Mark Ritson on Differentiation and Positioning
This episode from the archives features Mark Ritson discussing brand strategy.
Mark answers some of the burning questions I had around understanding the market and differentiation and positioning.
In this episode we covered:
- Rebranding Transferwise
- Brand purpose
- Market research and how it differs from brand strategy.
- Marketing strategy
- The intersection between business and brand strategy
- Relative differentiation
Mark Ritson: One of the great lessons of brand and all marketing planning is you do it 12 months at a time, you know the beat of any organization is the financial year, quarterly.
Shireen Smith: Hello, and welcome to the Brand Tune podcast, which discusses all things brand-related, including the essential trademark and IP dimension. I'm your host, Shireen Smith, IP lawyer, Brand Manager, and author of Brand Tuned: The new rules of branding, strategy, and intellectual property.
Shireen Smith: Before the episode, I wanted to mention the Brand Tuned accreditation program, it teaches you how to develop a brand strategy that incorporates intellectual property. IP is not just a legal subject, but a lawyer can advise on after you've already developed a brand. It goes beyond availability, searching, and registration of trademarks. Because the very choices you make during brandings, such as of names or other brand identifiers are IP decisions. Taking IP on board is the way to position a brand for value and success. Register Your Interest brandtuned.com To be notified when there is more news.
Shireen Smith: In this episode, I asked Mark Ritson some of the burning questions that were on my mind as I was writing my book, specifically around understanding your market and establishing your brand strategy, the U and the E elements of my Tuned Framework. I asked him about business strategy positioning and brand strategy, what he thinks of Byron Sharps views on differentiation and distinctiveness, whether you can really own a particular attribute, and how his brand strategy dealt with in the type of company Mark consults with and I also wanted to know Mark's views on brand purpose. I think you'll enjoy this episode.
Shireen Smith: So, Mark, welcome to the branching Podcast. I'm delighted you're here. You may or may not have heard the news about transfer wise rebranding to wise, but I just love your views about an established brand like transfer wise, rebranding, they've rebranded to wise because they felt that the name limited their expansion plans, what do you think of that movement?
Mark Ritson: That's a massive mistake and worry because they're meant to know what they're doing. The there's a very there are very few things that are simple in the world of branding, but one of them is rebranding. You only do a rebrand when you legally or commercially have to. You know Accenture had to do it because Andersen consulting wanted their name back. You know what I mean? Yeah, you do it when you have to do it. You know, Marathon, change the snickers because they wanted global alignment. And you know, the UK was sticking out that made sense to the reason it's such a dumb move is salience is 70-80% of the Browning game and by changing your name, you decimate it for many years to come. So yeah, very silly and very disappointing.
Shireen Smith: Great. Well, this brings to mind Byron Sharp's findings that brand meaning isn't as important as it should be.
Mark Ritson: That's quick, the Dark Lord is already amongst us and we're only two minutes in gone.
Shireen Smith: Basically, he says that brand meaning isn't as important as people assume and I think the reason for this rebrand is just around the meaning and probably people are not thinking about transfer wise in any way except the name now, but it's so established. So, do you agree?
Mark Ritson: I look I usually find myself in the same position these days when it comes to Ehrenberg-Bass theories. I think they are 110% right in the sense that they are brilliant. I mean, we have to give credit Ehrenberg-Bass they have disproved or reversed many of the sacred cows of branding, but I feel they always go a little too far rhetorically, despite their scientific claims, and tend to overegg the omelet slowly. And this is a classic example. You've got to give enormous credit Ehrenberg-Bass to have first of all believed and then shown and then persuaded everyone that brand awareness or salience, and they're not quite the same thing. It's not just a gateway variable, it's actually the most important part of the branding construct, but then they just go too far and take too much of a crap all over brand image. It's true that brand image is not as sensitive or as vulnerable, as many brand people would have you believe. But I do believe still there are cases where either for a core product reason or a specific brand image reason, there will be damage done to a brand if it contradicts its image. The cliched example that you will remember, because of your nationality is, of course, the Gerald Ratner cliched case 30 years ago, right when you sit when you're selling semi luxurious jewelry, and you say it's crap. Clearly, that generates salience but also destroys the image. You've got to go pretty, you know, you've got to do that kind of thing. Gillette are the most notable example. Their toxic masculinity campaign generated a shit ton of salience, but also contradicted the very thing that most of its loyal customers thought was part of the brand, not toxic masculinity, but a masculinity that wasn't necessarily a bad thing. And again, I think you know, yet but they're the exceptions. For the most part, what we find is we can be oversensitive about image and salience is mostly it and Ehrenberg-Bass are correct.
Shireen Smith: So, from your experience of working with big brands, how do you think the trademark dimension would have been dealt with in a case like transfer wises rebranding? Basically, I asked this because as a trademark lawyer, I think TransferWise is a much more distinctive name, and they're gonna have huge problems registering wise internationally.
Mark Ritson: For two reasons. Sure. And you want to upset right for two reasons. First of all, because when you move to wise, you're entering a world of pain at a global level, you know, because that's going to be owned by a bazillion different companies in different sectors. But second, because, you know, if I don't know how old TransferWise is.
Shireen Smith: 15 years old.
Mark Ritson: Yeah, in that 15 years, they doubt a territory, which belongs to them in IP terms, and the move to something else, as you know, opens up all kinds of floodgates. Now, I mean, when you look at, you know, new brand creation, it's hilarious, because you have to play around with words or misspell things or put numbers in there. Because there really isn't any, both in terms of protectable ID, but also in terms of web rights. There isn't anything left out there. So yeah, it again, for those reasons, never mind, salience reasons, it's a silly maneuver.
Shireen Smith: Yeah, what I think is that lawyers are not involved sufficiently in a branding process so that people make these decisions. And then as an afterthought, it has to be checked on registered. So I just wonder whether when you're working with big brands, they bring in their legal departments, or are you not aware of what they do?
Mark Ritson: No, I'm very aware. I mean, there's two answers to that. The first answer is in my consulting life, which is quite extensive. I've never been involved in rebranding. Because I, I just think it's dumb. So, I've never been in the situation, because I literally in several instances, if I don't do that kind of work. I don't think it's a good idea. I mean, it's a totalitarian response. So, I haven't been in this specific place where a rebrand has happened. I have been in positions where brand names have been created. And in those situations, and I'm not just saying this, because you're talking to me, I've said look, this is the one occasion where it's, it makes a lot of sense to talk to lawyers now and spend a bit of money on them. Because, you know, putting it in brand managers terms, there's nothing worse than investing two years and 5 million quid and a significant amount of company resources into building brand equity only to discover that the name that you've created is no longer tenable because you didn't check. So, you know, I think that's absolutely Your advice is correct. For rebrands and also product naming. I would not have lawyers anywhere near the rest of the branding process for reasons you might not want to go into. But in this one area, I totally agree.
Shireen Smith: Okay, well, that's curious, why do you think that?
Mark Ritson: A useless on strategy and overly conservative and risk averse and get in the way of other things. So, the one the one area where you want them there is to be risk averse and overly litigious and conservative when it comes to naming and doing stuff, that sentiment is correct. But when it comes to everything else, they're an extra pair of underwear that we don't need.
Shireen Smith: Yeah. Okay. I'd love your help to actually understand the interplay between business and brand strategy. In the sort of size of organization, you tend to work with. Which parties would be involved in business strategy who aren't been involved in brand strategy? And, you know, what extra things do you think about in brand strategy?
Mark Ritson: Well, I know it's extra, I think it's more elephants all the way down, right. So if you look at a relatively marketing centric company, I mean, in a cement organization, brand strategy doesn't really matter, is there but you know, but in the kinds of companies I work for, where brand could be 40-30, more than half the total market capitalization of the company, if you actually run the numbers, brand centric companies, then yeah, brand strategy is a major subsequence of the corporate or business strategy. In my world, that means that the CMO is the or the SVP, or whatever the time is, usually, the CMO is the only person that has a foot in both camps. So, he or she is on the board, that is a party to the actual corporate strategy decision making. And then he or she turns up, you know, usually at my level, with the marketing team to delineate that into a brand or marketing strategy. And they mean the same thing. In almost every case. And so, what it means is, you'll often get quite broad and rough corporate strategy objectives, you know, become number one in the market, break, $500 million, globally, you know, stop losing money, whatever. And they look very general. But in reality, they hopefully have come out of pretty good strategic thinking, our job then in the marketing group is to translate that into so how do we do that, from the ground up with the market to align with those more broad corporate goals. So, the CMO tends to be the bridge, I don't do my days in a corporate boardroom or about, I don't know, one a year if I if I'm unlucky. So, it's not where I play. But the minute it comes out of the CMO into the marketing group, we typically have strategic imperatives, which we have to translate into, so what's our brand strategy going to be?
Shireen Smith: Okay, so wouldn't they look into positioning and do research about the customer segments when they're looking at business strategy or does that happen only?
Mark Ritson: Definitely, definitely not as never happened in the history of corporate decision making, in my experience, unless there's a merger of brands, unless there's some particular issue which has been raised up to the radar, it's a very disappointing. I mean, I don't want to I don't want to underplay my role, right. So, I have I have been in quite significant boardrooms, for certain short meetings, I have interacted at that very big level, on very limited basis. It's always very, I try to explain this to MBA students, it's always very disappointing. For those who are sort of, you know, 25 or 35, who think this is the zenith of the capitalist machine, I'm going to be with the great athletes of the organization. Because none of that's true. By the time you get to the boardroom of any decent-sized company, what you've got the people that are clever, but not intelligent, and politically astute, not necessarily managerially, gifted. That's what you've learned from most boardrooms. There are exceptions, but very few. And marketing really doesn't matter at all. At that level. It's very rare. There are exceptions, again, where marketing or customers or anything above a basic net promoter score would ever feature in the decision-making of the company. They're interested in product. They're interested in sales profit, and then ultimately in share price. And I know it sounds funny, but I mean this and I'm not speaking from a place of ignorance. The thing about Most boards is this. They're dumb enough to not follow the money all the way to its origin. So, they follow it to sales, they follow it from product, they follow it to profit, they just don't go back all the way to the customer itself, and how the customer thinks and feels. And I can't explain that, but I can tell you that that's an absolute reality of not every large boardroom but most
Shireen Smith: Okay, so when you're thinking of a business model for the, for an idea, you'd be looking at product market fit, and just generally considering all aspects of your idea, are you saying that you wouldn't then be doing any research or to enter the market to understanding the market?
Mark Ritson: No, I'm saying that at the board level, there would be none of that. at the, at the, at the brand or marketing level, sure we'd be you know, in most cases, that's where the market research kicks in. So, what now you're in my territory where I operate, right, so I've worked with a very large number of very big brands on brand and marketing strategy. And what we would do in that situation is, we would, you know, if it's done properly, we divide up brand strategy into three phases. First diagnosis, which is research and understanding the market and what's been going on, then we go to strategy, and then we go to tactical execution. And that 123 trick teaches how most well-run brands operate. So, diagnosis or research, absolutely is the first stage in the process. Even if we're not launching a product, we're just brand tracking, we're just reviewing segmentation, we're creating a new brand plan for the new year, we will always step back and do diagnosis, usually about three to four months out from the start of a new financial year.
Shireen Smith: So that's setting the marketing strategy, which might be a shorter-term thing than the brand strategy, which I gather is more like, three, five years.
Mark Ritson: No, not necessarily. So, you're right in the sense that, again, I wouldn't, I wouldn't separate brand or marketing strategy, the difference between the two is purely based on organizational structure. So, if you go and work for HSBC, they'll have a marketing strategy because they're essentially a branded house. It's just the HSBC brand. So, each country has a marketing plan. If you go and work for LVMH, they've got 75 brands. So, they have brand plans that all meld together into an overall approach, but it's very much done brand by brand. That's the only real difference. And one of the great lessons of brand and all marketing planning is you do it 12 months at a time, you know, the beat of any organizations, the financial year, quarterly, and you plan in 12 months increments. Now, that does not mean to your point that you might not have a two, three or four year journey in mind, but you eat the elephant one year at a time. And the reason is very simple. If you don't do that, I've seen companies with their three year marketing plans, and they do a lot of work on year one, and then you just extrapolate the crap out of it for years two, and three, we don't know what's going to happen in year two, and three, we don't know what the segments look like, or what the competitive moves are, or indeed what we will have achieved in that year. So, you do it 12 months at a time, you don't do in less than 12 months, you know, there's an enormous emphasis on agility at the moment, which is a good thing in some cases, but which can often also stand for hot desking a lack of organizational structure and absolutely no strategic plan of any kind. It's good to be agile, but I always say to clients, we first must have a strategy before we can begin to think about being agile around it. So yeah, 12 months strategy is always the way to go, though, to your point, there can be you know, a plan to get somewhere in three or four years, mapping it 12 months at a time.
Shireen Smith: So, when you're considering strategy, you're also looking at your positioning, understanding the business that you're in. How do you square Byron Sharps point that differentiation doesn't matter. And it's only about looking like yourself distinctiveness? How would you deal with that?
Mark Ritson: I don't disagree. But I don't agree, which makes me sound a bit like plunker. But so first of all I talk about with my clients, I talk about relative differentiation. And what I mean by that is really three things. I mean, you know. First of all, let's be clear, sharp is correct. Differentiate or die owning attributes, unique selling propositions. These are the concepts of people that don't understand what they're doing, which, unfortunately, is the majority of brand managers. You cannot own an attribute; I've looked at 1000 data sets literally. And I'm yet to see any brand on any particular attribute when you control the size.
Shireen Smith: What about Volvo owning safety for a long time?
Mark Ritson: It doesn't, and it didn't even back in the day it had a, and this is my point. It had a relative significant strength in terms of perceptions of safety, but there were other automotive brands if you control for size, etc. That also had good you know; it wasn't as if we had a five-point like scale. Volvo was a five or 4.6, from the market and every other brand was, you know, 2.3. If the data never looks like that now, your Volvo example is a good one, don't get me wrong, it still would be. I've worked for brands that do have a relative advantage on certain attributes versus the competitive set. But that isn't differentiated or die, that isn't only an attribute that's saying that for these three associations, or attributes, we do have a significant perceptual advantage. Now, to achieve that, you must only have a handful of attributes you're focusing on, you have to focus on them for a long time. And they have to be the right ones in terms of your brand and your customer desire and your competitors. And those are big gifts. But yeah, that's why I said when I say relative differentiation, I mean, first of all, relative to the competition, you are going to have a relative strength if your Volvo on safety, you're not going to own it, it's not going to be unique to you. Secondly, it has to be relative to salience Sharp is correct. The most important thing for Volvo is to come to mind when people think about cars driving new cars. And that is much more important than safety, even though brand managers might struggle with that thought. And then finally, it's relative to the other associations that Volvo owns. So again, when you atomize these things as unfortunately, sometimes even Ehrenberg-Bass do. It's not just about safety. It's about the three or four associations that together we're trying to link together to create login, use a fancy word of gushed out, that all together create something valuable in a category. So Swedishnes and safety and a little bit of conservatism perhaps, and environmental concern, may well be also linked, and I'm making these up, but you get my point that, you know, when you position a brand, usually not always, but usually there are three or four things going into that overall position, and they all track off each other.
Shireen Smith: Could your purpose be an aspect of how buyers are likely to choose you that? Yeah, stand out?
Mark Ritson: What in one of the 100 cases your purpose is really your position in the marketplace? In the other 99 cases, it's total hogwash. And it's the wet dream of brand managers who are ashamed to sell things, and don't really like going to dinner parties in North London and admitting that they sell coffee or beer, or God forbid, petroleum. So, they invent something that makes them sound better. You know, they're, they're helping to change the world. I'm sorry to sound cynical, but it is so pathetically bad. One of the things you learn early from looking at data, and brands is that brands are little, little things, no one gives a shit about them, except the brand managers that run them. And purpose is really a big, big thing. And in reality, what we're seeing with brand purpose is in the era of incredible self-obsession from large brands, no consumer gives a damn about what brands think about COVID that, you know, that tinkling pianos and people looking concerned out of windows, that's the ego-driven nonsense of brand managers who have forgotten that their brand isn't part of the consumers life. It's just the thing they clean their teeth with every night. And so, it's really sad to see in the moment, his obsession with purpose. There are exceptions. You know, Patagonia is the cliched one, Ben and Jerry, I really like the work of Dole at the moment who are, you know, their purpose is to get more fruits into the American diet, that's a great purpose, and there is more to it than just making money. And it's something they can deliver on, but for every dull there is, you know, Starbucks, BP, you know, doing nonsensical things, Heineken, that, you know, just don't bear any, any kind of any kind of assessment tool.
Shireen Smith: So how can a brand take a stand on something have a point of view and differentiate itself in that way?
Mark Ritson: Well, it has to start as it always has done with what the customer wants. There is a standard framework for positioning which hasn't changed for a century, which is essentially the three C's what does my target customer want? What can I deliver, and what does the competitor for this particular target customer offer? And I'm looking for things that the customer wants, that I can deliver better than or different from the competitive set. And if you can find two or three of those things, you're going to make a shit ton of money in my experience. And whether that's purpose or position or attribute or image, it really doesn't matter. The goal of positioning within brand strategy is to identify what is it that we want to be associated with all brand positioning is the intended brand image. If I have three brain cells in my target customer's mind, what do I want these brain cells to contain terms of an association or attribute that's all positioning was ever meant to be. We just turned it into some gigantic Herculean, purpose-driven pursuit, because unfortunately, most marketers overstate their own importance in there, in the centrality of brands in the lives of consumers,
Shireen Smith: Essentially, then, if a brand is able to take a stand on something and become known and wanted by buyers, you know, buyers buy, and then the competition, move in and offer very similar things take a similar stand. Does that mean you're constantly having to revisit your positioning and tweak it.
Mark Ritson: No, it's a good question? No, it's actually the opposite, right? I mean, what it means is you've got to stick to your guns, because ultimately, if you, you know, there's a great case study right now with COVID-19 right? There are several companies offering relatively similar COVID vaccines. Yeah, but Pfizer is winning the battle, not because it has anything different. Its efficacy rates are very similar to a couple of the other vaccines now. It's just that they got their first they're shouting the loudest, and they've got the, they've got the spotlight on them. So, the reality is, most markets in my experience is you get there. First, you stake out your territory, you claim those things. And then hopefully, you can protect them. Remember that most marketing dollars that are spent a defensive, there's no attempt to grow sales, there's an attempt to defend what we've already got and reinforce the brand that already exists. So, the reality is no, if someone comes into your territory and copies you, the best thing to do is just to continue to be yourself, you know, I mean, I always cite an example of my wife was immensely more attractive than I am, she must mean, I would guest at least a dozen men a day, who are more attractive, in better shape and more attentive than me. And so far, I mean, there's still time, she hasn't left me, because no one can be more me than me. And for whatever strange reason, she seems to enjoy that. So, the trick is to be yourself, and not to be distracted by others coming in and trying to play your game. It turns out that when others tried to play your game, they struggled because your game was always best played by you.
Shireen Smith: Okay, so that's interesting because that suggests you would stick to your positioning and, but Jenni Romaniuk was suggesting that you wouldn't hardwire your positioning by choosing a name or tagline, for example, to bed in. I'm just having trouble reconciling.
Mark Ritson: I disagree with that. I normally agree with Jenni. I think she's very, very smart, particularly on obviously, distinctive assets. No, no, I think that I think one of the great lessons is to is absolute to bed in your name and bed in your strapline, and not to mess around with them. I think there's, you know, I think there's a terrible tendency of marketers to change and alter and update these things when in reality, the customer hardly notices. So, I would absolutely say we are guilty in marketing of changing things too often on a whim when in reality, we should maintain them.
Shireen Smith: Okay, that's interesting. Well, thank you very much indeed, Mark. Just to finish, I wonder whether you can recommend any resources for people to better understand brand strategy and brand management?
Mark Ritson: Yeah, it's very self-serving. It doesn't mean it isn't true. I run the most advanced course in brand management in the world called the mini-MBA in brand management. So, I've taught brand management at London Business School, MIT, Melbourne Business School, or various other fine world's leading business schools. And about four years ago, I took that course. And I offer it online every April and every September to anyone. And it's 100% online, you can do anywhere in the world. And it's better than anything being taught at any business school offline or on big one, it just is. And we get a ton of CMOs and senior brand managers from 44 Different countries who do the course. And everyone is welcome. And so, check it out mini-MBA in brand management. If you Google out you'll see my beautiful, spelled figure, and we'd love to have anyone on the course of April.
Shireen Smith: Well, I've signed up to do your Mini-MBA
Mark Ritson: What are you doing Shireen, you do marketing or brand.
Shireen Smith: I’m doing the marketing first, but I intend to do the branding the brand one in September next year.
Mark Ritson: Makes sense if you can do the two that's definitely the sequence your marketing is very much the core at first-year MBA class in an overall marketing it's still pretty advanced, but it's you know, foundational. And then yeah, great, because the brand course will be right up your street, you'll love it. And of course, you, as you may already know, you create a brand plan during the course. And then you run it in a simulation for five years, and your grade is your share price at the end of the five years. So, it makes for some frantic activity I can tell you for when we get to that point, yeah, people really lose their shit, which is exactly the intent.
Shireen Smith: Well, I look forward to it. The only issue I have is that it doesn't cover IP, which I'll tell you why it's a problem. Its small businesses, which are like 96% of the market, do not actually understand IP and, therefore.
Mark Ritson: Agree, part of the problem, I don't really understand that either. I mean, I might my stop responses to send them to people like you, which is no bad thing, but not the greatest thing. I'll do you know; I'll do a deal. Come into the brand course. And then afterward, let's debrief and talk about where and how we would add the appropriate content, because I'm not just saying I do genuinely think it's an area where, without us getting into too much deep legal water, it would be great to provide a suitable resource and you can do it for me, I'd be delighted to add it. So yeah, let's do it.
Shireen Smith: Okay, I'm looking forward to it. Well, thank you very much indeed, then. Well, clearly, Mark is quite a character. He doesn't mince his words and knows what he thinks. I really enjoyed interviewing him, and I'm looking forward to attending his mini-marketing MBA later this month.
Shireen Smith: Thank you for listening to this episode. Do stay in touch, sign up to the Brand Tuned newsletter, or take the Brand Tuned quiz. To find out if you're on track to be the go-to first choice brand for your ideal customers.