I went to one of the events that the Cass Business School in London run which look at the business side of the ‘creative industries’. It got a little sidetracked into geopolitics (inevitably?) but it was interesting nonetheless.
Some interesting factoidquotes that the panelists dropped (unverified)
- The “intangible assets” of FTSE100 companies make up 70% part of market cap of the FTSE100.
- In 19 out of 22 product categories, the brand that lead that category in 1920s is still in the lead.
Rough notes below…
“So Logo!: Branding in the 21st Century”
Cass Creatives Debate (Alumni Office)
Cass Business School, 106 Bunhill Row, London EC1Y 8TZ
Date and time:
06:00 PM to 09:00 PM on Wednesday 13 October 2004
frank kane: chair
rita clifton, interbrand
fk: what are the toughest challenges to brands in the next 10 years
rc: if i had a pound for everytime someone says brands are dead. people and nations need brands cos they need wealth. brands are sustainable wealth-creators. Intangible assets of FTSE100 are 70% part of their value (market cap). companies need to undertsand brand better, look beyond cosmetics.
clarity, consistency and leadership.. might soound oldfashoned, and no doubt it will manifest in diff ways. but still same. leadership should be restless… ahead of the game, instead of being kicked into the game. Not CSR as figleaf… but as core principle…
simon anholt (author of brand america): grossness and ugliness is not a peculiartiy of USA/companies. step back: Countries and brands…. country of origin important part of buying decision. german car, japanese hifi… dixons own brand was called ‘matsui’ in order to be perceived as japanese. america is the biggest ‘country of origin’ brand there has ever been. for 50 yrs, it’s been enough to say ‘this comes from america’
political ideas also get branded by country of origin. USA is a country that has consciously managed it’s brand since the declaration of independence. It’s currently in trouble. We might be at a tipping point where the politcal perception might be affecting purchasing – hollywood culture, mcdonalds etc being lumped in with foreign policy. There used to be more compartmentalisation… but now many people around the world are seing it as a monolithic ‘bad thing’
the way that nations communicate who they are: 6 main areas, think about them in a hexagon: foreign policy, culture, exports (esp. branded exports), people, advertises for investment b2b,
even in the time of nixon, the compartmentalisation meant that there was a net +ve feeling about USA. now, 3 or 4 points of the hexagon are -ve, so overall -ve brand equity.
Martin Lee: 19 out of 22 product categories, the brand that lead in 1920s is still in the lead. resilience of leader cannot been thrown away easily. why? relentlessness, lack of divergence from core, defended authority relentlessly. whereas those in trouble (M&S, sainsbury, WHSMITH) – public saying ‘we don’t know what they stand for’ – not confident, changed too much… no clarity.
we talk about brands as abstract concepts – disconnected intangible things… they are not… they are underpinned by businesses – large organisms – collective expertise going on for decades. like organisms, they are great at sustaining themselves.
psychology of humans, brands work because of how are brains work – when a brand works, it rewires you brain [?], when you rexperience it, then it triggers a nest of responses e.g. “milky bar kid” might trigger enviromental thoughts, nostaglia, music etc. set of associations laid down many years before, which contributes to these established brands sustaining themselves.
tony mcguiness: organisms – or machines? theses are the two attitudes in big companies atm. there is a newtonian view of companies in some sectors, driving to be more efficent. this is evident in the drive to outsourcing… this erodes brand through the supply chain e.g. offshored call-centres, delivering poor customer services (barclays bank differentiation already by advertising their call-centres as ‘uk-only’)
watch out – the chinese are coming… this is not another country with a tiger economy, but another planet. they are doing it their own way – currency levels, market conditions, standards – setting their own agenda. shows 400 gbp prada bag for 15 gbp… reccommends we go christmas shopping to china.
FK: is it a fake?
TMcG: this is a philosophical point…! if you believe your bag is made in italy, then you get charged for it. it’s actually made in china, probably. the craftsmanship is wonderful all the same! is it a knock-off or not? if you give away your manufacturing to there, why not buy it from there? they have been empowered by the west, and now it’s going to bite the west on the arse…
this is significant problem for companies like prada in the same way that mp3s were a problem for the music industry.
Von Dutch – spun off from harley davidson: they started doing celeb product placement. exported manufacture to china, and the world is now flooded with von dutch. no premium. gone from elite brand to chav brand, leapfrogging the part where they make all the money!
american apparel – uses them for his record label. started their factory in LA, the accounants must be going mad… they’ve made the employees shareholders. cost premium, but brand premium. branding used to be about quality of product, but marketing people have tried to educate people that it’s not.
SA: this is redistribution of wealth… brand china is following a simular pattern to korea and japan… (previous book: “brand new justice”)
Organic building of brand – through trust and repetition: takes a long time. artifical way: through advertising. China are manufacturing their way into a great country of origin brand. the organic way… soon we will have a very different perception of brand china.