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The voice of the brand strategy consultancy, The Portnoy Group Inc.

The Brand Man Speaks is a dialogue about the consuming world in which we live and a guide to successfully navigating it. The goal is to educate people and companies about branding, the most powerful yet misunderstood business tool.

To learn more about branding and The Portnoy Group visit our website. Click on the link above, or click this link to the The Portnoy Group Blog Contact Page. 

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6 posts from March 2011

March 23, 2011

Luxury goods brands seeing notable increase in consumer demand in Europe

Despite the slowly improving world economy, which might actually be facing a set back for a while given what has happened in Japan, luxury goods manufacturers and retailers indicate business is again booming throughout Europe. Why?

The obvious first answer is that the Chinese have become avid luxury brand buyers especially when they travel to the countries where the goods are made. The Russians are to a lesser extent increasingly big buyers of luxury. A less obvious answer seems to be that well-to-do European consumers (French, Italian, German and British--both real and aspiring) are better off than their American counterparts (their financial situation is better because they save more, get more support from their governments and overall maintain their standard of living better than US folks).

What is most interesting to me is "our" thirst for expensive items in our lives. The need to have and to show we are still "doing well" and possibly better than our neighbor. A need to feel flush with the purchase and ownership of truly non-essential although beautifully made items.

Luxury branding has made what seems to be a fairly permanent impression on consumers across the globe. Not just among those who are always rich, but also among those who want to feel rich. It seems consumers still have an insatiable appetite for all things luxury that despite bumps here and there in financial markets will prevail.

An article in today's WSJ indicates that the major lux brand names are all seeing notable increases in sales. That would include Hermes, Gucci, Yves Saint Laurent, Bulgari (just bought by LVMH Moet Hennessy Louis Vuitton SA). Many of these and other lux brands are investing in new and remodeled stores in key European cities to address the uptick in demand and show a renewed "refreshed" approach to appealing to the lux buyer.

Branding lives another day exceedingly well.

Watching out for you everyday.


Speak Up

March 21, 2011

Wal-Mart to return to low price- value proposition store-wide to try to boost sales

Sam Walton would have never let Wal-Mart go so off course for so long. His brand proposition of low prices on virtually every item was a simple straightforward mantra that built Wal-Mart into a retail giant.

Unfortunately, too many executives (non family members) decided post Walton that Wal-Mart could be everything to everybody and not upset the brand relationship consumers had with the company. They mostly failed and after several years of disappointing sales and profit reports US GM William Simon has announced he is taking the company back to Sam Walton days (in a manner of speaking). Finally!

Wal-Mart's brand was a very clear one for years and one to be envied and copied. Target knew they could not win the price battle so they infused a price strategy with a design focus aim at bringing in consumers who shunned Wal-Mart's bare-bones approach to retail but wanted value and style in a comfortable "I feel ok to shop here" environment.

Surprisingly, Wal-Mart execs decided they were not satisfied with their success strategy and mucked with it. They tried to take elements of Target and add them into Wal-Mart. They brought in upscale merchandise that failed miserably. They tried to upscale the look of the stores only sending a signal to core buyers that prices were going up on everything (not down). Not only was perception impacted but also reality. Prices were being raised by Wal-Mart wherever they thought they could get away with it. ( A recent study showed Target was cheaper than Wal-Mart on many items). Now the focus back on brand basics.

They pay these executives a lot of money yet they all failed to understand the key tenets of branding. Any smart brand consultant could have saved Wal-Mart millions of dollars in lost sales by advising them to stay the course and reign supreme as the price leader everyday on everything. Their modified brand was hurt even more by the recession as consumers moved to lower priced smaller retailers like 99 cent and Dollar stores for their staples given their perception that Wal-Mart was no longer the price leader.

The good news for Wal-Mart is that they are so dominant they will be able to recover quickly as long as they stay true to the core brand strategy for sometime to come.

Watching out for you everday.



Speak Up

March 15, 2011

Netflix stock rises amidst a major down market set off by signficant worries about Japan and its global impact, why?

Admittedly, I am a fan of Netflix (own some stock and am a subscriber) and watch consumer companies from the perspective of empirical evidence. That is why I am not surprised by Netflix's recovery from a few weeks of declines after many weeks of sharp increases in stock price.

Here is my reasoning, from a consumer marketing point of view.

Netflix was a game changer of sorts when it first surfaced and has helped dramatically change the way we view entertainment at home. Although the economy is improving, I still see consumers spending a lot of time at home enjoying their upgraded entertainment viewing options. Even today the average home has at least one flat screen, many have multiple units, some homes now have 3DTV. DVDs, DVRs, Apple TV Xbox, Playstation among many other toys allow consumers to make choices about their viewing options and times. With the technology to easily view major movies shortly after release either downloaded to your computer or streamed to your TV set, we have so much entertainment at our figure tips.

The key is I do not see consumers spending much more time OUT of the home for some time to come. Since Faith Popcorn and her concept of "cocooning", Americans as well as consumers around the globe have spent trillions upgrading their home environments to make them more comfortable and not worth leaving. With the housing problem still at hand, it is still too expense for many to go out to the movies, dinner and pay parking etc than staying at home.

And this week, after the disaster in Japan, most financial markets are reflecting gloom and doom, with good reason. However, as things get worse again economically around the globe before we see another turnaround, it is more likely that consumers will retrench into the home environment more, cut back on travel, dining out and other disposable income activities.

Another reason for Netflix success:They seem to be pretty shrewd business folks keeping satisfaction high among users while providing frequent new opportunities for their loyalists to stay loyal.

Additionally, the idea that the Netflix brand name will appear of many TV set remote controls in the very near future (if not already) is a huge win for the entertainment provider keeping their ID in front consumers everyday and having virtually no competition in front of the consumer when they begin the entertainment choice process. How amazing is that?

Pretty amazing to me.

Watching out for you everyday


Speak Up

Aflac, the insurance company known best for its speaking duck fires its "voice"

Aflac the health insurance company brand that has become best known for its duck character and its voice has dumped actor Gilbert Gottfried who played the voice.

Why? In what seems like a stupid and completely insensitive activity, Gottfried used his twitter account to make unpleasant even mocking comments about the disaster in Japan. This was especially painful for Aflac because over 75% of its insurance business is based in Japan. Aflac's CEO took this action immediately as well as jumped over to Japan to help victims of the quake and its aftermath.

In a similar move Sharon Stone was dumped by Dior a while back for making stupid comments when a major earthquake hit China. She indicated that the earthquake and its devastation was caused by Chinese violations of human rights. She deemed it Karma.

As I have written about before, using celebrities in advertising has major risks since quite a few seem to think their elevated status allows them to misbehave without consequences.

Watching out for you everyday.


Speak Up

March 08, 2011

Wal-Mart's prices aren't "always low"'. Prepaid debit card costs

Wal-Mart which has built its empire off the brand strategy of low prices everyday maybe not so price friendly when it comes to its popular pre-paid debit card.

Wal-Mart prime targets are lower income people for whom obtaining credit can be difficult. To "assist" in providing customers with credit card like convenience, the retail giant offers its Green Dot pre-paid debit card.

Unfortunately, the pre-paid card comes with fees some of which the Wall St. Journal reports are so hidden that it takes intimate knowledge of financial industry reports to find. The card has a $3 re-loading fee but also charges a $3 a month use fee which is not well-known. This "hidden" fee can put card users into a negative balance unknowingly.

So, Wal-Mart consumer beware. You may be over-paying at America's "low price" leader.

Watching out for you everyday.


Speak Up

March 02, 2011

Branding the Revolution: the importance of identity creation for a legacy

I have been thinking a bit about the turmoil in the Middle East from a marketers point of view as I am both a student of history and a branding expert.

Today, I came across a thoughtful editorial in the Wall St. Journal that addresses this issue with the opening statement, "Every revolution worth the name needs a [brand] name".

Throughout history leaders of revolutions have come up with names to give their efforts permanency and notability. One immediately thinks of the American, French, and Russian Revolutions some of the most famous of all time. Others less well-known, as outlined in this story, but still notable include the Iranian, Jasmine (Pakistanis, Chinese, Tunisia-first uprising) and Orange (Ukraine).

Some people are calling the events in Egypt the "Facebook" or "Twitter" revolution.

What is clear is that whether or not revolutionary leaders see themselves as marketers are not, invariably to ensure the effort is remembered with a particular identity in history, they come up with brand names (or at least the media that covers them do or assist in doing so).

As revolutionary spirit continues to thrive across North Africa and the Middle East, it will be interesting to see what names are chosen to mark these notable uprisings.

Watching out for you everyday.


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