A new book by David Aaker, “Brand Relevance: Making Competitors Irrelevant”, argues that success in the marketplace is no longer about winning the brand preference battle but rather the brand relevance war.
According to the author (Vice-Chairman of Prophet Brand Strategy and Professor Emeritus of Marketing Strategy at the Haas School of Business, UC Berkeley):
In brand relevance competition the goal is to develop offerings so innovative that competitors are simply not relevant. In contrast, brand preference competition, where the goal is to be superior to other brands in an established category, is a context in which there is ongoing pressure on margins and profits.
In other words, if you want to achieve substantial success, you need to change the playing field and the rules. Otherwise you risk being blindsided when some out-of-left-field competitor does precisely that to you. A particularly current example which tends to reinforce Professor Aaker’s thesis: Nokia.
Recently-appointed Nokia CEO Stephen Elop penned a brutal internal memo which underlined just how irrelevant the brand is in danger of becoming:
“The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”
Elop goes on to suggest that his company is “standing on a burning platform” and must “change [its] behaviour.”
Some further quotes from that now infamous memo:
“…there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”
“They changed the game, and today, Apple owns the high-end range.”
“Google has become a gravitational force, drawing much of the industry’s innovation to its core.”
“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”
“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally. Nokia, our platform is burning.”
If your R&D people aren’t working on products that will render your existing brands irrelevant, it’s time to worry: somewhere out there (probably in a garage), some unexpected competitor is hard at work shifting a few paradigms.