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Brand Power

Brand Power

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Brand Power

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  1. Brand Power An exploration

  2. A Working Example to Explain Brand Power: Big Box Electronics • The Big Box Electronics category is characterized by: • Huge Dollar volume • Small margins • Domination by 2 National Chains

  3. Big Box Electronics • Both have • Big stores (U.S.) • Semi-self service • Huge numbers of SKU’s in virtually every home electronics category • Major brands • Lots of promotions and Sales • Often located proximate to each other

  4. The Consumer Electronics Store Dilemma Industry MythWhichever One Is A Right Hand Turn is where people go • How does the consumer choose? Scott CES A CES B Raj

  5. Strategic Questions • Is the myth true? • Can anything be done to drive a wedge? • What should the CES’s say about themselves?

  6. A Question • Should they talk about Products? • Or should they talk about Brands?

  7. What is a product? A product is an arrangement of physical characteristics intended for some purpose

  8. Can we look at Consumer Electronics Stores as Products? Do they have physical characteristics? Are they arranged for a purpose? Yes So attribute-focused communication is one way we could go…

  9. But, what is a brand?

  10. Can we look at Consumer Electronics Stores as Brands? Are they representations of a product, service, organization or association that are perceived to be distinct?

  11. Can we look at Consumer Electronics Stores as Brands? • The Myth says: Maybe, maybe not … • But this is what we want to know!

  12. Why are brands so important? Brands have power that can transcend the attributes and characteristics of products, because they are Perceptions of those tangible elements.

  13. Why are brands so important? • Brands Can Have Power… • Coca-Cola Is it more than cola beans, corn sweetener, prunes, spices and food coloring mixed together? • Is it more than a beverage? • Coors Light Is it more than hops, malted barley, yeast and water? • Starbucks Is it more than coffee? • USA Is it more than 50 states united? • How about Chanel, BMW, McDonalds, Exxon?

  14. Why are brands so important? • All of these are all brands with power • They have the ability to capture attention and often loyalty far above others • Think of what that means to your business • Everyday on the shelf • When introducing new products • In attracting talent • Or surviving PR crises

  15. Why are brands so important? Brand Power has different levels

  16. Brand Power Hierarchy Relate the brand to a feeling, attitude, event, perception of myself that is important to me and who I am Know that & how it has meaning Know that & how it’s different Brand Power Heard of it and know what it is Heard of it, but don’t know anything about it No awareness of the brand

  17. Brand Power Hierarchy Relate the brand to a feeling, attitude, event, perception of myself that is important to me and who I am Know that & how it has meaning Know that & how it’s different Heard of it and know what it is Brand Initiation (where brands become brands) Heard of it, but don’t know anything about it No awareness of the brand

  18. Brand Power Hierarchy Relate the brand to a feeling, attitude, event, perception of myself that is important to me and who I am Know that / how it has meaning Brand with Differentiation Know that / how it’s different Heard of it and know what it is Heard of it, but don’t know anything about it No awareness of the brand

  19. Brand Power Hierarchy Relate the brand to a feeling, attitude, event, perception of myself that is important to me and who I am Brand with relevance Know that / how it has meaning Know that / how it’s different Heard of it and know what it is Heard of it, but don’t know anything about it No awareness of the brand

  20. Brand Power Hierarchy Brand with Equity Relate the brand to a feeling, attitude, event, perception of myself that is important to me and who I am Know that / how it has meaning Know that / how it’s different Heard of it and know what it is Heard of it, but don’t know anything about it No awareness of the brand

  21. Brand Power Hierarchy Relate the brand to a feeling, attitude, event, perception of myself that is important to me and who I am To Build Brand Power, We need to know where we are… And determine how to get to higher levels Know that / how it has meaning Know that / how it’s different Heard of it and know what it is Heard of it, but don’t know anything about it No awareness of the brand

  22. Achieving Brand Power Brand Relevance Brand Equity Brand Differentiation + + = Brand Power Brand Power is a function of Relevance, Differentiaton and EquityBP=f(D,R,BE)

  23. Understanding Brands Brand Differentiation Characteristics and perceptions that are perceived to be different vs. alternatives Differentiation buys trial

  24. Understanding Brands Differentiation 1 Box 1 Rock 1 Clever “care and feeding” owners manual = 1 million units in a couple months, but gone in a month more, because… DIFFERENT, BUT, NO RELEVANCE

  25. Understanding Brands Brand Relevance Degree to which the brand is applicable to, or makes a connection with, people’s lifestyles, issues / needs / desires • Relevance gains repeat consideration

  26. Understanding Brands Relevance Combine: Side Doors Low Step in Height Folding / removable seats With Families and Dogs = a revolutionary new vehicular class that has held almost a 10 share of all light vehicles since 1990

  27. Understanding Brands 2 Types of Relevance • Personal Relevance: compatibility with • Preferences / personal tastes • Beliefs and values • Perceptions of peer acceptance and social impact on the individual • Peer Relevance: • This can accelerate / decelerate / stall and reverse progression on the brand power scale • If enough “peers” start moving in a direction, the brand will go with it

  28. Understanding Brands Brand Equity Derived from experience-based associations with the brand, and the emotional connections that grow from them Brand Equity provides insulation

  29. Understanding Brands Brand Equity Derived from experience-based associations with the brand, and the emotional connections that grow from them • Sturgis Bike Rally • Annual 10 day event • Unadvertised • Draws 550,000 bikers • 3/4 are over 40 • Tax revenue alone -- over $1mm

  30. Brand Equity -- Breaking it down Brand Linkings The Roots of Equity Brand Linkings are Associations with the brand created through experiences -- events, people, places

  31. How -- Breaking it down -- brand equity (cont) Equity Connections Associations become Ideas, Memories and Feelings that represent how the brand can / does connect to their lives With repetition, rehearsal and peer reinforcement, the linkings between the consumer and the brand become equity connections Repetition Rehearsal Peer Reinforcement Brand Linkings The Roots of Equity Associations with the brand created through experiences -- events, people, places

  32. Brand Equity -- breaking it down = ∑ Equity Connections Brand Equity Brand Equity is the meaning, significance or purpose that is derived from the Connections made with the brand through associations with experiences -- events, people, places. Yes, equities are built on characteristics, but it is the meaning of those characteristics, achieved through experience that has power BE = ∑(event, people, place associations with the brand * the connection people make between those association and their lives * value of that connection to them)

  33. Achieving Brand Power Brand Equity Brand Relevance Brand Differentiation + + = Brand Power Brand Power is a function of Relevance, Differentiation and EquityBP=f(D,R,BE)

  34. Brand Power Hierarchy Brand with Equity Relate the brand to a feeling, attitude, event, percpetion of myself that is important to me and who I am Brand with Relevance Know that / how it has meaning Know that / how it’s different Brand with Differentiation Heard of it and know what it is Brand Heard of it, but don’t know anything about it No awareness of the brand

  35. Follow-up assignment • Where do you think the Consumer Electronic Stores are on the brand power index? • What brand issues do they need to address? • How would you position each brand?

  36. Follow-up assignment • Hint -- what is positioning? Brand Positioning Expressing the relationship between the consumer and the brand in a unique (versus competition) and compelling way Positioning is built on the differentiation, meaning and equity experiences associated with the brand

  37. Follow-up assignment • Hint #2 -- applying brand power as a diagnostic tool

  38. Bonus Question -- (much harder) What are the volume, and profit implications in the short and long run of aligning with a positionings you have recommended? Upsides? Risks? How might you go about assessing this?