the brandgym by David Taylor

Author:David Taylor
Language: eng
Format: epub
Publisher: RedDoor

136

WORKOUT SIX

RENOVATE YOUR CORE

tence, and has put its maps in position for the future”, observed The Times (11 ). Below we

look at some of the lessons from TomTom’s ongoing efforts to turn their brand around.

Break marketing inertia

Being slow to renovate is often blamed on ‘marketing myopia’, which is not seeing the change coming. We suggest a bigger issue is actually ‘marketing inertia’ : being stuck in the old ways of running your core, even though you know change is happening. Why does this happen? Senior management can be disrespectful of new entrants, failing to see the long-term threat they pose. In addition, the storm of change may take a while to show its full force, leaving the company’s sales ticking along nicely and potentially breeding complacency. You see this with TomTom. As recently as 2010 revenues were still rising, up 3% versus the year before. But then the storm hit as smartphone sales exploded.

Redefine your market

A crucial step in reinventing the core is to re-define the market, based on consumer benefits not products, as we saw earlier in the Workout ‘Search for True Insight’. In the case of TomTom this meant redefining the market as ‘personal navigation and mapping’ rather than ‘satnavs’. This helps identify threats and opportunities beyond the current products, such as smartphones. It also inspires and guides reinvention of the core. For TomTom this involves a ‘pivot’ from selling satnav devices to selling software and services, as CEO Goddijn comments ( 11 ): “It’s our ambition to enable customers to use world-class applications, whether on a smartphone, in a dashboard or on a website.” As part of the brand reinvention TomTom has signed high-profile partner-ships with Apple for iPhone mapping, and more recently with Uber. It also provides technology for U.K. insurance broker Motaquote’s Fair Pay Insurance product that rewards good driving with lower premiums. Revenue from these new services is finally starting to outpace the decline of the original satnav business ( Figure 6.10 ).

Invest in the core

New technology requires investing heavily in new competences and capital, whilst millions of dollars and years of blood, sweat and tears have been invested in the existing business. TomTom spent €268 million on R&D in 2015, up 9% versus 2014, with 3,500 people working in R&D, reflecting significant investment in advanced content and software for the automotive industry.

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