SAN FRANCISCO - When you think of John Deere, what comes to mind? Tractors? Lawnmowers? Grain? Feed? SHMOs?
As anyone familiar with the Nike, Nabisco, or Netscape logos will attest, brand identification is a desirable characteristic when it comes to marketing to consumers. In an era of quick recognition and competitive markets, companies from soft drink makers to clothiers are positioning their products to prominently feature a familiar label.
Attendees at the conference of the Alliance for Healthcare Strategy and Marketing here a few weeks ago discovered that in the case of John Deere, even brand recognition didn't guarantee one company's success in its foray into the arena of consumer healthcare.
Thomas J. Dubbs, president of Dubbs Research Network in New Providence, Pa., emphasized at the conference that while brand recognition is no guarantee of an HMO's success, the variable may be used to determine a health plan's marketability when accompanied by other factors. He cited the recent Aetna-US Healthcare merger as proof that much equity still exists in name alone.
Detailing a study he undertook to determine the branding power of John Deere Health Care (JDHC), Dubbs traced the history of the company's HMO from its roots as the Quad City Health Plan in 1974, to its first commercial offering in 1985, to its first operating site outside of Deere and company seven years ago. Currently, though JDHC tallies just 1% of the company's total expenditures; the HMO represents 18 markets, 420,000 enrollees, 1,000 employer groups, 5,000 network physicians, and 105 hospitals; and covers 75% of all John Deere employees and retirees.
With JDHC's advertising campaign ready to roll out in 1996, the company hired Dubbs' research network to assess the potential reputation and branding strength of an entity once known only for its well-running lawnmowers. Dubbs' particular challenge was to parlay a brand associated with reliable farm implements into one known for quality healthcare.
"They had altered the logo slightly, changed the lettering, changed the color to teal green," he said. "But they still had that problem: John Deere Health Care. Can you marry that association?"
Dubbs' research study focused on this and other questions: How much did the insurer's name impact the choice of a healthcare plan? How does one measure the perceptions of John Deere in the marketplace versus its key competitors? How does one position JDHC versus those competitors?
Tabulation came from 100 18-minute interviews in several markets across the midwest and south, including Quad Cities, Des Moines, Peoria, and Knoxville.
The company's findings were a little surprising. According to their research, brand identification as an influential factor only ranks 7.65 on a 1-to-10 scale of importance in health insurance decisions - placing it below overall HMO quality, rapport with physicians, customer service, availability, and ease of acceptance, and just slightly above rankings of plan options, community perception, and access.
In addition, more than half of those polled said that brand name would have "no impact" on their selection criteria when selecting their HMO.
"This brings about an interesting point," Dubbs noted. "Right off the top you notice that most of those polled say branding has no influence. But you're looking at a hierarchical decision, a pyramid in which items on the bottom - quality, acceptance, and rapport - represent where you have to start. HMOs [selling] to a new marketplace have to associate themselves with good acceptance, with doctors that are easy to deal with. If they don't have that, they're not moving any further up the scale."
It's important to note also the demographics of the agricultural markets Dubbs polled. With a population of 400,000, Quad Cities represents a home field advantage for John Deere: its HMO penetration is at 27%, and JDHC has claimed the lion's share of that. Elsewhere, Peoria and Des Moines represent similar populations and similar HMO penetration, but the company lays claim to small portions; likewise, the Knoxville metropolitan market is much larger, and JDHC's HMO penetration even smaller.
Research Leads to Reality
The bottom line? The new markets weren't ready for John Deere Health Care and so, in 1996, the HMO suspended its advertising campaign, redesigned it for later in 1997, and concentrated remaining their advertising revenues in key markets where growth potential was high.
"A well-known brand can open the door, but it can clinch the decision only after it's perceived as providing other critical factors," said Dubbs. "In this case, the company's strong reputation was an asset, but it alone couldn't carry the plan in some markets.
Campaigns by people like Nissan or Citibank are not playing up the attributes of the product, they're playing up the brand name. But when you think about healthcare- with its mergers, acquisitions, changing and adding brands - marketers are still pondering the question: "What's in a name?" (Dubbs Research, 717/786-2378)