Branding Section A - Matt Ostrow

15.846 Student Section A - MIT Sloan

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Leveraging Co-Branded Consumer Stories in the time of COVID-19

I recently came across this touching AT&T ad while watching more TV during quarantine at home. While telecommunications companies can typically get a bad reputation on consumer studies, I found this ad to be a particular good branding example of how to leverage consumer stories and content to evoke feelings and purchase intent

The AT&T ad is co-branded in the sense that it uses ad imagery from AT&T (workers repairing a telephone line, monitoring the cell network) as well as user generated content (how people are thankful and relying on cell service to get by in these hard times -> whether it be for school, a birthday, or just catching up with friends). Instead of fake, highly-polished scenes of consumers using AT&T’s services, the use of user-generated media provides a much greater degree of authenticity. I can relate to the consumers in ads by seeing the on-the-fly video-taping of important life moments during a hard time, so the authentic use and dependence on AT&T is much more striking than if those scenes were performed by actors. Especially in this public health crisis, authenticity is key. Seeing users express their gratitude for the brands that are getting them through day-to-day life in quarantine has inspired me much more than “in your face” advertising that looks too polished. I agree with Professor Gosline’s writing that “ if the finished product is too polished or professional looking, it may be perceived to be brand authored, which can undermine feelings of consumer authenticity”. Authenticity is paramount in this time, and I enjoy seeing the consumer-authored stories more.

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Hitting the right psychological chord – Effectiveness in Anti-Vaping and Anti-Smoking Marketing

As discussed in the case about Dark is Beautiful trying to take on deep-rooted commercial and cultural associations with skin fairness in Indian culture, it is very hard to change consumer mindsets, even when existing mindsets might be very harmful, such as in the case of skin-color related bias. Effective marketing, such as the “Dark is Beautiful” campaign, can be used to help chip away against biased notions and support consumer mindsets in a more ethical way.

 This article got me thinking about how can good marketing be used to decrease societally bad behaviors even when the common mindset of society is that a behavior such as smoking or vaping is scientifically bad for you. Despite known medical issues caused by vaping, the FDA reported in 2018 that over 3.6 million middle and high school students in the U.S. were regularly using e-cigarettes or vaping pens. The latest generation of teens still seem to be vaping, despite its addictive qualities and chemicals that can cause illness, such as lung injuries.

 Looking at smoking, D.A.R.E can be seen as having mixed effect by using scare tactics, which discouraged some use while increasing use among those who became curious after their exposure, new media campaigns are targeting vaping use – something now engrained in teen culture – with some of the same scare tactics. Even DARE has moved away from its past scare tactics.

This ad for “The Real Cost” shows the health damage vaping can cause. However, using the same scare tactics may not dissuade teens who look at it as a “less damaging” option compared to cigarettes. And with 3.6 million kids vaping without major recent declines, it seems like health-focused ads alone won’t solve the epidemic.

I believe the anti-vaping movement should adopt more psychologically compelling ads like Truth’s “Smoking Gap” ad below. Instead of focusing on cigarette’s health effects alone, the ad focuses on displaying simple data that shows that smokers earn much less money than non-smokers. By appealing to other deep-rooted feelings, such as wage inequity, I feel this ad (with 9.7M YouTube views) strikes a stronger code with teen and young adult psychology. Its portrayal of Big Tobacco controlling one’s paycheck hits a strong economic and psychological cord. Young adults don’t want to be “controlled” by Big Tobacco or to miss out on their hard-earned earnings, whether it be from a part time job or first job.

In short, while health effects are real, anti-vaping advertising should leverage other psychological aspects – such as fear of being controlled by Big Tobacco and losing out on earnings – to promote anti-vaping efforts.

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The Product Draws them in, Ongoing service keeps them loyal

The Singapore Airlines case highlights a paradigm in many industries: is there room to be profitable in the middle of the spectrum of low cost, low service vs. high cost, high service? As seen via their historical positive profit financials and top ratings across Zagat and airline industry publications, Singapore airlines was able to profit at the “high cost, high service” end of the market by having best in class airline attendants (the “Singapore girls”), the newest aircrafts, and the best in-flight food. With half of their profit coming from business/first class customers, constantly upgrading their inflight experience to be better than BA, Qantas, and other competitors was a key focus, given loyalty among these high-profit but niche customers who could spend large amounts on business expense accounts was what drove SIA’s profitability. Despite deep threats to the industry after 9/11 and rising competition from BA, I think it makes sense for SIA to continue investing $100M in lie-flat seats for Raffles Class customers to hold onto the prized business class segment vs. BA. In the long-run though, SIA will have to continue to invest in big and small “surprise and delight” features to continue to command price premiums vs. its competitors.

This article and the behavioral science article highlight how brands, both in hospitality/travel and beyond, must focus on multiple touchpoints – not just in base equipment but in high class service - to keep their competitive edge against competitors. One example on customer-centric value that comes to mind is BMW, which has maintained a large price premium on its luxury cars despite the fact that Japanese competitors have been able to provide similar quality cars via Lexus and Infiniti (owned by Toyota and Nissan, respectively).

I argue that while a good product can help acquire customers, a good experience, especially an after-sales experience, can keep customers loyal (a brand like BMW wants someone to buy or lease BMW after BMW, not switch to Lexus because their price goes down or their technology goes up). A good aftersales experience helps drive loyalty over time.

Here are some example touchpoints where BMW excels:

1.     BMW Connected: BMW’s latest cars include an app that makes it seamless to book service appointments directly from the car or internet, instead of waiting on the phone to negotiate times that work with a particular dealer. Unlike many other car brands, they make it easy and included in a lease to get free vehicle pick-up and drop-off, which means that a local dealership will come grab your car and give you a brand-new loaner BWM during your experience. Further, they’ll text you about the progress of your car, will do additional services like oil changes or tire inflations free of charge while they have your car, allowing you to continue your BMW driving experience while your car is being serviced. There is even a BMW intelligent assistant built in that can recommend and book appointments automatically, shifting the burden of maintenance away from the car owner.

2.    Integrated online and in dealership experience- BMW has invested in connecting its online self-help pages to its customer relationship manager, so when a customer cannot find the right answer to a feature question online via their CIC (Customer Interaction Center), a phone representative or in-dealer staff member can address the customer by name, apologize for any confusion, and directly answer the question instead of having the customer rehash their experience.

BMW drives loyalty not by just providing top-of-the-notch cars, but by making its aftersales experience and touchpoints a cut above the rest.

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Pining for a Premium Wine – The Efficacy of a Draft Down Strategy

The Concha y Toro case highlights an important paradigm in branding: are consumers more receptive to a brand adopting a “bottom-up” or “top-down” strategy, and does this matter by type of industry.

I’ll argue that for products that typically start in a premium-position or luxury categories (wine, fashion, and cars) a “top-down” or “draft-down” typically is more effective if a sub-brand is used to prevent brand dilution.

My first example is quite personal, one of my favorite wines is Duckhorn’s Cabernet Sauvignon, which retails for $54.97 at Total Wine.com.  I typically don’t spend that much one wine, but I know to seek it out for a special occasion or celebration. I know it’s been aged for 16 months in oak barrels with top Napa grapes, and the refinement of the level makes me feel like I’m going to consume something luxurious. As mentioned in the research article for this week, I believe my “taste expectations affect my taste evaluation of the wine”: my expectations for a luxurious, tasty experience come true because I believe it should taste that much.

However, Duckhorn’s more successful wine is “Decoy by Duckhorn Cabernet Sauvignon”, which retails for the much more palatable $16.97, where Duckhorn can ship many more cases and take advantage of the economies of scale of the $10-$20 wine market. For me, it is a compromise I’m willing to make – I know and expect it to taste like a Duckhorn wine, but I know it is not the “premium” one, a “Decoy” is inherently a fake (although a fun and cheeky name) and I know that the regional branding for Sonoma County makes it less premium than the super-premium wine region of Napa. Duckhorn does a wonderful job of creating the Decoy sub-brand because I still get the taste expectations of the full-priced wine, but they’ve created a sub-brand that targets my regular willingness-to-pay, and they clearly, both consciously and subconsciously, shift my perception. The differentiations in name, price, and heritage around the wine help create Decoy and the full priced Duckhorn as separate brands.

I think this draft down strategy works well across a lot of premium categories, when there is good sub-branding. For example, BMW 1 series and 3 series are fairly similar to 5 and 7 series, but discerning consumers know the difference, and 1 and 3 series are cost prohibitive enough that the market is not flooded with BMWs, at least in the US.

Another example is S’well and Sip by S’well. S’well’s black bottle below sells for $45 whereas the Harry Potter branded Sip by S’well retails for $19.99. Not only price, but features such as vacuum sealing, premium metals, and durability differentiate the main brand and its sub-brand. This clear differentiation helps S’well take advantage of the scale-friendly low-end market without diluting its top end offering – S’well owners typically don’t feel that the brand is diluted by the Sip offering.

Plenty of brands have failed at differentiating their low-end offerings that have led to brand dilution, such as Michael Kors expanding too far. There needs to be a clear differentiation between the main brand and sub brand.

 And back to wine for a short description. A bottoms-up strategy is  likely seen as inauthentic. Barefoot wine or Carlo Rossi trying to make premium wine seems fake because there is a consumer expectation that a master vinter can make a cheaper version, but that a mass produce wine doesn’t have the expertise to go up market under the same brand name. I’ll continue going for my Decoy by Duckhorn ahead of a Barefoot “Special Reserve”

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When consumers won’t budge, give them a Nudge

Soman, Kim, and An’s article about consumer behavior online highlights key aspects about consumer psychology that affect product appraisal and purchase behavior. One of their key insights is that consumers don’t often behave economically rationally (as “econs”) but rather make decisions with a combination of rationalism paired with cognitive laziness, procrastination, difficulty choosing between many options, and contextual influences. It is paramount for brands to provide contextual “nudges” to influence consumer behavior, especially when online consumer experiences can be confusing to consumers. I’ll proceed  by highlighting ideas for nudges for some of the brands we’ve discussed so far.

Corona: As discussed in class, the non-craft beer market is highly commoditized and marketing drives a large portion of consumer behavior in this area. However, consumers entering a local liquor store are often confounded by the dozens of lighter-beer offerings a store has, even if the price per beer is fairly similar (within domestics and within imports, respectively). It is important for Corona to not only continue its print and digital marketing position as a “Vacation in a Bottle”, but to also leverage existing consumer psychology. One aspect highlighted in impatience and impulsivity: “the tendency to act immediately”. There are several ways Corona could leverage impulsivity in its online consumer experience. One idea is to run a digital ad campaign with Drizly, an alcohol delivery service, that offers “The Beach is Only A Click Away. Get Corona on Drizly with Free Delivery, Limited Time Offer”. By creating a sense of urgency for consumers to feel like their at the beach after a long day of work, Corona works to use impatience to make consumers buy beer more impulsively. This type of ad could also be placed on a travel website, so that if a consumer is looking to book a vacation to a Mexican beach a few months in advance, then an ad of this type would allow a consumer to “taste the beach” immediately instead of waiting for their vacation to come around. We can also leverage this in a physical liquor store by having a beach themed in store display that has a party light go off for one hour every week with a special giveaway or discount. The feeling of scarcity for a deal will help influence consumer to more impulsively buy Corona.

A cool example of satisfying impulsiveness is this Argentinian Corona ad that has a bottle empty as you scroll through the page. This interactivity helps consumers feel like they’re consuming the beer and adopting the beach-like feelings, which will stick in their head

https://adage.com/creativity/work/relax-banner/31450

Black and Decker: Black and Decker can leverage peer influence behaviors in several ways. For example, if peers of tradesmen had Twitter back then and were saying that Black and Decker products were flimsy, Black and Decker could directly tweet at individuals with those commetns to address misconceptions on quality, when brand-free tests showed that their products were higher quality. Today, if Black and Decker (or DeWalt) wants to better compete against other Professional-Tradesmen brands, it can leverage recommendation engines on Home Depot or Lowes’ website, where its products will likely come to the top of search given that research has shown that their products are more durable. This could be paired with providing iPads to Home Depot and Lowes’ that help provide a recommendation engine that is unbiased, but will eventually promote their products since they perform higher on quality and durability indexes.

 Nudging helps make consumers find your brand more attractive amidst an online world of clutter.

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Black and Decker case - DeWalt Yellow is the New Black