market entry

Coach finally comes to Europe

Snapshot of the Coach web site

Coach and Affordable Luxury brand strategy

Coach -- a brand of hand bags from the US -- has frequently featured in class discussions during my marketing courses.  One could argue that its phenomenal brand success story can be attributed to a carefully orchestrated strategy of affordable luxury -- selling high quality bags at high prices, and at high volumes. In fact, its success has been so big that it has posted sales of $ 3.5 billion in the United States in the last financial year.

I knew about Coach not only from my nerdy MBA books.  I visited a Coach shop for the first time during my first visit to the US, back in 1994.  I went to a Coach shop again in 2000, when I was studying in Boston.

Both times, I was almost mesmerized by the almost magical effect that this brand seemed to have on those who visited its stores.  American women looked happy and proud to leave with a new status symbol in their hands.

But to the Europeans, spoiled by  a massive choice of high quality brands of hand bags, Coach has been literally unknown. With the competition so fierce, no wonder Coach waited for so long before entering Europe.

Coach in Europe -- lessons for other American brands

And finally, here it is. It chose to open its first European shop-in-shop in Paris -- a logical choice of the iconic capital of European fashion and style. The grand opening took place at Printemps on August 31st.

The distribution strategy that Coach will adopt will play an extremely important role for the degree of its brand success in Europe.  Provided it is able to compete with many European brands in the same product category, it will establish a good pathway for other American affordable luxury brands in Europe.

A specific US brand with a successful affordable luxury positioning is Victoria's Secret.  A sure winner on the US market, Victoria's Secret is likely to face a challenge of many established lingerie brands on the European market. It should closely watch Coach and learn lessons from its brand strategy in Europe.

Why venture capitalists should ask web startups about brand strategy

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. ((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!))

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.

Celebrating one year of Funky Brand Interviews

Photo collage

Today I have some important news for you!

At the end of June, SCHMOOZY FOX will be celebrating one year of its Funky Brand Interviews.  And in this respect, we have some great gifts to offer to those who want to build a funky brand!

Last June, an interview with Rowan Gormley, CEO of Naked Wines, a UK-based online wine retailer, marked the start of the new category on our blog, Funky Brand Interviews. Since then, SCHMOOZY FOX has published interviews with founders and top managers from such famous brands as Marlies Dekkers, Baileys, Tim Van Steenbergen, Theo , Biomega and others.
Today, we’re announcing a call for up-and-coming funky brands!

If you know talented and passionate entrepreneurs setting up an innovative brand, please spread the news to them!

Rules of the game

Very simple! All that we require is:

That you are a start-up, either just launched, or seeking market entry That you want to build a very successful brand to fall in love with

That your main industry is Consumer Goods or Services, particularly in the "affordable luxury" segment

Our prize

SCHMOOZY FOX will identify three semi-finalists, all of whom will be interviewed for our blog. Out of the three interviewees, we will select 1 finalist, who will also receive a:

FULL DAY OF BRAND AND MARKETING COACHING by SCHMOOZY FOX

It’s a great way to start building your brand awareness online through SCHMOOZY FOX's social media channels.  It's also a fantastic opportunity for ideas-rich and cash-poor start-ups to get smart advice on how to get on the right brand & marketing track right from the start!

How to apply?

Please write an email to olga (at) schmoozyfox (dot) com with the subject “Funky Brands”, or publish a post on our Facebook page, and tell us why your company is, or has the potential to become, a funky brand. For funky brand criteria, visit our blog.

Timeline

Submissions will be accepted until July 17th, and winners will be announced in August.

Please note that SCHMOOZY FOX’s past and present clients, as well as interviewees, are not eligible for participation! :)

Please spread the news, and happy schmoozing!