IBM continuity (1956-1972)

IBM international recognition (1972-to present)

Figure 6.2 Brand Logo in high technology: the example of IBM. (From: [19] © Copyright IBM Corporation 1994, 2004. All rights reserved. Reprinted with permission.)

► The current version of the logo was introduced in 1972 with the arrival of a new CEO, Frank T. Cary, and at a time when computer technology was revolutionizing the industry with the rise of DEC and HP minicomputers. The eight horizontal negative bars replacing the solid letters were to suggest "speed and dynamism" according to IBM. Since then, this dynamic and powerful logo has remained as constant as IBM's leading position in the information system industry.

Colors are also part of the brand image. They help to identify and differentiate. For instance, while the IBM logo is made of blue letters (IBM is also known as "Big Blue" in the computer industry), Apple's logo represents a multicolor bitten apple with no name. Similarly, orange is the color of Orange, the telecommunication operator, and is in deep contrast with the red scarlet of its main competitor, Vodafone.

The fourth element of a brand image is the tag line. Some brands do not have any tag line. Others do, such as HP "Invent," IBM "Computing on demand," and Intel "inside." A tag line is not only for corporate branding, but also for product brand (e.g., "the centre of your digital world" for the Pentium 4 processor or "Turn your sense in communication" for the first Samsung 180° camera phone). An effective tag line should reflect a convincing truth and reflect the positioning of the product or of the company.

Brands are not built by advertising only but by the customer brand experience [20], not only through the product, but also through the company's employees and distributors and all the company communication (see also Chapter 8).

A strong branding strategy is based on three key principles: dominance, exclusivity, and singularity.

A dominant brand is the one that comes first in customers' minds before those of competitors. Usually, in a consumer's sequence of thought, first the product category is identified and next the brand comes to mind. Dominant brands have greater returns than their competitors [21]: On average, the "top of mind" brand has a return on investment of 34%, while the second competitor has 21%, and the third has 16%.

The value of a brand is correlated to the degree of awareness in customers' minds. It is said that Logitech, at that time a PC mouse-maker, decided to enter the keyboard business when a poll of users voted Logitech as the number-three brand in keyboards though the company wasn't even selling keyboards at the time, but its name stood out permanently on the mouse close to the PC keyboard. Since then, the company has sold more than 30 million cordless desktops—a package including a keyboard and mouse devices.

Typically, a powerful brand will go through various stages:

► From zero awareness;

► To assisted recognition, when it is mentioned in a list of brands submitted to respondents;

► To unaided recall, meaning that the respondent associates the brand name directly with a given product or communication message;

► To "top of mind," when the brand is mentioned first without any assistance.

However, strong brand recognition also means a significant amount of money invested up front to promote the brand. The human mind does not build up favorable impressions slowly over time (see Figure 6.3). Usually, once a customer's mind is made up, it rarely changes, and a perception that exists in the mind is often interpreted as truth. Consequently, a strong branding strategy for a new product or technology requires a "big bang" to establish an initial position in customers' minds; only then can subsequent input strengthen and sustain this first impression.

An exclusive brand is a must because experience and research show that two brands cannot both occupy one position at the same time. Even worse, any major communication investment by the second brand usually reinforces the leader's position with customers by making the association more salient.

Finally, a single brand cannot occupy two distinct positions at the same time in customers' minds. When one position increases, the other must decrease. This is the main reason why it is very difficult to sell the same brand to both businesses and consumers. For instance, IBM has a strong image in business that does not translate well in consumers' minds. Conversely, Microsoft had to invest heavily to promote Windows NT as a "serious" operating system for the business environment, because Windows was perceived much more as a consumer product for individual users. Intel is seen as a prime vendor of microchips, but has not yet achieved credibility as a vendor of multimedia solutions.

Incremental sales

Incremental sales

Figure 6.3 The S model of customer response to brand awareness.

Respecting the three conditions of dominance, exclusivity, and singularity is achieved through a good segmentation process and the right choice of positioning. For a given segment, if a brand cannot be first in a product category or own a particular association, it must be positioned on a new dimension that either opens a new category or divides the existing one. Such is the strategy of Apple, which is (re)positioning the Mac as the hub of a digital lifestyle thanks to the launch of the iPod, a Macintosh music player, in 2001 and the iTunes Music store, a service to download songs from the Net "with one click for only 99C each."

Other brand management decisions include:

► Line extension, that is, introducing additional items in the same product category, such as Microsoft did with the updated version of its software Windows (see also Section 6.1.3);

► Brand extension, that is, to launch new products in other categories like Samsung did when moving from microchips to cellular phones under the same brand name;

► Multibranding, that is, to introduce additional brands in the same product category like Xelibri by Siemens or Vertu by Nokia to reach new customers for their cellular phones;

► Cobranding, that is, to combine two or more well-known brands in an offer like the joint venture between Philips and Nike to promote their brands together in order to cross share their respective components (technology for Philips, youth and challenge for Nike);the first output of this joint venture was the launch in November 2002 of a very innovative "sportswear "music player, the Nike psa128max (also known as Philips act210), fashioned like an oversize wristwatch to wear on a wrist with a Velcro strap or on a clothing thanks to magnetic clip;

► Rebranding, that is, to reposition the brand because of changing customer preferences or new competitors. For example, in 2002, IBM tried to turn to its own advantage the images of computer mainframes as obsolete dinosaurs by branding aggressive code names such as T-Rex for the z990 and Raptor for the lower-priced z800. Similarly, in 2003 SAP renamed its flagship software "mySAP Business Suite," known since 1999 as;the drop of the "dot-com" suffix was a way to signal the end of the e-business mania of the 1990s and that the company was back to its core business.

Another issue is that brand owners have little control over how their brands are used and viewed. The increased use of Internet makes it even more difficult [22] with the dissemination of messages and products through chat rooms, bulletin boards, and newsgroups. Actually the Internet magnifies the major threats to brands, which are:

► Counterfeiting and fraud. For instance, illegal copies of branded software are sold at bargain price on the Internet.

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