Would a telecom megabrand create intentional confusion for customers?
So Wednesday another new cell phone brand was launched to the Canadian market, and the public response? Deafening. (cue loud cricket noises) Well, Beg to Differ thinks you should care. Not about the service, but about the brand strategy logic behind it – and maybe even get a little bit angry. Because this is a case of brand managers using their awesome powers for evil. On purpose.
A bit of background
For those who may not be familiar with the Canadian Cell Phone market, the landscape has long been dominated by three hulking gorillas – Bell Mobility, Rogers Wireless, and Telus Mobility – and more recently, more than two dozen smaller “discount” monkeys – including the range of products below.
If you’re not, there are a few highly paid brand managers who will be sorely disappointed. That’s because many of the biggest “stand-alone” brands above are actually wholly owned and operated by the big three – Koodo by Telus, Solo by Bell, and Fido by Rogers – but are branded to hide or obscure the relationship with the parent company.
And now Rogers is doing it again with their new Chatr brand – which launched this week into mall kiosks in Canada’s biggest cities, with no availability in Rogers outlets or any explicit Rogers branding.
CBC notes that Chatr is supposed to become the “low end” of the Rogers line, with Fido as the middle, and Rogers own services as the Cadillac of the line. And according to Chatr’s senior vice-president Garrick Tiplady “The company isn’t afraid of cannibalizing existing Rogers business, since (Chatr) caters to different market segments, much like the Fido and Rogers brands have done for years.”
But isn’t choice good?
If you read the Differ, you’ll know that the answer is: No! Not always!
The first problem is VOLUME of choice: Humans can only handle so many choices before they go “tharn” (see Beg to Differ the Great Brain Freeze for more).
And third is when choice is designed to confuse.
That’s the most serious and the least ethical: Rogers is intentionally creating confusion in the marketplace and making life more difficult for consumers.
Does that sound like wild-eyed conspiracy? Nope just unpacking the “flanker brand” strategy they have said they’re using – where a large dominant brand “flanks” itself with smaller phantom brands to create the illusion of choice in a market where smaller players may be beating the big guy on price, service, or general non-evilness – or all three in this case.
This is a calculated move to undermine competition (and damn the consumers). And we’re not alone in saying so:
Globe and Mail The so-called “flanker” brand is supposed to complement Rogers’ existing brands, Fido and Rogers Wireless, by targeting a lower end of the market. But some analysts suspect that it is designed to muddy the crowding market with yet another brand, in an attempt to fight back against new competition.
CBC: Mobilicity chair John Bitove has said… “We welcome competition, but it’s the way they’re competing that we object to,” he told CBC News recently. “It’s right in the Competition Act.… You can’t create flanker brands to try and defeat the competition.”
MyCellMyTerms.com: While Rogers’ intention is offer more choice I believe that this adds to the confusion in the marketplace and consumers will be thoroughly confused with all these brands.
And what’s worse, rumour has it that both Telus and Bell are intending to do exactly the same thing in very short order. So like it or not, more artificial choice is coming your way.
So what do you think?
Is this added choice good for consumers? Is Rogers evil for using accepted brand strategy practice to muddy the water around its slower, more nimble competitors?