Pillar of Brand Success

Mystery lies in Branding  for many small to mid-market (SMB) companies. There are many opinions and methods as to how best approach it.

Top creative agencies have their own “proprietary” methods for crafting brand strategies. They have to, in order to position themselves against competing agencies. They use cool-looking graphics: circles, triangles, and flow charts to illustrate attributes, values, personality traits, and promises.

Deep down, SMB marketers know they should be putting more effort into branding, but many don’t know where to start.

The good news is, if you were to break down most agencies’ proprietary branding methods, you’d find many similarities.

If you’re one of the 90% of companies that don’t have the budget to hire top agency talent for your branding, don’t worry; with a little elbow grease and a good plan you can create brand Strategy  with Mid size Agencies . Solving the branding black box just takes a little learning and a strong commitment.

Brand Architecture is Your Brand Strategy Foundation

The key to your entire brand strategy is your brand architecture. Your brand architecture sets the foundation for all the other components of your brand, and aligns your brand personality traits, your means, your promise, your story, and your visual and operational requirements into a single unified structure.

Brands play on our emotions, so your brand architecture should uncover the specific emotions around which you might build your brand.

To create your brand architecture, follow this five step process:

1. Start by listing each of your product/service features. Then, list the benefits of each.

A feature is an element of what something does or what it is. For example, a car’s features may include a ski rack and an upgraded stereo system.

A benefit is a positive result that the feature delivers.

2. Now focus on the benefits. For each one, determine whether it’s functional or emotional.

A functional benefit is directly related to the functionality of the feature. Example: An upgraded stereo provides higher-quality sound.

An emotional benefit is one that evokes a feeling or emotion. Example: An upgraded stereo might make the user feel like a rock star.

3. Next, review each feature and benefit individually, and determine its level of importance to the market. Assign each to one of three categories:

Expected: These are basic and expected; a customer won’t buy without these features or benefits. Every product/service in this category must offer these features.

Adds value: Not expected, but most customers probably won’t purchase based on this factor alone. Nevertheless, it helps differentiate your product/service from those of your competitors.

Will buy: Customers will choose you over your competitors based on this feature/benefit alone – it’s just that valuable.

4. Few brand architectures are built around features, but by including them in the rankings, we emphasize the importance of focusing on benefits and, more specifically, emotional benefits that cause people to desire your offering on a visceral level. The final step is to identify the emotional benefits that will become the core of your brand strategy.

Typically, you should focus on the highest rankings for the architecture of your brand. Evaluate all of those with a ranking of 6 or higher. You might decide to include a few functional benefits with the emotional benefits.

Carefully consider the functional or emotional benefits you select for your brand architecture. You’ll spend a lot of resources to convey these to the marketplace, so test them amongst your team and your market if you’re unsure.

After you’ve decided on your brand architecture, you can begin thinking about the other components of your brand strategy: your brand personality traits, your means, your promise, your story, and your visual and operational requirements

A good name is better than riches. Don Quixote

                                        The Datsun –Becomes –Nissan Story

                                      

In 1918 a Japanese automobile firm soon to become Nissan produced a two –Seat automobile they called Datson ---“the son of Dat”. In part an acronym, this name reflected the initials of a car’s three main financial backers: Den, Aoyama, and Takeuchi. The name was later changed to Datsun, in part to avoid confusion with a similar word which in Japanese meant “to lose money”

When the firm returned to making cars after World War II , they chose to market them in Japan under the name Nissan .However, in 1961 the U.S car market was entered under the old Datsun name –perhaps in part to minimize the Japanese relationship . By 1981 the name Datsun  was used not only in the U.S. but in many other countries, even though the firm was marketing it’s cars , trucks , and other products  under the name  Nissan in Japan . In fact, the awareness level of Nissan in the U.S .was only 2% as compared to 85% for Datsun  name. The decision to change the name from Datsun to Nissan in the U.S was announced in the fall of 1981. The rationale was that the name change would help the pursuit of a global strategy. A single name worldwide would  increase  the possibility that advertising  campaigns , brochures , and promotional materials  could be used  across countries  and simplify  product design and manufacturing .Furthur potential  buyers would  be exposed  to the name and product  when travelling to the other countries .

During the year 1982 -1984 the change was implemented. The products were changed gradually. On 1982  model  the Nissan  name appeared  on the cars Front Grill  while the rear carried the Datsun  name on the left  and the Nissan  name on the right . Other Datsun models   simply had “by Nissan” tagline. A lot of cars were thus sold with both names on them. 1983   some models were switched over completely. For example with the 1983 model of Datsun 510 was replaced by the Nissan Stanza. It wasn’t until 1984 line that the entire transition was completed

Advertising was of course the corner stone  of the name –change  effort. The successful “Datsun :We Are Driven “ which  was initiated  in 1977 and had a $60million budget  in 1981 , was dropped . In its place appeared a “Come Alive , Come and Drive: Major motion  from Nissan “ and “Major Motion :The Name Is Nissan “ set of campaigns supported  by a budget which grew $120million  in 1983 to $180million in 1987 . Around $240 million was estimated spent on advertising implementing the “The Name Is Nissan”campaign . The enlarged advertising budget was undoubtedly in part due to the added mission :to register the new name. It seems very likely that “the Name Nissan “campaign with its name registration mission was considerably less effective than the successful Datsun campaign it replaced.

The most incredible aspect of this story is the resilience of the Datsun  name. In the spring of 1988, a national survey found that the recognition and esteemed of Datsun  name was essentially the same as that of the Nissan name, despitr the irtual  absence of the Datsun name from the  commercial scene for Five years , and money effort placed behind the Nissan name.

The greatest potential cost of the name change was the bottom-line effect upon sales . Nissan saw its sharp drop from 5.9%  in 1982 to 5.5% in 1983  and 4.5% in 1984 –a loss of 1:4  share points as compared to the 0.9% share points that Toyota lost during the same period . However during the time period there also were import restrictions, some quality problem with the Nissan Line and growth in the Honda Line . Thus it is impossible to determine precisely to what extent the sharp drop was caused by confusion of the name change ---yet that surely was a contributory factor of some notable degree.

The cost to change the name could have easily have exceeded half a billion dollar and probably was much more . First it is known that the operational cost, including changing signs at the 1, 100 dealership, cost  around $30million . Second one may assume that $200 million was spent in advertising between 1982—1984 because of the name change, and that $50million was wasted because the “Datsun We Are Drive” campaign was prematurely stopped. Finally, assume even that .3% market share was lost for three years period because of the buyer confusion. That loss alone would represent many hundreds of millions of dollars in marginal profit. And the cost would  go much higher  if the reasonable assumption were made that the name change  has had effects that lingered into the nineties

                                   

                             

                             THE

Luxury A WAY OF LIFE

Dressed for the occasion, you face a group of equally polished people across the negotiating table. They grill you on your background, your career, your income and your prospects. Satisfied with your replies, they sit back and smile. You are in.

Is this a job interview? A visa application? Perhaps a matrimonial enquiry? Actually, it's "none of the above". This is a potential luxury homeowner being vetted before his purchase is approved.

For hundreds of years, something defined as "luxury" was something that was so well produced, so exclusive, and thus so expensive, that only the few - the elite - had access and the financial means to afford to buy it. Luxury was marketed to the rich as being a part of their social fabric, and to everyone else as being nothing more than an aspirational ideal.

Along the way, the democratization of "luxury" has lead to an erosion of what the word "luxury" truly represents in today's marketplace.  As luxury brands diversify, what was perceived as luxury is no longer all that exclusive as it's now accessible to all. 

Here's an interesting stat - As of last year, 40% of the Japanese population own at least one product made by Louis Vuitton.

40%! 

Because of this, the Japanese account for over 40% of all luxury sales, more than Americans (17%) and Europeans (16%) combined. 

So today's prospective of Luxury is Brands and logos .

GLOBAL vs LOCAL

When launching a product in a market  do you standardise or adapt your marketing mix to the market? A company can adopt to use a standardised marketing mix around the world or an adapted marketing mix in each country.

Standardisation Vs Adaption

So what should an organisation do? Adapt or sell a standardised product? Basic marketing concepts tell us that we will sell more of a product if we aim to meet the needs of our target market. In any markets ,we have to take into consideration consumers cultural background, buying habits, levels of personal disposable income etc in order to deliver a tailored marketing mix program to suit their needs.

The arguments however for standardisation suggest that if you go through the process of adapting the product to local markets it does little but add to the overall cost of producing the product and weakens the brand on the global scale. In today’s global world, where consumers travel more, watch satellite television, communicate and shop internationally over the internet, the world now is becoming a lot smaller. Because of this there is no need to adapt products to local markets. Brands such as Coca-Cola, MTV, Nike, Levis are all successful global brands where they have a standardised approach to their marketing mix, all these products are targeted at similar groups globally.

In many circumstances a company will have to adapt their product and marketing mix strategy to meet local needs and wants that cannot be changed. Mcdonald is a global player however, their burgers are adapted to local needs. In India where a cow is a sacred animal their burgers are served with chicken or fish. In Mexico burgers come with chilli sauce. Coca-cola is some parts of the world taste sweeter then in others. Yes we can argue that standardisation is better for the organisation because it reduces cost, however many organisations will have to ‘think global, but act local’ if they are to successfully establish them selves in foreign markets.

As with international product decisions an organisation can either adapt or standardise their promotional strategy and message. Advertising messages in countries may well have to be adapted because of language barriers or the current message used in the national market may be offensive to overseas residents.

The use of certain colours may also need to be thought about. In India red is the colour worn by the bride in weddings, white is the colour for mourning in Japan. The level of media development has to also be taken into account. Is commercial television well established in your host country? What is the level of television penetration? How much control does the government have over advertising on TV and radio? Is print media more popular then TV? Many organisation go for a strategy of adapting advertising messages to local markets to best meet consumer demand.

Global  Pricing Strategies

Pricing on an international scale is difficult. As well as taking into account traditional price considerations (see marketing mix pricing) i.e.:

Fixed and variable costs,

Competition,

Company objectives ,

Proposed positioning strategies,

Target group and willingness to pay,

the organisation needs to consider the costs of transport, any tariffs or import duties that may be levied on their product(s) when they are sold on the international scale. Also what currency do you expect to be paid in? Will it be home or international currency? Exchange rate fluctuation will also impact profitability and influence pricing decisions.

Other factors to consider include local incomes, what are income and PDI levels. What is the general economic situation of the country and how will this influence pricing?

The internet is now making pricing more transparent for consumers. Goods can be purchased online from any overseas organisations at local currency prices, a prime examples is dvd’s which are purchased from sites like www.dvdsoon.com which deliver internationally.

International Distribution Strategies

A standard distribution channel in the UK may go from a Manufacturer, wholesaler, retailer to consumer or direct from a manufacturer to a retailer. In an overseas market there may well be more intermediaries involved. For example in Japan there are approximately five different types of wholesaler a product goes through before the product reaches the final consumer. In your international market , is it dominated by major retailers or is the retail sector made up of small independent retailers? Is internet distribution common for your product.

How to Create a Brand Positioning for a Small Business--

While big corporations spend millions of dollars promoting their brands, few small businesses and startup companies have taken the time to rigorously determine their brand positioning. Dedicate several hours of time and you can develop a company positioning to differentiate your brand and speak with a unified voice to the market.
1) Block out three hours for the meeting and gather your key employees in a conference room.

2)Hire an outside consultant or nominate one employee to serve as the moderator and note taker to capture all the ideas the team develops.

3)Brainstorm, brainstorm, brainstorm. Make separate lists of the way you want to be perceived by customers, investors, employees, and shareholders.

4) Create an honest assessment of your company's unique value proposition. Think about how your competitors would attack this value proposition, if they were talking to your customers.

5) List positionings you wish to avoid. Do you not want your cookie store to be seen as the local bakery? Or vice versa?

6)Analyze how your competitors are positioning themselves. Is your business differentiated from them in a way your customers care about?

7)Synthesize the results of your brainstorming session a few days after the initial meeting. Use the results to develop your positioning statement and the associated corporate messaging it implies.

8)Test the new positioning statement on customers, employees, and investors to confirm you created a good positioning.

9)Create action items in establishing your brand in the market place for your team to accomplish. Start small with yellow page ad placement/copy, work towards a goal of propagating your brand's position in anything that relates to your company, including collateral, invoices, etc.

5 Factors of Brand Positioning

.1 Brand Attributes
What the brand delivers through features and benefits to consumers.
2. Consumer Expectations
What consumers expect to receive from the brand.
3.  Competitor attributes
What the other brands in the market offer through features and benefits to consumers.
4.  Price
An easily quantifiable factor – Your prices vs. your competitors’ prices.
5.  Consumer perceptions
The perceived quality and value  of your brand in consumer’s minds (i.e., does your brand offer the cheap solution, the good value for the money solution, the high-end, high-price tag solution, etc.?).
Take some time to create a thorough picture of the current market and how your brand fits in that market to determine your brand’s current position.  If that’s not the position you want for your brand, take the necessary steps to change it based on the gaps defined when you analyzed the five factors above.
Do you use any other factors in your brand positioning definition process?