If you made a list of all the things yourbrand is able to do, you’d probably findthat the list is quite long. Now try compil-

ing another list, the list of what your brand wasmade to do. That list is probably a lot shorter.

It makes good sense to examine what yourcompany’s founders intended your companyto do back when they started. What purposedid they want the company to fulfill? Whatdid they design the organisation to do well?What impact were they hoping to cre-ate? A quick audit of some of theworld’s most admired brands —Apple, Nordstrom, Nike, to name afew — illustrates this point quite well.All of these companies continue to dowhat their founders made them to do.

It’s also clarifying to consid-er the timeless appeal ofyour brand. Amazon’s CEO JeffBezos practices this thinking byasking, “What’s not goingto”change over the next 10years?” His company’s com-mitment to three things — thebest selection, the lowest prices,and the cheapest and most con-venient delivery — hasinformed decisions that enableit to thrive while others stum-ble, including having enough

warehouses to meet intense holiday salesdemand. With a long-term view of the valuethat your brand delivers, he explains, youfocus on “more fundamental things” thanthe transitory nature of competition and youdevelop plans that are “durable and meetimportant customer needs.”

The Krispy Kreme doughnuts brandlooked a lot like a great brand in the late1990s. The chain of doughnut shops based in

the Southeast United States dis-tinguished itself by offering afresh, hot-doughnut experienceat most of its locations. Aftergoing public in 2000, KrispyKreme rode a wave of growth,fueling earnings through rapid

national expansion. TheKrispy Kreme experience suf-

fered as a result. In anattempt to continue fulfill-ing shareholders’ expecta-tions for growth, KrispyKreme pursued new distrib-ution points like gas stationsand grocery stores, whichonly ended up detractingfrom the specialness ofKrispy Kreme as a fresh, hottreat. A downward spiraltook hold by 2004 as the

company ended up shipping out so muchproduct that it outpaced customer demand.Product quality suffered, sales and profitsplunged, and the brand’s perception wasdamaged almost beyond repair. Onlythrough its renewed commitment in recentyears to what drove its brand success in yearspast has Krispy Kreme returned to prof-itability and regained the trust of consumersand investors alike.

The challenge of growth

Krispy Kreme is only one extreme example ofa very common phenomenon, in whichgrowth disguises what is in fact brand can-nibalization. As business professor and fran-chise expert Scott Shane told CFO Magazine,“You can often get a [retail] system to growreally large even when particular outletsaren’t really profitable. . . . You might addanother outlet in a market and increase yoursales by 50 per cent, but you might haveturned franchisees in that market from prof-itable to unprofitable.” What looks likegrowth from the outside is actually a setupfor failure. And yet, it’s a fact of life that mostexecutives are under pressure to introducenew products and expand into new areas ona regular basis just to make their numbersand demonstrate their intent to sustain thehealth and valuation of the company. This is

particularly true in industry categories mea-sured on a “comparable sales versus prioryear” basis, like retail and restaurants. Mostof these ad hoc moves are not well alignedwith the company’s overall brand platformand so they tend to detract from the brand’simage. In effect, they spend down thebrand’s equity in little ways that ultimatelyadd up to a big deficit. In some cases, theserevenue-driven moves can undermine thecompany’s other costly brand-building ini-tiatives by sending mixed messages and leav-ing customers confused.

Re-printed with permission. Copyright Wiley.

All rights reserved.

strategist@bsmail.in

The growth-brandtrade-off

Meet the author

> Denise Lee Yohn is an advisor to brandsincluding Frito-Lay, Oakley, and JackIn the Box. She is also the brand directorfor TEDxSan Diego and sits on the board ofdirectors for a branch of the YMCA

> Earlier, Yohn served as lead strategist atadvertising agencies for Burger King andLand Rover and as the marketing leaderand analyst for Jack in the Boxrestaurantsand Spiegel catalogues

> She also headed SonyElectronics first-everbrand office, where she was the vicepresident/general manager ofbrand. Shewas also strategic marketing andcommunications head for Sony’s $3 billionplus personal mobile and imaging division

The strategy to grow is often accompanied by a series of decisions to accept slightly lower levels of quality, whether it is for facilities modifications

or ingredient changes or hiring standards, says a new book

BOOK EXTRACT

DENISE LEE

YOHN

BRAND CONSULTANT

REUTERS

WHAT GREAT BRANDS DO:

THE SEVEN BRAND-BUILDING

PRINCIPLES THAT SEPARATE

THE BEST FROM THE REST

AUTHOR: Denise Lee Yohn

PUBLISHER: Wiley

PRICE: $27.99

ISBN: 9781118611258

Krispy Kremedoughnuts gointo productionat a store inLondon