Brand strategy is business strategy, yet examples abound of Fortune 500 CEOs unable to grasp this simple truth.

If an interview in The Wall Street Journal is any indicator, the latest demonstration of this inability to grasp the obvious comes from the Chief Executive of Circuit City Stores Inc.

Too often the new CEO of an under-performing company focuses first on cost-cutting rather than revenue growth. The reason is that cost-cutting is easier than increasing sales. A cost-cutting plan may also be more quickly implemented, telegraphing “action” to a quarterly-focused Wall Street.

In contrast, developing a plan to build sales while increasing margin is more difficult, and more time consuming. It requires the CEO to ponder why their organization and products matter in a competitive marketplace.

To effectively drive sales, the CEO and his/her team must be able to define why they are, so that they become the only logical choice for what they offer. For many an otherwise certified smart CEO, it is a counterintuitive task at which many languish and even fail.

In the Wall Street Journal Q&A with Circuit City’s CEO, Philip J. Schoonover offers this:

WSJ: How is Circuit City’s multichannel approach — store, Internet and call centers — any different from the approach of its two bigger rivals, Best Buy and Wal-Mart Stores Inc.?

Mr. Schoonover: We have a culture that is beginning to cooperate and work together to provide a customer experience that is different and better. One example is our 24/24 promise. Order online, and we’ll have your purchase ready for you at a store in 24 minutes. If not, we’ll give you a $24 gift card. Our technology is unique and allows us to make that promise. Another is content. We have product reviews by leading consumer magazines. We have a whole explanation on what you need to make this new digital entertainment world work.

Mr. Schoonover claims Circuit City is different by being “unique” and, well, “different.” Instead, he would do well to look at the recent experience of another CEO who failed to understand the importance of articulating a simple brand promise demonstrating a memorable point of difference, and the predictable result.

The story of Paul Pressler’s reign at The Gap offers a cautionary tale of what happens when a CEO fails to think of brand strategy as business strategy. It is a lesson best illustrated by the backstory of Mr. Pressler’s failed development of a new Gap Inc. retail concept, Forth & Towne:

Gap designed Forth & Towne to offer baby boomers a miniature version of the department stores they grew up with, stocking four different labels under one roof…

Forth & Towne, or F.A.T, …never developed an engaging story to support the concept. And it never settled upon a single point of difference to set it apart from competitors. Forth & Towne tried to be too much for too many audiences.

How did this happen?

In a stunning display of corporate homogeneity, the suits at The Gap failed to articulate a simple guiding promise for the new brand, as demonstrated by how they settled upon a name for the new concept which offered no clue of a reason to care about it. The team at Gap Inc. thought they were playing it safe, when instead their decision had the effect of issuing an execution order for the new concept before it was launched.

Circuit City’s CEO makes the same mistake, as he fails to articulate what about Circuit City is truly different when compared to competitors such as Best Buy, Costco, and Wal-Mart. By speaking in platitudes, Mr. Schoonover fails to demonstrate why Circuit City exists, so that they become the only logical choice for what they offer.

This failure to focus on brand has been devastating.

Mr. Schoonover became CEO at Circuit City in March of 2006. Three months later Circuit City shares traded at a high of $30.49. Since then the stock has fallen to $4.95 per share at market close on February 12, 2008, a decline of 83% in some 20 months.

Yet a turnaround could be achieved with an effective rethink of the Circuit City brand.

But that takes guts, and appropriate leadership.

[More posts about Brand Relevance | More posts about Circuit City Brand Reputation | More posts about Brand Promise | More posts about Brand Differentiation | More posts about Consumer Electronics Branding | More posts about Retail Branding | More posts about Brand Strategy | More blogs about Retail Branding]

We recently discussed the topics of resurrected dormant brands, otherwise labeled Zombie Brands, and their value due to latent brand equity.

A follow-up story appears at the online magazine Slate, speaking to revived brands such as the Indian Motorcycle, the McDonald’s McRib sandwich, Polaroid recast as a flat panel TV brand, and the MG motor car.

Read more about similar dormant brands here.

[More posts about Brand Opportunities | More posts about Brand Equity | More posts about Brand Rehab | More posts about Brand Management | More posts about Brand Strategy | More posts about Packaged Goods Branding | More posts about Food Branding | More posts about Consumer Electronics Branding | More posts about Automotive Branding | More posts about Dormant Brands | More blogs about Brand Rehab]

Why are dormant brands such as Tab, Ford Taurus, and Vionnet resurrected and relaunched? The answer is in power of brand equity, often in brands with a long dormant legacy. It’s the reason the Ford 500 becomes the Ford Taurus, Tab becomes Tab Energy, and the Vionnet fashion brand is revived under the leadership of another respected fashion house.

For more on what one source refers to as “Zombie Brands,” click here to listen to an MP3 audio version of the story.

[More posts about Brand Opportunities | More posts about Brand Equity | More posts about Brand Rehab | More posts about Brand Management | More posts about Brand Strategy | More posts about Beverage Branding | More posts about Tab Energy Brand | More posts about Fashion Branding | More posts about Vionnet Brand | More posts about Automotive Branding | More posts about Ford Taurus Brand | More posts about Dormant Brands | More blogs about Brand Rehab]

A struggling Chinese manufacturer [and] the remnants of a failed British automaker…plan to pool their resources to rescue the iconic MG sports car from the automotive junkyard. This and more from the Los Angeles Times:

A consortium led by Nanjing Automobile Group announced a $2-billion plan Wednesday to construct a state-of-the art production facility in China, reopen a shuttered MG factory in England and open an assembly plant and a distribution center in the small town of Ardmore, Oklahoma…

In particular, experts lauded Nanjing’s decision to base its expansion on a globally recognized brand, because Chinese companies generally are stronger in manufacturing than in innovation and sales…

The acquisition of the MG brand name and tooling — combined with the low-cost advantages of manufacturing cars and parts in China — will give MG Motors North America Inc. an advantage in the competitive U.S. market, said Duke Hale, president and chief executive…

“Our competition, they’re going to bring cars specifically and exclusively designed in China,” Hale told reporters Wednesday at a news conference in Oklahoma. “We’ve got cars with European styling, European engineering, European flair and, oh, by the way, the big bonanza: a brand name called MG.”

In a classic example of the Law of Borrowed Equity, Nanjing and perhaps as importantly, China as a nation brand, stand to reap the benefits to their reputation among American consumers if they get the product right, when new MGs begin to roll off the Oklahoma assembly line in 2008.

The New York Times offers this powerful example of emotions still associated with the MG brand, an automotive badge absent from the U.S. market since 1980:

“It’s the first sports car that I remember as a child,” said Paul Fucito, who grew up around the corner from an MG dealership in New Jersey and remembers its closing.

Mr. Fucito, 34, a spokesman for George Washington University, has never lost hope that he will one day own an MG, although the company’s bankruptcy last year raised doubts for him about the chances of that happening. He participates in several online forums devoted to the brand and fantasizes about a new MG, painted British racing green, with wire wheels and chrome accents.

“It’s been that dream car that I’ve always wanted,” he said.

If the built-in equity of a decades-old brand can evoke similar feelings across a mass market, MG’s return to America can be hugely successful. To evoke the emotion and demonstrate the compelling difference needed to throw sales ahead of projections, MG should listen to this advice.

[More posts about Brand Opportunity | More posts about Brand Rehab | More posts about Nation Branding | More posts about Global Branding | More posts about MG | More posts about Nanjing Automobile Group | More posts about China | More posts about Oklahoma | More posts about Emotional Branding | More posts about Laws of Branding | More blogs about Brand Opportunity | More blogs about Brand Rehab]

General Motors is a company in distress.

As confirmed in the Washington Post by Robert A. Lutz, GM’s Vice President for product development:

“I can’t believe that we were so stupid,” Lutz said of GM. “People talk about Toyota overtaking General Motors [in global sales], as if GM were one company. But the truth is that we had not been one company for decades. We were different companies, each doing its own thing with little regard for the other. How can you run a global company like that? You can’t. It was stupid. No wonder Toyota was cleaning our clock.”

The separate-but-equal approach to financing, developing, designing and manufacturing divisional cars and trucks yielded equally mediocre vehicles, higher production costs, lower vehicle quality and legions of dissatisfied customers, Lutz said. But GM waited much too long to fix what needed fixing, he said.

“The problem was right there before us all along. It was so easy to see, once we decided to look. It’s not rocket science,” said Lutz…

“We now have one, single global design and engineering budget. We’ve put an end to badge engineering,” said Lutz, referring to GM’s discredited practice of making cosmetic changes to, say, a Cadillac and calling it a “Pontiac.

Candor, rather than self-adulation. The first step in developing, or remaking, a brand of relevance.

Paxson Communications recently announced the change of its television network brand from Pax TV to i.

Paxson’s hometown newspaper offers more of the backstory behind “i”:

Paxson Communications Corp. renamed its PAX-TV network with one letter — “i” — last week while realigning its mission as a provider of independently produced television.

But when it came to renaming its Web site, it needed to use seven letters.

West Palm Beach-based Paxson had to go with “ionline.tv” because other media companies are fond of the letter i, too.

For instance, the “i.tv” domain name is owned by iEntertainment Network Inc., a pay-per-play online gaming company based in Phoenix. And the “itv.com” site is owned by ITV Plc, the British independent television network.

“i-channel.com,” meanwhile, is part of Comcast Corp. subsidiary International Networks, which produces “multi-ethnic programming” in the United States.

But Paxson spokeswoman Leslie Monreal said her company’s “i” would not get mixed up in any alphabet soup.

“We distinguish it by the actual logo,” she said. “Our creative services department did a great job designing the i and also developing concepts around how to market the i.”

The fact that the new brand has already disappeared into the online tar pit filled with all the other iBrands to such an extent that the company is pinning all its hopes on the logo to bail them out betrays a great wealth of desperation. One of the “concepts around how to market the i” expected to shoulder this burden?

The i death-ray logo suggests further boardroom battles over the direction of the brand.

How often have we seen this: a rebrand attempt framed by a high (or in this case shockingly low) production value “solution”, presented in a conference room outside the context of how the target audience will hear it, see it, or experience it? Months later, the organization wonders why the sales needle did not move, or why the investment community lost interest.

In contrast to i, consider this noteworthy example of a television network pulling off a successful brand rehab.

A brand is your promise. How you keep it means everything.

Brand strategy is the intelligence of being effective in the crafting of a compelling, engaging, and unforgettable brand promise.

Effective branding measures up to each of the following:

• Achieve separation from competitors
• Demonstrate to the world you are different
• Reinforce your uniqueness
• Create positive and lasting engagement with your audience
• Be unforgettable
• Propel itself through the world on its own, becoming a no-cost, self-sustaining public relations vehicle
• Provide a deep well of associated imagery, and
• Rise above the goods and services you provide.

When a brand achieves each of these measures, an organization demonstrates their understanding of the power of branding.

According to this press release, American cable television’s USA Network is one of these:

For the first time in its twenty-five year history, USA Network is launching a comprehensive branding initiative extending across all media, including on-air, off-air and online platforms, [as] announced today by Bonnie Hammer, president of USA Network… The campaign…features a new logo and the tagline “Characters Welcome,” a statement that will reflect and inform every aspect of USA, from marketing and promotion to program development.

“When we started developing a brand strategy we knew we wanted it to be enhancing rather than limiting,” said Hammer. “We didn’t want to tack on a meaningless tagline or claim an arbitrary niche or demo. I believe we’ve succeeded in developing a campaign that’s organic to USA, something that captures and communicates what the network is about, what lives and breathes on its air.”

“In talking to our viewers and realizing what they loved best about USA, we realized that there was real connective tissue around the concept of strong, relatable characters,” added Chris McCumber, senior vice president, marketing and brand strategy. “‘Characters Welcome’ delivers a clear message that establishes an immediate emotional connection with our audience.”

“The beauty of our new brand is that it truly embraces everything we do,” said Hammer. “Whether it’s an obsessive compulsive detective like Monk, the tormented returnees of the 4400 or a real-life action hero from the WWE, it’s the compelling, sometimes complicated, often funny characters that make USA Network what it is.”

…USA’s website will offer an…extension of its brand message, called “Show Us Your Character.” “We will literally lay out a welcome mat for our audience,” said McCumber…

We agree. USA Network has developed a brand promise that will work at every audience touchpoint, pointing to a unique difference contextualized with emotional immediacy. This promise also offers a clear management focus to the network’s leadership team, guiding content development and audience interaction on every delivery platform.

The new USA Network brand image measures up, achieving audience engagement — a recurring encounter to drive and sustain business growth. They accomplish this in large part by focusing on their audience, rather than themselves.

Most young American males wanted one. At a time when U.S. carmakers were churning out chrome-laden 4-wheel starships of the road, the nimble MG convertible was an elegant sight.

Though new production models have not been available in the United States since 1980, the MG brand remains an icon in America and elsewhere. Yet, as reported by The Telegraph, the lack of an effective brand strategy will prevent MG from reaching the United States and elsewhere anytime soon:

A former director of MG Rover has slammed bosses of the failed carmaker as muddled, inert and naive and criticised them for missing chances to stave off a collapse that cost 6,000 jobs.

Peter Stevens, who was appointed MG Rover’s consultant director of design in 2000, reckons the board…was in “the same old muddle you’d get in a corner hardware shop”.

He says the Phoenix [Consortium] had no proper plan for positioning MG Rover in the market after scooping the firm for £10 in May 2000, and had no clear long-term strategy to secure its future in the motor industry.

In two ITV television interviews…he [says]: “I don’t think that [Phoenix] had a very clear plan as to how you come to admit that you’re not a huge volume car manufacturer … I never felt that we were doing that amount of soul-searching into really what the company should be.”

The broadside comes as MPs prepare to debate the collapse of Rover for the first time…

[Stevens] says Rover failed to capitalise on its success in developing a car that achieved a world speed record…and criticises the tens of millions of pounds poured into motor racing in an attempt to boost the brand.

If a management team fails to understand the cost effectiveness and market leverage of great brand strategy over advertising and promotion expenditures, market opportunity is lost. The Phoenix MG Rover management team learned this the hard way.

For whoever may now acquire the brand and assets, MG’s opportunity is to define itself in opposition to the competition. To accomplish this, MG must tag their key point of difference, the single and best distinction they may own to the exclusion of all competitors, and contextualize their key difference with emotional benefits — expressing how people feel when using the MG brand, and how they want others to see them through their MG affiliation. Performed effectively, the result is an engaging mental postcard; so compelling the image becomes top-of-mind when considering a purchase among competing options.

For a competitive example, look at the strategy behind the Mini Cooper brand.

In America, the Mini Cooper introduced an alternative culture called “motoring.” The Motoring brand position is expressed as “an enlightened form of driving”:

“It is about exploration, discovery and exhilaration… While driving…is about cars and people, Motoring is a unifying religion, a new more enlightened form of driving…[where] one’s outlook on life changes. And so the world becomes a better place.”

This explanation of difference and consumer benefits led to the creation of a call-to-action key message, the tagline “Let’s Motor.” The premise is that only in a Mini Cooper is it possible to Motor. Motoring is a market niche the Mini Cooper creates, and thereby effectively claims to the exclusion of other competitors.

In contrast, MG in 2002 introduced a brand position fronting the tagline “Life’s Too Short Not To”:

“MG is about living for the moment, embodying the spirit of “Life’s too short not to” and defying the laws of convention. The exhilaration, thrill and excitement of the driving experience shapes the hearts and minds of our drivers’ passions, whilst retaining the British heritage it is famous for.

The MG position is one that could apply to nearly all sports cars. And it does. This position is not one about demonstrating the MG experience as unforgettably different from any other automotive experience. As a test, substitute the name of most any car make in place of MG ( just as Rover dealerships do) and see if the position (absent the mention of British heritage) is just as effective/ineffective with, for example, a Corvette, a Volkswagen, or a Lexus.

MG executives further confused the matter by also sporadically describing their brand in the media as a “practical muscle car.” Assuming “practical muscle car” is a consumer-relevant and unique claim, MG did not evocatively contextualize the “practical muscle car” difference. Instead, MG’s management copied rather than moved in opposition to their rivals, with misdirected spends on motor racing.

To engage the consumer, MG must seize control of the market conversation. Beginning with the story of MG’s small beginnings in the 1920s, the brand must identify the compelling emotional immediacy to which the audience will be drawn rather than chased. This is true at any consumer touchpoint, whether product design, showroom salesmanship, or print advertisement.

The MG story can become instantly evocative, a story to untangle the muddle, one engaging the consumer to seek out the brand. But it will take a leadership team with expertise and foresight to uncover the answer.

When market analysts draw a direct line between a company’s brand strategy and its financial performance, the lesson is clear. Any company not focused on effective brand strategy puts their market capitalization at risk. Problems at Maytag offer a cautionary tale of what happens when management overlooks the critical role of brand strategy in driving market growth.

Maytag is the third-largest seller of home appliances after General Electric and Whirlpool in the United States. Maytag brands include Amana refrigerators and Hoover vacuum cleaners.

Analysts commented on Maytag’s first-quarter performance, as reported by smartmoney.com:

Shares of the appliance maker were taken to the cleaners Friday, tumbling 28% to a 14-year low of $10.89, after Maytag reported first-quarter profits that plummeted 80% from a year earlier on declining sales. The Newton, Iowa, company’s results missed analysts’ estimates by a mile.

“This is not a financial problem, but a management and execution problem,” says one analyst…. “Its new products are running behind schedule, brand positioning is ambivalent and brand development is weak.” [He goes on to say], “Management is focused on cost reductions…. You can continue to cut costs and slash plants, but that is how companies go away. [Maytag] need[s] top-line growth through successful new products, strong brands, strong retailer relationships — and this isn’t happening.”

[Another analyst says] “…Maytag’s problems are centered around…a failure to capture consumers’ imaginations….”

Maytag is a revered American brand becoming irrelevant without an effective brand positioning. The solution is to refocus the brand by identifying a key point of competitive difference and, building upon the rich heritage of the Maytag brand, mining that heritage for evocative consumer connection.

Until then, just as the Maytag repairman of old, Maytag sales will continue to suffer through consumer inattention.

The release of Martha Stewart from the United States federal prison system prompted a number of news reports about how her experience will affect Martha Stewart Living Omnimedia [MSO].

Here’s how Ms. Stewart’s experience will affect her company. Although certainly not how she would have preferred it, by serving her time in a federal prison Martha Stewart was tendered a gift — a five-month gift of intense market research — learning how a broad cross section of women lived, and hope to live, their lives.

This research will lead to a repositioning of the Martha Stewart brand — one driven to further build the brand through emotional connections with the market. As reported by the Associated Press in the New York Times:

With barely a break since she was released from a federal women’s prison…on Friday, a beaming [Martha] Stewart told several hundred employees Monday that she’s learned a lot about the country through the cross section of people she met in prison. That’s made her realize that the company she founded…focused too much on the technical aspects of entertaining or cooking in its editorial content, and not enough on why people need to take care of each other.

Noting a growing need to “preserve meaningful traditions” in a rapidly changing world, Stewart pledged…the company is going to deepen its bond “with the millions who read our publications and watch our television programs. And we’re going to engage and inspire new readers and new viewers for whom these topics may have seemed alien, unfamiliar or even — believe it or not — superficial.”

…Where Martha Stewart Living once focused on functional benefits in its editorial, it is now becoming more aware of the “emotional power of the brand.”

For her company this is powerful brand strategy. The emotional power of a brand is unlocked by identifying how a consumer feels and acts when using or affiliating with a brand, and WHY she feels and acts in that way. These emotional benefits, when connected up with the brand’s key point of difference, lie at the heart of any great brand strategy. This connection elevates a brand to one of contemporary relevance, and separates a brand from those of competitors.

While Martha Stewart cannot rewind the events of the recent past and start over, she can begin anew. With five months of introspection and the equivalent of intense market research into human thoughts and feelings, the company will benefit from Ms. Stewart’s heightened self-awareness of the emotional drivers behind the businesses of MSO.

For Martha Stewart Living Omnimedia, and for Martha Stewart, it’s a good thing.

Hanes, the venerable underwear retailer, has decided to revive their classic brand positioning from the 1990s and put it back to work. The question is why did they ever ditch this strategy? As reported in the New York Times:

FOR those who have been waiting for Hanes to revive “Just wait’ll we get our Hanes on you,” the wait is over - kinda sorta.

In a campaign…which is being billed as the largest in years for the Hanes apparel brand, the “Just wait’ll” theme, so successful in the 1990s, returns with a bit of tailoring as “Look who we’ve got our Hanes on now.”

Also being revived is the idea of using a roster of celebrities to sell Hanes underwear, sleepwear, socks and other clothing, rather than the single-star approach the brand has recently taken in featuring Michael Jordan. Mr. Jordan remains, joined initially by Damon Wayans, Matthew Perry and [actress] Marisa Tomei….

Brands “have to keep themselves fresh with consumers to be relevant,” said Sidney Falken….Hanes brand champion at Sara Lee Branded Apparel…a division of the Sara Lee Corporation.

Because “consumers know this brand really well,” Ms. Falken said, the idea of using celebrities they may not expect to see endorsing Hanes is meant to convey that the Hanes name can be found on apparel that is more stylish, colorful and comfortable than they may expect.

This updating of the brand would be compelling if the new messaging were left unchanged from the original Just wait’ll we get our Hanes on you.

Just wait’ll is a powerful position, a valuable piece of mental real estate, creating an evocative mental connection. One quality of the Just wait’ll positioning is how it leaves room for continual updating of the brand through the use of multiple contemporary endorsers.

In contrast, Look who we’ve got our Hanes on now is all about self-laudatory Hanes talking about themselves (”look at us”) rather than talking about the consumer. The original ’90s campaign talks about and to the consumer (”our product on you”), which made the positioning so effective.

Look who we’ve got our Hanes on now also assumes a top-of-mind audience recall of the successful ’90s campaign, an extra mental processing step forcing the consumer to devote more time and work even harder to connect up brand relevance today.

Simple is hard. In branding, often the best answers are those demonstrating a brand promise through compelling simplicity. Resisting the temptation to gussy up an already powerful brand position is often the hardest task of all.

Guys, in honor of the date set aside to honor St. Valentine, and if your culture recognizes the date, you might want to run out and grab a bottle of Mekhong [PDF product sheet], a Thai rum, for your special someone. The reason? The Mekhong brand is about to be repositioned, as indicated by this headline in the Bangkok Post:

Mekhong to be Positioned as Cocktail Mixer to Lure Women

Good luck.

Nedcor Limited, is a bank holding company operating the fourth largest banking group by assets in South Africa. Nedcor is engaged in a brand reposition, as reported by AllAfrica Global Media:

Banking group Nedcor has come full circle over the past 12 years, opting for a multibrand strategy…. As it reverts to a single-brand strategy, the corporate Nedcor brand may be about to disappear.

Nedcor Limited came into existence in the early 1990s to house the banks and support divisions in the group….

But the Nedcor brand may be about to be replaced, with Nedbank emerging as the group’s unifying brand. Many of the other brands have already been phased out, or are being phased out.

Nedbank is currently appointing a new advertising agency….

One marketing analyst, who asked not to be named…says the group will have to define its new brand very clearly before its new advertising agency [comes] on board.

“You only advertise when you know what it is you want to advertise,” he says.

This anonymous analyst is so very correct. We trust Nedcor will develop their brand strategy before advertising begins. Otherwise, dollars spent on advertising will largely be wasted.

An effective brand strategy will focus on identifying a single key competitive difference and emotional benefits to elevate the market discussion about Nedcor. In this way Nedcor may own the conversation in South Africa banking.

Whether your market is South Africa, a world city such as Johannesburg, or global, framing the market conversation to a basis you can win competitively is the essence of great branding.

The latest In Advertising newsletter from the New York Times (available by opt-in email) discusses the new brand positioning of Hormel Chili:

Hormel Foods, which has been making Hormel Chili since 1935, is running a television, radio, print and online campaign for the brand that is the biggest in several years. The multimillion-dollar campaign … presents Hormel Chili not as a main dish but as an accompaniment to other dishes like eggs, hamburgers, nachos, potatoes and salads, as well as a dip.

To underline the concept, the ads portray Hormel Chili in unconventional fashion as a condiment like ketchup, mustard, pepper or salt, which is reinforced by the campaign’s theme, “Goes on everything.”

The campaign is appearing as two other powerhouses in food marketing, Bush Brothers Company and the Campbell Soup Company, have entered the chili category with, respectively, Bush’s Homestyle Chili and Campbell’s Chunky Chili…. [T]he Bush brand is [positioned] as “a ready-to-eat chili that looks and tastes like homemade” and the Campbell product … is [positioned as] “Hardcore chili for hardcore fans.”

[Paul C. Krapf, senior product manager for Hormel Chili says] the Bush and Campbell products “are geared toward in-the-bowl eating occasions instead of out-of-the-bowl eating occasions.”

“It’s not, ‘Next time you want a bowl of chili, buy our product,’” Mr. Krapf says. “It’s, ‘Next time you want to make chili nachos, chili fries, the only chili to use is Hormel.’”

… [T]he concept of likening chili to condiments was “a pretty big idea, which became a fresh angle for the category,” he adds. “That’s where we rounded the corner.”

We agree.

This repositioning of Hormel Chili creates new mental real estate, developing a new Chili niche, at a time when two competitors choose to rely on advertising strategies for their new products, each shouting how much better they are, rather than demonstrating how different they are.

What Hormel Chili accomplishes with their new brand identity provides a textbook example of good brand strategy.

As the first to stake out the unique mental position of chili as condiment, Hormel Chili reframes the market conversation to a basis it can win against all competitors. The new brand position demonstrates competitive difference. Demonstrating a relevant and compelling difference ALWAYS drives the sales needle.

Pass the chips.

According to the Wall Street Journal, Wendy’s canned Mr. Wendy today:

Wendy’s International Inc., based in Dublin, Ohio, and advertising agency McCann Erickson announced Thursday that “Mr. Wendy” won’t be seen after the end of the month.

“While decisions are still being made about new creative, food has always been the hero at Wendy’s, and we’re going to make sure that comes through loud and clear,” Wendy’s marketing executive Don Calhoon said.

The ads had drawn some poor marks on Wall Street.

For a brand that communicates quality is our recipe in fast casual food, Mr. Wendy was a distraction from this brand positioning.

Wendy’s may have been looking for a new spokesperson after the death of founder Dave Thomas some three years ago. The problem with such a strategy is that during thirteen years as pitch man for the chain, Mr. Thomas became an icon for the brand, so much so that any new spokesperson pales by comparison.

Wendy’s will now attempt to reframe the conversation on a basis that is authentic, relevant and compelling to the consumer, to win this conversation within their business category, and ultimately to own the conversation and set the tone for the entire industry.