The Strategy

The explosion of interest in luxury clothing brands (Prada, Coach, Armani, etc.) by consumers in the past 5 years has recently caught my attention. I've never really considered myself a luxury consumer, and generally opt for value-driven purchases (quality/cost), but this phenomenon has genuinely intrigued me as a marketer. Part of this expanded interest has been driven by the brands themselves, as they create more depth in their brand architecture to make room for popular interest and attempt to separate their gateway brands from their parent brand, expand their distribution to make their products more accessible, and generally enhance engagement with mainstream consumers.

For a few months, I considered it to be a reasonable strategy. After all, BMW has been consistently successful with their tiered 1-,3-,5-,6-, and 7-series approach to their automobiles. Similarly, many traditional electronics manufacturers implement a tiered approach to their products (e.g. Samsung's Galaxy series of smartphones). Why wouldn't it work with clothing? There are two reasons.

The Problem

First, the problem is that clothing is more than an aspirational good- it is also how individuals brand themselves. To that effect, the brand of clothing and the brand of the individual are closely interrelated, continually affecting the positioning of each other. The brand of the individual and the company are co-dependent. An unsavourly individual exhibiting a luxury brand will likely degrade its positioning, while a celebrity doing the same will likely enhance its positioning. Thus, you might consider it a "law" of branding that any product with a co-depenent branding environment requires at least as much "corrective" activity as it has erosional activity in order to ensure the desired positioning of the brand and maintenance of its value,

Second, my concern is further elevated by the relative permanence of clothing. While fashion can move at a quick pace, the physical good, in most cases, will outlive any particular trend. With a brand catering to fashion-forward individuals, this clothing must go somewhere once it is considered unfashionable (as defined by the owner). To that, I have noted more and more "high end" brands being worn by individuals whom many would believe live non-aspirational lifestyles, thereby lowering the prestige of the particular brand. Similarly, a larger volume of product on the market means correspondingly larger volumes receiving price discounting, further eroding the prestige positioning of the product.

One example of the relative failure of this strategy is Armani. Armani introduced its mass-market Armani Exchange brand in 1991, and now has dozens of stores in suburban malls around North America. For the reasons stated above, as well as their lackluster financial performance shown below, I believe that their tiered brand strategy has failed in the long-term. To illustrate this, I was prompted to write this article by a man begging for money, wearing an Armani Exchange t-shirt, clearly obtained through a second-hand store. My perceptions of the brand had already been eroded by unsophisticated suburban youth wearing similar shirts. Neither of these groups represent a lifestyle that I aspire to achieve.

The Success

Two companies who have absolutely taken a long-term approach to their brands are Abercrombie and Apple. Apple is extraordinarily careful with their brand. Beyond the obvious techniques that they use to define their category and build hype, Apple has a lot going on behind the scenes. For example, Apple prohibits its mobile phone carriers and retailers from advertising many of its products with or comparing it to any others. They also control pricing very closely, ensuring that no discounts or bonuses are given to customers unless retailers are explicitly invited to do so.

Abercrombie has taken control of its brand in a more interesting way. In August, the brand offered to pay cast members of Jersey Shore to not wear its brand. This demonstrates commitment to the long-term health of their brand. Although the cast may not have taken the payment or stopped wearing the clothing, fans of the show (and characters) may take offense to the request and stop wearing the clothing. This would certainly meet the criteria for success from Abercrombie's point of view.

Long-Term Focus is Critical

While I've focused a lot on fashion brands in this article, I consider it to be an analogy for management of any brand. A brand is a tool to create long-term sales success and protect a company from extreme revenue variability. When branding decisions are made in haste and sales become the primary goal, brands can begin to suffer quickly, and often, that harm cannot be undone. I challenge all marketers to pay closer attention to their branding decisions both before and after making them. While sales may be building in the short term, in the case of immediate and substantial sales objectives, such a gain is likely to be superficial.

Co-branding has seen its popularity ebb and flow over the past several decades, but has only just become a strong trend in the past five or so years. Led by the ever-changing dynamic in Consumer Packaged Goods, marketers have begun to knit their brands together in increasing aggression, and has even reached a point where P&G has started to market test a package of Duracell batteries with Tide To Go included. Although CPG firms initiated the legitimacy of extensive co-branding, their strong testing and experimentation capabilities, and the curiosities that come with it, are leading even some large brands off course.

In my eyes, Scotiabank has always been the oddest of all of the Canadian banks. Their branches are often quite outdated in appearance, they align themselves closely with both the NHL (in Canada) and Canadian Football League (CFL), AND Cineplex Odeon (Canada's largest theatre brand), presenting no clear, consistent, or founded affiliations with any. While they do have small campaigns with these organizations, they fail to present a clear and consistent brand message across campaigns and channels. I quite simply don't know what Scotiabank stands for, or why they are good for me. In contrast, I can probably describe any of Canada's other large banks' promises and personas quite clearly and accurately.

You will surely understand my exasperation when I was driving along a local road and observed a billboard with Scotiabank cobranding itself with another, yes another, brand: Western Union. To me, one of the few components of Scotiabank's brand that is solid in my mind is that it is a large, professional financial institution, with a presumed certain level of quality in personal banking. This immediately jumped out in contrast with the prevalent Western Union branding, which is perceived as being antiquated, expensive, and used by less financially or technologically adept individuals. Unless Scotiabank is attempting to be perceived as the "value" bank, I find this initiative to be ineffective. I now question whether or not Scotiabank has an internal or external brand manager.

Brands, such as Scotiabank, must pay much closer attention to their co-branding efforts. While CPG firms such as Procter & Gamble are seemingly executing on every possible co-branding combination among their 24 Billion Dollar Brands, brand managers, marketing managers, and the like, must consider the testing capabilities that these high volume businesses bring to the table. They are able to insert and remove a co-branding initiative to and from a very select market within weeks and measure the effects at a small scale. This allows them to move quickly, minimize any negative effects on their brand, and try higher risk initiatives.

When considering a co-branding initiative, firms should pay close attention to the brand personality and associated attributes of their partner brand, just as any other marketing initiative must consider the associated attributes of the words, imagery, font, and other creative elements. Even though a short term advertising contribution from the co-brand may be on offer, the long term negative effects to the brand can be irreperable.

With many friends still in university, I overhear (and participate in) a lot of their discussion about searching for a job after graduation. Although the recession is officially over, they are still expressing their frustrations at the level of experience required by most organizations. Believing that they are in a catch-22, some of these friends have begun lowering their aspirations to jobs that they will not necessarily enjoy. This is bad for my friends (job satisfaction), and their future employers (higher employee churn).

These employers are justified in asking for plenty of experience, right? After all, the more experience, the better you are at your job! Similarly, the less experience the worse you must be at your job.

Wrong.

Take this, for example. Say an employee was hired at a job as an Assistant Manager and have been in that job for ten years. They must be very experienced and the best at the same job at another company. Again, wrong. Why was this employee not promoted to manager in, say, five years? They have maxed out their learning at the previous company that they were at, and were unable to progress as a manager.

Of course, there could be many different reason for not advancing after a long period of time, but when brought to the extremes, it is likely due to reaching a person's "Peter Principle".

Every position has a sweet spot of required experience. Require too little experience, and you get somebody who cannot cope from day one. Require too much experience, and you get somebody who cannot cope in day one thousand. Would you rather have continuous incremental improvement with a slight slowdown in business due to the learning curve, or somebody who will not advance your organization as a whole into the distant future? Long-term thinking is sometimes difficult, but this is a no-brainer.

As an employer, instead of asking for as much experience as possible, think of the sweet spot of required experience. How long would you want somebody to remain in that position without advancing? There is your upper limit. How long would somebody have to work to be able to barely coast in their job with little impetus for change? There is your lower limit. Instead of experience as your defining factor, look for values, passions, and soft characteristics that will define the future of that person, rather than their past.

Similarly, for employees, apply for all jobs, regardless of experience. If you are passionate about that job, and have fallen in love with that employer, you will get the position.

 

I’ve written a few times on Y&R’s Brand Asset Valuator (BAV), but all of these posts have been about auditing existing brands. As much as data is useful in making marketing decisions, intuition still has a big place in the field, and consequently, BAV is enormously useful in guiding the development of a new brand.

If you haven’t read my previous posts on BAV, here is a quick refresher:

• BAV measures the intangible value of your brand, comparable to any other brand out there
• BAV has 2 dimensions: Brand Stature and Brand Strength
• Brand Stature has two measurable components: Esteem and Knowledge
• Brand Strength also has to measurable components: Differentiation and Relevance

They come together to form something like this:

The quadrants are quite self-explanatory in that a brand starts as New / Undefined, with a goal of moving to Niche / Momentum as it establishes its uniqueness, and eventually becomes a Power Leader within its greater target market. Hopefully your brand never makes its way to Eroding / Declining, as it is difficult to recover a brand once it reaches such a level.

When defining your new brand’s desired positioning, most will want to target their positioning to eventual establishment as a power leader, but it is also important to move along the right path to get there in the first place. Thus, early in a brand’s development, it is much more important to focus on elements of differentiation and relevance than esteem and knowledge. That is, focus on making your brand stand out and becoming relevant to your target market (they identify with it), rather than ensuring that your brand is held highly and awareness levels are high.

Bringing this back to traditional marketing strategy, this isn’t a huge departure from what we already know:

• Authenticity beats arrogance
• Relevance beats detailed familiarity

Building communities, targeting brand-mavens, targeting lead users, engaging your customers, even marketing research; these are all simple marketing concepts that can take a brand further than one might assume if executed properly.

Have an authentic brand that means something to people, and you can have a Power Brand. Use Y&R’s Brand Asset Valuator to guide and measure your brand’s progress as it moves to this point and your brand’s development will be that much faster, cementing your success in your market.

Note: I’m not employed by Young & Rubicam (Y&R) or Brand Asset Consulting. I don’t profess to be an expert in Brand Asset Valuator (BAV), but I do find the tool enormously capable in driving the success of a brand. If you want to accelerator your brand even faster than you could on your own, go with some professional consulting from Brand Asset Consulting.

Super Bowl Ads. Infomercials. Mainstream Print Campaigns. All of these channels have one thing in common: They're no longer the be all and end all of building a strong brand.

Mass media campaigns have long dominated branding for their fit with agencies' traditional operating models and their relative ease of execution, only needing tactical support to execute. Year in, year out, a firm can execute a campaign in a similar fashion, changing only the creative, and slowly edge their brand attributes by single digit percentage points. A new face of branding has arrived that is both revolutionary and traditional.

Some consumer-focused Fortune 500 companies have been unknowingly participating in the next big shift in branding. Among those leveraging Micro-Branding with consumers to build their brand are BMW and Starbucks, quietly building incredible competency advantages over their competitors. While Mercedes ramps up television advertising, hoping to gain advantage over its competitor, BMW is quietly holding "The Ultimate Driving Experience" events around the world, allowing select consumers to experience the vehicle, thereby solidifying the perception in their minds, and the minds of their connections (friends, colleagues, etc.). Similarly, for years, Starbucks has been offering customers consistent, familiar, intimate experiences in line with its "Third Place" philosophy, training Baristas to know your name, carefully selecting the music in their stores, and even adjusting process to ensure that they always smell like coffee (rather than sandwiches).

While these are just two examples, the principal enabler that has brought Micro-Branding to the forefront has been social media. Creating an echo effect for small experiential elements that firms have carefully crafted, social media allows these to be spread much more quickly and broadly through word of mouth. Consumers no longer tell ten friends about an experience, they tell 100 friends. This makes each interaction ten times as important as it was before.

How Can Your Brand Leverage Micro-Branding?

Sucess in marketing is about strategy and laying the strongest possible foundation for tactical decisions. The first step in making Micro-Branding work for your organization is in having a clear picture of what your brand is about. Lay the foundation for your brand with a brand statement, promise, and personality. A brand personality is about translating your brand statement into a feeling that a consumer associates with your brand - if your consumers are to truly identify with your brand and really become your brand, you need to make it easy for them by making it a person: personify your brand.

Next, translate your brand profile into everything that your company produces and does. No thread is too small. No experience too insignificant. Your brand needs to be authentic. Take this a step further than your sales and service experiences and extend this to your targeted promotional campaigns. By maintaining brand consistency and reaching your customers where they want to be reached, you can reap the rewards of being a world class brand.

I'd also like to note that Micro-Branding, and positioning of any sort really, are not a replacement for achieving success with Y&R's Brand Asset Valuator. This tool can provide critical insight as to the performance of your brand in the long term at a high level, and provide irrelplaceable strategic insight.