Posted Notes

The financial brains behind the deal need to look far beyond the figures and perhaps at a number of pervious mergers that looked good on paper but were poor in practice. Previous international brand marriages have failed, for example Daimler Benz and Chrysler, where the differences between US and German culture were similarly underestimated. 

A key decision that the parties involved would need to consider at the consumer level is which brand is actually stronger and which name to use or drop? Hard questions need to be asked about which brand can deliver the greatest value in all markets considered. 

There should also be concerns about how the deal is going to play out on the shelf. At a cosmetic level, will we see a hybrid logo of the two brands as Kraft attempts to be all things to all buyers and appease the tastes of its very different audiences? Or will the merger be purely at the corporate level, leaving the brand architecture untouched. I doubt the British public would react favourably to changes to the packs of their beloved chocolate bars to reflect the new status quo. 

And while the tax man concerns himself with high net worth British executives seeking tax havens abroad, has anyone considered the national implications of moving a British industry staple across the pond, nevermind the national psyche? 

When it comes to the crunch, egos must be left at the boardroom door, otherwise all stakeholders involved will suffer financially.

To help make these decisions properly, a thorough brand audit must be carried out, which is as important for internal as external communications. M&A activity inevitably has a huge impact on employee engagement. It’s all too easy to worry about the shareholders, rather than the thousands of people that will inevitably fear for their jobs.

 Terry Tyrrell – worldwide chairman, The Brand Union

terry.tyrrell@thebrandunion.com

According to the DBA’s Charge Out Rates survey, Packaging is the most lucrative discipline for design agencies, with packaging design commanding the highest salaries and rates. Dave Brown unpacks the reasons why. 

- Why is packaging design charged out at the highest rate of all the design disciplines?
Because arguably it delivers the highest ROI. Simply put, it delivers the highest value. Dollar for dollar, investment in the product brand at point of purchase has the potential to deliver a higher rate of return than $ spent in or through any other media channel. Rich consumer insights, together with focused and differentiated brand positioning, expressed as compelling packaging design has the ability to win the hearts and minds of consumers at point of purchase.

On air 24/7, it delivers the highest value $ for $.

- Why is POS / Exhibition design the cheapest?
Possibly because in some cases Point of Sale (POS) material has been managed as part of a trade marketing function, when in actual fact it should be regarded as an integral component of the product brand delivery, managed by the brand owner. Sometimes, the two assets are managed independently and not integrated as a part of a total ‘shopper’ experience. In many instances, the retailer governs the rules in product merchandising with stringent in-store regulations.  This, like a straight jacket takes away some of the flexibility to deliver a richer brand experience at POS.

- Why has packaging design, in a historical context, commanded a premium?
Premium? Measured against what? If we took a corresponding % growth uplift delivered by compelling design, the premium should be higher! Packaging design costs may command a perceived high rate, but arguably it delivers the highest value. In recessionary times especially, astute brand owners deem better to invest in product brand and packaging at POS than in any other marketing communication channel. Packaging after all has the longest ‘shelf life’.

‘Bottom line’, it’s not expensive, it’s the best value for money, considering the impact compelling brand design delivers. It should command a higher fee!

– Dave Brown, UK Chairman, The Brand Union – London

dave.brown@thebrandunion.com

American Express is repositioning its brand to be perceived as being more contemporary and customer-friendly with its biggest marketing campaign in four years.

At a macro level, American Express’ new campaign is an interesting move that denotes an assertive move towards a greater focus on Customer Service.

The shift from their previous campaign, association with celebrities and celebrity endorsement, is indicative of changing times, moving towards a proposition centred around consumers and how they can help – or enrich – the lives of their clients. While still centred on status, American Express is demonstrating how their product can be perceived as a beneficial tool.

On the whole, Financial Services brands will have to offer more value in order to support any associated fees or additional costs. And as the economic conditions improve, I believe we will see more financial services brands repositioning themselves for a new consumer landscape that is more demanding and discerning.

American Express’ focus on boosting their consumer appeal is the next step of a continuing process of building a strong consumer franchise, signs we’ve already seen in a move towards more innovative products and affiliations with the likes of Bono’s campaign with the RED card. Through a number of means which we are likely to see over the coming months, they are reasserting their consumer credentials and strengthening their service commitments.

– Simon Bailey, CEO, The Brand Union – London

simon.bailey@thebrandunion.com

 The FT ran an interesting article recently that puts the spotlight on the interesting advertising industry issues at present, most especially the jostling of power between traditional agencies and new kids on the block Digital. 

“This digital discombobulation, combined with the recession, has taken its toll not only on advertising budgets and fees but also on the self-esteem of a vast industry”

As journalists Tim Bradshaw and Andrew Edgecliffe-Johnson observe, “The sector is facing huge cyclical and structural upheavals.” 

Without a doubt we’re in the eye of a hurricane and models need some review, but I think we’re missing the bigger picture. A picture that’s very skewed right now.

I think the point that this turmoil may be giving agencies a headache but providing a great opportunity for brands, rings true. While marketing agencies are quick to rise to the defence of their respective disciplines, all with a valid role to play in growing and nurturing brand value, it should be the Big Idea that remains firmly in sight. 

To sidestep this perpetual turf war and ensure the best outcome for the brand, a brand-centric media neutral perspective needs to be your first point of departure. Only once your very best strategy has been defined can you then develop a channel-appropriate plan to engage your audience. Be it online, be it experiential, be it tactile packaging, an event, or sponsorship – it needs to work in harmony with your brand’s truth. 

Digital is only one aspect, as is Advertising. Today’s consumer brand experience is composed of a myriad touch points and interaction opportunities, be they at a live sports event, on a bus, online shopping – wherever hearts and mind are engaged. With too much fragmentation of skills sets, there is a conflict of interests and opportunity lost as each communication agency fights their corner. 

The solution is integration, but under the directorship of a lead agency able to connect and engage the most relevant channels that communicate and nurture brand reputation.

And so, the Agency Model of the Future needs to be a client partnership of a brand-centric media-neutral agency at the helm, staying focused on the Big Idea and the best and most appropriate way of engaging your consumers.

Dave Brown, UK Chairman, The Brand Union

dave.brown@thebrandunion.com

Bye-bye bling? So argues Clare Dowdy in Design Week (July 16, 2009). But I think it’s more a case of “see you later”. I think it’s short-sighted to call the death of opulence and the ornate. It will always be human nature to want to show off success, though the accessories may change from time to time. 

In design terms in the short term, yes this ostentatious unabashed public display of wealth has become much more muted. We’ve seen a paring down in design to simpler, understated and leaner look with a high focus on quality. 

But this coyness is perhaps more accurately caution and is specific to different consumer tiers. The recession’s alright for some – those who are still afloat are now buoyed by cheaper oil, bargain rents, BOGOFs and price promotions. There are still plenty people with plenty of money, and the opportunity to show this off, that you have not succumbed to the credit crunch, become recession road kill, is perhaps a bigger motivator than sensitivity and shyness. 

While the top tier will continue to spend as they have always done, it’s in the mid segment – traditionally luxury’s key growth area – where we will see a calm-down and a deference of “statement purchases”, until a sense of certainty is restored. While many are reigning in their credit spend and starting to live within their means, Great Britain is addicted to shopping. It’s embedded in the national psyche. 

I think it’s careless to predict the death of bling culture, Like the end of the Prohibition, there’ll be a big bounce back to bling, albeit with different brands – those that understand the nature of their consumers. 

Published by Simon Bailey, CEO for The Brand Union – London. Join the debate: simon.bailey@thebrandunion.com

Suzy Bashford’s article (Marketing, July 14) on consumers tiring of price-led promotions raises some interesting points. Yes, I agree that consumers are craving upliftment in a depressing time, and yes, they are more accepting. But I would argue that they are more accepting of less. They are finding the positive in the negative – negative space, that is, which was once filled with excess, frills, fluff and jargon. 

But this ‘negative’, this austerity, does not mean deficiency. No more hidden expense accounts, concealed bonuses and extravagant credit offerings, and no more brands promising things that can’t be delivered, makes for a cleaner, more truthful, authentic and transparent world.

Austerity, temperance and eschewing excess can and should be uplifting. Savvy brand owners should tap into this sentiment of frugality and demonstrate that cutting back is cool, that prudence is positive. 

A kneejerk reaction in times of thrift is a swing to both value-based offers, but brands should be careful about succumbing to the price war. Waitrose walks a tricky tight rope with its new Essentials range. While attracting the attention of a lower tier of consumers, it runs the risk of turning off its incumbents. 

To survive, brands can take cues from this lean towards leaner – but with design, not offer. 

Less packaging, greater simplicity and honesty, freedom from decorative detritus and adornment, less greed and conspicuous consumption are all corollaries of a new morality. This move away from opulence to openness may signal a new mutuality where brand owners and customers learn new respect for each other. 

Brands can lead the way in restoring consumer confidence if they can tap into the new zeitgeist of brand austerity and turn this into positive. 

Published by Terry Tyrrell, worldwide chairman for The Brand Union. Join the debate: terry.tyrrell@thebrandunion.com

Austerity is now business as usual. The hair shirt is appearing everywhere – and you now get two for the price of one! 

Architecture is often a bellwether for lifestyle and you only have to look at how the era of “form following fancy” is making way for the return of the Bauhaus approach that “form follows function – or, more appropriately – finance” in the new era of austerity. 

No more hidden expense accounts, concealed bonuses and extravagant credit offerings, and no more brands promising things that can’t be delivered, makes for a cleaner, more truthful, authentic and transparent world. 

But austerity does not mean cheap or nasty. A kneejerk reaction in times of thrift is a swing to both value-based offers, and we only need open the dailies to see the price blood bath and mid-season sales. 

Austerity, temperance and eschewing excess can and should be uplifting. Savvy brand owners should tap into this sentiment of frugality and demonstrate that cutting back is cool, that prudence is positive. 

While quality is more essential than ever, this does not mean Premium brands need not necessarily succumb to the price war its peers may be waging. Waitrose walks a tricky tight rope with its new Essentials range. While attracting the attention of a lower tier of consumers, it runs the risk of turning off its incumbents. 

Premium brands have an equity store of carefully created trust and security embedded in them – rare ingredients in many brands today. To survive, many premium brands can take cues from this lean towards leaner – but with design, not offer. 

Less packaging, greater simplicity and honesty, freedom from decorative detritus and adornment, less greed and conspicuous consumption are all corollaries of a new morality. This move away from opulence to openness may signal a new mutuality where brand owners and customers co-create and collaborate in a way never seen before. Take Woolworths. Ahead of its online reincarnation online last week, the clever marketers at Shop Direct Group, its new owners, set up a blog inviting customers to let them know what they really wanted to buy from Woolworths, with a product proposition and offer based on real customers need. 

Brands can lead the way in restoring consumer confidence but only if they’ve learnt the new rules of brand austerity.

1. Do what you say. Immortalised by Ronseal with its “It does exactly what it says on the tin” campaign, never ever say something that you cannot deliver. The old Trust model has been inverted, literally turned on its head. People now start from the premise of skepticism and suspicion, demanding that brands prove first what they proclaim. Trust has to clawed back bit by bit, starting with delivery.
2. Have you given your brand’s back office a close inspection? Is what you say truly true, or will the small print bring your brand promise crashing to the ground? Are your people at the heart of your brand, or are they just coming to work to earn a buck? Is the CEO your brand ambassador, or a puppet of the shareholders?
3. Preserve the core of your brand at all costs. Don’t let your head (like the temptation to dilute your brand positioning by slashing prices) dominate your heart.
4. Has your brand passed the purity test? Is it clear, can you see through it? Is it ‘free from physical and moral pollution’? Have you checked your brand’s immune system – is it strong?
5. What altitude is your brand at? If you’re at ground level you’re in good shape. In the clouds and you’re way out of touch with your community. Brands that are down to earth and aligned with the communities they serve will be the winners in the brand austerity league tables. I put my money on the Cooperative.

Published by Terry Tyrrell, worldwide chairman for The Brand Union. Join the debate: terry.tyrrell@thebrandunion.com

The Government’s long-awaited eco-design review, Making the Most of Packaging: A Strategy for a Low-Carbon Economy” is a good start and I welcome its emphasis on the role of design agencies. But I believe it fails to adequately weigh up the challenge of consumer expectation on one hand and value on the other. 

A sensitive issue at best, with profiteering pitted against good practice, packaging designers have a responsibility to drive the sustainability agenda, and the opportunity to do so. While we are led by manufacturers to a large extent, let’s not forget that design sits in the driving seat with the potential to steer the direction.

With consumer trends pointing green as our landfills swell, there exists a big opportunity to bring far more intelligence to litter and bring insightful solutions through honesty, visibility, ease of disposal and adding value to a product through environmentally sensitive thinking. 

Consider,

Canning the can

A two-fold solution, intelligent box design can keep aluminium out of our dumps while solving all manner of space and storage issues, particularly in transport.

Give packaging a second lease on life

A simple but effective example are those cereal manufacturers who put kids’ cut-out templates on the inside of their boxes, transforming Granola into a game and creating an extra use for the box and further extending the brand experience. 

To counter the decaying effect of humidity, India’s citizens regularly reuse plastic cartons to store all manner of unrelated items that might otherwise rust. A little while back, Heineken produced a brick-shaped glass bottle when filled with sand became a component for building a house. Imagine a cubic plastic bottle that could become a building block for anything – walls, storage, veggie garden vessels. The possibilities are there.

Killing dead space

Remove ullage (wasted space taken up by air in roomy packaging) with carefully considered pack shape solutions and use the brand story to help communicate product benefits. While an ingenious brand solution that shows dynamite comes in small packages, where concentrated washing powder is concerned, Persil’s Small & Mighty campaign also countered the free ride air was getting in larger packs. 

Buy local, buy loose

Consider a product’s merchandising context and bring market channels and their multiples into the solution. Supermarkets should encourage the use of local suppliers and sell fresh loose produce, both supporting local industry while reducing their own carbon footprint and packaging waste. 

There’s a strong link between the three ‘Ms’ of Manufacture, Merchandise and Margin which all play key roles in the progress of sustainable packaging, and designers need to become advocates of the Movement. As the cost of change is high it will naturally take time to make adjustments in this chain. But I think design agencies are in the perfect position to drive this change.

Published by Dave Brown, UK Chairman for The Brand Union. Join the debate: dave.brown@thebrandunion.com

The winds of change have blown up and down the highstreet and we’re looking at a very different brandscape than a year, even 6 months, ago. I expect we may very well see a revival in the tenets of the Bauhaus movement: a return to functionality, honesty and form pared down of any sorts of decoration and excess.  

However, while the death knell may have sounded for the era of decorative detritus, not so for design. Quite the reverse, in fact. 

Take the phenomenally successful iPhone. Apple’s comeback kid understood the power of design that combines both exceptional functionality and simple beauty. Housing superb design within fantastic functionality, iPhone recognized that mobile phones are lifestyle objects and not merely engineering. 

This was a lesson Ericsson had to learn. Wizards in infrastructure and engineering, Ericsson thought a move into mobile phones was a natural progression, but were limited by their focus on functionality. Over-engineered and over-priced, they made way for insightful Nokia who recognised that phones were an accessory and design important.  

Ericsson’s powerful partnering with Sony married engineering skills with marketing, combining to form a powerful and successful brand. 

Parallel with this shift away from opulence to openness is a fundamental shift in the relationship of trust between consumers and their brands. 

Traditionally, trust was built on a Buy & Try model: Starting from the basis of trust, a consumer tests out a product and, if pleased, will continue to purchase that brand going forward, building a long term relationship. Trust used to be a given.  

But today, amid this landscape of broken promises and broken brands, the trust model has been inverted, literally turned on its head.  People now start from the premise of skepticism and suspicion, demanding that brands prove first what they proclaim. 

It’s time for brands to focus on delivery, they must realise that it’s not about saying what you do anymore, but doing what you say. Today’s consumer asks for no ambiguity in the brand message, seeks transparency and authenticity, respects candid answers and expects quality. This change will also be evidenced in new brand language. We need to learn to speak through our brands in a way that people can understand. 

So a current account today, for example, needs to highlight functionality and visibility and be stripped back of complicated financial jargon and complex frills and features.  It needs good typography, simple navigation, honesty. Where colour may have been used for decoration in the past, it must now be used as an aid to communications and navigation. Wayfinding is becoming more important rather than an era of waywardness. 

Design can help brands find their way back into the hearts of their consumers.

 Published by Terry Tyrrell, worldwide chairman for The Brand Union. Join the debate: terry.tyrrell@thebrandunion.com