Opinions about branding by Dr. Dannielle Blumenthal

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Monday, August 6, 2007

Do product brands require a strong culture?

So far I have used the term brand rather loosely to refer to the company that sells a product or service--the corporate brand. But it seems worthwhile to take a moment and reflect on product brands, which emanate from the company but are not equivalent to it. Do product brands require a strong culture behind them? Or is it sufficient to market, advertise, publicize, and sell them on their own?

I would say that it depends on the extent to which people are involved in the selling context. For example, take Procter & Gamble's Tide detergent. Everybody knows that Tide is synonymous with "strong clean." So every person involved with Tide should at a minimum wear very clean clothes. They don't have to preach cleanness, but they have to be clean--must reflect the brand. They should probably also extol Tide inasmuch as they can. And there should probably be a Tide lab (I don't know if there is or isn't one) where all they do is search for the newest ways to keep clothes ultra-clean. Nevertheless, in general, product brands require much less in the way of corporate culture than corporate or service brands. Nobody has to "live" the Tide brand. In my view, Tide is tops because of the way it is made (you see, I'm a brand believer in the product) and the way it is advertised--a well designed mass media creation by P&G.

A hybrid kind of brand exists in retail...where product and service are inextricably linked. Think of Starbucks. In retail the salesperson is absolute king or queen of the brand...and he or she shares that throne with the merchandise. The two must blend together seamlessly. The salesperson must not only wear the right clothing but must "live" the experience that the brand promises. So for example, a Starbucks barista should know coffee well enough to be convincing about the kind of experience it is to drink a Starbucks drink. And you know what? Even if you never ask, you get the feeling that they do know the coffee in all its variations. This derives straight from the fact that Starbucks has a strong corporate culture and makes a point of treating its sales associates well.

Read this:
"Ask Starbucks executive about the company's recipes for success, and they will tell you unequivocally that it's the people, or 'partners,' as Starbucks calls its employees. They will tell you that Starbucks doesn't just sell coffee, it sells an experience. And that experience, they will say, is completely dependent upon the attitudes and abilities of the partners on the front lines who greet and serve more than 30 million customers globally every week." (http://www.workforce.com/section/06/feature/23/94/44/index.html)
In contrast, Dunkin' Donuts (which has better coffee, incidentally) offers absolutely no brand experience whatsoever. All they promise is to get you moving quickly ("America runs on Dunkin"). From what I can tell, the store associates are not particularly well-treated nor do they convey a brand promise. As a result, Starbucks has higher brand equity than Dunkin' Donuts, hands down.

Now if you look at Target vs. Wal-Mart, there is an interesting problem at play. For Target undoubtedly has more of a brand positioning than Wal-Mart--selling "cheap chic" rather than the commoditized promise of "the lowest prices out there"--but Wal-mart has the stronger corporate culture. (The corporate culture is so well known that there are a multitude of term papers for sale on it; see http://www.oppapers.com/topics/Wal-Mart-Organizational-Culture/0.)

For example:
"The last rule on the Wal-Mart list is to take care of the customer. Unless the situation is completely unreasonable, a customer must never be allowed to leave a Wal-Mart store unsatisfied, Mauldin said. Taking care of customers is possible, because the company has an unwritten deal with its associates. 'Sam Walton believed that if he was good to people and fair with them and demanding of them, they would eventually decide that he was on their side,' she said. 'The focus of that deal is that cost-cutting can co-exist with a moral center, which operates on the principle that Wal-Mart can be the cheapest place to shop and the best place to work at the same time.'" (http://refrigeratedtrans.com/mag/transportation_corporate_culture_provides/) (Also see http://www.walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=251)

Contrast this with these weak comments about Target:

"Company culture is 'a hard thing to understand,' insists one insider. 'My brain shuts down when the human resources people start droning on about mission statements, corporate culture, and other similar fluff.' What she does understand, however, is that 'Target values employees who do their jobs well.' The company also 'appreciates new ideas and the people who introduce them.'" (http://www1.excite.com/home/careers/company_profile/0,15623,129,00.html)

In the end, which is the stronger brand - Target or Wal-Mart? Or think of it this way: given a choice between the two stores, where would you shop? I'd say it's a tossup. I'd go to Wal-Mart, because I trust that I will get the lowest prices out there with satisfaction guaranteed. But I think others would just as easily go to Target, because their product brands are so strong. I still believe, though, that Target's seemingly absolute lack of a corporate culture, especially compared to Wal-Mart, might sting them in the end. In fact, if Wal-Mart stood for anything other than the essence of frugality, which is a commodity promise, it would probably supersede Target easily.

So, in the end, brands with a strong culture usually trump those without one--except when it comes to product brands, where the less visible the people are, the less important the culture is and the more important advertising and marketing are. And retail brands benefit from having a strong culture, but they may need to make less of an effort at this if their product brands are extremely high-equity.