An Eight-Category Typology

Brand as a Sign of Ownership – An early theme, given much prominence in marketing circles, was the distinction between brands on the basis of whether the brand was a manufacturers’ brand or a distributors’ brand (‘own label’, ‘private label’). Branding was seen as being a basis of showing who instigated the marketing for that particular offering and whether the primary activity of the instigator was production (manufacturers’ brand) or distribution (distributors’ brand). However, this drew a rather artificial distinction, since nowadays consumers place a far greater reliance on distributor brands – particularly when brands such as Benetton and Marks & Spencer are perceived as superior brands in their own right. In fact, some would argue that with the much greater marketing role played by major retailers and their concentrated buying power, the concept of USP (Unique selling proposition) should now be interpreted as ‘Universal Supermarket Patronage’ I With escalating advertising cost, there is a move to the corporation as a brand, rather than stressing branding at the individual product lines level. This helps form a clear identity and has given impetus to the corporate design industry. There is a danger, however, that consumers do not pick up the values that the corporate brand stands for and how these run through all the product line brands. A further danger is that as a corporation widens its brand portfolio; its core values become diluted.

Brand as a Differentiating Device – The historical review earlier in this lesson indicated that, at the turn of the century, a much stronger emphasis was placed on brands purely as differentiating device between similar products. This perspective is still frequently seen today in many different markets. Yet with more sophisticated marketing and more experienced consumers, brands succeed not only by conveying differentiation, but also by being associated with added values. For example, the brand Persil not only differentiates it from other washing-power lines, but is a successful brand since it has been backed by a coherent use of resources that deliver the added value of a higher-quality offering with a well – defined image. By contrast the one-man operation, “Tom’s Taxi Service’, is based upon branding as a differentiating device, with little thought to communicating added values.

Small firms seem to be particularly prone to the belief that putting a name on their product or service is all that is needed to set them apart from competitors. They erroneously believe that branding is about having a prominent name, more often than not based around the owner’s name. Yet there is ample evidence that brands fail if organizations concentrate primarily on developing a symbol or a name as a differentiating device. Brands will succeed only if they offer unique benefits, satisfying real consumer needs. Where an organization has reason to believe that their competitors are marketing brands primarily as differentiating devices, there is an opportunity to develop a strategy, which gets buyers to associate relevant added values with their brand name and hence gain a competitive advantage.

Brand distinctiveness allows customers to identify products and services. This occurs not only from the brand itself, i.e. through the packaging, advertising or naming. There are further sources to distinguish the brand. First, consumers perceive the brand in their own way. As explained before, value is in the eye of the beholder and each person can draw very different conclusions. Secondly, people interacting with the consumers affect their perception of the brand. Especially with consumer goods, consumers focus their attention on certain brands as a result of conversations with peer groups.

Brand as a Functional Devise – Another category of brands is that used by marketers to communicate functional capability. This stemmed from the early days of manufacturers’ brands when firms wished to protect their large production investments by using their brands to guarantee consistent quality to consumers.

As consumers began to take for granted the fact that brands represented consistent quality, marketers strove to establish their brands as being associated with specific unique functional benefits by, for example, not just marketing a credit card, but a credit card protection policy.

Functional capabilities should always be focused on consumers, rather than on internal considerations. For instance, providing televisions in waiting rooms to make queues less annoying is less likely to be appreciated than a redesigned system to eliminate queues altogether.

A brief scan of advertisements today shows the different functional attributes marketers are trying to associate with their brand. For example, Dyson, emphasizes the unique features of a carpet cleaner that needs no bag changing; SEAT strives to convey a good value-for-money proposition; Castrol GTX represents ‘high technology’ engine protection. Firms adopting the view that they are employing brands as functional communicators have the virtue of being customer driven, but clearly run the risk of an excessive reliance on the functional (rational) element of the consumer choice, as all products and services also have some degree of emotional content in the buying process.

Brand as a Symbolic Device – In certain product fields (e.g. Perfume and clothing) buyers perceive significant badge value in the brands, since it enables them to communicate something about themselves (e.g. emotion, status, etc.). In other words, brands are used as symbolic devices, with marketers ‘believing that brands are bought and used primarily because of their ability to help users express something about themselves to their peer groups, with users taking for granted functional capabilities.

Where consumers perceive the brand’s value to lie more in terms of the non-verbal communication facility (through the logo or name), they spend time and effort choosing brands, almost with the same care as if choosing a friend. It is now accepted that consumers personify brands and when looking at the symbol values of brands, they seek brands which have very clear personalities and select brands that best match their actual or desired self-concept.

Through being members of social groups, people learn the symbolic meaning of brands. As they interpret the actions of their peer group, they then respond, using brands as non-verbal communication devices (e.g. feelings, status). To capitalize on symbolic brand therefore, marketers must use promotional activity to communicate the brand’s personality and signal how consumers can use it in their daily relationships with others. Nonetheless, whilst there are many product fields where this perspective of brands is useful, it must be also be realized that consumers rarely consider just the symbolic aspect of brands. Consumers often evaluated brands in terms of both a symbolic (emotional) and a functional (rational) dimension. Marketers should therefore, be wary of subscribing to the belief that a brand acts solely as a symbolic device.

Brand as a Risk – Reducer Many marketers believe that buying should be regarded as a process whereby buyers attempt to reduce the risk of a purchase decision. When a person is faced with competing brands in a new product field, they feel risk. For example, uncertainty about whether the brand will work, whether they will be wasting money, whether their peer group will disagree with their choice, whether they will feel comfortable with the purchase, etc. Successful brand marketing should therefore be concerned with understanding buyers’ perceptions of risk, followed by developing and presenting the brand in such a way, that buyers feel minimal risk. An example of an industry appreciating perceived risk is the pharmaceutical industry. One company has, developed a series of questions which its sales representatives use it evaluate the risk-aversion of doctors. When launching a new drug the company focuses sales presentations initially on doctors with a low-risk aversion profile.

To make buying more acceptable, buyers seek methods of reducing risk by, for example, always buying the same brand, searching for more information, only buying the smallest size, etc.

Research has shown that one of the more popular methods employed by buyers to reduce risk is reliance upon reputable brands. Some marketers, particularly those selling to organizations rather than to final consumers, succeed with their brands because they find out what dimensions of risk the buyer is most concerned about and then develop a solution through their brand presentation which emphasizes the brand’s capabilities along the risk dimension considered most important by the buyer. This interpretation of branding has the virtue of being output driven. Marketers, however, must not lose sight of the need to segment customers by similar risk perception and achieve sufficient numbers of buyers to make risk reduction branding viable.

Brand as a Shorthand Device – Glancing through advertisements today, we become aware of brands whose promotional platform appears to be based on bombarding us with considerable quantities of information. To overcome the problem of sifting through large amounts of information, brands are used as shorthand devices by consumers to recall from memory sufficient brand information to make a decision. There is merit in this approach, as people generally have limited memory capabilities. To overcome this, they bundle small bits of information into larger chunks in their memory, and use brand names as handles, to recall these larger information chunks. By continuing to increase the size of these few chunks in memory, buyers in consumer, industrial and service sectors can process information more effectively. At the point of purchase, they are able to recall numerous attributes by interrogating their memory.

There is, nonetheless, the danger of concentrating too heavily on the quantity, rather than on quality of information directed at purchasers. It also ignores the perceptual process, which is used by buyers to twist information until it becomes consistent with the prior beliefs – an error fatally overlooked by the short- lived Strand cigarette brand.

Brand as a Legal Device – With the appearance of manufacturers’ brands at the turn of this century, consumers began to appreciate their value and started to ask for them by name. Producers of inferior goods realized that to survive they would have to change. A minority, however, changed by illegally packaging their inferior products in packs that were virtually identical to the original brand. To protect themselves against counterfeiting, firms turned to trademark registration as a legal protection. Some firms began to regard the prime benefit of brands as being that of legal protection, with the result that a new category of branding appeared. Within this group of brands, marketers direct their efforts towards effective trademark registration along with consumer education programmers about the danger of buying poor grade brand copies. For example, the pack details on Matchbox products boldly state that ‘Matchbox is the trademark of the Matchbox group of companies and is the subject of extensive trademark registrations’, while Kodak packs all carry the advice ‘It’s only Kodak film if it says Kodak’

Brand as a Strategic Device – Finally, more enlightened marketers are adopting the view to which the authors subscribe, that brands should be treated as strategic devices, The assets constituting the brand need to be audited, the forces affecting the future of the brand evaluated and, by appreciating how the brand achieved its added value, a positioning for the brand needs to be identified so that the brand can be successfully protected and achieve the desired return on investment. To take full advantage brands as strategic devices, a considerable amount of marketing analysis and brand planning is required, yet many firms are embroiled in tactical issues and do not gain the best possible returns from their brands.

This section has described several different categories of brand and has also highlighted the inherent weaknesses of each type brand. You may wonder, however, why manufacturers under- take the commercial risk of developing manufacturer brands and why distributors extend their activities beyond their area of economy expertise to develop distributor brands. We shall discuss the value of a brand to manufacturers, distributors and consumers in the next lesson.