Strong brands buck the trends in recession

Okay, what all of us involved in branding have been telling clients for years is true. Brands add value despite despite slowdown (BBC News, 29 April 2009).

Every year Millward Brown Optimor publish their Brandz Top 100 survey which compares the balance sheets of leading brands with public sentiment about those brands.

“In the current environment, where the value of many businesses has fallen, brand has become even more important because it can help to sustain companies in tough times,” says Millward Brown Optimor’s chief Joanna Seddon.

It’s paradoxical that for many companies when times are getting tough, they tend to cut expenditure in just those areas that can give value to and sustain brands, supporting the sentiment that the public feel about them.  There is the natural response to cut anything which s not going to show positively on the balance sheet. But perhaps CEO’s should also look at the ‘brand balance sheet’.  That is brand leadership… look after your brand and in hard times your brand will look after you.

Tesco, Virgin and the emergence of the ’super-brands’

So, Tesco are to open physical bank counters in some stores and we hear of their record profits. But is there something more subtle happening in the emergence of super-brands? Tesco, for example, as well as groceries and consumer durables will also sell you telecoms,broadband, insurance,banking and much more. There seems to be no limit to what we will accept from our trusted brands.

Of course there has always been the principle for retailers to add to the range of products they sell – if you have the premises and the distribution, and it fits with your market strategy it makes a good deal of sense to diversify and maximise floor space revenue. It is the philosophy that gave rise to the department store. Similarly, the ’70s brought us the growth in ‘vertical’ integration.

What is happening now though is something rather different I would suggest, and the catalyst may well be the growth of virtual channels.  The growth of Tesco’s brand offer has not been driven by maximising distribution or floor or shelf space: indeed the expansion has been in services rather than physical product. They are moving the revenue centres away from the shelves. But what is critical is the growth of the brand and brand-trust. The brand has moved beyond food retailing and is exploiting the goodwill, reassurance and trust with which customers have imbued it.

We can see a similar phenomenon, but delivered in a rather different manner from Virgin. A record retailer that now sells telecoms, financial products, rail travel, air flights and even space travel (well, projected). But the foundation that makes this possible is a set of brand values that the public understands and shares across the various products and services on offer.  Virgin is a rather more quirky brand than Tesco and owes a lot to customers of the same generation as Richard Branson.  Somehow the values of a company that started in the music business have left their traces throughout the organisation. Like Tesco, the brand and its intangibles transcend the limitations of physical delivery and creates these opportunities.  The interesting project will now be to observe the growth of the next ’super-brand’… who will it be?

The signifier not the song

When looking at brand semiotics all the usual signifiers are there in the form of names, logos, colours etc. but sounds are rather less common. Perhaps the most ubiquitous use is in branding nation states – national anthems. Wally Olins noted this in his book Corporate Personality, where he pointed to the newly formed Confederate States, who in 1860 quickly assembled all the signifiers of a nation state, including a flag, corporate colour, capital… and notably a song. ‘Dixie’ immediately communicates a whole set of values.

Theme tunes are an intrinsic part of movie and TV series branding, and in radio and TV station ‘idents’,but in the more general world of consumer product branding sound and music is far less common.  Occasionally music from ads become brand assets, but due to the necessarily tactical nature of advertising, these are usually time constrained and short lived. Perhaps new technology will change this: two audio signifiers that spring to mind are the Windows sign on notes (Bill Gates’s door bell) and the Nokia default ring tone. With the spread of electronic devices, all it seems with in built audio capabilities, perhaps sound will move more centre stage when developing brand identities and their signifiers.

Slaughter of the Innocent?

So, Coca Cola buys into Innocent? I have heard the arguments by co-founder Richard Reid, and they are convincing from a business viewpoint.  But from a point of view of brand values… what were they thinking? I am a great admirer of the way Innocent took a business view and communicated and represented a distinct set of brand values. As a branding specialist I could say it was the most important thing they have done.  I look at that set of values; then I look at the values I associate with Coca Cola… and I bury my head in my hands.  Is it worth the sense (unfounded as Reid protests) of disappointment and ‘betrayal’ many consumers may feel, for 30 million pieces of silver?

Will people’s personal narratives change in tough times?

I have talked before about brands having narratives that are influential in our choices when we seek to use them to augment our personal narratives – like the 40 year old accountant who buys a Harley as it fits his personal narrative of being something of a rebel and maybe with a slightly ‘dangerous’ side.

But will the current economic climate drive us to change these personal narratives and thus our brand choice?  Will workers in the financial sector re-write their narratives as caring, hard working people and make choices with brands that suggest prudence and parsimony rather than overt opulence?

My only concern is that financial pressures my make us move the chapters on sustainability and eco-friendliness to the back of our narrative, slowing down the movement to brands with a sustainable narrative of their own.