Here is my video on how to set up your own personal domain like ChrisBrogan.com or CharlesSipe.com and why it is very important for personal branding.

Personal Branding with a Personal Domain from Charles Sipe on Vimeo.

by Tom Asacker

Think about it: Brand value is all about distinction and scarcity. The brand appeals, in a particular way, to a particular group of people.  And that's why those people will:

1. Pay a premium for it (which results in increased margins);

2. Go out of their way for it (which results in increased margins; and/or

3. Talk about it and show it off to their family and friends (which results in increased margins).

So this struck me as ill-informed (from Adweek, 8/31/2009):

"Explaining that it was embarking on a search for a new advertising agency, VW vp of marketing Tim Ellis said, 'Our goal of rapidly increasing our volume in a mature market requires the Volkswagen brand to evolve into a more relevant mainstream choice.'"

"The Volkswagen brand needs to inspire our base of enthusiasts as well as reach out and captivate those in mainstream America."

Sorry Tim, but that's an oxymoronic statement.  Enthusiasts are not the same as mainstream.  Pursuing that goal is a commodity strategy destined for low margin, GM-like performance.  Instead, inspire your base of brand enthusiasts, and then empower and motivate them to inspire the mainstream.  See the difference?

This article has been republished from A Clear Eye, a great branding blog by Tom Asacker. It is licensed under the Creative Commons 2.0 license.

According to Millward Brown's Top 100 Most Valuable Global Brands of 2009 Report, the top 100 global brands have increased in value by 2% to $2 Trillion over the past year. Despite the global financial downturn, the top brands seem to be immune to the economic turmoil, if you trust Millward Brown's analysis. Some top brands seem to be excelling in the downturn like Apple and Amazon, while others have tumbled like Disney and Starbucks.

One of the biggest surprises is Apple's success despite the economic environment. Despite smaller wallets, consumers are still managing to pay for relatively expensive iPods and iPhones which sometimes require expensive AT&T data plans. This supports Millward Brown's analysis that the top brands are striving. This may be because consumers are looking for the most value for their money. They may sacrifice going to Starbucks for a month and make their coffee at home so that they can afford a new iPhone.

According to the report:

"Customers are not holding their breath during this economic volatility. They are adjusting their coping strategies, while remaining determined to purchase brands that contribute to the pleasure, quality, purpose, and security of their lives."

One of the biggest questions companies want to know, is whether the recession will cause a lasting change in the way consumers buy. One noticable change is the avoidance of conspicuous consumption as people try not to appear insensitive or greedy. Luxury brands still grew 10% in value, although this can be largely accounted for by growth in demand in China.

"Consumers are not in the mood for greed. And greed is not required for success. Once we are on the other side of the economic slowdown, consumer spending will pick up. But perhaps slowly, as people internalize the lessons of our recent boom and bust history. They will want quality, intelligently created, well-designed products. But they may not want one in every color."

The study suggests that even when money is tight, consumers will still spend on the strongest brands. Consumers know what they can expect from strong brands and are still willing to pay premiums for this assurance. The exception are brands that are perceived as unnecessary luxuries like a trip to Disneyland or a 4 dollar coffee.

This article was republished with permission from The Executive Marketing Blog

I once jokingly made the comment, "Starbucks is going to become the McDonald's of coffee". I don't think that is too far from the truth now based on recent events. Starbucks recently started promoting "value meals", a breakfast sandwich and a small latte for $3.95. They also started selling the instant coffee packets called Via for 3 for about $3. This may be part of a strategy to grow sales in response to the economic recession, but at what point does it become commoditization of the brand? You can now get a cup of coffee for less than a dollar, if you buy the Via instant coffee and mix it yourself. Has Starbucks lost sight of their vision to bring the experience of a Italian coffee house to the masses, and sacrificed it to maximize sales? I would argue that Starbucks has been on this path for some time, ever since they replaced hand ground coffee with automatic espresso machines and started with the drive-throughs which made their service more convenient but took away from the experience. That was the turning point where it because less about the Star and more about Bucks. However when you focus too strongly on the bottom line and not enough on customer experience, the brand starts to die and you start looking more like a commodity.

Has Starbucks become a value brand like a WalMart or a McDonald's? This may not be such a bad strategy when you consider the millions of Americans who have become accustomed (or addicted) to picking up a cup of coffee at the drive through on the way to work. Having a prepared cup of coffee every morning has become more of a need than a want. Starbucks will probably have tons of customers who need their services for many years to come. But, when you sacrifice the quality associated with your brand by becoming ubiquitous or selling your product in a powdered form, you open yourself up to be easily substituted. Is Starbucks that much better than the corner espresso stand where the barista still knows your name? If a Starbucks clone, such as a Caribou Coffee or a Tully's is convenient, will people still go the extra mile to have Starbucks?  One of the major problems with a value focus, rather than a brand focus, is that $4 dollar coffee is rarely a value. Now it's McDonald's that is trying to be different from Starbucks with a recent billboard that read "4 Bucks is Dumb".

Photo by Robert Couse Baker

Apple's Mac vs PC ads seems to be moving the needle on perceptions of the PC as evidenced by their significant growth in market share. 

An article in Computer World states "According to Gartner Inc.'s preliminary estimates, Apple sold 1.64 million machines during the period, a 29% increase year-to-year over the same period in 2007, to put it in third place behind Dell Inc. and Hewlett-Packard Co. For the quarter, Apple accounted for 9.5% of all the machines sold in the U.S, up from 8.1% a year ago and 8.5% last quarter." 

Let's look at how Apple has been able to execute a strategy that effectively attacks the competition. 

Firstly, Apple actually attacks the category they are in, since an Apple computer is technically a personal computer. Apple has positioned themselves as being so different than other PCs that they should be in their own separate category. When Apple attacks their competition, they attack the whole category which is quite rare in marketing. Usually we see the smaller brands singling out the leader and attacking them, but not one brand positioning themselves against the whole category. I can only think of one other example of this, in which 7-Up successfully differentiated themselves against the other carbonated soft drinks by proclaiming themselves the "Uncola". Additionally, Apple attacks the PC in a humorous way, often making fun of the PC's vulnerabilities to viruses, the difficulty of use, and so on. The audience views these ads very favorably, while they are associating a lot of negative attributes to the public perception of PCs. Recently when Microsoft tried to counter the attacks by showing various people saying they are a PC, Apple responded by directly attacking Microsoft's disappointing Vista.  

This is classic brand warfare and Apple's superior marketing strategy is key to its growth in sales. While it would be difficult to duplicate the campaign's success, there are valuable lessons that marketers can learn from Apple's success. Instead of directly attacking a specific brand, attack whole category to differentiate your brand from the rest of the category. When attacking others, do so in a light-hearted way, as it can preserve a favorable image while still undermining your competition. But when a competitor fires a counter shot, respond immediately with equal or greater force. 

Image Source Joi

In a move that is not getting nearly enough bad publicity, Warner Brothers completely betrayed fans of the Harry Potter movie series. The sixth installment of one of the largest movie franchise of all time was delayed from its original theater release in November until July of 2009, a delay of 8 months! The problem I have with the move is that days before the announcement, they released the first teaser trailer of the movie which gave a November release date. The reasons given by WB for the delay, according to the podcast Mugglecast, are due to the unexpected success of The Dark Knight and the writers strike. Ultimately it came down to putting profits in front of customers.

While this move will not likely hurt ticket sales, it reflects badly on Warner Brothers. There are even passionate fans who have started a movement to boycott the films. Over 43,000 people have signed a petition at Petitionspot.com to have the release date moved back to November. This is not the first time Warner Brothers has made questionable marketing decisions. They have been known to attack the very fansites of their most passionate customers who are promoting their movies. To not keep their promise to customers is one of the worst marketing crimes a company can commit. Warner Bros. is certainly not a company that puts customers first and deserves a whole lot of rotten tomatoes.

Be Ubiquitious

Once a brand becomes too ubiquitious it loses a lot of its value. Starbucks density has been well chronicled in the media and even the Simpsons. The tradeoff with being everywhere is the loss of scarcity. A premium brand can not be everywhere because it becomes ordinary. That's when it becomes a commodity and is no longer worth the premium price. The thing that made Starbucks different was the experience, but that is exactly what they sacrificed when they tried to multiply it a thousand times. You can not have the authentic European coffee house experience when you build a thousand cookie cutter stores.

Hire a Villian CEO

Howard Shultz just became one of the most hated public figures in the city of Seattle. Shultz bought his home town's NBA team and then sold it to investors from Oklahoma when the city would not make renovations he wanted to the team's arena. Now the Sonics who have been in Seattle for 41 years are moving to Oklahoma and thousands of passionate fans have been turned into brand terroists, which is the opposite of brand evangelists. Not what you want in the city where Starbucks is headquartered.

Listen to the Stock Analysts

If Starbucks would have listened to their customers rather than the stock analysts they wouldn't have sacrificed the European coffee house experience to keep up with growth forecasts. They added greasy breakfast sandwiches, crowded the “third space” with coffee machines and merchandise, and rushed to open new stores to grow profits, while sacrificing the level of service.

Can the Starbucks brand be saved? Closing stores is a good start. Closing Starbucks in grocery stores that are not even staffed by Starbucks employees would be another good move. If Starbucks is really serious about the dilution of the brand they should close drive-throughs. My prediction is that Starbucks will survive, but their price premium strategy will become increasingly ineffective and they will be forced to evolve into the McDonalds of coffee.