View from the brand summit is similar to the swamp
Published on 06/15/2004 under Branding
I was privileged to attend a recent b-to-b brand summit sponsored by Pennsylvania State University’s Smeal College of Business’ Institute for the Study of Business Markets. Forty of our industry’s most knowledgeable brand managers met for a few precious hours in Chicago to hash out branding priorities and strategies for achieving success on today’s business-to-business marketing battlefield.
Interestingly, the problems at 40,000 feet are similar to those the rest of us see every day down in the trenches. For example, even though most of the attendees were with companies with strong brand images, in some cases those images actually inhibit progress. Many of these brands are strongly identified only with one portion of a company’s overall business, and not others. For example: Goodyear and tires, Xerox and copiers, PPG and glass, Swagelok and tube fittings.
Managers at these companies acknowledged the marketing leverage they enjoy for the products and services most closely associated with the dominant brands but are frustrated with how to assimilate acquired product lines or launch new products in disparate markets.
Mergers and acquisitions present an ongoing problem for b-to-b brand builders. This is especially relevant in organizations using master brand or overbrand architectures--except, of course, for General Electric, which can put its brand on just about anything with amazing results.
Other brand summit attendees were concerned with correcting misconceptions regarding previous joint venture partners or parent companies. For example, Eastman Chemical Co. was spun off from Eastman Kodak Co. in 1994, but many people still think the two companies are connected. Confusion reigns supreme when it comes to Dow Corning Corp. and its relationship with two joint venture parents, Corning Inc. and Dow Chemical Co. When you throw in the Pink Panther and his friends at Owens Corning, it gets totally wacky.
Almost half of the brand summit participants acknowledged difficulties in communicating internally when it comes to branding programs. Failing to gain the understanding and support of fellow employees can deal a crushing blow to even the most brilliant branding campaign. Several attendees confessed they had done a much better job communicating to external audiences than they had to internal audiences.
Of course, everyone was concerned about how to show a return on the investment in brand-building programs. This is rapidly becoming a management prerequisite. If you want to spend more money, you have to demonstrate what happened with the last pile you were given.
Don Schultz, my fellow Marketing News columnist, kicked off the brand summit with a discussion of “brand measurement pathways” now used by leading marketers, and described some of the advantages and limitations of each. Every b-to-b marketer worth his salt has sworn allegiance to the DAGMAR or Lavidge & Steiner models (awareness leads to preference and purchase). Schultz says the problem with this is that the purchase connection has never been proven.
He also poked holes in some of the more exotic “marketing mix” and “brand value contribution” models because you have to use historical data to predict future behaviors, which might be thrown off by technological advances or other marketplace factors.
The important thing in measuring brand equity is to pick a standard that has meaning for your company’s top management, and stick with it. If you’re not sure which measurements are meaningful, it doesn’t hurt to ask. After all, the CEO and CFO are the two most important brand champions any company can have, so securing their interest and involvement is essential.
One of the more interesting case studies presented at the summit was for an equipment manufacturer that had successfully pursued a leadership brand image for several years and then took its eye off the ball. In early 2003, faced with declining sales in a down market, the company started implementing short-term product and sales promotions to stimulate sales.
Seems reasonable enough, but they forgot to wrap those messages in an overall context of doing what’s right for the industry, as the industry leader should. Their integrated, carefully coordinated communications program became disintegrated. When they recently conducted another research tracking study, they were dismayed to find that all of their leadership image scores had dropped significantly from the previous study. They have resolved to get back to the brand-building approach despite short-term market conditions. Lesson learned.
I also enjoyed hearing how eBay has crafted a brand image for business users. Did you know that small-business managers bought more than $2 billion worth of equipment and supplies on eBay last year? And we’re not just talking about computers and copiers either. Think heavy construction equipment, medical lab equipment, machine tools and metalworking equipment.
The eBay managers knew business buyers would have a hard time taking the site seriously if they had to wade through Pokémon cards and Barbie dolls to find their front-end loaders, so they created a separate entry portal with special navigation and graphics. Then they launched a targeted advertising program using vertical and horizontal trade media to let people know what they could expect to find at eBaybusiness.com. The result is that sales doubled in one year. And they are carefully rolling the program out to include new industries, one segment at a time.
What this experience rubbing shoulders with the brand summiteers taught me is that brand-building is a journey, not a destination. You never truly arrive because there are challenges with strong brands just as there are with weak ones. There are esoteric branding considerations, but mostly it’s a job for grinders who think through and solve the little problems one by one.
But it also taught me never to give up the chase, because the rewards of brand-building are great. EBay had a strong brand with one audience. When they modified it to reach another audience, they generated an extra $1 billion in sales.
As Don Schultz said, brands are a company’s most valuable assets, even more than tangible balance sheet assets. And we’re entrusted with managing those assets for greatest return. It’s a terrific job.