Hilton just introduced a new hotel brand in its Elevated Essentials group of hospitality offerings. The Elevated Essentials category comprises Hilton Garden Inn, Hampton by Hilton, Tru by Hilton and the latest entry, Spark by Hilton. The overarching description of the Elevated Essentials group is “Signature amenities and services in all the places you want to be.” 

In describing Spark, Hilton’s Chief Brand Officer said, “In looking at the economy category, we saw a segment that has grown dramatically but lacks consistency, providing us an opportunity to deliver on the needs of this underserved segment of travelers. True to its name, Spark by Hilton signifies the start of something great – a moment of ignition as we add energy and momentum into the category and deliver the most reliable and friendly stays. This breakthrough premium economy brand will deliver the essentials done exceptionally well for every guest, every time along with friendly service – ensuring all travelers can enjoy a great hotel experience where they feel truly cared for.” 

There are a couple of take-aways from this statement that have consequences for brands.

First, segmenting by price. The hotel industry tends to segment by price. The underlying thought is that there are expensive hotels, less expensive hotels and inexpensive hotels.  Amenities and services are designed according to the price point. This is why the hotel industry market segments are usually labeled Luxury, Upper Upscale, Upscale, Upper Midscale, Midscale and Economy. And, now, Hilton has segmented Economy with a Premium Economy. 

Price segmentation is not customer-centric. Price segmentation makes things clear for the industry, but is of not help to a customer making a decision. Price segmentation is designed for the hotel owners not their guests. Customers do not say “I am looking for a premium economy hotel.” It is doubtful that a customer knows what Upper Upscale is relative to Upscale in terms of services and amenities. Customers want to know that the brand will satisfy their needs, solve their problems and be correct for their situation. No matter how the hotels spin the labels, price segmentation is generic marketing. Perpetually focusing on price is a pathway to commoditization. 

Second, price segmentation leads to the mistaken mismarketing idea that there is a value segment. Low price and best value are not the same thing. Focusing on low price reinforces this unfortunate idea that there are “value conscious” customers versus “non-value-conscious” customers. This is simply not true. Everyone is value conscious. Customers buying a Mercedes S-class believe the vehicle is a good value for them. Considering their situation, these drivers believe the vehicle is the best value to satisfy their needs. Likewise, the Kia customer think Kia is the best value to satisfy their needs. The customers shopping for an engagement ring at Zales think the value is excellent as do the customers shopping for an engagement ring at Tiffany’s.

Persistent focus on low price at the expense of great brand can quickly demean the brand. 

Third, relevant differentiation is more than features or attributes of a brand. A brand is a promise of a relevant, differentiated trustworthy experience. A brand experience consists of functional, emotional and social benefits. The brand experience also reflects the users’ values and their perceived, appealing brand personality. A brand’s features are the proof of the functions, benefits, customer values and brand personality. Focusing on features alone is death-wish marketing. Features can be copied. The brand experience cannot. 

Furthermore, in the hotel industry, a focus on features creates mystifying relevant differences among brands. The brands in the Elevated Essential group tend to just restate the same features.

Spark by Hilton

Spark by Hilton has this brand promise: “Practically inspired. Simply delightful. A budget-friendly stay offering the best of everything you need, done just the way you want.”

Spark by Hilton’s elements are: thoughtful simplicity, reliable service, unexpected touches and consistent quality.

Hilton Garden Inn 

Hilton Garden Inn: “Offering upscale accommodations and unexpected amenities to open up the brighter side of travel and out the best in you.”

“Our goal is to make your stay better and brighter. If something isn’t just the way you like it, simply let any hotel team member know, and we’ll make it right. Guaranteed.”

Hampton by Hilton 

Hampton by Hilton: “Always delivering an exceptional experience you deserve with thoughtful service, free hot breakfast and a warm, friendly smile. Every time.”

Every Hampton Inn and Hampton Inn & Suites is committed to the 100% Hampton Guarantee providing an exceptional guest experience and consistent, high-quality accommodations and amenities.”

Tru by Hilton 

Tru by Hilton: “With free pancake breakfast, a playful lobby packed with games and cozy nooks, and fun-sized rooms, you’ll get true comfort and more value.”

“At Tru, we’re rethinking hotel design to deal in trade-ups, not trade-offs. That means more space to spark creativity, more opportunities for connection and thoughtfully redesigned guest rooms that concentrate on comfort. Add in a must-see lobby and you’ve found your favorite cost-conscious hotel.”

Hilton believes that Spark by Hilton reimagines the economy category. And, maybe it will. But, the best way to reimagine the brands is to develop brand positionings that are meaningfully differentiated across a need-states occasion-driven landscape where everyone is viewed as value-conscious and price is a strategy.

In its latest earnings call, Beyond Meat articulated a three-step turnaround plan.

Observers, investors and analysts agree that Beyond Meat is a troubled brand-business in need of a turnaround. In yet another analysis of Beyond Meat on CNN, there was the familiar litany of issues. As CNN points out, Beyond Meat is facing a “waning” of interest in plant-based meat products. Part of this is due to price points and customers’ desires to fall back on less expensive alternatives. With prices high, people have been cutting back on dining out. This impacts Beyond Meat’s non-grocery channels. There have been some C-suite resignations. And, there has been a recent report on the hygiene of a processing facility in Pennsylvania. Adding to these woes is the fact that McDonald’s has not added the highly touted McPlant burger to its menu in the US, while Dunkin took its Beyond Sausage breakfast sandwich off its menu.

CEO, Ethan Brown reiterated most of these issues in the earnings call. Mr. Brown stated, “As consumers intensify (their) focus on making ends meet, health and environmental considerations take a back seat. This phenomenon makes it more difficult to broadly convey our core value proposition to the consumer.

“To summarize the current situation, we face an economy where blistering inflation pressure is shifting consumer behavior in the grocery store, category where competition has dramatically increased despite a broad and precipitous category slowdown and a consumer base whose focus understandably turned to fulfilling immediate basic needs of pursuing the broader benefits that represent our core value proposition.”

In a turnaround plan, the first step is to stop the bleeding. Mr. Brown stated Beyond Meat must “…significantly reduce operating expenses, while focusing on a more narrow (sic) set of strategic partner, retail, and food service opportunities and utilizing lean value streams across our beef, pork, and poultry platforms.”

Second, Beyond Meat will “… aggressively manage down inventory and rationalizing our production network..” This is due to “…more moderate volume assumptions to improve overhead absorption, address underutilization fees, and support margin improvement.”

And, third, Mr. Brown indicated that Beyond Meat would apply “…a laser focus to our sales and marketing activities, emphasizing those opportunities that we believe strike the right balance between restoring near-term growth and nurturing our most valuable long-term opportunities.” This means “restoring growth in retail and food service, through a series of targeted innovation, sales and marketing execution.”

All of these are important strategies. When a brand-business is in trouble, focusing on Financial Discipline, Operational Excellence and Leadership Marketing are critical for a turnaround. 

Financial Discipline is priority number one. Make money. Get back to profitability. Eliminate waste. Improve productivity. Every brand needs to earn the right to continue to grow. Financial Discipline is more than cost cutting. It is also a focus on building brand value. Cost cutting takes you only so far. Brand value contributes to quality revenue growth.

Operational Excellence means focusing on delighting customers so that an increasing percentage of customers look forward to purchasing more often. Operational Excellence involves creating an efficient and effective balance between meeting customer expectations and minimizing waste. When managed properly, Operational Excellence both decreases costs and improves customer satisfaction. And, this in turn helps generate quality revenue growth leading to brand value.

Leadership Marketing means focusing on building the relevant differentiation of the brand. Innovation and renovation are important. But, so is clarity of the brand’s Purpose and Promise, both internally and externally. Articulating the brand’s Purpose and Promise help to increase brand value.

Thus, here is what Mr. Brown’s turnaround plan lacks. There is no mention of the brand-business’ Brand Promise. Mr. Brown does suggest that there must be better communications of the health benefits of Beyond Meat. And, there must be a better connection between the brand-business and its role in sustainability. These are about the brand’s Purpose. But, there is nothing about the brand-business’ Brand Promise. And, the CEO of Impossible Foods is saying exactly the same thing. 

Beyond Meat has not created a relevant, differentiated brand promise. Without a relevant, differentiated brand promise, a brand tends to fall into commodity corner.

A Brand Promise summarizes in a brief statement the special contract that exists between a brand and its customers. A Brand Promise describes what the brand is intended to stand for in the mind of a specific group of customers or prospective customers. By consistently living up to and delivering the Brand Promise, a brand will be relevant and distinctive. A Brand Promise is something that a brand continuously strives to achieve. It is a future-focused description because it states what the brand will do for its customers. 

A Brand Promise has three components: the Brand Claim, the Brand Character and the Brand Support. The Brand Claim is the combination of functional benefits, emotional and social rewards: that is, “what does the brand do for me?;” “how do I feel when the brand does this well?” and “how are my social interactions and connectedness enhanced when the brand does this well?”  

The Brand Character reflects the values of the customer (that means, who is the person we wish to have as a loyal customer?) and the brand’s personality (if the brand were a person, what would be those traits most compelling to the target customer?). 

The Brand Support is the combination of relevant, differentiated features that are necessary to bring the Claim to life for those with the articulated Character. Identify the Brand Support only after the Brand Claim and Brand Character are identified.

The role of the Brand Promise is multidimensional. First and foremost, it defines the brand. Brand Promise defines the parameters for all development, communications, innovation and renovation on behalf of the brand. Brand Promise must be a motivating, relevant, differentiated description of the brand experience that you want the brand to deliver. Consistently living up to this Promise is the way customers perceive the brand’s performance quality. 

The Brand Promise is an internal force as well. All employees must know and understand the Brand Promise. They must be able to define it and deliver it, day after day, for every customer. Regardless of function, employees must know what they need to do to live up to the brand’s Promise to its customers.

Beyond Meat has had and still has many operational issues and retail challenges.

It is a mistake to believe the Brand Promise can fix everything. But, it is also a mistake to believe that Brand Promise is a mere marketing construct. Not only does Brand Promise define the total brand experience, it is a galvanizing force within the brand’s organization. 

A brand is a multidimensional, multilayered, multifaceted relevant differentiated idea. That idea is the Brand Promise. And, since a brand is a promise of a relevant, differentiated experience, the Brand Promise is key. This is especially true for new brands and for brands in intensely competitive market spaces.

Beyond Meat has never clearly differentiated in a relevant manner from its original competitor, Impossible Foods. That was a mistake. Now, that quality plant-based meat and chicken alternatives are taking up a lot of grocery refrigerated and frozen spaces, being known for something special is a make-or-break necessity.

Being first in a category does not matter if entries that follow are relevant and differentiated and high quality. Beyond Meat could have an amazing relevant differentiated Brand Promise. If the brand-business’s management team starts to focus on brand-business revitalization, let’s hope this time the focus is on the brand.

In June of 2011, a retail sea change occurred. Storied brand, J.C. Penney, hired Ron Johnson, who led the success of Apple’s brick-and-mortar stores. Mr. Johnson decided that one of Penney’s problems was that the brand was damaged due to its consistent focus on deals and low prices. Without any Penney core customer insight, the pricing at Penney’s was changed. Using Apple as a model, the overhaul of Penney’s was something that turned off core customers. There were brand management lessons to be learned from the Ron Johnson tenure.

Fast forward to April of 2019. At another retail giant, Bed, Bath & Beyond hired Mark Tritton from Target. Mr. Tritton developed a turnaround plan for Bed, Bath & Beyond. Using Target as the model. Mr. Tritton’s alterations were not focused on core customers. So, the changes were startling for Bed, Bath & Beyond’s core base loyalists.

By February of 2022, it was clear that the strategies designed by the CEO of Bed, Bath & Beyond were not working. To complicate matters, Covid-19 had messed up supply chains and altered customer buying habits leaving stores like Bed, Bath & Beyond with limited merchandise or the wrong merchandise.

Now, we have just experienced Black Friday shopping day. Going into Black Friday, the business press indicated that of all the big box stores, Bed, Bath & Beyond was suffering from empty shelves. 

According to analytics firm DataWeave, and as reported in The Wall Street Journal, Bed Bath & Beyond continues to struggle with keeping its shelves stocked ahead of the holidays.  More than 40% of Bed Bath & Beyond’s inventory were unavailable in October 2022. This is nearly twice more than October 2021.

The report added that Bed Bath & Beyond had higher out-of-stock rates in October 2022 in comparable items than other retailers.

There is nothing more dismal and off-putting than empty shelves. If you need proof of that, step into one of the remaining Sears stores. Empty shelves are not just depressing but they are just dreadful for a brand’s customers’ perceptions and the brand’s value.

While many stores suffered from supply chain issues, at Bed, Bath & Beyond, these were severe due, in part, to the new Tritton strategies.

First, Mr. Tritton focused on limiting the number of price deals.  In 2021, Bed, Bath & Beyond decided to stop a lot of its print circulars that generated store traffic. Similar to the switch to everyday low prices instituted at J. C Penney during the tumultuous tenure of ex-Apple store maven, Ron Johnson, Bed, Bath & Beyond stopped coupon-generated and flyer-generated deals. The idea was to become less dependent on dollars-off shopping.  Mr. Tritton also wanted price parity with its competitors. 

Retracting circulars was a minor disaster. As with Penney, knowing the customer base could have avoided this kind of crisis. Bed, Bath & Beyond customers did not see the deals as brand degradation. They saw the deals as part and parcel of the brand. The deals were things they loved about the brand. 

Print circulars and mailers were mainstays of the brand for decades. Customers missed the circulars; store traffic dropped. When Mr. Tritton’s team finally recognized that circulars needed to be reinstated, Covid-19 paper supply issues along with labor constraints meant the brand could not print the circulars fast enough.

Second, Mr. Tritton, following the Target playbook, began a program creating own brands

Although an initial expense, private label brands are money-makers if handled properly. The Wall Street Journal has pointed out that private label brands, “… are no longer the cheap knock-offs you keep hidden in the back of the cupboard, but quite possibly the tastiest deals on the shelf.” Referring to Whole Foods’ reincarnation of the 365 brand and Target’s innovative private label creations, The Wall Street Journal stated private label brands are “… casting off their bland reputation and transforming themselves from dull to desirable.”

Mr. Tritton’s Target experience was that own brands are an essential, profitable revenue source. Adding more private label brands became a priority for the Bed, Bath & Beyond brand. In addition, Bed, Bath & Beyond created a partnership with Kroger Co. whereby Kroger will sell some of the Bed, Bath & Beyond private label offerings.

Mr. Tritton indicated that the own brand portfolios would consist of products in home décor, laundry, bathroom and kitchen, according to a Bloomberg BusinessWeek report. 

Own brands require manufacturing and supply. Manufacturing and supply were hard hit by coronavirus. It became nearly impossible to have these private label brands on the shelves. At the same time, the national brands were gone.

Third, Mr. Tritton focused on updating Bed, Bath & Beyond’s technology.

New technologies are always a winning issue as these technologies can make life easier for shoppers. 

At the time, retailtouchpoints.com reported that Bed, Bath & Beyond’s technology upgrade program was designed to “… support improvements in merchandising and inventory management, product lifecycle management, retail space planning and optimization, the launch of additional private-label brands and real-time tracking of merchandise fulfillment with the supply chain.” The technology changes were also designed to make shopping easier for customers.

One of the lessons of Covid-19’s supply chain problems is that real-time inventory practices create empty shelves and deficits in other critical items necessary for manufacturing. In an earnings call at the time, Bed, Bath & Beyond admitted that its poor quarterly performance was due to a “… compromised customer experience” when customers could not find what they wanted on its shelves. As Mr. Tritton said, there was demand but limited availability.

Bed, Bath & Beyond stated that the supply chain issues cost the brand $100 million at the November 2021 end of quarter. The December 2021 results were equally bad. Upgraded technology focused on pandemic-fueled customer needs such as e-commerce, curbside services, in-store pick-up and same-day shipping. Of course, if there is limited product availability, these services become moot.

Finally, Mr. Tritton made a classic marketing mistake by not focusing on the core customer base. 

Keeping core customers happy and loyal is essential at all times, and, most especially, during troubled times. The changes that were instituted were not based on core customers’ problems and needs. These changes were made based on Target customers. 

Further, the changes at Bed, Bath & Beyond did not match the changing behaviors of core shoppers.

One of bright spots in post-coronavirus marketing has been the Penney ads with core customers saying what they love about the brand.

Hopefully, this iconic retailer will have made it through the holidays with its brand intact. The problems at Bed, Bath & Beyond were self-inflicted. With Bed, Bath & Beyond’s Board of Directors recognizing the missteps, Mr. Tritton is now gone from Bed, Bath & Beyond. Of course, the supply chain was a disaster for many retailers, but from a brand standpoint, the brand mismanagement at Bed Bath & Beyond was extremely damaging. Brands can live forever, but only if properly managed. 

A powerful brand is the consistent identity of a trusted source. A powerful brand reflects its trusted reputation for quality, leadership, and integrity, underpinning all stakeholder relationships.

A powerful brand is not merely a marketing concept. It is not an academic theory. It is not a line in an advertising slogan. A powerful brand is an asset. A powerful brand is an asset on a company’s balance sheet. A powerful brand is at the very core of accounting’s Goodwill. A powerful brand is valuable.

When a brand’s power diminishes, so does its economic value.

The back-and-forth decisions, the double-talk, the public real-time musings, the threat of bankruptcy are all eating away at the Twitter brand. Its brand power is draining away. Although never at the top of the lists of the world’s most powerful brands, since its inception, Twitter has had powerful global impact, politically and socially. 

The frightening vacillations at Twitter are having a deleterious effect on the brand, its brand power and its value. At the same time, driving the chaos is the reality of funding the $1.2 billion annual interest payment on its $13 billion debt load.

A powerful brand relies on four “must-haves”:

• Be a credible source
• Have an excellent reputation 
• Be a pillar of integrity
• Have a responsibility ethic

Be a credible source

• Being a credible source means that all stakeholders – from investors to analysts to employees to users – have confidence that Twitter provides true information about itself. Although now a private company, Twitter still has an array of stakeholders. Being a credible source also means that Twitter will consistently deliver on its promises. Research shows that when brand is perceived to be a credible source, stakeholders believe that the brand’s past actions can predict its future behaviors. 

• Discussing the fiasco of the $8 blue check system where some people were pretending to be celebrities and brands, a director at the Atlantic Council’s Digital Forensics Lab told The New York Times that “… the quality and credibility of content on Twitter could suffer if fraudsters created confusion and amplified lies.” Senator Edward J. Markey of Massachusetts said, “Selling the truth is dangerous and unacceptable.”

• It is an imperative to be perceived as credible. Communications from highly credible sources are more persuasive. A credible brand acts as a “quality” cue lessening customer-perceived risk during customer decision-making. There are data to show that credibility makes decision-making easier. This is because the customer trusts the authority of a credible brand-business. Changing plans every day does not foster credibility. And, firing the entire communications, marketing, celebrity partnerships and human rights departments leaves the brand at a credibility disadvantage.

Have an excellent reputation

• Having an excellent reputation means consistently and continually behaving in a quality manner. Reputation is all about the brand’s accomplishments. Reputation is based on the brand’s past. Think of reputation as the “collective representation” of a brand’s past actions and results. For the finance community, reputation means that the brand has been able … and will continue to be able… to deliver valued outcomes to multiple stakeholders. Whether you like Twitter or not, it has had accomplishments.

• Reputation is the collection of stakeholder perceptions over time.  As with value, reputation is determined by the perceptions of stakeholders. Twitter does not determine its reputation. Twitter’s reputation is in the eyes of the beholders.
• Reputation can increase business performance. This is because a great reputation helps sell offerings at an increased margin and can help leverage a sustainable competitive advantage. Having a great, positive reputation would be of enormous value for persuading advertisers to come back to Twitter. A powerful brand’s positive reputation alters preference. A strong, trustworthy business reputation contributes to high quality revenue growth. 

• Losing a brand’s reputation is sinful. It is self-destructive brand mis-management.  When a magazine like Playbill cuts ties with Twitter, it is time to take action.  The CEO of Playbill indicated that in recent weeks, Twitter’s reputation for tolerating “hate, negativity and misinformation” left Playbill no choice but to remove its advertising and focus on Facebook and TikTok platforms.

Be a pillar of integrity

• To be a pillar of integrity, a brand must make sure that at the core of all actions and behaviors, internally and externally, are the best interests of stakeholders and other constituencies. Integrity means that stakeholders and constituencies view the brand as fair, impartial, open-minded and just across all brand actions. Integrity refers to the brand’s core values and purpose: its guiding principles, and its reason for being.

• Being a pillar of integrity means the brand recognizes that its relationships with all its stakeholders are valuable. Research indicates that responding to stakeholders with positive actions provides differentiation and/or cost advantage. This ultimately enhances a brand’s overall brand performance.

• When the individuals responsible for oversight of internal and external relationships are fired or have quit, questions arise as to the brand’s commitment to integrity. When advertisers are wooed and reassured in person but whacked behind their backs, questions arise as to the brand’s integrity. The New York Times stated that Twitter threatened advertisers with “thermonuclear name and shame” if the brands cut off their advertising.

Have a responsibility ethic

• Having a responsibility ethic means being an effective global citizen behaving positively on behalf of people, communities, nations and planet. Twitter had important roles to play in global events such as the Arab Spring revolutionary waves.
• Being ethically responsible can influence brand preference as the brand’s reputation influences purchase decisions. People are more vocal in supporting businesses that “do good” while boycotting or publicly berating those perceived to be “not responsible.”
• Playbill’s CEO pointed out that “… the line between actual news and insidious rhetoric…” had been blurred by Twitter’s recent actions. Saying it was a “respected news outlet for the Broadway community,” Playbill was essentially saying that Twitter was behaving irresponsibly.

If Twitter’s goal is to become a digital global town square where people discuss “a wide range of beliefs,” then being a credible source with an excellent reputation, integrity and a responsibility ethic are necessities. Making Twitter a profitable “trusted source of information and a haven from toxicity” does not happen in a vacuum. Brands can live forever but only if properly managed.