LETTERS FROM THE GLOBAL PROVINCE
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Ads That Don’t Add Up. In February, we had a New York dinner with two former chairmen of what were once a couple of the finest advertising agencies in the world. Over our moussaka, they confessed to me that they simply do not understand what advertising today is all about. To them, contemporary ads, which sell lifestyle and atmospherics, instead of the specific attributes of a product or service, simply don’t make sense. As Wendy’s, the burger chain, was once wont to say, “Where’s the beef?” Everybody has taken to selling evanescence, not substance.
We would submit that something strange is going on in the world of brands, and that this turn of events provides tremendous opportunity for the agile competitor. In the age of Wal-Mart, massive debranding has set in wherein products have no character. Wal-Mart itself, which has turned out to be a rather vapid, giant distribution system for the Chinese economy, is itself relatively characterless, providing tremendous opportunity to competitors who know how to add a little color, verve, and flavor to their mix. But the general debranding of business is the greatest threat to American enterprise today.
Before going any further, let’s define a brand. For our purposes, it is the guarantee of a very positive experience when we use a product and service. The only value of traditional advertising, which has just about lost its horsepower in an over-messaged world, is to communicate this guarantee.
Roadblocks to Branding. The brand theoretician David Aaker, professor emeritus at UC Berkeley and today a principal at Prophet (www.prophet.com), yet another brand consultancy, laid out way back in 1995 some of the barriers to brand-building that cropped up in the late twentieth-century business environment:
“It is difficult to build a
strong brand in today’s environment. The brand builder can be inhibited by
substantial pressures and barriers, both internal and external. There are 8
different factors that make it difficult to build brands: 1. pressure to
compete on price; 2. proliferation of competitors; 3. fragmenting markets
and media; 4. complex branding strategies and brand relationships; 5. the
temptation to change identity/
But, of course, he did not include the principal obstacle. Brands can no longer just be national: to be effective, they have to be global. And yet, with paper-thin margins in so many industries, it’s hard to afford the investment necessary to build a global brand. One needs a global strategy that is counter-intuitive and penny pinching in order to stage a worldwide breakthrough. On a recent Internet search, we turned up a clever website for DNA, a New Zealand branding firm, which got our attention ( “Politically Incorrect Sells Vodka” on Agile Companies). You must get known around the world and you must get known for your product or service guarantee.). Then, of course, we went on to look at its list of clients. Certainly none had achieved global status, or, at least, we had not heard of them. The cruel truth is that if you are a New Zealand company, in a very small market, you need to go global. Occasionally a small innovator gets it done (see
Making Suds at P & G. One response to this challenge is to bulk up—to become a bigger company and only sponsor titanic brands. That’s what P & G has done, which the recent acquisition of Gillette only confirms. It now has 16 superbrands, each with over $1 billion in sales, and is picking up another 5 from Gillette:
“P&G is hoping that this growing stable of superbrands will help it to weather the industry’s tough environment. Competition for the modern consumer’s attention is ferocious. Steven Fredericks, the chief executive of TNS Media Intelligence, says that he adds an astonishing 400-700 new brands every day to the 2.1m brands that his New York company already tracks. These can range from a new face cream to a new model of car, or a film (which is now considered a brand). Advertising executives in Japan reckon the number of new beverages that enter the market each year runs into the thousands. Most perish almost instantly in the relentless battle for scarce shelf-space in Japan's small shops.” See The Economist, “The Rise of Superbrands,” February 3, 2005.
We are most admiring of Proctor and Gamble. Of its famous brand management system. Of its ability to bounce back from the considerable slump it experienced just a decade ago. Of its ability to internationalize (if not globalize) itself after years of being too fastened on the domestic heartland in the U.S. But we regard its current strategy as only a stopgap measure.
The game is being changed by China, India, and others to come. To gain admission to the vast China market, major U.S. companies, in industry after industry, are giving up control of their technology, their standards setting ability, their products, and, we would claim, their brands. They are being hollowed out, to put it nicely. They are committing suicide, to put it bluntly. In this regard, we recommend an immensely important article called “Price Isn’t Everything,” Across the Board, March/April 2005, pp. 37-43, which makes clear that the price of entry into China is too steep. China, incidentally, is already an important market for P & G.
The Answers Are at Hand. Oddly enough, the answers to this dilemma are at hand. Linux and an array of free other Open Source initiatives that vest control of standards in millions of collaborators about the globe will help. More attention to smaller developing economies, which are growing at twice the rate of the developing nations, should be a part of any corporate strategy. National economic policies which aid small companies that don’t need China to grow can also help. More unique brandbuilding, beyond the narrow concept of a branding that MBAs espouse, is another part of the equation for continuing success.
A Limp Envelope. What’s required, at every turn, is a company culture that understands how important it is to support the brand concept at every level in every detail. If you are a company that mostly uses voicemail to talk to customers, be assured that you are heading to brandlessness, because you are using commodity communications. Gary Gladstone, the photographer who donated The Good Egg (below) understands the nuance of branding to a tee:
“I only recall one branding discussion in my business. I promise you, that this conversation took place almost exactly as recalled. Yes, it’s preachy, and my secretary looked stunned, but I really did produce this explanation of why we need to ‘brand’ our outgoing mail. The reason why I remember it is that it helped me focus the concept into a real plan. This kind of branding is the only way we have to suggest regularly that thoughtful excellence is part of our business. (Cross my heart!)
About ten years ago, I discovered an envelope on my office table waiting to be picked up and delivered by messenger to my client. The client had requested a few isolated samples to help sell an idea to his customer.
My secretary, Ella, had dutifully scrounged up and re-addressed, with a marker pen, a bent used brown manila envelope and placed the samples inside. I was embarrassed.
I asked her to re-package the shipment using a brand new bright color envelope and our best logo label with a typewritten address. The label was to be placed using a T-square so it didn't look ‘slapped on.’
She frowned and mumbled, ‘Why bother? The secretary will only rip open and toss out the envelope. She's just delivering just the enclosed samples. Besides, [Len, our client] already knows us.’
‘We’re in the art business,’ I replied. ‘We need to look like what we do. If we look reused we’re not going to be thought of as excellent no matter what’s inside the package. The impression starts with the outside of our envelope. Everything we send out has to carry that quality look. We need to be remembered at a glance as being high level. Our packages tell that to the receptionist, secretary and assistants. We’re building a stronger base with this packaging. Len’s assistant will be the buyer someday. I want them to know that some high quality thing just arrived before they open the package. It elevates both their expectations and pre-qualifies the contents.’
She looked stunned, shrugged and complied. I’m not sure she ever agreed but, as a good secretary, she never sent anything out that wasn’t ‘our look’ again.
(I use a version of this idea when I wear a business suit instead of a Bush Jacket to shoot executives. It pre-qualifies me in their eyes. That’s a big head start in getting an excellent result from the shoot.)”
A crummy envelope is an exercise in debranding. And the brand is your key to survival in a ruthlessly competitive world.
Photograph credit: “The Good Egg.” © Gary Gladstone 2005
Copyright 2005 GlobalProvince.com