It has been a tough week in the branding world. First, Netflix announced a major (and somewhat counterintuitive) rebranding, only to be followed by The Ladders formalizing their intention to open up to job seekers with salaries under $100,000. Each brand is taking a bold, high-risk path that seems to break every Marketing 101 rule.
NETFLIX
While still reeling from a poorly handled price change, Netflix announced that it is splitting its core DVD-by-mail service from its streaming option, creating two totally separate user experiences. To customers who value Netflix for its ability to provide easy access to the movies they want, searching two different sites seems counterintuitive. Of course, this may be a setup to sell off one of the business units, but with Netflix stock losing half its value in the last two months and another 7.4 percent after the latest announcement, this strategy seems questionable.
On top of this, Netflix is making an unusual branding move by applying the Netflix name to the emerging streaming service while rebranding the core DVD service Qwikster. Customers who have learned to love discovering that iconic, red, Netflix envelope in their mailbox will now have that experience under the Qwikster brand. Whether Netflix brand equity will carry over to the new brand remains to be seen. I also have to question the name Qwikster for a product whose primary benefit is selection, not speed.
Fortune Magazine offers their perspective on why Netflix’s recent announcements were sound, but I still believe that they have once again ignored the voice of their customer and are doomed to be the New Coke of tomorrow’s marketing textbooks.
THE LADDERS
If Monster has been the 800-lb. gorilla of the employment website category, The Ladders’s clear value proposition has made it the smart, exclusive, niche player. This week, The Ladders formally announced that it will now feature professional jobs at any salary level, effectively abandoning the value proposition that has helped define the brand for the past eight years. While Netflix seems to have misstepped by dividing its brands, this is a case where a well-defined sub-brand may have been a better solution, allowing The Ladders to capture incremental market share while maintaining the equity of the core brand.
Regardless of the drivers behind these brand decisions, the social media chatter regarding both of these issues has been fierce. I suspect that the social media response alone may pressure both Netflix and The Ladders to reconsider (or at least reframe) their decisions. It will be interesting to see if they back-pedal or hold their ground – and how their respective businesses will be impacted long term.
-Pamela J. Alvord, EVP Managing Director of Strategy & Operations
