BRAND CONTRACT:How to create a brand contract?, Brand contract principles, Understand customersâ€™ perspective

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Brand Management (MKT624)

Lesson 13

BRAND CONTRACT

How to create a brand contract?

The objective of this lecture is to learn how a company should go ahead with creation of a

brand contract in a way that its brand gets duly leveraged

The key to developing the contract lies in making the promises known to customers. The more

customers are knowledgeable of the brand's promises, the more they are inclined to be bound

into a contract. A customer bound by a contract is a loyal customer.

Promises present themselves in two different forms implicit and explicit. Implicit promises

are taken for granted, that is, customers must see those delivered whether the brand talks about

those or not. Tea is an excellent example of carrying implicit promises of smell, color, and taste

regardless of what brand name it carries. Any good brand of tea has to have the features

mentioned in the example.

Some promises are explicitly claimed through well-designed communication. A personal

computer with features relating processor's specifications, the size of the hard disk, and the

capacity of the random access memory (RAM) have got to be communicated very specifically,

not left to customers' imagination. Any promises that the company makes but cannot deliver

amount to a breach of the contract.

A brand contract may also contain some negative promises that must be eradicated from the

contract. Negative promises creep into the contract due to company's inability to address

certain problems or challenges. One example of negative promises can be of an automobile

company falling short on its promise of 3S sales, spares, and service. If the company cannot

cope with the challenge of maintaining free availability of spares at affordable prices, the

company has unintentionally brought a negative promise into the contract.

As another example, think of a cellular phone company that may talk a lot about efficiency of

service, low rates at particular time of the day, and many other options to its subscribers. If the

service cannot catch up with the growing demand of customers by way of frequency distortions

or non-connectivity, then the company has definitely brought into the contract a negative

promise.

The two companies (car and cell phone) have to fix the negative contracts and then prove they

no longer deprive the customers of their needs or inflict the service. Powerful brands have the

resilience to bounce back if corrective action is taken in timely manner.

Need for upholding the contract

Unless the breach of contract is fixed, the brand will suffer in sales, in image and spoil other

programs. To make the contract complete and effective shortcomings have to be removed.

A hypothetical brand contract

With the understanding of mechanism of a contract, we can proceed toward hypothetically

creating a brand contract of the fast food company we discussed earlier. This company has

decided to talk about all the relevant promises on the package of the product. The terminology

of "contract" is very intra-company and is not used when it comes to communicating with the

market. Although not using any head is generally the norm of the market, this company has

chosen to label its promises under the head of "product integrity".

· The company promises to offer you world class quality of meat, and a compatible level of

quality breads.

Brand Management (MKT624)

The company maintains all the critical control points involved in maintaining the minus

20-degree temperature for its meat ingredients. It makes sure there is no bacterial growth

in the vital ingredients.

· All other condiments have been selected with the sophistication of a world class chef for

your eating pleasure.

· Our kitchen is immaculately clean; if you were to see that you not only will overindulge

in eating but also recommend our sandwich forcefully to others.

· We undertake to deliver the order within 30 minutes.

· Our staff is efficient, skillful, and courteous who deliver on time with a smile.

· We claim to have revolutionized the lunch service unique product that couples efficient

service, and hence offer you a unique experience.

· The value for money that we offer is second to none. Compare our prices with those of

competitors.

As brand manager, you may like to retain the above promises as they appear, discard a few, or

make adjustments in line with the dynamics of the market. Even if you do not wish to

communicate the above contract on the package, you must have this as guidelines for your own

staff. Keeping all employees mindful of what the company wishes to deliver amounts to

strengthening their commitment toward the product and stands as part of the internal marketing.

Brand contract therefore represents total consensus and commitment on everyone's part.

Since the contract is validated by the market, it is important that the market is adequately

educated on all the promises and the factors that make those promises deliverable. Should the

customers find the promises fulfilled, the contract stands upheld.

Promises change with changing strategies and circumstances. The fast food business started as

lunch-time delivery service. Assuming that the service has been successful, the business would

like to expand itself by creating small restaurants. The induction of restaurants will bring a

change in promises, which may look like the following:

· Our restaurant is a modern, utility based set-up. No frills, no make-ups, straight forward,

down to earth atmosphere and pricing make it an experience of a life time!

· The atmosphere is friendly, warm, and home-like in the real sense of the word.

· Our preparation procedures are highly industrialized, that is, we do the same thing again

and again to maintain standardization.

If customers feel the same kind of satisfaction from their product and service, it is a reflection

of the brand contract that the management has created. That wins customers' trust and gives the

brand value and power.

Brand contract principles

There are four basic principles that we use in creating a contract1. The principles are pretty

straight forward. Use the same market research that you used for brand image exercise. Add a

few more questions and the model for research is ready. Never forget to include competition in

your research projects. Without comparisons, you may not come up with the best contract.

1. Understand customers' perspective

Go back to the sandwich project and see the kind of questions you should ask:

· In purchasing our sandwich, what benefits you expected?

· Did it meet your expectations? If yes, how? If no, why?

· Tell us the most important aspects of product quality taste, freshness, smell, size,

filling, and overall presentation.

· What promises our brand makes?

· Do other brands make different promises? If yes, how?

Brand Management (MKT624)

What really triggered your decision to buy our brand and do you see your decision

worth making?

· What is it that we can do more to improve our service and product?

The basic objective is to make this exercise customer driven. You must take into account

the opinions of the key purchase influencers. Be ready to face a few negative comments.

Fix the situation if the comments make sense.

Bibliography:

1. Scot M. Davis: "Brand Asset Management Driving Profitable Growth through Your

Brands"; Jossey-Bass, A Wiley Imprint (79)

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