Too Much Touch
Our favorite handset maker, HTC, may be painting itself into a brand corner, WM Experts calls out today. The company has a slew of new products coming to market, including a highly anticipated Android phone. And yet they may be relying a bit too heavily in the Touch ingredient brand.
Named for the gorgeous TouchFLO interface, the Touch brand is being slapped onto every new phone that the company has in its pipeline. Its all too common a marketing mistake--create a solid product or ingredient brand and then "love it to death". Moto's RAZR is the classic example of the risks inherent in this approach.
The situation is particularly problematic for HTC because they have built so little equity into their product brands that the ingredient becomes a key (and ultimately meaningless) product handle. Their announcement May 6 in London should shed more light on their plans.
Yesterday Motorola released disappointing earnings news and saw its stock drop to 2003 levels. The precipitous declines are being blamed on weakness in the company's mobile handset portfolio and the strengthening of competitive pressure from stalwarts like Nokia and newcomers like Apple.
And yet, competitive pressures notwithstanding, it seems that Motorola is its own worst enemy. Since 2003 when the company launched the enormously successful RAZR phone, its been in a kind of paralysis. Motorola, it seems, is allergic to success.
We've seen this before from Moto. Remember the StarTAC? Motorola's innovative, and chicly diminutive, clamshell phone which won high marks for its stylish design and quickly became a high tech status symbol? As you might recall, Motorola sold a lot of StarTACs in the years following its 1996 release--so many in fact that it became incapable of imagining a post-StarTAC world.
Well, history is repeating itself. This time around Motorola has released alternatives to the RAZR, but it has RAZR'ed them all to death. Looking through the company's phone portfolio, one can't help feeling like a dyslexic kid during finals week: RAZR, ROKR, KRZR, SLVR, RIZR. Is it a product naming convention or a cruel joke? This is not to mention the vagaries of the sub-brand modifiers; V3i, V3xx 3G, Z6tv, etc.
Clearly Motorola needs to come up with some radically new phone designs if it is going to remain a serious competitor in the tough neighborhood of Apple, Nokia, Samsung, HTC, LG, Sony Ericsson. But it needs to do something else. It needs to realize the consumers are under a siege of choice. They don't have the time, energy or interest in unpacking an impenetrable, highly-coded product portfolio in order to feel assured that they are getting the product that best meets their needs.
Just got back from a couple of dazzling hours at the NY Auto Show. These shows are all overwhelming, but the auto show takes the prize.
Now as a company, we don’t do any work in the car business, but it sure is fertile ground for extremely interesting marketing work. Outside of the car show itself, I tend to think of car marketing as a never ending supply of pretty television ads replete with requisite shots of cars moving quickly through the great outdoors.
When you go to the car show, however, the whole picture changes. Right there on display is the bulk of the manufacturer’s product line. This is a pure brand experience. Not only do you witness the innovation (or lack of innovation) in the design, but you immediately are exposed to and influenced by the public’s response as well. The result is that you very quickly form an opinion about “who’s hot and who’s not” and once established, it is difficult to shake this opinion.
A few of observations:
Cadillac’s rebirth is complete – in two years, they have been able to completely and convincingly re-create one of the biggest car brands in the world. It is extraordinary to see
Hitting the Trail
Kelty is a company we like for its products that feel and work great and a portfolio that is, for the most part, fairly easy to understand. Unlike many companies we see, product naming makes some sense. For example, the 2000 in "Blanca 2000" refers to the pack's volume of 2000 cubic inches. Still, customers find a bit of a name soup: Blanca, Redwing, Haiku, Trident, Creel, Eagle, Firefly, Gigabyte.
And so we wonder whether there isn't an opportunity for Kelty to live up to its promise to "make it easier for friends to enjoy the wilderness" by making it easier for its friends to navigate the portfolio. Kelty says it now has a lot more friends (we agree!). It also has a lot more products.
Why Product Portfolios Matter
Sometimes people ask us why we feel that a company's product portfolio has such an important impact on the brand. We just found the best example we have seen in a while of a terrible product portfolio move: Intel's announcement on Prescott.
American Girl is a great example of a company that takes a relatively mundane (and in this case seemingly anachronistic) product -- the doll -- and uses smart marketing to give it new relevance.
The company frames this in a mission to “reinforce positive social and moral values” and “build self-esteem”. Who wouldn’t want that for their child?
With the American entertainment powerhouse in force, we are accustomed to companies that make money creating stories: Disney, Miramax, Viacom, the list goes on. We are also familiar with the products that are merchandised secondary to these stories (for those of us who are parents, we are a little too familiar with these).
American Girl is something different. Each of the company’s dolls is marketed with "a story to tell that’s all her own”. The dolls have personalities and these personalities give them their appeal.
Meanwhile, American Girl is selling a lot of dolls.
You've Got Questions. We've Got Questions.
For retailers, product portfolios are the brand. We used to have two RadioShacks within three blocks of our office. We would go in looking for batteries, braced up for a high-pressure pitch to buy a new wireless plan. Now, no more RadioShacks in the neighborhood. Too bad, the battery selection was great.
RadioShack makes half of its profits, and a quarter of its revenues, selling cell phones and wireless plans. But what is the cost? The market for wireless is mutton-mature, the competition is chilling and telcos themselves have better brand platforms for selling their own services.
We have been worried about you RadioShack!
The old standby wants to become "more of a leader than a follower" according to VP Andy Berman by helping inventors who need help with funding, manufacturing and distribution. The plan is part of the company's new Business Innovation Team and was supported by a recent summit with electronics developers.
We’d love to see this work. The idea here is fantastic. More companies need to consider taking a “bottom up” approach to re-inventing their brands (rather than spending millions promoting meaningless fictions). But if this is going to work, it’s going to require more than some partnership announcements. We have many associations with the RadioShack brand, none have anything to do with innovation. We buy the batteries somewhere else now, and we need some reason to come back.
Our local furniture store is closing. For a week now there has been a guy with a sandwich board at the corner of the street advertising "Everything Must Go!". It is, perhaps, the only consistency in the store's marketing to date.
The major retailer, whose name will go unmentioned for the sake of not kicking a man when he is down, promised hand-crafted, solidly-built furniture. Promised. The reality was a little different: wobbly tables and chairs that, after less than a year, kept coming unglued. When we took the chairs back to see about a refund or replacement we were told "oh, those chairs, yeah, we've always had trouble with them! You can write the company headquarters to complain but no one is going to listen." Maybe no one wanted to listen but no one wanted to buy either. Ah, the dangers of a promise come unglued.
We are just blown away by what HP has been able to do with its marketing. Prime example is the finesse with which their printer group has created a sensible, clear and attractive product portfolio. They are dwarfing competitors like Epson and Brother in this regard.
Now does Carly F really care about selling printer paper and ink? Probably not, but every time a customer goes into Staples or Office Depot, there is that product set: telling a great story and supporting the brand.