Branding Strategy Insider

Public Relations: A Question of Measurement Methods

Of all the communication tools that a marketer can invest in, public relations is probably the most underrated.

PR is relatively cheap and is a wonderful method of providing information on a brand, while avoiding the clutter that so often reduces advertising impact. Yet it is a relatively minor ingredient in many integrated marketing plans.

The problem with PR is its invisibility. Unlike advertising or the internet there are no glossy prints, 30-second spots or 3-D graphics to point to as justification for the investment. Unlike sales promotions and direct marketing, there is no way of linking the amount invested in communications with that received in the form of increased sales. As a result, PR is often overlooked as an important and economic method of building a brand over time.

The PR industry itself has to accept responsibility for this situation because of the rather fluffy and unaccountable way in which it has promoted itself. In many instances PR agencies have been comfortable accepting a retainer from clients without ever offering any form of evaluation of their activities on behalf of that client.

Customization: Building A Brand Advantage

First came Nike iD, a customization concept that enabled consumers to design their own pair of Nike shoes. Then Jones Soda offered a customization platform: bottles became vehicles for consumers’ customized labels, Jones Soda even guaranteeing brand fans that their bottles would be distributed in stores. Shortly thereafter, Build-A-Bear broke new ground in the teddy bear game inviting kids to use their imaginations and construct their own bears. Imagine the LEGO factory enabling kids to design their own LEGO sets. Consider Mercedes-Benz’s design-your-own-car option and, of course, the hundreds of clothing web sites that offer consumers the chance to design their ideal streetwear. These consumer lures have all been exercised in parallel with the online world to which the very concept of customization is fundamental and in which the potential for customization has yet to be fully exploited.

Once we’ve had the chance to pick and choose, to become kings and queens of our own brand universes, product functions and designs, there’s no turning back. In the future we will be able to customize every consumer item we use. The days of Henry Ford’s manufacturing mantra —  “You can have it in any color you want as long as it's black” — are, even now, long gone. The question thus arises, what’s the role of the brand? Is it at all possible to build a brand if its products can be customized by its consumers?

The answer is simple: the role of the brand is to remain instantly recognizable, even without its logo.

BrandQuote - September 28

“Marketing is too important to be left to the marketing department”

            -David Packard, Hewlett-Packard

Sponsored By: Brand Aid

Sex, Branding and Profits

Imagine your company brochure was so popular that people could sell it online for $38.95. Or your carry bags went for $9.90, and stickers featuring your company logo fetched $15.50 each. Impossible, right?

Maybe. But think again. Consider Abercrombie & Fitch, Victoria’s Secret and Playboy. A never-ending range of merchandise attached to these brands gets sold on eBay all the time, demonstrating the true value of those brands. And, perhaps, the value of their prime driver: sex.

But, is it really that simple. Does sex sell? Provocative behavior, seasoned with sex, seems to be an ever-effective formula. Seventy years after the first lightly clad woman was featured in advertising, for an automobile, sexual suggestiveness still seems to do the trick. As trivial and superficial as it sounds, the magic still seems to work in the old formula.

If you passed by an Abercrombie and Fitch store during the summer months you might have noticed something unusual about the U.S. clothing retailer. The staff who greet you at the entrance are wearing an unusually small amount of clothing. A pair of undies for the boys and, for the girls, a micro-sized bra which you can hardly see. Then there’s the store itself. It exudes a distinctive exotic aroma that you can detect from the other side of the street. Meanwhile, high-decibel chart-topping music maintains momentum. The windows are covered with posters of lightly dressed teens, preventing people on the outside from seeing in, and people on the inside from seeing out. All this, combined with the fact that the staff act more like models than sales staff, seduces you into feeling you’ve entered a nightclub rather than a fashion store.

Of course, this is all quite on purpose. And, it’s all about sex.

The Case For Place Branding

In my current role, I am often asked why I believe place branding is a right strategy for accelerating the economic growth of a location.

Global competition for capital investment in increasing, driven in part by companies deciding to increase their capability and capacity to service emerging markets in Asia. This puts pressure on the amount of practically available capital for investing in developed markets. Additionally, advances in telecommunications are making it possible for companies to service developed markets from virtually any location that can provide a high-speed internet connection. Limited dollars and increased choice are the classic conditions that demand effective place branding to attract capital investment and drive accelerated economic growth.

Place branding is a strategy being used by an increasing number of locations around the world to effectively compete for an increased share of foreign direct investment dollars and capital expansion of resident companies. However, too often place branding initiatives are little more than sales campaigns with limited sustainable impact.

Calvin Klein: Renaissance Brand

Last week on BSI I blogged about The Poisoning of the Calvin Klein Brand. Today, a look at CK's remarkable change in direction.

At the start of the new century, Calvin Klein was struggling. Superficially, the brand appeared to be healthy, with strong revenues coming from the brand's presence in more than 40 categories. But the reality was a brand that had lost much of its equity because its consumers had encountered it in inconsistent brand extensions, at too many price points, in contradictory retail locations.

However, help was on the horizon. In 2002 Calvin Klein was bought by PVH, a fashion conglomerate that also owned brands such as Van Heusen and Kenneth Cole. Over the past five years this great brand has been slowly, but effectively, rehabilitated by PVH's assiduous application of classic brand management principles.

First, it bought back the bad licenses. Calvin Klein will always be a brand that makes most of its revenue through licensing - but there are good licenses and bad ones. PVH bought out those that directly damaged the status of the brand. In the past, for example, the company had relied on a licensee to produce its high-end Calvin Klein Collection, but the Italian company repeatedly delivered the merchandise late, often with uneven quality levels. PVH regained control of the production in 2007 and expanded its manufacturing team in New York to enable its own people to produce more of what was selling faster and more efficiently. It was a lesson learned from Burberry 10 years earlier, which also reined in, but did not eliminate, its licensees.

Marketing + HR = Employer Brand Power

Strong brands ultimately have four classic effects on markets. First, they reduce acquisition costs. Amazon, for example, has a much lower marketing spend per consumer transaction than its less prominent internet rivals because it invested heavily in its brand equity from the outset.

Second, strong brands create relationships between consumer and producer and these relationships are very beneficial. A consumer walks into a sandwich shop at 2pm looking for an egg sandwich, she discovers that all the egg sandwiches are sold out, "What a useless sandwich shop!" she later tells all her friends.

Meanwhile, a brand-loyal consumer walks into Pret A Manger at 2pm looking for an egg sandwich. She discovers that all the egg sandwiches have been sold, "Ah," she exclaims, "I got here too late". Brands guarantee performance, but as the sandwich example demonstrates, brand relationships also influence the perception of that performance.

Third, strong brands increase loyalty and this loyalty leads to increased customer retention. Tony O'Reilly, as chief executive of Heinz, had the simplest definition of brand loyalty. A consumer walks into a supermarket looking for beans. There is every brand of beans available except Heinz.

She leaves without any beans. Strong brands are not only able to attract consumers for less, they are likely to keep them loyal for longer too.

Marketing Budget Requests: Getting What You Need

This is the time of year when many marketing departments decide how their particular share of the industry’s enormous marketing spend will be applied in the following year.

In practice this means senior marketers make predictions for the coming year, perform an objective review of the performance of the previous year's expenditure and then finally allocate their spend across their chosen marketing investments.

The vast majority of firms still use a top-down budgeting system. Senior managers decide on the total marketing budget for the year and leave marketing to allocate it accordingly. This figure is usually calculated in one of two ways. In its most pathetic form, top-down budgeting involves senior management looking at last year's budget and then increasing it or decreasing based on expectations of turnover.

Or else they apply an 'advertising:sales ratio'. Senior managers estimate how much they expect to sell in the coming year and then apply a completely arbitrary percentage to this estimate. Thus the marketing budget is set.

The problems with a top-down approach should be obvious. It is non-strategic, takes no account of new initiatives within the company, and ignores changes in the external market.

Brands Always Win

Greetings from  Riga where I am running a two-day session on branding for Latvian companies. I arrived to discover that, by way of a very Baltic introduction to the session, the organisers had drafted a delightful parable to explain the importance of branding.

Aleksander lived in Liepaja. One weekend he decided to travel to Riga to find a wife. On Friday night he met a beautiful girl called Alina.

They sat and talked and finally Aleksander asked her to marry him.

"Why should I marry you?", she asked. "Marry me because I am tall, 175cm." Alina thought about this for a while but then she saw another boy on the dance floor. She stood up and began to walk away. "Why will you not marry me?" asked Aleksander. "Because that boy over there is 5cm taller than you so I should marry him instead," she replied as she disappeared.

On Saturday night Aleksander met another wonderful girl called Sandra.

They sat and talked and finally he asked her to marry him.

"Why should I marry you?" Sandra asked. "You should marry me because I am rich, I have 50 Lats in my bank account," said Aleksander. Sandra agreed immediately and off they went for a celebration dinner. After their meal Aleksander received a bill for 45 Lats. As he was paying the bill Sandra began to walk out.

Advertising in Color

Did you know? Ads in color are read up to 42% more often than the same ads in black and white (as shown in study of phone directory ads).

See here for more on the significant impact of color.

Source: White, Jan V., Color for Impact, Strathmoor Press, April, 1997

Sponsored By: Brand Aid