Favorite Brands

As I will soon graduate with a Masters degree in Integrated Marketing Communication, my job search has now officially started – A common interview question is to name examples of favorite brands. There are so many, but top-of-mind my answer would be Starbucks, Trader Joe's, and Harley Davidson- not so much because I am an evangelist customer of these brands, but because I admire what they stand for and what they have achieved.

Starbucks has redefined the coffee business and shows the value a strong brand can have, turning a commodity such as coffee into a true experience. Along with the notion of the “third place”, the brand has successfully managed to align itself with people’s aspirations to achieve an emotional balance in life. A large part of its loyal customer base cannot imagine a day without Starbucks anymore. The fact that Starbucks became a global powerhouse brand without any advertising at all illustrates that with a great product, word-of-mouth is the most powerful marketing tool. However, in a previous post, I also highlighted my dislike for Starbucks jump on the bandwagon of trying to become everything to everybody.

Trader Joe’s - When coming to the US in September 2008 directly after almost one year in Asia, the average American supermarket represented one of the biggest cultural shocks to me- enormous in size, dozens of products in each category and price promotions everywhere. No matter how supermarkets have looked like in the past, they drifted away from being well differentiated brands towards commodities. What is the difference between Shaw’s, Food Master and Stop & Shop? I have no idea, but a similarity must be that they seem to spend 99% of their promotional budget on attracting the worst customer base imaginable- the cherry pickers who come in there only to go hunting for the special offers of the week. They have trained us to be like that. Abroad,I used to enter my supermarket and buy the brands I have been loyal to ever since, but now my primary attention when choosing a supermarket goes to price and proximity.

In this environment my respect goes to Trader Joe’s. When going there a few months ago for the first time in my life, I figured out how much they are standing out from the average retail jungle. It is price stable, offers a different shopping experience and true brand value. The retail concept is unique, as products do not need to pay for slotting fees or promotions, but only have to pass the taste test, get in and perform. As a result, people are drawn to the great products rather than the price tags. The differences also become obvious when comparing the online presence between supermarkets: Trader Joe’s web site tells a truly unique story; giving an insight into the brand world of the company. Shaw’s homepage, on the other hand, consists to 90% of the latest coupons and saving strategies. Trader Joe’s effort to establish clear points-of-difference in such a market environment is therefore highly exemplary.

Harley Davidson – Even though I would never get a Harley myself, Harley Davidson is one of my favorite brands for two reasons. First of all, Harley has built a powerful brand through a narrow focus- they truly own the word of “big motorcycle” in the mind of the consumer. When the lightweight Japanese bikes or fashion bikes like Ducati arrived in America, Harley ignored them. Most companies would have followed the GM or Ford approach to expand the brand into new, trendy categories in pursuit of short-term growth, while wearing down the brand until it now longer stands for something in the long run.

Secondly, the Harley business concept highlights the value of a loyal customer base for a brand. Like no other company, Harley Davidson succeeded in engaging its customers meaningfully by building a powerful community around its brand - the Harley Owners Group - whose name seems to perfectly incorporate the brand essence (HOG = big motorcycles). As only Harley owners can log in to the site (members.hog.com) and events are organized only for them, the brand offers a strong sense of exclusivity, value and prestige. As a result, Harley owners might be the biggest evangelist consumer base a brand has ever managed to create. The popularity of Harley tattoos and apparel exemplifies how the most loyal customers have been transformed into powerful word-of-mouth machines.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

BMW MINI and Sales Promotion

In the NY Times article “Marshmallows and Public Policy” David Brooks describes a research project about the consequences of instant gratification. Children are offered the option between having one marshmallow immediately or two if they wait for a while first. It was the latter group that performed significantly better in their life later on. The article thus discusses the fundamental role of self-control and delayed gratification for a person’s favorable development and success.

At the same token, it can be argued that these values are of fundamental importance for the victory of any brand- often short-term gains must be sacrificed for long-term viability. While often being evaluated on quick results- often in quarterly reports- maintaining self-control is therefore the biggest challenge of the CMO. This need becomes particularly relevant regarding the concepts of brand extensions as well as sales promotions. I recently worked on a college project about the BMW Mini and would like to apply this concept to this example.

The need to engage in sales promotion remains the biggest threat for the long-term proposition of marketing. Already during introduction the average car brand faces the risk of falling into this trap. There are overlapping categories and hundreds of models- too many to conveniently fit into the mind of a consumer. The two major American car manufacturers- GM and Ford- try to launch every car model imaginable, eliminating the importance of well-differentiated brand in the decision making process. The cluttered environment resembles the dilemma of an average CPG brand in a retail store, resulting in the need to attract the attention of the increasingly price-conscious consumer. In that context, as it turned out, it was the need of instant gratification of GM that led to its decline. More than 55% of Automobile ads in Print were for Sales Promotion during 2008. The consumer is getting used to the rebates and increasingly wouldn’t even consider purchasing a car at full price.

Fortunately, upon its introduction in2001, the Mini could avoid these startup problems. First of all, by opening up a new car category, the consumer did not yet have a precise price frame of reference. More emphasis has been placed on the brand, while the Mini marketing did its best to maintain it like that. And secondly, selling predominantly through its own dealerships provides control as well as the possibility to abstain from any sort of trade oriented sales promotion. The initial sales objectives have been set intentionally low at 20,000 units for the first year, so that sales promotion efforts became superfluous. The company did not want to over saturate the US market and rather establish an aura of exclusivity through scarcity- a dream for all CMOs to live up to their sublime aspiration to delay gratification.

Nevertheless, as a result of the maturing market environment as well as the influence of the recession on new car purchases, the Mini is currently reaching a slowdown of it rapid growth. Sales promotion suddenly becomes a viable option again, due the requirement of defending market share and reaching new markets. In the past, the company had a unique approach: market to the owners, not potential mini buyers, hoping that a strengthened community would itself go out and proselytize others to the brand. However, in these times further incentives to attract nonusers could be essential to keep sales figures up- sales promotion as classical acceleration tool. It is hereby important to not risk any of equity. Mini needs to carefully complement the promotional efforts into its Marketing communication program and brand mantra in order to achieve franchise-building effects. For current drivers and prospects, to strengthen its community and provided incentives, Mini could for instance continue organizing contests and sweepstakes with prices such as a mini road trip through England and France. For prospective buyers, with regard to the economic situation, promoting leasing fares could be powerful to provide incentives. Value adding premiums such as offering a classy British-style navigation system in cars or unexpected service supplements also seem imaginable.

To sum up, with marketing being a long-term proposition, brand managers often are severely challenged to exert delayed gratification in their programs. Ever changing, uncontrollable market environments sometimes require to slightly deviate from their natural stance to practice self-control, but- when exerted with care- even short-term promotional programs can keep the dream of building brand equity alive.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Starbucks move into social media with its Holiday 2.0 campaign

After its nationwide debut in mainstream advertising, Starbuck's move into social media seems like a more promising route to further manifest the brand mantra in the mind of the consumer.


The company offers branded holiday playlists on Pandora that lead into a "All You Need Is Love" CD that is available in its stores for free when making a purchase of $15. Moreover, on a microsite called the “Starbucks Love Project”,
consumers can draw their own Christmas cards, send them to a friend and have it posted in the online gallery. With each card each contributed, Starbucks donates 5ct to a good cause. The whole initiative is supported by interactive online ads.


Not only is the Starbucks initiative a great example of how to create an entire integrated campaign around the web, but has the potential to boost the emotions affiliated with the brand. Starbucks clearly seeks to associate itself and the values of the “third place” with the emotional spirit of the holidays: Love (cards to friends and family), caring (donation to underprivileged) as well as coziness (seasonal music). All this is done subtly but brilliantly, rather than jumping on the bandwagon of using the holiday craze for overt commercial interests. This promotional latency suits the character of the most high-end coffee retailer in America and can itself turn out to be a strong point of difference during the holiday period, when every company in the nation will fight for out money .


Every element of the campaign encompasses and immediate call-to-action, while word-of-mouth will probably be the most valuable measurement index for the brand. And wasn’t Starbucks built on word-of-mouth? Online initiatives like this make it possible to revitalize the brand in a way that is authentic to its true essence. If the initiative drives traffic, the campaign seems likely to create high levels of engagement by energizing its consumers and loading the brand emotionally.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

Obama Branding Strategy - one year after the triumph

Obama's campaign is often compared to the biggest success ever in the history of marketing. First, he was a relatively unknown African American man, younger than all his competitors, with a strange-sounding name. He was campaigning against two major opponents: Hillary Clinton, one of the most well-known woman in America, and John McCain, a well-known war hero and long time, experienced U.S. senator. In the end it didn't matter.

Barack Obama seemed to have the better marketing strategy than either of them. First of all he demostrated clear focus and consistency by ancheroing the concept of 'change' in the minds. And secondly, he managed to energize the base. Not only did the president use major social media in his campaign, like Facebook, Linkedin, Flickr, Myspace and Youtube, but also set up his own interactive community with Change.com. In addition, his campaign team engaged with other social media based communities such as Asianave, Blackplanet.com, Faithbase.com and many more. The campaign team took the time to interact with the social web, encouraging ratings, reviews, and opt-ins for follow up direct marketing information.

With this online engagement, Obama could convey the values of transparency and closeness that are fundamental for a politician. Polls showed that the youth base had been energized by his campaign. Without this word of mouth, grassroots movement, the elections would probably never have been won. The campaign team encouraged peoples’ natural desire to depend on others and engage in conversations for an outcome meaningful to them. In an article of the Washington Post, DNC spokesman Hari Sevugan said "We think that change happens with neighbors talking to neighbors, and these rallies reflect that".

Undoubtedly, president Obama fulfilled the criteria of successfully energizing the base, as it if often referred to in political terms. The campaign was believable, self-reinforcing, and self-spreading. Moreover the basic techniques for connecting with the brand enthusiasts have been met: tapping into the enthusiasm with ratings and reviews, create a community to energize the customers (change.com), and participate and energize online communities of the brand enthusiasts (asianave, black planet etc).

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com

The commoditization of Brands

In discovery of the US airline industry, my respect goes to JetBlue for its attempt to stand out in the jungle of equality. With its credo of being the “fun airline”, reflected not only in the motto of “Happy Jetting”, but also in the 36 direct TV channels, free wireless, and the Customer Bill of Rights, I think there is something we can learn from this company not only in terms of the product itself, but also of how successfully engaging customers might look like.

The airline industry actually drifted away from being having differentiated brands, towards commodities. Whats the difference between Delta, US Airways and American airlines? Having trouble? Well, I can name you a similarity: They all try to squeeze you in like sardines, treat you like cattle and rip the last penny out of your pocket for a little bit of incremental revenue (I recently read that some airlines are considering to charge customers to go to the toilet). Whenever I get on an airplane nowadays, I end up checking my watch every 10 minutes, surprised at how slow time can pass. What happened to the experience? Big respect therefore to Jet Blue for its attempt to reestablish some points of difference to stand out in market like that.

Another example of how entire industries are becoming commoditized is what is going on in the conventional retail world out here. However, when going to Trader Joe recently, I figured out how much they are standing out as well from the industry standards. What’s the difference between Shaw’s, Food Master and Stop & Shop? No idea. A similarity? Maybe that they seem to spend 99% of their promotional budget on attracting the worst customer base imaginable- the cherry pickers who come in there only to go hunting for the special offers of the week. They have trained us to be like that. Or is there another reason a customer would choose one supermarket over another,- (except for the proximity to their houses)? So again, my respect goes to Trader Joes, which managed to really stand out in the retail jungle out there. It is price stable, offers a different shopping experience and true brand value. People are drawn to the great products rather than the price tags. Compare the online presence and that shows everything: Trader joe’s web site tells a truly unique story; giving an insight into the great brand world. Shaw’s homepage -on the other hand- consists to 90% of the latest coupons and saving strategies. Sales promotions remain the most dangerous tactis in the marketing communication portfolio. When not handled with great care, they can destroy a brand that has been built up over a lifetime- in the blink of an eye.

Francesco Wesel
Integrated Marketing Communication
www.francescowesel.com