From a 'House of Brands' to a 'Branded House'

An internal branding campaign at Flowserve is being developed to identify and promote company values, bringing together many diverse brands

Start with more than 50 heritage brands.

Add a long line of highly engineered products with life cycles of up to 50 years.

Now, picture hundreds of offices, thousands of employees, and sales channels in more than 50 countries.

For final measure, throw it all under the umbrella of a newly formed company combining vast business experience and expertise with industry-leading brand names that date back as far as the 1800s.

How do you manage that complex matrix, respect its heritage and, at the same time, compete in a fast-moving global marketplace? This branding scenario was the marketing challenge for Dallas-based Flowserve Corporation, a Fortune 1000 company and leading provider of valves, pumps, seals and steam solutions.

Flowserve customers include the world's infrastructure business and process industries, including the oil, gas, power, water and chemical markets.

According to industrial analyst Craig Resnick, a director of research at the ARC Advisory Group, brand awareness and brand longevity are key in the industrial marketplace where Flowserve operates.

"The longer a company has been around, the better the customer feels about that company," says Resnick: "A manufacturer's legacy brand value is often measured in proportion to the base of its installed product".

For companies like Flowserve, whose products have decades-long lifecycles, maintaining the value in a brand or product name is essential for gaining repeat sales and more lucrative asset-management contracts, and for retaining the loyalty of longtime customers.

If a customer is comfortable ordering your legacy brand, why rock the boat? If it's easy for a purchasing manager to spec your product by the name he knows on an RFP - a name he associates with reliability, proven quality and trusted support - why change now? These questions loomed large for Flowserve.

Over several decades, the company had acquired a portfolio of dominant fluid motion and control businesses around the world.

These businesses carried with them industrial brands with solid market share in a wide variety of vertical industries and regional sectors.

THE BATTLE FOR MARKET SHARE.

The mergers that formed Flowserve in 1997 were part of a merger and acquisition trend in the industrial sector.

Behind this activity was a battle for increased market share, an attempt to meet the growing demand for single-source solutions in the global marketplace, and an opportunity to fill regional product and service gaps in both mature and emerging markets.

Flowserve, like many downstream suppliers to big multinationals such as Exxon Mobil and Dow Chemical, is expected to partner with its customers, providing continuity of service anywhere and anytime it's needed.

Moving quickly to a single global brand raised concerns for Flowserve management.

Market studies seemed to lend credence to the concept of leaving successful heritage brands alone.

A 2002 survey, "Brand Strategy in the Industrial Market," from Frank Lynn and Associates, found that in 14 of 18 industrial manufacturing categories the top brand commanded more than 50 percent market share.

"We've found that many corporations have gone to a dual branding strategy with a strong corporate brand and sub-brands to hold on to those sub-brand values," says Bob Segal, principal, Frank Lynn and Associates: "The corporate brand is used for large audiences like investors and large clients and the sub-brands are used for more refined audiences, like specific market customers.

For industrial buyers, Flowserve does a good job at the corporate brand level to sell the lifecycle productivity of its products and services," continues Segal: "The Flowserve message says we will support your productivity over the entire life of the product to lower your overall cost of ownership".

After extensive market research and customer surveys, a clearer picture emerged - a dual branding strategy was needed that would both meet the Flowserve global growth objectives and exploit the value of its best-of-breed flagship brands.

With skillful rebranding, Flowserve could retain the equity of the heritage brands while positioning them as an integral part of a best-in-class corporation.

BRAND EVALUATION - WHEN IS A PRODUCT A BRAND? The quintessential test of brand value is whether a product or service is requested or commonly referred to by name.

When people think of a manufacturer's brand rather than any specific product in the range, customers will pay a premium for that brand name.

An analysis of the vast majority of the Flowserve legacy brands showed that customers placed value on heritage company names associated with products they purchased.

For example, Gestra was synonymous with steam solutions.

Borg Warner equaled fail-safe sealing solutions.

Durco meant reliability in pumps.

Limitorque stood for the highest quality in valve automation, Edward for premium gate globe and check valves.

"The specialised nature of most industrial companies and their markets means that they cannot support the cost and attention associated with the proliferation of sub-brands," says branding expert Paul Hague of B2B International: "Every brand promoted by a company needs strong promotional support and expense".

The Flowserve management team decided on a dual branding strategy that enables Flowserve to cost-effectively market the parent brand to gain penetration into mature and emerging markets.

SIMPLIFYING THE CUSTOMER EXPERIENCE "Even though Flowserve products are industrial components, they're fulfilling strategically important jobs," says Hague: "They're in a refinery, in a chemical plant.

If a seal goes, if a pump goes, if a valve goes it's not just the cost of that equipment, there's the downtime in the plant.

So, people are buying more than a commodity from Flowserve.

That's why product names like Durco or Gestra are important.

They have a value because people learn to trust them.

That's what branding's all about," adds Hague: "Getting people to pay a premium for all the history associated with that product and its name".

According to John Jacko, Flowserve vice president and chief marketing officer, "A lot of industrial groups have taken profitable product branding and made it overly complex by branding products on a whim.

We have focused our marketing efforts and resources on developing a credible, consistent, well-designed and well-supported Flowserve parent brand that mirrors our customer needs to simplify their supplier base, increase their efficiencies and lower their costs.

We believe we are hitting the industrial branding bull's-eye by streamlining our offerings".

With their solid portfolio of fluid motion and control solutions - with a family of reliable, quality, recognized sub-brands - it's now easier than ever to do business with Flowserve.

"We understood that to be effective, we needed to distinguish Flowserve as a 'branded house' rather than a 'house of brands'.

We needed to leverage the multitude of heritage product lines the company acquired from its activities as an industry consolidator".

Moreover, the Flowserve branding strategy had to communicate and reinforce the company strengths and capabilities to both internal and external audiences around the world.

BRANDING FROM THE INSIDE OUT.

"To get employees engaged in building a Flowserve brand, Flowserve devised a new mission, vision, brand promise, and tag line - messaging and addressing them throughout their intranet, internal company publications, and other media.

The Flowserve new tag line - Experience In Motion - became very important.

"It recognized the value in our heritage and reminded employees that we need to be on the move," says Jacko.

New company values were built around the customer, called the Six Cs - for Customer: Commitment, Confidence, Competence, Creativity, Collaboration, and most importantly, Character.

Most important was Character, messaged as key to the Flowserve ethics and compliance campaigns.

A significant first step in the Flowserve brand development was directed to the group's employees through its HR programmes.

An employee reward and recognition system, called The Spirit of Flowserve, was launched to reinforce the Six C values and support the brand promise.

The Spirit of Flowserve campaign not only defined the Flowserve objectives but also reinforced work and corporate ethics, defined standards of excellence and publicised employee recognition efforts.

A new internal communications infrastructure and a commitment to training kept communication channels open.

A web-based brand standards intranet site became the epicenter of the Flowserve brand control and enforcement.

The web application includes access to a range of visual assets as well as precise specifications for everything from logos to stationery to trade-show assets.

A simultaneous external branding effort was undertaken to streamline and coordinate marketing efforts through the company's network of advertising agencies around the world.

Jacko and the integrated marketing communications team kicked off a global branding initiative with the development of a strong, easy-to-implement graphic identity programme that was launched in Italy in 2004.

The group adopted a bold graphic makeover for all of the Flowserve heritage brands.

The Flowserve brand dominates the corporate message, while the heritage brands are identified with product portfolios.

A similarly consistent and disciplined approach to prioritising and branding literature was also developed, along with web, tradeshow, advertising and PR programmes.

These co-ordinated efforts provide a positive and repeatedly messaged customer experience.

The adoption of the strong positioning statement, Experience In Motion, has proven to be the lynchpin that bridges internal and external communications efforts.

Today, Flowserve leverages the power of the internet and digital communications to market its brand messages around the globe 24/7 - first in US English, as the common language of the US engineering community, followed by targeted local languages such as Chinese, Dutch, German, French and Spanish, to shorten any communication gaps.

"While we normally preach marketing that drives customers to Flowserve from the outside in," says Jacko, "you cannot brand the outside without having the inside in lockstep.

It also did not hurt that the consistency of the efforts led to significant cost reduction in set-up costs and literature fulfillment.

We enforced our brand compliance programme with the help of our agency partners".

The Flowserve primary goal is to be the most recognised and preferred supplier of fluid motion and control products and services in the world.

Successfully integrating more than 50 heritage brands - and their inherent brand equities - has become key to reaching that goal.

The branding strategy has enabled the company to rapidly position itself to its internal and external audiences, meet global demands and streamline new market penetration efforts with a portfolio of products and services under the global Flowserve umbrella.

Flowserve has attained brand integration in a much shorter window than have many similar groups in the industrial sector.

Today, any Flowserve employee could put his or her business card on a table, and the look would be the same.

The branding of the cards is consistent - they pass the essential identity litmus test.

Everything from paychecks to hardhats to advertising, marketing communication, factory foyers and websites carries the Flowserve brand.

It's an achievement that is the result of the Herculean, though sometimes unpopular, effort on the part of the brand champions inside the corporation.

More and more, the Flowserve name is becoming recognised by their customers around the world as a leading global brand of fluid motion and control solutions.

The dual branding strategy is clearly paying off, but Jacko says that there's still a lot of work to do.

"It will take our continuing commitment to the branding process to make certain everyone is onboard internally and that externally, our message is fully understood.

Our vision is that customers and employees alike will identify the company's powerful portfolio of solutions with the single, unified Flowserve brand.".

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