The world of branding is changing fast and brand managers are struggling to keep pace. They face mounting pressures from stakeholders to perform better in the midst of more aggressive competitive attack and rapid changes in customer needs, a burden further compounded by the volatile financial economy, the accelerating speed of technological progress, stronger demand for companies to account for their social responsibility, and the emergence of the networked society. Some brands have not survived these challenges, but might have if they had been managed with greater speed, flexibility and foresight. This article outlines the main challenges facing brand managers in a rapidly changing world.
Brand Management Challenges
It is now absolutely clear that product parity is impossible to avoid. With the availability of technology and ease of accessibility to various processes and procedures, any product can be replicated within a short timeframe and product differentiation is no longer a competitive advantage. This has triggered an architecture swing away from product branding to corporate branding, where differentiation is easier to accomplish, but where overall control of the brand image is more difficult.
The lure of corporate branding remains strong however, as not only can products be copied, but most business activities and developments too, and this leads to the conclusion that the only viable long term competitive advantage companies can rely on is a strong brand. A company’s brand image cannot be replicated in its entirety by competitors, and the stronger a brand image is the stronger its differentiation, alongside other benefits. For instance, if a brand is strategically well managed and differentiated it is more likely to develop a strong emotional relationship over time with customers, enjoy their trust and loyalty, and grow in financial value. To reap these benefits brand managers have to do three basic things very well – understand customers, give them what they want, and be their friend.
Successful global brands like Apple do all three, achieving strong emotional connections with customers by understanding their needs and wants, and delivering on these with speed, agility and innovative design, and generating pure desire. Others like Zara, the ‘instant fashion’ brand, achieve the same emotional result by impeccably managing the supply chain to give consumers more options and opportunities to shop, by moving from design to in-store availability in 5-6 weeks compared to the average industry norm of 4-6 months. This brings customers in to Zara stores an average of 17 times compared to the industry’s 3-4 per annum. They love the brand and the sense of exclusivity it gives them at affordable prices.
Successful brands are also better at creating and sustaining a distinct positioning in the minds of their customers. Multiple positioning strategies are available, but there is a growing trend towards addressing ethical and environmental concerns as a sound platform as a direct result of global concern from consumers who demand of corporations that they and their brands become more socially responsible and accountable. Some companies such as Innocent Drinks have made this a part of their brand essence proposition; others, oil and gas companies in particular, have us wondering if they are really sincere about keeping their environmental brand promises.
All of the brand management issues mentioned remain significant, but the real ‘game-changer’ is that brands now have to develop their relationships with consumers through new media. A global tectonic shift has occurred in the way consumers build relationships and communicate with each other called ‘the networked society’, driven by new and innovative digital communications platforms. Commercial democratic power lies now with consumers, and for brand managers this means that they must build emotional brand strategies that connect with and are relevant to consumers increasingly online as opposed to offline.
New Media and the Networked Society
Brands are fundamentally relationships, and so the work of brand managers is always directed towards building and maintaining really good, emotionally sustainable relationships with customers. Essentially, this is about capturing ‘share of heart’ from which ‘share of wallet’ duly follows, as when a brand appeals to the hearts of people they usually become loyal and happy customers and, importantly, brand advocates.
The traditional means of relationship-building for brand management has relied on communicating directly with the consumer via advertising and promotion but this has changed as fast as the networked society has grown. The rapid progress in Internet technology has totally changed the way in which people communicate and develop their friendships and relationships. That same trend has also generated more innovative options available for brands to establish and cultivate their relationships with their customers, but this has not made the brand manager’s job easier. On the contrary it has made it harder.
The huge global growth of social networking platforms has totally changed not only the way in which people communicate, but also how brands have to communicate with people. Facebook, for example, is so successful it now has over 400 million members but is less than five years old, and such social media platforms present brand managers with huge challenges. Whereas advertising, promotions and public relations activities tended to dominate conversations with consumers in a monologue fashion, consumers now discuss and build or destroy brands on networking sites where – and this is of critical importance – brands are not invited into their conversations. It is no longer a one way street; in fact it is not even a two way street unless brands manage to gain entry to these conversations, and often it is hard to do this, and brand managers are forced to abandon old-fashioned marketing communications plans and find innovative ways to create interesting networking opportunities for consumers that they – not the brand owners - want.
For example, Coca-Cola now makes itself available to its “fans” via Facebook, YouTube, blogs, Second Life and other digital networking platforms. Prada and Victoria’s Secret provide other examples of brand management extending beyond the physical into the virtual world of the consumer in the networked society. The brand-customer touch points have changed and this has transformed brand management.
Some Things Never Change
I have commented a lot about the changes that have taken place in the world of brand management, but some things never change. In providing customers with great experiences, it would be remiss of me not to say that relationships with customers cannot be cultivated if the brand culture of the company is weak. Building a strong brand culture is imperative in permeating the brand identity to customers. In the physical world, the Virgin Group, Philips and Intel are examples of power brands that pay strong attention to building a consistent brand culture within their organizations, whilst in the virtual world, Google (now the world’s most valuable brand) and others are doing the same. Indeed, with an appealing brand culture cascaded down to every employee, these brands are able to reach out effectively and create consistent and enjoyable brand experiences for their customers via every touch point whether online or offline. In short, branding becomes everyone’s responsibility in the organization. Given this, the CEO of every organization should rally every employee to live the brand by deploying various activities, policies and management structures to reinforce a strong brand culture.
A second constant in brand management is quality. Without top quality in product and service, any brand will ultimately fail or have significant problems, the most recent example of this being the demise of the Toyota brand image.
The third main factor that has not changed is the need for brand managers to remain strategic, while at the same time meticulously managing the day-to-day detail of brand management activities. Every touch point counts.
In conclusion, brand management has become much more challenging in this rapidly changing world. Companies that continue to manage their brands as they always have will fall significantly behind or face extinction. Those companies that stay relevant to customers, provide what they want, and engage them in ways that provide wonderful experiences will survive and succeed.
Dr. Paul Temporal,
Group Managing Director,
Temporal Brand Consulting
For more in-depth analysis and information see Paul Temporal’s new book, Advanced Brand Management: Managing Brands in a Changing World (John Wiley & Sons,) 2010