Innovation Branding Series Ep2: The Importance of Brand Anchoring

Today we continue a new series done in collaboration with Youri Sawerschel, Branding Expert and Founder of Creative Supply. Over the next few weeks Youri will talk to you about innovation from the branding perspective. In our second episode on Brand Innovation, Youri will go with you through the power of having an anchor that your customer can relate to.

Welcome back my name is Youri and today we’re going to speak about innovation but from a branding perspective. Many companies out there are trying to leverage an existing brand to enter the market or launch new products. What if I told you that Apple is launching a car. Would you buy it? Maybe. What if I told you that Ford is launching a smartphone? Would you buy it? Of course not! Ford is a car company yet both Ford and Apple could technically launch a car or smartphone.

Yet we as consumers, we instinctively reject certain products based on the brand under which they are though. Let me give you two or the famous brand failure examples, both come from the 90s. Harley-Davidson launched a perfume. Big failure. And Cosmopolitan launched yogurt. Again, it was a big failure.

The main reason for which these brands failed is because they did not consider the existing anchor. A brand anchor is the heart of the brand. It’s what your consumer associates you with. Harley Davidson is a motorcycle brand. Cosmopolitan is a women’s magazine. This means that your anchor dictates where you can or cannot grow. That’s why, for instance Toyota crated Lexus, because Toyota’s anchor is reliability not luxury. And Volvo is marketing its electric range of cars under the Paulista brand, because Volvos encourage safety not innovation.

Another really good example is Nestle, with its Nespresso system. Back in the 30s already, Nestle was active on the coffee market with the brand Mustafa, and in the 70s they patented their new capsule system. They knew that the system was so innovative that they could charge a real premium for it, so the obvious, expected thing would have been to launch the innovation at the Nescafe brand. After all, Nescafe was a recognized coffee brand so why not simply leverage that name. No, because the anchor of Nescafe is affordable daily coffee. Trying to sell the new capsule system under the Nescafe brand would have positioned it immediately as a good coffee but an affordable product, very far away from the desired premium price.  Since they couldn’t change the anchor on this café, nor wanted to, they had to create something new and Nespresso was born – luxury lifestyle brand selling coffee. And then they invented the Nespresso Club so they could call their customers “members”. And they opened luxury boutiques on the Champs Elisées, they launched a lifestyle magazine, and they even called a coffee Grand Crus in reference to great wines, and obviously George Cloony, the face of the brand.

This was revolutionary back then, because celebrity endorsement was normally reserved for luxury products like perfumes or watches. If you have an existing brand or in launching a new product or service, you need to ask yourself: What is the current anchor of my brand? How am I perceived? Does this anchor fit my innovation? Will it help the launch? Or should I just create a new anchor? In our next video I will speak about the power of communities to launch new products and services.

Youri Sawerschel, Founder of Creative Supply