Author: Alex Qian, Global VP, QiKU Internet
We have been witnessing the death of well known brands like Nokia, but hardly any new brand have emerged. It is becoming extremely difficult to build a new brand, as a matter of fact, in the consumer and consumer durable category, market is quite saturated with all kinds of brands. In essence there are three kinds of brands namely:
1. Functional brand: Those who compete either on Price leadership like Nano, or functional innovation like Gillette. Those companies are established and enjoying the economy of scales.
2. Image brand: These brands spend millions of dollars on brand advertising. Samsung, HTC, Sony are some such examples, you need to have a deep pocket and be ready for break even within 3 years.
3. Experience brand: The ones whose brand provide intractable experience of the products. It testified a formula: Magic of product equals the multiplication of its functions and Experience (M=F*E)
Here is an example of phone brands:
Functional Brands are competing heavily on price-volume with a significant advantage on supply chain and distribution system, largely they are much active on the open market which accounts for 70% of the share.
Image Brands spend heavily on Brand exposure, they have plan of break, even for 3-5 years. OPPO might have a accumulative loss of Rs.100 Cr, but they are still expanding. Apple has consistently branded themselves as excellent camera quality as you may have witnessed from the airport, VIVO has the same Ads at the Mumbai airport
While Experiential Brands have interestingly leveraged on eCommerce, Xiaomi has employed more than 3000 call center staff to message the user experience over phone and internet , Xiaomi has its own logistic supply chain and its own eCommerce platform in China, hence it is able to offer unforgivable user experience in order to drive the word of mouth.
One Plus succeeds with the Experience brand positioning, with the invitation system they gave a privileged buying experience, Cyanogenmod system in their phones (and now OxygenOS) offer the user a customizable and personalized using experience and the tag for geek has largely improved the emotional attachment for the users as the ownership of the phone.
The recent rising star QiKU also falls into the same category, which completely offers a user centric experience. Users can uninstall all the pre-embed apps if any, and only desired apps run in the background so as to increase available RAM in order for the battery sustainability and performance improvisation. QiKU phone has gain a popularity in China with 6.4 million registration on first day launch, Phonearena called it revolutionary and monstrous.
An advice for the entrepreneurs will be to first analyze if they still have a chance on creating a functional brand or an image brand, if not then there would be a chance on creating an experience brand by having a user first approach. The new entrants have to make sure to have a precise positioning with a clear strategic focus on a single product, build it to greatness, capture the word of mouth and captivate the content generation. And remember that the success formula for the new eCommerce age is Magic=Functions*Experience.
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