Brand Value: a new definition

In the new Millennial-inspired Participation Economy, the old definition of brand value — the one that worked for decades — is dead.

As marketers, we knew that the sum of our core functional and emotional benefits divided by price would give us a proxy for brand value.  Stronger brands had more price elasticity.  However, the old definition no longer holds if you want to engage Millennials or older generations that are adopting a “Millennial Mindset.”

(Copyright© 2013 by Barkley. All rights reserved.)

THE NEW DEFINITION OF BRAND VALUE
Millennials don’t just want to buy your brand, they want to be a part of it. They’re looking for ways to participate.  And they want to understand why you do what you do not just what you want to sell.  As a result, the brand value equation has morphed to include participative benefits. This is key for tapping into Millennial passion — and therefore, Millennials’ dollars.
In The Participation Economy, (emotional benefits + function benefits + participative benefits)/price = brand value. We’ll explore this more in a bit. First, let’s review who makes up this generation — and how they influence your other consumers, too.

MILLENNIALS & THEIR INFLUENCE
Millennials, also known as Gen Y, make up 80+ million consumers in the United States alone. They were born between 1977 and 2000 (give or take a few years, depending on your definition.) In addition to these 80 million consumers, Millennials influence a significant number of people outside their generation.  They are “tastemakers” when it comes to influencing new technology adoption and major cultural trends.
Barkley joined forces on a research project with Boston Consulting Group and SMG aimed at learning more about this demographic. The result was a research study, “American Millennials: Deciphering the Enigma Generation.“ We learned some really interesting things about this generation.  You can learn more by watching this video.



HOW TO WIN IN THE PARTICIPATION ECONOMY
Millennials want to be active participants, not passive consumers. To win with this cohort, brands must incorporate participative benefits into their models. Take a look at the chart below. If the language on the left better describes how you discuss your marketing strategy, you’re likely to lose Millennial and Millennial-minded participants.

(Copyright© 2013 by Barkley. All rights reserved.)

Does your brand tap into Millennials’ penchant for sharing and does it allow them to co-create?  The next big idea is likely in the upper right quadrant of the matrix below.

(Copyright© 2013 by Barkley. All rights reserved.)

DECONSTRUCTING PARTICIPATION
Driven by advancements in digital and mobile technology, Millennials are practically demanding to be a part of the process. The type of participation Millennials want to engage in breaks into three types. Millennials want to cocreate the products and services that you sell. Millennials want to co-create the customer journey or the customer experience. And Millennials want to cocreate the marketing — which goes beyond social media.
One way brands can do this is by crowdsourcing ideas. That’s what Sam Adams Boston Brewery did at South by Southwest with its CrowdCraft Project. The app allowed consumers to help determine a new brew’s color, hops, malt, body, etc. This is a perfect example of allowing consumers to be with you along the way.

DECONSTRUCTING SHAREWORTHY
Shareworthiness is rooted in Millennials’ strong desire for peer affirmation. According to Barkley research, 70 percent of Millennials say they are more excited about decisions they’ve made when their friends agree with them.
Common roads to shareworthiness include purpose and disruption. Is your idea causing people to stop what they’re doing, pay attention and engage in your brand? Or does your marketing and brand help Millennials feel better about themselves at the end of the day?

Can you spot the next BILLION DOLLAR idea?
Brands can’t ignore Millennial consumers any longer. Marketing is about relationships, and brands that want to be successful in the future need to spend serious time engaging this generation. These marketing efforts can no longer be a one-off scheme akin to a one-night stand. They need to develop into lifelong relationships.
Millennials will impact companies’ bottom lines unlike any generation before. Already, Millennials are estimated to have $1.3 trillion in spending power, which is 21 percent of the current consumer discretionary spending. This number will only increase as the cohort matures and fully enters the workforce.
Millennials want to be a part of your brand. They demand to know why you do what you do. They demand authenticity and transparency. When you make Millennial consumers feel good about themselves, they want to participate and share that excitement with their social networks — both online and offline.
So, the question is whether you can spot the next billion dollar idea?
Jeff Fromm is Executive Vice President of BARKLEY & Co-Author of Marketing To Millennials

SOURCE:
From, J. (2013). "Why the old definition of Brand Value has died." TIME. Retrieved from: http://www.psfk.com/2013/06/brand-value-new-definition.html 

How P&G, Ford and Wendy's Are Redefining Value...?

Querido lector:

Recibe un afectuoso saludo. 

Te anexo un artículo que ilustra cómo se están redefiniendo las propuestas de valor en varias categorías…tema muy interesante ante la falta de credibilidad que se ha dado en muchos mercados en donde varios jugadores basan sus propuestas de valor/promesas en base a los precios más bajos. Un reciente estudio determinó (en USA) que un 18% de compradores B2B y B2C buscan siempre el precio más bajo. Son totalmente infieles, descritos como tacaños, muy exigentes y en restaurantes dejan propinas muy bajas, y no muy amables con el personal. La recomendación es enfocarse en el otro mercado: 82% que busca una ecuación de valor que basada en 5 motivadores:

1.Un 52% lo hace por el rol e influencia de representantes y empleados de las empresas donde compran, incluyendo portavoz y /o celebridades.
 ..que ahora son considerados embajadores de marca, a quienes hay que dejarles muy claro cómo comportarse en público apoyando la marca y evitando la competencia. Los clientes buscan integridad, capacidad de juicio y respuesta y simpatía y trato.Si sienten que los toman como un número o indiferentemente hasta un 70% migrará y no estarán dispuestos a participar en estudios de mercado que revelen sus razones.
2. Imagen de la organización (15%)
Aspectos de orden, limpieza, buen señalamiento y organización. Adicionalmente les motivan aquellas marcas o instituciones involucradas en el apoyo a la comunidad.
3. Percepción de calidad/beneficios a la medida (13%): Qué voy a obtener particularmente YO.
4. Conveniencia (12%)
Ante las presiones por hacer más con menos tiempo disponible buscan facilidad de acceso a la marca, tanto en sus páginas web como en el lugar y/o forma donde la comprarán. El servicio post venta viene acompañando ésta variable.
5.) Precio (8%).
Dentro de éste grupo (el 82% del total del mercado USA) el precio es muy importante después de haber recibido alguno de los otros motivadores citados.

Veamos ahora el artículo que acaba de publicarse en la portada de Advertising Age de Abril 27.


Breve resumen y comentarios:

Sin duda algo parecido sucede en México, un mercado con mucha sensibilidad al precio pero que aprecia altamente los servicios, la calidad,trato; temas que muchas marcas están pasando por alto. La presión que se ha tenido en productos de consumo masivo, autoservicios, restaurantes les tiene encajonado en un discurso que no ha cambiado desde que tenemos crisis.  En USA los grandes marcas están haciendo una transición de  percepción de valor asociada con precios muy bajos hacia una de mayor orientada a beneficios, re-diseños e inclusive implementaciones tecnológicas que se reflejen en una mejora en la calidad de vida de sus clientes…dejando como un elemento fijo o valor entendido un precio altamente competitivo. Gran reto para efectos de competitividad , rapidez y eficiencia en la comunicación para que el mercado  se entere pronto.

Aprendizaje:
Hay una nueva tendencia en las propuestas de valor donde se están enfatizando mejoras en calidad, empaque o ventajas diferenciales relevantes mñas que los precios más bajos…que todos tienen.

Marcas líderes como Tide cambiaron el concepto de empaque para que el consumidor ya no pasara por la incomodidad de tener que hacer medidas y se generara algo de ¨batidero¨. Lo interesante es que en una anuncio una pareja explica cómo había adoptado la marca propia de una cadena de súpers…y volvió a Tide por su nueva propuesta. (Tide-Pods). 

Greek yogurt mejoró su calidad y el mercado lo percibió de mayor valor al ¨mejorar sus vidas¨

Otros clientes  prefieren tomar un café en casa, percibido como marca de lujo refleja una mayor percepción de valor y sentido de conveniencia que comprar o asistir e Starubucks.

Ford hace una transición de su propuesta de valor basada en precio ahora integrando tecnología, igual que las marcas premium.

Las franquicias de comida rápida han intentado asociar sus propuestas de valor con paquetes mucho muy baratos y han afectado seriamente sus utilidades..y las de sus franquiciatarios. Wendy´s ahora proclama: Queremos que te guste lo que gastas y disfrutes lo que comes…no necesariamente al mejor precio. Hace sentido.

Hace sentido. Será un reflejo de una recuperación económica o una mercado menos dependiente en precios?

Best,

Rubén

...And If You Want to Grow, You Should, Too

By:

Maureen Morrison Bio

Ever since McDonald's started serving up 59¢ hamburgers and supermarkets launched private-label lines, value has come to mean one thing -- cheap. But a new realization is sinking in among marketers: It can't stay that way if brands are going to survive the dodgiest economic-recovery narrative this side of Lindsay Lohan.

The Value Brands: Wendy's, Tide Pods, Chobani, Keurig's K-Cups

America's top marketers, from Procter & Gamble to McDonald's and Ford Motor Co., are trying -- with varying degrees of success -- to shift consumers' perception of value from a product that's bargain-priced to one that's convenient, efficacious or high-quality enough to command a premium price.

Brands can no longer bide their time, fending off store-brand options while waiting and hoping for consumers' wallets to fatten. About 40% of the U.S. population is still downtrodden, concerned or otherwise worried about their financial futures, according to IRI research.

In addition to convincing consumers, brands may need to perform an even tougher trick: redefining their own definition of value to one that's additive. When not reduced to the question of price, value speaks directly to what benefits a product or service adds to a customer's life. Some smart brands get this and are using packaging, design, sourcing strategies and technologies to entice consumers to get them to open their wallet a bit more, even in these tough times.

"Marketers have clearly contributed to how consumers perceive value," said Kevin Keller, professor of marketing at Dartmouth College's Tuck School of Business. He noted that as consumers fall back on price equaling value, marketers may need to reframe the conversation to center on cost benefits.
What's sure to be the classic example of a recessionary innovation that gets consumers to pay more, not less, is P&G's Tide Pods. The repackaging of its detergent into one-pack-per-load pellets is a clear boon to the consumer because it eliminates messy measuring. For P&G, it's been a breakout hit that rocketed to $500 million in U.S. sales in only about a year, according IRI figures. The bundle of individual laundry detergent packages comes at a significant premium to liquid Tide -- $18.99 for a 66-load container of Pods on Walgreens.com.

Moreover, Tide Pods is consistent with the Tide brand's overall premium positioning. Consider a recent commercial for Tide, a brand that retails about 35% higher on Walmart.com than cheaper offerings such as Arm & Hammer. The spot, from Saatchi & Saatchi, shows parents of triplets folding laundry. Says the mom: "We switched to the bargain brand. But I found myself using three times more than you're supposed to and still the clothes weren't as clean." Her husband adds, "So we're back to Tide." The voice-over then says, "Just one dose of Tide Original Liquid helps remove food stains better than an entire 40-load bottle of the leading liquid bargain brand."
You're probably thinking that that's all well and good for ad copy, but in reality recessionary consumers are too price-sensitive for this sort of marketing approach. You'd be right -- and wrong.
An article in the February issue of the Journal of Marketing Research looked at 24 quarters of pricing data for 19 grocery categories and found that on average, price sensitivity is countercyclical to the economy, which is to say that it increases as the GDP declines. No surprise there. What is interesting is that countercyclicality isn't true across grocery categories. The degree of sensitivity, the authors found, varies significantly and depends on whether you're talking about peanut butter, spaghetti sauce or toilet tissue.

What explains this variance? The researchers conclude that share of wallet is one of the likely determining factors. "Prices should fall primarily in those categories that are an important component of consumer budgets," they wrote. "In contrast, in other categories, raising prices may even be optimal."

While providing some research-based air cover for price increases, the authors don't delve into how brands might ask for more while not losing consumers. Tide, with its Pods product, has done it through convenience and packaging acumen.

Then there's quality. Greek yogurt is on average about 40¢ more than standard yogurt, yet it's the only growth driver in the category, according to Nielsen. Despite the higher cost, consumers flocked to it because they appreciated the texture and higher levels of protein. In this case, "value didn't mean cheap, consumers felt it made their lives better," said Larry Levin, exec VP-consumer insights at IRI.
Mr. Levin said that for these consumers, "perceptual luxury" is key. Products like Keurig's K-Cups aren't as cheap as a pound of coffee, but they're not as expensive as a cup of coffee at Starbucks. Consumers see them as a trade-up and a convenience, but still a better deal than coffee from a coffeehouse. "It's not about something being cheap -- it's about better experiences at home," said Mr. Levin.

Ford Motor Co. is taking a different tack: technology. In 2011, Ford found that adding Sync, its hands-free communications system that lets drivers control music, make calls and perform other voice-enabled activities, was contributing to average price-per-transaction increases of more than $4,000. Ford has said more recently that over 50% of customers cite the tech system as a reason for purchase. The lesson: in tough times, consumers are willing to pay for added value.
In no category is the word "value" more bandied about than in fast food, in which more often than not it's become synonymous with rock-bottom prices. A survey of McDonald's franchisees by Janney analyst Mark Kalinowski in advance of the company's first-quarter earnings last week (global same-store sales fell 1%) found several riled by the company pushing discounting, which is eating away profits for franchisees. Specifically, some were frustrated that the chain urged them to introduce McWrap -- intended to be premium priced -- for $1. The problem is that it costs $1.70 just for ingredients, a person familiar with the company told Ad Age. (McDonald's said the figure is proprietary and declined to comment further.)

"It's one or the other, the Dollar Menu or other discounting. We can't continue to do both," said a franchisee in the survey. "Every marketing plan focuses on discounting and giveaways," commented another.

Contrast that with the approach Wendy's is taking with its Right Price, Right Size menu. "Everyone has a value menu these days. But at Wendy's, value is more than a low price," reads a recent Wendy's magazine ad. "That's why our Right Price, Right Size lineup is loaded with over a dozen choices all made with the same quality ingredients as the rest of our menu. Because we want you to like what you spend and love what you eat."

Wendy's new menu marketing promotes low prices that range from 99¢ to $1.99.
"The fact that you have choice is a greater value than just price," said Wendy's spokesman Denny Lynch.

Retrieved from AdvertisingAge.com
http://adage.com/article/news/p-g-ford-wendy-s-redefining/241006/ 

In the Oscar mood: Dissecting the $1.6 Million Commercials

How Marketers Used TV's Second-Most-Expensive Ad Vehicle

By:

Ad Age Staff Bio
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Published: February 24, 2013

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The Oscars are the second most-expensive TV advertising opportunity with the price of a 30-second spot going for between $1.6 million to $1.8 million. Here, we take a look at what some major marketers did with their time during the broadcast.
We detailed on Friday how a couple major marketers, JC Penney and Samsung, are placing big bets on the Oscars. JC Penney used the show to kick off an ambitious ad campaign called "Yours Truly" with an anthem, "Dear Dreamers."
Interestingly, it was done by an agency called The Bureau, which used to work with Apple and is now exclusively working for JC Penney. (The retailer also works with Peterson Milla Hooks, Brand Advisors and Mother).
Samsung aired a series of ads that built on one another, including one that starred Tim Burton.
Hyundai aired a raft of ads -- seven spots in total -- including a few ads repurposed from the Super Bowl. Hyundai has been the exclusive auto sponsor of the Oscars for five years.* Luckily, spokesman Jeff Bridges was not nominated for an award this year like he was in 2010 for "Crazy Heart," which forced the automaker to scramble for new voice-over artists to comply with the show's commercial rules.
McDonald's aired "Lucky Penny," a charming spot starring a little boy whose very bad day turns very good when his mom gets a flat tire, right outside a McDonalds. The fast feeder has appeared in every Oscars since 1992, according to Kantar Media.
Diet Coke's first Oscars ad, "Credits," was part of its continuing "Stay Extraordinary" campaign. The ad featured a storyline meant to be a tribute to the "extraordinary" people who keep us entertained, both on and off screen. The spot was set to the tune of Robert Miller's "Hooray for Hollywood" and was handled by Wieden & Kennedy.
A second Oscar spot from the brand was imported from the U.K. "Gardener" is a nod to the memorable hunk spot, which aired in the mid-1990s. The spot originally aired in the U.K. and features model Andrew Cooper. It was created by BETC London.
Grey Poupon also harkened back, revisiting the classic ads it once aired.
Apple debuted new iPad spots, including one highlighting the device's filming, video-editing and movie watching capabilities.
Chanel reprised the Brad Pitt oddity that made waves earlier this summer. It was notable not only because it was strange, but it also inspired a raft of parodies, which fueled it to viral success.
Royal Caribbean aired several ads during and around the broadcast to promote Kristen Chenoweth as the "godmother" of its Quantum of the Seas cruise ship. The beginning of the ad could unnerve anyone with rival Carnival Cruise's recent "cruise from hell" crisis. The voice-over begins: "What started as another day in paradise…" leading viewers to wonder where the heck it was going.
Coca-Cola, meanwhile, aired one of its ads (one that originally aired during an "American Idol" broadcast) that addresses obesity to to the big show, a strategy that has elicited mixed opinion.
Chobani was a first-time Oscar advertiser with "Real is Original."
Coldwell Banker follows its Grammys buy with an Oscars ad, part of a big push by real-estate advertisers as the housing market shows signs of coming back.
What did you think of the night's advertising performance?

Source:
AdAge.com