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Why Technology Branding Is Different

More so than consumer or other business to business industries, technology companies struggle between the competition of short term product marketing versus long term brand building. While mature technology companies strike a balance as they clearly understand the strong competitive advantages derived from brand initiatives (4 of the world’s top 10 brands are technology brands, including Microsoft, IBM, Intel and Nokia), most other tech companies dilute or forego branding in favor of more tactical technology evolution, new product feature sets, increased flexibility or improved price-performance. This short term focus results in a product marketing emphasis, which renders the marketing spend and message obsolete as the technology continually advances.

More thoughtful technology leaders recognize that messages which strike competitive advantage based on feeds and speeds are short term gains and balance the need for product messaging with branding efforts which build long term and sustainable advantage.

Technology advantages, disadvantages and competitive positioning change and outpace virtually any other industry. As technology markets mature, competitors copy and imitate market leaders and product and service differentiation give way to commoditization in relative short order. Technology solutions reach a threshold of feature/functionality breadth and depth which then delivers diminishing marginal returns that are beyond the point where the technology solutions are good enough for most buyers. At this point, only companies which have acquired brand preference, over more temporary product preference, will insulate themselves from commoditization and set themselves apart for continued growth.

Due to the technology industry’s accelerated evolution, brands take on increased importance by providing a valuable counterbalance to what buyers’ perceive as constant change, clutter and confusion. When IT buyers find it ineffective or difficult to sort through the barrage of information and conflicting claims, they rely on brand recognition to compensate for the uncertainty, reduce perceived risk, cut through the indecision and make a purchase choice.

When compared to the more traditional retail or CPG (consumer packaged goods) industries, the pace of change and brand strategies can be quickly appreciated.

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 CRM ProductsCPG versus Technology Branding
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Retail Industries
Technology Industry
Technology Brand Implications
Market Life Mature markets that evolve very slowly. Successful brands may last for decades and in many cases centuries. Recognized brands in areas such as soap, toothpaste and crème cheese have not changed in over 100 years. Fast pace of change renders all technology product brands obsolete quickly. Customer buy criteria and expectations change rapidly and in conjunction with technology evolution.  

Important to brand the company, not the solutions, as only the company has a chance of surviving a longer duration.

Brand design should include neologisms and the use of abstract names which can be redefined or reinvented to extend brand life.
Product Life Long product life durations. Soap, toothpaste and crème cheese are essentially the same today as 100 years ago. Very short product life. Products often migrate through a chasm curve and are continuously replaced with new innovation. Technology maturity is an oxy-moron. Brand messages should be managed in connection with their migration through the chasm or other adoption curve. Brand managers plan extensions and migrations along technology successions.
Procurement Cycle Decisions made quickly by lone consumers based on few criteria. Purchases often characterized by impulse buying. Decisions made by groups (committees) over longer evaluation cycles based on many criteria. Negotiation period may then follow. Brand used to influence, prioritize or trump other decision making criteria as well as defend price premiums or discounting pressures.
Product Sophistication Simple products easily understood by consumers. Complex products, often intangible, which may require years of experience or outside experience to understand. Brands used as extensions to benefits statements and competitive advantages in order to excel beyond esoteric feature set competitions.
Product Distribution Vertical supply chain process with delivery from storefront direct to consumer at time of purchase. Consumer enjoys immediate gratification following purchase. Multiple vendor components technically assembled with delivery to consumer from publisher, partner, reseller or multiple third parties. Implementation and operation may trail purchase by weeks or months.

Adoption of pre-market branding as a precursor brand strategy step.

Increased brand focus on the user experience, risk avoidance, time to value and return on investment (ROI).
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READER COMMENTS

By Ingrid Fanlau.
I’ve been told that foregoing brand and public relations allows marketers to reallocate more funds to demand generation programs which produce a faster ROI. Seems reasonable. Any thoughts?

Reponse: Yes. Reallocating marketing spend away from brand initiatives and toward demand generation programs that produce faster and more trackable results can show an increased short term positive effect on revenue. For many business situations this can make a lot of sense. However, balance between short term and long term marketing investments almost always produces the highest long term ROI. Similar to military planners, thoughtful marketers determine the optimal mix of brand, PR and awareness programs which provide air cover to soften up the sales territory while at the same time investing in demand generation ground attacks which capture qualified sale opportunities. The twofold approach is generally equally effective whether conducting military theatre or battling for marketing success.

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By anonymous
Interesting comparison. Are you a current or former military person?

Response: Yes. I am a former Marine. I seldom use military analogies; however, this particular reference seemed apropos.

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