10/13/2010 11:34:00 AM
Analysis: The halo effect
The Motorola RAZR range and Sony Ericsson’s Cybershot and Walkman series are now considered old hat, with a new set of brands vying for top place in the market.
Over the last six months, ‘Desire’, ‘Xperia’ and ‘Galaxy’ have emerged as familiar names across the industry. These brands are now firmly established as ‘umbrella’ brands, which exist under the main manufacturer names.
And they are becoming more and more familiar to consumers due to significant marketing campaigns, multiple products within the umbrella and concerted efforts from manufacturers.
The push to establish a new set of brands and products has come at a time when operating systems are starting to have an increasing sway over consumer decisions.
Form factor and features are no longer enough to convince a customer of the worthiness of a handset. The user experience across many levels is now under intense scrutiny.
But as perceptions change, manufacturers are responding with new products and new images of their former selves.
The question is whether it’s worth all the effort. Brands come and go – would manufacturers be better sticking with their original brand or do these new names and concepts have the power to last?
Establishing the Desire
Families of handsets are nothing new, but the latest buzzword within manufacturing circles is the ‘halo effect’.
Manufacturers are looking to create positive perceptions of their new brands through one particular product, often a flagship handset.
Samsung and HTC are prime purveyors of this strategy. The HTC Desire has been the manufacturer’s flagship handset for the last few months. A huge amount of activity has been focused around the device – and it has been successfully sold through a wide range of retailers and channels.
The Taiwanese company has recently added two more handsets to the range – the HTC Desire HD and the HTC Desire Z. The new handsets have bolstered the HTC handset range and strengthened the Desire name.
HTC’s strategy to establish the original Desire as the central device in its portfolio is now expected to have a reflective ‘halo effect’ on the other handsets in the series.
CCS Insight analyst Ben Wood explains: ‘The manufacturers are typically creating halo products that reflect down on the rest of the range.’
Wood points to Samsung’s Galaxy range, which has also recently seen a new addition – the Galaxy Tab tablet.
‘The Galaxy S was the original halo product and that has now been moved up to the Galaxy Tab. The Galaxy brand will grow on to other Samsung devices and it will also be used at various price points,’ Wood adds.
And HTC and Samsung are not the only manufacturers creating new brands. Sony Ericsson’s Xperia range launched earlier this year with several handsets in the family.
Sony Ericsson marketing director David Hilton says: ‘We realised with the emergence of smartphones, Walkman and Cybershot were not the brands to get into the space where we believed we needed to be.’
The manufacturer already has a strong legacy of building up sub-brands and has used its association with Sony as leverage in the mobile sector.
However, there is some scepticism among analysts about the new brands associated with Sony Ericsson.
One source says the success of Walkman and Cybershot was down to the fact that they ‘were already existing brands built up for years outside of mobile’, adding that ‘the mobile industry has never held onto really iconic brands.’
Hilton disagrees, and says he remains confident of Xperia’s position,
adding: ‘Xperia is building up to be very strong. Sony Ericsson’s brand vision is to be the communication entertainment brand and we are leveraging our unique position.’
The key to creating a strong brand, Hilton believes, is in having consistency across the range of products in both hardware and software –and to push that into advertising. However, he would not go so far as to say that Xperia was a dedicated Android brand.
Wood agrees that consistency is the key to success when creating new brands, and he adds that new platforms may be one of the reasons for needing to launch a new image and set of products.
‘We are also starting to see the emergence of homogenous platforms, and if you are going to differentiate in a market you have to add something on top of what is being offered. It is about consistency – continuity in naming of branding, hardware and software,’ he says.
Meanwhile, Samsung aims to make buying a handset easier by using family brands that identify a key characteristic shared by a group of devices.
Samsung senior product manager Carey McGregor says: ‘We use family brands as a way of simplifying the buying process – names are much easier to remember than numbers. In doing this, we help our customers to better understand what it is they are buying, and provide retailers with a good reference point to use at point of sale.’
The manufacturer has the Galaxy family, which runs on Android, the Omnia range on Windows Mobile and the Wave range, which runs on Samsung’s own platform, Bada. The ‘halo effect’ is quite evident here, as McGregor explains: ‘Within each family there is a premium handset, a more basic handset, and then usually several variants in between.’
The emergence of brands linked with a new generation of devices is evidence of how manufacturers are fighting over new ground to differentiate themselves. Design, user experience and features are now equally important to the consumer, and manufacturers are using brands to bring those factors together.
The brands are used to create unique identities and promote new ideas. The challenge for manufacturers is whether they will be able to maintain a sense of premium and sustain momentum around a particular idea.
Previous brands such as Sony Ericsson Walkman may have been a huge hit, but all brands have a shelf life.
Manufacturers are developing a top-down approach, where the brand is passed on to lower-end products. But they must ensure that the price point of the brand does not get too low, and in turn lose its ‘halo’ value.
The brand expert’s view: Martin Rowlatt, strategy director at The Partners
Advertising and brand expert Martin Rowlatt shares his perceptions of the new brands in mobile
‘Within the mobile space there are now so many devices that manufacturers have to be quite aggressive with product development in a fairly crowded marketplace. Without a clear proposition for a device it becomes quite difficult for a consumer to navigate and find what they are looking for in products.
‘Consumers are looking for products that fulfil a lifestyle and image need and the benefit of an umbrella brand is that manufacturers can start to build an experience.
‘At that level, every Galaxy device will give a core set of experiences and there will be a number of key characteristics. There should be some kind of feel and a cohesive range.
‘Apple has got quite simple and descriptive systems. Their whole naming architecture is around clarity and simplicity. But it is not only about naming – it is about how products are positioned and communicated to the consumer.’