Creating and nurturing a brand today is a key to business success. Derek Parker looks at two successful emerging brands that highlight the point that heart-share’ is what is needed in today’s market.
In the fight for space in Australia ‘s crowded market, the brand has become the distinguishing feature. Companies have always, of course, used brands to promote their products or services, with advertising extolling the characteristics of a product. But that formula is, it seems, no longer sufficient.
Functional advertising is no longer enough, especially for a new product, says Michael Graham, Managing Director of Landor, a marketing firm specialising in branding. Yes, there must be a rational and financial basis for someone to buy the product, but that must be balanced by an emotional component. The customer has to feel a personal connection. It’s a battle for hearts as well as minds.
There is some dispute among marketing professionals about how much heart share’ is in a successful brand, but most agree that using a brand successfully means that the company has to consider and perhaps reconsider what it is actually selling. The turnaround of the Land Rover marque of cars, for example, came with the realisation that what buyers associated with the brand was not the vehicle but the spirit of adventure. Similarly, Rolls-Royce sells status, Dunhill sells style, and cosmetics sell hope.
Graham notes that a good marketer needs to keep a close eye on changing consumer trends as well as developments in technology. He identifies the success of iPod as an example of the convergence of technological and social trends.
But a brand can’t turn a poor product into a successful one, he says. You can spend a lot on advertising and get a hike in sales, but it won’t endure if the product doesn’t have a clear competency. And you have to think about whether your marketing strategy is suitable for the product. Sometimes the answer is outside the traditional square.
One of the most successful new brands in Australia of the past few years is the Gloria Jean’s Coffees chain of coffee shops, which has grown to more than 230 stores. The chain began in Australia in 1996 but most of the growth has been in the past three years.
Interestingly, the brand began in the US , although there Gloria Jean’s Coffees stores mainly sold coffee beans and tea leaves, providing drinks only as samples. When Peter Irvine, now Managing Director of Gloria Jean’s Coffees in Australia , and his business partner saw it, they quickly realised that success lay in serving coffee by the cup. They acquired Australian and New Zealand rights to the brand and began building the chain through a franchise system. Some customisation to the Australian environment was required: a bow-tie that figures heavily in the US version of the brand was given less prominence, for example.
The real key was that Australians were becoming big drinkers of coffee, and they were ready to try gourmet varieties, Irvine told Management Today .
We connected to that market change, with an image of quality and comfort. We wanted to provide an experience associated with the act of drinking a good no, a great cup of coffee. Whether it’s take-away or in-store, that’s what we are selling.
Getting the brand into the market through a franchise system was an important part of the strategy. It has been remarkably successful, with market research showing unaided awareness of the brand at more than 70 per cent.
There is a point of critical mass, where, through the number of stores, the brand becomes automatically associated with the product, and becomes the market leader, says Irvine. I think we’ve hit that point in the Sydney market, and we’re approaching it in several other cities.
Maintaining the integrity of the brand is a high priority. Franchise agreements set out quality standards in detail, the design of the stores is centrally controlled, and franchisees are carefully screened.
The success of the campaign can be judged by the fact that the US Gloria Jean’s Coffees is now seeking to emulate the success of the Australian stores.
Another branding success story is Nudie, a company that has achieved, in the space of two years, high levels of penetration in the fruit and vegetable juice market. It utilises a cute character and highlights that no preservatives or chemicals are used.
The character represents fun, health and is a little quirky, explains James Ajaka, Marketing Director for Nudie. There isn’t anything else like it in the Australian juice market, which until now has been dominated by large companies that marketed on a functional basis. Tim Pethick, the founder of Nudie, saw the success of attitudinal brands in the US and UK and, since he is a huge fan of pure juice himself, saw a niche waiting to be filled.
The company has done little advertising in the conventional sense, basing its marketing on giveaways of the drink, appearances at events, and devices such as stickers and an inflatable balloon version of the Nudie character.
Our strategy has been to get the drink into as many hands as possible, Ajaka says. We recognised early that we had a powerful brand with a delightful product that people liked. The strategy was clear for us, and we are big believers that consumers direct the success of a product and that word-of-mouth is the best type of advertising. Obviously, that has worked, because our consumer base has extended well beyond one core group of people into every demographic group.
The company’s base of support was solid enough to enable Nudie to survive a fire that destroyed its offices and production facilities last year. It has also negotiated an access deal with the Coles Express chain, an important step, given the perishability of the product.
The company website, which uses the Nudie character as a navigational guide, has a high degree of interactivity, with customers able to suggest recipes for new drinks and post other comments.
Even the company’s telephone number spells 1800 Go-Nudie’.
We have always done things differently, says Ajaka. We have based our marketing on a dialogue with our customers, and that fits very well with the nature of the product. But it’s not just juice that we’re selling. We’re selling a delightful experience in the shape of a bottle of juice.
Australia ‘s top 10 best brands
- Telstra (2004 brand value $M 9300)
- CBA (2004 brand value $M 4000)
- Westpac (2004 brand value $M 3600)
- ANZ (2004 brand value $M 2900)
- Woolworths (2004 brand value $M 2500)
- NAB (2004 brand value $M 2400)
- Billabong (2004 brand value $M 1100)
- St.George (2004 brand value $M 1000)
- Macquarie Bank (2004 brand value $M 830)
- Qantas (2004 brand value $M 820)
Interbrand carries out its value assessment of Australian brands every two years.
The valuations of the top 10 in the table are for brands only and have no bearing on the market capitalisation of the company that owns them.
Interbrand values Australian companies’ brands using a valuation model that calculates value as the net present value of the earnings the brand is expected to earn in the future.
All the information that Interbrand uses for its valuations is publicly available, such as annual reports and other stockmarket information.
Only Australian-owned brands are included in the table. Source: BRW
Flight Centre re-brand
Flight Centre Limited’s Corporate Division last October took a step towards staking its claim as one of the world’s largest business travel brands when two of its key businesses in Australia Corporate Traveller and SBT Business Travel Solutions amalgamated to emerge under a new brand, FCm Travel Solutions. The Australian re-branding was the second in a global roll-out which kicked off in China in August and was followed by Hong Kong and South Africa in September and New Zealand and North America in November.
In January 2005 the ITG businesses (trading as TQ3) added to the FCm Travel Solutions stable in Australia and New Zealand , cementing the new brand as the first Asia-Pacific-based global travel management company and the largest corporate travel brand based in Australasia .
FCm Travel Solutions Global General Manager Anthony Grigson said as well as unifying its $1.5 billion-a-year group of corporate brands under the global FCm Travel Solutions initiative, the company was expanding FCm Travel Solutions globally by licensing the name to local operators overseas and, in some cases, strategic acquisition.
This is just the first phase of a business plan aimed at growing the corporate side of the Flight Centre Limited business to meet increasing demand for specialist and individualised services, he said.
Natalie Benson, General Manager of Marketing and Distribution, said the decision to rebrand consolidated the myriad brands largely acquired over the years and gave Flight Centre a real focus in the market place.
This was vital, she said, if we were to be serious as a corporate player particularly when we looked at our competition.
We needed a solid brand, a single brand that we could move forward with and also to assist in the company’s goal of being the world’s leading travel agent by 2008.