Brand new Branding

The Brand is dead. Long live the Brand!

Forget what you knew about branding. The technology, specifically the internet changed everything. Ten years ago, the average person thought of branding as that creative thing you do with the name of a product. Or it meant designing a new wrapper. Or maybe it was the print or television advertising that relayed the brand message. But that was a simpler time, when there were far fewer media vehicles and less competition in most product categories.

Today, branding is everything.

Brands are not simply products or services. Brands are the sum total of all the images that people have in their heads about a particular company and a particular mark. Brands absorb everything around them. Marquee brands suffer if they show up at retail in a sea of poor quality products or in a questionable store.

We often underestimate how long brands can hold on to a negative association, even if it's just water cooler talk about a car that continually breaks down. The Web has increased the consuming public's ability to rant or rave about a company or service. Smart companies now recognize the necessity of being responsive to the criticisms, in real-time, and of making sure the brand is consistent, and is as good as it can be, wherever it shows up, and even after the sale has been made. The tools the salespeople use to sell it, public relations efforts and follow-up customer service all must reflect brand values and impart a consistent brand image.

Most Web-based retailers still don't fully understand merchandising, particularly from the brand's perspective. A lot of brands are pulling their hair out, especially over some of the unauthorized sites that just say, "Here is the item or the brand, and here is the price," and do nothing to explain (much less leverage) what makes that product unique. To make matters worse, lots of consumers are looking for information and brand cues, and Web retailers that fail to deliver those will lose the sale to someone who does. Price is not everything.

In this increasingly customer-centric world retailers must also respect brands. Priceline.com found out the hard way that brands do matter and that they can wield significant power. Its "name your own price" model assumes that consumers are willing to buy a ticket on any major full-service airline or affiliate, regardless of the brand, just based on price; Priceline doesn't tell customers which airline they'll be flying on until they've bought the tickets. And when Priceline's stock was flying high, founder Jay Walker openly questioned the value of brands and pointed to price as the only thing that really mattered. Eventually the airline and hotel brands woke up and found a way to begin disintermediating Priceline from the sale of discounted seats while maintaining control of how their brands were represented to potential customers. Most airlines now book the majority of their Web tickets through their own sites.

Manufacturers must also recognize that they can no longer make one product and ship it to anything that walks, on or off the Web, and then turn their back on what happens next at retail. With price as the only major means of differentiation, the retailers eventually get hurt by someone more desperate than them—and there has never been a shortage of desperate merchants. Eventually, price points and profit margins collapse and the brand gets hammered because the value proposition in the minds of the consumer (and the merchant) has been doomed or at least proven to be schizophrenic. By creating a wider variety of unique products, many specific to a particular channel, customer segment or merchant, brands and retailers stand a greater chance of protecting their margins. Brands that mass customize, take control of their distribution and understand the impact of emerging technologies will do well. Those that create undifferentiated products and sell to anything that walks will eventually go out of business.

It is that simple. ... next >>