Why investment in marketing is key especially during financial challenges
My name is Cory, I am the President of Creative Return and the host of The Insider’s Guide To Business. The following are my insights and learnings from the interviews and dealings I have with talented entrepreneurs, operators and financiers. I hope you find them valuable and applicable in your endeavours.
When I was a boy, my dad drove a Dodge. In fact, it’s really the only truck brand he drove. To my young judgement, they were good trucks with cool features like power windows and decent radios. Yes, I had very low standards then.
I assumed that as I grew up, I would unhesitatingly, and unenthusiastically, buy a Dodge too.
Enter Marcello Bottoli
To Marcello Bottoli, my tepid “brand affinity” for Dodge is no surprise. Marcello is the co-founder and Managing Partner of EVCP Growth Equity, a boutique private equity firm focused on investing in promising consumer lifestyle brands.
His resume is impressive, including CEO and Board positions with Samsonite, Louis Vuitton, ALDO Group, Pandora, and many others.
In a podcast interview we did, he tells me how he managed to lead Louis Vuitton as Chairman and CEO through the desperate times following the terrorist attacks of September 11th. But it was his leadership at American luggage brand Samsonite that really piqued my interest.
Saving Samsonite
Started in 1920, the company had long prided itself on its rugged construction and in 1966 changed its name to Samsonite, a derivation of the name Samson, the biblical strongman. Its tagline was “strong enough to stand on,” yet the company soon saw its profits begin to soften.
Recession and Restructuring
By the 1970s, competitors were zipping up sales and successive ownership changes left Samsonite somewhat rudderless. More ominously, luggage sales in the early 2000s slowed considerably as people refused to travel following the terrorist attacks of September 11th. “The company,” Marcello told me, “was highly leveraged and simply was not going to make it.”
So why would Marello confidently assume control of a company whose time seemed limited? The keys are building a strong strategy and having the confidence to stick with it. For Marcello, the lynchpin to turning Samsonite around was rebuilding the brand.
Brand Marketing vs Product Marketing
A brand, he says, is the emotional relationship between consumers and objects. “You can buy a product, or you can buy a brand. The whole difference is the emotional attachment.” Some people, Marcello says, buy based on an inherited set of circumstances, such as a family history with the product.
This explains my naive interest in Dodge’s, but it’s a phenomenon that consumers of all ages encounter.
“I had Samsonite products from one or two generations back,” says Marcello. So, when as an adult he set out to purchase his first luggage set, his choice was clear; he would buy Samsonite. But while his choice was clear, it was not certain. “Ultimately, if I found something else in a promotion, I would buy something else.” The takeaway here is that without a strong brand, you are merely a commodity.
Brand Ambassadors
Marcello knew he needed to re-establish the emotional feeling Samsonite had lost and turn “passive buyers” into “active buyers”. Fortunately, he had much to work with, given the company’s near century-long history of strong brand name.
In only a couple years after Marcello lead the acquisition and restructuring along with the esteemed Tony Ressler of Ares Management LLC, he was able to:
reduce the number of products offered,
harmonize key marketing touchpoints including logo and brand colours, and
building out a signature Samonite Black Label brand collection that attracted the active buyers.
These actions cleaned up the balance sheet and Samsonite turned a profit for the first time in several years. The company was sold for an unfathomable $1.7 billion only a few years after Marcello took the helm. The story behind his decision to sell is worth an article in itself. To hear it, be sure to listen to the episode here.
Marketing During the Pandemic
Marcello’s insight into turning around companies has lessons for marketing during the pandemic and beyond. Companies with strong brands and loyal fans are positioned better to weather inevitable financial challenges. In fact, it is the companies that continue to invest in marketing during downturns that prosper in the long-term.
Conclusion
I never actually bought a Dodge. But now knowing the underlying reason why I would have done so is a powerful insight into why we buy and how we need to market brands.
If you are interested, you can listen to Marcello's episode of the podcast here:
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