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Brand BasicsWhat is Brand?"Brand" is a psychological concept, the mental constructs in the minds of consumers which are associated with things they might acquire, use, experience, take part in, be associated with, or become. Brand manifests itself in names, symbols, terms, signs, designs, colours, sounds, images, scents, phrases, events, objects, animals, and people. These are all icons which give a brand its identity. When something is "branded" these icons are associated with a consistent set of attitudes, beliefs, and emotions. When used in marketing activities, they are anchors which both elicit consumer's recollections about the brand and devices around which further mental constructs can be built. The collection of icons and the specifics surrounding their consistent usage make up the "brand identity". The bottom line to all this is that a brand embodies specific "brand promises" and "brand values": promises which are intended to deliver benefits to certain target customers. When you pay good money to experience the brand, you expect certain benefits, consistently and reliably. You also are only interested in the brand in the first place because the benefit or value which it promises is of some relevance to you. Without these expectations being met, the brand has no credence to customers and is of no value to a business. Brand Personality"Brand personality" is a description of the context, qualities, and associations that are communicated to customers for them to integrate into their perception of the brand, and support the brand promise. (The "soft" side of the brand, but these qualities are often needed to build greater affinity and rapport with the target market). Two of the most important factors in a brand being successful is for it to be relevant to customers and differentiated from the competition. Other important considerations are the clarity and ease of understanding in brand communications, and (in most cases) the degree to which it captures the attention and sparks the imagination of target customers. Note that the same product or service can be branded in multiple ways for different target markets, even if these target markets overlap. There may be variations in packaging, distribution, and even pricing for these different markets, and different businesses will choose to market these variants in different ways: for some it will make sense to establish multiple, separate brands, in other circumstances it will make sense to create associated brands, perhaps in order to share costs or to spread the appeal of the core product across several adjacent markets. Conversely, a brand can be used to market multiple products and services to a single target market. The extreme form of this is where a company chooses to focus all its brand building investments on corporate branding as it believes that customers' attitudes, beliefs and feelings about the performance, identity, character, reputation, and/or quality and consistency of delivered customer experience of the company itself has an overwhelming influence on customer's preferences when they are deciding who to do business with. This approach does not exclude promotion of product lines, but is choosing to focus the majority of image-building investments at the company, rather than the product level. It is most commonly found among business to business (B2B) companies and professional and financial services firms. Some additional clarification of terms used in the brand world may be of use: What is Branding?"Branding" refers to the process of deciding what promises to make, what values to associate with the brand, and what icons (of all forms) will comprise the identity of the brand. "Brand building" is the process of generating awareness of the brand and building up attitudes, beliefs and emotions about the brand in the minds of target consumers. "Brand equity" is what you end up with as a result of this process: conceptually, it is the size of market preference for your brand and the strength with which awareness of the brand's identity (and acceptance of it) has been embedded in the minds of the target market (otherwise known as "Brand affinity"). Brand equity is very closely linked to the concept of customer franchise. A strong customer franchise is what you get when people develop a preference and loyalty to your brand. When a monetary figure is put on this positive type of brand equity, this is called "brand valuation" (see below) Brand Image"Brand image" is slightly different - it refers to the perception that customers have of a brand as a result of both planned and unplanned impressions and experiences. On the planned side is obviously a business' brand building efforts and possibly the corporate image-building and reputation management efforts of the businesses making, selling, distributing, and/or delivering the product or service. Unplanned contributors to brand image may include customer experience that is at variance with brand promises; customer experience of other people's products and services which have a spill-over effect onto perceptions about your brand; highly publicised negative customer experiences (perhaps courtesy of your competitors); changes in customer sentiment or fashion - especially if your brand has a high emotional element but not very strong brand equity; rapid market development / an increase in customer sophistication, perhaps caused by competitor activity or media interest; the utterances of opinion leaders who are shifting their views and/or recommendations; unexpected technical breakthroughs resetting customer expectations; political, environmental and environmental events and commentators; and so on. In short - the impact of the real world. Part of the challenge of brand management is to minimize the risk of any of these unplanned contributions negatively impacting brand image, whenever it is practical (and makes economic sense) to do so. Businesses with very strong the brand equity, are less likely to be severely impacted by the occasional negative contribution, though no brand is immune from certain disasters. "Brand value" or "Brand valuation"Two expressions which refer to the same thing: an estimate of the monetary value of a brand, related to it's future earnings potential. There are various ways of calculating brand value / brand valuation. The most publicised are used for Business Week's annual ranking of "The Top 100 Global Brands" and for WPP company Millward Brown's "BrandZ" Brand Equity study (confusingly, Millward Brown mean "brand equity" in a financial sense, not as we use it above). As with all such things, the calculated value will depend on the accounting assumptions made, and not least on the quality and objectivity of revenue and cost projections. For the financially-inclined, the calculation Business Week uses is essentially to estimate a company's revenues accredited to the brand, project 5 years earnings and sales for the brand, deduct operating costs, taxes, and capital allocations; discount at a rate derived from an estimate the strength of brand equity, market leadership, stability and market coverage to produce a net present value. Companies wishing to make their own estimate of brand value, perhaps across a portfolio of brands to judge where to focus investments, could do similar calculations. |
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