Marketing Mix: Product / Service Guide #5

Don’t separate your product names from your brand name.

The most powerful asset that marketing people are given by their company to perform their marketing job is the brand name.  In exchange for the use of this asset, marketing people have the responsibility to nurture their brand name.  Don’t revert to short hand when communicating about your products.  Each time the product name is used in copy, ensure that it is preceded by the brand name.  While this practice would seem to be redundant in body copy, your target customer learns through repetition.  Each repetition of your brand name builds the brand in the memories of your target customers.  Each repetition of the two words, links the product name to the brand name.  Whatever equity attributes are associated with your brand name are linked to your product.

In essence, this guide leads you to treating every product as a brand extension.  But isn’t that exactly what you want?  You want every product to be an extension of your brand.  I know that some popular marketing authors decry the over-use of brand extensions arguing that they dilute a brand, and they argue that the marketer should be creating new brands rather than relying upon brand extensions.  On one side of the coin, they have a legitimate point; generally speaking, the narrowly positioned brands tend to be stronger than those that have a more general positioning.  However, I would argue the opposite side of the coin:  building new brands is expensive and most marketers don’t have the resources to build and sustain a large number of brands.  If you de-link your product name from your brand name, you’re treating that product as a stand alone brand; and you better be prepared to have the resources to support that new brand.

Learn from Other Marketers’ Mistakes:  I’ve mentioned in this blog that Acura moved from product names that have meaning to alphanumeric product names because they had created so much equity for the Legend product name that the Acura brand name suffered.  Acura was taking advantage of the marketing guide that consumers tend not to remember alphanumeric names.  By using product names such as RL, TL, etc., Acura encouraged consumers to, more often than not, place the brand name in front of the product name when discussing their vehicles, Acura RL, Acura TL, etc. to ensure that they were understood.

Learn from My Mistakes:  I often tell people that in my 40-year marketing career, I have made every mistake that one can make in marketing.  In the early 1980’s, I was working for the tire division of The BFGoodrich Company.  At that time, the company was investing in its divisions that were in growth product categories and starving the mature tire division of resources.  While this approach to investment was entirely consistent with increasing shareholder value, the management of the tire division felt like abandoned children waiting for the company to harvest the division (which eventually occurred).  With no competitive advantage other than marketing, the tire division had survived competing in the category because of its line of high margin performance tires called T/A Radials.  Tire division management made the decision to use the product name T/A Radials de-linked from the brand name BFGoodrich.  For a long period of time, the marketing efforts of the firm centered on T/A Radials and minimized the brand name BFGoodrich. The result was that among the brand’s target customers, T/A Radials became more remembered than the brand, BFGoodrich.  Since other product lines were being marketed under the BFGoodrich brand, those product lines suffered with the decline in equity for BFGoodrich brand.

Marketing Mix: Product / Service Guide #4

For a marketer with a multi-brand portfolio, keep your brands separate from one another.

Follow the Proctor & Gamble approach; keep your brand separate from one another. In just the laundry category alone, P&G markets six brands of laundry detergent in the U.S.: Bold, Cheer, Dreft, Era, Gain, and – the category leader -- Tide.  Each of these brands has its own unique positioning and is not tied to the parent company.  This allows P&G to create different values for different segments of the market.

A classic example of ignoring this guide is the old General Motors.  Among the many problems that the old GM created for itself, its “badge engineering” diminished the difference between their brands.  Why should someone buy a Buick when they can get the same car with minor trim differences at a lower price from their Chevrolet dealer?  Badge engineering at GM reached levels of absurdity in the early 1980’s when all five divisions of GM attempted to market their J body car.  The same basic car was marketed as the:

            Chevrolet Cavalier

            Pontiac Sunbird

            Oldsmobile Firenza

            Buick Skylark

            Cadillac Cimarron

In addition to products that were mostly the same from brand to brand, the old GM loved corporate advertising in which the lumped together their brands with tag – Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac.  Is it any surprise that the old GM brands ended up with not much to distinguish one brand from another?  One brand cannibalized another because they were appealing to the same kind of customer.  This led to the demise of the Pontiac and Oldsmobile brands.  Hopefully, the new GM will do a better job of keeping their remaining brands separate from one another.

In product categories where consumers can’t tell the difference in brands by looking at the physical product, it’s vitally important to keep the brands separate.  If customers can’t tell the quality difference in brands by looking at the physical product (which is the case in many, if not most, product categories), they will default to the low-priced brand thinking that all of the brands are the same.  Most package goods categories (fast moving consumer goods, for the Brits) are examples of product categories where consumers can’t tell the quality difference in brands by looking at the physical product.  I’ve made my living in brand marketing; I believe that brands deliver value to their target customers; and I usually buy brands (especially clients’ brands).  However, in some product categories I can’t tell the difference between branded products and private label products, and the price difference is so great that I default to the private label product.  Club soda is an example.  The branded products, Canada Dry and Schweppes, retail for over $1 for a one liter bottle; the store’s private brand usually retail for one, two, or three bottles for something over the same $1.  Do the branded club sodas have value for me?  Yes.  Is there sufficient value for me to justify paying a price 100% or 200% or 300% higher than the store brand?  No.

Most marketers offer their various brands at different price points even if the costs associated with making and marketing each brand are roughly the same. Some customers in some market segments are willing to pay more to obtain the value of the brand.  Those brands for which consumers are paying more generally create a higher profit margin for the marketer.  If customers became aware that a lower priced brand was made by the same company that made their preferred, higher-priced brand, they would look at the lower-priced brand, look at higher-priced brand, and probably buy the lower-priced alternative because the physical products look about the same to them.  The marketer would end up trading high margin business for low margin business.

Marketing Mix: Product / Service Guide #3

Technology and innovation are neither product nor brand benefits.

Note:  This guide could have been contained in the list of guides on brand positioning or in the upcoming group of guides on marketing communications or in the product / service portion of this blog.  For no particular reason, I’ve elected to include it in the product / service section.

In my work with the Kotler Marketing Group, I’ve consulted to a few companies in “high tech” product categories.  Whenever I mention this marketing guide, there is an audible gasp in the room.  This is a marketing guide that many companies, especially those companies in high technology product categories, violate regularly.  Such companies are proud to see themselves as innovators.  They may even have incorporated their pursuit of innovation in a corporate mission statement, and the quest for technological innovation may be deeply rooted in their corporate culture. 

That may be who these companies are, but don’t believe that’s why people buy their brands.  People buy their brands to get the brands’ unique brand benefit that fulfills their want/need.  Remember from this blog’s discussion of brand positioning that the unique brand benefit in consumer goods categories satisfies some internal want/need within the consumer, and in business-to-business categories the unique brand benefit satisfies the economic needs of the business.

It is true that some product categories have small market niches composed of customers who want the latest technology; for example, there are audiophiles, computer geeks, and automotive enthusiasts.  The benefit that these consumers are seeking is probably some type of ego gratification from having the latest technology available. 

Early in my marketing career in the tire category, my co-workers spoke about the “enthusiast” in the performance tire category.  They would say that the enthusiast was more receptive to marketing communications messaging for performance tires because they were interested in tires.  Later in my career, I was sitting in a meeting at Grey Advertising in New York, and the Creative Director on the account said, “There’s no such thing as a tire enthusiast; or if there is, they work for tire companies.  The enthusiasts that are so often referenced in your thinking are not tire enthusiasts, they are automotive enthusiasts.”  The lesson here is that if there is an enthusiast segment within your product category, be sure that the members of that segment are enthusiasts of your product category and not some allied product category.

So what is the role of technology in your marketing efforts?  Some technologies and technical features may serve as benefit supports.  Returning to the tire category as an example, in the business-to-business truck tire category, Michelin has the technology to produce a single tire that will carry the load formerly carried by dual tires.  The weight of this tire and its wheel is less than the weight of two tires and two wheels.  This means that in some trucking applications such as bulk hauling, the operator will be able to carry more cargo.  By carrying more cargo, the operator will increase revenue which speaks directly to the economic motivation of business- to-business customers.

Marketing Mix: Product / Service Guide #2

Marketing Mix: Product / Service Guide #2 -- Customers tend not to remember alpha numeric names.

It’s true that people tend not to remember alpha numeric names.  However, if this guide is true, why do so many companies use abbreviations as their company brand names?  One reason is that end-users, especially Americans, prefer to short-hand their speech.  Generally, people will short-hand names to reduce the number of syllables.  The nine syllable International Business Machines became the three syllable IBM. 

The five syllable Federal Express became the two syllable FedEx.  If the short-handed name has the same meaning to target consumers as the full name, then there’s no danger in a company adopting the short-hand name.  However, if the short-hand name has no meaning to current and/or future target customers and the long-hand name did have meaning, then there’s a risk.

Another example of people short-handing brand names is a brand that I worked on for many years, BFGoodrich Tires.  Those familiar with the brand often refer to it as BFG.  (Three syllables instead of four).  However, the majority of the brand’s target customers don’t have this degree of familiarity with the brand and don’t use the BFG short-hand.  Survey research showed that among target customers there was substantially less association of BFG with being a tire brand than there was with BFGoodrich.

Another reason that short-hand company names have become more popular is to obfuscate the company’s origins.  The worldwide financial services giant, HSBC, wants its target customers to think of it as “The world’s local bank,” not as a bank with locations in Hong Kong and Shanghai (Hong Kong and Shanghai Banking Corporation). 

DHL wants its target consumer to think of it as “proven reliability” not as a business founded by Adrian Dalsey, Larry Hillblom and Robert Lynn.

It’s interesting that most of the major American advertising agencies violate this guide. For example, the three major agencies making up the Omnicom Group agency holding company are BBDO, DDB, and TBWA. Each of these three agencies are rich in history and have names that are the initials of their founders. DDB was formerly Doyle Dane Bernbach which was named after the three founders of the agency, Ned Doyle, Mac Dane, and Bill Bernbach. Bill Bernback was the creative lead of the agency and the person responsible for transforming advertising from Rosser Reeves-style repetitive hard-sell approach to a soft-sell approach using wit and humor. Examples of this work are the Volkswagen "Think Small" campaign and Avis "We work harder because we're number 2." All of this great history is a brand asset for DDB. However, it's lost in the reduction of Bill Bernbach's name to the letter B in DDB. In my opinion, advertising agencies' use of meaningless letter names reflects that most advertising agencies are specialists in marketing communications rather than marketing generalists. No offense to my many good friends in the agency business, but there is more to marketing than just marketing communications.

If you find yourself in the position of your product names being more memorable than your brand name, then you can use this guide to your advantage.  Acura, the upscale Honda brand in the U.S., found that its products, the Legend and the Integra were remembered by more of its target customers than the Acura name itself.  To get its target consumers to focus more on the Acura brand and less on the model names, Acura switched to an alphabetic model designation – the RL, TL, TSX, etc.