Branding Strategy Insider

Perceived Quality: Critical Asset For Brands

Perceived quality is a brand association that is elevated to the status of a brand asset for several reasons:

* among all brand associations, only perceived quality has been shown to drive financial performance.

* perceived quality is often a major (if not the principal) strategic thrust of a business.

* perceived quality is linked to and often drives other aspects of how a brand is perceived.

Perceived Quality Drives Financial Performance

There is a pervasive thirst to show that investments in brand equity will pay off. Although linking financial performance to any intangible asset (whether it is people, information technology, or brand equity) is difficult, three studies have demonstrated that perceived quality does drive financial performance:

* Studies using the PIMS data base (annual data measuring more than one hundred variables for over 3,000 business units) have shown that perceived quality is the single most important contributor to a company''s return on investment (ROI), having more impact than market share, R&D, or marketing expenditures. Perceived quality contributes to profitability in part by enhancing prices and market share. The relationship holds for Kmart as well as Tiffany: Improve perceived quality, and ROI will improve.

Keys To Impactful Name Design

A great name should be pleasing to the ear and to the eye. So how do designers make a name look good?

We got some answers from Scott Yaw, a senior partner and managing director of Deskey Integrated Branding in Cincinnati. Scott joined Deskey in 1978 and his expertise encompasses brand strategy and identity programs. Some of Deskey’s recognizable brand design efforts include the iconic Tide detergent bull’s-eye logo, DeWalt Power Tools, Ingersoll-Rand equipment, 3M’s Post-It Notes, Brawny Paper Towels and retail packaging for Starbucks.

Q: You say that smart design is a competitive weapon. How so?

That statement actually paraphrases a principal our founder Donald Deskey said in the 1940’s, but we find it very relevant. With so many parity products and services in today’s market place, design is one strategy marketers can use to differentiate their brands and help close the sale with customers. When marketers fail to differentiate, customers will likely choose low-price. This is the start of commodity thinking and the race to the bottom begins. Great design moves both hearts and minds. Great design moves customers up to premium price points.

Q: Let’s say a client brings you a name for a new product. Describe your process for turning that name into a visual identity.

We start the identity process with a five-step analysis: (1) How the product works; (2) How and where customers use the new product; (3) What significant benefits (if any) it provides to customers; (4) The actual selling environment where the product appears; and (5) An audit and evaluation against competition.

We prefer developing unique graphic symbols and easy-to-read word mark typography for new products. Unique graphic symbols can be trademarked as a barrier against forthcoming competition. Unique graphic symbols and easy-to-read logos with ownable colors can be integrated with marketing programs to create a consistent look.

Ford's Fruitful Brand Strategy

Ford chief executive Alan Mulally is famous for one of the first decisions he made after joining the automotive company in 2006. Barely three months into his tenure, Mulally borrowed big, using his company as collateral. At the time, the decision raised eyebrows, but it is now widely regarded as a masterstroke. The $26bn he raised, when financing was still cheap and available, has enabled Ford to avoid bankruptcy or the need to seek government handouts. It has also led to a growing recognition that, compared with ailing rivals Chrysler and General Motors, Ford is in much better financial shape for the long haul.

Mulally certainly deserves credit for his savvy financial decision-making, but it is his brand strategy that is at the heart of Ford's positive outlook. Ford is a salutary example of one of the hardest lessons of brand management - one that I continue to struggle to get through to MBAs and executives. It is not about creating brands any more, it's about culling them. While this is not a difficult lesson to explain, to accept that you should kill off some, perhaps most, of your brands to help your company grow is a counterintuitive step many marketers simply cannot contemplate.

Yet Ford illustrates the perils of pluralism and the potential salvation that comes from reducing the brand portfolio. Once upon a time, when cars were still a relatively new invention, Ford enjoyed that most focused and parsimonious of brand architectures - a branded house. However, acquisition and expansion ensured that, like most companies, Ford grew this portfolio and gradually lost its focus. One of Mulally's first decisions at Ford was to sell off many of these additional brands - Land Rover, Jaguar and Aston Martin have all been divested, and Volvo is now up for sale, too. They are all fine brands, but not part of Mulally's vision for Ford, and were, therefore, a dangerous distraction from the core business.

Managing a brand portfolio is like learning to juggle. You start with the simple task of throwing a tennis ball into the air and catching it. If you add a cricket ball, the challenge becomes significantly more difficult. If you keep adding more disparate items - a shuttlecock, a brick, a football - the task eventually becomes impossible and all the items crash to the floor. Unlike GM, which continues to struggle with its seemingly impossible juggling act of managing a dozen brands, from Hummer to Chevrolet, Ford decided to discard its distractions and focus on managing one brand well.

Brand Management From The Field

The Damned United, a film charting the tumultuous 44-day reign of Brian Clough at Leeds United FC, opened recently. UK Marketers under the age of 30 will probably remember him as a rather melancholy old man, but the young Clough was a wonder to behold. Imagine a manager today leading a club toiling at the bottom of the Championship to win not only the Premier-ship but two back-to-back Champions League finals as well. That was, in essence, the equivalent of Clough's astonishing achievement as manager of Nottingham Forest in 1979 and 1980.

He was a genius. But what can the Clough School of Management teach all marketers about marketing?

Keep it simple

Clough had a simple philosophy. He believed that defenders should defend, midfielders create chances and strikers score goals. There was little else to his tactics. His simple approach carried over to his coaching 'technique' in which he would stand on the training ground holding a big stick shouting 'hit the target' repeatedly at his players.

The simplicity of his approach was its biggest strength. As John McGovern, one of his players, explained: 'He made everything crystal clear to ordinary working men, which is what footballers are. If you make things clear to them and make them work hard, you will find you have an amazing product.'

One of the biggest weaknesses of some marketing strategies is their complexity. It's easy to come up with a brand strategy that no one can understand, much harder to devise one straightforward enough for everyone to be able to execute.

Take Procter & Gamble's chief executive, AG Lafley, who is widely regarded as a great leader. Under his 'Sesame Street simple' philosophy, brevity, repetition and simplicity have replaced complex corporate buzzwords. P&G's entire corporate strategy fits onto one sheet of paper.

Pick an enemy

Clough was a man who bore grudges. Throughout his career he picked fights with anyone he felt opposed his own viewpoint. His most famous feud centred on his hatred for the tactics of Leeds United and the club's most successful manager, Don Revie.

Local Brand Dominance

In today's globalized world where global brands quickly adopt to local demands in order to gain customer acceptance, being a local brand seems like waging a losing battle. But one Asian brand has proved this wrong by beating a global giant flat!

Jollibee is the brand pride of the Philippines. The brand has been so hugely successful that even the mighty McDonald's has been forced to copy Jollibee. Jollibee was started in 1975 as a two brand ice cream parlor by a small time entrepreneur Tony Tan. Jollibee gradually expanded its product portfolio to venture into the burger business. From 2 outlets in 1975, the brand has come a long way and today has more than 400 outlets in Philippines alone and 24 outlets in 7 countries including the US, China and Hong Kong.

A whopping 69% choose Jollibee compared to a mere 16% for McDonald's of the entire fast food population in the Philippines.

What is the secret behind the Jollibee brand?

Branding Debate: Are People Brands?

Back in February we touched on Michael Phelps and celebrity endorsements. The topic brought to light varying opinions on people as brands. Are they? I asked a few colleagues.

Mark Ritson: No
It's a common error to assume that people, countries and cities are all brands. Yes, they all possess symbolic meaning but as I point out in my post so do road signs. The point is that brands are more than just a cluster of meanings. On the consumer side you have to be able to purchase them and own them, on the organisational side you have to be able to control and alter them if you so choose. Neither applies to people.

Take Michael Phelps. Do you own him when you buy a box of cereal with is name on it? Could we reposition Phelp's personality and talents if we decided a strategic review was needed - perhaps into an intense soccer player?

Put it another way. We have an extensive academic body of work on celebrity endorsement in the Journal of Consumer Research for example, starting with the superb work of Grant McCracken. We also have an extensive and empirically verified series of papers on Co-Branding published in journals like the Journal of Brand Management. Even a cursory look at these two literatures confirm that the relationship between two brands, and between a celebrity and a brand, are entirely different. If we were to accept the premise of celebrities as brands we would have to unite these two disparate literatures somehow.

There is a final and most important rationale for rejecting people as brands. To do so would be to commit what Marx called "the commodification of self". When we turn people into brands their humanity is lost. Yes we use people to sell brands, but when we start to use the literature on brands to sell people we forget the essential humanity that sets apart people from things.

Testing Marketing Competence

It has been my experience that "marketers" are quite varied in their ability - from "clueless" to "brilliant." The problem is that many people can't tell the difference between these two extreme ends of the continuum. Here is a list of questions that should help you sort the wheat from the chaff. Ask these of the person in question. His or her answers should help you make up your mind where he or she belongs on the scale of marketing competency.

·Who is your primary target audience and why?

·What are the most efficient media and other vehicles to reach this audience?

·What is the best way to segment this market?

·What is your brand's top-of-mind unaided awareness among its primary audience?

·What is your brand's primary point of difference? Explain why it is compelling to your brand's target audiences.

·Why will your target audiences choose your brand over competitive brands?

·What are your brands "proof points" or "reasons to believe"?

·Please list or articulate your marketing strategies and tactics in decreasing order of effectiveness? That is, which would you invest in first, second, third, etc.?

·How much do you spend on PR as a percentage of paid media spend?

·Describe some of the insights that you have gained from research about your target audiences. What are their hopes, fears, anxieties, attitudes and values? Are there any insights that lead to a "hook" or "way in" to the target audience?

Promoting A New Brand Name

Adopting a new company name isn’t enough. If an organization is really proud of its new moniker – and it ought to be – then promoting the new identity with all its important constituent publics is a necessity.

Here are the steps that a proud company should follow in letting its publics know who exactly it has become:

    * First, preview the new name internally.

      Give the employees the first glimpse of the new identity and the rationale behind it. These people, after all, are the keepers of the new flame. They must be supportive – the faddish term is “buy-in” – so get them in the tent early.

      This implies holding employee meetings to announce – with appropriate bells and whistles – the new name and its meaning. It means redesigning the employee intranet to reflect and herald the new name. It means distributing advertising PDFs on the campaign that will launch the new name. It means supplying coffee mugs and key rings and Lucite cubes and all that jazz to make the new name tangible.

    * Second, announce the new name externally with appropriate pomp.

The Power of Brand Consistency

“We thought we’d update the logo a little.” “It’s not a new tagline. It’s just a catchy phrase that we are using instead of the tagline.” “We thought the icon would make a great decorative element.” “We are thinking about creating a new name for the organization.” “We developed a new product so we created a new brand for it.” “We created a different tagline for each audience. Pretty clever, huh?” “We were getting so tired of the old logo.” “It’s more fun to present the brand in a wide variety of colors.” “There was no room for the icon so we left it off.” “This is a funky stylized version of the logo targeted at younger audiences.”

What is it about marketers that cause them to want to create something new all of the time? I have been told that I am a creative, out-of-the-box thinker, but when it comes to brand identity, I learned a long time ago that consistency is the secret to success.  With enough repetition, people encode the brands identity (usually not as read words but as the recognized look, shape and feel) in their brains, preferably linked to things that matter to them. If you mess with the overall look and feel of the brand, these linkages and associations are likely to break down.

So, how does one combat these tendencies? In the following ways…

·         Develop a sound brand strategy and identity from the start

·         Base them on deep customer insight

·         Carefully think through your brand’s architecture and identity system, anticipating as many new products, services, media and other applications as possible

Branding: The Next Generation

The concept of branding is already undergoing dramatic changes. New technologies have allowed us to go beyond mass production and to mass customize brands. Currently brand manufacturers own their brands. This is changing. In the future brands will increasingly be owned by the consumer. The first signs of this shift appeared in the late 1990s. I documented this phenomenon in my book BRANDchild and named it MSP -- Me Selling Proposition.

In the 1950s branding belonged to the USP -- the Unique Selling Proposition. This ensured that the physical product, rather than the brand, was the core differential. By the 1960s we began seeing the first signs of true Emotional Selling Proposition (ESP) brands. Similar products were perceived as different primarily because of an emotional attachment. Think of Coke and Pepsi. The consumer tends to drink the "label" rather than the cola. During the 1980s the Organizational Selling Proposition (OSP) emerged. The organization or corporation behind the brand in fact became the brand. It was the organization's philosophy that distinguished it from others. For many years Nike subscribed to this form of branding. The internal spirit of the company was so strong that its employees became the main ambassadors for its brand.

By the 1990s brands had gained enormous strength in their own right, and the Brand Selling Proposition (BSP) took over. The brand was stronger than the physical dimensions of the product. Think Harry Potter, Pokemon, Disney, or M&M's. The brand name is found on sheets and toothbrushes, wallpaper and makeup sets. Books and movies aside, the consumer has become more fixated on the brand than the stories.