Extreme Distinction: Becoming an Iconic Brand

Extreme Distinction: Becoming an Iconic Brand
In 1982 Howard Schultz worked for Starbucks as director of marketing. In
1985, when the owners didn’t want to go into the café business, he
opened his own coffee shop and, in 1987, Schultz bought Starbucks for
$3.8 million. Schultz found his inspiration from the cafes in Italy and
returned to Seattle with the idea of creating a "community around an
extraordinary cup of coffee." Today he is described by Forbes as "the man
who made drinking lattes the American way."

WHAT IS A CULTURAL ICON?

The Oxford English Dictionary defines a cultural icon as “a person or thing regarded as a representative
symbol, especially of a culture or movement; a person or an institution considered worthy of
admiration or respect.” It is easily recognized and generally represents an object or idea with great
cultural significance to a wide cultural group.

WHAT IS AN ICONIC BRAND?

Iconic brands are powerful cultural symbols. They advocate ideologies that resonate and that people
care about. Because they play an important role for consumers, they enjoy very strong brand loyalty
and are among the most loved and respected brands. These brands inspire not only loyalty, but also
enduring affection from their customers. Iconic brands possess three important features that separate
them from other big, well-known brands:

       They have strong cultural roots that tap into society’s values, sometimes even inspiring a shift
        in those values. Starbucks went beyond cappuccino to influence the lifestyle of their target
        market.
       They possess physical or symbolic features that make them instantly recognizable. Nike is
        named after the winged goddess of victory in Greek mythology because Nike is the twentieth
        century footwear that lifts the world's greatest athletes to new levels of mastery and
        achievement.
       The Nike 'swoosh' exemplifies the spirit of the winged goddess who inspired the most
        courageous and chivalrous warriors at the dawn of civilization. (Nike Consumer Affairs, 1996).
        When Jeff Bezos was considering names for his company, he wanted one that began with the
        letter “A” so it would appear early in the alphabetical ordering. He chose Amazon because he
        viewed the river as the largest in the world, just as he aspired his company to be. While the
        arrow logo may just look like a smile it actually points from a to z representing that Amazon
        sells everything, from a to z, and the smile on customers’ faces when they buy a product.

They have a compelling story and manage to remain true to their original values while reinterpreting
them in light of contemporary culture. Enzo Ferrari had a dream, a motivation and a passion: he
wanted to build a car that was the best in the world.

WHY BRANDS STRIVE FOR THIS DISTINCTION

According to WPP, iconic brands have distinct advantages that translate into tangible results. The
company found that iconic brands have higher top-of-mind consumer awareness than other brands
(58% for iconic brands vs. 36% for non-iconic brands). Some of the most iconic brands frequently rely
heavily on just one product for the majority of their sales and profit - Coca-Cola trademark drinks
account for roughly 30% of the company’s total revenue, Altria’s sales of “smokeable” products are
roughly 90% of total company revenues, of which 85% of units sold are Marlboros and of Apple’s
$156.5 billion in worldwide sales in 2012, $80.5 billion came from the iPhone alone.

Because each product represents such an oversized share of their respective company’s revenue, the
products’ tremendous margins are the foundation of the company’s profit. Nearly all of them are the
market leader in their sector and are mass-produced at an unprecedented scale and these companies
can apply significant pressure up and down their supply chain, ensuring they can manufacture the
product at the lowest cost, and sell it to customers at the highest possible price. In 2012 Apple
surpassed Coca-Cola for the #1 position in Forbes World’s Most Powerful Brands and Interbrand’s Best
Global Brands List. According to Billy Mann, managing director at Penn Schoen Berland, “The brands
that made this list are those that make it a point to enable people to do things – better, faster, and in a
more authentic way.” In 2013 Havas Media rated Google, Samsung and Microsoft as the 3 most
Meaningful Brands. The Meaningful Brands Index shows that the more the brand contributes to
improve the wellbeing of individuals, communities and the environment, the more meaningful it
becomes, and, Meaningful Brands outperform the stock market by 120%.

DIGITAL TECHNOLOGY EMPOWERING CONSUMERS IN THE 21ST CENTURY

People are inherently unfaithful in their buying behavior requiring creativity on the part of marketers to
make a brand vivid, relevant and memorable. A 2011 study by AisleBuyer found that nearly 75% of
consumers would switch brands if offered real-time discounts and promotions that were delivered to
their smartphones while they were shopping in a store. Consumers are becoming increasingly willing
to provide personal information as their "input" to the relationship. In order to balance the
relationship, manufacturers and retailers are adding additional incentives like reward programs and
"memberships" to compensate consumers for their information and their loyalty. The concern is that
consumers are becoming more demanding in their loyalty requirements as they gain more power.
Thus, marketers face ever-increasing demands to add "value" to the relationship to keep customers
satisfied. Iconic brands must overcome conventional thinking, stay connected and drive brand
engagement while remaining true to their core values.

Through our work with these invaluable brand assets, FullSurge has established 5 Guiding Principles on
what it takes to become an iconic brand and, equally important, what’s required to maintain this
coveted status over time:

1) Expand your frame of reference

A brand’s frame of reference is essentially the business within which it believes it competes. Iconic
brands tend to define their frame of reference as something broader than their basic product or service
category. Doing so inherently “raises the bar” on customer expectations, often driving brand managers
to higher levels of performance. Additionally, it tends to increase a brand’s “stretch,” making it more
extendible across a broader array of categories. For Nike, the No. 1 Most Innovative Company Of Fast
Company’s 2013 Most Innovative Companies, the release of the FuelBand was the culmination of
Nike’s transformation from an athletic shoe company into a digital powerhouse by breaking out of
apparel and into tech, data, and services. UPS synchronized the world of commerce. The company
needed a new platform to express and unify its expanded capabilities following its successful IPO and
strategic acquisitions. By investing in additional technologies and solutions to significantly increase its
offering—everything from supply chain management to financial and retail services—the company
moved from package delivery leader to global heavyweight.

2) Own a powerful emotional benefit

Iconic brands tend to position themselves around a highly desirable emotional benefit. These
emotional benefits form the basis for an endearing brand promise that resonates with customers. And
once credibly established, an emotional positioning is not easily hijacked by competitors. Dove’s
campaign for Real Beauty was inspired by research suggesting that only 4% of women consider
themselves beautiful; Dove hopes to convince the other 96% that they are beautiful too.

In addition to providing what is seen as a reliable service,
FedEx has created trust through initiatives such as its "We
Understand" campaign. They've elevated the brand by
recognizing that it's not just about the logistics of moving
packages and boxes. They appreciate that it's people's
treasures, livelihoods and futures, and that the contents of
those packages mean a lot to people.

State Farm makes you feel secure and safe in times of need. State Farm Insurance tells us they would
be there to help and exploits a fundamental business benefit: it’s good to do business with people you
know. And State Farm is there to remind us that they are the people we know, our “good neighbor.”

3) Establish meaningful relationships

In an era that features the Worldwide Web, mobile technology, and digital and social media,
consumers are increasingly influential in determining how a brand is viewed and perceived in the

marketplace. Those who effectively manage iconic brands recognize this and proactively seek to
establish meaningful relationships with their customers, rather than merely transact with them,
enabling brands to engage their customers in a more meaningful manner and add value to their lives
beyond the core value the companies’ products or services deliver.

An Altimeter Group and Wetpaint study, ENGAGEMENTdB, found that how deeply a brand engages
with its customers directly correlates to its financial performance – the greater the breadth and depth
of social media engagement, the greater the payback. And, according to Gallup, fully engaged
customers are strongly emotionally attached and attitudinally loyal. They'll go out of their way to
locate a favored product or service, and they won't accept substitutes. The Baldrige Criteria for
Performance Excellence defines customer engagement as “your customers’ investment in your brand
and product offerings. Characteristics of engagement include customer retention and loyalty,
customers’ willingness to make an effort to do business – and to increase business – with your
organization…”

In its My Starbucks Idea website, home for its business crowdsourcing, Starbucks isn’t promoting
anything, trying to sell anything, or trying to persuade any kind of action. It encourages customers to
submit ideas for better products, improving the customer experience, and defining new community
involvement, among other categories. They want to say that they care about what their customers and
partners (employees) think, and as proof of that care, they take action on the feedback they receive.

Grainger, based in Chicago, IL is North America’s leading broad line supplier of MRO (maintenance,
repair, and operating). Customer satisfaction is Grainger’s number one priority, and this emphasis has
led to a large and vocal fan base, especially over social media. One of the most effective regular
features on Grainger’s Facebook page is their “Mystery Product Monday”, in which they pull an
esoteric piece of equipment out of their vast inventory for fans to guess what it is. This feature is
extremely popular and garners hundreds of replies. As their Facebook profile highlights, “This page
features fun information about global MRO supplier Grainger, and the general maintenance supply
industry. Don’t think MRO can be “fun?” Let this Facebook page show you how exciting the industry
can really be! One of the ways Grainger accomplishes this through their “Fun Fact Friday” series. Here,
Grainger pulls out a random fact and ties it into their service, much to the delight of their audience.
Oreo has made a name for itself in crowdsourcing for its “Daily Twist” campaign.

In honor of its 100th anniversary, the brand launched a 100-day series of cookie designs. It asked the
public to select the winning design. Oreo’s Facebook page sharing increased more than 4,000 percent
during the campaign, when compared to other months.

4) Create memorable experiences

In their 1998 bestselling book by the same title, B. Joseph Pine II and James H. Gilmore declared the
United States to be in “The Experience Economy.” Iconic brands understand this, and consistently go
beyond mere products and services to delight customers with extraordinary experiences. Customer

experience      is   responsible     for     Apple
outperforming other retailers in- and out-of-
category. At an Apple store, retail comes to you.
Enter and you get a warm and genuine greeting
from a caring expert. It takes only a minute or
two for this well-trained, smart, friendly person
to learn your intent, take accountability for your
experience, and surround you with the right
resources. Apple captures its ‘Customer’s
Intent’ early to queue up the right resource(s).
Don’t be surprised if they try to ‘unsell’ you on what you think you want to buy, seeing if a lower-priced
or lesser-featured product would be perfect. When it’s time to check out wherever you are in the
store, team members use an internet-enabled handheld device to ring up your sale, register your
warranties, collect payment, and send you an e-mail receipt. The only time they may have to leave
your side is to fetch a shopping bag for you. The result is that you feel well attended to and get
minutes back in your day. Apple loses the lines without creating more work for its customers. (You Had
Me At Hello: Secrets of Apple’s In-Store Customer Experience Exposed). At IKEA customers are
encouraged to follow a pre-designated path (marked by arrows on the floor) to navigate through
multiple showrooms. Each room features IKEA products separated by theme, on display in “natural”
settings. The stores also have a cafeteria-style restaurant inside, as well as a snack bar and childcare
center.

5) Continuously adapt and innovate

Iconic brands transcend time. They are able to do so because they remain innately in-tuned to the ever-
changing landscape within which they operate. In 2011 Kraft introduced the MiO water enhancer,
whose sales approached $100 million within the first nine months of launch. The company invented
the "liquid water enhancer" category targeting Millennials and directly addressing an important need:
allowing them to personalize their drink. Prior to MiO, there were no drink enhancers targeting these
heavy users. Millenials tend to be early adapters of many trends and actively they seek out
opportunities to change up their daily routines. Even though other beverages were targeting
Millennials, no one was giving them an opportunity to customize water their own way. Kraft’s
commitment to innovation earned them the Wal-Mart innovation of the year award in 2011 across all
categories, a Gold Medal Edison innovation award in food in 2012, and winning over its target
consumers: the Millennials. Heinz changed the way Americans eat on-the-go with the launch of Heinz®
Dip & Squeeze® Ketchup, the packaging innovation that allows for both dipping and squeezing and
holds three times as much Heinz® Ketchup as the traditional packet. After 42 years of messing with
ketchup packets, people can now eat America’s Favorite Ketchup® with ease. American Express’ Open
Forum is a site that gives advice to small business owners. It is frequently updated with new content,
including blog posts and videos and the ‘Idea Hub’, a forum that allows members to network and share

ideas with each other and industry experts. When it first launched, Open Forum increased unique
visitors from 160,000 in December 2008 to almost 1 million in December 2009. It now attracts more
than 1 million unique visitors per month and has more than 18,000 members.

All brands aspire to be iconic but those that succeed transform society itself. They understand they
must make an emotional connection and play a valued role in consumers’ lives that other brands can’t.
Brand and marketing strategy, therefore, must move beyond functional benefits to an understanding of
how the brand fits into what is taking place in culture and society, engaging consumers and touching
their daily lives.

_________________________________

Michael Million (mmillion@fullsurge.com) is a partner at FullSurge, a strategic consulting firm that
helps clients growth through brand-building, marketing and innovation.

For more of FullSurge’s thinking on brand positioning and other topics related to brand, marketing and
innovation, please visit https://www.fullsurge.com/service-offerings/brand/brand-positioning.