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BUILD BRANDS ONCOMPETENCE ASSOCIATIONS

By Tomas Conradi

Tomas Conradi co-founded Differ in 1996 and is currently working as a senior client manager with the company. Differ is amanagement consultancy that helps clients use the brand as a tool for business development and as an engine of innovation –brand-driven innovation. Differ strategies often encompass making clients think of branding as part of production and deliv-ery instead of as a separate process based on communication.

Abstract

With increasing market transparency and an increasing number of market dialogues the distinction betweencompanies and their customers’ respective environments is becoming archaic. One consequence of this is themerging of two processes: branding and production. Branding will become less about talking and more aboutdoing.

This paper proposes that ordinary branding agendas promoting values will lead companies into a dead end asintelligent customers will see that most brands cannot and should not deliver values. It suggests that the use ofcompetence associations is the way forward in a time when brands are built mainly through everyday dialoguesand deliveries. The paper draws on the author’s personal and professional opinions and observations since littlebranding literature as of yet deals with the competence associations of brands.

The paper discusses the reason competence associations are superior to values as origin of brands and why theyhave not yet become a break-through brand model. Finally, it elaborates on what steps a brand builder musttake in order to define a competence association and develop a strategic principle to drive long-term differen-tiation.

enericification is the best way to summarizewhy CEOs and marketing executives have

become dependent on brands. No longer is it diffi-cult to produce goods or services with high qualityand low cost. Picasso’s aphorism “Good artistscopy, great artists steal” has become managementmantra, and a company’s scarcest resource is theircustomers’ attention, attraction and trust.

Parallel to the increasing value of brands is a trendtowards greater transparency, where companies areno longer able to conceal their insides in favor ofneatly planned advertising campaigns and corporateinformation send-outs. This is due to an exponentialincrease in the number of customer touch points,mainly thanks to technological advances, creativeliaisons, an increased amount of media channelsand the addition of new physical meeting points –concept stores, shop-in-shops, customer informa-tion centers etc. There is also the fact that custom-ers tend to discuss companies and brands more andmore – partly because they have such great influ-

ence over their lives - in forums ranging from news-papers to TV couches to dinner tables.

Transparency moves companies’ communicationsfrom a few controlled monologues to a multitude ofuncontrolled dialogues. This new communicationclimate renders the walls between customers andcompanies – between management and market-facingpersonnel – obsolete, and the difference betweencompanies’ internal and external world is redundant.

The hierarchical production-oriented organization,where knowledge and decision-making moved top-down, where the workforce was hired and fired andprovided with rules and branding manuals, is nomore. New organizations are networks built aroundcustomer relationships. Knowledge travels from thebottom up. In this new kind of organization, brandingmoves from the role of securing the right marketcommunication message to managing the wholecompany and its innovations.

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Thus, a brand builder’s new mission is to ensurethat every dialogue about the company – internallyand externally – becomes a little more interesting.

Competence associationsSuch shifts in company communication environ-ments have bearing on the way brands are managedand branding is conducted. No longer is it sufficientto merely fabricate artificial values and force themonto little-differentiated products. The new way ofbranding entails creating meaning that inspires neweconomic, informational and emotional value.

Below is a graphical representation of the old-school way of branding, where product values are astep that is added to differentiate it.

Product/ServiceProduct/Service

Product values Product/Service

Product values

A toothpaste becomes not just toothpaste but “anti-decay toothpaste” or “nice-tasting toothpaste” or“whitening toothpaste” or “toothpaste for athletes”or whatever will help shift more units for its manu-facturer (one recent addition is “herbal toothpaste”).

The method for old school branding is spelt adver-tising and the platform that “herbal” or “whitening”was latched onto is always the product. So far, soutilized by advertisers and brand builders alike fordecades. What, then, is the problem?

1. The product values are fabricated. They do notexist in reality. Usually they are not even con-ceived in-house, but tend to be generated bycopywriters or consultants.

2. The product values are not “sticky” enough.This is not a creative copy discussion but rathera critique of the fact that the only way to keepproduct and value tightly connected is throughextensive and expensive advertising. In the longterm, this is not an effective way to create andsustain temporary monopolies. The big productbrand companies suffer because of this reason(although they may not yet have understood it.)

3. Customers do not buy/consume values. Onemarketing myth states that customers pay morefor a brand because it represents a way of life ora set of ideas. The myth states that Nike sellspersonal achievement and Coca-Cola sells care-free fun. These types of values are the drivingforce of why customers buy these brands butthey are not what they actually buy.

4. Values are too generic – too hard to use as truedifferentiation. Almost all brands want to be “in-novative”, “committed”, “professional”, “ethical”and “flexible”. In an increasingly crowded mar-ketplace, brands need to find something that ismore unique, more difficult for competitors tocopy, something easier to manage and maintain.

A modest proposal for a better way of thinkingthen would be as follows:As products develop into services and solutions, asdialogues develop between companies and customers,the brand’s reliance on advertising will decrease.Instead, the organization itself becomes the brand’svery base and the customer’s conclusions aboutproducts are drawn from their evaluations of an orga-nization’s people.

In this new situation, the dimensions of a brand, ear-lier being product and product values, expands toinclude an organizational dimension. This dimen-sion’s most important implication is associations tocompetencies of the people in the company, i.e., whatare they perceived as knowing, what area are theymost likely skilled within?

The leaders of the next generation of brand buildersare the ones that master development and mainte-nance of the competence associations on top of prod-uct values, shown below:

Competenceassociations Product/Service

Product values

Competenceassociations

Product/Service

Product values Competenceassociations Product/Service

Product values

Competenceassociations

Product/Service

Product values

Competence associations are the company’s descrip-tion of its main competencies as perceived by thecustomer. They should deal with the problems thecustomers delegate to the brand. Examples of thisinclude a bank brand that does not only stand for“open 9-6” (product value), but also for having thecompetence of “creating personal investment tools”;A pen brand that is not only “no-smudging” (productvalue), but has its competence in “ergonomics”; Andan airline that not only has “excellent service” (prod-uct value) but defines its competence as “entertain-ment at 30,000 ft”.

An example of traditional product brands that havemoved from a product value approach to a compe-tence association is Unilever’s detergent brandVia/Omo, with the development of Omo Info/ViaDirect - a phone service line that takes the deliveryfrom a “clean washing” detergent to a “washingproblem solving” brand that is independent of theproduct to a greater extent.

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Another example is how Gillette’s constant “inno-vation within wet shaving” (competence associa-tion) has moved it from being a “close shave razor”(product value) brand. A role model for brands isMadonna, the pop star. Instead of being associatedwith a particular sound or image (product values),she has ensured constant “zeitgeist renewal” (com-petence association).

The case for competence associationsThere are three basic reasons behind the importanceof competence associations over fabricated productvalues:

1. People management, not brand management2. Competence associations are more valuable than

fabricated product values in the customer’sevaluation of the brand

3. Competence associations have the opportunityof being more unique.

People management, not brand managementEarlier brand managers managed brands andbranding, taking care of the planned marketingcommunication messages. The tools for monitoringthis process were the defined brand values, whichwere to be properly translated into advertising andconveyed to defined target audiences.

Today, managing a brand is managing people, in-novations and dialogues that build brands. The toolsfor doing this are not the values, but clearly definedcompetencies and guidelines for making everydaydecisions that are more management than brandmanagement.

Competence associations are more valuableIt is far more interesting for a customer to buy froma supplier that shows what he knows than from onewhom only says what he values. Even less inter-esting is a supplier who claims certain values inadvertising campaigns, easy for anyone as talktends to be cheap, but then fails to deliver thepromised values in other customer touch points.

A brand with competence associations gains thecustomers’ trust in solving the right type of prob-lems. A brand promoting its competence associa-tions has something interesting to say. A compe-tence brand gives knowledge to gain knowledge.

Competence associations are also more valuablebecause, as stated earlier, people do not buy valuesper se. They buy companies’ competencies to buildthese values into the solutions they buy, either fortheir own use or in the interaction with others. Val-

ues are drivers of why people buy, but they are notwhat they buy.

Competence associations have the opportunityof being more uniqueThere are more competencies around than there arevalues, at least counting only those that companiesusually want to be associated with. From this it fol-lows that it is hard to build a really strong differenti-ated position with the sole use of values.

Part of the reason for this is the fact that values aredichotomies. A toothpaste can only be “anti-decay”or not, “nice-tasting” or not, “whitening” or not, or“for athletes” or not.

Competence associations, on the other hand, can beof many varieties. They can be sorted into niches –for example, a telecom operator “enabling socialrelations”. A differentiated competitor position inrelation to this is not “hindering social relations” butrather “providing individual information”.

They can be targeted towards certain customergroups, an example being banks that have the com-petence to “empower the financially interested”. Thedifferentiated competitor position in this case wouldnot be “disempowering the financially interested” butrather the competence to “ease finances for families”.

Provided they are so great, why do not allcompanies use competence associations?The first answer to this question is that companies gowrong because of the branding tradition. Competen-cies have, simply, played a very small role in pre-vailing branding theory thus far.

Little branding literature as of yet deals with thecompetence associations of brands or even the role ofthe company’s people in branding. The field ofbranding has traditionally focused on the marketingcommunication process of products and has not dealtso much with the management of intangible valuecreation in the whole company.

The well-known brand identity models of DavidAaker (Aaker, Building Strong Brands, 1996) havethe brand identity dimensions product, organization,person and symbol. Aaker was the first brand thinkerwho very early attached the organization to thebrand’s identity, but, at that time, he discussed itmore from a core values and cultural perspective.Another wide spread model, Kapferer’s Brand Iden-tity Prism (Kapferer, Strategic Brand Management,1997) also deals with the culture dimension of abrand, but does not identify that a brand can haveassociations to competencies.

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Other brand theorists talk about developing “so-cial”, “spiritual” and “mental” dimensions ofbrands. These types of brand identity dimensionsbecome very hard to manage for anyone exceptadvertising copywriters, whose contribution tobranding is, as pointed out above, becomingsmaller. Managers do not see or control social,spiritual and mental dimensions of companies.What they do manage is the company’s competen-cies. This is then what branding must be about.

The second answer to the question why companiesgo wrong is because they see themselves as productcompanies. Competence associations is by nomeans limited to companies who would considerthemselves to compete with state-of-the-art knowl-edge or competence, i.e., consultancies or “thinktanks”. The approach is equally applicable to sim-ple products, like soft-drinks, sandwich spreads andcereals

The distinction between products, services andknowledge is becoming less relevant as companiestry to “servicify” their products by offering add-onservices, including 24 hour hotlines and web com-munities. Innovation cycles are also becomingfaster, and most products are being constantly im-proved. In this context, it is a liability for any com-pany to think of themselves as merely a productbrand, yet that is what many of them tend to do.

Makers of more complex products, such as cars ormobile phones have long understood that theycompete with the knowledge to produce and inno-vate around a product or service. But, if one looksat how many of them convey what it is that theyknow, one sees that they do not get it right. Far toomuch emphasis is on products, technologies andvalues.

For simple products, where many producers havethe competence to produce functionally equal prod-ucts, defining a competence that the customer val-ues is of even greater importance. The Via/Omoand Gillette brands mentioned earlier, as well asother brands, must add both competence associa-tions and services to their customer offering to beable to remain competitive.

Brands are what you do – not what you sayyou doBrands have been too much about talking, i.e.,marketing communications. The next generation ofbrands will move branding into doing. Part of thereason for this is the adaptation to a transparentmarketplace where critical customers will settle for

nothing less than companies that deliver on theirbrand promises. Furthermore, it is a shift where thepreviously separate processes of production andbranding become intertwined to such a degree thatthey cannot be told apart.

In order to succeed in defining competence associa-tions and developing the organization and offeringaround it, the following list of actions needs to besuccessfully executed:

1. Define the competence association2. Conceptualize the competence association for the

delivery3. Develop a strategic principle and an activity sys-

tem from the competence association

1. Define the competence associationFirstly, define a competence association that is rele-vant from a customer perspective. This does indeedsound self-evident, but every company suffers fromsome degree of “home blindness”. They tend to brandwhat they themselves are proud of being good at,resulting in competencies that the customer mayconsider irrelevant. Hi-tech companies, for example,are often proud of their technical capacity, whereastheir customers may tend to value their competencyto give them an interesting user experience. A massclothing brand’s true core competence might be“copying the big brands fast and procuring efficientlyin South East Asia”. The competence association isthen not that but “making high fashion available”.

Secondly, define a competence association that isdifferentiated. Many positioning strategies have hadthe aim to reposition brands so that they have a“deeper” meaning. For example, a watch companycan try to become “the time company” – a businesstravel agent can try to become “the meeting facilita-tor”.

This may be a trap. Why? Because these broaderdefinitions of what the brand is all about fails to dif-ferentiate the brand at all. All watch companies canclaim to be “time-companies”; all business travelagents can become “meeting facilitators”.

What brands need is a perspective on this broaderdefinition. Companies need to express why they willbe interesting as the “time company”, what compe-tence will they have that makes them better thanothers as “meeting facilitators”. Think of the numbersof online retailers that simply considered “onlinepresence” as a differentiating feature.

To return to the case of Gillette: When Gillette ex-panded from a “close shave razor”, they did notmerely define their competence association as

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“shaving”, which would have been comparable tothe “time company”. They may have then made themistake of taking the Gillette brand into dry shav-ing. They instead chose a more narrow definitionwith “innovation within wet shaving”, enablingthem to stay focused in the mind of the customer.

Thirdly, define a competence association that isextendable. Competence associations enrich com-panies with the possibility to define their businessin a way suitable for new business opportunities.Companies tend to think too much in terms of howa product brand can be leveraged across productsegments. Given what customers perceive that abrand knows, a brand can enter into any categorieswhere this competence applies. Brands that rely onvalues have difficulty doing this because the valuesare not enough to earn trust in new deliveries.

Companies can use the competence association as aguide for innovation – brand driven innovation.Using this approach, Virgin’s brand extensions arelogical: Entertainment was the company’s corecompetence from their inception, and it is the onecompetence association that has “traveled” withthem through their airline and banking ventures.

2. Conceptualize the competence associationfor the deliveryIf brands should be built first and foremost throughthe offering and through their dialogues with cus-tomers, the question must be asked: what drivesinteresting dialogues? The answer is insight andknowledge. Today’s customers want a dialogue ontheir terms: They want answers to their questions,they want to be well served and entertained, andthey will only be customers as long as the companycan establish and maintain an interesting and fruit-ful dialogue. The fuel for such dialogue is compe-tence.

Every company should also strive to create an exhi-bition area for displaying the benefits of their com-petence associations. One example of this is themotion picture-industry. Numerous programs anddocumentaries are devoted to “the making of” filmsand documentaries, and with the advent of the DVDformat, this kind of product can even be distributedas part of the ordinary offering. In “film making”-products, the director may be interviewed to stress

the unique competence of the actors, and the actorsinterviewed to describe the unique competence of thedirector. Companies in other industries tend to under-estimate both the value of creationism and the storiesthey create in the offering of their products and serv-ices.

3. Develop a strategic principle and an activitysystem from the competence associationFinally, moving from a communicative view ofbrands towards a delivery-based view will create achallenge to the organization, that is, communicatingthe brand internally. Everyone in the company has tointerpret and relate to the brand in order to under-stand how it can act as a guide when making every-day decisions. Ultimately, reading sessions of brandbooks and other archaic tools tend to be far and fewbetween. In trying to organize the company aroundthe competence association, brand owners shoulddevelop a strategic principle, a distillation of a com-pany’s strategy (Harvard Business Review, May2001, Gadeish and Orit). Such a principle should:

1. Make people understand the trade-offs in re-sources needed

2. Test the strategic soundness of a particular action(i.e., does what the employee is about to do reso-nate with what the company is about to do)

3. Set clear boundaries for employees within whichthey have freedom. A strategic principle will actas a fence and a source of inspiration.

Turning the competence association into a concretestrategic principle can turn what is usually conceivedas a fuzzy statement into a valuable tool for everydaydecisions and activities.

ConclusionThe ordinary branding agenda promoting values willlead companies into a dead end as customers begin tosee that most brands cannot and maybe should notdeliver values.

Managing brands today means managing people,innovations and dialogues that build brands. Thetools for doing this are no longer just brand values inbrand manuals, but clearly defined and widely spreadcompetence associations that steer everyday dia-logues and everyday decision-making.