Greg Kitzmiller04.01.04
What’s In A Name?
It is important to develop a good brand to create value, especially in the nutraceuticals space.
By Greg Kitzmiller
What is the single most valuable asset most firms can own? A powerful brand! PepsiCo did not pay billions for Gatorade because it could not formulate a sports drink, but rather because of the value created in that brand. As Starbucks opens on other continents it is not because coffee shops don’t exist in Europe or China—the European Café is famous—but because the company is succeeding with a known brand that carries a unique promise.
To understand just how powerful brands are, one CEO at a large U.S. corporation when asked which scenario he would prefer—waking up to find out all of his manufacturing facilities had burned to the ground or losing the use of its brand name—he replied, “I can replace the facilities. I can’t easily rebuild brand value.”
What it Takes to Build a Brand
Technically a brand is a unique product from a specific company that is perceived as being better than competitive products and has a distinctive brand name, brand image and attached symbols. Just driving down a highway and spotting the large yellow “M” (also known as “the golden arches”) provokes a familiarity with a particular brand name fast-food restaurant—whether we value that brand or not is another story.
Is brand value limited to consumer products? No. Microsoft has huge revenue in business-to-business channels. In addition, no one needs a Microsoft product unless they own another device—a computer. Microsoft would have much less brand value if it was not bundled with most PCs. Intel is a business-to-business sale that has also branded itself with consumers and in the business channel. However, in the nutraceuticals arena, although ingredient suppliers may be known for high quality research and development assets, they have yet to become household names.
So how do we build a better brand? in the nutraceuticals market? With a proliferation of brands and new products bombarding the market regularly, brand building is not getting any easier for suppliers and manufacturers. In addition, most of the world’s most valuable brands have been around a long time—i.e., Coca-Cola, IBM, GE and even Microsoft.
Crucial to building a strong brand is determining key features that a customer cares about and that set the brand apart from the others. These features are called “brand drivers.” (Others have used the words brand promise.) Whatever these features are called, the point is to identify something a brand stands for that a customer might be passionate about, including descriptors such as “better quality” or “broader application.”
Brands should also carry some degree of emotional appeal. When I was in charge of Flintstones vitamins for children the brand had many attributes that mothers cared about—taste, up-to-date nutrients and fun shapes. The brand platform showing children healthily growing struck an important emotional chord with mothers of young children. It was often the smile of a mom in focus groups and the empathy of the mother with children in commercials that seemed to drive their association with this brand. They trusted that the science was there and perceived that this was a brand that cared about kids.
Too few firms spend the time to evaluate what drives a brand and makes it different. In the nutraceuticals arena, companies are slapping brand names on products without much thought as to the relevance of that brand name or its association with key brand drivers. If a brand is to evoke both emotional and practical relevance, such as Tide does for detergent, it is best if the name is different from the others (For example, Unilever does not use the “Surf” name in the U.S., which is similar to P&G’s market leader, Tide).
Good consumer packaged goods marketers spend money and time differentiating their product, making it relevant and making sure the appeal is somehow different from similar products. P&G in particular understands that it has many products in diverse markets. As such, it has carefully branded products differently to appeal to different users. Unilever does the same.
Brands must also be current with an eye toward the future. As the U.S. evolved to a quick-paced society, where everyone aged 25-45 works outside the home, certain brands offering convenience from fast food brands to meals-in-a-minute prospered. In the same vein, multivitamins offered health assurance in the context of a busy life. However, as the U.S. focuses on obesity and sets wellness goals, some of the brands built on comfort and convenience may fall by the wayside. Brands must be relevant for today AND tomorrow.
In the past, firms relied on trial and error to determine brand drivers. However, if a brand takes a misstep, it can lose value. Today, research is important in building brands and their value. Understanding brand attributes can only be done with customer input and analysis of the resulting data. Many large consumer brand firms know exactly the value of each piece of each brand. This is not an easy process but it can certainly be a rewarding one when additional sales are attained or, perhaps more important, lost sales are prevented.
Summary
The skills required for strong branding are lacking in some nutraceutical products. Combining consumer research with a sense of vision and discipline to generate a long-standing promise to consumers is not easy. Making sure that a product brand name is unique and holds a special place in the hearts and minds of consumers requires strong planning skills and slavish direction. In the end, it may make the difference between real company value vs. proliferation of rather meaningless products. Good brands add value.NW