#mitsloanbrandinga

[sahilontheinternet]

What do Burberry and the Balkans have in common?

“Our challenges are very different now. Five years ago, our task was to fix a brand that was broken. We’ve accomplished that; today, the Burberry brand is healthier than it has ever been. Now the task is to manage the popularity of the brand in a way that lays the foundation for long-term growth. The last thing we want is to become the victim of our own success. The question is, how do we continue to grow the brand without risking customer burnout?” - Rose Marie Bravo

While reading the Burberry case, I could not help but think back to our conversation last week about the challenges of branding a country. Prior to Sloan, I helped several city, state, and national governments think about how to position themselves to drive economic growth. This work often involved thinking about how to pivot and manage a location’s brand identity. Given this experience, I often find myself employing this lens when reading about or traveling to new places.

The Burberry case made me think of the challenges being faced by a region I have several connections with: the Balkans. I had a project in Bosnia and my parents have been living in Montenegro for the last two years, so I have traveled throughout the region. After a brutal regional war in the early 1990s, the region has bounced back becoming a hub for tourism in Europe. This has been particularly evident in Croatia and Montenegro (in the image below), two countries with beautiful coast lines. Over the last 10 years, Croatia’s tourism has risen by 63.8% (Skift). Montenegro has also been experiencing recent significant growth, expecting travel and tourism’s contribution to Montenegro’s economy (traditionally 11% of GDP) to rise by 9% in 2018 (SeeNews).

Thus, Croatia and Montenegro find themselves at a similar inflection point as Burberry. Both have undergone a fundamental transformation of their brand (Burberry becoming modern and youthful and these moving past the image of their violent civil war). Additionally both are grappling with similar challenges related to the sustainability of their brand positioning 

Both Burberry and the coastal Balkan countries have attempted to position similarly, as accessible luxury. Burberry has positioned itself between ‘lifestyle’ brands like Ralph Lauren and ‘luxury’ like Gucci. Croatia and Montenegro have similarly positioned themselves as a high-end destinations for European and American tourists that is higher end than well-worn, oft-cited ‘lifestyle’ destinations (e.g., the Caribbean, the Portuguese coast, etc.), yet more affordable than ‘luxury’ destinations (e.g., Italy’s Amalfi coast). Thus, Montenegro and Croatia have attempted to thus be a place for in-the-know, adventurous travelers looking for a high end experience.

That said, Montenegro and Croatia have struggled with this positioning, as they have made major strategic investments at both ends of this continuum. They simultaneously find themselves making strategic decisions to promote affordable tourism, pushing for budget flights (attracting airlines like RyanAir and EasyJet), attracting affordable cruise lines, and calling for the rapid development of hostels (326 hostels in Croatia and 49 in Montenegro). 

Simultaneously both have targeted the higher end luxury markets. Montenegro has worked with Aman Resorts’ to create the $1000-a-night Sveti Stefan. Croatia has worked to do this in several ways, most famously becoming a hub for Yacht Week, sailing festivals for very affluent young professionals.

By making these strategic decisions that cater to both ends of the lifestyle and luxury spectrum, Croatia and Montenegro have blurred their image, leading to confusion over what kind of tourism destination they are. Many see them as either an affordable backpacker haven OR a ultra high-end escape, as opposed to the in-between location. Both of these cut out the aspirational nature of their brands (at the low-end its too accessible and at the high-end it is out of reach)

Thus, applying this example to Burberry illustrates a cautionary tale. It highlights that their niche positioning is unsustainable insofar as the company sends mixed messages. If Burberry actively attempts to compete at  the lower and higher edges of the spectrum, this inconsistency will result in customer confusion and skepticism. Based on this example, Burberry should strongly focus on promoting its Burberry London brand, with all strategic decisions focused on amplifying this message (promoting the use of the check, focusing development on trench coats, reducing investment in Thomas Burberry / Blue / Prorsum etc.).

Sources:

SeeNews, 2018, https://seenews.com/news/tourism-contribution-to-montenegros-gdp-to-rise-9-in-2018-wttc-607716

Skift, 2018, https://skift.com/2018/04/23/the-balkans-yes-the-balkans-lead-europes-new-tourism-push/

[jonaspcv]

Pitching as Code-Switching & the Role of Authenticity in Personal Branding

While this week’s reading was expressly regarding pitching thyself - contextually, in the professional sense - one of the important, if understated, applications of this idea is modulating across different settings.

As a proud member of the LGBTQ community, I spent the lion’s share of my life trying to find the perfect way to “pitch myself” to a primarily heterosexual audience. In effect, I was covering, as I knew that my social standing and rather instantaneous (150 milliseconds, according this week’s article) would in no small way be determined by my ability to “pass” as heterosexual - especially in red state Texas. Better yet, I collaborated with other catchers to co-create my own personal brand; I’m not sure I fit into any of the three positive stereotypes, as I lacked the heterosexual cultural capital to speak vernacular or navigate authentic flirting. Nevertheless, much of my “pitching” lacked authenticity, and perhaps it was for this reason that fitting in was such a significant challenge in middle and high school.

I’m also reminded of Ta-Nehisi Coates’ “The World And Me”. Coates speaks at great length about the kind of “code-switching” and self-modulation that he must “perform” between his school environment, where teachers expect him to be polished, polite, scholarly, and the streets, where courtesy and good behavior were perceived to expose weakness and leave oneself vulnerable to assault, or worse. 

I suppose the lesson, then, is less about the kind of character become or the role you play in order to elicit a specific “positive stereotype”, despite the fact that the article seems to outright prescribe it. For me, rather, like brands themselves, any kind of behavior you assume must be authentic with and to who you are. There are certain behaviors and mannerisms and ways of speaking, many of which are automatic and inborn, and trying to adopt a role that is less than fully authentic will certainly be perceived by any catchers in one’s life, be they professional or personal. Thus, my own prescription would be less about adopting a fully fleshed caricature, the ways that we can work to improve our personal brands and attempt to coax out positive stereotypes is by make incremental changes, over times, in ways that enhance existing messaging rather than trying to replace it. 

[elynrodriguez-blog]

Concha y Toro: People Get Drunk on Perception Not Reality When It Comes to Wine

I grew up in San Salvador, El Salvador and I can say this much – whenever an occasion called for a fancy bottle of wine (think high school graduation or engagement party), most people opted for a foreign brand. Why? For better or worse, the perception was that foreign wines (or more specifically, Old World wines) were far better than any “local” (e.g., Latin American or New World) alternatives. Even less expensive European wines were seen as “higher end” than almost any of their counterparts from either Central or South America. And if you’re a Chilean wine manufacturer with global ambitions like Concha y Toro––that is a problem for you, because when it comes to wine––people drink perception, not reality.  The Berlin Tasting is an example of this –  “blinded” consumers actually picked Chilean wines as the best based on quality – however, if “not blinded”, consumers would typically pick the more traditional French, Italian or Spanish wines as the best based on perception or “common knowledge.”

To this end, the “Made in” label is of utmost importance for wine consumers––as people associate brands with different growing regions (Bordeaux, Chianti, Napa, e.g.) and different quality.  On one extreme, European wines were considered the best, but Chilean and South African ones were considered up and coming, but of lesser quality. This is important for Chinese consumers who drink wine as a social and affluence statement.  Chilean wines are known for being “good value for money”, so Concha y Toro faced an uphill battle when trying to penetrate the Chinese and perhaps other international markets that have a growing middle class hungry for brands that “speak for themselves” and are synonymous with wealth and high quality.

Given that wine means different things to different people in different countries (e.g. fun, relaxation, status, friendship), Concha y Toro’s best international strategy might be to cleanly segment the market based on perceptions.

In the U.S., where distribution is such an important driver of success (e.g. think Grupo Modelo’s Corona’s success in the U.S.), a bottoms-up approach might be the best play.  Concha y Toro could leverage its value reputation to gain clout with a consolidated distribution base with its value wines Frontera and Sunrise. More importantly, given that distributors in the U.S. often impose price discounts, Concha y Toro would not be well served if it introduced its premium wines as a first offering, as they could lose their prestige if they are placed on the discount bin too often. Beyond traditional distributors, Concha y Toro could work directly with retailers like Kroger, Whole Foods and Wegmans to position its wine offerings.  Once a solid relationship with distributors has been established, the company could introduce its higher end, higher margin wines such as Concha y Toro, and accompany the launch with an advertising campaign to change perceptions among consumers. Furthermore, having a variety of offerings (e.g. across prices and wine types) could be important as wine consumers are not considered brand loyal and often seek to gain wine knowledge by trying different variations.

In a market like China, however, where it could be more difficult to dissociate oneself from a “cheap” reputation, Concha y Toro’s best approach might be to use a “top-down” strategy. The company could introduce its finest offerings, including Casillero del Diablo, Almaviva and Marques de Casa Concha using blind-test advertising (similar to Berling tasting) and let consumers discover Concha y Toro’s wine quality for themselves.  Getting celebrity advertising on board could also be a sound strategy to associate the brand with a “premium” status. Looking for some advertisements for the brand, I found a joint commercial between Concha y Toro and Manchester United. While Manchester United is clearly European, soccer is an international sport with broad diffusion, so Concha y Toro could be trying to be “European” or of “fine taste” by association, which is clearly something that could appeal to international consumers, including the highly coveted and affluent Chinese consumer.

[m49234]

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.

[m49234]

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.

[abhishek4077]

Burberry and BMW

While reading about Burberry, a brand which I kept drawing parallels to was BMW. BMW is aspirational yet functional, and also has created a niche for itself (along with its German rivals) as an automobile brand that signifies luxury, utility and performance at the same time. BMW = luxury and prestige, which pitches it against the uber-luxury brands; BMW = performance pits it against the sports car manufacturers; while BMW = utility sees it up against the practical brands like Honda and Toyota. This is somewhat akin to the position Burberry finds itself in, wedged between the luxury fashion brands like Gucci and the lifestyle brands like Ralph Lauren. BMW has actually done a great job in walking this tightrope, with its brand architecture (7-series, the M Sport brand + the roadsters, entry level cars like the 1 series and the mass market 3, 5 and X series) and acquisitions (Mini Cooper). A great example of how they conveyed this “mixed bag” of their portfolio to the public is through a series of short films they produced called The Hire. It starred Clive Owen, and each film was directed by a top Hollywood director and starred top actors/celebrities. Each had a different situational setting and had Owen driving a BMW (different model in each film) as the protagonist. There was no direct reference to the BMW, but the films highlighted the key attributes of the car through the storyline and screenplay - performance, luxury, safety etc. Each viewer was free to take away the aspect that mattered most to him/her. It was a major success in marketing and branding, and had a direct positive bearing on BMW’s business across their product lines in the years ahead.

[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.

[samgheffernan]

Burberry was one of a number of British heritage brands that experienced a resurgence in the early 2000s, both in the United States and globally. Hunter boots went from British countryside and school uniform attire to a must-have item among American middle school girls and Barbour jackets--a conservative wardrobe staple for over a hundred years--opened a store with trendy brand collaborations in SoHo. Burberry’s rebirth admittedly began a little bit earlier, but it shared many of the same qualities as those of other British brands: iconic design, a history unrivaled by almost any American consumer company, decades of family ownership (and perhaps brand neglect), and a Royal Warrant from the Queen herself. These products were not conceived principally as fashion items but rather practical clothing tailored to the less than ideal British climate. However, they have each morphed in their own ways (and on their own timeline) into global fashion brands as a result of several key branding and business decisions.

Turning to Burberry, Rose Marie Bravo transformed the sleepy brand into a global powerhouse by leveraging the iconic check pattern to expand product lines into new categories and across a relatively wide range of price points. In my mind it seems as though she sought to position the brand as a premium Ralph Lauren (a brand that is unquestionably of American heritage) with an air of British sophistication. In doing so, however, she made the brand more vulnerable to competition by stretching across too many markets and losing sight of the target consumer. It’s a classic example of business decisions taking precedence over long-term brand preservation--her strategy improved financial performance tremendously (and was likely necessary to grow the business into a multi billion dollar publicly-traded company). However, it’s easy to undo decades of careful brand positioning with a few decisions. Ralph Lauren has more recently done the same. While for many years it effectively operated in outlet malls and on the floor of high end department stores with different sub brands, the brand now seems to be stretched too thin. Consumers lost track of what it really stands for, and it became susceptible to competition at every price point. Burberry arguably did the same. The target consumer--an affluent British (or Anglophile) professional looking for a classic, well-made coat or handbag--was likely alienated by seeing the Royal Warrant in labels across mid-tier department stores globally. What was good for business ultimately damaged the brand by giving competitors more and more ways (in terms of price, target customer, and product category) to make inroads. Bravo succeeded tremendously in growing the company, however, I think it’s less clear that she succeeded in stewarding a heritage brand into the 21st century.