Idea 7 - Brand (50 Management ideas you really need to know)

Idea 7 - Brand

Apple has been running a transatlantic advertising campaign featuring two friends - Mac and PC. PC - who wears a tie - is nice enough but a little geeky and buttoned down. Doing what he has to, which is to be a computer, is a bit of a performance and ever-so-slightly perplexing. Mac - casual shirt - is relaxed, cool, takes everything in his stride. Not smug, he's simply the sort of guy you wouldn't mind meeting in a bar. Who would you rather have a relationship with?

The campaign, which has played around the world using well-known faces in the roles of Mac and PC, takes the next logical step in brand advertising. It does what other marketers have been urging, which is to 'humanize' the brand - except that Apple has done it literally. Brands have travelled a long way from the rear ends of Texas cattle. Like the original, marketing brands are supposed to bum an image of the product into your brain. Marketing types won't all agree on a precise definition, but it has broadened from the original 'name, mark or symbol' to something like 'the sum of all experiences and values associated with particular product, service or company'. That's not an exclusive list, since any entity that wants your money or attention nowadays is capable of building a brand, including people (Madonna, Martha Stewart), cities and countries. The top three country brands in 2006, according to the Anholt Nation Brand Index were the UK, Germany and Canada. The US came tenth.

'Name, mark or symbol' brands are like packaged goods, which take them back in essence, if not name, to the 19th century. Early 'brands' included Campbell's Soup and, of course, Coca-Cola, still the world's most valuable brand, according to consultants Interbrand, Ad man James Walter Thompson published an explanation of trademark advertising around the turn of the century, after which more companies developed a taste for symbols, mascots and slogans. When radio arrived in the 1920s, the slogans morphed into jingles. Academia began to impose order in 1955. Burleigh Gardner and Sidney Levy suggested in “The Product and the Brand” that the brand itself was less important than the customer's perception of brand. They called it 'brand image', arguing that it was an inseparable part of branding that required creation, development and management. An industry was born.
Still selling soup Brand managers learnt to feed those perceptions by associating their products with attractive qualities - reliability, quality, health, youthfulness, luxury. This came to be known as 'branding' and led to the perceived wisdom that customers buy the brand, rather than the product. This was a valuable distinction in a world where competing products were becoming increasingly similar. Some brands have enjoyed very long lives in the face of energetic competition. Apart from Coke and Campbell's (still the world's largest soup company), Heinz Tomato Ketchup, Bird's Custard, Kellogg's Corn Flakes and Gillette razors are only some of the brands that have led in their markets for over half a century.

Customers like brands because of the certainty of what they promise and because they speed up choice. While they help to build and sustain customer loyalty, they bring other strategic benefits to their owners. First, and not least, they usually allow the company to charge more and, because it raises wholesalers' and retailers' margins, this premium price makes it easier to get distribution. In the groceries market, where power has shifted from manufacturers to retailers, any such leverage is worth having.

Another benefit is available through the growing practice of 'brand stretching', 'leveraging the brand' or 'brand extension'. Here, you extend the virtues of the existing brand and its name to a new product. Yves Saint Laurent set the example for every other fashion designer when he gave his name to a range of accessories from belts to sunglasses (couturier Coco Chanel had done it with perfume in the 1920s). Mars has pushed into the ice cream market, and Procter & Gamble's Fairy Soap has given us Fairy Liquid.

This takes some, though far from all, of the risk out of launching new products and can be used to create new segments within an existing market, as British Airways did with Club Class. By reintroducing a sense of freshness and diversity, brand stretching may also help to stave off the market maturity stage of the product lifecycle, as it has in the once-faded realms of handheld razors, for example, and bicycles.

Today brand consultants talk of the need to get the customer to deepen their relationship with a brand. Human relationships, the ones that inspire the kind of loyalty and affection marketers want, invariably have significant emotional content. So now we have 'emotional branding which is where the humanizing comes in. Marc Gobe, consultant and author of a book on emotional branding, believes that emotions sell. Emotional branding brings new credibility and personality to a brand by connecting powerfully with people on a 'personal and holistic level'. It' elevates purchases based on need to the realm of desire. Apple's iPod
does just that, he believes.

Building a 'brandscape' A brand is an asset and, though intangible, it has a value. These values can make a large contribution to the total worth of the companies that own them, which accounts for the zeal with which companies try to build them up. This has given some· critics a platform from which to attack the whole concept of big brands. Naomi Klein touched a nerve with her book, No Logo, which accused brand merchants of cocooning us in a 'brandscape'. Companies were moving their factories to the third world so that, instead of making products, they could market aspirations and images, a 'Barbie world for adults'.
Klein is not the only one who is fed up with brand obsession. Former Disney chairman Michael Eisner once called the word 'overused, sterile and unimaginative'. A reliance on brands and 'brand values' has made companies vulnerable in an unaccustomed way, as companies like Nike and Shell have found to their cost, when they were seen to have besmirched their brands Emotional branding is all very well but - funny things - emotions can change in a heartbeat.

Reference: 50 Management Ideas You Really Need to Know
Book by Edward Russell-Walling

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