BRAND CONTRACT:The need to stay contemporary, Summary

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Brand Management (MKT624)

Lesson 12

BRAND CONTRACT

The concept of brand contract revolves around brand's ability to always stay up to the

expectations of consumers. Owing to the associations developed with the brands of their

choice, consumers do not want to see those brands deviate from the strong impressions and

image they have about those brands.

What consumers expect of brands is a positive change and development in relation to changing

technologies, environment, and any other factors that may have a bearing on consumer

behavior. To continually remain in favor of consumers, brands uphold consumers' franchise by

remaining up-to-date. This is the only way for brands to remain relevant.

For brands staying contemporary means bringing about innovations and living up to

consumers' likes and expectations. This further means engaging into a "contract". In other

words, brands must respect the contract, attract customers and assume all implications, which

they do through fulfilling the promises.

Brands make promises with the customers by providing benefits and developing associations.

Any deviations lowering of quality, non-availability of brands at the point of customers'

choice, or not keeping pace with changing technologies amount to not keeping the promise

and hence in customers' perception breaching the "contract". The contract, as such, is not legal;

it is purely economic and emotional in nature.

The need to stay contemporary

Because of the fact that we use brands day in and day out, brands are a part of our memories.

These memories are developed over time through a series of brand experiences. The image of a

brand, as such, grows out of cumulative memory, which basically is formed by brand's

associations and persona.

Whereas consumers expect to reap the same benefits always, the expectations they have must

carry an element of contemporariness. To keep brands contemporary, that is keeping them

belong to the present, we have to understand the memory part and the future part as a program.

The memories deal with the past and future is managed through a well guided program that

deals with the present and sets the ground for future evolution. Brand managers must define the

ground where the brand belongs and carve out the territory from where it will grow in future.

Memory is central to understanding how brands function and should be managed1.

The underlying program indicates the purpose and meaning of both former and future products.

We should study brand's history from production and marketing points of view and make them

a basis of our moves for the future. The historical perspective enables us to maintain

consistencies for our future moves.

Consistencies offer smooth transition from one era to another as part of the same program that

continues on a perpetual basis. You never stop working on what is past and what exists as

present. Understanding of the present on the basis of the past gets us into the future free of any

distortions. The result is a strong brand character, which is contemporary in nature.

Through consistency and persistence over time, brands create loyal customers. Brand keeps the

promise and in return customers buy the brand and the contract goes on.

Brand contract requirements

Maintenance of the brand contract is subject to certain requirement. It is not always easy. You

may make a wrong move in trying to improve packaging and the outer looks of the brand that

may fall out of consumers' favor. You may introduce certain features in a consumer durable

product that customers may see out of your brand's character. You may adjust ingredients of

your brand to achieve cost efficiencies, disappointing your customers in the process. Or, you

Brand Management (MKT624)

may just not have the requisite resources to catch up with the latest technologies, thereby

frustrating your customers of your inability to stay contemporary. In other words, there are

constraints in seeing the contract go through at all times.

The brand concept, as a whole, assumes that branding requires internal as well as external

marketing.2 Since brands set their own ever-increasing standards to stay "contemporary" they

need company-wide support internal marketing in addition to external marketing.

External marketing is subject to the quality of internal marketing that is in practice for any

brand within a company. Conviction or lack of it among all employees of the company about

maintaining brand's promise can make or break a brand.

All functions of the organization must converge on one point to lend support to the brand. Only

upon getting that kind of support, the brand contract can be maintained. Following are some of

the requirements:

1. Closely monitor the needs and expectations of the buyer. Carry out market research both

to optimize the existing products and to discover needs that have yet to be fulfilled. This

effort falls within the realm of marketing.

2. React to technological progress as soon as it can create a competitive advantage for the

brand. This signifies that operations department stays abreast of all developments and

plays its role toward maintaining brand's promise. Promise is delivered by keeping the

brand contemporary through research and development in the operations department.

3. Provide both volumes and quality. This requirement again is to be fulfilled by the

operations department to make sure that repeat purchases take place. Insufficient volumes

can undermine loyalty due to non-availability at certain points of sale and quality

problems can jeopardize reputation of the brand and its loyalty.

4. Deliver products to intermediaries (trade members) consistently over time for them to

optimize the role they play in selling the brand. This responsibility belongs to shipping

and sales. Both departments play significant roles in maintaining the vital supply chain.

5. Give meaning to the brand and communicate its meaning to the target market through

advertising, a function that is a hallmark of marketing department.

6. Make sure that finances are available according to the budget and there are no

disturbances in the cash flow of the company. This is a responsibility of the finance

department and also sales that helps the finance department in getting receivable amounts.

Internal mobilization of resources with timely actions lays the foundation for promises to be

fulfilled. All departments and employees have to be an active part of the exercise with a sense

of ownership. A brand belongs to all and is the glory of all.

We can sum it up in the words of Scot Davis, "Brand contract is a set of promises that the

brand makes to customers. It is created internally but defined and validated externally by the

marketplace3."

Summary

Companies should be very careful and honest in understanding their target market first, the

need they are going to satisfy, and the promises they are going to make. Good promises reflect

good features of the product and benefits to customers.

Once used to good benefits, customers expect brands to continually offer those benefits and

address values they endear. Not only that, brands must also stay contemporary to stay relevant

on the scale. It is the contemporariness that upholds the contract a brand offers to its customers.

Upholding the contract is the ultimate win-win situation for a brand. There are certain

requirements that need to be fulfilled for the contract to stay valid in the marketplace. Toward

that, internal marketing and mobilization takes the driver's seat. Rest follows.

Brand Management (MKT624)

Bibliography:

1. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (52-56)

2. Jean-Noel Kapferer: "Strategic Brand Management"; Kogan Page (58-59)

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

Brands"; Jossey-Bass, A Wiley Imprint (75)

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