At last week’s MINDBODY University, I had the opportunity to teach business leaders how to increase their competitive advantage. Although the seminar was attended by business owners in the health, fitness, and wellness industries, the principles we covered are instructive to most all businesspeople and so I thought I’d share them here.

The core of the session focused on competitive brand positioning – what is it, why is it important, how do you develop one.

What is a competitive brand positioning?

It’s a strategy that defines how your business will establish and maintain competitive advantage.  It’s one half of your brand platform – the other is your brand identity, or what your brand stands for. Your competitive brand positioning references who you are selling to, what your business scope is, and what you do to create value for your customers. It drives your business strategy and operating plan.

Why is competitive brand positioning important?

I can’t think of any business that doesn’t compete with something (another company, a changing market, emerging technology, etc.) And in order to effectively compete, you must understand what you’re competing against for whom, and how best to position your brand to leverage your strengths and take advantage of market opportunities.

Without a competitive brand positioning, your brand might only remain a conceptual vision or a set of cultural values which sound great but don’t really make a difference in the marketplace. A meaningful, powerful, valuable brand is based a clear, crisp articulation of your competitive strategy.

How do you develop a competitive brand positioning?

In-depth knowledge of your target, your competitors, and your own business enables you to define a strong positioning. Use rigorous market research and competitive intelligence to uncover new insights and develop a proprietary point of view about the market opportunities and competitive landscape (see my research and competitive landscape map tools). You also need a fresh and objective assessment and analysis of your own company’s capabilities, resources, and assets (a brand diagnostic can help.)

Armed with these insights, you can use the following competitive brand positioning statement template to articulate your positioning:

For X,
we are the A who does B
because C

• X = target audience

Who are you trying to persuade? What distinguishes them? What’s important to them?

• A = competitive frame of reference

What is your aspirational competitive set? What is the mental file folder your target should put you in?

• B = differentiating value you deliver

What do you do that no else does as well and that your target cares about? Why should your target value you?

• C = reasons to believe

What evidence proves that you deliver that value?

Some examples:

A few years ago, a national smoothie QSR chain articulated their competitive brand positioning as follows:

For (X) everyone who chooses to do something good for themselves, we are (A) the convenient place for great tasting, healthy products that (B) energizes the way you live and feel — because we (C)
• are considerate of what you put in your body
• make it enjoyable to be healthy
• help create healthier communities

A running shoe and athletic gear company used the following statement to describe their competitive position:

Only we design (B) performance solutions that (A) fit (X) athletes and fitness enthusiasts who are confident in themselves and are driven to achieve.  (C) Reasons to believe:
- we offer the largest breadth of shoe widths
- our company started as an arch support business
- we continue to innovate insole designs to optimize fit

(As the above example indicates, your competitive brand positioning can take on a different sentence structure — you don’t have to use the exact template, as long at the components are included.)

You might have an intuitive understanding of your competitive strategy, but it’s important to take the time to document your competitive brand positioning. Doing so will ensure you’ve applied a rigorous analysis and covered the most salient points of your strategy – and the statement is a powerful tool to unify and align all of your stakeholders.

A few final notes:

-  target – Some businesses try to reach everyone because don’t want to limit their appeal – but history shows, if you try to be everything to everyone, you end up being nothing to no one. If you target a particular type of person or group, your relevance to them is stronger as is their identification with your brand.

Also your strategy will be stronger is you define your target audience with more than demographics. People groups are growing in diversity, so an 18 year old young lady in California is probably looking for very different things from a similarly-aged person in the South — and actually might have more in common with a 30-something guy who embraces an active lifestyle.  So use mindset, needs, attitudes, or values to profile a more precise target.

-  competitive set – The opposite tact is necessary here – you want to think broadly about who you’re competing with. The more narrowly you define your competition, the more easily it is to identify your competitive advantage – but also the more likely you’re overlooking viable options your target is considering.

A fitness boot camp isn’t simply competing with other boot camps – it’s also competing with other types of specialized workouts, full-service fitness clubs, non-group workouts like running, and even inertia. The couch may be its biggest competition! So define your competitive set from your target’s point of view, not your category’s.

-  differentiating value — Unless you’re the 99 cent store, price is not a sustainable differentiator. If the only thing that differentiates your offering is price, it’s fairly easy for a competitor to undercut you or bait you into a price war.

That’s not to say price promotions shouldn’t be used as introductory offers or other limited time only deals, but they should not be the thing you count on to maintain competitive advantage. Instead, your differentiating value should be based on a claim that you are “the best,” “the first,” or “the only” brand to do what you do.

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DLYohn America’s Next Great Restaurant 04.17.11 Episode 7 Recap from Denise Lee Yohn on Vimeo.

other recaps of america’s next great restaurant show:

• how attention to detail can make or break a business — episode 6 recap
• why the adage “the customer is always right” isn’t always right — episode 5 recap
• 3 keys to a successful fast casual restaurant — episode 4 recap

Last week I started a mini-series inspired by Jim Collins, who spoke at the World Business Forum for which I had been invited to guest-blog (see my recap post of the Forum, the best bits from the speakers, and my souvenir photo of the Bloggers Hub).  My last post relayed nuggets of wisdom Collins’ has learned from scaling rock faces; today’s post is about what he learned researching businesses.

Collins is probably most well-known as the author of the book, Good to Great, which contrasts companies which “made the leap to great results” with those which remained simply good or mediocre.  It is an excellent text on what enables companies to achieve superior performance and I hear it referenced all the time by business leaders aspiring to greatness.  But before Good to Great, Collins (along with Stanford prof Jerry I. Porras) wrote Built to Last:  Successful Habits of Visionary Companies and it’s served as my bible on business success.

Like Good to Great, Built to Last is based on an extensive and intensive research project.  Collins and Porras studied 18 companies which met the following criteria

• premier institution in its industry
• widely admired by knowledgeable businesspeople
• made an indelible imprint on the world in which we live
• had multiple generations of chief executives
• been through multiple product (or service) life cycles
• founded before 1950

Companies such as 3M, American Express, Sony, and Walt Disney made the cut and earned the label “visionary.”

Collins and Porras chose the term “visionary,” rather than simply “successful” or “enduring,” “to reflect the fact that they have distinguished themselves as a very special and elite breed of institutions.  They are more than successful.  They are more than enduring.  In most cases, they are the best of the best in their industries, and have been that way for decades.  Many of them have served as role models – icons, really – for the practice of management around the world.”

These visionary companies attained extraordinary long-term performance as measured by long-term cumulative stock returns.  And they’ve “woven themselves into the very fabric of society” – think 3M’s Post-It notes and Disney’s “happiest place on earth.”

The authors’ research found these companies share common management attributes and approaches – two in particular stand out to me:

1. BHAGs (Big Hairy Audacious Goals) – BHAGs are clear and compelling goals which serve as a unifying focus point of effort.  But more than goals, they are “huge, daunting challenges – like a big mountain to climb” (there’s another rock-climbing reference!)

Collins and Porras use the missive President Kennedy issued in 1961 as an example: “this Nation should commit itself to achieving the goal, before this decade is out, landing a man on the moon and returning him safely to earth.”  GE’s “To become the #1 or #2 in every market we serve and revolutionize the company to have the speed and agility of a small enterprise” was just as bold in its context.

What strikes me about BHAGs is they aren’t corporate-speak which supplicates company lawyers but fails to inspire everyone else.  And yet, they aren’t “yea, rah, rah” rallying cries which sound bold but don’t produce any action.

BHAGs can be distinguished from most corporate goalstatements because:

• a. They’re tangible, energizing, and highly focused
• b. People “get it” right away; it takes little or no explanation
• c. They stimulate progress and create momentum

I keep these attributes in mind as I work with clients on their brand strategies.  We work on developing platforms which inform, inspire, and inject a bias for action.

2. core ideology and drive for progress – Visionary companies preserve the core and stimulate progress.

Collins and Porras argue the importance of “core ideology”— “a set of precepts that plant a fixed stake in the ground: ‘This is who we are; this is what we stand for; this is what we’re all about.”  For example, Sony’s core ideology was created out of post-war Japan, when its founders created a “prospectus” to outline its role in resurrecting its country as a world leader.  One of the company’s “purposes of incorporation” was “to establish a place of work where engineers can feel the joy of technological innovation, be aware of their mission to society, and work to their heart’s content.”

At the same time, the Built to Last authors explain, “if a company just sits still or refuses to change, the world will pass it by.” So visionary companies tap the internal urge for progress to create new possibilities and always go further.  It was this internal drive which urged Sony to prove it possible in the 1950’s to commercialize transistor-based products when no other companies had done so and later to introduce the culture-changing “time-shifting” in the form of a VCR.

The key is to balance the two:  core and progress. “A visionary company carefully preserves and protects its core ideology, yet all the specific manifestations of its core ideology must be open for change and evolution.”

I see this balance get lost in the fast-paced innovation-driven nature of today’s business – in the pursuit of growth, too many companies fail to stay true what is core to their business.  They’re more focused on riding the latest wave of technology or the newest fashion trend and so they make compromises or allow distractions and lose their true north.  So I work with my clients to get crystal clear on what their core is and then apply that core to meet new challenges and seize new opportunities.

As noted earlier, these are only two of the many gems of wisdom I’ve learned from Built to Last.  The whole book is treasure trove of insights about extraordinary organizations which I reference and try to apply on a daily basis.  I encourage you to get a copy — I’m sure yours will end up as dog-eared and highlighted as mine.

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I’ve finally gotten around to reading “The Opposite of Fate:  A Book of Musings,” a book released quite awhile ago by Amy Tan, the author of best-selling novels like The Joy Luck Club and The Kitchen God’s Wife.  Like all of her other writings, this book has been a delight to devour.  Not only has it entertained me and helped me understand Tan (and therefore myself), but also it has inspired me.  Tan includes many insights about story-telling and communication in general which I believe can be applied to developing brand strategies.

One of such “musings” is “Five Writing Tips” — an edited version of a speech given as a commencement address at Simmons College, in Boston, in 2003.  Although her remarks were intended to inspire a new generation to write and think differently, I found they also provide helpful guidelines for creating brand strategy.

Tan herself explains broader application of the principles she relayed:   “So what can I as a writer tell you today that might be useful as you leave this period of your life and enter the next?…Five writing tips, which you may find useful in areas other than writing, perhaps even in thinking about life, how you might conduct it in a manner that is interesting and worthwhile.” (emphasis mine)

So with many thanks to Tan, here are excerpts from her speech and my interpretation of how they relate to developing brand strategy (in case you’re wondering what I mean by “brand strategy,” please refer to this post):

1.     Avoid clichés.

Tan:  They are all around us, and they are anathema to original thought.  Take these, all having to do with an acceptance of fate:  ”That’s how it was meant to be.” Or “That’s our lot in life.”…And how about: “Some things were just meant to be,” and “If it’s not one thing, it’s another,” a cliché brilliantly parodied by Gilda Radner.

When you are told, “It was meant to be,” ask, “Who meant it?  What does it really mean?”…When you are told, “Shit happens,” remember that plenty of other things happen as well, such as generosity, forgiveness, ambiguity, and uncertainty…If you hear overused expressions on the news, stop to think whether they are really meaningful.

The spectrum of meaning is endless and fascinating and filled with humanity.

Me:  Brand strategy should be authentic and meaningful. The job of a brand strategist is to uncover the authentic essence of what is being sold and to articulate that in a way that ignites with provocative insight the customer experience and communication development processes.

Brand strategies which rely on over-used phrases like “Brand X is the preferred choice of…,” or “Brand Y is the most innovative…”, are usually the product of a lazy strategist.  It signals he or she hasn’t done the hard work of digging for what the true meaning of the brand is and/or figuring out how to bring it to life.

Cliché-like tendencies are particularly common when describing brand attributes or benefits.  Relying on industry standards or company conventions can blind people to the real roles certain attributes or benefits play, or the way they have evolved over time, or how they might be framed, shaped, or exploited.  A strategist should always be questioning, challenging, pushing the bounds of conventional thought.

2.    Avoid generalizations.

Tan:  As a fiction writer, I distrust absolute truths, homilies, bromides, sound bites, and also shorthand advice of the sort I’m giving.  I like specifics…Intelligent readers will demand that you not…resolve situations with “Good always conquers evil,” “Might is always right,” and so forth.

And while such resolutions are common in murder mysteries and action stories, they are feeble in literary fiction, which is supposed to reflect subtle truths about the world. Better to be subtle rather than overbearing, subversive rather than didactic.

Me:  Brand strategy should be specific and nuanced. It should include a focused and precise articulation of what the brand stands for and the specific position the brand occupies in the competitive landscape.

It should also detail rich insights about the target customer(s).  Referring to “soccer moms” or “Gen Y” does little to help the strategy’s users understand the real needs and drivers of the target.

Again, this requires diligence and discipline.  But uncovering and capturing the “subtle truths” is often what makes the difference between a brand which is merely one of many options and one which truly resonates.

3.    Find your own voice

Tan:  …Your own voice is one that seeks a personal truth, one that only you can obtain.  That truth comes from your own experiences, your own observations, and when you find it, if it really is true and specific to you, you may be surprised that others find it to be true as well.  In searching for your own voice, be aware of the difference between emulation and imitation, inspiration and intimidation.

Me:  Brand strategy should capture the unique voice of the brand. The strategy shouldn’t simply explain the brand’s attributes and competitive positioning – it should also reveal the brand personality and character.  For example, when I worked on Sony Electronics, we had crafted the core belief of the brand:  We create technologies that inspire people to dream and find joy. The unique personality and character attributes we codified included:  young at heart; optimistic; believe anything is possible.

Also in some ways, the brand strategy is a story.  The brand is the hero, competitors or customer needs are the villains, and the dimensions outlined in the strategy create the story arc.  As such, the narrative should convey the brand voice.

4.    Show compassion

Tan:…Practice imagining yourself living the life of someone whose situation differs entirely from yours – living in another country, having another religion – and the more deeply you can do so, the more you can become that character as you write.  You cannot help being compassionate.

Me:  Brand strategy should reveal true empathy for the target customers. The more intimately you can relate to the way they think, feel, live, shop, the more capable you are of creating a strategy which will fuels a strong brand:customer connection.  It’s not enough to be able to describe customers – the goal should be to can see through their eyes the world, other people, the competitive landscape, and your brand and product.

Empathic and ethnographic research methods are great tools to achieve this level of intimacy. But above all, as Amy Tan explains, “Imagination brings you close to compassion.”

5.    Ask the important questions.

Tan:  What makes a story worthwhile is the question or questions it poses…We need personal answers, all the stories, as many as we can get.  But to find them, you first must ask the questions.  You need to ask yourself:  What is important?  What is at stake?  In knowing what questions you are asking, you also know your individual voice, your own morality.

Me:  Brand strategy should raise and answer the important questions. Developing a brand strategy isn’t about putting words on a page – it’s a process of discovery and enlightment about what matters.

Brand strategists should ask:  Why does this brand exist?  What is important about the target customer?  Why does this category matter?  What if this product didn’t exist, what would be lost?  And then the strategy should show how the brand answers these questions in a way no other brand can.

Tan concludes her writing tips by explaining their importance.  She says, “Your thoughts, your evolving answers to the important questions, are what will give you interesting lives, make you interesting people capable of changing the world.” (emphasis mine)

I believe the same can be said about a well-crafted brand strategy.  Developing and executing a deeply insightful brand strategy is what will make yours an interesting brand capable of changing the world.

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Later today I will be presenting the new strategic brand platform to the Board of Directors for an organization I’ve been working with.  I thought I’d take this opportunity to share my approach to brand strategy.

Why do you need a brand strategy?

I believe a brand is a driver and compass for the organization – it focus and aligns all decision-making and it guides what we do/don’t do and what we say/don’t say.  Having a clearly articulated brand strategy ensures everyone who works on our brand shares one clear, consistent, common understanding of what our brand stands for and how it competes.  And this, in turn, helps them align their behaviors and decision-making with the brand so that it is delivered through every touchpoint with the outside world.

Simply put, if we are clear about our brand, so will our customers be.

The brand strategy should be clearly articulated and written down.  Whether your organization has 5 employees or 500,000 – whether you’re just starting the business or it’s been around for decades — it’s dangerous to assume everyone knows what your brand platform is or to rely only on informal means for sharing it.  Particularly in these times of so much change, it’s easy for efforts to become unfocused or focused on the wrong things.  Your brand strategy should be codified.

Also, with so much buzz about customer co-creation and the power of word of mouth vs. traditional one-way brand communication, some pundits have proffered, “Your brand is whatever your customers say it is.”  This would suggest that there is little value in defining and articulating your brand strategy – I completely disagree.

An organization must know and make clear what it wants its brand to stand for and how it wants it to be positioned.  There is definitely a place for collaboration and integration with customers on how the brand manifests itself and how it is expressed (see 2 great presentations 1, 2 on this topic from German agency nouve, but I believe a brand strategy is as valuable a tool for business leaders today as it ever has been – if not more.

What is a brand strategy?

A strong brand strategy is really comprised of a complete strategic platform:

• brand identity – what your brand stands for – the values and attributes that define your brand
• competitive brand positioning – how your brand compares to existing options – this includes your target customers, the frame of reference in which they consider your brand, and the unique benefit or value you provide to them

An example I came across years ago is Campbell’s.

The two parts of the platform are integrated and interdependent. The brand identity explains who/what the brand is; the competitive brand positioning explains how the brand does what it does.  The brand identity tends to be more timeless, serving as the constant foundation of the brand; while the competitive brand positioning can change as the competitive context and target audiences change.

Your brand understanding is incomplete if you only have one part.  Without a brand identity, your company lack beliefs and principles to guide its market activity. You define yourself more by your context and less by your organization’s strategic intent.  Particularly in categories in which the products have become commoditized (fast food, for example) or in which the distinctions between competitors is difficult to ascertain (healthcare), the who and the what of the brand is the basis for most of a brand’s differentiation.

Without a brand positioning, the business orientation of the brand platform is missing. In isolation, a brand identity can seem only conceptual.  You need a brand positioning to reference who you are selling to, what your business scope is, and what you do to create value for your customers.  If the brand is defined separately from the business strategy, often the two aren’t aligned — and so when conflicts arise, the brand takes a back seat to the business.

Together the brand identity and competitive brand positioning function symbiotically – complementing and supporting each other.

A strategic brand platform is intended to provide richness and depth, not complexity.  Some of the best brands can be summarized in a single word or idea (Southwest Airlines = fun; Disney = family magic).  But in order to fulfill its potential as a business driver, leaders must expound on the brand and dimensionalize it into a full platform.

There are many frameworks that can be used to communicate the brand identity and competitive brand positioning.  Building blocks, circles/wheels, four-boxes, etc. — each is relevant to a different type of brand.  Storytelling, images, and videos are often helpful approaches to expressing a brand strategy.

What makes a brand strategy good?

The strength and integrity of a brand platform can be judged by several criteria.

1. Is it meaningful? – is it relevant and compelling to our target customers?  Some brands create new desires; others simply meet existing demand – either way, people must value what the brand stands for and delivers.
2. Is it believable? – does it over-promise or set up false expectations, or does it pass muster among even the most skeptical of customers?
3. Is it differentiating? – does it give us a distinct advantage over competitors?  The advantage must be noticeable, understood, and appreciated by your target customers.
4. Is it feasible? – does it accurately reflect our organization’s capabilities?  A brand platform can be aspirational but it must be possible.
5. Is it sustainable? – does it enable us to provide value and compete now and in the future?  The brand should be an enduring proposition which drives continuous improvement and innovation, not a fad-dependent or short-lived idea.

How is a brand strategy used?

As I explained earlier, the brand drives everything the organization does.  So it guides and influences R&D, product/service development, manufacturing, operations, sales, distribution, employee recruitment/training/development, stakeholder engagement, strategic planning – oh, and also marketing.

In the case of the organization I’m meeting with today, the new brand platform is of particular interest to the staff, who see it being particularly helpful in their prospective employee interviewing/screening process (“The brand personality explains the exact kind of employee we’re looking for,” said one manager).

Also it’s serving as a guide for the website re-design they’re undertaking, ensuring that the experience of using the website is aligned with the brand attributes we’ve developed.
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I hope this information has been helpful.  I haven’t done a post like this in awhile — I’ve been doing more observation and analysis lately.  So if you’d like to see more posts like these, please let me know.  Also if you or someone you know wants to know more about engaging me to develop a strategic brand platform, here’s an overview of my Brand Platform service offering.

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Yesterday’s New York Times’ article, Apple’s Game Changer, Downloading Now, was a fascinating read.  I’m not knowledgeable enough about the technology behind mobile apps to evaluate the story as a representation of the programming and development challenges and opportunities of all the different companies.  But I found it a provocative report on the different brands’ strategies.

Apple/iphone as curator

First, there’s Apple.  Actually the primary point of the piece was Apple’s approach to approving – or in some cases, not approving – applications for inclusion in its app store. “The company places high value on what it describes as ‘customer trust,’ or the idea that users have faith that an application distributed on the iPhone won’t crash the platform, steal personal information or contain illegal content,” the article reports.

As such, it utilizes an approval process that some developers criticize for being opaque, arbitrary, and/or slow.  Nonetheless, the process positions the Apple brand as a screen for quality.  It also adds to the brand’s cachet, because developers of all sizes and scale are able to submit their apps for consideration and those that make it through seem to have a cool factor that Apple has bestowed upon them.

From a brand point of view, this is a smart strategy.  The role of the brand as editor or curator has always been important in sectors like retail and media, but it is becoming more prevalent in other areas now.  By endorsing another company’s product, a brand builds its own equity as an arbiter of what is good.  The brand becomes less about what it makes and more about what it does – a position that’s inherently more valuable (I posted about this last year when Apple’s app store was just starting to take off.)

The approach does have its downsides as well.  It leaves a brand vulnerable to forces out of the company’s control.  If an app from the Apple app store has quality problems, there’s a chance it could tarnish the Apple brand.  The strategy can also bring a backlash if the brand’s editing is perceived as too subjective or exclusive.  The NYT piece relayed the stories of several developers who were frustrated with Apple’s process.  Philip W. Schiller, head of worldwide product marketing at Apple admits, “Sometimes we make a judgment call both ways, that people give us feedback on, either rejecting something that perhaps on second consideration shouldn’t be, or accepting something that on second consideration shouldn’t be.”

RIM/Blackberry as leading innovator

The article also reported on Research In Motion, which is focused on the utility of the apps it makes available to Blackberry users. Jim Balsillie, co-chief executive of the company, explains, “We’re much more interested in changing the applications and changing the user experience and really unlocking the promise and the money and revenue opportunity for the ecosystem.”  RIM believes it “is going to innovate in the right way to drive that value proposition to capture [the] growth [in the category.]”

It appears RIM is aspiring to a brand position grounded in thought-leadership and innovation.  This builds on the existing perceptions of the RIM/Blackberry brand which is credited by many for creating the smartphone category.  And focusing on transforming the business value proposition of apps seems consistent with the brand’s history in the productivity and business aspects of mobile.

So RIM also seems to be employing a smart brand strategy.  Carving out a position of leadership through innovation has fueled many successful brands – and leadership of the “ecosystem” would be particularly compelling in a space that has so many moving parts.  Such a brand can enjoy the halo effect from the rising brands of all of the players.

However an innovation-based brand position can often be one with narrower appeal, particularly in technology.  Leading edge customers may easily understand and appreciate the value of the innovations, but “crossing the chasm” to appeal to the mainstream is a huge challenge.  As was the case with the Blackberry when the iPhone launched, the first-to-market brand may be relegated to a smaller, more niche position, while a more broadly-appealing brand which follows may be able to gain more traction after enough people have had enough exposure to the innovation.

Google/Android as populist brand

Google and its Android Marketplace were also discussed in the NYT article.  In direct opposition to Apple, Google eschews any review process – it allows any developer to publish an application instantly and as such, its app store already offers 14,000 applications despite being launched only a few months ago. “We’re doing everything we can to open the device to both developers and consumers,” says Eric Chu, group manager of the Android platform.

In a word, Google’s brand position is “access.”   And, once again, this seems smart.  It fits with Google’s broader brand aspirations “to organize the world’s information and make it universally accessible and useful.”  Just as its programs and apps for computer users are intended to help people communicate and collaborate more easily, Google is working to tear down the walls that segregate and restrict in the mobile app space.

The strength of this approach is its populist appeal.  It has the potential to attract a broader base and use that widespread popularity to squeeze out the followings of brands that are more intense, but albeit more limited in size.

Problems can arise, though, if the brand becomes too unfocused.  By trying to be everything to everyone, there’s the risk of becoming nothing to no one.  Also the brand’s value could be limited if it is perceived simply as a channel.  Without a clear, distinct point of added-value, it could be become a commodity which simply provides access to other brands.

my takeaways

In the end, the point of all of this is not to advocate for any particular strategy.  They all have merit. And there are those who are much more qualified than me to posit which brand is most likely to be successful.  I simply want to suggest two important points about brand strategy that I took away from the NYT article:

• 1.    The importance of differentiation. In far too many categories, I see multiple brands trying to position themselves in the same way.  The values and attributes embodied by each brand are not distinct from the others and all of the brands end up simply promoting drivers of the category.  In some cases this happens because the brands’ owners don’t understand or appreciate the value of differentiation.  But in many cases it’s because they think it’s not possible to carve out a distinct brand position.  The players in the mobile app space have demonstrated that differentiation is not only possible, it’s necessary. Differentiation helps companies steal share – and when differentiation is done well, it can grow the entire category.

• 2.    There are advantages and disadvantages of every brand strategy. No single approach is a sure bet.  Leveraging the strengths of your brand position while minimizing its vulnerabilities requires careful management. And in a category that is changing and growing as quickly as mobile apps, the ability to adapt as the market evolves is key.  Back in the ancient history of mobile apps (aka last year), Apple’s brand strategy could be based more on exclusivity and the cool factor of being the only real player in the market.   Now as others have gotten in the game, it’s had to adapt its approach and apply those attributes to its role as a curator and quality controller.

Are there other brand strategy takeaways from the mobile app market?  Let me hear your thoughts – comments are open.

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Last week, Interbrand Design Forum the retail arm of the global consultancy of the same name released The Most Valuable U.S. Retail Brands 2009 report and it is a must-read for anyone who wants insights into the retail sector.

The actual most valuable brand rankings in the report are, as with all brand valuation lists, a bit misleading as the list omits privately-held companies, so retail gold-standards like Apple stores, Trader Joe’s, and REI aren’t ranked.  But the reason to read the report is all the supplementary content.  In addition to a brief analysis of each of the top 50 retail brands, the report includes educational and provocative research and editorial on a range of brand topics.

Some excerpts:

• from “Lessons from the Most Valuable Brands“:  Initiatives will always need to be built around shopper frequency, loyalty, margin, relevant assortment and top-and-bottom line growth. The notion that’s new to most [retail] companies is that brand — one great idea that generates value — drives them all. An overarching retail brand strategy can align these initiatives, making them more effective in total.

• from “Where are the Department Stores?“:  The [department store] format is still distinguished by a high level of departmentalization, which presents a challenge to the brand experience.  Its functional and merchandise specialization needs to be guided by the master brand to prevent a muddle of sameness between competitors, and to halt the loss of brand equity.

• from “The Misnomer of Specialty Apparel“:  Fashion retail presents great opportunity and great risk — the ability to generate high margins with the uncertainty of the duration of trends.  However, the lack of differentiation among the top brands suggest that the field is suffering from risk avoidance.

• from “Scale Alone Does Not Make a Grocery Brand“:  Traditional grocery earned the weakest customer loyalty scores.  Over-reliance on discounts, rewards and promotions undermines any move towards a meaningful proposition and results in low brand strength…As long as their vendors continue to pay for play, supermarkets may see no need to understand and serve the shoppers in their stores.  Brand thinking begins with the idea that addressing shopper needs increases frequency and basket size.  Without it, a store is simply a box full of other makers’ brands, and a master of none.

• from “Every Brand Tells a Story“:  According to our research, about half the population does not believe retail experiences are delivering against the promises made by the brand advertising.  They find innovation in both merchandise and experience is lacking across all retail…Shoppers will always need a reason to buy, but a branded shopping experience can help build long-term equity that will matter in an up or down economy.

• and the best points of the report (from “The Curious Case of Walmart“):  There’s a difference between “selling” and “branding.”   Selling is putting great deals on the shelf and promoting them.  Branding puts an idea into the customer’s heart and mind by selecting great deals that are relevant to people’s needs and desires…You can’t just out-operationalize the competition anymore.  Now that the low-price bar has been set, an emotional connection is the strongest bond a retail brand can have today.

Before we quickly toss aside 2008 with the carelessness due a former lover, I thought it might be enlightening to look back on the predictions that were made at this time last year — you know, those lists of trends that were predicted to shape the marketing experience in 2008.  For my final post of the year, let’s look into whether any of them ended up being right.  From the multitude of predictions that were made last December, I’ve decided to focus on the top 10 “Trends to Watch in 2008” written by Bob Liodice, President and CEO of the ANA, and published in Ad Age magazine.

Let’s have a look, shall we?

1.  MARKETERS HIT A ROUGH PATCH
“With caution flags waving, marketers will keep expectations and spending plans modest.”

on target?  I’d say so!  According to TNS Media Intelligence, overall ad spending dropped 1.7%  for the first nine months of 2008, with a 2% drop in the third quarter alone, despite heavy Olympics and political advertising.  And those declines are likely to only increase when Q4 is factored into the full year recap.  In fact, instead of “a rough patch,” one could say we’ve been on extended bumpy ride.

2.  INNOVATION AND CREATIVITY RULE
“Marketers won’t run away from traditional media — but will leverage technology and new media to accentuate message delivery to consumers and customers.”

on target?  maybe — it’s true, consumers are using social networking sites more than ever, but advertising spending has not kept pace. Despite new social network ad formats launched in 2008, eMarketer has revised its projections for US social network ad spending. It now estimates advertisers will spend $1.2 billion on social networks this year, down from the previous projection of $1.4 billion made in May.

Kraft CEO Irene Rosenfeld is even quoted as saying, “As we continue to look for opportunities for a mass message, TV is one of the cheapest vehicles around.”  So even though marketers may want to be innovative, the almighty dollar is what rules.

3.  GET SERIOUS ABOUT ACCOUNTABILITY
“Recognizing the critical importance of accountability, companies will appoint a czar — the chief accountability officer — to lead a disciplined, internally consistent approach to marketing measurements, metrics and productivity.”

on target?  that would be a ‘no’ — as much as increased accountability may be needed, companies don’t seem to be doing much about it.  According to a recent study by the Conference Board, more than 1/3 of companies report making no efforts to measure marketing return on investment.  Among the remaining companies, which had implemented programs, none have yet achieved their goals in measuring ROI. Only 1/4 report making “good” progress.  Yikes!  While the actual appointment of a Chief Accountability Officer might be an ANA pipe dream, we should be making more progress toward increased marketing accountability.

4.  DIGITAL, DIGITAL, DIGITAL (AND PORTABLE TOO)
“As Steve Ballmer proclaimed at the 2007 ANA Annual Conference, all media ultimately will be created and delivered digitally…The challenge: Are marketers skilled enough to take advantage of this rapidly changing landscape?”

on target?  yes and no — yes, because between the 10,000+ iPhone apps and the credit the deployment of digital media has been given in Barack Obama’s presidential win (see next item below), it’s hard to argue the impact digital had on our lives in 2008; but no, because it doesn’t seem like most marketers have the skills necessary to take advantage of digital media’s full potential.  According to a survey by consultancy Citigate Dewe Rogerson, 40.4% of marketing professionals believe they lack the in-house skills to introduce digital marketing strategies (while CDR’s study was based on marketers UK and Ireland, I’m guessing the findings for the US would be similar).

5.  THE ‘BRAND SWARM’
“Marketers will move decidedly in the direction of DDB CEO Chuck Brymer’s “swarm theory” — the notion that people and their opinions coalesce to form critical forces that massively influence marketplace ideas and concepts.”

on target?  two words for you: Barack Obama

6.  GETTING COMPENSATION RIGHT (PLEASE)

“Compensation models will evolve in 2008. Agencies and clients will work together to create mutually fair value- and incentive-based approaches.”

on target?  not at all — in fact, there’s so little evidence of this having happened in 2008, I couldn’t even find enough material on this subject to make something up.  I did, however, find articles dating back to 1998 stating predictions of imminent changes in agency compensation models.  Perhaps instead of calling “getting compensation right” as a prediction, we should think of it as a New Year’s resolution — we all know what happens to those.

7.  NEUROLOGICAL MARKET RESEARCH
“Going beyond traditional focus groups and consumer surveys, market research will embrace scientific approaches that literally tap consumers’ brains to learn how they neurologically respond to commercial messages and make brand choices.”

on target?  not yet — BRANDWEEK magazine’s coverage of the new fMRI technology in their 08.25.08 issue does more justice to this topic than I can do here, but the Readers’ Digest version is:

-  “technology has finally caught up to the aspirations [to see inside the working mind of a consumer] and made it all possible-or at least possible to begin”

-  “all it needs are companies willing to support [it]”

8.  EMERGENCE OF THE ‘RENAISSANCE MARKETER’
“A new breed of marketing professional is emerging — individuals with a holistic view of the world and extraordinary observational powers. These “renaissance marketers” will be part humanist, part psychologist, part anthropologist and part technologist.”

on target?  no — although we saw some unlikely selections for Chief Marketing Officer appointments this year (recent case in point:  Jill Beraud, former CMO for Victoria’s Secret, named as PepsiCo’s CMO), I’m not seeing a dramatic shift in the experience base of CMOs.  And that’s too bad — C.K. Prahalad, University of Michigan professor and authority of management, explains it best.  With today’s need for innovation, he says, it’s the “unique person you want to look at, not necessarily whether he had this or that experience at P&G.”

9.  PRIVACY, PRIVACY, PRIVACY
“In 2008, marketers will become increasingly sensitive to privacy issues…This tug of war between consumer privacy and information access will require marketers to work hard to explain and justify the lifestyle benefits of highly individualized, personalized commercial communications.”

on target?   not really — Yahoo! was the biggest mover in this area, announcing just this month they will start making user data anonymous within 90 days, and will destroy all personally-identifiable data within six months, with some exceptions for fraud, security or legal obligations.  And earlier this year  Microsoft was pushing for regulation of the data that online companies collect for marketing purposes. But we really haven’t seen a wholesale push to more or new privacy practices.

ANA may have needed to include this in the years’ predictions to be politically-correct — but the truth is, there really hasn’t been lot of change in marketers’ approach to privacy nor do I expect will there be.  We may not want to admit it, but the benefits of behavioral targeting and personalized marketing are strong enough to outweigh any substantitive change — and we’ve only scratched the surface of what’s possible.

10.  THE POWER OF STRATEGIC ALIGNMENT
“Strategic alignment is one of the most important roles of the chief marketing officer, and In 2008 more CMOs will ensure organizations are strategically aligned.”

on target?  definitely not — according to a study by the ANA, 64% of Chief Marketing Officers and brand managers say their brands do not influence decisions made at their companies (I’ve previously posted on this sad fact).   And in research that I conducted along with one of my partners, Coogan Partners, senior marketers from a range of companies named the lack of alignment between innovation and brand strategy as one of the top impediments to implementing brand strategy.

So CMOs need to work more on alignment.  But there’s hope — I’m hoping for a silver lining in the pressure the tough economy is putting on marketing budgets — perhaps 2009 will be the year marketers actually focus their efforts internally and realize how much more impact they can have through internal brand alignment and integration.

So there you have it — out of the 10 trends predicted, my take is:

• 2 were on target
• 3 kinda were, maybe, if you wanted to be generous
• 5 definitely not

Hmmm…it looks like some crystal balls may need a tune-up.  Let’s hope the powers that be have a better grip on what’s in store for 2009.

And with that, I’m signing off for the year.  Thanks for your readership of brand as business bites this year – I’ve enjoyed feeding our brains together.  See you in January!