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A Winning Brand Strategy

The EDGE, 11 April 2005

In today’s cluttered, deregulated and highly competitive markets, strong brands are vital for survival and success. They differentiate a product or a company from others through providing the one thing that a competitor cannot copy – image! Technology, systems, products and processes can all be copied.

Branding principles can be applied to any organisation, even public sector and non-profit organisations. All brands compete for a share of mind from their target audiences, and building a brand means building a relationship between the company, or its products and services, with its customers.

Yes, brands are relationships. The world’s powerful brands establish trust and friendship with their customers. They develop emotional capital, gaining share of heart, and this is what makes them great. So how do the great brands create this relationship, because it does not happen by chance?

Creating the heart of a brand – brand identity
There are three components that all powerful brands create and bring together to form a strong brand identity – the sum of all the things that the company wants it to be seen as. This involves the tangible aspect of product, design, features and attributes, and the intangible items of how they want people to feel about the brand. Led by the brand vision, the personality and positioning process tends to drive the identity.

Brand vision: Companies must develop strong visions for their brands that define emotionally what they want to stand for in the minds of consumers. For example, Nike appears to stand for “winning” and wants people to get the best out of themselves whether they are involved in sports or not.

Once a company has an emotionally defined vision, it has to develop a personality to drive that vision and position itself to appear different from the competition.

Brand personality: Power brands use personality characteristics as their brand values, with words such as “inspiring”, “energetic”, “passionate” and “helpful”. These are easier to promote and better accepted by staff and consumers than words like “customer-centric”, “integrity” and “quality”. Great leaders have charismatic personalities; so do great brands.

Brand positioning: Each company has to answer two basic questions that consumers ask, namely “Why are you different?” and “Why are you better?” If a company cannot define its competitive advantage in this way, it will find itself in the commodity trap, fighting on price. AirAsia may appear to be fighting on price but it has a value-for-money strategy based on cost leadership. Its brand positioning of “Now Everyone Can Fly”is compelling to millions of people, generating emotional ties.

These three things form the heart of a winning brand strategy. If crafted and delivered purposefully, the company will be in a winning position with an attractive brand image.

Brand image
Crafting a powerful brand identity does not necessarily mean that the image of the brand is equal to it. A brand’s image is how consumers perceive the brand and this may not be the same as how the owner wants it to be seen. If there is a gap, then it has to be closed. It is important to note that without a world-class product or service quality, a strong brand image is impossible to create.

A brand image reflects back on the brand owner, and the trend is for brand owners to attach their names to their brands, but there are some alternatives.

What branding options are there?
There are basically four options for companies in choosing how to present their brands to the market – corporate branding, shared branding, endorsed branding and product branding.

Corporate brands use only the parent name and relegate products to letters and/or numbers, for example with BMW and Nokia. They focus on corporate brand name value and realise they have more room to move across categories. Pensonic is a local example whereby the corporate brand dominates the functional products, such as blenders, toasters, fans and so on.

At the other end of the continuum are companies that brand products and leave out the corporate brand name, such as Unilever and Procter and Gamble, which own products like Lux and Pampers. They make each product brand stand on its own so that if it fails, it will not reflect badly on the company image, and they can address different market segments.

In the middle are two more options, the first of which is where a shared branding approach is used but which always puts the corporate brand first to add trust to the product and value to the corporate brand – Intel Centrino and Nestle Milo are examples.

Finally, there are companies that merely endorse their brands like Johnson & Johnson and its Band Aid product. The product brand name features strongly and the company takes a back seat. But still the customer is reassured of the brand’s origin. Hotlink from Maxis is a local example.

There is a global trend away from stand-alone brands towards some form of corporate branding. This not only saves money, as branding something new and unknown takes a lot of dollars, but also enables faster brand awareness, preference and trust.

The rewards
Strong branding brings many rewards including the following:

Differentiation from competitors – really standing out from the crowd;
Premium pricing – people will pay more for the brands they really want.
Petaling Street is okay for some, but a lot of people want the real thing;
The increased and stable demand from satisfied customers and
referrals, which generates...
Lower unit costs and economies of scale; and
Above all, successful branding delivers the numbers and consistent stock
market performance. Some brand names are worth multiples of the net
assets of their corporate owners.

These rewards are what every CEO wants, but a brand has to be managed consistently over time to get them, and managing the brand is critical. Brand management is a tough process as markets are changing fast, and so are the needs, wants, and lifestyles of people who buy them.

How to manage a brand successfully and track its success will be the subject of forth-coming articles in the series.