Branded store brands at Target, Wal-Mart, Safeway, Kroger, and Costco - a brilliant move

The Wall Street Journal reports (8/29/07) that "food retailers are growing more sophisticated about developing and branding their own products." In a far cry from previous years, when store brands were relatively generic offerings, U.S. retailers like Target, Wal-Mart, Safeway, Kroger, and Costco are offering new brands that compete with manufacturers like Sara Lee and Kraft.
 
It's a brilliant strategy. As the Journal notes, "sales of private-label products carry higher profit margins than the goods they buy from the traditional food companies." And the food retailer-created brands are doing well: "private-label sales of food and nonalcoholic beverages in the U.S. rose 4.3% to $44 billion in the year ended July 14" (not including Wal-Mart) vs. a 2.2% rise for branded food and nonalcoholic beverages during the same time period.
 
It is ingenious how grocery stores are elevating their commodity offerings to the status of a brand. And it is interesting how the best-branded food retailers are creating successful new brands that have no resemblance to the original - like Target's Archer Farms line. This is an example of intelligent brand architecture - a parent brand spinning off a child brand that makes no mention of the original. (There is no connection other than being housed by it in the parent's retail environment.) This is not always the right call to make, but in a case where the parent brand's equity would not enhance the child brand's equity, it can work well to build a new brand starting from scratch. For Target, "chic at reasonable prices" equity does not translate directly into house-branded items, but it does work well at bringing in other brands into the Target umbrella.
 
This is an example of good branding at work--creating added value out of items that would normally be sold at generic prices.
 

Katrina and the White House, federal government, and FEMA brands

Two years after Katrina, the FEMA brand is still tainted (as is the brand of the White House and the entire federal government) by the relief efforts that took place after the hurricane. The question is, why? If you look at the White House factsheet (http://www.whitehouse.gov/news/releases/2007/08/20070829-1.html) on Hurricane Katrina relief efforts, you see that the government has spent many billions of dollars to assist hurricane victims and strengthen infrastructure against floods, and President Bush and his wife personally visited the area, reinforcing their commitment to help in the recovery.

Yet as recently as yesterday (8/29), on the Oprah Winfrey show, CNN's Anderson Cooper talked about the inadequacy of government efforts to help people in the area, and a story was told of a family suffering continual illness as a result of living in a FEMA trailer.

Clearly there is a disconnect between the efforts being made by the federal government and the experiences and perceptions of the affected citizens of the area. I am not an expert on the situation in New Orleans, but Cooper gave a clue as to what one of the key problems might be: communication by the government to affected individuals. People don't understand where to go for help, said Cooper; the government has left people to figure it out on their own. I didn't watch the whole show (probably like many people, I got just a few bits and pieces), but my impression is that a better communication plan by the government, and FEMA in particular, might help enormously in routing people to the services they need, and in turn improve impressions of the public regarding what the government is doing to help.

This is a good example of how simply throwing money at a problem does not necessarily help. Because separately from relief funding, what is called for is a coordinated brand campaign demonstrating what has been done, what the remaining needs are, and what the plan is for closing the gap. (Yes, that will cost money too.) It's not just a communication plan, but a brand communication plan, because it affects the entire image of the White House, the federal government, and FEMA. Not only that, but there should be some sort of listening mechanism, if there isn't one already, instituted by the government to pay heed to what affected citizens have to say about their experiences obtaining relief. At a minimum, every call and email should be acknowledged; optimally, incoming cases would be managed from beginning to end to make sure that every last citizen is being taken care of.

Brand is a promise made and delivered. More can be done to communicate to citizens how the promises associated with Katrina are being handled effectively—and what is being done to improve things where they're not.


Branded training for front-line managers

Front-line supervisors who undergo management training learn how to provide feedback, resolve conflicts, assert authority, communicate, delegate, and motivate employees, reports The Wall Street Journal in "Firms Step Up Training for Front-Line Managers" (8/28/07). Companies like Dell and Home Depot are expanding their programs in an effort to "better motivate and engage workers in an increasingly global and fast-paced environment."
 
The question from a brand perspective is, should these programs include training on how to deliver the brand to employees (and by extension, customers) or should they focus simply on excellence in management? In short, is there a benefit to having a brand component of the training?
 
The answer is, yes and no. In Branded Customer Service (2006), co-author Janelle Barlow recounts an embarrassing experience she had in a Rite-Aid store (which was branded with a large sign stating that "The Customer is #1"), in which she was made to wait in the check-out line for a manager to reverse a purchase she did not want. Long story short, the cashier loudly called out for a manager, stating that Barlow did not want the item becaue it was too expensive. 
 
Would branded management training have helped in this situation? In a way, yes...because if managers are taught to help staffers uphold the brand promise that "The Customer is #1," the manager will have tools to help staffers do so. But in a way, no...because treating the customer as #1 is a rather generic brand promise. It is really, in fact, nothing more than a customer service promise. And you don't need brand training to help employees deliver excellence in customer service.
 
I think the bottom line is, if the brand is truly unique or different in a demonstrable way then branding should be a key component of frontline manager training. And not every brand is demonstrably different when it comes to managing people. For example, if someone intends to work at Southwest Airlines, then they need to understand that a sense of humor is key to handling typical job situations. However, if someone intends to work at Starbucks, it is harder to teach them to offer a satisfying "third place" (not home, not work, just a hangout) experience...simple training in positive employee interaction and customer service would cover that.
 
To sum up: Branding is important, but it's important to use it wisely and sparingly - not every situation calls for it. Sometimes excellence alone will deliver the brand results that are sought.

Can you brand a brand that charges nothing?

Today's Wall Street Journal (8/28), in an item titled "Voluntary Pricing Lets Small Eateries Give - and Get Back," talks about cafes that sell food without charging for it. That's right--places like Terra Bite Lounge, One World Cafe, and Six 89 operate on a pay-what-you-want basis. The idea is to make money from those who pay a little more generously than they need to, while helping out those who can't afford a meal.

Does this kind of payment system make branding sense? On the one hand, notes the article, "the marketing buzz such a scheme generates can help a business stand out from the pack." On the other, I think, having a no-price payment system, with a unique selling proposition that involves feeding the poor, makes the whole thing seem like a soup kitchen. That is not an appealing image.

The success of this kind of business depends on finding the right kind of customer, as the article notes, "one who understands the concept and, therefore, contributes appropriately." Apparently there are those kind of customers out there in states like Washington, Utah, and Colorado. But I'm not at all sure that the model extends to urban metropolitan centers like New York, which is where One World Cafe founder Denise Cerreta plans to open a pay-what-you-want cafe. You never know--but it seems unlikely to me that the model will gain mainstream traction.

Ian Schrager + Marriott: A marriage made in heaven?

The International Herald Tribune (August 21; www.iht.com/bin/print.php?id=7197141) reports that boutique hotelier Ian Schrager and Marriott are joining forces to create a line of about 100 boutique hotels. The new brand, which is so far unnamed, will combine the "master of the ultrahip hotel" with a decidedly "unhip" but much more powerful, mass-market leader. The question is will this marriage of opposites be successful?

The answer is, it depends. Certainly it fills a need for both Schrager and Marriott. As the article notes, the partnership will instantly put Schrager "in his rightful place as a major player in the lifestyle market segment and in the longer term will position him to build a mass customer base for his innovations, a la Apple, Nike, and Sony." As for Marriott, though it "has $12 billion in annual sales worldwide...the company is notably absent in the boutique segment."

But does the partnership fill a need for the hotel-going customer? This, I think, depends on how well the plan is executed. As the article notes, Schrager is "obsessive about details" that can seem quirky, like leaving the lights dim or putting "stylish" notepads in each room, while Marriott is more "mainstream" and cost-conscious--the lights will likely be brighter for safety reasons and the notepads may be too expensive.

How will they collaborate? Which brand will have the larger share of voice, if you will? And which customer will they serve--the potential Marriott customer looking for a boutique-like experience or the boutique customer looking for a more Marriott-like experience? My guess is that it's the former--which means that Marriott will need to let Schrager's voice be heard loudly and clearly in order to have an impact.

What branding has in common with religion

Religion gives meaning to life. So do brands. (The latter may or may not be a sad fact, depending on how aligned you are with organized religion.)

Here are some other similarities - drawing from Wikipedia (http://en.wikipedia.org/wiki/Religion) as the source; my thoughts in bullets.

"Religion is a set of common beliefs and practices generally held by a group of people....Religion also encompasses ancestral or cultural traditions, writings, history, and mythology, as well as personal faith and mystic experience."
  • Strong brands prescribe a set of values and practices (use of the product or service)
  • Strong brands have traditions and myths associated with them

"In the frame of...European religious thought, religions present a common quality, the "hallmark of patriarchal religious thought": the division of the world in two comprehensive domains, one sacred, the other profane."

  • Strong brands divide the world up into the sacred (those who use the brand) and the profane (those who don't)

"Religion is also often described as a 'way of life.'"

  • The brands that people are loyal to often describe their way of life

"'Religion' is sometimes used interchangeably with 'faith' or 'belief system,' but is more socially defined than that of personal convictions."

  • Brands are used by individuals but their meaning is defined socially.

Which comes first - the chicken or the egg?

When you're creating a brand, which comes first - the meaning that the brandmaker assigns it or the meanings that consumers assign it? Ideally, it should be the meaning that the brandmaker assigns it. The brand owner should establish a vision for the brand and then work to sell that image to the public.

Some people believe that it is the opposite - the consumers assign the brand its meaning first and then the brand manager facilitates that co-creation between the customer and the brand. ("Classic marketing.") That may indeed happen.

But 9 times out of 10, when you are dealing with a strong brand, you are dealing with a brand where the owner had a vision for what it would mean and then imparted that vision to the outside world. Target, Starbucks, Nike, Microsoft, Oprah - all of these and more are examples of "classic branding."

It is true that "classic marketing" appears to be on the rise with Internet brands like YouTube and Google -- where the customer's input shapes the presentation of the brand nearly completely.

However, brands that endure impart an idea to the public and then keep the public engaged with the brand over time - it is not easy to create a substitute for them. That is what branding is all about - establishing a strong, distinctive meaning that customers can then work into their lives as an enduring symbol of something that matters to them.

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