A common question people tend to ask graphic designers like us, especially in the turbulent wake of the reactions to the London 2012 Olympics logo, is “what are you really buying when you invest in a brand?” In one word, credibility — and with it, the liberty to take it anywhere you please.
In the April issue of the Harvard Business Review, an article by Stefan Michel discusses a failed attempt by McDonald’s to diversify its core business by opening two four-star European hotels. The Golden Arch Hotels launched concurrently in Zurich and Lully Switzerland in 2001, and became a three year experiment.
For as low as $120 a night, your brightly coloured room featured a bed with a golden arches for a headboard, a transparent shower stall that protruded into the bedroom, and of course, 24-hour fast food. Several factors led to the demise of this daring venture, some of which included: the economic downturn after September 11th, the fact that the word “arch” in German speaking countries sounds very much like a vulgar word for a certain body part, and most obviously, the problematic shower stalls.
Another more recent event that has generated its fair share of headlines, was the announcement in March that Starbucks was launching its own record label. No longer just a re-distributor of albums owned by other companies, the new Starbucks record label is big step forward into decaffeinated territory for the green bean giant, as they attempt to capture new business in the recording industry.
Currently, the first and only artist signed to the label is former Beatle Sir Paul McCartney. His new album, “Memory Almost Full” is now being sold at most Starbucks stores worldwide, in all major music retailers, and on iTunes. Only time will tell if the reputation of the Starbucks brand will be enough to support their venture into the music business.
Instant credibility through brand recognition was vital for both of these companies as they moved into areas where established competition already thrived. Success or failure aside, the ability to venture into uncharted waters is only possible after spending time developing a well-executed identity.
Perhaps the most practical lessons we can learn through the antics of big brands behaving bullishly are three-fold. Firstly, a good brand lends credibility to your efforts. Second, credibility gives you the freedom to seek diversity. And finally, despite McDonald’s best intentions, the idea of a fast food/hotel combo conjures up dreadful visions of sleeping in greasy sheets, which is clearly not something very many people love.