Article

Strat­e­gy

You Don’t Own Your Brand

February 21, 2020

Lisa Hezi­la, Coun­try Head of Renoir Con­sult­ing, Malaysia, and for­mer Group  Man­ag­ing Direc­tor of Young & Rubi­cam Group/VMLY&R, shares her insights with Busi­ness Today on how brands can influ­ence the minds of peo­ple through a stream of experiences.

First­ly, we need to come to a com­mon def­i­n­i­tion of what do we mean by “brand­ing.”  

It’s all about being “men­tal­ly sticky” in a world of clut­ter – in a way that leaves peo­ple with a last­ing, pos­i­tive impres­sion (and in the long-term a rep­u­ta­tion). And busi­ness­es do this, con­scious­ly or uncon­scious­ly, through its inter­ac­tion with their stake­hold­ers – be it via their prod­uct expe­ri­ence, cus­tomer ser­vice, the retail expe­ri­ence, the adver­tis­ing, etc. 

Every action of the brand results in an inter­ac­tion with a stake­hold­er of the brand – and this can include cus­tomers and poten­tial cus­tomers, employ­ees and even partners/suppliers – across every touch­point (e.g. prod­uct, cus­tomer ser­vice and com­mu­ni­ca­tions), is branding. 

Brand­ing isn’t some­thing brands can own exter­nal­ly. In essence, it exists in the minds of people. 

Why should busi­ness­es invest in brand­ing in the first place?

Well, what is the alter­na­tive? Leav­ing it to chance? 

The hes­i­ta­tion to “invest in brand­ing” is part­ly due to the com­mon mis­con­cep­tion that only the com­mu­ni­ca­tions part of mar­ket­ing is “brand­ing”; but in actu­al fact, brand­ing is about nur­tur­ing your brand’s rep­u­ta­tion, which stems from someone’s total expe­ri­ence of your brand, direct­ly or indi­rect­ly. Every busi­ness that has an opex and capex are direct­ly or indi­rect­ly invest­ing into branding. 

The ques­tion is: are you doing it strate­gi­cal­ly and invest­ing in the right places? 

Thus, invest­ing to improve your prod­uct; your cus­tomer ser­vice – online, in-store or by phone; your retail expe­ri­ence; your website/app expe­ri­ence; your adver­tis­ing – enhance customer’s delight – which improves brand rep­u­ta­tion; and ulti­mate­ly are acts of branding. 

Don’t for­get the basic human per­cep­tion. We pre­fer to buy from peo­ple (and by exten­sion, brands) that we like. That’s why customer’s delight a.k.a brand­ing is so important. 

How has it change over the years in the era of social media 

Look­ing at the big­ger pic­ture – one has to recog­nise the arrival of the glob­al access to the Inter­net which made the world become more clut­tered; democ­ra­ti­sa­tion of access via ecom­merce has made the world one huge shop­ping mall. 

We have almost-infinite access to every prod­uct and ser­vice imag­in­able (around 12–24 mil­lion ecom­merce sites glob­al­ly, more being added each day). 

But, now, social media comes into place, as a means of mak­ing sense to it all. 

Social media is our “short­cut” – help­ing us “curate” the sea of choice – to give us a man­age­able list of options to con­sid­er. Social media does this par­tic­u­lar­ly well because we’re eas­i­ly swayed by the opin­ions of peo­ple – it’s a trust thing! 

So, we use social media to trans­fer the brand rep­u­ta­tions we build in our heads to others. 

How brand­ing has helped businesses 

There are mul­ti­ple ben­e­fits of a strong brand – beyond pric­ing (increas­ing the per­ceived val­ue of a par­tic­u­lar prod­uct or ser­vice; reduces price sen­si­tiv­i­ty), it also reduces sub­sti­tutabil­i­ty (brand choice). 

We’ve been see­ing suc­cess­ful brand­ing being deployed, espe­cial­ly direct-to-consumer (DTC) brands. 

Digital-first brands like Grab is an excel­lent exam­ple of brand­ing done well with empha­sis on address­ing customer’s pain points and the pos­i­tive expe­ri­ence by its plat­form users. A focus on deliv­er­ing real util­i­ty to users is what Grab is doing, to go beyond incen­tivis­ing usage through rebates and discounts. 

What these brands do is quick­ly estab­lish its brand rep­u­ta­tion by posi­tion­ing them­selves as the “People’s Cham­pi­on” – an approach deployed in cat­e­gories fraught with con­sumers’ pain points. 

Many star­tups and busi­ness­es which ques­tion the tra­di­tion­al cat­e­gories of busi­ness mod­el will ensure more val­ue reach­es the end-consumer rather than being stuck in the mid­dle due to inef­fi­cien­cies and profit-taking. These com­pa­nies need to main­tain a good pulse of the mar­ket and their cat­e­go­ry users. This is where Renoir comes in to help clients set up robust Mar­ket­ing Infor­ma­tion Sys­tems (data and insights on the con­sumers, local com­pe­ti­tion, local/regional/global trends) that feeds into the prod­uct cre­ation and devel­op­ment process, tracks the stages of the product’s port­fo­lio, and pro­vides a deci­sion matrix out­lin­ing gov­er­nance across the product’s lifecycle. 

For some indus­tries, the focus of brand­ing is to dri­ve pre­mi­um pric­ing; how­ev­er, the oth­er com­mon appli­ca­tion is dri­ving choice at the point of sale. As many pur­chas­es are done with low men­tal pro­cess­ing (such as food and bev­er­ages; house­hold clean­ing prod­ucts), get­ting the sale boils down to being “men­tal­ly present” in people’s mind at the point of purchase. 

It’s crit­i­cal that the com­mu­ni­ca­tions approach to brand­ing nudges cus­tomers to make a pur­chase deci­sion in favour of the brand. 

How brand­ing has impact­ed busi­ness­es in terms of val­ue or rev­enue growth 

In con­text to the attri­bu­tion of brand’s val­ue to finan­cial per­for­mance – a con­tentious point due to the sub­jec­tiv­i­ty of val­u­a­tion meth­ods – there’s a lack of robust research in this space espe­cial­ly among non-listed companies. 

How­ev­er, many stud­ies come to com­mon conclusions: 

Intan­gi­ble assets become more impor­tant in today’s finan­cial envi­ron­ment. Brand val­ue is con­sid­ered as a com­pet­i­tive advan­tage. Busi­ness­es with strong brands out­per­form the gen­er­al mar­ket (espe­cial­ly dur­ing volatile times). 

A depic­tion on how Star­bucks charge more than RM10 as an accept­able price pre­mi­um for a cup of cof­fee is proof of the busi­ness brand­ing, Samsung’s abil­i­ty to rise above its now-almost-forgotten Sam­sung Note 7 catch­ing fire/exploding  (result­ed in a recall and air­lines ban) shows the pow­er of the brand and how WeWork’s abil­i­ty to com­mand the rep­u­ta­tion and thus ini­tial val­u­a­tion it had, clear­ly shows the pow­er of branding. 

The rise of DTCs and its impact on the mar­ket (usu­al­ly fol­lowed by its acqui­si­tion by mar­ket incum­bents) also shows that great brand­ing undoubt­ed­ly helps lift a busi­ness above the clut­ter of choice and adver­tis­ing out there. 

Source: https://www.businesstoday.com.my/2020/02/13/you-dont-own-your-brand/

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