This document discusses key elements in building sustainable brands: 1. Brands should create new categories through divergence rather than extending existing brands or converging categories. Red Bull created a new energy drink category through divergence. 2. Strong brands provide a "badge of origin" with a recognizable visual identity supported by the company's mission and values to create trust. 3. Brands must deliver on their "promise of performance" by aligning products, communications, and employees to meet customer expectations across all touchpoints. 4. While global brands offer scale, local brands may emerge stronger if localization reconnects with local consumer lifestyles rather than just promoting a Western lifestyle.

1. BRANDING
Brands By Design Or Default?
Divergence is key to building sustainable brands, argues Shanti Nadarajah.
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BRAND FINANCE SRI LANKA)
iven the complex IDENTITY OR IM- feedback surveys to enhance the customer ex-
nature of brand- AGE? In Living The perience.
ing, it is very easy Brand, author Nicholas Ind POINT OF DIFFERENCE: This is the
for businesses to defines the three critical el- space that the brand will eventually occupy in
confuse a brand ements of a brand: badge the customer’s mind. And it is the result of
with visual iden- of origin – recognisable vi- customer interaction with the brand across all
tity development and the sual identity that supports its touch points, as well as consistent delivery
branding process as commu- the substance and creates of the underlying brand idea filtered through
nicating this identity ad nau- trust; promise of perfor- the smokescreen of competitive action, which
seam in mass media. Adding mance – implicit in the cor- eventually permits the brand to earn its posi-
to the confusion is the strong- porate messages and the tioning and to build its reputation. The Apple
ly entrenched practice of experience we believe we iPod was an innovative product design, but to
brand extension, which either will receive from the unlock the true value of its product innova-
attempts to pack as many new brand... experience is tion, Apple realised it also needed to innovate
(or recycled) features into the largely defined by product at the customer-experience level. Thus, it cre-
current product or service, or design, interaction with ated iTunes, the digital jukebox and down-
create a hybrid through con- employees and quality of load store which enabled its customers to ac-
vergence by combining tech- service; point of difference cess music online legally. Consequently, Ap-
nology – for example, PDAs, – the context of the product ple created a truly innovative experience with
bancassurance, interactive TV, etc. and how it is different from substitutions… the iPod that delivered total freedom from the
This trend towards creating brands that re- strong brands provide a positive reason for CD format.
semble the famous Swiss army knife is choice. GLOBAL OR LOCAL BRAND?
spoofed in an advertisement for Absolut Vod- BADGE OF ORIGIN: The brand Multinational managers have it much
ka. The natural tendency in these instances is idea is not only expressed as a recog- easier with global commercials, adver-
to extend the existing brand name to the new nisable visual identity, it is supported tising templates, brand manuals and
product or service. Unfortunately, if the ex- by the business because it is built communication guidelines. Occasional-
isting brand name is strongly associated in the around its mission, personality, cul- ly, the more adventurous souls amongst
minds of consumers in its current category, ture and values, thus creating a plat- them manage to persuade management
the brand extension is bound to fail. For ex- form of trust. The brand Innocent that localisation could recreate the
ample, Kodak is so strongly associated with Drinks – pure fruit smoothies that hockey stick on the sales graph. Even-
film photography that it has not been able to are 100 per cent natural – was the tually, realisation dawns that the local
successfully transfer the brand to digital pho- fastest-growing small-business en- consumer is living vicariously by sub-
tography. Businesses thus fail to seize the op- terprise in the UK in 2006. Started scribing to the Western lifestyle of the
portunity to build a strong second brand, by three college friends eight years brand. The result of this brand
thereby opening the door to new entrants who ago, the company has doubled its schizophrenia, however, is that local
redefine the industry. profits annually, while maintaining brands emerge stronger. A classic ex-
Al and Laura Ries, in its green credentials. And it has sur- ample of this is the unshakeable brand
their latest book The Ori- vived the competitive reaction of the equity of the Thums Up brand in India,
gin Of Brands, argue the UK’s major beverage brands who re- despite the ‘Bollywood-isation’ of Coca-
case that great brands are acted by launching ‘me too’ products. The Cola advertising.
created through diver- branding captures the essence of the product In setting out to create brands by design
gence that creates new which is quirky, pure fruit and fair trade. rather than by default, businesses should first
categories, rather than PROMISE OF PERFORMANCE: The consider the strategic implications of the new
evolution or convergence brand promises an experience (often commu- brand – does it represent a new branch in the
of existing categories. nicated through the media) which has to be tree of brands that represent the industry, or
One of the many exam- delivered seamlessly across product and em- is it the evolution of an existing branch? This
ples quoted by the authors ployee touch points. It is through aligning the would determine its brand architecture.
is that of Red Bull, whose product, communication and employees be- The brand identity is then developed into an
founder Dietrich Mates- hind the brand idea that the promise can be idea which captures the vision, values and
chitz discovered the drink which was a pop- met. If not, stakeholders’ experience will of- personality of the business, to create a com-
ular health tonic called Kraeting Daeng in ten be below expectations. Sir Richard Bran- pelling brand proposition that energises both
Thailand. He liked it so much that he decid- son defines the Virgin brand as consistently customers and employees. It is through con-
ed to launch it in his home country, Austria. offering better value in every category it en- sistent delivery of the brand idea across all
He could have bought the rights to the name ters, through its low-cost business model. The touch points that the brand creates its image
Kraeting Daeng or perhaps called it ‘Thai brand is about always delivering value for amongst its stakeholders and prevails against
Tea’. Instead, he decided to call his beverage money, innovation, fun and a sense of com- competitor response. Bridging identity and
an energy drink – thus creating a new catego- petitive challenge. With over 200 companies image is thus the responsibility of brand
ry that was simple enough for consumers to worldwide, Virgin uses empowered employ- champions, and a key to the long-term sus-
understand and connect with. ees and continuous monitoring of customer tainability of the brand.
The writer is a Brand Strategist with a bias towards operational excellence who consults for
STING Consultants, Sri Lanka’s only pure strategic marketing and brand-consulting company.
176 – MAY 2007 – LMD