Thursday, October 06, 2005

Brand Management

Brands were originally created in order to differentiate what one offers from what the competition offers. Frims "branded" it to avoid confusion and help people to remember, identify the manufacturer and aid the choice of purchase. This progressively involved equipping the product offered with attributes which converted it into the favourite choice of the purchaser. Thus companies began to offere products with an additional differentiation which made them more competitive. This process is just the starting point of what is now known as Branding.

The problem is that, like any strategy, sooner or later it is also discovered and used by competitors, which leads us to the current situation: lots of brands, we could even say too many.

I just can't recall all the brands of soaps which Hindustan Levers (subsidiary of Uni Lever) sells in India.

In consumer goods there are several - even millions of brands, which are sometimes almost pointless, brands which, instead of helping the consumer to choose, complicate the purchase enormously, brands which do not provide anything and which in the end are perceived as mere commodities.

In industrial goods, branding is still at a nascent stage. Branding in B2B or industrial goods or services is mostly limited to company branding and branding of a few select products. In software services for example, the company brand is the most prominent. For example IT consulting firm Accenture is brand by itself. In case of IBM, the company brand "IBM" is the most prominent of the brands in IBM stable - DB2, MQ Series, Z-series etc.

Corporate Brands - be it in software services, semiconductors, manufacturing equipment etc, represent the company, it's reputation and it's value to its customers. To build a successful company brand, it requires sophistication and discipline - or in other words Brand Management.

Brand Strategy

It is relatively easy to give a company or a product a name, to get a spectacular logo designed for it and communicate repeatedly (and insistently) this brand in numerous exposures to the consumer.

It is something quite different to capture the essence of the product/service offered, to conscientiously create an attractive, different personality, full of meaning for the potential customer, and to connect it on an emotional level to the brand, providing it with a certain magic. This is indeed a much more complex process that is called brand strategy.

This involves giving the brand a very clear power of attraction, a set of relevant, unquestionable meanings which achieve a space not just in the head but also in the heart of the consumers.

Moreover, it should not be forgotten that the context of branding is considerably different for the corporate brands (than that of consumer goods), and that the model is to make the customer feel comfortable, confident with the values of the brand before and after using the products or services. The bonus from differentiation is merely symbolic in terms of personal and corporate reaffirmation.

A strong brand should fulfil three basic objectives: information, differentiation and seduction.

Information because it should tell customers something about the product offered that is intelligible and decipherable: "I have to understand the proposal of basic value or what the product offered consists of."

Differentiation because what it tells us should be perceived as different by the purchaser or, in other words: "I understand what you are telling me and I think that it is something that the others haven' told me."

Seduction because this is the raison d' of any brand. The first two are in the service of the third: in the end a brand has to tell us something that we consider to be interesting and that ends up seducing us. And seduction is something very subtle.

There are currently numerous brands that have reached the first stage. They have succeeded in getting customers to recognize their logos and we see their advertisements. They have succeeded in getting customers to know more or less what they offer but they have not seduced the customers. They are there, in customer's mind, and customer's see them and recognize them, but when it comes to buying customer's do not feel that irresistible, emotional attraction that drives them to clearly opt for the brand.

One should not confuse Communication with brand creation or management. The objective of Communication may be to achieve renown for what the firm offers, but marketers have to define the brand: to know what to communicate and what to say in their communication plan. In short, what meanings, values and personalities are important and distinguishing.

The objective of Brand Management is to maintain the consistency and strength of the brand so that it can be adequately exploited. This should be the work of a good brand manager.

Differentiation of a Brand

With effective brand information, it is possible that there is already an enormous group that recognizes the brand. However, brand value is built on the management of customer experiences as a means of differentiation.

With a clear definition of meanings and an excellent transmission of the same, full of creativity. New strategies that have managed to find a niche among the clutter of brands out there in the market. Brand management tools for differentiation are:

1. An emotional as well as a real offer

If a firm is going to work on the brand, then they must offer a good product. Nothing can aspire to be a brand without first having managed to be a good product or service as a minimum prerequisite to compete. The first thing that can differentiate a seductive brand from its undifferentiated competitors is therefore how the customers are charged with emotion for the product is. These emotions refer to pleasant sensations, desire, attraction, a longing to buy it almost as an impulse without the need to rationalize it too much.

If the brand is clearly differentiated, it will certainly have this emotional part that distinguishes it from the rest and obtains the sale, because it has been said that a brand is made up of a good basic product plus a good dose of magic.

Think of Intel Pentuim processors or IBM's On-Demand services or Teradyne testers.

2. A feeling of community

The true success of a brand does not consist in engraving a logo on a product but rather in giving rise to a certain similar experience for a group. The customer portfolio is the most valued asset of any company. The community of sympathizers with our brand is what we really manage to obtain this asset.

Synopsys is one of the few brands that have literally succeeded in establishing themselves in the minds of their customers. Synopsys's managers organize meetings, events, conferences and even sponsor user group meetints. This is not just a powerful Relational Marketing strategy, but also constitutes one of the main sources of information for the company.

Xilinx is another brand that has known how to manage its community of followers.

(For those who are not aware of synopsys or Xilinx, think of Harley Davidson and HOG Harley Owner's Group)

3. The values within the customer

Customers are increasingly well trained and informed in today' world. And are less and less willing to buy a symbol-brand which simply lists values to which customer should aspire. In this new setting customers will not just increasingly opt for responsible companies, but also for products which have a positive effect on the business environment and share the same values and concerns.

Customers buy from Teradyne or Broadcom or synopsys because these firms understand customer's values and have a plan(roadmap) to address the problems the customer faces in the future. Sellers must have the same concerns as that of the customer.

4. Market communication goes further

The main objective when it comes to customer communication is to stand out and to seduce. Brands that communicate in a different manner manage to impress. Market communication should go beyond the medium that the rest of the industry is using to position the brand in the minds and hearts of people.

Circulating stories of how the company went to extraordinary lengths to solve it's customer problem will certainly win the mindshare.

5. The obsession with small details

Another characteristic of successful brands is their obsession with detail. An insignificant detail can have a tremendous impact on the perception of the product. These are details that sometimes communicate much more than big campaigns: a faster than expected service, or offering a better solution than the one customer has developed etc.

Closing Thoughts

Before communicating and transmitting, however, companies need to define three very important elements make up the product they offer:

  1. What it is
  2. What it does
  3. What it means

If a company cannot complete and define each of these dimensions, then it does not have a strong brand. All products talk about what they are, and nowadays brands are rarely differentiated by what they do. Brand management is all about creation of meanings in the minds of the customer.

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