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Idealog® is a monthly take on the hottest topics in branding, business and culture. Eidos® is a monthly deep-dive into persistent brand challenges and solutions.

20190516_avengersteflon_web

How CMOs can Teflon-Coat Their Brands

When a publicly-listed company is experiencing disappointing results or price-hikes that might normally result in a drop in share price, along with consumer and market confidence, it helps to have a brand with high economic value, so unassailable it carries the business through.

Take Netflix, which seems to be sitting pretty,  despite intense competition, and recent, substantial rate increases prompting predictions that subscribers would leave in droves. Ever since it dumped the physical DVDs-in-the-mail model, its name has been firmly associated with the type of technological innovation consumers love--the latest is an AI algorithm that improves the sound quality of its streaming service.

Or what about Apple? Predicted second-quarter results will show revenue down from the same period a year ago, and analysts say iPhone sales have shrunk, too, but Apple stock is up more than 43% in 2019. Sceptics aside, it seems consumers (and investors) just love the company to the core.

And you’d think  household stalwart Johnson & Johnson would be flailing in light of a dip in Q1 2019 earnings attributed to legal costs, as it battles multiple lawsuits over allegedly carcinogenic products, along with the first of several  imminent trials related to its part in the opioid epidemic. But, it seems, as far as Wall Street is concerned,  it remains as cute as a lightly powdered baby’s bottom.

How come? It’s brand magic, plain and simple. When you’ve formed multiple layers of protection via great products, marketed well and branded brilliantly, your brand gets a Teflon coating that allows it to sizzle when the heat is on, rather than curl to a crisp. This 2016 report from International Review of Finance finds that dedicated customers and enduring consumption mean trusted brands survive downturns best. With most economists predicting the next recession by 2021, ask Ideon how you are going to fireproof your brand, regardless of your share performance.

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