Austrian, surprise me!

I am writing this post for three reasons:

  1. To find forgiveness for a small act of revenge in a tweet
  2. To correct my behavior from criticism to constructive dialog.
  3. To help an airline change.

 The story about my revengeful tweet

Rainy September, late evening. I am surrounded by a group of strangers having late dinner at a hotel in the center of Vienna. All of us are here for the same reason – we missed our late flights and the airline company assured the dinner and accommodation. A young French couple is sitting at the opposite table. I can hear the woman talking to the waiter: “You want to say that we have the business class and now we have to pay extra for some cheese on my pasta?” The clerk’s answer is unemotionally neat and clear: “Yes exactly”. Cold and factual service is what I really got enough today. I’m taking my smartphone and tweeting the following.

It all happened when I was flying from Belgrade to Bucharest over Vienna. To make more productive the next day, I decided to take a less comfortable evening flight over Vienna instead of the direct one in the morning.

My flight from Belgrade was getting late in departure, and I missed the next plane. This was not the worst thing one could have experienced, but somehow I really felt that after that no one in the service chain really cared whether I would miss this plane or not. Moreover, I believe that I could have caught it if it was different. Here is the story about my perspective and suggestions on how Austrian airlines could have done it differently. I use the “#idontcare” (I don’t care) tag from my tweet as a synonym for the missing service experience.

 The First #idontcare at the airplane

Just after we landed to Vienna, while some of the passengers were still at their seats, I told the flight attendant that my boarding for the next flight ends in 20 minutes. She responded by telling me just to go through the regular procedure. Without any additional information – will I make it or not. At the time, I was sure by the tone of her voice and her expression, that she meant: “You should make it by passing the normal procedure”. It turned out lately that this was my first #idontcare that evening.

 If you won’t, competition will set standards for expectations

Second #idontcare I experienced was in front of the craft. While we were waiting for the cabin luggage, passengers to Frankfurt were invited into a van waiting aside. Some of us with tight schedules also asked the attendant about our options but we were told just to proceed to the bus and gates. The Frankfurt van only increased my expectation-perception gap. “This was the way I should have been treated” was the only thought that could have come to my mind.

Glass of wine Austrian flight

 Security check is part of your service too – sorry to tell you that.

Third #idontcare was at the security check. My time was running out when I reached it. I saw that there were perhaps just a few minutes to make it to the gate some 30 meters away. From my position in the queue I told the security person that my boarding is about to close. She just shook her shoulders and said that I had to wait. Some nice granny was the first to show some compassion and let me in front of her and her husband. However, the security check took it’s time with the second turn to pass my shoes through the x ray. I missed the gate closing for just about 4 minutes.

An airline might argue that security check is an independent organization not concerning them. I do not take that! Airport security does not take part of bureaucratic government agencies any more. I would not agree with an argument such as “This is under airport authority, and we are just an airline”. It is up to the airline to develop a business model that assures certain service level (with delivering on schedule as its minimum), by that I mean including the whole ecosystem – security, airports, cattering, check-in process, travel agencies, on-line booking services, and even (to go to extremes) air traffic control authorities if needed.

It is also about the way we associate brand with service: Austrian airline – Vienna – Vienna airport. Now tell me who do you associate the security service with. Got it?

Some airports do not require additional security checks when switching flights. Austrian airlines (ups sorry Vienna airport) does. Competition sets expectations (once again).

 The fourth #idoncare: at the service desk

When I reached the gate, the person standing there, just concluded that “The boarding is completed. You have to go to the service desk”, pointing to the nearby booth with 5 or 6 working places and 2 or 3 persons servicing clients.

Although short – maybe 6 or 7 people, the queue at the both was very slow. After 10 minutes, I started feeling uncomfortable: “What if there is a next plane departing in minutes? What if I’m missing it by standing in this queue, what if…”. The problem was I could not check any status as there were no displays in my sight, and I was afraid to leave the queue that was becoming seriously long behind me. A young woman cried because she missed the same flight, a group of people in front of me discussed about what they should do. After a long waiting, the group of people in front of me was serviced in seconds as they obviously stood in a wrong queue. Overall, at the service desk the “#idontcares” reflected in significant lack of information as well as indifference about the impact of the process on the passengers. While standing there, you feel blind, dump and not really serviced. Next time in such situation, I’d like to understand what is happening, how long will it take and what are my options.

Customer care around empathy and caring

The general #idontcare during my experience with the missed flight is the overall absence of empathy in all interactions in which I was involved with Austrian airlines representatives. By that I meant the Vienna airport and security employees also – sorry again. I do not blame Austrian for not having designed the customer facing processes around empathy. However, I do mind the ease in which I was left to spend the night in Vienna, without anyone even pretending to try to help or at least care.

 Austrian can you do that?

Finally by writing this, I am answering to the Austrian airlines tweet, I’m  investing time and energy to “co-source” the design of Austrian’s “#idocare” processes. To be honest, I’m not sure that it will make any difference. I suspect that this correspondence will remain just another check on a to do list of some “social media specialist” who did his or her job just by finally showing some compassion and care thus avoiding bigger harm to the image of the brand.

There are just a few companies which have the culture and the business model integrated responsive and actionable in the way that a client complaint would have made any substantial internal changes, and I’m really not sure that Austrian Airlines with its service ecosystem (the craft crew, the security check, the service desk, the lady at the gate, the airport stuff,…) is among those.

 Austrian Airlines, surprise me!

About my Commentary Printed in Harvard Business Review Jan/Feb 2011

I had an honor to have the edited version of my comment to Harvard Business Review case study “Preserve the Luxury or Harvest the Brand?” printed in its January / February 2011 issue. Here is the case…

I had an honor to have the edited version of my commentary to Harvard Business Review case study Preserve the Luxury or Harvest the Brand? printed in its January / February 2011. The commentary was part of the gojceta.com initiative and it is embeded in my web 2.0 “personal strategy”, which is partly described in one of my posts.

Snapshot from the Jan/Feb 2011 HBR

I posted the comment to the hbr.org community in October 2010 after having read the intriguing case study. The complete text is available in the Jan/Feb 2011 issue of the Harvard Business Review, or on the HBR.org. In short, the case was about an imaginary French winery Chateau de Vallois. Vallois is a typical family business with simple business model combining vineyards cultivation with wine making. They are traditional in producing high quality wines and selling it through the traditional channel which exists for centuries in Boreaux. The negociants are wine merchants that diminish the risk of wine placement, but take the majority of the sales margins in return.

The youngest member of the family, after her MBA study and engagement with a leading consulting firm, wanted to make some change and start branding and selling wine on a much larger scale, targeting lower market segments. The young women’s idea engaged the family into discussion. Others were concerned about Vallois’s ability to market, their capacity to go for large scale, the relationship with negociants and similar.

The authors of the case study Daniela Beyersdorfer and Vincent Dessain wanted to hear opinions about going with a more affordable wine or stay with exclusivity.

This was my original commentary to HBR.ORG Vallois case study

Personally, I would’t go from exclusivity to wide market. We learned lessons from different industries such as car producers or fashion brands where this was often a bad idea.

I would rather use an even more exclusive wine*, sold directly from the chateau as brand exstension. Brand extension is fair even if adding several percent to profits of a business. Let’s say, in this case a new wine would make only 5% of the total quantity. Its margins would be double than the usual shipments due to direct sales and would add a 30% due to exclusivity. In this case the 5% of the revenue could contribute with additional 13% to the margin, assuming their selling price as base price and that the new production wouldn’t generate excessive additional cost (vine making is their core business anyway).

The new brand extension with exclusive price, channel and quantities would be a lever to increase demand for other wines purchased by negociants. The 5% of the total quantity wouldn’t create problems with the lack of grapes and would not harm the negociant’s market, but rather increase the whole brand value through scarcity of the newly introduced wine. The new wine would allow the owners to gain marketing expertise and establish the new business model with a low risk approach.

*In the original text it stands “vine” instead of “wine”

What was my point?

The approach I suggested was keeping the family business set up, while giving them the opportunity to start building their sales and marketing capability. The approach with even a more prestigious vine brand, sold directly from the vinery, would have been focused on profits rather than revenues.

How did I reach the above calculation?

Negiociants used to resell Chateau de Vallois’s wines with around 100% margin. If the Chateau would have had produced additional 5% of a more exclusive wine with higher margin of 7 value points from 5 quantity units, compared to the 135 value points they gain from 100 quantity units through negocitants (supposed cost ratio is 80 value points per quantity of 100 for both vines), it would contribute with 13% of additional profit margin (7 of 55).

New prestigious wine Actual wine
Quantity units 5 100
Production cost (value points) 4 80
Price sold out (value points) 12 135
End consumer price (value points) 12 200
Ch. de Vallois margin (value points) 7 55

What did I mean by lessons from different industries where brands have eroded due to switching from serving exclusive segments to wide markets?

Different exclusive car producers have given up their exclusivity to address a wider market. Not many of them have succeeded. Instead, many have struggled for years to regain the original brand proposition. Some of the examples were Porsche’s front engine GT models discontinued in 1995, or Jaguar’s trip into middle class car production.

Cedevita tea: “Dad does it dissolve in water?”

For some time now I’ve been cultivating the idea to write a few lines about an unusual branding that the Atlantic group applied to their tea product line. Probably the idea would never have grown into a decision, and the decision into action, if there wasn’t the observation of my eight-year old son that has confirmed my suspicions…

For some time now I’ve been cultivating the idea to write a few lines about an unusual branding that the Atlantic group applied to the tea product line acquired from Pliva in 2001. Atlantic’s decision was to keep the teas within the Cedevita line of business and also to use this very popular brand of refreshing beverages to promote the teas. Cedevita was among the most popular drinks in former Yugoslavia. Today it is packed in plastic jars in form of granules that dissolve in water with an effervescent effect that create a fruit tasting refreshing multivitamin drink.

Probably the idea about the mentioned article would never have grown into a decision, and the decision into action, if there wasn’t the observation of my eight-year old son that has confirmed my suspicions. Passing near the “city light” advertisement at one of the Zagreb tram stations, the child begins this unusual conversation:

Lovro: “Dad, will we buy this Cedevita tea?”.

Me: “But my son, we have it at home – an ordinary tea in filter bags.”

Lovro (enthusiastically): “Oh, it is kept in bags, you mix it with water, shake and drink?.”

I (taking a deep breath): “No, my son …”.

Yes, the tea is not an instant beverage in granules, and still it is called in the same way. How’s that possible?

Before of Atlantic’s re-branding, in consumer’s perception Cedevita meant only one thing: an instant vitamin drink. Time ago, when Pliva used to

bubbles cedevita
Graphical elements that garnish the web page of Cedevita teas

pack Cedevita in medical jars, consumer perception recognized the drink as a serious diet supplement. Still today, the text on the package states that it is just about it and that the recommended daily dose should not be exceeded. The package itself, however, does not reflect such seriousness any more, and the same goes to the related consumer perception (and habits, I’d add).

We know that the perception of a brand is usually established early in childhood. If we consider that children are the main consumers of Cedevita instant beverage, and that for them Ce-de-vita means exactly this, the confusion when encountering teas with the same trademark does not surprise.

I believe that applying brand attributes of a recognized instant beverage to the tea product line, represents a negative shift in the strategy of such brand. The confusion is further increased by recent investments through package redesign and intensive advertising of Cedevita teas – by ads that, by large portion of our perception, actually promote vitamin instant beverage. Judging by the web pages of Cedevita teas, it seems that even Atlantic’s marketing experts weren’t able to detach from such perception. The pages that belong to the teas represent just a subset of the Cedevita site, therefore the new tea packages are surrounded by orange bubbles on the move, so characteristic for the instant drink sharing the same name.

In this discussion I will disregard the hypothesis that the people from Atlantic deliberately push the more profitable Cedevita instant beverage on the account of (supposing) less profitable tea product line. Knowing this private company by a decisive and pragmatic management, I believe that the line of former Pliva teas, would have been rather sold to competitors than kept to serve as advertising billboard for a more successful product line.

Brand Communication: boiled water, granules, thirst, freshness, basketball …

Returning to the Cedevita brand and its communication. Cedevita, comparing to natural tea satisfies a completely different need. Even when we drink it, somehow subconsciously we do not believe that we are doing something really healthy. Effervescent effect when preparing the drink, during which the glass becomes temporarily transformed into a test tube, and sugar as one of the basic ingredients, suggest that we are going to consume a refreshing vice, rather than a healthy beverage. What remains as consolation is that we get the necessary “power of seven vitamins” as a food supplement.

While the primary function of Cedevita is a cold drink for refreshment and thirst, the tea is a warm beverage of health and relaxation. It implies a natural herbal mixture, kept in a previously boiled water. Tea is aromatic. Cedevita is the freshness and the sound of the dissolving granules. The tea are leaves and dried fruit,  while Cedevita is the powder with “natural fruit flavor”, as stated on the label.

In this whole discussion the potential synergy of the brand should be taken into account. Cedevita drink, Cedevita tea, Cedevita basketball team … When such unified brand has been stretched through consistent marketing communication at a wider region, then this approach carries a synergistic effect and significant savings. In the case of Cedevita, this region includes Croatia and its neighboring countries. Basketball club that plays in the regional league under the name of Cedevita and marketing campaigns that can be recycled in several markets with little intervention, reduce the cost and increase the synergy effect of a long-rooted brand. But it is exactly this “rootedness” to be the reason for confusion by the communication that places the instant beverage and the tea in same basket.

Cedevita teas and brand internationalization

If we consider the brand in terms of its internationalization and ignore the neighboring countries whose consumers grew up Cedevita, then we raise the question of purpose of a brand shared among instant drinks and teas. While in Croatia and the region, brand recognition can encourage a faster acceptance of Atlanic’s tea product line, this is not the case in other countries. Assuming that Atlantic plan to address a broader market with their teas, the arguments above seem to loose the ground. Even in a market that has never heard of Cedevita / instant drink, the question is how well will consumers associate that name to teas. The name itself evokes the C and D vitamins, or the life (Latin vita = life).

Lipton
Lipton guarantees a share of tea from rain forest to their consumers

Successful global brands of tea are appealing to lifestyle, environmental production, originality. They try to give a breathe of colonial times and distant places to their products. The aroma of such teas evoke the smell of the wooden hulls of sailing ships, pollen, rain forests and the value that ingenious merchant achieved before the tiny amounts of crushed leaves ended up in our tea paper bags. Looking at the world’s most famous tea brands such as Lipton or Twinings, we can notice the above patterns, also successfully applied by Franck to their campaign for Gunpowder premium green tea. Gunpowder communicates exactly that – exclusivity of each peace of tea leave, for which Franck claims to be specifically cut, highlights its premium quality, appeals to inner peace, and evokes travel. Tin box in which the tea is sold and kept, returns us back to the times of our grandmothers and precious shipments from distant places.

Returning to Cedevita teas. What would be the brand that Atlantic could have had applied to their warm herbal drinks, which would ensure its fair share in the hearts and minds of their consumers? Atlantic have already separated brands of their line of functional teas from those intended for enjoying the warm pleasure. Functional teas are set apart under the brand Naturavita. My objection would be that these teas are also promoted under the umbrella brand of Cedevita (the web with bubbles).

Franck
Franck’s Gunpowder communicates exclusivity of each tea leave, premium quality, inner peace, travel…

Personally, I would be more inclined to place them under the umbrella of Atlantic’s Dietpharm line of business that covers dietary supplements. As for the rest of the tea line, I believe that some variations of Atlantic’s corporate brand carry the greatest potential for the purpose. My suggestion would be to use the Atlantic ocean as link of the New and Old World: “Atlantic genuine tea”, “Old Atlantic tea”, “Atlantic premium tea”, …

Conclusion

This article is not work of a professional brand manager, but an attempt of a consumer who is educated in marketing to share his thoughts about the confusion created in his perception, by a brand expansion to the “adjacent” product category.

There are many similar branding cases that confuse, such as Podravka‘s use of an extremely successful brand of baby food Čokolino [Chocolino] for its excellent chocolate spread, or even worst, the decision of the city of Zagreb to promote through an expensive ski world-cup race (Zagreb has a ski resort with a very limited capacity).

Although this article represents a critical review of a business decision, it is not supported by relevant research or market survey. I am personally convinced that, even in Cedevita’s “clothes”, Atlantic’s tea product line will have its success on the market, primarily due to excellent distribution and managing of sales channels, but also due to investments in other elements of marketing mix that make some product line successful, such as design, quality, pricing policy, promotion as well as management of costs of good sold.

And finally, I think that what happened to the former Pliva teas is the same that usually happens to user-oriented processes in companies with strong organizational silos. I believe that the experts from Atlantic started their considerations from their own organizational views when branding the line of teas, instead of stepping in the shoes of their consumers. I believe that the organizational view, in this case (as with every other silo), was narrow and was saying only one thing: “We are Cedevita organizational unit, and our teas are Cedevita teas”.

Atlantic teas logo idea
Atlantic’s corporate brand could be suitable for the tea product line

Notes to Text

Atlantic, Cedevita, Cedevita tea, Dietpharm are trademarks of Atlantic Group. Franck, Lipton and Twinings are trademarks of their respective owners. The text reflects personal conclusions of the author, and is by no way influenced by author’s current employer or any other third parties.

In case you use this text or its parts, please quote the author and the source (Alen Gojčeta, www.gojceta.com, June 2010).