Brand Faithful

By CEO Online

One of Australia’s oldest brand custodians reveals some of the secrets behind creating and sustaining brand loyalty.

Entrepreneur	Garry Browne, Chief Executive
Company	Stuart Alexander
Business type	Marketer/distributor of consumer brands
Founded	1884
Employees	190
Head office	Sydney
Contact details	www.stuartalexander.com.au

Key Learning Points

Brand loyalty Changing a brand’s market position - for example, by offering big discounts on the usual price point - can destroy its brand loyalty among customers. However, brands must be carefully updated to fit with changing customer lifestyles. Launching brands  Only 5-10% of new brands survive. To be among the survivors, it is essential to thoroughly research market trends and consumer preferences. Representation  Stuart Alexander prefers to represent smaller, privately held firms that provide a comfortable fit with its own culture. Big international firms could easily become competitors if the brand is a success.

The Stuart Alexander Story

For over 120 years an Australian-owned and operated company, Stuart Alexander, has imported, distributed and, more recently, owned some well-known food and confectionary brands in Australia and New Zealand. Its brands include Rosella condiments, Luken & May biscuits, Mentos sweets, Guylian chocolates and Werther’s Original toffees. Stuart Alexander’s slogan is ‘Building brands is our business’. But its CEO Garry Browne says brand-building can be perilous and consumers unforgiving.
Browne says: “Margins are under pressure and identifying new categories where you can grow and develop your brands is becoming far more difficult. The speed of lifestyle changes among consumers has accelerated and brands have to keep pace. It means you really have to be on your mettle to deliver success for your stakeholders.”
With tough competition and tighter margins, Browne says it can be hard to resist the urge to compete on cost. But he says this can be fatal for some brands. “A brand can become disloyal to its customer base when the brand owner loses sight of the strategy. For example, if a premium brand is moved into a commodity category - competing on price - consumers can become disoriented and may lose trust. The brand’s integrity is muddied or damaged. Brands have to be loyal to their consumers. If you’re not, you can become extinct.”
Stuart Alexander owns well-known brands: Rosella (purchased from Unilever Australia in 2002) and Luken & May (purchased Luken & May in 2003). The purchases gave the company control of the brands’ intellectual property including recipes and logos. This helps protect Stuart Alexander against the risk - inherent in importing and marketing brands owned by others - that the brand owner may come to Australia if the distributor is too successful. Stuart Alexander’s growth strategy is based on having a balance between owned and imported brands.
Launching a brand from scratch requires great care. New brands seem to be introduced every day but Browne says only 5-10% survive. To successfully launch a brand in Australia and New Zealand, it is essential to understand the market dynamics and know the market category, competitors and barriers to entry. New brands require extensive market research and testing, including focus groups. Overseas trends should also be tracked.
Stuart Alexander has strict criteria for deciding which brands are worthy of investment and research. Browne says: “If we see a brand that fits our profile and we are dealing with an overseas operation, the first thing we want to know is whether its culture is similar to that of Stuart Alexander’s. If not, we will go no further. Building brands and developing a business requires good relationships. If you can’t develop a relationship with another organisation because the culture is different, you’re never going to get on. We have knocked back some serious business in the past because we did not believe that we could develop long-term relationships with particular organisations.
“We would also prefer to deal with private companies rather than multi-nationals. With smaller private companies, we have a much longer time to develop their brand and they are less likely to open their own entity in Australia and New Zealand.”
To keep customers buying, brands must fit with customers’ changing lifestyles. Packaging, design, layout and product ranges need to be kept up to date with consumer trends. Rosella, for example, recently introduced new gourmet sauces that fit customers’ preference for fresh and natural products. Browne says: “Contemporising a brand is a bit like reinventing yourself.” But he warns that if you are going to change the designs or ideas associated with a brand, it is important to maintain the brand’s existing values and identity.
Despite the pressures of tighter margins and increased competition, Browne advises that you do what you know best. “Stick to your knitting and focus on what you know. Don’t imitate. Be unique, innovate and create.”


Source:ceoonline.com