4 May 2004
Branding(HKTDC Enterprise, Vol 05,2004)
Electrical & Home Appliances
Sporting/ Camping & Fitness Products
Branding For Business
Leading brands use logos, marketing slogans, jingles, packaging and an almost indefinable emotional relationship to help consumers remember their products
Brands have never been more important in today's crowded marketplace - especially for small and medium-sized enterprises (SMEs). Faced with a confusing array of products, customers are opting for names they know and trust.
But what is a brand and why do consumers relate so strongly to them? A brand is commonly defined as a proprietary visual, emotional, rational, and cultural image associated with a particular product or company. When most people think of a brand they visualise some of the world's leading and most valuable names, such as Coca-Cola and Nike.
But it's not just their distinctive products that stay in consumers' minds; it's their logos, marketing slogans, jingles, packaging and that almost indefinable emotional relationship that consumers have to the brand - those feel-good, positive associations created when using or remembering the product.
These brand associations are the attributes that leap to customers' minds when they use or even see the brand name. It is these qualities that companies must fully understand if they are to ensure the continued performance of their branded products.
Today, brands are no longer the sole property of larger companies. Indeed, they have become an integral part of business for numerous manufacturers and retailers, both big and small.
Many manufacturers have come to realise that having a retail brand brings a much higher gross profit margin than delivering pure OEM and ODM services - more than 30% in some cases.
Brands offer a solid market positioning to make a product stand out from the crowd - from the millions of other items available that offer a similar function. Brands provide distinctiveness and visibility, providing that vital competitive advantage.
Creating and maintaining a brand's distinct characteristics is an ongoing process and the people who can best define these qualities are your customers.
By asking customers what they look for, you can determine the key assets of your brand - those that make them choose your product over the myriad of others on offer.
These core attributes should comprise the essence of your key messages in all marketing, advertising, packaging, publicity, and external and internal communications, helping reinforce these characteristics and further consolidate your brand's image.
But creating a successful brand is never a one-stop process. Strategic branding requires continual re-evaluation of your brand's characteristics and attributes and how far these are meeting your customers' brand demands.
The following case study illustrates how a strategic branding consultancy analyses a local company's strengths and weaknesses and its target customer demands to arrive at a differentiating positioning to put the company and its brand back on track.
The customer knows best
Managing director Edmond Chan was worried: his once-thriving retail clothing business had failed to meet sales targets for the third quarter running and poor performance was putting additional strain on the company's cash flow.
Chan is a manufacturer and retailer of high-end ladies' fashion apparel. With over 20 years' experience in the OEM/ODM and export garment business, he leveraged his expertise to develop a retail garment brand 12 years ago that targets 25-35-year-old women.
Business went well until two years ago, when Chan began noticing a drop in sales and skyrocketing stock inventory. While he continued his sales and advertising drive and consulted his sales and marketing staff, he was unable to determine the cause of the slump or how to rectify his company's predicament.
Over the next few months business deteriorated further, despite the positive overall performance of the industry, his markets, and a number of his competitors.
Chan called Janet Cheang, managing director of brand consultancy CultureTainment Services Ltd, to help analyse his business and performance. She suggested it was high time to review the relevance of his brand's positioning and its product offerings to its target customers, and also suggested Chan consider exploring new opportunities in potential market segments where there was evidence of growing customer demand.
Cheang invited her partner, Selina Cheng, director and chief consulting officer of research specialists RSJ Consulting Services, to devise a research programme.
Cheng recommended a two-stage market research programme to collect input directly from customers to help establish better target directions and mitigate the risk of steering the brand towards uncharted waters.
She suggested Chan's company obtain the following key information to help set it back on track:
What are the brand's attributes and equity in the minds of its target customers?
What are the current attitudes, perceptions, motivations and purchasing criteria of the brand's target customers?
- What gaps, if any, exist in the minds
of the target customers on product benefits offered by the brand and those they
- Are there any unmet needs that the brand, or a sub-brand, can fulfil? And are customers receptive to new product concepts?
Cheng recommended strategic customer research, first commissioning a number of focus group interviews with customers and secondly a larger and wider customer sample using a quantitative survey approach. Using her industrial psychology training to conduct the research, she also assisted Cheang in analysing the results.
1. Focus group interviews
Four groups of eight target customers participated in a two-hour discussion session facilitated by Cheng. Two of the groups comprised existing customers of the brand while the other two were customers of competitive brands. The discussion followed a pre-set guideline, with cue cards used to help stimulate responses.
2. Quantitative survey
A 400-person quantitative survey later validated the hypotheses generated from the discussions and ensured that the information collected from the focus group discussions was representative of the market.
The findings from this research highlighted important strategic directions the company should take for the successful future of the brand, such as:
The brand's existing customers had matured with the brand. Now in their mid 30s-40s, the apparel fittings no longer met the needs of their more mature body shapes, so they were purchasing much less although they still liked the styles
- Today's 25-35 year olds knew the brand well and were impressed by its quality, but were not attracted to styles or a brand image they perceived as pass.
Working with the brand consultants, Chan translated these research findings into actionable strategies, immediately fine tuning the collection fittings to meet the needs of his existing clientele and adjusting the brand's positioning and key message angles to reflect their aspirational needs.
Chan made sure that his marketing campaign highlighted the core message of the 'Perfect Fit' in addition to the brand's existing focus on style and quality.
Just three months after the launch of the brand's new collection, supported by relevant marketing efforts, Chan's brand was back on a growth momentum.
Meanwhile, he leveraged his retail experience and expertise in design and manufacturing to capture new business opportunities by working with his management team on a feasibility study for a separate label, targeting 25-35 year olds, that he plans to launch within 18 months if the study confirms potential demand.
Chan's example is a classic case of a company successfully utilising strategic market research to move out of its slump and into profitable and potentially broader business.
Objective evaluation of customer feedback helped Chan identify the company's problems and provided important pointers to put in place more appropriate strategies for moving his business forward.
But Chan should not stop there: Cheng recommends companies stay on target by seeking simple customer tracking studies every three months with a full brand check-up each year before the start of the annual planning cycle.
Focus group research
can be conducted for around HK$25,000 per group, depending on size, and branding
consulting fees range from around HK$8,000 per day, with package arrangements
available on a project basis.