Photo by Jus' fi on Flickr

Should startups worry about brands?

This is the question that a venture capitalist from Silicon Valley, Larry Kubal, asks in his thought-provoking article.¹

Kubal’s short answer is YES. According to him, venture capitalists should make sure that brand is taken care of by web startups before any investments are made, “For VCs currently paying far more attention to consumer facing Internet businesses than they have in quite some time, ‘word of mouth’ has taken on a whole new meaning.”

ELEMENTS OF BRANDING

The elements of branding that Kubal gives as important to consider by startups (and venture capitalists who assess them) boil down to:

• viral marketing

• intuitive messaging

• word of mouth branding

But are these the only elements of brand that startups should worry about? In my experience of working with companies seeking market entry, the notion of brand goes much deeper than this.

DIG DEEPER!

Venture capitalists should dig much deeper into brand strategy when they do their due diligence on startups.

Especially when it comes to web startups, my experience is that techies may well think about going “viral”, but what they are often not well equipped to think about is the consumer, as well as product design suited for the consumer! They often assume that consumers are as “geeky” as they are themselves!

So, it is not only a detailed plan of how a startup plans to be viral that venture capitalists should look for when they do their due diligence about brand.

They should dig much deeper than that. Good branding is not only about promotions and word of mouth. The key is to assess whether a startup thinks in terms of brand strategy or not.

WHAT IS BRAND STRATEGY?

A brand strategy begins with product design and consumer intelligence, and continues through the design and delivery of promotional materials, promotional strategy, customer dialogue, distribution…. All of which is important if you want to build a funky brand.

Importantly, a good brand strategy should be embedded within the company’s DNA. If you don’t get the DNA right from the start, it will be very hard to fix later – you simply can’t afford your company DNA, and with this, your brand strategy to be an afterthought!

WHY STARTUPS RARELY THINK ABOUT BRAND STRATEGY

Unfortunately, thinking in terms of brand strategy is very rare among web startups, for various reasons. I’ve touched upon some of them on several occasions. For instance, see SCHMOOZY FOX’s thoughts about web and mobile startups here or check our tips on how to craft a smart marketing strategy if you are a web startup.

Of course, VCs might themselves be more attentive to these aspects than the average techie. One would certainly hope so. Nonetheless, the fact remains that huge amounts of time and money – including VC money – are poured into web enterprises that have no chance of taking off because they have not thought through consumer needs, product design and communication.

SCHMOOZY FOX works with web startups to help them incorporate brand strategy early on into their recipe for future success.

1. The article was published by The Venture Capital Journal in November 2005. You can download the full text from this page , scroll down to “November 2005”, it’s there! [↩]

Today I want to draw your attention to the two new groups on LinkedIn recently created by SCHMOOZY FOX.

First, there’s a group called FUNKY BRANDS.

Here is a direct link to this new LinkedIn group and I invite you to join it!

Another LinkedIn group recently created by SCHMOOZY FOX  is called Affordable Luxury.  It is also very relevant to all those who are in the business of building innovative, striking (aka “funky”) brands. Here is the direct link to this LinkedIn Group.

In one of my previous articles called How Funky Brands Can Be Profitable, I discussed how a consumer product or service could succeed if positioned in the affordable luxury segment.  This segment can also referred to as mass luxury or new luxury.

From SCHMOOZY FOX’s perspective, there’s a close link between two groups.

In fact:

The Affordable Luxury group falls nicely with the concept of funky brands.

There are several ways of looking at it.

In fact, most of SCHMOOZY FOX’s clients are consumer goods or services seeking to craft a brand strategy that will aim at their positioning as affordable luxury brands. And in our experience, most funky brands are exactly affordable luxury products or services!

Just have a look at our Funky Brand Interviews with all those brilliant businesses that have been built based around such elements as creativity, design, affordable luxury and fun!

SCHMOOZY FOX invites you to become members of one of both groups on LinkedIn!

Schmoozing and fun are guaranteed!

I’ve already written about the trend of giving Russian or Russian-sounding names to products and brands in my post Baboushka branding or a bit of “Russianness” in marketing. In that blog post, I talked about a seemingly persistent trend among US and European companies to take inspiration for product and brand names from the Russian language.  Specifically, I talked about a concrete fascination by the word b a b o u s h k a.

And here is another baboushka story for you!

I’ve just come across this post about a recently redesigned bottle for an Australian-produced vodka called Baboushka. While purely from the design point of view I find the bottle design quite okay, there are some details that struck me in the text of the article, namely:

1) According to the article, the agency that redesigned the bottle, “built an emotional brand story around the existing ‘Baboushka’ name avoiding Russian vodka inspired clichés.” I wonder  how  can such a truly Russian name allow one to avoid Russian cliches, and why would one even want to avoid them?  Baboushka is just a common noun in Russian, there are no real stories attributed to it, at least in the context of its common use.

Image of Baboushka vodka. Incorrect Russian text is underlined in red

2) The Russian text on the bottle does not really mean anything.  I guess that «Премия водка» was an attempt to translate “premium vodka”, quite unsuccessfully.  I suggest to brands that try to seek inspiration from foreign languages and cultures to always check with qualified people who speak those languages first! 

To conclude, the use of “baboushka” in brand discourse never stops to surprise me.  I think there’s even some additional meaning that’s been developing around this word outside of Russia, and some Russian-speaking linguists should definitely look into it.

As far as brand strategy goes, my advice is to check the spelling and meaning of foreign words you put on your packaging.  This will surely help you avoid some surprises!

I’ve just come across a series of thought-provoking posts on springwise. Their common theme is brands trying to build loyalty with online tools. Whereas some of them do it in a democratic and “inclusive” way, others opt for “exclusivity”. Let’s see how this might result in their brand positioning.

One article describes a hotel in NYC which has set up an online forum for its guests. The Pod Hotel offers budget accommodation for young travelers, and the forum is a brilliant solution to help them connect to each other in real life, and have fun together in NYC. It clearly addresses the pain particularly of those who travel alone and don’t know anybody in New York City.

Snapshot of Pod's online forum for registered guests

This is a brilliant idea, and The Pod Hotel is surely on the good track of creating some valuable loyalty with this simple online solution.  My advice is that it should definitely do a bit more to make this feature known on its website. As it stands now, the site fails to communicate it. I don’t know if it’s a planned move or not. If yes, I suppose that the reason might be that the hotel works at capacity most of the time, in which case the forum is only there to trigger repeat visits rather than recruit first-time customers.

Another idea featured on the same site is an online social network launched by the airline KLM. The online network is not targeted at all KLM’s customers, but only frequent flyers.

For the moment, KLM has set up two online communities — one for China, and another one for Africa. Essentially, the main target is entrepreneurs who all share the same challenges working in emerging markets.  They can discuss issues of common interest and network online, which triggers encounters offline.

KLM even organizes offline networking events for the online community members both in China and throughout Africa.  KLM says that its online social community is “exclusive” and by invitation only.  My guess is that this exclusivity is tied to KLM’s reward program which actually makes sense.

Think of it: the more you fly, the more chances you get to meet like-minded entrepreneurs. And the better you should get rewarded by an airline company for your loyalty.  So, this kind of “exclusivity” achieves both goals — it rewards frequent flyers whilst giving them a possibility to socialize.

A snapshot of KLM's online community for frequent flyers

I also want to address another kind of “exclusivity” which rarely does anything good if a brand seeks positioning in the luxury or affordable luxury segments.

I’ve come across many brands, especially various online shops, which try to create an aura of exclusivity out of …. well, pretty much nothing.  I find it amusing when some freshly launched site writes  me to become their member “by invitation only”and start shopping there.

In this respect, the example mentioned on springwise is Claseo, a recently launched “luxury” label. Unfortunately, it’s not possible to have any idea about how luxurious its designs are because you can’t enter their site. The reason is that the site is “exclusive” and by invitation only.

Snapshot of the invitation-only site of Claseo

I think it’s counterproductive to seek positioning as a luxury brand through such self-limiting “exclusivity”.  Whereas this might be feasible in instances when brand equity is already at its peak, this move is rarely a good solution for a start-up.  This is particularly true for web start-ups.  Building a user base is of ultimate importance for them, and certainly a key to creating a strong brand.  I have written and spoken about this on several occasions.

Looking at three examples above, the “inclusivity” of the budget hotel in New York in fact makes it truly exclusive. By solving the real need of its customers — a simple human desire to socialize — the hotel succeeds in occupying a very lucrative segment of affordable luxury.  The same refers to KLM’s online social network for frequent flyers, which helps entrepreneurs connect and socialize in real life.

Funky brands are smart because they understand what true luxury is, and although it may sound counter-intuitive, in many cases being inclusive and democratic, rather than “exclusive”, is what really helps build a great brand!

Photo by PinkMoose on Flickr

I’ve already written before about tag lines, or brand slogans. To put it briefly, a successful tag line is similar to a chat up (or pick up) line: it triggers interest and the “chattee’s” wish to explore the “chatter” further, without giving away too much information about the “chatter”. You can also think of it as your tiny elevator pitch: it gives enough clues for what the product or service is about, triggering further interest to discover more.

Giving your tired brand a catchy tag line can sometimes revitalize your business, and spark the love of more fans.

I’ve already shared my list of criteria for a successful tag line, check out the blog post What’s your brand’s slogan?.

But what is actually the process, or technique, of coming up with a juicy brand slogan? True, sometimes you’d come up with an amazing tag line (or even a company name) in your dream, or while jogging in the park, but it’s of course difficult to rely on these strikes of genius. There is, however, a bit of a nerdy nerdy way forward:

1) If you are a brand and marketing nerd, do a proper brand audit of whatever brand you are working on. Shake up the old stuff, and see what has been done to the brand in question in the past. Ask questions. Challenge.

2) If you not a marketing nerd, then you gotta find one to help you with this task.

3) The brand audit will be a good preparation before you start crafting a new brand concept, based on some concrete data about your consumers, and/or making assumptions where necessary.

4) Identify the main brand values of your freshly baked brand concept. Some companies come up with as many brand values as possible, but my advice is to keep a number of brand values to maximum 3 (this number can of course change depending on a concrete brand in question!).

5) Brainstorm a catchy brand slogan based on the identified brand values. You don’t have to be direct and declare to the world that your car brand is “all about cars”. This is something that your potential customers will find out anyway. Instead, flirt with your customers and communicate in a fun and intriguing way — after all, you want to build a funky brand, right? Maybe your cars are all about giving the sense of being ultra-funky, and contemporary in an urban environment. Or, they can give us a sense of freedom each time we drive across the fields. In this way, the word “car” might not even show up in your brand slogan at all!¹

There aren’t actually any exact rules of how to organize a brainstorming session. It’s really not exact science, and each brand consultant will have her own set of creative boxes to tick to come up with a brand slogan.

In the case of SCHMOOZY FOX, we combine the necessary knowledge of business and brand strategy with creativity and the knowledge of linguistics.  The latter helps us to make sure that your brand name and brand slogan don’t sound strange in the countries where you operate, and that the subtle associations with the desired brand values are evoked by carefully selected words.

1. After all, Just Do It doesn’t have the slightest mention of “sneakers”! [↩]

We probably all know that successful brands often structure their communications around stories, or narratives.  But have you noticed that people who like these brands are even better at referring to them in the context of broader, coherent stories? This is not surprising, as brands are becoming important elements of the contemporary consumer culture, and we simply can’t separate them any more from our everyday lives.

An interesting read in this respect is an academic paper (I read a lot of those — funky branding is often quite a nerdy activity!) Towards a Narratology of Brands? ((Towards a Narratology of Brands? Marius K. Luedicke, University of Ititisbruck, Austria Markus Giesler, York University, Canada, published in European Advances in Consumer Research Volume 8, 2008)). The most interesting observations, in my opinion, are: (more…)

A significant advantage that successful luxury brands have, is that they have a good chance to launch diffision brands.

Diffusion brands are a form of a brand extension, discussed before.  They are “step-down line extensions of existing  luxury brands, normally less expensive than the  main-line merchandise.”¹  They are often called second lines, subbrands and endorsed brands. Think of them as “children” of their more established (more…)

1. How Young Adult Consumers Evaluate Diffusion Brands: Effects of Brand Loyalty and Status Consumption, Ian Phau Edith Cheong , Journal of International Consumer Marketing, 21:109–123, 2009 [↩]

Photo by Nelson Chee on Flickr

Funky brands evolve, they are not static.  In spite of being able to stay true to its authentic values and brand vision, a funky brand is nevertheless able to keep its finger on the pulse of consumers, experiment and surprise them.

BRAND RE-VITALISATION TECHNIQUES

I have already discussed several techniques that brands use in order to stay contemporary and fun.

Line extensions occur when a company “introduces additional items in a given product category under the same brand name, such as new flavours, forms, colours, ingredients or package sizes.” 1.

Example is Starbucks introducing a line of instant coffee, Starbucks Via.

Brand extensions are more radical ways of either capitalizing on the success of your already popular brand, or bringing some fresh air into the otherwise old and tired brand image. A brand extension is “using a successful brand name to launch a new or modified product in a new category.”2

Example: a brand of bananas Chiquita and its new line of fruit juice bars.

BRAND PARTNERSHIPS, OR CO-BRANDING

True to its “schmoozy spirit” (schmoozing is the term I discussed before), SCHMOOZY FOX is fond of brand partnerships.

They can be particularly interesting for you if your brand does not yet plan to launch a whole new product line, or extend into a totally unexplored area.  Then perhaps a brand partnership is something to keep in mind while you are searching for a strategic direction. Brand partnerships are also referred to as co-branding.

A brand partnership is usually a short or medium-term collaboration between two or more brands in order to enhance each other’s positioning vis-a-vis the target market.

FASHION AND HOME ACCESSORIES

A recent trend that I’ve been noticing in the mass luxury (also called new luxury) market is this: fashion brands partner with artists and designers to create home accessories.

Here is a recent example of this trend that I came across in a Dutch magazine (forgot its name )

Diesel lamp

This is a lamp that is a result of a brand partnership between Diesel, Foscarini and Moroso.

Another example is a recent partnership between Levis and fashion designer Veronique Branquinho. The suprising result of this partnership is not actually related to fashion at all.   It’s …. wall paint that is sold under a slogan Fashion for Walls.

Watch this space for more examples of brand partnerships.

1) Principles of Marketing, P. Kotler, 2002, p. 478

2) Kotler, Principles of Marketing, 2002, p. 479

Here is a photo of a magazine back page that I took this morning. It made me think of a new trend that is emerging in the area of celebrity endorsements: business celebrities as brand ambassadors.

Even if you are not familiar with the term, you’ve most probably come across brand celebrity endorsements on many occasions.  These are short or long-term partnerships between a brand and a real person, usually a celebrity from the world of music, sports or movies. If you’ve seen ads with Hollywood stars next to cars, perfume or other products, then you’ve seen a celebrity endorsement in action.

In such brand partnerships, celebrities serve as the so called meta-brands: overarching, superior concepts that add  positive associations to other brands wanting to relate to them. For celebrities, it’s also important to choose the right brands to work with, because at the end of the day, they have to pinpoint these people’s personal brands.

My observation that I want to share with you today is this: most brands, especially luxury products, like to work with celebrities from the world of entertainment and sports.

However, it seems like there’s a whole new trend emerging out there: celebrities from the non-entertainment world. They are not as widely known as entertainment stars, but they nevertheless have a lot of qualities that brands can tap into and benefit from. This trend is not yet very well explored by brands, it seems.

A concrete example that I want to share with you today is the recent brand campaign by a Swiss watch brand Maurice Lacroix. In particular, its brand partnership with Jimmy Wales, an American Internet entrepreneur and co -founder of Wikipedia.

The two other brand ambassadors that Maurice Lacroix chose — Bob Geldoff and Justin Rose — come from the worlds of music and sports, respectively. But Jimmy Wales is a businessman whose name is known to a lesser extent.

What’s known much better is his non-profit foundation: Wikipedia.

What did Maurice Lacroix want to communicate by selecting Bob Geldoff, Justin Rose and Jimmy Wales as its brand ambassadors? I guess, the most important qualities that seems to unite them all are continuity, staying on course, and staying true to themselves. And of course, achieving results.

As brands look for authenticity and natural, not-too-commercial, ways of connecting with their consumers, we’re likely to see more entrepreneurs, journalists, and other people outside of the entertainment world with strong personal brands, endorse products and services.

I just came back from Paris, where I attended the show of a talented Belgian designer Tim Van Steenbergen and discovered some up-and-coming funky fashion brands.

While experiencing the Paris Fashion Week first-hand, I thought of the importance of such an event which has a very distinctive brand. It is in fact what one could call a meta-brand. In other words, it’ s an overarching, superior concept that adds usually positive associations to other brands that want to relate to it.

Think of the Oscars. Taking part in the Oscar ceremony, being nominated for the main prize, and of course, winning the Oscar gives huge credibility to those movie industry participants who are lucky to be part of this event. The Oscars nomination ceremony is a meta brand for all those that can and want to benefit from it.

In a similar way, Paris Fashion Week is another such meta brand that helps participating brands propel to the fame and greater brand awareness. Paris Fashion Week is the fourth in a series of other major semiannual fashion weeks. The “big four” take place in New York, London, Milan and Paris.  Fashion collections are shown several seasons in advance so that fashion buyers have a chance to prepare their stock in a timely manner. For instance, right now in Paris designers are already presenting their Autumn-Winter collection for 2011.

After catwalks are over, designers and their teams quickly prepare show rooms that are visited by fashion buyers from the world’s leading boutiques and luxury department stores. Some successful fashion brands manage to ensure their annual turnover just in a matter of a few days, with all of their stock being ordered by a handful of leading fashion boutiques.

In this sense, there are many immediate and tangible benefits from taking part in fashion weeks, as they are a great way to ensure sales for participating brands.

It’s only the world’s leading fashion houses that present their collections during Paris Fashion Week. But curiously, the spill-over effects of this meta brand can also be beneficial for some much smaller brands and fashion start-ups. It seems that many rent small show rooms and promote this fact within the framework of Paris Fashion Week, even without being able to afford higher level participation in catwalk shows. In this sense,  even without a guarantee of large-scale sales, such small brands can benefit from intangible spill-over effects on their brand awareness from the Paris Fashion Week meta brand.

Also see my funky brand interview with co-founder of a funky-to-be T-shirt brand Lotty Dotty that I discovered during Paris Fashion Week.