I have had the pleasure of frequenting many types of establishments during my (over)stay.  Restaurants, malls, grocery stores, and the occasional pub have filled my liesure time.  An interesting marketing reality set upon me recently — I have no clue what brands are mainstream, trendy, elite, or obsolete.   I am officially brand agnostic, well almost anyway.

Initially, I stared in amazement at the many choices.  Places to eat.  Clothes to buy.  Slowly but surely I began to decipher the brand code.  First subconsciously, then once I realized what was happening, I consciously paid attention.  My determined brand affinity is being shaped by existing American brands, brand association, price, and crowd.

Nike is Nike
Some things feel like home.  Seeing a familiar face is rare.  Seeing a familiar brands is not.  McDonald’s are dotted around the city.  You can find Nike and Puma  in the Stadium Sports Store.  You will find Sony, Samsung, and Toshiba within the Siba Electronics store.  And although I prefer the local draft beer, you can find Budweiser or Sierra Nevada at The Bishop Arms.

Like Brands
The second observation is relating brands in Sweden to brands I know — brands I have catalogued in my mind.  Some brands seem similar to brands I am used to.  Their branding is very similar, therefore I am cognitively drawing a conclusion the product is too.  For example, there is a restaurant here called Max which is a burger franchise.  My initial brand perspective was Max’s is like McDonalds, because of similarities in branding.  I don’t know how it stacks up to Mickey-Ds, but the similarities made the restaurant inviting.

Price to Price
The third perspective is relating products base on price.  The Swedish currency is Krona (kr) or Crowns.  Currently, the exchange rate is about 7 kr to one dollar (which is pretty weak).  If you can divide by seven, the conversion is pretty easy.  In my case there is an App for that, and I loaded the Converter App to my iPhone .   My initial reaction was a bit of price shock as I compared Swedish goods to those from home.  A pint of Spendrups beer is about $7 (49 kr).  A small pizza at one of 43 area pizzerias is $11 (79 kr).  A new Wii goes for just over $300 (2,190 kr).  A bottle of Coca-Cola is $3.50 (25 kr).

There are not many “deals” in Sweden, but once you get acclimated to the price difference from home, you start to relate  price product to product.   This is no different than at home.  If you find out a prime rib dinner is $8.99 or a pint of beer is $1, you may get suspicious to the quality of the product — the quality of the brand. 

Lemmings Rule
My last observation is the people walking around Trollhatten.  By taking note of people on the crowded streets you get the idea of what is fashionable.  By glancing in a restaurant, you can tell if it is popular — or not.  These visual queues begin to reform your brand impression.  You begin to connect brands that are popular by personality type, age, and social stratus.

The Inner Brand Voice
Over time these impression will weigh on your personality profile and begin to affect brand choice.  You begin to identify with brands based on who you are — your consumer underpinnings.  If your personality is “frugal”, you will begin to identify with less expensive brands and make choices accordingly.  If you consider yourself fashionable, you will want to identify with the latest trend.  This may be more difficult, because trendy in Sweden is a far cry from New York.  You will need to rethink your fashion choices.  You may go through all the different modes I described, and finally, just pay top Krona for something, assuming a high price equates to fashionable (an interesting form of brand insecurity).

In life we pass through life stages, like moving out of the parents house or having a child, and find ourselves in a naive situation — not knowing which brands to choose.  We build brand affinity based on queues in our life.  Sometimes we have the time to build brand knowledge.  Time to research.  Time to talk to people.  Time to choose the right brand based on who we are.  In other situations time is not a luxury — it is like we were dropped into a foreign country and we have to adapt.   Make choices quickly.  Rely on subconscious brand queues and behavioral underpinnings to make the choice.

McDonalds is taking on all comers – Starbucks, Dunkin Donuts, Caribou Coffee, Biggby, and don’t forget the Canadian underdog Tim Hortons.  And Mickey D’s placed a $100 million down to gain share in the crowded coffee field.

It is a David & Goliath marketing battle with a twist.  While McDonalds pummels consumers with commercials, ads, web sites, and free Mocha Mondays, Starbucks is clinging to market share with branding, local activation, and advocacy.  It’s budget versus branding. 

Over the years I have worked for marketers with so much media budget, they became lazy.   The would generate safe, simple commercials and pound the message into consumer’s heads using mega-media weight.  They accepted mediocre ideas, and did not strive for the breakthrough idea, because they did not have to.  Think about it — if a marketer has $100 million to spend, the budget seems more important than the idea.  Usually media models rule the day, and creative takes a back seat.  But what if a marketer had only $10 million or $1 million.  To be successful the brand campaign needs to break through idea to get through the clutter due to minimal media support. 

So back to the coffee war.  After round one Starbucks appears to have survived the initial body blows.  Per the Wall Street Journal, the result of round one is that Starbucks is doing a little belt tightening and increasing prices to offset single digit decreases in store sales and traffic.  Although McDonalds may have impacted Starbucks’ market share, the economy probably played as much if not more havoc on their business.

On the other side of the coffee skirmish, McDonalds McCafe is thriving accounting for 5% of the fast-food giants sales (up from 2% two years ago).  It appears McDonalds $100 million was well spent.  It will be interesting to see where market share came from — was it the premium brands (e.g. Starbucks, Caribou, Biggby) or budget (e.g. Dunkin Donuts, Tim Hortons). 

Keep in mind this is just round one.  It will be interesting to see what long term effect McCafe’s media blitz has on the industry.  As other competitors increase their exposure and the economy recovers, will consumer spending revert to the pre-recession norm, or will drive-thru McCafe Mocha’s rule the day?