Why brand growth and brand power is not necessarily the same thing

Everyone likes growth. In fact, everyone demands growth. Growth is an indication of success and a catalyst for taking your business to the next level. If your brand building effort is not creating some kind of growth for the business or at least charge a price premium, then that brand building is not serving its purpose.

However, Growth can be categorized in two divisions. One is controlled, well-directed, single-minded. The other is unrestricted, unrealistic and irrational. One is simply natural outgrowth of business with a well-set strategy in mind. The other is simply to raise the bar high, set illogical growth numbers, preach a lot to the employees about the importance of meeting such lofty numbers and meet that growth target by any means possible.  The first type of growth is good. The second type, unfortunately is not. Just like cancerous cells, unchecked, unplanned growth actually can end the power of the brand.

So its an interesting cycle. The power of your brand can help you grow. But that growth itself can neutralize the power of your brand.

To understand growth further, we have to understand two concepts called Line Extension and Brand Extension. A cola brand X sees growth opportunity in diet cola subategory and decided to launch a new brand called X1. Now that’s line extension. Because the principle category “Cola” has not changed. So whenever an extisng brand launches a new variant in the same category by using its own name, its called line extension. Diet Coke obviously is an extension of Classic Coke. Now, the company in question can go in a different route. They found out that energy drink category is rapidly getting large and they need to launch something there. This time, instead of calling it Coke something something, they decided to call it Gatorade. This time instead of a line extension, the company in question launched a completely new brand to catpture the opportunity.

There are obvious pros and cons between these two options – launching a line extension vs launching a new brand. Launching a completely new brand is obviously more expensive than launching a line extension because you are using the current brand’s equity. However, in the history of brand marketing line extension is always a controversial move. To put it simply, too much extension weakens the brand.

Let us dive into the world of Hollywood blockbusters to understand this phenomenon better. On surface level, the  pulling power of movie sequels can never be denied. The sequels make more money than the original. Spiderman may have dangled and amazed from the rooftop, but its Spiderman 2 that made more money. Shrek was a family entertainment film with big laughs. But Shrek 2 is the one that brought big money along with the big laughs.

But what makes you succeed, presents your biggest trap.  Yes, on paper it looks so simple. You have a successful product which is being used by X number of people. If you just add another 3 more versions of your product you can rope in at least 3X times more people., right?  It doesn’t quite work like that.

If that was true how can one explain why Coke’s brand value has not quadrupled after Coke added innumerable variants of its classic Coke? Why did Pepsi suffer the same fate? Why was there reduction in earnings for General Motors in 2006 after they have broadened their portfolio in the past two decades? When Crest toothpaste has limited variants they were the undisputed market leader. Now that they have line extended to a lot more variations, why is Colgate the market leader, not Crest? The answer is quite simple. The more you want to sell, the greater variant you add to your product line, the more choices you give to your customers, your brand becomes less and less powerful. Because mind cannot deal with complication or extra information, it prefers simplicity.

There is a subtle, hidden rule of thumb here. And it goes like this – one will amaze, two will make money, three will bomb. Thats why Batman 1 and 2 was a great success, but when it came to Batman 3 (Batman forever), it bombed in the box office. Same applied to The Matrix, to the X-Men and all the rest of big money earners. Because once the initial film creates the fan, they simply cant wait to get more of the same film and same character. But when it comes to the third installment, usually boredom sets in and the makers run out of fresh ideas.

In the world of line extension, same things happen. You should only extend it to the second level. If you have a successful Lifebouy brand, extend it to make it a Lifebouy Plus. But dont follow it up with another extension called Lifebouy Plus Ultra. Take it to one level extra to build on it. But dont overdo it, unless you have some serious value additions to make, not just mild tinkering of formula.

The second concept called Brand Extension takes place when one company uses its current brand name to go to a completely new category. Now this was frowned upon a few years ago and company’s like TATA or SAMSUNG that exercised this concept of using its brand name to go to unrelated business were frowned upon. In the past, brand building was always about focus. But in this digital era all these notions are being challenged. Right now the line that draws between individual categories are getting blurred. That’s why Google is using brand extension to get into car business and Amazon is using it to get into everything from logistics, to retailing to streaming service.

Does that mean there are no rules anymore and we can launch anything in a unplanned way and keep on putting our brand name everywhere? The answer is no. The basic rules still apply. It is only when an existing brand sees an opportunity to create significant, relevant value in another category that he goes there with its existing brand name, Amazon went into streaming service because they found that field to be growing and they saw an opportunity to fulfil latent consumer demand that is not being fulfilled by existing cable companies.

So the acid test of growth decision is value creation. As long as you create value for consumer you tend to create value for your shareholder to justify your growth decisions.

 

Why Jose Mourinho never wanted to be the “People’s Champion”

Winning by playing beautifully is often the Holy Grail of sporting performance. Of course like everything that is desire-able in life, winning and playing beautifully both together is often hard to attain. If you had to sacrifice one, which one would you do?

It’s a surprisingly tricky question. Because you would think simply achieving the difficult task of winning itself should satisfy all parties with vested interest like players, coaching stuff, fan, owners of clubs, local media etc. But it rarely does. In the recent over-hyped “Fight of the century” which created a new Pay-Per-View record in USA of $500 million, Floyd Mayweather”s strategy of playing it smart to keep constantly moving and staying away from Manny Pacquiao’s brawling style of punches was heavily criticized by a lot of boxing fans as too calculative and safe. Jose Mourinho may be the most successful club football coach of recent times but he is heavily criticized for deliberately playing defensively against big teams in big matches and win with counter attacking style. In the Champions League final against Bayern Munich, Mourinho’s Inter Milan won 2-0 despite having only 33% possession of the ball and having 50% less number of shots than opponent. Even as recent as last month Mourinho, now the coach of recently crowned EPL champion Chelsea, won against Manchester United where the losing team had 71% of the possession where Chelsea scored with his first shot on target in 38^th minute. The Mourinho camp usually calls this a stroke of genius who does this trick over and over again, but not everyone is bought over.

Its surprising to what length people would go to demand sports to be attractive for viewing and not just trickery for winning. In Brazil, where football is synonymous to “Joga Bonito”, which means “the Beautiful Game”, the fans demand style over winning. Here its not enough to simply grind out a win, which for Brazilians and millions of their fans around the world is what the Europeans do to win matches at any cost. Despite leading his team to 1994 World Cup championship, captain and star midfielder Dunga was heavily criticized for the thuggish style of playing. When he came back to coach the team in 2010 World Cup, the same furor break out once again. In fact, in recent years there has been more concerns about the destruction of beautiful Brazilian soccer rather than the fact that Brazil has stopped dominating the game like they used to in 70s -80s.

In business as in real life there will always be the idealists, the pragmatists and the super star. The idealists would prefer doing things the right way, regardless of results. But the pragmatist believes that winning is all that matters. Business is not a duel or a clash among gladiators where people fight for honor. You may fight the good fight and bask in your glory in the arena, but if you die in your next fight in the amphitheater with your saved glory, its all rather short-lived. In the end result counts. It’s the rare super performer however who somehow makes winning with style easy and convincing. He is that rare spark, that rare Usain Bolt whose showmanship matches his lightning fast and consistent performance.

You just got to figure out, which one are you or which one you target to please. Because not everyone is Usain Bolt.

 

Be the Leader you want to have

Leadership is probably the category where the highest number of column inch is dedicated every year for the last 30+ years, cutting across all genres from politics to professional education. And its understandable. The world is divided into two kinds of people – people who want to be a great leader or people who want to be under a great leader. There is no in between, none seating on the sidelines not looking to get involved. And no matter which of the aforementioned group you belong to; leadership is important for you to understand, to practice, to adopt.

A lot of smart words from a lot of wise men have been spoken about the artful science of leadership. I am not going to elaborate on those obvious lines. What I would like to state (or re-instate, depending on if you came across these pearls of wisdom before) are some rarely highlighted leadership principles that somehow gets lost among the clichéd dictums.

Leadership Tip 1: Be the leader you want to have

Its actually as simple as that. Gandhi spoke in similar vein when he said that instead of preaching change, or advocating change or forcing change, we should “Be the Change”, that we want to see in the world. It starts with you and your mindset. In your professional career you come across some nightmarish bosses and while there is every chance when you bash those bosses in watercooler discussions, you slowly but surely become that nightmarish boss yourself. The circle is passed on.

That’s why to be a great leader for others, simply think about a great leader you would like to follow. Then do everything to become that person in every possible way.

Leadership Tip 2: Realize, its no longer about you.

There comes a moment in every people’s life when faced against the great mysteries of life he or she soon come to realize his life decisions are no longer limited to him only. It’s a rite of passage, the beautiful act of growing up.

In organizations also something similar happens. People start at the bottom, fighting and proving their way up, showing all the time that he is the top dog that everyone should bet on. But most people do not cross over that initial myopic professional view that they adopt. They carry on thinking that’s its always about him, his performance vs others. This kind of people usually become a great executive and employee, probably a star performer. What he fails to evolve into is a great leader.

A great leader understands its no longer about him only. In fact, its about everyone and everything else except him. The best leaders have the highest radius of influence beyond his or her immediate work or subordinates. Those are the people who influences others, to whom all of us prefer to go for advice or direction, even when we know his expertise on your line of work must be lower than yours.

To make that great transition, stop acting like you are the only thing matters.

 

Leadership Tip 3: Act like you own it

Ownership of work is a principle that is often discussed as a “right” for every employees, where they feel they can have significant say in the things that they do and how they do it. But turn it around, and all of sudden the right becomes a responsibility. Good leaders own their work. They are the ones who say “I got this”, no matter how important or insignificant it is.

In that way, “Ownership” separates boys from men, leaders from followers, performers from non performers.

Marketing Idea No. 300: The humble penalty kick and what it teaches us about strategy

Champions League final between Manchester United vs Chelsea, Moscow, 2008. In the final spotkick of the night in the tie breaker, Chelsea captain John Terry is about to take his penalty against Edwin Van der Sar, who was standing 12 yards away. Terry correctly predicted that Van der Sar is going to dive right against right footed kickers and he also correctly put his own penalty on the left. What he couldn’t predict or control that he would slip in the wet grass and miss the kick. By one estimate, that one missed penalty cost Chelsea $170 million.

Considering how much rides on penalty kicks, very few people actually pays a lot of attention to it. Its often thought as random and unpredictable, when its anything but. There is a clear strategy that goes behind taking and saving penalties and teams that can pay attention to it, can greatly benefit from that.

Take the scenario of Germany vs Argentina in World Cup Quarterfinal in Berlin 2006.

The Germans at that point had a database of 13,000 penalty kicks and from that they can predict who is going to shoot where and how. Jens Lehmann, the German keeper for the night, had a small crib sheet tucked in to his socks which read

1. Riquelme – Left
2. Crespo – Long Run-up/right
3. Heinze – Left Low
4. Ayala – Waits long time, long run-up/right
5. Aimar – Waits a long time/left

Germany ended up winning that match in shoot out and its hardly a surprise.

In recently completed Work Cup 2014 in Brazil, Holland coach Louis Van Galle substituted his No. 1 keeper and sent substitute Tim Krul to take the penalties in a crucial knock out match against Costa Rica. This strategic master stroke not only put Holland through, but also put penalty taking strategy at the front page to receive some much needed attention. In hindsight, it was quite clear that sending Krul made all the sense. He was much taller than the No. 1 Goalkeeper whom he replaced giving him a few inches of extra reach, had a decent penalty saving record and more importantly, the sheer unpredictability of his sudden presence would un-nerve the opposition. And during the penalties we can he is playing mind games with the shooters.

Aficionados of Game Theory will point out the essence of that theory in penalty taking. Its after all a strategic game and like all strategies, penalties need long hard thinking and preparation. And like all strategies, you can never completely avoid mistakes or unpredictability.

Take the case of one Cristiano Ronaldo

Ronaldo often stops in the run up to the ball. If he stops, there is a 85% chance that he is likely to shoot to the right hand side of keeper. But also, he is one of those rare penalty takers who successfully can change his mind where he wants to put the ball at the very last instant and get away with it. That makes him almost impossible to read at times

Like most other strategies that are often underutilized, penalties are criminally under exploited. Probably 4 out 5 cases, Goalkeeper will always choose a side and jump, making the penalty taken straight down a much higher chance to go inside. Knowing that, very few penalty takers, mysteriously, choose to shoot down the middle, as it’s a showcase of counter intuitive thinking and absence of long term thinking as well. One can only hope as the world of football moves to data crunching and companies like Optas come into being, this long perceived “gamble” of penalty taking will also become part of a more executable strategic plan for all the teams.

Going back to that infamous (or famous, depends on which team you support) night in Moscow, after 6 kicks Edwin Van der Sar understood that Chelsea is following a strategy of putting all their kicks on his left side, since Van der Sar has a tendency to dive to the right. As Nicholas Anelka prepared to take Chelsea’s 7^th penalty, in a moment of intense drama, the Dutchman pointed his left arm to the left corner as if he was saying to Anelka “I know that’s where you are going to put it”.

If you are Nicholas Anelka, now you got a dangerous game theory to work out. Should he course correct the strategy of putting it in left corner? Or should he stick to it?

We all know how that played out.

Marketing Idea No. 299: A “Selfie” a day, keeps the relationship away

When aliens will invade this earth and study the cultural & anthropological history of the species they just defeated, they will be struck by the overwhelming presence of digital self-portrait. They would probably interpret it as a vain human attempt to capture a slice of moment or fleeting history or desire to avoid mortality. When they would know that this trend is called “Selfie” and it was also the Oxford Dictionary’s word of the year in 2013, they would probably shake their large, oversized head in disbelief and note it down in their checklist next to Human Being’s desire for nonsensical violence as yet another puzzling trait that they just couldn’t fathom.

Why do people take Selfies? If its for Self, then why do they end up in places where they should and would be viewed by hundreds of people? Why do people automatically take nude pictures of their own, and even more puzzlingly, send it to complete strangers?

A 2012 study conducted by the University of Utah Department of Psychology found that out of 606 teenagers ages 14–18 who were surveyed, nearly 20% of the students said they had sent their own nude picture through mobile phone, and nearly twice as many said that they had received a sexually explicit picture. Of those receiving such a picture, over 25% indicated that they had forwarded it to others. Clearly, some Selfies are meant much more than a vanity check.

Human beings tendency to capture themselves on a piece of paper is nothing new. Self portraits done by famous and not so famous artists exist from centuries back. While they were once the signature styles of van Eyck, Rembrandt van Rijn and Joseph Ducreux, today any Tom, Dick and Harry with Smart Phone is an artist thanks to the democratization of technology.

The extreme prevalence of Selfies raise two key questions. Firstly, why people are doing it so much? And to follow up, what are the more long lasting consequences of this trend.

Some social psychologists believe Selfies are a way of identity formation and expression. It gives the Selfie taker an opportunity to create a much desirable “Self” than what he/she already has and that picture is the happy state that the unhappy self wants to become, even if its for a split second. But then some researchers claim this is an extension of modern narcissism. As per Cornell University Professor of psychology Peggy Drexler, “selfie subjects feel as though they’re starring in their own reality shows, with an inflated sense of self that allows them to believe their friends or followers are interested in seeing them lying in bed, lips pursed, in a real world headshot. It’s like looking in the mirror all day long and letting others see you do it.”

What are the more overarching implications of this trend apart from growing Facebook likes and stock price?

In a recent study conducted by the American Academy of Facial Plastic and Reconstructive Surgery, about 1 in every 3 doctors who participated in the survey confessed that they saw a growing number of clients who wanted changes done on their face and body due to social media

In a paper titled “Tagger’s Delight? Disclosure and liking behavior in Facebook: the effects of sharing photographs amongst multiple known social circles” four professors from three European business schools claim that people who post more selfies have shallow relationships with people. To come to this conclusion, the professors asked 508 Facebook users with an average age of 24 to rank how close they feel to their friends, coworkers and relatives who also use Facebook. They then compared those answers to how many selfies those people posted. Overwhelmingly, the more someone posted selfies, the lower they ranked on the intimacy scales of the participants.

The most ambitious Selfie study was done independently, where 20,000 Selfies from Bangkok, Berlin, Moscow, New York and São Paolo were analyzed to find hidden patterns. Some of the more interesting findings are

1. Women take more Selfies then Men
2. The facial expressiveness of Selfies vary as per the cultural openness of the country
3. The average age of Selfie takers is 23.7, making it a pretty much youth dominant terrain

 

Its all harmless fun, until you fail to draw the line. In March a woman took a Selfie after her plane crashed during take-off. And then another snapped a Selfie with a person just before jumping for suicide on Brooklyn bridge.

There is an old Red Indian saying which states that when we take pictures, we lose a part of our soul. Soul-less with “Selfie”? Probably that explains the current state of world.

Marketing Idea No. 298: The Leadership Bullshit

The biggest flaw about the importance of leadership in any organization argument is that, as incentive driven, ambitious, self centered human beings; why would any of us let go of our chance of being the center of attention, follow someone else as leader and in the way subtly accept that our leader is somehow superior than us? Wouldn’t that be counter to our own self interest?

As human being one of our core survival instincts is to look for the best possible solution for us. But something that is even more core to our soul than our need to shine is our desire to find something or someone to believe in. We simply cannot endure long periods of doubt or emptiness that comes from a lack of something to believe in. We are not built for it. That’s why when a larger-than-life figure comes and dangles something in front of us to believe in – a religion, quick rich scheme, battle cry, organizational vision – we leap from the water for this bait and hang on to it for dear life. That’s why we look at leaders like messiahs who will guide us to Promised Land. That’s the core need that cult leaders, politicians, CEOs and charlatans exploit for their own cause, either to swindle money, or to lead hundreds of people to commit mass suicide or to sell a war on terror to hide the need to hunt for fossil fuel or mesmerize a group of Stanford graduates through a commencement speech to find their passion by dropping out of college if necessary.

Organization life is a “Game of Thrones”, and great leaders play it like they are the stars on a theater. It’s a game where perception is everything and words mean more than action. In short, its bullshit that matters. Here are a short list of gimmicks that organizational leaders undertake to imprint their own brand of bullshit in organizations. If you find a hint of similarity with some of the most revered organizational leaders of our time, that is purely intentional.

1. You are not a leader if you don’t have followers. And to court followers, you have to draw attention to yourself. The best way to start is by making a vague, passionate promise and repeat that over and over again. The key part of this promise has to be inspiring, simple but vague. It must sound like a transformative dream, but simple enough for common people to get it but never make it concrete how you are going to do it, which will keep the allure going.
2. Once you establish your credibility among your followers, you need to keep them engaged through visual/auditory gimmicks, not intellectual solutions. That way you keep people entertained as well as court your skeptics. The best leaders act like they are on theaters. They dazzle with jargons, bold statements, and spectacle like presentations. All this to hold attention and detract from the substance.
3. You need to create rituals for your followers. Because rituals comfort people that everything is status quo and normal, as people hate change and uncertainty. That’s where the annual conventions, Monday meetings, lunch with boss and team buildings come in.
4. Finally, invent a common enemy to establish “us” vs “them” dynamic. It creates the perception among followers that they are doing something important, they share a common bond, they rally behind a common cause or enemy and in the process they feel like brothers/sisters/comrades who are in it together.

Marketing Idea No. 297: To Reposition or not to Reposition – The Quest for Fountain of Youth

He is the king of the shallow male ego, the ultimate in male fantasy with fast cars, fast gizmos and fast women. But when you add a multi-million dollar movie, book and merchandizing franchise to it – suddenly we just have to go quiet and admire him. And he built his empire, not by doing different attractive things everytime he hits the silver screen, but by doing the same thing over and over and over. It was consistency that built his brand, like many other brands in the world from Lux to Lenovo. The name is Bond. James Bond.

Mr. Bond is not only one of the biggest icons of our world but also an amazingly consistent brand. Every bond movie starts with a song in a husky female voice where the name of the film is embedded into the song. The film starts with Bond walking toward his right, then all of a sudden turning left, taking aim at the camera and shooting, then blood covers the camera. Then there is the signature tune, the gadgets, the larger than life villain who always wants to take over the world, the voluptuous and often mindless bond girls, the catchphrases, the drink which is always shaken not stirred – all of these mean a lot of things to a lot of people. But to marketers, this symbolizes consistency. Its the kind of consistency through rituals and re-enforcements that builds super brands.

Thats why when James Bond wanted to redefine himself, there was a huge controversy. The hard core fans who followed the brand loyally for decades were aghast. This is not James Bond! Where are the gadgets? But with changing times, James Bond did change to appeal to a younger demographic. I guess he had to. Cold war is no longer relevant. The new villains of the world are terrorists who want to blow things up. Spies are no longer suave and charismatic, but gritty and physically well built like Daniel Craig. Bond girls are no longer ornaments. They have an identity and they fight the good fight side by side with their guy. And then of course competition was looming. Jason Bourne suddenly looked a lot cooler and realistic than the often over-the-top James Bond. So Bond changed.

James Bond changed and did it smartly. It kept its soul intact but re-defined itself for the new age. So not only he held on to most of its old fans, but created a new sets of fan. And thats the whole idea of this rebranding/redefining saga. Brands should not wait till their appeal started to look old to change. They should change, while they are still on top of their game but when they started to feel a turnaround just up ahead in the road.

Jack Welch once said

“If the rate of change on the outside exceeds the rate of change on the inside, then the end is near”.

So change definitely is good and necessary.

There is simply a lot of change that’s happening out there. A lot of it is justified and if anything, necessary. A few even makes sense. But a lot of these changes are just mindless herd mentality. There is an old joke, which says “When you have nothing to say about your brand, change the slogan”. Therefore a lot of brands who are trying to reposition/rebrand themselves to look youthful, are doing so simply because that’s seems more logical. Such assumptions are always prone to be disastrous.

There is also a tendency to change things not because there is a business need, but internal stakeholders believe it’s a good rule of thumb to refresh things. There is also a perception that change means going 360 degree opposite. Change doesn’t mean the end of something completely and beginning of something new. Despite all the hoopla around it, is on-line the end of off-line? When we see legendary book stores like “Borders” closing and virtual stores like “Amazon” soaring to new heights, people can make this false assumption.

Just like Internet was never the end of Television as a medium, online is not the end of off-line. In fact, the future is a sort of hybrid, a mutually beneficial and dependent co-existence at times. In that future, online firms will complement their online existence through off-line activities. And of course, brick and mortar firms will go virtual to open up a new source of targeting customers.

A classic example would be how E-Bay is using off-site pop up stores/acts to drive traffic to its website.

An interesting phenomenon about online firms is the difficulty in categorizing them. A few years ago Amazon was an online book store, Apple was a computer maker, and Google was a search Engine. But Amazon is now into tablet manufacturing and content providing. Apple if at the forefront of defining digital revolution through i tunes, i pod, i phone and i pad. And Google is an omnipresent force in handsets, cloud computing, music store and software development.

This tells us that the classic way of defining boundaries for businesses no longer apply. Even more importantly, you cant really categorize who is your competition and who is not in a black and white manner anymore

Change also means trying to do the same things….but in a slightly different way.

Its no secret that merchandising sales is big business, from sports club to video games to Hollywood. The tried and tested merchandising game worked in a different way before. You make a fantastic animated film, develop a like-able character, market it till you drop and with soaring popularity go for merchandising to bring in the big money. The Buzz Lightyear is a great example of that. So the entire line extension and licensing game started with movies and ended with merchandising, tv show, games etc.

But the process that Pixar and then Disney crafted to perfection has reached a snag. The problem with this is the risk associated with it. It takes millions of dollars to make and market a movie with no guarantee that it will succeed. On the other hand it takes a few thousand dollars to create a fantastic mobile game/app with a like-able character. So its a better bet to create a mobile game based character, make to so addictive and popular that it creates a huge fan base and then make a movie which will be sure sell among the fan base and beyond. This is a better way of going. And the trend is catching on. Rovio, with its extremely popular Angry Birds game is following this reverse trend. The new game from Disney (Where’s my Water?) starring a love-able googly eye aligator called “Swampy” is already creating a huge fan base. The next logical step would be TV shows and movie. So the creator of the trend itself (Disney) has reversing the trend.

A new game of Activision (the gaming giant), called “Call of Duty: Modern Warfare 3″ set a record of earning $750 million in its first five days of launch; making it the most successful launch of an entertainment product ever. Its unthinkable for some that the biggest money-making launch ever in entertainment industry is not a movie or a book; but a video game! Comparing it to Harry Potter and the Deathly Hallows Part 2 (which is one of the record breaking and most successful movie launch of all time); the Harry Potter film earned only $169 million in its first weekend. Compare $750 million vs $169 million – and you can see who is clearly winning the war.

In the past two decades video gaming industry has off-loaded its small industry status and emerged as a $56 billion dollar industry. It has crossed newspaper, magazine and music in order to become the second biggest entertainment business; behind only movie. Now the movie numbers are inflated because it includes the DVD sales; which is driving the growth in film business. But even then, in a very short time video game industry has become three-fifth in size to the film industry and quickly closing that gap.

A lot has changed in gaming industry and the biggest strength of gaming industry is that unlike the other industries (Newspaper, music etc.) gaming industry embraced those changes and actually thrived on them. Going back, two launches probably shaped the industry future more than anything. One is the launch of Sony PlayStation back in 1994 which made video gaming an extremely adult affair and no longer a matter of kids and nerds. The second would be the launch of Nintendo Wii which made video gaming popular among women also. Amazingly, the average age of gamers is now over 35 and a significant percentage of them are women (to some extent biased number due to mobile games like Angry Birds which is very popular among women). With these two mega events behind, the majority of growth in video gaming is coming either from online games like Farmville and World of Warcraft. Or they are coming from mobile games like Angry Birds, made by a Finnish company called Rovio who houses only 55 employees. In a way, online and mobile is the future of gaming. Although gaming industry is still earning most of its money from selling console based games, the growth in future is coming from online and mobile.

The lesson to learn for modern marketer: Staying one step ahead of consumer trends, cooking up awesome innovations, adjusting to the rapid pace of technology and preference and ensuring cool execution putting consumer at the center of everything.

There is a cycle at work here.

1. Brands start out by targeting a core group of customers
2. As the brand increases in awareness and popularity, it starts to appeal to mass consumers outside its core group of consumers
3. As the time goes by and the brand proposition looks increasingly generic and old fashioned, the brand upgrades its look & feel and try make itself look younger and cooler.
4. As competition intensifies in their category, the brand understands that the only way to guarantee future growth is if they target young users.

Catch’em young and they will serve you for decades – that has been the mantra that brands live by. From Nescafe to Gap to Telenor – all brands upgraded their look & feel to make them more appealing to the 16-24 target segment. Disney just took the game even further. To prepare a new market for their products in an increasingly alien market like China, Disney has opened an English language teaching school in China which teaches Chinese babies how to speak English by using cool Disney items (Mickey Mouse etc.) as props. To them, that’s how you create a new market that future-proofs your business.

But there are three interesting reverse trends and opportunities thats coming out of it. Marketers need to be careful of this youthful makeover trend as it works as a trap as well.

1. As all brands are upgrading their look and repositioning themselves for youth, the brands that remain consistent without going through changes might all of a sudden become very successful. In an increasingly uncertain and changing world, the brand that remains true to its core proposition, look and feel – can become the anchor of stability that consumers may end up liking. Amul can be a great example as the core look and feel of the brand stayed the same for a better part of 25 years.
2. As all brands appeal to youth, the ones that are targeting other segments (i.e. Corporate, Senior Citizens) might profit by focusing in a relatively uncluttered field. Harley Davidson is increasing their business by steadily focusing on the increasingly older Harley users. While the whole telecom market was looking at youth, Blackberry slowly created the smart phone platform by focusing on executives.
3. As all brands try to attract youth by making their look and feel cooler; all brands may start to look pretty much the same; like all youth whose starting to look more or less the same with their messy hair-do, low cut jeans and converse snickers

We have been warned before in the management books – change is the only constant. So are we really caught off guard when the whole world all of a sudden started changing in the name of rebranding?

Maybe we are, because change is difficult to accept – no matter at what stage and situation of life we are. It has been even more difficult for pundits all over the world to understand, accept and get on board this rebranding bandwagon. Well they do have a case. Wasnt it the mantra of all branding to stay true to your positioning and deliver your brand message consistently through all touch point for a long period of time to build brand equity?

So the big question comes – in a game of change vs no change, position vs reposition – which one is the right way to go?

Like all things in life there is no simple and one-fits-all answer to that mind bending question. For brands like Anderson Consulting, rebranding into Accenture was the only way to survive. For International Business Machine to become IBM and then become a computer service provider is the only way to keep their business alive. For Airtel, changing their logo was the only way to show them as a modern, international brand rather than a local Indian brand.

So change is needed. Rebranding is a tool that we need to use, sparingly and carefully. But in the midst of all this changes, staying true your positioning may be even more important than ever. Does it make sense? Isnt that a bit contradictory?

I guess Madonna did it the best possible way. Throughout 80s, 90s and 21st century Madonna continued to reinvent and reposition herself from a symbol of raw sexuality to pop icon to fashion diva to spiritual maturity to controversy magnet. But through this entire journey Madonna didnt lose her soul which stayed consistent – which is the soul of a person who prefers to do things her way no matter what. That was her brand positioning. And through all the costume, cosmetic and genre changes; that positioning still holds true.

So there are three lessons to learn. We can learn that consistency, not swift changes, build great brands. We can learn that when everyone wants to be youthful, everyone looks strikingly similar which is a criminal act in the world of branding. But we can also learn that spotting when change is necessary and then acting on it is what keeps great brands great for a long period of time.

Marketing Idea No. 296: TV, TV on my wall….What show is the most disturbing of them all?

The idiot box has always been a source of intense debate. One school of thought says the excessive violence, sex, drugs and obsession with celebrity culture that is shown in TV is a main cause behind the moral decline of the society. The other group says, as a sign post of our collective thoughts, the job of TV entertainment is not to shape our behavior but to reflect it appropriately. Therefore if the society in general is embracing and cheering all things violent and crazy, the TV shows should naturally focus on that.

If we consider TV as a mirror that reflect us rather than a compass that guides us, what does this mirror say about us?

It says that the world since 9/11/2001 is not the same as we know. That’s why our TV is full of shows that focus on apocalypse or a dystopian world where humanity is destroyed by nuclear warfare or spread of a biological agent and then appears a messiah or super hero as an unlikely savior of the day from the zombies or vampires. It says that we are pretty distressed with our life in general and only way we feel superior to other people is by judging them constantly and pulling them down below us; a trend which has given rise to Reality TV shows like American Idol or shows that reflect the vanity of celebrity lifestyle like Keeping up with Caradashians. It says that in a world of temptations and complexity, the line between good and evil are getting blurred and not everything can be categorized as black or white. That’s why our traditional heroes and leading men are all becoming Anti-Heroes: flawed, dark, brooding, intense, and occasionally bad like Breaking Bad, Mad Men, Masters of Sex, The Arrow, The Newsroom, House of Cards, House of Lies, Boardwalk Empire and many many more. It says that we have a yearning to seek for authenticity and simplicity as we are growing tired of all the repercussions of excessive materialism. That’s why Travel and Cooking related shows presenting both fantasy and escapism are growing faster now than at any time in history. TV says that our trust in authority is at all time low. That’s why we have obsession towards fixers or strong men who can twist an arm and leg to get their way like the characters do in Homeland, House of Cards, Scandal, Ray Donovan etc.

Not all things in TV tells a dark story. Take the case of TV comedies. The famous TV comedies of current days tell us about the apathy that we feel towards workplace. That’s why a lot of comedies these days like The Office, Parks & Recreations, and Brooklyn 99 etc take the absurdities of workplace behavior as a source of biting comedy. Lets dig one step deeper and look at the characters and how these characters are fleshed out to relate to us. In most cases, the leading men in these comedy shows are a “Cool guy who refuses to grow out of his man child antics or frat boy days” (Ref: Brooklyn 99, How I Met Your Mother, Scrubs etc.). It shows a collective yearning among today’s youth to not take responsibilities of life and consider entering adulthood as the end of all things good. In these shows the young characters almost always hang out together in a bar or café with their friends (i.e. Friends, Sex & The City, New Girl, Happy Ending) showing our intense desire for the bygone days with a strong nostalgic tinge, where friends where always there, life was simple and there was no fear of missing out.

In an interesting study, Lauren Zalaznick collected the top 10 shows as per Nielsen Ratings since 1960 till now and measured it against three key viewing parameters – Comfort (Watching the TV show to feel good or entertained), Social commentary (Watching the shows to know about the social issues that affect my world) and Irreverence (Watching the shows to challenge the existing norms). When we start plotting the points in the charts, we see that in the 60s and 70s we saw TV mainly to comfort us. But as the world grew more restless, our tendency to look at the idiot box to give us discussion fuels than basic comforts and entertainment increased. Our collective conscience is getting crowded with dark thoughts. So are our TV Shows.

Marketing Idea No. 295: Internet didn’t kill the Book Author

The paper based book industry is dying. We are just counting it down to its last breath.

At one point or another, everyone got into this band wagon of doomsday. The writing was on the wall for some time. But the global book industry is anything but dead. The advent of technology didn’t kill it. If anything, technology helped it to grow.

The analogy with music industry is understandable but misguided. The death of record label was mostly due to industry changing disruption like consumers looking for one single song, not the whole album. The record labels usually pushed artists to come up with different styles of songs for one single album in the hope that different songs will appeal to different people, hence more sales. But consumers eventually outsmarted the record label, and much of the credit goes to the eco system that Apple came up with.

But Book is a much tougher cookie to fight. There is still no significantly increasing demand for book summary, as sold by websites like Getabstract, compared to the book itself, showing that the analogy with music industry is not true for books. Books are also surprisingly simple and efficient. It comes with light packaging, easy to hold, needs no recharging, attractive to look at, can be an wonderful gift and like any other successful brand portrays a certain image about the person who purchases it. For e-books, to overcome such a formidable adversary is not proving to be easy. In 2010 Simon & Schuster predicted more than 50% of its global sales will be e-books. It turned out to be only 30%. In Germany, only 5% books sold last year were e-books. In fact all over the world e-book sales have been decreasing in growth rate.

The twist of the tale is how technology has actually increased the scope of book business. The self-publishing boom has actually liberated a generation of authors to bypass any sort of publisher and direct publish and sell his books through Amazon who will only keep 30% of the revenue. In America, as much as 25% of all books who got an ISBN in 2012 are self-published.

Technology is also helping publishers to sell regular books more by making all sorts of data available. HarperCollins for example found out that when it discounts backlist books, around 10% consumers buy another title from the same author. Another way Technology is helping is through the creation of Audio Books. The cost of audio books creation has fallen from approximately $25,000 to $3000. This has helped to market books to another very important segment: Children.

The impact of collaboration and crowd funding has also helped book industry. In February 2014, a young woman raised $380,000 through Kickstarter for a children’s book called “Hello Ruby”. Another crowd funding site called Unbound has already helped produce a novel called “The Wake” which was in the list for the 2014 Man Booker prize in fiction.

Today if you have an idea about a book but no fund or no time to write, you can go to internet to find both. That’s why, the future of book, as it stands, is much brighter than many people think.

Marketing Idea No. 294: Our love affair with “Brainstorming” and why there is always heartache at the end of this rainbow

In a famous book published in 1948 called “Your Creative Power”, Alex Osborn, a partner in the legendary advertising agency B.B.D.O. talked about a mysterious, never heard before process regarding “How to Organize a Squad to Create Ideas”. He mentioned that when a group tackles a creative problem, all the members should engage in this process called “brainstorm”, which as per his definition means “using the brain to storm a creative problem – and doing so in commando fashion, with each stormer attacking the same objective.”

The first empirical test of brainstorming technique was performed in Yale University in 1958. Forty-eight male undergraduate students were divided into twelve groups and given a series of creative puzzles and asked to follow the brainstorming technique identified by Osborn. The results told them what all of us who ever participated in brainstorming meetings (Which is everyone who ever worked in any sort of organization) already knew for some time now: students individually on their own came up with roughly twice as many solutions compared to the groups who participated in the brainstorming, and on top of that an independent panel of judges deemed the individual member’s solutions more “feasible” and “effective.” In fact, generations of research performed in research lab all over the world in the last 50 years consistently proved that brainstorming doesn’t unleash the creative beast, they just collectively make us a lot less creative than we actually are as individuals.

Brainstorming has a lot of built in issues which deters it from reaching its original goal

1. “As sexy as brainstorming is, with people popping like champagne with ideas, what actually happens is when one person is talking you’re not thinking of your own ideas,” said Leigh Thompson, a management professor at the Kellogg School in an interview with Fast Company magazine. Instead sub-consciously you’re already assimilating to other people’s ideas. This process is called “anchoring,” and it crushes originality.
2. As per Loran Nordgren, another professor in Kellogg, in brainstorming early ideas tend to have disproportionate influence over the rest of the conversation”. Since brainstorming favors the first ideas, it also breeds the least creative ideas, a phenomenon called “Conformity pressure”. Participants in desperate need to look intelligent and working against a ticking clock with the moderator shouting out how only 15 minutes are left to come to a consensus, often put the most obvious ideas first and then everyone else rally around that idea to get it done in time.
3. Research shows that in traditional brainstorming, one or two loud mouths usually do 65-70% of the talking. Therefore, the supposed team work is often the output of a few of the more extroverted, dominant personality in the group
4. Brainstorming is most often used to answer “Poorly structured questions” (Questions that doesn’t have an obvious answer, needs more creativity to come up with one and doesn’t have a well-defined step by step process to follow to come up with that illusive answer). But actually research shows that Brainstorming is better to find answers to “Well-structured questions” rather than “Poorly structured questions” (i.e. finding name of a new product), as the later requires more creativity and hence better to be tackled alone.

 

As per Paul B. Paulus, psychologist at the University of Texas at Arlington, “There’s plenty of rain in the storm. That is, plenty of ideas falling from the sky. But there’s not much lightning — the exceptional ideas that have the potential to set things on fire.”

If Brainstorming is indeed not as effective as everyone thinks, why this universal love affair with it?

Because Brainstorming is status quo. Its sexy and fun. It goes in tune with the whole organizational trend of doing everything in teams and collaboration. In short, its another organizational bullshit that is passed on unchallenged. Somehow, human creativity has become a group process. There has been much debate in recent times about the role of individual genius vs a team in creativity & innovation. One school of thought is the lone researcher burning midnight oil to find out a Eureka moment is overstated and practically a myth. Creativity works well when a group is tackling the process together, bouncing ideas of each other in a sort of free-wheeling exercise. The other school of thought preaches “Solitude as the catalyst for innovation”, citing examples of hundred years of creativity generated by individuals working on their own, undisturbed by e-mails, team building, meetings and other pressing group dynamics.

The researchers from Kellogg and Arlington mentioned earlier in this write up came up with a technique called “Brain writing” as an improvement over Brainstorming. In the newly designed “Brain writing” process, people first think on their own and write down their ideas. Then everyone comes together to share those ideas, either verbally sharing them or write them in a wall without attaching their names to it. Then everyone votes on the idea, without getting influenced by who came up with it or how much each idea dominates the discussion; but purely based on the merit of the idea itself in solving the issue in hand. In the subsequent studies, it was found out that this “Brain writing” process generates much more original ideas than the typical “Brainstorming”.

This doesn’t mean that the world is ready to move on from Brainstorming. Unfortunately, until we come to that day when we realize and question the times and resources wasted in such useless “Brainstorming” exercises, thousands of bored, zombie-like brain will continue to storm.