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.
When I was named director of brand management and marketing at Hallmark, most of the company’s leadership team viewed the company as a greeting card manufacturing company.
With the advent of the Internet, it was easy to foresee the demise of “ink on paper” greeting cards. I felt it was my duty to get the company’s leadership team to think about our business more broadly and eliminate the risk of being defined as a product category. Ideally, brands stand for customer values and benefits, not specific products.
It was clear through research that Hallmark helped people maintain their relationships and express their feelings. Based on this, we determined that Hallmark should stand for “caring shared.”
At the time, Hallmark was mostly manufacturing “ink on paper” products – greeting cards, giftwrap, paper plates and napkins and related products. It also produced calendars and day planners. It outsourced collectable Christmas ornaments and other small gifts. Most of these were produced in Asia.
Opportunities Found, Opportunities Lost
Trademarks, like brands, build strength over time. The test for trademark infringement is “confusing similarity.” Put another way, if the average consumer believes both products to have come from the same source, there is infringement. Obviously, the more a consumer is familiar with a particular brand, the more defendable its mark. That’s why it behooves a company to do the following:
- Choose a distinctive mark, including a “coined” name. Brand names range from generic and descriptive to suggestive and arbitrary or fanciful (“coined”). Obviously it takes longer to build meaning for coined names, but they are also more distinctive and easiest to protect legally. Kodak, Xerox, and Exxon fall in that category. Suggestive marks are the next most protectable. Examples include Coppertone, Duracell, and Lestoil. Even common words can be used as trademarks as long as they are not used descriptively. These common words/phrases are also suggestive marks: Amazon (big), Twitter (brief and chatty), and Apple (different, offbeat). Descriptive marks are not protectable unless the brand creates a secondary meaning for the word, such as Weight Watchers, Rollerblade, or Wite-out. Generic marks, such as Shredded Wheat and Super Glue, are not protectable at all.
- Avoid geographic names as a part of your mark—they can be the basis of trademark refusal.
- Register the mark.
- Be consistent in the use of the mark.
- Create strong trade dress (as discussed later in this chapter).
- Widely advertise and distribute its trademarked products.
- Do all of this over a long period of time.
Because the strength of a mark is dependent upon consumers’ familiarity with it, it is much easier for a competitor to neutralize your mark soon after it has been introduced than after it has been in use for a long period of time.
“If you can’t measure it, you can’t manage it.” Peter Drucker
This wisdom of Peter Drucker holds true for brand equity. But to measure or manage it, you must first understand it. Executives and marketers alike are often confused about what brand equity actually is. Is it the asset value of the brand? Is it the price premium that the brand is able to command? Is it the reduced price sensitivity that it can create? Is it the emotional connection that the brand makes with people? Is it the loyalty that customers demonstrate toward the brand? Is it the brand’s personality? Is it the brand’s positive associations? Is it the unique identity that it brings to its products and services? Is it the degree to which the brand personifies those products and services? Is it the way the brand is able to share values with its customers and serve as a self-expression vehicle for them? Is it the goodwill that the brand generates? Is it the memory triggers that the brand creates in people’s minds? Is it the ability of the brand to create meaning that extends beyond one product category allowing for brand extension? Is it the brand’s promise? Is it the brand’s unique value proposition? Yes, it is all of these.
If a brand has equity it implies that the brand is an asset that has value. In fact, many studies over time have demonstrated that brand equity is a significant contributor to stock price, company valuation and shareholder value.
So what should the purpose of brand equity measurement be?
- To measure the brand’s health and vitality
- To understand how well the brand is positioned against its competitors
- To serve as a diagnostic tool
- To uncover any underlying weaknesses that require intervention
- To identify opportunities to further strengthen the brand
- To provide the information from which a brand scorecard can be built
That is, a brand equity measurement system’s output should be diagnostic and actionable.
I was talking with a business associate of mine today. She is working with an organization that has grown from a start-up to a company with more than 1,000 employees. The organization produces high quality products and is growing rapidly however to the CEO’s credit, he is noticing chinks in the company’s armor, chinks that are due to organization growth and size. In the past, he managed the organization by selecting the right people and modeling the right set of values, attitudes and behaviors. Business growth was the result of intuition, trial and error and agility. But now the company is starting to experience unacceptable employee turnover in its manufacturing plants (among other issues). The company has not formally articulated its mission, vision or values. It has not crafted a brand promise and it does not have an elevator speech. Employees on the plant floor are not quite sure what the organization’s broader mission is. They don’t know how what they do contributes to some larger vision. For them, it is a job.
But aren’t missions, visions and values and brand promises and elevator speeches just collections of words? Yes they are. But they are a strategic collection of words that create a shared vision, motivate people to a higher calling, and rally them around what they need to do for the organization to succeed. Words can be very powerful. Leaders have inspired revolutions with their speeches and they have gotten their followers to take on seemingly impossible tasks successfully.
When we conduct mission, vision and values workshops or brand positioning workshops, they not only lead to a set of inspiring words, but they also achieve leadership team consensus on advantageous business models and strategies. It is a way to rally the troops starting at the very top of the organization. The larger the organization is, the more important this becomes. Many entrepreneurs do not realize how important it is to put these sorts of things in place when their organizations reach a certain size in which they can no longer personally interact with every employee on a regular basis. If you lead a rapidly growing organization that has not yet established its mission, vision, values or brand promise, know that at some point in the future it will be important to do so to enable further growth and success.
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