MARKETING

Image Building

Creating a winning corporate image.
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Nordstrom means service; K-mart low prices. And when people hear the name of your company, they think of . . .

True story: A few years ago, the CEO of a Fortune 100 company read a book about the importance of corporate team building and fell in love with the concept. He summoned a senior vice-president to his office and said -- with all seriousness, we swear -- "I've been thinking a lot about corporate cultures lately. We should have one. Have it in place in four weeks."

The same thing's happening today when it comes to corporate images: big companies are trying to create them overnight. Xerox has given up on trying to convince the world it's a financial supermarket. It's now "The Document Company." And Radio Shack, once thought of as the place to get batteries and gizmos, is now "America's Technology Store."

You get the idea. In a market in which too many businesses are competing for the same customers, companies must find new ways of letting people know exactly what they stand for.

A clear corporate image does that, whether you sell to consumers or to other businesses. Every time you think of McDonald's or McKinsey & Co., an impression -- more powerful than any ad -- forms in your mind. But how do you create an image? And what does it cost?

For the answer, head over to West Point Market, in Akron. Here, owner Russell Vernon has created a clear identity for his store. By relentlessly focusing on what he carries, whom he hires, and even the way his shop looks, Vernon -- without advertising -- has made West Point Market the place you think of when you want to buy good food and wine in this city of 250,000.

The cost of creating that identity? Substantial. But the intriguing thing is, Vernon has for the most part made the image pay for itself. You can see how that works long before you step inside.

Almost every supermarket plasters "this week's specials" in its windows. West Point Market doesn't. For one thing, it doesn't compete on price. Even its commodity products -- milk, sugar, eggs -- cost a good 10% more than they do at the supermarket down the street, a key reason why the store's 3% pretax profits are about twice the industry's average. For another, there are no windows visible from the road. The store looks like a small office building -- another tip-off to customers that the place is different.

The same holds true about the parking lot and the grounds. There are flowers -- zinnias, gladioli, snapdragons -- everywhere, which cost $5,500 a year to plant and maintain. But they're used to augment the bouquets the store sells, so the flowers justify their keep. And the basil and dill growing in the parking islands are used in the supermarket's kitchen. If anything, Vernon turns a small profit on his landscaping.

All that's fine if you know about the store, and since West Point Market was founded by Vernon's father and two partners in the 1930s, a good portion of Akron already does. But how do you communicate a corporate image to people who have never heard of you?

You could advertise. But ads are expensive and not particularly credible. Instead, Vernon communicates what his store is about by sponsoring the Ohio Ballet and the Akron Symphony, institutions his target market holds dear. Usually he receives a discreet announcement in the programs, recognizing his contribution. "Our customers are very observant," he says. "We don't need a screaming ad to get their attention." The sponsorships cost him $20,000 a year, the equivalent cost of three full-page ads in The Akron Beacon Journal.

Vernon leverages his investments as much as possible. "Let's say we want to make a $1,000 donation to the hospital drive," he says. "Instead of writing a check, we'll donate a gourmet, black-tie dinner for 16 to be held in our store after hours. The hospital can auction off the dinner to raise money. A recent dinner cost us $1,300 to prepare and serve, but it went for $3,800 at auction." The hospital got more money, and since the dinner drew local television coverage, West Point Market received plenty of publicity. The $1,300 dinner more than paid for itself.

That approach can be found in everything Vernon does. To promote his 3,000-label wine section, he holds monthly wine tastings. But by charging $25 a head, he not only covers his costs but also earns enough to send several of his employees to California's wine country each year to meet with vintners, a nice perk that produces more knowledgeable employees.

The key to making a strategy like Vernon's work is knowing who you are and whom, exactly, you're trying to reach. Vernon does. His customers are mostly middle-aged or older, and they have money. And every decision is made with them in mind.

They like high-quality merchandise? You'll find no generic brands at West Point Market. They're used to people paying attention to detail? There are fresh flowers and residential fixtures in the store's bathrooms, and Mendelssohn and Mozart -- not Muzak -- play all day long. His customers are used to respect? At West Point Market, salesclerks sir and ma'am you to death. All that costs money. For example, at a typical supermarket, labor accounts for 8% to 10% of costs. Here it's nearly 20%.

And it's more than just labor. Take the matter of signs. In a market as big as West Point -- 25,000 or so square feet -- finding the trout amandine or the walnut oil is not always easy. Signs at the end of each aisle would help. But the oversized wooden ones Vernon wanted would have cost a couple of hundred dollars apiece. Not a huge investment for a company with $8 million in sales, but enough to make him think twice. He could take the nation's largest food companies up on their offer of providing the signs for free. But there's a catch. Their signs always include a space to promote their products. "In-store advertising would be inconsistent with our image," he says. So he does without.

Not only can a consistent image cost you money, but it can also drive potential customers away. "Some people have told us they feel as if they have to get dressed up to shop here, and they don't come back," says Vernon. "That's OK. Stores that have an identity crisis eventually run into trouble. We know who we are, and so do our customers."


WHO ARE YOU?

You are the message

West Point Market's reputation didn't develop by accident. Company owner Russell Vernon works on it every day by asking himself:

* Is this consistent with who we are? That question governs every decision, be it adding a new wine or a new sign.

* Does this help me achieve my goal? Vernon knows what he wants to be: the provider of the finest foods in his area.

* Will our customers like it? Vernon's average customer is older, has lots of disposable income, and is used to being treated with respect. So you hear a lot of sirs, ma'ams, and classical music.

* How can we do all this and still make money? Wherever possible, the store's image pays for itself through higher prices or clever management, such as the flowers on the grounds that go into bouquets sold in the store.


RESOURCES

Imaging help

"Be yourself." All your life people have been telling you that, whether you wanted to know how to make a speech or win the girl (or guy). If you want detailed advice about creating an image for your company, consider the following:

* A Company Image by Elinor and Joe Selame (John Wiley & Sons, 1988) does a wonderful job of highlighting the key points of corporate-image making. Its message: Customers will judge your company on everything -- from the dust on the floor to whether your employees snarl. Specifics are lacking, but you can use the book to create a checklist of things to think about.

* Communication Arts magazine, specifically the annual design issue, will give you hundreds of examples of how companies have used their advertising, packaging, product design, labels, stationery -- just about everything you can think of -- to send a message about who they are.

* Road trip! Visit the best and see how they operate. If you go to an F.A.O. Schwarz store, you'll end up smiling -- which is somehow appropriate, since it sells toys. When you walk into the offices of McKinsey & Co. or Russell Reynolds Associates Inc., there's no doubt that they are used to dealing with the rich and powerful.

Last updated: Dec 1, 1990

PAUL B. BROWN | Columnist

Best-selling author (and Inc. magazine columnist) Paul B. Brown's latest book, Own Your Future, has just been published. Brown's blog appears every Tuesday, Thursday, and Sunday.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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