Product vs. Corporate Brands=--How to Decide

I spent most of my adult life as head of corporate marketing and communications at several global companies. I also studied marketing and communications in graduate school and have taught reputation and brand management at several business schools, as well as consulting to companies in this area. It never ceases to amaze me how many companies continue to attempt to apply product brand concepts to their corporate brand. While the process of brand management is the same, brand decisions must be made quite differently.

The concept of brands and brand management came from consumer product companies. Many business textbooks assert that Wedgewood China was the first know product brand. What this means is that Wedgewood was the first known person to extract greater value for his product with his name on the product than his competitors. Others had china. He had Wedgewood China. The products may have been the same, but he was able to differentiate with his personal reputation for excellence in quality and design. Since those early days, companies have been searching for ways to differentiate their products through branding. Products may be the same from an engineering and manufacturing perspective, but they can be differentiated and personalized through branding.

The mistake that companies make, however, is that they think that the brand is differentiated with a cool name or by making bold claims of difference. In product brands, consumer companies use what is called Unique Selling Proposition (USP) to differentiate what might otherwise be similar products. Toothpaste might all be the same, but some are whiteners, others have mouthwash, some have tarter control, etc. These subtle differences are designed to attract to the product those for whom these USP are important. For non-consumer products companies, differentiation can be found in what can be called Value Proposition. That is, the rationale for buying the product over another in the same competitive set. Let's understand, though, that the marketplace of non-consumer products is very different from that of consumer products. That is, the needs of the customer are different, the competitive marketplace is different, and the sales engagement is different. Despite these differences, many non-consumer products companies follow consumer products principles in their branding activities. How can you make decisions about your brand strategies?

The best way is to look at the product from the outside-in, the way the customer sees it and to understand the needs and interests that determine the buying decision. I would suggest that there are two basic variables driving buying decisions: 1) the amount of fear, uncertainty and doubt (FUD) that the customer has in making the decision to buy; and 2) the complexity of the buying decision. Consumer products elicit little FUD and there is little complexity in the buying decision. If I want a Coke but the restaurant only sells Pepsi, there is little FUD or complexity. In contrast, if I am the CIO of a company buying 20,000 desktop computers for my company, there is a great deal of FUD and complexity. I could jeopardize or lose my job if my decision is wrong, and the decision may need the input of others who are more expert that I am. It helps for a company to draw a 2x2 matrix, with one axis being FUD and the other complexity, and to determine where their products and company value proposition lie. The more FUD and complexity, the greater the interest in corporate brand. The customer wants to know that the company behind the product is viable and strong. Consumer products have less need for corporate brand and focus on product brands.The same matrix can be used to determine the right marketing communications mix to support the branding decisions. Consumer products can be driven by advertising and marketing public relations. Non-consumer products brands need strong relationship management since they often build their brands at the point of sales.

So, for those of you who are working in non-financial products companies, use this matrix the next time a brand manager or researcher comes up with a "new cool way" to brand your products. It will help provide some analytics to an otherwise emotional discussion.