12/10/2007

Dead Brand Walking

Palm_pilot Last weekend I was walking through Washington's Union Station when I saw the Palm Store and decided to pop in for a visit. It's hard today to remember just how innovative Palm was during its mid-90s heyday. Also difficult to reconcile the tepid offering on display at the Palm Store with the, revolutionary spirit of the original Palm Pilots. Just after Apple failed with its Newton handhelds, Palm brought a device to market that was simple to use, elegantly designed and, most import of all, unlike anything else.

These days, Palm can't get a break. Earlier this year it squashed its Foleo product before ever bringing it to market. The stock price has fallen by 2/3 since that announcement. On Friday, the company announced that it would miss earnings expectations because of certification delays with a new product (likely the "yawn-worthy" Treo 755p for Verizon Wireless). As is the way with these things, even the good news is bad news; Palm's budget-minded Centro has been selling well, but its slimmer margins have further hurt the financial picture.

Trying to think about what I would do with Palm is a challenging thought experiment. The company is surrounded by a mean gang of competitors, both for business customers and consumers. It's clear that in order to survive, Palm needs to make some quick decisions on what its going to be...the company no longer has the luxury or the scope to be a broad-ranging player.

Centro's positioning as an entry-level smartphone is not a bad one considering the space. However, it will need to do more than simply be a Junior Treo if it is to compete with the Sidekicks, Helio Oceans and next gen iPhones.

One difficult decision (that should have been made two years ago) is the OS. Consumers are not willing to make handset decisions and operating system decisions separately, nor should they be. Job one: figure out which operating system to go with (Win Mobile, Palm Garnet or Linux) and stick with that decision.

All hope is not lost. The Palm brand still has some gasps of life in it and in today's short-memory marketplace, product innovations trump all else. The company's record of waffling and making really stupid decisions doesn't give a lot of hope, but perhaps the smart folks at Elevation Partners can bring in some tough love. Palm needs it. 

Posted by Michael Megalli on December 10, 2007 in Brand volatility, Digital lifestyle, Technology | Permalink | Comments (0) | TrackBack

11/28/2007

Mutual of Omaha's Wild Media

In my post yesterday, I mentioned that the writers' strike would give corporations an opportunity to explore alternative advertising approaches. A friend of mine responded to my post wondering if we were going to see a return to "the days of 'Mutual of Omaha's Wild Kingdom'?" Certainly looks that will be one of the models. This article from The Hollywood Reporter article mentions Johnson & Johnson funding an after-school type program for its Accuvue brand. I think you'll see a lot of brands funding entertainment content that is directly targeted to their core audience.

Ultimately, from an entertainment perspective, you can envision a world in which all content is available on-demand (you know, like it is on the Internet), supported by a brief advertisement like this (or something similar). I would hope this has all of the interested parties - the networks, movie studios, and cable providers, to name a few - shaking in their boots and looking for a way to participate in the obvious future, rather than impersonating an ostrich and sticking their head in the ground like the music moguls.

Isn't it inevitable that the television simply becomes akin to an all-you-can eat buffet, pulling content from a million sources, rather than a pre-set menu prepared by the mediocre chefs at NBC Universal, Viacom, and Disney and delivered to your table by those ill-tempered waiters at Time Warner, Cox and Comcast?

Suggests some interesting questions:

How long before cable companies become nothing more than ISPs?
If they can't charge exorbitant fees for access to their slate of channels and to use their inadequate set-top boxes, they become little more than an ISPs with a good set of pipes. Which brings up a corollary question: How long before those pipes become totally unnecessary?

Do the studios have any value beyond the intellectual property they already have?
If the control of content is wrested from the studios, what value do they provide? They've got some big studios they could rent out. And, presumably, a lot of cameras and lighting and what-not. But with production increasingly happening on location and the cost of technical production going down, that's not much value. What they do have is all the stuff they created in the past. In the case of Disney, they have power of their characters, their back catalog, their brands and their creative departments. They've basically got Mickey Mouse, The Little Mermaid, ESPN and Pixar. A lot, to be sure, but it certainly isn't the impenetrable wall they have today.

What happens when that wall comes down?
You can certainly see how some of those media properties become less valuable in the future. What happens when the NFL doesn't need to deal with the cable companies or distribute their product through Disney's ABC Sports and ESPN anymore and simply can instead offer their games (all of them) on a pay-per-view, on-demand basis? Could this be what the NFL is thinking with its much maligned NFL Network? Remember: the NFL didn't get to be the juggernaut it is by playing softball and being stupid. Don't you think the NFL (in this case, the content creator) would jettison these partners immediately if they could charge a small fee to customers to watch the games or keep all of the ad revenue for themselves (or both)?

Play that scenario out with any piece of content. Was that James Dolan that just fainted?

Granted the NFL is the NFL. But what happens when a venture capitalist and a small production group get together and create the next Heroes? Do you think they'll be running to sign a distribution deal with NBC or trusting that the inherently viral nature of the Internet will take care of that pesky issue for them?

Will all of this make search and social networking even more important in the future?
If the TV becomes an empty vessel for endless content, the viewer has to find what they want, right? Google made finding content easy. Apple made finding and acquiring music easy and legal. Facebook and myspace have made internet communications more personal and fun. Won't some combination of this become the new interface for that empty vessel formerly known as the television set?

So much for TV Guide.


UPDATE: Is TiVo making a move?

 

Posted by Todd Merriman on November 28, 2007 in Customer experience, Digital lifestyle, Marketing communications, News, Technology | Permalink | Comments (1) | TrackBack

11/22/2007

The Zune Brand

Zune I received my new 8GB green Zune yesterday. The product has been reviewed extensively, here, here and here, but I wanted to post about improvements to the brand. (Disclosure: Microsoft is a 1066 client, although we did not work directly on the Zune branding).

The first manifestations of the the Zune brand felt over-stated and clumsy. The announcement videos were so far out as to be unapproachable. The awkward "Welcome to the Social" tagline was a well-intentioned attempt to differentiate based on the innovation of wireless sharing. But when this functionality fell short of expectations, mostly due to the 3 plays/3 days DRM limitation, there went the brand differentiator.

The newest brand positioning is less ambitious and ultimately far more successful. I'll admit that when I first saw the ads I was a little skeptical of the "You make it you" concept. Patrick Daughters' trippy, down-the-rabbit-hole advertising was beautiful, but ultimately a every good value proposition must be based on real value. I wondered if "making it you" was a big enough promise. The execution of the brand in the customer experience has convinced me that it does.

The Zune Originals idea is brilliant, simple and flawlessly executed. The range of artists commissioned, the quality of the illustrations and the pleasingly tactile end result all amounts to a very satisfying and unique brand experience. By giving the customer a hand in the creation of the product, the "make it you" idea is paid off very well. I can't think of a more successful mass customization of a consumer electronics product.

A recent visit to the Zune "store" within my local Target felt more like the Zune v1 branding, but with a much better line-up of accessories and better product displays.

Microsoft knows that it is facing an uphill battle against iPod/iTunes. In this second act the Zune team has hit upon a brand concept that both complements the Microsoft brand and serves to differentiate against the established player. The challenge now will be to sustain the brand over time and resist the urge to go into continual reinvention mode.

Posted by Michael Megalli on November 22, 2007 in Branding, Digital lifestyle, New product launches | Permalink | Comments (0) | TrackBack

11/20/2007

Kindle or kindling?

The entertainment world has been transformed by digital technology. Television has been reinvented by digital video recorders. Apple is now the most significant music company in the world. It's hard to find a field of entertainment that hasn't experienced some kind of upheaval with the emergence of convenient digital technology. Every field, except books, of course. Consumers just haven't jumped at ebooks the way they did iPods.

Amazon thinks its new wireless reading device called Kindle is going to succeed where others have failed. But at $399 will consumers toss aside their paperbacks and embrace ebooks? Amazon seems to be betting heavily that they will given the prominence of the launch and the marketing support behind it.

Amazon's got a number of obstacles to overcome beyond the high price tag. Kindle is being called the iPod of the ebook market, but Apple succeeded with iPods for a couple of reasons that aren't necessarily true of Kindle.

First, there was a built-in market. Digital music consumption was growing independent of the availability of quality players and convenient (and legal) music sources. The iPod's success was as much a function of iTunes, which made finding your favorite music easy, cost-effective and legal, as it was of the simplicity and appealing look of the device itself. It's not clear that there's much of a market for ebooks. Amazon's basically trying to create a market whereas Apple created a superior product and improved the distribution system in an existing one. Amazon faces a much stiffer challenge here.

Second, music is a much different product than books. Music does not really have structure. The CD had already more or less destroyed the aesthetic appeal of records. Cover art, liner notes and other non-essentials had been sufficiently marginalized by the time digital music arrived. Consumers were quite willing to trade a large CD collection for a single device which would allow them to play whatever song they want wherever they want - at home, in their car, on a jog, whatever.

Books are much more complicated. They are essentially content, yes, but the physical appeal of books is far more significant. The touch of a book, the effect of the paper on your eyes, the font on the page, all of these aesthetic qualities are a major part of the book reading experience. If there were demonstrable value in having access to myriad books at one time (as there is in having access to one's entire music collection) it might be enough to overcome the emotional connection a consumer has with a book. But apart from the convenience of having a multiple books at your disposal on a long vacation, there aren't many instances where a consumer really needs access to all the content Kindle provides.

The Kindle does offer a number of useful features. An owner can sample books before buying. He or she can have top magazines and newspapers delivered directly to the device and access top blogs. But other devices, most notably, cell phones allow you to access many of these sites as well.

I suspect digital books will one day find their niche; it seems inevitable. If Amazon is betting on them becoming mainstream in the same way the mp3 player has... well, let's call that a longshot. I just don't see that many people spending that kind of money for something with pretty minor utility.

Posted by Todd Merriman on November 20, 2007 in Digital lifestyle, New product launches | Permalink | Comments (0)

03/08/2004

Marketing to the Poor

Knowlege@Wharton has an interesting review of a new marketing book called The Fortune at the Bottom of the Pyramid by U Mich prof C. K. Prahalad.

Prahalad argues that global corporations need to revise their ideas about marketing to the world's poorest citizens: not only can these people be a valuable target, but showing up on corporations' radars will boost their upward mobility as well. In short corporations can "do well by doing good".

As the reviewer points out, marketing to the poor has inherent challenges:

They usually lack regular cash flow, have little access to credit and live in rural villages or urban slums that make traditional methods of advertising and distribution difficult, if not impossible. Most of the people at the bottom of the pyramid are part of an informal economy.

The argument is an interesting one and in many ways is the logical extension of the runaway success of microcredit programs (a kind of micro-consumption). The whole thing does seem a little ridiculous, of course. We are not talking about plasma screen TVs here, but basic goods like salt, soap and cement. As anyone who has spent time in the developing world can attest, there is no shortage of low-end marketing of these basics to both the rural and urban populations.

Posted by Michael Megalli on March 8, 2004 in Digital lifestyle | Permalink | Comments (0)

02/24/2004

Piracy a Competitive Advantage?

The Economist points to a recent article in the International Journal of Research in Marketing which suggests that software companies shouldn't necessarily assume that some piracy of their software is such a bad thing. The authors of "How many pirates should a software firm tolerate?" argue that software piracy can help to drive adoption rates. Seems like a pretty spurious argument, but we will reserve judgment until reading the whole of the text.

Posted by Michael Megalli on February 24, 2004 in Digital lifestyle | Permalink | Comments (0)

01/27/2004

Davos Cliff Notes

Get the world's richest, smartest and most powerful people together for 3 days and this is what they talk about.

Posted by Michael Megalli on January 27, 2004 in Digital lifestyle | Permalink | Comments (0)

11/26/2003

Science and Branding

The most recent McKinsey Quarterly has an interesting article called Better Branding.

The piece gives a good overview of the firm’s thinking on brand building and how it needs to change to meet today’s demands. The thesis rests on the idea that by using “forward-looking” predictive market segmentation to plot where the market is going, marketers can build stronger brands.

The opportunity for marketers is that they “can eliminate much of the guesswork by applying social-science techniques to identify the underlying brand attributes driving loyalty among specific customers.” Once identified, these attributes can be targeted with specific brand building activities.

The argument is appealing and hope reigns supreme. Coming from McKinsey, it also has inherent credibility.

However the authors make a fundamental assumption that customers know what they care about. Under this assumption, effective marketing simply is a matter of taking the time (and having the help) to go out and find what it is that is making people happy and sad and then re-configuring yourself to have more happy-making attributes than sad-making ones.

We don’t buy it. Marketing is about selling products and services. Really great market segmentation and research (forward-looking or not) will always be a critical input to the process. It makes sense that McKinsey would want to take a quantitative approach to the process of brand building (although they insist that this is not “just” a quantitative exercise). However the magic fairy dust required for a transcendent brand, can’t be a scientific equation. Hollywood may increasingly use market testing to see how appealing aspects of a movie or an actor, but for the time being they still have to make movies themselves.

If you want a great example of what this approach is really great for, check out their Branding Cars in China. If you were about to try and break into the Chinese automotive market, you would want these guys on your team. But would that be enough?

Posted by Michael Megalli on November 26, 2003 in Digital lifestyle | Permalink | Comments (0)

11/10/2003

Strategic Planning?

The McKinsey Quarterly has an interesting article about Strategic Planning which posits that most companies' planning efforts require far more in energy than they produce in results. One person interviewed likens the process to “some primitive tribal ritual” with “mystical hope that something good will come out of it”.

As anyone who has been involved with the planning initiative at a major company can attest, the process is grueling and often feels de rigueur as opposed to vital.

The McKinsey report offers some good advice on how to set realistic goals for business unit planning (“formal planning is not where strategy is made”) as well as knowing what initiatives to centralize.

Another major point is building environments where "creative accidents" are more likely to happen. Umm. We’re no longer sure what “creativity” means in the corporate context. For all of the talk of “thinking outside the [goddamned] box” most companies that we come across are way far away from providing the type of environment where anything resembling creativity can flourish. If someone could write a prescription for a real revolution in corporate creativity, strategic planning probably take a backseat.

Posted by Michael Megalli on November 10, 2003 in Digital lifestyle | Permalink | Comments (0)