David Aaker is the Vice-Chairman of Prophet, the author of Brand Relevance: Making Competitors Irrelevant and a regular blogger on branding at DavidAaker.com. In other words, he’s a branding maven. Here he explains how to use branding as a weapon against your competition.
Q: Is the right goal to make one's brand relevant or to make one's competitor's brand irrelevant?
A: Both. The goal should be to drive market dynamics by making your brand relevant and competitors irrelevant. Engage in innovation that is substantial enough, or transformational enough, to create a new category or subcategory defined by one or more offering enhancements that some customers will consider “must-haves.” These “must-haves” could involve self-expressive, social or emotional benefits as well as functional benefits.
The task then is to attract customers to the new category or subcategory and create barriers to competitors. Think of Apple’s iPod, Chrysler’s minivan, Mr. Clean Magic Eraser, Westin’s Heavenly Bed and others that changed what people bought with “must-haves” and created years and sometimes decades with no real competitor.
In nearly all categories from beverages to cars to computers to financial services, the only way that a firm can gain a meaningful sales change is through this type of innovation. Expenditures on marketing and product refinements to win the “my brand is better than your brand” battle rarely changes the marketplace because of the momentum of habitual behavior.
Q: What causes brands to lose relevancy?
A: There are three risks. First, a brand can remain strong but customers start buying another category or subcategory. It does not matter how much a customer loves your minivan brand or how strong it is, if they are now buying hybrid sedans. The challenge is to make the brand relevant to the emerging new subcategory or defeat the subcategory—convince people that the minivan is a better choice than a hybrid sedan.
Second, a brand can lose energy and visibility to the point that it is not considered and, thus, not relevant. The task is to either energize the business like Apple and Nintendo have done or to find something with energy like the Avon Walk for Breast Cancer and attach it to the brand.
Third, a brand can create a negative, a reason not to buy the brand. It could be based on a perceived lack of social conscious or a quality problem that undercuts credibility. Avoiding a negative is not always an exciting initiative, but it can have strategic implications.
Q: What should a company do if its brand is being attacked?
A: If a brand is attacked with an innovation that has a “must-have” characteristic, there are several responses. The brand can gain parity (become close enough so that the reason to exclude is removed) like McDonalds did with McCafe when faced with the loss of customers to Starbucks at critical breakfast and snack times. The brand can leapfrog as Cisco does by buying firms and adding the Cisco synergy. Or the brand can fight the new category as the hamburger chain In & Out did by simply excelling at providing indulgent products in the face of a healthy-eating trend.
Q: How does an under-funded, under-staffed newcomer establish brand relevancy?
A: The best way is to have an offering that is so new and compelling and different that it attracts a buzz in all kinds of forms and ignites a surge of buying interest. That iPad2 phenomenon does not happen often, of course, so ways need to be found to develop visibility. A small newcomer can take a chance on guerilla marketing or viral communication, risks that a big brand could never take. SalesForce.com is a good role model. The company promoted its new “cloud computing” category by picketing a conference of their large established rival and even had fake news cameras there for interviews.
Q: Should companies focus on the "A-listers" or the "rest of us" to establish a brand?
A: The core of potential loyalists has always been the basis of building a brand because they are likely to be worthwhile buyers but, more importantly, are likely to provide credibility and visibility to the brand. In the social media world, the power of the A-listers has grown because they can actively communicate with credibility and social media leverage.
Q: Is it possible to learn how to make a brand relevant by asking customers?
A: One challenge to the development of new categories or subcategories is to find and evaluate the right idea in the first place. Asking the customer is one approach but often will not result in insights. As Henry Ford observed, if you ask a customer how transportation can be improved, they would ask for a faster horse.
It can be more productive to be a customer (Zappos.com was inspired by shoe selection being so limited), live with customers (Marriott observed business travelers in hotel lobbies), partner with customers (P&G linked with Walmart to improve logistics) or to look to non-customers (why are people using motorized bikes instead of cars?).
Q: How would you fix the Microsoft brand?
A: Microsoft is a polarized brand. For some segments and markets like Japan, it is known as an indispensable aide that empowers. However, its negatives tend to be high because others believe that it exerts excessive power and is arrogant. Actually, the Bill Gates Foundation, in my view, has softened that attitude just as the sustainability program of Walmart has made it harder to hate Walmart. I would be aware of the negatives and the perceived arrogance problem and try to develop responsive relationship programs.
Microsoft also has an innovation problem in that the huge Office and Windows businesses swamp any innovation. An embryonic offering just looks insignificant. So I would attempt to find ways to encourage and nurture substantial and transformational innovation that will create and own new categories and subcategories.
Q: How would you attack Apple?
A: Apple has a remarkable record of creating new categories, with at least five in the last decade. They have built up barriers in the form of a system of apps, the Apple stores, great timing, cool design, incredible marketing, Jobs and the Apple brand. It is a tough assignment. But their huge business footprint leaves openings.
I would look for niches. Approach the market from below. Are there users that do not need all the Apple features and would prefer a simpler, less costly version? Position with respect to a feature or an application. Are there features that could be added or refined that could become a “must-have” for a segment? Start there and build. Exploit channels. Are there strong retail channels that have been left behind by the Apple store? Can we partner with them in product design and marketing to take on Apple together?