BUILDING A BRAND

by Chuck Jarvie
Monday, February 11, 2019

FROM DR. PEPPER TO JIF

INTRODUCTION

By Edward J. Crawford, President of Coltala Holdings

One of the unique resources we (Coltala) bring to our companies and investments is proven expertise in building their brand (s) and subsequently translating this stature to sharply increased market value.

We are fortunate in this to have as a founding board advisor Charles "Chuck" Jarvie. Chuck is a nationally recognized expert in this area with a long string of significant successes spanning many industries and companies.

In this work, Chuck has developed and implements a set of base principles which have stood the test of time and generated far above average returns for company management and investors.

Coltala is applying these now and, rather than keeping them strictly in house, shares them here for your consideration.

Of course, articulating these and effectively applying them are two different things. Coltala companies get the application - in depth.

These are his principles on Branding.

PRINCIPLES AND PROCESS

This is a generic exposition, but it is not theoretical. Rather, it's gleaned from experience from many products/services across a range of industry. These range from packaged goods to financial services to beverages to direct mail. 

From 50 years in this world, I've concluded that basic brand building varies little in either characteristic or process whatever the specific market. In fact, while each industry and its associated culture insists it's "different," the reality is the fundamentals never vary. Only the tactics. 

Thus, the concept of a brand property demands recognition that overall principles pertain. Without such fidelity, it's unlikely that an effective model or commercially effective program can be designed/implemented.

WHAT IS A BRAND? – CHARACTERISTICS

All products/services are "branded" (e.g., identified), but relatively few command brand position. Those that do all, have these characteristics:

  1. A sharp, distinct image among target consumers which can be summed up in one phrase. "It Floats," Marlboro Man, "Care Enough to Send the Very Best," "The Real Thing." These slogans convey a set of product values that consumers have learned to shorthand to an overall image. Slogans don't make a brand (a common mistake) but brands are easy to summarize. It's called "USP" - Unique Selling Proposition.
  2. True value-added performance attributes. Brands are real in that they deliver actual benefit to consumers. This may be tangible (moist cakes) or psychological (deodorants) but they are important to consumers. Industrial brands usually must deliver measurable, specific benefits superior to competitive options to prosper.
  3. Relatively price inelastic with core consumers willing to pay some premium to obtain value added benefits.
  4. Long standing and progressive. Brands are not fads nor creatures of opportunistic management. They sustain with core consumer's by providing a stable value that's kept in tune with the times.
  5. A definite and sensitive consumer feedback system which ensures brand value maintains (and that shifts in consumer desire are anticipated) and satisfied on a proactive - not reactive - basis.

Most brands that fail - A and P, Howard Johnson's, 7-Up, Kodak, etc., are those that haven't maintained and nurtured a partnership with their consumers. 

Brand names that never attain brand status usually don't have consumer relationship at the start. 

Industrial brands have as consumers other organizations. But the feedback need and implementation is the same. Some brands operate at both levels - with advertisers directly and to consumers on their behalf. 

These five characteristics add up to one absolutely vital point: 

Brands are about consumer satisfaction ("pull") not consumer sale ("push"). 

BUILDING A BRAND - THE PROCESS

Obviously, brand status is a precious asset. If it were easily obtained all would do so. All try - but "while many are called - few are chosen" (by consumers). 

So, how does one go about the quest?

THESE ARE FIVE STEPS TO UNDERTAKE:

  1. Product evaluation. Most products/services don't really have the right to aspire to brand status. They lack true value-added performance attributes compared to competition or any true value (e.g., cost advantage). They are, in fact, commodities which always means "subject to retailer control."
    They are not subject to intrinsic differentiation. Thus, they must rely upon advertising and/or promotion activity to get away from the pack.
    This is called "Borrowed Interest" and it seldom works - and never for long.
    Net, consumers can't be faked out. If a property lacks true value added it won't be a brand. This crucial, objective evaluation is the first step.
  2. Value-added definition and articulation. Upon ascertaining value-based differentiation potential, the brand's "USP" must be carefully defined and simply expressed. This requires close identification of consumer targets since the "USP" must be expressed in their terms. This discipline leads naturally to sub-strategies in communication, promotion, additional product development and business/budget planning.
  3. Business plan construction. Quite often, companies get steps 1 and 2 about right and then preside over a massive disconnect to actual implementation planning. This is when the pressures from other constituencies intervene (e.g., the sales department, the retailer, etc.).
    As a result, the plan to make the brand actually happen bears little resemblance to its basis for existence.
    Additionally, brand-build plans have - or should have - two time frames; (1) the annual operating budget; (2) the 3 - 5 year establishment period. The former deductive to maintain fiscal control; the latter inductive to produce a final result. 
    Both plans should be specific as to objectives.
  4. Business plan implementation. Again, a step where many brand failures occur. It's essential that sufficient discipline be built into operations to ensure that brand-build objectives are not negated by short-term operating issues. This is called brand management.
  5. Create a sound consumer and market feedback loop to insure the build plan is impacting as planned. And, to make inevitable adjustments.

This includes, of course, business results but, also, communications with customers on a regular basis. 

Superficial consideration would seem to support this group/entity as having brand status potentials.

 

 

Coltala Holdings Executive Team (alums of Goldman Sachs, The Boston Consulting Group, Harvard and MIT) have joined forces to create a new concept in private equity investing. Ralph Manning, co-founder and Chief Executive Officer; Edward Crawford, co-founder and President; Chris Goodwin, co-founder and Chief Operating Officer; Christine Spadafor, Managing Director; and Damon Baker, Managing Director and Head of CES, bring broadly diversified expertise in both for-profit and not-for-profit sectors to their portfolio companies.

Coltala Holdings is a diversified holding company with a unique and proven enterprise system - The Coltala Enterprise System™ - that enables high-potential, small and mid-size companies to achieve optimal scale. With our deep bench of experienced industry professionals, and more than 100 years of combined experience, Coltala is well positioned to acquire and unlock the potential of family businesses and privately-held companies in the manufacturing and consumer and business services industries. We are committed to being conscientious stewards of your company's legacy and to working with you and your team to take your company to the next level.

Charles L. (Chuck) Jarvie, Coltala Holdings Board Partner

Chuck Jarvie
Board Advisor
Coltala Holdings

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Coltala Holdings Executive Team (alums of Goldman Sachs, The Boston Consulting Group, Harvard and MIT) have joined forces to create a new concept in private equity investing. Ralph Manning, co-founder and Chief Executive Officer; Edward Crawford, co-founder and President; Chris Goodwin, co-founder and Chief Operating Officer; Christine Spadafor, Managing Director; and Damon Baker, Managing Director and Head of CES, bring broadly diversified expertise in both for-profit and not-for-profit sectors to their portfolio companies.

Coltala Holdings is a diversified holding company with a unique and proven enterprise system - The Coltala Enterprise System™ - that enables high-potential, small and mid-size companies to achieve optimal scale. With our deep bench of experienced industry professionals, and more than 100 years of combined experience, Coltala is well positioned to acquire and unlock the potential of family businesses and privately-held companies in the manufacturing and consumer and business services industries. We are committed to being conscientious stewards of your company's legacy and to working with you and your team to take your company to the next level.