The debate on family business branding

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Attending the 10th IFERA World Family Business Research conference at Lancaster University provided the chance to hear some leading edge thinkers on family business discuss how the sector is creating competitive advantage. One area of potential is the opportunity for family firms to take advantage of family business branding either at the corporate and/or product brand level.

Successful branding relies upon a combination of differentiation and demonstrating added value, and in this context family business provenance can lend good support. Research teams from Jönköping University, Sweden, and Ilinois State University agreed that there are opportunities when developing a firm’s branding strategy to highlight family firm credentials.

The researchers emphasised that the prime attributes for consumer choice will normally relate to good customer service, strong product features etc. It’s worth noting that family firms may have some inherent advantages in this area as the recent IFB/YouGov survey of the UK public showed that 62% already think that family firms often provide better customer service than other types of business.

According to the experts family business branding should therefore best be viewed as accompanying the overall effort to brand the company and its products. The result is that it helps strengthen the reputational capital of a firm - robust reputation capital is an asset that can allow a firm to extract a premium price for goods and services offered.

Successful examples range from huge corporations such as SC Johnson to small family firms such as Darlington and Daughters, both of whom helped illustrate the point that family business branding can lend credence either at the corporate (SC Johnson), or product brand level (Darlington’s). However IMD, who are also researching the subject through testing consumer’s knowledge about brand provenance, caution that the 50% accuracy score of family firms is low. They say this should make us think where and how to position family business corporate brands with the general public.

Values 'define success' says top business leader

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After a varied and highly successful business career IFB guest speaker, Javier Ferran, offered some valuable advice to a gathering of Next Generation members in June, on the importance of building and maintaining family values. Javier spent 20 years in the wine and spirits industry with family firm Martini and Rossi which was acquired by Bacardi Group, where he was President and CEO and is now at private equity firm Lion Capital.

He described the best-run family businesses as a ‘superior model’ because they gave the opportunity for long-term planning and the owners and employees could work in alignment. The complications for family firms tend to start in the transition from a single controlling shareholder to several owners when family emotions can get entangled with the business.

He believed that the most important thing a family business needs to do is define its values. The main role of the family should be to safeguard the values and lead by example. Family councils and advisors are only tools they are not solutions to family business issues. Javier observed: “It’s important to talk about these values all the time and to preach them. So that if someone in the business talks against the values it is immediately obvious and they will be embarrassed at what they have said.”