The Brand Value Chain Should brands have an essence, or like a business, a strategic intent?
Finally the brand is receiving due recognition at the financial core of business. It has taken its place on the board, and has become the CEO’s best friend. The question is why now? What has suddenly happened to elevate the status and value of the brand? Quite simply through societal and consumer need shifts, consumer eclecticism and too much choice, consumers are now using brands differently. The first point that really should be elucidated is the fact that consumers have moved away from using products, to using brands, which is not a recent change but a new appreciation thereof allows for a new world of thinking. If products are not consumed, can we consider our targets as consumers anymore? If the brand is more than a products potential, what is the role of the brand? If we can finally call a nation a brand, do we fully understand what a brand is? Should brands have an essence, or like a business, a strategic intent?
Some very pertinent questions, that shall be alluded to within this article, but what I would really like to focus on is the concept of a brand value chain. Kevin Lane Keller and Donald R. Lehmann introduce the concept of the brand value chain in their article “The Brand Value Chain: Linking Strategic and Financial Brand Performance,” however as can be ascertained from the title their main focus is on the financial value or gain the strength of a brand has to offer. I would like to shift that thinking and focus on the role of a brand within a value chain where the key focus is not on the ultimate financial gain but on how the brand enhances the complete consumer brand experience within the value chain itself. In this regard the brand value chain becomes a marriage, a combining of a product value chain and a consumer decision making process, which means that the brand value chain can be unique to a brand, let alone a category?
This obviously takes us back to the question of is a consumer a consumer? Ultimately a consumer does consume, but through consumption and the role of a brand within that consumption, our metaphorical consumer is actually participating in a brand experience, and has entered what one could term a consumption brand interface phase. If we can appreciate that the consumption experience in itself is more than what a product delivers, and is actually an extension of a brand experience, or more importantly is only one part of all possible brand interfaces, we can suddenly start to understand that programmes that enhance the consumption experience actually drive the true value potential of a brand.
This type of thinking begins to reposition the goals of marketing itself. C.K Prahalad and Venkatram Ramaswamy in their article “The Co-creation Connection” intimate that companies now need to shift from managing efficiencies to managing experiences. The essence of this paradigm shift from a marketing perspective revolves firstly around how do we create and manage the brand experience as a ‘reason for being’ or ‘strategic intent’ for a brand, and secondly the consideration of what the role of a brand is at the different levels of brand interfaces. The concept of brand interfaces is the foundation for the brand value chain but in order for one to completely appreciate this paradigm shift towards a brand value chain one needs to explore the changing role of brands and marketing communication over the ages.
One could argue that brands came first, but branding at that stage was arguably not appreciated as much more than a name or a statement of authenticity. Then came the advertising campaign, which started the development of thinking in the area of brand equity. This of course was followed by a more progressive form of thinking or approach called integration, which essentially ensured that the synergy of all messages that surrounded a ‘consumer’ within a campaign were driven by a single advertising concept or idea. The latest approach is the highly commendable channel strategy approach which takes integration onto another level, and looks at the role channels have to play within the campaign process. The brand value chain proposes a further evolvement of such thinking, as often the role of a brand within a channel is ignored.
It is a given that we need to surround the consumer with a single concept that portrays the essence of the brand at appropriate points of contact and has a strong reason to believe. What is not always a given, and is often alluded to within the new channel strategy approach, is what are the appropriate points of contact and what is the role of the brand at those appropriate points of contact? This is where strategic intent comes into focus and the necessary knowledge of the ‘consumer’ decision making process. A brand needs a reason for being (outside of consumption) and this brand intention (strategic intent) needs to be actualised in different ways at different points within a consumer decision making process, obviously not forgetting the singularness of communication.
Let’s first look at an important channel that is not a consumer touch point, but needs to be influenced by consumer needs, the point of production or R&D. It is essential that product development in directed by the brand as products need to deliver on the brand promise. This forms part of the brand value chain as consumer needs are part of the consumer decision making process, and brand directed product production ensures need fulfilment through the strategic intent of the brand.
If we take the brand value chain a step further and consider the more direct consumer touch points like traditional marketing communication channels, we can see how the role of the brand changes, yet still remains true to itself. Many people have written that the goal of advertising is to drive awareness, and to a degree this is correct. However, if it was only awareness we would not need strategists or a creative department. An advertisement is a brand platform, it is the means through which a brand’s meaning is portrayed, and acts as the reference for interpretation or message decoding at all other brand interfaces. A wonderful book by J.H. Gilmore and B.J. Pine II called “The Experience Economy” is testament to this thinking, but people often do not see traditional communication channels as an experience, as they tend to limit their experience consideration to more tangible elements like events or promotions. So yes, we are driving awareness through traditional channels, not of the brand, but of what the brand stands for. We are initiating a brand experience. From a consumer decision making perspective, these channels are often most pertinent at a need recognition phase, but also have an important role to play within a brand affinity interface, which is why likeability is core to the success of advertisements. Two levels of communication are often present at this stage. First is traditional brand communication, and second is traditional product communication or retail communication. If we consider the brand role on a consumer interface level, the former becomes a brand intent interface and the latter a brand product delivery interface.
Let’s move further along the decision making process and thus brand value chain. If you are a third party brand, such as a motor vehicle or an asset finance house, the role of the brand changes continually. If you are a first party brand the role change may not be as drastic, but the inflections are there. How does a brand close a deal? How does a brand move someone from awareness to consideration? If we use a motor vehicle as an example, we need to appreciate that three relationships are at play, as the consumer has a relationship with the brand and the dealer, and the dealer has a relationship with the brand itself. It is therefore pertinent to uncover or strategise how the brand is able to enhance all three relationships, and what the points of contact are within those relationships. If we take a basic FMCG product, we need to understand that the retailer is a channel that is part of the consumer decision making process; the question is when was the actual decision made? If it was made before the consumer actually entered the retailer, what is the role of brand in-store? If it is only made in-store, what is the role of the brand outside of the store?
More questions than one can answer at this point, but they do need to be answered before anyone can truly state what should be communicated, how it should be communicated, and through which medium it should be communicated. What is essential is that the brand’s strategic intent should lead the communication and medium choice, that is to say that everything must be in-line with the brands strategic intent. However, the most important influence needs to come from the consumer themselves, or at least our understanding of them, as what we communicate will depend on the role of the channel within that communication, or that point within the consumer decision making process. It is therefore pertinent for any strategist (be they brand, communication or media) or creative director, to answer these broad base questions before attempting anything: What is the role of this channel? What is the role of the brand within this channel? What is the strategic intent of the brand? What is the appropriate contact point or medium within this channel? And finally, what is the brand experience we would like to create? Which of course adds a completely new dimension to Marshall McLuhan’s “the medium is the message”.
On a final note, once one has established the answer to all the above questions, it is important to set up measurement at each point on the value chain, as if we establish goals based on channel needs at each stage and we measure the achievement of those goals, we will be able to establish what is succeeding and what is not succeeding and why, and where investment is truly needed.
A parting philosophical brand thought: If you have high awareness and high consideration, yet little conversion or actual purchase should you address the relevance of the product first or should you first try and understand the complete consumer brand experience? This takes us into the territory of perceptual wealth.
Strategic Planning Director