Companies invest heavily in establishing their brands yet there are 3 common ways in which they can destroy brand value, often without realising it.

Why is brand so important to organisations? Brand tells your customers what they can expect from your products and services, and it differentiates your offering from your competitors'. It’s probably the most visible part of your organisation. A brand has an identity and personality, a name, culture, vision, and emotion associated with it. Customers see and experience your brand through every interaction that they have with your organisation.

1. Destroying brand value by not having a brand architecture.

Because of the power that brands can have, every product manager with a new product to launch, wants it to have its own brand. In my experience, very few new products can justify having their own brand. A brand is much more than a trademarked name. It takes a lot of time, money and resources to develop and sustain a brand. A brand goes beyond product function and includes the emotion that the customer associates with it which takes time to build. For example, the experience you have buying a coffee is different to the experience you expect when you buy a Starbucks coffee.

I can share an example of a Life Science company that allowed its product managers to name and trademark new products indiscriminately. At one point the company had 3,600 trademarked brands. The cost of maintaining the trade marks on each of these was staggering not to mention the resources required to ensure that there was no infringement and that the correct trademark was being used in all literature and marketing material. It also was very confusing for customers because a lot of the names were very esoteric or made up as these were the only words still available to trademark. Names didn’t relate to what the product did and it became difficult for customers to navigate the portfolio. The company tackled the problem by selecting 5 key brands that had the best brand equity and grouped products under these 5 umbrella brands using product descriptors in the name to describe what the products did. For example, let’s call one of the umbrella brands Exco; their imagers would become the Exco CCD multimode imager and the Exco CCD single mode imager, making it much easier for customers to understand what each product did.

It's important to understand the associations customers have with each sub-brand and how far the brand can stretch in customers’ minds so that you group together appropriate products under the same sub-brand to retain the sub-brand’s integrity.

When you’re dealing with multiple brands, branding architecture is as important as brand values, logo etc. If you already have several products that have been developed into mini brands, in other words, they are recognised by customers or customers refer to them by their brand names, then you might consider a house of brands approach like the example above or Proctor and Gamble who own Pampers, OralB, Gillette, Ariel, and Charmin, among others. A house of brands is good if you have products going into completely different markets and need to manage risk in a particular product area. It’s a good strategy if your products are more memorable than the overall company name.

However, if the company name is well recognised and you have strong equity in the name then a branded house or master brand works better. For example, Google has Google maps, Google books, Google translate, and Google hangouts etc. Of course, there are also hybrids like Coca-Cola (who own Fanta and Sprite) and endorsed brands like Virgin (Virgin media, Virgin money, Virgin Atlantic) where the brand essence is carried over to very different and distinct product areas.

Having the wrong brand architecture and allowing product names to proliferate into mini brands will undermine the brand value you already have and dissipate your efforts to build brand strength.

2. Acquiring companies without understanding how brand values is derived.

The Life Science tools sector is very acquisitive with smaller companies continuously being bought up by larger companies like Thermo Fisher, Danaher, GE, and Merck. Brand values are derived from a combination of product features, service aspects and core competencies that are inherent within the company. In almost all acquisitions the acquiring company’s brand becomes dominant over time.

To understand why this happens let’s take service levels as an example of a brand differentiator. The level of service that customers receive is depend on how a company is structured and the processes under which it operates. When GE acquired Amersham and Pharmacia their customer service was integrated with GE’s customer service which was different to the levels of service that had been provided by these companies before they were acquired. This affected customers’ perceptions of the Amersham and Pharmacia brands. Another example is the acquisition of Invitrogen by Thermo Fisher. Invitrogen was known as an innovative, reliable brand while Thermo Fisher’s brand is trustworthy, reliable but also more corporate. With the merger, Invitrogen’s R&D became part of the Thermo Fisher R&D process and some of that perceived innovativeness was lost. Invitrogen is still a strong and reliable brand because it’s so synonymous with molecular biology but it’s a different brand to when it was part of Life Technologies.

A more recent example is Dharmacon, a small, responsive, entrepreneurial, innovative company that provides RNAi, gene expression and gene editing products, which was acquired by GE. To achieve cost synergies many of the processes were combined and streamlined which meant that Dharmacon now has more complex, less responsive processed as part of the larger GE organisation, so to its customers it’s begun to look a lot like GE.

Acquiring companies need to look carefully at what aspects make up the brand value and decide if or how they can best be preserved.

Many acquisitions only meet their acquisition plan targets by integrating functions like R&D, marketing, sales, customer and technical service which has an impact on how brand value is delivered. The alternative would be to run acquired companies independently or at least preserve the independence of certain functions which are key to delivering the brand value but this comes at a cost.

3. Not aligning products with customer needs and brand values.

Many life science companies struggle to put the customer at the centre of their marketing and branding because they are technology and engineering driven which makes them very product focussed.

A colleague of mine uses the example of Staples, the stationery supplier. If you were Staples and you took a product focussed approach you would market paper clips and pencils and notebooks but if you took a customer centric approach you would think about what small businesses might need or students and you could market bundles of product that were designed to meet their needs. To come back to Life science, if you take a customer centric approach to marketing and understand what customers’ needs are, you might find that they are interested in, for example, preserving their limited protein sample or ensuring data integrity or being able to monitor their experiments 24/7. When you are developing a new product a customer needs framework can be used to test product concepts against the framework to see if they are developing the right products for your customers. In addition, your marketing should reinforce the benefits of the product but also show how it aligns with the brand values e.g. reliability or excellent customer service.

Products that don’t fit well will dilute the marketing message and weaken the brand. This tends to be more of a particular problem in larger organisations with extensive product portfolios and multiple brands. Smaller companies have the ability to come to market and have an impact mainly because they are more focussed on the customer and have only one or a few products.

Developing and maintaining a strong brand depends on having an unambiguous brand strategy and architecture, alignment with customer needs and an understanding of which parts of the business contribute most to the brand value.