Niall Fitzgerald on Branding 2001

Annual Marketing Society Lecture.  London.  19 June 2001

By  Niall  FitzGerald ,   Chairman, Unilever

He was answering criticism that branding is “ hollow” :  a clever technique for persuading consumers to pay more for their goods and that it is artificially  constructed  and  then imposed  on  gullible  public and is more in the interests of the owners than in the interests of the customers.

FACTS  ABOUT  BRANDING

Brands exist because people want them to exist!  Even if  ‘marketing’ had never been invented and advertising  banned, there would still be brands!!  People  need  brands   because  they  help  them  simplify  a  complicated  world  of  bewildering  array  of   ever-widening  and  increasingly  undifferentiated  choices.  People  need   a  navigating  tool  to  consistently  reach  the  same  destination  once  they  have  found  it.  They  need  a  cue,  a  symbol,  a  brand  to  to  quickly  get  what  they   want ,  based  on  their  previous  experience.

Put  a name on a product — brand  it  — and   there’s  (generally)

1.      a guarantee of consistency because there is a custodian

2.      If you like what you’ve bought once, you can buy it again and again. If you don’t like what you’ve bought once, you know how to avoid buying it again.

3.      there’s now someone to go  to  for  redressal  if  anything goes wrong

There are premium brands but they are  not only for the affluent.  In fact, for  poor  people,  they are more important because mistake  even  in  a  trivial purchase  is  a  serious mistake.

PEOPLE CREATE BRANDS 

They  attach  qualities  to  them  and   expect  to  consistently  find /  avoid  them, People  detest homogeneity. They  brand   countries,  communities,  schools,  animals,  streets  and  even  people  by  attributing  images  and  satisfactions  and  personality  to  them  so  that  they  know  what  to  go  for  and  what  to  avoid. A brand  (unlike the product it contains)  is created by, is valued by, and lives exclusively in the minds of its consumers.

5  reasons why brands die : arrogance, greed, complacency, inconsistency and myopia.

ARROGANCE

• You forget that a brand belongs to the  consumers : you  think  it  belongs  to  the  brand managers. You lose sight  that it is the  consumers (not you)  who  invested  brand with its value.
• Then  you  start imposing values that are incompatible with what  matters  to  consumer. Your  brand  loses their coherence  and  consistency.  You  put  the  brand  through  so  much  of  re-launches, upgrades, extensions  and  proliferations  that  customers  cannot  remember  what  distinguishes  you.
• Currently  Levers  is  embarked on a strategy of streamlining and focusing our brand portfolio  to ensure that we can invest in building our strongest brands — those brands with greatest consumer appeal — rather than dissipating energy and resources on brands with limited appeal or potential.
• What’s important is staying connected with individual consumers, and then innovating to meet their evolving needs proactively, rather than confusing them with unnecessary complexity.
• We want our brands to be favorites — first in the market, sometimes second, but not fifth, sixth or seventh — because big brands can innovate and grow for their consumers.

GREED

• You  try  make  your  brands  more profitable  by  pricing  up  or  cost  reductions  but  in  the  process  kill the goose that laid  golden eggs.  You  shave   — a thin slice here, another in six months, a third by the end of the year -  and  each reduction is so insignificant that no-one will notice. Except, of course, people do notice.
• When the price/value equation of a brand gets out of line, sooner or later — and usually sooner — people will notice. 

COMPLACENCY

• Your  brand builds  reputation  and  sits back only to find  faster, hungrier, more innovative competitors  pass  you  by.
• IBM  was  a   technology  company.  Then  they  built  a  good  image  so  users not only respected the  technology  but felt  loyal   as well.  Then  came  the critical stage. IBM  became  so  fixated  with  its  own  idea  of  its  brand  personality  that  it  ignored  competitive product performance.  IBM   neglected to innovate,  to invest in R&D,  to   listen intently for  faint murmurs of discontent.  For  years  nothing  happened  and  IBM  believed it  was  healthy.  Then, with savage suddenness, IBM  began  losing share and reputation.

INCONSISTENCY

A brand is  a trust-mark  and  useful to consumers precisely because it provides a consistent guarantee of quality not  only  in  terms  of  quality  and  features  but  also  in  customer service standards  and  indeed  in  every  aspect of the business.  Today  people  know  not  only  a  brand  but  even  its  manufacturer.  Consumer  movement  is  growing. Employees, consumers, governments, suppliers, shareholders and the media not only take an increasing interest in every aspect of a company’s activities, they also have the means at their fingertips to find out everything about them. There is no more certain way to damage your brands than to be seen to have double standards. If there is not clear congruity between brand values and corporate values, both will suffer irreversibly. This has important implications for brand management. With the reputation of the entire corporation increasingly impinging on the reputation of each and every brand — and vice-versa — the responsibility for the management of brand reputation lies at least as heavily with the chief executive as with the company’s brand managers.

MYOPIA

• The traditional image of brand communication is a strictly one-way affair.  This, of course, is a highly simplistic image  but  even  then  the  consumer  challenged, interpreted, disputed, modified  or rejected  such  one  way  messages.
• The way in which consumers form their opinions of brands is increasingly complex. Companies may distinguish between main media, promotions, public relations, sponsorship, product placement and the Internet — consumers make no such distinction. To them, every brand encounter helps build up a mental picture of the brand — whether it’s a planned and paid-for piece of brand communication or a chance encounter of a different kind. They may read disturbing reports of a company in the newspaper, see its trucks being badly driven on the motorway, be infuriated by incomprehensible instruction leaflets, be driven mad by the company’s call centre, receive graceless and misspelt letters from head office.