OK, you be the brand manager. Your customer base is in decline. Government tax increases have made your product five times more expensive than 30 years ago in real terms. Your marketing communications are limited because all forms of advertising and sponsorship have been ruled illegal. Many of your distributors are withdrawing your product from their stores. Best of all, next year your logo and all other identifying elements including colors and fonts will be removed from your packaging. Oh, and an alternative disruptive technology with a different delivery mechanism and lower health risks is rapidly eating into your market share. Now, go manage the brand.
This nightmare marketing scenario is the reality for big tobacco companies, which face an ever more restrictive economic and strategic environment to ply their trade. Whatever you think about the ethics of selling tobacco in the 21st century, no-one can deny the marketing prowess of these firms. Many of the key concepts of brand management – from fighter brands to brand tracking – can be traced back to the marketing departments of ‘Big Tobacco’. Despite apparently impossible trading conditions, the cigarette business is booming. Over the past five years, all of the big firms have outperformed most other business sectors in terms of profit growth and share price performance.
It takes some combination of time, effort, creativity and money for brands to successfully differentiate themselves from the competition — something brilliant in terms of functionality, design or marketing for a brand to stand out from the crowd.
Differentiation is worth striving for. Differentiated products command loyalty and a price premium. Some products are so differentiated, people will wait all day and all night just to get a hold of them.
But it’s not about differentiation at all costs. The question is whether consumers will pay enough for all your brilliance and investment? Can you drive enough money from your differentiation to cover your costs? As Michael Porter says in his book: Competitive Advantage: “Differentiation leads to superior performance if the price premium achieved exceeds any added costs of being unique.” It’s the net benefit that counts.
Disclaimers are everywhere. From the websites we visit to the products we buy and the ads we watch, the terms under which consumers read and receive are carefully wrapped in legal bubble-wrap to protect brands from liability. In an age of transparency, such disclosures seem prudent and very much in keeping with the demands of today. You know where you stand. The terms for what you are getting are laid out in explicit detail. Or are they?
At a time when so many consumers admit to having disclaimer fatigue and not checking the fine print, do disclaimers work to build trust? How much do customers really need to know to feel they are dealing with a brand that is being honest with them, and do disclaimers fulfill that purpose?
Every company that rebrands does so with high hopes. Their expectation is of course that this will mark a new chapter in the life of the business. Given how much is being invested, that seems more than a reasonable goal on their part. But is it realistic? How much change can a company expect to see through a rebrand, and where? This article by Laurent Muzellec and Mary Lambkin from some years back lays out some evergreen principles and reminds us that no two rebrands are the same in terms of the results they generate.
It depends on the degree of change. Muzellec and Lambkin draw a clear distinction between evolutionary rebranding – a brand refresh – and revolutionary rebranding. The former are the many tweaks that brand owners instigate to keep their brands up to date. These are a necessary and important part of keeping a brand current, and many brands make these changes without consumers being consciously aware of what’s gone on. While much of the onus here is often put on changes to the visual language, I see no reason at all why a brand cannot refresh other aspects of its brand structure and still remain largely recognizable as the brand that people know.
Branding Strategy Insider readers know, we regularly answer questions from marketers. Today we hear from Sylvia, a VP of Brand Strategy in New York, New York who writes…
“We have multiple brands (12) across the organization with varying identities. What are the best practices for deciding when to add or eliminate a brand?”
Thanks for your question Sylvia. In general, fewer brands are better. Having fewer brands reduces the required marketing resources and makes it easier to build brand awareness more quickly.
Each brand should have its own promise and positioning. Given that, each brand should have customer segments or customer need segments to which it most appeals. Brands that have similar or the same brand promises or positionings are candidates for rationalization. Further, if the products or services sold under those different brands are similar or the same, you should consider consolidating those products or services under one brand.