Build brands that can last generations: Company’s net worth rises with roster of its strong brands

Published in the Philippine Daily Inquirer, Business Section, May 18, 2007

EVER WONDERED where the all-time favorite Filipino brands of your childhood and your parents’ or even grandparents’ generations are?

Ask today’s young generation if they recognize these brands: Ma Mon Luk, Gregg shoes, Majestic Ham

Ma Mon Luk was yesterday’s casual family dining restaurant, replaced today by Jollibee and Chow King. Everybody used Gregg shoes in the previous generation; now Shoemart is the destination store for footwear. Goya, Chocnut, Cow Label dried beef, Reno liver spread, Majestic ham – have all been overtaken by top of mind snack food brands like Kitkat, Hersheys, Swifts and Purefoods meat products. Sunquick and Julep, the most popular juice concentrates a few decades ago, have now been replaced by Magnolia and Selecta fruit juices. Alemars was the more popular bookstore many decades ago; today the top of mind is National Bookstore.

When destination stores where not yet the trend, most families trekked to COD at least once a year for shopping and a bonus preview of the Christmas Nativity scene. Camay, Eskinol and Lyna cream were must have personal care products while Happy Feet and the durable Ace black bags were the footwear and bag to wear. Today, these brands no longer enjoy the same top of mind recognition as they did in yesteryears. There is wisdom indeed in the saying “out of sight, out of mind”.

But not all of your childhood brands have been relegated to oblivion or very minimal awareness. Some have become stronger through time – recalled and enjoyed not only by your parents’ and grandparents’ generation, your own generation and even by your kids’ generation. Goldilocks and Max’s fried chicken, notable in the previous generation remain to be in present times. San Miguel beer, faced with aggressive competition and a fragmented market, still remains unfazed with dominant brand awareness. These brands have remained in the consumers’ consciousness because of sustained marketing efforts. Despite dominant brand awareness in one generation, they continue to build empathy for the brand from one generation to the next, never failing to regularly mount marketing campaigns. Likewise, they continue to refresh the brand with new, exciting product extensions and execute dimensions of the value propositions in ways that are relevant to each generation. All these require marketing expense and over time these brands have not failed to allocate appropriate levels of marketing investments.

Brand as inheritance assets

Building and managing brands isoften perceived as an expensive exercise. In many cases, it is dispensed with or deferred indefinitely. Always, it is resorted to only when competition gets tougher, sales is not as it usually was and when modern trade or new distribution channels demand marketing investments.

Few business owners look at brand building and management as a proactive way of developing legal assets that can literally be passed from generation to the next as a source of revenue stream. Too few recognize that initial business success brought about by design like a breakthrough product or technology or simply through sheer luck need to be sustained, if not further maximized. Many rest on their laurels and fail to capitalize the momentum and opportunity while maximizing growth. Here are some ways to help build strong brands that can be passed on from generation to generation.

Build, grow and sustain investments in a product portfolio that is the company’s expertise. Quite a number of companies today feed their organization’s value and growth through diversification and by buying up-and-coming brands with a rising number of consumers. Seemingly, a sensible strategy provided that the company has the expertise, resources and investments to further fuel the acquired brand’s growth over time. Otherwise, funding for the acquisition is best put to use to continuously building the company’s present roster.

A company’s net worth increases with the number of strong brands in its roster or the number of brands it can build into a strong position, not by an otherwise numerous products with mediocre performance in its stable.

Avoid an out of sight, out of mind scenario. Brand management is all about sustaining the brand’s relevant presence in an otherwise highly competitive scenario. The abundance of product messages a consumer is faced with daily makes it difficult for one to remember a brand unless reminded frequently through media or through other sources of information that impact on one’s daily routine or lifestyle. Thus, the rise of new forms of media – internet, direct marketing, out-of-home advertising, lifestyle magazine formats, etc.

True, some previous generation brands are making a come-back with more refreshing product offers e.g. the almost moribund Araneta Center in the last decade has become the new place to be seen with its landmark Gateway; the conservative black Ace bags turning into the fashionably stylish Ace Progres bags now sold at Rustans and Bratpack where bag-a-holics come to shop; and Happy Feet with its more flexible designs and styles, to name a few.

But it has become a tough ride winning back lost customers and gaining new ones with competition more aggressive and numerous. Araneta Center now has to contend with the Ayala and Robinsons malls, Ace with Juicy and other branded casual bags and Happy Feet with Crocs.

Invest in product renewal. Make your consumers want to keep coming for more of your products or service. At proper intervals, introduce new but meaningful brand and category extensions, exciting packaging, new advertising, more rewarding consumer and trade promotions, etc. Just like any relationship and most specially with consumers, this should be spiced up in a timely, relevant manner.

Maintain expected quality at all times, if not improve it. Brands that have been around for quite some time have built the market’s expectations. Thus, consumers are likely to know of any changes whatsoever when it comes to product efficacy and delivery. It is not uncommon for brands today to change hands nonetheless, new brand owners must live with the caveat – a product has become a brand because it holds strong, unique and favorable associations among its loyal customers and therefore to change any part of the brand in a lesser way is a sure-fire way to destroying the brand over time.

Never fail to execute a value proposition that is meaningful from one generation to the next. The brand’s original value proposition need not change unless market forces dictate but it must be refreshed, if needed, from one generation to the next of a brand’s target market. Goldilocks for nearly forty years has capitalized on the Filipinos’ caring and thoughtful values, never failing to take home goodies for family, relatives and friends. Today, this has been spiced up with pre-packed bitbit bags that have become convenient for pressed-for-time, slow to decide buyers. Not to mention,
Goldilocks offers padala packages that is specially a favorite for OFWs.

Go global. A fortified presence locally is the impetus to market beyond the domestic shores. The world has become borderless and the presence of many Filipinos in many countries provides the Filipino brand quite a number of opinion leaders and influencers who are likely to introduce the brand to other foreign nationalities. But then the brand acquires integrity even among the Filipino community and global Pinoy workers if there is pervasive awareness and use in its home country.

Get expert, seasoned help for brand building and brand management. Here lies a difference in outlook of a business owner who seriously believes in the importance of brand building and management as a driver to market demand and one who believes that having marketing personnel is testament to one’s belief in branding. Not all marketing people are equipped to build brands because not many have been exposed to the rigor and opportunity in their past experience. Likewise, not all marketing people have experienced the full dimensions of managing a brand – most today, have had publicity and special events exposure (but this is only one aspect), some have had trade marketing (another aspect), others just do marketing communications (still one dimension of marketing), while some may have only experienced product concept development but without knowledge of implementation work, etc. Others are more partial to branding work in fast moving consumer goods or service or retail, etc.

Where there is limited skill in marketing, the best approach is to augment with outside help by contracting the service of expert marketers on a limited basis. This way cost is contained due to less experimental mistakes, the marketing scenario is objectively assessed, the turnaround is faster and there is access to reputable networks. On the other hand, business owners must diligently make a cross-reference of the marketing consultant.

Company versus product brands

Fueling the company’s net growth with a roster of reputable single brands may be costly in absolute terms and yet it remains to be more profitable than having one company brand assuming it is done correctly.

Having brands that are no. 1 or no.2 in its category mass or niche adds great value to the organization and allows the company to flex its muscles when it comes to investments and resource management. A company brand must be seen as enhancing the value of a product by virtue of the perceived quality associated with the maker of the product. But there is greater value in building single brands augmented only by a company brand. For example, Procter & Gamble is known as a quality maker of household products. Its logo is an assurance of the kind of quality the product delivers. Procter&Gamble has several laundry products among them Tide, Mr. Clean, Perla and Ariel. The overall value of the combined gross sales of these four brands alone outweighs having only one company brand.