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.

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