Brands Create Customers wrote here about Crocs extending their brand to include items outside of footwear.
Honestly, why must nearly every strong brand line-extend itself? Crocs has made a strong niche for themselves by being first in their category (whatever it exactly is), and by appealing to smaller venues (like volleyball and folk artists).
Crocs are the categorical generic for spongy flip-flops (or whatever they would call them). If I say “what are Crocs?” they response will come back, 100 times out of 100, “those crazy, ugly flip-flop things.” By expanding their line, they are weakening their core. The idea of Mammoth Crocs could be a winner, but moving north of the foot is uncharted (and frankly unwelcome) territory.
By expanding their base to include the major four sports (baseball, basketball, football, and hockey), they are abandoning the very crowd which has made them into a cultural phenomenon.
Brands die. If Crocs are indeed a pair of Zubaz for your feet, then they will die their natural death. Crocs needs to realize that, and instead of fighting it, pour their money into their next innovation, and into their next brand name.
What should Crocs do? Slow down everything! Feed a fad, it will explode. Starve a fad, and it will stay for a long, long time. Beanie Babies are one of the greatest examples of starving a fad. The “shortage” of Beanie Babies was nothing more than clever marketing, after all! Alas, one can buy Crocs at every turn. They have brought the crash of the fad upon themselves, all in the name of greed and growth! Shame on a brand!
There really are no shortcuts to creating a winning brand. If there were, believe you me, they would be readily exploited. Motorola, who makes over four dozen products, got trounced again, recording their worst quarter to date. They also fell to third in the category of mobile phones.
According to an article by Macworld, "The company is suffering today from its strategy of cutting prices to win market share. In the short run, that helped it gain high visibility with the popular Razr, but excess inventory has allowed competitors to swoop in and gain share."
Where did they go wrong? For one, a lack of focus. Who is number one in mobile phones? Nokia. When I say mobile phone, what comes to the mind? Nokia. What is a Nokia? It's a mobile phone. Years ago, they made everything from truck tires to (of all things) toilet paper. They were also losing close to $1.5 million a year. When they spun off their other companies and focused on mobile phones, they soon became number one in mobile phones in Europe. Now, they are number one in the world.
What is a Motorola? It's a Bluetooth headset, mobile phone, wireless Internet, pager, data solution. The list goes on and on.
In mobile phones, their big winner, the Razr, became commoditized to death and treated like a product, not a brand.
Moto has struggled to harvest another "it" phone (the serendipitous blessing bestowed upon the once mighty Razr). And so, copycat phones such as the Krzr and the Rizr were released. But all they did was remind people of the Razr.
What Moto should have done was treat the Razr as a brand unto itself. The Razr brand needs constant innovation and updates. It should not be commoditized, as they did with the first one. Once everyone could get a Razr for free, the fun was gone. Those who paid several hundred for it were bummed, because the phone's elitist soul had been sucked right out of it.
Moto should not have asked, "How can we sell as many units as possibly, no matter what the cost?" They should have asked, "How can we deepen our market penetration with this expensive, elite phone?"
But now the Razr brand has been tainted. The Razr 2, which will retail for $300 (or so) in September will likely have a very quick, very short-lived surge in sales. And Moto, desperate to win back their market share, will again slice the price of the Razr (a funny concept: slicing a Razr). Once gone, clients rarely return.
Perhaps Motorola's Razr should take a clue from Occam's razor: entities should not be multiplied beyond necessity. (The simplest answer is usually the best, in other words.)
The Razr did not need a Krzr or a Rizr, it needed the Razr 2, sans the destroyed brand image that Moto managed to craft.
Stanford Financial recently ran a new commercial. There were lots of dramatic slow pans blanketed by emotional music. What, according to the commercial, makes Stanford Financial so worthwhile? Why, their people of course!
And what do their people do? A service!
And what is their service? Hard work.
And at what cost does the hard work come? At a value for the client.
And what does that value buy them? Clear vision.
"Welcome to Stanford Financial Group. Hard Work, Clear Vision, Value for the Client."
(Click on the image to see a larger version.)
Not only is their slogan boring, but it says very little about the real value in what Stanford does.
This is an older commercial, but it still says basically the same thing: come to us and we'll treat you better. (Than what, I don't know.)
Everybody wants to believe that they are hard working with a clear vision, providing value for their client. There is nothing remarkable, nor is their anything unique, about Stanford's proposition.
UBS, another financial group, had this to say:
Imagine a global financial firm with the heart and soul of a two-person organization. A world-leading wealth management company that sits down with you to understand your needs and goals. An award winning global investment bank and premier global asset management business dedicated to giving you the most personal attention at every level. You & Us. UBS.
Again, who cares? And is it even believable? A global financial firm with the heart and soul of a two-person organization? Do you know what company has the heart and soul of a two-person organization? A two-person organization.
What makes you unique? Service doesn't make you unique. Everybody has service.
Now let's look at Citibank. They, too, are in the money business, while not the exact same field. Citibank ran a very memorable set of ads that were benefit-driven. They could have talked about how great their services were, but instead they jumped on the "identity theft" issue. Since it was a hot issue, and others had yet to own that concept, Citibank was quite successful at preempting the word(s) in the mind.
As a final example, let's look at ING Direct. They have revolutionized the banking industry by creating the first branchless bank. They have many wonderful features, like a zero-dollar minimum in your checking account, and offering a "loan" instead of charging service fees if one overdrafts.
People are attracted to features. ING made 9 billion last year on 25% growth. How much of that comes from ING Direct is hard to tell. One thing is for sure, ING Direct and Citibank actually have something unique to offer. If Stanford and UBS have something unique in their arsenal, it certainly isn't conveyed by their advertising.
The lesson is clear here: people want benefits. They want uniqueness. Nobody can own the same word or concept in the mind as another. ING Direct stands for "branch-less," and Citibank stands for "identity theft." UBS and Stanford stand for "service." Both UBS and Stanford are doing quite well, but their lack of focus opens up a gaping hole into which a smart competitor could carve out a profitable niche, exploiting the financial services' lack of positioning.
