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Branding Revisited

by Dave Miller

from Seattle Business Monthly

 

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Pagliacci Pizza is one of my favorite brands. In fact, I am zealously devoted to this marvel of baked bread and sauce. Do I think their pizza is phenomenal? Well, pretty darn good to be sure. But moreso there’s something about the ethos this company, from their feature of local produce, to their quirky newsletter, to the unfailingly engaging call center, that makes this pizza place – my pizza place. In carving out this niche in the minds of the market, Pagliacci’s strong brand has moved pizza provision from cognitive to instinctive. We don’t simply buy - we belong. And business has flourished, now with 21 locations in greater Seattle.

Among marketing leaders the ability for strong brands to drive business value has been well-established. In the annual study by global strategists Interbrand, Northwest-based companies Amazon, Microsoft and Starbucks alone rack-up over $64 billion (US) in excess book valuation – simply on the value of their brand.

While businesses are now married to branding as a strategic discipline, their courtship was once a rocky relationship.

In the ‘90’s, companies made a head-long charge to “branding” as the magical elixir that would cure many business ills. Brands were the new imperative and heaven help you if you didn’t have one. During the capital-saturated boom, the impractical value of “hockeypucks.com” was lost in the demented rush to capture eyeballs and occupy mindshare.

As the economy waned, so did the visibility – and some will say, the credibility – of branding. So it is not without a certain measure of skepticism that some business leaders have met the return of branding to their boardroom conversations.

Yes, branding is back. But the conversation is more reasoned, the discipline more matured, and the need perhaps more profound.

Before delving into the resurgence of brand as a strategic driver, it is important to calibrate the conversation with the meaning of the word “brand.” Let’s speak plainly: In its essential form, a brand makes a promise of value and difference. Volvos are safe cars. Period. A strong brand creates a memory of the future in the mind of the customer, cultivating trust and understanding to condition the sale, ahead of the sale. The splendid little thing about brands is their ability to elicit somewhat irrational, but nonetheless valuable, consumer behavior. They’ll get customers to pay more, buy more, remain loyal, and do much of your marketing for free. (Anyone care for a Cupcake Royale?)

As a management discipline, branding emerged from the Industrial Revolution, when name and logo were a maker’s mark, a warranty of quality tied to a unique selling proposition. Ivory was “the soap so pure it floats.” Mass manufacturers relied on economies of scale, and nationally-branded products were required to displace local manufacturers. Brand meant “better.”

Following World War II, the surge of national consumer products required marketers to occupy mindshare. Early television was a primary medium to drive consumer interest in cake mix, hot dogs and cars, and manufacturers could leverage this consumer demand to secure distribution with retailers. Brand became an effective bully, enabling manufacturers like Anheuser-Busch, Johnson & Johnson, Kraft and Nabisco to assert their authority. Importantly, it was at this time that branding became associated with media and external communications.

From the go-go ‘60’s through the late-80’s it became difficult for Americans to discern between products and services as brands and line extensions proliferated. With increasingly segmented audiences, and consumption shifting from needs to wants, companies sought mechanisms to break-through at an individual, emotional level. Our soda bottlers suggested we buy the world a Coke, and the shoe guys challenged us to Just Do It. Branding was the reinforcement of wonderful fabrications, and image was everything.

The boom of branding in the 1990s was precipitated by separate, but concurrent events:

• The work of marketing luminaries like David Aaker gave the words credibility in the executive suite;
• The diminishing returns of traditional media found marketers desperate for new tools;
• The supply and quality of graphic design increased through advances in affordable desktop technology;
• The Internet opened-up new communications territory, and brand was a tenant of communications, and finally;
• With the rapid flood of leveraged capital, there was a bloom of new companies, each wanting to tell their story, without a high degree of...shall we say…oversight.

With the rising tide of management specialization, and the hurried scramble to market, branding became separated from its corporate sibling—strategic positioning. The practice of branding was relegated to its tactical end-stage, communications and messaging, with deliverables like logos and brochures to be periodically re-visited for a snappy color refresh. The Sonics got themselves a new retro logo, but their offer – from product to fan experience – remained profoundly unchanged.

Said Jim Copacino, founder of the celebrated Seattle-based creative agency Copacino +Fujikado, “The common, but incorrect, definition of branding became ‘Let’s throw a bunch of money at things we can’t measure.’”

Critically, if not fatally, branding was packaged as a linear process by agencies, and approached as ”a project” by clients, with a beginning and an end point. In fact, branding is a continuous process, as each and every day a company’s image is projected, expectations created, customer experiences are recorded, promises are implied and competitive distinctions are drawn.

In a pendulous swing, businesses shifted to a heads-down drive for operational excellence, with a zeal for process efficiency and cost management. Corporate fixation with what, where and how a company could make and sell things began to overwhelm the question “Why?” Why would our customers want this product? Why should they buy it from us? Why will they be expecting and delighted for us to do this?

Lifting their heads from the zero-sum game to be fastest and cheapest, marketers began to notice that companies emphasizing difference seemed to be competing pretty darn well. Target stores are bringing design and delight to everyday household objects. Using wickedly-effective imagery and careful product selection, Target has tapped-in to our aspirational nature, making consumers feel a little sassy, savvy and more appealing for choosing to join them. Meanwhile, the staging of Shoreline’s Central Market exploits our native curiosity, kindling interest in our epicurean potential. Apple’s cultural embrace of individuality and creative expression has us running down the aisles with our credit cards. Each company can clearly and uniquely answer the question “Why?"

Importantly, most of these brands are driven by the use of design, to create an immersive customer experience that reinforces their image of difference.

What Makes You Different?

Marketers have come to understand this simple truth: In today’s competitive market, the need to develop a clear and differentiated position has never been more necessary, nor perhaps more difficult. It’s not like there’s a shortage of insurance products, financial services, work-wear retailers and fast food options—or logo makers, for that matter. From product development, to manufacturing processes and distribution channels, the adaptability and efficiency of the modern economy renders virtually everything, over time, to be essentially the same: high quality, widely-available, fast and cheap.

Consumers have virtually limitless alternatives, are armed with unprecedented amounts of information and demand increasing value. Marketers have come to realize that the ability to out-flank the competition, with wider market coverage, more products, or increased service offerings, is somewhat limited. While selected product initiatives remain part of any focused growth plan, they are often unlikely to form the basis for sustainable difference.

“Research in nearly every market sector has consistently shown that consumers are overwhelmed by choices,” says Claire Booth, vice president of the global research firm Ipsos. “Most of us are well-enough satisfied with the practical performance of most brands. In the absence of difference, marketing devolves to matters of price and availability. Great brands are trading on sensory difference and emotion, which we’ve found to be consistent drivers of consumer behavior."

In a product-, and services- saturated market, growth stems from the brilliant differences that emerge from awful sameness. So, the question more and more executives are asking is, “What makes us different?”

A Clear Message

While branding is still commonly mischaracterized as tactical logo-ing, (“We just re-did our brand last year.”), new leaders are evolving the strategic discipline in a number of fascinating and compelling ways. Marketing has increasingly become an integrative organizational process, aligning the resources of a company around rapidly changing customer needs and wants. This is often a messy process, as many facets of business are seemingly inoculated against accelerated change. To facilitate the adoption of change, smart business leaders are using brand identity to reinforce the underlying values, culture and strategic intent of a company.

Having suffered through many flip-charted brainstorming sessions, most executives realize they have plenty of creative people, many of whom are surprisingly good at coming up with ideas. Leadership’s underlying challenge is choosing between opportunities, and fully aligning the organization behind those initiatives.

Through the blizzard of competing demands and ideas, brand has become an efficient organizing principle to orient innovations, identify opportunities and sort priorities. As organizations become larger and move faster, brand identity—why we do what we do— helps harness and focus the intellectual capital of business. Without this guidance, product planners, developers and marketers lack the bearing points to make truly strategic choices.

Do most employees at BMW know and understand that decisions about product and service development will be made on the basis of driving experience, technical performance, buyer self-confidence and accomplishment? Certainly. Do employees at Richard Branson’s Virgin understand that the locus of decision-making is spirited fun, value, cleverness and competitive challenge? You bet.

So, what would your employees say are the unique and defining principles of your brand? Such is the opportunity to develop brand identity. In my experience, the ability for a business to commit to a clear and meaningful reason to be, is the precursor of brand success.

Values And Meaning

As customers become buried with information and starved for time, their ability to make rational, comparative choices becomes diminished. As such, perceptions of difference become exponentially more valuable. In addition, as many consumers have met most of their rational needs, marketers must drive consumption by catalyzing new consumer wants and desires.

As a result, cultural symbols and meaning have become more effective, and therefore more important, to the strategic positioning of a company. Consumers no longer just buy things—they buy-in to ideas. Often these highly-effective brand promises reflect organizational values, reinforce personal meaning or carry cultural significance. Patagonia offers performance outerwear—and the ethos of global citizenship. Ben n’ Jerry’s whips-up wickedly good ice cream – and the values of environmental stewardship. Founded in Seattle, Athena Water is putting us sip-by-sip closer to a cure for breast cancer.

“Branding provides a promise for a particular level of service and experience, says Kristen Okerman, the Seattle-based VP of Global Marketing for commercial property giant Colliers International. “In the absence of a tangible product, a consistent and relevant brand is even more important in establishing an emotional connection with clients, predisposing them to purchase.

Brands are no longer simply what you make – they’re what you stand for.

Greater Dimension

Over the past 75 years, the concern of branding shifted from products to communications – from quality to visibility. This poses two challenges to traditional branding:

• As the economy shifts from products to services, the ability to assure quality is far more elusive;
• In a media-saturated environment, traditional communications often add to the volume, but not the clarity of the messages.

In the next leap forward, brand creators will increasingly concern themselves with the behavior of employees and the experiences that surround the delivery of products and services. Brand strategy will go beyond product and service design, to orchestrate the designed environment, messages and media, policy, processes, culture, and the integration of technology – each reinforcing the delivery of unique and memorable customer experiences.

“There is a new level of interest and sophistication in gathering customer insights,” says Ipsos’ Booth. “Beyond traditional surveys, we’re getting consumers to literally invite us into their homes and to share their lives. Using ethnography, a research discipline associated with cultural anthropology, we begin to understand the rational and emotional triggers of their brand behaviors. Marketers are seizing on these insights to shape every facet of their products and customer interactions."

Positioning strategy now rests on the assumption that consumer attitudes and beliefs about a brand can be significant indicators of purchase behavior. More than ever, businesses are measuring those perceptions, through online panels, customer advisory councils, and intercept surveys in retail stores, to understandthe ability for brand experiences to shape and reinforce these behaviors.

“Clients increasingly operate in an environment where everything can, or will be measured,” Copacino says. “We have a responsibility to our clients to be accountable for the investments they make in their brands. That responsibility doesn’t rule out risk. We’ve found that smart marketers are willing to take calculated risks, and there will be serious attention paid to those calculations.”

The rigor of assessment doesn’t sit well with some who regard branding solely as an ethereal creative endeavor, but business history has shown that that which performs gets funded. “When it comes down to it, we are charged with critical thinking, while also delighting and surprising the audience,” Copacino says. “Our business was – and remains – the skillful balance of logic and magic.”