Personal computer brands fell from their original glory with Icarian speed and suddenness. Thanks to Michael Dell and the off-shore players, the market went from huge premiums to tiny margins in what seemed like a single precipitous descent.
The "commodity basement," this is where brands subsist on life support. Ventilators, tubes, shunts and pumps, the marketer will now resort to any artifice to keep the thing alive. When brands are obliged to compete on price alone, there are no margins for real acts of meaning manufacture. The brand clings to life. (And eventually even this is too much to hope for. We learned today that Ralph Lauren is discontinuing the Polo line of jeans. In its day, Polo was a brand to be reckoned with. Then it was remaindered to the commodity basement.)
The solution is obvious. Fight the price game! Escape the community basement! Identify a higher value that consumer cares about, and deliver this value with product and brand development.
This appears to be precisely what HP is up to with it’s new campaign from Goodby, Silverstein & Partners. Here is the copy from an ad which appears on the back cover of a recent BusinessWeek.
In the beginning, it was magic.
Magazines proclaimed a "personal computer revolution." And it was, for awhile.
But soon the word "revolution" got dropped from "personal computer revolution." "Personal" vanished from "personal computer." And both words disappeared into "PC."
PC. A boring box, sold on speeds and feeds and gigabytes.
Still, there is hardly anything you own that is more personal.
Your personal computer is your backup brain. It’s your life and the life of your business. It’s your astonishing strategy, staggering proposal, dazzling calculation. It’s your autobiography, written in thousands of daily words.
Today HP is making the entire experience of owning a computer more personal than ever before. We are designing products that offer you ever greater power, simplicity, and security; all backed by a one-year limited warranty, the industry’s best. And we offer HP Total Care–expert services for every stage of your computer’s life, to help you configure it, protect it, tune it up, even recycle it.
Because when you own a personal computer from HP, you own something more that right to demand that the personal computer will finally live up to its name.
Very good. The research, we guess, was illuminating. PCs do create extraordinary value in the life of the consumer. Many of us would put ourselves in harm’s way to protect our computing devices. My little ThinkPad is my little think pad. I would be pretty completely thoughtless without it.
The agency or HP discovered the higher value of the PC. The HP website puts it this way:
This new HP campaign focuses on the highly individual and personal relationship people have with their computers, unique to each user. Whether what they are creating is a spreadsheet or a work of art, HP’s goal is to make the personal computer a more powerful personal tool.
But here’s the problem. HP does not appear to have stepped up. The new campaign does not herald hardware or software that actually makes the personal computer "a more powerful personal tool." Most of the fuss appears to be about a program called Total Care which gives better backup and repair.
Really. That’s it? What happened to "Your personal computer is your backup brain…your astonishing strategy, staggering proposal, dazzling calculation, your autobiography"? Until this brand promise is built into the HP PC, the ad is really just talk. Indeed, it is the abuse for which advertising is famously infamous: dressing mutton up as lamb. More exactly (mixed metaphor, me?), where’s the beef?
The options here are not hard to imagine. With the deep intellectual gifts at its disposal, HP could easily have offered hardware and software options that really do deliver against the proposition. How about software of the kind that MindJet creates? The "mind map" software really does make it easier to think. There are visualization technologies out there of several kinds that could be developed (or purchased) that would give HP machines a real claim to being "personal, powerful tools". All of us live in a wind storm of information. All of us use our personal computers to manage this chaos. How about a little help here?
It sounds like I am making the criticism that Bob Garfield brought against the BMW "ideas" campaign. Today, in Advertising Age, he insisted that the BMW campaign (from GSD&M) was cliched and without substance. There is, he says, no evidence in this campaign that BMW is in fact a corporation committed to innovation. I think he has missed the point here badly. In fact, something extraordinary is happening in the corporate world. It is growing ever more responsive in order to track the growing dynamism of the competitive world. This puts the nay sayers and the truly creative players at odds with one another. I think making itself the champion of creativity and dynamism is a strategic move for BMW. (Mr. Garfield says the campaign is a cliche from a 1950s Tony Randall movie. Can he really have missed that this world has changed beyond recognition?)
No, I am not insisting, as my distinguished colleague Tom Asacker sometimes seems to, that all branding has to be about a functional benefit, a utilitarian property. Sometimes the concept of the brand is the value of the brand, a value, in point of fact, that commandeers very nice premiums indeed. But in the case of the HP campaign we need something more than a general acknowledgement of the value of a PC. Because, very plainly, every single PC delivers this value, and a Total Care package is neither unique nor part of the real value add here.
We have seen Nokia claim for the brand some of the higher value delivered by the category. (See the post noted below.) There is no change in the Nokia bundle of utilities in evidence there. But the claim is made by an act of meaning manufacture of some subtlety and a good deal of depth. Nokia is made a brand that gets how the consumer uses technology and a match is fashioned between the most substantial benefits of the technology and the Nokia brand. The HP ad, on the other hand, tends to read like a lecture in how lucky we are to be using personal computers. I get that. I think we all get that. The question is, what has HP done to earn any of the credit.
With off shore suppliers, and lightening acts of reverse engineering, increasingly the best way to fight demotion to the commodity basement will be brilliant acts of branding. We may take the HP campaign as an object lesson, a demonstration of how not to do it.
Garfield, Bob. 2006. BMW’s New "Big Idea" ads aren’t" http://www.hp.com/personalhy first TV ads from GSD&M are terrible. Advertising Age. June 6, 2006. here. (subscription required)
McCracken, Grant. 2006. The Problem of Partial Ethnography. This blog sits at the… May 3, 2006. here.
McCracken, Grant. 2006. BMW claims meaning for the brand. The blog sits at the… May 15, 2006. here.
For the HP ad in question, see the back cover of BusinessWeek. May 22, 2006.
For more on the HP campaign, see comments on the HP website here.
For still more on the campaign, see the PR fact sheet on the HP website here.
We’ve done a little bit of work in this area for this client, and I think without violating confidentiality I can at least raise the issue of organizational structure here. The people that make the products at HP are very very very far apart (structurally, physically, presumably mindset-ly) from the people that sell the products. And there’s at least a similar distance from those that advertise the product. It’s easy to beat on HP when they deserve it, and I’m not saying they don’t, I just really feel for the folks that try so hard to make a difference but are working within a culture and structure where it’s really really hard.
Steve Portigal’s comment is so interesting because it comes up so often. It reminds me of when I was a getting my econ PhD and a classmate found out that in many companies the people setting output (factory managers) and the people setting prices (marketing) never even talked to each other–even though these two things are linked together in a single demand curve.
Frankly, I think it is management malpractice to have so much separation (as in the HP example) between design, operational, and marketing decisions. How can you, except by wild chance, end up with effective strategy if there is no connection between product attributes and advertising messages? This knowledge problem will also flow in the opposite direction: How can a company know whether to put in or take out a feature if the decision makers don’t know anything about how customers perceive that feature?
The auto industry has tried to address these issues a bit, using tools like the House of Quality or value engineering. Maybe the PC people need to jump in the pool.
“The solution is obvious. Fight the price game!”
Someone once said to me that Marketing can be defined as all the actions you can take to increase sales without lowering the price!
From HP, I’d settle for PCs that could be upgraded without a pagan blood sacrifice. Granted, that’s not _more_ value than I get from the hole-in-the-wall system integrator run by Taiwanese immigrants that I actually buy computers from, but at least they’d no longer be asking me to pay half again as much money for a demonstrably _worse_ product.
I find your suggestion that “increasingly the best way to fight demotion to the commodity basement will be brilliant acts of branding” to be, well, a recipe to creating yet more “hollow brands” that don’t live up to their expensively advertised expectations.
As Kim & Mauborgne’s work on Value Innovation has shown clearly, a far better way to avoid the commodity trap is to find out what customers, non-customers and ex-customers really want and then to give it to them at lower cost than competitors can possibly do so. Only when you have done these two things should you start to advertise your renaissance to the market.
Too many brands blatently lie to the markets they supposedly serve. And then are suprised when thy are rumbled and customers kick up a stink. Surely you are not advocating yet more marketing lies.
I think you’re absolutely right when you state that HP’s brand challenge is to “Identify a higher value that [the] consumer cares about, and deliver this value with product and brand development.” Unfortunately, HP still clings to the traditional brand model–the one of “branding” and ad campaigns–and that model is forever broken.
The root cause of HP’s brand malaise is that its marketers have no idea of the customer they’re trying to create. Brands are the pre-eminent tool for creating customers, because their protean nature can deliver many forms of customer value. However, if you don’t have a clue about where your customers are headed, and if you don’t have the vision to lead them there, you will end up on the quasi-commodity treadmill like HP.
Brian said, “Brands are the pre-eminent tool for creating customers, because their protean nature can deliver many forms of customer value. ”
What exactly is the brand for computer users? Is it the communications & packaged offers we practically fall over in every newspaper? Or is is the experiences of buying one, using it and getting help when it doesn’t plug & play like it said on the box?
Surely in such an experiential product as computers, the brand is more about your personal and others experiences than marketing communications. Particularly negative experiences. Just look at the mess Dell got itself into after failing miserably to provide adequate after-sales support.
The only way branding can add value other than by communicating a product’s true functional attributes (e.g. performance, reliability, appearance) is by attaching desirable meanings and associations to it. If HP is going to try to get people to “feel” more revolutionary and individualist when they use an HP compared to a Dell or Lenovo, the way Miller wants people to “feel” more hip and macho when they drink Miller, it’s going to have a tough job. The Shaun White commercial isn’t bad, but I don’t think the PC category falls into the kind of emotional impulse purchase category, like beer, where such a strategy can be effective. In other words, they’re actually going to have to make something about their product/service bundle better than rivals if they want to de-commodify.
Personally, I think the mission of brands is changing. It’s moving from “shaping perceptions” to delivering new forms of value that customers can use. In this shift, brands are more closely tied to the innovation process than they are to advertising or corporate communications. The new “value” from brands can be functional value, aesthetic value, spiritual value, etc. There are no boundaries, which is why the field is becoming so exciting. (“The genius of brands is that they have no limits. The value of brands is that through them, customers have no limits.”)
As I see it, a brand assessment starts with the question: “What is holding our customers back?” You then develop the brand programs to move your customers forward—-beyond the reach of competitors. If you lead customers to greater value, their (positive) perceptions will follow.
This also means that brand strategy moves to the core of business, where it rightfully belongs.
Are brands diametrically opposed to customers?
Let’s do a little experiment and take a look. Take Brian’s last post in its entirety, and swap the word brand for the word customer and vice versa to see if it makes any more sense.
Personally, I think the mission of customers is changing. It’s moving from “shaping perceptions” to delivering new forms of value that brands can use. In this shift, customers are more closely tied to the innovation process than they are to advertising or corporate communications. The new “value” for customers can be functional value, aesthetic value, spiritual value, etc. There are no boundaries, which is why the field is becoming so exciting. (“The genius of customers is that they have no limits. The value of customers is that through them, brands have no limits.”)
As I see it, a customer assessment starts with the question: “What is holding our brands back?” You then develop the customer programs to move your brands forward—-beyond the reach of competitors. If you lead brands to greater value, their (positive) perceptions will follow.
This also means that customer strategy moves to the core of business, where it rightfully belongs.
It still makes about as much sense as Brian’s original post.
The future of brands and customers should be inextricably intertwined, not separate and opposite as they are too often portrayed.
Does Advertising Build Brands?
How many times have we seen strong, sharp, insightful brand communications completely let down by product designs that don’t single-mindedly deliver the brand’s promise? I recall a debate some years ago about what kind of advertising would best build a brand. The entire premise is incorrect. Advertising merely tells people about the brand. If what they hear makes sense and is believable, they purchase the brand’s offering. It’s the experience delivered by the brand which finally shapes the brand in their minds, depending upon how well it lives up to the promise.
Why would HP create such a good brand communication without backing it up with a good brand experience? One can only speculate that the role of marketing at HP is limited to creating communication. When marketing is at the heart of everything that a firm does, then the flow from insight to product design to brand communication is single-minded, smooth and usually results in customer satisfaction and sales growth.
Advertising does (or can do) much more than just “tell people about the brand”. For a start, it can alert people to what other people think of the product, and whether those others are likely to adopt it. If the product is what economists call a network good (one whose utility to each person depends on its utility to others), then each potential customer needs to consider whether other potential customers will purchase before deciding for themselves. (There’s no point being the owner of the only fax machine in town!).
But, in my defiantly-unhumble opinion, ALL products and services are network goods, at least to some extent. There are even fashions in products such as raw materials and other so-called commodities.
Good advertising can alert people to how others are likely to jump, either directly (eg, through endorsements) or more subtly, by helping to forge a collective majority of opinion about the product and its social meaning. This function of advertising, as facilitator for and signifier of co-ordinated action by consumers, is a lot more than simply information transfer from seller to buyer. The “lot more” here is anthropological or sociological rather than economic.
Though the posts above about trying to present a commodity product as revolutionary through a clever branding message have some merit, they discount the importance of HPs mission to invite their customers to relate to and engage with the HP brand.
As part of this campaign, we developed a brand experience for HP, linked from the hp.com/personal site, where users can create their own HP ads by uploading a picture. The idea behind it was to deliver fun for visitors to the site, while at the same time reinforcing the message of personalization and user empowerment that is central to the campaign.
As a side note, though HP’s Silicon Valley neighbors at Apple have consistently delivered product innovation, they have especially delivered brand engagement and buzz. Hence the question of whether to compete with the iPod, other MP3 player manufacturers need to build a better product or make a better commercial.