Branding Strategy Insider

Brand Recall and the Mind

Pure logic is no guarantee of a winning argument. Minds tend to be both emotional and rational. Why do people buy what they buy? Why do people act the way they do in the marketplace?

When you ask people why they make a particular purchase, the responses they give are often not very accurate or useful. That may mean they really do know, but they are reluctant to tell you the right reason. More often, they really don’t know precisely what their own motives are.

For when it comes to recall, minds tend to remember things that no longer exist. That’s why recognition of a well-established brand often stays high over a long period, even if advertising support is dropped. It’s all about the power of being first. In the mid-1980s, an awareness study was conducted on blenders. Consumers were asked to recall all the brand names they could. General Electric came out number two—even though General Electric hadn’t made a blender for 20 years.

Sponsored By: +2 Marketing Consultants

Changing Minds in the Marketplace

It’s futile trying to change minds in the marketplace. For example:

*Xerox lost hundreds of millions of dollars trying to convince the market that Xerox machines that didn’t make copies were worth the money. No one would buy their computers. But they still buy their copiers.

*Volkswagen’s share price dropped over 60 points when they tried to convince the market the VW wasn’t just a small, reliable, economical car like the Beetle. No one bought their big, fast cars. They brought back the Beetle and people flocked to buy them.

*Coca-Cola blew both prestige and money in an effort to convince the market they had a better thing than ‘‘the real thing.’’ No one bought their New Coke. But their Classic version sells as well as ever.

When the market makes up its mind about a product, there’s no changing that mind.

As John Kenneth Galbraith once said, ‘‘Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.’’

Sponsored By: +2 Marketing Consultants

The Mind and Purchase Decisions

More often than not, people buy what they think they should have. They’re sort of like sheep, following the flock. Do most people really need a four-wheel-drive vehicle? (No.) If they did, why didn’t they become popular years ago? (Not fashionable.)

The main reason for this kind of behavior is insecurity, a subject about which many scientists have written extensively. If you’ve been around a long time, people trust you more and feel secure in their purchase. This is why heritage is a good differentiator.

Minds are insecure for many reasons. One reason is perceived risk in doing something as basic as making a purchase. Behavioral scientists say there are five forms of perceived risk:

1. Monetary risk. (There’s a chance I could lose money on this.)
2. Functional risk. (Maybe it won’t work, nor do what it’s supposed to do.)
3. Physical risk. (It looks a little dangerous. I could get hurt.)
4. Social risk. (I wonder what my friends will think if I buy this.)
5. Psychological risk. (I might feel guilty or irresponsible if I buy this.)

All this explains why people tend to love underdogs but buy from the perceived leaders. If everyone else is buying it, I should be buying it.

Sponsored By: +2 Marketing Consultants

Beware of Marketing Gurus

Marketing is possibly the most widely misunderstood business topic in the managerial world today. The problem of marketing ignorance stems not from the difficulty of the topic. After all, marketing at its core is just about as simple as it gets. The problem is that to understand what a concept like marketing means is one thing, to actually apply the marketing principle to your day to day business life is an altogether more difficult challenge.

So, in brief. The philosophy of marketing revolves around a single, strikingly obvious idea. That idea is that we find out what people want before we start making and selling it....and yet when push comes to shove, they will continue to completely ignore the voice of the consumer when they actually make strategic decisions.

How can we account for this glaring mismatch of theory and practice?

Many managers seem to mistake market orientation for marketing orientation. Yes, there is a difference. In the former case, managers find out what the consumer thinks about their products and services. In the latter, the manager asks the marketing department what they think and they answer for the market. In doing so they demonstrate the presence of marketing gurus, possibly one of the most pernicious problems in the marketing world.

There are no gurus in marketing. To be a guru suggests you have immense knowledge, knowledge that can answer the strategic questions that a firm encounters. In marketing the last thing we need is a guru who thinks he or she knows what the market wants. The fact that they work for the company producing the product means they are just about the last person on earth who is likely to know how the customer is thinking.

Marketing Warfare Revisited

Marketing is war my friends. By now most of you have figured that out. And most of you are familiar with Marketing Warfare, a book I wrote with my former partner Al Ries on the strategy and tactics that can and should be implemented on the front lines of marketing. With help from Prussian General Karl von Clausewitz we concluded many things about the battlefield marketers face. Today on Branding Strategy Insider, I offer a brief re-cap on some of the greater points that will assist you as you head into the fray...

Defensive Position
Called for when your organization is the clear market leader.

Principles
1. Only the market leader should consider playing defense.
2. The best defensive strategy is the courage to attack yourself.
3. Strong competitive moves should always be blocked.

Key Points
-You strengthen your position by introducing new products or services that obsolete your existing ones.
-It’s better to take business away from yourself than have someone else do it for you.
-Attacking yourself may sacrifice short-term profits, but it has one fundamental benefit. It protects market share, the ultimate weapon in any marketing battle.
-When you own the pie, you should try to increase the size of the pie, rather than of your slice.

Offensive Position
Called for when your organization is # 2 or 3 in the market, and you have the resources to sustain a challenge to the leader.

Principles
1. The main consideration is the strength of the leader’s position.
2. Find a weakness in the leader’s strength and attack at that point.
3. Launch the attack on as narrow a front as possible.

Key Points
-What’s good strategy for the leader is bad strategy for #2, and vice versa.
-“Where absolute superiority is not attainable,” says Clausewitz, “you must produce a relative one at the decisive point by making skilled use of what you have.”
-There’s weakness in strength, if you can find it.

A Counterfeit Brand Quandary

With a swish of fabric, Courtney Love entered the party.

Not just any party - the 26th anniversary of Paris Hilton. Accompanied by her daughter Frances, by most guests' estimation, she looked fabulous in a black mini-dress with white fringed applique and matching fingerless gloves. Photographs were taken, Champagne flowed, celebrities danced, and a good time was had by all.

A few days later at the exclusive Paris headquarters of uber-secretive luxury house Chanel, the phone was ringing. It was one of Chanel's most prized clients, and she was not happy. The woman was one of the 150 women who buy couture from Chanel. This lady was not the usual Chanel buyer who is happy to pay a meagre £2000 for an outfit, however - oh no. This was a real luxury client who had attended the semi-annual fashion shows of Chanel's chief designer Karl Lagerfeld and selected from the runway a unique dress that would later be designed and produced exclusively for her.

Yet the usually demure client was furious: she had seen the dress she had only just selected from the runway in Paris being worn by some random (and entirely inappropriate) US celebrity. Having been promised a one-off piece of French fashion, the client was cancelling her six-figure order. The scandal that Harper's Bazaar later christened 'L'Incident de Chanel' had begun.

Love, it later transpired, had been wearing a copy of the Chanel couture dress. Where Lagerfeld's original was made from eagle feathers, hers was made from marabou. Thanks to the time delay between runway show and delivery of the dress to a couture client, Ms Love had trumped the fashion world with a knock-off.

Branding Debate: Are People Brands?

Back in February we touched on Michael Phelps and celebrity endorsements. The topic brought to light varying opinions on people as brands. Are they? I asked a few colleagues.

Mark Ritson: No
It's a common error to assume that people, countries and cities are all brands. Yes, they all possess symbolic meaning but as I point out in my post so do road signs. The point is that brands are more than just a cluster of meanings. On the consumer side you have to be able to purchase them and own them, on the organisational side you have to be able to control and alter them if you so choose. Neither applies to people.

Take Michael Phelps. Do you own him when you buy a box of cereal with is name on it? Could we reposition Phelp's personality and talents if we decided a strategic review was needed - perhaps into an intense soccer player?

Put it another way. We have an extensive academic body of work on celebrity endorsement in the Journal of Consumer Research for example, starting with the superb work of Grant McCracken. We also have an extensive and empirically verified series of papers on Co-Branding published in journals like the Journal of Brand Management. Even a cursory look at these two literatures confirm that the relationship between two brands, and between a celebrity and a brand, are entirely different. If we were to accept the premise of celebrities as brands we would have to unite these two disparate literatures somehow.

There is a final and most important rationale for rejecting people as brands. To do so would be to commit what Marx called "the commodification of self". When we turn people into brands their humanity is lost. Yes we use people to sell brands, but when we start to use the literature on brands to sell people we forget the essential humanity that sets apart people from things.

A Brand Autopsy

When Thomas Dickins first glimpsed Regent Street, it was little more than a well-appointed residential road.

The young draper from Nottinghamshire had teamed up with William Smith and opened a linen shop on the far busier Oxford Street in 1803. Growth and partnership followed, and by 1856 the store, which had expanded its wares and moved south to number 232 Regent Street, was rebranded as Dickins and Jones.

By then, architect John Nash was transforming Regent Street into the epitome of contemporary Victorian design. Dickins and Jones bustled with upper-class shoppers, who alighted from their carriages to be greeted by white-gloved sales assistants.

Inside, these pioneers of consumer culture spent their growing fortunes on ceramics from China and the latest French fashions. Carriages turned into automobiles, which turned into cars. London shopped, and from its vaunted retail location, Dickins and Jones stood witness to it all.

It all came to an end in 2006. House of Fraser, the owner of the store, was engaged in a major brand consolidation, with its national portfolio of stores set to be divested or mono-branded as House of Fraser.

Of Threats, Boycotts and Brands

In 2007 14 Tesco stores closed their doors following bomb threats. Speculation grew about the motives. An initial suggestion that Tesco was being targeted by religious extremists was immediately rejected by police. Several national newspapers then suggested a link to animal liberation and pointed out that on the day of the threats there was a national day of action against Tesco by several animal rights groups.

While I do not know the identities or motivations of those who made the threats, I can provide some insight into why Tesco was targeted rather than key competitors Sainsbury's or Waitrose. It was almost certainly not down to ethical or religious reasons, but rather a number - specifically, a proportion: 31.3%.

To understand this numerical significance, we have to look back even further. On 29 September 1982 Adam Janus, a 27-year-old postman from Arlington Heights, Illinois, dropped dead unexpectedly. Adam's family gathered to discuss funeral arrangements. His 25-year old brother Stanley and his 19-year-old wife, Theresa, were both suffering from headaches. Stanley found a bottle of Extra Strength Tylenol in Adam's kitchen; within minutes he and Theresa were dead.

Chicago police realised that all three victims had been poisoned. Eventually seven people died in what became known as the 'Tylenol murders'. Investigators concluded that the culprit had visited various stores in Chicago and added cyanide tablets to bottles of Tylenol before returning them to the shelf. Why Tylenol? In 1982 it was the leading pain-relief brand in the US with a 35% market share.

Brands: Measured By Trust

A few years ago I set off with a bunch of friends to follow England's cricket tour of Sri Lanka. The beautiful hill town of Kandy promised to be a spectacular location for the first Test, but it was not the scenery that grabbed our attention when we arrived. Sri Lankan newspapers were warning of an illegal brewing scam, in which bandits were manufacturing their own moonshine, refilling empty bottles of beer and spirits and then reselling it back into regular channels. Unfortunately, the booze was not just illegal - it was dangerous. Several local people had been blinded after drinking it.

Our group faced an unexpected existential crisis. On the one hand, no one fancied the prospect of being rushed to a local hospital and potentially losing their sight.  On the other, five long days of Test cricket without a beer was something we all found hard to contemplate. Two minutes later we set off to the local liquor store. There is a reason the England cricket team's band of fans is called the Barmy Army.

At the store, clearly we wanted to minimise the chances of selecting a potentially lethal brew. Scanning the aisles, however, we saw only unfamiliar brands. Suddenly my eyes rested on the familiar image of a lion staring proudly back at me. I remembered it from a fancy import shop back in England. Lion was the only Sri Lankan beer I had ever drunk before. I knew the brand. If I had to place my trust in a beer this day, it would be that one. In a dangerous jungle of mystery brands, Lion Beer was my totem.

During the first session of play that morning I sat in the stands enjoying my beer and a whole new appreciation for the gift of sight. With the glorious sound of leather on willow in the background and the pleasing sensation of a late-morning beer buzz, I pondered my experience, and began to appreciate where brands derived most of their equity in ancient times.