DVW Branding Blog

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I got to know Ryan Lochte my senior year in high school when we were on the USA Swimming National Junior Team together. Through four years of college and several years of professional swimming, we raced each other countless times. However when I think of Ryan now, I think of him as a goofball instead of a rival or competitor. This is largely due to his laid back demeanor, but also because he has successfully branded himself this way through interviews and his TV show. I remember his famous "JEAH" saying cracking up our relay as we got ready to swim in the finals if the world championships. There were also the times he slipped on his diamond covered grill before accepting a medal on the awards podium. At the time, I took this for him joking around and having fun. I now realize these actions set Lochte apart from other swimmers and established his globally-recognized brand. He has risen above the curse of most swimmers - only getting attention every four years during the Olympics - and built a brand that includes a TV show on E!, exercise videos, and even a fashion brand. Some people joke about his sophomoric quotes, but Lochte is laughing all the way to the bank.

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http://bucks.blogs.nytimes.com/2010/07/06/should-you-trust-mint-com/?_php=true&_type=blogs&_r=0

Trust is key to building brand sustainability, and nowhere is trust more important than financial security. While I trust Apple with the contents of my music library and Amazon with my shopping habits, voluntarily giving  all of my bank account information to an online business require a bigger leap of faith. With this in mind, the growth of mint.com is nothing short of amazing. 

The first step mint had to take to ensure user adoption was ensuring the highest level of security. Using the phrase "bank-level security" built consumer trust with the brand. Additionally small features, such as the locking animation when entering secure information, made users feel their data was safe. 

The second way mint gained consumer trust is through word of mouth. Word of mouth is hard to measure, but the Net Promoter Score (NPS) is a good proxy.  NPS segments customers into promoters, passives, and detractors who make up the hard to manage human element of brand co-creation. When mint launched they had a -5 NPS, but within 15 months was +28. By emphasizing security, mint was able to build customer trust which led to an NPS on par with Apple and Target.

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Android Branded House

Google's mobile operating system, Android, has dealt with many of the same issues expanding their brand as Intel did when faced with the rise of cell phone technology. Intel brilliantly marketed their microprocessors during the rise of the PC, building consumer consciousness for a product they didn't directly interact with and never actually saw. By offering advertising dollars in exchange for brand placement on OEM PCs, Intel was able to boost their brand to the 6th most valuable in the world. However, in the mid-2000s PC sales started to decline with the advent of smartphones and other mobile devices, and Intel struggled to extend their brand to this new hardware category.

The Android OS gained popularity in the late 2000s, by providing a free, open-source platform for cell phone manufacturers. They have used this popularity (and position under the Google brand) to gain 60% market share on smartphones in the US. Building on this dominance, Android recently announced that they would require manufacturers to display the Android logo on any device that used the OS. This is similar to the "Intel Inside" sticker, except Google isn't sharing advertising dollars to incentivize the OEMs for the brand placement.

    Android is now also facing an expanding hardware landscape and struggling with how to brand itself. Initially conceived as branded house (releases were given names like Gingerbread and Jelly Bean), Android is now experimenting with sub-brands for new markets. The first of these that failed to gain traction was Android@home, which was intended for devices in the internet of things space that ran on Android. They are now entering the wearable device market with Android Wear. As the video shows, the marketing is focused more on lifestyle than product specs or features. Intel employed a similar strategy with their Pentium ads with great success, but was unable to transfer that success to mobile. It remains to be seen if Android will be able to duplicate their mobile phone popularity with other devices.

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Subtlety in Branding

Developing a pattern or color to represent your brand is a tricky balancing act. At one end of the spectrum you have Christian Louboutin's signature red-soled high heels (apparently known to some as "Sammy red-bottoms"). They even have their own patented color, Pantone 18.1663TP. But by limiting the color to the sole of shoe, the branding is understated and only recognized by fashion-conscious consumers. Companies have only been able to patent specific colors since 1996, with other successful examples including Tiffany's robin's egg blue and Corning's pink fiberglass. This subtle form of branding inherently limits the brand becoming oversaturated. 

At the other end of the spectrum is Burberry's check pattern. Though the pattern started as inside lining to their recognizable coats, it has become ubiquitous and over used (unless you're into plaid Nike Dunks). Burberry, with the help of Rose Marie Bravo, has slowly reigned in the use of the check pattern. Along with stricter licensing agreements, this has helped Burberry reestablish itself as a premier luxury brand.

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The Brand manifold compares time and perception. Brands evolve and take on new meaning as time passes. Consequently, their past, present, and future are inextricably linked. Brand perceptions are also constantly being shaped both by internal and external participants. The Brand manifold links these two concepts together, defining the multidimensionality of a brand.

The brand manifold concept explains why brands have become so much more than just their representative product. We see in Popper's three-world's hypothesis that the physical product is only one-third of the sum of a brand. Naomi Klein explores this idea and embodies the branding backlash in her book No Logo. In this movement, customers reject the World 2 and World 3 brand representations, that is they disassociate themselves from the individual and community created idea of a brand. 

A more recent example of this brand backlash came during the Occupy Wall Street movement. Angry that big banks were bailed out after losing huge amounts of their money, many customers protested outside the offices of Wall Street banks. They weren't protesting the actual product the banks offered, but instead formed a community (world 3) around individual feelings of resentment (world 2) towards the brands the banks represented.

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Similar to last week, I set out to do some firsthand research into what makes Singapore Airlines so successful. Unfortunately, my student budget couldn't quite cover the $14,416.49 for a Boston - Singapore flight in a first class suite. Instead I had to rely on second-hand documentation of the experience and what justifies a flight that costs as much as a new car.

The video shows the two key characteristics that set SIA apart from other airlines. The first class "suite" looks more like the small luxury hotels you can rent at some airports than a mere seat. A sliding door isolates you from other travelers and provides an extremely luxurious environment for a flight. This type of cabin configuration highlights SIA's commitment to maintaining a new, state-of-the-art fleet of airplanes. The extravagance is consistent throughout the pre and post-boarding process as well, with the travel experience extending to a complementary stay in the SIA-owned Raffles Hotel.

The second unique characteristic separating SIA from its competitors is service. Though it's difficult to observe in this video, small touches like the tipping of the champagne glass and trap while pouring (and the fact that he is pouring Dom Perignon) demonstrate the care that SIA attendants put into their service. 

This first class experience shows how SIA is able to be profitable while its competitors are not. Customers are willing to pay a premium (did I mention the flight costs as much as a car) for luxurious accommodations and excellent service. The airline industry suffers from extremely low margins, largely due to price competition on economy class seats. SIA's focus on customer service and higher margin first class seats are their key profit drivers.

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Johnnie Walker is an excellent example of successful sub-branding under a corporate umbrella brand in the alcohol market. With prices ranging from $30 for the Red Label to $200 for the Blue Label, Johnnie Walker cover the whisky spectrum from premium to super premium. With their cheapest bottle starting at $30, they don't serve the value or low end of the whiskey market. This strategy provides evidence that the first strategy mentioned in the Concha y Toro case can be successful. 

The branding of premium alcohol products is especially important given that many consumers don't have palettes trained to distinguish a $30 bottle of liquor from a $200 bottle. Johnnie Walker solved this problem by establishing a color coded labeling system to help drinkers determine the quality of what they are drinking. As shown in the North Dakota Wine research, the label on the bottle has a strong effect on the perceived taste and quality. The colors are reinforced by the increasing adornment on the more expensive bottles (note the string and intricate lettering on the Blue Label). Even if consumers can't taste the difference between red and blue, ordering and drinking the Blue Label is a symbol of whiskey knowledge and status (and having lots of money).

The key challenge for Concha y Toro in implementing this strategy is their existing value perception. They entered many global markets in the low-price segment and have only developed the high-end under different brands. To successfully move out of the value segment and create sub-brands at the premium level, Concha y Toro must reinvent their current brand image through increased advertising and marketing.

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Compatibility and Innovation

Of the five factors discussed by Rogers, compatibility most closely aligns with the modern approach to brand building discussed in class. Traditional brands would seek an opportunity or underserved market and design a product or service to fit it. Modern brand managers begin with customer research, striving to find an unfulfilled need that can be met with a product or service that is compatible with their existing behavior.

A great example of modern branding and compatibility is Swiffer. Through extensive consumer research, Continuum noticed that people spent as much time rinsing their mops as they did actually cleaning. The Swiffer was developed to be compatible with existing cleaning behavior, but with substantial improvement to the process. The rate of adoption (11.1 million kits sold in the first year) certainly qualifies as a success based on Rogers' criteria.

The four products in the case study suffer from varying levels on ignorance to the end user and compatibility. At one extreme is Digiscents. They appear to have done no research into user behavior prior to launching their product, and aren't filling any consumer need. This lack of customer insight clearly contributed to making the product the 3rd worst fail in tech history.

On the other end of the compatibility spectrum was satellite radio. Radio listening had been on the decline, but people were in their cars more than ever. Satellite radio was developed to fit a specific customer need - quality music tailored to their tastes with little or no advertising. Sirius satellite radio's 25 million subscribers are proof of successful diffusion.

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Corona bottles as salt and pepper shakers common at restaurants

Corona's branding strategy in the US has propelled it past Heineken because of its focus on a complete marketing solution rather than simple advertisements. Their initial marketing push focused on in-store and restaurant promotionals. This built a strong association in consumers mind between mexican food and Corona, so much so that one couldn't exist without the other. 

Corona print and TV ads have extended this association to beaches. The consistent pairing of drinking Corona and relaxing on a beach has made the two go hand-in-hand for many consumers, myself included. A day at the beach wouldn't be complete without a cooler of Corona.

Compared to Corona, Heineken has no associations to speak of. Besides the lack of Dutch restaurants outside the Netherlands, Heineken ads have lacked focus and failed to attach the beer to any place or activity in consumers' minds.

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Black & Decker Struggles to Attract Tradesmen

Black & Decker, one of the top 10 most recognized brands in America was unable to translate their strong brand to the professional tradesmen market segment. Specifically, they were being outsold 8-to-1 by Nakita, a Japanese company that focused on the tradesmen category. This failure by B&D can largely be attributed to consumer perceptions. B&D's strong presence in the consumer power tools category and move into home tools caused many tradespeople to consider the brand below standard for professional projects. By focusing solely in the professionals, Nakita was viewed as higher quality.

The negative professional consumer perception does not explain why B&D had such a strong presence in the professional-industrial segment. Although not inherently obvious, the key differences between the industrial and tradesmen sub-segments are the distribution and purchasers. For industrial purchases, large construction companies buy directly from construction supply distributors, namely W.W. Grainger. Grainger could recommend specific brands for the company to buy, and both the distributor and purchaser were more likely to make decisions based on performance and quality. These criteria stood in contrast to tradespeople, who tended to decide based on brand awareness and perception.

Given three options to address their weaknesses in the tradesmen category, B&D should rebrand their tradesmen product line under the DeWalt name. Consumers in this segment have shown a preference to this brand over B&D in both quality (based on "One of the best" agreement percentage) and purchase interest. Identifying the product as "distributed and serviced by Black & Decker" keeps the brand recognition intact, which will please internal stakeholders, while improving the product perception in the eyes of tradesmen consumers. Since this market segment is the fastest growing, B&D can not afford to simply ignore it, but must instead align the perception of the product with its superior quality.