Friday, August 8, 2008

The Value of Brand Consistency: Honda vs. Ford

Strong brands can survive scandals (HP's 2006 spying scandal hasn't stopped the stock from outperforming the market), product recalls (Tylenol's famous response to the 1982 product tampering deaths allowed the brand to quickly rebound), and corporate missteps (Coca-Cola has outperformed the market by 200% since New Coke's launch and crash.) In fact, one of the great (and often overlooked) benefits of a strong brand is that it provides a foundation from which to recover from inevitable problems and embarrassments.

If brands can weather corporate scandals, product recalls, and poor business decisions, what can bring a brand to its knees? Nothing destroys brands more quickly than inconsistency. A brand cannot get strong while being inconsistent, and a strong brand that turns inconsistent will falter.

A quick scan of the best brands in the world as valued in Interbrand's annual survey demonstrates the power of consistency. Top brands include Coca-Cola, Microsoft, and IBM--all brands that have had a consistent brand promise and personality for many years. And the brand with the greatest increase in value was Google, which has been a case study of consistency; Interbrand assessed Google's brand value 44% higher in 2007 than in 2006.

The word "consistency" is woven throughout Interbrand's 2007 report: "Google has managed to maintain a sincere and consistent feel to everything that it does," "Starbucks has mastered the challenges of ensuring a consistent sense of ‘Starbucks’ permeates consumers’ worlds," "This sense of focus is also demonstrated in (McDonald's) through its consistent use of the global advertising theme, ‘I’m loving it’," and "By applying a consistent design philosophy based around quality, sophistication and performance, Audi has developed a unique, distinctive personality in the marketplace."

I was reminded of the importance of consistency today while reading a new Harvard Business Publishing article entitled, "Get Out of the 'Middle of the Road'—or Go Out of Business." The author, William C. Taylor , questions why it is Ford is celebrating the 100th anniversary of the Model-T "by posting the biggest quarterly loss in its history" while Honda just reported quarterly profits of $1.7 billion, "a record quarterly performance for a company that’s posted lots of great quarters."

Taylor says that "high-performing companies understand that it’s not enough to be 'pretty good' at everything anymore." Not only do high-performing brands know what they are "the best" at, they stick with it. He notes, "high-performance companies understand that in an era of great turmoil, the best strategy is to stick with what you believe in." He criticizes companies that "lurch from one consulting firm to the next, from one management fad to another, from one target customer base to a different set of customers."

To see the value of patience and consistency, look at Ford's and Honda's divergent performance.

Ford (which dropped from 30th to the 41st most valuable brand between 2006 and 2007) has been on a seemingly endless search to find a model that will catch on with consumers: In 2005 the Ford Five Hundred, Mercury Montego, and Ford Freestyle were introduced and the Mercury Sable and Ford Taurus were pulled; in 2006 Ford Fusion, Mercury Milan, and Lincoln Zephyr were introduced while the Ford Freestar and Mercury Monterey were discontinued; in 2007 the Ford Edge, Lincoln Navigator, and Lincoln MKX were introduced and the The Ford Five Hundred, Ford Freestyle and Mercury Montego nameplates were replaced with the previously retired Ford Taurus, Ford Taurus X, and Mercury Sable nameplates. Is it any wonder that most consumers can't recall the names of new Ford models with this level of constant change?

Over at Honda (the 19th most valuable brand in the world) , the company's best-selling vehicle of 2007 was the Accord, first introduced in 1976. The Civic, the sixth best-selling nameplate in the U.S. in 2007, was unveiled in 1973. The CR-V, which rounded out the list of top 10 selling vehicles in the U.S. last year, was the "youngster," having only been around since 1995. To recap: Honda had three of the top 10 models in the U.S. in 2007, and the average age of those brands was over 25 years!

Taylor shares a comment from legendary management guru Jim Collins, and the comment is as relevant to the disciplines of branding and marketing as to management theory: “The signature of mediocrity is not an unwillingness to change. The signature of mediocrity is chronic inconsistency.”


Anonymous said...

Great end quote.

It's funny, I am a Honda girl myself, and even I was a little unnerved when they came out with the Honda Fit. But now, I'm a huge fan.

Brand loyalty can be a double-edged sword: How do brands please their current followers (who aren't as apt to welcome change) and at the same time attract new customers (who obviously need something different to win them over)?

Most brands I think of haven't really strayed from their trademark... not that they should, but I'm curious if there's such a thing as a truly successful "spin-off."

Augie Ray said...


There are entire books written on the subject of your comment. Marketing history is filled with successful brand extensions, but they must be considered and executed carefully. This is very general to say, but new products have to fit into the brand platform of the brand rather than expand upon it.

The Fit continues Honda's commitment to practical, reliable cars, but it offers something new. It was a good fit for Honda, it seems!