What Pricing Says About You

Two stories caught my attention this Easter weekend.

The first was an International Herald Tribune article about the plight of the humble Japanese beef bowl. Long considered a staple meal of the journeyman worker, the broiled-beef-and- rice bowls from the big-three bargain restaurant chains Yoshinoya, Sukiya and Matsuya have had their prices slashed from about 400 yen to 280 yen over the past four months -- in response to Japan's faltering economic recovery and as a desperate measure to hang on to their customers.

Granted, price wars were made for this: two or more competitors engaged in a deadly game of 'chicken', eyeballing each other over successive price cuts designed to decimate profits and drive the weak out of business.

But the hard-won gains come at a price. Infuential economist Noriko Hama has warned that "if we all get used to spending just 250 yen for every meal, then meals priced reasonably will soon become too expensive. When you buy something cheap, you lower the value of your own life."

Now I'll confess I've wrestled with that last sentence from the moment I read it -- even posted a question on LinkedIn to seek other viewpoints -- but I suppose that taken in context, it may not seem quite so ridiculous as it initially appeared: One could argue that sustained price wars will spark a deflationary cycle and indirectly lower workers' wages through some trickle-down effect ... which in turn may lower one's perception of contribution to society.

But I'm still straining to wrap my head round the logic of that argument (you can tell I'm no economist). So let me instead think aloud about the subliminal messages a price point can send out about a product or service:

The perception people have of a product is often dependent on the first price they associate with that product -- which in turn exerts a psychological influence on the actual benefit they derive from its use. In his book Predictably Irrational, professor Dan Ariely writes about experiments in which students were better able to complete word puzzles after drinking an energy drink that was regularly priced. When other students consumed the drink after buying it at a discounted price, they were never able to do as well at the word puzzles as those who had paid the full price.

So brand champions: think twice, think three times before you allow your brand to be irrationally (or predictably) depositioned by a price reduction. The move can retain your competitive advantage in certain circumstances. But too many trigger-happy marketers yank the price down, then are surprised when the 'value gap' is stretched and snaps. Instead of thinking, what a great deal, customers start wondering, what's wrong with it?!

So why not focus on delivering value through a standout brand experience. You may be able to sell for more. The difference between the price that you can sell, and the price that you eventually do sell at, is the value of your brand.

This is, in fact, the cornerstone of the second article which caught my attention this weekend. It was a snippet really, in TIME magazine, about restauranteur and chef Shoichi Fujimaki who charges US$110 for a bowl of his ramen (yes, that's US dollars, there are too many zeros in the yen equivalent) which takes three days to prepare. Asked to justify his price, Fujimaki explains that "it's my 25 years of experience distilled into one bowl".

I don't know how Fujimaki-san is doing, with his ramen going at 35 times more than the beef bowls around his restaurant. But I'd love to make it up to Tokyo one day for a slurp. It must be one heckuva (brand) experience.

Two Brand Campaigns Square Off

Now this could really get interesting.

On the back of the launch of a much-debated brand campaign for Singapore (check out http://www.yoursingapore.com/) comes yesterday's announcement that Australia Tourism will soon launch a campaign that is the diametrical opposite of the local effort.

While Singapore's campaign offers tourists the chance to assemble and enjoy a customised itinerary during their Singapore sojourn -- in essence, making their holiday exactly the way they like it -- the Australian campaign invites locals to share photos of their favourite Australian holiday moments to create a new tourism campaign from the ground up. Their site (http://www.nothinglikeaustralia.com/) goes live on April 15th, with nine prizes (of dream holidays, no less) offered to get the creative juices flowing.

One campaign totally ignores the role local residents can play; the other is entirely dependent on their efforts for success. One campaign hands tourists the lead ("whatever you like, we'll deliver"); while the other leads tourists by the hand ("g'day, let us show you around").

A dispassionate observer will note the differences in the material that residents of both countries have to work with. Throw in cultural nuances, and you have all the ingredients of a fascinating case study in country branding and marketing.

I can't say with certainty which campaign will be more successful (though if you've read my previous post, you can probably guess which one I prefer).

In the meantime, have your say -- and watch this space.

Singapore Launches A Brand Campaign. Again.

Is Your Singapore any good?

I have to wonder as I scan our new brand campaign, unveiled last week by the Singapore Tourism Board (STB).

The multi-million dollar marketing campaign built around the phrase "Your Singapore" includes an interactive website (http://www.yoursingapore.com/) where travellers can customise their Singapore sojourns, book their flights and hotels, and soon, have itineraries sent to their mobile phones.

(Pardon my quibble, but if the website is laser-trained on tourists, shouldn't they be able to type http://www.mysingapore.com into their Web browsers?)

Explaining the rationale for the new campaign, just six years after the previous campaign "Uniquely Singapore" was introduced, STB's assistant chief executive of marketing Ken Low said, "A brand's lifespan is six to seven years." Ouch.

One can think of a good number of brand campaigns that have been in play for decades and are still going strong. Perhaps the difference was they were based on a purposeful positioning, and their campaigns had legs. While not particularly enamoured with the "Uniquely" campaign, I have to take issue with Mr Low's remark. Change the previous campaign if you wish, STB ... but don't offer an incendiary statement by way of rationalization.

One other aspect gives me cause for concern. The best country branding campaigns speak not only to the target audience (tourists), but also to the country hosts (Singaporeans). Campaigns such as "Incredible India" not only appeal to foreign visitors, but also instill patriotism and pride in the homeland hosts who are subliminally encouraged to be brand ambassadors. The latest Australia Tourism print ads, too, while not spouting a tagline, effortlessly entice visitors and make Aussies proud. (To view the whole series of luscious ads, click on http://www.tourism.australia.com/content/Destination%20Campaign/Transformation/Partner%20briefing.pdf)

This is a hallmark of good advertising: it portrays what we feel in our hearts the product can grow to become. Good advertising is often slightly ahead of the product -- not in a way that assails credibility, but in a sensitive way that inspires belief in the product's benefits and imparts a greater sense of purpose to those who deliver its brand promise.

By not giving a nod to Singaporean residents, this campaign is missing a golden opportunity to enlist advocates for its cause. And by pandering to the empowered consumer -- even though it does employ all the right social media marketing principles -- the campaign has abdicated our positioning throne, and given away our birthright. If Singapore is what a visitor wants it to be, then what is it, really?

But let's be fair: "Just do it" probably sounded like somebody's naggy whine when it was first unveiled to Nike execs in Beaverton in 1981. It took a few years of inspired advertising before the campaign tagline hit its stride.

Singaporeans might be so lucky to have such a winner on our hands. But I have to say, I'm not holding my breath.

An Olympic Fortnight, Vancouver!

For 17 days, Vancouver has treated the world to a showcase of the human spirit.

The Olympic Games have a habit of doing that. And these Winter Olympics were no different. (See http://www.vancouver2010.com/ for all the stories.)

The Games stated on a tragic note, with Georgian luge slider Nodar Kumaritashvili dying in a horrific training crash on the morning of the opening ceremony. Dodgy weather conditions conspired to further dampen the mood, with Cypress Mountain being forced to shut down portions of the spectator areas for safety reasons, and disappointing thousands of ticket-holders offered the scant consolation of a refund. A sizable section of Vancouver's population, too, were up in arms about the hefty tax bill that seem to be unjust desserts for all host nations of Olympic Games.

But the mood began to shift and the gloom began to lift when hearts and minds became captivated by the human stories of the Games:

American idols and skiers Lindsay Vonn and Bode Miller winning gold in dramatic fashion: Vonn pushing pain aside to capture the downhill title(she injured her shin a week before the Games and was a doubtful starter) and Miller clawing himself back from 7th position going into the second leg of the super-combined.

Slovenia's cross-country skier Petra Majdic displaying true grit after a warm-up tumble into a craggy creek bed, to ski four gruelling races before being stretchered off the course after the finals. A medical examination later revealed she had suffered five broken ribs and a collapsed lung.

Canadian figure skater Joannie Rochette being knocked down by the sudden, unexpected death of her mother who had flown into town to cheer her on, then somehow channelling her emotions for a few critical minutes two days later to skate her heart out on the ice. The scoreboard showed bronze, but her performance was pure gold.

And of course, the Canadian men's hockey team who gave the nation the gold medal it craved the most badly, by winning a sudden-death playoff in the finals against a young but brilliant US team that had played above itself throughout the Games.

The closing celebrations had a magic moment of its own when a faux repairman, giant screwdriver hanging from his toolbelt, 'fixed' the mechanical arm of the Olympic cauldron that had infamously failed to rise during the opening ceremony. Nothing is as endearing as a host nation that can laugh at itself.

Canada ended the Games with a haul of 26 medals (including a superb 14 gold, the best-ever achievement by any country in a single Winter Olympics). On another level, perhaps even more significant was the way the whole nation came together as One after a lukewarm first week. VANOC chief John Furlong paid tribute to "the most beautiful kind of patriotism that (has) broken out all across our country." My niece and nephew are Canadians and performed in the opening ceremony; it's an indescribable experience they'll cherish for the rest of their lives.

I lived and worked in Canada myself for close to seven years, and can vouch that for the longet time, the country's sports psyche seemed to be best summed up by the mantra, "Go for the bronze!" Not anymore. Canada has found a new voice, a raison d'etre; and Canadians are becoming comfortable with making it visible.

Billions of dollars are spent on nation and city branding each year as countries strive to reinvent themselves for the 21st century. Very rarely does a vision capture the hearts and minds of a populace as completely and seamlessly as it appeals at the same time to a nation's visitors. With these Games, brand Canada has turned the pages and started on a new chapter in its history.

I'm looking forward to the unfolding story.

Brands are Defined by What They Won't Do

The world's leading car-maker Toyota continues to reel from the largest product recall in its history. The company had already shed US$31 billion in market value since late January when it stopped production and sales of eight vehicle models to fix problems with sticky accelerator pedals and loose floor mats. Yesterday its pain intensifed with the recall of 437,000 hybrid cars including the Prius, the company's green 'halo car' for a new era.

But my post today isn't about the besieged brand in the spotlight. It's about the vulture brands circling around it.

GM and Ford have announced specific incentives targeted at unnerved Toyota owners in the US. "We want to make sure whoever's out there driving ... has a high-quality vehicle that's safe," a GM spokesperson told reporters during their announcement. Ouch.

Volkswagen, on the other hand, has written to its dealers requesting them not to employ "predatory price cuts" to lure Toyota customers in the US away from the brand. The Chief Operating Officer of VW's North American unit stated that Toyota "faces unfortunate circumstances in the marketplace. We will remain an aggressive competitor without targeting any one manufacturer."

In the jungle out there, marketshare cannot be achieved without mindshare. Putting aside Toyota, which is currently top of mind for all the wrong reasons, one brand has suddenly catapulted into the place of high awareness, high esteem. Volkswagen instinctively understands that values trumps results. Values mean doing the right thing when no one is looking and even when the consequences are difficult. Authentic brands earn respect by delivering on their brand promise and behaving the way they want others to behave towards them.

Volkswagen's actions reveal a brand strategy that articulates not just what it will do, but also defines what it will not do.

And what it didn't do this week, will generate results for a long time to come.