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[iyoushee]

Pivoting your Brand

Ah, Burberry. The brand holds my family in thrall across three generations – my grandmother, my mother, and me.

Having studied the brand across two courses (Competitive Strategy and Branding), Burberry’s strategic approach to breathe life into their brand again never fails to impress me. Another brand that comes to mind that did something similar is Victoria Secret’s delineation of PINK and Victoria’s Secret. The two brands now carry a very different tone and cater to very specific sections of their customer base, allowing the company to increase their original consumer base size.

It is also interesting to note that Burberry has managed to avoid the trap that Michael Kors has run into. Trying to aim for a very similar bracket as Burberry, Michael Kors has focused on the ‘affordable luxury’. However with their recent styles that focus more on glitter and glamor instead of the understated elegance that Burberry has gone for and in the absence of marketing campaigns that can permeate the consumer psyche and make the ‘glam’ desirable, Michael Kors faces an uphill battle.

[iyoushee]

Nudged off the Couch

In the reading for Branding today, we consider how to bring Nudging into existence. To do so, consider the following framework provided:

1. Nudges seek to boost self-control or activate a desire behaviour. 2. Nudges can be externally imposed or self-imposed. 3. Nudges call for the user to be either mindful or mindless about the decision at hand. 4. Nudges encourage or discourage a particular behaviour.

One of the best examples of this framework that I’ve seen is the Apple Watch’s rings program.

Photo by Ryan Stone on Unsplash

To get users to activate a desired behaviour - which in this case would be to exercise - the watch provides hourly standing reminders as well as push notifications to remind the user what their exercise level at a certain point in the day is.

Additionally, the watch allows user to self impose these nudges by enrolling in competitions, which increase the frequency of (and variance in) push notifications receive.

These push notifications as well as the watch display, which effortlessly shows how far along ‘closing the ring’ you are, allow users to be both mindful and mindless about the decision to be more active. Since the rings are easy to parse and constantly on your wrist (watch face), users subconsciously register that they may need to exercise more to close their ring.

Lastly, by enrolling in the aforementioned competitions with other watch bearers, users receive daily updates about their activity levels as well as other competitors’ activity levels. Two week competitions are often key to ingraining that habit to run daily that you’ve been trying to instill for years now.

[iyoushee]

Nudged out of Competition

The reading this week focuses on how human rationale can be impacted by different phenomena, one of the most prominent ones being paradox of choice.

Faced with the multiple options, humans (and the human brain) often rely on pattern recognition, or the easier and the quicker choice to make that doesn’t rely on a lot of work. This translates into very interesting product choices that can be made. For instance, with google’s page results now being the norm on how we search and top most results being given the ‘best’ preference; recommendation algorithms now have a critical role to play and can be gamed by platforms to nudge visitors towards the platform preferred result.

Similarly, this trend of cutting down on research time to find ‘the best result’ has resulted in multiple trends. One of the trends is the influencer trend, wherein people rely on a trusted entity’s endorsement to make their own choices. Similarly, there are now websites (see wirecutter.com) that recommend only one product within each product category so that users don’t have to spend time researching and wading through multiple google pages to compare product specs.

Rife with pros and cons, consumer behavior is an extremely interesting field to analyze.

[iyoushee]

Finding the Right Tools for the Job

The year is 1991 and I am yet to born. Halfway across the world, however, Black & Decker and Galli are poised on the precipice of a decision that will change their fates – the eighty-year old corporation and its CEO are currently embroiled in an intense battle with Makita Electric of Japan and Milwaukee Electric of Brookfield for a share of the Tradesmen segment of the Power Tools market.

The Power Tools market has historically comprised of three segments, differentiated in their usage: Tradesmen (mostly residential construction workers), Consumer (home use), and Industrial (corporate use, such as in a manufacturing company). While Black & Decker own the largest share of both the Consumer and Industrial segments, their late entry into the relatively new segment aimed at Tradesmen have left them behind the two competitors at a modest 9%. This is particularly painful for Black & Decker since blind experiments in the field assess the Black & Decker products to be Leadership grade for all but 4 products, and at least competitive for 3 of the remaining. Additionally, 98% of the tradesmen are aware of the brand and admit that Black & Decker’s customer service and product ownership are at par with the brand that they are currently using. However, majority of the survey takers also state that Black & Decker does not make high quality or durable tools that they currently count on Makita and Milwaukee to make.

Image Source: unsplash

Perhaps the most worrisome is the difference in pride that the tradesmen felt in owning a Makita or Milwaukee tool as opposed to a Black & Decker tool, the difference being 35% between Makita and Black & Decker and a whopping 50% between Milwaukee and Black & Decker. Indeed, to add further insult to injury, a tradesman indicated that Black & Decker tools are something that his wife would use at home, “while [he was] out here trying to make a living” and another indicated that “on the job, people notice what you’re working with… if [he] came out here with one of those Black & Decker gray things, [he would] be laughed at”. While the patriarchal tone in the first comment is hard to ignore, the message to keep in mind is that the kind of tools that tradesmen carry is largely influenced by the image of the tool in the community that they work in.

The CEO of Black & Decker, Galli, now debates between three options. The first option would be to give up on gaining volume within the professional tradesmen segment, and instead focus on profit margin per sale. The second option would be to use sub-branding, and rely on sub-products. In this case, Black & Decker would use their brand “Piranha”. The last option was to completely drop the Black & Decker name and adopt an approach similar to Toyota’s launch of the Audi brand. An option here would be to use the DeWalt brand name, initial brand sentiment for which trended positive. An addendum to the last two options is changing the colour of the tools and focusing on the ‘construction yellow’ colour for the tools.

Image Source: Seeking Alpha

To provide some semblance of a closure to the story without knowing the end myself, the one thing to note is that the fundamental issue here is the fact that Black & Decker is strongly perceived as home consumer brand as opposed to garnering respect in the commercial tradesmen segment. To address this problem without giving up market share in either segment, Black & Decker’s best move may be to rely on the DeWalt brand name when marketing to the commercial tradesmen. At the same time, Black & Decker could also work on changing its customer segment image from that of ‘every house’s tool kit’ to the ‘fixer’s toolkit’. The new image would lend credibility to home owner chores that requires tools as well, as opposed to trivializing them. Lastly, note that even if Black & Decker chooses to go with the first option and tries to increase profit margin per sale, the corporation would have to invest in engineering resources to create a product that is much higher quality than the other products in the tradesmen segment and then market that quality bar to justify the price increase. Thus, all three solutions at their core require the perception of the brand in the market to be altered.

Back here in 2020, I notice that the yellow and orange colours stuck around and so did Black & Decker. Kudos.