Category — Brand Identity

Cosmetics companies are turning to e-commerce as a channel to sell certain discontinued items, reports Tatiana Boncompagni in the New York Times (5/3/12). The insight is that the first thing some shoppers do when a favorite perfume, shampoo or shade of lipstick is discontinued is to try to find it online. The beauty companies, meanwhile, can get a good idea which of their de-listed products are in demand by monitoring social-media sites as well as comments on their own websites. Charles Denton of Erno Laszlo actually found himself personally responding to some 200 emails a day from customers complaining about discontinued items, prompting him to reinstate a couple of them.

Bobbi Brown recently launched “Facebook campaigns … asking fans in various countries to vote on their favorite shades of discontinued products.” The winning choices will be available only via a Facebook link or on the Bobbi Brown website. Guillaume Jesel, svp global marketing for MAC, compares contests in which consumers vote on their favorite discontinued items to Dancing With the Stars. “It’s the same revolution you see in other industries,” he says. “You let the consumer take the steering wheel for a while.”

Hilary Jones of Lush, a UK beauty products company, says bringing back old items is mostly about fostering good will. “It’s not a hugely commercial thing for us,” she says. Others find the online line extensions to be welcome relief from the traditional “one in, one out policy” employed by brands and retailers alike. “At the shelf, you have to think about turnover,” says David Lonczak, a vp of ecommerce and digital marketing for Drugstore.com, Beauty.com and Walgreens.com. “That doesn’t make it possible to carry these tertiary products, but there is still a reasonable amount of business there,” he says.

Turning brand names into verbs or vernacular “may be as important to a new company as sleek site design or a sophisticated set of algorithms,” reports Jenna Wortham in the New York Times (5/6/12). After all, we live in an age when LOL (laugh out loud) and OMG (oh my God) are defined in the Oxford English Dictionary. We don’t look things up; we Google them. We don’t call friends; we Facebook them. We don’t post photos; we Pin them. We don’t share our thoughts; we Tweet them. Twitter, in fact, has spawned an entire microsyntax (follow, @, and #hashtag) to a point where you don’t necessarily need to be a Twitter user to know what these terms mean.

“People are trying to understand what market they own in an industry that is flooded with similar companies,” says Jordan Cooper, a venture capitalist. “If you can take a piece of language that is commonly used and be associated with it, it’s a very powerful way to say you’re leading in your space.” Andrew Kortina and Iqram Magdon-Ismail say they were acutely aware of this when they named Venmo, their payments company. “We were playing with different root words for buying, selling, paying,” says Andrew. “Eventually, we were talking about Latin, tried Venmo, it was available and felt like a verb. We tried it, ‘Just venmo me for it.’ It worked. So we got it.”

The challenge is that it can be difficult to impossible to make a fabricated term stick. “It needs to feel more organic than strategic and tap into a human impulse,” says David Lee of SV Angel, an investment firm. “If something catches on, it can translate to a human behavior that becomes part of the language of the web.” Or, as Jordan puts it: “It’s not something a company can force. It happens on its own because a company has created a new behavior that has penetrated the industry.” Bing didn’t make much of an inroad against Google, for instance, while “Pinning” on Pinterest caught on easily. “When they go viral,” says Susan Etlinger of the Altimeter Group, “they’re naturally lightweight and unpretentious.”

Madonna and Lionel Richie are living the risks and rewards of old artists marketing new music, reports Eric Felten in the Wall Street Journal (5/4/12). Madonna, as you may recall, released her latest record, MDNA, with the SuperBowl halftime show — “a promotional opportunity worth more than $80 million” by some estimates. Her album sales quickly charted to number-one on Billboard during the first week, and just as quickly plummeted by “more than 86%” during the second. Its decline has continued and MDNA currently owns the #34 spot on the hit parade.

Lionel Richie, meanwhile, launched his new record, Tuskegee, with an hour-long appearance on the Home Shopping Network. Tuskegee occupied the number-two spot during its first week of release, and then climbed to number-one, where it has remained for past two weeks. Madonna certainly had an edge in the promotional department and both records received good reviews. The difference, apparently, was that Madonna was trying to get her fans to buy new music, where Lionel Ritchie’s offering was a countrified version of his greatest hits — in other words, “a pleasant reworking of his standard repertoire.”

As Eric writes: “One would think that legendary artists would have every advantage needed to put across new hits — they are brands, after all, with large and loyal customer bases.” Maybe their new songs just aren’t as good. Maybe their aging fan base has trouble connecting with new music. Or maybe, says Eric, it’s a Catch-22: “If the established musician does something really fresh, her audience is unhappy she’s strayed from what they know and like. But if she keeps doing new songs in same vein as the old, why should the listener bother with the new release?” Lionel Richie “managed to escape the conundrum by doing the old favorites in a new way.”

“Lego is both a metaphor and a case study for the argument” that “simplify and repeat” is the secret of business growth and success (The Economist, 4/28/12). It also goes to the heart of Repeatability, by Chris Zook and James Allen, who “argue that the most successful companies share three virtues. They have a high distinctive core business. They make great efforts to keep their business model as simple as possible. And they apply it relentlessly to new opportunities.” Examples include “Ikea with its flat packs, McDonald’s with its burgers” and of course Apple, which “has cut through the buzzing confusion of its industry by applying the same formula to a succession of iProducts.”

As for Lego, what began as an enterprise built on (or out of) interlocking plastic brick careened in the 1990s into “theme parks, television programs, clothes, watches and learning labs. The firm hit a wall made of bricks, not plastic. After years of dismal results, a new boss in 2004 took Lego back to its roots … you can now design a house or a castle online and order the bricks you need to build it. But Lego’s focus is firmly back where it was in its heyday — on little interlocking blocks that turn children of all ages into master builders … today there are 75 bits of Lego for every person on the planet.”

Chris and James, both Bain & Company consultants, identify three ways to apply the “simplify and repeat” model: “Some companies, such as American Express, target ever more precise groups of customers. Some apply the model to new markets: Nike brought its ‘swoosh’ to one sport after another. Some apply the same management system to lots of different businesses,” such as Danahar, a holding company that has applied the same “lean” management system to 85 companies. Of course, simplicity can be difficult to maintain in the face of disruptive innovation (see Kodak, Xerox, Nokia, Kmart and Blockbuster). But Chris and James “argue that successful companies can survive dramatic change by deciding which bits of their business models to preserve and which to dump.”

Garland Pollard has a website called BrandlandUSA where you can “buy and sell old brands,” report Angus Loten and Emily Maltby in the Wall Street Journal (4/19/12). Garland launched the site five years ago so he could blog “about classic American brands.” He added a classified-ad section and says he’s seen traffic steadily increase ever since. Indeed, interest in reviving old, discontinued brands appears to be on the rise. Remember Astro Pops? Those “rocket-shaped” lollipops? Ellia Kassoff of Strategic Marks LLC does, and bought the rights to start making them again from Spangler Candy, which had discontinued them in 2004. The pops will soon be available at Dylan’s Candy Bar.

How about Boast polo shirts? You know, with the logo that looked suspiciously like a marijuana leaf? John Dowling picked up the rights from Bill St. John, the tennis pro who launched the brand 1972 but was pretty much gone by the early ’90s. “Because something is discontinued doesn’t necessarily mean it is a bad product,” says Ellia. “Maybe it just didn’t fit the business model of the company at the time.” Ellia is also trying to claim the rights to department-store trademarks including Filene’s, Jordan Marsh and Abraham & Strauss, although Macy’s has filed a lawsuit to stop him. The law is that trademarks are considered “abandoned” if they’re not used for three consecutive years, but Macy’s says it is still using the logos on T-shirts and tote-bags.

Eddie Riegel is bringing back the Seafood Shanty, a 14-restaurant chain in Pennsylvania and New Jersey that went belly up in the ’90s. The rights to the mark had expired and he managed to buy the restaurant’s original recipes for $7,500 from a former chef (Eddie found him on Facebook). Tim Miller paid just $1,200 at auction for the National Premium Beer trademark, a favorite among generations of Baltimore Orioles fans. “It was just too good to be true for a native Marylander to see a brand like that available,” says Tim. George T. Haley, a marketing professor at University of New Haven, notes that, among other things it can be a lot cheaper to market an old brand than a new one. As a result, says BrandlandUSA’s Garland Pollard, “It’s pretty much open season for older brands."

Tiffany’s says it is introducing a “new metal” but metallurgists say that just isn’t so, reports Patricia Cohen in the New York Times (4/5/12). Tiffany’s calls its creation Rubedo, a “pinkish mixture of gold, silver and copper.” Jewelers compare Rubedo to a Victorian-era material known as “rose gold” that also “gets its rosy hue from copper.” So, it’s maybe not all that new, and Rudolph Buchheit of the Ohio State says it’s not a metal, either. “A new metal would be equivalent to creating a new element in the periodic table,” says Rudolph. “It’s what high energy physicists do. It’s not the thing you do in a jewelry foundry.” Carson Glover of Tiffany’s begs to differ, however, contending that a metal “is defined as an alloy of two or more metallic elements.”

That, of course, would make Rubedo an alloy, and Anthony J. DeArdo of University of Pittsburgh says Tiffany’s would be hard pressed to prove it is unique. “It may be one of the 14 million alloys that people have cooked up over the decades,” he says. Christina Malle, a goldsmith, is also troubled that, unlike items marketed as gold, consumers have no way of knowing the actual gold content (e.g., “14 karat is 58.5 percent pure gold; 18 karat is 75 percent”). However, subjecting Rubedo to “a fluorescent X-ray spectrometer” reveals that it is “about 31 percent gold and nearly 55 percent copper, along with silver and a smidgen of zinc. In karats, that comes out to about 7.5.”

All of this is quite beside the point to Donna Distefano Thomas, a jeweler who also creates her own alloys. “We think Tiffany’s Rubedo, which evokes the warmth and sensuousness of rose gold, is a great trend and shows that we are coming full circle from the metal’s prime in the Victorian era,” she says. Tiffany’s Carson Glover agrees that the technicalities don’t mean very much. “When Tiffany began planning our 175th anniversary, we felt the development and introduction of a new metal would be a fantastic way to mark this momentous milestone while at the same time responding to our customers’ desire for more blush-colored metals.” Even John Barnard of University of Pittsburgh, who says he’d never call Rubedo a “new metal” admits, “anything’s fair in advertising.”

If trust is the bedrock of a great brand, then some of today’s hottest brands seem to be built on pebbles. The latest Hub Magazine survey detected considerable doubt among readers that the online brands they know and use can be trusted with their personal information. We listed eight popular online brands — Facebook, LinkedIn, Google, Twitter, Bing, Amazon, Zappos and iTunes — roughly an even mix of social media sites and e-commerce leaders. We simply asked readers to indicate whether each brand was “trustworthy” or “not trustworthy.”

Zappos and LinkedIn scored highest by far, with Zappos earning the trust of 82 percent of respondents and LinkedIn trusted by 80 percent. Amazon, at 73 percent, was next highest on the trustworthiness scale, followed by iTunes at 63 percent and Twitter at 58 percent. The other three brands were under water. Bing — the Microsoft search engine — was trusted by only 42 percent of respondents, with Google trusted by just 37 percent. Facebook fared the worst, with 82 percent of respondents saying the brand was “not trustworthy.”

On the positive side, Zappos, which recently endured a hacking incident in which user information was compromised, apparently weathered the storm because its customers love the Zappos brand of customer service. LinkedIn is trusted because it publishes only professional information (i.e., “nothing too exciting”), and has not ventured into targeted advertising. Amazon scored well primarily because its business model is premised on selling merchandise, not customer information. To the extent Amazon tracks users, most feel this is benign. “Amazon learns my book and music preferences, but I don’t feel like my personal details are being sold,” said one respondent. “Their sales would be zero if there were any security breaches,” another said.

iTunes scored perhaps a bit lower than expected, possibly because the survey coincided with news that it had allowed certain apps to collect personal information about users, despite a stated policy otherwise. Twitter is reasonably well-trusted because it imposes relatively fewer rules, allows users to remain anonymous, and generally affords more control to the user than other social-media sites. On an open-ended basis, we asked which brand was most trusted with personal information, and Amazon came out on top. Banks and various credit card companies also were frequently mentioned. As to which brand is least trusted — that would be Facebook — and yet very few said they had stopped using the site because of it. You can access complete results of our suvey here.

Richard Fine and Nathan Frank “are doing for generic drugs what American Apparel did for plain T-shirts,” reports David Sax in Bloomberg Businessweek (3/26/12). Their pharmaceutical startup Help Remedies, is wrapping generics “in cool with every trick in the downtown branding playbook, from hip packaging to absurdist videos to youth targeting.” Their premise is that most store-bought remedies are too complicated and their packaging too confusing. “Excedrin sometimes has three or four drugs just for a headache,” says Richard. “These companies mix a load of drugs, put on racing stripes, and wrap them in packages that are very confusing.”

Help Remedies instead cuts “through the confusion by offering single-ingredient drugs in low doses, with clear, symptomatic titles, such as ‘Help: I Have a Headache‘ (acetaminophen) or ‘Help: I Have a Stuffy Nose‘ (phenylephrine).” The idea, according to Help’s creative director, is to “sell the medicine as though it was coming from a friend, not a doctor in a lab coat.” The brand’s marketing materials are worded “in the first person” and the packaging is a “simple white, biodegradable carton.” The pills have “no colors or coatings.” Jim Butschli of Healthcare Packaging magazine, says the simplified approach aligns with “the reason the consumer is shopping in the medication aisle in the first place.”

Humor is a big part of the pitch: “On the back of Help’s nausea medicine, the package jokes about how the pills are flavorless: ‘We were going to make them deviled-egg flavor, but then we thought it might defeat the purpose.’” Help is also going for unconventional distribution, such as hip-hotel mini-bars. However, Richard Meyer, a consultant, is skeptical, noting that Help’s youth-oriented target audience “happens to be the least brand-loyal of all drug consumers.” Founded in 2008, Help reported sales of $4 million in 2011 (a 1,000% increase from the previous year) and projects sales of $15 million in 2013. The company is not yet profitable, although it has disribution through Target and Walgreens, is expanding into Canada, and plans to augment its product line this summer.

Social media is becoming the court of first resort in trademark disputes between entrepreneurs and corporate giants, reports Laura Petrecca in USA Today (3/13/12). Bo Muller-Moore, for instance, is locked in a dispute with Chick-fil-A. Bo has been selling “Eat More Kale” T-shirts and bumperstickers since 2001, which was fine with Chick-fil-A until Bo tried to trademark the slogan. Chick-fil-A feels that “Eat More Kale” sounds too much like “Eat Mor Chikin,” which it has been using as its ad slogan since 1995. Bo thinks this is ridiculous: “If they can produce one customer who has bought one thing from me thinking they were getting a Chick-fil-A product, I’ll be a monkey’s uncle.”

Traditionally, Bo might have hired a lawyer, or simply folded up his tent if he couldn’t afford one. Instead, he keeps his nearly 9,000 Facebook followers (link) updated on his case “and urges them to sign an online petition that asks Chick-fil-A to not block his trademark application.” So far, he’s attracted 29,000 signatures. Chick-fil-A meanwhile posted its own statement on Facebook. Eric Goldman of Santa Clara University School of Law, says Facebook and other social media have “totally changed the dynamics” of trademark disputes. “People who don’t have access to mass media can get their messages out to larger audiences,” he says.

Matt Nadeau, founder of Rock Art Brewery and maker of Vermonster beer, used Facebook support to force a settlement with Hansen Beverages, makers of Monster Energy drinks. Under the terms, Hansen agreed to allow Rock Art to continue to market Vermonster as long as it didn’t line-extend into energy drinks, while Rock Art had to agree to allow Hansen to use the Monster brand if it decided to enter the beer category. But Bo Muller-Moore continues to fight on, and is now appealing to Kickstarter (link) to raise money to fund “a documentary on the trademark battle.” So far he’s attracted more than $30,000, with a goal of raising $75,000 by March 25.

“Sweden’s newest religion may be the only faith that was born out of an insult,” reports Stephan Faris in Bloomberg Businessweek (2/13/12). That religion is Kopimism, and its “patron saint” is Peter Sunde, a leading activist and proponent of online piracy. The insult came courtesy of a lawyer prosecuting Peter for his role in Pirate Bay, a file-sharing site. When asked her opinion of Peter and his ilk, the lawyer said, “They’re a cult.” Peter went online and suggested starting the Missionary Church of Kopimism, holding “sacred the act of copying information,” and others ran with the idea.

“We have this history that every time somebody calls us something negative, we just take the name and make it ours,” says Peter. “We were called pirates, so we said, ‘Let’s make pirates cool.’ O.K., so now we’re a cult. Let’s make that fun as well.” Peter, himself, hasn’t joined the church because, he says, he’s an atheist. But a website devoted to Kopimism has attracted some 5,000 members (link). In January, the church was recognized by the Swedish government. “In the beginning it was a joke,” says church chairman Gustav Nipe. “But maybe we’ve stepped on something greater than we thought.”

To be recognized as a religious group, the Kopimists simply had to declare themselves as such and “hold some sort of meditative service.” For them, the first part was self-fulfilling and the second was a no-brainer — they “settled on file-sharing as their form of communal worship.” They did hit a snafu with some of the necessary paperwork, however. “They’re actually not so good at copying,” says Bertil Kallner of Kammarkollegiet, the Swedish agency that registers religions. Gustav Nipe envisions Kopimist weddings and perhaps even an official house of worship. “The Church of Sweden is selling a lot of its old churches,” he says. “I’d love it if we could buy one.”