I like coffee, and I’m not a snob.

I enjoy Starbucks, but I’ll drink almost any other brand, including drip from a greasy spoon.

In recent years, I’ve stopped dreading our stops at McDonald’s for our kids while traveling to and from our vacations. When McDonald’s got serious about coffee a few years ago, it put Starbucks on notice. I read the recent Harvard Business Review interview with Starbucks CEO Howard Schultz, and he had sharp words for his lower-cost competitors:

“… McDonald’s and Dunkin’ Donuts were on the very low end. Let’s characterize them as willing to do anything to capture or intercept customers – free coffee, coupons, say anything, do anything. We respect them as companies, but we didn’t respect their practices.”

I thought that part of the interview sounded a bit whiny. It is business, after all.

Recently, I witnessed McDonald’s “interception policy” firsthand while on a weekend getaway with my wife.

We stopped at an interstate oasis about a hour from our home. In addition to the gas station, the rest area had several shops, including Starbucks and McDonald’s. The two were less than a dozen steps from each other.

If you were standing in line at the Starbucks, however, you couldn’t see the McDonald’s counter, because it was around a corner.

But McDonald’s had put up a visually engaging menu on an empty wall that Starbucks customers saw while standing in line to order – its interception policy.

The first thing I observed: the latte that I planned to order from Starbucks was almost $1 less at McDonald’s!

See the two photos.

I would argue that McDonald’s creative for their menu is more enticing than is Starbucks’.

I toyed with the idea of stepping out of line at Starbucks to walk around a corner to McDonald’s but didn’t. I bought at the premium price. But as soon as I began drinking the latte, I thought, “What am I thinking? Why am I paying more for the same thing?”

I’m not sure that’s the power of a brand. It may simply be a testament to my laziness. Either way, Starbucks won that afternoon.

So can the premium (high cost, high perceived value) survive in a down economy?

Melissa Parks, CZ’s editorial director, thinks so: “The reason I would NEVER buy a latte from McDonald’s is because I associate everything that McDonald’s produces as artificial. Case in point: their Chicken McNuggets. That’s not real chicken. So, when I contemplate drinking a latte, I question if it’s going to be a real latte, or if it’s riddled with all that artificial stuff that keeps their costs down.

“Another reason I would never buy a McDonald’s coffee is because I look at the moms on the playground who drink it, and (I’m being completely honest here) I don’t associate with them. Their experience, based on my prejudice, is not my experience. If I began drinking McDonald’s coffee, I would belong to a different tribe – a discount tribe, and one I really don’t want to be part of. I like being part of the Starbucks tribe – even if it means not drinking a cup every day. I’d rather have a Starbucks latte a couple times a week than a McDonald’s latte every day.”

Customers in North America are finnicky, aren’t they?

In the wide world of the web, how do you ensure that when a consumer hops on a search engine they find you first?

Bruce Philp, branding guru to ING Direct and co-author of The Orange Code says that the answer is differentiation. Here in the third of three interviews, Philp talks about how the Internet has changed brand management–and relinquished control to the consumer.

Is the notion of differentiation irrelevant in a “Google-search” world?

Bruce Philp: Trout and Ries would have been hailed as geniuses if they’d described the concept of positioning about twenty years later than they did. Search is the reason why.

Positioning stipulates that a brand be recognizable as one of a pool of comparable brands, and that this pool is defined by a particular kind of user.

Can you give an example?

We don’t think about Levis as competing with all forms of lower extremity coverage, or even with all kinds of pants. They compete with other blue jeans, and we consider what makes them different in that context.

That generates more powerful differentiation, because it forces relevance. It becomes not just a matter of being different, but to whom and against what set of expectations.

How do you win at a search?

To win at search, a brand absolutely must think first about the tribe it’s selling to (to borrow Godin’s word) and their particular expectations and definition of themselves. That discipline directs effective search strategies, but it also directs focused branding.

It seems impossible to manage how people perceive your brand. Is that true?

I contend that it’s impossible to manage a brand anymore. Brands are no longer taught in a one-way, didactic context like they were in the age of advertising. Instead, they are observed across the full spectrum of their behavior.

In effect, this means that everything a brand does adds to its meaning. That’s because there are so many channels open–including the Internet–and because the social consensus that advertising is the ‘official’ voice of a brand is broken.

What happens if you try to strictly manage your brand?

A brand becomes a totalitarian state with a massive bureaucracy focused on control. It moves slowly because every single tactic is a decision. It’s an unsustainable approach for any brand that has to do business with consumers in a competitive context, when disruption is coming at it faster and faster.

When Google can tell me not only what people have said about the brand in the last days, weeks and months, but what they’re saying right now, it’s hard to imagine that the brand as a fascist state can stand.

What’s the alternative?

Manage a brand from principle. This is the constitutional model I proposed in The Orange Code. Instead of creating a book of rules, we create a declaration of principles. We hire for it, we reward it, we tell the world about it so that we’re held to account. Over time, the organization begins to organically behave according to those principles. They become its culture.

Thus, in a world where everything an organization does accretes to the brand, that entire organization will very naturally get it right most of the time.

Bread Poets is a bakery in Bismarck, North Dakota.

Its growth is a fattening symbol of the post-Atkins-diet economy.

In 10 years, the bakery has baked and sold more than 100 different kinds of breads, though today only 42 kinds of bread are actively made at various times of year. For example, the bakery occasionally makes “challah” bread, which is part of the Jewish tradition.

Bread Poets bread is comfort bread, food for hearty folks, the kind of carbs that make you feel warm about life, especially during the long, bitter winters of North Dakota. You need lots of sweaters. Not just for the cold but for the layers of lard that you’ll need to cover up once summer comes – around July.

The bakery, by the way, also makes cookies and scones.

I’m originally from Bismarck. In early March, I yanked my youngest son out of second grade for a week-long visit to my parents. It was 15 degrees below zero the night Cory and I drove into my parents driveway. Without the wind chill. It was March 11.

The next morning, my dad cut me a slice of cinnamon bread from the Bread Poets bakery. I had another two slices. I’d not heard of the bakery before, even though I travel to the Dakotas once or twice a year. I thought the bread was a new phenomenon.

I recently talked with Jon Lee, the owner, who said it took an additional four years prior to starting the business in 1998 for him to perfect his first set of recipes. Jon said, “It was about a four-year process to not only to learn how to make bread, but how to brand the business, and build the business model from scratch.”

Essentially, it took a total of 14 years to become an overnight success, at least in the Bismarck area.

Now Jon plans to sell Bread Poet franchises. He hasn’t sold one yet, but my guess is that just like it took 14 years to perfect the original bakery, it will take some time to learn the art of franchising. A bakery and a franchising company are two completely different types of businesses.

But he’ll succeed. If you look at the logo of Bread Poets, it’s in the same design family as that of Panera Bread, a popular franchise where I live in the Chicago area. However, Jon is after a much different kind of franchise owner than is the person who might ante up for a Panera Bread.

In establishing the franchise, Jon has done the hard work of capturing the essence of the brand. Bread Poets is not so much about the bread, but about what baking bread means to an owner-operator of a franchise.

The promise of a Bread Poet franchise is the promise of a deeply satisfying lifestyle. It’s about creating a tangible product in an intangible world, something you can see and touch and smell and taste. It’s about the satisfaction that comes from making people smile (and much more thick, I might add). It’s about an integrated life that is one part craft and one part home. It’s as much “being” a franchise owner as it is owning a franchse. It’s really about becoming the Bread Poet in your community. Trust me, North Dakotans are not a deeply reflective lot, but there’s something profoundly contemplative in the Bread Poets brand.

See for yourself at www.breadpoets.com.

There is a new SARS virus: the Serious Assumptions Regarding Slang.

I am referring to the increasing use of the word guys in businesses across America. Throughout the service industry, from restaurants to airlines to retail sales, professionals commonly address their customers as guys.

Think about the time you last entered a restaurant:

You were probably greeted with, “How are you guys this evening?”

After you were seated, a server asked, “Can I offer you guys something to drink? Would you guys like anything else?” After paying the check: “I hope you guys will come back again soon.”

True, guys feels friendly; it’s a way people attempt to warm up to their customer. The problem is customers are not friends. In time, some might become friends. But it’s presumptuous to assume that upon your first encounter. Customer service is built on respect—forged through experience and acquired over time.

Notice the difference in each of the sentences when guys disappears:

• “How are you this evening?”
• “Can I offer you something to drink?”
• “Would you like anything else?”
• “I hope you will come back again soon”

The above demonstrates professionalism, respect, and courtesy.

Sometimes the variations of guys sound silly:

For example, at the end of a meal a waitress told our party, “I’ll get you guys’s check right away.”

Is guys’s a word? It was part of our waitress’ hackneyed lexicon. The impression she left didn’t match her intentions. Impressions last. Most of us would be hesitant to go into a client’s office and announce, “I have a new product to recommend to you guys.”

Nor would we report to the board of directors, “I have an announcement you guys will like.”

The specific words we use communicate volumes to those who hear us—and those we want to build lasting relationships with. Consider what messages you want to communicate to your customer, then choose the right vocabulary.

Is “guys” necessary, helpful, appropriate?

What do you guys think?

Dr. Parkinson is professor of TV and communications at Northwestern University and co-author of Becoming a Successful Manager.

Over the past decade, I’ve digested pretty much every book and article and blog that you can imagine on the subject of branding and marketing.

I’ve also interviewed by phone or via email many best-selling authors on aforementioned topics.

I learn something new from each one.

I tend to take away more from the conversation with the author than I do reading his or her book. When you ask the author to clarify a point in the book or give a specific example, often you strip away the flabby writing from the nugget of insight. Most books should be only an article in length. But the publisher wants at least 250 pages, so authors write to fit the book-length medium.

In some marketing writing, though, there’s a common thread that annoys me:

It’s as if the authors all went to the same convention, identified all the “successful stories” and then starting writing. Here are a few of the wake-me-when-they-are-outdated marketing stories:

• Facebook (still looking to make some real money in social media);
• Google (the big dog on the block; who can argue with its success?);
• Starbucks (closing 600 stores soon; see our interview with John Moore: http://www.czmarketing.com/brand/);
• Apple (the brand with design panache);
• SalesForce.com (the clunky convenience of online CRM); and
• Kiva (the creative online micro finance nonprofit).

Before the above, there was:

• Krispy Kreme (now a not-so-hot stock);
• Dell (trying now to reinvent itself);
• Amazon (now just another boring stock); and
•Too many others to mention.

What’s hot is touted as the pinnacle of truth for marketing your organization: “Just follow the marketing principles of this hot company or you will become irrelevant and die a thousand deaths.”

No one writes those words, but that underlying schtick is occasionally assumed in the writing.

Here’s my grumpy point: Growing an organization is hard work. It’s tedious, sometimes monotonous. Not very sexy. And it takes much longer than you think. And just when you think you’ve got it figured out, the demographics or economics of your prospects change. Then you’re forced to regroup and make adjustments in real time.

No doubt Starbucks and Google and Apple have lots to teach the rest of the world. But it’s important to strip out the bravado from the principles and ask the real question: What, if anything, is really relevant to our situation?

Maybe the most important purpose of reading about today’s hot companies is to inspire hope. Growth is possible. Our future can be brighter than our past.

One size does not fit all.

You’d think advertisers would know that, before spending billions aimed at so-called Soccer Moms. Research indicates most women aged 25 to 45 don’t identify themselves as such.

Whether or not you’re marketing to women exclusively, tailoring your message to the segments of your audience is critical.

Holly Buchanan, co-author of The Soccer Mom Myth – Today’s Female Consumer: Who She Really Is, Why She Really Buys, talked to Brand & Strategy about identifying your customers’ personas and giving them what they want and need:

Brand & Strategy: You argue women want to be acknowledged as consumers with individual needs, not just as members of the female demographic. Is that also true of men?

Holly Buchanan: Everyone wants to think that advertisers are speaking directly to them. But women, more so than men, don’t want to be treated as stereotypes. Their lives are so much richer and more complicated than that. Images and messages that will resonate with them are those that reflect how they see themselves.

So how do you do that?

You begin by creating what we call personas. You can typically identify four or five that incorporate the varied lifestyles, needs, motivations, and buying processes of each of your audience segments. Then you can address each in the manner that will appeal to that specific audience. But be careful not to fragment your message so much that you sacrifice consistency.

What are some of the personas you’ve identified?

An oversimplification would be to equate them to the Myers Briggs Type Indicator, which categorizes how people process information. Are they Left-brain or Right-brain? Spontaneous or Methodical? Humanistic or Competitive?

It’s not enough to identify how your customers are the same—you also need to know how they’re different. You need to do what we call “uncovery” to get to the whys behind customer needs and characteristics.

Seems too complicated to reach each persona with a unique message.

The Internet is a powerful way to connect to different segments of your customer base. Your web site is the most effective place to start. The key is to provide clear pathways so that each persona can find the information they’re looking for when they need it. Then your visitors can self-select the experience they want.

How do you determine what it is they want?

Start by listening to your customers, not just talking to them! Frequently Asked Questions (FAQs) and objections are a great place to begin your research—they tell you what people want to know and where they get hung-up in the buying process. Make sure you address these upfront! And don’t shy away from addressing any drawbacks or “This isn’t for you if … ” scenarios.

If you’re upfront about the negatives, folks are much more likely to believe you about the positives.

What about social media?

Social media has put the consumer firmly in control of the buying process. You can also find out what people already are saying about you on blogs and consumer feedback forums.

If you don’t include your consumer in the “conversation” they will tune you out.

You talk about how “Everything is marketing” and there are hundreds of touch-points. How can you control them all?

You can’t control everything—but you better control everything you can. Small details can be huge in the midst of a purchasing decision—everything from the lighting in your store, the friendliness of your operator, to the cleanliness of your washrooms. The challenge is to not just meet your customers’ expectations but to go beyond that—to delight them.

We’ve found that if you can meet the expectations of your female customers, you will have exceeded the expectations of your male customers.

To read the first part of this interview, click here.

The surest way to fail is trying to be all things to all people. You can’t stake out your brand with a mish-mash of promises and services.

According to Harry Beckwith, author of Selling the Invisible, and You, Inc, you can only be one thing—and there are eight positions of power an organization can choose from. In this follow-up interview, CZ President Dave Goetz asks Beckwith to differentiate the positions and how to pick one that can work for you:

Brand &Strategy: Are there a limited number of positions your organization can possibly have?

Harry Beckwith: I believe there are eight positions of power in any market—and you start by focusing on one:

• Pioneer/Leader vs. Innovator;
• Premium vs. Discount;
• Specialist vs. Generalist; and,
• Performer vs. Service.

What’s the difference between the Pioneer/Leader and the Innovator?

The industry leader is big and well established, whereas the innovator is small and less established. Industry leaders rely on an established image, like “good,” “solid,” or “consistent.” The innovator, on the other hand, can be riskier. Tired of the old way of doing things, they think and execute outside the box. Apple is an excellent example of this—coming in and going after IBM.

What about the difference between the Premium and Discount position?

It’s based on pricing. It’s the difference between Tiffany’s and Target. Regardless of how you’re positioning, you want to be aware of your pricing and what it communicates. But your pricing, in most cases, doesn’t drive your message.

The premium priced position is desirable in a lot of ways because it communicates your brand quickly. The consumer knows what they’re getting, and even if it’s a lot of money, there’s a sense of security in that.

Why is there security?

No one’s going to fire you for choosing the best. And if you’re the best, you’re the one chosen. Take McKinsey Consulting: They’re master of the universe and will come up with a hell of a solution for you—but it’s going to cost you a lot.

There are also arguments for choosing a low-priced brand: “I’ve only got so much money, but I can’t do it myself.” Or, “Yeah, they’re low priced, but they know more about it than we do. They can help us, and it won’t cost us a fortune.” Let’s face it, there’s always a market for the lowest priced web developer, if all you want is something that runs, and it doesn’t matter what the product looks like.

But generally speaking, the Discount provider is not among those stalwart positions.

Is there also a sense of security when you choose a Specialist over a Generalist?

Yes, because a jack-of-all-trades can’t be a master of one. You want somebody who is highly experienced and highly specialized. All other things being equal, the more they know about something, the more they work with it, the more proficient they probably will be.

If you have a detached retina, you don’t want a general M.D. You want a detached retina specialist! There’s a security that goes with that.

When it comes to choosing a Performance or Service position, what must organizations consider?

The Performer is not concerned about a touchy-feely experience but focused on high levels of performance.

On the other hand, the Service position is client-oriented. They may not offer brilliant solutions, but they provide valuable solutions along with a good experience. When organizations focus on service, clients experience a high degree of comfort.

Why then do people choose the Performer?

Because everybody wants the best. Sometimes all we really want is a positively good outcome.

What if the outcome is great but the experience is terrible?

Some people find that the outcome really wasn’t worth it. I think people consistently underestimate how much we value the experience—and how little we value the performance. Often it’s difficult for us even to tell if it was a great performance.

For example, you hire a contractor to redo your slate in your bathroom. You get six different people in to do it. Now, there could be some real differences, but really I don’t know who does the better job. However, I sure know who I felt better working with. If so-and-so screws up, I like working with him because I can tell him, and he’ll fix it—and fix it properly.

We tend to put on our rational hats that values cost-benefit and performance outcomes. In the process, we lose sight of the fact that we’re human beings who like to be respected, like to feel good, and like working with people we can trust.