The Blake Project, the brand consultancy behind Branding Strategy Insider, delivers interactive brand education workshops and keynote speeches designed to align marketers on essential concepts in brand management and empower them to release the full potential of the brands they manage.
Brands retain value from their legacy providing they are still seen as relevant and interesting, providing they are still competitive and providing they retain goodwill. Or if people have had enough time to forget why they failed in the first place.
In other words they can recover if they have enough momentum, or they can be reborn on the back of nostalgia, but once they’ve flatlined, and particularly if they have been in that state for some time, they can be very difficult to resuscitate.
Take the case of the Playboy brand. It’s powerful, sure. And it does have significant heritage. It’s logo is recognizable anywhere and there is huge history there. But can it just continue to trade on the value it had? Doubtful. It is, as Adam Gordon rightfully points out, “a classic failure of industry foresight” and even though Gordon observes that “Brand is value stored up in the past to be reaped in the future”, I don’t share his apparent optimism about the brand. Maybe you do?
Playboy cannot realistically expect to carry on as before and succeed under changed management. Declining sales would suggest to me that Playboy is no longer relevant, no longer competitive and its goodwill is running out fast. In fact, it has probably already traded on its past for too long.Read More
When Rosser Reeves first proposed the Unique Selling Proposition many decades ago now, the world was a very different place. Products still had the potential to actually be different, advertising was largely confined to mainstream channels and brands were, for the most part, identifiers. But with the evolution of best-practice manufacturing, the fragmentation of channels and the increasing development of brands as monikers for consumer lifestyle, I can’t help wondering whether the USP is now redundant.
Clearly I’m not the only person whose had thoughts along these lines. In a lengthy and detailed post, Paul Simister summarizes and evaluates the arguments he’s seen advanced by others to replace the USP. Among the suggestions:
- A short statement to differentiate your business based on what you stand against.
- USPs don’t exist in markets where the businesses are more interested in copying each other than in being different.
- Create a Unique Story Proposition that focuses on what matters to the customer and what matters to you
Ironically as the performance pressures on CMOs mount, the onus to achieve differentiation, given the evolution of market dynamics and economics, has never been greater … or harder. I think though that we must now assume that any product that shows any level of distinction will in time be caught, matched and even surpassed by its rivals. So the future doesn’t lie in fashioning competitor-proof products. Nor does it lie in fashioning slogans that capture people’s imagination. It seems to me that too many people are trying to evolve an outdated formula to a landscape that bears no resemblance to the context within which it was fashioned.Read More
We are often asked about the impact of brands on financial, business performance and growth. Enough research has been conducted on this over time throughout the world that one could write and entire book on this subject. I will not do that here. But I will be a bit more detailed than I have in the past about this. The bottom line is that strong brands have a very strong positive impact on financial and other business results. Following are data points on some of the ways in which this occurs.
A recent Nielsen study demonstrated that strong brands command higher loyalty rates. Consider the lifetime value of more loyal consumers. The study also showed that strong brands generate three times more market share than brands with moderate reputations.
Millward Brown Optimor reported that its BrandZ Top Most Valuable Global Brands significantly outperformed the S&P 500 in 2013.
In another study, Feng Jui Hsu, Tsai Yi Wang and Mu Yen Chen examined the relationship between brand value and stock performance using Interbrand’s Global 100 Brands ranking. The brand portfolio outperformed the S&P index in various holding periods and generated a significantly positive risk adjusted alpha.
An earlier study (for the period 1994-200) reported by Thomas J. Madden, University of South Carolina, Frank Fehle, Barclays Global Investors and Susan Fournier, Boston University, found that firms that have strong brands create value for their shareholders by yielding larger returns with less risk than industry benchmarks.
Another study conducted by Andrea Guerrini, PhD, assistant professor at the University of Verona and Francesco Zaffin, management consultant, looked at the top 60 brands in Interbrand’s annual ranking between 2006 and 2010 and identified positive correlations between brand value and share prices primarily in the intangible product categories such as business and financial services.Read More
Some things are too big to fight. If you’re planning to redefine a whole category for example, then, unless you’re already a market leader, plan on a big outlay and a long runway. You’re literally battling the millions others have already invested to define what it is, what it means, who it’s for, where it’s found, who the key brands are, what the products and services generally cost and so much more.
If your brand’s competitive advantage is predicated on breaking one of those fundamentals, be very aware of the fight you’re buying:
- You’re battling the pigeonhole that your supply chain will want to put you in;
- You’re fighting the expectation that your customers automatically have of you;
- You’re asking for the competition to dismiss you as unimportant or uninformed; and
- If you somehow beat all that, and manage to get established, you just pressed the GO button for a whole bunch of imitators to copy your IP and innovation
Here’s the irony. If you’re going to enter/change a category, you must provide the market with enough for them to recognize, but at the same time, you must clearly differentiate your product or service. It must clearly own a meaningful difference.
The innovation question is not what are you looking to be, what are you going to invent or even what are you looking to change? It’s – what will your prospects recognize as needing to change, will they welcome that change fast enough and in sufficient quantities, and how much change will you need to generate internally (in terms of systems, skills, offerings and mindsets) to make that happen?
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education
Every brand has two vulnerabilities from an activity point of view: what it’s doing (because that makes its strategy more visible to its competitors) and what it’s not doing (because in failing to act, it generates opportunities for others to do so). Nothing startling there. But Derrick Daye mentioned something recently that I think we need to pay more attention to: the opportunities for “competitive intelligence” – understanding and responding to the underlying attitudes inside a rival brand and the implications of those dynamics competitively.
Here’s three examples of things to be looking for and some actions you can take to gain an advantage for your brand.
1. A shift in the priority of marketing. This can manifest itself in the resignation of an individual and their replacement with a person with a different skillset or the restructuring of marketing into/out of the Executive Leadership Team. That in turn can mean a downgrade/upgrade in the marketing spend and/or in a change of suppliers (e.g. new agency).
If the person driving marketing is replaced by someone with a greater orientation towards finance or perhaps tech, that should be a heads-up that the brand is preparing to change direction. With a finance head at the wheel it may become more focused on results for example – leading to a more campaign-focused approach. If the person is more tech focused, that could mean a greater reliance on data as the basis for decisions, a shift to online or more digitally focused advertising or a change in how they are systematized.
News that a brand is preparing to adjust its marketing spend following a new appointment or a restructure could be a sign that marketing is not performing to expectation for the business and the company is preparing to tail off its market presence or take a more front-foot approach with its brands. A change in agency too almost certainly signals a shift in campaigns and a wish to compete with new ideas.
Three actions you can take in response:
- Lift your marketing activity while the new person settles in. Use the 90 days it’s probably going to take them to get their heads around what’s going on to make in-roads in terms of market share, to redefine the competitive playbook so that you’re no longer the competitor they thought you were, and to reinforce the stability and consistency of your brand to suppliers and consumers.
- Reinforce what you stand for in the minds of the market so that if the other brand is repositioning, they have to work around your re-established presence. That way, they also must declare their hand about the future as they see it. Position yourselves as trustworthy, reliable and consistent, but also fun.Read More