Sunday, April 18, 2010

Why Brands Fail: Harley-Davidson and Buell

Harley-Davidson is an iconic brand in America. The brand represents something of the Wild West spirit - proud, independent, free-spirited. Harley-Davidson’s core products traditionally have been large motorcycles for touring on highways. In the past many buyers were younger consumers. However, in recent years, the core target has become older and is now middle-aged. Harley-Davidson was concerned that as the core market became older and moved into the silver generation, these consumers would stop purchasing Harley-Davidson motorcycles because of safety concerns. So, in order to introduce new, younger consumers to the Harley-Davidson brand, Harley-Davidson bought several motorcycle brands that were targeted at younger consumers and offered these brands as part of their brand portfolio. The largest of these new brands was Buell Motorcycles, in which Harley-Davidson invested in the late 1990s.

Sunday, April 11, 2010

“Belief” Brands and “Experience” Brands: The Case of Coca-Cola’s Aquatherapy Minaqua and ILOHAS

A brand is a knowledge product. The brand is comprised of both beliefs (explicit knowledge) and experience (tacit knowledge). Among consumers, beliefs about a brand include topics such as quality, benefits, imagery, etc. Experience with a brand includes emotions, usage, sensations, etc. A goal of the brand marketing strategy is to identify the type of knowledge that is valuable to consumers and to plan a way to create that knowledge. In terms of capturing value in the market, some brands rely more on beliefs, and some brands rely more on brand experience.

Sunday, March 28, 2010

How is the brand-knowledge creation process managed?

Activating and guiding the brand-knowledge creation process requires five factors. (Taking the first letter of each factor, the model is called the CoVAAM model.)

Context is the culture of the organization. It describes what is important to the brand-knowledge creating organization. This factor represents the purpose of the organization in creating brand-knowledge. An example of a broad context is “build brand equity”, and an example of a more specific context is adidas’ corporate mission of “help athletes achieve peak performance” (adidas, 2010).

Context must be shared by all the individuals and groups across the brand-creation process. Shared context provides a reason and a motivation to interact and advance the brand-knowledge creation process.

Vision defines the character of the brand-knowledge that the organization aims to create. Context is the energy that drives the brand-knowledge creation process, vision is the compass that keeps each brand-knowledge creation stage aligned.

Vision applies to both the beliefs and the experiences of brand-knowledge. To be an effective guide across both types of the brand-knowledge, vision includes both a literal element (for belief) and a metaphorical element (for experience). Examples of effective brand-knowledge visions that include literal and metaphorical elements are “human healthcare” (Eisai) and “the third place” (Starbucks).

Activists are the people who direct the brand-knowledge creation process. Activists interpret the overall context and vision in ways that are relevant for each group in the process in order to create vital links across groups. Activists maintain a focus on the brand-knowledge assets in order to control the scope of the brand-knowledge creation process.

Activists have a deep knowledge of their own group’s knowledge assets and capabilities. In addition, activists energetically and skillfully communicate with other groups in the process. Brand managers are important activists in brand-knowledge creation.

Assets are the brand-knowledge inputs and outputs of the brand-knowledge creation process. Assets include both beliefs (explicit) and experiences (tacit). The output from one stage of the process becomes the input for the next stage of the process. Activists manage these assets to ensure that they are appropriate in scope for the following stage.

It is obvious that assets include all the specifications that go into planning for a brand, as well as the creative output such as designs and advertising. However, assets also include the experiential brand-knowledge of all participants, such as their loyalty or engagement with the brand.

Media is the location where the brand-knowledge is created or the path by which the brand-knowledge is transferred. It also includes the social rules that govern how the media is used.

Media includes places where participants meet as well as the social rules that govern the meetings. Media also includes the way knowledge is transferred, such as through an intranet .

What is the process for creating brand-knowledge?

Creating brand-knowledge is a process of transforming beliefs to experiences and experiences to beliefs. In addition, creating brand- knowledge requires that marketers exchange information with consumers and that brand-knowledge is transferred between individuals and groups within the organization.

The process has four phases. (Taking the first letter of each phase, the process is named NeSCI.)

Needs phase
The marketer shares experiential brand-knowledge (tacit knowledge) with the consumer, in order to gain a sense of consumer needs.

Concept phase
The marketer translates the experiential brand-knowledge into explicit brand-knowledge in the form of brand concepts and briefs, such as research or creative briefs, which can be shared with other members and groups in the marketing organization.

Strategy phase
The marketer shares the explicit brand-knowledge such as briefs, with other groups, such as R&D, finance, consultants, etc. Each group uses the briefs to develop further explicit brand-knowledge in the form of strategies and plans, such as a product formula, sales forecast, advertising communication, etc.

Implementation phase
The strategies and plans (explicit brand-knowledge) ultimately are translated into actions and experience (tacit brand-knowledge) by consumers.

As consumers gain new experiential brand-knowledge, the marketer again shares the experience with the consumer, so the process begins a new cycle.

What is brand-knowledge? Where is brand-knowledge?

Kevin Keller defined brand knowledge as awareness of the brand name and belief about the brand image. Valuable beliefs are authentic beliefs – consistent and durable. In addition to belief, consumer experience is an important part of brand knowledge. Consumer experience includes emotions, sensations, and activity. Using the terminology of philosophy, beliefs are “explicit” knowledge – meaning they can be put in words, and experience is “tacit” knowledge – meaning it cannot be put in words.

Brand-knowledge – both explicit and tacit brand-knowledge – primarily is created by both the consumers and the marketer. Other players in brand-knowledge creation include researchers, advertising agencies, marketing consultants, distribution channel partners, and others. Brand- knowledge is created and held both by individual people and by groups.

So, brand-knowledge includes two dimensions:
beliefs (explicit) - experience (tacit) dimension
individual – group dimension

Why is creating brand-knowledge important? 为什么创造品牌知识重要?なぜブランドの知識を作成は重要ですか?

The Coca-Cola brand was worth $68 billion in 2009, according to Interbrand. This amounted to more than 50% of the value of The Coca-Cola company. Creating valuable brands is extremely important to the company’s shareholders.

It is a knowledge economy. Brands are the currency of the knowledge economy. Brands are neither physical products nor actual services – brands are knowledge products. Successfully creating brands is a knowledge creation process.