Sunday, February 17, 2013

What's in a brand?

What do Apple, IBM and Google have in common? They are all super brands, with a hefty $100,000 million price tag attached to the value of their brand alone (WPP, 2012).

What's in a brand? 

Within this blog, we've always tackled news relating to different brands, however it would be good to start off by understanding what actually makes a brand, and why branding is so important.

A brand can relate to any distinguishing name or symbol, such as a logo, sign, design that can identify one company, or it's products or services, from competitors. A brand also involves the image or association that comes to mind when consumers think about a particular company, product or service. Factors such as product quality, customer service and pricing will also have an impact on the brand - in fact, according to Amir Kassaei, a brand is 'the sum of all the experiences you have with a company'.

For example, when you think of McDonalds's you think about fast service, consistent food taste and quality; Kleenex is associated with a cleaning tissue that is soft yet strong.

Why is branding so important to overall business strategy?

1. Recognition

One of the key benefits of branding is that customers find it much easier to remember about a particular company. The brand in this case acts as a convenient reminder of reputation and good will. When a brand is easily recognisable, customers won't refer to 'that whatsitsname shop' or 'that consultant I met at the conference last week'.

To build recognition, a company needs to focus on unique identifiers and work hard to associate these with the company name in the minds of the public. Some examples include offering unrivalled customer service or using an unusual or eye catching colour combination (such as DHL).

2. Loyalty

Once people start building a positive experience with a recognisable brand, they are more likely to continue purchasing that product or service in future. The aim should be to build such a close bond with customers that they do not only repurchase, but they also up-sell and cross-sell to buy related items of the same brand, recommend the brand to their friends and stay away from competitors' offers. 

A strong brand identity helps to create and embed such loyalty - an example that comes to mind relates to the supposedly millions of people who have the 'Harley-Davidson' brand tattooed on their body. In some cases, customer loyalty to a brand can be so strong, that even the slightest change can have a significant impact on the way the brand is perceived. For example, when Coca-Cola decided to launch New Coke in 1985, the outrage and negative reaction that ensued by the public were so strong that Coca Cola had to retrace it's decision and go back to the 'old Coke'.

3. Price Premium

Nowadays, when competition can be extremely harsh, there can only be a few companies within a particular market that are known as the cheapest. All other market players, will need to identify ways of differentiating themselves from the rest of the market. 

A strong brand will help to achieve this - and will do so in such a way as to encourage customers to pay for the intangible benefits that they get by associating themselves with that specific brand. This might be because it makes them feel cool, clever, younger or more fashionable. Think of some people's willingness to fork out significantly more for a well branded pair of sunglasses (such as Gucci), versus an alternative unbranded pair. 

But how do you go about building a successful brand? We'll tackle this topic in our next article.

Monday, February 4, 2013

A Brandless Shopping Experience

"As we become increasingly bombarded with information and stimulation, the world is becoming a noisier place." (Selfridges & Co)From a shopping point of view, I'm sure that many can identify with this. We are constantly being targeted by  different advertising offers, discounts and bargains. The shopping experience on its own can sometimes be a noisy, stressful nightmare.When Selfridges first opened 104 years ago, Harry Gordon Selfridge launched the Silence Room where busy shoppers could easily "retire from the whirl of bargains and the build up of energy". Selfridges have now brought this back as part of their No Noise initiative.

The new Silence Room has an insulated inner-sanctum, that is shielded from the noise and human traffic of the store. The initiative also includes The Quiet Shop, where interestingly, some of the world's most recognisable brands have taken the symbolic step of removing their logos - including Levi's, Marmite, Heinz and Clinique.

And if this is not enough, Selfridges have partnered with Headspace, the modern meditation experts so that through guided meditation they can deliver peace and quiet while shopping.

What do you think of this initiative? Even though it's an attempt to de-brand, there will undoubtedly be many consumers who will clamour to get hold of these special editions of favourite brand names before they are possibly discontinued!

Sunday, February 3, 2013

Italian Brands Begin Partner Hunt In India

A clutch of Italian fashion brands is gearing up to enter India, in the latest thrust by high-end merchandise makers wanting to tap new money in a country where luxury retail is showing signs of a pick-up.

Fashion houses Moschino and Alberta Ferretti, Pollini, Gattinoni, Byblos and Scorpion Bay have signed up their entry strategy and partner search operations. Joining these brands are Brunello Cucinelli and Sergio Rossi who are also in talks for a partnership in the country.

India's luxury market is expected to touch $14.73 billion by 2015, according to industry estimates, from an estimated $8.21 billion this year. Analysts attribute it to the expanding class of high net-worth individuals in the country.

India is aleady playing host to sevelral foreign fashion brands, including Italy's Gucci, Salvatore Ferragamo, Versace, Armani, Ermenegildo Zegna, Tod's and Boggi Milano, which sell their products through local partnerships.

Not all partnerships, however, have fared well, making potential entrants doublethink their India plan. Iconic Italian brand Prada is yet to enter the country, for instance.

India recently allowed 100% FDI in single-brand retail and 51% in multi-brand retail, but with a rider that 30% of sourcing should be done locally.

Despite the easing, luxury brands still prefer partnerships, as operations are easier through such arrangements.

Source: The Economic Times | Business of Brands | February 2013 | New Delhi | India