What is a brand?
A brand is a consistent, holistic pledge made by a company, the face a company presents to the world. A brand serves as an unmistakable and recognisable symbol for products and services. It functions as the “business card” a company proffers on the competitive scene to set itself apart from the rest.
In addition to differentiating in this way, a brand conveys to consumers, shareholders, stakeholders, society and the world at large all the values and attitudes embodied in a product or company. A brand fulfils key functions for consumers and companies alike.
The functions of a brand for consumers
- Brands play a role in terms of communication and identification. They offer guidance, convey an expectation of quality and so offer help and support to those making purchase decisions. Brands make it easier for consumers to interpret and digest information on products.
- The perceived purchasing risk is thus minimised, which in turn helps cultivate a trust-based relationship.
- A brand can also serve as a social business card, expressing membership in a certain group. Premium brands, for instance, can even engender a sense of distinction and prestige.
- Consuming certain brands is also a means of communicating certain values. By opting for particular brands, a consumer demonstrates that he or she embraces particular values; the brand becomes a tool of identity formation.
The functions of brands from a company’s perspective
- A brand fosters brand and customer loyalty. Particularly strong brands can establish the prevalence of premium prices on the market and soften consumer reactions to price changes. Specifically brand-oriented buyers – who are more concerned with brands than prices – are more resilient when it comes to changes in the competitive scenario. This decreased sensitivity to price changes makes them more valuable as customers.
- The reduction in perceived purchasing risk lays the groundwork for a relationship of trust, giving brands a role to play in lashing customers to a company.
- Brands can counter the swelling ranks of trade because dealers stock their shelves and fill their order lists with products explicitly requested by consumers. Strong brands in particular keep sales levels and market share constant and considerably lessen dependence on short-term special promotions.
- A brand unlocks great potential in terms of licensing opportunities as well, helping companies achieve plans for international expansion.
- Finally, brands also offer companies potential for honing a clear profile and overshadowing the competition. Strong brands in particular can reduce the ris
Importance on the concept of brand equity
Brand equity is the value and strength of the brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumers’ response to the brand marketing. Brand equity exists as a function of consumer choice in the market place.
The concept of brand equity comes into existence when consumer makes a choice of a product or a service. It occurs when the consumer is familiar with the brand and holds some favourable positive strong and distinctive brand associations in the memory.
Brand equity can be determined by measuring:
- Returns to the shareholders.
- Evaluating the brand image for various parameters that are considered significant.
- Evaluating the brand’s earning potential in long run.
- By evaluating the increased volume of sales created by the brand compared to other brands in the same class.
- The price premium charged by the brand over non-branded products
Factors contributing to brand equity
4.Perceived quality: refers to the customer’s perception about the total quality of the brand. While evaluating quality the customer takes into account the brands performance on factors that are significant to him and makes a relative analysis about the brand’s quality by evaluating the competitors’ brands also. Thus quality is a perceptual factor and the consumer analysis about quality varies. Higher perceived quality might be used for brand positioning. Perceived quality affect the pricing decisions of the organisations. Superior quality products can be charged a price premium. Perceived quality gives the customers a reason to buy the product. It also captures the channel member’s interest. For instance - American Express.
5.Other proprietary brand assets: Patents, trademarks and channel inter-relations are proprietary assets. These assets prevent competitors attack on the organisation. They also help in maintaining customer loyalty as well as organisation’s competitive advantage.
Five main steps for brand building
Customers experience your brand in numerous ways: products, packaging, price, marketing, sales personnel, etc. Each of these contacts or touch-points moulds the customer’s impression of the brand. Some of these touch-points are obvious, like product performance, and one-on-one customer interactions. Other touch-points, such as the product manual, monthly statements or post-sales support, may be subtler in their brand effects.
Your brand image creates expectations. It defines who you are, how you operate, and how you’re different from your competitors. In essence, your brand image is a promise - a promise that must be kept.
If the brand is a promise you make, then the customer experience is the fulfilment of that promise. The customer experience can’t be left to chance. It should be actively designed and controlled in a manner that enhances your brand image. It must consistently reinforce the brand promise across every customer touch-point or the value of the brand itself is at risk.
Here are five easy steps to building a strong brand and an optimised customer experience:
1. Identify your reasons to believe
Your brand promise is irrelevant if your customers do not believe it. Therefore, your promise must be supported by reasons-to-believe. This will automatically add substance to the promise and define specific expectations for the customer.
For example, an automobile manufacturer promises potential customers that Car XYZ is an “intelligent choice for serious drivers”. What makes it an intelligent choice? Why should the customer believe this promise?
To address this question effectively, the manufacturer could frame its promise with two reasons-to-believe... sporty performance and safety. These two reasons in essence define “intelligent choice” and clearly set customer expectations. They also give the company specific direction for designing the customer experience through tangible customer touch-points like vehicle design features, advertising campaigns, dealer sales approaches, and customer service activities.
2. Identify customer touch-points
Each individual step in your business process contains a number of touch-points when the customer comes in contact with your brand. Your ultimate goal is to have each touch-point reinforce and fulfil your marketplace promise.
Walk through your commercial processes. How do you generate customer demand? How are products sold? How do your customers use your products? How do you provide after-sales support?
This comprehensive trace of your marketing, selling, and servicing processes allows you to create a simple touch-point map that defines your customers’ experiences with your brand.
3. Determine the most influential touch-points
All touch-points are not created equal. Some will naturally play a larger role in determining your company’s overall customer experience. For example, if your product is ice cream, taste is typically more important than package design. Both are touch-points, but each has a different effect on our customers’ experiences as a whole.
To determine the touch-points driving your customers’ overall experience, your organisation can use a wide array of techniques ranging from quantitative research to institutional knowledge. The methods you use will depend on the complexity of your products, commercial processes, and your existing knowledge base.
4. Design the optimal experience
Once you have completed the above three steps to building a brand, you should be able to design your optimal customer experience. Here’s how:
Determine how to express each reason-to-believe at each key touch-point. For example, how can you reinforce sporty performance (a reason-to-believe) in product design, at the dealership, and in marketing campaigns (the influential touch-points)?
5. Align the organisation to consistently deliver the optimal experience.
A holistic approach to aligning your organisation to consistently deliver the optimal experience is essential. Identify the people, processes, and tools that drive each key touch-point.
Look beyond employees that have direct contact with your customers. The impacts of behind-the-scenes employees are less obvious but no less important. Similarly, the impact of workflow processes and tools (i.e. technology systems) on the customer experience may be less intuitive but crucial to consistent delivery.
Identify which activities don’t align with your envisioned customer experience. Determine how to address them so that these components can be brought into alignment.
The final word
Every product or service you bring to market yields a customer experience. Is it the experience you intend? Does that experience fulfil the promise you’ve made to the marketplace?
By identifying the people, processes, and tools that drive your customer experience, you can actively design and control your own, unique, optimised experience. The brand promise you make to the marketplace will be kept day in and day out across every key customer touch-point, building a strong brand.
(The writer is the Managing Director & CEO, McQuire Rens & Jones (Pvt) Ltd. He has held Regional Responsibilities of two Multinational Companies of which one, Smithkline Beecham International, was a Fortune 500 company before merging to become GSK. He carries out consultancy assignments and management training in Dubai, India, Maldives, Singapore, Malaysia, Indonesia and Bangladesh. Nalin has been consultant to assignments in the CEB, Airport & Aviation Services and setting up the PUCSL. He is a much sought-after business consultant and corporate management trainer in Sri Lanka. He has won special commendation from the UN Headquarters in New York for his record speed in re-profiling and re-structuring the UNDP. He has lead consultancy assignments for the World Bank and the ADB. Nalin is an executive coach to top teams of several multinational and blue chip companies. He is a Director on the Board of Entrust Securities Plc.)