Contact Us | User Login  
 
Program Competencies
 
Our Blog

Past DISPATCHESTM

Home | Selling Out

 July 16, 2007

 

SELLING OUT?

 

The term “selling out” refers to someone who is abandoning principles or ideals for money. It’s a failure to give one’s best and make a real difference. Instead, it’s about cashing-in on a popularity or reputation. It’s making a withdrawal from an equity account that has been built upon performance, trust, loyalty, customer satisfaction, etc. It’s a grab for the quick buck by capitalizing on a reputation that has been well earned by past actions but cannot be supported by current or future activities. It’s a form of exploitation at minimum. In the extreme it can be likened to strip-mining the brand’s equity and the customer’s trust.

 

There seems to be a lot of this selling out” going on lately. Take for example the wedding gown designer who sells her name to a line of mattresses. We’re not talking about a sleep expert here or someone who has a functional knowledge regarding the construction of mattresses that we know about. Instead we are talking about someone who creates beautiful aesthetics that help make a bride feel her most beautiful and that wedding day a special memory. When was the last time you admired the look of your mattress and how it seems to dress-up and make more beautiful your bedroom? When it comes to beauty in a mattress the key is how beautiful you will sleep, not how beautiful it looks!

 

Or consider the celebrity chef in one part of the country who opens restaurants in other parts of the country, say like in Las Vegas. The chef’s celebrity has grown from creativity, pains-taking attention to detail, operational excellence, exceptional service, etc. With the exception of creativity it’s the kind of things that don’t travel well. Moreover, the larger the new operation the more difficult and, therefore, less likely the previously notable level of excellence will be achieved. As per creativity, the more patrons that are served (i.e., the larger the target population) it seems the more the creativity is watered-down to satisfy the masses, as opposed to delight, individual palettes. With restaurants in multiple countries, states or cities the chef can only be present in one. The special sauce just isn’t the same when served-up somewhere else.

 

One of the latest is a new perfume from a recording artist who does not go by a name but some symbol and is referred to as “the artist formerly known as …”. This artist has certainly been unique in more ways than one throughout his career, and life – until now. How can his uniqueness possibly be captured in another perfume? More likely it’s cashing-in on his fame, his name(?) and his association with a certain color. While the color is not blue it certainly makes us feel that way when we observe those who sell out themselves. And, while the color is not green it is undoubtedly the reason why this artist of world renown has used his personal brand to brand a perfume.  It’s the color of filthy lucre.

 

So what has selling out have to  do with  brand  marketers?   Oftentimes  we  are  asked,   or   ask


ourselves, how far can we extend our brand equity. In other words, we want to know where else, as in what other categories, loyal customers will allow us to play, or market other products bearing the same trademark. This is referred to as extending the equity of the brand. There are different schools of thought regarding the wisdom of extending the trademark, or more appropriately brand equity, to new categories. Some believe it dilutes the value of the brand. Others believe it builds equity. Yet others don’t care as long as it produces sales growth for the company in the immediate term.

 

 

 

Now keep in mind this article is not about line extensions. Nor is it about brand architecture. Both of which are important issues for brand marketers. Instead this is focused on determining what categories you market the brand name beyond the one you are currently competing and where your brand developed its reputation and has its following of loyal customers.

 

Nor is this article about where customers give your brand permission to enter and compete. Marketing research is used to address this issue. What this article is about is where and how you should extend your brand in a way that is not selling out but building brand equity.

 

Here are our thoughts:

 

BOATS & HELICOPTERS:

 

 

  1. Extend to where your customers go for related products. CREST known for its success in being a highly effective cavity fighting toothpaste has extended into other oral care categories. There are CREST Whitestrips for whitening teeth. There’s also a CREST Spinbrush toothbrush for getting teeth their cleanest. The trust CREST consumers put in CREST Toothpaste appears to fit well with other oral care areas.

 

  1. Ensure that the “brand” has genuine meaning to customers in the new category. In the case of CREST while its original “product” meaning was toothpaste its brand equity was considerably greater. The CREST “brand” was and is associated with dentists and the kinds of care that they provide. This traces back to the fact that CREST was the first to win the coveted ADA (American Dental Association) endorsement for being an effective decay preventive dentifrice – a fancy way of saying a proven cavity fighting toothpaste. CREST earned a reputation for being the best. The brand was also supported by the strategic ingredient stannous fluoride, which has become synonymous with providing superior protection from tooth decay. If CREST is perceived to be the best at fighting tooth decay it is not a stretch to believe it can be the best at teeth whitening since both are linked to superior cleaning. And, remember, both are services of the dentist.

 

  1. Provide meaningful differentiation. Continue to provide the customer with something special. Get beyond satisfying mere category (i.e., generic) needs to satisfy needs that are unique to your brand in the new category. CREST whitening toothpaste contains the same ingredient most dentists use to whiten teeth. That represents a perceived difference from many of its competitors. CREST Whitestrips was an entirely new product establishing a totally new category akin to the dentist’s system made for home dispensing. Neither of these products, which represent either a new segment of the market or an entirely new product category, were or are perceived to be “me-too” products by customers. They represented something special to customers and prospective customers alike.

 

 

 

  1. Don’t just borrow but build brand equity with your forays into new categories. Selling out borrows heavily from the brand’s equity account. The new product depends upon the good will of the brand for its very being and survival. If it were not for the positive halo of the mother brand the new products in new categories would not exist. They are merely opportunistic. But when the new product using the established brand name delights its customers in new ways then a substantial deposit is made to the brand equity account. It multiplies the power of the brand in building and maintaining a loyal franchise of customers both in the present and in years to come. Undoubtedly, CREST Whitestrips has helped buoy the reputation of the CREST mega-brand.

 

  1. Leverage resources to enhance return on investment (ROI) of marketing support dollars. Investments in the new product with its “news” value can and should work harder for the brand in the marketplace. The brand family shines. It helps lift the sales of other products bearing the same trademark in other market segments and categories. It enables the brand to realize efficiencies that result from higher levels of effectiveness from the same dollars. Moreover, it leverages the relationship with customers serving to cement the loyalty of the franchise base. And it makes it more difficult for competitors to compete effectively.

 

CREST is not the only brand that has, in our judgment, successfully built brand equity for the mother brand. There are other notable examples of brands that seem to have avoided selling out and, instead, have built brand equity in the development of a mega-brand. Among them are the Dove brand, first with its extension of ¼-cup of moisturizing cream into a wide range of HBA products and today with its defining and celebrating “real beauty”; and Starbuck’s with its offering patrons a “third place” where they can feel comfortable and part of a special community.

 

Selling out is not without its rewards. If a brand name lends itself to the new category there will be incremental sales in the immediate term. But selling out is akin to having termites in the foundation of your home. While you may not notice the negative impact today you will come to realize the extent of the damage when your foot falls through the flooring. This insidious, inexorable damage may be observed by declining margins, eroding market share, increase in promotion sales as a percent of total sales, competitive inroads – among other signs. It’s too bad many marketers miss or ignore the significance of these telltale signs of decay.

 

On the other hand, building brand equity can reward the brand with new market developments, strategic stability, premium pricing, immunization from competitive price inroads, and brand loyalty among others.

 

Make your choice wisely. Don’t sell out. Build brand equity!


 

Richard Czerniawski & Mike Maloney


Richard Czerniawski


430 Abbotsford Road

Kenilworth, Illinois 60043

tel 847.256.8820 fax 847.256.8847


reply to Richard:

rdczerniawski@cs.com or

richardcz@bdn-intl.com

 

 

Mike Maloney


1506 West 13th

Austin, Texas 78703

tel 512.236.0971 fax 512.236.0972


reply to Mike:

mikewmaloney@cs.com or

mikemaloney@bdn-intl.com

© 2003 Brand Development Network (BDN) International. All rights reserved.


  Home | About Us | Contact Us | Site Map | Help

© 2007 Brand Development Network Inc. All Rights Reserved.
Site Web Master: Vincent Sevedge. Designed by www.ericbritton.com.
Call us: 800-255-9831
(620-431-0780)
[Print Page]

Open 5-2008 BP&MCC Online Assessment