Launching the Gildan Brand

The Super Bowl is a great place to launch a new brand; the event’s huge viewership provides a platform for introducing a new product to a significant portion of people in the United States. Brands like Monster, CareerBuilder and Go Daddy used the Super Bowl effectively during their launch.

One of this year’s new brands, and one of the most interesting Super Bowl stories, is Gildan.

Gildan is a huge apparel company with almost $2 billion in annual revenues. Gildan produces millions of shirts and sweatshirts. When you buy one of those shirts saying “My friends went to Cleveland and all I got was this stupid shirt” you are probably buying a Gildan product.

The Gildan brand is largely unknown; most people don’t know or care about it. This is a problem, of course, because branding is critical for differentiation in the apparel world. It is difficult to command an enormous price premium based on fabric or cut. Without differentiation, the focus shifts to price and fighting based on low price is hard.

Gildan is now trying to build its brand. The goal is clear: grow awareness of the Gildan brand and build customer advantage. If all goes well, people will eventually seek out Gildan and pay a premium for it.

This makes very good strategic sense. Differentiation drives profitability.

The problem is that this will not be easy. Building a brand in this cluttered world takes money and time, especially in a somewhat low-interest category like t-shirts.

The Super Bowl is a logical choice for Gildan; it is a strong platform to launch the brand.

Will it work?

To be successful, Gildan will have to do what all Super Bowl advertisers have to do: get breakthrough, deliver a benefit and communicate the brand.

Gildan’s first spot isn’t all that encouraging. You can watch it here.

http://permalink.fliqz.com/aspx/permalink.aspx?at=f9bf390abfde4e63a5bc77640bea4096&a=7575d9fb737a4193a5ef6df3c0b4744b

The ad has fairly good breakthrough. But there isn’t a clear benefit (why Gildan?) and the branding is weak. Hopefully the Super Bowl spot will be better.

The Ad That Changed the Game

Every once in a while an advertiser tries something new on the Super Bowl and fundamentally changes the marketing game. Apple’s Super Bowl spot “1984” falls into this group, as does the Doritos Crash the Super Bowl program.

It is becoming clear that Chrysler’s 2011 spot featuring Eminem should join this group.

Chrysler broke a lot of informal Super Bowl advertising rules with its 2011 ad. The spot was dark and gritty, not a funny, catchy piece of film like so many other Super Bowl ads. The ad didn’t prominently display a logo. And it went on and on, running for a remarkable two minutes. On the Super Bowl, when every second is worth more than $75,000, buying such a long  spot was almost unheard of.

But Chrysler’s ad worked exceptionally well. The Kellogg Super Bowl Advertising Review panel gave it an A, presumably because the spot was exceptionally strong on three elements of our ADPLAN framework: awareness, distinction and linkage. It stood out in a very unique way and the story ultimately connected to the brand. The ad generated an extraordinary amount of buzz. Most important, the ad became the foundation of a marketing campaign that has helped revitalize the Chrysler brand. By breaking the rules, Chrysler built interest and transformed its brand image.

Now other advertisers are following Chrysler’s lead. This year we apparently will see many brands run sixty-second spots and at least three run spots lasting more than a minute.  This is a very big shift.

In 2011 Chrysler showed that telling a story and engaging people really works. It is tough to do this in thirty-seconds; you need time to tell a story, even when each second is worth a small fortune. Marketers clearly learned this lesson from Chrysler.

Gearing Up for the 2013 Super Bowl

Super Bowl XLVII, marketing’s biggest event, is less than one month away. This year Kellogg Professor Derek Rucker and I will once again be leading the Kellogg School Super Bowl Advertising Review; we will assemble a panel of Kellogg students and evaluate all the advertisers, awarding grades of A, B, C, D and, on occasion, F. This is our ninth year.

The Kellogg rankings are unique because we focus entirely on business impact. While we enjoy watching all the spots, we aren’t interested in humor or creativity. We think about just two main questions: Will the spot build the business? And will it build the brand?

Over the years, the Kellogg panel has given low grades to some advertisers who ran ads that were exceptionally funny but fundamentally flawed; the branding might have been weak, for example, or the spots didn’t convey a benefit. We’re looking forward to seeing what this year will bring.

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At this point it is clear that three big trends we identified last year will continue in 2013:

First, demand continues to grow. Prices are apparently up again this year, to nearly $4 million per thirty-second spot. This is up from about $3.5 million last year and $2.5 million back in 2010. Despite the higher prices, demand is strong. For advertisers, the Super Bowl is unique; it is the only time you can reach a large percentage of the U.S. population at one time. It is also the one time people actually want to watch your ads.

Second, there is more activity before the game. I suspect that every Super Bowl advertiser will be talking about the Super Bowl well in advance of the game. Over the next several weeks we will see promotions, public relations efforts and contests. This makes perfect sense, of course; the best way to justify the price of a Super Bowl ad is to use the spot as one part of a fully integrated marketing campaign spanning several weeks.

Third, online efforts will be an increasingly important part of the mix. If you want to see where the business world is in terms of online promotion and social media marketing follow the Super Bowl advertisers this month. Watch Pepsi, Budweiser, Coke, Audi, Best Buy and all the other advertisers to see how they are using these tactics. One big question: will Facebook be front and center for the savviest marketers? Or will they try to move people from that platform?

It promises to be another remarkable month of marketing activity. Things really get rolling today.

In the weeks leading up to the big game, Derek and I will be blogging about interesting developments related to the 2013 Super Bowl. You can see all the posts on our Kellogg Super Bowl Advertising Review Blog. I’ll also put my posts on this blog, Building Strong Brands.

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Winter semester classes start this week. I’m teaching Marketing Strategy in the evening program. The first class is later today; it is nice to be starting up again.

The second edition of my book Breakthrough Marketing Plans is now available. This new edition is updated and has more examples. You can order it here:

http://www.amazon.com/Breakthrough-Marketing-Plans-Wasting-Driving/dp/0230340334

 

Brands to Watch in 2013

The New Year brings significant challenges for many brands. Here are several brands that are worth keeping an eye on as 2013 unfolds.

J.C. Penney is implementing a major turn-around plan under the leadership of CEO Ron Johnson. Results to date have been fairly grim; sales and profits have slumped and the stock with it. Will J.C Penney stick with the plan? Or will the company be forced to reverse course and compete more on price?

Best Buy is also struggling but for a different reason; the company is trying to compete with growing on-line retailers, especially Amazon. Will Best Buy manage to stabilize the business? Or will the retailer collapse under the competitive pressure?

One of the great business turn-around stories continues to unfold at McDonald’s; to the surprise of many business analysts McDonald’s is still building sales and profits. Will McDonald’s continue to grow? Or will the brand begin to flatten out in 2013, forcing the company to consider adding a second brand to its portfolio?

PepsiCo will receive a lot of attention this year. I suspect by the end of 2013 CEO Indra Nooyi will either be receiving acclaim for getting the beverage business back on track or pursuing other opportunities.

The U.S. auto makers are all companies to watch. Chrysler’s efforts to build the Chrysler brand seem to be working, sparked by some inspired Super Bowl advertising. The challenge is to continue the momentum. The Fiat brand is heading into a critical year in the U.S. market, needing to build on some success coming out of 2012. Revitalizing the Lincoln brand won’t be easy for Ford. Look for early results on that effort mid-year. And people will be watching GM: Will the company manage to revitalize its pared down portfolio of brands?

In the technology world, HP and Microsoft are both facing interesting years. HP, having fallen about as far as a brand can possibly fall, is looking for some sign of hope. Figuring out a positioning would be a good first step. What really is HP, anyway? Microsoft has some promising new products and the money to invest but it is not yet clear if that combination will turn into meaningful growth.

Perhaps the biggest question of all: will Apple continue to grow? Will the company manage to launch a significant new platform and build on its recent success?

For all marketers, a priority this year will be figuring out how to best use social media and mobile. All while driving growth and defending the brand.

Best wishes for 2013.

Chobani Expands

This week Chobani opened one of the largest yogurt factories in the world. Agro Farma, Chobani’s parent company, celebrated the event with a marching band, Olympic athletes and Idaho’s political leaders.

You can read more about it here:

http://www.idahostatesman.com/2012/12/17/2384277/chobani-getting-ready-to-open.html

The Chobani story remains one of the more remarkable tales in business today. Back in 2005, Hamdi Ulukaya saw an ad for an abandoned Kraft Foods yogurt plant and decided to buy it. He then spent about two years figuring out how to make a good yogurt. He launched the Chobani brand in 2007.

The established players in the industry, yogurt giants Yoplait and Dannon, looked at the idea and dismissed it. I imagine the thinking went a bit like this:

“Introduce a Greek yogurt? Really? That is a ridiculous idea. We know the United States yogurt market and one thing is very clear: people in the United States don’t eat Greek yogurt. Maybe the Greeks eat Greek Yogurt. Look where that got them.”

Chobani is now one of the largest brands of yogurt in the United States with sales approaching $1 billion annually.

This year Dannon began defending but Chobani continues to do well; Dannon is apparently gaining in the Greek yogurt segment but this growth is coming largely at the expense of Fage.

You can learn a lot about defensive strategy from the Chobani story. Perhaps the most important lesson: It is easy to deal with a new competitor when they are new but exceptionally difficult once they are strong and financially robust and able to build one of the largest yogurt factories in the world.

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This week I’m back in Chicago. I’m well behind on holiday preparations and everything else after my trip to Japan and Denmark. So I’m taking off the rest of the year to catch up. Best wishes for the holiday season!

Learning from Tesco’s US Disaster

Last week British grocery giant Tesco threw in the towel and announced that it would stop investing in its U.S. business. The company will either close or sell its nearly two hundred store “Fresh & Easy” chain.

This isn’t surprising news; the U.S. business had apparently been struggling for years. Since its opening in 2007, Tesco has lost more than £850 million on the business and results apparently were not improving quickly.

There are three important learning points here.

First, it is incredibly difficult to enter an established category where people have little motivation to learn. Grocery stores are fine. People aren’t looking for another one. If the concept isn’t dramatically different, like Whole Foods or Trader Joe’s, then people won’t change. Tesco tried to enter the US by creating lovely stores that were modestly different. This just won’t work. It is amazing they tried at all.

Second, when the numbers don’t work people eventually give up. Companies launch new products to build profits. When it is clear that the new venture won’t generate good returns, they stop investing. When evaluating competitors, it is useful to keep this in mind; if you want someone to stop attacking you, just convince them they won’t make any money and they will stop.

Third, defensive strategy really works. Analysts are blaming Tesco’s failure on the company and the economy. But I am quite confident US retailers did everything they could to make Tesco’s life difficult. That would have been a very smart strategy; Tesco was a huge long-term threat to US retailers. Tesco’s failure was very good news for Kroger and Wal-mart.

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This week I am teaching courses in Japan and Denmark. Next week I’ll be doing a breakfast program on defensive strategy with the Business Marketing Association of Chicago. It is on December 18. You can register here:

http://bmachicago.org/bma-events/power-defensive-strategy

Rebuilding the Lincoln brand

Ford is in the news today for its efforts to reposition and rebuild its Lincoln Brand. One thing is clear: the company knows how to get attention. The story is everywhere. Ford staged a big media event at Lincoln Center in New York yesterday and CEO Alan Mulally is giving interviews to the big media outlets.

Does this all make sense?

Put another way, should Ford really be devoting billions (and a Super Bowl spot) to the fading Lincoln brand, a mark with some negative associations that makes up just 3% of Ford’s sales?

Ford has done a rather impressive job of narrowing its brand portfolio in recent years. The company killed off the Mercury brand and sold off Range Rover and Jaguar and others. At this point, Ford has just two main brands: Ford and Mercury.

One thing is very clear: without a significant investment, Lincoln will fail. Sales are falling and, more important, the brand is losing relevance. The trend is not positive.

To understand the Lincoln move, it is important to consider a more fundamental question. Could Ford just be Ford? Why not focus all the efforts on the core brand?

The problem with narrowing to one brand is that this will limit what Ford can do. A brand can’t be all things to all people. Ford certainly isn’t a luxury brand. I suspect people don’t often debate between getting a Ford or a BMW. If Ford narrows to just one brand, the company gives up on high-end autos. This might be the best answer but it certainly isn’t a popular answer for employees, the CEO or the board.

Once Ford decides it has to play in high-end autos, the Lincoln decision is easy. Launching a new brand is incredibly expensive. Why launch a new brand when you already have a brand with a long history and broad awareness?

Rebuilding Lincoln will not be easy. Step one is getting people to notice the brand again. As Jim Farley, head of Ford marketing noted, “The most important thing is for people to be aware that there is a transition going on. We have to shake them up.”

Step two is giving people a reason to buy a Lincoln. What is this brand, anyway? Why would I buy it? It isn’t enough to have a good, jazzy car. The brand has to stand for something specific.

Ford has about two years to get Lincoln moving in the right direction. Let’s hope they have a clear positioning to build on.

The Value of the Twinkie Brand

Frank Hurt, head of the second largest union at Hostess Brands, seems to have made a classic branding mistake, confusing brand awareness and brand value.

Mr. Hurt’s union, as you know, recently went on strike and continued even when company management said that doing so would force it to liquidate the company. On Friday, company leaders announced that they were shutting down 36 factories and firing 18,000 people.

According to today’s Wall Street Journal, Mr. Hurt is hopeful that someone will step in and restart the company.

Mr. Hurt seems to believe there so much value in the Twinkie and Ding Dong brands that the company will of course keep going. Kill off the Twinkie? Inconceivable!

 

 

The problem is that there is a big difference between a well-known brand and a brand that actually has value. Awareness has no value. Everyone knew Borders but that didn’t stop it from failing.  Everyone knew Circuit City, Blockbuster, Lehman Brothers and Northwest Airlines.

Everyone knows Mitt Romney but he didn’t win.

Brands have value when they create customer advantage, when people care about the benefits the brand provides, are willing to pay for them and see the brand as best at providing them.

Twinkies and Ding Dongs have awareness and some value but clearly not enough to support an expensive work force.

The Twinkie may not disappear; a buyer will probably purchase the brand and keep it alive in some fashion. But Mr. Hurt should realize that the brands at Hostess just don’t have a lot of value so someone isn’t likely to step in and restore the well-paying jobs that are now going away.

The Incredible 007 Brand

The new James Bond film “Skyfall” brought in a remarkable $87.8 million in North America this weekend, an exceptionally strong start for the production.

The strong results are largely due to two things: a good film and a terrific brand.

 

You can learn three important things about branding from James Bond.

First, a strong brand has clear associations. This is a critical point: great brands stand for something distinct. James Bond is brave, daring, sophisticated, British and debonair. He isn’t slow, studious, old or cautious. People associate the Bond brand with fast cars, grand adventures and beautiful women.

Second, a brand needs to change over time. The Bond franchise has managed to stay relevant by shifting so it always reflects society. James Bond has been around since Ian Fleming created the character in 1953. But Bond movies are always current; they are new and fresh. The technology and the setting change. The core of the brand doesn’t.

Third, a great brand attracts other brands. The new Bond film has received a bit of criticism for the amount of sponsorship in the movie, especially for swapping Bond’s classic martini for a Heineken. Phil Rosenthal at The Chicago Tribune explored this in his article yesterday. You can read it here:

http://www.chicagotribune.com/business/columnists/ct-biz-1111-phil-bond–20121111,0,2834053.column

The more important point, however, is that a great brand such as 007 attracts other strong brands. A strong brand is a magnet for people and for companies.

Brand managers are often tempted to change a brand to keep it fresh. This isn’t bad but the challenge is to be consistent while evolving. James Bond shows how to pull this off.

Learning from Obama’s Big Win

Now that President Obama has secured another four years in the White House it is time to reflect on the election and what we can learn about marketing and branding from the past few months.

There will be time for in-depth analysis and consideration, but here are three initial observations.

1.  Marketing isn’t cheap.

Total spending in the presidential election apparently exceeded $2 billion. That is simply an astonishing figure.

Marketing isn’t cheap. It takes money to create and run advertisements, send out brochures, call targeted households and engage people on Facebook.

If you want to assemble a strong marketing effect you have to be willing to spend money.

 

2.  Defining your competition is a highly effective defensive strategy.

The Obama campaign attacked Romney early in the election season and this move paid off; Obama created the perception that Romney was an out of touch, socially conservative, super-wealthy hedge fund manager. By the time Romney get around to investing in marketing, Obama had already defined the Romney brand.

This was a brilliant strategy. Obama had a pretty weak track record to run on and few big new ideas for the future. The best way to win: make Romney unacceptable and do it early.

Defining your competition in a negative way is a key defensive tactic; one way to prevent people from moving to a new product is to convince them the new item has problems.

 

3.  Keep things simple.

There are wonderful studies out there about the power and importance of simplicity. The evidence is pretty clear: people don’t like and can’t follow complicated things.

This dynamic played out in the election. Both candidates stayed away from complicated arguments and policies. But Obama put forth a stronger and more focused case. Obama’s theme was pretty clear: forward. Romney’s plan just didn’t emerge cleanly enough; his five point economic plan just didn’t resonate.

What was Romney’s slogan, anyway?