Brand vs Intrinsic Value - Marketing

: What Rinaldo's Gesture Teaches Us about Marketing

We continue to be at a difficult cross roads in marketing. Much of the marketing worlds has pivoted out of the 'art' realm and into that of hard sciences and numbers. Digital marketing is all about experimentation with A/B, and multivariate testing. It is about trial and error, learning, continual improvement, incremental shifts forward, and getting hard analytical statistics to back your decision making. But that's digital marketing. It does not touch the realm of the business brand, or brand story. It begs the question of where to invest, brand vs core value marketing. For your business is it the brand or the intrinsic value of the offering that is most important? And, with that question - where should you invest your marketing to truly get through to your target audience?

What spurred this entire question is the incident with Cristiano Ronaldo pushing the Coke bottles to the side during a press conference. In doing so, he picked up a bottle of water that he signalled to the press as his preference. Not only did this simple move cause mass controversy in the media, but Coca-Cola's stock lost $4 Billion USD in valuation. (Photo: The Independent, 16Jun2021)

Core Brand Pendulum

At the heart of the brand vs core value marketing dilemma is a very difficult question of where to invest. We all know of the iconic brand stories like that of American Express, Nike, Apple, HP, Google, Facebook, and yes ... Coca-Cola. The world isn't just about product marketing. The world does NOT beat a path to your doorway, just because you have a better product. This was addressed in the HP product launch in "Does Marketing or the Better Product Win?"

Clearly, focusing on the corporate brand, articulating the brand mission, and developing a brand experience, can have a direct and material impact on the bottom line. The iconic stories of the brands mentioned above, exemplify this point. Branding helps to distinguish and to some extent differentiate your products and services. Successful brands differentiate their offering by making sure the company becomes memorable. Doing so often results in lowering the competitive pressures, accentuating consumer preference, boosting sales, and increasing margins. Naturally, it requires solid product quality, consistency, a great customer experience, standout customer service, and so on. However, many companies offer these notable attributes, yet haven't stood out due to underinvestments in their company's core branding.

Hence the dilemma between brand marketing and your product or service offering.

In the marketing community, it is sacrilege to speak out against branding. But, have we swung the pendulum too far? Branding speaks to many aspects of your business. It speaks to good citizenship, brands taking 'personal' accountability in failures, providing great product quality, and continually evolving / improving the customer experience with that brand. But again, have marketing team members been too caught up in the momentum of the brand pendulum?

Case of Coca-Cola

Imagine the conceptual marketing pendulum as budget investment - to make it a more tangible example. In Coca-Cola's case their graphed profile resembles something like this first scenario. There is a very heavy investment in brand marketing, with a negligible investment in articulating the core product value. Truth be told, one might successfully argue that the core offering is small, aside from the pleasure of a cold and sweet flavoured fizzy drink. This is not a slight against Coke. They have built a mega multinational corporation, and have invested in branding brilliantly. Rather, this is an excellent learnable example of a marketing investment pendulum swing to one of the extremes. And in Coca-Cola's case, this may be necessary, and the correct marketing approach.

In Coke's case, Rinaldo's gesture had a disproportionately excessive impact on the valuation of the company. Could part of this be a questioning of the stock market over-valuing a highly intangible concept? If so, what might this say about the current digital currency craze and valuations of Bitcoin, Dogecoin, Ephereum, and so on?

No to Product Extremism

Despite being a product marketer at heart, swinging the pendulum to the other extreme isn't the answer, either. For many high tech companies, it is easy to get drawn into the fantasy that the better product will win in the market. It is just a fantasy. As an former engineer, it tugs at my heart strings, as I desperately want to believe it to be true. But, it is not. It takes a much more holistic approach to succeed. Swinging the pendulum to this other extreme of investing purely in core value marketing - is not ideal, either.

Finding a balancing point is the 'holy grail' quest that every CMO should be venturing. Sometimes you invest more heavily in brand, and at other times in product core value marketing. There are no exactitudes to this currently. And that opens the next question for debate and development in marketing.

Branding: Finding the Right Balance

Why we are even discussing this issue, is that branding is a very ethereal subject. It is like the contrast between art versus graffiti. It is highly subject to opinion, and largely within the domain of personal interpretation. It differs between people - making it difficult to quantify. So too is the realm of branding.

What we need in is more research into Branding - to better define how to measure it. As a marketer we need some practice rules to state that I must invest 4:1 in branding vs product for B2C businesses, and 1:5 in branding vs product for B2B businesses. Measuring it on mass is one thing. Clearly, Coca-Cola branding is worth more than $4 Billion - given the market valuation crash. But as a CMO, how do I decide on how much of my budget to allocate to branding practices? How much should I put into direct demand generation, and product value accentuation, instead? These are difficult to quantify scientifically, and in business.

Perhaps this is the next domain of marketing. How to quantify the value of my corporate brand and what is the right balance between branding and product marketing?