Brands are another VERY BIG topic and there are vast volumes of knowledge about brands, brand development strategies and brand management. I can only offer you a glimpse of this very important subject here. Apologies to the advertising and marketing professionals reading this for my gross over-simplification!
In the past, brands were limited to the domain of fast moving consumer goods (FMCG) where there were large advertising budgets to reach enormous markets of potential customers through mass media such as television. Research showed that the market leader (usually the leading brand) enjoyed superior profits.
This is because people will pay a premium price for a brand – which could be due to higher quality of the actual product but is usually down to some aspect of the perceived (association or aspiration) value. Think about tea bags – these are a commodity product yet the cheapest no nonsense version retails for around 40p yet people will pay up to £2.99 for the brand leader. Think about the trainers you wear – did you pay extra to be part of the Nike, Ellesse or Adidas fraternity? Did you pay extra to allow your footwear to say something about the sort of person you are or aspire to be? You do not buy trainers on the basis of rational choice – there is a whole load of emotional stuff going on. The essence of branding is that it confers some form of differentiation to your product and service – which justifies a higher price.
Yet things moved on. Brands become relevant in other markets – in white goods (fridges and hoovers…ooops…vacuum cleaners (an example of a brand becoming a generic name!), then in financial services and then in industrial markets. Remember the saying “No one ever got fired for buying IBM”? This touches another important aspect of brand – it reduces the risk for the buyer as they perceive that the quality will be consistent. The brand is a kind of short hand that gives some confidence and reassurance to the buyer.
So it is important to understand what a brand really is – in the professions it is often confused with an organisation’s logo, corporate identity or visual representation. Yet it is so much more than this – particularly in a service environment where every individual in the organisation is effectively a walking talking “Brand Ambassador”.
Two leading academics define the brand as follows:
“A successful brand is an identifiable product, service, person or place augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in the face of competition.”
Now think about the great brands in professional services marketing – Andersen Consulting/Accenture, PricewaterhouseCoopers/Monday, Slaughter & May, Olswang, Jones Lang Lasalle, McKinsey, Tom Peters? You associate these firms with a particular culture and style of operation. You believe that the individuals there will operate in a consistent way. The brand values – from its visual representation, to its premises, its strategic positioning, its clients, all the professional and support people and its entire way of working on a day to day basis – are communicated, reinforced and delivered consistently. This confers a degree of differentiation from the competition that is hard to copy and justifies the higher prices (and higher profits) they command.
The goodwill tied up in a reputation of a professional firm is one of its most important intangible assets – and there are various ways to measure this goodwill so that it can be bought and sold in the mergers and acquisitions we see so often in the world of professional services.
So asking whether brand is important to the professions is like asking whether organisational culture is important to the professions. I am a firm believer in the power of brands in the professions for anyone who wishes to compete on anything other than a cost leadership basis – but I am very keen to hear of your views if you disagree!
I do not restrict access to the FAQs but I politely request that you let me know by email and acknowledge the source (www.kimtasso.com) if you wish to use the material anywhere.
As always, if there are particular topics you would like me to address in the future, please let me know. You will also find a source of more and up to date information on a broad range of management and marketing issues in the professions by checking out the blog where I also post regular reviews of books that might be helpful.