The Gantry Group Building Business Through Research

Gantry Group Newsletter Issue No. 2, September 2001

Over the past several decades, companies have shown time and again that an effective brand strategy can dominate the customer relationship. Today successful brand establishment is even more important as communication channels become fragmented, products become widely commoditized, and customers can choose from an increasing volume of competing brands. Attributes that used to represent sufficient differentiation are now merely expected by a more demanding customer base across all industries. As a result, the development of a brand strategy (not just brand attributes) has become a best practice for any company concerned with building and sustaining brand equity.

In the mobile communications space for example, early market players communicated their offering differentiation based on the attributes of price and reach. But rapid commoditization diminished the importance of these factors as service differentiators. As a result companies had to come up with a “brand promise” strategy that set them apart from other providers. Sonera – the Finnish telecommunications firm – completely changed its corporate brand identity and positioned itself as a “smart partner” for its target markets. This type of branding strategy can now be seen in the marketing messages of many other service providers who promise custom-tailored solutions that grow and expand with a customer’s need. Verizon’s business advertising and marketing collateral focus heavily on their ability to offer up only what the customer needs, furthering Verizon’s brand promise as a reliable business partner with offerings that evolve along with a customer’s business.

Developing a brand strategy requires some key components:

• Knowing the target market – all plans for branding begin by identifying the target customers and how the market is segmented.
• Understanding and articulating the brand values in-house – develop a “straw horse” for the brand values as you see them.
• Testing and refining brand values with the target market  - conduct focus groups to validate the brand values and develop the strategic messaging.
• Communicating clearly and consistently across the right media formats – make certain that your communications channels are well integrated and work in support of each other.
• Delivering on the brand promise – if you promise more than you can realistically deliver, the best brand strategy in the world will not be effective.

Today, the Internet is a necessary component of almost any brand strategy but merely setting up a website is only a small part of an omnimedia brand strategy.

Should you leverage an existing brand or develop a new one for the online market? In the early dot com era, old economy companies were encouraged to create new brands on the Internet to avoid any association with stodgy old pre-existing businesses. Now however, being connected with the established offline brand builds a continuation of trust, permanence and credibility that can be leveraged in a company’s online channel.  Good offline brands should be used wherever possible online as well.

Questions to be addressed should include:

• Does the online offering enhance the offline offering or is it something entirely new? If it is unrelated to the existing brand, introducing a new brand makes sense.
• How quickly does the company need to go to market? Developing new brand awareness takes time and money. Time-to-market and budget may direct your decision to leverage what you already have.
• What is the risk of the online strategy? If you view your online strategy as high risk, you may not want to taint an already good brand image and creating a new one for online purposes is advised.

Brand success on the Internet is more challenging because customers have a huge volume of choices and also because the Internet business environment is more transparent; what happens offline is not separate from the online presence of a company (if it is bricks and mortar).

Branding may be even more crucial on the Internet. The lack of a physical “manifestation” on the Internet means the offering must become rooted into something tangible. In the absence of tangible goods a brand creates and sustains the emotional link between the provider and the customer. According to Computer Weekly, “The brand is the conduit through which communication with the target market is made.”  Branding on the Internet is more than website design, logo design, and color selection. It is about the customer experience. The “anonymity” of the online medium means that companies have to “reassert” their brand identity to an even greater extent online. Tools like interactivity and customer experience are critical to delivering on the promise of 1-to-1 marketing.

Online brands must also be transferable to offline media formats. It is necessary but not sufficient for brands to operate well on the Internet. The product or service offering must be able to exist across multiple platforms. As such, there must be a “fulfillment” system that transposes the brand to other mediums. Bloomberg is arguably one of the masters at integrating its offerings consistently across TV, radio, Internet broadcast, eleven websites, print media, and mobile devices.
 
 

Business Models and Brand Strategy: Brand Strength vs. Brand Awareness

Brand awareness and brand strength are not synonymous. While dependent on strong brand awareness, brand strength is equally dependent on the marketplace’s experience with the brand. A key lesson learned from the B2C dot coms was that even those websites with high brand exposure (resulting from ubiquitous advertising, renowned founders, and “A Team” investors, etc.) could not survive if they could not drive sufficient online sales.

The reality was that sites suffered from a number of “cyber” ailments: 1) insufficient value proposition to engage customers; 2) poor customer experience as the result of overly complicated, hard to use site designs; 3) anemic or non-existence fulfillment capabilities made such companies undependable. Companies failed to deliver on their promises, breaking the customer’s trust, which fed strong negative branding; and 4) these companies failed to extend and capitalize on their brands throughout their businesses – whether online or offline.

The biggest pitfall for dot coms was that they promised more than they could deliver.
Companies – especially those with only an online presence – must carry their brand values right through the business to gain trust and emotional identification with customers. A highly visible example of companies that promised more than they could deliver were the online grocery websites most of which are now out of cash and out of business.

Instead of focusing on building the perfect brand, companies should focus on developing a solid business model that delivers on the brand promises and brand values. “Building an online brand is not about how much you spend, but how well you define and deliver the service and how effectively you communicate the (value) proposition. You cannot brand an online business unless the business offers a real benefit for its audience and a demonstrable point of difference.” Diane VandenBurg – Marketing Director of MultiMap.

First-mover advantage built on brand awareness has been replaced with first-mover competence built on brand strength. The initial novelty of Internet technology capability only offered a short-term competitive advantage. Being there first isn’t as important as being the first to get it right. Those companies that succeed will build brand equity by extending their brand values through the entire business so that they can deliver on what they promise.

Keep brand values uppermost in mind and ensure they are not lost in marketing advertising and PR efforts. Clever advertising alone does nothing to communicate the real value of the brand. Instead make sure the brand message is clear and consistent across those media formats your target market pays attention to.
 
 

Strategic Messaging: Getting it Right

“Getting it Right” means defining and communicating the perception of the brand promise to the target audience and delivering on that promise.

Overtime, the importance of customization and personalized experiences have become of paramount importance in delivering on the online brand promise and retaining customers. According to the Accenture brand study referenced above, some 57% of B2B customers are not satisfied with their online purchasing experience (which is even lower than the B2C sector).

Why? The one size fits all strategy that many online offerings are based upon does not satisfy the array of buyer types – based on preferences, attitudes and needs. Within the chemical industry, for example, are self-help shoppers, online browsers, brand seekers, service bargain hunters, and time savers (source: Accenture). Businesses must conduct the necessary primary research to discover, segment and prioritize the buyer groups and their importance within the company’s overall market strategy. Then, the brand message needs to be tested and formulated across each of the target market constituencies.

If the brand values are not identified properly, assumptions about brand flexibility and market response can be way off the mark. Take the Ben & Jerry brand now under the new parent, Unilever. While we do not know to what extent the B&J brand strategy was defined, Unilever’s decision to offer ice cream flavors that do not contain the types of unique and unexpected ingredients that B&J customers have come to associate with the brand, may spell trouble for the brand in the long run. Instead of conducting market research to gain insight into what the customer perception of the B&J was all about, Unilever depended upon well known consumer research that shows vanilla, chocolate and strawberry as the top three flavors on the market. Recently the company has brought out plain vanilla under the B&J brand name, a move that is not consistent with B&J’s reputation for exotic flavor additions to even the old stand-by flavors. Only time will tell whether or not Unilever’s assumptions are correct.
 
 

User Groups: Branding Through Online Communities

“Few companies understand that you can use an online brand to create online communities of interest in your marketplace, strengthening your attraction to customers and so ostracizing your competitors. This is particularly relevant, given that interactivity increases the possibility of creating communities.”  (Richard Gold, Wolff Olins.)

The concept of “user groups” is not new and such communities of users have a long history in the B2B markets. These groups provide important forums for users to share information and solve problems. Vendors can create their own user groups using the Internet as a communications platform to good end. Not only does it support the brand, it also provides strong customer relationship links between the users and the vendor. With the permission of the users, vendors can even contact them about new offerings and upgrades. These users are opinion leaders and can provide insights into the importance of future trends and new application areas. (Communities provide value-add: free content, expert speakers, real-time or bulletin board communications).

While traditional brand relationships are formed between vendors and customers, communications between customers should not be overlooked in an overall customer relationship and branding strategy. Brand-based online communities can be highly effective component in sustaining brand strength. According to the Sloane Review, the brand community can act as a “living manifestation” of the brand’s personality: promises made in the brand message are now vocalized by the online community and must be kept.

A company’s brand-based community strategy must be an integrated part of the whole brand strategy. The community may contain a variety of the target market contingencies and therefore messages must address each one. Market research enables strategic messaging to be tested across a range of target market constituencies (e.g. roles within companies, companies within industries and across sizes).
 
 

Summary

George Bell, CEO of Excite@home said “the Internet (portal) business is based on executing distribution and marketing strategies.” He called his business a “branding war” and a “distribution war”. Now that it is the norm for companies to extend their sales strategy to include an online channel, omnimedia branding is even more critical in the pursuit of acquiring repeat customers. Those companies that built highly functional, slick websites, now must integrate traditional media forms – TV, radio, and print – to build brand equity. Only by effectively transmitting the brand promise to the exact target markets can the potential of the Internet as a channel be realized.

About Gantry Group: Founded in 1997 and headquartered in Concord, MA, we are a full-service, custom market research and advisory firm dedicated to helping companies cost-effectively accelerate the successful market adoption of their products and services – online and offline.

Gantry Group can help your company discover the optional branding strategy for your online and offline buying communities. Call us to learn how our online research services and proven methodologies quickly deliver customer guidance to gain traction in the marketplace.
 

The Gantry Group, LLC 30 Monument Square, Suite 135  Concord MA 01742

Phone: 978-371-7557 Fax:  978-287-0043 Email: info@gantrygroup.com Web: www.gantrygroup.com

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