Branding Strategy Insider

Brands Excel With Over Delivery

Recently I checked into The Peninsula Hotel in Chicago. Knowing the brand your expectations are by default tuned to the highest level – still I’ve time after time managed to be surprised. When I wished to access music in my room, I was told that the CD library didn’t exist in this particular hotel. The apologetic concierge however asked me out of curiosity which CD’s I was looking for. Listing all my favourite artists I hang up wondering the reason for this curiosity. 20 minutes later the bell rang on my door. The same person as I’ve been speaking with over the phone handed over a bag with three CD’s purchased by the hotel, all the favourites I mentioned – and given as a gift to me.

I bet you’ll never forget this story – neither do I. But the case is that the extra $20 the hotel decided to spend on my account makes me spread the story – just like now. Would you still claim this wasn’t worth the investment … hardly!

The story is very much in line with another experience taking place in a Louis Vuitton store, the maker of luxury leather goods, which explicitly does not offer a lifetime warranty on its products. In fact, the company's documentation states a charge will be applied for repairs. The salesperson to whom you return your faulty product further reiterates this when you take it in for repair. But when you come back to collect your item, you'll almost never pay for the service. The salesperson assures you this was done especially for you.

The over deliver and under promise builds your brand in ways which few can imagine – as it reflects a brand which cares about you – rather than a brand which traditionally only cares about it’s shareholders. It’s a story, which stays with you for life – and not only keeps you as a loyal customer – it makes you spread the rumour. If you don’t believe me ask any kid about how many bricks there is in any box of LEGO –and the answer would be – “there are always too many bricks in the box”. I remember as a kid I always noticed the pleasant surprise – which always made me think this was a special gift for me. Many years later, when visiting the factory I realized, other factors were the true reason for this generosity – still the story stays with me forever.

Today's Ad Business: Land of the Lost

With this year's Super Bowl behind us, this seems like a good time to address the advertising business and how it has lost its way.

My overall comment on the array of wildly expensive and unintelligible commercials that ran: What in the world are advertisers thinking about? Most of the people sitting in my living room kept asking me, "What are they selling?" My response was that I was just as bewildered as they were. (And I'm in the business.)

When it comes to Super Bowl advertising, it would seem that all the rules go out the window. It has become an all out effort to be as entertaining as possible. It's damn the selling message, full speed ahead. As a result, you get overproduced dance numbers, horses playing football, chimpanzees and funny vignettes with very little connection to the company or product advertised. All in all, you get a colossal waste of money. It's as if clients and agencies say that this weekend we are in the entertainment business.

What's the measure of success? Like a movie, it's how well they are reviewed. The press is an enormous contributor to this phenomenon. Everybody weighs in on what commercials were most popular, leading to adjectives such as charming, hilarious, cute, crisp and funny. Sure, they will occasionally say a commercial is unfunny or silly, but you never read a critic saying, "I didn’t see a reason to buy that product anywhere." Hey, this is the Super Bowl, and the object is to entertain, not sell.

What do I consider to be a great Super Bowl ad? Well, to me, the greatest ad ran some years ago. It was for a lock made by Master Lock, a unit of Fortune Brands. In this commercial, all they did was shoot a high-powered bullet right through the center of the lock and to the amazement of all, it stayed locked. That was one of the best product demonstrations I’ve ever seen, and it made a great commercial. Not funny, just dramatic. Not cute, it just made the powerful point that this is one tough lock.

Recent times have brought a  twist with most companies putting their commercials online so that people could see them again.

Building Emotional Ties To Your Brand

A couple days ago, I was in a Scandinavian airplane on my way to Los Angeles. Ignoring the airline food, I noticed a cute little branding experiment on the tray. A small notice was printed on an item. It declared, "Pepper has been called the gift of the East." (I overlooked the fact "gift" means poison in my native Danish.)

The statement aptly communicates the airline's Scandinavian values: among them the Northern European delight in thoughtful detail, appropriate explanation, and historical attribution.

Why would I call this branding at all? Because taken together, the smallest of onboard details conspire to build a total airline brand picture. Normally, I can barely distinguish one airline's food tray from the next. Sure, the cutlery may carry the company logo. So what? A logo is a given. It doesn't make you think about, act on, or consider the brand. But the Scandinavian airline's pepper packet did.

Branding creates attachments between consumers and your brand. The stronger the attachment, the better the branding. So, let me ask you this: Is it possible to create human attachments between, say, stereo equipment manufacturers and their customers? If so, how would you achieve it?

If you're drawing a mental blank, visit the Bang & Olufsen website. The experience is an interesting take on branding through emotional attachment. Besides all the hi-tech talk you'd expect, the site has extra finesse: a story element.

The flat-screen product section offers the story of the flat-screen -- how it was invented and conceived. A Flash intro transports you through the designer's ideas and inspiration sources. Who knew the designer's inspiration was found in not-yet-hung paintings, propped up against a gallery wall?

The story changed my impression of the product. The flat-screen TV is no longer just a TV, but a piece of history. Now, whenever I pass flat-screen TVs in a store window, I'm instantly transported into the mind of the designer. I'm able to see the appliances as the outcome of inspiration. Thus, an emotional link between the brand and me.

Competitor-Oriented: Danger for Brands

More than 20 years ago, I went to university. A marketing man from the start, I picked the oldest and biggest Marketing department in the country, at Lancaster University. It was in one of my first classes, Retail Marketing, that I learned about Tesco.

It sounds surprising now, but in 1989 Tesco was a case study in marketing mismanagement. I learned how it had committed the huge error of 'competitor orientation'. For most of the 80s it had been copying Sainsbury's tactics, and this, according to my lecturer, was why it was a second-class operation.

In 1993, I went back to Lancaster to do my PhD in Marketing. For the first time, I had to teach students. Once again, I turned to Tesco; but things were changing. A marketer, Terry Leahy, had been appointed to the board. I taught my students how rare it was to have a board-level marketer and then talked about why Leahy demonstrated the big advantages of a seat for the discipline at the top table. He had outlined a new direction for Tesco: it would start to build its service and merchandising around consumers. It was early days, but Tesco was an interesting example of attempted consumer orientation.

I secured my first faculty position, as an assistant professor at the University of Minnesota, in 1997 - the same year Leahy became chief executive of Tesco. For the first time I had to teach MBA students, so I picked the subject of Tesco. How the British supermarket was breaking the rules of the category by listening to consumers. How it had introduced a successful low-priced private label, even though marketing experts warned it was a bad idea, and had instituted a policy to ensure that if more than one person were waiting at the checkout, staff would open more immediately. We talked about what great consumer orientation means, and used Tesco to illustrate the point.

The Past Can Power Online Brands

Social values redolent of the '50s, '60s, and even '70s are quietly being readopted by brands. These values are becoming more strongly expressed in the communications of brands plugged into the trend.

Why is this happening? How can you leverage this? Why is simple. As the global community endures crisis after crisis -- natural disasters, an ever-present threat of political instability, shadows of war, and continual damage to already fragile economies -- humans long for stability. We're united in a need for something we can trust, rely on, and think about with joy.

Aside from the macro situation of global instability, there's the micro situation of individual uncertainty. Close to 50 percent of marriages end in divorce. The strong family unit celebrated in earlier decades' wholesome sitcoms and movies seems an anachronism. Nostalgia encourages parents and kids alike to think about the past in romantic terms. The past is an icon of stability.

How does this affect your Web site? Well, forget about innovative, flash graphics hearkening to 2010. Personally, I'm convinced most consumers are repelled rather than attracted to a sci-fi, futuristic approach. Go the opposite direction. Contribute stability to your customers' lives by evoking the past in your communications.

If your brand is an old, familiar favourite, dig out some promotional material from the archives. Look at those old graphics and catchphrases and try to integrate them in current communications.

Marketers Can Borrow To Win

Not too long ago I picked up the "big new idea" book, Blue Ocean Strategy. Its basic concept is about pursuing and creating new products and services (blue oceans) instead of duking it out with established competitors in existing categories (red oceans).

It is absolutely a smart way to go. In fact, we have been preaching this concept for years. In my 1981 book Positioning: The Battle for Your Mind, Al Ries and I wrote, "It's better to be first than better." And in our 1985 Marketing Warfare you'll read how "flanking warfare moves into uncontested areas that avoids established competitors."

Did the authors borrow old ideas and build on them? Sure. They have followed Thomas Edison's advice when he said, "Your idea needs to be original only in its adaptation to the problem you are currently working on."

You can increase your odds of solving a problem by becoming a collector. When you come across a nifty notion or a savvy strategy, save it. Start a journal, a clipping file and a computer file. Keep a pad by the bed, a voice recorder in the car.

When you're trying to find a solution to something, dip into your collection. Then use a blueprint to make the most of an existing idea. (The blueprint itself is adapted from a checklist by Alex Osborn, author of Applied Imagination.)

The simplest way to solve a problem is to borrow an existing idea. Military designers, for instance, borrowed from Picasso's art to create better camouflage pattern for tanks.

The simplest way to invent a new product is to adapt an existing idea. The pop singer and composer Paul Simon was asked where he got the inspiration for "Bridge Over Troubled Waters." He was brutally honest. He said he was carrying around two melodies in his head--a Bach chorale and a gospel tune from the Swan Silvertones--"and I just pieced them together."

Scent Marketing Success: Step 9 of 10

Our series on scent marketing continues with number 9 - Carefully handle objections

Admittedly there is plenty of room for interpretation on the “pleasantness” of a scent. The same applies for some consumers’ notion that scent marketing is sneaky on a subconscious level. There is no general answer that would justify or condemn scent marketing in general.

However, some of us suffer from chemical hypersensitivity, multiple chemical sensitivity, contact dermatitis and hyperosmia, sometimes resulting in asthma and panic attacks.  While their number is fairly small, their advocates are extremely outspoken and enjoy heightened attention from the media. So we need to act responsible and react with compassion.

Fact is, there is scent all around us. Garbage on the sidewalk on a hot summer day, the guy next to us on the subway, the street vendor selling his pretzels – nobody can reasonably object to those.

In scent marketing it comes down to managing scents:

•    Providing for a mechanism that puts the consumer in control over having an olfactory experience or not – depending on her personal preferences and potential medical condition. This also means to keep public spaces clear of scents.

•    Delivering an appropriate quality and quantity of scent. Let’s not be tempted to buy scents from dubious sources and/or countries that do not have institutions overseeing ingredients and manufacturing processes.

Exploring Price Segmentation

Today we take another question from a BSI reader like you...

Laura, a Marketer in Montreal asks:

'What are some disadvantages of price segmentation?'

Laura, thanks for asking. Generally, I am an enthusiastic supporter of price segmentation. Done thoughtfully, it will result in additional revenues and profits. The trick is to segment the prices based upon real consumer need segments. The only conceivable downside is if the price segmentation is designed in such a way so as to encourage and enable price down trading. But this can be largely avoided if the price segmentation scheme is well designed.

I share more on Price Segmentation here.

Have a question related to branding? Just Ask…

Sponsored By: Brand Aid

Why Retailers Call The Shots

The news that Microsoft has hired a senior Wal-Mart executive to spearhead a move into retail will not come as much of a shock. These days retailers run the world, and companies like Microsoft, which have typically supplied big retail, are now increasingly drawn to the idea of opening up for themselves. The marketing advantages are great.

First you keep the margins that retailers usually extract from you. You also gain access to a mass of consumer data in real time. It is worth remembering that big manufacturers such as Cadbury and Unilever have absolutely no idea who is buying their products. That data belongs to the retailer and it provides an enormous strategic advantage in the factious negotiations that occur between supplier and store.

When Procter & Gamble bought a stake in online retailer Ocado, it was the opportunity to access this kind of data that motivated the investment. Without it even the biggest, smartest manufacturers are flying blind.

Direct access to consumers also enables a company to build a stronger brand. It is hard to build and protect the brand equity of a consumer good when you are a small packet of powder on a shelf that someone else is ultimately in charge of. But retailers have it much easier. When consumers enter their store they enter a house whose every element can, and is, directly controlled by the retailer.

The people, the setting, the atmosphere, the products, the in-store promotions, the experience - all can be used to build brand to consumers.

The End of Brands as We Know Them?

The store was empty, although a handful of tourists were seen milling around the entrance, looking around in awe, and taking photographs. They smiled politely but shuttled off when one of the well-groomed members of the Armani staff approached them. The 12-storey Armani House, so perfectly situated in the centre of the Ginza district in the heart of Tokyo, reflected the current state of almost every luxury brand you can think of - sleek, stylish and…silent.

Welcome to the epicenter of brand heaven in the aftermath of the global financial meltdown. Consumption of luxury brands - Gucci, Prada and Louis Vuitton - counting for an astounding 12 percent of all sales worldwide. Tokyo is the place where Louis Vuitton's fortunes catapulted into the stratosphere. It's also the city where Gucci decided to open the first Gucci café, and Prada invested in creating their biggest store.

A couple of buildings further down the street, a long queue snaked its way into a store which until recently, would have been completely unacceptable in the Luxury Mecca - a plain, simple H&M store. Next door to that, Zara, and across the road UNIGLO - well known for shamelessly ripping off its wealthy neighbours moments after their latest collections hit the runways in Paris or Milan. A fact that didn't seem to be bothering UNIGLO one bit. Why should it? Their revenue is soaring upwards by 32 percent compared to their wealthy neighbours who are still trying to make sense of their own disappointing seven percent DECREASE. Years ago, when living in Paris, I never failed to be amused as I strolled down Champs Élysées on my way to work every day. At just 8 in the morning, local Parisians would be carrying packed shopping bags emblazoned with logos of every luxury brand from D&G to Chanel, shops that wouldn't open their doors for business much before 10 AM.

Things have changed.