The Warc Blog

What price brand desire?

Posted by: Peter Walshe, Global Account Director, Millward Brown

Blog author

As I start the process of reviewing new findings from the BrandZ research on the trade-off consumers make between their desire for a brand and its price – what we might call the value proposition – I am struck by how important obtaining value is with consumers around the world.

The top 10 global 'value' (or price driven) brands achieve more than twice the market share of the average brand and have growth prospects that are also twice as favourable (as measured by the BrandZ 'voltage' metric). The 'clarity' of what these brands stand for is also significantly higher than average. In times of recession, even a double dip, the equity (or level of brand 'bonding' that consumers achieve with a brand) of these most price favourable brands is nearly three times the average. The guarantee of a good deal is quite seductive.

31 January 2011, 09:50
Why freedom's an infectious idea

Posted by: David Penn, Managing Director, Conquest

Blog author

Things are moving so fast in Egypt that it’s hard to get any sort of perspective on events. News studios are filled with pundits comparing it to the fall of the Soviet eastern bloc at the end of the eighties, the fall of the Shah in ’79 or even the Russian Revolution.

The role of social media such as Twitter and Facebook seems central (as in the recent Tunisian uprisings) and the Egyptian authorities virtually admitted as much by blocking the internet and mobile phone networks. Yet this only had the effect of intensifying the visibility of the protests as people simply took to the streets instead. The speed with which the protests have since spread and the revolutionary fervour of the protesters both indicate that Egyptian society is in the grip of a socially contagious phenomenon too powerful to contain. What does it tell us marketers about how ideas take root and spread?

30 January 2011, 18:09
Online noshing

Posted by: Robert Passikoff, President, Brand Keys, Inc

Blog author As the story goes, a man hungry for a snack went down the street to the 24-hour grocery. When he got there, the manager was locking up. The would-be shopper said, "Hey, the sign says you're open 24 hours." And the manager replied, "Yes, but not in a row."”

So if you always suspected that the drivers of engagement and loyalty for grocery shopping involved Convenience, Range of Merchandise, Value-for-Dollar, and Free Delivery, you’re going to love this news: Amazon.com is starting a new service as an online grocer.

After testing the service – called “Amazon Tote” in Seattle, named for the reusable, weatherproof tote bags your order gets delivered in – the online-bookstore cum retailing website is in the process of creating a free, no-minimum-purchase-necessary, weekly, you-specify-the-day, home delivery service. Right – just like the on-line grocery purveyor Fresh Direct, but not as convenient. Not yet anyway.

Clearly, the service is designed to encourage customers to use Amazon as their main retail destination for regular household purchases as well as, well, everything else. Likely it hopes to strengthen its position as a challenger to Wal-Mart, which is currently the largest retailer in the United States—and is reported to be developing an on-line strategy for groceries and household goods, expanding its same-day, in-store collection service.

Keeping up with consumer expectations is always a challenge, driven exactly by brands reaching beyond satisfaction to delight, and changing the category as they do so. Having watched Amazon become, well, Amazonian in other categories, this is one story where consumers may write a totally new ending.
25 January 2011, 14:37
Buzz without the BS - effective word of mouth is useless, not useful

Posted by: Left Field

Blog author

Every now and then I come across 'learned' marketing papers that are so wide-of-the-mark that I feel compelled to speak out. There's plenty of half-baked material around that is not worth the effort of comment, but true 24-carat nonsense is more rare. Before this starts to sound like a self-opinionated attack I should define what I mean by 'nonsense': that which contradicts consistent case study evidence of success.

My 'opinion' is principally shaped by the almost 6000 case studies from around the world in the Warc archive. It is relatively simple to test theory against this body of evidence - but clearly the authors of real nonsense do not trouble themselves to do so.

24 January 2011, 16:19
To be trusted is a greater compliment than being loved: more profitable, too!

Posted by: Robert Passikoff, President, Brand Keys, Inc

Blog author What’s the first thing that a consumer thinks of when they hear the phrase “product recall?” “Danger?” “Peril?” “Injury?” “Doesn’t Cousin Jerry handle class action lawsuits?” Whatever particular thought ran through your mind, it likely wasn’t good, right? So what would you do next?

Thomas Carlyle would have said, ‘the thought is the parent of the deed.” Brand Keys would say, “Uh oh, this is definitely going to affect customer loyalty, sales, and profitability.” We’d say that because our metrics are leading-indicators of consumer behavior and always play out in the marketplace. Currently our 2011 Customer Loyalty Engagement Index is in field and we’ll know for sure how J&J brands will rank in the OTC Allergy and Pain Relief categories in a couple of weeks. But we can tell you now it’s not likely they’re moving up from where they found themselves at the end of last year.

Tylenol (and many of their other brands) was a brand consumers loved. It headed up our loyalty and engagement lists in January 2010. But recalls of Tylenol allergy, cold, sinus. 8-hour, arthritis pain, extra strength, PM, children’s, infants, meltaways, Rolaids, Rolaids softchews extra strength, Adult Benadryl, Children’s Benadryl, Sudafed, Sinutab, Motrin Jr., IB, children’s, infant’s, Children’s Zyrtec, and Zyrtec itchy eye-drops set off a rankings avalanche that we hadn’t seen since BP tried to single-handedly kill the Gulf of Mexico. No, it’s pretty much a sure bet that these recalls guarantee that J&J brands, at the bottom of the end-of-year 2010 lists, won’t be moving up in the standings when we post the 2011 rankings.

Last year, ‘Brand Trust’ made a really high contribution to category engagement, loyalty, and profitability. Much, much more than ‘Product Efficacy,’ which is seen to be ‘table stakes’ these days. And, as we’ve often pointed out, consumers with aches and pains, coughs and colds, watery eyes, and wonky stomachs aren’t sitting around suffering waiting for J&J to get their act together and for drugstores to re-stock shelves with J&J products. No, they’re buying something else.

And, because most well-known products (in most categories) have turned from “brands” into “category placeholders,” i.e., products of which consumers are aware, but don’t really stand for anything in their minds beyond category efficacy, drugstores are taking advantage of the situation to highlight generic, usually drugstore-branded alternatives that turn out to be seen to be just as effective as any “branded” product. But cheaper with the added-advantage that it’s not part of a massive national recall and an FDA probe.

Experts have suggested that the diversity and scale of the J&J recalls are either due to a systematic failure in manufacturing quality control or the result of cost- cutting—unlike the Tylenol poisonings, which was not the brand’s fault and to which the brand reacted swiftly, keeping consumer trust. And while it may take a lot of money to ensure quality products, trying to buy back brand trust is a near-impossible and awfully expensive proposition.
20 January 2011, 19:19
Everything you need to know about Brazil before investing there

Posted by: Worldwide Partners, Inc.

Blog author

If you think this is just another cliché about the characteristics of Brazil, don't! I am not going to say anything about what you already know (samba, carnival, natural beauty), but EVERYTHING about "what makes Brazil Brazil", as the Brazilian anthropologist Roberto da Matta has already said.

I'm referring to the economic class that kept Brazil from entering the list of countries that fell in the global recession: the C class, which represents 85% of the Brazilian people and which is made up of those with monthly incomes between R$912 and 1,500. Before, this economic class was simply held in contempt by the country's economy; today, it is at the top of the list in terms of its importance to businessmen. Why? Purchasing power.

20 January 2011, 13:13
How Objective is Neuromarketing?

Posted by: David Penn, Managing Director, Conquest

Blog author

The world of marketing and advertising is full of competing theories about how consumers make decisions, process information and so on. Neuroscience has challenged head-on much of the conventional wisdom about how advertising works, yet the debate continues… and continues. So why can't neuroscience (and neuromarketing) help us settle once and for all some of these thorny issues?

A few years back, I became concerned about the usefulness of many of the recall – based metrics commonly used in advertising evaluation. I wrote a series of articles in which I argued (from a neuroscientific basis) that advertising which relies mainly on emotional content should be capable of creating brand engagement without people necessarily being able to recall the ad itself. My conclusions were inspired by some aspects of Robert Heath’s theory of Low Attention Processing, (which argued that emotive advertising can be processed independently of (visual) attention). The counterblast to this view came (perhaps predictably) from Millward Brown’s Erik Du Plessis, who in his 2005 book, The Advertised Mind, argued that we naturally seek out the positive – the pleasurable – rather than things which make us anxious or unhappy. Hence we pay attention to ads we like, and what we pay attention to we remember. He sees no reason why emotive advertising should be processed at a low level of attention (which is more or less a restatement of the view that prevailed prior to the so-called neuroscientific revolution). So who is right?

18 January 2011, 17:07
What Would You Do If You Knew You Could Not Fail? Oh, and Your Brand was Apple!

Posted by: Robert Passikoff, President, Brand Keys, Inc

Blog author Steve Jobs, CEO, Chief visionary, and Showman Extraordinaire of Apple announced he was taking another medical leave, elevating anxiety levels of industry watchers and investors who seem to feel it raises critical questions regarding the state of the world’s most valuable tech company.

It’s worth noting – with absolutely no disregard for Mr. Job’s creative drive, vision, and force of personality – that this isn’t the first time Mr. Jobs has taken time off to address health issues. It’s happened twice before and the company has prospered despite those sabbaticals. Mr. Jobs may be the face, and even the heart of the company – much like Richard Branson, the entrepreneur’s entrepreneur of the Virgin brand – but, happily, from a management perspective, he isn’t the only talent Apple possesses.

Outside of the tech and investment arenas, names like Tim Cook, Phillip Schiller, Scott Forstall, Jonathan Ive, and Ron Johnson (COO, Worldwide Product Marketing, iPhone engineering, Industrial Design, and Retail respectively) may not cause techies’ hearts to flutter, but they are the management team that drives the company. But in this instance it’s important to remember that what drives the consumer is the brand.

When it comes to brand loyalty, Apple generally leads competitors in better meeting – even exceeding – customer expectations. According to our Customer Loyalty Engagement Index, they were far and away the strongest brand in the Computer Category. When we supplemented the mobile sector with the then newish Smartphone Category, they led there too. We dropped the MP3 Play category because despite the actually brand consumer owned, they persisted on call them “iPods,” which made accurate assessments really difficult.

See, people may admire CEOs, but they buy brands. Today real 21st century “brands” are products or services that are so strongly imbued with values and articulated meaning that they are easily differentiated from the competition. Or in the case of the Apple iPod, just plain out own the category, (because really, when’s the last time you saw somebody listening to their Zune or Archos?).

There’s a Russian maxim that goes “visionaries are leaders with a poorly developed sense of fear.” And while there may be only one Steve Jobs, the fact that there’s also only one Apple brand should help allay shareholder fears.
18 January 2011, 14:35
The 50% of advertising that is wasted makes the other 50% more valuable

Posted by: Judie Lannon, Editor, Market Leader

Blog author

I am by no means the first person to quote this old chestnut about advertising waste and I am sure I will not be the last. But it came to mind when I read a study by Booz &Co and Procter and Gamble on the subject of how 'whole new marketing systems must be built to accommodate the new media and the dramatic shifts in the industry'. The survey pointed out that in the US the shift from traditional television and press advertising to online and other digital platforms is 'shocking' and that both online and mobile phone advertising held up well during the recession in contrast to traditional media.

The 'model in the mind' of how advertising works that is behind this study needs to be examined: it is direct response. Target the exact person, shoot them the message privately and watch the sales roll in. Super efficient, no wastage.

14 January 2011, 12:01
One to watch: Johnnie Walker in China

Posted by: David Tiltman, Head of Content, Warc

Blog author

There's an interesting new campaign from Johnnie Walker in China, which uses online branded content to extend its 'Keep walking' strategy. The brand, in conjunction with BBH and Ogilvy Shanghai, has produced a series of documentary-style videos featuring 12 prominent businessmen and other successful individuals from China talking about their stories. Branding in the videos is remarkably restrained.

In China, the 'Keep walking' activity has sought to reflect the lives of Chinese 'yuppies'. In a previous campaign (full APG case study here), a series of ads depicted four men, who supported each other as their careers and lives developed. The target has been the '80s generation' (aged around 25 to 35).

13 January 2011, 16:49
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