Branding, psychology and why we don’t get Apple

In 1984, Apple launched its Think Different ad. Since then this ad is very much viewed and favorited. However, there seems to be a universal misunderstanding of its message.

Let’s start with Branding 101 before trying to understand the message of Apple. Branding and marketing are two different concepts. Branding has one and one objective only. It aims to establish and cultivate an emotional bond in your heart associated with some specific product or service or process. Marketing rationalizes and appeals to our logic whereas branding caters to our hearts and emotions. Marketing emphasizes quality, features and advantages whereas branding tries to establish an emotional bond, playing on our passions and aspirations or human irrationale, inciting us to act in a desired manner (buy a product/service).

Branding is simple enough to perceive intellectually, but difficult enough for many companies/people, not least because they don’t get the underlying psychology, to implement. Apple, as well as companies like Nike and Disney, is very good at putting into practice this psychology-based business practice. There is no magic here. It is a business practice of branding with expected results coming to fruition.

Coming back to Apple’s message in that ad. Many perceive the Apple message to be, “everyone wants to be a rebel.” In my view this is a wrong perception. Rebel is an outlier, an outcast of a society. He/she is challenging every status-quo and convention, Our societies are made of 98% of the completely opposite stock, i.e. those who care about making living and leading their lives in as predictable and affordable way as possible. About the only time they pay attention to rebels is when a rebel becomes famous, for good or bad reasons.

Costs of being a rebel usually far outweigh advantages. Why then some become rebels and even succeed? Either a combination of character/aspirations/perseverance or purely statistical (for every successful rebel there is many that get thrashed by their societies, friends, etc.).

Successes of those successful ones, rebel or not, appeal to us. We all want to indulge in glories and successes of successful rebels, but we don’t want to shoulder the accompanying costs and challenges.

Apple, because of its “corporate rebel” status has until last few years been an underdog of the corporate world. Its branding has been its forte and that is why its brand value has been so high and still increases. Increasing number of Apple products, not least the notorious iPod, have competitors with in many cases some and in few cases many advantages over their Apple equivalents. We don’t know about those products, some of them with names Sony, Creative, etc., because of Apple’s unsurpassed branding strategy.

Apple’s ad was perfectly in line with its own mentality and branding. What it did was to create a personna of its own brand, associating it with some notorious rebels in science, etc., and by doing so elevating even further our emotional excitement. In this ad, Apple counted itself in ranks with Einstein, Martin Luther King, etc. Apple tried to lure customers to its products as Einstein would have lured students to attend his lectures or read his books.

Apple’s DNA has always been about exclusivity, coolness, simplicity (for customers) and, of course, being a rebel.

Being a rebel is always about bringing forth, advocating and fighting for change, which flies flatly in the face of a society, convention, tradition, or status-quo. We humans, however, are neither comfortable nor happy with change, let alone a dramatic one.

mozart inspired einstein

At 5, Einstein began violin lessons but soon found drills trying, once throwing a chair at his teacher. At 13, he discovered Mozart‘s sonatas.

Einstein thought that Mozart’s music “was so pure that it seemed to have been ever-present in the universe, waiting to be discovered by the master.” According to him, laws of nature (relativity theory) were waiting to be plucked out of the cosmos by someone with a sympathetic ear.

Passionate/accomplished violinist, Einstein often performed at musical evenings.

Mozart helped laying groundwork for Romanticism. Similarly, Einstein’s relativity completed the era of classical physics and paved the way for atomic physics.

Detroit’s 6 Mistakes and How Not to Make Them

First Wall Street and now it seems GM and Chrysler came begging at the governments doors for additional $20+ billion dollars. What do they offer in exchange for this money? They want to give buyouts and early retirements packagesin their effort of cost cutting and layoffs. This means essentially that the two companies aim at reviving themselves the old, traditional way adding perhaps an edge of efficiency, leanness and flair of cautiousness in these new realities or do they offer a radical shift, a ideological quantum leap enabling reconstruction of an automotive industry that befits well the expectations, technological progress and strategic vision inherent in the 21st century?

GM and Chrysler so far seem to have chosen what is best characterised by Albert Einstein’s saying, “You can never solve a problem on the level on which it was created.”

Below is an illuminating piece on what (six) mistakes were made by Detroit industries during the 20th century from Umair Haque, one of visionary thinkers on this aspect. These errors, while allegedly bringing automobile industry to their knees in the 21st century, were largely paralleled, ideologically, by other mainstream industries of the 20th century.

1. Old rule: Choose evil. Industrial era business is unrepentantly and almost sociopathically evil: shifting costs onto others, while striving to internalize benefits. Detroit chose lobbying, marketing wars, and low-cost hardball – to always and everywhere try to socialize costs and privatize benefits. Never was this truer than Detroit’s lobbying against public transport throughout the 20^th century. Why does public transport in the States suck? Because Detroit’s lobbying machine doesn’t.

New rule? Choose good. In the 21^st century, every moral imperative is also a strategic imperative:doing good – for customers, employees, suppliers, or society – is a radical strategic choice that unlocks new pathways to innovation and growth. The opportunity cost of defending evil for Detroit was never learning how to choose good – and that’s a crucial mistake other auto players didn’t make. Tata chose to make a car that was accessible to the world’s poor. Porsche and BMW chose to invest in talent, people, and imagination. Honda and Toyota chose to invest in renewables and partnerships with the public sector. All opened new avenues to growth for an industry at the brink of extinction.

2. Old rule: Selfishness is self-interest.What’s strategic is supposed to be what’s in the firm’s self-interest. But how do we define self-interest? Consider for a second the fact that as recently as this year, Detroit’s lobbyists were hard at work, opposing stricter fuel efficiency standards. That’s 20^thcentury self-interest at its finest – not authentic interest for one’s own long-run outcomes, but simply a childlike selfishness, both myopic and narrow, where cutting off the nose to spite the face is as rational as mutual nuclear annihilation.

New rule? Purpose is self-interest. The 21^stcentury demands a more enlightened self-interest: one factoring in a longer timescale, fuller contingencies, and an honest and broad consideration of hidden and unintended consequences to people, society and the environment. When we understand all that, have begun to develop a purpose – a way in which we will change the world radically for the better. By confusing selfishness with self-interest, Detroit vaporized it’s own purpose – and will stay trapped in a wilderness of economic meaninglessess until it rediscovers it.

3. Old rule: Maximize destructiveness. The goal of orthodox strategy is to destroy the ability of others’ to imitate or commoditize you. And Detroit was a master of the art of destructive strategy: patenting, trademarking, and litigating; playing hardball to control distribution channels, defending brands with disproportionately steep marketing investment, and building entire new marques to gain share in key markets and segments. The point of all these tired, stale 20^th century strategic moves was the same: strategy as an exercise in exclusion, isolation, and barrier-building.

New rule? Get constructive. True 21^st century businesses can be judged in the blink of an eye: how intensely do they put the “co” in constructive? Can they let demand spark and fuel co-creation, can they co-produce from a pool of shared resources, are they capable of letting value activities be co-managed, are they tuned to cooperate? Detroit can’t get constructive because it’s spent the better part of a century playing the games of destructive strategy.

4. Old rule: Seek differentiation. When is a Jaguar really just a Ford? When it’s an S-Type. Under Alfred Sloan, GM famously organized itself divisionally – Pontiac, Buick, Cadillac… – for the sole purpose of differentiation. But industrial era differentiation is too often just skin-deep: the same lemons with slightly different marketing, distribution, and branding. So why pay a steep premium for a Buick if it’s just a Chevy with slightly nicer trim? Detroit discovered the hard way that in the 21^st century, the concept of differentiation is increasingly stale.

New rule? Seek difference. Ultimately, the problem is simple: differentiation is about perception. Difference is about reality. People in the 21^stcentury aren’t the zombified, braindead consumers of the 20^th century. And so the 21^st century demands not mere differentiation – a bean counters’ eye view of the world if ever there was one – but true difference. True difference is built by making different choices from the ground up – different in the very essence of the value activities that make the wheels of production and consumption spin. Porsche and BMW strove for difference – not mere differentiation – and it is that choice that is at the heart of their global leadership of the automotive sector.

5. Old rule: Seek agility. Strategy is in many ways simply the avoidance of crisis – the evasion of threat, weakness, and vulnerability. The goal of strategy as the avoidance of crisis is simple: agility. Industrial-era corporations seek agility, in other words, by insulating themselves from real-world economic pressures – that’s what Detroit did bar none, by always seeking to game the system: lobbying, marketing, and wheeling-and-dealing it’s way straight into oblivion.

New rule? Seek crisis. By insulating themselves from real-world economic pressures, boardrooms also dilute and sap incentives for innovation and renewal. Detroit wasn’t innovating because the opportunity cost of strategy as gamesmanship was, ultimately, foregoing innovation itself. In the 21^stcentury, gamesmanship – and its attendant dilution of incentives – is a sure path to near terminal strategy decay. Forget Detroit – just ask big music, big pharma, or big food.

6. Old rule: Advantage happens against. Orthodox econ holds that it is through the pursuit of competitive advantage that corporations create the most value most quickly and reliably. And that’s a mistake Detroit made to the hilt. It sought a nakedly competitive advantage – against suppliers, dealers, consumers, and society alike. The result is an industry crippled by structurally antagonistic relationships with labour, buyers, suppliers, consumers, and society alike.

New rule? Advantage happens for. Competitive advantage against bears a striking resemblance to simply bullying. Bullying is easy: just as in the sandbox, any boardroom with market power can jack up margins by forcing others – buyers, suppliers, consumers, society – to bear costs. But if every corporation across the economy is playing that game, the economy’s just a game of musical chairs.