How do I like my KitKat? Strong & D.A.R.K.Posted: June 30, 2011
Another day, another “our brand is strong” claimant. Yesterday, the boss of Thornton’s sought to reassure: the closure of 180 stores was a strategic development, part of a three-year plan, their brand was ‘strong’.
Of course, this could be right. This could be the beginning of a period of focus, on their Differentiation. Because that’s the essential foundation of brand strength.
When we talk about brands – what is ‘strong’?
Let’s start with the balance sheet: and calculate this in sterling, dollars, euros or yen. You get to see your ‘strength’ when someone buys your company. Or you try to raise capital.
For now, I’m going to stick with confectionery. (My sweet obsession is already out-there).
As Evan Davis showed, in this week’s wonderful Made In Britain programme, in 1988 Nestle bought Rowntree’s at £2.5Bn.
That was two and a half-times its pre-bid price, and at more than eight times its net asset value (the tangible stuff – factorys, plant & eqpt etc).
So we’re left with the Rowntree’s brands, KitKat in particular – valued at £2Bn.
Worth it? Nestle think so. They have been able to grow profitable revenues – largely through global distribution (deepening, not broadening, the KitKat brand) – to easily justify the valuation.
So, how do you get strong?
You build it. And like building anything – there’s a sequence. Steps to follow.
And the first steps?
Differentiation. Differentiation. Differentiation.
Young & Rubicam set this out a long time ago. Two Dimensions – Brand Strength, and Brand Stature. I like to re-label the components as D.A.R.K. As in DARK arts.
Brand Strength is made up of D – for Differentiation (owning a distinct Position), and A – for Accuracy (relevance to a clearly understood / targeted market).
Brand Stature is R – for Renown, and K – for Knowledge.
To build a brand – you grow Brand Strength, and then Brand Stature. Secure your Position, and then make it famous.
Misunderstanding this leads to so many of the frustrations I encounter with brand-building brandowners: like –
“we spent a fortune on PR (to get our name out there) and what?…nothing.”
All you’ve probably done, I say, is jump straight to ‘Renown’, and gotten people to ask “I’ve heard of your thing, but what’s special about it? For me?”
Or, you’ve successfully created a ‘category want’ by getting Accuracy ahead of Differentiation – and prompted the response “I need your thing, but not necessarily YOUR thing.” Like – “I now feel I want a disposable pen, just not necessarily a Bic.” You’ve created a commodity response, or you’ve helped to create a category for your competitors, without claiming your spot within it.
The tough news: you have to keep working on your Differentiation, as you bring in Accuracy. And then you have to maintain your Differentiation and Accuracy, as you develop Renown. Then add Knowledge.
The good news: do this right, and you get a £2bn ‘break’ like KitKat did.