Wednesday, May 16, 2012

Branding. What it is. And, isn’t.


In a recent presentation in front of analysts and investors, Ron Johnson, CEO of JC Penny said the following.  JC Penney's marketing is entertaining consumers and building the brand, but it's not doing the "hard work" of communicating the retailer's revamped pricing strategy.

There’s a reason why Mr Johnson said this.  JC Penny reported a first-quarter loss of $163 million. Sales fell 20% in first-quarter 2012, while comparable-store sales declined 18.9%. The chain also said it would discontinue its quarterly dividend.

Mr Johnson says JC Penny’s marketing is "entertaining consumers and building the brand".  But Mr Johnson is wrong about his advertising building the brand if he is not moving product.

Branding isn’t just about entertaining consumers and creating awareness.

Branding is about moving product.

Many CMOs don’t understand this.

Many CEOs don’t understand this.

Hell, many creative directors don’t understand this.

In JC Penny’s case, its brand starts with its revamped pricing strategy
And why that's of benefit to its customers.

Communicate that and Mr Johnson will once again have a brand people trust.

Because that’s all a brand really is.

The trust people have in the product.

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