Monday, February 15, 2010

Branding, Mr. Maslow?

Shubham Khurana, XLRI Jamshedpur

Do services need to brand themselves? Many argue ‘not really’; time says ‘YES’!

For a long time, the tradition and reputation of the firms, and the limited services they provided were enough to provide the brand value it sought. Competition was limited and marketing and communications focused mainly on activities like excellent work, job advertisements, speaking at conferences, publishing articles in professional journals, innovating and co-operating with universities and technical schools.

Times; they are a-changing!

  • Some of the changes that have rendered the previously followed marketing and communication insufficient are: Globalization- increased competition and standards
  • Growing variety of services, pushing the need to communicate the portfolio to clients
  • Need for qualified people and rising competition in attracting talent
  • Stagnation in core businesses, such as IT, making communication of innovation important
  • Growth in consulting services, and a need to differentiate

The same activities are left insufficient, as excellent work and innovation are useless if not communicated to the consumers wisely. Word of mouth cannot be relied on anymore, as there is a dire need to control it with the increase in technology standards. A job advertisement in itself is insignificant, unless backed by a brand name. Conferences and publishing articles are no longer a solution since one is invited to a conference if associated with a big brand. Universities, with the increasing choice, also have become ‘brand-conscious’.

The New Focus

With the backdrop of any services industry, one can examine the newly attained focus on branding. Top Indian IT companies, for instance, are stepping up investments for branding initiatives, so that they can be counted among the top players on the global stage. Infosys spent INR 70 crores in 2006 on branding, and decided to go for a rebranding exercise to change its positioning. Wipro followed in January 2007, launching the ‘Applied Innovation’ campaign, and increasing marketing and branding spends by 70 percent. And TCS was not far behind, with the launch of ‘Experience Certainty’, spending close to $ 10 million on print media in its first phase.

Satisfying the Needs through Branding

Getting back to Maslow’s Hierarchy of Needs, it is not difficult to see why companies ‘need’ to brand. In other words, the product or the service does not satisfy every need in itself and this is precisely where branding can help; the pyramid below explains how.

As it is known, these needs have a hierarchy of satisfaction, and same goes for the services industry and the relevant phases of branding. This gives an order or a priority to focus on these branding activities. We will examine the same with IT industry in the backdrop.

Stage 1: Communicating Core Competencies

Core competency provides consumer benefits which should be acknowledged by consumers and is not easy to imitate thus safe to advertise. It can be leveraged widely too many services, thus its communication can help in unification of the brand. Wipro, around the mid-1990s, shifted their focus towards branding as awareness levels were dropping. They identified four values that provided the most-important benefits to end-users: human values, integrity, innovative solutions, and value for money. The concept of ‘Applying Thought’ focused on highlighting the core competencies. The slogan along with the rainbow flower communicated innovation, quality and superior value - all targeted at conveying the core competencies.

Stage 2: Stressing on Brand relationship, quality and reputation

Product branding is easy as it has perceptible attributes and the consumer evaluates the product on these. But services branding offers a trickier proposition. Clients consume products which they cannot physically use and communication becomes challenging. The greatest proportion of advertising efforts would be attributed to overcoming the problem of intangibility. An effective advertising mix thus addresses the issues of incorporeal existence, abstractness, generality, and mental impalpability among many others.

Services industry is majorly a B2B industry, thus a focused marketing effort may be needed. Channels such as direct mailing, telecalling, face to face and PR can help. There are restricted budgets, as branding is generally not the focus area. Thus, in absence of expensive mass media, guerilla marketing comes to the rescue. And interactivity is a must, where demonstration events and trade shows can be used.

Stage 3: Conveying the brand and organization culture

Services companies of most sectors in India planned to move towards a more global environment almost around the same time. In their paper “Social Responsibility as a Unique Dimension of Brand Personality and Consumer’s Willingness to Reward”, Madrigal and Boush introduced Social Responsibility as the sixth dimension of the brand personality construct postulated by Aaker. For e.g. CSR is regarded as one of the pillars of business behavior at Infosys India Ltd. In line with the company ethos, Infosys has undertaken many social initiatives such as Infosys Foundation & Computers@Classroom, which have significantly contributed to increasing its brand equity. Owing to its endeavors, the company was ranked number one among the most respected companies in the Business World-IMRB Surveys conducted in 2001 and 2004.

Stage 4: Building on brand reputation and communicating it

There are various ways services firms can, and do communicate brand reputation and satisfy the esteem needs of the clientele, such as:

§ Reassurance: Making claims to assure the consumer about the brand reputation is an effective way. HCL’s use of statements like ‘HCL: a 4.8 billion enterprise’ aim at boosting their client’s esteem.

§ Emphasizing on brand associations: Infosys which has been associated with the intellectual capital as its strength reemphasizes on it with ‘Infosys – powered by intellect, driven by passion’

§ Glorifying brand entity: Firms like Wipro’s use of ‘The spirit of Wipro’ is an effort to glorify the laurels of their past, and make the clients proud to be associated with them.

§ Unique methods: Both Infosys and Wipro have associated themselves with excellence awards.

Stage 5: Brand personality and aspirational brand characteristics

Once the firm reaches a level where it is in the consideration set of all potential clients, it is time to extend the ownership of the brand to them. Aaker defined brand personality as the “set of human characteristics associated with the brand”. Symbolic use of brands is possible in service because consumers often imbue intangible service brands with human traits. Through techniques such as personification and the creation of user imagery, the personality traits associated with a brand tend to be relatively distinct. Many firms are leveraging on Aaker’s five attributes of brand personality:

1. Sincerity: Wipro’s ‘Applying Thought, Applied Innovation’

2. Ruggedness: Infosys’s ‘Powered by intellect, driven by passion’

3. Sophistication: Accenture’s ‘High performance delivered’

4. Excitement: Cognizant’s ‘Passion for making a difference’

5. Competency: TCS’s ‘Experience Certainty’

Services companies need to re-examine their beliefs regularly and take stock of what the company stands for, and thus company values need to be communicated both externally and internally. Communicating the right company values make the consumer a part of the company, and adds the firm to his extended-self, thus making him more loyal. And to provide credibility, communicating values to the employees is essential, as these are the only touch-points where clients can assess the services firm as a tangible entity.

Applying the 5-stage model: Wipro

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