Building on the brand: a strong brand presence does more than just resonate with consumers. It also creates an imperative inside the company that connects employees, managers, and shareholders. . - Marketing - book review

Chief Executive, The, August-Sept, 2002 by Bill Leigh

From Starbucks to Southwest Airlines, successful companies owe a lot to the development of a powerful brand. But a brand is more than just a name -- it's the essence of your company, and it grows and changes the same way your organization does. In this issue, Nancy F. Koehn, a professor of business administration at Harvard Business School and the author of Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell (Harvard Business School Press, 2001), talks with Bill Leigh about how the perception of brands is changing, and how companies can build on their brand to move to the next level.

Q. Why has the meaning of the term "brand" changed over the past year or so?

KOEHN. The Information Revolution has had a number of important effects on the term "brand" and on business leaders' understanding of it. Perhaps the most important of these is that we realize that a brand is much more complicated, much more robust, much more strategically significant than we thought even two years ago, when a lot of economic activity was implicitly governed by the idea that "If we build it, they will come." When we think about marketing at the height of the Internet explosion, say, in 2000 or even early 2001, we thought about a brand as a Web site, something we could build and attract people to by virtue of technology, by virtue of eyeballs, by virtue of credit cards on file in a particular site.

If the lessons of the past year or year and half teach us anything, they teach us that a brand is much richer than that. A brand is a relationship between customers and a company, between customers and a product, and, like all relationship, it has great complexities and great rewards. It requires great investment, and it delivers significant return. A brand has to be understood as a vital strategic asset that requires the understanding and input of virtually all aspects of a business or all departments in a company. All those functions are required to deliver on the promise of the brand, on the expectations that a particular customer or set of customers has regarding a company, its reputation, and what they expect when they pay their money.

Another change involving our understanding of brand has to do with how much involvement within a company is needed to create and sustain a strong, powerful brand. And finally, we're recognizing that brands involve not just customers outside the organization, but also employees, managers, and stakeholders within a company. This is not new but rather is something we are coming back to with new clarity. A brand doesn't just work outside an organization in terms of eliciting loyalty and attracting new customers and inciting positive word of mouth. A brand also works to do those things -- if it is productive and powerful -- within an organization.

Q. Can you give us an example?

KOEHN. I would argue that Southwest Airlines is one of the most powerful and positive brands in an industry that many customers love to hate: the airline industry. Southwest has enjoyed extraordinary brand enhancement even in the wake of September 11, an event that really battered U.S. airlines. Southwest did not suffer nearly as much as other airlines did. In fact, it is the only airline that expanded its route structure and made significant capital investments in the third and fourth quarters of 2001. By virtue of its brand and its relationships inside the company, Southwest has enjoyed enormous flexibility and stability at a very turbulent time in the industry.

Q. Your choice of Southwest is interesting, because it is not a traditional consumer product. How far do you think branding can go beyond the consumer product area?

KOEHN. Brands have tremendous reach and widespread potential. We have seen in the past 10 years an explosion in the branding of services -- of an airline experience, of investment banking services, and now, increasingly, of legal services. I think that in the wake of the financial scandals right now we will see a new wave of branding among brokerage services. We will see increased branding of accounting services as the accounting profession regroups and specific companies and firms try to increase consumer confidence and enhance their own long-standing reputations.

So branding is not confined, as we have often thought of it historically, to toothpaste or coffee or soda or other consumer products. Branding has to be seen in an economy in which the line between service, product, and experience is increasingly blurred. Consumers are buying more experiences and entities that combine aspects of two or all three of those categories. I think we are going to see branding as a strategic initiative, as a strategic tool, spread to all kinds of services, all kinds of experiences. Again, if you look at the travel industry, we are seeing not just the branding of airlines or the branding of hotels or of cruise lines, but the branding of an entire experience. One can go away for a weekend or a longer period of time and have an experience, not just at Disney World but at Club Med or at other kinds of resorts, where one is purchasing products -- meals, a room -- and also purchasing services and the combination of those things that constitute some kind of unique experience. Branding is no t just becoming more robust and richer in terms of its potential and importance; it is also becoming much more widespread in our economy.