Wednesday, September 25, 2013

Are Burger King’s New Healthier Potatoes An Oxymoron?

Health Fact: someone 25 years old today will live 2.5 additional healthier years than a person born 2 decades ago. The nuance in that statement is the “healthier” part. People have been living longer, but not necessarily healthier. Some of that “not necessarily healthier” part comes from our diets.

The Center for Disease Control and Prevention reports 35% of adults are obese, Whether you’re “obese” is dependent upon your height and something called a BMI, or Body Mass Index. It’s all very scientific, but the bottom line is most consumers know when they’re carrying around a few too many pounds, and that obesity is not a good thing. Obesity contributes to heart disease, stroke, type 2 diabetes and even certain cancers. And if you know obesity is linked to what you eat, you’d, well, watch what you eat. But we don’t, so as a brand and emotional engagement differentiator, certain brands have taken it upon themselves to position themselves as being more “healthy.” Or at least more helpful when it comes to being healthy. Fast food brands have done that for years.

According to our 2013 Customer Loyalty Engagement Index, here’s how major fast food brands are evaluated when it comes to being healthy by their own customers:

Subway 90%                       
McDonald’s 85%
Burger King 84%
Wendy’s 83%
KFC 80%

Subway has pretty much made health their brand positioning. Of course you have to be careful what you add to that basic tuna $5 foot long or the calories and fat add up pretty quickly, but OK, a relatively healthy perception. The other brands could use a “health” boost if they want to meet their customers’ expectations.

To that end, Burger King is introducing a French fry with 30 percent fewer calories and 40 percent less fat, called “Satisfries.” The new version will have 150 calories versus the 226 calories in their regular fries. Will this help? Well, it’s a start. Burger King has introduced juices and other better nutritional choices over the years, but it’s one thing to add them to the menu and another thing to get consumers to actually buy them. You can never be sure about that.

Of one thing we can be sure, though. Americans love their potatoes. Of the 45 pounds of vegetables the average American consumes each year about 29 pounds (65%) of that are accounted for by potatoes. Assuming your average annual potato consumption were confined to Burger King “Satisfries,” you’d be talking about 188 servings, representing a savings of 14,288 calories or 4.08 pounds fewer that you’d be carrying around. Again, it’s a start.

Of course primacy of product, how it actually tastes, and how the new offering is advertised and promoted will be the ultimate test of whether consumers are engaged with this new potato positioning. If you meet customer expectations, you are virtually guaranteed to succeed. If not, consumer will drop you like.  .  . well, you know that outcome.

Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, September 18, 2013

With Higher Marketplace Expectations, Apple Puts Up ‘On Sale’ Sign, RIM Puts Up 'For Sale’ Sign

You can’t help but notice the speed at which technological change moves these days, and no matter how fast, the difference between what you want and what you get. Technological change doesn’t move quite as fast as consumer expectations, but almost. But today “almost” isn’t good enough for consumers, and the difference between meeting expectations and almost meeting them is huge. Really huge. So different brands look to meet expectations in different ways

Take smartphones, a category where consumer expectations have moved up more than 28% over the past 4 years. What caused that jump? Well, different things. Some emotional, and some rational, but mostly emotional things. Things like a desire for greater speed so you can manage your life better, and more apps so you can have fun and manage your life at the same time. Or an interesting design and new technologies nobody else has, like biometrics, because you are an in-the-know trend leader, provides a pride of ownership, or just need really, really high levels of security, or think you do. Our surveys show that most smartphone brands have been able to keep up with these expectations on average about 10%, so there’s a gap between what consumers want and what brands provide and, thus, an opportunity for a smart brand that appreciates the difference. And that’s not all. When you factor in the more rational aspects of consumerism, like price and value, and perceived brand value and the brand’s ability to serve as a surrogate for added value, it’s even more different, and requires different brand management and strategies.

Apple, one of the category’s trendsetting leaders, has been able to keep up with consumer expectations by about 12%, so a little ahead of the pack and not bad when you remember that real consumer expectations are unconstrained by reality and don’t have to actually be worked out in a laboratory bunker someplace in Cupertino, CA. Anyway, to try and meet these different and growing expectations, Apple is trying something different. More accurately two “differents,” and just introduced two new iPhones – the 5S and 5C.

The new 5S has a faster processor and a fingerprint scanner, so that’s different. The 5C, on the other hand, is priced at $99 (with a service contract) and is pretty much a repackaged iPhone 5, but the lower pricing is a different strategy for Apple. Now, for all those consumers who have hungered for an Apple iPhone but couldn’t manage the dough, it’s currently On Sale.

It’s a different story for RIM’s Blackberry. Four years ago RIM was category leader with a 41% share of the OS market and more than 50% of the market for phones that could browse the web and send emails. Not anymore. They’ve put up a “For Sale” sign.

Why? Well, the short explanation is consumer delight turned to expectation. The longer explanation can be found in the smartphone emotional engagement assessments in our January 2013 Customer Loyalty Engagement Index. Blackberry showed up at the very bottom of the rankings and significantly lower than those very high expectations consumers held for the category Ideal. Their long-delayed Blackberry 10 didn’t do it for consumers, even with a Super Bowl commercial, and their loss of corporate and governmental clients didn’t help. The current Q2’13 estimates have Apple at a 40% share of the smartphone marketplace, Samsung with 25%, and HTC and Motorola at about 9% each. Although 9% is looking pretty good to RIM right about now -- that’s what they had last year. This year, alas, it’s about 3%, down again.

This July, RIM CEO, Thorsten Heins, told shareholders, “. . .from my personal experience visiting a lot of countries, it is a challenge in the U.S,” a kind-of corporate-speak for “darn all you U.S. consumers and your high expectations!” At the time Mr. Heins also indicated, “We will take this challenge on,” corporate-speak for “we have no idea what you expect.” So last month Blackberry hired J.P. Morgan Chase to explore “strategic alternatives,” which we’re pretty sure is corporate-speak for “we’re-for-sale-and-will-consider-any-reasonable-offer.” Companies like Lenovo, Microsoft, and Samsung have been mentioned in the press as potential buyers, but one has to wonder if RIM would be sold off for parts, or – given their exceptionally low levels of emotional brand engagement – whether Blackberry is so damaged it would end up having to be jettisoned. Remember Palm?

In all Brand Keys surveys, for all categories, customer expectations continue to rise as consumers continue to want more and more and more. Marketers need to pay particular attention to the incontrovertible fact that here’s a big difference between brands that are able to meet customer expectations, and those that can’t.

Kind of like the difference between being “On Sale” and “For Sale.”

Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, September 11, 2013

When It Comes To Fashion Brands, This Year Armani, Burberry, J. Crew Matter More, Ralph Lauren And Banana Republic A Little Less

It’s Fashion Week and the results of the 2013 Brand Keys Fashion Brand Index are in. And the survey says.  .  . fashion brand importance is up again.

Sure, consumers need to like what they’re going to wear, so design and style is important. But when it comes to establishing a real emotional connection with the customer, you can’t beat brand. In the past decade, brand importance has increased tenfold for fashion consumers. Currently 30% of 7,500 consumers polled feel brand is more/much more important in the engagement (and purchase) process.

And while it’s true consumers are still being cautious about spending, that very reality is what’s driving them into the arms of true brands. The more considered a purchase, the greater the role a strong brand plays in the decision-making process, especially true in the very personal category of fashion, where the brand is the very source for emotional engagement. And ­– as the past five years have proven in the aisles of department and apparel specialty stores – brand can act as a surrogate for added-value engendering positive behavior.

The annual survey of 7,500 respondents, 50:50 Men/Women, aged 21 to 65, represents nearly 20% of the Customer Loyalty Engagement Index participants who are first asked to indicate the importance to them personally of fashion brands, then, on an unaided basis, are asked which brands are more important to them. This year’s Fashion Brand Index findings demonstrate the continuing shared space between luxury and leisure apparel brands, with fashion brands like Armani, Burberry, and YSL all moving up from an already respectable showing in the top-15, along with leisure brands like Nike, J. Crew, and Levis.

The iconic Ralph Lauren has always been our “gold standard” when it came to fashion brands, but this year it seems as if leisure brands have taken on greater import for men, and more haute couture brands for women, proving that done correctly, emotional brand engagement can be a powerful approach to meaningfully connect with consumers, and not the purview of only one or two brands. Ralph Lauren/Polo moved from last year’s #1 spot among women to #6 this year just behind Chanel, Armani, Favorite Sports Team, YSL and Burberry, but only 1 spot down on the men’s list, from #3 to #4, with Favorite Sports Team, Nike, and Armani in the 1, 2, and 3 spots respectively.
Our Fashion 15 are the top-15 fashion brands ranked on the basis of the number of unaided brand mentions (%) received from consumers.

  1. Favorite Sports Team 39%
  2. Armani 38%
  3. Nike 35%
  4. Ralph Lauren/Polo 34%
  5. Burberry 30%
  6. J. Crew 29%
  7. Calvin Klein 27%
  8. Chanel 25%
  9. Banana Republic/YSL 23%
  10. Levi’s 22%
  11. Hilfiger 21%
  12. Coach 20%
  13. Tom Ford/Dior 19%
  14. Victoria’s Secret/GAP 15%
  15. Brooks Brothers/Tory Burch/Kate Spade 14%

The rising importance of fashion brands generally, and Fashion 15 brands specifically, indicates that value – or more specifically, the perception of value-via-brand – is of much greater import to consumers, and ultimately, to the success of fashion brands. So it’s not surprising that consumers are looking to the brands – and the emotional engagement brands can create – to make a difference, to meet their expectations, and to delight. In the context of fashion, value isn’t just what consumers’ dollars buy, it’s how fashion fits consumers’ lifestyle, self-perception, and expectations, and how well the brand actually engages.

The retail marketplace already overflows with an excess of me-too products and designs, congruous distribution, and bargain basement pricing when things slow down. Given that reality, how many 100%-cotton black t-shirts do fashion brands think a consumer will buy, and why would they pay $75 when they could pay $15? The answer to those questions ultimately comes down to brand.

Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Tuesday, September 03, 2013

Acquisition Of Nokia Phones Adds New Anti-Google Weapons to Microsoft Arms Race

Outgoing Microsoft CEO Steve Ballmer was quoted, “By the early part of this year it was clear to me that perhaps acquisition would be a way to accelerate.” He wasn’t specific as to what they were accelerating, but it seems reasonable to presume that this is an acceleration of growth and, thus, Microsoft’s marketing war with Google.

Here’s how things match up in the IT weapons race, including new “ordinance” Microsoft secures via the acquisition of the Nokia Devices and Services business and their related patents. You’ll all have your own opinions, of course, but take a look and see, which you think, will ultimately conquer the other – and in which sectors?

Microsoft                                 Google

Bing search                              Google search
SkyDrive                                   Google cloud storage
Internet Explorer                       Chrome
Azure                                        Google Cloud
Windows                                   Android
Microsoft Office                        Google Docs
Nokia Lumina phones              Motorola phones
Lumina-ARM tablets                Nexus tablets
Nokia Mapping                        Google Maps

It was Bertrand Russell who noted that “War does not determine who is right – only who is left.” And given that Microsoft’s strategy for combatting competitors has been most focused and effective against single competitors (including robust challengers like Netscape and Lotus), we’ll have to wait see how these battles play out in the near-term.

And, ultimately, who is left.

Connect with Robert on LinkedIn.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.