Dif fer Practise Paper
October 2001 1
BUILD BRANDS ON
COMPETENCE ASSOCIATIONS
By Tomas Conradi
Tomas Conradi co-founded Differ in 1996 and is currently working as a senior client manager with the company. Differ is a
management consultancy that helps clients use the brand as a tool for business development and as an engine of innovation –
brand-driven innovation. Differ strategies often encompass making clients think of branding as part of production and delivery
instead of as a separate process based on communication.
Abstract
With increasing market transparency and an increasing number of market dialogues the distinction between
companies and their customers’ respective environments is becoming archaic. One consequence of this is the
merging of two processes: branding and production. Branding will become less about talking and more about
doing.
This paper proposes that ordinary branding agendas promoting values will lead companies into a dead end as
intelligent customers will see that most brands cannot and should not deliver values. It suggests that the use of
competence associations is the way forward in a time when brands are built mainly through everyday dialogues
and deliveries. The paper draws on the author’s personal and professional opinions and observations since little
branding literature as of yet deals with the competence associations of brands.
The paper discusses the reason competence associations are superior to values as origin of brands and why they
have not yet become a break-through brand model. Finally, it elaborates on what steps a brand builder must
take in order to define a competence association and develop a strategic principle to drive long-term differentiation.
enericification is the best way to summarize
why CEOs and marketing executives have
become dependent on brands. No longer is it difficult
to produce goods or services with high quality
and low cost. Picasso’s aphorism “Good artists
copy, great artists steal” has become management
mantra, and a company’s scarcest resource is their
customers’ attention, attraction and trust.
Parallel to the increasing value of brands is a trend
towards greater transparency, where companies are
no longer able to conceal their insides in favor of
neatly planned advertising campaigns and corporate
information send-outs. This is due to an exponential
increase in the number of customer touch points,
mainly thanks to technological advances, creative
liaisons, an increased amount of media channels
and the addition of new physical meeting points –
concept stores, shop-in-shops, customer information
centers etc. There is also the fact that customers
tend to discuss companies and brands more and
more – partly because they have such great influence
over their lives - in forums ranging from newspapers
to TV couches to dinner tables.
Transparency moves companies’ communications
from a few controlled monologues to a multitude of
uncontrolled dialogues. This new communication
climate renders the walls between customers and
companies – between management and market-facing
personnel – obsolete, and the difference between
companies’ internal and external world is redundant.
The hierarchical production-oriented organization,
where knowledge and decision-making moved topdown,
where the workforce was hired and fired and
provided with rules and branding manuals, is no
more. New organizations are networks built around
customer relationships. Knowledge travels from the
bottom up. In this new kind of organization, branding
moves from the role of securing the right market
communication message to managing the whole
company and its innovations.
G
Dif fer Practise Paper
October 2001 2
Thus, a brand builder’s new mission is to ensure
that every dialogue about the company – internally
and externally – becomes a little more interesting.
Competence associations
Such shifts in company communication environments
have bearing on the way brands are managed
and branding is conducted. No longer is it sufficient
to merely fabricate artificial values and force them
onto little-differentiated products. The new way of
branding entails creating meaning that inspires new
economic, informational and emotional value.
Below is a graphical representation of the oldschool
way of branding, where product values are a
step that is added to differentiate it.
Product/Service
Product values
Product/Service
Product values
A toothpaste becomes not just toothpaste but “antidecay
toothpaste” or “nice-tasting toothpaste” or
“whitening toothpaste” or “toothpaste for athletes”
or whatever will help shift more units for its manufacturer
(one recent addition is “herbal toothpaste”).
The method for old school branding is spelt advertising
and the platform that “herbal” or “whitening”
was latched onto is always the product. So far, so
utilized by advertisers and brand builders alike for
decades. What, then, is the problem?
1. The product values are fabricated. They do not
exist in reality. Usually they are not even conceived
in-house, but tend to be generated by
copywriters or consultants.
2. The product values are not “sticky” enough.
This is not a creative copy discussion but rather
a critique of the fact that the only way to keep
product and value tightly connected is through
extensive and expensive advertising. In the long
term, this is not an effective way to create and
sustain temporary monopolies. The big product
brand companies suffer because of this reason
(although they may not yet have understood it.)
3. Customers do not buy/consume values. One
marketing myth states that customers pay more
for a brand because it represents a way of life or
a set of ideas. The myth states that Nike sells
personal achievement and Coca-Cola sells carefree
fun. These types of values are the driving
force of why customers buy these brands but
they are not what they actually buy.
4. Values are too generic – too hard to use as true
differentiation. Almost all brands want to be “innovative”,
“committed”, “professional”, “ethical”
and “flexible”. In an increasingly crowded marketplace,
brands need to find something that is
more unique, more difficult for competitors to
copy, something easier to manage and maintain.
A modest proposal for a better way of thinking
then would be as follows:
As products develop into services and solutions, as
dialogues develop between companies and customers,
the brand’s reliance on advertising will decrease.
Instead, the organization itself becomes the brand’s
very base and the customer’s conclusions about
products are drawn from their evaluations of an organization’s
people.
In this new situation, the dimensions of a brand, earlier
being product and product values, expands to
include an organizational dimension. This dimension’s
most important implication is associations to
competencies of the people in the company, i.e., what
are they perceived as knowing, what area are they
most likely skilled within?
The leaders of the next generation of brand builders
are the ones that master development and maintenance
of the competence associations on top of product
values, shown below:
Competence
associations
Product/Service
Product values
Competence
associations
Product/Service
Product values
Competence associations are the company’s description
of its main competencies as perceived by the
customer. They should deal with the problems the
customers delegate to the brand. Examples of this
include a bank brand that does not only stand for
“open 9-6” (product value), but also for having the
competence of “creating personal investment tools”;
A pen brand that is not only “no-smudging” (product
value), but has its competence in “ergonomics”; And
an airline that not only has “excellent service” (product
value) but defines its competence as “entertainment
at 30,000 ft”.
An example of traditional product brands that have
moved from a product value approach to a competence
association is Unilever’s detergent brand
Via/Omo, with the development of Omo Info/Via
Direct - a phone service line that takes the delivery
from a “clean washing” detergent to a “washing
problem solving” brand that is independent of the
product to a greater extent.
Dif fer Practise Paper
October 2001 3
Another example is how Gillette’s constant “innovation
within wet shaving” (competence association)
has moved it from being a “close shave razor”
(product value) brand. A role model for brands is
Madonna, the pop star. Instead of being associated
with a particular sound or image (product values),
she has ensured constant “zeitgeist renewal” (competence
association).
The case for competence associations
There are three basic reasons behind the importance
of competence associations over fabricated product
values:
1. People management, not brand management
2. Competence associations are more valuable than
fabricated product values in the customer’s
evaluation of the brand
3. Competence associations have the opportunity
of being more unique.
People management, not brand management
Earlier brand managers managed brands and
branding, taking care of the planned marketing
communication messages. The tools for monitoring
this process were the defined brand values, which
were to be properly translated into advertising and
conveyed to defined target audiences.
Today, managing a brand is managing people, innovations
and dialogues that build brands. The tools
for doing this are not the values, but clearly defined
competencies and guidelines for making everyday
decisions that are more management than brand
management.
Competence associations are more valuable
It is far more interesting for a customer to buy from
a supplier that shows what he knows than from one
whom only says what he values. Even less interesting
is a supplier who claims certain values in
advertising campaigns, easy for anyone as talk
tends to be cheap, but then fails to deliver the
promised values in other customer touch points.
A brand with competence associations gains the
customers’ trust in solving the right type of problems.
A brand promoting its competence associations
has something interesting to say. A competence
brand gives knowledge to gain knowledge.
Competence associations are also more valuable
because, as stated earlier, people do not buy values
per se. They buy companies’ competencies to build
these values into the solutions they buy, either for
their own use or in the interaction with others. Values
are drivers of why people buy, but they are not
what they buy.
Competence associations have the opportunity
of being more unique
There are more competencies around than there are
values, at least counting only those that companies
usually want to be associated with. From this it follows
that it is hard to build a really strong differentiated
position with the sole use of values.
Part of the reason for this is the fact that values are
dichotomies. A toothpaste can only be “anti-decay”
or not, “nice-tasting” or not, “whitening” or not, or
“for athletes” or not.
Competence associations, on the other hand, can be
of many varieties. They can be sorted into niches –
for example, a telecom operator “enabling social
relations”. A differentiated competitor position in
relation to this is not “hindering social relations” but
rather “providing individual information”.
They can be targeted towards certain customer
groups, an example being banks that have the competence
to “empower the financially interested”. The
differentiated competitor position in this case would
not be “disempowering the financially interested” but
rather the competence to “ease finances for families”.
Provided they are so great, why do not all
companies use competence associations?
The first answer to this question is that companies go
wrong because of the branding tradition. Competencies
have, simply, played a very small role in prevailing
branding theory thus far.
Little branding literature as of yet deals with the
competence associations of brands or even the role of
the company’s people in branding. The field of
branding has traditionally focused on the marketing
communication process of products and has not dealt
so much with the management of intangible value
creation in the whole company.
The well-known brand identity models of David
Aaker (Aaker, Building Strong Brands, 1996) have
the brand identity dimensions product, organization,
person and symbol. Aaker was the first brand thinker
who very early attached the organization to the
brand’s identity, but, at that time, he discussed it
more from a core values and cultural perspective.
Another wide spread model, Kapferer’s Brand Identity
Prism (Kapferer, Strategic Brand Management,
1997) also deals with the culture dimension of a
brand, but does not identify that a brand can have
associations to competencies.
Dif fer Practise Paper
October 2001 4
Other brand theorists talk about developing “social”,
“spiritual” and “mental” dimensions of
brands. These types of brand identity dimensions
become very hard to manage for anyone except
advertising copywriters, whose contribution to
branding is, as pointed out above, becoming
smaller. Managers do not see or control social,
spiritual and mental dimensions of companies.
What they do manage is the company’s competencies.
This is then what branding must be about.
The second answer to the question why companies
go wrong is because they see themselves as product
companies. Competence associations is by no
means limited to companies who would consider
themselves to compete with state-of-the-art knowledge
or competence, i.e., consultancies or “think
tanks”. The approach is equally applicable to simple
products, like soft-drinks, sandwich spreads and
cereals
The distinction between products, services and
knowledge is becoming less relevant as companies
try to “servicify” their products by offering add-on
services, including 24 hour hotlines and web communities.
Innovation cycles are also becoming
faster, and most products are being constantly improved.
In this context, it is a liability for any company
to think of themselves as merely a product
brand, yet that is what many of them tend to do.
Makers of more complex products, such as cars or
mobile phones have long understood that they
compete with the knowledge to produce and innovate
around a product or service. But, if one looks
at how many of them convey what it is that they
know, one sees that they do not get it right. Far too
much emphasis is on products, technologies and
values.
For simple products, where many producers have
the competence to produce functionally equal products,
defining a competence that the customer values
is of even greater importance. The Via/Omo
and Gillette brands mentioned earlier, as well as
other brands, must add both competence associations
and services to their customer offering to be
able to remain competitive.
Brands are what you do – not what you say
you do
Brands have been too much about talking, i.e.,
marketing communications. The next generation of
brands will move branding into doing. Part of the
reason for this is the adaptation to a transparent
marketplace where critical customers will settle for
nothing less than companies that deliver on their
brand promises. Furthermore, it is a shift where the
previously separate processes of production and
branding become intertwined to such a degree that
they cannot be told apart.
In order to succeed in defining competence associations
and developing the organization and offering
around it, the following list of actions needs to be
successfully executed:
1. Define the competence association
2. Conceptualize the competence association for the
delivery
3. Develop a strategic principle and an activity system
from the competence association
1. Define the competence association
Firstly, define a competence association that is relevant
from a customer perspective. This does indeed
sound self-evident, but every company suffers from
some degree of “home blindness”. They tend to brand
what they themselves are proud of being good at,
resulting in competencies that the customer may
consider irrelevant. Hi-tech companies, for example,
are often proud of their technical capacity, whereas
their customers may tend to value their competency
to give them an interesting user experience. A mass
clothing brand’s true core competence might be
“copying the big brands fast and procuring efficiently
in South East Asia”. The competence association is
then not that but “making high fashion available”.
Secondly, define a competence association that is
differentiated. Many positioning strategies have had
the aim to reposition brands so that they have a
“deeper” meaning. For example, a watch company
can try to become “the time company” – a business
travel agent can try to become “the meeting facilitator”.
This may be a trap. Why? Because these broader
definitions of what the brand is all about fails to differentiate
the brand at all. All watch companies can
claim to be “time-companies”; all business travel
agents can become “meeting facilitators”.
What brands need is a perspective on this broader
definition. Companies need to express why they will
be interesting as the “time company”, what competence
will they have that makes them better than
others as “meeting facilitators”. Think of the numbers
of online retailers that simply considered “online
presence” as a differentiating feature.
To return to the case of Gillette: When Gillette expanded
from a “close shave razor”, they did not
merely define their competence association as
Dif fer Practise Paper
October 2001 5
“shaving”, which would have been comparable to
the “time company”. They may have then made the
mistake of taking the Gillette brand into dry shaving.
They instead chose a more narrow definition
with “innovation within wet shaving”, enabling
them to stay focused in the mind of the customer.
Thirdly, define a competence association that is
extendable. Competence associations enrich companies
with the possibility to define their business
in a way suitable for new business opportunities.
Companies tend to think too much in terms of how
a product brand can be leveraged across product
segments. Given what customers perceive that a
brand knows, a brand can enter into any categories
where this competence applies. Brands that rely on
values have difficulty doing this because the values
are not enough to earn trust in new deliveries.
Companies can use the competence association as a
guide for innovation – brand driven innovation.
Using this approach, Virgin’s brand extensions are
logical: Entertainment was the company’s core
competence from their inception, and it is the one
competence association that has “traveled” with
them through their airline and banking ventures.
2. Conceptualize the competence association
for the delivery
If brands should be built first and foremost through
the offering and through their dialogues with customers,
the question must be asked: what drives
interesting dialogues? The answer is insight and
knowledge. Today’s customers want a dialogue on
their terms: They want answers to their questions,
they want to be well served and entertained, and
they will only be customers as long as the company
can establish and maintain an interesting and fruitful
dialogue. The fuel for such dialogue is competence.
Every company should also strive to create an exhibition
area for displaying the benefits of their competence
associations. One example of this is the
motion picture-industry. Numerous programs and
documentaries are devoted to “the making of” films
and documentaries, and with the advent of the DVD
format, this kind of product can even be distributed
as part of the ordinary offering. In “film making”-
products, the director may be interviewed to stress
the unique competence of the actors, and the actors
interviewed to describe the unique competence of the
director. Companies in other industries tend to underestimate
both the value of creationism and the stories
they create in the offering of their products and services.
3. Develop a strategic principle and an activity
system from the competence association
Finally, moving from a communicative view of
brands towards a delivery-based view will create a
challenge to the organization, that is, communicating
the brand internally. Everyone in the company has to
interpret and relate to the brand in order to understand
how it can act as a guide when making everyday
decisions. Ultimately, reading sessions of brand
books and other archaic tools tend to be far and few
between. In trying to organize the company around
the competence association, brand owners should
develop a strategic principle, a distillation of a company’s
strategy (Harvard Business Review, May
2001, Gadeish and Orit). Such a principle should:
1. Make people understand the trade-offs in resources
needed
2. Test the strategic soundness of a particular action
(i.e., does what the employee is about to do resonate
with what the company is about to do)
3. Set clear boundaries for employees within which
they have freedom. A strategic principle will act
as a fence and a source of inspiration.
Turning the competence association into a concrete
strategic principle can turn what is usually conceived
as a fuzzy statement into a valuable tool for everyday
decisions and activities.
Conclusion
The ordinary branding agenda promoting values will
lead companies into a dead end as customers begin to
see that most brands cannot and maybe should not
deliver values.
Managing brands today means managing people,
innovations and dialogues that build brands. The
tools for doing this are no longer just brand values in
brand manuals, but clearly defined and widely spread
competence associations that steer everyday dialogues
and everyday decision-making. |
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