What other banks are performing in the same space and how are they approaching the task of building brand equity?
HSBC has established itself as “World’s local bank”. There are established banks who are not far behind, some names being - Wells Fargo, Bank of America, Barclays, Citigroup, RBS and Standard Chartered etc. (NASDAQ). As per its website, HSBC has successfully branched out to over 6000 locations over 70 countries. HSBC Holdings hold subsidiaries throughout Europe, Asia-Pacific region, Africa, Middle East and America. HSBC takes care of all banking needs from accounts to credit cards, to business accounts loans etc. Bank of America has recently displaced HSBC despite odds like negative media coverage, legal problems etc. (Lehman-era crisis) (Crotty, J., 2009. 33(4), pp.563-580.)
It has benefitted from its subsidiary Merrill Lynch owing to its strong performance. Its strategy to benefit its employees by restructuring their bonuses by up to 70% as deferred stock and its campaign to forego portions of debt for its distressed homeowners helped it gain momentum and favour en masse (Vantassel-Baska, 2016). This strategy catapulted its image from a regional bank to a global figure. Also, a change in strategy by adoption of Financial Supermarket Model, championed by Citi Group brought it back on the map after the recent recession.
Wells Fargo’s conservative approach to banking in boom period kept it afloat during banking crisis. The reliability the bank reflects in mortgage market helped maintain its good brand identity in the rough phase. 55 acquisitions before 2010 reflects the confidence the investors have in its brand. Barclay’s sponsorship of the English Premier League and campaigns like “take one small step” reinforced its position as friendly and approachable. Compared to its earlier image of a heavy investment bank, its current image of a retail and corporate bank has been part of its strategic brand building exercises which has helped it reap its benefits. Citi’s strategic campaign “What’s your story” has helped it gain foothold as a financial supermarket brand. The campaign has send out the message that Citi can address every need of individual and has hence increased its saliency of brand to its customers.
How would you describe the business' ability to launch new products under the HSBC Brand compared to other players in the market? Do you think they would have a better chance of success under the Brand Adoption model than a lesser brand? Explain why?
As is evident, every large bank house has changed its strategies to gain more visibility and making its brand identity stand out. HSBC takes advantage of its branding “world’s local bank” seriously when launching new in-products (Braun et al. 2016). Its premier banking services makes it easy for the new age digital fanatics to use their new digital in products that ease their life in banking and transacting. HSBC followed the brand adoption model and despite being a global brand went local with its approach. (California Management Review, 42(4): 8–23.) where all products come under one umbrella-HSBC. As per its own website, its two-part strategy is
- Develop international network
- Invest in wealth and retail businesses with local scale (HSBC)
All its in-product would be on lines with these two mentioned strategies under the HSBC Bank. A look at the competition points out that they too have been emphasizing on the technology and simplicity. HSBC has made its presence felt and challenged the viewers’ own perceptions on life and simplicity of banking through powerful advertisements splashed over internet, website, its’ website. This makes in turn the viewer more open to ideas launched by HSBC as products. It has thus been successful so far. When compared to a lesser brand their strategy to stick to brand adoption model would benefit them as they already have an image and a good global reach when compared to a lesser brand (Öberg, 2016, p. 1640005). It would take far more time to create awareness for a lesser brand compared to HSBC. Most would be aware as of its global image and hence path the trial would not be as difficult as compared to a lesser brand.
Employee branding is mentioned in the article. What is the importance of internal branding and establishing equity in an organisation? Do marketers have a responsibility to build their brands inside the organisation as much as outside the business? Why is this important?
HSBC believes in establishing an internal branding and establishing. This is proved in their induction training for new recruits. This is as important as building an external brand awareness as it ensures employees understand the organizations mission and vision and imbibe it in their work (Rich, 2016, p. 107). This helps ensure consistency in customer experiences, encourages employees to embrace the brand value and keep the brand promise thus working synchronized towards organizations’ objectives. Creating the brand internally is very important as the employees connect more with the products and services they are dealing with. In absence of which, the employees would fail to understand the underlying promise and could undermine the promise sent out through advertisements (Jiang and Chen, 2016, p. 15400). Research shows that when employees are convinced of the brand power, they shall spread it to the customers from inside the organization at every step.
Levis 501 Repositioning
Why was it important for Levi's to address the brand perception issue of 'Becoming my Dad's brand'?
With the advent of fashion, Levi which targeted the 25-35 year old office workers stayed behind. The youth, who preferred jeans started seeing it as dad’s wear rather than something he would wear himself. It’s popularity as a brand had already taken a hit. It was therefore urgent to change its corporate identity (Gundry et al. 2016, p. 56). Product repositioning was the need of the hour. Changing markets were another important cause. With the threat of new brands and new shopping places for people, the market had changed (Lindsey, 2016, p. 76). The changing market also reflected the changing tastes of customers who wanted to opt for something ‘in fashion’, peppy, as per modern times. Levis’ was losing out to the competition and customers as well resulting in huge revenue losses. With diversification of its products i.e. for men, boys, women, t-shirts and even shoes, it had lost focus and had only burdened itself with changed reputation. Its image needed modernization.
What commercial implications may arise if the brand (or any brand) becomes dated?
In case a brand becomes dated, certain commercial implications that would follow are:
- Dent in Brand Image – When the organization does not respond to changes and lets the brand die out
- Loss of revenue – Time and money invested in creation of brand is wasted and further more to be wasted in recreating it
- Fall back on competition – by losing customers, the commercial impact results in loss of market share. The competition leaves the organization high and dry
How did the brand activity and marketing drive broader organisational change and why is this important?
Branding, is an intangible feature an organization upholds and delivers. Relaunching Levis 501 as a brand catapulted Levis back to its higher position. The 501 was its original product and branding activity around it - sponsorship for Olympics, increased its visibility and re-associated itself back to youth. A 5% airtime in Olympics signalled the customer its clear intentions of its offerings as “back to basics” (Grimm and Brandert, 2016, p. 34). The commercials represented modernism, being scorned at image in commercials appealed to youth and slowly the sales numbers picked on. The impact all of this had on organizational change was tremendous. It affected the organizational strategy and its behaviour towards the competition and the changing market which was fast coming out of recession of 1980. The advertisement were innovative and changed perceptions. They marketed this classic as a must have for wardrobe. 501 was the only jeans with television advertisements for Levis. The support from European counterparts who were equally focussed succeeded with widespread distribution unlike before (Perry-Smith and Mannucci, 2017, p. 61).
Organization changes brought about in Levis with the success of 501 was greater. With popularity rising and market space created, Levis needed to gain the lost ground. New markets needed to be entered and teams needed to be created. Levis 501 revolutionized the Levis as organization. Levis stretched its product lines as well with introduction of corduroy pants, polyester pants, introduced XXX denims through use of 60” wide looms. Not only that, levis entered CSR activities, in fact it was one of the first organizations to develop comprehensive HIV and AIDS education and health services for its employees and their families. So, at an organizational level a lot of change was happening which is influential even till date to be among world renowned brands.
What was the importance of the 501 halo to the broader brand strategy? What other examples of other brands can you reference where this occurs?
In the year 1988-1991, Levi’s sales increased to outpace the local market performance. Increased brand shares were reported all over its markets spread out to France, Italy, Spain, UK & Germany. The 501-halo effect for the brand was such that –
- Levi’s became the top brand on a jeans buyers’ shopping list. That implies it had the optimum market capture.
- The position continued to strengthen. As a brand, Levi’s only benefitted from the 501-marketing strategy.
- The customers’ intent to go to a different brand started diminishing
- Owing to the ‘halo effect, other Levis products under 501such as 501 Shrink to fit, 501 CT, 501 shorts, 501 Skinny Fit, 501 Original (Big & Tall) etc. started selling popularly under both men and women’s sections
This is how it got the new position in the jeans market in each market it catered to. Another of such brilliant turnaround brand story is that of KFC’s. The younger generation wanted sandwiches, boneless chicken, anything that was hassle free and quick whereas the older generation preferred snacking and having dip-sauces. KFC was fast losing out on competition. With proper marketing they turned around their brand identity as well (Amabile and Pratt, 2016, p. 157). They advertised as every holiday to be the perfect day for chicken from KFCs and this worked a lot in their favour. Today people see KFC as a brand that allows good times with friends and family, hanging out together. Each and every product of KFC sells because of the classic fried chicken halo effect. Another classic example is Lego. With the company gone near bankrupt around 1990s, it actually build itself back ‘Lego by Lego’. Post ditching hundreds of products ideas, the current CEO focussed back on bricks. Lego succeeded across demographics by making people remember their memories of the brand and ultimately reached out to their off springs (Valaei et al. 2017, p. 225). The story of Apple iPod and then the iPhone changed how ‘cool’ looked the generation with them in possession in 21st century. Everyone wanted to own one, there were so many in line to get their hands on one post launch outside stores! That hardly makes us recall that around 1997, the company neared bankruptcy owing to stiff competition from organizations such as Dell, IBM, and HP etc. The “Think Different” campaign challenged consumers to see themselves with an iPhone in their hands, make the ulterior lifestyle choice (Grimm and Brandert, 2016, p. 36). Steve Jobs didn’t just change the competition rather, made his competitors stop, glance and correct their own routes. What a total turnaround of the brand ‘Apple’. In financial year 2005, Apple Computer sales were up 68% from 2004. Profits were up 384%, stocks were high at 177%. Apple's net profit margin increased from 3.3% to 9.6%.
The good news wasn't just the success of the iPod. In 2005, the iPod and iTunes together accounted for almost 39% of their sales.
Apple's computer and related businesses were up by approximately 30% in 2005 over the previous year. As per industry reports, Apple increased its share of the personal computer market from 3% to 4%. That's the halo effect at Apple.
What were the key oversights by the brand team at Kraft when launching i-Snack 2.0 and why does this matter?
With the launch of the ‘in-famous’ iSnack 2.0 vegemite, the total continent which absolutely considered vegemite to be part of its culture loathed its name. The taste was good and liked and even while all the hate campaigns and twitter trolls on Kraft were happening, the name just did not resonate with Australia. Vegemite appealed to Australia and mostly people told the story of how they liked their vegemite with pride (Kandampully et al. 2016, p. 155). In such a scenario, just picking up a name which rhymed with new sensation of Apple’s products just made it looked lame and was not accepted by the Australians who were its customers for about 30 years. It simply failed to connect with the otherwise loyal consumers (Roper, 2016, p. 354). Unfortunately, the product itself sounded technical. Kraft did not listen to its consumers though it showed an intent. People had proposed ‘Cheesemite’ however, Kraft team opted for a techy name. When people have an emotional connect with a product, it was not right being a brand manager to ignore the requests of public in naming a product they loved and wanted to be a part of when naming it.
As a potential brand manager in the future how can you avoid these same mistakes?
As a brand manager, it was responsibility to listen to customers and not ignore them if they were being involved in a process specially when it was about to launch a new product. Brand management is a multi-faceted global responsibility as they should represent the organization, in tandem with their current product line and what it wants to be known for. Brand management is a multi-faceted global responsibility these days. Product branding should be synchronized with the organizational image and related product line. By not underestimating the consumers, the brand manager would eventually avoid brand imaging fiascos. Misunderstanding consumers’ demand could lead to misrepresented brand identity.
The campaign right up to naming it during AFL match was a good way to keep the customers hooked on to the product and make them feel involved and important (Truong et al. 2017, p. 87). Kraft did not listen to their consumers, did not test the market with the name. It rolled out the new cheesy vegemite under “name me” campaign and before it was named, 3 million units were bought off the shelves, however, it did not test the waters with the name (Moon and Sprott, 2016, p. 5769). Finally, it had to pull back the name in 4 days. The extension of the product did not fit with the image of the original – trying to refresh a dying brand is good but both ought to be linked, this was clearly missing. The actual product was a breakfast staple at most Australians’ home, the extension of the product was an acceptable product as people used to take their vegemite that way, however; the nomenclature destroyed the sync it had with the original product (Seyedghorban et al. 2016, p. 2665)
The brand manager needs to stick to the product sentiments and stick to the identity created. By mistracing incorrect and ambitious grounds, present hold could be destroyed. As in this case, the brand identity became confusing and it sounded like a technical product rather than the favourite vegemite. If the brand manager has data to prove a point, it would be scandalous to avoid all those analytics and go by instincts instead being reactive instead of proactive just because the market does nothing, does not mean that the product can go to its slow death (Van Assche et al. 2016, p. 166).
(Regardless of actual events that have happened since the case was written) What recommendations would you make for what the brand team should do next with Vegemite given the market response to the launch of i-Snack 2.0?
Refreshing and rebranding is the key to sustenance and that should be held at core. The marketing team at Kraft could have waited to see if the ebb tided with the new name of cheesy vegemite. Approximately, 3 million units were sold under ‘name me’ campaign. This showed that people liked the new product.
The social media platform furore was adding fuel to the fire but the team should have probably just waited and watched to find out the exact reason for the continuing sale (Reinders and Bartels, 2016, p. 1379). If, the extra sales were owing to the name and the attention it grabbed or if indeed people liked the taste. Some positive advertisements to turn around the public sentiments could work. It could have served the purpose of an apology and reassuring the Australians that nothing about vegemite changed (Wilfong et al. 2016, p. 4944) To move on, it could also probably invest in researching and finding out more products that could suit the multi-cultural environment for a country like Australia. The world indeed is becoming smaller with different national people at a single place and seen everywhere. As Vegemite tried to impress Australians, it could also think of capturing sentiments of other nationals like Asians for example with introduction of something spicier as per their taste.
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