Branding Strategy Insider

Blazing Trails to Brand Leadership

How come some brands are great, while others just manage to be good? Is there a trick up the sleeves of those great brands – a trick that good sustainable brands can adopt to become great household names?
The answer is yes.

Happily, the financial investment required to adopt this trick is modest. The biggest investment has nothing to do with your marketing budget, and everything to do with your readiness to change the way you manage and grow your brand.

The ironic fact is that the key tool to building a great brand is your competition, because your competition makes your brand stronger. As my dad used to say, if you want to get ahead of the leader, don’t follow his tracks in the snow. Too many brands have become obsessed with their competitors, shadowing and imitating their moves and becoming nothing more than ‘me2’ brands. Often practicalities necessitate this apparent uniformity. You’ll know that milk, water, cheese and countless other items come in similar packaging. These are groceries which, undifferentiated, offer the same benefits as each other. Price often motivates the purchase. And then, from time to time, a product stands out.

Remember Listerine? The mouthwash your grandparents probably used? With a history of over 100 years – first created in 1865 - Listerine is a product which has seen nothing but steady increases in its market share of the mouthwash category. Yet, that category has been diminishing and, with it , Listerine’s revenue has been steadily decreasing. As Listerine’s competitors faded away, so did Listerine’s fortune, even as the leader, in a shrinking product category. Then things turned around. The company shifted its focus to concentrate on how it was actually delivering oral care to its consumers. With a century of trade to reflect on, the brand’s consumers of 2008 are the products of cultures that would be unrecognizable to their 1870s counterparts.

David Ogilvy: Direct vs Creative

One of the greatest advertising geniuses of the 20th century was David Ogilvy.

Although he was the head of a Madison Avenue advertising agency, he sided firmly with direct advertising over creative advertising.

Here is an excerpt from a speech he gave to advertising executives in Paris where he laid out the difference between the two approaches and why, in his opinion, direct advertising is the more effective form:.

“There is a yawning chasm between you generalists and we directs. We directs belong to a different world. Your gods are not our gods.

“You generalists pride yourselves on being creative – whatever that awful word means. You cultivate the mystique of creativity. Some of you are pretentious poseurs. You are the glamour boys and girls of the advertising community. You regard advertising as an art form – and expect your clients to finance expressions of your genius. We directs do not regard advertising as an art form. Our clients don’t give a damn whether we win awards at Cannes. They pay us to sell their products. Nothing else.

Price Reductions Threaten Brands

Price is often the enemy of differentiation. By definition, being different should be worth something. It's the reason that supports the case for paying a little more for a product or service. But when price becomes the focus of a message or a company's marketing activities, you are beginning to be perceived as being unique. What you're doing is making price the main consideration for picking you over your competition. That's not a healthy way to go.

Few companies find happiness with this approach for the simple reason that every one of your competitors has access to a pencil. And with it, they can mark down their prices any time they want. There goes your advantage. 

Getting Around Price

Market leaders will always be attacked on price. It appears to be almost a law of nature. So what do you do? Do you have to match all their moves that are made against you? Well, there are some tried-and-true methods of getting around a price attack:

1. Do something special. The leader can go to its biggest customer and offer something special. Nike went to Foot Locker with Tuned Air, a $130 running show that they make exclusively for the big shoe retailer. So far, so good. Foot Locker has ordered more than a million pairs. 

2. Cause some confusion. In some industries, pricing can be quite complicated. Some years ago, MCI launched their Friends & Families discount program. The deal was discounts on those calls you made to your friends and families as well as to those that were made to you. AT&T ignored this for a while, but MCI's market share started to climb. Eventually, AT&T introduced "MCI math." This aggressive ad program challenged those MCI rates as not being very much when you got past the small print (the 20% discount shrunk to about 6%, which worked out to pennies on a phone call.) AS the arguments raged, the market became confused about what was a real discount and what wasn't. Other discounts from Sprint and a new breed of telephone discounters only added to the confusion. MCI's market share progress was halted. Who wins when the market is confused? You guessed it: the leader. People just figured, "Why bother? Let's stay with AT&T."

Scent Marketing Success: Step 6 of 10

Our series on scent marketing continues with number 6 - Finding the right delivery technology.

The end product of any perfumer’s creative process is an oil – sometimes called “Fragrance Oil” or “Essential Oil”. Now you need a way to get it out into the open, either rather restricted at the Point of Sale or on a grand scale in a retail store or an event space. Stay away from any scent delivery systems that applies heat to the fragrance oil, not only for safety reasons but also as not to alter the scent’s characteristics. In fact, professional commercial equipment is quite different from home devices you would buy in the local drugstore or online.

Scent is typically delivered in four ways:

•    Dry air scent delivery. Fragrance oil is embedded in a gel, in small plastic beads or in another scent-saturated substance and air is run over or through the substance, picking up the scent and delivering it via a small blower or a fan. This method is very efficient at the Point of Sale since the scent’s reach can be limited to the immediate environment.

•    Nebulization: Pure fragrance oil in its liquid form is run through a venturi device that disperses the oil into extremely fine particles that then are picked up either by ambient air flow or infused into the HVAC system. These particles are 100 times smaller than what comes from a fragrance spray bottle and therefore linger longer before they dissolve without sticking to carpets, wall coverings, products in the store or the customer walking by.

The Right Brands Will Die

There was a fascinating moment of business drama last week in Washington, DC. Three of the most important chief executives on the planet met leaders from the US Senate and House to plead for extra public funds. General Motors' chief executive Rick Wagoner, Chrysler's Robert Nardelli and Ford's Alan Mulally testified at a Senate Banking, Housing and Urban Affairs Committee hearing to ask for an additional $25bn handout to keep their brands alive.

It was always going to be a difficult day, but the tone was set early by Democratic representative Gary Ackerman, who told the executives there was 'delicious irony in seeing private luxury jets flying into Washington, DC and people coming off them with tin cups in their hands'. Fellow Democrat Brad Sherman continued. 'I'm going to ask the three executives here to raise their hand if they flew here commercial,' he said. The three chiefs blinked but made no gesture. 'Second, 'I'm going ask you to raise your hand if you're planning to sell your jet... and fly back commercial.' Again, there was no response. 'Let the record show no hands went up,' concluded Sherman.

There are more than 20 non-stop flights from Detroit to DC with tickets starting at $200 for the two-hour trip. And yet these cash-strapped chiefs who came to communicate the dire straits their respective brands were in, opted to spend in the region of $20,000 each and use their private executive jets instead. It was a strange moment, yet one typical of the public-private shenanigans taking place worldwide.

Formerly proud capitalists are looking at 2009 with a mix of fear and desperation and turning in increasing numbers to government sources for help. The problem is these huge private institutions have enjoyed periods of unparalleled success, which has created a disgracefully indulgent operating model that contradicts directly with the premise of being given public funds.

The Brand Proficiency Indicator

It is extremely difficult to identify which companies are good at branding. One common mistake is to assume that the ownership of strong brands indicates equally strong brand management. In reality, the two very rarely go hand in hand. Take Coca-Cola. While Coke is unquestionably a power brand, the brand strategies implemented by Coca-Cola marketers have often seemed frighteningly inept.

Many marketers look at market share or, God forbid, ad campaigns to ascertain a company's brand expertise. In truth, there are a multitude of more accurate indicators of brand proficiency, and at the top of my list is a brand revitalisation strategy. On that basis, Smarties are in very safe hands at Nestle Rowntree, which in 2005 announced that it was changing the iconic design of the chocolate brand. After 68 years, the cylindrical Smarties tube with the coloured plastic disc as a stopper was to be replaced by a 'hexatube' with a cardboard flip-top lid.

Customers were outraged by the proposed change, and the media fanned the flames gleefully. Once again, sinister 'marketing men' have, it was claimed, struck down a much-loved part of British culture. Words such as 'scandalous', 'disgraceful' and 'immoral' were being used in online discussion groups. Yet despite this reaction, Smarties had never been better managed.

Many brands struggle to maintain their relevance in the market. This is particularly true of successful brands that become convinced the original strategies that established them should remain sacrosanct. The innovation and creativity that initially propelled the brand to the apex of the market are gradually eroded and replaced by a conservative strategic culture in which every significant branding decision is preserved in aspic.

The brand in question does not immediately lose either sales or share.

Country of Origin: A Brands Best Friend?

A multiple choice question: is Land Rover British, German or American? Or none of the above? That’s right - it’s Chinese. The Shanghai Automotive Industry Corporation (SAIC) recently acquired the brand and the rights to all its past models for US$140 million.

The acquisition sends a clear signal that cultural links between brands and the countries that produced them are in jeopardy. Consider IBM’s ThinkPad or Miller Lite. These two American brand icons are owned by the Chinese and South Africans. The Swiss Toblerone is no longer Swiss. In fact the heritage of many brands is changing shape as ownership alters across national borders.

But how does this affect the brand? I’ll tell you more about that soon, but first let me ask you this: does the notion that ThinkPad and Land Rover are Chinese cause you to rethink your ideas about brands’ quality and authenticity? Would you think twice about buying a Toblerone because it no longer comes from the land of chocolate? My guess is that you answered ‘no’ to these questions.

The fact is that ‘country of origin’ has a strong influence on a brand during its birth and childhood. Then, once the image of the country has been embedded into the brand’s personality, fashioning its identity and influencing its consumer’s perceptions, it seems to leave its stamp on the brand for good. At least the numbers available from brands which have ‘changed nationality’ indicate this to be so. Leveraging the power of a country in brand-building seems most effective at the beginning of the brand story. As the brand matures, it gathers other material that contributes to its identity – reputation, financial record, management personalities, and so on, are all elements that are likely to help the brand’s image alter in later life.

And what does this mean for your brand? Should you leverage your native country as a branding statement? And, if so, how? It’s not an easy path to forge and one which you should treat with care because it isn’t necessarily all good.

Beware of Commodifying Promotions

There are two kinds of brand management: intentional branding and holistic branding. Intentional branding is all about what brand managers intend to do with the brand. Usually, this involves a list of the traditional activities associated with branding - everything from logo design to integrated marketing communications.

Then there is holistic branding, which goes beyond the intentions of the branding team and adopts the consumer's viewpoint. Holistic branding considers every possible interaction, intended or not, that consumers have with the brand.

Too often a brand manager's myopic focus on intentional branding comes at the expense of the holistic perspective. Take one effort from Cadbury's Dairy Milk.

From an intentional viewpoint, Cadbury embarked on an ambitious £20m campaign that focused on the centenary celebrations of the brand, using television, print, radio, online and in-store activity. The campaign was based around the aspirational message 'You dream it, we make it' and it emphasised the rich, smooth qualities of the chocolate bars.

From  the holistic view many consumers of Dairy Milk had a single recurring brand experience that was anything but aspirational.

Wal-Mart Learns A Branding Lesson

It has been a gloomy month for US retailers. Iconic brands such as Linens-n-Things and Mervyns are in liquidation, while former electrical retail powerhouse Circuit City filed for bankruptcy protection last week. Store sales are down at every major US retailer - except one.

On Thursday Wal-Mart announced a 7.5% increase in sales for the first three quarters of 2008. Chief executive Lee Scott was smiling when he declared his 'optimism' for the upcoming holiday season, and Tom Schoewe, Wal-Mart's chief financial officer, was in an even more cheerful mood.

There are two reasons for Wal-Mart's success: one economic, one strategic.

On the economic front, Wal-Mart is benefiting from the change in the fortunes of the US consumer. In the past six months, the middle classes across the Atlantic have begun trading down in the millions. A recent survey from Bain & Company showed that US consumers are becoming more likely to trade down and that when they do they feel more educated and more satisfied as a consumer. Thrift is the new luxury, and Wal-Mart is enjoying a middle-class renaissance at the expense of its upmarket rivals.

But there is also a strategic reason why cash registers at Wal-Mart are beeping with such fury. It has learned one of the great secrets of branding the hard way. In 2006 the company made a huge, but relatively commonplace error. Frustrated with flat sales and shareholder pessimism, the leadership team at Wal-Mart decided to reposition the brand.

Discovering Brand Personality

I have helped organizations position their brands through consensus building brand positioning workshops since the mid-1990s.  As a part of that process, I have the workshop participants (mostly organizational leaders) select the brand personality attributes for which they want their brands to stand.

The organizations with which I have worked span a wide range of sizes and industries. They include manufacturing companies, consumer products companies, aging services firms, wealth management firms, medical supply companies, real estate investment trusts, municipalities, high schools, environmental conservation organizations, public service organizations, professional associations and many others.

I thought it would be interesting to identify the most popular personality attributes across all of these organizations.

Following are the most popular personality attributes (in decreasing order of popularity):

•    Innovative (45%)
•    Professional (41%)
•    Responsive (36%)
•    Caring (32%)
•    Reliable (27%)
•    Customer focused (27%)
•    Trustworthy (23%)
•    Service oriented (18%)

Others with frequent mentions: