Branding - Evan Ferber

[evfe2021]

The Burberry check

Had Burberry continued on the brand path it was on in 1997, I am not confident the brand would still exist today.  Even the early brand shift described in some of the marketing campaigns of the case in 1998 do not seem like they were something that would have set the brand up for long term success.  The issue I perceive with the state of Burberry in 1998 is that it has an “old money,” somewhat exclusive vibe that leaves me with a bad taste in my mouth.  My main example of this came when the reading the quote from Pat Doherty that says their ad and choice of model was successful because “She was so clearly aristocratic, so obviously of the right pedigree. She looked like her parents would have worn Burberry.”  I don’t think a marketing campaign whose goal was to aspire the above would be particularly successful in today’s marketplace in which it alienates a huge portion of the marketplace.  

The plans seem to have shifted slightly over the years indicated by things as simple as bringing in younger models and brand advocates, having management from broader backgrounds (e.g. bringing in a US CEO for a English founded company).  The position that Burberry ends the case in of trying to protect its niche position right in between “Polo Ralph Lauren and Giorgio Armani in apparel, and between Coach and Gucci in accessories” does not seem like a position that it could protect today in a market where most brands try to span more broadly to compete in multiple tiers.  Overall it has clearly succeeded in staying a relevant brand, maintaining elements of its historical beginnings while making crucial changes to continue to grow with its consumers.

[evfe2021]

What “Flying Safe” might mean in a post COVID19 world

SIA made a name for itself by differentiating its brand as the peak of customer service.  From creating and maintaining incredibly thorough interviewing and training of its flight attendants to its creation of the TCS, SIA ensured that customer service was at the heart of its company values, both internally and externally.   When a crisis like 9/11 changed the way potential passengers viewed the airline industry, SIA had to question if it should change its strategy.  Had I been on the management team at the time, I hope my colleagues would have agreed with me that the right strategy would be to continue abiding by our brand’s goals and keep customer satisfaction as a priority.  In their situation at the time, that likely meant moving forwards with their lie-flat seat upgrades as planned.  

Fast forward ~19 years and imagine we were sitting in SIA’s boardroom today as they discuss how to deal with COVID19’s impact on the airline industry.  I imagine many of the same discussion topics and themes that were relevant in the case would be relevant now.  

·       How can we ensure our passengers feel safe?

·       How can we keep providing the same level of service given the new challenges we’re facing?

·       What are our customers going to expect us to do differently? What are they hoping we’ll do the same?

Flying in a post COVID19 world may bring new meaning to people have social media posts along the lines of “That feeling when you have the row to yourself on your flight home…”. Airlines will need to think about how they can balance their own profit needs in terms of the number of passengers on a flight with the likely demand of their customers that they are given ample space between them and strangers on their flights so as to feel safe. Flight attendants will likely need to learn to recognize when a customer actually wants to interact with them versus when (in this new reality) they may prefer to have as little contact as possible while on a flight.  Flying “safely” will likely take on a whole new meaning for airlines in the next few months, no longer only referring to getting from point A to point B without too much turbulence.  It will be interesting to see which brands win the battle to convince their passengers that they are the best offer in a post COVID19 world.

[evfe2021]

Nudged Off a Ledge

The article on nudging is an interesting overview of the history of nudging and the well-meaning intent of many individuals and organization who employ its use.  From increasing the likelihood of organ donor volunteers to educating and encouraging employees to save for retirement, there are many positive ways in which nudging can be used.  What the article does not address are the ways in which nudging can be abused or used in ways that are not meant to benefit the end consumer at all.

There are several examples in the everyday life of a consumer where nudging or some of its “cousin” heuristic effects can be seen at work to serve goals that are less than well-meaning.  One example is the use of the default effect to fill up your email inbox with countless promotional emails from every website from which you have ever purchased something.  By automatically checking the box which says “sign me up to receive promotional emails”, consumers are nudged to believe that is it normal to be added to the promotional email list and default effect is used to ensure that they are more likely to end up on that list (because they are less likely to “uncheck” the box).  There is an argument to be made that the added spam offers the consumers opportunities for exclusive promotions, but it also increases the likelihood they’ll go mad from overfilled inboxes.

A second, everyday example of nudging at work is the tip suggestion in the back of a Boston taxi. While many people may be taking Ubers and Lyfts in modern society, if you happen to take a yellow cab home from the airport on your next trip you may notice that tip suggestions which used to read “15%, 18% or 20%” now often reads “20%, 25% or 30%”.  A consumer can of course select to put more effort into paying for their cab and enter a custom tip amount, but many simply choose from the defaulted options displayed in front of them.  The end result is undoubtedly an increase in tips paid by consumers which does not lead to an enormous economic change for them, but it certainly adds up for the taxi driver at the end of a shift.  While many will say taxi drivers are not paid enough and deserve the extra tips (I tend to be in that camp depending on the day), others will argue that they are manipulating their passengers and they would not be incorrect.

The examples above are relatively simple examples of how nudging can be used to manipulate consumers into behavior that a business considers beneficial to the business, but not necessarily to its consumers.  While the “A Practitioner’s Guide to Nudging” describes several of the ways nudging can and is used to benefit society, there are also an unlimited numbers of ways that nudging (and other similar concepts of behavioral psychology) can be – and probably are being – used by organizations to manipulate consumers.  The silver lining is that educating more consumers to the existence of nudging can help to dampen its effect on them.

[evfe2021]

Fun, Sun & Beach!

Heineken was vulnerable as the existing entrant in the market.  Having been the long-standing imported beer available in the US, Heineken had an established brand – one that likely coincided with beer drinkers looking for something “more upscale”.  This left Heineken vulnerable to a new entrant – like Corona – to brand itself around some of the flaws in Heineken’s own image.  Additionally, Heineken was vulnerable simply due to the relationship between the Dutch and US economies as evidenced by the decline it saw as exchange rates shifted.

Corona preyed perfectly on some of Heineken’s brand weaknesses. By emphasizing “fun, sun and beach” it differentiated itself from Heineken while simultaneously taking advantage of the premium price point that Heineken had established.  Corona boasted its beer’s “drinkability” and appealed to many of the same demographics as Heineken (those simply looking for imported beer) while capturing new consumer segments as well. Heineken’s defense of “just being the best” could have potentially alienated some of the consumers that Corona was winning by coming off as pretentious.

The initial strategy that Corona took and the eventual dilemma they found themselves in – whether or not to abandon the “fun, sun and beach” branding guidelines – is not unlike the current challenges in the adult beverage market today.  In the last one to two years, spiked seltzers have seen a huge surge in market share with everyone from the initial entrants (Truly & White Claw) to small start-ups to beverage giants like ABI.  I can imagine the marketing meeting when the Bud Light team likely debated for hours as to whether “Bud Light Seltzer” would completely undermine everything that the Bud Light brand had been built up to become.  Ultimately, they launched BL Seltzer but we won’t know the longer term impacts on the overarching Bud Light brand until the market has settled.

[evfe2021]

B&D Case for 15.846 Branding

Reflecting on Black & Decker’s situation in 1991, it seems to me that some of its greatest strengths in the consumer segment are what cause it so many issues in the professional tradesmen segment.  B&D has the luxury of a 98% brand awareness among Tradespeople which I would venture a guess stems from their strong performance and awareness within the consumer segment.  In this case though, that 98% is not necessarily helping B&D within the tradesmen segment.  The case mentions that Galli knows well that a strategy of changing the name or color of its tradesmen tools would not be accepted internally, but it still does not change the fact that this is a huge issue for B&D within the tradesmen segment.   The B&D brand is overly affiliated with consumer products due to its own strengths which is aided by the marketing decisions of competitors (whether knowingly or unknowingly) solidifying that perception.  B&D has 50% of market share in consumer, so they are naturally going to be thought of in that segment even by professionals but it is doubled down by the fact that they sell black drills to consumer and "charcoal grey" to professionals.  Meanwhile everyone else is selling black or grey to consumer segments (giving off the impression that B&D's professional grade tool is more similar to a consumer one) and selling a wider range of colors (red, teal, green, etc.) to the professionals.  So when a tradesmen walks down the aisle of home depot, they are likely going to look right past the "charcoal grey" B&D tools and gravitate towards the more colorful tools which they perceive as being made and marketed for them. For this reason, among others, I understand why Makita is outselling B&D 8 to 1 in this segment with the same amount of shelf space.  The potential tradesmen buyers are not considering the B&D products due to perceiving the products as not made for them. This problem could have the potential to have similar implications in the “Industrial” segment except for one major difference: the buyers in the Industrial segments are not individuals who are going to use the tools, but rather corporate buyers, procurement teams, etc. who are simply looking to get the best products at the right price.  B&D likely benefits from its strong brand name with these corporate buyers because they at least know they are buying from a reliable company when making large purchase decisions.  They also likely have the purchasing power to have tried multiple brands and chosen B&D based on actual performance rather than purely choosing one brand based on in-store perception (As many tradesmen are likely want to do).  If I were advising Galli, I would recommend Option 3.  I believe that, from their success in the Industrial segment, B&D has a product portfolio that could succeed in the professional segment, but it is simply missing out on sales due to being left out of the consideration set.  If it were to re-brand under a different name (which it built up equity for) and market the tools similar to others in that segment (e.g. the bright yellow that Galli is considering) then I believe they would have a much better chance at growing share in this segment.  They would have that better chance while still allowing them to maintain the same success the B&D brand has in the other two segments (while something like Option 1 could potentially harm B&D’s success in other segments if it is perceived to be overpriced, etc. in the professional segment).