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2. TYPES OF BRANDS
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To Branding website
Contents
Using this guide
Introduction
Checklist
Case studies
© The Chartered Institute of Marketing 2003
2. TYPES OF BRANDS“Isn’t branding only relevant in the fmcg sector?”
Use bookmarks in the left-hand panel
to navigate this guide – click on the bookmarks tab on the left of your
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Search for specific words by using: Ctrl + F (PC) or
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Contents
> Using this guide
> Introduction
> Common features of all brands
> Sources that influence perception ofbrands and degree of control
> Differentiating features of brands
> Different types of brands
> Checklist
> Case studies
Defining brands
Types of brands
How brands work
Brand strategy
Managing and developing brands
Brand portfolio andarchitecture
Measuring brands and their performance
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Using this guide
Navigation
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Branding as a disciplineis probably most
commonly associatedwith fmcg [but] brandsare developed in every
category.
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Introduction
“Isn’t branding only relevant inthe fmcg sector?”Branding as a discipline is probably mostcommonly associated with fmcg (fast movingconsumer goods) – physical products boughtmore or less routinely. Many consumercompanies such as Coca-Cola, Unilever, Nestléand Procter & Gamble have set the standardfor brand marketing.
However, brands are developed in everycategory and it is important to understandwhat these categories are and how the processof branding differs in each one.
Perhaps the most significant development isthe evolution of the organisation brand whichintroduces the idea of stakeholders as a keytarget audience.
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Common features of all brands
>A brand is a mix of rational, sensual andemotional rewards to the consumer. Asuccessful brand is an identifiable product,service, person or place, augmented in sucha way that the buyer or user perceivesrelevant, unique added values which matchtheir needs most closely. Furthermore, itssuccess results from being able to sustainthese added values in the face ofcompetition. [de Chernatony, L., 1998]
>Brands exist in the minds of people(consumers, employees, other stakeholders).They are not something that acompany/organisation sells, but what theusers of the brand perceive. They are theculmination of a user’s total experience withthe product or service (or company) overmany years. Clear and distinctive brandpropositions can influence stakeholders’attitudes in your favour.
Related reading
eGuide1: Defining Brands
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Figure 2.1: Brand Mind SpaceTM
FUNCTIONAL DIMENSIONconcerns the perception of benefit of the product
or service associated with the brand
SPIRITUAL DIMENSIONis the perception of global or local responsibility
SOCIAL DIMENSIONconcerns the ability to create identification with a group
MENTAL DIMENSION
is the ability to support the
individual mentally
Source: Gad, T. (2001) 4-D Branding: Cracking the corporate code of the network economy. London, FT Prentice Hall, p. 18.
BRANDMIND SPACE
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>People derive their beliefs and utilities ofbrands from many sources. The brand ownerhas direct control and influence over somesources, indirect control over other sourcesand no control at all over still others.
“Products are made and owned bycompanies. Brands, on the other hand, aremade and owned by people... by thepublic... by consumers.
“People come to conclusions about brands asa result of an uncountable number ofdifferent stimuli, many of which are wayoutside the control of the product’s owner.
“Much of what influences the value of abrand lies in the hands of its competitors.”[Bullmore, 2001]
>The more sources the brand owner canexercise a coherent influence over, the moreintegrated and secure the brand will be. Oneway in which the brand managers canbecome more focused on integrated branddevelopment programmes is by consideringthe journeys each of their stakeholdersundertakes as they come into contact withthe organisation. [de Chernatony, L., 2001]
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Figure 2.2: Striving for an integrated brand journey
Source: de Chernatony, L. (2001) From Brand Vision to Brand Evaluation. Oxford, Butterworth Heinemann.
Stakeholder
How did they become aware of your brand?
How do stakeholders further develop opinions about your brand through interacting with each other?
When then deciding to have further dealings with you, what routes do they follow?
Do all the brand communicators reinforce the brand's core values?
What roles do staff and technology play throughout the stakeholders' journeys – do they support the brand's core values?
What mechanisms are in place to reinforce the brand's values after the transaction?
The brand owner hasdirect control and
influence over somesources, indirect controlover other sources and
no control at all overstill others.
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Figure 2.3 shows how stakeholders’ perceptionof the brand can be influenced by any point ofcontact with it, be it through brandcommunications, direct experience or word-of-mouth. The more control can be exercisedover each of those elements, the moreconsistent the perception of the brand, both intime and across all stakeholders.
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Figure 2.3: Stakeholder reaction to brand: the brand owner has direct control over some aspects, indirect control over others and no control over still others
Source: Davidson, H. (2002) The Committed Enterprise. Oxford, Butterworth Heinemann.
Start here 1
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AwarenessExperienceAttitudesImage
ResidualMentalImage
STAKEHOLDERS' MENTAL INVENTORY
OTHER INPUT
GossipRumourMedia commentWord of mouthPressure groupsWord of Web
ORGANISATION INPUT
VisionValuesProductsServicesPerformancePresentationCommunication
> Stakeholder reaction to the organisation brand changes daily> The mechanism for this is a continuous process
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The fragmentation ofmedia channels, the
explosive growth of theInternet, and the
changing attitudes ofconsumers have all
chipped away at the 30-second network TV spot
as the prime medium forbrand communication.
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Sources that influence perception ofbrands and degree of control
Direct control:
>the product (eg, ingredients, formulation andtechnical efficiencies).
>the service component (eg, nature ofservice, numbers of staff, degree of trainingand specific deliverables).
>the promotion (eg, how much, what contentand where exposed).
>the distribution (eg, where purchased orexperienced).
>the packaging (eg, type, materials anddesign).
>the price.
>the choice of partner/associate/links, withother companies, for example.
Limited control:
>all of company’s broader activities thatimpact perception (eg, employmentpractices, environment policy, social policiesand material sourcing).
>media good news (placed stories).
No control:
>media bad news.
>accidents.
>activity of competitors.
>activities of individual employees.
“The rules of the (brand communication) gamehave changed beyond recognition. Thefragmentation of media channels, theexplosive growth of the Internet, and thechanging attitudes of consumers have allchipped away at the 30-second network TVspot as the prime medium for brandcommunication.
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The consumer decisionprocess will vary
according to how muchrisk they perceive inbuying a product or
service.
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“What’s more, the way in which consumersform their opinions of brand is increasinglycomplex. Companies may distinguish betweenmain media, promotions, public relations,sponsorship, product placement and theInternet. Consumers and potential consumersmake no such distinction.
“They may read disturbing reports of acompany in a newspaper, see its trucks beingbadly driven on the motorway, be infuriated byincomprehensible instruction leaflets, be drivenmad by the company’s call centre, receivegraceless and misspelled letters from headoffice. Each of these encounters has thepotential to inflict serious harm on a brand’sreputation.” [Fitzgerald, 2001]
Differentiating features of brands
The balance between tangible and serviceelements inherent in a brand will affect thefollowing:
>how purchased/used/experienced.
Fmcg products are traditionally dependenton wide distribution networks. However,through the use of e-commerce many havestarted to sell direct to consumers.
>frequency of purchase/use/experience.
Fmcg products are bought much morefrequently, as the name suggests, than bigticket items.
>amount of thought/research/comparisontypically undertaken prior topurchase/experience.
The consumer decision process will varyaccording to how much risk they perceive inbuying a product or service – the risk willdepend on price, quality variance, trust inthe brand and other factors.
>degree of customisation available.
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All brands have one goal– to enhance their
perceived value.
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The intangibility of services makes themmuch more suited to customisation thanfmcg products, which offer a wide varietybut little customisation.
Different types of brands
In terms of complexity, the branding issuesmultiply as the underlying product becomesless tangible. Product brands lie at therelatively simple end of the scale. They areeasy to understand. Service brands are on theother end of the scale, as they are difficult toevaluate prior to purchase. Although all brandshave one goal – to enhance their perceivedvalue – it is important to understand how thatvalue delivery differs across different types ofbrands. [Goodchild, Callow, 2001]
Product brands (1)
Fast moving consumer goods (fmcg) such ascereals, drinks, washing powders, personalcare, confectionery.
Case study: Kleenex
Characteristics:
>CostInexpensive.
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>Balance of product to serviceAlmost exclusively tangible product, althoughservice component can be present (eg,customer-care lines).
>How purchasedMainly through conventional fmcgdistribution networks – supermarkets, othershops, vending machines, relatively largevolume outlets.
>Frequency of purchaseFrequent.
>Degree of research/thought/searchprior to purchase
Typically none, the brand is part of theconsumer repertoire, likely to be habitual.
>Degree of customisationVery little. Often wide range of variants butno real customisation for individualcustomers.
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Figure 2.4: The evaluation spectrum of products and services
Source: de Chernatony, L. (1998) Creating Powerful Brands. Oxford, Butterworth Heinemann, p. 216.
GOODS SERVICES
Easy to evaluate
Difficult toevaluate
High in search qualities
High in experience qualities
High in credence qualities
Chi
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Cha
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Mot
or v
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Res
taur
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Law
n fe
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Hai
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Hi-f
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Lega
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Sur
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It is always harder tobrand something you
can’t touch.
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Product brands (2)
Big ticket items (eg, appliances, cars, houses,boats, furniture, and luxury items such asjewellery, high fashion and watches).
Characteristics:
>CostExpensive.
>Balance of product to serviceService is likely to take on a more importantrole, before, during and after purchase.
>How purchasedTraditionally through specialised outlets(luxury = high status outlets) butincreasingly more widely distributed. Forexample, luxury cosmetics are now availablein chemists, electrical appliances insupermarkets and computers available forpurchase via the Internet.
>Frequency of purchaseInfrequent.
>Degree of research on purchaseA great deal of thought, research andcomparison goes into the decision, althoughwith luxury goods, investment is moreemotional than financial.
>Degree of customisationCan be considerable.
Service brands
Service brands are characterised by the needto maintain a consistently high level of servicedelivery throughout hundreds, or eventhousands of staff. Although a productcomponent may be involved, it is essentiallythe service that is the brand.
These are more complex than product brandsfor two reasons: both because it is alwaysharder to brand something you can’t touchand because they are delivered directly byemployees. [Goodchild, Callow, 2001]
Case study: easyJet
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The meanings of retailbrands are more heavilyderived from consumer’sdirect experience rather
than from advertising.
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Characteristics:
>IntangibilityService brands can seldom be tried out inadvance, which requires the establishment ofa greater degree of trust.
>Inseparability of production andconsumption
Services cannot generally be stockpiled inadvance but are produced and consumed inreal time.
>InconsistencySince humans are usually instrumental indelivering services. [Goodchild, Callow,2001]
Different categories of service brands:
>Classic service brandseg, airlines, hotels, car rentals and banks.
>Pure service providerseg, member associations like The AutomobileAssociation or RAC.
>Professional Service Brandseg, advisors of all kinds – accountancy,management consultancy.
>Agentseg, travel agents and estate agents.
This category of a brand has becomeendangered by the rise of the Internet.Unless value is added in some way, thesemiddlemen will become extinct. An exampleis the demise of the ordinary travel agent, ascustomers book their flights and hotels on-line. Luxury travel agents compete byproviding personal service and havingexclusive contacts.
>Retail brandseg, supermarkets, fashion stores andrestaurants.
Retail Brands are complex and multifaceted.Consumers have a much more involved andinteractive experience with retail brands. Themeanings of retail brands are more heavilyderived from consumer’s direct experiencerather than from advertising. [Gordon, 1996]
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The Internet needs to befully-integrated into the
total brand-building of[a] company.
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Retail brands will differentiate themselves indifferent ways, including:
>explicit customer oriented policies – eg,Prêt à Manger, Carphone Warehouse.
>Particularly unique combination of offerings– eg, Selfridge.
>Concentration in one category or breadthof range – eg, Amazon, Toys-R-Us.
>Own label – eg, Tesco Finest, M&S StMichael.
Brands from other spheres
E-brands
The Internet is a medium that presents newchallenges for brand owners, but theunderlying principles of branding areunchanged. The Internet is developing a moredirect style of relationships between customersand brand owners, and all those interactionsgive an opportunity for strengthening thebrand identity. A distinction needs to be madebetween ‘e-tailers’ like Amazon.com, whoseprimary activity is to deliver physical products,
and other e-brands, which focus on deliveringa service or experience, like lastminute.com ormonster.co.uk. In both cases, however, it isthe intangibles, the brand values that willattract online customers.
Case study: Amazon
Five success factors for e-branding:[Aaker, 2002]
1. A clear brand identity – knowing your brandand what associations you want it to have,what user profiles, brand personality,organisational associations, emotional andfunctional benefits.
2. The Internet needs to be fully-integratedinto the total brand-building of your company– no longer can the Internet be perceived asanother communication medium to bemanaged by silo organisations of specialists.
3. Website design needs to be consistent withbrand presence off-line – the website look, feeland personality need to support the brand’soverall identity.
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Only when off-line andon-line efforts are truly
linked, will traffic bedriven to the website.
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4. Consumers need to be motivated to returnto the site – motivation usually involvesinformation, entertainment and interactivecommunications.
5. Only when off-line and on-line efforts aretruly linked, will traffic be driven to the website– the big pay-off occurs when visiting thewebsite is not a discrete action, but rather partof a larger brand experience.
Related reading
Brands, the Web and Brand Strategy
Building Digital Brands
Media brands
eg, newspapers, magazines, televisionchannels.
Not-for-profit organisation brands
Non-profits are often at a disadvantage whenit comes to branding. After all, they don’t havethe deep pockets of corporations who canafford to hire brand specialists, nor do theyhave staff whose job it is to protect the
integrity of the brand, and promote it at everyturn. But successful branding can have a greateffect on raising awareness of the charity andits mission, and on fund-raising.
Nation brands
New ways of thinking lead to countries beingpositioned as tourist destinations, enhancingstatus of goods and services produced, andaiding under-developed countries. [Anholt,2000]
Related reading
Journal of Brand Management websiteSpecial Issue: Nation Branding, April 2002,Vol. 9, No.4/5
Government brands
Governments and political parties often havestrong brands as they are centred onpassionately held core values, eg low taxes forRepublicans, environmental issues for theGreen party. Branding is important in bothsecuring votes and in international diplomacy.
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Through the 1990s, thenotion of the ‘global’brand developed: the
same ‘sight and soundthe world around’.
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Global brands
Companies have been marketing theirproducts and brands in different countries fordecades. However they were almost alwaysmarketed according to local conditions. Theexceptions are the famous ones – Coca-Cola,Marlboro, McDonald’s and a few others.Through the 1990s, as companies becamemore centrally controlled, as media becamemore global and the countries at least of thedeveloped world began to show similarcharacteristics, the notion of the ‘global’ branddeveloped: the same ‘sight and sound theworld around’.
This has always been something of anoverstatement: rarely is a brand identical ineach of its markets but there was a belief thatmany efficiencies could be effected if brands indifferent countries shared certain commonfeatures: positioning, strategy, packaging,certain types of advertising and so forth. Thisidea has remained a powerful one butincreasingly, companies are taking secondlooks at their global property and realising thattoo strong a central control risks being out oftouch with the local community.
Consequently, although major companies stilltry to ensure that positioning is similar in allmajor markets, they are allowing more localoutput in the communications.
Because these brands are very valuable to thecompany, they are often referred to as ’power’brands or ’pillar’ brands.
Related reading
2002 Global Brands Scoreboard fromInterbrand website
The Brand Chartering Handbook
International Marketing
Features of global brands[Quelch, 1999]
>strong in home market – cash flowgenerated from domestic market enables thecompany to fund a global roll-out
>at least minimum level of awareness,recognition and sales all over the world
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The brand’s core valuescan be global, although
the brand needs to havelocal relevance.
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>the products meet the same human needsworld-wide, even though the physicalproduct may be adapted locally (eg,McDonald’s).
>consistent positioning.
>consumers value the provenance of thebrand, its country of origin, and evenassociate the country’s expertise withspecific products (eg, German cars,American jeans).
>focus on a specific product category.
>use single corporate brand name.
Act local, think globcal
“While there are global brands that have aglobal presence, they don’t have globalconsumers. The brand’s core values can beglobal, although the brand needs to have localrelevance. To bring it to life you need to beflexible and re-enact the brand as appropriate.It is the think global, act local strategy.” [Gavin Emsden, Nestlé UK’s head of consumerinsight and planning for beverages]
The decision whether to standardise or localisebrands when expanding internationally shouldbe led by adding value to the final consumer,not by reducing costs or facilitating HQ control.
Several other factors may affect the decision:[Quelch, 1999]
>regulatory environments vary from countryto country, especially in pharmaceuticals,financial services and utilities.
>the Internet allows adoption of astandardised global strategy withoutinvesting in distribution systems in eachcountry.
>the threat of parallel imports from low-priceto high-price countries.
Anti-globalisation debate: related reading
International Branding: Resolving the global-local dilemma
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Organisation brands
Case study: Levi’s
“Every organisation is a brand, since peoplehave a mental image of it.” [Davidson, 2002]
What is an organisation brand? It is neither aproduct/service nor a corporate brand, it iswider than both. It relates to all stakeholdersand in many cases is rarely advertised. Theorganisation brand represents the impressionpeople inside and outside the organisationhave of it.
Every company, large or small, is a brand inthis sense. Every college, school and hospitalis too. Save the Children and HarvardUniversity are organisation brands, but notcorporate brands.
Everyone would agree that Pampers or Ariel isa brand. What about their owner, Procter &Gamble? You have to search hard to findProcter & Gamble on the back of the package.Yet to Wall Street, suppliers, partners,retailers, and P&G employees, Procter &Gamble is an important ’organisation brand’.
Organisation brands like P&G, Unilever andGeneral Motors, are not consumer brands, butmarket to all other stakeholders. Others likeIBM, Tesco and McDonalds have a dual roleand are also consumer brands. Figure 2.5summarises how organisation brands differfrom product/service brands.
Related reading
The Committed Enterprise
eGuide 6: Managing brand portfolio and brandarchitecture
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Figure 2.5: How organisation brands differ from product/service brands
Source: Davidson, H. (2002) The Committed Enterprise. Oxford, Butterworth Heinemann.
Organisation brand (eg Procter & Gamble)
> Impacts all stakeholders> Flag for all employees> Brand for Wall Street> May or may not be customer brand (IBM is, Procter & Gamble is not)> Brand for media, NGOs, regulators> May not be advertised at all (eg, Procter & Gamble)
Product/service brand (eg Tide)
> Marketed to customers/consumers> Limited impact on employees> Limited Wall Street impact> Always a customer brand> Low interest to media, NGOs, regulators, unless specific incident> Likely to be heavily advertised
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Checklist
Understanding the characteristics ofdifferent types of brands
Constructing a consumer journey
A particularly useful way of understanding theparticular features of different types of brandsand the key stages in how consumers buy anduse your particular category is what is called a’consumer journey’. (It is sometimes alsocalled a ’consumer buying system’.) This is aframework that looks at the purchase processfrom the consumer standpoint and asks aseries of questions that help define the ’rules’of different types of brands.
>What triggers or stimulates thepurchase in the first place?
Is it a habitual process with purchasestimulated by simply running out? Is it a giftitem where a special occasion is the trigger?Is it a seasonal purchase? Is it aninfrequently purchased, very expensiveitem? Each category and sometimes eachindividual brand will have a set ofcircumstances that typify how consumersrelate to your category/brand and this helps
establish the consumer’s mind-set that leadsto at least consideration of purchase.
>How much searching or comparisondoes the consumer engage in beforepurchase?
For example, luxury or gift items will involvequite a lot of thinking and searchingcompared to fmcg; big ticket items willinvolve comparisons on every dimensioncompared to the cheap, semi-automaticfmcg purchase. With service brands, thesearch stage is a critical one in establishingcompetitive advantage through service.
>Where/how does this searching takeplace?
On the Internet? Through catalogues? In ashop (what kinds of outlets)? Consultingfriends? Over how long a period of time?Who else is involved in the searching?
>How much customisation takes place? What kinds of demands do consumersmake? How is your particular categorystructured to meet them? What opportunitiescan you identify that haven’t been met?
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>What channels/promotional vehicles aremost appropriate for this type of brandand how do consumers use thesevehicles?
In addition to the conventional categories inthe media mix, are there other sources ofinfluence, eg, middle men or directsalespeople?
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CASE STUDIES1. Kleenex: not a brand to be sniffed at
2. Easyjet: the Web’s favourite airline
3. Amazon: the get big fast brand
4. Levi’s: rebel without a cause
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1. Kleenex: not a brand to besniffed at
More people buy Kleenex facial tissue that anyother brand in the UK, it has remained thenumber one brand since it first beganproduction in 1924 and enjoys a continuousadvertising presence and 100% share of voiceas the only company advertising facial tissues.
The strength and longevity of the Kleenexbrand are based on originality, regularinnovation, quality control and heavypromotion. In 1996 Kleenex was named as thefastest growing brand in the UK and is in thetop 40 of all grocery brands.
Further details can be found under ‘Kleenex’on the Superbrands website
2. easyJet: the Web’s favouriteairline
With low fares, one of the youngest fleets inthe industry and a steadily expanding range ofdestinations, easyjet has changed the face ofEuropean budget travel and become thecarrier of choice for many business and leisuretravellers.
The current tightening of company travelbudgets has led to companies turning to thelow cost airlines as a viable alternative forEuropean travel. Easyjet has used thishardening of the market to its advantage,growing to a FTSE 250 company with routes to36 key European airports in seven years.
The airline was launched in 1995 by SteliosHaji-Ioannou and was positioned as a ‘people’sbrand’; a David champion to take on theairline Goliaths. Stelios is a great admirer ofVirgin’s consumer champion strategy andsought the advice of Richard Branson beforesetting up easyjet. Note that he is knownuniversally as Stelios as opposed to Haji-Ioannou, which is as much to do with hisinformal approach as to the length of hisname.
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Easyjet achieves low costs by consistentlyadhering to a ‘no frills’ business model. Quickturnaround times, online seat sales, and norefreshments on-board have all contributed tocheaper fares, but the biggest cost saving hasbeen the cutting out of travel agents. Withoutcommission charges, easyjet can sell seats atprices other airlines cannot compete with.Easyjet also implements a yield managementstrategy, prices are closely linked to demandand how far in advance a seat is booked.Peak time seats are significantly moreexpensive than seats taken at non-peak times,which means easyjet is able to maximise seatsales for every flight.
In keeping with the company’s strategicphilosophy, easyjet does not have a largemarketing budget; its marketing reliesprimarily on sales promotions, public relationsand is ostensibly word of mouth. The in-housemarketing team design the ads and havetaken a deliberately economical approach. Theplanes have the phone numbers emblazonedon their sides in easyjet’s signature orangecolour and Stelios himself is a master ofpublicity stunts, which are highly effective withminimal costs. The ‘no frills’ approach,emphasis on online sales and the slogan ‘The
Web’s favourite airline’ have all contributed tothe perception of the brand as a new airline forthe 21st century: cheap, cheerful and fuelledby the new media revolution.
Easyjet is a pioneer of the European budgettravel market and when the brand waslaunched they were virtually the only budgetEuropean carrier. In the wake of their success,however, direct competitors such as Ryanairand Virgin Express have emerged and majorplayers such as British Airways have raisedtheir game in the budget market by chargingless for some fares now than 10 years ago,providing stiff competition. With recent badpublicity due to the aggressive defence of theeasyjet name and colour, and pilots arguingthat their turnaround rates are not sustainable,it remains to be seen whether the people’sbrand can stay at the top of its game.
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3. Amazon.com: the get big fastbrand
Internet retail giant Amazon.com was foundedin 1994 by its charismatic CEO Jeff Bezos. Hisprinciple was to exploit the burgeoning worldof online book sales by becoming the earlymarket leader and doing whatever it took togrow quickly.
Bezos initially founded the company on thebasis that he was ready and willing to losemoney for five years before it would make aprofit, a sensible idea in a brave new world‘littered with corpses who do new things andexpect them to be profitable quickly’. He wasright about Amazon.com losing money, buthadn’t quite predicted the scale. Having lostover $300,000 in 1995, Bezos was running outof money and was forced to desperately bidfor local investment into his pioneeringcompany to fund the growth he craved.
Bezos’ campaigning secured investment of$1million and he immediately began ploughingit into the company, recruiting top staff andbuying new warehouses and larger offices ashe sought to get as great a head start overthe competition as possible. Book superstoressuch as Barnes & Noble and Borders hadn’t
entered into online sales yet and Bezos knewthey would crush small competition when theyturned their attention to the developingmarket.
Amazon.com began to grow exponentially; byfocussing on PR and customer service theysecured excellent ‘word of mouth’ approvaland generated invaluable awareness withoutneeding to raise huge marketing budgets. On16 May 1996 the Wall Street Journal ran afeature about Amazon.com as the lead storyon its front page and the brand really broke.
Investors were soon competing to ploughventure capital into Amazon.com and Bezosbegan to build the business as fast as hecould. Any ideas of profits were forgotten forthe near future as Amazon.com focussed onbuilding the brand and dominating the market.Advertising budgets were allocated for the firsttime and the brand was marketed on therange of choice, convenience, price andcustomer focus.
By 2000, by spending money and spreadingthe word quickly, Amazon.com had grown fromhumble beginnings to a business with 20million customers and a turnover in excess of$550million a quarter.
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At the end of 2002 the company announced aprofit for the first time. Whilst other dotcombusinesses have floundered and becomeexpensive flops, Amazon.com has establisheditself as a market leader, synonymous withbook selling online. With international marketsstill growing quickly, new product lines and stillonly 5% of books in America sold online thefuture looks rosy.
Big investments and big vision paid dividendsfor Amazon.com. Bezos knew the companywould have to grow quickly to compete andbecame a market leader. As a pioneer,Amazon.com had impeccable timing; and inmaking their URL their brand name – ensuringassociation with the growing Internet marketfrom the beginning – and focussing heavily oncustomer service to ensure vital word-of-mouth buzz, they were able to secure thenecessary investment to ensure theirexponential growth. Amazon.com ‘got bigquickly’ and that was the key to their success.
4. Levi’s: Rebel without a cause
First manufactured for the gold miners ofCalifornia in the 1850s, Levi Strauss and Coquickly established a brand reputation forproducing tough, hard-wearing jeans fortough, hard-working miners, and they saw thebrand grow slowly along the American Westcoast throughout the depression and intoWorld War II.
The post war explosion of youth culture andthe large baby boom generation of youngpeople in the 1950s provided the opportunityLevi’s needed to develop the brand andexpand nationally and internationally. Jeanswere the garment of choice for a newgeneration looking to rebel against conventionand, as the classic manufacturer, Levi’sbecame the brand of choice and a statussymbol worn by rock stars, actors and the‘cool’.
The brand rested on the attached connotationsof originality and rebellion. A brief flirtationwith baby clothing, polyester suits and runninggear in the 1970s and early 1980s was quicklyabandoned as consumers couldn’t buy into thisethos with these products. Levi’s had begun to
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abandon the brands core values, detachingthemselves in part from what their consumerswere buying into, and as the experiment failedtheir marketers began to work on a campaignto stabilise the brands image.
The result was a great success. Commencingwith an advert featuring Nick Kamen walkinginto a laundrette sporting the classic,relaunched 501 jean, Levi’s focussed theircampaign on their identity as the originals. Theads featured classic soundtracks such as TheClash’s ‘Should I Stay or Should I Go’. Levi’swere the originals, they were rugged andenduring, good enough for gold-rush minersand good enough for modern life.
Focussing on the brands core values of classicidentity saw Levi’s reap the rewardsthroughout the late 1980s and early 1990s,beating sales targets and achieving doubledigit growth on an annual basis. The problemwas the brand became static and trendseventually caught up with them. Sales werenoticeably down at the start of 1997 and nose-dived by the end of the year. Between 1997and 2000, Levi’s lost over 50% of itsconsumption among its core customers (16- to
24-year-olds) as youth culture diversified andmoved towards new fashions.
This shift presented a great challenge forLevi’s. They had to adapt to the new climate,whilst not losing the brands’ focus andalienating loyal customers. Brand managerssought to revitalise the brand and, afterextensive market research, launched newproduct ranges such as Sta-Prest andEngineered denim in 2000 as a new productfor a new generation to own as their own.
The modernisation of the brand was a successas it appealed to a contemporary youth cultureand sales are now on the upturn after severalyears of decline. A heavy focus on PR andextensive use of the Internet in addition to thestandard TV advertisements to promote thecampaign were important but the key was theincreased attention paid to market research.The Brand Vision team formed a new ‘YouthPanel’ to give them insight into their consumerbase and prevent them from ever losing sightof their target audience again. The panelemploys both the most fashion-forward youthsthroughout Europe and mainstream youngmen and women. Research has become
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integral to the business, to the extent thatproducts in line development have beendropped based on feedback, something that‘would have been unthinkable four years ago’.
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