Title of the Project Report: Study Of Brand Building In Hipolin Limited
Submitted in Partial fulfillment of the requirement for the award of the Degree of Master
of Business Administration.
Name of the Candidate
: Jay Murat Kumar
Reg. No.
:09P35F0463
Name of the Specialization
:Marketing
Partner Institution
:IBMR Business School
Under the guidance of
Name of the Guide (in Block letters):Bipin Kumar Tiwari
Designation: Area Sales Executive(Bihar)
Centre for Participatory and Online Programmes
Bharathiar University
Coimbatore – 641 046
(june 2010)
NB: No student could use the emblem of
this University. If used the Project
Report will be summarily rejected.
Acknowledgement
I am JAY MURAT KUMAR indebted to my project report that all the work has been done
correctly and honestly. I would like to thank Bipin Kumar Tiwari who helps me a lot
within their so busy schedule. I would like to thank Neha Madam who also guide me very
well so I come with this complete project .
I also extremely thank to all
who helps me lot in this project.
Jay Murat Kumar
jaymuratk@gmail.com
Business summary
Our story begins way back in 1970, when we started manufacturing detergent powder on
a small scale, for supplying the domestic market. Right from the start, we were very clear
about one thing-that we would never sacrifice quality for quantity. As time went by, we
introduced other detergent products. The customer goodwill generated and the favorable
market response we received, encouraged us to branch out into other fields. In 1998, we
added dental hygienic products and comsetics to our range. We became a Public Limited
Company in 1994. Today, We have over 700 agents and distributors, and our products are
even being exported to Russia, Ukraine, UAE and Africa. Our manufacturing facilities
comprise a 40,000 Sq.Mt. plant involed exclusively in the manufacture of detergents (lowfoam powders for indistrial use and high- foam formulations for domestic consumption),
with built up area of 5900 Sq. Mt
Products Summary
Our Products are Hipolin Gold Powder, Hipolin Power Hipolin Liquid, Hipolin Super Blue
Cake, Hipolin Yellow Powder.
Basic Information
Company Profile
Company Name: Hipolin Limited
Business Type: Manufacturer
Product/Service
(We Sell): Detergent Powder
Address:
4th Floor, Madhuban, Ellisbridge
Brands: Hipolin
Number of Employees: 101 - 500 People
Branding Review
The central concern of brand building literature experienced a dramatic shift in the last
decade. Branding and the role of brands, as traditionally understood, were subject to
constant review and redefinition. A traditional definition of a brand was: “the name,
associated with one or more items in the product line, that is used to identify the source
of character of the item(s)” (Kotler 2000, p. 396). The American Marketing Association
(AMA) definition of a brand is “a name, term, sign, symbol, or design, or a combination
of them, intended to identify the goods and services of one seller or group of sellers and
to differentiate them from those of competitors” (p. 404). Within this view, as Keller
(2003a) says, “technically speaking, the n, whenever a marketer creates a new name,
logo, or symbol for a new product, he or she has created a brand” (p. 3). He recognizes,
however, that brands today are much more than that. As can be seen, according to these
definitions brands had a simple and clear function as identifiers.
Before the shift in focus towards brand s and the brand building process, brands were
just another step in the whole process of marketing to sell products. “For a long time,
the brand has been treated in an off-hand fashion as a part of the product” (Urde 1999,
p. 119). Kotler (2000) mentions branding as “a major issue in product strategy” (p.
404). As the brand was only part of the product, the communication strategy worked
towards exposing the brand and creating brand image. Aaker and Joachimsthaler (2000)
mention that within the traditional branding model the goal was to build brand image ; a
tactical element that drives short-term results. Kapferer (1997) mentioned that “the
brand is a sign -therefore external- whose function is to disclose the hidden qualities of
the product which are inaccessible to contact” (p. 28). The brand served to identify
product and to distinguish it from the competition. “The challenge today is to create a
strong and distinctive image” (Kohli and Thakor 1997, p. 208).
Concerning the brand management process as related to the function of a brand as an
identifier, Aaker and Joachmisthaler (2000) discuss the traditional branding model
where a brand management team was responsible for creating and coordinating the
brand’s management program. In this situation, the brand manager was not high in the
company’s hierarchy; his focus was the short-term financial results of single brands and
single products in single markets. The basic objective was the coordination with the
manufacturing and sales departments in order to solve any problem concerning sales
and market share. With this strategy the responsibility of the brand was solely the
concern of the marketing department (Davis 2002). In general, most companies thought
that focusing on the latest and greatest advertising campaign meant focusing on the
brand (Davis and Dunn 2002). The model itself was tactical and reactive rather than
strategic and visionary (Aaker and Joachimsthaler 2000). The brand was always referred
to as a series of tactics and never like strategy (Davis and Dunn 2002).
Now: Brand Building Models
Kapferer (1997) mentions that before the 1980’s there was a different approach towards
brands. “Companies wished to buy a producer of chocolate or pasta: after 1980, they
wanted to buy KitKat or Buitoni. This distinction is very important; in the first case
firms wish to buy production capacity and in the second they want to buy a place in the
mind of the consumer” (p. 23). In other words, the shift in focus towards brands began
when it was understood that they were something more than mere identifiers. Brands,
according to Kapferer (1997) serve eight functions shown in Table 2.1: the first two are
mechanical and concern the essence of the brand: “to function as a recognized symbol
in order to facilitate choice and to gain time” (p. 29); the next three are for reducing the
perceived risk; and the final three concern the pleasure side of a brand. He adds that
brands perform an economic function in the mind of the consumer, “the value of the
brand comes from its ability to gain an exclusive, positive and prominent meaning in the
minds of a large number of consumers” (p. 25). Therefore branding and brand building
should focus on developing brand value.
A Brand Building Literature Review
Table 2.1
The Functions of the Brand for the Consumer
Function Consumer benefit
Identification To be clearly seen, to make sense of the offer, to quickly identify the soughtafter products.Practicality To allow savings of time and energy through identical
repurchasing and loyalty.Guarantee To be sure of finding the same quality no matter
where or when you buy the product or service.
Optimization To be sure of buying the best product in its category, the best performer for
a particular purpose. Characterization To have confirmation of your self-image or the
image that you present to others. Continuity Satisfaction brought about through
familiarity and intimacy with the brand that you have been consuming for years.
Hedonistic Satisfaction linked to the attractiveness of the brand, to its logo, to its
communication. Ethical Satisfaction linked to the responsible behavior of the brand in its
relationship towards society. Adapted from Kapferer (1997) Kapferer’s view of brand
value is monetary, and includes intangible assets. “Brands fail to achieve their value
creating potential where managers pursue strategies that are not orientated to
maximizing the shareholder value” (Doyle 2001a, p. 267). Four factors combine in the
mind of the consumer to determine the perceived value of the brand: brand awareness;
the level of perceived quality compared to competitors; the level of confidence, of
significance, of empathy, of liking; and the richness and attractiveness of the images
conjured up by the brand. In Figure 2.1 the relationships between the different concepts of
brand analysis, according to Kapferer (1997), are summarized.
From Brand Assets to Brand Equity
Brand Awareness
+ Image
+ Perceived quality
+ Evocations
+ Familiarity, liking
= Brand Assets
Brand added value
perceived by customers
- Costs of branding
- Costs of invested capital
Brand financial value
(BRAND EQUITY)
A Brand Building Literature Review
2.1.2.1 Brand Orientation
Urde (1999) presents Brand Orientation as another brand building model that focuses on
brands as strategic resources. “Brand Orientation is an approach in which the processes
of the organization revolve around the creation, development, and protection of brand
identity in an ongoing interaction with target customers with the aim of achieving
lasting competitive advantages in the form of brands” (p. 117-118). Brand orientation
focuses on developing brands in a more active and deliberate manner, starting with the
brand identity as a strategic platform. It can be said that as a consequence of this
orientation the brand becomes an “unconditional response to customer needs and wants”
(p. 120). This should be, however, considered carefully given that “what is demanded
by customers at any given moment is not necessarily the same as that which will
strengthen the brand as a strategic resource” (p. 121). Following this reasoning, “the
wants an needs of customers are not ignored, but they are not allowed to unilaterally
steer the development of the brand and determine its identity” (p. 122).
According to the brand orientation model, “the starting point for a process of brand
building is to first create a clear understanding of the internal brand identity. The brand
then becomes a strategic platform that provides the framework for the satisfaction of
customers’ wants and needs” (Urde 1999, p. 129). The point of departure for a brand
oriented
company is its brand mission.
Urde’s Brand Hexagon (1999), shown in Figure 2.2, integrates brand equity and brand
identity with a company’s direction, strategy and identity. The right side of the model
reflects the reference function -product category and product, which are analyzed
rationally-, while the left side of the model reflects the emotional function -corporate
and brand name, which are analyzed emotionally. “A brand is experienced in its
entirety” (p. 126), which means that both emotions and rational thought are involved.
The lower part of the model -mission and vision- reflects the company’s intentions
towards the brand, while the upper part reflects the way that target consumers interpret
the brand. At the center of the model lies the core process of brand meaning creation,
which includes the positioning and core values.
Brand Hexagon
Urde 1999
In summary, “in a brand-oriented organization, the objective is -within the framework
of the brand- to create value and meaning. The brand is a strategic platform for interplay
with the target group and thus is not limited to being an unconditional response to what
at any moment is demanded by customers” (Urde 1999, p. 130).
Additionally, in a later article, Urde (2003) mentions that the brand building process is
two-part: internal and external. He defines the internal process as that used primarily to
describe the relationship between the organization and the brand, with the internal
objective being for the organization to live its brands. Conversely, the external process
is that concerned with relations between the brand and the customer, with the external
objective of creating value and forming relationships with the customer.
2.1.2.2 Brand Leadership
Aaker and Joachimsthaler (2000) leave behind the traditional branding model and
introduce the brand leadership model, “which emphasizes strategy as well as tactics” (p.
7). In this model, the brand management process acquires different characteristics: a
strategic and visionary perspective; the brand manager is higher in the organization, has
a longer time job horizon, and is a strategist as well as communications team leader;
building brand equities and developing brand equity measures is the objective; and,
brand structures are complex, as the focus is on multiple brands, multiple products, and
Target
Audience
Product
Vision &
Mission
Brand name
Product
Category
Company
name
Positioning:
Core Values
Personality Quality
Communication
2) Associations
1) Awareness
3) Loyalty
multiple markets. In short, brand identity and creating brand value become the drivers
of strategy.
The brand leadership model is Aaker and Joachimsthaler’s (2000) proposal for building
strong brands. They argue that there are four challenges, summarized in Figure 2.3, that
must be addressed:
1) The organizational challenge: to create structures and processes that lead to
strong brands, with strong brand leader(s) for each product, market or country.
Also, to establish common vocabulary and tools, an information system that
allows for sharing information, experiences and initiatives, and a brand nurturing
culture and structure. Supporting this challenge, Mc William and
Dumas (1997) argue that everyone on the brand team needs to understand the
brand building process, and they propose metaphors as intelligent tools to
transmit the values of a firm. Doyle (2001b) adds that brand management must
be seen as part of the total management process and not only as a specialist
marketing activity.
2) The brand architecture challenge: to identify brands, sub-brands, their
relationships and roles. It is also necessary to clarify what is offered to the
consumer and to create synergies between brands; to promote the leveraging of
brand assets; to understand the role of brands, sub-brands, and endorsed brands
in order to know when to extend them; and to determine the relative role of each
brand of the portfolio. Aaker (2004a) renames brand architecture calling it
instead brand portfolio strategy. He says that “the brand portfolio strategy
specifies the structure of the brand portfolio and the scope, roles, and
interrelationships of the portfolio brands” (p. 13). Therefore, this challenge
could be renamed the brand portfolio strategy challenge.
3) The brand identity and position challenge: to assign a brand identity to each
managed brand and to position each brand effectively to create clarity. Speak
(1998) supports and adds to this stating that the brand identity challenge should
have a long-term focus in order to integrate the brand building process into the
fabric of the organization.
4) The brand building program challenge: to create communication programs and
other brand building activities to develop brand identity, that help not only with
the implementation but also in the brand defining process. In short, brand
building must do what is necessary to change customer perceptions, reinforce
attitudes, and create loyalty. One tactic to do so would be to consider alternative
media in addition to advertising. Doyle (2001b) also adds that the brand strategy
must maximize shareholder value.
Figure 2.3
Brand Leadership Tasks
Aaker and Joachimsthaler 2000
2.1.2.3 Brand Asset Management
Davis (2002) also talks about a new way of managing brands. He argues that brands,
along with people, are a company’s most valuable asset. “There is growing support for
viewing and managing the brand as an asset and thus having the brand drive every
strategic and investment decision” (Davis and Dunn 2002, p. 15). This becomes relevant
given that the top three strategic goals for brand strategy nowadays are increasing
customer loyalty, differentiating from the competition, and establishing market
leadership (Davis and Dunn 2002). It is important for a company to change its state of
mind in order to adopt this perspective because “brand management has to report all the
way to the top of the organization and has to involve every functional area” (Davis
Brand Architecture
- Brands/sub-brands/endorsed
brands
- Roles of brands/sub-brands
Brand
Leadership
Brand Identity/Position
- Aspiration image
- Positioning the brand
Organizational Structure and
Processes
- Responsibility for brand strategy
- Management processes
Brand-Building Programs
- Accessing multiple media
- Achieving brilliance
- Integrating the communication
- Measuring the results
A Brand Building Literature Review
8
2002, p. 9). Davis (2000) defines Brand Asset Management as “a balanced investment
approach for building the meaning of the brand, communicating it internally and
externally, and leveraging it to increase brand profitability, brand asset value, and brand
returns over time” (p. 12). Some of the shifts from traditional brand management to this
new model are highlighted in Table 2.2.
Table 2.2
The Shift from Traditional Brand Asset Management
Davis 2002
The Brand Asset Management process, as shown in Figure 2.4, involves four phases
and eleven steps. The first phase is to develop a brand vision, which consists of a single
step: developing the elements of a brand vision. The basic objective of this step is to
clearly state what the branding efforts must do to meet corporate goals. The second
phase is to determine the company’s “Brand Picture” by understanding consumer
perceptions about the brand and of competitor brands. This phase consists of three
steps: determining the brand’s image, creating the brand’s contract - list of customer’s
perceptions of all the current promises the brand makes-, and crafting a brand-based
customer model -which allows for understanding how consumers act and think, and
how and why they make their purchase decisions. The third phase is to develop a brand
asset management strategy, in order to determine the correct strategies for achieving
goals according to the brand vision. This phase consists of five steps: positioning the
brand, extending the brand, communicating the brand’s positioning, leveraging the
brand, and pricing the brand. Finally, the fourth phase is to support a brand asset
Traditional Brand Management
Brand management
Brand managers
Retention
One-time transactions
Customer satisfaction
Product-driven revenues
Three-month focus
Market share gains
Marketing manages the brand
Awareness and recall metrics
Brand is driven internally
Brand Asset Management Strategy
Brand asset management strategy
Brand champions and ambassadors
Deep loyalty
Lifetime relationships
Customer commitment
Brand-driv en revenues
Three-year focus
Stock price gains
All functional areas manage the
brand
Sophisticated brand metrics
Brand is driven externally
A Brand Building Literature Review
9
management culture. This final phase consists of two steps: creating a measure of the
return on brand investment, and establishing a brand-based culture.
Figure 2.4
Brand Asset Management Process
Davis 2002
2.1.2.4 LOGMAN Model
The logical brand management or LOGMAN model, combines insights from Kaplan
and Norton’s balanced scorecard method, BCG’s brand value creation method, the path
analysis method, the gap analysis method, and the house of quality method (Logman
2004). The model proposes a logical brand consistency audit by presenting the
following questions:
· Is there a logical interaction between the company’s brand drivers?
Phase 1- Developing a brand vision
Phase 2- Determining Brand Picture
Step 2
Determining brand image
Step 3
Creating brand contract
Step 4
Brand-based customer model
Phase 3- Developing a brand asset management strategy
Step 5
Positioning the brand
Step 6
Extending the brand
Step 7
Communicating brand’s positioning
Step 8
Leveraging the brand
Step 9
Pricing the brand
Phase 4- Supporting a brand management culture
Step 10
Measuring return on brand investment
Step 11
Establishing a brand-based culture
Step 1
Elements of a brand vision
A Brand Building Literature Review
10
· Are the company’s brand drivers perceived by customers the way the company
wants them to be?
· Are the company’s brand drivers perceived by customers the way the customers
want them to be?
· Are the external brand drivers perceived by customers the way the company
wants them to be?
· Is there logical consistency between the company’s brand drivers across the
different customer segments addressed?
· Is there logical consistency between the company’s brand objectives at different
perspective levels?
· Is there logical consistency between the brand’s drivers over time?
According to the author, answering these questions helps to identify real problems and
key drivers for their solution, and to analyze brand policy in a specific context.
2.2.3 Corporate Branding
The most recent turn in branding literature emerged in the mid-nineties. Businesses
began shifting their focus from product brands to corporate branding (de Chernatony
1999, Hatch and Schultz 2003). The corporate brand perspective supports, and could be
a consequence of, the strategic view of brands. King (1991) is considered to be the first
author to make a clear distinction between product and corporate brands, emphasizing
the importance of a multidisciplinary approach in order to manage them. It is after 1995
when more research on corporate branding is published. Balmer and Gray’s (2003)
literature review on corporate brand ing presents different visions that have been
developed during the years prior. They conclude that corporate brands are leading to the
development of a new branch of marketing which should be known as “corporate- level
marketing”
(Balmer and Greyser 2003).
Aaker (2004a) defines a corporate brand as a brand that represents an organization and
reflects its heritage, values, culture, people, and strategy. Corporate branding congruent
with the strategic brand vision (Schultz and Hatch 2003), dwells on developing brands
at an organizational level (Knox and Bickerton 2003) -which requires managing
interactions with multiple stakeholders (Balmer and Gray 2003, Knox and Bickerton
2003, Hatch and Schultz 2003, Aaker 2004b). A corporate brand is defined primarily by
A Brand Building Literature Review
11
organizational associations (Aaker 2004b), and thus can develop and leverage
organizational characteristics, as well as product and service attributes (Aaker 2004a).
Urde (2003) states that corporate brands must reflect organizational values. In other
words, an organization’s core values must be the guiding light of the brand building
process, both internally and externally. They must be built into the product, expressed in
behavior, and reflected in communication. “Core values influence continuity,
consistency and credibility in the building of a corporate brand” (p. 1036).
According to Balmer and Gray (2003), corporate and product brands are different in
terms of their composition, constituencies, maintenance, management, and disciplinary
roots. Hatch and Schultz (2003) distinguish six differences between product and
corporate branding:
1) The shift in focus from product to corporation of the branding effort;
2) The different exposure the organization is subject to, which makes the firm’s
behavior and its interaction with society much more visible;
3) The relation of the brand to all company stakeholders, not just customers;
4) The requirement of organization-wide support;
5) The temporal dimension of corporate brands includes past and future, not just
present;
6) The greater reach of corporate brands than product brands means that they take
on more strategic importance.
Given these differences, they describe a corporate branding framework, shown in Figure
2.5, which is based on three elements: strategic vision, organizational culture and
corporate image. They argue that developing the corporate brand involves articulating
and aligning these three elements, which can be achieved when an effective dialogue
between top management, external stakeholders, and members of the organizational
culture is established. Given the fact that corporate brands concern multiple
stakeholders, Knox and Bickerton (2003) suggest that this framework should be
extended in order to include a fourth variable: the competitive environment of the
organization, both from the perspective of its current image and current culture.
A Brand Building Literature Review
12
Figure 2.5
Elements of Corporate Branding
Hatch and Schultz 2003
Knox and Bickerton (2003) identify six “conventions ” of corporate brand building,
illustrated in Figure 2.6. They are:
· Brand context: understanding where the brand stands
· Brand construction: how the brand is positioned in accordance to customer and
stakeholder value
· Brand confirmation: the way the brand is articulated to the rest of the
organization and all of its audiences
· Brand consistency: delivering clarity to all stakeholders through its
communication channels
· Brand continuity: the alignment of business processes with the corporate brand
· Brand conditioning: the ability to monitor and manage the brand on a continual
basis
Figure 2.6
The Six Conventions of Corporate Branding
Knox and Bickerton 2003
Corporate
Branding
Vision
Culture Image
Corporate
Branding
Brand
context
Brand
conditioning
Brand
continuity
Brand
consistency
Brand
confirmation
Brand
construction
A Brand Building Literature Review
13
In sum, from the corporate brand vision every activity of the company should be seen
through the lens of the brand (Schultz and Hatch 2003).
2.3 BRAND EQUITY
The brand equity concept has been mentioned in more than one of the previously
analyzed models. But what exactly is brand equity? Brand equity, as first defined by
Farquhar (1989), is “the ‘added value’ with which a given brand endows a product” (p.
24). Apart from Farquhar’s first definition of brand equity, other definitions have
appeared. According to Lassar, Mittal, and Sharma (1995), brand equity has been
examined from a financial (Farquhar, Han, and Ijiri 1991; Simon and Sullivan 1993;
Kapferer 1997, Doyle 2001b), and a customer-based perspective (Keller 1993; Shocker,
Srivastava, and Rueckert 1994; Chen 2001). In other words, financial meaning from the
perspective of the value of the brand to the firm, and customer-based meaning the value
of the brand for the customer which comes from a marketing decision-making context
(Kim, Kim, and An 2003).
Brand equity has also been defined as “the enhancement in the perceived utility and
desirability a brand name confers on a product” (Lassar, Mittal and Sharma 1995, p.
13). High brand equity is considered to be a competitive advantage since: it implies that
firms can charge a premium; there is an increase in customer demand; extending a brand
becomes easier; communication campaigns are more effective; there is better trade
leverage; margins can be greater; and the company becomes less vulnerable to
competition (Bendixen, Bukasa, and Abratt 2003). In other words, high brand equity
generates a “differential effect”, higher “brand knowledge”, and a larger “consumer
response” (Keller 2003a), which normally leads to better brand performance, both from
a financial and a customer perspective.
2.3.1 Financial Perspective
Financial value-based techniques extract the brand equity value from the value of the
firm’s other assets (Kim, Kim, and An 2003). Simon and Sullivan (1993) define brand
equity as “the incremental cash flows which accrue to branded products over and above
the cash flows which would result from the sale of unbranded products” (p. 29). These
A Brand Building Literature Review
14
authors estimate a firm’s brand equity by deriving financial market estimates from
brand-related profits. Taking the financial market value of a firm as a base, they extract
the firm’s brand equity from the value of the firm’s other tangible and intangible assets,
which results in an estimate based on the firm’s future cash flows. Along the same line
of thought, Doyle (2001b) argues that brand equity is reflected by the ability of brands
to create value by accelerating growth and enhanc ing prices. In other words, brands
function as an important driver of cash flow.
2.3.2 Customer Perspective
According to Lassar, Mittal and Sharma (1995), five dimensions configure brand
equity: performance, value, social image, trustworthiness, and commitment. Aaker and
Joachimsthaler (2000) define brand equity as brand assets linked to a brand’s name and
symbol that add to, or subtract from, a product or service. According to them, these
assets, shown in Figure 2.7, can be grouped into four dimensions: brand awareness,
perceived quality, brand associations, and brand loyalty.
Figure 2.7
Brand Equity
Aaker and Joachimsthaler 2000
These dimensions have been commonly used and accepted by many researchers (Keller
1993; Motameni and Shahrokhi 1998; Yoo and Donthu 2001; Bendixen, Bukasa, and
Abratt 2003; Kim, Kim, and An 2003). Brand awareness affects perceptions and taste:
“people like the familiar and are prepared to ascribe all sorts of good attitudes to items
that are familiar to them” (Aaker and Joachimsthaler 2000, p. 17). Perceived quality
influences brand associations and affects brand profitability. Brand associations are
anything that connects the consumer to the brand, including “user imagery, product
attributes, organizational associations, brand personality, and symbols” (p. 17). “Brand
loyalty is at the heart of brand’s value. The concept is to strengthen the size and
intensity of each loyalty segment” (p. 17). Any way that brand equity is considered, it
Brand Equity
Brand
Awareness
Perceived
Quality
Brand
Associations
Brand
Loyalty
A Brand Building Literature Review
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can be understood as the incremental value a brand name grants a product (Srivastava
and Shocker 1991).
Keller (1993) introduces the Customer-Based Brand Equity (CBBE) model, which
“approaches brand equity form the perspective of the consumer -whether it be an
individual or an organization” (Keller 2003a, p. 59). The model is based on the premise
“that the power of a brand lies in what customers have learned, felt, seen and heard
about the brand as a result of their experiences over time” (p. 59). He defines CBBE “as
the differential effect that brand knowledge has on consumer response to the marketing
of that brand” (p. 60), which emerges from two sources: brand awareness and brand
image.
According to Keller (2003a), brand awareness consists of brand recognition -the
“consumer’s ability to confirm prior exposure to the brand when given a brand as a cue”
(p. 67)- and brand recall -the “consumer’s ability to retrieve the brand form memory
when given the product category, the needs fulfilled by the category, or a purchase or
usage situation as cue” (p. 67). On the other hand, “brand image is created by marketing
programs that link strong, favorable, and unique associations to the brand in the
memory” (p. 70). These associations are not only controlled by the marketing program,
but also through direct experience, brand information, word of mouth, assumptions of
the brand itself -name, logo-, or with the brand’s identification with a certain company,
country, distribution channel, person, place or event.
The way to build a strong brand, according to the CBBE model, is by following four
sequential steps, each one representing a fundamental question that customers ask about
brands: 1) Ensuring the identification of the brand with a specific product category or
need in the customer’s mind -who are you?, 2) Establishing the meaning of the brand in
the customer’s mind by strategically linking tangible and intangible brand associations
with certain properties -what are you? 3) Eliciting customer responses to the brand
identification and meaning -what about you? 4) Converting the response into an active,
intense and loyal relationship between the customers and the brand -what about you and
me? The CBBE model is built by “sequentially establishing six ‘brand building blocks’
with customers” (Keller 2003a. p. 75), that can be assembled as a brand pyramid, shown
in Figure 2.8. Brand salience relates to the awareness of the brand. Brand performance
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relates to the satisfaction of customers’ functional needs. Brand imagery relates to the
satisfaction of customers’ psychological needs. Brand judgments focus on customers’
opinions based on performance and imagery. Brand feelings are the customers’
emotional responses and reactions to the brand. Brand resonance is the relationship and
level of identification of the customer with a brand.
Figure 2.8
Customer-Based Brand Equity Pyramid
Keller 2003a
2.3.3 Combined Perspective
Some authors have linked both the financial and the customer-based perspectives of
brand equity. Motameni and Shahrokhi (1998) developed a model called “Global Brand
Equity (GBE)” that estimates brand equity and shows its sources of value. They use an
interdisciplinary approach that is able to quantify value components and apply financial
techniques. Baldauf, Cravens, and Binder (2003) state that cash flow and short-term
parameters are what usually firms use as indicators of performance, without considering
brand-based performances. In their study, they suggest using perceived quality, brand
loyalty, and brand association as measures of brand equity, and they find that firms with
higher levels of these measures have higher levels of performance. This confirms the
importance of brand equity as an indicator of performance. Dyson, Farr, and Hollis
(1996), after recognizing the financial value attached to brands, propose a
consumerdriven
system of measuring equity. They argue that economic value is created in
Resonance
Feelings Judgments
Salience
Performance Imagery
1. Identity
¿Who are you?
2. Meaning
¿What are you?
3. Response
¿What about you?
4. Relationships
¿What about you and me?
A Brand Building Literature Review
17
transactions which are the source of equity. Therefore, they developed a model called
the “Consumer Value Model” that predicts transactions in order to bridge the gap
between the intangible perceptions and the tangible revenues generated by a brand.
2.4 OTHER CONCEPTS
In addition to the brand building models discussed above, it is worth mentioning some
other relevant concepts found in literature.
2.4.1 Brand Identity
Park, Jaworski and MacInnis (1986) say that brand image is the “understanding
consumers derive form the total set of brand-related activities engaged by the firm” (p.
135). De Chernatony (1999) suggests passing from brand management to identity
management by placing special importance on the internal aspect of brand building. He
argues that more emphasis needs to be placed on brand identity. Identity, he mentions,
“is about ethos, aims and values that present a sense of individuality differentiating the
brand” (p. 165). He conceptualizes the brand’s identity in terms of vision and culture,
which drive positioning, personality, and any other subsequent relationships. In this
sense, employees and staff members’ vision and culture affect the brand building
process. He therefore argues that more attention should be placed on internal aspects of
branding, such as the role staff plays in shaping a brand’s values.
2.4.2 Building Services Brands
In a subsequent article, a particular perspective for building services brands is suggested
by de Chernatony and Segal-Horn (2001). Given the unique characteristics of services intangibility, inseparability of production and consumption, heterogeneity of quality,
and perishability-, “delivery of the services brand is about the experience of the
customer at the interface with the service provider” (p. 648). Therefore, the authors
argue, it is not correct to use the classical branding models for the service sector, given
that the staff plays “an important role in services branding, influencing brand quality
and brand values through interactions they have with consumers” (p. 665). Underwood,
Bond, and Baer (2001) contribute to the discussion about building service brands by
using the sports marketplace as an example. They provide a conceptual foundation for
A Brand Building Literature Review
18
understanding the role of social identity in the services brand building process. They
identify four characteristics of the sports environment and propose that brands can be
strengthened by fostering group experiences, establishing a unique history or traditions,
initiating rituals, and designing a physical facility where the brand identity and an
experience can be shared.
2.4.3 Brand Personality
Aaker (1997) develops the concept of brand personality, or “the set of human
characteristics associated with a brand” (p. 347). She creates a reliable, valid, and
generalizable brand personality measurement scale “based on an extensive data
collection involving ratings of 114 personality traits on 37 brands in various product
categories by over 600 individuals” (Keller 2003a p. 447). In her resulting framework,
shown in Figure 2.9, five dimensions are distinguished -the “big five”- that help to
explain the symbolic and self-expressive functions of a brand: sincerity, competence,
excitement, sophistication, and ruggedness.
Figure 2.9
A Brand Personality Framework
Aaker 1997
2.4.4 Brands as a Relationship
Fournier (1998) suggests that a brand can be viewed as a relationship partner. One way
to achieve this is by understanding “the ways in which brands are animated, humanized,
or somehow personalized” (p. 344). She mentions three brand animating processes:
through the spirit of a past or present other, by using brand-person associations, and
through a complete anthropomorphization of the brand. Brand relationships happen “at
Brand Personality
Sincerity Excitement Competence Sophistication Ruggedness
• Down-to-earth
• Honest
• Wholesome
• Cheerful
• Daring
• Spirited
• Imaginative
• Up-to-date
• Reliable
• Intelligent
• Successful
• Upper class
• Charming
• Outdoorsy
• Tough
A Brand Building Literature Review
19
the level of consumers’ lived experiences” (p. 360). These relationships offer meanings
to the consumer, some being functional and utilitarian, while others are psychological or
emotional.
2.4.5 Brand Origin
Thakor and Kohli (1996) argue that in addition to the traditional concepts identified as
brand equity influencers, brand origin must also be considered. They define brand
origin as “the place, region or country to which the brand is perceived to belong by its
customers” (p. 27). Brand origin can be more or less salient for some brands or others,
and therefore, the use of origin cues should be subtle and implicit when the brand
concept relies more on symbolism, while more explicit when the brand concept relies
more on features. In a later article, Thakor and Lavack (2003) state that even more
important than the brand origin itself is the perceived brand origin as a source of brand
appeal. In their study the authors show “that country of corporate ownership is a strong
determinant of brand origin perceptions… furthermore, country of perceived corporate
ownership may also be a stronger influence than actual country of corporate ownership”
(p. 403). It is similarly important that less concern be given to the place where brands
manufacture their products, and more to the place where people perceive the brand’s
country of origin to be.
2.4.6 Brand Communities
Brand communities (Muniz and O’Guinn 2001; Mc Alexander, Schouten, and Koenig
2002) is another concept found in literature that can strengthen brand equity, while also
reinforcing the social nature of brands. “Brand communities carry out important
functions on behalf of the brand, such as sharing information, perpetuating the history
and culture of the brand, and providing assistance. They provide social structure to the
relationship between marketer and consumer” (Muniz and O’Guinn 2001, p. 427).
Muniz and O’Guinn (1991) define a brand community as a “specialized, nongeographically
bound community, based on a structured set of relationships among
admirers or a brand” (p. 412). According to their research, brand communities share
three core characteristics: the existence of a consciousness of a kind, the presence of
shared rituals, and a sense of moral responsibility between members.
A Brand Building Literature Review
20
2.4.7 Experiential Branding
Schmitt’s (1999) experiential marketing concept also adds to the traditional view of the
branding concept. He explicitly states how the brand as an identifier has evolved to
become a provider of experiences. The experiential marketing approach views brands as
an integrated holistic experience, which is possible to create through nurturing sensory,
affective and creative relations, as well as associating a lifestyle with the brand.
2.4.8 Brand Stewardship
Brand Stewardship, as Speak (1998) defines it, “is the leadership of and the
accountability for the long-term well-being of the organizational brand equities” (p. 33).
A brand that develops a stewardship process - meaning that it engages an executive
leadership in articulating a vision for key market relationships, imbues the brand
building process to the whole marketing process, and obtains the compromise of the
whole organization to transmit the brand promises through every action taken- will
generally obtain brand- loyal customers.
2.4.9 Emotional Branding
Gobé (2001) believes that the emotiona l aspect of brands is what makes a key difference
for consumers. He argues that people are interested in buying emotional experiences,
and he calls the brands that are able to create an emotional bond with their clients
emotional brands. According to him, emotional brands share a set of common values
that make them highly sought. These values are:
· a great corporate culture focused on people,
· a communication style and philosophy that stands out, and
· an emotional hook that draws consumers to their promise.
2.4.10 Citizen Brands
Extending his ideas, Gobé (2002) says that today consumers do not want to be
romanced by brands, but want to establish multifaceted, holistic relationships with
them. People’s emotional bond with brands is influenced by knowing if brands behave
well and are actively involved in making the world a better place.
A Brand Building Literature Review
neighbors. Therefore, he introduces the concept of citizen brands which exist in firms
that take into consideration the impact on people, both internally and externally, of
every decision they make. In other words, a citizen brand is a socially responsible
brand.
2.4.11 CSR
Finally, corporate social responsibility (CSR) must be mentioned as another concept
that is influencing the development of brands nowadays, especially corporate brands.
Both branding and CSR have become crucially important now that the organizations
have recognized how these strategies can add or detract from their value (Blumenthal
and Bergstrom 2003). Criticism of business is more far-reaching than ever before due to
higher expectations of businesses today (Smith 2003). As Smith and Alcorn (1991)
mention, corporations have integrated marketing strategy and social responsibility, and
this integrated strategy has been labeled cause marketing. Because corporations already
invest in both branding and philanthropy, the rationale for integrating branding and CSR
derives from the synergies created when both strategies merge (Blumenthal and
Bergstrom 2003).
CSR literature is ample and it is not the subject of this thesis to analyze it. However, it
is necessary to establish how closely related is brand building towards social values to
this concept. CSR refers to the obligations of the firm towards society (Smith 2003). It
also refers to the consideration of and response to issues beyond the narrow economic,
technical, and legal requirements a firm has in order to accomplish social benefits along
with traditional economic gains (Husted 2003). An example of a CSR governance
structure is a collaborative scheme, which involves a partnership between the firm and
an organization in which the firm transfers resources to the organization in order to
carry out CSR activities jointly (Husted 2003). This same structure is necessary to
implement the brand building towards social values model that is described in the
following sections.
CSR can be defined in terms of legitimate ethics or from an instrumentalist perspective
where corporate image is the prime concern (McAdam and Leonard 2003). Brand
building towards social values relates to CSR in both ways.
A Brand Building Literature Review
Given that brand building is strategic, and according to strategy the brand must reflect the
values of a firm, the corporate responsibility values projected by a brand must be
legitimate. If not, the risk of being perceived as dishonest or untrustworthy creates a lack
of congruence that can negatively affect brand image. While corporate image is not the
prime concern here, as just explained, it is an important element in the branding process.
Blumenthal and Bergstrom (2003) expose four key reasons for integrating CSR under
the umbrella of the brand which are: recognizing the magnitude of the brand promise;
maintaining customer loyalty; maximizing investment that would be placed in CSR
regardless of the brand; and avoiding conflict with shareholders. In other words,
“branded CSR turns philanthropy from implicit delivery of the promise to an explicit
one” (p. 337). This becomes everyday more important as the public wants to know
what, where, and how much brands are giving back to society.
Brand Loyalty
Brand loyalty is the ultimate goal a company sets for a branded product. Inprevious
articles, the defi nition and importance of branded were discussed, as well as necessary
steps needed to brand a product. This article focuses on brand loyalty, its importance to a
companyand steps necessary to convert to and maintain brand loyalty.
What is Brand Loyalty?
Brand loyalty is a consumer’s preference to buy a particular brand in a product category.
It occurs because consumers perceive that the brand offers the right product features,
images or level of quality at the right price. This perception becomes the foundation for a
new buying habit. Basically, consumers initially will make a trial purchase of the brand
and,
after satisfaction, tend to form habits and continue purchasing the same brand because
the product is safe and familiar.Brand loyalists have the following mindset:
• “I am committed to this brand.”
• “I am willing to pay a higher price for this brand over other brands.”
• “I will recommend this brand to others.”
Why is Brand Loyalty Important to the Bottom Line?
There are three main reasons why brand loyalty is important:• Higher Sales Volume – The
average United States
company loses half of its customers every five years, equating to a 13 percent annual loss
of customers. This statistic illustrates the challenges companies face when trying to grow
in competitive environments. Achieving even 1percent annual growth requires increasing
sales to customers customers, both existing and new, by 14 percent. Reducing customer
loss can dramatically improve business growth and brand loyalty, which leads to
consistent and even greater sales since the same brand is purchased repeatedly.
• Premium Pricing Ability – Studies show that as brand loyalty increases, consumers are
less sensitive to price changes. Generally, they are willing to pay more for their preferred
brand because they perceive some unique value in the brand that other alternatives do
not provide. Additionally, brand loyalists buy less frequently on cents-off deals; these
promotions only subsidize planned purchases.
• Retain Rather than Seek – Brand loyalists are willing to search for their favorite brand
and are less sensitive to competitive promotions. The result is lower costs for advertising,
marketing and distribution. Specific call, it costs four to six times as much to attract a new
customer as it does to retain an old one.
What is the Process to Create and Maintain Brand Loyalty?
Favorable brand attitudes are the determinants of brand loyalty – consumers must like
the product in order to develop loyalty to it. To convert occasional purchasers into brand
loyalists, habits must be reinforced. Consumers must be reminded of the value of their
purchase and encouraged to continue purchasing the product in the future.To encourage
repeat purchases, advertisement before and after the sale is critical. In addition to
creating awareness and promoting initial purchases, advertising shapes and reinforces
consumer attitudes so these attitudes mature into beliefs, which need to be reinforced
until they develop into loyalty. For example, the most avid readers of a travel ad are those
who just returned from the destination.
THE ELONGATING TAIL OF BRAND COMMUNICATION
An approach to brand-building incorporating long tail economics
by
Mohammed Iqbal,
When you can dramatically lower the costs of connecting supply and demand,
it changes not just the numbers, but the entire nature of the market.
– Chris Anderson, The Long Tail
Ever since Chris Anderson first wrote about the ‘long tail’ in a feature for WIRED magazine
in October 2004, the term has found application in myriads of fields. A simple ‘long tail of’
search will yield a depth of results that can only be explained by the very term itself.
There’s mention of the long tail of scientific research, long tail of tags, long tail of software
demand, long tail of TV, long tail of popularity, long tail of legal scholarship, long tail of
camps, long tail of programming languages, long tail of the blogosphere, long tail of
innovation, long tail of choice, long tail of video games, long tail of the flat world, long tail
of street entrepreneurs… There’s even a mention of the long tail of alcohol distribution!
And I was still only into the third page of Google results. However, the long arm of the long
tail still hasn’t yet found its way to some not-so-remote corners of the universe. The long
tail of brands (not to be confused with the long tail of advertising, which is covered by
Chris Anderson in the subsequent book he wrote) is very sparse and anorexic, at least as
far as Google results go. Only four mentions show up. And the long tail of brand-building
or branding – the process of creating, honing, nurturing and shepherding a
product/service from the wilderness of anonymity to the city square of instant
recognition, recall and familiarity – is conspicuous by its absence. In fact, brand experts go
about their business as if it has been inoculated against the long tail epidemic. Almost all
of them, it seems, are keen to keep sailing in the direction their ships have been plough ing
all these years – and at least one guru insists on pushing the envelope further into short
head territory. In a celebrated speech at Cannes last year, Lord Maurice Saatchi unveiled
his agency’s thinking on building brands in the future. Mixing psychology with the Bible,
his answer to the perils of brand-building in the internet era is simple – push deeper,
harder and farther than we have done all these years.
Owning a clear, unique, single-minded proposition wasn’t enough. To succeed in a world
of message fragmentation, media fragmentation, continuous partial attention (CPA), and
non-existent day-after-recalls (DAR), one has to hone the brand positioning relentlessly,
until only one word – yes, one measly word - remained. Two words were one word too
many, as Lord Saatchi reminded those pleading for lenience. For Brand America it was
‘Freedom.’ For Coca-Cola it’s ‘Refreshing.’ For Sony, it may be ‘Feel.’ For HP,
it’s ‘Invent.’ The challenge was to find the word and not forsake it, ever. Having been
anointed, The Word will guide the brand’s future – its every move as a company, and not
just its advertising and communication.
According to Lord Saatchi, One Word Equity – as this new approach was christened – will
give advertising the kiss of life it so direly needs. For it was no less than advertising’s
funeral he had come to attend at Cannes, before being called upon to give it the CPR
routine.
Of simplicity and complexity
The reaction to Lord Saatchi’s speech was mixed. One half of the advertising world – bred
on the scarcity of media and the consequent need to be pithy and single-minded in what
one is saying – applauded slavishly. To them, this spartan future world seemed just
what the doctor had ordered. They could now go home and continue to do the same things
they were used to doing – only working on it much harder and burning more of the
midnight oil. The boisterous half – most of whom seemed to be voicing their opinion on
the blogosphere – differed. The really picky ones seemed to note that it took two thousand
and five words to explain One Word Equity. In fact, One Word Equity itself was two words
too long. Most of the considered reaction was an unequivocal rejection of the
disingenuous and un-layered simplicity a One Word Equity exercise leaves behind.
Simplifying was one thing, simplicity was another. And in this world, though no one could
quite define why, simplicity was no longer desirable. One had to be simple and yet not
eschew complexity – a task that’s easier said than done. Russell Davies, planner
provocateur and ex-world wide planning head of Nike, wrote on his blog (though
not directly in response to Lord Saatchi’s speech) : “What people actually want is stuff
with some complexity, some meat, some richness. Stuff that has depth, humour, tension,
drama etc etc. Not stuff that's distilled to a simple essence or refined to a single compelling
truth. No-one ever came out of a movie and said "I really liked that. It was really clear."
Clarity is important to our research methodologies, not to our consumers.”
Judging by the reaction to this post and by the Mexican wave of blog posts and comments
criticizing One Word Equity, it was obvious this idea of brand polyphony (as Russell calls
it) was infectious and appealing. It’s appealing because we ourselves as consumers seek it.
We find fault in movie-characters for being too uni-dimensional. We say people are
uninteresting (or boring) if their range of interests or conversations are too narrow.
In The Long Tail, Chris Anderson states an essential truth we all know and take for
granted - “Everyone’s taste departs from the mainstream somewhere.”
But what traditional brand-building with its single minded and simple (and sometimes
simplistic) brand idea does is ignore that reality and reduces to the lowest common
denominator all our individual relationships with one brand. There’s only one view of a
brand you can have – the one that it has so painstakingly assembled for itself. All other
probable ideas about the brand are deemed to be incompatible with this one and
shouldn’t be entertained.
Will the twain ever meet?
So, is there some way of reconciling this need to be simple in our communication and still
not be perceived as a simpleton? Is there a brand-building model that can give us layered,
nuanced and intriguing brands that are more than just skin deep and one word thin?
The answers to these questions overlap with the answer to the larger question (and the
right one) I believe we should be asking in a world populated by Lord Saatchi’s digital
natives, digital immigrants and everyone else.
“What are the changes being wrought upon the business of brand-building by this
relentless shift towards long tail economics?” The answer is nothing short of cataclysmic
and will represent a departure from everything advertising and brand-building has stood
for until now. But before we embark on that journey, here’s a brief summary of the long
tail and its terminology.
A short summary of the long tail
The original WIRED article introducing the long tail paraphrased the essential thinking
behind it in a terse, and instructive, sub-head – “Forget squeezing millions from a few
mega-hits at the top of the charts. The future of entertainment is in the millions of niche
markets at the shallow end of the bitstream.” It is common knowledge that when you plot
all the products (in a company or a supermarket or the universe) on the x-axis and
corresponding revenues on the y-axis, you get what is called a Pareto distribution curve.
More commonly recognizable as the 80/20 principle, this law suggests that a majority of
the sales come from a very few products.
Figure 1. Pareto distribution curve illustrating the 80/20 principle .The black part of the
curve are the hits – the 20% that bring in
80% of the profits. The white portion of the curve represents the hitherto ignored long tail of
the market.
This sort of distribution is easily accessible and verifiable by experience – it is a truth
that’s been sprinkled with great generosity all around us. A tiny percentage of our clients
do indeed give us most of our business. About 20% of words in the English language do
form the basis for 80% of our conversation. Small concentrated areas of land in a country
are likely to be home to a majority of its population. And so on. In real and measurable
terms, the distribution is more 80/10 – that it doesn’t add to 100 doesn’t matter because
they are percentages of different things. This Law of the Vital Few is so ubiquitous, in fact,
that we take it for granted that that’s how the world is – and is meant to be. In particular,
the 80/20 principle is the dominating force that has shaped our understanding of business
and popular culture - and how we expect to experience both. Take the pre-online music
industry as an example. Only a handful of music albums released every year
were hits – they made it to the Top 40 countdown, to store shelves, to TV and radio play
times and the written (and unwritten) annals of pop culture. These were the hits that
raked in the money – the rest were destined to obscurity and a bad-rep as money-losers
and failures.
Recognizing this and with their own 80/10 and scarcity principles to deal with, the retail
businesses where we buy our music, primarily stocked only the hits. With limited and
expensive shelf space to compete for, a mainstream hit album stood more of a chance of
earning its keep than a niche album. Further, a hit album was the breadwinner not just for
itself but also for the albums ‘expected’ to be hits.
Because no matter how carefully one screened what makes it to the shelves, some of these
projections
invariably turned out to be wrong.
So what happens to the remaining 80% of the albums recorded every year? Very few
make money of any
sort and are destined to be the ‘dark matter’ of our culture – around, but invisible both to
the eyes of
commerce and discerning taste.
7
But things have changed with the arrival of online retailers like Amazon, Rhapsody and
iTunes. While
Wal-mart can stock only 4,500 unique albums (amounting to 25,000 songs) on its shelves,
Rhapsody stores
as many as 1.5 million unique song tracks on its servers.
And if you think that the majority (the tail) of these songs simply exist with no takers, you
will be
surprised. A vast majority of the songs on Rhapsody – even up to a staggering 900,000 and
beyond – have
been streamed or bought at least once. And as you trek upslope of the tail, many more
times.
While these sales individually can’t rival the mega-hits – the songs that sell by the millions
– their
combined sales amount to a significant addition to revenues. In fact, as Rhapsody and
other online retailers
build up their collection further, the revenues from this long tail can even match the
revenues from the short
‘hit-driven’ head of the curve.
The reason why Rhapsody can pull this off is because, unlike a real world retailer, they
don’t have to deal
with a scarcity of shelf space. With virtually unlimited shelf space and an almost negligible
rental on it,
Rhapsody can treat all its tracks as equal – the mega-hits, the hits, the near misses, and the
ones that will
only sell in ones and twos.
The phenomenon of the long tail was first put into practice at Amazon’s online book
business. And now it
has found application across industries. Rhapsody and iTunes in music; Netflix in movies;
E-bay, and
Amazon’s own Marketplace programme, in retaling; Google in advertising (through its
AdSense and
AdWords programmes), etc.
Misconceptions and misnomers
One of the most common misconceptions about the long tail is that it requires the Internet
as a precondition
for it to work. It’s true that the Internet has given rise to the most visible and celebrated
examples
(ironically, the hits) of the long tail phenomenon. But its existence (or involvement) isn’t a
necessary
condition for the working of a long tail.
In his book, Chris Anderson begins the narrating the history of the long tail with Sears and
Roebuck and
how in 1906 they revolutionized shopping with their mail-order catalog business. From
their gigantic
warehouses in Chicago they could stock and deliver over 200,000 items, compared to the
mere couple of
thousand at the nearest general store. And what’s more, their efficiencies meant that
people could buy them
at as much as 50 per cent lesser, even after shipping.
8
Mail order catalogs were the long tail of general stores and so were the supermarkets that
emerged soon
after. Correspondence courses and degrees were the long tail of college education before
online education
took over. Credit cards are the long tail of the money lending industry.
In fact, as Chris Anderson mentions, “The story of the Long Tail is really about the
economics of
abundance – what happens when the bottlenecks that stand between supply and demand
in our culture start
to disappear and everything becomes available to everyone.”
This process of easing of bottlenecks is gradual and wherever supply and demand are
making light of the
hurdles (with or without the help of the Internet), there’s a long tail blooming.
The second misconception about the long tail is that it’s an absolute term – that in a given
market there’s
one concrete, well-defined and addressable block that responds to the name of ‘long tail.’
The truth is that the long tail is a relative term – and the long tail is in fact made up of
hundreds of long
tails, each with heads of their own. And no matter where you are on the curve there’s a
long tail waiting to
be unearthed further down the tail.
In that sense, time and technological progress are the twin engines that gradually dissolve
the barriers to
supply and demand until a time when we’ll simply have “culture unfiltered by economic
scarcity.”
In my opinion, one reason why these misconceptions exist is because of the name. Chris
Anderson picked
up the name from statistics – curves with characteristics of these power law distributions
are called “longtailed
distributions.” Chris merely turned it into a “proper noun” and the long tail was born.
I think a better-serving name would have been ‘the elongating tail’ – an adverb + noun
pairing capturing
not just its present tail state but also suggesting the permanence of movement inherent in
it.
With this name, the birth of the internet would have just been an incident (albeit a
significant one) in the
history of the elongating tail. A history that dates back to the times when man first started
gathering at
marketplaces for barter and trade, instead of settling for whatever his neighbour could
offer.
The long tail hits a bottleneck
We began this journey together wondering why there has been no application of long tail
thinking in brandbuilding.
There are a few good reasons why.
9
One, the current discussions of the long tail (in the book written by Chris Anderson and in
the media) have
largely concentrated on the most visible instances of distribution and demand-and-supply
bottlenecks. The
retail and entertainment industries with their accessible examples have rooted much of
the long-tail debate
in the marketplaces we recognize and understand – books, music, movies, second-hand
books, etc
Two, examples of the application of long tail thinking in advertising are the twin
approaches taken by
Google. With its AdWords programme, Google is tapping not the mega-advertisers but
advertisers of any
sort and size – even you and me. For as little as one US cent, any one of us can place an
online
advertisement on a site anywhere in the world.
Google’s AdSense programme on the other hand is democratizing media. You don’t have to
be a media
conglomerate to make money by displaying ads - a simple humble blog will do. All you
have to do is sign
up with Google AdSense, and revenue from your blog could also be featuring on your tax
returns.
In my humble opinion, these two early examples have stunted further thinking about long
tail applications
in advertising and brand building. But that is the peril of mistaking the long tail to be an
absolute and
singular term. The world around us is an overlapping series of thousands of long tails –
some of which have
been discovered and exploited, but a majority of which are yet to be discovered.
And finally, most of the principles of brand-building were formulated at a time when mass
media with its
hit-driven economics was at its prime. Its purveyors took the scarcity of media and limited
exposure time
for granted – for they couldn’t even fathom a world of media abundance and audience
fragmentation.
Built on the foundation of scarcity and how to deal with it, these principles have now
become ingrained
into our thinking and practice. So much so that we don’t see the scarcity and distribution
bottlenecks as a
problem – mostly we don’t even realize there are there.
As an industry we are also accustomed to the idea of repetition as a device of persuasion.
So when we are offered abundant choices in distribution channels and bandwidth, our
conditioned response is to repeat the same message (optimized for a 15 second slot) many
times over. After all, the more number of times the consumer gets to
listen/see/read/experience a message, the more strongly he will associate it with the
brand, right?
Lord Saatchi’s One Word Equity is the worst of these excesses (think of the irony of it.) By
reducing the carrier package to just one word, it ostensibly reduces errors in
transmission. But what it also does is effectively multiply the available bandwidth
manifold – think one word passing through a distribution channel optimized for the 25
words in a 15 second commercial or a press ad. The result? An effective multiplication of
the media budget and more mind-numbing repetition. An early example of long tail
thinking in brand-building is a model named Tran media planning pioneered by a London
planner, Faris Yakob. Recognizing that different media don’t have to repeat the same
message endlessly, Faris recommends using different media to tell different parts of the
story. These individual mosaics of the brand story will then be assembled by the consumer
in his mind, thereby allowing a riche
r, layered and interesting story to be communicated. As Faris points out, the advertising
for Matrix (the movie) implemented this thinking.
Transmedia planning elongates the tail of brands by using the increased channel
bandwidth available to populate it with more than one message. But it stills refuses to
forego the single minded brand proposition, which is the overarching brand story it
attempts to narrate. And you can’t go very much further down the tail, if you insist on
peddling one product only.
Long live the single-minded brand proposition
In The Long Tail, Chris Anderson writes that the hit-driven media and entertainment
culture of the second half of the twentieth century can be defined by these characteri
∞ A desperate search for one-size-fits-all products
∞ Trying to predict demand
∞ Pulling ‘misses’ off the market
∞ Limited choice
For anyone who has ever worked in advertising, the above should definitely sound very
familiar. Try replacing ‘products’ with ‘brand ideas’ and have a look at it again.
We seldom think of the brand ideas and advertising we create as something we sell but
that indeed is what we do. Consumers pay for it with their time and attention, and when
the price or the benefit is not what they are seeking, they tune it out. We have a no sale
and the gigantic universal spam counter registers yet another click. In creating and
peddling our wares we also use the very same devices and tricks that the media and
entertainment industry have perfected in the last century. We use pre-filtering as
mechanism to predict and decide what will have mass appeal. We choose between
alternatives – only allowing ‘one’ brand idea at a time to make it the expensive ‘shelf
space’. We pull off air any ‘brand idea’ that doesn’t connect with all of our identified
consumers – even if it has its own small niche of buyers. Whether we realize it or not, we
have been dancing forever to the tunes of shelf-space scarcity and distribution
bottlenecks. While all the while believing self-righteously that the single-minded brand
proposition is the only right way to build a brand in any situation. Even in current times of
abundance – abundant shelf space (for brand ideas), abundant distribution (in media
channels and bandwidth) and abundant choice (of brand propositions tailor-made for
each of your niche audiences.) So what’s the option?
Chris Anderson summaries what to do, not just for the world of brands but for anyone
staring at a long tail wild west. “In scarce markets, you’ve got to guess at what will sell. In
abundant markets, you can simply throw everything out there and see what happens,
letting the market sort it all out.” And here he’s elaborating further. “The more abundant
the storage and distribution, the less discriminating you have to be in how you use it.”
In short, the application of the first principles of long tail thinking to brand-building yields
an essential
truth – one more in harmony with the way the world works than with the artificial
construct of advertising
and brand building.
There’s nothing sacrosanct about the single-minded brand proposition. In fact, in markets
of abundance it is
the wrong strategy to follow. In these markets, it makes sense to make available in the
market every single
proposition your brand can and should stand for.
The long tail of brand building
In effect, the communication for every brand represents an individual market in which
different messages
for that brand compete for consumer attention and time. Largely due to the scarcity and
expense of media,
contemporary brand-building models advocate pre-filtering what goes on the limited and
expensive ‘shelf
space’ of media.
To ensure maximum bang for our buck, traditional brand-building models also advocate
focusing on only
one brand idea – called the single-minded brand proposition. Which made in sense in
times of mass media
dominance, given the economics of the situation. If you couldn’t speak much or if it was
too expensive to
speak, do speak about one thing only. And just ensure that it gets across.
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Fig 2. Truncated brand communication curve.
Traditional brand-building advocates artificially truncating the curve at the head to make
the economics work.
Since everything – especially the entire advertising budget – rode on it, arriving at the
correct brand
proposition was a task of infinite magnitude. Some brands spend millions – on research
and on employing
the best professionals – to ensure that as many people consume what’s on offer by paying
with their time
and attention. In short, the advertising agency’s task was to engineer a ‘hit’ – a task made
infinitely more
difficult because there is only one product to get it right and there is no way to hedge one’s
bets.
But what of the other equally viable brand ideas for the same brand? They probably can’t
end up as ‘hits’
and attract audiences by the millions, but they too can have their own niche audiences –
numbering in the
thousands, hundreds, tens or even ones and twos. But the harsh economics of a hit-driven
world mean that
there’s no place for them.
On the other hand, a healthy and complete long tail of brand-building would look
something like this.
Figure 3. A healthy and complete long tail of the brand. The primary proposition stills draws
the hits.
But abundant shelf-space and low distribution costs enable the brand to connect with every
niche idea
with its own set of loyal consumers.
The task of the advertising agency here is to generate all the myriad communication
messages with which
people could relate to a brand and create communication for them all. (They will definitely
need to help to
pull this off, but we’ll come to that in a little while.)
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Of course, the streamlined and aerodynamic economics of mass media would still mean
that one brand
proposition may have to lead the overall communication. But no longer should it be
allowed to dominate all
the communication for the brand.
The fragmentation and abundance of media has now helped lower the barriers to
connecting the supply and
demand of more brand messages – theoretically of all possible brand messages.
For eg, Volvo’s primary brand proposition could continue to be safety. But if there’re
people out there who
relate to it as a stylish car, you can create communication tailor-made for them.
Simultaneously, another
bunch of people might actually like a Volvo for its European-ness. No longer will they have
to ignore that
connection and only seek ‘safety’ in Volvos.
As Chris Anderson puts it, “Long tail businesses treat consumers as individuals, offering
mass
customization as an alternative to mass market fare.”
Elongating the long tail for your brand
In theory, the long tail can extend up to infinity incorporating every possible
communication message for a
brand. In practice, there are considerations of cost and the brand communication curve
will have to be
arbitrarily truncated at some point.
But unlike traditional brand-building models, the truncation doesn’t have to happen at the
head of the
curve. The tail can stretch much further from where it currently ends; and as technology
finds more ways to
lower distribution costs, the further it can be elongated.
According to Chris Anderson, two imperatives summarize the secret to creating a thriving
long tail
business. They are :
1. Make everything available
2. Help me find it.
Here are some practical and simple steps that translate the above two rules to make your
brand
communication long tail a thriving marketplace of messages.
1. Seek help in populating the curve
No matter how deep-pocketed a brand is, populating the entire long tail curve with
customized messages
across the spectrum can be the shortest and quickest way to bankruptcy.
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So, it is imperative that one seeks help from other quarters – preferably those who are
willing to work for
pleasure and not for money. And as some brands like Apple have already discovered, these
fruitful sources
can be your brand’s fans – amateur enthusiasts who are likely to embrace the idea of
giving legitimacy and
form to their word-of-mouth recommendations.
Chevy recently ran a contest in North America for consumers to create their own
commercials for Chevy
Tahoe, their most profitable model. An online micro-site provided participants all the raw
video footage
required – participants could mix and match the material and assemble a commercial to
their own script. In
four weeks, the contest attracted more than 30,000 entries – far more than can have been
done by a paid
team of experts, no matter how large.
In the past few months, similar contests have become very popular – the latest being the
one for Dove
Beauty Soap, where the winner of such a contest was aired during the Oscars broadcast.
The emphasis of
such tactics has been “engaging the consumer rather than simply pushing a product.”
While it will tactically
be necessary to choose a winner and reward her, the real value of these contests is the
teeming mass of
strategies, ideas and executions they create in a flash.
Of course, only a minute percentage of these entries are even half-decent – and the
temptation to pre-filter
them and present just a few can be overpowering.
But in a long tail world, the real opportunity is not in pre-filtering what’s available but in
making
everything available to everybody. And providing the aggregated audience the tools to
sort out what’s good
from what’s not (like Flickr does for photos with its folksonomy, for eg.)
In its short lifespan, user generated content/advertising has already attracted its own
legion of skeptics. A
common complaint against it is that people enter these contests only to show off to their
family and
relatives and there’s no lasting merit in what they create. While that is essentially true,
Wikipedia and the
other UGM successes have already proven that reputation can be a powerful motivator if
harnessed right.
2. Time is a natural elongating-agent of a brand communication market
Every single brand message used by a brand in the past is, by default, a resident of the
long tail of the
brand. Its glory days over, it has given way on the shelf to the current brand proposition of
the day – but it
still exists, forgotten and archived.
Making these brand messages simultaneously available in secondary media could be the
quickest and most
cost-effective way to elongate the brand communication curve. The longer the brand has
been in existence,
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the longer the tail can potentially be. In effect, one is using the advertising funds utilized in
the past to
populate the curve today.
For eg. one of the most popular IBM campaigns of all-time is ‘Solutions for a small planet’ –
a campaign
that broke and was active in the mid-1990s (but one that is still fondly remembered
today.) As of now, the
campaign is history, gathering virtual dust – even though it can still tug a few hearts and
consumers.
Making this available – probably as a microsite hosting the commercials and the
associated work – will
give another gateway for contemporary consumers to discover and engage with the IBM
brand. These
consumers probably will number only in the hundreds or thousands compared to the
millions who relate
and engage with their current mass media campaign (What makes you special?) But they
come at an
incremental cost of almost zero.
And add these consumers with those that relate to the other campaigns that IBM has run
over the last few
years (including my personal favorite, ‘The world’s helpdesk’) and you have a market that
can rival the hits
of the current main brand proposition. All at no cost at all.
3. Recognise that ones and twos can add up to quite a few
In The Long Tail, Chris Anderson writes “To think that basically everything you put out
there finds
demand is just odd. The reason it’s odd is that we don’t typically think in terms of one unit
per quarter.
When we think about traditional retail, we think about what’s going to sell a lot.”
The economics of the long tail are very different from those of traditional hit-driven
economics. Long tail markets leverage the abysmally low cost of shelf-space and
distribution to convert what were unprofitable customers, products and markets into
profitable ones. These audiences of ones and twos (very often more than that) are
consumers who would have been lost to your advertising either because they don’t relate
to your current projected brand proposition or because it was too mass-market a fare for
them. By reducing the cost associated with customized communication with these
consumers, the long tail effectively multiplies the potential audience for the
communication of your brand. So what’s an effective long tail strategy to adopt while
building a brand? Recognizing the power of these niche audiences, the best strategy to
adopt is to chart out all the niche audiences the brand potentially has and address each
one of them with the most cost-effective media mix – and with their own tailor-made
brand message.
In fact, in more mature long tail markets each niche market of the brand will have its own
closed loop of communication – tightly knit teams that live and breathe the idea in close
conjunction with their audience, thereby incorporating feedback mechanisms into the
very process of creation. Then the brand and the niche audience will move in tandem,
locked together – not unlike a pair of salsa partners on the dance floor. And for a lucky (or
canny) brand manager, these closed loop communication teams can actually be prosumer
brand enthusiasts – thereby eliminating the need for an advertising budget.
4. Employ recommendation and word-of-mouth for your brand-building efforts
While there has been great focus on generating word-of-mouth for brands, I believe there
has been insufficient understanding or desire to do the same for the brand messages
themselves. (A notable exception is the Crispin, Porter & Bogusky school of brand-building
that has thrived on creating ever expanding ripples of word-of-mouth around their
advertising.) The most powerful effects of the long tail were first noticed when Amazon’s
recommendation filters pointed consumers to books that they might like – calculated
based on the behavior of other shoppers like them. With recommendation filters,
consumers found books they were interested in and Amazon sold more books from the
tail of the curve. The stuff in the long tail is useful only if it can find its way to your
consuming audience. While pre-filtering tries to predict demand (a process not without its
own risks), recommendations and other ‘post-filters’ amplify already existing behavior.
Because the filters identify an existing pattern in behavior among the consumers of your
advertising (as distinct from the consumers of the brand), they are more likely to find a
sympathetic audience fit. Consumers of your advertising are also likely to respond to
recommendations like these, because they understand that other consumer experiences
form the basis for them. And as we already know, consumers are much more likely to find
other people’s words more useful because they are perceived as not having a hidden
agenda. Recommendations also give the consumers of a brand’s advertising a familiar
place to start and work their way through the maze of messages. Without
recommendation filters and the hits at the head of the curve, a long tail market risks being
too much noise and very little
signal.Recommendations filters and behavior aggregators – the tools to amplify the
secondary word of mouth around the brand messages themselves – are also a convenient
vehicle to create buzz around the brand itself. They effectively reduce the work a
consumer has to do – from trying to explain why they like something to merely saying,
“follow this link and have a look at this video.”
5. Don’t try and predict. Measure and respond instead. It’s a legacy of our hit-driven
economy that we are continually engaged in trying to predict the likely success of our
chosen brand message being a hit. To this end, inordinate amounts of money and energy
are spent. Often, all in vain. The opportunity a long tail market offers is to do away with
these ‘expensive’ means of predicting demand. In a long tail brand communication, all
possible brand messages are simultaneously available in the market. Technology and
media may not have grown sophisticated enough today to measure and analyses every
single variable in consumption patterns, inclinations and tastes of an entire market in real
time. But there’s lots more data available today in real time than was the case some time
ago. Armed with this real-time data, all one needs to do then is to continually adjust and
respond in quick time, tweaking the messages or shuffling them around – from the
sidelines into centre-stage, if one is garnering significant hits and showing the potential to
become a mass-media hit. The role of an advertising agency in this case shifts from being a
gatekeeper who decides on limited data and gut-feel which brand message will be a
success. It becomes that of an active agent investing in the communication market of a
particular brand. Keeping a keen eye on the market and how a suite of messages are
faring, the agency keeps altering its portfolio of messages to ensure maximum returns for
its clients.
6. When you have infinite choice, context is more important than content For too long
advertisers and communicators have focused only on what they are saying and not
enough on who they are speaking to and where the conversation is happening. And even
when they do so, they have almost always painted the picture with broad and allencompassing brushstrokes. The economics of mass-media and a hit-driven industry
ensured that our individual differences were ignored and our collective similarities were
addressed to. This gave rise to the artificial construct of popular culture where “the
conventional is critically enjoyed and the truly new is criticized with aversion.” But as
Chris Anderson notes, “Everyone of us – no matter how mainstream we might think we
are – actually goes super-niche in some part of our lives.”
A plethora of brand messages and the corresponding post-filters to navigate them enables
our consumers to seek and find the message that best suits them – in the current context
they are in. The very same consumers will return to consume and relate to a different
brand message, when the context changes – either with time or with being in a different
situation. The contextual effects of the long tail effectively ensure that consumer’s buying
patterns needn’t always be rounded off to the nearest million.
7. Build negative databases of your brand communication Negative databases are an
exciting new field in information theory. They are finding application in securing
cryptographic messages to building computer immune systems mimicking those of our
own. Unlike normal databases, negative databases keep track of characteristics that don’t
define something rather than those that define them. For eg., a negative database of a dog
will contain entries like ‘wings’, ‘beak’,
‘feathers’, etc – essentially all characteristics the dog doesn’t have.
In a long tail communication market, while all messages are theoretically possible – not all
are practically compatible. Association with one sometimes means disassociation with
another – its antonym. For eg., if Volvo stands for safety, it cannot then stand for
‘dangerous to drive.’ But it can be “thrilling to drive”.
Traditional brand building ideas didn’t distinguish between the latter two messages. If
Volvo stood for safety, it didn’t stand for anything else. Effectively the rest of the messages
were confined to the negative database bin without a thought. In a long tail
communication market, the need will be to carefully create and fashion a negative
database of messages – a minute subset of all possible messages that cannot work for the
brand.
It is this negative database that’ll guide you and help you identify which messages cannot
and should not populate your brand communication curve.
8. Trade control for influence.
In the 1980s, when NASA was contemplating sending robot aircraft to the far reaches of
the solar system, a group of scientists thought of a novel approach which they detailed in a
paper called 'Fast, cheap and out of control : A robot invasion of the solar system'
Traditional spacecraft are big, complex and are explicitly designed to be controlled by us.
These design parameters result in an exponential increase in their cost, complexity and
weight; and correspondingly decrease dramatically the probability of the success of the
mission.
Instead, the new method proposed by this group of scientists was to send miniature bots
in the hundreds or thousands. They would be cheap to make and launch. And since we
don't have to rely on only one to succeed dramatically well - they don't need to be built in
with fail-proof security and reliability (the real reason why they cost so much and take so
long to build.) The Faustian bargain here is of relinquishing control. The bots would be on
their own, only bothering to send back whatever they discover.
There’s lesson for advertising and brand-building in there. Traditional brand-building is
like those lumbering robot crafts – complicated and expensive, because we burden it with
our do-or-do expectations of success. And with our overpowering need to control it and its
every interaction and consequence. In my opinion, the future of advertising and brandbuilding will also be 'fast, cheap and out of control.'
Unlike our tried and trusted mass media advertising that we can take ‘off air’, future media
vehicles will not come with an off switch. When we pay very little to run them, we are
actually relinquishing our control over when, where, and how they will run. Effectively
they are on their own. Examples of these ‘persistent advertising vehicles’ are viral videos
increasingly hosted on publicly shared sites, podcasting, in-game advertising, on-line
virtual worlds, blogs, social networking sites, etc. These new media vehicles work in a
paradigm very different from the tried and tested ways of ‘slow, expensive and in control’
advertising. What all these media vehicles (and the ones to come) will do is embed our
brand messages into the very fabric of our collective lives – making them ‘searchable’,
‘findable’ and ‘experience-able’ for eternity. Your brand could have made a clean-cut with
the past and sport a new strategy, new look, new idea, and new direction – but there will
be no way to recall these ‘miniature bots’ already out there. They have a mind – and a
lifespan – of their own, outside our control. Therefore, a necessary first step to harnessing
‘fast, cheap and out of control’ brand-building will be to forego the single-minded brand
proposition and embrace long tail thinking. We’ll have to learn to set our brand messages
free and let each of them seek its own path of discovery and voyage. This merry mélange
of overlapping brand messages will reach out to more people, at more times and with
greater effect than could have done through traditional means.
Brand complexity is a DIY kit.
We began this quest by also seeking an answer to the question – can simplicity in
communication yield complexity of brand character in perception? Trying to communicate
a complex message is a task that involves great risk and great expense. Great risk because
the message may not reach the audience at all, or even if it does it may not be understood.
Expensive because a complex message requires more media bandwidth – and many many
more repetitions to get across. A better model to communicate complexity is to let the
consumers assemble it for themselves at their end. Just make sure that they have all the
essential ingredients – a long tail of simple and easy to communicate brand messages –
and they will eventually put together a complex, layered and nuanced understanding of
your brand. One of the most surprising and desirable side effects of long tail brand
communication is that by merely contemplating more than one message at the same time,
your consumer is assembling the complexity you sought to communicate, but wisely
didn’t.
ACKNOWLEDGEMENTS
Every bit of thinking and elaboration in this paper owes its existence to Chris Anderson,
his original Long Tail article for the WIRED and the subsequent book of the same name. So
pervasive has been the influence of his thinking, I have often capitulated and included his
words in quotes instead of explaining the idea in my own words. There are also occasions
where his quotes have slipped in without attribution – mostly because I found the
repeated referencing made reading difficult. But that’s not to say I have forgotten or am
not keen on paying my dues.