Do you already know all about brand names?

The brand – more than a fashionable topic*

Never before has so much been written and debated about brands. Nevertheless interest in the brands is weakening. Consumers are often more likely to see them as a means of increasing prices than as a real advantage for their lives. This is one of the reasons why trademarks are booming.

On the other hand it is undisputed that brands are the more profitable systems for adding value. But how can a manufacturer convince consumers of the strength of his brand when there are usually similar products on the market that do not display any obvious differences at first glance? And how can he retain the customers he has worked so hard to acquire? In this article we will touch briefly on two decisive topics that can provide answers to these questions: brand communication and brand loyalty.

How do I make consumers aware of my brand?**

The most important prerequisite for this is the creation of brand awareness. In order to achieve this the brand needs a “big picture”. With the help of integrated communication all marketing measures are coordinated formally and in relation to content in such a way that the impression created in the minds of consumers is unified and intensified.

Formal integration is achieved with the help of classical corporate design characteristics: all the products of one brand are the same typical colour (e.g. Ferrari red), the brand name is always written in the same characteristic logo (e.g. Nivea), the same visual presentation signals are used (e.g. the Lacoste crocodile). Formal integration serves primarily to fix the brand in the customer’s memory, access to the brand is simplified. All products that are allocated to one brand, i.e. the entire brand range, must be formally integrated (same colour, same logo, same signal of presence). In the same way as Ferrari caps are only available in Ferrari red the brush should also be matched to the brand image of the toiletries range.

The brand is positioned with the help of content-related integration. This is achieved via language (e.g. a slogan) and/or via images such as advertisements with repeated messages (e.g. “Wir machen den Weg frei” (we clear the way), the key image of Volksbanken and Raiffeisenbanken).

Elements of communication must re-occur in the purchase situation so that the customer recognises the brand.

From trial purchase to loyal customer!***

When the customer first buys my brand it would be best if he would come back again and again. But how is brand loyalty created?

By definition brand loyalty describes the process of several purchase decisions. The main focus is the customer. Brand loyalty is very high where, for example, the customer chooses the same brand in 8 out of 10 purchases. This is termed brand loyalty. A customer repeatedly chooses one brand within acertain product category.

The interesting thing, of course, is how this behaviour can be explained, why it happens and how it can be influenced. From a scientific point of view each consumer must be presumed to have an individual and rationally influenced thought structure, which is stored in the human brain for each brand. Brand loyalty is the result of various impressions that the consumer is conscious of and which he processes in a rational and emotional manner. These impressions can be positive product experiences, effect, colours, forms, comparison with competitor products and services…

The second prerequisite for the creation of brand loyalty is the satisfaction of the customer with the product. The customer is satisfied if the product fulfils his expectations, i.e. the image formed in the mind of the customer with the help of brand communication and the actual product must be identical. Then the product is accepted and the customer develops trust in the brand. At the end of this chain of events customer loyalty is created.

Once the brand loyalty has been created - with much effort – the company doesn’t, of course, want to lose the customer again. Brand loyalty can be secured in a variety of ways****:

  1. Economically: one offers the customer economic incentives such as price reductions, customer cards, gifts, loyalty points, rewards…
  2. Technically: the customer commits himself to a certain technology for a long period (e.g. software)
  3. Contractually: the customer commits himself contractually for a long period (e.g. mobile phone).
  4. Service-oriented: customer loyalty is created via special service offers (e.g. guarantees, internet information offers, free service telelphone…).
  5. Experience-oriented: one attempts to create a personal attachment to the brand. The customer is actively included in the brand experience (e.g. customer club, joint leisure activities, brand events…).

The best results are achieved using voluntary (e.g. nos. 1, 4 and 5) and emotional (e.g. no. 5) loyalty creation measures. Ideally various tools will be combined.

How important are loyal customers for a company?***

The customers that are loyal to a brand (approximately 20% of all customers) produce the majority of turnover (approximately 80% of the total turnover)! For example in the case of Nescafé Gold 25% of the users are responsible for 79% of the turnover, in the case of YES 21% of the users are responsible for 75% of the turnover.

*According to: Christian Prill (2004): Mit disziplinierter Kreativität den Wert der Marke steigern. Bulletin des Direktvertriebs
**According to: Franz-Rudolf Esch (2001): Integrierte Kommunikation als Spur zum Konsumenten. Erfolgsfaktor Marke. Verlag Franz Vahlen, München.
***According to: Wolfgang Majer (2001): Entstehung von Markenbindung. Erfolgsfaktor Marke. Verlag Franz Vahlen, München.
****According to: Peter Weinberg/Sandra Diehl (2001): Markenbindung. Erfolgsfaktor Marke. Verlag Franz Vahlen, München.