A Brand New World

Businesses Hoping to Succeed Internationally Can’t Overlook the Importance of Branding

By Susan E. Kinsman

The cranberry. The bitter fruit of a bog plant is an acquired taste for even native New Englanders.

Yet the bright red berry is imprinted on the American harvest tradition, the fruit of a harsh climate, a symbol of sorts for the English settlers who also planted themselves along the Massachusetts coast.

Think cranberry. Think Thanksgiving. Think Ocean Spray? The agricultural cooperative based in Lakeville, Mass. has become synonymous with the tart berry and its bumper crop of related fruit and fruit-juice products in national and international markets.

Coincidence? Hardly. More like genius – the genius of branding.

Branding is a mantra in the corporate world, a process of distilling a company’s values, beliefs and way of doing business into a recognizable brand that helps to sell the company, and by extension its products, to customers.

“The logic behind the impact of branding is simple: if consumers are more familiar with your brand, they are more likely to feel more favorable toward you and to purchase your products,” according to CoreBrand, a global brand strategy and communications firm based in Stamford, Conn. In business for 30 years, it helps companies develop brands and evaluate the results.

Branding is not the same as corporate identity, which CoreBrand defines as a company’s “look.” Nor is it corporate image, which is the public’s perception of a company.

“Branding is more than a logo or a tagline. It’s everything a company does,” said Brad Puckey, CoreBrand’s director of brand intelligence. The result of a strategically focused business process, the brand conveys the essence, character and purpose of a company and its products and services.

Brands can be crafted and very carefully managed or they can be accidental, defined by the marketplace. A company can reap the most benefit from the former, Puckey said. “We view the brand as a business asset that can be managed and optimized to create the most value for the company.”

That value can be worth a lot. CoreBrand maintains a directory, updated quarterly, setting a value on 500 of the largest corporate brands as a percentage of a company’s market capitalization, or the value of its outstanding stock. It’s much like what financial analysts do in assessing stock prices, only CoreBrand adds another variable: brand power.

Brand power is determined through extensive research, Puckey says, more than 10,000 interviews with senior business executives who are the decision makers in their own companies.

For the three months ended June 30, CoreBrand ranked the top 10 companies with the most valuable corporate brands as: General Electric, Microsoft, ExxonMobil, Wal-Mart, Johnson & Johnson., Pfizer, IBM, Toyota, Procter & Gamble and Coca-Cola.

For GE, its brand represents 17.25 percent of the company’s value, more than $61 billion, according to CoreBrand. Earlier this year BusinessWeek ranked GE the fourth most valuable brand worldwide, after Coca-Cola, Microsoft and IBM.

“It is a very useful measure for anyone responsible for the brand,” Puckey said. “It tells executives what the asset value of the brand is, and how hard it is working to create dollar value for the company.”

Progress is a key element in GE’s branding strategy and it is reflected in its various advertising campaigns from “We Bring Good Things To Life” to today’s “imagination at work.”

Ocean Spray Abroad

Branding has also worked for Ocean Spray, formed in 1930 by three cranberry growers from Massachusetts and New Jersey who wanted to expand the market for their crops by developing new products from cranberries. A shelf-stable cranberry sauce was one; a juice drink was another. Cranberry Juice Cocktail debuted that year. It’s still the company’s best seller.

Now owned by more than 800 cranberry growers and 126 grapefruit growers in the United States and Canada, Ocean Spray Cranberries, Inc. and its subsidiary, Ocean Spray International, Inc., has more than 2,000 employees worldwide and net sales were approximately $1 billion in fiscal 2003. Calling itself an “American icon,” Ocean Spray says it has been the best-selling brand in the canned and bottled juice market in the United States since 1981.

The company’s brand remains firmly planted on Yankee ingenuity as well as on its berries, even with an updated logo and its first major label redesign in 2001. “The spirit of resourcefulness and innovation on which the cooperative was founded is what drives Ocean Spray today,” its website says.

It has also driven Ocean Spray into international markets where it is doing business in nearly 50 countries, with Canada as its most established market and the United Kingdom as its largest, a platform the company hopes to use to expand in continental Europe. International sales represent about 25 percent of the company’s total sales, said Stewart Gallagher, president of Ocean Spray International.

“Ocean Spray is a cranberry brand and only a cranberry brand,” Gallagher said. The problem in international markets is “most people don’t have a clue what a cranberry is because 99 percent are grown in North America.

That’s where branding has made a big difference. While they don’t recognize the cranberry, customers do recognize Ocean Spray and except for a small percentage of private-label juices, Ocean Spray’s products, from dried Craisins and mixed berries to cranberry juice concentrate and powder, are sold under its brand, he said..

“Taste, health and quality” are the values the company associates with its brand, Gallagher said, and among those taste is the hardest sell in international markets. The berry, he said politely, has a “polarizing taste profile.”

“It requires a lot of consumer education. We’re starting from scratch. People have no idea what a cranberry tastes like, much less what cranberry juice tastes like,” he said. “If they just taste it with no explanation, they are probably not going to like it.”

“A lot of what we do is introduce them to the health benefits,” Gallagher said. A number of health studies, some funded by the company, have linked the tart juice to a healthy urinary tract. Earlier this year, a similar finding by the French government’s food safety authority is expected to accelerate sales there. The authority confirmed that the powder and juice of North American cranberries “help reduce the adhesion of certain E.coli bacteria to urinary tract walls.” That means food, beverage and dietary supplement manufacturers can use the health claim in the labeling and marketing of products containing the company’s cranberry juice concentrate and juice powder.

Small Business Branding

Branding works for large corporations, but may be more critical for small to medium-size businesses who have limited advertising and marketing budgets. “When you have small resources, it’s very important to manage every dollar,” says Puckey. “A brand can bring an awareness of your company, its credibility and reputation, to the marketplace.”

,Developing a brand usually starts with the chief executive officer. “An effective CEO probably has a good idea what the company stands for, what its core values are and can communicate that to his company,” Puckey said. The next step is developing a strategy to present that view to the public, but first a company needs to know its audience. “You can have a great campaign, great logos and clever advertising, but it won’t work if you’re hitting on messages that constituents don’t think are relevant,” he said.

Not surprisingly, Puckey recommends using an outside consultant during this process. While some executives may be able to do the work on their own, an objective adviser can provide a valuable “reality check,” he says.

Companies then have to put their branding strategy to work in all its contacts with the public, from answering telephones to advertising. Developing a brand can be an expensive process and measuring the impact of the result is critical.

“Our belief is that a brand creates value and measurable returns on investment. The key here is that the [company’s] financial executives see this as an investment, a value created asset, rather than an expense,” Puckey said.

Defending the Brand

A brand is not required for companies seeking to compete in markets outside the United States. But those that do have brands “may be able to make that market entry faster, less expensive and more profitable because they’re coming in with a strong recognizable brand,” he said.

The U.S. Department of Commerce, however, raises other considerations for U.S. companies about branding and labeling products in foreign markets. “A company may find that building international recognition for a brand is expensive. Protection for brand names varies from one country to another. In some developing countries, barriers to the use of foreign brands or trademarks may exist. In other countries, piracy of a company’s brand names and counterfeiting of its products are widespread.”

Ocean Spray has had occasional problems, not with counterfeit products but with misuse of its brand. “It’s a big world and a lot of people out there are quick on their feet. It’s been an issue in some of the Asian markets, as with a lot of other companies where trademark and brands are involved,” Gallagher said.

The United States is not a member of any agreement under which a single filing will provide international protection for a brand name registered as a trademark in the U.S. To protect its products and brand names, a company must comply with local laws in foreign countries on patents, copyrights and trademarks. The commerce department advises companies to consult a lawyer about registering for that protection before doing business in another country.

The potential expense of protecting a brand name in a foreign country should not deter companies interested in developing a brand from doing so, Puckey said. “Any time you enter a new market there are expenses of doing business. This is an expense of doing business in a new market.”

Gallagher agrees. “We think the brand is the only thing we have. I don’t know how another company would sell a product without using their brand.”