The Intel Inside campaign is fascinating for two reasons:
The first point - Intel’s success in branding an ingredient consumers barely understand and only vaguely appreciate in their devices - is especially rare. I pondered other successful ingredient brands and could only think of one: Gore-Tex. Gore-Tex is a high-tech waterproof fabric/tape used in outdoor gear manufactured by a number of different companies, including Patagonia, LL Bean and The North Face. I have never seen a Gore-Tex advertisement, but I understand it to be the premium fabric, of unsurpassed quality for performance clothing. It shares this premium, or “safety” and innovation brand attribute with Intel. Gore-Tex touches consumers directly; they stay dry or they don’t, and the name is literally written on the sleeve. Yet, Gore-Tex does not air ads and Intel spends millions on advertising every year. That tells you something about how competitive the microprocessor market is, and how important brand equity is to Intel.
Also, I love that Intel chime. It’s like the THX sound wave or perhaps even United Airline’s use of “Rhapsody in Blue.” I’ve been a Mac user my entire life and I still have a positive association with Intel because of their charming proprietary audio brand association.
Reading the Burberry case made me think of the other iconic patterns or logo prints that various luxury brands have exploited, to varied success. I think immediately of Louis Vuitton (the leader in the handbag and accessories category), and of Coach, a brand I believe is on the downward spiral Burberry once faced. First, the Coach print is hideous, unlike Burberry’s neutral colored plaid, and the brand has no real authenticity. This is the greatest asset Burberry has - its legacy as an outerwear leader and its quintessential Britishness - lend it a credibility that distinguishes itself among luxury fashion houses. Coach’s efforts to push the pattern scream of wannabe-ness. Cheap(er) knockoffs line Canal Street. The brand may be known for quality, but has no cachet. Burberry can ride the cachet train to the bank. Just as French terroir wine enjoys intrinsic approval from consumers, Burberry’s association with no-nonsense British foul weather wear means consumers attach a level of credibility to the brand that it would not otherwise have. Burberry, with the self-awareness to not overdo it, can extend into many luxury categories, as long as the focus on quality is not lost. Coach has no such self-control, hence the above image. Yech.
When I lived in Jordan I watched a fair bit of three television channels - the ones beamed from Saudi that featured imported US shows without dubbing. So I also got to watch a lot of ads (over and over). I was usually at the gym when I watched tv, fyi.
One ad always made me laugh because it illustrated a clear difference in the messaging and targeting of sweets. This ad for Dove chocolate shows a lithe and graceful woman savoring a piece of chocolate in her probably Parisian apartment. The Dove chocolate is a luxury good, enjoyed by elegant and sexy people. A silk dress forms around, flows around the room and her full figure is shown in multiple shots.
This ad would not be credible in American markets; American women worry chocolate makes them fat and would not “buy” an ad that depicts chocolate being something that makes you imagine a formal gown and feeling glamorous. The brand is positioned in the Middle East this way because chocolate in general - and American and European chocolates especially - is a luxury good. Dove means two different things in two different territories, and is therefore communicated to the audience differently.
It’s the same name brand, but that name means different brand experiences in different territories. Dove is an indulgence for regular women in the US and a lifestyle of cosmopolitan women in the Middle East.
When your brand is built on service in an industry known for the utter lack of it, you have a powerful asset. However, you also have carved for yourself a sizable challenge - the imperative to constantly exceed the expectations of customers who come to you expecting so much. The competitive advantage of being the “high service” option is lessened by the lower standards your customers have for your competitors’ customer service. A customer who is pleasantly surprised to be treated decently well in business class on British Airways, may be disappointed in a less than extraordinary SIA experience.
Fortunately, SIA has a jump on the competition in implementing and sustaining this high-service model. The company culture and operations are unified in this focus on serving the customer. SIA crew staff are trained and retrained more than competitors. SIA’s fleet is newer and requires less maintenance; they spend more hours earning fares in the sky. SIA’s tertiary operations are frequently outsourced. These factors contribute to SIA’s ability to be a cost-control leader while defining themselves as the luxury service airline.
(BY THE WAY) In addition to measurable high performance in on-time departures, bag delivery and high customer satisfaction, SIA’s brand is built on the offering of the mystique and exoticism of Asian femininity and perceived servility. The “Singapore Girl” attends to the every need of important businessmen on their long-haul flights to foreign places. This is the implicit message of their ads (see here). Let’s just be clear and acknowledge that.
Wine, like beer, is all marketing. However, unlike beer, wine marketing isn’t all about the commercials (promotion); it’s about the product and price. Country of origin and price point are 90% of the consumer’s decision factor when purchasing (and enjoying!) wine, as so many examples in the case describe. Consumers enjoy wine they perceive to be of high quality based on origin and price. Rarely do their stated preferences when the brand is known coincide with preferences during blind taste tests.
My friend used to host a wine tasting party where all guests had to bring two bottles of their favorite red wine. One went into the tasting rotation, and one was reserved as prize bounty. On the tasting table each bottle was disguised with a blank sheet of paper so they couldn’t be identified. Each guest sampled and scored the wines they tasted. The wine with the best overall score was deemed the winner and the person who brought it won the extra bottles. Not only did one of the cheapest wines win, but most people did not rate the wine they brought consistently highest. The average person’s palate is unsophisticated indeed. Without the label reminding us what we are drinking and how to feel about it, we barely know what we are doing.
With this in mind, I believe Concha y Toro must go top-down, not bottom-up when expanding in the market. Ditching a lower price brand to move into premium is much tougher than expanding a premium brand’s offering into the lower priced category. Wine “knowledge” is a collection of perceptions and vaguely informed opinions about names, labels, area of origin, and the quality implied by a bottle’s price. Taste-based perception of quality is a distant secondary concern. The course for the brand is clear: focus on premium brands rather than attempting to move a low-price brand into a premium bucket.
The factors I would use to evaluate the relative success of the four products presented in this case include trialability, relative improvement over comparable products, and cost and complexity of uptake. Satellite radio is a significant improvement over terrestrial radio, however at the time of the case’s writing, acquiring the technology to use the service was expensive and complicated. The diffusion of that product was an inevitable but lengthy process. Peanut butter slices have a novelty and price point that would allow for easy access and trial, however who wants waxy peanut flavored solids instead of creamy, crunchy, wonderful as-is peanut butter? It is no improvement. iSmell or DigiScent technology also has novelty but a high level of complexity and cost to trial and uptake, plus the relative improvement in entertainment value of smelling one’s television programming is highly suspect - three big negatives. Silver-infused Band-Aids is both on-trend with the market described in the article (people like and will pay for new versions of adhesive bandages), and potentially an improvement over regular bandages. The product’s diffusion could go either way and would depend on the price and marketing strategy, but seems the safest bet of the four. With these factors in mind, I rank the likelihood of success and speed of product diffusion as follows:
1. Silver Band-Aids
2. Satellite radio
3. Peanut butter slices
4. Scent TV