Re: Loyalty to Brand or Content

From: John Gaskill <jg_at_info-central-usa.com>
Date: Thu 10 Jan 2002 16:22:28 -0500

Ivan Weltman <ivan_at_tudogs.com> wrote:

>You are writing about two different things here; firstly
>the notion of an umbrella brand covering a range of
>products, secondly whether a single content Web site
>should push the name of the site or its content.

Advertising an umbrella may be a way to drive a stock's
price over the short term, but may have less value when
it comes to driving sales, and ultimately profits.

>For the umbrella problem, it's really a matter of taste.
>Ford chose to push the umbrella (Ford) while GM chose
>mainly to push the brands covered by the umbrella
>(Oldsmobile, Buick, etc.) with infrequent sallies to
>push GM. P&G push the individual brands under the P & G
>label, not P & G.

The firms mentioned above are illustrative examples.

P & G's practice of pushing individual brands gives it
flexibility to let each brand find its niche and live or
die on its own merits. P & G has introduced and killed
numerous products over the last thirty years, many of
which our cumulative memories will not recall. Unless
you are in their business or the ad business, you may
not know whether an old product was distributed
by Unilever, P & G, etc.

Ford's promotion of a diverse product line offers
some economies of scale in share of mind advertising,
but does so at the expense of the products themselves.
When a product has a serious safety problem, such as
Pinto or Explorer have had, the negative side effects
cross all the products in the line. If these vehicles had
been advertised as unique brands, quietly killing them off
would have served their maker better than jockeying
for public opinion to save the master brand.

As for which practice serves the bottom line and
investors better, looking at stock charts for the last
30 years for F and PG provides a meaningful lesson.

A 100 share investment in Ford in 1971 would have
yielded 1,125 or 1,900 shares today, depending on
whether one opted for the $20. cash payout a couple
of years back. A share today was about $ 25.

100 shares of P & G bought in 1971 would be 1,600
shares today. Today's price was about $ 75.

Comparing dividend histories was equally informative.

Both P & G and Ford are product driven, research
driven and marketing driven. Both are oligopolies in
mature industries. I didn't look at the GM numbers
from the investor's point of view for the sake of time.
Perhaps they would color my opinions, but I doubt it.

Ford and P & G both sell products that compete with
their own lines.

My advice, advertise your product or service as a
brand unto itself so its staff benefits from the advertising.
If products don't cut it on their own, scale back or
kill them outright. Too many firms waste too much
time and too many resources trying to salvage mistaken
efforts. When you kill a product, keep the best people from
the staff and merge them into your remaining lines
so that excellence is rewarded in a demonstrable way.

As Rob Frankel so often suggests, the product is the
brand and its identity must be embedded in the product/
brand experience. That is what makes The Wall Street
Journal exactly what it is to the average user. It is a
great newspaper, not just a division of Dow Jones & Co.

Let's hope this is a prosperous New Year for all.


John Gaskill
jg_at_Info-Central-USA.com
http://Info-Central-USA.com





Received on Thu Jan 10 2002 - 15:22:28 CST