By Jill Rivkin

Brands arrived in the retail landscape about 100 years ago and dominated the market for about 50 years. Then, in the 70s and 80s, European private label entered the scene and tiered brands made marketers think more seriously about how consumers relate to brands, what role they play in their lives and what forces impact purchasing decisions. It was at this point, some branding experts say, that the branding game really changed.

Today, some brands make emotional connections with consumers as they contribute to how consumers look and feel — they are badge brands. Still other very successful brands are functional and generate performance-based connections. Both emotional and functional brands play a critical role in the consumer-packaged-goods arena. Experts would agree that it’s more imperative than ever for brand owners and contract manufacturers to closely evaluate and understand a brand’s role in the market to best support brand positioning.

“Some brands just don’t have that emotional connection, but they can be important based on performance,” says Dennis Furniss, partner and executive vice president of strategy and design at Chicago-based firm Kaleidoscope. “Brands need to stop thinking that with emotional branding they can be the next Coca-Cola.”

Understanding and closely managing a brand today is evermore important given the tenuous retail atmosphere and changing consumer attitudes about spending. Even under the best circumstances, consumers only have the capacity to embrace so many brands. And today’s fluctuating economy mixed with an incredibly fast-paced, media-flooded world make capturing this attention even more challenging.

“Consumers today are more experimental than ever, and this dynamic is not going to change,” says Perry Seelert, strategic partner at united*, a New York-based branding agency. “There’s more media, 20,000+ new products a year and faster, more time-compressed lifestyles — these are the facts. And in this more dynamic, changing world that is more interactive than ever, consumers can only reasonably sustain a limited set of emotional relationships with brands.”

Seelert asserts that consumers can manage emotional relationships with only eight to 10 brands and “if you are to become one of the eight to 10, then you have to transcend the functional bearings of your brand and have an emotional reason for being, as well as a dialogue with the consumer.”

The best way to create that connection, Seelert says, is to “stay true. The big word is ‘authenticity,’ but another way of saying it is be unapologetic in expressing who you are, your reason for being, and stay consistent in this expression.”

With the harsh economic times of the past few years, it has been tempting for brand owners and retailers to drive impulse shopping and work on short-term approaches to hang on to consumers. However, branding experts agree this has been and is a huge risk given a brand’s most important attribute — its equity.

“There is an interesting irony when it comes to the economy because I think brands have actually become more important in the last five years to consumers,” Seelert says. “It is just that the companies doing the branding and the brands themselves have become more cavalier, and in many ways, less disciplined.”

It’s a “slippery slope,” Seelert asserts.

He points to a number of factors affecting branding right now, including misinterpreted “exposure” as opposed to elements that actually build an emotional connection to a brand. “Floor graphics and aisle signage are not ‘shopper marketing,’ and they are not equity building,” he says. Within the parameters of visual marketing, however, Seelert says that brand owners must realize the relevance of visual language and design. “It’s more important than ever,” he says. “We live in a cluttered world, and considered design is a way to cut through it.”

Coming Up from the Minors: Private Label

“Brands have allowed a paradigm shift,” Furniss says. “In the last 10 years, brands have focused on category domination and management. That was a fatal blow for a lot of brands — they fell into a trap by aligning with retailers and buying shelf space… This diluted the competitive space and allowed private label entry.”

Retailers, Furniss says, used “laddering” to “sandwich the poor old brand” in between strong private label brands offering appealing or competitive pricing, as well as performance. Retail giant Target, Minneapolis, is a prime example with an “incredible” strategy, he adds. “The overarching impact for brands is that stores aren’t warehouses, they’re brand temples,” Furniss says. “Brands have to align with the values of the store — if you’re cool, pop art, then you’re a great fit for Target, for example.”

With a few exceptions, Seelert says that private label’s “weakness is that a lot of retailers have only mildly upgraded their visual language, and they have not upgraded their brand language or overall innovation.” For brand owners, he says, “The worst thing you can do is fight them with a price dialogue and gearing your communication for the short-term.”

In order to outlast the economic downturn and challenge the solid private label brands in the retail landscape, the consistent message is that brand owners need to focus on the long-term approach to branding.

“All brands can sustain economic uncertainty. Yes, all brands,” Seelert asserts. “Yes, some brands are more transactional than others, and some are positioned in different value-to-premium segments, but my best advice is to gear your branding language and overall communication strategy for the long-term. The temptation is to create impulse shopping and more shopper marketing in your budget, but stay true to your equity and make sure enough of your marketing budget is still centered on equity-building activities.”

Innovating in Every Inning

For the past 10 years, Furniss says, brand owners have been “looking for a needle in a haystack” with an extremely robust focus on innovation. This “hunger for innovation,” he points out, spawned innovation centers, changes in corporate philosophies and an expansive approach to branding, which actually may have been a disadvantage. “The shift now is backing off innovation and getting more disciplined to better understand brands.”

Michael Rudd, business development at Kaleidoscope, adds, “When companies are doing well, they take focus off the core set… but now in the past couple of years, they’re concentrating on major brands and core businesses again. And they may come back even stronger — internally looking at business and spending money on core brands. They will no longer gamble on introducing non-strategic products to the market and see how it goes — they’ll concentrate on keeping core brands alive.”

Perry agrees: “Many of the brands have completely over-extended themselves into categories that don’t make sense or where their equity doesn’t fit,” he says, pointing to brands such as Paul Mitchell that extended into pet care or even Tide Basic, which is a lower-priced alternative to brand giant Tide, but lacks some of the bells and whistles, as well as some of the performance.

Yet while brand marketers certainly are innovating still, it’s happening in a more controlled environment than it has in recent years. “Brands are more grounded in reality now, and they’re being forced to focus on the most profitable and successful brands. Brands will become more powerful,” Furniss says.

Pinch Hitting with Contract Partners

A more focused approach to branding isn’t the only shift in philosophy in recent years. Furniss asserts that as brand owners become more focused on branding, the focus on logistics management will lessen, creating an opportunity for strong contract partners to pinch hit. There will be a “move away from traditional co-packers to more flexible supply chain management,” he predicts.

Brand owners that have reduced or eliminated manufacturing have succeeded, Furniss says. “Their eye has moved away from how do we make this to what should we be making… This has spawned a renewed interest in the manufacturing world in terms of what manufacturers are prepared to do.”

And as brand owners pull back on innovation to stay honed in on core brands, Rudd says the atmosphere is ripe with opportunity for contract manufacturers and packagers to bring innovative ideas to the table, much more so than in the past. “Brands aren’t spending as much on innovation, but they will pick up [a good idea],” he says.

There also is something getting lost in brand teams today. That something — an understanding of technology in manufacturing and packaging — was once an integral part of a brand marketer’s knowledge, Furniss says. “We have a new generation as organizations become more focused on brands,” he says. “Core skill sets no longer exist. Considering how young they often are, they are bright and sharp, but on the flip side, they often have no understanding of technology in packaging.”

There’s a “disconnect between the intellectual side of what it takes to manage and deliver a brand and the tactical side of what’s behind that,” he says.

Rudd adds, “When I first started, we worked in a marketing department with a factory across the road. Eventually you understood the production aspect. Now, you come up with an idea, give it to a packaging manager who may work with someone in China, and they bring it back to you. You never see it being produced. With so little involvement in manufacturing [from brand marketers], contract manufacturers and packaging groups can enlighten brand managers a little more — there’s a lot of opportunity there.”

However Furniss places no blame for this evolution and attributes it to a few factors. For one, he says, the speed in which brands and products are developed is faster every day. There are new options for printing and processing, as well as sustainability developments.

“There is too much to manage — it used to be a narrow and deep trench, but today it changes every 12 months,” he adds, pointing also to digital technology that has created an incredible speed factor.

Traditionally, CPG companies organize with two distinct teams, he explains, with brand teams and creative types on one side, and the research and development, innovative types including chemists, engineers, labs and supply-chain manufacturing pros on the other. “These two circles typically have a big gap in between them with little communication,” he points out, calling them “two adversary forces working against each other.”

With a newer way of approaching business, brand owners have left “a wide gap” for contract partners to fill, and the best-in-class ones will do just that.

Tip to the Trade

Brand and design agencies have a unique position in the CPG marketplace as they, too, seek business with major brand owners as contract manufacturers and packagers do, but for these organizations, bringing the creative element to the table isn’t optional — it’s imperative. Given the creative nature of this relationship, outsourced brand marketers must establish a personal and intense bond with a company and its brands in order to fully understand a brand owners’ mission — they’re relationship must truly be a partnership.

Furniss asserts that contract partners also can (and should) establish this type of relationship: “They should be taking a thought leadership role and seeing them--selves as true partners to brand owners. Part of that is to provide part of the vision to move the brand forward — and that’s not necessarily innovation, but just becoming more aligned as a partner, rather than an order-taker.”

He adds, “Contract manufacturers, packagers, agency partners all need to step up the game and stop story telling — they need to become entrenched in the business.”