Brands Create Customers

Enough said.

Chowhound, a popular food site, has a long discussion, comments from the author of the DallasFood report, and some PR jousting.

Well, to answer this question right at the start, the answer is “yes.” In fact, a lot of mainstream brands have already gone over the falls, but their demise has been shrouded in mists of mismanagement, buyouts and bankruptcy. But make no mistake about it: they were brand failures first. The other things happened when they had already let themselves drop over the edge.

The mainstream brands that are still afloat are somewhere upstream, in the middle of the flow, enjoying the serene drift. Perhaps they can’t hear the deafening thunder of their fate, but they’re surely coursing toward it.

What makes a mainstream brand?

Mainstream brands are defined by their assumptions:

1. They assume brands are all about shaping perceptions, rather than delivering value.
2. They assume the sole mission of brands is to push the product. In their view, brands are “the salesman on the package.”
3. They assume customers are only valuable as one-dimensional “consumers,” and that customers can add no value back to the brand, or to the business.
4. They assume that the only way to build their brands is through top-down media campaigns.
5. They assume that brand success means corralling and containing the customer—under lock and key if at all possible.
6. They assume that brands are a substitute for innovation. Get people to believe in “the brand” and you can stop innovating and preserve the status quo, forever.
7. They assume that brands “never rock the boat.”

And then they feel the waters quicken, and hear a distant rumble.

Noka, a Texas company that sells some of the world’s most expensive chocolate, now faces an apparent life or death brand crisis. In late December the food site DallasFood.org published an in-depth, 10-part analysis of Noka chocolate, slicing through Noka’s promotional fluff to reveal the facts behind the “luxury” chocolate that Noka sells at monumental mark-ups. The series title: “What’s Noka worth?”

A potential meltdown

The results don’t look good for Noka. The extensive DallasFood analysis, which appears to be fact-based, deeply researched and well-informed, concludes that Noka isn’t a chocolate maker at all, contrary to the identity Noka projects on its website, in interviews and in promotional materials. According to the analysis, Noka buys bulk chocolate from Bonnat, a high-end French chocolate maker, melts it into desired shapes, wraps it in high-sounding but often meaningless terms, adds a veneer of packaging, and then marks up its “luxury” chocolates as much as 1000%—while taking full credit for the product.

Noka claims to “specify” the chocolate it buys, thus making it “our [Noka's] chocolate,” as if it were a special formulation conceived by Noka itself. The DallasFood report casts doubt on the merit of this claim.

Not really “bean to bar”

Noka is oficially a “chocolatier” — a chocolate candy maker and seller. It uses the term to describe itself, but never defines it. Noka does not buy cocoa beans and process them into chocolate, “from bean to bar,” as does (for example) Scharffen Berger and many other elite chocolate makers. In other words, Noka is just like your neighborhood See’s. They buy chocolate from chocolate makers and fashion “chocolates” from it. But to justify its immense “luxury” prices, Noka must wave some magic wands.

(The DallasFood analysis calculated that for $7.50 one could readily buy a bar of the same chocolate that Noka sells for $100.)

At risk: Noka identity, trust and reputation

The DallasFood analysis concludes that what one tastes in a Noka chocolate does not come from Noka, and that there is no way Noka’s high prices can be justified by any value that Noka adds on its own.

Until Noka addresses the details of the DallasFood analysis head on, it faces a three-pronged crisis of identity, trust and reputation. Moreover, this crisis is apparently of Noka’s own making. If its “luxury” chocolate is crafted from self-made myth, it cannot hope to accelerate its myth-making to get out of its chocolate-painted corner. If will have to “get real” — as great brands do from the get-go.

A study in brand integrity

The DallasFood analysis digs deep into the very essence of brand integrity. If you work with brands, you should read it. On one level, it’s a lesson in the modern business of chocolate. On another level, it clearly identifies the points of integrity that are crucial to building a brand as a chocolate maker or chocolatier. You’ll get a real feel for the craftsmanship and hard work that go into many world-class chocolate brands. It’s not an easy business.

And now for some interesting brand-related questions.

Is Noka a brand?

The results of the DallasFood analysis raise the question of whether Noka actually qualifies as a brand. Just because it looks like a brand doesn’t mean that it is a brand. Brands hold themselves to exemplary standards. They lead by example. They’re deeds, not words. They’re transparent. And they operate with a baseline integrity that nurtures trust. The fact that a product flaunts a bold identity doesn’t mean that it automatically rises to the level of a brand—any more than an overweight, pasty-faced dweeb in a Michael Jordan jersey rises to the level of NBA basketball. In other words, brand status is earned, not self-appointed. You can’t fake it.

Or is Noka paying the price for marketing spin?

If Noka isn’t a brand, what is it? Based on the DallasFood analysis, the Noka offering appears to be largely marketing spin. Let’s define this term: marketing spin is the conscious fabrication of half-truths, fictions, false analogies and misinformation to create the illusion of substance. Companies that embrace marketing spin pay only lip service to brand principles; they reduce brands to little more than cosmetics.

Marketing spin: illusions of value

Marketing spin works by creating illusions of value while keeping relevant facts hidden from view. The easiest way to employ it is to re-frame a product in terms of more attractive associations. In Noka’s case, chocolate is re-framed in the lofty language of fine art (“collections”) and fine wine (“vintages, terroir“). Marketing spin may seem to be a way “to get something for nothing,” but it comes at a very high price. It erodes and undercuts brand value. While brands raise the integrity bar, marketing spin kicks it into the ditch.

The importance of creating customers

A brand works to create customers who can add value back to the brand. Marketing spin is based not on creating customers, but on creating greater fools. That’s the big difference. A company based on marketing spin cuts itself off from the many ways that customers themselves can advance the business—as engaged and informed partners in the product process. The stronger the customer, the stronger the brand—and the business.

At present, Noka may be more a brand of marketing than it is a brand of chocolate.

The Noka brand challenge

If Noka aspires to be a trustworthy brand, it will come up with a fact-based, point-by-point rebuttal to the DallasFood piece in the very near future. The place for this is the Noka website, in public view, where it can also address public queries. This has to come from Noka’s owners themselves, as they are the stewards of Noka’s brand integrity. Brands have truth on their side, and truth in chocolate will define Noka’s future.

Photo: Cocoa beans in a cacao pod, the super-pure, extra-virgin essence of chocolate. And completely inedible—until touched by the industry and artistry of chocolate makers.