The nature of consumer franchises

Is there any difference between a Product Manager and a Brand Manager? Some people seem to think the two job titles are inter-changeable, but even if certain companies do use them in this way, they probably ought not to. There is a world of difference, after all, between a mere product – however good it may be technically – and a brand franchise which generates millions in profits every year. Getting the names mixed up, at best suggests a lack of clarity and at worst, a complete misunderstanding. So why make a distinction?

Most reasonably competent formulators can produce an adequate general purpose skin cream these days – look at any private label product on any supermarket shelf, in any European country. Somewhat fewer formulators, but still a good number, can produce a facial moisturiser which performs satisfactorily – it’s not an exclusive club.

But only a handful of companies can actually claim to own a franchise for skin care products in most countries of the developed world, which is unique to their particular company and which – by definition – no competitor can offer, i.e. a BRAND.

Some companies go so far as to call their marketing executives Franchise Managers rather than Brand Managers. I like that, because the Concise Oxford Dictionary defines ‘franchise’ as “the right or privilege granted to an individual, or corporation”.

There are many definitions of what a BRAND is, but here is one from my consultancy which we feel is worth considering:

A brand is more than a product, name and pack. It is a unique bundle of attributes and perceptions, which together form a franchise with the consumer which is worth money today, and goodwill tomorrow.

Attributes and perceptions

Attributes are those physical aspects of a Brand which can be relatively easily described. For example

	• name
	• logo style
	• pack format
	• label design
	• product appearance, texture, smell
	• performance characteristics
	• price

Perceptions are more tricky. Unlike Attributes, they tend not to be susceptible to objective, scientific observation although they can certainly be measured, thanks to market research. Perceptions are what consumers think about a particular brand, which may be a whole lot different from how a Technical Manager might describe the product as it appears on a shelf. For example

	• image
	• reputation
	• trustworthiness
	• suitability
	• effectiveness
	• nice-to-use
	• value for money
	• feel on the skin

These aspects of a brand’s persona are not mere after-thoughts, nice-to-have but not essential, somehow bolted on by the advertising agency. They are fundamental to consumers acceptance or rejection of the brand. If this sounds almost too basic a statement to make, I would have to point out that I have frequently heard formulators bemoan the fact that their product is outsold by competition, yet “It’s so much better than theirs!” Better? says who? Beauty is in the eye of the beholder, surely, or more correctly, in the eye of the purchaser.

Yet the same R&D people who say that their particular skincare product is technically superior and thus deserves better treatment at the hands of the consumer, will quite happily go on to express their own strong preferences in terms of, say, beer or breakfast cereals. Who says that such-and-such a brand of beer is better? The person who dreamt up the recipe? No, the person who drinks it! His judgement is final, and is queried at the brewer’s peril.

All this is not to suggest that formulation is in any way un-important in Skincare. Indeed, it is one of the key drivers of both attributes and perceptions. But there is a need, nevertheless, to recognise that attributes and perceptions are also complex aspects of any brand’s franchise with the consumer, and unless there is a clear understanding of exactly what they are, a manufacturer can lose a franchise much faster than ever it took to build it – consumers vote with their feet, or rather, with their shopping baskets.

Understandingly the attributes and perceptions that make up a particular brand’s franchise, is the job of the Brand Manager, to whom we will return to later in this article. But also part of a Brand Manager’s responsibility is the sharing of that understanding with his or her colleagues in R&D.

And when it comes to R&D, understanding consumers’ likes and dislikes is a whole lot more difficult than it may seem. The language of Perception is so much less precise than the vocabulary used to describe Attributes, and requires experienced interpretation.

For example, a new material may give a feeling on the skin which is different from the norm, i.e. from what the consumer expects, based on her experience of existing brands. A number of questions then arise-

• How does she describe this new skin feel?
• What does she really mean by the words she uses?
• Regardless of her comparisons with what she may have expected, is the new skin feel nice, or nasty?

Then very importantly, if the new formulation is intended for an existing brand

• Is this new skin feel consistent with her perceptions of that brand? Or is it dissonant?

Consumers have long memories

Once consumer’s likes and dislikes have been clearly understood, and their perceptions correctly interpreted, technical excellence is obviously of paramount importance in creating formulations in response.

Consistency over time is important, too, because consumers have long memories. One wrong move, which goes against consumers’ basic perceptions, can often take years to overcome – as all good politicians know only too well.

If consumers expect a particular brand of skincare to always be smooth, soft, caring, never strident, etc, and suddenly a re-launch formulation appears which is perceived as decidedly sticky, with a brash new fragrance, the resulting damage can take years to overcome – if indeed the brand survives that long!

TRUST is a key element of any consumer franchise, and one which is invariably built up over time, but which can equally be destroyed in just one bad experience of the product.

I came across the following results of some consumer research done by the Henley Centre in the UK.

How far do you trust the following to be honest & fair?
Your doctor	85%
Sainsbury	74%
Tesco	71%
Police	62%
Judiciary	43%
Local council	24%
A multinational	13%
Source: Henley Centre

It seems the medical profession have a great deal to live up to! Although Boots, the leading pharmacy chain in UK, was apparently not included in this particular survey, other research suggests that they, too, have an enormous reputation for trustworthiness when it comes to Skincare, etc, based on their medical heritage.

The curious thing from a marketing point of view, is the low trust rating given to multi-nationals as a group, relative to the evident trust afforded to some of their leading brand franchises. This probably goes some way to explaining why brands – as opposed to mere formulations or manufacturing expertise alone – can fetch such high prices when it comes to Mergers and Acquisitions.

It takes time...

Some brands seem to have an enduring quality over time, although this is invariably no accident. Rather, it reflects consistent nurturing by the manufacturer over many years, carefully listening to the consumer and developing a clear understanding of what it is that gives the brand its particular franchise with the consumer.

This is well illustrated from the excellent market research survey produced every 2 years by German media owners, Brigitte Kommunikationsanalyse. This measures brand Awareness, Liking and Usage and clearly demonstrates how it takes time to build a strong consumer franchise (Table 1).

Table 1
Brand ratings (%) for facial skincare, amongst all women, in the Western part of Germany
		1988	1990	1992	1994	1996	1998
Oil of Olay	Aware	81	83	82	85	86	84
	Like	22	24	32	34	32	32
	Use	13	15	18	20	17	18
Ponds	Aware	63	62	72	70	75	66
	Like	12	11	22	21	22	19
	Use	5	6	10	10	10	10
Avon	Aware	78	80	78	74	76	72
	Like	21	20	23	19	18	19
	Use	13	12	14	10	12	11
Elizabeth Arden	Aware	48	46	51	57	61	62
	Like	10	10	13	15	14	16
	Use	3	2	4	5	4	5
Plénitude	Aware		11	29	35	41	36
	Like		1	5	7	6	7
	Use		1	2	3	3	3
Nivea Visage	Aware				66	79	79
	Like				31	43	43
	Use				21	28	28
Source: Brigitte Kommunikationsanalyse
©Skin Care Forum

Brand management

Brand Management, as distinct from Product Management, should be about managing one of the company’s principle assets, namely a Brand. Just as Production Managers have responsibility for managing the company’ physical assets, represented by plant and machinery, so Brand Managers’ responsibilities lie with in-tangible assets, represented by consumer franchises, brands.

The word ‘should’ is used advisedly, because regrettably these days, the Brand Management function tends to be pushed further and further down the organisation. The role is often performed by a relatively junior executive, 3 or 4 years out of university, bright as a button, but singularly lacking in experience. Consequently, he or she tends to compensate for lack of any real understanding of what makes their brand franchise tick, by producing endless statistical analyses of sales and contribution. Indeed, they are frequently encouraged to do so, by a system which is more geared to financial housekeeping than to brand health.

In the same way that a Production Manager needs to have a thorough understanding of a production machine, before attempting to take it to bits, a Brand Manager should not start stripping his brand down for a re-launch until he knows how to put it back together again.

For example, to tinker with elements of a formulation in hopes of saving a few pennies – without knowing precisely what part each element plays in the brand’s franchise with the consumer – is to court disaster. Most of us can think of examples where the so-called ‘Salami’ effect has been in operation, i.e. test A versus B, no change; test B versus C, no change; test A versus C – significant difference!

Market research tools

Incisive market research tools can go a long way towards helping understand a) what makes a brand tick, and b) how it might be made more successful.

One such tool is the European Toiletries and Cosmetics Database run by Europe’s leading research practitioners, Taylor Nelson Sofres. They conduct 7,000 interviews every six months, across the five largest EC countries, covering consumers’ usage habits over most personal care categories.

The figure “Male skin problems 1998” is a good example of the sort of learning that can be obtained, in terms of providing direction for R&D effort. It shows those skin problems that male consumers have identified as applying to themselves. The relatively high figures for ‘minor problems’ in France and Germany is worth noting. The figure has been relatively high in Germany for some years, perhaps a function of Beiersdorf’s skilful advertising for their Nivea brand, subtly reinforcing its suitability for generally ‘keeping you looking good’ as opposed to specific problem solving. However, the French figure has increased from 6 percent in 1995 to 22.5 percent in 1998 – interestingly, during that time, Beiersdorf have launched Nivea for Men in France, and L’Oreal have introduced their Start male toiletries brand.

Brand stretching

Talking of Nivea, what an excellent example of brand stretching that brand provides. If ever there was a text book case of skilful brand management in action, then Beiersdorf’s Cosmed Division must surely win the prize.

Over the years, the Nivea franchise has been successfully extended into a whole range of categories, without diluting the core equity. Table 2 provides ample evidence.

Table 2
Brand ratings (%) for Nivea, amongst all women, in all of Germany
	Aware	Like	Use
Facial Skincare
Nivea Visage	77	41	27
Nivea Vital	60	24	13
Bodycare
Nivea Crème	89	56	46
Nivea Body	68	37	29
Nivea Soft	59	27	16
Haircare
Nivea	81	38	27
Bath & Shower
Nivea	88	54	44
Source: Brigitte Kommunikationsanalyse
©Skin Care Forum

Implications for technical managers

So what are some of the implications of all this for Technical Managers? Here are four which my consultancy believes are worth considering:

1.  Think ‘brand franchise’ when developing new formulations

• insist on your Marketing colleagues sharing their insights and understanding of each franchise on a regular basis
• consider what performance results are expected by consumers as of right for a particular franchise? What would enhance? What would surprise? What would appal?

2. Beware formulation moves which are dissonant with a brand’s existing franchise

• there is enormous potential for damage (to a corporate asset)
• BUT do not let it stifle R&D creativity

3. Consumer test, test, test

• there is a need for constant experimentation to see how your brand’s franchise can be strengthened
• but understand what the franchise is all about, before tinkering with the engine!

4. Similarly, monitor the opposition’s brands regularly

• know precisely how they rate versus your own, and why, in terms of both attributes and perceptions
• see where advances are being made and importantly, where dissonance is occurring – and hence potential weak points.