vz-on-branding-blog

[vz-on-branding-blog]

Pure Barre, pure brand?

Since Pure Barre’s 2018 acquisition by Xponential Fitness (itself backed by Snapdragon Capital), I have had the good fortune to have a first-row seat for the Pure Barre re-brand show (which tl;dr has gone very well and successfully leverages client-created brand content). For about 6 hours a week, I’m a Pure Barre instructor who leads groups of 20-30 people through dance-inspired strength workouts!

This is me, teaching a Halloween class!

Let me be clear - Pure Barre was not exactly struggling before its most recent acquisition; in fact, with nearly 400 studios in operation, it was the largest, most established barre franchise in North America. But the fitness industry is crowded and competitive, and Pure Barre’s franchise model means every studio is independently owned and operated. The flexibility and autonomy marketed to studio owners sometimes became problematic for corporate headquarters, whether due to inconsistent in-studio experiences or market-based pricing disparities (a single class costs $20 in Kansas and $36 in midtown NYC).

Xponential Fitness tackled this issue head-on, and took a bi-directional approach to the rebrand - something I would strongly recommend for other brands looking to transform how they’re perceived by clients. 

First, they created a new visual identity at the corporate level: a refreshed aesthetic, a new tagline, and new brand guidelines that were distributed to franchisees. This was Step 1 of their plan to shift the relationship between Pure Barre and its clients from emotional to sustainable. But as brands today must recognize, top-down change is not enough. 

Pure Barre’s Instagram posts from early 2018 (before acquisition, on L) and later in the year (rebrand launch, on R).

What sealed the deal was Step 2: Pure Barre’s ability to energize its client base to create its own content, bottom-up. The most recent campaign can be found under #PureResults on Instagram. Pure Barre is encouraging women (and men!) across the country to post their pictures, and stories, of how Pure Barre transformed their lives, and the people. are. serving. it. up!

Real women, doing real things!

While corporate content defined a new myth, a new aspiration, client-created content gives other clients (current and potential) a more relatable reference point, humanizing the brand. By showing and not telling, Pure Barre has been able to spread a vision of what a client’s sustainable relationship can look like, from corporate headquarters to the franchise level.

And while there are not yet published numbers on the impact of the rebrand, I can say anecdotally that my classes have never been busier with long-time AND new clients.

[vz-on-branding-blog]

Trying to do too much: Burberry, they’re just like us

As a former one-item-aspirational-Burberry-check-owner, I felt some satisfaction from reading the case and seeing this quote from Stan Tucker (head of menswear in 2003): “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.”

Everything about that sentence makes me concerned about Burberry’s brand longevity. How are you supposed to create things equally loved by both new college grads and new grandfathers? As my mother, past managers, and Sloan professors have all reminded me (dozens of times), you can’t please everyone. Trying to do so will drive you crazy.

Yet, broad appeal continued to be a key strategic goal for Burberry, even after Rose Marie Bravo took over the CEO role and began to transform the company. While Bravo led an initial SKU reduction, the company continued to redesign its traditional products, extend product lines, and move upmarket to haute couture. Each new category may have had its focus, but Burberry’s overall brand remained scattered - diluted.

Hindsight is 20/20, but I’d like to imagine that if I’d had a seat at Bravo’s advisory table back in 2003, I would have suggested a sharper focus on one customer segment. To that extent, I love the idea of Burberry Brit. The company sounded specific about its target: a woman in her 30s, English, and charismatic. This vivid personification would help Burberry position itself in one segment of the market.

What’s more, focusing on a target customer does not mean you alienate all other customers. For example, something marketed to women in their 30s is also likely to catch the attention of those womens’ partners / significant others, younger women who want to be more sophisticated, and older women who want to feel younger. 

(Side note: Burberry shouldn’t feel too bad about its diluted brand in the early 2000s. I used to visit my family in China every summer, and saw malls FILLED with knockoff designer goods).

[vz-on-branding-blog]

Behavioral science for data science

My branding lab team is looking at a data science company in the analytics space, a crowded yet growing software sector. Our initial focus has been on how the company can differentiate on the language in its messaging. For example, many other companies’ messaging highlights “self-service” features or that “everyone can work with data,” when those promises often aren’t true. 

The Chase & Dasu HBR article made me think, should our company instead differentiate on service? And if so, how might we integrate the behavioral science-based operating principles into a software product? I am especially interested in exploring how to embed Principle 4 (Build Commitment Through Choice) in a digital user experience. Doing so should strengthen our brand perception among prospective / new users as well as continuing customers. 

Principle 4 also tackles one of our leading hypotheses on why non-technical people shy away from data science tools: they’re nervous. Nervous because they don’t have a technical background, nervous about the accuracy and cleanliness of their input data, nervous because most data tools are inexplicable “black boxes” (seriously - even the folks at NASA’s Jet Propulsion Lab aren’t sure). 

I am eager to see whether attitudes change when we give users more control inside the analytics software, even if that change is merely symbolic. It may be difficult to actually open an algorithm’s black box and show users all of the attributions, but we could let users feel like they are more involved in the process. Provide a menu of options for output formatting, runtime, sharing - all options that should not heavily impact the back end, but completely change how a user experiences our software. And in the decades-long battle to pivot service management to focus on the customer’s perspective, displaying those options could go a long way.

[vz-on-branding-blog]

I take wine recommendations from The Parent Trap

Like 12-year-old Lindsay Lohan, I’m partial to a California grape.

Like most consumers, that preference is heavily influenced by my perception of wines’ region of origin. I’m not sure when I learned it, but for as long as I can remember*, I have believed that French and Napa / Sonoma Valley wines are unequivocally superior in taste and quality. 

*In other words, this belief is not at all based on facts or lived experience. 

So when I’m asked whether Concha y Toro should go A) “bottom-up” or B) “top-down” for its 2006 profitability turnaround, my initial answer is neither: both options fail to address the root cause of Chilean winemakers’ struggles.

A More Productive Suggestion

What if Concha’s strategy went beyond its four walls? Rather than solely changing its own market segmentation, I encourage Concha to make friends with Chile’s winery trade associations, especially in light of their creation of Wines of Chile - an entity dedicated to building the “brand of Chile”.

Pull Levers That Matter

Regardless of whether Concha chose strategy A or B, it would eventually run up against the limiting factor of Chilean wines’ global reputation. As mentioned in the case, at the time, wines exported from Chile were price-penalized due to their country of origin. Though some premium Chilean wines had recently received global acclaim, the brand value of “made in Chile” was nowhere near what was required to revive Concha’s profits.

Concha’s best investment is in the brand of Chile, which would elevate the entire region’s industry reputation. Though it may take longer to see the pay-off and requires coordinating with other parties, such an investment will allow Concha to reach its highest potential as a winemaker.

Concha’s current options would only lead it to reach the top of a sub-optimal market. If the company invested in a bottom-up strategy by promoting Concha’s premium brands, the brand-focused focused marketing would not move the needle on perceptions of Chile as a winemaking region. If Concha instead went top-down, it would have to rethink its value chain and commit to inorganic growth through acquisitions. And considering that acquisitions destroyed $226 billion of shareholder wealth over 20 years... I’ll let that stat speak for itself.

[vz-on-branding-blog]

Make turtlenecks red again?

Bear with me -- this is not a post related to my class syllabus. But this article, from page 1 of yesterday’s WSJ Business section (print edition), caught my attention. It highlights the potential of individuals (in this case, Tiger Woods) to power entire brands (Nike Golf). 

In 2010, the golfer’s endorsement worthiness score was 51.27, which is comparable to the current rank of actor Charlie Sheen and disgraced former cyclist and onetime Nike endorser Lance Armstrong, according to an index put out by the Marketing Arm, which polls consumers to evaluate celebrity appeal, image and influence on consumer buying behaviors.

The sneaker giant was one of the very few companies that stood by the fallen athlete. In his memoir, Nike founder and former CEO Phil Knight said Mr. Woods was like family and one of the first people who called him after news broke of Mr. Knight’s son’s fatal scuba diving accident. “I will not stand for a bad word spoken about Tiger in my presence,” he wrote.

Before the scandal, Mr. Woods earned roughly $90 million a year from his marketing pacts and was seen as the most powerful endorsement figure in sports. Now, Mr. Woods earns an estimated $42 million in endorsements, which include Nike, golf equipment maker TaylorMade, golf ball maker Bridgestone and motorcycle manufacturer Hero MotorCorp., according to Forbes.

Kind of makes me think about how Nike once let Steph Curry slip through its fingers. Individuals matter!

[vz-on-branding-blog]

When the sparkle fades: Heineken vs. Corona, and other beverage lessons

I’ll be the first to admit that I really don’t like beer. I’ve tried very, very hard to develop a taste for the bitter, bubbly stuff - to no avail. And yet, when someone mentions Corona, I’m immediately transported to visions of sunny beaches, a slice of lime, and a deep bowl of guac. When someone mentions Corona, I want to like beer. 

Heineken on the other hand? Honestly, I couldn’t tell you the last time I saw a can or bottle, much less the last time I heard its name mentioned. While I am only one consumer, and do not fall in the target demographic for either brand, the arcs of Corona and Heineken (both US brand imports) brought to mind a more recent, ongoing beverage battle, this time in China: Starbucks vs. Luckin.

Starbucks Becomes 星巴克

The first Chinese Starbucks opened in 199, and the chain has since grown to a footprint of 3,600 cafes. Just as Heineken did when it entered the US market, Starbucks initially focused on product quality and import premium to grow its Chinese market share. After emerging from Communist rule, Chinese consumers became status-obsessed. Product quality was a suitable focus during Starbucks’ market entry, because middle- to upper-class Chinese consumers were eager to access a Western way of life: clothes, bags, cars, and food. Brand names imported from the Western world meant everything. 

Adjusting to Customer Demographics

Just as Heineken had to reposition its brand to sell to a younger generation of consumers, Starbucks learned that their vaunted brand still required tweaks to succeed in China. For example, Starbucks introduced market-specific menu items to cater to Chinese taste buds, including moon cakes, Chinese teas, and even a strawberry cheesecake frappuccino. The brand even opened one of its impressive Reserve Roasteries in Shanghai (described on Starbucks’ website as “immersive, theatrical spaces where Master Roasters, mixologists and baristas coax perfectly flavorful expressions from our rare, single-origin coffees”).

But Who Really Knows the Customer?

Despite these efforts, Starbucks still faces real competition in the Chinese market - just as Corona threatened Heineken’s late-1990s dominance. A homegrown startup called Luckin seems to be taking a page from Corona’s competitive playbook: they’re still marketing quality, but in a friendlier way that’s resonating more with core customers (young adults). I mean, don’t these people look like tons of fun? 

And Luckin is not taking it easy: the company “said it was targeting a total of more than 4,500 stores by the end of 2019, which would take it past Seattle-based Starbucks that has long dominated China’s coffee scene and has over 3,600 stores in the country.”

So a word of advice to Starbucks’ ad agency, from Heineken? Nothing (about your brand in a foreign market) is sacred. Don’t wait to adapt, because #2 in the market is coming for your customers.

[vz-on-branding-blog]

When “it’s what’s on the inside that counts” - and when it’s not

Some thoughts on “Intel Inside” - one of the greatest branding successes of the late 1990s tech scene. For those who are unfamiliar, I’ve provided background context, followed by major issues, how Intel solved them, and parallels to Apple’s iPod line.

Context

By 2001, Intel had risen to #41 on the Fortune 500 list and held an impressive 78.7% share of the PC-related microprocessor market. However, tides were beginning to turn: after hitting then-record revenues of $33.7B in 2000, the company saw its revenues drop to $26.5B in 2001. To turn things around, management needed to make bold decisions about Intel’s brand and marketing strategy.

Key Issues

What’s interesting, and ironic, is that Intel was partly responsible for creating its own enemy: unrelenting competition in a growing market. Intel had a long track record of blisteringly fast innovation, releasing new chips ~1x/year with performance improvements of orders of magnitude. This allowed Intel to rapidly grow in an uncrowded market, but also set an industry standard for high-speed product releases and created a whole category of PC-related media. This came back to bite Intel when companies like AMD, Texas Instruments, and Cyrix began producing Microsoft-compatible chips in the mid-1990s. The new entrants innovated quickly, and ate up market share as cheap PCs flooded the market. 

Another challenge for Intel was rapid growth of portable digital device sales (cell phones and PDAs - for the youngins, ask your parents if they had a Palm Pilot). In the early 2000s, it held just 1% of the cell phone chipset market. As desktop computer sales slowed, Intel had to choose their path in the mobile device space.

Intel’s Solutions

One of Intel’s early solutions to flagging sales was the introduction of the “Intel Inside” campaign. The campaign was built on the insight that end users, not just computer design engineers, needed to know about Intel’s product differentiators. The team started with some market research, then through a quick-and-dirty billboard experiment, showed that marketing Intel directly to consumers had a meaningful impact on sales. This proof point was expanded to the umbrella brand of “Intel Inside”, which included a co-op advertising program to appease OEM partners.

Branding took on new meaning for Intel, as the “Intel Inside” campaign expanded and successfully introduced dozens of products to the market. Marketing and product development started to work hand-in-hand. 150M Intel Inside stickers were printed in 2001 alone, and Intel was ranked by BusinessWeek/Interbrand as the 6th most valuable brand in the world. You’ve definitely seen the sticker, potentially without noticing it.

And that last piece is the real issue. As Intel’s business grew, the clarity of “Intel Inside” branding began to fade, and the company had to compete in new areas. For example, Steve Jobs was not going to mar one of his Mac products with a blue sticker. Which brings me to...

Lessons for Apple’s iPod

Seeing the long list of Intel chips and their release dates reminded me of Apple’s many iPod iterations. Much like the “Intel Inside” campaign, iPods enjoyed massive success when they were first introduced. Eventually, sales slowed as competition entered the market, and Apple had to innovate (in product and branding) to keep up. Eventually, broader market trends shifted (for Intel, it was PC to mobile; for Apple, it was MP3 to smartphone), and Apple’s own products (iPhone, strengthened by App Store) killed its earlier ones (iPods).

Logos courtesy of https://logos.fandom.com/wiki/Intel_Inside. iPod evolution image found on Pinterest.