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!!!
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