How deep is your trust? - An Attempt to Question Brand Loyalty
Divya Gautam XLRI
Brand loyalty is often perceived as consumer’s trust in a brand, which makes them repeatedly purchase or consume the same good or service, effectively ignoring competitors in the brand’s domain. A question that arises is what establishes this trust? The commonplace, almost obvious answer, is the first P of Marketing- product. If the product is unique, lives up to expectations (or maybe surpasses them), and is readily available, a consumer would avail that product again and again, and the marketing professionals would say that brand loyalty has been established. We’ve locked in a consumer, or thousands of them, and they’re here to stay, because they love our product, and we ensure that our product is excellent. But let’s take a closer look at the process. Let’s assume, for a minute, that the answer to the pertinent question isn’t the product. Well, then what could it be? In the early stages of a consumer-brand relationship, the consumer knows little to nothing about the product and even lesser about the brand, the vision, mission, and all the other things that brand proclaims to be their defining traits. Yet, the consumer buys the product. Why? Well, there isn’t a definitive answer. It could be that the consumer has had this product recommended to him/her, or he wants to ‘try it out’ due to recent aggressive advertisement campaigns, or in rare cases, the company had launched a guerilla marketing campaign that was highly interactive, and the consumer just can’t get that experience out of his head. (Bounty and Colgate have had such campaigns be quite successful.) In either case, the potential customer becomes a consumer, he/she buys the product, and the first step towards the relationship has been taken. Now, the product is used by the consumer, and let’s make another assumption here- the product is satisfactory, it fulfills the need it was bought for, the consumer thinks to himself or herself “money well spent” and moves on.
Now, the next time the consumer wants to buy a product to fulfill the same need, he/ she tends to buy the same product again. This behavior pattern can be explained by two concepts of behavioral economics- loss aversion and adherence to default. Loss aversion, as succinctly defined by Nobel laureate Daniel Kahneman is the idea that “losses loom larger than equivalent gains.” In this scenario, one would be averse to buying a new product and risk losing that money if the product turns out to be unsatisfactory. The equivalent gain of previously having consumed a good product wouldn’t be etched into the mind of a consumer, but this loss associated with trying out something new would be. The second idea is the human tendency to not deviate from the default. This can be thought of as a kind of decision inertia- people are accustomed to taking certain decisions that have, in the past, proven to have had positive consequences. Thus, if a product has proved its mettle in the past, why not just buy it again? It is important to note here, that the repeat purchase may not be because of the product’s features but because of this behavioral tendency to go with a proven decision. There may actually exist competitor products better suited to the consumer’s needs, but decision inertia can make consumers blind or almost habituated to make the same decision of buying that product again. They wouldn’t even think of considering the other options because the default is the previous decision, which proved to be a good one. Now that they’ve bought the product again, essentially, they’ve just traversed the same decision and reward pathway as last time. From a neurological perspective, they’ve strengthened the synaptic network that led them to this decision, further increasing the chance of it recurring. And so, the cycle most likely will repeat.
At first glance, it looks like brand loyalty has been established. And one could argue that as per the definition, the outcome of return buyers has occurred. But if we ask companies what they imagine to be a brand loyal customer, their description usually goes along the lines of “a consumer who believes in our vision, our values as a brand and of course, our product”. There exists a discord here between the customer’s view and the company’s. While there do exist companies like Starbucks or Apple that have a large truly brand loyal customer base, in many industries, there exists severe competition, lesser product differentiation, and most customers are coming back due to their behavioral tendencies more than as an exhibition of trust and loyalty. It may be crude to use the phrase ‘a slave to habit,’ but taking a hard look at the chaos that underlies consumer behavior, one could attest many patterns to this phrase. Coming back to the question asked in the beginning, what establishes this trust? While a brand may be the reason to choose something, is it enough to be a reason to return? The short answer, in my opinion, is that this trust depends on a lot of things besides just the product. The long answer could contain a lot of reasons, from promotion to competitive pricing, to loyalty reward
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Marque - The Marketing club, IIM Rohtak programs, to behavioral tendencies. It would be myopic and specious, from a company’s perspective, to attribute returning customers to the successful establishment of brand loyalty, without first taking a closer look.
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Cause marketing strategies can connect billions of consumers to Mrinal Chopra your brand IMI, New Delhi Marketing these days is not just about spreading the word about your new product or a brand. Companies today realize the importance of establishing a deep-rooted connection with customers in order to inculcate a sense of brand loyalty and spread a valuable positive word of mouth. Nike intelligently used its tagline “Just do it” to connect to what everyone on this planet can relate to – “dreams”. From subjects relating to women empowerment, the disabled to mental depression, Nike is positioning itself as a brand that empathizes with social issues and cleverly links it with its sports gear as a step towards achieving those dreams. Cause Marketing: Just Do It? The above question can be answered in some key steps taken by Nike in this direction The success of the “If you let me play” campaign “If you let me play” – these were the words that shook the world of sports when Nike came up with their influential campaign focusing on the often-neglected another half of the sports world – women. The poignant 30-second ad, which got aired way back in 1995, became one of the most critically acclaimed ads of the times. Before 1995, Nike was using print media as their medium to reach out to women, but with a change in lifestyle and preferences of women, more and more women were resorting to sports, breaking age-old stereotypes. This was opening a new market for Nike – one that it needed to tap immediately. The various campaigns post this:‘If you let me play’, ‘Just do it,’ or the recently launched ‘Dream Crazier’ campaign helped Nike become a sports brand for women while also retaining its image as an ‘Alpha Male sports brand’. Vision and Mission Nike’s’ mission clearly shows its intention. While Inspiration and Innovation have been their pillars of strength, one of the most important messages of their mission lies in the asterisk mark over the word Athlete*. This mark was added by Nike’s co-founder Bill Bowerman with a strong message – “If you have
a body, you are an athlete”. The message showcased Nike’s interest in being the sports brand for everyone, from a seasoned player to an amateur, from men to women. Further, Nike’s campaigns have been guided by one of their key vision values: Connectivity. Through connectivity, they want to ensure every customer’s personal relationship with the brand. Right from the beginning, when slowly Nike started to observe success from its “If you let me play” campaign, this combined with their vision and mission of the company, they had to formulate a strategy which upholds its vision and mission and also connect with the consumers thus Cause-related Marketing was an effective way to move forward. The Dream Crazy and crazier campaigns The dream crazy campaign was designed to tell stories about athletes who dreamt big and made it big. The ads instantly connected with the viewers who were not aware of the humongous struggle that players went through. The ads were designed in such a way that the video is narrated by the protagonist of the ad and with a melancholy piano sound. It was designed to strike a chord with the consumers and let the audience connect the story of the athlete with their own future or past experiences. The athletes in the ads were mostly minorities in American society, such as Migrant Americans, religious minorities, and the disabled. If we consider the Marketing relevance of the campaigns, we can clearly observe the positioning that Nike wants to achieve. It wants people to equate achieving dreams to its products; also, by focusing on the minorities of the society, the campaign was triumphant in targeting a hitherto untapped segment of the market. Whether it was Simone Biles, Ibtihaj Muhammad, Chloe Kim, members of the US Women’s National
Marque - The Marketing club, IIM Rohtak , Chloe Kim, members of the US Women’s National Soccer Team, or Serena Williams, Nike was successful in connecting with the masses as a brand which identifies with the same values that a person in the 21st century believes. Intended Segmentation of the campaign Market segmentation as we all know can be done based on geographic, demographic, psychographic and behavioral variables and large companies like Nike try to apply a strategy that uses a mix of all the above variables and sub-variables as mentioned below.
Impact on the positioning of Nike Through its dream crazy campaign, NIKE had also generated a lot of hate and support towards the brand at the same time. Initially, when it started with the dream crazy campaign starring Colin Kaepernick, who is the former NFL player, President Trump blasted Nike on Twitter and called attention to criticism by consumers. In addition, several consumers have taken to social media to share images of burning Nike products and calling for a boycott of the brand.
The dream crazy ads particularly focused on those segments of the society who were particularly fitness or sports-driven and wanted to start somewhere. The “Dream crazier” ads featuring women athletes was cleverly intended to encourage more and more women in the society to buy Nike shoes and start their journey towards fitness or athletic excellence. Nike which is a niche brand for sports enthusiasts with especially 55% of the customers being men wanted to appeal to the emerging 21st segments of the society and the dream crazy campaign was an opportunity to emotionally connect with them. Targeting of Campaign Nike always targeted fitness enthusiasts and athletes and designed campaigns accordingly. The dream crazy campaign is an attempt to expand the target markets to particular segments of the women consumers, the specially-abled and anyone who is planning to start an athletic journey. Its campaigns use aggressive psychological tactics by showing successful stories and heart wrenching struggles of athletes to connect with the customers. Its target segment mainly ranges between the ages of 11 years to 45 years who in this era are being more and more fitness-oriented and are sports enthusiast
Nike’s decision to quote controversies does not come as a surprise for those familiar with its history. The brand’s support for its other athletes, such as Michael Jordan, Ibtihaj Muhammad, and Tiger Woods, all came under fire at the time of selection. The brand remains unapologetic about the athletes it decides to support and about these decisions and their results. However, the Dream Crazier campaign which is the successor for the Dream Crazy campaign portrayed an altogether different image in front of its viewers. Dream crazier was premiered during the Oscars and soon went viral. After just one day, the commercial garnered over 6 million views on YouTube and more than 28 million on Twitter. Most mentions were on Twitter, followed by Web and Facebook, and the overall reception was predominantly positive. The total number of mentions of the brand has also increased. After the release of the Dream crazier commercial, the overall sentiment of “Nike” mentions has become very positive. Their ads are often described as “empowering” and “a must-watch”. Reportedly, Nike earned 6 billion dollars off the Kaepernick commercial, even after the ad caused people to boycott the brand. Nike’s 31% increase in sales suggested that people were driven to act and buy more Nike products. Perhaps even more import-
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Marque - The Marketing club, IIM Rohtak -tant, it was Nike’s most important market segments, Millennials, and Generation Z, that reacted the most positively. Overall Impact •In a less-than-24-hour window after the releases of dream Crazy ad, one group estimates Nike already received more than $43 million worth of media exposure, much of that positive. •Although this ad had its fair share of skeptics, online sales of Nike products soared by 31% across America during the weekend of its premiere (Edison Trends, 2018). •Traditionally liberal cities, such as Seattle and San Jose saw the biggest spike in sales with 20% and 14%, respectively. Simultaneously, republican cities, particularly those in the state of Texas (e.g., Fort Worth, Dallas) experienced a drop in sales of roughly the same caliber (~20%; Edison Trends, 2018). Munoz (2019) claims that these sales statistics are primarily reflective of Nike’s core consumer base — ethnic minorities between the ages of 18 and 34. •Nike’s stock price fell by 3.0% within three days of Dream Crazy’s premiere (Linnane, 2018), with many ‘market experts’ expecting this price to free fall (Munoz, 2019). The following week, however, Nike’s stock price rose an all-time high of $83.90 per share on a stock; a 31% increase based on Nike’s average price in 2019, much of which may be attributed the media exposure (i.e., $163 million USD) generated by Dream Crazy (Munoz, 2019). •Dream Crazy’s approval rating soared from 38% to 78% between the first and second week of its release (Linnane, 2018). •The summation of the processes after Dream Crazy ad prompted a $6 billion increase to Nike’s brand value in 2018. Conclusion Every company has a marketing strategy to improve its sales and brand value for its product but in the 21st century, it is carefully planned marketing strategies like Nike dream crazy campaigns that teach us how to develop a connect with the consumers. Now a days, Marketers are often treating their brands more and more like an actual person and giving it a personality that the customers love but before going this direction, it is important to decide whether their company has the resources to work with the complexity that comes with such cause-related campaigns and face possible criticism like Nike did.
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How is Experiential Marketing shaping Customer Interaction and the Market? Parul Mehta MDI Gurgaon Marketing refers to activities undertaken by any company to communicate with the customers and consumers, to create value, to satisfy their needs and wants, to promote the buying or selling of a product or service. There are different types of trends developing in the Marketing sector, like Social Media Marketing, Experiential Marketing, Influential Marketing, etc. Experiential Marketing, also known as “Engagement Marketing,” is a kind of marketing strategy that encourages the audience to interact with industry and their products in a real-world or a real-time situation. Reference to the few articles: •95% of marketers think that live events and experiential programs give them an opportunity to form in-person connections (Endless, 2017). •77% of marketers use experiential marketing and applications as a core part of their advertising strategy (EventTrack, 2016). •65% of brands say those live events, exhibitions, and experiential marketing programs are directly related to sales (EventMarketer, 2019). This type of marketing focuses on getting the consumer to experience with the brand. Most of the
advertisements as the video –spots and the radio-jingles or the hoarding as the digital or the flex give an edge to the brand in terms of the awareness within the target audience; The Social Media Marketing also share thoughts or feedbacks in terms of experience or rating; But Experiential Marketing builds memories & involvement with the customers. Experiential marketing is classically a real-life event that the consumer or customer can participate in activities with brand/ product. Various Famous Examples of the Experiential Marketing are quoted as below; 1. Volkswagen – “The Piano Staircase” The experiential Marketing does not always have to involve the product or showcase its utilization. 2. Gatorade Combine Case Study Experiential marketing may be more impactful when it offers experience with the product and actual value to the consumer, whether it is a free product
Marque - The Marketing club, IIM Rohtak value to the consumer, whether it is a free product or in sampling formats or as a newfound knowledge booklet. 3. Aston Martin On Ice Case Study The company may create an exclusive experiential experience related to the product, and engaging the consumers & customers via the internet leads to a strong social media campaign and connection. The strategy can still reach a wide audience and achieve the lift in brand equity that the company was aiming for. •Doc McStuffin’s Check-Up Case Study Different experiential campaigns are created for different segments. Doc McStuffin’s designed this activity for children. The goal is to make spread happiness and to build a positive relationship with the parents & children. Experiential marketing spending trend in the United States in 2017 and 2018 In 2018, experiential marketing spending in the United States had reached to 62.29 billion U.S. dollars, which was 57.7 billion dollars in 2017. In view of the above, it may be concluded as the Experiential Marketing stimulates the sentiments and generates an emotional connect with a Company, Brand, or a product which drives the brand loyalty, sales and Return on investment (RoI).
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The campaign will not only resonate with commuters in big cities where bikes help navigate through narrow lanes and conges an affordable and more readily-available alternative to cars and autos. f
#BUZZFEED
Influencer marketing will be a $15 billion industry by 2022 As influencers become more plentiful and proven, brand dollars have flooded into the space. Brands are set to spend up to $15 billion on influencer marketing by 2022, per Business Insider Intelligence estimates, based on Mediakix data. Partnering with influencers is already familiar to many brands, but the market is undergoing constant change: Brands must continually evolve their strategies accordingly. The market is rapidly expanding as influencer types have proliferated, with influencers filling every conceivable niche and sub-niche interest. Each of these types offer distinct benefits and tradeoffs for brands. In addition to celebrities with massive followings like Kim Kardashian West and Kylie Jenner, brands are increasingly tapping other key influencer types, including micro- and nano influencers, kid influencers , gaming influencers, and virtual (computer-generated) influencers. As social media becomes more entrenched in people’s lives and takes on more functional uses beyond communication, like shopping, the role of influencers is set to only grow.
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sted roads but also find special relevance across small towns and cities in India where two-wheelers are ubiquitous and are
The Last Mile: Volkswagen Opens Up 2020 With Saying Farewell To The Dear Volkswagen in July announced that the Beetle would drive off into the sunset after 2019, this time for good. While there’s been speculation that the iconic nameplate might return as an affordable EV based on Volkswagen Group’s MEB modular platform for battery-electric cars, VW has put a rest to those rumors with its animated short film “The Last Mile.” It aired during “Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest” show. The short film tells the story of a man whose major life events—from childhood to elderly age—are shaped and influenced by the presence of a Beetle, in this case the original icon. There was also the New Beetle launched in 1998 and its successor introduced in 2012. At the end of the clip, there’s a glimpse of the ID 4, a battery-electric crossover SUV due in 2020—a “people’s car” for a new era. “The Beetle is easily one of the most recognizable cars in the history of automobiles,” said Saad Chehab, senior vice president, VW brand marketing. “We are proud of our past but our eye is on the future, hence our choice of New Year’s Eve to hint at our upcoming long-range
After TikTok, Bytedance targets Indian music lovers with Resso
As music consumption in India undergoes a gradual evolution, China-based Bytedance, which has tasted the success with its short video-making app TikTok among the youth in the country, is now ready to take on players like Spotify, Gaana, Wynk, Apple Musia and others with Resso. Available in Beta and currently being tested in India and Indonesia, the music streaming service Resso has been downloaded by nearly 100,000 times, according to data from app analytics firm Sensor Tower. The app it is developed by Moon Video Inc. and has reportedly inked deals with Indian labels like T-Series and Times Music. According to GSMArena, the company is working on expanding its global portfolio with larger players like Universal Music Group and Sony Music Entertainment. In an aggressive push, Resso comes as a free version with ads and a paid version where you need to shell out Rs 119 a month.
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#BUZZFEED
Uber to roll out PIN verification, RideCheck for enhanced user safety
Ride hailing platform Uber on Thursday said it will roll out new safety features, including a PIN verification for starting trips and RideCheck for long, unexpected stops, for users in India.Interestingly, Uber’s rival Ola already offer some of these features on its platform. It launched the OTP feature in 2017, while Ola Guardian feature was launched in September 2018 and recently in over 16 cities globally. Through ‘Guardian’, Ola tracks all on-going trips by analysing ride indicators like route deviations, unexpected and midway stops. Based on the indicators and time of travel, Ola’s Safety Response Team (SRT) provides assistance to customers.Under the PIN verification feature, Uber users will receive a four-digit code when they book a ride that is to be shared with the driver partner to start the ride. Users will have to activate the feature in the app’s setting. The RideCheck feature will enable Uber to flag certain trip irregularities, like long, unexpected stops or midway drops that might, in some rare cases, indicate an increased safety risk, especially for women. The audio recording feature can record audio of both riders and driver partners during the ride.This audio is encrypted and can only be either deleted or shared with Uber. Neither party will be able to hear the recording. Once shared, the audio can help our agents better understand the issue and resolve them.The feature is currently in pilot in Mexico and Brazil, and Uber will look at testing it in the Indian market later this year.
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Psychology Behind Hype: ‘SUPREME’
Arjun Prajapati, FOBA
We can have a leather jacket for $1500, and if it’s a good value, young people will understand that we also want to have the feeling that this won’t be here in a month but. When I grew up, I think everybody felt that way. It’s like, if I love this, it may not be here, so I should buy it, said James Jebbia, Founder of Supreme. What is Supreme? Supreme was, once upon a time, just like any other American streetwear brand since its inception in 1994, the majority of its customers were people in the skateboarding community and young adults. There are currently 11 stores worldwide. Every store has a drop-in every week, and the stock gets over within 2 hours of its open. Their initial price range was affordable for the quality of the products they are producing. What drives the prices up is the resell market for skateboarders. Supreme does not mass-produced, and they are known for that. Hence, the limited quantities of each product drove the prices upwards, slowly but surely to the crazy heights that it has reached now. Supreme logo what lovers call it, a box logo with a red backdrop and the name of the company in bold, Futura Heavy Oblique and is primarily based on Barbara Kruger’s art for which the company was once sued. What caused this major hype? Like with any trend, they get more popular when celebrities and people we look up to for style inspirations start picking it up. All of a sudden, what you may not have paid attention to become desirable. People want things that other people cants get, and they are willing to pay more money for that. It’s simple if everybody can get one, nobody wants one. You want to have a high level of rejection rate by keeping things scarce. In 2006 Supreme released Supreme Blazer SB, collaboration with Nike. The shoes retailed for around $150 with a resale ranging from $300 - $400. In 2007 Kanye West was seen wearing the same shoes at a party. After the photos were released, the price doubled to $800. Tyler, the Creator in his video ‘She,’ was seen wearing a Supreme
Box Logo Hoodie. Retail price $150 and was resale at $3500. Hip hop community gets the attention of these brands when these famous rappers are seen wearing them. Eventually, as hiphop culture become more and more mainstream with the proliferation of rap music and hypebeast trends, Supreme became the standard of effortless swag. Collaboration is a major chunk in the hype market,
especially with the streetwear and luxury goods. Collaboration projects with almost every big fashion brand under the sky boost this further; releases alongside The North Face, A Bathing Ape, Kermit The Frog Tee, Louis Vuitton, and countless more are a win for everyone involved. Supreme maintain their cultural relevance by working with long-established labels, while the labels gain the prestige of collaborating with the most hyped brand of the moment In terms of economics, when you increase the supply, it decreases demand. There is so much of it that nobody wants it. What Supreme is doing is the opposite. Its limiting supply and increasing demand. There is a term for this law of limiting supply; it’s called “conspicuous consumption”. Conspicuous consumption is when a person shows off by buying things other people can’t afford. The goods bought by these people are known as Veblen goods. This category of goods is used to describe the lavish
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behind its motive of limited supply. Why do people queue up for Supreme? It’s simple economics. It’s all about demand and supply. Supremes’ tactic is to create a limited supply relative to the demand. Unlike other luxury or sneaker brands or even Nike and Adidas, Supreme never has a constant supply of merchandise available for customers to shop whenever they please. Supreme creates scarcity for its products by limited edition strategy. Most of the luxury brands have adopted the principle of scarcity. Supreme is famous for making “drops”, where they release limited amounts of new collections and designs at specific timings. A drop is one of the newest ways to create a buzz. A product drop builds hype for a new item in the days, weeks, or months leading up to the launch, stressing the date, time, and location of the drop. There’s a limited quantity for customers to get their hands on. After the drop is done and the items are sold out, the items are “never restocked and thus gone forever”. And if you need them, you can only buy them from secondary markets like Ebay.com, Stockx.com, and many others. The people who bought the items resell them at a higher price, creating a vicious cycle. The retail prices at The store isn’t expensive, but once they are out of the store and into the resell market, the price goes to an extravagant scale. For t-shirts, retail prices are $38 to $138 for a sweatshirt. The resell price for these goes up to 30 times its original price. Supreme’s Craziness? Supreme has made its self in a brand that can sell anything sort of thing for which a customer may not
pay, but he does because of its Supreme. Have you ever seen a company selling a branded brick or an extinguisher or a crowbar? That sounds crazy, right! But it’s true, I will say it again, Supreme does. And collectors are mad after them. Here’s the picture. In Supremes’ Fall or Winter 2016 collection, Supreme featured a brick with the Supreme Box Logo on it. The difference between a regular brick and a Supreme brick is just the Supreme Box Logo on it. On the left side is the official website of supreme which shows a supreme branded brick for $30. And on the right side of the image is the retail prices of the brick at $1000 and people have bought them. That’s the craziest purchase to date. The Supreme brick has now become a collector’s item for many “hypebeasts” (A person who follows trends in fashion, particularly for the purpose of making a social statement) . Supreme, does not only make random items such as a brick with the logo on it and raise up the price, but they also make other gadgets such as a crowbar, fire extinguisher, dominos, money gun (might have seen in rap music videos), a bike, bolt cutters or you might have an expensive feeding bowl for your pet. Thus, the only concern which made me write this article was that, when it comes to brand building or brand development, people believe that marketing or some sort of social activity are the only options available to them. But that is not so. James Jebbia, the founder of Supreme, has done with the basic understanding of economics its law of demand and supply, which is taught to students in 11th grade. It’s just that there are many ways to create a buzz for your brand, which eventually leads to hype.
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