IntroductionBrand spring water with a story being sold
June 9, 2019
IntroductionBrand Managers differentiation, consistency and transparency are, arguably, the three biggest success factors and challenges that Brand Managers face daily.Key challenges1. Brand Differentiation is challenging: a) when Porter’s Five Forces are strong, being, arguably, the best case for and the biggest hurdle to brand differentiation (below), e.g. the airline industry (Porter, 2008), where the low-cost carriers’ Blue ocean strategy (Kim and Mauborgne, 2004) of simple promises (reliability, safety, dependability, affordability) has forced large carriers to reduce costs and differentiate on the more profitable long-haul journeys (Britton, 2017): b) when brands try to dominate on multiple dimensions, wasting resources, stagnating value and risking feature fatigue (Rust et al, 2006), instead of, arguably, using a branding strategy of n hypothetical dimensions of dominating on one, differentiating on one and baseline matching on all others (Merlo, 2016d) (e.g. Orange (Barwise and Meehan, 2004)).c) when brands misunderstand their target consumers through generic segmentation (age, sex, gender, etc.) and, resultantly, resonate with few consumers (Merlo, 2016a). Here psychographic (4Cs, VALS) or product’ function-based segmentations (Young & Rubicam, n.d.; Merlo, 2016b; Merlo, 2016c) could allow more focussed differentiation and customisation.d) when consumer understanding is shallow due to limited market research. Here ethnographic research (observation and personal experience), could complement quantitative and qualitative consumer intelligence gathering methodologies, allowing relevant differentiation (Merlo, 2008) (e.g. Toyota’s “Genchi Genbutsu” or “go and see for yourself”).e) where industry-wide misconceptions and erroneous assumptions by Brand Managers (Sharp, 2010) about brand knowledge, loyalty, devotion, popularity (on social media), and involvement (below) (Colman, 2017), lead to misdirected differentiation efforts. Creating emotional and experiential connections through effective storytelling (Eisingerich, 2017b) (e.g. although indistinguishable from tap water in blind tests, spring water with a story being sold at a premium (Kassab, 2013; Merlo, 2017c)), being interesting, having a point of view and telling the truth could yield better results.2. Brand Consistency is challenging: a) for organisations of all dimensions and maturity with smaller and younger companies focussing on “infusing every product or service pore with a consistent brand message”, fully leveraging the power of each branding channel, and inspiring “stickiness, trust, loyalty and advocacy”; and larger, especially global, companies, being more rigid in nature, requiring greater commitment and coordination to achieve similar results. (Levstek, 2017)b) for managing enduring and shared perceptions (Radda, 2017) in the consumers’ minds, since the stronger, more compelling and coherent these are, the more they are likely to influence decisions and add value. This is easier than creating brand love, but is impeded by consumers (>80%) brand ignorance. Mark Radda suggests a four-stage solution to consistently managing these perceptions across the four brand elements: idea, ambition, value and personality (above): a. Observe the worldb. Build the ideac. Express the idead. Bring it to life c) when overexposure to the brand message leads to brand aversion (e.g. Whipple toilet paper, Sullivan and Bennett (2012)), since, although, consistency needs the core message to be static, slight variations in execution could reduce brand relevancy loss (Merlo and Eisingerich, 2017a).d) when the brand benefits are misaligned, as only brands that consistently align high enabling, enticing and enriching benefits can hope to achieve brand admiration (below) (Park et al, 2016).3. Brand Transparency is challenging: a) when managing extreme consumers, who identify themselves with brands, defend them, consider them family, eschew other brands, strongly advocate and invest in them (Eisingerich et al, 2010). They see any transparency-based trust-loss as a betrayal, displaying the “love becomes hate” effect (Grégoire and Fisher, 2007) (e.g. Verizon’s capped “all-you-can-eat” broadband (Cringely, 2006)), with some even exacting revenge upon the brand (right) (Grégoire et al, 2011; Ariely, 2007) (e.g. Red Bull “doesn’t give you wings” lawsuit, (Duggan, 2014)).b) when managing expectations of demanding consumers, who see brands as bonds or pacts with organisations (Yu-Ting, 2017), require transparency, honesty and reliability, often feeling that they own the brand (Radda, 2017) and revolting to major decisions from which they feel excluded (e.g. Gap reverting to their old logo following social-media outrage (Dimofte, 2016)). c) when brands fail to be transparent about their relationships with influencers (Josefsson et al, 2017), sometimes leading to legal actions and eroding brand trust, especially when influencers and, therefore, brands are seen to mislead consumers (e.g. FTC suing CSGO Lotto) (Fair, 2017).d) if the organisational culture is unconducive to or threated by co-production (e.g. Lawyers feeling undermined). Here realigning employee rewards and improving customer-facing employee training might better organisational behaviour and productivity (Eisingerich, 2007h).e) when it produces negative results (e.g. national defence, critical infrastructure, secret services) yet finding the right balance is crucial as total secrecy might produce backlash when disasters occur (e.g. Nike “sweatshop” scandal (Harrison and Scorse, 2004)), although, revealing trade secrets (e.g. magicians, Disneyland) or profit margins might actually reduce customer value (Eisingerich, 2017h).Critical determinants of success1. Brand Differentiation is critical:a) to adding customer value (Kotler et al, 2018; Merlo, 2017a) by incrementally enhancing (right)a. the core layer (basic features),b. the expected layer (basic differentiators),c. the augmented layer (strong differentiators and intangible benefits), andd. the potential layer (major brand growth and differentiation opportunities (Levitt, 1980)). E.g. A car’s core chassis and engine are differentiated with expected comfort and safety features, augmented with roadside assistance and warranty, and potentially improved through cross-boundary disruption (e.g. iPod (Burgelman and Grove, 2007); Swatch (Moon, 2008)) and co-production. b) to inducing the right biochemical consumer triggers, by stimulating the production of serotonin (inclusion, confidence, e.g. Nike), endorphins (pain masking, e.g. Christmas shopping), dopamine (rewarding, e.g. eating chocolate), and oxytocin (love, trust, e.g. Red Cross); inhibiting cortisol production (stress reduction e.g. Tui) (Eisingerich, 2017c-f), and titillating their senses through “perception, judgment and behaviour” (e.g. Mayo Clinic waiting room scented like hotel lobbies) (Eisingerich, 2017g; Krishna, 2012).c) to achieving sustainable brand equity and leadership and earning profits and loyalty otherwise impossible (Keller, 1993), relevant differentiation being fundamental to strong brands’ potential maximisation, “Leadership” or “Envy Zone” achievement, and avoidance of or recovery from “Eroding Potential” (below) (Merlo and Eisingerich, 2017a).d) to achieving resonance (below) by leveraging both, the functional as well as the emotional brand differentiation and persuasion routes (Keller, 2001).2. Brand Consistency is critical:a) across all customer channels whether through external or internal marketing (Merlo, 2009), simple rules (Sull and Eisenhardt, 2015), mantras (Eisingerich, 2016; Kawasaki, 2004), or brand elements (Merlo, 2017b), employed to deliver the brand promise and resonance within the organisation as well as with the consumers.b) for brand advocacy, since brand experiences unite brand identity and user experiences, aligning every consumer interaction touch point to the brand’s values. Successful implementations communicate unique, consistent messages, easy for consumers to adopt and advocate verbally (Levstek, 2017). c) for building Brand Trust, since a consistent message would be incomplete without consistent promise delivery. E.g. Apple augments consumer value by engaging in consistent experience, story and truth sharing with consumers, supported by globally consistent service delivery and quality (Radda, 2017).d) to attaining brand admiration through consistent and complementary marketing actions. They enable consumers by solving functional challenges and achieving brand trust (e.g. Lidl); entice them by leveraging experiential pleasures and reaching brand love (e.g. Abercrombie & Fitch); and enrich them by intangibly improving their lives and gaining brand respect (e.g. Apple) (Eisingerich, 2017a; Park et al, 2016). They aggregate to produce brand admiration, becoming “Lovemarks” and reaching “loyalty beyond reason” (Roberts, 2004) (e.g. “Lovemarks” author using Head & Shoulders shampoo long after balding).3. Brand Transparency is critical:a) to building trust via accountability (Levstek, 2017) (e.g. Moo’s Print Robot (Benjamin, 2017)), an incremental process, wherein, if trust is absent at the outset, customers might not perceive any value generation (Eisingerich, 2007h).b) to innovating and improving customisation through co-production by encouraging the social community to suggest and rate ideas (e.g. “MyStarbucksIdea”) (Eisingerich, 2007h), raising consumer value perception, brand ownership, alignment, control, and improving organisational productivity (Merlo et al, 2014).c) to increasing consumer intention to purchase and willingness to pay by reducing uncertainty and providing accessible and objective information about the organisation’s products and services (Liu et al., 2015).d) to building loyalty by starting two-way conversations with consumers (Radda, 2017), to teach them about company operations, complexity and expertise (right) (Eisingerich, 2007h) (e.g. Famed chef, Heston Blumenthal, sharing recipes online, making his restaurants more accessible, and gaining customers who seek the experience more than just the food (YouTube, 2017)). However, it is hard to educate clients about the firm without also educating them about the market (e.g. Goldman Sachs JBWere’s client loyalty fell as their market expertise increased (Bell and Eisingerich, 2007; Levitt, 1980)) and informed, price-sensitive consumers might depart due to lower switching costs.e) to increasing brand resiliency as honesty, participation, ownership and clear communication increase consumers’ service-failure tolerance (Eisingerich, 2007h), especially where human and technological failings (consumer data loss, fake news) are causing, often permanent, equity and confidence losses (e.g. Hillary Clinton 2016 election defeat (Allcott and Gentzkow, 2017)), thus, compromising brand continuity, damage control and disaster recovery.ConclusionBrand differentiation, consistency and transparency are crucial, interrelated elements. Shortfalls or successes in each would similarly impact the others. Brand Management is, thus, a complex, multi-faceted task which can be facilitated by a deep understanding of these underlying success drivers and challenges.