The Big Lie – the complete book online - 4 Branding

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Chapter 4

A rose by any other name would cost a lot less

Branding

Competing products were now more precisely similar and more unnoticeably different. This was one explanation of why modern advertising first flowered in the marketing of beers, soaps and cigarettes.

Daniel J. Boorstin, The Image: A Guide to Pseudo-events in America, 1961

In the late 19th century, passengers straining for their first glimpse of England from the decks of channel steamers were able to make out words painted across the white cliffs of Dover. They had arrived at a land called “Beecham’s Pills”.

Peddlers of pills and patent nostrums were amongst the first businessmen to appreciate the importance of brand names. They understood that the less traceable the benefit of using a product the more essential it was that its claims should be supported by a responsible identity. All the better if a scientific or medical connection could confer added credibility; one of Beecham’s competitors from the freebooting era of Victorian entrepreneurs, Dr Collis Brown’s tonic, still on the market, was not forced to drop the medical attribution from its brand name until 1980.

Other sectors of trade quickly followed the lead of the early medicine men, enthusiastically inventing brand names to attach to their products. It was the dawn of consumerism. Before branding, the only guarantor of the quality of a product was the person who sold it to you. You would buy your cheddar from the local farm which made the best; you could take the rotten onions back to the market stall. As ships, railways, lorries, and finally aircraft extended the limits of physical distribution, retailing systems grew more complex. The source of goods became increasingly remote. But consumers could now look to brands for an assurance of reliability. This became as important for the daily shopping-list as for expensive purchases. The brand justified the investment, and it would deliver the same experience every time. Above all, consumers, like practical businessmen, want to eliminate uncertainty. Holiday Inns built a worldwide chain of hotels on this principle, providing anxious American travellers with familiar surroundings in alien cultures, right down to the iced water, under the soothing slogan, “The best surprise is no surprise”.

Branding was a prerequisite for the new patterns of retailing and the globalisation of business. In the 1950s most English people walked or took the bus to the shops, and when they got there they were served by someone standing behind a counter, often wearing an apron or a smock, and possibly a smile as well. England had 137,000 village shops then; by the 1990s there were fewer than 34,000 and people were driving miles to hypermarkets and shopping centres. Almost everything they buy is self-selected, usually with very little opportunity for assistance from sales people. Branding helps them choose.

It is now very difficult to find products which are not branded. Fresh produce has finally yielded to pre-packaging and labelling; even if you buy it at a market stall it often has a sticker to reassure you that you are buying an Israeli orange, an organically grown potato, or a banana imported by Geest. Simple, functional products have succumbed too. A few decades ago your local ironmonger would weigh out a pound of nails and let you have them in a paper bag. Today most consumers buy nails and screws at DIY warehouses in pre-packed containers, and these will carry a minor brand name. Fashion franchises have taken over the department stores: there is no longer a comprehensive department displaying skirts by size, material, design and colour; you have to roam all over the shop to make your selection, which is now influenced by less functional brand criteria. Multinational companies – even those which do not make consumer products, like ABB, the giant electrical engineering group – endeavour to present themselves as brands.

Even thought is branded: fascism, socialism, Darwinism, fundamentalism, Thatcherism, Blairism, pragmatism, New-Ageism. Each of these is a handy post-it note freighted with emotional meaning which we can slap on any new idea to file it within our cognitive catalogue and thus avoid having to consider it further. By the 1980s the political label “Labour” was so encrusted with outmoded socialist doctrine that the party was unelectable under this name. As the Labour Party adviser Philip Gould said when the brand was relaunched, “New Labour is meant to be Not Labour”.

The unstoppable rise of self-service retailing has concentrated buying power in remarkably few hands. Whereas major manufacturers used to have brigades of salesmen 100-strong or more roving throughout the country, now most selling is done by a few “key account” representatives at head office level. And often the buyer they sell to is their biggest competitor. Retailers’ own-label brands swept in with the penetration of American supermarkets such as Safeway into the traditional UK grocery market in the mid-1960s. Manufacturers which had poured millions of pounds into burnishing “household names” were naturally outraged when their own retail customers began to compete with them, displaying lookalike products side by side on the same shelf at a cheaper price. Some of the biggest brands, such as Kellogg’s, refused to manufacture products for their retail customers, but more hard-pressed competitors broke ranks and accepted large-volume orders at a low profit margin. If not, there was always some brash newcomer willing to take a chance on the own-label market. In the early 1970s, when almost all the great mainstream brands in the British supermarket were already beset by own-label competition, a couple of likely lads in the J. Walter Thompson advertising agency identified a singular exception amongst their own roster of clients: the ubiquitous Oxo cube. The admen defected to start a company manufacturing beef extract cubes for the own-label market. As they made their rounds selling to the head offices of the supermarket chains, they were followed by the sales director of Oxo in his Jaguar, who would offer to buy up the stock the stores had just ordered. Most of them sent him packing, but Oxo’s dominance was never threatened. The big brands’ surest defence was the imagery their advertising had bestowed on their products over the years. Consumers generally thought own-label products were somehow inferior – certainly in status if not in quality – to a heavily advertised brand. Few, of course, would realise that the private-label goods were often made by the same companies on the same machinery which produced the advertised brand.

Own-label products flourish where brand owners overprice or fail to innovate, but big brands still control food and drink products which are purchased frequently. As in most of the world, the top-selling brand in Britain is Coca-Cola, which advertises itself as “the real thing”; nevertheless, private-label soft drinks continue to encroach, and now supply one in every five gulps. Coke had to take legal action to persuade one of its major customers, Sainsbury’s, to alter the design of the familiar red-and-white lettering on its new “Classic – Original American Taste” cola drink so that it did not quite so closely resemble the original American. Insult was added by the fact that “Classic” was the name Coke had used in a disastrous attempt to launch a new formulation a few years previously. But it can be difficult for the owner of a plagiarised brand to produce the evidence needed to win a legal action, since consumers are generally reluctant to admit that they have been bamboozled.

Retail chains themselves are now amongst the largest advertisers. Significantly, their advertising has changed, too. The simple inventories of products and prices published in newspapers and paid for by a levy on the manufacturers they included have largely yielded to glossy television advertisements which invoke all the expensive arts of the big brands. The retailers themselves have become brands. In a 1998 survey British consumers said they had more trust in Marks & Spencer and Tesco than the police, the legal profession, or the government. Like the global brands they sell – Heinz, Cadbury, and Guinness – these companies have won a place in the hearts of their customers, through a powerful image projection confirmed by personal experience. For generations M&S prided itself on never having advertised; its enviable reputation had been built by word of mouth. But that was in the halcyon days before media hype. When its competitors began to seize attention, expensively, through advertising, M&S was forced to join them.

The mutation of products into brands is of vital significance and immense financial advantage not just to advertising agents and the suppliers of fast-selling consumer goods but to all industry. A product is functional: its value can be measured by its ability to fulfil a technical specification. If two rival products achieve the same specification, the choice will depend simply on which can be bought more cheaply. The value of a brand, however, is prized well beyond function. Like beauty, its value lies in the satisfaction it provides to the beholder. Research by the Monopolies and Merger Commission once concluded that the contents of a bottle of perfume retailing at £30 cost no more than £2. The rest was distribution, wholesale and retail margins. The Bic company, virtually synonymous with the ubiquitous biro, and which also made cheap lighters and razors, saw a magnificent opportunity. In 1987 it launched a range of scents almost identical to the leading brands, marketing them in plain glass phials at a fraction of the price. What the company failed to recognise until the product range failed was that what consumers were buying was not a smelly liquid but imagery.

Jeremy Bullmore, then Creative Director of JWT London, offered this discrimination between a product and a brand:

 

The Model-T was a product that had to die. But the brand was Ford and the brand flourishes . . . An understanding of brands is found most often in markets where an objective assessment of product function is most difficult. You can measure the price and specific gravity of a beer (Which? has done it); but the affection of a beer drinker for his or her favourite beer is only marginally based on its price/potency relationship. If a beer is not a brand, it will never survive. Conversely, an understanding of brands is much less frequently found in developing markets with a high technology content. The unconscious assumption is that function alone is enough: and so it may be, but only for a time.1

 

Brand power is often illogical, but it is real. Advil is an analgesic heavily advertised in British newspapers and on television; its major claim is that it comes from America. The same generic formulation, ibuprofen, is available from your GP on the national health, or you can buy it over the counter for less than half the price of Advil. Yet Advil prospers. Many patients will claim that one remedy works for them and the other does not. Aches and pains are often psychogenic and placebo tests demonstrate that suggestibility is part of the treatment, so they may well be right.

A game advertising researchers like to play with consumers is to ask them questions such as, “If Brand X were to come to life, what sort of person would it be?” People find it easy to ascribe distinctive anthropomorphic personality traits to brands, associations which are inspired by exposure to the product, its packaging and advertising. Unilever’s Persil was traditionally seen as “everybody’s favourite Mum” while Procter & Gamble products such as Daz and Ariel, with their hard-edged American demonstrations of competitive cleaning power, were masculine, technical, and efficient, “the man in the white coat”. Such impressions are usually simplistic and directly traceable to advertisements: Coca-Cola is young, exuberant, and American, Perrier is French and elegant, Bailey’s Irish Cream is warm, traditional, and Irish, BMW is efficient and Teutonic, Rémy Martin brandy is a snob. These perceptions influence product preference because they allow consumers to identify emotionally with brands.

The strongest brands are those which have been around a long time, with consistent images constantly refreshed by advertising, or those which have reputations which are rooted in reality. Motor cars are still the most important branded expression of status, and several of them have developed distinct images which are obvious to all, and hence tell us something about the signals which the people who drive them want to display to us. Few would probably disagree with perceptions such as these:

 

Rolls-Royce

Mercedes-Benz

Volvo

Jaguar

Renault 2CV

Ferrari

Porsche

Mini

Volkswagen

Beetle

The New Beetle

 

Ostentatious

Prosperous

Safe and sane

Assuredly British

Witty

Sexy

Pushy

Cheeky

Reliable

Sensible

Nostalgic for more
sensible times

 

Most of these are expensive cars; the few exceptions are very distinctive automotive designs. Their images reflect genuine differences. Building a brand image for less unusual products is a much more difficult challenge. The majority of cars made for the mass markets by manufacturers such as Ford, Peugeot, Renault, Rover, and Vauxhall are not so clearly differentiated, and their images, too, are weak. Their slogans are often little more than expressions of the manufacturer’s anxiety. In the 1970s Rover did have a distinctive image of British middle-class respectability. Its 1990s message, “Above all it’s a Rover”, was a response to the fact that the company was now owned by a German manufacturer, and beneath the bonnet it was, in fact, a Honda. The Swedish manufacturer Saab, which had built a slick, sturdy image on its aircraft association, must have discovered that consumers felt it was a bit staid, like the Volvo. In 1999 it launched a campaign featuring bizarre images, such as a pregnant athletic competitor, to make the point that Saab was “Not what you expect”. If even manufacturers of motor cars, which do, after all, differ from one another in design and performance, are forced to resort to such vaporous distinctions, you can imagine the challenge confronting most other products, which come in similar jars, bottles, or boxes. Rarely is there a perceptible functional distinction; brand choice depends entirely on subjective criteria.

In the looking-glass world of marketing, people can become brands, too, in the entertainment industry. It is usually the name of the bestselling author, not the publisher, which tells you what sort of experience you may expect if you buy the book. (An exceptional publisher in Britain is Mills & Boon, which offers a consistent brand promise: a sentimental romantic story appealing to women.) Norman Mailer, commenting on the star system which drives commercial success, complained that American audiences were “incapable of confronting a book unless it is (already) successful”. Faced with the bewildering stacks of choice in a modern superstore the buyer reaches for the familiar experience: between 1986 and 1996 the share of hard-cover sales accounted for by the thirty topsellers in US book shops almost doubled. Stage and film stars have always been bankable names. The star dominates the form. Content becomes irrelevant; it is simply a vehicle for the display of his or her personality. For a long time Alfred Hitchcock was perhaps the only director offering the same kind of predictability, and Hammer Films the only studio. Now many directors such as Spike Lee and Quentin Tarantino arouse distinctive expectations.

Technocrats, socialists, and the buyers of Which? magazine may scorn the frivolous and illusory fancies of wish-fulfilment which consumers spin around brands like cotton candy, but it is such whimsical affections that now power the engines of commerce. Brands are often the biggest assets of a business. In 1994 Bayer, the giant German chemical company, paid $1 billion for the right to use its own name. During the First World War the United States government had confiscated Bayer’s American assets, including its renowned brand, Bayer aspirin, as enemy property and sold them on to an American company, Sterling Products. While the repatriation of its brand greatly strengthened Bayer’s sales position in the world’s largest retail pharmaceutical market, there was almost certainly a strong emotional element in the German company’s enthusiasm for repossessing its long-lost American offspring. The price paid stunned investment analysts; it was twenty-three times the annual earnings of the company.

When Nestlé fastened its predatory attention on Rowntree in 1988, it was ultimately willing to pay £11 for shares nominally worth only £4. It was not Rowntree’s production facilities, its distribution system, or its dominant market position which the Swiss coveted but its roster of confectionery brands: Kit-Kat, Aero, and Smarties. That same year, Rank Hovis McDougall, feeling vulnerable to a similar takeover, increased its value by £678 million at a stroke by adding to the company’s accounts a valuation for its brands: Hovis, Bisto, and Mr Kipling Cakes. This sleight of hand provoked howls from the financial community, but Cadbury swiftly followed suit. The argument was that if brands are so valuable when sold, the market price should be reflected on the annual balance sheet. Grand Met transformed itself from a hotel group based on bricks and mortar to a global colossus trading in value-added labels. The prices it paid for Heublein’s Smirnoff vodka and for Pillsbury, owners of Häagen-Dazs premium ice cream, included huge balance sheet valuations for these global brand names.

After a period of confusion, in 1998 the British Accounting Standards Board approved a redefinition of goodwill assets which permitted intangibles such as brands to be separately valued. In 2000 the marketing consultancy Interbrand published an analysis which, using complex formulae of its own devising, attempted to rank global brands by their balance sheet value: top of the list was the Coca-Cola name, which, they reckoned, accounted for 60 per cent of the worth of the company, or around £50 billion.

How far can a brand extend its magic halo before it’s stretched out of shape? Unlike many food and drink companies, Nestlé applies its brand to all its products. The Heinz company famously spread a wholesome family umbrella image across 57 varieties of food – and then many more – but chose to present products which promote different values – Weight Watchers and HJ Heinz premium soups – as independent brands, supported with a restrained visual logo endorsement. A fascinating pastime of consumer market researchers is to evaluate new product development and business acquisition possibilities by exploring the various fields in which a well-known brand name may extend a legitimate authority – even though it may not be currently operating in that sector. In the late 1960s, Dunlop, with a monopolistic reputation for tyres, also made tennis shoes, racquets and floor-coverings in the UK. Preparing to enter the DIY adhesive market, the company was surprised when research revealed that consumers assumed that Dunlop was already one of the leading brands in the field. There was a lingering folk memory of a glue in a bicycle tyre repair kit Dunlop had once widely marketed, and the firm also sold floor tiles. Consumers had made the mental leap to general-purpose adhesives long before the marketeers had got there.

Today brand owners are more alert to the potential exploitation of their trademarks, and corporate licensing is big business. The cash-rich cigarette companies, which in the West trade in a literally dying market and are restrained by advertising restrictions everywhere, have long sought to diversify brand franchises into less sensitive markets, particularly those which enhance the brand image (see Chapter 20). In the US, Pepsi-Cola’s Maxwear fashion range cashed in on the “Done it, loved it” theme from its 1994 advertising campaign, while Coors Brewing Company introduced an eclectic range of products in the belief that its beers “have come to symbolise the heritage of the American West, romance and the natural splendour associated with the Rocky Mountains”. Caterpillar became as well known for rugged boots favoured by gays as its construction vehicles. But unbridled promiscuity can ruin the reputations of brands as well as people. Pierre Cardin downgraded its luxury image by applying its name to everything from umbrellas to slippers. In an act of sublime hubris Cadbury involved its UK brand in a test of strength against sensory perception by applying its name, synonymous with chocolate, to a mashed potato mix, canned meats and savoury snacks. The company later erased its name from these products. Relevance appears to play a role; nevertheless there is ample evidence that a powerful brand image can overcome a perceived lack of experience and competence in an unrelated product field. Marks & Spencer’s immense assets of consumer trust allowed it to trawl its database of 3.5 million charge card holders to support a successful entry into the unit trust market in 1988. It is common values which unify activities in disparate markets, and the principle found its ultimate expression in the Virgin phenomenon, unified by the personality of a single man (see Chapter 21).

It used to take years to build major brands. Behind them were substantial companies with a long history of trading, factories, and large piles of bricks and mortar, and a reputation nourished through heavy advertising for many years. As a result they hogged space on retailers’ shelves, discouraging new entrants and extracting a premium price from consumers. But it is the image which matters, and modern communications can magic that out of nothing more substantial than the whiff of the Zeitgeist. The Legendary Joe Bloggs Inc. Co. (world HQ: the Legendary Building, Manchester), was started in 1986 by a 32-year-old Asian entrepreneur, Shami Ahmed. He wanted a brand name which was very British. He considered Nelson, Windsor, Churchill. One of his team, a marketing naïf, disagreed, saying “It doesn’t really matter, you can call them after any old Joe Bloggs”. Mr Ahmed recognised that this was a very British expression, and so, when the first advertisement appeared on hoardings at Old Trafford and other televised sports venues, it simply read: “Joe Bloggs”. Soon, young football fans were asking “Who the hell is Joe Bloggs?”, and his company became one of the top ten jeans manufacturers in Britain.

Today, much of what people do, from eating out to holidays, is a branded experience which substitutes a blanket acceptance of received values for independent judgement. The right brand name provides instant authority. It defies logic and leaps cultural barriers. In the soukhs of Cairo, you will see labels that are passwords to Western society – Ericsson, Nokia, and Alpacino (sic) – on piles of blue jeans these entities never made.

 

The consumer cycle keeps turning. In the mid-1990s a curious shop called Muji opened branches in London offering an eclectic inventory ranging from chocolate-covered soy beans to wrist watches – all without brand names. Their pitch is that the truly avant-garde customer now eschewed the designer labels of the 1980s; the shop itself replaces them, selling anonymity as a brand. Yet by the end of the decade Muji was advertising itself. Meanwhile, far from the West End, at the Saturday market in Taunton, Somerset, shoppers still queue to buy farmhouse cheddar with a hand-written label telling them which local farm has produced it, and home-made cakes bearing the names of the women who baked them.

People relate to brands as they do to other people. The emotional stance of a brand, its philosophy towards life, exerts a powerful influence on consumer choice. Well-distributed brands with distinctive personalities enrich balance sheets like geese laying golden eggs. But where do you find the magic wand?

1 The Brand and Its Image Revisited, International Journal of Advertising, 1984.