PLAY-DOH: THE EPITOME OF A STRONG BRAND
Play-Doh is absolutely the epitome of what a storng brand should be.
This product category i.e. dough that you play with is as close to being a classic ‘commodity’ product as you can get. In the simplest form this kind of dough is basically made up of flour, water and salt. You could go and make your own version of dough that you play with right now, but you would absolutely struggle to get that product listed, and you would have to compete in a heavily prive driven environment. Unless you are Play-Doh, in which case you are effectively THE brand in this space, the only shop in town from a brand perpspective. Play-Doh is the only brand in this space which can command a price premium on brand alone.
For sure, there are probaby some patents & proprietary ingredients involved to make Play-Doh dough as good as it gets, but there are many other formulae out there for similiar products. There is only one brand! Kids and parents love Play-Doh, and for very good reason.
You may not know that Play-Doh started life back in the 1930’s as a wallpaper cleaner, before becoming a leading educational toy brand. From these seemingly random beginnings Play-Doh is as protectable and strong a brand in the dough category as Coca-Cola is in the carbonated cola drinks category.
In Episode 4 of the Playing At Business Podcast, we take a look at how Play-Doh got so strong, and how it compares to the Coke brand.
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TRANSCRIPT OF PLAYING AT BUSINESS PODCAST – EPISODE 4 – WHY PLAY-DOH IS THE EPITOME OF A BRAND:
“Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more go to www.playingatbusiness.com
Hello welcome to episode 4 of playing at business podcast with me your host Steve Reece. Today we’re going to look at business lessons from the iconic toy brand Play-Doh. We’re going to specifically look at why Play-Doh is the epitome of everything a brand should be, at least in my opinion. So I guess the first thing to do is to define what is a brand, what’s the purpose of a brand. So just searching around on the internet I found a few different definitions. But the first one that I came to and the one that I liked best is that a brand is defined as a type of product manufactured by a particular company under a particular name. Originally obviously branding comes from when cattle would be branded with a particular owner’s name or mark. So I think between those two we can kind of get an idea of what brands are. Obviously in today’s consumer society brands take on all kinds of meanings and values. Often way beyond the the value of the product itself.
Now as consumers you know common sense would tell us that own label products are close enough to being the same as branded products so as to make it fine. So a plain handbag will still carry stuff around just like a designer handbag. But it doesn’t have kudos, it doesn’t have status, it doesn’t have all those values that are associated with it. You know you could ask surely pasta is pasta, surely breakfast cereal is breakfast cereal. Well yes and no. I mean at the end of the day how much difference are you really going to notice in the taste and eating experience. I mean that’s probably a debatable point and there’s been all kinds of taste tests around foods to suggest that there’s not as much difference as we might think in some of these areas. But actually it is so much more than that. You know it’s about image, it’s about association with a brand. It is about relevance of the brand. You know you could ask surely cola is cola and I think that the non-toy example I’m going to use in this podcast will be Cola. Because I think the classic example is you know you can have Cola, but there’s only one Coca Cola. There’s only one Coke and at personally I’ve done blind taste testing exercises/projects on colas before. Don’t ask me why but the reality is I struggle to distinguish between the different types. But if you put me in a store I will probably 99 percent the time buy a Coke product and that is mostly about brands.
When it comes to products for kids toys in particular parents want to know is this safe, is this fun, and is there some kind of benefit to my child from this. Can this help me to feel like a good and a worthy parent? You know there may also be a degree of the kind of nostalgia like why I played with this when I was a child – now it’s my child’s turn to enjoy the same fun and to create those same memories as I did. so that’s kind of a general note on brands and anyone who listens to this Podcast will soon work out that I’m a huge advocate for brands. I’ve worked on huge brands, I’ve worked on billion dollar brands. I’ve worked on two hundred thousand dollar brands. I’ve worked on toy brands, I’ve worked on brands across finance & FMCG and at the end of the day the one thing that companies and brand owners can know is that having strong brands with positive associations and good products is a better success formula than just having good products. So to talk specifically about Play-Doh, a long time back when I had a few less gray hairs and probably a few less age lines on my face, I was once the European brand manager for Play-Doh. I say this with some pride but not with any great fond memories in the sense that I wasn’t actually very good at it. So frankly I didn’t last in that role for all that long. However the brand itself has lasted and it’s lasted way beyond my lifetime or the lifetime of most people listening to this.
So one of the fun things about looking at something which has so much positive heritage is the amount of fun facts you can find online and I mean I’m not going to repeat all the fun facts I found. Because I’d been going for hours. but a couple of things that I particularly liked that I found out while researching Play-Doh, firstly it started life as a wallpaper cleaner in the USA in the 1930’s and now there’s not that many toys that you know that they come from such a functional, & I guess frankly boring background, but Play-Doh does. Eventually it was used for educational purposes and turned into the toy that we know today. Over time Play-Doh had a number of different mascots and I particularly remember the Play-Doh Pete character from my time working on the brand back in the early noughties. More recently there’s been a use of characterized cans, so the cans or the tubs of Play-Doh themselves come to life in the adverts. One of the funny things about Play-Doh you’ll find is the amount of huge metrics related to it. When I say metrics I mean kind of data or numbers and I’ve seen maybe half a dozen of these and all of them are amazing. So for instance according to Play-Doh’s official website to date there’s being roughly 700 million pounds of it produced, which would wrap around the world 300 times. There is over 100 million cans or tubs produced per year.
Now the interesting thing is actually though aside from all these fun facts and really this is the number one reason why I wanted to do a whole podcast episode on what Play-Doh can tell us about brands is that I mean even the Play-Doh official website will tell you that this massive huge global brand with all this longevity is actually the product is primarily made of flour, water and salt. They can’t get anything more basic than that and you can’t get anything that in theory should be harder to create a kind of a huge powerful brand out of. But obviously you know Play-Doh has done that. So I mean my understanding is from online research there is a proprietary formula of some kind with the Play-Doh formula. I suspect there are some patents involved there. But you know the reality is what isn’t seemingly restricted is the use of flour, water and salt. so there are plenty of copycat products out there and in fact if you or I decided tomorrow to make our own version of dough that you play with, we’d probably find it relatively straightforward to A, find a factory that could make it for us or B, to come up with our own kind of formulation.
So really the big question is how you make a brand which has meaning, which has life, which has both tangible and intangible value from the most basic ingredients you’ll have in your kitchen. So that’s we’re going to look at next. You know how Play-Doh leads this category. In fact you could even argue it is dominant versus copycats and generic products and all that kind of stuff.
So I think the brand is the number one differentiating factor and the interesting thing I guess is you know it’s a preschool product and normally preschool items have quite basic branding. They tend to use primary colors, because that’s what children, the development stage of preschool children responds to best. But it’s still a strong and clear kind of visual identity despite that. So you know if you look at the logo, I mean it’s a very very simple logo in some ways. But the colors are very striking. They’re very distinctive. The font of the logo is also very distinctive. The color of the writing is also very distinctive. So you’re not in any doubt, if you pick up a product on a shelf and you have a generic version and the official Play-Doh version. You know which one is the official Play-Doh version, because of the branding. But also because of the name. So the interesting thing is you know dough that you play with is one thing. But Play-Doh. It’s not spelt play-dough. Its spelled Play-Doh and because that’s not a natural word or it’s not the word that people would use. There’s some level of kind of distinctiveness and I guess it protects ability within that also and I think the other thing though and this is kind of very common for massive consumer brands. It’s not just the visual symbols that really make these brands stand out. It’s actually also a case of having best-in-class product innovation.
So I think one of the interesting things about the toy industry in general is that there’s a huge amount of new products every year. Every major brand is expected to have new products each year and so Play-Doh in particular in a space where you’ve got a very basic dough is exceptional bringing out new versions which add value and increase the purchase price point, which is what the brand owners and the retailer want. But also the play value for the consumer by adding plastic parts. Whether it’s extrusion devices or themed sets. Play-Doh really leads this category in terms of product innovation.
But they also need this category in terms of perennial classic products. So back in the early noughties when I worked on Play-Doh briefly, Dr. Drill and Fill was one of the major Play-Doh products. Because it was kind of iconic, it was fun. It uses something that children can relate to, which is a trip to the dentist. Whether that’s the entirely positive association or not doesn’t really matter. It’s just something that they know and they can replicate what happens in the dentist in a playful way. So funnily enough I’m just looking at retail websites as we speak and Play-Doh Drill and Fill play set is still on sale. Nearly 2 decades since I worked on the product and it was one of the biggest products then, and is still in market today.
So I think that’s the other thing which brands tend to have is. They tend to have iconic perennial classics and timeless appeal. it’s not just Play-Doh, if you look at most brands they have this. I think the other thing, the third factor I would say that allows Play-Doh in particular to lead the category versus kind of copycats is the best-in-class marketing and advertising. Now the brand owners Hasbro are renowned for leading the toy industry in terms of standards in terms of quality and that sort of thing and also in terms of the marketing and advertising. again generally speaking you know more generic, more kind of ‘me too’ products will tend to have more ‘me too’ type of advertising where as classic brands, major brands will tend to have really really strong branding featured throughout this. But also you know the quality of the creative, the originality is normally category leading as well and that’s certainly the case of Play-Doh.
I think the other thing is all those things lead towards I guess the end result. Which is where we are today with Play-Doh which is that it’s about consumer belief in the brand. You know they believe, consumers believe Play-Doh stands for something. They believe it will have product quality, product integrity. You know what they’re getting or at least they think they know what they’re getting. You don’t necessarily get that assurance from own label. You know I may be able to find, well I’m pretty sure I could find cheaper dough somewhere. You know if I went into a discount retailer I would probably find a selection of cheaper products. But I don’t necessarily get that assurance that I’m looking for, especially since I’m about to put a product in front of my children. So if it’s a certain own label you know if it’s a high-end retail brand, then maybe I will get some reassurance because I will presume these guys would not be crazy enough to have a poor quality product. But I don’t necessarily get that if I’m in all forms of retail and obviously you do tend to get that from brands.
So I guess the other thing is just to look outside of toys at how this example plays out elsewhere. Actually Coca-Cola again is the classic example. So it’s kind of the same thing with Coke. There were many colas. You know that if you went into any retailer which sells drinks you would probably find different colas. But the reality is there’s only one Coke. Now we could argue all day long and frankly I’m sure the Coca-Cola Company and the brand owners would argue all day long that there’s something fundamentally different. But basically it’s a carbonated cola style beverage. It has a certain type of flavor, perhaps no one can replicate the exact flavor, but it’s a kind of a carbonated drink and we all know what a cola should roughly taste like. But the reason why there’s only one Coke, is all about brands. yeah okay there’s a huge amount of stuff in terms of distribution strength, marketing strength, product pipe line, all those kind of things that I’m not saying that they’re not important – absolutely they are. But at the end of the day the reason why there are many colas but there’s only one Coke is because it’s a brand and it means something to the consumer, it means something to the retailers and you know and therefore the same applies outside of the toy category as well. So in terms of brands, I’m often asked for in consulting for companies. Like what are the characteristics of a brand or actually more often when people tell me they want to build brands and they asked me if their brands are any good, they sometimes fail to have these three things:
- A brand should be protect-able.
- It should be own-able
- And it should be leverage-able.
This is really important. Because many people think they have brands but actually a lot of the time what they have is products with a logo. So these 3 things are really important.
The first factor is protect-ability. So let me preface this section with a declaration that I am absolutely not a lawyer. I have no legal qualifications or legal training whatsoever. Anybody taking anything that I say is legal advice or guidance would be absolutely barking mad. Please don’t do that! This is just what I’ve observed, but take all necessary counsel at all times please. So let’s talk about flexibility trademarks and patents which I guess are one of the fundamental parts of this. I’m not going to go into this in detail, because you can Google what these things are if by any chance you don’t know. But I just want to point out some of the really interesting things, in practical terms about the two brands which I’ll be talking about play-doh and Coca-Cola. So trademarks effectively is about protecting identity. Okay so one of the major kind of protections for a brand like Play-Doh would probably be the fact that the name is quite distinctive, the logo is very distinctive and therefore there’s an identity there which can be trademarked. But it’s more than that as well. I mean you can try and take this to the furthest possible degree. So when I was researching this topic online I found a trademark application had been submitted for the scent of Play-Doh. I’m just going to read this out. The application listed some or at least the report I found stated that the application listed something like a unique scent formed through the combination of a sweet slightly musky vanilla light fragrance, with slight overtones of cherry and the natural smell of a salted wheat based dough. Now I have actually no idea how protect-able that would be. I don’t know enough about a scent, I don’t know enough about trademarks. In fact I probably don’t know much about anything (!), but that’s another point. The reality here is that you know the brand owner has gone to great lengths to try and protect this and obviously the scent being quite a large part of the consumer experience. It is understandable why they would go for that. Patents are probably outside of the scope of this podcast to a degree. But my understanding is there may be patents involved in terms of the formulation and the process of producing Play-Doh.
The second thing we need look at is own-ability. So where you’ve got legally own-able brand intellectual property, it can be bought and sold and often for hundreds of millions of dollars. So when I talk to business owners about this topic they are so much more interested in who’s buying what product from them, what there sales are &, how’s the P&L look. But actually in the end if you own brands you have a number of benefits. You can continue to deploy them for your own benefit to continue driving sales. You also actually have a tangible asset that can be sold.
So just as one example this is a recent example of the time I am recording, Hasbro recently announced the acquisition of the Power Rangers brand for a reported (I don’t know if this is entirely correct), but it was reported a price of $520 million usd. Now there are some out there who would look at Power Rangers and say it is a group of martial arts enabled teenagers in brightly colored suits. Okay you could and people probably have made that point. But the reality is Power Rangers is a brand. You know it’s a brand because those brightly colored suits are protect-able, and they are own-able. They are distinctive, they are distinctive to Power Rangers. The style of the weapons used in the fighting scenes are very distinctive. So the reality is there is hard tangible value in owning brands. You know another example to go back to Coca-Cola. Coke paid seventy six million British pounds which I think at the time of recording is around $110m usd. I might be slightly out there. So again effectively that’s a company with consumer products, very good products in my personal opinion. But in the end Coca-Cola could easily have made similar products should they have decided to with all their corporate resources. But there’s significant value in the brand itself and even in the ethos of the company. So there was a business case for them making that acquisition. In terms of the brand owners obviously they build something from being a nice drink to being a highly valuable brand and that’s really my point.
Back to Play-Doh ,I would personally very sincerely doubt that this would ever be on the cards in all likelihood, but if the Play-Doh brand was sold today, in all likelihood it would fetch hundreds of millions of dollars. You know as this goes this is a brand which is basically based on a kind of a formula mostly containing flour, water and salt. So brands are really really important for business. The third factor in terms of what brands should be is leverage-able. Or effectively this comes down to brand extension. So obviously launching new products is risky, because most new products don’t really work to the extent expected. It’s hugely expensive to develop them, it’s usually expensive to research them, it’s usually expensive to market them, to buy the inventory and there’s an opportunity cost in terms of your ability to get them onto shelves versus other things you could sell. So it’s very risky…but brand extension offers the chance to take something you already have which is proven and to try and extend it in a different direction to create another new product which will also sell and compliment, at least in theory it should complement the main product that you have and not cannibalize those sales and when you built a brand to the strength and to the reach of Play-Doh or Coke, it can make sense, it can certainly make sense to brand extend. The considerations are to identify a slightly different consumer segment in terms of demographics or the same people with a different need, a different time, different purchase occasion – any of these things can lead towards good brand extension products.
Now one of the major observations I would make here is that it’s often a mistake to presume that a brand extension will deliver sales on the same scale as the product or the item that it’s extended from. You know naturally speaking you know if a tree kind of propagates, if it drops seeds eventually what comes from that could end up being the same size. But it’ll take an awful long time. But sometimes brand owners and companies blithely wander in expecting that because it’s from a certain brand. It will sell huge kind of hero levels of products from day one and it’s not always the case.
Hopefully this won’t sound too arrogant, but once upon a time I came up with my own lower brand extensions. so Reece’s law of brand extensions is that effectively if you have one parent item you try and extend it, if you expect or if you need the extended product to sell more than one-third of the parent product for it to be a success, you are probably setting yourselves up for failure. I’ve worked on brands where brand extensions have outsold the original. I’ve worked on brands where brand extensions have achieved maybe 5% of the sales of the original. So you know it could be anywhere in between. The reality though is that as a general rule brand extensions should be expected to sell a fair bit less than the main SKU – unless there is a huge latent consumer need or retail demand in a direction which is different from your core product, which you can’t rely on.
So as far as brand extensions are concerned you know obviously Play-Doh has various iterations. You don’t just buy the cans on the tubs of dough. You buy various play sets with added characters, with cutters, with big physical play sets. You can buy the work stations or the tables that you might play with Play-Doh on.
You don’t just have Coke, you have Diet Coke. You even have Diet Coke with cherry flavor or lime flavor. There you’re talking about a brand extension of a brand extension. I don’t know quite how Reece’s law of brand extensions applies to that. But if you ever wanted an example of how a brand can be successfully extended, Diet Coke is THE example! Coke Zero would be another example. They’re all brand extensions from the core product and brand. As far as Play-Doh is concerned there’s been an app in recent years which actually has the most amazingly catchy line ever. You should you go and listen to this, I guarantee you will struggle to get the jingle out of your head! There is also reportedly a Play-Doh movie in the works which could further build the brand and open up other commercial opportunities and potentially you know hugely enhance the value of the Play-Doh brand.
So I guess in summary if a company can make a brand which is effectively based on a mixture of flour, water and salt into a huge highly valuable brand with retail listings around the world, with brand extensions and all the things we expect from a major brand, then you should be able to make a brand out of nearly anything!
My key question to anyone listening to this podcast is are you building any brands? Should you be building any brands? What could brands do for you? What kind of brands should you be building?
But also what can you learn from looking at how other people have built brands and I think in the end if you take that approach, you’re far more likely to achieve the success which you’re looking for, but perhaps more importantly also the longevity and the stability, because brands tend to hang around for a long time if they’re successful.
So that concludes Episode 4 of the Playing At Business podcast. I’ve been your host Steve Reece. For more on us please feel free to go to www.KidsBrandInsight.com Please do feel free to get in touch and let us know with future topics you might want us to cover. In the meantime thanks and bye.
Playing at business with Steve Reece. The business podcast with a sense of fun. To find out more, go to www.KidsBrandInsight.com