Lucy Minott @luceminott-blog - Tumblr Blog

Brand Reappropriation: How to React

Last class we discussed how, in today’s world, brand managers can no longer control their brands like puppeteers. With consumers increasingly connected and active on social media, brand managers must expect reactions to the products and content they produce. While it is impossible to predict how consumers will respond, it is important to think through the different reactions because once a campaign goes live, everything happens very quickly and you may need to respond fast.

Based on the class and our readings, I believe the following is a simple map to help brand managers consider their response options.

1. If the campaign was good/on brand and the reaction does not undermine your credibility: Do nothing / embrace the reaction - this is the Wheat Thins case, while the reaction was sarcastic and made fun of Wheat Thins, it did not undermine Wheat Thins credibility or what is stands for as a brand, as such Wheat Thins should embrace the press and laugh along

2. If the campaign was good/on brand but the reaction undermines your credibility: Respond in a manner true to your brand - this was the Downfall and Dove examples, in this case consumers will be quick to forgive and forget, since your initial campaign was in line with your brand there is less ‘punishing’ required, so your best move is to respond in a way that is humorous, but true to brand.

3. If the campaign was a mistake/not in line with your brand and the reaction undermines your credibility: Do not respond / hope consumers move on as soon as possible - this was the Tiger Woods example, in this case, bringing additional attention to your original mistake does you no good, and the best option is to learn from it and move on, as fast as possible.

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Intel Inside - Making Consumers Care

Why?

The Intel Inside campaign helped drive up willingness to pay for products with Intel chips, and thus gave Intel bargaining power with PC manufacturers. The average PC user was relatively unaware of how their computer worked, and would have naturally focused on visible elements of the computer (the look, feel, and software) and the key points of differentiation when making purchase decisions. The Intel Inside campaign educated consumers about the importance of the microprocessor and drove up willingness to pay for products with Intel chips. As such, the Intel Inside campaign prevented Intel from having to compete on price, and its healthy margins enabled the company to continue investing in R&D and product development. Intel effectively pursued a differentiated strategy, and the Intel Inside campaign was a key element of its success.

How?

The key insight that enabled the success of this campaign was the importance of involving the OEMs. By building brand awareness, Intel was strengthening its bargaining position versus these OEMs, so the OEMs would have been natural opponents to this brand strategy. Carter insightfully anticipated this reaction and offered OEMs substantial incentives (marketing dollars) to support and participate in the campaign. In a given year, Intel gave OEMs over $1B to spend on marketing, as long as they promoted Intel Inside in the campaign and added stickers to their products. This was an expensive approach, but clearly paid off in the long run.

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Check your check

Rose Marie Bravo took over as Burberry CEO in 1997 and made significant changes to make the 150 year old brand more hip and high-end, tripling sales in three years. These changes included launching many new products to appeal to modern fashionable tastes, raising prices and elevating the company’s brand position, and importantly reigning in bad distributor relationships that had resulted in Burberry’s pricing, placement and packaging being inconsistent and often off-brand, especially in the Asian market.

However, as Burberry launched more products (many of which relied on the iconic check) and succeeding in becoming more fashionable, the brand became a favorite of hip-hop musicians and their fans. As Burberry counterfeits became more widely available, “checked” products became an achievable, aspirational symbol for many urban youth.

Gaining popularity with a younger demographic is exciting for Burberry, but at the same time could isolate its target demographic. The question remains - can Burberry stand for something and be loved by so many different groups?

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The Bush Family’s Branded House

The general consensus is that George W. Bush benefitted greatly from associations with his father, George H. W. Bush, who ended his presidency with a 50% approval rating.

During George W.’s campaign, The Gallup Poll reported:

“There is no doubt that George W.’s famous pedigree has been of enormous help to him throughout his political career. His success to date would have been a much more difficult task if his name had been George W. Smith rather than George W. Bush. But so go the fortunes of war… Having a famous name is as much a part of the game of politics as is any of the myriad other reasons why one candidate ends up beating another.”

George W.’s experience illustrates the positive impact of a, literal, branded house. The “Bush” master brand was very strong and helped him gain credibility and visibility throughout his campaign. Moreover, George H. W.’s experience was highly relevant so there was no need to brand a “new offering” to Republican voters.

Jeb Bush’s experience was very different. He spent significant effort during his recent campaign disassociating himself from his brother, whose presidency ended with a 27% approval rating. In this case Jeb was actively trying to avoid this association and represent a new, different offering.

In his own words: “Jeb is different from George…Jeb is who he is. My life story is different.”

The story of the Bush family nicely illustrates both the pros and cons of a Branded House approach.

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SIA Style

Singapore Airlines (SIA) transformed consumers expectations of air travel. If a brand is the promise you make to your customers, Singapore airline has a very strong brand. Even the notoriously patriotic and hard to please Japanese travelers flocked to SIA, who provided Japanese cabin crews and food to serve them.

How did they do it? Singapore airline’s entered the market at a time when air travel was regulated and uninspiring. They took advantage of this environment to build a brand focused on superior customer service. Initially the company focused on the in-flight experience by selectively hiring and rigorously training its flight attendants - Singapore Girls.

Over time, as the industry advanced and competitors tried to replicate SIA’s chart-topping customer service, SIA doubled down on this high-end strategy and made sure it had the shiniest planes, shortest check-in lines, and quickest baggage claim. SIA had a head start on competitors and the better they delivered on this strategy, the more cash they had to fund investments to deliver an even higher level of quality. It was a virtuous cycle, similar to how only the already wealthy can afford to invest in some of the highest yield asset classes.

I believe SIA should stick with this strategy, even in the wake of 9/11 and the sharp decline in business travel, the mainstay of SIA’s business. If business travel continues to decline, SIA and many airlines will need to fundamentally change their business models. But if business travel picks back up, SIA needs to continue to invest to maintain the highest levels of service, including the “spacebeds”. The industry is growing more competitive, SIA no longer has a cost advantage from cheaper labor, and SIA has promised customers an unparalleled in-flight experience, SIA Style. As long as there is a glimmer of hope for the market, I would stay the course.

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Predicting Product Diffusion

The question

How do entrepreneurs, venture capitalists, or consumers predict which products will take off and which will flop? There are many different theories that attempt to answer this question. Rogers claims that 5 product traits account for over 50% of variance in the rate of product adoption. We will apply this theory to 4 product innovations that were on the verge of ‘taking off’ at the end of the 90s. Based on my analysis, if Rogers’ theory were true, sliced peanut butter would be a household item today. Instead, it is exists only as the subject of a wistful Reddit thread.

The analysis

(Perceived) Relative Advantage:

Of all these innovations, the only one solving a real, prominent pain point was satellite radio, which would get rid of hated commercials while listening to music. Digital scents came in last - this was novel, but not needed.

Compatibility:

Satellite radio won again here, followed closely by silver bandages. Both of these products would have a very similar user experience as the products they were seeking to disrupt. Digital scents seemed highly incompatible with most people’s daily routines.

Simplicity:

This is the inverse of complexity, and refers to how easy the product would be to understand and use. Satellite radio and digital scents both require significant investments in new technology and could be perceived as daunting to adopt, compared to sliced peanut butter or a modified bandage.

Trialability:

Given the upfront investments, satellite radio and digital scents are both much more difficult to trial.

Observability:

All of these products rank high on the observability factor as they as unique consumer products that people would like to talk about and share with their friends. Sliced peanut butter takes the lead because it is a product that is brought out of the house/car, to school lunches.

Takeaways:

We know now that of these products, satellite radio is the only one that really took off. Based on this analysis and my own experience, I would propose amending the 5 factors analysis to more heavily weight ‘relative advantage’ - if a product is solving a pressing pain point, it will take off eventually, even if adoption is slow (the telephone, for example).

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Shine Bright Corona

In the late 90s, Heineken brand was associated with quality, but also coldness and arrogance in the U.S. market. Given its leading position as the No. 1 imported beer in the U.S. over the past few decades, Heineken advertising executives had wrongly assumed that the quality of their beer would speak for itself and lost touch with the U.S. customer. Advertisements portrayed competing beers as faddish and featured taglines such as “just being the best is enough.” The arrogance of these messages did not resonate with U.S. market, which was increasingly young, Hispanic, and from the South and West of the country. Heineken’s dark green bottles and Dutch heritage reinforced this brand.

Corona’s brand was associated with fun, sun, and the beach thanks to 20 years of consistent branding and its 100% Mexican origin. Corona’s simple advertisements featured sunny, Mexican settings and taglines such as “Vacation in a Bottle” and “Change your Lattitude.” The spelling mistake in the latter indicative of the irreverence underlying many of Corona’s messages. Corona’s clear bottles, beer color, and lime-ready long beer bottles all reinforced this messaging.

Corona should stick with its young, fun, vacation-oriented brand and invest in regional advertising strategies to overtake Heineken. I think a direct, head on confrontation with Heineken would undermine Corona’s carefree brand. Heineken’s attempts to dismiss competitors made it seem out of touch and failed to increase sales. Running hostile campaigns against “cold” or “elite” beers would a) potentially undermine Corona’s carefree, irreverent brand and b) give Heineken a chance to respond. I think Corona should invest heavily in its existing fun brand at this time, but not directly attach Heineken.

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Black & Decker’s Black Sheep Brand

When can a #1 brand be a bad thing for a company? Brands strive to achieve universal recognition. Marketers dream of building category-leading brands. But there can be unexpected, negative consequences.

If your company has multiple distinct product lines, achieving brand recognition in one area can undermine your brand in another area. In Black & Decker’s case, Black & Decker struggled to penetrate the Tradesman segment of the Professional market, with only 9% share versus 20% of the Industrial segment of the Professional market, and 45% of the Consumer market. The world’s leading tool company had a black sheep in its family of brands.

The buyers in the Tradesmen segment, independent electricians, plumbers, carpenters, etc. who purchased their own tools for work, were highly aware of the Black & Decker brand (98% awareness), but did not report to be “proud to own” Black & Decker products and did not view them as “durable and rugged.” Due to Black & Decker’s dominance of the Consumer market, the Black & Decker brand became closely associated with “light” at home chores or worse, recreational activities. As one tradesmen reported “Black & Decker makes a good popcorn popper, and my wife just loves her Dustbuster, but I’m out here trying to make a living…”

To be at risk for this “brand undermining” phenomenon, the buyer for the two different product lines needs to be the same. Think about a professional photographer buying a camera – is she going to want to buy the same SLR she gave her son for his 15th birthday? Even if it is an excellent camera, she now associates that model with its ‘ease of use’ and ‘simplicity’ not its powerful, professional abilities. I believe that the fact that the buyer is the same for the Tradesman and Consumer segments is a key insight here, and explains why Black & Decker performs much better in the Industrial segment of the Professional market. In the Industrial Segment, the buyers are commercial contractors, buying from large distributors, who are more distanced from the Consumer market. In this case, the buyer is making rational, product performance and cost based decisions, and is less affected by Black and Decker’s association with consumer tools.

So, Black & Decker’s experience teaches us that a #1 category leading brand can have unexpected consequences for a company’s other products lines. If this resonates with your situation, what are your options?

1) Fully re-brand the weaker product line (in this case, drop Black & Decker association altogether)

2) Re-launch weaker product line under sexy new sub-brand (in this case, something manly and rugged)

3) Give up - don’t worry about differentiated brand (in this case, either exit the Tradesman category or treat as commodity)

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