Launching a Brand
Dr Radu Dimitriu
Andrew Kirchner
I am joined today by Dr Radu Dimitriu; we are discussing an article he
has written, together with Professor Lynette Ryals, on Launching a
Brand. The article appears in the October 2011 issue of the magazine
Admap. Thanks for being here; let’s pick up some key points. Now,
you mention in the article that companies thinking of launching a new
product, new service, don’t necessarily have to build a brand from
scratch. What other options can they consider?
Radu Dimitriu
The other option that the company would have would be to launch a
new offering – either product or service – under an existing brand and
this what we call brand extension, you are extending the brand. For
instance, we have Honda having launched lawnmowers under the
Honda brand or we have Colgate having launched Colgate Mouthwash
under the Colgate brand. And this makes a lot of sense for
companies actually because companies will incur lesser costs by
launching a brand extension because they don’t have to build a brand
from scratch as we said.
There are also many synergies to be achieved; for instance, with
Colgate Mouthwash there are many synergies in terms of packaging,
advertising, promotion between the mouthwash and the toothpaste
for instance.
Consumers would also feel more encouraged to try a new product
that comes under an existing brand because that stands for quality, it
stands for a credible image. They also feel that there is a lesser risk in
trying a product which comes under an existing brand.
Actually many times companies will stay away from using brand
extensions because their existing brands don’t have the necessary
credentials. For instance, the Bic company known for disposable
products such as pens, razors or lighters tried to launch Bic perfumes
and that was a failure because the Bic brand didn’t have the right
credentials and the perfume appeared as being cheap and low quality.
Andrew Kirchner
Now there are some important principles that brand managers have
to adhere to when launching a new brand, a new brand extension;
can you tell us more?
Radu Dimitriu
The basic principle overall would be to build a strong brand equity and
that really has two sides to it. The first side to it is to establish a
strong brand positioning which would be ideally reflected in a strong
brand image in the eyes of the customers.
On the other hand, a company should try to build what they call brand
awareness – so not only does the brand stand for the right image,
consumers or customers have to know about it. When considering
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Radu Dimitriu
brand positioning there are a few principles about how a company
should position a brand. First of all a company should make sure that
the brand sits in the right frame of reference. In the 1990s Motorola
launched Motorola Envoy which was a PDA and it was a revolutionary
product, but it was the first product of its type. Customers didn’t
really know what to compare that product with or how to actually
judge it. And that was a failure because of that fact afterwards the
Palm Pilot appeared and that product had just a fraction of the
functions of the Envoy and that was a success because the Palm Pilot
associated itself with personal organisers.
The second principle to positioning is to establish what we call points
of parity or associations that make you credible in a certain market.
For instance, Subway were positioned as the healthy fast food (chain),
but they also had to communicate that they have a good taste and
this is what we call points of parity, you have to be credible in the
market.
Last, but not least, you should make sure that you are differentiated,
so you should build what we call points of difference. In that respect
we can take the case of FedEx, that was the first company that
launched overnight deliveries that was a very strong point of
difference. In time, other competitors emulated that and FedEx had
to reposition itself on speed and dependability.
Andrew Kirchner
So you have done your brand positioning, your image; how do you go
about building brand awareness? Are there some principles behind
that?
Radu Dimitriu
Definitely so; once you get the brand positioning and the brand image
right, you should make sure that you establish what we call
perceptual prominence. This would mean, for instance, that a brand
such as iPhone was one of the first phones to be controlled with a
touch screen and the iPhone managed to largely create a standard for
what we consider to be a good smartphone. Other companies, even
though they have a good product or a good brand, they are less good
at establishing this awareness or knowledge in the minds of the
consumers.
For instance, Sony was the first product – or one of the first brands –
to launch an electronic reader and it was a good product, but they
failed to communicate it in an appropriate manner. And actually
Amazon Kindle appeared afterwards in the market and gained a
higher market share than the Sony electronic reader and it was the
Amazon Kindle that eventually won the day because they managed to
establish this brand awareness, this brand knowledge on the side of
the consumers.
Andrew Kirchner
Some very important messages there; Radu thank you very much
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Radu Dimitriu
indeed
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