Optimising the brand-to-brand customer interface through the Brand

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Optimising the brand-to-brand customer interface through
the Brand Association base
Henrik Uggla
Author contacts
Henrik Uggla
Ph.D
Strategic Brand Management
Department of
Brand Architecture
School Of Business
University Of Stockholm,
106 91 Stockholm
Sweden.
e-mail hu@fek.su.se
voice+4686747447
fax+4686747447
Abstract: The paper presents and explains a model for how brands can collaborate and be
strategically leveraged together in order to create more meaningful and valuable
differentiation and increasingly customized brand associations in a mature marketplace. The
model adopts a more balanced perspective than existing models of co-branding and
ingredient branding through the introduction of a leader brand, a partner brand and a brand
association base, connecting the above entities. The key argument developed in the text is
that the distribution of brand identities will probably be more important in a mass
customization context, than one forever fixed and stable brand identity.
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“The brands are the companies capital mantra is an oft repeated one, yet in reality,
decapitalization is everywhere” Kapferer (2002)
“As mass customization becomes part of our everyday lives, most Americans will intuitively
understand how it represents an improvement over mass production. Clothes will fit better.
Entertainment will be more enjoyable. Doctors and hospitals will have individualized tools to
make us healthier”
(1999)The Right Stuff: America's Move to Mass Customization, Policy Report, No 225.
Introduction
Mass customization has been discussed as a customer centric strategy enabling more
individualized products based on common product platforms. (Davis, 1987; Pine 1993). More
recently, global mega brands such as LEGO, BMW and the Adidas group has developed
platforms for mass customized products. (Tseng and Piller, 2003) Although the technological
dimension of mass customization and supply chain management has been rather extensively
covered in articles and books, strategic brand management appears to be a fairly under
researched area with respect to this important issue. Furthermore, to the extent that the
brand has been covered, this discussion suffers from a serious dichotomy between an
absent-present position for the brand. In an attempt to unfold the myths of mass
customization, Piller, (2001) argued that there is an unrealistic tendency in the literature to
downscale the magnitude of the brand in the mass customization discourse and make it
unimportant:
“Mass Customizers like Reflect.it com or myCereal are examples of an often cited trend: With
mass customization, the customer becomes her own brand, creating her own brand
personality. But brand names and their owners have a huge capability to overcome the
uncertainties and burdens the configuration process of mass customization offers. Brands
are strong signals that consumers can trust the product concept-remember that they have to
pay and wait for something that does not exist during time of purchase. However, brand
prepositions have to change from product based concepts to brand names representing the
capability of a supplier to offer value to the customer” (Piller, 2001, p.2)
The concern for a more realistic brand strategy has also been discussed from within the
brand management discourse. For example, Aaker and Joachimstahler (2000) suggested a
paradigm shift from single to multiple brand focus and from simple brand structures to
complex brand architectures.
Kapferer (2001) argued that the increasing use of technology and individualized product
development would speed up a process of decapitalization away from more unified and
overarching brand structures based on corporate and family brands towards complex and
mixed brand structures. This paper offers a response to concerns raised by Kapferer (2003)
to introduce new and perhaps more flexible models and concepts of brand management that
captures some of the future trends, involving the customer and brands the surrounding
environment.
Aim
The aim with this paper is to introduce a flexible conceptual framework for managing flexible
transfer of meaning between brands using a more structured and strategic approach. A
model is introduced that distinguishes between three components: the leader brand, the
partner brand, and the customers’ image of the brand. Implications for mass customization
and personalization are discussed at the end of the paper.
2
Key Definition
The brand association base can be defined in the following way:
“The brand associations managed by a leader brand (category), extended through identity
transfer or leveraged through image transfer through partner brands (categories) that
contributes in a positive/negative way to customer derived meaning for the brand (image)
and value (equity)”
Figure 1. The Brand Association Base, source: Uggla 2001.
The above definition is implicitly biased toward an order between brands in a larger system;
this is not necessarily a natural order since brand collaboration between two brands with
perfect and symmetric distribution of power could equally well be described as brand x and y
or A and B (Simonin and Ruth, 1998). However, in a real business context, a particular brand
will tend to dominate or influence the other brands in the larger system. For example, Adidas
is ranked as number 67 among the worlds 100 strongest brands (Business week, 2003) and
a much stronger brand than its collaborative partner brands in retail. Consider how this
power asymmetry with respect to strategic intent has been described in relation to the
customized shoe product, mi adidas:
“Adidas customization model requires the physical interaction with each consumer. As
Adidas has no retail chain of its own, cooperation with retailers or other intermediaries is
crucial, as management decided not to build up a whole network of own retail stores (apart
from some flagship stores). This option is much too costly. However, when cooperating with
retailers, Adidas wants to be the clear leader of the system (manufacturer-driven
collaboration) especially as mi adidas should become a major instrument to strengthen the
whole Adidas brand name, (in regard to technology and innovation leadership and customer
proximity) (Piller et al, 2003, p.25-26)
Within the context of the above definition, Adidas might be viewed as a leader brand and mi
adidas as a silver bullet leader sub brand while partners should be viewed as partner brands
at best or maybe just even as business partners in retail. In a similar manner, McFlurry ice
cream from Mc Donalds should be viewed as the leader brand in relation to any kind of
partner brand topping that the individual consumer prefers, be it Smarties, Nestlé crunch or
Daim chocolate. In the next section, some characteristics of leader brand, partner brands
and the customer within this brand system.
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The leader brand
The leader brand is the brand that owns the customer base and a channel to customer
franchise and brand loyalty. It will often but not always be a corporate brand. For example,
Universal Studios is a corporate brand but it is also a leader brand. Within the context of
Universal Studios larger association base, the brand has established relations to a number of
important partners. An important strategic consideration for the leader brand relates to how it
should be positioned in relation to its partners. The roles and positions of partner brands will
depend upon the more specific product market context where these partners appear. In the
case of Universal Studios, a basic distinction has been created between partners, sponsors
and supplier brands. Another important characteristic of the leader brand is that it defines
and delimits the category towards the end customer. The brand alliance between Siemens
and Porsche Design around a coffee maker, nicely illustrates this point. The product category
for this new line of co-branded products is consumer electronics. This category by tradition
belongs to Siemens. We understand this from the point of the consumer. Siemens is the
leader brand with an almost natural category prerogative and Porsche Design is the
modifying partner brand that helps to transcend and transform the natural category boundary
with brand associations from another domain, including another type of core values and core
competencies, such as design, emotion and self expression. In comparison, the Smart Car is
an individual brand, based on implicit co-branding and subtle endorsement by Mercedes as a
leader brand and Swatch as vitalizing partner brand.
The partner brand
Partner brand associations are defined here as associations secondary to the identity and
more immediate territory of the leader brand1 Partner brand associations contribute with
brand equity to the overarching leader brand and its association base through an image
transfer of meaning in either of to ways, asymmetrical or symmetrical forms of collaboration.
In an asymmetrical collaboration, one brand is generally more dominant than the other.
Symmetrical collaboration refers to a more balanced relationship between the partner and
leader brand. In some cases, partner brand associations becomes so strong and important
as drivers for end consumer decision that they become a natural part of the overarching
brand structure of the leader brand and transform into a partner sub brand. The Michael
Jordan partner brand had that character in relation to Nike (e.g., Nike Air Jordan). The GoreTex brand has a similar relationship with the ECCO shoe brand. The structure “ECCO-GoreTex” reflects a partner brand structure. Partner brands might be distributed as co-brands with
separate customer bases that also sell separately (e.g Philips-Alessi) or as ingredient
brands, that only appear together with the leader brand in the offering (Riezebos, 2003).
Advanced mass-customization will probably allow for a more flexible and consumer-driven
selection of partner brands in general and leader brands in particular. For example, a
particular customer might prefer Goretex fabric in the mi design step of the mi adidas
customized shoe process. Partner brands such as Lycra, Bosh, Intel Inside, Daim-chocolate
and Kevlar can thus become potent tools for the reinforcement of certain aspects of the value
proposition in a mass customized society (Malaval, 2001).
Customers Brand Image
From a traditional brand management perspective, brand image is merely a passive
construct, i.e., a received image, created through above the line activities and media
advertising. The brand association base allows for a more flexible and selective brand image
to emerge. The customer will derive his or her perceived equity from one or more elements
related to the brands sharing the association-base. Brand values of the leader brand and
1
There is an affinity between partner brand association and Kevin Lane Keller concept of secondary brand
associations, defined by him as brand associations that could be leveraged from secondary sources outside the
brands own identity. See for example, Keller, K.L. (2003) “Leveraging Secondary Brand Knowledge to Build
Brand Equity” Strategic Brand Management, Prentice Hall, NJ, USA. See also Lederer and Hill (2001).
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partner brand as well as product attributes, brand personality and organizational association
can be important elements in this process (Aaker och Joachimstahler, 2000). Moreover, the
customer will also feed back associations to the base through a consolidation of use pattern
and user imagery. In this way, outdoorsy associations that consumers might have with the
Patagonia brand might spill over to Gore-Tex in this alliance. Customers brand image and
final evaluation will depend on the attitude toward the leader brand, partner brand(s) and
individual product preferences. This process is customer based and the perception of fit is no
perfectly symmetrical evaluation, emotional fit and brand personality fit can be high, while at
the same time product fit and functional brand fit can be low.
Mass customization will allow for a more active and selective process where the customer
might be viewed as a true basis of fit that shapes and modifies the brand image as a whole.
In contrast to traditional brand management, the consumer becomes an active part in the
gradual shaping, selecting and modifying of brand associations. Beside traditional
components of brand evaluation such as brand and product fit (Baumgarth, 2003) brand
trust, brand attitude, and level of customization in product supply and design might be of
increased importance. (Baumgarth, 2003; Uggla, 2003). Particularly from a mass
customization perspective, the consumer will weigh the importance of the involved brands in
terms of symmetric asymmetric brand association base.
Figure 2. Customer evaluation of the brand association base.
Symmetric brand association base
• Both brands should be highly familiar2 ideally; they should have established a top of mind
position in their respective product categories. Phillips and Nike have recently developed a
line of ergonomic CD and MP3 players for the fitness segment. Both brands are among the
strongest in their respective product categories with a high level of brand awareness.
• Both brands should be communicated and have a balanced graphic expression and
representation on the product or package. The Sony Ericsson co-brand around cellular
phones represents a balanced, symmetric co-branding with respect to the communicative
2
Simonin, B.L and Ruth, J.A., (1998) Is a Company Known by the Company it Keeps? Assessing the Spillover Effects Of
Brand Alliances on Consumer Brand Attitudes, Journal Of Marketing Research, Vol 35 (February) pp. 30-42.
5
dimension. Both brand names are inscribed on the product, with the same typeface and size.
This type of graphic expression indicates a reciprocal and balanced commitment to the brand
alliance.
•Both brands should be independent of each other and also sell outside the co-branded
offering3. Consider the following symmetric co-branding efforts:
Häagen-Dazs Ice Cream and Baileys whisky liqueur have developed a co-brand around an
Ice Cream with the flavour of Baileys. Both brands are autonomous and represent distinct
and separate customer bases that also sell outside the co-branded alliance.
•Both brands must be prepared to assess and invest their core values in the alliance and
either reinforce or complement the same values. Nokia and Marimekko have co-branded
around a transparent woven package for cellular phones. Nokia is a leading global brand in
cellular phones and Marimekko is a premium brand in men and women’s clothing, both with
a Scandinavian brand origin from Finland.
In all of the above cases, the involved brands also sell separately to established customer
bases. In the ideal situation, the target groups of each brand will also try out the core product
of the other brand (e.g., a women interested in Marimekko clothing with an incentive to buy a
Nokia cellular phone, or a Nike equipped person, more open minded towards Phillips product
range outside the more specific Phillips-Nike offering.
Figure 2 Symmetry Between leader and partner brand.
Asymmetric brand association base.
In many cases, the brand alliance will have an asymmetrical character and the contribution to
the brand alliance from the involved parties will be different and asymmetrical. Endorsement
strategies and ingredient branding strategies are both based on an asymmetrical distribution
of the brands associations. Asymmetrical brand alliances will often be characterised by:
•A positioning based on a visible asymmetry in the graphic representation and expression of
collaborating brands. The Grandma’s logotype is dominating and the Sun maid Raisins
logotype is positioned as an ingredient co-branding brand in the alliance between Grandma´s
Cookies and Sunmaid Raisins4
Riezebos, R (2003) “Two routes of brand development” Brand Management, Prentice Hall, pp.80-100.
A strategic distinction can be made between pure ingredient branding and a brand structure based on a co-branded
ingredient. In the former case, the ingredient brand does only appear in a constellation together with the co-brand (e.g. GoreTex with the leader brand) In the latter case, the co-branded ingredient can also be bought separately by the end consumer
(Sunmaid Raisins can be bought in any supermarket.)
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4
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•The leader brand reinforces a single attribute or benefit or benefit from the partner brand.
•The branded ingredient can contribute with a deepened functional dimension to the value
proposition of the host brand. Any leader brand working with the Gore-Tex membrane brand
leverages the “Guaranteed to make you dry” association.
• One brand in the asymmetrical alliance is more familiar than the other brand
The less familiar brand leverages a stronger spillover effect than the more familiar brand.
• The core values of each brand is not a critical foundation and primary incentive for the
alliance.
The composition of different brands will be judged and evaluated by the end-customer and
sometimes a partner brand will have more weigh for the end consumer than the leader brand
(Uggla, 2000; Malaval, 2001; Freter and Baumgarth, 2000). Mass-customization with
ingredient branding, will allow for more flexible and informed consumer decision process with
respect to the balance between leader and partner brands and it will probably be an
important trend for the future.
Concluding Remarks
With the emergence of mass-customization and enabling marketing technologies, the
traditional supply side brand management perspective must be adapted and balanced with
new business realities, involving customers in the development process of products and
reframing the corporation as a solution provider, rather than a supplier of fixed products
(Piller, et al , 2003). Major brands such as BMW, Lego and ADIDAS are already engaged in
mass customisation programs (Tseng and Piller, 2003) that will modify the shaping of brand
identity of the same brands and the customer based brand equity as well. Moreover, some of
the winners in global brand value on the 2003 Interbrand list of the worlds strongest brands,
rely on mass customization as a business strategy (Business week, 2003).
The present paper offers an alternative stance and design to the formation of efficient brand
strategy, adapted to a mature market setting with brand equity for hire, ongoing media
convergence, multiple distribution channels and digital technologies as a norm. It is
suggested that more emphasis should be put on the design and configuration of image
transfer processes between brands and to and from the end customer. The holistic and
inclusive nature of the brand association base model makes it particularly useful for
decentralised brand planning in relation to brands in the surrounding environment and end
customer preference. In this new market situation the egocentric notion of sub brands needs
to be complemented by partner-sub brands (Uggla, 2003 a) and the different dimensions of a
brands value proposition in terms of function, emotion and self expression will not always be
crafted from one brand. Instead, part or whole of the value proposition might be transferred
to the leader brand from a partner brand in the market, or customized and adapted to the
preferences and brand knowledge of a single customer. Moreover, a more complex meaning
of fit will gradually emerge, that cover not only brand to category, or brand-to- brand
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interactions, but also presupposes a more active role for the consumer. In comparison,
traditional fit-bases in brand extension research might include complement, substitute and
perceived difficulty of making the extension (Aaker and Keller, 1990; Keller and Aaker 1992)
co-branding contexts might include brand fit, product fit, brand personality fit and brand
attitude for brand A and brand B respectively (Simonin and Ruth, 1998; Baumgarth, 2003).
From a mass customisation perspective on the contrary, the customer should be viewed as
having an active brand identity of its own and fit will also include the customer preference
function in terms of customer personality, customer product fit, and customer brand attitude
customer. For a specific product each of the above dimensions might be further subdivided in
accordance with the individual preference function and product category type. For example,
for apparel, product fit might include component choice in terms of component, style and
fabric (Kamali and Loker, 2002).
Implication for future research agendas
Individualized marketing and the field of mass customization
The ideas developed in the present paper opens up several new research options and
perspectives for emerging forms of individualized marketing. The brand association base
model can be a useful tool for integration of many contemporary technologies used in
marketing and management with the brand and CRM. The ability to organize and share
brand associations from different actors opens up new possibilities for integrating customer
equity with brand equity by viewing the customer as and individual brand with is own “fit
bases” in the mass- customisation process. Beside the traditional fit bases such as brand to
category (brand extension) and brand to brand (brand alliances) a third fit reason should be
considered and more fully elaborated in terms of “customer fit “. In some product/market
context and research settings, the emphasis will be put on the fit between one the leader
brand and the customer (e.g. between the Adidas brand and a single consumer in the
development of My Adidas shoes, Till et al. 2003). If the individualized offering is an outcome
of brand alliance however, fit must be assessed in relation to both brands associations and
the association of the new co-brand conjunction in relation to the individual consumer’s
specific fit-preference profile. Moreover, the brand association base can be a helpful tool for
crafting and designing the emotional side of the customer relationship marketing effort.
(CRM).
Brand sponsorship options in mass customization contexts
The brand association base facilitate important brand sponsorship decisions within marketing
management with increased relevance for mass customization. With its explicit focus on
leader brand (category) partner brand (category), the brand association base model can
visualize and provoke more balanced reflection around the four options offered to a
manufacturer, in terms of building a manufacturers brand, selling to resellers that build
private brands, brand licensing or co-branding. The model hi-lights the psychological
opportunity cost of building brand identity in terms of borrowing or transferring brand image
and associations from a partner. Within a mass customization context, the challenge for a
traditional leader brand might be to borrow, rather than building brand identity from an
outside actor. For example, a leader brand such as Adidas or Nike might be forced to expand
and extend their own association bases and invite several partner brands on demand, in
accordance with individual end customer preferences. For example, an Adidas shoe with a
combination of different ingredient brands such as Gore-Tex fabric and Goodyear rubber.
Collaborative modes and customer interface improvements in mass customization
contexts
Piller et al. (2003) Identified four generic collaborative modes; consumer direct, manufacturer
driven collaboration, retail driven collaboration and intermediary based collaboration within a
mass-customization context. The brand association base model provides as opening for a
refined discussion of collaborative modes on brand level within mass customization contexts.
8
The concepts of leader and partner brand and symmetric versus asymmetric modes of
collaboration can be fruitful in order to develop a more structured brand architecture around
possible collaborative modes.
Consumer behaviour issues
The brand association based model opens up a new arena in relation to consumer behaviour
in general and consumer decision making in particular. In a mass customized setting, the
customer will probably be more driven by goal-derived categorization in his/her own market
behaviour than traditional consumer decision making according to a linear model. As a
consequence the consumer might combine/recombine brands, parts, sub brands, product
categories and ingredient brands in a pattern that better represents his or her individual
goals. Thus rather than being based on nominal category formation, mass customisation
from a consumer perspective might include a constellation of brands and ingredient brands
with different levels of category typicality/strength. This emerging pattern of consumer
behaviour with respect to brands opens up a new arena for the study of consumer behaviour
and the formation of ad hoc categories.
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