Brand Power

An exploration
A Working Example to Explain Brand Power: Big Box Electronics

The Big Box Electronics category is characterized by:

 Huge Dollar volume

 Small margins

 Domination by 2 National Chains

659 Stores US
+ 900 ex Radio
Brand A 45,000 employees
Shack stores in
Canada

Brand B 900 stores 125,000 employees

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Big Box Electronics

Both have

 Big stores (U.S.)

 Semi-self service

 Huge numbers of SKU’s in virtually every home electronics

category

 Major brands

 Lots of promotions and Sales

 Often located proximate to each other

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The Consumer Electronics Store Dilemma
How does the consumer choose? Industry Myth
Whichever One Is
A Right Hand Turn is
where people go
Scott

CES A CES B

Raj

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Strategic Questions

Is the myth true?

Can anything be done to drive a wedge?

What should the CES’s say about

themselves?

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A Question

Should they talk about Products?

Or should they talk about Brands?

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What is a product?

A product is an arrangement of
physical characteristics intended for
some purpose

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Can we look at Consumer Electronics Stores as Products?

Do they have physical

characteristics?

Are they arranged for a purpose?

Yes

So attribute-focused communication
is one way we could go…

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But, what is a brand?

A brand is the summation of all the

perceptions, experiences and beliefs
associated with a product, service, or
entity that make it distinct

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Can we look at Consumer Electronics Stores as Brands?

Are they
Do people haverepresentations of a
perceptions, experiences
andproduct, service, organization
beliefs associated or that
with the CES’s
association
make that
themare perceived
distinct?
to be distinct?

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Can we look at Consumer Electronics Stores as Brands?

The Myth says: Maybe, maybe not …

But this is what we want to know!

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Why are brands so important?

Brands have power that can

transcend the attributes and
characteristics of products,
because they are Perceptions of
those tangible elements.

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Why are brands so important?

Brands Can Have Power…

Coca-Cola Is it more than cola beans, corn

sweetener, prunes, spices and food
coloring mixed together?
Is it more than a beverage?

Coors Light Is it more than hops, malted barley,

yeast and water?

Starbucks Is it more than coffee?

USA Is it more than 50 states united?

How about Chanel, BMW, McDonalds, Exxon?

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Why are brands so important?

All of these are all brands with power

They have the ability to capture attention

and often loyalty far above others

Think of what that means to your business

• Everyday on the shelf
• When introducing new products
• In attracting talent
• Or surviving PR crises

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Why are brands so important?

Brand Power
has different levels

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 Brand Power Hierarchy

Relate the brand to a feeling, attitude, event,

perception of myself that is important to me
and who I am

Know that & how it has meaning

Know that & how it’s different Brand

Power
Heard of it and know what it is

Heard of it, but don’t know anything about it

No awareness of the brand

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 Brand Power Hierarchy

Relate the brand to a feeling, attitude, event,

perception of myself that is important to me
and who I am

Know that & how it has meaning

Know that & how it’s different

Heard of it and know what it is

Brand
Initiation
Heard of it, but don’t know anything about it (where brands
become brands)

No awareness of the brand

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 Brand Power Hierarchy

Relate the brand to a feeling, attitude, event,

perception of myself that is important to me
and who I am

Know that / how it has meaning

Know that / how it’s different Brand with

Differentiation

Heard of it and know what it is

Heard of it, but don’t know anything about it

No awareness of the brand

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 Brand Power Hierarchy

Relate the brand to a feeling, attitude, event,

perception of myself that is important to me
and who I am
Brand with
Know that / how it has meaning relevance

Know that / how it’s different

Heard of it and know what it is

Heard of it, but don’t know anything about it

No awareness of the brand

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 Brand Power Hierarchy

Relate the brand to a feeling, attitude, event, Brand with

perception of myself that is important to me Equity
and who I am

Know that / how it has meaning

Know that / how it’s different

Heard of it and know what it is

Heard of it, but don’t know anything about it

No awareness of the brand

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 Brand Power Hierarchy

Relate the brand to a feeling, attitude, event,

perception of myself that is important to me
and who I am To Build
Brand Power,
Know that / how it has meaning
We need to
know where
Know that / how it’s different we are…
And
Heard of it and know what it is determine
how to get to
higher levels
Heard of it, but don’t know anything about it

No awareness of the brand

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Achieving Brand Power

Brand
Differentiation + Brand Relevance
+ Brand Equity =

Brand Power
Brand Power is a function of Relevance, Differentiaton and Equity
BP=f(D,R,BE)

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Understanding Brands

Brand Differentiation
Characteristics and perceptions that are perceived to be
different vs. alternatives

Differentiation buys trial

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Understanding Brands

Differentiation

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1 Box
1 Rock
1 Clever “care and feeding”
owners manual

= 1 million units in a couple

months,

but gone in a month more,

because…

DIFFERENT, BUT, NO RELEVANCE

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Understanding Brands

Brand Relevance
Degree to which the brand is applicable to, or makes a
connection with, people’s lifestyles, issues / needs / desires

Relevance gains repeat consideration

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Understanding Brands

Relevance

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TIFF (Uncompressed) decompressor
are needed to see this picture.

Combine:
Side Doors
Low Step in Height
Folding / removable seats
With Families and Dogs

= a revolutionary new vehicular class that

has held almost a 10 share of all light
vehicles since 1990

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Understanding Brands

2 Types of Relevance

Personal Relevance: compatibility with

• Preferences / personal tastes
• Beliefs and values
• Perceptions of peer acceptance and social impact on
the individual

Peer Relevance:
• This can accelerate / decelerate / stall and
reverse progression on the brand power scale
• If enough “peers” start moving in a direction, the
brand will go with it

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Understanding Brands

Brand Equity
Derived from experience-based associations with the brand, and the
emotional connections that grow from them

Brand Equity provides insulation

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 Understanding Brands

Brand Equity
Derived from experience-based associations with the brand, and the
emotional connections that grow from them

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Sturgis Bike Rally

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• Annual 10 day event

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are needed to see this picture.
• Draws 550,000 bikers
• 3/4 are over 40
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• Tax revenue alone -- over
are n eeded to see this picture.

$1mm

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Brand Equity -- Breaking it down

Brand Linkings
The Roots of Equity

Brand Linkings are Associations with the

brand created through experiences --
events, people, places

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How -- Breaking it down -- brand equity (cont)

Equity Connections
Associations become Ideas,
Memories and Feelings that
represent how the brand can /
does connect to their lives With repetition, rehearsal
and peer reinforcement,
the linkings between the
consumer and the brand
Repetition Rehearsal become equity connections
Peer Reinforcement

Brand Linkings
The Roots of Equity
Associations with the brand
created through experiences
-- events, people, places

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Brand Equity -- breaking it down

∑ Equity Connections
= Brand Equity

Brand Equity is the meaning, significance or purpose that is derived

from the Connections made with the brand through associations with
experiences -- events, people, places.
Yes, equities are built on characteristics, but it is the meaning of those
characteristics, achieved through experience that has power

BE = ∑(event, people, place associations with the brand * the

connection people make between those association and their
lives * value of that connection to them)

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Achieving Brand Power

Brand
Differentiation + Brand Relevance
+ Brand Equity
=

Brand Power
Brand Power is a function of Relevance, Differentiation and Equity
BP=f(D,R,BE)

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 Brand Power Hierarchy

Relate the brand to a feeling, attitude, event, Brand with

percpetion of myself that is important to me Equity
and who I am
Brand with
Know that / how it has meaning
Relevance
Know that / how it’s different Brand with
Differentiation
Heard of it and know what it is
Brand
Heard of it, but don’t know anything about it

No awareness of the brand

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Follow-up assignment

• Where do you think the Consumer Electronic

Stores are on the brand power index?

• What brand issues do they need to address?

• How would you position each brand?

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Follow-up assignment

• Hint -- what is positioning?

Brand Positioning
Expressing the relationship between the consumer
and the brand in a unique (versus competition) and
compelling way

Positioning is built on the differentiation, meaning and equity

experiences associated with the brand

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 Follow-up assignment

• Hint #2 -- applying brand power as a diagnostic tool

I have a product and I have a product with a

people are re-buying it fan club
I have a product and
Manager's
I have a product that people haven't tried people are trying, it but
Issue But they are also Last summer 20,000 of
not rebuying it
switching a lot between them attended a festival
me and my competitors built around the product
Or, It's not relevant in
It's different, but It's different and has
the extreme
people find: meaning
It has difference,
Note: Although trial is
• It doesn't deliver as But the experiences meaning and equity
often driven by
Brand Power People don't It's not promised, consumers are having
perceived difference, a
Diagnostic know about it different • Or doesn't fit in with it are not special People relate to the
level of relevance and
their lifestyle. brand. It has become
believability is required
They (and their peers) part of who they are.
Example: Electric cars are not building
If I need a pick up, don't
with 100 mile ranges affiliation with the brand
sell me a car

Brand Power Lack of Lack of

Lack of Relevance Lack of Relevance Lack of Brand Equity Power Brand
Focus Awareness Diferentiation

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Bonus Question -- (much harder)

What are the volume, and profit implications in the short

and long run of aligning with a positionings you have
recommended?

Upsides?

Risks?

How might you go about assessing this?

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