Article
Commentary: On Martha Stewart's latest courtroom battle
Macy's has accused JC Penney of entering into an illegal licensing agreement with Stewart's company.
April 10, 2013
By Robert Passikoff, President, Brand Keys
Brand Keys is pretty much the world's expert when it comes to the Martha Stewart brand. This isn't braggadocio. It's true. It all came about back in 1998.
At the time we weren't focused on the Stewart brand, but the Kmart brand. Back then we (along with most market analysts) observed that Kmart was having difficulties establishing any real brand equity and differentiation and profits in the marketplace. Competitors like Walmart and Target were putting stress on a Kmart brand structure that pretty much wasn't up to code in the first place and, the more we looked for something — anything — that Kmart might leverage in the marketplace, what revealed itself was the Martha Stewart Brand. And the fact that the Martha Stewart brand was essentially the only thing bolstering the Kmart brand at that time. That's when we started tracking the Stewart brand — which was riding very high — seriously and regularly.
In 2002 Ms. Stewart and her brand ran into their own problems that ultimately led to court and then to a prison term for the human brand. By then we had tracked the brand through its highs, lows, very, very lows, and its slow return to a reasonable, albeit weaker, brand and financial health.
Ms. Stewart was always creative and entrepreneurial and consumers trusted her opinions and vision. When her legal problems hit the front pages of every newspaper in the world, Ms. Stewart characterized it as a personal problem, separate and apart from the brand. But as Ms. Stewart was the brand, consumers had a hard time separating the two. And, when trust in the human brand eroded, so did trust in the products and service that bore her name, and the company ran into financial difficulties of its own.
But that's marketing history. Today, Ms. Stewart and the brand are alive and well.
In fact, we'd go so far as to say that "Martha Stewart" has, in the most positive sense, become a "default brand." By that we mean that it is imbued with enough meaning and enough value to provide more than an adequate foundation for virtually any product or service that would avail themselves of the name.
And with a default brand it's easier and more profitable for retailers to rely upon and/or franchise the "Martha Stewart" name than to try and establish a new brand or leverage a store brand for precisely the same products or services. That is, after all the raison d'etre of brand — to act as a surrogate for added-value and differentiation, either for the product or the retailer, or both, depending upon the circumstances. All this came to mind as the new lawsuit regarding Ms. Stewart seems to be coming to a head.
Macy's has accused JC Penney of entering into an illegal licensing agreement with Stewart's company and wants JC Penney stopped from selling a line of Stewart-designed home goods like linens and kitchenware and bath products, which have already been manufactured and are wending their way to JC Penney shelves as you read this. Now if the case goes against them, JC Penney will have to come up with substitutes for those products. And those substitutes would have to be sold under JC Penney store private labels.
Which brings us back to the issue of brands and added-value. Which would you pay more for, a Martha Stewart set of bedding, or a JCP Home set of bedding? But it's also been reported that, trying to circumvent any previous licensing agreements with Macy's, JC Penney has kept the Stewart name off most of the products and those will be sold under the aegis of JCP Everyday. So how would you know that it's actually something from Martha Stewart? Doesn't the label count for something? Given two sets of 400-thread count sheets available in a palate of spring colors, would you be able to identify which set had been "designed" by Martha Stewart? And if you couldn't, would it matter?
It was Mark Twain who noted, "He goes by the brand, yet imagines he goes by the flavor." What flavors do you think Martha Stewart comes in?
(Photo by David Shankbone.)
Dr. Robert Passikoff has 35 years of agency and client experience in all phases of strategic brand planning for a wide variety of B2B and B2C product and service categories. He has pioneered work in the area of loyalty and engagement, creating the Brand Keys Customer Loyalty Engagement Index, the Brandweek Loyalty Leaders List, the Sports Fan Loyalty Index, and the Women's Wear Daily Fashion Brand Engagement Index.
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