The History of Branding as it Relates to the Customer Experience

Somebody once said that the history of branding could be summed up in three simple phrases: This is mine. I am better. I am like this. In other words, brands as ownership, brands as snob appeal, and brands as self-expression. ^[12]

The genesis of the word brand is Middle English, and it means a flame or torch. Philip Ross, with Business Specialties, comes closest to a definition of branding that we endorse: "Branding as we know it today is the art of instilling and communicating the values and character of a company or organization through association with its logo. Psychology calls it symbolic association and finds it to be foundational to the learning process." ^[13] This definition is not too far astray from the rather perky notion by research consultants Wendy Gordon and Sally Ford-Hutchinson, who write, "A brand is a metaphor for a complex pattern of associations that exists in the heads of individuals (customers/consumers/users), not in the heads of the marketing department." ^[14]

The practice of branding has been around for a long time. A trademark can be found on the bottom of a sandal dated from 200 BC. ^[15] For two thousand years, Christian brands have included the fish and cross. Brands were once used to mark and punish criminals. Ranchers scored brands on the hides of cattle to establish ownership, especially useful at a time when the majority of the population could not read.

Modern brands include Smirnoff, which originated in the twelfth century. In the 1870s George Eastman began the brand Kodak, with its well-known commitment to making photographic memories. General Electric, a consistently strong brand, was created in 1896.

The father of advertising, Earnest Elmo Calkins (1868–1964), was the first to suggest that products actually encompassed people's ideals. ^[16] Products, Calkins argued, reflected the aspirations that people held about themselves, their families, and their positions in society.

Brands and Their Links to Psychological and Social Benefits

Because of the wealth that many middle-class people had begun to accumulate, Calkins believed they were less interested in the functional benefits of products. Due in large part to Calkins's influence, advertising began to focus on the psychological and social benefits that came from using and acquiring products. Advertisers linked product and service attributes to values that people considered important in their lives. This inspired media expert Marshall McLuhan to say, "Historians and archaeologists will one day discover that the ads of our time are the richest and most faithful daily reflections any society ever made of its whole range of activities." ^[17]

By the late 1920s, economists were paying close attention to the economic potential of branding, primarily influenced by Procter & Gamble's brand management system. P&G advertised Oxydol detergent in its sponsorship of daytime radio serials. Forty million people tuned in, and P&G benefited from a dramatic leap in sales that became a gold mine for it. Other soap companies followed P&G's practice, and hence today we have "soap operas."

J. Robinson, a noted economist of the 1930s, emphasized the inherent economic value of widely recognized trademarks: "Various brands of a certain article which in fact are almost exactly alike may be sold at different qualities under names and labels which will induce rich and snobbish buyers to divide themselves from the poor buyers." ^[18]

Branding Helps Focus Attention

Today we understand that the concept of branding is a lot more than snob appeal, as Robinson implies. In the last eighty years, branding has moved to the innermost core of business marketing functions. Today many people, such as musicians, actors, entertainers, and even some businesspeople, view themselves as brands when just a few years ago they would have felt cheapened to think of themselves this way.

When used to describe people or cities, branding helps focus attention on a few characteristics. Las Vegas is commonly described in branding terms ("What happens here, stays here," "The World's Most Entertaining City," "The Capital of Family Entertainment," and even "Sin City"), and other cities are beginning to follow suit. Branding as a concept has changed forever the way people in businesses and organizations think about themselves. As social commentator Laura Barton notes, "Our expectations of how life should be are bigger, brighter, bolder than reality could ever hope to be." ^[19]

Yet we are just scratching the surface potential of the brand concept. Branding continues to evolve at the same pace as the market economy evolves. The idea of branding is also being shaped by brand experts themselves, two of which wistfully remarked, "In branding much is said, much is claimed, much is being done, but there remains much to be known." ^[20]

Branding as an Evolving Concept

Because the field is so rapidly changing, once we think we fully comprehend consumers' relationships to brands, we should also be willing to broaden, deepen, or switch our thinking. For example, consider the question, Why do people choose one brand over another when the products are almost identical? Marketers will tell you that consumers do not choose Coca-Cola over Pepsi, or vice versa, because of the ingredients of the two soft drinks. Rather, consumers unconsciously decide which brand message, Coca-Cola's or Pepsi's, suits them better—even though consumers insist they make their decisions on taste.

At face value, that sounds simple enough. But how does this happen? Rory Morgan, group marketing sciences director at the London-based WPP Group, dissects three emotional factors—authority, identification, and social approval—that account for that simple choice of Coke or Pepsi. ^[21]

While Morgan's model is beyond the scope of this book, he exemplifies just one of many who use sophisticated statistical techniques to provide a more complete understanding of the psychological dimensions and drivers of brands. We must take these models into account, however, or run the risk of not fully comprehending the power of branding and missing the opportunities it offers.

Brands Hold Their Own Attitudes

Some brand experts even suggest that what brands "think" about consumers should be considered. For example, what does Rolex, the luxury watch, think about you? This is an interesting question, and one answer—"You're not good enough for a Rolex"—stops many people from even considering its purchase. The reasoning is that if there is a genuine relationship between customers and brands, then they both must have opinions of each other—even though the consumer holds both opinions. ^[22]

Consider a small company wanting to use the services of a large consulting firm. The owners of the small company may never even call to find out whether that is a viable idea if they perceive the consulting firm only wants to deal with large Fortune 100 companies. This may not be the case. The consulting firm may actually welcome the business of a small company. But in order to demonstrate its competency, the consulting firm will list its largest, most well-known clients. In so doing, it makes a brand—or personality—statement. The consulting firm may also have a fancy phone system that speaks of financial success but can be off-putting to a mom-and-pop shop needing consulting services.

If we agree that the brand possesses an attitude about its customers, then organizations must consider how to manage the brand's attitudes. For example, customer segmentation (dividing customers into groups primarily based on volume of business) can create an attitude that is delivered behaviorally and says in effect, "You won't get such great treatment from us because you don't give us much business." For service companies, this segmentation is manifested in large part through staff behavior.

Airlines have to be very cautious about this. If they provide great treatment only for their most frequent flyers, there is very little incentive for low-mileage passengers to concentrate their miles with that airline. As frequent travelers, we both notice that when we are not on our preferred airlines we are treated as if we have lesser value. No airline advertises itself this way, but the staff behave this way. It's off-brand behavior.

While branding once was seen as one-way communication from an organization to consumers, today branding is viewed as interactive communication. That is, incidentally, exactly what branded customer service is. Today's brands are presented as groups of ideas, rather than merely logos. As such, they have lost their tight legal definitions and have come to represent an almost human way for organizations to communicate with the public. Part of that communication includes even the chatter that goes on inside the organization itself. ^[23]

^[12]Paraphrased from Strategem Limited's Web site, http://www.strategem.co.nz.

^[13]Philip Ross, "Branding," http://www.business-specialties.com/branding2.htm.

^[14]Wendy Gordon and Sally Ford-Hutchinson, "Brains and Brands: Re-thinking the Consumer," Admap (January 2002).

^[15]Sam Hill, president of Helios Consulting, as cited in "The History of Branding," http://www.studeografix.com.

^[16]For a complete discussion, see Douglas B. Holt, "Why Do Brands Cause Trouble? A Dialectical Theory of Consumer Culture and Branding," Journal of Consumer Research 29 (June 2002).

^[17]As quoted in "The Advertising Age," http://www.adage.com/century/century.html.

^[18]J. Robinson, The Economics of Imperfect Competition (London: Macmillan, 1933).

^[19]Laura Barton, "Fascinated with Fake," The Age (August 26, 2003): 4.

^[20]Sylvia LaForet and John Saunders, "Managing Brand Portfolios: How the Leaders Do It," Journal of Advertising Research 34, no. 5 (September-October 1994): 64.

^[21]Morgan has codified the components of three major emotional factors (authority, identification, and social approval) that make a customer identify with one brand over another—even when they are basically the same. Morgan teases out this distinctive customer behavior as follows: authority (heritage: lengthy reputation; trust: reliability; innovation: seen as "leading edge"); identification (bonding: emotional comfort; level of care: understanding of needs; nostalgia: memories from the past); and social approval (prestige: upmarket, upscale, premium; acceptability: approval by peers; endorsement: used by respected people). Rory Morgan, "Towards the Development of New Tools for Measuring Brands," Brand Strategy (September 28, 1998).

^[22]Max Blackston, president, Research International, has carved out an area of expertise within the branding area specifically looking at how brands perceive the customer. See "The Levels of Brand Power," Admap (March 1993).

^[23]See Alan Mitchell, Right Side Up (New York: Harper Collins Business, 2000), and John Grant, The New Marketing Manifesto (London: Texere Publishing, 1999).