If You Build It, They Will Come

Your brand is your asset. You can't afford to ruin it. Developing a strategic branding strategy ensures your long-term competitiveness and makes customers come back, again and again.

by Louisa Wah

If a man's home is his castle, a company's brand is its asset. In fact, Wall Street considers a brand to be one of the most valuable assets a company owns. And companies increasingly realize that their image and reputation affect all aspects of corporate life, most notably, their competitiveness in the market.

But how does a company go about developing a brand as its asset? Elinor Selame, president of BrandEquity International, Newton, Mass., says a company must develop strategic branding options to achieve a long-term sustainable competitiveness. What this means is that companies must know what it owns, how much its brand is worth and what relation its brands have with each other and with the parent company.

Speaking at AMA's Executive Forum on "Corporate Branding: Leveraging Your Company's Key Intangible Asset," Selame listed five branding options that companies can choose to adopt based on their specific goals: monolithic, theme variation, endorsement, conditional and decentralized.

The monolithic strategy is used by single-product or vertical-product companies such as Dole Corp. and Virgin. In the case of Dole, the company had leveraged the name of its best know product--the Dole pineapple--to elevate it in the market. The same brand name had been transferred to other fruit and vegetable products and has worked effectively. With Virgin, the name is applied to beverages and media stores on top of the airline. "The benefits of that is very apparent," says Selame. "When you advertise one of your brands, you're advertising all of your brands. It's a much less expensive way to build a brand, but not necessarily good for everybody."

Selame says this branding option doesn't usually work for large conglomerates operating in diverse industries. One exception: Mitsubishi has successfully branded all its products--gasoline stations in Japan, cars, electronics, food--with the three-diamond symbol, which in Japanese is equivalent to "Mitsubishi."

Variations on a theme provides differentiation for products and services within an overall branding authority. For example, Kodak uses the yellow trade dress with all its products but allows different type faces of the trade name. Because there is a design system that calls for consistency of the brand name, the brand mark and the trade dress, Kodak has been able to build worldwide recognition over time.

Another example is Kmart. When the company upgraded its identity several years ago, its private brands looked shabby in contrast. Selame helped it leverage its brand name by taking the letter "K" and transferring it to all of its home and garden products. For example, a generic insecticide was given the name "K-Rid." The color green was also introduced in a strong and consistent way. As no other company in the same category was using the same color, Kmart's private brand stood out. When this was first done, the category was a business of under $5 million. Now, it's an over $1 billion category, even though there hasn't been a lot of expensive advertisement.

Variations on a theme helps a company cross sell different categories of products and services and makes it easier to launch new ones. But the tradeoff is that individual product lines and divisions are more difficult to spin off without deducting branding assets.

With the endorsement strategy, the parent company provides the umbrella under which each individual brands are marketed. One of the big players in this strategy is Nabisco. The Nabisco brand, represented by a triangular shape on all its product packages, immediately tells consumers who owns the products. But each sub-brand, for example, Fig Newton and Oreo, also enjoys tremendous equity in a strong brand name. Selame says the benefit is that if Nabisco wants to sell any one of these brands, it will be able to get a lot of money. "All they do is to take the word Nabisco off of it and they can sell it to anybody else," she says. "There is a big value asset to that."

Endorsement systems should be consistent, Selame says. When designing the identity system, one should take the common elements of individual parts or divisions of the parent company and then create an easily recognizable symbol or name to unify them in different situations.

Under the conditional branding strategy, some divisions or product groups carry corporate identity endorsements and some don’t, depending on the situation. When Campbell Soup decided to go into the spaghetti sauce business, for example, it found from its research that using the Campbell name on the bottle would make consumers think the product is soupy. So they gave it a name of its own: "Prego."

According to Selame, brands without a strong link to the parent company can easily be spun off and competing products can be sold within the same category. The approach, however, is an expensive way to support multiple brands on their own merits.

The decentralized approach, or the "Proctor & Gamble approach," is the most expensive strategy, because a company has to support each brand name individually to build it as an asset. There is no umbrella corporate identity endorsement and no visual relationship between divisions and products.

Selame says there is no right or wrong option—each approach may be right for different companies for different reasons. The key is to discover the strategy that most appropriately parallels the organizational goals and to lay the groundwork for a brand asset management plan, she says.

"The challenge is to decide which approach will best support your strategic goals," Selame says. "This important decision will affect the future of your company—it is that important."