Category Archives: Brand

Strategic Brand Management and marketing strategy

The Brand Identity Prism

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“Having an identity means being your true self, driven by a personal goal that is both different from others and resistant to change.” Jean-Noel Kapferer

There are many models and frameworks for branding. Unilever created their own patented “Brand Key”, Proctor and Gamble developed the “Brand Asset Valuator” to assess the value of a brand. Any of these models might be useful, but we think the most useful of all for the small professional services business is The Brand Identity Prism, created by Jean-Noel Kapferer in 2008.

How to Use the Brand Identity Prism

The brand prism consists of six facets, some are under the control of you, the company, others are on the receiving side of your clients and customers. This is what it looks like.

brand identity prism

On the right-hand side, we have the internalised facets. These are things below the surface of visibility but are within your organisation’s control.

The goal in developing the prism for your business is to add three or four (no more than four) words to each facet. No words should be used more than once.

Each word you choose should be as strong and clear as possible. The hallmark of good identity prisms is the strength of the words they use. No wishy-washy, half-baked sentiments will do. It requires conviction.

Here is a brief outline of each facet. You don’t need to do anything yet.

Personality

This facet has been defined by the pioneer of branding, David Aaker, as “the set of human characteristics associated with a brand”.

In other words, if the brand were a human being, what personality would they have? This doesn’t necessarily mean our brand’s personality should be exactly the same as yours. Some of our clients, after all, may be similar to us but that doesn’t mean they want a relationship with a brand that is just like them. As professional service providers, this relationship is and will be key to our business success.

Culture

The brand’s Culture includes the workplace, staff relationships, morale, corporate values and ideals. In fact, if you are a nonprofit, I would use Values as the section name and think about  culture in those terms.

Self-Image

This is your clients’ view of themselves and is the result of our research, whether that be observation, studies, your own insights, interview and so on. This is where we get under the skin of our targeted client and identify their lifestyles, frustrations, and aspirations. This is our target market from a psychologist’s perspective, not just a demographer’s. It’s not just some checklist of how old they are, where they live and what level of education they have received, it is what they think, what they want, what they feel, what they dream of.

Reflection

This is how we take these insights of Self-Image and reflect them back to our target market so they can relate to our brand. In fact, we not only have to reflect our client’s self-image, we need to reflect their Ideal Self-Image, being who they would like to be.

Relationship

This facet describes the way you conduct your contact with your client. What are the contact points. Here, it is useful to do an ‘Experience Audit’ from a client’s point of view. We want our clients to feel a certain way about us and our brand, this is where we design means to achieve this.

Physique

Finally, we get to the physical facet. Funnily enough, this is where most people start their brand creation and where they finish! This includes all the physical elements that represent your brand. We can’t develop the physical dimension before we understand its core substance. These things are the opportunity you have to use signs, symbols, colours, shape, texture, type, even music or sound to create brand recognition and convey your brand essence.  We will also include staff uniforms, the servicescape and furniture in this category.

We believe this should be done last when all the other facets of the business and the service design have been thought through. The Physique is the seal of authenticity.

Logo Design

A lot of people think a logo is a brand. It’s not. A brand is a collection of perception about your business and the products and services it offers, how it makes people feel, and the solutions you provide.

The logo is something you see, and if it is recognised, then it unlocks those perceptions (for better or worse).

Designing your logo is your opportunity to use the power of symbols to communicate your vision and your positioning.

The designer’s job, or your job if you do it yourself, is to take the essence of your Vision and what is unique about you, and distil it into it’s purest and simplest form.

People absorb a logo in these steps:

1. Shape

First the SHAPE. The shape should be simple. If you’ve ever taken a yellow pages ad, or put an ad in a school newsletter or in the paper, you often get smearing, so it should reproduce well the size of a 5 cent piece.\

2. Colour

Then the COLOUR – colour is very important. 60% of people’s decision to use a new product or service is based on its colour. If you use a multicoloured logo – keep in mind that an offset printer needs to make a separate plate for each colour so it’ll cost more than a one or two colour logo.

3. Text

Then any positioning word or text.

That’s the order of perception. But first things first. There’s a lot more work to be done on your brand before we can start looking at your logo.

BRAND ESSENCE

Finally, the brand essence is the ‘soul’ of your brand. It’s the single, pithy description that sums up what you and your business stands for. It goes in the centre of the prism. It may be related to values, lifestyle, heart, or mind.

Examples of the Brand Identity Prism

To get a grasp of how simple and how powerful this brand identity prism can be, let’s consider a few examples you should be familiar with. Some of these are courtesy of Jean-Noel Kapferer and David Aaker, and some have been ‘imagineered’ by us to help elucidate the concepts.

Ralph Lauren, POLO

Visualised from notes by Kapferer (2004).

Ralph Lauren POLO brand identity prism

 

 

 

 

 

 

 

 

 

 

 

American Express

This example is the result of various sources including CEO Kenneth Chenault.

 

Americxan Express brand identity prism

 

 

 

 

 

 

 

 

 

 

 

 

Apple Inc.

Of course, no article on branding would be complete without the obligatory inclusion of Apple, the world’s most valuable brand (valued at $154 billion according to Forbes is 2016), so here it is:

apple brand identity prism

 

 

 

 

 

 

 

 

 

 

 

Conclusion

Try this tool yourself. You could download the blank at the top of this article,

Remember:

  • Only three words or phrases for each facet
  • Don’t repeat any.

 

What is a Brand?

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“Products are made in the factory, but brands are created in the mind.” Walter Landor

Your brand is not your logo. This is only the physical aspect – the identifier. In communication theory, it is the “signifier”. It works to signal a set of meanings, promised experiences, expertise, knowledge, creativity or whatever your business stands for.

Each of these things are what is “signified” by the logo. The power of a brand is only released in the mind of the consumer.

The Power of a Strong Brand

Imagine I give you a bar of soap.

It is an ordinary-looking cake of white soap, like hundred of others you have seen.

You smell it. It smells like… soap.

Now think about the soap for a second. What words come to mind?

Maybe the words you thought of were ‘clean’. Fresh. Pure. Hygiene.

What if you were to tell you that the soap is Imperial Leather.

Now what comes to mind?

Is it Luxury? Wealth? A Cruise-liner?

What if I told you that it is not Imperial Leather. It is Body Shop soap.

Now what comes to mind?

Ethical. Compassionate. Not tested on animals. Environmental.

That is a brand.

The Brand is the set of perceptions that are unlocked by your name, your symbol, or your signifiers.

The brand exists in the mind of the prospect or customer.

What the brand unlocks are associations including:

  • Personality
  • Higher Order Goals
  • Archetypal stories and mythology
  • Story of struggle, and success
  • Culture
  • How customers see themselves

A strong brand  works to tap into the collective unconscious and release a set of universal, archetypal stories. A brand is a fairy tale. It has a hero and a villain, a struggle against adversity, human spirit, emotion, vigour, and lasting value.

The strong brand can be globally relevant, because it represents aspects of human experience, which we all share, irrespective of the culture in which we were raised.

 

Photo by Jess Watters from Pexels

Branding Nonprofits – Case Study of ‘The Salvos’

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Nonprofits face many difficulties when branding. Some of these are unique as the value proposition for a nonprofit is unique to that sector. It is a social exchange with an intangible, higher-order reward as its value proposition. The key issues are values and vision, trust and transparency, organisational culture and structure. Continue reading →

Ten Practical Neuromarketing Insights You Can Use Right Now

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In 1999, researchers did a simple wine purchase experiment inside a supermarket.

Music

Near a display of French wines and German wines, the researchers played French music one day, and German music on the alternate days. They did this for two weeks. Guess what happened?

You’re right! On the days French music was played, the store sold three times more French wine than German. On the days German music was played, the store sold three times more German wine.

No surprises there, I guess. Except that—

They also asked every shopper who bought a bottle of French or German wine this survey question:

“What factors influenced you to buy the French / German wine?”

Only one person in 44 chose the music as having any effect!

The study just goes to show two things.

Key Learning 1: Obviously, music can influence purchase decisions and mood, so you should start using it in your servicescape. I don’t mean tune the room into commercial radio or some garbage, be selective and set the tone. Good music can vivify and enhance purchase spend, but bad music can make you feel angry or annoyed. In fact, every time Fleetwood Mac comes on the radio station of my local Vinnies, it’s time to leave. Likewise, my favourite cafe at the moment (Esca in Glebe Point Rd) often plays St Germain in the mornings when I grab my takeaway soy flat white. It’s music I play at home and it makes me feel relaxed and happy. Want a cookie with that? Sure.

Key Learning 2: There is a big difference between people’s behaviour and their understanding of that behaviour. From this, we can even postulate that asking people questions, even in depth interviews, will give you flawed data every time. There is a whole world that exists in the brain that is below our awareness levels. Talking about why we do things just doesn’t cut it. People cannot tell you what they think. Not that they don’t want to, they can’t. So with that in mind, if you think something could work, try it. Forget asking customers. Just introduce it and judge from the results.

Happy Faces

Although subliminal advertising is not legal in Australia, research has shown that flashes of happy faces can generate up to triple the price for a mystery drink. The real-world self-service vending machine study also showed that people changed their consumption behaviour after the happy flashes (drinking more). Those who saw the unhappy faces, even though they could not consciously detect them, drank less.

Key Learning 3: Positive, genuinely happy staff is gold dust. Happy staff equals happy customers equals higher profits.

Key Learning 4: Both the music study and the subliminal faces study both go to show that a positive environment and positive feelings, no matter how small, have an impact on consumers sense of value. Want to be perceived as offering more value? Be more positive. Smile and set a happy scene.

Eye Tracking

Although big businesses spend big money on eye tracking, we can learn from their research.

Eye movements are a reliable indicator of attention. If you have the budget, it’s a useful measure for things like:

  • advertising design
  • web design
  • store design
  • packaging design

Some companies seek permission to get into your webcam so they can track your eyes on a beta website, for example.

Observe Closely

Key Learning 5: Watch people. Watch what they look at. Observe. Did you notice that customers often find trouble locating the pasta sauce? Move it. You can quite easily and inexpensively do observational research to see if your store design is working well, or simply use (and watch) people testing your website or looking at mockups of different window, poster, or newspaper ad designs. Do your A/B split tests.

Logo Positions

By the way, eye tracking reveals that if a logo is used on the bottom of the ad, many people won’t see it. You may want to watermark it right through the centre instead, or incorporate the branding more creatively within the body of the ad. If there’s a big Helena Christensen flashing cleavage in the centre of the ad, people will remember the model, but they won’t necessarily connect her with the brand name at the bottom right hand corner. Same can be said for calls to action. Why do they have to be at the bottom?

Use Faces

Key Learning 6: The most compelling thing a human being can look at is the face of another human being. Especially the eyes. Both genders will also look at things like cleavage, however. People are curious. Use people in your marketing material wherever you can. Faces capture attention.

Arousal Methods

When people are emotionally aroused (in whatever capacity), changes in the sympathetic nervous system are automatic.

This can include pupil dilation, increased heart rate, breath, sweat glands.

The emotional arousal is primitive. We are either attracted or want to withdraw from the stimulus.

Physiological tests of pupils, sweat glands, heart rate, and breathing can indicate arousal, but can’t indicate whether the arousal is positive or negative.

Key Learning 7: A simple skin conductor test on the palm of a hand can reveal any arousal to a stimulus such as a picture of a food product, or an advertisement, but it won’t tell you if they like it or not. So is that information in itself something you can act on? All marketing research needs to yield information upon which you can base a decision. In my opinion, physiological tests of heart, pupils, sweat, and breath are unlikely to be of benefit most of the time.

Facial Recognition

There is software that detects whether a person, even with a somewhat neutral expression, is happy or sad.

Companies have used this in doing user experience (UX) tests for websites.

Key Learning 8: What the face reveals can be accurately decoded by software, but it can also be understood by any curious and perceptive human being. Look at the expressions on their faces. Sure you can video record your store, but why would you. Plus, it’s a privacy thing. Just get in there and mingle. Try looking at clients and customers when you are explaining that technical process or the different packages you offer.  Do they fade away in boredom at certain points? Do there eyes go into deep focus? Do they look scared when you start talking fees and charges and scales of member benefits? Do they outright tell you they didn’t understand? Dumb it down then, folks. If you can’t explain something in simple terms, then you don’t understand it well enough.Or, if your customers don’t understand it easily, it’s too complicated.

Confusion is death. It’s a copywriting mantra, but same goes for a web design. If the user can’t get to what they’re seeking quickly, they will usually leave your website within a matter of seconds. Forever.

Do your customers look happy? Do they express delight? If you have a physical presence, there are so many ways you can setup people to have a positive emotion. Christmas tree with donated presents? A train set? Mood lighting? Classic TV programming? Scent? Comfortable chairs?

Online – increase the size of your web font. Make it easy to read, not gimmicky. Follow my mantra; if in doubt, Open Sans. Make buttons bigger and colourful. Make a change and watch your customers faces before and after. You might want to check out the Designing Servicescapes article for good ideas.

Brain Signals

The marketing concept of value lives in the brain. When people make decisions, brand memories serve as neural connections. Strong connections are better for the brand. An unknown brand will have few memories and be able to generate only the weakest neural connections.

Based on brand memories, value signals will be sent to the front of the brain where decisions are made. The strongest value signal wins.

Electroencephalography (EEG) scans have been able to reveal a more accurate price point for university students’ on-campus cups of latte macchiato than questionnaire results found.

Key Learning 9: If you can’t afford EEG to set a price point for maximum demand and profitability, consider using a real world test of different price points and look at the elasticity of your demand. Then use regression techniques with Excel or similar software to make forecasts.

A study that used functional magnetic resonance imaging machine (fMRI) has revealed that the brain activity processing value signals can often be different to what a person says, even when they aren’t lying. Brain chemistry doesn’t lie. Read about this classic neuromarketing experiment that used MRI and the startling power of brand effects.

Key Learning 10: The cultural power of a strong brand is not contested. Brands insinuate into the nervous system. Cultural information and memories impact our perceived value and our decision-making. Only the ignorant would say that a brand has no value because it’s intangible.

So the last key learning is this: make good memories. It doesn’t matter what your budget is, provide clear branding images that are consistent with style, typeface and colour schemes. Good brands tell a good story. They create good experiences. It’s all pretty common sense, I guess. But common sense is not common practice. Make every customer experience a good new memory and you’re on your way to building some good cultural capital. If it’s an emotional experience, like the arts can deliver, that memory may just may serve you well in someone’s decision-making process twenty years from now.

Sources:

Phil Harris, “Neuromarketing” Presentation at Australian Marketing Institute, Sydney, April 2014. Check out Nurobrand’s website if you are looking to introduce neuromarketing metrics into your organistion.
North, Adrian C.; Hargreaves, David J.; McKendrick, Jennifer “The influence of in-store music on wine selections.”Journal of Applied Psychology, Vol 84(2), Apr 1999, 271-276
Neuropricing http://www.neuromarketing-labs.com/services/neuropricing/the-latte-macchiato-experiment/

May 26, 2005 “Face Value: Hidden Smiles Influence Consumption And Judgment: Psychology Studies Confirm Unfelt Emotion Can Alter Consequential Behavior”

 

 

 

Campaign Deconstruction: Pantene Whipit

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While checking your Facebook News Feed, you may have come across the Pantene #Whipit ad that has now officially ‘gone viral’.

In case you missed it, here it is again.

 About the Pantene Ad

Filmed as a TV Commercial for the Philippines market, the Pantene ad has caused a global sensation for its radical departure from conventional shampoo advertising.

Taking a leaf from Dove’s Real Beauty campaign, (which has been tremendously successful), Pantene confronts gender bias and sexism in the corporate workplace and encourages women to shine.

#Whipit Campaign Background

The inspiration for the campaign came from an October 2013 study that revealed that women were still experiencing double standards and gender bias “even in progressive Metro Manila” Rappler.com.

The ad features corporate females doing identical tasks (presentations, running meetings, crossing the road, working late at night) and being perceived differently (boss / bossy, dedicated / selfish).

Pantene partnered with active social news website, Rappler (in the Philippines). Rappler’s mission is to generate smart conversations through uncompromising journalism where “stories inspire community engagement and digitally fuelled actions for social change.”

The partnership resulted in a social marketing campaign tagged #Whipit in order to try and:

a) subvert these perceptions (Rappler), and

b) make some money selling product (Pantene).

Pantene with agency BBDO Guerrero Manila took a radical departure from the standard shampoo ad script, which often makes women feel disempowered because no shampoo really creates the preternatural shine (or the fabulous good looks and attractive glances) that the ads suggest.

Instead, BBDO and Pantene have taken an empowerment approach and focused on successful women (with good hair) in corporate situations.

The titles demonstrate the faulty perceptions about females in the workforce compared to men.

It has succeeded creating a relevant, albeit tenuous, link to its haircare products and value proposition of shiny hair. Shiny hair, shine as a person. Get it? [Hmm, sort of]. Quality of the product / inequality of the situation.

The ad ran for a month or two before a mention by Facebook COO Sheryl Sandberg saw it rocket to worldwide popularity.

“This is one of the most powerful videos I have ever seen illustrating how when women and men do the same things, they are seen in completely different ways,” Sandberg wrote on her official Facebook page.

There are critics. Some say the theme conflicts with the product itself.

Effectiveness

The results of the campaign are not available yet, as it still ricocheting through cyberspace.

It has generated thousands of tweets and nine million YouTube views.

Personally, I like the ad and for something that has only ever aired in the Philippines, it’s what I would call a ‘good spend’. I think it has generated smart conversations and created popular awareness about the differences in perceptions, including from and by women.

It also makes me think that Pantene really is a smarter product than others and reflects my self-concept, which is pretty critical when marketing things like this. Like jeans for twenty-somethings, it’s not about the denim, it’s about how you see yourself and how you want others to see you. In marketing parlance, we call it the ‘transformational appeal’ and it can be more effective than an ‘informational appeal’ as long as you can make it past the rationality hurdles.

That’s why I also like the ad from a marketing communications perspective, because it does what many brands try and fail to do well, which is successfully enter emotional and higher-order territory and favourably reflect the target market back to themselves.

Entering Emotional Territory

Apple was initially subversive (watch the famous Superbowl ad styled on Orwell’s 1984 here), now it’s creative and inspirational. Nike uses the ‘power of the individual’ (watch). Dove is ‘Real Beauty’ (this is beautiful).

Even though I find some of the quasi-spiritual underpinnings of certain fast moving consumer goods eye-rolling, they can be enormously powerful. Archetypes and storytelling; quests, ideals and journeys are universal and deeply felt.

They work because you can add have more nuts, thicker cream, a cheaper price, an easier payment system, but so can your competitors. There is no real differentiation and therefore no real loyalty. When you own emotional territory, it is very difficult for a competitor to displace this. You’re on a higher plane. You ‘connect’.

As Services businesses, it’s easier for us. There is always a deeper, laddered down benefit of what you do. Always. The hidden, but powerful value proposition may be security. Confidence. Assurance. Romance. Idealism. A means to express individual self-identity.

If you need help laddering down to your higher order benefit, send me an email.

Also what do you think of the Pantene #Whipit ad? Love it or loathe it?

 

 

 

 

Small Business. Super-sized Brand

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There are a lot of components that make a brand. In order to make a powerful and durable brand, you have to put in the work. It’s not design work, not initially.

But it boils down to your vision and your understanding of your customer and your knowledge of the market and the other players in your arena.

Let’s start with Vision

So what is vision?

It’s the thing that initially filled you with inspiration to start your business. Continue reading →

Making Sport Sponsorships that Work

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This article looks at the challenges of creating an enduring sports sponsorship partnership. The difficulties involve finding ‘strategic fit’, articulating this well and then leveraging and activating the association for both parties. The investment – both financial and in-kind – is seen as a significant stumbling block as is the need to thoroughly enmesh two separate organisations and proactively align their goals and activities. Continue reading →

Starbucks Lessons from Australia

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Starbucks opened its first store in Seattle in 1971. By 1992 it was publicly listed and had 140 stores and a growth rate of between 40 and 60% each year.

Starbucks currently has over 15,000 stores in 44 countries.

The Starbucks Concept

Right from day one, Starbucks did not see itself as a ‘coffee’ business, but a ‘service’ and experience business. Its model was built on the European coffee tradition, with which America was unfamiliar. Coffee in the States was generally a jar of percolated brew sitting on a hot plate.

The brand was built with a number of key attributes – the customer should be greeted within five seconds, there would be eye contact, their name would be remembered, and visiting the store was a place to relax, socialise, read, surf the internet and be seen.

Advertising and promotion were not to be the primary communication vehicles. Starbucks philosophy is based on the understanding that a positive emotional experience will generate word of mouth and lead to customer loyalty.

Starbucks in Asia

The first store to open outside of the USA was Tokyo in 1996. The company has been very successful in Japan and it continues to be a high performing market.

In China, its biggest growth market currently, the pastries and drinks are smaller to suit local tastes and a green tea frappuccino has been introduced. Similarly, the product items have been adjusted to cater to local tastes in Saudi Arabia and Japan.

There is growth in the large cities of Beijing, Shanghai and Guangzhou where middle-income professionals are burgeoning.

Starbucks in Australia

The coffee industry in Australia is worth $3 billion a year, with $1 billion of that consisting of takeaway cups. It was already mature when Starbucks opened its first store in Sydney in 2000. The retail market is tough with intense rivalry and returns of just 4% p.a. net profit.

Australia’s large migrant population, especially those from Greece and Italy, meant that the Australian market had adopted the routine of morning coffee many decades earlier. The European tradition was not new or novel. The local drinking palate was sophisticated, liking strength undisguised by syrups or excessive milk.

In 2008, Starbucks announced it was closing 61 out of its 87 Australian stores (73%) remaining with less than 2 per cent market share of the speciality coffee market – an unwinnable formula for an economy of scale and out of step with the ‘clustering’ saturation strategy used in the rest of the world. Starbucks announced the reason for the closures was consumers’ tightening of belts due to the global financial crisis and fears of recession.

In the Australian speciality coffee market today, Gloria Jeans dominates the high-end. As a franchise, its store owners know the local area, tastes, people and communities.

Second is McCafe (servicing the economy end), as well as Coffee Club, Wild Bean (an offshoot of BP at service stations) and Hudsons. Starbucks is in sixth place with less than 2 per cent share.

What went wrong?

Starbucks may have assumed that Australia had a very close ‘psychic distance’ from the USA and expected its stores to be met with the same enthusiasm as America. Its offering to Australians was the same as the US offerings.

Unlike McDonalds and Krispy Kreme, who both opened one or two stores in a slowly, slowly approach to stimulate demand and create a sense of scarcity, Starbucks saturated the Australian market with 87 stores and was soon perceived as a ‘mass brand’ not the exclusive brand position it was after.

The Starbucks team also failed to understand the psychological and socio-cultural aspects of the country it was entering.

Australia is not one homogenous market; it consists of over 235 different ethnicities and has a proud tradition of backing the underdog — in this instance, the small shop around the corner. Many consumers were found to actively dislike the ‘super-size’ high sugar/high-fat mentality of America which Starbucks was found to epitomise.

Even worse, Starbucks coffee was generally considered ‘watered down’ and inferior to what was already available at a much lower price. Ethically produced coffee and personal relationships were also important for the Australian market.

Confused Value Proposition

It may not have been these factors alone that were the undoing of Starbucks in Australia. The company was already contradicting its own value proposition when it introduced competing priorities in stores, such as the key performance target of servicing ‘x’ number of customers per hour.

With a value proposition built on friendliness and space away from work or home that can be used for relaxation and socialising, the pressure on staff to generate steady customer turnover meant that they were less able or inclined to engage in conversation or relationship-building with customers.

The use of vacuum-sealed coffee and automated machines to make coffee 40% faster, thereby reducing queue wait, also meant the augmented sensory benefits of watching the grinding and ritualistic preparations of the drink, as well as the hedonic aroma, were removed.

The in-store furnishings, magazines, music and wi-fi were imitable and being copied from stores all over the place, including Gloria Jeans, McCafe, Wild Bean and Coffee Club.

The Starbucks loyalty card was just like any other and posed no point of difference or customer motivation, who would just use the loyalty card of whichever company they happened to be using at the time.

In their favour, competing brands were also known for food. Although Starbucks does sell a range of pastries and sweet snack-foods, Starbucks owns coffee in the mind of the consumer and the brand is not perceived as a place you go to eat. McCafe (McDonald’s) means coffee and also food, as does Gloria Jeans (light food) and Coffee Club is where you can get a good coffee as well as a decent, not unhealthy lunch. With an average per visit spend of much less than its rivals, Starbucks found itself in tricky waters.

Finally, Starbucks strategy not to advertise or run promotions may have sounded good at first, but it probably needed to re-evaluate this at the earliest signs of competitive rivalry. Awareness was high, but such communications could and should have been used to convey the brand message or reason for being. The brand essence should have been reformulated for the Australian market and then communicated with clarity and simplicity as a reason to patronise its stores.

Instead, McDonald’s – well-known for its high ad spend – was able to curtail any growth of Starbucks by using subversive messages to undermine it, like this one.

Lessons from the Failure

Starbucks failure in Australia demonstrates why you need to understand your market before entering. What works in one place may not work elsewhere. While some overall methods or services will remain the same, a global strategy must always take a backseat to local needs and be adjusted accordingly.

Solid research, particularly, observational and ethnographic (such as that performed by IKEA and Tesco before they open stores in new foreign markets) is extremely important. A few months of studying and spending time with coffee-drinking Australians may have saved years and millions of dollars to Starbucks in the long-run.

Introducing the ‘Flat White’

7 Jan 2015 Update:

It seems like Starbucks has learnt a few things from the Australian experience. They have introduced the flat white, which is my favourite coffee, into American Starbucks outlets.

According to Wikipedia, the humble flat white was developed in Australia and New Zealand in the 1980s. It consists of a double shot espresso (ristretto) with microfoam of hot milk poured over the top. By microfoam, I mean milk that has been heated and jiggled to form small bubbles. Sorry, I’m not a barista.

A flat white tastes just like a coffee with milk, but far better. The consistency is velvety. It would have to be the most unpretentious and ubiquitous of coffees ordered today in Sydney.

Happy drinking!

Special thanks to the comprehensive review by Richard Fletcher and Heather Crawford upon which much of this article is based.

Richard Fletcher, Heather Crawford (2012), “International Marketing: An Asia-Pacific Perspective” 5th Edition, Pearson.

IKEA – Strategy in a Nutshell

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IKEA’s founder, Ingvar Kamprad, died in January 2018, aged 91. After starting from the humble Swedish beginnings, his entrepreneurial flare led to a multibillion-dollar global empire. Did you know the name Kamprad is a variant of Comrade? His passing marks a good time to review the strategy of IKEA. How radically it differed from other furniture businesses at the time of its conception makes for a good strategic case study.

Customer Profile

The customer profile is the global middle-class. They are interested in items such as bookcases, side tables, storage units. They are aspirational. They are delighted by the value but also the philosophy of style and good design and frugality. Spending amounts are very similar around the world. Continue reading →

Brand Marks

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Since early mankind, people have used symbols to distinguish their individuality, their clan, their territory, and strength – from cave paintings to flags, to the marks on a beast, to the label on your clothing. They arouse emotion and trigger recall. They are both a mark of trust and a promise. That’s why it’s worth investing in a solid brandmark. Continue reading →