage stored overhead will now cost $45 each way. The price drops to $30 if purchased in advance.

This is a controversial move but a smart one. Spirit is cheap. You don’t fly Spirit for the meals (there aren’t any), the frequent service (it isn’t) or high-minded branding (it is just cheap). You pay for coffee on Spirit. And water. But I checked Orbitz, and it costs $220 to fly from round trip from Chicago to Ft. Lauderdale on Spirit. This is a lot less than the price on American, $328.

Charging for carry-on bags will let Spirit keep fares below almost every other carrier. A $45 fee is huge when tickets are running $200 or $300.

This move will force United, American and the other full service airlines to think about charging, too. I suspect they won’t follow, at least not yet. But the full service airlines will have to start delivering on the promise of full service to hold share against aggressive, low-price upstarts like Spirit.

I suspect we’ll see more of these moves from Spirit and other low-cost airlines. Why not charge to use the bathroom? Why not charge extra for a window seat? Standing room only isn’t a completely outrageous idea, either. That would get a bit old on a 13 hour flight to Hong Kong, but on a 30 minute hop from Chicago to Detroit, well, why not?

Differentiating Vanilla

April 2, 2010

Selling mainstream spices and seasonings has to be an enormous challenge.  There are a number of strong brands in the market and there is always a risk that people will assume all the brands provide similar quality, and buy on price.  In a tough economy I suspect that many people are very willing to let price drive the brand decision in the spice aisle.

This is why I think the latest marketing effort from Spice Islands is so compelling.

Spice Islands is promoting its vanilla by noting that “Some vanillas add corn syrup to sweeten inferior beans.”  The ad then reassures the reader that Spice Islands doesn’t do any such thing, “Flavor so rich and smooth there’s no need to add the sugary stuff.”

This is smart marketing.  Spice Islands is teaching people that all vanillas are not the same, and that it makes sense to pay a bit more to get a high quality vanilla that doesn’t require corn syrup.

It is a compelling pitch and a great use of attribute based differentiation.  This isn’t fancy marketing, but it is clear and effective.


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