Does branded marketing or national brands really work anymore? Some people don’t think so. Whatever your point of view is you can’t ignore this simple truth. The combination of retailer and manufacturer consolidation combined with shareholder pressure to have successive quarterly earnings growth has done a lot to commoditize consumer product businesses. This has led some consumer product companies to stop innovating and marketing altogether because some don’t see it working anymore. There are many reasons why, but here a few big ones.
- Innovation activity has and will most likely continue to decline.
According to the Nielsen Company (a major consumer products research firm), less than .5% of the 11,000+ new products they’ve evaluated over the last three years met their breakthrough innovation criteria for success—that’s only thirty-four new products! While it’s always been true only a small percentage of new products ever achieve commercial success even during good times, there’s no question companies have been dialing back new product programs at an ever increasing rate.
Nielsen also found the total number of new product initiatives decreased by 6% annually since 2008 in the consumer packaged goods sector. While some of this decline can be attributed to lower economic activity, there can be little doubt companies are innovating less, not more. What I’ve also personally noticed is that companies have radically changed their new product initiative risk profiles due to continuing Wall Street pressures to have these programs payout in less than twelve months.
- Decreasing importance of “national” brands.
National or manufacturer brands are having a hard time holding their own these days. According to Nielsen and the PLMA, store brands now account for almost ~25% of ALL retail supermarket, drug chain, and discount store sales—and growing. They also state 80% of consumers now believe store brands’ quality is equal to/exceeds that of their national brand counterparts. This has led to the “commoditization” of many product categories. In some categories, retailers have “kicked out” the national brands altogether in favor of their own brands. While I don’t believe store brands will ever be 100% of sales, what is true are that national brands’ share of retail sales is decreasing and will continue to do so in the future. This is clearly a competitive threat.
- Consumers don’t really believe what brands say anymore.
According to the Futures Company, the global strategic insight and innovation consultancy, a poll of 28,000 adults in twenty-one markets found 86% thought big business maximized profits at the expense of customers and communities. In Jonathan Salem Baskin’s e-book “Branding Only Works on Cattle: The New Way to Get Known,” he takes this fact one step further by saying “Brands are suffering the same declines and shortfalls we’re seeing in corporate reputations. Trust is a synonym for BELIEF and perhaps the strongest indicator of PURCHASE INTENT and subsequent LOYALTY.” Branded marketing clearly has an integrity problem today, leading more people to choosing NOT TO BUY vs. buying brands that supposedly have the right feature/benefit package.
These factors and others have many now saying “Branded Marketing Is Dead.” It’s obvious we need to come up with a new way of thinking about branded marketing for the 21st century.
How About Unmarketing™?
Mr. Baskin goes on to say in his e-book “the 21st century model for brands will shift the emphasis from getting consumers to say YES to entertaining but otherwise meaningless engagement, and engaging with them on substance to which they’re allowed to say NO.” This is because people don’t really want to be sold on anything anymore. They want products/services that will help solve their unique problems—even if it means you might not make a sale today.
On the sales side of things, Peter Bourke, Principal & Vice-President of The Complex Sale, Inc., a sales leadership team consultancy, makes the argument sales teams (closely allied to marketing teams) need to unsell in today’s marketplace—“selling more by Unselling™” as he coins it. This is because selling has become what the buyer REALLY expects in a sales call. The problem is most buyers/clients don’t want to be sold. The goal should be to make the buyer more receptive because they don’t feel like they’re being sold. It might appear to be obvious, but many companies still resort to the “old” way of selling.
Old approach to making cold calls
Unselling™ approach to cold calling
“I have a product/service that best fit your needs” (presumptive at best).
“I have a product/service that MAY fit your needs and if you’ll allow me to ask a few brief questions about what/whom you’re using now I may help determine if my product/service is even worth your time evaluating”
It’s funny: this selling approach has been used very successfully on the marketing side in the past. Please see the link below for a short video on how 7Up developed and executed the “Uncola” campaign in the early 1970’s. It featured Geoffrey Holder before he played Punjab in “Annie” and a supporting role as Baron Samedi in the 1973 James Bond 007 movie “Live and Let Die.”
Case Study—7Up—the Uncola.
Geoffrey Holder – “Cola vs. Uncola Nuts”
As you can see, the account team and creatives at J. Walter Thompson (7Up’s agency at the time) correctly identified a unique consumer solution—a clean, light, wet, and wild refreshing soft drink that wasn’t a cola. It was also strategically correct since it allowed 7Up to not directly compete against the soft drink giants—Coke & Pepsi. The result was increased sales and brand equity for 7Up.
It’s time for Branded Marketing to redefine itself. We need to start Unmarketing our initiatives/products to focus on a more collaborative approach helping consumers solve their problems—even it means we don’t sell anything today. This means creating programs and products which build trust and credibility. I know this is a long term approach that might not payout in “ten minutes” as required by most Wall Street/finance people. However, what’s the alternative? Continue to market the same old way and then say it doesn’t work? We need to break this self-fulfilling prophecy and really change the way we do branded marketing going forward. If we do this, I think we might find a new renaissance in marketing because it will “work” again.
The question is: what are you doing in your organization to make this happen?