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New Brand Extension: Martha Stewart Jailhouse Chili

By: Robert Passikoff

Robert Passikoff is founder of Brand Keys Inc. (New York) a brand and customer loyalty consultancy. He can be reached at 212-532-6028, x12, or

Before dissecting the effects of the newest revelations regarding Martha Stewart’s stock trade transgressions, let’s get the jokes out of the way. There’s a new magazine at your newsstand: Martha Stewart Living in a Cell. The new issue’s cover stories: “Redecorating For a Cozier Cell;” “Laundry Room Challenge: Removing Pesky Bloodstains;” “Dressing for Visitors: Basic Stripes – or Tangerine Jump Suit?” Visit the new web site: martha.con. Feel free to add your own – more than one standup comedian will get a good twenty minutes out of Martha Stewart’s continuing fall from grace.

But there are telltale repercussions out in the real world. Scene: WalMart parking lot in suburban New Jersey. Man in a tee shirt. The front reads “Save Martha Stewart.” On the back: “Ha ha ha ha!” When issues like this make their way from the news media to late night comedy monologues, then out into the mainstream of everyday life, there is obviously a lesson to be learned. And this time the lesson is not about Martha Stewart’s guilt or innocence. It’s about Martha Stewart, the brand.

L’affaire Stewart is a perfect example of the fragility of all brands that are invested mainly in a human being. Entertainers, sports personalities, politicians and other public figures are all brands. We often see how impermanent their brands can be, how dependent upon public whim; how sudden and irreversible their disappearance can be. (Consider O.J. Simpson, Gary Hart, Michael Jackson) Any sudden change in public perception of that “human brand” has an immediate – and potentially devastating – effect on the brand’s equity, and soon after, its profitability.

That’s because any brand – and what it stands for – is based on the customer values inherent in the brand. Invariably the really important, lasting values turn out to be not image items, but customer loyalty values. They are usually the leading indicator values that built the brand’s success in the first place. Whether it’s a giant oil company, an international business conglomerate or a Perfect Woman Doing Perfect Things, a brand’s life force flows directly from the core values its customers hold dear.

More often than not, these values are not “sexy.” They are not the lip-service adjectives that trip so lightly from the lips of admen. They are not even the usual list of image items that appear on traditional tracking studies. In her glory years, even Martha Stewart’s detractors had to agree that she (the brand) was “chic” or “creative” or “elegant” or even “a style I would like to see in my home” given the environment and the available competitive set. But in harsher, warier times, and under the baleful eye of the SEC, the broadcast media and the press, image items tend to count for very little.

In today’s economy, brand survival and profitability is more and more reliant upon customer loyalty values. Image is the raw clay from which advertising – even a personality— is carved. But if that image, that personality is not imbued with real values that truly resonate with the customers, it is unlikely the brand will survive jokes around the water cooler, let alone t-shirts that mock the “brand.”

The difficulty is this: non-imagery values usually get examined only in retrospect, once the subpoena has been served. And even then it’s a rush to discover which of these values the PR folks should spin and the advertising should address. Adding to the complexity of measuring a brand that is invested mainly in a human being is not only the question of which value should be addressed, but whether the public and your customer base will actually believe what you are going to say about the brand.

These are the kinds of values we regularly track and monitor for our clients. Oh, we track the image items too. But in today’s marketplace most brands find it increasingly more difficult to differentiate themselves via imagery alone. That’s because the “image” percent-of-contribution to loyalty has shriveled up. Successful companies need to know which customer value items will sustain better during difficult times. (Just ask Tylenol.) Companies not only need to know not only which items to address, they also need to know the direction and the velocity of such values. They need to how each contributes to brand profitability, how they need to be managed – and in what order. Or, in fact, whether they can be managed at all given the circumstances and the brand.

The really meaningful values always turn out to be ones like “trust” and “confidence,” whereas the ones many ad agencies seem to deal with are frothy “values” such as “tone” and whether the ad should show a sunrise in New York or a sunset in San Francisco.

Let’s take a value example relevant to the Stewart case: Maintaining ethical business standards. This value is currently in the spotlight, suddenly a more crucial loyalty value than it was mere months ago. In fact, back in 1997, “ethical business standards” contributed only about 8% to loyalty. In recent months that figure has more than doubled, to a 20% contribution. Another value: A brand I trust – a perennial favorite – always hovered around a 5% contribution to loyalty (and therefore, profitability). That’s now up to a 11% contribution. Integrity? Up from 2% to a 6% contribution. There are other “hard” values at work as well. But just removing that 37% from the brand equation leaves an awful lot of shoring up for relatively less important image items like “cultivated” or “elegant” to do!

For many years, brands that were invested in a single person and were legitimately seen to be “elegant” or “creative” or “having a wide range of colors and patterns to fit my home” were anchored in values like “trust,” “integrity,” and in many cases real “ethics.” Not any more! Values have shifted dramatically. Now brands have to work to earn those values. Those values have to be identified, assessed, tracked, and monitored, and – most importantly – cared for as much as any image item, like “innovation.”

Martha Stewart Living Omnimedia announced that the company she heads is searching for someone to succeed her as chief executive. Apparently Martha’s going to be taking some time off to make some guest appearances on Oz. Sorry, I couldn’t resist!

But it just goes to show that if you don’t know where your brand’s core customer values lie, you risk losing everything – your brand, your customers, and your profits. What’s worse, your brand may be worth no more than the tee shirt your brand joke is printed on!

© copyright, Robert Passikoff, Brand Keys Inc., 2002

The author assumes full responsibility for the contents of this article and retains all of its property rights. MarcommWise publishes it here with the permission of the author. MarcomWise assumes no responsibility for the article's contents.


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