How brands can live long and prosper
Brand Immortality: How Brands Can Live Long and Prosper
The second major section of the book was a flashback to B-school coursework. The authors cover topics like the infamous “four Ps” of marketing, Maslow’s hiearchy of needs, and Porter”s Five Forces, all as relate to discussing brands and their longevity. They are particularly critical of the application of the Boston Matrix to brands.
If you have been remotely connected with business strategic planning in the last few decades, you have no doubt been exposed to the Boston Consulting Group matrix that plots business units on a two-dimensional grid of growth and market share. The theory behind the BCG matrix is that a leadership market share position is the key to profits (hence high market share business is much more desirable), and that growing business sectors are more profitable than stable or crotracting sectors. In the early days of the matrix, armies of BCG consultants poured into Fortune 500 corporations and pointed out how often management was allocating resources to low growth, low share businesses (“dogs”) while starving units with the potential to dominate high-growth areas (“stars”). The best path to growth and profits, the BCG suits proposed, was to dump the dogs, and use profits from mature, high-share businesses (“cash cows”) to fund the stars.
That may be fine for business divisions or individual products, but using this strategy for brands is a complete misapplication of the theory, say Pringle and Field. A dominant brand in a mature market isn’t something to be “milked,” implying minimal investment in the brand and application of its profits to other brands. A brand suffering from inadequate support in the form of advertising and promotion will inevitably decline and lose its value. On the other hand, a strong brand in a mature market need not limit itself to that mature product line – it can be extended to new, high growth areas. The authors hold up Apple as one example of a brand that has extended itself from personal computers to music players to mobile phones, in each case leveraging the existing brand (and, of course, excellent product design) to become a dominant player in the new market.
The last phase of the book will be the most interesting for readers looking for data on what works for branding. Pringle and Field dove into the archives of the IPA (Institute of Practitioners in Advertising) for both statistical models and individual case studies of successful branding campaigns. They divide their analysis into four categories: new, growth, mature, and declining, and show how each phase of a market takes a different approach.
They even show that some brands have prospered in flat and declining markets. They describe a Hovis bread campaign which actually required a relaunch of a hundred-year old brand to reposition it in the minds of consumers. The brand was long-associated with whole-grain products and the company found itself unable to extend its reputation to other products, like white bread. By investing in advertising that played up the long history of the baker and which emphasized healthy products, Hovis was able to build on the brand equity it had developed over many decades but successfully extend the brand to products other than its whole-grain tradition. In a mature or declining category of packaged bread, the firm achieved double-digit growth.
Brand Immortality covers a lot of ground, ranging from its B-school redux to its illustrated case studies, and some readers may want to skip over parts they find less relevant to their interests. The book does make a strong case for properly valuing brands and investing in them to preserve and enhance that value. Marketers who want to make a case for not gutting ad budgets in tough times will find plenty of ammunition here. In addition, the surveys of successful campaigns under varying market circumstances will provide both general strategy guidance and, with the case studies, inspiration.
I’ll pull out some interesting points from Brand Immortality in future posts. In the meantime, may your brands all “live long and prosper.”
I haven’t read the book so can’t comment on everything you mention. I am looking forward to it though.
One comment I will make is that Apple did not extend its brand. I realize that many people will take exception to that statement so let me explain.
Apple’s brand has always about creativity and art electronic delivery systems. Early on they did this through the computer platform. They developed a brand loyalty among designers, musicians, and many other creative types. When they introduced the iPod and iPhone they simply created new products to deliver the same brand. I wouldn’t refer to this as a brand extension but rather brand affirmation.
Microsoft on the other hand extended their brand when they launched the Xbox platform. They were known as business software (Windows, DOS, Office) and moved into the entertainment hardware world.
I find that companies that reinforce their brand are more successful than ones that try to keep extending it. Extensions work initially but will eventually be the death of the brand as people no longer know what they stand for.
I look forward to reading the book as brand management is a wonderfully complex area that everyone can learn from.
Good point, Scott, though the leap from a desktop or laptop computer platform to a tiny music device isn’t insignificant.
However one views it, the key thing is that Apple looks at their brand as a permanent feature that can be applied to a variety of products and, presumably, outlast the life cycles of those individual products.
Partly because the brand is the company name, “life cycle” thinking about the Apple brand won’t happen.
Thanks for stopping by, Scott.
Roger
I agree it is not an insignificant jump to make those moves.
It will be interesting to see if Apple’s brand has the same enduring qualities to last multiple generations. The graveyard is full of brands that were top of the market for a long time but couldn’t make the transition because of how they saw themselves.
Making your brand about a single product or even product line is a sure way to die when other companies innovate. Just ask any typewriter company.
The boston matrix may be the most misused and abused model in the history of business science. I’ve heard experienced consultants for respected companies calling any two dimensional scatter chart divided into four fields a “boston matrix”.
When I went to businessschool, It was made clear that the Boston Matrix was valid assuming the product life cycle was valid, which it not always is, which there is plenty of examples of. But I guess that information ended up in bag with other academic stuff most people left behind as we left school for the “real” world.
Naturally, there might be a product lifecycle for products, that brands outlive, if the product dimension of the brand evolves with the category. A brand can be a dynasty of products, generations give birth and foster future generation that take over the dynasty. (Apple is a good example of this)
Indeed, a well managed brand can drive the category and influence the life cycle for competing brands, changing the scene so that the singing from the brightest star starts to sound like barking.
There are many insight to be found from the Boston Matrix, but clumpsy and poor usage of any model will not give usable results.
/Jonas
I like Scott’s observation save for his description of Apple’s core business. I would say Apple is a consumer electronics design company and has been since it introduced Lisa. Prior to Lisa, it was simply a personal computer maker, like Dell and Gateway 2000 would be later.
As a designer of personal electronics, its foray into MP3 players and cell phones was as natural as an aging catcher moving to first base.
Have to give props to Jonas for calling out the Boston Matrix, too. I worked at a company where every recommendation had to be presented on that stupid grid. Countless wrong decisions were made because any idiot can put his favorite recommendation in the golden quadrant and win. Duh!