Hi, For many years I’ve looked up to Warren Buffett and enjoyed hearing his business advice. The lecture that Warren presented to students at U of F really resonated with me and I’m sure you’re going to love it. Here’s the link – Enjoy 🙂
In 1998 well-known investor, Warren Buffett lectured to MBA students at the University of Florida. The lecture not only gave students the opportunity to learn from the legendary investor, they also had the chance to engage in a Q&A session.
During the session Warren posed the question, “What makes a company an ideal investment?” He followed up his question by discussing Brand Identity and Brand Presentation in relation to customer consciousness. While the term “customer consciousness” is new to some, it’s vital to the success of a company. It refers to the customer’s awareness, impression, and perception of a company and their offerings.
Mr. Buffet continued, examining the “Share of Mind,” a concept which stands in contrast to the conventional association of “Market Share.” The idea of “Share of Mind” refers to the frequency that consumers think about a specific brand within a category of products. For instance, if consumers think about Brand X more frequently than Brand Y, Brand X has a higher level of Share of Mind.
You don’t need to be the “Oracle from Omaha” in order to understand the math, it’s simple. In commercial company’s customer consciousness translates directly into dollars, yielding a higher profit. Throughout the lecture, Warren referred to three examples of companies with positive Brand Positioning. He then explored the Share of Mind and consciousness of consumers with Walt Disney, Coca Cola, and Kodak.
How can you create a brand that competes with the associations consumers have with Disney? So that when a mother comes into the video store she will choose a movie by Universal Studios or 20th Century Fox over a Disney movie. While DreamWorks has tried, they haven’t achieved the same level of success.
In contrast to Universal Pictures or 20th Century Fox, when someone mentions Disney everyone has a specific association with the brand and clear image in their mind. Disney has become rooted in global culture with our dearest childhood memories and life experiences, giving them the competitive advantage in the field.
Let’s take the same mother, she visits the video store knowing that her kids will watch the movie that she buys countless times. While she’s at the store, she chooses which movie she’s going to purchase – without having the opportunity to watch all of the options before buying the movie.
Then she’s faced with a decision that’s more complex than it seems, where her consumer buying behavior will influence the purchase. She looks on the shelf and sees a new movie from Universal Pictures for $16.95, but right next to it is Disney movie that costs $17.95. By simply seeing the cover and that it was produced by Disney she’s certain that it will be good, and her kids will love it.
Although the cost of the product is higher, consumers are more likely to purchase the Disney movie. Her final purchase decision, and the purchase trends of consumers like her, is due to the positive brand image of Disney that has been developed over the years.
People around the world associate happiness and “loving life” with Coca Cola. The messaging of these two attitudes appears in Coke’s advertising everywhere. Whether you’re at Disneyland, the Olympics, or the World Cup, Coca-Cola’s brand association is synonymous with happiness.
The imagery is not a coincidence, it’s actually embedded in the goals of the company. Coca Cola specifically outlines these attitudes in their values, mission, and vision stating, “[We aim] to inspire moments of optimism and happiness.”
“We aim to inspire moments of optimism and happiness,” Coca Cola’s mission statement.
The connection between happiness and belonging doesn’t translate to other brands, such as RC Cola, no matter the of amount of advertising money they spend. It’s impossible to transform the preferred brand image that millions of people share with Coca-Cola to RC Cola.
The positive image that Coca-Cola has embedded in our consciousness and global culture gives their brand a preferred standing and advantage to customers. Their high “Share of Mind” standing attracts customers and encourages them to choose Coca-Cola over their competitors.
30 years ago, before everyone had a camera on their smartphone, Kodak Eastman’s brand advantage in the photography industry was similar to that of Coca-Cola in the beverage industry. Customers had a favorable association with the little yellow film canisters, and they understood that through purchasing with Kodak they were using the best-of-the-best.
From the 1986 Games until the 2008 Bejing Olympics, Kodak was an influential sponsor of the Olympics in partnership with Coca Cola, McDonalds, Visa, General Electric, and other companies. While they were a partner in the 1984 Games, Fuji Film (their main competitor, although significantly smaller) won the race and succeeded in damaging Kodak’s reputation and brand image by sponsoring the Games.
The presence of Kodak at the Olympic games, which span 16 days and is viewed by millions around the world, provided an ample opportunity for the company to grow their reach. Ultimately, their advertising presence at the Games was a game-changer with their average customer – increasing both favorability and revenue.
Kodak’s continuous presence at the Olympics sent a powerful message to their customers – We are the best of the best, and we’re here for the best of the best. The message was best delivered in 2008 by Kodak’s CEO in a Press Release for Bejing, “The Games captivate people everywhere and enable the world’s best athletes to showcase their talents. Dating back the first modern Olympic Games in Athens, 1896, Kodak has been there to help capture and preserve the history, while also supporting the athletes.”
The message resonated with customers, they felt that they were getting the best product when they chose Kodak. Printed photos were the name of the game in 2008 and Kodak provided the guarantee that the photo taken and printed today would look good in 20 to 50 years. The resonance of this message was greatly credited to their high-ranked brand standing and “Share of Mind.”
Summing it up
Ultimately, the brand becomes what customers perceive about themselves – their feelings, memories, associations, and experiences. The customers’ brand association drives their interaction and decision-making process as it relates to the brand. Customer association is the reason why a customer goes to Store A instead of Store B.
Gas stations in Israel are a great example of brand influence on the customer. If someone needs to fill the car with gas or diesel fuel, they assume that the same product and price are available at each company.
So, what motivates us to fill up the car at Paz instead of Sonol? The brand. We develop loyalty and connection to the brand without even noticing it, even when it comes to a gas station.
Simply put …
“When I drink Coca Cola, I become a part of Coca Cola and [their] culture; when a girl has a Hello Kitty bag, she becomes a part of the [brand],” said Dr. Tomer Bakelash in Proposition of Brand Companies (featured in the Marker). He continued, [The customer] isn’t interested in the “grade of pickles or olive oil; the customer is not a food engineer. They buy to be part of the choice they are making and to feel healthy and good about themselves.”