Merriam Associates, Inc. Brand Strategies » Brand Architecture

Kraft Crack Up — Breaking Up the CPG Behemouth

LDMerriam — Thu, 04 Aug 2011 18:41:59 +0000

Just 18 months after getting it all together, consumer packaged goods giant Kraft announced today that it is breaking up. It turns out that Kraft executives have discovered the grocery business has different needs that the snacks business. In a conference call with the Kraft CEO, one participant called the break up “rearranging the furniture.” Kraft CEO characterized one company as a “truly ubiquitous snacking powerhouse” and the other as a “lean, mean center-of-the-store machine.”

One question remains: What will the new companies be called?Which one will keep the Kraft name? Lets hope the old General Foods name will not come back. Equally bad would be a hybrid such as Kraft-Cadbury. And, of course, calling both companies Kraft would repeat the mistakes made by Motorola and Marathon.

Let’s hope at least that the much maligned new Kraft logo is finally laid to rest.

More on corporate break ups and spin-off brand name challenges:
Breaking the Motorola Brand
Marathon Spin Off Runs Into Brand Confusion
Fortune Brands: Sum Not Greater Than Whole
Sara Lee Spins Off with Right Approach to Brand Names

Huffington Post Won’t Hurt AOL Brand; Then Again AOL Isn’t Much of a Brand

LDMerriam — Fri, 11 Feb 2011 17:23:01 +0000

The media universe is in a tizzy (and a-Twitter) about AOL’s acquisition of the Huffington Post. The Wall Street Journal interviews top media buyers who are worried that the liberal voice will hurt AOL’s brand. The problem is that AOL doesn’t really have much of a brand. The company’s move away from an “access” business model (remember the old days of getting CDs in the mail from AOL that let you get on the Internet for $19.99 a month?) to a content company has been slow and less than successful. Competition in the area is overwhelming.

Buying a successful media company, any media company, will help AOL make the transition regarding content. The question is does AOL want to have a political point of view:

They could take the anti-Fox position as a national liberal voice. The problem is that the field is crowded by “mainstream” media including the three legacy broadcast networks, big city newspapers, and other upstarts like the HuffPo.
Beating Fox at its own game is not a good bet to make.

Perhaps the best option is to keep the Huffington Post as a separate brand and retaining its voice and focus intact. AOL can then buy additional focused brands across the spectrum of interests. Each brand can stand distinct and earn its own special following (see this article on the multiple brand approach to brand architecture). AOL with Huffington Post has a better chance at this strategy than, say, NBCU. Many of NBCU’s most high profile brands carry “NBC” in the name. Such a unified naming approach makes it impossible for MSNBC to stand as a liberal voice and NBC to stand as just-the-facts-neutral. And the supposedly separate MSNBC.com brand is not separate at all. (More on NBC brand problems)

Indeed, statements from AOL indicate this could be a possibility. Huffington Post’s traffic is only 15% politics, according to Arianna Huffington, with growth mostly in the areas of women’s issues, books and culture. Yet, with Huffington at the helm, how successful will AOL be in achieving broad reach?

Fortune Brands: Sum Not Greater Than Whole

LDMerriam — Thu, 09 Dec 2010 04:07:45 +0000

The potential break up of Fortune Brands will unlock tremendous brand value. The brands in this company’s portfolio have little relationship with the parent company or each other; they simply happen to be owned by a single holding company. Fortune Brands today is a prime example of how a poor brand architecture strategy actively diminishes value. The value Fortune Brands brings as a holding company is questionable. The Moen faucet business is completely different than the business of manufacturing and marketing Titleist golf balls. A single company cannot be equally excellent at both. Activist investor William Ackman who is pushing for the break up is correct that the company is worth more in pieces than it is today.

Break It Up Further

The current thinking is that Fortune Brands would retain its alcoholic beverage business and spin off the golf business (that includes Titleist, Foot Joy, Pinnacle and Scotty Cameron) and the home improvement business (including Master Lock, Moen, Aristokraft Cabinets, Fypon, and Simonton Windows among others). Yet, this is probably not enough. Some of the brands in the spun-off divisions are probably worth more sold as individual brands to specialty companies. There isn’t a logical reason why the same company should sell padlocks and kitchen cabinets.

Trim the Spirits Portfolio

Furthermore, Fortune Brands should take a careful look at the business it plans to keep. Their current brand portfolio contains some extremely well-known and profitable brands and brands with great growth potential. At the same time, this list contains a number of niche products that are not at the top of their category in terms of market share or potential. Fortune Brands can shed the weaker brands to focus time, money and resources on the brands that can profitably grow in the future. Which brands would you trim from this list?
Spirits
Jim Beam
Maker’s Mark
Old Grand-Dad
Old Crow
Distillers’ Series
Booker’s
Baker’s
Knob Creek
Basil Hayden’s
Old Overholt
Ri1
Canadian Club
Teacher’s
Whisky DYC
Windsor Canadian
Lord Calvert
Tangle Ridge
Alberta Springs
Kessler,
Furst Bismarck
Laphroaig
Ardmore
Sauza Tequila
Hornitos Tequila
El Tesoro de Don Felipe
Courvoisier
Salignac
VOX
Wolfschmidt
Kamchatka
Effen
Cruzan Rum
Ronrico
Fundador
Terry Centenario
Jacobi 1880
Tres Cepas
DeKuyper
Starbucks Coffee Liqueur (they might want to watch out for this license–see what happened to Kraft!)
Kamora
Kuemmerling
After Shock
Leroux
Castellana
Sourz
Cockburn’s
Harveys

More on Brand Architecture:
What is Brand Architecture
Approaches to Brand Architecture
Brand Architecture: Strategic Considerations
General Motors: A Reorganized Brand Architecture for a Reorganized Company

General Motors: A Reorganized Brand Architecture for a Reorganized Company

LDMerriam — Tue, 23 Nov 2010 04:28:41 +0000

General Motors has done more than reorganize its finances. GM has turned its brand architecture upside down.

Trimming nameplates like Pontiac, Saab, and Hummer from its stable of brands was just one aspect. Beginning in August of last year, the GM “chicklet” logo has been quietly disappearing. It is no longer slapped on the doors of every car.

It has disappeared from the Web site.

And in the ads touting the “new GM”, only the new name of the company is used, spelled out in letters. The logo has disappeared.

Indeed, the individual nameplate brands are actually and literally now on top and front and center:

Reorganizing the company’s the brand architecture makes sense for a number of reasons:

1) The GM name will always be associated with “Government Motors”

2) The individual brands appeal to very different clientele. The Cadillac buyer sees no benefit to being associated in any way with the Chevrolet brand. The constant linking of GM with each brand did just that.

3) No one actually bought the GM brand anyway—it was always about the name plates–you bought a Chevrolet, Buick, GMC or Cadillac not a GM.

4) Should General Motors seek to sell off any additional name plates (like Opel), distance from the parent company gives the spun-off brand a better stand-alone chance.

5) Maybe, just maybe, the brand change will help change the company’s highly bureaucratic corporate culture.

UPDATE: A new ad has begun airing with the familiar blue GM “badge” as the sign-off:

…always good to see some snippets of Animal House.

More on Brand Architecture:
What is Brand Architecture
Approaches to Brand Architecture
Brand Architecture: Strategic Considerations
Does Your Brand Architecture Support Your Business Strategy?

MSNBC vs. MSNBC.COM Just Part of a Bigger Name Problem

LDMerriam — Tue, 12 Oct 2010 16:32:45 +0000

Media insiders are buzzing about a potential name change for MSNBC.com. NBC Universal and Microsoft want to distance their co-owned Web site from the cable channel. MSNBC.com president Charlie Tinllinghast is quoted in the New York Times complaining the MSNBC “Lean Forward” repositioning “only exacerbates the brand misaligment problem.”

The fact is the name problem is bigger than just the Web site; the entire portfolio of brands with “NBC” in their names has a brand identity problem.

Different Brands with the Same Name
NBC Universal owns a number of “NBC” brands. While the uniqueness of each media property might be clear insiders, to the average viewer, they all are inextricably tied to the NBC television network. Thus the MSNBC cable channel brand impacts the MSNBC.com brand as well as NBC News and CNBC.

NBC Needs Many New Brands
As individual NBC media properties evolve to serve different purposes and to appeal to different audiences, each needs its own name—names that differentiate and that work to support the intended market position of each property.

Recommendation for Renaming Key NBC Properties

NBC Television Network and NBC News: These brands date from the birth of television and have decades of equity. The “Peacock Network” should never rebrand.

MSNBC.com: This property continues as a joint venture of NBC and Microsoft and is meant to supply news content to Microsoft’s fading MSN property. MSNBC.com also serves as the online presence for NBC news. The question is: How important is Microsoft to NBC News viewers and Web site visitors? If the answer is “not very”, the Web site should be renamed NBCNews.com. Microsoft, as a brand, brings some negative baggage of its own.

MSNBC Cable: Microsoft has minority ownership of the channel and has zero relevance to the “Lean Forward” positioning. MSNBC needs a totally new name with a matching Web site that supports its political positioning. The channel would thus join other distinctive NBC Universal television brands including Bravo, Oxygen, and Syfi. Renaming the MSNBC creates a big opportunity to emphasize the channel’s bold new positioning.

CNBC: Originally the name meant “Consumer News and Business Channel”. With that meaning dropped, the name no longer makes sense. To compete against Bloomberg News and Fox Business, CNBC needs a vivid and distinctive name of its own.

The peacock cannot be a chameleon showing different colors in different situations. NBC in the eyes of viewers is one singular brand idea, whether expressed within MSNBC, MSNBC.com or CNBC. To stand out in the market, each brand needs a new name and identity.

More on Naming:
Six Factors for a Memorable, Motivating Brand Name
History of Great Brand Names: How Best Known Brands Were Named
Styles and Types of Company and Product Names
How to Choose a Name
Naming in Our Web 2.0 World
Does Your Approach to Naming Your Company Products and Services Support Your Business Strategy?
How Different Companies Have Approached Naming Products and Services
Case Study: Rebranding Proxios
Selected Name Portfolio

Does Your Brand Architecture Support Your Business Strategy?

LDMerriam — Fri, 25 Sep 2009 01:37:06 +0000

Brand architecture is not a set-it-and-forget-it proposition. As your business changes, the brand architecture worked in the past may become a hindrance. Companies facing issues like the ones below often find they have a brand architecture problem.

Your corporate brand’s meaning and role is vague and confused.
Who is the audience for the corporate brand? How does it relate to your divisions, products and services? Do you use it everything you sell? Should you? Is it mostly invisible to customers?
Your brands don’t communicate the scope of your company.
Do investors and customers not know and appreciate your company in totality? Are you known for one aspect of your business, but not others? Do you have product brands that overshadow your company brand.
Your brands compete, cannibalize, overlap and confuse.
Does more than one brand appeal to the same target for similar products? Are product differences real to customers or are they the product of mergers, acquisitions, or internal politics?
You have too many brands.
Do brands have to compete for scarce resources, no one brand ever getting what it really needs? Are you spending too much for too small a return? Is bundling services and cross-selling is confusing and difficult?
You have too few brands.
Are you expanding into new areas where your existing brands can’t extend? Will you be introducing a radical new offering?
You have a hodge-podge of brands from acquisitions and innovation.
Does your company accumulate brands through acquisitions? Does innovation constantly create an impulse to give everything a name of its own? Do you keep brands for sentimental, political or anecdotal reasons without an understanding of a quantifiable business case?

If your company is facing any of these issues, it is time to evaluate your brand architecture and review your options.

More on Brand Architecture:
What is Brand Architecture
Approaches to Brand Architecture
Brand Architecture: Strategic Considerations

What is Brand Architecture

LDMerriam — Fri, 25 Sep 2009 01:34:33 +0000

Brand architecture is more than integral piece of your company’s brand strategy—it directly addresses your company’s business strategy. Brand architecture is organizing structure that specifies the type, number, relationship and purpose of brands within your brand portfolio.You are dealing with brand architecture issues when you consider questions such as

How does my company brand relate to my product brands? How do they relate to one another?
What is the best role for the corporate brand?
Does the corporate brand add or subtract value to division brands?
Are sub-brands and brand extensions the way to go? What are the other options?
Do I have true brands that are delivering value to my company or do I have a collection of names? How can I tell which is which?
How many brands does my company need?
What brands are strategically valuable and worthy of continued investment?
What drives consumer preferences? How do my customers buy?
What are the pros and cons of my current brand portfolio structure? How will future decisions impact it?
Would a change in my architecture give me an opportunity to dominate a market segment?
What do I risk if I make changes? How can I mitigate risks?

A well-managed portfolio of brands builds value and eliminates market confusion, waste and missed opportunities. The ideal brand architecture for your company improves business performance and supports your business strategy.

More on Brand Architecture:
Approaches to Brand Architecture
Brand Architecture: Strategic Considerations
Does Your Brand Architecture Support Your Business Strategy?

Brand Architecture: Strategic Considerations

LDMerriam — Thu, 24 Sep 2009 16:07:47 +0000

What is the best structure for your brand portfolio? The answer depends on a number of strategic considerations:

Audience Diversity	What are the target segments for your brand? Is the brand focused on just one audience or must it appeal to many?
Brand Elasticity	How far can each of the brands stretch to cover different products and markets? Harley Davidson made a classic blunder applying their brand to wine coolers.
Product/Service Offerings	How are other brands in the portfolio positioned and targeted? Are some of your brands complementary, competitive or incongruent?
Competitive Context	What are competitive branding practices? How do customers view the marketplace? Do your brands help you stand out and grab market share?
Brand Equities	Do you have brands with a particular following or a unique heritage or equity must be carried forward?
Geographic Needs	How consistent are needs/preferences across cultures and markets? Strong local brands might not work in other countries. Not every brand can “travel”.
Organizational Structures	Who is accountable for branding practices and standards? What are the political realities behind brands in your portfolio?
Ownership	Does the organization have legal control over its brand? You’ll have less leeway with licensed brands.
Sources of Growth	What businesses and brands are expected to drive future growth for your company? Are they helping you pursue your strategy?
Purchase Criteria	How do people buy your products? Do they ask for products by brand name or do they ask for a generic name or your company brand name? Do your brands make buying easier? How much do people want or need your brands?
Brand Performance	How do brands perform against desired attributes? Is their positioning clear and effective?
Brand Role	What is role of brand in fulfilling the business model? How important is the brand in driving awareness or creating loyalty?
Channels	What channels and distribution methods are available and how are they used across the brand portfolio?
Company Specific Issues	What considerations are specific to your company or industry? What might be technically correct might not be feasible in the reality of your company. Sometimes theory has to bow to practicality.

More on Brand Architecture:
What is Brand Architecture
Approaches to Brand Architecture
Does Your Brand Architecture Support Your Business Strategy?

Approaches to Brand Architecture

LDMerriam — Thu, 24 Sep 2009 11:09:38 +0000

Companies manage their brand portfolios through a number of brand architecture structures, driven by company culture, markets and customers, and goals.

Single Unitary Brand Architecture
One brand creates a single powerful image, sometimes with a descriptor.

Marketing is more efficient. With one brand front and center, cross selling and cooperation are easier. The brand can lose focus as it must be everything to everybody. Acquisitions might be reluctant to have their brands disappear. New businesses might not fit under an inelastic single brand.

Multiple Brand Architecture
This structure is favored by decentralized companies targeting diverse markets. Brands are independently run and even compete against other brands within the portfolio.

While acquiring and divesting companies is relatively simple, investors don’t always recognize the scope and value of the company as a whole. Supporting many brands is expensive and time consuming. Cross selling and cooperation are difficult.

Hybrid Brand Architecture Structures
Market pressures, organizational dynamics and limited budgets often make a hybrid approach more realistic.

Companies use models with varying degrees of flexibility. Often the corporate brand endorses the product or service brand or the product or service brand functions as a sub-brand of the corporate brand.

More on Brand Architecture:
What is Brand Architecture
Brand Architecture: Strategic Considerations
Does Your Brand Architecture Support Your Business Strategy?