Category: brand promise
The latest WealthSurvey from the Luxury Institute finds that luxury brands are failing to deliver on the fundamentals of luxury at a critical time for the industry:
- For wealthy consumers, superior quality (82%), superior craftsmanship (78%) and superior customer service (60%) are the top three requirements of a luxury brand. Yet, more than one-third of consumers say luxury brands are worse today than in the recent past on delivering superior customer service and on failing to have salespeople who are experts in their products.
- Half of consumers earning more than $200k annually and 46% of those with a net worth more than $1 million think luxury brands are becoming commodities.
- 64% of wealthy consumers believe luxury goods prices are too high relative to the value they deliver. One reason may be that while major luxury brands are trying to spread themselves into as many categories as possible, 68% of the wealthy consumers believe a luxury brand can only be an expert in a few truly related product categories.
- The failures come at a time when 43% of wealthy consumers say they are becoming more practical in their luxury purchases, are becoming more budget conscious (43%) and are purchasing more of what they need rather than what they want (30%).
- 62% of wealthy consumers say that the current state of the economy has changed their view of the luxury industry. When asked why in an open-ended format, consumers cite the following as key reasons for the change of view: becoming more budget-conscious and prudent, the need to re-think and re-prioritize, a strong feeling that luxury goods are too "mass" vs. price, a sense that flaunting luxury at this time is insensitive and a desire to help others rather than spend on themselves.
- A majority of wealthy consumers state that they like to buy luxury items for the quality because they last longer and keep their value (77%)and that they buy expensive items for their own pleasure, not to show off (72%).
- Half of luxury consumers cited discounts and sales as a major influencing factor in making luxury purchases and more than half of wealthy consumers say they are likely to respond to a special offer or sale from a luxury brand over any other factors.
A national sample of 500+ wealthy American consumers was surveyed online by the Luxury Institute. The Institute's respondents had an average income of $308,000.00 and an average net-worth of $3.9 million.
Source: The Luxury Institute 2/10/09 , Chain Store Age 2/10/09
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Captive brands are actually in-store brands that differentiate themselves based on brand versus price positioning. Captive brands do promote their affiliation with the retailer, are frequently positioned head-to-head with national brands, and receive marketing promotion and support beyond that typically given to store brands. The focus on brand differentiation enables captive brands to have stronger margins versus traditional store or private label brands that sacrifice margins to achieve low price positioning.
Brandweek points to Walgreens (WAG) bioInfusion hair care products, and the CVS (CVS) Cristophe line, both of which compete with Procter & Gamble (PG) Pantene, as successful captive brands. Because these two captive brands receive greater marketing support than typical store brands, they position themselves as premium brands similar to the quality and pricing of consumer packaged goods brands from companies like P&G. This helps retailers to achieve a “richer margin” on captive brands versus national brands.
Usually captive brands are created by the retailer. But in some cases they are abandoned national brands that find new life as captive brands.
One example of a national brand reborn as a captive brand is ‘White Cloud,’ a toilet tissue trademark abandoned by Procter & Gamble. Wal-Mart (WMT) licensed White Cloud and relaunched it as a Wal-Mart in-store brand of toilet tissues. It is a captive, versus a store brand, because it leverages its significant equity as a former national brand to differentiate itself from other tissue brands, versus competing solely on price.
Nuprin, an abandoned brand of ibuprofen painkillers is another example. The Nuprin brand name was sold to CVS and relaunched as a store brand.
Because of their attractive margins, captive brands will increasingly put pressure on national brands. For example, Walgreens says their bioInfusion line, created just three years ago, is now “one of the top brands in the entire hair care category."
Sources:
Retailers Rally Behind Their 'Captive Brands'
Can a Dead Brand Live Again?
See also:
brand defined
store brand, private label
national brand
positioning statement
point of difference
pain point
target audience
frame of reference
reason to believe
brand essence
portfolio architecture
commoditization
brand architecture
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A brand is the sum of all the associations, feelings, attitudes and perceptions that people have related to the tangible and intangible characteristics of a company, product or service.
The American Marketing Association defines ‘brand’ as “a name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers…A brand may identify one item, a family of items, or all items of that seller.” But the meaning of brand extends to intangible aspects as well, such as associations, feelings and experiences. Philip Kotler, one of the world’s foremost experts on branding offers this definition:
A brand is a complex symbol that can convey up to six levels of meaning:
The extent to which a brand can convince the customer that they provide more meaningful tangible and intangible benefits than competing brands determines the overall strength of the brand.
Brands are important to companies because stronger brands are able to command and sustain higher margins than weaker brands. Brand strength is judged by many measures, including ‘substitution’, the likelihood that the customer will purchase another brand if their brand is not available, price premium, awareness, etc.
Brand positioning strategies attempt to shape the associations, experiences, feelings, attitudes and perceptions that people have about a brand so that they not only view the brand positively, but see the brand as a solution to a specific need, want or ‘pain point’ that they may have.
The completed brand positioning strategy is used as a guideline to determine how the brand is represented, i.e., in logos, taglines, names, colors, products, services, distribution channels, communications channels, messaging, etc.
More info:
- Attributes: A brand brings to mind certain attributes. Mercedes suggests expensive, well-built, well-engineered, durable, high-prestige automobiles.
- Benefits: Attributes must be translated into functional and emotional benefits. The attribute “durable” could translate into the functional benefit “I won’t have to buy another car for several years.” The attribute “expensive” translates into the emotional benefit “The car makes me feel important and admired.”
- Values: The brand also says something about the producer’s values. Mercedes stands for high performance, safety and prestige.
- Culture: The brand may represent a certain culture. The Mercedes represents German culture: organized, efficient, high quality.
- Personality: The brand can project a certain personality. Mercedes may suggest a no-nonsense [person, for example].
- User (Primary Target): The brand suggests the kind of consumer who buys or uses the product. We would expect to see a 55-year-old top executive behind the wheel of a Mercedes, not a 20-year-old secretary.
Philip Kotler Source: Marketing Management, Eleventh Edition, 2003, Prentice Hall
The meaning of 'brand' within the context of online data reporting:
When used to refer to online content or publishers the term 'brand' can have a slightly different meaning. Most likely it refers to a collection of online branded content across a collection of websites that display a consistent, shared brand identity. In this instance, most syndicated research services will count the websites as a single brand for reporting of statistics and other data. A website can only exist under one brand at a time.
Source: Nielsen Online
See also:
captive brand
store brand, private label
national brand
positioning statement
point of difference
pain point
target audience
frame of reference
reason to believe
brand essence
portfolio architecture
commoditization
brand architecture
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The Reason to Believe provides proof that the brand delivers the benefits that it promises to deliver, that benefits are true and credible.
The reason to believe is a key element of the positioning statement.
The reason to believe can include:
- Technical reasons to believe/superiority claims (e.g. 30% faster, or;
- Functional benefits that help prove the emotional brand benefit (e.g. provides superior coverage)
Each benefit will not necessarily have a separate and distinct reason to believe, but the reason to believe collectively should prove to the consumer that the brand does, indeed, deliver its benefits as claimed.
Also referred to as “Brand Proof Points,” “Proof Points,” or “Support”
Criteria for evaluating Reasons to Believe/Proof Points:
The attitudinal and demographic description of the core prospect or customer to whom the brand is intended to appeal, or to whom the marketing plan is directed.
Criteria for evaluating the target audience description:
- Should balance size and relevance. Your target audience must be large enough for your efforts to be profitable, but not so large that it is generic. Don't make the mistake of trying to appeal to everyone; if you do, you will not be able to effectively differentiate your brand.
- Be inclusive of users and non-users - What are the opportunities to grow revenue by converting the most likely non-users of your brand into users?
- Makes it clear who the target is, and who it is not
- Reinforces the essence of your brand by ensuring it is consistent with the characteristics of your target audience. For example, if the essence of your food brand is about being natural and 'pure', its unlikely that people who are uninterested in nutrional topics would be a good match for your brand.
Questions to consider as you develop target audience description:
- Who is your brand's best customer?
- How do you describe your best customers?
- Demographic
- Psychographic
- Technographic
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Are there opportunities to divide your target users into groups (segments) that will enable you to make your communications to them more relevant and effective? Using the natural foods brand as an example, dividing your target audience into athletes and moms may permit you to develop communications that are more relevant to each segment, than if you tried to market to the group as a whole.
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What is the value of each target user group to the company? Does the target user group contribute enough revenue to make it worthwhile to market to them? You may find, for example, that people who make their own soap love your natural food brand, but there aren't enough of them to market to efficiently.
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What’s the 'pain point' for each target user group? Does your brand solve a specific, important need or problem for the target user? Is it a need or problem that another brand is unable to solve?
See also:
brand defined
captive brand
store brand, private label
national brand
positioning statement
point of difference
pain point
frame of reference
reason to believe
brand essence
portfolio architecture
brand architecture
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Also referred to as a brand strategy, positioning strategy, or brand positioning statement, a positioning statement is a succinct description of the core target audience to whom a brand is directed, and a compelling picture of how the marketer wants them to view the brand.
A well-constructed positioning statement is an invaluable means of bringing focus and clarity to the development of a marketing strategy and tactics. How? Because every decision that is made regarding the brand is judged by how well it supports the positioning statement---from the brand name, the product itself, and packaging, to advertising, promotions, etc.
There are four elements or components of a positioning statement:
- Target Audience - the attitudinal and demographic description of the core prospect to whom the brand is intended to appeal; the group of customers that most closely represents the brand’s most fervent users.
- Frame of Reference - the category in which the brand competes; the context that gives the brand relevance to the customer.
- Benefit/Point of Difference - the most compelling and motivating benefit that the brand can own in the hearts and minds of its target audience relative to the competition.
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Reason to Believe - the most convincing proof that the brand delivers what it promises.
Template for a Positioning Statement:
For (target audience), (brand name) is the (frame of reference) that delivers (benefit/point of difference) because only (brand name) is reason to believe).
Criteria for Evaluating a Positioning Statement
- Is it memorable, motivating and focused to the core prospect?
- Does it provide a clear, distinctive and meaningful picture of the brand that differentiates it from the competition?
- Can the brand own it?
- Is it credible and believable?
- Does it enable growth?
- Does it serve as a filter for brand decisionmaking?
See also:
brand defined
captive brand
store brand, private label
national brand
point of difference
pain point
target audience
frame of reference
reason to believe
brand essence
portfolio architecture
commoditization
brand architecture
Subscribe to Brandeo’s free weekly newsletter or RSS feed
