Respect the brand ‘contract’ - Strategic Brand Management

Brands become credible only through the persistence and repetition of their value proposition. BMW has had the same promise since 1959. Through time they become a quasi contract, unwritten but most effective. This contract binds both parties. The brand must keep its identity, but permanently increase its relevance. It must be loyal to itself, to its mission and to its clients.

Each brand is free to choose its values and positioning, but once chosen and advertised, they become the benchmark for customer satisfaction. It is well known that the prime determinant of customer satisfaction is the gap between customer’s experiences and their expectations.

The brand’s positioning sets up these expectations. As a result, customers are loyal to such abrand. This mutual commitment explains why brands, whose products have temporarily declined in popularity, do not necessarily disappear. A brand is judged over the long term: a deficiency can always occur. Brand trust gives products a chance to recover. If not,Jaguar would have disappeared long ago: no other brand could have withstood the detrimental effect of the decreasing quality of its cars during the 1970s. That is a good illustration of one of the benefits a brand brings to a company.

Brand Contract

The brand contract is economic, not legal. Brands differ in this way from other signs of quality such as quality seals and certification. Quality seals officially and legally testify that a given product meets a set of specific characteristics,previously defined (in conjunction with public authorities, producers/manufacturers and consumers) so as to guarantee higher level of quality and distinguishing it from similar products. A quality seal is collective brand controlled by a certification agency which certifies a given product only if it complies with certain specifications. Such certification is thus never definitive and can be withdrawn (like ISO).

Brands do not legally testify that a product meets a set of characteristics. However, through consistent and repeated experience of these characteristics, a brand becomes synonymous with the latter. A contract implies constraints. The brand contract assumes first of all that the various functions in the organization all converge: R&D, production, methods, logistics,marketing, finance. The same is true of service brands: as the R&D and production aspects are obviously irrelevant in this case, the responsibility for ensuring the brand’s continuity and cohesion pass to the management and staff, who play an essential role inclientele relationships.

The brand contract requires internal as well as external marketing. Unlike quality seals,brands set their own ever-increasing standards. Therefore, they must not only meet the latter but also continuously try to improve all their products, even the most basic ones, especially if they represent most of their sales and hence act as the major vehicle of brand image;in so doing, they will be able to satisfy the expectations of clients who will demand that the products keep pace with technological change.

They must also communicate and make themselves known to the outside world in order to become the prototype of segment, a value or a benefit. This is a lonely task for brands, yet they must do it to get the uniqueness and lack of substitutability they need. The brand will have to support its internal and external costs all on its own. These are generated by the brand requirements,which are to:

  • Closely forecast the needs and expectations of potential buyers. This is the purpose of market research: both to optimize existing products and to discover needs and expectations that have yet to be fulfilled.
  • React to technical and technological progress as soon as it can to create competitive edge both in terms of cost and performance.
  • Provide both product (or service) volume and quality at the same time, since those are the only means of ensuring repeat purchases.
  • Control supply quantity and quality.
  • Deliver products or services to intermediaries(distributors), both consistently overtime and in accordance with their requirements in terms of delivery, packaging and overall conditions.
  • Give meaning to the brand and communicate its meaning to the target market,thereby using the brand as both a signal and reference for the product’s (or service’s)identity and exclusivity. That is what advertising budgets are for.
  • Increase the experiential rewards of consumption or interaction.
  • Remain ethical and ecology-conscious.

Strong brands thus bring about both internationalization and external federalisation. They create their company’s panache and impetus. That is why some companies switch their own name for that of one of their starbrands: BSN thus became Danone, CGEbecame Alcatel. In this respect, the impact of strong brands extends far beyond most corporate strategies.

These only last while they are in the making, after which they either vanish or wind up as pompous phrases(‘a passion for excellence’) posted in hallways. In any case, the corporate brand is the organization’s external voice and, as such, it remains both demanding and determined to constantly outdo itself, to aim ever higher.

Becoming aware that the brand is a contract also means taking up many other responsibilities that are all too often ignored. In the fashion market, even if creators wish to change after a while, they cannot entirely forget about their brand contract, which helped them to get known initially, then recognized and eventually praised.

In theory, both the brand’s slogan and signature are meant to embody the brand contract. A good slogan is therefore often rejected by managing directors because it means too much commitment for the company and may backfire if the products/ services do not match the expectations the brand has created so far.

In too many cases brands are seen as mere names: this is very evident in some innovations committee meetings, where new products are reallocated to different brands of the portfolio many times in the same meeting. One brand name or another is perceived as making no difference. Taking the brand seriously, as it is(that is, as a contract) is much more demanding. It also provides higher returns.

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