MIT Branding

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This video is part of 5-Hour Energy's set of promotional material that was meant to combat the brand's trust issues. Instead of convincing its consumers that the product is safe, this ad makes matters worse. The colors are drab rather than uplifting, the woman speaking is not part of the target customer segment, and she is not an expert. 

The problems with 5-Hour's promotion strategy extend beyond one poorly executed response commercial. The whole strategy has been off because it fails to inspire the target demographic (which is comprised of a disparate group of students, professionals and athletes). The usual 5-Hour energy commercial asks you about "that 2:30 feeling". It usually features a young, semi-professional individual who works in a dull, boring office who is just desperately trying to get through the day:

When our team interviewed people who these commercials should have been targeting, they consistently used words like "pity", "sad", and "overworked" when describing 5-Hour energy consumers. Clearly 5-Hour is not reaching its target consumers and its uninspiring and trust-eroding advertising is a big part of the problem.

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Let’s face it, “energy drinks” is not the first category that comes to mind when talking about trusted consumer products. 5 Hour energy is a brand in the energy drink (now shot) category that has struggled to defend itself and has come under attack. The above spoof starts out okay...and then shows 5 Hour as a product that will ruin your life.

More attacks:

So what has 5-Hour Energy done in response? Several things, some more effective than others:

1) Released an advertisement showing a woman next to a stack of reports touting 5-Hour's medical safety record. This ad did not help. Nothing screams "don't trust me" like begging people to trust you.

2) CEO released a video to discuss reported deaths by 5-Hour Energy users. It got just over 2,000 views on YouTube. The spoof of his video got over 23,000 views.

3) Tried to educate customers by creating a "Myths about 5-Hour Energy" section of their website: http://www.5hourenergy.com/myths.asp. The responses, which are mostly "this is false" and "this is incorrect" are not trust-inspiring.

Then in 2014, 5-Hour Energy did something very smart.

It targeted what underlies trust - an emotion - and sought to build a different brand identity with its "5-hour Energy Helps Amazing People" campaign.

....Stay tuned for more posts about that campaign.

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Intel Inside

Let's pretend it's 2002. Should Intel do a brand extension with Intel Inside into consumer electronics such as mobile devices and tablets?

The first question is, what does Intel Inside mean? The company built the brand to convey to consumers that their processors mean reliability and leading technology. Seeing Intel Inside was supposed to make buyers trust the product with an Intel in it more than a product without an Intel. But, do consumers care about that? I had not even noticed the Intel Inside logo on my Lenovo yoga, even though it is located right next to the arrow keys:

On the other hand, some reliability is key for consumers who are buying products with poor tech support, like phones and tablets. I would need more information on this to determine how the Intel Inside logo would change consumers' behavior in the target extension category.

How to determine if a brand extension will work:

Assuming customers do care what processor is in their devices, Intel would have to determine if a brand extension makes sense. According to brandextension.org, companies need to consider the following for a successful brand extension (I have paraphrased a bit):

1. Brands should not extend unless they are well known. Check. Intel was and is a highly recognized brand.

2. Brand extensions must be a logical fit with consumers' expectations. Check. Intel is a tech brand extending into another tech category.

3. Brand extensions must have leverage in the new category; Customers should be able to see the value the brand brings in the new category. This is where we are unclear on Intel - would consumers notice and care? According to @jnakul they would (see the portion of his post that deals with Motorola phones).

4. Brand extension should not confuse consumers. In other words, the brand's character or story shouldn't be lost. Check!

5. Brands should not be stretched in too many diverse categories. Check. At that point the Intel Inside logo was mainly being used in desktops and laptops.  The case points out that there was risk of equity dilution, but I would argue that the brand was strong enough to extend to several more categories.

6. Brand extensions need to create positive synergy for the parent brand. Check. Intel positioned itself to be "the center of your digital world", which meant that if someone bought a laptop with an Intel they might be more inclined to buy a phone with Intel in it as well.

7. Every brand extension should open a new category. Check. Intel had 1% share of the cell phone chipset market.

(http://www.brandextension.org/principles.html)

Based on this list, Intel would be quite successful with a brand extension into consumer electronics such as mobile phones and tablets.

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Burberry & Canada Goose: Drawing Parallels

In the early days of its existence, Burberry built its brand on quality. It also established itself as a very British product - the brand and country of origin were intertwined. Burberry further expanded its brand through early celebrity endorsements.

Canada Goose is a brand that is using similar tactics to build and expand. CG is known for very high quality down and extreme weather protection. Its core group of customers are Canadians who are routinely exposed to extreme conditions, either for work or hobbies.

Since Canadians are the main brand ambassadors, the CEO has made comments that the product being made in Canada is critical to the brand. This poses problems in terms of mass market scalability, which means that CG is going to have to somehow convey "Canada" without a made in Canada label. Just like Burberry strives to remain very British, CG will strive to retain its Canadian essence.

Canada Goose's strategy has also included celebrity endorsements (on celebrities in extreme weather roles), similar to Burberry. CG does not advertise through traditional channels such as print or multimedia in order to maintain the brand's exclusivity and uses celebrities instead.

At this point, the ubiquity of the red patch on jacket sleeves is building the brand's mystique. In the Burberry case, Bravo made the comment that everyone shops everywhere. Canada Goose definitely took note of this in their pricing. People routinely pay close over $900 for a jacket, citing superior quality as the reason for their purchase. Lay people are willing to pay serious premiums for the CG brand.

Now the trick for Canada Goose is to expand without making the same mistakes that Burberry made. Near the end of 2013 CG was acquired by PE firm Bain Capital. It will be critical that the new owners not license the CG patch. CG has lately expanded into accessories, which is something Burberry also did. However, the risk of counterfeit is high. The company should also continue its stringent distribution rules and only distribute through select retailers.

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Hasbro's House of Brands

For my summer internship, I will be joining Hasbro in a brand management position. I really would have benefited from these readings during my interview process, so I thought I would apply the theories from the two articles we read (The Brand Relationship Spectrum and Viewing Brands in Multiple Dimensions) to Hasbro now.

Hasbro is a house of brands, not a branded house. This is a slide taken from Hasbro's May 2013 Barclay's investor presentation:

The company divides its brands into growth potential, but I tend to think of their brands in terms of markets. There are boys toys, girls toys, small children's toys, licensed products and board games. This categorization shows the clear benefits of being a house of brands. Someone playing Monopoly may or may not also be interested in My Little Ponies. While franchise brands like Transformers and My Little Ponies are not connected, there is some degree of cohesion to the brands. For example, all of Hasbro's brands are family friendly even if they target different segments. The company would never partner with an adult brand like Call of Duty for example.

Historically, Hasbro suffered from high SKU counts and an ever burgeoning line of brand extensions. In 2000, the company created their new brand strategy of focusing on franchise (core) brands and creating an immersive experience around those brands

The new brand strategy can be examined through the brand manifold lens. Hasbro very clearly understands the long-term value of its brands and the associations both internal and external stakeholders have with them. For example, generations of customers play with Transformers. In the early 2000s when the first new Transformers movie was released, huge emphasis was places on the robots' complexity and their ability to quickly and seamlessly transform into everyday machinery. Past brand meanings were translated into a new line of more sophisticated looking robots (applying temporal factors). We now see older generations introducing their children to the reinvented versions of the brands they grew up loving. Take My Little Ponies as well - Hasbro leveraged old aspects of the brand (ponies) and added new elements (longer legs, new messaging around girl empowerment) to manage the brand's evolution.

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Anyone who has flown Singapore Airlines will tell you that their exceptional service is what sets them apart from other airlines. I have personal stories about, and very happy associations with, this company. When I was a child, our family moved to India and took the opportunity to travel throughout Southeast Asia for vacations. On one of our trips we decided to take SIA and were amazed by their attention to detail.

 My brother was a baby and when we boarded the plane, one of the Singapore Girls offered to hold him while my mother got settled – a very warm gesture. Then they placed him in a nice basinet. In our minds we contrasted this with our experience on KLM where they actually put my baby brother into a cardboard box because they did not have baby equipment on board. When my father admired the complimentary travel bags SIA gave us, the air hostess asked us to take another. When we got off the plane we gushed about how great our flight had been and how much we appreciated their service. The Singapore Girl smiled and said, “That is why we are Singapore Airlines.”

 All of these positive experiences distilled into one magical moment in my eleven-year-old mind when my dad bought me a miniature version of the Singapore Girl outfit. I probably wore the thing around the house for two weeks straight before my mom forced me into something else. Clearly I had formed an emotional connection with the Singapore Girl because in my mind, she was the amazing one – not the company or the airline.  She was the interesting, caring person who I wanted to visit again on our next vacation.

 The Singapore Girl is what SIA has been very clever about in its marketing and branding. They recognized the mystique and “exotic” associations that their customers had with Southeast Asia and leveraged those perceptions into a brand. What’s even better is that by making their employees the brand, they facilitated the opportunity for customers to form an emotional connection and relationship with the company. This is a rather crude analogy, but it is like kids seeing Disney characters on screen and then meeting them at Disney Land.

SIA was also astute in continuously reinventing the Singapore Girl in its advertising as customers’ mindsets changed. In this commercial, we cannot tell this Singapore Girl’s country of origin (note that the commercial has over 1 million views).

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Concha y Toro

The typical American wine consumer is price sensitive, not brand loyal and starting to become educated about wine. In recent years, these American consumers are turning towards quality wines. Concha y Toro should take a bottom-up approach and promote its premium brands (Casillero del Diablo, Trio and Marques), which represent the highest-growth wine segments.

There are several reasons why Concha y Toro should focus on the U.S. market with premium brands. Americans are not saturated with wine advertising - only 10% of alcohol media advertising expenditures go toward wine advertising. Second, the top five wine importing countries are the UK, US, Germany, Japan and Belgium. Concha y Toro would be competing against Old World producers in the UK, Germany and Belgium; they would also be dealing with a highly wine-educated customer base that already has associations of Chile and cheap wine. Lastly, Concha y Toro is not a big enough brand in the US that is built exclusively on low prices. This will not be a Toyota / Lexus situation in that Concha will not have to keep its premium brands at arms length from its lower-priced brands.

The biggest advantage that New World wines have over Old World wines is that they are not restricted to costly manufacturing processes, meaning they can actually offer high quality wine in premium and basic price ranges. This combination would be particularly appealing to budding American wine enthusiasts who are willing to experiment with new brands.

How Americans Consume Wine

Americans consume alcohol mostly in social settings. They make decisions on wine based on a given price range they are willing to stick to and convenience. Yellowtail gained a foothold in the US market by changing packaging to increase convenience and larger-scale consumption (concepts consistent with American's notion of how big brand beer should be consumed). Yellowtail released box wines and larger bottle sizes.

Regions as Brands

Wine branding revolves around regions. The region is the brand because consumers have associations with certain regions producing better quality wine. There are also cultural associations that get tied to wine brands - French wines are sophisticated, Australian wines are unpretentious, etc. Yellowtail bolstered its US branding by associating itself with Australia's fun and warm reputation:

http://www.nytimes.com/2011/08/29/business/media/a-wine-brand-creates-a-new-theme-to-help-spur-growth.html?pagewanted=all&_r=0

Concha y Toro's branding appears to be trying to build a sense of Chilean culture that people can associate with its wine by telling the myth of the Devil in the Cellar:

These ads do not convey the premium nature of the wine, but instead are trying to build a sense of mystique into Chilean wine. Since my recommendation is to focus on premium price points, I think Concha y Toro should spend advertising money on emphasizing product quality rather than building cultural associations. The latter are difficult to instill, slow to stick, and need to be bolstered with cultural education through other channels such as television programming, food, etc.

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Four Products, Four Likely Failures

In Marketing Management we learned that new products are more likely to be unsuccessful if they require major behavior changes to use them. Here I apply Roger's Five Factors as well to try to understand four products' success or failure.

Peanut Butter Slices: No Go

I do not think this product will take off (in fact it did not). While it is not complex, is easy to trial and the benefits are easy to observe, this product's main problem is one of relative advantage. It is already fairly convenient to spread peanut butter on bread or dunk a stick of celery into the jar. I would want to understand exactly how people consume peanut butter. Is it mostly moms who use it in their children's lunches? Is there a large segment that snacks on peanut butter?

Silver Band-Aids: Little Adoption

This product is also not complex and is particularly strong from a compatibility perspective. Consumers already know how to use Band-Aids and also know that using bandages can support healing. However, this product has characteristics of preventative products that Rogers mentions, in that the results are difficult to quantify and take time to realize. There is also a relative advantage problem here because silver-lined bandages are 5 times more expensive than regular bandages. To improve adoption, this product should be created for hospital and doctor use. Another alternative would be to have doctors hand out free samples of these bandages to patients with deeper wounds.

XM Radio: Slow Adoption

I analyzed this product's proliferation using the Bass Diffusion Model in another class and learned that while satellite radio has huge advantages over existing alternatives, adoption has been very slow. Adoption was actually exponentially lower and slower than analysts' predictions. There are hardware investments to be made and still some issues with performance on cloudy days or in tunnels. Most importantly, a free alternative and internet radio (which is not limited to car use) exist. I think with persistence and quality improvements satellite radio may still take off.

iSmell: Depends

This product seems like a fantastically bad idea on the surface because it has many compatibility issues. We are not used to smelling technology. We also dislike being marketed to and this product seems like a blatant marketing ploy. I do not think there are relative advantages to sitting at a computer and smelling what I am seeing IF I buy a contraption to sit on my desk. However, scent is a very powerful marketing tool. This weekend I was at the Fontainebleu in Miami. The hotel lobby has a very distinct smell (much stronger than other hotel chains) and I mentioned that I would also associate that smell with Miami and the great time I had at FB. Clearly there is a commercial market for scents (i.e. food industry), but consumer application with iSmell seems unlikely due to how it scores on all of Roger's five factors. This is a product that should be produced commercially, or built into tech hardware in such a way that the consumer does not overtly see it.

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Why Do Some Products Become So Popular?

We had an interesting assignment over the weekend where we had to try to predict the success of four products. As I was reading Roger's Five Factors (which explain why adoption and diffusion occur) and trying to predict how these products would perform, I thought about other things I have read about how to create movements (please see Devinabluedress's post with the dancing guy video: http://devinabluedress.tumblr.com/) and what makes an idea stick. I was reminded of Malcolm Gladwell's Tipping Point. According to Gladwell, certain people in social spheres have to endorse an idea or product before it can be successful. Basically a select group of individuals - experts (Mavens), people who know lots of other people (Connectors), and unusually charismatic (Salesmen) - are at the epicenter of tipping. In marketing lingo these people could be brand ambassadors.

I am sure we will learn about how to target brand ambassadors but in many cases I think there is a real element of luck. Take PBR for example. There was no marketing push, no brilliant plan - the brand happened to became popular with hipsters who drove the beer brand's popularity.

This:

http://lovegoodbeer.com/2012/11/why-do-hipsters-love-pabst-blue-ribbon/

Lead to this:

http://qz.com/184372/how-pabst-blue-ribbon-became-a-billion-dollar-beer/

Getting back to our assignment, yes we can apply the Bass Diffusion Model, Roger's Five Factors, and other analytic frameworks to try to predict how a product will perform. But there is also the possibility that a strange niche product just happens to get picked up by the right consumers. Marketers may have failed to recognize them yet they proliferate a brand completely on their own. Granted, as marketers we cannot rely on luck and must seek out such ambassador groups, but we must at least acknowledge luck's influence on why some products become popular.

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Imported beer advertising

Corona and Heineken – both imported beers, but with very different brand identities.

Corona beers have a personality associated with the product itself. I was very interested to learn that Corona was not originally intended to be consumed with a lime. College students in the ‘80s started the trend of topping off Coronas with limes and then sticking them in the bottles. In fact, Corona discouraged Mexican consumers from doing that in the beginning because the bottles were originally returnable. Look how far the lime has come now.

Heineken on the other hand, focuses on the experience of drinking Heineken and who you become when you drink it. They are aiming for a more worldly image as opposed to Corona’s “beaches and fun in the sun” theme.

Heineken’s “The Entrance” TV commercial definitely took a page out of XX’s most interesting man in the world ads, don't you think?

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In 1995, Black & Decker (B&D) faced the challenge of gaining market share in the Professional-Tradesman market segment, of which it held only 9% market share. For these Tradesmen customers, the distinction between work tools and home tools is very important. Makita was outselling B&D because Tradesmen perceive it to be a stronger brand for work. We should also note that our case mentions nothing about Makita’s consumer product line. Either Makita did not have such a line at the time, or its brand was built mainly for workplace tools. Therefore Makita had established itself as a heavy-duty, work oriented brand that only skilled professionals used.

Considering why B&D had a higher market share in Industrial versus Tradesmen in the Professional category sheds more light on why it was unsuccessful in penetrating the Tradesmen category. First, Industrial buyers buy the same tools for the entire workforce. On-site tool comparison and discussion amongst Industrial workers - as happens amongst Tradesmen - would be pointless. Differences in brand labeling and colors are less likely to drive corporate buyer's decisions, since they are not the individuals to carry the product to work each day. An Industrial worker's merit is not judged by the tool he or she carries as much as a Tradesmen's.

Brand building by word of mouth amongst the users would be unnecessary since the user is not the one buying the product. Instead, B&D sold its products to a handful of corporate buyers. Convincing these few of the brand’s trustworthiness and professional quality would be much easier. Second, corporate buyers place a high premium on quality as well as customer service, which is an area of strength for B&D. These attributes are great for Industrial buyers but less relevant for individual Tradesmen.

The fact that B&D was successful as a consumer brand was clearly hurting it in the Tradesmen category. At the time, my recommendation to B&D would be to sub-brand, using another name and different coloring to distinguish its work product line from its home product line, which is the key pain-point for Tradesmen.