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Brand Reality Model – Making and keeping promises

By Tony Apéria

Fewer but stronger brands

Brand Equity is a crucial concept that every company needs to understand. The topic of brand equity is prominent because of:

The financial department’s interest in placing a value on brands for the purpose of purchasing, selling, licensing and balance sheet The marketing department’s interest in the ability to retain current customers, the ability to attract new customers, and the ability to react against the frequency of short-term price competition that dominates many product classes

Regardless of which definition is used, it is clear that the company appreciates strong brands because they are an asset which contributes to profitability, that the consumer appreciates them because they reduce uncertainty and that the distribution channels appreciate them because they create sales in their outlets. One of the pioneers of the concept was the prominent professor David Aaker who defined four important components of brand equity:

awareness, associations, perceived quality and brand loyalty (Aaker, 1991).

Creating a brand is very expensive and therefore efforts must be made with focus on the brands with the greatest potential of survival and financial returns. A well known international example is Unilever who is striving to cut their brand portfolio from 1600 brands to 400. A Swedish example is Electrolux (the world leading appliance company) who has chosen to refine their portfolio and increase the focus on the brand Electrolux.

The developing process can be understood through the tensions in the competitive situation. The thesis is that global supplier companies compete horizontally, focusing on core categories and core brands. Through powerful consumer marketing efforts, they ”force” their way to shelfspace as the consumers demand their merchandise in the stores. The big and powerful supplier companies have considerable large-scale production advantages when it comes to product development, advertising, consumer insight and production. The effect is that brands owned by owners not as rich in resources will lose market shares and profitability.

The antihesis is the increasing growth of powerful retail chains who build strong relations with their consumers and who won’t offer shelfspace to suppliers who don’t provide discount or contributions to retailer marketing. They compete with their suppliers using their own private labels, creating vertical competition. The retail chains’ strong negotiation power and investments in private labels means that weaker brands who are not demanded by the consumers are excluded from stock. Those suppliers will get stuck between stronger supplier brands and the retail private label brands.

The synthesis is the cooperation strategy, ECR (Efficient Customer Response) and Category Management which is setting a standard and starting-point, thesis, to the future development.

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All three aspects of development, thesis, antithesis and synthesis, lead to fewer but stronger brands.

The competition and co-operation mentioned above is basically about two areas of limited resources. One is ”mindspace”, referring to consumer consciousness. The other is “shelfspace”, which is the retail space available to show the product. The only way supplier brands will survive is to create mindspace in order to guarantee shelfspace. Fewer and stronger brands will move focus from individual product brands to the companies behind them. The future will only have room for strong brands, those well known and appreciated by the customers. Therefore, as brand managers we need to increase our understanding concerning the future role of our brand. This means broadening the definition of stakeholder groups. No longer are consumers and retail business the only important stakeholders. Other groups to consider are the employees, the owners, and society at large.

The consumer strategy, ”mindspace”, must have its starting point in a product and/or service that is differentiated from the competitors. If the consumer looks upon all offers as equal, price will determine the choice. Differentiation springs from a set of functional and psychological qualities linked to the offer, as perceived by the consumer. These qualities make the brand promise. The promise is linked to both conscious and subconscious needs of the consumer.

As the consumer needs, desires and expectations change over time, brand communication and positioning has to change as well. Not faster or slower, but in the same pace.

Figure 1 shows five phases which brands evolve through. This is a process which Goodyear labels the Continuum of Consumerism. De phases can briefly be characterised by the certain factors: the role of brands, the characteristics of the market, segmentation and advertising required, and the kinds of market research and analysis conducted to understand the consumer. The perspective of this text is the later stages 3 to 5, i.e. from classic branding to customer based marketing and post-modern marketing. These phases are relevant in mature markets where consumers see through simple marketing ploys and gimmicks.

consumers see through simple marketing ploys and gimmicks. Figure 1 “Continuum of Consumerism” (Goodyear, 1998,

Figure 1 “Continuum of Consumerism” (Goodyear, 1998, p.186).

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It is very important that a brand manager understands how this development affects her particular brand, It is especially important to those in the danger zone of getting stuck between private labels and global brands. All brand managers must form a strategy for their brand management and learn to apply brand relations management.

One consequence of fewer and stronger brands is that companies focus on their exisiting strong brands and use them to launch new products or services. The question is no longer “what name would we give to this product or service”, instead one should ask “which brand will gain the most from this product or service”? The brand owner capitalizes or existing brands rather than creating new ones. Capitalization of brands means that the brand manager:

Reduces the number of brands in the brand portfolio and focuses on a few

Includes news within an existing brand promise already established between brand and consumer

Through advertising communicates news within the brands value system and promise

Manages and nurtures existing brands with news instead of creating new brands for every new offer

Develops strategies for subbrands when news do not fit with existing brand promises

As brands become fewer and stronger, brand extensions become more common. Brand driven business development can occur as line extensions (extensions within the same category), brand extensions (extensions to a new category) and co-branding (extensions through brand alliances).

When a new product or service is launched under an existing and well known brand, consumer expectations are raised. The probability of trial purchase becomes larger than if a completely new brand was used. If the experience is then in line with expectations, repeat purchases are likely. Thus launching a new offer under an existing brand can increase demand. But of course, there are also risks associated with this strategy. If the new product or service fails to live up to expectations, the brand will be hurt across the range of the brand. The brand can be diluted or even lost.

Corporate reputation

The beginning of the 21 st century has featured unparalleled corporate scandals. In Sweden, readers have had almost daily reports on, among others, Skandia and Systembolaget. Beyond offering commercial products and services, corporations must also act on another arena – the societal arena. In this light, Nordic Brand Academy and the Reputation Institute conducted a study on the most visible companies in Sweden during 2004-2006.

More than 1000 respondents were initially, in the pre-study, asked what companies have the best, and the worst, reputation of the ones active in Sweden. In the main study close to 3000 respondents were interviewed. The results are summarized in an index which describes corporate reputation. The index is based on 20 questions in six areas.

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The Top Tier

81,1 73,4 73,1 72,4 71,7 69,7 66,9 66,2 63,8 58,5 57,7 57,6 49,8 46,8 45,0
81,1
73,4
73,1
72,4
71,7
69,7
66,9
66,2
63,8
58,5
57,7
57,6
49,8
46,8
45,0
41,5
IKEA
Volvo
Microsoft
Nokia
ICA
Hennes & Mauritz
Saab
Ericsson
ABB
Systembolaget
McDonald's
Telia Sonera
SJ
Lidl
Posten
Skandia

Figure 2 The most esteemed companies in Sweden 2005, Nordic Brand Academy and the Reputation Institute.

The strength of this model is that it shows how the company as a whole builds a strong reputation. The responsibility for corporate reputation is not in the marketing department, rather all parts of the organization has to work as a whole. Ultimately, it is the management and board of the company that has to take the responsibility for these processes.

The importance of deep consumer insight

A central theme of this article is the importance of deep consumer insights. Brands can not be

built without a fundamental and deep understanding of needs, wishes, attitudes and behaviours of the consumers. Such information can be collected through quantitative as well

as qualitative methods. Quantitative methods are based on samples representative of the

consumer group in question, large numbers of respondents and standardized response alternatives which through data analysis yield “hard data” in numbers, figures and charts. Quantitative methods answer questions like “how many” and “how much”. Qualitiative methods are not concerned with representation or statistical significance, but seek to answer questions like “why” and “how”, look not to how often something happens, but rather to why it happens.

Qualitative surveys can provide some answers from consumers regarding the question “why”. But as has been mentioned earlier, this is not sufficient. A brand manager also needs to dig deeper, so called diagnostic or implicit analyses, to understand what is going on in the consumers’ subconscious.

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In our lives, most of our actions, feelings and attitudes are governed by our subconscious. If one only looks at the conscious part of the mind, only studying explicit and premeditated explanations, much remains unseen, like a huge iceberg where only the tip is visible above the surface. It is important to get explicit answers to concrete questions and it is important to quantify things. But to achieve the necessary deep understanding of consumers, you need more than that.

Theoretical literature reviews and practical case studies have shown that brand building today can not focus only on the particular brand. When synthesis, partnerships, increasingly becomes the norm the analysis must cover the product category of which the brand is a part. These analysis can not be made without analysis of both the category as well as the particular brands within it, all in relation to how it creates value for the consumer. From the manufacturer’s pont of view, its brand and its value creation is the most important and the brand is part of a product category of the retail chain that sells it. For the retail chain, the most important aspect is how the category as a whole creates value and how this builds the brand of the retail chain.

When we look at the product category, two aspects become important, on one hand how the category should be defined and delimited from a consumer need perspective, on the other hand how the category should be prioritized from a retailers perspective – how important it is to build a retail brand. When the categorization is done, the question is: what consumer value is created in this category? The answer to this lies within consumer needs, and consumers do not have identical needs. Needs vary with need states, i.e. different uses and occasions. Research shows that one and the same consumer can actually be in several different need states at different times. There can be a larger difference in the same consumer at two different occasions than between two consumers on the same occasion. Static segmentation based on for instance socioeconomic variables, that always assign consumers to the same segment are therefore not very useful for understanding what drives a consumers brand choice. Dynamic segmentation, based on need states, is much more useful. In the moment the product on the shelf meets the customer in the store, there is a meeting between old and new, of past consumer experience and established brand relations and of the present signals from package design, promotions, and future expectations on consumption and gratification.

The Brand Reality Model

The author has developed a model of eight phases in the brand building process. The phases show how the gaps between management, employees and external stakeholders can be bridged.

In the middle of the model is brand strategy – the purpose is to bridge the gap between brand strategy and business strategy. Brand management can´t be seen as an isolated island it has to be connected to business.

Brand Promise

The first four phases are mostly concerned with identifying and establishing a clear brand promise.

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Figure 3 Brand Reality Model – Making and keeping promises (Apéria, 2001, and Apéria and

Figure 3 Brand Reality Model – Making and keeping promises (Apéria, 2001, and Apéria and Back, 2004).

The model is about bridging gaps – ultimately between what is promised and what is delivered. In the first three phases, different stakeholders are analysed, from the internal stakeholders in management and then other employees, to the external groups, mainly the customer perspective.

Phase 1 – Vision

The purpose of the first phase is to create a value driven organization and thereby increase motivation and dedication within the company. Value driven organizations also have better opportunities for attracting people with values in line with the organization, which in turn makes it easier to deliver on the promise. A powerful way of developing the value driven organization is to create pictures of the future and communicate a strong, compelling vision to the employees. Brand building must start from within, as the employees are ultimately those who must deliver on the brand promise.

The first phase involves three components which can be summarized in the overarching term vision. These are:

1. Mission

2. Organizational values

3. Envisioned future

We share Collins and Porras (1996) view that a company has on one hand an inner core that shows the values and its reason for being, but also a view of the future. The mission and the organizational values are the components of the core ideology which gives the organization stability and continuity. To understand the mission and the values one must look to the stable

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core of the organization. The envisioned future, on the other hand, gives the organization a course and leads the way to the future. This picture of the future can in turn be divided into challenging audacious goals and a living description of the future. To find the vision is, unlike the mission and values, a creative process.

A symbol for this balance between on one side stability and on the other side change is yin

and yang. The concept of yin and yang are included in Collins and Porras (1996) description

of the overarching term vision. They see yin as the core ideology and yang as the envisioned

future of the company. Yin represents stability and safety. It shows what defines the company and why it exists. Yang represents change; what the company aspires to be, achieve and create. Both are equally important and characterize companies that are consistently successful.

Purpose

To provide an uplifting experience that enriches people´s daily lives

Values

Passion for everything we do

Integrity

Entrepreneurial spirit and drive

Pride in winning and success

Respect for our partners

BHAGS

To become an enduring, great company with the most recognized and respected brand in the world, known for inspiring and nurturing the human spirit

world, known for inspiring and nurturing the human spirit Figure 4 Preserve the core and stimulate

Figure 4 Preserve the core and stimulate progress, example with Starbucks (Collins and Porras, 1996, p.67).

Mission

To create a genuine and inspiring vision and mission is the first step in creating a value driven organisation. The mission is presented before the vision for two reasons. First, it is critical that all employees understand the mission of the organization. If employees are not clear and

in agreement of their mission, there can be no focus. Second, it is important that they

understand the mission before they are presented with the envisioned future. Through

answering two questions, the mission can be defined:

Why does this company exist? What is its main contribution? What is the reason for being for the company, beside generating money?

How can the mission motivate, inspire, and guide the employees?

According to Barrett (1998) a mission should be characterized by the following four components:

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1.

It should describe the main business of the company

2. It should give room for development of new products and services

3. It should inspire customers

4. It should inspire employees

He elaborates on this as follows: ”The mission statement should inspire employees and resonate with their inner motivations. It should also align with customers´ concerns. Employees want to find personal fulfilment through their work. Customers want superiour products and services that are affordable, environmentally friendly, and produced under conditions that do not degrade human dignity.”

The word mission comes from latin, where “missio” means to send or transfer. This becomes clear from its religious use, where Christianity has been spreading its words through missions through the centuries. From a branding perspective, the word is not much different from its traditional and etymological root. The company mission is as much about spreading its promise, much in the way of missionaries are spreading the promises of their religions.

According to Collins and Porras the mission should inspire the employees into the future. They consider it to be a mistake to limit the mission only to commercial offers and customers as organisations who fail to identify a “true” mission risk getting trapped in short term profits focus. Profit maximizing is not what makes an employee go to work an hour early or work late on a Sunday night. Profit and shareholder value is more of a side effect and never the true mission of a company. This is confirmed in Swedish research against the general public carried out by Nordic Brand Academy and Reputation Institute 2005.

Not Sure Generate profits for shareholders 2% 4% Plus broad social responsibility 29% Responsibility to
Not Sure
Generate profits for
shareholders
2%
4%
Plus broad social
responsibility
29%
Responsibility to
shareholders AND
those affected by
activities

64%

Figure 5 The purpose of companies 2005, Nordic Brand Academy and the Reputation Institute.

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Organizational values

The second component of a company vision is organizational values. Collins and Porras (1996) describe values as the necessary and consistently valid belief foundation of the company. They are a smaller number of timeless guiding principles. Values do not require external justification, the important thing is that they are motivating for the employees. They mean that a company should have no more than five organizational values, as a larger number would create confusion among the employees. Strong brands tend to have few values. Only a few values can ever be part of the core. Those who don’t can be replaced or removed. It is the organisation itself which defines its values. Values are therefore not a result of marketplace competition, rather it is a reflection of what defines the organization. The values should however be consistent over time. If the market and society change, the company should still be loyal to the few core organizational values it holds. The values give its employees a framework which guides them to the right decisions. A company with clear and shared values also attract new employees who share them.

Envisioned future

The third component of the first phase is the envisioned future. The envisioned future is unlike the mission and the organizational values made in a creative process. It describes the dream the organisation wants to make real. This component is divided into challenging and audascious goals coupled with a vivid description of the future. The challenging goal should challenge the employees. The vivid description of the future should give a clear and inspiring view of where the company is going. It translates the vision from words to mental pictures which show the employees what they can be part of in their daily work.

The use of a envisioned future in a brand context also has many parallells to the religious meaning. Through a vision, the company creates a picture. Barrett (1998) argues that he vision explains the future the company wants to realise. The vision both motivates and unites the employees. Beyond this, it also creates goodwill in society. De Chernatony (2001) describes vision as the management view of the future in ten years time.

Phase 2 – Culture

According to de Chernatony (2001), an appropriate and inclusive culture can be a competitive advantage. When products become increasingly similar, corporate culture can be the main point of differentiation between different offers. An appropriate culture motivates the employees so that they can work enthusiastically for personal and organizational goals. To understand how the vision can be incorporated in the organisation we must understand the current corporate culture. We must identify the gaps between the intentions of the management team, the explicit values and the current corporate culture. All parts of the organization should be part of this analysis.

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Apéria (2002-2005) has in some twenty surveys of corporate culture used projective techniques to understand what Schein (1984) calls the basic assumptions of the company. Some examples of groups that have been studied are: top management, main office in relation to local branches, marketing, sales representatives, retailers, production, front and back office functions, and geography. In such analyses one can pinpoint to what extent the company has a common culture. Often one finds that different organisational units have distinct subcultures which can be more or less suitable.

Research by among others Kotter and Heskett 1992 and Schein 1984 shows that corporate culture consists of two levels; a conscious and an subconscious level. The subconscious level consists of the values shared among a given group. They tend to persist over time and are difficult to change. The conscious level is more visible and can be studied in for instance the behavioural patterns expected from new employees. Both levels affect each other.

The usual explanation for this is that employee values affect their actions. But the opposite can also be the case; the ways employees are encouraged to act can change their values. We have chosen to use Schein’s (1984) model for analysing a corporations culture in three levels. To truly understand the corporate culture it is not enough to perform traditional interviews with rational questions. We must go beyond the obvious and superficial to reach what lies under the surface. It is there we find the underlying assumptions that define the corporate culture. Schein (1984) elaborates on the definition of culture: “Corporate culture is the pattern of basic assumptions a certain group has invented, discovered or developed in order to handle their external adaptation problems and internal integration problems and which have worked sufficiently well to be seen as valid, and therefore being taught to new members as the right way of perceiving, thinking and feeling in relation to these problems.”

Schein (1984) defines the three levels of culture as

1. Artefacts

2. Values

3. Basic assumptions

Artefacts

As an example of visible artefacts, consider how the head office and local branches have been designed. Are the employees seated in open landscape or do they have individual offices with closed doors? Is the management team seated on the top level of the office or are they seated among the others in an office landscape? Does management have reserved parking places? What dress codes are present in the company? Do all wear formal clothes or does everyone have the freedom to wear whatever they want? The artefacts can be seen as expressions of corporate culture.

Values

To analyze why employees behave the way they do we have to look for values. It is important to remember that they only represent the manifest or espoused values of a culture. But we must also remember that these values only are the explicit ones, in other words the ones the values expressed in interviews based on rational questions.

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Underlying assumptions

According to Schein it is necessary to explore the subcouncious and reach the basic assumptions. It is this set of assumptions that determine how the members of the group

experience their situation, think and feel. It is especially important to separate the values from underlying assumptions as the latter are subconscious and rooted deeper than the more superficially defined values. Hatch and Schultz (2001) propose that the vision of the leadership and the corporate culture must be synchronized with external image if the company

is to reach its goals. They state that the corporate brands strategic stars: vision, culture and

image, must be aligned with each other. They propose a number of diagnostic questions which help identify where gap exist between the strategic stars. For example, a gap between vision and culture exists when top management points in a direction not understood nor supported by the employees.

In order to fully understand the brand we now turn to the external stakeholders.

Phase 3 - Identify

The third phase involves five steps. These are:

1. Understanding the corporate reputation and the factors that drive it

2. Understanding the category – the frame of reference

3. Dynamic need segmentation

4. Identification of the brand and its competitors’ images

a. Brand elements

b. Brand associations

c. Brand personality

5. Consumer dialogue especially based on true loyals

1. Corporate reputation

Corporate reputation is a resource that management needs to build, manage and nurture. We must have trust and faith in our companies. In the case of Skandia, their reputation was virtually destroyed during the fall of 2003. According to Fombrun (2000), a good reputation affects company stakeholders in a variety of ways:

It affects the ability of the company to recruit the right kind of employees and become

a

company that attracts people

It

makes people more likely to buy the products and services offered by the company,

as well as increasing their loyalty

It strengthens the company’s position in society, it becomes a positive example

It

improves relations to the financial market

2.

Category insight

A

brand is part of a category which in turn is related to the needs and wants of the consumers

as

well as the retailer and their brand building ambitions. The brand manager must understand

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the category from these two perspectives and this understanding forms the base for the brand building process.

3. Dynamic needs-based segmentation

Consumers choice of brands are increasingly governed by occasions and specific reasons for usage. Through this analysis one should understand how well the brand meets need states relevant to the category. By extending the analysis to competitors one will see clearly who is the most serious competitors to the brand. We can also learn whether there are unmet needs within the category, which can inform development of new products or services.

4. Identify the brand and its competitors within the category

In this analysis we must understand the brand elements, associations and personality. This is not how the organization sees the brand internally and not how we ideally would want the brand to be perceived, but the way it is seen by consumers today. The identification should therefore be done by users of the category. There is little point in talking to people not using the category as they have little knowledge of it – they are more or less just guessing. The analysis should be done in different subgroups, where the true loyal is likely to be the most important.

Elements:

From review of theory and pratical cases I have found the following brand components to be the most relevant:

Brand name

Brand figure mark (logotype)

Symbols

Packaging

Colors

The brand elements communicate, explicitly and implicitly. The elements must, to communicate clearly, harmonize with the brand personality and key associations.

Key associations: Associations are the building blocks of a brand. They come from both functional as well as psychological attributes that the consumer attach to the brand.

Personality: Consumers choose brands with personalities that match their own or their own ideal personality. Personality differentiates the brand, better than functional attributes can, and the personality is the base for consumer brand relations.

These three components should fit together as a whole. To understand how the components harmonise with personality one needs to use projective techniques, since the elements communicate on both conscious and subconscious levels.

5. Consumer dialogue starting from the true loyals

Deep understanding of consumers is necessary to develop relations between them and the brand. This understanding is achieved through a dialogue, primarily through surveys and research of consumers attitudes and behaviours. Especially important are to understand the

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acceptance of the brand’s heavy users before components or associations are changed or new features are introduced. There are many examples of product launches that were aborted due to lack of acceptance among the heavy users of the brand, despite positive results in research among wider groups of loyal users.

Deep consumer insight is necessary to identify, maintain and develop relations with the true loyals. The loyal can be broken down into three groups. The first are the vulnerable. They are distinguished by being higher in behavioural loyalty than in attitudinal loyalty. In other words, they buy the products and services but do not like the brand as much as one would expect. The other group are prospects. They like the brand but do not buy the brand as much as one would expect them to. The third group are the true loyals. They like the brand and buy it a lot. What characterizes the truly loyal for a particular brand? How can we use what we know of this group to keep and grow it? Then we should also look to how we can use our knowledge to keep our vulnerable customers and get our prospects to act more according to their attitudes. How many vulnerable, prospects and true loyals does our brand have, compared to competitors, and how do the groups develop over time? Baldinger and Rubinson conclusion is that healthy brands should strive to obtain a higher proportion of true loyals compared to competing brands, and more prospects than vulnerables. They also suggest that many market leading brands lack the level of positive attitude that is needed for long-term, continuous consumer loyalty.

Figure 6 shows a model for such cell analysis.

loyalty. Figure 6 shows a model for such cell analysis. Figure 6 Cell analysis from attitudes

Figure 6 Cell analysis from attitudes and behaviors (Baldinger and Rubinson, 1996,p.32).

Fewer but stronger brands mean that existing brands to an increasing extent are used for launching new products. Through the entire product development process a dialogue with consumers should be maintained to evaluate the prospects for successful product launch. Product launches fail for different reasons, for example lack of consumer interest (the offer is not positioned well and therefore does not invite to sufficient amounts of trial), the product does not meet expectations (and therefore there is a lack of repeat purchases) or the launch itself is poorly executed. Perseverance is important, as it often takes up to two years to establish a new product.

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Phase 4 – Define

The main goal here is to define the brand promise. To define the promise we have looked at the brand from different perspectives. During phase one and two, the internal perspective was used. In phase three the brand was analysed from an external perspective. These three phases are the basis for formulation of the brand identity and its core values. The define phase covers five areas:

1. Defining the brand identity

2. Defining the brand values

3. Defining wanted relations

4. Defining consumer value

5. Defining the brand territory

1. Defining the brand identity

Two models well suited to defining brand identity are Kapferer´s brand identity prism and Aaker’s model of core and extended brand identity. I have chosen to illustrate the Kapferer model below which shows six important facets of brand identity.

below which shows six important facets of brand identity. Figure 7 Brand identity prism (Kapferer, 1997,

Figure 7 Brand identity prism (Kapferer, 1997, p.100).

2. Defining the core values of the brand

As mentioned earlier, the building blocks of core values are the key associations and the brand personality. The core values are central to the brand promise – they establish an implicit contract between the brand and the consumer. This contract promises to always deliver a certain personality, a certain perceived quality and specific psychological advantages which the consumer seeks. The core values must therefore be stable and enduring so that the promise is perceived as dependable and different from other promises.

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3.

Defining wanted relations

The brand personality is the base for relations between the brand and the consumers. Warm and harmonic brands create emotional relations, analytical and competent brands create more rational and functionally oriented relations.

What characterises the current relations with the brand and what is the consumer experience of the relation? We propose the following five dimensions to answer that question:

1. Is penetration low or high? (How many are reached by the brand?)

2. Is frequency low or high? (How often are they reached by the brand?)

3. Superficial or intense relations? (How intense is the encounter?)

4. Planning – low or high? (Are the meetings spontaneous or pre-meditated?)

5. Short- or long term relation (how long has the relation been in place?)

4. Defining consumer value

When a brand achieves a strong position in the mind of the consumer, perceived value increases. This value is created through familiarity, psychological and functional benefits and through the brand personality. Price also matters. But the pricing parameter is complex. A high price can both reduce and increase perceived value. It increases value if it signals a higher quality. In the case of frequently purchased consumer goods, higher price often means lower value however. In defining consumer value, price sensitivity must be explored. If price sensitivity is very high it can be wasteful to seek close relations with consumers in the first place. Value is a function between what consumers perceive that they get and what they pay for it (in money, time, effort, etc.). The brands who offer a good ratio of benefit to perceived cost gain market share. If large groups of the market perceive the products and services as more or less the same, price becomes more important. This is why brand managers seek to differentiate their brands in various ways – to avoid competing on price.

Strong brands are often either a so called premium brand or value based brand. Premium brands are targeted to niches with high purchasing power with a relatively high price and within these niches strong perceived benefits are offered. Value based brands have somewhat lower price points but target the largest segment of the market. Then there are also a wider variety of brands with weaker benefits and lower prices, who practice transactional marketing. So within a category, three groups are often present: premium brands, value based brands and economy brands. Through the right mix of functional and psychological benefits and a fitting brand personality, the brand manager creates value for the consumer.

5. Defining the brand territory

To define the brand territory one must conduct interviews with the brand users in order to map the brand associations as well as how (if at all) they can be extended. Four zones can be identified: the inner core, the outer core, the extension zone, and the forbidden zone. In figure 8 we map these four zones.

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Figur 8 Brand territory. We have now described and discussed the first four phases of

Figur 8 Brand territory.

We have now described and discussed the first four phases of the Brand Reality Model. The result so far is that a proper brand promise has been defined. In the next phases we will cover brand architecture, engaging employees and consumers (implementing the promise among the stakeholders).

Brand Delivery

In the first four phases we have identified the brand promise. The promise has been defined from the management, employee and external stakeholder perspectives. We will now cover how to implement the promise and ensuring its delivery.

Phase 5 – Architecture

In the fifth phase, the brand hierarchy and architecture is analyzed. A consequence of fewer but stronger brands is that the hierarchy must be established and a brand architecture must be defined.

The fifth phase concerns two areas which can be collectively labelled architecture:

Brand hierachy

Brand architecture

Brand hierarchy

The trend of fewer but stronger brands means that brands can be analyzed on different levels – some are strictly commercial, some are not. Often a brand hierarchy consists of the corporate level, the umbrella brand level, the product level, and the ingredient level.

Many companies build their corporate brand at the same time as they are building strong product brands. The product brands target consumers and customers in the market. When the corporate brand is discussed, stakeholders beyond the obvious commercial ones become more

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important. The corporate brand is aimed at all prioritised stakeholder groups, such as customers, employees, society, owners, and media/journalists.

Brand architecture

The questions central to the analysis of a brand promise are also relevant to the brand architecture. An analysis can be done in five steps. Before the analysis is started, one must consider the internal perspective, in other words the mission, vision, organizational values and the corporate culture and how they all affect the brand architecture. The key question is what the management team wants to achieve with the brand architecture?

1. All brands in the brand portfolio are identified, including brands part of brand alliances (also known as co-branding) with other companies’ brands. One must also consider how brands are used in interactive media such as the internet.

2. Identification of strategic roles of the brands within the portfolio. Example of relevant questions includes which brands have strategic importance and what brands presently bring the most profit.

3. Identification of the market roles of the brands. Some examples of market roles are subbrands, co-branding and to what extent the brand drives the purchase decision.

4. The structure of the portfolio is described. All brands in a portfolio have relations to the other brands. In this step, a graphic representation of how the brands relate to each other is made.

5. All the above should be documented in a brand manual.

5. All the above should be documented in a brand manual. Figure 9 Model for brand

Figure 9 Model for brand architecture (Aaker och Joachimsthaler, 2000, p.135).

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The goal for this analysis of brand architecture is to be able to create a strong corporate brand

at the same time as other needs can be met, such as building strong individual brands. The

resources used for brand building must be allocated optimally. There are synergies between the corporate brand and the other brands which need to be identified. One should establish how different promises on the corporate and product level can work together in the best

possible fashion. Through explicating the brand architecture the corporate brand can be used

as a platform for growth. Various individual brands can have unique promises which build on

relevant differentiation. The corporate brand can be introduced as a guarantor for these brands. It role can be to stand behind the individual product brands and provide them with values like quality, leadership, and trust.

Phase 6 – Engage

Now is the time to draw the conclusion from phases 1 to 5 and particularly the phases concerning the brand identity (“identify”) and brand architecture (“architecture”). The brand promise must be fulfilled and delivered in all activities. To start with, the brand needs to be positioned. A ”Brand Positioning Statement” needs to be formulated. Phase six encompasses four steps:

1. Supporting organizational values

2. Positioning and Brand Positioning Statement (BPS)

3. Tactical testing

4. Charging the brand

Supporting organizational values

In the earliest phases (phase one and two) we discussed vision and culture. We also

established the organizational values. These values are now to be implemented in the organisation. The goal is to create so called brand champions, employees who have both the understanding and the motivation to fulfil the brand promise. To make this possible one needs visible leadership, education, seminars, empowerment and internal communications. It is crucial that clear links are made between the organizational values and the core values of the brand. The organizational values should support the core values.

Positioning and Brand Positioning Statement (BPS)

Are we to use a central or differentiated positioning strategy? Often there is an original segment within a category which serves as a “hub” and drives the volume sales. Beyond that there are often growth segments which give an indication of where the market is going. The challenge for positioning is to position the brand where it has the best possibilities of sustainable success. One must also understand how well the brand fits the strategy of other parts of the value chain, such as retailers.

A brand which goes after the central position must be able to fulfil the criteria which stem

from the drivers of the category and it must be perceived as one of the most relevant brands

within that category. The market leader often occupies the central position in its category and

is also often perceived as synonymous with the category. The market leader can then further

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strengthen this position through brand architecture that segments the market and provides new benefits through product development. Regardless of whether a central or differentiated strategy is chosen, the following questions should be answered:

Is the brands mission, organizational values, vision and culture in line with the proposed positioning? Is the position possible to implement internally? Are the employees motivated and willing to deliver this promise? Is the position credible from a management and employee perspective?

Is the positioning prioritised, exciting and credible? Is the positioning relevant and credible from consumer and other external stakeholders’ perspective?

Is the chosen positioning relevant to the consumers conscious and subconscious needs? Do we understand, on a deeper level, what driver the category/segment?

Is the positioning differentiating? Does the brand offer the best solution to the consumers needs? In what respects does the brand offer similar benefits as the competition and in what respects is the brand unique? Can the brand offer the key associations that are most important for volume sales? In addition to differentiating associations, the brand also needs to offer more basic associations in relation to the category.

Is the brands origin, image and codes in line with the proposed positioning? Is the chosen positioning possible to implement, in other words is the positioning credible in relation to the expectations that existing image and codes have raised in the consumer as well as in other parts of the value chain?

Do the functional and psychological benefits and the brand personality sum up to an integrated whole? Can all of it be summed up in a strong, compelling big idea? Is the brand personality in line with the chosen positioning?

Can we consistently build and deliver on this position? Do we have the necessary resources available: research and development, management competence, marketing competence, financial resources and the determination needed for a long term perspective?

In our proposal for a BPS, nine components are involved. The BPS should clarify who is the target group, why and how the consumer should relate to the brand, when the brand should be used and how the marketing communication should be used.

1. The corporate brand level

- The corporate brand promise

- The corporate brand personality

- The legitimate brand territory

2. The (product) brand level

- The most important promise given by the brand

- Functional benefits

- Psychological benefits

- The brand personality

- Relations created by the brand personality

3. Consumer insights

- Need states to be adressed

- Psychological insights into the consumer

- Demographical insights about the consumer

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- Insight into the true loyals (the ones both attitudinally and behaviourally loyal).

4. Communication goals and advertising idea

- Is there a great big idea?

- How do we create awareness?

- How do we induce trial?

- How do we drive repeat purchase?

5. Prising strategy

- What is the price sensitivity for this brand? Is a premium pricing, value pricing, or economy pricing strategy to be used?

6. Strategy for developing existing and new brand occasions

7. Brand driven business development

- Line extensions (extensions in an existing category)

- Vertical extensions (the price of the brand extendedup and/or down in the category)

- Brand extensions (expansions in a new category)

8. Identified main competitor

- The main competitor in the category

- Comeptitors in different need segments

9. Chosen partners

- Strategy for partnerships and alliances

- Strategy for brand allainces (co-branding)

Tactical testing

Tactical testing can be performed both before the launch of a new brand or branded product as well as in the ongoing brand management activities. One examines through testing how certain stimuli can affect the brand promise or what behavioural segments it can appeal to. Both quantitative and qualitative testing can be used. The tests should be conducted on a sample of brand users and brand loyals (prospects, vulnerables and true loyals). Experienced brand managers ensure an ongoing consumer dialogue which includes, among other things, tests of the effectiveness of the marketing communication. Large supplier companies have found systematic and efficient ways of maintaining such dialogues.

Charging the brand

The term charging refers to the requirement that all activities should convey the wanted key associations and the brand personality in order to achieve and maintain the wanted position. The purpose is to use integrated marketing to break through the media clutter and induce trail- and repeat purchases. When awareness is raised it should be the aim to achive not only deep but also broad awareness, to thereby link the brand to other subcategories and associations. By linking a brand to other possible usage occasions the scope of the brand, its relevance, can be increased. In the implementation phase all employees must focus on delivering the brand promise.

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Phase 7 – Capitalise

When the brand is strong, when brand equity has been built, it can be used to leverage business development. Research shows that purely functional brands have a more narrow potential for extension than more symbolically charged brands. Phase 7 consists of three components:

1. Brand development

2. Capitalisation

3. Consolidation

Brand development

The brand must continually be cared for and kept a jour with consumer needs and wants. Examples of areas which need attention are customer service, the product/service itself, the sensory elements, symbols, positioning, price, brand components, packaging, design, marketing communication, channels of distribution and the web site. To manage the brand over time is a must to be able to use it in business development.

Capitalisation

A strong brand with good equity can use this asset in business development. Vision and culture, core values of the brand, the brand promise and the relevant territory all delimit how the brand can be extended. There are boundaries which need to be considered or brand dilution or other damage can result. There are three main extension strategies which can be considered:

1. Line extensions (extension in the present category)

2. Brand extensions (extension in a new category)

3. Co-branding (alliances with other brands)

(extension in a new category) 3. Co-branding (alliances with other brands) Figure 10 Brand driven business

Figure 10 Brand driven business development.

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The horizontal axis in figure 10 shows how risk varies in the different strategies. The vertical axis shows how the price parameter can be used in existing and new categories. In our case studies we have good examples of capitalisation strategies in action. Here is a short summary:

Consolidation

Brand owners who have chaos in their brand portfolios should refrain to immediately leveraging such brands for further capitalization. A better strategy is to consolidate the portfolio, pruning it by focusing on the strongest and most profitable brands.

By an audit of the existing portfolio the brands with the largest potential can be supported and nurtured. The recources of the firm, like competence, time and money can be put behind the right brands. The weaker brands can be incorporated under the stronger brands or be divested.

Phase 8 – Measure

The final phase concerns the control systems which can be used to measure brand health over time. The brand should be controlled both internally and externally. Phase 11 can be summarized in two steps.

1. Internal control of organizational values

2. External control over the brand

of organizational values 2. External control over the brand Figure 11 Overall control system for the

Figure 11 Overall control system for the brand assets.

Internal control over organizational values

By studying the corporate culture and the organizational values one can understand the degree to which the employees are “living the brand”. To what degree do vision, mission and values

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concern the employees? How many of them are brand champions? In figure 11, this is shown as B1 and B2.

External control of the brand

Different control systems can be used to measure the brand over time.

Control of corporate reputation (C1-C6 in figure 11)

Short term returns of marketing communications

Long term brand research

Market share analysis

Cell analysis of the loyals (prospects, vulnerables and true loyals)

Integrated control systems for the prioritized stakeholder groups (D1-D4 in figure 11)

Earlier, we described a way of analysing corporate reputation. The six dimensions that are most important for corporate reputation are shown under C in figure 11. In the brand control systems different systems of feedback can be used to monitor brand health over time. Such systems can have various levels of ambition. Some companies use daily measures of consumer attitudes (continuous tracking). Often such systems use around one hundred interviews every week. In such tracking studies, one could for example measure brand awareness, buying behaviour, advertising awareness and advertising attitudes. Over time, in depth analyses can be made on the amassed data. Effects can be analysed, and should be studied both in the short and long terms.

The short term effects tend to be the effects of campaigns, such as advertising. Such analyses tend to focus on the degree of exposure in the intended target group as well as the linkage of the message to the brand. Longer term effects are more concerned with brand awareness, associations, loyalty and attitudes. Figure 11 (A1-A4) provides examples of dimensions of interest to such analyses. Awareness can be measured on both spontaneous as well as aided levels.

In the frequently purchased consumer goods sector, market shares are measured by the research company ACNielsen. A powerful way of studying brand loyalty is to perform a cell analysis on the share of prospects (the ones with higher attitudinal loyalty than behavioural loyalty), vulnerables (the ones with lower attitudinal loyalty than behavioural loyalty) and the true loyals (who are loyal both in attitude and behaviour).

The brand personality is more resistant to change than awareness, associations and attitudes. The personality is therefore as important to measure continually but can instead be mapped in detail with 2-3 year intervals. Behavioural segmentation is also changing slowly, consumers underlying needs tend to be rather stable. The development of consumer needs is normally well covered by measurement with three year intervals.

In this article I have presented the holistic Brand Reality Model that tries to bridge the gap between brand promise and brand delivery. It is not enough to give a promise, the promise

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must be delivered in all activities by all employees. The model also shows that we need to align branding with business strategy. I would like to end this chapter by emphasizing two important topics. First, the hart of the model is business strategy. As marketers we need to show business relevance, we need to prove that we deliver results. Secondly, the source of success originates from better understanding of our stakeholders. The two most important ones are our employees and our customers/consumers.

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