Branding

The Humanity and Biology of Brands

First a confession: When I was at University, I struggled with the concept of branding. An odd thing for someone in the business of building brands to admit, but it’s true; as a concept branding never made much sense. Every book had a different theory, every agency offered a different approach and every expert had some unique model or metric. Depending on who you talked to, or what you read, a brand could be a pyramid or a personality, an experience or an equation.

It seemed that branding was either the most compelling and complicated topic in marketing, or it was a load of crap.

Now an insight: Brands are like human beings. They exist as a mirror of our motivations, reflecting our ideals and dreams, fears and frailties. Nothing can exist in branding that doesn’t already exist in our everyday lives. In fact, if we want to better understand brands, we don’t need more complicated metrics, we need to better understand ourselves.

So how can we gain a better understanding? We need to go back to basics and re-consider the psychological and biological parallels between human beings and human brands.

Just like people, brands are born. Where a brand is born and to whom, are important factors in determining its development. A brand may have great nature (visual appeal or personality) but without the right nurture (parental support and security) it may never survive. As marketers, what type of parent are you and how will that affect the development of your brand?

Just like people, brands go through adolescence. Very few brands can become an overnight success; indeed it takes time to establish an identity and become independent. Attempting to circumvent this process can be as detrimental for a brand as it is for a person; the childhood stars of today are the forgotten failures of tomorrow (think Macaulay Culkin or Extreme Football League). What was your brand’s adolescence like; did it experiment and gain experience?

Just like people, brands need the right environment. As Prof. Richard Florida found in his study of cities, “the place we choose to live affects every aspect of our being. It can determine the income we earn, the people we meet, the friends we make, the partners we choose.” The same can be said for a brand. A brand must pick a place that will help it build relationships and earn the income it needs to survive. Is your brand in the right environment, an environment that matches its motivations?

Just like people, brands can get sick. We like to believe that we, and the things we create, are invincible - but nothing could be further from the truth. Human beings and brands are fragile and prone to illness. Even the strongest leaders can get sick (Bill Clinton or Toyota) and without proper treatment they may die (Michael Jackson or Pontiac). When was your last brand check-up, do you have insurance, or are you working your golden goose to death?

Just like people, brands must reproduce. Reproduction isn’t just fun, it’s fundamental to our survival. By reproducing we allow our species to adapt to the environment and evolve. A brand must also reproduce; it must adapt and evolve itself in order to maintain relevance and to respond to changes in the environment. Is your brand ready to reproduce?

As a brand strategist, having worked across three continents with many multinational clients, I believe there is something missing in our understanding of branding. As a morphological researcher, I believe what’s missing is an understanding of their humanity. Because brands are more than a metric or a model, they are a mirror of our psychological and biological motivations; and to properly understand them, we must better understand ourselves.

By Nick Black, Vice-President of Strategic Insight, Concerto Marketing Group

The Tribe has Spoken - Are You Listening?

I met Marty Neumeier (renown speaker and author of Zag, Brand Gap) when he was conducting a workshop at the Design Exchange. In conversation, Marty shared that he began his career implementing brand strategies only to realize there were a lot of flawed strategies that execution couldn’t fix. This prompted Marty to focus his effort on brand differentiation – the #1 strategy of a successful brand in Marty’s eyes. If you’re looking for verification of the power of differentiation think IPOD. 4th to market in the MP3 player category, Apple has 72% market share, a price point that is 2 to 5 times higher than the competitors....well I think you get the idea. High performance brands are way out in front in terms of loyalty, profitability and they’re tough to beat – unless of course you find your own unique way of differentiating.

One of the first rules is you can’t be all things to all people. In the session Marty talked about knowing your “tribe”. I caught up with Marty to get further clarity on why the tribe matters. “You have said the emphasis today needs to be on the Unique Buying Tribe rather than the Unique Selling Proposition. Can you explain that?”

Marty Neumeier: The Unique Selling Proposition was the brainchild of Rosser Reeves, an advertising genius from the "Mad Men" days. He worked for the Ted Bates agency and wrote a bestseller called, "Reality in Advertising." His thesis was simple: Advertisers need to focus all their energy on one strong claim or one strong concept. In a time when the industry believed "the more you tell, the more you sell," this was a refreshing idea that caught on almost immediately. It was so powerful, in fact, that to this day advertisers search high and low for "the big idea" to hang their campaigns on.

There's nothing inherently wrong with this inclination, as far as it goes. Without a unique value proposition, your campaign---and your business---will lose focus and have no compelling point of differentiation. The problem is that the principle now seems dated. Customers today don't like to be sold. What they like to do is buy, and they buy in tribes. Every brand has a tribe that supports it. If you talk WITH your tribe, they may well continue to support it. If you talk AT your tribe-using manipulative one-way conversations-they'll tune out in a New York second.

So rather than focusing on a Unique Selling Proposition, focus on a Unique Buying Tribe. If you find the right tribe and give it the right stuff, you'll get enough love to sustain your brand. People crave tribal identity. What they want to know is, "If I buy this product, what will this make me?"

Thanks Marty for sharing your insights. Marty is currently Director of Transformation at Liquid Agency.

Who Won the Superbowl?

Okay, I admit it. While you're reading this during the week at some point after the SuperBowl aired and know who won, I'm sitting here writing this blog entry on SuperBowl Sunday instead of watching the big game. And while I'll be interested to hear who won (Go Saints?), I, like you, will go online tomorrow to find out who advertised and which spot was the funniest or most outlandish. And then I'll go on with my day and probably never think about those spots ever again.

However, the Superbowl is the most watched televised event of the year with some 100 Million people expected to watch. According to a recently televised report, a 30 second spot on American TV during the Superbowl will go for between $2.5 and $2.8 Million. That's about $80,000 a second!

But the larger question being asked these days, especially by a lot of young people I know, is whether that money could be better spent. Especially with everything that's going on in the world right now.

Now after years of producing some of the most memorable Superbowl ads in history, PEPSI is asking the same question and has decided not to run an ad. Instead, they're going online with "The Pepsi Refresh Project". http://www.refresheverything.com/

According to their "refresh everything" site, they're looking for people, businesses, and non-profits with ideas that will have a positive impact. "Look around your community and think about how you want to change it." Submit your ideas and vote on your favourites. Those chosen will be awarded up to $250,000 in grants in categories ranging from Health, Arts & Culture, and Food & Shelter to the Planet, Neighbourhoods and Education.

And the so-called Pepsi Generation is eating it up. This is just one example of what's going on right now. We saw the impact the internet and social media had and is having post-Haiti. This is more of the same great trend. The NetGeneration is getting involved and looking for something more fulfilling than a gratuitous 30-second spot where the money spent to buy the media could eradicate so many issues affecting Haiti, Cambodia and the Congo to name a few -- and those affecting us right here at home. Pepsi is on to something and other brands ignore the trend at their peril.

Green Marketing and Brand Strategy

The latest research indicates that uncertain economic conditions have resulted in a decline in the core group of “Green Involved” consumers who would pay a premium for green products (17% in 2008 to 15% in 2009). The study (nationally representative sample of 2,465 adults, ages 18+) indicates that 2.7% of shoppers account for 70% of “informed and conscious green” purchases. Moreover, only 1 in 10 “green” shoppers is an “organic” shopper. Grocery transactions tend to be larger when green products are in the cart. In addition, 38% (45% in 2008) of Canadian consumers feel "highly concerned" about environmental issues. Even though consumers who feel “highly knowledgeable” about these issues increased to 29% (26% in 2008).

Transition to the mainstream

The transition has been driven by mainstream brands. Today, green has become another product attribute in a matrix of good-better-best benefit hierarchies. Tide has "biodegradable" ingredients. Others are labelled concentrates and cold water detergents. These are add-on benefits and enhance the core value proposition of the brand. They do not replace that core value proposition (superior product performance).

Today's customers are more demanding. They don’t believe all the claims being made by marketers- a fall out of greenwashing. Consumer scepticism has led marketers to include eco labels in their communication strategies. North America has over 350 eco-labels offered by trusted third parties. Marketers have laucnhed blogs and social networks with "fans" who contribute new product ideas. Method has its own Facebook page complete with a wall of comments from many of their 7,415 "fans" and a Twitter following of 3,284 users. Tide has 104,235 Facebook fans.

Please email me for additional insights from Arcus Consulting Group's studies on changing market drivers & successful strategic responses.

"Confirmation Bias" and Brand Loyalty

Our minds hate change. Several studies have shown that people are twice as likely to seek information that confirms their beliefs than they are to consider evidence that contradicts them. This "confirmation bias" can influence how consumers and marketers make decisions.

Henry Ford famously said, "If I had asked my customers what they wanted, they'd have asked for a faster horse." In other words, the road to true innovation is rarely illuminated by customers telling you what to do next; they may often not know what they want next or rely on a "confirmation bias" about their preferences.

Most innovative marketers say that fighting confirmation bias is a never-ending battle. But if you can't conquer this gremlin of your own mind, you don't stand a chance of outwitting your competitors.

We see this behaviour in all our decisions. A case in point is how retail investors hold on to stocks in a falling market, believing that the markets will rise, without any empirical evidence that this is likely to happen. Consumer confidence is a big driver of purchase behaviour. If consumers believe this recession will last a lot longer than it will because they recently lost their jobs, they are likely to scale back discretionary spending even after they find a new job because of a "confirmation bias".

In short, the human mind acts like a compulsive yes-man who echoes whatever you want to believe. Psychologists call this mental gremlin the "confirmation bias". A recent analysis of psychological studies with nearly 8,000 participants concluded that people are twice as likely to seek information that confirms what they already believe as they are to consider evidence that would challenge those beliefs.

Why is a mind-made-up so hard to penetrate?

Psychologists say its easier for consumers to repeat decisions than to take new ones. Whatever decisions consumers are inclined to make, are the decisions consumers are likely to go about justifying. It's simply easier to focus our attention on data that supports our preferences, rather than to seek out evidence that might disprove it. "Confirmation bias" is one of the biggest drivers and often under reported influencers of brand loyalty. It transcends the usual influencers such as product performance, emotional empathy and brand recognition.

It also is easier for people to rationalize than to be rational. Consumers and marketers are very good at cooking up post-hoc explanations of why our predictions didn't work or why we made some decisions. We tend to reinterpret our failures as near-misses.

The more you learn, the more certain you become that you are right. While gathering more data makes people more confident, it doesn't make their predictions much more accurate. Each new fact makes you more inclined to find another fact that resembles it, reducing the diversity and value of your information.

Confirmation bias contaminates the thinking of brand preferences of consumers. A lot of psychological traps can be combated with humility, but on this one, that doesn't help. For example, several North American auto companies missed the significant growth opportunity in fuel efficient cars because they clung to outdated strategies for gas guzzling SUVs and eroded brand value with carrots such as 'employee pricing'.

So how can marketers counteract confirmation bias?

A way to approach it is to imagine that you have looked into a crystal ball and have seen that your strategy has gone bust. Next, come up with the most compelling explanations you can find for the failure. This exercise, which some of the most innovative and successful marketers have integrated into their research process, can help you realize that your beliefs regarding why consumers might or might not prefer your brand might not be as solid as you thought.

Try estimating the odds that your analysis is wrong. Let us say that you reckon there is a 20% chance of an adverse outcome; that is like saying you will be proven wrong one in every five times. This way, if the investment does go awry, you will be less likely to dig in your analytical heels and desperately try to prove that you are still right. This procedure provides "psychological cover for admitting that you're wrong."

Show your ideas and strategies to another person you respect whose ego isn't already invested in the decision. Ask: If you didn't have to take this decision, would you still agree with it?

Run an imaginary strategy alongside your real one. There, you can change it at will, with no risk to your brand portfolio. On that blank slate, would you do more—or less—of your existing approach to strategy and consumer engagement? Some organizations require each team member to run a stress test of their brand portfolio and to justify any differences between their paper strategies and the company’s real-world plans. It helps senior executives know what people really think.

Before you decide on a marketing or business strategy in the first place, write down a statement of what would compel you to change your view of the strategy. If any of those influencers come to pass, the written record will make it harder for you to pretend nothing has changed or that you don't have to do anything in response.

Please email me if you would like to receive Arcus Consulting Group's series on "Better consumer engagement strategies".

Watch This...

http://www.youtube.com/watch?v=sIFYPQjYhv8

Are you in?

Marketing Through Customer Engagement

Over a last 6 months I’ve been hearing a lot of companies talk about changes in marketing, changes in the way we target and communicate with our customers. Recently, I attended a conference where the focus was on Customer Engagement Agency Model. The conference included good representation, with recognized industry leaders and speakers, both on the marketing service provider (MSP) and client side.

Several years ago marketers were ahead of technology, coming up with ideas and strategies that couldn’t be executed as the technology that existed then did not support most of their initiatives. Today, most if not all marketers, in order to be competitive, need to catch-up with ever-growing technology. With online marketing, especially social media, customers have more channels to share their comments and feedback more quickly, reaching millions of potential viewers instantly. New marketing models allow companies to integrate online and offline channels and, through social medial listening tools, marketers will be able to react quicker to consumers’ needs and feedback. Twitter, Facebook, My Space and other channels provide consumers with many ways to get feedback from other consumers (not from product companies directly) and to read reviews of products they are about to buy. People trust their friends and colleagues more than marketers.

The end goal is for consumers to become brand advocates and help companies market and sell their products. Online analytics coupled with technology and marketing strategies will help marketers reach out to the right people at the right time with the right offer.

Is your marketing strategy changing in order to stay ahead your competitors?

Jacob Ciesielski, Partner at FSA Datalytics, is a member of CMA’s Marketing Technology and Database Intelligence Council

Consumption smoothing - how to stress test your marketing strategies

Will a cut back in consumer spending have a dramatic impact on your business performance? The key to succeeding in these challenging times is to explore scenarios that you haven't looked at in the past because business cannot use the same strategies for a different set of economic conditions or marketing outcomes. Consumption smoothing is an emerging trend that may be of interest to marketers. It’s a popular approach used by consumers to insure their consumption in the presence of risky and variable incomes.

What is Consumption Smoothing?

Consumption smoothing is an economic concept which seeks to balance spending and saving to attain and maintain the highest possible living standard over the course of one's life. This idea is notable because of its difference in approach to common knowledge about consumer behaviour during periods of economic growth. However, in uncertain times, the concept can have a significant impact on the growth and profitability of your brands if you identify customer groups who are most likely to experience consumption smoothing.

What does this mean for marketers?

Here are five ideas on how senior marketers could approach this emerging trend:

1. Explore new consumer segmentation models.

Account for risk profiles of your most profitable customers. Adding a variable that measures attitudes to risk may provide an indication of how consumers will react to changes in household incomes, economic conditions and pricing changes.

2. Revise price elasticity models.

Research indicates consumer behaviour in a crisis is characterized by consumption smoothing at various levels. In sum, these behavioural adjustments result in significant reallocation of consumption expenditures depending on the profile of your most profitable customers. Brand portflio pricing strategies that account for potential shifts in purchase patterns can deliver more profitable growth strategies.

3. Assess the potential impact of consumption smoothing on your brand portfolio.

Consumer smoothing is accentuated in some categories and for some brands that have specific profiles that make them more vulnerable to changes in economic conditions and consumer spending patterns. Using scenario planning techniques may result in increased visibility of potential strategies.

4. Ask the right questions.

Often marketers take the approach of looking at their competitors for cues on superior strategies. This could be a suboptimal approach if these strategies do not undergo rigorous stress testing for emerging consumer behaviour.

5. Look at best practices from past recessions.

Explore successful strategies adopted by brands with similar profiles in past recessions. The analysis may shed some light on opportunities for initiatives that can lead to superior results.

Please email me if you may have any questions or would like to receive more information about consumer smoothing trends in your product category.

Hybridization -- And the Changing Landscape of B2B Branding (the hidden challenges)

About a year ago I upgraded my laptop. My search for a new model started at the Dell website but ended up at the company’s booth at the consumer home show (somewhere between the condiments and electronic brooms) and ended at the Dell kiosk at Sherway Gardens shopping mall. What’s Dell to do with customers like me who look for a serious business computer at shopping malls and consumer home shows – but that, unfortunately, is the essence of “hybridization”.

The “fruit” wars -- iPhone versus Blackberry – last winter the New York Times featured a run of full back page ads for the iPhone in the business section – targeted at business customers and focussing on the iPhone’s powerful access to Internet business applications. RIM, on the other hand, has claimed for a while that the large majority of “new” Blackberry customers are consumers (not traditional business and government users).
In addition to overlapping into each other’s “territory”, RIM and Apple also appear to have different marketing approaches: Apple basically markets ONE smartphone model (the iPhone), tends to focus on a myriad of applications.

By comparison, the Blackberry comes in several models (at last count there are nine featured on its web site excluding half a dozen versions for each of the Pearl and Curve).

Dell, Apple and RIM are all basically marketing “hybrid” products – a trend initiated mostly by B2B companies expanding into the consumer world. Even companies that deal mostly with business suppliers and customers are becoming more and more conscious of end users and consumers.

Hybrid products (and companies) have a unique set of challenges -- how to match different products/models with specific target audiences; how to accommodate consumer versus business audiences and differing (and sometimes incompatible) needs and requirements; how to prioritize all of these issues.

“Hybridization” is more complicated than it appears:

• About one fifth (22%) of the Top 100 Interbrand brands can be categorized as hybrids and outnumber the “pure” B2B brands (8%). But the fact is that many “pure” business brands don’t have a hope of making it to the top of anybody’s list. The top hybrid brands spend an enormous amount of money ($$$) on both consumer and business marketing which substantially increases their brand profile (and equity).

• “B2B companies shouldn’t try to become consumer brands... but they should seek to attain the maximum value possible within their industry (from the Hidden Wealth of B2B Brands)”. Pure B2B brands consistently achieve lower brand equity scores – in a recent ranking by Corebrand the strongest “pure” B2B brand was Caterpillar with an equity rating of 12% (versus 18%/19% for hybrids like Fedex and UPS); the next highest “pure” B2B brand was Emerson with an equity measure of only 5%.

• B2B versus B2C – these represent two very very different buying, marketing and branding processes. The problem is that the business side of these processes is not well understood. Identifying and profiling business target audiences is a complicated process: there can be several audiences within a client company (from C-levels to buyers to end users); there are secondary influencers (external to the business customer but either directly or peripherally involved).

• B2B trumps B2C – business suppliers, customers and intermediaries often have excellent “insight” into end users and consumers. Business intermediaries should be asked to provide feedback with respect to new products, services or marketing strategies before they are rolled out to consumers.

• “I find that there is currently a blurring and fusing of B2C and B2B research... and there is less of a desire to identify B2B and B2C research as separate or different disciplines” – these are the words of Phyllis Macfarlane a longstanding member of the U.K. B2B research community. B2B research has the same issues as B2B marketing – and also requires a better understanding of the business buying, marketing and branding processes.

Top Two Branding Blunders

Why oh why do companies fall into these branding traps that wind up costing them a ton of cash for virtually no return or worse yet, actually cost dollars in lost revenue. There are two big branding blunders (I’m sure there are more than that, but these are the ones that immediately come to mind) to be aware of if you are considering rebranding.

1: Fixing what isn’t broken

Change is not always good; there is something to be said for the familiar especially in tumultuous times. Take the “new look” of Tropicana orange juice. A US 35 million dollar blunder. Yes, that’s right, a 35 million dollar blunder (and that’s only the first 2 months not the final tally). Thanks to the new simplified look of Tropicana, consumers mistook them for a "bargain basement” no name brand and walked right on by and purchased a competitor’s orange juice. The Tropicana look was not broken. They were not losing market share. There is something to be said for the comfort of a familiar logo. That orange with the straw sticking out of it and dark green lettering for me represents premium, freshly squeezed OJ and it makes me feel good. And that’s what matters most your customer’s perception. Once you have lost a customer it’s tough to get them back. Good luck on that one Tropicana.

2: Fixing (aka changing) your brand/logo before you fix your product and/or service

We’ve all seen it – a new look, a new logo, an onslaught of advertising – all telling you we’re new, we’re great, come and do business with us. There’s just one problem – outside you’ve changed, you’re wearing a new suit so to speak but inside you’re exactly the same. Now I feel like I’ve been duped, you’re making a promise that you have no intention of delivering on or at least not in any immediate time frame. A certain Telco comes to mind that shall remain nameless. A new CEO comes in, anxious to make his mark and show he’s different, he immediately rebrands. Ahh I’m not quite sure how to tell you this but – you’re wrong – as a customer now I feel betrayed. I know nothing has changed, your product and service offering is status quo. So let me get this right, you’ve spent millions of dollars changing your letterhead, repainting all of your trucks, redoing your web-site and all of your multimedia and yet as far as I’m concerned you haven’t spent a dime to improve your customer service that quite frankly I think sucks. A word to the wise – improve your offering/service first and once you have it right and you’ve tested to make sure it’s right then and only then should you present a new face (aka logo) to the world.

Coca cola is a one hundred and twenty three year old company and its logo hasn’t changed. And by the way, they are still the dominant soft drink worldwide. Perhaps there is something to be said for deciding what you stand for and then delivering on it, consistently year after year. It’s not glamorous but it pays the bills and in fact chugs out a pretty decent profit. And at the end of the day isn’t that why we’re all in business?

Loyalty Marketing

At every conference, roundtable and seminar I present, I hear a common theme from the most senior marketers across every industry: more than ever, marketers are being held responsible for having loyal customers. At the same time, senior marketers share with me that they feel that several factors are making it far more challenging to develop and truly optimize cost-effective loyalty strategies. These factors include:

1) The increased number of online and offline channels – which adds another layer of complexity and required sophistication;

2) The intense competition for share of “customer mind” (for example, in the U.S., a person will belong to an average of 14 programs but will only be active in five); and

3) The compressed timeframes in which marketers are called upon to demonstrate loyalty program effectiveness and return on investment.

So, my contribution to the CMA blog and marketing community is to provide practical insights that will help senior marketers establish, increase, sustain and measure true customer loyalty.

To begin with, I’ve captured in one diagram the major topics and disciplines that professional marketers draw upon – often in isolation – in constructing customer loyalty programs.

In future blog posts, I’ll share stories, tools and advice that will help you harness the power of loyalty marketing. I’ll examine the various elements identified in this cluster, how they interact and how the grouping of these elements varies according to conditions such as target audience, budgets, timetables, technology and industry.

90% of new products are not going to make it to the third year in the marketplace...

...and yet we still rely on consumer research techniques that were designed by statisticians in the 1950s. I'm not a psychiatrist, but it seems to be that there is something vaguely neurotic about an industry that continues to do the same thing, at great expense, knowing full well the outcome will have a 90% probability of being wrong. Innovation needs a fundamentally new and different approach.

Why does the traditional statistics based research not work?

I think the problem has more to do with the real lives of people in a world that is much less predictable than it once was. In the case of a high frequency CPG, let’s say toothpaste, it is almost impossible for someone to accurately predict how they will react when they are in the store buying toothpaste, unless they are rigidly brand-apathetic (that is, they always use the same brand no matter what, which is generally because it is easier to stay with what they are doing than try to figure out all the other alternatives).

For instance, a respondent might say in anticipation of buying toothpaste (in a research or interview or any other setting – even in-store) that he definitely will or is somewhat or very likely to buy a new product, even if it costs ten cents more. However, when I am actually in the process of buying the product, my actual decision will be based on a number of unanticipatable variables: how much money do I have in my pocket, how full is my basket and how much have I already spent, am I feeling frugal today, is the toothpaste only for me or is it for the family, what other brands are on sale, and so on.

Clearly people’s projection of buying behavior, which we call buying intent, is necessarily unreliable. In a simpler world, when brands behaved in an orderly fashion and consumers lived in a rigidly budgeted, regulated world, this may have been different.

What is the alternative?

Simply put, people’s predictions of amalgamated behavior is likely to be much more accurate than their prediction of their own behavior. This is at the heart of the economic principle captured in James Surowieki’s book, The Wisdom of Crowds.

ProteanPrediction Collective Wisdom Engine is a proprietary process that integrates this theory into a very practical market-ready system. As a component of any innovation development strategy it can be used to guide development teams in incremental steps, rather than quantum (and very expensive, but very risky) leaps.

The Collective Wisdom Engine is particularly powerful when used as a mechanism to involve the entire organization in the process. I am not sure there is any proof positive, but it makes sense that the collective wisdom of the people who work with the product and brand on a daily basis is likely to be more interesting than the collective wisdom of a random or specific external crowd (although, not necessarily more accurate). It can also be accomplished at a fraction of the costs of traditional, research based methodologies.

June 16, 2009 – One more certainty to boot…

“…In this world nothing is certain but death and taxes.”

Benjamin Franklin’s famous words are timeless and universal in their truth. I propose though that we as marketers consider one more certainty – the brand.

The issue du jour is social media. How do we do it? What do we do? Is it facebook, is it twitter, how about a blog? Is it all? Is it some? is it nothing? The list of questions goes on and on. And this is the beauty of our craft – the dynamism of marketing, especially today.

The point though is that all issues du jour are just that – the hot topic of the day. Every hot topic from the past, for example media, engagement, ROI or ROMI and every hot topic in the future will always undeniably be tied to the brand.

This is why I believe that the CMA’s Brand Insight Conference is a must attend event for all Marketers.
Here is a snapshot of what you can expect on June 16 2009 at the Hilton Toronto:

-Mitch Markson will talk about goodpurpose – a fantastic global initiative that builds “mutual social responsibility” between brands and consumers.

-Gerry Frascione, the CEO of BBDO North America will share some amazing examples of how his clients have been able to tell compelling brand stories that have resonated in today’s environment.

-George Pneumaticos, the Global Brand Architecture Director for Nokia promises to deliver a compelling lunch keynote on how the world’s number one phone brand innovates through the brand.

-Tony Matta, Vice President of Marketing for Frito Lay will discuss the highly successful recent play of letting the Consumer name the newest Dorito flavor. The winner receives $25k and 1% of the flavour’s sales…

Yes Ben, in life 2 things are for certain but in marketing only 1 thing really matters – the brand.

In the spirit of authenticity, the author of this post wishes to disclose that he will be attending the conference on June 16.

The New Luxury Consumer

A new sense of discretion in customers who once bought extravagance with pride

When the recession ends, there will be some fundamental changes. The luxury consumer is off the treadmill now. They're thinking about 'what do I need, what do I really want?' For high-end shoppers, the hottest must-have accessory for 2009 is not the 10 carat diamond bracelet or a python leather purse -- it's the plain paper bag. Top luxury marketers note a new sense of discretion. Instead of that coveted shopping bag with an iconic brand name, some are asking for something a little less ostentatious. As the global recession drags on, luxury brands and retailers are contemplating deep price adjustments and are focused on impeccable service to prove their worth. The larger question being asked by luxury marketers is whether a shift away from extravagance might be more permanent with significant consequences on consumption.

That seems to be the consensus of a recent Wharton panel discussion titled, "Can Luxury Survive the Economy". In the past, wealthy consumers would buy a product just to get the bag with an up-market label. But profligacy isn't what it used to be. These days, even the wealthy are feeling pangs of recession. Since the economy has soured, consumers of luxury items have scaled back on their spending and those still shopping are being more discreet. According to some luxury marketers, wealthy customers are asking for plain bags, no boxes, or requesting goods be delivered later. They don't want everyone to know nor do they want to flaunt their brands. Another study argues 62% of wealthy consumers say openly flaunting wealth is out.

Impact of the global downturn

The global downturn has claimed a high-profile brand in the fashion world. Christian Lacroix, a leading French fashion design house, has filed for protection from creditors citing a drastic drop in demand for luxury goods as the reason, according to the Financial Times.

Sales of luxury goods worldwide could fall by as much as 10% this year, according to some surveys. In the U.S., with a third of all luxury goods sold worldwide, the market is expected to drop by 15%. A recent report states 62% of wealthy consumers say the economy has changed their views on luxury purchases. Some are watching their budget more closely. Others say that flaunting luxury right in uncertain times is insensitive. These consumers would rather help others than spend on themselves.

Luxury at half price

Price-cutting is the new normal for luxury retailers. Some have slashed as much as 70% off designer fashions that usually don't get marked down until the end of the season. Discounting at luxury department stores made it tough for designers. Given that the price of craftsmanship doesn’t change, a drop in prices can have a significant impact on profitability. For example, Bottega Veneta, the Italian leather house, a subsidiary of the Gucci Group, is famous for their woven leather accessories like handbags, shoes and wallets. The brand saw its sales drop 8.8% in the last quarter of 2008.

Fashion designers are not the only luxury marketers who believe discounting is dangerous. Even restaurants are feeling the heat. The trend is resist a drop in prices, a sign of weakness, and target customers who are willing to spend to keep the integrity of the product they are being offered. Cutting prices could cause long-term problems for a luxury brand. Automotive News reported in April that sales of Maserati, a division of Turin, Italy-based Fiat, slid about 30% in the first quarter of 2009. Most marketers agree that if you drop prices, it's a big challenge to raise prices again. It isn’t easy to drop prices and add value. A strategy being adopted is to focus on the customer experience and value. For example, a Maserati is hand-built. That's where the value still is in the luxury business - not downgrading your product, focus on being inspirational.

Downsizing expectations

Some businesses that cater to the luxury market are modifying their products to make them more affordable. For example, restaurant customers are opting for inexpensive wines over cocktails. In response, restaurants may add new items to the menu. Another example of adding to a product line is the 'baby' version of the Rolls-Royce Phantom. According to the panel, Rolls-Royce sales dropped about 5% to 174 cars in the first quarter of 2009. The new smaller 200EX Sedan, set to hit the streets in 2010, will come equipped with many of the classic touches of its larger counterpart, but instead of a $400,000 price tag, it will sell for under $300,000. The new version is designed to appeal to existing customers as well as bring in new ones according to Rolls-Royce Motor Cars. They say a lot of owners see the smaller car as their everyday car. Offering a smaller version of a standard product, opening up a brand to a different segment.

Aside from trying to bring in new customers, luxury brands are also working harder to please their existing customers with flawless service. The focus is on being perfect, especially when responding to a request, retailers listen more intently. Superior services sets apart luxury brands. Customers will come back for the relationship with their sales associate. Luxury brands are also focusing on their existing customers.

The super-rich are also focused on frugality. Luxury brands are looking for new ways to stay viable. Some luxury retailers on the panel say they have had to cut prices, while others are wooing customers with new, more affordable products. Most argue that any type of discounting and price reduction would permanently hurt their brands. There is a significant shift in focus from glamour to hyping value and superior service.

A permanent shift away from extravagance?

The luxury industry is concerned that there has been a permanent shift away from extravagance. The recovery may happen differently for different types of luxury brands. It may be faster for Restaurants, because they offer a social event. But the recovery might be slower for retailers of luxury apparel and accessories. Consumers are starting to buy a lot less and are more discriminating. And deep discounts at mainstream stores may have permanently changed the perception of high-end retail. Consumers are questioning how much things should really cost more often. They are redefining the balance between the intrinsic value and emotional value of brands and experiences. Is a $5,000 suit really worth $5,000? The trend in discounting has led the customer to ask if these brands were really worth that much in the first place.

Additional Reading
Dreaming of Luxury Sales Amid Recession
Luxury retailers seek to rekindle the desire to shop
When not cutting prices becomes a luxury
The Forever Sale: Retailers Slow Pace of Markdowns
Getting to the Points

Professional Associations: Re-positioning to meet Members Needs

Just as companies are struggling to grow their customer base, professional Associations are trying to grow theirs (by attracting and retaining members).

The battle for membership is becoming increasingly fierce for Associations and their associated offerings as companies are tightening budgets and demanding increased ROI from all aspects of marketing spending. As such, many Associations are re-positioning their offering to more directly impact their members’ bottom line (through re-branding the Association profession with the end goal of increasing demand for members’ services).

In a recent survey, the four main draws for members of Association membership were identified as: (1) Professional Development, (2) Access to Information/Knowledge, (3) Networking, and (4) Advocacy. But Associations are asking themselves, are these more traditional benefits/offerings sufficient to grow membership? Members must feel that their immediate needs are being met (advocacy, networking, industry news, etc.); however, they must also believe that their Association has the capacity to help their bottom line in the long-term. As a result, we have found that Associations are expanding their offering to include building their Associations’ profession brand. Associations are assuming a support role, ensuring that their members have the resources (information/knowledge, marketing materials, and training) to deliver the new profession brand.

For example, the Appraisal Institute of Canada recently re-branded the ‘appraiser profession’ with the goal of enhancing public perception – thus giving members the opportunity to expand their service offering should the opportunity arise in the long-term. They re-branded the profession from ‘the foremost authority at estimating market value of Canadian real estate’ to ‘accredited members who are qualified to deliver analytical advice and professional opinions across a wide spectrum of services’. Another example is the demand-generating initiative recently launched for the Certified General Accountants profession brand.

Does anyone have another recent example of a really good professional Association branding initiative?