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Brand Management (5 ECTS) YMAR1214

Vesa Markuksela

Davide Sgro [email protected] N° 0496782 Faculty of Social Sciences

29 May 2018

Contents Task 1 and 2 Conquering consumerspace ...………………………………….. p. 3, 4, 5, 6 Task 4 ...………………………………………………………………………. p. 7, 8 Task 1 and 2 The New Strategic Brand Management..……………………….. p. 9, 10, 11, 12 Task 3 ………………………………………………………………………….p. 13, 14, 15, 16 References ……………………………………………………………………..p. 17 Notes.………………………………………………………………………….. p. 18

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Task 1 and 2 – Book: Conquering Consumerspace Michael R. Solomon is an authoritative theorist as well as Professor of Marketing and Director of the Center for Consumer Research in the Haub School of Business at Saint Joseph's University in Philadelphia (U.S.A.); he is also Professor of Consumer Behavior at The University of Manchester in the U.K. At the same time he is a director of Mind/Share, Inc., a consulting firm specializing in online consumer research. Solomon's interest focuses on branding strategy, consumer behaviour and lifestyle issues, the psychology of fashion, and marketing applications of virtual worlds and other new media1. He has written over 30 books on these and related topics, as well as many feature articles in national magazines. His textbook, Consumer Behavior: Buying, Having, and Being, published by Pearson Education, are required reading in hundreds of business schools around the world. Another of his successful books is The Truth about What Customers Want, published by FT (Financial Times) Press. It’s important to underline also that he is a co-author of the first textbook on social media marketing called in exact terms Social Media Marketing, published by Pearson in January 2012. His most recent publication is Marketers, Tear Down These Walls! Liberating the Postmodern Consumer, a revolutionary book that explores the psychology of the consumer in today’s changing times 2. Michael Solomon is often quoted in newspapers and magazines, including The New York Times, The Wall Street Journal, and Newsweek. His appearances on television and radio to comment on consumer behaviour issues include "The Today Show" and "Good Morning America," among others. He received the important prize Cutty Sark Men's Fashion Award for his research on the psychological aspects of clothing. As a consultant at his own company he worked with numerous famous international firms including Calvin Klein, Intel, Procter & Gamble, Microsoft, State Farm Insurance, and United Airlines on issues relating to consumer behavior, marketing strategy, advertising and retailing. One of the most important lesson about the consumption that Michael Solomon leaves could be summarized in his sentence: "people don't buy things because of what they do; they buy things because of what they mean. Our choices of products and services, whether food, furniture, or fax machines, reflect a pattern of consumption that jointly defines a lifestyle." After analysing the author's biography, it is time to exploring the book Conquering consumerspace, marketing strategy for a branded world as required in the task 2 of the 1 2

Saint Joseph’s University: https://www.sju.edu/about-sju/faculty-staff/michael-solomon-phd Michael Solomon Website: https://www.michaelsolomon.com/books/

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assignment. Below are some key elements about the book content. Although it was published in 2003, this book is still today an excellent manual able to offer the student or entrepreneur who approaches the world of branding a complete overview of the subject. The author tries to help readers navigate today’s complex consumer economy, understand its challenges, and make profit on its several opportunities. The relationship between consumer and producer is well analysed from different points of view, in particular from the sociological one, highlighting the substantial differences that exist between today and the past. In particular, in the first part of the book we can read how today companies are starting to understand that consumers buy products because of what they mean, rather than what they do. Companies need to shift their focus away from marketing to people and, instead of selling to customers, selling with customers. We should forgot the tradition view of consumer as a passive subject to which a company can send messages not really accurate or useful, that’s why also the way of communicating is changed radically. The marketers today need to find new ways to speak to customers who are increasingly difficult to reach by conventional means. The advertisings are changing too in this direction, there are no longer thought as information about products or services, they are part entertainment part reality check. The book offers a different perspective of the consumer as such, the consumption is put in place because through it the consumer can express his identity in a variety of concrete ways, from food to apparel to music. Brands mean something to individuals because they mean something to a larger group, these groups are called brand communities and are the target of marketers. More this sense of belonging is strong, more the consumer feels a connection with the brand and he or she will be less likely to switch brands. The concept of Brand Personality is also one of the topics that I thought most interesting about the book; consumers determine their compatibility with others by observing others’ choices of leisure activities, cars, clothing, etc. Today, brand names have become so valuable that it’s common to find them valued in accounting terms just like any other tangible asset. With the term Brand Equity companies refer to the added value a brand can bring to the products in addition to what the products would have without the brand on them. In some cases this kind of equity is literally all the firm produces. One example is Nike, that doesn’t own any sneaker factories. The strength of the brand can be so influential that it makes the products become extensions of the person and reflection of what the person thinks of himself or herself. This phenomenon is called Extended Self3. The extended self is composed of the

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Conquering consumerspace, marketing strategy for a branded world - Michael R. Solomon (2003)

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products people value and those they despise. These choices are usually made by the consumers themselves rather than the marketers. Solomon also explains how important it is to know the consumer by focusing the attention in particular on how his characteristics change greatly depending on the age. Kids of Generation Y seem to be more materialistic, they are savvy about marketing strategies and they don’t care about image-building campaigns because they know celebrities are paid for saying that the product is good. Know the habits of your target audience is very important to achieve a good branding campaign, especially if the target is very young: cultivate the brand loyalty at an early age can create a solid connection between company and consumer and can be a huge advantage for the future sales. Even if it sounds like old, the book quoted MTV as the perfect channel for developing a good brand campaign. A global youth culture is rising and the Internet and communication networks like MTV are helping this phenomenon to merge. Always more often kids are united in youth tribes by shared means, values, interests, rather than geographic proximity. Solomon names Vans as one of the brand that is trying to create a proper lifestyle around itself by sponsoring activities, producing documentary films, building skateboard parks. When we talk about youth, achieving the status of Cool is the best thing your brand can aspire to. In the book the author analysed the Coolness as a set of meanings affiliated with a desirable lifestyle; anyway is not an easy matter to deal with, every country is different and has a different conception of what is cool and what is not, that’s why branding is so challenging. Another important concept the author wants to teach us is the idea that it’s less expensive to keep an existing customer than to find and win a new one. That’s why CRM (Customer Relationship Management) is fundamental in a branding strategy: a good CRM helps the brand to get an higher rate of customer retention and satisfaction, creating a win-win situation for the company and the customer at the same time. Customers should be considered as partner, as co-producer of the product; and to do that we need their feedback, another keyword that Solomon ask us to keep in mind. The first source of feedback are the employees, there are companies, in fact, that think is really profitable to leave their workers free time for letting them develop their own project, inviting them to try and even make mistakes. There are two kind of ways for obtaining feedback: Online and Offline. The online feedback are obtainable thanks to digital tools as surveys or to data analysis, they are cheaper and efficient; the offline methods as mails or phone calls are still used but are not effective as the online ones. Also the costumerspace can be Online or Offline. In particular in the online one the focus of marketers should stay on the word of mouth: paying for getting good reviews is not 5

so effective anymore because of the growing awareness of the consumer; regarding the offline consumerspace the author names Walt Disney as an example of excellence, inviting the readers to follow his strategy based on recreating in the reality a space that seems perfect without problems or prejudices, where the enjoyment and the utilitarian value coexist. The contents provided by this book are many and touch various points of the subject of branding. Themes are explained in clear language and are often supported by concrete examples that help the reader to understand. Indeed these examples are very useful in a field like brand management where creativity is a key requirement, because they provide models to be inspired by. I think that the argumentations are well organized and all the book follows a logical order: it begins by talking about how in the history we approached the consumer compared to today, then the characteristics of the current consumer and the future one (gen Y), how to retain him, and finally the channels that we have to achieve him. The manual is also suitable for those who have never had to deal with management or communication studies because it exposes the arguments in a simple manner; the inevitable consequence of this is that obviously for those who already know the subject the reading could be a bit obvious and commonplace. If I had read this book in 2003, the year it was published, it probably could have taught me much more than what it was able to teach me today. The consumer and his habits change continuously and very quickly, so it becomes difficult not to be obvious after more than fifteen years after publication. Compared to some of my most recent readings such as Create!, published in 2012 by Mirko Pallera, founder of Ninja Marketing (the first blog in Italy on marketing), Conquering Consumerspace seems to be outdated: arguments such as the youth tribe, or talking about MTV and the television as a fundamental channel to reach young people, or the idea of consumption in order to acquire a status symbol (today we speak of mind symbol) are outdated concepts nowadays. However, it is necessary to give credit to this book that has contributed to the international spread of branding strategies, favouring on the one hand the companies by obtaining more profits on the other the consumer by having a better consumption experience. Although my previous criticisms, reading this book was certainly very useful, it helped me a lot to consolidate some issues and gave me interesting insights through concrete examples which I had never heard of before. For instance, despite the distant date of publication, I identified myself a lot in the description of the new generations and I think the analysis is still valid today. I’m conscious that companies use techniques for convincing me to buy their products and as a consequence I’m really sceptical about every advertisements, especially if 6

they seem too much promising and easily recognizable as spam; I’m also totally indifferent to the advertisements that use image-building campaigns because I feel like I'm being teased. Task 4 - Elaborate yourself as consumer in the contemporary consumerspace As a consumer and marketing student at the same time, I often find myself aware of how my mind is manipulated by marketers in an attempt to induce me to purchase. Nevertheless I admit to be influenced neither more nor less than the other non-marketing students and with the reading of this book I had confirmation of it. For example, I notice that clothing is one of the aspects that in my mind leads more strongly to the belonging to one or the another youth tribe. I can notice that on myself too: during the period of university lectures I dress in a more elegant and formal way, but I keep some creative and extravagant details, trying to be associated with the tribe of young entrepreneurs or start-up founders (since it is a hidden dream of mine); during the summer instead I like to wear skateboard brands clothes, because I consider them cooler, non-mainstream, and because I think you are labeled as a person with style and with good musical tastes if you wear them. I must add that many skateboard brands today are becoming more and more common among young people, who had started wearing them to look cool and different from the others but at the same time they contributed to the homologation. Brand such as Vans in my mind are still cool but not as much as some years ago; young people wear them as an alternative to Nike or Adidas, which for Vans means having reached the mass market but at the same time having lost its uniqueness. I don’t think clothes or any other physical object can be considered my Extended Self, however, reflecting on this, I think I could retain my social accounts as extensions of my personality. Through social media I communicate in such a way that others consider me a better, nicer, more creative, more whimsical person. I don’t know if I succeed in this goal but I would like people consider my activities on social network as part of my person. We could discuss for hours about that but I believe that in some ways those contents are part of us, they are thought and created by us. In this sense, I consider myself as a co-creator for companies like Facebook, Instagram, Twitter; actually every social network is based on the concept that the consumers create the contents and contribute to offer a consumption experience of a service that otherwise would not exist. Another thing I realized by reading this book it’s how the relationship that exists between me and the producers of the goods or services that I consume has changed significantly compared to some years ago. Until the last century there was a commercial system where producers dictated what consumers bought, when, where; today the consumer has the opportunity to 7

choose every aspect of the consumption process, the possibility of choice has become very wide and his decision-making power has grown exponentially. All these factors have consequently led companies to attempt to achieve the Mass Customization: the strategy of production of goods and services aimed at satisfying the individual needs of the customers and at the same time preserving the efficiency of mass production, in terms of low production costs and low sales prices4. As a customer I do not always consider mass customization essential or really useful to increase my satisfaction. In many situations, especially for high consumption products, I prefer to buy the standard version proposed by the company without modifying some characteristics according to my personal taste. A trivial but useful example to understand my opinion is the ordering of pizza at the restaurant. Especially if we are in a renowned pizzeria I think it is better to taste the various pizzas proposed by the chef, even if there is no one that perfectly matches our taste, rather than requesting one with different ingredients chosen by us. This is because it will probably cost us more for having requested something extra, secondly it is not sure that we could enjoy it more than the pizzas proposed on the menu, which are probably the result of years of taste research and customer satisfaction analysis. Rather than customization I prefer to have a certain number of possibilities to choose from, but without exaggerating, I think an excessive number of variants creates more confusion than benefits. Regarding brand loyalty, I think fashion houses are the ones that have the greatest influence on me, especially on shoes, it would be very rare to buy a pair of shoes from one unknown brand. This is mainly because when I buy clothes I care more in what the meaning behind the brand is, I don’t care too much about the texture or the quality of the cloth, is more important the message behind the brand, its role is more emotional than practical. For technological products instead I'm not loyal to a specific brand. Even if in my mind there are technological brands associated with quality, my choice of purchase is based above all on videos and online reviews realized by specialized magazines, in order to have the best product at the lowest cost, whatever the brand of the product is. Continuing the discussion on reviews, I do not usually write articles or create videos on products I buy, my few reviews are more about restaurants on Tripadvisor and about hotels or B&B. In general, advertising does not influence me much, just because, as I said, I often choose what to buy based on online reviews; however I am positively impressed especially when companies manage to use for their advertisings some very current events or news in a funny manner through the use of Memes on social networks, making them viral advertisings.

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Wikipedia – Mass Customization: https://en.wikipedia.org/wiki/Mass_customization

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Task 1 and 2 – Book: The New Strategic Brand Management Jean-Noël Kapferer, author of The New Strategic Brand Management, is a global brand strategist with a Ph.D from Northwestern University and international consulting experience stretching from Europe and North America to Asia. At HEC of Paris, he teaches at the Grande Ecole, MBA and Executive Education level. He is famous around the globe as an expert on brands and for his advanced work on brand identity, strategic brand management, brand portfolios, brand architectures and most recently on prestige and luxury management. He wrote more than one hundred articles, published in the most famous American, European, and Asian journals, winning the American Marketing Association Award in 2004 for the most influential contribution to marketing thinking for his article on Local versus multinational brand strategy. He is the author of fifteen books on communication, brand management, word of mouth, advertising, some of which have been widespread throughout the world: Strategic Brand Management (2008), Re-inventing the brand (2001), the latest The Luxury Strategy (2009) all published by Kogan Page and Rumours (1991, Transaction Publishers) management and influence of word of mouth and buzz5. All his works have been translated into several languages and widely diffused throughout the world. Kapferer, thanks to his highly international vision and background, is able to describe in depth all the branding theory by using creative recommendations and a permanent equilibrium between theory and practice6. He is often asked as speaker for conferences and seminars all around the world considering his enormous cultural background and his experience in brand management field. Let's proceed now with the analysis of the book The New Strategic Brand Management as requested in the task 2 of this assignment. The first edition of this book was published in 1992 in France, the edition we will discuss, the third one published in 2004, is much more than a simple revision. It is a whole new book for understanding today's br...