Tuesday, 30 October 2007

I smell a rat...

A recent article in The Guardian, highlighted the complex balance between consumer branding, city facing corporate names and the intracacies and vulnerabilities within brand architectures. Consider these two statements, only lines apart in the article: 

”...a major fall in group profits at Rentokil Initial as the support services group saw a slump in its school meals business.” 

“However, the flooding this summer has forced thousands of rats above the surface of the nation’s streets, leading to an increase in demand for Rentokil pest control.” 

Do you think the rats running around the kitchen had anything to do with the slump in demand? 

Unfortunately for Rentokil Initial – the corporate name – the fact that their school meals division has a delightfully wholesome and idyllic name – Eden – presumably to help distance them from in the first place Initial – the division of Rentokil Initial where they sit – primarily known for cleaning services (not that appetising) and secondly from Rentokil (pest control – definitely stomach churning) – seemed to pass by the Guardian journalist, Terry Macalister, entirely. He probably felt, if he was aware of it at all, that it was irrelevant to the point of his business article. 

However, as we know, customers have a nasty habit of not staying in their nicely defined ‘target audience’ group. Some rascal who may well be interested in business, say someone perhaps working, also has children who may well attend school. This inconvenient consumer already fits into the two audience categories of business and parent, not unconcerned with the quality and efficacy of his/her child’s school lunch. 

The headline I think, as headlines are, was designed to catch the attention of this two-headed reader, “TV chef plays role in Rentokil meals slump.” Incontrovertably linking pure Rentokil with school meals, and bringing in the TV viewer/Jamie Oliver fan too. Well, there always was a dodgy apple in the Garden of Eden – a lovely name can’t hide your connections. Maybe time for a rethink of either the company name or the services they get into.

Friday, 20 July 2007

Do you get it?

by Eric Goodstadt 
CEO - Brand Guardians USA 

The separation between those who get it and those who don’t continues to grow... 

Putting the brand first is the difference between growth and stagnation. 

Recently, Fortune Magazine published their annual edition of America’s Most Admired Companies; if you study these annual lists like I do, you would see something very distinct and telling about today’s business environment. All top 10 companies are known for focusing on a higher purpose beyond financial performance. Ironically however, they all are also among the top financial performing companies in the world. 

What is this correlation between a higher purpose and significant financial performance? 

As a former executive member of a few public companies, I saw first hand the pressures to meet the streets expectations. These pressures could, and often would, force executive teams into decision-making purely based on financial results, rather than what was in the best interest of the company, the clients and employees. For me, one of the final straws during my career was listening to a CFO’s plan to add a million dollars to the bottom line profits. His route to do so was by deferring a larger portion of the healthcare cost to the employees, whom at this point were already carrying more than 60% of those expenses. 

When you look at the top 10 admired companies, you see an impressive group of organizations that act purely on their beliefs and have amazed the street by consistently performing financially. Whether it is GE’s Immelt bucking the cut throat tactics of Jack Welch for a more nurturing culture with an emphasis on becoming an environmental responsible organization, or Howard Schultz of Starbucks offering part-time employees a comprehensive healthcare program. Each of these companies and their leaders ignored the street and followed a higher purpose to drive their actions. Although this idea of a higher purpose may sound spiritual, it is actually a sound business strategy grounded very effectively in their respective brands. 

For Howard Schultz it was has been written many times over that he never created Starbucks to be the best coffee maker in the world. Instead, he wanted to create a special respite, or 3rd place for humanity, in our hectic over anxious society. With this brand essence, Starbucks does a lot more then just make innovative and delicious drinks. They are among the most charitable organizations in the world, they offer comprehensive healthcare to all employees who work as little as 20 hours a week, and they consistently create environments that reward their customers with the respite the brand promises. 

Conventional wisdom would say to cut back on the funding to third world farmers for education and clean water, as the charity is too far removed for the average consumer to care. Conventional wisdom would also say to eliminate expensive healthcare costs for part-time employees (just ask Walmart, which is no where to be seen in the most admired list) and to replace those expensive, soft, and cushiony lounge chairs with cheap durable plastic ones. In the end, while conventional wisdom may provide short-term financial benefits, it has always been the long-term consequences that Howard Shultz has been concerned with. His vision for Starbucks has helped countless people in third world countries have a better life and has also provided over 145,000 employees and their families with quality healthcare coverage. In addition, if you judge success by the consistent throngs of loyal people jamming their tranquil store locations, Starbucks has succeed in achieving not just third place status but quite possibly a 2nd place stature among its customers. 

Some will argue that Starbucks, while admirable, is quite unique and shouldn’t be an example for all to follow. To counter that argument, let’s take a look at a company that once was the darling of the street, until the star lost its shine in the 1990’s only to be resurrected by an unconventional choice for CEO. 

AG Lafley was universally agreed to be a shocking selection to take over the CEO position of the ultraconservative Proctor and Gamble. The spiky gray haired CEO looked more like an advertising executive then a groomed successor to the CEO position, but he has proven to be the wisest choice the company could have ever made. P&G has become one of the biggest companies in the world on the basis of maximizing productivity and efficiency of its value chain. 

In its long storied past, the company would have never be confused with a leading design company, as it traditionally chose to sacrifice style and design for low cost production. However, as the technology age has exploded and the consumer has migrated to experiential buying preferences, AG Lafley saw that P&G’s tried and true operational behaviors were no longer valid in this new world. Ignoring his critics and some long time P&G traditions he sunk millions into redesigning packaging of the companies most popular products. In addition, Lafley consolidated brands counter to P&G tradition, creating flagships like Mr. Clean, as well as forced his management to look outside the P&G walls to find new innovative ideas. 

So while the street criticized Mr. Lafley for sinking millions into the redesigning of a $4 shampoo bottle, it was Mr. Lafley who realized that for today’s consumer the design of the shampoo bottle and how it looks in the shower is just as important as the product itself. 

In the end, both of these companies, and the other 8 organizations that appear on Fortune’s list of Americas Most Admired Companies, know something that unfortunately most companies refuse to accept. They know that if you put the brand first and execute the brand promise for the benefit of the company, customers and employees, the financial rewards will come. 

So whether or not you are number 1 GE, embracing its brand of innovation to create environmental friendly solutions, or number 7 Apple destined to be the enablers of melding life and technology, or number 8 Google who is determined to create unique user experiences (for both consumers and employees), it is finding your central purpose that will lead your company to its greatest success. No one can argue with the financial performance of these top 10 companies, and if each one of them achieved this success by honoring the brand holistically, wouldn’t it make sense that your company could benefit form doing the same?

Tuesday, 17 July 2007

Research - UK v USA

As we were planning our US launch I asked Chris Jones, Brand Guardians Research, what he thought were the differences between research in the UK and the USA. 

He quickly responded, "Well here we have qualitative, generative research and quant, whereas in the States it's mainly quant." 

Well this seemed like a good start point for a blog - but Chris is too busy doing research to write about it - so having had a 20 minute chat with him about it, and following his conversation with a US based researcher - who's actually Welsh, I thought I'd try to jot down a few interesting nuggets. Apologies for any shortcomings...

It seems the biggest determinate in different styles is size of market. Although this is not the whole story as if you take the market on this side of the Atlantic as Europe, around 320m people, it equates roughly with a US market of around 300m people. But of course the whole genre of modern marketing and branding has been honed in the 'single' US market whereas historically Europe has been diverse and differentiated. Classically we think of the American brand as the single-minded, identity-led, homogenous mega-brand. The US has a culture of vision-led, big idea brands. 

They're often the ones we now call 'global' brands: McDonalds, Coke, Microsoft, Nike, Starbucks. Across such a large geographical base with a vast range of people and cultures, a clear brand strategy of command and control delivers an effective and sustainable(?) business model. Research has been used to validate the brand propositions through numbers - data on who will, who won't , who might, when, where and how often. Maybe a sense of a predetermined idea that just needs testing.

Research in the USA is based on six key centres: New York, Boston, Chicago, Atlanta, Los Angeles and then San Francisco for IT or Florida for leisure. It tends to be conducted by a travelling team consisting of agency suit, client and researchers. Over the duration of the project much of the learning happens in "off-line moments." As the team travel together they exchange ideas, insights and developments that inform and direct the project. The tendency is to compare and contrast different regions and then develop ideas that span the differences - not always ending up with the highest order idea. 

It's a model that has worked well for successful brands across America. But even regional brands in the USA are the size of many European national brands. The well-practised US marketing process is geared up for an elephantine scale. 

In this world of increasingly savvy consumers and smaller differences between different products and services we need better ways of accessing the real consumer truths. Rather than just hear what they are telling us we need to see below the surface. Consumers know how to read the marketing code, they know how they are supposed to respond. In qualitative research, projective techniques and collusive methodologies are used to uncover the real truths. The approach needs to be fluid and adaptable in comparison to a broader megalithic approach. 

Our qualitative research is much more of a journey into the unknown - and is used across the whole of Europe. By defining alternate realities that test the corners of the envelope of a proposition we draw out comments, attributes and ideas in focus groups that steer and inform the development of the brand concept. Rather than compare one area with another, we learn from each one and use that learning to add to the richness and breadth of a brand. The process is iterative and culturally sensitive. In Europe there is an understanding that brands only exist in the context that they live in. This contrasts with the stereotypical US brand that once dropped from the 'Brand Hercules' that delivers it, imposes itself on the new environment - think EuroDisney/Disneyland Paris. 

Obviously there is a huge role for quantitative research in Europe as well. Every brand will have a tracking service and be part of a monthly omnibus poll. Most brands will require some statistical data to launch, expand or invest.  

Our expertise in understanding regional insight has two immediately useful applications for US companies and their brands. One, taking a fresh approach to working within the US and in understanding the nuances of, what are after all phenomenally large, ethno-geographical differences and using them to inspire new ways of inter/pan/cross-state branding. And two, delivering US brands into Europe using culturally sensitive insight to develop and hone the best way to appeal to and enhance the new market.

Tuesday, 10 July 2007

Lots in common, some things different - UK/USA trademarks

by Pauline Amphlett
Principal - Brand Guardians IP

If you wanted to pick an obvious difference between intellectual property (IP) in theUK and USA you could start with the spelling of ‘trade mark’. In the UK it’s two words, in the USA it’s written as ’trademark’. You also receive a much more lavish trade mark certificate from the USA, with resplendent, gold embossed eagle. 
Cross border treaties and practice to facilitate trade have existed for centuries. International treaties too have underpinned intellectual property rights, many emanating from the Swiss based World Intellectual Property Organisation (WIPO). This means that there are many similarities in registering a trade mark in other countries. 

There are however, some differences. 
For trade marks there are two major differences in the USA: 
• The requirement to file evidence of use of the mark. 
• The need to be very specific as tot he goods and services in the specification. For instance seeking to register a mark for ‘software’ would not be specific enough, whereas ‘software for processing financial transactions’, or ‘software for the operation of X-Ray machines’ would be acceptable. 

Whether seeking to use a new name or identity in any country the starting point before using it is to check what’s already registered. Given that there are six million US trade marks you need to know what’s out there already and take professional advice. 

We’ve seen a significant rise in the number of US trade marks being filed by our clients over the last ten years (the rise applies to other countries too). It reflects the opening-up of trade, developments in manufacturing, the rise of the service industry, the worldwide web and social change. The increased demand has not just come from larger businesses. Our clients operating in sectors like IT, financial and business services, recruitment and food and drink have been particularly keen to secure ownership in the USA. 

One relatively recent development for both the USA and UK was them becoming signatories to the International Trade Mark, administered by the World Intellectual Property Organisation (WIPO). This presented another opportunity to make the process of apply for trade marks in a large number of countries easier and cheaper. With the Community Trade Mark also being a signatory to the International Trade Mark the savings can be considerable. 

When the Community Trade Mark (one application covering all EU member states) was introduced in 1994, the level of take-up surprised OHIM the body administering it. The number of applications overwhelmed the office. What had not been foreseen was the level of applications from US companies, around 65%. There was a certain amount of gold-rush mentality (not just from US owners) to get there first, to secure a mark. Many US owners recognise the importance and value of securing trade marks in the UK and across EU. 

We encourage clients to take a short, medium and long-term view of their trade marks. This is cornerstone of setting the Intellectual Property Strategy and creating enduring names and brand identities. The key thing is to ‘search before you use’. Doing so informs your decisions and makes for a smoother ride in this unpredictable world.