In recent years we have been doing a great deal of work with club store strategy and design. Over the course of our work we have learned to love the club, and so we wanted to highlight some interesting facts about the three key club retailers with an infographic. Below you can find the fruits of our labor, and hope you enjoy it. For what its worth, we plan to publish more of these soon, so let us know what you think…
All posts in Business & Strategy
There is never a shortage of things to worry about when running a business. As a result, even for large companies branding is an often-neglected piece of the marketing puzzle. Moreover, even when companies decide to invest in their brand, the field is a specialized one that can be hard to navigate. Choosing the right branding agency should not only address an urgent business need (i.e., a new logo), but it can also change the way you look at your business.
There are a variety of things to look for when choosing a branding agency, but below we highlight five of the most important ones (in our humble opinion).
1. Do they (or can they) understand your business?
This may be the most important thing to discover about your shiny new agency candidate. Most branding agencies will roll out their most impressive examples of prior work, and they will showcase their largest clients. You should be looking beyond the sparkly exterior and really probing their business acumen. Its easy to create beautiful and impressive looking designs and brand identities. But beautiful and impressive are frequently not the solution to your business problem. Do they have the ability to understand your consumer, your industry and your position in the market? Will they lead their ideation and design process with those things, or will they focus first on creating visually engaging and cutting edge design solutions? Not that there is anything wrong with beautiful and cutting edge, but those should be arrows in the agency’s quiver – not arrows that they shoot every time.
2. How creative are they really?
There are no (good) cookie cutter solutions when it comes to branding – or any other creative work for that matter. Choosing a branding agency that comes up with fresh ideas and creative solutions will help set your business apart from the rest, stay current, and identify both problems and strengths with your business positioning. Great creative will allow you to stand out from your competitors. Obviously you want to look closely at their portfolio, and evaluate how pretty, cool and fresh their design work is. You want their work to stand out in those areas from other agencies that you are interviewing. That said, you also want to consider (and have them explain) how their portfolio projects compare to other brands in the relevant industries. You want an agency with a deep understanding of branding, design and marketing trends. While the most creative work is not always the solution, you want an agency that can always deliver the most creative work.
3. What are their past results like?
It shouldn’t be a secret what your branding agency can do for you, and what their past results look like. Can they meet your goals? Ask for metrics, analytics, reports, and take a look at their measurable results. ROI has become an overused buzzword, but it is definitely relevant in this context. Ask for case studies where they detail the ROI that a client experienced in connection with their work. Can they point you to the success of a past client after a rebrand project? Can they point to a product that was a big hit after a packaging design project? Can they give you numbers? This will help you determine what their past results have been like, as a whole, and will also give you insight into what the agency finds most important (based on what and how they measure).
4. What is their process like?
Branding a product or service can be nearly impossible without a set process. Accordingly, most agencies follow certain processes for their projects. Many have trademarked or otherwise named their processes. While these are often cheesy catchphrases, they at least give you a look into your prospective agency’s creative process. If they don’t offer up details about their process, ask about it. Most branding processes start with some form of creative brief – ask to see a sample creative brief. Dig in and don’t feel bad about looking behind the wizard’s curtain.
5. Are they a versatile bunch?
You need to have a real understanding of your business problem, and you should have expectations in terms of what services and deliverables you will need. Obviously you will look to your prospective agencies for their feedback on those points, but the first step is understanding the problem. In that regard, very few branding agencies can solve all of your problems on their own, with their in-house staff. Most branding agencies rely on freelancers to complete certain aspects of their client projects (designers, web developers, copyrighters, etc). Be sure to ask what their core capabilities are internally, what they would need to outsource as part of your scope of work. The more they can control in house, the better.
Choosing a branding agency – or rather, the right agency – will take some time. Ask for references, google them, compare portfolios, and take your time researching agencies. And last but not least, make sure you like who you will be working with and are confident that they are the right cultural fit for your company.
Pabst Blur Ribbon, better known to most as PBR, has served as one of the most popular beers for middle class Americans since its origin in 1844. What was once the cheapest beer on the shelf is now a global phenomenon.
Brand Repositioning in the Early 2000s
In the early 2000s, PBR gained popularity with urban hipsters, college students, and millenials. The new fans were attracted to the minimal marketing and non-mainstream attitude. Following a nearly 20-year decline, sales suddenly rose 5%.
While most companies would have rebranded to appeal to this new audience, PBR opted to keep their branding the same in order to maintain the authenticity that attracted hipsters in the first place. Instead, they sponsored customer events and featured user-submitted photography and fan art on their website to encourage customer interaction, all without calling in the PR team.
Finding an Audience Abroad
Following the example General Motors set in 1999, PBR set out to appeal to a worldwide market and created a case study in brand repositioning. In fact, big-name brands have been branding to the foreign market for decades. If you’ve ever taken a trip to Europe, you may find Disney comics are just as popular there as they are here. Kit-Kats and Spam are two other food brands that sell just as well abroad—if not better—than they do domestically.
Through a licensing agreement and joint venture arrangement with China Pabst Blue Ribbon, the American company has been able to successfully branch outside of the United States. PBR rebranded their once generic American product with a luxury ad campaign. What has been deemed “Blue Ribbon 1844” is selling for $44 a bottle in China. The specialty beer is considered a luxury in China and gives the perception of riches.
The brewmaster states that the specially crafted reddish brown strong ale is in fact better than its American counterpart. “Blue Ribbon 1844” has the appearance of brandy, an updated recipe, and is aged rather uniquely, but it appears that the branding and perception is what is attracting most Chinese consumers.
PBR was once considered a working-class beer, but due to recent rebranding efforts, it has become the beer of choice for hipsters, college students, everyday Americans, and foreign enthusiasts alike. The increase in sales led to a 10% price increase in 2009. PBR’s success domestically and abroad has led to pricing shifts throughout the beer industry worldwide.
Pabst Blue Ribbon has proven that any business can create a successful brand identity and reposition themselves to be who they want to be, regardless of their current image. They continue to be one of the fastest-growing consumer brands in the country, with widespread influence around the world.
LEGO began laying bricks for a successful business in 1932. The company faced a number of challenges throughout the years, and was able to pull off one of the most incredible turnarounds in corporate history. In the early 2000’s, the company went from the brink of bankruptcy to the most profitable toy company on the planet.
The name LEGO is an abbreviation of the Danish phrase “leg godt,” meaning “play well,” and can also be loosely interpreted as “I assemble” in Latin. In 1949, LEGO first introduced the original plastic interlocking building bricks. Today, it offers unique plastic building blocks, kits, and sets that change with current trends.
After building up assets over the decades, LEGO began to lose its focus as an organization, while spreading its resources too thinly. As a result, the company nearly went bankrupt in 2004. Facing harsh competition from Mattel and Hasbro, sales decreased 40% in only two years. But that was just the tip of the iceberg. As noted in an Economist article in late 2006, “[t]he logic of diversification was compelling . . . but LEGO went about it the wrong way. It tried to become a lifestyle brand with its own lines of clothes, watches and video games. And as it tried to attract more girls, it started to neglect its main customers, boys aged five to nine. [According to Jorgen Vig Knudstorp, CEO of LEGO Group,] ‘we had become arrogant—we didn’t listen to customers any more.’”
To restore its position in the industry, the company embarked on a long-term and very painful turnaround strategy. Around 3,500 of the company’s 8,000 employees were laid off. LEGO began divesting or discontinuing products that were not solely focused on their core product. It sold four theme parks, the video game development division, and shortened the time spent in product development. It also focused more on adult customers, who account for nearly 10% of sales. And last but not least, the company pivoted to focus much of its business on a new revenue stream that proved to be prophetic: product licensing.
With the new strategy in place, the company quickly worked its way out of debt and became the fastest growing company in the industry. By shifting its market positioning, brand strategy and business strategy, taking advantage of licensing opportunities, and refocusing their efforts and resources on their core product, LEGO was able to restore its firm foothold with many customers that it had lost, both young and old.
Trends show that consumers are looking for more protein in their daily diet and have been leaning towards Greek yogurt and protein bars. Clearly, food innovation managers (and beverage innovation managers) have taken notice.
The latest player in this increasingly crowded field? Why of course, protein packs.
For example, the new, on-the-go packs from Oscar Mayer that contain meat, cheese and nuts cater to the brand’s active consumers who are looking for convenient snacks to keep them going during the day. According to Packaging Digest, The P3 Portable Protein Pack is being rolled out with a lucrative marketing campaign and is expected to be a driving force in the expanding protein-snacking market which is estimated to be worth $19 billion.
According to FOOD navigator-usa.com, Hormel’s REV snack wraps sales approach $30m in first new month on market. These can be eaten hot or cold and feature a combo of meats, mozzarella cheese and a flatbread wrap, with 15-18g of protein.
The verdict? These protein packs are an interesting addition in a field with rapidly growing demand. For both children and adults, they seem to be an enticing option as a healthy alternative to snacking. Expect to see more such products on supermarket shelves in the foreseeable future.
Works Design published the cover story for the February 2014 issue of Brand Packaging Magazine, entitled “The Eurofication of Private Label?” The article looks at some of the current trends affecting U.S. and European private label brands, and contemplates the future of the U.S. private label market. Below is an excerpt…
The U.S. private label market has grown significantly in recent years and will likely see continued (albeit measured) growth. The recession has created seemingly permanent changes in consumer perceptions and spending habits with respect to private label brands. While the growth rates may not be astronomical in the near term, the private label industry is growing and building a very formidable base thanks to changed consumer preferences, retailer focus on brand building, and the emergence of deep discounters, among other factors. Smaller retailers should start to follow the large players’ lead with tiered structures for their private label portfolios and highly differentiated brands in niche categories. They should (and will) forget the copycat era and think in terms of building brand equity with engaging packaging, product innovation and promotional activities around their private label products. Bottom line is that the retail environment will not mirror Europe in the foreseeable future, but private label is building a foundation that will continue the transformation of the industry for years to come.
Click here for the full article.
Not sure whats going on at Hershey’s, but it seems that they are constantly in the news these days with innovative and cutting edge new business initiatives. Seems to us that the company has taken a more aggressive position on investing in growth, and it also seems that this change has been a huge success. It has not only increased the company’s sales (which it has), but more importantly its market share and brand value. Below is a look at an interesting case study in building a brand – a ubiquitous legacy brand – courtesy of Hershey’s.
In a recent article from Adage, we were surprised to learn that Hershey’s did not launch its first national ad campaign until 1970. And even then, Hershey’s has historically been fairly conservative with its ad spend. In recents years, however, that trend has started to change. Since 2006, the company has increased its ad budget from a little over $100 million to almost $600 million per year. This sea change in strategy has not only affected signature brands like Reese’s, but it has also served to support many of its smaller niche brands like Rolo, and more recently, Take 5.
Leading with Technology
As you may have seen, Hershey’s recently announced a partnership with 3D Systems, a leading 3D printing company that also happens to produce 3D printers that can print objects out of food (including chocolate). With this arrangement, Hershey’s has not only identified one of the fastest growing technologies in the world, but it has also become a pioneer in bringing this technology to the whole food industry. Most people dont think about 3D printing as a food manufacturing process, but that is a very real application for this technology. It has the potential to disrupt the existing supply chain for food manufacturing, while at the same creating dramatic new revenue streams for food companies that partner with 3D printer manufacturers (or become 3D printer manufacturers). Whether selling branded 3D food printers, raw materials, components, food products, or other accessories that are beyond our imagination, the potential opportunities for food manufacturers are astounding. And it speaks volumes that Hershey’s was among the first – if not the first – to act in that space. As outsiders, hard to imagine that Mars is not negotiating a deal with Stratasys or ExOne as we write this.
Strategy & Innovation
In the realm of product development and innovation, Hershey’s has introduced a number of successful new product launches around the globe, while demonstrating great vision and timely execution. For instance, in the U.S., the company has seen success with various new and creative line extensions such as Reese’s Minis, Hershey’s Drops and Rolo Minis. Moreover, a few weeks ago Hershey’s announced that it will extend its brand into the world of chocolate spreads. Not certain whether this will be an outsized hit for the company, but it just makes so much sense to use the Hershey’s brand as a springboard into the chocolate spread category (not coincidentally the fastest growing category in the U.S. spreads market). All that said, perhaps the most interesting part of the Hershey’s story is its laser-like focus on international growth, and particularly the Chinese market. The company has made clear that China is at the top of its priority list. Accordingly, it sports a fulsome product pipeline in that country, with Hershey’s Kisses, solid chocolate globes, and more recently a new line of soft caramels that will soon be finding their way into the U.S. market.
In a recent article in Knowledge@Wharton, a leading business publication by the Wharton School at the University of Pennsylvania, the authors took a close look at the pop-up phenomenon that has taken the retail industry by storm in recent years.
A “pop-up” is a physical retail store that can take many forms – from temporary stores that open for days or weeks to stores within stores that can be either temporary or more permanent in nature. The number of pop-up stores in the U.S. has grown by 30% over the last 3 years, and that growth shows no signs of dying off. One sign that this trend is turning into a full-fledged industry is the number of startup companies that are popping up (pun intended) to service this industry. For instance, you can now find a number of pop-up leasing agents and consultants (www.popupinsider.com and www.thestorefront.com, among others), and the media has been tracking new developments in the space as well.
Retailers, branding agencies and consultants rarely think of this tool to build awareness, buzz and “hip factor”, but it should not be overlooked. One of the first large brands to venture into the pop-up world was Target, which opened a temporary Christmas store at Chelsea Piers in NYC in 2002. Target has since done 20 pop-up stores, mostly in the U.S., and hundreds of large and small brands have followed this trend. One notable example discussed in the Knowledge@Wharton article is the world-renowned California restaurant French Laundry, which opened a pop-up restaurant in London for 10 days in 2011, and offered nine-course meals for $400 each.
While the most profitable pop-up stores have tended to be specialty stores that open around the holidays (i.e., temporary Halloween stores), many brands are using this strategy for the marketing and promotional awareness aspects rather than just focusing on turning a short-term profit.
While this trend has not yet blossomed into a full-fledged industry, it is on its way. And moreover, it has created a new shopping experience for many consumers while adding a cool factor that has been lost with the growth of big box retail.
There are precious few companies in the world that have experienced the kind of explosive growth that Facebook and Google have enjoyed. And of those few companies, the vast majority have a silicon valley area code. Given all that, you might be surprised to know that in recent years a food manufacturing company based in upstate New York has experienced growth that even Facebook and Google would envy. Call it brand building on steriods. That company? Chobani.
In case you have been avoiding the supermarket for the last decade, Chobani is a Greek-style yogurt that has taken the world by storm. As a recent CNN Money article states, the growth that Chobani has experienced “is unheard of, particularly for a startup, in the packaged-goods business—and rare in the tech world.”
That being said, this company’s success clearly has a lot to do with (as most often times it does) the person behind the brand: Hamdi Ulukaya. In 2000, Mr. Ulukaya borrowed $1 million to buy an 85-year-old yogurt factory in upstate New York. Five years after selling the first case of Chobani, the company reached $1 billion in revenue. Mr. Ulukaya has always been the 100% owner of Chobani, and has used an innovative business model that is anything but a corporate one. He doesn’t believe in customer research, as all feedback from the website goes directly to his BlackBerry. He doesn’t value one employee over the other – he values the person who answers the calls just as much as someone in the purchasing department.
What’s more, from the start, Mr. Ulukaya has and continues to give 10% of Chobani’s after-tax profits to philanthropy. His motto? “Nothing but good.”
To read the CNN Money article, click here.
When you think of Disney you think of movies, toys, backpacks, and young children’s branded packaging items. Well, how about deodorant?
Reebok collaborated with Disney on a design to market their deodorant to preteens. Reebok did this in hopes of an increase in sales during the Indian Festive time of Diwali. Notice how although not bright and colorful, the design remains in sync with Disney Style guides and not to mention the Indian festival of lights.