What is a brand?

What is a brand? This is one question for which nearly everyone appears to have a different answer. There is good reason for this. Over the course of time, the definition has dramatically evolved.

As William Safire explains in an issue of the New York Times Magazine , the term “brand” first referred to the searing of a mark into an animal. This “brand-marking” concept ultimately became known as a trademark and by the 20th century, items that were trademark labeled became known as brands. This set the stage for companies to use clever names as a means to create brand distinction and drive brand loyalty.

Generations later, David Ogilvy re-invented how to define a brand with the concept of “brand image.” Combining catchy logos, clever taglines and creative advertising, the purpose was not only to generate awareness and portray product attributes but to evoke a positive emotional response — either through identification or aspiration — in the mind and heart of the buyer.

Today, the proliferation of multiple cable channels and the omnipresence of the Internet have once again shifted the marketing paradigm. While the ability to distribute information on a host of issues has become much easier, the ability to guarantee penetration of target audiences through traditional means has become more difficult,. As Tom Peters articulated in Fast Company in 1997, “the Web makes the case for branding more directly than any package goods or consumer product ever could…So, how do you know which sites are worth visiting? The answer: branding. The site you go back to are the sites you trust….The brand is a promise of the value you’ll receive.”

For brand managers, this has changed the rules of engagement — from what is sold to how it is sold. A brand is now not only used to create image and foster product sales but has become a mechanism to sell broader company issues.

As a result, brand development is not only aimed at customers but at clients and investors who individually and collectively assign value to a company or product. Bearing this in mind, there are three major themes that brand managers must critically assess to develop brand strategies in today’s marketplace.

1. Brand as a Superior Product or Service – Over the Course of Time

At the heart of any meaningful brand strategy is a company or product of “value.” Companies can build recognition through strong marketing efforts (as the dot.com era so unabashedly revealed) but true brands build reputations on the sustainable delivery of quality goods and services. No degree of communications or clever marketing can mask a bad product or flawed business plan. A “smoke and mirrors” approach to launching a company can drive recognition and promote sales but it cannot solve an underlying business problem.

Tiffany, for example, has established such a high standard for products, that its name is now used as an adjective —”the tiffany approach” to doing things. Google is another great example of this phenomenon. Emerging after the market dominance of competing search engines Yahoo and MSN, Google’s simple, clean approach and easy-to-find results, have made it a favorite. Today, Google is a public company with a high-flying stock price. Internet users don’t search for information, they “google” it.

Quality brands are also known for standing the test of time even if the company falls on difficult times. Mercedes, for example, continues to connote engineering mastery and performance — even as its consumer rankings have slipped. And IBM, after enduring tough years and re-directing its business focus is still a blue-chip competitor in technology consulting and services.

2. Brand as an Experience

Creative marketing sets the stage for differentiating a company in the marketplace and promoting its attributes. But in today’s market, brand managers can no longer rely on traditional communications methods. Instead, they must employ a holistic approach that embraces an “experiential” component in bringing the brand to life.

For starters, brand development must begin with a robust corporate identity. Contrary to conventional wisdom, this is not limited to creating a logo and creative tagline. Rather, it must include a positioning exercise to develop a look, feel and supporting messages that capture the style and culture of a company.

Advertising then brings a brand to life by creating a story around a company’s products and services. While the number of channels has caused a re-shuffling of print, broadcast and web-based advertising strategies, advertising remains an essential element in the brand-building process. Public relations is then used to create “buzz” about a company through stories in credible, third-party media outlets.

By combining positioning, advertising and public relations approaches, the stage is set for companies to create brand experience — or in effect, how a buyer experiences a company or product. Marketers have become increasingly aware that in a media-saturated world where it is difficult to secure a meaningful share of voice, creating a positive interaction with clients and consumers is the best way to generate excitement, attract new business and affect long-term brand loyalty.

Target is a company that has successfully differentiated itself through brand experience. In contrast to Wal-Mart — that delivers on a promise to offer the lowest possible price — Target competes by being “hip” and offering items that are not deemed to be bargain basement properties. From the color and design of its stores, to the products it sells, to the alliances it has established with popular designers, Target has turned the downscale notion of shopping at a major discount department store into an upbeat, “cool” experience. In fact, Target customers make this distinction by saying that they shop at “Tar-Jay.”

Product lines also create brand experience. Cosmetic companies have long achieved this goal in department stores. For example, the Estee Lauder counter looks and feels very different from its European competitor, Lancome, even though they target the same customer. Similarly, Clinique bears an image that stands in sharp contrast to Prescriptives although they both sell products aimed at “healthy looking skin” for a younger generation. What differentiates these brand experiences — all within a finite amount of space — is the style of the counter; the packaging; the promotional items; the quality of the accessories; and the look and attitude of the sales personnel.

A more novel example of creating brand experience is how companies showcase a variety of their products in a department store or “big-box” retailer setting. For a company like Sears’ Kenmore or Rubbermaid that markets multiple products, product placement is no longer sufficient to ensure customer attention and share of market. As a result, many companies are creating environmental, product settings that give consumers an opportunity to test one product, try others and see overall, how multiple products relate to one another.

Even the beleaguered airline industry is moving to an experience-based branding model. As The Wall Street Journal reported in the Tuesday, April 7th issue, “As the airline industry is increasingly squeezed by economics, the days of passengers identifying with a certain brand are essentially over.” Consequently, airlines are creating new ways to connect with passengers and copying the JetBlue marketing strategy that plays up unique offerings and style. Virgin Atlantic, for example, has recently launched a new London-Miami flight known as “The Trance Atlantic” featuring flat beds, a bar and bartender, and a chance for a massage. Likening the flight as “a close second to Air Force One,” Virgin’s vice president of sales and marketing for North America says, “we feel like we are in the experience business as much as the transportation business.”

Interestingly enough, the business-to-business environment — although historically disinterested in broad-scale brand communications efforts — has long invested in brand experience. Overall, companies operating in this environment have understood that the quality, style and delivery of their products and services create reputation that drives relationships, which in turn delivers business results. This is brand promise in its most basic form.

For example, institutionally focused financial service firms tend to promote conservative images through their offices and collateral materials, and they create client events that showcase intellectual capital — their true product offering. Conversely, technology firms selling to a corporate marketplace present more modern environments that feature high-tech innovations — both their current products as well as prototypes for future introductions. As with JetBlue, the emphasis is on unique product offerings that drive customer and client relationships.

3. Brand as a Financial Product

If there is a lasting impact of the New Economy phenomenon, it is the recognition that brand plays an important role in promoting a company’s stock price. While the days of a “branded” entity going public without a profitable financial record are over, it is evident that brand reputation continues to play a role in the investment decision-making process of both retail investors and professional money managers.

For starters, companies understand that the web plays a role in not only selling their products but in selling their stock. As e-commerce becomes a more prominent feature of many company websites, a growing number of investor relations sub-sites have emerged. In some instances, these sites include a DRIP (Direct Re-Investment Program) mechanism that allows current stock holders to buy additional shares.

There is also a move to elevate a brand to the status of a line-item on a company’s balance sheet. While some brand consulting companies have developed an approach to assigning brand value, more importantly, the Financial Accounting Supervisory Board (FASB) has now gotten into the act. The FASB is looking at how to formalize the valuation process by creating a financial formula that would assign a tangible value to this intangible element.

Clearly, brand development has been a critical component of the marketing construct for a long time – the lifeblood for company and product survival. With the assigning of financial value, brand development has sufficiently risen in importance to even greater influence decisions in a company’s “C-Suite.” For marketing and communications professionals, this should be music to their ears.

This issue of Insights is the viewpoint of Maria J. Lilly and does not necessarily reflect the views of the other Associates.

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