LABEL LOVER

LABEL LOVER

LABEL LOVER
John Ozimek, associate director at Mi liberty

ANY BRAND AS LONG AS IT’S THE RIGHT ONE

It’s easy to claim that we live in a brand-obsessed world. Ever since David Ogilvy defined the concept of ‘brand identity’ in the 1950’s, it’s the brand, rather than the maker or seller, that has become king.

Billions are spent every year to convince mobile phone owners to choose this handset over that one, operator X over operator Y, and so on. For every mobile phone sold, there is hundreds of pounds in hidden marketing budget being spent to reach and influence its owner.

 

Aspire to me

People don’t create brands for fun; what companies are trying to do is to sell something. All modern marketing is about selling something, whether that’s a mobile ringtone or a £20,000 diamond-studded handset. But what is being sold through a brand is more than just the object; it’s the idea of a brand as something to be aspired to, cherished and befriended.

Brands really are important to subscribers. An Indian study published in 2008 showed that of consumers sampled, 42% of them would choose a handset based mainly on brand, with price the second most important consideration at 29%, and key features such as camera third at 18%. Well known handset brands are aspirational, especially in developing markets.

In fact, there is a strong link between income and brand; a study by IDC found that in China and India, international phone brands are seen as desirable because they demonstrate wealth and prestige to others. Owners of such handsets express very high brand loyalty, with more than two thirds advocating their favored brands to others. This could explain some of the success of companies like Nokia, which has flourished in emerging markets despite the seemingly prohibitive prices of high end devices compared to regional brands. It’s nice to know that the culture of ‘bling’ is global.

 

Cherish me

The value to a brand of such loyalty is huge, but getting it and keeping it is a challenge. It’s harder (and more expensive) to get someone to fall in love with a brand than out of love with it; just ask Gerald Ratner.

Take mobile operators; whereas a couple of years ago they could build consumer loyalty through walled-garden exclusivity or own-brand handsets, competition has become more fierce as it’s become more open. Last year Vodafone was ranked as the most powerful British brand and one of the world’s 100 most valuable brands, with a value of $36,962 million. But that’s far smaller than the amount it has to spend each year on marketing and advertising to maintain the loyalty of the same customers that value it so highly.

In fact, it would be fascinating to see whether there is a general trend away from operator brand loyalty; figures from iSuppli suggest that amongst US consumers, brand preference was the biggest purchasing influence for 20% of consumers, regardless of age. But it also showed that the older the subscriber, the more influenced they were by price rather than brand; conversely the younger the subscriber, the more importance they placed on features and services. But in both cases, the brand wasn’t the most important thing.

 

Live with me

What we are seeing now is the blurring of brands that consumers own, and brands that they ‘live’. The brands of a mobile 2.0 world are Facebook, Google, Skype, eBay; they are destinations rather than objects. I can’t own a Facebook, but I can spend huge amounts of time there, connecting with friends and workmates. They are brands that let me live a particular lifestyle; my loyalty comes from what they allow me to do and, essentially, who else I can share that experience with.

For these consumers, operator and handset companies are just the gateway to the brands they really love most. An interesting example of this is the operator 3 UK, which has launched own-brand handsets sold specifically on their ability to access Skype and Facebook. For those users, price and features are more important than the badge on the box. Effectively, 3 UK is letting someone else’s brand take priority as it makes good business sense, and perhaps it knows that compared to Facebook or Google there’s really no competition.

The concept of brand has become so involved that there is a certain consumer for every brand, and a brand for every consumer. Just as I would never dream of buying a Vertu handset for thousands of pounds, I wouldn’t want to own a no-brand or own-brand one either. I can say that because I am free to choose the brands that appeal to me, and the experiences I want to have. As a consumer, if I make enough noise or am patient enough, there’s a good chance someone will come along and market a brand that’s perfect for me as a way to capture my hard earned cash. I don’t have to have what everyone else has.

That’s a hell of a long way from when Henry Ford famously said: “Any customer can have a car painted any colour that he wants, so long as it is black”. I wonder what David Ogilvy would have made of that brand strategy.

 
http://www.miliberty.com/