Brands currently represent the most important capital asset of a company. They generate competitive advantages and, with the right branding, contribute significantly to the success of a company. What do you think of when you hear the names Apple, Dr. Oetker or BMW? You probably associate these with very concrete ideas and emotions. And this is precisely the goal of every manufacturer – to build up and maintain a positive brand image
The attention-grabbing effect associated with brands, however, is attracting competitors. Some of these challengers engage in brand piracy and do enormous damage to market-leading companies. Additionally, a carefully built brand image will suffer from an increased price dumping. Shortly after launch, branded products are sold at online marketplaces at extremely low prices. The providers of these offers are often non-certified retailers (grey market). The more you invest in building up and designing your brand, the more relevant adequate brand protection becomes. In our first installment on this topic, you will first read how you can establish a brand image superior to that of your competitors, as a brand manufacturer employing identity-based brand management.
Identity-based brand management as your basis
Brands are becoming more and more interchangeable in the age of digitisation. The number of brands on offer is growing and consumers are enjoying more and more purchasing alternatives. This makes it all the more important that a brand embodies personality and really stands out from the competition. Many companies reduce their brands only to those key incentives, such as price and technical data – which is a big mistake! The brands here lack a clear identity. This is where Carsten Keller’s 2016 publication “Identity-Based Brand Protection” comes in. To comprehensively protect a brand from access by unauthorised third parties, an identity-based brand definition is required first of all.
Keller defines the term brand as “a bundle of benefits consisting of physical-functional (brand performance) and symbolic components (brand signs), which on basis of the overall design of its components differentiates itself sustainably from the viewpoint of relevant internal and external target groups when compared to competing bundled benefits fulfilling the same basic needs (brand effect)“.
Components of brand identity and the brand image
Keller subdivides brand identity into six core components. The foundation is formed by the brand origin. This can be categorised on a regional, cultural or institutional level. The brand vision defines the long-term development of the brand. Keller describes the human characteristics associated with the brand as a brand personality, which strengthens the emotional charge of the brand. The brand values imply the fundamental convictions of the brand-leading company. These generate authenticity of the brand and are directly related to the brand-benefit promise being offered. According to Keller, brand values thus fulfill a bridging function between brand identity and brand image. Brand competencies represent the action potentials of an organisation for market-oriented leadership and ensure the sustainability of the performance of the brand. Keller also maintains that brand performance is constituted on the basis of brand competencies, brand values and brand personality.
The brand image entails the brand effect upon the consumer. The basis for this is brand awareness. According to Keller, it follows the guiding principle that, “Without knowledge of the brand, there exists no image in the psyche of the customer”. The brand attributes describe the totality of all the brand, buyer and user characteristics of the brand as perceived by the consumer. Following an evaluation and consolidation process about the attributes of a brand, the consumer then associates this with the functional and symbolic utility of that particular brand. Functional usage associations are primarily directed at the physical and functional characteristics of a brand. They explain which basic needs the customer sees satisfied by that particular brand. Today, however, the success of brands is less and less based on these functional characteristics. Instead, symbolic-emotional aspects (prestige benefits) are increasingly becoming the focus of attention. These symbolic usage associations extend beyond purely functional aspects. The idea of an individual or social revaluation, or the altered perception of oneself in the context of brand usage, plays a large role here. The relevance of the trademark also becomes clear. Keller describes this as an “anchor to the brand image” and a “focal point of the brand”.
By designing a brand identity that is consistent over time and attractive from the target group viewpoint, identity-based brand management indirectly manipulates the brand image itself.
Disturbing factors of the grey market and product piracy
In light of the fact that it is becoming technically much easier to imitate trademarks and the increasing importance of symbolic attributes to the customer, brand and product piracy is experiencing escalating tendencies. It has now become a serious factor in influencing brand management. According to the United Nations, the value of counterfeit products traded worldwide amounts to around 600 billion euros. The Organisation for Economic Cooperation and Development (OECD) even assumes that counterfeiting and piracy account for up to five percent of goods imported into the European Union, equivalent to 85 billion euros.
Additionally, there also exist non-authorised distribution channels, the so-called grey market. Here, branded products are sold at low prices by often uncertified retailers. Authentic, original goods are being sold here without the brand owner’s knowledge.
In both cases, brand manufacturers need to be diligent, because the consequences of the grey market and brand piracy can be quite drastic. Manufacturers not only lose the trust of their customers, but also need to reckon with a decline in the value of their brand.
How you, the manufacturer, can still harmonise your brand identity and brand image sufficiently can be read in part two of our series “Brand protection through identity-based brand management”.
In any case, you should take preventive and also active action against unauthorised sales of your brand or trademark. Use the blackbee Channel Monitoring module, maintaining control over your sales channels and monitoring them daily. With a minimum amount of daily time you can preserve your brand and pricing image, as well as increase your turnover and margin at the same time.
Do you need further information on channel monitoring in eCommerce? Contact us now – we look forward to your message.