Monday, June 22, 2009

The Coolest Brand

So, after thinking about what brands I admire most, I began to think about different brands attributes. For example, Coca-Cola is known as a very classic and timeless brand as well as a symbol of Americana.

One attribute that kept coming up in my mind was "cool." So, I began to wonder what brands today are "cool." Obviously, what is and who is deemed cool is going to be different everyone, so the following list is viewed through the eyes and mind of a 24 year-old, single, male, college graduate who loves sports etc etc etc)

One quality that I felt all of these cool brands should have is a buzz worthy cultural relevance today, an inexact quality I know. I tend to think about it in terms of would it be the subject of a parody on Saturday Night Live. Finally, I did not organize this by product category or any other characteristic. It's just my thoughts.

Apple: I don't know too many people that would disagree with Apple being the hottest brand today. No company markets themselves like Apple, starting from the top with Steve Jobs to down to the kid at the Apple store. Apple products are cool, cutting edge and transforming societies in developed nations. The impact Apple has had on the music industry alone is enormous, not to mention the incredibly short time frame it occurred in is staggering. I'm not positive that several other industries are waiting for their fatal blow (Are you listening newspapers?), but the Iphone is rapidly changing our society (thanks to the embracing of third party apps-creating new opportunities for brands). Finally, all of this would mean nothing if Apple products were not as sleek, smooth and stylish as the are. They look cool. Period. How else could Apple go from the brands of geeks and computer nerds to the must have items of today.

Las Vegas: I am always thinking about ways for Western NY to grow and become more vibrant. While I don't think that branding efforts and advertising by cities will really work to bring people to the area unlike jobs and lower taxes will (note: currently the slogan is We Roc! As in, we have garbage plates and no rush hour, We Roc! Now don't you want to up and move). However, if there is one exception to branding a city, it has to be Las Vegas. Broken dreams or not, to a 24 year-old male, Las Vegas seems like a great time. Las Vegas sticks to what it knows best, gambling, hot girls, great parties, free alcohol, nice restaurants and shopping and an overall unmistakably unique great time. The best part for Vegas is you cannot take it home with you...hence, it stays here. I thought about Vegas and their marketing tactics and their cultural relevance. Have you seen a movie in the past ten years. I can count six without thinking that have been about Vegas (or were set there). It's not a mistake; they know what they are doing, and it's working.

UFC: Last night I was flipping through the channels on my television's guide and I saw a program called World Extreme Cagefighting on. A week or two back I went to a bar and it was unexpectedly packed, turns out there was some cagefight on. That same week, my brother was wearing a shirt that said "Tapout" on it, which I'd seen before on bumper stickers and stuff, so I asked what it was about and it was a UFC thing. I've seen more UFC and Mixed Martial Arts specials, conversations and references on television lately, so it's gaining a lot of mainstream buzz and acceptance than in the past (remember way back when it was depicted on the show Friends). Even thought I don't watch it, I know many guys my age do, and that following is growing. Now fighting is nothing new, but UFC seems to have a cool edginess to it that is not only absent from boxing, but all other contact sports.

I know this is not a complete list by any means. I thought about a lot of brands for this, many of whom are in very strong competitions for king of cool. Think Gatorade vs. Vitaminwater. Gatorade still is the brand of Jordan, Tiger Woods and new spokesmen Lil' Wayne. However, Vitaminwater is the product of Lebron James, Kobe Bryant and Dwight Howard.

Another great competition is Nike vs. Under Armor. I don't think that Nike is as hot as it was when Jordan and Mars Blackmon were all over the television, yet, with all of it's new product lines there are not as many people "protecting the house." Both are still relevant, but there is no clear winning of who is coolest right now.

Finally, I thought about a brand battle between long time great brand Playboy, which is still very relevant with it's magazine covers producing celebrity after celebrity and now a couple television series (and tell me you don't want to go to the mansion) yet it's clearly not dominating like it was before Maxim magazine hit shelves and television with it's Hot 100 list.

As always, I love to hear what you think are some cool brands to you. Remember, this is just a list in the eyes of a 24 year-old male. For women, I was thinking that Target is a cool selection. After all, it's so nice that it's become dubbed Tarje. If your in the Rochester area (even though it's grown quite a bit, Wegmans may be queen. And although cool is usually defined by the young, if your older, maybe cool is oh, I don't know, Viagra?

So take some blue stuff and let me know what you think.

Saturday, June 13, 2009

Pricing and Brands

After the last post, reader Monica made an excellent point about the effects a price may have on a brand. Pricing is definitely important because it is an instant signal to the customer what your type of brand you are. For example, if I say $18,000 for a purse, you instantly think luxury brand. If were talking cars, it's a value brand.

But what if were talking about something with a variable price, such as airplane tickets and more recently, sporting event tickets, along with a host of other items that this has become customary. What does this do for a brand?

Well, Al Reis, this universe's all-time expert on branding (his books are must read) explains this in a recent article that was published in Advertising Age on June, 8 2009.

(I dont want to plagurize, but I pasted it here because once taken down from, I think you will need a subscription.)

A former New York Times editor recently wrote a full-page article for Forbes magazine advocating "variable pricing" for art museums.

"Art institution directors should start thinking like airline yield managers," was the subhead of the article.

That's strange. You might think the yield-management gurus would have the airlines rolling in dough. But that hasn't happened.

Take the five largest U.S. airlines. United went bankrupt. Delta went bankrupt. Northwest went bankrupt. US Airways went bankrupt. And American Airlines is losing money. In the last 10 years, American has had revenues of $199.8 billion and managed to lose $6.7 billion. Not exactly an industry to emulate.

Why do otherwise intelligent people borrow ideas and concepts from failing industries and think they will succeed in a different setting?

The unfortunate answer to that question is that in today's world, ideas and concepts don't seem to matter. What matters is "execution."

If you can execute well, goes the thinking, you are going to win. Which in itself is true. What is not true is that execution is unrelated to the power of the ideas and concepts driving the business.

Variable pricing is one of those ideas. No matter how well you execute a variable-pricing strategy, you wind up undermining the brand.

Airline customers used to be brand loyal. When I worked at General Electric in Schenectady, New York, I always called American Airlines first. If they didn't have a flight to where I wanted to go and at roughly the time I wanted to leave, I would ask the American representative to suggest another airline.

Variable pricing has destroyed the bond between airline and customer. Almost nobody books a flight without first asking, "What would that cost?"

Yesterday's brand-loyal customer is today's price-comparison shopper.

Except for Southwest Airlines, of course. While the airline does use yield-management strategies, it also puts a cap on its fares so they are never out of line.

According to a recent survey of the American Customer Satisfaction Index, Southwest came out on top of the airline category for the 16th year in a row with a score of 81 out of 100, its highest ever, compared to a score of 64 for the airline business in general.

The major airlines should hold their heads in shame. It's like Wal-Mart coming out first in customer satisfaction ahead of Nordstrom and Neiman Marcus.

High prices alone are not the problem. Often you need a high price to define your brand. Without its high prices, Rolex would be just another watch brand. And Porsche would be just another sports car brand.

It's the variable pricing that causes the problems. You can see a mini version of this effect in the cola aisles of many supermarkets. In my local supermarket, for example, you normally see both Coca-Cola and Pepsi-Cola priced at $4.69 for a 12 pack. But often one or the other brand is on sale for $3 for the 12-can package.

With this much disparity in price, many consumers automatically buy the one that's on sale. In other words, the brands don't matter anymore. What matters is the price.

You can also see the effect in cola market shares. Normally a No. 1 brand has twice the market share of a No. 2 brand. But Coca-Cola's lead in the U.S. market is much less. On an index basis, Coca-Cola is 100; Pepsi-Cola is 65. (And Pepsi would have an even greater market share if it could do something about Coke's enormous lead in sales to restaurants and fast-food chains.)

Years ago the Coca-Cola Co. began testing a vending machine that could automatically raise prices for its drinks in hot weather. Consumer reaction was immediate and caustic. One beverage executive said, "What's next? A machine that X-rays people's pockets to find out how much change they have and raises the price accordingly?"

Brands have a function to perform, and one of the most important functions they perform is communicating the brand's price level and its equivalent quality level.

Consumers equate quality with price. The higher the price, the higher the quality. Not that consumers always want to buy the highest-quality products. Often they would rather save money and buy something less than the best.

These decisions usually depend on the category. Some categories are more important to a consumer; some categories less important. Some consumers buy expensive watches and cheap toilet paper. Or vice versa.

There's nothing wrong with being a high-end brand. There's nothing wrong with being a low-end brand. There's something wrong when you try to be both.

Take Lenovo, for example. What's a Lenovo? Is it a high-end computer or a low-end computer. Actually it's that and a midprice computer, too.

Lenovo has three lines of laptops. The ThinkPad line is at the high end. The "value line" is at the low end, and the IdeaPad line is somewhere in between. Prices in America range from $349 to $1,999. Lenovo, like many companies around the world, is trying to increase sales by appealing to everybody. That seldom works.

Lenovo is suffering. After eight years of profitable sales, the company lost $226 million in its last fiscal year. Out went Lenovo's American chief executive, replaced by his Chinese predecessor.

That sort of strategy is one of the reasons the U.S. automobile industry is in trouble. Trying to cover a wide swath of the market with a single brand name.

I remember a Dodge executive, years ago, bragging about the fact that the Dodge brand covered "85 percent of the market."

Is that good? It doesn't seem to be since Dodge is currently in the Dumpster along with the rest of the Chrysler brands.

I am a huge fan of Al and Laura Reis, my first official branding book that I read was their "Origin of Brands" which is the reason I do this today. I believe what they say, and I think if more businesses followed their advice, they would be in way better shape.

Sunday, June 7, 2009

What Things You Will Never Give Up?

I want to ask everyone what are some items in your life that must have; you will not switch from that brand? It could be a product, a service or a place that you shop or eat at; really anything that you buy. An example for me is Chiptole. I absolutely love Chipotle, and while I will still eat at other places, I won't go to Moe's Southwest, because in my mind, Chiptole is the only burrito.

The reason I ask is to look at some similarities of all of these brands, as well was the ways they are unique.

So what is it for you? Will you only work on Apple and not PC's? Only drink Pepsi and not Coke? It could be anything, just let me know what your favorite brands are. I welcome all comments.

Monday, June 1, 2009

Obvious Product Placement

Late last night, I somehow found myself watching the MTV Movie Awards. In typical MTV fashion, the advertising within the show was so blatantly obvious, that I am baffled how a marketing executive could believe that it would even have the chance to effective.

An example was an introduction of an award by a British rapper (complete mind blowing oxymoron) who also happens to be an Orbit gum commercial, who happened to be a sponsor of the event.

Also, the movie Twilight, which won a bunch of awards, also happened to be advertising the Twilight sequel. I would question the integrity of the award, but I don't think there is much integrity to an MTV award to begin with.

Product placement when done right, is a great way to get a product into the show- not in the part the audience Tivo's. However, when products are obviously placed in the program, everything just comes across very forced and akward. Therefore, even though you got your name and logo in the show and it was seen by millions, it's entirely ineffective. The association that they will most likely make with the public is that they are a intrigal cog in our over commercialized and cluttered marketplace.

The whole thing was just hard for me to watch. I think most shows should just completely refrain from product placement- it cheapens the show, the network, and the brand.