Branding guru Aaker shows how to eliminate the competition and become the lead brand in your market This ground-breaking book defines the concept of brand relevance using dozens of case studies-Prius, Whole Foods, Westin, iPad and more-and explains how brand relevance drives market dynamics, which generates opportunities for your brand and threats for the competition. Aaker reveals how these companies have made other brands in their categories irrelevant. Key When managing a new category of product, treat it as if it were a brand; By failing to produce what customers want or losing momentum and visibility, your brand becomes irrelevant; and create barriers to competitors by supporting innovation at every level of the organization.
Using dozens of case studies, shows how to create or dominate new categories or subcategories, making competitors irrelevant Shows how to manage the new category or subcategory as if it were a brand and how to create barriers to competitors Describes the threat of becoming irrelevant by failing to make what customer are buying or losing energy David Aaker, the author of four brand books, has been called the father of branding This book offers insight for creating and/or owning a new business arena. Instead of being the best, the goal is to be the only brand around-making competitors irrelevant.
Takeaways: A brand is relevant when buyers consider it for purchase after selecting a category. Leading brands lose relevance when a new product redefines a category. Use the “brand relevance” approach instead of the “incremental innovation” strategy, which is based on brand preference. Innovative offerings form new categories and put competitors at a disadvantage. An “exemplar” brand is so strong that it represents a category. Exemplar brands enjoy high profits and other first-mover advantages. Create new concepts by solving unmet needs and promoting organizational innovation. Evaluate these concepts by asking: “Is there a market?” “Can we compete and win?” “Will our market leadership position endure?” Define and position your brand, and aggressively maintain category dominance. To stay on top, block the competition from being effective in your category.
Summary: Beer vs. Beer A look at the Japanese beer market over several decades illustrates the ups and downs of brand dominance within a category and subcategory. From the early 1970s to the mid-1980s, Kirin was Japan’s brand of choice. In 1987, Asahi, a nonthreatening competitor with less than 10% of the market, introduced Asahi Super Dry, a new beer with a sharp flavor, more alcohol and less sugar. Within a few years, 25% of the market preferred this new dry beer. Kirin’s own dry beer failed to recapture Asahi drinkers. By 2001, Asahi surpassed Kirin and became Japan’s dominant beer company.
Brand relevance is a powerful concept. Kirin rebounded somewhat when it introduced Kirin Ichiban, the result of brewing innovations. Kirin’s popularity fell once more when it tried to change its lager’s image and confused the market. Kirin did better in 1998 when it introduced Tanrei beer, which used less malt and qualified for a lower tax rate. The market responded, and the low-malt subcategory quickly grew. By 2009, Kirin again held more than 40% of the beer market in Japan.
There are two ways to compete in existing markets – gaining brand preference and making competitors irrelevant. The lesson of the Japanese beer battle is that even leading companies can lose “brand relevance” and market share when a new product redefines their category or subcategory. This competitive stance doesn’t involve just defeating your rivals; it extends to rendering them irrelevant by using innovation to outpace them completely.
Not all organizations allow ideas to emerge, nurture those ideas and implement them in the marketplace. Defeating a competitor on brand relevance is a difficult undertaking. Most brand practitioners concentrate, instead, on building “brand preference,” establishing their brand as the preferred choice in its category or subcategory, and maintaining that position by continually offering “incremental innovations.” The risk with a brand preference strategy is that competitors can duplicate most of your functional benefits and innovations. In today’s quickly changing market, doing something slightly better than your competitors might not be enough.
“The Brand Relevance Model” To understand brand relevance, look, for example, at the behavior of sport utility vehicle (SUV) buyers. They choose that category and then consider brands within it. A brand is relevant when buyers include it in their consideration subset. If they decide to choose among Lexus, BMW or Acura, but discard Volkswagen as a contender, it lacks relevance in the SUV subcategory.
The changes in what people buy and in category and subcategory dynamics are often what drive markets. Brand preference comes into play when customers decide among brands within the subset. Individuals separate items into categories to make sense of objects in their environment, form contexts and sort through the daily overabundance of stimuli. People use “attribute matching” to create definitions for a category and then consider whether an offering meets those criteria. Alternatively, they pick an example that represents a category and judge other offerings by comparison. An “exemplar” brand is one that best defines a category.
“First Movers” A brand relevance strategy centers on introducing products or services that create new categories or subcategories, and that disrupt and redefine a market, putting competitors at a decided disadvantage for a length of time. Often, the offering is the result of a dramatic innovation. The most advantageous move a brand can make is to introduce a unique offering that becomes the exemplar, such as the iPod, Jell-O and Prius. Creating the new category gives the market leader “first-mover advantages,” such as scant competition, the opportunity to create customer loyalty, and economies of scale in warehousing, production and delivery. As a result, exemplars generate high profits. They share these attributes: no rivals, clear differentiation from other products, committed consumers, fresh value and “a set of barriers to competition.”
“Transformational Innovations” A transformative product change instantly makes existing brands less relevant or even obsolete. Innovations that restructure a category completely tend to result from “new technology, a reconfiguration of the product, a different approach to operations or distribution, or a radical change to some other strategic lever.” For example, baby carrots created a new subcategory and undercut sales of conventional carrots. When an innovative product or service creates a new category or subcategory, the new market leader must fend off competitors with “protected technology,” a “size or scale effect,” an “operations advantage,” a “design breakthrough,” “brand equity” or the “loyalty of a customer base.”
Top Triumphs Retailers can gain an advantage in a category or subcategory via several channels, including selection, price, presentation, shopping environment, customer interaction and response to emerging trends. Retailers can experiment with novel concepts for relatively low cost, testing new ideas to see which ones work. It’s not easy to find a winning idea and protect it from competitors long enough to establish a first-mover position, yet many retailers have done it, including IKEA, Best Buy, Zara, Whole Foods Market and Zappos.
Most marketing strategists perceive themselves to be engaged in a brand preference battle. Zara, a clothing chain, began with one store in Spain in 1973 and now has more than 1,500 stores across the globe. Its hook is “fast fashion,” and it strives to be the first to offer a new trend at an affordable price. Zara finds emerging clothing styles and sells the designs in its outlets within weeks. It uses vertical design and manufacturing processes to keep ahead of the competition. The successful Swedish clothing retailer H&M uses a similar approach at an even lower price point.
Be aggressively innovative but with recognition of the challenges and investment required in both individual projects and organizational changes. Some automobile companies fast-tracked offerings that created new subcategories and left competitors in the dust. For example, the Toyota Prius filled a need that American car manufacturers had ignored. Although US car companies had several economic, political and technical reasons to develop a hybrid, they never committed to that market. This left the door open for the Prius, an overwhelming success: Toyota launched the Prius in Japan in 1997; by 2009, it sold more than 1.2 million vehicles worldwide.
Trends are powerful, ambiguous and complex, and they ebb and flow. Experts, government analysts and regulators can fuel food fads, which tend to come and go quickly and unpredictably. Established brands can maneuver by adding new offerings to influence and respond to emerging trends. For example, General Mills developed a portfolio of brand platforms in pursuit of various health trends. The company was already an established cereal marketer when it introduced Fiber One in 1985 to respond to the high-fiber trend. It extended the successful brand into other categories including yogurt, bread and muffin mixes.
Becoming a Game Changer Every brand wants to own the exemplar position. The process takes four not-so-easy steps:
Step 1: “Concept Generation” To come up with the next best thing, explore “unmet needs” or improve “organizational creativity.” Sometimes traditional or ethnographic research and observation can uncover an unmet need. For instance, Best Buy’s research noted that unfamiliar technology was difficult for customers to install and frustrating to use. This gave birth to The Geek Squad, a team of IT professionals who help customers use and understand electronics they purchase from Best Buy.
An unmet need is sometimes hidden and sometimes very visible. Sometimes new ideas come from customer feedback. Arm & Hammer discovered that customers were placing boxes of baking soda in refrigerators to absorb odors. The company capitalized on this by promoting that application and expanding into other deodorizing products. The social media make it easy to solicit customer input. Dell operates a site called Ideastorm, and Starbucks has the MyStarbucks Idea site. LEGO relies on buyers to test new products, offer suggestions and submit designs. Some companies successfully take high-end products and create less expensive versions for emerging markets. In other cases, new technologies spawn new products. For example, Microsoft’s Encarta encyclopedia CD-ROM made Funk & Wagnalls’s printed encyclopedias obsolete, and Encarta later became obsolete itself before closing in 2009.
Ideas are rarely new – it is a matter of reframing and repackaging them. Organizations must promote creativity to find such category-changing innovations. Try to do the following:
“Be curious” – Toyota asks “why” over and over as a method of problem solving. “Soak in information” – Ideas come from anywhere, so broad knowledge is essential. “Access diverse people” – Varying perspectives, backgrounds and experiences generate different ideas and viewpoints. “Know and use brainstorming” – Regular brainstorming sessions will help you generate new ideas. “Force new perspectives” – Challenge convention and think in new ways. For example, can a surgeon learn something from working in a fast-food diner? “Don’t look only for breakthrough ideas” – Sometimes a simple idea is the best one. Step 2: “Concept Evaluation” First, offerings must fit an organization’s strategy, and then the idea must be appropriate for the market. Not every good idea is. For instance, in the 1990s, AT&T attempted to enter three new business segments – mobile phones, computers and cable broadband – and lost billions. When considering a new offering, ask three questions: “Is there a market?” “Can we compete and win?” and “Will a market leadership position endure?” Companies must have the capabilities – production, distribution, and so on – in place to ensure the success of the new product or service.
The best idea poorly executed will fail. Enough customers must show interest to make an idea worth the time and money to execute it. A niche should have growth potential and staying power. Brand practitioners must differentiate between trends and passing fads. For example, Schwinn, a leading bike manufacturer, misread the emerging enthusiasm for mountain biking and failed to enter the subcategory, with damaging results. The opposite is also true: If too many competitors crowd a category or subcategory, or an exemplar already exists, bide your time.
Step 3: “Defining and Managing the Category or Subcategory” The process of winning the dominant position in a category or subcategory begins with defining up to five primary associations that are related to your product or your service. Probably one or two of these associations will drive the brand’s popularity. For example, when the Westin hotel chain introduced the Heavenly Bed, it formed a whole new hotel category around a premium sleep experience. Your differentiating function or benefit can come from a great design innovation, a new look, a high standard of customer service, a niche focus, a distinct price advantage, a new application, or a special feature or mix of features. A brand might also create or lead a category based on customers’ emotional associations with the brand. For example, people who are passionate about eating healthy foods relate to the philosophy of Whole Foods Market. Culture, shared interests, passion for an activity and corporate responsibility programs influence the customer-brand relationship.
Step 4: “Creating Barriers” Exemplars and first entrants in a category or subcategory enjoy a period of little or no competition. This leads to above-normal profits for a significant time. How significant depends on how well the brand erects barriers that prevent competitors from entering the category or places them at a disadvantage when they try. Competitive barriers include:
“Investment” expense – The cost of entering the category outweighs the benefits. “Compelling benefit” – Customers perceive the exemplar brand to be the most authentic and credible. “Relationship with customers” – Buyers’ emotional attachment to a brand goes beyond its practical benefits. Integral in “the category or subcategory” – The connection between brand and category is so strong that customers can’t consider the category without it.
This entire review has been hidden because of spoilers.
Girişimci olmaya karar verdiğimden beri kendimi sonuçta hiç bilmediğim bir alanda yolumu bulabilmek için kurslara ve kitaplara vurdum. David A. Aaker'in kitaplarını katıldığım bir "sosyal medya pazarlaması" kursunda hoca, konun düayeni olarak tavsiye etmişti. On yıl önce yazılmış bir kitap için biraz geç kalmış bir okuma oldu. Üzerine yazarın daha sonra basılmış bir kitabını da daha önce okuma eklenindi. Yazar da örnekleri genişletip bir takım bölümlerde tekrarlayınca, bol tekrarlı, yer yer sıkıcı bir dinleme oldu benim açımdan.
Yine de okuduğum diğer kitabına kitabına göre daha geniş bir yelpazede yazılmış bir kitap. Doğrusu ben farklı sektörlerden de olsa firmaların başarı/başarısızlık veya deneyim hikayelerini dinlemeyi seviyorum. Bu kitapda özellikle fark yaratarak öne çıkma veya düşme hikayelerini de hoşuma giderek (biraz da yukardaki nedenlerle sıkılarak) dinledim.
I am not sure, I really understand, many elements of business- but from this book, the notion of "branding", is covered, to some extent, though it presupposes a lot of basic knowledge (which I have picked up off materials from Harvard Business Schools website.) There are a lot of questions for me here, since I do not understand the notions too well. It might have a fair deal, to do with human psychology...
Honestly I think that much of what has been explained here could have been explained in a single chapter. A little bit boring and plenty of repetitions. I think
David's books are polarizing for me. I think he's got a brilliant mind for branding. He's extremely knowledgeable and obviously well respected in the industry. However, I find his writing style very academic. An academic slant isn't a bad thing, but I find the content boring even though I love the subject material. It's the second book of David's that I've read and found both were written in a similar style.
I thought this was going to be a great book b/c it starts out fast, direct, and assumes you know a thing or two about branding. It refers to 20-30 different case studies which are commonly profiled & studied, without he extensive detail. The problem is that there's nothing new to the proposed relevance-model & the book gets repetitive ~ 1/2way through. It's a lot of what you already know - just in a pretty package that doesn't add much value.
Main takeaway: when building your brand, your goal should be to dominate a category of subcategory within your domain.
This is a pretty long read and is written like a text book, with many supporting case studies. I would not recommend it for anyone who is looking for a casual read.