Good Morning.
It is a pleasure to have been invited to The Silicon Valley Brand Forum to share some thoughts from my experience on Consumer Packaged Goods Branding as learning for non consumer companies.
From my experience, the consumer goods, professional, technology, financial, B2B and B2C industries have at least one thing in common. They all respond to branding. Every body, every product and every company is a brand. What you choose to do with them will result in generating increased margins, customer loyalty and long term success or alternatively, making them a commodity and driving them out of business.
My purpose today is to convince you that branding is absolutely critical in non consumer industries just as it is in the Consumer Goods industries.
I started with Procter & Gamble in Consumer Goods and became the Brand Manager for Tide, the company’s flagship. I learned a lot about branding and the benefits. Subsequently, I ran businesses in the professional and B2B industries. In those businesses not only did I use branding effectively, I capitalized on consumer branding and extended that branding into the other industries. I came to California to be President of the non retail division for Clorox, another major branding power. Subsequently, as a consultant I have had clients in a very wide range of industries and without exception have capitalized on branding to help them grow their business.
Many non consumer CEOs view marketing as the domain of consumer goods brands. They are wrong. Among Interbrand's 10 most valuable global brands, we find Microsoft, Intel, IBM, HP and GE. All generate far more B2B revenues than sales to consumers.
So why is it a common misperception that branding is a CPG domain alone?
As you know, non consumer companies generally don’t support branding to the same extent as consumer brands. Perhaps they don’t support the branding concept because their offerings have generally been presented directly to buyers by sales people and not via advertising or shelf position. Yet, there are logos on pens, coffee cups, calculators, USB memory sticks and other assorted items. What is the purpose of all this stuff? Proponents will argue that it builds brand by getting the business's name in the office of potential influencers and purchasers, where it will stay top of mind. But then, their materials, website, sales aids and more are all very differentiated and no clear message is delivered. If the name does stay in the customer’s mind, it is out of focus.
Some experts argue that branding plays no role in non consumer marketing compared to "hard ROI" activities that can be proven to drive revenue. Their arguments typically include:
• Buyers are rational decision makers (or a committee of rational decision makers) who are not swayed by emotional factors such as brands.
• Purchases are all about the relationship between the individual sales rep. and the buyer. If the non consumer brand means anything, it is created by the sales rep.
• Products do not really promote the product’s benefits. Those are a given. Price is the only thing that matters.
• Non consumer products are too complex to reduce to a tagline or ad.
While some of this is true, it is also misguided. I have led businesses in consumer packaged goods and non consumer industries and know from personal experience the value of establishing strong brands in both.
Here is why:
• If you sell on a cost basis, you will always be negotiating and competition’s price cuts are just as good as yours.
• You are ignoring the product development investments you have made and are not getting the value from them.
• You are essentially telling your customers that everyone is equal and that only the sales inducements matter.
• You have to over invest in your sales force.
• You are reliant on your sales people alone. Given the transition from company to company of employees these days that puts your business at risk. And you are paying to do it!
On the other hand, here are some of the benefits I have found of branding for non consumer companies.
Let’s use the David Letterman format:
10 It makes products less sensitive in regard to price increases.
9 It can insulate the business from movement of sales people.
8 Branding will provide clarity to the decision process for the customer. Less time is needed to close the sale of an offering.
7 Research shows that it leads to a greater willingness to try a product or service by customers.
6 Branding increases customer loyalty
5 There is a willingness to award a larger share of purchase requirement by customers.
4 The clear focus enables you to “transfer” the goodwill from one product to another.
3 Branding generates higher barriers to entry for competition.
2 Branding ties together all of the activities of your company and provides focus.
AND the number 1 benefit of branding for B2B companies . . .
It has been proven that branded products carry higher margins.
HIGHER margins.
Lessons from Consumer Brands
As the old wise marketing guru said, “Branding is the Essence of Successful Marketing”. Brand equity is a precious gem. While not particularly rare, it can be very valuable. So how do you tap into this treasure? Let’s look at some ways.
As we look at consumer branding or any branding effort for that matter you will note the following 4 critical elements: As an ex Tide Brand manager, I will use Tide as the example.
First, they focus on a Benefit that is meaningful to the customer. Tide is synonymous with clean clothes. Tide gets clothes clean. It has been the promise since Tide was introduced in the 1940’s as one of the first detergents to combat the film left by soap products. Clearly the reason that clothes are washed is to get them clean and therefore the Tide promise is VERY important to the target audience. It is so important in the branding that the promise has been on the box.
Second, there is a proof of claim, a Reason to Believe. This generally isn’t scientific proof given to consumers but could be in the technology world. Here you see it in visual terms in a side by side comparison in a print advertisement. Side by side comparisons have proven over the years to be the most effective demonstration of superior product performance.
Third, the Tone of the message supports the way the company wants the product viewed in the mind of the customers. It enables you to appeal to the emotional, as well as the intellectual aspect of the brain. Tide is a trusted worker. Here is this ad, you can see all three of the elements we have discussed - the Promise, the Reason to Believe and the Tone or C,,haracter statement.
Finally, the message is always consistent. It will vary in the way it is delivered but is always a consistent message. The products, ads and the Tide website follow the same positioning. If what is being branded is a company then everything from the receptionist on the phone through the orders and customer service should be consistent with the tone set out in the positioning.
Are you using this model for your branding?
Let me ask you a question. Who are the Second B in B2B or even the C in B2C? Who are the buyers in any of your industries? What are they like? What motivates them to buy? You do realize that they are also consumers, first and foremost, no matter what their business title. They respond to both the intellectual and the emotional stimulus.
Here are some simple illustrations:
Play along with me. You are a professional person. You have the steel trap mind of a buyer and are swayed only with logical arguments. Emotions and non factual items never would come into play with you. Right???
In N Out Burger
Have you ever eaten at In and Out Burger? Here is a spec. sheet for In N Out Burger’s biggest seller, the Double Double. See how appealing it is? Ready for lunch today?
Double-Double w/Onion Fact Sheet
Manufactured by IN-N-OUT Burger
Nutrition Facts
Serving Size 1 serving (330.0 g)
Amount Per Serving % Daily Value
Calories 670
Calories from Fat 369
Total Fat 41.0g 63%
Saturated Fat 18.0g 90%
Trans Fat 1.0g
Cholesterol 120mg 40%
Sodium 1440mg 60%
Total Carbohydrates 39.0g 13%
Dietary Fiber 3.0g 12%
Protein 37.0g
Price $3.44
Or how about this one? More appealing???
Corvette
The ultimate sports car for years has been the Corvette. Here is the Fact Sheet. Perhaps, if you are an engineer, it is the primary selling message, but I doubt it.
Chevrolet Corvette
Base 2dr Convertible
MSRP $48,900
Length 174.6 "
Body width 72.6 "
Body height 49.1 "
Wheelbase 105.7 "
Curb 3,221 lbs.
Base V-8 engine size 6.2 liters
Horsepower 430 hp
Horsepower rpm 5,900
Torque 424 lb-ft.
Fuel tank capacity 18.0 gal.
Or, here are two other presentations for Corvette.
Tell me that you are not ready to get into your Corvette and ride over to In N Out Burger for lunch. Parking away from the other cars, of course.
Do you now agree that branding has an important place in the support of non consumer businesses just as it does in consumer? Are you ready to brand your company and your products? Do you really understand that it is far more than logos, and in fact, the entire company has to be aligned to the branding message you are trying to establish.
Let’s assume that you personally are convinced. If you work in a non consumer company, you probably have to convince other executives and the CEO that branding is crucial. This presentation should give you some ammunition.
Contact us if we can be of assistance. We have experience in many industries and most likely yours. as well.
Thanks,
John
John Maver
President
Maver Management Group
(925) 648-7561
Maver Management
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