Warren Buffett loves cheeseburgers and cokes.

He also loves brands.

Buffett is a brand investor, with an investment strategy that reads like a branding primer, in this from the Washington Post:

From his growing list of acquisitions, Warren E. Buffett seems to be investing like the world’s richest 10-year-old boy, if that boy lived in 1955 America.

He is Coca-Cola’s largest shareholder. He owns Dairy Queen. Last year, Buffett got a train set, buying into Burlington Northern Santa Fe Railway. And in late April, he bought a piece of the world’s largest candy store, sinking $6.5 billion into the Mars-Wrigley chocolate-and-bubble gum merger…

In the eyes of many, the Oracle of Omaha…looks like a brand investor.

Brand investors buy companies with well-known or well-regarded names — Apple, Tiffany, Disney and McDonald’s, to name a few…

Brand name companies…can often charge more for their products than their less-established competitors and weather tough times more smoothly because of their loyal customer bases. They also have the ability to leverage their name recognition to increase business — whether it’s expanding operations by attracting more Marriott hotel franchisees, launching a new flavor of Crest toothpaste or extending the Clorox brand from bleach to moist towelettes…

“Brands…[provide their owners] pricing power that allows the business to maintain margins throughout varying economic periods. Secondly, you get repeat business. And those two things lead to consistent earnings.”

Branded products companies have a higher propensity to pass along price increases when they have increasing costs themselves…

“The consumer is buying more than just the raw material… They’re buying something else, whether it’s a trusted relationship, or confidence in the product, an acknowledgment of a higher quality.”

In recent weeks these pages have explored the links between brands and authenticity, otherwise known as trust.

Rather than a slogan or logo, the process behind effective branding is about creating and reinforcing confidence - trust - in the benefits offered by an organization, product or place.

Brand investors agree.

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Shirley Slesinger Lasswell, the visionary who with her first husband extended the Winnie The Pooh characters and brand into a merchandising machine, passed away yesterday.

After licensing the merchandise rights to The Walt Disney Company in 1961 in exchange for royalties, Pooh products grew to generate over $1 billion in annual sales.

An interesting life, as captured in this remembrance from the Los Angeles Times:

Her first husband, Stephen Slesinger, was among the first to see Pooh’s financial potential. A literary agent, Slesinger in 1930 secured the rights to sell Pooh merchandise in the United States and Canada from A.A. Milne, author of the Pooh books.

When Slesinger died in 1953, Lasswell was left with the rights and a 1-year-old daughter to support.

“I thought, ‘Now what do I do?’ But it was right there for me,” Lasswell told The Times in 2002. “I decided to promote Pooh.”

…[She] paid homage to the character that’s “really been my whole life,” Lasswell told Fortune magazine in 2003, by driving a Cadillac with a license plate that said “POOH 1.”

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Notwithstanding the recent musings of its chairman, Starbucks these days is thinking of itself less as a coffee chain and more as a global platform with over 13,000 points of distribution. As reported in the New York Times:

When Bette Gottfried, a 48-year-old regular at a Starbucks in Ardsley, N.Y., saw that her favorite coffeehouse was promoting a film, she wasn’t immediately interested. “At first I was leery,” said Ms. Gottfried, dressed in workout clothes, wearing her hair in a ponytail and sitting near the window with her daily decaf mocha (“low-fat milk, no foam, no whipped”). “I thought, ‘Who are they to get involved in the movies?’ ”

Ultimately, however, she decided to take her 9-year-old daughter to see the film, “Akeelah and the Bee,” precisely because of the involvement of Starbucks. “I trusted seeing the movie, because it was promoted here,” she said. After all, she liked the company’s coffee; she had already bought and liked several CD’s it produced and sold, compilations of music by Carole King, Tony Bennett and Frank Sinatra. Why wouldn’t she like a Starbucks movie? She did, and now she’s considering picking up its latest cultural sales item: “For One More Day,” a book by Mitch Albom…

[Starbucks] is increasingly positioning itself as a purveyor of premium-blend culture. “We’re very excited, because despite how much we’ve grown, these are the early stages for development,” said Howard Schultz, the chairman of Starbucks. “At our core, we’re a coffee company, but the opportunity we have to extend the brand is beyond coffee; it’s entertainment.”

…Schultz explained, “With the assets [we have] in terms of number of stores, and the trust we have with the brand, and the profile of our customers, we’re in a unique position to partner with creators of unique content to create an entertainment platform and an audience that’s unparalleled.”

…As Mr. Schultz sees it, customers get a new cultural experience and Starbucks gets a “halo” — the associations people have with beloved music, with “quality, good will, trust, intelligence.”
…

“It adds to the emotional connection with the customer,” said Mr. Schultz, and keeps the Starbucks experience from feeling, as he put it, “antiseptic.”

This strategy of rethinking Starbucks as a platform through which to feed a range of music and other entertainment product offerings relies upon the law of borrowed equity — use of the reputation of another brand to add value to your own. Whether for Starbucks, or a casual dining chain such as Applebee’s, such a strategy can work, but only if those entrusted with the brand remain focused on their core product offering.

Difficult to accomplish, extending a tightly focused brand to a “platform” outside of a core product category. But it is possible. Just ask Virgin.

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In commenting on the many problems facing General Motors, we excerpted a portion of a column authored by Jack Trout in Forbes.

In 1981, Jack Trout and his partner at the time, Al Ries, published what would become the classic book on the topic of brand positioning, Positioning: The Battle For Your Mind. As a retail company CEO earlier in my career, struggling with a real world business problem, Positioning opened the door to an entirely new way of thinking about marketing, and the realization that the three advertising / PR agencies our company was then working with were incapable of the critical thinking necessary for world class brand development. Shortly after reading the book, we fired each of the agencies.

Branding was so different from advertising, and from public relations; the realization was like a bolt out of the blue. This simple realization changed a company’s fortunes, and it changed a career.

The book purchased some years ago is still around. It’s since become a dog eared volume filled with scribbled margin notes, and remains a great read.

Similar to the book, in the Forbes column Mr. Trout offers these contemporary nuggets on positioning and brand extension:

A successful brand has to stand for something. And the more variations to attach to it, the more you risk standing for nothing. This is especially true when what you add actually clashes with your perception. If Altira’s Marlboro stands for cowboys out in Marlboro Country, how can it sell Marlboro Menthol or Marlboro Ultra Light cigarettes? Real cowboys don’t smoke Menthols or Ultra Lights.

Should Wal-Mart Stores try to sell more up-market products to compete with Target? No, that’s not its market.

Should Porsche risk its sports car image by selling SUVs? No, it’s an iconic sports car brand.

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Donald Trump is starting a mortgage business. As the Orange County Register reports, Trump Mortgage is out to develop a national brand within the highly fragmented real estate lending industry:

The world seems pretty full of mortgage companies.

Donald Trump disagrees.

The real estate mogul turned name brand, turned TV star, officially rolls out Trump Mortgage…in New York. The purported goal of the business is to provide luxury-style service to both residential and commercial borrowers.

“Donald Trump is putting the suit and tie back in the mortgage business,” says a press release announcing today’s kickoff.

…Trump, always master of spin, dropped enough hints…on the mortgage company’s Web site, to guess at his assumptions:

People will pay up for a smooth sail through mortgage application hell.

And they’ll brag about the brand name tied to the loan.

[One] Orange County mortgage broker…thinks Trump might be on to something: “How many people want to boast that they have a Trump mortgage?”

We suggest, “Not enough.”

Trump is banking the success of this venture largely on the perceived value of an affiliation benefit, revolving around how a customer wants others to see them due to their affiliation with Donald Trump.

This brand extension has an all too familiar smell.