qzbranding

[qzbranding]

Diffusion and product characteristics

The reading on diffusion and the HBS case highlighted to me a couple of different factors to adoption. Mainly that it might be impacted by 1) use case/ potential market size, 2) cost of product, 3) linked to cost, scalability of production, and lastly, 4) whether it is category changing in a good/bad way.

On 1) use case/ potential market size

I think here we want to consider both "size of the pie" as well as "share of wallet"

For something like the sliced peanut butter, I could see lots of use cases like for parents, for campers, for people potentially just short on time. So large size of pie.

For something like the puzzles, while this market might be small, for aficionados, they are likely to pay more and want to collect more of them over time. So high "share of wallet" in a small slice of pie

On 2) cost of product

The collapsible wheel I find difficult because it is such an expensive product and I don't know if there is that demand from the biking community. Also people who ride full size bikes everywhere might not actually need them to be collapsible for transportation.

On 3) scalability of production

In order for a product to really diffuse through the mass market, it also has to be produced widely. For the Stave puzzle, this might be challenging as everything is hand painted and cut. And yet, this is an integral part of the brand; perhaps they are not aiming to be mainstream, but to remain exclusive and collectible.

On 4) category changing

This was a hard one, but with Polytrack, the thing that stuck out for me was the fact that the times on the Polytrack were on the whole slower than those from other race surfaces. Despite the product potentially increasing the size of the spectacle and the longevity of the horses, for a sport that is centered around racing, the inability to break old records may become a factor that ultimately restricts growth.

Applying this to my branding lab product Laitive, I wonder if it is a product that might follow the more standard "tech" diffusion model. Early adopters might be those who have higher disposable income and want to learn more about their milk production. Overtime, and if we can get PCPs, and insurers on board, it may become more commonplace and might even be part of what is given to every new mother.  

[qzbranding]

AI in branding - principal agent dilemmas?

The thought of AI in branding and building a brand lead me to think a little bit about the principal-agent problem. I wonder if bad AI can actually be dilutive and harmful to your brand.

Because AI models (and especially LLM models) are large and expensive to train, more often than not, if you are implementing an AI in your interactions with your customer, you are implementing one that is based on a model you have not yourself built (unless you're Google, Meta  or OpenAI perhaps). But the issue with LLMs is that they are generative, and they will often come up with creative solutions that you might not expect. If you don't understand the inputs to the model and how it has been trained, or if you don't fine-tune it enough, it is possible that the responses or interactions your customers have with the AI could detract from the image or cognitive associations you have created for your brand.

Secondly, my personal biases towards AI are that they are there to make things simpler, and more convenient for the people using it. When it comes to brands, this might translate into me thinking that the brand doesn't care about my interaction with them, that they are happy to "outsource" my interaction with them to an AI.

I can obviously see how AI could make an interaction with a brand more seamless. I've seen it deployed on clothing websites where it helps you narrow down your fit, or answers your questions about returns, in a way that customer service agents can. But I think the success of its use depends also on what your brand is built on. For example, if you are Zappos, priding yourself on your great customer service, it is possible that a bad AI customer service agent could actually detract from your brand image. If what I am seeking from a brand as an actual connection, does AI actually detract from that by being an unwanted intermediary?

[qzbranding]

Cognitive brand associations: National cuisines

This week's class and reading made me think about cognitive brand associations between national cuisines. In particular, (and perhaps prompted by the reading on wine), I wanted to discuss the notion that European cuisines are seen as "high-brow" and certain other cuisines as "low brow"/ cheaper.

Ratings obviously play a bit of a role in building prestige of a cuisine. Of the 144 restaurants that have earned 3 Michelin stars, 62% of them are in Europe, 9% in the USA with 29% in Asia. I distinctly remember being really excited to eat at a 3 star Michelin restaurant in Paris, and being fully okay with the very expensive bill that came after. And yet, when I went to a Michelin starred restaurant in Singapore, I found myself more critical of the food I was eating, judging it for its value-for-money ratio.

As someone who has grown up eating a lot of good, cheap, Asian food, I find myself torn between the expectation that Asian food be cheap and delicious and the aspiration for my culture to be represented in a premium way.

In his book The Ethnic Restauranteur, the author (Krishnendu Ray) hypothesizes that the "more capital or military power a nation wields and the richer its emigrants are, the more likely its cuisine will command high menu prices". In a way, our perception of a cuisine has been nudged by social proof, the cuisine we see immigrants eating and making cheaply, we have continued to perceive as low brow. Even long after those original waves of immigration have passed, our perception of the cuisine could lead us to color our perception of cultures and stereotypes, perpetuating the cycle.

France has cultivated such a strong brand that they have managed to make even the simple somehow seem luxurious. Eggs? Fold them a particular way, and all of a sudden, I'm happy to fork out $25 for a mushroom omelette.  French toast was a cooking method to extend the life of stale bread, and now, it is a fancy brunch entrée. And yet, I only want to pay $5 for a breakfast scallion pancake and $3 for a steamed red bean bun (my preferred Chinese breakfast foods). The raw ingredient costs of both the French and Chinese breakfast don't differ much, but the cognitive association we have with French food (and perhaps just French words) increases our willingness to pay.

Dumplings and ravioli are also another key example. Imagine if I only got 4 dumplings for $30, I would be outraged because I would be expecting at least 12 if not more. And yet, I an often happy to receive 4-6 ravioli for that same price.

This exercise has made me realize that I should myself be more critical about my default expectations for cuisines. I shouldn't always expect to be able to get a bargain on Chinese food; instead, I should be proud when I see more high-end Asian establishments. Cognitive brand associations are there, but I think they should also be able to be challenged and changed. And when it comes to food, the proof really should be in the pudding.

[qzbranding]

Corona vs. Heineken case

Reading the Corona case I was struck by the difference in brand personas that Corona and Heineken had cultivated.

Heineken's brand wasn't super strong or articulated and as such, I feel like there weren't any strong associations with the brand created in the mind of the consumers. The company's positioning in the US felt a little reactionary to Corona's entrance, focusing on product quality to counter the rise of the "Mexican soda pop". However, this focus on the competition meant that there wasn't a strong memorable brand associated with Heineken. Unfortunately, this focus on quality at the expense of other beers also made the brand seem "arrogant", something that seems to have pervaded into company culture as well (with the executives noting that distributor survey results didn't seem to reconcile with what company internally believed).

Corona's brand in contrast, was always strongly associated with sun, beach and fun. They marketed this simply however, it really embodies a lifestyle that can be aspirational. This made the brand very memorable and tied it to an "alternate" lifestyle that could be appealing to younger drinkers. It is a brand that evokes an emotional response. The only issue here is however, is that the price of the beer may not specifically match with the "simple" image that they are trying to project.

This case to me highlighted the importance of linking advertising campaigns, that create a nice brand persona, to physical touchpoints. Corona excelled in this by choosing distributors that also matched with their goals. Heineken's strategy felt more disjointed.