Posts Tagged ‘brand strategy’

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Get Into Their Heads

Tuesday, March 5th, 2013

intheirheadsNo matter how old you are, you’re bound to have had a moment where age wasn’t in your favor. A reference you didn’t recognize, a word you didn’t know- it happens. And when it happens with family or friends, it’s pretty easy to move on. But when age-based disconnects get between your brand and your audience, it’s a trickier beast. There’s much more at stake than improperly used slang: your brand risks irrelevance.

Age is much more than a number: It affects your mentality, knowledge and beliefs. So when you’re planning for a group outside your own age set, you need to really dig into that group’s thoughts and behaviors. Otherwise, you might develop products they don’t want (even if they need them), ads they don’t care about (even if they’re slickly produced) and promotions they don’t like (even if they involve big prizes). Here are a couple of examples to help you see just how much age matters:

Example 1: Behavior Let’s think about personal finance for a minute. Try to remember how you approached money when you were 16. Did you have the same beliefs and practices you do today? I’d guess that the answer is a resounding “no!” When you were 16, you probably had much less money, poor financial literacy and less of a motivation to save your dollars. Quiz time: Should a bank speak to 16 year-olds like it speaks to 40 year-olds? Absolutely not.

Example 2: Perspective This time, think about what you eat. Do you have the same eating habits as your grandpa? I doubt it. He grew up in a different era that had different conceptions of what was “healthy” and what was “normal.” Your own habits have been shaped by the place you were raised and whatever nutrition principles were floating around at the time. And now your quiz: Should a 50-something year-old executive plan snack products for 20-somethings without bothering to research her target? No way.

The problem of generational gaps isn’t unique to marketing, of course. Think about college professors: on a daily basis, they have to relate complex topics to an audience that is distanced in age and expertise. Back in 1998, some professors at Beloit College who felt out of touch created the The Mindset List, a yearly publication about the experiences and beliefs of incoming freshmen. The list’s entries don’t seem too monumental on their own; for example, an entry on this year’s list says that incoming freshmen don’t remember tan M&Ms. But as you scroll through the 75 entries, the sum of the list’s parts begins to resonate.  You get a picture of  the world these students were raised in and the sorts of experiences that have shaped their minds. Taken line by the line, the list provides a chuckle. But taken as a whole, the list helps you step out of your own frame of reference, and into the students’.

Which is exactly what we try to do when we talk to consumers: We want to get inside their heads. We want to understand what shapes their lives and how they see the world around them. We want to know what feeds into their beliefs and how that dictates their behaviors. We root our work in consumer insight because it’s just so darn important to know where your audience is coming from. After all: Who wants their brand’s main attribute to be “out of touch?”

Felicia Baskin, Strategist

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Lululemon: The Ultimate Badging Brand

Thursday, February 28th, 2013

I’m a moderately enthusiastic yoga enthusiast, which at times feels like a requirement of an SF resident.  I used to go to classes in the Haight, I occasionally frequent a studio in the Mission, and my “home base” studio is in the Marina.  For the sake of simplification, let’s characterize these neighborhoods by noting that they are home to, respectively, hippies, hipsters, and future Stepford Wives.   So
they’re different.

But despite the differing levels of body art, dreadlocks, and jewelry on display, the presence of Lululemon attire holds constant across these different environments.

There must be dozens of brands that produce reasonably stylish, functional, well-made yoga clothing – and there’s a pretty good chunk of them providing it at price parity to Lulu. So why then, do all these women (and a growing population of men), who differ so greatly in their attitudes and styles, all gravitate toward the same brand?

Because while other brands may make a great yoga product, only Lulu sells a product that serves as a badge* of dedication and commitment to the “yoga lifestyle”.   Put on Lululemon gear, and you’re proclaiming to your fellow yogis (and world at large), “I’m serious about yoga and all that it stands for.”

How do they do this?  I see a few key ingredients in crafting a badge brand:

1. A well-defined brand “muse”: At Sterling, we define a “muse” as the “single person you come to work for – the person you want your brand and the outside world to believe the brand is built for.”  Lulu builds its brand for the true yoga devotee:  an individual who practices yoga daily and balances her practice with a “portfolio” of fitness activities, but more importantly, a woman who embodies the teachings of yoga not just physically but spiritually.  In everything Lulu does, you can see her shining through – you can tell that she inspires each decision the brand makes.  And in doing so, they not only catch her – but all the other women and men out there who aspire to be like her.

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2. Prove focus in your product: Aside from some pieces designed for cross-training (running, cycling, dance), Lulu’s product line and store experience are devoted to the practice of yoga.  It doesn’t just pay lip service to a tight, focused position – it delivers an experience and product set that backs it up.

lulumats

3. Tap into macro trends: While Lululemon may be eating, sleeping, and breathing yoga, the brand recognizes that it’s also in the business of fashion.  Lulu has an outstanding awareness of macro fashion and style trends, and it does a great job of translating them into performance wear.  The clothing stays ahead of the curve relative to other performance apparel brands in silhouettes, textures and fabrics, color palettes, detailing.

4. Build out a values-based experience: Getting the product right is important.  But a badge brand transcends the product, building an experience online and offline that speaks to the values and beliefs of its target. In Lululemon’s case, it’s about holistic health and well-being, positive energy.  To that end, the company posts its “manifesto,” which encompasses these values, on its bags and throughout its store.  It hires individuals that embody these values and convey them in-store.  Stores offer free yoga classes.  Stores are actively involved philanthropically with like-minded causes in their local communities.

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Because this phenomenon fascinates me, here are some other interesting badge brands to consider:

-Harley Davidson (the free spirit lifestyle)

-PBR (the hipster lifestyle)

-Chubbies (the frat boy lifestyle)

-Bonobos (and the grown up frat boy lifestyle)

But Lululemon, in my humble opinion, has truly cracked the code.  So it’s unsurprising to me to see so many others on-board with the brand when I’m out and about.  Putting aside my own very narrow purview of the brand’s success, though, allow me to call out Lulu’s (LULU) stock performance across the past 5 years:

lulustockchart

The company has been increasing sales at an average annual rate of 40% since its inception.  Pretty sweet.  A sign, I’d say, that their brand positioning and approach is working for them.

So the end game advice:  take a step back from your brand.  Think about your “muse” and how usage of your product or service connects to her lifestyle, her values, who she is.  Reframe and reground in that broader context.  And then, my personal suggestion, would be to build a forward-looking position for your brand using the “form” inspired by Lulu’s approach.

*Side note:  Status brands like Luis Vuitton are also deemed “badge” brands.  But
other than proclaiming, “I’m rich”, they don’t showcase a lifestyle – so they don’t fit the definition of a badge brand that I’m addressing.

Sara Linderman, Strategist

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Sterling Buzz…

Friday, January 18th, 2013

Austin’s book gets another great review!

brand4letter

“Whether the reader accepts or condemns McGhie’s contention that the model of one-way persuasion is obsolete, the heightened significance of customer word-of-mouth reaction, or its electronic counterpart, seems unassailable. The customer, not the marketer, controls the brand in the brave new world of viral marketing.”

Check out the full review on Publishers Weekly here.

Read all about Austin’s book, Brand is a Four Letter Word and pick it up here.

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Friends with Money : Grounding in the Affluent Consumer

Friday, January 11th, 2013

Thanks to our obsession with celebrity culture, we’re quick to scroll through our mental rolodex and arrive on a portrait of an Hermes-toting, Prada-wearing, private-jet flying individual as the role model for “our affluent consumer” – living leisurely, perhaps born into wealth, spending heavily and conspicuously, flashing black cards.

When you actually talk to affluents (and we at Sterling have a lot of those conversations), you start to reveal a very different profile when it comes to affluent consumers’ consumption behaviors and lifestyle – which have some valuable implications for brands that are trying to make greater inroads with this segment.

1. They worked hard for their money:  Let’s briefly acknowledge how the “affluent” population shapes up, by the numbers.

20% of US HHs make $100K+ per annum
5% make $167+
1.5% make 250K+
1% make 350K+

Most affluents aren’t falling into uppermost stratospheres.  They grew up in middle class families.  And they arrived at their station through hard work, dedication, and perseverance.

BostonPrivate

Those that work this hard expect that those around them will work equally as hard – and this holds true with what they expect out of brands.  They’re looking for brands to do more than the baseline, to provide out-of-the-ordinary experiences. Check out the lengths the Boston Private Bank & Trust are willing to go to for their customers.  This is an extreme example, but it illustrates how personal and unexpected touches go a long way in building a relationship with the affluent consumer.

2. Time is the greatest luxury:  When you look at where the wealthy are spending their money, it’s not all being chucked after luxury goods.  The biggest luxury, in consideration of their work ethics (and hours), is time.  So they indulge more heavily in vacations (on average, they take over 5 leisure trips per year, spending over $35K) and services (50%+ use housecleaning, lawn maintenance, accounts, or some combination thereof) – outsourcing the grudge work of life to get more time back.

amazon

So, in thinking about service or product delivery to the affluent, a brand should focus as much on the delivery as the service or product itself.   I think about Amazon – which a recent AdAge article noted as a preferred brand among affluents.  Amazon delivers an extraordinary range of products, often, free (and fast) shipping, easy returns, and an interface designed to make purchasing extremely quick and seamless.  So the consumer can spend less time shopping.  Think about what your brand can do to make service/product acquisition more efficient – because this is a consumer that will be especially appreciative of your efforts.

3. Money doesn’t actually burn holes in pockets:  Affluents are super value conscious (there’s a reason they’ve accumulated wealth
).  Over 50% seek out sales or wait for sales to shop; 45% shop with coupons.  Sure, they may have a lot in the bank, but they’d prefer to keep it that way.

costco

One brand that gets this?  Costco, which tops the list of “favorite” shopping destinations of affluents (over more predictably “wealthy” brands like Neiman Marcus).  Costco doesn’t offer a highly luxurious shopping environment, and it sells expensive, big-ticket items alongside massive boxes of cereal.  But it stocks high-quality products at great prices, providing its members significant value.   Brands seeking to get in with the affluent are wise to draw on Costco’s wisdom and consider ways to enhance the price/value equation.

4. Under the radar:  89% of affluents don’t want those around them to know that they’re wealthy.  Now, some of this is likely due to personal protection of their wealth.  But the other theme we hear is a belief in “stealth wealth” – they don’t mind having money, but they like to keep it under the radar.  They’re modest and have a fear of coming off as ostentatious or snobbish.

audiSo when it comes to imagery, communications, messaging, naming, etc. – brands may want to hinge on substance over flash.  Personally, I think about how this plays out in the auto industry:  a lot of mainstay luxury brands flash prestige.  But Audi seems to take a slightly quieter path, focusing heavily on engineering and performance, positioning itself as the more demure luxury car.  And it’s been working: 2011 and 2012 showed record sales growth for the auto brand.

Clearly, affluent consumers are living better.  I mean, having an Audi isn’t slumming it, and a typical consumer doesn’t expect a bank employee to drop by his house to deliver travelers checks. It’s a higher bar. But brands that succeed with affluents recognize their subtleties, understand what really matters versus drawing easy (and often erroneous) conclusions about what they want and need.  Put in the effort to tap these insights and set your brand up to win at this lucrative game.

Sara Linderman, Strategist

Sources:  2009 U.S. Census; The Influence of Affluence; The New Elite; 2008 Mendelsohn Affluent Survey

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Sterling Buzz…

Thursday, November 8th, 2012

Brand4Letter

We’re excited to share this great interview of Austin McGhie, our head of Strategy, on Intrepid Radio!

“You cannot brand anything unless you’re a Rancher. You position something and you become a brand…”

Tune in for the full broadcast: HERE

To learn more about Austin’s new book, click here.

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Why Your Brand Should Piss Someone Off

Wednesday, August 8th, 2012
If you want some people to love you, you’ve got to accept that others may hate you. So let ‘em. Better than having a weak brand.

smashkey

“If you want some people to love you, you’ve got to accept that others may hate you. So let ‘em. Better than having a weak brand.

…Apple. Mercedes. Virgin. Red Bull. Fox News. W Hotels. Snooki and Kim Kardashian. Every strong and focused brand, just like every strong and focused person, creates this love/hate dynamic to some degree.”

Austin McGhie sounds off in FastCompany on why your brand shouldn’t be everything to everyone. Read On>>

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Thinking Outside the Box is a Lousy Brand Strategy

Friday, July 27th, 2012

espn

This week in FastCompany our head of Strategy, Austin McGhie reveals how convention can be on your brand’s side.

“In my experience, creative ideas are easy to come by and linear strategic ideas are the all-too-common, safe fallback. Meanwhile, ideas that deliver the strategy in a highly creative, intriguing way are few and far between–and all the more valuable because of their rarity.
Again, your task is to create innovative and fresh ways to punch the edges of that box from the inside out. Hit those edges hard. This is the only way to make that box bigger, the only way to actually change its shape. After all, who says it needs to be a box in the first place?”
>>Read the full article

“In my experience, creative ideas are easy to come by and linear strategic ideas are the all-too-common, safe fallback. Meanwhile, ideas that deliver the strategy in a highly creative, intriguing way are few and far between–and all the more valuable because of their rarity.

Again, your task is to create innovative and fresh ways to punch the edges of that box from the inside out. Hit those edges hard. This is the only way to make that box bigger, the only way to actually change its shape. After all, who says it needs to be a box in the first place?”

>>Read the full article

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Sterling Buzz…

Monday, June 18th, 2012


Branding

Austin McGhie talks with GraphicDesign.com and expounds on the points of his new book: Brand is a Four Letter Word.

Q. What are the biggest mistakes designers make when undertaking a branding project?

A. First, as I say in the book, unless you’re a rancher, there’s no such thing as branding. You can’t just brand something. The idea should never be used as a verb. Brand is the prize. The outcome. It’s a noun. The actual work—the verb, if you will—is positioning.

The biggest mistake designers make is starting any design project without fully understanding that position. Great brands, like great people, have a strong, clear point of view. A world view that is theirs and theirs alone. Understand that POV. Feel it. Explore it.

Then, and only then, go to work.

To read more of this Q and A on how positioning affects marketing and design, click here.

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Sterling Buzz…

Wednesday, June 13th, 2012

Check out Austin McGhie’s rant on ‘Branding’ in AdAge online this week!

To learn more and read more from Austin’s newly-launched book, Brand is a Four Letter Wordclick here.

CMOStrategy

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Bringing Real Brand Value to the World

Tuesday, June 12th, 2012

From a global perspective, we’ve all read a lot in recent years about how companies are wrestling with how to best adapt and extend their established brands into the emerging middle class markets in those fast growing economies such as China and India.

At the center of the strategic debate around this issue lie two fundamental questions facing global brand owners:

  1. In an increasingly borderless and interconnected world, how much should the brand be ‘changed’ to meet the needs of this new consumer target without harming business and reputation in established markets?
  2. What are the new rules for operating a global brand with potentially different products and positionings, in a fully transparent world?

From a brand owners point of view, three favored solutions are emerging:

1. The introduction of new products specifically aimed at this new consumer target, for example:the LG Lucid smartphone and the Renault Logan automobile

2. The introduction of smaller sized, modified products with fewer features or ingredients:the Knorr Economica line and single sachets of Nescafé and Nestea.

3. The re-introduction of ‘dormant’ brands: Datsun is being relaunched in China and India in 2014 with a $6,000 vehicle.

And if the brand challenges haven’t been complex enough already, there is new evidence that the situation is going to get exponentially more complicated. Why?

Because, in addition to the slowing down in emerging market growth recently, the continuing economic stagnation in many established markets, especially those in western Europe, has resulted in a significant increase in the number of consumers living near or below the poverty line:

-In the US, this includes 15% of the population (or 46.0 million people)

-In Greece and Spain, the figures are over 20% of their populations

And as this group of financially hard-hit consumers grows in established markets, ironically, their needs and mindsets are beginning to align more closely with those middle classes in emerging markets. And although these two consumer groups come from very different start points, there is no denying that in terms of attitude and behavior, they are beginning to look more similar than different.

See what I mean by things are getting more complicated?

But I hear you say, “There are already a multitude of brands in established markets that are committed to delivering lowest prices
Wal-Mart, Ryanair, Aldi to name but three.” However, it is our belief that the ‘value’ segment in markets such as the US and Europe is about to undergo a revolution. It’s all feeling a bit too comfortable given the extreme economic and market disruptions that we continue to experience.

So what does this mean?

Quite simply that many of the products and services originally designed for those emerging fast growing markets (China/India) will now be targeted at the economically struggling markets (US/Europe).

For example, we all know just how “value-sensitive” the American consumer is and if we needed recent evidence, the J.C.Penney experiment certainly is further proof. So, just looking at the 46 million ‘poverty liners’ in America for a minute:

-Why wouldn’t many of those consumers be interested in a well designed, well equipped smartphone for $99.00?

-Why wouldn’t they be interested in owning a Datsun? For many in this group, a $6,000 car is an affordable proposition.

-Why wouldn’t this group be interested in food and beverage brands that adapt their size and their features or ingredients to the new value consumer?

So where does all this leave the brand owner? With some pretty fundamental marketing questions to answer, namely:

-What is going to happen to the value segment globally? Will the segment align as we predict? Will it develop differently?

-What’s our new value strategy? Do we develop separate value brands or do we adapt our existing brands to meet these new needs?

From my experience, many brand owners are still somewhat in denial and that’s not surprising. They have spent much of the past 20 years focused on ‘trading up’ and many of us drank that particular glass of kool-aid!!

But that was before the rebalancing of the world and the economic crisis that we are still experiencing. We need to change the conversation. We need to think ‘trading down’ and while this has horrible implications for brands, the even worse implications lie in wait for those who don’t act.

Value is being redefined around the world. And the simple fact is that we need the smartest brand brains to be addressing how to meet this new and emerging global phenomenon. It’s a huge challenge but at the same time a huge opportunity for those pioneers and innovators.

Simon Williams