"Even a Coca-Cola has to reinvent itself again and again"
Joachim Kernstock, Head of Brand Management at the HSG, on brand revitalization
Joachim Kernstock, Head of Brand Management at the HSG, on brand vitalizationIn cooperation with the University of St. Gallen, the agency Scotti & Jeanguenin has set up a new series of marketing seminars. Joachim Kernstock, Head of the Brand Management Competence Center at the HSG, kicked off the series with the always topical subject of "Vitamins for the brand". What does the HSG's Brand Management Competence Center do?
Joachim Kernstock: Our competence center is one of several at the Institute of Marketing and Retailing. Essentially, our fields of research are in the area of corporate brand management, in which we have defined six fields of activity: Brand management in mergers& acquisitions, brand management between the various sales channels and media, so-called crossover branding and, increasingly important, branding in services. In addition, there are the three "overarching" areas of responsibility: Brand systems, brand evaluation and the strategic brand development process.
It is becoming increasingly difficult to position yourself in an intensely crowded market. When is a brand revitalization recommended?
Kernstock: In a nutshell, you could say: "Change before you have to." However, brand management is an ongoing process to find the right path between continuity and topicality. Ultimately, I see this as less time-related; it's better to work on it continuously.
What positive examples of successful revitalization can you give?
Kernstock: A positive example is certainly Coop, which is working on this with great commitment and is on the right track. However, we still have to wait and see whether the branding is successful. At a high level, Sixt and E-Sixt are always a good example. If you want to mention somewhat larger turnarounds, Audi is certainly a brand that has achieved an enormous amount.
Why are low-interest brands also well advised to constantly reinvent themselves?
Kernstock: They have to. Milka and Nivea are two classic brands from the "fast-moving consumer goods" sector that are continuously revitalizing themselves and are very successful. I don't think there are so many brands that can always maintain a consistently high level without making an effort. Even Coca-Cola has to keep reinventing itself.
What vitamin cure would you prescribe for the new Swiss airline?
Kernstock: It's a difficult story. The trick will be to build on the high level of trust that Swissair has built up and enjoys abroad. You can't reinvent over seventy years of success in the space of a year.
The carrier, which has been rescued for the foreseeable future, has now embarked on a price profiling strategy that is diametrically opposed to its previous brand values. Isn't there a risk of the brand trading down in the long term?
Kernstock: There's no other choice at the moment, it's the airline business. They have to do everything they can to make money, even if they lower prices in the short term. In the long term, however, it will damage the brand if people become accustomed to this price level.
In recent weeks, the Swiss brand has also suffered in the eyes of the public as a result of various other events - the rampage in Zug and the fire in the Gotthard tunnel. What should an efficient brand communication strategy look like now?
Kernstock: This is a natural domestic view of Switzerland, where the events were perceived extremely sensitively and dramatically, which did not happen abroad. On the contrary: Switzerland has a very positive image in the world. And such a brand image is not destroyed by certain events that are perceived only slightly abroad. I therefore see no need for action.
In the current economic downturn, many companies are cutting back on commercial communication. What are the consequences for such companies?
Kernstock: In principle, this is a short-term optimization that results in a long-term loss of value. Of course, communication budgets can be cut quickly and easily without the effects being felt in the short term. However, it is often the case that it is more expensive in the overall calculation to rebuild what has been destroyed in the short term. However, there are also examples of companies that have started to communicate very aggressively in order to overcome an economic and image crisis. One example from the international arena is the Adidas brand, which carried out an anti-cyclical vitalization push at the beginning of the 1990s. If it hadn't done this back then, the brand might no longer exist today.
From the point of view that necessity is the mother of invention and creativity, one could argue that financial resources are not particularly important for brand management.
Kernstock: Basically, you can say that those who have to work with tighter marketing budgets are very likely to offer more creative solutions. On the other hand, it is also the case that many companies see expenditure on the brand purely as a cost and not as an investment in the brand. This also creates a false image.
You have analyzed brand management in store branding. What challenges do Swiss retailers face on the eve of the market entry of international distribution chains such as Carrefour and Wal-Mart?
Kernstock: I think Swiss retail companies are generally quite well equipped for this entry compared to similar companies in other European countries. But there is always something that can be done. After all, Swiss wholesalers don't just see themselves as distributors of products, but have a certain philosophy that they implement consistently. And that's the right way to go, because the customer wants to feel this. It's not just the shopping experience, which has always been under heavy strain, that is in demand; the relationship with the retailer - which used to be a handshake and local gossip in the corner store - must now be replaced by integration potential. Just as Coop is currently doing to a very large extent. Migros will also have to react to this, but it can also rediscover its myth. Interview: Luca Aloisi
Joachim Kernstock: Our competence center is one of several at the Institute of Marketing and Retailing. Essentially, our fields of research are in the area of corporate brand management, in which we have defined six fields of activity: Brand management in mergers& acquisitions, brand management between the various sales channels and media, so-called crossover branding and, increasingly important, branding in services. In addition, there are the three "overarching" areas of responsibility: Brand systems, brand evaluation and the strategic brand development process.
It is becoming increasingly difficult to position yourself in an intensely crowded market. When is a brand revitalization recommended?
Kernstock: In a nutshell, you could say: "Change before you have to." However, brand management is an ongoing process to find the right path between continuity and topicality. Ultimately, I see this as less time-related; it's better to work on it continuously.
What positive examples of successful revitalization can you give?
Kernstock: A positive example is certainly Coop, which is working on this with great commitment and is on the right track. However, we still have to wait and see whether the branding is successful. At a high level, Sixt and E-Sixt are always a good example. If you want to mention somewhat larger turnarounds, Audi is certainly a brand that has achieved an enormous amount.
Why are low-interest brands also well advised to constantly reinvent themselves?
Kernstock: They have to. Milka and Nivea are two classic brands from the "fast-moving consumer goods" sector that are continuously revitalizing themselves and are very successful. I don't think there are so many brands that can always maintain a consistently high level without making an effort. Even Coca-Cola has to keep reinventing itself.
What vitamin cure would you prescribe for the new Swiss airline?
Kernstock: It's a difficult story. The trick will be to build on the high level of trust that Swissair has built up and enjoys abroad. You can't reinvent over seventy years of success in the space of a year.
The carrier, which has been rescued for the foreseeable future, has now embarked on a price profiling strategy that is diametrically opposed to its previous brand values. Isn't there a risk of the brand trading down in the long term?
Kernstock: There's no other choice at the moment, it's the airline business. They have to do everything they can to make money, even if they lower prices in the short term. In the long term, however, it will damage the brand if people become accustomed to this price level.
In recent weeks, the Swiss brand has also suffered in the eyes of the public as a result of various other events - the rampage in Zug and the fire in the Gotthard tunnel. What should an efficient brand communication strategy look like now?
Kernstock: This is a natural domestic view of Switzerland, where the events were perceived extremely sensitively and dramatically, which did not happen abroad. On the contrary: Switzerland has a very positive image in the world. And such a brand image is not destroyed by certain events that are perceived only slightly abroad. I therefore see no need for action.
In the current economic downturn, many companies are cutting back on commercial communication. What are the consequences for such companies?
Kernstock: In principle, this is a short-term optimization that results in a long-term loss of value. Of course, communication budgets can be cut quickly and easily without the effects being felt in the short term. However, it is often the case that it is more expensive in the overall calculation to rebuild what has been destroyed in the short term. However, there are also examples of companies that have started to communicate very aggressively in order to overcome an economic and image crisis. One example from the international arena is the Adidas brand, which carried out an anti-cyclical vitalization push at the beginning of the 1990s. If it hadn't done this back then, the brand might no longer exist today.
From the point of view that necessity is the mother of invention and creativity, one could argue that financial resources are not particularly important for brand management.
Kernstock: Basically, you can say that those who have to work with tighter marketing budgets are very likely to offer more creative solutions. On the other hand, it is also the case that many companies see expenditure on the brand purely as a cost and not as an investment in the brand. This also creates a false image.
You have analyzed brand management in store branding. What challenges do Swiss retailers face on the eve of the market entry of international distribution chains such as Carrefour and Wal-Mart?
Kernstock: I think Swiss retail companies are generally quite well equipped for this entry compared to similar companies in other European countries. But there is always something that can be done. After all, Swiss wholesalers don't just see themselves as distributors of products, but have a certain philosophy that they implement consistently. And that's the right way to go, because the customer wants to feel this. It's not just the shopping experience, which has always been under heavy strain, that is in demand; the relationship with the retailer - which used to be a handshake and local gossip in the corner store - must now be replaced by integration potential. Just as Coop is currently doing to a very large extent. Migros will also have to react to this, but it can also rediscover its myth. Interview: Luca Aloisi
