What is a Brand?
When defining your Marketing Strategy, one of the most important factors to define (if not the most) is your Brand.
Your Brand is who you are; which values are associated with you. And depending on these values, your potential customers could be open to buy your products at a certain prices or not.
Maybe you think Brand Strategy is something for big companies such as Apple, Microsoft or Coca Cola. But you are wrong.
Your “Branding Strategy” must start since the very beginning of your project: even before selling your first product you have to establish which is your main goal regarding “Brand Value”.
If you don't think about your Brand
What happens if you don’t establish a Brand Plan? Your clients will do it for you.
The Market will define your values whether you like them or not and it would be very difficult to modify them.
Building a Brand
Now that we have established the importance of having a Branding Plan, let’s explain how to start creating and associating Values by focusing on 5 things:
1. First of all: Be coherent
We explained this in other units, but it is extremely important.
Don’t intend to have “exclusive” brand values when you are offering a low-quality average product.
It would not work and even more: your clients could think you are trying to spoil them. So don’t do it. Be honest to yourself aiming realistic targets.
2. Augmented Products and Branding
When you buy anything, you don’t just buy the “useful” and defined product you were intended to buy, you are acquiring much more.
The Augmented Product is everything but the “final product” your clients are buying from you:
- The Guarantee you offer.
- How well did you treat your client.
- If you recommended other option more suitable for them.
- If there were any experience unexpected in the transaction.
- If you offer side-products that may complement the purchased one.
It is anything the Customer should not expect from you in addition to the product he is intended to buy.
Popcorn Augmented Product Example
Nowadays it is as normal as it can be, but in the past it was not: Buying popcorns at a Movie Theatre: It is the best and perfect example of Augmented Product.
When you go to the Cinema, you don’t just buy a ticket and stare 2 hours in front of a screen, you usually:
- Go with your friends, family, girlfriend or boyfriend in a “special occasion” (not everyday).
- Get a Coke with a large bowl of Popcorn (sometimes you even buy something else).
- You sit down in a big comfortable “sofa” and start enjoying.
Technically, you are buying just a ticket for seeing a movie, but you really are buying much more.
You must offer something else to your clients, not just “the product”.
*Tip: We will talk about it below, but think about this: ¿How do you think the Cinema is making real good money… with the tickets?
3. Sell Experiences not Products
Don’t limit your offer to side products: think about the Customer Experience as the main Key for increasing your Brand Value.
The Customers tend to remember the good times they spent rather than a certain product’s feature.
It can be the moment while you are buying the product or the good experience you had thanks to that product, but rarely is the product itself.
Travel Experience Example
How much would you pay for a fly to the Caribbean?
How much would you pay for a cigar? (Maybe you don’t even smoke).
How much would you pay for a Roasted Chicken with beans at the beach?
But how about being at Cuba smoking a cigar in the beach while “Compay Segundo” is playing on the Radio?
Separately, these products seem cold and easy to value, but if you put them all together and build and unforgettable Experience, you would start hesitating about how to value them: You now have a story that’s worth telling.
Never forget: a good memory is priceless.
By selling an Experience, you can “charge” side-products or services that are not literally the main product sold but almost indispensable to enjoy the full Experience.
Popcorn Experience Example
Following the previous example, the “Cinema Popcorns” tend to have a price between 5 to 8 dollars (of course, it depends on the Movie Theatre).
Do you think that is a price you would pay outside the Theatre? Of course not. But you are willing to pay it, because a good Movie without Popcorns… is not the same Experience.
Don’t be greedy and start thinking in terms of bleeding the client everywhere. You must offer something good at a fair price, but the more options you have to increase their Experience, the more opportunities you have to make money.
It is a pure Win-Win strategy.
4. Let Top Clients build your Brand
Do you think Louis Vuitton’s Brand value had been created by selling wallets or 100-dollar key-chains?
No. Its “glorious” Brand were built by Top Clients that bought Louis Vuitton’s products, nothing else.
If you were a middle-class French worker and saw that only Top businessmen could buy a leather luggage at LV’s store, you would regard it as a brand for the “chosen ones”: Only the wealthy and powerful people can afford to buy at this shop.
Then, the personal-success values associated with these Clients were transferred to LV’s Brand name.
You must focus on which values you want to be associated with your Brand, and target the Clients that best suit these values.
* If you have not visited yet our “Marketing Strategy” unit within this “Marketing” section, we encourage you to do it before continue reading, in order to understand the Perceived and Real value prices concepts we are about to talk”.
These chosen Clients should be the kind of persons that average potential Customers would like to be.
The products they are usually interested in, tend to be:
- High quality products.
- Highly Augmented (with perfect attention and customer service).
Usually, this results in High Perceived-Value prices, but Moderate Real-Value prices. Summarizing: they pay a fair/low price for what they are really obtaining.
How is that possible? Weren’t these clients supposed to be highly profitable?
Yes, but not: they are profitable regarding their potential of convincing other clients that will give you higher margins, but the margins you will obtain with them are usually reduced.
Top Clients should be the ones buying the most expensive products with the best Quality/Price ratio. Expensive products, not because you increased the price artificially but really enriched augmented products.
Does it mean having good products for Top-Clients and bad products for the rest?
No. It means having: Expensive and exclusive products with low Real-Value prices that are usually demanded by Top Clients and other cheaper products with high Real-value prices that are targeting the massive customers.
These clients are the clients that usually buy Cheaper products, with reduced features and they want the same experience the Top Clients had.
Within this “client segmentation”, you must try to obtain your earnings thanks to the Brand name you acquired with Top Clients.
You will understand it better with an example.
Mercedes vehicles Example
Check the Mercedes catalogue.
Surely, you like their top cars: Impressive 550 hp, 300km/h maximum velocity and 150.000 dollars.
You surely regard a Mercedes, not as a car, but as a Mercedes itself: a good high quality vehicle for wealthy people.
Their top best cars are almost handcraft-made and customized for each client depending on their preferences: an oak tree dashboard, high-quality leather interiors or the best engines in the market.
These cars are very expensive, obviously, but if Mercedes had to maintain its entire infrastructure, its commercial web or its worldwide dealers just for this segment, probably they had to increase the prices even more, similarly to the Aston Martin’s ones.
What do they do? Exactly what we mentioned before:
They offer mass-produced expensive cars at affordable prices where they obtain their largest profits, usually bought by clients that associate their Brand name; Mercedes, to high-class status.
They don’t loose money with Top Clients. In fact, since it is a big and consolidated company, they surely make huge profit out of them. But the “real money” they make comes from low-class massively produced cars.
There is where they use their Brand name to charge you a good margin with “Low” Perceived and “High” Real prices.
* If you compared feature by feature an A-Class Mercedes with a same price Ford car, probably you would be surprised how expensive is really a Mercedes.
5. Brand Prescribers
One common mistake is not to differentiate correctly between Top Clients; that involuntarily act as Influencers by choosing your products, and Prescribers; that actively suggest your products to other customers.
It seems to be the same but is not.
A prescriber is not always a Top Client. They suggest your product to other customers and Top Clients not always do it.
Top Clients add value to your Brand name, while prescribers sometimes can even destroy your Brand name by suggesting your product.
Imagine that your product starts being suggested by somebody completely opposed to your desired values. He would be prescribing your product but not adding value to your Brand.
You should always try selecting Authorized Mass Clients as prescribers, suggesting high-margin products.
What is an Authorized Prescriber? Is a customer, usually with technical knowledge, that suggests actively your product.
Why not considering Top Clients as Prescribers? Because Top Clients usually buy products that almost nobody purchase due to their price and the also the company is not interested in mass selling them.
Nike Prescribers Example
* This is a Top-Client extreme example, of course, but in this way everybody know what are we talking about.
Imagine you frequently go to a gym for training half an hour a day. Not because you are a professional athlete but because you want to keep fit.
In this gym, there is a strong guy that trains almost 24/7 and tries all the “new stuff”: protein bars, alternative trainings, vitamins and energy drinks.
This “strong-guy” grew up with Michael Jordan as his childhood idol: the best athlete of all times.
Nike established a close business relation with Michael Jordan long time ago, and everybody know it. So obviously, our strong-guy’s preferences are somehow biased in favor of Nike products.
Maybe he does not only buy Nike products, but he gives “extra points” to this brand since is the brand sponsoring the very best athletes.
When Nike releases a new good product, this guy always tells you about it: how happy he is about this new product, how good it is…
Nike doesn’t pay him a single dollar for it, but he is loyal to them since he wants to be like Nike’s Top Clients: the World’s best athletes.
And where are you? You always see this strong-guy as somebody that knows everything about fitness, nutrition and sport. You would like to be as fit as he is, and then, always hear what he suggests you.
The different Roles would be as follow:
- Top Clients: Michael Jordan as well as famous athletes.
- Prescriber: the strong-guy that loves Nike products.
- He always dreamt about being a professional athlete.
- Mass Client: You.
- You seriously consider all what the prescriber suggests you since he is much stronger than you will ever be.
Here you can appreciate how this works:
- For each Top Client, there are thousands of potential prescribers, and for each prescriber there are hundreds of mass clients.
How attracting your Prescribers?
Since you are targeting an Authorized Mass Client and not Top Clients, you can offer interesting discounts in Mass Products rather than special customized products:
- Fidelity discounts.
- Discounts on large purchases.
- Special offers throughout the year.
Remember: Top Products can never be devaluated and are reserved for Top Clients.
Marketing Strategy and Branding
How does your Brand affect the overall Marketing Strategy?
Depending on your Brand strength your Marketing Strategies as well as the economic results obtained can vary enormously:
Strong Brand Company
Mass produced products will generate an important Margin for the company, so they can both Penetrate the market and obtain huge Profits of it.
Weak Brand Company
They only can obtain reasonable margins with customized products, that can’t be that massively produced.
Hence, their Market Penetration Strategy only can be at the expense of obtaining reduced margins, and the Profitability Strategy is constrained by manufacturing limitations.
As you can easily observe, when you have a strong Brand name you can have the best of both worlds: Massively manufactured products penetrating the Market and huge Profitability.
You must always create a solid Brand name for your company, or at least try to.
For achieving it, at least you must:
- Be coherent between your Brand image and your product.
- Don’t try to sell a bad product at high price.
- Have an enriched Augmented Product.
- Offer side-products, alternative choices, and customizations.
- Sell Experiences instead of Products.
- Products can be easily compared but not experiences.
- Build your Brand name with the proper Clients.
- Split your Clients in those who increase your Brand value and those who increase your margins.
- Take care of who is prescribing your product.
- As important as the product you offer is who is prescribing it.