evanboswellhamilton

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To Succeed, Burberry Should Embrace Imperialism

Looked in aggregate, Burberry's legacy has repeatedly been a victim of its own success. Repeatedly, the brand's unique look, as evidenced by its striking check pattern, has captured markets, often diluting the brand. The role of the Chief Executives over time has been to reign in the brand identity back to its luxurious legacy while also being fashion forward, yet not being sullied by over-saturation. While this brand struggle is a positive sign of the brand strength, they will repeatedly go through these ebbs and flows. As long as Burberry identifies itself as a fashion brand, it will periodically need to refresh itself, scrapping old designs and launch a new campaign. I propose Burberry switches the focus from finding their brand niche between other players, such as Gucci and Coach, and start taking an institutional approach.

One of the top fashion brands in the world is LVMH (LVMH Moët Hennessy) which does much more than simply make clothes. The brand is an institution that routinely boosts its revenue by purchasing other brands and bringing them under their umbrella. However, rather than being a holding company, LVMH still maintains its Louis Vuitton brand, which is able to steer the brand identity, yet not worry about the category they play in. By doing this, the brand is able to maintain their aspirational look by protecting the distribution of their product through elite channels, while simultaneously, pulling in major sales from lower market products. They will have to compete in this lower space if they want to stay relevant, as fast fashion continues to rise and bargain brands like Zara are able to gain market share.

The other advantage of LVMH, and its major holding company Dior, is able to flex is by opening fashion houses under well known influencers. Rihanna, Kylie Jenner and Kanye West have all stacked piles of cash by selling their image to larger companies (LVMH, Coty and Adidas respectively). While the role of super models was massive in the 90s, influencers have much more dedicated followers who will consumer their products ravenously. This approach is not only strategic for boosting sales, but it also gives brands the ability to distance themselves from risk of being unfashionable. If their brand representative is no longer pulling in their audience, they can simply go to a new influencer and bring them under the brands. A great example of this is the way that sports brands like Nike, Under Armor or aAdidas are able to cycle through athletes depending on their popularity and the season.

In conclusion, the strongest thing that Burberry can do to maintain its position is to not concern itself with their brand identity from a fashion level, but to focus on their brand as a corporate institution. Ironically, the subtext of doing this is to actually to realign the brand itself with luxury and power.

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The Difficulty of Diffusion

If the success of a business is based on the sales of its products, the entrepreneur must capture the hearts and minds of the general public to try their product. In our reading, we saw the launch of four interesting products, but they are all trying to get into niche markets with certain challenges in each one. These firms will have to overcome some major pitfalls in their particular industry.

Peanut Butter Slices - Do people want this?

America loves two things. Food and convenience. Naturally, the idea of kraft singles, cheese slices seems like it would be a great way to make a cheese burger or a patty melt. However, when this same approach was brought to the peanut butt er and jelly world, the jury is still out. First, from a taste profile, it seems like a big lift to try and get people to take on peanut butter slices as a delectable option. Second, the problem they are trying to solve (not using knives) goes out the window unless they are also able to solve the jelly side of the PB & J equation. Finally, there is something nostalgic about spreading the peanut butter across two slices of bread, so they company will need to capture the experience of enjoying a peanut butter sandwich as opposed to the actions of making it.

Folding Wheel - Is this big enough of a problem?

Reinventing the wheel is certainly a tricky business, but that did not stop one British inventor from attempting it. His wheels, which pivot in the middle, are meant to be more compact for easier transportation. The problem the Inventor, Duncan Fitzsimons will have to over come is what the right application will be for his wheels. Where is there a need in the market that would benefit from this device? At the time of writing this article, he was looking at the bicycle industry because there had already been a growing segment of collapsable bikes. However, the current form factor of Fitzsimons’ wheels were too expensive and too large to make sense there. Later he would try out the wheel chair market, specifically designed for people as they take flights so their wheelchair can be placed in the overhead compartment.

Polytrack - But is it still horse racing?

The legacy of horse racing has been around for centuries, practically since the first horse was domesticated. Now, one company, Polytrack, is looking to add a new material to the game, which will help save the knees of horses as they speed around the track. Unfortunately for Polytrack, all sports associations (especially those that make a large amount of revenue based on gambling) have bureaucratic rules that make it hard to introduce new innovations. Even in the world of olympic marathon running, we see racing shoes being put under a lot of scrutiny because they are allowing runners to break world records. At a certain point, the question comes down to, what is in the spirit of the game or what is just cheating.

Bespoke Puzzles - Limited target audience

People always love playing games and solving puzzles, but when does the value of these puzzles move from being a toy to a luxury status symbol. Stave Jigsaw puzzles are elegant, yet expensive, games that have found a home with elite consumers looking for a simple diversion. While the custom woodcut puzzles are certainly well crafted, they fall outside the price point of most average consumers, who can get a 1000 piece puzzle for less than $50 on amazon.

In all of these cases, the companies will have an uphill battle trying to identify a particular market for their product. Further, they will also have to convince people in that segment to switch over to their product. If they can do this quickly and rapidly diffuse their segment category, they will be succesful. If not, the firm will fall into the valley of death and not get their businesses off the ground.

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Concha y Toro y La Gente

As the old adage goes, Teamwork makes the Dream Work. Unlike other industries where a company will want to edge out their competition to establish a monopoly, the world of wine relies on the strength of a region’s perception. One of the largest moment that rocked the wine world was during the “Judgement of Paris” that firmly established California wine as being on par or better with high valued French wine. This opened up the floodgates for New World wines around the globe that rivaled the established tradition of Old World wines in Europe.

While Concha y Toro is facing challenges to improve the perception of their brand, the best thing they can do is to actually help their competitors in their local ecosystem. As a result, they will increase the overall profile of wines that not only come from Chile, but also in specific areas. Using California as an example again, Napa Valley and Sonoma have established their own brands that have specified the variety of California Wine. As a result, vineyards have popped up across CA to continue strengthening the overall brand.

Especially in wine, consumers do not have strong brand loyalty, and in fact, enjoy comparing nuanced differences between different grapes, vineyards and blending techniques. While this can make the market more challenging, it actually could help Concha y Toro keep its overhead lower because they don’t have to start multiple bottle brands under their company in order to capture the whole segment. They can specialize on their specific skill set and prop up other companies at different price ranges or levels of quality.

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Vin Diesel is the Micky Mouse of Corona Beer

Since the franchise’s debut in 2001, and his line “You can have any brew you want, as long as its a Corona”, the beer brand has been tied to Vin Diesel and his crew of high-octane merry men. As a result, the Corona brand has benefited from millions of dollars in free ad revenue as they found their unexpected spokes person. But why was this such a clear character choice that helped develop the world of Fast and the Furious? The answer lies in the branding and implicit message of class.

Corona, a beer brand owned by Grupo Model, has aligned itself with a slogan of “Fun, Sun and Beach”. The idea was to be an unpretentious “drinkable” beer that customers could enjoy. This marketing came at a time when European beer producers, such as Heineken, rested on their laurels of high quality, premium beer. While Heineken’s campaign had worked earlier in the century when European quality was deemed a premium product, the shifting demographics in the United States meant Heineken would have to rethink its strategy if they wanted to compete in that growing segment.

Enter Dominic Toretto. Fast and the Furious, a story that started off following underground street racers but has since evolved into an Avengers-esque group of superheroes, emphasized a sentiment of trust, loyalty, and of course, family. The choice of Corona was just as important as the souped up Mustang, to emphasize down-home Chicano-Americana.  

While Heineken has attempted to change its image by being “funny” and thus more approachable, the brand has somewhat tarnished its image as it now straddles two different modes. This helps explain why the Heineken group ended up acquiring one of the Modelo Group’s chief competitors, which owns Tecate, which is in the same market segment as Corona.

Now just for fun, a gif of Vin Diesel breakdancing.

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Two prong approach to tech marketing

The challenge with making a groundbreaking technology is that it often requires the inventors to explain what is actually so groundbreaking about it. Further, as new developments come online, how does the company get customers to abandon a product that is already selling well to something that is only marginally better. As we saw in the case of Intel Chip technology, customers were reticent to upgrade their chip that was running “just fine” in its current mode. Mind you, the individuals with the highest purchasing power in this space were used to cars and machinery “built to last” and the idea of obsolete parts was a somewhat foreign concept. Additionally, Intel was making a product that was simply a component (though fundamental component) to a large machine with hundreds of parts.

This is why the first phase of marketing efforts were around the technical deep dives of the software and demonstrating how this product was dramatically better and why the customer should care. We have seen a proliferation of this idea with youthe tech reviews, where creators have millions of followers to do “unboxing” of the iPhone 10 vs the iPhone 11. Apple has also made this a key marketing ploy with their annual events in September where they release a majority of keynote products.

With that being said, once people started to understand that there were marked differences between each iteration of a product, and trust that it was worth their investments, marketers simply had to grab the attention of the public and get a visceral reaction. Once again, they were able to drill down on how the products capabilities made you feel and allowed you to do, as opposed to just the brand behind it. To continue with the Apple example, the company created a campaign last year which was about the creators behind the Mac, where writers, actors and nonprofit workers were championed with what the technology enabled them to do.

In the end, I think it is clear that you need both approaches. On one hand, there is the technical deep dive to back up, beyond the shadow of a doubt, that the new product is an improvement over the previous iteration. On the other, brands need to remember that people are motivated by intangible emotions and they can use this sentiment as a call to action for something new.