5 basic understandings of brand marketing

When it comes to brands, there are a thousand definitions for a thousand experts. Although a mature mind allows different viewpoints to coexist, when everyone is unclear about the definition of the brand, the efficiency of brand management will be greatly reduced.

For example, if we conduct a competition in the field of brand management, I think the following debate may arise in China:

• A: Xibei Youmiancun has a good brand. Xibei Youmiancun used "I love you", which not only clarified the pronunciation of the uncommon Chinese character "莜", but also created a kissing discount festival.
• B: Starbucks’ brand is great. Starbucks has become the third living space for the white-collar class. Customers follow wherever the store opens, and Starbucks is rent-free when it opens in shopping malls.
• C: Xiaomi's brand is great. From mobile phones, computers, and televisions to toothbrushes, towels, and thermos cups, no matter what the category, customers will still pay for it.
• D: P&G's brands are great. The brand manager is responsible for the entire process of brand management, coordinating R&D, production, sales, finance and other departments, making dozens of brands become industry leaders.

Which brand do you think is better? In fact, what they said is all right, but they are all just blind men groping in the dark:

• A is about the design creativity of Xibei Youmiancun’s brand symbol
• B is talking about the cooperation advantage brought by customer recognition of the Starbucks brand
• C refers to the added value assets created by Xiaomi's brand extension
• D is about the management effectiveness of P&G's brand architecture and organization

Grant has witnessed similar debates in some companies. Every point of view in the company is very convincing, but the brand they are talking about is completely different. The chickens were talking to different ducks, and the ducks were talking to different geese. A carefully prepared brainstorming session turned out to be a one-day trip to the "farm".

In the Internet age of information explosion, everyone is a self-media, and every internet celebrity is dressed as an expert. The routine articles that are mass-produced on an assembly line mean that many readers can only understand what online writers have written. New terms, new ways of playing, just to collect this kind of IQ tax.

Although brand theories emerge in an endless stream, the essence of brand remains unchanged. Just as riding horses and sitting in sedan chairs in ancient times have become driving cars and flying in modern times, what you consider when traveling are still speed, safety, convenience, and status compliance. Such characteristics are the basic basis for your understanding of things.

Regarding the definition of brand, there are also four basic cognitive bases, which are the foundation of all brand theories:

1. Brand is the name and logo that distinguishes different companies and products - commodity symbol (corresponding to Xibei Youmiancun mentioned by A)
2. Brand is the cognitive content and rules that reflect consumers’ thoughts and emotions – customer cognition (corresponding to Starbucks mentioned by B)
3. Brand is an asset that realizes the appreciation, accumulation and trading of commercial value - commercial assets (corresponding to Xiaomi mentioned by C)
4. Brand is an organizational system that guides each department of an enterprise to play a marketing role - corporate organization (corresponding to P&G mentioned by D)

01 Brand is a symbol of product

The English word "brand" comes from the Old Norse word "Brandr", which means "burn". People at that time would use hot brands to mark private property such as livestock to distinguish it from other people's property.

In the Middle Ages, European craftsmen popularized this method and branded various products so that customers could identify the manufacturer of the products. For example, brewers put whiskey into wooden barrels branded with their own names to prevent other vendors from replacing the original with their own.

The Oxford Dictionary defines brand as "a term used to demonstrate ownership, as a mark of quality, or for other purposes." This was the original brand. A brand is a commodity symbol that provides producers with product differentiation and legal protection and helps consumers identify specific products.

The character “莜” (yóu) in Xibei Youmian Village is an uncommon character and is difficult to be spread orally and recognized by customers. The logo designed by Hua & Hua Consulting for Xibei Youmiancun may look complex in structure, but it uses the homonym of "I love you" to help customers recognize the brand more quickly.

The three hotpot brands, Dalongyi, Xiaolongyan and Xiaolongkan, obviously do not pay attention to this aspect. Not only are the characters 嫣 (yàn) and 燚 (yì) unfamiliar in shape and pronunciation, but all three brands use the name structure of "X龙X", which is very easy to confuse. They can be said to be the most troublesome brand names for customers in the history of the catering industry.

Sometimes, a brand as a product symbol can affect the survival of a company.

New Balance, an American brand known as the "King of Running Shoes", had its Chinese name "New Balance" registered as a trademark by a Chinese agent. Later, Chinese companies rushed to register homophonic trademarks such as "New Balance" and "Xin Bai Lun", causing New Balance's market to be legally occupied by a large number of counterfeit products.

In 2013, New Balance was sued by Zhou Lelun, the trademark squatter, for using the "新百伦" trademark. As a result, Zhou Lelun was awarded 5 million yuan in compensation from New Balance in the final trial.

Japan's national brand MUJI has also been sued by its Chinese counterfeiter MUJI. Now MUJI products are legally available on major e-commerce platforms.

Japanese original MUJI

Chinese knockoffs of MUJI

The product symbol is the brand’s “identity card”. If there is a problem with the “identity card”, other brand work will be castles in the air.

02 Brand is customer perception

When a brand is merely a symbol of a product, it is like the signs on the streets and alleys and cannot retain the attention of customers. When you try to understand a sign or even start shopping in a store, the sign begins to become synonymous with customer perception - the brand.

When you see Luckin Coffee, you think of coupons and value for money, but when you see Starbucks, you think of high quality and a petty bourgeoisie social space.

Why do you have different perceptions and reactions to different brands? Because each brand forms a unique perception chain. The brand perception chain uses the principle of conditioned reflex to stimulate you subtly again and again, guiding you to form specific psychological feelings and behavioral patterns.

High-end cosmetics brand Estee Lauder hired Yang Mi as its image spokesperson, using Yang Mi's beauty and elegance to influence consumers' perception of Estee Lauder. Ultimately, even without Yang Mi's endorsement, Estee Lauder's products can still evoke consumers' fantasies of beauty and elegance.

Brand as customer perception means that brand is no longer just a product of the enterprise, but the result of co-creation between the enterprise and consumers. The positioning theory proposed by Al Ries and Jack Trout is based on this concept.

As time goes by, business forms continue to evolve and the meanings carried by brands become increasingly rich.

When a brand needs to build credibility, it can ask experts to endorse it or present certification from an authoritative organization to establish a safe and reliable customer perception. For example, health care brands such as By-Health and Melatonin will register for "blue hat" qualifications.

When a brand needs to capture a certain characteristic of the market demand, it can use graphics, texts, videos and other communication materials to place them in various media to establish labeled customer awareness. For example, Winona occupies the recognition of sensitive skin care, and HFP occupies the recognition of ingredient efficacy skin care.

Popular communication methods such as IP and national trends, no matter how brilliantly they are promoted, are generally derivatives of the customer's perception of the brand concept.

03 Brand is a business asset

David Aaker, the "father of brand assets", proposed the concept of brand assets. Brand assets refer to assets associated with brand names and logos that can increase or decrease the value of products and services for companies and customers.

Since a brand is regarded as an asset, it must possess the three leverage attributes of an asset: it can be appreciated, accumulated, and traded.

1. Added value: brand premium

The high-end brand Xiaoguan Tea claims that it is "handmade by eight tea-making masters" and "each can is handmade by a leading master", so a 40-gram Xiaoguan Tea can be sold for at least 500 yuan, making it the "Hermes" of the tea industry.

Someone calculated that based on the sales volume of small can tea, if eight masters were asked to make tea by hand, each master would have to fry 1,466 kilograms of fresh tea leaves every day on average, while the average tea frying master could only fry 30-40 kilograms a day. Could it be that the eight masters neither eat nor drink, but make tea day and night? "The master is tired" became a hot topic on the Internet.

Although Xiaoguan Tea later explained that each can was personally supervised by a tea-making master and not roasted, it could not escape criticism from the media and consumers.

The leverage benefits of brand premium are very common, but consumers may think that "only outsiders can chant sutras."

Fashion designer Giorgio Armani founded the famous luxury brand Armani. He has personally designed clothes for former US President Clinton and the world's richest man Bill Gates.

Today, Armani's clothing is no longer designed and produced by Giorgio Armani alone. But based on past brand recognition, customers are still willing to accept the premium for Armani clothing.

2. Accumulative: Brand extension

As a leader in technology consumer products, Xiaomi has become an ecological chain brand. Xiaomi’s core business is mobile phones, which has expanded into multiple categories including computers, televisions, air conditioners, and washing machines. It is difficult to define what kind of product Xiaomi is.

The famous luxury brand Hermès started out with leather goods and gradually expanded into categories such as jewelry, perfume, watches, and shoes, and consumers still compete for its products.

A product symbol with strong customer recognition can absorb profits from multiple categories like a black hole and accumulate more value.

3. Tradeable: Brand licensing and transfer

In 2012, Nanjiren embarked on a crazy brand licensing journey. As of 2019, Nanjiren had as many as 5,800 authorized stores, with revenue from brand licensing and related services reaching 1.3 billion yuan, and the gross profit margin of brand licensing reaching 93%. As a result, Antarctic’s “private label” business was criticized by the media.

In fact, brand licensing is a common asset operation behavior. Even Tong Ren Tang, which believes that “even if the preparation process is complicated, we will never save on labor, and even if the product is expensive, we will never reduce the material resources”, has a brand licensing model.

International brands are no exception. Philips' TV business was sold to Chinese company TPV Technology in September 2010. All Philips TVs you can buy are purely "Made in China".

Moreover, brand authorization and transfer are protected by law, which involve complex economic principles and cannot be judged solely based on intuition and morality.

The three properties of brand assets, namely, value-added, accumulative and tradable, determine the leverage effect of brand growth.

04 Brand is a corporate organization

If you only operate a single brand of products, brand management is intuitive and clear; if you have a large brand product system, you need to sort out the brand structure and organize the management capabilities of each brand.

The success of small brands is often based on the personal abilities of their founders, but the success of large brands must be based on the organizational abilities of the company.

There are many companies in China that have built successful brands in a certain segment, but problems begin to arise once they operate across categories and multiple brands. This growth bottleneck is not only about the brand capabilities of product symbols and customer cognition, but also about the brand capabilities of corporate organizations.

As the aircraft carrier of fast-moving consumer goods brands, P&G supports dozens of successful brands such as Head & Shoulders, Safeguard, SK-II, and Olay, and the foundation behind this is its organizational capabilities.

Neil McElroy of Procter & Gamble pioneered the brand manager system.

In order to avoid chaos and disorder in marketing work and lack of organizational support, companies need to establish brand managers who are responsible for the marketing plans of specific brands and coordinate relationships with departments such as R&D, production, sales, logistics and finance.

The position of a brand manager in Procter & Gamble is similar to that of a product manager in an Internet company. Nowadays, brand managers in many Chinese companies are only responsible for advertising and new media, which is equivalent to a "functionally castrated" brand manager. It should be more accurately called a communication manager.

Kotler Consulting Group has sorted out brand management systems for Fortune 500 companies such as AVIC International and Michelin, empowering organizational capabilities to achieve global development. This is based on the idea of ​​brand as a corporate organization.

05 Brand management is a systematic project

What is the brand?

Brand is a combination of four concepts: product symbol, customer perception, business assets and corporate organization. The four are closely linked, forming the core context of brand development and determining the brand leverage effect (Brand Leverage).

However, in the eyes of many people, branding means advertising. Advertising, media and creativity have almost become synonymous with branding and even marketing. This view is prevalent, in part, because the advertising industry has the largest and strongest voice in the field of brand management.

Those who sell steamed buns wish that steamed buns were the staple food of the whole world, but those who sell rice, noodles and sesame cakes express their dissatisfaction. Advertising is important, but it is only one of the main forms of communication in brand management.

Of course, there are still many absurd views on the Internet, such as small businesses do not need to build brands, B2B companies do not need to build brands, and brands have failed in the Internet age...

If you understand the four definitions of brands mentioned above and the logical relationship between them, you will probably have the answer in your mind.

In China, the market economy started late and business education is relatively backward. Many companies have not yet formed a brand management knowledge system and can only act based on media comments and subjective assumptions. "A brand is a little girl who can be dressed up by anyone" and "A brand is a basket that can hold anything" have become vivid descriptions of this situation.

Why have you heard so many truths but still can’t lead a good brand life?

Because the truth you know is just a pile of mixed building materials, which does not form a building structure. You can't tell which are the bricks for the foundation, which are the stone slabs for the walls, which are the steel bars supporting the structure, and which are the wooden rafters decorating the exterior.

When it comes to construction, you build whatever structure you can think of and use whatever materials you see. In the end, is what you build a living room or a kitchen? It all depends on God's will.

Since its development, brand theory has undergone numerous changes at the tactical and performance levels, but it has remained generally consistent at the strategic and essential levels. In the face of the complexity of business, it is better to look back at the timeless classic common sense.

Author: Grant Zheng

Source: Zheng Guangtao Grant (ID: Grant-Insight)