Editor's note: Jerry Thomas is president and chief executive of Decision Analyst. He can be reached at firstname.lastname@example.org.
A brand is some type of symbol, name or sign that identifies and distinguishes one product or service from competitive products or services. We can think of “identifies” and “distinguishes” as the practical functions of a brand.
There are also intangible elements, such as status signals, values, emotions and feelings, visual imagery and personality traits that can be linked to a brand name.
Trademark law has an interesting concept called secondary meaning and over time a brand acquires secondary meaning through usage and advertising. This secondary meaning is, in effect, a measurement of the culmination (the added value) of a brand strategy. For example, the word “caterpillar” refers to the pupa of a butterfly, a worm-like creature with many legs. That’s what we think of when we hear the word caterpillar.
However, caterpillar has also acquired secondary meaning as the identity of a brand of earth-moving equipment. In this context, Caterpillar has acquired massive secondary meaning: it stands for strength, steel, durability and power; it stands for building, construction and progress; it stands for diesel clatter and the color yellow. Brand strategy is about building the right type of secondary meaning for your brand.
Three foundational concepts
Brand strategy is built atop three powerful foundational concepts: the first is concentration of effort and energy, so that branding themes and messages break through all the noise and the clutter. The second foundational concept is brand differentiation. That is, how does a company differentiate its brand from those of competitors? This differentiation can be real. It can, for example, be a technological or performance advantage or a perceptual (e.g., superior brand imagery) advantage.
The third foundational concept is targeting. Which markets or market segments should a brand focus on? As you can see, there is similarity between the first concept and the third, in that both involve focusing marketing efforts. Once company leaders have exploited these basic concepts to their advantage to create a solid brand strategy, they can charge higher prices and enjoy greater customer loyalty. They then have some protection from the ups and downs of business cycles; they also have some insulation, or cushion, to protect against adverse publicity, and a good brand strategy makes all of their advertising and marketing investments work better.
Brand strategy can be applied to the corporation itself. For example, Procter & Gamble is a giant CPG company that owns hundreds of brands such as Tide detergent, Crest toothpaste, Bounty paper towels, Downy fabric softener and Pampers diapers. Each of these brands has its own strategy and marketing plan to support it. Likewise, Procter & Gamble as a major corporation has its own strategy and marketing plan that is largely separate from the strategies of its many brands.
Most likely, P&G’s corporate strategy and marketing are focused on investors around the world who might choose to invest money in P&G and on governments and thought leaders globally who might want to impede or block the company’s commercial activities. The concepts of brand strategy apply to corporations as well as to their individual brands.
Thinking deeply about the answers
What are the core elements of a brand strategy? It involves asking basic marketing questions and thinking deeply about the answers. Questions include “Who do we target?” “How do we position our brand vis-a-vis other brands?” “How do we differentiate our brand? “What type of a brand image do we want to portray?”
Company leaders also need to think about what kind of personality traits they want their brand to exhibit. What is their pricing strategy? If the category is potato chips, they may want the brand’s image and personality to be fun and bouncy, but if they’re selling caskets, they may choose a somber and serious tone. So, target market, differentiation, brand image and personality and pricing must be woven together so they harmonize and reinforce each other to achieve synergy.
How does a company get to an optimal brand strategy? It’s complicated and takes a lot of iterations. Brand strategy results from a combination of a) good primary research and b) strategic vision. To create great strategy, both inputs are needed. Typically, qualitative research techniques are relied upon (focus groups, depth interviews, ethnography) to really understand the deeper motivations and perceptions and how people feel and think about your brand and competitive brands.
The qualitative research helps define the language, concepts and ideas that can be employed to build the brand strategy. At this point in the process, the strategic vision of senior executives is incorporated into the strategy concepts, if possible. Now, the strategy concepts are ready for survey-based research to prove beyond doubt which strategy or strategies will lead to a winning brand.
Very often, a brand might identify 10 to 20 possible strategies based on the qualitative explorations and inputs from senior executives. Melding the research understanding with management’s strategic vision yields the very best strategy concepts to test. These vision-enhanced strategy concepts are evaluated by survey-based concept testing among target audiences.
Monadic testing is always recommended if corporate budgets can afford the investment. Then, it is test, refine and retest until decision-makers arrive at a strategy concept that scores high enough to justify the actual adoption and execution of the brand strategy. Strategy concept testing among the target audience is the ultimate measure. Sometimes, several concepts will score very high. In these instances, research leaders fall back on secondary considerations: Which strategy provides the best differentiation? Which strategy can be best supported by media advertising? Which strategy is most defensible? Which strategy can last the longest?
At the heart of brand strategy is a concept called positioning. Strategic positioning is the core theme, or axis, of the brand strategy concepts. Positioning is the central premise, the guiding principle. If we think about marketing strategy as a giant puzzle, strategic positioning is a very large piece sitting right in its center.
The word “positioning” implies a target. A brand can be positioned against or in relation to a target market. This is a common starting point and a brand can be positioned against a market segment rather than the whole market or against a consumer motive or consumer characteristic.
For example, Volvo positions its automobiles against consumers who are highly concerned about safety. Southwest Airlines positions its advertising and services against consumers who appreciate fun and a sense of humor. Dawn dishwashing liquid positions its brand against consumers who are greatly concerned about the damage of oil spills on birds and other wildlife. Mercedes positions its cars against higher-income, upscale consumers. Positioning is a major part of strategy concepts as they are prepared for consumer testing.
It is important to test the strategy concepts, because if company leaders know their strategy is right and will work over the long term, they can stick with the strategy through thick and thin. They can consistently invest advertising dollars to support it because they have analytics and evidence that it will work.
In testing strategy concepts it’s crucial to make sure they all follow the same content outline, are about the same length in number of words and employ the same ratio of illustrations to words.
The degree of finish from one strategy concept to the next should be the same. Execution does matter and concepts at a higher level of finish and polish will tend to outscore those that are less-developed. The monadic samples that will be used to test each concept should be demographically balanced and have the same proportion of brand users in each sample. Otherwise, the samples with the highest proportion of brand users will outscore the other samples and corresponding concepts.
The details of strategy execution can magnify and enrich the strategy. A wonderful example is Morton Salt. More than 100 years ago, the company developed a salt that did not cake-up when exposed to high moisture, leading to the great slogan, “When it rains, it pours.” The ad agency created an ad picturing a confident young girl with an umbrella walking in the rain and carrying a package of Morton Salt (accidentally pouring out of the package). The girl’s energy, self-confidence and the bounce in her steps added immensely to the appeal and the attention value of the ad. Executional details like these can magnify and enhance brand strategy. Conversely, poor execution can doom a strategy. That’s why it is important to test the advertising to make sure it is as good as the strategy. Details of execution matter a great deal and consumer research can help the tweaking, fine-tuning and retesting so all advertising details are harmonized in a way that magnifies the effect of the overall brand strategy.
Become extremely valuable
One final thought: If the brand strategy is right, and if it’s consistently pursued, and if the advertising investments are sufficient to break through and build positive awareness, over time that brand can become extremely valuable. In many companies, the value of the brands they own is much greater than the book value or the market value of the corporation itself. So there’s a great prize at the end of the marketing rainbow if the brand strategy is right.