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.
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.
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?
This was first published in March 2001