An Analysis of the Fundamentals of Marketing (part 37)

Branding (part A)

by

Charles Lamson

Introduction

Perhaps the earliest instance of branding was in the branding of slaves and criminals for purposes of identification. Branding has been associated with property in its widest sense. Although a slave is undoubtedly a person, in ancient  times, slaves were treated as if they were socially dead. To mark this event slave owners habitually renamed their slaves with contemptuous titles such as 'irritation'. Within this context branding is associated with power, control, a sign of ownership indicated through marking a brand physically on the body and property.

In modern times, the concept of branding has taken on a more positive inflection with the development of commodity brands in the early twentieth century that offer to protect the self. Individuals now mark themselves with brands as a means of self-affirmation rather than negation. In Western culture the discourse about brands has traveled beyond the marketing of traditional products and services to swamp every aspect of life. From an earlier post, it can be recalled that this was what Kotler called for back in 1972, when he asked that the marketing concept be applied to all institutions. Someone must have been listening because from birth the infant is wrapped in a branded cocoon of 'absorbent' diapers, 'trustworthy' bottle-feeds and medications, and 'cute' clothes. From about that age the infant begins to learn the language of the brands from the mass media and by observation of the actions of those around IT.

In the next couple of posts the traditional world of goods and services is considered. I will start by outlining the conventional wisdom that argues why branding is important. Then themes will be discussed under what is loosely referred to as the conventional wisdom about branding, i.e. brand congruity, personality, subculture and community. Consideration is given to discussion of a way by which brands gain their meaning and by which they may recirculate this back to consumers as symbolic resources for the construction of identity. Then branding is assessed from a radical behaviorist point of view and different accounts of brand loyalty are explained.

Brief Modern History of Branding

In an earlier post, the work of the behaviorist J.B. Watson was examined as being one of the first who used the fear-sex-emulation model in advertising during the 1920s. The strategy appeared to be simple. Basically, the advertisement had to first identify some problem, deficit or lack in the consumer. This was achieved by inducing feelings of anxiousness or lack of confidence, e.g. with respect to the fear of underarm sweat. Early brand advertising clearly identified the deficit and the benefit in the shape of the product that could cure it (Falk, 1997). Familiar brands started life as patent medicines, e.g. Coca-Cola and Heinz Ketchup; as part of a controlled 'healthy' diet, e.g. Kellog's Cornflakes; as an aid to the creation of a more 'hygenic' domestic environment through banishing 'invisible' germs and dirt, e.g. Sunlight soap; or in focusing on the development of 'personal hygiene', e.g. Zam-buk, Lifebuoy carbolic soap and Odorono. The brand is offered as the means to resolve the anxiety, redress the deficit and fill the lack. this meets with Levitt's (1986) advice to marketers when seeking to define consumer's needs; that it is better to start with the deficit. For example, the market for 'six inch holes' rather than the benefit of the market for drills; a hospital may produce surgery; customers seek 'relief of pain'; and purchasers of perfume may be purchasing 'dreams', those of cosmetics 'confidence'.

Why Brand?

Authors cite a plethora of benefits that arise from branding. Most of these are from the producers' perspective:

• Protection. The brand mark and other aspects of the brand constitute a legal sign. Anyone who uses 'Coca-Cola' in the particular font prescribed without permission is likely to end up in court. Brands are protected by copyright, trademarks and patents that are underpinned by the notion of intellectual property rights, as written into WTO standards. Such devices have been used to attack brand piracy, where, for instance, Napster featured as a high profile case. Klein (2000)  notes that there are two sides to this. Protection of the brand mark has reached the extent that bloggers such as myself in writing this blog, can be accused of 'stealing' the brand mark. Klein argues this has become a powerful new form of censorship as global brands dominate huge swathes of social and cultural space.

• Property. The brand mark is a shorthand device in that it readily identifies what belongs to one person, what that person has a right to which is different from what belongs to other people. The brand mark needs to be distinctive and easily recognizable if it is to fulfill its function.
• Differentiation. The provenance of this idea tracks back to the days of the Unique Selling Proposition (USP) developed in the US in the 1940s. The brand should offer a proposition that is unique and which signifies a benefit that will pull the customer to the brand. Put in behaviorist terms, the various stimuli associated with the brand, e.g. the brand logo and packaging, should act as a discriminative stimulus that prompts the person to associate this with some unique aspect that has provided reinforcement. in cognitive terms the idea is to create a favorable attitude about the brand based on a key set of attributes. Levitt (1968) supports this idea in arguing that the core brand should respect the specific quality which makes the brand different from others. This is known as the 'brand property'. Once this aspect of the 'core' brand has been identified, the marketer has a basis to define the need and the plenitude or wholeness that consumption of the brand will bring. The brand itself is a positive creation which offers the promise of negating the evil of the need.

• Added value. The argument for differentiation would make little sense if this did not lead to the creation of added value. The thinking is that if the marketer can make an addict of the consumer, by inducing him or her to rely upon the brand and to consistently demand it, the brand may command a price premium over those which purport to service the same core need. One way of creating added value is by ensuring that the brand consistently delivers a quality offering. There is a strong positive relationship between perceived quality and profitability, which occurs as the result of customer loyalty, more repeat purchases and less vulnerability to price wars.
• Brand equity. In some instances the value of a brand (not to be confused with brand values, which will be discussed in a later post) has been listed on a company's balance sheet, which is a controversial move.
• Market share. When a company buys a brand it is buying market share. Data suggest that there is a strong positive relationship between high profitability and market share. More important, brands promise the purchaser consistent profitability. Doyle (1998) argues that strong bands generate exceptional levels of credit through a triple leverage effect. The most obvious effect is through the higher volume which provides 'experience curve effects, involving higher asset utilization and scale economies. the second source of advantage is through the higher price that the brand commands. Sometimes this price premium holds at the final consumer level, although it is usually at the retailer or distributor level that it is most apparent. Successful brands build such loyalty that they are able to generate superior earnings. A premium brand can earn 20 percent higher returns than discounted products. Brand leaders also have lower unit costs as long as they can take advantage of experience effects which may occur in the development, production, or marketing, depending on the industry's value chain.

• Functional device. Although this is the shortest section it is also probably the most important. Brands enable consumers to identify high-quality products and services and save on search costs.

*SOURCE: FUNDAMENTALS OF MARKETING, 2007, MARILYN A. STONE AND JOHN DRESMOND, PGS. 202-204*

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