#2023mitsloanbrandingsb

[lyolisa]

Does Walmart+ have a chance?

One of the reasons our team decided to focus on Walmart+ for our branding lab project is because the majority of us didn't even know it was a thing... which makes it clear that product diffusion isn't doing great.

Roger's Five Factors gives a good framework to start to study the why and to help determine if Walmart is an imitator or a innovator. Walmart plus is a membership service that will give customers free shipping including on produce and groceries along with many other perks (streaming partnerships, lower gas prices, first access to deals, etc.). Let's explore more:

Relative Advantage: Looking at this objectively... I don't think that Walmart+ is doing anything mind blowing that amzon prime isn't already doing and walmart has to fight against the stereotypes that has carried on with it. But if you dig in, there are a few notable differences. Walmart plus is ~$40 cheaper annually so perhaps their clientele is slightly different. They focus more on delivery of groceries offering free shipping on orders over $35 whereas Amazon Prime only offers free shipping of orders greater than $150.

Compatibility: Walmart Plus is an easy decision for customers who already purchase a lot of their items from Walmart. It will make it easier, more convenient, and cheaper for customers to do what they were already doing. But because of the breadth of items that Amazon Prime offers, I doubt people would ever switch from prime platform to walmart plus and it's less likely that they'll pay for both services.

Complexity: Would still have to do more research on the user experience but I don't believe it would be difficult to understand/use.

Trialability: There is a free 30 day trial period (which Amazon Prime also offers).

Observability: There has been some chatter of Walmart and their grocery options because they did a really good job of contactless pickup/deliveries during COVID and so that is some positive observations for them. But other than that, we don't see nearly as much visibility on how one can take advantage of Walmart +. Especially in comparison with Amazon Prime.

An important point made by Gourville is to consider an innovation as a product that is perceived by new to a given set of people. Here, perhaps the set of people are the walmart shoppers who are looking for a "new" way to consolidate their grocery shopping and savings. In that perspective, maybe Walmart+ isn't trying to compete with Amazon prime but is trying to make it's existing service innovative for its current customers.

[vivekinbranding]

As long as it's not Yellowtail

I did not grow up in a wine-drinking culture. For me, just the act of having wine at all was fancy. Once I moved to the US, I started to understand the intricacies of different types of wines, identifying that I like Cab Sauvs, dislike Chardonnays and feel alright about most others. I learned that you buy new-world wines based on grapes and old-world wines based on region.

An interesting observation however, as a thoroughly average wine-buyer, has been that I avoid certain brands like the plague just because of their perception as low quality (Mondavi, Yellowtail, etc.). Other than that, I don't usually pay attention to the brand very much. I couldn't be less biased between Concha y Toro's Castillero Del Diablo and Apothic Reds (both Trader Joe's classics) as long as they fall between $8-$15 at the local store.

Other than having mild perceptions of which regional wines I prefer (Douro Valley, Cotes du Rhone, etc), I tend to just buy wines that my friends won't consider to be cheap or bad tasting. So for me, I think buying wine is mostly about perception after you've filtered away the stuff you really don't like.

I think a good way to test a nudge on buying wine would be to establish the pre-nudge base rate for a segment of buyers (or for a control group) and see how their behavior changes after the nudge over the course of the next 6 months.

[rodfig]

Concha y Toro

#2023MITSloanBrandingSB

The "Judgement of Paris" in 1976 sounds like an event that drew the invisible line between historical periods. The reigning superiority of Old World wines up to that point hadn't been seriously challenged by any of the "New World" geographies before. A blind taste test questioned generations of wine snobbiness in favor of a new product school. The cool, romantic brand of French wines did not translate through to the palate to overcome California competitors.

One of the most interesting strategies from the New World producers was in the heightening of importance placed on the type of grape rather than the region it came from. This is a classic strategy to compete on a different axis than existed before that we've seen be successful in companies recently (e.g., Apple deciding to compete in the personal computing space based on design rather than pure processing speeds.)

Concha y Toro, a star among the New World producers, has to decide where the brand wants to play - upper end or lower end - to save margins. Expensive wines will always get bought, but the competition status is unclear. Additionally, the Old World producers have an inherent brand loyalty driven predominantly by country prestige. I would suggest that they follow a top-down strategy to reach the lower and middle market segments while taking advantage of economies of scale and growth of production. Chile faces FX volatility, which becomes a major problem when the margin is driven by a high price point for luxury exporters. Additionally, the uphill battle in positioning your brand upward feels like a costly risk with no clear exit strategy in case it does not work out. Finally, the idea to move towards more affordable segments doubles down on the "value for money" image that Chilean wines were starting to gain, whether they wanted it or not. In the worst case, where exports face a brick wall, and the domestic market would have to keep the company's cash flows, C&T would not want to be caught with only a premium wine that does not resonate with most of its domestic market.

[drhlee]

North Dakota Wine is Okay

The authors of the article entitled "Fine as North Dakota wine: Sensory expectations and the intake of companion foods" make a bold claim that taste expectations may have an impact on the expectations of companion foods, and this relationship may have an indirect effect on obesity, using wine and fine dining as an example. Favorable taste expectations, such as the perceived quality of the wine, may lead to positive expectations of the perceived quality of companion food, leading to more eating and drinking. Alcohol intake leads to disinhibition and increased intake and enjoyment of the overall experience, which can further increase food intake.

However, I had quite a few concerns about the conclusions drawn from study 2 because of how underpowered it was, with only an n=24 for the “California” wine and n=15 for the “North Dakota” wine. This is amplified by the group's diversity, in which there was a large disparity in age, seating arrangement, and gender. There was no information on the individuals’ regular dietary habits, obesity, dietary restrictions, etc. Moreover, the total amount consumed was found to be statistically insignificant. In fact, there was a trend for a greater intake of “North Dakota” wine. There was also only a 50 g difference between the groups, with a standard deviation of almost 90 g. The authors continued to try to parcel out information by further dividing the groups into being alone or in a group, sex, time at the table, and an ill-defined variable, “similarity,” claiming that there were no associations found. More information, such as the average age of the tables, gender composition of the tables, etc., could have given more insight into the findings. It would have been a more compelling article if it had been backed by more robust data.

[jwhaley]

The Lack of Brand Loyalty in Wine

Wine brings forward an interesting branding question that is less common in other industries: are people even loyal to brands, or just their specific type of wine? When considering those close to me who enjoy wine, I can tell you if they prefer white or red, and even what type of white (chardonnay, pinot grigio, sauvignon blanc, etc) or red (blend, cab, etc) they would order. However, only the highest end drinkers in my life are truly loyal to a specific brand. This makes for a challenging task of wine producers to identify a way to stand out at retailers and restaurants. The "Concha y Toro" case discussed that there is a halo effect with wine, in which people's expectations and beliefs lead them to choose wine based on their assumptions on product quality. For example, the blind taste test research study done in which people chose the French wine as the best, even though all three wines tasted were from Texas. I have heard people often say only choose Italian or French wines when we go out to eat, regardless of the brand. Creating a brand around your country of origin is a challenging task as people often already have ideas in their head about the country and it is a large task to change an entire country perception.

Another interesting factor is that even becoming a well-known brand is not a good thing for all drinkers. For example, two heavily produced brands in the wine world that I know are Kim Crawford and Whispering Angel. If I am in a bind, I know most of my friend's drink both so it is a good gift or restaurant choice. However, I know others who are knowledgeable wine drinks that experiment and brand switch often, who believe mass produced wine and heavily advertised brands are low quality.

In the case of Concha y Toro, they have the Chilean perception of "value for your money" due to the lower price point for higher quality. They are a global winery selling in 110 countries and are one of the world's top ten wineries. This makes for a challenging branding switch in people's minds to leave the lower end of the wine industry and only focus on premium and super premium. Having already built a brand identity, I would suggest leaning in heavier to the basic segment and potentially acquiring other producers to continue to gain market share in this segment.

[kylegordonmit]

Wait, were after-school cartoons one big nudge?

The Pokemon cartoon didn't just nudge us towards buying their video games and trading cards, but also towards every plushie, figurine, t-shirt, pencil case, keychain, and folder. Remember the infamous Pokeball toys that had us all begging to stop at BURGER KING of all places? There's no wonder why Pokemon is the highest grossing media franchise of all time.

Many of the children's properties from this era (80's-90's) were explicitly designed with toy and merchandise sales in mind. The GI Joe, He-Man, and Transformers shows mapped out a blueprint, with new episodes and seasons introducing new characters and costumes, and therefore new merch for us to buy. This model was translated to Star Wars and Care Bears, Ninja Turtles and Cabbage Patch Kids, and ultimately informed Disney CEO Michael Eisner's primary strategy for extending their properties from the screen to parks to homes during his tenure.

Before the Marvel movies were the cash cows that they are today, Marvel as a company was being kept afloat by a merger with an action figure company called ToyBiz, and this resulted in some of the most iconic cartoons of the 90s being produced.

And as an ultimate heat check, who could forget Joel Schumacher's "Batman & Robin" film? Which was by all accounts a terrible movie, but still an awesome vehicle for selling George Clooney and Arnold Schwarzenegger toys.

After reading up on nudging, "Gotta catch 'em all" somehow feels more sinister.

[oliviawold]

Corona + Lime = Party Time

The case of Corona highlights the risk/reward balance of carving out a distinctive brand. Corona has done a fabulous job of becoming the brand of choice for "sun, fun and beach." When I think about a day at the beach, the only beer I can imagine in someone's hand is a Corona! It was fascinating to read about how deliberate that choice was and how every aspect of their marketing contributed to this aura of good times, vacations and partying with friends. However, when compared to a brand like Heineken, I wonder what revenue or markets were lost by making this distinctive choice. By strongly associating their beer with "beach" and "party," it makes it difficult to associate the brand with "meal at a nice restaurant" or "Thanksgiving dinner." I'm curious how brands navigate these choices and what kind of data they can collect about the revenue associated with these specific use cases.

[miketumblesatsloan]

Heineken, Corona, and... Canada Goose??

In the ever-changing world of consumer preferences, it's crucial for brands to adapt and evolve. However, Corona and Canada Goose have found that embracing their authentic roots has provided them with a solid foundation.

Corona's success can be attributed to its authenticity as an imported Mexican beer, which has allowed it to stand out in the competitive beer market. Despite the temptation to modernize or shift focus, Corona has remained true to its roots, capturing the hearts of consumers who value the imported novelty and “chill” messaging Corona is known for.

In contrast, my former employer, Canada Goose, has a relentless commitment to keep manufacturing operations in Canada, despite the high costs, demonstrating the length brands will go to maintain authenticity.

 However, we were losing market share to a more premium brand, like Corona with Heineken, when the luxury outerwear brand Moncler began to take off. In pursuit to position ourselves as a luxury fashion brand, however, it resulted in lower sell-through rates in our direct channels and smaller order volumes in our wholesale channels. Our fashion-focused assortment would often be subject to more aggressive markdowns and a higher return liability ultimately damaging the brand’s reputation.

By staying true to the core identity and values, both Corona and Canada Goose can leverage their unique market positioning to stay competitive and continue to resonate with their target customer base.

[sarahc1713]

How Clear Communication Created the Climb of Sun, Fun, and Beach

Modelo’s persistence paid off

Consistent and clear communication with consumers allowed Modelo to turn Corona into the number 2 imported beer brand in the U.S. Modelo's ability to commit to consistent advertising, fight off two false quality rumors, and not raise prices by absorbing tax increases allowed customers to trust the brand. These actions are all a result of Modelo’s persistence to be a top premium imported beer. Modelo visited almost every city in Germany to build trust again after rumors of Corona causing cancer and was very selective in who they chose as importers in order to build consistency and value for consumers, demonstrating how Modelo put in the work to build their brand.

Consistency builds trust

It is Modelo’s clear and consistent advertising that played a key roll in its success. Customer trust in a brand is what gives a brand power and allows the brand to fulfill its promise to its customers. Strong brands are symbols to customers and for Modelo’s Corona it promised to transport customers to a vacation, to provide them a little piece of the paradise of a Mexican beach through the messaging of “Fun, Sun, and Beach”. Corona’s “Vacation in a Bottle” and “Change your Lattitude” communications with straightforward ads demonstrated Corona’s distinct personality of a relaxing and fun beer, which resonated well with young consumers who are the primary consumers of imported beer. It is clear Modelo understood their target audience. Besides knowing what would resonate with younger consumers, Modelo benefitted from the growing U.S. Hispanic population, with even faster growing buying power. Modelo appealed to the Hispanic population by keeping production 100% in Mexico and maintaining the authentic Mexican bottle form with long-necks and simple logo.

With marketing being such an important factor in beer consumption as consumers are heavily persuaded by brand image when buying beer, I believe Modelo’s consistency in advertising and offering such a specific tangible promise to its consumers is one of the most important factors in its growth. Therefore, I think it would be a mistake for Modelo to drift away from their “Fun, Sun, and Beach” theme in communications.

The wrong consistency can backfire

While Heineken was consistently the number one imported premium beer brand in the U.S., it’s consistent confidence in high quality product, led to trouble by coming off as pretentious and stiff to customers. When I personally think of Heineken I think of the green bottle and formal more serious toned advertising, but that is really my only association with Heineken. Heineken’s belief that “Just being the best is enough” is unrelatable to young consumers who are their target audience for imported beers. Heineken should think about what their customer promise is other than product quality as they work to restructure their advertising communication.

[mcnegron]

Black&Decker Case

This case takes us back to 1991, when Black and Decker, a recognized power tool brand, was rapidly losing market share to Japanese brand Makita within the fastest-growing segment, within professional-tradesmen. After analyzing the case, we see that this is evidently a branding and channel issue. My initial thoughts as to why shares within industrial and tradesmen are so different depend on the distribution channels. We see that within industrial, distributors provide technical expertise to companies that will likely have few buyers for bulk purchases. Good relationships with those distributors can take B&D a long way. On the other hand, Tradesmen products are bought by end consumers in stores like Home Depot, which B&D was not used to working with closely. They have to convince every individual buyer so branding will play a larger role than channel/relationship. Regarding why Makita is outselling B&D 8 to 1 in an account with the same space, we see it comes down to the perceived value of the brand and "simple" elements like color make a big difference in distinguishing as a premium product. Tradesmen also want to be differentiated from consumers, so even if the quality is good, they don't want to use tools that amateurs use (because it makes them look like amateurs). I was surprised to see that B&D tools had rebranded to DeWalt at the end of the case and to read their story, because as an amateur that has friends that perform DIY, I know DeWalt is regarded as the best, most premium brand in the industry (and I recognize them by their lemon color). I was very surprised to see that the rebranding option that they took turned things around for them to hold 45% market share in the tradesmen category in 1998 in US according to Wall Street Journal, and they are still the most recognized brand today even among DIYers.

[csquaredbranding]

Rebranding at Black & Decker

When I think of Black & Decker I immediately associate the brand with household appliances so I was surprised to learn that it began as a power tools company. Because of this strong consumer brand perception, B&D was losing out to competitors such as Makita in the professional tradesmen segment which focused solely on power tools. Contractors inaccurately perceived B&D power tools as inferior or not sturdy enough due to the household association. In fact, some even incorrectly used home products for their professional work. When they did not stand the test of time, it further reinforced this substandard image. In addition, the lack of aesthetic differentiation between the professional and consumer brands (black vs. charcoal gray) conflated the two segments. Advantages for Makita included pricing at a premium over B&D (signaled higher quality even if not actually existent), producing a wider variety of products, and having more distribution channels (e.g. B&D did not sell in Membership Clubs at all).

Upon further reflection, the contradiction in market share between the industrial and tradesmen segments makes sense. The B2B industrial segment is more objective and rational. Corporations are looking to reduce costs, so they focus on price and obtaining the best performance and quality at the lowest price level. Makita loses out here on price alone as mentioned above. In the B2C tradesmen context, individuals place more weight on brand perception without being fully conscious of it. These different lines of thinking remind me of the System 1 (instinct) vs. System 2 (logical) thinking discussed in the book Thinking, Fast and Slow.

Based on the three options presented at the end of the case, I would recommend B&D choose Option 3. It should drop the B&D name as it is too challenging to overcome the household brand association as implied by the research studies conducted. Perceived quality rather than actual quality was the issue. I like the idea of going with the DeWalt brand as it already has clout behind it and avoids B&D having to build up a reputation from scratch. Changing the branding to yellow is also significant as, in addition to the safety connotation, it is highly visible and is associated with energy, a good association for power tools needing high performance.

Glancing briefly at the B&D site, it was interesting to note that the company was targeting the “DIY” market (“We’re passionate about your projects”) so a mix of the consumer and tradesmen segments. Also, the Dustbuster, their signature product, was still featured prominently as the first item that appeared on the top of the home page. Clearly, B&D did not have to sacrifice its household reputation to continue to build its brand.

[roshni23]

Fair & Bleh

As a kid, I remember seeing Priyanka Chopra as the face of fair and lovely. I remember older family members claiming the importance of staying out of the sun, associating beauty with lighter skin. I remember being infuriated when Priyanka Chopra commented supporting Black Lives Matter because it felt superficial and hypocritical. Though she was young when she was the face of Fair & Lovely, she supported one thing in South Asia while supporting another in the US.

Fair and Lovely capitalized on a major insecurity many South Asians had due to culture valuing a specific attribute they had little control over. This feels wildly exploitive and using major Bollywood stars as their campaign faces further exploited an already vulnerable consumer base. Contrasting this company with one like Dove, which took its customers' insecurities and traditional beauty standards, is interesting. I still remember seeing Dove's Real Beauty campaign, challenging traditional beauty standards and asking its customers to accept themselves. Though there was a "need" and demand for Fair & Lovely's product, the brand messaging capitalized on a problematic cultural norm - one that will hopefully change even more over time and will put Fair & Lovely in a difficult branding position - opening it up to more risk.

I'm not sure this relates directly to our branding project on tourism for a specific region in Italy. However, I could see a world where something political in Italy raises backlash globally, and the region would need to protect its "brand" as a part of a larger country. In this case, the region would need to defend itself by casting a positive, accepting message.

[vivekinbranding]

Unfair and terrible

Growing up in India, Fair and Lovely/Handsome were always somewhat laughable products within my family. They weren't allowed in the house, and it was commonly known within my extended family that they didn't really have a real effect.

Nonetheless, the brands seem to have created a relationship between the self-worth of their consumers and the supposed service the brand offers. They created a positive correlation between consumers feeling better about themselves and additional sales for their brand, by exploiting the insecurities of the population. This is a classic use of the aspirational aspect of an out-group (a group that does not feel fair enough by society's standards). A consumer's social identity can in this way be exploited by the brand.

On the other hand, a brand could also empower its consumers based on their social identity as we saw in a Dove advertisement of Natural Beauty in class. This seems like an easily replicable model for India.

I do see issues with the practicality of applying this strategy in India however. The out-group and aspirational tendencies towards fairness are very ingrained in society. My perception is that the natural beauty campaign may work for more affluent and educated groups but it may not be hard to convince other groups without a truly grassroots campaign.

[lizabbranding]

Corona

Despite struggles in the 90s with rumors about urine being in Corona and later on cancer causing ingredients, Corona bounced back by focusing on their strengths, which Viejo pointed out: "Our strength lies in that we combine a consistent advertising message with excellent sales fieldwork, good point-of-sale promotions, a fresh product, and reliable pricing.”

Corona offers a sense of reliability to customers, through pricing but also through the freshness of their product and the consistent message in their advertising. Corona has been consistent with their brewing being 100% in Mexico, which seemed to be an advantage vs. other imported competitors. They have also stayed consistent with their bottling and labeling - the bottle looks almost exactly the same as 30 years ago and could be recognized by anyone.

Not surprisingly, Corona is still fully embracing their "fun, sun, beach" tagline. Looking at their recent Instagram posts, you wouldn't even know that it is company that makes beer from ~90% of the posts. It is pictures of beautiful beaches around the world. Sometimes you see people laughing and smiling in those beautiful places while holding a corona but surprisingly infrequently. This is a very intentional way for Corona to continue to market the experience of drinking the beer, not just the product itself.

Heineken's approach is notably different. They are not depicting a lifestyle through their brand in the same way that Corona is, and their message has changed over the years. When you think of Corona, you think of the beach or a relaxed vacation, warmer weather. When you think of Heineken, at least for me, nothing in particular comes to mind. That alone shows the success of corona as a brand.

Corona's 2020 advertising campaign was "Find Your Beach" with several ads referring to the increase in people working from home. This was a clever marketing tactic which was consistent with former campaigns, playing on Corona's association with a worry free, relaxed lifestyle, but also addressing the increase in remote workers.

Corona's marketing tactics make it a product that stands our vs. competitors. As someone who isn't a beer drinker, Corona would be a brand that I trust for myself and if I were going to be buying for others. It is reliable and has positive associations with vacation and happier times! The other "mainstream" beers all kinda of blend together...

[sarahmalek1234]

Corona Beer

Background

Corona Beer, owned by Modelo, is a popular imported beer found throughout the US with a big goal, to be the leading imported beer in every country they compete in. The US is an important geography where they are falling behind on this goal, holding the number two position behind Heineken but limited in terms of a direct marketing affront given their limited budget. 

As such, Modelo is considering a few strategies: a targeted regional marketing strategy, increasing off-premise sales at places like grocery stores, or rebranding its US marketing strategy. But interestingly, and likely biased with the benefit of hindsight, they are not currently considering the skews that they sell as part of their marketing campaign. My recommendation would be for Modelo to expand its skews and use those new types of beer to lead the launch of its refined US marketing strategy. 

To understand the current state better, it’s worth analyzing the sentiment of each brand. 

Corona 

Corona’s advertising strategy focused on “Fun, Sun, Beach” since its creation. Their advertising strategy has helped create the light-hearted association of a warm day at the beach and an escape from reality when consuming a Corona. But has more recently run into issues around brand image such as that the beer was rumored to be contaminated with urine and that it contained 400 - 500 calories/bottle as well as that their glass bottles poorly protected the integrity of the beer. Expanding to new skews such as light beer or canned beer will help them to differentiate and move past this poor reputation. Additionally, it also helps them fit more closely with what consumers might want from a drink they're having while in a swimsuit, something low-calorie and in certain situations like poolside, not liable to break. This is matched with the campaign styles of beach days, light colors, and imaginative views to place consumers into that mindset.

Heineken 

Heineken has recently undergone a brand overhaul and is focusing on investing more in the advertising part of the business. Their campaign focuses on that Heineken is a simple, trustworthy beer that doesn’t disappoint. Their strategy has created a brand association of a classic beer that can be had at a dive bar after work or enjoyed with colleagues without judgment, a safe choice. This has worked with mixed success and there are clear weaknesses within the company, including that the marketing VP who ran the campaign was replaced by someone from PepsiCo who is pushing a new program called “Heineken Nights” that included consumers vouching on behalf of the product on video. Footage of that campaign was difficult to find but the below ad still captures the heart of it, simplicity based on tried and true experiences. The campaign has contributed to this consumer brand meaning by including darker colors and more references to day to day life.

Light Beer Revolution

Thus, as Modelo looks to identify how they can best differentiate in the market, doubling down on their tried and true approach of "Fun, Sun, Beach" while expanding to different types of beer such as low-calorie drinks or canned drinks is an effective way to capture a greater market share while maintaining true to their brand association. By using their existing brand, they can leverage what has brought them to number 2 within the US. Overhauling or regional branding can become confusing for consumers especially given there isn't a clear gap in their brand image so far, preventing them from being number 1. Instead, diversifying is more likely to fulfill consumers' needs and ultimately support them to dominate the US market.

[shaunyullman]

Corona brand was always targeted towards the young, mass-affluent, collegiately educated demographic within the United States. The emblematic lime and corona combination added a sense of leisure, playfulness, and zestiness to the experience of drinking this brand's product that connected to the aspirationally care-free, pleasure-seeking nature of college students. Heineken's approach was different - where Corona was light, carefree, and youthful, Heineken was serious and elitist. If you were to drink Heineken, you "knew" quality beer. Despite these differences, both brands were priced at premiums compared to domestic competitors.

Heineken's weaknesses came from the elitism - consumers didn't resonate with the mystique and haughtiness of a brand that cultivated a sense of exceptionality from a relatively familiar process such as brewing. Organizational struggles in the 1990s contributed to a lack of focus on establishing the legacy and continuity of the brand to grow sales.

Today, Heineken continues to capitalize on its premium brand by associating with other elite brands such as the Champions League in Europe and has "skunky, crisp" drinking experience that feels more weight and serious compared to Corona's lightness.