The Origin of Brands Blog

Wal-Mart: To change or not to change, that was the question.

The word “branding” comes from the cattle ranching days of the Old West. The branding of livestock was a rigidly-enforced practice that helped to keep life peaceful and orderly.

 

All cattle look pretty much the same. Without a brand, no cowboy would know whose cattle are whose. Determining ownership would be a nightmare.

 

In the American West, cattle still graze freely and branding allows ranchers to easily identify their animals especially during the fall roundup.

 

(Of course, some ranchers keep their herds on fenced lots and in that case branding isn’t required but is often done anyway. And in business, if you have no competition you don't need a brand either.)

 

A brand is the special mark or identifying design owned by a rancher. Branding occurs when an owner’s branding iron is heated to red hot in a fire and is pressed against the side of the animal. Not a particularly pleasurable process for the animal but essential for the rancher.

 

 

In the marketplace, brands and branding are as essential as they are on the ranch. Without a brand, consumers would have difficulty differentiating one product from another. But while any company can put a mark on the side of a package, that doesn’t make the mark a powerful brand. Brands are only powerful when you can burn that same mark into the mind of the consumer as well. Ouch!

 

Burning the consumer’s mind is the key detail many companies miss. They think branding is putting their name and logo on the package. But that is only half the answer. Making a branding iron is the easy part. Holding the consumer down and burning that brand into the mind is the hard part.

 

The good news is that once you have burned your brand in the mind of the consumer it is practically permanent. An established brand is difficult to change and hard to forget. Unless you keep changing what the brand stands for to the point of no recognition.

 

It is important to keep the look of your branding iron consistent over time. Constant or drastic change can be a brand-killer.

 

(Of course, if nobody knows your brand, you can change it all you want. Marlboro was initially a women’s cigarette which was rebranded with cowboy imagery.)

 

It was no trouble for Marlboro to change from a woman’s to a man’s cigarette but they can’t change from the cowboys without dire consequences. Marlboro has wisely stuck to the same imagery, look and logo for over 50 years.

 

 

Why do companies want to change the look of their brand?  One reason is to keep the brand current and fresh. Or to attempt to change the position of the brand.

 

Making subtle changes over time to a brand is fine. It allows you to keep the logo fresh and up-to-date. The UPS logo has undergone 4 changes over 100 years but it still retains the same look, feel and most importantly the same color, brown. Consumers have hardly noticed the changes.

 

 

Sometimes a logo may not be perfect, but sudden, radical change to a well-known brand can be jarring, disturbing and destructive. This is the case with the latest changes to the Wal-Mart logo.

 

Since the launch of the company in 1962, Wal-Mart has made many subtle changes. But for the most part it has stuck to its traditional uppercase type. The brand is currently the world’s largest retailer meaning that its logo is burned into the minds of hundreds of millions of people around the world.

 

 

So what did they just announce? A drastic change.  Not a small change, but a change that makes me cringe.

 

To hyphenate or not to hyphenate? Uppercase or lowercase? Star or no star? Dark blue or light blue? One color or two colors? Let’s change everything!

 

One change would have been radical enough, but making all these changes at once will  disconnect Wal-Mart from its past. Which for the world’s largest retailer is stupid.

 

In general, it’s preferable to avoid hyphens in names and to use upper and lowercase letters rather than all-caps. But for Wal-Mart, its name and its typography are so well known that changing everything at once is dangerous.

 

What is even worse is the yellow starburst that Wal-Mart is adding to the end of its name. What the heck is that? I’ll tell you what it is. It is an attempt to make Wal-Mart look like a environmentally-friendly company and a big-box store that cares despite a record of union blocking and community commoditizing.

 

Wal-Mart spokesman Kevin Gardner said: "This logo update is simply a reflection of the refreshed image of our stores and our renewed sense of purpose of helping people save money so they can live better."

 

Really? I think this logo update is an attempt by Wal-Mart to try and change the minds of consumers. To try to convince them that Wal-Mart has a renewed sense of purpose.

 

Has anybody mentioned Wal-Mart’s renewed sense of purpose to you? No one has mentioned it to me.

 

Changing the logo won’t change the brand in the mind. The only way to change what people think about Wal-Mart is to generate favorable publicity. The company has been making progress in this area with a more media-friendly CEO, Lee Scott, and by promoting energy-efficient light bulbs and a discounted drug program. I congratulate Wal-Mart for their PR, but question their radical logotype redesign.

 

For consumers who had problems with Wal-Mart’s brand the new logo won’t change their minds, slapping lipstick on a pig does little good either. For consumers who love to shop and save money at Wal-Mart (and there are a lot more of these consumers) the new logo is likely to confuse and frustrate. It is like your wife coming home with a new Mohawk, she might hope it makes her suddenly look young and rebellious but her family knows nothing could be further from the truth.

Wal-Mart save your pennies.

Wal-Mart, the world’s largest retailer, started a new ad campaign yesterday designed to defend its reputation and praise its record, as an employer and corporate citizen.

Come on, who are they kidding? Not me, that’s for sure.

After being hammered for decades by bad PR for the low wages and benefits it pays its workers, Wal-Mart thinks a few slick advertisements will repair its brand? Management must be drinking the Kool-Aid served by their ad agencies down in Bentonville.

Advertising messages cannot change the mind of a consumer. And most consumers believe that Wal-Mart is a great place to shop for low prices but not the best place to work.

Wal-Mart management says they want to take their case right to the people. But unfortunately the public is unlikely to believe or listen to their message because advertising delivers a self-serving message which holds no credibility.

Running ads might make board members feel better in the short term, but ads are unlikely to do anything for stockholders in the long term.

If you are faced with bad PR, running ads defending yourself actually sends the wrong message. People think the reverse of what you want them to believe. The more you deny something, the more people tend to believe you are guilty. Remember Bill Clinton saying “I did not have sex with that woman.” The more he denied it, the more we all knew he did it.

Or Taco Bell last month running full page ads with the headline “Taco Bell food is safe.” Why do they need to say that thinks the consumer, maybe there is something wrong with the food.

Wal-Mart should learn from its own mistakes. The company was unable to change any minds when it used advertising to try and move the brand upscale to sell expensive wine, clothing and jewelry. So it is unlikely to be successful using advertising to convince people it is a good place to work. Advertising cannot change a human mind.

So how can Wal-Mart repair its image? First they need to do something. Something big. Then they can use PR. The media gives the message the necessary credibility to get into the mind of the consumer.

Saying to “do something” to get PR sounds easy, but obviously it is hard. Powerful ideas are not always easy to come by. That is why sometimes the best ideas are those you steal. Or shall I say recycle.

Leaders should lead and set the standards for the whole industry. In 1914, Henry Ford shocked the world by paying his workers $5 a day instead of the standard $2.34. By doubling the working wage he made buying his cars affordable for his own workers. While Ford was initially ridiculed by the Wall Street Journal and other business leaders, the move is legendary in terms of building consumer trust, support and loyalty.

Wal-Mart could easily do the same thing. Wal-Mart could introduce a new Wal-Mart minimum wage at twice the federal minimum. Moving the minimum from $5.15 to $10.30. That would be dramatic change. And it would be the start of a program for building back worker support and consumer affection.

Wal-Mart also has some other good initiatives they could use increase support for the company. One is the promotion and use of compact fluorescent light bulbs that use 75 percent less energy and save consumers $30 over the life of each bulb.

Last October, Wal-Mart held a Light Bulb Summit in Las Vegas and invited manufacturers, academics, environmentalists and government officials to figure out how to sell more fluorescent lights. The light bulbs have been available for years, but consumers have been turned off by the idea primarily because the bulbs looked so unusual and cost more.

A recent front-page article in the New York Times brilliantly outlined the idea and gave Wal-Mart a huge PR boost. They should springboard this concept into a major campaign. The opportunity is enormous and something Wal-Mart is set up to do in a way big enough to make a meaningful national impact on our energy use.

Wal-Mart’s recent program to cut the prices of 300 prescription drugs to $4 each for a one month supply was another huge initiative it should continue and expand. Delivering low-cost goods and promoting energy saving ideas are both right in line with the basic Wal-Mart tenet which is to save money.

Wal-Mart loves to save us and itself money. And the one thing Wal-Mart should really save its money on is advertising. Spending ad dollars defending itself is pointless and wasteful. Nobody should understand that better than the bean counters in Bentonville.

I also discussed this issue last night on CNBC. You can see the video online. I don't know where they got the guy to debate me, he made no sense at all except to say that he loves Wal-Mart and they can do no wrong.

Wal-Mart in the middle of Elle!

Last week I was getting my hair colored at a salon and to pass the time I was flipping through Elle magazine which covers high fashion and haute couture brands like Chanel and Dolce & Gabanna. Most of the advertising is for thoes same brands and others of a similar caliber.

Then right in the middle of the magazine I was hit with this surprise. A multiple page advertising spread from Wal-Mart! Yes, always low prices Wal-Mart. 

Now I wrote last summer about the world's largest retailer making a foolish play into the fashion world but I am shocked to see them still beating that dead horse. I searched the Elle website for the words Wal-Mart and not 1 mention came up. On the other hand, Chanel yielded 64 results.

You can see why, just look at the outfit on this model! I am not a fashion maven by any means, but this is the best they could do? Believe me it stood out like a sore thumb in the magazine. Who are they kidding?

But even the best outfit would not change the perception of Wal-Mart in the mind. In the mind, Target owns the low-cost fashion idea, but they are not even silly enough to advertising in the high-fashion rags.

Wal-Mart is a strong brand, a powerful company and global leader. They own a powerful idea in the mind. But it is not fashion, it is "always low-prices."

When you are as big and as well-known as Wal-Mart all the money in the world spent on advertising is not going to change your position in the mind. You can't buy credibility and authencity. You have to earn that.

http://ries.typepad.com/ries_blog/2005/08/wacky_walmart.html

The More Expensive Side of Wal-Mart

Have you seen the news? Wal-Mart is going to show us its more expensive side. http://www.wfaa.com/sharedcontent/dws/bus/stories/032206dnbuswalmartlab.7b6ef28.html

In Texas, Wal-Mart opened a new store today to see if they can entice customers with a more glamorous layout, snazzy employee outfits and 1,500 new premium-priced goods. All this with the Wal-Mart brand name.

It’s true! The new store has hardwood floors, halogen lights, a sushi bar, and $500 bottles of wine. Employees will ditch aprons and don navy Polos and khakis.

So will shoppers flock to this new paradise? Will Wal-Mart suddenly be synonymous with everything from cheap detergent to rare Bordeaux? I think not.

You can’t appeal to everybody. No brand can stand for everything. Wal-Mart is the world’s largest retailer. They own “low prices” in the mind. All the radical store improvements that Wal-Mart is planning in Texas go against the philosophy of being the place to save money. Fancy stores mean fancy prices. Plain stores mean cheap prices.

The notion that there are two types of customers, low end and high end, is a fallacy. The same customers will shop in different stores for different things at different price points on different occasions.

A customer might buy basics at Wal-Mart to save money, cheap fashionable clothing at Target, bulk items at Costco and splurge at Saks on a designer dress. The customer doesn’t want to nor will she or he accept one store to sell them everything.

Customers want choice in stores as well as products. They want to choose what store makes sense for each shopping occasion.

Cheap coffee on the go from McDonalds, expensive coffee at Starbucks to relax and read the paper. One coffee drinker, two occasions. Having a cup of coffee and sticking to a plastic seat while kids scream around you is not the ideal coffee-shop atmosphere. People pay for the brand experience and perception as much as they pay for the product.

Compare telling your friends you got the sushi and wine for the party at Wal-Mart vs. telling them you bought it at Whole Foods. I think you will get two very different reactions.

For Wal-Mart, attempting to change the meaning of its brand is a lose-lose proposition. It has the potential to turn-off its existing core customer who might feel uncomfortable in a store with $500 bottles of wine. And it will dilute the power of its low price leadership position in the mind.

Sears has tried this strategy and failed. Sears is the leader in hard goods (tools, car batteries and major appliances) so they figured “We got the guys shopping here, let’s get the ladies.” And they launched the “Softer Side of Sears,” campaign.

With a store full of designer clothes, did Sears attract many women over to its softer side? Nope. It just left less room for the guys to be guys gawking at big tools. Trying to appeal to both sides just diluted the brand. Now Home Depot is the place for tools and Target is the place for clothes.

Moving the brand upmarket didn’t work for Sears and it’s unlikely to work for Wal-Mart. I predict consumers will flatly reject the new, more expensive side of Wal-Mart.

Will a line extension work for your brand? Here are my answers to some question you might have. (I answered the same questions after Wal-Mart decided to move into hard liquor.)

1. Does the line extension go against the core meaning of your brand?

Wal-Mart is cheap. Expensive products and fancy stores certainly go against the core meaning of the brand. Just like gourmet coffee and McDonald’s don’t mix. Once a brand has such a strong meaning in the mind of the consumer, you risk alienating existing customers by making drastic changes.

2. Does the extension overly complicate your business model?

What Wal-Mart does, it does very well. Squeezing suppliers on price and running a cheap company. Premium, expensive and fancy products all go against that model.

3. Do focused, successful competitors exist?

Wal-Mart already has plenty of competition with Target and Costco.

4. Will extending the line again further complicate your product line to the point of insanity?

In order to add the 1,500 new high-end products to the new Wal-Mart they had to get rid of guns and other products from lawn & garden, fishing, camping and the automotive departments. That could further irritate core customers who have come to expect such items. Making your core customers think you are too good for them is not a good idea.

5. Would the extension be better off as a new brand?

If Wal-Mart truly wants to explore a more upscale store, they should do it with a new brand name. The Wal-Mart name has too much baggage. When your brand is so powerful and well-known, change is not possible.

Moving the Kodak brand from film to digital, for example, is very difficult. But a new brand for the new category can work extremely well. Look at Lexus and Toyota.

For more about what I think about the Wal-Mart brand. Check these out:

Wal-Mart tried to improve its fashion image by advertising in Vogue magazine: http://ries.typepad.com/ries_blog/2005/08/wacky_walmart.html

Wal-Mart went against its conservative corporate image and introduced hard alcohol into its stores: http://ries.typepad.com/ries_blog/2005/08/walmart_gets_dr.html

On TV: Today I was interviewed by Jane Wells for CNBC and I will be discussing Wal-Mart again Thursday morning on CNBC at 6:30 EST.

Wacky Wal-Mart.

A strictly dry company selling liquor at “always low prices” was one thing. But now Wal-Mart seems to be doing something even more off the wall.

Wal-Mart is going to have an eight-page advertising spread in September’s Vogue magazine. The fall issue of America’s premiere fashion magazine is not where Wal-Mart belongs. Wal-Mart and high-fashion? I don’t think so. It’s like mixing orange juice and milk. I can only assume someone must have spiked the punch at that meeting.

Here’s what Wal-Mart CMO, John Fleming, says on the decision to advertise in Vogue: “We chose to team up with fashion authority Vogue to show the female consumer that dressing fashionable is now easier to achieve than ever before.”

Wait a minute! Team up? Wal-Mart just bought advertising space. Advertising doesn’t give you credibility. Third party endorsement gives you credibility. Vogue did not decide to cover the latest trends off the Wal-Mart runaway. Vogue editors are not suddenly endorsing Wal-Mart over Prada. Vogue simply took Wal-Mart’s money and ran. (In fact, if I were Vogue I would have left the money on the table.)

Wal-Mart using advertising to become cool won’t work. You can’t use advertising to change a mind, it just doesn’t have the necessary credibility. When Wal-Mart advertises its low prices and friendly smile, consumers nod their heads and say “yes, yes, I should be saving money at Wal-Mart.” When Wal-Mart tries to broaden its message and claim that it has high-quality, high-fashion clothing, it doesn’t get that yes, yes response.

I suspect when Vogue readers see Wal-Mart’s ads next month, they will most likely just skip over them. Reading Vogue is not about what you can afford it is about what you can’t afford. And even if you do buy clothes at Wal-Mart you are not going to suddenly feel like it is high-fashion just because they ran advertising in Vogue. You buy clothes at Wal-Mart because they have low prices.

You can have fashionable clothes at low prices, but that position is already owned in the mind by Target. And Target didn’t get that position just by saying it was cool. Target owns that position in the mind by making its stores feel fashionable, by hiring fashionable designers, and by having fashionable celebrities like Oprah say it is “chic.”

Wal-Mart is the world’s biggest retailer. They are big, profitable and have been able to expand into other areas like groceries (where price is king) quite nicely. But I don’t believe the mighty Wal-Mart will ever break into fashion. It is simply too much in opposition to the brand’s core identity. Not to mention a strong competitor like Target, who is already the fashion king, blocking its way.

Wal-Mart gets drunk.

Nothing like adding a little alcohol into the mix to get the party started. That’s apparently what Wal-Mart, the world’s largest retailer thinks. On the way to store shelves is something new, hard alcohol. What? Alcohol? Yes, that’s right. Wal-Mart, a company that strictly bans alcohol from its headquarters, company meetings and expense accounts is now going to sell the vice. A company headquartered in a dry county and bans risqué magazines and only sells sanitized versions of songs with controversial song lyrics because of its strong belief in family and decency is going against all that to make a buck. Unbelievable, but true. Big powerful brands do unbelievable things every day. So to help you from being a traitor to your own brand values here are some guidelines to help you before you get drunk and do something silly like Wal-Mart.

1. Does the line extension go against the core meaning of the brand?

Clearly Wal-Mart and hard alcohol don’t mix. Wal-Mart stands for low prices but they have also prided themselves on family values sometimes taking tough stands against racy music songs.

Volvo and convertibles did make too much sense either. Nothing is safe about driving a convertible; safety is usually the last thing on your mind while the wind is blowing in your hair. No surprise that the models weren’t big sellers.

2. Does the extension overly complicate your business model?

For Wal-Mart selling alcohol means negotiating complex and Byzantine laws that vary by state. Which include buying from distributors, a layer Wal-Mart typically eliminates to cut costs and streamline its delivery process.

On the other hand, Dell selling printers doesn’t much change its business model or go against its principles. Buy cheap and sell direct.

3. Do focused, successful competitors exist?

When Wal-Mart got into groceries, the big supermarkets were floundering. Trying to compete with Webvan, Whole Foods, Costco and CVS all at the same time by expanding their brands. So Wal-Mart was able to move into and dominate the grocery category.

But Gatorade making energy bars? There are too many successful focused competitors already in the category (PowerBar, Cliff Bar, etc.) that there is unlikely to be any room for such a silly brand.

4. Will extending the line again further complicate your product line to the point of insanity?

32 types of Tide? 13 types of Coca-Cola? When you need extra hands and feet to count the products in your line you are in trouble.

Does Wal-Mart really need to sell everything? What’s next stocks & bonds like Sears tried?

Or talk about crazy line extensions, what is a Bud Select?? I had one last night. I asked the waitress what it was and she said she had no idea. Was it a light beer? Was it low-carb? Was it great tasting? What was it?? If Bud doesn’t even know how are we?

5. Would the extension be better off as a new brand?

Many times a company has an idea that would be better served by a new brand instead of diluting an existing one.

Propel instead of Diet Gatorade.

Lexus instead of Toyota Deluxe.

Old Navy instead of Discount Gap.

Wal-Mart can never be fashionable.

For two years Wal-Mart has been trying to make itself fashionable. Wal-Mart and fashion? You have got to be kidding. It’s never going to happen.

Wal-Mart, the world’s largest retailer, stands for cheap. Wal-Mart has successfully established its brand as the place for “always low prices.”

Marketers always need to remember that once a brand is firmly positioned in a mind you can almost never change it. Especially when a strong competitor already owns the position you now want to move your brand to. Wal-Mart has no chance of become chic because Target already owns that position.

Target was the first fashionable mass merchandiser. They have invested heavily in top designers, trendy merchandise and cool store layouts. They are unlikely to be knocked off the fashion perch. Especially by a brand that is the antithesis of cool.

Why do powerful brands once they become successful want to mess with the formula?

Some other crazy examples of brands trying to move their position the mind include:

* Kodak Digital cameras, Kodak stands for conventional film the brand cannot move to digital

* Volkswagen Phaeton cars, nobody is going to spend $80,000 and only walk out of the showroom with a Volkswagen.

* Levi’s Tailored Classics Khakis, thank goodness Levi realized the error of trying to move a blue gene brand to khakis, they relaunched the product as Docker’s and the rest is history as they say.

Once in a blue moon in a slow moving category you can change your brand’s position. One example is Citibank, which 20 years ago was primarily a business bank. Today Citibank is a powerful worldwide consumer bank brand. But it took a long time.