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Resurrect your brand using Six Sigma thinking By Kevin Clancy
and Peter Krieg Executive Summary
Everyone is talking
about branding these days: consumer companies, B2B service firms, industrial
marketers, and even not-for-profits such as the Boy Scouts of America,
the Red Cross, and Massachusetts General Hospital. As BusinessWeek
reported recently, "Companies have realized that a vibrant brand,
with its implicit promise of quality, is an important asset. It has the
power to command a premium price among customers and a premium stock price
among investors. It can boost earnings and cushion cyclical downturns."
Although this talk is exciting to us—building great brands is what
marketing is about, after all—the sad truth is that more brands are
becoming commodities than vice versa. At Boston, Mass.-based Copernicus Marketing Consulting, we recently asked consumers about their perceptions of brand differentiation in 46 major product and service categories: Were the leading brands becoming more similar over time or more different? In over 85% of the categories, consumers indicated brands were converging—becoming less and less distinct. Equally disturbing was that consumers viewed low price as more important than brand name in 76% of the categories. Lost on the Range As defined by the
American Marketing Association, a brand is "a name, term, sign, symbol,
design, or a combination of them, intended to identify the goods or services
of one seller or group of sellers and to differentiate them from those
of the competition." Just as nineteenth century ranchers put a mark
on the behinds of their cattle to indicate ownership, companies today
are putting their stamp on an amazing array of B2C and B2B products and
services. Unfortunately,
"branding" at many firms seems lost on the range: They spend
millions to introduce a logo and font, launch an edgy "essence"
advertising campaign with a clever tag line, or run a big-ticket giveaway
promotion, none of which contribute much to building a brand. In this day and age,
companies have to do much more than confer ownership with brands; they
have to show their cattle are better than those on other ranches using
targeting, positioning, and product, price, and channel differentiation.
The major problem today is these differentiators are hard to find. Let's start with targeting.
The folks that account for the most revenue—the "heavy buyers"
or 15% or so of the market that accounts for 80% of sales—usually
look like the best prospects on paper. But if marketers took just 10 minutes
to consider profitability, they'd see target group revenues and profitability
are often curvilinearly related—making heavy buyers the least profitable
target. They're price sensitive and deal prone. Win them today with a
great offer, and they'll leave you tomorrow when they get a better one
from someone else. Consumer packaged-goods firms love women age 18-54
and B2Bs are fixated on SIC codes. These groups, however, tend to be more
heterogeneous than homogeneous, making it difficult to develop products
and services, efficiently buy media, develop a compelling positioning,
and so on. There's nothing proprietary about any of the groups, so every
one of your competitors is likely chasing after them. How about positioning?
You've heard of the "un-cola"; most brands today are the "unpositioned."
We recently sat through a reel of the top 100 commercials from the British
Isles. They'd won recognition for excellence and were definitely amazing.
This was not because they were good—frankly, they were awful—but
because most followed the same formula: 27 seconds of a silly, unrelated
joke and three seconds of brand mention. There were no brand connections
and no brand meanings—just brand mentions. For weeks after the meeting,
we wondered: How could the British Isles advertising industry be so confused?
The mystery was solved when we started hearing about the theory behind
the campaigns, which makes even less sense than the commercials: You don't
need a positioning; it's an outdated concept. Or as futurist Faith Popcorn
puts it, "Differentiation is beside the point." If most brands are
positioned at all, it's strictly in the minds of their managers. Working
with advertising research specialist David Lloyd, Copernicus surveyed
a national cross section of buyers in an array of product and service
categories. It asked what the category's five leading brands communicate
to distinguish themselves from other brands. Lloyd and Copernicus found
fewer than 10% associate anything with brands that we could call positioning.
Evidence of product,
price, and channel differentiation is as hard to come by as examples of
positioning. Consider that of the 33,185 food, beverage, health and beauty,
household, and pet products introduced in 2004, just 6.7% were truly different.
According to Productscan Online, an online new products database that
annually evaluates introductions, this number represents a new low and
is down significantly—from 8.6% of products introduced in 2003. As
Productscan Online reported, "Clearly, 'me-too' type products were
the order of the day in 2004, suggesting that packaged-goods companies
were more concerned with addressing competitive weaknesses than with dazzling
consumers with highly unique items." And our experience with B2B
products and services isn't much better. A recent article in The McKinsey
Quarterly summed it up best: "They (companies) all want to occupy
the point on the strategic landscape that their most successful competitor
has staked out. Soon other competitors can be seen herding, lemminglike,
around the best-practice company's product, pricing, and channel strategies." Perhaps the most damning
proof of the virtual absence of strong differentiation strategies is that
most marketing programs don't work. Here are some of the lowlights.
For these reasons, some companies are rethinking how they approach branding and are beginning to talk about building "Six Sigma" brands. It's Greek to Me Many have heard the
term Six Sigma bantered about in business conversation, but until recently
it hadn't entered the marketing lexicon. This methodology for process
improvement got its start at Motorola in the late 1980s, when the company
launched a large-scale quality improvement effort and dubbed the initiative
Six Sigma. The name referred to the Greek statistical term for standard
deviation and the company's goal to deliver defect-free products and services
99.9997% of the time. (Motorola reduced acceptable performance to 6,210
defects per 1 million. If you do the math, this translates into four sigma,
or being defect free 99.379% of the time. Six Sigma must have just had
a ring to it.) Other companies, most famously General Electric and 3M,
subsequently adopted this approach and generated impressive financial
improvements. The dramatic success in other functional areas has many
CEOs chomping at the bit to apply this methodology. The guiding principle
behind Six Sigma is the careful measurement and analysis of unimpeachable
data. This means determining why a process isn't working as well as it
could or should, and taking meticulously managed steps—guided by
the data—to permanently fix the problem. Six Sigma branding is a
call to abide by this code of conduct, and to develop and launch extraordinary
marketing programs that perform well above the disappointing average common
these days. A Six Sigma brand's "DNA" consists of seven strategic elements.
The First DNA Strand Because target and positioning are the foundation for the other Six Sigma brand elements, we want to be absolutely clear: We're not talking about your parents' strategies, which were in all probability selected like melons in the grocery store-using intuition alone. A Six Sigma target has five characteristics:
Profitability, not
revenue generating ability, is the Six Sigma target's defining trait. A Six Sigma positioning
is not based on the attribute or benefit "most important" to
buyers. When a banking customer says "offers online banking"
is very important, this isn't the same as a customer saying he or she
presently has a problem with it, or that no brand currently offers it.
In fact, many of the characteristics most important to buyers are the
basic needs and requirements of a product or service—and are already
addressed by every brand (e.g., great taste in the soft drink category
or accurate statements in banking). They're the price of entry for doing
business in a particular segment. Simply being better at delivering basic
needs and requirements is not going to generate a groundswell of sales
or offer a significant competitive advantage. Exceptional positionings, like great products, often address buyer problems. The bigger the problem your brand can solve—for the financially optimal target—the bigger the market response. To uncover the big problems, we suggest balancing judgment and professional opinion about buyer needs with qualitative research. Compile a list of about 300 buyer problems. Next, measure each problem in terms of motivating power in a survey of 300 customers and prospects minimum, on three dimensions.
Completing the
Helix The next task is to
assemble the second DNA strand. This begins with crafting the positioning
statement, brand essence, and brand personality. A positioning statement
is a two or three word message you want seared into your target buyers'
minds. It should meet three essential requirements.
Now it's time to bring
the brand to life with vision, architecture, visual identity system and
tag line, and communications plan. A brand vision provides a purpose or
meaning that every stakeholder—from line worker, to stockholder,
to industry analyst, to customer—understands and embraces. It describes
what your company is passionate about becoming, achieving, and creating,
and it articulates goals beyond current capabilities. The best visions
are inspirational, aspirational, specific, and bold; they move us and
get our blood pumping. They are also readable—not arcane, overly
wordy, or trying to impress us with vocabulary. Brand vision provides
the lofty goal, but brand architecture provides the organizational grounding.
It specifies the structure, nomenclature, and relationship of the company
or brand's various components. The Coca-Cola Company has a portfolio of
brands (e.g., Coke, Sprite, Dasani, Barq's, Minute Maid) and each has
one or multiple extensions (e.g., diet, low carb, caffeine free, with
lemon), whereas IBM has one brand extended across categories (e.g., IBM
personal computers, services, software such as Lotus). The architecture
should fit how buyers make choices in the category; for example, a decision
in the soda category might follow this path: soft drink vs. not, diet
vs. regular vs. low carb, and cola vs. other. Meanwhile a decision in
B2B IT goes something like this: computers, servers, and software. The visual identity
system and tag line are the public face of the brand. The visual identity
system is the physical embodiment of the brand's personality-name, symbol,
logo, font, color palette, and package—and the tag line captures
the brand's spirit. Both should score high on the attention grabbing scale,
while being memorable and likable. The varying colors of the apple logo
for the Apple brand, as well as the tag line "Think different"
are good examples. Finally, there's the communications plan: how, when, and where the brand will "touch" the buyer. It includes the overall budget, as well as the mix of traditional and non-traditional media the firm intends to use. Ideally, while a firm does the research to identify a profitable target, it collects information about media habits, internet usage, openness to direct mail, and so on. This can be used to inform the plan. We also recommend taking advantage of today's available customer equity and marketing mix models, to determine the ROI of different communication channels. The plan to look for is the one offering the highest ROI—in terms of sales and other brand metrics, such as positioning penetration and overall brand equity, with or without or within budget constraints. The Future Is in
Your Hands If you stick with the visual and verbal trappings of a brand, you doom marketing to continued poor performance; mass commoditization will rapidly ensue. But if you develop Six Sigma brands—brands not just better than your competitors', but transformational in their effects on markets, companies, and managers' careers—you save marketing from further corporate obscurity. Branding is synonymous with marketing; it's developing all the strategic elements and implementing them obsessively. Treat branding as such, and you'll see performance of which most marketers only dream. Additional Reading
Clancy, Kevin J. and Peter C. Krieg (2000), Counterintuitive Marketing: Achieve Great Results Using Uncommon Sense. New York: Free Press. Ephron, Erwin and Gerry Pollack (2003), "The Curse of Lord Leverhulme," AdMap, (July/August). Hanssens, Dominique M., Leonard J. Parsons, and Randall L. Schultz (2001), Market Response Models: Econometric and Time Series Analysis, 2d ed. New York: Springer.
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