Brand Marketing

Organizational mission

2010-11-19T09:00:00.000+02:00

Organization's commitment to a type of business and a distinctive marketplace role. It is reflected in the attitude to consumers, employees, suppliers, competitors, government, and others.

Variety-novelty seeking

2010-11-18T20:29:00.000+02:00

A personality trait, which measures a consumer’s degree of variety seeking. Individual who possess this personality trait are often purchase products, which have some variety or novelty in them.

Cross-cultural influences

2010-11-13T20:34:00.000+02:00

Norms and values of consumers in foreign countries that influence the strategies of multinational firms marketing their products abroad.

Family Branding

2010-11-13T20:30:00.001+02:00

The practice of marketing several company products under the same brand name.

Premium house

2010-11-09T15:24:00.000+02:00

Special agency, which buys and supplies goods used for sales promotion purposes, often buying on an international scale.

Designated market area (DMA)

2010-11-08T10:12:00.000+02:00

The geographic areas used by the Nielsen Station Index in measuring audience size, from which stations attract their viewers.

Denouement

2010-11-08T10:10:00.001+02:00

The revelation of new information at the end of a teaser campaign.

Direct marketing channel

2010-11-06T14:50:00.000+02:00

A marketing channel that has no intermediary levels.

Relative precision

2010-11-06T12:51:00.000+02:00

The degree of precision desired in an estimate of a parameter is expressed relative to the level of the estimate of the parameter.

Greeters

2010-11-03T20:26:00.000+02:00

Supplier employed sales representatives who solicit business from retailers on buying trips.

Lookalike branding

2010-11-03T10:26:00.000+02:00

Packaging a product in such a way that it looks similar to the brand leader, without actually making the pack or brand name identical.

Line family branding

2010-11-03T10:25:00.000+02:00

Grouping related products under a single brand name.

Cold mailing

2010-11-02T10:04:00.000+02:00

Direct mailing to new prospects as and when a mailing list is hired. The response rate of cold mailing is generally very low.

Import

2010-11-02T09:57:00.000+02:00

Imports: Goods or services entering a country.

Importers: Retailers and wholesalers that fulfill the same functions as distributors. Generally do not have exclusive rights to the product.

Functional matrix

2010-10-31T21:38:00.000+02:00

An organization option in which the matrix leans toward the functions. Participant have dual reporting relationships, but the functional reporting is intended to dominate the thinking and action.

Vertical sales organization

2010-10-31T20:06:00.000+02:00

Organization that has several levels ofmanagement all reporting upward to the next level.

Gable end

2010-10-31T13:40:00.000+02:00

In the context of outdoor advertising it refers to poster site on side-wall of house or shop.

Goodness-of-fit test

2010-10-31T13:37:00.000+02:00

Statistical test employing χ2 to determine whether some observed pattern of frequencies corresponds to an expected pattern.

Visit duration (Web)

2010-10-30T20:05:00.000+03:00

The length of time a user spends on a Web site during a visit, or the number of pages viewed at a Web site during a visit.

Advertorial

2010-10-29T20:04:00.000+03:00

Lengthy print advertisements that are laid out to resemble editorial material, often it is difficult for readers to distinguish between the two.

Groupware

2010-10-28T22:53:00.002+03:00

Online technologies that lead to collaboration and sharing between members.

Variety Store

2010-10-28T22:53:00.000+03:00

A type of outlet or store that handles a wide assortment of inexpensive and popularly priced goods and services, such as stationery, gift items, women's accessories, health and beauty aids, light hardware, toys, house wares, confectionery items, etc.

Value added reseller (VAR)

2010-10-28T22:52:00.000+03:00

Reseller who buys a product from manufacturer, adds value to it in the form of a modification, upgrade, system improvement and so forth, and sells the completed configuration to and end user.

External marketing

2010-10-28T22:50:00.000+03:00

It refers to the marketing directed to people outside the company, particularly to the consumers.

Portfolio analysis

2010-10-28T20:03:00.000+03:00

In the context of marketing it refers to how a firm determines the manner in which its strategic business units (SBUs) are distributed in relation to various factors that influence business success and to various measures of success.

Virtual value activities

2010-10-27T20:02:00.000+03:00

The generic strategies which firms use to make information more valuable.

Knowledge structures

2010-10-27T11:15:00.000+03:00

Organized systems of concepts relating to brands, stores, and other concepts

Spot rate

2010-10-27T09:18:00.000+03:00

An exchange rate quoted for immediate delivery of foreign currency, usually within two business days. It is applied to interbank transactions that require delivery of the purchased currency within two business days in exchange for immediate cash payment for the currency. This exchange process is called settlement.

Limited problem solving

2010-10-27T09:17:00.000+03:00

Limited search by a consumer for a product that will satisfy this or her basic criteria from among a selected group of brands.

Commodities

2010-10-27T09:14:00.000+03:00

A term used to denote basic raw materials or agricultural products, which do not normally carry a brand name.

Virtuous cycle

2010-10-26T20:01:00.000+03:00

A cycle of growth that produces positive returns. Each success in the loop promotes another success in another part of the loop.

Income receipts and payments on asset accounts

2010-10-26T09:41:00.000+03:00

A component of current account balance that measures foreign investment in the home country and its investments abroad. For example, a dividend received by an Indian company from one of its subsidiaries fro other country is considered to be an income receipt. A dividend sent by, for example, Ford India to its parent company in US is considered to be an income payment.

Stimulus discrimination

2010-10-26T08:47:00.000+03:00

The ability to select a specific stimulus from among similar stimuli because of perceived differences. Companies with well-established brand image try to encourage stimulus discrimination by promoting the unique attributes of their brands. Many times manufacturers of well established brands urge consumers not to buy “cheap imitation” because the result will not be what they expect.

Single segment concentration

2010-10-26T08:45:00.001+03:00

One of the options available to the company in selecting the target market. Under this strategy, the company concentrates only on one segment with a specific marketing mix. From this strategy the company gains strong knowledge of the segment needs and achieves a strong market presence. Furthermore, the company enjoys operating economies through specializing its production, distribution, and PROMOTION. If it captures segment leadership, it can earn a high return on its investment. This strategy is also known as concentrated marketing.

Spurious brand loyalty

2010-10-26T00:45:00.000+03:00

When a brand achieves a minimum level of satisfaction the consumer repurchases it on a routinized basis; the consumer appears to be brand loyal but is not.

Visual elements

2010-10-25T19:58:00.000+03:00

The third major component of a print ad. The illustration is often a dominant part of a print ad and plays an important role in determining its effectiveness. The visual portion of ad must attract attention, communicate an idea or image, and work in synergistic fashion with the headline, and body copy to produce an effective message.

Procurement orientation

2010-10-25T09:42:00.000+03:00

In the context of business buying behaviour this refers to purchasing orientation that a company adopts in its purchasing process. Here, the business buyers simultaneou sly seek quality improvements and cost reductions, buyers develop collaborative relationships with major suppliers and seek savings through better management of acquisition, conversion, and disposal costs. They encourage early supplier involvement in material handling, inventory levels, just-in-time management, and even product codesign. They negotiate long-term contracts with major suppliers to ensure the timely flow of materials.

Imputation estimates for nonresponse

2010-10-25T09:41:00.000+03:00

One of the approaches available to the researcher for adjusting for nonresponse in a research project. In this approach the researcher adjust for nonresponse by assigning the characteristic of interest to the nonrespondents based on the similarity of the variables available for both nonrespondents and respondents.

Silent seller

2010-10-25T09:39:00.000+03:00

Folder of press cuttings, advertisements, brochures, price lists etc. which a salesperson uses to show prospects features of the product and company.

Account potential

2010-10-25T00:42:00.000+03:00

Advertising agencies employ this term to denote the share of an account’s/client’s business that the agency can reasonably expect to attract.

Physical distribution (marketing logistics)

2010-10-24T19:56:00.000+03:00

The tasks involved in planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Country attractiveness-company strength matrix

2010-10-23T20:10:00.000+03:00

A grid technique used by the companies who want enter foreign markets. This matrix highlights a country’s specific product advantage on a country-bycountry basis. The country attractiveness is plotted on one axis and company’s competitive strengths on other.

Foreign direct investment (FDI)

2010-10-23T20:09:00.000+03:00

A market entry strategy in which a company invests in a subsidiary or partnership in a foreign market. Foreign direct investment entails some degree of control by the investor.

Vertical channel conflict

2010-10-23T20:07:00.000+03:00

A type of channel conflict in which conflict arises between different levels of channel members within the same channel. For example, a company may come into conflict with its dealers in trying to enforce policies on service, pricing, and advertising.

Visible design rules

2010-10-23T19:59:00.000+03:00

The specifications describing how modules must perform, and how they may interact.

Anticipatory pricing

2010-10-23T19:55:00.000+03:00

A pricing practice that is followed by some companies, where it raises the prices by more than the cost increase in anticipation of further inflation or government price control.

How to Set Goals for Your Advertising

2010-02-25T08:00:00.000+02:00

In setting goals for your advertising, remember at all times that your results must be quantifiable. Depending on your competitive situation and specific business goals, list the expected results as a definite number or percentage—not “more sales,” but, for instance, “5 percent more sales during the week following the ad.” If you, like many newcomers to a certain kind of business, have no idea what to expect, put down the number that will justify the cost of the ad if it meets your list of objectives. Regardless of the actual results, whether you like them or not, keep a record in writing. It is your benchmark for future planning and programs. How to use such a record will be discussed shortly.

Put It in Writing

2010-02-25T00:46:00.000+02:00

Put into writing your reasons for advertising—all the reasons—and the results you expect the advertising to bring. You need this list to give a sharper focus to the ads you are going to create and, probably even more important, to have a method of evaluating results. Don’t expect any one ad to do ten different things or you’ll get one-tenth the results . . . or none at all! Set priorities, then focus on the most important.

Preparation and Inspiration

2010-02-23T23:34:00.000+02:00

When Thomas Edison was asked the secret of his success, he replied, “Two percent inspiration, 98 percent perspiration.” You won’t have to work nearly that hard. Think of your task as “90 percent preparation, 10 percent inspiration.” That preparation starts with a systematic look at why you advertise and what you expect to get out of advertising.

What This Means to You

2010-02-14T12:18:00.000+02:00

People have more power today in our dynamic world. They act as both consumers and producers and work creatively on everything they purchase to make it their own. Have you experienced people sampling and mixing, cutting and pasting your products and marketing to make them their own? How does your company proactively respond to the cultural trends that have given people more power?

People have developed a brand immune system, as they are exposed to over 3,000 branded messages a day. How have the effects of this immunity challenged your branding efforts?

As the dynamic changes happening all around us continue to accelerate, your company must take steps toward building a deeper relationship with newly empowered customers. Do you understand the factors causing customers to approach your company differently and carry new expectations for that interaction? How is your company thinking about your customers’ fragmented lifestyles? In a world where people are both consuming and producing, how do you fit in? Can you help your customers in their quest to become active participants in developing their own products and culture?

If your company is feeling disconnected or left behind as people react to having greater freedom, too much information, more choices, and less time, what steps can you take to begin to understand and participate in the changes taking place? One important step in becoming more proactive is paying attention to the developing reputation marketplace that surrounds all companies today.

Unique Selling Proposition

2010-02-11T12:12:00.000+02:00

A unique selling proposition (USP) is one of the fundamentals of effective marketing and advertising. It refers to a particular quality, feature, or benefit offered by a product or service that is important to customers and not available from the competition.

Too Many Choices, Not Enough Time

2010-02-10T12:17:00.000+02:00

Just as people are creating filters and using other tools to make sense of the many messages that bombard them every day, they’re reacting in a similar fashion to a culture that offers far too many tangible offerings. In every category of business, there are more product choices than anyone could ever try, let alone purchase. No matter how much branding or advertising a company does, it’s increasingly difficult to wade through the clutter. I was in Russia recently, and many of the people I met in my travels had visited the United States. Their general impression was that the number of choices here, whether at the supermarket or the shopping mall, was simply overwhelming. In some fascinating recent research, Dr. Sheena S. Iyengar, an assistant professor at Columbia’s business school, and Dr. Mark R. Lepper, chairman of Stanford’s psychology department, have demonstrated that providing too many options—particularly when the real distinctions between them are small (there are over three dozen different flavors of Crest toothpaste, for example)—can cause people to feel overwhelmed and overloaded and, as a result, less likely to pursue any of the options available.^[11] People want variety, but they want companies to be reasonable at the same time. When the products available to them are relevant to their needs and their lifestyles, customers will feel that the companies behind those products have actually done their homework. Throwing out dozens of choices and assuming that people will find something they like doesn’t foster feelings of intimacy between companies and their customers. People don’t necessarily need more choices; they need choices that are personally relevant.

The reality is that, in response to this product overload, people are suggesting that more isn’t always better, that perhaps quality—or at least relevance—is more important than quantity. The only possible exception to this way of thinking is in people’s ongoing quest to find, somehow, more time.

Do you remember the articles in the 1960s and 1970s about the rise ofleisure time we would experience by the year 2000 because of increased productivity following the development of technologies like the computer? Remember how many futurists accepted the notion of a four-day workweek as the norm for most of us at the turn of the century? What happened? With our infinite choices, from 500 television channels to 125,000 new books every year, among others, we’ve filled up our “extra” time pretty fast.

If there is one constant for all of us, it is our lack of time, whether real or perceived. I look at it this way. I’m 43. The average American male lives 72.3 years (according to the National Center For Health Statistics). That’s 26,390 days, so I’ve got about 10,694 days left. If you’re like me, you sleep 8 hours per day (if you’re lucky)—that’s 3,565 days, eat 2½ hours per day—1,114 days, spend half an hour per day in the bathroom (hot showers rule!)—223 days, work 8 hours per day (25 years, maybe, maybe not)—3,042 days; work out 1 hour per day (hopefully)— 446 days, commute 1 hour per day (at least)—446 days; hang out with the family 2 hours per day—892 days, do things you don’t really want to do (pay bills, listen to telemarketers, do yard work) 1 hour per day—446 days. That leaves 516 days, or about 1 hour per day, left for following your bliss. I don’t know about you, but anyone hoping to get my attention these days better make it really mean something to me, especially if it infringes on that one sacred hour.

Visibility

2010-02-10T12:09:00.000+02:00

A desired result from brand investment is to gain greater visibility and awareness. This is the first step in communicating with desired audiences to try the brand and gain first-hand experience of its tangible and intangible benefits. Visibility has often been tied to traditional advertising but now has wider meaning in brands being used visibly by category influencers, such as personalities and characters in television and film.

Visual Identity

2010-02-09T12:09:00.000+02:00

This is extending a company’s brand in every possible way with every element contributing to a distinctive visual style. This includes where and how a logo is used, colors, type fonts and sizes, and imagery. The purpose of a company’s visual identity is to set it apart from its competition and, in order to be effective and memorable, it has to be consistent across all media.

The Music Industry

2010-02-08T12:16:00.000+02:00

The music industry is a sobering example of an industry caught in the crossfire of disruptive technology’s radical changes. The industry’s model has always been to find new musicians and make them into stars by controlling the distribution of the music. With the development of the Internet and file-sharing services such as the groundbreaking Napster and its followers Kazaa, Morpheus, and Grokster, record companies, trying desperately to control distribution, were thrown for a loop. In May 2003, more than 11 million Americans used Kazaa, the most popular file-sharing software, according to Nielsen/Netratings.

In September 2003, in a reaction to the popularity of various programs, the Recording Industry Association of America (RIAA) brought lawsuits against 261 users of file-sharing programs. Each defendant in the first round of suits (including a 12-year-old girl and a grandfather whose grandson used his computer) had more than 1,000 songs in accessible folders that allowed millions of strangers to copy them. While these lawsuits were initiated to give the music industry some short-term relief, people reacted by digging in and demanding access to what they really wanted—not just what record companies wanted to sell to them.

One of the main reasons given for initially taking such drastic measures was protecting the rights of the musicians. But many of these “protected” musicians found themselves in the middle, watching helplessly from the sidelines as their fans were taken to court. Many artists felt that the actions went too far and negatively affected their relationships with their fans.

One artist, Moby, had an especially hard time understanding or endorsing the record industry’s aggressive tactics. On his Web site (http:// www.Moby.com), he suggested that music companies might want to think about treating users of file-sharing services like fans instead of criminals:

How can a 14-year-old who has an allowance of $5 a week feel bad about downloading music produced by multimillionaire musicians and greedy record companies? The record companies should approach that 14-year-old and say: “Hey, it’s great that you love music. Instead of downloading music for free, why don’t you try this very inexpensive service that will enable you to listen to a lot of music and also have access to unreleased tracks and ticket discounts and free merchandise?”

The singer David Bowie envisions an even more radical paradigm shift. “I’m fully confident that copyrights, for instance, will no longer exist in ten years, and authorship and intellectual property is in for such a bashing,” Bowie said in an interview last year. “The future of the music industry,” he suggests, “is that songs are essentially advertisements, and artists will have to make a living by performing on tour.”^[4]

The idea of suing the record industry’s fans was really the industry’s last-ditch, desperate effort to react to disruptive technology. Many executives in the record industry agree that their problems go much deeper than file swapping. These problems include the consolidation of radio stations, which makes it harder to expose new bands to the public, and the lack of a popular music style, like teen pop and its packaged stars such as the Backstreet Boys, N’Sync, and Britney Spears. Other factors include the economy and the ongoing competition for people’s time in a world full of video games and DVDs.

Ironically, while file sharing is seen as the embodiment of evil in the music business, many companies within the industry currently benefit from the services of Big Champagne, a company that uses its software to see what Internet users are sharing on peer-to-peer file-swapping services (like Kazaa) in greater detail. They have the ability to watch all filesharing activity, segmented by artist and zip code. This is an extremely powerful tool for music companies. They can monitor what’s being traded versus what’s playing on the radio. If there is a discrepancy, they can use the information to convince radio stations to give their acts more play time. Big Champagne sells subscriptions to its service for between $7,500 and $40,000 per month. Not many record companies will admit to using Big Champagne’s services, yet their client list reads like a “who’s who” of the record industry, including Atlantic, Warner Bros., Interscope, DreamWorks, Electra, and Disney.^[5]

Additionally, there is some overt hypocrisy in the music industry’s actions. Josh Bernoff, the principle analyst covering media and entertainment for the research giant Forrester Research, got a call about some industry-specific research from a record industry executive whose company aggressively discouraged file sharing. After listening to the executive’s questions, it was obvious that he had read the report. Bernoff asked him if he was a subscriber and, if not, how he had seen the report (Forrester sells it for $895). Apparently, the executive had gotten his copy from a colleague at one of the movie studios.

On a more positive note, some musicians have come away from the experience with a renewed interest in connecting directly with their fans. Pearl Jam has made an effort to reestablish this relationship, and it has paid off.

In 1995, Pearl Jam became frustrated with the high price of concert tickets and decided to put pressure on Ticketmaster to cut ticket prices. Since then, the band has become innovative and proactive in their relationship with their fans. Additions include producing live, band-produced bootleg CDs, lower ticket prices, and online ticketing for fan club members. Even though Pearl Jam has not produced a music video since 1993 or had a top-ten radio hit since 1999, their concerts are among the best-selling events in the industry. In September 2000, Pearl Jam released its first wave of bootleg, contra CDs produced by the band. The CDs were so well received that 5 of the 25 albums hit the billboard top 200 chart in their first week.

This powerful relationship with their fans has given them the ultimate freedom. The band is considering dropping Sony Epic, its record label of 12 years, and getting out of the corporate music world altogether. And promoters have a love/hate relationship with the band’s policies, especially the policy that dictates that fan club members get the best seating at concerts. It must be a shock for some music industry executives to sit behind the fans at a Pearl Jam concert.

While some may feel that the music industry’s experience is unique, no industry is immune. The founders of Kazaa, Nikolas Zennstrom and Janus Friis, and the same team of programmers who wrote the code for Kazaa, reunited in the fall of 2003 to create and launch Skype, a way for people to make free, high-quality phone calls over the Internet. Skype relies on technology called “voice-over Internet protocol” (VoIP). It routes calls through the Internet, turning computers into phones. VoIP is being used by a number of new, small phone companies and is becoming incredibly disruptive for traditional telecommunications companies, because these new companies can charge next to nothing for their service. Mr. Zennstrom has a big ambition with Skype: to make it the global telephone company.

Visual Language Concepts

2010-02-08T12:07:00.000+02:00

A number of alternative visual strategies used to articulate different but related elements of the brand. Each concept will reflect the brand positioning and create a story using visuals rather than words.

Viral Marketing

2010-02-07T12:06:00.000+02:00

Viral marketing is spreading a brand’s message person to person via word of mouth. It encourages people to pass along marketing messages to friends, colleagues, and/or family, thereby creating exponential growth in the message’s reach. It is nicknamed “viral” because the exposure to a message mimics passing a virus from one person to another. Typical techniques include email messages, jokes, web addresses, funny film clips, and games that get forwarded electronically by recipients.

Wordmark

2010-02-06T12:05:00.000+02:00

A wordmark is the way you write a name that is unique and ownable. It also refers to a logotype. It typically incorporates one or more unique characteristics such as a custom designed font, symbol, or graphic device.

Wear Out

2010-02-05T12:04:00.000+02:00

The point reached when a communications campaign loses effectiveness, due either to repeated overplay or the audience’s wants and needs no longer being met by what is promised in the communication.

The Power of Reputation

2010-02-04T12:17:00.000+02:00

All too many irrelevant messages are floating around the cultural ether and getting in the way oflistening. People are becoming much more sensitive to the amount of information available and much more discerning about where they will focus their attention. This happens for people at work as well; there is an abundance of information to absorb about markets, competitors, and customers. All of this secondhand data can perhaps be useful, but not if the time required to digest it precludes sitting down with customers and getting to know them. People within companies, just like their customers, must actively prioritize both their sources of information and the data itself. Having access to vast amounts of information might seem ideal, but the real value lies in the messages themselves. Don’t allow yourself to become distracted by trying to listen to everyone and everything being said in the marketplace. Find the right voices, and commit yourself to really listening to them.

It’s a big challenge for individuals and companies to filter the messages they receive on a daily basis. Nobody wants to overlook something important or give too much attention to something oflittle value. One tool that has played a vital role in human evolution, and that is gaining more power in our complicated world, is reputation. People are placing a great deal of importance on the reputations of the companies with which they choose to interact and are actively networking with others to share information. Given the immediacy of shared knowledge (remember Apple’s experience?), companies are starting to realize that their long-term success will be based on a combination of intimately knowing their customers, doing a consistent job of satisfying these customers, and simultaneously upholding positive corporate reputations.

To understand the power behind reputation, it’s important to look at it as more than just a persistent “image” people hold for each other or for companies. In the context of our evolving society and the demands placed on each of its members, reputation carries weight largely because it springs from the cooperative, word-of-mouth transfer of information between people. Remember how important your reputation was to you in high school? We all have at least some concern about how others view us; for any company, this is especially important. We know that customers are demanding more authenticity from companies and their products, that people want to be heard by companies, and that people value corporate commitment for the long term, not just for quick financial gains.

If companies fall short in any of these areas, people will talk about it. They’ll share their opinions with as many people as they can reach— and, as we saw with Apple’s iPod “mistake,” the power of the people is abundantly clear. Two “small” voices reached the ears (and eyes, in this case) of over a million potential Apple customers. Apple’s reputation— and some very quick acting on their part—saved them from serious trouble. The power of reputation comes from building a good one in the first place, then being able to defend it legitimately. When your customers expect more of your company, you’ll be more likely to meet, or exceed, those expectations. Henry Ford, one of the greatest businessmen in the history of this country, claimed, “You can’t build a reputation on what you are going to do.” He knew that a good reputation is one of the greatest assets a company can have.

For a couple of decades, companies have had the ability to capture and analyze their customers’ reputations through formal gossip networks or credit reports. It’s easy for any company to view a person’s credit rating and see what type of customer reputation they have. If you have a frequent shopper card at your local grocery store, the grocer is collecting information about what you buy as you save a few dollars on those purchases. People’s individual buying habits are becoming widely tracked and just as commonly traded. This trend of gaining intimate knowledge of customer’s behavior has only just begun.

Today’s newly empowered customers—already active in gaining market knowledge—are also using their power to aggressively pursue and share information about specific companies. After decades of being the specimens under the microscope, today’s shoppers have pulled off a role reversal. Your company is just as likely to be squirming on the slide under the watchful, critical eye of your customers. Can your reputation survive this close scrutiny?

As our world continues to be more complex, the power of reputation will grow even stronger. There are already many examples of reputation marketplaces playing an integral role in our lives. If you live in a U.S. city and enjoy shopping and eating, chances are you have read or own a copy of a Zagat’s Guide. Tim and Nina Zagat have built their business by providing diners, shoppers, and theatergoers with a forum to express their opinions about restaurants, shops, and entertainment. The Zagat Survey’s power is in the reputation of the grassroots methodology, which allows customers to write reviews and share information about their experiences. If you are a restaurant owner in New York City, you care immensely about your reputation in the Zagat Survey.

Today’s electronic culture feeds on this grassroots buzz. As society becomes networked through the proliferation of new technologies, the process of reputation sharing is being greatly accelerated, while the cost is decreasing dramatically. A perfect example of how a reputation marketplace functions on the technology playing field is eBay. Often called the world’s largest flea market, eBay is a fluid marketplace that allows transactions to happen with less friction between people—and more trust. Much of this trust may be attributed to its reputation system. Paul Resnick, an associate professor at the University of Michigan’s School of Information, describes the power of these systems: “Reputation systems seek to restore the shadow of the future to each transaction by creating an expectation that other people will look back on it. The connections of such people to each other may be significantly less than is the case with transactions on a town’s Main Street, but their numbers are vast in comparison.”^[6]

Resnick has been a leader in the field of online reputation marketplaces for over a decade. In 1992, he and a few of his colleagues created a software program called GroupLens. The idea behind GroupLens was to give online bulletin board readers the ability to rate messages and make those ratings available to other readers. Today, Resnick runs a Web site devoted to academic research on the subject of online reputations, Reputations Research Network (http://databases.si.umich.edu/reputa tions/). This network was created “. . . for researchers who are studying how reputation systems should work in theory, how they actually work in practice, and how they could work better.”

With its over 50 million members, eBay is an excellent example of a marketplace that has been greatly enhanced by the sharing of reputation. Resnick puts it this way:

At eBay, for example, a stream of buyers interacts with the same seller. They may never buy an item from the seller again, but if they share their opinions about this seller on the Feedback Forum, a meaningful history of the seller will be constructed . . . Through the mediation of a reputation system, assuming buyers provide and rely upon feedback, isolated interactions take on attributes of a long-term relationship. In terms of building trust, a vast boost in the quantity of information compensates for significant reduction in its quality.^[7]

Epinions.com is another example of a Web site that uses the power of reputation as a central business strategy. Contributors to Epinions are paid for their opinions about everything from movies to cars. It is a reputation marketplace. Visitors to Epinions.com rate contributors and opinions. The better the rating, the more you are paid for your reviews. “Epinions is one of the most active and varied ecosystems on the Web,” Wired editor Mark Frauenfelder wrote. “It has evolved into a diverse community populated by cliques, clowns, parasites, symbiotes, self-appointed cops, cheaters, flamers, and feuders. It’s swarming with people who were English or journalism majors but ended up stuck in other careers. And it has produced member-generated site refinements, such as the Web of Distrust.”^[8]

The power of these reputation markets increases as these forums continue to use more sophisticated self-regulation techniques, like rating the quality of reviewers’ comments and keeping out blatant self-promotion or excessively negative comments.

The phenomenon of Web logging has also contributed in a major way to the online reputation marketplace. Web logging is a term used to represent the activity of writing a hypertext diary online. Millions of people keep Web logs, or “blogs” as they are affectionately known, to express their opinions. Bloggers can offer not only their own points of view but also links to other sources. Henry Jenkins, a Professor at MIT, sees the power of blogging as the power to reframe issues. Jenkins believes there are two kinds of media power. One comes through media concentration: a message gains its authority by being broadcast on network television. The second kind of media power comes through grassroots intermediaries: here, a message gains momentum only if it is deemed relevant to a loose network of people. “Broadcasting will place issues on the national agenda and define core values; bloggers will reframe those issues for different publics and ensure that everyone has a chance to be heard,” says Jenkins.^[9]

Companies are beginning to realize the power of these self-selected reputation markets and are both seeding products to user/reviewers and using their reviews in their marketing. For instance, on their company Web site, Laplink Software lists a review by “lucie30,” the username of an individual user from an Epinions forum, right alongside reviews from traditional media.

What would you do if you found out that there was a grassroots protest against the highly anticipated launch of your new product? Intuit launched its Turbo Tax Deluxe in January 2003. Soon after the launch, the buzz throughout the Internet was decidedly negative, largely because of the software’s antipiracy features, which made it difficult to install. Intuit had also decided to make each copy of its new version installable on only one computer.

A firestorm of negative comments flowed through reputation markets from Epinion.com to Amazon.com. Amazon alone carried 587 negative comments about the software. One customer wrote, “After using Turbo Tax for 13 years, I’m switching to Tax Cut.”^[10] Quite simply, the Internet has thrown open the doors to reputation marketplaces. Now customers can share and contribute to companies’ reputations as easily as companies review their customers’ credit ratings. This democratization of reputation marketplaces has significant implications for companies.

With these new online tools, people have begun to exercise their significant power. With this leveling of the playing field, companies must now dedicate their resources to really listening and responding to these reputation marketplaces.

By understanding the power of the reputation marketplace, Intuit’s CEO, Stephen Bennett, was able to react in a positive, proactive way to a potentially damaging situation. Mr. Bennett e-mailed angry customers to reassure them that he would take care of the problems and that Intuit was not trying to do anything malicious.

The power of reputation has the potential to have a dramatic effect on traditional marketing, also. “The more consumers come to trust the opinions posted in online forums, the less effective traditional advertising will become in influencing consumer behavior,” said Chris Dellarocas, a Professor at MIT. The fluid reputation marketplaces of the future will certainly challenge the power of branding.

In direct response to these reputation markets, Amazon has cut its traditional advertising budget and focused its energies in other areas, offering free shipping for orders over $25, for example. By listening to what their customers have to say and offering to give something back to them, Amazon is taking a step toward deeper trust and a more honest, intimate relationship.

The Culture of Copying and Sharing

2010-02-04T12:15:00.000+02:00

Most Americans don’t need more stuff. There are already enough televisions in the United States to supply each home with two. A great many of us live in houses several times the size of our grandparents’. Most families have more than one car. We are now living the old perception of “the good life.” We have greater freedom to personally decide which products, companies, and brands might best fulfill our needs; we can ask ourselves, for instance, what kind of car might best project our unique personality. The flipside is that, in this quest to become self-actualized, people regularly exercise the freedom to copy and take what they want from brands, constantly reinterpreting how brands fit in the context of their lives. In this environment, brand loyalty only happens if and when people truly connect with both a brand and the company behind it—and both stay relevant to their lives.

The Internet has been disruptive for many businesses due to its major impact on how people do things today. People have more power to easily compare products, make more subjective purchasing decisions, and exploit price variances; all these factors radically alter the traditional business environment. In addition, people are actively participating in a new culture of copying; there is a new ethic that, as long as you can get it, it doesn’t really matter how. The Internet has become a metaphor for a new cut-and-paste morality. Some would argue that the Internet is only one factor contributing to the rise of copying. A much larger factor is the pervasive trend of copying by corporations.

People have become fully aware that companies often buy products and simply copy their brand name onto them. For many companies, production has come to be viewed as a liability rather than an asset. Naomi Klein, in her book No Logo, calls this a “race towards weightlessness.” In today’s culture, a product itself does not always hold value, but prominently displaying a company’s logo on any product automatically produces a perception—and expectation—of certain brand attributes.

This internal focus on improving productivity and efficiency has spawned many companies that don’t actually make anything at all. Enron was a classic example of an American company that accomplished the “weightlessness” that Klein mentions. With higher productivity has come higher profits and more financial rewards for corporate executives such as Martha Stewart, Dick Grasso, Bernie Ebbers, and Ken Lay. Such executives, even in today’s consumer culture, epitomize the disconnection between some executives and their customers and companies that are better known for their greed and corporate malfeasance than for understanding their customers and running a good business.

Today’s culture supports the mentality of DJs, file sharers, and product cloners, who are all doing what has become a cultural norm: reproducing things at a cheaper cost (or in less time) that were originally produced somewhere else. “Somehow everybody makes out,” said a woman on the streets of New York after buying two copied Louis Vuitton handbags. “I don’t see any poor rock stars. I don’t see any poor designers.” All of a sudden, buying fake is cool. Shopping for copies has become a trend in itself.

This culture of copying, or a cut-and-paste view oflife, is affecting all levels of society. It engenders a “think globally, act selfishly” attitude and is a natural result of people having access to more information, more choices, and the technology to combine the two for personal benefit. It also speaks of the connection people are striving to make with one another in the face of a very disjointed and frenetic environment.

While the Internet has certainly made global business transactions much more efficient, it has simultaneously enabled this new culture of copying. People’s ability to download something from the Internet, remix it, and immediately distribute it has directly contributed to their power.

Linux and open-source code is a wonderful example of this cooperative, creative ethos. In reaction to Microsoft’s stranglehold on the software market, software developers have cooperatively developed open-source software, such as Linux, giving everyone the ability to access and modify the source code, instead of hiding it as a corporate asset. This open-source philosophy is not only a challenge to Microsoft but can be seen as a challenge to many other industries as well. Lawrence Lessig, a professor at the Stanford Law School, has called open-source software an example of “creative commons,” or a place where intellectual resources can be shared.[3] In effect, it is a way of creating a healthier democracy through the open sharing of knowledge.

The Internet has created the ability to share information on a global basis, and as importantly, it offers people a new forum within which to borrow, sample, and remix information quickly and easily.

The Rise of People Power

2010-02-04T12:14:00.001+02:00

People today have incredibly fragmented lifestyles; we all feel the pressures ofliving in a fast-paced, busy, and often chaotic world. While there are countless benefits to technology and most people appreciate having instant access to information, products, and services, the downside is that we aren’t always able to step off the fast-moving treadmill; the world just keeps humming along whether we like it or not. To capture people’s attention in this dynamic environment, companies need to take the time to view the world from their customers’ point of view. The passive “consumer” of the past is disappearing; your customers are educated, well-informed, creative people who want a voice in the shaping of the products and services available to them. With so many companies trying to get their attention, people need to feel that companies are listening to what they have to say.

Three cultural factors are contributing to the rise of people’s power. First, people today have greater freedom, which manifests itself in a growing culture of copying and sharing. Second, people are bombarded with too much information; in response, they seek out or create filtering mechanisms for sifting out what is relevant to them. This tendency has greatly increased the importance of reputation in the success or failure of a business, product, or service. Lastly, people are faced with too many choices at every turn, which leads them to be very protective of their time as well as of their financial and emotional resources. Today, quality oflife is an important daily goal.

CMO magazine

2010-02-04T12:11:00.001+02:00

CMO magazine reported that 58 percent of chief marketing officers surveyed agree or strongly agree that the marketing function is changing and that their primary challenge is to define their place in the organization.

Website

2010-02-04T12:02:00.000+02:00

A website is a collection of linked, interconnected pages on the internet used to provide information about a company, organization, cause, or person. Websites can be purely informational, can serve marketing and advertising functions, and/or can be a point of interaction or sales. Another touch point in the brand experience, a website is an opportunity to communicate all that makes the brand unique.

Penetration

2010-01-26T10:54:00.000+02:00

Penetration is often short for market penetration, and refers to the extent that individuals or organizations in a particular market have already purchased a brand, and/or the degree to which a product or service is known among potential buyers. This is a growth strategy in which a company concentrates efforts in its target market in order to increase market share or enhance its competitive advantage. Market share increase can be accomplished by attracting buyers of competitive brands; persuading current customers to buy more; offering an improved or revised product; and/or by attracting consumers who don’t currently buy in the product category.

One-to-one Marketing

2010-01-25T10:53:00.000+02:00

Often called personalized marketing, this is when a company tries to make a unique product offering to each potential buyer. It is most practical on the internet because a website can track a customer’s preferences and offer buying suggestions. For example, Amazon tracks individual customer histories and inclinations and makes specific, customized product suggestions.

Opportunity Model

2010-01-24T10:52:00.000+02:00

An opportunity model collects and studies past and present information in order to identify trends, forces, and conditions to help management choose appropriate strategies to meet company goals. The Interbrand Brand Opportunity Model employs a construct of differentiation, credibility, relevance, and stretch to determine the unique positioning for a brand.

Naming

2010-01-23T10:51:00.000+02:00

This is the practice of developing brand names for corporations, products, and services. Most often, the objective of naming is to develop ownable trademarks and trade names that express a brand’s promise and provide an easy way for consumers to identify and interact with it. Brand names are valuable economic assets and should be carefully created and protected by their owners.

News Releases

2010-01-22T10:51:00.001+02:00

News releases, or press releases, are written or recorded communications directed at the media announcing something purported to have news value. Their intent is to encourage journalists to develop articles on whatever the subject is, and they are commonly used in public relations as a means of attracting favorable attention to the PR firm’s client and/or products.

Change and Learning

2010-01-16T17:01:00.001+02:00

In turbulent times, many companies act like deer caught in the headlights of an oncoming car. It is hard to get out of the habit of doing what the company has always been doing and shift gears to be proactive in the face of change. Like people, companies resist change with tenacity, yet a changing environment and changing customer needs require— or demand—that the corporate status quo must change. To engage their customers, companies must place their brand within a deeper context of their customers’ lives.

Many times, companies get so wrapped up in finding that right, distinctive branding message that they lose touch with their communities. Hence, brands become defined by their own self-imposed boundaries from a lack of connectivity. They must broaden their view and understand that they are part of a larger community. A community is defined by its collective dialogue and, hence, has no boundaries. Instead, communities have horizons. A horizon is a place one never quite reaches. It is not a boundary or a goal. It is not defined as a final destination but more as a relative journey. Companies must recognize that, to deal with the uncertainty that the world presents, they must strive to jump into the community—like the Mexican fishing village—and enjoy the collective journey of being part of that community. By doing so, brands can develop more profitable, long-term, sustainable relationships built on mutual trust and understanding.

How can businesses accomplish this? Well, it starts with creativity. Creativity can be found in anyone who is prepared to enjoy the journey of interacting in a community. Most businesses are isolated from the central experiences of their customers and the context of their lives. They must be willing to get out of their offices and use their curiosity to rediscover the reality of the communities in which they live from the bottom up. Companies must take the time to wonder. Introducing creativity and wonder means that they must strive to live by more human values like honesty, friendship, and empathy. It means that companies must reframe and recontextualize their current world view. They must be willing to take the leap of faith, try and fail, and, most of all, use a bottom-up strategy to learn and become competitive in today’s dynamic world.

Getting Beyond the Brand

2010-01-16T16:58:00.002+02:00

In a world where people are demanding authenticity and originality more than ever, formulaic branding has lost much of its magic. As discussed, many things have contributed to the declining effectiveness of the success of top-down branding techniques. Compounding the problems for companies, people’s behavior is radically changing. Customers now want to act as both consumers and producers, working creatively on things they purchase to make them their own. People now have greater freedom, too much information, too many choices, and a lack of time and are more unwilling to buy products from companies that are not prepared to engage them in a dialogue.

This challenge to companies to bring the right customers directly into the planning process is compounded by changes in the environment in which brands exist. the antiglobalization movement, unstable macroeconomic conditions, and disruptive technologies will continue to be major issues, having the power to impart real damage on companies that remain disconnected from their customers and the communities in which they work. Additional factors, including the rising power oflarge retailers and the prevalence of fear, interject still more uncertainty into the branding process. This uncertainty is difficult to predict or prepare for. The only way to deal with it is to accept its presence and actively work to gain a deeper understanding of the environments in which brands work. Brands must continually strive to act like a local merchant, like a citizen of the community. In Latin, cum and minis mean “shared together.” In a true community, participants share their personal experiences. If companies want to identify with and be relevant to their customers, they must first become trusted, committed community members. With this step, companies can begin the journey toward creating long-term, sustainable relationships.

Most of us have been trained to think that there is always a “right way” to do things, and we often try to impose that perspective on our customers and the communities in which we do business. Last year, there was a story cruising around the Internet about how out of touch American businesspeople can be with the environments they enter.

An American executive had just sold his business and was taking some time to think about his next business opportunity. He decided to head south and spend the season in a coastal Mexican village. One day, he was standing at the pier, thinking about his next business move, when a small boat with just one fisherman aboard docked at the pier. Inside the small boat were several large yellowfin tuna.

The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied it was only a little while.

The American then asked why he didn’t stay out longer and catch more fish.

The Mexican said he had enough to support his family’s immediate needs.

The American asked, “But what do you do with the rest of your time?”

The fisherman said, “I sleep late, fish a little, play with my children, take a siesta with my wife, Maria, then stroll into the village each evening where I sip wine and play guitar with my amigos . . . I have a full and busy life, señor.”

The American scoffed, “I am a Harvard MBA, I’ve just sold my company for millions, and I can help you. You should spend more time fishing and, with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, until eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman, you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then Los Angeles, and eventually New York City, where you would run your expanding enterprise.”

“But señor, how long will this all take?” “Not long. Maybe 15 to 20 years.”

“But what then, señor?”

The American laughed and said, “That’s the best part. When the time is right, you announce an IPO, sell your company stock to the public, and become very rich. You would make millions.”

“Millions, señor? Then what?” “Then you would retire and move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, then stroll to the village in the evenings where you could sip wine and play guitar with your amigos.”

This Mexican fisherman acts very much like most customers. They’re living their own lives without staying up at night thinking about which laundry detergent brand will make them a better person or more popular with their friends. Yet, in the context of the executive’s world, a customer is just that—a customer—rather than a person. Many brands today are seriously out of touch with their communities and customers. But these same companies act surprised when their customers get upset and suggest that they seem out of touch.

Companies Control the Conversation

2010-01-11T12:42:00.000+02:00

When sales are down, a popular solution for many companies today is an attempt to “rebrand.” Following a misguided drive to turn Las Vegas into a family destination in the 1990s, the town is quickly shifting its gears back to the future. With the latest rebranding effort, Las Vegas has come full circle, back to the glory days when the Rat Pack glamorized the lifestyle of drinking and womanizing and the word family had a very different meaning. When was the Las Vegas brand ever about family entertainment?

Las Vegas first decided to market family-friendly entertainment following a few consecutive years of falling gambling revenues. The idea of attracting families was great in theory, until people actually started showing up with their kids. Casino owners came to a quick realization that this family market would never drive gambling revenue: Nobody maneuvering strollers and carrying diaper bags would be spending big money.

Now Las Vegas, with over 34 million tourists visiting each year, is in the process of rebranding itself again. “The new brand we’re creating is one of freedom based on sensuality,” said Oscar B. Goodman, the mayor oflas Vegas. The city’s new slogan, “What Happens Here, Stays Here,” reflects its new ad campaign. “The bottom line is that people can come here and go to the brink of whatever’s legal, without having anyone look over their shoulder,” the mayor said.[11] People who come to Vegas for its infamous attractions don’t want to be dodging baby strollers on their way to the party.

The mistake that Las Vegas made was in switching its allegiance from a historically powerful, and very authentic, customer base in pursuit of immediate financial rewards. Pursuing the family market didn’t necessarily make sense to the executives behind Las Vegas’s rebranding decision; they just failed to trust their gut.

The Myth of the “Consumer”

2010-01-10T12:44:00.000+02:00

The word consumption first appeared in the 14th century and meant to waste, use up, devour, or destroy. Its opposites—production or productive—appeared in Middle French in 1612 and meant to be creative or generative, but the idea of consumption being the opposite of production did not appear until 1745. To further confuse things, tuberculosis is historically known as the disease called consumption; at the beginning of the 20th century, “consumption” was still considered a disease. It was thought that people were sick if they thought about consuming goods. This hasn’t stopped companies from typically looking at their customers as “consumers.”

This classification is just as dangerous and potentially inaccurate as any stereotypical label. Do individuals, who just happen to buy products, want to be considered primarily as consumers? Do you spend 24 hours a day, 7 days a week, overtly consuming? Or are you a person with passions and relationships who has a life beyond that label?

Today, an increasingly diverse mixture of both cultural consumption and production threatens the corporate dominance of culture. New forms of resistance to a homogenized culture are beginning to appear. People are showing an interest not just in choosing the products and brands that are relevant to them but in helping to co-create those products. These “prosumers”—as Alvin Toffler called this emerging class in his 1980 book, The Third Wave—combine the roles of consumer and producer.[13] Toffler spoke of consumers of the future being interested in participating in the creation of their own products. He was right. Today, people are opting to gain local knowledge rather than simply succumb to the available market information. They choose to work creatively on everything they purchase to make it their own. They are also cultural DJs, sampling and mixing, cutting and pasting inspirations to develop and define their own new cultures.

Brands Are Empathetic

2010-01-09T12:39:00.001+02:00

Agencies and marketing departments continually strive to make their brands appear empathetic, yet most corporate executives are so preoccupied with the bottom line and so removed from their customers’ reality, that they have no real empathy.

Procter & Gamble once suggested that a competitor’s laundry detergent destroyed fabric. When the accused company researched the issue, one of their most surprising findings was that not one of the company’s executives, or their wives, even did their own laundry. They couldn’t begin to understand the laundry experience. This disconnect happens inside many companies; while executives are busy working, their customers are living the daily experiences that should be influencing company decisions.

Some companies are taking steps in the right direction. Ford Motor Company recently purchased 12 empathy-belly pregnancy simulators from Birth Ways, Inc. The suit—originally designed as an educational tool to discourage teen pregnancy—gives Ford’s designers the ability to feel what it’s like to be pregnant. Each suit features the large breasts and bulging stomach of a pregnant woman, a six-pound sandbag under the suit simulates pressure on the pelvis and the bladder, and two seven-pound lead balls can be inserted into the suit to simulate the weight of a growing baby. In total, the suit weighs more than 30 pounds and gives designers a sense of how a pregnant woman really feels trying to drive one of their cars. Ford’s designers also employ the use of a “third age suit” to help simulate the aging process. The third age suit helps to mimic symptoms of aging, such as blurred vision and arthritic joints. By using the empathy-belly suit and the third age suit, Ford is going beyond just listening to customers in their design process; such tools give their designers the ability to be their customers, if only for a few brief moments.[8] Only by actively understanding the context of its customers’ lives can a company begin to take the journey toward deeper empathy.

New Product Development

2010-01-07T12:00:00.000+02:00

This is the overall process a product goes through before introduction, and it involves seven phases: idea generation, screening ideas, concept testing, business analysis, developing the product, test marketing, and commercialization. New product development almost always refers to activities within an organization, as opposed to new products acquired from another company.

Service Brand/Marketing

2010-01-06T11:01:00.000+02:00

The service sector of the business world deals with marketing and selling intangible products instead of physical goods. Nail salons, travel agencies, insurance companies, lawyers, and so on are in the service sector, and what they sell requires branding and marketing just as tangible products do.

Labels Have Meaning

2010-01-05T12:42:00.002+02:00

It’s human nature to use words as a way to classify other people’s actions or behaviors. Whether it’s right or wrong, we all categorize people at times. Companies, and especially their marketing departments, do the same thing. A recent popular example of how words can be appropriated is the term metrosexual. Marketers now use this term to describe sensitive, image-conscious guys. “Their heightened sense of aesthetics is very, very pronounced,” said Marian Salzman, chief strategy officer at Euro RSCG, to the New York Times. “They [metrosexuals] are the style makers. It doesn’t mean your average Joe American is going to copy everything they do,” she added. “But unless you study these guys, you don’t know where Joe American is heading.”[9]

It is somewhat ironic that gay writer Mark Simpson originally coined the term metrosexual to mock everything marketers stood for. In the mid-1990s, Simpson used the word to satirize the way that brands and consumer culture promoted the idea of a sensitive guy: one who shopped, used products for his personal appearance, and read magazines like Men’s Health. Simpson felt that consumerism had taken its toll on traditional masculinity. From his point of view, men really didn’t go to shopping malls, use personal-care products, or read self-help magazines. It was all a fantasy propagated by marketers.[10]

However, in 2001, British media latched onto the word metrosexual, and Britain’s Channel Four produced a show about sensitive guys called Metrosexuality. Soon after, Britain found as their poster boy David Beckham, the English soccer star. Beckham has become a social icon by mixing his soccer stardom and marriage to singer “Posh” Spice with his habits of painting his fingernails, braiding his hair, and posing for gay magazines. As Americans became equally fascinated with Beckham, marketers gave new life to the term metrosexual in describing this new, sensitive man.

Companies should be hesitant to ascribe general classifications to their customers. While a label often does a fair job of describing its target population, individual characteristics are completely subject to interpretation. Relying on a simplistic descriptive tool to give life to someone as important as your customer, or potential customer, is dangerous. Get out of your office and spend time in the context of your customers’ lives. A bottom-up strategy will give you a deeper understanding of how your customers live and help you avoid the need to develop or depend on generalized labels.

Market Research

2010-01-05T11:59:00.001+02:00

This is the systematic approach to collecting, analyzing, and interpreting the information required to make sound marketing decisions. It is designed to determine the potential salability of a product or service by determining what people want and need. The information can be gathered from secondary sources that are already published and publicly available, or from primary sources such as the customers themselves.

Market Extension Strategy

2010-01-03T11:58:00.000+02:00

This is employing a marketing strategy designed for one country and using it to extend into another country, and then another. A brand extension strategy, on the other hand, uses the values of a popular brand to expand into new markets or market segments.

Luxury Brands

2010-01-02T11:58:00.000+02:00

Luxury brands are objects or services that are desirable but not essential. They are indulgences rather than necessities and are often expensive or hard to get. Luxury brands often deliver superior quality or better performance and consumers are willing to pay a premium price for them. The challenge of accessing due to either price or supply often results in imitations of the luxury brand.

Line Extension

2010-01-01T11:57:00.000+02:00

This is the use of an established and successful brand to introduce additional products into its existing category (for example regular Crest toothpaste extending into whitening toothpaste). Line extensions generally offer new features, flavors, colors, packaging sizes, or ingredients. The expected gains are incremental because existing customers will be given more choice and new customers may be attracted.

Identification Decisions

2009-12-31T11:56:00.000+02:00

These are choices a company makes about the branding identity it wants to give to a product. Typically, the choice is from among four alternatives – single brand names (Cheerios), product-line brand names (Quisinart cookware), corporate brand names (Scope mouthwash) and corporate family name (Knorr soup).

Brand Commitment

2009-12-30T09:51:00.000+02:00

The degree to which a customer is committed to a given brand in that they are likely to repurchase/reuse in the future. The level of commitment indicates the degree to which a brand’s customer franchise is protected from competitors.

Image Library

2009-12-29T11:54:00.000+02:00

Stock shots are photographs, illustrations, and video and film footage available for use by anyone for a set fee or, if they are in the public domain, for free. An image library is either a company in this business for profit, or nonprofit organizations (like a library, for example) that offer stock shots as a public service.

Hero Pieces

2009-12-28T11:53:00.000+02:00

A selection of communication pieces that show how best to use the visual identity that can be referred to as best practice examples. These are profiled in the brand guidelines and are often never static as the brand and its visual and verbal components evolve to maintain and enhance relevance and differentation.

Design to Cost

2009-12-27T10:01:00.000+02:00

In the development of new products, this is an approach that considers cost as its own design consideration, rather than as the outcome of a completed design. Here, costs would be based on projections about what consumers can afford and the nature of the competitive landscape. It helps build a business case prior to significant investment.

Color

2009-12-26T09:57:00.000+02:00

Color is an emotional and subjective component of every company’s design and communications. Without even being aware of it, consumers make purchase decisions every day based on their attitude toward color. People tend to identify with certain colors and marketers use color to identify a brand, set a mood, communicate specific associations, and differentiate one brand from another.

Brand Awareness

2009-12-25T09:52:00.000+02:00

Brand awareness is commonly used in marketing communications to measure effectiveness. It investigates how many target customers have prior knowledge of a brand as measured by brand recognition and brand recall. Brand recognition (also called aided recall ) measures the extent to which a brand is remembered when its name is prompted; for example, “Are you familiar with the Sony brand?” Brand recall (also called unaided recall ) refers to a customer being able to remember a specific brand when given a category of products without mentioning any of the names in the category.

Harvesting

2009-12-24T11:50:00.000+02:00

Harvesting is when sales of a brand begin to decline and companies slowly reduce their marketing investment, either to nothing, or to a bare minimum. These companies depend on the brand’s loyal customers to sustain it while they free up cash to pursue other opportunities. Brand harvesting usually precedes a brand’s total elimination.

Essence

2009-12-23T11:31:00.001+02:00

Essence is a collection of intangible attributes and benefits, the core characteristics that define and differentiate a brand. The easiest way to understand essence is to imagine that the brand is a person you are trying to describe – what defines that person, and what separates her or him from everyone else.

Design Principles

2009-12-22T10:01:00.000+02:00

The set of objectives and parameters that guide consistency in brand development. These ensure that equities are retained while allowing some creative license to extend the brand’s visual vocabulary.

Collateral

2009-12-21T09:56:00.000+02:00

This is marketing and sales promotional print material. Collaterals are often synonymous with brochures that communicate relevant information to target audiences in order to increase awareness, promote purchases, and/or provide post-purchase validation.

Happiness Can Be Bought—and Sold

2009-12-20T12:38:00.000+02:00

There is an assumption among both companies and people in America that the products we buy will make us happy. Companies—and brands—may be relying far too heavily on this assumption; the reality is that, after being exposed to as many as 3,000 branded messages a day, many people have developed a strong brand immune system.

Daniel Gilbert, a Harvard psychology professor, has spent the past decade trying to discover what really makes us, as humans, happy. He suggests that neither products—nor brands—are the answer. Gilbert’s research indicates that both matter much less than we think they will; that it’s basic human nature to overestimate how large a difference something will make. This concept of adaptation was developed by psychologists in the late 1950s to refer to how we acclimate to changing circumstances; as humans, we adapt quickly. Gilbert’s team viewed happiness as a signal our brains use to motivate us to do certain things. In the same way that our eyes adapt to light, our brains are designed to find their “happiness set point.” Our brains are not trying to be happy. Rather, they are simply trying to regulate us.

Part of this internal adjustment is reflected in how quickly we adapt to a pleasurable event. As soon as we actually buy something, we immediately start to see it as ordinary. Often, in the days or weeks following a purchase, we lose our initial pleasure: when we buy that new car, it fails to provide the happiness we thought it would.

Brand Brief

2009-12-20T09:51:00.000+02:00

This is the planning document for any brandbuilding project. It sets out the goals, objectives, competitive landscape, current capabilities and performance, timelines, and budget. It ensures that all stakeholders are aligned to anticipated change and that a sound business case is in place to make any significant changes to the brand.

The Cart Before the Horse

2009-12-19T12:38:00.000+02:00

Today, the concept of branding has become a driving force as a business strategy and an industry of its own. Thousands of branding books are available through Amazon.com, and hundreds of marketing and advertising companies sell their “unique” branding services. These branding experts instruct companies to extend their brand identities to every corner of the company. Branding experts in Oregon have suggested that the best way for Oregon to become a better state is for it to become Oregon,® the brand.[4] Likewise, Mongolia (that’s right, the country) has retained a London-based branding agency to develop Mongolia,® the brand.[5] Mongolia is certainly not the first country to develop their brand. Britain has done it; so have Australia, Poland, and Slovenia. A couple of years ago, the U.S. government even got into the action by hiring Charlotte Beers, an ad exec who worked on the Uncle Ben’s brand, to promote “brand America” to the people in the Middle East. It seems that branding may have become too much of a good thing.

Branding reached its real zenith during the dot-com era, when many start-up companies raised money with the specific intent of branding themselves. In fact, according to Forrester Research as much as 90 percent of the money raised from some venture capitalists was spent in this endeavor. While trying to build a Web site into a distinctive brand is an honorable goal, building a business around satisfying the needs of real customers who are willing to pay for a real service or product obviously has more lasting value.

Branding has become an industry perpetuating its own dogma; look at the self-help book market. Some new books, such as The Brand Called You, encourage people to develop a “personal branding philosophy” as a way to gain greater happiness and material success. Author Peter Montoya writes, “Personal branding lets you control how other people perceive you . . . You’re telling them what you stand for—but in a way that’s so organic and unobtrusive that they think they’ve developed that perception all by themselves . . . When done right, it’s irresistible.”[6 ]Okay, but whatever happened to just being yourself—a real person with genuine integrity?

The good concepts behind branding have simply gone too far, and people have become cynical about its mechanics. With branding’s presence obvious in everything from products to personal lifestyles, people are growing tired of the smoke and mirrors. People—your customers— seek the reality of a company that is willing to act like a local merchant, a citizen of the community. What people want is true corporate transparency, in everything from marketing to manufacturing. This direct and honest approach can be, in itself, a unique branding method in today’s environment.

As people grow more skeptical about common branding practices and the presence of branding in the marketplace becomes more pervasive, let’s consider how some branding myths prevail, even as branding’s weaknesses are coming to light.

Endorsed Brand

2009-12-19T11:31:00.001+02:00

A brand that carries the endorsement of a source brand (the parent company), for example Chips Ahoy! Here, Chips Ahoy! promises a specific taste profile and experience, while Nabisco (the source brand) offers an endorsement of overall quality, heritage, and food expertise. The source brand is leveraged to communicate value or expertise that strengthens the promise of the endorsed brand.

The History of Branding

2009-12-18T12:36:00.002+02:00

Branding today is a combination of ideas, products, and the advertising and marketing efforts of companies to put those ideas or products in the public spotlight. This is not too far removed from branding’s roots, although the motivations and methods have changed considerably. Branding was initially used as a way for ranchers to identify their cattle; the distinct symbol of the ranch, burned into a calf’s hide, made it immediately obvious that the calf belonged to someone. There was no variation in the method of identifying cattle; all ranchers used the branding technique—the only difference was in the actual symbol representing each ranch.

This “magic formula” of branding is obviously attractive to companies—an identifiable and well-positioned brand ultimately equals money in the bank. Unfortunately, this equation leads many companies to seek out brands or branding that will directly result in dollar signs. This emphasis on results has dramatically influenced the branding environment, where many brands are in direct and aggressive competition to get people’s attention. Given the speed of information technology today, any unique attempt that companies make to attract this attention is quickly copied, resulting in its becoming just another ubiquitous branding technique. That is not to say there aren’t examples of great branding strategies that allow the space for co-creation—think about the “Got Milk?” campaign. Branding can still be an important tool in building trust and deepening the conversation with any company’s customers; it just needs to evolve along with a rapidly changing world. But this process has become much more difficult.

Originally, brands were used to differentiate products from the generic offerings available. For instance, Quaker Oats stood out distinctly from the bulk oats at the general store. Brands also conveyed a guarantee of quality and a sense of security regarding the source of the product: the company behind them. In these early days, advertising served primarily to increase public awareness that a new brand existed. It wasn’t until the mid-1920s that Claude Hopkins proposed, in his book Scientific Advertising, that advertising should be systematized. He viewed advertising as an extension of the sales pitch with his philosophy: “The more you tell, the more you sell.”[2]

As branding evolved, its basic goal remained the same: to establish a name for any given product that conveyed its legitimacy and stability. As brands in every category became more prevalent, it also became important to educate people about a product’s value and use. To do so, advertising was incorporated as a form of entertainment—treating people as an audience while relating the merits of using a particular product or brand.

In the 1940s and 50s, the famous adman Leo Burnett took the use of entertainment in advertising to new levels; he introduced the use oflovable characters to represent products. During this period, Burnett launched the advertising “careers” of the Jolly Green Giant, Tony the Tiger, Charlie the Tuna, Morris the Cat, and the Marlboro Man—many of whom remain cultural icons to this day. Burnett challenged himself to find attractive brand images for “boring” products, such as peas or tuna. Later, Burnett extended the iconic use of characters to specific places (e.g., the Chevy Tahoe) and even situations (e.g., “Kodak moments”). While Burnett used strong characters and images to draw people to the products he advertised, he felt that the products’ attributes, or what he called the products’ “inherent drama,” played an important part in successful advertising.

In the late 1950s, led in particular by another legendary adman, David Ogilvy, branding began to supersede the products themselves. Three major societal trends acted as the foundation for the success of Ogilvy’s message. First, the United States experienced the greatest gross national product (GNP) per capita increases in the country’s history, which created significant disposable income gains for the average American. Second, the development of television created a new medium for persuasive communication. Third, with more disposable income, Americans abandoned the cities for the suburbs. As suburbs spread out to surround cities, the automobile became a much more important tool for people’s everyday interactions. Instead of being confined to one neighborhood defined by a reasonable walking distance, within which all of the needs of daily life could be satisfied, people began to live in one city and work in another. One consequence was the redefinition of neighborhoods, where neighbors were strangers. Instead of relying on a specific location to define what “the good life” meant, brands—through the new medium of television—helped to serve as indicators of success. Many companies celebrated the newfound economic freedom of their customers by helping them find brands—their own, of course—that could project this image of success.

In his quest, Ogilvy championed the idea of advertising as entertainment. He also developed several techniques to specifically promote the brand image—not the product itself—in television advertising. His ideas, such as “open with fire” (starting the ad with excitement) and “supers” (superimposing text over the ad to reinforce the brand message) are still cornerstones of today’s advertising. In his book Ogilvy on Advertising, Ogilvy said: “Have they [consumers] tried all three [most popular whiskeys on the market] and compared the taste? Don’t make me laugh. The reality is that these three brands have different images, which appeal to different people. It isn’t the whiskey they choose; it’s the image. The brand image is 90 percent of what the distiller has to sell.”[3]

During the same era, Raymond Rubicam began to hire pollsters, such as Dr. George Gallup from Northwestern University, to conduct market research and try to understand what could be learned from people. Using polls, surveys, and focus groups, Rubicam set out to understand and differentiate various segments of users of a product. Hence, demographic research was born, allowing marketers to view people as statistical data, rather than emotional, largely unpredictable beings.

Following these early forays into market research, companies were tempted to rely on intelligence and analysis that reduced their customers to specific and manageable numbers, instead of a vague, often elusive group of people. Statistical analysis offered a means of “classifying, organizing, and labeling” people, which appealed to companies looking for quick, black-and-white information. Marketers would then reconstruct these “consumers” in the convenience of their office, look at their historical buying habits, and attempt to predict what they might want to buy.

But can you really scientifically deconstruct a person, reducing them to a few data points, and then reconstruct them—completely out of context? This thought process influenced product differences that were only quantitative and mechanical. This type of homogenous technique limited the interpretation of the customer’s voice, erased idiosyncrasies from the marketers’ observations of the culture, and ultimately marginalized risk taking by companies.

Because they were considered components of a legitimate science and were supported by academic research and education, market research and branding became significant strategic tools used pervasively within companies. As branding became more scientific and the communication of superior practices became widespread—through peer-to-peer interactions, the movement of managers between firms, and the use of consultants—a common branding philosophy was developed.

The concept of brands acting as cultural creators—doing more than just participating in or representing the culture but actually helping to create it—began to emerge in the 1960s. Bill Bernbach from DDB proposed the idea that products should be culturally authentic. To achieve this goal, brands had first to become disengaged from a company’s economic agenda. DDB’s solution was to give products an ironic brand persona; their campaign for Volkswagen’s Beetle is a great example. Instead of speaking to people in the paternal, condescending voice that much of the era’s advertising used, DDB created the voice of an honest friend by poking fun at the Beetle in classic ads such as “Think Small.”

Inspired by DDB’s example, other agencies, such as Chiat Day and Wieden-Kennedy, further developed the concept of the ironic brand persona for such clients as Nike, Eveready Batteries, and Levi’s.

In the 1980s, in an attempt to increase the authenticity of the brands they worked with, agencies also started to explore the connection with what they termed “cultural epicenters.” These epicenters of the marketplace included arts and fashion communities, ethnic subcultures, and creative and sports communities. The philosophy became one of identifying and developing a deep relationship with an epicenter to better position a brand as a cultural producer. A good example is Mountain Dew’s early sponsorship of the X-Games produced by ESPN in the early 1990s. This relationship gave Mountain Dew credibility with the rapidly growing youth market and gave the brand an authenticity that still defines the product today.

To understand these epicenters, agencies established specialized entities that offered authenticity specific to the cultures with which they sought to connect. Such an example is DDB’s collaboration with filmmaker Spike Lee that formed Spike/DDB. Agencies worked hard to become a part of the conversation in these epicenters. Done successfully, becoming a part of these communities gave some brands the ability to become tastemakers.

The power of the streets and the credibility gained from capturing it have changed the way brands are communicated. Brands now try to emulate the personalities of those found in certain cultural epicenters. As brands strive for this authenticity, a new “real” style of advertising has developed, as illustrated in candid spots in the ad campaigns of companies such as McDonald’s and John Hancock. Similarly, in a recent campaign for Red Code, Mountain Dew’s new subbrand, basketball stars Tracy McGrady and Chris Webber join an actual pickup game on the streets of New York City. The ad features the reaction and excitement of the amateur players and spectators as they realize they are playing with McGrady and Webber. The tagline, “Code Red. As real as the streets,” even tips its hat to the effort to gain—and the value of—street credibility.

In their efforts to be seen as credible and authentic, companies engage in grassroots, viral, tribal, and buzz techniques. These methods range from the more traditional (grass roots) to the sensational (buzz), and are seen as slightly desperate attempts to gain people’s attention. As an example, a company employing grassroots techniques might “seed” its products to tastemakers in cultural epicenters, hoping to gain the favor of its influential members. This method makes a lot of sense for culturally authentic brands, like Burton snowboards, which have a direct connection with their customers “on the street.” But when larger, non-endemic brands begin to flood epicenters, community members tend to recognize the companies’ motivations and mock their efforts. Instead of the technique working in their favor and suggesting authenticity, these nonendemic brands gain the reputation of cultural gadflies as they try to co-opt authenticity without paying their dues.

The speed of today’s technology has made any successful branding technique so quickly emulated, that its novelty and success are marginalized through the flood of similar ideas. Consider the realm of reality television. In its first year, the popular show The Bachelor pulled in over 40 million viewers for its finale. One year later, the show averaged less than 6 million viewers for the first three episodes. Reality TV was a brilliant idea; the first few shows successfully captured the imaginations (and viewing habits) of a wide variety of people. But in one short year, the airways became clogged with variations on the same reality themes, with few points of differentiation. It’s great to be one of the first to capture a market, but it’s risky to rely on staying at the cutting edge as a successful strategy. Too often, the cutting edge becomes the bleeding edge.

The Illusion of Control

2009-12-18T12:03:00.003+02:00

Businesses have long lived under the pretense that the world in which we live is controllable. Even the language of business—plan, budget, target—contributes to this illusion. How did this come to be? Encouraged by the promises of the scientific revolution, businesses operated under the belief that, with the right systems and controls, anything could be accomplished. After all, wasn’t this the same age that put a man on the moon?

In reality, companies are a lot like frogs. Do you know the best way to cook a frog? The frog gets cooked when the water it sits in starts out cool and the temperature changes only one degree at a time. The frog does not have the subtle sensory skills to see and feel its environment change. This same thing often happens to established companies. The external environment may change only slowly—but if companies fail to notice that change, they’re dead in the water.

Entrepreneurial companies have an easier time adapting, because they have more mobility and can react to changes more quickly. These companies act more like a live frog put into boiling water. They can immediately feel the radical difference in the environment and jump out of harm’s way.

Established companies that have been historically successful have a very difficult time jumping at all, even out of boiling water. Even when they do recognize a temperature difference, they are rendered immobile by their stubborn dependence on existing systems. Instead, they choose to remain under the delusion that they can control the temperature of the water.

The events of the past couple of years have challenged this notion of control in significant ways. We’ve become perfectly accustomed to media stories about some of the most successful companies in the world fighting for their very survival. In half a decade, the environment in which these businesses were able to prosper for the past half-century or more has changed beyond recognition.

A few external forces will continue to radically affect the environment in which we live. Between the effects of global cultural shifts, radical changes in the macroeconomic environment, disruptive technologies, the rising power of retailers, the culture of fear, and the role of chance, the business environment will never be the same.

Essence

2009-12-18T11:26:00.000+02:00

Design Elements

2009-12-18T10:00:00.000+02:00

The individual components comprising the overall visual expression of the brand. These can include images, type, color, shape, texture, and so on. These elements work in cooperation with each other to communicate an overall brand personality and image.