chapter 1 - unit 3

7/23/2019 Chapter 1 - Unit 3

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1CHAPTER ONE | UNIT THREE

UNIT 3Strong Brands Reward Us with Powerful and Positive Emotions

(Foto: Herbst)

7/23/2019 Chapter 1 - Unit 3



What is a brand? As simplistic as this question sounds, it is equally as difficult to answer: is a brand a product? Or the imageof that product in the minds of consumers? When we ask brand managers at any given company, we get as many differentanswers as the number of brand managers we ask. I propose:

A brand is a product or service that rewards the consumer with a unique and powerful emotion when they purchase it.

The brand rewards the consumer at purchase with the best possible emotion available among the choices of brands.Example: we could buy one of 3 computers – Apple, Dell or Microsoft. To decide, the mind imagines parallel andsimultaneously how it would feel purchasing each of these computers. The mind considers which computer evokes the mostpositive emotions and what the purchase says to others about the self. Whichever brand rewards us with the strongestpositive emotion is the one we buy. We will examine shortly how this all works.The value of a strong brand is in the premium consumers are willing to pay for it in relation to comparable brands. How do

we find that out? An example: market research participants were asked how much they would be willing to pay forchampagne glasses. What they do not know is that the champagne glasses are always the same. Only the logo waschanged. The results: consumers are prepared to pay a premium for Swarovski champagne glasses 29 times that of anotherbrand. We are prepared to pay more for Red Bull than for another energy drink. How much less would we want to pay for amobile telephone without the Apple logo?

See how brand management has evolved and check out the link in our additional material!

HOW BRAND MANAGEMENT HAS EVOLVED

The concept of brands as products and services with unique and powerful rewards evolved over time. Let us take a closerlook at this evolution:

Brand as proof of origin:

in the beginning a brand was the proof of origin on a product. Craftsmen in antiquity stamped their pottery with a one-of-a-kind symbol. This symbol let everyone know who made this pot. American cowboys heatbranded their unique symbol intothe hides of their cattle in order to tell them apart from cattle from neighboring ranchers. This is where the English termbrand comes from (in German Brandmarke, Brandzeichen). Brand and branding were the same. Personal contact built thefoundation of the relationship and trust between merchant and buyer.Brand as bundle of features:

the personal contact between producer and consumer disappeared with the IndustrialRevolution. Trust would now and forever be represented by a product carrying a brand which guaranteed certain features.The brand came to stand for a branded piece of mass merchandise of lasting quality. They were the same sizes and weights,in the same packaging, offered-up on a sales floor and were distinguished by heavy promotion and recognition in themarketplace. It did not take long for these features alone to fail at distinguishing against the competition: how is a carsupposed to differentiate itself when cars are all of good quality and readily available?

In addition, consumers came to expect excellent quality as a given. Wide availability? There are powerful brands that

actually differentiate themselves through exclusivity, like Rolls Royce. Consistent packaging? In that regard, one of the mostsuccessful brands of the last decades should not have been so successful: the Swiss Swatch. The consensus around massproduction suddenly became too narrow. The competition in the service sector and among capital goods institutions hadincreased drastically. The central problem was that the end user was only a peripheral figure – her wishes, expectations andperceptions were not considered, nor was the dynamic relationship between brand and consumer. Increased competitionchanged this too.Brand as image:

the consumer became the focus of brand management in the mid 1970s. Alone her perceptions of theproduct (brand image) determine what the brand is and what it is not. Our understanding shifted from assertion (brandfeatures) to acceptance (brand impact).

7/23/2019 Chapter 1 - Unit 3



Further developments then pushed this idea to its limits: If the consumer alone determines what the brand is, then brand managers have little authority to develop the brand in a

targeted way.

Furthermore, if the brand only seeks to satisfy the consumer, the brand will only evolve according her whims and arbitrarytrends. This is like the person who tries to please everyone. The brand lacks true expression and personality. A fatal error!

Consumers need orientation and trust in a promise which corresponds to their wishes and differentiates the brand over

the long term.

Another difficulty with a focus on image: there is too little focus on how the brand really acts in the world. Result: the

communication of the brand in advertising does not line-up with consumer experience in the everyday world.

In closing, managing multiple brands under one umbrella and extending into other segments also causes issues: which

umbrella brand is most believable? Which qualities a one brand transfer to other markets? The answers are not found in anstrictly image-based approach.

Brand as personality:

Both perspectives were joined in the 1990s. A brand is the product’s personality. Viewing the brand as a person meansconsumers choose brands which most strongly align with their personalities. Brand management means building anddeveloping a product personality (sender). The goal of brand management is the long-term creation of brand image, i.e. theidea of brand that lives in the minds of the consumer and other stakeholders such as employees (receiver). Accordingly,brand management looks both inward and outward from the brand. In this way, a clear and contradiction-free image arisesthat connects all corporate activity.

This concept is also not problem-free:

A brand can offer consumers something they do not have. Think about a type of medicine that promises the control overone’s health and is missing from the consumer’s life. Other examples are banks that offer financial advice or a brand like

Apple that lends the image of creativity to consumers who do not necessarily need to be creative to buy Apple.

Neuroscience tells us that brands cannot produce the effects in the brain that another person can. The comparison ofbrand to person is at best a helpful analogy.

The focus on the personalities of brand and consumer distract from the importance of emotions. Current research shows

that emotions are what influence purchasing decisions and other behavior.

STRONG EMOTIONS ABOUT A BRAND EXPLAIN PURCHASING DECISIONS

Brand as reward:

Current research shows that people make decisions mostly by following their emotions. We want toexperience the best possible feeling we can for a brand.

chapter 1 - unit 3

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