'Scale for scales sake,profits for God's sake'*

Many a business in the last few years, especially in the  DTC and broader start up scene worshipped at the altar of scale in the belief that it fixes all business ills and that   in extremis it can turn even  unprofitable businesses  profitable.  

The pursuit of  scale for scale's sake is, I suggest, suspect and is not  in itself a winning  strategy.

The pursuit of scale can also in some cases like food and beverage hospitality  for instance bring serious challenges to the very quality of the  offering which helped the founders make the business successful in the first place, as the restaurant  which carries the chef's name is in many cases unlikely to have said chef  in the kitchen of multiple  venues  at the same time. Being a big fish in a small pool may also be safer and more profitable than being a minnow in the ocean, not to mention the agility that smaller businesses  often have.

The survival of businesses  is not guaranteed  by size of turnover  alone , but rather by  profitability ,growth prospects and free  cash reserves. 

The publicised quest for scale has also allowed  some entrepreneurs to hide ambitions  for selling out  and making a fortune  rather than seeing their loss making but highly valued and leveraged  start up business actually  scale  and turn a profit and become financially  viable.

Seeking scale through merger  and acquisition  has also traditionally  had a mixed track record; buying market share is  not of itself  necessarily a good thing , it depends on price paid, cost of borrowings  and overall portfolio growth prospects rather than real gains in productivity and cost savings from  scaling up. The end of a decade long period of interest free risk capital  is now consigned to history  which puts more pressure on making good choices around leverage. 

 The notion of perpetual growth which is itself a core principle of  corporate capitalism is  currently  also the subject of wider discussion  under the heading of   whether degrowth is the next shiny new  thing. 

The rise in interest rates, the squeeze on disposable income  and the effects of the pandemic have inevitably also had an influence on the trajectories of many a business , but don't explain the  rise of the siren call of scale.

A little common sense  examination  suggests that scaling up when it means  increased productivity  ie producing more with the same means of production can indeed improve profitability  by reducing unit costs;  by that basic metric it should be clear that bigger is not necessarily   always better.  As an example Some high profile Restaurant chains  run by celebrities have been high profile casualties  in recent years, because the fundamental cost structures and opportunities for increased productivity  are limited. 

I'll  close by suggesting  that there are ways scaling  can help a business , both scaling up or something that is  considered less sexy  namely scaling back; the key for me is that the scaling improves unit profitability. 

Please do tell me what I've got wrong on this or any other of the marketing topics I've blogged about  , available  at : 

 fmcgbrandbuilder.blogspot.com 

 on Social media: @runsforcoffee1.bsky.social

 

* with apologies to the work of 10cc 

Representation

 I've been struck recently  by the difficulty some brands  seem to have regarding knowing and representing their target consumer, as seen through the lens software  their comms and  product ranges.

Just so you know I'm an ex packaged foods marketer  and I leave data and facts to others, so this opinion  piece is to air some thoughts  and maybe spark  a conversation..outside my usual product 'lane'

Representation can be a difficult topic in advertising  as it is sometimes acknowledged that when you're  young  you aspire to being older , and that when you're old you don't necessarily want reminding that your  best years are in the past. Who you show in your  adverts then becomes  symbolically more important.

 Controversially for some I would also argue that its much more difficult to successfully target everyone,  and that leadership within a defined  moment,sector or demographic is potentially  both  smarter and more lucrative.

There seem to be several broad brush approaches :

1.Reflect actual consumers and behaviours, but improved .

2.Ignore actual consumers and behaviours in favour of the Brand's desired vision...

3.Blur or subvert the picture .

It is regularly said  that much of the blame for a  lack of representation lies with the advertising and marketing community who are not representative of the population at large, but never underestimate the influence of those  Titans of the Boardroom either.

When you don't know your brand ,your  audience , or are overly optimistic  about  the  strength and ability of  your established brands to reinvent themselves to a new demographic you invite trouble..

Famous examples of dissonance between brand  comms and consumer  here in the UK historically include approach 2 advertisements for 'friendly' bank managers and tax authorities .

Marketing  funeral plans for instance  is likely to be comparatively  straightforward  as regards product definition and targetting the audience ,as well as being statistically supported, if you want that kind of reassurance.ie in normal times older people tend to die before younger ones. Typically adverts for this  category will feature both the older and the  young,wrapped up in a warm glow, classic approach 1

Another approach is taken by Marks and Spencer, a fascinating UK retail  brand in its own right, and one with a split personality. Their food business has for decades now  been an astute navigator of trends and arguably the gold standard of  food private label to boot. It cleverly avoided  Representation issues  back in the 90' s by  avoiding showing any people in their advertising, and the brand is generally credited with  inventing a new genre of so called  'Food Porn  ' advertising  with hitherto unknown levels of technical wizardry to make the food  look irresistible. Approach 3 if you will. 

By contrast their clothing business has had a difficult  and lengthy series of identity crises because in some businesses if something is worth doing badly,then  its worth doing badly again and again. Historically Marks and Spencers was a byeword  for  middle of the road everyday, sensible  clothing for the middle aged at heart  with a market leading position in underwear  , office suits , cardigans and sensible fashion items..it catered for and knew its target demographic  and served them well and was reliably, highly profitable. With the advent of fast fashion  like Primark and Next ,even before the internet brands ,it just lost its way and especially in ladies fashion  it abandoned  its historic core mid market market position  and tried and failed to appeal to more  fashion conscious, often younger consumers, dissonancein brand imagery if not product range.. In the current iteration of this repositioning it has adopted a subtly different, less fashioniata approach  and is trying to reclaim a broader if ageless ground , but the adverts are still approach 2 , full of people who bear no relation to the likely actual core consumers I encounter when I visit the store for food,  ie they avoid the middle-aged and elderly. Does this lack of representation translate into a negative impact on  their sales though?

No opinion piece on marketing matters can of course avoid the case study that is the Dove  story , which has largely  been built around  the adoption of mold breaking, truthful  Representation in advertising featuring consumers of all ages and classifications. When their advertising  first broke it was both approach 1.and 3 because by showing real consumers  they effectively subverted and rewrote the rulebook on beauty product  advertising at the same time.

I'm going to end this with a couple more observations :

Firstly  I would suggest if you are like me in the camp that believes appeals to emotion are as if not more important than rational/ functionally based advertising and branding,  but  equally belive typically both are needed  then the importance of whether and who you choose to represent your brand becomes  a not insignificant matter.

 Then, finally there's Haribo confectionery advertising  featuring adults ,voiced over by young children , which totally confounds and disturbs me.

Feel free to correct my errors in thinking and matters of fact.

Find me on Twitter : @Runsforcoffee1 

Growth strategies or 'everything now everywhere' syndrome

 This post was sparked by some  very different approaches to stimulating  growth  being taken by the Quorn brand of  plant  based meat  alternative, the pioneering Tesla electric powered car brand as its currently known (given Elon Musk's propensity for lane and strategy  changes) and the iconic Mini car brand for its  electric car offering. On the face of it both consumer sentiment and more importantly  legislation are  positively aligned and the future for both categories and successful brands within them should be relatively  assured. So why the quests to increase the growth rates of these three companies, and why now?

We are living in business times where there is increasing  tension between the historic  quest for never ending growth  and  the murmuring of  voices suggesting the complete opposite ie the need for society to embrace 'degrowth'. Add to this the wake up call of global economic, political and pandemic fuelled turbulence , putting both profitability  and growth into sharper focus as  the reality of  rising  costs and interest rates provoke a spate of job culls ,notably even in  the recently untouchable tech sector. In this post the growth issues manifest  themselves in  markets which superficially should be perfectly in tune with the zeitgeist,  namely plant based foods and electric powered  cars.

My thoughts on the topic are unencumbered by  the pursuit of personal  gain*,insider or indeed  specific category knowledge or data , and such as they are they rely instead on the accumulated learnings  and  pratfalls of more than 30 years of marketing packaged food brands internationally to consumers ...please as ever feel free to enlighten and correct me on anything I  have omitted or simply got wrong. I won't be going into  areas like plant based dairy alternatives  because the Quorn brand doesn't  have a presence there at this time.

The three brands being discussed  here  are commonly held  to have strong franchises and occupy strong positions in their relative spaces and yet are adopting very different  strategies to tackle the slowdown in market growth rates  the reasons for which are themselves worth looking at.

The plant based  food movement is not  new and is well beyond being written off as simply  a fad in developed western  markets, even if the numbers of  fully vegetarian or vegan consumers is still believed to be in single figure percentages here in the UK(source:statista). This is in itself not surprising , as changes to food habits can take a generation or more to take root , take for example the acceptance curve of yogurt or fromage frais in the UK ,both of which I worked on in the dim distant early 80's when they were still in the early stages of mass market acceptance. The  pragmatic and well messaged  acceptance of plant based products as part of  mixed diets is accompanied by an understanding of the benefits of eg reducing meat consumption, and whilst the legal  challenges to eg denomination in labeling are a  predictable  attempt by vested interests to slow the pace of progress, the fact remains that a number of major legacy  food multinationals of significant scale such as Nestlé and  Unilever  and others  from within the meat industry itself( eg JBS,Cargill Tyson foods) have invested alongside  the now famous startups like Impossible foods; similarly in  the QSR fast food  sector plant based alternatives  have been/are available across the major burger  and  chicken  chains. 

  Given the presence of favorable consumer sentiment and conditions  for plant based  foods what is the growth issue The Quorn brand is tackling   here  and why has it adopted its published new strategy? 

The owners of the Quorn  brand have decided to pursue in effect an open books food ingredients  based strategy to boost the  speed of adoption of their product  ,by  getting more companies and presumably  more consumers to use their proprietary  technology ie product and expensive manufacturing set up  in a wider variety of food products  faster  than they could undertake on their own. This  accelerates the speed of adoption, improves  costly plant utilisation  ,lessens the investment in both plant or r&d ,and indeed marketing investments  the brand owners need to make to kickstart faster macro market growth. They're  effectively  betting  the house on the strength of their  own brand to protect their  market share and profitability in their core product  markets. 

This is both a high risk and a low risk strategy because it  presupposes  for me at least  the most watertight of contracts around  market definitions and no go areas, the continued growth  of Quorn  , and  legally defendable patent  technology around this cheeky loveable  mycoprotein which forms the basis of this foodstuff. Given the origins  of the product as an unexpected love child of a chemical company and a food company ( source: Wikipedia : ICI and RHM )and the assumed  difficulties in patenting foodstuffs I would be class this as an assumption not entirely without  risk..

Whilst this strategy has the allure of a  real game changer as it grows both category and brand and is potentially  at its best like an "Intel inside" but on steroids idea,  part of me worries it is either the result of an industrially driven  rather than a brand driven strategy ;or more worryingly  a consequence of the increasing cost of the financing  of the the acquisition debt, this business having changed hands several times in recent years , most recently in 2015 to  Philippines  based  Monde Nissin foods. Arguably a larger  multi category player like Nestlé or Unilever would have had the necessary technological and brand /market  footprint to accomplish  this in house with less risk.

The electric car market  has in Europe been  growing from a low base  with all major established brands  plus start up and newer Chinese brands active. This market has  recently been   dealt  a winning  hand by the EU, which is in the process of passing legislation outlawing the sale of any purely petrol or diesel   cars within the coming generation , by 2035 to be precise. Controversially, the ban I believe ? also includes the sale of new hybrid vehicles which combine electric with diesel or petrol engines which removes the need for charging post infrastructure. The point is that growth is structurally built in  by new  legislation  so surely growth prospects for electric vehicles are almost unlimited as eg older cars come to the end of their useful life? Its just a matter of taking a medium term view and building (profitable ) market share. It's worth reminding ourselves that Wall Street values Tesla  above all other  car companies listed there, although it ships a fraction of units they currently do.

The growth issues in electric  powered cars  for now have been primarily structural plus  a function of  cost:  provision of charging points is deemed  inadequate  by drivers without  careful route  planning; battery range and life  is also a factor ,especially when there aren't enough charging stations; supply chain issues about the provision of and location of battery production are also adding complexity and frustration; the UK for example  does not have enough local battery manufacturing capacity to  support the requirements of  the current ,reduced manufacturing base. Lastly, the purchase cost to drivers  of electric cars has been more expensive than  comparable  non electric alternatives ,whilst more recently the cost of electricity  has negated some of the  presumed  fuel savings; finally ,the provision of government  subsidies and incentives to switch to electric has been patchy and in the UK  was withdrawn in June 2022.

Given the presence of favorable  conditions  for electric  vehicles what is the growth issue  the Tesla and Mini  brands are addressing here and why have they chosen the route they have announced ?

Looking at the electric vehicle market I am uneasy about issues the rather crude but well known tactic of list price based price cuts adopted by  the Tesla brand. Having  achieved miracles by producing  from scratch a profitable ,attractive  and high performing  car   using a new supply chain and  innovative  routes to market such as showrooms in shopping malls , the price drops  which are fluid and have been as much as from 

20% up to 30%(source: Reuters/ the Guardian ), causing  a not inconsiderable  immediate depreciation hit   and negative brand  sentiment for those who have already bought in to this new brand. The owners of the brand clearly hope to spike demand amongst the next,  bigger tranche of potential  customers  , having presumably   already garnered  many of the early adopters.  Also it is possible  that the owners of the brand have overexposed themselves to the China market, which  brings its own particular dynamics  , both as regards unused  capacity in its plant there  as well as aggressively priced local competition, or the possibility of some form of  state intervention. Either way this seems to me to be more of a tactical move which carries risk to the brand reputation  and  also paradoxically  to the scheme itself (  delaying purchase due to uncertainty on future price cuts ?)rather  than part of a longer term strategy  which might for instance have looked at eg an even more basic , smaller  entry level  model with a  naturally lower price point to thereby  improve category  entry points  through range. 

I'm  a big fan of how the Mini  brand  has been reinvented and kept fresh since  being acquired by BMW . The electric  Mini  was not early to market for sure , but they have sought to boost market  share  growth by addressing a key  pain point in the ownership experience  , namely home charging. They are currently  promoting  a free home charging kit as part of the purchase deal. It is  a simple mechanic , unlikely  to seriously  dent profitability,  completely  unlikely  to damage the brand reputation  at all and is for me a great example of what @paulmark bailey has called 'commercial creativity' .

As these three brands have only recently  embarked on commercializing  these ideas we'll have to see how they work out in the real world.

Thanks for reading this far. Start  a conversation on Twitter about it ?

Footnotes:

* I'd be tickled to chat and possibly  advise on brand marketing and  business matters,  but I am retired so I'd have to be really excited to do anything other than chat or talk.

- Find me on Twitter  for now : @runsforcoffee1 

-I've  been mulling over  brand marketing issues  for 8 years or so  on:

https://fmcgbrandbuilder.blogspot.com

REINVENTION

Summary:   Brand reinvention is a very important  aspect of long horizon brand stewardship  and requires regular attention, sensitivity to changing conditions, creativity in spades , executional boldness and a corporate  willingness to embrace risk. Reinvention can be both subtle or more bold but standing still is always  a risk in itself. Reinvention can be required due to changing market conditions  or structural decline  or by the  ever present need to remain relevant. It can mean creating a virtually  new identity and offering ,or  making more subtle updates to an existing brand, but by definition it also implies there was something there  worth reinventing. Legend has it there's no going back to an old love that isn't doomed to failure, but some brands have carried it off with aplomb,others less well ; as ever those looking for hard and fast laws / the easy way  will be disappointed. 

This blog came about as a result of reading  (without  any sector knowledge to get in the way obviously )  about an apparent  slow motion car crash that is unfolding here in the UK , also known locally as  the Royal Mail* .Their strategy for coping with structural  market decline in the face of most likely  competition from  electronic communication is apparently to price themselves  into I would imagine faster  decline, penalizing the elderly and non internet users. They act like they're  stuck in a box , which without reinvention  could become a brand and business coffin. 

This lead to me thinking about the topic of reinvention in marketing and how some have done miracles  ,others seemingly faring less well.

Reinvention for the purposes of this blog will include new products, new markets,or reinventing the original offering by refreshing or repositioning.Timing ,investment levels , culture and luck also play their part as usual.

In brand marketing a classic portfolio or indeed single brand  approach to managing lifecycle stage  and destiny  will likely  involve completing  at a minimum a   Boston Consulting Group plus maybe  a PEST  style matrix  , placing brands ,markets and countries into clusters of relative attractiveness  and best  marketing  strategy.

In my home market of the UK there are some excellent examples of reinvention that have  reinvigorated  an otherwise declining brand,  others which have prolonged lifecycles in categories  which in the UK seemingly had little future growth potential but remain strategically  important in other countries, an example  of the latter  to me would be the market for canned milks which Nestlé have stuck doggedly with  over decades despite the overwhelming market share of fresh milk.

Lucozade : with roots as unwanted consumer product offshoot of a pharmaceutical  company this brand was marketed  as a drink for the ill or convalescent ie adjacent to pharmaceuticals until it was reinvented in one single move into an early leader in the  nascent energy drinks  market ,retaining only the product and brand  name. Brave and extreme in largely abandoning in one move their existing user base ,and in the significant brand stretch required.  This  was one very successful reinvention. 

Burberry: Iconic  if stuffy British couture brand known for one product , reinvented  globally as a  British fashion brand for the aspirational and affluent style conscious young. Successful change of  brand image in which original signature product the raincoat remained a pillar.

BT was previously the  historic effective monopoly provider of UK domestic landline telephone services  and infrastructure , won plaudits for its  advertising campaign featuring Bob Hoskins ( Thanks Lisl) " It's good to talk". Challenged by the market being opened up to other providers and the emergence of the internet it pivoted successfully to become one of the leading providers of internet  packages  and then into content such as sports via dedicated  channel BT Sport.

The Mini was one of the automotive icons of the swinging 60's and beyond, until it wasn't. Built upon innovative  for the day engineering , beloved by the glitterati of the day(proto influencers) as well as the general car buying public it also built a strong supporting sporting pedigree via success in car rallying. Ultimately let down by a lack of  strategic marketing by the then owners  and  lack of product evolution  until the range was withdrawn in 2000(I had to look it up as it had long since faded from my consciousness ) ,the  successful  reinvention of the brand by new owners BMW is a stark counterpoint. With careful but not slavish interpretation of core brand  properties especially in design and  clever ,loving nods to the Brit nostalgia such as optional Union Jack roof paint and tail lights there's lots to admire. The Fiat 500 has also been a successful  reinvention,  but by contrast  the  attempts by Jaguar and even the VW Beetle   have been less successful. 

Doc Martens was a brand with military boots heritage which  was then adopted by the Skinhead movement  ;not  a promising start  point for a  consumer brand that has remained an iconic youth  alternative fashion lifestyle brand over many generations since the 70's. Starting with adoption by Punks the range has expanded beyond recognition to appeal to popular counterculture around the world. Constant  range reinvention to stay relevant has been key.

Reinvention at its softest touch is the constant attention to  and regular evolution of an existing brand and any or all aspects of it. Taking beloved consumer brands like Andrex toilet tissue or  Heinz soups  for instance  there has been regular  attention paid to product formula, pack graphic  design ,  creative platforms and general  updating of vital distinctive assets to keep them relevant to today whilst  building on their heritage. The disappearance from the UK  high street of once household  retail brands such as Debenhams, British Home Stores, Littlewoods, Woolworth et al  suggests the art of reinvention as well as poor  financial management  can have dire consequences. Other famous retail brands like Marks and Spencer have struggled  for some years in clothing to reinvent themselves and have had a lengthy period of trying to find the target audience and range that best suits them these days, having once been a go to amongst the middle of the road  populace for sensible clothing. Their touch in their food business by contrast has over the years  been near faultless as they continue to  reinvent their range for current  trends.

                               Fin.

               

Usual disclaimers: opinions mine , ideas likely unoriginal;only data you'll get is that  n=1;

 ex consumer goods  foods marketer UK and International , failed restaurateur, sometime would be marketing consultant. Thanks for getting this far, now read on.....

*the postal delivery service  ,formerly state owned but long since privatized and spun off .

How much is that doggie in the window ? It's complicated

This piece was sparked by discussions around the difficulties brands are facing today as consumers grapple with the effects of the recession  and the biggest squeeze on living standards  since the financial crash in 2007-2008, due to significant increases  in the cost of essentials such as food and gas & electricity  and a drop in average disposable income as salaries lag behind inflation.

 I'm going to pick up on the issue of pricing which Les Binet (@BinetLes) spoke about amongst other topics  recently at the IPA (@TheIPA ) as part of a two part  presentation about how  brands can thrive in a recession . His talk was then  summarized into an  article  for Marketing week(@MarketingWeekEd ) 2ndDec  which I  read  this weekend.

Much has been written about  how amongst the 4p's  pricing  in particular has been both undervalued and  neglected by marketers in recent years , aided and abetted  in part by a sustained period of cheap money , low inflation and growth/ recovery from the financial crisis of 2007. Others have also written about this  , suggesting a  lack of financial nous amongst today's marketers  which  has also  contributed to declining  influence of CMOs in the boardroom (when was it ever otherwise though ? )

My take on this is as always   based on my   experience in branded packaged goods with primarily a retailer driven route to market.

As with so much in the world of marketing  marketers often have little direct control over things we are held to own, be it brand image or indeed pricing...  here's why:

The term  Pricing Power is  contentious in my opinion  not least because  in a number of countries  the ability to  directly address  with the retailer let alone dictate  or move the price the consumer pays  for your brand   is now  illegal . Unless you  therefore sell direct to the consumer  the brand owner often  has little or no  direct ability  to control consumer price. So the phrase pricing power might be said  in many ways to apply more to the brand :retailer relationship  than the brand's one with the consumer.  

As ever  the more powerful*the market position  the brand has the more influence it can have on consumer prices and the more it can sustain a premium  which increases  profitability for both brand owner and retailer alike.  It's also worth at this point saying hello  to promotions . Promotions (price based) are to pricing and profitability what Loki is to Thor...very few brands exist in a market where they can afford to not promote their brand with the retailer. I was lucky enough to work on one , it was extremely  profitable;  but the retailers wanted activity and investment,  something I come back to  later.

Somewhat perversely  the presence  of inflation  after many years of negligible  inflation  has also made it easier for stronger brands in particular to raise prices  and in some cases when coupled with supply chain efficiencies actually improve margin. 

Retailers  will negotiate against a total  annual cash revenue  and  margin  based p&l, looking  at  both revenue, profit and  income , comprising both  non promotional and promotional sales plus the renting out of  paid promotional   display space ,as well as the income from store media  ;other quarterly or year end bonus payments will also be added into the mix, based on meeting targets from  an agreed joint business plan.  

The retailers will be looking for  annual  market share gains from their competitors,  the strength of the promotional programme as well as annual increases in both money and percentages,  but they will also stubbornly resist attempts from brands to increase prices and consequently  the price the consumer pays.  

Occasionally  there are public falling outs between retailer and brand owners about price,  usually  a retailer refusing to accept price  increases  ,leading to temporary punishment  delistings ;  generally  normal business  is resumed within a year or two but it is costly to both parties , moreso typically to the brand owner in kiss and make up concessions. 

The promotional  programme  plays an important role with the retailer  as it is seen as a direct investment in the joint business,a sign of commitment, as opposed to marketing nonsense which is just  money spaffed up the wall on media  for example. 

 Controlling  let alone manipulating consumer prices is  an indirect process, where in my experience in food brands   the brand owner is more focused on managing  average revenue and profit  across the year than the difference in consumer price point between different  brands,which is not something any consumer  would ever do...Conversely   we have  created a climate where frequent promotions  are used   to  distort  natural market  rhythm, sometimes by  the retailer sometimes  by brands to bring forward  purchases. Whilst this hurts competitors temporarily it tends to have limits , be it consumers running out of  space to store their promotional swag, or  brand owner profit dilution because yes, price promotions dilute profit and  don't build brand equity , and can  furthermore dilute quality  or luxury perceptions of the promoting brand.

In summary  building a strong brand be it unique or dominant is the best way to successfully leverage pricing for profitability. 

Do let me know what  is different in your industry or country, or what I've got wrong.

Find me on Twitter  @Runsforcoffee1  ; or on Mastodon  : @Runsforcoffee@ohai.social

DiAmoNDs aren't a brands best friend *(final.v.250)

I won't  be making any further reference  to Dungeons and Dragons. This is as close to an absolute as you'll get from me today,sorry. Also *apologies to the late Marilyn Monroe  for butchering  the title of her hit song "Diamonds are a girl's  best friend" from the1953 film "Gentlemen  prefer Blondes".

*Prologue: 

 1) There are no absolutes, successful marketing is  an ever changing context sport (did I come up with that ,or did I borrow from someone else?).

2)  Observe humbly and broadly ,Learn, experiment, apply,learn;repeat. 

*Introduction

Its all become a bit heated again on Twitter , so here's another unsolicited, resolutely neutral  and academically uninformed take,based entirely on my  packaged goods experience, which  spans two centuries.

I was stirred from my sick bed ( did I mention I have Covid yet?) by that hothead and  seeker of justice  Thom Binding @Slightly_Random  poking at another favorite  Marketing Twitter Sore,namely the meaning and value of differentiaton  vs distinctiveness. I'm deeply indebted to the articles by prof. Mark Ritson  @markritson in Marketing Week  @MarketingWeekEd ,and I have a flawed understanding of How Brands Grow 1.0 by Prof. Byron Sharp @ProfByron. I also read the recent LinkedIn post by Prof Jenni Romaniuk on the topic, and agree with her conclusion .

The parameters of discussion  seem to revolve around the following  areas of debate:

*Definition of the terminology  is as usual featuring strongly:

The meanings and thus the  differences  between  them are in the roots of the words themselves. Please do your own work  people. I think they're  actually  family. 

*The utility  of either in different parts of the marketing  landscape 

This is for me the interesting area. Contributors to this thread  have broken this down  into a number of constituent parts: Brand vs product,  and marketing  and operations as opposed to the comms world.

I think we need as ever to step back from our professional interest in marketing  and  be more focused on  being the voice of the consumer , for that is our job as marketers.

Wise people have been telling us for a while now that actually consumers aren't generally that interested  in our brands , or our ads, and I wager no amount of prawn cocktail  snacks and fizzy beverages in a late night  focus group will really  make them interested  in  what us marketers do behind closed doors , never mind argue about D&D.

So for me , for the record , in packaged goods  from a consumer first perspective  and working backwards and away from the consumer into the belly of the beast you  firstly need to be available, then  to stand out ie mental and physical availability ( distinctive get up and comms );if possible  better somehow  across one of the 4 Ps,  not necessarily  different , and then if you can be different in a meaningful way that's a good thing. If you're  selling blocks of cheddar say then the margins for differentiaton are  slim, but distinctiveness  is  certainly possible. 

The importance  placed on differentiaton  by some marketers, especially I would guess in packaged goods ,warrants  a little explanation.  Brand owners and retailers alike ( who still  overwhelmingly  control physical access to consumers ) demand improved odds on any and all lines stocked improving overall sales and category market  share,  not to mention profit ( did someone mention profit?) . The more a product  and  brand is  relevantly different from its  nearest competition  the more  pricing power and profit there is for the brand owner  and  therefore that line becomes unsubstitutable . In packaged goods  a large brand will benefit from distinctiveness  and of course habit /systems 1 behavior, irrespective  of whether it is also different or not  than a lesser known  competitor. 

Launching me too  products or brands is generally a short cut to nowhere in an open market landscape, with a) retailers having fairly brutal minimum  sales and profit threshold hurdles  to be reached within  a limited time frame, with twice yearly reviews and delistings  a feature in the UK at least; b) or unless the me too  brand owner is a market  leading brand leveraging   its market  or share of voice dominance  to copy the innovation of others.

 So, differentiaton is a good goal if meeting unmet needs, but distinctiveness  is a must. If you don't stand out simply you won't be noticed or bought. 

Examples of some brands with products  which had both differentiaton  and distinctiveness :  Vienetta, Marmite,Ferrero Rocher. 

Bonne Maman and Nutella deserve a special mention for distinctiveness  without any  technical  wizardry.

 I can't  really  think of examples of successful differentiaton without  distinctiveness  in an open market, but please do give me examples. 

D&D in brands you ask? In some categories the brand carries  a heavier 'look at me' burden than arguably the product ,  fashion and luxury goods spring to mind. I've worked in strategic brand development, in packaged foods ,and was  regularly  confronted by what I still  consider  if unqualified and unchallenged as  the  siren call of the mermaid luring us onto the rocks theory which says 'none of our competitors is in space x, we can own it, we should go into it'....

Where would you place brands like : Tony's chocolonely? For me it's both distinctive in get up and tone of comms  and differentiated in brand positioning.  product is fairly standard chocolate albeit in jawbreaking profile of chunks. Body Shop in its founder days was both distinctive in getup and product as well as differentiated

When it comes to the role of D&D in comms,  history  suggests  that the consumer is most likely to notice and be interested ie  comms more effective  when  messages focus on what benefits accrue to them by  choosing  our brand  and product , duly presented in a distinctive and entertaining  manner, rather than a focus on features in isolation .  Topically and perhaps fortuitously I do not work in the airline business  which is clearly  a very different  market to mayonnaise... and no I have not reinvented features and benefits thank you...

The debate about the primordial importance of differentiaton  or not is unlikely to be definitively  answered,  because no absolutes.... Only one company in my personal memory database put  differentiated Innovation  so high up the list , and that was 3M the inventors of Post It notes , where it was at one time  reportedly mandated that executives spend 30% of their time on breakthrough Innovation  projects.

In conclusion  I  believe  that for distinctiveness and differentiaton   the more you have the better  , just like distinctive assets.  But ultimately  of the two  distinctiveness  is more critical to business success. 

I'm going to go and probably  throw up now ,thanks to  covid and Crohn's disease holding a simultaneous  rave in my body.  I hope reading this is much easier on you than it was for me writing this ...

What's Brand love got to do with it?

 There is  an ongoing tension between different  viewpoints around pretty much every aspect of marketing  ,and  recently we have been discussing  on Twitter whether  brand loyalty exists(@paulmarkbailey) ,  those who are seemingly always down on our  own discipline(@derekwalker)  and points inbetween.  

I'm concentrating my comments  around  packaged consumer goods as it is my field of useful experience ; if you know or think different from elsewhere do please chip in.

The question of preference vs loyalty  is interesting  because  the debate  highlights  the need to embrace not only the ambiguities of human behaviors and the limitations of data to tell us what not why , but the importance as ever  of context , shared understanding of the marketing lexicon  and at a more  fundamental level the future of the world... or brands anyway. 

To over simplify /  dramatize  : If there's no such thing as brand  loyalty  and by extension   no such thing as brand added value why isn't everyone  just buying the cheapest , usually a perfectly  good enough private label (I'm talking lemonade not luxury look at me status brands )?

The main vectors potentially to this are :

* Consumer indifference and repertoire purchase :    when  consumer brand indifference meets product  parity, you get a risk of  wholesale substitutability.  Strong brands do exist  in my experience even in categories with little  product differentiaton or status , be it eg staple products like cheddar cheese here in Britain and elsewhere in my  professional travels.

*preference vs loyalty: arguably loyalty is a  somewhat loaded, psychological  term which does not belong in debate about  eg prepackaged cheese or toilet cleaner.

'Loyalty is preference'   seemed to be one marker in the debate ,  but I don't think that goes quite far enough. Loyalty  is  a  feature of   (some ) human relationships and for me it goes beyond  a transactional  relationship  which is  what most consumers have with brands; if brand x isn't available  they'll   happily  buy  brand y as we all  know.  Preference  as a concept is unburdened by any sense of obligation to follow through with purchase, unlike loyalty anyway so at a  nuanced minimum it is a more binding notion ? 

I would suggest loyalty  goes beyond logic and reason  and may entail a personal cost ; just ask long suffering supporters of  long term unsuccessful  sports teams. By contrast if a brand of  say mobile phone comes up with an altogether better functional  product  unless the pain of switching is too high it is likely  it will steal users from other brands or systems tied into its ecosystem of eg of apps and software.

*The importance as ever  of context:   

It is not loyalty  if the barrier to switching is too high for consumers, see internet providers , banks , utility providers, such that laws have been introduced  to protect consumer freedom to switch provider. In packaged goods switching  meets the  time pressured repurchase  habit with consumers spending literally only  seconds in front of a typical  or virtual  display shelf to find their usual choices, the vagaries  of negotiated  physical distribution and on shelf  visibility eg pack location and  number of facings, display within category  eg eye level vs top shelf or bottom shelf also play a role ; and  private label  often using  similar designs to leading brands, supposedly not copying as such but using established category ie brand leader  visual design colour  codes ...

*The commercial value of targeting loyalists vs all category consumers. 

Whilst I get and agree with aspects of the  prevailing belief  in the wisdom of targeting all consumers and that penetration is  the key objective , it begs one question  for me which is : what are the consequences  then for differentiaton and targeting  products against specific target consumers and their needs or CEPs?

Look to the cola brands as an example  of  wrestling with the right balance  between  brand campaigns  and brand block dominated  designs  vs  more product specific  approaches. It may  well  be true that consumers of full fat cola will also buy light  variants ( not gonna pick a fight with Prof Byron Sharp am I ..), but  as a traditional marketer I would argue they as products meet different  need states and have different benefits ,even though the consumer profiles  may overlap in the same person at some points , whether it be same person consuming  or as  someone  purchasing for a  family  unit.

Hope this contributes to the debate in some way ; do let me know what you think ...

Thanks again to marketing Twitter for sparking this piece, acknowledgements and attributions  * :Tina Turner; @paulmarkbailey ,@johnnieego,@andywheatley,@clayton_phillip,@derekwalker,@Jonlombardo ,@bruceclarkprof,@keerti007,@AtomicAdMan