BRAND CONTRACT:Translate into standards, Fulfill Good Promises, Uncover Bad Promises

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Brand Management (MKT624)

Lesson 14

BRAND CONTRACT

Brand contract principles

The remaining three principles are discussed in this lecture.

2. Translate into standards

There are a host of activities that are to be undertaken before you put a product together.

This implies you are putting together different promises. Not one department is involved

in carrying out a task that is as comprehensive as putting a product together. The

numerous activities, therefore, have to be standardized by ensuring optimal and accurate

input from every employee of all departments, starting with purchasing right through

production and selling.

Well-coordinated actions will result from standardization of activities and lead to meeting

promises as made. If we go back to the example of sandwiches, all actions involved from

product preparation to delivery have to be standardized under a common set of guidelines

production, delivery, sales, and transportation. One action out of the standards can land

the company into trouble by affecting one or a set of promises the company has explicitly

made with its customers.

All standardized actions are the touch points brand management has with other functions.

They must converge, so that you can uphold your contract. Any lapses at the cold storage

in terms of maintenance of the requisite temperature will lead to abuse of meat quality.

Inefficient transportation of ingredients may cause delays in preparation and delivery of

product. Lack of training of staff may not keep the service as pleasant as the company

may claim. These possibilities exemplify the need for all to work like a cohesive whole in

which all actions are repeated accurately according to standards day in and day out.

3. Fulfill Good Promises

Once standards are in place, it is the job of managers to develop a standards-compliant

culture. Such a culture keeps all checks in place and prevents people from omitting major

as well as minor tasks. Companies should not become complacent at this juncture and

leave things to juniors or chances in the hope that all systems are being followed. Systems

and procedures being in place is no guarantee of compliance of standards. Strict

adherence to procedures is even more important than constituting those procedures.

Execution is gaining more and more importance nowadays even more than strategies.

Management must involve itself to ensure adherence of all procedural tasks to the

standards for fulfillment of promises.

Fulfillment of good promises, at times, escapes attention because management is shifting

its business strategy. Shift comes in shape of expansion of business, a major change in

distribution, or entry into a new line altogether. It is here that commitment of

management as part of brand vision counts. The example of business expansion through

adding restaurants to its line expresses this phenomenon. The company has to ensure that

existing good promises keep getting translated into benefits and the new ones get

absorbed into the basket of benefits offered to customers.

In case of a new offer, if the new line is pursued in more enthusiasm than the promises of

the existing brand require, then you may damage your brand.

4. Uncover Bad Promises

Through a consistent contact with the marketplace and through research studies, one can

easily uncover the negative promises. Once uncovered, the strategy to fix those and turn

Brand Management (MKT624)

them into good promises should not be difficult. One must convert the shortcomings into

strengths.

Summary lecture 13 and brand contract part of lecture14

Brand contract is a function of promises made and fulfilled. Companies have to be very careful

in making promises, for the promises not fulfilled turn into negative promises and can

undermine the brand's reputation.

The whole company should be involved while it puts together the promises to be delivered, for

that constitutes upholding the contract. There are four fundamental principles that guide us to

develop a brand's contract. First of all, we must understand the customer's perspective and then

get on to developing features that are full of promises. We, then, should move on to developing

standards for delivering the promises and follow that step with fulfilling good promises. We

must not forget to undertake an effort to unearth any bad promises that the contract may carry

with it.

In short, understand the good promises. Communicate them to customers, identify new

promises that may improve the brand contract, uncover the negative ones, fix them, and then

develop brand contract.

CRAFTING A BRAND-BASED CUSTOMER MODEL

The intention of developing a brand-based model is to understand the beliefs and behavior of

customers. This understanding leads us to determine why customers buy what they buy. This

also makes us understand buyers' underlying motives for taking the decisions they take to buy

brands of their preference. With the intention to win over customers and retaining them over a

long period of time, we study their purchasing actions toward our brands and those of

competitors.

The behavior of buyers goes under a change with changing circumstances. And, so do their

beliefs. This evolution dictates that brands also change and correspond to the changing

behavior of buyers. It is for this reason that brands also are kept contemporary so that they can

respond to customers' evolving behavior. If a company does not do that, competition will take

over.

In an attempt to keep customers loyal and to prove that their needs and beliefs are paramount,

companies innovate and achieve differentiation. Since everyone follows the same thinking,

innovations become market standards and all competitors follow suit with similar brands of

good quality. Eating into the area of differentiation, competitors try to erase the advantage that

your brand enjoys. This becomes a challenging question for brand managers, who have to have

an answer to this challenge.

The model should conform to value pyramid

The answer lies in making your brand so powerful that customers can emotionally relate

themselves with it. Brand at the top of the brand value pyramid conforms more to a brand-

based model. Staying at the pinnacle of the pyramid involves the process of continuously

renewing the brand difference. This renewal rejuvenates the brand and keeps it contemporary,

and, hence, stays as the basis of customer preference.

Continuously renewing the difference makes your product more acceptable, for it is perceived

as the one conforming to the changing behavior and beliefs of customers. In most of the

consumer products categories, the percentage of customers who are loyal to just one brand is

not very high, and that places good brands with differentiating and evolved features at a fairly

decent level of acceptability. Figure 20 testifies this phenomenon1.

Brand Management (MKT624)

The higher the percentage of

U s e rs L o y a l to O n e B ra n d

loyal customers to just one brand,

In p erce n t

the more sensitive is the decision

Figure 20

to bring about a change in that

brand. Those who smoke will

agree that a change in package

design of a cigarette pack may be

58 61 65

44 44 46 47 48 53

perceived as a change in the taste

33 35

profile of the smoke. Such a

perception may throw the brand

out of consumers' favor. Loyalty

to one brand in the category of

cigarettes is the highest 71% as

per the above graphics.

P ro d u c ts

Conversely, changes in fashion

Source: W all Street Journal October 19, 1989

jeans may provide brand

managers with opportunities to gain more customers, for not more than 33% of customers are

loyal to just one brand. This also makes room for other brands in the market. Continuous

rejuvenation of brands is important so that you can stay within the favorable limits of the

customers who look for points of difference.

Three primary questions

The brand-based model answers three questions relating how and what sides of customer

decisions2.

1. How do consumers choose one brand over another?

2. How does your brand stack up against competition?

3. What opportunities exist for brand growth and expansion?

Question 1

To answer this question, we have to be clear about three factors:

a. We must know what customer buying criteria is

b. We must rate that criteria

c. We must know who makes buying decisions

Factor a - customer buying criteria

The criteria for buying relate to all attributes that a brand carries with it.

Most of the attributes are price, easy availability, convenience, quality, good history,

innovativeness (for manufactured goods), consistent performance, fit with customer's

personality, good relationship at personal level, good representatives, past experiences,

length of relationship, and advertising to name a few important ones. These factors have

been cited in most of the consumer research models and, hence, should be taken seriously.

Customer-friendly attributes generate trust among customers. Trust runs across all the

attributes that create it. If customers believe in the quality of your brand, they will

perceive the price right, believe it will give them consistent performance, and develop a

good relationship with the brand. Trust implies that customers know what they are going

to buy and therefore needs to be built.

Bibliography:

1. Geoffery Randall: "Branding A Practical Guide to Planning Your Strategy";

Kogan Page (41)

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

Your Brands"; Jossey-Bass, A Wiley Imprint (93)

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