CC BY
112
УДК 330.12
Barbara Jozefowicz
Department of General Management, Faculty of Economic Sciences and Management,
Nicolaus Copernicus University, Torun, Poland
INTRODUCTION TO BRAND - HOW TO BUILD PEOPLE TRUST
AND LOYALTY
У cmammi розглянуто поняття «бренд» та визначено його pieHi. Розкрито фунц бренду, види ризиюв пов'язаних з вибором бренду та види споживчих брендових вiдносин. Обгрунтовано uJннiсть бренду для кл'!ента та фipми.
Ключовi слова: бренд, управл'!ння брендом, piвнi бренду, функцТ бренду, iмiдж бренду, дов'ра споживач'в.
В статье рассмотрено понятие «бренд» и определены его уровни. Раскрыты функции бренда, виды рисков связанных с выбором бренда и виды потребительских брендовых отношений. Обоснована ценность бренда для клиента и фирмы.
Ключевые слова: бренд, управление брендом, уровне бренда, функции бренда, имидж бренда, доверие потребителей.
The paper considers the concept of "brand" and set its level. Reveals features the brand, types of risks associated with the choice of brand and type of consumer brand relationships. Proved the value of the brand to the customer and the company.
Keywords: brand, brand management, brand level, features a brand, brand image, consumer trust.
1. Understanding the brand
Generally every consumer knows what the brand is. Every day we meet the hundreds of brands for example during the way to work, shopping, of course on television but also when we see other people. The clothes they wear, beverages they drink, cars they drive, computers and mobiles they use etc. On every step we are receivers of messages the brands send. But why are some of them meaningless while some of them can strongly influence on our choices? What makes we trust some brands without the earlier experiences or buy more expensive product when in the same time the cheaper one is available.
What is the secret of enormous values of the best brands in the world? This question bothers many managers, heads of companies which wont to build their brands, achieve the same success. The answer is not simple. To understand this phenomenon we first need to specify what exactly brand is.
There are a lot of brand definitions and even more ways of interpretation. The most popular one was created in the 60th of XX century by American Marketing Association. AMA defined brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of the competitors" [1, p.248]. It concentrate on the oldest brand function - marking the product origin or owner in order to protection against imitation. Manufacturers wanted to indicate their products to give the customers the guarantee of authenticity. Nowadays this approach is insufficient because brands plays much more roles then formerly and it shouldn't be reduced only to the trademark as a legal instrument. Brand is not only the name or logo defended against counterfeiting but it gives the product meaning and defines its identity. That's why we need to looking for modern definition, which reflect the full brand concept.
One of the world's largest brand consulting company, Interbrand define brand as"a mixture of attributes, tangible and intangible, symbolized in a trademark, which, if managed properly, creates value and influence" [2].This description seems to contain
everything important aspects. It highlight not only material but also symbolic elements, which creates emotional relationships. And it also point out that if we want to have a powerful brand, we have to manage it to became strong.
From the same reasons Chernatony and McDonald concentrate only on strong brand. "A successful brand is an intangible product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in the face of competition" [3, p.25]. In addition, they have recognized brand as more than abunchof functional and emotional values-as element which integrate all stakeholders with the company. Through well-conceived and effectively managed brands, firms are able to build favourable reputations which enhance the confidence of staff, buyers and users.
These new brand functions show that it is very capacious entity perfectly reflected in the "brand iceberg" presented in Figure 1 .This metaphor allows us to understand that, just the same as in the case of a real iceberg, only 15% is a visible part (above the water) while the vast majority - about 85% is invisible (below the water level), according to customer visibility [4, p.25]. But unfortunately people often think first about the visible part of brands (the name, logo or packaging), rather than the unseen value-adding processes inside the organization that give brands their competitive advantages.
To ensure consumersatis faction company have to use the core competencies to produce the brand, with most suitable for buyers functional values. Externally these functional values are central to the positioning strategy. Likewise, inside the organization the emotional values are shaped by the organization's culture. Externally these emotional values are communicated to evoke a personality reflecting these values, to match consumer needs most closely.
Figure 1. The Brand Iceberg
Logo Name
J ^^^P
Marketing communications
Core competencies Positioning strategy Culture
Personality strategy
/
__T
Source:L. de Chernatony, From brand vision to brand evaluation: The Strategic Process of Growing and Strengthening Brands, Third edition, Butterworth-Heinemann, Oxford 2010, p.25.
Another words, if a company treats a brand only as a name or logo, it misses the point of branding. The challenge in brandingis to develop a deep set of meanings for the brand. Perhaps the most distinctive skill of professional marketers is their ability to create, maintain, protect, and enhance brands [5, pp.444, 445].
Generally we can distinguish three perspectives of brand interpretation: input perspective, output perspective and time perspective. The different ways of brand understanding according to each perspective presents the Table 1.
Table 1.Spectrum of Brand Interpretations
Input perspective Output perspective Time perspective
Logo Legal instrument Image Relationship Unbranded commodities References
Company Personality
Shorthand Icon
Risk reducer Brand as company
Positioning Brand as policy
Personality
Claster of values
Vision
Adding value
Identity
Source: Adapted from L. de Chernatony, op.cit., p. 30-32 and M. Goodyear, Divided by a common language, "Journal of the Market Research Society" 1996, No 38, p. 110-122.
The input perspectiveis the brand builder point of view, the output perspective includes the customers' perceptions and the time perspective is brand evolution as a continuum of consumerisation, which characterizes the degree of dialogue between marketers and consumers.
So many diverse types of understanding the brand frequently cause confusion. As a result of the different backgrounds of staff, their experience, seniority and their perceptual processes, it is likely that within the organization there are different interpretations of the organization's brands. That's why is very important in brand team to determine what exactly we mean.
2. Brand construction
Because of brand is very capacious entity includes tangible and intangible factors [6]:
• tangible factors - functional elements, otherwise known as, real, utilitarian - size, weight, wear resistance, the ability to use to specific purpose, performance, reliability -include company's visual and verbal style (e.g. name, logotype, packaging, design, colour, sound), along with any marketing materials you create, such as business cards, brochures, web sites, and blogs;
• intangible factors - virtual, invisible, symbolic, causing emotions, affecting consumers' views and ideas to meet the wider social needs of buyers - include the specific niche company serve, methods of conducting business, offered services, along with company mission and values.
It is easy to infer that the tangible area in case of strong brands is only way of communicating the intangible sphere. This last one creates the unique value for customers and, although sometimes it is difficult to explain, raises confidence. But without both of them brand couldn't play so many important roles, which will be discussed later in this article.
Figure 2. shows the interesting approach to the brand construction. According to this model brand consists of four levels [7]:
• Generic product - the most basic level, showing only functional aspects of the products; the commodity form that meets the buyer's or user's basic needs. This is the easiest aspect for competitors to copy and consequently successful brands have added values over and above this at the expected level.
• Expected level - the commodity is value engineered to satisfy a specific target's minimum purchase conditions, such as functional capabilities, availability, pricing, etc. As more buyers enter the market and as repeat buying occurs, the brand would evolve through a better matching of resources to meet customers' needs (e.g. enhanced' customer service).
• Augmented level - with increased experience, buyers and users become more sophisticated, so the brand would need to be augmented in more refined ways, with added values satisfying non-functional(e.g. emotional) as well as functional needs. For example, promotions might be directed to the user's peer group to reinforce his or her social standing through ownership of the brand.
• Potential level- With even more experience of the brand, and therefore with a greater tendency to be more critical, it is only creativity that limits the extent to which the brand can mature to the potential level. Experienced consumers recognize that competing items are often similar in terms of product formulation and that brand owners are no longer focusing only on rational functional issues, but are addressing the potential level of brands.
Based on this concept, it can be concluded that the most effective branding strategy is adding value to the product through elements from the extended and potential levels. They are the most important factors of branded product, because all the new and unique favorable physical characteristics, sooner or later are imitated by competitors. At the same time expenses incurred to produce the benefits on the potential and augmented levels are only 20-30% of the total costs of production and sales, while in70-80% determine the purchase decision made by consumers.
The difference between the brand and ordinary productis added value. Very often this added value means the emotional values, which can be difficult to articulate, but make that the substitutes are not acceptable to the consumer. All functional differences between brands become increasingly marginal, and the rapid advances in technology makes keeping them short-lived. In contrast to immaterial elements of brand, which are more likely to distinction, because the metaphorical and verbal communications are more diverse than physical characteristics [8, p.62].
Figure 2. Four levels of brand
Source: Adapted from L. de Chernatony, M. H. B. McDonald, Creating Powerful Brands, ButterworthHeinemann, Oxford 1994, p. 5.
Sothe most important feature determining the success ofa strong brand, is a kind of individualism, the whole of its unique features. The cluster of benefit soffered by that brand, creates its identity, which differentiate it from other brands.
Brand identity is the set of brand associations that the brand strategist aspires to create or maintain [9, p.43]. A useful conceptualization of brand identity was provided by Kapferer. His hexagonal identity prism helps explain the essential differences between competing brands, and is shown in Figure 3.
The six dimensions of this prism enable managers to create and assess the differentiating features of a brand. These are:
• Physique - product features, symbols and attributes;
Personality - character and attitude Relationship - beliefs and association; Culture - set of values; Reflection - customer's view of the brand; Self-Image - internal mirror of customer as user of brand.
Physique relates to the tactile features of the brand, that are recognized by consumers' senses. It is the easiest element of brand identity, but the other are more complicated.
Brand Personality is a set of human characteristics associated with a brand, for example gender, age, socio-economic class, psychographic, emotional characteristics etc. Personality is how the brand behaves. The attribution of human personality traits (like seriousness, warmth, imagination, etc.) to a brand is a way to achieve differentiation. Usually done through long-term advertising and appropriate packaging and graphics. These traits inform brand behavior through both prepared communication and through the people who represent the brand - its employees. Brand Personality, like human personality, is both distinctive and enduring. Both are built over a period of time. Refers to the outcome of all the consumer's experiences with the brand. In other words, the brand's personality is the weighted average of previous impressions. In consumer's mind, these impressions merge to form an overall concept of what to expect from brand.
Figure 3. Brand Identity Prism
E X T E R N A LI Z A TI O N
PICTURE OF RECIPIENT
I
N T E R N A LI Z A TI O N
Source: J. N. Kapferer, The new strategic brand management: creating and sustaining brand equity long term, Kogan Page, Third Edition, London 2004, s. 107.
Research showed that Polish consumers don't have difficulties to imagine brand-named product as a person. In their associations general brand is [10, p.9]:
• attractive, beautiful - 37%;
• nice - 17%;
• elegant, beautifully dressed -16%;
• neat, clean - 11%;
• healthy, strong - 9%;
• richlydressed- 8%;
• proud, haughty- 8%;
• gentleman - 3%;
• perfumed - 3%;
• trendy, modern - 2%.
It is worth to note that all these features were mentioned spontaneous by respondents, without the list or suggestions.
Each brand comes from a unique culture. Brand culture is the transition from commodity to brand require to equip the basic offer within the values, which the company, including staff, at each step will seek to strengthen. Brand culture gives meaning to brand products and consumers' behaviors. Indicates the value system and a source of inspiration and energy for the brand. It is also a place of origin, tradition and the principles functioning in the company. Culture is a set of shared assumptions and understandings about organizational functioning [11, p.5].
Culture is set of important and enduring beliefs or ideals shared by the members of a culture about what is good or desirable and what is not. Values exert major influence on the behavior of an individual and serve as broad guidelines in all situations. Values can be defined as those things that are important to or valued by someone. For brand managers very important is to understand what values are particularly important to their target market, then ensuring that they are able to deliver these. If some staff do not believe in these values, this will show in their behaviour and consumers will change to another brand.
Next part of brand identity are relationships. Thanks to the relationships with customers the brand can be successful. Relationships enable a non-material exchange between people through or with the participation of brands. These specific relationships are analogous to human relationships. Consumers simply feel the same feelings for brands as for humans, because the range of these feelings is extremely broad.
We can distinguish the following types of consumer-brand relationships [12]:
• Arranged Marriages - Non-voluntary union imposed by preferences of third party. Intended for long-term, exclusive commitment, although at low levels of affective attachment. Consumer plays subordinate role. (e.g. The acceptance by the wife a brand of toothpaste, which uses her husband)
• Casual friends/buddies - friendships low in affect and intimacy; characterised by infrequent or sporadic engagement, and few expectations for reciprocity or reward. (e.g. household cleaning products)
• Marriages of Convenience - long-term, committed relationship precipitated by environmental influence versus deliberate choice (e.g. Choosing the shop because of the location)
• Committed Partnerships - long-term, voluntarily imposed; socially supported union high in love, intimacy, trust, and a commitment to stay together despite adverse circumstances. Adherence to exclusivity rules expected (e.g. The ratio of men to sports cars)
• Best Friendships - voluntary union based on reciprocity principal, the endurance of which is ensured through the continued provision of positive rewards. Characterised by revelation of true self, honesty, and intimacy (e.g. Products for hobby, such as sports equipment).
•Compartmentalised Friendships - highly specialised, situation ally confined, enduring friendships characterized by lower intimacy than other friendship forms but higher socio-emotional rewards and interdependence. Easy entry and exit attained (e.g. cheap cosmetics).
• Kinships - long-term, non-voluntary union with lineage ties (e.g. inherited habits as to brands, such as medications kept in the home medicine cabinet).
• Courtships - interim relationship starts on the road to committed partnership contract (eg. nappies, wipes).
• Dependencies - obsessive, highly emotional, selfish attractions cemented by feeling that the other is irreplaceable. High tolerance of other's transgressions results (e.g. Long lasting relationship with the brand of skin care).
• Flings - Short-term, time-bounded engagements of high emotional reward, but devoid of commitment and reciprocity demands (e.g. The best holiday in life, samples of products).
• Secret Affairs - highly emotive, privately held relationship considered risky if exposed to others (e.g. all kinds of pleasures, such as branded lingerie).
• Enslavements - no voluntary union governed entirely by desires of the relationship partner. Involves negative feelings but persists because of circumstances.(e.g. using the telephone company because there is only one on the market).
Furthermore brand provides a basis for the customer reflecting externally something about themselves to their peers through owning the brand. An external intangible facet reflecting the customer as he or she wishes to be seen as a result of using a brand. So called: the target outward's mirror. Brand enables the external reflection by communicating certain information about the brand user. But we must remember, that this is not the image of the target customer. Brands are used for the display of identification with a particular reference group or social status. Using the brand facilitate the transmision and determine the consumer's identity. By purchasing certain brand the consumer stresses his place in the social hierarchy.
The last component of brand identity is self-image. An internal intangible facet reflecting the customer attitude towards the brand. These inner thoughts connect personal inner relationship with the brand. So called: the target internal mirror. The brand allows the user to become aware of some important information about himself. For egzample self-esteem when you use some cosmetics or time to relax over your favourite brand of coffee or tea.
The Kapferer's hexagon of brand identity shows that all these elements(sides of the hexagon) are linked and form a coherent structure. The physique and personality help the sender express purpose of the brand. Where as reflection and self-image allow to specify the recipient of this message, who is also included tobr and identity. The two other elements: relationships and culture fill the gap between the sender and the recipient. The brand identity prism has also a vertical division. Left part- physique, relationships, and reflection - are social visible elements giving the brand its outer expression. While the right half- personality, culture and self-image-constitute the internal expression of the brand, its true meaning and character [13].
Brand identity is important part of brand building process so it shouldn't be replaced with brand image. The first one is the outward expression of the brand, including its name and visual appearance. The brand's identity is its fundamental means of consumer recognition and symbolizes the brand's differentiation from competitors. Is on the sender's side. While brand image is the customer's network of associations and the brand perception. Is on the receiver's side. The image refers to the way in which certain groups of people decode all of the signals emanating from the products, services and communication covered by the brand. As shown in Figure 4. an image is a synthesis made by the public of all the various brand messages, e.g. brand name, visual symbols, products, advertisements, sponsoring, patronage, articles. An image results from decoding a message, extracting meaning, interpreting signs.
In Figure 3. we can see that not all these signs come from brand identity but also some extraneous factors speak in the brand's name and thus produce meaning, however disconnected they may actually be from it. Since brand identity has now been recognised as the prevailing concept, these three potential communication glitches can be prevented.
Figure 4. Brand identity and brand image
SENDER MESSAGES
RECEIVER
Brand identity
Other sources of inspiration
• mimicry
• opportunism
• idealism
Signals transmited
• product
• people
• places
• communication
Competition and noise
Source: J. N. Kapferer, The new strategic brand management: creating and sustaining brand equity long term, Kogan Page, Third Edition, London 2004, p. 98.
3. The importance of brand
On an average day consumers are exposed to 6000 advertisements and, each year, to more than 25 000 new products. Brands offer customers a means to choose and enable recognition within cluttered markets. In such a world, brands take away the confusion, help consumers cut through the proliferation of choices available in every product and service category. A brand is about confidence and security. There is no doubt that customers perceive the importance of a strong brand [14, pp. 5, 6]:
• 72 percent of customers say they will pay a 20 percent premium for their brand of choice, relative to the closest competitive brand. 50 percent of customers will pay a25 percent premium. 40 percent of customers will pay up to a 30 percent premium;
• 25 percent of customers state that price does not matter if they are buying a brand that owns their loyalty;
• Over 70 percent of customers want to use a brand to guide their purchase decision and over 50 percent of purchases are actually brand driven;
• peer recommendation influences almost 30 percent of all purchases made today, so a good experience by one customer with your brand may influence another's purchase decision;
• More than 50 percent of consumers believe a strong brand allows for more successful new product introductions and they are more willing to try a new product from a preferred brand because of the implied endorsement.
Nowadays brands plays a lot of useful roles. Table 2. presents these function together with the description of the consumer benefits.
Table 2. The function of the brand for the customer
Function Consumer benefit
Identification To be clearly seen, to make sense of the offer, to quickly identify the sought-after products.
Practicality To allow savings of time and energy through identical repurchasing and loyalty.
Guarantee To be sure of finding the same quality no matter where or when you buy the product or service.
Optimisation To be sure of buying the best product in its category, the best performer for a particular purpose.
Badge (symbol) To have confirmation of your self-image or the image that you present to others.
Continuity Satisfaction created by a relationship of familiarity and intimacy with the brand that you have been consuming for years.
Hedonistic Enchantment linked to the attractiveness of the brand, to its logo, to its communication and its experiential rewards.
Ethical Satisfaction linked to the responsible behaviour of the brand in its relationship with society (ecology, employment, citizenship, advertising which doesn't shock).
Source: J. N. Kapferer, op. cit., p. 23.
Brands also reduce perceived risk, and exist as soon as there is perceived risk [13, p 20]. Once the risk perceived by the buyer disappears, the brand no longer has any benefit. It is only a name on a product, and it ceases to be a choice cue, a guide or a source of added value. Table 3. provides the operational definitions of five types of perceived risk.
The perceived risk is greater if the unit price is higher or the repercussions of a bad choice are more severe. Thus the purchase of durable goods is a long-term commitment. On top of this, because humans are social animals, we judge ourselves on certain choices that we make and this explains why a large part of our social identity is built around the logos and the brands that we wear.
Table 3. Types of perceived risk
Type of perceived risks Operational definition
Financial risk Performance risk Psychological risk Social risk Physical risk What are the chances that you stand to lose money if you try an unfamiliar brand of ? What is the likelihood that there will be something wrong with an unfamiliar brand of ? What are the chances that an unfamiliar brand of will not fit in well with your self-image or self-concept? What are the chances that an unfamiliar brand of will affect the way others think of you? What are the chances that an unfamiliar brand of may not be safe?
Source: J. Jacoby, L.B. Kaplan, The components of perceived risk, Proceedings of the Third Annual Conference, 1972, Association for Consumer Research, p. 382-393.
The concept of brand equity properly explains the importance of brand. Brand equity is a set of assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or to that firm's customers [15, p.15]. It is a sum of all distinguishing qualities of a brand, drawn from all relevant stakeholders, that results in personal commitment to and demand for the brand; these differentiating thoughts and feelings make the brand valued and valuable. Strong brand generally adds value for the customer and has a potential to add value to the firm by generating marginal cash flow.
Brand can help consumers interpret, process, and store huge quantities of information about products and brands. They also can affect customers' confidence in the purchase decision (due to either past-use experience or familiarity with the brand and its characteristics). Potentially more important is the fact that both perceived quality and brand associations can enhance customers' satisfaction with the use experience.
As part of its role in adding value for the customer, brand equity can enhance programs to attract new customers or recapture old ones. A promotion, for example, which provides an incentive to try a new flavor or new use will be more effective if the brand is familiar, and if there is no need to combat a consumer skeptical of brand quality. The four brand equity dimensions can enhance brand loyalty. The perceived quality, the
associations, and the well-known name can provide reasons to buy and can affect use satisfaction. Even when they are not pivotal to brand choice, they can reassure, reducing the incentive to try others. Enhanced brand loyalty is especially important in buying time to respond when competitors innovate and obtain product advantages.
The concept of brand equity is presented in Figure 5. which shows that brand equity creates value for both the customer and the firm.
The assets and liabilities on which brand equity is based will differ from context to context. However, they can be usefully grouped into five categories:
• Brand loyalty - consists of a consumer's commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy.
• Name awareness - refers to the proportion of consumers who know the brand.
• Perceived quality - The consumer's perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives.
• Brand associations - The feelings, beliefs and knowledge that consumers have about brands. These associations are derived as a result of experiences and must be consistent with the brand positioning and the basis of differentiation. It is anything which is deep seated in customer's mind about the brand. Brand should be associated with something positive so that the customers relate your brand to being positive.
Figure 5.Brand Equity
Brand Awa ness Brand loyalty
Provides Value to Customer by Enhancing Customer's:
• Interpretation/ Processing of information
• Confidence in the Purchase decision
• Use Satisfaction
Percei vecl
Qualit y
BRAN D
EQUIT
Other Propriety Brand Assets
Provides Value to Firm by Enhancing:
• Efficiency and Effectiveness of Marketing Programs
• Brand loyalty
• Prices/Margins
• Brand Extensions
• Trade leverage
• Competitive Advantage
Source: D. A. Aaker, Managing Brand Equity - Capitalizing on the Value of a Brand Name, The Free Press, New York 1991, p. 17.
• Other proprietary brand assets—patents, trademarks, channel relationships, copyrights, design rights, proprietary expertise, databases, etc.
4. Summarizing
To summarize brands have a number of strategic functions, enabling company to [16, p.32]:
• differentiate from the competition;
• position focused message in the hearts and minds of target customers;
• persist and be consistent in marketing efforts;
• customize services to reflect personal brand;
• deliver the message clearly and quickly;
• project credibility;
• strike an emotional chord;
• create strong user loyalty.
But the best kind of loyalty is brand loyalty [13, p.14]. Forty years research has shown that the product penetration is correlated with purchase frequency. It means that strong brands have both a high market penetration rate and a high purchase frequency per buyer. There are no growth without these two routes, not only because of consumer loyalty. That's why marketers should equip their products with added values and reach meaning. Only brands
can tell a story about consumers or situation they would like to be, to provide desirable immaterial values. Building brand is the effective way to make business more profitably.
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