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    3. HOW BRANDS WORK 3. HOW BRANDS WORK Presentation Transcript

    • Contents Using this guide Introduction Checklist Case studies 3. HOW BRANDS WORK don’t ‘work’ – surely it’s “Brands money to make productsjust about spending look good? ” Use bookmarks in the left-hand panel to navigate this guide – click on the bookmarks tab on the left of your screen or [F5]. Search for specific words by using: Ctrl + F (PC) or Apple = F (Mac). To Branding website © The Chartered Institute of Marketing 2003
    • 3. HOW BRANDS WORK HOME eGUIDE 1 Defining brands Contents > Using this guide eGUIDE 2 Types of brands eGUIDE 3 How brands work eGUIDE 4 Brand strategy > Introduction > General ways in which brands work > Specific ways in which brands work > Brand positioning, brand image and brand identity eGUIDE 5 Managing and developing brands > Adding value to brands > Measuring added value eGUIDE 6 Brand portfolio and architecture > Checklist > Case studies eGUIDE 7 Measuring brands and their performance The above ‘offline’ links require all the eGuide pdfs to have been downloaded from the Branding website and placed in the same single folder on your hard disk. To Branding website © The Chartered Institute of Marketing 2003 2
    • 3. HOW BRANDS WORK HOME Using this guide Navigation There are a number of ways to make your way round this guide: >Bookmarks Gives a topic overview of the guide – first select the bookmarks tab on the left of the screen (alternatively use [F5] key), then click on to a topic to link to the relevant page. >Next/previous page Clicking on the left or right of this icon, at the bottom right of each page, will enable you to move forward or back, page by page. >Tool bar The tool bar at the bottom of the screen is another way to skip through pages, by clicking on the arrows. >Margin icons These icons, in the margins to the left of the main text, link to various types of information. See next page for a complete list of these margin icons. >Links Click on a highlighted word to navigate to a related page – either in the guide or on the World Wide Web. >Search You can also search the guides using [Ctrl] + F for PC (or [Apple] = F for Mac) to bring up the ‘find’ dialogue box and then simply type in your search term and click the ‘find’ button. HOME >To home page Clicking on this icon, in the top right of every page, will take you to the home page of this eGuide. >To other eGuides eGUIDE 2 Clicking on these icons, to be found on the contents page and sometimes as a margin icon, will take you to the home page of that particular eGuide – if you have downloaded the relevant pdf and stored it in the same folder. BACK >Back to main text Clicking the ‘back’ button will return you to the point in the main text you were directed from. To Branding website © The Chartered Institute of Marketing 2003 3
    • 3. HOW BRANDS WORK HOME >To Branding website Clicking on the ‘@’ icon at the bottom left of each page will take you to the home page of the Branding website. This link will only work when you are online. Margin icons We’ve added icons in the margins of the text to highlight particular types of information: >Further details Indicates additional material on the same subject. This information may be located within the same eGuide; in one of the other six eGuides (in which case the link will only work if the pdfs of the other eGuides have been downloaded into the same folder); or on a separate website (in which case the link will only work if the pdf is being viewed online). >Case study This signals a story that will illustrate theory applied in practice. Click on the icon to view the example and, once you have finished, select ‘back’ to return to where you were originally. >Checklist Points to a summary page. >Resources Links through to the online Brand Store section where you will find further resources on the topic being discussed. >FAQs Gives answers to frequently asked questions. To Branding website © The Chartered Institute of Marketing 2003 4
    • 3. HOW BRANDS WORK HOME Introduction ‘work’ – “Brands don’tspending surely to it’s just about money make products look good? ” Brands are pivotal to the relationship between companies and their customers. A brand is the sum of the tangible and intangible benefits provided by a product or service and encompasses the entire customer experience. Brands are thus pivotal to the relationship between companies and their customers. A successful brand has both a unique point of differentiation from the competition, and values that the customer segment really wants. This added value allows the company to add profit to the bottom line and, ultimately, increase shareholder value. To Branding website © The Chartered Institute of Marketing 2003 5
    • 3. HOW BRANDS WORK HOME General ways in which brands work eGuide 1: Defining brands Influencers of choice For the purchaser, brands act as influencers of choice. The process of making a choice is based on the total sum of the individual’s beliefs and goes beyond simply the look of a product on a shelf, or an attractive advertisement. [Tuck, 1976] The brand promise Beliefs about the brand can affect perceptions of the physical characteristics of the product or the performance of the service. Brands offer consumers a strong promise of authenticity and replicability. Without these, consumer decision-making becomes at best a lottery and at worst a nightmare of choice. This promise is more than an aid to decisionmaking, however. It actually creates value in its own right by enhancing the experience of owning or using the product or service. There is evidence that beliefs about the brand can affect perceptions of the physical characteristics of the product or the performance of the service. For example, for many years Marks & Spencer was said to have an excellent reputation for service and yet customers often found it difficult to obtain personal assistance and there were no changing rooms. The brand, supported by the store’s refund policy and the quality of the merchandise, altered the customer’s perception of the service they received. “A brand is fundamentally a promise made credible by law and experience. At one level this simply makes the decision making process easier. At a higher level it can actually add to consumers’ beneficial experience of a product or service and thus create a value for which people may be prepared to pay.” [Feldwick, 2002] When they evaluate competing brands, consumers judge to what extent the brands have added value over and above the commodity form of the brand. These added values may be as simple as polite service from a bank clerk, through to a complex cluster of lifestyle associations by driving a particular make of car. [de Chernatony, L., and McDonald, M., 1998] To Branding website © The Chartered Institute of Marketing 2003 6
    • 3. HOW BRANDS WORK HOME As a marketing tool for the brand owner Figure 3.1: The purchase cycle Think of each customer or potential customer on a purchase cycle. AWARENESS EXPERIENCE CONSIDERATION SELECT/PURCHASE Brand role and relationship alters across this cycle. Brand strategy is about creating ways in which brands can be sold more effectively and hence more profitably. This ranges from the presentational aspects – like the label and design, and the way the brand is advertised and promoted – through to more fundamental areas such as the relationship between the corporate brand and sub-brands and comparison with competitor brands. Successful companies regard their brands as strategic devices. They analyse the forces that can influence the profitability of their brand, identify a position for their brand that majors on the brand’s unique advantages, and defend this position against their competitors. By adopting this perspective, the marketer doesn’t just emphasise design, or advertising, but instead coherently employs all the company’s resources to sustain the brand’s advantage over competitors. [de Chernatony, L., and McDonald, M., 1998] Source: Charlie Robertson, Red Spider (2002) To Branding website © The Chartered Institute of Marketing 2003 7
    • 3. HOW BRANDS WORK HOME “In an increasingly crowded marketplace, fools will compete on price. Winners will find a way to create lasting value in the customer’s mind.” [Tom Peters, quoted in Aaker, 2001] Specific ways in which brands work eGuide 1: Defining brands Brands work as: As a differentiator > a bridge between buyers and sellers [Brands] help create the differentiation companies need to distance themselves from the competition and attract consumer recognition and loyalty. For purchaser and brand owners, brands can simplify and differentiate the product or service. Brands are not only about names of products or services or indeed companies. They are powerful sources of added value which, through careful management, skilful promotion and wide use, come in the minds of consumers to embrace a particular and appealing set of values and attributes, both tangible and intangible. > influencers of choice > a marketing tool > surrogate people > symbols of quality > trust-marks > career enhancers These qualities have to be analysed, understood and used as the basis for all brand marketing and communications. This helps create the differentiation companies need to distance themselves from the competition and attract consumer recognition and loyalty. > signifiers of discernment > spawning grounds for developing new products > magnets, even attracting vandals > a source of added value. To Branding website © The Chartered Institute of Marketing 2003 8
    • 3. HOW BRANDS WORK HOME Brands work by: Brands work to: > creating an emotional response > shock > dividing people into ‘for me’ or ‘not for me’ > command a premium > reassuring > reassure > tapping into values > lower barriers to resistance > appealing to the emotions > generate affinity with users > confirming beliefs > promise consistency > bypassing rational scrutiny > create belief > ‘raising the bar’ for competitors > create markets > operating differently across the purchase cycle > command a mindspace > create loyalty. > generating faith. To Branding website © The Chartered Institute of Marketing 2003 9
    • 3. HOW BRANDS WORK HOME Figure 3.2: Brand onion – cross-section showing the layers that underpin brand positioning Brand positioning, brand image and brand identity eGuide 4: Brand strategy – Positioning External eGuide 5: Managing brands Case study: Gold Internal VISION A snapshot of the future VALUES A belief system. A way of working and communicating PERSONALITY Informs all communications and consumer perception Source: Adapted from Interbrand (2002) POSITIONING A summary of the Brand in relation to competition in the consumer’s mind If a brand is essentially a customer perception, positioning is the process by which a company offers its brands to the consumer. The objective of the positioning process is to make the offer into a brand. If the brand is a simple, unified personality, then it follows that the variety of activities which contribute to it must be guided by the target position. [Arnold, 1992] Positioning can be defined as a consonance between vision, values and brand. Brand position, as defined in the Interbrand model in Figure 3.2, comprises both internal and external factors. The internal factors, like brand vision and values, form a part of the planned brand identity. External factors, like perceived brand personality and the perceived brand positioning in relation to competitors, are how the brand is seen by consumers – the brand image. To Branding website © The Chartered Institute of Marketing 2003 10
    • 3. HOW BRANDS WORK HOME Figure 3.3: Brand identity planning model BRAND IDENTITY SYSTEM STRATEGIC BRAND ANALYSIS BRAND IDENTITY IMPLEMENTATION SYSTEM BRAND IDENTITY Customer analysis > trends > motivation > unmet needs > segmentation Competitor analysis > brand image/identity > strengths, strategies > vulnerabilities > positioning Self analysis > existing brand image > brand heritage > strengths/strategies > organisation values Brand as person > personality (eg, genuine, energetic, rugged) > customer/brand relationships Brand as product > product scope > product attributes > quality/value > uses > users > country of origin Brand essense Value proposition > functional benefits > emotional benefits > self-expressive benefits BRAND IDENTITY ELABORATION Relationship Core BRAND POSITION The part of the brand identity and value proposition that is to be actively communicated to the target audience Extended Brand as organisation > organisation attributes (eg, innovation, consumer concern, trustworthy) > local versus global Brand as symbol > visual image and metaphors > brand heritage Credibility > support other brands BRAND-BUILDING PROGRAMS TRACKING Source: Aaker and Joachimsthaler (2000), p.44 To Branding website © The Chartered Institute of Marketing 2003 11
    • 3. HOW BRANDS WORK HOME Brand identity is a set of associations that the brand aspires to create or maintain. It is the planned expression of the brand values, the input perspective. The way brand identity is perceived by consumers and other stakeholders constitutes the brand image – the output perspective. Brand image, then, is the sum of intended brand identity and any other signs the brand gives to consumers, including its relative positioning against competitors. Brand image is the sum of intended brand identity and any other signs the brand gives to consumers, including its The development of brand identity relies relative positioning on a thorough understanding of the firm’s against competitors. customers (and other stakeholders), competitors and its own business strategy. The stakeholder analysis must not only uncover target market characteristics, but also their motivations and unmet needs. Studying competitor’s positioning strategies is a key to developing a differentiated brand identity. At the same time, brand identity needs to reflect the business strategy of the firm, its values and the ability to deliver them consistently. Figure 3.4: What brands are not Products Products or services are what the company sells, not what customers buy. Convert products to brands: Add personality to the product. Customers buy brands which offer benefits over and above tangible, rational benefits i.e. quality perception. Labels Convert labels to brands: Labels provide information. Brands have image, style and tone of voice – added to the necessary basic information. Go beyond labelling, giving your labels meaning and emotional attachment. Trademarks A trademark is a sign that identifies a particular brand with its manufacturer or owner, and distinguishes it from other products. Source: Branding Cannon (2002) Convert trademarks to brands: Brands go beyond a trademark and engender trust in marks – the trademark becomes owned by the consumer as well as the company. To Branding website © The Chartered Institute of Marketing 2003 12
    • 3. HOW BRANDS WORK HOME Adding value to brands Figure 3.5: Sources of Added Value in Branding 1 On a simple level value is added to brands through superior technology or systems to give functional values beyond those of competitors. These, however can be easily copied by competitors. (eg, Intel computer chips) Expressive values 2 So expressive values should be added to brands, which enable consumers to make should be added to statements about themselves that more brands, which enable clearly express aspects of their individual consumers to make personality. (eg, Apple Mac and being statements about creative and personable) themselves that more clearly express aspects 3 Central values can also be added and act as the brand ‘soul’, showing what the brand of their individual believes in. (eg, Nike and irreverence) personality. Authenticity Replicability Reassurance INNER DIRECTED OUTER DIRECTED Transformation of experience [de Chernatony, L., and McDonal, M., 1998] Gluing together and harmonising these three types of values is the brand’s vision. It represents a view of how consumers can become closer to the brand. Differentiation ADDED VALUE Source: Feldwick in Cowley (1996) Understanding Brands, p.20 To Branding website © The Chartered Institute of Marketing 2003 13
    • 3. HOW BRANDS WORK HOME Measuring added value Figure 3.6: Brandshape® A useful tool for measuring the added value of your brand is the Brandshape® (See Figure 3.6). KNOWLEDGE How well recognised is the brand? 1 Spontaneous association with the category 2 Recognition of ID/brand iconography RELATIONSHIP How close do consumers feel to the brand? 7 Says things about me that I like 8 Like what the brand stands for 9 Lack of desired substitution 1 2 7 8 9 3 4 5 6 AREA What do consumers think the brand is good at? 3 Focus – competence 4 Depth – stretch to categories 5 Breadth – stretch to unrelated categories 6 Top quartile quality ranking “How does any tool work? In itself it does nothing. It is designed to satisfy a need in the user. What makes it different is in comparison to other tools in the box, and what it does not do. To best understand how tools work in practice, observe what users do with it, where, and when to satisfy a need.” [Charlie Robertson, Red Spider] Compare Guinness and Virgin. Guinness is associated with black beer almost exclusively. Virgin, on the other hand, has very strong values but isn’t necessarily associated with a particular product/service. eGuide 7: Measuring brands and their performance QUALITY How well do the consumers think the brand performs? Source: Charlie Robertson, Red Spider (2002) To Branding website © The Chartered Institute of Marketing 2003 14
    • 3. HOW BRANDS WORK HOME Checklist > Make sure you have a clear understanding of how your brands work in terms of the stakeholders with whom they have a relationship. > See your brands as strategic devices. > Use that vision to determine your marketing strategy. > Be specific about what brands are, and what they are not? > Specify the objectives of your brand positioning. To Branding website © The Chartered Institute of Marketing 2003 15
    • 3. HOW BRANDS WORK HOME CASE STUDIES 1. Gold: Creating a new aura 2. Intel: The brand that inspired confidence in computing To Branding website © The Chartered Institute of Marketing 2003 16
    • 3. HOW BRANDS WORK HOME 1. Gold : Creating a new aura [Jane Wentworth, Senior Consultant Wolff Olins, British Brands, Issue 15, Spring 2002] Walk down the aisles of any supermarket. Fill your trolley with Gold Blend instant coffee, Terry’s All Gold chocolates, Kodak Gold film, Golden Churn butter or Crispy Golden cod – and you can pay for it all with a Visa Gold card. Brand managers have hijacked gold for their own purposes, creating a world of ‘pseudo gold’ in which products with limited intrinsic worth are given status by association with the world’s most ancient and revered precious metal. No wonder gold is in trouble. When last year the World Gold Council (the international body responsible for promoting and marketing gold world-wide) invited Wolff Olins to create a new positioning and global brand for gold, its market price was at a 20year low. In its second largest market, the US, the top retailer of gold was the supermarket chain K-Mart, where the average price tag was just $90. The kind of people the Gold Council wanted to reach were people who regarded gold jewellery as old fashioned, ostentatious, even tacky; people for whom metals like silver and platinum were seen as more fashionable, cooler, more desirable. The task was to create a new look and feel for gold that would provide a consistent experience for consumers, wherever they came into contact with the brand. This brand had to reawaken consumers’ desire for gold and act as a focal point for the Council’s activities. More importantly, a simple, yet powerful idea for gold was needed. An idea that would drive every aspect of the brand, not just the logotype, but the imagery, the typography and the tone of voice; an idea that would be both unique to gold and creatively inspiring for the people who promote it. The starting point was gold’s incomparably rich cultural history. Since it was discovered over 7,000 years ago, it has inspired every civilisation in history, not simply for its rarity and beauty, but for its spiritual significance. Gold is unique in its ability to link people to other cultures as well as other eras. It’s this idea of connection that made gold so special. The idea for the Gold brand is about To Branding website © The Chartered Institute of Marketing 2003 17
    • 3. HOW BRANDS WORK HOME connection to the important emotional moments in life, the profound emotions shared by everyone: love, lust, joy, despair, passion, tenderness. If the Gold brand is to stand out against such global luxury brands as Gucci or Tiffany, it needs to be both compelling and distinctive, so Gold has been adopted as the global name, and is not translated into local languages. Gold differs from other global brands by being a commodity, albeit a rather special one. The brand is not necessarily associated with specific jewellery products, but with an idea of what Gold itself stands for, an idea of emotional fulfilment rather than mere adornment. A photographic style was created that uses images to suggest the idea of Gold rather than literally focusing on a single piece of jewellery. In our search for a symbol for Gold, we turned once again to its history. In almost all cultures there is a symbolic relationship between gold and the sun. In Europe, the alchemists used a circle as their sign for both the sun and gold. As the circle is also a universal icon for totality, wholeness and continuity, it seemed an appropriate place to start. The symbol ultimately created for Gold consists of three concentric circles, signifying past, present and future and designed so that the relationship between the three circles creates an optical illusion of the glow, or aura, of gold. Words are as important to the Gold brand as the visual style. In addition to devising a unique typeface for Gold, a distinctive tone of voice was also developed, which, like music or poetry, is capable of articulating big ideas and deep emotions in a way that resonates across different cultures. The way the four elements – the mark, the typography, the visual style and the language – all work together creates a rich brand environment which is far more potent than a simple logotype could ever be. Apart from developing a new positioning and brand expression for Gold, the work of advertising, PR and media agencies also needed co-ordinating. Creative agencies naturally want to express their own ideas, but if the overall message is to be coherently expressed it is vital that this creativity is driven by one single, overarching idea. Since the launch of the Gold brand in May 2001, an international print media campaign has been rolled out and plans are under way to follow it To Branding website © The Chartered Institute of Marketing 2003 18
    • 3. HOW BRANDS WORK HOME up with film and TV campaigns. Promotional events and conferences, PR activity, exhibitions and trade fairs are all playing a vital role in expressing the Gold brand consistently worldwide. Only if the brand idea – that gold connects people to the important emotional moments in their lives – underpins everything the World Gold Council does, will perceptions change and gold reclaim its rightful position as the most noble of metals. BACK 2. Intel: The brand that inspired confidence in computing The prevalence of the computer during the 1980s led to a wave of processor manufacturers all vying for the attentions of the computer manufacturers. Although the market was clearly one of technical advancement and fast-paced change, it soon became clear that to compete in this market, it would be necessary to differentiate by some other means. Intel emerged from the race as a clear winner, with a highly recognisable brand. But how did Intel become a household name, and what made consumers prefer to buy Intel, without even understanding the technology involved? Intel found itself up against a major challenge: ignorance. Most consumers did not understand what a computer processor was, let alone how it could help them with their day-to-day computing needs. The fear of obscelecence or even that the personal computer wouldn’t meet their needs at all made the purchase a risky one for consumers. Software capabilities were often used as the sole currency for purchase To Branding website © The Chartered Institute of Marketing 2003 19
    • 3. HOW BRANDS WORK HOME evaluation. The only real benefit to the consumer of an enhanced processor was the certainty that it would improve their software potential. Purchases hinged on this promise. Intel soon realised that if it was to contend with competitors, it needed to appeal to the end customer, the personal computer user who expected increasingly resource-hungry software applications. It also knew that most computer buyers do not possess the necessary technical expertise to make such highinvolvement purchases on the back of product specification alone. Future needs are an important purchase concern, and Intel needed to overcome hesitation, indecision and ambiguity, and reduce the perceived risk from the whole transaction. The aim was to make the Intel name a beacon of confidence in an ocean of uncertainty. The brand had to win trust and create a preference in the minds of consumers. Buyers didn’t want to feel that they were fumbling in the dark without the necessary information to make a satisfactory decision. The challenge was to make the microchip more visible and to make it a key purchase determinant. Lack of confidence meant that customers were often willing to pay over the odds for a name they could trust. ‘Intel Inside’ was a mark of reassurance, a symbol that inspired confidence. Once it had won consumers trust and preference, Intel used the newfound demand to pull its product down the distribution channels. Manufacturers were soon forced to build the Intel chip into their systems, to meet the demand of their customers. A cooperative advertising approach was taken up with manufacturers, using the ‘Intel Inside’ logo to validate the purchase in the mind of the customer. The Intel brand has inspired confidence in computing for millions of consumers worldwide, and this relationship of unshakeable trust and assurance is instrumental in the brand’s continued competitive advantage. BACK To Branding website © The Chartered Institute of Marketing 2003 20