Brand
Takeaway: Brand is how customers choose between similar products or services. A strong brand is a valuable intangible asset, while a weak brand can easily scuttle a business.
An alien landing on Earth would be a bit confused about why the average shopping centre has dozens – sometimes hundreds – of what appear to be identical jeans.
What exactly is the difference, it might ask, between a pair of Levi’s jeans and the jeans offered by, say, Diesel or Gap?
And to a first approximation, the Martian is right to question the sanity of these strange humans. The jeans do all look the same no matter who is selling them. But the alien would be missing a crucial layer to navigate the maze of human commerce: brand power.
Each of those apparel outlets rates higher or lower in the minds of consumers depending on a series of metrics that reflect whatever the individual feels is important to them. This subjective rating (some people like Levi’s jeans, some don’t) allows some apparel manufacturers to price their clothing in a higher retail bracket while others are forever stuck in the doldrums of the bargain bin.
The alien might see that brand is the outward reflection of a company’s reputation. Brand imparts a sense of whether an item (like a pair of jeans) will make a wearer feel “sexy,” “cool” or appear “down-to-earth.” Customers gravitate to certain items if the brand complements the identity they have already chosen for themselves.
The Martian might be a bit cynical and say a brand is little more than a manufactured method used by companies to create an illusion of choice. Yet brand is a highly effective marketing strategy that can make or break a company.
How to think about brand
Brand is the sum of all the signs, signals and perceptions other people have about a company. In that way, brand is a bit like reputation.
A reputation, like a brand, is carefully built over years through the thousands of interactions a company has with its customers, both directly and indirectly. For this reason, a brand image can collapse in much the same way as a compromised personal reputation – and sometimes for the same reasons.
Reputation is a nice analogy for brand. Consider a hypothetical scenario where you're looking to hire a contractor to remodel your home.
You have two options: Contractor A and Contractor B. Both have similar qualifications, experience and pricing. However, you've heard positive things about Contractor A's reputation from friends, neighbours and even online reviews. Contractor A is known for its attention to detail, great work and excellent customer service. On the other hand, you haven't heard much about Contractor B at all.
In such a situation, you'd likely feel much more confident choosing Contractor A due to its established reputation. From everything you’ve seen, the brand has almost become a social shorthand for trust, reliability and quality. That kind of reputation screams “spend your money with this company.”
Even though Contractor B might provide similar services, it doesn’t have a recognisable brand which means you have no way to gain assurance about its capabilities.
Of course, without actually experiencing Contractor A’s services it is impossible to know if it’s better than Contractor B’s. But you need to make a choice at some point and brand is all you really have to go on. It’s not an example of pure rationality (almost nothing human is purely rational), but it’s enough to compel you to pick up the phone and book a session with Contractor A.
Just as a reputable person is more likely to attract opportunities and maintain relationships, a well-established brand can attract customers, drive loyalty and ultimately lead to increased sales and market share.
Why do companies need a strong brand?
Developing a strong brand has a lot of upside.
A study published in the Journal of Marketing found that brand trust positively affects customer loyalty and engagement, leading to increased repurchase intentions and positive word-of-mouth referrals. Patagonia is a great case study for this.
From its humble beginnings in 1973 as a small climbing equipment manufacturer based in sunny California, Patagonia is today a globally recognised brand with a loyal customer base and a hefty market presence.
Part of Patagonia's success was down to its unwavering commitment to its values and purpose. The company became an advocate for environmental sustainability, social responsibility and decent products. This clear brand identity resonated with consumers and allowed Patagonia to stand out in a crowded marketplace.
The company went out of its way to create sustainable practices across its entire supply chain such as using recycled materials in its products to minimise waste and carbon emissions. This programme was more expensive but it attracted a loyal following of environmentally conscious consumers who shared those same values.
Patagonia's commitment to quality and durability further strengthened its brand image. The company embraced a "Buy Less, Choose Well" philosophy to discourage the throwaway culture of consumerism. Unlike its competitors, Patagonia offered a repair programme on all its garments to increase the lifetime of its garments.
Consultants would rubbish this idea. Doesn’t Patagonia know that deteriorating garments lead to repeat sales? Of course Patagonia understood that it was limiting its own profit margin, but its brand image of sustainability was more important long-term for the company, so it chose the more expensive option.
Patagonia generated about $US200 million of revenue in 2022, so it must be doing something right.
In all its marketing, Patagonia adopted a bold and authentic voice to create purpose-driven promotions, such as the "Don't Buy This Jacket" campaign which urged customers to consider the impact of their purchasing decisions. Customers not only continued to buy Patagonia products but also shared their experiences with others, amplifying the company's reach and brand image.
How can companies develop a strong brand?
The computer company Apple is widely considered the blueprint for building a powerful brand.
Apple's brand has become almost a synonym for innovation, elegance and a seamless user experience. It represents more than just a technology company; it has become a symbol of creativity, empowerment and aspiration. Apple's brand power has not only contributed to its financial success but has also created a loyal and passionate customer base that eagerly awaits its next ground-breaking product release.
Companies hoping to build a powerful brand should focus on developing a unique identity that resonates with a target audience and reflects their values and mission.
And since word tends to get around in the age of social media, it’s important for a company to develop a consistent brand experience across all customer touchpoints, including marketing materials, product packaging and customer service interactions.
Story, after all, is king and being in control of your company’s story is a fundamental strategy for any business no matter the size.
What happens when a company doesn't have a strong brand?
United Airlines serves as a real-world case study that demonstrates the consequences of neglecting brand development.
The airline has been regularly criticised for failing to prioritise the passenger experience, leading to several high-profile incidents of poor customer service and mishandled situations. These incidents, widely shared on social media, tarnished the company's reputation (an analogue of brand) and eroded customer trust.
The lack of a strong brand left UA vulnerable to public backlash and the effects of negative media coverage. Other airlines seized the opportunity to attract dissatisfied United Airlines customers, further exacerbating the company's decline.
Rebuilding the brand's reputation required substantial investment in marketing campaigns, customer service training and organisational restructuring.
While creating a brand can be expensive, there are cost-effective strategies that companies can use to develop a strong brand identity. By building a strong brand, companies can establish a unique position in the market, build trust and credibility with customers and command a premium for their products or services.