Brand Perceptions & Customer Loyalty

If there's any one thing that probably demonstrates the power of effective marketing, it very well might be the over-the-counter drug industry. The way new drugs are introduced is that the founding company is able to file a patent for their specific type of drug, in which they get to reap the dividends for their innovation and profit off of it. The caveat, though, is that the patent lasts for 20 years. After the expiration date, any company is free to make a knock-off version of the drug and sell it on the market.

With this being said, after 20 years, there is nothing preventing companies from replicating an exact carbon copy of a drug and masking it as its own product. This is exemplified by pain killing over-the-counter drugs such as Advil, with many stores such as Target selling their own "Target brand" product that is literally the exact same product in reality. The catch is that these store brands and other knock-offs will sometimes cost half as much as it would to purchase the Advil brand, despite receiving identical benefits from either one. Despite this, lots of consumers still buy Advil and other similar "name brands". Why is that?

I think you can tie this into what we have read and talked about regarding brand equity. A specific section of "In Search of True Brand Equity Metrics: All Market Share Ain't Created Equal" talks about customer loyalty, the ultimate driver of the repeat purchase behavior that marketers desire so greatly. According to Reynolds and Phillips in their article about brand equity, "loyal customers are defined by the strength of their quality and price perceptions, and how those perceptions relate to purchase behavior". Clearly, brands like Advil have acquired loyalty through reputation, being a top-of-the-mind brand if you have any kind of aches or pains. This contributes to their overall brand equity, supporting the sustainability of their sales and continued success. What's interesting to me is the bit about price. Strength of price perception in this situation would imply the implication that consumers are getting a higher quality painkiller when buying Advil over a knock-off or store brand, considering they are paying a premium in comparison. However, as we know, this is not at all the case. The overarching point here is the power of brand reputation and tradition when considering brand equity. Even when a known brand charges a higher price for a product literally without any competitive advantage at all, many consumers stay loyal to the brand's reputation and perceived high quality because of the historic trust they have in the product to relieve them of pain. All you can say is hats off to companies who market products like Advil, who are successfully tapping into an important aspect of brand equity and profiting as a result without the benefit of actually selling a better product.

Brand Salience: How Audi Stood Out From the Crowd

The article "Differentiation or Salience" brought up a very interesting point when it comes to brand differentiation. In some industries, brand image and values don't actually differ much for mainstream competitors. The brands will often preach similar messages and tout the same features, but paradoxically some brands still have a much greater market share than others. According to the authors of this article, the main reason behind this is something called salience. 

Brand salience specifically refers to how a consumer feels about a brand. These positive feelings don't come from just competitive advantages or better prices, but also from an emotional differentiation too. The more strongly a person feels positively about a brand, the more salient that brand is considered toward that person. So the natural question is: how can a brand achieve salience among consumers within their market? One of the answers to that question is effective advertising. 

Advertising, when done right, can be truly memorable and keep a brand's name in the back of consumer's minds for a very long time. A perfect example of this was Audi's 2016 Superbowl commercial (https://www.youtube.com/watch?v=yB8tgVqmKzw). The commercial is not only an Audi advertisement but a tribute to the late singer/songwriter David Bowie, a beloved global icon. The commercial deviates from Audi's typical commercials that highlight Audi's superior sport car features while retaining the comfort and image of a luxury car. It inspires adventure, as evidenced from the former space explorer feeling alive again when viewing the Audi (as "Starman" fittingly plays in the background). The execution is dramatically brilliant, and the ad as a whole is a moving one that inspires the freedom of adventure while honoring the celebrity who embodied this quality more than any other. Judging from the millions of views and top comments on Youtube, people absolutely loved it, with many going as far to say it gave them the chills. 

This is a perfect example of achieving brand salience. The commercials that hype of car performance mostly don't last in the memory, but it's safe to say this commercial will. It gives Audi an extra feather in its cap when it comes to its overall image, conveying a sense of freedom and artistry that other luxury sports cars don't have. As consumers are impacted by the commercial, Audi very well may reap the rewards of increased market share, despite not really changing its overall positioning strategy in the long run. This is the power of utilizing brand salience.  

When Listening to Your Customers Can be a Bad Thing

One of the articles read for Tuesday's class is "Market Segmentation: a Strategic Management Tool" by Richard M. Johnson. It made a lot of great points about perceptual mapping and how that knowledge can lead to effective positioning or repositioning, but I fundamentally disagree with one of the points made toward the end of the article.

Johnson describes three main strategies for increasing market share by repositioning: positioning closer to companies that have achieved substantial market share (imitators), positioning farther away from all competitors (innovators), and determining positioning strategy almost exclusively by consumer preferences. The first two are certainly legitimate, successful innovators achieve huge amounts of market share and other companies make up lost ground by adapting to whatever competitive advantage the innovator established early on. But if a company were to position themselves according to their market research of consumers, I think they would find it increasingly difficult to survive.

The photography company Kodak is a perfect examples that illustrates this. Kodak's bread and butter was always film-based photography, and thrived on this specialty for a while. However, as always seems to happen in any market, a disrupting factor came about eventually. That disrupting factor was digital photography, and ironically enough it was Kodak that invented it. However, senior management's reaction went something like this: "That's great and all, but we're a great company because our consumers love our high quality film-based pictures. Don't tell anyone about this" (http://onforb.es/1T6bfTw).

This is why in my opinion, Johnson's third repositioning option is flawed. When Kodak examined a potential repositioning moment, their conclusion was to listen to their customers for direction: they loved what Kodak was offering them. This is such a flawed decision making structure because consumers can only ever know about what's currently on the market when they provide feedback on their wants and needs. Companies always have to be keeping a watchful eye on market trends, because digital photography did get developed elsewhere. As companies realized the overall trend of digitization, it eventually became an industry standard. By this point, the vast majority of consumers would now be indicating that their desire for the photography industry was a high-performing digital camera. But at that point, it's too late for Kodak.

Companies should always listen to their customers, that kind of feedback is critical for understanding what they do well and what they could improve upon. But when you focus your offerings and positioning strategies solely based on that feedback, you're stifling any potential of innovation your company may have. And by doing that, as new technology develops and market needs eventually shift, you're bound to have your Kodak moment at some point in the future.

"Annoying and Intrusive": Why There's More to Marketing Than Meets the Eye

I genuinely enjoyed class on Tuesday, in which debate teams were set up to argue for and against marketing as a whole. I wish I had been given the opportunity to be a debater rather than a question creator, because I had a lot to say about quite a few of the topics that were brought up. I'd like to go into detail about one of those topics in particular, and that is marketing's ability to inspire others when done correctly.

The notion of marketing being annoying and pushy bothers me, because there's so much more to it than Billy Mays trying to jam some random product down your throat through a TV. The two examples used to combat this in class were the Red Cross' promotional efforts to save lives, and Felix Baumgartner's Red Bull sponsored jump from the stratosphere. The former is very straightforward, so I'd like to explore the latter in a little more detail.

Red Bull Stratos was the name of a project that sent Baumgartner 24 miles into the stratosphere in a giant helium balloon, with the intention of jumping into record-breaking free fall before eventually deploying a parachute. While space travel has obviously been around for decades, nobody had ever attempted anything quite like this.

In my opinion, the project was marketing genius. Red Bull offered a free Youtube stream of the event, and a main source of raising awareness about the project was through social media and word of mouth. In total, over 8 million people watched Baumgartner make his historic jump, a truly astronomical figure of viewership. What those 8 million people saw was pure inspiration derived from previously unexplored boundaries being surpassed. The project was bold, creative, ambitious and full of adrenaline, all of which are some of the core attributes of Red Bull's brand as a whole. Creating inspiration in millions of viewers while reinforcing your brand and possibly exposing it to new consumers is marketing done right in my book. When you think of marketing, think of something like this rather than the perceived annoying companies that are still trying to figure it out.