Big Brands are facing big trouble and mergers aren't the solution

By Published on .

Has the music finally stopped playing for the Big Brands of the world? A confluence of events -- slower population growth, rising influence of local and national tastes and preferences, growing clout of big retailers, widespread availability of technology, and changing consumer behavior patterns -- have conspired to lessen the Big Brands' hold on the hearts and pocketbooks of customers.

What's more, major corporate marketers are in the habit of asking advertising to do too much. "Value added" -- the mystical ingredient that makes a product a brand -- is too often built around the profile of the target buyer rather than any actual product attributes. So advertising, asked to invent something that isn't really there, is also falling into disrespect.

Traditional marketing and traditional marketing companies don't seem to be able to cut it anymore, and it almost seems a sense of panic is driving the move toward consolidation. Iconic brand name companies such as Campbell Soup Co., Gillette Co., Kellogg Co. and Quaker Oats Co. have lost their way and are eyeing each other as a solution to their woes. Even Procter & Gamble Co. is doing the unthinkable -- preparing to license its brand names, and even its technology.

I have never quite understood this rush to consolidate, either among corporations or ad agencies. The thesis that you can take a strong brand in one country and make it equally strong around the world doesn't always apply. What makes Unilever, for instance, believe it can catapult brands such as Skippy peanut butter or Hellmann's mayonnaise (marketed by its most recent acquisition, Bestfoods) into the worldwide marketplace? (Do they even eat peanut butter in third world countries?)

The problem for both Unilever and P&G is consumers around the world aren't automatically reaching for their major brands. The Financial Times noted recently: "The assumption that the citizens of the developing countries craved nothing more than to consume Western brands turned out to be arrogant, and Western brand owners found themselves not only fighting cut-throat competition from each other but from local competition."

Another major reason for corporate consolidation is to match the growing strength of retailers, who demand more and better terms from suppliers. Corporations are under the delusion that the bigger they get the more success they'll have muscling their way onto retailers' shelves.

I'm more convinced than ever that if marketers want to regain the upper hand with consumers and retailers it won't come from sheer size and force. What it will take is total emphasis on giving consumers products and services that complement the way they live their lives. That's what creativity is all about, not trying to force the advertising because the product itself doesn't deliver benefits that consumers believe are important and meaningful.

M.T. Rainey, co-CEO of British ad agency Rainey Kelly Campbell Rolfe/ Y&R, had it right when she told International Advertising Association delegates in June that creativity isn't the property of a brand's advertising or marketing.

"It is not an option added at the end of the process like a glossy paint finish to a car," she said. "Creativity is the property of the brand itself -- a culture, a value system, a way of being and behaving that should permeate an organization from its core and should be seen in every aspect of interaction with the brand."

One company that seems to get it is General Mills. What drives General Mills is developing products for the way consumers actually use them. Steve Sanger, chairman-CEO, always asks one question, The Wall Street Journal reported: Whether the company can make the item "one-handed," to appeal to people who like to keep one hand free to type on their computer or drive their car and eat lunch or dinner.

"That's the way consumers are eating today," Mr. Sanger told the WSJ. "You have to make everything more convenient."

This approach -- giving consumers what they want for the way they live their lives -- sounds simple. The bad news is you can't do this to one brand around the world. The good news is retailers will clamor to stock a product if it gives consumers what they want, regardless of the clout (or lack thereof) of the marketer. And it makes advertising more efficient and effective by focusing on the attributes of the prodct itself.

Most Popular
In this article: