Friday, 21 April 2017

The Science of Branding and Marketing

It was another night evolving as a battle between pain and my willpower. To challenge me in this round, the pain attacked not just my arm and shoulder but the head and the neck as well. So using television, or reading as distraction was out of question. Yet I needed something to keep myself away from the awful painkillers. 

I had been meaning to reoragnise my trinkets and move my watches in another box. Well the perfect time had presented itself! With the box and my four watches I sat in front of the mirror. The first one, a Swatch, took me down memory lane. Father had got this when I was probably not even a teenager. From then todate, we have all worn it, loved it, and Sequoia and I still keep passing it to one another regularly. This one with a green leather strap and a light gold dial is simple, but gorgeous; and will always be special. 

The next one is technically not mine, but has tremendous pride associated with it. Post my first investment banking job I was to come home for the New Year. I wanted to buy mother a nice watch. I did not know much about brands then but knew that Swiss watches were the platinum kind. Of course a Swatch would not do for mother; she deserved the best, or at least the best I could have afforded back then. I spent weekends browsing through watch shops in London. Why I did not read about watches I don't know but I just did not. After a few shops I noticed that the one brand I liked, and could stretch myself to afford was Tissot. The elegance and simplicity of this brand always stood out. While I identified one for Sequoia and one for Bonsai, none seemed apt for mother. Just the week before I was to fly to India I went to Munich on work. Voila! At the airport duty-free I found the thin steel metal strap and dial Tissot that I could gift to mother. Priced in Euros, it was also more affordable for me earning in Pounds then. Today I wear it because on my injured arm's wrist this one is the most comfortable.

This third watch is my favourite and the cheapest one I own. With a tan leather strap and a dial of concentric circles, this ck creation is minimalistic grace on any wrist. It is the first watch I bought myself, on an impulse, two years after I started my investment banking career. The number of compliments I have received for this, since then, have reaffirmed that the correlation between price and aesthetics, or price and quality for that matter, is not necessarily linear. 

There were two watch shops in the mall close to home in London. And in both of these I had seen this steel coloured metal strap and rectangular dial Rado. Of course I had really liked it but found it too expensive, especially for myself. Everytime I would pass by I would pledge to start a Rado savings account. Then came the summer sale. Even then it seemed as an expense to be avoided. But then father came on a holiday and as my luck would have it, he spotted the same watch. In his view, such a sale was a great opportunity to buy this brand that would last a lifetime. He did not know about my liking for the watch and I did not tell him. I do remember telling him though that I would save and take my chances at next year's sale. He suggested to buy it for me. I was earning, and in that currency, so there was no way that I would take money from him. When he insisted and persisted I reluctantly pulled out my credit card and bought the watch. Somewhere deep down I was smiling, and that my choice was the same as father's had made the spend worth it. 

As I put the watches down in their respective places and stared at the mirror, I realised that I was feeling a tad better. I took my mobile and decided it was time I read about watches. When I googled Swatch, what I discovered had me stunned and stumped. The home page of the Swatch Group detailed that not only are Swatch, ck, Tissot and Rado  brands of this group, but the other watch brands I like - Breuget, Omega and Longinnes, are also owned by the Swatch Group. This entire group has been formed, over the years, through various acquisitions and joint ventures. As none of my purchases were influenced by advertisements, I concluded that corporate values must have a role to play in communicating brand value to target customers. Given that the group was formed by M&A, I could not but applaud the fabulous post merger integration done. If most of the brands of this group have appealed to me, I am highly likely potential target customer. And over the last thirteen years, at least, they have done a phenomenal job in reaching out to me via all their brands! It's a marvellous achievement from the eyes of a CFO and a professional.

Before I researched further on this subject I decided to check my hypothesis - corporate values can be used to silently create a pull effect on the target customer. So I decided to google two make up brands I am familiar with, Bobbi Brown and M.A.C. It was to be a night of surprises. Both these brands, and my most often used brand - Clinique, are all owned by the same group! Once again, neither verbal nor visual signalling have prompted me to use any of these three brands. I like the colours, the texture, handiness of application and the minimalistic packaging. Yes the sales service is an interaction that has delighted me each time, but that has not been a prime driver for my purchase. So quality and values conveyed do seem to be a factor here too. And you know what, Estee Lauder, the owner of these brands also has its current form post many mergers! Clinique originally is an Estee Lauder brand, but Bobbi Brown was acquired in 1995 and M.A.C in 1998. This seemed to not only reaffirm my hypothesis but also underline the importance of percolating corporate values for a sustained successful post merger customer retention. 

Watches done, makeup done, my mind moved to cars. Well this one needed no research but the similarity struck me only then. My favourite cars are Volkswagen, Audi and Porsche. All these and my first choice of segment D sedans in India, Skoda, are all owned by the Volkswagen group; which also has its current form post a few M&As. How interesting! The recent VW scandal, did it put me off the brand? It disappointed me. I wanted to see corrective action, but no it did not take me away from my belief in the safety and technical excellence of the vehicles. It may also be because it's probably true that in such manipulations VW is potentially not alone. While I should be more exacting of my brand of choice's standards, as Reene Mathis said to James Bond - " I guess when one's young, it seems very easy to distinguish between right and wrong. But as one gets older, it becomes more difficult. The villains and the heroes get all mixed up." This is a potential topic for another post but back to the point of discussion. Once again my choice of cars has not been influenced by media campaign but the sturdiness, features and designs of the vehicles.

I am totally and utterly fascinated. One because I seem to have a pattern in picking brands that I was conciously unaware of. Two because across product categories and countries, these holding companies seem to have used consistent delivery of corporate values across their brands to please and retain customers despite undergoing multiple M&As. And lastly because from the budget to the premium segment I seem to veer to the products of the same holding company! 

Well Brand building and marketing are a science of that I was aware, but not of the extent that I have now discovered. This definitely warrants more reading and analysis as I am as enchanted as Alice was in Wonderland. So all recommendations and any suggestions on readings will be welcome. I will share the conclusion of my research as and when I finish it.