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Hayes Roth

The Power of Image

Caring for the brand may make or break a company, says the American consultant

Tania Menai, in New York

The year was 1994. One day, two unknown entrepreneurs went to a corporate identity agency and made the following request: “We would like you to create a brand for an Internet browser.” Browser? Internet? Not too many people knew what that was all about. Ultimately, the team of designers at that agency created a white “N” with a fading blue sky and a curvy horizon as background. Through that symbol, the world was introduced to Netscape. From then on, founders Jim Clark and Marc Andersen had nothing to complain about. Many people still don’t know what a browser is, but nobody has any doubt about what the brand stands for.

Hayes Roth, a 50-year old American and the Marketing Vice-President for the Americas at Landor Associates, proudly tells this and other stories. A recent addition to the WPP group through the latter’s acquisition of the Young & Rubicam advertising agency, today Landor is one of the world’s leading corporate identity agency. It was founded in San Francisco, California, in 1941.

Roth studied Journalism but soon realized that he wasn’t nosey enough to be a good reporter. He then decided to enter the world of advertising, working at firms such as Young & Rubicam and Saatchi & Saatchi managing clients who included Procter & Gamble, Merrill Lynch and many others. In 1995, Roth received an invitation to lead Landor’s new corporate identity division in New York. At that time, the office had 40 employees and focused exclusively on packaging. Now the New York team has 130 professionals from different parts of the world, working in a spacious and bright environment surrounded by yellow and blue walls. With 900 professionals spread among 18 offices worldwide, Landor is responsible for the new look of Brazilian companies such as Varig, Bradesco, Basf, and Brasil Telecom. Not to mention clients like FedEx, Andersen Consulting, Lucent, Alcatel, Levi’s, Microsoft, and Compaq. In his Manhattan office, on Park Avenue, Roth received EXAME for a conversation about creating and supporting a good brand – any brand that wishes to last.

The features of a good brand are...

Differentiation, relevance, esteem, and knowledge. These are the four pillars of success for any brand, and differentiation and relevance are the most important ones. Brand knowledge is not enough. For example: Westinghouse, TWA, and Vasp. Although these are known names, the brands lack vitality. Esteem is also not enough in itself, such as the case of Rolls-Royce, a respected but irrelevant brand to many. Esteem and knowledge are within the realm of the advertising agency. Corporate identity begins with brand positioning and works from there to create relevant differentiation. In partnership with Young & Rubicam, we created the BrandAsset Valuator (BAV), a quantitative research tool that measures a brand’s efficiency. We surveyed more than 100,000 consumers worldwide and evaluated 13,000 brands in 32 countries.

What are the best examples according to the study?

Without a doubt, Starbucks, Virgin, and Netscape feature all successfully differentiated – even though not all of these brands were created by us! Brands that convey true leadership include Disney, Coca-Cola, Microsoft, and Nike – and all have passed the test of time. When brands begin to lose their differentiation, such as Blockbuster and K-Mart, they sink into stagnation, such as Holiday Inn and TWA.

What is the definition of decay?

The study covers 64 features that a brand must present. The critical ones are: exclusiveness, innovation, progressiveness, dynamism, and distinctiveness. Those who think that it is enough to project trust, good quality, good values, and objectivity are mistaken. These are important qualities but do not distinguish a brand as a leader. The more efficient a brand is, the more profitable it becomes. And such profits allow you to reinvest in your corporate identity. Companies with stagnated brands are less profitable and therefore experience greater difficulties in renewing themselves.

What is the process of creating a corporate identity?

It begins with interviews, analyses, and conversations with the leadership team about their vision and goals, ultimately working with them to identify their core “Brand Driver™.” Disney, for example, has “family and magic” behind everything that it does. Varig is “Brazil’s Ambassador.” The brand must communicate the country to the world – from the company’s letterhead to its advertisements. If the communication is well executed, it will also influence the behavior of the company’s employees. In addition, the brand must work well in its most powerful application. Levi’s does not survive without its red tag, nor does Coca-Cola without its bottle. In the case of FedEx, the strongest application is the company’s trucks – more than 30,000 worldwide. For Shell, though only 15% of its business is conducted at retail, the brand speaks loudest there. On the other hand, a refrigerator magnet can be a “PowerApp™” for Pizza Hut. A brand that works only on paper does not work at all. The priority is the application.

What are the most powerful creative tools?

Names, for example. Lucent Technologies is probably one of the most vibrant brands of the 90’s. We also created the Touchstone, the Disney film division. We turned Tenneco Packaging into Pactiv; Federal Express into FedEx; and Yes Diamonds into Kirabo, which means “God’s gift” in Ugandan. We did not create AT&T’s blue globe but helped the company with the application of a brand strategy across its various products. We design Microsoft’s packaging, we are revamping the visual side of Hewlett-Packard (according to Advertising Age, HP invested $75 million in the Expanding Possibilities initiative, of which $35 million went to support materials and packaging design) and brought back KFC’s colonel. Surveys indicated that more than 90% of consumers recognized the Colonel’s image worldwide and we recommended building upon that recognition.

So a pretty logo is not enough...

Some companies, those with few resources or little commitment, ask us to design only the logo, especially start-ups. That’s not the best way to use your identity. Designers know how to give life to a brand. But even good brands lose their value and wear off when improperly used. It’s a waste of money. If you are going to spend a fortune publicizing your brand to the world, why not care for it? Normally, those who come to us take their brand seriously.

Is it easier to create a new brand or to revitalize an old one?

In some cases, revitalizing a brand is harder because of the many associations that it carries. Clients ask us not to change the color, the name, the size, and the font, but want a new brand. It is important to consider whether your brand really needs a change.

What are the success stories?

The launch of the $20-billion AT&T telephone equipment division spin-off (according to Competitive Media Reporting, AT&T spent $61 million to launch its new brand). We had three months to create the name and corporate identity for Lucent Technologies. In the case of ITT Industries, the acronym means International Telephone and Telegraph (no longer its business) and the brand was outdated and diffused. The company had been in the hotel, insurance, military telecommunications equipment, and other industries for many years. Since the name was strong, it was not desirable to change it. So, we branded all services under the ITT Industries name with the appropriate sub-brands. Creating brands for new companies is a challenge. Thousands of companies are born each year, especially in the Internet era. Standing out among all of them is neither easy nor cheap.

How about the unfortunate cases?

Those are the companies whose upper management is not committed. Vision must come from above. It is not enough for a Marketing Director to ask us to convince the CEO of the company about the need for a new brand. Without the CEO’s credibility, the change will not bear fruit. Once, we spent a year and a half working on the implementation of a new brand for an insurance company. After research and design, we received the green light from the CEO. When 99% of the work had been completed, a new President took over the company and said “Cancel everything; I don’t like it.”

How important is corporate identity to the business strategy?

If your brand is already strong, it must be at the center of the company’s strategy. If there are strategic changes, it is important to rethink the brand and align it with the new plans. The brand manager should always be the President. And the best example is Jack Welch, CEO of GE. He totally understands the importance of the brand, and breathes it together with his employees on a daily basis. One can say the same about the CEO of Lucent Technologies, Rich McGinn.

How does each country’s culture influence the creation of brands?

That’s an interesting question. There are global brands with which we need to be culturally neutral, which is difficult. Local brands are worked out separately by the offices in each country. All brands must meet a standard established by Landor. Especially when it comes to packaging, since each country has its own rules. Because of that, our creative directors often rotate, heading offices in different countries. This allows them to absorb the culture around them.

Are the brands tested?

Yes, we want to know what the brand and name communicates to people. But it is important to stress the cultural aspect – a brand name may mean something fabulous in one country and sound strange or pejorative in another. We create a list of name options and test them in all countries where the name will circulate. We do the same with designs and colors.

There are people who confuse brand identity with advertising, right?

You may make a mistake in a commercial and pull it off the air immediately. An advertising campaign rarely lasts more than a year; the best ones may span a few years, and reinforce the brand. When creating brands, however, things are different. Once you create a brand, especially in the corporate world, the goal is to make it last a minimum of 10 or 20 years. We must ask: “What will this brand look like ten years down the road?”

Must a graphic designer understand business to create a brand?

He must know the client. Here, designers and consultants work physically in the same area, side by side. In addition, brands are presented to and discussed among the entire team in an open space with colorful couches, in the middle of the office. When a group is meeting, anyone passing by is more than welcome to stop and offer comments. Everyone’s opinions are important. And designers always participate in business meetings.

How is the Internet revolutionizing the market?

Any answer may seem silly in two or three years. We are still learning. It is a new medium, but it is global and it is here to stay. Even when your company provides services only locally, if it is online – and all brands are online these days – you will be forced to create a global name and logo. The Internet has already become a place of business among companies and for consumers. There is no way out: the corporate identity must be efficient and behave well electronically. Many start-ups challenge us when they say to “We have to create a brand urgently! Our IPO will happen in six weeks!” This rush is not synonymous with quality. You need time to think about your business and create an intelligent brand that is not just “cool” for the moment; it must last.

What is the role of corporate identity in the era of privatization?

It is a great challenge. Government organizations do not see themselves as businesses. Therefore, they normally do not have the discipline to focus on marketing and corporate identity. Here in the United States, we spend a lot of time working with public utility companies that are about to be privatized. There is great excitement and fear involved. Many projects end up not going very far because the thinking in these organizations is usually “It’s better not do anything than to create a problem.” Their attitude toward the consumer is “See how lucky you are for having our services?” rather than the business attitude “What can we do to better serve you?” Before changing the brand, these companies must change their thinking.

What has changed since Landor was created in 1941?

The basics of its creation did not change. Walter Landor designed brands that are still alive, such as Levi’s and the red “look and feel” Coca-Cola. What has changed is the manner in which they are developed. Until the early 90’s, all work was done manually. Computers came only later.

How do you charge your clients?

In general, by work phases. Each case is different. It depends on the complexity of the brand and the product. Sometimes a company spends $1 million in an advertising campaign that lasts three to six months instead of using the money to refine and strengthen its brand and make it last at least ten years. It’s a lot of money… but not when measured against long-term value.

Do you approach companies that have a weak brand in need of a make-over?

I’ve tried to do it, but it doesn’t work. Perhaps it works in the case of packaging, because it is easier to demonstrate. In the case of FedEx, we spent a year trying to convince them – and we did. When the effort does not originate within the company itself, especially the CEO, there isn’t much to be done. The passion and the desire to change must come from within.

Is Brazil very behind in terms of corporate identity?

I wouldn’t say it is very behind, but it is behind. The market is turned inward. It is narrow, some companies have difficulties in seeing too far ahead – and, if they don’t do it, somebody from outside will do it for them. The country has excellent professionals, captivating people, and companies that need to find brands that convey what they really are. Some companies are beginning to feel this need.

Do you intend to train a local team of Brazilian designers?

We have professionals who are Brazilian or speak Portuguese working for us in the United States, Europe, and even Hong Kong. That’s not a coincidence; it shows our interest in your country. Yes, we do plan to expand. I believe that new projects, both Landor’s and those of the group to which we belong, will strengthen our commitment to your country. Ask me the same question in six months!

In the near future, what will be the difference between companies that are concerned and those that are not concerned with their corporate identity?

Success and failure.

[ copyright © 2004 by Tania Menai ]