Talk about brand building

If you want to build a good brand, it is essential to have a good brand strategy. So how can you make a good brand strategy plan? How can you figure out the direction of the brand? This article will start from the root and talk about how to start brand building.

The fragmentation of brand awareness and brand building has resulted in unsatisfactory results for enterprises in brand building. Some enterprises have consulted many professional companies to develop brand strategy plans, but still have not figured out the direction of the brand. What's worse, in rounds of brand strategy discussions, the resources of the enterprise are constantly consumed, and the enterprise is tormented to death in the brand building project. Today, let's get to the bottom of it and talk about how to carry out brand building.

1. The ultimate battlefield of brand competition is the customer mind

Positioning theorist Trout proposed that "perception is greater than fact". After this sentence was widely recognized by entrepreneurs in China, it caused a huge misunderstanding, and people believed that positioning is actually fooling customers, and there are no facts, only perception.

In fact, this sentence is not fully expressed. The complete statement should be "cognition has a greater impact on behavior than the fact itself." From the perspective of behavioral psychology, all human behavior (including consumer behavior) is determined by cognition. If the facts are not transformed into cognition, we may not know the existence of the facts, and it will not affect the behavior.

From this perspective, physics itself is constantly improving human cognition of the facts of the objective world. The "geocentric theory" and "heliocentric theory" were regarded as the norm in that era, which fully demonstrated that cognition is greater than facts. In the business world, it is the same. When we take out a product, we will most likely ask what brand it is, not which company produced it. Customers buy products based on the brand rather than the company.

It is also for this reason that whether it is a B2B or B2C enterprise, or even a non-profit organization, it needs to build a brand. When we donate to a non-profit organization, we will also ask whether to donate to One Foundation, the International Red Cross, or the Chinese Red Cross. Donating to different organizations will make the donors have different behavior patterns.

2. The basic unit of corporate strategy is brand strategy

McKinsey, the world's most famous management consulting firm, believes that strategy is taking coordinated actions around a goal. McKinsey's definition does not reflect the brand and customer mindset, but mainly reflects operations and improvements.

Porter, the father of competitive strategy, defines strategy as: strategy is to create a unique value positioning through a series of different operational activities. Porter divides strategy into three basic types: cost leadership, differentiation, and focus. Brand marketing professionals believe that strategy is to make your company and products stand out in the minds of potential customers.

In fact, these three statements are not complete and instructive enough. If we start from the basic unit of competition, the brand, the basic unit of strategy is the brand, and divide the strategy into corporate strategy and brand strategy, corporate strategy is equal to the sum of brand strategy. Corporate strategy is used to discover opportunities for new categories or new positioning, and then brand strategy is used to capture the right opportunities. To capture one opportunity, a single brand strategy is usually adopted, and to capture multiple opportunities, a multi-brand strategy is adopted. Therefore, there is a difference between single brand strategy and multi-brand strategy in corporate strategy.

Brand strategy = positioning × matching: Xiaomi's new quarterly financial report has just been released and is still hot. Let's take Xiaomi as an example. From the perspective of corporate strategy, Lei Jun is an excellent entrepreneur. Lei Jun discovered four important opportunities during the time window: the mid-range smartphone Xiaomi, the mobile social software Mi Chat, the low-end smartphone Redmi (now renamed Redmi) priced at 1,000 yuan, and the smart hardware Mijia. The above are all the successes of Xiaomi's corporate strategy, which discovered major category opportunities and tried to capture them.

But it is also a mistake in brand strategy. All of the above are brand extensions of Xiaomi. When the brand extension is tied to Xiaomi, it not only destroys the expert brand image of Xiaomi mobile phones, but also affects the independence of channel brand selection such as "Xiaomi Mall".

As a channel brand, Xiaomi Mall should make choices and quickly add products that should be available in the new generation of digital stores according to the customers’ perception. (Supplementary explanation of the matching: matching refers to the brand operation activity system within the enterprise, which ensures the uniqueness of positioning and gains competitive advantage. The matching system makes it difficult for competitors to imitate and enter the market).

Volvo has nearly half of the world's automobile safety patents, so its safety positioning is very solid. Red Bull, Wanglaoji, Coca-Cola and other brands can obtain high market share and profits, which is also due to their good performance, making the entry barrier of competitors extremely high.

3. The best strategy to win the market is to focus

Focus in business means using all resources in a coordinated way to achieve a single goal. The focus is a single goal. However, a single goal is difficult to set. It can only be truly implemented by combining it with specific strategic theories. Strategic focus can start with brand focus. Brand strategy naturally conforms to the law of focus.

The focus of brand strategy is the first step in the focus of corporate strategy: the focus of brand strategy has a dual meaning. The first is the cognitive focus on the mental battlefield, and the second is the operational focus on the physical battlefield.

Cognitive focus considers cognitive efficiency, how to reduce the load and resistance of communication, usually "less is more". Operational focus focuses on operational efficiency, not the less the better, but to take into account economies of scale and scope. McDonald's cognitive focus is hamburgers, KFC's cognitive focus is fried chicken, but in terms of operation, both companies sell hamburgers, fried chicken, French fries, cola, ice cream, etc., taking into account economies of scope, and behind this is complementary consumption and related consumption. This is what it means to be inconsistent in words and deeds. Words and deeds are not the same thing. We must avoid dogma.

The process of focusing is a process of establishing first and then breaking. The things to be established must be tested. After seeing the effect, you will have confidence to break. There are also methods to break. You can use the ratio of the last elimination, or you can control the speed. Focusing means subtraction. Subtraction is to release those resources that are occupied inefficiently, add them to the focus, and do addition on the focus, so that you can avoid mediocrity. Subtraction requires courage, but addition on the focus requires creativity, which is more important and more difficult.

4. The cornerstone of building a brand is to occupy the category

Category is the last level of classification before customers make a purchase decision. Customers can associate brands from this classification. When buying cola, they can associate it with Coca-Cola; when buying functional drinks, they can associate it with Red Bull and Dongpeng; when buying herbal tea, they can associate it with Wanglaoji; when buying mineral water, they can associate it with Nongfu Spring; when buying sugar-free drinks, they can associate it with Yuanqi Forest. We can think of the category as an iceberg, and the brand is just the tip of the iceberg. You can put the brand flag on the category iceberg.

When this category is growing, you will feel that you are getting bigger and bigger, but when the iceberg is melting, no matter how hard you try, you will fall into the water sooner or later. So when the iceberg melts, the brand enters a strategic retreat period, and we have to start the second brand, that is, the second growth curve.

Sometimes, even if the iceberg has not melted, the leading brand can easily cover the top of the mountain. For example, Samsung is positioned as a large screen, and the large screen feature is easy to be covered by the leader. When Apple launched a large-screen mobile phone, Samsung was silenced.

There are three types of categories: concrete categories, abstract categories, and abstract categories.

1. Specific categories: When we mention the category of oranges, we think of Chu Orange. Although it does not have very high sales, the brand is well-known. As long as the supply bottleneck is solved, it can grow rapidly. Before, Chu Orange was defined as rock sugar orange, and the supply bottleneck was too obvious. Now it has expanded the definition of Chu Orange to represent high-quality oranges, and the supply bottleneck of product selection has been solved.

2. Abstract categories. Abstract categories are categories that customers will consider in their purchase decisions but cannot complete. When we renovate our homes to a certain stage, it is time to buy electrical appliances. Electrical appliances are an abstract category. We must be specific to refrigerators, air conditioners, washing machines, rice cookers and other categories to complete the purchase decision. An abstract category has a characteristic that it can be transformed into a specific category by adding a word representing the sales place or sales method, also called a channel category, such as "electrical appliance mall": Suning Appliance, "fruit store": Baiguoyuan.

3. Pseudo categories. Pseudo categories are concepts that customers will not use in their purchasing decisions. However, due to the internal thinking of the company, when these concepts are used to communicate with customers, they become pseudo categories. If it is only used within the company, it should be a professional and academic classification. But when you use it to communicate with customers, it is not valid and becomes a pseudo category because customers don’t understand it, such as white goods, kitchen appliances, motor vehicles, etc.

5. There are five types of corporate strategic focus

The first type is a single brand dominating a positioning. Most small and medium-sized enterprises may only have one brand, so its corporate strategic focus type is a single brand dominating a positioning. For example, Zhou Hei Ya dominates the brand positioning of mid-to-high-end duck necks.

The second type is that multiple brands dominate a category. Some categories have multiple important characteristics, and it is difficult for a single brand to dominate. A typical example is General Motors. In the Sloan era, there were five brands: Buick, Chevrolet, Pontiac, Oldsmobile, and Cadillac, which occupied 60% of the North American sedan market. In the same category, the supply, production, and marketing systems are usually similar, so it can generate synergy, solve many resources, and compensate for the dilution of entrepreneurial talent.

The third type is when multiple brands dominate an abstract category. If the category is relatively small and cannot accommodate the accumulated resources and capabilities of the enterprise, it will enter the focus of multiple brands dominating an abstract category. The source of synergy of abstract categories is also similar supply, production and marketing systems. The representative enterprise is Coca-Cola. Carbonated beverages are an abstract category dominated by five brands: Coca-Cola, Sprite, Fanta, Xingmu and Tab.

The fourth type is multiple brands leading a value network. Coca-Cola has begun to dominate a larger soft drink category with multiple brands, such as Ice Dew, Pure Water, COSTA Coffee, Minute Maid, etc. This is multiple brands leading a value network. The value network is a business network composed of related upstream and downstream categories. It is usually an opportunity that only exists because of disruptive innovation. Create a value network through disruptive innovation. During the development of the value network, you can promote new brands to dominate this opportunity.

The fifth type is focusing on the main business + strategic investment. Alibaba also has multiple brands leading a value network. When Taobao was doing e-commerce, banks did not provide supporting payment, so it developed Alipay. Alipay had change, so it developed Yu'ebao, which has now become the world's largest money fund. E-commerce needs logistics, so it created Cainiao, and later Sesame Credit, etc.

The e-commerce value network has begun to expand offline again. The new retail value network can no longer support it, so it has entered the fifth stage, called core business focus plus strategic investment. This is also a type of focus, which is minimal diversification and has corresponding synergy effects. The move of multiple brands to abstract categories is the synergy of the supply, production and marketing system. Transactions within a value network can reduce transaction costs to a certain extent, especially in the era of big data. The data of the entire value network can be gathered together to produce greater efficiency.

6. Three things to know when building a brand

First, be clear about the categories and efficiently match customer needs. I believe that the contribution of categories to matching customer needs is more than 60%, and the remaining 40% is completed by differentiation and credibility. Positioning theory mentions that "customers think in categories and express with brands", that is, customers think about their needs in categories. When a need arises, they immediately think of what they want to solve, and then use brands to assist in their choices.

After Juewei Duck Neck was launched, they thought the word "Duck Neck" was too low-end, so they removed it. As a result, sales declined. They had no choice but to bring the word "Duck Neck" back. At first, they made it smaller, and sales increased, but they did not recover. Finally, they restored the word to its original size, and sales also recovered.

The second is to clearly recognize that categories are inherently unequal. Categories represent the biggest opportunities, because most brands are established by creating new categories. However, categories are inherently unequal, and some are strong and some are weak. The category itself needs to complete a "mental pre-sale" process, that is, whether it can enter the customer's shopping list.

If consumers only make a temporary purchase decision on the spot, it is considered a mental pre-sale of an unfinished category, which is a weak category. The most common pitfalls for companies, investors, and entrepreneurs are weak categories.

On the contrary, it is a strong category. There are also some categories that are medium to weak, which can complete mental pre-sales by themselves, but often have excess performance, and most companies can meet customer needs. At this time, customers are unwilling and do not need to remember the brand specifically, such as glue, nail clippers, staplers, etc.

Weak categories are not conducive to building expert brands, which makes it difficult for us to create brands. However, brands are the core results of business operations, so we must look at brands flexibly, both from the perspective of customers and from the perspective of reducing transaction costs and information costs.

There are several ways at this time. One is to be endorsed by a strong channel brand, such as Walmart Select; one is to extend a strong brand, such as Dole; and another is to take a step back and become a supplier brand. At this time, you will find that the value center plays an endorsement role, providing value protection, and even demonstrating the value is the channel brand, such as Baiguoyuan.

The third is to clearly recognize that category differentiation can bring opportunities. New categories generate new positioning opportunities, that is, new brands are born, and new categories mainly come from category differentiation. The dynamics of category differentiation is that as a category grows, customers gradually become more and more diverse, but it is impossible to satisfy every customer in a differentiated way. Only when niche demand reaches a critical economically feasible scale will some products be differentiated in a targeted manner; when differentiation reaches cognitive isolation, customers think this is another category, and a new category is formed.

Therefore, cognitive isolation is the sign of the formation of a new category. However, because customers’ cognitive standards, differentiation standards and differentiation paths are not unified, there is still a phenomenon of incomplete differentiation.

For example, when it comes to wine, heavy users are quite differentiated into white wine, red wine, and sparkling wine. Red wine is further divided into Cabernet Sauvignon, Cabernet Sauvignon, etc. But for wine novices, there is only red wine and white wine.

If you can discover a new force of differentiation, you may find an opportunity for a huge new category. A strong new category will usually create a strong new brand, or even several new brands.

7. To build a brand, you need to know clearly how you are different

"What's the difference" is to clarify the positioning. Positioning is not only about determining the category, but also about the position in the category, that is, differentiation. Therefore, a clear positioning must form a competitive difference for customers. One criterion is whether customers will ask "so what". "Mind map" is often used in positioning - draw concentric circles, with the category in the center and the related brands in the market listed in the outer circle, and then see what position these brands have occupied, and whether there is a blank position that is valuable to occupy.

Differentiation can be attributed to certain characteristics of the category. We need to break down the concept until we can grasp it. Category characteristics refer to the differentiation concepts that can influence customer choices and are attached to the category. They can be divided into two categories: physical characteristics and market characteristics. When looking for differences, we can look for them from physical characteristics and market characteristics.

8. Branding requires telling users clearly why they are different

How do we know this? It can be seen from three aspects.

First, you can start with the brand's effective promises. Some effective promises are explicit, that is, they are typed in black and white, or written in the terms of service, or even written on the doorplate. Promises such as free tasting and refunds if you are not satisfied with the trial will reassure customers at first sight.

There are also some implicit promises that customers may regard as explicit, such as prestigious founders, corporate reputation, dedicated assets, registered capital size, etc.

Second, customers can verify it themselves. Products are the most direct credentials. The product itself, packaging, etc. can be directly perceived. The product's sales location and service are also part of the experience. On-site experience is an important credential, and past experience is an even more important credential. As long as customers have truly experienced it, what they say may not be important.

Another is visibility. If a brand is not seen everywhere, customers will not believe it. Another is related cognition. For example, customers believe that walnuts can nourish the brain and herbal tea can relieve internal heat, which are common knowledge among customers. The clustering phenomenon of brands can also serve as a certificate of trust.

Third , we can start with the certification of a trusted third party. Other customers are our important credentials, such as typical customers, success stories, word of mouth, etc. There are also neutral third parties and non-neutral third parties. Whether they are neutral depends on the customer's perspective. If the customer believes that they are neutral without spending money, they are non-neutral if they spend money. For example, customers believe that news reports are free of charge, so they believe them.

In the upgraded positioning theory, Dianping is a shopping guide brand, an opinion leader statistics agency, and a neutral third party; guarantee/insurance agencies, well-known partners, strong media advertising, celebrity endorsements, etc. are non-neutral third parties.

9. Do a good job in the four major aspects of branding

Matching 1: Brand name. A good brand name can bring huge profits. It will make people feel good when they hear it, and make people think it is an expert brand, and they will remember it after hearing it once. A bad brand name is like sand in your shoes, which makes you more and more tired, makes people feel unprofessional, and makes people forget it even after hearing it three times. It also increases the difficulty of referrals, and ultimately costs more extra costs.

The second thing to name is the category. Not all entrepreneurs have the opportunity to name the category, but many entrepreneurs are doing innovative things and creating new categories. Then you must name the new category. This is your unshirkable task. If you fail to do it well, it will seriously affect the development and growth of the category.

The third is advertising. Every contact point with customers is an opportunity for positioning communication. All actions in dealing with customers can spread your positioning. However, advertising is still unique. It is the most expensive way to communicate positioning. Therefore, advertising master John Wanamaker said, "I know that half of the advertising budget is wasted, but I don't know which half." A good advertising slogan must meet the "two languages ​​and three qualities" rule. Two languages: sales language and customer language; three qualities: feasibility, competitiveness and infectiousness.

Matching four, draw out the brand's business canvas, which includes corporate strategy, brand positioning, supply system, products, customers, reach, conversion, lock-in, and expansion. Corporate strategy includes category analysis, whether it is a single brand strategy or a multi-brand strategy; brand positioning requires competition analysis. After answering the three questions of the brand, we can define the product, have the concept of the overall product, and service is also part of the product, as well as the product portfolio; there are many classification methods for matching in the supply system, and different classifications of matching have different processing methods. Many times, we can establish competitive barriers in places that we cannot see.

The definition of a business model is actually the transaction structure of stakeholders. What we are talking about is a brand business model, the core of which is the transaction structure between the brand and the customer, which is divided into reach, conversion, lock-in and amplification. Reach is how to reach customers, including channel reach, media reach, advertising, public relations, etc. Then conversion is a more important link, one is brand presentation, and the other conversion is pricing strategy. Different pricing strategies bring different conversion rates and profit returns. Price is not a number, but a contract structure.

The next step is lock-in, which includes product lock-in and relationship lock-in. In the final analysis, the product must be strong. Once customers use the product, their past experience becomes the most important certificate of trust.

However, it is not enough to just have strong product power. Sometimes we also need to adopt relationship lock-in, such as membership system. The last link is expansion. Let old customers and sold products bring new customers, including product expansion and social expansion, which also requires strong product power. Sometimes we can also motivate them by making some recommendations.

When expanding this link, thinking of more tricks will achieve very significant results.

Author: Liu Yichun

Source: WeChat public account "Liu Yichun's Brand Business Innovation (ID: shangyeyiguohui)"