When choosing a cell phone, names matter to consumers, according to a recent study by Strategic Name Development (SND). In fact, market performance was higher for companies with cell phone names that consumers prefer.
“Names matter,” said William Lozito, president of Strategic Name Development, a brand naming consultancy. “They create a distinct sense of identity and personality. Additionally, they can offer a way for people to connect with the product on an emotional level.”
The study underscores the importance of a product name as part of an effective marketing initiative and the need to evolve naming strategies to stay relevant with changing consumer attitudes to avoid market share erosion.
“It’s no coincidence that LG and Samsung, which had identical U.S. market shares of 16% in Q3 2005, also had identical positions of 20% in 2008 after having introduced very similar product naming strategies,” said Lozito. “Conversely, during the same period, Nokia continued a less popular naming convention and its U.S. market share dropped from 16% to 9%.”
Strategic Name Development surveyed 515 U.S. consumers who own mobile phones, selected at random from Greenfield Online’s national panel. The survey and subsequent market analysis were conducted in late 2008 and balanced by age, income, gender and U.S. Census region. The findings are significant at 95% confidence.
The survey measured consumer perceptions on 15 product names and brand architecture factors for four of the major mobile phone manufacturers, Motorola, LG, Samsung and Nokia.
Mobile phone owners rated phone names based on factors such as, whether the product name was intuitive, relevant, modern, creative, engaging, original, cool and easy to remember. Strategic Name Development then compared the various product name rankings to the manufacturer’s reported market share as published by The NPD Group’s Mobile Phone Track during that same period of time.
The results show a relationship between consumers’ perceptions of cell phone names and the cell phone manufacturers’ market shares.
“The challenge is staying current with the target market’s naming preferences,” observes Lozito. “What worked in 2007 may be tiresome today.”
Between 2004 and 2006, Motorola introduced the RAZR, which it followed with the ROKR, the SLVR and the PEBL. Each name highlighted a key feature of the phone, was easy to understand, and used a consistent four-letter, vowel-omitted naming style. This naming style was initially well received by consumers. And during this time Motorola’s market share peaked at 35%.
However, by the time Motorola introduced the KRZR in late 2006, Lozito theorizes that both consumers and the company had grown tired of the 4LTR nomenclature and subsequently the company’s market share withered to 21% by the second quarter of 2008.
Nokia scored the lowest in the study on virtually every naming and brand architecture criterion. Its clinical-sounding alphanumeric names such as the 8800 Sirocco, E90 Communicator, 8600 Luna and 8800 Arte failed to connect with consumers. Not surprisingly, during the period studied, Nokia’s U.S. market share dropped from 16% to 9%.
LG and Samsung, South Korea’s crosstown Seoul mates, also offer interesting insights into the value of a strong product name.
“In the last few quarters, LG and Samsung have evolved from unremarkable to irresistible in their naming strategies,” notes Lozito. “LG’s Chocolate, Shine and Vu appeal to the senses, while Samsung’s BlackJack, Juke and Glyde brought fresh naming innovation to the category.”