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VINYL RECORDS: Marketing A Memory.

5/27/2015

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Picture- Image © by Brian E. Faulkner -
I hear that vinyl is back.  No, not vinyl floors or tacky vinyl car tops: vinyl records -- the grooved discs that music used to come on before cassette tapes and CDs and online streaming.  The kind I grew up listening to.  If you’re of the Baby Boom generation, you likely will recall hoarding your pocket change to buy the latest Elvis or Little Richard or Everly Brothers record. 

Three kinds of buyers appear responsible for the rise in vinyl record sales these days: 
  • purists, people who love the more open, warm sound vinyl reproduction provides;
  • young people, for whom vinyl records are a new, more tactile way to listen to indie bands while discovering the music of previous generations (my 29-year-old daughter has been rummaging around for vinyl albums since she was a teenager);
  • and older folks, for whom vinyl not only is a trip down memory lane but an opportunity to reacquaint themselves with all the music waiting in those old boxes of LPs in the basement.

So it’s no surprise that sales of classic artists like The Beatles and Bob Dylan have been selling well on vinyl – helping drive category sales up 15% during the first three months of 2015, while accounting for only about 2% of total album sales.  Top sellers for 2014 were a mix of classic and new artists: Jack White (who has set some vinyl sales records), Arctic Monkeys, Beck, The Beatles’ Abbey Road, Bob Marley’s Legend compilation album from 1984 and a notable young singer/songwriter from New Zealand who calls herself Lorde – among others.

The times they are a-changin’ warbled Dylan back in 1964, and sometimes the times catch us by surprise, especially when a format like LP or 45 rpm records re-emerge from yesteryear to delight us with their new-found authenticity.

You’d think this resurgence of “old as new” products is mostly about nostalgia, a word from Greek that essentially means an ache for home, and you’d mostly be right.  During times of geopolitical turmoil or unsettling societal change, yearning for “the good ol’ days” is common, although we don’t often reach out for nostalgic cues from much further back than our childhoods – which is why toys (and classic cars) from the '50s and '60s can command big Boomer bucks these days.

Heard a bit of conversation on NPR‘s Morning Edition today where a guest was talking about how people are using notebooks or notepads  more often in solo gathering spots like Starbucks.  I recall one person saying that he uses his laptop or tablet for school stuff, not for writing more thoughtful, reflective things like poetry.  If I’m chewing on some ideas, I’d much rather use a notepad than a computer, although writing blog posts come easily on my laptop.  But if I were taking notes in a class, I’d go for pencil and paper every time.  It’s more fluid, more intuitive – at least for me.   Taking notes on a computer requires you to interact with the technology more than you’d do with pen or pencil.

If nostalgia is about recapturing the feeling one had during a simpler, less complex, less technologically saturated and more thoughtful time – personally or as a people, it’s easy to see why vinyl records are enjoying a renaissance.  

And even the old ones sound so good, despite all the crackles and pops that can leap out of the grooves along with the music.  But you don’t mind the noise, do you?   Because they’re your crackles and pops.  You put them there back in the ‘50s, ‘60s, ‘70s and ‘80s when you were just coming up.

Now that’s a memory!   And memories are marketable.

TakeAway:  Your next new product may be something old --  who knows, maybe formal hats will make a comeback!

Content © by Brian E. Faulkner

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A Mercedes by Another Name.

5/22/2015

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Tags:  Mercedes-Benz, Steinway & Sons, Daimler Motor Company, Daimler-Benz
While researching the origin of the current Mercedes-Benz tagline, I was reminded how close the car came to being called something else – at least here in America.

Were it not for a promising young man’s extended illness, Mercedes most likely would have been called by a name that had nothing to do with automobiles, a name known around the world by the time Gottlieb Daimler rolled out his high-speed internal combustion-powered automobile in 1886. Carl Benz developed his own car the same year, but the business entities that survived the inventors didn’t come together as Daimler-Benz AG until 1926.

In addition to automobiles, Daimler built engines for boats and industrial applications.   That caught the eye of one William Steinway, of the famed piano family.  He got in touch with Daimler, and on October 6, 1888, the Daimler Motor Company was organized in New York, where Steinway & Sons had already been in business for 35 years.

Steinway was convinced he could sell Daimler’s engines in the United States and acquired the rights to manufacture and market them for use in such things as cream separators, sewing machines, pumps, ventilating fans, printing presses and other applications that required a single-cylinder stationary engine. 

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In 1893, Steinway experienced Daimler’s “motor carriage” for himself and began to envision a motorized America.  So he set about developing his own automobile, one more adapted to American road conditions because he thought Daimler’s car too light for the “rough cobblestone streets we have in this country.”

“The cars which we intend to produce for the American market will be capable of carrying between two and four people and will be driven by engines with between 2½ and 3½ hp,” Steinway told a newspaper reporter in 1895. “Each car will have four different speed settings: 3½, 6, 9, and 14 miles per hour.”

However, this perspicacious man’s dream was not to be.  He died at age 35 in November of the following year after a stubborn period of undiagnosed illness (probably tuberculosis).  By that time he’d invested a frustrating amount of additional capital in the car company to offset continuing losses, so it’s likely he would have pulled out anyway.  After William’s death, Daimler Motor Company’s holdings, including a factory built on Steinway’s land, was sold to newly organized Daimler Manufacturing Company, which in 1905 produced an “American Mercedes” based on the German model. This car was on the market for only eight years before its factory was destroyed by fire.  

So had William Steinway lived and helped Daimler Motor Company overcome its ongoing financial problems, the American Mercedes just might have been called a Steinway ... which no doubt would have worked out fine, because both brands exemplify the best in their categories to this day. 

Best is subjective, of course, but Steinway & Sons instruments are the pianos on which the overwhelming number of concert artists choose to perform – or aspire to perform, as they have almost since day one.   William’s father, Heinrich Engelhard Steinweg, emigrated to New York from Germany during mid century, founded his business in a Manhattan loft, changed his name to Henry Steinway and set a quality standard that has endured through successive generations.   His maxim was “Build the best piano possible.  Sell it at the lowest price consistent with quality.” 

And although the company has passed through a number of different owners since it was purchased from the Steinway family by CBS in 1972, Steinway & Sons remains at the top of the piano hierarchy and is the brand to which other fine pianos are most often compared.   The company now is owned by American hedge fund manager John Paulson, a long-time admirer of its products.   His stated goal is to assure Steinway & Sons’ "continuing greatness."

Henry and William clearly would have agreed on that.

Mercedes-Benz’ latest tagline also reflects the philosophy of its founder, as well as the quality bedrock on which the brand stands as it moves deeper into the 21st century.  

You may recall the TV spot where Gottlieb Daimler nods off at his desk and dreams about the Mercedes-Benz of the future, with its now-familiar look, technology and style.  As Daimler is awakened by a lovely assistant, we see a handwritten phrase scratched on the notepad beside him: The best or nothing -- underlined with a flourish.   Though Mercedes-Benz has experienced some quality issues in recent years (not unlike Steinway), the brand is still held in high esteem, evidenced by frequent references to the “Mercedes of this” and the “Mercedes of that” as the marketers of other high-end product seek to compare their offerings to the car with the three pointed star.   

“In the end, all any of us has is our good name,” a Mercedes print ad declared a while back.   That’s true of Mercedes-Benz and true of Steinway & Sons.   The two vaulted brands that nearly became kissin’ cousins a hundred-odd years ago have prospered -- and will continue to prosper -- in large part because of the quality foundation put in place by their founders.

TakeAway:  Build your brand on bedrock quality and your reputation will follow, helping smooth the way over the inevitable bumps you encounter on your road to success.

Content © by Brian E. Faulkner


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What Price Luxury?  The Limitless Appeal of Veblen Goods.

5/14/2015

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Tags:  Steinway & Sons, Veblen goods, Apple Watch, Pam Danziger, HENRYs, Mercedes-Benz CLA, BMW 2-series, '55 Ford, '57 Chevy, Ford Victoria, Chevy Bel Air

It’s said that one man’s luxury is another man’s necessity.  

I recall some years ago hearing of a serious music student who slept underneath a huge Steinway & Sons concert grand that barely fit into his Manhattan apartment, which otherwise was adorned with furnishings constructed from painted cinder blocks and cheap shelving.  The 9-foot piano was not a luxury.  It was a necessity, a critical key to furthering his career as a concert pianist.

“Luxury” gets sliced and diced any number of ways depending on how you view it.  There are luxury homes, luxury cars, luxury wines and luxury vacations, some of which cost millions and others only hundreds.  You might be able to afford a luxury cruise (short of commissioning your own yacht) but hard-pressed to spend more than your annual salary for a mid-sized Steinway to encourage your average 12-year-old to stick with her piano lessons – although during my time selling pianos, I have seen parents stretch to make that kind of purchase for their talented, truly dedicated offspring.  I would classify these folks as need-based buyers.  At the same time, I’ve also seen want-based buyers purchase expensive instruments to set in their living rooms.  Though they didn’t play a note, the piano matched their furniture and the brand name on its fallboard spoke eloquently of their luxurious lifestyle.

The notion of luxury gets tangled up somewhere between need and want.  Some things are luxurious because we can’t afford them but want them, while other things are luxurious because we want them and can afford them.

Around the cusp of the 20th century, an American economist named Thorstein Veblen observed in Theory of the Leisure Class that the demand for certain commodities was proportional to their high price.  In other words, if you really want some uber-expensive indulgence, you’ll gladly pay the price because it enhances your status in a conspicuous sort of way.  At that level of net worth, of course, money isn't much of a problem, although these days a million doesn't go as far as it used to ... $100-million if you live in Manhattan. 

Thus, Veblen goods.

At the other end of the luxury spectrum is what marketing consultant Pam Danziger has dubbed the HENRYs, the High-Earner-Not-Rich-Yet “mass segment of the affluent consumer market” with annual incomes of $100,000 to $250,000.  Which means they’re doing better than nearly 80% of Americans.   It’s these folks that Tim Cook & Company appears to be targeting with their Apple Watch and clever luxury launch.  It will be interesting to see if Apple’s new entry into the watch marketing space can straddle the fence between need and want (especially among Millennials) while creating demand up and down the luxury ladder and dipping down into the middle class.

High end automakers like BMW and Mercedes-Benz have become adept in recent years at driving desire for their luxury brands down through the HENRYs to the middle class (Danziger’s middle class appears to top out at $99,999). Mercedes now offers the price-seductive CLA pegged right at the average outlay for a new car in the U.S. ($31,000), and BMW’s sporty new 2-series can be had for just a bit more. 

Of course, today’s average new car is ludicrously luxurious compared to those of 60 years ago, which weren’t so well equipped – or efficient or safe.   Back in 1955, a sparkling new Ford or Chevy cost under $2000 and probably didn’t have air conditioning or maybe even an automatic.  But in those days the average American worker only took home $5,000. Today’s average salary is more than ten times that, although it’s interesting to note that the average new car costs less relative to income (36% of the average salary now vs. 55% sixty years ago). 

Picture- Image © by Brian E. Faulkner -
But, irony of ironies, some well-kept original or recently restored automotive icons from way back then, such as Ford Victorias and Chevy Bel Airs (primarily the two-door or four-door hardtop models), now are back in demand in a big way, and the better ones can easily top $31,000.  There’s a ’55 goldenrod yellow and raven black (bumble bee) Ford Victoria for sale nearby that I would love to have.   But I still can’t afford it. 

So thanks a lot, Thorstein Veblen!

Content © by Brian E. Faulkner



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Airport Choice Revisited:  Convenience & Experience vs. Price. 

5/6/2015

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Last summer, I suggested in this space that Piedmont Triad International (PTI: airport code GSO) just might offer the world’s most satisfying airport experience.  (http://tinyurl.com/ktd3wrz)  PTI serves the greater Winston-Salem, Greensboro, High Point area of North Carolina. This airport is easy to get to, easy to go through and easy to leave when your flight returns.  And while you’re there, it’s a pleasant, uncrowded, unhurried place; parking is plentiful and close by and rental cars can be had right next to the terminal. There’s even an electric car charging station.  And free WiFi.

Given that kind of experience, I’d expect to pay a little more. However, a recent newspaper article 
noted that “Unless they’re on business trips, many travelers from the Piedmont Triad are chasing airline discounts to Charlotte or Raleigh for their vacations and other trips.”

Dunno about you, but if I were planning a vacation – especially with family in tow – I’d opt for the closest, least crowded airport and invest the few extra bucks per ticket in a more relaxed, hassle-free airport experience.   That is, if I can get to my destination from there without changing planes too many times (even though I’ve noticed on occasion that it costs less to fly to my destination through Charlotte from PTI than to drive to Charlotte and depart from there.  Go figure.)

The Journal article focused on the price advantage of the two more distant airports vs. PTI. It reported an average round trip fare of $10.66 less at Charlotte Douglas International Airport vs. PTI’s average fare, and a price difference between Raleigh-Durham International Airport and PTI of $53.02.  Of course, individual ticket prices may swing higher or lower.  The article failed to point out how small the price difference actually is between PTI and the other two airports, especially considering the comfort and convenience of flying from PTI vs. driving to Raleigh-Durham or Charlotte.  Each alternative is about an hour-and-a-half away (vs. half that or less for PTI), and you’d best add at least another hour to that or risk missing your flight -- even more time during commute times. 

There is a way to lower an airport’s average fare, notes PTI Executive Director Kevin Baker in the article: attract more budget airlines.

“We’re always talking to every low-cost carrier out there to try and lure them to come to our airport,” he told Journal reporter Richard M. Barron, although “there’s only so much we can do.”

Maybe so.  But what about talking up the advantages of his airport more effectively?  I, for one, would toss their current tagline (Fly Easy, Fly PTI) in favor of a variant with a bit more strategic muscle:

“It’s EASIER to FLY PTI!”  
This tagline invites prospective flyers to compare PTI with its more distant alternatives in light of the good dose of extra travel time and hassle that people experience in exchange for the few bucks they save on flights at more distant airports.

​Thinking Beyond Price:

It’s all too easy to sell your product or service on price – no matter what it is.  However, there may be other, more strategic product benefits lurking on the sidelines that prospective customers will rise to even more than a lower price.  Let’s say you’re that airline passenger trying to decide whether to fly from the handy airport nearby or commute nearly two hours to a bigger one.   What’s your choice?  Convenience?  Experience?  Or price?

PTI marketing could ask:

Are you prepared to drive all the way to Charlotte to save $10.66 on your next airline ticket?   With our easy-access, close-in parking, short lines and comfy terminal, it’s easier to fly PTI from anywhere in or around the Triad.  
Sure, you’ll spend an average of ten bucks more on your fare, but you’ll enjoy the experience a whole lot more … and get home faster, too.

Would I spend $100 more?  I’d sure think about it, although some would not.  I’d also like to think that there’s enough people like me to make a difference for PTI.   Because for us, an investment in avoiding the inevitability of parking hassles, long lines and general airport uncertainty is an easy choice, whether flying  for business or pleasure. 

 TakeAway:   Sometimes a higher price can be the better deal.

Content © by Brian E. Faulkner


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    sample blog:

    This is a sample blog  for writer Brian E. Faulkner.  It presents stories about brands that do (or don't) communicate competitive advantage effectively. Stories have been gleaned from the business press, personal experience and occasional interviews. New articles are added from time to time, and every so often there will be a post of general interest -- about things like success, passion, social trends, etc. 

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    Brian Faulkner is a writer and strategic communication consultant who helps business clients explain their competitive advantage in compelling and enduring ways.
     
    He also is a five-time Emmy award winning Public Television writer & narrator for a highly-rated and well-loved magazine series.

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