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BRANDING
People do not buy products, they buy brands. Successful organizations have the power of their brands as the cornerstone of their success. When brands are treated as an asset, companies begin to see the power of branding, including what it can do for them. This commitment can create a more effective and unified organization. More and more companies are aligning their corporate strategy and goals, internal and external communications and operations behind their brand to help drive revenue and increase customer loyalty
The word brand has its origin in the Norwegian word 'Brand' which means 'to burn'. In the ancient times farmers used to put bum marks on their livestock to distinguish their possessions
Brand V/S Product
It is important to contrast a brand and a product. According to Philip Kotler, well-regarded marketing academic, a product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Thus, a product may be a physical good (e.g., a cereal, tennis racquet or automobile), service (e.g., an airline, bank, insurance company), retail store (e.g., a department store, specialty store, or supermarket), person (e.g., a political figure, entertainer, or professional athlete), organization (e.g., a non profit organization, trade organization or arts group), place (e.g., a city, state, or country), or idea (e.g., a political or social cause).
Product
Term used to describe all goods, services, and knowledge sold.
Brand
A term, sign, symbol or design or a combination of them intended to identify the products or services of one’s business or group of businesses and differentiate them from those of competitors
Products are bundles of attributes (features, functions, benefits, and uses) and can be either tangible, as in the case of physical goods, or intangible, as in the case of those associated with service benefits, or can be a combination of the two
Product = Commodity
A product is a produced item always possessing these characteristics:
• Tangibility
•Attributes and Features
A product can be outdated quickly
Something available to the consumer
Brands are bundles of functional benefits, emotional benefits and self expressive benefits. It is the sum of the expectations that a customer or stakeholder has when purchasing a product or dealing with an organization
Brand = “Mind Set”
In essence, the brand is a piece of real estate you occupy in a person’s mind, and the related impressions it leaves behind.
A brand if properly managed can be timeless
A product which is distinct from others in
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The physiological response to a product is important its category
The psychological response to a brand can be as important as the physiological response
Kotler defines five levels to a product
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The core product level is the fundamental need or want that consumers satisfy by consuming the product or service.
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The generic product level is a basic version of the product containing only those attributes or characteristics absolutely necessary for it’s functioning but with no distinguishing features. This is basically a stripped-down, no-frills version of the product that adequately performs the product function.
The expected product level is a set of attributes or characteristics that buyers normally
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expect and agree to when they purchase a product.
The augmented product level includes additional attributes, benefits, or related services that distinguish the product from competitors.
The potential product levels include all of the augmentations and transformations that a product might ultimately undergo in the future.
Kotler notes that competition within many markets essentially takes place at the product augmentation level because most firms can successfully build satisfactory products at the expected product level. Another, well-respected marketing academic, Harvad’s Tel Levitt, concurs and argues that “the new competition is not between what companies produce in their factories but between what they add to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value.
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A brand is a complex symbol that can convey up to six levels of meaning:
Attributes: A brand brings to mind certain attributes. Mercedes suggests expensive,
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well-built, well-engineered, durable, high-prestige automobiles.
Benefits: Attributes must be translated into functional and emotional benefits. The attribute “durable” could translate into the functional benefit “won’t have to buy another car for several years”. The attribute “expensive” translates into the emotional benefit “The car makes me feel important and admired.”
Values: The brand also says something about the producer’s values. Mercedes stands for high performance, safety, and prestige.
Culture: The brand may represent a certain culture. The Mercedes represents German culture: organized, efficient, high quality.
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Personality: The brand can project a certain personality. Mercedes may suggest a nononsense boss (person), a reigning lion (animal), or an austere palace (object).
User: The brand suggests the kind of consumer who buys or uses the product. We would expect to see a 55-year-old top executive behind the wheel of a Mercedes, not a 20-yearold secretary.
A brand is therefore a product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need. These differences may be rational and tangible - related to product performance of the brand - or more symbolic, emotional, and intangible - related to what the brand represents.
Extending our previous example, a branded product may be a physical good (e.g., Kellogg’s
Corn Flakes cereal, Prince tennis racquets or Ford Tarus automobile), a service (e.g., King
Fisher Airlines, Bank of Baroda, or National Insurance), a store (e.g., Bloomingdale’s department store, Body Shop specialty store, or Safeway supermarket), a person (e.g., Bill
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Clinton, Julia Roberts, or Michael Jordan), a place (e.g., the city London, the state of
California, or country of Australia), an organization (e.g., the Red Cross, American
Automobile Association, or the Rolling Stones), or an idea (e.g., abortion rights, free trade, freedom of speech).
As Interbrand’s John Murphy puts it: Creating a successful brand entails blending various elements together in a unique way - the product or service has to be of high quality and appropriate to consumer needs, the brand name must be appealing and in tune with the consumer’s perceptions to the product, the packaging, promotion, pricing and all other elements must similarly meet the tests of appropriateness, appeal, and differentiation.
Brand Levels Pyramid
Product/Service features and / or attributes that must be addressed (FUNCTIONAL)
Benefits
Beliefs & Core Values
Features & Attributes
The functional and emotional benefits that the product / services provides to the consumer
(EXPRESSIVE)
The emotional beliefs and values that consumers feel are being addressed by our brand
(CENTRAL)
Easy to deliver and explain to consumers but also easy to imitate
Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers
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Brand Level Vs Product Level
Benefits
Beliefs & Core Values
Features & Attributes
Core Product
Easy to deliver and explain to consumers but also easy to imitate
Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers
Generic Product
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Expected Product
Augmented Product
Potential Product
Definition of Brand
● A name, a term, a symbol or a design or a combination of these, that is intended to identify the products or services of one business or group of businesses and to
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● differentiate them from those of competitors
The sum of the expectations that a customer or stakeholder has when purchasing a product or dealing with an organization
A product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need
A brand is an expectation or a promise waiting to be fulfilled. Brands are shorthand for trust
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The brand is a piece of real estate you occupy in a person’s mind, and the related impressions it leaves behind
● Brand is a specific term and includes a name, symbol, sign or design given to a product for easy identification. It provides distinct identity to a product.
Diverse interpretations of a brand
According to de Chernatony & Dall'Olmo Riley (1998), various interpretations can be drawn from a brand. They are as follows
Input perspective
● Logo
A brand is a name, term, sign, symbol, or a design or a combination of them, intended to identify the goods or services of one seller or a group of sellers & to differentiate them from those of the competitors; The distinctive arch of McDonalds, the unique shape of the Coca Cola bottle. The part eaten apple of Apple Macintosh are all distinctive examples of brands identified through their logos.
● Legal instrument
A brand ensures a legally enforceable statement of ownership Branding represents an investment & thus organizations seek legal ownership of title as protection against imitators. Effective trademark registrations offer some protection for brand
● Company
On one extreme is corporate branding where branding is solely based on the corporation. This is generally seen in financial services where the corporation dominates in any branding strategy & where the corporate values are thought capable of stretching across the diverse product values (Tata, Bajaj etc). On the other extreme, the brand has a unique name & is not been recognized as associated with a particular company (HLL). Between these extreme positions there are brands that play different emphasis on seeking corporate endorsement.
● Shorthand
Research carried out by Miller shows that our mind has limited cognitive ability. People therefore develop methods of processing large amount of information Research has shown that at a time our mind can process maximum seven bits of information. To cope up with the marketing information, our mind aggregates the information into larger groups or 'chunks', which contain more information.
For e.g.: When first exposed to a new brand of convenience food, the first scanning of the label will reveal an array of wholesome ingredients with few additives. This would be grouped into a chunk, as 'natural ingredients' Further scanning would show a high price printed on an attractive package. This will be grouped with the natural ingredients to form the chunk 'certainly of high quality'. This will go on increasing till the consumer
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● sees an unknown brand name. If it comes from a well-known organization the consumer then will aggregate this with the earlier chunks to infer that this was a 'premium brand'
The task of the marketer is to facilitate the way about which the consumers process information about the brands, such that ever-larger chunks that are formed in the memory can be rapidly accessed through associations of brand names.
Conceiving brand as a shorthand device forces managers to think about the way they emphasis quality rather than the quantity of information in any brand communication.
Risk reducer
When people choose between brands they do not always base their decision on choosing the brand that maximizes the utility. Rather there are situations where the consumer perceives risk. This perceived risk could be on several dimensions as follows:
● Performance risk: Will the brand meet the functional specifications? .
● Financial risk: Will the customer get good value for money from the brand?
● Time risk: Will the customer have to spend more time on an unknown brand? If the
● brand proves inappropriate, how much time will have been spent?
Social risk: What associations will the customer's peer group link with as a result of their brand choice?
● Psychological risk: Does the customer feel right with the brand insofar as it matches their self-image?
Brands are more likely to succeed when time is taken to understand what dimensions of the perceived risk customers are most concerned about?
● Positioning
Managers should ensure that the customers instantly associate the brand with a
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■ particular functional benefit There are several characteristics of a powerful brand positioning.
It should be centered ideally around one emotional benefit
It should be recognized i.e. there should be a balanced perspective, evaluating what
■ the customer registers about the brand.
The brand position should be focused around the functional benefits that are valued by the customers &not those valued by the managers.
● Personality
One way of sustaining a brand's uniqueness is through enrobing (covering) it with
● emotional values, which users sometimes value beyond its functional utility.
Cluster of values
A brand is considered as a cluster of values. This provides a basis of making a brand different from others. For e.g. Land Rover is distinctive because it values individualism, authenticity & freedom.
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The challenge manager(s) face while interpreting brands as a cluster of values is, understanding what values are particularly important to the target market & then ensuring that they are delivered to the target market.
Vision
Brands are about the vision senior managers are having for the brand. Because of this vision, a role can be defined for a brand. A powerful brand vision is, one, which consists of three interlinked components:
● The future environment the brand aims to bring about
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The purpose for the brand.
The values that will characterize the brand
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Adding value
This means to give extra benefits over & beyond the basic product or service that are added & which buyers value. The extra benefits could be either functionally based or emotionally based e.g. An owner of Levi jeans perceives emotional value in the brand when wearing these among the peer group because he / she feels more integrated with the group.
Added value is a relative concept that enables customers to make a purchase on the basis of superiority over competing brands. Added value needs to be relevant to customers & not to the managers.
● Identity
Identity is about the ethos, aims & values that present a sense of individuality differentiating a brand.
Output perspective
Image
People do not react to reality but to what they perceive as reality. This encourages a more customer-centered approach to brands as a set of associations perceived by an individual over time, as a result of direct or indirect experience of a brand. These may be associations with functional quality or with individual people or events. It is unlikely for two people to have exactly the same image of the same brand
Adopting the image perspective forces the management to face the challenges of consumers perceptions i.e. because of the perceptual process the sent message is not always understood as was intended. It therefore necessitates checking consumer's
● perception & taking action to encourage favorable perceptions
Relationship
The interpretation of a brand as a relationship is a logical extension of the idea of a
● brands personality. If brands can be personified then people can have relationship with them.
Time perspective
Evolving entity
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Brands are dynamic offerings. They have to evolve to reflect the changing demands of the customers as they gain more experience, as well as continually maintaining a position of strength against the ever-changing competition
Brands are complex offerings that are conceived in brand plans but ultimately they reside in the consumer's minds. If a brand is conceived only in terms of either an input or an output perspective this can lead to' unbalanced strategy & weaken the chances of longitivity. Just as the marketers are the active participants in the branding process, so are the consumers, who are far from passive participants. Branding is not something done to consumers, but rather something they do with. Brands are perceived in a particular way by consumers sometimes differently from that intended by marketers.
Process of Branding
Branding goes beyond the execution of advertising and logos, touching practically every area of an organization-from internal employee communications and operational facilities to dealerships, the Web, as well as the products and services that are being sold Branding is about how your business motivates a consumer to make a purchase
When does a brand take on something special and become a super brand or a power brand.
Power brands compete above the shifting sands of product comparison and function because they market in a way that not only helps consumers in their daily lives but also adds meaning to their lives. This position above the fray gives power brands a sustainable competitive advantage and makes them much more profitable.
There are many instances where brand names become so recognized that they actually become a generic name for that type of product e.g. Cadbury for chocolate, Colgate for toothpaste, Dettol for an antiseptic or Xerox for photocopying list is endless
Power brands are successful because they create consumer enthusiasm, and then use it to drive ongoing purchase The key to brand enthusiasm is to move beyond your product's function & build an emotional connection with consumers This happens when the brand plays a larger, more meaningful role in consumers' lives by going beyond traditional marketing tactics to develop an empathetic, personal understanding Brands need vivid insight into what consumers care about, beyond demographic facts and psycho graphic profiles — their concerns, values, and emotional rewards
Consumers are human beings. They know brands, express about brands, think about brands, feel about brands, com pare brands, choose brands, recommend brands, reject brands, buy brands, and do not buy brands through a combination of
• Brand name
• Brand looks
• Brand associations
• Brand personality
• Brand attitude
All these are not just a matter of semantics. These are spe cific manageable concepts, born and brought up in the minds and hearts of the consumers, linked to each other in many ways. These, if 'added' to a product, lead to creation of a brand. These form part of the suggested process of Branding, and together lead to Brand Relationship, the output of the
process of Branding.
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BRAND
BRAND RELATIONSHIP= BRAND IMAGE + BRAND ATTITUDE
BRAND IMAGE = BRAND ASSOCIATION + BRAND PERSONALITY
BRAND ASSOCIATION = BRAND LOOKS + BRAND ATTRIBUTES
BRAND LOOKS = BRAND SYMBOL + BRAND NAME
BRAND SYMBOL = BRAND CHARACTER + BRAND LOGO
PRODUCT / SERVICE
Brand Relationship is the ultimate achievement-need of branding. All other aspects (e.g.
Brand Positioning) might happen but if this does not happen, the job is not complete.
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Brand Relationship happens if 'image' and 'attitude' for a brand exist. It is the resultant effect of these two aspects of a brand.
• Brand Attitude defines what the brand thinks about the consumer, as per the consumer. A brand may have 'attitude' on one or more aspects.
• Brand Image includes two aspects of a brand—its associations and its personality. A brand may have image on one or more aspects.
• Brand Associations include all that is linked up in memory about the brand. It could be specific to attributes, features, benefits or looks of the brand. A brand may have a range of associations. But the one association that stands out in memory and differentiates it becomes the 'position' of the brand. A brand may have one or more associations but no
'position'.
For a brand to have brand relationship, it should have 'image'. And for 'image' a brand should have 'association'. If among its 'associations', a brand has a 'position' it is of great advantage. However, if a brand does not have a 'brand position' it does not mean that it would not have brand image or brand relationship. In other words, 'brand position' is not a sufficient condition for brand relationship, but a 'highly desirable' condition.
• Brand Looks, which have a role to play in forming reinforcing brand associations are facilitated by two key properties of a brand—its name and its symbol. While brand name is a necessary condition for existence of brand relationship, the same is not true for brand symbol. However, if the latter exists it helps the process of brand relationship and reinforces it.
• Brand symbol includes two visual signals of a brand—its character (e.g. Amul girl,
Pillsbury doughboy) and its logo.
• 'Necessary' aspects for brand relationship to exist are:
—brand name
—brand associations
—brand attitude
'Highly desirable' aspects for brand relationship to exist are (excluding the 'necessary' aspects):
—brand position
—brand symbol
The model is a process. It has linked up steps. It is dynamic. It never ends. And it is all to do about managing the minds of the people and aspects about a product, thus creating brand relationship, and defining a brand.
Advantages to the Producer a.
The brand helps to build loyalty for the product among the customers. Brand loyal customers are a source of repeat sales.
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Brand-loyal customers resist the temptation to change the brand" product and are insulated against the products of the competitors.
A brand enables a company to build a reputation for its products and creates an image in the public mind.
It facilitates the introduction to new products in the market.
Branding is necessary for the sales promotion and building a demand for the product among the customers in a selective manner.
A brand distinguishes and differentiates a product from the goods of competing companies.
Branding assists in the maintenance of a proper control over the price, quality and other features of the product.
Limitations for the Producer
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The responsibility for maintaining the quality and the standard of the product falls on the producer. He should continue to maintain the same standard and quality. If he fails to do so, the customer will identify the brand owner, that is, the producer, and will complain to him. If the quality deteriorates, the customer may switch over from the product.
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Some products, such as raw materials, do not easily lend themselves to branding. It is, difficult, therefore, to distinguish and differentiate them
The manufacturer, in order to create an acceptance of the brand by the consumers, has
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to incur heavy expenditure to popularize it and some time may have to sell the product to wholesalers unbranded. The wholesalers sell the goods under their own brands.
The retailer and the wholesaler may not be willing to stock the goods if the brand is not popular. If the brand is very popular, they may refuse to stock' the goods on the ground that their commission would be small.
Advantages to the Consumers a.
Brands distinguish and differentiate the goods of different manufacturers and this fact b.
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enables the consumers to choose their products.
Consumers can finally select the brand they prefer after using different branded goods and develop brand loyalty.
The branded goods assure a certain quality and standard, which an consistently maintained by the producer.
Certain brands acquire a great popularity. The customer buying these branded goods e.
derives the immense satisfaction of prestige and status.
For the customer, shopping becomes easy and pleasurable, especially if he has developed brand-loyalty.
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Limitations for the Consumer
In a competitive market, there are many brands for the same or similar products, and it may become difficult and confusing to choose the proper brand.
Popular branded goods cost more, which is unreasonable. Certain types of brands
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become very costly and are out of reach of many people.
Sometimes quality and standard deteriorate and are not maintained at the same level.
Manufacturers try to pass on sub-standard goods by adopting high pressure sales and advertising campaigns for their brands.
Types Of Brands
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Manufacturer’s Brands: Name is owned and advertised by the manufacturer or under their guidelines e.g. Godrej Cold Gold, Tide, Ariel, Chevrolet Travera.
Distributor’s Or Private Brands: Name is owned and controlled by a wholesaler or retailer e.g. Chintamani’s, Apna Bazar, Bazee.com.
Advantages Of Private Branding
The advantages and disadvantages vary depending to which market sector you are talking to:
Advantages to the retailer
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Reduce producer domination in the marketplace
Create more dependence on the retailer by the consumer
Customer sales increase
An opportunity to differentiate and provide variety
Customer loyalty in a situation where you can avoid comparisons
Positive image building
More freedom in your pricing strategy
Positive control over stock keeping inventory
Better bargaining position in a depressed economy
The potential disadvantages for the retailer could be
A negative backlash on their image
Lack of standardisation of private labels between categories upsets the customer
Financial control concerns
Lower turnover, resulting in lost total sales per linear metre
Excessive focus on the private label at the expense of other products
The retailer could be perceived as less powerful in the marketplace as they don’t promote recognised brands
Low price equates to low quality
Lack of financial support from suppliers
If the product fails, the consumer doesn’t forgive you
The producer and supplier also need to consider their positioning. Many producers will be producing a recognised brand leader and a private label.
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Advantages to the producer
It keeps out a competitor from using this opportunity
They can get into the marketplace at a lower cost
They have a secondary product that gives the company a new profile
They can produce a competitor product to position against their own market leader
It is an opportunity for smaller suppliers who don’t have the promotional capabilities to enter a bigger marketplace
The supplier can get more shelf space in the store
An opportunity to build strategic partnerships with selected retailers
The disadvantages to the producer could be
The relationship with the retailer could be threatened if the product doesn’t perform
They have created a competitor to their own brand
Other suppliers may introduce cheaper private labels and drive margins downwards
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High inventory costs and low profit margins
Advantages to the consumer
Customer, generally hesitate when a private label enters the marketplace. They prefer their favorite brand. Their major shift to private labels occurs when they personally feel economic deterioration.
The main consumer advantages are a.
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A guarantee of the same quality for a serious price differentiation
More variety within the category c.
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A trusted retail name equals trust in the product
Product provides a need based on a want, where products were missing within the category, e.g. ethnic foods, diet foods, sugar free foods and so on.
Disadvantages for a consumer a.
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Low quality product - Consumers may have a prejudice to low price equaling low quality
Previous customer failures could effect the whole private label range in a store e.g. if their cereals aren’t good, then their jam will be the same.
Why Does A Brand Matter?
Manufacturers
Simplifies handling or tracing
Legal protection of unique features
Signal of quality level to satisfied customers
Means of endowing products with unique associations
Competitive Advantage
Financial Returns
Consumers
Identifies the Product Source
Assignment of responsibility to maker
Search cost reducer
Signal of Quality
Promise, bond, or pact with the make of the product
BRAND BUILDING BLOCKS
Building Strong Brands: Why Is It Hard?
It is not easy to build brands in today's environment. The brand builder who attempts to develop a strong brand is like a golfer playing on a course with heavy roughs, deep sand traps, sharp doglegs, and vast water barriers. It is difficult to score well in such conditions.
Substantial pressures and barriers, both internal and external, can inhibit the brand builder. To be able to develop effective brand strategies, it is useful to understand these pressures and barriers
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Different factors that make it difficult to build brands are shown in the figure above. The first, pressure to compete on price, directly affects the motivation to build brands. The second reason, the proliferation of competitors, reduces the positioning options available and makes implementation less effective. The third and fourth reasons, the fragmentation in media and markets and the involvement of multiple brands and products, describe the context of building brands today, a context that involves a growing level of complexity.
The remaining reasons reflect internal pressures that inhibit brand building. The fifth reason, the temptation to change a sound brand strategy, is particularly insidious because it is the management equivalent of shooting yourself in the foot. The sixth and seventh reasons, the organizational bias against innovation and the pressure to invest elsewhere, are special problems facing strong brands. They can be caused by arrogance but are more often caused by complacency coupled with pride and/or greed. The final reason is the pressure for short-term results that pervades organizations. The irony is that internal forces and biases, which are under the control of the organization, cause many of the formidable problems facing brand builders today.
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Pressure To Compete On Price
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There are enormous pressures on nearly all firms to engage in price competition. In all industries from computers to cars to frozen dinners to airlines to soft drinks, price competition is at center stage, driven by the power of strong retailers, value-sensitive customers, reduced category growth, and overcapacity (often caused by new entrants and by old competitors hanging on, sometimes via bankruptcy).
Retailers have become stronger year by year, and they have used that strength to put pressure on prices. Whereas a decade ago, the manufacturer largely controlled information, retailers are now collecting vast amounts of information and developing models to use it. As a result, there is an increasing focus on margins and efficient use of space.
Suppliers, particularly those in the third or fourth market-share position with only modest loyalty levels, are exposed to harsh pressure to provide price concessions.
A decade ago, private-label brands were largely limited to low-quality, low-price products unsupported by effective packaging or marketing. Given these characteristics, they enjoyed only temporary sales spurts during recessionary times. No more. While still offering so-called price brands, retailers are also increasingly offering private label brands at the high end of the business. Such brands are competitive with national brands in quality and marketing support but have substantial cost advantages - in part because the cost of the brand management team, sales force, and advertising is lower and can be spread over hundreds of product classes and in part because of logistical advantages.
The result is more price pressure.
Sales promotion is both a driver and an indicator of the price focus. In the 1950s, about
10 percent of the communication mix was devoted to price promotions. Those were the days when distribution was simple, retailers were concerned with building new stores rather than squeezing margins, and markets were growing. Today, more than 75 percent of the advertising / promotion spends are going to promotion.
These market realities imply that the key success factor is low cost. Organizations must reduce overhead, trim staff, downsize, and cut all unnecessary expenditures. What, then, happens to the people who support the brand with market research or other brandbuilding activities? They are vulnerable to the organizations new cost culture.
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Proliferation Of Competitors
New, vigorous competitors come from a variety of sources. A host of food categories have watched Weight Watchers and Healthy Choice enter their markets through brand extension strategies. In the snack category, Frito-Lay has seen regional brands expand and Budweiser's Eagle brand break out of its niche to become a major competitor. New product forms that provide real alternatives for the customer have encroached the soft drink market, bottled water, carbonated water, fruit-based drinks, and "new age" drinks, among others.
Additional competitors not only contribute to price pressure and brand complexity, but also make it much harder to gain and hold a position. They leave fewer holes in the market to exploit and fewer implementation vehicles to own. Each brand tends to be positioned more narrowly, the target markets become smaller, and the non-target market becomes larger. Efforts to market to a broad segment thus become more difficult
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Fragmenting Markets And Media
At one time, being consistent across media and markets was easy. There were a limited number of media options and only a few national media vehicles. Mass markets were the norm, and microsegmentation did not exist. Brand managers now face a very different environment, one in which it is difficult to achieve the consistency that is needed to build and maintain strong brands.
The bewildering array of media options today includes interactive television, advertising on the Internet, direct marketing, and event sponsorship, and more are being invented daily. Coordinating messages across these media without weakening the brand is a real challenge, especially when promotional vehicles are included in the mix. A promotion involving a giveaway or a price reduction that results in a noticeable sales spike, for example, may be inconsistent with a brand identity based upon quality because it signals that the brand needs to lower price to gain sales. Pressure to include promotions (such as the couponing used by packaged-goods brands or the cash rebates used by automobile firms) makes it difficult to keep the brand-building effort on track.
In addition, companies are dividing the population into smaller and more refined target markets, often reaching them with specialized media and distribution channels. It is tempting to develop different brand identities for some or all of these new target segments. Developing and managing multiple identities for the same brand, however, presents problems for both the brand and the customer. Since media audiences invariably overlap, customers are likely to be exposed to more than one identity relating to the same brand.
Consider the problem of female consumers, accustomed to the Lux advertising, who encounter the firm's advertisements geared for the males. Or think of the potential confusion of a prestige-oriented shopper, accustomed to seeing Shopper’s Stop advertisements in fine fashion magazines, who one day sees a newspaper advertisement for a Shopper’s Stop discount outlet. The more numerous and diverse a brand's images are, the more difficult it is to coordinate them in support of a strong brand.
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Complex Brand Strategies And Relationships
There was a time, not too long ago, when a brand was a clear, singular entity. Colgate, for example, was a brand name that simply needed to be defined, established, and nurtured.
Today, the situation is far different. There are subbrands, brand extensions, ingredient brands, endorser brands, and corporate brands. The Coke logo can be found on a dozen products, including Diet Cherry Coke, Caffeine Free Diet Coke, and Coke Classic - and it doesn't stop there. In the grocery store, Coke is a product brand; at sporting events, it's a sponsoring brand; and in the communities where its bottling plants operate, Coke is a corporate brand.
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This complexity makes building and managing brands difficult. In addition to knowing its identity, each brand needs to understand its role in each context in which it is involved.
Further, the relationships between brands (and subbrands) must be clarified both strategically and with respect to customer perceptions.
Why is this brand complexity emerging? The market fragmentation and brand proliferation mentioned above have occurred because a new market or product often leads to a new brand or subbrand. Another driving force is cost: There is a tendency to use established brands in different contexts and roles because establishing a totally new brand is now so expensive. The resulting new levels of complexity often are not anticipated or even acknowledged until there is a substantial problem.
5.
Bias Toward Changing Strategies
There are sometimes overwhelming internal pressures to change a brand identity and / or its execution while it is still effective, or even before it achieves its potential. The resulting changes can undercut brand equity or prevent it from being established. Most strong brands, such as Marlboro, Volvo and Surf have one characteristic in common - each developed a clear identity that went virtually unchanged for a very long time. The norm is to change, however, and thus powerful identities supported by clear visual imagery never get developed.
6.
Bias Against Innovation
While there may be a bias toward changing a brand identity or its execution, a psychic and capital investment in the status quo often prevents true innovation in products or services. There is an incentive to keep the competitive battleground static; any change not only would be costly and risky but also could cause prior investment to have a muchreduced return (or even make it obsolete). The result is a vulnerability to aggressive competitors that may come from outside the industry with little to lose and none of the inhibitions with which industry participants are burdened.
Companies managing an established brand can be so pleased by past and current success, and so preoccupied with day-to-day problems, that they become blind to changes in the competitive situation. By ignoring or minimizing fundamental changes in the market or potential technological breakthroughs, managers leave their brands vulnerable and risk missing opportunities. A new competitor thus is often the source and the beneficiary of true innovation.
7.
Pressure To Invest Elsewhere: The Sins Of Complacency And Greed
A position of great brand strength is also a potential strategic problem, because it attracts both complacency and greed. When a brand is strong, there is a temptation to reduce investment in the core business area in order to improve short-term performance or to fund a new business diversification. There is an often-mistaken belief that the brand will not be damaged by sharp reductions in support, and that the other investment opportunities are more attractive. Ironically, the diversification that attracts these resources is often flawed because an acquired business was overvalued or because the organization's ability to manage a different business area was overestimated.
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Xerox may be the prototypical example of a dominant brand that lost its position because of an inadequate commitment to the core business. In the 1960s, Xerox virtually owned the copier industry; its market share was literally 100 percent. Barriers to entry included a dominant brand name, a strong set of patents, and a huge customer base committed to a leasing program and service organization. Instead of sticking with its strengths and defending either the low end by attacking costs or the high end by developing new technologies. It diverted resources into an "office of the future" concept. As a result, the company was blind sided by Kodak, and Canon, who entered the industry with innovative, superior, and often less expensive products. While there are many reasons why Xerox lost position in the 1970s, one key explanation is the brand's strong equity, which engendered complacency and a temptation to look for greener pastures.
8.
Short-Term Pressures
Pressures for short-term results undermine investments in brands. Sony founder Akio
Morita has opined that most corporate managers unduly emphasize quick profits rather than try to make products competitive over the long haul.
There are several reasons why a short-term focus might persist a.
There is wide acceptance that maximization of stockholder value should be the overriding objective of the firm. This acceptance is coupled with a perception that shareholders are inordinately influenced by quarterly earnings-partly because they lack the information and insight to understand the firm's strategic vision, and partly because they cannot evaluate intangible assets. As a result, managers are motivated to make current performance look good. b.
Management style itself is dominated by a short-term orientation. Annual budgeting systems usually emphasize short-term sales, costs, and profits. As a result, brandbuilding programs are often sacrificed in order to meet these targets. Planning is too often an exercise in spreadsheet manipulation of short-term financial data rather than strategic thinking. In addition, firms tend to rotate managers through the organization, the long term becomes much less important than current results to career paths. Managers feel pressure to perform - to "turn it around" quickly and visibly. c.
A short-term focus is created by the performance measures available. Measurements of intangible assets such as brand equity, information technology, or people are elusive at best. The long-term value of activities that will enhance or erode brand equity, for example, is difficult to convincingly demonstrate, in part because the marketplace is "noisy" and in part because experiments covering multiple years are very expensive. In sharp contrast, short-term performance measurements are ever more refined, timely, and detailed. The short-term impact of promotions, for example, can be demonstrated with scanner data. The resulting situation is a bit like the drunk who looks for his or her car keys under a street light because the light is better there than where the keys were lost.
The net outcome is a sometimes-debilitating bias toward short-term results. This bias translates into a need to demonstrate with hard sales, share, or cost numbers that expenditures payoff. In that context, it becomes difficult to justify investments in intangible assets (like brands, people, or information technology), which lack a demon-
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TYBMM - SEM V strable short-term payoff. As a result, these investments are often forgone and the organization becomes weak at the core, lacking such assets when they are needed.
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