Tuesday, September 7, 2010

Separating Brands from Labels

Written as Associate Project Director - Vertebrand Management Consulting for Strategic Marketing

Its distribution strategy was created by Price Waterhouse Coopers; its brand recall exercise was handled by A C Nielsen; the advanced centralised customer contact centre was powered by Siebel; Adfactors was its public relations firm; AT Kearney defined its customer centric strategies; Andersen Consulting focussed on its stock broking and risk management. And last but not the least, the content was provided by CMIE and Dun & Bradstreet, besides top media houses and international wire agencies. It engaged Top 3 celebrities in India, Sachin Tendulkar, Shah Rukh Khan and Hritik Roshan, as its brand ambassadors. Could one ask for any better recipe than this for Brand Building for the online trade portal - Home Trade? The awareness, too, was commensurate with the efforts and investments. The ‘Brand’ catapult itself next to Coke and Pepsi in terms of Brand Recall in the year 2000. For a brief period, this strategy of branding was lauded as one of the most effective strategies.

In 2003, three years later, the ‘brand’ does not exist in the market. Contrary to the text book knowledge that the “brands are immortal”, this brand had perished. A closer look at the market and one would notice that such ‘brands’ are very high in numbers.

What is a “Label”?

“Brand” is one of the most indiscriminately used and therefore, abused words in market place today. Many of them create an illusion of being a brand through their high profile campaigns, celebrity endorsements etc. The hype is short-lived and so is its existence in Market. Let us call such vanishing Brands as Labels.

Products - Labels - Brands

Products: Factories manufacture products. Products confirm to some specifications, comply with some tolerance range and confirm to some quality standards. All the product descriptors carry engineering or manufacturing terminology which can not be grasped by the customer. The products have some features, which are not necessarily understood by the customer. Hence, the best of the products may not be noticed and appreciated by the customers.

The feature needs to be translated into advantage to the customer, for her to notice it. The product-features get translated to functional value propositions (FVP) for the customer. The superiority of the functional proposition is the key to success in the market. It creates a rational reason or appeal for the customer. The customer can compare the FVPs, think and take a conscious decision. A superior product can redefine the market, dislodge the existing product in the market. It is however vulnerable to any new product offering a better functional value proposition. The better functional value proposition could be also be offered by offering similar functionalities at lesser price. Thus, the products offering just functional value proposition are quite vulnerable.

Brands: A better safeguard is to offer the customer an emotional reason to purchase over and above the functional one. Let us call it Emotional Value Proposition (EVP) The emotional reason is difficult to be replicated by the competitor, hence, even of the competitor matches the FVP, EVP creates the immunity. The customer starts seeing a definite benefit in associating with it. Successful brands own the emotions in the customers mind. The customers associate feeling of safety with Volvo and trustworthiness with TATA.

Over a period of time the Brands develop a relationship with the customer. Since, the Brands consistently evoke the emotions, customers tend use them to express themselves. That is the ultimate level the Brands can reach. At this level, they become the part of customer’s personality. The only a handful Brands can achieve this enviable position and therefore become immortal

Labels: However, the EVP follows FVP in the value chain. Mere EVP in absence of FVP does not lay any foundation for a long term brand building. Anything that offers either FVP or EVP are being referred to as “Labels” Needless to say, Labels do not offer any self expressive benefit to the customers.

Effect of Communication on Labels and Brands

The difference in value propositions creates the distinction between Brands and Labels. However, the effective communication is quite capable of bridging this gap very easily.

A Label with a very effective, high decibel and high visibility communication can easily create an illusion of being a brand. The communication may be very catchy with an extremely high recall. The customer may cherish the communication, get amused by it. But it may not lend it self effectively to build a brand.

Emotional Labels are those which offer just the emotional value and don’t back it up with a tangible value proposition. The case of Home Trade is an ideal example. Home Trade connected extremely well with the customers emotionally almost instantly. The brand ambassadors, the story board and the screen play of the ads created an immediate positive feeling which was never backed up by a solid functional value. It perished as a result.

On the other hand, there are quite a few examples of very effective communication about the product offering just the FVP to the customer without generating favourable emotions. For instance, out of close to 50 Tea brands tracked in NRS 2002, there is only one brand that has made to the Superbrand status in India. Each brand offers a tangible functional value proposition, the missing link is emotional connect. These can be termed as functional labels

Both types of Labels fail to lay the foundation of long term brand building. Functional Labels may generate trials in logical, left brained customers. But the customer’s loyalty is not guaranteed. The customer is always evaluating and looking of better products/bargains. The Label has to take the same, if not better, amount of efforts every time to win the same customer.

Emotional Labels merely create a feel good factor. Any Brand experience that is created out of this feeling is most likely to end up in the customer dissonance due non-performance of the product on required parameters.

The Mental List

Customers have a finite memory. There are only a finite number of brand names, logos, value propositions that can be stored there. The entire process of making decision is simplified by creating a mental-list of brands.

A brand can win the prize-place in the mental-list once it proves itself on the hostile scrutiny of the credentials by the customer. Such list is created for all the categories, even for those which are considered impulse purchase categories.

In Impulse purchase categories, the decision to purchase but the brand decision is not. In a shop intercept study conducted by Vertebrand among 100 randomly selected customers in Bangalore, 89% were pre-decided on the brand of potato chips they would have bought in case they decide to buy one. The list is invoked at the time of purchase decision.

The brands in the mental list have a head start. The other brands have to prove their mettle to win the purchase decision in their favour.

The list is updated all the times, while evaluating the brand, watching its ads, using competitive brands, talking to friends, watching a movie etc.

The raison d’etre of Brands is to own place in customer’s mind-scape. It is perhaps the most prized asset the Brand can own.

The Acid Test

The Brands hold a long term competitive edge over all the Labels. The emotional connect coupled with strong functional value creates a long lasting relationship with the customer. Naturally, having a portfolio of successful brands is the aim of any marketer. But they need to be very careful about their portfolio. They need to continuously scrutinise the portfolio to separate Brands from the Labels. All the popular parameters such as ad recall, repeat purchase rate etc fail to do it. Here is a small test to do this. Just ask the customer, whether she “thinks” about your brand. Peep in her mind to know whether your Brand owns a place in her mind-scape.

If your Brand does so, it indeed is a Brand, otherwise it is a poor Label!!!

Learnings from Parenthood VI

Stay Healthy, Imitate your baby

We often tend to think that we are born first and babies are borne later hence we are smarter, more intelligent hence babies need to learn from us. But this not necessarily true. Most babies are extremely fit, very active. During 3-6 months of age, they can lie on their backs hold up their legs for hours and keep cycling motion on for enviably long time. I came across an interesting statistics that if their cycling motion is converted into a distance travelled, a 3-6 month old actually covers 3km every day.  The other day, I took out my toddler for a stroll in the night. When we left home he was about to sleep and showed those low energy symptoms. When we reached the garden, he suddenly felt that surge of energy and he was running non-stop for next 30 minutes.

Learnings from Parenthood V

Some basic rules to deal with babies and their parents

All babies under age 1 are cute. ( by definition)

  1. If you find a baby who is not exactly cute….refer to Rule 1.

  2. Number of “U” s in “Cuuute” can be used to impress baby’s parents about how much you appreciate the baby. The number of U s is directly proportional to your appreciation of baby.

  3. Some words can be pronounced wrongly to create an impression that you are really impressed with the baby. Eg “So sweet” will create a moderate effect about what you feel about the baby. But for special effect same words can be pronounced as “Chooo chweet”.

  4. Rule 3 applies to “O” s in Cho and “E” s in chweet.

  5. These sounds can be used to impress only the parents, babies don’t understand them anyway.

  6. All babies are intelligent till age of 1. Parents are genuinely impressed by each action baby makes with her hand, legs or any undescribable sound that the baby makes. Never trivialize these actions.

  7. Meaningless blabbering of the baby triggers certain chemicals in right brains of the parents that make them creative. Somehow all parents are able to interpret the blabbering of the kids in a perfectly meaningful way which may bear no resemblance to reality.

  8. Then you will wonder if all of us born with same intelligence level till age 1, why do we see people of different intelligence levels around us. It can be explained by Rule 7 which states that similar to Newton’s law of cooling babies start losing their intelligence due to dumbness of grown ups around them. The rate of loss of intelligence is directly proportional to the square of difference between intelligence of the baby and grown-ups around her.

  9. This process continues till equlibrium is achieved.

Rules for answering most popular FAQ : Whom does the baby look like the father or the mother?

Popular misconceptions : Most people believe that to answer the question who have to look at the baby study his face or features match them with that of father’s or mother’s and then answer the question. Most of those who take this approach, keep observing the baby and never reach any conclusion and land up annoying the parents. It is not necessary that the answer should bear any resemblance to the reality or looks of the baby. This question should be answered to make the parent happy.

Following illustration would make this point clearer.

Girlfriend : Am I looking fat?

Novice Boyfriend : ummm….let me see….turnaround…I don’t think so. (You can be sure that such a boyfriend is heading for a break-up)

Girlfriends : Am I looking fat?

Experienced Boyfriend : No. (for better results No should be pronounced even before the question si completed) not at all.

(The answer does not depend on fatness of the girlfriend at all. The answer is NO by definition and No has to be said in a very convincing and sponteneous manner)

Please follow the rules to answer MPFAQ

Rule 1 : If you know the father more than the mother then the answer is “Baby resembles the father”

Rule 2 : If you know the mother more than the father the answer is “Baby resembles the mother”

Rule 3 : If you know both of them equally the answer is “ummm…baby looks a bit like both of you” (For better results you can add difficult to verify comments like  “chin resemble XXXX” or “side profile looks like YYY”)

Rule 4 : If you don’t know both of them that well then the answer is “Baby resembles the father” (Your natural curiousity will force you to ask the question “Why should benefit of doubt go to father” Answer is Mother knows, father believes)

Learnings of Parenthood III

After an overwhelming response to “Learnings of Parenthood part I and II” we are pleased to present the sequel part III. This is summary of learnings in first 4 months of parenting. Any resemblance to your experiences of parenting is not completely coincidental.

Different Perspectives

Biggest learning after first 4 months can be summarized by an HSBC ad. It is a completely different way of looking at the baby. Different perspectives govern actions of different parents.

Mothers Point of View

(all intellectual property rights acknowledged. This article has no commercial value hence no royalty charges are payable)

Father’s Point of View

This difference in perspective brings in a whole new way of looking at things. Faster you learn this better is your married life.

Baby’s Crying

This is perhaps the most noticeable, most feared but often underestimated activity baby performs. One tends to get carried away by decible levels and physical manifestation of it. I have learnt that there are 3 phases in babies crying

1. Crisis phase : Babies often commence crying in this phase, It is characterised by high pitch, shouting like sounds and vigorous movements of hands and legs. Babies close their eyes and high decible level that they create ensures that they are not able to hear anything else. They tend to get into an endless If-then loop. (If you hear crying, then cry even more loudly….thats the only thing they can hear).

Impact on Parents : When parents are exposed to this phase their body starts secreting certain harmones that energizes them and improves their concentration by dampening distractions. They drive away any sleep or feeling of tiredness. It helps them to face the next phase boldly without panic.

2. Challenge the Paradigm Phase : After a while babies feel tired and they reduce the decible levels to check if parents have identified the problem and whether any solution is proposed. If none of this is true then they create even higher pitched sounds and change their skin color to either red or purple or their favorite color.

Impact on Parents: Exposure to this oscilating high decible sounds seems to trigger a lot of harmones in right brain. These are often termed as creative juices. Parents often start getting bright ideas at a speed of several dozen per minute. That trigger left brain who commences implementation without bothering to check whether it makes sense or not. This phase is very important for the parents who are keen on challenging their abilities. There are cases when parents have been able perform singing, dancing, creating undescribable sounds, holding babies in positions that none has ever thought of. The possibilities here are endless. Parents tend to reinvent themselves in this phase.

3. Reward Phase : Babies tend to be in the previous phase till they find a satisfactory solution or distraction to their problem. Parents with sharp learning curves tend to reach this phase faster and faster. Babies start making descending crying noises and often smile amidst crying. Some scientist think that such actions are involuntary but we think that this smiling amidst crying is designed to reset the harmone levels among distressed parents faster. We are still conducting experiments to determine whether parents laughter is contributed majorly by babies actions or they are actually laughing at the solution that they proposed to baby which got accepted.

Things to remember

  • Every crying has an end.

  • The end lies either in a solution (if you ever believe you have found one) or designing suitable distraction

  • Probability of finding distraction >> probability of finding a solution

  • You don’t necessarily have to know the problem to find a solution

  • Babies still don’t know law of marginal utility. So, if something works keep employing the same solution. You will be surprised with the results.

  • Babies tend to follow inverted bell-shaped curves for their problems. Probability of problems occuring at either ends is more than 3-sigma. Most problems are either input or output problems.

Types of Cars and Parents

Singapore has a concept of weekend car. These type of cars are allowed to run on roads after 7 PM on weekdays and on weekends only. These cars are 30% cheaper than normal cars. Babies quickly figure out that their fathers are like weekend cars and mothers are like normal cars. They are also able to assign appropriate valuation fairly quickly.

Learn or Unlearn?

We often tend to think that we are born first and babies are borne later hence we are smarter, more intelligent hence babies need to learn from us. But this not necessarily true. Babies have far better abilities than us. If you think otherwise, please try following

  • Try to influence actions of each and every individual in the household 24X7 without uttering a single word and making “gggrrrlll” “ooooo” “bbbbaaaaa” sounds.

  • A baby can stare at the most scantily dressed co-traveller, smile at her, wink at her and still get a kiss in return. Want to give it a shot? Even females are welcome to try this.

  • Try to communicate each emotion just through body language without using words

  • Try this. Lie down on the floor face up. Raise your left leg up vertically, hold it with your right hand and pull it hard to put the toe in your mouth. And Smile.

  • Have your meal while you are completely asleep.

  • Hold you both legs up and perform cycling action for 15 minutes continuously, take break for a couple of minutes and then do it for 20 minutes more.

  • Cry loudly till skin color changes to red / purple. Smile in between and cry again.

Conclusion: Babies have far superior physical, emotional and leadership skills. We try our best to help them unlearn these skills so that they become inferior to us and we can manage them. We term this process as “parenting”

Learnings from Parenthood IV

Try to answer this question.

What would you be more rather happy with?

A. A decision where you have a lot of choices, you have a chance to test them out, take your time for making decision, you have a chance to consult your friends and family and discuss your decision and then you make the decision only when you are convinced.

B. You have no choice whatsoever in decision making and the decision is just thrust upon you, without asking you what you want.

Most of you would answer A, right? Well think again.

Worldover men and women spend a lot of time and energy in selecting their life partners. Men learn to be confident, funny, cool, smart, caring, supportive, well groomed, tidy, kind, thoughtful, gentle, helpful, considerate, loving, warm, compassionate, loyal, witty, responsible, committed, dependable, reliable just to name a few. Girls on the other hand learn to ignore or adjust to his forgetfulness, untidyness, distractions caused by other “places of interest”, obsession for his favorite sports, his favorite female colleague, dancing to his own rhythm, relunctance to commit etc. etc. Both of them learn to retain this behaviour till they convince each other they are the right match. Then they go thru a long process of convincing theselves about it. When they are convinced that they have nothing more left to do, they say “I do”. Depending on which part of world you stay, this can take anywhere between 6 months to 10 years and 1 to 100 iterations of the same process. In Asian cultures, parents, frinds and families also get involved. It is a seriously high involvement, long drawn process.

Still divorce rates world over are increasing. In relatively conservative countries like India the rates are touching doble digits. For more liberated and open western countries, according to a statistician number of divorces are slightly higher than marriages. (Ya that was exaggeration!). Cheating on spouse is even more rampant. They say in US, 50% spouses cheat, so if it is not you then it is your spouse. (This not exaggeration!).

What does this show? People take a long time, deliberate to take the most important decisions life and still are not happy about it or not convinced enough about it.

Now picture this!

A couple gets pregnant. Sometimes planned, sometimes unplanned. They first learn about it thru’ an external test and rush to doctor to confirm it. They have no clue that they have done what they planned or not planned. They have no control over what the baby should look like, talk like, walk like, be like or should be a boy or a girl. They first get to see on ultrasound screen, the doctor shows the face, the hands, the limbs and invariably the couple explains “Wow its so beautiful!!!”. Here I must mention that according to another study 72.3867% couples are not looking at baby at all; 80.87456% couples can not comprehend whether the black portion is supposed to be the baby or white portion and 90.873454% of the couples believe that when they look at the baby, she should at least say hello to them. The baby makes her presence felt by kicking mostly. More she kicks, more mom feels happy. If baby is powerful enough she can even kick the father or anyone who strays near the mom’s tummy. But that makes father overjoyed and proud of his creation. Baby arrives in this world when mom is either under anaesthecia or is screaming and shouting in pain and the father is worried. Still she comes and changes everything. She cries and sleeps mostly but fills air with certain optimism and love for life. It brings out the best of emotions in parents. “she is so cuuuute” everyone exclaims, irrespective of how the baby looks.

All parents love their babies. They don’t divorce their babies nor do they cheat on them. They don’t even fight with babies or get upset with them.

So, two most important decisions a person makes in life one completely thought thru’ another one completely thrust upon him/her and later one turns out to be more satisfying one.

Inference : If you want to happy don’t marry just make babies!!!