Coca-Cola is number one, followed by Microsoft, IBM, Intel and
Nokia. What do these companies all have in common? They are the top
five named brands in the world with the most valuable branding,
which translates into millions of dollars of sales and billions of
dollars in stock value.
Brands have important influence on our lives, according to New
York-based Interbrand, which tracks brand recognition and values
for the top 75 companies in the world. If nothing else, branding is
central to free markets and represents free choice to the consumer,
so it’s worth investing in as an integral part of your marketing
plan. But is that only relevant to the Coca-Colas of this world?
What’s it got to do with the channel? Do branding exercises have
any benefits and how much do they cost?
In years gone by the brand was all, with famous packaging and
even the advertising itself remaining virtually untouched for
decades. Names such as Guinness, Kellogg’s Corn Flakes, Milk of
Magnesia and many others featured high in the nation’s
consciousness. Come the 70s, food retailers realised that they too
needed to establish their identity outside of the products they
retailed to capture the edge over their competition. The result was
the explosion in retailer advertising which continues to this day.
Every little helps to make life taste better… and so on.
The major manufacturers wisely continued to spend behind their
products, even though margins were being attacked and own-label was
rearing its ugly head. Those that failed to spend reaped the
consequences. For instance, where is Maxwell House Coffee today —
once the almost-equal of Nescafé?
Selling a brand
A far cry from big retailer names and Coca-Cola is Exchequer
Business Systems, a small Sage reseller specialising in accounting
systems. Fiona Beaumont is a director of the company, which sells
to mainly small and medium-sized businesses across the board,
without any particular vertical market focus. The business is
heavily reliant on sales of Sage products and works closely with
accountants and financial controllers to tailor systems.
“Sage is essentially a marketing-led company and has been
excellent at promoting its brand image to the target market. The
Sage logo is what I represent and prospects come to Exchequer
because they have been attracted to the brand,” claims
Beaumont.
Exchequer has recently undergone a rebranding exercise of its
own, updating and modernising its logo and business stationery. The
Sage brand features heavily on letterhead and business cards and
provides focus for the Web site.
“Often customers perceive me as ‘the lady from Sage’ — they
don’t even distinguish me from the vendor at all. Very occasionally
they will ask if we supply other accounting products, but frankly,
if they are looking for other brands, they will go to another
dealer,” she says.
Exchequer Business Systems does not promote its own name at all
in fact. “We tried a series of ads some time ago, but it just
didn’t work. Now we just have a box ad in the Yellow Pages, but the
main focus is the Sage logo. Sage does all the national advertising
and then passes leads back to dealers — we’ve piggy-backed on the
success of its marketing efforts,” she admits.
Interestingly, Sage works closely with its dealers to ensure
they have all the necessary tools to close the sale, ship the
software and provide training, installation and service, etc, as
necessary. It doesn’t expect its dealers to develop the brand — the
channel is a conduit to market, not a marketing tool in itself.
Adding credibility
Conversely, a distributor of wireless products is taking a
different tack. Multicap UK is a trade-only wholesaler of wireless
technologies. Wireless is not a mature market and resellers are
looking for guidance and advice from a distributor, as well as
technical support and services.
Multicap heavily brands everything it does, giving a common
“look and feel” to all the materials, no matter which vendor’s
products it is promoting.
Colin Bateman, general manager at Multicap UK, says branding
helps attract new resellers to the company and adds positively to
the brand perception of its vendors as well. “We are positioned as
a reliable, reputable, experienced distributor, selling only top
products, so resellers have that reassurance from us. It’s a
credibility issue,” he says, adding: “It’s very important that our
customers recognise us as experts in our field and not as being
vendor-dependent. ‘He who pays the piper, calls the tune’ and we
prefer to work in harmony with our suppliers and partners, rather
than sycophantically. We only supply high-quality products and
services.
“The label on the product is not the central issue. Many of our
products are components of a system and the reseller needs to know
that it’s profitable and supportable business, otherwise why
bother? The label is irrelevant in our business, the issue is
whether it’s the best product for the job and good business for the
reseller.”
Bateman goes on to say: “There are plenty of products out there
which, unfortunately, create support issues and contribute to low
margins, but…have good brand names.”
He believes his customers are looking to Multicap branding to
add credibility to the products they sell.
Lastly, Multicap defends its position on branding its own name
as a response to the oldest problem in the channel. “Most resellers
see distributors as greedy middlemen who do nothing and erode
margin. Our branding is an education exercise to show them that we
really are adding something to the party,” claims Bateman.
Branding and rebranding
Hugh Roper, managing director at multi-faceted distributor, the
Hugh Symons Group, has experience of both sides of the coin.
He cites the Hugh Symons Mobile Data division, which has
pioneered the way forward in PDAs and connectivity, often dealing
with tertiary brands. “Resellers have looked to Hugh Symons for
endorsement of these products to ensure a successful sales cycle,”
he says.
On the other hand, big-name brands such as Orange, One-to-One
and Toshiba are also handled within the Hugh Symons Group. Roper
notes: “These companies have huge marcoms spend — it’s all about
driving consumer pull through. They fund much of our marketing, so
we abide by their rules and affiliate ourselves to their brands.”
Furthermore, Roper comments: “Our own pull through is generated by
the choice that we are seen to be offering within our
portfolio.”
The Hugh Symons Group recently underwent a major rebranding
programme. Historically, the Group has been made up of easily
recognised autonomous business units. Now, with technologies
converging and market definitions blurring, the Group felt that its
added value lay in the depth of the product portfolio. The
disparate branding for each division (Walk ‘n’ Talk, Workstation,
etc) meant there was no cohesion of the brand or resellers crossing
between markets where the Group operated.
Under the new branding, the Hugh Symons Group is the central
feature, with “descriptors” focusing on each main activity. The
response from its vendors, both large and small, has been positive.
“They like the idea of cross-market fertilisation between sectors —
offering Orange to traditional IT resellers, for example, or Palm
devices to the comms market.” Roper feels that Hugh Symons is
adding value to high street brands by taking them into totally new
channel-based markets.
Wise words
David Noble is director of full-service advertising agency, DNA.
He has many years’ experience in the business-to-business sector
and sees branding in this area as a difficult issue for the
channel. “With wholesalers, unlike the traditional retailing
markets, the picture can be very different, with many resellers
subjugating their own brand for that of the principal name they are
selling,” he says. “Quite often there are sensible financial
reasons for doing so, such as if the featured company is putting up
some or all of the marketing expenditure!
“In some markets, however, such as telecoms, chemists products
and motor accessories, wholesalers themselves have become brands.
They spend their own money on advertising and marketing (as well as
other people’s) and may even create own-label products and become
major companies in their own right, such that the companies they
represent cannot afford to ignore them.”
So, are there any rules that can be deduced? “Possibly,” he
says. “Firstly, if you’re a single-vendor reseller, forget about
your own identity and concentrate on being the best reseller of the
vendor’s products that you can be.
“Secondly, if you’re in a market where the brand names are
colossal — IBM and Hewlett-Packard for example — you’ll never be
able to shout loud enough and people will always want the
reassurance of the familiar name. Take that name and trade on
it.
“On the other hand, if you have a spread of products in your
portfolio, perhaps including competing ones, promote your own
reputation based on service and price. This means not only will
your customers keep coming to you, but so will manufacturers
looking for a wholesaler/reseller.”
Wise words. Certainly, distributors and resellers can no longer
afford to ignore the issue of branding as the channel matures and
becomes ever more sophisticated. We have only to look at other
market sectors to see the writing on the wall — play to your
strengths and utilise the strengths of your partners. This is an
issue that won’t go away and developing a workable strategy that
delivers results is essential in today’s competitive markets.
Ask yourself what is your company’s role? Where do you fit in?
What do your customers expect from you in terms of collateral,
advice and support? Do they know who you are and what you do? In
short, ask yourself what is your customers’ perception of your
company?
multicap.co.uk
hughsymons.com
exchequersbs.com