Advertisement doesn’t create brands, entrepreneurs do!
The concept of branding is often not clear to so many entrepreneurs despite the popularity of the concept.
Your logo, color and brand name must remind your target audience of something special, different, and exciting about your company, product/service.
This something special, different and exciting doesn’t just happen, they are deliberately created by entrepreneurs based on certain core values that they’ve built the brand around. Without these set of values, there is no brand.
In other words, brands are built on values!
What is a brand?
The answer is simply this;
“A brand is a product/service, company or individual that is SIGNIFICANT –different [unique] + making a difference [useful].”
Meaning, a brand portrays two key elements that qualify it as a brand;
1] Uniqueness –here’s what makes us different from all the others [product/service differentiation]
2] Usefulness –here’s what you benefit because of our uniqueness [customer/market satisfaction]
You can’t be different [uniqueness] for being different sake, your being different must make a difference [usefulness]. The market/customers don’t care about your uniqueness unless it offers them some usefulness in return. Your core values must be qualities the market also values.
Why Create A Brand?
Simple; to give a company, product/service an edge over the competition.
The days of monopoly are long gone. Hardly will you find a company, product/service being the only player in the market; there will always be one or more close substitutes also contending for the customer’s purse.
Creating a brand around a company, product/service is what gives it a fighting chance in the marketplace. If companies, products/services are left un-branded, the market has no other choice than to reduce everything to a commodity and base their selection criteria on price alone.
And you know what they; “if price alone is the only key differentiator between you and the competition, then you are both racing down to the bottom!”
There’s got to be more to a product/service than the price of the product/service. Branding is what helps you create that something ‘more’ for your company, product/service. That something ‘more’ is what the market searches for while making their purchase decision.
Brand Positioning Strategy
I met with Jeremy Hodara, the Managing Director for Rocket Internet Africa and France, and he asked me what 3 things will I be doing for the company that they currently weren’t doing?
My answer could be summed up pretty simply as;
“help transform Jumia from an eCommerce start-up into a SIGNIFICANT company –a brand that is different [unique] and making a difference [useful].”
And below were the 3 specific things I would do;
- Help Jumia clearly define their “big picture” [purpose, cause, mission] for existence other than the obvious — naira and kobo, dollars and cents [money]. This means the specific change or difference they wanted to make in Nigeria and in the lives of Nigerians through their eCommerce site www.Jumia.com.ng
- Help Jumia communicate this “big picture” by crafting a powerful tagline to replace their current one and telling compelling stories via social media that will resonate with their target audience. This means using contents rather than just advertisement to sell by educating the market and creating a know, like and trust relationship with their target audience.
- Help Jumia differentiate itself from her closest competition —www.konga.com This means identifying a Unique Selling Proposition [USP] or benefit relevant to their target audience that will clearly justify and communicate her #1 position in the market. Claiming the #1 position is cool, but not clearly communicating what makes you #1 is just not cool.
To be #1 means you are better than the competition at something specific; so leaving that piece of info out is so funny. When you make a claim, justify the claim; the market wants to know, what makes you #1? This could either be price, quality, inventory, delivery time, service, or any combination of other benefits that will resonate with the target audience and achievable by the company.
By doing all these, Jumia would have transcended her current status of being another product/service in a category [the #1 eCommerce site in Nigeria] to becoming a powerful brand of a sub-category [the #1 USP, eCommerce site in Nigeria known for something SIGNIFICANT!]
The Anatomy Of Branding: Brand Development Strategy
All products/services belong to a category. A category is the generic description or title given to a particular kind of product/service. It’s like the compound/group name given to products/services that serve the same purpose.
For example; a drink is a category for any liquid that can be swallowed, a soft drink is a category for any drink that is non-alcoholic, a juice is a category for any drink that is made out of fruits, a syrup is a category for any drink that is medicinal, a malt is a category for any non-alcoholic drink made out of barley, a beer is a category for any alcoholic drink that is fermented, etc.
An automobile is a category for anything that can be mechanically driven and used for transportation, a car is a category for any automobile that contains not more than five persons, a bus is a category for any automobile that contains more than five persons, a tractor is a category for any automobile that is used for farming, a lorry is a category for any automobile that is used for carrying heavy goods, etc.
A building is a category for any physical structure for accommodating people and things, a house is a category for any residential building, an office is a category for any commercial building, a school is a category for any academic building, a church is a category for any building where Christians worship, a prison is a category for any building where criminals resides, etc.
A computer is a category for any electronic device for processing information, a mainframe is a category for any high-performance computer that is used for processing large scale information, a desktop is a category for any personal computer that is not mobile, a laptop is a category for any portable personal computer that is mobile, a tablet is a category for any portable personal computer that is handheld, etc.
So what Makes A Brand Different From A Product/Service?
All products/services must have and belongs to a category. Categories help the human mind to arrange products/services into related groups for easy comprehension and recollection. Without categories products/services will just be floating around aimlessly inside our minds making it difficult for us to remember what each product/service is used for. Categories are to products/services what industries are to companies.
A Brand on the other hand, is a sub-category within a category. Brands originates from categories no doubt, but they are called brands because they have certain peculiar traits, attributes, characteristics, qualities, benefits or values that differentiates –set them apart– from other products/services in the same category.
In other words, a brand is a differentiated product/service within a new or existing category. The key word here is differentiated.
For example; in the building category, a duplex is a brand, so is a bungalow, a skyscraper, a castle and other differentiated kind of buildings.
In the drink category, coca cola became a brand by differentiating the soft drink category to create a sub-category of non-alcoholic drink known as cola. Red Bull did the same to create a sub-category known as energy drinks.
In the computer category, Dell differentiated the personal computer category to create a customized personal computer sub-category; Apple did the same with their Macintosh to create an all-in-one personal computer sub-category and did it again with iPad to create the tablet computer sub-category.
Without differentiation, there is no brand. Differentiating a product/service category is how brands are born. Differentiation is the key factor that converts an ordinary product/service [commodity] into an extraordinary product/service [brand].
Differentiation is what creates a sub-category for a particular product/service within an existing category of other similar products/services.
The origin of branding is differentiation. This is what is popularly known as USP –Unique Selling Point/Proposition. Any product/service that lacks this is merely a commodity and never a brand regardless of how much they spend on advertisement!
Branding Your Advertisement
Perhaps the most common mistake or misconception of branding is confusing it with advertisement.
Many marketers feel they have a brand so long as they can advertise their products/services. So the common practice is to create a product/service, give it a brand name and spend a lot of money advertising it to the target market.
The underlying assumption behind this thinking is this; advertisement helps our product/service known. In other words, advertisement creates market awareness for products/services.
No doubt about this!
That’s exactly the role of advertisement; to create market awareness about the existence of a particular product/service. In other words, advertisement makes you known. But the big question very few marketers stop to ask is this; known for what?
Yes advertisement creates product/service awareness but does it create product/service uniqueness and usefulness where there’s none? Absolutely not. No matter how far and wide advertisement makes a company, product/service known, if there is no brand, then you are being known for nothing!
Advertisement doesn’t create a brand where there’s none no matter how popular the company, product/service is. Advertisement is like a mirror; it will only project what exists. If a brand exists in a particular product/service because of its key differentiating features/benefits, advertisement will amplify that brand’s uniqueness and usefulness.
Likewise, if a brand doesn’t exist in a particular product/service because it lacks key differentiating features/benefits, advertisement will amplify that product’s/service’s weakness.
Branding is what creates the content [uniqueness + usefulness] for your advertisement. So when the content is missing from your advertisement, then your advertisement is meaningless. It won’t have any significant impact on the target audience. Content is how you brand your advertisement.
If your advertisement is all about asking people to buy, then it lacks content. It is not branded. Your content is your big picture, your story, your core values, your cause; the change you created that company, product/service to make happen.
Great brands don’t sell through their advertisement, they tell compelling stories that creates and emotional and logical connection with the target audience. Coca cola will never ask you to buy coke in their ads; they tell compelling stories about happiness. Apple will never sell you an iPod, iPhone, iPad or even a Mackintosh in their ads; they tell compelling stories about being different and making a difference.
Advertisement will not create for a product/service what the entrepreneur never intended or embedded into the product/service. Again, advertisement doesn’t create brands, entrepreneurs do!
The Branding Test
A brand is only a brand because it is representing or associated with something SIGNIFICANT –unique and useful in the mind of the target audience. In other words, it is the specific tangible features and benefits of a company, product/service that confers on it the title of a brand.
A company, product/service that simply describes a category or proclaiming anything generic is not a brand. Brands are specific, tangible, meaningful, unique and useful.
Here is a simple test for you to know if a company, product/service is a brand or not. Simply write this question down and try to answer it for the brand;
“What is _____________? [Insert product/service or company name]”
The answer you get will be one of two things; either a category name/generic description or a USP –unique selling point/specific description. If your answer is a category name or describing something generic, then there is no brand. But if your answer is a USP or describing something specific, then there is a brand.
For example; “what is naijapreneur?”
a] A website/blog
b] A Business and Entrepreneurship website/blog
c] A website/blog for unusual entrepreneurs
d] A website/blog about changing the world and profiting from purpose
The second way of conducting the branding test is to write out the product/service or company name first with an ‘equal to’ sign in front of it and a question mark sign at the end.
For example; “naijapreneur = ?”
a] A website/blog
b] A business and entrepreneurship website/blog
c] A website/blog for unusual entrepreneurs
d] A website/blog about changing the world and profiting from purpose
Over To You!
Since this is a test, I will be looking forward to your answers in the comment section below. Also, in the comment section, write down the branding test question for your company, product/service as I have just explained above and provide an answer yourself.
It’s that time of the year again when goal setting will be at the top of people’s to-do-list. But whatever your goal, you’re going to have to start taking action to make any real progress. Thinking alone won’t do it!
That’s why I created the to help you get OFF your butt and make great things happen in SESSIONSyour business and in your life this year 2013!
Here’s why you NEED to attend:
Listen, you’ll never know everything. No matter how much time you spend learning and theorizing. So the BIG question is: how much do you need to know before you start taking action?
The BUSINESS STRATEGY SESSIONS will help you cut through the ‘busy-ness’ of random activities and aimless learning that is hindering your business growth.
Parkinson’s law states: “work expands so as to fill the time available for its completion.”
If your learning/planning/theorizing phase doesn’t have a defined deadline, it might just continue forever.
Each session, we will force you to move beyond THINKING and on to DOING by helping you identify the key priorities critical to the growth of your business and setting a DEADLINE for their completion!
So far, in your business, you’ve been thinking and theorizing all alone, now it’s time to get an outsider’s opinion.
Because you might be talking yourself in circles, or you may be missing some obvious glaring issues affecting your business. By talking with someone else, you’ll think of new things and you’ll be forced to explain yourself.
Each session offers you this opportunity to bounce off your ideas with other fellow entrepreneurs from diverse industries. What better way to get fresh insights/perspectives for your business ideas?
Whatever you’re working towards, chances are there are plenty of people out there who have already accomplished something similar. These people can help you bust through roadblocks by helping you see things you can’t right now.
Mentors can practically see into your future, because they’ve been there, done that. They’re incredibly powerful and one of the few true shortcuts that exist in life!
If you don’t have any mentors right now, the BUSINESS STRATEGY SESSIONS is here to help. Each session offers you an opportunity to tap into the diverse experiences of fellow entrepreneurs as well as key resource persons to answer your endless business questions.
In addition, each participant gets 30 days one-on-one coaching with me FREE!
Action taking is infectious. When you’re surrounded by other people who are getting stuff done, it’s hard not to be motivated yourself.
The BUSINESS STRATEGY SESSIONS is a mastermind group comprising 10 serious minded entrepreneurs that meets monthly to share ideas and hold each other accountable to their business goals.
Mastermind groups are rocket fuel for entrepreneurs or anyone else who wants to start taking massive action toward an important goal!
NOW GO DO IT!
Registration details can be found at www.naijapreneur.com/think-tank
There is no business without competitions; the days of the monopolist are long gone. Regardless of how relatively new an industry may seem, a careful research will reveal two or more other competitions. So like I often remind entrepreneurs, since very few businesses exist in isolation, what are you going to do about the competition?
The existence of competitions in any given industry changes the playing field. Businesses in an attempt to gain higher market share adopt various competitive strategies to increase their competitive advantage. And one of the most obvious competitive strategies businesses easily adopt in the face of intense competition in an industry is the price war.
What Is The Price War?
According to Michael Porter’s generic competitive advantage strategies, this is known as cost leadership. The price war describes a market situation where the existing competitions struggle for market share by cutting down the prices of their goods/services. It is a race to the bottom; an attempt to win customers by offering lower prices.
The problem with this competitive strategy is this; even though you win the race to the bottom by offering the lowest price in the market, you will most likely end up at the bottom. What does this imply? Winning by cutting prices is more risky to your business than winning by offering superior value.
Very few companies win the price war by offering the lowest prices and they do so because they have lower costs of production as a result of higher efficiency. Such companies are referred to as the low cost leader and examples are Wal-Mart, South West Airlines, Ikea, MacDonald’s, etc.
How To Win The Price War
What’s the best strategic response for winning the price war?
If you are going to win the price war, don’t get into one. The best way to win the price war is to avoid it. How do I mean?
When your competition begins to slash prices in order to win the customer, don’t fight back by also slashing your prices. Rather, take the opposite direction by fighting back with superior value. I offer the following superior value competitive strategies:
Re-target Your Market
The price war like I had earlier said is a race to the bottom. Choosing to compete on price alone is the recipe for being at the bottom of the competitive ladder. It is choosing to serve the lowest segment of the market.
Every market is divided into three categories/levels; the upper-class, middle-class and lower-class. Going head-to-head with your competitions over price is indirectly going to force you to accept the lower-class as your default target market. By deciding to lower your prices, you must realize that you have also indirectly decided to lose the upper and middle-class segment of the market.
The lower you go with your prices, the more appealing your products/services becomes to the lower-class target market and the less appealing it becomes to the upper and middle-class. The lower-class are the majority in every market, they form the largest segment of buyers. The middle-class is the second largest segment of buyers, while the upper-class forms the minority.
Unless the lower-class is your ideal target market, don’t get into a price war with your competitions. Price is an estimation of quality and the general perception is that the lower your price, the lower the quality. If you can’t find a way of lowering your costs of production, in order to earn profits by offering lower prices, then re-target your market.
Re-targeting your market is how you position your products/services to appeal to a particular market segment. Since in most cases, to offer a quality product/service often costs more in terms of time and resources expended, then you are better off targeting the middle-class and the upper-class segment of the market.
The only time a low price appeals to all three segments of the market is when a commodity or consumer product/service is involved. These categories of products/services are referred to as fast moving consumer goods [FMCGs]. They are your everyday consumables and because of the high frequency of use, they don’t attract high prices since they enjoy higher rates of turnover. Examples are; detergents, toothpastes, food items, fruits, and anything that can be bought at the grocery.
So my question for entrepreneurs battling with the price war is this; why settle for the bottom of the market that is overcrowded when the top is free? Price is an issue because you are targeting the wrong market segment –the lower-class. As for me, don’t know about you, the top is where I want to be. I would rather die raising the bar, than live at the bottom!
Differentiate Your Offering [Branding]
The decision to re-target your market to capture the upper and middle-class market segment must be followed by a determination to differentiate your offering (product/service). This is what branding is all about. A brand is a differentiated product/service.
This is a conscious effort to establish a perceived meaning in the minds of your target market regarding your products/services. While the competition can be perceived as selling or offering a particular product/service, yours must be perceived as different based on the combination of certain unique qualities peculiar to your offering.
Every of your branding efforts, from product packaging, to customer service, all must communicate the usefulness and uniqueness of your offering to your target customers. The market will not pay for more, unless you have given them both a logical and emotional reason to do so. Branding is what helps you achieve this.
Branding is all marketing efforts to improve the perceived image of your product/services in the eyes of your target market. It must involve the creation of a compelling story that will connect with your target market and the fulfillment of that promise in their lives. A brand is a product/service that means something to the target customer. For example, bottled water is a commodity, but Eva water, is a brand. Get the point?
So, to win the price war, do something different from the competition that will position your product/service in a world of its own, only then can you charge more. The upper and middle-class market segment value quality, so unless your offering has the mark of quality written all over it, you won’t appeal to them.
Many companies offer web design and internet marketing services, to separate our own offering from the competition, we decided to turn it into a brand. First we gave it a very powerful descriptive brand name; differentiate online.
Secondly, we offered more than the average competitions around. They charge per web page created, we charge for unlimited web pages. With others, the more web pages you want your site to have, the more you had to pay. With us it wasn’t a question of web pages, it was a matter of functionality. Regardless of how much you paid, you had unlimited web pages.
Thirdly, we do more than design, we turn your website into a marketing tool that can help you find, attract, convert and retain profitable customers.
Lastly, we bundled our offering with a freebie, we would not only build you a working website, we will also teach you how to make it work for you, for free!
Sell Benefits NOT Features
One strategic way of differentiating your offering (product/service) is to emphasize the results your target market wants and deliver on that result. I have always believed that the price war is for those who don’t know what they are doing. If you can give people the results they want and help them get rid of the problems they have and don’t want, then price is no issue.
The market is filled with so many people who are looking for the product/service that can meet their needs. They don’t consider price first in their purchase decision, they seek for utility first –the satisfaction/benefits they will derive from the purchase. For such people, don’t start with price, start with benefits. Why? Because price is a feature and not a benefit. The cost of a product/service is one of the features/characteristics of that product/service. It describes how much it costs and not what it does. And guess what, people buy products/services for what it does and not how much it costs.
So, carve your marketing message around a tangible result your target customers lack but eagerly want or around a painful problem they have but don’t want and you will get their attention regardless of price. The major reason price becomes an issue is when you flaunt features of your products/services in front of your target market rather than the benefits.
The moment you do this, you have succeeded in turning your product/service into a commodity rather than making it a brand. And nobody wants to pay more for a commodity, why? Because they believe it’s available elsewhere. But the moment you start with benefits, the things they lack but want (results) or the things they have but don’t want (problems), then you have turned your product/service into something more than a mere commodity and they will readily pay more. Why? Because commodities don’t offer unique benefits, they offer generic features that bring generic benefits. Only a brand can deliver unique benefits based on unique features and guess what, the customers know this!
Offer Money Back Guarantee
Since the price war is essentially a money matter, why don’t we just get the issue of money out of the way and focus on what really matters; winning the customer. Which is more important; losing the sale because of price or getting price out of the way and winning the sale?
Suggesting that you get the issue of money out of the way doesn’t mean you give away your products/services for free, no. It only means you make the offer a risk-free proposition to the target customer. How? By offering a money back guarantee!
You see, very few people offer money back guarantee. Why? Because very few people can specifically identify the tangible benefits associated with their offerings [products/services] and so they can’t vouch for what they are asking you to pay for. The fact that you are bold enough to offer a money back guarantee tells the target customer that you are sure of your offering. This has already given you a competitive advantage over the numerous competitions who don’t offer money back guarantee.
As soon as money is out of the way since you offer a money back guarantee, the customer is willing to make the purchase knowing that they have nothing to lose. Then you can focus on delivering on your brand promise and if you don’t, then you are better off fighting the price war!
Offer A Free Trial
Another flip side to winning the price war by offering a money back guarantee is to offer a free trial for your product/services. This works a great deal because it allows the target customer to have a taste or preview of what you are asking them to pay for. And when they eventually do, if it’s something that delivers a result they currently lack or solves a problem they currently have, then money no longer becomes an issue to making the purchase.
When we ran our cyber cafe business, this was one of our most effective competitive strategies. It totally eliminated the barrier to winning the customer as a result of our higher prices. We had a tradition of offering first timers 10 minutes worth of internet access to assess our quality of service before paying for it. Again, this is a classical case of a risk-free proposition to the target customer. Since they had nothing to lose, they eagerly accepted this trial offer and because we were so sure of our quality of service, they came back to pay for more internet access time after the free trial elapsed.
The end of the matter is quite simple; if you don’t want to be at the bottom of the market fighting over prices with your competitions, then be prepared to raise the bar above the usual or general playing level. In other words, if you want to charge more, be ready to give more and do more!
What other competitive strategies have you adopted in your business to win the price war?
Also, which of the ones mentioned above are you most comfortable with and will readily put to use in your business and which are you less comfortable with and is scared to implement in your business and why?
Kindly share your answers in the comment section below. This is a collective learning community; your feedback is highly solicited. Thanks and can’t wait to hear from you!
Happy New Year!
I’m so glad to have made it into 2012 and gladder that you also made it. At the start of a New Year like this, people are always in such high spirit having far reaching expectations for their life and business. As a result, many start the New Year with a list of to-dos for vital areas of their life or business.
This list of to-dos popularly known as New Year Resolutions is created in the same high spirit that naturally accompanies the New Year. Little wonder they barely help you achieve much!
Why New Year Resolutions Fail
The reason is this; New Year Resolutions are usually created with too much optimism that often makes the list overrated with unrealistic goals. Sooner or later, when the high spirit of the New Year begins to wear out, optimism begins to give way to reality. This is when you begin to lose faith in your overrated list of to-dos having realized that there’s just so much you can realistically accomplish.
The funny thing though is this; this wouldn’t still stop you from going over this process all over again in 2013. Why? Because the popular thing is often naturally easier to do than the unusual. Since everyone else is creating New Year Resolutions, it becomes quite easy for you to keep reinventing the wheel without evaluating its effectiveness.
In this unusual article, I will be sharing with you the unusual alternative to the popular New Year resolutions. Let’s begin!
Effective Planning For 2012: The Unusual Approach
Forget about New Year Resolutions, it’s just a list of to-dos that never gets done. Here’s the smart way to go; thoughtfully pick 3 words that will guide your thoughts, plans and actions throughout the Year. Then create daily, weekly and monthly goals for each of these 3 words and go to work.
These 3 words will serve as the underlying theme or framework that will influence your thoughts, decisions and actions in 2012. I first learnt of this idea in 2010 from Chris Brogan who since 2006 has given up on the ineffective idea of New Year Resolutions. I gave it a shot last year and found it very effective.
Why was it so effective?
Do you know why some businesses achieve more than their counterparts? Do you know why no two businesses are ever
the same? Do you know why certain businesses behave in a certain way that sets them apart from others?
The secret is found in their DNA.
In biology, the DNA which stands for DeoxyriboNucleic Acid contains the genetic instructions for every living organism. The DNA determines what kind of life is the organism being formed to live. In essence, the DNA contains the programming language [source code] for the organism. Suppose organisms were some hardware, the DNA would be the software. Meaning, it is what basically determines how the hardware functions. Without a DNA, organisms are bound to malfunction.
What Is The DNA Of Your Business?
Your business is also an organism and needs a DNA to efficiently and effectively function. The DNA of a business determines what kind of a company it will be, the basis of its operations and its outcomes. It gives the broad picture of what the business will look like, what will guide its actions and what type of goals it will seek to achieve. They represent the soul of the business, what enables the company to function as a unique living entity.
It is said that the only constant thing in life is change. Entrepreneurship is about thriving on change. A business cannot
continue to do the same thing every day and hope to remain competitive. In business as well as in life, change is not a choice, it’s a must. The options are very clear; innovate or die!
If there’s one aspect of business that can potentially increase your odds of keeping up with change as an entrepreneur, it is the creative side of your business.
Why do I make such a claim?
Being in business is all about meeting the needs and solving the problems of a particular set of people. These people are known as your target customers.
They have needs that arise as a result of certain problems they have and are in search of products/services that will solve their problems. These needs are always changing with time. Meaning, what may be considered as a need today, may turn out to be unnecessary tomorrow.
Success goes to the business and entrepreneur that not only keep up with these changes, but is also capable of pioneering some of these changes by constantly creating innovative products/services that eventually shapes the needs of the market.
A business is only able to achieve this through an unwavering dedication to creativity.