Commentary
What If Brand Building Is Just A Big Fake?
- by Joseph Jaffe , March 14, 2013
"Hostess Brands, the now bankrupt owner of the cream-filled confections, agreed on Tuesday to sell the snacks — along with Ho Hos, Sno Balls and Dolly Madison Zingers — to two investment firms with a shared history of corporate turnarounds. The deal, worth $410 million, was struck nearly four months after the last Twinkie rolled off the baking lines."
That’s from the New York Times' DealBook blog, in a post that gave credit to the new owners’ success rate with other revivals, including Pabst Blue Ribbon.
The lead read, “Twinkies and Ding Dongs are back from the dead.” But I wonder whether we should instead be celebrating “Ding Dong, the Witch is Dead,” and letting sleeping (or dead) dogs lie.
That said, I am fascinated by this move -- which, if you think about it, could be both seminal and precedent-setting for resolving several key debates swirling right now in the marketing world:
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Is brand building and brand equity really just window dressing, masking corporate and organizational management as the real hero or villain? Put differently, if the brands were so strong and relevant, wouldn’t the company have done just fine, regardless of heaping any blame (justified or otherwise) on internal factors?
The commoditization of the 4 P’s. Ultimately it was the 4 P’s that did Twinkies in. So is it reasonable to expect an incrementally tweaked version of the same 4 P’s to save and revive it? According to the post I quoted above, the new owners will look to the P’s of Place and Promotion as their pivots, in the form of new distribution outlets (Dollar General) and celebrity tie-ins (like Zach Galifianakis) respectively. Sounds pretty conventional and old-school marketing to me. If this fails, can we PLEASE put to bed once and for all the idea that the 4 P’s are essentially commoditized in today’s consumer and marketing worlds?
Will this be social’s day to shine? If strike 1 is the equity of brands and strike 2 is the 4 P’s, will strike 3 be the emphasis placed on social media as a means of swinging for the fences? The new owners are known for emphasis on social media platforms like Twitter, as well as “guerilla marketing” (their words.) As the saying goes, “you can’t put lipstick on a pig” – so for this reason, will social media be a saving grace or an albatross around its neck?
Enriched wheat flour, sugar, corn syrup, niacin, water, high fructose corn syrup, vegetable shortening, and the list continues…
Yummy.
Perhaps it’s unfair to heap all this pressure on a small artery-clogging product – but I think we should be equally fair and balanced in separating the hype from the hope. Yes, there were people on eBay paying hundreds and thousands of dollars for Twinkies, but this should not confuse a strong brand with weak character (AKA, morons).
The marketing world is always quick to take credit for successes (see: Cannes) and pass the buck at the first sign of failure (the best way to kill a bad product is with great advertising.). Should Twinkie Turnaround become the new Pizza Turnaround, no doubt we’ll be espousing the virtues of brands and brand advertising. However, if it fails, we’ll be blaming management, unions and poor choice of celebrity endorsers instead of the real reason: Brands ain’t what they used to be.
This article misses the point. Twinkie issue was distribution costs were too high through their archaic old school system. Net result profitability was terrible....fix that and the twinkie brand that has a value (to a certain audience) will do fine. It isnt a marketing issue.
I agree with Gary, this is by no means an issue of brand value being unable to carry a product. Brand value is not a big fake. The problem is the association with the brand has to be significant, accountable, and change with time. More importantly, the brand cannot rely only on brand value, it has to have a value chain to support the brand, which Hostess did not have, as Gary points out. Should Twinkies go the way of the dinosaur? I'm not a fan, so I can't say for sure that an "artery-clogging product" lacks value. I eat plenty of other "artery-clogging products" because, frankly, who cares if they are artery clogging (unless you're really an over the top health nut)? I like what I like, and when I like something, brand value is important. I prefer Coke to Pepsi. I love Oreos, not Hydrox (which did go away). Yet in the Coke and Oreo case, their brands are not fake. But if they failed to keep production and distribution costs down, the brand would no longer be enough to help them survive. Brands remain important and relevant. My son loves his Nike shoes and his Ralph Lauren clothes. If it were just him, and not the host of kids he hangs with at college, I'd be inclined to agree that brands are not what they used to be. But they remain meaningful - possibly more meaningful today in the world of social media than ever before.
Brand value is a big fake? Like with such brands as Chick-Fil-A or In-N-Out? C'mon.
The Four Ps are buckets of activity. And yes, in many cases the problem does not lie in the promotion "P" but in the distribution or place "P" as was alluded to in the article. When my students get this, their opportunities open greatly.
My take is that Twinkie needed to shed the weight of a baking company operating under a production/distribution system that was sucking up costs at an ever-increasing rate without producing value. Interstate Brands proved this failing formula in 2005... the first near-death experience of Twinkie.
Marketing/Branding success must work in a system that creates and enhances the value of the product--all four Ps linked in a sustainable value proposition.
Twinkie is one of those nostalgic sinful pleasures that is not going to make a living on the occasional user visiting his or her childhood memories. Twinkie, like all brands lives in the heavy, and I do mean heavy, user.
The brand turnaround experts will no doubt focus on this target while benefiting and leveraging the newly stirred awareness of the Twinkie mystique. And then, there is the chance that someone managing the brand will look to innovate. The only use-expanding innovation I have seen and heard about Twinkie is from the carnival midway people who deep-fry the little buggers and sell them for a King's ransom.
We shall see...we shall see. Thanks for the comments, Gary, Rick and Timothy. I intentionally chose a unique perspective on this and welcome the continued debate.
Another vantage point can be all the marginal brands that spend tons of money on marketing support and flatline. Do we "blame" shelf space or poor inventory forecasting...or perhaps argue that no matter what we do/did, results may be the same in a world of increased apathy, skepticism and control?
Joseph I see your point: brand=image and an image can be a mirage and a mirage can be a good coverup to what is under the hood.
However, what makes a brand real is time and the 4 p's. However if one of those components fails/or excels then the spill over effect can impact 1) the brand 2) profitability 3) other components of the business.
So if the other components of the business survive like in the case of Twinkies you can still have a business or enough remnants to sell a business.
So the question is not 'is branding fake or real' or can it overcome all odds. Branding just becomes an indicator of how strong a business's "some of its parts" are.
As in Aristotle's quote a whole (or in our discussion a brand) is greater than the some of its parts!
I think Aristotle was a marketer and he did not even know it ;).
An ounce of great marketing (by whatever medium) will always be worth more than a pound of product/service quality. Sad but true. Witness VHS's triumph over Betamax, and MS-DOS/Windows' victory over a series of superior OSes. The emperor can't be completely naked, but his clothes don't have to be all that good....
Long live the Twinkie - thanks to brand viability.
What I love about this post is that it challenges how markets overstate the power of brand. As I note elsewhere, product value can demand a 50 to 200% increase in margin but brand seems only able to demand a 20 to 40% added margin. On the other hand, 20% to 40% is a massive advantage when your product is in every convenience store in the world. So after a decent start, I found that Joseph goes off the deep end - doing that classic technique suggesting if brand isn't EVERYTHING that it must be NOTHING. Brand is in between and it is equally erroneous to overstate the value of brand as it is to understate it. (And I won't honor this social media tripe with comment.)
I'm most certainly not stating that the value of a brand is worthless...but I am asking a question (which is hitting a few nerves) as to whether we're valuing and measuring it's value correctly (4 P's case in point) and whether we attribute success and failure correctly. I stand by my assertion that the 4 P's are commoditized or becoming increasingly commoditized, but that said...a superior product (which Twinkies is not) should always prevail, especially with the help of advocacy, customer experience, community and the list continues...
Twinkies contain Niacin? Maybe they're onto an emerging health food craze!
Here's what I don't understand, Joseph. You're commenting about measuring in the 4P's. I've never run into anyone doing that and I have worked with a lot of Fortune 500 and 100 companies. In my experience, and what I teach, is that the 4P's are a structure for breaking down what's to be done in marketing, isolating what's most important at any point in time, and helping control the amazingly vast breadth of what marketing might cover. Maybe you can clarify what you've seen in applying the 4P's that concerns you. Cheers... Doug
@doug - my argument about the 4 P's being commoditized is really 3-fold:
1) 4 P's is an antiquated framework, especially...
2) There isn't significant differentiation within the P's
3) There's a complete over-reliance / domination with respect to the P of Promotion and on Advertising in particular
In Join the Conversation, I introduced the 6 C's (Content, Commerce, Community, Context, Customization and Conversation) as an alternative or at least another layer. The 7th C = Customer (and service/experience)
There's more...but that's a start
Saw this great quote from IBM's Head of Research in Brazil, "Branding the way it is done today is spam in the future (it is already in many cases)."
Just validating my point...