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Forgive me if this repeats...
I think it's important to remember that we've moved from a
predominantly product based economy to a predominantly service based
economy. We no longer sell the product - we sell what the product can
do for you. How the product will improve your life, and make you
happier, richer, and/or more fulfilled.
Starbucks, McDonalds and Exxon may be selling coffee - but they are
not selling the same product. The "experience" as we've been calling
it, is rather ill-defined, because we neglect to acknowledge the
intrinsic value of the product, compared to the retail value of the
product.
Intrinsic value can be anything to anyone - the "warm-fuzzy" feeling
you get from that first sip or the jolt of caffeine when you need it
the most. The intrinsic value may not be worth the retail value - it
all depends what the product or service is worth to you. Starbucks
capitalizes on this intrinsic value by creating a "coffee house" space
where we literally feel at home. You walk through the door, the
smells of coffee grounds and vanilla and sugar in the air, the warm
tones, the big overstuffed chairs and sofas, etc. People walk into
these coffee houses knowing they'll pay the price for it - that's when
intrinsic value - not retail value - kicks in.
McDonald's and Exxon on the other hand are selling a completely
different intrinsic value. If you're buying coffee from Micky D's or
Exxon, odd's are coffee isn't the first thing on your mind. The
intrinsic value here is (more often than not) convenience. Now, I'm
not saying preferance doesn't have anything to do with it, but
preference is built into this intrinsic value and determines which
door you'll walk into in the first place.
It's easy to say "sell the brand rather than the experience" - but in
a world innundated with brands and logos and "fresh" and "new" and
"better than ever", it's not the brand that's going to reel in the
dollars anymore. Think about how you shop... how most average people
shop... they don't look primarily for brands anymore - they look for
the best value for their buck. The successful future of branding lies
in striking the intrinsic value chord effectively with your audience.
Look around, it's already happening - design and marketing strategies
are moving further and further away from the "product" and more
towards the "service" everyday! When was the last time you saw a
commercial for running shoes that actually showed you what the show
was made out of and why the PRODUCT was better? Or how car
commercials have moved from showing you what's under the hood to how
stylish, classy or macho it makes you look, and then flashing the
100,000 mile warranty on top? The service - the intrinsic value - is
the new key to the money bank. Use it wisely.
~erick
______________________________
E r i c k S t r a g h a l i s
Graphic Designer Imagitas, Inc.
T. 781.906.4800 x4677 F. 781.906.4848
48 Woerd Ave. Waltham, MA 02453-3826
--- In [email protected], "rreprobate"
<rreprobate@y...> wrote:
>
> > > For a quick understanding of the value brand plays, let's look
at
> coffee:
> > >
> > > Exxon = $0.25
> > > McDonald's = $1.14
> > > Starbucks = $3.75
> >
> > But this assumes Exxon, McDonalds, and Starbucks are selling
coffee,
> > which they aren't.
> >
> > Each is selling experience.
>
> Good thread! There were lots of interesting points along the way,
but
> I fear that no one
> seems to know anything about coffee.
>
> It's an interesting thing to say, that these companies are only
> selling an experience, but its
> an inaccurate simplification.
>
> Exxon sells gas. McDonalds sells food. Starbucks sells... milk and
> sugar mostly.
>
> Then the question was raised... why spend millions on advertising
> rather than experience,
> when the customer experience is the true path to building a brand?
>
> Well, it's much easier. It's just a matter getting some good looking
> people on camera and
> buying the spot. And it follows much more directly from the
"identity
> work" that has been
> handed down, unlike redesigning a customer experience.
>
> Exxon, McD's and Starbucks have done good work on both sides and
> that's why they are
> successful, despite the fact that they sell bad gas, bad food, and
> bad coffee respectively.
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