Just Dig it..!!

Erich was especially insistent that we should not follow the Chinese example of pushing consumption with low priced goods. He repeatedly impressed upon us that India with its educated workforce and with an ‘inherent culture of business’ should not make the mistake of following China on price competitiveness. This would make the country loose all its heritage and power. For a while, it seemed China could manufacture anything and for less than anyone else, and it has. On this premise, it has successfully built a formidable economy.

However, the World has now been cautioned to the shoddy products China has flooded the market with. A spate of deaths, recall of its products from global markets and other scares has highlighted the danger of unsafe Chinese goods. India, he says risks falling into the same trap, if it follows China. Education and the knowledge of the global language – English - he believes gives India an edge over China and it should leverage this to build excellent brands.   

Erich also explained the three waves of branding or in other words how branding has evolved and become more sophisticated over the years.

The first wave of branding follows the traditional approach of first researching the market, studying the product’s image vs. the competition, then defining the desired image for the product and subsequently implementing a programme to achieve that image. This model strives to develop the desired image for the product by developing a symbol and a coherent message. This it consistently conveys to its target audience to achieve top of the mind awareness and recall for the brand. However, Erich is of the opinion that this wave of branding does not work today.

While we can celebrate the success of brands like Coco-Cola and Nike, which used this model, it cannot be applied to present market conditions, which is flooded with a myriad of products. In a country like the US, where there exists 450 brands of bottled water, using this wave of branding to build another brand of bottled water will only result in the brand getting lost in the clutter of products in the market.

The second wave of branding principles underline the need to differentiate by creating a strong identity with the help of a set of attributes which are intrinsic to the product. This wave does not emphasize that a brand is the best but rather strives to build its popularity around an attitude. It believes in the notion that brand identity is more enduring than a brand image and encourages consumers to identify with the brand by forming a set of favourable associations with the brand. Apple did not build its success by claiming to be the better brand than its competitors, but rather through its tag line, “Think Different” ‘it successfully created an association and a unique positioning in its consumers’ mind. Harley Davidson is another example, which used this branding principle to revive its fortunes.

The third wave of branding principles in sharp contrast to the second wave, focuses on engage, connect and transforming the consumers experience. Erich refers to this wave of branding as 1440-minutes of branding. This refers to how many minutes in a day or how much time a consumer spends with a brand.

Erich asserts that the essence of creating a successful brand is not in creating an experience for the customer, but in the brand’s ability to change the way people live their lives. The whole idea is to make the brand a part of the consumer’s life. The effort is to persuade branding through passionate consumption rather than communication and messaging. To increase a brands value to a consumer, Corporations need to build branding opportunities around people’s behavior or to be more precise around people’s lives.

In today’s cutthroat business environment, the first and second waves of branding principles are passé. Its 1440-minutes branding which is relevant in creating successful brands. Just satisfying people’s needs and wants is not what matters. With a clutter of brands competing with each other for shelf space, a consumer can look towards numerous brands for the satisfaction of his wants. For a brand to stay relevant, it has to have a transformational life experience in the consumers’ lives. If there are 1440 minutes in a day, what is your company's share of them?

Too often, companies simply ask consumers directly what they need and then mindlessly attempt to deliver it, rather than challenge themselves to reach beyond what consumers say, read between the lines, to give them the things they can't even imagine or articulate...that solve real problems, that satisfy deep desires they couldn't even communicate. Too often, managers innovate around their own brand myopia and business model and competition, rather than around consumer reality. This according to Erich is the key to successful branding.    

He cites the example of Starbucks, who to drive consumer value, have changed the way people live their lives around coffee. Starbucks has created a third place – not home and not work, which is welcomed and absorbed into people’s regular existence. When Starbucks was established, no one in New York City needed a new place where they had to pay $4.00 and stand in a queue to buy good quality coffee. Yet Americans flock to Starbucks in droves. This is because Starbucks has created a third place in people’s lives, where they can spend 40-45 minutes of the 1440 minutes in a day to relax, listen to music, to socialize, to work and unwind. The success of Starbucks does not lie in the fact it serves good coffee, but in the fact that it has played a transformative experience in people’s lives.  

Erich stressed that people's needs and wants are no longer what matter - transformational life experiences are the key. He feels that too much so-called "innovation" ends up being suffocatingly close-in, hindered by internal biases, narrowly defined brand footprints, and uninspired market research.

In short, I came across three important takeaways, which are: 

1) Innovation and growth is not a fuzzy process of screwing around vigorously (SAV) but can be a systematic process,

2) Innovation and growth is not something that happens in a department like R&D or product development – innovation and growth is a company-wide activity and only if you have a process can you also engage the entire organization, 

3) Innovation and growth is not about products or solutions – it is about creating a transformational change in the way people live, work and play – and in order to achieve that, the innovation can be a product, a solution, a technology, a new business model (like at Netflix) or no product at all. It could even just be a management innovation like brand management at BMW or a better supply chain management process. 

Our marketplace is changing so quickly - as new channels, new competitors, new media, and new consumer values are reshaping the demand ecosystem. Erich has developed what he calls the Demand-first Innovation and Growth model (DIG).  The DIG model is a structured and repeatable way of analyzing a company’s opportunity space to find winning strategic growth opportunities. In brief, DIG comprises a three-step approach to the problem:
 

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