DON’T YOU KNOW WHAT BRANDING IS?

I’ll never forget the morning when I saw a young man at the old hospital site in Montego Bay erecting a feather banner 2 or 3 times his height. Just like 18-20 others nearby.

“What are you doing?” I asked. “Branding. Can’t you see?” “Yeah, what’s that?” “Branding! Don’t you know what branding is?” I moved on.

BRAND LOYALTY YOUR BEST ASSET

There are very few strategic assets available to a company that can provide a long-lasting competitive advantage, and even then, the time span of the advantage is getting shorter. Brands are one of them, along with R&D, a real consumer orientation, an efficiency culture (read cost cutting), employee involvement, and the capacity to change and react rapidly.

Managers know that the best kind of loyalty is brand loyalty, not price loyalty or bargain loyalty, even though as a first step it is useful to create behavioural barriers to exit.

THE USAIN BOLT BRAND

Amazingly, all types of organisations or even individuals now want to be managed like brands: like Usain Bolt. No matter that he lost to Gatlin in his final 100-metre race in London this past weekend. The Usain Bolt brand is so powerful and generates so much cash that Forbes estimates his net worth at US$62M.

And where did all this money come from? Not from winning races. It’s mostly from Puma — the athletic outfitting giant — by way of endorsements.

IT TAKES MORE THAN BRANDING TO BUILD A BRAND

Although communication is necessary to create a brand, it is far from being sufficient. Certainly a brand encapsulates in its name and its visual symbol all the goodwill created by the positive experiences of clients or prospects with the organisation, its products, its channels, its stores, its communication and its people.

However, this means that it is necessary to manage these points of contact (from product or service to channel management, to advertising, to Internet site, to word of mouth, the organisation’s ethics, and so on) in an integrated and focused way.

This is a core skill at the heart of effective branding. Paradoxically, it takes more than branding to build a brand.

EMPOWERED CLIENTS

With the Web, clients are empowered as never before. Let’s say your doctor diagnoses a certain condition and you feel like getting another opinion. What do you do? Go to another doctor? Or check Google?

The ability to check Google and what it entails has been the end of the road for many average brands. Only those that maximise delight will survive, whether they offer extremely low prices or a rewarding experience, service or performance.

It is the end of hollow brands, without identity. Retailers are also more powerful than many of the brands they distribute. Reality check: they can simply say I’m ok in that category, and that may be the end of your brand in that store. And they may even produce the data to prove it.

BUILDING EQUITY AND SALES TARGETS

The goal of strategy is to build a sustainable advantage over competition, and brands are very important ways of achieving this. In a growing number of advanced companies, top managers’ salaries are based on three critical criteria: sales, profitability and brand equity.

And speaking of sales, the CEO for the Ford Motor Company was fired just a couple of months ago. And the stated reason? Sales targets were not being met.

ASKING 30% MORE FOR BRAND EQUITY

For decades the value of a company was measured in terms of its buildings and land, plant and equipment. It is only recently that we have realised that its real value lies outside — in the minds of potential customers. Here’s a personal example.

Last week I needed oil-based coolant for my not-so-new-anymore car which runs a temperature at times. So off I go to my favourite RUBIS service station here in city Kingston.

Now you know I’m going to read the labels and buy the one with the highest boilover point. They’ve got two products claiming F365 degrees. Each contains 1 litre, but there is a difference in price. A brand I don’t know sells for $2,000, while the Chevron, a trusted brand in the Americas, is being sold for $2,600. Now that’s 30 per cent more.

Although the evidence is screaming at me, I still ask the manager for advice. She takes up the bottle of Chevron and says, “I trust this brand. But I don’t know the other brand.”

Is the comfort of a familiar brand worth a 30 per cent price premium to you in a case like this? And which one would you buy? The known brand, or the unknown own brand?

Herman D Alvaranga, FCIM, MBA, is president of the Caribbean School of Sales & Marketing (CSSM). E-mail hdalvaranga@cssm.edu.jm