Relational branding – A New Paradigm for Modeling Marketplace Effects of CBR

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Presented by keynote speaker Max Blackston at Susan Fournier's Consumer Brand Relationships conference on May 17,2013 at Simmons College in Boston Mass.

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Relational branding – A New Paradigm for Modeling Marketplace Effects of CBR

  1. 1. Relational Branding – A New Paradigm for Modeling Marketplace Effects of CBR Max Blackston CBR Conference May 2013 Boston, Mass.
  2. 2. What is the Most Appropriate Model for Consumer-Brand Relationships ? • Almost invariably, models of interpersonal relationships have been adopted as the paradigm for consumer-brand relationships. This is a logical extension from anthropomorphizing brands and attributing brands with personality. But it raises some issues; such as which model of interpersonal relationships is most appropriate ? And within any given taxonomy of interpersonal relationships, can all the taxa be applied to CBR ? • There are also measurement problems associated with the interpersonal model. Although the analyst may observe close analogies between the ways in which consumers relate to brands and distinct interpersonal relationship types, consumers themselves do not unambiguously recognize these analogies. The ways in which people describe their relationships with brands are highly idiosyncratic, leading to imprecise and unreliable measurement.
  3. 3. What is the Most Appropriate Model for Consumer-Brand Relationships ? • We argue that the most appropriate model for CBR is a psychological one, rather than a sociological one. • We believe however that there is a more appropriate alternative to the Freudian model (“drive” theory) which has – explicitly or implicitly - been the basis for much consumer psychology. • We show that a theory of Consumer Brand Relationships emerges organically from the Relational Psychology model, based on object- relations theory, without having to make a special case for them. • We have developed a simple measurement system which does not require consumers to understand and/or agree with the analyst’s construct of relationships.
  4. 4. Relational vs Freudian Psychology • External relationships – with other people and with things – are paralleled by psychic representations of these relationships within the mind • A personality is in fact a composite structure which has been formed and built up out of countless never-ending influences and exchanges between ourselves and others • Behavior and attitudes are caused by basic “Drives” which are innate and unchanging elements of the personality. • The relevant characteristics of the personality remain the same – whatever the relationship.
  5. 5. Relational Branding • Relational psychology, in reformulating the concept of self in personality development, also reformulates the concept of brand. • A Freudian “driven” brand is always the same, irrespective of the nature of its consumer-partner; a Relational brand, on the other hand, is a variable outcome of its interactions with its consumers. • Relational Psychology recognizes how inanimate relationship partners -- so-called “Transitional Objects” -- may be invested with the same type of characteristics (personality, motivations, imagined behaviors, etc.) as animate ones. • The Brand is a “Transitional Object”, represented in the individual’s psyche simultaneously as both the object and source of emotions, feelings and behaviors.
  6. 6. How do you access Consumer-Brand Relationships ? How do you define their parameters ? How do you measure them reliably ? • Understanding Brand Relationships is just like understanding any other relationship. • Observe the attitudes and behaviors that the relationship gives rise to, and from those deduce the nature of the relationship. • In the Consumer-Brand Relationship - as in all relationships – there are two participants, two sets of attitudes that are being expressed, two sets of behaviors that have to be observed before any deductions can be made. • We need to listen to both sides of “the conversation”
  7. 7. The Doctor-Patient Relationship – one side of the conversation: “What do you think of the doctor?” Professional Caring Capable Funny
  8. 8. The Doctor-Patient Relationship – the other side of the conversation: ”What does the doctor think of you?” Professional Caring Capable Funny "The doctor thinks I'm an old hypochondriac"
  9. 9. Listening to both sides of the conversation There is a dialogue between brand and consumer going on inside the consumer’s mind. In most research we elicit and measure only one side of that dialogue – the one that reflects consumers’ attitudes toward the brand - brand image. But there is a second side to this dialogue going on, which reflects the brand’s attitudes toward the consumer, which are a measure of how someone feels as a result of interaction with the brand. Essentially, we need to ask the consumer not only what s/he thinks of the brand, but also what the brand thinks of him or her. • Not just Brand Perceptions - what you tell consumers about your brand – but also Brand Attitudes - what you make your brand tell consumers about themselves • Not just Brand Use - what the consumer does with your brand- but also Brand Experiences - what your brand does with the consumer.
  10. 10. Proof of Concept Study
  11. 11. Proof of Concept Study* – Methodology 1 • Included 48 brands in 8 different product categories • Internet Survey of over 1500 respondents • 3 matched representative cells each evaluating 16 brands *conducted by
  12. 12. Proof of Concept Study* – Methodology 2 • Questionnaire • Familiarity • Brand Image and Personality • Brand Experiences (Brands’ Attitudes) • Brand “Touch” points (Advertising, Websites, Social Media, etc) • Brand Usage and Consideration • Overall brand evaluations • Other brand-related behavior *conducted by
  13. 13. Proof of Concept Study* – Methodology 3 • Included 30 “mono brands” for which financial data available from public sources: • Market Capitalization • Sales • Operating Profit • P/E Ratio • Operating Margin *conducted by
  14. 14. Objectives • to measure the influence of consumers’ relationships, on the one hand, and customer franchise on the financial value of these brands, as reflected in the various measures. • To examine the effects of brand relationships on customer franchise measures – acquisition, growth, maintenance .
  15. 15. Brand Perceptions Brand Relationship is defined by the combination of a specific brand image with a specific attitude of the brand; Brand Relationships are defined by the combination of Brand Perceptions and Brand Attitudes or Experiences
  16. 16. Brand Perception Factors Relaxed and Stylish Fun Cool Easy Friendly Stylish Different Positive Differentiation Distinctive Unique Charisma Dynamic Excitingly Innovative Leader Progressive Functionality Performs well Gives Satisfaction Emotional Values Love it Fits my life COPYRIGHT 2012 BRANDYIELD CONSULTING LLC
  17. 17. Brand Attitude/Experience Factors • Mentoring Challenges Me To Think Differently Teaches Me Inspires Me Shares My Values • There For Me Appreciates My Business Is Recommended By People I Care About Responds To My Needs Has My Interests At Heart • Pleasure Brings Back Good Memories Provides A Little Treat For Me Excites Me • Self-Expression Simplifies My Life Helps Me To Express Myself Frees Me To Be Myself • Self-Esteem Makes Me Look Good To Others Makes Me Feel Good About Myself COPYRIGHT 2012 BRANDYIELD CONSULTING LLC
  18. 18. A Brand Relationship is defined by the conjunction of one dimension of brand perception (image, personality, attributes…) and a dimension of brand attitude or experience Brand Attitudes/Experiences Brand Perceptions Self- Esteem Self- Expression Mentoring There For Me Pleasure Performance/ Satisfaction Emotional Attachment Charisma Positive Differentiation Relaxed & Stylish
  19. 19. • In theory, the number of possible brand relationships is determined by the combinatorial possibilities of the two sets of component factors. In practice, of course, not all combinations have a relational logic to them. Beyond that, we further screened possible relationships for emergent properties, that is relationships that have properties that neither of the separate components do. In practice this meant that we were looking for relationships which have incremental predictive power over that of both of the separate components.
  20. 20. These 5 Universal Brand Relationships have been identified across multiple brands and categories with emergent properties: the combination of the two components has an effect greater than the sum of their parts Brand Attitudes/Experiences Brand Perceptions Self- Esteem Self- Expression Mentoring There For Me Pleasure Performance/ Satisfaction Emotional Attachment Charisma Positive Differentiation Relaxed & Stylish Reinforce ment Identification Role Model Self- Differentiating Playful
  21. 21. Universal Brand Relationships • Reinforcement • Identification • Role Model • Self- Differentiating • Playful • The brand is seen as having superior performance and providing heightened customer satisfaction (brand perception). Use or purchase of the brand makes the customer feel better and smarter (brand experience) – in his/her own eyes and in those of others – strengthening the attachment to the brand. • There is a very strong affection for the brand and (or because) it is experienced as expressing the customer’s own values and aspirations. • The brand is admired for its charisma – a standard of leadership and innovation, which the customer – by allying him/herself with the brand - is invited to share in. • The brand is seen as distinctive and unique – but not in a distant or iconoclastic way. The brand’s difference is inclusive of the customer, who therefore feels distinctive and unique too. • The brand is liked for its relaxed style; it demands nothing of the consumer other than to experience the pleasure it gives.
  22. 22. Brand Relationships are Not Additive • Although an additive model is often a satisfactory, scientifically parsimonious, way of creating a construct, it does not work for Consumer Brand Relationships. • Consumers’ Brand Perceptions and Brands’ Attitudes are qualitatively different phenomena, and – like “apples and pears” - they need to be kept distinct. • A Brand Relationship is a two-dimensional construct, defined as the resultant vector of the two components of the relationship. • Visually, we compare Brands’ Relationships using a Brand Relationship Map
  23. 23. Brand Attitude/ Brand Experience Brand Perceptions Brand Relationship (x,y) x y A Brand Relationship is defined by the combination of a specific brand image with a specific attitude of the brand; The strength of the relationship is a function of the strength of the two components. But that function is not a simple additive one.
  24. 24. Point A (“Bad” Image, “Good” Attitude) is not equivalent to Point B (“Good” Image, “Bad” Attitude). x y A B A = B Brand Attitude/ Brand Experience Brand Perceptions Brand Relationship (x,y)
  25. 25. Brand Relationship Maps - Examples of Two of the Universal Brand Relationships • Reinforcement is composed of perceptions of strong product performance combined with the experience of the brand making me look good – to myself and to other people. – Top reinforcement brands are Pantene, L’Oreal, J&J, Amazon and Google. While both components of the relationship are important, hair care brands do it more by enhancing self-esteem. • Role Model, combines perceptions of a charismatic brand – a leader, an innovator – with the experience of feeling mentored by the brand – challenged and encouraged to reach further. – Many corporate brands – like GE, 3M, Facebook and Amazon - are seen as leaders and innovators, but only Apple and Google manage to combine those perceptions with that key personal experience.
  26. 26. John Frieda Clairol Dove Hair Care Head & Shoulders Herbal Essences L'Oreal Pantene 3M BP Chevron Exxon Mobil General Electric Johnson & Johnson Pfizer Barack Obama Mitt Romney Best Buy Home Depot JC Penney Lowes Sears Target WalMart amazon.com homedepot.com jcpenney.com lowes.com walmart.com American Express Discover MasterCard Visa Bank of America Citibank Goldman Sachs JP Morgan Chase WellsFargo Applebees Denny's Outback SteakhouseFriendly's Olive Garden Red Robin Apple Facebook Google LinkedIN YouTube 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 S e l f - E s t e e m Performance/Satisfaction “Reinforcement” Relationship
  27. 27. John FriedaClairol Dove Hair Care Head & ShouldersHerbal EssencesL'Oreal Pantene 3M BP Exxon Mobil General Electric Johnson & Johnson Pfizer Barack Obama Mitt Romney Best Buy Home Depot JC Penney Lowes Sears Target WalMart amazon.com homedepot.com jcpenney.com lowes.com walmart.com American Express Discover MasterCard Visa Bank of AmericaCitibank JP Morgan Chase WellsFargo Applebees Outback Steakhouse Friendly's Olive Garden Red Robin Apple Facebook Google LinkedIN YouTube 0.05 0.07 0.09 0.11 0.13 0.15 0.17 0.19 0.21 0.23 0.25 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 M e n t o r i n g Charisma "RoleModel" - The brand is admired for its charisma– a standardof leadershipand innovation, which the customer – by allying him/herself with the brand - is also invited to reach. “ “Role Model” Relationship
  28. 28. Brand Relationships & Product Categories • It is clear that there is a strong product category effect determining the type of relationships people have with brands – as well as the variation between individual brands. The following chart shows the predominant relationship type for several different product categories. – As would be expected from the brand relationship map, in hair care Reinforcement represents over 40% of the strongest brand relationships. – Identification is a major relationship principally in credit cards, and to a lesser extent in retailing – both mass market and on-line. – Role Model plays a big part in relationships with corporate brands and, as we have seen, with digital technology brands like Apple and Google. – Finally, Playful represents the predominant relationship with nearly 50% of casual dining brands.
  29. 29. Predominant Relationship Type among Brand Users (by Category) 40.7 25.6 31.7 20.8 20.6 27.7 25.2 16.4 16.9 14.5 17.7 13.7 21.9 24.0 29.3 17.2 8.8 19.9 13.0 30.6 27.9 18.2 18.3 18.3 24.3 6.4 26.8 12.7 16.3 16.3 13.7 15.2 15.5 21.5 23.8 17.1 19.1 9.8 10.4 25.3 21.9 9.2 11.8 44.6 19.3 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Entertaining/Playful Self-Differentiating RoleModel Identification Reinforcement
  30. 30. Brand Relationships Create Financial Value
  31. 31. Brand Perceptions$Financial & Market Returns Key to unlocking the financial value of a branded business Decode the Brand Relationships that build brand equity and grow the customer franchise.
  32. 32. 6.4% 9.0% 14.8% 32.8% 37.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Entertaining/Playful Role Model Self-Differentiating Reinforcement Identification Relative Importance of Brand Relationships in determining Relationship Equity (all categories and brands)
  33. 33. Relationship Equity and Stable Franchise Size are both very significant Influences on Sales to Market Cap. multiple. Relationship Equity Stable franchise R2=.42 Market Cap. /Sales .48 .43 Stable Franchise is defined as the percentage of customers saying they use the brand regularly, less the percentage sayingthey do so only if there is no alternative.
  34. 34. Actual Market Cap. Is a function of Relationship Equity, Operating Profit and Stable Franchise Size Relationship Equity Operating Profit Stable franchise R2=.86 Market Cap. .14 .89 .32 -.22 The negative correlation between Relationship Equity and Operating Profit reflects the fact that there is a trade-off between investment in the brand and the quarterly or yearly earnings statement. Nothing comes without a cost.
  35. 35. Brand Perceptions Acquisition Growth MaintenanceRetention to examine the influence of brand relationships on customer franchise, we have to break the latter down into its component parts
  36. 36. Influence of Brand Relationships on Franchise Acquisition 4 of the Universal Brand Relationships contribute significantly to trial consideration among non- users Entertaining /Playful Identification Reinforcement Self- Differentiating 0.54 0.48 0.38 0.22 Acquisitions
  37. 37. Influence of Brand Relationships on Franchise Maintenance A different combination of relationships are significant influencers of brand preference among users Reinforcement Role Model 0.24 0.10 Maintenance Identification 0.16
  38. 38. Conclusions -1 • The use of Relational Psychology (object-relations theory) as a model has the advantage of not requiring “special-pleading” for its application to Consumer Brand Relationships. • Brands can legitimately be considered as Transitional Objects, in just the same way as all the other parts of people and things that we carry around with us in our heads, and which contribute to our own personality.
  39. 39. Conclusions -2 • Brand relationships are not readily accessible by direct means. Because they are so inextricably linked with the individual personality, they are often not susceptible either to articulation by analogy with interpersonal relationships or to an unequivocal decoding. • The nature of brand relationships – just like any other relationships – can best be deduced from observing the attitudes and behaviors they give rise to. There are two sets of such attitudes and behaviors that result from the brand relationship – the consumer’s and the brand’s - both of which are accessed from the consumer.
  40. 40. Conclusions -3 • Brands’ attitudes (or brand experiences) provide what has often been the missing link between brand image and a complete definition of consumer-based brand equity. Brand Relationship Equity – derived from brand image and brand experience - is a significant contributor - along with the size and stability of the brand’s customer franchise - to the financial value of the brand. • Brand Relationships are also a significant influence on the development of brands’ franchises – although the link is often time- lagged. Thus, over the long term, brand relationships contribute both directly and indirectly to the financial value of a brand.

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