Sunday, November 25, 2012

Creating a Premium Brand – Learning from Lexus, Vertu and (Oh Yes) Q Mobile

Brand Management becomes really complicated when keep adding more brands and do not build them but try to create a family under one brand (umbrella branding). For consumer goods this strategy can work but ultimately you have to build a personality of the brand and associate positive and relevant stories around the brand. However, if you are planning out to move into a premium segment, you are sadly mistaken!

Before, analyzing where Q Mobile went wrong, let us begin with someone who did it right. One of this greatest luxury brands Lexus. A lot of people would be surprised to read that Lexus is a Luxury Car Division of Toyota Motor Corporation. In 1983, the then President initiated the project with an aim of creating a luxury vehicle challenging the world’s best. A top advertising agency was hired and a specialized image consultancy firm was hired to suggest its name. There are two stories associated with the name Lexus, the first one suggests the combination of luxury and elegance; the other theory suggests it means luxury imported to the US. From the word go, Toyota despite owning the company detached “Toyota” from it.

But why??

Each brand has its unique associations, associating a luxury car with a brand that is everyone’s car, would not work. Till today, Lexus operates in a brand new world, its dealerships/showrooms can outshine the likes of Mercs and Beamers. Today, it is one of the major share holders and global premium car market. Do you think it would have been possible with a Toyota logo on it??

Coming back to Q Mobile. Considering Pakistan’s telecom consumption rate, mobile handsets have created a separate class of its own. A market dominated once of Nokia now have other players like Samsung, Apple, HTC, Sony, LG, Motorolla, Q Mobile, Voice, Mega Gate and a lot of Chinese brands including replicas. In such a competitive market, fortune lies certainly at the bottom of the pyramid where apart from Apple all brands compete. One prominent feature of a low price segment is higher handset change ratio. Therefore, the market is forced to offer better value proposition while remaining in the same price bracket. But if suddenly and brand comes up with a Rolls Royce and top model, eye brows will certainly raise. A premium/luxury mobile phone albeit less than ten thousand rupees….What a deal!

In luxury brand industry, price is the biggest P. Yes it is. A little high and you not quite make and a little low your customers not quite feel it. So what could have been done? This leads me to an interesting mobile handset brand called VERTU. It is a hand-made, gold plated, diamond studded brand which is essentially a Nokia. Until recently, it was wholly owned by Nokia. Are you surprised?

If Q Mobile were to seriously launch a new mobile handset in the premium category, here is what they need to do:

  1. Create a separate brand, build a new image and disassociate its image from Q Mobile.
  2. Since their hardware cost is quite low, come up with premium features to build up the price.
  3. Or forget premium brand and focus on the lower price segment in which the company is doing really well.

Last but not the least Q is just an alphabet and it definitely does not mean Qadyani Mobile. Q could stand for Quran or Quaid-e-Azam. One has to be a little more creative.

Saturday, August 18, 2012

Brand Divorce: How Dell won the battle in my mind against HP?

Being a student of marketing and psychology, I have been overly interested in why consumers make a specific purchase decision. I hate shopping to be honest but "why shoppers buy?" keeps me interested. I have been an HP (Hewlett Packard) customer since when even I don't remember. Printers, scanners, laptops etc. I have been a loyal customer right throughout because the experience was fantastic. I was their brand ambassador and I don't remember the count of how many new customers I may have influenced. But then recently I bought a DELL laptop.

This is the story of Brand Betrayal and the only person to be responsible for it is HP. In this article I will analyze my purchase decision to find out what are the reasons behind such a shift. It all started more than a year ago at a marketing conference where I met a speaker after his presentation. During our discussion he introduced me some of his customers which included DELL and asked me to have a look at DELL's facebook page. The next day I liked it. I did not searched for HP's facebook page forget about liking it. Reason?? We cannot think of multiple things at a time (multi-tasking is a failed theory proven scientifically) while remaining focused. When I was awed by Amir's work and looking for his client's (DELL) facebook page I did not considered HP. This was the first step. 

Few weeks back when I started researching for a good HP laptop, I singled out choices. There were some 10 different HP models competing against each other. What a situation for a company!! But then I got bored. I started looking for some competition to HP because I don't want to make a decision without comparison. Reason? To win, you have to have someone to compete. This perfectly explains why KFC and McDonalds are located at close vicinities in our country.  In FMCGs they create their own competition to increase commutative market share. Comparison is necessary to create customer confidence over purchase decision.

While looking for a competition to fulfill my need for comparison, I asked a few friends and colleagues and all of them recommended DELL against HP. Even a friend of mine proposed an analogy by comparing DELL with Toyota for durability against HP with Honda for aesthetics. Being a Toyota guy, his comment influenced my decision so greatly that I actually started looking for DELL laptops. Reason? Strong and Positive word of mouth worked for DELL. This emphasizes the need for managing brand based PR. Most of our purchase decisions are based on peer pressure. 

While I was actively googling for DELL I was lead to DELL Marathon via its facebook page. It was like posting 800 tweets via your twitter account with a limit of 10 tweets per hour. Which meant that I needed to stay up for 80 hours to complete it in the best possible time to win a free laptop. What a motivation!! I completed first few hours. The tweets were interesting, informative and intriguing that few of my followers replied. Sad for me that we had a major power failure those days and I lost my motivation to win the free laptop. Good for the company that I made few tweets about their product, educated myself and my followers about the interesting features of their products. Now I was taking quotations for DELL? I almost forgot HP. What happened? Customers can be converted by active engagement. Talk to your customers, reward them, educate them and answer their problems with solutions. That is why Magnum was the best brand launched in 2012 in Pakistan. Just learned that DELL has an "experience center" in Lahore. 

Finally, the sales channel. I purchased from a "friend of a friend." Once a brand battle is won in the minds, all that matters is availability. But it is lost if you are absent at the shelf. That is why most FMCG brands stress heavily on retail visibility.

To sum up my experience:

1. Customers are now not brand loyal. Even those who tattooed with bodies with their favorite brand logos are removing them. Brand divorces are increasing. A customer thinks of a single brand at one time. Remember "brand is a single idea in the mind of customers" (Akhtar Mahmud)

2. Competition is compulsory. If it isn't, create it.

3. Brands need to be present where the customer is present. Facebook (in particular) and Social Media (in general) is the place where most customers of most product categories are present unless you are a space craft selling company. Online shopping is increasing and positive online presence yields results in offline shopping as well.

4. Positive word of mouth. PR is still the best form of marketing communications.

5. Customer Engagement is the first step towards brand marriage. Create experience, an unforgettable one.

6. Availability.    

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