Brands are funny things. Building a brand should the single most important objective of a company’s marketing process, because if you do it well, customers will be loyal to your brand, and you will sell more products or services, and make more money.
So what is a brand exactly? A brand is nothing more than a name that represents something in the mind of a prospect. What that something is that the name represents is the brand. So when you think of Nike, you might think of athletic, sporty, flashy, winning etc. When you think of Rolls Royce you might think of expensive, luxury, exotic, or prestige.
What you’re trying to do when building a brand is differentiate your product or service from all the other products or services you compete against. Differentiate your sneaker from all the other sneakers at the store, or differentiate your brand of motor vehicle from the competition.
To do that, brands need to be specialised, and they need to be focused. They need to represent something - to stand for something. Branding should create a perception in the eye of the prospect that there is no other product or service offering in the market that’s quite like that brand.
No other sneakers are going to compare to Nike sneakers, and no other car is going to compare to a Rolls Royce. That’s not to say that a brand can appeal to everybody – not everyone is going to want Nike sneakers, and not everyone is going to want (or afford) a Rolls. No brand has universal appeal, because not everyone wants the same thing. Like the saying “You can’t please all of the people all of the time”, your brand can never have universal appeal.
One of the pitfalls big companies fall into is trying to appeal to too many people with their brand, and they lose focus.
Let’s take Levi’s Jeans as an example. Levi Strauss and Co. is a company that was foundered in 1853 when Mr Levi Strauss himself first started producing denim overalls, then a few years later in a spark of creativity invented the blue jeans his namesake brand is now famous for. In a stroke of marketing genius, Levis decided to put a bright red tab on the outside of a pocket with a distinctive embroidery shape of a birds wings in flight, with the result being that Levi’s jeans could be spotted straight away by people because of the distinctive pocket insignia and red tab. That was a key differentiator that helped Levi’s stand out from other ‘ordinary’ and lesser jeans brands.
This worked well for Levi’s for a little over a century, but in recent years the brand has lost its lustre. Jeans turned from being a utilitarian rugged clothing item 100 years ago, to being a cultural statement of personal identity today. Competing jeans manufacturers recognised this, and crafted their own brands to identify with different market segments to those attracted to the Levi’s brand.
In the face of this increased market competition, Levi’s tried to appeal to a broader audience of people in order to sell more jeans. That was a mistake. When you try to broaden your appeal, you lose what you stand for and what makes you unique, and you end up hurting your brand and actually lessening your appeal overall.
Levis decided to introduce many new styles, and they discarded the iconic red tab in some styles for a yellow tab, a white tab, even a leather tab or no tab at all. They came out with 28 different styles of jeans, all completely different, and even then if you couldn’t find a pair you liked, you could design your own style and have Levi’s make it for you. Levi’s went from being distinct to being bland.
The result was that Levi’s lost its differentiation, and it lost market share – from a high of 31 percent of the jeans market all the way down to 11 percent in the last fifteen years, laying off 5,900 workers in the process.
The thing Levi’s failed to understand was that good brands are typecast in consumer’s eyes. Good brands stand for something – in Levi’s case “the original” – and it’s very hard to change consumer’s perceptions of a brand image you have been building up for so long, even if you want to. Levi’s felt that they were not hip enough to a new generation of jeans wearers, so they changed their styles and lost their brand distinction. What they should have done is created a new brand with different core values to appeal to a different market segment, rather than dilute their existing strong brand.
A company that does this very well is LVMH S.A., or Moët Hennessy • Louis Vuitton. This French company is the master of creating and acquiring very distinct brands that appeal to different sections of the market. In perfumes and cosmetics, LVMH own the brands Christian Dior, Guerlain, Kenzo, Acqua di Parma, BeneFit Cosmetics, Fresh, Loewe, and Make Up For Ever. LVMH has so many brands because they appeal to different segments of the market. Just like young girls don’t wear the same clothes as their mothers, they don’t use the same makeup brands their mothers use either. Youth often prefer brighter edgier shades at cheaper prices, while older consumers that can afford it prefer more prestigious traditional brands at higher price points. LVMH knows the same brands cannot appeal to both ends of the market.
Another company that created a new brand to appeal to a different segment of the market was Black and Decker. Their namesake brand is one of the leaders in consumer power tools and outdoor garden products. Lots of people have Black and Decker power tools, dust busters, and outdoor tools in their homes and garages. But B&D wanted to get into the more lucrative professional power tools market – those tools used by tradesmen on work sites.
Although Black and Decker felt they were a well known brand in the home, they decided against trying to extend that brand into the professional tools market. Just like ‘the original’ Levi’s jeans will never appeal to the hip young crowd, trying to sell ‘mom and dad’ power tools to professional workmen was a bad idea. So B&D created a new brand to appeal to this market segment – DeWalt tools, clad in a distinctive industrial yellow casing. The brand was a great success and now B&D own a massive share of the professional tools market, without compromising their original brand.
Most companies are opposed to creating a new brand, citing cost, advertising and administration overheads. But creating a new brand to appeal to a different market segment is often cheaper and more effective in the long run than trying to extend an existing brand to fit a new demographic. As in the case of Levi’s, if you try to extend your brand you risk losing both the new target market segment and the old one.
Don't try to extend your brand into new markets. Instead, create new brands for new markets.
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