A startup business faces many difficult challenges getting off the ground. For many early stage CEO’s assessing their priorities, product development and the seed money to grow are their primary concerns. Few if any are thinking much about the critical importance of brand building.

For startup CEOs, brand building needs to be as important to early business success as product development and raising money. You can have the most innovative, groundbreaking product ever conceived, but if you can’t create a strong foundation for communicating that value to investors and the marketplace, chances are the business venture won’t go far.

You don’t get a second chance to make a good first impression.

Everyone has heard that statement before. But for startup brands the statement holds even more significance. Whatever startup brands are doing, chances are they’re doing it for the first time. The first presentation to an investor, customer or important employee must be simple, clear and compelling — there are no second chances.

Developing a strong brand is critical to the early success of startups and emerging companies.

Over the course of this one-day workshop you’ll build a strategic foundation for marketing success in your early stage business through focus in four critical areas:

To whom you market
You can only create successful products or solutions when you know who the most fervent buyers will be. It’s critical to understand as much as you can about the core target customer segment to whom the brand is intended to appeal.

Why they buy
Grabbing the largest share of those customers’ wallets requires a complete understanding on what drives the target customer to products/brands in your space. Defining the context that will give the brand unquestioned relevance to the target customer against their illuminating needs, motivations, attitudes, and preferences is essential for brand building success.

What makes your brand highly valued and difficult to substitute
To drive purchase behavior, the brand needs to represent a compelling and highly emotional benefit to the target customer. This benefit must be relevant, differentiating and believable. How well you position your products/services will determine whether your brand will make it into the hearts and minds of those that matter most to your future and whether your brand will dominate their spending patterns.

How your brand competes
Your brand equity, or the health of your brand, is a culmination of every experience customers have with your brand. These associations, attitudes and perceptions determine whether the brand will build a following of loyal advocates who will be the first to try new products and extensions or not.

Who should attend?
The Brand Strategy Workshops for Startups and Emerging Companies are attended by early stage Founders, CEOs, and their teams and is typically held off-site, at a venue of your choosing. With no distractions, business teams will step away from the urgency of running their business and focus on the important strategic and creative decisions for creating bigger futures for their brand.

Drawing from decades of brand building expertise, we designed The Brand Strategy Workshop for Startups and Emerging Companies specifically to help early stage CEOs: a.) identify new opportunities in the marketplace b.) recalibrate their focus in raising venture capital c.) concentrate on creating bigger futures for their brand in a creative, collaborative and interactive setting.

The Brand Strategy Workshop for Startups and Emerging Companies is particularly useful for Founders and CEOs are engaged in the early planning stages of:

• seeking new rounds of venture funding

• naming their new enterprise

• introducing new products

• creating marketing and communication strategies

• planning to enter new markets or serve a new customer segment

• planning to shift brand messaging and communication strategies

At the conclusion of the workshop, The Blake Project will prepare a comprehensive executive summary documenting all strategic decisions and hypothesis that will serve as a pathway toward implementing marketing and communications programs to create a bigger future for your brand.

Workshop Executive Summary Report
The executive summary will serve as a basis for developing actionable creative briefs guiding the brand team’s marketing communications partners and future marketing initiatives.

The Report will include detailed descriptions of following workshop content:

• Brand Positioning Criteria

• The Brand Mission and Vision

• The Frame of Reference

• Target Customer Segment Description

• Target Customer Benefit Hierarchy

• Behavioral Drivers / What Target Customers Value Most

• Brand Positioning Framework

• Final Brand Positioning Statement, Brand Essence, Brand Promise

• Desired Target Customer Associations with the Brand

• The Brand Essence

• Strategic Imperatives and Next Steps

The Brand Strategy Workshop for Startups and Emerging Companies has been validated by Founders, Entrepreneurs and CEOs in dozens of business categories for its ability to align and energize the organization and its management team with a strong foundation for business success.

This work will greatly impact the success of your startup brand for years to come.

Please email me for more about how this workshop can benefit your brand.

Today on Branding Strategy Insider, another question from the BSI Emailbag. Gabriella, an instructor of marketing and branding in New York, New York writes: 

“I am an instructor of marketing and branding at the Art Institute of New York City. We are revising our curriculum for our fashion merchandising department courses. We are considering some of our students’ comments that they’ d like to take the branding course first before the marketing course. Some instructors like myself feel that learning marketing comes first, then they can study branding, PR, etc. Other instructors seem to think that that is the traditional approach and that today, branding has become its own entity, and functions separately from marketing. Perhaps they are confusing corporate branding with product branding that can go on at the same time? Would you kindly clarify so we can better tweak our curriculum if necessary.”

Gabriella, that is a very interesting question. Historically, brand management was taught as one element of marketing. I have told people that if marketing and brand management were two sets, they would largely overlap but each would include some things that were not in the other’s set. As one who sees things through a brand management lens, I like to look at marketing as just one piece (a very important one, albeit) of brand management versus the other way around. In brand management, one starts with customer and competitive research to not only understand customer wants and needs, but more importantly to understand customer values and customer emotional responses to various value propositions.

This is done in the context of competitive offerings. From that information, one positions the brand, creating its essence, promise (unique value proposition), archetype and personality. This then leads to the creation of the brand’s identity (name, logo, tagline, type fonts, colors and other identity elements) and its marketing messages and campaigns. It also leads to the brand’s “elevator speech,” which is embraced and internalized by its employees. And, it can lead to customer touch point design, including product design. The brand positioning may also dictate, or at least imply, a pricing strategy and a distribution strategy. So, mostly everything can be driven off of the brand concept and positioning. By the way, the most successful contemporary brands tend to stand for something important to their target customers, making them admirable to those customers, who then want to use or wear those brands as badges to express who they are and what they believe in (or who they would like to be perceived as being). So, allot of this involves consumer psychology and deep customer insight and the marketing research necessary to gain that insight.

So I tend to think about brand strategy as the high level marketing strategy that drives everything else in marketing, but again, I have lived and breathed branding for the past 27 years so this would be my bias. Certainly, marketing components and tactics still need to be taught, everything from product design, package design, pricing, distribution, advertising campaign development, media planning, sales promotion, direct marketing and social network marketing to public relations, trade marketing, customer relationship management (CRM), marketing research, retail merchandising, guerilla marketing, publicity stunts, loyalty programs, website design, search engine optimization (SEO), marketing plan development and more. These are the nuts & bolts of marketing as I see it, or to use another handyman analogy, the set of tools one needs to be considered a true marketer.

So teaching marketing and brand management are both very important. I view one (brand management) as more strategic and the other (marketing) as more tactical, but others might disagree with me. So, does one teach the “nuts & bolts” first or the big picture design first? I could make an argument either way, however my gut tells me that students will become more energized when they understand the branding concept first. However, they then need to learn the “nuts & bolts” of how to actually execute marketing in support of the brand’s promise. As someone once said, “the devil is in the details.” If they don’t understand marketing mechanics, they will never become exceptional brand strategists. 

Thanks for your question Gabriella. Do you have a question related to branding? Just Ask…

Sponsored By: The Brand Positioning Workshop

Show me the Money! This memorable line from the 1996 movie Jerry Maguire might just as well be coming from today’s CEO’s and CFO’s: a growing and vocal demand for accountability from the Marketing function.

Big Data Coming – For Better or Worse

Everywhere you go these days, you hear about “big data:” the coming golden age where all problems will be solved by crunching massive amounts of data from the web and every other imaginable source. You would think that the CMO’s ability to, indeed, show them the money, would never be better.

But according to a recent IBM study, “From Stretched to Strengthening,” there is still a yawning gulf between the accountability demands of the CFO and their CMO’s ability to answer them–even with big data. IBM interviewed over 1,700 CMO’s, across 19 industries and 64 countries. CMO’s said that the data explosion, far from being a solution, is one of the top four challenges they face. What was once seen as golden opportunity is becoming a huge problem as the data explosion overwhelms Marketing organizations.

Big Data = Better ROI Measurement

But here’s the paradox. In the same study, almost half of the CMO’s believe that they are insufficiently prepared to provide hard return on marketing investment numbers on their key Marketing programs. Let me say that again: CMO’s are being overwhelmed with data, yet can’t adequately measure the ROI for their Marketing programs. How can that be?

Three Forces Transforming Advertising

Let’s take traditional advertising. It’s being transformed by three major forces: fragmentation, digitization, and social media. These forces are driving increases in data that are making it increasingly challenging to understand what works, what doesn’t and how ROI differs across initiatives.

For example, it used to be enough to measure the effectiveness of an ad in copy testing and “know” whether you had effective advertising or not. But in today’s world, the same ad will perform differently when delivered in linear TV vs. On-Line video vs. tablets vs. mobile. And, social media will impact the effectiveness of the ad and vice versa. Not to mention the interactive effects of these platforms or the fact that within a medium, ad performance will differ across TV programs, genres, web sites, time of day, pod position and more.

A Simple Framework for Assessing Advertising Effectiveness

What’s a CMO to do? Simplifying this data explosion into several simple concepts can provide insight and opportunities for CMO’s to not just measure the ROI of their advertising, but to optimize it. Here are three simple concepts to help you assess advertising effectiveness.

Reach – The first job of any advertising campaign is to reach the right audience. How well is your brand doing at this? It’s amazing to me how few CMO’s have any real systems in place to understand how efficiently their advertising is hitting their target—particularly in digital.

It’s now possible to measure reach, frequency and GRP’s against a demographic target on-line just as you would in TV — on a daily basis. Early learnings show that advertisers could be saving 10-20% by simply optimizing reach against their target across sites – e.g. moving money out of weak sites and into strong ones.

Resonance – Having reached the right audience, the next job of advertising is to get noticed. Breaking thru is the most important job of advertising, because if it doesn’t, nothing else matters anyway. But beyond breakthrough, advertising must communicate your brand and change how consumers feel about it. How well is your brand doing this — right now ?

The real news in the resonance space is the measurement all of this in near real time. CMO’s can use these in-flight insights to improve performance in market — and not wait till the next cycle. Optimizing creative unit rotation, media weight, programming, placement and cross-platform exposure are all opportunities in the new world of optimization “on the fly.”

Reaction – Advertising exists to drive behavioral change. Usually this means increasing sales, but it can also mean getting consumers to search for your brand, go to your Facebook fan page, talk positively about your brand, etc. Measuring reaction is key to understanding if your advertising is going the final mile to cause behaviors that result in a positive ROI.

Panels which track (with consumers consent) both TV viewing and Web surfing behavior enable Marketers to measure advertising’s impact on search, etc. Market Mix Modeling and Single Source measurement (measuring what consumers watch & buy at the household level) measure sales lift and ROI by media platform, and help answer the ever present questions of how much to spend and how to allocate across which platforms.

These three concepts — reach, resonance, and reaction, provide CMO’s a simple framework for measuring advertising effectiveness and how they can optimize their advertising and media plans. 

Contributed to Branding Strategy Insider by: Randall Beard

Sponsored By: Brand Aid 

The brain remembers the emotional components of an experience better than any other aspect.

—John Medina

When Steve Jobs passed away on October 5, 2011, the world didn’t just lose one of its great visionaries, but it also lost an astonishing corporate storyteller. His presentations, “Steve-notes” as they were fondly called, had all the elements of a Broadway production, including a cast, drama, heroes, villains, and props. Most brand marketers use presentations to deliver information, often dryly. Steve Jobs gave presentations that informed, educated, and entertained.

The most memorable parts of Jobs’s presentations were what I call wow moments. These wow moments were carefully scripted and exhaustively rehearsed. It took an estimated 450 hours of work and rehearsals to create and deliver the twenty-minute presentation to introduce the Lion operating system in June 2011. Jobs was fanatical about each and every element of the presentation from the lighting to the messages. He knew the content of every slide, every font, and every color that was used on every slide. But nothing was more important in a presentation than the moment when the audience would gasp and say to themselves, I need that!

The Brain Does Not Pay Attention to Boring Things

No matter how sensational you think your product is, nobody is going to care if the message you’re using to communicate the product’s benefits is dry, confusing, and convoluted. Neuroscientist John Medina taught me that the brain does not pay attention to boring things. It is simply not programmed to grasp abstract concepts.

Instead he recommends creating an emotionally charged event, which is the equivalent of a mental Post-it Note for the brain. Medina says the brain’s amygdala is chockful of the neurotransmitter dopamine. So when the brain detects an  emotionally charged event  (e.g., joy, fear, surprise), the amygdala releases dopamine into the  system  that  greatly  aids  memory and  information  processing. Let’s recall three of Jobs’s emotionally charged events:

1984: The Ad and the Launch

When it came time to launch the Macintosh, the machine that revolutionized personal computers, Jobs wanted a television spot that would put a stamp on people’s minds. The ad agency Chiat/Day developed the famous Big-Brother-themed “1984″ ad, which ran only once during Super Bowl XVIII. More than 90 million people saw the ad, and it became the most admired television ad for the next two decades. Amazingly, the ad was nearly scrapped. When Jobs previewed the ad for the Apple board in December 1983, they hated it. Apple CEO John Sculley admitted he got cold feet. Jobs eventually won the argument, of course, but the story reminds us that Jobs intuitively understood the power of emotion in building a brand.

The 1984 television ad wasn’t the only wow moment Jobs had up his sleeve. In what is still considered one of the most dramatic reveals of any product in history, Jobs introduced the Macintosh with a magician’s flourish. On January 24, 1984, the Macintosh became the first computer to introduce itself.  After building the audience’s anticipation with a deftly crafted speech with IBM playing the narrative’s antagonist, Jobs whipped the audience into a frenzy of excitement. He then walked to the center of the stage where the Macintosh had been sitting in a cloth bag on a small table. Jobs pulled out the computer, attached the keyboard and mouse, and put in a floppy disk. The theme from Chariots of Fire began to play, and the words MACINTOSH INSANELY GREAT scrolled on the screen. The graphics were unlike anything anyone had ever seen on a computer. Jobs smiled, turned to the audience, and said,  “We’ve done a lot of talking about Macintosh, but today, for the first time, I’d like to let Macintosh speak for itself.” The audience gasped and cheered as they heard the computer say, Hello, I’m Macintosh. It sure is great to get out of that bag. Without the benefit of PowerPoint or Apple Keynote  (both of which had yet to be invented), Jobs gave one of the most awe-inspiring product launches in history.

2001: 1,000 Songs in Your Pocket

The iPod began Apple’s transformation from a computer company into a brand that   would make devices to change the way we live, work, and play. On October 23, 2001, Jobs unveiled the iPod- a music player that came with 5 GB of storage, not a revolutionary advance in technology. But Jobs had a wow moment in his pocket, literally. He said 5 GB of storage was enough to carry 1,000 songs. Oh, and there was one more thing…1,000 songs fit in your pocket.  The size of the iPod – along with its ease of use – made it different. “I just happen to have one right here in my pocket,” said Jobs as he pulled an iPod from the front pocket of his signature blue Jeans.

Apple Revolutionizes the Phone

On January 9, 2007, Steve Jobs introduced the iPhone and gave what I consider his greatest presentation. As he did twenty years earlier in the Macintosh presentation, he began by  building the anticipation. “Every once in a while a revolutionary product comes along that changes everything,” he said. He reminded his audience that Apple had introduced the Macintosh, which revolutionized the computer industry, and the iPod that revolutionized the music industry. “Today we’re launching three revolutionary products of this class,” Jobs added. “The first one is a widescreen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device.” Jobs slowly repeated each of the devices once, a second time, and a third. Finally he concluded, “Are you getting it? These are not three separate devices. This is one device, and we are calling it, iPhone!”

Steve Jobs knew how to turn a presentation into an awe inspiring and memorable event. He was the consummate salesman, and his techniques work just as well on the sales floor as they did on the presentation stage.

Excerpted from The Apple Experience: Secrets to Building Insanley Great Customer Loyalty – Carmine Gallo (c) 2012 by McGraw-Hill  

Sponsored By: The Brand Positioning Workshop

In the late 1980s and early 1990s, neuroscientists at the University of Parma discovered mirror neurons in our premotor cortex that fire when we perform an action and also when we observe others performing the same action. For example, the neurons that fire when we grasp a cup also fire when we see others grasp a cup. By mirroring the activities of others in this way, mirror neurons endow us with a built-in leaning toward empathy, social interaction and altruism.

We don’t always behave well in social settings, but because we are predisposed to social engagement, the rocketing rise of social networks makes sense. If, as some neuroscientists contend, the big ideas that stick are those that match brain structure and function, then social media are here to stay and will prove the naysayers wrong.

The discovery of our innate social faculty adds to our understanding of marketplace transactions. Embedded deep within dollar-and-cents exchanges are social exchanges of interpersonal connections – some good and some bad – that resonate to our very core.

What social networks have done is peel away the part of these exchanges that have always involved relationships. The relationships that matter most are family, and family means kinship. This is the currency of social networks. More and more these days, the currency of kinship must be spent first before any financial value can be realized, and this has big ramifications for growth opportunities in the marketplace ahead. Four warrant special mention.

First, happiness is the new metric of success. Relationships are a primary predictor of life satisfaction, so with the increasing importance of social networks and relationships, happiness will figure more prominently. Though brands like Zappo’s and Coke are touting happiness, it is not something most brands can do. But all brands can audit their consumer touchpoints to ensure that they are not upside down in their kinship accounts. This requires a different view of what relationships are all about.

Second, people relationships are coming to the fore. The heyday of brand relationships, quote/unquote, took off in the mid-1990s with the rise of one-to-one marketing. But in the heat of the moment, brand marketers lost sight of the fact that the idea of brand relationships is nothing but a metaphor about relationships to help marketers think about marketing investments. In reality, consumers don’t have relationships with brands; they have relationships with other people. Brands have utility; people have relationships.

The relationships people have with one another are where social networks add value. Social networks are forums where people can engage with other people. Many marketers shy away from social networks because people don’t talk specifically about their brands or categories. This misses the point. Social networks are a gathering place for relationships and brands should seek to facilitate or enhance those social exchanges. By making relationships among people more interesting and more valuable, brands can strengthen their position and value with consumers.

Third, marketers must persuade conversations not consumers. With social engagement more prevalent and more powerful, every marketing message is now subject to vetting by a crowd. No message finds its way to consumers absent the influence and input of others. It is the conversation that determines the impact of an ad not the way in which an individual encounters an ad in isolation. Traditional marketing and media models that embody an individualized encounter with advertising no longer reflect reality.

The old approach was to maximize share of voice; now it’s share of conversation. It used to be about talking loudly; now it’s about getting other people to do your talking for you.

Finally, the circles of intimacy are narrowing. The biggest trend in social networks is the shrinking of social connections. People only want relationships that matter. That means close relationships. They want kith and kin. As we have described it in Status Update, our Future Perspective white paper on social networks, the first of six pivot points shaping the future of social networks is a choice between Big Net and Tight Knit, and on this dimension small is the big trend.

Brand marketers will find themselves even more on the outside looking in as social networks narrow. But the opportunity is bigger than ever for brands that ensure the currency of kinship is never in short supply.

Contributed to Branding Strategy Insider by: J. Walker Smith, Executive Chairman, The Futures Company

Sponsored by: The Brand Positioning Workshop

Even producers in the commodity world of meats and produce have found ways to reposition themselves and thus create a unique selling proposition. Their successful strategies can be summed up in five ways.

1. Identify. Ordinary bananas became better bananas when a small Chiquita label was added to the fruit. Dole did the same for pineapple with the Dole label, as did the lettuce people by putting each head into a clear Foxy lettuce package. Of course, you then have to communicate why people should look for these labels.

2. Personify. The Green Giant character became the difference in a family of vegetables in many forms. Frank Perdue became the tough man behind the tender chicken.

3. Create a new generic.The cantaloupe people wanted to differentiate a special, big cantaloupe. But rather than call them just plain “big,” they introduced a new category called Crenshaw melons. Tyson wanted to sell miniature chickens, which doesn’t sound very appetizing. So it introduced Cornish game hens.

4. Change the name. Sometimes your original name doesn’t sound like it would be something you would want to put in your mouth. Like a Chinese gooseberry. When the name was changed to kiwi fruit, the world suddenly had a new favorite fruit that it wanted to put in its mouth.

5. Reposition the category. Pork was just pig for many years. All that did was conjure up mental pictures of animals wallowing in the mud. Then the industry jumped on the chicken bandwagon and became “the other white meat.” That was a very good move when red meat became a perceptual problem. 

Excerpted from my book REPOSITIONING: Marketing In An Era of Competition, Change, And Crisis – Jack Trout with Steve Rivkin (c) 2010 by McGraw-Hill  

Sponsored By: The Brand Positioning Workshop

A startup business faces many difficult challenges getting off the ground. For many early stage CEO’s assessing their priorities, product development and the seed money to grow are their primary concerns. Few if any are thinking much about brand building–mainly because they believe it to be sophisticated marketing they simply can’t afford.

For startup CEOs, brand building needs to be as important to early success as product development and raising money. You can have the most innovative, groundbreaking product ever conceived, but if you can’t create a strong foundation for communicating that value to the marketplace, chances are the business won’t go far. Developing a strong brand is critical to the early success of startups. 

The Ugly Baby Syndrome
Many startups have a difficult and awkward task of communicating the value of their product/service innovations in ways that matter to investors and potential customers. At the beginning (especially when seeking investment capital) founders have a tendency to believe that everyone will “get the big idea” of their next big thing. As a result, they usually message their value badly at the beginning.

Like any newborn, learning to walk the talk requires falling down and getting up again and again. But the break neck pace of the VC deal making machine is not very forgiving to the stumbles of startup founders not able to tell a compelling story of why their innovation matters to anyone beyond their Mother.

The heart and soul of brand building embodies a relevant and differentiated value proposition. Founders must be able to articulate why their baby matters to some people! Remember, at the beginning nobody cares!

What makes your startup good and different?
The marketplace is a slush pile. Every year new businesses, products and services are born into a vast sea of ubiquitous sameness. For startups to have a chance of making it past the infant stage, their value must be well defined.

No one will deny the fact that startup CEOs work long days, weeks and years in their business. Few CEOs will work “on” their business. Brand strategy is the process of working on the business. Having the clarity and the confidence to define value in compelling ways is the first step in building a sustainable brand.

Founders need to take a long, hard introspective look at how they will discover and articulate why their innovation is good and different. In a world of increased commoditization, relevant differentiation is the source code to brand building success.

Good and different means the value the business brings to the world must be highly valued by a well defined target customer and not in abundant supply elsewhere. When you can define what that is for your business, you will enjoy competitive advantage in the industry category in which you are operating and command premium pricing as well.

It doesn’t get any better than that.

Brand strategy is not marketing.
One of the big misconceptions startup CEOs have about brand building is that it is a marketing activity. In fact, these are two separate (yet related) activities. Brand strategy is about knowing the DNA of the value offered to the marketplace, marketing is the process of delivering the message through various communication channels.

It makes no sense whatsoever creating grandiose marketing schemes without those plans being anchored and informed by a higher guiding strategy about what the brand will represent in the mind of a target customer. This should be good news to startup CEOs since marketing is an expensive proposition most startups can ill afford.

Brand strategy requires real market insight and creative thinking, while marketing requires cash. Marketing should always follow brand strategy.

Branding begins with a good name.
Over time the startup business will grow up. It will acquire loyal customers, it will have created trusted relationships and enjoy a reputation that will translate into greater financial value.  All of this will happen more effectively and efficiently if you start with a good name to build your good reputation on.

Nothing is more valuable to a startup business than a good name. Start by creating one that will serve the growth and expansion of your value over the long haul.

The three components of a strong and enduring startup brand.
There are many definitions about what a brand is. Regardless of how the idea of a brand is defined, a startup brand requires three well-designed components:

Brand Identity:
The essence of what your brand represents to customers. It is “who” the brand is. This is represented by symbols, language, and the culture or heritage of the organization.

Brand Promise:
The benefit your brand brings to customers. This is “what” the brand provides that is highly valued and not in abundant supply. These associations are based in the functional, rational and emotional benefits customers receive from the brand.

Brand Experience:
The tangible experience customers have in their interaction and transaction with the brand. This is “how” the brand delivers on its promise. These associations are based in real life engagement with products, people and places.

One might consider this to be the three legs of the stool in building an enduring brand right from the beginning. All three of these components must be designed. They do not come into form on their own. The process of design is the critical discipline in making all three components come together in harmonious alignment within the mind of the target customer. The awesome thing about design, if applied correctly and consistently, it will enable your startup brand to emulate its values to the marketplace with more credibility and effectiveness.

You don’t get a second chance to make a good first impression.
Everyone has heard that statement before. But for startup brands the statement holds even more significance. Whatever startup brands are doing, chances are they’re doing it for the first time. The first presentation to an investor, customer or important employee must be simple, clear and compelling–there are no second chances.

Sponsored By: The Two-Day Brand Positioning Workshop 

Consumers are definitely giving retailers permission to grow their private label brands. The real question is will retailers grow private label brand value or simply grow more private labels? In the age of mega-private label brands, this trend is giving national consumer product goods brand managers some added anxiety these days. It also presents some relationship challenges for retailers to grow the value trusted CPG brands bring to their customers.

According to a report published by consulting firm Deloitte, consumer’s perceptions and attitudes toward private label brands are changing significantly; and offers insight into the notion that spending less for private label brands doesn’t mean consumers are settling for less from private label brands. According to the report only one-third of the respondents endorsed the statement “ I often feel that I am sacrificing when I purchase a store brand instead of a national brand”. This is no surprise when one stops to think that many consumers today believe that store brands and national brands are essentially made of the same ingredients. According to the report, 80 percent believe the statement “most store brands are manufactured by the national brands”.

The report further suggests that the current economic climate has made consumers more discerning about the brands they prefer. 75 percent of respondents agreed “ these economic times have made me more aware of which brands I care about and which ones are less important to me”.

Who’s winning? 
Seemingly one could easily conclude that private label brands are beginning to win the battle of the brands through market share gains over the national brands. What’s accelerating this trend is private store brands are beginning to employ more strategic product innovation and the brand management discipline commonly employed by big national CPG brands. Consumers now believe there is little difference in quality or value between the two alternatives. Worse, many consumers believe they’re paying for the “advertising” of the higher priced national brands. Here are some more interesting highlights from the report:

Between 2006 and 2009, private brand market share rose across 74 percent of products in the personal care, household goods and food and beverage categories in the United States.

Private labels represent 20 percent of grocery store and 18 percent of supercenter sales.

Store brand products were 31 percent cheaper across product categories than their national brand counterparts.

Store brands are not just a recession related phenomenon – U.S. store brand sales continue to grow over the long run despite improving economic conditions. The latest data supports this. According to this month’s food and beverage market research report by The NPD Group, private label’s share of household servings was 18 percent in 2000 and reached 27 percent in 2011.

Retailers are now taking product and brand building innovation to heart. What’s driving innovation within private label brand-driven retailers is fairly simple–they can be far more nimble than national CPG brands. Developing a private label brand can be far more efficient and at a much faster pace.  Private brands don’t have to make the long-term capital investments in product development, manufacturing and rigorous BASES testing and other quantitative research methods to gain the assurance that their value proposition is relevant and the long-term investment warranted. Private label brands have the real-time retail environment to test brand concepts with far less risk, and they receive immediate feedback because their customer’s are voting with their dollars right in the store!

Walmart’s Great Value brand is a case in point on being nimble and innovative in near real-time. Covering well over 100 product categories, and launched in 2009, the Great Value brand continues to adapt and transform itself much faster than CPG brands of similar scale. The Great Value private label brand was so expansive and compelling at shelf, customers began to believe they were being driven to favor the value brand over national brand alternatives. At the risk of alienating customers and CPG suppliers, Walmart correctly and quickly balanced their “brand block” private label brand presentation in a fashion that did not obscure the shelf presence of national brands–thus the power of a mega-private label brand.

Private label brands will lead the way.
 It’s probably safe to conclude the next generation of super successful brands will not come from the name brands, but from more private label brand-focused retailers. Consumers seeking to save some money in tough times may be fueling the current growth in private label brands, however the cat is out of the bag, and progressive retailers will continue to innovate and leverage to the fullest advantage their immediate access to their customers.

Sponsored By: The Two-Day Brand Positioning Workshop

What you need to build into a brand is a positive. The purpose of hanging a negative on your competitor is to set up that positive idea. Some years ago, Stolichnaya vodka hung “American made” on its U.S. competitors who were “making believe they were Russian.” It was setting up “the Russian vodka” as its positive idea.

Many years ago, BMW introduced its automobile into the U.S. market by repositioning Mercedes as “the ultimate sitting machine.” This was a set up for its long-term position of being “the ultimate driving machine.” Repositioning Mercedes as a living room on wheels did indeed resonate with people, as at the time Mercedes was indeed manufacturing big limo-type cars. The first BMW was the 3 Series, which was a long way from today’s 7 Series, which is also a “sitting machine.” It’s also the main reason that I’m not a fan of these big gadget-loaded BMWs. They are not driving machines; they are high-tech sitting machines. It’s why you don’t see many of them driving around.

A Missed Positive

Some years ago, I was down in Venezuela working with a big ketchup brand called Pampero. By the time we were called in, Del Monte and Heinz had nudged it from its number one position. Pampero was in a decline. What was needed was a differentiating idea beyond its current claims of “redder” or “better.”

Why was Pampero better?  What did the company do to its tomatoes? After some prodding, what emerged was the fact that Pampero removed the skin so as to enhance the flavor and color. It was something that its big competitors did not do in their manufacturing process.

Now that’s an interesting idea, as many people are aware that most recipes using whole tomatoes call for removing the skin. Pampero could exploit this “without the skins” perception of quality and taste.

When we told the company that this was the best and only way to rebuild the brand’s perception, Pampero became very upset. It seems that the company was in the midst of changing to a money-saving automated process that didn’t remove the skins (like that used by Del Monte and Heinz). Pampero didn’t want to hear about doing things the old-fashioned way.

Our recommendation was that Pampero stop the modernization plans, as “skins off” was the differentiating idea. Doing things the same way as your bigger competitors is how to get killed in the wars out there. What was called for was a major repositioning effort to hang “skins” on the competition. The positive was skinless tomatoes—a repositioning idea that never saw the light of day.

Excerpted from my book REPOSITIONING: Marketing In An Era of Competition, Change, And Crisis – Jack Trout with Steve Rivkin (c) 2010 by McGraw-Hill  

Sponsored By: The Brand Positioning Workshop

I am hearing a lot these days about brand relationships being like human relationships. Maybe it is just me, but I don’t feel that my relationship with brands is the same as the one I have with my fellow humans. I might feel genuine affection for one or two brands, but most are simply familiar solutions to a specific need. Here are some of my thoughts on the topic but I would love to hear yours.

Initially, I thought my concern about anthropomorphizing brands was to do with the intermittent nature of our relationship with many brands. In reality, there are few brands that we think about or interact with on a regular basis, the mobile phone being the most frequent for many of us. Most of the time brands are out of sight and out of (conscious) mind. But then a human relationship can range from fleeting to enduring. And once a relationship is established, we often seem to be able to pick it up again where it left off, even if years have intervened. 

Then I read this in the Wikipedia entry on Interpersonal Relationships:

Interpersonal relationships usually involve some level of interdependence. People in a relationship tend to influence each other, share their thoughts and feelings, and engage in activities together.

Now this seems to address my concerns more closely. To what degree are we interdependent on the brands we use? Are there any brands that you use for which there really is no acceptable substitute? And just how dependent is that brand on you? Would Apple really miss you if you decided another mobile phone better met your needs or desires than the iPhone?

If brand relationships are like human relationships then they are pretty one-sided. A brand owner might love to have an intimate, one-to-one relationship with every one of their brand users, but that is just not practical right now. Kraft’s Likeapella tribute to the 4,632 fans who liked a post on the brand’s fan page on April 24th is a nice idea, but hardly sustainable on a daily basis. And many people would not want that degree of intimacy. Ultimately, we enlist all brands to solve problems for us, but I suspect we are willing to engage with and share thoughts with very few.

I think the essential thing that is worrying me about the anthropomorphizing of brand relationships, is that a brand is not going to do something nice for you just because it likes you. There is no real emotional interdependence. The brand owner wants you to pay to use their brand. And, as of today, they don’t really know who you are as an individual (even if that day is getting closer). So if we must think of brands in human terms, maybe we should think of them in terms of professions: plumber or paramedic, professor or painter, or any one of the myriad services that we conduct for each other. 

I know that at least one of my colleagues would suggest that “humanizing” brands gives marketers a useful model for crafting a more meaningful brand, and for communicating what they are trying to do within their own company. That may be true. But I do think that we are deluding ourselves if we think the relationships between people and brands, really is the same as that between people. If it is a relationship, then in most cases it is a very weak and one-sided one.

But what do you think? Do we have relationships with brands? And are they the same as the ones we have with our fellow humans? Please share your thoughts.

Contributed to Branding Strategy Insider by: Nigel Hollis, Chief Global Analyst Millward Brown

Sponsored by: The Brand Positioning Workshop