When someone asks you, “What kind of work are you in?” What do you say?
Most people have a standard answer lined up. “I work in finance,” or “I’m in marketing,” or for us, “branding.”
But that isn’t actually the business you are really in. What you do goes deeper than the industry you are in and to prove our point we will share with you cautionary branding lessons from failed businesses.
As a branding agency we are in the perception business. What people really want when they hire us or any other branding agency is to create a desired perception. They want to be known as the best, the most innovative, or the best value within their industry.
This may seem like semantics but it’s actually incredibly important to understand what business you are in. To highlight this point, consider the cautionary tales of Kodak and Blockbuster.
The story of Kodak is a long and fascinating tale, but the cliff notes you need to know are that Kodak was number 1 in camera and film sales for the majority of their history. They were the company for cameras.
However, with the rise of digital technology came the fall of Kodak. Digital cameras effectively made film cameras obsolete. Most people assume that the digital revolution caught Kodak by surprise but Kodak wasn’t actually surprised by the invention of the digital camera because they were the ones that invented it way back in 1975.
Despite inventing the technology that would change the industry forever Kodak’s core business faced no pressure from competing technologies until the late nineties and Kodak executives could not fathom a world without traditional film. However, consumers gradually switched to the digital offering from companies such as Sony and away from film. Executives hoped that Kodak might be able to slow the shift to digital through aggressive marketing but they could not. They were eventually overtaken in the digital space by competitors Canon, Sony and Nikon.
Kodak fell from grace because they misjudged what business they were in. They thought they were in the photography and film business but they were actually in the memory business. Not knowing what business they were in cost them everything.
Blockbuster owned the movie rental market. They had a store in every town in America. Now they are completely out of business. Blockbuster was late to react to the digital revolution and failed to adjust accordingly. Digital competitors, mainly Netflix started offering consumers a better option. First a mail service and then a streaming service. The problem wasn’t their business model (they had perfected the movie rental business model) but rather that they thought they were in the movie rental business. They weren’t. They were in the home entertainment business. When a more convenient option to access home entertainment came along customers jumped at the chance.
Knowing what business you are really in is critical when building a flexible, adaptive brand and is as crucial in small business branding as it is for Fortune 500 branding. You don’t want to create a brand around film, or movie rentals. You want to create a brand around memories or entertainment.
Take the time to understand what business you are really in so that YOU don’t end up as the next Blockbuster or Kodak.