“Brands have taken on a godlike status: Consumers find greater meaning in them and the values they espouse than in religion.”
– Young & Rubicam .
Brands are more like “best friends” – they form an important part of our lives, carry specific meaning for every individual and are accepted or rejected based on how well they keep promises. Brands are so ingrained in our daily life that we cannot do without them.
Evolution of Brand
Walking down the memory lane ‘of branding’, we can find the English artesian Josian Wedgwood building the first modern business brand. Wedgwood was able to stimulate demand for his more profitable tablewares and command premium price over comparable tableware and other products. Those were the days of the 18th century when the term branding was not known. By the 1920s branding as a discipline had emerged as one of the key tools of marketing. Pioneers in the development of this discipline were Procter & Gamble and Lever Brothers.
Goodyear* in 1996 described the evolution of brand in six stages. The first four stages represent traditional classic marketing approach where the value of brand was instrumental as it offered customers certain ends to achieve; the last two stages represent post-modern approach to branding.
Stage I: Unbranded Goods – in early days, goods were unbranded. [Products such as matchbox and paper pins still fall under such category.]
Stage II: Brand as a Reference – with the emergence of mass production, customer had a choice. This forced companies to differentiate their offerings to customers. At this stage of branding, differentiation became the driving force, which was primarily achieved through changing physical product attributes.
Stage III: Brand as a Personality – with the passage of time, it became extremely essential for companies to differentiate brands on rational or functional attributes, as many products started making the same claim. Therefore, to differentiate their product from competitors, marketers started personifying their brands. ‘Beauty soap for film star’ – Lux is the classic example of brand as a personality.
Stage IV: Brand as an Icon – marlboro represents independence; Nike stands for winning; and Rolls Royce as an epitome of luxury. All these brands are deeply rooted in consumers’ mind – they are brand icons. In this stage it appeared as if consumer owned the brands and they used it to create self-identity.
Stage V: Brand as a Company – personifying company as a brand is an ongoing change that also marks the post-modern marketing. Post-modern marketing is about consumers being proactively involved in the brand creation process. Brand as a company is a stage where a company considers strengthening the total access of information about product and services with a customer-enhancing relationship.
Stage VI: Brand as a Policy – ‘The United Colors of Benetton’ ad campaign creates an ethical unity, Body Shop and brings to light social issues like environment and treatment of third world people. Such are the examples of brands in the stage of ‘brand as a policy’. Today, only a few companies have entered this stage, wherein their brands are closely identified with ethical, social and political issues that are the constituent elements of the brand as a policy.
These six stages clearly define the development of a brand from a ‘me-too’ product to a power brand stage and beyond. Coming out of the shell of product branding today, brand managers are branding every possible thing on this earth. The practice of branding, in the changed business environment, extends across a wide spectrum, from product to companies, to CEOs, to celebrities and to the extreme end of religion. Today, anything that falls under definition of a common noun can be a brand.
* Goodyear, Mary (1996), “Divided by a common language: diversity and deception in the world of global marketing,” Journal of the Market Research Society, 38 (2), 105-122.
Elements of Branding
Brands are living components that we have been holding in our minds for years. What goes into them is both, logical and irrational. Products and services will continue to come and go but the residual experiences of customers who consume them will ultimately define the brand. These residual experiences of customers help brands develop an image.
The act of imprinting the brand image firmly in the minds of customers is a great challenge to marketers. The act of image building has two basic components, positioning and consistent delivery of quality.
Positioning a brand is about interaction with people, what they read in press, style of advertising, quality of products, and efficiency of after-sales service. Branding is nothing but positioning a product successfully in the minds of the customers. If a brand is well positioned in a customer’s mind, half the job of directing customers to buy their products or services is done. The power of a brand is all about how customers associate their feelings with the brand. Long-term customer association can be built only through building emotional associations around a product.
It is true that emotions help develop an everlasting image of a brand. In fact, they help the brand develop a god-like character. There are few other elements of branding, viz., functionality, point of differentiation, and the product’s value that gives brand strength to survive in the rough corporate weather. Once a brand attains a respectable status it needs to deliver consistent positive quality. It strengthens the bond between the customer and the brand and they tend to develop strong feeling for that particular brand. With passage of time, the very same positive feeling transform these customers into brand evangelists.
There are a few brands that successfully transform their customers into brand evangelists, like Apple Computer, Linux, and Harley Davidson. Harley Davidson is a brand which is built solely on emotional association and consistent quality delivery. It is perhaps the strongest brand in the motorcycle market. The other motorcycles in the market essentially with the same engineering quality and performance are not in a position to charge even one-third of the price of Harley Davidson is able to. Harley Davidson customers are always ready to wait for months to get a motorcycle. Definitely, Harley Davidson is one among the very few cult brands the global market has. Cult branding is more than just strong branding, though not all the brands are positioned to become cult brands. A few of the well known cult brands are Oprah Winfrey, Volkswagen Beetle, Star Trek, World Wrestling Enterprise, Apple Computer, Linux, and Harley Davidson.
Building a Power Brand
In 1998, Philip Morris took over Kraft in US and Nestle bought Rowntree in Europe. Philip Morris paid four times the value of the target company’s tangible assets whereas Nestle paid over five times. Such incredible payment for names were the reflection of the value placed on the brand in terms of long-term profit expectancy. Definitely, a good brand is a great asset but it takes years of dedicated effort to build it and great care has to be taken in maintaining the brand once it is established.
Many companies believe that they have a brand but in actual sense all they enjoy is name-recognition. The name-recognition may help a company in generating onetime business. A name becomes a brand when the customer associates the name with the set of tangible benefits and other set of intangible benefits from the product or service. A brand offers a distinct value proposition and consistent quality delivery,which, in turn, provides loyal customers to the company. Philip Kotler, a leading marketing guru says, “The most enduring meanings of a brand are its values, culture, and personality. Brands give the seller the opportunity to attract a loyal and profitable set of customers and strong brands help build the corporate image, making it easier to launch new brands and gain acceptance by distributors and consumers.” Moreover, a brand simplifies the everyday choice, reduces the risk of complicated buying decisions, offers emotional benefits, and offers sense of community.
In most of the cases, journey of power brand starts with unbranded ‘me-too product.’ With effective communication, an unbranded product generates brand awareness. Brand awareness backed by strong brand promise increases brand acceptance in the market in course of time. When the market starts accepting a brand, quality control helps increase brand preference and consistent promise delivery with passage of time generates brand loyalty. Strong brand loyalty is the first step towards the development of a power brand.
A brand becomes a power brand, when it meets all the branding basics – adistinctive product, consistent delivery, alignment between communication and delivery and brand personality and presence. A power brand helps a company leverage all available business opportunities. McKinsey’s five-part approach, ‘Brand Accelerator Model’ helps marketers position their brand. It proposes to build strong brands faster than the competitors. The five steps that build a strong brand are:
• Creating a compelling brand strategy
• Delivering a consistent, distinctive and inspiring customer experience
• Building unique brand presence approach
• Leveraging the brand for growth and optimizing brand architecture
• Shifting the brand organizational development.
In fact, a power brand provides a win-win situation to the customer and the company. This is what makes branding strategy one of the crucial factors for organizational growth. Brand strategy needs a careful thought and intensive planning backed with a well-researched study of the market and its complexities. CEO of Brand Stream, Scott Bedbury emphasizes that it’s time to build a strong
brand that evokes trust from customers.
Brand: The Changing Dimensions
Branding, with time, may have changed in form but elements of branding remain unchanged. Though branding is an enticing act for most marketers and consumers to associate certain positive, and exciting feelings with the process of brand management, there is a difference between the participation level of employees and customers. For the customer, it is an act of excitement and fun, which is done for awareness development. But for marketers, the same branding exercise means not only advertising and awareness development, but also strengthening the internal as well as the external core of brand.
Branding as an exercise is influenced by external and internal environments. The business functions, viz., marketing, sales, finance, production, research & development, and personnel have a definite role to play in brand-building exercise. Moreover, these functions are inter-dependent and intrinsically linked with one another for better functioning of business. The other set, which constitutes the external environment, comprises customers, competitors, advertising and public relation agencies, and distribution channels.
A company can develop power brands by maintaining a right balance between the external and internal environments. Bringing this balance helps brand create value through consistent positive quality delivery and its offerings, which satisfy customers and makes them opt for the brand regularly. At the other end, it also helps build a strong marketshare, maintain good price levels and generate strong cash flows. Companies like Coca-Cola, Microsoft, Intel, Nokia, Levi’s, Gillette, Disney, GE, American Express and Sony enjoy power brand status. These brands realized long back that brand management, as a function, has crossed the boundaries of marketing, penetrating into all other functions of business operations. They have also realized that the success of their business is mostly based on the success of their brands. They are experiencing brand-based business model. Sam Hill and Chris Lederer, associates of Booz-Allen & Hamilton, advocate that the next decade might see the brand-based business models becoming the dominant corporate norm. To develop a brand-based business, companies have to focus on a strong brand portfolio rather than an individual brand. To develop a portfolio of brands, it is required to classify brands of company into three groups: lead brand, strategic brand, and support brand. The lead brand is the center of brand portfolio – it carries most of the burden of the company’s sales and pulls customer to company’s product. The strategic brand lures new users to the brand portfolio. The support brands pull those customers who are on the fence, into the company’s product.
The key to the success of brand portfolio management is to think of brands as an asset and to measure the risk and return of brand. Moreover, developing a brand portfolio in this ever-dynamic business environment is not enough. Companies for sustained growth also need to convert their brand into Masterbrand, which helps create strong relationship with customers, provide direction to the employees, offer value proposition backed by entire company, help company erect greater barrier to entry, and infuse ability to innovate and change. Masterbrand also explains why a strong brand should reflect the organizational values, culture and strategy, which is very much reflected in branding strategy of global Masterbrand like American Express, AT&T, IBM, Samsung, and Sony.
Branding – A Collective Responsibility
Today, who doesn’t know of Nike and Starbucks? Sneakers were sneakers until Phil Knight came along to brand it as sports and fitness product and coffee was just a hot beverage until Starbucks created an excitement around its consumption by branding experiences. These brands stand successful even today because they consistently evoke positive feelings with each new product, services, or marketing campaign. These brands stand strong and have survived all bad and good seasons of business turmoil because they enjoy strong internal and external mix of branding.
It stands true not only for Nike and Starbucks but for any product or service offered to customers. Nike and Starbucks emerged as powerful brands because contrary to the conventional wisdom – branding stands true for external communication, its aim is to attract new customers and influence the old ones – they established their brand with the help of their employees. The old view has lost its significance in the
new market structure where companies in the midst of restructuring their business strategy need to communicate to their employees as they do with their customers.
In this new brand world, branding is not only domain of marketer but it has gone ahead to shop floor and, to the employee. In fact, brand-building exercise is the responsibility of the entire enterprise, including CEO. Most of the successful companies’ CEOs are managing branding exercise directly from most successful companies and the success stories of these companies have proved that the top boss of the companies should manage the branding exercise. Michael Dell of Dell Computer and Richard Branson of Virgin have done great job in positioning their brands globally. Richard Branson infused brand in the culture of the company and at Dell Computers brand was ingrained in the vision of company. Both these CEOs built strong relationship with the customers and employees. They have always seen brand as an important asset of company. Their initiatives helped Dell and Virgin to emerge as global companies.
Impact of Technology on Branding
The business environment in recent years has gone through a sea change in its shape. One of the key factors of the unprecedented change in shape was the result of change in technology, which has also forced companies to get rid of traditional techniques of communication. The impact of the Internet on brand strategies is enormous. It has changed the boundaries of the competitive playing field and
created a land rush to establish brand through online channel. IBM, Microsoft, Coca-Cola are few of the pioneers of online branding exercise. Though new branding techniques have forced companies to get rid of traditional techniques of branding, the basics of branding remain same – winning customer mind share. Dr. Paul Temporal argues that, there is no change in the way people perceive a brand, traditional or hi-tech. People go for only those brands which they feel like accepting.
A brand in a networked economy can be defined using four inter-related elements satisfaction, collaboration, relationship and a story to suit the networked economy, which ultimately gives loyal customers to the company. Michael Moon and Doug Millison define it as ‘Fire brand’. A fire brand ignites the hearts and minds of customers through its interactions with the company and other customers. It unveils beginning-to-end strategies for strengthening company’s brand and building customer loyalty. A brand can become a firebrand when it fires community to action, and provides self-service satisfaction to vendors and other members of the community.
The new economy laced with the pace of the advancements in technology has changed the meaning of competitive advantage. Gone are the days when innovative products used to be the source of competitive advantage for a company. Today, any new invention can be copied within a matter of days. Moreover, this is the era of outsourcing, where companies can outsource all possible elements of business functions. In the age of total access, ‘brands’ are the only assets of a company that cannot be easily copied or outsourced. A strong brand is the most important asset of a company. It can be nurtured and relied upon in today’s competitive environment. So, branding is far from dead, as some experts like McKenna and Zyman have Opined. Branding is very much alive though it is changing in form and presentation.