Creating a Sustainable Competitive Advantage

There are several concepts you must consider to create a sustainable competitive advantage for your business and your brand. Here are some of them:

• Dream big. 
• You must have deep insight into your customers' values, attitudes, hopes, aspirations, anxieties, fears, needs and desires.
• Perform deep market segmentation analysis. This should include need segmentation.
• Discover customers' frustrations and pain points, things they wish could work better. 
• Address all of those frustrations and pain points. 
• Challenge your category definitions and your business model assumptions. 
• Consider vertical and horizontal integration.
• Consider product/service bundling and unbundling. 
• Drive your business off of proprietary systems, technologies and processes.
• Find a way to make your business scalable. 
• Create a business model that benefits from network effects.
• Your business and brand must stand for something and live consistently by a carefully chosen set of values. 
• Link your sales and marketing processes and messages seamlessly.
• You must say "no" to revenue sources that are not in your bulls-eye. Otherwise, you will become distracted and be taken off the game that you are best suited to win.
• Actively engage with your customers on a regular basis, even before revenue streams occur.
• Constantly reinvent your business model, products and services. Throw out what doesn't work and keep what does. In this way, continue to evolve. Your competitors will not stand still. 
• Stay in the business flow. Stay close to your customers and your markets and your competitors.
• Form as many strategic partnerships as possible. Always try to create a win-win situation.
• Do not try to steal share from competitors. Rather, focus on creating enhanced value with your customers and in the industry. Expand the pie rather than trying to take someone else's slice of it.
• Become an expert and a thought leader. 
• Play your own game. Do not get sucked in to matching your competitors' every move. 
• Craft your brand's story. Make sure it is emotionally compelling and purchase motivating. 
• Find the big influencers in your industry. Befriend them. Learn from them. Influence them.
• Always be honest. Never lie about anything. If you lose your trustworthiness and integrity, you lose everything.
• Remember, your business will only do well if it focuses on helping its customers, employees and business partners. Organizations thrive because they are meeting real needs and helping others achieve their goals. 

Trademark Law

As a brand steward, you must be aware of the laws under which legal protection is available. First, trademark law protects a brand’s identity. That is, it protects names, titles, taglines, slogans, logos, other designs, product shapes, sounds, smells, colors, or any other features that distinguish one source of products or services from another. Trademarks that protect services are often called service marks (“SM”). There are also “collective membership marks” (e.g., Boy Scouts of America) and “certification marks” (e.g., UL approved). Harley-Davidson filed to federally register the sound of its motorcycle engines. Dirt Devil vacuum cleaners are strongly associated with the color red. Geico owns the gecko icon. 

Trademarks, like brands, build in strength over time. The test for trademark infringement is “confusing similarity.” Put another way, if the average consumer believes both products to have come from the same source, there is infringement. Obviously, the more a consumer is familiar with a particular brand, the more defendable its mark. That’s why it behooves a company to do the following:

• Choose a distinctive mark, including a “coined” name. As I mentioned in the chapter on brand identity, brand names range from generic and descriptive to suggestive and arbitrary or fanciful (“coined”). Obviously it takes longer to build meaning for coined names, but they are also more distinctive and easiest to protect legally. Kodak, Xerox, and Exxon fall in that category. Suggestive marks are the next most protectable. Examples include Coppertone, Duracell, and Lestoil. Even common words can be used as trademarks as long as they are not used descriptively. These common words/phrases are also suggestive marks: Amazon (big), Twitter (brief and chatty), and Apple (different, offbeat). Descriptive marks are not protectable unless the brand creates a secondary meaning for the word, such as Weight Watchers, Rollerblade, or Wite-out. Generic marks, such as Shredded Wheat and Super Glue, are not protectable at all.
• Avoid geographic names as a part of your mark—they can be the basis of trademark refusal.
• Register the mark.
• Be consistent in the use of the mark.
• Create strong trade dress (as discussed later in this chapter).
• Widely advertise and distribute its trademarked products.
• Do all of this over a long period of time.

Because the strength of a mark is dependant upon consumers’ familiarity with it, it is much easier for a competitor to neutralize your mark soon after it has been introduced than after it has been in use for a long period of time. Courts use the following tests to determine infringement:

• Strength of the trademark claiming infringement.
• Similarity of the two marks.
• Evidence of consumer confusion.
• Care a consumer takes in comparing products.
• Intent of the organization in using the potentially infringing mark. (Some drugstores and grocery stores use generic brands that emulate a leading brand’s package shape, colors, typestyle, formulation, etc., and display the product side-by-side with the leading brand to imply that there are no differences between the two, encouraging consumers to purchase the lower-priced generic item. In this situation, there is clearly intent to emulate the leading brand and reduce the perceived differentiation and value advantage of that brand, but it is not clear that there is intent to deliberately cause confusion as to source.)
• Relatedness of the two businesses.
• Overlap between communication and distribution channels.

By using the mark in association with your products and services over time, you gain trademark protection. Registering your mark (marks can be registered at the state and federal levels) provides additional protection. Although common law and federal trademark statute protect an unregistered mark, registering your mark transfers the burden of proof to the second comer in challenging a mark’s registration. With federal registration, you can sue infringers in federal court. Also, after five years of registration, the mark becomes incontestable. Federal trademark registrations last ten years and can

be renewed every ten years ad infinitum.

You can acquire trademark rights in one of two ways. To acquire trademark rights based on use in commerce, you must be the first person or organization that uses the mark in conjunction with the products or services for which trademark protection is sought. To acquire the mark base on intent to use, you must apply to  register the mark through the United States Patent and Trademark Office.

Before choosing a trademark, first conduct a simple search to weed out marks that are not available. This search can be done online for free (for a list of online resources go to www.brandforward.com). After that, for the remaining candidates, conduct a full search through a law firm specializing in trademark law or through an experienced trademark search firm.

Strong brands run the danger of becoming category descriptors. Always use trademarks as adjectives, not verbs or nouns. If your brand is in danger of becoming a category descriptor, consider talking about your brand in the following way that differentiates the brand from the category. For example: “Jell-O® gelatin,” “Kleenex® facial tissue,” and “Xerox® photocopier.”

Note: I am not a lawyer and this blog post is not legal advice, but rather is meant merely to help you consider the legal issues in brand management. When actually dealing with any specific issues in this area, please consult with lawyers who have an expertise in intellectual property law.

(c) 2016 Brad VanAuken. Reprinted from Brand Aid, second edition.

Measuring Brand Insistence

What can strong brands accomplish? They can lead to increased distribution and sales. They can command price premiums. They can create emotional connections with customers. They can lead to greater customer loyalty. They can inspire customer advocacy. They can help attract and retain desirable employees. They can make it easier to enter new product and service categories. They can increase bargaining power in business negotiations. They can make it easier to transcend business crises. And they can increase stock prices and add to shareholder value.

So, if brands are such valuable assets, it makes sense that they must be managed. And you can’t manage something without metrics. Which leads us brand equity measurement.

First, let’s define brand equity. Brand equity is the value that a brand brings to its branded entity and that entity’s products and services. I outlined the elements of that value in the first paragraph of this article. 

So, what then should we measure? I have spent years refining and validating a brand equity measurement system that measures the five drivers of customer brand insistence – awareness, relevant differentiation, value, accessibility and emotional connection.

© Brad VanAuken 1999-2016

Awareness

Awareness is the cornerstone of strong brands. Awareness must be present for all of the other factors to come into play. Awareness is strongly correlated with brand preference and brand quality perceptions. We have found that open-ended questions measuring first recall and other recall top-of-mind brand awareness within specific categories are the most predictive measures of awareness. We can also measure brand awareness associated with delivery against specific customer benefits. We also ask the close-ended brand familiarity question.

Relevant Differentiation

Most brand equity measurement models measure relevant differentiation and ours does too. We measure relevance within particular product categories and we can measure relevance against specific customer needs. We also measure the importance of up to 24 customer benefits and shared values. The benefits can be functional, emotional, experiential or self-expressive.  We also measure the brand’s perceived delivery against these 24 benefits and shared values.  We then plot benefit importance versus delivery on a radial coordinate chart creating a brand positioning map. We overlay the same information for up to three of the brand's most important competitors to identify brand positioning opportunities and threats. Further, because brands are owned in the minds of customers, we ask an open-ended question or two about top-of-mind brand associations and differentiators. We hand code and quantify the responses for highest accuracy.

Value

Few other brand equity measurement models measure this. Value has a numerator and a denominator. The numerator consists of the bundle of benefits the brand delivers. The denominator recognizes that there are financial, time and other costs to receiving those benefits. Value can be understood as the ratio of these two. We measure perceived value of the brand. We also measure perceived quality of the brand.

Accessibility

Accessibility is most important for location-based brands (retail, restaurants, etc.) but is important to some degree in every category. Accessibility comes into play when a customer has to decide between a preferred brand that is less accessible and another brand that is more accessible. When the difference in accessibility between brands is significant, people often choose the more accessible brand.

Emotional Connection

Many academic disciplines have demonstrated that, even though we might consider ourselves to be highly rational, we are still largely driven in our decisions by our emotions. This is true not just for consumer brands but also for business-to-business brands as well. We have four distinct measures of brand emotional connection. Each one measures a more intense emotional connection. 

These five brand insistence drivers work in the following way. Brand awareness and relevance may lead to the brand’s inclusion in the consideration set. Brand differentiation and value may lead the brand being preferred. And brand accessibility may lead to brand purchase. Emotional connection to the brand may lead to brand loyalty and advocacy.

© Brad VanAuken 1999-2016

Other Measures

Our brand equity system also measures customer loyalty (two common and well-validated measures of attitudinal loyalty: (1) Would you recommend this brand to a friend? and (2) Knowing what you know now about the brand, would you use this brand again? The system also measures brand personality (against a large battery of personality attributes), other brand associations and brand vitality (two measures).

Competitor Brand Equity

Understanding that brands do exist in a vacuum but rather in a competitive environment, our brand equity measurement system measures each of these components not only for our clients’ brands, but for their competitors’ brands as well.

Other Possible Brand Equity Measures

• The price premium that the brand commands over other more generic products in its relevant categories
• The amount the brand decreases price sensitivity
• Distribution and market share relative to competitors
• Brand preference
• Brand purchase intent
• The portion of the stock price that is attributable to brand equity

Note: BrandInsistence(SM) is a proprietary brand equity measurement system developed by Brad VanAuken and offered exclusively by BrandForward, Inc. 

You can read more about this in Brand Aid, second edition.

Unique Value Proposition

When people talk about brand positioning, they often talk about the brand's promise and its relevant differentiated benefits. A brand should promise relevant differentiated benefits. These benefits can be functional, emotional, experiential or self-expressive. Further, the brand could promise shared values instead of a benefit, though shared values often result in a self-expressive benefit. Then the brand promise requires proof points and "reasons to believe." Finally, and most importantly, the brand needs to deliver on these benefits.

However, there is a term I like equally as much as brand promise. That is the brand's "unique value proposition." Why do I like this term? It is succinct and captures the three most important parts of a brand's promise. Proposition is equivalent to promise, so it is the first two words that modify the third word that make all of the difference. The promise or proposition must be of value to its target consumers. "Value" says everything. If it is not valued, it is inconsequential. Value implies relevance. Next, the valued promise or proposition must be unique. Contrary to common usage, there are not degrees of uniqueness (such as mostly unique or totally unique). Something is either unique or it is not. That is a high standard but anything less may not be enough to create a strong brand. 

So whenever you think about your brand, be sure you know exactly what its unique value proposition is. If you don't, it's time to get to work. 

Sources of Brand Differentiation

Brands benefit from a wide variety of sources of differentiation. While many components can contribute to the differentiation, often there are only one or two dominant ones. For instance, Absolut vodka benefits from its unique bottle shape and the promotion of that unique shape. GEICO insurance benefits from its huge advertising budget and it unique and quirky advertising including its charming gecko character.  On the other hand, Amazon.com benefits from from being one of the first brands to adopt the online retail model, including its very powerful search and browse technologies. Also, the fact that it plows all of its profits back into business improvement. Uber benefits from a breakthrough business model and the technology that supports it, which drives costs down substantially while improving the customer experience. Robert Graham clothing benefits from its bold product designs, coupled with its highly unusual product features (i.e., custom designed Swarovski crystal buttons) and its interesting tagline - Knowledge, Wisdom, Truth. Tesla Motors automobiles benefit from a visionary product concept (all-electric luxury car), supported by leading-edge high quality luxury features and a relentless pursuit of excellence. Opaque restaurants benefit from a unique restaurant concept - dining in the dark.

While all of the benefits listed above might be classified as some combination of functional, emotional, experiential or self-expressive customer benefits, those benefits derive from different sources. In some instances, it is the result of product design, marketing strategy or advertising genius. In others, it is the result of radical new business models or organizational cultures driven toward excellence.

The point of this is that sometimes marketers create the primary source of differentiation, while in many instances it is something that is typically outside of the marketer's control - visionary leadership, business model design, product design, organizational design, the organization's culture, etc. - that leads to the brand's differentiation.

Think about what differentiates your brand. Visionary leadership, disruptive technologies, radical new business models and cultures of unrelenting excellence often can have a much greater impact than what a marketer can control. What do most all of these have in common? They are are based on a design and innovation mentality, whether it applies to business model design, organization design, product design, product packaging design or marketing strategy/tactic/campaign design, there is some level of design and innovation in each of these examples.

Five All Time Favorite Blog Posts

I started an online brand management newsletter in 1999. It ran for a few years. Then I jumped on the blog bandwagon in the early-to-mid 2000s. Since then, I have contributed to dozens of brand management and marketing blogs, including this blog, which I started in 2014. Since I started this blog, five blog posts have risen to the top as the most widely read posts. Following are the links to these popular posts:

• Nine Favorite Brand Management and Marketing Books
• Marketing versus Brand Management
• The Most Important Brand Management Tasks
• Comprehensive Brand Management Training
• Purpose Driven Brands

I thought you might want to revisit some of these posts or share them with friends and colleagues. Happy reading.

Delivering on Your Brand's Promise

In March of 2000, The Journal of Brand Management published an article I wrote entitled "Developing the brand building organization." Around that same time, I helped create and chaired the one of the first conferences dedicated to inside out branding. It has been said many times that more important than making a unique and compelling brand promise is keeping that promise. United Airlines found that out with their United Airlines Rising advertising campaign as their flight attendants were threatening a labor action labeled CHAOS (an acronym for "creating havoc around our system") and chanting, "No raises, no rising." Later, they found out again with the "United Breaks Guitars" YouTube video. BP found out when its environmental/green energy company brand repositioning was shown to be false during its catastrophic Gulf of Mexico oil spill.

Harvard Business School professor Michael Porter teaches the concept of value chain analysis. If you have created a brand that has a strategy and positioning that you are certain will cause consumers to insist upon your brand, then you must tangibly deliver against that strategy and positioning. This means you invest in people, processes, activities and systems that support the brand position and do not waste time, money or energy on those that do not. You invest in the value chain that supports the brand position.

Inside Out branding requires organization design and organization development support among other activities. To transform employees and the organization itself into a strong brand advocate requires more than a brand rally or internal education and communication (which are a part of what needs to happen), but it also requires internal alignment and incentives.

We have worked with more than one brand whose intentions were good but whose systems or processes worked against delivery on their promises. Inside out branding is a critical part of any brand management function. It is for this reason that the brand manager needs to be the consummate influencer and preferably at a very high level in the organization, because he or she certainly does not have control over everything that will insure delivery against the brand promise.

Here is a chart that I have taken from the second edition of my Brand Aid book. It illustrates the types of organizational activities that need to be aligned with the brand strategy and positioning if they are to be effective.