The jewelry industry’s buzzword of the day is branding, but few in the industry give much thought to exactly what a brand is.
During a discussion of branding at last year’s GIA Symposium in San Diego, Liz Chatelain, president of MVI Marketing, was the only panelist who got it right. She defined a brand as the immediate connection of a product to a name.
Cola, Coke. Diamonds, De Beers. Jewelry store, Tiffany.
To achieve brand status requires time, measured in years, and money, sometimes measured in millions of dollars. Also required to establish a brand are focus, consistency, and repetition. De Beers: “A diamond is forever.” Wal-Mart: “Always low prices. Always.” Advertising agencies and marketers will tell you there is one other component of brand building. Some call it the “USP”-the unique selling proposition. Others call it positioning. Either way, it’s the glue that binds a product’s benefit to a consumer’s consciousness (or subconscious) and leads to a product preference.
I had the good fortune to work for a top U.S. brand, Lenox China and Crystal, and learn first hand what a brand is and how it’s created, maintained, and nurtured. Lenox created a brand by selling and focusing on image and lifestyle at a time when every other fine china producer was selling plates. The company sold quality and backed it up with limited distribution in fine stores. Lenox built its business and its brand on four cornerstones: image, quality, product design, and limited distribution.
Lenox spent millions every year, mostly on advertising in publications catering to women aged 15 to 50. Brand building was supported by marketing activities aimed at the bridal market. These included programs to channel information about Lenox to high school students, participation at bridal fairs, and booklets for consumers who wanted to know what to look for when buying fine china. The result was a market share that exceeded 50% and extraordinary profitability. Brand building enabled Lenox to extend the brand to a new category of related product, fine crystal.
Today, according to Brown Forman’s annual report, Lenox’s market share is in the 40% range. The quality of its product is no longer distinguished. It has extended its brand name to a raft of products from all over the globe. It opened its own stores in competition with its primary distributors, many of which were jewelry stores. It began to sell seconds. It began discounting its products in a way that destroyed the credibility of its pricing structure. It all adds up to greed.
Branding is good for manufacturers and retailers. It helps distinguish you from the competition and identifies you with a particular niche in the marketplace.
Greed is bad. It makes you forget how you got where you are and takes you away from your core market.
Jewelry retailers and manufacturers need to strike a new balance in their dealings with one another. Retailers who push manufacturers to “advertise” in consumer publications on the pretense of brand building are guilty of a different kind of greed, ego greed. Manufacturers waste large sums of money in a futile effort at brand building, because even large amounts spent by any one manufacturer aren’t enough to break through the clutter to create a brand: the immediate connection of a name to a product.