Brands are everywhere. They are a part of our lives. But some brands are more successful than others.
How do the best brands do it — how do they get so close to us that we will have them at the top of our shopping list whenever we can? And for those aspiring brand owners, what do they have to do to be a great brand? This series of articles answers these questions and helps explain that the magic of branding is both an art and a science, coupled with a lot of hard work.
Branding is vital for long-term profitability and growth, yet few small and medium-sized enterprises (SMEs) understand what branding is and is not. This article is a guide for SMEs on the “myths” and “musts” of branding that all small and medium-sized companies should know.
- The first myth is that quality is a brand differentiator. Most Asian countries have overcome the problems of poor product quality, and smart CEOs see that product quality is no longer a differentiator. It is the price you have to pay to get into the game. If you do not have top quality products and services, you will never have a strong brand. Service quality still remains a differentiator in Asia, however, and local companies often lose out to their foreign counterparts in this area.
- Secondly, there is a common misunderstanding that branding is good advertising and design. These activities are important because they help brands communicate with customers. But without good systems, procedures, service, training and other things that form the customer’s total brand experience, these can be wasted. Importantly, the promises they make, if not delivered, can cause irreparable damage to a brand.
- Thirdly, some companies claim that as the marketplace is too crowded, branding is impossible. While competition brings with it a bigger range of products and more frequent product enhancements, the real issue is not product proliferation, but the existence of too many similar products. Rarity and authenticity are coveted by consumers but are difficult to find. Where are the innovations and groundbreaking products and services? Branding is possible in a crowded market but you cannot brand mediocrity.
- Another mantra that is commonly heard is “We know what consumers want”. There are still companies that produce ideas that turn into products which they attempt to sell with a demonic fervour, instead of concentrating on what consumers really want. This leaves a large gap between product strategy and consumer satisfaction. Finding products for consumers, not consumers for products, develops successful brands.
- A fifth mistake is to believe that more customers mean greater brand strength. Many companies try to increase their customer base in order to grow, but few focus on keeping existing customers happy as a cheaper and more effective growth strategy. Companies that neglect their existing customers are placed in jeopardy by deteriorating rates of customer retention and brand loyalty.
- Under intense competitive pressure, many firms turn to lower prices as a means of adding more brand value. The issue here is that price discounting often means less brand value — to the customer and the company. Lowering prices lowers image power, and although consumers may buy cheap things, they treat them as commodities instead of nice things to have. People will pay premiums for perceived value, but value goes beyond mere price and quality. It also includes what the company or the brand represents to customers, and what feelings consumers have for the brand.
- The last myth is that the world is rational and so is branding. Nothing could be further from the truth. The world is driven by emotion. Rational thought can lead consumers to be interested but it is emotion that sells, and emotional thoughts that companies need to elicit from consumers. Asian companies have yet to learn the power of emotion in marketing, and it is all too often that we see advertisements crammed with information about product features and attributes, instead of emotional benefits.
So, what should companies bear in mind when developing a winning brand strategy?
- The first thing to focus on is differentiation. The best strategy in developing a powerful brand is to create the perception of difference. Being seen as both different and better than the competition is the biggest step in becoming a well-known brand and not just a well-known name.
- Secondly, claim share of heart. Strong consumer relationships underpin strong brands, but companies still tend to focus on capturing “share of wallet” as opposed to “share of heart”. This philosophy might generate short-term sales but it will not build up enduring relationships. Achieving “share of heart” by delighting customers will not only produce loyal customers, it will transform those happy customers into an effective sales force. In short, share of heart leads to share of wallet.
- Thirdly, develop brand charisma. Emotion sells and companies must continually try to create an emotional association between their brand(s) and consumers. The best way to ensure that emotion is built into the brand and its relationships with consumers is to build a strong brand personality — using values that consumers like and can relate to.
- Fourthly, remember to build a brand culture. Staff training is critical to brand success. Everyone in the company must be trained to both appreciate the brand and what it stands for, and to contribute in their daily work to brand development. People deliver great brand experiences! They are your brand ambassadors.
- Fifth, install a brand management system. Every touch point with the consumer has to be handled with the utmost care to ensure that the total brand experience a person has is consistent and appropriate. This involves changing strategy, systems, technology, processes, services, products and even physical premises to engineer a great customer experience.
- Another crucial brand-building element is to balance consistency with change. While consumers like familiarity and consistency, they also want new things. New products and services are essential to give consumers modernity and relevance, but keeping the brand name and values constant adds reassurance and trust.
- Last but not least, companies must treat branding as an investment and not a cost. The appetite for brand investment in Asia is poor. Too much emphasis is placed on short-term thinking and performance, and branding fails to receive the funding it needs. All too often, the cash tap is turned on and off as the “feel-good” factor varies. It is time to realise that brands are strategic assets that can be worth multiples of the tangible net assets of a company if nurtured properly.
My challenge is this: Malaysian companies face a crossroads in branding practice and a paradigm shift in thinking is required away from the myths and towards the musts if they are to survive and prosper in the new world. But can they break away from the old behaviours?