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Branding and China

Is China Ready To Build Global Brands?


David Aaker thinks that it will be decades before Chinese companies are ready to develop strong brands capable of competing on the global stage. While I do not agree with his blanket assessment, I can personally vouch for one of the reasons he cites for his point of view. Unless senior managers at Chinese companies value the power of branding, then investment in brand and advertising will likely be wasted.

One thing that interests me about Aaker’s assessment is that it apparently ignores the fact that Chinese brands do not need to go global in order to scale.

China is a big market now, and McKinsey estimates that the number of households with an income over US$16,000 will increase by a factor of five in the next 10 years. However, many Chinese brands do aspire to go global, so let’s have a look at Aaker’s rationale for why they are unlikely to succeed.

First, Aaker asserts, existing multinationals have a set of brand management systems and tools that are lacking in Chinese firms. This may be true, but in high growth markets like China, even multinationals are struggling to attract people who can utilize those tools effectively. Another important point is that working from a Western playbook does not always work in China, and it would be wrong to assume that Chinese companies lack creativity when it comes to marketing. 

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Brand Differentiation

Is Your Brand Destined For Sameness?


It is an indisputable fact that purchasing in product and service categories obeys the law of Double Jeopardy. This is – stated at its most simplistic – an empirical generalization that higher market share brands achieve stronger customer loyalty than lower market share brands in the same category. But the thing that always intrigues me is whether all brands obey the Double Jeopardy law to the same degree all of the time.

Take pretty much any data set at a point in time and plot brands on a graph comparing a penetration metric with a loyalty metric, and you will find a consistent relationship between the two; the higher a brand’s penetration the higher the loyalty. The metrics could be awareness and claimed trial, familiarity and favorable brand attitudes or actual penetration and repeat purchase, and the pattern will be there and favor the bigger brands. The obvious conclusion to be drawn from Double Jeopardy is that to grow market share, a brand must first grow its customer base.

But Double Jeopardy only holds if brands are broadly substitutable and appeal to the same target audience. And having spent more time than I care to think about looking at brand scatter plots like the one described above, I have noticed that some brands manage to break away from the category relationship. A few appear to do so on a consistent basis, and others do so only temporarily. Brands that manage to achieve a higher loyalty than is predicted by the category relationship tend also to be the ones that have managed to innovate, and create a perception of meaningful differentiation versus the competition. The ones that fall short tend to be premium brands that have lost their differentiation.

This observation makes me wonder if over time brands tend to revert to the category mean. In other words, from time-to-time brands find a way to innovate – either tangibly or intangibly – creating meaningful differentiation that allows them to command more loyalty than their size would normally dictate. But competitive pressures then erode that advantage, returning the brand to the category norm.

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Brand Advertising And Memory


One of the consistent findings from ad pre-testing and tracking research is that bits of ads go missing from people’s memories. A key reason for this finding is that our brains can’t deal with too many concepts at one time. I am not just speaking for myself, there is plenty of evidence that our conscious work space is limited, and things that don’t make it to our conscious attention, get forgotten.

So how does this memory loss happen? It all has to do with how our brains work. Our brains are incredibly good at focusing our conscious attention on things that are emotionally charged and relevant to us, and ignoring everything else.

Think of the “cocktail party” effect, where we can suddenly hear our name being mentioned across a crowded room, even though we were not previously conscious of that specific conversation taking place. The use of our name – something emotionally charged and relevant to an individual – implies the conversation could be important to us so our conscious attention is drawn to it.

The downside of the “cocktail party” effect, is that the conversation we were having with the person next to us, gets ignored for as long as our attention is distracted. A few seconds later, we suddenly realize we have no clue what the other person was saying to us.

The same sort of effect takes place in video ads. Our attention gets directed to interesting and enjoyable aspects of the ad – the emotionally charged and relevant bits – and that distracts our attention from other elements. No attention, essentially means no memory.

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Brand Strategy

Brands Must Own A Meaningful Difference


John Costello, president of global marketing and innovation for Dunkin’ Donuts, has not yet read my new book, The Meaningful Brand, but his comments at the Association of National Advertisers’ Masters of Marketing conference (ANA), as reported by Karl Greenberg in the Media Daily News, certainly makes it sound like he has.

The idea at the heart of The Meaningful Brand is that marketers must know what it is about the experience of their brand that makes it different from the alternatives in the eyes of its consumers, otherwise they risk seeing the brand commoditized. It does not matter how salient your brand is if consumers do not appreciate what it does for them – functionally or emotionally – or cannot justify choosing it over the available alternatives. The more succinctly you can identify your brand’s meaningful difference the more effective your marketing is likely to be.

Costello seems to agree. Part of his message at the ANA was that if marketers can’t say what the brand is in a sentence or two, it will get lost. Costello states that Dunkin’ Donuts has a real clear point of differentiation which he sums up as, “how everyday folks who keep America running keep themselves running every day.” While Costello does not break down Dunkin’ Donuts meaningful difference his commentary lines up nicely with the framework detailed in the book.

The Meaningful Brand explores four component parts of a meaningfully different brand experience: purpose, delivery, resonance and difference.

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Brand Management

Grow Brand Meaning To Grow Financial Value


Though times have changed, the foundational principles of good marketing have not. People still value things that they find meaningful and are predisposed to choose things that stand out from the crowd. Strong, profitable brands are meaningful to their consumers, perceived as different from the competition and are more salient – they come to mind more quickly and easily than the alternatives.

Brands exist in consumer’s minds as a network of associations and feelings. Marketing should seek to shape, enhance, and strengthen motivating associations, the ones that will lead to financially valuable behavior – a predisposition to buy the brand, pay the price asked, and a willingness to buy it again. To do that, however, marketers must see the world as their consumers do, not through the lens of personal objectives and experience. Market research of all kinds will help inform that viewpoint, but only if marketers are willing engage with that research to identify the opportunities to make their brand more meaningful and valuable to its consumers.

Importantly, however, the understanding of the brand’s meaning must be shared across all corporate and agency stakeholders in order to architect an experience that exemplifies its purpose. A clear, succinct statement of what makes the brand meaningfully different in the minds of its consumers is the standard against which all actions should be judged. Does an action enhance that meaning or dilute it? Failure to align the brand experience with expectations created in marketing communications will only undermine the long-term value of the brand as disenchanted consumers tweet their discontent and walk away. Successful alignment will result in satisfied consumers who are more than willing to advocate a great brand experience and pay for it.

Excerpted from my new book The Meaningful Brand with permission from Palgrave Macmillan publishing.

Sponsored By: The Brand Positioning Workshop

Join us at The Un-Conference: 360° of Brand Strategy for a Changing World
May 6th and 7th, 2014 in South Beach, Florida
A unique, competitive-learning workshop limited to 50 participants (Selling Out Quickly)
As in the marketplace — some will win, some will lose, All will learn

~In Partnership with the American Marketing Association and the Miami Marlins~
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