MARKETING AESTHETICS; THE STRATEGIC MANAGEMENT OF BRANDS, IDENTITY, AND IMAGE.

By offering a strategy for managing a company's total aesthetic output and with chapters on consumer brands, service-based companies, and international organizations, the authors aim to show how any organization can differentiate and elevate themselves above the competition.

Chapter 1: Aesthetics: The New Marketing Paradigm

Aesthetics. From the moment we wake to the end of each working day we are dazzled by what we see, hear, taste, smell, and feel. Our personal tastes guide our decisions in choosing our neighborhoods, decorating our homes, selecting our clothing, picking our appliances, and buying our cars.

But many managers and marketers have forgotten what provides value to customers; what truly satisfies customers; what turns them on. Business has been preoccupied with "quality function deployment" and "activity-based accounting," "business process reengineering" and "cost savings," "defining core competencies" and "strategic planning." Business processes do not provide value to customers. Core competencies do not. Even brands per se do not. Value is provided only by satisfying needs. In a world in which most consumers have their basic needs satisfied, value is easily provided by satisfying customers' experiential needs -- their aesthetic needs.

Aesthetics is not esoteric. The vitality of aesthetics in customers' lives provides opportunities for organizations to appeal to customers through a variety of sensory experiences and thereby benefit both the customers and the organizations through customer satisfaction and loyalty. These opportunities are not limited to industries such as fashion, cosmetics, and entertainment that are concerned with aesthetic products as such. They are not limited to exclusive, luxury products for high-end segments. Any organization whatsoever, in any industry, for any customer base, for profit or not for profit, governmental or private, consumer, industrial or service can benefit from using aesthetics.

ABSOLUT VODKA: AESTHETICS WITH A TWIST

In the late 1970s, no one would have expected that the new Swedish vodka import would, a decade later, become one of the hottest-selling vodkas in the U.S. The odds were clearly against Absolut. It faced formidable competition by Stolichnaya from Russia, with a market share of over 80% in the imported vodka category. To make matters more difficult, Absolut had a brand name that lacked distinction; a product imported from a country not associated with a tradition of superb vodkas; and an old-fashioned bottle that looked as if it had come from an alchemist's laboratory. Not surprisingly, a marketing study warned against introduction.

In ten years, however, Absolut sales in the U.S. soared from 5,000 cases per year to 2.5 million. In the late 1980s, the Swedish upstart eclipsed Stolichnaya as the best-selling imported brand and commanded a market share of 60% among imported vodkas. It ranked third among all vodkas, surpassed only by U.S.-made Smirnoff and Popov.

How did Absolut do it? None of the common explanations for this kind of marketing achievement -- product quality, efficient distribution, or price leadership, for instance -- can explain Absolut's success. What happened is not miraculous nor mysterious, however. Absolut knew that the traditional ingredients of successful brands were no longer enough to lift a product above its competitors. The willingness to market its aesthetics moved Absolut into its enviable market position. Absolut's success followed a well-integrated identity campaign, termed "smart, showy, sassy, sophisticated, sometimes silly, though always stylish" that turned Absolut's weaknesses into strengths.

In the aesthetics strategy pursued by Absolut, the commonplace word that was the brand name and the product's distinctively shaped bottle became the center of an artistically imaginative campaign. The Absolut identity is cool, cutting-edge, yet playful and irreverent. The product is associated with a fashionable, arty scene, but without hype or pretension. In stores and on bar shelves the minimalist clear bottle, with its long, wide neck and the words ABSOLUT VODKA spelled out on the glass in evenly sized capital letters, stands out. The silver-and-blue Absolut package design reinforces the distinct product image -- streamlined, straightforward, sophisticated. New product lines such as Absolut Kurant, Absolut Peppar, etc., are introduced naturally with minor appearance shifts such as a new lettering color, anchored by the stable simplicity of the ABSOLUT name on the bottle, the signature minimalist clear bottle and the trendy advertising campaigns that link the product to a hip, creative, high-end culture.

The typical Absolut ad displays the distinctively shaped bottle above a two-word headline that starts with the word "Absolut." The crucial element of this execution is the placement of the familiar bottle in unexpected and constantly changing settings. In each ad, the consistent minimalist style of the bottle and the lettering is given an unexpected touch -- a twist that surrounds and emphasizes the stable visual elements. "Absolut Perfection" features the crystal-clear Absolut bottle depicted as jewelry topped by a halo. "Absolut Original" features a stone bottle with cracks as if it had just been excavated from a prehistoric site. "Absolut L.A." shows an aerial view of an Absolut-bottle-shaped swimming pool.

In a nutshell, Absolut's sassy image is created through a sophisticated strategy that mixes consistent and simple refinement with planned and controlled unconventional executions. Not just the look of the ads but the way they use the advertising medium itself conveys this identity. Holiday campaigns always offer something special and unpredictable. One of the ads played tinny-sounding Christmas carols; another, multilingual holiday greetings from a microchip. The "Absolut Wonderland" ad was encased in a clear plastic package that contained tiny plastic "snowflakes" suspended in a mixture of oil and water. A more recent holiday campaign entitled "Absolut Warmth" included black wool gloves, cobranded by Absolut and DKNY, Donna Karan's hip line of casual clothing.

Absolut has restricted itself to print advertising. But in addition to a long roster of familiar publications, Absolut diverges from other national brands by advertising in unconventional trendsetting magazines that most media planners have probably never heard of, let alone considered: Bomb, Details, Paper. The Absolut campaign also abounds with unusual promotional tactics that reinforce the brand's aesthetic image as part of an upscale culture. Artists Andy Warhol and Keith Haring contributed to the campaign, creating artistic visions of the bottle marked by their own easily identifiable visual styles. Trendy fashion designers are called into service to design promotional clothing for Absolut, which is then worn by top models in the print advertisements. The image is also promoted through affiliating the, name with a range of nonmainstream cultural events, which sport titles identical to the two-word advertising campaign -- the "Absolut Concerto" series of new classical works; Esquire's Absolut Story writing contest; and exhibitions at the Museum of American Folk Art in New York City.

Absolut also uses identity-reinforcement strategies that take its aesthetic image beyond print and out into real-life situations. This move brings to life the aesthetic elements of the print campaign -- the familiar Absolut bottle, name, and headline phrase placed in unexpected settings. Cruising the streets of Manhattan and San Francisco, the mobile Absolut truck carries a giant reproduction of the Absolut bottle on a bed of acrylic ice. Billboards are placed near natural settings that are incorporated into the ad. The most dramatic one appeared in Dallas, where water may be more of a commodity than oil: The billboard was split down the middle by a cascading waterfall and read "Absolut on the rocks."

The Absolut campaign has revolutionized liquor marketing through its aesthetic strategy. Attesting to the campaign's success in creating a desirable visual image, and reinforcing its ties to the art world, individual items of the campaign (ads, promotional material and the bottle) have become collector's pieces; some are issued in "limited editions" that explicitly court this association with the art scene. A book published in 1996, the "Absolut Book," by Richard Lewis, memorializes the campaign from its inception until today. The Absolut campaign has been copied shamelessly by competitors, including Stolichnaya. It has been paraded and used for products unrelated to liquor. Yet more than fifteen years since its inception, the campaign seems as fresh as ever.

GAP, INC.: REVAMPING CASUAL RETAILING THROUGH AESTHETICS

The Gap, retail clothiers founded in 1969, for many years had a solid strategy of selling Levi's jeans and identifying themselves with the lower-case swiveled "gap" logo. It was successful in the growth years of the enclosed mall in the 1970s and early 1980s, when identification, creating a brand, was the goal.

But as the look changed with the times, The Gap's did not. It became an icon of outdated (1970s-dated) retailing. Its turnaround is noteworthy for its heavy reliance on aesthetics. "Celebrating 25 years of style" was emblazoned on its 1995 25th-anniversary annual report. In 1983, it changed its logo dramatically with fine, straight, long black lines all in upper case -- GAP -- not only changing a logo, but creating an entirely new look and feel. It created a new identity so strong that when one views the old Gap logo, it feels like another company entirely. By 1991, GAP had created an entire identity distinct from its prior identity as a place to buy Levi's, and had dropped the Levi's line entirely. It succeeded in creating its own distinctive and self-sufficient identity.

The Gap brand is only one of GAP, Inc.'s success stories. GAP, Inc. also remade Banana Republic, which it acquired in 1983. After the idea of the novelty store (here, the jungle-theme store) became hackneyed and unprofitable in the late 1980s, GAP, Inc. in 1990 transformed Banana Republic's aesthetics. The company became a successful retailer of casual clothing; by 1995 it had moved into personal care products, shaping the identity further into an appearance center. The Old Navy Clothing stores were introduced in 1994, with their own unique identity using warehouse-like aesthetics and a rough and unfinished feel to convey the message and feel of low prices, good deals, sturdy clothing, and outdoor appeal. GAP, Inc. thus uses a stratified segmentation of creating three separate, distinct identities for three separate target markets. At the high end, there is Banana Republic; at the low end, there is Old Navy; and in the middle (or upper middle) segment is the Gap brand.

It is difficult to copy GAP, Inc. or match it, because it is a proactive company. GAP, Inc. maintains its aesthetic edge by rotating product lines numerous times each year for all its retail stores. If something looks good one season that does not mean it should be sustained. The Gap stores in particular have an identity that is related to timeliness; its aesthetic is flexible, communicating a solid message: The Gap helps you create a casual appearance appropriate for the times. The changes are quick and the rewards are solid.

GAP, Inc.'s performance is impressive. In 1995, it opened 225 new stores and expects to continue strong growth in the coming years. By March of 1996, GAP, Inc. operated 1,701 stores worldwide including 907 Gap stores, 444 Gap Kids stores, 211 Banana Republic stores and 139 Old Navy Clothing stores. Profit gains have averaged 28% per year for the last decade. The creative team has grown to 80 designers (for the GAP brand alone).

In 1995, foreseeing and perhaps helping to facilitate a change to the "stainless-steel" look, and shaping an identity as an image focus as was done with Banana Republic, the GAP stores launched a large line of personal-care products packaged with a distinctive stainless-steel and matte-glass look that dazzles people. Playing on aesthetic elements and styles, the December 1996 Christmas campaign claimed for Gap stores "every color -- only GAP" Banana Republic urges: "Give color -- Give style -- Give edge." Both fit with the times; both play on aesthetic qualities of forms and styles. Most recently it teamed up with Digital City to produce scent samples on the internet. GAP, Inc.'s statement is clear; no longer will it be caught outdated.

CATHAY PACIFIC AIRWAYS: THE HEART OF ASIA

Cathay Pacific Airways was founded in 1946 in Hong Kong by two entrepreneurs, the American Roy Farrel and the Australian Sydney de Kantzow, who each invested HK$1 to register the airline. In 1948, Butterfield and Swire, one of Hong Kong's major trading companies, bought into Cathay Pacific and expanded operations. Today, Cathay Pacific is one of the world's leading and most profitable airlines.

Cathay Pacific's corporate identity did not undergo a comprehensive redesign for almost twenty years. In 1994, however, Cathay simultaneously revealed a new logo and livery and began a complete redesign of the interior of its planes, ticket offices, and lounges. The new aesthetic, designed by Landor Associates, came about after three years of market research and design and cost Cathay about HK$23 million (US$2.95 million) over three years.

Although the previous logo and livery were well-known and associated strongly with Cathay, research indicated that they did not express the airline's corporate positioning: an international airline based in Hong Kong that represents the best of modern Asia. This complex aesthetic impression was created through the blending of a look and style with themes and representations of core Asian values and cultural attributes.

The Cathay Pacific aesthetic is intended to be distinctly modern but also distinctly Asian, to "reflect the changing tastes of our customers." By the start of the 1980s, most customers of Cathay were no longer the traditional set of Caucasian expatriates living overseas or those visiting Asia. Today, 75 percent of customers are Asian, with more and more passengers coming from Taiwan, Malaysia, Thailand, Korea, Singapore, and Japan. Mainland China represents Cathay's fastest growing market. Chinese customers are clearly one of Cathay's target markets for the future.

Cathay's new logo features a white brushstroke (the "Brushwing") that calls to mind Chinese calligraphy while simultaneously suggesting the wing of a bird about to take flight. The powerful-looking bird suggests aviation technology, while the Asian identity comes through in the graceful brushstroke, signaling Cathay's personal, Asian style of service. The new logo thus symbolizes Cathay's two core strengths: technical excellence and superior customer service. The color green -- Cathay's signature color -- was retained in the new identity but modified to a cooler, unique shade that appears more stylish and soothing (Pantone Green No. 323). The look reinforces Cathay's modern, caring image, its international scope, and its Asian identity.

Color schemes in the cabins and lounges are also designed to create a soft, relaxing, contemporary, and modern Asian atmosphere. The theme relates more to the natural elements of water, flowers, tree, stones, and slate.

The new identity is supported by a stylish new global advertising campaign: "Cathay Pacific. The Heart of Asia". Created by advertising agency McCann-Erickson Worldwide, the television advertising features a variety of Asian drummers celebrating the new look and colors of Cathay Pacific. Set to a pot) soundtrack by renowned Japanese composer Ryuichi Sakamoto, the spot connects Cathay to its home in Hong Kong and closes with a special effect of the rendering of the new brushstroke logo. Print ads show a simple green background against which powerful metaphors such as a globe...