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Hello, I'm Sean Duffy, founder of The Duffy Agency and lecturer here at Lund University
School of Economics and Management.
Today I'd like to tackle one of the most challenging problems in brand management and that is defining
exactly what a brand is. Now why is that so hard? Well despite
the fact that over the last twenty years every marketing expert on earth has basically
chimed in on the subject, it is still considered the most confusing term in marketing and business
in general. If you want to see just how misunderstood, just take a look at
Google. Here is a collection of definitions that I've
gotten off of Quora. If you look at ‘what is a brand' on Quora, you'll find these first
fifteen come up first, and there's also a definition from Campaign Magazine, which I
thought was pretty appropriate. But as you can see they're all over the place: a
gut feeling, a promise delivered, a core definition of a company's brand or belief, your
image. It seems like it could be pretty much anything. And while all these different concepts
make for interesting dialogue on Quora or elsewhere, they have real-world implications
for brand management, and while they're built around some grain of
truth, I'd argue that pretty much all of them are wrong. If you think of it this way: If
I were to ask you “what is a beer?” you could
say “well, beer is a party in a bottle or beer is social lubricant or beer is good times,
or a symbol of reward”. All those things are
true and very poetic, but they are not very useful if you want to make beer.
A second factor is, if you take most of those definitions and look into them a little more
deeply, you'll find that most of them fall apart pretty quickly under logical analysis.
Either they're circular definitions, are overly broad or narrow, they're obscure
or they contradict themselves. So, today I'm hoping we can clear up some of this confusion
by going through these points, and the points I'd like to talk about is to
first frame the problem: Where is it and how did it start? Second, ask ourselves “what
is a brand?” and come up with a working definition. Part of that definition will be
to separate out something called brand derivatives. After that if we know what a
brand is, we should ask ourselves what exactly is the activity of branding; something
that we do every day. And lastly, what is brand equity? It's the reason we do all this
and we hear a lot about it but it would be nice to have a working definition.
To start with framing the problem. I first asked myself how can it be that so many super
bright marketers have defined this word yet none of their definitions agree.
And the more I thought about it, I found an answer in a parable. It's called the Parable
of the Six Blind Men. The idea is basically the six blind men encountered
an elephant for the first time they are asked to study the animal and define
it. So the first blind man grabs the trunk and proclaims that an elephant is the type
of snake. The second grabs a tusk and proclaims that an element type of spear. One
grabs an ear and proclaims that elephants are just like fans. The other one grabs
a leg and says it's like tree; the other one grabs the stomach and says it's a wall. The
last one grabs the tail and says an elephant is basically a sort of rope.
Now, the parable demonstrates how although a person subjective experience can be true.
They can at the same time be completely wrong about the wider implications
they draw from those. When we apply this to defining a brand, we have a
different animal, pretty much the same outcome. Our gurus are all over the place, like blind
men feeling an elephant for the first time.
Each brand consultant has their own take, depending on their perspective. It doesn't
mean the perspectives or their perceptions are wrong, but the conclusions
that they're drawing about the parts do not really help us define the whole. And
it does little to guide marketing on our operational day-to-day level. In fact, it would seem as
if each expert feels compelled to raise the issue to a new level of complexity,
and as we've seen, they're doing a pretty good job. The result of this confusion
is that we can't really talk about brands in a coherent way with our colleagues with
our bosses with our shareholders and that doesn't help us manage them very well. In
fact I would say that it impedes our ability to have any kind of organized brand
management, except for your own personal form of brand management.
If that was the case, what could we expect the outcome would be inside the organization?
Well, if it were that way you'd expect there'd be a lot of confusion – that
brand strategies would be confused with more tangible branding tactics like
naming logo development and graphic identity programs. We'd expect a degree of vulnerability
where marketers were prone to abuse when we buy and develop services
because we don't actually know what were buying in the first place.
We'd expect to be underfunded in our branding efforts because we really wouldn't be that
convincing when asking our CEO or board to take us seriously and fund
our efforts adequately. De-prioritization: we'd have difficulty getting our brand
development programs prioritized relative to more understood programs like sales-development.
We could probably expect pushback difficulty getting people to cooperate
with our brand development programs once we did get them running. And
Paper Tigers: brand strategies that exist only on paper, but are never really operationalized
because the concept was never really understood in real-world terms from
the start. Faulty Metrics: people applying the wrong
metrics to measure the success of our brand development programs like applying
sales metrics to branding programs. And failure: successful brand development initiatives being
labeled as failures because they didn't live up to those metrics that
were faulty in the first place. And of course stigma: business leaders, concluding that
branding is basically a waste of money and cultivating an anti-branding climate inside
the company. And of course there's what we've just seen: the pointless speculation,
the definition of branding treated as if it's a personal choice among marketers.
And this is pretty much what we do see when we look at the organizations today.
So who's really to blame for all this mess? Well, I'd say it's probably us: you and I,
we are the marketing industry. We are the vanguards of the brand. Yet we've failed in
a simple task of actually defining what the brand is and what the activity of
branding is. I don't know if we can actually solve it all
today, but I'd like to try. If we consider our colleagues in professions like law medicine
or accounting, can you imagine a CFO of a company calling up his different department
heads in different countries and saying “I'd like a profit and loss statement”
or “I'd like a balance sheet”. He pretty much knows what he's going to get back. But
if you take the CMO and have him call up his marketing colleagues in different countries
and ask for positioning statement, or a brand architecture, you really have no idea
what's going to come back. And that's where not having an accurate definition of
this can actually start to erode your branding programs.
If we can recognize the absurdity of that situation, it's my hope that perhaps we could
start to change that. So where do we start? I'd like to ask that for the next twenty
minutes or so, we forget whatever definition of the brand we are operating under
and try to approach this with an open mind because if we can do that is a pretty good
chance we may be able to see the whole elephant. And in the process, I'm hoping
that today you'll gain a new understanding of your brands, how they work and
how you can better manage them. So here's where we'll start: really simple question
- What is a Brand? Let me paraphrase Al Ries: he said “a brand
in the marketplace is very similar to a brand on the ranch”. It differentiates your
product from all the other cattle on the range, even if all the other cattle on the range
look pretty much alike. This is a definition I found useful: a brand is basically
a trademark used to differentiate one product or company others in the same
category. And of course, a trademark is a name typically presented with a specific design
treatment symbol, phrase or combination of those. A distinguishing mark,
a symbol like this one a brand really is no more no less. It's pretty straightforward
so you have to ask where is all this confusion coming from?
I think this phrase helps sum up some of it. This was coined by Chris Kenton, in an article
in Business Week several years ago. The name of the article was “what exactly
is a brand?” I've included a link at the end of this slideshow see you can look it
up yourself.
But his basic premise is your brand is your name, your logo, your trade dress, you own
it. There are clearly written laws to protect it. It's tangible enough to put a
price on. And yet an entire generation marketers has found a way to obscure the
obvious, to make the brand more fantastic, to make it hard not to understand that you
need consultants to help you figure it out. He defined a brand very much as we have.
He called the burning scar. The article was said to have triggered the greatest
response for a marketing article in the magazine's history. Now Kenton maintains that all the
stuff associated with brands has basically been lumped under one word things
like brand architect brand architecture brand experience brand guidelines
brand persona brand promise, etc. He says these are brand derivatives they are
not the brand, and they warrant their own definitions. I've listed out just fiftyfour
of them here, but I bet there's more. Many of these are used interchangeably as if they're
the same thing but they're not. Kenton summarizes with this concise explanation
of a brand: your customers own their impressions and you can influence
those impressions with the quality of your product in the experiences you foster. But
your brand is just the symbol that anchors those impressions to the product you
create. Now if we can live with that definition, then I'd like to explore a little bit
the activity of branding. If logic ruled, there would be a certain definition
of brand. Well, it would really be this simple, if a brand if just a symbol then
here we have a symbol and here we have a dollar nine cents worth of bananas. Literally then,
branding would simply be the act of putting the symbol onto the product,
and that is really all there is to it, except you may of noticed something changed:
the value of the banana. And it's why you should not be focusing on branding as such.
Bill Bernbach had a classic quote “if you're not a brand you're a commodity”,
and then you can only compete on price. That is the ROI (return on investment) of
branding - you invest in branding to make sure you never have to compete on price. The
price is in direct proportion to the difference in perception value perception
from the consumer, and it takes skill to maintain that kind of public perception. So
what we really should be focusing on is this: adding meaning and relevance, differentiation
to that symbol. And that's the hard part. It's something that requires super
careful management. Unfortunately, when marketers talk about branding, they're
rarely talking about applying logo to the product. They are usually talking about other
things: Derivatives and managing those Derivatives - with the aim, of course,
of increasing brand equity. So in usage branding actually means by most
of the people you'll be working with crafting and/or managing all this stuff.
These are all important aspects of brand management for sure. And if we use the correct words
for them I think we could manage them even better. Some people like
to define the brand by its derivatives to emphasize that brands communicate to
all the touch points, not just promotion and I get that but it's still no excuse to label
fifty-five distinct marketing concepts with the same word. This is fifty-four and I'm
including the idea of applying logo as fifty-five. Here's another way to look at it. Forget about
branding via promotion, start to think about perception management via
attach points. I think this is what they're trying to get at. So if managing in brand
means managing those derivatives across all touch points, how can we distinguish branding
from marketing or sales? Every company has its own way of answering that
question, but here's an operational definition of what these different words could mean in
day-to-day usage, and activities. We see marketing as an activity to increase market
demand to the strategic manipulation of product, Price, Place and promotion
resulting in either an increase in sales and/or brand equity, which we'll define later.
Sales activity: the primary objective of those is to generate short-term liquid equity measured
by revenue received in return for delivery of your product or service over
a given time period. There are brand activities: The primary objective here is
a generation of long-term non-liquid equity in terms of the ability of the brand to increase
the likelihood of future sales measured by the degree to which activities
around the brand have been able to develop consumer awareness, understanding,
interest, trust, trial, belief, affinity, loyalty and advocacy, and we'll talk a little
bit more about those later. Here's a model that pulls it together into
one picture. Sales and branding basically are working off the same toolset, but with
different objectives, and that causes friction. For instance, sales will often want to lower
price to move product, generating purchase. However, brand says that might hurt
the value perception and long-term profitability and the possibility of future
sales. And one problem that also comes up is when
branding activities are measured by metrics designed to measure sales activities
if there's confusion in the company about the difference between the two, and this happens
a lot. This is another way to look at it if you might; I like this diagram because
it really shows how the relationship between sales and branding should exist. A
healthy business needs both. In arguing about which one is more important is pretty foolish.
It's like arguing if your heart is more important than your lungs obviously you
need both. And a lot of executives tend to dismiss branding
talk because they feel it's a soft issue. They favor more reason and fact-based,
which sales often delivers, but the problem is that if you don't get past the perception
barrier, you don't get to the fact-based information. If what I think I feel and I
believe are negative towards your brand, I'll never get to what I know because that
requires a lot more time and effort on the consumer's part. So if you talk to pundits
or just read some articles, you'll see that they're trying to convince you that everything
a brand does is basically branding and while I would argue that yes the aim of
branding is to shape people's perceptions and be everything a company does, does shape
perceptions. I wouldn't say that everything a company does is branding.
If that's the case then branding is everything. And in the same time, it becomes nothing.
We can't manage everything. I think the one factor that should be included in
any definition of branding is intent. Adding intent narrows the definition down into
something we can actually work with on a day-to-day basis, and that's what tethers branding back
to reality. Without that tether, it's just a hollow esoteric
theory, if the word branding is to have any operational meaning then it has to
involve intent and that is the strict strategic manipulation product price, place, or promotion
specifically intended to increase brand equity in a measurable way among specified
target group across specified touch points over specified period of time.
All the other things that can happen to shape public perception about your brand are just
dumb luck. There's nothing wrong with that, it's just they're not what we would
call in this definition, branding. Okay, so the last point. If we understand what a
brand is, what is brand equity? I'm sure you've heard that term a lot and like brand or branding
there's many different notions of what brand equity is.
The idea is if we can't come to a conclusion of what it is, we're probably not going to
be able to manage it very well. To define it, I'd like to start back with the sales
funnel and if you've seen Glengarry Glen Ross you might remember the scene. The sales
function of attention, interest, decision and action. Great advice for hard-core sales
not really good when you're marketing online, the classic sales funnel is a finite
process. It takes a consumer in at the top and spits them out at the bottom.
The traditional sales funnel ends in an action, and that's a sale, and that generates figures
that are easy for everyone to understand. But what if we had a plan to get
that person to buy again and perhaps again and what if we can also get them
to get other people to buy as well. That's the difference between a sales strategy and
brand strategy and I would look at that now. The job we need to get done in the
market is to overcome certain hurdles that lie between us and having people
advocate for our brand. We've modeled this: about a decade ago, we moved from Aida to
create a more nuanced view of the path that today's consumer takes. It doesn't
end in a sale, in fact, it's not a funnel, it is a cycle. It takes you in one end and
doesn't spit you out on the other. It keeps you in circulation. If we could go through
this - I use the example of what say a crayon.
So inertia is the point where you don't know about the product or perhaps the brand at
that point and then something happened, some spark and you're made aware
of the brand - that doesn't mean you know what they're selling, or what it
is you just made aware of it. After that, comes understanding. I understand it's a crayon,
but why would I be interested in crayons? The next stop is interest that has
to do with why should you care about the crayon “it is a crayon that washes off the
walls. Well that's really interesting to me because I have a two -year-old at home who
is always drawing on the walls” That's really something interesting. The next, is
trust, “I know Crayola. I remember that brand, uses it when I was a child, it must
be okay”. Trial: “well, they're at Walmart
and pretty much the same price as the other one, so I'll try them”.
Belief: “Wow they did just what they said they would, he was wrote on the walls and
it washed right off”. Affinity: “Crayola brand, they're into educating children, I'm
into those things too. I really like this brand”. Loyalty: “they're at Walmart,
always available, the price is right, I'll keep on
buying”. And then Advocacy: (and this is something we can actually help promote in
our community) Crayola puts up a contest online saying to upload photos and drawings that
your son or daughter has made and get your friends to vote for them, you
get a free trip to Museum of Art. Hopefully once they're up to that level of
accuracy, and that they're talking about you online, you want to keep the
momentum and have them keep buying and telling and buying and telling, giving them reasons
to buy and tell with fantastic service, fantastic product contest online
competitions. So if we take a look one step back, the derivatives we talked about are
actually related to this model and I've tried to fill some of the in here. If we look at
awareness will that's going to be related to
mentions or promotion, that's going to be probably related backed your media strategy.
Understanding: are you in the right category? Is your name and profile clear enough so the
people can understand what your product is? Interest: what's your value
proposition is it clear how you are positioned within your category? Trust: what's
your brand story, brand narrative do you have recommendations, are you familiar to them
because you shown up enough in their lives. Trial: Price and place, belief,
what are your key claims and support? Affinity: brand values and causes you stand for.
Loyalty: quality control and value reinforcement. Advocacy: associations, platforms, and the
social currency you offer. All these things the strategic points come back to driving
consumers through the cycle. We've taken a journey, first to define what
a brand is, and a working definition. We've talked about branding, what the activity
of working with that brand and managing it is, and we've talk about the objective of
branding which is brand equity and we have a model for that. In class I'd like us
to continue this discussion and take it to the next level and talk about what is a brand
strategy. I have added the some links at the end of this, which are further reading and
if you want to look a little bit more deeply into the subject. I highly recommend
reading ‘What Exactly is a Brand' by Chris Kenton. So thank you and I look forward
to continuing this discussion class.