In a comment on a recent editorial, Why marketing doesn’t work any more – a definitive answer, I promised to try and address the role of brand in the ‘new marketing’. This week I bumped into Vladimir Dimitroff of Round, and he gave me a précis of Don Pepper’s answer to a similar question – What is the role of brand in one-one marketing? Don responded by saying that brand offered a similar relationship to that which his sixteen year old daughter had with Leonardo DiCaprio. She definitely had a relationship with him, but it was less clear whether he was aware of the relationship he had with her.
Well that quote looked like a good start to an editorial, so here we are. I’ve always felt pretty uncomfortable about what branding meant, so I’ve done some background reading. Most of that reading has been of Kellogg on Marketing (my current flavour-of-the month book on marketing), though I also got some very useful stuff from Alan Mitchell’s Right Side Up. And of course, the CRM-Forum has a useful document library, and I found the following documents we’ve published useful: Exploring the Links between Brand Name and Consumer Identity, CRM and Brand Management - Do They Fit together?, and CRM and the Brand.
By the way, despite all the reading, I’m still feeling pretty uncomfortable. Branding seems a pretty soft subject, and this editorial suffers from a distinct lack of hard data. An example of softness, almost fit for Private Eye’s Pseuds Corner follows:
‘Branding is an act of “creative destruction” that changes the meaning of relatively more stable products as the lives of consumers change with time. The more things change, the more they stay the same. It is the meaning that is different.’ - Kellogg on Marketing, Iacobucci, Dawn and Kotler, Philip - John Wiley & Sons, SKU:0471054046 - © 1999-2001, Adobe Systems Incorporated.
Despite this softness, I’m going to persevere. I’m not at all sure if I’m talking a load of old rubbish in this essay, but hope you will point out the error of my ways, and also point me in the right direction. So what have I learnt from all that reading? Let’s start with branding from the consumer’s perspective.
Nearly everyone seems to agree that the meaning of the brand is inside peoples’ heads, though of course companies try to influence what gets in there. A brand is a symbol, and a symbol means whatever people choose to make it mean, and that changes over time. The brand is an image in your head, formed through advertising, influences from other people, our experience of the company when selecting goods and services, using them, and our experience of customer service.
What do we use these brand images for? Well here there seems to be a bit of muddle. I’ve tried to come up with my own list of how I use brands:
- Firstly, the classic use by consumers of the brand images in their heads is to simplify the product/service purchase decision. I’m thirsty. I want a sweet, non-fattening drink. “Diet Coke, please”. Of course, there are more complex decisions than that. I want to have the latest sexy high-tech gizmo, but don’t want to spend a lot of time analysing the alternatives in the marketplace, so let’s have a look at what Sony have to offer.
- Secondly, and closely related to the first, we use brands to bolster our self-image. I used to drive a Saab (sensible Scandinavian car, but not so boring as a Volvo), and now I drive a Smart car (small, fuel-efficient, relatively environment-friendly, does the job, and just a little bit smart). When I drive around in my Saab or Smart, I’m saying a little about who and what I am.
- Thirdly, and closely related to the second, brands can be part of fashion. Some people insist on wearing Gucci shoes, Louis Vuitton luggage, Rolex watches, Levi jeans, Nike trainers, and the rest. We even put the label on the outside to make sure people know what we’re wearing. Of course, these choices bolster my self-image, but they also have some of the characteristics of a uniform. They make me a member of a group. Those of us that drive Smart cars flash lights at each other, or peep our horns, and we may even talk to each other if we meet in a café, restaurant, or pub.
- Lastly, we seem increasingly to be using brands to provide a sense of community. Supporting Manchester United makes us a member of their fan club. An interest in David Beckham, Madonna, or even Leonardo DiCaprio, makes us feel as if we know them as individuals. Watching Friends or Cheers, or reality-TV shows like Big Brother provides us with the gossip and interest in others’ lives we might have got from the traditional community we would have lived in.
So, from a consumer-perspective, brand seems to be about simplifying product / service purchases, bolstering self-image, fashion, and meeting some of the functions of membership of a community.
But how do companies use branding? The best summary I came across in my reading came from Kellogg on Marketing – Chapter 2: Brand Positioning. The chapter recommends that any Brand Positioning statement should answer four questions:
- Who should be targeted for brand use?
- What goal does the brand allow the target to achieve?
- Why should the brand be chosen over other alternatives in the target set?
- How will choosing the brand help the target to achieve the goal?
An example may make this clearer:
“BIC Disposable Razor: To men and women who lead active lives that sometimes result in shaving away from home, the BIC disposable razor offers you greater convenience than other razors because it is inexpensive and widely available. With the BIC disposable razor, you can focus on the things you want to do and not on keeping track of your razor.” - Kellogg on Marketing, Iacobucci, Dawn and Kotler, Philip - John Wiley & Sons, SKU:0471054046 - © 1999-2001, Adobe Systems Incorporated
So we’ve now got a tentative idea of what brand is, from a consumer and a corporate perspective. How will it be affected by the ‘new marketing’?
Let’s remind ourselves of how the marketplace is changing. The latest version of our detailed views on this can be found in Why marketing doesn’t work anymore – a definitive version. The major trends we identified there can be summarised as:
- Marketing is moving from push to pull. In the future, buyers will initiate commercial transactions and refuse to accept marketing-initiated communications.
- Price transparency: Buyers will be able to compare prices across all suppliers instantaneously, and understand how much profit each company is making out of their purchase.
- Buyers will insist on solutions to problems rather purchasing products, and the ‘federation’ of suppliers that involves.
- Perhaps for many developed-world citizens, the things that bring meaning in their lives are moving up Maslow’s hierarchy of needs from physiological / safety needs to esteem and self-actualisation. Meeting such needs doesn’t involve much consumption of material goods or services.
So what impact will these trends have on branding, from a customer and a corporate perspective? The following seems to make some sort of sense:
- Firstly, will branding disappear? This seems unlikely, as it forms in people’s heads. However, how it is formed in those heads is likely to change. It is likely to become harder and harder to influence that image through advertising, as media continue to proliferate, and consumers continue to switch off to ‘push’ advertising and marketing messages
- So how will brand images be formed? Word-of-mouth and customer experience of the brand, during purchase, usage, and service are likely to become more and more important. Does this also mean that the brand image is more likely to accurately reflect the reality of the brand, and so strengthen it further?
- Although brands will continue to exist, their influence on customers is likely to reduce, due to at least the following two factors. The internet ‘democratises’ information. Whereas historically companies had for more information about the market than consumers, the internet provides consumers with simple access to information on competitive offerings and pricings. The move to price transparency, encouraged by government regulation and consumer demand, makes it still easier for consumers to compare offers. These two trends make it much easier for consumers to make informed decisions for ‘important’ purchase decisions, leaving ‘less-important’ (in the consumer’s view) decisions to the short-cut of brand. The rise of the internet and the move to price transparency ‘equalises’ the information available on both sides of the market, and so more and more ‘important’ purchases (price, significant to customer, others??) will be made by consumers by informed choice, rather than through the ‘short-cut’ of brand, so reducing the influence of brand on the consumer.
- As the world we live in gets more and more complicated, consumers are focusing much more on meeting their goals, rather than the purchase of specific goods and services. This is likely to lead to an increasing emphasis on goals in branding, and how particular goods and services can meet those goals. As many goals may require goods and services from multiple suppliers, we may see ‘Intermediary Brands’ packaging goods and services, much as Package Holiday suppliers, have replaced the end-service delivery suppliers (e.g. hotels, airlines, etc). I’m on a ‘Simply Turkey’ flight to a ‘Simply Turkey’ hotel, rather than a BMI flight to stay at the Oyku Pansiyon in Bodrum.
One final thought: Consumers are becoming more sophisticated, and their attitudes to companies and brands will continue to develop, so we need to expect the unexpected. As E.F. Schumacher pointed out in A guide for the perplexed it may take 100 years or more for the implication of major conceptual changes to work through society. For example, the ideas of Freud, Marx, and Darwin on society are still working through their impact on our society. Could a similar time period be required for consumers in the marketplace to respond to the dominance of mass-production corporations? Increasingly, corporations express concern at the lack of trust consumers have for them. Could it be that consumers have realized that they need to treat their relationships with large organizations differently from the corner-shops of old?
As always we’d like to hear your comments. With the topic of this particular editorial, I’m sure there are many additional points to be made. Please increase the value of these starting points by making them below or email me at [email protected]