arguablyliz

[arguablyliz]

Amazon has a famously weird relationship with investors: despite continually showing small or negative profits and never paying dividends, it remains a darling of Wall Street. Blogger Matt Yglesias has referred to Amazon as a "charitable institution being run by elements of the investment community for the benefit of consumers." How does Amazon get away with this? It comes down to the leadership of CEO Jeff Bezos. He has built a brand around himself, much like Steve Jobs did at Apple, where investors trust him to have big ideas for the long term. Investors don't trust Amazon - they trust Bezos. He has branded himself as a risk-taking innovator who is slowly dominating the e-commerce world in every way.

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The NYPD made headlines last week for their disastrous attempt to create the hashtag #myNYPD, exactly the same thing that happened to McDonalds' #McDStories.  In fact, the linked article here compares the NYPD backlash, which they argue was inevitable and completely foreseeable (I agree) to #McDStories and one I didn't know about from poor, struggling RIM.  It made me wonder why we think these Twitter backlashes are so inevitable. Something that strikes me here is that the NYPD, McDonalds, and RIM aren't exactly beloved brands.  Perhaps that's why they were so tone-deaf as to create hashtags that are easy to mock.

In the article on the RIM #BeBold failure (http://mashable.com/2012/01/31/rim-backlash-twitter-brandjacking/) David Berkowitz, vice president of emerging media at digital agency 360i was quoted as saying "If Delta does a campaign to win a free flight and uses #flydeltafree, it won't be attacked in the same way as if it uses #whyilovedelta that invites sarcasm."  That's certainly a major issue - the inherent mockability of a hashtag. 

But it's a bit of a chicken-and-egg problem. The brands that fall prey to this are all brands that at least some people love to hate.  Would Apple get hijacked by #whyiloveapple or would they get thousands of tweets from people who really do love Apple? Well, for starters, they know better than to try it out. I wonder if there are examples of beloved brands doing this successfully, but we never hear about it because it's not a funny story that goes viral. Or is it simply that only brands with poor brand management would think to employ this strategy in the first place?

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Intel's IIP program was genius for taking a B2B product and marketing it directly to consumers. To a consumer buying a PC, what were the factors of differentiation? Putting aside Apple for the time being, you're looking at a machine that starts up with the same Windows interface, has the same form factor, has probably interchangeable accessories. What's the differentiating factor? HP. Dell. Gateway. It was the OEM brand. But even though Intel was the clear market leader, most OEMs at the time were using both Intel and AMD chips, especially once the Athlon 64 exploded into the market. IIP put pressure on OEMs to use Intel, both by appealing to consumers and by the ad dollars that could go to OEMs. Returning to Apple, I think the strategy was brilliant but it's limited. When Apple became the behemoth computer brand maybe ten years ago, its consumers became completely loyal. When Intel started integrating its chipsets and graphics with the CPU, Apple jumped ship so they could put Nvidia graphics cards in their laptops with an AMD CPU. Were Apples's consumers mad? Course not. They trust Apple more than Intel. I also think Intel's extension into branding specific chip generations has been hit or miss. I like the idea of building generations in and pushing consumers to upgrade. Not all Intel is the same. Pentium 4, I get that, it's the Pentium after Pentium 3. But what is this Core i3, Core i5 business? That product brand came out on the Arrandale/Clarksfield code name, what, two or three years ago? There have been ticks and tocks since then, what am I buying?

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Taco Bell trying to brand up from one of the most hated cheap chains to a fast casual chipotle-esque space. Can this work? They've cleverly changed the name and the branding doesn't evoke the original at all but people in the know will still know. I remember a big kerfuffle when a rumor circled about McDonald's owning Chipotle even though you couldn't tell.

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Spotted in the E62 cafe: worlds most perfect baby rocking a Burberry jacket. As soon as she toddled in I said "is that a Burberry jacket?" The Burberry check is so great for recognition. In this case we have a big check but you only see it when her sleeves are rolled up.

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Extensive personal branding research! Belly, the best wine bar in Boston (best of Boston 2013), is also owned by Blue Room (next door) and Central Bottle (across central square). They do a n interesting job of quietly promoting their different locations while keeping them noticeably separate. Each space occupies a different niche market - restaurant, wine bar, and upscale wine store. Central Bottle offers wine tastings for special events with food provided by the restaurant arms of the brand.

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Today, US Airways is under fire for, as usual, posting something offensive on twitter. The image in the link is censored, but you get the idea.  This is how we see our airlines.  Tone-deaf.

So many years after Singapore Airlines started the customer service effort, so many airlines are content to sit back and be seen as hated entities. The vitriol we spill on our airlines is nearly that of Comcast or cell phone companies because we feel as powerless at their hands as we do of these monopolists.

But SIA is not alone in its customer service model - Emirates and the Arab airlines are rapidly gaining marketshare and using their geographic positioning to make themselves the go-to for connections in the middle of the globe.  If you've been on the red line any time in the last few months, you've likely been on one of the full-on branded Emirates cars promising that even in economy you'll be happy. How is Singapore going to compete with this new set of ultra-luxury carriers?

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In general, we know that it's much harder to brand up than to brand down. But I wonder if a few things about the wine industry make it different? 1 - people are not very brand conscious and 2- people don't generally know anything about wine. I drink a fair amount of the mid-range Casillero del Diablo brand but had no idea it was part of an umbrella of brands. My price range is generally a $10 bottle but in the case that I'm in the market for a more expensive bottle I imagine the brand recognition would be helpful. Imagining myself overwhelmed facing hundreds of fine wines with no way of knowing what to reach for, I could see myself reacting favorably to something familiar and thinking "I trust this maker, I bet their premium is also good." Similarly, I've noticed trader joes making moves in this direction. I've grown out of my two buck chuck years but I remember it being good for the money and in the last few years I've noticed trader joes premium (relatively speaking) wines - a few dollars more, a fancier bottle, an image of a coast, a different brand name - but still clearly a trader joes wine. Since I trust trader joes to bottle good value, I'm willing to move up their value chain and test out their pricier options. In an industry with such confusion and uncertainty, is the value of a safe brand worth more than in, for instance, the car industry?

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The conversation about product diffusion reminds me of a classic product that didn't meet its lofty goals: the good old Segway. That's a product that just totally failed to find a relative advantage.  Relative to walking it's a little faster, but it's unwieldy, doesn't fit on the sidewalk, there's nowhere to park it, and it's expensive. Relative to driving, it's cheaper, but it's slower and the world just isn't built for it - no parking spots, no road space, etc.

Now they're exclusively used by mall cops, Segway tours, and Gob Bluth. Which leads me to another point about observability - that's only a good thing if your product is cool. 

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It's been 13 years since our case with four products was published, which gives us a bit of a hindsight glare. But I tried to fill out a list of the attributes of the four products based on only what I knew from the case, and came up with the following: 

What's interesting to me is that I probably would have bet on the wrong product(s).  The only one of these four that I've ever heard of is the satellite radio. I think what really stands out here is how important the relative advantage category is. No matter how simple or trialable your product is, it just has to be better than your alternatives and, unfortunately, that's the hardest to put your finger on ex ante. 

On the peanut butter - never underestimate the power of the ick factor. Just didn't improve on the original enough.

On the bandaids - that one's tougher for me, but what I found myself wondering as I was reading the description was how often I would really need to use these at home. If the injury is that serious, my doctor is in charge anyway. Maybe this innovation is flying in the medical community, but at home my old school bandaids are handling my blisters and papercuts just fine. 

On satellite radio - my sense is they played with the testability here. I recall a lot of free one-year subscription offers floating around. Not to mention, every car I rent has satellite radio in it. I could see how the technology might be addictive if you get your audience hooked. 

On the scented TV, I mean really. Sorry but this one's just silly. It's not a major improvement and it requires up-front investment. 

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"...it implies the market share of browsers is fairly arbitrary, and highly subject to potential consumer rebellion. I can think of other businessmen who have alienated parts of the American public through their political stances, but still their products are bought and there is little talk of deposing them from their leadership roles. Free products seem especially vulnerable to fluctuations in corporate image, in part because no product has a durable edge on price. Since more of our economy seems headed in the direction of “free to consumers for direct use,” we might want to start thinking about this tendency a little more carefully and cautiously. Charging people a positive price liberates you to be less conformist, at least provided you fare well in market competition."

http://marginalrevolution.com/marginalrevolution/2014/04/for-which-political-views-should-a-ceo-have-to-resign.html

Tyler Cowen on the resignation of Mozilla CEO Brendan Eich for his views on gay marriage. For some products, your brand is all that defines you. As we discussed in class regarding beer, products that all serve a similar purpose and are not that differentiated need to focus particularly heavily on brand-building. Also ties into the concept of a brand ambassador. I tend to agree that witch-hunting people for their political beliefs is a poor precedent, but from Mozilla's perspective they have a modern techie product and their CEO is simply off-brand.

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Great use of branding.

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Another great study tour completed! I came away from this tour with a strong belief in brand ambassadors and the power of having everyone in your organization represent your brand. Some of our best visits stick in the brain because they felt tailor-made for us, like the company really cared and was excited to have us. From the acne CEO gamely posing with us in an MIT to the Carolina Herrera umbrellas offered to us during a rainstorm to the surprise Spongebob headphones from Nickelodeon, companies that made a special effort to accommodate us left us all with such powerful, gut-based love for the brands. Other visits, even when interesting and engaging, couldn't reach that above-and-beyond feeling we got from the standouts. After every visit our professor polled the class to see if we had improved or reduced impressions of the brand. In almost every case the majority of us had an improved perception: seeing the inner workings and hearing behind-the-scenes chatter is empowering and inherently fascinating. But the brands we kept coming back to, the brands whose stores we walked into in airports and on the streets whenever we saw them, were the brands that really impressed us and made brand ambassadors out of us all. In the week since our trip, our whatsapp group has been blowing up with pictures and information on where we can locally buy Dominio do Bibei wines. Those wines were interesting, great wines but there are plenty of interesting, great wines in the world. It is the power of the brand that they instilled in us in their dark, remote, stunning winery that has us spreading the word. An extension of this concept is our tour guides. In each city we had a different tour guide who gave us a city tour and came with us to every visit and event. They were the representatives of their city's brand, and as a result I associate the cities strongly with our different guides' personalities, fairly or unfairly. Our guide in Berlin was extremely knowledgeable about German history and somewhat stoic until we got her to open up. Our guide in Stockholm was quietly sarcastic and reserved. Our guide in Madrid was fast-talking, funny, and energetic. For better or worse, those were the impressions I was left with from those cities. Especially in a context where you have a limited interaction with a brand, its ambassadors and the people it chooses to let represent it are so important to the perception you are left with.

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We spent some time discussing this Heineken ad during our study tour class and I was reminded of it by the Corona case we read this week. Corona's "sun, fun, beach" motif really rang true to me. If you asked me what Corona stood for, those are the words I would have picked out. But what does Heineken stand for? I'm not even sure what this ad is trying to say. I googled Heineken ads and got a sea of their distinctive green. Ok so the bottle is green, but what is that supposed to mean to me? It doesn't evoke any sort of feeling or story. A distinctive bottle and color might make for good brand recognition, but that's not exactly reaching for the branding stars.

#MITSloanBrandingStudyTour #MITBranding

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BLACK+DECKER Launches New Brand Identity

I went to the B&D website to check out how they're branding themselves now ("rugged husbands" seems to be the answer) and discovered a very prominent link explaining a rebranding they're undergoing. Interesting! I don't think I've ever seen someone come right out and discuss so openly their branding strategy.

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Carolina Herrera treated us like royalty on our visit to Ourense - including but not limited to providing CH umbrellas during our visit when it started to rain. What a thoughtful touch! Since our visit we've walked into every Carolina Herrera store we saw (3 and counting). Made me a lifelong brand ambassador.