Friday, 8 January 2010

What price Gourmet?

Writing for BrandChannel, Vivian Manning-Schaffel ("Condé Nast Considers Licensing To Mitigate Losses", here) explains that, in its quest for fresh revenue streams, publishing house Condé Nast may opt for brand licensing in an attempt to leverage income from titles such as Vogue, or even to resurrect dead titles like Gourmet -- which died last year along with Cookie, Modern Bride, Elegant Bride and Domino.

Manning-Schaffel is sceptical as to whether this strategy will yield fruit:

"Those same luxury publications (well, maybe not Gourmet) met their demise last year because their target audiences could no longer afford their contents.

So now consumers are expected to shell out money for products that are literally, in Vogue? To wit, one source ... said, "DO WE REALLY need Vogue handbags? Gourmet kitchen mitts?"".
The question, it is submitted, is not what consumers can afford, nor what they need. There are two elements to a brand: its allure and its goodwill. The allure is a magnet that attracts first-timers who want to look like Kate Moss, smell like Britney Spears drive like Jensen Button or exude the couldn't-care-less cool of Diesel. This applies in respect of both new and established brands.

Goodwill, in contrast, attaches to an existing product, being the attractive force which brings customers back for more; this is however lacking in any case of brand extension by the original owner or the licensing of the brand to another. You can't simply say, as Cadburys did many years ago, that if consumers like their chocolate bars they will purchase their instant mashed potatoes. Anyone paying licence royalties for non-core uses of Vogue, Gourmet or Domino is taking a big risk, since a brand that doesn't have sufficient gravity to retain custom in the sphere in which its goodwill was initially developed can't be expected to perform strongly in other markets.

1 comment:

Anonymous said...

The distinction between "allure" and "goodwill" is useful and one that I did not appreciate before. Good insight!