In my life it happens almost every week.
Ever since March 2011, the time when I took charge of my company’s sales department, I have been trying to clean our account portfolio. Every time that I travel with some of our sales reps, I see many examples of brand prostitution. I close accounts that do not meet the requirements of the brand, and the next week the sales team is presenting leads with potential customers who add nothing to the it. On the contrary, their effect on the brand is negative.
This is what I call brand prostitution. The term is rather common in my region of Latin America. Yet don’t look it up in any marketing book because you will probably not find a definition. It’s that sort of common term that everyone uses but no one has ever taken the time to define.
I am so fed up with brand prostitution that I thought it would make a great topic for a series of small blog notes. I hope to clearly define what brand prostitution is, why it has a negative effect on the brand, and how to control it. I have yet to see positive effects to any case, so I will forfeit the scientific method or any hopes of academic merits and limit myself to the core of the matter.
I want to start by explaining in simple terms what brand prostitution is. Think about a brand, a premium brand. A brand that invests a lot in building its positioning and unique proposition. One that has spent resources building a selective target audience. Think something on the lines of Hermes or Ferrari or Hugo Boss. Those are premium brands. Think Tous and the little bear, or think Tiffany’s. Those brands have spent a lot in cultivating a brand tone. It’s not Coke. Coke has a strong brand, but it’s not premium. Coke does not want to be premium. Coke needs to be everywhere, to all people. It’s a mass consumption item. But not Tous. You can’t just walk and find a Tous store, or a Louis Vuitton in the outlet mall down the road.
These are not brands that want to be everywhere. Being everywhere it’s not good for premium brands. You know, it’s marketing 101 and economics 101, if gold was as water it would be worth very little and when we run out of clean water, water will be worth a lot. So you have a premium brand and you want to keep it premium.
But let’s say one of your distributors starts to get lazy, greedy or maybe he or she is just a little stupid (it can happen and it does happen a lot in business…) They decide that they can sell your high-end product in those little mom and pop stores. And they do. And soon instead of 20 handbags you sell like 250, and you are happy because sales are flying (who wouldn’t?) But soon your high end retailer starts to complain that she can’t sell those expensive handbags to her usual customers because the same handbag is everywhere in the c-level neighborhood and those ugly mom and pop stores. And worse, since they oversold to like twenty of those awful mom and pop stores, and those people have the pesky habit of eating every day, they started this big price war and discounted the items by 40%. Hey, they make enough with the 10% profit, after all, rent is pretty cheap in the smaller neighborhood venues, unlike big retailers who have to pay big rents in malls, pay taxes, pay salaries, etc.
Sounds like a joke?
Sadly it’s not. This is the beginning of brand prostitution. I have seen the same thing for sixteen years in Colombia, Venezuela, and Central America. Some brands change distributors. Some brands don’t see it until it’s too late and they start to lose share. Some brands detect it too late and have to pay hefty sums to recuperate their distribution and clean up the act. The fact is that brand prostitution is the effect of allowing commercial and marketing strategies that poise a negative threat on the brand’s positioning, target audience, goodwill, or values.
On the next article on this topic we will work on a more academic definition and offer some very tangible examples of brand prostitution.