The return of Howard Schultz as CEO of Starbucks Corp. prompted an outpouring of opinion in traditional and new media of what ails the company. Many have speculated at what Mr. Schultz may do to reverse a recent trend of negative foot traffic in U.S. stores.

Among the better reads on the topic appeared in the ReportOnBusiness.com section of The Globe and Mail from Toronto.

Among the insights:

Douglas Holt, who holds the L’Oréal chair of marketing at the Said Business School at the University of Oxford, says the chain has forsaken its brand promise. “The brand promise has changed from being this artisanal coffee offering to this very standardized commodity,” says Prof. Holt, whose book, How Brands Become Icons: The Principles of Cultural Branding, was published in 2004.

In the beginning, continues Prof. Holt, Starbucks wooed customers into its world “where you should treat coffee as one would wine. The consumer as connoisseur was very much a part of the promise, and now they’ve basically subverted that.”

The author also offered this discussion of the affiliation benefit associated with Starbucks:

Starbucks was a luxury brand that benefited greatly from the trickling down of aspirational desires to the non-elites. You may not be a rich man, but in a pinch you can buy a rich man’s coffee.

There’s nothing new in understanding that people buy goods as much for what they mean, or represent, as for what they do. Michael Solomon, professor of marketing at the Haub School of Business at Saint Joseph’s University in Philadelphia, has written, literally, the book on consumer behaviour. “The strategic goal of many firms is not to build market share — it’s to build share of mind,” Prof. Solomon says. “Starbucks is a great example of this deep meaning stuff.”

The “deep meaning stuff” defies rational economic models. “There’s nothing rational about paying $4 for a cup of coffee,” Prof. Solomon continues. “You’re not buying coffee at Starbucks, you’re buying experience at Starbucks … The experience of feeling you’re partaking in this community that has elevated coffee far beyond a drink. The coffee was emblematic of a lifestyle.”

Initially, going to Starbucks meant you were separating yourself from the mainstream. Starbucks delivered what Prof. Simon calls a “class bang.” Toting a Starbucks affirmed class.

Read more at this link.

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Lalit Khaitan is Chairman of Radico Khaitan Limited. The New Delhi based company manufactures and distributes a portfolio of liquor brands throughout India and internationally.

Mr. Khaitan, focused on building his brands globally, has this to say about branding:

Branding isn’t about re-energizing a company with a new logo and slogan. It means communicating a corporate culture from the inside out. The integration of branding into a corporate facility design sends a clear, concise message about the company’s values, business, and employees.

Radico Khaitan’s Chairman offers another example of a leading business executive with a concise understanding of the power of branding.

Read more in this report from the Hindustan Times.

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For an example of a mass market restaurant brand created without television advertising, look no further than Chipotle Mexican Grill. Here’s the story of the strategy behind the growth of the brand:

Look at enough billboards for Chipotle Mexican Grill Inc., and you’ll detect an omission: They never show a bare burrito.

Instead, Chipotle displays its signature item enclosed in foil. “You can never make the perfect burrito for someone,” explains William Espey, the company’s creative-services manager. “If you keep it wrapped, it’s their perfect burrito.”

Chipotle Mexican Grill has arguably become the country’s most successful fast-food chain in recent years by rejecting almost every major technique on which the industry was built. Not only does it not show the product, it doesn’t advertise on television. It doesn’t franchise. It has some of the highest ingredient costs in the industry. And its executives aren’t especially concerned that customers wait as long as 10 minutes in lines that routinely stretch out the door.

Nonetheless, Chipotle’s shares have more than doubled in the past year, making it the best-performing publicly held U.S. restaurant chain…

The chain still relies heavily on giveaways instead of traditional ads.

Read more about the success of Chipotle at this link in The Wall Street Journal.

[More posts about Chipotle Mexican Grill | More posts about Branding Without Advertising | More posts about Brand Strategy | More posts about Food Service Branding | More posts about Restaurant Branding | More blogs about Brand Personality]

Scottish Enterprise, Scotland’s economic development agency, offers this:

“In the highly competitive world of food retailing, strong branding is one of the most powerful and valuable tools a business can have to both win new customers but also secure the loyalty of existing ones.”

True.

A brand is the most valuable asset of any organization, in part as the only corporate asset that can appreciate is your brand.

True in food retailing, or any business category.

[More posts about Brand Management | More posts about Food Product Branding | More posts about Retail Branding | More posts about Brand Equity | More posts about Brand Strategy | More blogs about Brand Equity]

A new example of Bran Identity is offered in this 30 second spot for Kellogg’s All-Bran cereal:

As this report indicates, the All-Bran demographic is 45 and older grown-ups. Kellogg’s believes everything works out in the end by using a potty humor personality with this crowd:

“Talking about regularity is a really tough thing to do,” admitted senior brand manager Matt Lindsay, who helped create the ad. “We liked the idea of leveraging visual metaphors to make it a more approachable subject.”
…

“Inherently, given the subject matter, it’s going to be a bit polarizing,” Lindsay says. “You are going to get individuals who don’t want to think about the functional effects of regularity. But we bring it to life in a little more subtle way. A lot of our consumers don’t even notice the visual metaphors right away.”

With a tagline of Do It. Feel It. the spot is short on subtlety. Whether it translates into sales in the grocery aisle is the true measure of success. But, as the the ad admits the obvious in a new and entertaining way, and the All-Bran brand promise has always been all about eradicating crap, we think it will.

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Always on the lookout for brands able to grab market share without advertising, we discovered a success story while in Portland, Maine.

We stepped into a local restaurant for lunch one day, and were introduced to a beverage our server referred to as free range root beer, otherwise known as Maine Root. As a root beer junkie, this was a real discovery, which led to our ordering another, and stopping by two days later for another.

The brew we enjoyed has become a success any entrepreneur [or corporate type] would envy. And, its a success achieved without advertising.

How have they done it? The short answer is, literally, organically. But the real engine behind Maine Root success comes in adopting and living a distinct attitude, casting themselves as the “little guy” vs. the Goliath purveyors of “corporate” root beer. As good as the product is, this brand personality is the driver behind Maine Root success, nowhere epitomized more than at this site declaring:

FreeRangeRootBeer.com is a movement. We believe that root beer deserves to be free. Free from chemicals, artificial sweeteners and confined spaces; the very things that strip a root beer from all its inate goodness, and the very things “corporate root beer” is guilty of committing…

The site directs the user to Maine Root.

Maine Root has created a passionate following through this own the conversation® strategy, changing the market beverage conversation to a basis they can win, and building the brand organically through endorsement and word of mouth [click on the Tell A friend link]. Sounds familiar.

[More posts about Brand Personality | More posts about Maine Root | More posts about Portland, Maine | More posts about Own The Conversation® Strategy | More posts about Branding v Advertising | More posts about Brand Strategy | More posts about Free Range Root Beer | More posts about Beverage Branding | More posts about Root Beer | More posts about Restaurant Branding | More blogs about Brand Personality]

Okay, we admit it. We like pizza. But then, who doesn’t?

On the lookout for a great pizza wherever we go, from New York to Newport Beach, from Indianapolis to Italy, it is rare to find a restaurant that redefines the pizza category through an effective brand name. Such was the case this past week, while in Portland, Maine, where we were introduced to the joys of Flatbread, located on Commercial Street across from the Casco Bay Ferry Terminal. Flatbread not only has a brand name that changes the conversation to a basis they can win, they back it up with a unique product—no sauce pizza, err, flatbread. Founded in 1998, the Flatbread concept has grown to multiple New England locations with a unique brand strategy demonstrated at key consumer touchpoints through the product, the employee and customer experience, all without advertising. This own the conversation® strategy builds the brand organically through endorsement and word of mouth. Sounds familiar.

Stop by any of the Flatbread restaurant locations, and tell us what you think about the brand…and the Flatbread product.

[More posts about Brand Differentiation | More posts about Brand Naming | More posts about Flatbread Company | More posts about Portland, Maine | More posts about Own The Conversation® Strategy | More posts about Branding v Advertising | More posts about Brand Strategy | More posts about Brand Reputation | More posts about Pizza Branding | More posts about Best Pizza | More posts about Restaurant Branding | More blogs about Restaurant Branding]

The title of “best burger” is personal to most. Everyone has their favorite, and awarding the title is like finding good art for many who know it when they see it or, in this example, taste it. For example, in Southern California In-N-Out Burger owns a cult following.

Our staff discovered a formidable burger contender last week in Santa Barbara. Well, really our burger experience took place in Goleta, just down the road and next door to the University of California, Santa Barbara.

The Habit, as it is called, is a 20 restaurant operation in Southern California. Never having heard of The Habit previously, we were first struck by the brand name [we are in the branding business after all], which drew us to the closest location we could find, where we noticed a standing-into-the-street queueing line, prompting us to stop and embrace temptation.

The Habit relies upon little advertising in building their brand [when a company speaks of advertising expense in basis points instead of a whole number percentage, that is no advertising]. Instead The Habit focuses upon the product, the employee and the customer experience through an own the conversation strategy, building the brand organically through endorsement and WOM. Sounds familiar.

We like the brand name, the brand strategy, and the burger. Thought you should know.

[More posts about Brand Reputation | More posts about Brand Image | More posts about Brand Naming | More posts about Restaurant Branding | More posts about Own The Conversation® Strategy | More posts about Branding v Advertising | More posts about Santa Barbara | More posts about Goleta, California | More posts about University of California, Santa Barbara | More posts about Best Burger | More posts about The Habit Burger Grill | More blogs about Restaurant Branding]

This from our friends at Wordlab, about the short-lived energy drink Cocaine, soon to be re-launched under the brand name Censored, a name far more effective in connecting with a target audience than the inane BlaK.

Read more here.

[More posts about Brand Naming | More posts about Beverage Branding | More posts about Brand Strategy | More blogs about Brand Naming]

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.

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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.

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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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Denis Hennequin, a graduate of one of Paris’ top law schools who joined McDonald’s after deciding it would be more “fun” than being a lawyer, leads the McDonald’s effort to own the conversation in Europe. Mr. Hennequin demonstrates how a brand is your sole appreciating asset, in this report from the Los Angeles Times:

“I’m changing the story,” Hennequin says. “We’ve got to be loyal to our roots, we have to be affordable, we have to be convenient … but we have to add new dimensions.”

These dimensions include putting iPods in restaurants in France so that people can sit and listen to music, making better coffee from beans grown ethically and sustainably and introducing a “McPassport” so young staff members can work at any restaurant in Europe.

The changes seem to be working. Sales at McDonald’s Corp.’s European franchises are growing faster than in other regions. In January, Europe (which accounts for about 36% of annual profit) reported quarterly sales growth of 7.3% against 5.9% in the United States.

…The success of coffee chains such as Starbucks, which appeal as much to workers on the move as to students, has forced companies such as McDonald’s to create a more sophisticated eating environment.

…The restaurant chain recently reported [a] record annual [global] profit of $4.4 billion.

But it is developments in the European business that may provide the best guide to where the McDonald’s brand is going…

Hennequin, [President of McDonald’s Europe]…has a three-pronged strategy: Improve the experience of customers and employees, make sure restaurants adapt to local communities and be more transparent about how McDonald’s does business.

McDonald’s Europe is onto something, in thinking of their brand as the story they tell across every material touchpoint. C’est tout ce que j’aime.

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Many U.S. based casual dining restaurants fail to differentiate themselves, or so says The Wall Street Journal:

Seared ahi tuna, cedar-plank tilapia and bruschetta hamburgers — they’re all on the menu as casual-dining chains delve beyond comfort food to hook more sophisticated palates. The question is whether customers will take the bait…

Applebee’s International Inc., the nation’s largest casual-dining chain, overhauled its menu in October with dishes from television chef Tyler Florence, in part to lure higher-income clientele. The new dishes don’t have “this big pile of mashed potatoes” that accompany many of the chain’s entrees, Applebee’s Chief Executive Officer Dave Goebel says. Items include a hamburger loaded with a bruschetta-style topping of pesto and diced tomatoes served with wedges of mozzarella on grilled focaccia. It comes with a side of garlic french fries sprinkled with Parmesan cheese.

For years, Applebee’s held back on adding more contemporary items out of concerns its customers wouldn’t accept them, Mr. Goebel says. “That was an injustice,” he says. “We had stereotyped a little too narrowly.”

…While a few chains say that some items haven’t been popular, several chains credit the updated menus with driving sales. Applebee’s says its most frequent customers like the new items as much as or more than the old dishes. Still, Applebee’s same-store sales, a key measure that strips out new locations, haven’t reversed their slide since the chain introduced its new menu in October…

Analysts say one of the industry’s biggest problems is that chains haven’t done a good enough job differentiating themselves from one another…

Apostrophe restaurants such as Applebee’s Neighborhood Grill & Bar, Bennigan’s Grill & Tavern, and Chili’s Grill & Bar are attempting to establish competitive separation through the introduction of more sophisticated menu items. But, as the story points out, these new dishes may create little more than confusion among target consumers:

Clay Dover, chief concept officer for Bennigan’s, part of Metromedia Restaurant Group, says the recent new item tests reaffirmed that its customers prefer fried food, hamburgers and beer instead of more eclectic fare. “Our guest consumer didn’t have as sophisticated palate as we may have thought,” Mr. Dover says…

Chili’s Grill & Bar, in an effort to add bolder flavors to its menu, recently came up with a grilled tilapia seasoned with hoisin, a Chinese sauce. The chain describes the dish as a fillet brushed with a sweet-and-spicy glaze and garnished with red-chile tapenade, green onions and sesame seeds. But Chili’s ended up taking the word “hoisin” out of the description and calling it “firecracker tilapia.”

“The consumers really said, ‘You know what? That’s not who Chili’s is,’” says Dana Tilley, vice president of product innovation for Brinker International Inc.’s Chili’s.

Any way you cut it, in moving their menus upmarket each of these restaurant chains ignore a basic truth: use of descriptors such as Grill, Bar, or Tavern stereotypes the restaurant and its menu. Such stereotypes are difficult to overcome without a shift in thinking.

Instead of myopically focusing on upmarket menu changes to increase the average ticket [”of course, we’re a restaurant, so let’s change the food!”], what should occur is a rethinking of the brand beyond the menu.

As an example, with nearly 1,900 restaurants in the US and 17 countries, Applebee’s has a ready made platform to sell more than chicken wings. Rather than trying to move upmarket away from its base, Applebee’s should refocus on its core customer. What is the brand promise the chain is trying to cultivate, and how does that promise result in an image reflective of the Applebee’s customer? It’s not a stretch to think of Applebee’s in a new way, as a channel with 1,900 points of distribution, with every point representing an Applebee’s restaurant around the world.

Applebee’s proclaims itself a part of “the neighborhood.” One wonders if the company seriously examines the meaning of this important human connection, beyond creation of a slogan and a smattering of localized artifacts included on the walls of most any Applebee’s restaurant.

Applebee’s should be all about this neighborhood, as seen through the eyes of the consumer, creating a relevance that extends beyond the hamburger, bruschetta toppings or no. The company should be intently focused on the dignity and ego of the consumer within that neighborhood.

It’s all about the community Applebee’s serves and aligning with that community, that neighborhood, to create human engagement. Such a strategy will create a powerful emotional connection with the customer, and creating an Applebee’s experience that is anything but casual.

As a growth opportunity, there’s nothing casual about that.

[More posts about Brand Promise | More posts about Brand Strategy | More posts about Brand Relevance | More posts about Brand Opportunities | More posts about Restaurant Branding | More posts about Brand Differentiation | More posts about Applebee’s | More posts about Bennigan’s | More posts about Chili’s | More blogs about Brand Differentiation]

A Fortune 50 company announced an agency review and at the same time cut loose it’s long time ad agency, in this press release:

Safeway Inc. (NYSE:SWY), one of the largest food and drug retailers in North America, announced today that it will conduct a competitive review of advertising agencies for its $250 million account. The business up for review includes broadcast creative, strategic planning, broadcast media planning and buying, and promotional marketing.

No real news here, as companies conduct ad agency reviews everyday. But then the Safeway release offers this nugget:

The review coincides with the one-year anniversary of the company’s brand positioning launch of “Ingredients for life.” This brand positioning has distinguished Safeway within food retailing, is grounded in consumer insights, and has allowed Safeway to add true brand marketing to the traditional mix of retail promotional activities. [Emphasis ours.]

Safeway’s marketing team confuses brand positioning with an advertising slogan. The Safeway slogan, Ingredients for Life, is not at all a brand position, nor does it distinguish the company within food retailing, except in the minds of those who sit in the Safeway boardroom.

The slogan fails to satisfy a number of the Laws of Branding. For example, a functional message such as Ingredients for Life is easiest for competitors to claim or duplicate. The slogan offers no human engagement, but rather reads as a chapter to a grade school science text. It all points to the obvious: a slogan is not a brand.

Labeling Ingredients for Life as a brand is a demonstration of how even a $38 billion dollar company full of otherwise certified smart people skip the hard part of brand creation, and develop instead a forgettable ad campaign reinforcing a slogan rather than a brand.

So, the results of the Safeway agency review to “further differentiate the Safeway brand”? They hired another ad agency.

[More posts about Advertising Campaigns | More posts about Brand Positioning | More posts about Safeway | More posts about Retail Branding | More posts about Safeway Brand Image | More posts about Brand Strategy | More posts about Safeway Advertising | More posts about DDB Chicago | More blogs about Advertising Campaigns]