Tag: competitive strategy

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Brand Building Brand Differentiation Brand Positioning Brand Promise Brand Strategy Brand Strategy for Start-Ups Branding Psychology Consumer Psychology Marketing Psychology

The Psychology of Obstacles in Brand Marketing

The previous post, Branding Psychology Insights: How Consumer’s REALLY View Your Brand, discussed three important ideas:

  • Your consumers are concerned ONLY about their end result
  • Your product/service is your consumer’s bridge/obstacle to the end result they desire
  • Your brand, the face & name of your product/service, must be synonymous with that end result

We all face obstacles. Obstacles are a part of life. Obstacles contribute to our growth, more than most of us are aware of. And just for clarification – an obstacle, is anything that hinders the progress to a desired goal.

The thing with obstacles, is that they don’t just show up as one big dragon we have to slay. Sometimes there are several dragons we need to get past. Sometimes there are obstacles within obstacles. That’s when we’re truly tested on how MUCH we want our end result. Your consumer goes through these same obstacles on their journey to their end result.

When they choose your brand, your product/service, they are relying on you to get them there in the best way possible (whether ‘best’ means fastest, cheapest, easiest, safest, etc.). That’s when they shift from being a prospect, to being a customer.

Keep in mind: the ‘obstacles along the journey’ concept really only comes into play when the consumer doesn’t have the ability to get their desired end result ‘instantly’. Where ‘time & effort’ are factors. Of course, some products/services provide their consumer with instant satisfaction – food items are an example. If someone’s thirsty, they buy a water bottle and drink it. Simple. However, if you’re selling a course where there’s a learning process, or if you’re providing a service where in the long-term your customer will be able to improve their financial health, their physical health, or their relationships, these things take time and effort. 

These are also the things that are part of the most fundamental human needs. In some way or another, we’re all looking to have these 3 needs met, and constantly improved. These end results will most likely require some degree of time and effort. In other words, they hinder progress.

Question for thought:

After choosing your brand, after becoming your customer, what are ALL the possible obstacles your customer will face on the way to their desired end result? 

And how are you helping them get past all those barriers to their goal?

There are two kinds of obstacles on that journey:

1)      Expected Obstacles

2)      New Obstacles

Expected Obstacles

These are the obstacles that are within the consumer’s awareness.

These are the obstacles that the consumer KNOWS about – the ones that they will CREATE for THEMSELVES. These are personal obstacles. Expected obstacles can be: resisting temptation, sacrificing something, not procrastinating, paying an annual or monthly subscription fee, etc.

staircase

If your goal is to get to the top of the staircase, if that’s your desired end result, you know your obstacles are the stair steps. They are within your sight. You know even before beginning that journey that you’re going to have to keep climbing, one step after another.

The interesting thing about obstacles is that they sometimes increase our sense of commitment to a particular goal. The more dragons we slay, the more invested we become in rescuing the princess, or getting to that gold, or whatever the end result we want is.

Every step on the staircase gets easier to conquer… and as you climb higher you become more invested in getting to the top. Once you’ve climbed halfway or above halfway on the staircase, it’s unlikely you’re going to turn back. The negative emotional impact of turning around and quitting keeps increasing. Eventually, we much rather suffer our way to the end result, than suffer the sense of defeat after quitting.

Once we get past the halfway mark, it’s almost intrinsically ‘automatic’ to keep going… meaning that our motivation automatically sprouts from within. If you’re on a diet and you see a piece of chocolate cake and you resist it, conquering that obstacle automatically strengthens your determination for your end result. Before even beginning the diet, resisting these temptations were obvious obstacles that you were already mentally prepared for.

If you’re a student studying for a particular exam and you tell your friends that you’ll meet them later, a huge obstacle for any student, your determination to succeed on the exam will automatically rise. The best part is, the next time these obstacles show up, it’s EASIER to get past them again because you’ve already done it once.

Key Insight: You need to get your customer past that halfway mark at the VERY LEAST, so you diminish the majority of chances of losing your customer in the process.

If you want to be exceptional however, a market leader, you won’t just get your customer to the halfway mark and move on to something else…. you’ll take your consumer to the top. Your consumer already has obstacles that they EXPECT to have to push through, before starting the journey.

Do you know what those expected obstacles are for your consumer? Can you identify them?

New Obstacles

These are obstacles that your consumer doesn’t know about. These are the obstacles your consumer is hoping they won’t have to face by trusting your brand, your product, and your service. News obstacles are usually the limitations in your product or service. These are company flaws that businesses usually DON’T advertise.

Most people climb with their eyes on the end result (the top of the staircase). They don’t look down. All of a sudden, there may be new obstacles to get past – the toys on the stairs, the spill that hasn’t been cleaned up, etc. The new obstacles are scary. They’re unexpected. The unknown is always a fear for humans.

If your customer has put their trust in your brand by agreeing to take your path to their desired end result, the last thing they want is that trust to be broken. All they can do is take your word and hope that there won’t be any new obstacles.

It’s not the expected obstacles that are usually the deal-breakers for people to get on the journey to getting what they want, it’s the new, unknown obstacles. Because when a new obstacle shows up… that’s when things get interesting…

maze

An interesting paper in the Journal of Personality and Social Psychology demonstrates how when we encounter a new obstacle, we react to it by thinking about the problem on a more global scale.

Our awareness expands.

Here’s an experiment to put this in perspective:

There was a difficult maze given to participants in a study mentioned in this paper. A computer tracked the eye movements of these participants. When some participants hit a ‘block’ in the maze where their path to the end goal was interrupted, they responded by becoming AWARE of the entire maze.

Their focus shifted from that one path… to other potential paths to their destination. They began looking for other options and alternatives. Those who didn’t experience any obstacle, happily kept going. It’s natural for us humans, when we hit a barrier, to think about problems more globally.

What does this tell us?

If your consumer is on a journey to their end destination, that journey is already an obstacle.  And usually at the beginning of every maze, the consumer has several paths to choose from. If I want to search for something on the internet, I have the option of choosing to use Yahoo!, Google, Bing, etc. I’ll choose the brand I trust the most, that has always delivered, that I know will give me the least new obstacles in my search.

That decision process on which path to choose, is the definition of marketing.

Because that’s when your company comes along, and through your exceptional brand positioning skills and marketing strategies (that you learned at Brand Marketing Psychology), you convince your prospect to choose your path to their end result… and become your customer. You convince them to choose your brand, your product/service, to get them to their end result.

A question for every brand/business owner to ask themselves is:

  • How clear and FREE OF OBSTACLES is my consumer’s path to their destination… when they choose my brand?
  • What barriers will they hit?
  • What flaws does my product/service have that will make my consumer stop and question their progress?
  • Is there a point they will hit on our path, where their awareness will expand and they will begin considering other options?

If you promised them that they’ll get to their end result in 30 days and in 30 days they’re only halfway there, it’s only natural that their awareness will broaden. They will search out alternatives – your competitors.

How do you retain those consumers?

Sometimes it’s not your product/services flaw. Sometimes the customer might not have used your product/service in the most efficient way. So you might think it’s their issue if they didn’t use it properly… But who is the consumer going to blame? They will never blame themselves.

It’s ALWAYS the company’s responsibility to retain the customer. When they began the journey, they didn’t expect to face these barriers, otherwise they wouldn’t have started. These are new obstacles.

Your Brand Marketing Strategy:

Remember that there are always obstacles within obstacles. The obstacles that the consumer will face on their journey to their end destination, will either be the obstacles that are expected and/or the obstacles that are new. In both cases, it’s usually your company’s fault in the mind of the consumer.

And that’s a GOOD THING. Why? Because now you know how your consumer is going to react, how they think, you know their psychology… and now you can act strategically.

The most strategic way to deal with this is to tackle both potential obstacles. If it’s your fault, if your product/service has flaws, IMPROVE IT. Keep getting feedback and improving it. If your consumer returns your product, ask why. If the consumer is having to conquer their own personal obstacles, HELP THEM through it. Hold their hand and help them cross that bridge.

Are they procrastinating? Provide a schedule – charge them a small fee for it, or give it for free as a bonus. Whatever you do, establish that strategic relationship, where they feel you’re looking out for their best interest, but at the same time, you’re ensuring their focus remains with your brand, your company. You’re ensuring that they don’t even bother looking at other competitors because their awareness hasn’t grown in that global sense because you catch them at a point before it can get to that level.

Get them to their destination no matter what it takes. That’s when businesses thrive through recommendations and especially because consumers become loyal and are open to any other follow-up product/service you have to offer.

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Brand Building Brand Differentiation Brand Management Brand Positioning Brand Promise Brand Strategy Brand Strategy for Start-Ups Branding Psychology Consumer Psychology Marketing Psychology

Brand Revitalization: Leveraging Psychology To Shift Consumer Demand (CASE STUDY: Kellogg’s Special K)

images (3)

The value of your brand is based on how much your customer wants you. Brand equity relies on customer demand. If your brand won’t care about your consumer, your consumer won’t care about your brand. If your consumer doesn’t care about your brand, if your product lacks appeal to the consumer, your brand will fail in shifting demand.

Apple captures more than 3 times the market share of the number two company in the MP3 player category – and this is if the price and other features are completely equal. Even if Apple doubled their price, they would still have market share equal to its competitor brands! That is the power of building brand equity. That is the power of understanding your consumers to such a degree, that your brand is like a magnet that pulls consumer demand towards you.

Long-established or “mature” brands often find themselves asking brand oriented questions when sales are lagging and competitors are thriving. They ask questions like:

  • “Should we re-brand?”
  • “Are our brand’s lagging because of ineffective marketing tactics?”
  • “Are we not advertising enough?”

In reality, these are questions that revolve around creating customer awareness. Customer awareness is already there. Customers already know of your brand’s existence if your brand is a long-established brand.

Instead, brand managers need to have a demand oriented perspective on the purpose of a brand. The focus needs to be on the end goal – the consumer. It’s the message that your brand is sending out that doesn’t speak to your customer’s priorities. It could also be that your product or service is flawed and is not creating recurring customers. Either way, your resources are much better spent on understanding what the customer wants, not on more advertising and on more marketing tactics.

When creating the strategy to build brand equity and shift consumer demand, you are essentially focusing on building your brand’s competitive advantage. Logically, if you’re shifting consumer demand to your brand, you’re also shifting consumer demand away from your competitor’s brand.

The Key: Develop Competitive Advantage (through demand-oriented perspective) –> Shift Consumer Demand –> Build Brand Equity

The Question: So how can you specifically develop a strong competitive advantage?

Here is how Kellogg’s Special K did it…

CASE STUDY: Kellogg’s Special K

Special K

Special K is a cereal that was introduced to the US in the 1950’s. If you’re familiar with Special K now, you’re well aware of its strong association with weight loss. You might have seen the multi-level marketing campaigns Kellogg’s has launched with this brand, especially through social media. Special K was connected with the weight loss idea from the 80’s, straight through to all of the 90’s. Back then, it was just the one flavor of cereal described as being ‘bland’. The taste was bland. The brand was bland. There was no innovation. Competitors wouldn’t look twice in fear at Special K. This is because all throughout the 80’s and 90’s, no one at Special K had a DEMAND-ORIENTED perspective. They didn’t look to understand their consumer as much as they should have.

Towards the end of the 90’s, a brilliant mind at Special K began understanding consumer priorities. They began constantly acquiring feedback to gage if consumers are getting the right experiences with the product. It was only when Special K began focusing on the consumer and asking questions like:

  • Do our consumer believe what we say about weight loss?
  • How should we deliver our promise to our consumers?
  • What makes consumer’s think about our brand?
  • What benefit are our consumer’s seeking?

This consumer-oriented perspective led to the initial process of creating a competitive advantage. This led to the process of Special K beginning to connect more powerfully with their specific target market (women aged 25-45).

Successful brands share a similar focus when it comes to developing strong competitive advantages – that focus is on TWO extremely important elements:

Vision and Innovation

Everything begins with a compelling vision. Your vision is your heritage. It’s your purpose, your identity, your central idea. New brands must develop their vision before anything else. Long-established brands have their vision in place. For long-established, mature brands however, it often becomes difficult to adapt and change with the market because the brand is so rooted in what has been ‘working’, that sticking to tradition is perceived to be the best way to go. Long-established brands feel that they need to choose between ‘change’ and ‘tradition’. The answer however, is to have a BALANCE of the two; a balance of tradition and change, in other words, of vision and innovation. In around 2000, when Special K disrupted the cereal market, I believe they shifted their focus and began fostering this balance.

They zoomed in on their vision: “to empower women to take control and maintain a healthy weight”, and leveraged it to create a measurable, specific, and direct PROMISE that resonated with the consumer.

The promise: Eat Special K two times a day for two weeks, and lose up to six pounds.

They understood that the consumer was looking for a simple, easy, solution to their dieting needs. They understood that the consumer also wanted to feel like they overcame a challenge on their journey to success. Thus, they framed their brand story as a ‘2-week challenge’.

Special K 2 Week Challenge

Finally, after years of remaining stagnant in the cereal market, Special K began aligning its vision with the consumer, and the Special K flight had taken off and was at an altitude higher than its competitors. Now it was all about maintaining that altitude and rising higher. Now it was all about INNOVATION.

Innovation is what keeps brands and businesses alive and thriving in a highly competitive environment. If your brand is defined as an innovator, it is pretty much understood that you brand has been around long enough to develop strong core values that define it, values that stood the test of time, values that have roots in a solid VISION.

Special K’s innovation started with Berry Special K – which allowed Special K to dive into the ‘good-tasting’ cereal market. Since then, we have seen Special K protein bars, shakes, water mixes, cereal bars, crackers, chips, fruit crisps, etc.

Innovation at Special KSpecial K recently:

Aug 2013 – According to market research firm Euromonitor, cold cereal sales in the US have increased only 6 percent. However, Special K has been a standout for Kellogg, with the brand’s market share increasing to 5 percent, up from approximately 3 percent a decade ago.

Aligning your vision with your consumer shifts your consumer’s demand because your brand becomes highly valued and relevant to your consumer. Aligning your innovation with your consumer shifts your consumer’s demand because your brand remains highly valued and relevant to your consumer.

The marketing team at Special K realized this and today, Special K continues to be a leader in its market.

Special K Variety

 

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Advertising Brand Differentiation Brand Positioning Brand Strategy Branding Psychology Consumer Psychology Emotional Branding Marketing Psychology

Luxury Branding: Psychology of the Luxury Driven Consumer (Case Study: Coach)

A friend of mine just received this in the mail after she went shopping and bought a handbag from a Coach store:

Coach Note

If you’re unable to read it – here’s what it says:

“Thank you for shopping with me at Coach today. It was my great pleasure to help you select that beautiful bag. As a little something extra, I’ve included a $50.00 Appreciation card for you, which you can use toward any item in the store. The card expires on March 1st 2014.”

Did the employee actually send this to my friend from the goodness of his heart? Or is there something else going on here?

After some research, I found out that Coach is in the process of “redefining” its brand in North America. Coach was the leader in the North American handbag market. However, recently before the recession, brands like Michael Kors, Tory Burch, and Ralph Lauren Corp moved in and grasped margins exceeding 50 percent.

Coach then, came out with the new ‘Lifestyle Strategy’. But more on that later.

First, what is it that makes a luxury brand desirable?

In the world of luxury brand marketing, the main factor we tend to look at of our consumers is their income and their assets. While this tells us their ability to purchase the luxury product or service, we know nothing about their thought process and their motivations to spend their wealth on luxury products.

Luxury brand marketing is considerably different from traditional marketing where you would just consider the 4 P’s. Most marketers believe they understand the elements that make up the desirability of a luxury brand.

Common perceptions are:

  • High quality
  • High price
  • Exclusivity
  • Scarcity
  • Etc…

Although necessary, these are features that marketers and businesses would rely upon in the past. While these are all common elements of luxury brands, there is a deeper side to luxury branding.

The consumer’s of today are smarter spenders, more selective, more opinionated, and judge based on other elements as well. If you understand the psychology of the consumer, you can cater your resources to focus on bringing the consumer towards you, as opposed to spending your resources on sharpening the quality, price, exclusivity, scarcity, etc.. and HOPING your consumer moves towards you on their own. There is a difference between waiting for your consumer and inviting the consumer. When it comes to the luxury driven consumer, effective strategy entails inviting them and calling them to your brand.

Engage Your Consumer with Invitation

The wealthy are used to being invited. It’s attesting to their status.

We know the importance of a brand story. For the luxury conscious consumer, the story plays a huge role in engaging the consumer. Through engaging them, you INVITE them to join your brand’s journey. Luxury brands have a rich history, a uniqueness, a legendary story which contributes to the brand’s personality. Joining that brand’s community is enticing. Joining Coco Chanel when she started her business in 1913 to becoming a revolutionary couturier, is enticing. Joining Tom Ford in his journey from being a common man, from struggling for achievement, to triumphing in his masculine destiny, is enticing. Both Chanel and Tom Ford consistently leverage its brand personality and uniqueness in their marketing strategies. Usually with the help of celebrities.

tom ford

The Fourth P

One of the few rational arguments that would prevent consumers from making a purchase would be the price – sometimes for some consumers, price can precede everything, no matter how much you position your brand strategically. However, although price communicates perceived value of the product, luxury brands cater to a consumer that can buy almost any material thing that he or she wants. The product or service itself, then becomes secondary.Therefore, the main rational argument that could be a barrier in your consumer purchasing from you, is gone. What’s important now is how you position your product to appeal to the emotional brain of your consumer. Focus your resources on your emotional strategy, especially when marketing luxury brands. Burberry consumers want to feel ‘authenticity’ and ‘timelessness’. Tom Ford consumers want to feel ‘triumphant’. Tiffany consumers want to feel ‘love’.

Struggle Is Part of A Brand’s Journey

So back to Coach and their new ‘Lifestyle Strategy’.

Do you think Coach is on the right path to regaining its market share?

Here is an excerpt from an article that speaks to their new strategy:

 “Coach’s new direction is rooted in the desire to speak to the consumer from an “emotional way” rather than a “functional one,” according to Reed Krakoff, the brand’s president and executive creative director, who informs the design of the collection and store layout.”

“Instead of designing accessories to fill a need, we’re thinking more about the woman, who she is, where she goes, what is her life like and how does it feel, to move Coach from…where you think of a Coach bag, to now when you think of Coach, you will think of a woman or a man and you think of their lifestyle,” Krakoff said. “You think of their lifestyle and you think of all aspects of that sense of style and that sense of how they live their life.”

Frankfort added: “By doing this, and impacting our windows, our store environments, Internet, marketing, all consumer-facing elements, it’s going to have a profound impact on consumers’ perceptions of Coach because it’s unexpected.”

Click here for the full article.

A marketing strategy as simple as mailing the consumer with a $50.00 gift card and a personal note is extremely effective because:

  • My friend is now guaranteed and motivated to visit the Coach store again and spend more of her own money because $50 probably doesn’t even make up 25% the cost of majority of products in the store
  • The note ENGAGES my friend on a very personal level; the note is hand-written, it mentions the salesperson and her experience together, it has a ‘gift’ which is a HUGE sign of caring. This entire gesture is oozing with the message that COACH cares about YOU.
  • The card has an expiry date which creates a sense of urgency
  • It’s packaging speaks to the brand’s personality
  • The gesture hits the consumer on an emotional level – gives them a feeling of “special-ness” and exclusivity

And lastly…

  • What else comes in the mail directly to someone in an envelope, in a card-like format? How about an invitation?

By implementing this simple, sophisticated  marketing strategy, it’s pretty evident that Coach understands their luxury-conscious consumer.

Struggle is a part of every brand’s journey. It’s how you adapt and differentiate yourself that makes the difference. More importantly, and especially when it comes to luxury branding, it’s when you think of your consumer, their thoughts, their values, their psychology, that you can create the most effective strategies to rise to market leadership.

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Brand Building Brand Differentiation Brand Management Brand Positioning Brand Promise Brand Strategy Brand Strategy for Start-Ups Branding Psychology Consumer Psychology Marketing Psychology

How to Evoke Consumer Motivation Through Strategic Delivery of the Brand Story and Promise

White clock with words Time to Buy on its face

“Marketers sell the drill. Consumers buy the hole.”

No matter how great a product is, it will never sell itself. People never buy the product itself – nor do they buy the brand. People buy the benefits and solutions that the product or brand will provide. Their motivation to buy comes primarily from the expected benefits and solutions.

Throughout my marketing consulting experience, there have been too many incidences where I have seen companies with well-established, iconic brands, forget that today’s consumers are generally well-informed and won’t give in to buying a common product with a recognizable name attached to it. Most business owners still think that they’re just selling a product or service.  When business owners attempt to sell just products or services, they focus on portraying facts and informing.

Facts and information rarely motivate us. People aren’t prospects when they’re not motivated. Especially with the social media boom, where there is constant communication between brands and their consumers, people are looking for brands that embody human traits and are more receptive to their emotions.

What do I mean when I say that people don’t want to buy products, services, and brands? When businesses and marketers try to sell products, services, and brands, they focus on selling the features and the results, not the benefits and the solution.

When you tell me your new ab workout product will help me get six-pack abs, that’s a fantastic result… just what I want – except that’s what every other ab workout product is telling me. What differentiates you? The new instructional online video feature that comes with your product? That’s great, I’ll think about it. The result you provided, nor the feature you told me, hit me on an emotional level. I don’t feel an internal motivation to buy your product. If my logical mind convinces me, I MIGHT buy it. Now how would a strategic brand marketer sell an ab workout product? By emphasizing the SOLUTION and the BENEFITS. The solution that I will FEEL the enjoyment and confidence from being more attractive as a result of having the six packs abs. The solution that I will be relieved from feeling unattractive. The solution that I will feel healthier and more energetic. The benefit that by having six-pack abs, I will attract more girls, impress my friends, and feel worthy in my own eyes.

As a consumer, when I hear the benefits and solutions, when you make me feel the solution of buying your brand or product, you’re not longer selling me something, you’re making a promise to me. Now I’m emotionally connected to your brand and product, now I can hold you accountable, and holding you accountable gives me a sense of security in buying from you.

So how can brand marketers strategically and successfully portray the benefits and solutions of their brands to motivate their consumers? As consumers, our motivation comes from the brand promise, which conveys the satisfaction and the avoidance of our pain that we’ll feel when buying a particular brand or product. And one of the major ways that brand promise is communicated, is through the brand story.

The Brand Story

Essentially, what people pay for when they buy your brand, is the story.  Brands that are successful in today’s world, are those that are embodying human characteristics. Just as how every human has a story behind them, a story that makes them who they are and who they are going to be, a brand is no different.

When we first meet someone who we’re genuinely interested in connecting with, what is the main thing that we’re trying to learn about them? When we ask each other ‘what do you do’ or ‘where are you from’ or ‘what got you into…’ or ‘tell me about…’, what are we trying to find out? We’re trying to figure out their story– because that helps us evaluate whether we can connect with them. And on a more superficial level, or even when company’s interview and hire, understanding people’s story tells us if that individual can be of value to us now or in the future.

Understanding people’s story can tell us, on a deeper level, how connecting with them will move us towards a solution or benefit that we want. In the same way, understanding your brand’s story gives consumers a sense of who your brand is, what you value, what they can expect from your brand in the future, and how your brand will help them reach the solutions and benefits they desire. If done right, you create a connection with the consumer, which is what successful brand strategy is all about.

The Life of the Party

We’ve all noticed that those individuals who seem to be the most interesting, most entertaining, most engaging, are usually those that are great storytellers. Your brand should be no different. The successful brand engages, entertains, intrigues, and connects with its consumer through storytelling. The successful brand is the “life of the party”.

If you think of your product’s category as a never-ending party, all brands in that category are essentially competing for attention. They’re competing to be the life of the party. The life of the party is the vortex that draws everything towards it. The life of the party connects with everyone – and the more it connects, the more it stands out to others.  Make your brand the life of the party!

When the brand story rings true for the consumer, it contributes to how they feel. This gives your brand authenticity, and it ignites engagement and strong emotion. This is where the motivation to purchase rises from. Ultimately, you shift your consumer’s demand… and your brand equity rises.

Lastly, remember that as a storyteller you’re also being held accountable for your promise. Sure great story tellers get hired. Sure great story tellers make a lot of connections. It’s clear that they have communicated their ‘promise’ successfully to a company where they got the job, or on a social psychological level, to their friends and connections. However, you will find that sometimes even the greatest of story tellers only deliver stories, nothing more. They don’t deliver on their promise. And at the end of it all, they fall faster than they escalated.

If your brand tells a story, makes a promise, connects emotionally with your consumer, but doesn’t deliver… your story becomes compromised and your brand plummets. Without delivery and evidence, your story is nothing but a fairy-tale.

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Brand Building Brand Differentiation Brand Management Brand Positioning Brand Strategy Brand Strategy for Start-Ups Branding Psychology Consumer Psychology

How to Leverage Pricing Psychology to Influence Consumer Buying Decisions

Understanding your consumer to build a strong marketing strategy is fundamentally about:

  1. Understanding the psychology behind how your consumers make use of their time and money
  2. Understanding the psychology of where your consumers focus their attention

The amount of aspects which influence someone’s choices are endless.  The more we understand them, the more we as marketers are capable of influencing their purchasing decisions. It doesn’t help that consumers are horrible at explaining their choices. So asking them is rather pointless. They often find it rather difficult to explain why they choose one option over another.

decision-making

Traditionally, marketers use discrete choice modelling, conjoint analysis, or concept test to deduce decision drivers. However, if we can understand key psychology principles on how the human mind works, we can employ creative strategies to build brand equity by influencing the consumer’s decision in favor of your brand.

If we know anything about consumer psychology, it’s that consumers generally make irrational decisions. The human mind is fascinatingly irrational. Humans rarely make choices in unconditional terms. Understanding this idea can hold great benefits for marketers in employing strategies in each of the four P’s of marketing – especially when it comes to PRICING strategy. Why particularly pricing? Because as consumers, we don’t have an internal value measure that tells us how much things are worth. Instead we focus on the comparative advantage of one thing over another and assess value accordingly.

We see this pricing strategy in effect on a regular basis when we constantly observe the fuel price. There was a point in Canada when $1.20/L was considered expensive. But for the past two weeks, when the price jumped to $1.30/L, the amount of drivers completely filling up their tanks decreased, and the amount of people draining their gas meter to its limit increased. Two weeks later, after the PERCEIVED over-priced gas ‘fell’ from $1.30 to $1.25/L, gas stations were swarming with cars. I was one of them. I filled up a full tank of gas and I actually felt good about it! I felt like I was actually saving money. Why does this happen? We don’t know how much the actual price of gas ‘should’ be, but we know that RELATIVE to what it was before, it’s cheaper now, therefore I’m getting more value and I’m saving money.

The same thing happens when people are out looking to buy a car and end up spending more than they intend to, simply because the more expensive car has a greater overall discount. You can save 25% by buying the more expensive car, or save 10% when you buy the cheaper one. The one people generally choose costs more, but consumer’s are prone to not look the other way when they see more value for their money. It’s very true that as consumers, we don’t always make choices that are in our best interest.

Consumers are increasingly developing a need to attain the feeling that they are intelligent shoppers, that they know how to get the most for their money, that they know value when they see it. This is the reason why over the past few years, companies such as Groupon, Livingsocial, and TeamBuy are becoming more popular. Getting a deal makes the consumer feel good. Marketers are using these services by offering deep discounts, primarily to encourage people to go ahead and try their spas, restaurants, etc. They’re hoping for repeat customers. There is no doubt that this strategy is effective, especially in a time of economic downturn where price-sensitivity is rising and people are craving new experiences for a reasonable price. However, brand equity can be seriously hurt in the long-term, if companies continually rely on employing price-promotion strategies and continuous discounts.

There are much better strategies to enhance the perceived value of your brand, without having to offer deep discounts. My favourite is by using a COMPARATIVE strategy.

Take a look at the following diagram:

relativity

 

The middle circle in this picture doesn’t appear to be staying the same size;  when the middle circle is placed in between smaller circles, it grows bigger. When it’s placed in between bigger circles, it seems smaller. In both positions, the middle circle is the same size. Our mind creates the illusion of its altering size because we look at it in comparison to what’s around it.

Humans are always comparing. We compare our friends, jobs, relationships, and especially our POSSESSIONS (our cars, homes, wines, cell phones, etc.) Most of these possessions are branded. And for most brand-conscious consumers, the brand they choose is a reflection of who they are; their status, their personality, etc. Thus after making comparisons, consumers always want to feel good about their possessions by knowing that they have the thing with the higher value because that reflects high value in their sense of self. So how can we as marketers, leverage the comparative nature of humans to reinforce higher value in the mind of our consumer?

An easy way is by creating the expectancy of a higher future price. Like in the example with the gas prices. I figured that gas prices will go back up in a few days, therefore most people and I were more than happy to fill up gas as soon as possible.

Another way is by creating STRATEGIC ALTERNATIVES. These alternatives are placed beside the intended sell to serve as a subtle influence. There are two essential methods to employing the strategic alternatives strategy. The first is by presenting an extremely unattractive alternative and the second is by presenting an incredibly high priced alternative.

Remember when Apple came out with the iPod Touch? This was their pricing strategy:

pricing strategy

  •  16GB for $229, 32GB for $299, and 64GB for $399
  •  The extra features are only available in the upgraded options (32GB & 64GB)

Which option would you choose? The majority of consumers would conclude that they attain the best value from the 32GB option. Some would buy the 16GB. Few would buy the 64GB.

The extra features on the upgrades makes the 16GB incredibly unattractive, especially when the next upgrade only has a $70 difference with double the storage capacity! The 64GB has no added features, but doubles the storage for $100 difference.

So the 16GB is unattractive and the 64GB is not ‘worth’ the value. This is the STRATEGIC ALTERNATIVE strategy in action. Which Ipod Touch do you think Apple was aiming to be its main sell?

Knowing these strategies can not only make you more strategic as a marketer, but more aware as a consumer.

Marketers should realize that coupons and discounts aren’t always the answer to establishing a certain value to influence consumer purchasing decisions. A lot of innovation and creativity goes into promotional, placement, and product strategy. Innovation in pricing strategy isn’t something that should be overlooked.Your brand can appeal to the mind of your consumer by understanding how their mind leads to the purchase decisions they make.

Understand your consumer’s psychology to build powerful, demand-shifting, and creative brand marketing strategies – that’s what Brand Marketing Psychology is all about.

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Brand Building Brand Differentiation Brand Management Brand Positioning Brand Strategy Branding Psychology Emotional Branding

Emotional Branding Psychology: Deep Decoding of the Brand-Consumer Relationship

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Life would be a lot easier for us brand marketers if consumers made their purchases on a logical basis. The average business owner often assumes that because humans are rational people, consumers make their buying decisions by weighing the pros and cons of each product. We assume that the physical properties and functional benefits which consists of and define a brand, are the most important factors for consumers when they make their selections. We assume that consumers view brands as ‘things’. For consumers, whether they realize it or not, brands are a lot more than just objects – they care about what a brand represents to them on the highest emotional level. Human beings are driven by emotions, not by rational thought.

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So how do we as brand builders, trigger the highest emotional point in our customers? How can you create the kind of emotions that fuel inspiration, laughter, and tears? By understanding that your brand and your consumer need to form a relationship, a bond. Think of your brand as your consumer’s mentor, motivator, friend, sibling, life-long partner, or even parent. These are all relationships that spark immense emotions in the average individual. By establishing a strong bond between your brand and your consumer, your brand can create that deep connection that all of these relationships entail. Almost all research on relationships produce the same two essential qualities that need to be present in a successful and strong relationship; LOVE and RESPECT. As brand builders, if we can establish love and respect for our brand in the mind of our consumer, we have then created a strong relationship. And with every strong relationship, emotions fly high. When the highest level of emotions are triggered, we create a long-lasting, loyal, and powerful bond between our consumers and our brand.

Juan Carlos Rodriguez, Creative Director at Badillo Nazca Saatchi & Saatchi, explained this idea exquisitely when he said:

“… Love is based on inspiration. We are inspired by brands for the same reason we’re inspired by the people we love, because they have principles and treat me like a human being who is intelligent and has feelings. They show empathy and bring joy to my life.”

There are those products and brands in our lives, that if they were to disappear, we would easily find an alternate. But the moment something we’ve formed a deep relationship with disappears, we object and do all that we can for its return. When a strong bond is formed between your brand and your customer, your brand becomes IRREPLACEABLE. Strive to make your brand irreplaceable.

Kevin Roberts, CEO of the advertising agency Saatchi & Saatchi, came up with the marketing concept called Lovemarks. Through the Lovemarks concept, the Love/Respect Axis was born. It demonstrates the difference between those brands that are meaningless to consumers, and those that are irreplaceable, that are LOVEMARKS. The Love/Respect Axis:

love respect axis

A regular brand scores high in RESPECT – where you have trust but no emotional connection. A fad scores high in LOVE – where you have emotional connection but no trust. But a Lovemark scores high in both. Coca-Cola scores high in both. Apple scores high in both. And with the recent viral marketing campaign, WestJet is scoring high in both. It’s no surprise that the recent “WestJet Christmas Miracle” ad is going viral – 8 MILLION VIEWS IN 3 DAYS. If you haven’t seen it, watch it below and get ready to have all of your positive emotions triggered. The next time you fly, you’ll be sure to think of WestJet. Through this branding strategy, WestJet is well on its way to becoming a Lovemark, if it isn’t already one.

In this post I covered the ‘WHY’ and the ‘WHAT’, in terms of the importance of forming a relationship to fuel emotional responses. In the next post I will cover HOW we can successfully and strategically do this. Emotional branding is a huge topic in brand marketing psychology. There is a lot to cover, especially if we leverage the psychology of consumers to understand ideas that create that emotional bond. By completely understanding how emotions are triggered in your consumer, your brand strategy’s effectiveness is guaranteed to evolve.  

“The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions.” – Neurologist Donald Calne

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Brand Building Brand Differentiation Brand Management Brand Positioning Brand Strategy Brand Strategy for Start-Ups Branding Psychology Consumer Psychology Marketing Psychology

Brand Competition Psychology: How Consumer Choices Effect Demand and Why You Should Appreciate Your Competitors

pc vs mac

The goal of every brand marketer should be to build brand equity. What exactly is brand equity? It’s the ability of your brand to shift consumer demand. Consumers have a vast array of choices these days. Today, we walk into a supermarket and are actually confused by all the different choices we are bombarded with! Whereas not too long ago, we would be hoping for more products and as consumers, find ourselves disappointed with things that don’t really serve our needs. Today, brand strategy is not so much about creating demand than it is about shifting your consumer’s demand to YOUR brand.

Fact: Higher demand of your brand leads to higher market share.

Now logically, there are two ways to increase market share and become a market leader:

1)      Eliminate competition

“Well if I don’t have competition and I’m the only choice for my consumer, then I can have all or most of the market share.”

2)      Enhance brand equity

“I will make it so that my brand will shift consumer demand from my competitors to me.”

It’s surprising how the majority of companies today, choose Option 1.

Greed is not good, when your aim is to shift consumer demand.

The leading brand in a category habitually tries to stretch its appeal in order to seize every last bit of market share. What they fail to recognize is that when you stretch your brand, it deteriorates and weakens. The leading brand should endure competitors and also appreciate them. 

The entrance of Pepsi-Cola, was probably one the best things to have happened for Coca-Cola. Why? The competition between Coca-Cola and Pepsi-Cola makes customers more aware of Cola. The Cola category has been growing ever since this rivalry erupted.

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If you want to build market share, understand the consumer’s mind, where your brand lives, and leverage that beautiful asset to create a strong brand building strategy. How consumers respond to competition and choices is crucial for any brand marketer to understand.

Customers always have choices, even when no competition exists. They can make the decisions to choose beer, apple juice, or water to drink instead of cola. The reason is because increased competition grabs more attention of customers and has the habit of increasing sales in the category.

Choice fuels demand.

Choice is seen as a huge benefit. Without choice, customers begin questioning the category itself. For instance, customers begin questioning the price point, in wonder if they’re paying too much – “How can I judge the price if I don’t have anything to compare it with?”

The psychology of most brand marketers and companies is that they want to have an unfair advantage over their competitors. They can’t handle the idea of having an even playing field. So they come to the conclusion, that the only way to keep as much of the market share as possible, is to drive out the competition. That’s when they end up making horrible branding decisions and decide to expand, extend their line, etc., which only further weakens the brand.

Appreciate your competitors. Competition leads to increased choices.

There is however, a limit to how much choice there should be for a consumer in a particular category. Having too much choice can definitely be detrimental. Having too many brands can lead to having too much variety, which leads to greater confusion for the consumer.

What’s the right amount of competition? Two seems to be the best number – Coca Cola/Pepsi, Nintendo/PlayStation, Duracell/Energizer, etc. Too much choice leads to reduced consumption.

In the consumer’s mind, if there isn’t any competition they often think that companies could take advantage of them and rip them off. This is why we usually see competing businesses clustered in one area. We’ve all seen it – how similar businesses are usually grouped together in one neighborhood. This is especially evident in large cities. These business clusters attract more customers because now customers have more than one store to shop at, in one trip. Time is limited these days for the average individual. Moreover, customers can now easily make comparisons.

Healthy competition is good. No brand can ever be capable of dominating the entire market. Anything greater than 50% is extremely rare. If your aim is to gain market share greater than 50%, it’s more efficient to consider creating several independent brands (not line extensions).

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