A is for anxiety at Apple! Can the tech giant continue to rule the market through innovation?

If you would like a brief history of Apple and can’t be bothered to venture onto Wikpedia for the answers you seek you should check out the below article.

http://www.makeuseof.com/tag/rise-fall-rise-apple-history/

In a nutshell Apple have evolved from a small start up into the tech giant it is today.  146 million iPhones have been sold in the last 4 and half years across the world while usage in the UK is around 75%.  But it isn’t only mobile phones where Apple has built a solid competitive advantage. They have also successfully dominated the personal computer and MP3 industries. Regardless of the market Apple enters, its brand has always been traditionally built on a firm foundation of innovation, entrepreneurial spirit and disruption. 

And therein lies the issue in recent times for Apple! Whether it is right or wrong many are predicting the company has lost its spark for innovation and will continue to experience a decline in brand value as it loses its flair for disruption. One tell tale sign that this this grim commentary may have legs can be seen with the recent news that the iPad has experienced a decline in sales compared to a rise in sales of all major competitors.

http://www.benzinga.com/news/13/07/3791142/android-windows-tablets-rise-18-as-apples-ipad-declines-aapl-goog-msft

You maybe quick to draw the conclusion that decline in sales is expected when you are the market leader operating in a saturated market. And whereas many marketers are quick to jump on the bandwagon and predict that the end is nigh for Apple we shouldn’t forget this important fact. It is tough at the top and Apple may now be simply becoming a victim of its success in the areas it made such a widespread impact in. So if this is the case what could be some other potential reasons for Apples decline in brand value?

http://www.forbes.com/sites/parmyolson/2012/11/05/iphone-loyalty-is-waning-are-you-surprised/

Some believe a fall in brand loyalty has led to a decrease in sales value and market share for the company.  Apple wouldn’t be the first company to not give loyalty the proper respect it deserves. Little to no effort has been made to understand the vast array of consumer and how this data can generate measurable sales value for the company. The lack of emphasis from Apple to lock the customer into the Apple brand maybe the reason why some competitors in the android market have grown up to 67% in the same year Apple has experienced decline.

Reading the above it is clear that there are several reasons why Apple has experienced recent misfortunes. However, we can also seen in the majority of articles featured in this blog that many regard the perceived lack of innovation from the famous rebels at Apple as the main reason the brand is struggling. And you may suggest that this is a concern Apple shares when we see how this year there was a 250% increase in R and D from Apple to bring the total investment to $3.5 billion.  Apple had to do something to address these concerns, as lack of innovation is a clear concern from all major analysts who continue to twist their knives into the core of the company.

http://edition.cnn.com/2013/07/23/business/apple-earnings-iphone-technology

A is for anxiety at Apple! Can the tech giant continue to rule the market through innovation?So what does the future look like for Apple? Well the Brand Avenger would suggest regardless of what the critics say we need to give apple credit where credit is due. The company still enjoys the luxury of being the 6^th largest company in the US and is expecting a 9% increase in sales in 2013. So whereas it is clear Apple needs to launch the next big thing that will changes the world sooner rather than later let’s not be too quick to put all our apples in one basket on this subject.

Should Wonga be worried about its brand reputation following an attack by the Church?

A brand that comes under attack by the Archbishop is a brand that is worthy of focus in our latest spotlight. Wonga as a payday loans company is always going to leave itself open to scrutiny. However, the latest critic could very well be one of the most difficult for Wonga’s marketing team to manage as they look to protect brand reputation.

http://www.bbc.co.uk/news/business-23433955

The Archbishop of Canterbury Welby is adamant that he sees Wonga as competition to the proposed plans for the Church to become a credit lender and is crystal clear in his strategy. The signal of intent is interesting as it not only highlights a very public attack by an influential member of an religious entity towards a brand but it also highlights a strategic repositioning of the Church to move into the world of investment.  

http://blogs.spectator.co.uk/coffeehouse/2013/07/justin-welby-pleases-both-left-and-right-with-clever-wonga-comments/

Long term Welby is gearing himself up for a fight with payday loan companies who can make a mark up of up to 5000%. Welby certainly won’t have any issues with leveraging overall positive perception or trust that a religious organisation should bring with it. In a dirty, seedy market such as short term loans an entity like the Church should be a breath of fresh air which competitors if leveraged properly will find hard to compete with.

By helping Credit Unions by offering them the use of Church facilities and local community networks in essence Welby is trying to create a competitive advantage through word of mouth and social marketing techniques. This type of influential marketing would not be out of place on a social media site such as Twitter or Facebook however in this instance Welby is going old school and bringing the battle to the streets. But is the tactic a viable strategy for the Church and for Credit Unions in general?

http://www.channel4.com/news/can-credit-unions-really-wallop-wonga

Reports have suggested Credit Union membership would have to increase six fold for them to begin to turn a slight profit; here’s where the Church comes in. It is clear as a businessman with a finance backing Welby understands the plights of some of the small brands that make up the credit union business. He will also understand that the Church as an entity has the power and infrastructure available to support these unions, essentially giving them an ethical stamp of approval. We really shouldn’t underestimate the power that the perception of the Church can have in this instance. Regardless of whether customers are religious or not the Church carries with it positive connotations, that should lead itself to positive perceptions in the minds of consumers. To add real weight to this movement the smartest thing these credit unions could do would be associate themselves as close as possible to the Church. The Church could even look to establish the credit union movement under a brand which could really begin to challenge some of the established short term lenders. Not only could this benefit credit unions but it could also improve the reputation and visibility of an institution which continues to lose influence with the congregation.

But this type of argument is pure fantasy until Welby fully unveils how the credit unions and Churches can work together. As no real branding of the Church currently exists let’s refocus our attention back to Wonga. Although Welby maybe the most recognisable recent critic, Wonga has certainly suffered some other hits to its brand reputation recently.

http://www.guardian.co.uk/football/2013/jul/25/papiss-cisse-newcastle-wonga-row

Football player Papiss Cisse has since reneged on his ambition to not wear Wonga branded sports apparel due to religious beliefs however the original reluctance to advertise the payday loan company brought with it negative PR for Wonga. Add this on top of the Archbishop’s revelations and it would appear that Wonga can’t do much right at the moment. All this would suggest that retaliation in some form was going to come and in this instance Wonga has gone straight after the Church in an effort to address ethical issues surrounding the brand.

http://www.marketingweek.co.uk/news/wonga-bashes-archbishop-with-ten-commitments-ad/4007474.article

Wonga will look to hit multiple media channels in an effort to rebuke some of the negative perception surrounding the brand and the Brand Avenger wonders how successful they will be in riding the storm and coming through to the other end.

This case also highlights a strong argument over ethics. Wonga has many critics from all areas that are quick to point out what they deem as unethical practice by this brand and all others which operate within the market. Is it possible for a company steeped in such controversy to make such a long term viable profit?

http://www.guardian.co.uk/business/2013/jan/05/wonga-bad-debts-rise-profits

Well referencing the above article investors certainly seem to think so, seen in a $1 billion valuation of the brand when it nearly floated on the US stock market last year. Put pure and simple ethics will not stop brands like Wonga making money. This is clear in pre-tax profits and stock market valuations. As long as there is a need for consumer borrowing there is always a chance short term loan providers will prosper. Certainly in the long term the brand will have to be vigilant of credit unions offering small % loans but both they and the Church have a hell of a long way to go before they can begin to leverage the strengths and capabilities needed to compete. Until then short term loan providers will continue to make profit regardless of whether it is right or Wonga.

Is Amazon Fresh the new Prince of Bel Air and beyond?

Tax avoidance has inadvertently become a brand manager’s worst nightmare this year, leaving some of the biggest American companies having to squirm their way through long-winded excuses and explanations as to why they aren’t paying acceptable levels in the UK. The Brand Avenger recently focused on Starbucks and what impact avoidance would have on its brand decline but now the attention of the ‘beacon of brand justice’ turns its focus to Amazon.

http://www.guardian.co.uk/business/2013/jul/19/oecd-tax-reform-proposals-amazon

Read the above article and you maybe surprised to hear that Amazon’s current £4.2 billion annual sales from its 8 warehouses in the UK are currently NOT taxable as funds are routed through Luxembourg! However that is all set to change if G20 reforms have anything to do with it with the tax issue becoming a question of legality and not just morality. And the change probably couldn’t come soon enough for those marketer’s responsible for enhancing Amazon’s brand reputation on English soil.

http://www.marketingweek.co.uk/news/brand-audit-amazon/4006645.article

Amazon’s brand perception has taken a hit this year which is big news when you consider the brand has enjoyed three years of relatively, steady growth in terms of perception metrics in the UK. Of course when you compare this to a 22% rise in sales within the same quarter it might be premature to begin hitting the panic buttons but it is clear that Amazon need to do something to address the controversial tax practices if it doesn’t want to impact the success of future brand extensions.

When focusing on brand extensions lets focus our attention on Amazon fresh.

http://techcrunch.com/2013/06/10/amazon-bets-on-web-groceries-expands-amazonfresh-to-l-a/

Amazon Fresh is the ambitious but at the same time somewhat logical attempt to expand Amazon’s distribution capabilities into the grocery market. From a size of prize perspective the grocery market would certainly attract any company who feel they have something unique to offer. Put simple the hundreds of billions in sales a year grocery generates makes Amazon’s £4.3 billion in the UK look like small fry. Tech crunch repots that following a successful trial in Seattle the grocery arm of Amazon has somewhat quietly rolled out into LA and there is a strong possibility the rollout could reach other urban Cities in the US within the next few years.

http://www.lamag.com/lafood/digestblog/2013/06/20/testing-testing-amazon-fresh-delivers

Initial trials of the delivery service in a new area have returned positive results for Amazon Fresh. There are of course some clear advantages to the service that could expand to all markets it could operate in. The amount of choice it could give the consumer in the shopping mission would be unprecedented. All of a sudden the shopper would be able to choose between small independent butchers or large-scale discounters for their Sunday meat option. Dessert could come from any one of the numerous small suppliers of fine produce. Put simply it is a convenience customers dream even if it does make the process of increasing basket size with impulse purchases a little trickier.

http://www.investopedia.com/stock-analysis/060513/amazonfresh-good-or-bad-move-stock-amzn-ahony-kr-swy-ups.aspx

Then of course we have to think of the bottom line. Is the roll out of Amazon Fresh good for the stockholder? Well opinion seems to be split on this one. If you were to look at Amazon Fresh investment in complete isolation to the rest of Amazon’s portfolio you may say it is a loss leader and not worth effort. If you were to look at the brand extension as a complimentary service for customers that encourage them to spend more on Amazon and perhaps pick up other products while shopping then this is where the true value exists.

But I digress; the question you might be quite rightly asking now is what does all of this have to do with Amazon’s UK tax avoidance? Well the answer can be found in the public’s overall current perception of the Amazon Fresh.

http://www.marketingmagazine.co.uk/article/1191936/nearly-40-shoppers-would-not-buy-groceries-amazon

As we stand in todays market 40% of shoppers claim they would not buy groceries from Amazon. It is clear that the tax avoidance issues and questions over ethics still have an impact on the potential growth of Amazon as a business. Of course this won’t be the only reason why customers would be reluctant to switch to Amazon and I’m sure there were plenty who never thought they would buy a book or item of clothing from the site as well. However, clearly this is an interesting enough statistic with a big enough negative outcome that cannot be ignored. Brand metric scoring has already showed us that Amazon’s image has suffered. If they are to truly start growing their company into a viable contender for the lucrative grocery market immediate brand building and recovery strategy needs to be developed. Amazon want to be in a place where they become as known for selling Apple Crumble as they are for games and accessories rather than looking back in despair in a number of years for believing they were too big to crumble. Listen to the customer, do the right thing and be the vision want to achieve.

Under Armour not under attack. How are growing brand can use advocacy to continue to gain success

Let’s do something a little different this week. Instead of focusing on a brand that either may struggle or is currently struggling let’s turn our attention to a rising star. Founded in 1996 you would be forgiven for thinking Under Armour was well established long before the 90’s.  As a relative small part of the American Football clothing market initially the brand has quickly grown into a major player across the world. What was originally Kevin Plank’s idea for a shirt that would stay light when saturated with sweat has quickly grown into the brand that is Under Armour today. It is now responsible for making some of the most established and most familiar sporting brands across the world sweat under their very own dri-fit collars. 

One look at Under Armour’s stock market value growth will tell you all you need to know about the companies’ prospects for the future. Value share has more than doubled, which has fuelled the brands aggressive expansion strategy across the US and the rest of the World.

 http://topics.nytimes.com/top/news/business/companies/under-armour-inc/index.html

Put simply Under Armour has quickly become the sporting brand of choice for the in crowd  in the US market, with numerous celebrities ready and willing to wear the apparel for the millions to see. Hoping to expand on this popularity Under Armour has looked to acquire increased brand recognition and reach in the UK market through initiatives such as sponsoring Tottenham Hotspur Football Club. The partnership seems to tie in perfectly for growth strategies for both the US sporting brand and the UK football institution. Take for example Spur’s long term ambition of leveraging presence in the US market creating more than its already reported 6 million American followers.

http://www.marketingmagazine.co.uk/article/1164063/spurs-earmark-us-key-international-priority?HAYILC=RELATED

Under Armour have certainly put a considerable amount of investment into the partnership with Spurs- a reported £50 million over 5 years! Of course not only will this benefit Under Armour in terms of increased recognition but if Spurs stand to gain out of this as well then it becomes clear why this was a very smart move for at least one of the parties. What will turn it into a smart investment for Under Armour will be determined by how their brand presence continues to grow in the face of key competitors. The sports apparel market is already fragmented as it is and brands can quickly find themselves losing valuable share in the minds of consumers.

http://www.marketingweek.co.uk/news/under-armour-readies-aggressive-bid-to-take-on-nike/4002740.article

Under Armour will not allow itself to think small when it comes to positioning. They have quickly looked to pitch their tent in unbelievably close proximity to the Nike camp. Their motivations can be clearly demonstrated in their marketing strategy. As a $5 billion business they are of course small fry compared to Nike’s powerhouse brand, however momentum can be everything in the marketing game and it is clear they do not struggle for this.

http://www.marketingmagazine.co.uk/article/1189953/armours-top-marketer-spurs-speaking-nikes-name-wearing-womens-lingerie

Well you consider the very mention of Nike is banned in head office you begin to realize how powerful the spirit of competition is within the company. You could call their plan ambitious yet the power of advocacy and cmart PR product placement continues to allow the brand to gain the aforementioned momentum which is so important. Taking all of this into consideration it would appear the future is bright for Under Armour and there is plenty to be optimistic about. In case we have not covered them all already the following article neatly sums up some of the main factors the brand have going for it.

http://www.dailyfinance.com/2013/05/02/under-armours-bright-future/

With such an aggressive expansion strategy on the cards you could argue that under Armour may struggle to keep its eye on the prize especially within the market where it originally made an impact. However, holding onto brand traditions appears to be an especially important factor for Under Armour and recent marketing campaigns highlighting not only a strong link to American Football but also building off the brands Baltimore heritage demonstrate they aren’t about to forget where they came from.

http://articles.baltimoresun.com/2013-07-08/business/bs-bz-ray-lewis-under-armour-commercial-20130708_1_ray-lewis-local-coaches-and-players-high-school-football

So concluding thoughts on Under Armour? Well you may very well say ‘Brand Avenger has gone soft but I have a good feeling about Under Armour. They are relatively young, have invested in a long term strategic mission with a clear goal of stealing share from Nike. However, the real difference for Under Armour will come with a strong focus on advocacy which makes me happy to read articles like the one below.

http://www.marketingweek.co.uk/news/sports-brands-offering-cash-to-fans-to-amass-advocate-armies/4007235.article

No matter who you are and whatever markets you operate in or how big or small your sales value figures are you can never underestimate the power of looking after your brand loyal customers. Under Armour are right to research ways into ensuring advocacy isn’t lost especially if its biggest competitors are doing this also. Pacino once said a game is won or lost depending on inches in Any Given Sunday. If Under Armour continue to focus on advocacy, thus protecting its customers with the greatest sales value they should end up miles in front.

 

Anyone for tennis? How powerful is brand association for Wimbledon’s main sponsors

Every summer thousands of spectators and multiple tennis icons gather together in the South West of London to embrace a time honoured tradition. Wimbledon has a reputation for being one of the finest sporting tournaments in the world and with that comes a massive opportunity for lucrative brand partnerships and million pound marketing sponsorships.

For many brands Wimbledon is a safe choice when deciding to embark on partnership. The tournament boasts a mass celebrity following and strong connotations of a culture that embraces the best of British. Grass courts, ball boys and ageing celebrities such as Bruce Forsyth tucking into strawberries and cream or Cliff Richard leading a sing along with the crowd, all give the tournament a safe feel. Add this to a healthy bout of competition, strong camaraderie between players and worldwide brand recognition and it is clear to see why many feel they can’t go wrong with associating themselves with the grass court tourney.

Which brands have looked to partner with Wimbledon in 2013? Lets take a look at the official sponsorship page.

http://www.wimbledon.com/en_GB/suppliers/

There are 13 big players in the championships across all types of industries. When you look at the list some seem to make complete sense, take for instance Slazenger. For 111 years Slazenger has had the advantage of supplying tennis balls for Wimbledon. There is a reason why Slazenger has taken out such a long association with Wimbledon and it probably isn’t rocket science for anyone reading this article. If you are the official equipment provider that some of the worlds biggest stars will use in one of the worlds oldest tournaments you are effectively protecting your market share in a market where commodities are differentiated by branding.

Then there are brands like HSBC. You won’t find HSBC branding plastered across the tourney boards or the worlds local bank logo included in the official Wimbledon branding. Taking into consideration the strong brand guidelines Wimbledon put in place for its sponsors to adhere to how does a brand like HSBC strategically take advantage of such a partnership? Well of course you could argue they will benefit from being the exclusive ATM of the event, a move which should yield some shot term profit and brand association.  However, HSBC are also smart enough to know that there are other ways to not only capitalize on the tournament but also link it into their own brand mission.

http://www.ft.com/cms/s/0/cb10fbbe-df19-11e2-881f-00144feab7de.html#axzz2Y6uYUyay

Bringing the tournament to other Countries put pure and simple is great brand strategy for HSBC. The brand may not be operating in the same industry of the game like Slazenger but it has made the association work for its brand mission of being ‘The World’s Local Bank’.

Then there are brands like Lavazza. As a strong Italian brand Lavazza have adapted a media strategy centered around digital and Underground marketing for Wimbledon. And the CEO appears to be happy with his choice when you reference the below interview.

http://www.marketingweek.co.uk/news/qa-lavazza-group-cmo-carlo-salvadori/4007237.article

Salvadori has a clear strategic mission of increasing brand recognition and sales of Lavazza in the UK. However what worries me is Salvadori’s reaction to the question of how this will be measured.

“we have been measuring the positive effects of our presence at Wimbledon by the fact that we have been gaining more and more consideration in the UK market.”

Consideration won’t necessarily lead to increased sales for Lavazza. If they have well and truly looked to establish a long-lasting relationship and lucrative sponsorship deal with Wimbledon then I hope they have far more advanced ways of measuring the impact of the deal then consideration. For two brands with such contrasting brand missions it remains to be seen if such a partnership will yield returns and if Lavazza can benefit from this investment.

So who wins in terms of their decision to invest in Wimbledon will emerge as the champion? Well it might not be any of the partners but in actual fact the Lawn Tennis Association.

http://www.guardian.co.uk/sport/2013/jul/04/wimbledon-commercial-world-chinese

Earlier in the article we mentioned Wimbledon’s strict brand guidelines. From the offset all brands that decide to invest know exactly where they stand. If the LTA is to protect the image of this luxury brand all other partnerships must be subtle. You want find Rolex plastered all over the players kits or the surface of Murray mound but you will find it on the official clock on Centre Court. You won’t find Evian floor graphics painted onto the grass of Court 1 but you will see players drinking from Evian bottles. All of these tactics are clever business as it protects the brand reputation, enhances brand value and makes Wimbledon a viable brand to be moved to different markets like the Far East as mentioned in the above article.

All in all many will come, few will remain and only a handful will be crowned champions at Wimbledon. But this year, and for many more to come when it comes to the final battle between Wimbledon and its sponsors for brand supremacy there is only one winner. Wimbledon as a product of the LTA will continue to win hands down GAME, SET AND MATCH.