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It’s all in the (brand) name: Why several tech. giants are struggling to sell their IoT platforms?

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A beef lasagna from Colgate, a lip balm from Frito-Lay, a mobile phone from Twitter, a perfume from Bic, a yoghurt under a brand Cosmopolitan and a social network platform from Google. What do all these products have in common? The answer is simple: All of them turned into a huge disappointment and thus vanished within a few years (some within few months) of their launch. Even though these products were backed by well-known brands and with no doubt about their quality or ability to perform the intended task, one major element these brands overlooked was the “brand association”.

People associate a brand with a product, and this is what sits deep in their minds. When you hear Colgate, you think of toothpaste and not frozen food. Similarly, the word Cosmopolitan is associated with the magazine and not with yoghurt or ice cream etc. The science behind the brand association is what a Canadian psychologist, Donald O. Hebb postulated, in his book “The Organization of Behavior” in 1949 (source: BMB). According to him, one thought would be more likely to cause another idea if those two thoughts were recalled together multiple times in the past.

Thus, if you imagine sneakers when you hear “NIKE”, this is due to a neurological phenomenon in your brain. A pattern formation which your mind has mastered in the past. A sudden change in this pattern will break this chain of associations, and your brain gets a “type-mismatch” sort of a message. If Google is a search engine, and Facebook is a social network site, then Google as a social network site will be a “type-mismatch” in our heads.

Failure related to the brand association is not just what we witness in the B2C world. Big multinationals and tech giants in B2B that are aiming to expand their portfolio and explore new market segment often suffer the same fate. This is at least the case when it comes to the Internet of Things platform market. Individual major tech companies and conglomerates with a strong, established a brand name and even stronger domain knowledge are striving for years to place their IIoT platforms on the top positions. Though these platforms demonstrate sophisticated technical capabilities and are agnostic in nature, still the market is finding it difficult to digest the fact that a company producing high-end electronic, electric or engineering products all these years, claims to be a cloud and data science expert all of a sudden. A type mismatch which is now surfacing in various market research and analyst reports. The Gartner Magic Quadrant for IoT Platforms 2019 did not list even a single solution coming from a traditional engineering (non- IT) companies under “visionaries-leader”.

Gartner Magic Quadrant for IoT Platforms 2019 (source: Gartner.com)

There is no doubt that these companies have good products, but when it comes to their acceptance, the market cannot avoid the subconscious brand association mismatch. Re-wiring your customer’s brain is not what you can do. So what else can be done?

Spin-it-off: You can associate the brand Expedia with travelling, but what if I told you that it could have been named as Microsoft Travel Division. Microsoft spun Expedia off in 1996 since the idea, and the offering did not match with the expected range of Microsoft products, or better said – what customer associated Microsoft with. This turned out to be a smart decision, in my opinion, and an excellent example for companies wanting to do something radically different.

Is spin-off not an option? Then it would be worth to consider creating a separate brand, giving it a new name and independent management, think of P&G or Unilever. Their products have established their brand. How often you notice P&G logo during a Gillette razor or Ariel detergent or Vicks syrup advert? Similarly, you will hardly notice or remember Unilever logo when you see a Magnum Ice cream, Surf detergent or Knorr soups advert. Give the product or service a new webpage, a different domain, go for innovative-out of the box marketing campaigns.

The mentioned measures will certainly demand drastic business model changes and could be painful in the beginning. What else in your opinion could help B2B organization to sell “out of line” products or services?

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