Branding Strategy Insider

Organization Age & Size Impact on Brand Management

Continuing from yesterday...

Some people will tell you that the best promise a large organization's brand can make is to be "the quality, innovation leader in (insert the company's business category)." They say that organizational brands of large enterprises offer authority and assurance period. Yet some of the most successful organizational brands have more focused (consumer benefit based) brand essences.

For instance, Disney promises fun family entertainment, Nike promises genuine athletic performance and Hallmark promises caring shared. All three are distinctive yet broad enough to make multiple product categories possible. Consider all the businesses that Disney is in. Hallmark has much growth left (despite a mature greeting card category) as it could offer gift candy and flowers and even "love boat" cruises.

Below is a summary of the most likely brand problems of small and large organizations:

Smaller|Younger Organization:

Lack of funds
Lack of time
Little or no marketplace awareness of the brand
(Sometimes) don't fully understand who is buying their products and services and for what reasons

Larger|Older Organization:

Current leadership team (including CEO) doesn't know what distinctive, compelling value their organization brings to the marketplace
Original marketplace position is no longer distinctive or compelling
The brand structure has become too complicated and unclear
The brand identity standards and systems have fallen into disuse
The organizational infrastructure and institutionalized bureaucracy work against a reinvigorated brand position
Marketing functions are not integrated
The organization has become too big and decentralized to create a consistent brand voice

Brand Management: Organization Age & Size Impact

The topic of today and tomorrow’s posts is "how organization age and size affect brand management issues." I recently had a conversation with a group of peers whose companies provide brand management and marketing services to a wide spectrum of organizations. During the course of our conversation, it became clear that brand management issues differ significantly based on the age and size of the organization.

A key role of brand management is to create and reinforce an identity that promises relevant points of difference to consumers. Smaller, younger organizations have an advantage in this area for a number of reasons:

Leadership
Smaller|Younger Organization: An entrepreneur with a vision and passion
Larger|Older  Organization: A seasoned executive with experience in running large, complex enterprises

Size    
Smaller|Younger Organization: A small number of people who work closely together and often share the entrepreneur's vision and passion
Larger|Older Organization: A large number of people in different divisions and departments with different functional backgrounds and allegiances, often very much decentralized

Business Scope     
Smaller|Younger Organization: Usually focused on one core product or product category
Larger|Older Organization: Usually offering a wide variety of products and product lines, many times in multiple business categories and even in different industries

Brand Structure
Smaller|Younger Organization: Usually one brand
Larger|Older Organization: Often very complex including multiple brands, sub-brands, endorsed brands, etc.

Organization Infrastructure
Smaller|Younger  Organization: Rapidly being built to support the entrepreneur's vision
Larger|Older  Organization: Many assets, systems, processes, organizational levels, etc. Very difficult to change.

Building Brands & Building Traffic

Some years ago, an Australian takeout pizza place used the Internet in an attempt to boost sales. Traffic was slow. Hardly anyone visited the site. The need for an increase in traffic was urgent. If traditional online media planning had been used, banners and links would have been purchased and the URL added to the shop's phone-book entry. It might even have invested in some traditional ads.

The pizza place went a different route. Instead of spreading money between off- and online ads, it spent the entire budget on radio. The spots were simple but extremely effective. So effective, the restaurant's increased business caused most of the local competition to shut down.

How did they do it?

Instead of offering discounts or merely promoting its URL, the pizza place's radio ads asked listeners to tear out all the pizza-restaurant pages from their yellow pages and bring them in. In return for the pages, customers received a free pizza of their choice and a sticker with the restaurant's URL.

Very clever!

Because the contact information for all the other pizza joints in town disappeared from customers' primary reference source, only one set of contact details was left in households that complied: the URL for the restaurant that dreamed up the promotion. That single outlet is now a franchise.

Creating traffic is not necessarily a matter of buying ads or taking a traditional approach.

Of Brand Marketing and New Business Ventures

As I work with more and more smaller businesses, including start-ups, it has become obvious to me that some businesses attempt to address underlying business problems through branding. I find that I am not only consulting on branding but also general business strategy and especially the intersection between the two. Given this clear need, this post is about the intersection of branding and business strategy in creating a successful new business.

A very common problem I encounter is businesses that have a product and a manufacturing process but little understanding of the underlying customer need that the product addresses. Businesses should always start with a solid understanding of the customer needs that its products and services can fulfill – functional, emotional and otherwise. This assumes that the business has already identified its primary and secondary target market segments and knows a fair amount about those segments’ needs, desires, hopes, fears, values, aspirations, problems, concerns, shopping behaviors, etc. All of this can be discovered through formal or informal market research. Research techniques are myriad, but often include one-on-one interviews, focus groups, online surveys and discussions with current customers. Another technique is to ‘shadow’ your customers and ‘live the brand’ with them to discover how they experience it.

Another common problem is developing a product or service that does not deliver a superior value proposition to what is already available, either because it is not differentiated in relevant ways from what is already available or because its cost structure demands too high a price for the perceived value.

'High Road' Sponsorships: Something to Consider

More and more today, we see sports stadiums and arenas, theaters and other buildings being named after the companies whose sponsorship dollars allow them to put their names on those buildings. While this may very well help in establishing and reinforcing a brand's awareness among a large local audience over time, many people view this to be one of the worst forms of crass commercialism.

Instead of naming buildings after founders, civic leaders or other heroes, we now name them after the highest bidders. Historical names are replaced with the names of the brands with the biggest bucks. While this does not seem that different from a university naming a building after the philanthropist who made the building possible or a theater naming a seat after a donor who donates a certain amount of money, to many, it seems indicative of all the things that are wrong with our over commercialized society.

As an alternative, I might suggest that brands take a higher road, “Adopt a Highway” or underwrite specific museum or gallery exhibits, or sponsor certain performances. While it might require more thought and effort to underwrite specific events, performances, community projects and other worthwhile causes, I believe the public will give the brand credit for choosing to support certain worthwhile community-enhancing activities rather than just slapping its name on a building for a large sum of money. Somehow, the latter makes the brand seem much less self-serving, much more community oriented and much more likable.

Straight Talk on Branding II

I began sharing my thoughts on the topic of developing a brand building organization about  a week ago and I'm quickly realizing I have much to say. Here's my second installment on the subject...

More and more companies are focusing on a corporate brand for a few very good reasons:

•It is much more efficient to build and market a corporate brand than a large portfolio of separate product brands.

•The corporate brand may be the most valuable asset (outside of employees, many would argue) that the company owns.  To be good corporate stewards, a company’s officers are increasingly realizing that they must maintain, build and leverage the corporate brand.

•A strong and differentiated corporate brand gives a company instant credibility and permission to operate within appropriate new product categories.  It can become a powerful growth driver.

As a company moves from a product brand focus to a corporate brand focus, its executives must lead a paradigm shift in how the enterprise is managed to succeed in this endeavor.  It is no longer enough to have a brand manager or advertising department develop the brand positioning and the advertising campaign.  While establishing brand identity standards and systems is an important element of brand management, it also falls far short of what is required.

Exploring Small Business Branding & Marketing

Any organization that intends to thrive must begin by gaining a profound understanding of its customers.  Who are they?  What are their hopes, needs, fears, desires, aspirations, values and anxieties?  What need(s) do your products and services fulfill for them?  Why would they choose your organization’s products and services over those of one of its competitors?  That is, what makes your organization different in a customer-relevant and compelling way?  Put another way, what would your customers miss most if your organization ceased to exist?

Next, the organization must identify the primary benefits it delivers to its customers. 

Benefits can be:

•functional (This car was rated the safest in its category by Consumer Reports)

•emotional (Harley Davidson makes me feel like a rebel, a free spirit.)

•experiential (I pamper myself when I take a break at a Starbucks.  It is an inexpensive indulgence.  They make me feel so welcome there.)

•self-expressive (People know I have money and good taste when I carry a Gucci handbag.)

Emotional, experiential and self-expressive benefits are often more compelling and less easy for competitors to copy than functional benefits.

Small Business Branding Q & A

Originally published in Maine Today...

Q. Many of us throw branding, marketing and advertising into the same bucket. Can you help us sort out the differences?

A. Marketing is a discipline (or set of activities) ultimately designed to generate and increase revenues.  It includes a wide variety of sub-disciplines, strategies and tactics.  For instance, all of the following can be components of a marketing program:

•Marketing research
•Customer knowledge/analysis
•Competitive knowledge/analysis
•Product
•Packaging
•Pricing
•Branding
•Marketing communication (including advertising)
•Distribution
•Promotion
•Publicity
•Media relations
•Industry analyst relations
•Signing
•Merchandising
•Cause-related marketing
•Event marketing
•Trade shows
•Sales support
•Web sites
•Customer relationship marketing, including data base marketing and direct marketing
•Viral marketing
•Guerilla marketing

A marketing plan should promise specific revenue or market share increases in return for specific levels of funding for particular marketing strategies and tactics.

The marketing function can be organized by brand, customer, customer need segment, product category, functional sub-discipline (such as advertising, promotion, etc.) or some combination of these.

Advertising is paid for marketing communication.  It is a marketing sub-discipline as noted above.  Advertising’s major benefit is to increase awareness.  It also communicates the brand’s (or product’s) relevant point(s) of difference and can achieve other ends, depending upon the objective.  For many consumer product categories, it can actually elicit a sale.  For most business to business categories, it can only increase awareness and preference and put the brand in the consideration set.

A brand is the personification of an organization or its products and services.  Brands are designed to build relationships and emotional connection with customers.  Brands are also the source of promises to customers.  They should promise relevant differentiated benefits.  So, branding is the process of creating an identity for an organization or its products and services for the purpose of creating relationships with customers and making promises to customers.  Branding is a sub-discipline of marketing, but given its increasing role at an organizational level (organizational branding versus product-specific branding) and the resulting need to manifest the brand promise at each point of customer contact, branding should influence virtually every activity in the organization.  Branding is the source of (1) customer goodwill and (2) a significant portion of the financial value of a company.

There is increasing evidence and consensus that strong brands deliver the following business benefits:

•Decreased price sensitivity
•Increased consumer loyalty
•(For manufacturers) increased bargaining power with retailers
•Independence from a particular product category
•Increased flexibility for future growth (through extension)
•Increased ability to hire and retain talented employees
•Increased ability to focus the organization's activities & resources
•Increased market share
•Increased stock price
•Increased shareholder value

In summary, marketing is a broad set of activities designed to generate and increase sales (in the short-.medium- and long-term).  Branding is designed to increase sales and market share in the long-term by establishing relationships with customers.  Both rely on advertising as a very powerful tool.

Q. Small businesses don't have budgets like P & G to invest in their brands. How can they apply branding concepts to their business?