Foundations of Marketing

by Jonathan Groucutt

Chapter 7: The Branding of Products and Services

The Seminar Room

General

Unusual Cases of Re-Branding (Global issues – USA, Italy, China/HK)

This is not a new phenomenon, far from it. Both movie and pop stars have re-branded and to some extent re-invented themselves over the years. (The re-inventing can be akin to the rejuvenation process within the product life cycle). Now some movie stars changed their names because the new name or ‘brand’ had a better sound to it. For example the name Archie Leach does not have the same sound as Cary Grant. Yet for the great Hollywood actor changing his name was only one part of becoming Cary Grant. He created a whole persona of suave sophistication that every man wanted and every woman wanted to be with. Yet some 20 years after his death at the age of 82 he is still considered a giant amongst movie actors. A persona or brand created by both himself and the Hollywood system.

In the 1960s/70s there was a view, in many parts of the international movie business, that in order to succeed you had to change your name into an English-sounding one. Italy had had a rich history of movie making both before and after World War Two, for example the works of Rossellini and Visconti. However, many in the Italian movie industry of the Sixties sought to break into the wider English-language market. Their movies were dubbed into English and names changed to give the ‘impression’ that the crew/actors originated from English speaking countries. Several in the Chinese/Hong Kong movie industry have followed this ‘re-branding’ of themselves. However, with masterpieces such as Ang Lee’s Crouching Tiger, Hidden Dragon (2000) such re-branding of individuals is far from necessary. As markets open up (the global village), we become more aware of other cultures then the requirement for people to re-brand themselves becomes less and less (or should do).

Brand Sabotage – Brandalism – Cybersquatting

In today’s global highly competitive environment brands represent a significant asset on a company’s balance sheet. Brands need protection – both online and offline. This all links to the company’s reputation management (an integral component of public relations and thus promotion). However, not all companies have been pro-active in registering their online domain name(s) as new suffixes become available, for example, .biz. This, unfortunately for the brand, provides an open door to those who want to cybersquat. Cybersquatters are those individuals (or companies) that acquire the new domain name. Therefore the original brand owner cannot use that domain name – unless, of course, they pay for it which can be a very expensive exercise. There is even a case of a UK academic who registered various domain names of the university who employed him. In order for the university to retrieve those names they had to negotiate a fee with their own employee. I will leave you to consider the ethical issues in these cases.

Antony Gold a partner in the UK law firm Eversheds suggests that companies need to:

  • Be ready when new suffixes are due.
  • Register the domain names of new products/brand launches as soon as they are decided.
  • Avoid leaking the name of new brands and products before they are ready to be officially launched.
  • Avoid launching a new product/brand before the company has registered the domain name.
  • Employ a reliable monitoring service that can provide a complete global picture of the company’s brand online and supply intelligent information about how problems can be resolved.
  • Consider registering all trade marks and domain names, slogans, phrases and strap lines (these are the lines that you usually find below the brand name/logo).
  • Organise a formal legal procedure for addressing brand abuse.

Source: Gold, A. (2002) The Future of the IT Organisation: Q: what’s in a name? A: branding. ComputerWeekly.com 28 March.

Brand Longevity

Here we consider a few more products and services and their date of origination. Again, as you can see brands may be older than first suspected.

Brand

Product Range

Date

Country of Origin

Accor Group

Hotels

1983

France

AEG

Home appliances

1887

Germany

Avis

Auto Rental

1946

USA

BBC

Radio, TV, Internet

UK

(The Beatles)

Pop Group

1962

UK

Cathy Pacific

Airline

1946

Hong Kong

Diners Club

Charge Card

1950

USA

Electrolux

Home appliances

1919

Sweden

Holden

Automotive

1925 In 1931 merged with General Motors Australia

Australia

Hyundai

Automotive

1967

South Korea

Kelvinator

Refrigerators

1916

USA

JVC

Electronics

1927

Japan

LG

Electronics

1958

South Korea

Louis Vuitton

Fashion/Luxury Goods

1854

France

Lufthansa

Airline

1926/1933 re-born 1955

Germany

Moscow Symphony Orchestra

Orchestra

1989

Russia

National Symphony Orchestra of Ukraine

Orchestra

1937

Ukraine

News Corporation

Media

1923

Australia

Norwegian Radio Orchestra

Symphony Orchestra

1946

Norway

Oris

Watches

1904

Switzerland

R.M. Williams

Clothing/Luggage

1934

Australia

Qantas

Airline

1920

Australia

Tata

Conglomerate (93 operating companies)

1868

India

Thomson

Electronics

1879

USA now France

Thums Up

Soft drink

1977

India

Wahaha

Beverages/Milk Drinks

1987

China

Zanussi

Home appliances

1916

Italy

Zeiss

Opticals/Semi conductors

1846

Germany

Lufthansa Expands into the Private Jet Market

Although an airline may carry more economy (or coach) passengers it is often the business and first-class passenger segments of the operation that drive the profit margin.

In the battle for this significant market the German-based international airline Lufthansa has launched a branded private jet service in alliance with NetJets™, the world’s largest owner of private jets. This service will offer passengers direct point-to-point connections to over 1,000 European destinations. Additional services such as limousine transport, express customs/immigration clearance, individually tailored catering and the opportunity to reserve a flight up to 24 hours in advance of departure will be available.

Potential scenarios: (1) A first-class passenger could join either a scheduled Lufthansa or an alliance partner flight from the Far East to Europe. Then use the private jet service for individual or multiple flights within Europe; (2) An individual or company may use the service to visit multiple destinations within single or multiple trips.

Questions

  • Several airlines have sought to launch low-cost subsidiaries. In addition there is competition from an increasing number of new independent low-cost carriers. In this climate why do you think that Lufthansa chose this route?
  • What do you think could be the possible market opportunities for Lufthansa over the longer term?


Pan European

Mini Case: Sunny Delight – Update

In 2004 Procter & Gamble sold Sunny Delight (re-branded as Sunny D) to the Sunny Delight Beverage Company (SDBC). Although it has sales of UK £50 million this is approximately a quarter of the sales after its successful launch in 1998. To regenerate the brand the company is using Focus Groups (see Chapter 4: Marketing Research) of parents to advise on product development and marketing.

Source: Choueke, E. (2005) Sunny D seeks parental input on brand strategy. Marketing Week. 22 September. p6.

Pan Pacific

Re-Branding (New Zealand)

There are times when a brand name is perhaps too local or regional in context, especially when it wants to make an international statement. A case in point was the brand name of New Zealand’s major airline in the 1960s. In April 1940 the Tasman Empire Airways Limited (TEAL) was launched with a flying boat service between New Zealand and Australia. It later expanded to include the Pacific Islands. In April 1965 TEAL was re-branded as Air New Zealand. With the increasing development and use of jet airliners Air New Zealand was able to expand its operations. Today it is both a domestic and international carrier that is a member of the Star Alliance network of airlines.

North America

America’s Finest – Brand and Line Extensions

When we consider brand and line extensions we usually think of grocery and toiletry products. However, various award-winning American TV series have spawned their own programme extensions. Here are a few examples.

Cheers (1982–1993) This upmarket comedy series focussed upon the various trials and tribulations of a group of regulars (including, as a major character, a neurotic psychiatrist Dr Frasier Crane) at a Boston bar. This award-winning series was to be the parent of the equally award-winning series Frasier.

Frasier (1993–2004) The character Dr Frasier Crane (played by Kelsey Grammar) moved from Boston to live in Seattle and host a radio advice show. The comedy has scooped more awards than any other TV programme. [This is a brand extension.]

CSI: Crime Scene Investigation follows a team of police forensic investigators in Las Vegas. Two further extensions have been created in tandem – CSI:Miami and CSI: NY. These series have been marketed into over 200 territories worldwide. [This is a line extension.]

Lost in Translation

As indicated in the textbook, not all brand names translate effectively into another language. The following example is even more complex in that the meaning of certain Spanish words varies from country to country. This, as you can imagine, can prove to be a nightmare for companies that want to market their products/brands across various Spanish-speaking markets.

The Hispanics are the second largest ethnic group within the US marketplace, and increasingly becoming a consumer ‘powerhouse’. Currently over 40 million Hispanics influence various areas of the American economy with a purchasing power of over US$630 billion. However, it has taken many American companies significant time to realise the potential of the Hispanic market, not just within the US but also within neighbouring countries.

Hershey, America’s leading manufacturer of chocolate and non-chocolate confectionery, realising market potential, teamed up in a multi-year partnership with Latin pop singer Thalia Sodi to launch the candy bar, Cajeta Elgancita. As well as the original bar, new versions including chilli-based flavours were rolled-out.

However, the word ‘cajeta’ has several meanings. For example, in Mexico it can be used to represent ‘nougat’. It can also mean ‘condensed milk’. In some Southern American countries it is a milk caramel sauce (dulce de leche) that apparently takes its name from the small wooden boxes in which it was traditionally purchased. But in Argentina, Uruguay, Paraguay and the Dominican Republic, for instance, it has a colloquial sexual meaning.

This example reveals several issues: (1) The meaning of a word is often considered across languages. For example, translating from English to French. However, a word can have different meanings within the same language – but within a different location. (2) As companies push for regional brand identity (and thus the same brand name) there may be more examples of brand name confusion.

Sources: Hershey (2005) Hershey Foods announces multi-year partnership with Latin superstar Thalia Sodi expand presence in Hispanic market. Hershey Press Release, 12 April. Wentz, L. (2005) Hershey’s product name sparks Hispanic controversy. 22 February, Advertising Age Online. Hershey ad has rude double take in Spanish. Billings Gazette. 9 March. Hispanic Business.Com (2005) What does cajeta mean to you? Hispanic Business. Com, 14 March.


The Café

  • The brands of the future will be short-lived due both to competitive pressures, customer demands and the lack of ‘real’ loyalty. What do you think and why?
  • European and US brands have dominated regional and international markets for years. However, now Chinese and Indian brands – such as Lenovo, Haier and Tata are becoming global players. Could they be the new powerhouse brands of the future? Could they overtake many of the brands that we today take ‘for gran

The Library

Articles

Groucutt, J. (2005) The life, death and resuscitation of brands. Handbook ofBusiness Strategy. Emerald Group.

Roberts, D. (2004) China’s power brands. Business Week. 8 November. Pp: 44 – 50.

Publications

Apéria, T. and Back, R. (2004) Brand Relationship Management: Bridging the Gap Between Brand Promise and Brand Delivery. Copenhagen: Copenhagen Business School.

This text considers why both brand promise and brand delivery must combine to build a sustainable brand.

Bauer, A., Bloching, B., Howaldt, K, and Mitchell, A. (2006) Moment of Truth: Redefining the Marketing Agenda. Basingstoke: Palgrave Macmillan.

The authors contend that companies should take an holistic approach to branding. Here the brand is at the centre of a value-based approach, and thus the focal point of the organisation’s strategy.

Schultz, M., Antorini, Y.M. and Csaba, F.F. (2005) Corporate Branding. Copenhagen: Copenhagen Business School.

The authors examine various corporate branding issues and suggest a framework for the conceptual and practical development of organisations as brands. The implications for management and the organisation are considered.

Useful Websites

www.agendainc.com

AGENDA INC™ is a research and strategy company based in San Francisco and Paris. This is an excellent website providing information on pop culture and brand strategy. It is updated daily with news items/issues and material is archived so that you can research back over previous months.

www.thefuturelaboratory.com

The Future Laboratory is a London-based research company that analyses trends on behalf of major organisations and companies. They conduct work on brand strategies. The website provides useful information on current brand trends.

Companion 3columns template wp_companion_3columns.tpl Basic BASIC 20141201 16:12:54 e201402061647267277 20140206 ]
-->