Are Step-Down Line Extensions a Good Idea?
A brand extension in its simplest form is a strategy in which a well-established brand name is extended to a new product in a different product category. Sometimes brand extensions work, and sometimes they don’t, but for the purpose of this post we’re going to look at a specific niche of brand extensions: step-down line extensions (also called downscale extensions) for luxury brands.
A step-down line extension is when a brand introduces a new product that is perceived to be or marketed as lower quality than other products it currently sells. Implementing a strategy like this has clear pros and cons. The pros of step-down line extensions very heavily favor financial and awareness growth, but on the flipside, the cons most revolve around diluting the brand's equity and reputation.
More and more brands are testing out this strategy. From Polo Ralph Lauren, Armani and most recently Whole Foods, brands are constantly trying to redefine messages and come up with new ways to reach customers and step-down line extensions is one of those ways. While I tend to see more merit in why you shouldn’t introduce a step-down line extension, the strategy isn’t completely flawed.
Luxury brands have an interesting dilemma when it comes to their brands and profitability. Even though there is a strong desire for their brands and each product has a high margin, purchasing happens in low volumes. Maintaining a healthy cash flow into the brand can be tough. By departing from a strictly luxury market, luxury brands are given the ability to grow more quickly and reach certain financial goals. Stretching past luxury markets builds mass-market awareness, expands advertising opportunities, and ultimately gets the brand/products into the hands of more consumers, and, in turn, creates steady revenue for the brand.
Steady revenue, sounds great doesn’t it? But, from a branding perspective, is it really that great for a luxury brand to introduce a step-down line extension?
When a luxury brand introduces a lower quality product, the brand is doing so at great risk to the equity of its original brand. The greatest risk, of course, is the chance that the luxury brand will lose its status by being associated to the new product, therefore changing the course of the brand altogether. Consumers who once trusted the quality of a brand may change their opinion if they feel the luxury brand is no longer highly focused on making the best version of a product, but rather spreading itself thin by introducing additional products. Aside from the quality of a luxury brand, the worst thing it could lose is its own exclusivity, or the very thing that made it desirable in the first place. To maintain control of where the brand is sold, requires a lot of effort, but is time well spent if it prevents dilution to the brand’s value.
The debate that a step-down line extension brings up is, what’s more important: generating a healthy, steady revenue stream or maintaining the value, meaning and promise of your brand? The side you’ll take can probably be answered by asking one question – when you first started your company/brand, were you hoping to reach a mass market or did you seek to create a high-end, best-in-class product that has a more of an exclusive audience?
Brands We Love: Chipotle
I. love. Chipotle. There, I said it. And no, I’m not referring to the pepper, but the mouth-wateringly delicious Mexican grill.
The best part is, it goes beyond the food. I love the cheekiness of Chipotle’s brand, but the fact that it’s mixed with a “Food With Integrity” mission, I have become the most loyal of brand advocates.
But first, a little history: In 1993, Chipotle was founded by Steve Ellis in Colorado. Ells and his father calculated that the store would need to sell 107 burritos per day to be profitable. After one month, the original restaurant was selling over 1,000 burritos a day.
Chipotle’s menu consists of four simple options: burritos, burrito bowls, tacos and salads. And, four types of protein: chicken, pork carnitas, barbacoa (spicy, shredded beef) or steak (and of course, customers have the ability to make a vegetarian option as well).
Why such a limited menu? Steve Ells has said, “[I]t's important to keep the menu focused, because if you just do a few things, you can ensure that you do them better than anybody else.”
Well put. So, what about the brand?
First and foremost, a little more info on Chipotle’s “Food With Integrity” mission.
Food With Integrity is our commitment to finding the very best ingredients raised with respect for the animals, the environment and the farmers. It means serving the very best sustainably raised food possible with an eye to great taste, great nutrition and great value.
It means that we support and sustain family farmers who respect the land and the animals in their care. It means that whenever possible we use meat from animals raised without the use of antibiotics or added hormones. And it means that we source organic and local produce when practical. And that we use dairy from cows raised without the use of synthetic hormones.
Food With Integrity is a journey that started more than a decade ago and one that will never end.
Quite a bold statement for a fast,casual dining chain.
And then there’s the physical branding. The packaging is irreverent and hilarious. The cups and bags tell a story, providing a little entertainment while you nosh on your burrito.
And, for the design nerds out there, you’ll find “Lorem ipsum” placeholder text on the larger carryout bags. (Huge props go out to Sequence, the creative development agency responsible for Chipotle’s quirky brand executions.)
In 2011, Chipotle released a short film entitled, “Back to the Start.” The film, by film-maker Johnny Kelly, depicts the life of a farmer as he slowly turns his family farm into an industrial animal factory before seeing the errors of his ways and opting for a more sustainable future. Both the film and the soundtrack were commissioned by Chipotle to emphasize the importance of developing a sustainable food system.
The video reached more than four million views on YouTube when it aired, in its entirety (2 minutes and 20 seconds), during the 2012 Grammy Awards. At present, the video has a whopping 7.3 million views.
Chipotle has even launched a free, all-day food and music festival called Cultivate. Last year’s event in Chicago, paired chefs such as Amanda Freitag and Jonathan Waxman with local farmers for cooking demos, while CAA Marketing helped line up bands like Calexico to headline. As festivalgoers roamed through the entertainment, they discovered tents that informed them about shocking but common industrial-farming practices. This year, Cultivate will return to Chicago, but is also expanding, with events in San Francisco and Denver.
And the momentum continues…Last year, Chipotle ranked 34th on Fast Company’s list of The World’s 50 Most Innovative Companies. Why? “For exploding all the rules of fast food.” So, thank you, Chipotle, for continuing to innovate and push us out of our fast food comfort zone. I am genuinely excited to see what’s in store (and am now, of course, craving a burrito bowl with chips and guac).
Sources
“Feeding frenzy,” Rocky Mountain News, Janet Forgrieve, Feb. 18, 2006
“Chipotle: Fast Food with Integrity,” Businessweek, https://goo.gl/l73fN
“Food With Integrity,” Chipotle.com, https://goo.gl/5SP20
“The World’s 50 Most Innovative Companies,” Fast Company, Danielle Saks, https://goo.gl/7H771
Brands We Love: Kia
Earlier this week while I was perusing Twitter, I noticed a large number of tweets surrounding an unlikely brand, Kia, and being a strong advocate of the brand, I was immediately intrigued. Though I hold it close to my heart and tell anybody who wants to listen how much I love Kia, I also know it’s typically not a highly talked about brand. So as you can imagine, I began to investigate the reason why. As it turns out, Kia made its debut this week on Interbrand’s 2013 Best Global Green Brands, which is Interbrand’s nod to the top ethical and ecologically responsible brands.
My affinity for the Kia brand began seven years ago, when I bought my Kia Sorento. Kia was in the process of repositioning itself in the American market from a not-so-glamorous automaker to a polished, design savvy one, all while still being an affordable option for American drivers. I’d like to think I was ahead of the curve when it came to Kia, but as it turns out I was fully falling into its plan of becoming a well-recognized and respected brand in America, and I don’t mind that one bit.
Instead of listing all the reasons why I love the Kia brand (and trust me, there are a lot), let’s take a look back at the brand’s history and how it has become one of the most valuable brands.
Kia’s storied past
Kia, South Korea's oldest car company, was founded on June 9, 1944 as a manufacturer of steel tubing and bicycle parts. In 1951, Kia switched gears a bit (pun intended) and began building complete bicycles. In 1952, Kia changed its name from Kyungsung Precision Industry and later built motorcycles (starting in 1957), trucks (1962) and cars (1974).
It wasn’t until 1992, that Kia Motors America was incorporated in the United States. Kia began sales operations in Portland, Oregon at four dealerships. Since then, Kia has expanded methodically, one region at a time. Fast forward to 2013, and Kia is the fourth largest automotive group in the world.
The Kia brand
When I began researching the Kia brand a bit more for this blog post, I was extremely happy to see that Kia’s website outlines its corporate identity.
One of the most fascinating aspects of the brand is its name, Kia. Without knowing when the name was chosen, its fascinating to see how the company’s success has mirrored the meaning of its name .
According to Kia’s website, the word Kia is derived from the Chinese letter “Ki,” meaning to “arise or come out of” and “a,” referring to Asia. When the two words come together Kia means to “arise or come out up out of Asia.”
Kia has emerged as one of the fastest-growing automobile brands, and it doesn’t appear to be slowing down anytime soon. The brand’s success has been attributed to its connection with millennials and Gen Y audiences by promoting uses of technology and connectivity that appeal to younger audiences. As a strong advocate for the Kia brand and self-proclaimed Kia driver for life, I’m excited to see how it responds to its growing popularity.
Sources:
Kia Corporate Website
Kia Motors enters Interbrand’s list of 50 best global green brands 2013
Refining the Hyundai-Kia brand plan
The Latest Apple Buzz
WWDC.
Worldwide Developers Conference.
Why in the world would I care about a developer’s conference if I’m not a developer?
Well, did I mention that it’s Apple’s Worldwide Developers Conference? And that the keynote address was yesterday? And they unveiled yet another major operating system improvement (among other things)?
Okay, I've gotten ahead of myself: first, a little background on the WWDC. The Apple Worldwide Developers Conference (WWDC) gives developers an in-depth look at the latest in iOS and OS X. Developers can learn from and be inspired by more than 100 sessions led by Apple engineers, get help from Apple experts through an extensive set of hands-on labs, and connect with fellow developers from around the world, giving them the opportunity to create the best apps ever. The first WWDC is debatable – some say it was in 1983, others say it was later – but regardless of its origins, the WWDC has evolved into a buzz-worthy, tech-focused event.
And, you don’t have to be an Apple fanboy to appreciate it. A coworker and I tuned in to yesterday’s keynote while working on a project- we were most curious about the latest iOS, and what it would mean for our iPhones and iPads. Sure enough, and hour or so into the keynote, iOS 7 was unveiled.
Talk about building Apple’s brand.
At first, we were frustrated; after all, it took 76 minutes and 13 seconds to talk about an operating system used by so many more than Apple’s laptops and desktops. And, to be honest, we had our preconceptions. Both of us had done a little background research before watching. Rumors swirled around Apple’s iconography and color palette and we both were skeptical. No one likes change, and what we were reading was putting us off.
But, in true Apple fashion, we were wooed. The videos, the demos, the absolutely unbelievable attention to detail. By the end of the keynote, we were dying to know what devices would be able to upgrade, and most importantly, when.
There’s absolutely no doubt that the world misses Steve Jobs. There was something so poetic about him being on that stage- his passion, his excitement, his intellect, his charisma. And, there are some noticeable differences in Apple since his death – inconsistencies, a few branding missteps and a little less mojo.
But, most of us are still fascinated- curious about what’s to come and ready to be awed. Sure, we might notice the missteps and of course, we miss Steve, but also we know that Apple was and is his heart and soul, and the brand is strong because of the legacy of his passion.
In the end, Apple is a fantastic example of a brand that continues to evolve and grow, despite naysayers and challenges. The company captures our collective imagination and builds a technological world that pushes us forward.
So, just because I’m feeling nostalgic, the essence of Apple can still be best summed up in a famous narration from an old ad:
“Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules and they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them, because they change things. They push the human race forward, and while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think that they can change the world, are the ones who do.”
[Listen to Steve narrate the ad here. Fun fact: the original narration was Richard Dreyfuss.]
Anyway, I’m giddy about updating my iPhone to iOS 7 in the fall, and even more so, I can’t wait to see what’s next. Feel like watching yesterday’s keynote? Check it out here.
Sources
“WWDC in detail.” Developer.Apple.com, https://goo.gl/MpJbe.
Netflix vs. Hulu vs. Amazon- A Streaming Showdown
Remember when you were limited to watching what was live on television? And the most you could record was on your VCR? Forget on-demand; you had to be home at a certain time if you wanted to catch a favorite show. Renting movies meant driving to your local Blockbuster or Hollywood Video, and even then, they didn’t always have what you were looking for.
Enter, Netflix: the first on the block to revolutionize the movie rental industry, followed years later by the likes of Hulu and Amazon Instant Video. These services have changed the game in both the movie and television industries, and watching their brands as they grow and evolve continues to be an interesting study in brand strategy.
Let’s take a closer look at each service, from its brand to the nitty-gritty details.
Netflix
Netflix was established in 1997 and started its subscription-based digital distribution service in 1999. By February 2007, Netflix announced its billionth DVD delivery and, as of April 2013, has 36.3 million subscribers worldwide, including 29.2 million U.S. subscribers. Subscriptions start at $7.99/month.
Netflix has built a strong brand history, with one infamous exception of Qwikster. In 2011, Netflix announced it was basically splitting in two: the new brand, Qwikster, would be the DVD-by-mail service, and the Netflix brand would be dedicated to streaming services only. Two brands, two bills, two websites = big headache. And the reaction from Netflix subscribers was acute. A few months later, they abandoned the Qwikster plan.
But, Netflix learned from its mistake and has spent the past two years growing its business for customers around the world, including the introduction of original programming.
Amazon Instant Video
This service started in 2006 as Amazon Unbox, became Amazon Video on Demand in 2008, and has since evolved into Amazon Instant Video with an estimated 10 million subscribers. What’s unique about this service is, it’s a perk of an Amazon Prime membership. For $79/year, customers get free two-day shipping on Amazon.com orders, access to Amazon Instant Video and a free Kindle book to borrow each month from a lending library.
There is an obvious amount of equity in the Amazon name, and it seems like Amazon’s strategy is to continue to build on its master brand.
Hulu Plus
Hulu was founded in 2007 as a subscription service offering TV shows, movies, webisodes and other new media from NBC, Fox, ABC, TBS and other networks and studios. As of April 2013, Hulu has an estimated 4 million users and subscriptions are $7.99/month.
The name and brand are very intentional, as Jason Kilar, Hulu’s CEO explains:
“In Mandarin, Hulu has two interesting meanings, each highly relevant to our mission. The primary meaning interested us because it is used in an ancient Chinese proverb that describes the Hulu as the holder of precious things. It literally translates to “gourd,” and in ancient times, the Hulu was hollowed out and used to hold precious things. The secondary meaning is “interactive recording.” We saw both definitions as appropriate bookends and highly relevant to the mission of Hulu.”
So, Who Wins?
There’s no short answer to this as each offers something a little different from the other.
Netflix wins for its massive library of movies and TV. But, it also wins for original content. House of Cards, featuring Kevin Spacey, and the return of Arrested Development have pushed Netflix ahead in this space.
Hulu wins from a TV perspective offering the most recent episodes of shows the fastest.
And Amazon wins for price and perks. It’s the least expensive of the three and who doesn’t love two-day shipping?
But who wins from a branding perspective? Netflix. Hands down. While we commend Hulu’s efforts, it’s got a long way to go, and Amazon Instant Video feels more like a perk of Prime than a stand-alone service.
That said, consumers ultimately win because all three offer a wide variety of viewing options and each service’s extensive device support satisfies our need for on-the-go options. Happy viewing!
Sources
“5 of the Best Streaming Media Services Compared,” Mashable.com, Christina Warren, https://goo.gl/FU4pp
“By The Numbers: Netflix subscribers,” Yahoo! News, AP, https://goo.gl/UV2EY
“Hulu Says Number of Paid Subscribers Has Doubled,” NewYorkTimes.com, Brian Stelter, https://goo.gl/YJJJF
“Amazon Has An Estimated 10 Million Members For Its Surprisingly Profitable Prime Club,” BusinessInsider.com, Owen Thomas, https://goo.gl/dXRNM
“What’s in a name?,” Hulu.com, Jason Kilar, https://goo.gl/g0phQ
Branding Pharmaceutical Drugs in China
Did you know according to the Chinese Association for Pharmaceutical Equipment group that the Chinese pharmaceutical industry has been growing at an average annual rate of 16.72% over the last few decades?
And that growth isn’t going to slow down anytime soon.
China stands at the cusp of a modern society with an increasingly affluent and growing population. And it’s this growing population that is demanding better services and quality of life – but how will this impact the pharmaceutical industry in China – particularly in regards to branded pharmaceutical drugs?
Not just in the pharmaceutical industry, but for all industries across the board, China has become the must win market. An aging population, increasingly affluent younger population, and the rise of diseases in China all create an emerging need for drugs, which is why The IMS Institute has predicted that by 2016 China will overtake Japan as the second largest pharmaceutical market in the world. So it’s no wonder why billions of dollars a year are being invested in the country.
Many foreign players such as AstraZeneca, Pfizer, Bayer and GSKhave already established themselves firmly in the market and are expanding their services regularly within the country. But with the entry of foreign players in the industry, the competition amongst these players will continue to increase. China has more than 5,000 pharma companies, and in 2010 was the leading country filing pharmaceutical trademarks – even beating out the United States, one of the most mature pharmaceutical markets by nearly 10,000 trademarks filed. Even though China is the global leader filing pharmaceutical trademarks, the majority of the drugs manufactured in China are generic. But as China’s consumer mindset continues to mature and grow, so will the branded pharmaceutical sector.
Why the continued growth?
Specifically for pharmaceuticals, powerful product brand names are important tools to offset competitive pressure from generics and to build customer loyalty. Though heavily regulated by state legislations, in China’s case the SFDA, brand naming for pharmaceutical products is unique, and can greatly affect marketing decisions.
In highly competitive environments, a strong brand will rise above the clutter and demand attention. With a strong brand, you secure a unique position of credibility in the consumer mind, have more influence on your market and motivate customers to purchase from you.
From a marketing perspective, brand naming for a pharmaceutical product may take into consideration aspects such as the chemical/biological nature of its active ingredient, composition/formulation, therapeutic indication, associated medical condition, benefit and adherence to the corporate identity.
From a communication point of view, pharmaceutical branding specialists must decide whether to focus on the functionality or the end-user benefits. It is also from the same angle that pharmaceutical naming is usually considered of great complexity, as most of the time, both audiences should be targeted.
Chinese regulations on pharmaceutical drug naming frown upon utilization of characters that are either indicative of curative effect, intended use, target audience or may imply efficacy.
Regardless of the market you’re in, developing a strong pharmaceutical name is tough, but in China it can be particularly challenging. You must keep in mind translations, the use of characters and regulatory conditions. Biological and pharmaceutical products rely heavily on the protection of intellectual property rights, so it’s essential for foreign companies to gain thorough understanding of China’s IPR protection system before entering the market.
Multinational companies have greatly expanded their businesses in China over the years and have aligned with local pharmaceutical companies, which has proven to be a winning strategy for both parties. And as these companies and other foreign players continue to expand their footprint in China, competition will become fierce as each seeks to penetrate the market. Pricing, intricate knowledge of regional markets and developing strong brands will determine who gets ahead and who doesn’t.
Back The Buzz
Back the Buzz
By Meara Lyons
It’s remarkable how sports can bring people together. People from all walks of life find community in sporting events and teams. What becomes even more fascinating is when a team evolves because of its fans and the resulting atmosphere is utterly electric.
What does this have to do with branding? Well, Charlotte, North Carolina has an NBA team – the Bobcats – and they’re going back to their roots. Last week, Bobcats’ owner Michael Jordan announced the NBA franchise’s decision to return to its original name, The Charlotte Hornets. Sure, there’s still some politics left to sort through (the NBA board of governors will officially vote on the name change in July), but you can already feel the excitement in Charlotte.
Hornets History
In 1985, the NBA planned to expand by four teams. George Shinn, an entrepreneur from Kannapolis, a city just north of Charlotte, wanted to bring a team to the area, so he assembled a group of local businessmen to head the franchise. North Carolina was steeped in college basketball (Duke, UNC-Chapel Hill, Wake Forest, NC State), so the leap to an NBA team was a natural one.
So, the team was born, and introduced with a name that had historical roots to the area. During the Revolutionary War, Lord Cornwallis, a leading British General, called the fighters in the Charlotte area a “veritable nest of hornets.”
Here’s some insight from an NBC Sports writer who lived in Charlotte during the Hornets heyday:
“You simply cannot overstate how deeply in love Charlotte was with the Hornets that first year and for a long while after that. The New Charlotte Coliseum sold out every game. Marginal players like Tim Kempton became Charlotte superstars. Everybody wanted to shoot like Dell Curry. Everybody wanted to gun like Kelly Tripucka. Everyone wanted to pester like Muggsy Bogues. Kurt Rambis was on that first team. Earl Cureton. Robert Reid. Every time the Celtics or Knicks or, especially, Los Angeles Lakers came to town, we felt like the world had finally discovered us. We had a real live NBA team — a terrible one, yes, but the team’s general awfulness did not dampen the spirit one bit. Losses were beside the point. Victories were like little daily miracles. Hey look: That’s Larry Bird!”*
In 2002, the Hornets played their last game in the Queen City – or so everyone thought – and the team moved to New Orleans. Even though the Hornets played in New Orleans from 2003-2013, the defunct Charlotte Hornets remained popular in its native city.
Back the Buzz
Three years ago, John Morgan, a local elementary art teacher, started a Facebook campaign called “We Beelieve,” and began gathering signatures to support his cause. Soon after, brothers Scotty and Evan Kent joined in the effort and created a website called, “Bring Back the Buzz.”
Earlier this year, the “Bring Back the Buzz” campaign hit a break when the New Orleans Hornets announced their own name change – to the Pelicans – thus freeing up the Hornets name for Jordan to pursue.
Flash forward to last Tuesday when Jordan announced the good news and reminisced a bit: “When I first played here years ago, the thing I was totally astounded by was the energy. I wanted to bring that energy back.”
The rebranding process should take about 18 months and an estimated $4 million, which includes an extensive repainting of the Time Warner Cable Arena as well as some loss of merchandise revenue as the team liquidates its current stock.
Nostalgic Charlotteans have already started to bring out their throwback Hornets shirts and hats – wearing the merchandise with pride, excitement and support for the switch.
The Bottom Line
We’re not naïve – our team needs a lot more than a rebranding to start winning games. But we’re optimists; maybe the buzz around the Hornets will get the players excited and give them the boost they need to start a positive momentum for the team. I mean, who doesn’t love a good Cinderella story?
Sources
*“A brief history of the Charlotte Hornets (and other things),” NBCSports.com, Joe Posnanski, https://goo.gl/gDbdV
“Michael Jordan summons Hugo the Hornet to Charlotte,” Charlotte Business Journal, Erik Spanberg, https://goo.gl/GJWWq
“Jordan confirms change to Hornets,” ESPN.com, AP, https://goo.gl/TSbfj
“Bobcats on borrowed time,” Charlotte Observer, Rick Bonnell, https://goo.gl/ciYEX
“Report: Lakers assistant Steve Clifford reaches deal to be Bobcats coach,” NBCSports.com, Kurt Helin, https://goo.gl/FrNMm
Humanitarian, Do-gooder Brands
I started writing today’s post about the recent controversy surrounding Abercrombie & Fitch and the effect on its brand, but I discovered I couldn’t be happier that I’m not a reporter – no matter how I approached it, I couldn’t be objective. A few links surrounding the story are below this post; feel free to make your own conclusions.
So, I decided to turn a negative story into a positive blog post and focus on humanitarian brands – brands that do good, and look good doing it. The following are a few brands I admire for how they represent themselves and what they do.
In January 2011, two young entrepreneurs Dale Partridge and Aaron Chavez got together with the mission of leading a generation toward generosity. With a belief that people mattered, they began a journey to change the world. On June 13, 2011, Sevenly was born. By creating weekly cause campaigns where customers could purchase products that gave $7 to a weekly charity, Sevenly successfully unlocked not only a way to crowd-fund for causes, but to drive massive social awareness as well.
charity: water is a non-profit organization bringing clean and safe drinking water to people in developing nations. There are 800 million people on the planet who don't have clean water. It's hard to imagine what 800 million people looks like really, but one in nine might be easier. One in nine people in our world doesn't have access to the most basic of human needs. Something we can't imagine going 12 hours without.
We're not offering grand solutions and billion dollar schemes, but instead, simple things that work. Things like freshwater wells, rainwater catchments and sand filters. For about $20 a person, we know how to help millions.
To Write Love On Her Arms (TWLOHA) is a non-profit movement dedicated to presenting hope and finding help for people struggling with depression, addiction, self-injury, and suicide. TWLOHA exists to encourage, inform, inspire and also invest directly into treatment and recovery.
As the largest civil rights organization working to achieve equality for lesbian, gay, bisexual and transgender Americans, the Human Rights Campaign (HRC) represents a force of more than 1.5 million members and supporters nationwide – all committed to making HRC's vision a reality.
Founded in 1980, HRC advocates on behalf of LGBT Americans, mobilizes grassroots actions in diverse communities, invests strategically to elect fair-minded individuals to office and educates the public about LGBT issues.
Finally, I stumbled across this last week and I find it a beautiful, philanthropic gesture from Bill and Melinda Gates and Warren Buffett – what’s even more incredible are those who have joined their pledge and the stories they tell.
The Giving Pledge is an effort to help address society’s most pressing problems by inviting the world’s wealthiest individuals and families to commit to giving more than half of their wealth to philanthropy or charitable causes either during their lifetime or after their death.
I know there are hundreds more benevolent brands and organizations out there- and personally, I can’t wait to spend my time learning about them. Feel free to share your favorites in the comments!
# # #
As promised, here are the Abercrombie & Fitch story links
- The original interview (from 1/24/06): “The man behind Abercrombie & Fitch,” Salon.com, https://goo.gl/1mBZG
- Greg Karber’s video: “Abercrombie & Fitch Gets a Brand Readjustment #FitchTheHomeless,” YouTube.com, https://goo.gl/Bq6yu
- The story Karber’s video references: “Abercrombie Says It Would Rather Burn Clothes Than Give Them To Poor People,” EliteDaily.com, https://goo.gl/yrp27
- Well-rounded story (IMO): “Half-Naked, All-American Models Won't Be Enough To Keep Abercrombie Afloat,” Business Insider, https://goo.gl/LI0a8
- Finally, just because she’s awesome, here’s Ellen’s take: https://goo.gl/sw0Le
Brands We Love: Publix
Plain and simple, I love Publix. It’s a love affair that‘s going on 20+ years, and with the Florida-based grocer now entering my adopted home state of North Carolina, it’s an affair I don’t see ending anytime soon.
There are so many reasons to love a grocer whose tagline is “where shopping is a pleasure,” but for today’s post, I’m going to discuss two things that make the Publix brand stand out: Its private label brand and its advertising, specifically its holiday commercials.
But first, a little history on Publix.
Publix is an employee-owned supermarket founded in 1930 by George W. Jenkins. According to My Private Label Buyer, George was managing a Piggly Wiggly grocery store in Winter Haven, Florida when hard times brought a drop in the store’s sales volume and staff pay cuts. When George learned the owner had sold his store to an Atlanta businessman, he looked forward to a visit from the new owner, but as time passed there was no meeting. So he took initiative and made his way to Atlanta to introduce himself. George never got the face-to-face meeting he hoped for and left Atlanta feeling a bit scorned, but also extremely motivated to start a store of his own, and that store was Publix.
Publix now operates over 1,000 stores in the Southeast. Publix brought in profits of $1.5 billion in 2012 and is ranked #106 on Forbes’ Fortune 500 list. Publix’s accolades don’t stop there though - it’s consistently ranked as one of Fortune’s top 100 Best Companies to work for, and according to a report compiled by Deloitte in 2010, Publix took the top spot on the most valuable retail brands list, even beating out big-time players such as Amazon, Ikea, and H&M.
To learn more about its history, check out this video that a Tampa news station produced for Publix’s 80th anniversary in 2010.
Publix Private Label:
The Publix Private Label brand has a loyal following, and with good reason. Those who regularly shop at Publix know that buying private label means they won’t have to sacrifice quality for price – something that most shoppers might take for granted - because you see, not every private label brand holds their goods to the same standard that Publix does. It’s this sort of standard that has propelled the Publix private label brand to account for 20 percent of all its sales. The Publix private label is projected to have sales of $6.6 billion by 2014.
And the packaging hasn’t hurt the brand’s success either. In 2003, Publix redesigned its private label packaging across all offerings, and now features a clean, simple and prominently white design that clearly separates it from big label brands.
Publix Commercials:
A standard branding “must do” is creating emotional connections with your customers. Do that and you’ll have a greater chance of bringing that customer back time and time again. This is something Publix does better than almost anyone. If you haven’t seen a Publix commercial, you might wonderhow a grocery store can do this? Publix is just another store to get the food I put on my table. That may be true, but you’d be hard pressed to find another brand – in any market – that capitalizes on human emotion more than Publix does. Liz Crawford, senior vice president, business and communications strategy with Mars, a shopper marketing agency, summed it up quite nicely when she said, “Publix conveys this image, particularly in its television advertising, of family and a good meal, it’s almost like love on the table.” There’s a warmth there that any national chain, even the really successful ones, just can’t seem to match. I get the sense that Publix really is lodged in the hearts of its shoppers.”
Grab your box of tissues and check out some the most memorable Publix commercials below.
As Publix begins to extend further north, so will the impact of its brand, and personally, I can't wait to see it in my backyard again.
Branding 101: Product Placement and TV Shows
Branding has become such a general term – a catch-all for everything relating to a brand: names, logos, portfolio organization (we call this architecture), advertising, public relations and marketing. In its purest form, branding is defined as “the promoting of a product or service by identifying it with a particular brand.” So, sticking with this black and white definition, we’re going to focus on the evolution of product placement in television shows.
Historically, product placement could be as simple as the use of Reece’s Pieces in the movie “E.T.” (one of the most memorable examples of product placement), or as obvious as Fed-Ex in the movie, “Cast Away.” Television show equivalents are Carrie Bradshaw’s Apple laptop in “Sex in the City” and the recurring iPhone or Chevy presence in “Glee.”
What’s the evolution of this type of branding? Instead of simply placing a product in a show, it’s actually written into the script. When done well, viewers aren’t hit over the head by the placement, but are, instead, quite pleased with its integration into the storyline. Television viewing has become complicated for brands. And, with the emergence of DVRs and streaming options like Netflix and Hulu, a shift to incorporating products into plots is necessary.
Scripted versus Reality
Scripted television shows have gotten pretty creative when it comes to product placement. A few examples are below.
- Possibly the most famous (or infamous, as the case may be) is “Sex and the City.” The show’s primary focus on fashion and NYC style made brands like Manolo Blahnik and Jimmy Choo household names. But that’s only the tip of the iceberg- Gucci, Louis Vuitton, Prada and Versace made multiple appearances as well. And, the show’s incredible success eventually led to a myriad of product placements in the first “Sex in the City” movie.
- Throughout its seven season run, “30 Rock” became somewhat synonymous with product placement. Some endorsements were exceptionally funny, e.g., Verizon, while others were a branding cash cow, like Kraft’s sponsorship of “30 Rock’s” Kraft sponsorship storyline. Talk about product placement coming full circle!
- “Revenge” took product placement and sponsorship to an entirely new level in a November 2012 episode. Target and Nieman Marcus were the ONLY sponsors of the show, and the ads featured a storyline that was a subplot of the main episode, and even included the show’s main characters. “It was a whole new level of integration,” said Jeff Jones, Target’s chief marketer.
Reality versus Scripted
Product placement has absolutely exploded in reality television shows. Check out these examples:
- In a single month, “American Idol” has inundated viewers with more than 200 in-show product appearances. The most notorious placements? Coca-Cola, AT&T Wireless and Ford.
- “Biggest Loser” repeatedly incorporates Subway, Extra Sugar Free Gum, Ziploc and Brita into its programming.
- And, “Extreme Makeover: Home Edition” leveraged brands for rebuilding homes as well as for family vacations. Examples? Sears, Ford and Disney.
Does product placement really build brand awareness?
Reviews are mixed. Psychologically, the mere exposure effect suggests that people feel a preference for things simply because they are familiar. Need proof? Reese’s Pieces experienced a 65 percent increase in sales after its placement in E.T. So, if you subscribe to this belief, then more equals better for your brand, but viewers don’t always agree. There is a very precarious line that brands have to be careful not to cross, or they may lose some of their followers.
Knowing all of this, here are some final points to ponder: Which brands have you noticed in your favorite TV shows? Does your show handle the product placement well, or do you end up rolling your eyes when you see it?
Sources
Merriam-Webster
“’30 Rock’ Satire of Kraft Sponsorship Is Sponsored by Kraft,” New York Times
“Target, Neiman Marcus Look to 'Revenge' to Launch Anticipated Holiday Collection,” Ad Age
“Product Placement Hits High Gear on ‘American Idol,’ Broadcast’s Top Series for Brand Mentions,” Ad Age
“Mere Exposure Effect,” PsychCentral
“Product Placement Can Be A Lot More Powerful Than We Realize,” Psychology Today