graffiti

DE-BRANDING AS RE-BRANDING AND INTERNAL EQUITY (OR BRAND MYOPIA)

Strange as it may sound, some of the most important work we do does not involve building or even refreshing brands, but simply finding brands to retire.  I hesitated to use the word “simply” because it’s rarely simple. What stands between brand retirement and simplicity is that old bogeyman, Internal Equity—that and the business cultures that create and sustain it.

Internal Equity is often just a euphemism for a non-rational attachment to brands on the part of their stewards. These are typically product developers, marketers, sales personnel and managers of the P&L centers who believe they are dependent on the existence of these brands to meet required business results. The delusion is that the level of awareness and perceived value ascribed to these brands by internal stakeholders is also shared by the market.

To be sure, this is not always a case of brand myopia. Sometimes internal stakeholders do have very clear, accurate and evidential knowledge of a brand’s true worth or market value: the internal and external attachments match. But more often than not, the phenomenon of Internal Equity is rooted in phantom logic.

Such delusions are easy to come by. Saturated day in and day out by the same brand messages, names, logos and even by regular contact with the product itself, brands take on a life of their own. From there, it is easy to project value unwittingly, outwardly. The world, however, may see things quite differently (or see them not at all).

The late Wally Olins, of Wolff Olins and Saffron, sums up the issue with characteristic concision in his posthumous book, Brand New:  “How do businesses assimilate the companies and brands they acquire so that they fit comfortably into the whole without losing the characteristics for which they were acquired in the first place?’’

We might go further and ask,  should they assimilate them at all, or is it better to allow them to persist on their own, tethered to the parent by a long, thin, invisible thread, if only for a time? And with that we are in the realm of brand architecture—how to manage and deploy one’s valued strategic assets to catalyze business performance and/or achieve certain strategic ends.

What we have found in our work with clients is that quite often the majority of acquired items in a portfolio are not (nor ever have been) brands in any robust sense. They are usually mere trade names (sometimes trademarked, sometimes not). They have no marketing budget, effort or apparatus to support, manage or grow them. While they may be bought and sold by customers, they have no inherent brand equity; they are not actively marketed, advertised or otherwise promoted. They are not brands. It’s at that point of discovery that we invoke and apply one of branding’s cardinal rules:

The Brand Parsimony Principle: create and manage the smallest number of competitive brands that you can actively and effectively manage, leverage and grow.

Which brings us to the nub of the matter: how one determines—effectively and economically—whether a beloved brand truly is a brand or is a counterfeit, a mere trade name, not so well-known beyond the halls of the business it originates in. The obvious but expensive answer is to conduct formal research into what customers and prospects know, don’t know or think they know. Budget constraints often rule out this option, especially if the need is to make determinations about a large number of brands.

So, while quantitative testing, with statistically significant sample sizes, is almost always preferable, it’s also expensive. So what’s the alternative (apart from blissful self-delusion)? BrandingBusiness has developed a brand research instrument to answer the Internal Equity question.

Based on logic and experience, we have identified a set of dimensions that help us assess brand status (awareness and equity) indirectly.  To get to such a point, we do not ask for judgments, estimates or best guesses about a givenbrand’s market value, level-of-awareness or equity. Rather, we ask questions which admit of quantitative answers, along dimensions that we think can tell us something significant about brand status, things like: product history (number of years in existence), clientele (number of active customers); competition (total number of competitive products in the market); promotional support (whether or not a brand has a dedicated marketing/advertising budget or not—and how much, etc.).

We used these dimensions with success for the Process Systems (PS) division of Saint-Gobain’s global Performance Plastics business. PS designs and manufactures fluid management technology—advanced tubing, pumps, valves, manifolds, gaskets and seals—for highly specialized, often demanding applications.

Using the BrandingBusiness equity protocol, we assessed their portfolio of over 50 SKU’s and identified just four genuine brands around which the total offer could be organized, simplified and more effectively marketed and sold. In the end (or in the new beginning), we re-purposed them as functionally defined lead (line) brands, refreshed their individual identities, and assembled them into a new, more equitable and navigable architecture.

---

by jake wetton