The Brand Balance:
By: Mark Shipley
|Mark Shipley is Chief Thinker at SMITH & JONES. Founded in 1985, SMITH & JONES is an integrated marketing communications agency specializing in emerging brands. The companyıs services include marketing, advertising public relations and interactive. SMITH & JONES has capitalized billings of $20 million. For more information, contact SMITH & JONES at www.emergingbrands.net or email email@example.com.|
What does a catalog for Williams Sonoma, a bottle of Vidal Sassoon shampoo and a cup of Dannon yogurt have in common? Each has a strong brand, a clear value proposition. Williams Sonoma - high-end kitchenware. Vidal Sassoon - designer style at a low price. Dannon yogurt - tasty, yet healthy.
But these companies are not successful because of branding alone. Their business model works and their branding supports that model. Far too often, however, emerging companies do it the other way around - jumping on the "brand wagon" first, hoping a strong brand will make up for weaknesses in their business model.
Take Amazon.com for instance. This dot.com catapulted on the e-commerce scene by branding itself as the company offering low-cost books with quick delivery. Its goal was to grow - big and fast. To encourage expansion, the company soon began selling everything from kitchen gadgets to lawn furniture. A business plan was virtually non-existent.
According to a recent New York Times article (May 21, 2000), the company is now refocusing and evaluating the reasons for its financial loss. "Fueled by big dreams and seemingly endless cash from investors, Amazon.com created an almost magical offering for consumers: Tap into a Web site and buy any book - and, later, music and lots of other merchandise as well - at a low price, with responsive service and quick shipment. What the company is finding, over and over, is what many skeptics have long contended: its magical offering is complicated, expensive and inefficient."
"Amazon did get big fast," notes the article. "It opened outposts in four countries. It expanded to become a general store...20 million customers bought $2.8 billion worth of merchandise...but it also lost $1.4 billion doing so." They built a very strong brand, and in doing so, lost 50 percent of their revenue.
As Amazon.com now attempts to create a business plan, will it's original branding support it's bottom line? One company insider included in the New York Times article notes that she worries that customers perspectives will change if the company offers many items that will not be available for quick delivery. This thinking goes against the company's branding and could very well affect its profitability.
Whatever the outcome, Amazon.com's challenge proves that mixing branding and business strategies/goals is not always an easy recipe to follow. Nevertheless, it is clearly demonstrates that branding in support of business goals is fundamental to success.
Cherry Britton, president of GET REAL Insight, an account planning consulting company in Portland, Ore., says that a company's brand should always be created based on a business plan and established goals. When Britton recently began working with a small financial software company, she held a half-day workshop during which she and her client explored the company's history, product and people.
"A brand is not only the company's character and personality, it's your structure. It's what everything else refers back to," comments Britton. "Branding should permeate the whole body of the company. It needs to be credible - something you can rely on again and again. The more long-term your thinking is, the more focused your message will be. The key is to be consistent over time."
Wes Spiker, partner of Spiker Communications, a full-service marketing communications agency in Missoula, Mont., agrees that consistency in branding is important. "You have to stay true to your brand. You need to be in it for the long run."
For more than 20 years, Spiker has worked with Rocky Mountain Log Homes, a company positioned at the higher end of the log home market. He explains that the company's brand (exclusive, high construction value, quality homes) carries throughout every aspect of its business, including the company's sales. Even if it means turning down potential customers. "They [Rocky Mountain Log Homes] only wish to work with people who want to build a log home within the year."
Britton says that in addition to a solid business model, a brand needs to filter through a company's entire business. " A brand is not a band-aid. Nor is it simply cosmetic. The face of a company is just the tip of the iceberg. It should be at every touch point of a company."
How do you find the right balance between your company's branding and business model? There is no cookie-cutter formula. Every company is different and has specific needs and goals. However, one aspect is clear. You must develop a business model and then brand to support that model. The brand will then be the essence of your entire business.
Amazon.com is learning this hard lesson. An avoidable lesson.
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