Remove Negatives to Remain Relevant

The thrust of the brand relevance battle is usually to create an innovation for your offering that adds a

“must have” that defines a new category or subcategory and makes competitors irrelevant. That is the surest way to grow— but not the only way. Another growth path described in my book, Brand Relevance: Making Competitors Irrelevant, is removing negatives: reasons that people use when deciding to exclude your brand from consideration. 

The result can be a major expansion in the market for which the brand is relevant, or the stoppage or reversal of a decline in relevance. Consider the cases of McDonald’s, Hyundai and Wal-Mart. McDonald’s was losing a fight for the all-important breakfast and mid-morning snack. Those who wanted premium coffee were excluding McDonald’s and instead going to Starbucks. The solution was McCafe, introduced in 2007 as an upscale coffee line that included cappuccinos and lattes. It did not pretend to be superior to Starbucks, but it was “good enough.”

In the terms of Kevin Lane Keller, a Dartmouth marketing professor and industry thought leader, it became a point of parity: a feature or offering that the competitors had in common. The coffee was no longer a reason to exclude McDonald’s from consideration and therefore the group to which McDonald’s was relevant was significantly expanded. At the turn of the century, Hyundai was fighting the perception that Korean cars were of poor quality, so programs initiated in 1998 created cars designed and manufactured to deliver high quality.

By 2004, the brand went from near the bottom to near the top of the J.D. Power Initial Quality Study, an annual study that serves as the benchmark for the quality of new cars as determined after 90 days of ownership. The low-quality perception, however, lingered. One approach to changing quality perceptions was to offer an aggressive warranty branded as the Hyundai Advantage, the industry’s first 10-year, 100,000-mile warranty on the power train, marketed as “America’s Best Warranty.” The Hyundai Advantage program not only told the quality story in graphic terms, but also got enormous visibility.

The brand’s quality image got another boost in 2008 when the Genesis, a Lexus-level car, was introduced and won the 2009 Car of the Year award at the Detroit Auto Show. The quality story was supported by well-executed advertising in the Super Bowl, the World Cup and other prestigious televised events, as well as through customer programs like the Hyundai Assurance program, whereby Hyundai offered to buy back any cars if the customers lost their jobs in 2009’s downtrodden economy. There were other negatives for the Hyundai brand. One was an image of having a boring, utilitarian design. The solution was a visible design approach branded as “fluidic sculpture” that resulted in cars that made design an asset rather than a liability.

The second negative, the “foreign-made” stigma that was for some a compelling negative, was reduced by the opening in 2005 of a billion-dollar plant in Alabama. Hyundai went from being an also-ran in the U.S. car market to garnering about a 5% share. Removing negatives was key to the brand’s new marketing position and to making Hyundai relevant enough to prompt about 30% of the car-buying public to consider its models. In the early 2000s, Wal-Mart was boycotted by 8% of the population and had an unfavorable image among others.

This segment was disturbed by its treatment of employees and suppliers, its huge program to buy from China suppliers, its perceived effort to destroy small retailers and its callousness to the urban blight that was associated with some of its new stores. Wal-Mart’s efforts to remove the negatives were ineffective and oft en only served to call attention to the problems. However, the company’s decision to embark on a sustainability program that leveraged its scale served to neutralize the negatives by changing the discussion, by framing Wal-Mart in a different light.

It all started on a camping trip in 2004 when the chairman, Rob Walton, was challenged to become a leader in environmental programs. The result was a major corporate initiative involving employees, trucks, stores, warehouses, suppliers, communities and customers. The goals were to reduce energy use for operations and to encourage environmentally friendly products in the stores. Fourteen networks focusing on sustainability around issues like logistics, packaging and forest products were formed—consisting of Wal-Mart executives, suppliers, environment groups—and regulators helped in sharing ideas and developing programs. A supplier sustainability summit was held in Beijing to review goals and report on progress. The program had resources and priority. Its pace only increased when it was found that it more than paid for itself with cost savings and customer attraction.

The resulting impact on energy use had national significance. Importantly, it also had an impact on the corporate image not by removing the enduring negatives, but by diverting attention from those negatives by changing the dialogue about Wal-Mart. The tendency for all mangers is to try to improve the offering, to add positives, but it may be more productive to address negatives to make the brand relevant to a larger group. However, it is not enough to address the negatives functionally.

There needs to be a way to credibly communicate the improvement of negatives to a group that may have put the brand in the graveyard, a place where communication does not get through. Prospective customers have no reason to learn about a brand that they associate with a compelling negative, so the story of how that brand is addressing the negative needs to be told—and doing visible programs like McDonald’s McCafe, Hyundai’s warranty and design-conscious innovations, and Wal-Mart’s focus on sustainability can help.