As a marketing strategy, is promoting family ownership a viable option?

Author -  Allan Kent [Guest]

A lot of NZ companies promote that they are family owned as a key part of their marketing strategy. Does this help or hinder them?

I was recently working with a client on the strategy side of their website project and during the scoping session this subject came up. In this case the company manufactures natural health care supplements and some food products, and I wasn't sure whether this angle was the right one for it to take, especially as it intends to significantly expand its overseas sales operation.

Let me explain my reasoning:

I accept that a family ownership structure is often perceived by the public as a company that cares, that has values beyond mere profits, is concerned with its reputation and is therefore responsible in all that it does etc.  

However, it’s possible that in this particular case a negative angle also presents itself: 

  • The company might not have the ‘best’ people in key positions. Their products require a high degree of scientific knowledge and expertise. Might some of the key positions have been filled by virtue of a family name rather than on qualifications and experience? 
  • Although many companies do start off as family concerns, generally once they get to a certain size they revert to more open ownership for one reason or another. A company that is still family run therefore suggests that it is smaller in scale. Might this impact on its ability to meet client demands and handle financial setbacks as well as research and development limitations?

Now don’t jump down my throat at this point – these were merely my initial reservations with this marketing angle. 

To get a wider range of opinions on this topic, I posed the question to a LinkedIn forum, and the question generated a huge amount of interest! 

Some believed very strongly in promoting the family angle believing that the positives easily outweighed any negatives. Interestingly many of these advocates were from family run companies who stated that their marketing was indeed working very well from this angle.  Having said that, none were in this particular industry, and none were very big companies!  

Others were equally strong in their feeling against the family approach citing in the main the reasons above. 

One advocate of the family company structure pointed out Porsche as being a great example of a family run company. Now I don’t remember this angle ever being promoted, and personally I don’t think I’d buy a Porsche because of its ownership structure, would you? But the example did highlight one thing – Porsche became a great car company because of the passion it had for its products, in terms of design and engineering excellence. This passion is often found in family companies, and it’s this passion which leads to these companies providing great products and services. In a nutshell, it comes down to the basic concept of features and benefits. The ownership structure is a feature – the benefits are the passion elements described above, and it’s these that need to be promoted, not the ownership structure itself.

The forums qualified another thing for me too - the industry the company operates in is important too. Some businesses actually do lend themselves to the family ownership angle. For example if you are a family bakers making cup cakes – promoting the family recipe is a great approach, and implications of smallness simply adds to the unique appeal. On the other hand trying to apply this approach to a business where people imagine people in white coats and hats and production lines of pills and test tubes – much harder to associate that positive family spin to it.

This topic has been an intriguing one for myself and my client, but is certainly not one with definitive answers.

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