Some major brands use the fact they are owned by a family business as a selling point, whereas others prefer to keep it a secret. But which tactic is more successful? Jane Bainbridge explores the pros and cons of marketing a business as family-owned.
Customers will choose to use a particular product depending on what they perceive about the company they are buying from. So, when companies are creating a brand they must decide what they want their customers to believe about them. Building a brand involves building a promise and then delivering on that. It is by delivering on these promises that customers choose one product or service over a competitor.
For family-owned businesses, this means they have to determine whether it will be beneficial to their sales and
positioning to trade on their heritage in the marketplace.While there are a few notable companies that use their family status in their marketing to greater or lesser degrees – SC Johnson, Coors, Baxters and Warburtons to name a few – there are many big companies that avoid this route.
What is evident is that there are no hard and fast rules as to which route is the better. There are a myriad of factors to take into consideration.
The family benefit
The first thing to determine is what "family" is shorthand for and whether that benefits the company, says Michael Levy, director of strategy at brand consultancy Corporate Edge. For many, the word "family" implies small-scale operations.
This may benefit some businesses, even if they are actually large operations, but for others it might imply a less scientific approach to production. Levy argues that for a car company, or one operating in medical science, bringing the family heritage to the forefront would not necessarily improve that brand's image. It might raise concerns among customers, for example, that the company was not technologically advanced or that the right level of precision is being applied.
"But for something like food, which has emotional values, then the family connection might be able to help," he says.
Other attributes that "family" might be shorthand for are clearly positive. In many ways the brands that family companies sell and the company itself are seen as genuine. Instead of being purely a marketing device, they are seen as something that has the benefit of history and longevity behind them. The connection to real people gives it a reassuring air and a feeling of authenticity.
A personal touch
Graham Hales, chief communications officer at brand consultancy Interbrand, says: "From a brand perception, family-owned businesses have a warmer feeling attached to them. They also have a longer term perspective; not just a short-term one of satisfying shareholder value that publicly-owned businesses are under pressure to [deliver].
"Another benefit is that family-owned businesses have the perception of consistency of judgement and doing business in a style that's replicated through the generations. There tends to be more of a personal touch and it's about maintaining the family reputation as well as the organisation's reputation."
There is an argument that this works better for some brands and sectors than others. For a brand like UK manufacturer Baxters, operating in the food market, highlighting its family heritage works particularly well because it supports the idea that the recipes have been nurtured over generations, that there's provenance in its ingredients and an authenticity about its soup.
US Beer manufacturer Molson Coors tends to use its family heritage (of two families since the merger) more in its home markets than overseas, but looks at what's suitable for individual brands. Paul Hegarty, head of communications for Coors Brewers in the UK, explains the rationale: "Both the Molson and Coors families are actively involved in the business, but when we're marketing products such as Carling, Grolsch or Worthingtons it doesn't make a lot of sense to link the family to those brands."
This is because, argues Hegarty, there is little resonance for British beer drinkers to have their brand promoted by an American. He is not connected in their minds with the beer they are drinking; rather, they like to think it's a British brand they are consuming. "But Pete Coors is used a lot in the US for the marketing of Coors Light and he's also been used for our alcohol responsibility work in the US because it's something he feels passionately about," he adds.
Staying with the grocery sector, Charles Andrew, partner at strategic innovation consultancy New Solutions, argues that for Tata Tea, there would be no benefit for it to play on its family heritage in the promotion of its Tetley brand because it's of no relevance to the consumer. This might change, however, if the company wanted to make a direct link to the plantations it owns; then the provenance of the tea would become a factor.
Internal and external expectations
But where any company looking to trade on its family roots has to tread carefully is that there is no guarantee that customers will only take away the warm feelings that "family" creates. Companies can't tell customers what to think. Rather, their experience of dealing with that business will dictate whether they have positive feelings or not for the organisation.
"For example, if the company has a reliability issue, [customers] may say 'as a family business you're not really serious so it's no wonder the product doesn't work'," says Levy. It might be used as an excuse or reason for the customer's negative feeling about the company.
"Also, if you play on the family credentials, you have to be sure that the ways people expect a family business to be run are true. You're playing on certain expectations about how it is run, how it looks after its employees, etc."
While a family-owned status can free companies from the constraints of meeting shareholders' needs and thus mean that those leading the company have the interests of the business ahead of furthering their own careers, there can be some reluctance to promote the ownership aspect for fear of being seen as guilty of nepotism.
"There can be a degree of nervousness about the perception of nepotism, and some companies are embarrassed, particularly in international markets, that they are privately owned and the family is keeping control," says Hales.
But it shouldn't be forgotten that family brand attributes are relevant both externally and internally for a company, and that the "employee brand" is also important to consider. Personal values in a business can have an enormous influence and benefit on the culture and internal brand.
Angus Porter, global chief executive officer of Added Value Group, a brand development consultancy, is a former Mars marketeer. He says: "Mars is an example of a business where family ownership is deliberately down-played in its marketing, largely because the Mars family values its privacy highly. If asked, most consumers would say the Mars chocolate bar is named after the planet.
"But where family ownership has been really important for Mars is in establishing a culture and set of values, which have guided and inspired the organisation in a consistent and abiding way. Eight years after leaving the company, I can still recite Mars's five employee principles – freedom, efficiency, mutuality, responsibility and quality – and can even make a decent fist of explaining each of them."
SC Johnson is a similarly interesting example. While some argue that in a sector dominated by multinational brands, it does well to use its family background to distinguish itself, others think its products do not stand out enough in their style of packaging, for example, for the family aspect to be used as a point of difference. But like Mars, its style of leadership, culture and behaviours are very strongly defined by its family owners – to the degree that, despite its size, it maintains a family feel, and for employees, meeting one of the family members is a huge privilege.
While there are pros and cons for these types of businesses in building or using the family connection when promoting a brand, the issue for each company is whether there is a tangible benefit in communicating the background and ownership of the business to customers. In each case they need to look at what brand attributes "family" is associated with and whether that is relevant and beneficial to their business. But what they can't do is assume that only the positive connotations of family will be taken on by their customers.