Global Fibers & Feedstocks Report

S P E C Special Focus U S IAL FOC

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TEXTILE BRANDING
by Jessica Penman, David Rigby Associates, Manchester, UK Producers of fibers and intermediates for the textiles and clothing industries are under increased pressures from increased price competition. Product differentiation via branding is one way for producers to increase margins and profits. The following reviews the various branding options available to fiber and intermediate producers and the typical costs and rewards involved in developing branding programs. Introduction

brand can be described as a marketing identity created for a generic product in order to distinguish it from its competitors; in other words, a means of differentiation. A branded product should have additional elements or added values over and above a generic product. In the textiles and clothing sector branding can be applied at various levels, most typically at the clothing level. However, in the last 20 years there has also been an increase in component branding in textiles and clothing, which identifies only part of the final product such as the fiber, finish or fabric. With a clothing brand added value tends to take the form of a brand name which offers customer reassurance and has emotional appeal, an image created through design, promotion and packaging and a design handwriting which marks the product out as unique. However, with a component brand the perceived added value usually takes the form of functional features such as improved performance in use, quality or aesthetics. Examples include: Stain resistance (e.g. Stainmaster) UV resistance Softness (e.g. Tencel) Stretch (e.g. Lycra) Moisture management (e.g. Coolmax) Waterproofness (e.g. Gore-tex) Quality (Harris Tweed, the original consumer branded fabric) Advantages of Branding For the customer, the purchase of a branded product offers certain assurances not least regarding the level of quality that can be expected. In the case of a component brand it reassures about a function or an aesthetic such as comfort, performance in use, handle etc. Brand names also give consumers benchmarks for their purchase decisions. For example, Gore-tex has become a reference brand for waterproof breathable clothing against which other branded or unbranded products are compared. In the area of carpets, branded fibers also offer a form of extended warranty. For the textile manufacturer, the advantages of branding goods are obvious. Strong brands, at whatever point in the supply chain, give manufacturers control and leverage over their distribution channels and
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create customer loyalty throughout the supply chain. A differentiated product can usually attract a higher price and will tend to convey a message of quality. In carpet markets, brand premiums over commodity products used to be around 20-30 percent. However, over the past three years they have risen to as much as 30 percent due to falling commodity fiber prices and stable brand fiber prices. Percentages vary depending on the strength of the brand and how the fiber producer restricts the use of the fiber. Branded fibers in clothing can also command high premiums usually between 20 to 50 percent, and sometimes higher, than their equivalent non-branded products. At the height of the Woolmark campaign the fiber was commanding a price almost double that of its competing fibers, based solely on its image. Another example is Tencel, which was initially launched as a premium, luxury fiber into the upper consumer brackets exclusively at $4.0 per kg (substantially higher than viscose, at $1.80 per kg). Although prices have dropped since it still retains a considerable premium over standard viscose. Tactel was positioned as a premium branded product and the price set 25 percent higher than other ICI nylon 66 fibers when it was launched in the 1980s. The fiber, now part of DuPonts portfolio, still commands a 20 percent premium over nonbranded nylon fibers. With a well-organized brand management program high margins can be controlled and maintained. DuPont, for example, has a tight control of the protection of its various product brand names and the overall way in which the name DuPont is used. It pursues an active trademark protection strategy to avoid product brand names becoming generic. As a result, despite being under pressure from generic elastomerics, Lycra can be charged at a significant premium. This varies by region often reflecting the importance of branding in the region. For example, Lycra has a 50 to 100 percent premium over other elastomerics in Europe but only 10 to 15 percent in the US. Strong brands may also allow a company to expand its product range on the back of the initial brand. Woolmark is a good example of this with its portfolio of wool brands e.g. Easycare wool, Machine washable wool, Sportwool.

Examples of Woolmark Sub-brands

However, a brand can be weakened if fiber producers allow their fiber to go both ways, to be either branded or a commodity. For example in carpet production when demand is low and mills threaten to drop existing branded products, fiber producers sometimes offer their usually branded product as a commodity. The finished product looks identical and effectively eliminates branded differentiation and margin potential.

Trade and Consumer Branding Component branding in the textile and clothing industry operates at both the trade and consumer levels. Each type has a different target customer and therefore requires a specific marketing and promotional approach. Below are some typical examples of the different promotional activities aimed at both trade and consumer targets.
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Trade brands are usually promoted to the next stage of the textiles and clothing supply chain through trade fairs and trade press. For example, yarn suppliers market their products to weavers and knitters via yarn fairs and trade advertising. With trade brands there is no direct consumer promotion other than perhaps at point of sale. Most fiber brands are actually trade brands rather than consumer brands as the manufacturers promotional activities are geared to getting the fabricator to use the product rather than encouraging the sell through of the product to the consumer. Consumer brands are usually supported by consumer advertising and are much more expensive to maintain than trade brands. There are relatively few true consumer component brands with high levels of consumer recognition in the textile industry. DuPont, however, is the only example of a fiber company that still has successful consumer brands in both apparel and carpet markets. It is therefore referred to extensively throughout this article as an example of good practice. Its marketing strategy has been to develop a global awareness of DuPont fibers within the textile industry and, most importantly, with the consumer. Similarly Woolmark has focused its efforts on pulling demand through the supply chain by creating consumer interest and demand for wool products. Other examples of consumer and trade component brands can be seen above.

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Typical Fiber Brand Support Activities

End-User Type Spinners, weavers, finishers, printers

Garment manufacturers, retailers

Consumers

Brand Support Activities Trade advertising Trend info Trade fair attendance Trade fair sponsorship Technical assistance New product development Point of sale material Trade advertising Retailers info packs and education Fabric fairs Branding and Quality Assurance Programs Swing tickets Explanatory leaflets In-store promos Fashion magazine advertising Designer link ups Billboards

Source: David Rigby Associates

DuPonts Marketing Strategies for Creating Demand Pull

Demand PULL for Fibres from End-Users End Consumer/ Industrial User Communicating Directly With End-Consumers and Retailers

Retailing Mail Order

End-Use Product Manufacturers Demand PULL for fibers from the Supply Chain

Dyeing, Finishing, Printing, Coating etc.

Promoting Fibers to the industry through technical, product and brand name support

Knitted/Woven Fabrics Nonwovens

Fiber / Intermediates

Examples of Brand Types in Textiles and Clothing

Consumer Brand Lycra (DuPont) Tencel (Accordis) Wear-Dated (Solutia) Crushresister (Anso) Tactel (DuPont) Teflon Gore-tex Sympatex (Plouquet) Suprima cotton (Supima Association of America) Trade Brand Trevira Tyvek, Sontara (nonwovens DuPont) Duraspan (Solutia) Finesse (Kosa) Glospun (Wellman) Microsafe (Celanese) Telar (Filamen Fiber Technology) Dorlastan (Bayer)

Source: David Rigby Associates

Cost of Branding Although there are many advantages of having a brand, it is expensive to build and maintain one. Nurturing a brand is a long-term process requiring a substantial commitment of resources to product and market development, advertising and promotion. Many companies fail to exploit the true potential of their brands as a result of this lack of commitment. The first essential requirement for a brand is to inspire in consumers
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a view that it offers value-added compared to the basic generic product. This requires significant investment over a long period of time. The brand must be backed by strong and consistent marketing and promotion. Any brand must be supported by up-to-date production facilities and be backed by efficient distribution systems (otherwise it will incur costs that no brand could bear). Brands need to be re-positioned in the market as necessary to take account of changing consumer demands.

DuPont has successfully launched many branded fibers into the apparel and technical textile markets due to their willingness to spend large sums of money working with the supply chain, attracting the end consumer and providing technical support for the brand. As an example, in May 1999 DuPont launched a global advertising campaign for Lycra, costing US$30 million, to reinforce the brand image and reach a broader base of customers. The campaign focused on the consumer press, which was supplemented by television, poster and Internet advertising. Woolmark also claims to have invested over $8 billion Australian dollars over a number of years promoting the Woolmark name and its many derivatives to both the trade and final consumer.

Current and Future Trends There has been a major shift in consumer attitude over the last 10 years. Value no longer means cheap in the eyes of the consumer towards the concept of value. Quality goods are expected and can be found at all levels of the market. It is no longer sufficient for branded goods producers to simply offer a good quality product. Brands are expected to offer something more in terms of perceived added value. Perhaps the future of component branding lies in the latest approach to be developed by DuPont. This approach focuses on branding fabric concepts or consumer benefits rather than component fibers. Many of their fiber brands are synonymous with certain benefits. These benefits (in terms of either aesthetics or performance) are more important than the actual composition of the fabric. Therefore a fabric may be branded Lycra because it is a stretch fabric even though it does not contain any Lycra fiber in it at all. Similarly a Coolmax fabric might be made of nylon rather than polyester (the original Coolmax fiber) but offers the consumer the same moisture management benefits with which they identify that particular brand. Branding at this level offers far more opportunity for innovation while simplifying the benefit of the fiber to the consumer.

Conclusion Any fiber company wishing to develop a brand must be aware of the long-term commitment needed in terms or resources and time. Rewards do exist but only with significant investment and nurture. The power of a consumer brand cannot be underestimated but neither can the cost of developing one. Branding has to be about establishing a brand identity and reality in the mind of the target customer, whether the customer is the consumer or a weaver. Offering a name, a logo and a marketing slogan will not be sufficient in the coming years. Only those brands that truly offer customers perceived value over and above the generic product will be able to secure a long-term future and generate above-average profits.
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