Branding Strategy Insider

Don't Blame Brand Licensing

Here on Branding Strategy Insider, Jack Trout makes a compelling argument for why not to consider licensing as a method of brand extension. Furthermore, he backs it up with multiple examples of established brands with flawed licensing programs that serve to prove his hypothesis. After reading about Pratt & Whitney and Pierre Cardin, what CEO in their right mind would choose to risk the company's crown jewels to a group of third party manufacturers which don’t have a clue about how to build a brand, let alone manage one?  With so much at stake, only those CEOs that are either reckless or desperate would consider licensing. Right?

Maybe the problem isn’t licensing, but its poor or improper execution? After all, why would a company choose to forgo its consumer driven innovation process or marketing principles only when it comes to extending their brands through licensing?  Some of the best and biggest brands around the globe have been actively and successfully licensing.  Disney, P&G, Coke and Harley Davidson each have outstanding licensing programs.  These programs not only enjoy strong royalty income, they enhance their brands' attributes in the process.

Rebranding: Not Beyond Credibility

The bad news mounts for BP as the petrol giant has admitted that efforts to plug its Deepwater Horizon well and prevent any more crude oil escaping continue to fail.

One mile from the surface, and 50 miles from some of the most beautiful and valuable coastline on Earth, the leak continues unabated. And you can forget the estimates of how many gallons of oil are being pumped into the Gulf of Mexico each day, because BP has also conceded it has no clue exactly how much oil is leaking out.

These uncertainties add to the growing list of major imponderables facing the beleaguered British oil company. BP has said it does not know when the leak will be stopped, nor does it have any idea what the long-term ramifications for local communities and industries will be. It has also said it has no clue what the final cleanup bill will come to - except that it will be in the billions and that BP will be liable for every penny. Indeed, the implications are so inestimably huge at this stage that the only accurate bellwether of the kind of trouble BP now finds itself in has been the ashen, horrified look on chief executive Tony Hayward’s face. All the media training in the world cannot disguise the enormity of the problem now facing Hayward and his company.

Any oil company finding itself in this situation would be in trouble. But there is, of course, a very specific reason why BP, of all companies, is going to suffer more spectacularly than any other from this disaster. BP, as we now all know, now stands for “Beyond Petroleum”. In the most famous repositioning case of the century, Ogilvy and Landor helped BP to change its logo, its name and its positioning to reflect the fact that the company was now actively “exploring new ways to live without oil”.

Brand Naming: Consider the First Letter of the Name

Should you start your new name with an S or a C? Why not a J or a K?

In other words, does the first letter of your product, service or company name really matter? – aside from the gambit of leading a directory category with an “AAA Plumbing”-style moniker.

The following table is not purely scientific, but it shows how letters which begin “ordinary” words differ in frequency from those beginning brand names and trade names.

The first column comes from a page count of letters in a dictionary that does not include proper names.
The second column shows the frequency in two long lists of brand names.
The third shows the frequency of trade names on the New York Stock Exchange.

Some initial-letter words are so close in frequency, they’re clustered.

Brand Salience: Why It's Important For Your Brand

Woody Allen once said that “80 percent of success is just showing up .” Unfortunately, at purchase decision time, the vast majority of brands never show up at all. Getting consumers to “think” about your brand more often, and in more buying situations, is one of the most under-rated marketing challenges that brands face today.

Brand Salience — What is It?

Brand Salience is the degree to which your brand is thought about or noticed when a customer is in a buying situation. Strong brands have high Brand Salience and weak brands have little or none.  This helps explain to some degree why big brands are big and small brands are small: if no one thinks about you at the moment of buying truth, your brand is going to be relegated to the dustbin of small and unnoticed brands.

Moment of Truth - Does Your Brand Have Salience ?

Brand Salience IS NOT the same thing as top of mind awareness. Top of mind awareness is simply what brands come to mind when consumers are asked to recall brands within a category. Brand Salience is different. Why? Because it is what brands come to mind when consumers are in a purchase situation. More specifically, Brand Salience is the memory of your brand and its linkage to other important memory structures. The buying situation ”mindfulness” and linkage to memory structures is what differentiates Brand Salience from top of mind awareness.

Expanding the Licensing Value of Your Brand

To best help you understand how to expand the licensing value of your brand, let's take a step back and reflect on why companies choose to brand their products in the first place.

Companies brand their products to differentiate them from their competitors'.  For example, most consumers have no problem differentiating a Coke from a Pepsi.  By giving their products a brand, companies can begin a dialogue with their consumers about their products’ attributes.  Over time, a consumer learns she can rely on the brand to deliver a consistent and expected value.  One of the best examples of this is the Tiffany brand.  Whether or not you have every bought from Tiffany, you know the brand is synonymous with the highest level of quality, service and reliability in jewelry.  In fact, Tiffany has consistently delivered on this promise for almost two hundred years.  For this reason, a Tiffany consumer will not buy from any other jeweler.  Moreover, if ever asked where her jewelry was purchased, most women enthusiastically proclaim the Tiffany name.

When consumers are delighted by a particular brand experience, they begin to bond emotionally with the brand.  They become brand loyalists and advocates – buying the brand more often and recommending it to others.  This behavior serves to build the brand's reputation.  In fact, consumers will often purchase a brand for the first time because of its reputation.  The brand, therefore, adds value and certainty to an otherwise unknown product.   The stronger a brand's reputation, the higher the value of the brand and the greater revenue it will drive for its owner.  Prospective licensees want to license brands with the strongest reputation as these are the brands consumers demand and retailers prefer most. The stronger the brand, the higher likelihood that the licensed products will sell in and sell through.

Countries Are Not Brands

The World Cup approaches and, once again, the English nation hopes against hope that it can win the tournament and finally end 44 years of hurt. Meanwhile, in South Africa the dreams are just as bold but aimed in a very different direction. FIFA’s World Cup presents its hosts with, what they believe to be, their biggest ever opportunity to build a stronger country brand.

That’s a shame because, despite its growing popularity and firm establishment within marketing, the business of “country branding” or “nation branding” is nonsense. Countries are not brands. They are countries. Brand strategy should be reserved for brands. I may have a hammer, but it doesn’t mean that every problem is shaped like a nail. Real expertise in a field is to know the limitations of that field and behave accordingly.

I can appreciate the attractions of country branding. Selling a brand strategy to a public servant in Finland or Ghana must be a lot easier than pitching to a trained marketer from the likes of Unilever or Ford. And I can also appreciate that even the gigantic budgets of P&G or HSBC are dwarfed by a nation’s coffers. I can imagine, too, that measuring the impact of a country branding strategy is far less taxing than the typical corporate branding work, where sales figures and brand equity scores always influence the assessment of impact. But the core problem endures: conceptualising a country as if it were a brand is stupid.

BP's Oil and Brand Equity Spill in the Gulf

Branding is all about creating alignment of your companies business processes with its corporate culture. British Petroleum (BP) provides a case in point of a brand that got way out front of its business process and culture to produce tremendous exposure to risk. (Risk that is perhaps contemplated above by BP's Chief Executive Tony Hayward.)

Back in 2000, BP announced a major change in posture from "British Petroleum" to "Beyond Petroleum" and spent hundreds of millions of dollars promoting their new position. Did it have a positive impact on the company? Most assuredly the impact was positive at the time. But will the brand be damaged because of the major oil spill in the Gulf of Mexico? Without a doubt.

If an oil company is not 100% committed to dealing with any potential catastrophic disaster, how can it contemplate building the brand before it has addressed the basics of the business? With thousands of rigs pumping oil in the Gulf today how could something as fundamental as a shut-off valve not be standard operating procedure?

Why Consumers Reject Your Advertising

What do consumers think about advertising? Is it broken? As I noted in a recent post, “The 5 Truths of TV Advertising Effectiveness,” single source and syndicated ad effectiveness studies generally line up on the side of advertising continuing to be effective. But, as they say in NASA speak: “Houston, we have a problem.” And the problem is that consumers are increasingly telling us they are fatigued by and distrustful of advertising. How should brands respond? 

Advertising Viewed Through Anthropology

The Associated Press and Context Based Research Group recently published an intriguing report: “A New Model for Communication:  Studying the Deep Structure of Advertising and News Consumption.” The researchers used cultural anthropology methods to follow consumers from around the world throughout the day, observe their real world media behaviors, and question them about their attitudes toward news and advertising. This was an opportunity to go beyond hard numbers, to get insight into how consumers are thinking and feeling about advertising as a medium.

First, the news. Consumers feel bombarded by it, particularly the daily snippets and sound-bytes that provide basic facts and updates. Consumers felt these are necessary, but not sufficient. They also want the back-story behind the facts and to understand relevant “spin-off” stories. In short, they wanted news that provides depth and context.

What Consumers Say is Wrong with Advertising

Moving from news to ads, consumers expressed feelings of fatigue and distrust. There is just too much of it. It seems that if an ad can be served somewhere, it will be, whether consumers want it or not. And how does this leave consumers feeling? Taken advantage of.

Further, because of both its ubiquity and uni-directional nature, consumers are left feeling they are not in control. While advertising has never been seen as a high trust medium, the above factors work together to exacerbate the feeling that advertisers just can’t be trusted.

Why Leading Brands Stay On Top

"You can't beat somebody with a nobody" is the old political axiom, and it applies to marketing, too.

Lately, a number of marketing somebodies have gotten into serious trouble. Typical reaction in the media: "Whoops! There goes the brand."

Not so fast. Once a brand has a strong position in consumers' minds, it is almost impervious to flak.

Take Tylenol, for example. In September 1982, seven people in Chicago died after taking cyanide-laced Extra-Strength Tylenol capsules. The media jumped on the story with predictions of doomsday for the brand.

"A death blow for Tylenol?" was the headline of a BusinessWeek article.

"The Tylenol scare," was the cover story in Newsweek.

"A flat prediction I'll make is that you will not see the name Tylenol in any form within a year," said a leading advertising executive in a New York Times article. "I don't think they can ever sell another product under that name."

"There may be an advertising person who thinks he can solve this, and if they find him I want to hire him," continued the ad executive, "because then I want him to turn our water cooler into a wine cooler."

Amusing, but not accurate. Today, Tylenol is back bigger than ever. It's the No. 1 drugstore over-the-counter brand.