In difficult economic times such as these, it’s expected that businesses will look for ways to cut costs. And its astonishing that the functions of branding, marketing and communications are the first to get the chop.

So let me ask: if the brand is without doubt the single most important factor that contributes to the profitability of a business, then why would any business want to diminish its marketing efforts in difficult economic times? What is the opportunity cost of this decision? What is the impact on market share? What is the impact on the brand from a competitive standpoint?

If you think of your brand as a major competitive asset, then you may see the importance of following through with your marketing strategy regardless of economic times. You may also see value in changing the management of your business and putting the brand at the centre of your business strategy by aligning all your communications, operations and systems to your brand mission and values – and working to make all of your employees effective ambassadors for your brand.

I can tell you that companies such as Apple, Coca Cola, BMW and Google are global successes because they put the brand at the centre of their corporate strategy. So next time you revisit your business strategy, consider making your brand the focal point.

what is branding?

Back in 1984, Philip Kotler defined a brand as a “name, term, symbol, or design or a combination of them, which is intended to signify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.”

Today, great brands are personalities, as intrusive in our culture as film stars, sports heroes, or fictional characters. Ask a friend or family member to describe a branded product and they will not usually reply with descriptions of terms, symbols and designs. They will reply with adjectives describing the qualities of the brand, proving that brands are recognised and understood on an emotional level. A brand is then a sort of prejudice, in the literal sense of a prejudgement. Like all prejudices, it will seem unfair to the people who are on the wrong end of it – like the less recognised competitors of the big brands.

Branding, therefore has to do with the way customers perceive and buy things, it is not simply a characteristic of certain industries. Because branding deals with the mechanics of customer preference, you should regard it as a powerhouse of profit rather than a selling gimmick.

the changing role of brands

The changing role of brands from a marketing tool to an organisational principle for business is part of a historical trend. First they were recognised merely as trademarks (brand names and logos) which differentiated one product or service from another. This concept of brand differentiation was then extended into whole visual identity systems with guidelines for everything from packaging to advertising, seeking always to differentiate the ‘look’ of the product.

More recently, successful businesses recognise that brands define ongoing relationships through the power of their personalities and values, which further differentiate the branded products/services from their competitors.

Leaders in brand management recognise that brands must define relationships with all their key audiences, notably investors and employees and not just customers. They also acknowledge that relationships and values relate to behaviours. This means that in the best managed brands, the brand’s values are accepted and practised by the workforce, particularly in service businesses like travel, hospitality and financial services.

To illustrate that brands now serve as much more than just an identity system, leading brand and brand management agency Interbrand developed the “Brand Iceberg” concept. Like an iceberg, only a small proportion of the brand’s mass and power is visible, the rest is intangible and hidden. But effective brand management requires attention to the hidden brand elements as much as to the visible ones.

Those businesses that are most advanced in their brand thinking, endeavour to manage the brand’s identity not just through its visual expression but also through intangible elements, such as proactive investor relations and employees who deliver the brand values in customer interactions. Consequently, they ensure that all the interdependent elements of brand management have been revised to reinforce the brand strategy.

why make your brand the centrepiece of your business strategy?

There are still many business that see the brand as merely a visual identity system. They may have someone dedicated to overseeing the expression of that brand ensuring that it is not distorted or wrongly exploited. You would think that these companies have traditionally placed a lower priority on developing and associating values with their brand and have focused on it principally as a naming device designed to raise customer/prospect awareness. Consequently, we could argue that they have wasted much of the brand’s potential value by not clearly defining a personality or a relationship with all stakeholders, especially employees.

Only a very few businesses consider and develop their corporate brand strategy and positioning at the same time as the business vision and strategy. For them the brand becomes the embodiment of the business vision and direction and the brand mission and values serve as the lenses through which proposed changes and improvements are filtered.

So what are the practical implications of positioning the brand at the centre of your business strategy? You will need a brand-driven organisational infrastructure, comprising of visibly brand committed management leading a workforce who live and breathe the brand vision and values in their regular activities. You must maintain these disciplines for long enough to have become part of the intrinsic fabric of your business. All the policies and practices described in the Brand Iceberg are regularly monitored to ensure they support, not conflict, with your brand vision.

conclusion

There is no doubt that the brand is the single most important factor that contributes to the profitability of a business. The brand is what customers recognise and recall. It engages loyalty, carries differentiation and projects perceived quality and benefits. The brand is what people relate to and ultimately, it’s what they buy.

So next time you are making strategic changes to your business, think of your brand as much more than just a mark on your letterhead or website – make it the centrepiece of your business strategy.

references

Arnold, D., The handbook of Brand Management, Perseus Books, 1992

Frampton, J., All brands are not created equal. Best Global Brands, Interbrand, 2008

Kotler, P., Marketing Management, Analysis, Planning, Implementation and Control, 5th ed., Prentice Hall, 1984

Bank on the brand, Interbrand, 2001

© srt marketing 2009