Brands And Branding

Brands and Branding “What’s in a name? That which we call a rose by any other word would smell as sweet”, said Shakespeare. What explains McDonald’s, Apple I Pod, Toyota and Harley Davidson, etc., to be among the top 100 brands? Is it their sales revenue? No. Is it their years of existence? No. Is it their global presence? No. If all of these are not indicative of the companies’ entitlement to feature in the global brands’ list, what then explains their inclusion? The answer is Brands. Because these companies are able to create, nurture, and sustain powerful brands and all the above stated inferences are consequences of these untiring efforts. The next question is what’s a brand? A brand is a collection of perception in the minds of the consumers and resides in the minds of the consumers and resides in their minds. It propels them with a very high perceived association value. A brand is not a by product, an ad campaign, a logo, a spokesperson or a slogan. It is a differentiating identity and the most important reason for the employees, investors and customers to associate with the company. It is the firm’s most important asset in the long term. It is also a bond between the customers and the company. A brand assures reliability and quality. Brand owners have a powerful incentive to ensure that each pie is as good as the previous one because that would persuade people to come back for more. Brands are perceptions. The Volvo brand stands for “safety”. The Mercedes Benz brand is associated with

“prestige”. “BMW means “the driving”. Can these perceptions be influenced or managed? That is precisely what is executed through branding. Branding is creating a corporate brand identity imprinted on the minds of consumers, and this requires brand positioning and brand management. Brands are the tools with which companies seek to build and retain customer loyalty and branding often requires huge investment on advertising and a good marketing strategy. A strong brand can raise prices as well as barriers to new entrants. In the age of increasing commoditization and at the juncture when the so-called “distinctiveness” is getting blurred due to increasing competition, the relevance of brands is questioned. An interesting phenomenon is evolving on the horizon pertaining to the role of brands. As the world economies are integrated, the income levels are also on the rise. Increased income levels are creating brand conscious customers. And these customers pay more for a brand because it seems to represent a way of life. They are affording an aspirational lifestyle as manifested by a brand. The companies that can match the aura of their brands with the aroma of new lifestyle stand to gain in today’s world. What is a brand today?

We live in a marketing world today. Everywhere you go, every corner you pass and any discussion you have is bound to be about brands- be it an F1 race, the World Cup, some big corporate scandals, some IT product/services you just brought, etc. Brands are all around us. Most CEO’s and marketing managers have realized that they are dealing with a very chaotic situation today in terms of brand building and marketing. Although it is important to gain marketing and promotional skills and know-how, it is even more important to question what one’s brand means to the markets in today’s context. What does it mean to be a brand today and tomorrow? Instead of defining a brand in the traditional context of brand identity, brand image, brand profile, brand DNA we can define a brand as an entity(product, service, company, person, technology, etc.,) that offers a set of value exchange measures between what the owner/market seeks and the price he is willing to pay for. The set of value exchanges can be portrayed as being similar to tentacles of the entity as it reaches out to engage the market, and in return the brand gains economic profits. Innovation is important in today’s competitive market; we can no longer qualify a product, service or company as branded just because it is well known. The importance

must be placed on the quality and the relevance that the brand brings to its market rather than the quantity of how many people know the brand. As we all operate in an informed society the significance of being known is diluted. Most people will recognize a trade name that is well advertised, but it does not mean that they appreciate the “brand” for the so-called qualities it represents or provides. A brand today must satisfy economic reasons to exist and those reasons have to be in context of today’s market and that of the future. Therefore, to be a real brand for today’s or tomorrow’s market, an entity must satisfy six value exchange qualities/dimensions.

The Six Brand Value Exchange Qualities A)Social Dimension To become a brand, an entity must have a social purpose. The social purpose can be to benefit the brand owner in his social setting, i.e., one that allows him to become more acceptable in a certain peer group or to perpetuate an ideal that the brand hopes to develop as a competitive edge, i.e., as a tool to grow a certain social trend or ideas which have a mass appeal for example, Nike-“Just do it”. To deliver and sustain this social dimension of the brand, companies must invest in the development of certain

product features or create programs/ processes/ campaigns that will allow the entity to fulfill that purpose. An entity that has no social dimension is simply satisfying the functional purpose of what it is supposed to do, for example, Bata with its “Power” brand is just manufacturing sports shoes without much cost on advertisements, knowing that people don’t really go for their sports range and stick to Bata’s formal collection. They compensate by displaying those shoes in their main Bata showrooms which gives them satisfactory sales. On the other hand a company like Reebok is trying to convince its customers of the social relevance of its brands by starting an add campaign staring Thierry Henry one of the best football players in the world to promote its slogan “Run Easy”. In India it is using Henry along with our cricketing Gods like Rahul Dravid and Mahendra Singh Dhoni for that very purpose.

B) Personal Enrichment Dimension A brand must bring relevance to the person who owns it. It must be able to bring about fulfillment that is more than just the functional purpose of the entity. Why would people be willing to pay 3 to 4 times the normal price for a bouquet of roses on Valentine’s

Day? It is because Valentine’s Day is a brand and on that day, couples can fulfill their desire to show the degree of affection and love to each other. It’s not about the roses or “oops…I paid three times more”. When the roses exchange hands between the giver and the receiver, both of them feel happy; their lives are enriched by the brand called “The Valentine’s Day”. Thus the true brand must be able to capture that essence of bringing about personal enrichment to the brand owner. Without that essence, it’s just another product or service or company. C) Influence Dimension A brand must be able to provide the brand owner with the capacity to influence an individual, a group, a situation or a society. However the most important influence that the brand must have is to enable the brand owner to influence himself on the ideals that he hopes to achieve or gain. An entity that lacks the capacity to influence cannot be classified as a brand because it offers no real capability to earn economic value, such as enabling high growth increment in sales. This perhaps explains why many companies invest heavily in advertising and promotional activities yet they fail to achieve high sales return from those investments. While these companies see high sales only during the period of promotion, they suffer an almost exponential slump in sales when those

advertisements are stopped. There is no strong sustainable high sales growth because their entity lacks the power to influence. D) Innovation Advantage Dimension These days innovation is the key word for the business to survive. Companies wishing to become a brand cannot afford to be followers. They must invest significantly on innovation that will provide them the first mover advantage to quickly capitalize on the opportunity of the day and maximize the economic returns from their market share. There is no point in claiming to be branded while you are just a laggard or copycat to innovative ideas brought by others. Society admires and support leaders who bring meaning to their lives. This has been so in the past and it will be so for times to come. Innovation can be in many forms like the product functions, aesthetics business processes related to the brand, etc. E) Security/ Assurance Dimension Security, or in layman’s language “peace of mind”, is an important quality of a brand makeup. No company should seriously claim to be a brand or that it owns when it cannot afford it’s market the “peace of mind” form the point when the brand is first communicated to the point when the brand has exhausted it’s usefulness to it’s owner. Security and assurance builds trust which is important for a brand to grow its economic value and profit from it. Although the

security assurance aspects of the brand can be provided by process means like providing lifetime warranty programs, etc., it is even more important for the brand to project and provide this quality from the experiential and psychological aspects of the brand. F) Access and Availability Dimension It is not uncommon to find great and truly unique products or services that can have considerable mass appeal to be completely inaccessible or unavailable. For an entity to be a real brand, it must be reachable to the target markets through proper development of access channels. The brand distribution must blanket the entire market it intends to cover through various mediums. Companies must also put in place policies and business processes that encourage the brand to be as close as possible to its prospective markets. You and I have come across many situations where the policies and the business processes or procedures of a company simply turn off our initial interests in getting to know more of the brand. It is not uncommon to come across many red tapes and barriers to access a certain service due too policies that are put in place. We have also experienced inconvenience to locate a certain brand due to its retail location, strode environment, etc. Inappropriate price barriers also turn off customers. All these barriers prevent the brand to become successful.

Therefore, a true brand management must seek to address these issues and begin to build greater accessibility and availability as a part of the quality of its brands. These six value exchange dimensions are important to define what a brand is today. This is the essence of a true brand and a better understanding of what a brand means today can help companies to manage their brands better for the future. Companies need not waste money and resources on programs and activities that have no impact on their strategic goals. A more organized systematic top-down structure within the organization from policy making to business processes is required to build and manage successful brand.

TOP DOWN STRUCTURE

An Expert’s View AI Ries is the author/co-author of 11 books on marketing, including his latest, The Origin of Brands. He and his daughter Laura run the Atlanta Based marketing strategy firm Ries & Ries ( www.ries.com).

In the last ten years have the connotation of Brands and Branding changed? What are the new insights on the horizon? Ten years ago, the emphasis in marketing was on “selling”. Success was measured in terms of what a company’s current sales were increasing, remaining static or falling. Today, however, companies have become to realize that their most important assets are their brands. The objective of a marketing program should be to build a brand, not to sell a product or service. Selling is a function of the sales department. If a company does a good job of building its brands, then the selling process is greatly enhanced. The newest insights, as we see is it, is that brands are built, not by advertising, but by PR or publicity. In “The Origin of Brands”, you have talked about the great tree of brands. How easy it is and how difficulty is it to build and nurture a powerful tree of brands? As time goes on and as a category diverges, it becomes difficult for a company to dominate an entire category tree. A single company doesn’t have either the technological skills or the resources to do that. Rather, a company should be selective and a tree to dominate only certain branches of a diverging tree. Take Coca-Cola, for example. The company is

trying to dominate all aspects of a diverging softdrink tree. The truth is the company doesn’t lead in any category except its original cola category. It should have been more selective. Try to dominate only those diverging categories where it has some inherent advantage. How do you define a brand personality? At what stage of life cycle do you articulate and infuse brand values that may nurture and might define a brand personality? The brand doesn’t have a personality. It’s the users of the brand that have a personality. In other words, a brand lives or dies inside the mind of the prospect. Certain brands appeal to certain segments of the market. Starbucks, for example, appeals to young, affluent sociable individuals. It’s these individuals that give the Starbucks brand its personality. In the best of all possible worlds, you should select the target market before launching a new brand. If you do a good job in marketing the brand to that target market, then the brand itself will assume will assume the personality of the target market. To what extent does differentiation help in building a strong brand? How can the differentiations premise be extended throughout the lifetime of a brand?

Every brand that becomes successful starts out with a strong differentiation. Take Rolex watches. Initially, Rolex was the first brand of expensive watches that prospects learned about. Furthermore, the product itself was differentiated by its unique watch brand. Today, Rolex is a powerful world wide watch brand. But it’s not different anymore. There are many more brands of expensive watches that mimic the Rolex watch brand. But Rolex continues to be the most successful high-end watch brand. Be first. Then let your competitors copy your strategy and you will remain successful even after your differentiation disappears. What according to you are the five most important things companies must do to build strong brands and to nurture a strong brand? 1) Be first. It’s better to be first than it is to be better. McDonald’s was the first hamburger chain. 2) Launch the new brand with PR. 3) Own a word in the mind. Volvo owns “safety”. BMW owns “driving”. 4) Be visually different, the curves of a Coke bottle, the grill of a Mercedes can be considered as an example. 5) Use massive advertising after the brand has achieved credibility in the minds of consumers.