Branding Strategy Insider

Why a Branding Strategy Blog?

At The Blake Project our sole focus is helping organizations create brands that build and sustain trust. Branding Strategy Insider is an extension of our efforts to help marketing oriented leaders and professionals build strong brands.

Engaging Influentials: Twitter and Beyond

With the rapid adoption of social media, we have accelerated into a network economy.  In a network economy, connectivity enables value to be created and shared by network members.  The larger the network, the greater the potential benefits.   In the digital world, network activities take place on an open platform that enables participation and cloud computing (think Wikipedia and widgets).

In networks, some members are more connected and active, and therefore have more influence.  These influentials are important members because they add significantly more value to the network.  In the digital world, they blog, twitter, upload videos, experiment with new gadgets, and create widgets.  As early adopters, they tend to be trendsetters that are followed by their friends and sometimes the masses.  The book, the Whuffie Factor, talks about Social Capital, and how our society is increasingly motivated to become more useful and creative.  Today, more people want to be influencers, and they want to be enabled.

In 2009, Twitter has emerged as one of the most talked about platforms in the network economy.  Indeed, there is a simple network exchange on Twitter:  influencer creates bite-size content, and follower discovers new information.  Here are a few examples of the exchange:

•    Gavin Newsom, mayor of San Francisco and California Governor Candidate, has over 500,000 followers.  He keeps his followers informed about upcoming events and fundraising, and enables them to interact with him directly.

•    Mike Massimino, a NASA astronaut, has over 400,000 followers.  He combines his human life story with a behind the scenes look at being an astronaut.

•    And of course there is Oprah, approaching 1.4 million followers.

Twitter makes it easy to share your voice and build your presence in the community. 

Days of the Logo Numbered

“Make it bigger,” the executive screamed from the corner of the room as I desperately sought a sign-off for an ad featuring a major fashion brand. This wasn’t the first time such a situation came up. In fact, every meeting I had always ended up in discussions about the placement and size of the logo – it was as if that one by one inch space, over time, had become the holy grail of branding – the rest was more or less an ad-on.

Let’s be frank – we live in a logo obsessed world. Pay a quick visit to Times Square and you’ll see what I mean. But is the magic still in the logo as we are exposed to some 2 million television commercials throughout life until we reach the age of 66 – or do we continue to be caught up in a format which once worked but, with the passage of time and the changed media picture, is now out of date?

I decided to find out. Over the years I’ve been stunned by the fact that we smoke more – not less. Admittedly the biggest increase of new smokers takes place in Asian and Eastern European countries. That said, even in the U.S. increases in smoking remain steady – not decreasing as we all want to convince each other it is, and all this despite the fact that we all know it is unhealthy. It is almost impossible to light up a cigarette indoors. Remember that advertising in most countries were banned decades ago, still brands like Marlboro rank in the very top, over the most expensive brands in the world – why?

The only way to find out was to understand what really goes on in our subconscious mind. Project Buyology – the largest NeuroMarketing project of its kind in the world – scanning some 2,000 consumers worldwide – wanted to answer exactly that question. What are the tricks the tobacco industry knows which the rest of the world somehow has missed? Estimates today claim that 85 percent of everything we do, every minute, takes place in our subconscious mind. Was this where the battle was taking place?
The answer was to be found in a small region in our brain called the neuclus accombens – also called the craving spot. It is a small area in our brain which controls our pleasures – and addictions too, such as smoking. It is a lie detector. It may be that you claim not to be affected by ads for tobacco smoking – the neuclus accombens however will tell you the truth.

Marketing Luxury Brands Q&A

Not too long ago I was interviewed by Amanda Tattam of Melbourne University's Up Close program. Here's the discussion that transpired.

Amanda Tattam
The massive growth of luxury goods has now extended deeply into China, India and other markets. Estimates vary, but some say the luxury market is worth between 60 billion and 20 trillion US dollars, including consumers who are trading up. That is, the increasingly wealthy middle classes, who 30 years ago, would have thought it luxurious to have two TVs in a household. Mark, can you explain how a luxury brand distinguishes itself from other brands?

Mark Ritson
The question today of what makes a luxury brand a luxury brand and how do we distinguish it is very hard to answer. The standard business response is to say, ‘they are more exclusive’. And we get exclusivity by having high price and relatively small amounts of the product available. The reality, however, of luxury brands is that they are sold in their millions, and in some cases, are not priced that much higher than the standard output. The only way I can really answer your question is to say, it is all relative. As you said in your introduction, it wasn’t that long ago in Australia that we would have considered two televisions to be a luxury, or even further back, one colour television. And you can make a strong argument, for example, that Starbucks in China, right now, is a luxury purchase – because of its cost, because of how frequently it is purchased by many people. So, I think the long answer is a complicated one, but the answer is, it depends who you talk to. I think in the business community what we would say, is that there is a small cluster of ‘more expensive brands’ which have a distinct strategy that we would identify as being ‘luxury brands’ and they start with the Rolls Royces and the Tiffanys and the Louis Vuittons of the world. And, I think that tends to be how we see them.

Amanda Tattam
Okay. So, what is the difference between ‘old’ and ‘new’ luxury for example?

Mark Ritson
It is an interesting one. It isn’t actually related to the age of the brands. So, two of the new classic luxury brands would be Coach, which is more than 60 years old, and in many cases would refer to Burberry, as using new luxury strategies. And Burberry is 151 years old. So, it isn’t their actual age. The term, ‘new luxury’ refers to a different approach to marketing luxury brands. A different approach in the sense that there is more focus on customers, greater production of the numbers. So, they might still have higher prices, but if you look at the typical Coach handbag, which is a well-known brand Japan, China and America, Coach would be making significantly more of it than the ‘classic’ old luxury brands like Gucci or Prada. And the final limit of new luxury which is of, I think, great distinction, is the new luxury brands have embraced production in China, far more so than the older luxury brands that continue to make most of their products, in some cases, in the traditional European artisan centres.

When The Brand Appeal Just Isn't There

This weekend, if the papers are to be believed, we might see the first British men's finalist at Wimbledon for more than 70 years. I am not convinced that Andy Murray will make it to an apparently inevitable final against Federer on Sunday, but, irrespective of his performance on the courts this week, the bigger marketing question relates to the potential appeal of 'Brand Murray'.

The concept has reached a peak in recent months, fuelled by both the player's short odds to win Wimbledon and his decision earlier this year to join 19 Entertainment, David Beckham's agency, which is widely portrayed as the epitome of brand-building expertise in relation to celebrities and sports stars.

A source close to the agency, quoted last week, confirmed that work on Brand Murray had begun: 'The ambition is global. The potential is enormous.'

Yes, and the bullshit is plentiful. Despite predictions that Brand Murray will soon be worth £100m a year, the harsh reality is that Murray is a fine tennis player, but a hopeless prospect as the next Beckham, no matter how advanced the brand strategy applied to his future career.

Let's start with a fundamental commercial limitation for Brand Murray - he is not exactly a looker. For all the talk of Brand Beckham, the fact remains that David was beautiful long before the agents and brand gurus came calling. Former Wimbledon champion and cultural diplomat Pat Cash got himself into a bit of trouble last week when he pointed out that Murray was not in the same league. According to Cash, Murray is 'never going to be eye-candy' and has 'the most boring, monotone voice in the history of the planet'. Cash went on to extol Murray's ability on court, but his comments highlight the importance of aesthetic appeal when you are up against the likes of Nadal and Ivanovic.

What Are Brand Attributes?

Today we're taking another branding question. Feyza, a marketer in Istanbul, Turkey asks...

"What are brand attributes? Please describe the difference between brand essence and brand attributes!"

Feyza thanks for your question. Attributes are more often used when referring to products than brands. A product's attribute might be a function or a feature. These functions and features often lead to consumer benefits. However, brands can have attributes too. The attributes may be personality attributes or they may be derived from the brand's products' attributes.

A brand's essence, on the other hand, has a very specific meaning. A brand's essence is its "heart and soul," its timeless quality. It describes who it is at its core. I like to express a brand's essence as [adjective adjective noun], so for Nike, it is "Authentic athletic performance" and for Starbucks it is "Rewarding everyday moments." Disney's essence is "Fun family entertainment."

Feyza, we also have a whole category on brand essence here.

Have a question related to branding? Just Ask…

Sponsored By: +2 Marketing Consultants

Creative Debate: London's 2012 Olympic Logo

Creative debates come and go. Some, like that of Tropicana's new packaging and London's 2012 Olympic logo are sure to have a long shelf-life. As Wolff Olins’ work on the 2012 logo continues to be scrutinized, we would like to gauge your reaction to the design above. To begin, two marketers share their opposing views.

Loves it: Bryan Bedell
Just like most people, our first reaction to the London 2012 logo was shock. But we talked about it all morning, and by 3pm, we decided we love it. And here’s why you should, too:

It’s not boring. The bright colours and distinctive design definitely do stand out, and it’s immediately recognisable.

It’s different. It avoids all the go-to pratfalls of current logo designs. No brushstrokes, feathered drop shadows, mirrored reflections, gradients, patriotic colours, rainbows, ribbons, landmarks, symbols of unity, maps, swooshes or globes!

It’s reproducible. It’s good to see a logo that’s so easily printable, broadcast-able, embroider-able and moldable. It even looks pretty great in black and white.

It’s flexible. A variety of colour combinations, shapes and patterns are available, keeping the logo slightly different on each view, but consistent. Keep in mind that an Olympic logo is almost always saddled with the logos of corporate partners. This square, bold mark will hold up.

Digital Marketing and the New Push / Pull Dynamic

Consumers are bombarded with more messages than ever before. Refining and clarifying your target segment is becoming evermore important as mass-messages are falling upon deaf ears. Specific, tailored and relevant messages, combined with consumer engagement and empowerment are elemental in the new marketing era. Less and less are market leaders dictating consumer needs through “push” advertising. By way of digital networking and publishing tools, consumers are creating consumer needs. To identify the key forces driving this marketing shift, we synthesized insights from over 40 industry professionals.

From Company Push to Consumer Pull
What is push and pull marketing? Push is the 30-second TV / radio spot. Push is the billboard and web banner. Push is the full-page magazine / newspaper spread. Push is becoming evermore difficult to push. The converse of push, is pull. Pull marketing is engaging; interactive; a two-way line of communication. To illustrate the push / pull marketing dynamic 15 years ago, if you were in the market to buy a TV, what resources would you have at your disposal? TV, radio, billboard, direct mail advertisements might have influenced your decision. Those messages are finely crafted to be persuasive. In essence: they’re bias. For a more objective view, you might turn to your friend that knows something about TVs. Or, you can go to Best Buy and they might be able to educate and inform your decision. In short, advertisements and a handful of “experts” were your resources. That was the push / pull dynamic then.

In the digital era, we can better manage and prioritize the influence of each resource. With the ubiquity of the internet, resources are seemingly endless; therefore you can choose which are more important as you refine our decision. Where in the past your decision was constrained to a limited number of resources, in the digital age, there are countless information hubs to help you choose one product over another. With the extensive consumer conversation on social media sites and product pages, what weight does the mass message—pushed from TV, billboard, radio, etc—carry when you’re making your decision? Though consumers will still soak up push marketing—and factor those impressions into their spending decisions—the internet and its vast networking reach typically bypasses traditional push media. In the past, the number of resources was limited—therefore each opinion meant more and consumers were just consumers. In today’s age, consumers are researchers, advocates, creators, promoters and marketers.

The Metrics of Branding

By 2020, branding will become the most significant value driver for boardrooms. Branding is already a very effective catalyst for better leadership; and branding helps the boardroom drive its shared vision. The primary objective of boardrooms is to build and sustain shareholder value and deliver competitive returns to shareholders. They must therefore manage by metrics, and balance short and long-term perspectives and performance. Brand equity is the combined measure of brand strength and consists of knowledge, preferences and financial considerations. Each of the measures under these three metrics is critical and the boardroom must ensure the brand portfolio scores highly in each to optimize its financial outcome.

Metrics Associated with Branding

Knowledge metrics: Measure a brand’s awareness and associations through the many stages of recognition, aided, unaided and top of mind recall. Similarly, the functional and emotional associations of a brand are important drivers of brand equity. Brands should score high on both awareness and association attributes.

Preference metrics: Measure a brand’s competitive position in the market and how it benchmarks to competing brands. Customers pass through various levels of preference toward the brand, ranging from mere awareness to strong loyalty and recurrent revenues from the customer base. A strong brand has the brand equity to build customer loyalty.

Financial metrics: Measure a brand’s monetary value through the various parameters of market share, price premium a brand commands, the revenue generation capabilities of a brand, the transaction value, the lifetime value of a brand and the rate at which brands sustains growth. These measures allow a company to estimate an accurate financial value of brand equity linked to marketing metrics. Some of them are examined in the following:

How Do I Judge Marketing Firms?

Today we take another question from a BSI reader like you...

Roy, an executive in St. Louis asks...

"I am on a search committee to select a company to help our organization with Branding. What are the questions or insights needed in judging various companies?"

Roy, thanks for your question. Different companies have different types of branding expertise. For instance, we (a brand consultancy) primarily focus on market research informed brand positioning, strategy development and brand equity measurement. We want to help organizations differentiate themselves in meaningful ways. That requires a deep understanding of marketing research, consumer behavior and marketing strategy as it relates to business strategy.

Some companies focus on brand identity development. For the majority of people, this translates to names, logos and taglines.These deliverables require strong graphic design and copy writing abilities. They also require deep brand identity experience if the name, logo and tagline are to work in all situations over time. Some companies  call themselves branding houses, but they are primarily good at developing creative (graphics and copy) for marketing communications materials and campaigns. At their core - they are advertising agencies. Many of those agencies are better in some media than others, for instance print versus television versus web-based. Few agencies have the strategic abilities needed for the development of robust brand strategies based on deep consumer insight. Other branding companies (mainly consulting firms) focus on brand equity measurement (quantitative research), brand asset valuation or inside-out branding, all of which require an entirely different set of skills, including OD (organization development/design) skills for inside-out branding.

So how does one determine which organization would best serve your needs? First, you must carefully assess your needs so that you know what you are seeking. Once you have done that, you should make your selection based on the following:

Building Brands Online in the Post-Sales Market

Customers will talk about your company, its products and services, whether you want them to or not. And online there are a multitude of places to do so. The question is, do you as a brand facilitate or participate? I will argue that you should do both, and tell you why.

It is not unheard of for customers to eulogize - one only has to browse Trip Advisor to see that. It is most definitely not unheard of for customers to complain, or to seek answers to questions or solutions to problems. Consider Apple and BMW. They collaborated on the first proper integration of the iPod and the automobile, and are the only two brands I would consider getting tattooed, were that my thing.

Apple provided a forum for their customers back in 2000. Duane, who has posted 113,365 posts so far, is a 'Level 5' and the number one poster. A blogger said of Duane, "I'm guessing that if you play "Apple Related Trivial Pursuit" with Duane, Duane first kicks your ass and then takes your name." Apple describes the service as a user-to-user support forum where experts and other Apple product users get together to discuss Apple products. You'll find a wealth of information about your favorite Apple hardware and software products that will help you get the most out of your purchase. You can participate in discussions about various products and topics, find solutions to help you resolve issues, ask questions, get tips and advice, and more.

BMW, on the other hand, does not provide a forum for its customers. As a result, a plethora of home-grown forums have arisen from bimmerfest.com to model specific e46fanatics.com, meaning a time-consuming and sometimes fruitless Google search for information. It is still not too late for BMW to enter the fray, and provide value to its customers. Disenfranchising the people who have filled the void is not something I would do - rather BMW could provide:

Beware of Marketing Gurus

Marketing is possibly the most widely misunderstood business topic in the managerial world today. The problem of marketing ignorance stems not from the difficulty of the topic. After all, marketing at its core is just about as simple as it gets. The problem is that to understand what a concept like marketing means is one thing, to actually apply the marketing principle to your day to day business life is an altogether more difficult challenge.

So, in brief. The philosophy of marketing revolves around a single, strikingly obvious idea. That idea is that we find out what people want before we start making and selling it....and yet when push comes to shove, they will continue to completely ignore the voice of the consumer when they actually make strategic decisions.

How can we account for this glaring mismatch of theory and practice?

Many managers seem to mistake market orientation for marketing orientation. Yes, there is a difference. In the former case, managers find out what the consumer thinks about their products and services. In the latter, the manager asks the marketing department what they think and they answer for the market. In doing so they demonstrate the presence of marketing gurus, possibly one of the most pernicious problems in the marketing world.

There are no gurus in marketing. To be a guru suggests you have immense knowledge, knowledge that can answer the strategic questions that a firm encounters. In marketing the last thing we need is a guru who thinks he or she knows what the market wants. The fact that they work for the company producing the product means they are just about the last person on earth who is likely to know how the customer is thinking.

5 Reasons Gillette Is The Best A Brand Can Get

Times are tough for marketers right now. So let me take you away to an oasis of consumer loyalty where huge margins and a ridiculously dominant market share are the norm. Where private label is non-existent and your biggest competitor is your second string product. No, it’s not a fantasy. It’s the alternative marketing universe occupied by Gillette.

Thanks to years of product innovation and heavy investment in marketing and advertising, Gillette occupies perhaps the most dominant position of any of the major global consumer goods brands with an estimated 70% share of the global razor blade category. Common sense might suggest that if you found yourself in this envious position you would sit back and count the billions of dollars in annual revenues that this market share delivers. But Gillette is owned by P&G, and while even the best marketing company in the world can’t improve much beyond that level of market share – there are plenty of other levers to pull to generate shareholder value. And those levers provide brand managers with a vital, best practice lesson in growing a brand's contribution even when market share remains constant.

First, drive profitability. Market share might have reached its zenith, but that does not mean your margins can't be squeezed. And squeezed tight. One industry insider in the UK recently revealed that despite a retail price of £9.72 for a pack of four Fusion razor blades, the actual manufacturing and packaging costs for this product is less than 30p. That’s a whopping mark-up of almost 3000%. How about that for a margin?

Second, practice positive cannibalization. Gillette launched its five bladed Fusion line in 2006 with a 40% price premium over Mach3, its previous three bladed offering. Despite the fact that both lines generate significant profits, with such a huge share of the shaving market it makes more sense for Gillette to focus its marketing resources on switching its own customers from Mach 3 to the more profitable Fusion line than trying to win any more share from competitors. That’s why Gillette is now spending millions to compete against itself with ads and online comparisons that attempt to convince its Mach 3 consumers that their current razor is simply not good enough and to trade up to Fusion. A year ago Fusion started a TV campaign called "Nudging Disciples" in which ads argued that "five is better than three," referring to the different blade counts of Fusion and Mach3. The spot shows Tiger Woods, Derek Jeter and Roger Federer literally knocking Mach3 razors out of men's hands with a golf ball, baseball and tennis ball, respectively. "Sometimes you need a little push to let go of your Mach3 razor," the narrator says. While it may seem crazy to spend millions to compete against yourself, the margin differences mean that this will deliver a better ROI than targeting the small number of remaining non-Gillette consumers over to the brand. Targeting existing customers is usually easier and the conversion rates are better.

When Trademarks and Dictionaries Clash

It’s no wonder that dictionary-makers have trouble with trademarks. There are legal repercussions as well as conflicting loyalties over what actually constitutes a word.

Dictionary-makers want to respect trademark ownership, yet their job is to record words and their usage as accurately as possibly. Some dictionaries, like the jumbo Oxford English Dictionary or its baby sister, the Concise Oxford Dictionary, have skirted the problem by banning proper nouns altogether, whether they be the names of persons, places, or branded products.

Dictionary makers often ask: If you start adding proper nouns to the dictionary word list, where do you stop? Why include entries for Aqua-Lung and Xerox, as Encarta College Dictionary does, but not Kodak? Should the decision be based on social importance or frequency of use?

We would argue that proper nouns in general and brand names in particular are words, and there’s no reason in principle why they should not legitimately be part of the overall word stock. Moreover, dictionary-users want them, which is why they’re included in many dictionaries around the globe.

Great Moments in Naming: Academy Awards 'Oscar'

Where Did “Oscar” Get its Name? We don’t mean Oscar Wilde or Oscar Hammerstein. We mean that 8-pound gold statuette so beloved in Hollywood.

Most nicknames have obvious sources, but not Oscar, as the awards of the Academy of Motion Picture Arts and Sciences are commonly known.

For instance, the Tony Awards on Broadway are nicknamed in honor of actress/director Antoinette Perry, who died in 1946. The Tony Awards began the next year. Television’s Emmy awards get their moniker from a pioneer TV engineer and the third president of the Academy of Television Arts & Sciences. He suggested “Immy,” a term commonly used around 1950 for the early image orthicon camera. The name stuck and was later modified to Emmy, which was considered more appropriate for a female symbol.

But Oscar’s origin is shrouded in showbiz lore.

Marketing Warfare Revisited

Marketing is war my friends. By now most of you have figured that out. And most of you are familiar with Marketing Warfare, a book I wrote with my former partner Al Ries on the strategy and tactics that can and should be implemented on the front lines of marketing. With help from Prussian General Karl von Clausewitz we concluded many things about the battlefield marketers face. Today on Branding Strategy Insider, I offer a brief re-cap on some of the greater points that will assist you as you head into the fray...

Defensive Position
Called for when your organization is the clear market leader.

Principles
1. Only the market leader should consider playing defense.
2. The best defensive strategy is the courage to attack yourself.
3. Strong competitive moves should always be blocked.

Key Points
-You strengthen your position by introducing new products or services that obsolete your existing ones.
-It’s better to take business away from yourself than have someone else do it for you.
-Attacking yourself may sacrifice short-term profits, but it has one fundamental benefit. It protects market share, the ultimate weapon in any marketing battle.
-When you own the pie, you should try to increase the size of the pie, rather than of your slice.

Offensive Position
Called for when your organization is # 2 or 3 in the market, and you have the resources to sustain a challenge to the leader.

Principles
1. The main consideration is the strength of the leader’s position.
2. Find a weakness in the leader’s strength and attack at that point.
3. Launch the attack on as narrow a front as possible.

Key Points
-What’s good strategy for the leader is bad strategy for #2, and vice versa.
-“Where absolute superiority is not attainable,” says Clausewitz, “you must produce a relative one at the decisive point by making skilled use of what you have.”
-There’s weakness in strength, if you can find it.

Eddie Bauer: Climbing to Higher Brand Peaks

Eddie Bauer, the iconic outdoor-clothing chain that sold goose-down coats to Mount Everest mountaineers and modern outdoor clothing to ski-schussing college students, filed for Chapter 11 bankruptcy protection Wednesday.

Eddie Bauer has been struggling to repay its debt. And the fact that consumers slowed down spending on anything but necessities can't have helped. In fact, the falloff came as Eddie Bauer was attempting to pull off what would have been a multi-year turnaround. "Eddie Bauer is a good company with a great brand and a bad balance sheet," said Neil Fiske, the company's CEO, though the retailer also said stores, catalog business and Web sites would continue operating, and that they will honor all customer gift cards, returns, and their points program.

According to our 2009 Customer Loyalty Engagement Index, Eddie Bauer was just edged out of 1st place by J. Crew, another iconic clothing brand, whose ascension was largely aided and abetted by the patronage of Michele Obama, with L.L. Bean a distant #3.

On the marketing side of things, Eddie Bauer recently celebrated a new line called "First Ascent," outfitting two mountaineers as they took on a climb of Mount Everest. On the financial side of things, there are plans in place to sell the company for $202 million to CCMP Capital Advisors.

Online Naming Facing Major Change

Prepare for a messy new world of domain names. ICANN, the little-known organization that oversees the Internet, plans to start selling the rights to anything from dot-soup to dot-nuts – a potentially unlimited number of customized new domain suffixes to compete with dot-com, dot-net, and all the other “dots” available.

Industry observers say those domains are likely to take their names from popular subjects, types of businesses, physical locations or even brand names. In other words, get ready for dot-bank, dot-airline, dot-pepsi or dot-whatever.

Companies naturally fear that if they don’t register their trademarks at the new domains, their trusted brand names could get scammed, hijacked or even held for ransom. For instance, as the Wall Street Journal reported, Marriott is said to be considering such new domains as Marriott.travel or Marriott.vacations or Marriott.nyc.

A spokesperson for the Internet Corp. for Assigned Names & Numbers (ICANN) says it has already spent $10 million on software that will spot cyber-squatters trying to grab desirable names and ransom them to real trademark holders. How secure is that software? Will it work? No one knows, yet.

Small is Beautiful for Brands

It's a big deal when a new chief executive takes the helm. All eyes, therefore, were on Fabrizio Freda at Reuters Global Luxury Summit in New York last week. Freda is about to become the head of Estée Lauder, and he took the stage to outline the future direction of the huge cosmetics group, which includes brands such as Clinique, M.A.C. and Crème de la Mer.

His big message? Smallness. Estée Lauder's market data suggests that consumers are opting in ever greater numbers for smaller SKUs - even when bigger formats offer significantly better value for money. Freda says he is planning smaller formats of fragrances and cosmetics, with lower entry price points and, hopefully, better sales.

Freda wasn't the only soon-to-be chief executive preaching the gospel of minimisation last week. Bob McDonald, who steps up to the helm of Procter & Gamble on 1 July, says his focus will be on global expansion and the ability of P&G to adjust its range to meet the needs of consumers in emerging markets.

McDonald cited Pantene, one of the brands he oversaw in India while head of haircare, as a prime illustration of the future direction for P&G. Pantene is sold in mini-sachets in India, as many consumers cannot afford bigger formats and prefer smaller, single purchases. Smallness triumphs because it fits the needs of emerging markets better.

At the other end of the pricing spectrum, smallness is proving key for several of the world's luxury brands. Bain & Company's 2012 Luxury Market Update suggests that leather goods brands such as Louis Vuitton, Gucci and Hermès will return to prosperity faster than ‘pure' fashion brands such as Christian Lacroix or Valentino.

Brand Centric CEO's Will Rule The Day

On a wet and windy Manchester afternoon in 2001, Sir Roland Smith, chairman of Manchester United plc, welcomed analysts and journalists alike to Old Trafford.

He introduced chief executive Peter Kenyon and sat down. Kenyon surveyed the room. His presentation was short and consisted of a single slide that summarised the club's fortunes: turnover up, operating profit up, dividends up. Kenyon sat down and David Gill, his deputy, rose from his chair and began a more detailed, hour-long presentation of the figures.

It was a typical presentation of preliminary results, the kind delivered by every mid-sized company once a year. Except for what happened next. Kenyon returned to the podium with a slide entitled 'Liberating the brand'. He discussed brand extensions, co-branding, and creating brand affinity and brand loyalty. He talked with vision, ambition, and most surprising of all, he talked like someone who understood branding.

Reviewing his years as chief executive at the club it is hard not to be impressed. The foreign tours to support merchandising and the alliances forged with Nike and the New York Yankees are evidence of shrewd leadership.

But they are not the reasons that led Chelsea to make their decision to steal him from United with a £2m salary. Kenyon, unlike almost every other chief executive in the UK (and many CEO’s in the US), is brand-centric.

Brand Migration: Navigate the Passage

I guess you’ll have heard about the Versace hotel, the Ferrari laptop, and the Apple cell phone. Yet, had I suggested any one of these products to you fifteen years ago, you might have been forgiven for thinking that a few extravagant typos had made it past the editor. Yet today, we’ve become perfectly used to extreme brand extensions like these.

But, can you go too far? Brands have been stretching their way into such new and unexpected product categories that some product progeny can be impossible to link to their brand parents.

For example, some years ago, Bic (the disposable pen, lighter and shaver brand), decided to migrate into the perfume business by developing cheap disposable scents. The attempt failed in a big way. Consumers couldn’t draw a credible link between the erstwhile stationery manufacturer and the idea of the company supplying a budget perfume. So what about a rich smell? Trump tried this avenue, launching ‘Donald Trump, The Fragrance’, a perfume for the millionaire wannabe. The bid failed and Trump’s men’s scent vanished from the shelves.

The very fascinating fact of the matter is that, to migrate your brand into totally new product categories requires more than the power of your brand alone. Just ask Louis Vuitton. Over the years most of us have become accustomed to linking the brand with everything from clothing, shoes and jewellery to pens and games. The company has managed these multiple successful product migrations by establishing some pretty clever brand alliances, all of which have added the magic dust of brand credibility that’s so necessary to premium-priced goods.

A couple of years ago, Louis Vuitton released its first timepiece collection. A Louis Vuitton fan would recognise the product’s brand origin in a trice, given the irrepressible use of the ‘LV’ monogram. But, as I said a moment ago, the power of the brand alone is not enough to sustain a successful migration. Louis Vuitton had engineered something unheard of until then: they teamed up with another brand to maintain credibility in the timepiece product category which was new to the Louis Vuitton brand.

Defying The Genericizing of Brands

As marketing budgets shrink and tip in favor of value messaging and cost incentives rather than brand-building, the absence of the latter in favor of the former is acutely dangerous. This type of price-driven activity has historically been considered a generic, low-level marketing practice, and normal branding rules have not applied. While that may have worked well enough during flush times—when larger branding efforts acted as a halo and compensated for generic activity—today all communications must incorporate brand-building. Otherwise,brands risk coming across as interchangeable, schizophrenic, watered-down and reactionary.

Take, for instance, the interchangeable messages that are coming from various U.S. fast-food joints. There’s Subway’s $5 Footlong, Arby’s 5 for $5 and Little Caesars $5 Hot-N-Ready. The simple message: Get more for less. Little is said about the taste or quality of the food. And little is said of Citroën’s technological prowess in a U.K.campaign that simply lists the prices and economic advantages (fuel-consumption data) of the automaker’s C1, C3 and C4 models. This is a real departure from Citroën’s previous long-running campaign for the C4, which starred a funky futuristic transformer that illustrated the tagline “Alive with technology.”

Even more problematic is when price-led efforts are disconnected from concurrent branded efforts—evident in an effort for the Morrisons supermarket chain in the U.K. In a clear attempt to stifle the ominous threat from discounters, Morrisons has ramped up its price-led advertising. A series of cheap-looking ads fronted by Nick Hancock—a fairly low-profile, low- cost TV face—highlight some worryingly low prices: all the ingredients for a family barbecue for just £4. Confusingly, a simultaneous campaign uses higher-profile celebrities (Helen Baxendale,Tara Fitzgerald, Lulu) waxing lyrical about their passion for fresh, quality British produce.

Schizophrenic behavior of this nature dilutes core brand equity. While it may help in the short term, knee-jerk reactions to the immediate environment can prove detrimental to the long-term value of the brand, especially if they don’t link up to what a brand represents or the bigger brand idea.

Brand Reactions To Anxiety

Brands have adopted a variety of tactics in response to changing consumer attitudes and behaviors. In the first quarter of 2009, JWT monitored more than 100 brand responses to the recession in our 16th installment to the AnxietyIndex. We found that most approaches fit into six buckets: optimism, humor, nationalism, nostalgia, consumer empowerment and value/price. (Some of these approaches overlap.)

Optimism
During crisis, people learn to live with losses (jobs, homes, savings) and uncertainty, making them more sensitive to what really matters. As in every extreme change and loss situation, people start pondering the meaning of their lives. Brands are taking part in this process by trying to inspire consumers with optimism. Coca-Cola Spain’s "Open Happiness" campaign tackles the meaning of life via the concept “What would you tell someone who has just arrived in the world in times like these? ”While the times might seem dire, Coca-Cola reminds us that the future always offers hope.

There are also two compelling case studies from Argentina that focus on optimism; both campaigns were executed after the country suffered from a period of high unemployment, high inflation and general social instability in the early aughts. Beer brand Quilmes debuted a stirring television spot for the 2002 FIFA World Cup that featured the country’s soccer players cheering on the nation, urging their fellow citizens to pull through and get past the crisis while Aerolineas Argentina’s 2003 campaign focused on the concept of “Argentine-ness”as a powerful social connector.

Humor
Trying to make light of a dismal situation, brands are resorting to all sorts of recession humor, some successfully (Jet Blue poking fun at those who seem most responsible for the financial crisis), others with a thud (Manhattan Mini Storage using recession wordplay to persuade those who must downsize to store their belongings; one ad highlights the “Storagista,”defined as a “city gal who downsizes to a studio and stores to save money”).

Great Moments in Branding: Neil McElroy Memo

After its successes with Ivory and Crisco, P&G developed a new business technique called "brand management." Because it focused attention on a product rather than a business function, brand management turned out to be similar in its effects to the multi-divisional structure introduced by Alfred Sloan at General Motors. And it had the same powerful tendency to decentralize decision making.

The shift to brand management began on May 13, 1931, with an internal memorandum from Neil McElroy (1904-1972), an athletic young man who had come to P&G in 1925 right after his graduation from Harvard College. While working on the advertising campaign for Camay soap, McElroy became frustrated with having to compete not only with soaps from Lever and Palmolive, but also with Ivory, P&G's own flagship product. In a now-famous memo, he argued that more concentrated attention should be paid to Camay, and by extension to other P&G brands as well. In addition to having a person in charge of each brand, there should be a substantial team of people devoted to thinking about every aspect of marketing it. This dedicated group should attend to one brand and it alone. The new unit should include a brand assistant, several "check-up people," and others with very specific tasks.

The concern of these managers would be the brand, which would be marketed as if it were a separate business. In this way the qualities of every brand would be distinguished from those of every other. In ad campaigns, Camay and Ivory would be targeted to different consumer markets, and therefore would become less competitive with each other. Over the years, "product differentiation," as businesspeople came to call it, would develop into a key element of marketing.

33 Tips & Tactics for Generating Names

Over the last decade we have generated new names for hundreds of companies, products and services. Here are some of the shortcuts, thought-starters and mental prods we've observed along the way.

1. Work Backwards From The Selling Proposition.
 Start by writing down an advertising headline, or a positioning statement, or a themeline for your product. Then work toward a name that reflects that marketing strategy. You have an instant coffee that tastes and smells like real ground roast. The name: TASTER’S CHOICE. Your new bath soap has so many oils and softeners that it leaves the skin silky soft to the touch. CARESS. Your chain of Mexican restaurants serves a mouth-watering range of that spicy cuisine. THE WHOLE ENCHILADA.

2. Spell It A Different Way.
A gelatin dessert came out as JELL-O. A fruit-based drink for kids came out as FROOT. An intentionally misspelled word could become your product’s name. Or company name: TOYS R US.

3. Go Against The Grain.
Study the competition. If everyone else is high-tech, think high-touch. If all the category names seem masculine try feminine. A hospital in Arkansas found that its competitors all had serious, straightforward names for their maternity centers — The Maternity Center or The Birthing Center. So this hospital called theirs STORK & COMPANY. The community loved it. There’s a long list of cars with 3-syllable names all ending with the letter “a”: Achieva, Aurora, Bravada, Celica, Corolla, Cressida, Integra, Maxima, Miata, Previa, Tredia. Et Cetera. If you were branding the next new model, maybe you’ll go against the grain.

4. Generate First, Judge Later.
Get yourself (or your task force) started by generating as many different names as you can. Write everything down. There are no bad ideas, yet. Save the judging for later. In a group session, try this penalty for saying, “What a lousy idea.” That person has to produce two more ideas for names.

5. Go For Quantity.
Don’t fall in love with a short list of two or three possible names. Develop lots of names. In a typical trademark search, you’ll lose at least 8 of every 10 names you generate. (Sometimes more.)

6. Try A Random Idea.
Creative consultant Roger von Oech suggests opening your mind to things that have nothing to do with a problem you’re working on. Open your dictionary to page 133 and pick the third word. Make that word relate to your naming need. (Could you use it as a metaphor?) Write down the name of your favorite sports team. How would it impact the project you’re working on? Random ideas can make your mind blossom.

Has Google Met its Match in Bing?

Despite all the bling that has been spent on Bing, few people are giving Microsoft's new search engine much chance of stealing away even a fraction of Google's dominant market share. That makes sense when you consider the strength of Google's brand - the term 'Google' has become the verb for undertaking an online search. The brand, we are reliably told, is now the world's most valuable, with an equity of more than $100bn.

Google enjoys a near 90% share of the UK and 72% share of the US search markets thanks to a loyal user base which returns to it time and again for their online information. Despite this dominance, you can see why Microsoft thinks it has a chance with Bing. For all its current loyalty and brand equity, Google does have an Achilles heel and it could prove relatively easy to erode that loyalty and grab share. Let me explain.

One of the most over-used phrases in the marketing lexicon is 'brand loyalty'. There are many reasons for a return purchase, and only a few of them relate to a consumer's relationship with the brand.

Take all the pompous marketers from banks and mobile-phone networks that seem to dominate the rosters of most marketing conferences. Almost all of them mistake a consumer who is locked into their brand through significant switching costs with one who is enraptured by the brand and therefore unlikely to stray.

Switching costs are the painful, time-consuming steps required to change brands when you are unhappy with the service you are receiving. These costs usually account for a far higher proportion of repeat purchases than the higher-level, stronger brand loyalty for which they are often mistaken. It is like asking your parents on their silver wedding anniversary for the secret of their long and happy marriage and being told that a divorce would have been too messy. It is loyalty, of a sort; but not the best or strongest kind.

Which brings me back to Google.

Naming Research Q & A

Can you really test a new name with customers and prospects? What can you expect to learn from the process? To answer those questions, we sat down with Sandra Bauman, PhD., founder of Bauman Research and Consulting.

Over the last 20 years, Dr. Bauman has managed 250 studies for clients in corporate image. Among her clients are Samsung, Bayer, Stryker Orthopaedics, Brandtrust, Thomson Healthcare, Pfizer, J.H. Cohn and Colangelo.

Q: Sandra, let’s start with a question many clients ask: Is it really possible to research a new name with customers or prospects?

Of course! But as with any research endeavor, it’s critical that the research be designed very carefully to get the most meaningful – and unbiased – results. As the saying goes, “garbage in, garbage out.” Researching names can be tricky – it requires a thorough understanding of the objectives and a carefully crafted series of questions that allow respondents to free-think about the names as well as rate the names for appeal, appropriateness, connection to corporate values and other criteria.

One of the ways that research can be most helpful is in uncovering associations or connections that people make of the names to other products, companies or situations. Every name communicates something (and if that something is nothing, that’s a problem!). Research can show what first comes to mind when a respondent hears or sees a name, what other things the name sounds like or reminds them of, and most importantly, what they think a product or company by that name would stand for, be, do. By evaluating these reactions we can get a sense of which names are doing the best job at communicating what we’d ideally like, and which are disasters waiting to happen.

Q: So what are the limitations? What is unrealistic to expect of name testing?

Sound: Differentiating Brand Builder

Some time ago, I was flicking through a copy of ‘People’ magazine, when I beheld something on its pages that caused me to just about fall off my chair. An ad promoting a TV series about Elvis, which was to run on CBS, was the source of my surprise. “The King is Hear…”, proclaimed, typographically, what turned out to be the first part of this innovative notice. On turning to the next page of the magazine, sure enough, I did hear the King. Elvis was singing from the pages and a voiceover was promoting the series. If you managed to see this copy of the magazine, I’m quite sure you’d have found the advertisement as unforgettable as I did.

Naturally, I got on the phone straight away and tracked down the genius behind the ad. Tim Clegg, the inventor of the concept and CEO of Americhip in California, told me that the ad had secured 100% awareness among ‘People’ magazine’s readership - for the first time in the publication’s history. The innovative combination of sound and vision was an arresting achievement, in spite of the fact that we live in a world where hearing and sight are overtaxed senses. Yet, used in this highly differentiated way, sound and vision communicated powerfully.

This appeal to a combination of senses seems to do the trick when aiming to secure consumer attention. So it’s ironic that sound is not more strongly deployed as a sensory communication channel media online.

BrandQuote - June 7

“The crucial ingredient in the success of any brand is its claim to authenticity.”

            - Al Reis and Laura Reis, from The 22 Immutable Laws of BRANDING

Sponsored By: +2 Marketing Consultants

Chinese Naming Strategy Q&A

Someday, it will be the biggest consumer market in the world. No wonder that marketers are increasingly interested in Chinese naming.

With his training in classical and modern Chinese literature plus an advanced American psychology degree in bilingual memory research, Andy Chuang is the first in his family’s 1,500-year history to master not only Chinese but also English. His company, Goodcharacters.com in Fresno, California, specializes in Chinese naming and linguistic evaluation.

We sat down with Andy to talk about the rationale and the process of Chinese naming.

Q: Americans have a set of basic assumptions about how they name things. Is it true that the Chinese have a completely different orientation towards naming?

Americans typically choose existing first names for their babies. For example, John, David or Mary. However, the Chinese name their babies in the same manner that you would name a company or a product. The Chinese pick some “good characters” and put them together to form a “good meaning.”

Consider the Chinese president, Jiang Zemin, as an example. Jiang is his family name. His first name, Zemin: the combination of the two characters, Ze and Min. Ze is a “pool” or “benefaction.” Min is “the people.” By putting these two together, Ze-min means “benefit to the people” or a “blessing for the people.”

GM: Titanic of Brands

The collapse of GM and the problems they face going into bankruptcy cannot be overstated. It is amazing how a company that was once the cornerstone of American industry could decline unimpeded over such a long time without any solution being adequate to the task of saving the company.

The scale of the decline can be examined in the brand equity dollar value of the corporate brand (the portion of market cap attributable to the GM name):

2003
General Motors $4.86 Billion
Toyota $19.05 Billion
Industry Average $6.19 Billion

2008
General Motors $0.32 Billion
Toyota $21.85 Billion
Industry Average $5.43 Billion
Source: CoreBrand's Directory of Brand Equity

The squandering of brand equity at the corporate level is just the tip of the iceberg. The collapse of individual product brands despite recent improvements in product quality proves the dysfunctional quality of GM management.

The Importance of Brand Heritage

I'm calling out British marketers today. They have a lot to learn about the importance of provenance, heritage and history.

May was undoubtedly marketing's month for nostalgia. M&S ran triumphant three-day penny bazaars to honour its 125-year anniversary; meanwhile, Sainsbury's out-heritaged its rival, with its 140-year celebrations capped by a beautiful ad from Abbott Mead Vickers BBDO.

In addition, Nestlé relaunched the Milky Bar Kid with a montage of half a century of uneasy blond, bespectacled children reading lines to camera. Persil and Virgin Atlantic also climbed onto the retro brand wagon with their own heritage campaigns. Meanwhile, Hovis announced this month that its 'Go on lad' campaign had grabbed a 3.5% increase in market share and added £60m to the top-line of the business.

This trend is surprising, given that one of British marketing's biggest weaknesses is its Anglo-Saxon disregard for history and provenance.

It's a deficit I have become familiar with as a consultant. I was trained in the US business-school model, which rejects focus on heritage in favour of consumer orientation. However, all that changed seven years ago when I started consulting for some of the great luxury brands. Personal discretion and an iron-clad non-disclosure agreement prevent me from identifying them, but trust me, they are great.

It took my new French masters more than a year to beat the historical reticence out of me and show me the power of using history to inform brand strategy. It might sound like merde de vache, but in the following years I have come to appreciate how right they are.