Last updateTue, 02 Jun 2020 11pm

Applied Marketing 101: Maximizing the power of branded collections

One of my favorite professors at Brown was Dean Hazeltine, whose duties included teaching the only two courses offered in the business realm: Introduction to Management, and Introduction to Marketing. Hazeltine wasn’t a big believer in quizzes and term papers, so the entire grade for both courses came from the score on the final exam, which in the case of the Marketing class was a 24-hour take-home test based on a Case Study. And in 1975, the Case Study was a 36-page analysis of the highly publicized failure of a well-funded company in Boston that had unsuccessfully launched a brand of Lobsters (using a thought process parallel to the highly successful launch by Frank Perdue of chickens sold under the Perdue brand).

The Case Study was chock full of charts, graphs, and interesting information (e.g., did you know that if you put 10,000 lobsters in a tank and one dies, the rate of bacterial transmission from the decaying lobster to the live population will occur so rapidly that 90 percent of the lobsters in the tank will die within 48 hours?). But as I analyzed the data, looking for the single cause - or group of causes - that I could identify as the catalyst for the failure, I came up empty. After 4-5 hours of analysis, I was actually starting to panic, because while I was generally pretty good at solving this kind of puzzle, this time I was totally stumped.

And then it occurred to me, Hazeltine had pulled a fast one on his students. The weighty Case Study, including all the graphs, charts and data, was actually a red herring. The reason the Lobster company had failed had nothing to do with the information contained in the Case Study. Instead, the reason for failure could be found in a fundamental facet of consumer behavior. New England consumers simply couldn’t be persuaded to pay extra for a branded lobster because it was impossible to make the case that branded lobsters were actually better eating than their non-branded cousins. This simple fact killed the company.

I was reminded of the case of the Branded Lobsters again in the mid-’80s while discussing branding with Bill Carey, the founder of Town and Country Jewelry manufacturing, which at that time was the largest fine jewelry supplier in North America. Bill was a genius, and his visionary approach had caught the attention of Mike Milken, the originator of the “corporate acquisition through Junk bonds” theory of business growth. 

As a result, Bill had the funding capacity and manpower to launch as many jewelry brands as he wanted, but he always shied away from this tactic because he generally thought that it was impossible for a jewelry brand to justify any additional marketing cost, owing to his view that consumers couldn’t be persuaded to pay extra for branded jewelry. And while there had been a period in the mid-late ‘60s when mass marketing costs were sufficiently low to allow national brand ID to be created (note than nearly every cereal on the market today aimed at children was launched at that time), the costs associated with positioning a brand in the US market had become so high by the mid-’80s that he couldn’t make the math work in a way that would produce success.

I was reminded yet again of Lobsters in 2005 during my first trip to the March Hong Kong Show, when my employer at the time, Jitu Surani (one of the key family members of the JB Diamonds empire) took me on a tour of Kowloon jewelry stores. Because while it was true that certain American jewelry brands had gained traction (especially bridal brands), the vast majority of finished jewelry in most independent jewelry stores at that time was still unbranded.

Yet as we went from store to store in Tsim Sha Tsui, I was shocked by what I saw, because I immediately noticed that nearly everything in the China stores was branded. And it occurred to me that I was getting a glimpse of the future of American jewelry merchandising, because while Bill Carey was right about consumers being generally unwilling to pay a lot extra, what I was now seeing was jewelry in branded collections that cost no more than their commoditized competition, but had a name, a story, and a tag line that created added perceived value.

What I was seeing was a new formula: the use of a brand name with key product attributes that could be easily communicated by a store sales associate and a counter pamphlet, but where the marketing costs associated with the brand didn’t measurably increase the price.

And then several years later, in key comments on an investor call to Sterling’s CEO, Terry Burnham (whose efforts during his tenure set the company on an extraordinary growth path) made the following comment: “We will no longer sell undifferentiated commodity products.” Burnham was true to his word. In 2000, less than 10 percent of the linear showcase space in a typical Kay store had been devoted to branded collections. By 2012, over 85 percent had become so.

In my view, Burnham and the stores in Kowloon were describing a powerful merchandising path to the future. Note that I’m not referring here to the “Big Brands” like Rolex or Cartier  that have broad consumer ID. Instead, what I’m suggesting is that as you merchandise your store, put increasing emphasis on unique branded collections that you can own exclusively in your home market. Time after time, I’m seeing accelerated rates of sell-through from these brands, because both male gift-givers and female self-selectors will consistently gravitate towards products with a story. And the beauty of social media is that it will allow you to position each branded collection that you carry in your local market at little or no cost.

In addition, I encourage you to adopt a key strategy that I recently saw in a Louis Vuitton store. Each sales associate was wearing a Louis Vuitton cross body handbag - every single one. Now, we all know the Louis Vuitton brand, so the advantage gained in their case is minimal. But if their management thinks it’s important enough to have the staff wearing their products, it seems reasonable to assert that you should employ a similar technique. Consider the fact that the most powerful billboard in your community isn’t out on Route 9. It’s your female sales associates! So when they wear personal jewelry that your customers can’t buy, you’re missing an excellent opportunity both to position important branded collections that you stock, as well as to suggestively sell, especially to clueless male gift-givers who don’t know what to buy.

So as you stock up for Christmas, make sure you’re employing this branded collection strategy. Use social media to position each brand you carry, and use your staff as live models to demo it. Just as important, be sure everyone in the store is equipped to persuasively articulate the key benefits of each branded collection, so prospective buyers will know why to buy it, as well as how to explain to their friends why they bought it, or in the case of a gift recipient, what makes it special. When Christmas comes, you’ll see higher sales, and if you’re lucky and capture the attention of early adopters, the benefits will reverberate well into the future.

Forty-three years ago, I properly reasoned that New England consumers wouldn’t overpay for a lobster just because it had a name. But I can tell you it took more than a little fortitude for me to present Dean Hazeltine with a two-paragraph answer on the final exam. Fortunately, when my grade appeared several weeks later during the summer, it was clear that I had guessed right. I rewarded myself with my first purchase ever of a nice bottle of scotch, a celebratory habit that continues to this day.

Class Dismissed!

George Prout is Vice President of Sales and Marketing for Gems One Corporation, and can be reached via e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it. or at Gems One’s New York office at 800-436-7787.