The Magenta Lessons consist of four installments: Design and Colors, Marketing, Trademarks and Public Relations. This is the 2nd part, in which we are discussing brands and how important they are in today’s world.

When was the last time you had a Coke? Maybe you prefer Pepsi? I’m sure you’ve tasted them both, and then you decided to stick with one of them. You may even go for Virgin Cola, Afri Cola, RC Cola, or another one (the list goes on). The point is, from the variety of given choices, on what do you base your decision which one to purchase?

You could say it’s the taste. Granted, Coca-Cola tastes slightly different than Pepsi Cola. But what if I tell you that it’s not only the taste that makes your choice, but the brand and their marketing?

Now you say, “no, you’re wrong. It is the taste I’m going for, not the brand. I’m in marketing or advertising myself and I don’t fall for brands” - ok, I’ll give you that. You already know that the values consumers connect with a product are the results of marketing efforts. And because you’re in the field yourself, you’re not falling for it.

I say, let’s move away from Cola for a second and look at table waters. Do you like Evian?

In a market with literally thousands of competetive products that don’t taste differently, don’t look differently, and become totally redundant as soon as you’re near a tap, why do you go for Evian and not for one of the other 3,000 water brands like Dasani, Spring! or Bonaqua?

To answer this question, you first have to be honest with yourself and look closely at your own behavior in the supermarket, at the gas station, or when you’re shopping clothes. Is your favor of a certain cereal, bread, canned corn and candy bar driven by you having examined all of the other available products and finally decided that this one tastes best? And when you go shopping, do you have a favorite store or mall you go to first?

I’m quite sure your answer is yes. It certainly is for me; I’ll admit that although I’m in the creative field and build brands myself, I still let myself drive by brands when I shop. This includes groceries, clothing, gadgets, household appliances and even cars. Of course, we purchase a certain brand because we adjudge it to possess a certain quality that makes it more valuable than its competition. And sometimes, we deliberately spend more money on a certain brand although we know that it’s not different from the others, except for the name on it.

This last case is marketing heaven.

Marketing, as a profession, can’t be squeezed into a single post for sure, and I’m not going to try to do that. But we can take a look at a few interesting facts that will lead us towards finding an answer to this question:

What makes us buy one brand over another?

A variety of very interesting things. Marketing is all about knowing the answer to this question and applying the knowledge to a brand. Many, many people work for companies, institutions and universities on exhaustively intense studies, surveys, and tests to understand the consumer’s mind better. The most important discipline involved in this research is psychology - understanding consumer behavior and the decision-making cause, process and result when the subject is exposed to different situations - e.g. at the point of sale, when walking through a mall, when reading a magazine, when watching TV, when in a conversation with friends, and so on.

Finding the key to the consumer’s mind can be the key to making a brand successful, and will help us finding out why branding is so important in our business world.

1. A successful brand differentiates itself from its competition either in quality, price or uniqueness.

Brands can be positioned in their market in three single ways, which should never be mixed among each other.

1. The Differentiator. Differentiates itself from its competition though quality, functionality, availablility, and/or design. The consumer’s decision to purchase this type of product is justified by a higher perceived value for one or more of these factors, leading to the effect that a higher price is accepted.
2. The Cost Leader. Differentiates itself from its competition through a lower price and its obvious belonging in a low budget category. The consumer is aware of the abundance of one or more of the Differentiator’s values.
3. The Niche Product. Has no perceived competition in its market and can theoretically be priced very high, targeting mainly Innovators and Early Adopters. Once its patent, thus its singularity, has elapsed, the Niche Product has to re-position itself if it wants to remain competitive.

• Example: look at credit cards. Every bank or institute has differently positioned cards, distinguished by their design. The product line of American Express starts with the Blue Card and ends with the black Centurion Card. The first one is free, but you can’t expect premium treatment or a high limit. The Centurion Card, on the other hand, isn’t free, but it comes with various benefits, insurances and club memberships.

2. A successful brand suggests its possessor’s association and identification with a desired group.

We humans are like sheep. We follow others and want to belong to a certain group of people. We crave exclusiveness! So, from our point of view, we can use this interesting behavior to add a perceived value to a brand, for instance by artificially making it almost unavailable or by creating a myth around it. Of course, this strategy won’t work with mass-oriented cost leading products.

• In the above example, the Centurion Card is marketed in exactly this way: its possessors belong to a rather exclusive group of people, as not everybody can own this card. If you buy a Rolex, you belong to an exclusive group of people and like to show this off with luxury products. Now, if Rolex were to drop its prices all of a sudden, would that group still be exclusive?

3. A successful brand suggests a separation of its possessor from an undesirable group.

In the same way that we want to belong to a certain group of people, we also want to distinguish ourselves from the groups we don’t desire belonging to.

• Driving a Volvo once had the flavor of a settled family man. By emerging into the small car market, Volvo managed to gain its share in that field, but only with repositioning its brand - away from serious family cars, closer to the mass market of nowaday’s numerous singles out there. Although they tried to keep up their USP - Safety -, the new position of the brand simply doesn’t allow the same perceived values (just look at the crush-collapsible zones of small cars vs. upper class cars). As a result, the original USP watered down a bit; but the brand is no longer a family car.

4. A successful brand is remarkable amongst its competitors.

The worthwile attribute remarkable is more of a condition when it comes to brands. A remarkable brand will be perceived as unique and desirable, and it often creates a whole new niche. This condition can be acheived by adding something new and exciting to an existing function, hence the niche.

• Look at Apple. In our previous post of the Magenta Lessons, The Role of Design and Colors in Branding, we described how Apple managed to create a trend by switching from black to white. Under the leadership of Steve Jobs, the company outpaced the red numbers and is now recognized as a leading innovator and trendsetter - at least when it comes to remarkable design.

We could discuss a variety of other factors that play into creating a successful brand, but looking at our goal today, let’s sit back for a minute and look at what we have.

Why branding?

In order to create a successful brand, we need to look at its qualities and disadvantages - compared to its competitors. We can then take care of the brand’s positioning and attempt to create a unique Value Proposition. This results in the Unique Selling Proposition that we can communicate with the market in order to create a brand image.

The brand image is the key to developing the most powerful and suitable “pictures” in the consumer’s minds. And this is exaclty why brands are so important for marketing a product. It is of vast importance to realize that consumers don’t just buy a product, but also the image associations of the product. In our world, we define ourselves by our possessions, or better: we constantly try to inherit the image of a brand for ourselves.

Bottom line: we buy the stuff we associate the same values with that we want others to see in us. This is why branding a product is so important.

A noname product can only be positioned as a cost leader, which is not always desirable; especially for products with a high cost of production. Without a name, you can’t create a brand; and without a brand, you can’t position a product in its market and actually sell it with a margin.

Let’s go back to our bottled waters for a second. Remember the water brands I named further up, next to Evian? They were Dasani, Spring! and Bonaqua. You might know these products, but did you know that all three of them are owned by The Coca-Cola Company?

Do you see the differences in each of their positioning? Remember, all are brands by the same company. Each one targets a specific market segment and associates with different values.

You might be interested in reading about Coca-Cola allegedly misleading consumers about the true nature of the content of its bottles.

Oh, and if you’re seriously interested in learning more about bottled water brands, go to mineralwaters.org. Although poorly designed, the site has a very long list of over 3,000 brands from 125 countries.

The next part of the Magenta Lessons is about Trademarks and will be up soon, so don’t forget to add us to your RSS feed reader. And if you liked this post, leave us a comment below!