Today, July 4th, represents our Independence Day as a nation. It's a time for celebration of our freedoms, our forefathers, and for those who have served, and continue to serve, to protect the freedoms that we often take for granted. For some of us, it's also a time to shoot off an excessive amount of fireworks. Here's a hint... I fall into both camps.
With today's contagious patriotism in mind, I thought it would be worthwhile on this reflective day to dig a bit deeper into a recent survey conducted by research firm Brand Keys, and published by USA Today, of America's "Most Patriotic Brands." The survey conducted by Brand Keys covered some 35 sectors, included 197 total companies, and questioned 4,500 respondents to come up with the U.S.'s most patriotic brands.
Here are the results:
Brand Keys' formula, as we've witnessed in previous instances, focuses on customer engagement with the brand. Ultimately, better engagement drives loyalty, and loyalty drives sales, repeat sales, and referrals, which are the bread and butter of the retail business.
The way I see it, there are four components that all of these brands share that helps drive consumer engagement, and makes them an integral part of American culture.
Rich company history
Possibly the most defining factor of many brands on this list is the role they've played throughout American history. Many brands can date their roots back more than a century, which instills a sense of foundation and heritage with younger and older consumers. As USA Today pointed out, Chrysler Group's Jeep was the "brand known for winning World War II," providing ground transportation to troops overseas. Interesting enough, Ford was the only other auto brand to even crack the top 25. Despite its rich history in the U.S., its lack of involvement in previous wars disassociated it from gaining traction on the most patriotic brands listed above. No General Motors brand even finished in the top 25.
Similarly, brand value and recognition play an important role. While you can certainly go to Hong Kong or Shanghai and enjoy Disney's theme parks, the concept of family-oriented theme parks (in a large sense) originated in the U.S. The same goes for Coca-Cola; you can't think of Coca-Cola's influence without driving around the U.S. and seeing its image plastered in nearly every city you travel to.
The common image we're shown in ads on television and online when Independence Day rolls around is of the American family. Brands that have universal appeal to mom, dad, and the kids are bound to strike a chord more powerfully than brands that don't.
Perhaps no brand in the top echoes this better than Disney, whose entire purpose is to entertain. Its theme parks are meant to bring families closer together, and the entertainment provider recently signed a long-term deal with streaming content provider Netflix to deliver its classic movies to living rooms around the U.S. almost immediately, with newer movies hitting Netflix's digital library beginning in 2016.
You could also make an easy case for confectioner Hershey, as well. Honestly, how many people do you know who don't like chocolate? Chances are that everyone from mom to dad and the kids are thrilled to dig into a pile of Hershey's Kisses.
This builds on brands being family oriented, and is sort of the "Duh!" factor of the bunch; but brands that engage consumers by being entertaining, or bringing joy, tend to offer higher patriotic engagement scores. This is really where a company like Hershey would shine, given that research shows that chocolate increases dopamine and serotonin levels in the brain, which triggers heightened motivation, and also relaxes tension. What better way to celebrate the holiday than relaxing with some chocolate, right?
This could also be the factor that kept a company like Procter & Gamble (NYSE:PG) from busting into the top five with two of its leading brands, Colgate and Gillette, which finished sixth and 11th, respectively, in polling. While P&G certainly has the brand history and recognition to back up being a part of Americana, brushing our teeth and shaving aren't exactly the family-oriented, joyful events that, say, going to a theme park, or chowing down on chocolate can be.
The final engagement factor that I believe drives patriotic engagement among consumers is the dependability of the brand. We've already touched on one component of dependability: a company's historical roots. Obviously, having endured decades, or a century or more, of economic ups and downs means the brand can be trusted by consumers to be there for many more decades to come.
There's also the actual dependability of the brand and/or product itself. This could be one of the primary reasons why we don't see any GM brands appearing in top 25, given its bankruptcy reorganization in 2009. Having sought bankruptcy protection removed the dependable tag consumers often associated with GM.
This is a category where denim-products maker Levi Strauss shines. When it comes to denim pants, no brand is better known in the U.S. than Levi Strauss, and no jean more classic than its "501," which had its introduction as far back as the 1890s.
Looking at this from an investing perspective, the key point here is that the companies behind these brands are doing a fantastic job of targeting their marketing, and utilizing their brand value, to drive sales.
While Coca-Cola does spend quite a bit on advertising -- nearly $3 billion in 2010 alone -- it can let its branding do the talking for the company. As the most valuable brand in the world according to Interbrand, and operating in all but two countries worldwide, Coca-Cola's bottom-line growth is practically self-sustaining.
Disney has also done a phenomenal job hitting its target family audience through theme park expansion and modernization, as well as by hitting the basic components of media entertainment by driving growth at ESPN, and forging content deals with Netflix and DreamWorks Animation to capture the younger audiences.
If anything, this survey gives risk-averse investors some research fodder for potential future investments – in between setting off fireworks, of course.
Have a happy and safe July 4th, Fools!