Power of Corporate Trademark Stupidity

Sometimes it's foolish to let the lawyers out without a nanny - particularly when your company has a reputation for being unreasonably litigious. And Apple may have taken its legal fierceness a few steps too far. The company has decided to mount a legal challenge over the GreeNYC logo. That logo belongs to the City of New York and is part of a campaign to have consumers go green by lowering energy consumption.

NYC registered a trademark on the green apple with stem that doesn't have a bite taken out of it. A few months later, Apple registered a challenge. Mind you, there is no reasonably way one could confuse reducing energy consumption in New York City with the computer and consumer electronics company. If they think that's a threat, why not go after Apple Records because they're involved in music, and that at least has some connection to the iPod. Oh, wait, right - Apple Records was there first.

So Apple Inc. thinks that NYC is competition and is taking action? Let's count all the ways this is about one of the most stupid things it could have done:

1. New York City isn't some kid in Harvard writing a blog and without funds. This is an economy unto itself, with lots of wherewithal to mount a legal challenge that will rattle the teeth of Steve Jobs.


2. This has got to be an incredibly stupid PR move. The company is essentially branding itself as anti-green.


3. New York City has used the Big Apple as a slogan far earlier than the first time Steve Wozniak cobbled together his first personal computer prototype.


4. Because there are so many organizations and businesses using apples in names and logos, as the City Room blog of the New York Times points out, Apple has very possibly fallen into the dangerous ground of selectively protecting its trademark, which could provide grounds for it to lose that bit of intellectual property.


5. The city realizes the potential weakness of Apple's position, because it responded to the US Patent and Trademark office that Apple used fraud to win overly broad protection.

In other words, because it decided to get heavy-handed this particular time, Apple's grasp on its apple could slip. How valuable is a brand logo if you no longer own it?

Politics, Business, and Doing Brand

Al Ries had an interesting article in Advertising Age on branding lessons from the presidential race. (Sorry, but you'll need a subscription.) Politics has picked up branding from business and now offers some clear lessons on it. For example, Clinton staked out "experience," Obama went with "change," and then Clinton realized that the latter's pick was more in keeping with public sentiment, and so tried to shift and have it both ways:

It's too late. Obama has pre-empted the change idea. A typical example is the cover of the Jan. 14 issue of Newsweek with a picture of Barack Obama and the words "Our time for change has come."

Now, Clinton looks like a follower instead of a leader.

Ries then asks the question, if you wanted to establish a brand, what idea would you want that hadn't already been grabbed by someone else? He actually writes about choosing a word, but I think idea might be more applicable. The obvious problem that businesses face is that no one remembers their slogans. You don't get too many new hits as you once had with "It's the Real Thing" (Coke), "King of Beers" (Budweiser), or "When it absolutely, positively has to be there overnight" (FedEx).

Little doubt that if you're older than, say, 35, you've heard these and the sayings have stuck in your heads. Ries suggests that companies make three mistakes:

1. developing a slogan independent of the brand and broader marketing strategies


2. trying to get an "exciting" slogan without remembering that it only has meaning in context


3. thinking in years instead of the decades of repetition success can take

I think there's something to be said for all these, but I think they miss a more fundamental point. You can't have brand for something that you're not. Eventually people find out what your product or service is like, and if you're blowing smoke, your marketing will be worthless at best, and at worst will drive business away.

FedEx had that great slogan, and backed it up with intense efforts to make sure that over 99 percent of the time, the package acutally did get there on time. Bush has had such a large market share that in economic reach, if not in taste, it really still is the king of beers. Coca Cola was the real thing because it established itself and for decades, any competitor, including Pepsi, was busy trying to be as big as Coke.

The single biggest mistake that I see companies make is thinking that a slogan can overcome ineptitude, disinterest, sloth, and greed. If you want a brand that will stick, don't talk the brand, do it. When you do the brand, you have orders of magnitude more repetitions of the branding messages, because they occur virtually every time someone does business with you. You then engage emotional and muscle memory, not just intellectual. This is a brand that will hold on to customers, and promise something valuable for prospects.

McDonalds and Starbucks Square Off?

An NPR piece recently discussed how Starbucks and McDonalds are each trying to cut into the other's market: the former introducing breakfast sandwiches and the latter introducing coffee bars in its 14,000 locations. I could see some potential conflict here - yesterday, while en route to Manhattan, I got off the road, noted a Starbucks, got a sweet coffee drink, and added a breakfast sandwich when I noticed that they were available and would only take "30 seconds or a minute" as the worker said - or longer, by my watch.

But for the most part, are the companies and the business press nuts? The two have distinctly different atmospheres and roles to play. People who go to one might go to the other, but under significantly different circumstances. Expecting people to head to Starbucks instead of McDonalds for breakfast is absurd - good luck getting what you want instantly. (And no hash browns?) And expecting people to bring in a laptop and hang out with a McLatte is equally wishful thinking. The people covering business should see this and not take the all too easy angle of "they're out for each other." Even if they are, notice that they're both going to trip and hit the ground face-first, not running, in the process. Or could this be the beginning of the new secret advertising campaign: Have It Their Way?

Dunkin Donuts and Brand Positioning

There was a great discussion on NPR this morning with Leslie Bielby, chief strategist for Hill Holliday, who was in charge of tweaking the branding and advertising for Dunkin Donuts. Not only is there a very funny piece about people not being able to say things like latte and cappuccino, underscoring an affinity with people who just want a cup of coffee. But perhaps the most interesting point that came out is how many people from an upscale background are trying to indentify with "regular" folks, and how that could play to DD's strengths.

Disney, And When Big Views Aren't Necessarily Good News

The New York Times had a story of how the High School Musical movies have become a major property for Disney. The first has turned into a Broadway show and that musical is being performed by a frighteningly large number of schools across the country. The second had an estimate audience that apparently would be the largest in "basic cable history."

Even with "lukewarm reviews" (from adults, after all), it sounds like a winner. Only, I'm wondering if any of the people involved have kids. The first HSM was a favorite at my house, and my teenage daughter, my preteen son, and a teen niece were all looking forward to the sequel. They were ensconced on the sofas when it started - and by the time it ended, they were snorting and derisive. There were complaints about the direction, the acting, the singing, the dancing, the story, and the writing. That didn't keep a slightly reconfigured set - three teenagers and a pre-teen - from watching a second singalong showing ... and openly mocking throughout.

Brand is tricky, and I'm not sure I'd be happy even with an enormous audience if my kids represented any large part of the public. Good marketing, in the form of the original product appeal and the promotion for the sequel, can often kill something faster than a good competitor. And when your new big thing is something invoking derision, at least among some previously supportive group, I suspect it does damage to the overall corporate brand. Here's a relevant remark from the article:

Nevertheless, sustaining interest in “High School Musical” required Disney and its promotional partners to bombard capricious young viewers with a relentless stream of merchandise and marketing in the 18 months between the first and second movies.

And now some analysts wonder if Disney is risking the health of this budding franchise by expanding it too quickly.

I would join the came of those wondering. The company has done well in the past, even with series like the Halloweentown movies. And it's beyond doubt that Disney is capable of getting good writers and composers, creating musical material, and making movies that both become perennial favorites that then translate to the stage and, ultimately, are performed by school and community groups.

So what went so wrong here? It's not the lack of talent, I'm sure. Could the Big Kahunas decided that things would go even better if They got involved with directing the talent where it needed to go? Whatever the case, between over hype, under delivery, and the merciless nature of the tween and teen markets, Disney may have given a solid punch to its own corporate solar plexus.

Vitoria's Secret To Move Into Athletic Gear

Yes, you read it correctly: the strong brand of intimate women's apparrel, owned by Limited Brands, plans that "yoga pants, sports bras and other athletic clothes could soon become a major portion of the lingerie retailer's business," according to a story in last Friday's Wall Street Journal. The store chain's CEO, Sharen Jester Turney, told the WSJ that the new products will go into 30 stores:

Early customer response to the gear has been "extremely positive," Ms. Turney said. "Many of our customers have said, 'I've been waiting for you to do sport wear that is sexier'" than other athletic brands, which tend to look less feminine, she said.

In a phone interview from New York, where Ms. Turney rang the opening bell of the New York Stock Exchange to celebrate the 25th anniversary of Limited's listing, the CEO said athletic wear eventually could produce as many sales as Victoria's Secret's Pink brand, a line of lingerie and sleepwear aimed at college students and young adults. Pink is expected to post about $900 million in sales this year.

Limited is also adding cosmetic bags, luggage, and hand bags "which it hopes shoppers will buy as gifts." I know that sounds good, but it's leaving me scratching my head. Yes, Limited has dropped the Express and Limited stores, so there are more resources now available, but what about the VS brand?

I've been doing some reporting on a couple of stories for Advertising Age regarding branding - with one yet to run (the danger brand can face when companies try to gear up operations for growth). As part, I have been speaking with branding experts. Between that and some common sense, it's not clear to me that this is necessarily a smart idea, even though in July the company faced 3% same store sales drops overall and 4% at Victoria's Secret in particular.

Here's a view from Laura Ries of Ries & Ries, who also happens to be the daughter of marketing expert Al Ries:

This is a common concern, whether we are going to service a market versus creating a market. We work with big companies and, really, it happens all the time. They say we have these cusotmers that want more from us – should we deliver on that, or should we stay focused and say no? Syaing now is a parnful and diffiuclt thing for most companeis to do. We say, 'You have to do what’s best for the brand.' Many times we would go into a meeting with the client and they’d have three product lines. One would do 75% of the business, another is 20%, and the other is 5%. We say to get out of those [smaller]businesses and go with the winner. They say, 'But we’ll lose 25% of the revenue.' We say, 'Yes, but you’re probably spending so much serving those markets.'

She mentioned that the company she was thinking of did drop the two lower-earning lines and ended up making more than ever before with just the single line.

Decisions about brand are not simple. Customers have to give you permission to expand beyond your niche. Are VS buyers going to see their bags as so much more desirable than, say, Coach or Louis Vitton? Are the ones buying the athletic wear actually going to use it to work out? That would suggest significnatly different styling - read different brand - than the intimate aparrel. And if they aren't wearing it out, are we talking about the equivalent of a housecoat to wear about before you get dressed?

I'd think that it would make sense to see what the consumers are buying. I'm betting it's not products, but a way of thinking of themselves as beautiful, desirable, and sexy - in an intimate setting, very possibly with someone else, or at least the fantasy or possibility that there might be someone else. Of course, this is just a guess on my part, but I've heard from women who buy from VS. Like all consumers, they're looking for a psychological experience, not just a product. And I'd bet that athletic wear has a significantly different experience, which means brand dilution and devaluation might be around the corner.

Wal-Mart Shows Problem of Moving Outside of Brand

The New York Times has a fabulous piece on Wal-Mart's attempts to expand its brand outside the strictly discount realm and even posts a report done for the company by its former advertising agency last October.

It's interesting to get an inside lok at the troubles Wal-Mart is having in expanding its market. I find myself almost feeling sorry for management there because of the relentless drive of financial markets to keep seeing growth. The company has 138 million shoppers a week, for gosh sakes. Just how are they supposed to grow a number like that?

Yet that is the expectation, and so Wal-Mart is trying for more affluent shoppers. But that goes smack up against its brand identity as a discounter, which is a bad idea. No company can be all things to all people, no matter how large it is. As the story and report say:

But now, as Wal-Mart experiments with contemporary clothing, flat-screen televisions and nine-layer lasagna, that format has become a hindrance. To a shopper who wants to purchase a single dress for an evening out or a DVD player to watch a movie, "Wal-Mart’s one-stop shopping format becomes a time-consuming irrelevant obstacle," the report says.

That environment is conducive to "zero-time" shopping, in which a customer spends just a few seconds thinking about a product, like a new bottle of dishwashing soap. "But people don’t buy electronics, home décor and apparel in zero time," the report says.

The inevitable result is a loss of focus that will eventually cause financial problems. You'd think there could be other options for the company. For example, let it ship orders of commodities to more affluent customers - products they're associated with but at higher margins for the convenience factor. Maybe there are services they could provide as shoppers spend time in the store - dry cleaning, oil changes, photocopying - that don't require the sense of expertise and trust. Some of these it could provide through partnerships with companies that are already in the business. But going upscale? Time to send management out into the stores to work for a week and see what their business is really all about.

Cocaine Energy Drink Un-Shelved

Redux Beverages, makers of the energy drink Cocaine, is withdrawing the product from the market, at least until it can devise a new name and packaging, according to the New York Times. This is the sort of business story that makes you wonder what in the hell these people were thinking. Ah, yes, here's what they were thinking according to Clegg Ivey, a partner in the venture:

“Of course, we intended for Cocaine energy drink to be a legal alternative the same way that celibacy is an alternative to premarital sex,” Mr. Ivey said. “It’s not the same thing and no one thinks it is. Our product doesn’t have any cocaine in it. No one thinks that it does.”

“We like to think we have a great sense of humor,” he said. “And our market, primarily folks from ages 20 to 30, they love the ideas, they love the name, they love the whole campaign. These are not drug users.”

Sure they love the campaign. They probably also enjoy the red and white design of the can with the quasi-printed looking logo running vertically, a clear take-off on Coca-Cola. But, again, what in the hell were they thinking? Of course a business wants to make money, but people do have responsibilities beyond financial gain. Generating to the backslide of the collective mentality does no one any good in the long run. We've seen this recently in talk radio with Imus getting booted for racist remarks. There's plenty of criticism of the more destructive and misogynistic practicioners of hiphop and rap. We have so-called teen television channels pouring forth an alarming amount of sex, drugs, and other uncontrolled behavior, all to garner ratings and higher advertising prices. There should be some thiings that people are ashamed to do for money, and such activities are at the top of the list. By trading on sex or drugs, for example, they are simply legal forms of prostitution and drug dealing, except not as straightforward and honest.

Chocolate Manufacturers Want to Change Brand

Normally when companies talk about changing brand, they mean an advertising campaign. Real brand change is organic and involves changing the entire company to some degree or other. That could mean what Delta Song did when it deliberately engineered a specific customer experience before going to market or as companies do when they refine a brand by focusing on what they really do best. But some large members of the U.S. chocolate industry - through the industry trade group Chocolate Manufacturers of America - are petitioning the FDA to change the definition of chocolate so they can reduce their costs. (You can see a quick rundown on this with some links at my food blog.)

Certainly lowering costs is important, but when it requires a wholesale redefinition of what you make, you really enter the dangerous waters of trying to create a new type of business. Drop the cocoa butter and replace it with vegetable fat and no matter what the FDA allows you to call it, the result isn't chocolate as people understand it. Perhaps such manufacturers as Hershey, Nestle, and Archer Daniels Midland (ADM) think that people won't notice. Many might not, but some percentage of the population will. Think candy sales can't go down? They have at times for some manufacturers, as these companies all know. Making more money is great, but not if you potentially endanger your future business. Why do I get the sense that the CEOs of these companies, or even the presidents of the relevant divisions, haven't talked to a single customer in years?