A brand is the core of all strategies

When people buy shampoo and want to get rid of dandruff, they think Head& Shoulders first, not P&G. Yes, customers don’t need to know P&G. This is how people naturally communicate： When someone sees someone else buying something, they ask what brand it is, and they don’t care which company makes it，this is user perception.

When it comes to brands, the following story of Coca-Cola may be familiar to many people.

If all the Coca-Cola plants were burned down, it would only take three months to rebuild. Banks will rush to lend Coca-Cola money, suppliers will compete to sell raw materials on credit, dealers will line up to pick up the goods, and consumers will also be waiting to buy coke when production resumes. Even if it is short of people, coke has a universal appeal in the labor market.

Users’ cognition of the brand determines the profitability of the enterprise. In an industry with huge capacity, the profits of the entire industry are concentrated in a few enterprises with brands. The vast majority of brands don’t make money, 90% of enterprises are destroying value.

According to the latest report from Counterpoint Research, a Market Research firm,

Apple earned $151 per iPhone in the third quarter of 2017, the profit margins slipped to 60% from 86% in the same period in 2016, but it still controls more than half of the smartphone industry’s profits. At its peak, IBM (International business machines corporation) accounted for 95% of the mainframe industry’s profits. Alibaba may account for more than 100 percent of global e-commerce retail profits. Because other e-commerce businesses are generally lossmaking, at least in China.

Southwest Airlines is a legend in the U.S. airline industry. It has never lost money since it made a profit in its second year. Even after 911, when many Americans were afraid to fly, Southwest airlines also remains highly profitable. For a long time, this company’s profits exceed the combined profits of the entire U.S. airline industry.

Let’s make a hypothesis, if the Tesla is “copycat” by Suzuki, and the “copycat” level of Suzuki is very high, the quality is better than the genuine product, can Suzuki sell as the price of the genuine product? The answer, of course, is no. This is the power of the brand. Many knockoffs of luxury goods， they imitate the products incredibly, even the genuine manufacturer can’t tell them apart, but they can only be sold for 1/10 price of the genuine article.

The real brand can be realized pre-sale in the user’s mind, the customer has already decided who to choose even they have not seen the products.

As a brand that can’t create customers, won’t be selected by customers in mind, and can’t realize pre-sale, there is no doubt that it will be badly exploited by the marketing channels，For example, there are fees such as the entrance fee, bar code fee, shelf fee, storage fee and so on. This means that a new brand is now difficult to be born in traditional channels, the reality is so cruel.

“First-class enterprises sell brands, second-rate enterprises sell products, third-rate enterprises sell labor.” For the vast majority of developing enterprises, the brand is the most critical core competitiveness, is the core element of all corporate strategies. Cost competition and price war are the lowest levels of competition, the really smart companies use brands to capture consumers’ hearts, control their choices.

Get the brand positioning back to common sense

Brand Positioning must return to common sense, and common sense is what consumers have already known. The real world is only the appearance, the cognition in the consumer’s mind is the real reality. Positioning should follow the consumer ’s mind. Cognition and common sense are hard to change. We should be good at using common sense to establish positioning.

Poetic? That’s right! Clever? That’s right! But it also clearly and frankly explains the positioning to be expressed. Now you have to get back to reality if you want to be successful. However, the reality that really matters is the knowledge that already exists in the minds of potential customers.

To be different, to create things that do not exist in the mind, has become increasingly difficult, even impossible. The basic method of positioning, is not to create something new or different, is to use what you already know in your mind to reconnect the existing connections.

We have no idea what “too much” really means. One mid-sized supermarket now has 40,000 stock units (SKU). The strategies that worked in the past are no longer effective in today’s markets because there are just too many products, too many companies and too much marketing “noise”.

The most frequently heard question is “why”. Why do we need to find a new way for advertising and marketing？

A society that over-communicated should grab the consumers’ conscious mind

The answer to the above question is: our society is facing communication excess. Today the average American spends more than $650 on advertising. We do live in an overcommunicated society and there is no sign shows the improvement.

In an over-communicated society, if someone says how sensational your advertisements are, he is grossly exaggerating the potential impact of your information. This self-righteous view is disconnected from the reality of the market.

In such a noisy communication environment，the only hope of improving effectiveness is to select and choose information, focus on narrow targets and make market segmentation.

In order to defense mass dissemination, the customer’s mind will filter and reject most information. Generally, the mind only accepts information that is consistent with previous knowledge and experience.

Millions of money are wasted trying to change people’s minds with advertising. Once the mind is cognitive, it is almost impossible to change. The weak power of advertising is certainly less likely to make a change. ‘I’ve made up my mind, don’t confuse me with the so-called facts anymore!’, This is the way most people live.

Ordinary people can accept others talk about the things they know nothing about, this is why “news” is an effective form of advertising. However, they cannot accept being told that they are wrong. Changing minds lead advertising to disaster, while capturing consumer’s mind leads advertisement to success.