Pick out three brands from a particular industry. Be sure to list them. How are they positioned? Which is the best in your view? Why is that particular brand the best in your view? Assess each (of the three) brand's awareness level and consumer loyalty level. What is each brand's personality? Looking into the future, what specific relevance issues will each brand face? Elaborate.
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Notes from Book for reference:
BRAND AWARENESS
Brand awareness is often taken for granted, but it can be a key strategic asset. In some industries that have product parity, awareness provides a sustainable competitive difference. It serves to differentiate the brands along a recall/familiarity dimension.
Brand awareness can provide a host of competitive advantages. First, people like the familiar and awareness provides the brand with a sense of familiarity. For low-involvement products, such as soap or chewing gum, familiarity can drive the buying decision. Taste tests of such products as colas and peanut butter show that a recognized name can affect evaluations even if the brand has never been purchased or used.
Second, brand awareness can be a signal of presence, commitment, and substance, attributes that can be very important even to industrial buyers of big-ticket items and consumer buyers of durables. The logic is that if a name is recognized, there must be a reason. The “Intel Inside” program was remarkably successful at creating a perception of advanced technology and earned a significant price premium for Intel for well over a decade even though it did not communicate anything about the company or the product. Pure awareness power was at work.
Third, the salience of a brand will determine if it is recalled at a key time in the purchasing process. The initial step in selecting an advertising agency, a car to test drive, or a computer system is to decide on which brands to consider. The extreme case is name dominance, where the brand is the only one recalled when a product class is cued. Consider Kleenex tissue, Clorox bleach, Band-Aid adhesive bandages, Jell-O gelatin, Crayola crayons, Facebook, and A-1 steak sauce. In each case, how many other brands can you name? How would you like to compete against these dominant brands?
Brand awareness is an asset that can be extremely durable and thus sustainable. It can be very difficult to dislodge a brand that has achieved a dominant awareness level. Customers’ awareness of the Datsun brand, for example, was as strong as that of its successor, Nissan, four years after the firm changed its name.1 An awareness study on blenders more than two decades after GE stopped making the product found that the GE brand was still the second-most preferred brand.2 Another study of familiarity asked homemakers to name as many brands of any type as they could; they averaged 28 names each. The ages of the brands named were surprising: more than 85 percent were over 25 years old, and 36 percent were more than 75 years old.3
There is a great deal of difference between recognition (have you ever heard of Brand X) and unaided recall (what brands of SUVs can you name). Sometimes recognition for a mature brand is not even desirable when unaided recall is low. In fact, brands with high recognition and low recall are termed graveyard brands. Without recall, they are not in the game; their high recognition means they are considered yesterday's news, making it difficult for them to gain visibility and energy.
Because consumers are bombarded every day by more and more marketing messages, the challenge of building awareness and presence—and doing so economically and efficiently—is formidable, especially considering the fragmentation and clutter that exist in mass media. One route to visibility is to extend the brand over product categories. For that reason, firms such as 3M, Sony, Toshiba, and GE have an advantage because wide product scope provides brand exposure. Another route is to go beyond the normal media channels by using event promotions, publicity, sampling, Internet community, and other attention-grabbing approaches. For example, consider the impact of Samsung’s Olympic sponsorship, the Niketown showcase stores, Swatch hanging a 165-yard-long watch from skyscrapers in Frankfurt and Tokyo, and the Pampers Village, the go-to site for resources and conversation about infant care. All of these firms were able to increase their awareness levels much more effectively than if they had relied only on mass media advertising.
BRAND LOYALTY
An enduring asset for some businesses is the loyalty of the installed customer base. Competitors may duplicate or surpass a product or service, but they still face the task of persuading customers to switch brands. Brand loyalty, or resistance to switching, can be based on simple habit (there is no motivation to change from the familiar gas station or supermarket), preference (people genuinely like the brand of cake mix or its symbol, perhaps based on use experience over a long time period), or switching costs. Switching costs would be a consideration for a software user, for example, when a substantial investment has already been made in training employees to learn a particular software system.
An existing base of loyal customers provides enormous sustainable competitive advantages. First, it reduces the marketing costs of doing business because less marketing is required to retain these loyal customers. Keeping existing customers happy and reducing their motivation to change are usually considerably less expensive than trying to reach new customers and persuading them to try another brand. Of course, the higher the loyalty, the easier it is to keep customers happy.
Second, the loyalty of existing customers represents a substantial entry barrier to competitors. Significant resources are required when entering a market in which loyal customers must be enticed away from an established brand. The profit potential for the entrant is thus reduced. For the barrier to be effective, however, potential competitors must know about it; they cannot be allowed to entertain the delusion that customers are vulnerable. Therefore, signals of strong customer loyalty, such as customer interest groups, can be useful.
Third, a relatively large, satisfied customer base provides an image of a brand as an accepted and successful product. A set of loyal customers also provides reassurance to others. Customers find comfort in the fact that others have selected the brand.
Finally, brand loyalty provides the time to respond to competitive moves—it gives a firm some breathing room. If a competitor develops a superior product, a loyal following will allow the firm the time needed to respond by matching or neutralizing the offering. With a high level of brand loyalty, a firm can allow itself the luxury of pursuing a less-risky follower strategy.
The management of brand loyalty is a key to achieving strategic success. Firms that manage brand loyalty well are likely to:
· Have a customer culture, whereby people throughout the organization are empowered and motivated to keep the customer happy.
· Manage customer touchpoints to ensure that the brand does not falter in key contexts.
· Have a relationship that goes beyond functional benefits to emotional, self-expressive, and social benefits.
· Make customers feel that they are part of the organization, perhaps through customer clubs.
· Have continuing communication with customers, using direct mail, the Internet, toll-free numbers, and a solid customer backup organization.
· Measure the loyalty of existing customers. Measurement should include not only sensitive indicators of satisfaction, but also measures of the relationship between the customer and the brand. Is the brand respected? Liked? Trusted? The ultimate measure is, will the customer recommend the brand to others?
· Conduct exit interviews with those who leave the brand to locate points of vulnerability.
· Measure the lifetime value of a customer so expected future purchases are valued.
Brand Personality
As with human beings, a business with a strong personality tends to be more memorable and better liked than one that is bland, nothing more than the sum of its attributes. And like people, brands can have a variety of personalities that can become key associations. For example, a brand can be professional and competent (CNN and McKinsey), upscale and sophisticated (Jaguar and Tiffany’s), trustworthy and genuine (Hallmark and John Deere), fun and interesting (Snapchat and Lego), exciting and daring (Red Bull and HBO), or active and tough (REI and Under Armour). Certainly, Virgin is a brand whose strategic position includes a unique personality.
Harley-Davidson has a strong personality reflecting a macho, America-loving, freedom-seeking person who is willing to break out of confining social norms. The experience of riding a Harley (or even the association that comes from wearing Harley-Davidson clothing) helps some people express a part of their personality, which results in intense loyalty. More than 250,000 of these people belong to one of the 800 chapters of the Harley Owners Group (HOG). Twice a year, believers from all over the country gather for a bonding experience. Harley is much more than a motorcycle; it is an experience, an attitude, a lifestyle, and a vehicle to express “who I am.”
Joie de Vivre is a San Francisco firm whose boutique hotels are each inspired by a theme that reflects a personality. The “Rolling Stone” Phoenix hotel attracts rock-and-roll and other entertainment personalities with its irreverent sense of cool and funky, adventurous decor. The “New Yorker” Rex hotel is clever and sophisticated, with a literary sensibility. The “1920s luxury liner” Commodore Hotel, with its Titanic Café, looks and feels like a party straight out of The Great Gatsby. The “movie palace” Hotel Bijou has a miniature movie theater in the lobby, accompanied by dramatic Hollywood portraits.