Erich Joachimsthaler, Founder, Vivaldi Partners

Dr Erich Joachimsthaler is an internationally recognised authority on strategy, marketing and branding. He is the founder of Vivaldi Partners, a strategy and marketing innovation firm headquartered in New York City, with offices in Los Angeles, Munich, Duesseldorf, London, Zurich, Amsterdam, Hamburg and Buenos Aires.

The firm focuses on developing breakthrough innovation, growth and marketing strategies for its clients by leveraging its expertise in brands, new products, and deep consumer insights drawing on its strong operating experiences in several key industries and categories.

During the course of the last 20 years, Dr Joachimsthaler has held faculty positions at the University of Southern California, Institutes Estudios Superiores de la Empresa in Barcelona, Spain and The Darden School, University of Virginia. He has published nearly 60 articles in academic journals such as the Journal of Marketing Research, Journal of Marketing, Journal Consumer Research, and Sloan Management Review.

Since the early 1990s, Dr Joachimsthaler's research has focused on branding and marketing issues. With his partner, David A Aaker, he has written numerous articles and award-winning best practice cases. In Kolkata recently to conduct the sixth edition of the CII Brand Conclave workshop, Dr Joachimsthaler shares with exchange4media's Indrani Sinha the various aspects of marketing.

Q. Likewise, do new branding approaches require new types of research?

Yes, I'm very convinced that our research has to change. One major research study that is done to create consumer insight is segmentation. I think it is very wrong. When we did quantitative research we segmented many consumers into five segments and then we would say how one segment differs from the other. Then we would say how we should market the product for each of these segments. I think this is wrong. Observing consumers doesn't mean understanding them. There is an assumption that if I do deep psychological observation research I will understand the consumers better. I venture to say no.

We need to find a way to look at consumers and serve them in an unbiased way and not with our own preconceptions and our own ideas. I advocate the 'Day Reconstruction' method. This allows us to remove our biases. One has to see the opportunities as they are.

Today the most crucial element of the brand is how the brand relates or connects to an existing or new behaviourial routine in the consumer's everyday life. As we all know, awareness is very fleeting and can disappear, therefore, we need to support awareness with constant communication. This is also true of the vast and diverse Indian market.

We can take the example of Apple. Though it is a smaller brand compared to Microsoft, Apple has been able to connect deeply with consumers in the music space, it produces not only computers but also electronics and entertainment products and manages our entire digital life – therein lies the strength of the brand.

The factors are the natural consequences of our lives today. I believe that we as consumers no longer attend to messages that are driven by marketers, we no longer find television commercials a form of entertainment. All that was a thing of the past. Today we are dealing with very self reliant, sophisticated, smart consumers who are evaluating every product they buy. Most of the time about 60 per cent of them will go to the Net before they actually go to the dealers. In this kind of an informed consumer market classic branding model no longer works. Today there are instances of brands that were well known in the past but no longer exist now, because mindshare is such a fleeting process.

Yes. We need to separate the hype from reality. The hype that we hear today is user generated media in all sorts of forms. The consumer is invited to rate products, and the consumers somehow become paid people to talk about the brand to other people and that's hype. You ask your consumers and create campaigns that empathise with them. Advertising agencies involve professionals to do brilliant advertising jobs.

We are in the day and age of consumers and there is more controlled involvement with the consumers who are smart, sophisticated and discerning. They do not like to be propositioned, messaged or targetted. It's a bit upside down, you don't target consumers, they are not your enemies. But you define yourself and you create some attraction where you invite people to join in. More and more consumers will then make active choices –this is the new word of marketing and consumer control.

I don't think there exists any so-called ‘ad agencies' any more on this planet. For the past few years ad agencies had to become integrated marketing agencies. They are all called brand agencies or integrated communication agencies. They needed to respond to the growing client needs. It's no longer just television but also direct mail. They have to sort of develop on all 12 keys of the piano and not just on one or two. The bad news for ad agencies is that now the keys on the piano are not 12 but 128! You cannot build an agency on 'we do everything' any more. What used to be integrated marketing communication has outlived its usefulness.

This is something that I've been thinking for a long time. This is an advertising solution done by McCann Erickson. I would have sought to find 'priceless' to deeper penetrate and engage consumers. One thing that they could do was that every time you use a Mastercard, the rounding change could go towards a foundation for something like maybe your childrens' college education, wherein by doing this you create another product and engage the consumers deeper. That's changing my behaviour around thinking about the future or investing in the future of my children. If a little money goes into a good direction then why not?

Bank of America has an initiative called 'Keep the change'. An entire ecosystem can be created around the card, a meaning around something. The customer is actually the bank and Mastercard is the network. So, an important part of Mastercard is its relationship with its bank. The proposition is not how Mastercard can be different from Visa, but how it can change the livelihood of people and transform the experience. Mastercard could not just be a mere logo on a credit card. It could be the biggest bank, the biggest financial services company all the way from banking to savings to insurance products. They could have created a network of opportunities that transcends Master or Visa or any of these beyond the notions of just issuing authorisation of a credit card.

Yes, it is more related to consumer products because the nature of cultural branding is about picking on a cultural myth. In America, there are several cultural icons that are used, like 'the rags to riches' entrepreneur models or 'rebels without a cause'. So, tapping into this fabric requires more of a consumer market – viral marketing, cultural marketing, 1,440 minutes, emotional branding – each work for particular types of products. For example, viral marketing works for B2B or industrial products as they are close knit communities. These new emerging models work for particular application more than others.

Yes, most definitely. It is a serious form, but very different from the notions we had say 3-5 years ago. I am often asked what I think of the word 'world wide web'. My answer is ‘Do you mean world wide wait?' because what I experienced was an enormous amount of waiting on the computer doing nothing for the files to upload.

Today, the digital platform has become in many consumer cultures an integral way of life. My daughter, who is 12 years old, doesn't do homework without three instant messaging, communicating with her friends, launching the email system, being on the i-Pod listening to music, and maybe have another website up somewhere. She is constantly using Google or Wikipedia and even downloads movies. The interesting fact is that it integrates seamlessly in peoples' lives. The i-Pod may be a good example because the software is worth nothing yet when you integrate the i-Pod with i-Tunes, the two together make a wonderful digital platform for not just music but for entertainment. These communication devices create communities like 'My Space'.

There are huge opportunities to embark on a viral marketing effort to create products for interlocking ecosystems with physical products. It is not just the technology companies that are using this, FMCG companies too are using it. Procter & Gamble has created a digital platform called 'Grapevine', which has 60 million entries.

One has to be very careful with celebrity endorsements. Celebrities go into jail or check into alcoholic clinics. Celebrity endorsement is a mere creation of awareness and needs to be done in a measured manner. Most often it is not done out of any logic in building a strong brand. Maybe the son or daughter of the CEO likes a particular celebrity or someone on the board wants to play golf with Tiger Woods!

One needs to have a very clear understanding of one's brand identity system. You need to define it. If you define it as 'good, fast, better', and then you say now which celebrity could help me there, almost any would do and you miss the point altogether. But if you can create some match only then will it work.

For instance, John McEnroe was a well-known tennis player who swore on the court, always got upset with the umpire and always thought that the ball was in when it was out. At that time there was another very well-known tennis player – Swede Bjorn Borg. He was handsome, a gentleman and a wonderful player. Had Nike sponsored Borg just think what would have happened to the brand. Regardless of how great an athlete and celebrity Borg was, he would have never helped build the Nike brand, maybe Adidas, but not Nike. On the other hand, McEnroe though not such a nice man on court manifested everything that Nike had to say to the world. He was aggressive, American and athletic – the three As that define the Nike brand.

Thus, careful managing of atheletes or celebrities can really help in the brand building effort, but rarely do they come together so correctly. If it is done well then it can be a very powerful way to communicate.

I would like to reiterate the fact that there is need to create a transformative experience and change the livelihood of people. In order to do that your brand has to become the cultural currency. Mere awareness of a name is not brand building. In order to become cultural currency, a part and fabric of culture, celebrities can help you because they are defining the cultural fabric of that society. Thus, it can become a hugely powerful tool if it is done properly.

I think segmentation has a big problem. The more we segment, the more we fragment the consumer landscape and produce more variations of a particular product. We end up creating brands and sub-brands and at the end of the day we do not serve our business any better. Then again, positioning is too simplistic and cannot be differentiated. Today we cannot differentiate from 250 mobile phones by creating one piffy slogan or a single ad. When I say this, I do that more for a wake up call, for being more dramatic – there is a role for positioning and segmentation, but we have to take that role to a very different place.

In the past, segmentation and positioning defined the principles of brand and marketing strategies. We would stop all exercises at segmenting the market and then positioning. I actually think the exercise should be done not at the beginning but at the end of the process. A totally new way of thinking through should be done… what is the demand? How do you structure the opportunity space? And from there not just think of the differences. We need to think of the similarities and how we can create transformative experiences – not merely satisfying experiences, but transform the livelihood of how people live their everyday lives and that's the starting point. Positioning and segmentation are marketing tactics that you do to optimise your marketing strategies.