Products die but brands can live forever

The obsession with newness seems to have blinded many in the marketing community to the infinitely more valuable payoff of long-standing brands – many that are familiar today have startlingly ancient lineages.

A few years ago I was returning from a marketing conference in America. I had heard speaker after speaker fill their presentations with an unchallenged consensus: that markets were changing very fast, that they were becoming more global and customers were becoming more demanding. As a result, competition was increasing and it was difficult to create enduring value. The ‘product you launch on a Monday is a commodity by Wednesday’.

By the time I was at the airport, I was tired and hungry. As I looked at the beers in the bar, I noticed the age of Kronenbourg (1664). There were also American beers such as Budweiser.

I had never thought about its age and was astonished to hear from the barman that it was at least a hundred years old (launched in 1886 in fact). I knew that Coca-Cola was quite old and resolved to look it up (also 1886, just beaten by Dr Pepper 1885). Later, I wandered into duty free and was again struck by the age of a number of brands we still use today. American whisky Southern Comfort (1874) or Jack Daniel’s (1866) sat alongside perfumes such as Chanel No5 (1925) or watches such as Breitling (1884).

I spent the remaining time before my flight collecting the names of brands that I thought had been around a long time so I could look them up. I have kept going since then and, a decade later, have a long and erratically compiled list that comprises the category, country of origin and start date of brands still sold today.

(Brands from 1850 to 1999 are listed on the attached PDF, page 26-27) I am not an historian nor an academic but there seem to be several obvious implications of this simple list for both the nature of business and the role of marketing.

There are surprises

I was surprised that Bailey’s Irish cream is so new (1974). I was not so surprised by the age of some Champagnes and spirits – Veuve Clicquot (1805), Glenfiddich (1887), Jack Daniel’s (1866) – but I was taken aback by Jim Beam (1795), Rémy Martin (1724), Martell (1715) and Bushmills (1608).

I am astonished at the age of some of the beers that are around today. It’s enough that a relatively new country such as the USA has beer brands hundreds of years old (Schlitz 1849, for instance) but Europe can boast not only of Carlsberg but also Greene King (1799), Guinness (1759), Lowenbrau (1383), Stella Artois (1366) and, astoundingly, Weihenstephan (1040). I have been on many courses in my time, but not one has used a case study of brands created around the time of the Norman Conquest.

I knew that several banking brands were quite old – HSBC (1865), Santander (1857) – but Barclays caused me to raise an eyebrow (1690). I knew that tea (Twinings, 1706) and coffee (Douwe Egberts, 1753) were introduced to Europe in the 17th and 18th centuries but I was surprised by the age of some Chinese tea brands (Pi Lo Chun has been brewed for 1,200 years) and the other drinks – Schweppes (1783), Cinzano (1757) and San Pellegrino (1200) – that are around us today.

Despite all this, I still find the technology brands the most surprising. IBM is celebrating its centenary this year. And it was interesting to find that Philips (1891), GE (1876), Ericsson (1876), Toshiba (1875), HP (1875) and Cable & Wireless (1869) have been moving with technical changes for so long. But my kids were amused by the age of Nintendo (1889) and I was stunned that Otis elevators originated at the time of the Wild West (1861).

The more I collected details about the ages of familiar brands (or brands familiar to their target segments in foreign markets) the more the story of longevity began to emerge. It made the suggestion that it is difficult to create enduring value seem ridiculous.

Brands are amazingly resilient

I have a list of more than 400 brands that were created before 1900 and some that are around 1,000 years old. Some of these entities have been doing what brands do (creating wealth by appealing, in a unique way, to a succession of human beings) for several centuries.

When we are all trying to tackle markets ravaged by recession, surely it is sensible to understand the implications of the fact that brands such as Courvoisier and Heal’s furniture are around 200 years old?

I have never heard a business strategist, a marketing author or a media pundit deduce implications to investment from the fact that familiar entities such as Cow & Gate, Martell, Crosse & Blackwell and Twinings are around 300 years old. And the long life of those beer or food brands (such as Brie de Meaux dating from 774 or Fontina from 1200) should surely attract the attention of not only marketers but also economists and business leaders.

Admittedly, some of these offers may not have had brand characteristics throughout their long life. Some (such as Axminster 1755, Meissen 1705 or Majolica 1405) were originally a description of a regional or geographical skill. It is also true, particularly for luxury goods, that many were run by artisans with a craft heritage and a commitment to quality but perilous financial track records. Nevertheless, this evidence suggests that brand creation is a powerful way to create substantial, sustainable, long-term businesses. It is striking, for instance, to find brands in modern China, that were created several hundred years ago, which have survived both communism and the Cultural Revolution.

Marketers have a responsibility to their shareholders to convince their colleagues to invest in this remarkable approach.

Well-rounded marketing Techniques Build Brands

It would be easy to dismiss these enduring wealth creators as the by-product of long-lost, heroic entrepreneurs, if they hadn’t been created by bog-standard marketing.

Several modern marketing books imply that marketing was created after a ‘sales phase’ and ‘manufacturing phase’ in America around the 1950s.

However, brands such as Pears, Wedgwood, Sunlight (Lever), Heinz, Selfridges, and Coca-Cola were built well before that with techniques including: quality obsession; viral marketing; sustained advertising; PR; celebrity endorsement; international market penetration; clear segmentation; and direct marketing. Histories and biographies (some of which are now rare books or archived correspondence) written about 100 years ago are full of campaigns that we would recognise today.

Dispelling the Myths

The ‘product life cycle’ concept is surely utter nonsense. This irritatingly well-known concept is taught in nearly every course on marketing and appears in nearly every textbook.

Young marketers are taught that the sales of individual products or services follow a pattern over a period of time which can be represented by a simple S-curve. They are born, grow, mature and die. Yet, although that idea has a strong hold on management thinking, and executives can often be heard to talk about their product as ‘mature’ or a ‘cash cow’, it remains unproven and controversial for many products or services.

It is seldom taught, for instance, that after nearly ten years of unsubstantiated assertion, several credible pieces of work in the early 1970s debunked the idea of the product life cycle. In an article in the Harvard Business Review, two planners from JWT (Dhalla & Yuspeh, 1976) pointed out that most advocates of the proposition had little empirical data. They said well-crafted research projects had failed to find a correlation between numerous sales histories and an S-curve. Their article contains several data-driven models that show no S-curve at all in individual products or services.

The knowledge that there are several hundred entities that are hundreds of years old surely also calls this relatively new idea into question. I am convinced that the first question any marketer should ask is ‘can I find any way to turn this into a brand?’ not ‘at what phase is my product in its life cycle?’.

Define The product or service

One way to get seriously rich is by creating a brand. It is remarkable how many of these brands are connected to the vision and determination of one business leader or their relatives.

Later in their life they may have been bought and nurtured by trained brand managers , but names like Wedgwood, Heinz, Mars, Cadbury, Guinness and Singer have earned vast sums because their founders had a vision for a product or service that they built over time.

Josiah Wedgwood would roam his premises smashing poor-quality product with his walking stick and proclaiming it ‘not fit for JW’. Heinz campaigned for quality in food production and Marshall Field was obsessed with giving excellent customer service to Chicago shoppers 30 years before Al Capone was on the scene.

Their passion for creating an offer which served their customers well and their intuitive investment in sustained, high-quality marketing, helped them make, like many brand icons, a fortune.

When asked how he wrenched himself from abject poverty to the 18th century’s equivalent of billionairedom, Wedgwood called his systematic use of branding and marketing ‘the science of money getting’. These brand creators might not have had the terminology available to us today but there is no doubt that they used deliberate, systematic, brand-building techniques to create enormous wealth. Another way to get seriously rich is by buying neglected or orphan brands.

There are many neglected or starved brands that retain a cultural resonance in the memory of large groups of people. Their owners could invest in them to grow their wealth but have neglected them. In some cases this is a result of short-sighted leadership. In other cases it’s because of misguided or misunderstood marketing strategy.

They may, for instance, have been the subject of a portfolio review that labelled them as a cash cow. Terms like ‘cash cow’ are far too easily and sloppily applied and have, sometimes without analysis, prompted firms to neglect or denude brands of capital investment.

To teach young marketers (who are likely to be in any job for a far shorter time than any of the products, services or corporate brands they will handle) that it is routine to take money from long-term successful entities to invest in creating risky innovations is daft and naive.

The fact that smart entrepreneurs have been able to make millions (even billions) by buying up the resultant orphan brands suggests that there is something fundamentally wrong with this approach. It should not take new, visionary entrepreneurs to breath life into them but many have; and they built their own fortunes en route. Bernard Arnault of LVMH, Sir Paul Judge (who led the buyout from Cadbury) and Mika Jatania of Lornamead are just a few entrepreneurs who have exploited the daft strategies of marketers or business leaders in this way.

Commoditisation is not always inevitable

Time and again I hear marketing people talk about their offer as a commodity. In utilities or many technology companies, for instance, it is often an assumption that they cannot do much to their core offer to enhance its perceived value. Why is, for instance, the telephone service of BT so similar to many of its competitors?

Modern brands such as Virgin have shown that it is possible to create wealth through the visionary pursuit of a unique offer. It has created a perception that it is possible to provide an airline, train or broadband service that is truly different. But that is also the lesson of these long-lived brands. I’m not a beer connoisseur and I am sure there is a difference between many of the products, but it is just beer. Why then should Lowenbrau (1383) be able to hold its own against, say, Grolsch (1615) after 400 years?

The message of the great, durable brands is that none of us should accept the idea that commoditisation or price cutting is inevitable. In the face of harsh competition from China or India, many business leaders in the West are assuming that there is no way they can hold their own and command a customer franchise; that you cannot build value in a changing commoditised, international market. Wedgwood, Cadbury, Colt, Heinz and Singer must be spinning in their graves.

Compiling the list of long-established brands has given me a different perspective on our craft. When I discovered that Stella Artois was nearly 1,000 years old and that, in 701, article 12 of Japan’s Ganshi code was consumer protection legislation requiring manufacturers to brand their goods as a quality safeguard, it prompted me to re-evaluate the significance of marketing and branding to wealth creation.

After 30 years of trying to persuade executives not to treat marketing as just an afterthought and to invest in brand equity, it is satisfying to find that one of the most enduring, differentiating and profitable business techniques in human history is ours.

Laurie Young is a writer and consultant. [email protected]

After nearly ten years of unsubstantiated assertion, several credible pieces of work in the early 1970s debunked the idea of the product life cycle