MITSloanBranding

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15.846 Final Project: Rebranding Cleveland, OH

Cleveland, Ohio has a branding problem on it’s hands: despite having world-class attractions, dining, and entertainment, Cleveland remains seen as a down-on-it’s luck town whose best days are far, far behind them.  While those in section B of 14.846 will be lucky enough to hear our entire presentation, the communications strategy portion can be found here.

4+1 P’s: Product, Price, Promotion, Placement, Packaging

Product: Cleveland’s product is not the city or area by itself: Rather, it’s an experience encompassing the many, many things to do, see, hear, and eat in Cleveland.  The Rock & Roll Hall of Fame is perhaps its most famous attraction.  The nearby Cedar Point amusement park has been voted the best amusement park in the world for 16 consecutive years.  The Cleveland Orchestra is world-renowned and is one of five American orchestras referred to as “The Big 5.”  Cleveland also has a thriving food scene - perfect for those who are hungry after a day on the links at one of the area’s fantastic golf courses.  Lastly, the area is home to several professional sports teams including the Cleveland Indians, managed by World Series winner Terry Francona.  For those interested in a more permanent stay in Cleveland, the Cleveland Clinic is one of the best healthcare facilities in the world - patients regularly fly in to visit leading doctors in all medical fields.  Cleveland’s wealth of experiences make up the Product portion of our communication strategy.

Price: The cost of living in the Midwestern United States is generally significantly cheaper than the coasts.  Cleveland is no exception: It’s 14% cheaper to live in or visit Cleveland than the rest of the US, and 71!! percent cheaper than New York City.  Below is a cost of living index comparing Cleveland to other major US cities, with the national average set to 100:

United States: 100

Cleveland: 84

New York City: 148

Boston: 132

Chicago: 104

Los Angeles: 127

Portland, OR: 107

Kansas City: 90

Tampa, FL: 92

Promotion: As with essentially every promotional campaign today, Cleveland’s should be multi-channel.  Social media accounts are a must.  Social media tools like Instagram can be used to promote Cleveland via nice photos of the area.  The explosion of the blogosphere and travel blogging should also be used, including inviting popular travel bloggers to spend a week in the city to highlight its many attractions.  Video is also can be distributed both on television and on the internet, and can also showcase the area’s many attractions.  Lastly, Cleveland should consider some tongue-in-cheek promotional tactics like those we have seen with Domino’s Pizza.  Domino’s has embraced it’s not-so-stellar past and acknowledged the poor quality of its food and product flops like Pizza Cookies, while reinforcing their commitment to changing recipes and using quality ingredients.  Embracing things like the Hastily Made Cleveland Tourism Video helps strengthen the compare/contrast elements necessary to remove Cleveland from its past.

Placement:

What are the distribution points to a Cleveland vacation?  The travel industry has become increasingly fragmented and DIY vs. the old model of having a travel agent arrange a vacation.  For many people planning a vacation travel website TripAdvisor, travel blogs, and the travel section in newspapers are sources of ideas and inspiration.  Featuring the product in these channels, coupled with ease of access to the actual booking tools on websites like Kayak or Orbitz are the main channels Cleveland should focus on for actually booking a trip to the city.  

Packaging:

Developing the packaging for a city isn’t unlike packaging for a product in the traditional sense.  Packaging helps get your product noticed, and can create great experiences for a customer.  For a city, it can be more difficult.  Repackaging a city like Cleveland would require investment in public goods like making sure Lake Erie is clean, cleaning the streets, planting flowers, new construction, and ensuring a generally pleasant and enticing exterior for the city.

What’s under the hood?

I’m originally from Texas, but after high school, I moved 1,500 miles away to attend college at Rutgers University in New Brunswick, NJ. When I moved off campus my sophomore year, I shipped my car up so that I could have a little more freedom. I love adventures, and it was great being able to explore areas of New Jersey, New York, or Pennsylvania that I had never been to before. As is typical with cars, I needed some routine maintenance and decided to head to the car shop down the street for an oil change and to make sure everything looked ok. I think that is probably exactly what I said to the employee sitting at the desk, “I need an oil change and can you just take a look and make sure everything looks ok?” Not one hour later, the mechanic working on my car brought me back and listed out every single thing that was wrong with my car. I can’t list the problems here because, honestly, I didn’t understand what he said in the first place, and he knew it. What was supposed to be a $45 oil change soon turned into $750 worth of maintenance and repairs that had to be done right away. I immediately called my dad, went through the list with him, and eventually just gave the mechanic my phone so that he and my dad could deal with the car situation. The picture below is not me, but it’s probably a pretty good representation of what I looked like when I called my dad. 

I am lucky I have my dad and can call him to ask for advice when I have absolutely no idea what people are talking about. I am not good with cars and I know it, but I also know that I can sometimes see a mechanic’s eyes flash dollar signs when I walk through the door. I am definitely not saying that mechanics are dishonest people by any means, but I do understand that it can be a little easier to sell me on maintenance when it may not be absolutely necessary because 1. I haven’t taken the time to learn about cars and 2. I am influenced by the bad things that could happen if I don’t have the repairs done, like getting stuck on the side of a highway. 

Intel has taken a similar approach when it comes to selling their microprocessors. Through consumer surveys and market research, the company realized that consumers did not know or understand what was under the “hood” of the desktop. As long as the computer worked, they were happy as could be. But through their Intel Inside Campaign, the company was able to influence their customers and have them believe that they needed the latest and greatest processor. I’m sure there were more than a few conversations that went something like, "The processor you have right now is old and needs to be replaced, but don’t worry, we have the brand new [insert model here] which is the most advanced processor on the market and twice as fast as the one you have here.” Consumers didn’t always know better, so they had to trust the experts. It’s really a genius campaign that has been hugely successful for the company. It just makes me wonder how many transactions occurred and how much money was spent when it was really unnecessary at the time. 

Inspiration from unlikely places.

In January of my junior year of undergrad I signed the infamous ‘dotted line’ pledging the next 5 years of my life to the US Navy’s elite Submarine Force.  My reasons were largely altruistic. I felt compelled to give back to the nation that had provided me so much: a stable government, freedom of speech, education, infrastructure and the ability to dream big.  Fast forward nearly 6 years, and I was at a crossroad.  Stressed beyond belief, constantly away from my family, and tired of being trapped in the bowels of a 300 foot steel tube for hundreds of days of my life, I decided that I had fulfilled my basic desire to serve my country and it was time to move my career to the real world.  But what could I ever do that would be remotely comparable to my contributions to our national security or have as much impact on my friends and coworkers?  I soul searched to try to think of some way that I could still serve the greater good outside of the military, but was coming up short.

Then I read a book.  “Let My People Go Surfing,” it was called, written by Yvon Chouinard, Founder of the outdoor company Patagonia, Yvon talked at length about how the motivation of his company was to make the world better through business by leveraging buying power to make his supply chains more sustainable, putting his people first, and promoting and advancing environmental activism.  I learned that public service can not only exist but can thrive outside of what I considered to be ‘public service proper.’

My story, I’m sure, is not exactly what the Patagonia marketing team had in mind, but Yvon’s message resonated: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” Motivated at least in part by Yvon’s tale I submitted my letter of resignation as a commissioned officer of the United States Navy, and began a trek toward business by accepting an offer to MIT Sloan.  I was stoked. Not only would I be able to settle my life and enjoy sunlight for more than 3 days at a time, but I would be afforded thousands of opportunities to serve others.

Fast forward to the present.  Finishing my first year of my MBA, my eyes have certainly been opened beyond the lesson’s of Yvon’s book.  But, on the business side of things, I am now a devoted Patagonia customer.  Transitioning from sunny Hawaii back to Boston’s snowiest winter called for a refresh of some very worn and outdated ski wear; Patagonia was the first outerwear company that came to mind.  Their view on the world and what it means to be a big player in the business environment is in line with my own, so I purchased their products.  It was that simple.  Independent of that, Patagonia’s image has serious badge value that overlaps with how we identify ourselves as Sloanies.  Principled Innovation.  Others Before Self.  Sustainable Growth.  

The best part about the Patagonia image is that the marketing team carved it out of promoting who they are at their cores- the beliefs and ideals and culture and personalities of their company.  This has permeated through their mild marketing efforts.  Although they products are expensive, I believe I will always be a loyal Patagonia supporter.

Intel not inside

In the 90s Intel did an exceptional job combining technological leadership with a branding message consumers understood, valued, and wanted to buy into. Their branding strategy made regular people as well as IT experts feel the urge to upgrade their computers whenever a new generation of CPUs came out.

The key to success appears to have been the virtuous circle of making the most money by being the market leader, being ahead of everyone else in technology by investing more in R&D, and making consumers believe they had to have the latest Intel CPU in their PC.

• Should the company extend the “Intel Inside” branding campaign to other non-PC categories such as cell phones and PDAs?

At the point of the case (2002) it is already very clear that mobile device CPUs will overtake the number of computer CPUs shipped within a very much foreseeable future. To stay relevant Intel should definitely extend its “Intel Inside” branding to smartphones.

BUT! They cannot do it yet!

First they need to ensure that the branded phones will preserve what their brand stands for: Leadership in quality and technology

Intel at this point has more cash and more engineers than any competitor in the mobile CPU space. They should use that to double down on creating the best mobile CPU the world has ever seen and recreate the same leadership story they had in the PC industry during the 90s.

Once they have done that they should move on branding phones with “Intel Inside”.

Fast forward to 2015 and you can see how they obviously made the wrong choices in 2002 and beyond:

Today there are phones branded with “Intel inside”. And, put simply, those phones suck and they are phones nobody cares about. Have you ever heard of the Lenovo K900, Etisalat E-20, or ASUS ZenFone? I don’t think so. And one thing is for sure, they are no Samsung Galaxy S6… Thus they don’t help Intel making anybody care about having “Intel Inside” any phone or tablet out there.

In the long run Intel’s total failure in the mobile market may threaten its consumer brand entirely as consumers buy fewer and fewer PCs and start associating Intel with ancient technology.

Case: Burberry

Speaking of heritage. Still at it almost two decades later: Burberry Creative Director Christopher Bailey, photographer Mario Testino (who photographed Will and Kate’s engagement…can’t get more “British + heritage” than that), and longtime English model Kate Moss. With the addition of English new superstar Cara Delevingne (11.3 million followers on Instagram). 

This quote, at the end of the case, struck a chord:

“Everyone is a competitor now. Even Target is a competitor. People shop everywhere; high income people shop at discount warehouses and middle-income people shop at luxury retailers.”

A few months ago, I started primary market research for Bleums, and quickly noted that willingness to pay is not determined by a higher income bracket. Especially in NYC, where people are willing to wear Prada (or, Burberry) to save on cost of living in a rental apartment far far away from the island of Manhattan; it is no longer so easy to determine the appropriate market segment. Our persona for Bleums could be the 35+ year old female with a personal income of at least 150K, who beaches in Turks & Caicos and brunches at The Modern. But, it could just as easily be the 25-year-old who aspires to be the next Eva Chen, and invests in fancy floral gifts to build relationships. And who’s to say the former or latter can’t pick up bodega flowers, Whole Foods flowers, or flowers from a competitor with bottom of the barrel prices, to gift to others? Is there a stigma associated with gifting lower priced items if there’s value? Are luxury floral gifts still of value in a competitive landscape of cheaper options? Finding a target segment does not prove to be so easy after all.

Burberry, in smart fashion, notes this and has positioned the brand for several segments. Burberry’s head of menswear explains, “We’re very cross-generational. We want to appeal to the young, 25-year-old guy who’s on his first job - the guy who wants to wear something really hot, but we also want to appeal to a 60-year-old investment banker - the guy who wants great quality and a modern, classic look.“ Rather than pinpointing one beachhead, should Bleums do the same? Could we have cross generational appeal in product, packaging, and placement; cross gender appeal in shopping experience; and cross income appeal in price (low to high)? We have to consider the competition, and strategize on 2nd mover advantage, as a west coast VC-backed flower company segues into the NYC market next month. But we also have to position the brand specifically, and create a compelling value proposition, similar to how Burberry promoted “accessible luxury.” 

Quickly, in the news, Burberry’s recent misstep in China: http://blogs.wsj.com/chinarealtime/2015/01/20/what-the-fu-backlash-for-burberry-over-chinese-scarf-design/

Singapore Airlines: Headwinds from the Middle East

The airline industry is fiercely competitive. Price competition is intense, fixed costs are high, and new carriers from Asia and the Middle East are emerging regularly (some of whom are heavily subsidized by wealthy states). It’s not surprising that there have been a string of high profile bankruptcies in the last decade, including leading carriers such as American Airlines, Delta, US Airways and Air Canada.

Singapore Airlines’ success

Remarkably, Singapore Airlines (SIA) has managed not only to survive, but to thrive in this cutthroat environment. Singapore has profited by building and maintaining a brand that is synonymous with exceptional customer service. Its culture of exceptional service, together with a commitment to maintaining the youngest fleet of planes in the sky, enabled SIA to differentiate its product, charge a premium price, and create customer loyalty in what was (and is) largely a commoditized market. SIA’s iconic “Singapore Girl” ads helped to cultivate an image of style and sophistication for the airline that was consistent with its premium in-flight experience.

SIA benefited from its focus on long-haul flights, where travelers were more willing to pay a premium for the superior service, in-flight innovations, and new planes that Singapore offered. Singapore was especially successful in attracting premium business travelers, a lucrative segment that could often account for 50% of the revenue of a given flight.

Challenges from the Middle East

However, Singapore Airlines’ success did not go unnoticed and it now faces a real threat from emerging Middle Eastern carriers, many of whom have sought to establish a premium brand by replicating two of the pillars of Singapore’s successful model: superior in-flight service and a modern fleet of planes.

In terms of in-flight service, Middle Eastern carriers are looking to Singapore Airlines as a model of best practice. For example, Emirates has launched the Emirates Aviation College in Dubai and now provides its cabin crew members with seven weeks of in-depth training. This initiative appears to be modeled similarly to Singapore’s Service Quality Center. Emirates has also sought to follow SIA’s lead of making their flight attendants a highly visible and essential element of their brand image, similar to the “Singapore Girl” campaigns.

Emirates flight attendants presenting winners’ medals at the 2014 FIFA World Cup

Middle Eastern carriers are also gaining ground in other elements of their in-flight offerings, such as product innovation. For example, although a recent Flightfox survey ranked Singapore Suites as the #1 first class product, the first class offerings of Emirates, Etihad and Qatar were close behind at #3, #4 and #7 respectively (see https://flightfox.com/tradecraft/best-first-class).

Middle Eastern carriers also possess some of the youngest fleets in the sky. While Singapore used to have the youngest fleet in the industry (6 years in 2001), this has now stretched to 7.7 years, while Qatar’s fleet has an average age of only 5.4 years.

Prepared using data from airfleets.net.

Going forward, how should Singapore respond to the threat posed by challengers from the Middle East? It is clear that simply having the newest planes, the most comfortable seats and the finest French Champagne will not be enough. In my opinion, Singapore’s key source of differentiation and competitive advantage will be its people and its culture of exceptional customer service. Singapore Airlines’ “software” - its service culture reinforced through recruitment, training and incentives - sets it apart and is far more difficult to replicate than other elements of its strategy. Continuing to foster a culture of service excellence, particularly through its rigorous selection and training programs, should help to ensure that Singapore remains the preferred brand of discerning travelers in the future. 

Why the MIT Sloan Brand Remains Weak

To be honest I’d never heard of MIT Sloan until a year before I applied. I’d heard of HBS, Stanford, and Wharton, I’d even heard of Tuck, Kellogg, Booth, and Darden, but I didn’t know MIT had a business school. This is odd, I worked in investment banking in NYC, had gone to college in MA, and studied for the GMAT. However, despite all this I had either never heard of Sloan or I heard of it but didn’t remember it despite the fact that I am part of the “in group” they want to reach. 

In branding, if you want to create a luxury or aspirational brand it is important that existing and potential customers know what you stand for and ascribe embodied meaning to your brand. One key way of creating embodied values is the use of myth making. These myths must be consistent with the values of your brand and must be felt and lived by people inside and outside the company. The second is to have a brand strategy that is simple enough that people know exactly what you stand for and what makes you different from other options. If customers don’t know why you’re different they are unlikely to ascribe a premium to your product.

MIT Sloan is a fantastic example of bad branding because we don’t create myths and our message is vague and muddled. First, myths: exactly what is the relationship to Alfed P. Sloan and our school? I’ve gotten different answers from different people over my two years here? Beyond founding myths, in the popular press I’ve never come across stories about unique things happening at Sloan that later went on to impact society in the way you read about startups coming our of garages or MIT undergrads assembling cars on the dome. 

The second failure is that we don’t have have a crisp and clearly articulated message around what makes us different or special. If I look at the admissions website I don’t really know what we stand for or how we are any different than any other top business school. After 3 paragraphs saying we have a great community (don’t all business schools?), there is next a section on “personalized curriculum” (great I can get that on courersa), and it ends with “ A Realm of Possibility, a World of Opportunity” (what does that even mean?). You can’t be all things to all people - that is a recipe for mediocrity and obscurity.

Ultimately Sloan’s official marketing materials didn’t convince me to come to here. I came to because I did the extra work of talking to alumni and current students, visited classes, and went to a conference. These experiences with people helped me discover how special Sloan is. I wish that we could create a brand strategy that could also communicate that to the broader world who will not be as lucky or have as much time as I did to do that in person research. Ultimately, it would make all of our degrees worth more. However, that won’t happen until the school takes a more active role in creating mythology consistent with our culture, and highlighting in a concise but memorable way what actually makes us better than any other business school out there.

Forcing survey participation: Good research methodology?

As part of our branding course 5% of our grade is tied to participating in 4 research surveys. We aren’t told exactly what the research is about or who is conducting it. 

It was a long survey and a pretty frustrating experience. Halfway through the survey I started putting in random answers to get through it as quickly as I could. I found myself wondering:

a)  Whether this contributed meaningfully to research, given the way I went through it

b) What educational benefit I had gained from this, and 

c) Whether it was ethically correct to force students to participate in someone else’s research by linking it to their grades

I wrote to the TA asking what the point of the exercise was, and he responded about the benefits of the exercise with the three points summarized below:

1. It allows us to experience what it’s like to participate in experimental studies

2. It gives us a chance to see certain experimental techniques

3. It contributes to real research

However, I remain unconvinced that this was a productive use of my time as an MBA student.

youtube

(via https://www.youtube.com/watch?v=bfAzi6D5FpM)

Reading about Better World Books, was eerily familiar. Because Better World Books is a social venture and mission driven, the company faces some of the same challenges that non-profits face when trying to invest in scale. Last spring, as part of 15.768 Management of Services, my team and I did research on The Red Cross, and how they allocate their funds toward their operations. What we found was that the way in which we tend to measure the efficacy of charitable organization, namely by asking, “what percentage of my donation goes to overhead?” actively restricts the ability of these companies to invest in scale, and make the type of impact we want and expect from them.

Dan Pallotta, in his TED talk The Way We Think About Charity is Dead Wrongdescribes this challenge in detail above.

Better World Books must face the same constraints: (1) compensation, (2) advertising/marketing, (3) fear of risk, (4) concern about time, and (5) fear of profit. They have to consider carefully what percentage they give to their non-profit partners, to continue fulfilling their social mission, but also stay in business. They have to figure out how to win over investors while acknowledging a lower return because of their mission. They want to grow, but they have to figure out how much to invest into the donation pipeline as compared to the more “commercial” pipelines of new books and eBooks. And they have to figure out what roles their competitors play in all of this.

Lastly, and probably most importantly for this class, how do they message the decisions that they make about all of these strategic choices? And, how will that impact how they are perceived by their non-profit partners, their investors, and their customers?

Has the Burberry Check Finally Made a Comeback?

For years the Burberry check was a mark of wealth and a truly elegant taste, with the beige scarf considered a useful accessory that could make any outfit.  Retailing at £315 (US $450), it was a wardrobe item that was rarely seen on people without a few zeros in their bank account.

But in the late 1990s the scarf was adopted by the Brit Pop clan, worn by Liam Gallagher, Robbie Williams and Nicole Appleton and soon became a status stamp for the cool kids. 

Too quickly the brand became a victim of its own success. Label-conscious football hooligans started to wear the distinctive check. There was more bad news for Burberry, when pubs and clubs across the UK began to ban customers who was dressed in the label.

Burberry might have been appalled, but worse was to come. Their distinctive beige check, once associated with A-listers, became the uniform of a different social group: the so-called Chav. For many years the popular Burberry check became tainted by its associations with chavs.  

As counterfeit Burberry check products flooded the market, the target consumers did not want to be seen in those. They wanted to dissociate themselves from people who did bad stuff. The growing popularity of Burberry among non-target customers put at stake the reputation of the luxury brand.

Burberry started to fight back. The brand started by removing the signature check from most of their items in an effort to distance themselves from customers who might give them a bad name.  

The plan worked and slowly (it took almost 10 years) the patterned scarf started to re-emerge as a popular accessory among A-List celebrities. A-Listers including Ian Somerhalder, Gwen Stefani, Blake Lively, Rex Liam Payne, Cara Delevingne, and Adele were seen wearing the infamous print in 2014.  

Female customers take a look at the stars (Naomi Campbell and Kate Hudson) who are making the Burberry check cool again in 2015.

My Burberry Experience

I used to be Burberry’s target customer in the early 2000s. But in 2007-2008 I stopped wearing Burberry signature check clothes for obvious reasons. The counterfeit Burberry check products made in China flooded the Russian market. Girls with no money and taste began purchasing imitation or fake goods of famous brands. For some reasons Burberry was and still is the most counterfeited brand in Russia. For me, Burberry became associated with a downmarket image. Unfortunately, Russian women’s mass obsession with the Burberry check stuff (scarves, bags and umbrellas) hasn’t become less as time passes.

I still have less conspicuous Burberry stuff: my Burberry sunglasses and my Burberry wrist watch. But my Burberry scarf is not my wardrobe item anymore. My dog, however, doesn’t mind wearing his Burberry check outfit. The reputation of the most trendy dog in the neighborhood flatters his vanity and … mine, too. He seems to enjoy being called Mr Burberry or Gorgeous Burberry Dog when walking down Boston’s snowy streets in his warm outfit.  


P. S. Over the past decade Burberry revived its brand by repositioning, updating the product line, expanding the brand portfolio, and launching new ad campaigns. Furthermore, Burberry still has its tangible asset – the iconic plaid known all over the world as the Burberry check.

Studies on sustained, profitable growth

I found the HBR article, “Growth Outside the Core,” to be particularly relevant to today’s case on Intel.  The article describes how one brand, Nike, was successfully able to expand its brand into new product categories- not just once, but multiple times over the history of the company’s existence.  Nike began simply as an athletic footwear company but has expanded not only across sports (golf, tennis, etc.) but also across products (clothing, sports equipment, etc).  According to the article, Nike has a very systematic approach to expansion:

  1. Become a leader in footwear (their core business) in the target market
  2. Launch a clothing line endorsed by a top athlete in the target market
  3. Establish new distribution channels and forge relationships with new suppliers
  4. Feed higher margin products into the pipeline

Nike as well as other companies who exhibit sustained, profitable growth have two distinct patterns: 1) Pushing out the boundaries of its core business into an adjacent space and 2) developing a formula for expanding those boundaries in predictable, repeatable ways.  Finally, the article talks about the power of being disciplined as a way to ensure success with expansion.  It is not about chasing every opportunity, but rather the right opportunities – and this is assessed by doing extensive research into the target market, the current players and the target customers’ needs and perspectives.

Given this framework and looking at Intel’s history and actions to date, I think Intel is well poised to expand into adjacent product categories like phones and PDAs.  Intel resembles Nike’s position in many ways: first, the company is certainly a leader in micro-processing space; second, Intel has “endorsed” itself by partnering with big brand name OEMs such as Dell and IBM.  Currently, the market sees Intel not only as the leader for chips, but also as a high quality product that is used and trusted by many strong technology brands.  Third, like Nike, Intel has begun to forge new relationship with suppliers in its target market including companies such as Motorola.  Finally, Intel has initiated the research process of the cell phone and PDA markets.  What we know Intel does well is conducting extensive and in-depth market research to really understand what is driving its customers.  It is likely that Intel will apply this same level of diligence to any new market it attempts to enter, which, as we know from the HBR article, is a key component of success.  While the first product expansion outside of its core business may not be easy for Intel, as they continue to repeat the process and advance down the learning curve, I think they will ultimately become market leaders in each market they enter.

Source: https://hbr.org/2003/12/growth-outside-the-core

Who is in your “Circle of Trust”?

Silverpop, an IBM Company, researched the relationship between brands and their consumers, highlighting that globally, “consumers only tend to have a limited number of brands who they always open email correspondence from.” Siilverpop’s analysis of 4,000 consumers from Germany, the U.K. and the U.S. show that consumers have this relationship on average with around 4.5 brands, who are in their “Circle of Trust.”  

The study shows how trust is a major factor that can explain why some emails are opened, while others are deleted.  This got me to think about which brands I consider my best friends, whose e-mail I must click on.  Looking through my inbox and trash folder, it would appear I need more friends.  Don’t get me wrong, I’m getting plenty of e-mails from Amazon to CVS to Orbitz, Neiman Marcus to Target to Uniqlo.  It is just that none of these brands compel me to open their e-mail.  Perhaps their biggest success is that I haven’t unsubscribed!

Most of these brands, unlike KFC’s twitter, does a pretty good job of spacing out correspondence and varying content: calendar of events, coupons, new products, sales, etc.  None seem to be committing digital marketing faux pas, but none make me feel like I’m missing anything by depositing them in the trash.  

In class we discussed how difficult it is for luxury brands to figure out the digital space, but it is interesting to note that e-mails from names in luxury fashion are least likely to end up unceremoniously in my trash folder.  There is a much higher chance that I would keep those e-mails….maybe someday I’ll want to check out that Spring collection, I will have time to watch that fashion show, or I can get some design ideas from their e-mails.  Is it the scarcity or the halo effect of the brand?  They may not illicit a must-read reaction, but I’ll certainly keep them around because it may be handy.  In the world of digital marketing that may already be a win.  

Silverpop Whitepaper “Are You a Best Friend Brand?”

The Power of Social Media

Search #myMITsloan and you will witness the exponential returns to the investment of a few school-spirited Sloanies. For the past year or so, MIT Sloan has been promoting this hashtag to connect Sloanies, future Sloanies and those interested, around the world. This past weekend was AdMIT weekend, a celebration for the admitted class of 2017, and the perfect time to promote our hashtag. Capitalizing on business students’ FOMO and Sloanie’s love for their school, the admissions office teamed up with current and prospective students to tweet, instagram and facebook all weekend long. 

I believe last weekend was the tipping point for the hashtag, as other departments in the school are now looking to get in on the action, and even the EMBAs have joined in on the fun.

The campaign worked because it was genuine, and appealed to the human element of marketing by highlighting events that students were hoping to attend, including pictures and quotes from friends, professors and faculty in the community, and sharing with prospective students what Sloan is all about.

On the flip-side, witness the sheer power of social media in destroying a brand. Search #mcDstories and you will witness a #socialmediafail. 

A social media campaign gone awry, McDonald’s had clearly been trying to embrace the human element of marketing by developing direct relationships with customers. Consumers dramatized their distaste for the brand, morphing the experiment into a viral nightmare powered by the proletariat (read: rapidly multiplying word of mouth marketing). 

Who needs carrots when the sticks are so delectable?

I was surprised to read about Nestlé’s failed attempt to introduce unusual flavours in the UK. That was definitely not what characterized my experience with KitKat growing up in Asia. Whenever I travel to Japan, I always hunt around for the latest and most innovative flavours to bring home for my friends.

With my stomach rumbling at the thought of KitKats, my mind is drawn to another favourite snack I have not had in a long time, Pretz and Pocky. Like KitKats, Pretz and Pocky offer many mouthwatering and daring flavours, and to me the brand represents a delightful, creative treat whose quality and deliciousness is consistently guaranteed.

It is fascinating to note the usage of brands and subbrands behind the creaction of Pocky and Pretz. Savoury Pretz was already a popular item when the market was ripe for the introduction of sweet Pretz. Instead of introducing the sweet version under the same name, the creators of Pocky decided to launch it as a new brand. This is the development of a new brand has been wildly successful and with targeting marketing, Pocky has become a steady staple for kids and adults alike.

Perceptions of a brand are definitely segmented across cultures, as illustrated by the case of unusual KitKat flavours. Furthermore, KitKat and Pretz are both prime examples of co-ownership of a brand. The offering of different flavours is definitely driven by demand of Asian consumers of variety and pursuit of the next new thing.

Changing Names to Change with the Times

Burberry was able to transform itself at the turn of the millennium in order to recapture the brand power that it had exhibited in the post-World War II era. This transformation occurred through incredible management and strong leadership which provided a direction, strategy, and clear vision for the company. The brand turned around in less than five years. Key drivers for this change included slashing SKUs to less than a quarter of what they were, exhibiting more control over licensed products, and repositioning the entire brand as ‘accessible luxury’ – an underserved and rapidly growing market. Burberry’s incredible success and turnaround show the potential of a strong vision and rebranding.

In addition to the three principle drivers for the change, Burberry also changed its name from Burberry’s. This simplification, along with running advertising campaigns with supermodels Kate Moss and Stella Tennant, rejuvenated the brand and aided in aligning Burberry with younger consumers. How big of a role did this name change play, and what are other examples of brands changing names?

Below are three companies that changed their names (relatively) recently. Can you identify the old identity of any of these?

Altria was previously named Philip Morris Companies. Needless to say, the modern-era pushback against smoking has caused the company to shift and rename to distance itself from its past image.

Verizon came from a merger of Bell Atlantic (one of the Baby Bells) and GTE. The association with the Bell name within the telecom industry always brings about concerns of monopolies, and a fresh new name can help create a new and exciting image.

Academi was previously Blackwater and XE. This private security service contractor changed names many times to distance itself from prior legal battles that created largely negative publicity.

Sometimes, companies try to reposition themselves to a perceived market need. In doing so, they may create a sub-brand or an endorsed brand in order to capture a new market segment. 

This can fail spectacularly:

Or not (this was before the transition to becoming mobile-focused):

Changing names isn’t something that companies do very frequently, but the above examples highlight some cases in which renaming has had positive effects. It seems that in many cases, any negative publicity or associations can simply be washed away with a simple name change and re-brand. Most consumers may simply not be aware or remember the transition. It would be interesting to see the impacts of name changes within different types of industries (B2B vs B2C).

Of Truffles and Sunglasses..

I come from a not very rich indian family. During my childhood, brands were not big in India. Nike T shirts that cost 500 rupees were clearly outrageously priced when you could get a pretty good T shirt for just a 100 rupees (about $3 in the early 90s). But by 2005, my dad had made enough headway in his career, that i could buy those Nike T shirts regularly. At the same time, I was one of the few in my college to be in branded clothing, a fact that someone else brought to my notice.

I clearly remember in my first year of college (2005), a friend of mine explaining to me how sunglasses made by Burberry would cost Rs150 to make ( about $3 in 2005) and were sold for 100 times the price. “The truffles given for free in the showroom cost more than the sunglasses.” was a statement that has remained with me through most of my 20s. And yet i have owned sunglasses that cost about $150 knowing full well that they probably still cost only Rs 150 to make, with a 60 times mark up in today’s currency rate.

Today, after reading the case i ask myself why did i spend my hard earned money on such a crazily marked up product, when i know the facts? What is the attraction? the honest answers i find are as below.

1. The products might cost 10 times the generic local product, but also typically lasts me 10 times longer, (try damaging a Nike T shirt over 5 years!)

2. The experience of owning a high quality product is markedly different from a poor quality product. The t shirt is smartly cut, has good fabric, doesn’t fade very quickly etc. The sunglasses are clearer, resists scratches etc.

3. One stumbling block for me as a fairly objective person is that of acknowledging the badge value of products i use. Does badge value of products matter to me? I don’t think so. None of the clothes i own today have a clear brand sign on them. I suppose i have simply come to appreciate the quality of these products.

Now some of the readers might argue that i only appreciate the quality of branded products in a placebo effect kind of a way. That may be $15 sunglasses are as good as my $150 sunglasses. I honestly don’t know because i haven’t tried $15 sunglasses in the longest of time. I love my Zodiac suit,I won’t trade it for a local suit costing 25% of it, and would definitely want to try out a Hugo Boss suit at some point when i can afford it. 

So the lesson for Burberry, at least from my point of view, is to maintain high quality, high design, high fashion, highest of standards of production and showrooms, and it doesn’t have much to worry about. Their target customers are people who inherently trust and like to use branded products and don’t mind paying for the experience of purchasing, owning and using them. As for the checks, i guess you can’t ignore 25% of your revenue.

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Is Burberry the Black & Decker of fashion?

There’s no doubt that Burberry sits high on the most desired clothing brands list. Everybody knows, likes, and wants to wear Burberry. It’s a sign of elegance, sophistication, and status. Great, right? Not, necessarily. 

In fact, the brand has become so desirable, with it prevalently familiar check, that consumers who cannot afford it would go as far as buying cheap knock-offs, just to come close to that societal affiliation. In fact, the knock-off market has been constantly growing over the past few years. Can Burberry protect its brand image? Will current consumers still be willing to buy Burberry products, if they seem worn by everybody else on the street?

But the problem isn’t just with the spread of knock-offs. Consumers that buy authentic products can sometimes take it too far. I saw a lady once, in Paris, who was wearing a Burberry scarf, coat, and handbag, and she was holding her baby daughter, who was also wearing a Burberry skirt and t-shirt. A bit too much? I think so too. It was quite repulsing to be honest. It reminded me of how I couldn’t eat cinnamon buns for two months in Toronto, after having spent a week commuting to a gym that was next to a Cinnabon, with its famous strong smell filling my nostrils all week. Sometimes, you just have enough!

Intel’s “Make It Wearable Challenge”

If it’s not already apparent from all of my other posts related to Branding Class topics, I’m a bit of a tech fanatic. And, I’ve been looking forward to discussing the Intel case ever since I saw it on the syllabus…partly because of the aforementioned tech fanaticism and partly because of the prior professional experience I have personally had in this space. 

“If the PC industry is dead. What happens to Intel?”

That was the question that was posed to my team a few years ago. The statistics were showing PC sales to be plateauing, and then dipping. And every OEM player in the computer hardware space, who had in the previous decades made significant $$$ from PC sales, was becoming frightened and anxious. 

Intel as a company had shifted from being a technology-lead to a marketing-led organization. They kept a pulse on the market, which is - in my opinion - one of the primary reasons why the company is still in business while AMD has had a slow, painful death. Intel saw the wearables trend coming (even if their response to mobile was a bit slow). And as such, they were able to keep their brand relevant by piggy-backing on consumer trends that were speaking to a massive audiences. 

Fitbit, Jawbone, Misfit Wearables, Microsoft Band, Google Glass, etc. - the market has been flooded with wearable fitness trackers and other technologies. So, Intel’s big push to crowdsource their future wearables strategy through the “Make It Wearable” Challenge was brilliant. The challenge gave them a big marketing push, and Intel technology stayed relevant and “cool”. Best yet, it was a [relatively] low cost investment, as the challenge encouraged developers to utilize Intel’s offerings in innovative, new, ways. And, use these solutions as further hype for Intel to harness.