For the three subscribers I have, I’m taking a quick break from mindless posting to share a project I’ve built on NYC-San Francisco flights. It’s called 10 Benjamins a Month.

I’m a frugal person, and since graduating I strive to save $1,000/month. With my limited income it was difficult, often requiring weekday spending of $5 per day (i.e., cans of Tuna for dinner). But by recognizing my daily spending threshold, it helped me reach the $1,000 savings mark.

Often, friends would ask how I manage to save so ruthlessly. The site executes a basic calculation of daily spending/saving rate, something so simple that many of us neglect.

If you’re curious how I made it: it’s one page of code using PHP. Check out this tutorial on PHP and HTML. It taught me everything I needed to know. The design is a bit more complicated, based on CSS. Shoot me an email and I can explain further.

Interesting fact: Tide has 40% market share (i.e., 40% of Americans buy Tide). Though I find the stat mind-boggling, that 120 million Americans will pay more (70% more) for soap, here’s a more impressive fact: Tide had 31% market share in 1952.

Much like Coca-cola, Tide has dominated for many decades. Which leads to the question (first posed by Marginal Revolution a while back): why is Tide so widely popular?

I’m no detergent expert, but here’s what I’ve dug up:

1. People are Lazy, and Tide just works

• Detergent is one of those categories where only basic needs must be met (i.e., clean my clothes). Once it works, there’s little reason to switch (compare this to buying a car or computer).
• Switching is risky. When I pick an airline, for example, a poor choice will have limited consequences. Picking a generic detergent brand that destroys your wardrobe, however, is a nightmare.
• Tide dominates on “basic needs” (I know it works) and is often a safe first-choice. Academics/consultants like to call this “brand equity,” where Tide, at minimum, will perform at or above my expectations.

2. The price premium, 20%-100%, is not a deterrent.

• Detergent is cheap, so a 20% price premium of $3 doesn’t make a difference for a purchase that will last several months. Even extremely price-conscious consumers, who only buy generics, will shell out a couple extra bucks for Tide or Crest (refer to brand equity).

3. “My Mother used tide” (i.e., heritage/legacy)

• Because of Tide’s legacy (recall their 30% market share in the 50s), the brand’s awareness and past-trial is extremely high. Faced with uncertainty in the detergent aisle, Tide, again, is a safe, familiar choice.

4. P&G (owner of Tide) spends a shit load to maintain market share

• P&G spends $100 million a year (about 5% of the $1.8 billion of Tide sales) on every form of advertising imaginable: TV, billboards, buses, subways, online banners, and micro-sites.
• Sponsorships of NASCAR, soccer leagues, and charity events.

5. Relentless product development (i.e., create 50 versions of Tide)

• Tide’s $2 billion/yr R&D creates numerous product lines for Tide (much like Pepsi developing every imaginable flavor of cola)
• These fancy new technologies only marginally improve Tide’s cleaning ability. In reality, beholding 10 variations of Tide on the shelf creates an illusion that Tide is an innovative and tech-forward brand (and a safe, leading choice).

6. Shelf Space

• The sea of orange in the picture above is a familiar sight. P&G battles with other brands to capture shelf space, and if there’s a wall of orange in front of the consumer, the more likely they will buy Tide.
• P&Gs market dominance (i.e., their 40% market share) allows the company to negotiate more shelf space relative to competitors.

I’m surprised I hadn’t heard about this 2007 study on branding and search engines.

In the study, participants searched for terms on Google, Yahoo, and MSN, but the researchers modified the sites so that identical search results were presented. Participants were asked to rate the accuracy of the search results on each site.

Even though the search results were identical, participants rated Google, Yahoo, and MSN unequally. When searching for “manufacturing home,” they rated Google 50% more precise than MSN and Yahoo.

This a marketer’s dream: consumers rating your product favorably even though its functional performance is identical to competitors.

The Google results do not surprise me. I’ve noticed many superior brands outshine inferior competitors,  even if product performance sucks. It’s a engineering conundrum. How can you compete against a well-branded competitor when designing a better product means nothing?

It’s exactly why Warren Buffet invests in Coca-cola, and he has a quirky parable to explain his logic, “if someone were to give you a few billion dollars and ask you to compete with Coca-Cola, you’d find out quickly that it simply cannot be done.” If you’ve ever witnessed Coke vs. Pepsi taste tests, you would probably agree with Buffet. Even if both glasses are filled with Pepsi (i.e., identical search results), testers will exclaim that they are 100% sure that Cup 1 contains Coca-Cola and it is far superior to Cup 2 Pepsi.

Other favorite examples:

• Tide Laundry Detergent (40% market share) cleans no better than the others
• Budweiser and Miller competition has little do with taste
• Intel processors, for general purposes, perform the same as AMD

It’s impressive. How do companies create strong brands, causing consumers to ignore the functional reasons that should stimulate purchase?

I think the answer lies in the direction that companies are beginning to take brands. When I heard Rob Walker speak on branding (per my last post), he mentioned the Dove for Real Beauty campaign. It epitomizes what  brands are beginning to represent–a emotional stance and position on the world. Dove, an intangible concept, takes a stance on beauty. Google, in its branding force, takes a stance on the organization of information.

And if the brand manager’s done a good job, the consumer is aware of this positioning subconsciously and associates Google favorably over Yahoo and MSN, even if the sites perform identically.

Whether intentionally or not, Marginal Revolution asked this same topic to readers: Why is Tide so popular? It owns almost half of the detergent market, and “I couldn’t name one supposed feature of the product and I’ve been buying detergent my whole life.”

I’ll wrap my head around the Tide enigma for the next post.

Last weekend I witnessed Rob Walker, of Murketing and Buying In fame, give a talk on personal branding.

He was to speak to the proliferation of personal branding, how we are managing ourselves just like MBAs manage detergent. Specifically, would this be an insult to our humanity, to craft our lives as a brand, transforming ourselves into this guy?

Here’s the gist of his theory on the growth of personal branding:

We are motivated by an audience: pre-Internet, if we were to invest time into blogs, Twitter, or Facebook, the expectation would be a direct transfer of wealth.  That’s changed. Be it our innate desire for credibility or validation, the “I’ll follow you if you follow me” mentality shifted the focus off of money. It’s now about building an audience, and the bigger the better.

Why now? The Internet made it easier. We’ve got tools like Blogger and Twitter to br0adcast ourselves. And we can measure everything just like real brand managers. Instead of sales, we can track subscribers, followers, comments, technorati, diggs, and friends.

With this measurement, we can be brand managers…of ourselves…truly participating in a market dynamic, where winning is reflected by the size of our audience and manufactured authority.

So is this a bad thing, treating ourselves as an object to be marketed and positioned? Rob was on the fence. But when I see things like this, I certainly agree:

(This is pulled from front page of the most popular personal branding blog on the Internet)

It’s one thing to play the numbers to sell a toaster–but when we are exploiting ourselves to the game of “most twitter followers,” I can’t help but be reminded of every villain from “The Fountainhead” and “Atlas Shrugged” whose personal value was extracted from others rather than himself.

The unrelenting quest for external validation, constantly shaping our personal brand, is only a distraction from the hard-work that will ultimately make our personal brand extraordinary.

Last weekend, I discovered TopShop, the clothing retailer that recently invaded New York City.

Prior to my inaugural visit, I had never heard of the store. Opening its first US store last month, TopShop had the entire city anticipating its arrival. The store opening on 4/2 in SoHo was a spectacle, with giddy shoppers queuing around several blocks. Twice. Why? I hear the same message from everyone: “I Love TopShop.”

So what’s the deal with this store; why is it so popular? When I walked in, it seemed like any other retailer, except that the sprawling 4-floor building was crammed with frantic women carrying arm-fulls of garments and a 45-minute wait to enter. The prices are contrary to any marketing framework–they have $15 t-shirts and $800 dresses on adjacent racks.

TopShop, on the surface, is just another high-turnover retailer like H&M and Zara. As one that does not follow the fashion scene, the pervasive love for the brand escaped me. But after some research, here’s what I learned:

History

TopShop is an established UK-based retailer, founded in 1964. In the 1990s, the mainstream considered it unfashionable, cleverly labeled “FlopShop.” But it recently turned business around, even hitting profitability in 2008 when almost every retailer was in the red.

It’s run by Sir Philip Green (recently knighted), a retail mogul that owns several other clothing businesses. Like H&M and Zara, TopShop operates on an incredibly fast product cycle. New products are designed, manufactured, and shipped every week (Imagine Apple doing the same–creating a new laptop every week!). This high-turnover allows TopShop to stay on the cutting edge of fashion, where trends emerge weekly, not seasonally.

The Business

By stocking both $15 and $800 items, stores are packed with a spectrum of fashionistas, ranging from tweens to pregnant mothers (yes, they have a maternity line). Most clothing retailers segment and target by age group, but TopShop seems to focus solely on intelligent, savvy bargain-hunters. The $800 dress is still a fraction of the cost for the real thing. They openly copy major designers who would charge $8,000 for the same dress, and TopShop may even bring to market faster, starting the manufacturing process right after it debuted on the runway in Paris. This copy/innovation amounts to 7,000 lines every season.

Sexy Brand + Brilliant Marketing = Emotional Devotion

But what is unique about TopShop from H&M and Zara? I believe that this is where TopShop’s brand and marketing are critical to driving loyalty.

Even though TopShop manufactures new lines weekly, runs are intentionally reduced, creating a “‘dynamic of desperation’ that has customers feverishly zooming in on sought-after items.” And every week, they send 300 limited pieces of clothing to TopShop’s flagship store to make them “desirably rare.” In short, there’s some good marketing going on: manufacturing scarcity, prestige, and exclusivity via the availability of product. The in-store experience is also Disney-esque. The NYC store has a hair-salon, DJ booth, weekly parties, and style consultants.

But how did TopShop create such awareness and loyalty that customers would line-up and circle blocks before it even opened its doors? From my perspective, it’s nothing special–just time-tested tactics. Before the NYC store opening, a van canvassed the city, handing out gift cards and bags. It created such a buzz that bloggers tracked van sightings. TopShop also plastered the city with billboards and advertisements–manufacturing brand awareness. And they threw a fancy party with celebrities on the eve of the store’s opening (it’s old-school, but hey–it worked). It all culminated into press coverage and live blogging of the NYC store opening.

In short, TopShop created consumer devotion that parallels Apple and Harley-Davidson fanatics. Combine unique manufacturing and scarcity marketing to a trendy industry like fashion, and you get obnoxious brand loyalists. How often do you see statements like this about brands (even the popular ones)? “I love you, Topshop, and I thank God each day for the love that has bound my heart and life in the fellowship of dressing-up. I will love, honor, cherish and visit you always.”