The latest Barrons has an interesting little sidebar article titled Bargain Bin?—Buying Into a Name.
It discusses a recent New York auction of business and product names that drew a "paltry crowd and pallid bids". The article mentions that despite the fact that rights to 150 names had been amassed by the seller, including iconic brands like Handi-Wrap and Infoseek, only 50 people attended the event.
Here are a few excerpts from the article:
"What's in a name? If it's Continental Illinois, the grandaddy of all bank bailouts, the name goes for $1,500. For Shearson, the old-line brokerage and investment firm bought in the 1970s by Sandy Weill on his way to becoming one of Wall Street's most powerful bankers, the price is a considerably higher $45,000."This got me thinking about brands in the HR marketplace. In B2C a brand can quickly develop negative equity and lose value fast - just ask BP. But it's unlikely that a B2B brand will ever carry such negative equity.
"Given that it can cost $5 million to launch a brand, the sums offered seemed downright paltry."
"Credit Suisse analyst Michael Exstein recently wrote that Wal-Mart was able to gain market share when it bought the White Cloud name for tissue from Procter & Gamble in 2000."
There are a number of reasons why. Relatively few HR brands have widespread recognition - even in the HR marketplace. And the relationship that B2C buyers have with brands tends to be more complex and emotional compared to those of B2B buyers.
A lot of HR vendors spend a lot of money on brand building campaigns. But putting excessive marketing dollars into building brand awareness in HR does not guarantee success.
This is not to say that a professionally developed brand is not important for a B2B HR vendor. It absolutely is - just not as important as it is for B2C brands.
We'll discuss this topic in great detail in Q1 when we release a new HRmarketer eBook on the subject of making marketing allocation decisions in B2B.
The eBook will help marketers understand how each marketing tactic influences buyers as they move through the classic purchasing stages of Awareness, Interest, Information Search, Evaluation and Purchase.
Most marketing fails because of bottlenecks that occur along this purchasing process. One of these bottlenecks is between Awareness and Interest, often related to companies overspending on brand awareness tactics at the expense of tactics that move buyers through Interest, Evaluation and Purchase. Start-ups tend to be most guilty of this.
The most challenging decision for marketers is deciding how to allocate the marketing budget. It used to be easier simply because we had fewer choices .
Then came the Internet.
Then came social media.
So it's not surprising that a lot of companies don't get the marketing spending mix quite right. It's one of the top pain points of CMOs regardless of company size or industry.
Post by HRmarketer CEO Mark Willaman. Join Mark on LinkedIn and Twitter.
Labels: eBook, marketing allocation, marketing mix