Don’t Save A Dollar, Save A Brand
I clearly and distinctly recall the year 2001. Our Samsung Electronics North America sales and marketing team were working long hard hours to build market opportunity. In this same year Vice Chairman Yun announced publicly that Samsung would break away from legacy competitors by ceasing the manufacturing of analog products to be replaced with leading edge digital products.
The vice chairman’s quote: “Samsung is no longer a provider of technology, rather we are a global creator of digital experiences.” I also recall spending quality time with Samsung’s factory product designers and marketers at the end of 2002. We enjoyed a wonderful dinner together in Seoul, where I surprised the room of many by performing several classical compositions on a beautiful black ebony piano. I recall expressing the need to create TV cosmetics differently. To design cosmetics like a beautiful baby grand piano with ”16 coats of black lacquer paint.” That so many in America owned a grand piano considering it the most beautiful piece of crafted furniture in their home: regardless if they were able to play it or not.
Samsung launched in the following years the most beautiful, seemingly black lacquer HDTVs that direct competitors refused to duplicate, to capitalize for their own brands. After all, Samsung’s early 2000 years brand reputation was not as the market leader but rather contained to weak retail shelf space, a modicum of market share and fair consumer product respect. With this record, just why would competitors follow Samsung’s advanced digital product and cosmetic designs? Samsung Electronics incredibly fast rise in consumer demand, brand value and market share over the decades tells the brand story best.
Product differentiation, whether through technology, cosmetics, design, pricing, packaging, apps and or a combination of all abates destructive price commoditization and brand sustainable profitability. Differentiated creativity creates a brand’s most valued advantage: emotional capital. Creativity within any one or all of these key brand stimulators is in essence a brand's greatest selling fuel, a hyper-injection of brand value, a juggernaut of sustainable brand power. The unvarnished reality: Well prepared product creativity and differentiation allows any brand to escape commodity hell by building consumer desired emotional connections.
We know the goal for any brand is to earn extra profitable pennies through each inventory turn to afford reinvestment for future product and brand greatness. Within our highly competitive consumer electronics businesses, product and price commoditization creates a multitude of brand-fiduciary problems and brand-fiduciary opportunities. Brands that attempt to market-compete through de-leveraging price declines create a rash of unintended consequences. Consumers are highly trained for decades to assume cheap prices means cheap quality, cheap brands, cheap service and cheap support. Orchestrating scorched-Earth price declines without the greater muscle of superior quality, cosmetics and or product features anticipates the final chapter of product opportunity sadly recognized as brand evaporation. It foretells the end of the brand, the end of invested shelf space, the end of your recurring brand-voice-annuity once promised to accelerate the launch of future products, to achieve market greatness.
Don’t save a dollar, save a brand! Gen One Ventures offers four proven market leader principles to best motivate healthy, profitable results through building brand infatuation, competitive product demand:
1. Pre-product development in congress with merchant and consumer market sensing is essential to assure any brand's short and long term profit muscle. To strengthen and lengthen brand profitability while weakening and shortening brand commoditization, always review your intended product assets and feature capabilities (pre-tooling and pre-architecture) with local consumers and merchants. Their feedback, suggestions and council shapes superior brand value, price elasticity, competitive sustainability and market demand.
2. Force smarter product differentiation not competitive market confrontation: Your best defense in product development is a differentiated offense. Of course this product posture portends early and often ambient cooperation amongst product designers, factory leadership and local/global marketing team members. Each of these groups must have one eye on the market, one eye on technology and two ears on market centricity, market creation and demand. Five globally savvy companies I suggest have perfected and proven over time their greater ability to fuel brand prowess, detain and digress competitive commoditization and earn profitable market demand and results are: Samsung Electronics, Apple, Monster Products, LG and Vizio. Any questions, just review their assiduous market growth and well documented claim to profitable brand value, profitable inventory turns.
3. Advertising does not make a market, your products do: Your brand is your product promise. Your product is your brand promise. This bi-modal promulgating relationship must be the core engine of your brand. That will be the best bet for your employees, your stockholders, your retailers, your targeted consumers, your global product forecasts. Trust me, trust the historic results of Samsung, Apple, Monster, LG and Vizio. They have each proven “if you build it, they will come and they will come profitably.”
4. Any brand can differentiate its products. The question is how to creatively best differentiate versus competitors to avoid fast recessed price commoditization. Brands today have so many additional product-asset-weapons compared to a decade ago at their disposal to make and take a market especially fueled through the addition of smart apps, internet provisions, mobile attributes and relevant socially charged networks.
Peter Weedfald is president of Gen One Ventures and author of Green Reign Leadership
Peter Weedfald is the Senior Vice President of Sales and Marketing for Sharp Home Electronics Company of America (SHCA). He has also served as President of Gen One Ventures, SVP, Chief Marketing Officer of Circuit City, SVP of Sales and Marketing in North America for Samsung, and SVP of global marketing and EEVP, GM & Chief Marketing Officer for ViewSonic.