Jon M. Huntsman School of Business

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Tuesday, February 14, 2012

The Importance of Brand Strategy

Eric D. Schulz
Procter & Gamble invented the business strategy of “Brand Management”.  Brand management focused attention on product specialization and differentiation instead of business function. By distinguishing the qualities of each brand from all other P&G brands, each would avoid competing with one another by targeting different consumer markets with a different set of benefits.   This was especially important in product categories that the company manufactured several competing brands, like laundry detergent.

Over the years, P&G and the companies that embraced the brand management concept became extremely successful. In the early 1940s, Ted Bates & Company decided to conduct an extensive research study to find out why and reverse engineer the success of these brands. The company researched “successful advertising campaigns,” to see whether they could identify a pattern. What they found was that the most successful brands—those that both lead their category and produced the highest ROI—used what they termed the Unique Selling Proposition or “USP.” 

The concept of “USP” has three guiding principles:
  • The proposition must be clearly stated to the consumer: “Buy this product, and you will get this specific benefit.”
  • The proposition itself must be unique. It must express a specific benefit that competitors do not, will not, or cannot offer.
  • The proposition must be strong enough to pull new customers to the product.
Brand positioning
In the late 60’s and early 70’s, the concept of “brand” began to take on new meaning, including the larger concept of image and values. Al Ries and Jack Trout captured this evolution in their Harvard Business Review article and later authored a book by the same title: POSITIONING: The battle for your mind. Their concept stated that it was not product superiority that mattered, but rather consumers’ perception of a given brand that paved the road to success. This concept was dubbed “brand positioning” and to this day it remains the standard for developing successful brands.

Effective businesses view their brands as tools that allow their messaging to cut through the noise of an overcrowded marketplace.  Consumers use brands as a method for navigating their way through the marketplace. Each brand distinguishes itself, allowing consumers to identify their preferred products and services from those they see as being less desirable. When brand meaning and relevance are clear, the brand will hold a stronger position in consumer’s minds and the more likely they are to choose it.

Branding is managing customer expectations
Branding is not about getting people to choose your offering over the competitions. It is the act of managing consumers’ expectations so as to condition your target audience to see your offering as the only answer to a specific need.

By defining a realistic and manageable promise of what the brand owner will deliver and what consumers can expect of the brand, branding has become the backbone of modern business strategy. “Brand” drives consumer purchase decisions and affects nearly every functional area of a business. With product offerings converging into sameness, companies are viewing “brand” as the only avenue of differentiation.

Branding defines market position (brand strategy) and, through a series of signals, articulates that position as promise (brand positioning). When strategy and positioning work as one, brands obtain sustainable and favorable market positions. This has shifted the task of brand building and management to the primary business strategy.

Brands are built on trust
While the concept of brand is ever-evolving, its primary purpose is to balance the objectives of an organization with people’s needs and expectations. It does this by building a trustworthy relationship with consumers. In other words, what is promised by the brand owner and what is expected by the brand’s audience become one and the same—It’s that simple and that complex.
  • brands are about feelings, not facts.
  • how your customers feel about your brand isn’t a casual question.  It is the crucial question.
Eric D. Schulz is the co-director of strategic marketing and brand management at the Jon M Huntsman School of Business at Utah State University. Prior to joining the University, he spent five years as Vice-President of Marketing for the Utah Jazz (NBA); he previously was VP of Marketing with the XFL Football League, and served as a general manager in minor league baseball. He can be reached at eric.schulz@usu.edu.

8 comments:

  1. Thais is really Perfect work you have done, this site is really cool with fantastic info.

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  3. This information is related to branding strategy and very important for newcomers in business.It's always useful in business.

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  4. “It is the act of managing consumers’ expectations so as to condition your target audience to see your offering as the only answer to a specific need.” - Precisely! A corporation can benchmark its competitors whichever way it wants, but if its own products and services do not meet the standards of the consumers, it won't profit and won't get any loyalty from them. A brand stands out because it delivers what is expected from it – as how the consumers would benefit from its products and services. This is what branding is all about. Expectations of the buyers first before the seller's (profit).

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