marketing: in a new world

Marketing is the invention of the 20th century, and for last 80 years, its goal has been to infiltrate consumers’ mind and change their thinking. Since the beginning marketing’s goal has always been to build the relationship between buyer and seller. This relationship is more important in this ever dynamic business environment. Today, technology is playing an important role in building a better buyer and seller relationship.

Caught in the interlacing Web of interrelationships, traditional marketing is evanescing for simple reason that its tasks are being automated and assumed by the mysterious and hidden power of information technology. All traditional marketing functions are replaced by the technological functions by creating an impression that marketing has turned out to be a technology.

Origin of Marketing
Marketing as an element of business originated in early 20th century, but its roots reach back to the industrial revolution. It idealized the importance of relationship between producer and consumer. McKenna says development of marketing has gone through three distinct ages viz., the age of reach, age of push and age of total access.

Age of Reach and Age of Push
No one knows who first coined the term ‘marketing’. In early 20th century, marketers identified the term with distribution, wholesale and retailing. Later in 1920s Procter and Gamble established ‘Brand management system’, which can be identified as a period of branding at very same time Edward Bernays was working on the concept of ‘Public Relation.’ The 1950s has established and popularized the concept of 4Ps which was followed by segmentation, mass production and mass marketing.

Role of Technology in Marketing
Technology has always played an important role in the development of marketing. In early 20th century, development of rail-roads and Henry Ford’s invention of ‘model T’ has helped companies reach their customers better and faster. In 1920s, Radio emerged as the major technological breakthrough to create a perception that marketing as a function can change consumer behavior. It remained an efficient broadcast medium for two American generations. Post World War, Television came in as a new technological development changing the marketing landscape. Post 1950s, advertisers relied more on television than radio; This new push medium has consistently influenced viewers with a repetitive, consistent and entertaining message. This helped marketers change consumer behavior from ‘I need factor’ to ‘I want factor.’

Total Access
Just like an era of reach and push, new technology, new marketplace, new consumer and competition are once again changing the assumptions of customers and marketers. Now customers are telling what they want companies to do instead of companies suggesting their customer what they need. Total Access is not a broadcast model. Rather, it is an environment where consumer experiences multiple and simultaneous competitive buying opportunities. Internet is seen as one of the greatest technological innovation of the last century. It has made availability of information easier and cheaper. Internet has successfully laid the seeds of Total Access which flourished with mobile technology. Mobile market has improved customer’s comfort level and once again changed the customer behavior. These two technological break throughs have not only changed customer behavior but also changed the way market behaves. It is evident from the changed classification in era of Total Access. In the era of Total Access, customers can be divided by four parameters—the information explorers, the information active, the information followers, and the information passive. Technology has changed at an unprecedented pace in the past few decades. It has changed business landscape many a time in last twenty-five years. It has enabled farsighted business to outpace their competitors by creating new products and services, by managing business process and by operating business more efficiently. Law governing these technological innovations is also seen as the law of new marketplace.

Every business is wired today, marketers and academicians in this increasingly networked business environment is writing the new rule of marketing. These new laws of marketplace are playing on important role in developing marketing strategies.

Branding Lost its Meaning!
The marketing function disappears into a network of relationships and responsibilities between man and machine throughout the value chain. For marketers, the end goal changes from creating brand awareness to satisfying customers. In today’s network economy, brand itself becomes a ‘persistent presence’ which sustains the customer dialogue whenever the customer chooses. Branding is all about customer loyalty. It is always seen as a result of customer-producer relationship. In the era of total access, this relationship is becoming more transactional than personal. In total access environment, many consumers will choose a brand for pragmatic reasons rather than emotional. The ever changing marketplace and shifting consumer loyalty is creating challanges for producers. Few of the challenges for producers are:

Changing Symbol: Technology has changed the way people perceive things, which in turn, has changed business practices. Today, ATM has emerged as a symbol of trust in consumers’ conscious mind replacing old economy bank infrastructure.
Impact of Technology: Building brand in technology business is building alliances and relationship. It is seen that in technology market, developing brand is all about developing industry standard.
Hidden Choices: The component of the end product is mostly unknown to the end consumer. Consumers often do not know with which producer they are dealing with. Intel and Visa are the diffusion distributors of Dell, Compaq, and Bank of America. The erosion of brands has evolved from technology, social and cultural influences. An easy access to information and power of choice has converted one-time “brand loyal” to “brand switcher”. Today, consumers have choice to select from wide variety of offerings, hence user preferences vary from situation to situation. In the last two decades, consumer preferences have changed.

Few people confuse preferences with values. Preferences change with time and vary widely with the changing social and economic context of a particular market. It changes with changing technology, but values do not. These changing preferences give marketing a new dimension of mass customization and self service. The business is looking for lasting market presence and sustaining brand. There are two keys to it: Point of access and marketing architecture network.

Persistent presence
Market is changing its dimension at the speed of thought. This dynamic change is changing consumer’s preferences and perceptions. Today, every business has persistent presence. In fact, in this competitive market, it is a must for the very survival of any business. Persistent presence is consumers, consistent and reliable experience with the producer or retailers. A logistical system that focuses on operational system and communicational system of any company is the backbone of the persistent presence. Natures of business, market condition, company’s competitive position are few of the factors which help any company in achieving persistent presence. It is possible in many ways:
• Presence through digital network e.g., ATM, e-broking
• Physical presence: Location, Access e.g., Starbucks has more than 3,000 points all over the world.
• Embedded presence e.g., Intel
• Presence through services e.g.,E*TRADE, Yahoo!, Citibank

Company can establish persistent presence in many ways. It all depends on the nature of the business and environment the company is operating in. McKenna suggests a few key points to establish persistent presence:
• Market Architecture Approach to Total Access e.g., Dell, Wal-Mart
• Beef up your customer’s support infrastructure e.g., Coca-Cola
• Think Total Access e.g., AOL as a total Internet venture to AOL as an entertainment and media company which provides total access option.
• Invest in Time, Money are customer Relationship e.g., CRM initiatives

The Market Architecture
Market architecture is the functional relation of inbound and outbound functions. In transactional working environment with shortened product life cycle, changing technology and shifting channels, and increased competition, marketing architecture has become dynamic. Apart from technological innovations, human interactions also play the key role in defining marketing architecture.

Shared Creativity: In the B2B market place, to gain market share, companies work closely with their customers to know their needs and demands better. Few of the innovations driven by customer needs are Apple II personal computer, Microsoft MS-DOS.

Keeping Customer Trust: To build or sustain customer trust, marketing architecture must perform as per acceptation of the customer and respond consistently to their queries and problems. Business earning customer trust can retain it either by meeting or exceeding expectations.

Nurturing Change: The Organic Factor- Marketing architecture is dynamic. The ability to respond to the new customer information and changing business and social need is yet another important aspect of marketing architecture. IT is playing an important role in the development of dynamic marketing architecture, and also in the relationship development between the producer and consumer. In a situation, when information related service has shifted from retailers or distributors to producers enterprise architecture approach in marketing becomes important. Marketing architecture by learning how to better interact with itself in response to the environment and in connection with the customers’ needs and wants. The important factors for successful marketing architecture are: Customer satisfaction, developing different channels for different needs, identifying value of connected partners, and developing the strategic framework.

Total Global Access
Internet has changed the definition of the market infrastructure. Effective communication and transport methods have narrowed down the gap between the supply and demand time giving a new dimension to the global marketing. Growth in market economies, deregulation, privatization, and new global consumers has all created a new global market.

The focus in this wired world is changing from ‘think globally but act locally’ to ‘act globally connect locally’. World Wide Web helps business in connecting all channels. It also connects people across border and helps them come closure to market and increase their interaction. Internet has helped developing total global access environment. With total global access, it is felt that the world has become more culturally diverse. In this changed business circumstances, marketing executives need to take a comprehensive world market view to respond to increasingly competitive environment where customers have access to all possible information and are looking for local source and solutions. This global connectivity has increased with mobile commerce giving birth to a new set of consumers, ‘mobile global consumer’. The global e-commerce is focusing more on establishing global persistent presence and developing global brands.

Roles and Responsibilities
The rise of Internet and total access has created a self service model for marketing known as ‘production by masses’. This model works by providing customer with information database and allowing them to design their expectations consistently and reliably.

The rise of Internet and total access has made marketing as everyone’s job. It is the matrix of responsibilities shared by—CEO who is seen as chief strategist, who also work as a chief marketing executive of the organization. He integrates all the resources that enterprises need to invest and design to build a global infrastructure strategy.
• CIO is seen as chief total access architect. He possesses required skills, to be the interface between the customers’ needs and company’s response.
• Director of R&D is seen as the chief novelty officer. Customer preferences change fast in total access era and it is the duty of the Director, R&D to come up with innovative products.
• Vice president of operations and logistics helps meet customer delivery expectations.
• Vice president of marketing takes care of demand and supply factors and other traditional marketing functions.

Corporate Creativity
Market impatience, competitive intensity, volatile market reaction and high expectations from customers and investors are few of the factors which have created competitive environment. In this competitive environment, to gain edge over other players, companies have to work on corporate creativity. More creative the company is throughout its entire enterprise, the more successful the company will be in sustaining the growth.

BOOK SUMMARY
Book: Total Access, Giving Customers What They Want in an Anytime, Anywhere World,
Year: March 2002
Author: RegisMcKenna
Pages: 240
Publisher: Harvard Business School Press

A New Brand World – Book Summary

A New Brand World

Bedbury, who headed advertising and marketing divisions of Nike and Starbucks during their phenomenal growth, argues that now is the time to build a brand that evokes trust among its customers. In A New Brand World, Bedbury draws from his extensive experience and provides practical advice to develop brands to their full potential and build lasting value. Bedbury sets out the principles that helped these companies become leaders in their respective industries and offers battle-tested advice for keeping any business at the top of its game.
Scott Bedbury was instrumental in developing global brands like Nike and Starbucks. A New Brand World extensively covers inside stories on Nike and Starbucks and presents lively anecdotes from the experiences with most of the global brands like Harley-Davidson, Microsoft, Disney, and Pepsi.
Bedbury’s book is a solid refutation to The Fall of Advertising and Rise of PR written by Al Ries and Laura Ries. Ries partners argue that so many ad dollars yielding such uninspiring results mean that advertising is ineffective; however, Bedbury has a different idea on creating and developing a brand.
He says, “Unless your brand stands for something, it stands for nothing.” Bedbury’s words effectively convey the fact that it is time to build a strong brand that evokes trust from customers. Brand building is more than a responsibility of marketing managers or CEOs. Bedbury says that building and supporting a brand is everyone’s job—from CEO and down. Brand building becomes more important in current business environment for three reasons:
• To win customer trust and love.
• Brand is the only asset which can’t be copied and outsourced.
• Recognition in society.

Bedbury proposes eight principles for ‘A new brand world’.
Principle 1: Relying on Brand Awareness has Become Marketing Fool’s Gold Brand awareness and recognition have lost their significance in the changed business environment. Bedbury believes that brand has a karma, which in his view, will emerge as the ultimate definition of brand strength in future.
What we experience in our daily lives is the idea of that thing, which gives it lasting meaning—this is the fundamental essence of branding. A brand is the result of a psychological process. Branding is about taking something common and improving upon it in ways that make it more valuable and meaningful. Today, who doesn’t know of Nike and Starbucks? Sneakers were sneakers until Phil Knight came along to brand them as a sports and fitness product and coffee beans were just coffee beans until Howard chuitz branded them. These brands stand successful even today because they consistently evoked (and are still evoking), positive feelings with each new product, service, or marketing campaign. Bedbury says, “Brands are living component that we hold in our mind for years. What goes into them is both logical and irrational.” He adds to it by saying, “Products and services will continue to come and go. But, the residual experiences of customers who consume them will ultimately define the brand.”

The journey of most of the successful brands started with the focus on building a profitable product or service and an organization that can sustain the product. If the product or the service in offer has no great attribute, no amount of advertising will help. Bedbury comments on the situation, “Even the best advertising cannot create something that is not here.

Table 1
Brand Brand Mantra
Nike Authentic athletic performance
Disney Fun family entertainment
Starbucks Rewarding everyday moments
Chrysler An engineering company
Apple Computer Daring to be different

Principle 2: You Have to Know it Before You Can Grow it No two brands are alike. Every brand has in its core a substance that gives it strength. The management needs to understand the core substance —‘Brand-DNA’ before they grow the brand. Brand DNA defines the source of strength of the brand. Better understanding of DNA helps to grow the brand in future. Brand DNA is not the only key; every brand has brand mantra—an essence and ethos which defines product and company to the core customer. It is the touchstone that helps companies in shaping products and services, how they conduct their business. It has provided a useful mechanism which concisely expresses brand’s ‘generic code’. The wonder term ‘Brand Mantra’ was originally coined at Nike. At Nike, brand mantra is ‘Authentic Athletic Performance’ (Refer Table 1).
Branding must start inside the company before taking the flight to the undisclosed horizon of the turbulent world. If everyone in the company knows and understands what the brand is all about, then it will become easier to communicate that message to the world at large. Bedbury comments, “Though it is important to demonstrate consistently to the outside world that you know what A New Brand World your brand is (all) about, ultimately, it is even more important first to demonstrate this internally and to continue to do so at every opportunity.”
Principle 3: Just Because You Can, Doesn’t Mean You Should To survive in the market, business needs to grow. One of the ways to grow is to broaden the company’s brand portfolio. This calls for striking the right balance between the necessity of growth and the need of brand preservation and conservation. Brand preservation and conservation in this changed environment have become the main challenges of all brand managers. The managers should always be diligent about assessing the impact of additional ‘brand-width’. Bedbury proposes six methods for building intelligent brand-width:
• Co-branding and strategic alliances
• Brand extensions
• New distribution channels
• Excel product categories
• Sub-branding
• Acquisitions
Growing and nurturing any brand is a continuous process. Bedbury proposes three things, which the managers should avoid while growing a brand. First, he suggests that the marketplace in this era is dominated by customers who are information seekers. This has increased the competition in the marketplace, where if you lose sight of your customer’s changing needs, you are out of market. Second, never ignore the impact of “profit improvement programs” on your brand. And third, it will be foolish on the part of companies to expect success in one business field to guarantee success in another (Refer Table 2).
Principle 4: Transcend a Product-only Relationship with Your Customers Harley-Davidson owners don’t just buy a Harley; they have also become the proud owners of the HOG (Harley Owners Group), which is bound by ethos and shared set of values that cross many social and economical strata. Emotional potency gives the proud owner of any great brand (not only Harley-Davidson) opportunities to leverage a brand. It has been proved, time and again, that the great brands always fulfill the emotional needs of their customers. It is believed that the more skillfully marketed product captures a better emotional state of the target group. In fact, there are arguments that the successful brands are ranked higher on Maslow’s scale of needs, like Volvo uses security and BMW focuses on status.
Principle 5: Everything Matters “Brand environmentalism means accepting the responsibility to protect your brand and present it in the best possible light whenever and wherever it may be found. It means undertaking a commitment to constantly improve and safeguard the integrity and associative value of everything that surrounds the brand in all phases of development,” says Bedbury. Brand environmentalism is of critical value to any organization. At Starbucks, brand environmentalism is seen as its greatest strength.
Principle 6: All Brands Need Good Partners The human form of branding is reflected very well in the growth of branding. Both brands and small children flourish in an inspiring and learning environment where they are appreciated, respected, protected, and sometimes rejected, when not performing as per acceptation. Brands are not only influenced by people, they also influence people.
Table 2
Strategies Examples
Co-branding and strategic alliances
• Pepsi-Yahoo!: In this high profile co-branding effort, Pepsi agreed to promote Yahoo! on 1.5 billion bottles and displays at some 5000 stores nationwide. In turn, Yahoo! agreed to promote Pepsi’s product on the all-new co-branded website, ‘Pepsistuff.com’.
• Starbucks-United Alliance.
Brand extensions have proved lucrative in many situations (Today, it is a separate here is that every brand has its limitation).
• People initially emerged as a section of (The point to remember Time Magazine publication).
• Frappuccino, bottled and blended in the café, ‘Starbucks’.
New distribution channels—The catch is analyzing core product positioning before taking a brand in new distribution channel.
• Starbucks started selling its own branded line of espresso.
Excel product categories—Leveraging core brand strength.
• Caterpillar licenses its brand to the shoemaker Wolverine WorldWide, which markets Caterpillar boots.
Sub-branding takes a subset of the qualities of the original brand to establish a new brand.
• Miramax, a sub-brand of Disney.
• Lexus, a sub-brand of Toyota.
Acquisitions to acquire company’s brand value.
• Success: Chrysler acquired Jeep.
• Hiccups: Daimler acquired Chrysler.

As brands evolve over time, they absorb the environment and karma of any organization. If developed and nurtured well, they can be the only constant in the organization development. The responsibility of developing brand can be shared by the CEO and front-line employees. Though the importance and layer of operational efficacy is different in both the cases, the contributions are equally important. The CEO represents the brand at higher level of business pyramid i.e., investors, stockholders, and media. Front-line employees hold strongly the bottom of pyramid, i.e., the customers. They come face-to-face with customers and, in many ways, they epitomize and personify the brand for most people.
Though the committed CEO and frontline employees do their part of job sincerely, the creative staff remain critical for the customer mind penetration. The creative staff like product designers and copywriters should work on three key attributes:
• Concise—No more than two pages; one, if you are really good.
• Tight—Containing two separate focused statements, of where the A New Brand World business and the brand are today and where they must be tomorrow, in order to achieve success.
• Loose—Let them figure out how to get there. Though branding is the responsibility of everyone in the organization, there should be someone (preferably one) accountable for brand strategy. The company should have, preferably, one promotion department and one agency to deliver the promotional needs of brand (Refer Table 3). In the current situation when companies run more complex operations than their predecessors, the role of the CEO is more critical and challenging. It calls for the new position—Chief Brand Officers who manage the branding initiatives and coordinate with the CEO.
Their job includes:
• To review brand-sensitive research and insights.
• To review the status of key brand initiatives.
• To review brand-sensitive projects.
• To review new product and distribution strategy.
• To resolve brand-positioning conflicts.
Bedbury comments, “In the New Brand World, companies that aspire to distinguish themselves above all others must spare nothing in their leadership effort to make everything tie together, to make everything they do a refreshing extension of something timeless and valued, and to do it where it matters most—even if it means turning the entire enterprise upside down.”

Table 3

Brand Brand Form of Emotions
Kodak Idea of family
Disney Idea of family
Guinness Place of heart; culture
PepsiCo Emotions and Necktie products
Snackwell’s A mother and child are only an emotion away
Montblanc Writing instruments
MasterCard Priceless emotional relationship
Nike Forging emotional ties with women to expand the business

Principle 7: Big Doesn’t Have to be Bad The bigger the business grows, the more it is subjected to scrutiny—from the justice department, other anti-monopoly regulators, and media. The rule applies not only to companies, but also to the big brand. Big brand is perceived as the Goliath of its industry and attacked for everything it does. Today, consumers are looking for real deal—they are looking for substance, not hype; and, honesty rather than hypocrisy.
Customers are looking for:

• Purity in message: The idea is not to create a false image; instead, it is about building a quality product and gaining customer acceptance. Nike didn’t set out to become cool or hip—much less admired by young urban teens—but, it simply set out to provide the best possible footwear to champion athletes.
• Grass-roots marketing: Nike sponsored athletes instead of becoming the official sponsor of the Olympic Games. It never evoked the word ‘Olympic’ in its marketing efforts, but the company gained recognition as one of the most visible sponsors of the 1984 Olympics.
The advocating organization acquires a heart and soul by investing money on social cause: For example, Nike supports kid’s sports; Starbucks supports a cultural literacy program; and Pfizer supports AIDS drug donation. Moreover, alter-image is dangerous— when cool becomes too hot to handle.
Principle 8: Relevance, Simplicity and Humanity—Not Technology—will Distinguish Brands in the Future Technology is not changing the meaning of branding completely—it is about altering the value of branding.
The core values of any brand are:
• Simplicity
• Patience
• Relevance
• Accessibility
• Humanity
• Omnipresence
• Innovation
Some of these seven core values have already benefitted from new technology and some are undermined by it. In any case, it is unlikely that the new technology will change the value of a brand. These seven core values can be applied to any company regardless of the size and structure.
Large corporations have enormous influence on our personal life. They also influence our quality of life. A great brand foundation is built with many different bricks by many different people over many years. It gives employees a common understanding, not just for what they do for a living, but also for how they must do it. Over a period of time, a brand that is universally understood, inside and outside the company, will create a spirit whose value to the company cannot be overestimated. Bedbury says, “Let’s all become better, more respected, more meaningful, and more trusted brands—not just bigger and better.

Evolution of Branding

“Brands have taken on a godlike status: Consumers find greater meaning in them and the values they espouse than in religion.”
– Young & Rubicam .

Brands are more like “best friends” – they form an important part of our lives, carry specific meaning for every individual and are accepted or rejected based on how well they keep promises. Brands are so ingrained in our daily life that we cannot do without them.

Evolution of Brand
Walking down the memory lane ‘of branding’, we can find the English artesian Josian Wedgwood building the first modern business brand. Wedgwood was able to stimulate demand for his more profitable tablewares and command premium price over comparable tableware and other products. Those were the days of the 18th century when the term branding was not known. By the 1920s branding as a discipline had emerged as one of the key tools of marketing. Pioneers in the development of this discipline were Procter & Gamble and Lever Brothers.

Goodyear* in 1996 described the evolution of brand in six stages. The first four stages represent traditional classic marketing approach where the value of brand was instrumental as it offered customers certain ends to achieve; the last two stages represent post-modern approach to branding.

Stage I: Unbranded Goods – in early days, goods were unbranded. [Products such as matchbox and paper pins still fall under such category.]

Stage II: Brand as a Reference – with the emergence of mass production, customer had a choice. This forced companies to differentiate their offerings to customers. At this stage of branding, differentiation became the driving force, which was primarily achieved through changing physical product attributes.

Stage III: Brand as a Personality – with the passage of time, it became extremely essential for companies to differentiate brands on rational or functional attributes, as many products started making the same claim. Therefore, to differentiate their product from competitors, marketers started personifying their brands. ‘Beauty soap for film star’ – Lux is the classic example of brand as a personality.

Stage IV: Brand as an Icon – marlboro represents independence; Nike stands for winning; and Rolls Royce as an epitome of luxury. All these brands are deeply rooted in consumers’ mind – they are brand icons. In this stage it appeared as if consumer owned the brands and they used it to create self-identity.

Stage V: Brand as a Company – personifying company as a brand is an ongoing change that also marks the post-modern marketing. Post-modern marketing is about consumers being proactively involved in the brand creation process. Brand as a company is a stage where a company considers strengthening the total access of information about product and services with a customer-enhancing relationship.

Stage VI: Brand as a Policy – ‘The United Colors of Benetton’ ad campaign creates an ethical unity, Body Shop and brings to light social issues like environment and treatment of third world people. Such are the examples of brands in the stage of ‘brand as a policy’. Today, only a few companies have entered this stage, wherein their brands are closely identified with ethical, social and political issues that are the constituent elements of the brand as a policy.

These six stages clearly define the development of a brand from a ‘me-too’ product to a power brand stage and beyond. Coming out of the shell of product branding today, brand managers are branding every possible thing on this earth. The practice of branding, in the changed business environment, extends across a wide spectrum, from product to companies, to CEOs, to celebrities and to the extreme end of religion. Today, anything that falls under definition of a common noun can be a brand.

* Goodyear, Mary (1996), “Divided by a common language: diversity and deception in the world of global marketing,” Journal of the Market Research Society, 38 (2), 105-122.

Elements of Branding

Brands are living components that we have been holding in our minds for years. What goes into them is both, logical and irrational. Products and services will continue to come and go but the residual experiences of customers who consume them will ultimately define the brand. These residual experiences of customers help brands develop an image.

The act of imprinting the brand image firmly in the minds of customers is a great challenge to marketers. The act of image building has two basic components, positioning and consistent delivery of quality.

Positioning a brand is about interaction with people, what they read in press, style of advertising, quality of products, and efficiency of after-sales service. Branding is nothing but positioning a product successfully in the minds of the customers. If a brand is well positioned in a customer’s mind, half the job of directing customers to buy their products or services is done. The power of a brand is all about how customers associate their feelings with the brand. Long-term customer association can be built only through building emotional associations around a product.

It is true that emotions help develop an everlasting image of a brand. In fact, they help the brand develop a god-like character. There are few other elements of branding, viz., functionality, point of differentiation, and the product’s value that gives brand strength to survive in the rough corporate weather. Once a brand attains a respectable status it needs to deliver consistent positive quality. It strengthens the bond between the customer and the brand and they tend to develop strong feeling for that particular brand. With passage of time, the very same positive feeling transform these customers into brand evangelists.

There are a few brands that successfully transform their customers into brand evangelists, like Apple Computer, Linux, and Harley Davidson. Harley Davidson is a brand which is built solely on emotional association and consistent quality delivery. It is perhaps the strongest brand in the motorcycle market. The other motorcycles in the market essentially with the same engineering quality and performance are not in a position to charge even one-third of the price of Harley Davidson is able to. Harley Davidson customers are always ready to wait for months to get a motorcycle. Definitely, Harley Davidson is one among the very few cult brands the global market has. Cult branding is more than just strong branding, though not all the brands are positioned to become cult brands. A few of the well known cult brands are Oprah Winfrey, Volkswagen Beetle, Star Trek, World Wrestling Enterprise, Apple Computer, Linux, and Harley Davidson.

Building a Power Brand
In 1998, Philip Morris took over Kraft in US and Nestle bought Rowntree in Europe. Philip Morris paid four times the value of the target company’s tangible assets whereas Nestle paid over five times. Such incredible payment for names were the reflection of the value placed on the brand in terms of long-term profit expectancy. Definitely, a good brand is a great asset but it takes years of dedicated effort to build it and great care has to be taken in maintaining the brand once it is established.

Many companies believe that they have a brand but in actual sense all they enjoy is name-recognition. The name-recognition may help a company in generating onetime business. A name becomes a brand when the customer associates the name with the set of tangible benefits and other set of intangible benefits from the product or service. A brand offers a distinct value proposition and consistent quality delivery,which, in turn, provides loyal customers to the company. Philip Kotler, a leading marketing guru says, “The most enduring meanings of a brand are its values, culture, and personality. Brands give the seller the opportunity to attract a loyal and profitable set of customers and strong brands help build the corporate image, making it easier to launch new brands and gain acceptance by distributors and consumers.” Moreover, a brand simplifies the everyday choice, reduces the risk of complicated buying decisions, offers emotional benefits, and offers sense of community.

In most of the cases, journey of power brand starts with unbranded ‘me-too product.’ With effective communication, an unbranded product generates brand awareness. Brand awareness backed by strong brand promise increases brand acceptance in the market in course of time. When the market starts accepting a brand, quality control helps increase brand preference and consistent promise delivery with passage of time generates brand loyalty. Strong brand loyalty is the first step towards the development of a power brand.

A brand becomes a power brand, when it meets all the branding basics – adistinctive product, consistent delivery, alignment between communication and delivery and brand personality and presence. A power brand helps a company leverage all available business opportunities. McKinsey’s five-part approach, ‘Brand Accelerator Model’ helps marketers position their brand. It proposes to build strong brands faster than the competitors. The five steps that build a strong brand are:

• Creating a compelling brand strategy
• Delivering a consistent, distinctive and inspiring customer experience
• Building unique brand presence approach
• Leveraging the brand for growth and optimizing brand architecture
• Shifting the brand organizational development.

In fact, a power brand provides a win-win situation to the customer and the company. This is what makes branding strategy one of the crucial factors for organizational growth. Brand strategy needs a careful thought and intensive planning backed with a well-researched study of the market and its complexities. CEO of Brand Stream, Scott Bedbury emphasizes that it’s time to build a strong
brand that evokes trust from customers.

Brand: The Changing Dimensions
Branding, with time, may have changed in form but elements of branding remain unchanged. Though branding is an enticing act for most marketers and consumers to associate certain positive, and exciting feelings with the process of brand management, there is a difference between the participation level of employees and customers. For the customer, it is an act of excitement and fun, which is done for awareness development. But for marketers, the same branding exercise means not only advertising and awareness development, but also strengthening the internal as well as the external core of brand.

Branding as an exercise is influenced by external and internal environments. The business functions, viz., marketing, sales, finance, production, research & development, and personnel have a definite role to play in brand-building exercise. Moreover, these functions are inter-dependent and intrinsically linked with one another for better functioning of business. The other set, which constitutes the external environment, comprises customers, competitors, advertising and public relation agencies, and distribution channels.

A company can develop power brands by maintaining a right balance between the external and internal environments. Bringing this balance helps brand create value through consistent positive quality delivery and its offerings, which satisfy customers and makes them opt for the brand regularly. At the other end, it also helps build a strong marketshare, maintain good price levels and generate strong cash flows. Companies like Coca-Cola, Microsoft, Intel, Nokia, Levi’s, Gillette, Disney, GE, American Express and Sony enjoy power brand status. These brands realized long back that brand management, as a function, has crossed the boundaries of marketing, penetrating into all other functions of business operations. They have also realized that the success of their business is mostly based on the success of their brands. They are experiencing brand-based business model. Sam Hill and Chris Lederer, associates of Booz-Allen & Hamilton, advocate that the next decade might see the brand-based business models becoming the dominant corporate norm. To develop a brand-based business, companies have to focus on a strong brand portfolio rather than an individual brand. To develop a portfolio of brands, it is required to classify brands of company into three groups: lead brand, strategic brand, and support brand. The lead brand is the center of brand portfolio – it carries most of the burden of the company’s sales and pulls customer to company’s product. The strategic brand lures new users to the brand portfolio. The support brands pull those customers who are on the fence, into the company’s product.

The key to the success of brand portfolio management is to think of brands as an asset and to measure the risk and return of brand. Moreover, developing a brand portfolio in this ever-dynamic business environment is not enough. Companies for sustained growth also need to convert their brand into Masterbrand, which helps create strong relationship with customers, provide direction to the employees, offer value proposition backed by entire company, help company erect greater barrier to entry, and infuse ability to innovate and change. Masterbrand also explains why a strong brand should reflect the organizational values, culture and strategy, which is very much reflected in branding strategy of global Masterbrand like American Express, AT&T, IBM, Samsung, and Sony.

Branding – A Collective Responsibility
Today, who doesn’t know of Nike and Starbucks? Sneakers were sneakers until Phil Knight came along to brand it as sports and fitness product and coffee was just a hot beverage until Starbucks created an excitement around its consumption by branding experiences. These brands stand successful even today because they consistently evoke positive feelings with each new product, services, or marketing campaign. These brands stand strong and have survived all bad and good seasons of business turmoil because they enjoy strong internal and external mix of branding.

It stands true not only for Nike and Starbucks but for any product or service offered to customers. Nike and Starbucks emerged as powerful brands because contrary to the conventional wisdom – branding stands true for external communication, its aim is to attract new customers and influence the old ones – they established their brand with the help of their employees. The old view has lost its significance in the
new market structure where companies in the midst of restructuring their business strategy need to communicate to their employees as they do with their customers.

In this new brand world, branding is not only domain of marketer but it has gone ahead to shop floor and, to the employee. In fact, brand-building exercise is the responsibility of the entire enterprise, including CEO. Most of the successful companies’ CEOs are managing branding exercise directly from most successful companies and the success stories of these companies have proved that the top boss of the companies should manage the branding exercise. Michael Dell of Dell Computer and Richard Branson of Virgin have done great job in positioning their brands globally. Richard Branson infused brand in the culture of the company and at Dell Computers brand was ingrained in the vision of company. Both these CEOs built strong relationship with the customers and employees. They have always seen brand as an important asset of company. Their initiatives helped Dell and Virgin to emerge as global companies.

Impact of Technology on Branding
The business environment in recent years has gone through a sea change in its shape. One of the key factors of the unprecedented change in shape was the result of change in technology, which has also forced companies to get rid of traditional techniques of communication. The impact of the Internet on brand strategies is enormous. It has changed the boundaries of the competitive playing field and
created a land rush to establish brand through online channel. IBM, Microsoft, Coca-Cola are few of the pioneers of online branding exercise. Though new branding techniques have forced companies to get rid of traditional techniques of branding, the basics of branding remain same – winning customer mind share. Dr. Paul Temporal argues that, there is no change in the way people perceive a brand, traditional or hi-tech. People go for only those brands which they feel like accepting.

A brand in a networked economy can be defined using four inter-related elements satisfaction, collaboration, relationship and a story to suit the networked economy, which ultimately gives loyal customers to the company. Michael Moon and Doug Millison define it as ‘Fire brand’. A fire brand ignites the hearts and minds of customers through its interactions with the company and other customers. It unveils beginning-to-end strategies for strengthening company’s brand and building customer loyalty. A brand can become a firebrand when it fires community to action, and provides self-service satisfaction to vendors and other members of the community.

Conclusion
The new economy laced with the pace of the advancements in technology has changed the meaning of competitive advantage. Gone are the days when innovative products used to be the source of competitive advantage for a company. Today, any new invention can be copied within a matter of days. Moreover, this is the era of outsourcing, where companies can outsource all possible elements of business functions. In the age of total access, ‘brands’ are the only assets of a company that cannot be easily copied or outsourced. A strong brand is the most important asset of a company. It can be nurtured and relied upon in today’s competitive environment. So, branding is far from dead, as some experts like McKenna and Zyman have Opined. Branding is very much alive though it is changing in form and presentation.

Internet Marketing: Some Ethical Issues

Internet offers unique two-way interaction, this interactivity makes possible for the marketers to capture enormous amount of information about the customer, which can be used to customize marketing offers using appropriate data mining and CRM tools. Interactivity has also made it possible for the Internet to be used as a medium for establishing greater brand identity. In nutshell, Internet has reduced the barriers of time and distance for consumers to obtain information and for the marketer to build database. Because, very time someone gets information, he/she also leaves behind enormous data about their lifestyle, demographic details, e-mail id etc

This universal access to information has come with its own set of demerits as well. Issues of pornography, privacy, unsolicited e-mails, hacking, fraud, plagiarism, and transaction security continue to bother this emerging medium. On part of the marketers, problem started when they started looking at the information in general and customer information in particular as a marketable commodity. The very nature of the Internet increases the complexity of tackling the above problems. Internet involves diverse tools like telephone, television, print etc., and cuts across national boundaries. Hence, Internet complicates the legal, ethical, business and regulatory issues when compared to other media. Given these complexities and infancy of Internet, Bush et al. in their study, traverse through these complex legal, ethical, business and regulatory issues for Internet at three levels viz., societal, industry and company.There are not many studies that have attempted to address the issue of marketers’ perception of regulation at societal level. The present study addresses the issue by invoking the following questions.
• Has the lack of regulation on the Internet resulted in frequent ethical abuses by organizations?
• Should the Internet be regulated to insure ethical marketing?

As underlined earlier, Internet has emerged as a great source for database building. It has also emerged as a great medium for providing detailed product information, which in turn has propelled Internet as a great medium for advertising. With these backdrop, Bush et al. have raised the question, What are the ethical issues facing the use of the Internet for marketing purposes? Considerable amount of research
has been done on how to create a more ethical climate within a marketing organization. However how does it apply to Internet is something very few studies have probed. Bush et al. under Internet ethics and the organization, have addressed the following issues;
• Are ethical issues related to marketing on the Internet basically the same as ethical issues raised with other forms of marketing in organizations?
• Do companies consider ethics when planning their Internet strategy?
• Should companies have or develop a code of ethics for Internet marketing?
• Are there differences in the way the advertising agencies and advertisers perceive ethical issues surrounding marketing on the Internet?

The above questions were asked to a sample of 1250 persons drawn from commercial mailing list of advertising agency and client organizations, representing marketing community in the US. The results of the investigation are quite interesting.

Majority of the marketing professionals who participated in the study are of the opinion that absence of Internet regulations has influenced ethical abuses. However, there was lack of consensus about regulation of Internet. At this point, the authors hint at the self-regulation, akin to American Advertising Association or Direct Marketing Associations.Large portion of the respondents have said that the ethics were rarely considered while making any Internet strategy. This is something disturbing. But the fact that majority of the respondents strongly feel that companies should have or develop a code of ethics for Internet marketing
to acquire some comfort. At a macro level, the paper questions the necessity for a separate code for Internet. Since, most of the organizations as part of corporate values already have some kind of standards that guide external and internal functions. The paper also raises the question of compliance to the
code of ethics as formulation of code of ethics is easier, but how does an organization ensure compliance is a difficult question to answer.

Conclusion
Though business is unsure of whether to regulate this new medium and if so how, the fact that a great need is felt to guarantee the present and potential customers for the security of the data provided would eventually push marketers towards better business practices. Researchers are of the view that individual organizations would take lead in addressing many of these societal and industrial issues surrounding Internet. Hopefully all these would make Internet a better medium to do business.

This paper is a research summary of the study conducted by Victoria D Bush, Beverly T Venable and Alan J Bush titled “Ethics and Marketing on the Internet: Practitioners’ Perception of Societal, Industry and Company concerns.” Compiled by Jayasimha and Braj Mohan Chaturvedi in 2003.

Relationship Marketing – Not a New Concept

Relationship Marketing – Not a New Concept

Industrialization changed the marketing structure but in a small form marketing based on relationship survived and re-emerged in late eighties and early nineties of last century. To be very precise symptoms of the change in marketing structure were witnessed in late 1970s. Berry1, however, was the first one to use and thereby establish the phrase Relationship Marketing. He defined Relationship Marketing as attracting, maintaining and – in multiservice organizations – enhancing customer relationships.

There are many small stories, which describe the importance of relationship in marketing. We here have discussed a few cases in the book but to start with we shall narrate one of the incidents that took place in Ranchi, India. Ranchi is a small industrial town in India where there was a small grocery shop; small by the standards of the new mega retail formats. Shop owner knows every one in the neighborhood by name, their birthday, and anniversary. Till late eighties he was doing good business but he started losing customers in early nineties, as first generation employees of Heavy Engineering Corporation Ltd. (HEC) , started moving to suburbs on retirement.

Rabindranath Choubey, an employee of HEC and a good friend of the shop owner, discussed the latter’s problems with him once. He was losing his customers and finding it difficult to win new customers. Choubey suggested him to take the trouble of making home deliveries. The gesture though small, made a difference to all his customers – old and new, who also enjoyed a regular discount from him. His establishment today has flourished and expanded but his relationship with all the customers is still cordial. Even today he knows the needs of each individual and his/her family. This form of relationship marketing existed since ages in all part of world. It is not a new concept and has existed since the beginning of business. Everything from shopping at grocery store to enjoying a British Airways services involves a certain element of relationship.

Origin of Relationship Marketing

The year 2050 – intelligent cameras on the facade of retail outlet read the eye-prints of passersby identify them and greet them by name, giving individualized offerings and inviting them to the mall. The sales representative at the door of outlet, taking advantage of the database shared by various merchandisers offers him shoes matching the trousers he bought last month from other shopping mall. Such is the extent to which marketing capabilities might evolve by the mid-twenty-first century but in reality, it is not feasible till date. The idea behind this hypothetical development however is old – to optimize customer profitability by delivering the right messages, to the right individual customers and develop a cordial relationship. Till the hypothetical situation comes out to be true we have to focus on the basics of relationship marketing.

It was always there

Pre-industrialization marketing practices were highly individualized, relationship oriented and customized. The design of clothes, jewelries, watches, home furnishings and other consumer products were customized. Since production, those days was primarily based on customer request and demand, it did not require push form of marketing activities. The beginning of industrialization could be seen as the end of personal relationship between producers and customers. Those were the days when producers were confronted with inventories piling up that forced companies to focus on aggressive selling.

Selling, as it matured distanced the manufacturers from their customers. This situation with passage of time polarized customers and manufacturers. Customers and manufacturers in industrialization era were acting in isolation, as there was no match in customers’ demand and manufacturers’ offerings.

Manufacturers, those days, were producing what best they could and customers were left with no other option but to buy those offerings. Industrialization resulted in mass production that increased the gap between the customers and the manufacturer. The advent of mass production and mass consumption during those times led the marketers to adopt a transactional approach of marketing.

In the later part of the industrialization era, certain important developments occurred, one being the marketer’s realization that repeat-purchase by customers was critical, making it necessary to build brand loyalty. The other significant change was the development of administered vertical marketing systems whereby marketers not only gained control over channels of distribution but developed effective barriers for their competitors. This reduced the gap between the producers from the customers. However, the emphasis remained on discrete transactions. Some firms, not content with such discrete transactions, began developing long-term contracts through suppliers and service, creating ongoing interactive relationships among themselves.

The change is also observed in various other industries viz. hospitality, automobile, aviation, education. It is obvious from the changes in these mammoth industries that the phenomenon of relationship marketing has not only helped small grocery stores but also organizations with huge marketing setup.

Relationship marketing is more of use to the organizations, which have grown in operation, and whose decision makers have moved farther from the front line. Developing and sustaining long lasting one-to-one cordial relationship for the decision makers, in such organizations becomes a distant concept. Hence the onus of sustaining relationships goes down to the front line managers. Moreover environmental and organizational development factors, rebirth of direct relationships between producers and consumers are few of the factors responsible for the shift in market structure. These factors are not only instrumental in the shift in the form of marketing but also in strengthening relationship marketing.

The other factors are:
Rapid technological advancements, especially in information technology
Increased role of information technology-based interactivity
Transformation of organizations and adoption of total quality programs
Empowerment of employees
Increase in competitive intensity that shifts the focus towards customer retention
Increasing emphasis on services and service aspects of products
Focus on financial accountability and ROI on marketing initiatives
Increased emphasis on loyalty and value management
Shifts in power and control within marketing systems
Decline of traditional mass marketing techniques
Increasing focus on price, as differentiation decreases
Development of fragmented, regional, and/or global markets

Benefits Relationship Marketing
The benefit relationship marketing offers has helped it gain popularity in the recent past as an approach to develop bonding with individual constituents of the value chain of a firm operating in an industry. Players, to gain a competitive edge in an increasingly cutthroat market condition are using it as a competitive marketing weapon. Marketers are increasingly using relationship as a tool of value creation and in the process they are involving customers for their real time views on product development, designing, pricing distribution etc. It is observed that in this era of Relationship Marketing, consumers are increasingly becoming co-designers and in few cases co-producers. Let us take the instance of Texas Instruments, which established dialogue with more than 30,000 high school teachers in developing its new TI-92 calculators. In one another classic case the FMCG giant Procter & Gamble deputed 20 of its employees to live and work at Wal-Mart’s headquarters to improve the speed of delivery and reduce the cost of supplying its goods to Wal-Mart’s stores. Although some experts refer to Relationship Marketing as ‘relational relationship marketing exchange’, the actions undertaken are not always for the purpose of exchange. The parties involved cooperate to share resources for joint value creation. In certain instances, the conversations taking place may not ultimately result in a monetary exchange but may bring greater benefits to the people involved in the process. More of such instances may be found in cases like Zeppelin, the German distributor of Caterpillar that caters to the individual needs of its customers and recommends preventive maintenance, Amazon.com that maintains databases on customer preference and pro-actively advises them on purchasing books and hotels like Holiday Inn that offers customized services to customers. Relationship marketing in a few other instances brings monitory benefit to the customer without diluting the manufacturer’s profitability.