Learning about Branding

by CSM. Created for Spring 2021 course on Branding at MIT Sloan

[carolinasantiagomorales]

Building a brand vs maintaining a brand when entering a new market

The Burberry case talks about the success of Burberry team to solidify its brand and how that was an important first step for them. Now, they face the challenge of how to maintain that brand when facing both intense competition and a changing customer landscape. They have a complex set of consumers, so finding their core targets and being aware of how to stay ahead of their change in attitudes, preferences, and needs will be vital in maintaining their brand advantage.

For our Branding lab, my team and I are focusing on a new market: hard seltzers. These companies are still in the “building your brand” phase, but it has been interesting how established brands (like Bud light, Spindrift, etc.) have used this new market as a way to evolve their brands. In the case of Bud light, they have entered the new seltzer market in order to keep up with their consumers: younger, want to go for a “classic” decision at the liquor store, drink their products at events with friends.

Spindrift, on the other hand, is also entering this new market with its existing brand, but it feels like more of a leap from their core product form my consumer perspective. It is expanding the brand from a single product offering (seltzer water) to a portfolio (alcoholic vs non-alcoholic seltzer). Therefore, I wonder how they are thinking about their core customer and if this move is in alignment with their traditional target or if they have changed the target customer definition.

Lastly, for our branding lab, one element that I wish to study further is how brands are most successful in a new market. Would Bud light have been better off buying a hard-seltzer brand or building it own? How disruptive is it to enter a new market for your existing brand? How to companies think about the trade-off of evolving your brand versus changing it?

[carolinasantiagomorales]

Riding the Innovation Adoption wave of ride-sharing apps

I distinctly remember the first time I heard of ride-sharing apps (mainly Uber/Lyft). It was 2013, and I was in college. I was telling one of my friends how hard it was to reserve a taxi to go to the airport, which was 1 hour away, and she told me about this new app, Uber, that had worked well for her. Within the bell curve of innovation adopters, she was in the early majority phase. I, on the other-hand, was skeptical of getting in a stranger’s car and paying them via an app (= not in the early majority), and this is a memory that I look back on to understand how much these ride-sharing apps have changed the game of transportation.

Using Roger’s 5 factors for innovation diffusion, I believe ride sharing apps leveraged a relative advantage, higher compatibility, and observability when compared to the status quo at the time: taxis. Ride-sharing apps shift more control over the ride experience over to the consumer, by having an app interface that allows you to input your location, know the ETA of arrival to your location, and know the fare before you get in the car. These aspects of higher visibility/ownership of the experience coupled with the ability to rate your service (and the ripple effects on higher focus on customer experience hat comes with that) accelerated the adoption of ride-sharing apps, and the displacement of taxi’s as the main form of transportation.

In addition, ride-sharing apps are also more aligned with the tech-savvy generations, which make up the bulk of riders today. By appealing to their values of great service (speedy, simple) at a “great” cost (of course, there are exceptions to this), ride-sharing apps were quickly adopted. In particular, I think Lyft did a great job in this regard. I remember when Lyft had the magenta mustaches on the front of their cars, and this brand imagery made it easier for me to recall my experience with drivers in their app. Overall, it was always a great service, and their drivers were usually chattier and nicer, which I associated with better company-employee relationship. Lastly, ride-sharing apps also leveraged great observability, since you could see the app (ads, other people’s phones, and even signs at the airport) and you could even share a ride with someone if you both had the app! It was through all of these factors that my early adopter friend recommended ride-sharing apps to me, which is part of the process of innovation diffusion.

[carolinasantiagomorales]

It is all about location for wine brands

The case of Concha y Toro shows the complexity of branding for products like wine, for which the location and the prize have a weight on the perceived quality. In the particular case of Chilean wine, the staff at Concha y Toro were perplexed that they received some of the highest marks in blind-test competitions, but still ranked lower in quality, which in turn affects the price that consumers were willing to pay. Even the creation of an umbrella brand with a portfolio of wine quality/prices was not successful in getting around the issue of perceived quality and the brand for Concha y Toro. Therefore, I believe that Concha y Toro would have to work with the Chilean government in order to get around the branding issues since it is particularly tied with the overall brand of the Chilean region.

While researching this idea of local region branding and perception of wine quality, I stumbled upon a company called “Locations”. This company is creating their own line of wines based on regions, with the value being only one wine offered per region. This one wine is made from blends and is meant to “pay homage to their homeland”. They mention that they are sourcing the best wine quality by region and have a standard branding of the bottle across regions. The founders mention that they came up with the idea because they grew frustrated with the AOC laws, which the case mentions are one of the most influential factors in consumer demand for wine. Top reviewers of wine, like the Wine Advocate, have given high ratings to wines from the Locations company, which shows that this idea might be gaining some momentum.

It will be interesting to see how this strategy of fully marrying the location to the wine brand will work for mass consumer markets. Even though this idea of creating one top wine might be great for this company, I still believe that for a local company like Concha y Toro, it would be best to have a selection, just like they have created with their umbrella brand strategy. With this strategy, they would still have to work on the branding around the Chilean region, which could require partnerships with he government and local tourism agencies.

[carolinasantiagomorales]

When “nudging” goes wrong

As online consumers, we are exposed to techniques that help simplify our decision-making on a daily basis – from the way information is displayed to make comparisons across products, to the ability to use reviews as a way to crowdsource our decisions. The success of these techniques is due to its focus on the customer journey and the experience of making decisions as a consumer, and it is a success that I believe brings great benefit to both consumers and companies. Yet, I believe there is sometimes a fine line between using these techniques to help consumers make their own decision versus leveraging these techniques to influence a suboptimal choice for the consumer. At a first glance, it might seem like a suboptimal choice for the consumer is still a net benefit for the company, but I believe the companies should be careful in this instance due to the potential effect on their brand.

I’d like to use an experience I had recently as an example of this fine line: At the beginning of the semester, I decided to subscribe to an online journal that publishes the latest research on healthcare innovations. As a consumer, I was looking for content to help me prepare for a final paper and had always admired the work I had read coming from this journal. For this reason, I was even excited to be a paying member! Signing up for the subscription was so simple that I barely recall clicking through that many buttons until I had unlimited access to all the articles. It wasn’t until, 2 months later, I decided I had gotten the value I was looking for and decided to terminate the subscription. I assumed it was going to be as easy as it was to sign up, so I left it to the last day to unsubscribe. To my surprise, there was no unsubscribe button! After doing the unimaginable and reading the fine print I had breezed through when subscribing, I found out that the policy for this journal was to call a number during specific hours of the week in order to talk to a representative who would then stop my subscription for me. This is exactly when the line has been crossed from thinking about the consumer journey to leveraging consumer behavior to try to benefit the company. Yet, now I also understand that this type of technique is terrible for this journal’s brand from my consumer perspective: this experience is misaligned with my original perception of the brand (trustworthy, high-quality) and therefore, makes me not want to be associated with that brand anymore. For this reason, I believe these techniques are only successful if the intent when designing/implementing them is truly about the customer journey.

[carolinasantiagomorales]

An analysis of the “Intel Inside” brand

             The “Intel Inside” marketing campaign not only changed the way consumers think about what is inside their computers, but also changed the growth trajectory of the portable computer industry as a whole. Initially, Intel launched the campaign because they were having difficulty selling new versions of their microchip products because users believed the older version could do everything they needed already. In order to prevent having to create separate, expensive marketing campaigns for each new product version, Intel’s leadership decided to create an umbrella bran that would include many generations of the product. The main 2 attributes of this umbrella brand were: (1) safety (reliability), and (2) leading technology. After the first launch of a product under the “Intel Inside” brand, Intel’s leadership learned that their clients internalized the brand message, and would switch to the newest generation of the product in order to stay ahead in their technological capabilities.

             I believe there are 3 main factors that led to the success of the “Intel Inside” campaign: (1) the intake of the co-op advertising program by their OEM partners, (2) the subsequent growth in the PC market via increased marketing from OEM partners and PC magazines, and (3) Intel’s sustained ability to invest in R&D in order to keep their brand promise of leading technology. These 3 factors led to a strengthening of their brand, which allowed them to carve out a significant portion of the PC market. As a competitor, I believe the strength of Intel’s brand poses a significant challenge and a small opportunity. In the short-term, Intel’s strong brand will make it hard for a new entrant into the PC market to capture much share. Yet, because of its strong brand in PC, Intel leaves an opportunity for new entrants to capture other segments of the market, since the “Intel Inside” brand is not as flexible in capturing other segments other than PC. In the long-term, new entrants will have an uphill battle in terms of R&D competition with Intel, whose brand has allowed them to amass a healthy R&D budget that takes time to build.