Forget the advertising behemoths such as the federal government, the big
retailers and the motor-car manufacturers, the big, big spender in advertising
over the previous 2 months was from a brand most of us (well those living
outside Queensland) have never heard of.
Yet only a blind man or woman would have missed the street posters,
magazine, online and television advertising campaign that proudly trumpeted the
virtues of QR National – that’s Queensland Rail in ‘old speak’
Added to this you’d have to be deaf not to have not heard the mass radio
advertising – all of this precious media and multi million dollars trumpeting
that “QR National carries over 500,000 tonnes of coal on an average day
throughout the year”.
Now I know that when Toyota blitzkrieg me with messages of ‘More? More? More? Or when Coles
Supermarkets implore that their prices are ‘down, down, down” they are
obviously pitching to readers, viewers and listerners the proposition of this
never being a better time to buy a car from Toyota or your weekly groceries
from Coles.
But QR National?
“Hello, I’d like to buy one of those big black locomotives with a full
head of steam and while you’re at it can you give me a price on 115 carriages
of coal”?
Well obviously that wasn’t the response that QR National were seeking
from Mr and Mrs Public.
What the massive advertising campaign was really about, was to draw
attention to a brand that nobody (well nobody outside of Queensland – or more
precisely nobody who lives beyond the sight-line of a railway track in
Queensland) had ever heard of.
And why?
Well the reason became apparent to the bemused punters after 2 months of
saturated advertising – QR National was about to go ‘public’ and float on the
Australian Stock Exchange.
And before most prospective shareholders will consider investing in a
company they like to have some recognition, some awareness, some idea of what
the company stands for (or indeed what it does).
And this is when the potential power of a brand comes to the forefront
of Boards of Directors (and in this case Governments).
The QR National float depicts the underlying value of a Brand and what a
brand can convey and what it can deliver to owners!
Until recently the Queensland government owned and operated corporation
was known, as it had been since 1865 as, well you guessed it, Queensland Rail.
In June 2009, the Queensland Government announced the ‘split’ of the
corporation into freight and passenger operations with the passenger business
to be retained as a Government owned and run entity and the freight component
to go to IPO.
And the rest as they say, is history.
But how do they make Queensland Rail (Freight) sexy and valuable?
Easy really. Just create it into a brand and imbue it with some brand
values.
Add around $4 to $5 million dollars of advertising nationally to promote
the new brand that has been valued at anything between $6.5 - $7.5 billion by
the float’s lead managers. That’s what we call ‘something big’.
WILL IT WORK?
At BrandQuest we firmly believe that a good brand can and does increase the value of a company. There however is one caveat and that is the underlying business must be financially and operationally sound. That is, you can not expect a brand to make up for poor a business that has limited future potential - well not for any length of time.
Last year we wrote about the Myer float and while the offer was successful the market was not impressed with current share price still below the initial float price. (To read more click here: Marketing Myer). Therefore the answer is dependent on your and the markets analysis of the business.
THE LESSON FOR BRAND OWNERS?
When a business is for sale (even a micro business), the brand itself
becomes a tangible asset. Obviously most businesses don’t have the capital to
invest millions of dollars on a public awareness campaign but preparing your
business for sale means preparing your brand for sale.
At BrandQuest we strongly suggest that this preparation will repay
itself in multiples when the negotiations are done and the contract is signed.
(To learn more about how brands can increase your brand value click here.)
The brand should be audited prior to sale, no different to how the
remainder of the business components are audited and then valued accordingly.
However the potential big
dividend is that, unlike your products or service which are what they are ie:
QR National’s locomotives and rolling stock haven’t changed or been upgraded,
the brand can be revitalised, and along with that revitalisation can come
revaluation.
It’s well worth keeping the above in mind if, and when, you begin to
consider selling your business. QR national may or may not be a success as a
publicly owned institution – but as a marketing lesson in leveraging the full
value of a brand it’s a worth a potential fortune.