Brands demystified

Throughout the world of business, people believe in the magic of brands

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Overview: For and Against Brands

In Britain, during the summer of 2001, the mass-market television comedies Friends and Sex in the City were interrupted by commercials costing £3m. The Worcestershire Sauce brand, first launched in 1837 by the Worcestershire chemists Wheeley Lea & William Perrins, was back. No longer was it just something you stirred into a Bloody Mary. With its retro orange-and-chocolate label, the brown, brackish liquid was a mark of youth, culinary excellence and, yes, of being funky.

Throughout the world of business, people believe in the magic of brands. Giorgio Armani, the Italian fashion designer, has 200 outlets in 30 countries, But that is not enough for him: he is to put hundreds of millions of dollars oozing his sexuality into cosmetics, shoes, jewellery and furniture. In October 2001 Marks & Spencer followed its closure of 38 stores in continental Europe by opening franchise shops in Delhi and Bombay. An M&S spokesman justified the decision with the view that, in India, ‘a lot of people know the Marks & Spencer brand’. On the streets of Moscow, about 25 000 billboards advertising top brands have been erected in the past 10 years. That equals the number of billboards in London. A four-storey ad now dominates the entrance of Red Square.

Inside mainstream corporations, thousands of brand managers search endlessly for means of giving mouth-to-mouth resuscitation to brand dinosaurs. Indeed the older a brand looks, the more youth must be got to love it. In 2000 Diageo plc ran hip cinema ads to remind 20-somethings, once more, that Guinness was no longer an old man’s stout. In 2001, BMW ran hip cinema ads to tell 20-somethings that the Mini brand had been re-launched. From Babycham (51 years old) and Lucozade (74), through Heinz Salad Cream (87, the subject of a failed ad campaign costing £10m) and on to Dunlop Green Flash gym shoes (69, endorsed by Robbie Williams), ageing brands are the subject of management effort. Even the hated World Trade Organisation, aided by the US marketing services firm Y Not, planned a ‘Positive Anarchy’ campaign of merchandising, product placement and ‘guerrilla marketing’ so as to promote a better image for its brand among American 12 to 19-year-olds.

Apart from breathing life into old brands, managers also pursue line extensions – upmarket or downmarket variants of a product, tweaked by flavour, form, colour, ingredient or pack size. Don’t just drink Smirnoff with Coke, drink Smirnoff Ice with Diet Coke ! Occasionally and more expensively, brand managers build wholly new brands, as Toyota did with Lexus.  Finally, it’s important to rationalise over-heavy portfolios of brands: to perform brand deletions. The two $40 billion companies that pretty much invented branding – Cincinnati’s Procter & Gamble, and the Anglo-Dutch concern Unilever – often cull their brands.

Chief Executive Officers remain adamant that brands are the key to future commercial success. Armani calculates that his name alone will guarantee his strategy of brand extension, or brand stretch, from clothing into chairs and sofas. Meanwhile, though the global value of mergers and acquisitions among companies has slackened in the new millennium, the buying and selling of branded products and services continues at a frenetic pace.

Yet though corporations take branding very seriously, not every corporation sees itself as a brand wizard. That is why many outsource the magic work of branding effort to independent marketing services companies: to Omnicom, WPP, Publicis. Saatchi & Saatchi first made the case for global brands more than 15 years ago. Since then, marketing services companies have themselves become global enterprises, quoted on international stock exchanges. Their activities extend from the creative development of ads and the purchase of time and space for those ads, through public relations and investor relations, to all kinds of design. They do corporate identities, graphic design for point-of-sale display, packaging and print, Web design, retail and leisure interiors, and even product design.

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