By Karen V. De Asis, Business Features Section, Philippine Daily Inquirer, July 24, 2009
Many believe that when one does marketing, one is actively engaged in branding too. While both marketing and branding must be done complementarily, this is not always the case.
Most businesses often practice marketing by identifying target markets, sourcing new customers and keeping old ones.
Yet, they fail to do branding.
In sourcing new customers and markets, some businesses invest and use various forms of marketing communications but drop this altogether when one’s comfort level has been achieved, riding instead on word of mouth and loyalty of new customers to sustain the business. Thus, products and services never rise to the level of becoming a true brand or revert back to become once more a commodity product or service reliant on the efforts of sales people, customer traffic derived from a location or an occasional spurt in sales driven by discounting.
This is where branding differs from marketing. Not all products or services become brands. True, each commodity has a name. All must influence consumption to sustain the business. But marketing a commodity is a short-term business strategy while building brands is strategic and long-term. Commodities have a shorter life span while brands live long enough to last through many generations when managed properly.
Beyond identifying customers and catering to their needs, brands go beyond the functional nature of commodity products and services and become iconic symbols for customers who believe they cannot live without their favorite brand.
What makes a brand?
Contrary to commodity products and services, brands enjoy attributes that the former do not have. These attributes, also identified by brand thought leader, Kevin Lane Keller in his book on Strategic Brand Management include the following:
Brand awareness. True brands, while probably not having reached a cult level nevertheless, do enjoy pervasive familiarity among its target market. Most consumers should be able to name, recall or recognize the brand upon mention of the category.
Brand loyalty. A real brand nearly has a cult following. Often, consumers see their favorite brands representing themselves. If a brand were a person, it is not uncommon for loyal consumers to see the brand as their kin, soul mate, confidante or friend.
Perceived quality. Brands provide a psychological reassurance that at all times one can obtain a better and consistent quality. The assurance goes beyond the functional nature of the product or service.
Brands have strong, differentiated and positive associations. Anything that comes to mind or is stored in memory about a brand is called an association. But brands, as opposed to commodities, have only positive associations uniquely identified to them and are strongly recalled and recognized by its potential target market and users.
Brands have patents and trademarks. Any business with a brand must be highly protective of the brand. Patents, trademarks, creative copyrights, etc. become proprietary assets of the brand. This is because when managed properly, a brand’s life can be sustained for many generations despite changes in the business environment. A commodity’s life on the other hand is relatively short and its continued existence is highly dependent on the business and competitive environment and marked by volatility.
Only an impartial consumer research can validate whether one is a brand or not. No hearsay or feedback from friends, relatives and acquaintances during community or small group gatherings can replace research.
From a commodity to a brand, how to migrate?
Strong desire to brand is the right mindset. Key to branding is the right mindset. Commodity products have a small user market. However, if a business owner has reached his level of comfort financially, most do not wish to take the next level believing that they have saturated the market or are simply fearful of more tedious work and challenges ahead. Others fail to see far greater opportunities. Still some abhor the dynamic pace behind brand building and management preferring a relaxed way of managing the business.
In 1975, Jollibee Foods could have remained an ice cream parlor serving regular comfort food like Jollibee’s yumburger, chicken joy and Jollibee spaghetti. But Jollibee had the foresight, guts and right mindset to brand against a global foreign quick service restaurant brand, McDonalds and become more than just an ice cream parlor business. After thirty years, Jollibee has more than 650 outlets in the country and a reported Philippine revenue of 32.4B in 2008, excluding foreign sales revenue and income generated from other businesses funded by capital from Jollibee Foods Corporation.
Two years after its incorporation in 1978, Jollibee launched its first TV commercial in an attempt to build the brand but it was not till five years later in 1985 when brand building became far more successful with a differentiating story via the Langhap sarap campaign that embodies how Filipinos uniquely judge good tasting food through aromatic smell i.e. sa amoy pa lang, masarap na. Until today, this remains to be Jollibee’s significant trademark. From then on and with sustained brand building, Jollibee ceased to be a commodity.
|Year||No. of Jollibee stores (Philippines only)|
Branding guarantees quality. What makes branding beneficial to consumers is its guarantee of quality. A company that moves from marketing a commodity to a brand practically cannot compromise the quality of its products and services. Integrated in managing brands is the reputation of the makers of the branded products and services.
Unilab began as a small drugstore in 1945 and a few years later evolved into a pharmaceutical company with a quest to provide quality medicines at an affordable price. To date, Unilab boasts of being the largest Filipino-owned pharmaceutical firm with the most number of over the counter health products and brands of medicines that have bridged the annual billion-peso sales turnover. Among its most popular brands of over the counter products built through massive advertising and consumer awareness campaigns include Alaxan, Neozep, Medicol, Ceelin, Myra E, and Decolgen, to name a few.
Consistency in building brand awareness and fostering brand loyalty. Nike has transcended itself from being a commodity athletic footwear with a proprietary technology to an iconic brand since it was marketed thirty years ago in 1978. Nike’s brand story, consistently sustained through three decades is grounded on the insight that every person aspires to become a winner and simply wearing a Nike moves them to feel like one, motivating them to ‘just do it’, a selling line that captures the winner attitude. Even Nike’s in the Greek language is associated with the Greek goddess of victory.
In 1978, Nike boldly came out with its first brand advertising via print through its former agency, John Brown and Partners. The ad visually featured a lone runner on a rural road and had a powerful headline ‘There is no finish line’.
Nike’s strength lies in strategically, and not whimsically, selecting endorsers picked fresh in their careers i.e. Michael Jordan, Andre Agassi, Roger Federer, John McEnroe, Serena Williams, Kobe Bryant, Lebron James, Tiger Woods, Rafael Nadal, etc and very recently team endorsements like Manchester United and FC Barcelona, among others.
No wonder, Nike, unlike other commodity athletic footwear, committed a yearly 20% annual shareholder return in the last five years.
Branding is not a short-term, deal-making, highly executiional business tactic. It is strategic, long-term in nature and can be successfully mounted only by a focused, determined and visionary business owner. For branding is a long term way of doing business that has to begin from the top and passed on from one generation to the next.