Brand New: why brands matter to consumers
This paper by Managing Partner Peter Roberts was presented to The Society of Cosmetic Scientists at a meeting in Bristol on June 2nd. In the paper, Peter looks at the role of brands and some of the challenges in managing them. There are frequent references to the beauty market, given the presentation audience.
What’s a brand and why is it important?
Brands began life as marks of origin (literally, hot irons on a cow’s backside). This was also true commercially, but evolved to equate origin with quality. In the sixties and seventies brands were mostly to do with specific products, rather than organisations. They also evolved again to become ‘aspirational’ where buying a certain brand would say something about you. They became a key weapon in the advertiser’s armoury.
The eighties saw the rise of the ‘corporate brand’ where the same principles applied, more or less. This was most evident in the technology market. For example, the giant IBM pitched its corporate brand around reassurance: they used to say no-one ever got fired for buying IBM. And the upstart Apple cried revolution: ‘1984 will not be like 1984’ and began its journey to design icon status. In the car market, Volvo became synonymous with safety; and in cosmetics, ‘Ding Dong, Avon Calling’ was, of course, already a ubiquitous call to action.
Today, everyone knows Google, Microsoft, Facebook, Starbucks, McDonalds, BMW, Disney and so on. But brands continue to evolve and now, while the brand you choose still says something about you, it’s more likely to reflect what you think about it. Green brands, Fairtrade brands, Honest brands, Exciting brands. As consumers become more knowledgeable and more aware of value and values, so brands - product, organisational or service brands - have to demonstrate the same. They have made a cultural shift.
To see what this means for the beauty industry, take a look at some of the Superbrands 2008/2009 ‘cool brands’ winners in the toiletries categories:
Aveda (for haircare): Its mission is to care for the world; from the products it develops, to the ways in which it gives back to society, Aveda strives to set an example for environmental leadership and responsibility.
M.A.C. (for cosmetics): The M.A.C AIDS Fund, the heart and soul of M.A.C Cosmetics, was established in 1994 to support men, women and children affected by HIV and AIDS globally. It’s a pioneer in HIV and AIDS funding, providing financial support to organizations working with underserved regions and populations; and it’s the largest corporate non-pharmaceutical giver in the arena.
Dr. Hauschka (for skincare) : Natural health beauty products ; many ingredients grown in their own biodynamic garden or through Fairtrade biodynamic projects throughout the world.
These are ‘cool’ brands because they care for the things consumers care for. It’s now about shared values, trust and relationships. For cosmetics, this means the best formulations may not necessarily translate into the best brands, although of course quality is vitally important. The challenge is to understand what matters most to the consumer.
So why is that important?
Firstly, strong relationships equate to purchase, re-purchase, more purchase (different products from the same stable) and loyalty. Not only is that good for sales, but it also builds long term value. In what we call ‘low involvement’ products, the best example is Coke: winning Interbrand’s Global Brand of the Year in 2008, we find regularly that c.70% of Coca-Cola’s market value is in the brand, only 30% in tangible assets. High involvement brands like Apple go beyond loyalty in their relationships: their customers are fans, active advocates. AppleMac users rave about their iPhones and iPods.
Secondly, a strong brand is characterised by being clear and consistent in its promise and this helps customers to make their choice in a bewildering world of options. They know what you stand for and they trust you to deliver it. Disney stands for magic (not holidays, which you can buy anywhere) and that’s the experience you’ll get.
The top performing personal care brand in the Global 100 Top Brands for 2008 was Gillette (at #14) and we all know it’s “the best a man can get.” In cosmetics, the most valuable brand in the 100 was L’Oreal, (at #51), with perhaps the best known and most consistent promise in the sector: “Because you’re worth it”. In the UK, Alliance Boots promises to help us “look and feel better than we ever thought possible”. Compelling brands with a compelling promise.
Who owns the brand?
You don’t have to be an Apple, a Disney or a Boots to be ‘a brand’ because the same principles apply to any size or type of business, and even to individuals, David Beckham being a good example. The principles in question are those of perception. In many ways, your brand is what others think of you, regardless of how you see yourself.
This is why organisations measure and measure; if their brand currency or reputation is slipping they need to know why and work out how to change people’s perceptions back again. For cosmetics brands using the cult of celebrity to personalise their products, they must be extra vigilant. It was arguably no surprise when Rimmel replaced Kate Moss with new face Sophie Ellis Bextor.
While companies are the commercial brand-owners, it’s consumers who pull all the strings. You are only as good - and as valuable - as your market thinks you are. When, for whatever reason, this perception changes, then so does your brand. With a well informed marketing strategy, this can bear fruit.
A good example is Dove’s ‘real women’ campaign: research showed that many women are self-conscious and find beauty ads intimidating. Dove's campaigns use 'real' women instead of unfeasibly beautiful models, and the immediate result was that sales doubled. Dove has connected with its customers at an emotional level in a real and honest way. Consumers appreciated that, and voted with their purse.
But the reverse is also true. Since its inception in 1976, Anita Roddick’s Body Shop was a pioneer of corporate responsibility, the champion of social change. But as it grew and became successful, the high levels of trust established with its markets began to wane as cynics and critics accused The Body Shop of exploiting people’s idealism by championing issues while being similar to other multinationals in practice. And of using not natural but almost wholly synthetic product ingredients, some of which had also, at some point, been tested on animals.
Add the claim that it paid exploitative wages and was firmly against trade unions, and the market perception changed. Trust was lost.The brand, and its value, lost currency. It remains to be seen how quickly L’Oreal’s ownership will restore faith in the business. L’Oreal’s own citizenship is strong with ethics, diversity, sustainable development and women in science high on the corporate agenda.
Why do consumers buy?
This is a hugely broad question with a million answers and each sector or industry has it’s own behaviours and complexities; so there is no straightforward answer. However, the nature of ‘brand’ provides some clues.
Firstly, a strong brand is a known entity and you know what you’re going to get, so it makes the choice easy.
Secondly, a brand is a promise, delivered. That’s what people buy. Magic. The best a man can get. They buy because they believe they’re worth it.
Thirdly, powerful brands exhibit a compelling emotional dimension, as well as the rational reasons to buy. Powerful brands speak first to the heart. Poet, philosopher and activist Maya Angelou described this perfectly when she said: “People will forget what you said; people will forget what you did; but people will never forget how you made them feel.”
In cosmetics, this is arguably the number one motivation to buy. Brands that make you feel sexy, exciting, classy or frivolous. Brands that make you feel good about yourself, good about others, and good about the planet. Brands that you can indulge in, treat yourself to. Brands that don’t make you feel guilty or immoral. Brands you can trust. And when advertising wraps them up in celebrity, products become aspirational and consumers will buy into the style, and the lifestyle, depicted on screen and on the page.
Why else are successful brands so attractive for consumers?
Effective brands are dynamic. They are managed. They change to stay relevant. Identifying and monitoring consumer perception is the first rule; and staying ahead of the competition is the second. Both demand rigorous market research, analysis and insight. This doesn’t mean products and firms should always be changing themselves. Far from it: consistency and ‘a brand I can rely on’ are the mainstays of every good organisation.
But consumer behaviour changes; for example, with the advent of new technologies, the emergence of environmental issues, changing social constructs or the onset of more difficult economic times. So brands must understand whether or how this impacts on their desirability and relevance.
For example, a premium luxury brand can weather a recession in its core market; but conspicuous consumption reflects badly on its customers in such times and risks the opposite effect, where social status is negative. Consumers will feel uncomfortable if their brand continues to communicate extravagance and indulgence. Far better conscious consumption, than conspicuous. Brands must get inside the customer’s head and constantly re-evaluate what the customer needs, what she believes, and how you make her feel.
The onset of ‘girl power’ in the mid-nineties heralded a new wave of female empowerment and cosmetic and fragrance marketers have been quick to adjust their portfolios to take full advantage, with brands to reflect the mood like Temptress, Vixen, Teasing Flirt and even the delightful Orgasm Blush. Playboy can get away with Tie Me To The Bedpost and Mile High mascara because that’s what the Playboy brand is about. But others must take care to monitor and research: Pout Cosmetics clearly didn’t forsee the line they crossed with Carpet Burn lipstick which was discontinued in the US, although their Pop My Bubble lip gloss is still available.
Conscious brands must work hard in the age of G20 and the internet
Conscious brands are so-called because they are actively salient and engaging. They understand that consumers must be moved from a state of being unaware (particularly for a new brand), to being aware and having an understanding of the product or organisation: what is it; am I in the market for one of these; should they be on my shopping list? The psychology of communication is also a process, and the next step is for the brand to establish its credentials, which it does with emotional and rational selling. Why this brand? What makes them right for me?
The proliferation of what are termed ‘social media’ has opened up a massive new communications channel to consumers. Facebook, MySpace, YouTube, Twitter, Bebo, Linked-In, blogs, websites, feeds, podcasts, wikis, Reddit, Diggit and on and on they go. Communication literally at the speed of light. Consumers are today highly informed, and highly capable of making their brand opinions and preferences known to those who care to listen. And herein lies one of the biggest challenges facing brands: the internet, for all its targetability and reach, is uncontrollable.
Do something wrong, say something careless or have something taken out of context and misinterpreted - the results can be devastating and the internet will spread your bad news like wildfire. It didn’t take long for the MP’s expenses row to generate all manner of creative comment online: check out the YouTube video of former Speaker Michael Martin holding forth in the Commons to the soundtrack of ‘better pick a pocket or two.’ Hilarious, unless it’s you.
The other dangerous trend for brands which fail to engage properly with their consumers and other stakeholders - indeed, with society at large - is the increasing threat posed by anti-globalisation.
Nine years ago, author Naomi Klein took an illuminating swipe at the corporate monster in her book ‘No Logo: Taking Aim at the Brand Bullies’ which opened the lid on issues like Nike sweatshops and the disparity between McDonald’s corporate profits and its below-subsistence wages.
Since then, and with the help of internet-based communities such as McSpotlight.org, pressure groups find themselves with a voice like never before. The ozone layer, animal rights, fur trade, fair trade, exploitation of children, GM crops, animal testing, fat cats, sleaze, carbon footprint, obesity, and the sexploitation of women by the beauty business; there are myriad trapdoors waiting for the brands who don’t listen.
This year’s G-20 Summit in London was a focus for demonstrators battered by the collapse, through greed as they saw it, of our banking and financial systems. Tragically the protests, though mostly peaceful, led to the death of an innocent bystander, and the activist voice has grown louder.
These twin movements of instant global media and a catastrophic collapse of trust in all things ‘big brand’ brings into stark relief a simple truth that more canny brands have recognised: that to protect your reputation and the risks posed by your detractors, you must engage and not ignore them, as McDonalds and The Body Shop did for so long. Traditional wisdom was to ignore the minority voice and focus on your mainstream market, the silent majority; and on the consumers who ‘get’ you and buy your products. However, this doesn’t work. Why not?
Fans and Foes
Imagine a typical distribution, a bell curve, for ‘trust’ with numbers of people on the vertical axis and the horizontal axis plotting ‘total distrust’ to ‘total trust.’ It’s tempting and worthwhile to aim at pulling the median majority towards your extremely positive end of the scale, where your ‘Fans’ are. It’s also tempting to ignore your negative extremists, those who don’t trust you at all, your ‘Foes’ - for surely they’re a lost cause, are few in number and will never buy your brand; in fact, a waste of time? This is a dangerous assumption.
What actually happens is this: the extremes, be they Fans or Foes, perceive your brand to be highly relevant to them, and that makes them more passionate and more motivated. Fans will buy more and be loyal advocates, but Foes will seek to spread dissent and may become activists. Although few in number, their motivation makes them more vocal. This is the first distortion.
The second, and critical distortion follows, when the media picks up the dissenting voice and recognises an issue. The media will always tend to favour the unfavourable because in the interest of balance they feel the need to put forward a view outside the prevailing ‘vested interests.’ What’s more, controversy and conflict make better press, TV or radio than consensus; the media wants a good story that sells. The result? A minority voice is given prominence beyond its weight.
The outcome can be a swing from the silent majority in the wrong direction. But brands which listen to their Foes and endeavour to acknowledge them, engage with them and make efforts to clarify and resolve, can do much to diffuse this risk.
Summary
To most consumers, brands matter; and the beauty industry is no exception. With brands, people know what to expect and this makes it easier to choose in a cluttered and competitive market. Consumers will increasingly look for brands which can consciously demonstrate a set of values commensurate with their own and in these they are willing to put their trust, and their money, for as long as the brand continues to deliver its promise.
Brands themselves are shaped by the perceptions of their market, and particularly their target customers; it’s imperative they always understand what consumers need, think and feel, particularly in times of change.
To avoid risks to corporate reputation, and dissolution of real book value, brands must endeavour to engage positively with all those who are impacted by what they do; this is especially true of detractors who, armed with a media-magnified voice and the internet, can cause more trouble than their numbers might suggest.
Author: Peter Roberts, Managing Partner, Achieving the Difference LLP.
June 2009.
This paper was presented by Achieving the Difference to a meeting of The Society of Cosmetic Scientists in Bristol on June 2nd 2009. It was presented by our market research associate Pauline Foster.
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Peter Roberts
