Category: Branding

Malcolm Mcdonald

What Makes a Good Brand?

Branding Marketing
Brand

Transcript of: What Makes a Good Brand?

Ed: Hello, everyone.

In this series of videos, we’re talking about marketing, shareholder value, and what makes a good company. And we can’t talk about marketing without, at some point, talking about branding.

And Malcolm has got rich experience in the branding arena. He’s been involved with a great company called Brand Finance, which actually does brand valuations.

Many of his books cover the subject. So it would be really good, Malcolm, just to get your thoughts on this.

And, as ever, I’ve got a very simple (simple being short) very short question for you, which is: What makes, in your experience, a good brand?

Malcolm: Perhaps of all the questions you’ve asked, maybe this is the easiest for the simple reason that there is so much manifestation of excellent branding around us in our everyday lives that you don’t need a degree in marketing to begin to understand what makes a successful brand.

Successful brands endure

What I will do is just draw your attention to – sadly he’s not with us anymore. He died a few years ago – but a guy called Laurie Young, and he wrote this article in Market Leader in Quarter Two, 2011, and it was called “Products die but brands live forever.”

And there were hundreds and hundreds and hundreds of brands. And it’s most extraordinary when you look at some of the brands and how old they are.

For example, Stella Artois was around in 1336, would you believe?

And even something like Coca-Cola is 150 years old, and I think it’s still successful and you get Gillette about 120 years old and so on and so forth.

But you know, I’ll tell you what the components in my view are of a successful brand. But I think you have to try and nail the jelly to the wall, if you’ll excuse the expression, in terms of what we think a brand is.

The brand is not just the logo

The simplest manifestation of the brand is, of course, the logo, and the world is awash with logos, and most of them are as useful as a bird-of-prey with a squint.

And it amazes me. Nobody gives a toss about your logo.

I reckon there are probably 15 or 20 logos in the world that any normal human being would actually recognize.

I’m not saying logos aren’t important for signage and things like that, but I was highly amused when I see Chief Executives coming in.

And the first thing a new Chief Executive tends to do is to start messing about with a logo. It costs a fortune and nobody gives a damn about the thing anyway.

So it’s not a logo unless that logo, like the famous brands unless that logo creates shareholder value.

The intangible value can be much higher than the tangible value

The second level of a brand is that sort of larger bundle of associated intellectual property rights. Like for example, Guinness, their recipe, and Mercedes, their engineering processes.

That’s the second very important element of branding. But the third one, which is really what most branding is about, is about the holistic company or organizational brand.

And what’s interesting, and not a lot of people realize this. But if you look at balance sheets today in the United Kingdom, about 65% of all corporate value is not tangible assets. It’s in intangible assets.

And in America, it’s about 73% of all corporate value is in intangible assets. And it’s those intangible assets that make money from an organization, not offices and lorries and factories.

I mean, for example, when Nestlè bought Rowntrees, the last thing they wanted was a factory in York. What they wanted was the brands and all those wonderful things that come with it.

[Editor’s note: Rowntrees now claims to be “vegan-friendly.” ]

And you’ve heard me quote this before, but I will quote it again. Procter and Gamble paid £31 billion to buy Gillette, and, you know, Ed, they only got £4 billion worth of tangible assets.

Now, Procter and Gamble aren’t stupid. Now that throws some light on the importance of intangible assets and brands.

Because everything a company does, if you think about it, manifests itself – well, everything a company does – from R&D to after-sales service, manifests itself in the offer that you make to the customer. That offer has a name on it, which, of course, is the brand.

So what is a successful brand? I’ll just draw it to a close now. And I’ve just made a shortlist here.

Trust is key

First of all, successful brands build trust. We do trust them. They’ve been around – many, many brands as I’ve already said – have been around for years and years and years.

They have a price-quality trade-off, offer consistently superior value, make the brand famous, easy to recognize, and that brings in advertising and all that kind of stuff.

They also make it easy to buy, which of course is distribution, logistics, and what have you. In other words, they get their basics right.

Now there’s more to it than that, obviously. But that’s where I’m going to draw this to a close and say most of the brands that have been around for years and years and years We trust them, we love them and we pay good money to buy them. So long live powerful brands.

Thank you for asking me this question about brands because I’m quite passionate about brands, Ed.

Ed: That was very good of you, Malcolm.

And actually, as you’re making your closing comments there, Malcolm, I was thinking the same thing about the Malcolm McDonald brand. It’s trusted,  people love it and they’re prepared to pay good money for it as well. So thank you very much for your time with us today.

Again, I’m sure there are really good nuggets there that people will find really helpful in their own businesses.

So thank you again, Malcolm, truly wonderful having you with me and talking about this. We have ended up having a lot of these conversations in cars and trains and planes.

But actually, it’s really good, it is really good to schedule some time and actually, focus on it and have a proper conversation.

That’s really good and thank you, Malcolm. And you enjoy the rest of the sunshine that we’re having here in the UK at the moment.

Malcolm: My pleasure, Ed

Stephen Mangham

The CMO and Sustainability Leadership

Branding Sustainability
CMO and Sustainability

Abstract: Can the CMO become a Sustainability Leader?

  • Edmund  Bradford says they are delighted to be joined by Stephen Mangham, a branding expert at Master of Scale international. Edmund says they will get down to more of the human level and talk about the person at the center of this, the Chief Marketing Officer (CMO).
  • Stephen says the CMO must define the sustainability conversation in terms of the customer and the brand in terms of its inherent usefulness. Stephen says the CMO must have an organizing idea that inspires and guides the brand behavior and the brand action.
  • Edmund and Stephen discuss the key challenges they will face, including getting educated about the subject.
  • Stephen says consumers prefer products with a social purpose agenda, and that doing good is good for business. Edmund says the risk of doing nothing is more dangerous than the risk of doing something.
  • Stephen says brand growth depends on memorability and relevance.

 

Transcript How can the CMO become a sustainability leader?

[00:00:09 –> 00:01:51] Edmund: I’m Edmund Bradford. I’m a director of the Good Growth Academy and in this series of short videos on marketing and sustainability, I’m delighted as ever, to be joined by Stephen Mangham, who’s a branding expert, much more of a brand expert than I will ever be, and also a Master at Masters of Scale International. Now, in the previous video, we’ve talked about sustainability and how it fits into the broad concept of good growth. We also talked about how it can be a real differentiator in the marketplace. But in this particular one, we’re going to get down to more of the human level and talk about the poor person at the center of this (from my perspective in many ways) which is the Chief Marketing Officer. So I think what’s interesting is that I’ve been in marketing for 25, 30 years or something, and I’m fairly new to sustainability in comparison. And I think what I found interesting is how very little in most companies, marketing seems to be involved in the whole sustainability conversation. They just don’t seem to be at the party. They’re sometimes at the end doing the brochures and the messaging about all the changes that the company is doing. But they seem to be like an add-on at the end rather than central to the whole journey. So, I’d be interested from your perspective, Stephen, how can a CMO, (a chief marketing officer), how can they get involved and how can they start driving and leading some of this change, if they can at all?
[00:01:51 –> 00:04:27] Stephen:  Good to be on-again, I think it does start with – if you like – with the Board, the C suite, they need to have defined the sustainability conversation in terms of the customer, and that’s when the CMO can help. So if their sustainability agenda is inherently customer focussed, customer-centric: “What is the purpose of our business, our brand, what is its usefulness?” That has to be a customer-facing conversation. If you start there, then the CMO has a chance of success and the CMO is engaged. What the CMO themselves have to do is, there’s a number of things, but perhaps the three most important things: First of all, I think it’s important that the CMO need to define the brand in terms of the brand’s usefulness or inherent usefulness. So they need to – as I mentioned in an earlier video -they need to put sustainability at the heart of the brand strategy. And to do that, they may need to look up various disruptive approaches where they look to re-frame the business they’re in or their role in it. So, for example, Tesla famously says, they’re not in the car business, they’re in the renewable energy business. They just happen to be…. cars are the particular way which they can make a contribution to that agenda. So number one is they need to re-frame the brand in terms of its inherent usefulness to consumers. What is its social purpose? Secondly, I think it’s important, then that there’s an organizing concept or organizing idea that inspires and guides the brand behavior and the brand action so that the integrated marketing communications is consistent with that. And then I guess the third thing is, is that they should have a plan. They should have a plan that says, “Okay, measurable objectives, and what’s our plan of action to get there?”. So I’d say that that’s what CMOs can do, from their perspective, to drive good growth.
[00:04:27 –> 00:04:59] Edmund: And I think we just pick up maybe one or two of the key challenges that they’re going to face. For me, an obvious one is their understanding of the subject. We don’t expect the CMO’s to be sustainability experts. So what do you think could be the first steps that they take in just getting their heads around the subject, getting educated in this area? Any thoughts on that?
[00:05:07 –> 00:05:40] Stephen: Well, listen and learn. There’s a lot of expertise out there. There’s a lot of informed opinions. I recently read a book (I am not looking to plug it particularly) called Greener Marketing, which is a fantastic place to start in terms of helping someone reassess the role of marketing in promoting the sustainability agenda and creating that good growth.
[00:05:41 –> 00:07:05] Edmund: Excellent. And if we’re doing book plugs, I think the one I really like is Rethinking Capitalism by Rebecca Henderson. It’s not about marketing, but it’s a very good business book. I completely agree, Stephen. I think what we should do as marketers – in a way – is just get educated a little bit about the subject and picking up a good book and getting better and looking for short courses and attending events. I’ll give a little plug for some of them: the Economist runs really good events. There are some really good speakers, like Unilever by the way that we mentioned, who talk at some of these events. So without much of an outlay and without committing yourself to a whole year of a Master’s on sustainability, you can actually get yourself up to speed with some of the key concepts. So there’s definitely an education challenge, I think, but they don’t need to become experts. They just need to know the basics. I would say. The other challenge, I suppose, Stephen, what about, let’s say some of the real challenges where you’ve got maybe a Board that isn’t that receptive to the green agenda. Any thoughts about how marketing or the Chief Marketing Officer (or the marketing official) can use the power of the customer?
[00:07:05 –> 00:07:57] Stephen: I think the answer lies in your question, the power of the customer. If I was a CMO, I’d be showing, as I said in an earlier video, there’s a wealth of evidence out there that consumers prefer products that have an articulated social purpose agenda. So there’s some very strong business arguments to be made to the Board to say, “We can grow our business, we can protect our business by pursuing this agenda.” So it’s not simply a nice to have or some form of do-gooding CSR exercise. It can be very hard-headed. Doing good is good for the business agenda.
[00:07:57 –> 00:08:24] Edmund: Yeah. Absolutely. I think it’s one thing I like about the examples of Rebecca Henderson talked about is that actually what we get to the point of doing is saying, actually, the risk of doing nothing is more dangerous than the risk of doing something. And the status quo, the “do nothing” option is no longer on the table. These changes are happening and we need to respond to them. 
[00:08:24 –> 00:08:43] Stephen: Absolutely. I mean, it’s an old saying: if you don’t stand for something, you stand for nothing. And there are plenty of disruptors in business today who will eat your lunch if you take the soft approach and do nothing.
[00:08:43 –> 00:09:11] Edmund: Yeah. So, of course, that’s a whole area, isn’t it, of competitiveness? I mean, we talked about the power of the customer, but the other area the CMO should be very attuned with is the competitor activity, and there’s a danger in any industry I think that the organization that’s the least is left behind in the marketplace. And it suffers accordingly.
[00:09:11 –> 00:09:25] Stephen: I mean, brands grow or don’t on memorability and relevance. And if you’re not memorable because you’ve got nothing particularly strong to save, you’re not relevant. You’re going to wither on the vine.
[00:09:26 –> 00:09:48] Edmund: That’s excellent, Stephen. That’s all we have time for now but in the final little video in this series, we’re going to just pick up on this subject a little bit more and talk about the tricky issue of implementation. So thank you very again, Stephen, for your support on this and I look forward to our next video together.
[00:09:48 –> 00:09:48] Stephen: My pleasure.
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