Class to Mass, a luxury brand degradation tale

Having spent a great deal of my career in brand building and marketing, I've learned that there are some steadfast rules when it comes to creating a brand, or at least I thought so. Over the last decade, there's been a shift; it seems as though the rules no longer apply.

I suppose what astonishes me is the success of some brands - they seem to be flourishing by defying the very definition of themselves.

Good brands are born out of ingenuity, design and quality - I say they are born, but we all know it's more scientific than that, perhaps created, invented, formulated and planned would be more apropos. Being unique or the best at something often times is enough of a foundation for a good brand and that's where the planning begins. In creating a business, one ensures there is a demand, this is not always the case for a brand - some of the best brands in the world were the first of their kind... they created the category.

A good brand creates demand. A luxury brand creates more than that.

I have done some work on luxury brands, a category unto itself - marketed much differently than any other brands. Luxury brands introduce a complexity of psychological elements such as conspicuous and invidious consumption, aspirational marketing and status. It's all very heady, actually, as a marketer, it draws you in until it's all quite obvious as to how it works.

Never have the rules of marketing applied more than in luxury brand marketing. You used to be able to tell a luxury brand by the sheer fact that it was exclusive and inaccessible to the average consumer... inaccessible, by location and by price.

A true luxury brand should be something that is unattainable to all but a few that can afford it, all others aspire to own these products. This is what's called 'craving', a mindset luxury marketers try to create amongst consumers that can't purchase their product. Craving a luxury brand furthers the desire amongst other consumers. The more consumers crave a brand that they can't have the more that brand is elevated to a sought-after luxury brand.

A very good example of this is Ferrari; everyone wants one, people wear their products, play with their toys and hang their posters - but most people can't afford one, will never afford one... ever. Does this stop the craving? Absolutely not, millions of people having aspirations to own one is exactly what causes those who can afford one to purchase one. There is an appreciation of quality and design that transcends ownership but is inherent in the brand. This means that ownership of a Ferrari is really telling people that you are special - if for the only reason, because you can afford a Ferrari.

So, with that rule firmly embossed into the fabric of luxury branding, why are so many luxury products ignoring it? And, how do they continue to be successful at it? Are they still true luxury brands at all?

We've seen a shift from these luxury brands being unattainable to being not only being attainable, but on every corner. There was a time that you used to have to go to Paris to buy Louis Vuitton and New York to buy a Coach handbag. Now, luxury retail has gone from the manufacturer with a flagship location to select locations in wealthy shopping areas to the mass market by way of strip malls and shopping centres everywhere. You can get a Coach handbag as easily as a Starbucks coffee, and for nearly the same price. Coach has made their product more accessible than many lesser-priced brands.

Finding luxury brands is more common than uncommon. Let me remind you that being common is not what makes a luxury brand. Yet, people are still buying them.

Rules, schmules.

The most common offender of this rule seems to be in fashion brands such as Coach, Burberry, Lush, Armani, TAG Hauer, Versacci, Luis Vuitton, Persol, Mont Blanc, Tiffany, Fendi, Chanel, Omega,... once all highly praised for their quality, craftsmanship and/or crave factor are now available in abundance in nearly every local mall. Some still hold onto the original brand attributes such as quality, some have even gotten even better in craftsmanship (ie. Lamborghini) but this class to mass shift has really taken the wind out of the exclusive sails.

Words like proletarian, erosion and dilution all come to mind. If everything is special, nothing is special. I mean, if Ferrari made a new model that sold for $25,000, they could sell millions of them. But, they would likely cease to sell $500,000 models as their brand would be eroded and diluted to the point where nobody would notice them, nor care about them. Ferrari's would become commonplace, nobody 'craves' commonplace, especially not commoners.

You no longer have to go to Paris, London, New York, Beverly Hills or Hong Kong. What was once unattainable for most is now commonplace, yet people are still falling over themselves, opening their faux Gucci wallets to spend excess amounts on items that are no longer considered unique by even the most generous of standards.

Luxury goods promote ones status, purchasing them validates the self importance of the consumer. However, some brands are so 'in your face' and gaudy their only purpose is to tell people you have that brand. (Thinking Ed Hardy now). This leads me to believe purchasing these products is more about keeping up with the Jones' and less to do with the status the brands bring. This is true invidious consumption and this is really disheartening as it speaks to just how shallow and selfish we have become as a society.

Quality, craftsmanship and price be dammned, my neighbor has it; I want it too.

As luxury brands move from class to mass, it will open the space for more specialized, even more exclusive brands to fill the void. I wouldn't be caught dead in a Ferrari if there were 4 others on the block... which is why the Bugatti Veyron makes so much sense. A whole new level of extravagant, lavish, creative and remarkable products will enter the 'exclusive' void and begin this whole process once again.

It's the circle of life - start saving up now.

Watch for my upcoming article: Brand Whores; Harley Davidson finally draws the line on logo placement... not.

Branding Stories

Every brand has a story. Many marketing professionals, including yours truly, believe that communicating this story will lead to a brands success. But, where does the story come from and what exactly is the story?

Here are my quick thoughts on to identify your brand story:

1. History. Your brands history is a story in itself; how did your brand begin, what changes were made along the way, how did your brand evolve - these are all questions you can answer to form the history of your brand and if the history is compelling, can differentiate your brand from others. Brands with good history stories that come to mind are: Nike, Goodyear, Safeway, Ford, Ikea, 3M, Ferrari, Hewlett-Packard, Zippo, Harley Davidson, and Coca Cola. There are many with great brand histories - these companies do a good job of communicating their past as a cornerstone to their brand offering. Even if you are relatively new, documenting acheivements and turning points in your brand, demonstrates history.

2. Beliefs. Your brands beliefs are a story; what is important to your brand, what drives your brand forward, what does your brand strive for - these are questions you can answer to form the beliefs of your brand and lets consumers know what you stand for. Brands with strong beliefs are: Apple, Hewlet-Packard and Sony (Innovation), The Body Shoppe (Natural), Trader Joe's (Fun), Ferrari and Nike (Performance), Rolex (Quality), Bentley (Craftsmanship), Walmart (Cheap). No matter what your belief is, you need to communicate it and be known by it. Consistency in communicating this story helps to solidify what your brand stands for with consumers. A brands beliefs are typically tied to a genuine passion of the company founder or leader.

3. Personality. Your brands personality is an evolving story; how does your brand dress, what mood is your brand, is your brand friendly, is your brand assertive, is your brand trusting, is your brand open to dialogue, is your brand unique - these are all questions that you can answer in the look and feel of your brands marketing materials. Brands that have unquestionable personality are: Apple, Ikea, Google, Hasbro, Disney, Swatch, Kraft, Kellogg's, Yamaha. The personality of your brand should instantly instill feeling and emotion towards your brand. The look and feel or personality of your brand should support and act as conduit for your brands beliefs and history. The colours, fonts, style, copy, imagery, sound and wordmark should all work together to communicate your brand personality. The personality doesn't happen by chance, it should be carefully and strategically designed by a professional.

Communicating these stories can be done several different ways - I can cover that another day though... for now, start thinking about your history, beliefs and personality. These three brand story points will also help to define your brand motto, and vice versa.

There are several ways to approach your brand story, these, in my opinion are the three most important ones and are the base for all others.

Mmmm.... Peanut Butter! Part 2

To understate the fact, I enjoy peanut butter, maybe more than the average person and I admit this with a mix of pride and some reservedness as there is still some stigma attached to any addiction.

Peanut butter is not my only love. I also love radio.

Radio's early days were fraught with experimentation leading to it's primary reason for existence, entertainment. I'm excluding it's other uses like news and communication because what I love about radio is it's awesomeness as an entertainment vehicle.

The early part of last century saw radio becoming the central component in a home for entertainment. Every home was plugged in and listening to their favourite shows acted out on the airwaves. Some of these shows are still played by a few radio stations and many of these are still more entertaining than TV. You get to combine the use of your imagination to visualize the happenings without the awkwardness of having to read a book.

Back then, radio was the hub. And for a while it stayed that way until television showed us visually what was happening.

In a way, this 'hub' style entertainment is exactly what Apple is trying to recreate with iTunes. For those that are plugged in and using iTunes to it's max, you know that you need not go any further for any entertainment - rent movies, download courses, music, TV shows... and sync your communications. Early adopters are in love with this, but it's still got a long ways to go for mass acceptance and use.

Growing up, there was only one radio station in town. There were actually 6 stations but with 1140 CKXL on dial nobody listened to anything else. XL as it was affectionately termed had the highest ratings of any station in North America as it related to the population, or market share. It was the king of the airways and enjoyed that spot for well over 10 years.

What was XL's secret? Well, they were a popular music, AM station, but they weren't confined to a single genre - they played everything from country, pop and disco to heavy rock and parody songs all in the same hour. Bottom line was they just played good music, they didn't confine themselves to a restricted playlist of a single genre. They had great on air talent and great marketing, they were involved in the community and didn't take their success for granted (not outwardly anyways).

So, what ended their reign? There were a few factors, first and biggest was the advent of AOR (album oriented rock) which in turn popularized FM radio - a much better platform for music listening (hurray for stereo!) - this pretty much ended most AM music stations throughout North America. The second was the increase of competitors (more stations) and the third was the poaching of their much loved on-air talent. With more choice in the market and B-sides to listen to, the audience was fragmented and diluted. They still had a core listenership, but there was just too many pieces of the Calgary radio pie and everyone was fighting for the extra slice.

Now, I'm not an expert in the radio or peanut butter business, but I did spend a few years working in radio and a few years working in the food industry. So, my insight is perhaps a little broader (or narrower) than most.

What I can say is that radio is a funny business, and I mean funny peculiar, not funny haha.

Radio and peanut butter react to market changes in a similar manner in that they change their product without considering what made their product popular in the first place. However, in the case of peanut butter, changes usually are made slowly, in increments over long periods of time, whereas radio changes are usually done overnight and are very dramatic.

Some of these changes appear to be knee jerk reactions, panic decisions that are based on some numbers and not on what the products or core values are.

In Calgary, some radio stations change their formats more frequently than I change my Facebook status. The decision to change a station format is generally based on audience loyalty (or lack thereof) which is determined by the measuring stick called BBM. Obviously, ratings are important as they determine advertising rates and sales - which is why stations rely so heavily on their verdict.

In my opinion, the method of gathering data by BBM is dated and renders inaccurate results of the actual market. I've participated in these surveys for TV and there is no accurate way of monitoring exact use unless it's electronic and synced to the device that is being monitored. At best it is a partial sampling of some of the listeners in a market.

The only saving grace is that BBM is what all stations use, so they're all playing with the same deck of marked cards. The BBM is comprised of surveys filled out by listeners who jot down what they are listening to in a diary... yeah, by hand - you can imagine how accurate this is. This type of survey is great if it's 1972... hopefully there's some better way to accurately measure listening habits of people, what with the interwebs and such. In fact, I believe an electronic version is in the works, and I trust BBM is leading the charge in this so they can remain the leading authority on all radio ratings, as they do have a great reputation in the industry.

So, radio stations use the BBM reports to measure their market share and make a lot of their programming decisions based on the findings of these reports.

Here's how it plays out:

About two years ago, a new station starts up and promotes themselves as Calgary's newest music source, their format, meaning what their positioning statement and their playlist is comprised of is considered 'good music'. And, after 3 or 4 BBM reports with no measurable impact (no upward swing in audience) they revise their format and try to target a niche that is open, they call this new format 'classic alternative'. For 1 maybe 2 BBM reports, they operate under this clever new format (if you are an avid music listener you may consider this format a bit limiting and somewhat laughable) and realize that it isn't helping so they change their format again, this time a complete change up, to 'Top 40' - which these days is mostly pop, dance and hip-hop.

So, what this means is that for about 2 years they hooked listeners with the promise of one type of music (good music), slightly modified it in hopes to increase their share of the market and then completely changed their offering.

In measuring the performance of a radio station, Average Quarterly Hour (AQH) ratings are important, but so is loyalty (that's where most of the AQH comes from). Changing formats does nothing to increase loyalty, in fact is has the exact opposite effect. The listeners that were happy listening to Green Day and Pearl Jam are for sure not tuning in now that Britney Spears and Fergie are playing. This means that they are starting at ground zero with their audience base and discarded the loyal listeners they earned in the process.

I genuinely feel sorry for the marketing people at these stations, for months they work on branding and positioning a station as THE place to be for XXX then after two bad BBM reports, they are repositioning to be YYY.

This is a black hole to which no amount of marketing can escape.

It happens all the time in radio. And, it's the stations that consistently change their formats that are always the ones struggling to keep up in the ratings game.

Marketing and brand building comes down to a being authentic, being true to the brand and what it stands for. And, if it's a good idea don't waiver - don't stray from your brand motto, you can make subtle changes and modifications to keep up with the market, but never make and about face change - that is almost certain death for a brand. (insert link to new Coke here)

Some good examples of local radio stations that have stuck to their guns over the years and remain successful because of it are as follows:

CJAY 92 - Classic Rock and has been for a couple of decades - they continue to be in the top half of the ratings game year after year. Many stations have tried to knock them off their perch, but have given up after a few bad BBM's and changed their format - this only strengthens the loyalty of listeners to CJAY.

COUNTRY 105 - Western Canada's country music powerhouse, not because they're the only country station, quite the contrary, it's because they have remained true to their original vision - sure some of the announcers have changed and the playlist has adapted over the years with the whole country music genre, but it's still the same great brand as it always was.

CHQR 770 AM - Calgary's talk radio station and has been for some 18 years, the talk format is definitely the best use of AM radio. The format of a talk radio station is very similar to a TV station in that people will tune into their show, not necessarily the station - this helps and hurts the ratings - but they've got a huge loyal audience.

Kudos to these three local stations for staying true to their brand.

When you think about it, who would want to invest any time in becoming a fan of a new radio station when you know that the first sign of a ratings drop they will change format? Radio is no different than any other brand, make adjustments to your current product, don't drop it and try to reinvent yourself unless the brand idea is no longer relevant (like a disco station would have been in 1982).

When it comes right down to it, commercial radio is no different than any other product in the grocery aisle. You build a brand through loyalty and delivering on peoples expectations consistently. Sure change is inevitable, but it can't stray from what your core values are as a brand. Be true to your brand motto always.

I still love peanut butter and I still love radio, especially now with Satellite Radio.

These days I listen to Little Steven's Underground Garage on Sirius - with DJ's like Little Steven and Andrew Loog Oldham you are treated to some great inside stories and some 10 minute intro's into songs - it's back to being an entertainment source for me and I can't wait to turn on the radio to hear what's going on...