Toyota is apparently considering the idea of separately branding Prius. The hybrid product line currently maintains a sub-brand role, meaning that it’s preceded by the name Toyota and its value is always in relation to that of its parent. Should Toyota consider splitting off the product to make it a brand of its own? What are the merits? What are the downsides?  

I’ve outlined the process used to make a decision like this because it’s one many companies find themselves having to make but without a clear methodology. If you’d like, you can also check out my recommendation at the bottom of Susan’s original post.  Do you agree?  

First, make your default position one of staying the course.   Creating a new brand takes time and money and you have no guarantee that the public will want it.  This is especially true for a new umbrella brand—one that is not associated in any way with an existing, viable brand.  A strong existing brand is a kind of shorthand for value that allows consumers to choose a product without knowing as much about it.  For instance, when I say Honda, what comes to mind? 

If you think you must brand, use these tests: 

Is this a new business category?  Who is this serving and how is it different from your existing brand’s category?  Begin by making sure it really is different.  Then, determine how your unique approach will create a new context for customers.  For instance, we help our clients develop a strategic role which defines why prospective customers must consider them when looking at vendors in a given business category. 

Does it support your strategic plan?  If it doesn’t help you get to where you want to go, or even conflicts with your business strategies, then  it shouldn’t be a brand.   

Will the brand enable long-term growth?  Will this brand be a significant driver of revenue and profit growth?   Do you expect it to be a rising star over the long term? 

Are there specialized competitors?   Sometimes you may need to create a sub-brand in order to effectively compete.  If you are providing a product as part of a larger offering (such as computer chip in a laptop) and others are naming theirs (such as Intel) then your undifferentiated product will telegraph to people that computer chips are not a real focus of yours. 

Two common mistakes: 

Creating a new name for every new product or service to add distinctiveness.  Too many CEOs and product managers think that creating a new brand or brand name will give their product or service more customer mind share.  The opposite is often true.  You will end up with a confusing, alphabet soup of products that customers won’t be able to decipher.  

Branding a feature.   Whatever is the new ‘it’ trend in our society becomes an irresistible magnet for unfortunate branding.  Right now, this looks like brands that are developing around sustainability and being green.  While it seems appealing, does it really make sense to create a separate, environmentally friendly line of toilet paper or cars instead of making this a feature of all of your offerings?  Consider this.  In the early 2000s, people thought that anything .com (remember pets.com?) was a sure brand winner.

-Joe LePla

There is no doubt that the current economy has us in uncharted waters.  It’s hard not to worry– scary headlines report falling real estate, failing banks, brokerage firms in dire straits, and stock prices plummeting internationally.  

Granted we are in troubling times, but with media constantly talking about doom and gloom, it’s difficult to find our bearings through the fog.  Are they exacerbating the problem by painting a bleak economic picture?  Can all this talk about the next Great Depression become a self fulfilling prophecy?  Tara Kinateder, Vice President of Bernstein Global Wealth Management, said, “You can quickly see the financial statistics on several stocks [CME Group Inc., Google, Exxon, and Apple] that are taking a beating based on fear rather than fundamentals.”    

Perhaps this is not an economic crisis, but a crisis of faith.  In a time of crisis, a strong, positive brand could be our saving grace. Some politicians knew this well.  The New Deal, for example, connoted change and hope and by the end of the first one hundred days, the words, “new deal,” had become the most powerful brand of the 20th century.   

Does “Bailout” convey any hope? No, it only creates more pessimism.  It implies failure and leads our thought process toward criticism.  Furthermore because politicians and economic experts are in disagreement, we begin to wonder and lose faith in the powers that be.  The worse thing that could happen to the U.S. economy is a loss of confidence of the folks who run the show, especially now that our economy is reliant upon their actions.    

We need the situation simplified in terms that everyone can understand.  A message of reform and hope is a message can put things into perspective that can calm the nation’s apprehension.  Strong branding can help.  

-Bianca Abate

The state of the current economy is certainly intimidating for small and large businesses alike. In economic climates like this, most businesses go into overhead-cutting mode to weather the storm—cutting anything that doesn’t immediately translate to revenue or profit, like branding and marketing which tend to be longer-term strategies. While on paper these cuts look like business-savers, often they are penny-wise and pound foolish. From a brand perspective, this is more often the case.

Here are some common myths and truths we’ve discovered when it comes to the importance of brand (in up and down economies):

Myth #1: If we cut operational expenses, we can bolster the bottom line

Truth: Brand is the sum of a customer’s experiences with you. If you aren’t there to answer the phone when they call or provide support on a product in real-time, you run the risk of chipping away at that customer’s loyalty to you and bad word of mouth to boot. In the long run, this could put you in the red.

Myth #2: We need to cut our prices to compete

Truth: By commoditizing your product to compete on price, you are also lowering the value of your brand in the consumer’s eye. Concentrate instead on building even more cost-neutral value into your current offering at the same price so that over time price isn’t the most important deciding factor—value is.

Myth #3: By cutting marketing spending we can save money

Truth: While this is true on paper, it must be done carefully. By cutting important customer relationship programs and communications, you could lose touch with some of your most loyal customers and lose out on that potential revenue. Be sure to evaluate the efficiencies of existing marketing programs through the lens of your brand and business strategy and goals to make sure you aren’t short-changing customer relationships.

The net net: If executive management thinks about brand as a strategic shield in an economic downturn – an asset that creates sustainable competitive advantage – the result is an even stronger business with a bullet-proof bottom line.

–Jen Travis