This summer, one of the planet’s most well-known brands, Procter & Gamble (IW 500/14) (PG), announced that it was jettisoning almost half of its nearly 200 brands. The brands that many are speculating might be shown the door are not exactly obscure, either; they include Ivory, Duracell and Braun.
The CPG giant’s decision might seem on its surface to be a bold one — but when you consider that the brands it’s keeping represent 95% of profits, cleaning house (as it were) makes a lot of sense.
When a company like P&G takes a hard, unsentimental look at which of its brands are assets and which ones are liabilities, other companies in the industrial space would be wise to follow suit.
Change is painful — and expensive. But so are the long-term costs of maintaining unprofitable brands, sub-brands, line extensions and the like.
P&G’s brand sell-off is just one action it’s taking to revitalize itself for a new era. The company is providing valuable lessons in brand revitalization.
Here are some key areas in which any industrial firm can take steps to gain the most value from their branding (or rebranding) efforts:
Connect Branding to Customer Needs
Nearly a decade ago, when sales of P&G’s flagship brand of dandruff shampoo, Head & Shoulders, began to falter, the company reconsidered how it positioned and marketed the brand. In this case, the answer was to expand, not contract.
Consumers can still get the “classic” formula, but they can also obtain versions of the product that speak to needs other than “getting rid of flakes.” Shampooers who want fuller hair, or relief from an itchy scalp, can now find a ready solution to their needs (in the larger context of “dandruff shampoo”) by reaching for variations of Head & Shoulders. The new products also come in redesigned bottles and at a higher price point, giving them “salon product” status.
Take a look at your brands — are they still speaking to customers in their language and reflecting their needs? Are they competing against other brands effectively? What could you do better?
Cut Dead Wood from Your Brand's Portfolio
Often, we will encounter clients in a situation similar to that of P&G — with potentially 100 or more product names, but real equity and sales value in only two or three.
It’s risky to lose name recognition among long-time customers, especially when it’s a significant investment to come up with a name in the first place. There can be significant costs associated with retiring brand assets (such as making changes to signage, addressing regulatory issues, altering manufacturing processes).
However, it’s a good idea to periodically take a hard look at the elements that comprise your brand’s portfolio — if inertia is what’s keeping them in place, it may be time to cut dead wood to enable healthier growth for assets that could be flourishing.
Focus Branding Efforts Where the Returns Will Be Highest
As in other aspects of business, it’s generally good to follow the 80/20 rule. Which products and services are generating the most revenue, or have the potential to? Put your branding energy and dollars behind those, and “keep the lights on” for any others.
Ideally, as you simplify your brand portfolio, this selective approach branding effort should start to happen organically.
Watch Your Competitors’ Actions
Some industrial companies are able to function for years without any real brand at all. The nature of their business might have made it more advantageous — or even essential — to fly under the radar and serve as the “company behind the curtain” for their own customers.
But markets change, and no company wants to be caught flat-footed when that happens.
If you see a former wallflower of a competitor suddenly making a splash with a new brand, examine why they’re doing so and take action to at least match, if not exceed, their branding moves. When your industry changes and demands brand visibility, you can’t afford to stay in the shadows while your rivals grab the spotlight.
Finally, Don’t Overlook the 'Cool Factor'
Ask anyone over the age of 40 what General Electric (IW 500/7) (GE) is all about and you’ll hear about financing, medical equipment and lightbulbs. But ask a millennial about GE? You’ll hear about the cool, “sciency stuff” they’re showing on Pinterest and Vine.
You’ll also see, as the human face of GE’s innovation and reinvention, founder Thomas Edison, an inventor who has been dead for nearly a hundred years. What a smart, extraordinary example of brand evolution and ignition in action.
An industrial company like GE isn’t doing these things just to look like a fun, hip company. Their effort to humanize the brand makes them more attractive to customers, the public and investors alike; it helps keep them in front of a new generation of talent recruits; and it has a positive halo effect on the rest of their business overall.
If a couple of giant, entrenched industrial behemoths like P&G and GE can revitalize their brands in these ways, then just think of what you could do with yours.
As principal (executive director, strategy), Jennifer Meyers specializes in developing strategies that can be extended seamlessly to all communications while developing partnerships with clients that result in strong brands and messages. Over her career, she has worked with a variety of clients and complex brands, including John Deere, Tyco, Ingersoll Rand, New York Life, AARP, Chase and Ally Bank.