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Fair is Lovely

How do you really get into the heads of customers – even when the matter is a thorny one? 

The landscape for businesses is changing with respect to their handling of “thorny” issues. As the consumer base becomes more in touch with advocacy regarding various social issues, businesses are often forced to adjust their marketing/branding in order to cater to their customer base. This can be seen in the Fair & Lovely vs Dark & Beautiful case with Women of Worth (WOW) putting significant pressure on brands to adjust their branding to move away from the long help societal norms that darker pigmentation was deemed as unattractive, undesired and associated with sadness and a poor life prognosis. In India, while this underlying thought had been around for centuries, with the rise of influential members of society pushing against this mindset there began to be shifts in thought with ASCIs stricter marketing regulations and Dove’s “Real Beauty” campaigns. WOW was able to get into the heads of customers through public pressure and attempts to generate a mass pushback against these deep seated beliefs.

The parallel that comes to mind for me is Planet Fitness. Planet Fitness has made significant strides to emphasis that they are “not a gym”. They are attempting to navigate the personal wellbeing and fitness space by framing themselves as anti-establishment and against the mass spread marketing of unattainable fitness aspirations. The concepts of body and self image can be a thorny area to navigate, but Planet Fitness has gone to great lengths to frame themselves as an “accepting of all” business. This gets into the heads of all customers and serves to propagate their messaging by self selecting Planet Fitness customers.

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Singapore Airlines - “Service Like a Gentle Wind”

How does SIA deal with an industry crisis?

Singapore Airlines has from its inception placed an incredibly high value on quality of service. This is evident from its initial rigorous four-month training program for incoming flight attendants which was often described as a “cross between a finishing school and boot camp”. It was here where new employees were indoctrinated into the fundamentals of functional skills and soft skills designed to provide the customer with an unparalleled travel experience. It was through this heavy emphasis on service that SIA became known for the “cutting-edge quality of its service”. In the words of SIA’s head of cabin crew, “service should be like a gentle wind. You feel the breeze—it’s there—but you don’t see the breeze, it’s not in your face. The attendant is there when the passenger wants her, away when he doesn’t want her. She anticipates his every need.”

This cutting edge service was demonstrated through industry crises such as the baggage handler strike in Paris and an air traffic controller strike in India in the late 1990s. In Paris, the ticket agents, flight attendants, and station manager stepped in and loaded the luggage themselves in order to ensure that SIA was the only operating airline during the work stoppage. Additionally, in India, with the many flights grounded, SIA employees automatically began assisting customers with accommodations, business schedule rearrangements and notifications to destination contacts of the delay. All of these actions were taken without a ‘manual of instruction’ or official guidance on how to handle a crisis. Instead, these actions were simply manifestations of SIA’s deeply trained and prioritized culture of the highest quality service. 

How do you sustain customer-centric value?

Customer-centric value is sustained through continual reinforcement throughout the entire management chain, from the newest employee all the way to the CEO. In the case of SIA, initial training heavily emphasizes a customer-centric model and this emphasis is further reenforced by managers when the employee is on the job. Singapore executes a degree of decentralized control with regards to handling of customer service issues which allows for a much more rapid and customer friendly response at the point of contact. It’s “two-level up” decision making emphasizes the customer by empowering employees to make decisions which will generate customer goodwill by cutting through bureaucracy. This empowerment helps sustain customer-centric value by demonstrating that customer service is a very important issue for the entire company such that the company is willing to empower decision making down to the lowest level to satisfy the customer. 

Further decisions made by company leadership serve to emphasize customer service by being willing to make financial sacrifices to ensure the highest quality experience for travelers. Their consistent drive to have the best amenities in entertainment and serviceware designed by Givenchy demonstrates to all employees that customer-centric care is a company priority and much be maintained.

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Chilean Wine: “The Volvo of the Wine World”

How much of wine consumption is perception versus actual quality?

The perception vs reality concept with wine can be clearly seen when examining French wine. While the Judgement of Paris served to level the playing field between American and “Old World” wine, the French still enjoyed a strong position in the industry due to “an enviable set of positive attributes associated with the country, [...] [being] Chic, classy, and the most romantic of people”. This perception helped contribute to wine sales when the overall quality of the product was no longer the consensus differentiator. This differentiator was further emphasized in a Texas A&M study whereby individuals nearly unanimously ranked “French” labeled wine the highest and “Texan” labeled wine the lowest among their test wines despite all of the wine ultimately being from Texas.

Why does “Made in Chile” matter?

“Made in Chile” matters for a few reasons. At a high level, Chile’s geography represents a nearly ideal place for the wine industry to prosper due to Chile’s natural barriers with “the Pacific Ocean to the west, the Atacama Desert to the north, the Andes to the east, and Antarctica to the south” to shield it from imperfections and impurities. This fact gives an alternative to the concern regarding building country image through advertising. Since Chile has concerns regarding having a “readily identifiable music, cuisine, or cultural identity”, its geographic advantages can be leveraged in its “Made in Chile” claims. Additionally, “Made in Chile” is also associated with value for money across all quality levels. Chile can capitalize on its unique geography and its value pitch in order to appeal to younger professional wine consumers. These consumers are beginning to have disposable income for purchasing wine, want to maximize quality for price, and are interested in differentiating themselves amongst their peers with a unique and distinguishable wine.

Does a “bottom-up” or “top-down” strategy make more sense for Concha Y Toro?

“Top-Down”: Concha Y Toro should pursue a top-down strategy for several reasons. In the wine business, perception is as important as, if not more than, reality. Chile has consistently been known as a value wine producer for several years, and due to its association with lower end wine varieties it will have a difficult time shaking that reputation. Even though it may have high quality wine, it should leverage its higher end branding to expand its basic wine segment. It will be able to appeal to individuals desiring a good deal for a high quality but lower priced wine. I believe this strategy will yield better results when compared with pulled out of the low end market to focus on the high end market. Concha Y Toro will forever carry with it a reputation associated with its lower end products that will negatively impact their high end expansion efforts. 

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Corona Beer Case Analysis

What are Heineken’s vulnerabilities and how could they be protected?  

Heineken’s key vulnerability is its position that “just being the best is enough”, and this attitude, manifested in their advertising campaigns, heavily influenced their reaction to increased competition from Corona and Grupo Modelo. Their viewpoint that they were above the competition and that “when you make great beer, you don’t have to make a great fuss” represented somewhat of an arrogant mindset and opens themselves up to surprise competition aka Corona “the fad brand of the eighties... a quirky little alternative beer in Texas and California”. 

This attitude reminds me of the attitude heavily warned against during my time working at Facebook. In Facebook’s California office, instead of removing the prior tenant’s sign (Sun Microsystems... a once giant which ended up being acquired), Facebook chose to turn it around and paint their logo on the other side. This decision was made to signal the need to stay motivated and demonstrate what can happen when you’re sitting at the top and view yourself as a giant, too big to fail, but fail to innovate and adapt to the times. 

What do the Heineken and Corona brands mean in the minds of consumers, and how do these meanings differ in the minds of consumers?

In the minds of consumers, Heineken represents old school class and sophistication. Their advertising campaigns have focused on portraying a cool, suave vibe with Heineken being something to drink at a fancy event or celebration. This directly contrasts to Corona’s brand meaning. Corona has successfully centered itself around the concepts of “Fun, Sun, [and] Beach”. Corona has marketed itself as the beer to drink when you need to kick off your shoes and relax. A beer which does not take itself too seriously and which does not need much pretense to enjoy and consume.

How do the advertising campaigns contribute to these meanings?

The advertisements below capture the essence of each product. Corona focuses on relaxation, sun, and taking a load off, whereas, Heineken refers to James Bond, action and adventure and tuxedos. These advertising campaigns directly influence each brand’s meaning in the eyes of the consumer. Just as one would not order a Corona at a fancy cocktail party, one would also not order a Heineken while relaxing after a long day of work or while sitting by the pool on vacation.

Source: Amazon.com

vs.

Source: Youtube.com

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Black & Decker Case Analysis:

Why is Makita outselling B&D 8 to 1 in an account that gives them equal shelf space?

Makita is currently benefiting greatly from its decision to focus primarily on the Professional-Tradesmen product segment, the fastest growing sales segment within the US, since entering into the United States market. Additionally, in a space where perception is often reality, “on the job, people notice what you’re working with.”, Makita holds a significant advantage in terms of product quality perception with 67% of survey respondents labeling Makita as “One of the Best” products on the market as compared to only 44% in favor of Black & Decker. The Professional-Tradesmen product segment is particularly impacted by perception, with individuals who utilize power tools for their business wanting to not only have the best quality products but also to have products which will be looked at favorable in regards to them having the appropriate tools commensurate with the skill level. Makita has branded themselves as a premium product for individuals who are serious about their work, and this branding has been reinforced with price and a targeted product segment of focus. In the words of one customer, “Black & Decker makes a good popcorn popper . . . but I’m out here trying to make a living.” These considerations drive Makita’s considerable success in sales against Black & Decker in the Professional-Tradesman sales segment. 

Why are Black & Decker’s shares of the two professional segments –Industrial and Tradesmen –so different? Wouldn’t you expect them to be similar?

Black & Decker’s share of Industrial and Tradesmen segments are particularly different due to Black & Decker’s focused expansion into the general Consumer market. In terms of product hierarchy and quality, Consumer products are considered the bottom of the pyramid and are specifically for “at home” use. The Industrial segment is designed for corporations purchasing power tools and equipment for their employees and they reside at the top of the pyramid in terms of perceived product quality. The middle segment is the Tradesmen segment, designed for individuals who are purchasing their own tools for use on a job site. This segment is the middle ground between Industrial and Consumer. 

Black & Decker’s decision to move “from the garage to the house” in 1979 highlighted a focus on expanding their consumer product segment. This expansion enabled them to gain considerable brand recognition and attain the #1 position within that marketplace with nearly a 50% share over competitors. This strength, however, served to weaken their standing within the next segment class up in their product hierarchy, Tradesmen. 

The Tradesmen segment was a casualty of Consumer expansion because it diluted the perceived product quality of this middle tier. Tradespeople began to view all Black & Decker products as for use at home and would avoid them when making purchases in support of their job. This problem was exacerbated by instances of Tradesmen misusing Black & Decker Consumer products on the job site and these products failing to live up to the increased demands being placed on them. 

The Industrial segment was spared of the negative impacts of product expansion due in part to two key reasons. First, being segmented two tiers above the Consumer products, there was less concern of product quality dilution with the expansion of Consumer products. Secondly, in the Industrial segment, the tools were being purchased by corporations and therefore the fear of showing up to the job site with tools which would damage your perception as a tradesmen were mitigated because all employees were using standardized tools.