Rebranding Strategies: When they can help, when they cannot help – Best Buy
I worked eight years at Kingston Technology, a manufacturer of solid-state memory products, both volatile (DRAM) and non-volatile (Flash). In business 27 years, Kingston is in a commodity space and competes primarily on cost; it has no technology of its own and buys semiconductor chips from the manufacturers.
Kingston does very little marketing, promotion and advertising. Instead, it invests heavily in fulfillment and the customer website is part of their competitive edge when it comes to getting to the product you want, looking at pricing information and delivery; the order entry process is efficient, smooth and intuitive.
Interestingly, Kingston has what I consider an outstanding tagline: “Committed to Memory.” Like all taglines, they must be linked with the logo, products, culture and corporate values (Freeman, 2005) and over time, the cachet and value only builds to form an integrated brand:
Considered the ten best taglines of all time, most of us can readily identify these chestnuts (Klein, 2005):
Top 10 Taglines:
1. “Got milk?” (1993, California Milk Processor Board)
2. “Don’t leave home without it” (1975, American Express, AXP)
3. “Just do it” (1988, Nike, NKE)
4. “Where’s the beef?” (1984, Wendy’s)
5. “You’re in good hands with Allstate” (1956, Allstate Insurance, ALL) 6. “Think different” (1998, Apple Computer, AAPL)
7. “We try harder” (1962, Avis)
8. “Tastes great, less filling” (1974, Miller Light)
9. “Melts in your mouth, not in your hands” (1954, M&M Candies)
10. “Takes a licking and keeps on ticking” (1956, Timex)
Two years ago Best Buy was in transformation, losing executives and market share at the same time. In 2011 a huge push to rebirth the company was undertaken (Zmuda, 2012). Their old taglines of “You Happier” and “Buyer Be Happy” were replaced with “Making Technology Work for You.” Certainly seemed like a step in the right direction. The old taglines weren’t much better than the auto manufacturer whose tagline was “We Put People in Front of Cars,” or Mobil’s “We Want you to Live.”
Taglines should be more than a proverb, more than a motto (Klein, 2005). Taglines should convey the culture of the corporation, it core values and its vision. The tagline should embody what you are promising to the customer and how will you convey that promise?
Educational institutions generally are a good read for taglines to avoid altogether. Like a resume full of generic and predictable action verbs, institutions of higher learning tend to use taglines that include “future,” “excellence,” “challenge,” and “change.” (Millbern, 2012). This is not an effective way to impart the character of your organization.
Back to Best Buy. We now have a couple years that have passed since their huge investment in rebuilding their brand. This included an expensive 2011 Super Bowl advertisement featuring Justin Bieber and Ozzy Osbourne. They retooled and enhanced their offerings in service and support, adding classes and training (Zmuda, 2012). Yet for all this transformation the past four quarters ending May 3, 2014, operating income has averaged only 2.7% of revenue, and since the beginning of 2014 their stock price has dropped by 25% as the rest of the market has been booming.
The lesson is here is that rebranding is no substitute for rethinking an entire business model. The brick and mortar retail stores have been retrenching, shrinking, or failing altogether at an accelerating rate as consumers have moved to online purchasing in droves. Here is a sample of the carnage in just the past several years:
- Abercrombie & Fitch
- Barnes & Noble
- C. Penney
- Office Depot
- Sears Holdings
- Toys “R” Us
Retail stores are facing tremendous headwinds as people are shifting to online purchases. Managing costs, shrinking stores, and trying to eke out whatever profitability might remain in the brick and mortars is a far superior strategy than the idea of “putting lipstick on a pig” and trying on a major, costly and radical transformation. Because after all the investment is spent, the brick and mortars still have no compelling value proposition relative to the online alternatives. ~r
Freeman, K. (2005). Creating strategic taglines. Strategic direction, 21(10), 3-4.
Klein, K. E. (2005). Slogans that are the real thing. Business Week Online.
Millbern, R. (2012). Taglines Are Dead: Who killed them, and how we can bring them back to life.
Zmuda, N. (2012) Best Buy Gets Back in the Game With New Tagline, Focus. Advertising Age, volume 83, issue 26, pages 4–6.
Rodd Mann | mba | cpa | apics cpim | six sigma hands-on-champion