Since the Inquirer is not publishing a column this Friday, here's a redux of a recent column on Branding Tech products. Have a safe and holy Easter break!
Q: We're not a marketer of consumer products like laundry soap or shampoo. We're a dealership chain of technology products like laptops and mobile phones (iincluding their servicing.) So we're marketing brands like Acer and HP for laptops, and Nokia and Samsung for mobile phones. In a supermarket, consumers shop and choose between, for example, a Surf or an Ariel for a detergent, and a Sunsilk or a Palmolive for a shampoo. These are brands of different multinational companies like Unilever, P&G and Colgate-Palmolive.
In our case we sell the company brand such as Acer, HP, Nokia, and Samsung. Acer has different laptops but we sell them as Acer not as Acer 5620. In the same way, we sell Nokia as Nokia and not as N-70, which is one of its variants. Our newly hired marketing director who came from Nestle recommended that we should brand the different variants of Acer and HP laptops as well as the different Nokia and Samsung mobile phone products. Everyone in the office rejected the idea saying that ours are technology products and they're all selling well as an Acer, an HP, a Nokia and a Samsung. The guy countered and said: "Can you imagine how much more they will sell if they are branded?"
Is this true? Aside from claiming increased sales and assuming that our principals will allow us, is there some other more convincing reason why we should brand a technology product? What does your branding experience say about these questions?
A: LET'S START WITH A FEW NECESSARY CLARIFICATIONS. "Surf," "Ariel," "Sunsilk" and "Palmolive" are product brands. On the other hand, "Acer," "HP," "Nokia," "Samsung," "Unilever," "P&G," and "Colgate-Palmolive" are corporate brands.
In the branding circle, the likes of Unilever, P&G and Colgate-Palmolive are known to practice what David Aaker in his 2004 book on Brand Portfolio Strategy, called the "house of brands" strategy to brand architecturing. Each of these FMCG (fast moving consumer goods) companies has several product brands under a given product category. For example, Unilever has several shampoo brands like Sunsilk and Clear. Most often, consumers are more familiar with the product brand like Sunsilk than with the corporate brand that owns the product brand as in the case of Unilever, owner of Sunsilk.
In the case of Acer, HP, Nokia and Samsung, the brand portfolio strategy adopted is known as the "branded house" approach. Here, the driver brand is not the product brand but the corporate brand as in the case of most technology products and companies.
Two exceptions
However, according to Professor Mohanbir Sawhney of Kellogg School's Center for Research in Technology and Innovation at Northwestern University, you should note at least two exceptions. The first is where the technology company created brands that were very product-specific. Such a case actually forced the company in question to adopt less descriptive brand names and to resort to acronyms. Well-known examples include BARCO from the original Belgian American Radio Co., 3M in place of Minnesota Machinery Manufacturing, and IBM instead of International Business Machines. These companies have experienced speedy evolution as well as frequent transformations of their original product category into new and radically different categories.
Just look at the history of IBM and its product's evolution and transformations. In 2004, business newspapers reported that IBM has started promoting its brand in the emerging market for the software of business processes on demand even when this was still in its infancy. This was just the latest in the relatively quick succession of product generations that IBM had experience through the last 3-4 decades. IBM survived and maintained its leadership from one adoption cycle to the next by showing its resiliency and readiness to quickly adopt.
Short-lived
Because technology products move speedily through the adoption life cycle, branding favored the corporate brand more than the product brand whose product category is relatively short-lived. This is in sharp contrast to, say, Colgate that for decades has been in the toothpaste category. It's rare to see a technology brand that is closely associated with specific a product category. The association is with the company and therefore the corporate brand.
Meaningless brand names
The second exception to consider is the set of technology companies who intentionally adopt meaningless brand names. These companies have 2 reasons for doing this. The first is the more compelling. These companies know that their business and original product will quickly evolve into better next-generations and/or morph into a different or even entirely different business and product. So why allow the product to drive branding?
The second reason is related to the first. Adopting a meaningless brand name is easier to get target customers, over time, to learn the meaning that the company wants it to have. That's a matter of repeated exposure. Learning a changed or a new meaning because of the migration into a new category is also a matter of repeated exposure. Which corporate brands belong to this practice? Corporate brands like Xerox, Kodak, Cisco, Adobe, eBay are cases in point.
The foregoing should give you the basis and sources for answering and guiding your newly hired marketing director from Nestle. He's probably misguided in believing in the universality of what he learned about branding at Nestle.
Q: We're not a marketer of consumer products like laundry soap or shampoo. We're a dealership chain of technology products like laptops and mobile phones (iincluding their servicing.) So we're marketing brands like Acer and HP for laptops, and Nokia and Samsung for mobile phones. In a supermarket, consumers shop and choose between, for example, a Surf or an Ariel for a detergent, and a Sunsilk or a Palmolive for a shampoo. These are brands of different multinational companies like Unilever, P&G and Colgate-Palmolive.
In our case we sell the company brand such as Acer, HP, Nokia, and Samsung. Acer has different laptops but we sell them as Acer not as Acer 5620. In the same way, we sell Nokia as Nokia and not as N-70, which is one of its variants. Our newly hired marketing director who came from Nestle recommended that we should brand the different variants of Acer and HP laptops as well as the different Nokia and Samsung mobile phone products. Everyone in the office rejected the idea saying that ours are technology products and they're all selling well as an Acer, an HP, a Nokia and a Samsung. The guy countered and said: "Can you imagine how much more they will sell if they are branded?"
Is this true? Aside from claiming increased sales and assuming that our principals will allow us, is there some other more convincing reason why we should brand a technology product? What does your branding experience say about these questions?
A: LET'S START WITH A FEW NECESSARY CLARIFICATIONS. "Surf," "Ariel," "Sunsilk" and "Palmolive" are product brands. On the other hand, "Acer," "HP," "Nokia," "Samsung," "Unilever," "P&G," and "Colgate-Palmolive" are corporate brands.
In the branding circle, the likes of Unilever, P&G and Colgate-Palmolive are known to practice what David Aaker in his 2004 book on Brand Portfolio Strategy, called the "house of brands" strategy to brand architecturing. Each of these FMCG (fast moving consumer goods) companies has several product brands under a given product category. For example, Unilever has several shampoo brands like Sunsilk and Clear. Most often, consumers are more familiar with the product brand like Sunsilk than with the corporate brand that owns the product brand as in the case of Unilever, owner of Sunsilk.
In the case of Acer, HP, Nokia and Samsung, the brand portfolio strategy adopted is known as the "branded house" approach. Here, the driver brand is not the product brand but the corporate brand as in the case of most technology products and companies.
Two exceptions
However, according to Professor Mohanbir Sawhney of Kellogg School's Center for Research in Technology and Innovation at Northwestern University, you should note at least two exceptions. The first is where the technology company created brands that were very product-specific. Such a case actually forced the company in question to adopt less descriptive brand names and to resort to acronyms. Well-known examples include BARCO from the original Belgian American Radio Co., 3M in place of Minnesota Machinery Manufacturing, and IBM instead of International Business Machines. These companies have experienced speedy evolution as well as frequent transformations of their original product category into new and radically different categories.
Just look at the history of IBM and its product's evolution and transformations. In 2004, business newspapers reported that IBM has started promoting its brand in the emerging market for the software of business processes on demand even when this was still in its infancy. This was just the latest in the relatively quick succession of product generations that IBM had experience through the last 3-4 decades. IBM survived and maintained its leadership from one adoption cycle to the next by showing its resiliency and readiness to quickly adopt.
Short-lived
Because technology products move speedily through the adoption life cycle, branding favored the corporate brand more than the product brand whose product category is relatively short-lived. This is in sharp contrast to, say, Colgate that for decades has been in the toothpaste category. It's rare to see a technology brand that is closely associated with specific a product category. The association is with the company and therefore the corporate brand.
Meaningless brand names
The second exception to consider is the set of technology companies who intentionally adopt meaningless brand names. These companies have 2 reasons for doing this. The first is the more compelling. These companies know that their business and original product will quickly evolve into better next-generations and/or morph into a different or even entirely different business and product. So why allow the product to drive branding?
The second reason is related to the first. Adopting a meaningless brand name is easier to get target customers, over time, to learn the meaning that the company wants it to have. That's a matter of repeated exposure. Learning a changed or a new meaning because of the migration into a new category is also a matter of repeated exposure. Which corporate brands belong to this practice? Corporate brands like Xerox, Kodak, Cisco, Adobe, eBay are cases in point.
The foregoing should give you the basis and sources for answering and guiding your newly hired marketing director from Nestle. He's probably misguided in believing in the universality of what he learned about branding at Nestle.
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