Brand in the Context of the Marketing Value Chain: Part 2

Let us spend a little more time on the arrowhead of the marketing value chain, brand.

Recall from part 1 that branding creates brand equity. One of the most succinct ways of communicating this is, that "Brands are the bait that attracts customers". Given this, there are two components to setting up this bait. Without getting stuck on the many definitions of the following categories, broadly, the first component of the bait is creating that corporate identity, the promise that your brand makes to your customers and thus attract them to you, and the second is managing and maintaining the brand. They are not mutually exclusive processes - indeed, there is a overlap between the more strategic corporate identity category versus the more tactical brand management category.

Corporate Identity is about:

• Creating unfair mindshare. When customers think of a product or service, does your brand come up in their mind. Above competing brands? If not, you have low brand equity, and you need to have a plan on how to increase it
• Converting your brand equity into sales increases the value of your company. The more sales, the greater the value of your company
• Increasing the ability to manage risk. The risks I'm referring to here include sales volatility risk (less volatility is good, unless you're offering a seasonal product or service), identity risk (all representations of the brand identity should be identical) and reputational risk (managing staff incidents that can tarnish your brand). In today's world, this is a critical aspect of corporate identity.
• Reduced marketing spend. A focused brand knows exactly what it wants to say, and to whom it wants to say it. For this reason, message and media are optimised, which in many cases, actually results in a reduction in marketing spend

Brand Management (Leverage) is about

• Bonding with customers, building brand affinity, and therefore brand equity
• Acquiring customers - hooking them and achieving a sale
• Retaining customers - keeping the brand (and the supporting operating model - this critical component will be a future blog) fresh, alive and competitive
• Growing customers - leveraging customer lifetime value and customer equity

There is a fifth element of brand leverage, as indicated, and that is the relationship between brand management and the operating model of the business. For this reason, part of brand management needs to consider productivity, which is a function of efficiency and effectiveness. However, as mentioned above, let's best leave this for another blog.

While it is useful to categorise brand activities as above, progress within the categories needs to be measured. The measure of brand equity is still best achieved through market research, with the important characteristic of that measure being the trendline over time.

Now, a brand's power is in how well it sells your products and services. This will be considered in Part 3