Naming In The News
The Brand Name Game
Tough Times, Holiday Decisions Put Focus On Branding
(CNN) — If it's Energizer, it's that cool, drum-beating bunny that keeps on going and going and going. If it's Wal-Mart, it's everything you need at low prices. If it's Saks Fifth Avenue , it's high class, all the way.
And if it's holiday shopping season, especially when your list is long and time is short, it's a reality: Brand names, and the messages behind them, do matter.
For cynical consumers, "branding" is style over substance, with companies using the media to manipulate minds to maximize sales. But experts insist that branding need not be a dirty word, particularly if smart shoppers use it to their advantage.
"The power of the brand name to consumers is a shortcut — it provides a way to simplify things," says Kevin Keller, a professor of marketing at Dartmouth College's Amos Tuck School of Business.
"You should choose brands that you like and feel good about, that fit your image. But the brand is not a substitute for the product: The product has to work."
Brand names, in a sense, have been around as long as products have been sold — a way for consumers, based on past experiences, consumer inquiries and external influences, to have faith in what they're buying and who they're buying it from.
And experts say big brand names could get even bigger this holiday season. In tough times, like now with the sluggish economy and the prospect of terrorist attacks and war with Iraq , shoppers want to minimize headaches and buy products they can count on.
"If you [analyze] the advertising today, you see that trust and reliability are at the forefront of most sales propositions," says James Detorre, president and CEO of the consulting firm Brand Institute. "Everyone's thinking about so many things."
Then, as in every holiday season, there's the "cool" factor. Not only does a buyer want to know his gift is trendy and top quality, he wants to make sure the recipient knows it, too.
"The brand name gives shoppers assurance based on the perceived quality of the brand and because the purchase will mark them out to the gift recipient as someone of discerning taste," says Jack Yan, head of an international media, communications and consulting company.
"It's a double buzz: 'I know this gift will be good and they will think I am so cool.'"
Creating a brand
From celebrity plugs to magazine spreads to in-store displays, companies employ a variety of measures to boost brand recognition and entice customers.
"Brands have to start with a strong vision ... so everyone understands what it stands for," says Yan, CEO of Jack Yan and Associates, which has 10 offices in seven countries.
"In an industry where nine out of 10 players are roughly the same, the consumer is going to remember the 10th player that is different."
Of course, not all exposure is positive. Yet some of history's biggest sales spikes can be attributed to inadvertent marketing.
In 1996, for example, talk show host Rosie O'Donnell's relentless, largely unsolicited promotion of "Tickle Me Elmo" dolls helped make the high-pitched, soft-hearted monster a holiday must-have.
And Run DMC's touting of Adidas shoes in the mid-1980s triggered a wave of rap music commercial tie-ins that continue to the present day.
This summer's hit song, "Pass the Courvoisier," by Busta Rhymes and P. Diddy, bolstered the namesake cognac's sales more than 10 percent, the New York Times reported.
Rappers Foxy Brown, Ja Rule and others have worn and sung about Burberry (among others) frequently in the past year; whether it's coincidence or not, the high-end retailer's sales soared during that stretch, according to numerous industry reports.
But companies don't always embrace their impassioned promoters. Burberry, for instance, has resisted calls to pair up with rappers, reports the Village Voice.
And none of the 13 main advertising images on the company's Web site has an African-American, much less anyone resembling the dark-skinned, often seductively clad Brown.
The reason, experts say, is companies want to control their own message, sometimes skirting short-term gain for long-term success in the process. Their end-goal is to craft a strategy and brand that stands the test of time, i.e. Barbie instead of Furby.
"Any timeless brand innovates and stays relevant, but a fad brand doesn't stay relevant," says Keller, one of the world's top authorities on branding.
"And a great product is at the heart of a great brand. It's very hard to dress up something that doesn't fulfill its promise."
Creativity a must in hard times
A shaky economy and tenuous international situation have fueled corporate concerns for this holiday season.
The National Retail Federation, the world's largest retail trade group, forecast this fall that holiday retail sales will rise 4 percent, down from last year's 5.6 percent increase.
"They're really crossing their fingers, because the disposable income is so low," Detorre says. "It's going to take a lot to trigger that emotional buying habit."
What's spent this holiday season could make a big difference in many retail products' bottom lines, especially brand names. Stores can rack up 20 percent to 70 percent of their annual sales in late November and December.
Consumers tend to know more about products they buy for themselves during the year over what they buy during the holidays, when they may have a limited amount of time to buy items they know less about.
As a result, they historically spend more on brand names — items that they know by ad campaigns or word of mouth, if not extensive research and personal knowledge.
So big companies and brands are trying new ways to lure consumers, hoping they shop earlier and often.
Macy's San Francisco , one of the world's largest department stores, had Christmas decorations up in early October, says Detorre, and stores nationwide are stressing service.
"Advertising will come a lot sooner, there may even be more pre-holiday sales because stores have to survive," he says. "[Companies] have to be more creative and fun, so people can take their minds off other issues."
Experts cited several examples of companies who have excelled at the brand name game — creating a coherent vision, engaging consumers and expanding their customer base. The best-of-the-best include:
Ikea: The Swedish-based furniture behemoth has expanded rapidly thanks to its stylish yet inexpensive designs.
Intel: How to measure Intel's success? Today, people who don't know a hard drive from a hardhat know Intel.
H&M: This clothing retailer is on the rise, combining the best in cutting-edge tastes with cost-effective prices.
Starbucks: A decade ago, Starbucks wasn't even on the menu. Today it's everywhere, with uniform quality and a warm feel.
Palm: Despite an onslaught of competitors, Palm has held its own thanks to sound research and smart strategy.
Dell: Dell bridged the gap between technophobes and geeks with quality customer service and an engaging public image to match its corporate atmosphere.