Archive for February, 2021

How To Create A Brand – Build Your Brand Development Strategy

February 5th, 2021

How To Create A Brand?

There are four effective steps in brand development strategy to create a brand:

Choose the brand name and logo
Establish the brand in the minds of customers
Brand Sponsorship
Develop the brand
What Is Brand Equity?
How to create a Brand is no way different from founding your business. It takes time. Gradually you can create Brand Equity. Brand equity is the differential effect when consumers react more favorably to a brand than to a generic or unbranded version of the same product. Whenever we think of buying a smartphone the very first name strikes us is – the iPhone. Ask why? It’s because of comfort and authenticity delivered by iPhone to its users.

Apple throughout their years of research and experience has created a state in our mind of ultimate luxury and comfortability in using their products. There may be a few more similar products of others in line with Apple iPhone and may be superior to that, but the identity of iPhone gives it the edge over others- no matter what the price tag is. This edge is the Brand Equity.

4 Steps of Brand Development Strategy

1. Choose the Brand Name and select the Logo:

While building a brand development strategy name plays a vital role. A good name and style can add positives to a product’s success. It is the most difficult task to start with. Simplicity is the first step. The name should be easy to pronounce, recognize and remember. Moreover, it should suggest something about the product’s benefits and qualities.

Names like Google, Nike, Facebook, Apple, KFC etc. are among the most established brands all over the world. Interesting fact about those names is that they are easily translatable in different languages around the world. Hence the meaning of a particular word should not be something which indicates bad, wrong or negative.

Again the name should be extendable to cover up multiple product lines. For example, Amazon.com started its business with bookselling and now has been extended to multiple product categories.

Once chosen, the brand name should also be protected. Means in many instances brand names were eventually mixed up with the product category and people cannot differentiate the brand identity from the product category.

For example, Xerox is a company builds copier machines, but doing a photocopy is often termed as doing xerox.’Xerox’ is to be pronounced as a noun and not as a verb. Many people find it hard to distinguish between the product and the service which ultimately hampers the brand name of the Company.

2. Establishing the brand in the minds of customers:

An interesting saying by a marketer- Products are created in the factory, but brands are created in the mind. This can be done in multiple ways- At the basic level, it starts with introducing the target customers the product and its distinguishing characteristics.

Let’s took the example of Amazon’s Kindle- e-book reader. Amazon targets its customers, saying that it’s an e-book reader having a distinguished feature of reading books in a virtual format. In this stage, they are simply introduced with the product and has a very low level of impact.

The more effective way a brand can be positioned by associating its name with desirable benefits. Thus, Kindle is beyond an e-book reader- it is lightweight, on the go dictionary, stores thousands of books which are easy to search, no glare and zero distractions.

The strongest brands go beyond establishing features and benefits in customers’ mind and positions itself on strong values and beliefs, rooted to a deep emotional bonding. Like reading books in Kindle is an absolute pleasure and presents itself as booklover’s new best friend. When placing a brand in human mind, the marketer should establish a mission for the brand and a vision of what the brand must be and do.

3. Brand Sponsorship:

Brand sponsorship can be of three types:

Private Brand sponsorship
Licensed Brand sponsorship
Co-branding
Private Brand Sponsorship:
Lots of advertisements and social marketing strategies work behind the big brands to emerge and are termed as National brands. But for smaller Companies, it may not always be possible to endorse brands with a huge out of pocket expenses. In those scenarios, brand sponsorship is very important. As against National or Manufacture’s brands, there are Store brands. In recent decades store brands are gaining more from the market. Here’s why?

Big shopping malls like Big Bazaar, Walmart resale products at significant discount rates especially the generic or no-name brands. They endorse the products citing its advantages or putting side by side comparison with the top brands. The association of the big resellers with less known products works as an aid in uplifting the brand value of the product once termed as ‘no-name’.

Private brand sponsorship is also followed in online shopping too. As we can see small or lesser known mobile manufacturers are recently tying up with Amazon to sell their phones. In fact, this strategy is working great as the ‘no-name’ brands are getting the support of the big brand stores be it online or offline.

Licensed Brand Sponsorship:

In this brand sponsorship, some companies buy the names and symbols of other manufacturers or creators with a fee and endorse its products under such brand name. This is a common thing in the fashion industry like Calvin Klein, Tommy Hilfiger, Gucci, Armani etc., where the Companies are using the names and initials of well-known fashion innovator. This type of branding turns out as an added fillip but with a pinch in the pocket.

Co-Branding:

Under such a brand sponsorship strategy, to established brand names of different companies are used on the same product. Because each brand dominates in a different category, the combined brands create broader consumer appeal and greater brand equity.

For example, Bajaj Allianz Life Insurance where Bajaj is a dominant player in the automobile sector and Allianz is a German financial service major. Now since Bajaj wants an entry in the insurance sector and Allianz wants an entry in the Indian market, they jointly made a brand ‘Bajaj-Allianz’ to reap the fruits of the Indian insurance market.

Co-branding carries some limitations too. Such relationships usually involve complex legal contracts and licenses. Co-branding partners must carefully coordinate their advertising, sales promotion, and other marketing efforts. The onus lies on both the partners to carry the co-brand with trust and dignity.

4. Developing Brands:

To augment the brand equity it is very important to prepare a brand development strategy incommensurate with changing business scenarios. There is no hard and fast rule to dictate over.

Line extensions:

Brands name of a product can be extended to an existing line of products to accredit new forms, colors, sizes, ingredients or flavors of an existing product. However, line extensions involve some risks. An overextended brand name might cause consumer confusion or loss some of its specific meaning.

Brand extensions:

It happens when a current brand name is extended to a new or modified product in a new category. For example, Nestl√©’s popular brand of noodles Maagi has been extended to its tomato ketchup, pasta, soup etc. A brand extension gives a new product instant recognition and faster acceptance. But one should be careful while extending brand as it may confuse the image of the main brand.

Multi-Brands:

Multibranding offers a way to establish different features that appeal to different customer segments, lock up more reseller shelf space and capture a larger market share.

For example, a reputed company sells multiple varieties of soft drinks under different brand names. These brands are fighting each other to reign the market and as a result, they individually may have a smaller share of a pie, but as a whole, the Company is dominating the soft drink market. The major drawback here is the individual brands obtain only a small market share and may not be very profitable.

Conclusion

Brands are not created in a day or two; you ought to have the patience to grow it. The above – mentioned points suggest some best practices to build a brand, but the real test begins in the field. Brand development strategy differs from place to place, even urban branding and rural branding are way different in their practical applications. Remember that behind a successful brand development strategy, there lie lots of endeavors, a vividly clear vision and above all an uncompromised quality of product or service.

Author Name: Deep Sikder

When Brands Hack Your Brain and Work As Placebos

February 5th, 2021

In the previous article we discussed how placebos are excellent problem solving tools. They are ideas that are planted in our minds. When these ideas stick, they trigger beliefs. And beliefs trigger change. In a sense they hack our brains.As instruments of change, placebos have an important role to play in medicine, marketing, product development, religion etc.

It doesn’t really matter what the facts are but belief in the potency of a weird tasting energy drink, military flags and uniforms, homeopathy, a swoosh sign or some female beauty exotic potion have led to creation of large companies, institutions and brands. These ideas or brands are long-lasting since they trigger a significant positive change in their consumers or followers.

Placebos, in the field of medicine, have helped alleviate chronic pain, depression, rheumatoid arthritis, high blood pressure, angina, asthma, ulcers,Parkinson’s disease and even cancer.Placebos in medical terms are ‘pharmacologically inert medications’.Medically speaking, placebos can be a pill or an injection.In a non-medical world the placebos could also be ideas or brands, a good-luck charm, a ritual, a perfume that we wear on a first date.

In this article we explore the thesis that powerful brands are not any abstract, obtuse constructs. Good brands are effective placebos. Brands work because placebos do. In this article we explore instances of how brands work as placebos. We also give a preview to how the brands harness the phenomenon of placebo effect to trigger a set of beliefs in their consumers.

The ‘Real Thing’ is not so real after all

For those who swear by their brand of cola (it’s unique taste, flavour etc.) it is pertinent to ask whether ‘the taste’ is really such a big deal. Do you actually ‘taste the thunder’ or ‘taste the feeling’? Or is it all in the mind, a placebo. The effect of a brand as a placebo was proven when Baba Shiv and team proved that a cola tastes very differently when the respondent knows that it is the ‘real thing’ (a Coke) versus the same cola being labeled as a generic brand. Subsequent researches by other researchers showed that if the image of Coke was shown the perceived impact of the taste was higher.

Are you having a ‘branded headache’?

Another study done on women respondents in the UK, regularly suffering from headaches by Daniel E. Moerman highlighted the impact of branding on efficacy of analgesic pills.Women respondents were given four options- a branded analgesic (of a widely advertised and known brand), generic analgesic, branded placebo, generic placebo. The branded analgesic was perceived to be more effective than the generic analgesic, similarly the branded placebo was more effective than generic placebo. The branding of the pill enhanced the perceived effectiveness of both the active and the inert drug. Thankfully, the active drug was perceived as more effective than the placebo inert drug. Thank God, for small mercies.

Is the money spent on expensive branded shoes worth it?

Similarly a study by Frank Germann answered the question whether you will golf better with a branded putter? In other words it poses a question that all of us want an answer to – whether all the money that we have spent in buying expensive shoes or sport gear is worth it. And the answer is ‘Mostly Yes’.

In the Germann study the participants were tasked to complete putts on a putting green using an identical quality of putter. Half of the golfers were told that they were using a Nike putter, and the other half were not told the brand name of the putter. On an average participants who thought they were using the Nike golf putter needed fewer putts to sink the golf ball.

In a similar type of experiment conducted in a very different arena (of a scholarly maths test as opposed to a sporty golf game) the results were very similar. The participants of the study were given the same quality of foam ear plugs during a maths test to improve concentration. One half was told that it was a 3M ear plug and another half didn’t know the brand. Akin to the golf experiment, the group wearing 3M ear plugs got more questions right.

Germann’s results indicate that strong performance brands can cause an effect akin to a placebo effect. The use of an iconic performance brand which performs a related task, boosts the confidence level of participants by providing greater self-esteem and lowering the performance anxiety of the participants. This leads to better performance outcomes.

Another interesting observation was that the impact of the performance brand as a placebo was strongest in novices. The efficacy of the placebo effect was inversely proportional to the skill level of participant. In other words, expert golfers or brilliant math students received little or no performance boost through usage of the performance brands. This explains the ‘Mostly Yes’ part of the answer. So unless you are a good mathematician or a brilliant golfer, the money spent on the performance brand was worth it, at least in part.While we are on this topic, an interesting trivia is that when Nike signed up Michael Jordan in the 80s, and named a shoe after him, they expected sales of 3 million US dollars in a year. They eventually ended up selling 100 million plus worth of “Air Jordans”.

Does a ‘Beauty Patch’ work?

Dove conducted an actual ‘placebo test’ called the beauty patch experiment wherein they claimed that the participants who took part in the experiment would enhance the perception of their own beauty after the use of the ‘beauty patch’. Participants reported a significant increase in their perception of their own beauty and was surprised to discover that the patch was a placebo. Dove was truthful in a sense that they told their participants that this patch would change ‘perceptions of beauty,’. The patch managed to change perceptions fairly effectively, as echoed by the participants themselves.

So there is overwhelming evidence that brands work like placebos by improving performance or changing perceptions. Brands as placebos give us a confidence boost, reduce our anxiety in doing tasks and help us perform better.

The role of brands as placebos in the urban jungle, rat race

While we are at it, let us discuss the need for brands as placebos in our fairly stressful life in a fast paced urban environment. Living in a dense city and a hyper-competitive environment is quite unnatural and very stressful for a human being (who until a couple of centuries ago was living in villages). As a result, we require a fair dose of self-esteem building,confidence-inducing placebos to help us navigate the urban jungle & the debilitating rat races. Brands thus play a crucial role, and act as placebos boosting our confidence, improving our performance, changing our perceptions and altering our beliefs.

Jonathan Haidt talks about self-placebbing, wherein we spend a considerable amount of time administering a placebo to ourselves. These placebos work as signaling mechanisms to ourselves and our peers. Many products that we use have a utility and an ulterior placebo function. At a utility level, a Ferrari is car which does the job of transporting you from A to B. In dense & congested cities, in terms of utility it is a rather average means of transport, where a two wheeler is generally faster. But at an ulterior placebo level, Ferrari serves as an excellent aphrodisiac, a huge confidence booster or a very effective signal to humiliate a business rival.So even though a Ferrari goes at twenty kilometers an hour in a bumper to bumper Mumbai traffic, as a confidence or self esteem boosting placebo, it rather outclasses a Honda Civic.

Is 10x priced wine, 10x more tasty?

Likewise, there are a lot of luxury brands that have a basic utility function, but deliver extremely well on the ulterior placebo function. Expensive suits, thousand dollar cigars, gadgets, obscenely priced single malts etc. are all products that deliver strong placebo effects to the rich & famous men. An expensive wine is not ten times more enjoyable than a good affordable one, but it does administer a huge confidence-inducing social status placebo.

The female beauty industry is not just about beauty

So while men splurge on their placebo toys, the women have perfected the usage & rituals of self-placebbing into a fine art form. They have patronized a huge industry that delivers powerful doses of placebos to womankind- the female beauty industry, which is bigger in size than the education industry. A lot is made of utility function of the industry i.e. of enhancing the beauty or ‘the sex-appeal’ of women. The fact of the matter is it takes very little to attract the attention of the opposite sex. You need basic grooming and a sexy outfit to attract attention of the opposite sex. It does not take a long and tiresome regimen of two hours to appeal to the opposite sex. The two hours of beauty regime is actually a process of administering a confidence placebo to oneself.

In India, marriages are great occasions to observe these self-placebbing rituals. In North India, one usually finds that marriage procession are generally delayed. One of the primary reasons for this is that the women on the groom’s side take ostensibly long to get decked up. And amongst the women folk the grannies, usually take the longest time and have to be literally begged to finish their beauty regimen. On occasions they need to be dragged out of beauty parlours so that the marriage procession can depart. One would imagine that the grannies would not be very keen in attracting the attention of grandpas that would show up at the event. But they have an acute need to give themselves a big confidence placebo. One of the grannies I know went for an expensive set of teeth transplant just so she could smile confidently in marriage pictures.

Placebos need to be slightly absurd to work and need to follow a certain set of rules to be perceived as effective. We discuss these rules in the forthcoming article. Suffice it is to say the cosmetics work well as a placebo because they follow some of the basic rules of an effective placebo.The cosmetics are insanely overpriced (and therefore assumed more effective) and very time consuming to administer(a lot of extra effort heightens the placebo effect).

In mature markets, the ulterior placebo attribute is critical to differentiate

Firms spend a lot of time innovating and crafting a differentiated product proposition focusing on the features and utility function of their products. However in mature markets where products and services are more or less similar, tapping into a belief system, and positioning the brand based on its ulterior placebo attribute may be a more potent way for the brand to gain traction. In fact to take this argument a bit further, building in product or packaging attributes or usage rituals into the product or service may heighten the placebo effect and therefore the perceived value.

Having said that, not every placebo works with everyone, and the efficacy of a placebo also differs based on various factors, which we shall cover in subsequent articles. For a brand to take a shot at being an effective placebo, the brand has to tell a story which latches onto the belief system of a subset of population. This subset must believe your story to be authentic for them to buy into the story of your brand. They must connect with the story at a deep, meaningful level and ‘perceive’ it to be true. This encourages trial for the brand. Recently, there has been a huge outrage in India concerning Hindustan Unilever’s brand Fair & Lovely, so much so that the brand has to re-name & position itself as Glow & Lovely. But there was a time, when a big subset of population brought into the insecurity linked with dark skin colour, and the brand delivered a steady dose of fairness linked confidence placebo to millions of women.

Obviously it goes without saying that a premium brand has to deliver well on the utility function, maybe marginally better than a lower priced variant. So an expensive bag has to be well stitched, well crafted. But for the brand to be truly perceived as premium it has to deliver a strong placebo effect. The brand has craft a unique story and possibly include some attributes that heighten the placebo effect. And thereafter, the brand has to deliver on the brand experience being consistent to the story told.

If the story connects to the core customer’s beliefs then the brand has a decent shot of delivering a strong placebo effect. These core customers then become your brand’s early adopters and evangelists. They narrate the brand story as their own, and convert other consumers. They help grow a small market into a large one.

So for example if you believe, as a consumer, that your brand of sneakers XYZ is cooler than competition ABC, and wearing XYZ makes you feel cooler, then for all purposes you perceive yourself to be cooler than your friends wearing ABC. And with the brand’s placebo effect at play, you get a significant boost to your confidence and self esteem. This emboldens you to give your cool avatar a shot, and helps you overcome any insecurities that you may have had. This acts like a self fulfilling prophesy, and one confident step leads to another. And lo & behold, you are the new cool person in town! Now that you have clearly brought into the story of XYZ it is time for you to validate the story you are telling yourself. One good way of doing that is to persuade your friends wearing ABC to switch to XYZ.

Communication strategy vital to accentuating the placebo effect

Besides the brand story, the communication or persuasion strategy also plays a key role in accentuating the placebo effect of brands. Cacioppo and Schumann conducted a study wherein they manipulated participants’ interest in an ad for the “Edge razor”. They informed the participants that the participants could select from brands of razors (high relevance to the ad) or brands of toothpaste (little relevance to the ad) as compensation for participating in the study. Subsequently they subjected the participants to a strong arguments ad (Edge blade gave twice as many close shaves than nearest competitor) or weak arguments ad ( Edge blade gave no more nicks or cuts than competition).Both these arguments were presented by a celebrity endorser or an ordinary citizen.

The study found more persuasion for strong than weak arguments when the razor advertisement was higher in personal relevance (razors as compensation) versus when lower in relevance (toothpaste as compensation). Besides there was a larger impact of the celebrity endorser when the ad was low as opposed to high in personal relevance.

To conclude, good brands work more effectively because of the placebo effect. Like all placebos, good brands are ideas that are planted in our minds. When these brand ideas stick, they trigger beliefs. Belief is a powerful drug. It is a drug that works best at the deepest levels of the human mind, affecting it both consciously and subconsciously. So it is not possible to fully understand how a placebo or a good brand works at a subconscious level.

Good brands are well positioned and packaged placebos. And like all good placebos they serve a real need, and solve a real problem. They are excellent problem solving tools. And like all placebos, they do so without incurring any significant side-effects. After all, when compared to more violent options, Ferrari is a relatively harmless way to humiliate a business rival.

Sarvajeet Chandra writes on issues that are usually brushed under the carpet, or are too everyday-ish for armchair strategists. He writes on making strategic plan robust, how to execute strategy well and other tactical issues for everyday business success.