Audience Engagement Is Now Required For Brand Success
Our NC State Global Textile Brand Management class (TTM 582) has been working on some of the fundamentals of marketing the past couple weeks and exploring how Product, Price, Place and Promotion (The 4 Ps) combine to create brand differentiation and competitive advantage. Digital channels have now fostered the need for a 5th P,Participation, a critical part of the marketing mix. Brand interaction with existing and potential consumers is not just part of a marketing mix, it's required to maintain brand relevancy. Never before have brands been able to be this close to consumers and include them in all facets of the branding process. Brands embracing this opportunity will be rewarded with increased brand customer advocacy, loyalty and ultimately brand success.
When I was working for Walmart in 2007, an amazing marketing phenomenon was taking place, consumers were beginning to gain a scaled brand voice thanks to social media. This consumer voice gave many insights into what Walmart was doing well and also on what needed work. Some marketers were surprisingly caught off guard as consumers shared both positive and negative sentiments about their brands. Consumers have always done this but mostly to a limited group of friends and family which has a powerful impact, but is hard to quantify or through customer service channels which sometimes didn't filter back into the brand management process. As the consumer voice trend began to expand, many leveraged their voices to share their views with much larger audiences and began to impact the opinions of consumers far beyond their personal sphere.
Coupled with evolving market research insights about what drives brand success, these voices began to impact brand management as we know it. For example, in 2003, agroundbreaking Harvard Business Review article showed a direct correlation between Net Promoter Score (NPS) and the ability of a company to out perform peers with regards to growth. The challenge for marketers then was getting at NPS data which could be very expensive and painfully slow. Thanks to social networks, that's all changed. Through engaged consumer Participation via social media, brands can now get an up to the minute read on where they stand with regards to consumer promotion of their products and services.
To better understand the 5 Ps, student groups looked at how Adidas is using them to manage its brand. Each group took a different marketing mix component and created aMedium post along with a Pinterest board exploring how the footwear manufacturer is using each element to build its brand. Their work was then presented in class with a group discussion about how they interact to create a complete brand experience. With an emphasis on how digital is affecting all aspects of marketing, here are the summaries of their findings:
Adidas promotional efforts span the gamut of activities from music to sports to lifestyle events aimed at the highly influential sneakerhead community. Once again, emerging technology plays a key role including mobile apps that build a relationship with consumers beyond the purchase. Promotional events and tech enable Adidas to leverage its brand equity with consumers by created enhanced interaction with its products. Promotions can also help the brand build community by connecting its users to specific 'tribes' based on their interests and passions. Adidas has even created a velvet rope effect by creating exclusivity for influencers, celebrities and high-value consumers to connect at worldwide events. As with all of its marketing mix, technology and innovation are highlighted and celebrated.
From outlet stores to high-end experiential shopping, Adidas uses place more than any of its competitors to connect with consumers. The brand has over 1000 retail locations in the United States and double that store count in its home market of Germany. Adidas leadership in physical retail gives it much more branding control at the point of purchase which often can lead to a richer shopping experience. It is also rapidly deploying technology to create a consistent omnichannel brand connection no matter where a consumer is interacting. While Nike is the undisputed king of the US market with a 60%+ share, Adidas is much more competitive globally thanks in part to its focus on place.
It's a Yeezy world! If there is any doubt that product is the most important part of the marketing mix, this franchise should settle it. Adidas collaboration with Kanye is at the pinnacle of the current collaboration craze with most models immediately commanding 5-10 times original retail as soon as they are available. Yeezy's are so successful that even known fakes sell for a couple hundred dollars. From Yeezy to NMD, Adidas product success is driven by its relentless focus on technology.
Adidas Boost technology developed with material supplier, BASF, Boost provides a wide range of performance enhancement across its product lines.
Adidas focus on product innovation keeps it at the forefront of consumers minds not only for its performance shoes but extending to its classics and even its high fashion lines.
In the sneaker category, price has taken on a life of its own thanks to the secondary market. Sneaker resales have exploded over the past few years as a functional marketplace driven by sneakerheads has evolved to become a $1.2+ billion annual business with sneakers originally selling for a few hundred dollars fetching thousands via resale. Recently a pair of Nike Air Yeezy 2 "Red October" shoes were featured on Walmart Marketplace for $6,499. The sneaker aftermarket is undoubtedly having an impact on prices in the primary marketplace as well. Adidas prices range from low $20s to well over $300 as it seeks to maximize pricing bands across channels. A student interview with an Adidas channel executive revealed that price ranks 4th among its marketing priorities as its focus on product innovation leads the brand to higher consumer engagement, loyalty and ultimately profit.
Marketers can now include consumers in all stages of brand management, which is good, since a brand is essentially just an idea in a consumer's mind in the first place (no, it's not a logo). From product development to brand advocacy, consumers can and want to be engaged by brands that they love. Therefore brand Participation is quite possibly now the most important P (although I would argue that without a great product, the other Ps aren't very useful). At a minimum, brand responses and engagements are REQUIRED on social channels. There is a reasonable expectation from consumers that if a brand has a social channel, it will make the effort to connect to consumers on that channel, not just use social as a one way messaging outlet. Adidas is successfully utilizing brand participation as a way to drive all of its other Ps and is aligning objectives to make this a reality. It's goal of 30% of brand content being generated by consumers is evidence of this which will require active participation on Adidas part to achieve.
Note: Articles featured in this post were created by students in the NC State College of Textiles graduate program. #NCStateTextiles