Born-again brands
Clint Witchalls looks at what brand managers have to do to keep their products in tune with the zeitgeist
Sales of Hummers are down. The mega gas-guzzlers that became associated with the boo-yah! patriotism that surged through America just after the Gulf war, are no longer in step with the zeitgeist. Americans have lost their appetite for the war, oil prices have gone stratospheric and the current trend is towards sustainability. The tide has changed and the Hummer hasn’t kept up. As a result General Motors, the company that has owned the brand since 1998, has put it up for sale.
Trends can change quickly and brands that are everybody’s darling today can be a pariah tomorrow. Firms should continuously check the health of their brand by asking two questions: how relevant is my brand? And, how differentiated is it? Of the two, Nick Keppel- Palmer, head of consultancy at brand agency Wolff Olins, says that the second is the most important. ‘If you’re making salads at 3,000 calories a pop and the nation is dying of obesity, that would suggest to me that perhaps what you’re doing is not relevant, even if it is different,’ he says – taking a swipe at McDonald’s attempt at brand reinvention.
The challenge is to differentiate your brand while maintaining its relevance. Declaring that your firm is ‘going green’, for example, is not very compelling to consumers or to shareholders, because it’s what you should be doing anyway. ‘There’s a big swathe of companies that have jumped on this ethical eco-movement without thinking what they are going to do differently,’ says Keppel-Palmer. ‘What brands have to do to evolve is to understand themselves very well and understand the market that they’re operating in. McDonald’s is never going to become the purveyor of healthy foods.’
On trend or counter-trend
If your brand is either irrelevant or undifferentiated, it’s time for a make-over. It’s at this juncture that brand owners need to decide whether they’re going to go with the current trends or against them. According to Richard Huntington, director of strategy at Saatchi & Saatchi, going counter-trend is a perfectly legitimate option.
The confectionery maker Cadbury’s has decided to go counter-trend with its Dairy Milk bar. Here is a high-fat, high-sugar, fully commercial product, when the predominant trend is towards health and fair trade. But Cadbury’s have committed to a single bar: Cadbury’s Dairy Milk. ‘None of this innovation stuff,’ says Huntington. ‘And they’re driving the heart of the brand – that purple pack – regardless of what trend forecasters say about health, because there’s a bit of us that says, “I really like that and sometimes all I want is a bar of chocolate and I accept all the downsides that go with that”.’
A few years ago, Unilever did the same thing with Pot Noodle. The brand was transformed from the housewife’s favourite convenience snack to the ‘slaggable snack’. In the face of healthy eating, the brand owner said: ‘It’s a bit disgusting. It makes you feel a bit disgusting, and that’s why you love it.’ A refreshing position, but not necessarily a sustainable one. ‘It drove value for that brand for considerably longer than you might have expected, given the product,’ says Huntington.
McDonald’s might have won more supporters if it had gone counter-trend and decided to be the best burger bar in the world. But going counter-trend isn’t for everyone. Huntington says that consumers generally follow the trend and markets force brands to follow the predominant trend. But there’s always latitude in the counter-trend.
Sustainability
Sometimes, brands are overhauled as a result of a crisis. For example, Cadbury’s decided its Dairy Milk brand needed a facelift following a product recall in 2006, when a batch of chocolate bars became tainted with salmonella bacteria. Today, there is another crisis, but this one affects all firms: global warming. More or less every company has sustainability on its agenda. No one, whether they believe the Intergovernmental Panel for Climate Change’s assessment of the situation or not, can ignore the fact that consumers are growing increasingly concerned about the environment. Suddenly, ethical consumers are everywhere, fretting about the environment, workers’ rights and animal welfare. It’s not good enough just to please shareholders any more. You need to keep all of your stakeholders happy.
According to Keppel-Palmer, companies have reacted in different ways. The first has been to buy a bit of virtue. Many jumped on the bandwagon – Unilever bought Ben & Jerry’s, L’Oreal bought Body Shop and Cadbury’s bought Green & Blacks. But Keppel-Palmer says that this is an ineffective strategy. You can’t make your company seem ethical by buying an ethical company. If anything, the ethical smaller company will be tainted by the seemingly faceless and much larger parent.
The second tactic, used by firms to inject a bit of green into their brands, is what Keppel-Palmer calls the ‘diversionary tactic’. In other words, green-washing. ‘BP made a big – and probably genuinely well-meaning – shift towards being more concerned about the environment,’ says Keppel-Palmer. ‘Yet, the reality of their business – if you look to see where they spend the majority of their money – is non-renewables. I think it’s puff. It’s diversionary.’
The third way is to set up a green or an ethical division. General Electric created a division called Ecomagination to develop green products. Virgin said that it would use profits from Virgin Atlantic to look at alternative types of aviation fuel. Of the different approaches to going green, Keppel-Palmer finds this the most even-handed response. It says: ‘We don’t have all the answers, but we’re going to try and sort this thing out.’
Some companies are built from the ground up with sustainability at the heart of what they do. Kuapa Kokoo, the Ghanaian cooperative that makes Divine Chocolate, is just one example. ‘The thing about sustainability is it’s not just an add-on,’ says Keppel-Palmer. ‘It’s got to go to the heart of the business. And that is a huge challenge in how you manage a brand transition.’
Being only partly ethical or sustainable will never cut it. If you sell a range of ethical diamonds, what does that say about the rest of your diamonds? That they’re from conflict zones? If you’re an energy company and you have a ‘green tariff’, what does that say about the rest of your energy? Companies which try to be all things to all consumers will come a cropper. Tesco offer three ranges of food: expensive, middle and cheap. Something for everyone. But if you buy an organic chicken, you have to avert your eyes as you push your trolley past the white-label chickens. This is going to be a challenge for Tesco, because companies like Waitrose say: ‘We don’t have a quality range because everything we do is quality.’
The participation brand
The two big no-nos in moving to a sustainable position are to believe you can do it all on your own, and to position yourself as having achieved it. To say you are green is to invite scorn. To say you are trying to be green and you are working with suppliers, partners, shareholders and customers to figure out how to become more green, is a more honest stance to take. It invites people to get involved. ‘If someone says, “We checked all our supply lines and all of the Chinese workers are well paid according to the standards we set ourselves,” you haven’t given me a reason to buy,’ says Keppel-Palmer.
The Wolff Olins belief is that brands have to move away from being monolithic, citadel-type structures that beam messages at consumers to something that’s a lot more participative. People don’t trust companies, they trust their family, friends and communities. And, with the growth of blogs, social-networking sites, wikis and other wonders of Web 2.0, online communities are now vast and growing in influence.
‘Deference is dead,’ says Keppel-Palmer. ‘We live in a world where you don’t believe what you’re told. You’ll believe your peer group and if your peer group is participating in this brand, then you’re much more likely to get to a position where people will trust what you’re doing. To gain trust, companies have to invite consumers into the conversation. It has to be a shared ideology, and that means giving consumers permission to question companies and to get involved in brands in ways that companies had never intended.
Be authentic, and perform
Sustainability may be the biggest show in town, but it’s not the only show. A crisis can come from any direction. For a newspaper, it might be declining circulation – something that has afflicted most newspapers. Huntington is impressed by how the Guardian has responded to eroding readership. ‘They’ve transformed themselves from a lefty broadsheet published in Manchester and London to being one of the world’s great opinionated journalism brands,’ he says. ‘It has more readers in Texas now than in the UK.’
The Guardian ‘got’ the Internet in a way that many other British daily newspapers didn’t. They even won an Emmy for ‘Baghdad: A Doctor’s Story’, an online movie about life inside Al Yarmouk hospital. But the Guardian could not have made the transformation if it hadn’t stayed true to its values. Brands have to be authentic. ‘Consumers are getting very cynical and can sniff out new-product development brainstorms,’ says Huntington.
To transform a brand successfully requires knowing the motivation and the values of the chief executive or founder of the company. Brand owners need to ask what the point of the organisation is. What does it believe, deep down?
‘No one cares about your positioning any longer,’ says Huntington, ‘they want to know what your position is, by which I mean, they want to know what your point of view is. It’s not acceptable any longer for companies to be all things to all people. There are a number of organisations that are making real mileage from having a strong point of view. So Dove has gone from a moisturiser-rich brand of soap to a global movement about what constitutes female beauty. It’s a rallying cry for female self-esteem.’
But there’s no point being authentic and having a strong point of view if your product is duff. To transform a brand, the product has to perform. Skoda transformed its brand from eastern European tin and rivets to the smartest value on the forecourt. It couldn’t have done so if it wasn’t for the fact that the product really does perform. Lurpak performs too, which is why it was able to transform itself from being a Claymation trombone player to the foodie’s favourite butter.
‘The idea that there is no difference between products these days, it’s all about emotional differentiation – do great ads and people will go out and buy it – is not so true,’ says Huntington. ‘Authenticity and product performance are the two golden rules.’
Don’t get ahead of yourself
But sometimes companies get too far ahead of the curve for their own good. Huntington recalls doing work for the Iceland supermarket chain in the late 1990s. They decided to reinvigorate the brand by taking a stand against genetically modified food and artificial additives – things they knew the customers found disgusting. Having succeeded with that, they tried to embrace organic food. ‘The customers weren’t prepared to go with the brand on organics,’ recalls Huntington. ‘You need to challenge people, but you’ve got to make sure they’re coming with you, instead of single-mindedly charging ahead.’ Which brings us back to participation. If you’re going to get ahead of the curve, at least make sure your customers are with you.
Clint Witchalls is a senior editor at the Economist Intelligence Unit