How Brands Work
Quick version!
A successful brand is developed by identifying consumer needs, designing the brand, making it
efficiently and creating a unique position for it in the market.
A successful brand is managed by monitoring lifestyle changes, exploring technological change,
measuring brand performance, monitoring change in distribution and maintaining that unique position.
Academic version!
How brands work is how they are developed and managed over time. Distinguish between products
and brands. Products are developed against an accepted framework, which may be as simple as
copying something that is successful, but doing it in such a way that is competitive, for example,
retailer brands. In this sense developing products is functional.
Brands are both functional and emotional – they are more than just products. There is no accepted
framework against which a brand is developed, it creates its own framework by communicating to the
consumer what it is all about. A brand is developed by combining consumer needs with product and
packaging innovation.
Developing Brands
There are four stages in developing a successful brand. Brands rarely become successful overnight,
it takes time to achieve a good reputation and for that reputation to be recognised.
1. Identifying Consumer Needs. Needs are not wants. Wants are tangible and specific
requirements, but needs may be latent. The consumer may not know they want a product until they
see it because they may not know until that moment what it offers. New technology such as the
telephone turns needs (the need to communicate remotely) into wants (to possess a
telephone). Needs evolve over time. They are usually a product of consumer lifestyle which is
shaped by demographics, wealth and technology. Consumer market research is important to
identify consumer needs.
2. Designing products. The product design will reflect both the targeted consumer needs and the
appropriate product technology. Packaging is usually an integral part of the product design,
interacting with process technology. Thus food can be processed by canning, baking, chilling and
freezing. The process chosen will be influenced by such criteria as ease of opening (for the
elderly), portion size (for single person households) and affordability (for specific income or lifestyle
groups). There is a close inter-relation between identifying consumer needs and designing
products and packaging.
3. Producing Cost Effective Solutions. The product must be produced cost effectively if it is to
give value and be competitive. There must be production efficiencies (speeds, wastage control,
capital intensity); marketing efficiencies (economies of scale, choice of media) and distribution
efficiencies (cost of protective packaging, transportation, warehousing, selling costs). At all points
of sale and in all product forms, the brand must be competitive and affordable.
4. Creating Brand Positioning. This is the way in which the product meets the consumer need for
example, Pedigree Dog Food is about nourishment and nutrition, Coca-Cola is about continuous
refreshment, Kit Kat is an enjoyable and relaxing between-meals snack. Positionings have
physiological and psychological values and are given tangible expression by the unique selling
proposition and reason why. For example, Pedigree is “Recommended by top
breeders”; consumers are urged to “Take a break, take a Kit Kat”. Since each brand, and thus
each product is unique, it follows that each positioning must be unique.
Managing Brands
There are five key activities necessary to ensure a brand continues to have positive reputation and
recognition:
1. Monitor lifestyle changes. Populations age, grow affluent or poorer, behave differently and
change their values. Through all these changes a brand must stay relevant, involving changes in
design, packaging and price, while always being good value.
2. Explore technological changes. New technology provides similar benefits in better ways, for
example, cans with easy-open ends. In the search for relevance the brand leader must be first and
to be first they must be at the forefront in exploring technological change.
3. Measure product performance. To achieve quality, products must never deteriorate, nor
become inferior to the competition. Continuous measurement is essential.
4. Monitor change in distribution channels. New channels come (vending), old channels go
(family butchers) and other channels change shape and character (grocery). To achieve ubiquity
and relevance, the brand must always be available in all relevant channels in a relevant format.
5. Never change positioning. The positioning of a brand is the promise to the consumer.
Changing positioning is breaking faith with the consumer. Product, packaging, distribution and
media communication will all change to ensure the brand reputation and recognition are retained
and reinforced, but positioning must remain inviolate.
Source: Dick Bell Oxford Institute of Retail Management
AIM 18 April 2013