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Brands at Pitch Archetypes

At first, I was a bit unsure of how to frame this article for the purposes of a post for Branding class. Companies are constantly pitching their products to consumers, and so I thought it might be helpful to think about how different brands frame their foundational stories (or perhaps the public perception of those stories) for public consumption around the archetypes of pitchers presented in the HBS article.   

The Showrunner

Elon Musk’s ability to defy logic and reality, to present bold visions for the future and then deliver on them, is a large part of his success and the appeal of the company. You aren’t just buying an electric car, but you are buying into the vision of a brilliant person who is going to change the world. I thought this line particularly telling: “Showrunners also display and ability to improvise, a quality that allows them to adapt if a pitch begins to go awry.” That has Tesla’s disappointing manufacturing yields all over it.

The Artist

To some degree, these brands are represented by the most luxurious brands. The ones that present themselves as the most refined, those brands with products that are crafted with  meticulous attention to detail. Apple fits in this category, in its mythology, Steve Jobs represented to pitchman with an absolute focus on creating the best product. You still see that in the way that Jony Ive’s profile has been raised at the company. You can hear his voice narrating the processes that were developed and designed to refine each millimeter of the Apple Watch.

I think that you also get this pitch from a luxury product company like Patek Phillipe – with a focus on its unique focus on a single product and improving it over time. “Wanting the Perfect Numeral” as you can see in this video demonstrates the ends to which they are willing to go to in order to create the best watch. 

The Neophyte

These companies make a pitch to you based on a folksy “we’re-just-figuring-it-out” kind of sensibility -- we’re riding by the seat of our pants. This happens regardless of whether the foundational story is true or not. You want to buy into that and support them not out of sympathy but because you want to be on the team.  Nantucket Nectars did this with their ongoing pitch to consumers with the simple motto “We’re juice guys.” They aren’t claiming to be perfectionists, but simple guys who begin selling juice as a hobby on Nantucket.

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Now Introducing Prices!

American Well provides a unique opportunity for nudging -- let consumers know the price. In virtually every other area where we consume something, we know the price -- groceries, airline tickets, consumer goods -- and we respond accordingly. Medical services delivery and the veil of insurance make it nearly indecipherable for a patient going into service to know its cost. Similarly, doctors rarely know how much they will earn from a specific surgery as whatever they charge will be bargained down by the insurance company.

Price allows us to determine how valuable something is relative to our ability to pay. While healthcare is a unique good (i.e. it is essential to our existence), the availability of the efficacy of certain procedures and their relative cost may make us think twice before gettin the CT scan or additional procedure if there is only a 1% chance that it will add value. Currently, prices and costs are hard to determine in medicine. Under the health care bill that ultimately emerged, people are signed up for medical care in the case of catastrophe, but many of those basic plans don’t actually have affordable care for the smaller health issues. People must come out of pocket for those thanks to very high deductibles. It seems like many of those patients would be willing to use American Well in order to get the services that they want/need but be able to customize for their willingness to pay.  

My uncle is a physician and works with patients who have chronic diseases. About a decade ago he just stopped accepting insurance. Now, patients pay him directly and can request reimbursement for the services from their insurance company, but he is not part of that equation. They pay a fee each time they come through the door. He is also able to vary pricing for those most in need. Interestingly, he says that patients actually value the service differently when they know how much they are paying for it. This makes a great deal of sense to me. We know the price of an extravagant meal, why not know the price of service provided by someone who is saving your life?

Similarly, American Well can capitalize on this both from a public health perspective and a financial one. They could use nudging to incentivize or encourage individuals to visit with their primary car physician. By setting a low price, the insurance company can make sure that everyone visits the PCP regularly and potentially saves money. By revealing the price of certain procedures, especially extraneous ones, individuals may be able to better self manage their care. 

In some ways, this could be especially well suited for patients who have Health Savings Accounts.  Those accounts accept money tax free which individuals are then able to apply to medical expenses. It encourages them to save the money in there and take on fewer unnecessary procedures. 

Financially, American Well might actually do best to cut out the health insurance companies all together. While health insurance companies provide some legitimacy in the short term, and access to a group of doctors, American Well could plan for a future without health insurance companies. They could cut out the middle man, potentially grab some of those profits, and simultaneously allow doctors and patients to achieve better care for cheaper -- at least for those health issues that you can handle without an in person visit!

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The $230 Burberry Wallet

Back in 2007 a friend of mine purchased a Burberry wallet. He was casually showing it off to us, and I inquired, as I am want to do, “How much did it cost?” 

He responded: "$230.”

My jaw dropped. Just a few weeks out of college, I couldn’t believe that anyone would spend $230 on a wallet, much less one that had “Made in China” emblazoned in gold right inside it. To me, it didn’t look like much of anything. Perhaps you will see something different in the photo above (it now retails for $295 FYI).

Never a group of brand watchers, it was a surprise to all of us that he might spring for this. To us, he took the utilitarian approach:

“My Burberry wallet cost $230.  If every cheapo wallet i got lasted me less than a year and cost $30, it would take about 7 years for me to spend $230.”  

In response, he set a google calendar for seven year later:

“We'll all check back in at this appointed date and see how well the old Burberry is holding up.  Fair enough way to resolve this squabbling?”

Sure enough, the wallet still functioned in 2014.  

This made me think about how each of us are forced to become brand ambassadors/advertisers/disciples, especially with luxury goods. We have to justify the $230 price over and over again, especially with a crowd that is to unable to readily comprehend the value. This made me think of the readings from last class that described branding from Popper’s theory:

“The meanings associated with a brand in World 3 are always multiple and always equivocal because such meanings reflect individual differences in World 2.”

The role of individuals in World 2 seems to be especially important in luxury brands. Generally, individuals (World 2) do not want to appear foolish amongst their peers (World 3). While a purely functional object might not warrant suspicion, in some groups (mine certainly) the willingness to pay for something above the commodity price can create lots of questions. Why were you willing to pay so much for it? Didn’t you get ripped off? Was it worth it? The quality argument was very easily communicated/advertised to us, even though we weren’t yet disciples.

While I still don’t think it was worth, we still check in about the wallet to see whether it was worth the cost and perhaps this is good for Burberry that they are on our minds.  

I did check it with him for this class. The wallet is still functioning (but don’t most wallets?). Now though, the wallet sits in a storage box rather than his back pocket.

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Try Smaller Planes But All First Class

Singapore Airlines is at a pivot point. Do they cut the orders that they have for aircraft? Do they move forward and continue to grow with the new A-380 (very large) airplanes?

I looked at the Top 20 Airline Groups by Revenue at the end of the case. I was struck by the fact that the Net Margin for Singapore Airlines was 16%, the second place finisher was Southwest Airlines at 11.1%. They were second place in 1999 as well. While Singapore was clearly focused on the highest paying consumers and the highest quality service, Southwest places at a completely different part of the travel market. Characterized by cheap flights, no frills, and no assigned seats, they are also a primarily domestic player -- pretty much the polar opposite of Singapore Airlines. 

The “Southwest Effect” refers to a process whereby Southwest Airlines would introduce service at an airport and all of sudden there would be way more flights and way lower prices. Singapore Airlines might do well to could try to copy Southwest at an international level -- more flights and grow very quickly, but that would completely undermine the brand value that they have as a company (and was the focus of the case). They could still learn a lot from this approach.

It occurred to me that Singapore could cancel the pending orders for enormous double decker planes that will further erodes that net margin. There are only so many people that are willing to pay for premium service. The case study points out that there are other players at Singapore Airlines heels -- slightly less service for way less money. 

Singapore should capitalize on its premium brand and most loyal customers by transforming into an entirely new type of carrier. They could cream the best, most profitable traffic from other airlines and expand their footprint, all while ensuring enhanced service for those business consumers who drive the profit margin. 

Shifting to an all first class approach, Singapore Airlines might need to change the type of aircraft that they are purchasing (say 737s with farther range). Perhaps by buying smaller planes, they could reach out to new markets rather than do the code share process. They could also potentially brand their planes on the routes that Virgin has already staked out for them. In this case, they would not need to worry about the differentiation between first class, business class, and economy. Singapore Airlines would really stand for just one thing: first class!

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Turning Water into Wine

Reading this article I couldn’t help but think about the market for bottled water. First, the wine taste tests that were mentioned demonstrate that Chilean win near or at the top. Secondly, they show that few people can actually differentiate, unless someone tells them where the wine is from. We saw that there was an emphasis in the New World Wines to emphasize the grape type as a result of less known regions. So if it is all basically the same, what about a product that is the same: water.

On the American front, I think of Poland Spring as the pre-eminent, or at least the original, brand. It is branded upon the specific Spring (actually it’s a lot of other springs too) and the images that it conjures up -- snow, nature, pure. But while Poland Spring was first to the market, by volume they are getting crushed by other brands Aquafina, Dasani, Vitaminwater. I couldn’t dig up a chart on what it looked like in 1990, but I would guess that there was basically just one major brand in the country: Poland Spring. 

So why didn’t all of these other companies follow the regional approach? It seems like you could equally emphasize the unique qualities of Vermont, Minnesota, or Appalachian water. Here’s how the breakdown looked of market share recently:

All of these other brands are basically just purified tap water. For Aquafina, there is a totally different approach, focusing mostly on the bottle (the caption for ad below is The New Shape of Pure): 

Even premium brands differentiate themselves by their bottles, something not normal in the wine market (to my knowledge):

What if the Concha y Toro team thought more from the latter approach: “All wine is basically the same. What we are going to focus on delivering you a more interesting package -- strangely colored corks, funny bottle design -- that makes our product memorable. It doesn’t matter that we are Chilean, or what anyone thinks of Chilean wines. We are our own unique wine product and we can choose to play at the top or at the bottom and bring the customer along with us.”

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It seems like Corona’s advertising hasn’t actually deviated that much from its original approach. Perhaps this is effective in creating a brand identity. From a beer consumer perspective, the Corona commercials ring a bell just from what we read in the case study, I wasn’t aware whether I have ever seen a Heineken ad. The only thing I know about Heineken is the fact that it comes in a green bottle. While I had never thought of it before, I know what Corona represents -- vacation. Heineken doesn’t necessarily suggest premium to me in the way that say microbrews now do, it suggests just another big brand of beer. This reminds me actually of Apple which has basically used the same ads -- white background with the product -- since the imac era over 20 years ago. This reinforces an image of simplicity and beauty. Perhaps there is something timeless about a simple message and a simple ad and then just doing iterations of that to build and maintain the brand.  

Meanwhile, it looks like Heineken is still trying to find its image. As recently as last week their ad below (since pulled) is both a knock off of the laid back vacation vibe claimed by Corona and comes off as racist.  

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It looks like Corona won the competition hands down here! According to this, by 2017, they control almost 50% of the American market, compared to about ~20% for Heineken (Heineken +Dos Equis + Tecate). I’m going to search for some additional graphic to add as well. I’m still learning how exactly to use Tumblr for class!

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Corona