Thursday, February 10, 2011

Going everywhere or nowhere?

Announcement today of the launch of "Everything Everywhere" branded stores - the joint name of the company which owns Orange and T-mobile. Isn't brand architecture a nightmare?

The rationale behind the new brand (until now it has existed as company name, more than as consumer offer) - rather than either maintaining two completely "separate" consumer brands or consolidating into just one is, presumably, that the company is trying to have its cake and eat it. By aligning the brands they hope to, over time, streamline the marketing spend, but by keeping both product brands alive they hope to continue to occupy two places in the consumer's consideration, not just one. There's a real risk that, under one brand, their market share simply couldn't be sustained. We can dismiss the company's claimed rationale, as explained by CEO Tom Alexander last year:
"What I wanted was a company name that did not distract or confuse from two very strong brands"
This doesn't ring true. T-mobile has nowhere near as much real equity as Orange, and anyway, now they'll have to invest in, build and sustain three brands. But who's to say, this strategy might work: there are certainly no hard and fast rules in brand architecture. Still, it remains to be seen how easily the "Everything Everywhere" brand can establish a distinct meaning. As Alexander himself has observed:
"We are going through this revolutionary step in the marketplace where people are getting iPhones, getting Google devices and we have Microsoft's Phone 7 coming into the market soon. It's not just about voice and text. It's about everything else you can do on a mobile phone. People are even talking about apps down the pub"
Quite. I find restaurants using an Urbanspoon app, with Google maps, on an Apple phone, via O2 networks. Do I really have the mental bandwidth for another brand in the mix? It will be interesting to see what they do after the 6 month trial...

Update 09:31 February 15

On Friday Nokia and Microsoft finally announced their anticipated collaboration. Makes a lot of sense. As the key competency set for mobile moves decisively from hardware to software, European manufacturers look suddenly exposed. Nokia's handset market share remains at 30%+, but Apple, with just 4% of the market is making 50% of the profit. Nokia is working hard for little return. It's a good fit: Microsoft is hardly the cutting edge of Silicon Valley, but Windows 7 is their best received platform for many years and anyway, both Apple and Google have begun to take on some of the same negative perceptions of corporate monoliths. So it adds real strength to Nokia's offer. And for Microsoft it pretty much guarantees them some market share which, until now, they've been unable to capture. Crucially, there wasn't an alternative solution for Nokia that made this much sense. The smartphone war is about to get exciting: Apple-iPhone vs RIM-Blackberry vs Samsung/Google-Android vs Nokia/Microsoft-Windows. Place your bets!

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