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Brands have become a strategic tool. And as Professor Jean-Noël Kapferer highlighted in his latest book on brands, The New Strategic Brand Management (5th edition), branding goes far beyond the marketing department – it involves the entire company. Here he challenges some common misconceptions on the subject.
A brand is a public contract that the company enters into with its audiences. This contract involves everyone in the company, and branding is much more than a product name - it encompasses the global experience.”
— Professor Kapferer
Take Toyota. What makes it one of the best companies in the world? "It’s the people on the production line,” says Professor Kapferer. “Workers are part of delivering the promise of quality.”
As in the Toyota example, it’s apparent that people – not robots or algorithms – make up brands. Professor Kapferer notes that it takes time for a company to really unite its workers behind its brand. Taking branding out of the marketing department creates a shift from a vision that is more tactical, or short-term, to one that is strategic, or long-term. Positioning company employees so they carry the brand is a step toward that strategic vision. The reputation of a business school, for example, is built by everyone from the students to faculty and staff. In short: people make brands, and therefore brand management can be equated to people management.
"A lot of people still think in terms of the four Ps,” says Professor Kapferer. That is: product, price, place and promotion. “From the standpoint of the consumer, the four Ps are meaningless,” he says. So what is the key point from the perspective of the consumer? Customer experience.
Companies are moving from managing the brand to managing by the brand. The difference? Managing the brand means making decisions about what the company stands for. Managing by the brand, on the other hand, takes into consideration what concerns the entire company. Companies have found there is a lot of internal pride in brands. Employees often refer less to their company and more to the brands on which they work. For instance, someone might say they work on Tide before saying they work for Procter & Gamble.
In the past general managers were judged, evaluated and eventually promoted by looking at their sales and profit figures,” says Professor Kapferer. "This is still true, but what is new is that now general managers for each country are also asked to build the brand capital." They are judged not only on sales and profits, but also on whether they have enhanced the brand reputation effectively.
To illustrate what it means for a company to be transformed by its brand, Professor Kapferer points to telecom giant Orange. Once a private company, it was purchased by a telecom monopoly that decided it would become Orange over a 10-year period – that it would not only take over the internet service provider’s name, but also its values, promises and excellence. The success of Orange demonstrates why companies often opt to keep the name of company they’ve purchased.