Good Brands White Paper

Good brands in bad times
Reflections on how strong
brands build business in
bad economic conditions
T H I S P R E S E N T AT I O N I S A J O I N T P R O D U C T I O N O F

cut their workforce and have not reduced their
branding activities to an ineffective level.
Instead, each company has supported its
brand strategy in a unique way in order
to remain competitive.
Washington Mutual: Turn Employees
into Brand Cheerleaders
Washington Mutual performed well in
2001 and experienced growth into 2002.
The company reported record earnings of
$3.11 billion for 2001, representing a 52%
increase on a per-share basis compared
to 2000.1 In 2001 Washington Mutual
increased the number of households served
by 16% and added over one million new
checking accounts.2
Since 2001, Washington Mutual stock has
out-performed top competitor Wells Fargo
as well as the S&P 500 Index. Washington
Mutual has the number one market share in
eleven states including Washington and
California.3
Washington Mutual has committed itself to
developing and implementing a strong brand
strategy. “Our strategy is to create a powerful
national franchise for the Washington Mutual
brand, focusing especially on our two leading
consumer financial services industry segments
– consumer banking and home loans.”4
Washington Mutual is “committed to building
a world-class company and a powerful
national brand franchise.” 5 President and
CEO Karry Killinger believes “that all
The purpose of
this white paper
is to demonstrate
that companies
that prosper in
this bleak business
environment
possess strong
and effective
brand strategies.
S T R O N G B R A N D S I N B A D T I M E S | P A G E 2
In times of economic volatility, corporations
are forced to reflect on their core success
factors. Efficiency becomes key to survival,
but which factors separate the struggling
survivors from those who thrive in these
uncertain economic times? Innovative
products and services, exceptional customer
experiences, a direct line of communication
between management and the marketplace,
and long-term as well as short-term strategies
are mandatory.
An effective brand strategy sets thriving
businesses apart from those that simply
survive, or worse, fail. A strong brand has the
ability to influence purchases, foster customer
relations and build trust in the company itself.
However, these benefits do not materialize
without carefully planned and executed
strategy.
The purpose of this white paper is to
demonstrate that companies that prosper in
this bleak business environment possess strong
and effective brand strategies. With focus and
innovation, brand-focused companies endure
difficult economic times and continue
sustainable growth. As examples, we will
examine why Washington Mutual, Whole
Foods Market, Harley-Davidson and
Southwest Airlines have been successful in a
time when their respective industries are
experiencing flat or negative growth. Each of
these companies reported positive earnings in
2001 and growth into 2002. They have not

Washington Mutual
found that...providing
a superior customer
experience is key to
winning customers.
world-class companies have in common the
following characteristics: above average EPS
growth; market leadership in key businesses;
superior growth in new customers as well
as high levels of customer satisfaction and
retention; and strong intangible assets,
including a powerful brand, a track record
of successful acquisition integration and
management depth and breadth.”6
Washington Mutual has been successful due
in large part to the involvement of its
employees as brand cheerleaders. The
company realized that customers were
unhappy with their banks. “In its preliminary
research, the company [Washington Mutual]
found that New York consumers were
frustrated with local services and were
quite willing to switch banks.”7 Therefore,
providing a superior customer experience is
key to winning customers. For this reason,
Washington Mutual has positioned its staff
as the customer’s alternative to bad service.
Bank employees are encouraged to provide
superior customer service both in and out
of the bank. In fact, Washington Mutual
provides four hours of paid time off every
month to employees so they can volunteer
in the community.8
Washington Mutual has supported its
positioning strategy with humorous
advertising that speaks directly to the
customer’s desire for good service from a
company that cares about its customers.
One campaign featured bank employees as
local celebrities. A separate campaign glorified
the callousness of other banks and asserted
that Washington Mutual was the bank with
Human Interest in mind. In 2001 Washington
Mutual’s advertising reached an all-time high
and the company was number one in national
brand awareness among mortgage lenders.9
Currently, Washington Mutual is focused on
its entry into the lucrative New York market.
The company launched a multimillion-dollar
ad campaign, including television, radio,
outdoor and transit advertising. “The strategy
is to out price competitors to appeal to the
value-conscious middle market with no-fee
to low-fee services.”10
The key is backing up brand promises
with solid customer experiences and
planning for future success. “Our
management team firmly believes that
the combination of our customer-centric
philosophy, unique strategy and business
model, growing brand recognition,
innovative ways of serving consumers and
ability to successfully integrate acquired
companies will be a powerful source of future
growth and profitability in the future.”11
Whole Foods Market: Offer an Exceptional
Customer Experience
Whole Foods posted sales of $2.7 billion in
2002 and has reported sales growth of at least
20% more for the past twelve consecutive
quarters. Over the past five years, the
company’s average store size has grown 33%,
weekly sales have increased 42% and average
contribution dollars per store has increased

Whole Foods caters
to a lucrative niche
market by providing
high quality organic
and natural foods
and related products
as well as a pleasing
shopping experience.
roughly 76%. Whole Foods has built a brand
that differentiates the company from its
competitors. “We believe that because Whole
Foods is a differentiated lifestyle brand, we
will continue to be somewhat insulated from
economic slowdown, but we do not expect
to be completely immune.”16
Wal-Mart’s decision to move aggressively into
grocery chain territory has retailers such as
Safeway, Kroger and Albertson’s worrying
about a price war. Unlike these unfortunate
companies, Whole Foods is strategically
positioned to withstand a Wal-Mart invasion.
Whole Foods caters to a lucrative niche
market by providing high quality organic and
natural foods and related products as well as a
pleasing shopping experience. Innovative store
design, cause related marketing programs and
quality private label products promote
customer loyalty.
Whole Foods chairman and founder John
Mackey describes how customers are attracted
to Whole Foods, “we have experienced this in
our markets across the country to different
degrees over the past 21 years and have found
that conventional supermarkets serve as a
‘gateway experience’ to shopping at Whole
Foods Market. The conventional markets help
introduce, create awareness of, and legitimize
natural and organic products to millions of
customers. However, as these customers
become more knowledgeable and committed
to living a healthy lifestyle, they begin to
shop at Whole Foods Market for a broader
selection, better prices, informed customer
service and, overall, a more authentic
shopping experience.”17
Whole Foods focuses on all aspects of the
customer experience including store design,
product selection and customer service.
Most importantly, Whole Foods consistently
delivers on the promises its brand makes.
“It is our authenticity as a wellness lifestyle
brand that is our major competitive
advantage. We recognize this and are very
committed long term to strengthening our
brand by remaining true to our mission,
core values and quality standards.”18
Harley-Davidson: Define and Implement
Target Market Brand Strategies
Harley-Davidson achieved its 16th consecutive
year of record revenues and earnings in 2001,
despite the economic downturn. In fact, the
company outperformed the S&P 500 for
the majority of 2001 and 2002.
The company reported revenues of $3.36
billion for 2001, an increase of 15.7% over
2000 and net income of $437.7 million for
2001 an increase of 25.9% over 2000.19
Harley-Davidson’s 44% share of the large
engine (651+cc) motorcycle market in both
the United States and Canada dwarfs that
of competitors; Suzuki, Yamaha, Kawasaki
and BMW.
Harley-Davidson has earned its large and
fiercely loyal customer base by cultivating the
relationship between the brand and its target

Harley-Davidson
has utilized various
methods of customer
feedback to evaluate
and maintain the
level of devotion
and attachment
for the brand.
market. Harley-Davidson customers do not
simply own a motorcycle. Instead, the brand
becomes a part of the customer’s definition
of him or herself in terms of relationships,
behavior and attitude. “Our customers come
from all walks of life and all corners of the
globe. But that’s not what makes them stand
out in a crowd. They share a special bond –
a passion for motorcycles and a love for
adventure that makes them unlike any other
people on the planet.”20
Harley-Davidson has utilized various methods
of customer feedback to evaluate and maintain
the level of devotion and attachment for the
brand. “We continue to make customer
feedback a crucial part of our product
development and quality improvement
processes.”21
Several key communication methods are used
by Harley-Davidson to connect with its target
market and to create a brand community
comprised of loyal customers. The Enthusiast,
Harley-Davidson’s 86 year-old motorcycling
magazine, has a circulation of 900,000
and growing and is touted as the “oldest
continuously published motorcycling
magazine in existence.”22 The company’s
Harley Owners Group (H.O.G.) boasts
membership over 660,000 worldwide in 115
countries. The company has capitalized on
feedback garnered from these forums and
has offered additional products to further
customize Harley-Davidson motorcycles.
“In 2001 we [Harley-Davidson] introduced
more than 1,000 new parts and accessories,
and we will continue to give customers the
options they rely on to create machines that
not only speak to them, but for them.”23
Harley-Davidson leadership has been
organized to further enhance the focus on
marketing activities, product innovation and
customer service. Harley-Davidson’s senior
management group is divided into three
overlapping functional circles named Create
Demand Circle (CDC), Produce Products
Group (PPG) and Provide Support Circle
(PSC). “The CDC is charged with creating
demand through new product ideas and
marketing concepts, the PPG with turning
those concepts and ideas into reality, and the
PSC with providing the necessary services
to support those activities.”24
Harley-Davidson’s consistent management of
the brand and its relationship with the target
market has resulted in a long history of
growth and innovation. “It is a legacy forged
by generations of people with a passion for
motorcycling, a commitment to honor and
building on the past, and the determination
to seek out new opportunities in the future.”25
Southwest Airlines: Develop and Maintain
Customer Loyalty
In an industry known for its volatility and
economic hardships, Southwest Airlines has
not only endured, it has flourished. Southwest
has been profitable for 29 consecutive years
and is the only United States major carrier
to post a profit during the fourth quarter

2001 and for the full year 2001.26 In fact,
“Southwest alone provides 90 percent of all
discount air travel in the United States.”27
The company’s success has been reflected in
the performance of Southwest stock.
“According to Money Magazine, Southwest
Airlines has the best performing stock over the
past thirty years.”28 Although September 11
made an impact on Southwest’s revenues, the
company’s stock regained momentum shortly
after the market reopened.
Southwest has been successful despite the
turbulent nature of the airline industry by
remaining focused on its employees and
customers as well as being prepared to meet
a variety of economic challenges. “Southwest
has surmounted each such crises during
the past 30 years by being prepared for it.
We pledge to our Employees and to our
Shareholders that, for their benefit, their
continued well-being, and their secure,
prosperous futures, we will always: Be
Prepared!”29 Southwest’s history of
overcoming economic disasters coupled
with its level of commitment to the customer
has assisted in building not only a strong
company, but also a strong brand.
Southwest has cultivated its brand over the
years by remaining focused on the main goals
of the organization as well as the needs and
desires of the consumer. Southwest’s mission
statement says it all, “The mission of
Southwest Airlines is dedication to the highest
quality Customer Service delivered with
warmth, friendliness, individual pride, and
Company Spirit.”30 Southwest has developed
its loyal customer base by not only offering
low fares, but by delivering on its historic
commitment to customer service and
communicating with customers via a variety
of media. Southwest increased its advertising
budget 7.2% in 2002 over 200131 , reflecting
a continued emphasis on the importance of
communicating with customers, especially in
difficult economic times.
Southwest saw the Internet as an opportunity
to connect with customers, cut costs and make
ticket purchasing more convenient. In fact,
“Southwest was the first airline to establish a
home page on the Internet.”32 The website
has already developed a loyal customer base as
demonstrated by the more than 3.6 million
subscribers to Southwest’s Click ‘N Save
weekly e-mail newsletter. Additionally, the
company currently generates roughly 50%
of its passenger revenue from online bookings
on the website. In May 2002, “the Jupiter
Media Metrix named Southwest the airline
that best utilizes the Internet and provides
brand synergy between its main line and
online presence.”33
Southwest also works to provide customers
with incentives they will find exciting, not
annoying. For example, the company’s loyalty
program is the most generous of the major
carriers and “was designed to reward our
[Southwest’s] Customers based on trips rather
than miles. After purchasing and flying only
eight roundtrips on Southwest, Customers
receive a roundtrip ticket, good for travel
Southwest has
developed its loyal
customer base by
not only offering
low fares, but by
delivering on its
historic commitment
to customer service
and communicating
with customers via
a variety of media.

Innovative products
and services,
exceptional customer
experiences,
direct lines of
communication
between management
and the marketplace,
and long-term as
well as short-term
strategies are
apparent for each
of these companies.
anywhere on our system for up to a year.”34
Southwest customers are loyal because they
know what to expect from the company in
terms of service, quality and price based on
their relationship with the brand and it’s
various touch points. The company’s
consistent focus on communication through
a variety of media and its ability to deliver
on brand promises without fail will drive
Southwest’s success, despite the volatile airline
industry. “Our business strategy has served us
well during what has been the most difficult
period in airline history. And while we are
proud of our progress since September 11,
we will continue to work hard to improve
our Customer convenience and maintain
our low costs so that we can continue to
bring the Freedom to Fly to America for
many generations to come.”35
Washington Mutual, Whole Foods,
Harley-Davidson and Southwest Airlines
share many positive traits. Each of these
companies possess innovative products and
services, exceptional customer experiences,
direct lines of communication between
management and the marketplace, and
long-term as well as short-term strategies.
However, their exceptional attention to the
relationship between the consumer and the
brand has secured their success in the hearts
of consumers as well as in the marketplace.

Bibliography
1 Washington Mutual Annual Report 2001
“Highlights of 2001” page 36
“Highlights of 2001” page 36
3 Schiffman, Betsy. “WaMu Wants More”
Forbes September 13, 2002
4 Washington Mutual Annual Report 2001.
“Creating a Powerful National Brand” page 39
“Looking Ahead” page 45
“Looking Ahead” page 45
“We Live Here Too” page 33
9 Washington mutual Annual Report 2001
“We’re like you” page 28
11Washington Mutual Annual Report 2001
“Chairman’s Letter” page 36
12 Pope, Colin. “Whole Foods eats up market”
Austin Business Journal August 9, 2002
13 Whole Foods Market Annual Report 2001
“Dear Fellow Shareholders” page 5
“Dear Fellow Stakeholders” page 8
“Dear Fellow Stakeholders” page 8
19 Harley-Davidson Annual Report 2001
“Generations of Customers” page 26
“Generations of Management” page 14
26 Southwest Airlines Annual Report 2001
“Low-Fare Commitment” page 5
27 Southwest Airlines Investor Relations
“Fact Sheet” www.swa.com
[downloaded January 3, 2003]
29 Southwest Airlines Annual Report 2001
“Be Prepared!” page 4
“Mission of Southwest Airlines” www.swa.com
31 Bloom, Jonah. “Upstart JetBlue Makes Marketer
of the Year” Advertising Age December 9, 2002
“Mission of Southwest Airlines” www.swa.com
34 Southwest Airline Annual Report 2001
“Low-Fare Commitment” page 5
35 Southwest Airline Annual Report 2001
“Moving Ahead” page 6

About our firms
Thomas Zoe Thomas is a San Francisco based
integrated marketing communications agency.
We use the best strategic thinking to create
branding, advertising, public relations, web
and marketing communications solutions.
Our agency was founded on 4 simple truths:
Truth #1:
To capture sales, you need to use imagination
to capture people’s attention.
Truth #2:
You must consider new ideas that people may
want and test them to insure their success.
Truth #3:
You need someone to take the best idea and
make people believe it’s useful.
Truth #4:
A brand is the fulcrum of what you are selling
and what people are buying.
We believe that when we listen to our clients
and their customers, then truly understand
their needs, we deliver the solutions to
increase sales for our customers’ brands.
For more information, please contact:
Ms. Tara Rayder
Partner, Account Director
Thomas Zoe Thomas
2901 Buchanan Street Suite 5
San Francisco, CA 94123
ph. 415 292 3449
em. tara@thomaszoethomas.com
p.s.l. marketing resources is a small and
efficient group of highly trained marketing
professionals. Since our founding in 1987,
p.s.l. marketing has helped over a hundred
different companies - from small to large and
from consumer packaged goods and retail
companies to high tech firms - successfully
address a wide range of marketing challenges.
p.s.l. marketing helps clients make sound
business decisions based on a balance
of creative and pragmatic thinking - while
delivering strategic insights and customized
marketing solutions that are firmly grounded
in practical, real-world experience as marketers
and line managers.
Classically trained with hands-on line
management experience, p.s.l. marketing
is lead by career marketers, not career
consultants. p.s.l. marketing has built
brands for many of the country’s largest
and most successful consumer goods
companies.
Ms. Nancy Pullen
President
p.s.l. marketing
1939 Harrison Street Suite 200
Oakland, CA 94612
ph. 510 451 7266
em. npullen@pslmarketing.com

Acknowledgments
S T R O N G B R A N D S I N B A D T I M E S | P A G E 1 0
Kelly Burke has been a San Francisco
illustrator, airbrush artist and designer in the
art and advertising community for over 25
years. Elegance, simplicity and charm are a
few words that describe Kelly’s style. Her
influences lie in French culture, her California
upbringing, and a love of all things feline.
Her designs for “Kitten,” the wildly successful
beauty products by Benefit Cosmetics,
have been recognized as instrumental in
the success of the brand.
Joy and brightness are at the heart of every
image Kelly creates, capturing both the
eye and the heart of all that view them.
Ms. Kelly Burke
atelier des cinq chats
2443 Fillmore Street, #280
San Francisco, CA 94115
em. kelly@cinqchats.com
Primary writer:
Kristen Colwell
Designer:
Mark Marinozzi
Editors:
Nancy Pullen, Tara Rayder, Mark Marinozzi

Good Brands White Paper

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Good Brands White Paper

Ähnlich wie Good Brands White Paper (20)

Good Brands White Paper