Dear Thread,
I still have a vivid recollection of the moment I spoke out at the Shareholder's Meeting last May and inquired about marketing strategies for the upcoming year. Dr. Harari was visibly angered by the question. I mean, here we are coming off a very depressing year in 1998 and this guy in Hush Puppies stands up and asks Uncle Eli to open up the SanDisk checkbook and write out a few multimillion dollar checks to some advertising agency. Today I can see how correct Dr. Harari was in taking the posture he did at the time. Face it, we are in a period of overwhelming interest in SanDisk products and are unable to meet demand. We have excellent retail channel representation. The stock market recognizes SanDisk as a leader in the flash memory arena. We are getting plenty of attention. Who could ask for more?
I have tried to spend some time considering the promotion of the SanDisk brand. One comment that stuck in my mind after reading a few articles on branding was the observation that the size of an advertising campaign seems to follow a relationship indirectly proportional to the attractiveness of the product. The money that Sony is bleeding out to support a duplicative standard is mind boggling. Consider Iomega who placed prominent ads this holiday season to promote a recycled product that went nowhere. Meanwhile SanDisk seems to be on autopilot and is moving forward with great inertia.
The topic I wish to discuss today is as follows...
ESTABLISHING CONSUMER PREFERENCE: How can one pursue branding without getting burned?
I. Introduction: What is branding anyway?
This Christmas Season two Internet startups, Etoys and Toysmart.com spent $20 million each trying to capture market share for their websites. This is not an inexpensive proposition by any means. In fact, it is estimated that the current cost of establishing a national brand is in the range of $100 million dollars. And contrary to what many people believe, successful branding is not accomplished overnight, rather it is an insidious process which begins with the inception of a company. Branding reflects the perception of the company by the prospective the consumer. According to Bill Davidow, a partner at the VC firm Mohr Davidow Ventures, branding is a complex notion:
A brand has to do with having a deep psychological affinity to a product or service. It's something I want to be involved with or own because it's meaningful to me.
George Zachary, Mr. Davidow's partner and a prior executive with the consumer products division at Silicon Graphics adds:
(Those)...companies that pull off great branding understand what people want to experience, and that's when you get this deep psychological penetration.
This psychological affinity or psychological presentation is not equivalent to a TV advertising blitz during prime time. It is not the wreckless carpet bombing of the consumer that we are now witnessing. Similarly, advertising and other marketing efforts are methodologies which may be employed when attempting to create a brand. The brand itself is actually composed of a multitude of key components including such things as the strategy of the product offered, the persona of the CEO, the attitude and integrity of the employees recruited by the firm, the friendliness of the customer service department, and the effect of every action made by the company that is visible to the public. Branding therefore represents a sum total of many smaller individual forces within the company. As Mr. Zachary explains, branding can be conceptualized as follows:
Brand is almost like a radio frequency that's guided into people's minds: marketing is like the volume. If you're slightly off on a radio frequency, you may still hear a little of it. You can turn up the volume to hear it more clearly, but you'll still just pick up scatterings of the message. The right thing to do is figure of the correct frequency and to bring people onto the same wavelength as the company. Just adding more marketing is like turning up the volume on the wrong frequency.
If your signal is properly tuned, the message can be impregnated deeply within the psyche of the consumer. The affinity to a given brand creates brand loyalty and gives the consumer the sense that they are missing out should they buy a competitor's product. It is the heart of the "Intel Inside" campaign that popularized the Intel processor. In fact, branding can be so persuasive that it may attract even those with no interest at all in a given product or service. For example, despite how any one of us feels about smoking, the concept of the Marlboro man created a sense of adventure, independence and freedom of the American cowboy living in the Wild West. The branding campaign was finely tuned to the wavelength of the target population and lead to great success.
II. Logos, Slogans, Mottos and Other Visible Components of a Brand Name
The term "brand" may refer to the age-old custom of branding cattle to signify ownership. Nowhere is the use of simple visual cues more prevalent that in the realm of the PC and the Internet. Apple Computing's adoption of simple icons as abstractions of relatively mundane actions of the PC revolutionized the computing industry. This action spoke clearly to the consumer who was reluctant to consider personal computing due to the fear of needing to memorize arcane DOS commands or other alien tasks. We are exposed to graphic representations continually in our everyday lives. Icons and other logos are basic and intuitive which, despite their simplicity, may represent rich and complex notions in the mind of the observer. Take for example the hood ornament on a Mercedes Benz. It is a status symbol which represents the ultimate in German automotive engineering. It represents the pinnacle of success and accomplishment for those who can afford to buy one. But if you add a single vertical line downward from the center of the emblem you get a peace sign. The visceral response to these polar opposites is quite different depending on the prejudices of the observer.
Icons and corporate logos invoke an emotional reaction from the consumer. To use another example from the automotive industry just visualize the emblem from your first VW Beetle. The VW logo symbolized economy and affordability. And as the company evolved and began to offer a more upscale fleet of vehicles, the notion of "FahrvergnÂgen" with its new logo, a stick figure behind the wheel of a car, became a centerpiece of the marketing campaign that was tuned into the frequency of the young, urban professional. The fact that the company chose an incomprehensible tongue-twister in a foreign language to promote its vehicles is even more astounding. The results, however, are difficult to deny.
Logos and slogans, either alone or in combination, have been a vehicle whereby a company can distill the key elements of the company into an easily understood and interpreted concept. With the passage of time marketing agencies have tended to opt for small, bite-sized slogans for their accounts. Does anybody remember these advertising gems and jingles?
Candy-coated popcorn, peanuts and a prize, that's what you get in Cracker Jack!
Twoallbeefpattiesspecialsaucelettucecheesepicklesonionsonasesameseedbun
Nowadays they just get right to the point. In the words of Michael Jordan...
Just Do It!
It seems as if the attention span of the average American consumer can now be measured in milliseconds. It is a rather distressing fact. Marketing firms try to achieve high rates of recall or "stickiness" in their campaigns. They may or may not be able to achieve this by adopting a "poke-in-the-eye" strategy that is common with promotions for the "dot coms". This has been so overdone now that all one really remembers is blah, blah, blah...dot com. The reason for this has to do with the concept of emotional attachment. The psychologic affinity to a product cannot be achieved with momentary blasts of exposure. The concept of a brand name cannot be created one day and then be simply shellacked over the entirety of an organization. It takes much more time and effort to allow the message to seep through the thickened cranium of today's consumer before being granted a seat within the inner sanctum of the mind.
The Nike "Swoosh" was created by Carolyn Davidson, a young art student who sold the logo to Nike for $35 bucks and a pair of Air Jordans. This logo, combined with the catch phrase above summarized the message that the corporation wished to promote. The beauty is in the simplicity.
III. Cisco, Crisco, Nabisco, Tabasco What's in a name?
The choice of a name for a company may be very important. It is another icon that summarizes the persona of the company. But often times the name that is selected at the time a company is founded does not resemble the business the company may represent after a process of evolution from successes and failures. Generic names or acronyms are great. IBM and AOL will likely stand for eternity. And until computer software is no longer necessary, Microsoft probably has nothing to worry about. A name may be chosen strategically to acommodate growth. Amazon.com has nothing to do with books. However the name is sticky and will allow for growth into other areas of e-commerce without requiring a name change. Virgin is another example. It may represent a record label to some, but the company name is used in a variety of related businesses that developed as outcroppings of the original business plan.
Company names or, for that matter, product names may be created to elicit a desired response from the consumer. Thus, a name may be constructed with specific intentions when a company is starting out or a novel product line is released. Established companies, however, frequently get locked into a name which may have no relation at all to the founding fathers or the company business. George Eastman selected Kodak as a name for his company because he had a penchant for the letter "k" and for no other particular reason. As the company's successes piled up the reputation of the products became synonymous with the term Kodak. And the personality of the company and the consumer's perception of their products developed only after many years of seeping and steeping. Kodak and its bold, gold packaging became synonymous with the highest quality of film.
Names yield other benefits. I suspect there are many who still presume Nokia is a Japanese company. I mean, who would buy a cellular phone from a company based in Finland? A company name may be liberating onomatopoeia. A "yahoo" is an uncultivated or boorish person, but the verb toYahoo! describes the feeling you get when you are driving unencumbered through the Internet at 256 kbs. Hey, would ya like to come Yahooooooo! with me or would do ya wanna just stay home and Lycos?
IV. Achieving Brand Recognition and Brand Preference
Establishing a brand is a complicated matter. The qualities associated with a given brand name develop through the chemistry of the organization, the strategic positioning of its products and creation of a psychological affinity within the customer base.
I want to discuss specific details of a branding campaign as they may relate to SanDisk in a later post.
Ausdauer |
