Updated: 6 days ago
As I always say, a brand is the most valuable intangible asset of a company and not only influences a product/service price, but also generates intense consumer loyalty.
In this article, you will learn how to leverage strategic brand management to acquire high-end consumers, integrate it in your #MarketingPlan and maximize brand equity.
Table of contents
THE IMPORTANCE OF BRAND IDENTITY
AND BRAND EQUITY
After deciding the most profitable brand positioning strategy, a business should consider work on its image and the mental structures that enable consumers to organize their knowledge in a way that can influence their purchasing decisions. In fact, a brand determines consumer’s preferences and loyalty.
Defining the scope of branding
A brand is “the promise”: what it must be and do for customers. When consumers willingly choose the same product/service multiple times, a business can predict the demand and secure its market with higher barriers to entry: it’s always difficult for the competition entering an industry controlled by already established brands. Marketers should create meaningful associations in the minds of their consumers which differentiate their product/service from another. Virtually, everything can be branded: a physical product, a service, a store, a person, a place, an organization or even an idea!
The American Marketing Association (AMA) defines a brand as:
A brand is a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers.
Differences between brand identity and brand equity
In brief, I can state that a brand is determined by the interaction of two fundamental elements: brand identity and brand equity.
While brand identity represents the perception of a brand in consumers’ minds and generates sales (or it should be), brand equity is the monetary value of the brand itself. In other words, brand equity represents the commercial value of consumers’ perception of the brand rather than the actual value of the product or service sold.
For this reason, brand equity is strictly related to customers and can be positive or negative. A positive customer-based brand equity is when the audience responses favorably to a product/service and its marketing. In an opposite scenario, you have a negative customer-based brand equity.
There are three pillars which define customer-based brand equity:
Brand equity is built by differences in consumers’ response. If they equally react to a brand, it is a commodity and competition will be based on price;
These differences are made out of consumers’ brand knowledge: their opinion, experiences, emotions and beliefs related with the brand. For example, when you think of FedEx it pops the word "speed", Mailchimp "fun", Nike "motivation", Amazon "convenience" and so on;
Brand equity permeates all aspects of marketing and the greater its power is, the more revenues it leads. Being more practical, the American storyteller, author, designer and entrepreneur, Jonah Sachs, has condensed this point in a simple concept:
Your brand is a story unfolding across all customer touch points.
How to measure brand equity
Measuring the value of a brand is not an exact science and there are many models and methods to do it. One of them was explored by Marketing and management of Kotler and Keller and is called BrandAsset Valuator (BAV). This model, developed by the advertising agency Young and Rubicam (Y&R), is research-based and compares the brand equity of thousands companies with as many categories.
According to the BrandAsset Valuator, brand equity lays on four main factors:
Energized differentiation considers how different a company is perceived by consumers, its capability to move forward in the market and leadership;
Relevance tracks the degree of suitability and brand’s attractiveness;
Esteem measures how people consider and respect the brand. In other words, its quality and loyalty level;
Knowledge keeps track of consumers’ awareness and familiarity with a brand.
Energized differentiation and relevance are a future projection of a company’s growth and value. Together, they represent a brand strength. Esteem and knowledge indicate the past performance and the present value. Together, they represent a brand stature.
Usually, strong new brands have a higher level of energized differentiation, industry leaders are great on all four dimensions, instead declining brands have a higher knowledge, proof of past performance.
HOW TO BUILD A BRAND WITH
KAPFERER’S BRAND IDENTITY PRISM
How can you build a strong brand? How can you communicate its elements to consumers in a way that you become memorable and recognizable among the competition?
When it comes to building a brand, I suggest to my clients two types of exercises: Kapferer's Brand Identity Prism or Brand Archetypes.
Let’s start with Kapferer’s Brand Identity Prism.
How to interpret the prism
First mentioned in 1986 and later furthered in Strategic brand management: new approaches to creating and evaluating brand equity (1992), the prism of the Ph.D. Jean-Noël Kapferer represents a tool to define brand identity and align marketing communication and message accordingly.
In his work, the professor stated:
Strong brands are capable of weaving all aspects [of the prism] into an effective whole in order to create a concise, clear and appealing brand identity.
As you can see from this image, this six sided prism represents the key factors of brand identity: physical facet (or physique), personality, culture (or values), relationship, reflected consumer (or reflection) and self-image.
Kapferer’s Brand Identity Prism visualizes a brand like a person, because the only way for businesses to catch consumers’ minds is to communicate with them as peers.
Like a person, a brand should be able to “receive and send messages” and this is the objective of the strips at the top and bottom of the scheme.
The constructed source (or picture of sender), physical facet and personality, includes the communicative traits of a brand. The constructed receiver (or picture of receiver), reflected consumer and self-image, describes a brand in terms of the stereotype user: what digital marketers nowadays call buyer persona.
The second dimension of the prism is represented by externalization versus internalization. The first represents social aspects (physical facet, relationship and reflected consumer) that a brand should be capable of externalize. The second defines the internal characteristics of the brand (personality, culture and self-image).
Download my Kapferer’s Brand Identity Prism worksheet and assess your brand elements like a boss!
What does the brand actually look like? How can it be recognized? The physical facet includes all the physical characteristics that consumers recall when it is mentioned. They can be: logos, packaging, geometrical lines, colors, shapes, smells, patterns…
The brand becomes a character with its unique traits and characteristics. It determines the perception of communicating with an actual person instead of an abstract entity. For example, you can make a brand’s personality by using a specific tone of voice, writing style, colors or design.
What are the beliefs on which a brand is founded? A system of values guides the behavior of employees and partners across all customer touch points and results in a coordinated internal and external communication.
A brand must decide the degree of “attention” or commitment to dedicate to its customers. How do you treat them? How do you help them in terms of customer service? Is the brand close to its customers or wants to maintain a certain distance?
This element is more important for services than products, because a service is a relationship by definition.
It describes the characteristics of the target audience, or more precisely, the typical user. As I already mentioned before, HubSpot would call it buyer persona.
Nevertheless, Kapferer suggests a slightly different interpretation. He says that the reflected consumer shouldn’t represent the actual target group of consumers, but it should portray a stereotype that makes the target audience feel attracted.
It is how customers see themselves while using that brand. How do they feel when they are trying out the product or service? Where are they and in which occasion are they using the brand?
For example, studies have shown how Lacoste customers see themselves as members of a sports club even if they don't actually play a sport at all!