The Major Problem of Minor Brands

Every other mail delivery seems to include the promise of seminars, how-to books, and scholarly journals (complete with nifty graphs) on New Product Development. How to do it. How to plan to do it. How to set up a task force to form a steering committee to do a feasibility study to think about implementing a plan to do it. You’d think developing the New was the prime directive and lifeblood of every commercial enterprise.

We have, we admit, added our voice to the chorus, albeit one with different lyrics, sung to the rhythm of a different drummer. Clients who utilize our Brand Asset Management approach, we believe, can strategically direct and systematically energize new product development so that the success/failure ratio, the batting average, will rise. Our asset-based perspective forces clients, and everyone else involved, to think in new ways, from new perspectives. In the course of the effort, new questions are raised, new approaches are developed, and everybody’s assumptions are challenged.

But back to our regular programming.

No matter what methodology a company uses to create new products, how they staff for it, how they create environments conducive to creativity, two realities come back to haunt them … the batting average will be disappointing, or it will cost a small fortune for research and development, or both. The final indignity for some is that after they bring some ill-advised package goods duds to market, shortly after paying slotting fees to place the new babies in the store, they have to pay funeral expenses to clear out the unsold inventory to maintain retailer good will.

One promising way to break out of this unprofitable cycle is to take the word "new" out of the equation. If you accept that the goal of the new product development process is to create brands which generate sales, which in turn increase overall corporate profits, then you may be able to reach the same goal by a lower-risk, more conservative approach.

You will find, within the portfolio of every major brandholder, a number of Ugly Ducklings.

“Ugly Ducklings” include old brands allegedly on their last legs; brands with a loyal but shrinking consumer following; unglamorous cash cows assigned to the brand manager who once did something Very Bad at a Christmas Party; brands that built the company before anyone remembers how; modest-volume brands which have had the profit bled out of them by accountant-vampires using punitive corporate overhead formulas; beasts that never quite broke out of the pack; brands proclaimed “small” by self-proclaimed “big” ad agencies whose creative hotshots won’t lower themselves to work on; orphans that sit at the bottom of the quarterly report lumped together as “all other”.

Ugly, naturally, is in the eye of the beholder.

To some group of consumers, it is not “all other.” It’s a brand. The brand they buy. You may think of it as a footnote; they think of it as their first choice.

It is often … repeat, often … profitable to rummage through the corporate attic, to discover the next overnight success that took fifty years to get to Broadway.

New product development tries to create brand equity from a blank sheet of paper. But it can frequently be more rewarding to start with a sheet already written on, with a hidden message you can decode for a relatively small investment.

Instead of New Product Development, let’s explore Brand Redevelopment.

Begin with the creation of a Brand Re-Development Team, just as you would create a new products team, drawing on talents from many organizational areas. For as many participants as practical, make this their sole responsibility. Look for the free spirits, the can-do types, the renegades, the rule-breakers.

Look for creativity, not skill at making digits dance, because you are not going to ask them to crunch any numbers other than to keep a strict accounting of their development budget. That’s right. Give them money, send them away to work some magic, and don’t worry about payout schedules, per case profits and the like until later on. Look at it this way: if you’re like most marketers, you already invest in 33-to-1 longshots, spending money in hopes of creating brands out of thin air. Why not try a more prudent investment, deploying some of that capital against brands that are already brands? A little tattered, maybe, a little long in the tooth, but brands nonetheless. (Neither you nor we, of course, decide if it’s a brand. Consumers do.)

To lead the team, observe one cardinal rule: no conventional brand managers. Instead, look for an energetic loose-cannon manager from creative or marketing services, or a street-wise peddler from sales, or an actress, or a bomb-throwing anarchist.

We’re semi-serious about that. The natural tendency for a conventional brand manager, carefully trained to watch the numbers, is to, well, watch the numbers. Brand Re-Development Teams need to be less influenced by Generally Accepted Accounting Practices and more by creativity.

The key to the Brand Re-Development process, we believe, is to embrace the Brand Asset Management approach, to master the Asset Audit.

In our recent Toolbox white paper, we conducted the nickel tour of a sample audit. The Brand Re-Development Team has to do it for real, and from every different point of view. They should examine which assets are non-performing, which are moving along at half speed, and which are sustaining the patient. If you notice a friendly disagreement or two, some consensus, and an occasional spirited debate, you will know the process is working.

Next, they’ll audit the brand’s competitors, asking questions like: What do they have going for them? In what ways do they out-perform us? What barriers exist to keep us from closing those gaps? What barriers to entry will keep them, or others, from matching our changes? How can we deploy our assets to increase our advantages … or to diminish competitors’ assets to gain competitive advantage?

With current asset audits in hand (don’t be tempted to call them “complete”), you can begin to tinker, to play what-if with everything that contributes to the brand. Take what works and make it work better. Take what’s comatose and breathe life into it. Create new packages, enhance performance, develop an ad campaign to reposition the brand, find new audiences, new uses, new channels of distribution, new price positions, new sizes, new flavors, rebuild the carburetor and rotate the tires.

Then the team can research the new asset deployment, expose the changes to consumers in old and new target segments, rework the assets, show the results to consumers again … all before you turn the number crunchers loose to try to quantify the outcome.

Try to retain a high level of optimism on your Brand Re-Development Team, because naysayers are around every corner, ready to pee on your campfire. They know that Ugly Duckling brands got to be that way for a reason: they know free market forces made these unworthy minor brands into Darwinian Losers, naturally selected for extinction, holding on by their fingernails only because squeamish corporate types won’t pull the plug. They know that sleepy little cash cows should be left alone, never to deflect investment money from their flashier brands, or new product ventures. (After all, they’ve studied Product Life Cycles, that creaky old myth, and know that boring old products must be ready for the nursing home of retired concepts.)

But you know a chance to re-energize a brand when you see it. And you won’t be starting from the same point as you would be if this were a blank-sheet-of-paper new product. The brand may already be paying its way, perhaps in a modest fashion, but generating revenue nevertheless. There is Brand Equity to expand and exploit and refresh, and that’s money in the bank.

It’s easy to see how putting Arm & Hammer Baking Soda in the refrigerator, to choose an obvious example, enhanced Arm & Hammer.

But it’s equally true that the existing equity in the brand made the refrigerator claim credible. Joe’s Baking Soda, created from a blank sheet of paper, would have failed.

Finally, let the Team manage the change. They possess the vision and can bring it to reality. After all, why would you want to hand the brand back to the folks that told you it was dead, dying or hopeless in the first place?

If this all sounds like blue sky, how many times have you heard of a brand or small division, sold off to an investor or management group, take off to new heights? There are two basic reasons why.

First, the brand, cut free from a decaying corporate infrastructure, no longer contributes profit to prop up other brands and no longer gets charged a huge overhead that supports, for ironic example, new product failures. Second, the brand’s new parents are driven to make it succeed. It isn’t an Ugly Duckling to them … if it doesn’t start to move, they don’t get to pass Go on their way to bankruptcy court. That incentive forces them to reinvent the brand’s asset mix … often reinventing the parent company along the way.

For some, that reinvention of the company is the real benefit of the Brand Re-Development process. Entire marketing departments, entire corporate structures are reinventing themselves through the Brand Asset approach. They have abandoned the marketing plan in favor of Brand Equity Planning.

They are breaking down monolithic corporate structures into smaller entrepreneurial units, and one important by-product is the discovery that Ugly Duckling brands can be re-energized into profitable, even exciting, Swans.

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