Brands and Bullshit

by Bernhard Schroeder

  So, take the time to learn your marketing craft and move toward becoming a brand expert. In this chapter, I will discuss emerging trends, two powerful customer groups and why blue oceans matter.

  YOUR MARKETING LENS: FOCUSED ON TRENDS

  CREATE A NEW CONSUMER LADDER

  Whether you believe it or not, if clients were to indicate why they hired you, either as a person or as a marketing agency, hopefully they would say it’s for your ability to guide them as well as to get things done. If it’s just to get things done, then you are a commodity. You need to provide more value and understand where things are going. As long as I can remember, I have always been focused on trends. Even trends that have no particular interest to me. But I knew that if I was going to be a brand and marketing expert, I had to be able to understand not just individual trends but how trends, customers, industries and timing might intersect. Because, sometimes in that intersection lays the real opportunity: Amazon. Even in the early days, it was the perfect intersection of technology, customers and an industry ripe for disruption. That’s why Jeff Bezos trusted us to do the early branding and marketing for Amazon. Not because we were an integrated marketing agency and could do the work but because we did not think he was crazy; in fact, we thought it was the first really good idea and business model we had seen for the Internet since we saw the first webpage in late 1993. You need to understand your value as a marketer. Are you a commodity or moving toward being an expert?

  As a marketer, here are a few trends I think you should understand and keep an eye on:

  Mobile Internet: Increasingly inexpensive and capable mobile computing devices through cell and Internet connectivity

  Automation of knowledge work: Intelligent software systems that can perform knowledge work tasks involving unstructured commands and subtle judgments

  The Internet of Things: Networks of low-cost sensors and actuators for data collection, monitoring, decision making, and process optimization

  Cloud technology: Use of computer hardware and software resources delivered over a network or the Internet, often as a service

  Advanced robotics: Increasingly capable robots with enhanced senses, dexterity, and intelligence used to automate tasks or augment humans

  Autonomous and near-autonomous vehicles: Vehicles that can navigate and operate with reduced or no human intervention

  Next-generation genomics: Fast, low-cost gene sequencing, advanced big data analytics, and synthetic biology (“writing” DNA)

  Energy storage: Devices or systems that store energy for later use, including batteries

  AI or artificial intelligence: the capability of a machine to imitate intelligent human behavior

  3D printing: Additive manufacturing techniques to create objects by printing layers of material based on digital models

  Advanced materials: Materials designed to have superior characteristics (e.g., strength, weight, conductivity) or functionality

  Renewable energy: Generation of electricity from renewable sources with reduced harmful climate impact

  Wearable devices: whether for health or fitness, Fitbits et al are here to stay

  Retail Subscription: Prime from Amazon, Birchbox and groceries delivered

  Organic/Natural Food: farm to table and everything in between

  Entertainment: Gaming and video content delivered through new mediums

  Pet Industry: dogs and cats have become our new best friends

  Rental Economy: Today, Uber and AirBnb, what will we rent next?

  AR/Virtual Reality: Watching sports and visiting islands, all from our living room

  LEARNING TO SPOT TRENDS

  There’s nothing like being in the right place at the right time. Smart companies spend big money on research and development to ensure that their offerings are up to date — and to make sure they don’t miss out on lucrative new opportunities. Traditionally, this practice has been the sole stomping ground of qualitative and quantitative research firms, but not anymore. After all, nobody anticipated that trendspotting itself would become a trend. Of course, forecasting and analyzing trends is not new. What is new is the emergence and widespread adoption of trendspotting by organizations as part of their innovation processes and as a way to anticipate what their customers will want in the future.

  Why is this happening now? Many business leaders have lost confidence in traditional consumer research methodologies, especially when applied to innovation. Did Borders see Amazon coming? Why not? Why didn’t Blockbuster react to the early emergence of Netflix? Why didn’t Gillette see Dollar Shave Club? How did Nikon miss the “GoPro” social media trend? What’s happening now is convergence of technology and the increasing acceleration of business and this is driving senior executive’s quest for certainty and security in an unsure business world. The problem is they are so focused on their everyday business, they might not see a disruptive trend coming. That’s where you come in. If you want to become a brand and marketing expert, you better be able to understand what is happening today and how that might impact tomorrow. Here are some tips to perhaps become a better trend spotter:

  BECOME A BETTER READER. Regularly read the leading publications and websites affecting your business. This could include industry publications, trade association sites, major newspapers, key business magazines, thought leaders and influential bloggers. So many trends start overseas (London, Paris, Tokyo) or on the coasts (Los Angeles, Miami, San Francisco, New York), so make sure you read about what’s going on in those cities. At first, scan information from a wide variety of sources -- from international news on down to niche bloggers focused on specific aspects of your industry. Obviously, there’s a tsunami of information available. Use tech tools like RSS feeds, e-mail newsletters, Google Alerts or Twitter to keep on top of it all and get the info you want delivered to you when you want it. You’ll quickly learn which sources are valuable and which you can jettison.

  TALK TRENDS WITH PEOPLE. Talking to people is an equally important trend-spotting tactic. Start by getting involved in your industry’s trade associations and attending events both online and offline. Network with other marketers, both in and out of your industry. (I promise, you’ll gain some of your most valuable trend insights by talking to people in completely different industries.) Take advantage of social networking tools like Linkedln and Facebook. Start or join groups on the networks and see what people are buzzing about. Pose questions about trends you’re seeing and ask for feedback or comments. Also, watch your competition to see what they are doing.

  WATCHING TRENDS. There’s no substitute for getting out in the marketplace. Make it a point to regularly go where your target customers hang out. If your customers are teenagers, that might be the local mall. Well maybe not considering what’s happening to malls right now... but even that is a trend. If they’re businesspeople, it might be the region’s “power lunch” restaurant or office park restaurant center. Spend some time simply watching and observing. What are people eating, doing, wearing, using? What stores or restaurants draw crowds and which sit empty? Trade shows are a great place to get trend ideas, too — even if you’re not looking to buy anything it’s worth attending many shows simply to see what’s hot.

  THINK ABOUT TRENDS. As you begin regularly gathering all this information, you’ll start to develop a “trend-spotter mind.” As you absorb and mull about what you’ve read, heard and observed, you’ll start to make connections and observations that will lead to business-boosting insights. The news about rising interest in prepared food, the growth of free shipping and delivery services, the Millennial population which wants it now, spawns a new industry of food delivery to work or home.

  Paraphrasing Steve Jobs, he once said in order to look forward you need to look backwards (perhaps the last ten years) and then connect the “future” dots. Well, be more curious and collect a lot of dots. Perhaps you can connect them and you’ll be able to look forward. One thing you can definitely do that is fairly easy: be more curious. And pa
y special attention to two large population groups, Baby Boomers and Millennials.

  MILLENNIALS AND BABY BOOMERS MATTER

  It sounds trite but there has never been quite a time like the one we are in now. Baby Boomers have dominated our consumptive world for the past 50 years as a very large group of the population. I once thought, geez, could there ever be a bigger population than boomers who numbered 74.9 million in the USA in 2016? Ah, the answer would be yes. In 2016, Millennials passed boomers with 75.4 million and they are forecasted to grow to more than 80 million by 2025. In the United States, that will be three out of every four employees in the workplace. I don’t care what you think about these two population groups. I don’t pay attention to all the mindless chatter about “Millennial marketing” and why we should or should not focus on Millennials. The truth is it’s not about what you think. This population group will dominate, disrupt, create and define the world we live in. Pay attention to them especially when they come into wealth as the baby boomers, who hold most of the wealth, continue to die off. Over the next 25 years, the biggest and wealthiest generation in U.S. history will transfer roughly $30 trillion in assets to their Gen X and millennial children. Let’s look at these two groups a little closer.

  Baby Boomers are going to represent an ongoing challenge to marketers not because of who they are but because of where they are going. They are not going to fade quietly into the sunset. Here are some facts and insights you need to understand if you are going to market to them.

  They have money. Baby Boomers currently spend upwards of 70% of the nation’s disposable income. What’s more is that they will inherit $13 trillion in the next 20 years.

  Real estate disruptors. The baby boomers created the suburbs and are not going to retire in retirement homes. They will live out their years in a place they call home and they will disrupt real estate as they get out of large homes into smaller ones especially in downtown locations.

  Brand loyal. They are very brand loyal and you better have a good reason for them to give up the brands they know and love. The good news is that if you can convert them to your brand, they will likely be very loyal.

  Fight the man. The Woodstock Music Festival was much more than a concert featuring the likes of Joan Baez, Janis Joplin, the Grateful Dead and Jimi Hendrix. It was a countercultural event which symbolized, among other things that the baby boomers were not going to be trussed up by their parent’s morals and lifestyle. They would think and act for themselves – and they still want to be thought of that way. The least hint of patronizing the baby boomers will flatten any marketing campaign.

  They will not die. Okay, they will die eventually. If you think ‘aged’, ‘senior’ and ‘elderly’ are effective buzzwords for baby boomers – think again. They don’t want to be reminded of their age, but of their accomplishments and of their future. I would advise marketers to concentrate on the ‘bucket list’ concept when pitching to baby boomers. They may have to buy adult diapers someday, but what they want to hear about is the best place to eat in Sturgis, South Dakota, when they ride their Harley Davidson there for the Rally in August.

  The bottom line is they have money to spend. They know they have earned the right to invest in themselves and their passions and hobbies and are ready to pay top dollar on travel, recreation and other leisure activities. As a marketer, you need to do your homework and know this group better. Your brand and/or clients will probably depend on it.

  Let’s move onto Millennials. They are a fascinating group to me. I actually like them. They are dreamers, have a social conscience, want it all now and are uncertain about their future. I actually think they will do a better job overall of running the world. If they could just get over their angst. ☺ As a marketer here are some insights and tips on how to market to millennials.

  Better be authentic. If you market a product or service to this crowd, you better be authentic. They will investigate back stories, read labels and listen to social media to determine your brand authenticity. Try to fool them and you are dead.

  They are social. Even the most novice marketer can spot the fact millennials are spending more time on social media than ever before. To reach this audience your brand has to be on social media with relevant conversations and content.

  Forget the hard sell. The hard sell has become something of a piece of satire in the eyes of millennials. They don’t respond to the salesperson following them around screaming about how great their products are. The hard sell is gone and you need to let millennials make buying decisions for themselves. Don’t believe me? Just watch a 25 year old Millennial walk into a traditional car dealership and walk out again in 20 minutes thinking salespeople are stupid. They know what they want to buy but no one was really listening.

  They move faster. The reason why millennials are moving fast is partly because of the mobile revolution. The rise of mobile has meant that they can stay connected wherever they happen to be. What it all means in practice is that marketing has turned into an omni-channel issue. Marketing strategies have to adapt to this. There’s no such thing as online, offline, and mobile strategies. They’ve all been merged into one.

  Earn their loyalty. Millennials are not going to stick with the big name brands just because. The rise of millennials has forced brands to stop relying on the idea that they can “expect” to gain loyalty from customers. Marketers have to actively win and earn loyalty. This plays into the stereotype that millennials are disloyal and they won’t stick with anything for any length of time. That demonstrates a fundamental misunderstanding. They may be harder to sway to your cause, but when they do become loyal they tend to be the most loyal consumers around.

  So, what are the takeaways? Millennials represent significant buying power going forward, but they are not the only ones. Marketers would be well served to keep their eyes on both of these population groups. As a marketer, take the time and effort to understand the needs, actions, and buying patterns of both groups. Finally, marketing today needs to “speak” to consumers in a voice that is both authentic and genuine. If the message is stereotypical, both of these consumer groups have no reason to identify with a brand they feel does not accurately understand their needs or lifestyle. In terms of understanding consumers and marketplaces, heading for a blue ocean marketplace could be critical for your brand.

  MARKETERS, SET SAIL FOR A BLUE OCEAN

  For twenty years, I worked with big brands and startups as a marketing and branding expert and, with three other partners, built a $1 billion integrated marketing agency with more than 10,000 employees. Our job was to find out where our clients needed to go in the marketplace and provide them with the best opportunity for success. I have taught marketing and entrepreneurship courses at San Diego State University, and over the past few years, I have taught a course on Creativity and Innovation as part of the Entrepreneurship Program at the university. I wrote a book on creativity called Simply Brilliant so that I could teach students, and people worldwide, how to be more creative on purpose. One of the important concepts I teach students in my course is the notion of creating or heading for a “blue ocean” marketplace in an industry. This is something I did regularly as a brand and marketing expert. But I don’t think most marketers today have heard of blue ocean strategy or even understand it at all. And yet, if you are a marketer and want to learn how to craft brands that change marketplaces, then how do you not know about blue ocean strategy? Ah, the Millennial digital marketer. ☺

  I love using blue ocean strategy in the classroom. I loved using it in my professional marketing life. It’s so simple to understand and it forces the students, and hopefully marketers today, to answer really simple questions regarding a current product or service:

  What can I eliminate?

  What can I reduce?

  What can I raise the bar on?

  What can I create that is new?

  You can set sail for a blue ocean all in the hopes of creating a new product or service in a growing marketplace with l
ittle initial competition. Blue Ocean Strategy by Chan Kim and Renee Mauborgne was published in 2005 by Harvard Business School Press. It became a best-seller and still remains popular today. The authors’ thesis is that most companies focus on competing against rivals for share in existing markets. Competition intensifies, features blossom, prices decline, and companies lose gross margin and profitability as competitors rush in to sell cheaper products in order to maintain market share. In this competitively intense ocean, segments are niched and products are commoditized turning the water red (either the red ink of losses or the blood of flailing competitors, choose your metaphor). So, if you find yourself competing on just price in either a growing or shrinking marketplace, the future is not bright.

  The red ocean is simply where every mature industry is today. There is a defined market, defined competitors, and a typical business model in any specific industry. You initially compete on some differentiation and then slowly (or quickly in a rapidly growing marketplace) you start competing on some version of price or cost (e.g., AT&T versus Verizon, Samsung versus LG, etc.). But you can choose to have a mindset that says you have to innovate in order to escape a red ocean and head to a blue ocean. How? Brands can choose to avoid this margin-eroding competitive intensity by putting less energy into red oceans and choosing instead to pioneer blue oceans—markets largely untapped by competition. By focusing beyond existing market demands, you can identify unmet needs (i.e., needs beyond lower price or incremental product improvements) and then innovate new solutions that create far more profitable uncontested markets—blue oceans.

  RED VS. BLUE OCEAN

  Here are key elements of a marketing mindset regarding a blue ocean strategy perspective:

  Focus on current customers vs. focus on noncustomers. In most industries there is little effort to attract new buyers to the industry; the focus is on the customers currently purchasing in that industry. With a blue ocean mindset, there is a focus on trying to increase the size of the industry by attracting people who have never purchased in that industry. Think Apple with iTunes allowing everyone to buy digital music legally, online.