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Branding - Your ID Mark and Logo

Recent statements made by Procter and Gamble's Vice President of Advertising Worldwide, Denis F. Beausejour (at the Spring '98 Ad-Tech Conference), and by Richard A. Goldstein, President & CEO Unilever United States (in a keynote speech at a Jupiter August 1998) give an intriguing insight into the way the world's two largest consumer products companies are looking at the issues of brands, the Internet, and brands on the Internet.

The significance of their views should also be considered in light of their organization's positions as the world's two largest advertisers. Unilever's global annual advertising and promotion spend (according to Goldstein) is around USD6 billion. Procter and Gamble's annual advertising only spend (according to Beausejour) is around USD3 billion.

The central question is why the major focus on brand? What in fact do we understand by the word 'brand'?

Brand guru David Aaker defines brand as follows;

'A brand is a distinguishing name and / or symbol (such as a logo, trademark, or package design) intended to identify the goods or services of either one seller or a group of sellers, and to differentiate those goods or services from those of competitors. A brand thus signals to the customer the source of the product, and protects both the customer and the producer from competitors who would attempt to provide products that appear to be identical.'

Advertising agency Ogilvy and Mather give an extended definition (from their online lexicon) which runs as follows;

'A product is tangible; it has physical attributes, including features, functionality, color, size and price. A brand is a composite of how consumers feel about a product, the personality they attribute to it, the trust they place in it. It is the relationship between the product and its user, the total experience a consumer has with the product.'

The suggestion here is that there is a consumer-to-brand relationship - that the brand is in fact so much more than the logo, name, or packaging. The brand therefore encompasses emotional as well as physical elements. Aaker includes these aspects within the brand's net worth - the 'brand equity' - which he defines it as follows;

'Brand equity is a set of brand assets and liabilities linked to a brand its name and symbol, that add to or subtract from the value provided by a product or service to a firm and / or that firm's customers. For assets or liabilities to underlie brand equity they must be linked to the name and / or symbol of the brand. If the brand's name or symbol should change, some or all of the assets or liabilities could be affected and even lost, although some might be shifted to a new name and symbol. The assets and liabilities on which brand equity is based will differ from context to context. However, they can be usefully grouped into five categories:
1. Brand loyalty
2. Brand awareness
3. Perceived quality
4. Brand associations in addition to perceived quality
5. Other proprietary Brand Assets - patents, trademarks, channel relationships, etc.

He then adds the following;

'to help ensure that the brand has texture and depth, a firm should consider its brand as: (1) a product (2) an organization (3) a person (4) a symbol.'

Aaker proffers that the brand should build a relationship with the consumer - that a brand's primary role is to provide a 'value proposition' to the consumer. He defines a 'value proposition' as;

'A brand's value proposition is a statement of the functional, emotional, and self-expressive benefits delivered by the brand that provide value to the customer. An effective proposition should lead to a brand-customer relationship and drive purchase decisions.'

The key significance and importance of establishing brands on the Internet is that this is the only way that customer relationships, trust, and loyalty can be established and developed. The Net has no physical presence. Goods sold cannot be walked back in to the store if they fail to satisfy. Three of the five senses - touch, taste, and smell - have no expression on the Net. Building enough trust with the consumer that they will transact with you, comfortable that their credit card will not be used fraudulently, can only be done on a global basis by building brand. A familiar brand nationally may have no recognition outside of the organization's nation state.

Critical to building brand on the net is selecting the right brand strategy. The four generic brand strategies (according to Nua's 'Nuaware' http://www.nuaware.com/) are 'brand development / extension', 'brand partnership', 'creation of new online brand' (e.g. Amazon.com Inc), and 'no action needed'. More of that however in forthcoming issues.

Back to Beausejour and Goldstein. Both have definite opinions on the issue of how brand relates to the Internet. They also raise some interesting points on the implications, key drivers and challenges of taking existing brands online;

"an interactive medium like the web enables us to target interactive messages directly to consumers

For everyday, mass-marketed brands like ours, it is a very big deal. It transforms ad models that we have spent decades perfecting. It represents a whole new 'brand marketing' opportunity." (Denis F. Beausejour)

"Because at the end of the day, brands ...are about relationships. They are about trust and service and insight into what people need". (Denis F. Beausejour)

 

"If we can truly leverage the unique capabilities of interactive marketing, it will dwarf the power of traditional media to build relationships with consumers. " (Denis F. Beausejour)

 

"More importantly, they [new media activities] allow us to open a dialogue with our consumers, which will make us smarter about what it is that governs brand building in the digital age." (Richard A. Goldstein)

 

"our decision to migrate to the web and other new media is driven solely by the needs of our consumers...not by the need to be digital. The pipeline and technology is secondary to our desire to provide added value to the user - in the form of trial offers, recipes, usage tips or time-saving information. Otherwise, consumers will not invite us into their homes on a regular basis." (Richard A. Goldstein)

 

"We are convinced that the very nature of the Internet is particularly suited to what Unilever refers to as its multi-local, multi-national approach to product development and marketing around the world." (Richard A. Goldstein)

The ultimate point made by Goldstein raises another fundamental issue in relation to the 'global' consideration of branding. Can a global brand be created that has meaning across all five continents (geographically and cost culturally) as well as across vertical market segments? British Airways would seem to think so, though Heineken would disagree.

British Airways have stuck rigidly to the 'world's favourite airline' mantra that is chanted throughout the organization worldwide. Heineken, however, amend the positioning of their brand according to the geographic location. On one end of their brand positioning continuum (in the Antipodes) the product is (according to a recent interview with Karel Vuursteen Heineken Chairman and CEO) 'very macho'. However in many Southeast Asian countries, the product is positioned, on the other end of the continuum, as 'almost a "feminine" product - sophisticated'. Somewhere around the middle of the continuum (in the US and Western Europe) the product is 'a normal part of life, it's thirst quenching'.

Vuursteen believes that a brand cannot change in any aspect - composition or presentation. Consistency, he argues, is the singular reason for a brand's success;

"At Heineken, we stick to conservative financial ratios, but what really determines our bottom line is the quality of the brand. Start changing your brands and their credibility and long-term profit is destroyed."

So brands cannot change then? Of course they can and indeed they must according to Jean-Marie Dru (head of global advertising agency BDDP Group). He has put forward a very convincing argument that the management of brands has had to change radically over recent years, as consumers have become better informed and less susceptible to sleek advertising campaigns. There is also, he argues, significantly more consumer choice than there was a generation ago. Consumers are therefore now asking questions around their trust in a brand, the brand relationship, and the values that the brand represents to them. A brand therefore, he proposes, must build more than simple brand recognition;

'a brand must now stand for something, it must have meaning. Successful brands today have built a knowledge base related to their products and services. Customers now come to the brand because of what that brand knows, much more than its name or the specific product benefits.'

I am reminded, by this proposition, of the move by Unliver to position its washing powder Persil as a brand that 'knows' and is 'much more than its name or the specific product benefits'. In the UK Unilever have established what they term the Persil Clothing Care telephone line. This is a free-of-charge phoneline that gives expert advice on how best to handle issues around clothing care. It extends the brand beyond merely its design and packaging.

Dru however goes firmly against Vuursteen's 'never-change-the-brand' philosophy with the following provocation;

'Successful brands need to send a message to their customers that they are keeping up with are keeping up with the times - that they are in touch with their customers' needs. To do this brands must constantly change.'

He relates this need to change specifically to the implications of taking a brand on to the Net and is very much in line with the Unilever and the Procter and Gamble perspective;

'The innovative brands are looking to reinforce the experience that their brands offer consumers by creating this experience on the Web. An experience on the Web should combine information about that brand, along with access to a community, knowledge, and relationships around the brand. The experience should give your brand meaning, just like other communications channels. In this sense, the Web is not the medium, the brand is!'

SmithKline Beecham's Lucozade brand achieved a radical repositioning in the UK and Irish marketplaces. As a child my brand associations with Lucozade would have been as a 'get well soon' recovery drink. Its brand association and target market therefore was 'the sick'. Its positioning now however is as the 'Lucozade Sports' drink a post-exercise recovery drink associated, through its sponsorship programme, with the English Premier Soccer League. Its brand association and target market is therefore now the professional and amateur sports person. Quite clearly a radical brand positioning shift.

Critically we need to ask how such brand shifts are achieved? Marketers are as profligate in their questions as they are parsimonious in their answers. These questions form a rather exhaustive list including the following:

Is it possible to have a common set of brand associations / common identity elements that will form at least a composite part of the brand's core identity. This is the proposed offline solution but how does this work for the web? How will the polarised positioning that the Heineken challenge raises handle itself in an online environment? Aaker's suggestion is that in one market it is the brand personality that should be at the forefront while in another it is the product attributes that should figure most prominently.

Does this mean that the organization needs to become brand driven rather than product driven? What impact will this have on organizational structure? Where does the vision of the brand's future come from? Where is the vehicle for forming a common co-ordinated brand strategy across all business units in the example where an organization has multiple brands? Where is the Boston Matrix for brands? Furthermore do 'cash cows' and 'problem children' have as much validity for brands as they do for products? Is it also the case that a 'cash cow' product is going to be a 'cash cow' brand? Is it a missed opportunity to build relationships if the brand is not developed? Given the offline 'Media and Communications' brand building mechanisms through traditional media - sponsorships, loyalty schemes, direct marketing, advertising, promotions (including point-of-sale), PR, marketing research, design, and packaging - what are their impact for the Net and for developong an online / offline strategy.

Is building a brand offline and online best done internally or in conjunction with an external agency? If an external agency is used then how is success to be measured? What criteria should be used? Many organizations appoint brand managers responsible for the functional areas of advertising, media, consumer promotions, marketing research, consumer response / promotion services. Also known as brand equity managers or simply brand champions they also by necessity need to become brand facilitators in the realm of the Internet (more on this topic in the future).

Are the best strategists the ad agencies? Are they the people likely to be most aware of brand context? What about the link between strategy and execution? What about global brands and their management by global brand agencies - do ad agencies really understand the Internet? Can they really achieve synergy, economies of scale, and consistency across continents and culturally divergent nation states? Given the Internet has such far reaching implications on an organization's core business, should an organization's online competitive strategy best be determined by traditional management consultancies?

Enough seeds have been sown here to see us over the next four to five issues of the Clickonomist hence we will terminate at this juncture. The issues raised we will be discussing in the new format of the Clickonomist that we will be bringing to you on a weekly basis, beginning next Wednesday (18 November 1998). In this respect this current issue is setting the ground upon which future exploration and discussion will be built.

Full interactivity is welcomed from all readers, especially (in light of the next issue's topic covering Digital agencies versus Marketing Specialist agencies as the best vehicle for maximising an organization's online presence) from those readers working with advertising agencies, management consultancies (strategy boutiques and generalist), marketing agencies and in-house brand managers and strategists.

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SOURCE MATERIAL
1. 'Web Audit' article - Campaign magazine November 1998
2. Managing Brand Equity by David A. Aaker
3. Building Strong Brands by David A. Aaker
4. Market Driven Strategy by George S. Day
5. Jean-Marie Dru - 'The Imperative to Reinvent Brands' (Harvard Management Update)
6. Jean-Marie Dru - Disruption (Published by John Wiley & Sons) and http://www.disruption.com/
7. Keynote Speech - Richard A. Goldstein: President & CEO, Unilever United States - Jupiter conference 02 August 1998 available at; http://www.unilever.com/public/imarket/press/press.htm
8. Keynote Speech - Procter and Gamble's Vice President of Advertising Worldwide, Denis F. Beausejour at the Spring '98 Ad-Tech Conference. Available at; http://www.pg.com/speech.html
9. Consumers in Control - an interview with Esther Dyson for Outlook Magazine - Andersen Consulting. Available at; http://www.ac.com/overview/Outlook/6.98/over_currentf1.html
10. Brewing a Wordly Brand - an interview with Karel Vuursteen Heineken Chairman and CEO Karel Vuursteen's Rules for Global Marketing for Outlook Magazine - Andersen Consulting. Available at; http://www.ac.com/overview/Outlook/6.98/over_currentf3.html
11. Ogilvy and Mather 'Ogilvy Lexicon' available at http://www.ogilvy.com/index_a.htm

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