1: What is a Brand?
View the warning on the contents page regarding "facts" presented by this author.
In the opening narrative, the author names a number of brands he encounters on a typical morning, before even leaving his home: every item he uses is associated with the brand of the manufacturer - and the moment he leaves his home, he is assaulted by brands, some there to be passively noticed, others aggressively attempting to take his attention.
Of importance, that each brand is a set of associations - it's not just about the product itself, nor the benefits it proposes to deliver, but the qualities that are associated to the specific product of a specific manufacturer that are intended to distinguish it from all others of the same kind.
From the manufacturer's perspective, the product they produce is less significant to the consumer than the brand it represents. Some companies command a much higher price than their rivals for exactly the same products, even if their objective quality is not significantly better.
From the customer's perspective, there isn't really a massive difference between the features, functions, and benefits an iPod and any other MP3 player, and a cup of Starbucks coffee is not ten times better than a cup of coffee that sells for one-tenth of the price. Consumers are not ignorant of this, but yet they have distinct preferences and are willing to pay significantly more for some brands than for others.
(EN: I cannot entirely disagree, but my sense is this has to be considered in the broader context. When a brand first appears in the market, it must offer some reason for a customer to prefer it. In that sense, the iPod was a much better product than other MP3 players and Starbucks was a much better cup of coffee than the swill that was being served in other restaurants, and the positive sentiment toward the brand was established because of product quality. Over time, the competition caught up, or the manufacturer sacrificed quality to improve their profit margin, yet customers remained loyal to the brand for the memory of quality. If you fail to consider this, then brand and quality become divorced and you will accept the notion that the two are not connected and that a shoddy product can be sold under a strong brand - but I don't think this is so. To become strong enough to carry a bad product, a brand must represent quality at some point. But once it has gained that strength, it will retain a following even if it loses quality, from those who remember the time when it did, as well as those who follow the lead of others rather than making their own assessment.)
Consider the example of celebrities in sports or entertainment - those that in present favor have an enormous draw at the ticket booth, and even those who are no longer at their peak can still draw an audience even when their talent wanes and their style is no longer unique. (EN: Celebrities are an excellent example of memory of quality, as they draw aficionados when they are unknown and different, then "sell out" the qualities that made them popular in the first place, but still retain a large following even though they are phoning in their performances.)
As such, brands represent more than a factual and rational connection of certain qualities to a given product or service, but an emotional connection to the brand itself. Reference is made to the taste-tests that are often done for products, which have repeatedly shown that people who are told the brands involved state a preference for their preferred brand, but when the brands are not indicated, the results come out differently.
The author also refers to another study where "researchers" (EN: he does not mention who or where) used "magnetic brain scans" to determine that, where brand is known, the most active part of the brain is not the center of sensory perception, but of memory and self-image.
This goes to the example of "New Coke" in 1985, where customers revolted against the change - but not because they disliked the flavor, as it had performed well in taste tests, but because this represented a change to the brand that they had associated with. The conclusion the author draws is that it had nothing to do with the taste of the soda, but because it represented a change to the brand.
(EN: the "New Coke" incident was a successful dupe because the firm realized any change in flavor would be rejected, but wanted to switch from sucrose to fructose because of the rising price of sugar. The New Coke was a distraction that worked exceptionally well, taking sucrose-sweetened soda off the shelves long enough to get people to forget the flavor, replacing it with a substitute, then going back to the "original" with a change to fructose - which was still different in flavor to the original, but not as different as the New Coke substitute. But because of the shell-game, the market accepted fructose-sweetened Coke as a return to the "original.")
Don't give me facts... my mind's made up
The examples of food products are subject to the criticism that taste is entirely subjective, and that brand is effective because there is no rational or functional difference between one brand or another - but what of products that are less subjective?
The author cites no specific example, but indicates that the Internet, not to mention the flood of traditional media, offers us a plethora of product reviews and advice about, and even the most trusted sources are often in disagreement about which product is the best choice among the options.
The fact is that in the modern day of information overload, we are increasingly uncertain about even the most basic facts. Is it good or bad to eat chocolate? What causes depression? How many glasses of water should we drink each day? Is global warming real or just alarmist propaganda? There is no consistent answer, and no clear indication of whom to trust.
So while we have gone from an era of too little information to an era of too much information, brand still rules our decisions. In spite of all the information we get, there is still the notion that "Maytag makes good appliances," and we act accordingly.
Benefits of Branding
There are tremendous benefits for the companies that get branding right: increased sales and market share, a loyal and long-term customer base, greater return on advertising and promotion, and the ability to command a premium price.
A company whose brand is strong attracts a better class of employee, and better retains the loyalty and morale of the employees it has because they understand the brand, believe it, and feel a part of it.
The firm also benefits from greater opportunities and more channel power, because other firms want to deal with a company that has a strong and recognized brand.
Firms with strong brands are also appealing to investors and shareholders: the share-price of a firm far exceeds the book value of its assets, and this can largely be attributed to the belief that the brand has power to earn in future.
History of brand
The etymology of brand goes back to ancient Greek, though a more familiar and recent reference is the growth in Midwestern cattle operations in the nineteenth century, where a rancher would brand his cattle so he could prove ownership of certain animals among commingled herds on the open ranges.
Unfortunately, some companies have not evolved beyond this point: brand is merely a way of showing ownership to distinguish their products from others, and for all the money spent on designing a logo and getting the public to recognize it, there is little effort made on making the brand "mean" anything else.
When industrialization took place and the market was flooded with goods from different manufacturers, brands started to take on greater meaning: a company that made a quality product wanted to differentiate itself from cheap imitations, and the brand became a mark that consumers associated with a certain level of quality. Brand also became useful in advertising, to convince customers to prefer the product of one specific firm over similar products made by others.
In the late twentieth century, there was another shift in brand, with an emphasis on brand as a representation of a promise to the customer. When advertising a product to a customer who had never heard of a company, the message was a promise of a certain experience of ownership that the product would deliver. Whether it actually delivered or not was considered to be of little consequences, as a product could be sold on a compelling promise that it may or may not actually fulfill.
In the modern day, "customer experience" has taken the lead in branding: that the promise of a brand will sell a product the first time, but only by keeping that promise will a brand build a loyal base of repeat buyers. Products have become commodities, and the quality of one is little different than the quality of another - but the quality of the relationship with the firm that provides it is what causes customers to prefer and repeatedly purchase a specific company's offering.
Defining a brand
The author acknowledges, but dismisses, the elements that are most often associated to brand - things such as logos, slogans, mission statements, and such. These outward signs of a brand receive a great deal of attention, and "so-called brand experts" will convince firms to pay a great deal of money on them, but there never was any evidence that the color of a company's logo made a major difference to its long-term success.
(EN: A note of some disagreement, as there has been repeatable research into this matter that demonstrates statistically significant differences resulting from elements of brand identity. For a firm with billions of dollars in annual sales, a difference of 0.1% adds up to millions, and it's worth spending cash to fine-tune the brand and tweak the logo or slogan, though for a smaller firm, the increased revenue doesn't cover the costs of such efforts. As such, I would agree that adjusting the superficial elements of brand identity doesn't make a major difference, but it does make a difference.)
He also dismisses the notion that a brand constitutes a promise to the customer. Perhaps this was once so, but so many companies have broken their brand promises that such promises no longer have the credibility they once did. He does obliquely acknowledge the value of promise to customer retention - that if you make a promise to a customer, you must deliver on it to retain them - but insofar as speaking to customers who have no experience dealing with your firm, your promises are empty words, signifying nothing.
Having dismissed these notions, the author offers his own: "A brand is the total emotional experience a customer has with your company and its product or service."
Significantly, your brand is not what you want it to be, and any action you undertake has only limited influence on your brand, as brand exists in the mind of each customer. Firms that have a rather narcissistic take on brand, who maintain that their brand is what they say it is, fail when what they think of themselves differs from what the customer thinks of them.
That's not to say that what a firm says and does has no influence whatsoever , but it is exactly that - influence, not control - and the influence of the company that "owns" a brand is one of many influences that form the customer's conception.
Who is the customer?
In modern parlance, the term "customer" has become abstracted and notional - it is taken to mean a person who buys a product, but the concept of customer has changed through the ages.
Consumership has changed drastically in the past century or so, largely because of technological advances: the average person no longer produces what they need to consume, but purchases the goods and services they need from others who manufacture them.
How they purchase, and from whom they purchase, has also changed dramatically, but most germane to the concept of branding is the plethora of choice: while there might once have been only one vendor from which a customer could obtain a specific good, there are now multitudes, dozens to hundreds depending on the product in question.
As an aside, most companies have evolved in their marketing efforts accordingly, but the old practices from buygone eras continue to be used, in spite of their outdated reasoning.
In the early days of marketing, it was focused on product benefits: a customer may never have heard of a vacuum cleaner, and a company that made one would send a salesman door to door to demonstrate the value of the product, and this would lead to a purchase. The later use of television made this practice more efficient - but the tactics remained basically the same.
The author takes a moment to dismiss the older marketing models, specifically the AIDA model and the 4P model, as being relics from this age that depend on a customer who thinks in a linear and focused manner - but offers no alternative solution to the decision-making process or the elements of marketing.
He describes some of the differences of the modern customer, who lives in a time when speed is of the essence and people don't invest time in weighing alternatives by any other quality: it's an age of immediacy. We want our meal heated in thirty seconds. We have a vast amount of information available at all times, connected by mobile devices. We live on borrowed money, with consumer debt at an all-time high. Customers want it all, and they want it right away.
(EN: He rattles on for a while, making broad generalizations and spinning a yarn that more resembles dystopian science fiction than a reflection of reality. At yet, there is a shred of truth beneath it: customers have broader choices and invest less time in buying decisions for many goods.)
To his way of thinking, the customer in the current age is entirely different and "traditional marketing has little or nothing to offer." In the present day, the customer is firmly in command and receives information that guides their purchasing decisions from an array of sources, the producer being one voice in the crowd, and the one regarded as least trustworthy.
The two keys of branding
Given that the customer is in command, what hope does a company have or reaching them, and convincing them to give their product a try? The author feels that there are two components a company controls:
First, the firm has control over its business operations. It has the ability make all decisions related to the design of the product or service it will offer. And in doing so, it can and should consider the perspective of the customer - what they want to have, rather than what you would prefer to make.
Second, the firm still has the ability to influence the customer's perception. While the producer of a product is still just a voice in the crowd, he still has a voice that can influence perception - and more importantly, he has control of the experience that existing customers have, which gives him influence over what they will say to others.
But again, the stress is on influence, not control. You cannot force a customer to have a specific opinion, but in your communications and encounters with them, this opinion will be formed - and it is shaped more by the reality of the encounter rather than the promise of your marketing.
Brand Halo
The author introduces the notion of a "brand halo," but is unclear on what is meant by this: it includes the recognizable components of brand identity, such as logo and slogans, which presents the offerings in the best possible light.
A random bit: that brand remains important in B2B marketing, perhaps even more so, because in that mode, you have to make a positive impression multiple individuals involved in a formal buying process, and the brand gives them something to rally around.
Returning to brand, he suggest four components:
(EN: naturally, this is contrived to support the anagram "epic," and as such these bits seem less than comprehensive, vaguely defined, and in random order. Such is the problem with clever anagrams. But at the same time, these do seem worthwhile points to ponder: that the communication from the company is part, though not all, of the overall perception of the customer and that the result is not merely a logical conclusion, but more of an emotional reaction.)
Branding, Not Camouflage
Building a brand isn't the same as building a business. It is a way for a business long-term competitive advantage based on loyalty to a firm, primarily by customers, but also by your workforce.
The author assumes that the reader currently operates a business that they what to expand and grow, or is an entrepreneur who is considering brand in advance. This is all good and well, but branding does not substitute for a solid business plan - finance, operations, and the like. Brand can be helpful to a business, but does not substitute for getting the other aspects of business "right" as well.
Of importance: there must be a clearly defined market for your product or service. That is to say that the must be some number of individuals with an objective need for your company's offerings, who will benefit from buying it.
(EN: An interesting point, and one that is seldom considered, is the core need of the product. Many people are familiar with brands of companies whose products they have not buy, nor will they ever buy. For example, many men can name a handful of brands of women's cosmetics, but very few will ever buy them or have any influence over the buying decision. Or consider a brand such as Dow chemicals, which makes no consumer products at all, yet many consumers are aware of the brand.)
To that end, the author provides some random considerations:
- What is the state of the demand? How much of the product already in demand, and is demand increasing or decreasing? Will your product still be in demand in five or ten years?
- If your product is entirely new, can you create a demand for it? Can you convince the customers that they need it, and that it is better than existing alternatives?
- How many players are in the market? How strong are their brands? How loyal are their customers?
These are also important considerations for nonprofit organizations: while donors are not buying something for their own use, those who give to a charity are buying a product or service to be delivered to others, and must have a sense that it is needed, and that your organization is a worthwhile way to provide it to those who do.