The 7 Pillars of Branding

Although the question of branding has always been essential part of marketing and has been approached with multi-dimension models, sometimes these studies have been made without systematic approach or with full of redundancy or ad-hoc views. Unlike marketing which has the widely-known and usable, practical 7P-model, branding still misses such a sort of basic structure which makes the skeleton of all branding story.

Here I am making an outline of such a simplified model to help people in successfully designing brands and also to better understanding the already existing ones. I collected 7 layers of the branding with 7 different tasks to be completed in everyday actions. I hope this can be useful for the readers, too.

Right before entering this syllabus, we need to define what brand and branding is: in our view brand is a vision that is related to a specific company, product or any specific entity which lives in people and materializes to them. Branding is the art of deliberate control over the whole process.

First pillar: Publicly known

A brand always defines a smaller or bigger group of people who are somehow aware of the product or the service in question. This is the prerequisite or trivial condition of all brands: if you are the only one who knows a specific service or uses a specific product and no information is publicized, the service or product is unable to evolve into a brand. This is the primary task of all marketing efforts, making our specific product or service (along with its whole branding costume) widely known on the addressed market: the majority of the marketing budget is used for this purpose. At this point we normally pay attention to the details of the publicity of all brands: target segment(s), its content, geographic, demography, media, communication methods, timing etc.

Task 1: design and make your publicity

However, the fame of a product or service is not exclusively based on the publicity gained (mostly depending on the money available for promoting the brand) via frontal, push-type of promotion. Money spent on communications is a very important factor to reach the second stage of publicity: the people involved in the communications flow will probably share the information with each other and start a – sometimes very simple and few words – discussion about the product or service heard. The act of sharing the information with each other happens or has happened with all known brands. Suggestions, opinions made in public are very important in articulating brand and thus creating or strengthening/weakening brands. This is why the importance of Facebook in contemporary marketing cannot be overestimated enough, or, with similar effect, the customer service/problem handling has always been focal point of customer satisfaction and branding, too.

The publicity of branding therefore incorporates all means of sharing the information related to a specific brand or service. There are two basic type of publicities: there is of course the strictly controlled information sharing method (typically: marketing communications) and we also have to face a second publicity, the huge uncontrolled means of communication. When we are thinking on designing a new brand or just examining an existing one, we have to enlist all the ways how the specific brand gains publicity and sort them by relevance with regards to the public coverage and effect, making special attention to the uncontrolled ways of publicity.

The success of controlling publicity is a key to profit from branding, however, public control will never mean information monopoly over the media and over the outcome: even situations when a company has theoretically 100% control over the situation (e.g. customer care desk at the office or shop), it is always a challenge to control what is exactly happening there, what is going to be told or heard. Thus, from micro to macro level the publicity always carries a huge uncertainty factor with regards to reach, direct effect and future implications.

Second pillar: Associative and narrative – stories around

The discussions initiated and information shared publicly about a brand (or a branded product or service) would show up the next major characteristic of brands, that is, the power of the coupling or association related to the branded products or services. In other words, branding means that we create stories around a brand. Brand identity or personality, brand vision, brand promise are the official stories reflecting the narrative of a generic brand on different levels. Marketing creative planning is exactly doing the same around a specific product of a brand (e.g. ‘The environment friendly Toyota Prius’ as a story), while general brand stories (I mean the Toyota brand in the example) or associations are on higher level only. We therefore have to consider several layers of brand stories or narratives when examining them. It is very useful when these stories are consistent and formed professionally and are not contradicting to each other.

Brands are incorporating many stories and ideas not just from individual products and services determined by the company but stories and ideas also coming from the public. Unfortunately – as we mentioned above – we cannot control the majority of the perceptions of our brand. Individual opinions, perceived qualities, good or bad experiences are building the narrative universe, or more simply, the stories of a brand.

Task 2: define and drive brand stories

Notwithstanding the above, we can drive these brand stories and narrow them to the desired ones on at least two-three different areas. The mission statement of a company/organization is the very source of official brand stories and determines the branding direction via its written values and operational reasons. Secondly, the slogan or the tagline of a brand (like LG’s Life’s Good) is meant to embody the driving narrative story and works like a magnet: collects all the associations around a brand. The third layer of story comes along with specific products or services: repeating the slogans, taglines while inserting the logo of the brand on individual products/services makes the specific product or service painted with the general brand’s associations and qualities. The individual story of a product or service is like a topping on the branding cake. Pure brand campaigns on the other hand are always aiming outlining and fixing the desired main stories and narratives of qualities in the customers.

Controlling publicity cannot be done without controlling the stories attached to a specific brand and seems the major task of all branding and communications managers. Here, we have to highlight a related issue which behaves like the blind spot of the branding: rebranding. Rebranding campaigns are to change the very basic story of a brand. This is the reason why these campaigns fail many times and real rebranding is a very seldom event.

Third pillar: Concrete and multiplicative form

In real life we always give tangible forms to brands because we want to make profit from our money spent. Brand without concrete product/service to buy (or without a related person when we talk about personal brands) is useless or just a promise (like the newly planned Jolla mobile OS with only a demo video). The embodiment of a Brand is an essential part of its very nature.

Normally we use the power of a general Brand Name for many individual products. An already existing brand hands over its potentials (its stories of qualities, usage, value etc.) to specific, individual products and even when we see a new product of an already known brand we are already having a presupposition or sense of certain expectations towards the brand new product. A VW car is perceived for many as a reliable one; however, it may happen that a much lower quality is introduced in a new model than what the brand had fulfilled at its predecessors.

Task 3: make several appearances to utilize brand power

Most times we may say that a brand is transferred into several products and therefore it is multiplicative. It is very seldom that an earned reputation of a brand represented in only one product or service. For example the perfume 4711 seems to be transferred only into one product for a long time, but the brand’s product portfolio today consists of more than one item: after shave or even shower gel is also produced. Start-ups typically own only one product and normally the first product is the one that determines and forms the brand later on. Initially, the brand is typically built upon on only one product or service and this is why it is very sensitive when entering a market with a new company and a new product: it also determines the future brand and products the company assessed with.

Personal brands, seen superficially, are not multiplicative: a person who has double face (see politicians) and therefore not able to form a consistent and concrete personal brand, are subject to lose their reputation and their face rapidly. This is because brands can have only one concrete (credible) story, without major contradictions. The multiplicative nature of personal brands should be investigated from another perspective. In case we regard a person’s appearances in public as concretizations and multiplications of his/her brand, we are closer to the truth and we understand better why celebrities and politicians are so keen on public appearances.

Fourth pillar: Unique proposition

The history of branding is stemming from the wish of making a producer’s goods identifiable. This is not just to ensure the identity of goods but also to prevent from copying and forgery. The brands around us are still carrying these old attributes: the logo of the company/brand is expressing the uniqueness of a brand (supported by law as trade marks) and helps us to identify a specific brand in the universe of brands and signs.

Sometimes it is very hard to make distinction based on the products/services alone: Pepsi and its rivals put in a neutral glass next to each other are unidentifiable, so the use of branding techniques is crucial for gaining profit for both companies. Just like in the cola case, the technological industry also heavily relies on the branding when selling its products or services: PCs, laptops, smart phones or internet accesses are very similar to each other. Or, a tax advisory service consultant firm is facing real challenges to provide specific brand vision.

Task 4: find and use the means of brand differentiations

The unique proposition of the brands has to be built up and shown for the public: the individual logos of brands on devices for example help the company to make distinction from their competitors and help the customers to identify different market players in order to make a personal choice of preference. Most times companies heavily rely on the unique brand distinguishers, like stories about their unique market segment, tailor-made products, additional services they provide etc. Sometimes, when stories among a group of competitors are very similar or compatible (like the Big Four Auditors) and even their service is similar, a common story may evolve around them focusing on more the similarity and indirectly expressing the exclusivity of the group members.

Fifth pillar: Value

When we identify a brand on its telltale signs (e.g. design) or logo we do not think on what we see first (the product itself) but rather we focus on the brand value represented by the specific product or service. We may say (even without seeing the product) that if you are having Martin Logan stereo speakers that is very cool, but if you are having Philips that is not so awesome. Different brands represent different values: there are low-end and high-end brands with many in between. Start-up companies have to position their brand value on the axis predetermined by the existing market players. Making decision on positioning the companies’ services or products on the lower or higher end of this axis has nothing to do with ethical values: a low-end, cheap car helps many disabled or poor people without doubt. Rather, making the choice of brand values determine the market we are about to target. And this target market decision affects our business outlooks directly. When Toyota launched it Lexus series and decided to focus on the higher end cars they probably considered the higher profit option.

The value of a brand is also expressed in a more measurable way. In general ledgers brands are valued as a part of the company’s goodwill and are very sensitive for new product introductions and for amortization, too. From financial point of view brands regarded as assets that have been created due to investment and are also subject to lose or increase their values.

Task 5: define and carry brand values

The value of a brand emanates into individual products of a company and the value of the sold products affects the value of the brands. More surprisingly, the value of a brand may transfer over the buyer persona influencing the perceived value of a person in a certain group of people (see Apple fan-effect) while the network-effect of the public also modifies the brand value (exclusivity, limited models are also able to increase brand value).

The relative price of a product or the whole branded portfolio both has very special connection with the brand value: the higher the price positioned the harder to imagine low brand value. This is because the narrative of the price (see Second pillar) influences the brand value. Other narratives of a brand (how durable it is, for instance, or which celebrities are using this brand) heavily effect the brand value, too. Similarly, the extent of public spread (see First pillar – how much the brand is known, how much spent on advertising) also effects the brand value.

Brand value is determined by several other factors even not listed here. It is partly the result of deliberate actions of the company (market positioning of the brand and its products) but also exposed to external factors (like time) and public opinion.( LG’s rebranding from the low-end Goldstar brand to the higher positioned LG showed that value propositions of a brand require efforts in both areas. Grundig made the opposite U-turn when sold to Chinese company.)

Sixth pillar: personal relation

All the pillars encountered previously are summoning on personal level because the nature and the definition of branding 100% relates to human feelings and perceptions. Most cases we can translate this personal effect and feelings to perceived brand values and the position of a brand in the customers’ head. People know or do not know, like or dislike brands, become haters or fans of brands, recommend or just accept certain brands.

Task 6: turn personal relation to action

As a result, this personal disposition of a brand clearly ends up in the relation to the act of buying. We, marketing professionals should not deny the aboriginal intention of our branding efforts to influence buying decisions on personal level. We are not just simply influencing people in business for the sake of general human aims: we do not want world peace; we do want to have our specific products and services sold. We want to convince John or Clair Smith as individual customers to select our service or product. This is the action we – or more generally: the investors – expect from any investments (including brand campaigns) made.

Fortunately we not all live in the business sector, not all follow business aims (i.e. sales) in our lives. Surprisingly, non-profit organizations are not so much different from business ventures from this point of view. Non-profits also want to have a specific action to be reached: an action that is maybe appearing directly (like giving donation for starving people) but can be mental action or change to be targeted (for instance diversity campaigns).

The personal relation to a branded entity can be outlined in a matrix where on the first axis we can define the readiness or probability of buying action (or in a non-profit: readiness for action) and on the second axis we may highlight the level of brand’s emotional acceptance.

The personal relation to a specific brand with regards to the ultimate sales reason can be mapped as shown, but we should not forget that personal emotions and relations to brands are much wider than presented above: some people feel that their beloved brand is expressing also their way of life, involving several other actions well beyond a simple shopping; or just feeling neutral about a brand while the person is not going to be represented in any commercial situation (like myself with any hunting brands, although I know some of them).

We should therefore identify very precisely the personal relations to our brand of our existing and potential customers and we should make focused actions to harvest the branding efforts we have previously made.

Seventh pillar: Exposure to time

We have already mentioned before the amortization as an important factor in brand values. The simple reason of amortization is that the brands (via materialized products/services) and the customers live in time.

The general life exposure to time factor represented in concrete shapes with regards to brand itself and to its specific products/services. (Amortization is only the result of that process.) Brand perception very much effected by the products/services in timeline (e.g. how much up-to-date the product is reflects the brand’s state-of-the-art nature) and on the other hand the brand itself (without looking at individual products) also has an individual character which has its own life-cycle (how old a brand is, what type of products they represent).

Task 7: Consider time: plan and replan over time

Brands do not last for ever and are changing over time, even without deliberate actions. Amortization expresses the time-factor in economic terms but all the pillars mentioned before has a time layer. The r

Avoid The Celebrity Brand Wagon

Using your own name to brand your business may appear a simple solution, but in the long term, it’s a much more difficult way to create a recognised and respected, stand out brand.

What about Lorna Jane, Donald Trump or Coco Channel?

Of course it has been done and there are well known name based brands, but what may seem an easy way out at first, could create a rod for your own back.

The human brain ‘sees’ brands with emotion and attaches these to a memory in order to recognise and recall a brand when the need arises.

Having your name on your business could disenfranchise the very people you are trying to attract.

Donald Trump creates an emotion of wealth and power… but what has that done for his business brand, especially in the political arena?

Lorna Jane creates an emotion of vibrant fitness, one which alienates women who aren’t a particular shape and size.

Celebrity Chef Pete Evans healthy brand emotion, now seems to be quite frankly, a bit nuts.

As for Coco Channel, the brand emotion is chic and classy… but then, that wasn’t actually her real name.

It’s easy to use your own name because it saves you having to come up with something else, making branding a no-brainer.

But your brand still needs to generate an emotional reaction in order to stand out and become memorable for the right reasons.

Do you know what you want to be memorable for?
Because if you brand using your name, your personal reputation is on the line.

Benjamin Franklin once said:
“It takes many good deeds to build a good reputation and just one bad one to lose it”.

The biggest risk you run when you brand with your name, is that every public and private move affects your brand.

When a company stuffs up, personal brands like Richard Branson or Gary Vaynerchuk are responsible for the reputation of their businesses, but they focus on building the brand culture rather than on promoting their own name over that of their brand.

The question to ask yourself is, do you plan to spend many years and a great deal of money to build yourself into a celebrity brand or would you rather spend your time and money on marketing your services and how you help people?

Brand awareness takes time, you want to make sure you are investing yours in the right way, right from the start.

Your brand is also asset, like McDonalds, Adidas or Coke, these are all brands worth millions more than the actual company. If your brand is your name, it’s going to be difficult to cut yourself off from it when you need to.

Tempting as it may be to brand with your own name when you provide a service, because ‘you are your business’ to start with, it can also make you indispensable. And that’s a problem if you want growth.

Personal trainers, photographers, real estate agents and business coaches who name their business after themselves have clients who expect them to show up at their door and no-one else will fill their shoes.

Like it or not, you generate a trust currency for your brand and when your company is named after you, the only exchange clients want is engagement with you.

So go ahead and brand with your name but be prepared to front up.

You are probably building your business to give you a lifestyle, otherwise you’d just be working for someone else right? If you are considering branding with your name, ask what what sort of life do you want to have while you are building your brand?

If you want to grow a successful business that can run without you, so you can focus 100% on the work you really love, you are best to choose a name that’s not your own.

From experience in helping hundreds of professionals to develop their personal brands, it’s going to take about 3 years for your brand to really ‘get known’ to the point of industry respect, where you get referrals and clients, media interviews and speaking requests, from sources you didn’t even know existed.

Yes, having your name out there as the go-to specialist for what you do really well is vital, but do you really want all that attention on your personal life, or on your business brand?

To really be successful, you need your business to feed you, not to run you. If you want to be able to grow your brand, venture into new markets, add a variety of services or franchise and duplicate, a personally brand named business could hold you back and stifle your options.

Most importantly, your brand is actually not really about you, it’s about engaging and connecting with your ideal prospects and enabling them to know, like and trust you, from a simple interaction with your brand, not necessarily having to actually meet you.

A brand can do that for you, if you are prepared to understand your target audience and build the subconscious triggers into your brand identity that ‘speak’ to their brain.

Neurobrands Fedex, Amazon and Baskin Robbins do this with ease.

If you really still want to use your own name in your branding, one option is to use it as an endorsing brand – ONEactive by Michelle Bridges is a clear example of brand extension which enabled a celebrity brand to branch out into the apparel market.

If you don’t use your name to brand your business, you can choose from one of these three proven formats:

The best brand names are either created, abstract or descriptive:

Created brand names include;

Google – a googol is a very large number – a ’1′ followed by a hundred 000′s – the idea being that Google delivers the most search results
Xerox – which has become an eponym (the echelon o brand names like Hoover, Kleenex and Band-Aid) where a proprietary name is used as a verb, or to describe a general use
Adidas – is Adolf ‘Adi’ Dasslers name joined together, interestingly his brother Rudolf’s brand is Puma, which belongs in the next category of abstract names.

You can certainly create a brand using your name like Adolf Dassler did, or play around with ancient languages or Greek mythology like Nike – the goddess of victory, to find a name that tells your brand story and create emotion.

Abstract:

Apple – a fruit or tech company
Twitter – a social media platform or a noise a bird makes
Dominos – a pizza chain or a child’s game

These incredibly well known brands are easy to identify because they are simple, short, catchy and easy to pronounce so the brain loves them even though they theoretically used out of context.

Descriptive:

The Cheesecake Shop
carsales.com
Jims Mowing (and many other variants including Jims Cleaning and Pet Washing Services).

Most service providers prefer the idea of a descriptive brand name over the other options. They feel they need a name that explains what they do, yet the most iconic created and abstract brand names do nothing to explain brand benefits and have massive recognition.

It’s also untrue that your brand name needs to be descriptive in order to be SEO friendly. All the web developers and SEO experts I’ve talked to agree it’s more important to be consistent with keywords and focused content, than to have a brand name that includes a specific word.

Oh and by the way, you should avoid using an acronym for your brand name too…

What’s wrong with using letters given IBM, ANZ, UPS and a host of others brands do exactly that?

Remember what I said about the importance of generating an emotion with your brand?

How can three letters of a brand name generate any sort of emotion? IBM and ANZ at least use blue in their branding to create a feeling of safety and reassurance. UPS is brown and gold, indicating down-to-earth but quality service.

But the brain doesn’t think in words, it thinks in pictures and it’s just too difficult to instantly convey a brand essence with an acronym, especially when you are starting out in business, so avoid it if you can.

Brands help your brain make unconscious choices and an engaging brand name works hard to make it instantly easy for your ideal client to choose you.

10 Things You Didn’t Know About Affiliate Marketing

Most people have heard of affiliate marketing, even if they haven’t actually started doing it. Affiliate marketing is basically referring people to various products and services around the internet. For each sale you generate through your affiliate link, you earn a commission. The size of the commission depends on the products themselves, who is selling them and the percentage offered by the seller to the affiliate.

But what is actually involved in affiliate marketing? What do affiliates do on a daily basis? How do they earn money and how do they learn what to do?

1 An Example Of A Successful Website

There’s several ways of marketing products and services online. Many affiliates create a blog first and sell products and services through their blog. Martin Lewis has a very successful website called moneysavingexpert.com. This is also an affiliate website. By creating content and helping people decide which service to use: which credit card offers to choose, the best interest rate etc. moneysavingexpert.com makes money by sending website visitors to various offers. If a sale is made through this website, the link this credited to it and a commission is made. By creating content, offering value and helping people make sensible choices, the website has built a reputation and become more prevalent over time. Google ranks the site highly in the search engines and thousands of people use it to make purchasing decisions every day.

2 How Can I Get Started As An Affiliate?

Affiliate marketing is huge. There are thousands of people already making their main source of income from the internet. To get started as an affiliate you need to learn some basic strategies and build various methods of generating traffic from the internet to those offers. A lot of affiliates start with a simple blog. Many travelers ‘blog’ about their travels. If you don’t have a passion or interest to blog about, you can start by following an online course which will help. See my bio for more info on this.

3 How Long Does It Take To Make A Living?

Some people go into affiliate marketing with the intention of creating a second income. Some people want to make big money. Depending on how much time you can dedicate to your affiliate business, and how dedicated you are to it, is a big factor in determining your results. Results vary from person to person. With a large advertising budget and the right business model, some affiliates have replaced their living in 6-12 months. For others it can take years before it replaces their existing income. Depending on your approach, advertising budget, and business model, it can take between 3 months and several years to build it to a point where it can replace an existing income.

4 Can Anyone Do It?

One of the great things about affiliate marketing is that the technology is now available to allow anyone to build their own online business. As long as you are prepared to learn and implement that knowledge, anyone who can operate an email, can use online platforms and tools to build their own online business. The main thing you need is the desire to learn. Affiliate marketing isn’t for everyone though. It does take a lot of hard work and it can take years before you are rewarded financially.

5 What Are The Pitfalls Of An Affiliate Business?

You need to dedicate some time to your affiliate business for it to work for the long term. Some people go into affiliate marketing thinking it is some magic pill which will pay them instantly in cash. Much like a job you can’t expect to get out more than you put in. Affiliate marketing is performance related. This means you don’t get paid unless you can successfully sell products and services online. If you don’t know what you are doing it can take years to do this. You can’t be a dabbler and expect to earn the big money. The big earnings are created over years of hard work. Don’t expect to achieve this with only a small amount of input.

6 What Are The Best Things About Affiliate Marketing?

Affiliate marketing offers an incredible amount of flexibility and freedom. You can work an affiliate business from anywhere in the world providing you have a laptop and an internet connection. You can choose your own hours and build it up around existing work. Many people come into affiliate marketing because it offers this kind of flexibility. They can choose their priorities in life: spend more time with family, choose your working hours, travel and work abroad. No more commuting to work or working long hours for a boss you don’t like.

Affiliate marketing also offers incredible scalability. A business which is local is always limited to the people who can travel to that business. An online business can be global. Using digital products in conjunction with a global reach, you can scale using tools and software to reach thousands of people through digital technology. By using automation much of the work involved with an online business can be pre-built. By building automation into the business model, you can focus your activities on reaching a larger audience through content creation and paid advertising.

7 Why Am I Struggling With My Affiliate Business?

A lot of people struggle with their affiliate businesses.This can be for a number of reasons. Firstly building up an affiliate business takes time. You need to dedicate a lot of time to an affiliate business in the first place. Only when you reach a ‘tipping point’ do you really start to see your progress. Many affiliates simply don’t realise how much work is involved. They underestimate how much time they need to dedicate to their online business to make it work.
Paid advertising can allow you to grow your affiliate business quickly. But it costs money and you need the right products too. You can’t advertise small value items with paid advertising. You won’t generate enough profit to cover your advertising costs. You need a range of products and an email list to advertise through.
Content marketing takes much longer to work, depending on your chosen area of business. If you find an untapped niche to market your blog in, you can make some fast progress. However, with a competitive niche you will struggle to get noticed above all the other content which you will have to compete with. There’s several reasons why you might struggle. The main one is lack of knowledge. Get the right education first and your affiliate business will move much faster.

8 What’s The Best Affiliate Model To Use?

There are many different affiliate models, all offering something different to suit the individual. Some affiliates target search traffic and aim to get their content found on Google. Some create their own products and sell them directly to customers. However, having a range of products which you can sell over and over to existing customers is a great model for long term success. Selling a single item online is limited. It means you can only make one commission from each sale. By choosing membership products to promote which also offer back end sales and a built in sales team, you can benefit from monthly commissions and up-sell commissions for the lifetime of any given customer. Selling membership products is definitely a game changer when it come to affiliate marketing because you make an income from each customer, rather than a single commission. But a good model to choose is one in which you have a passion for and can keep doing for the long term. Choosing products which you have no interest in is a short sighted plan. Think about what you would like to do online to generate an income. If you choose to go with your passion, your business will last much longer, and be more successful.

9 Can I Just Sell My Own Products?

Many affiliates create their own products to sell online. However, when you are starting out it is a good idea to learn the basics of marketing first. That way you can start earning more quickly from your affiliate business. I spent a long time creating my own products when I first discovered affiliate marketing. But I didn’t sell anything because of a couple of reasons. Firstly I didn’t research whether my products would have a big enough demand. Secondly I didn’t know how to market them. By joining a program which teaches you how to market products first, you can start making money more quickly. Don’t waste time creating products if you don’t know how to sell them. Marketing is a much more important skill for making money online. Once you know this skill, you can then apply it later when marketing your own products and services. Also your own products will be limited in range. By using an existing product range, you can benefit from products which are already selling. You can choose a program which offers high ticket commission, monthly memberships, back end sales and a built in sales team. Building your own products which offers all of these things not a possibility for most people when starting out.

10 What’s The Point Of Affiliate Marketing?

Some people struggle with the concept of affiliate marketing.They think it sounds too ‘salesy’. When I understood affiliate marketing I immediately found it appealing simply because I needed a flexible way to work around my contract work. I had to drop what I was doing at a moments notice if the phone went. This meant other jobs were awkward to juggle around. No-one wants to employ a ‘flaky’ employee. I wanted to work from my laptop and affiliate marketing gave me that opportunity. For many people this is the reason why they choose affiliate marketing. They can earn an income from their laptop, choose their working hours and not have a boss or place of employment. You don’t have to sell directly to anyone or even talk to a customer. There is no stock to hold. Added to this, the scalability of affiliate marketing which lets you scale up to a global audience and deliver products on autopilot, makes it the best flexible business of the future.

Branding a Winery and Its Wine Is Expensive, Necessary and Benefits the Consumer No Matter the Size

A discussion about branding is generally not a conversation anticipated with excitement. If you’re a marketing type it can be characterized as maybe interesting. But, promising most people an indepth discussion on the subject of wine branding; heck, we might have no one accepting an invitation to our dinner party. In reality, creating a brand image for wineries and wines can help the consumer to be smart buyers.

Because margins can be small for producers and a perponderance of producers are small, small margins impact the small producer profoundly. Branding can be expensive. So what can be done to entice consumers to try a brand they have never heard of before? Now we are talking about branding and it can be risky, even with great planning. Further, it is a lot of compromising.

What impact did branding have on the last bottle of wine you bought? Did you buy that wine because you knew some enticing fact about the winery, winemaker or their wine making processes? Did you buy a wine based upon a friend’s recommendation because they knew your preference for a certain varietal? Have your preferences for a wine changed over the past few years? Do you buy your wine based upon a random trial and found you liked that particular wine? Whatever the process you went through in buying a wine you have been impacted, to some degree, by branding. If you simply selected a wine based upon its price or label design, branding was involved.

Recently, I have had discussions concerning the process of business branding from a corporate perspective and a product perspective. Most of the emphases of these discussions have been specific to the value of branding a winery and their wines; predominately with small producers. Like most everything in business, decisions are generally based upon compromises in budgets, approach, etc. Obviously, the product of a winery is bottles of various varietal wines which are a disposable product that is consumed based upon ever changing sensory perceptions–mostly taste. I submit that the juxtaposition in branding a winery and their products makes this discussion difficult. For example, many wines I like and buy frequently, I don’t even know who produces them. Further, winery brands I recognize, some of their wines I don’t like for various subjective reasons.

Point being, in most branding discussions relating to the wine industry become convoluted. Wineries produce multiple labels and these labels are subjected to consumer reviews that are based on innumerable personal influences. With so many variables, the task of presenting a positive image about a corporate winery brand is difficult.

We all are influenced by branding to some degree, even minimally. For example, a few years ago Tide was going to stop sponsoring NASCAR races. Surprisingly, they found that Tide had a rabid and loyal following with female NASCAR fans and Tide is still a sponsor. The brand had made a commitment and now wanted to change it.

Another example of branding impact is Schlitz beer. In the late 1960′s Schlitz decided to change their formula for brewing their beer. Immediately they went from a premier label, ahead of Budweiser, to being virtually extinct. In 2008, they went back to their original formula of the 1960′s, but the damage to a great brand was permanent.

These examples of powerful brands are obvious. In the case of Schlitz it shows how fragile a brand can be if the consumer is betrayed. However, wine is not a mass market product (like beer) that is as ubiquitous as beer or a laundry detergent. Compared to wine, consumers do not build beer cellars in their home and collect beer. So, wine is a very unique product that is expensive to brand on a per customer basis (this is especially true when consumers understand the discounting needed for distributors to sell and promote a label (discounting is part of the branding strategy).

The demographics for the wine market are broken down into 5 segments with some under 21 years old in the millennial category. This is according to a Wines and Vines Newsletter. The largest segment of wine drinkers are the millennia’s and Generation xers making up 70% of the 5 market segments (Baby Boomers included). Wine Business Monthly estimates 1 of 4 drinking consumers do not drink wine but prefer beer or spirits. Of the 130 million adult populations it is estimated 35% drink some wine, according to Live Science. This illustrates the finite size of the market and the precision required in branding to be effective in developing a consumer’s perception of a corporate winery brand.

For this discussion on winery branding, Wines and Vines tells us that the average price of a bottle of wine keeps inching up and is now approximately $12. The real sweet spot is in the $10-15 per bottle range. When a winery looks at the cost of raw materials, marketing, packaging, sales/discounting and facilities and G/A the margins are restrictive when planning a new or improved branding program. Wineries in this position need volume and a 5,000 case run makes branding challenging, but not impossible.

Using the best information available for this discussion, we assume there are about 44% of the populations who do not drink any alcoholic beverages. Based upon population distribution within the 5 demographic segments there are approximately 65 million people who drink some wine at least monthly. We will assume here that they will buy approximately 3-4 bottles of wine per month (probably a generous assumption). This information could account for the purchase of approximately 220 million bottles of wine in the US. These purchaseswould be for home consumption with an additional amount for restaurant sales and meeting/convention sales.

Here is where the branding issues become real. There are 8,500 wineries in the U.S. 80% of these wineries produce 5,000 cases or less of wine. To add perspective, Gallo produces in excess of 80 million cases of wine in a year for worldwide sales. Keeping with the small producer for the moment, this wine is sold via the winery tasting room, winery wine clubs, on-line (Direct to Consumer), retailers (which includes grocery stores) via Three Tier Distribution that requires discounting to the distributors for retailer discounts, sale commissions, promotions and their advertising.

Remember, there has been no discussion of the wines that are imported from Italy, France, Chile, Argentina, Spain, Portugal, South Africa, New Zealand and Australia. This is important because these producers/importers are worried about branding their products also; this causes a lot of clutter in the market.

It is probably apparent there are large producers, from all over the world, selling wine in America. Some wines do enjoy strong brand recognition such as Yellow Tail from Australia or Gallo from Lodi, CA. Beringer, Mondavi, and Coppola in Napa Valley are also high in brand recognition. In Sonoma we have Kendall Jackson and Rodney Strong. Interestingly, it takes strong revenue and profits to build a brand and if you are a small producer the money it takes for consumer branding activities is prohibitive. We need to always remember every brand (corporate or product) must be positioned differently as an image.

We see that sales of 4 or 5 bottles of wine per month to U.S. consumers is a daunting task just to get trials of the product. This is one of several reasons why wineries are spending more on improving direct sales through their tasting rooms, wine clubs, on-line (Direct to Consumer) sales and social media.

Let’s talk about corporate winery branding. The industry needs an honest relationship with consumers. Otherwise the customer belongs to the 3 Tier Distributor or wine store and the sale becomes exponentially expensive going forward. A winery must define their image, product niches, consumer profile and be targeted to the consumer with a message specific to their targeted consumer. Wine Business.com reports that the vast majority of wine consumers buy wine based upon taste. But, taste is only one of the differentiators. Obviously, wineries have to get the taster.

Branding

Effective branding is about bringing a corporate name, the company’s products, or the services to be top of mind awareness for the customer. A product may even have more recognition/branding than the company name. For example, Kleenex is more recognized than Kimberly Clark which manufacturers Kleenex. That is fine.

Wine is mostly sold, not by a winery name or a label but first through price. Of the 10,000 plus varietals in the world, California has mostly focused on maybe 25 varietals for wine and wine blending. This fact makes it even harder to brand a winery when people look for price first and varietal in third place according to Dr. Thach and Dr. Chang. Number two is branding.

Now consider the changes impacting the wine business. The industry is now impacted with labels and brands announcing: organic wines, sustainable wines, and bio-dynamic farming wines.These add a new twist to branding considerations. Over the past few years there are some trying to brand lower alcohol levels, and medals. Talk about branding overload.

Branding Impact

Wineries must recognize, after the decision is made to add focus to the company and/or its products, the company branding effort must be impacted throughout the organization. It will require constant development, refinement, monitoring, and administration. Finally, a corporate identity must become the culture at the winery. In Dr. Thach and Dr. Chang 2015 survey of: American Wine Consumer Preferences, 61% of their respondents had visited multiple wineries in California alone. This means, if a branding message being put out into the marketplace is not part of the winery culture the brand will be diminished. Consumers will see that culture in action at the winery.

Marketing is not all there is to branding, but it is significantly ahead of number two. Marketing is part of branding because it touches and introduces the brand to consumers, retailers, vendors and the community. There are many large companies that spend vast sums of money on building corporate brand without selling specific products. Boeing is such a company; consumer does not buy $300 million airplanes however they do respond to image.

Finally, companies/brands must protect their image at all costs. Once the Branding Plan (akin to a business plan) is developed, with a good foundation of research and winery metrics, that plan will dictate many things. For example: product launches and new product launches, dictate the messages coming from the company, employee hiring, PR, packaging, and the list encompasses every department is a winery.

Elements to Illustrate Branding Tasks

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