What is a brand? What do they do? Why are they important?

The term “brand” originated from branding cattle, leaving a mark of ownership. Larger companies manage their identities for competitive advantage, solving problems and leveraging change. A brand’s image is the consumer’s perception. Sometimes this perception is assumed but often it is a product of marketing messages, communications and brand experiences. (Gil Bashe)

What exactly defines a brand? Is it a logo? Is it a color scheme? Is it a slogan? A tradition? A promise? A brand is made of all these parts and more.  Many small elements go into branding. Some brands are built around one of these aspects while many are created around a combination of pieces to make a successful whole. Eric Berkowitz defines a brand as “any name, term, colors, or symbol that distinguishes a seller’s product from another.”

Brands identify a company, its products and most importantly, its promise and perception in the mind of the consumer. Brands are important because they are the first impression a consumer has when they need a company’s product or service. A consumer might go for years without needing or buying a car, but when the time comes to shop for a car, they will recall what comes to their mind first for certain brands – quality, safety, luxury, etc. They might buy a Coca-Cola because they remember it from their childhood, or a Coors Light because it was the first beer they shared with their dad.

Brands create value because it is one of the easiest ways for consumers to evaluate their purchase decisions.

A brand is a promise and a symbol of trust. Once a product or service fulfills its customers and incites repeat business, consumers develop loyalty to a specific brand. Some of the most successful brands are built on a promise of consistency. Customers know what to expect when they order a Big Mac, and McDonald’s delivers the same product/experience at every one of their locations.

Brand loyalty is a result of keeping the brand promise and always giving the consumer what they want and expect. When customers start to promote products and services they consume and love, and become ambassadors for the brand, the customers become the marketers.

I’m a runner, so some of my favorite brands are for shoes or apparel. I have gone through many different brands of shoes and learned the hard way which brands are more dependable and comfortable. Brooks and Saucony are brands that serve me best – when I need a new pair of running shoes, I immediately look at these two brands. Another brand of apparel that I have become loyal to is Under Armour. I have UA apparel for all seasons because I know the brand is a leader in running fabric technology, and I associate the positive experience of being dry and comfortable (and warm in extreme winter temperatures). This positive experience in my mind makes the UA brand first on my list of choices when I am shopping for new running clothes.

Brands should definitely be on the balance sheet in some form because they have substantial value for companies, products and services. They directly affect the bottom line and consumer behavior that builds sales/customer loyalty.

References

Bashe, Gil, and Nancy J. Hicks. Branding Health Services: Defining Yourself in the Marketplace. (2000). Aspen Publishers, Gaithersburg, Maryland.

Brands and the mix

The first brand that comes to my mind that is highly effective in bringing all of the elements of the marketing mix together is Bose. When I was in high school, I remember being drawn into Bose experience. I was not the typical Bose customer, however - most were older consumers with disposable income. The tangible product was a sound system that filled the room with vibrant sound, but not stereo equipment and speakers.

Bose distributes their products through Bose stores with staff that are knowledgeable of the product and the company also provides service to their products. Bose products are also sold through approved vendors at a price that is controlled by the manufacturer (I learned about this the hard way when I could never buy the Bose product I wanted on any sales). Since Bose controls the price and the place, the brand can establish a better sense of value in the consumer’s mind. I knew when I was shopping for Bose, that since the price was the same everywhere, I could focus on their product and the benefits instead of where to go to find the best deal. I also knew I was getting a valuable product. The store also allows consumers to come in an experience the products before they buy, which is a key to selling many products. It also gives an opportunity for trained staff to educate the consumer on benefits and why Bose products are better than the competition.

Another interesting twist on the place portion of the marketing mix is auto manufacturers that equip cars interiors with Bose sound systems. This is directly related to price and demographics because these systems are usually only offered in expensive luxury vehicles.

Another smaller product that was created to appeal to consumers of slightly less disposable income of those who buy the complete systems is the wave radio. It was designed to be a one piece product, small self contained radio that would perform like a large stereo system.

Bose later entered into a new market by producing headphones. These products were tailored towards younger consumers. The price point is appealing to those who don’t want to invest in a premium Bose speaker system, but is substantially more expensive than average consumer-grade headphones.

Bose communicates the message of the benefit of real life, premium sound that fills the room. Bose messaging also conveys status and quality.

I will add on to a topic from my previous blog entry including iPods and Apple. The Apple brand is innovative and always one step ahead of the competition, a true pioneer. Apple Macintosh computers have been a huge player in commercial and personal computer technology and the iPod became a household name and a “must have” for many consumers of all ages, and iPhone set the bar for cellular phones and smartphones. Steve Jobs introduced the iPad that most consumers didn’t even realize they wanted/needed until it existed. These are all tangible products the company offers, which lead to the experience benefits. One thing Apple is known for is controlling the entire experience for their customers. This starts with sleek, stylish, modern hardware that continues with software including iTunes for iPods and apps for mobile devices This allows Apple to not only grasp market share, but control every aspect of the product. 

Apple products have many specific targets such as active people for iPods and very specific customer targets for iPads. One unique example of a niche group for iPads that is growing is physicians using the tablet devices for electronic health records. Specific targets and apps allow Apple to tailor their products to these various target markets with different needs.

Price and place are controlled through Apple stores and “approved re-sellers” which are select stores that are allowed to carry Apple products. Apple stores provide complete customer service with “geniuses” and consistent pricing similar to Bose.

It is safe to say that Apple has brand recognition - when people see the logo, they have a vision of a product and experience in their mind already. Steve Jobs was a pop star of invention that personally introduced his company’s products during unveiling events that created media frenzies. Apple has a lot of loyal customers who continue to buy many products so this communications approach is a good way to reach target markets.

Product Life Cycle

The “Product Strategy through the Life Cycle” is greatly affected by shorter product life cycles. Consumers are always seeking products that are newer, faster, better, cheaper and competition is always pushing new innovations onto the market – especially when it comes to electronics and mechanical products. Discoveries of new stronger materials have improved many products – conversely, some products are made and marketed to be used once or disposable. Consumers have created a throw-away society and are continually buying new products.

Technology factors into the continuous improvements and evolution of products (and services). Advances in electronic technology, digital media and Internet/smartphone platforms have essentially created a continuous change in product development. Consumers (especially early adopters who want the latest and greatest) struggle to purchase a product that isn't outdated the very next day.

Fierce competition to develop the latest product and trends has made much shorter product life cycles. Short life cycles present a challenge to marketers to determine needs of consumers and create messages to sell the new products or services. Marketers must make special considerations for marketing high tech products or services. Sometimes the consumer doesn't even know they need or want a product until it is developed (such as the iPad). Brands must also continually convince consumers that the product is newer, faster, cheaper – BETTER than the competition. 

Product levels and evolution

Product levels
Products that are near and dear to my heart are movies. If I have a rough day and want a laugh, I find a good comedy. If I have a date, I might choose a romantic movie or “chick flick” to share. Sometimes I am just in the mood for some action to escape my mundane daily routine. Sometimes movies help me to reminisce on memories from my childhood or friends. The content of these movies - the experience or feelings they evoke - provides a benefit to me. This entertainment value is the CORE level of the product, whether I am in a theater, at home or watching on the computer.

DVDs and Blurays represent the ACTUAL PRODUCT or tangible object of the movie. High definition picture quality and supreme digital sound add to the experience benefit. Technology has also allowed consumers to have a home theater with large screen and sound system – for the benefit of the “going out to the movies” experience in the comfort of their own home.

This leads to the third level - AUGMENTED products or services beyond the core and actual products. Some examples would be Redbox, Netflix, iTunes or cable on demand providers that can allow convenient viewing of movies whenever the consumer wishes. These types of services have rendered many brands (like Blockbuster and other movie rental stores) obsolete.


Product evolution – becoming obsolete
A product or “tool” that has gone through many variations in its lifetime is personal audio, or music media. Transistor radios allowed consumers, for the first time ever, to take a device along with them anywhere to enjoy music. Transistors got smaller and advances in circuit technology allowed for even smaller devices.

Photo: Gizmodo

Sony was one of the pioneers in mobile audio with headphones with the Walkman. These devices became popular in the 1980s with the ability to play cassette tapes (allowing consumers to choose their preferred music/artist). In the early 1990s the “Discman” allowed consumers to listen to compact discs (CDs) which saturated the market. Portable CD players offered limitations – vibrations would cause music to skip and CDs had a limited content capacity. Sony attempted to address these issues with the mini disc (MD) platform that didn't catch on among mainstream consumers, and quickly became obsolete.

Along came the iPod – and a series of paradigm shifts. Apple’s groundbreaking product allowed consumers to carry their entire music collection with them on one small device, with long battery life, no skipping and embedded information about the music. The iPod completely changed how music was consumed. It also revolutionized how music was purchased, marketed and even produced. The iPod would be the beginning of the iTunes music store, and completely change how consumers shop and purchase music – which would lay the groundwork for the iPhone.

At the turn of the century, iPods became the “standard” method of music consumption for consumers. Apple established itself as the leader in both hardware and software, with many other brands following suit and trying to imitate the popular device and digital music in general.

Throughout the evolution of the portable music device, cassettes and CDs have become inferior and obsolete due to convenience and cost of newer, more convenient and less costly products.

The digital media evolution has had the same effect on the photography industry – making film photography nearly obsolete due to cost and process. Digital cameras and camera phones have taken over as the fast, fun and “cool” option.

Positioning in the same space with different segment focus

Different companies compete in the same space with completely different targets or segment focus. From our Live Breeze session this week, we discussed headache/pain relievers and how consumers of different demographics, specifically age, have different needs. A young person may have a simple or major headache, pain from working out in the gym, or partying too much. An older consumer may seek out similar products for arthritis pain. Females also may have their own uses/needs for similar products. Drug manufacturers and marketers take these needs and values into consideration with their formulas, names and promotion. Some of these are specifically marketed towards older consumers with a container that isn't child proof.

Another product that comes to mind that is valued and viewed differently among a variety of consumers is the automobile. A 16-year-old simply wants four wheels and a gas tank to get from Point A to Point B – sometimes that same 16-year-old wants a sports car. The parent of that same 16-year-old wants their child driving the safest car possible. Some see their car as a status symbol and others simply want a red one. A consumer in their twenties has different style preferences than those in their sixties.

Sometimes brands are known for engineering, luxury and status. One brand that is known for all of these characteristics is BMW and is usually marketed towards those with higher income or older consumers. BMW is a good example of an auto manufacturer that has taken different approaches to market to different targets. BMW has vehicles that target the power-craving consumers as well as the economical/environmental drivers.

Demographics play a big role in automotive preferences. In areas with harsher winters, trucks and four-wheel-drive SUVs are more popular. In cities, consumers may prefer smaller, more economical vehicles. Family size and age can be a factor for determining preferred vehicle size. Some auto brands such as Volvo build their reputation around safety. This reputation and message appeals to parents with young passengers/drivers. Consumer research and purchase history can help manufacturers evaluate this market.

Fuel economy is a selling factor that has become more of a concern for consumers recently due to increased fuel costs. Some manufacturers have tailored their design and marketing to selling their car is fuel efficient. This is a challenge in the consumer minds to buy a car for better fuel economy when they may want a larger, more powerful option. Volvo has marketed their vehicle lines to get good fuel economy while still maintainingthe fun factor. 

Choosing a market segment and positioning

Once the marketer has a thorough understanding of consumers and segments, they choose specific segments to focus marketing efforts. Marketers consider consumers’ demand from each segment and also the competition in order to achieve the best possible sales results.

Companies collect data on product or service benefits and rate each group – then compare to competitor’s abilities to fulfill the consumers’ specific needs.

The first step is to eliminate any segments that cannot be easily or affordably reached and those which are outside the scope of the brand. Then, determine which segments offer the best opportunities and most possible profits. Then the marketers must assess how the brand will perform and compete in the market, while factoring in environmental threats. Marketers eventually weigh each segment, prioritize and develop strategies based on their evaluations.

After marketers choose target segments, they create a positioning strategy based on the previous market research. Positioning is highlighting a product or services benefits and differentiating it from any other choices in the consumers’ minds. Marketers determine one or more distinguishing characteristics of their product or service and develop a message to make the brand stand out. Positioning displays brand value.

Segmentation and consumer obsession

In order for marketers to get the best bang for their marketing buck and not invest time and resources to market consumers that will never respond, marketers dig deeper and focus on specific groups within a market. These smaller segments are based upon consumer behaviors and needs. 

One approach to market segmentation is to sort groups of consumers based on their specific behaviors that can be related to the product or service being promoted. Another method of market segmentation is to first determine the benefits of a product or service and then match to the needs of specific consumer groups. Sometimes one single product or service can have multiple benefits that may attract different consumers so the marketing has to be uniquely tailored to each of those groups.

This is consumer obsession at its finest – marketers step into the shoes of a concise group to determine their needs. Then they convince that group that their product or service will fulfill that need. The process begins with market research that reveals how consumers view specific products and services, and how they go through the decision making/purchasing process. Brands can adapt their marketing or even their product or service based on these findings.

Once the market is segmented and specific groups are targeted, marketers can create a profile of this consumer – often based on demographics. Then the consumer obsession turns to creating a message to reach the targeted consumers.

An example of consumer obsession segmentation is a recent development called Brandvantage (April 2, 2014) developed by The Pert Group. The research method is a unique study of how consumers make choices and factors in different life influences. It “helps organizations make more informed decisions on market segmentation, campaign development, creative execution, and more.”