Take a look at the websites of most companies operating at the premium end of the spectrum, and you will usually find something about customer service, generally explicit but sometimes implicit. That’s not too surprising, since it can be an important factor in both a company’s brand image and also in persuading savvy consumers that paying extra for a premium product really is justifiable. How important? Here’s a true story.
 
A couple visited the boutique store of a watch company – a premium brand, though not one of the ‘top tier’. He was looking to buy a particular watch, one of the company’s top-end models. Now, this guy is a pretty serious horologist, with a small but decent collection, and an admirable knowledge of the companies and watches at the high end of the market. He visited this boutique for a specific watch, and wouldn’t otherwise have considered one of this company’s products.
 
The service they received was truly exceptional. First, the salesperson knew everything that could be expected about the brand, and about the range of watches, and then some. There was no hard sell; in fact, the process was so ‘soft’that the selling was almost imperceptible. And once the sale was made, glasses of champagne were produced for the couple, to help pass the time while the watch was adjusted, sized, and prepared for use by the on-site watchmaker.
 
The enthusiast's wife was equally impressed; she has a watch from one of the top French luxury firms, whose name is instantly recognizable by all. She’s a devotee of the watches of this brand, and never considered anything else. The salesperson was happy to show her anything she wanted to see, which included one particular watch that took her fancy, providing all the requested information, and offering some accessories with which to compare and contrast the watch. Again, no pressure, just helpful, informative, low-key, and above all relaxed.
 
What topped it all off came a few days later: a handwritten note from the salesperson, thanking them for their visit and their custom. You might think that’s over the top, fawning, cheesy, especially since it was for the sale of just one watch. Well, I can tell you that the couple were mightily impressed; unless you’re dealing with ultra-luxury megabucks products, who offers that kind of service and attention to detail these days? And the result of making the showroom experience so pleasant and unpressured, and taking a few minutes to write that note, is that the company is firmly on the radar for both of them; it has converted the wife from being a devotee of a single brand to appreciating that this other brand has something to offer, beyond just what is on her wrist. And it's worth noting that the watch she fancied, is one of the most expensive the company offers, equal in price to three or four of the watches her husband purchased, and being a branded boutique, all prices are MSRP.  The exemplary service rendered this acceptable for a product that the cognoscenti always purchase at a discount.
 
This level of service, this attention to detail, can help define and distinguish a brand.  It is a primary determinant of sales margin.  Branding goes far deeper than a logo or a corporate color scheme, it is the form and ethos of interaction with the consumer and with partners.  Brand equity is often the key differentiator between a company and the competition, and the strategy through which a brand is built and managed simply cannot be about the corporate logo, or what font to use; customer service needs to be an integral part of what you do, since it is central to how you are perceived by your customers, how often they buy from you, the emotional investment they make, and how much of their temporal and pecuniary currency they spend.

When Conde Nast pulled the plug on 68-year old Gourmet Magazine last October after ad revenues plunged with the economy, people who loved the publication, and others who scorned it, believed they’d seen the last of it.  At least, the last of new content, as many subscribers saved complete sets of back issues, donated them to libraries, and you can find the complete archives online – interesting for a publication that many of its detractors insisted was the epitome of snobbishness.

Well, Gourmet lives again…but not in print.  Conde Nast has announced the development of digital product called “Gourmet Live”, due to launch in Q4 of this year.  The new version is not an e-Zine, but a downloadable app, which will bring users to a mix of content which includes articles, recipes, slideshows, videos, etc.  Social media is incorporated – users can see which of their connections has viewed something and what they have said about it.  Although app download will be free, once a certain usage level has been hit, paid membership will be required.

The question of “who is the intended audience?” comes to mind immediately, because exactly what the content will be and where it is coming from seems a bit uncertain.  The Gourmet site promises a “new experience”, while an Associated Press article mentions buying credits which would allow users to access collections of recipes.  Since the current Gourmet recipe archives are available online to anyone already, it would seem that Conde Nast is planning to acquire other recipe archives – or stop making their own available, which may anger former subscribers.

Mediapost.com mentions that some content will come from the archives, some fresh content will come from independent “producers” that Conde Nast will hire, but they also speculate that Bon Appetit staffers and Epicurious interns might wind up doing more than anyone will admit now.  This all takes me back to – who is the intended audience?  Because, the initial thought, at least, is that this aimed at wooing back some of their old subscribers, which were about a million strong.  But, if basic content is coming from the archives, subscribers have seen it before, can access it online now and may have it in print at home.  If at least a significant portion of the new content winds up coming from Bon Appetit staffers, these are writers from a magazine that Gourmet subscribers do not like.

It’s not that reviving Gourmet as “Gourmet Live” is a bad idea, it’s not.  But if the aim is to attract their old subscribers, a significant proportion of the content has to be new and the magazine should stay away from using staff from their remaining food publications.  In any case, now that they have made the decision to go into this format, especially with their emphasis on the social networking aspects, there may be a significant new audience out there who was turned off by the imagined “snobbishness” – so why limit their sights?
 

Sources: MediaPost.com, Raw, Live and Unadulterated, ‘Gourmet’ Mag To Live Again (Well, Sort Of), Posted June 22, 2010 by John Capone.  Associated Press, Gourmet brand, dead as magazine, returns as an app, June 22, 2010, by Andrew Vanacore.  Wall Street Journal, Digits, Technology News and Insights, App Watch: Gourmet Magazine Being Revived — Sort Of,  June 22, 2010, by Russell Adams.

Back in 1979, the Buggles told us that “Video killed the Radio Star” – and after the video for their song became the first ever played on MTV at midnight on August 1, 1981, they turned out to be right.  However, it took the ability to download songs directly off the internet to change the way music business operated.

Now, the internet may be a driving force behind a change in U.S. car culture – one which is seeing fewer members of Gen Y take to the roads.  According to an article that appeared in both Advertising Age and Automotive News (Crain Publications siblings), the trend has been building for 15 years, but 20-somethings were under-indexing on driving (total highway miles) in 2009, when they were over-indexing as a percentage of the population in 1995.

So, what does the internet have to do with it?  Well, if you ask Gen-Y, it doesn’t, not directly, anyway.  They’ll tell you their concern for the environment has taken them off the road, so if they are buying via e-commerce and iPhone apps, instead of driving to big box stores, it isn’t because they are yearning to bring back Main Street Mom & Pop stores so they can drive there – it’s because they prefer to shop via the internet.

In terms of commuting, or longer trips that would require a car, if they are in a place where they can do it, they prefer to take the train, because it allows them to use the time to work, connected to the internet , which hasn’t been possible in a car, although systems  like Ford’s Sych allow for other kinds of connectivity.  Some cars, such as the Audi A8, will offer internet access with this year.  However, few 20-somethings will be able to afford – or will want to buy – the A8, even with the internet access.  While the car used to symbolize freedom to most Americans – the fact that it can’t offer constant access to the kind of technology many 20-somethings now view as freeing may mean the end of that view for the younger generation.

There is some thought that when the economy picks up and more people go back to work or when Gen Y ages a bit and has children which require things like minivans to take them to soccer games, etc., driving may appeal more to younger people – and that may be true, but it seems like a love affair with the car may have been replaced by a love affair with other technology for a generation.

Strategic branding is the development and execution of a holistic brand strategy, the definition and positioning of a brand within every relevant context, and the effective marketing of that brand. While it might seem self-evident, I often find that prospective clients ask why strategic branding is important.

The issue of strategic as opposed to tactical marketing, particularly with regard to building the awareness and impact of brands and sub-brands, is one of planning and awareness.  As we all know, strategy concerns itself with the big picture and the long-term goal; it is the overarching plan.  Tactics are the short-term actions which move one towards the strategic goal.  Tactics and strategy are closely related and, ideally, integrated but too often companies do not have a good strategic plan in place, and they are tactically reactive.  This at best maintains status quo since absent a strategy, it is extremely difficult to capitalize on tactical success; without a strategy, it is difficult to know what success means.

Strategic branding is the most complex aspect of marketing and involves taking the long view.  Knowledge must be gained and assimilated through research, awareness, and relevant dialogue.  Next, it means intelligent, open-minded analysis and an ability to formulate solutions that will provide direction for the long term, and also the flexibility to change with a changing market landscape.  Strategic branding takes into account the brand itself, the sub-brands or related brands, competitors, global and regional economic trends in the relevant industry and sectors, and broad psychology as it relates to prospects, target consumers of the brand, whether B2C or B2B, and those who manage and represent the brand itself.

It is vital to take a brand's temperature at regular intervals, therefore strategic branding will include processes by which brand equity can be frequently assessed, and adjustments can be made.  Strategic branding helps a company take necessary changes in stride while maintaining focus on and measurement against the long-term goals.

Good strategic marketing offers a key benefit to product development because products can be measured against the brand strategy, and either the product branding or the product itself can be efficiently and inexpensively revised to maintain and improve overall brand integrity.

If these are the benefits of strategic branding, what are its effects?  The greatest effect is strong direction and a thorough understanding of a brand's ethos.  Without this, a brand may have great sales success in a boom economy, but stops dead in a recession.  While a firm brand strategy might seem to promote inflexibility, it is in fact the very thing that allows quick and successful reactions to change because a company is always rooted in its long-term goals and philosophies.  The greatest effects of good strategic branding are high morale and higher profits, the first because teams know what they are trying to accomplish and often how to accomplish it, and the second because a strong brand strategy maintains focus and efficiency.  As well, a strong brand is able to increase its margins because part of its sales are a result of its branding, all those positive perceptions that strategic branding helps to realize.

Do you know what your brand's strategy is?

It’s been a couple of months since I took a look at the figures released by AdMob on the number of ads served to mobile devices. It was worth taking a break – as I predicted in my previous article, the number of ads served actually fell in February. The January numbers showed spectacular growth, but that was something of an anomaly, a blip driven by the large number of devices coming online after the Christmas period.

So if we compare the numbers for March with those for January, we see a growth of 9.6% - but since January saw a spike, perhaps a more meaningful comparison is with December 2009. That gives an increase of a remarkable 45% overall, in the space of just three months, but as with all statistics, you have to look beyond the headline figures – and in this case, the picture changes. The numbers above refer to the growth in mobile ads worldwide – according to AdMob, some 16.7 billion ads were served in March around the globe. But there are significant regional variations.

Take the North American market, where 8.2 billion ads were served in March. That makes it the single biggest market in the world, with 49% of the worldwide total – but growth since December was 'only' 39.7%. That’s still a spectacular increase; if that quarterly rate is sustained, then March 2011 will see 31 billion ads served in North America alone, almost double the number served to the entire world in March 2010. The European market is also growing – but the powerhouse behind the increasing numbers is Asia. The total number of ads is only half that for North America - but growth over the quarter was an explosive 72%. If that is sustained, then this time next year Asia will overtake North America as the largest market, with an astonishing 36 billion ads.

Of course, all of this is speculation, and shouldn't be relied upon. The increasing number of phones based on Google's Android OS may have an effect, along with the 3G-enabled iPad and the iPhone 4G. It also remains to be seen at what point the North American market becomes sated, while demand in China may still be ramping up. Looking at it from a marketing perspective, any multi-national company planning a campaign which incorporates mobile ads needs to be paying attention to just how big the Asian market is becoming. You can find the AdMob reports here.

Pretty much all companies in the premium consumer market recognize the importance of a strong brand image; after all, to a large extent that's what people are buying into. And for a brand image to work and remain strong, all of a company's marketing and advertising - anything the consumer comes into contact with, in fact - has to live up to, and reinforce, that image.

Having said that, Abercrombie & Fitch seem intent on demonstrating that slavish adherence to the brand image can be damaging. Last year the iconic firm was ordered to pay thousands of pounds in compensation after requesting a worker with a prosthetic arm confine herself to the storeroom - rather than the sales floor of its London store - until winter uniforms, covering up more of her arm, were introduced. Not the kind of publicity they would want, but possibly something which could be dismissed as a one-off.

Abercrombie & Fitch are set to open a new store in Aberdeen, Scotland - only its second store in the UK. Last month, reported Personnel Today, outside the Aberdeen store, posters recruiting new staff appeared - posters which asked for "cool and good-looking people". Now, this isn't directly outlawed by the UK's anti-discrimination legislation, but an older person, or someone with a facial disfigurement, who were turned down for jobs or consigned to the storeroom could claim the posters were evidence of a predisposition to discriminate against them. Even if no action is ever taken, the bad publicity such an ill-advised campaign can generate, in combination with the earlier incident, is hardly good news. It makes Abercrombie & Fitch look like the kind of company which is solely interested in the cool and good-looking, something which may stop the rest of us from even crossing the threshold of their stores.

It is important to recognize that a strong brand image is an essential part of the portfolio of companies striving to attract high-end consumers; but that has to come with an appreciation that slavish adherence to an image which is designed to appeal to a specific niche can alienate potential customers who don't quite fit the profile. And that can impact a company where it hurts most: on the bottom line.

The economic downturn has not been kind to many firms in the premium sector - but not all luxury brands have struggled. Here at Intelliga, we were interested to read an article in Newsweek which looked at companies which have bucked the trend, and actually experienced growth. The article, Classic to the Core, explains that they have achieved this by strategies we stress to all our clients: having a strong brand, sticking faithfully to the brand image and majoring on quality and exclusivity.

The article looks at luxury brands – mostly fashion brands – that have seen varying degrees of success in navigating the global financial crisis and discusses the reasons why some have prospered while others have seen sales decline or, like fashion house Christian Lacroix, have gone under.  The article cites a study by Bain and Company that found the luxury market fell 10% in the US and 8% globally in 2009 – the first time the overall market for luxuries ever declined.

However, Hermès sales grew 8.5% worldwide in 2009, and turned in an 11% increase in Q4, while LVMH’s flagship brand, Louis Vuitton, also had a good 2009, enjoying double-digit growth.  What did these brands do?  They focused on “what they do best – classic bags and scarves for Hermès, old-fashioned luggage for Louis Vuitton”. There were no discounts, trendy product introductions or attempts to go downmarket.  Hermès even opened a new store in Manhattan in February – the brand’s first men’s store.

Apparently, for some brands, luxury isn’t dead, or even in hibernation, it has just gone back to an emphasis on quality, classic and more conservative items.  Consumers who may have bought more trendy and conspicuous items are moving back to “tried-and-true stalwarts”.

Famous luxury brands with more extrovert products that experienced sales declines shouldn’t worry, though.  NYU Professor Scott Galloway, who studies luxury marketing, believes the market for 'conspicuous consumption' items such as Porsches and Manolo Blahniks, which are classics, will rebound as soon as people have money in their pockets again.  There are people who could buy these items – they have been not been doing so because they don’t want to be seen as crass.  And the Bain study indicates that even if the market for some products never recovers to previous levels in the US, markets such as China, India and Brazil will more than make up for it – and there will probably be lots of room for less conservative items.

If someone told you that your marketing and advertising was failing to target a significant market segment - one that makes up a sixth of the population, one that spent over a trillion dollars last year - would you be concerned? You should be, according to a survey commissioned by Orci.  Just over half of respondents prepared no materials in Spanish to target the Hispanic market, and another 32% had at most 10% of their material in Spanish.

Those statistics suggest a remarkable degree of complacency by the marketers who responded, and the survey was commented on by both Forbes and Advertising Age. What should the marketers do about it? Presumably they should go out and find an agency with specialist knowledge of the Hispanic market and start targeting this neglected segment.

But maybe companies should also take a look at the survey in conjunction with the results of the Pew Foundation report from 2007, which, while stressing the bilingual nature of the Hispanic population, also found that 88% of second generation Hispanic adults and 94% of third and later generations spoke English very well, although they still speak Spanish.

Also, Hispanic marketing isn’t as simple as getting materials and ads done in Spanish. Cuban-Americans are different than the Puerto Rican community, who are different than Mexican Americans, and once marketers go down the road of specific Spanish-language Hispanic advertising and marketing efforts, it can be a fragmented and expensive effort.  If you believe that your current efforts are reaching a significant portion of the Hispanic population through English at some point, then you will not do more specifically aimed at Hispanics unless there is a compelling reason.

What would be a compelling reason?  Products that skew Hispanic, proof of return on investment and an expectation of significant sales growth from the Hispanic market. Do the survey results bear this out?

Orci’s press release noted the survey was sent to 9,300 senior marketers at Fortune 1000 companies in February 2010.  The results available on Orci’s site contained no data on the actual number of respondents, so there is no way to know what the final sample was.  This is unusual – and disturbing.  While it’s normal for companies to spin results of surveys and reports to be as favourable as possible and to use them to generate business, it’s very unusual to have sent out a survey to over 9,000 people and then not release the respondent sample size.

• 60% of respondents had Marketing/Ad budgets of $1 million or less – which means the sample skewed to the small end of the Fortune 1000 – it’s not clear how representative it was;
• Only 4% of respondents believed their products were more suited for the Hispanic than the General Market in the US.  There wasn’t a huge number who were looking at a big Hispanic skew.;
• While 8% of respondents said they expected sales to Hispanics in the US to increase significantly in the next 12 months, only 26% said they expected them to increase moderately and over 50% said they expected them to stay the same – which may explain why 38% said they didn’t believe an increase in marketing budget to Hispanics would be justified with a return on investment and 29% believed what they were doing now was appropriate.

I guess I should apologize here and now to Orci for having picked apart their survey; there is nothing particularly special about it, nothing that separates it from similar efforts by other companies. And that's my point: next time you see an article which quotes statistics and conclusions from a survey, don't necessarily believe what you read.

AdMob, the company which places ads on websites targeted at mobile users and which has just been acquired by Google, has published the results of a survey into app downloading, buying and usage habits. While the survey was quite small – under 1,000 people who opted-in to the survey – the findings were interesting. iPhone and Android users both downloaded just under 9 apps per month on average, but both were outdone by iPod Touch users, who averaged 12 apps per month.  And those iPod apps also get more use; an average of 100 minutes per user per day, compared to 80 minutes for iPhone and Android.

When it comes to actually paying for apps, Android users average just over one app per month, with only 21% of users buying anything; iPod Touch users average 1.6 apps per month, while the iPhone leads the way with 1.8 – and with 50% of users buying at least one app per month.

The number of ads served by AdMob continues to grow at an astonishing rate; in January, over 7.3 billion ads were served in North America, a jump of a third over December 2009. That rate of growth may slow in the coming months – all those Christmas presents are sure to have caused a spike in January demand and usage, which will likely drop off a little in February. The iPhone and iPod Touch accounted for a whopping 40% of those ads.

What does all this mean? It’s a good indication that the apparently insatiable appetite for apps shows no sign of slowing, and that the rise of the smartphone has yet to get anywhere near a peak. The marketing opportunities presented by providing branded apps, or by using mobile advertising, are ones that companies ignore at their peril. You can find the AdMob reports here.

Salon.com features an interview with Columbia University business professor Sheena Iyengar, whose new book, “The Art of Choosing”, examines the way our personal expectations influence American thinking about personal choice.

She explains that Americans are asked to think about choices, from topics such as what we want to eat to what we want to be when we grow up, from a very early age, because we value self-expression and “in this country, self expression is primarily exercised through personal choice”. Other countries she discusses stress following directions in early childhood, not the independence and personal choice of America.

So, why is this important? Well, she also notes that having too many choices can lead to issues, whether it is ‘bad choices’ or outcomes that were not intended. While she only deals with the possible political and social implications on Salon (not surprising), the Editorial Review on amazon.com (Publishers Weekly) cites a case from her own research where shoppers shown 24 jams were only 1/10 as likely to purchase as those who were shown only six. In this case, the size of the consideration set did matter and certainly, the size or set-up of a shelf set is not something that should be causing consumers to turn away.

It’s not clear from the article or the review why certain choices, at least in the consumer arena, cause people to not buy or buy “incorrectly”. Whether it is lack of information, lack of brand or flavor preference or price differential, there’s not the information here to make that determination. But, it’s something that brands who are looking to expand their consumer consideration set should, well, consider.