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Branding Basics

‘Branding’ Simplified

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'Branding' Simplified

Branding has become a subject in marketing that has been turned from a molehill into a mountain.

It’s a subject that has spread into areas far afield from the branding of products. Rock groups, movie stars and even symphonies are talked about as brands. Maybe it’s time to cut through all the silliness and clarify things.

The last time I looked, there were over 2,000 books covering some topic related to brands or branding. What used to be just the logo and the name of a product or company has now become this almost mystic creation that encompasses unique identities and qualities separate from the product names. There is an army of consultants trying to sell you some branding system or another. Forget all that. Let’s begin at the beginning. As Walter Landor once said, “Products are created in the factory, but brands are created in the mind.”

In the old days, a brand name was nothing more than a word in the mind, a proper noun that is spelled with a capital letter.

But today, almost 2 million brand names or trademarks are registered with the U.S. government. To be successful, it helps a great deal to have a good name.

Despite this, companies continue to give themselves terrible names.

The biggest mistake people make is to use initials such as USG, AGCO or CDW. Amazingly, they are large companies, but all-initial names are not really names at all. They’re a one-way ticket to oblivion.

Another problem occurs when companies take a good name and change it to a bad name. The U.K. Postal Service renamed itself Consignia, a name that had no relevance to postal services. Fifteen months later, after endless jokes and ridicule in the media, it reverted to its previous excellent name, the Royal Mail Group. A lot of time, effort and money went into that mistake–not smart.

The best names are linked directly to a product benefit, such as Die Hard, for a long-lasting battery; or Windex, for window cleaning; or Intensive Care, a brand of skin lotion.

Another tip is a name that sounds good, such as Caress bath soap or NutraSweet sugar substitute. In many ways, the mind works by ear, so you want to avoid strange-sounding names like Unum, Agilent or Zilog. What you’re after are good-sounding names like Humana or Acura.

Now, let’s move to “branding.”

A branding program is all about differentiating your product or company from the others in your category. And, if you don’t have a point of difference, you’d better have a very low price. An example was BMW, which many, many years ago established the powerful position of being the “Ultimate Driving Machine.” It has driven that differentiating idea to become one of the world’s most successful premium automobiles.

You might ask, “Isn’t that standard operating procedure for most marketers?”

Were it only so. A research firm called Copernicus investigated 48 pairs of leading brands, each pair in a different product or service category. The objective was to measure whether brands were becoming more similar and commodity-like over time. Tragically, out of the 48 categories evaluated, 40 pairs of brands were perceived as becoming similar.

Three reasons were presented as to why this is happening:

1. There’s a shift from brand building to promotional programs or deals.

2. There’s a shift from information-oriented advertising to entertainment-oriented advertising. (I’ve written a lot about this recently.)

3. In addition, there’s a failure to communicate a distinctive point of difference.

That moves the equation from branding to pricing. And let me tell you, the first people to exploit perceived similarities are the big mass merchandisers like Wal-Mart Stores and Home Depot. They will put enormous pressure on a company to reduce its prices. And they will get away with it if the shopper doesn’t perceive a reason to pay a little more for the company’s brand.

This raises another question: Why do companies have trouble with this?

The trick is to figure out how to express that difference. It’s easy if you’re faster or fancier or safer or new. But often, you have to find other non-product attributes like leadership or preference or heritage. Whatever you select, you use it to set up a benefit for your prospect.

Many companies just don’t understand this. All they promote are meaningless slogans. Michael Porter said it very well: “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. The essence of strategy is in the activities–choosing to perform activities differently or to perform different activities than rivals. Otherwise, a strategy is nothing more than a marketing slogan that will not withstand competition.”

So, dear reader, if you want a simple definition of branding, here it is: It’s all about establishing a name for your product and a differentiating idea in the mind of your prospect.

That said, it’s not exactly that simple. There is a hard part about branding. It’s called staying focused.

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7 Comments

Steve Woodruff on August 02nd, 2007 said

Great post – you can hardly sum it up better than this! Differentiate or die!

Mike Wagner on August 02nd, 2007 said

Fully appreciate the commonsense directness of this post.

Thanks for enlarging the conversation!

Keep creating,
Mike

David Koopmans on August 02nd, 2007 said

I don’t think there is a word that creates more confusion in people’s mind. Except maybe for “marketing”. Thanks for the great post.

BTW, I’ve been posting about the confusion around the word Marketing with a category on my blog called “marketing definitions”

Mitchell on August 08th, 2007 said

I kept thinking of that book my old man gave me years ago called Positioning by Reis and Trout. Gotta disrupt the mind of the consumer, if not you are only kidding yourself.

Keep it coming!

Ted Grigg
Twitter: directguru
on August 08th, 2007 said

There’s a saying we all know called KISS, so your comment hit a note with me.

But I heard another saying from a direct marketer friend of mine that puts the branding strategy back down to earth.

“Ask not what direct response can do for your brand, but what your brand can do for sales.”

A little simplistic perhaps, but his statement emphasizes that we can get wrapped up in our own little world forgetting why branding exists in the first place.

Joseph Lazo on August 31st, 2007 said

Finally, someone has cut through all the malarkey and misuse of the term “branding.” Thanks for such a superb articulation of what branding is, and isn’t.

Trackbacks/Pingbacks

  1. Anonymous - August 2, 2007

    Branding Strategy Insider: ‘Branding’ Simplified

    Branding has become a subject in marketing that has been turned from a molehill into a mountain. Maybe it’s time to cut through all the silliness and clarify things.

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