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Marketing’s mission: create meaningfully different brands

Nigel Hollis
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If a brand is more meaningful, different and salient than its competition, it will likely command the highestmarket share value among its target audience.

Everything you do in business builds your brand for good or ill, as your actions generate feelings, associations and ideas in the minds of your consumers. The challenge is to make sure those actions create a “meaningfully different” experience that people want to repeat. That’s because consumers are predisposed to choose things that stand out from the crowd. A brand’s difference gives consumers an easy rationale for choosing it, and a ready justification for paying a price premium. Research by the consultancy firm Millward Brown finds that brands with a meaningful difference command a price premium 13 per cent higher than weaker category alternatives.

Look, for example, at Lululemon. Founded in 1998, Lululemon produces sports apparel for women that are fashionable, environmentally friendly and as technically advanced as sports apparel for men. The company spends virtually nothing on advertising. Instead, it concentrates on building an ardent consumer base by creating a unique customer experience. Instructors wear the clothing at in-store events like self-defense and goal-setting workshops, which helps to build product awareness and forge ties with the local community.

Through a portal on its website, Lululemon invites customers to share their experiences via Instagram and Twitter. Customers are also encouraged to apply to become “Lululemon ambassadors” — “unique individuals ... who embody the Lululemon lifestyle and live [its] culture.” The company now has more than 200 stores, and sales have soared from $40 million to $1.37 billion in just eight years. In the United States alone, sales grew 40 percent in 2012.

People have always been attracted to brands with meaning, whether their experience of that meaning is tangible and functional, or more emotional. And meaning drives volume: Brands that stand for something meaningful and different in customers’ minds can generate five times more purchases than less meaningful brands.

What role can marketing play in realising these results? For one thing, we know that getting the word out about a brand can help make it “salient” — that is, increase customers’ awareness of the brand, so that they remember it when they’re making purchasing decisions. The faster a brand comes to mind in relation to a specific need, the more likely it is to be chosen. And brands that are meaningfully different are the most likely to benefit from a marketer’s efforts to improve salience. A good marketing team not only ensures that the brand is included in the customer’s consideration set; it powerfully influences which aspects of that brand the customer notices and experiences.

The yogurt company Chobani provides a good example of how a product that delivers a noticeably different experience can overtake the competition. The company came along in 2005, after years of focus on low-fat products had left the U.S. yogurt market vulnerable. Chobani’s brand strategy leveraged the taste, texture, affordability and authenticity of its “real” yogurt. Consumers responded enthusiastically and the brand attained mass distribution in just two years. In five years, the company held more than half of the Greek yogurt market in the U.S., and nearly 20 per cent of the total yogurt market. By 2011, Chobani was the No. 1 yogurt brand in America.

Or consider the Mini Cooper, a car that re-entered the U.S. market in 2002 after an absence of 30 years. Younger, non-traditional car buyers were attracted to the unique brand appeal of the Mini Cooper’s compact size, fuel efficiency and sporty performance. The company relies on clever stunts (challenging a Porsche to a race), event marketing (annual road trips for owners) and offbeat outdoor advertising to stand out in a crowded marketplace and appeal to non-traditional consumers. As a result, Mini has grown from having one model available in the U.S. to offering seven models at 119 dealers across 38 states. Sales in the U.S. have eclipsed those in the U.K., and the company posted a 26 per cent sales increase in 2011 and a 15 per cent increase in 2012. Mini’s well-defined, targeted brand has had a solid impact on its bottom line.

By working in ways like these to make a brand more meaningful, different and salient, marketing can drive the positive consumer behaviours that yield financial growth. Our analysis of the annual reports for 49 corporate brands found that the strongest brands returned an average of 31 per cent more operating profit as a proportion of revenues than those that lacked meaningful differentiation. Additional analysis looked at changes in value market share over time and found that meaningful, different and salient brands are also four times more likely to grow.

These findings should come as no surprise. Strong, profitable brands are meaningful to their consumers, perceived as different from the competition and are more salient than the alternatives. These qualities determine how likely people are to choose a brand, pay a premium for it and stick with it in the future. If a brand is more meaningful, different and salient than its competition, it will likely command the highest market share value among its target audience. And this value is what will drive sales and profits, not just for now but for a while down the road.

Nigel Hollis is executive vice president and chief global analyst at brand research consultancy Millward Brown, and the author of “The Global Brand: How to Create and Develop Lasting Brand Value in the World Market.”

His newest book is “The Meaningful Brand: How Strong Brands Make

More Money.”

© 2013 Harvard Business School Publishing Corp.

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