Marketing strategy goes through phases, much like a child goes through infancy, childhood, adolescence, and adulthood. At each phase, the focus changes. So, too in marketing strategy. When I first started learning and teaching marketing strategy, customer satisfaction was the rage. Then it was customer value, which looks at both customer satisfaction and cost. The current rage is brand. Brand includes both perceptions of value and customer satisfaction, but goes beyond these to encompass all customer thoughts and feelings related to a particular brand. I use the metaphor of a hologram to describe what a brand is to its customers — it doesn’t have substance, but customers see it and some customers might see a slightly different image than others.
So, we see that as marketing strategy has moved through each phase, it has come to a realization that customers are multi-faceted and marketing strategy has adjusted to include additional facets. So, marketing strategy hasn’t as much moved past its earlier concerns for customer satisfaction or value, as recognized that a product is more than either of those. Marketing strategy also recognizes that success comes through addressing both the cognitive (thoughts) and affective (feeling) elements of customer need.
The first strategic question is how valuable is a brand?
A brand is so valuable that accountants have begun a discussion of including it as an asset on a company’s balance sheet. Currently, brand value shows up under the obscure title of goodwill (or related category) to reflect the amount paid for a firm above the value of its tangible assets, like property and equipment.
As an example, consider the brand value of the Coke brand. It doesn’t show up on Coke‘s books, but we get a clear view of its value when you think about the situation arising when Coke sought to change the formula for its signature product. Remember the hording and protests this change engendered? Efforts to force the company to reconsider resulted in a switch back to the original Coke formula within a few short weeks. The Coke brand has meaning to its customers and they don’t like someone messing with their brand, even Coke. Coke later successfully used these findings in developing their marketing strategy using this nostalgia with to the Coke brand.
Another good example is iPad, from Apple. Apple sold $2 million iPads in less than 2 months, despite early reviews suggesting the iPad was a product without a market — not quite phone, not quite computer. Meanwhile, sales of iPad have caused Apple stock to climb, allowing it to surpass rivals for the first time. In part, this is a reaction from customers who hold positive views of the Apple brand as innovative, trendy, and having lots of cool applications, apps. Consumers also see themselves in a positive light when they own Apple products, like the iPhone, Mac, and iPod.
The next strategic question is how do you build a brand?
While the first question is easy, this question is hard. This is where a consistent, sound, comprehensive marketing strategy is needed. You don’t build a brand overnight, although you can destroy one overnight. Look at what happened to Tiger Woods, John Edwards, and Gov. Sanford (R-SC) when their extra-marital affairs were uncovered. It cost them endorsements, an election, and support for legislative initiatives. The same happens to brands associated with scandal — like BP and its gigantic, uncontrollable oil spill.
In building a strong brand, its important to remember that the brand must resonate with your target audience — what are they like, what do they desire, what characteristics do they value , who do they identify with … This is why branding must take place as part of an overall marketing strategy; it involves not just where you say things, how you say them, or how often you say things (which is where traditional advertising lives), but what you say about the brand. For instance, consider the example of Coke mentioned earlier. Coke executives recognized the place Coke products held in the minds of its consumers — its brand image — which was one wrapped up with nostalgia for a simpler time of sharing friends and family. They used this in creating their effective advertising campaign.
Marketing strategy related to branding uses market research to uncover brand meanings or meanings that can successfully be used in building a positive brand image, media to convey this brand image, product placement (in videos and other entertainment options like video games) to help strengthen and deepen the brand image, and social networks to help this brand image go viral.
What is your company doing to help build a strong brand? What tools are you using to gauge the success of these strategies? Are you building a brand as part of an overall marketing strategy or is it a stand-alone piece of your marketing?