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Archive for the ‘Branding’ Category

Myths about trademarks and the top 5 reasons to register your brand name and logo.

Monday, June 7th, 2010

trademark

Myth no. 1 – Once you register a trademark you own it forever and for everything

Myth no. 2 – Registering a domain name offers all sorts of legal protection

Myth no. 3 – You can save money if you conduct the search yourselves.

Trademark Tip – Top 5 Reasons to Register Your Brand Name or Logo.

There a myriad reasons to protect your trademark, brand name, logo or slogan through federal trademark registration with the United States Patent and Trademark Office (USPTO). Here are just a few of the top reasons why you should seek federal protection for your mark:

1. Trademarks are a part of your company’s intellectual property portfolio. It could very well be one of your most valuable business assets, albeit an intangible one. Trademarks can be accorded a value separate and distinct from other assets in your company. To illustrate, the Coca-Cola® trademark alone is purportedly valued at $70 billion. This doesn’t include other assets such as trucks, manufacturing and bottling facilities, etc., just the Coke® brand. The value of a registered trademark may be listed as a line item asset for companies seeking to attract potential investors or obtain financing.

2. A federally registered trademark grants you nationwide priority claim of ownership to the mark. A registered trademark provides constructive notice to prospective users and potential infringers of your claim of ownership to the mark. In the event of  a dispute concerning rights to use a particular mark, the registered trademark owner will have the benefit of the doubt vis-à-vis a non-registered user of the same mark for similar or related products.

3. In the event of any unauthorized use or potential infringement of a registered trademark, the trademark owner is entitled to seek redress in federal court. The registered trademark owner can bring suit in federal court for trademark infringement and prohibit the alleged infringing mark from being used in commerce in a manner that causes confusion with the registered trademark. Moreover, trademark owners may seek three times their actual damages suffered as a result of the infringement (triple damages).

4. If you are interested in obtaining international trademark protection for your brand, you will need to first have a registered or pending application filed with the USPTO. A federally registered trademark is the basis for U.S. trademark owners to seek international trademark registration. Upon filing your application, the USPTO assigns your mark a serial number (or a registration number, once registered). This number is used to submit an international trademark application under the Madrid Protocol System for International Trademark Registration.

5. Registered trademarks may be filed with the U.S. Customs Service to prohibit the importation of infringing foreign goods that may bear your mark or something similar (“knock-offs”). Many illegal imports attempt to trade off the established brand value of famous or well-known marks. Trademark registrations may be placed on record with the Customs Service so infringing products entering the country may be flagged, seized and possibly destroyed.

So there you have it, the Top Five reasons to protect your brand name or logo through federal trademark registration. There are other reasons, of course, including protecting your brand value and hard earned marketing dollars. For more information concerning trademark law, the trademark registration process, or for questions concerning your particular mark or brand, please contact one of our FlatFee Trademark attorneys at 1.800.769.7790 or [email protected] .


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The BlackBand viral marketing campaign

Saturday, April 17th, 2010

Case study: Blackband project

Owner: Camacho Cigars, Authors: Dylan Austin, Gianni D’Alerta

Background/Introduction:

Before we started this project we planned and built the following two sites for Camacho cigars – www.camachocigars.com and www.socialcigar.com (at first we did not reveal that Camacho was behind this site). Through the two sites we built a subscriber list of 4,500 people in less than one year. Since then we have also built www.room101cigars.com, and we are currently working on a new revolutionary social networking platform and corporate site for Camacho Cigars/Davidorff.

Kickoff of the BlackBand project:

To start off, here is an excerpt from the press release, post project:

“The campaign objectives for Camacho included the creation of an engaging, opt-in viral marketing campaign, a successful permission-marketing opportunity as an outlet to sample yet to be released products. A four-part web-series was created without mention of Camacho until the final “reveal” episode. The viewers followed the satirical Independent Cigar Review Bureau, a fictional agency, whose sole purpose was to educate the world about cigar selection, as they used humorous, guerilla-style tactics to enlighten three characters that represented the most common cigar misconceptions”

Process:

  1. We launched the site with this page: http://www.blackbandproject.com/home-temp/
  2. We blasted Camacho’s mailing list of 1000 and the social network we created while I was at Propeller of 3500 people, not as Camacho but as the fictional company. The amazing thing was that the idea was so interesting that we had a very low spam report.  We also ran rich media banner ads that actually played a trailer of the project on the websites the banners resided.
  3. Once the person signed up they would get one episode a week that would build upon the myths and misconceptions of cigar smoking. The Buzz just keep mounting… people passing the links to their friends… it was huge… in the online cigar world.
  4. After they registered they immediately received their first “mission” http://www.blackbandproject.com/d57s-1/
  5. A week after that http://www.blackbandproject.com/6ku6-2/
  6. A week later http://www.blackbandproject.com/hr4s-3/
  7. And then the conclusion http://www.blackbandproject.com/b7x3-conclusion/

Results:

  1. We gained 15,500 new subscribers! With that permission to market to them anything in the future. They are already expecting more from Camacho, and we won’t disappoint them.
  2. Every cigar website was buzzing about the project, we even got more hits on our Black Band Project site in one month that Cigar Aficionado.
  3. After the last video was sent… a month later people got 3 cigars in the mail. So for a whole month, every week… the conversations where about the black band project. Then when the cigars shipped, another huge buzz.

Another Excerpt:

From day one, the campaign captivated the cigar industry and generated sweeping buzz across the country, with thousands of cigar enthusiasts discussing who was behind “The Black Band Project” on social media outlets, including Twitter, Facebook, and cigar-industry message boards and blogs.

End results:

  1. 15,000 leads
  2. 4,000 people got the cigars (people who watched all the videos)
  3. 15% overall sales increase after the launch of the new product.

Marketing in 2010: How and why Amazon (and everybody else) plans to be your new best friend

Friday, April 9th, 2010

You’re up and running, you have clients returning your calls, customers coming in the door or adding product to their shopping carts on your site, and you look around at the economic landscape and are at least momentarily relieved to be able to say “I am doing OK.”

Where do you go from here?  What more can you learn?  Although your products are ingenious and your marketing efforts stellar, hard as it may be to believe you haven’t already conceived of every Great Idea.  We all need to routinely challenge our thinking so that we continue to leap forward, we need to break out of the borders and assumptions we’ve always held about our company and our industry.  So occasionally this year, Kompani Group is going to talk about things we can learn from the most successful companies in other, completely unrelated industries.  Marketers in online retail have much, much more in common with traditional retailers than the few issues of format that set them apart.  And as for size, your revenues and budgets may have many more (or many fewer) zeros at the end than ours, but the fundamentals are identical:  getting our clearly defined message in front of customers and then delivering satisfaction.

There are brick-and-mortar retailers with broadly acknowledged reputations for superior service – been to Nordstrom or an Apple store lately?  Is there any reason why a retailer serving the online world can’t develop the same kind of reputation?

The question occurred to me this morning because I received another e-mail message from barnesandnoble.com.  “Chris,” it began, “you bought the last book written by so-and-so.  His newest novel will be released next month and we’d be happy to hold a copy for you.”  How cool is that?  (And equally important, how simple for them!) Although we know it’s just data manipulation, it FEELS incredibly personal.  “Somebody” at Barnes and Noble knows and uses my name, remembers what I’ve bought there before, and figures out what my previous purchases can tell them about my tastes and interests.  They’re my friend.

The principle is the same (though not quite as proactively executed) at many of the large, successful sites:  Netflix recommends movies to me based on what I’ve watched and rated before, and the behemoth Amazon suggests both new items that fit my profile and companion products that other customers like me have bought.

Is this difficult?  Absolutely not.  Every one of us has the same data base of customer descriptives and purchase history.  Not very many of us use it to anywhere near its optimal marketing capacity.

Let’s look for a few minutes at a retail success story that has been widely studied:  Starbucks.  In its off-line business, what does Starbucks sell?  And how in the world can they expect us to pay six or eight times as much for a cup of their coffee as we would pay down the street – and be happy about it?  Other coffee retailers have successfully moved coffee from a commodity to a differentiated product; only Starbucks has made coffee an experience.  In fact, Starbucks has made its name synonymous with the coffee experience.  They may have been in the headlines lately as they adapt to changes in the economy and in their marketplace – but isn’t that the point?  In the best of times and in the challenging times, they are the ICON – they define the coffee experience.

Is there any reason why a customer’s interaction with your offer, the process of selecting and buying whatever your product or service is, can’t be an experience?

That was a trick question, I’ll admit, because interacting with you  already is an experience.  There’s nothing you can do about that.  Every customer who buys from you (or chooses not to) is going to have an experience with you whether you like it or not.  The only question is what kind of experience are they going to find.

To explore how we can consistently make each consumer experience with us an excellent one, we’re going to look at some of the things Starbucks has done to become the clear leader in their field – such a dominant figure that there isn’t even a close second.

Before anything else, Starbucks had both a vision and a clear plan, which they’ve executed to perfection. Absolutely everything the company does is designed to give the customer a positive, perhaps uplifting, experience while purchasing a quality product.  Notice that “experience” comes before “product” in the sentence.  Because this is the goal, Starbucks is as much about people as it is about coffee – customers who respond to the experience, employees and managers who live the principles and values of the company.  These values – expressed as five principles and five “ways of being,” are published in The Green Apron Book, which every employee carries in the little front pocket of their apron.

In effect, this is Starbucks’ management marketing its concept to its own employees. None of the simple, common-sense ideas has anything to do with coffee – just as none of them has anything to do with secondary towing or cigars or Caribbean resorts (or whatever your own business may be.)  They have everything to do with how to personalize relationships, how to elevate customer interactions, how to preserve the intimacy of a small company even while working hard to become huge.

Starbucks’ store personnel are trained to remember your name and your favorite beverage (and that’s without a built-in data base.)  They understand the old Dale Carnegie saying that “a person’s name is to that person the sweetest and most important sound in any language.” This not only says you remember them, it says they matter to you.  Starbucks’ customers, exactly like yours, are not looking for new best friends.  They just want a positive human-feeling connection and they want their needs to matter.

Retail is detail.  Starbucks’ Chairman Howard Schultz is fond of saying that.  The truth is that ALL business is detail, and the most successful businesses are intensely focused on the execution of details at every level.  The Starbucks’ training programs teach employees to zero in on the minute details that matter greatly to their customers; every aspect of the business that touches the coffee must reflect the highest standards possible.  The goal – which is really more a compilation of small things than it is one or two big, dramatic things – is a “felt sense” among their customers, a global emotional reaction to myriad tiny details that lurk below our conscious awareness.  The name “Starbucks” automatically triggers in us a feeling that has been created over time by the specific details of our experiences there. Researchers in brain activity have found that as much as 95% of what influences our conscious choices resides below awareness.  This is true about our interactions with anyone selling anything – some we feel happy about returning to, others we stress out about just at the sound of their name.

We have to work hard at getting the details right every time.  What percentage of unhappy customers do you think take the time to bring their complaints to management?  They just go elsewhere with a single click or with their feet.

Here’s a key thing that produces delight in customers, that keeps them feeling warm and fuzzy about you:  predictability.  Since consistency (in quality as well as in the customer experience) is a rare and valued thing, companies that master delivering it will ultimately thrive.  Even when something goes wrong (which happens), if the customer knows the problem will be addressed quickly, efficiently and with good humor – we win. Sometimes this contributes even more to a positive “felt sense” than if it had all gone perfectly in the first place.

The Experience is not the same as the Brand – and we all need to focus on building both.  Using Kompani Group as the example, here’s the critical difference:  if you are considering how you feel about Kompani Group, you are thinking about our brand.  If you are thinking about how you yourself feel as a result of your involvement with Kompani Group, then you are thinking about the Experience.  The latter begins by identifying emotions we want customers to feel as a result of their experience with us, and then working back to what the organization has to do to make that happen.  When our clients prefer the experience of working with Kompani Group, they will become committed to it. They will return to us with new projects, they will recommend us to their friends and colleagues (although probably not to their competitors.)

Finally, it’s important to note that the high visibility of Starbucks has engendered a fair share of criticism through the years.  Howard Schultz says he thinks that his “ability to act positively on any criticism is (his) most crucial leadership skill.”  Given and received in a wholesome spirit, there is much to be learned from criticism and much growth to be inspired.  But the world is full of people who have told Starbucks that they would fail, and why.  It’s still happening on some business pages today, just as there are those who wonder how you and your industry can effectively respond to a challenging economy or a changing competitive environment.  The key – for Starbucks and for smart business operators in every segment – is to choose to engage with the future, to reject the idea that the sky is falling, to believe (to know instead) that the sky is the limit.

Signed/Chris Barr

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Road America has signed a 12 month strategy, technology and marketing activations contract with Kompani Group

Sunday, March 21st, 2010

Road America

Road America is uniquely qualified to provide outstanding service to our clients and their valued customers.  This confidence is based upon the tremendous value we place on our relationship with clients, our comprehensive, specialized and rated service provider network, our long-standing and unparalleled experience providing 24-hour roadside assistance services, and our quality approach to servicing our clients and exceeding their business needs.

Corporate Strength

Road America is a wholly owned United States subsidiary of the MAPFRE Group (MAPFRE) the largest insurance group in Spain.   MAPFRE had revenues of over US $17.4 Billion in worldwide operations in 2006.  MAPFRE operates an extensive international assistance network through a specialized subsidiary, MAPFRE Asistencia, which is the direct parent company of Road America.

MAPFRE Asistencia is a leading international insurance conglomerate providing emergency roadside assistance, insurance, reinsurance and general assistance services worldwide throughout 52 countries and over 1000 corporate clients, including Renault, Infinity, Ford, General Motors, Harley-Davidson, Toyota, Peugeot, and Volvo.  MAPFRE services 120 million beneficiaries worldwide, providing assistance on more than 2.5 million occasions and is rated A+ (superior) by the North American rating agency AM Best.

International Expertise and Experience

Our confidence is also based upon the significant experience and strength of our parent company, MAPFRE, within the assistance services industry.  In the field of emergency roadside assistance, MAPFRE has developed and operates an extensive direct provider network in 39 countries.

MAPFRE has developed proprietary software, procedures and know-how in the field of roadside assistance, and it has comprehensive experience in developing worldwide provider networks and call centers to service international roadside assistance programs for insurance companies, automobile manufacturers, financial service companies and other international corporations.

Flexibility and Responsiveness

Road America’s programs have been and are marketed successfully through a variety of marketing channels in the following industries: motorcycle OEM, automotive, associations, telecommunications (wireless and wireline), financial services, insurance, original manufacturers, motor club and utilities.  This diversity in experience has allowed Road America to perfect and enhance our service offerings and capabilities.

Road America’s strengths include the size and flexibility to customize our service offerings and the responsiveness to meet or surpass each client’s exact or unique marketing, service needs and culture.

Comprehensive Service Offerings & Capabilities

In addition to a complete array of benefits, including automotive, travel, security, and medical related services, Road America can provide a full range of support services including marketing and promotional support, fulfillment services, inbound sales and enrollment, membership tracking and renewals, and program administration.  Road America’s extensive list of services, innovative approach, and commitment to complete client satisfaction makes our service offering the most meaningful and comprehensive in the industry.

Ethical Business Practices

The nature of the MAPFRE Group demands enforcing a policy of ethical treatment of employees, clients, business partners and customers; social responsibility; respect of the legal framework; and a culture of sound business and accounting practices.  The MAPFRE Group requires the same strong ethical business practices from all of its subsidiaries within the MAPFRE Group.

Tested. Proven. Trusted®:

With more than 120 North American corporate clients and more than seven motorcycle OEM clients, Road America has proven sales and service results.

Road America’s 24-hour roadside and membership programs have been proven to:

  • Increase Brand Loyalty
  • Increase Customer Service Ratings
  • Increase Customer Referrals
  • Increase Customer Retention
  • Increase Customer Awareness
  • Increase Overall Client Profitability


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Launching a Driver sub-brand

Saturday, February 20th, 2010

The economic strains are causing your end-users to trade down, resulting in that the mid-tier and premium brands are losing share to low-price rivals. You face a classic strategic conundrum: Do you tackle the threat head-on by reducing prices, knowing that will destroy profits in the short term and brand equity in the long term? Or do you hold the line, hope for better times to return, and in the meantime lose customers who might never come back? Given how unpalatable both of those alternatives are, you now must make a decision of how to combat manufacturers and distributors of lower priced and inferior products, to avoid losing additional market share and eroding margins.

There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorsed sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

Driver sub-brand

Definition:

  • The parent brand retains its primary influence as a driver, and the sub-brand can act as a descriptor-a word or phrase that tells end-users that the company is offering a slight variation on the same product or service they have come to know.

Note: Of the three types of relationships, a driver brand with a descriptor sub-brand is the most risky. The parent brand is vulnerable to cannibalization because very little distinguishes one brand from the other. The risk of cannibalization is greatest when a descriptor signifies merely a lower-quality offering. The risk is minimized when the descriptor signals a different application.

Examples:

  • Mercedes provides a good illustration of a driver brand that has successfully accessed a downscale market with a descriptor sub-brand. In the early 1980s, Mercedes introduced that is now it’s C Class, a small car to compete with the BMW 3 series, as well as with Acura and Lexus.
  • Now priced around $30,000, the line sells nearly 30,000 cars annually in the United States (around one-third of all Mercedes sales in the United States).
  • How could a brand that has historically been identified with prestige and that offers a car selling for more than $100,000 pull off this kind of downscale move?
  • First, Mercedes delivered a quality product.
  • Second, the C Class introduction was accompanied by an intensive effort to reposition the core brand’s message from prestige to performance.
  • Third, marketing for the C class aggressively targeted young buyers. The C Class name creates a distinction that allows the sub-brand to attract a slightly different consumer, but it does not drive that consumer’s decision to buy the car. The Mercedes brand retains that power.

Celeron – B to B (Intel) 1997

  • To combat AMD’s $260.00 K6 processor chip, and to avoid having to lower prices on its Pentium processor, Intel launched a sub-brand dubbed Celeron.
  • Despite a couple of early pricing mistakes and mishaps in expectations management, Intel succeed in combating and keeping AMD from creating a strong foothold in the low-end market. With a share of 80% of the overall processor market and their ability to roll out new processors frequently, Intel proved to be a testament to both the power of fighter brands to open up lower-tier market opportunities and their unequaled ability to keep competitors at bay.
  • Note: The EU have recently been successful in winning a ruling against Intel regarding antitrust issues and pricing manipulation resulting in a fine of $1.5 billion dollars. We wonder whether the costs of the now 5 year old lawsuit brought by AMD, the fine and the distractions for Intel’s senior management team, would justify the launch of another Celeron value sub-brand when you already have more than 80 percent of the total market share.

Launching a Co-driver sub brand

Sunday, February 14th, 2010

The economic strains are causing your end-users to trade down, resulting in that the mid-tier and premium brands are losing share to low-price rivals. You face a classic strategic conundrum: Do you tackle the threat head-on by reducing prices, knowing that will destroy profits in the short term and brand equity in the long term? Or do you hold the line, hope for better times to return, and in the meantime lose customers who might never come back? Given how unpalatable both of those alternatives are, you now must make a decision of how to combat manufacturers and distributors of lower priced and inferior products, to avoid losing additional market share and eroding margins.

There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorsed sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

Co-driver

Definition:

  • The parent brand and the sub-brand act as co-drivers with roughly equal influence on consumers.

Examples:

United Express (United Airlines)

The United Airlines brand provides United Express, a commuter line, with the convenience of connections to United flights and a reputation for safety. There is no cannibalization because the flights do not compete. United Express is differentiated from its parent brand by its lower level of on-board service, its use of smaller planes, and its less formal personality.

Good News (Gillette)

Gillette Good News also illustrates a successful co-driver relationship. Gillette Good News disposable razors are a definite cut below ‘the best a man can get” that is the Gillette legacy in shaving. But disposable razors are qualitatively different from the upscale razors such as Sensor and Atra with which Gillette has long held a technological edge. Gillette could provide a rationale for a disposable brand by being the best in the disposable category. But the Good News user’s personality – younger and more carefree than the traditionally masculine and sophisticated Gillette persona – plays a key role in distinguishing the disposable brand from the rest of the line. Both brand names – Gillette and Good News – influence the customer’s decision to buy the product.

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What provides an unrivaled return on investment, and is safer than investing in Gold?

Friday, January 22nd, 2010

We have always thought that most companies are missing the boat in terms of how much their brands are really worth, because they don’t understand how much a small investment in their brand quickly multiplies the perceived value when going public or when attracting growth capital. In most cases a small investment in their brands immediately translates into a competitive edge for products sold off/on the shelf or on the web.

Since all businesses have a number of case studies that are relevant to their target audience, we suggest that you establish a CSS style web site, with a blog and content management backend where posting a new page or new blog is as easy as writing a word document or an e-mail. If you take a closer look at your competition, you will also realize that they aren’t effectively using the social media and other means of SEO friendly web sites, which in turn will send you scores of inquiries from new prospects.

Building a well designed and professional site, writing content and educating you on how to maintain or update the site is fairly inexpensive, and can be done for about $7,500 – $10,000.

Even though our own site www.KompaniGroup.com and www.ActiveServe.com are more complex than what you may need, they represent the web 2.0 CSS type of web site we are talking about. Both of these sites are receiving new hits and leads every week, mainly because they both are optimized for SEO and because we are active in posting blogs.

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Launching an endorsed sub-brand 2/4

Saturday, January 9th, 2010

This is the second of 4 posts about how to combat manufactures and distributors of inferior products that are being reverse engineered and produced in China and sold at much lower prices to your existing clients. You are losing market share fast, and it is time to do something about it.

The economic strains are causing your end-users to trade down, resulting in that the mid-tier and premium brands are losing share to low-price rivals. You face a classic strategic conundrum: Do you tackle the threat head-on by reducing prices, knowing that will destroy profits in the short term and brand equity in the long term? Or do you hold the line, hope for better times to return, and in the meantime lose customers who might never come back? Given how unpalatable both of those alternatives are, you now must make a decision of how to combat manufacturers and distributors of lower priced and inferior products, to avoid losing additional market share and eroding margins.

There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorsed sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

Option Two – Endorsed Sub-Brand

Definition:

  • A sub-brand is a brand with its own name that uses the name of its parent brand in some capacity to bolster equity.
  • In the case of downscale offerings, the role of sub-brands is to help managers differentiate new offerings from the parent brand while using the parent’s equity to influence consumers.
  • The idea is both to maintain the parent’s credibility and prestige regardless of how the sub-brand performs and to protect the original brand from cannibalization.

Endorser

  • Definition: The parent brand acts as the endorser of the sub-brand. In this case, the sub-brand is the more dominant of the two, and drives end-users’ decisions to purchase the product as well as their perceptions of the experience of using the product.
  • When a company offers an endorsed sub-brand, there are three brands at work. The parent brand itself is split into two: a product brand and an organizational brand. The product brand remains as it was, a premium brand delivering a certain image and associated benefits.
  • The endorser strategy provides an excellent chance to minimize damage and reduce the threat of cannibalization to the parent brand. Keep in mind that all three brands need to be managed actively.

Examples:

Sabre B to C (John Deere)

  • John Deere’s foray into value lawn tractors provides a good illustration of an endorser relationship. John Deere was well known for making a lawn tractor that sold for approximately $2,000 through full-service specialty dealers.
  • Although the manufacturer was still able to command that price in the specialty market, volume retailers such as Sears and Home Depot had begun to serve a growing portion (around 30%) of that market, selling products at half John Deere’s prices.
  • So the company introduced an endorsed sub-brand for the value retailers: a low-cost tractor, Sabre from John Deere, that featured an inexpensive design and a different color and feel that John Deere’s other products

Medalist B to B (Hobart)

  • The Hobart Company, which makes an industrial-grade mixer for use in bakeries and restaurants.
  • Managers decided to create an inexpensive mixer for us in commercial and industrial kitchens to compete with offshore entries without damaging its flagship “gold standard” Hobart mixer line.
  • In 1996 the company introduced Medalist from the Hobart Company. Medalist mixers were lighter than Hobart mixers.
  • In addition, they were made with less costly materials and construction processes; and they had a color and logo distinct from those of the flagship Hobart.
  • In this example, The Hobart Company, has become an organizational brand that endorses the sub-brand, Medalist. Medalist itself is a new product brand. Thus the parent brand, Hobart, is separated from the sub-brand, Medalist, by the organizational brand, The Hobart Company.

Launching a pure Fighter Brand, 1/4

Friday, January 1st, 2010

We are losing market share to our new competition. What can we do to reverse the trend?

This is the first of 4 posts about how to combat manufactures and distributors of inferior products that are being reverse engineered and produced in China and sold at much lower prices to your existing clients. You are losing market share fast, and it is time to do something about it.

The economic strains are causing your end-users to trade down, resulting in that the mid-tier and premium brands are losing share to low-price rivals. You face a classic strategic conundrum: Do you tackle the threat head-on by reducing prices, knowing that will destroy profits in the short term and brand equity in the long term? Or do you hold the line, hope for better times to return, and in the meantime lose customers who might never come back? Given how unpalatable both of those alternatives are, you now must make a decision of how to combat manufacturers and distributors of lower priced and inferior products, to avoid losing additional market share and eroding margins.

There are four ways to battle your competition. 1) Launching a true fighter brand, 2) Launching an endorse sub-brand, 3) Launching a co-driver sub-brand or, 4) Launching a driver sub-brand

1) Definition of a fighter brand

  • A fighter brand is designed to combat, and ideally eliminate, low-price competitors while protecting an organization’s premium-price offerings.
  • A fighter brand, however, is not easy to introduce. First creating a new brand-building awareness, establishing perceptions of identity and quality, developing distributions channels is expensive, often prohibitively so.
  • Concerns about launching fighter brands
    • Will it cannibalize our premium offering?
    • Will it fail to bury the competition?
    • Will it lose money?
    • Will it miss the mark with end-users?
    • Will it consume too much management attention?
  • Other strategic questions to consider before launching at fighter brand
    • Determine whether another brand is truly necessary
    • Run the numbers, including what it will cost to build and sustain a new brand
    • Listen to your clients and customers, early and often
    • Reinvest in your core business and consistently calibrate between the two brands.
    • Is the market you are entering still growing

Examples of fighter brands

Saturn – B to C (General Motors) 1982

  • To combat the growing threat from fuel-efficient and affordable cars being launched into America from Japan, GM decided to launch of an “a different kind of car company” dubbed Saturn.
  • Despite the fact that Saturn won accolades for being one of the strongest brands in the U.S, Saturn proved to be a financial disaster with losses in excess of 10 billion dollars. With no budgetary discipline and so much focus on differentiating Saturn from the other GM brands, completely defeated the purpose of launching the brand in the first place.

Jetstar – (Quantas) 2004

  • To combat low-fare entrant Virgin Blue, Quantas decided to launch their own low-fare airline in 2003.
  • Since Quantas only had one single brand, it did not want to create a new brand unless it had to.
  • Exhaustive strategic sessions confirmed, however, that the Quantas brand was simply not in a position to combat Virgin Blue’s explosive growth. A fighter brand was the only option.
  • Quantas’ detailed projections showed that by offering no frills, its new airline could achieve a 20% cost advantage over its rival; thus allowing it to undercut Virgin Blue’s prices while sustaining a profit.
  • Quantum spent considerable time on focus groups across Australia and listening to their customers to validate the planned initiatives.
  • In 2004 Jetstar was launched with 14 planes flying to 14 destinations. The speed at which Jetstar attacked took Virgin Blue by surprise and knocked it off balance.
  • Jetstar took over the tourist routes that Quantas had lost money on. Because Jetstar proved profitable on those routes, it cannibalized only revenues, not profits.
  • Thanks to Jetstar, Quantas was able to refocus on its more profitable business routes and increase the frequency of its flights on those legs.
  • The subsequent boost in profits, along with Jetstar’s growing contribution, were reinvested in overhauls of Quantas’s business lounges and business class cabins – strengthening the Quantas brand and the distinction between it and Jetstar.
  • Jetstar has stopped the growth of Virgin Blue, and Quantas is now using the brand to fight other competitors in Asia and New Zealand.

Ambra – B to professional (IBM) 1992

  • To combat the growing threat from direct marketers of personal computers like Dell and Gateway and other IBM models.
  • The Ambra was sourced in Asia and marketed between 1992 and 1994 by mail order in Europe and the United States.
  • Due to lack of brand equity and distribution barriers the Ambra was cancelled 2 years after its birth.

Activeserve’s new business model takes off and the new web site is now live

Saturday, October 17th, 2009

Their Business is Your Business

iStock_000005523049SmallActiveServe is the ideal provider of business continuity solutions for South Florida businesses employing 3 to 100 business system users. Their expertise allows them to deliver superior insight, support, and service on nearly every type of technology system including communications, IT infrastructure, application hosting, and a wide variety of other answers for your business continuity needs.

In addition to the services themselves, ActiveServe also offers the unbeatable advantage of direct contact with their experts for design, decision, and implementation. In fact, they make a point of working hand in hand with business owners and/or IT managers to develop a custom business continuity blueprint… and they always make sure that technology never complicates the business side of things, and vice versa. That understanding, coupled with their specialized approach to business continuity is enough to make ActiveServe unique in the marketplace, but they can also be proud to be the first and only provider that offers a business continuity certifications program for small businesses in South Florida.

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