The Blake Project, the brand consultancy behind Branding Strategy Insider, delivers interactive brand education workshops and keynote speeches designed to align marketers on essential concepts in brand management and empower them to release the full potential of the brands they manage.
Category: Brand Value & Pricing
John B. Watson, a key figure in the development of behaviorism, famously said that effective advertising revolved around three basic emotions: love, fear and rage. (Get the backstory on this here). It’s a nice meme. But is it still accurate?
After all, at the time that Watson set forth his hypothesis, advertising was built largely on a framework of persuasion and repetition and took place on set channels in set formats and within highly structured societal expectations. But as societal rules have relaxed, and marketing has evolved new expressions, has our consideration-set broadened and if so, what does it include now?
Depending on how broadly you interpret Watson’s concepts, they all still apply.
We still buy for reasons of love – loyalty, habit, prestige and attitude are all motivations that help us form powerful bonds with brands. We buy what feels good to us, what we know, what we agree with, what we feel we deserve, what the brands we associate with say about us and when brands express through statement, belief or action things that concur with our worldviews.
We still buy for reasons of fear – risk, danger and prevention all drive us to seek out brands that we believe will help us in a world that, at times, feels threatening and uncertain. We also don’t want to miss out – on a bargain, a discount, a perceived opportunity or a trend. More and more, people actually fear being out of the loop.
We still buy for reasons of rage – outcry, rebellion, justice, a wish for change and an undercurrent of impatience all push us towards different brands in different sectors because we refuse to accept something or we want to disrupt the status quo or we wish to condone a “champion” of what we see as right.
What’s fascinating though is the extent to which online, the upgrade culture and social collectiveness have combined to introduce new, often globally based, motivations that Watson might never have imagined. Today, we don’t just act for ourselves. We act alongside, and with a very powerful awareness of, others.Read More
Graphic Standards Manuals, Brand Guidelines or Brand Standards are a critically important management tool for brand owners to insure their brand identity assets are correctly and consistently reproduced over all media channels.
Developing these documents is a big undertaking in both time and money. Naturally brand owners and managers responsible for insuring their brand assets are faithfully reproduced will insist that their creative services partners (ad agencies, design firms, PR firms and web development firms) take this document seriously.
Recently, a client was expressing frustration over an issue where their in-house designers where stretching the brand standards and guidelines for the sake of style and creative expression of a new marketing campaign. This is appears to be a common occurrence for marketing communication executives and managers charged with maintaining the integrity of their brand identity over time.
As a designer myself for many years, I have some sympathy for both sides of the argument.
Coloring Outside The Lines
As I wrote in an earlier post on Branding Strategy Insider, the discipline of creating visual identities has changed significantly over the past decade. The trend in corporate identity and brand design continues to move to more flexible, adaptable and experiential solutions. No longer can “identity” be a static marker stuck in the lower right hand corner of an ad.
Flexible and stylistically changing visual design is now baked in to contemporary corporate and brand identity programs. An early adopter of this trend was MTV. The iconic letterform of the MTV logo has a constantly changing visual motif allowing each generation to connect with the brand’s unique philosophy and highly emotional promise.
Another example of this trend for experiential identity design is Virgin. Throughout its vast business, the brand’s expression and visual language shifts and changes to suit its expressive needs.
Creative people (naturally) resist staying within the lines of strict visual guidelines. Graphic designers – although well meaning – seem to be the worst offenders. This new generation of creative professionals have a different worldview, as they have grown up in a world were the rules seem to change every minute.Read More
Behavioral economists refer to the decision making process brands use to set a price in the minds of consumers, especially when those buyers are dealing with something that is unfamiliar to them, as “anchoring”. Anchoring provides a reference point from which to perceive and negotiate “worth”. Brands looking to set a high value on what they offer anchor highly; brands looking to position themselves as accessible and everyday do the opposite.
De Beers anchored the value of their rings around “two months’ salary”. The message to purchasers – in this case, men in a jewelry store (perhaps the ultimate social fish out of water) – was that it will hurt but it’s worth it. At the other end of the value scale, when Coca Cola originally positioned their “delicious, refreshing” drink at 5c a glass, they were sending a clear signal to drinkers that Coke was the affordable beverage everyone could enjoy every day. Both messages were on brand, even though they presented vastly different value propositions.
De Beers’ “price” of course takes no reference from the actual cost – how can it, given that two people could have very different salaries? But then, neither for that matter, does Coke’s.
One thing is certain. In this age of ‘fair pricing’, what companies charge is certainly a topic that incites a lot of debate, as the reactions to this article about the cost of making a designer T-shirt prove.
I’ve found brands often look to reference their pricing on what they think a product should be worth (in their eyes) rather than how valuable it might be to a consumer and more particularly, how its anchor price compares with the other anchors that consumers see around them, and draw reference from, every day.
The price you anchor from should benchmark the value you propose to deliver. If you propose to deliver high value, do as De Beers does, and anchor highly. Set an anchor that articulates a clear expectation for what consumers can look forward to. Brands tend to focus on the tangible costs when they look to set such a value, but in today’s much more experiential economy, intangibles are a critical element of the value equation. With that in mind, here are my nine value influencers.Read More
According to mainstream marketing theory, price is decided by supply and demand and fluctuates accordingly. In today’s market however, pricing is increasingly about supply and desire. The rules of volatility have changed. The upgrade culture, shorter product lifetimes and highly efficient distribution chains have flattened the gaps between supply and demand in so many sectors, but interestingly increased the effects of seasonality. However, the actual nature of that seasonality has changed.
Pricing now has got nothing to do with how good a product or service is, what it does, what it doesn’t do or where it came from or how many of them there are. Pricing is decided by how much people want something, and the degree to which it is novel and available.
Commoditization, it follows, is also driven not by “market” forces but by desirability forces. Brands that fail to attract a strong price have lost their desirability or that desirability is fading. People then want to pay less not because the product is necessarily worth less, but because consumers want it less, which of course is why they perceive it as less valuable.
Getting the balance right between desire and price therefore is critical. According to this BrandZ survey from a couple of years back, on average only 7% of consumers buy on price alone globally, down from 20 percent ten years ago. By contrast, 81% regard brand as an important purchase driver. In other words, brand has increased in importance relative to other purchase drivers such as price, location, convenience and habit.
Recognizing that, competitive brands need to adjust their pricing based on changing levels of desire – meaning brands should monitor how much consumers want them and use this as an effective benchmark for pricing. Striking the right balance between these two factors is critical. Brands that are too expensive for the level of desire they deliver, as I have already observed, risk losing market share. Conversely, those that don’t charge enough for the desirability they deliver risk leaving money on the table.
The way I see it, there are three ways to strategize an effective desirability story that keeps pricing higher than the default market value:Read More
This article in Time on how to get the most out of Apple is a reminder that there is a noticeable difference psychologically between a brand that discounts (even if it’s only occasionally) and a discount brand. Apple does discount – but for selected parts of its range or for specific reasons: change-over on a model, for example. The most important thing is that they don’t give that impression.
Apple’s approach is to treat price as a reliable indicator of value. By not overtly or uniformly discounting, they maintain the value of the brand by making products that excite customers and they continue to charge for them at that level of value until there is a good reason not to do so. In other words, Apple’s ethos is never discount an Apple product while people are most excited about it – no matter whether that is days or years after it was first released.
But while Apple have worked hard to position themselves as a full-price, full value brand, that’s not always the case. As the article points out, “With the exception of the iPhone and the iPad, Apple products are typically discounted within eight days of first hitting the market …” Surprised? I was. But “As for the most in-demand Apple products—iPad and iPhone—there doesn’t seem to be much financial incentive to delay your gratification. The price for either is unlikely to change by waiting a few days, or even a few months … discounts have basically been non-existent until it’s time for Apple to introduce the latest new-new model.”
Even when Apple discounts, the wider motivation seems to be to give customers entry points to the Apple universe. By lowering the price of a laptop, they invite customers into their world, knowing that they will then be pre-disposed to go Apple all the way. At least that’s my theory, and it’s one I think extends to the pricing of their new operating system. Lower the barriers to entry to get people involved, but retain the pricing and the aspiration on the iconic products that people continue to be excited by and around which the world of Apple pivots.
Such an approach seems worlds away from the volume-driven approach taken by discount brands that advertise serial sales to drive up their top line. But as I’ve said many times before, there’s nothing wrong with that model if you’ve built your business and your brand around it. Smart discount brands rely on a very different perception of price though than a brand like Apple. Whereas Apple sees price as proof of value, astute discount brands treat price as a pain point. And they rely on easing perceived pain in order to generate interest. They rely on you paying less in one area but more in others to help balance the load. Just like with Apple, it’s a feel-good balancing act. The difference is that one brand makes itself known for discounting and the other doesn’t.Read More