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Specialist Brands And Generalist Brands in Adapting To The Market: Identity And Change10943

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Specialist brands and generalist brands

Is the Renault brand managed the same way as the BMW brand? Is the Galeries Lafayette brand managed in the same way as IKEA? Is the Samsung brand managed in the same way as Sony? The generalist brand offers a broad range under its one name, aimed at covering the needs of all segments of its market sector.

It is ecumenical and open. Its business model is that of capitalising on customers’ durable values: by attracting young people via Clio or Twingo, Renault hopes to win their loyalty and therefore later on to sell them a larger model corresponding to the evolution of their life cycle and the needs that follow from it.

The specialist brand is excluding. It sets itself a particular target market segment, of which people either are or are not part, and builds its range according to that single target. For example, BMW targets people looking to buy a car for more than s20,000.

But a brand is a brand: to manage the brand is to undertake a 360° approach to coherence, to create the perception of a differentiated offer, carrying added values, tangible and intangible. The brand is built, in fact, through the coherence of everything it undertakes.

The foundation of this coherence is the ‘brand kernel identity’, that is, the necessary facets of the brand, those that define its singularity over the long term. Building a brand is first of all a matter of defining very clearly, explicitly and publicly what about the brand is non-negotiable, and what must therefore be transparent in everything it does. This preliminary work, called the brand platform, is necessary to help weigh up the daily decisions within the company and know how to say no. Among these questions we find, for example:

When is a car no longer a Renault?When are client relationships no longer managed sufficiently in the Renault way?What should the welcome at a Renault dealership be like?When does a loyalty programme not carry enough of the values and personality of the Renault brand?Given the Renault values, but also its still poor recognition and reputation worldwide, should Renault continue to invest in Formula 1? We know that Michelin answered no to this question from 2007: in fact, the governing body of Formula 1 wished to have only one tyre manufacturer for all the cars, so that the attention would be placed more on the competition between the different motors than between the different tyres. Nothing is further from Michelin’s deepest values than a competition without competitors.

At this point, a difficulty arises: the generalist business model is based on the widest range, aimed at all market and customer segments. The specialist model is the reverse: it chooses its segments and therefore its customers. The generalist brand is open and adaptive; the specialist brand is exclusive. The generalist brand must therefore adapt to the rules of each of its market segments in order to succeed there. But how can you introduce brand coherence if you must also adapt to the segments?

The temptation, for the generalist brand, is to define such general and bland brand values that they thereby cease to define a singular offer in each segment. The generalist brand then becomes simply a recognised name, a label of quality and no more, but with no aspirational power. In the stores, the salespeople take note: clients are in a hurry to discuss the size of the discount.

They do not nurture any strong intrinsic desire to finally possess ‘a Renault’ or ‘an Opel’. In short, the generalist brand becomes, to use an analogy, a belt from which the models are hung, rather than a pole of attraction expressed by the models. This is why the generalist promotes models (‘the Golf’, ‘the Quashquai’), whereas the specialist promotes itself (‘a BMW’). The generalist turns its models into brands themselves, each with its own personality: not so the specialist. Every BMW is a BMW.

Confronting the risk of the markets becoming humdrum, and therefore of the price-only reasoning that threatens them on the front line, the generalist brand must be boosted with an intrinsic value that is more than the sum of its models. Contrary to the natural catch-all tendency of the generalist, there is a need to give it an exclusive metavalue, a positioning: that is, the power to say no. Being selective means losing short-term turnover, but increasing long-term desirability.

The most instructive comparison is between Samaritaine and Galeries Lafayette. As department stores in Paris, and therefore subject to very high overheads, these two entities had the same enormous requirements in terms of daily visits, since only a fraction of visitors will buy anything. The neutral point is very high. Samaritaine reacted like a store, and closed down. Galeries Lafayette, under the impulsion of P Houzé, reacted like a brand: it took a lead over its competitor Printemps. In 2006, the owner of Printemps, the PPR group, preferred to sell it on to an Italian group.

Samaritaine’s mistake was not to have understood that faced with the many forms of competition in the city centre, but also in the suburbs, it was necessary to focus, to refocus, and to make a choice. It needed to give consumers a greater and more aspirational reason to visit Samaritaine first. Faced with Zara, H&M, C&A and its other competition on Paris’s Boulevard Haussmann, Galeries Lafayette centred itself on a meta value that became the guiding principle of all its daily decisions. Galeries Lafayette saw itself as a ‘temple of fashion’.

To achieve this, from 2000 onwards it pursued a systematic policy of not renewing contracts with all those brands that in its view were not sufficiently in line with its positioning. This was a brave decision in commercial terms: it is easy to imagine the nervousness of the salespeople and shareholders, facing a loss of turnover with no guarantee that this would ever be compensated.

Whereas the now-defunct Samaritaine claimed, ‘You can find everything at Samaritaine’ – that is, refused to do the work of selecting its range under the auspices of a positioning, and continued to think only in terms of breadth and depth of range – Galeries Lafayette made known both internally and externally that you would no longer find everything at Galeries Lafayette: only fashion would exist there, whatever the department. Exit the toy and book department, and others, for the same reason. The new store Galeries Lafayette Décoration et Maison (Decoration and Home) is not a store like any other, either: it says ‘fashion’ on every floor, in every department.

As a just reward for this effort of thinking and acting like a brand, Louis Vuitton decided that it could no longer not be seen at Galeries Lafayette. The fashion brands now jostle one another to get a mention there.

What can we draw from this example? The generalist brand must of course occupy all segments, always assuming that it can exercise its own personal brand imprint there. Will it be able to imprint its strong, aspirational central values there? If not, then it should not go there. Figure below shows clearly that, even if the base of the pyramid representing the generalist brand is larger by definition, all of the models must be ruled by a strong common vision and conception. Of course the models must have personality, in order to be intrinsically boosted by added values, but there must be a leitmotif between them that cannot only be purely formal.

Peugeot is a model of a generalist brand that has understood how much thinking like a brand means imprinting its difference, and therefore its values, on all its models, all its acts and client relationships. From the little 106 to the splendid 607, all have the feline design that has become so characteristic of the brand: but let no one be deceived, the Peugeot brand is not Swatch, where the differentiation essentially comes down to design.

The feline design merely expresses with personality the values found in the brand: audacity, dynamism, aesthetics and reliability. Citroen has also understood how the generalist brand is managed: not like a rake that catches everything, but as a precise, differentiating, aspirational automobile project. Then in each segment the models must each embody each of the three values of the brand’s identity kernel. This is non-negotiable. The brand must also respect, in each segment, the price deciles that correspond to its positioning.

The relationship between brand and products also differs between the two cases. The specialist is by its nature highly typified, identifiable and exclusive. The reverse is true of the generalist. In this way we recognise a BMW immediately from its design, but also from a unique driving experience. BMW expresses the virtues of German engineering. Conversely, a Volkswagen is harder to recognise at first glance. This is not to say that its models do not have common traits: they must do, or they could not all carry the same brand. However, there are many more differences between the models in the Volkswagen range than the BMW range.

Volkswagen, like any generalist brand, sees itself as ecumenical: the car that will attract people looking for a small city car (the Lupo) is not the car that must steal market share from the Mercedes C-Class (the Passat). At BMW, between the 1 series and the 7 series, there are differences of degree only. They are almost all 100 per cent BMW. Each model reproduces and embodies the essential facets of what we mean by BMW, therefore what we expect from a BMW!

Generalist and specialist brands

As a specialist brand, BMW is consequently intransigent regarding the conditions that decide whether a model may be called a BMW or not: there are a series of sine qua non characteristics. The generalist brand is more flexible: the Renault range went from Twingo and even Dacia Logan to Vel Satis.

It is not, however, open to all models. The Renault brand also has its criteria for inclusion and exclusion, but they are designed to enable greater openness towards different types of car buyer: there are sporty Renaults and softer Renaults, estates and minivans, and so on. Volvo is also a specialist brand. Of course it wishes to grow but remain the model, the referent of cars where security, comfort and reliability come first. This also applies to trucks, cranes, public works equipment and so on. By doing this, Volvo cuts itself off from all those customers who do not have safety as a priority. To brand is to choose.

 

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