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BRANDING – An Introduction by Freddy J. Nager
“This is not a brand,” from The Brand Gap by Marty Neumeier
A logo is not a brand. A logo is a symbol that represents the company, just like your photo represents you. A logo is just one of the many factors that make up a brand, and it’s not even the most important one.
So what is a brand?
There are as many definitions of “brand” as there are marketing books and marketing professors. Here is the definition that I have found most effective in discussing brands with clients.
A brand is your voice, design, and reputation combined into one impression.
I like this definition because it can be applied to a person or an organization. (Yes, we all have personal brands.) It also contains elements that you can control and others that you can’t:
- Voice: You have a lot of control over your voice and the voice of your company brand. This is obviously how the individual or organization expresses itself (funny, serious, caring, etc.). We can also refer to it as “personality” or “attitude” or simply how the brand “sounds.” The challenge for an organization is that it has many employees and representatives, each of whom may express the personality in a different way. Consider the voice of this school: if RKC were a person, how would you describe his voice? How would you describe your voice in business? Are you funny, shy, warm, passionate, quiet? To determine the voice of a brand, read any of its promotional materials (websites, commercials, print ads), and study the writing. You can also listen to any speeches, paying close attention to the words being used, and the personality of the speaker.
- Design: This is how an individual or organization physically presents itself. We can also refer to it as “style” or “appearance.” The design is primarily visual: ad agencies create “brand identities” for companies, consisting of logos, colors, fonts, etc. You can also include the name of the company in this category. In addition, for some businesses (such as a restaurant or clothing store) the design may include other senses such as sound or smell. For example, a restaurant may play a certain kind of music in the background, or a fashion store may smell of a certain perfume.
In your personal case, your design could be the clothes you wear to work, your grooming and physical fitness, the quality of your resume, or the products you use. (Fair or not, our looks and our possessions judge us. If you drive a Porsche, people will think of you differently than if you drive a smoky old Yugo.) Think about your appearance, and what you do every day to shape it.
For an organization, the overall style can be shaped by the design of their products, the quality of their communications media (websites, brochures, and commercials), the cleanliness of their facilities, the uniforms of their employees, etc. Consider RKC’s style: how would you describe what it looks like?
- Reputation: Your reputation is what other people think about you. It may be based on a number of factors: the quality of your products or service, how you treat others (including business partners, workers, and the environment), and most importantly, your values as an organization and how you express them. While you can shape your voice or design, your reputation ultimately resides in the minds of other people. They make the final decision whether they admire you, fear you, respect you or love you. Microsoft, RKC, the U.N., New York City, the World Wildlife Fund, BP, Manchester United, the Catholic Church, and other institutions can do many things to shape how they are perceived, but they can’t completely control that impression.
One’s reputation also differs in the minds of different people: your mother probably does not think of you the same way your boss might.
It’s also important to remember that your reputation is affected by who you associate with. For example, tobacco companies might be highly profitable, but they do not attract many partners. Other companies try to associate their brands with certain geographical locations (consider Swiss chocolate, German engineering, or Hollywood movies). And yet others try to associate with charities and causes to improve their reputations. Consider the reputation of this school: how would you define it?
When defining the reputation of a company, it’s important to research what other people think about it, NOT what the company says about itself.
So in your assignments and your own marketing plans, you might be asked to define your company’s brand. Think in terms of voice, design, and reputation.
Here’s a key point to remember: If you don’t define your brand, others will define it for you – including your competitors. It’s also important to have a strong brand. If not, people might not notice you at all.
I recently attended the Consumer Electronics Show in Las Vegas, and there were many generic Chinese subcontractors there. They did not have memorable names – some names were impossible for non-Chinese to pronounce. Most of these companies competed primarily on price. They were also burdened with the low reputation of Chinese-made products. If I managed these Chinese electronics companies, I would do everything in my power to create a strong, positive brand.
What is the Value of a Brand?
In the beginning, you might not need a strong brand to make money, but in the long term, your brand is your most valuable asset. In finance, the “goodwill” value of a company is its value beyond physical assets, debt, and multiples of revenue. In marketing, we use the term “brand equity” to describe the strength and value of a brand.
The consulting firm Interbrand (http://www.interbrand.com) annually ranks the top global brands in value. Here are their Top 10 brands for 2012:
I’m sure you’ve heard of all of them. More importantly, I’m sure you have an opinion or feeling about most of these brands, even if you’ve never used their products. That’s why a brand is more than just the customer experience: it also creates impressions on non-customers.
Why should you have a strong brand? Here are a few reasons:
- Instill trust: If people recognize your brand, and it has a good reputation, they are more likely to try one of your products. For example, imagine that you are in a strange country and you get thirsty. You go into a store, and you see numerous brands of soft drinks that you’ve never seen before. Then you see a can of Coca-Cola. It might cost more than the other sodas, but you’re willing to pay more for trust. If you’re an executive, consultant or professor, having a strong brand helps others trust you.
- Command a higher price: Consumers are generally more willing to pay a higher price for branded merchandise. Starbucks, for example, can command a higher price for a cup of coffee than a generic coffee shop can. On a personal level, if you have a strong brand as an executive, you’ll command a higher salary.
- Attract top talent: It’s easier for a top brand to attract job applicants – and to pay them less. (Here in Los Angeles, Disney is notorious for its low salaries, because “everyone wants to work for the Mouse.”) Because they attract top talent, the top brands generally have better products and operations, which help reinforce the brand.
- Differentiate: A strong brand helps distinguish you from competitive products. The Nike logo helps to distinguish its shoes from other shoes on the shelf. A Pixar movie attracts attention in a theater filled with 20 screens. And if you’re applying for a job, a strong brand gives you an edge over other applicants.
- Generate publicity: A strong brand does not need to spend as much on promotions because it is already well-known, and journalists are ready to report on anything the company says or does. Apple, for example, has reporters and bloggers competing to be the first to announce any Apple news. Warren Buffett can give a speech, and everyone will listen.
- Attract investors: Stocks of recognizable brands usually trade at a higher value than unknown brands, even if the company is not performing well. An entrepreneur with a strong personal brand will quickly attract the interest of venture capitalists. (I’ve heard VC’s say that they don’t invest in companies; they invest in people.)
How Do You Create a Strong Brand?
As mentioned, you can shape your brand by modifying your voice and design. Right now, you are all modifying your brands by getting an MBA, which will enhance your resumes and, ideally, your reputations.
For companies, every element of the marketing mix can also shape the brand:
- Product: Obviously, product quality affects the brand, but also think of its packaging and service (particularly service!).
- Price: High prices are associated with high quality in the minds of consumers, as in the case of automobiles. They also position a brand as more luxurious. However, if prices are too high – particularly with necessities such as health insurance – they can generate negative brand equity.
- Place: If your product is distributed through an elegant store or a trendy nightclub, that helps shape your brand. Indeed, some top brands will not allow their products to be sold through “lower class” retailers in fear that it will hurt their brands. Nike, for example, will not let its shoes by sold in Walmart. In addition to retail location, country of origin is also important. RKC’s roots in Switzerland help its brand more than if its roots were in North Korea.
- Promotion: Advertising is a very fast – and expensive – way to express your voice and style. If done correctly, advertising can enhance your reputation. If done incorrectly, advertising can hurt it. Public relations is critical in shaping perception through the news media. One of the most effective ways to enhance a brand is to partner or cross-promote with another company that has strong brand equity. That’s why many businesses partner with a charity or nonprofit organization.
Managing the Brand
For a brand to be strong, it should be consistent across all media. You don’t want your TV commercial to have a completely different voice and design than your website. If your media expresses your brand inconsistently, that “brand disconnect” will just confuse people.
At the same time, you occasionally have to emphasize different aspects (or faces) of your brand to different audiences. For example, a company might want to appear rebellious to teenage customers, reliable to its investors, and responsible to the government.
On a personal level, people show different sides of themselves when they’re interviewing for a job, talking to their parents, going on a date, or playing with their children.
In this Internet age, it’s more and more difficult to keep those sides separate. It’s easy for American consumers to see how Nike is treating its workers in Vietnam, or Danish consumers to find out what deals Red Bull has made with the Austrian government. Individuals have to be careful about what they post on their Facebook profiles or in their blogs because employers and even some governments scrutinize these media. That’s why having consistent values, and expressing them consistently, is so critical today.
The conclusion is that a brand not only needs to be built, it also must be carefully managed. If you allow your reputation to be destroyed, all that time and money spent to build it will be lost. An MBA is meaningless if you’re arrested for financial crimes. An expensive car commercial is wasted if the vehicle rolls over and kills people.
Managing the brand is a job that requires continuous surveillance of both internal and external factors. Are your workers treating customers well? Are environmental groups protesting your factories? Are your executives using company money for expensive vacations? Is your competitor running ads that ridicule your brand? Is someone on Twitter, Facebook, or YouTube spreading rumors or jokes about your company?
For a big company, that’s the job of more than one person. That’s why a company needs a vigilant marketing department, advertising agency, or public relations firm. Companies that say “we don’t do marketing” are leaving their brands to the mercy of the world. And that would make their competitors very happy. More Details>>>>