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According to Barbara Kahn, director of the Jay H. Baker Retailing Center at Wharton, the increasing popularity of social media has two implications for marketers: First, customers now control the message and second, companies must make sure that key elements of their brand can translate throughout the world. In a recent interview with Wharton MBA candidate Alexandra Idol, Kahn discusses her new book, Global Brand Power: Leveraging Branding for Long-Term Growth, the brand “as a mechanism for growth” and how companies can become more customer focused.
An edited transcript of the conversation follows.
Alexandra Idol: I’m here today to speak with Wharton marketing professor Barbara Kahn, regarding her new book Global Brand Power. I’m curious as to what inspired you to write a book about global brand power?
Barbara Kahn: Although there are plenty of books on branding out there, I think that there are a few advantages this one [offers]. First of all, it’s short, which I think is a big advantage for busy business people. But second of all, things have changed, in that it is much more important to understand the global implications of your brand. Many people today started with a brand that was in their local market or for a particular product and didn’t consider the implications of the global marketplace. Also, in this world of social media and the Internet, what it means to be a brand is different because of those different mediums and types of communication.
Idol: Throughout your research, was there anything that surprised you?
Kahn: I don’t know if it surprised me, but if I had to think of what is most important or what you really should think about, it is how to use the global brand as a mechanism for growth. [It is important] to think, even when you are starting out as a very small start-up or wherever you are in your business cycle, about the implications of a global brand as a way to grow into new markets and across different products. It has serious implications when you start planning the positioning of your brand.
Idol: Can you give me some examples of great global brands that have leveraged themselves in the way that you just mentioned?
Kahn: Coca-Cola, Toyota or any of those global brands are certainly brands that have the same basic brand positioning and messaging the world over. It used to be a brand might mean one thing in the U.S. and something different in Europe; now, because of the Internet and because the world is flat, you really have to think about what message will cross the different markets. There still exist differences — cultural differences, geographic differences and differences in distribution. To understand how a brand works in different markets is complicated. It’s an easy concept, but it’s hard to implement.
Idol: Can you talk a little bit more about how social media and the Internet are playing a role in global brands?
Kahn: One of the big changes in branding is that 100 years ago, brands were very product-focused. Then brands became very much customer-focused. You talked about a brand in terms of what it meant or what value it had to the customers. In the world of social media, the reason why it’s really different is because customers are talking to other customers about the brand. You lose control of the message unless you have a very strong DNA and a strong brand community so that the customers are transferring the message the way you want. That’s very hard to do. A lot of what the brand means is communicated through discussions in social media, through chats, through blogs, through things that the manufacturer or the brand owner doesn’t control.
Unless you really position the brand in a very strong way and people understand its DNA, you run the risk of detrimental things being said about your brand or a lack of consistency. It’s a very hard world to control.
Idol: Can you talk about how companies can sustain a long-term competitive advantage?
Kahn: That is what you’re going to try to look for. You don’t want to just do it for the short term; you want to think about it for the long term. But that’s difficult because it’s hard to predict what the world is going to look like. It’s hard to predict how competitors are going to react to you. You’re constantly having to change and adapt. What it suggests is that you try as hard as you can to think into the future about what your brand is going to mean, but you constantly have to monitor your positioning, monitor what customers are saying, what your competition is doing, keeping your brand fresh, keeping it relevant, and responding well to the competition and what they are doing.
Idol: Are there key strategies for keeping your brand fresh and relevant?
Kahn: The most important thing is to be market aware. That’s another thing, by the way, that I tried to put in the book: different ways of getting market research or understanding the voice of the customer. There are a lot of metrics out there. There’s a lot of brand valuation. You have to defend to the finance and the accounting types in your organization why it’s worth spending so much money on building a brand and marketing. To do that, you need to understand the brand value.
You also need to understand what the customers are thinking about the product or the brand. You can’t always just ask them. There are some techniques described in the book that you can figure out from the way the customers respond. There’s one tool called the ZMET where you let them take pictures. They may not be able to verbally tell you what they think about the brand, but they can show you their emotions and the metaphors that they are using for the brand. In order to keep the brand fresh, you have to constantly monitor and measure brand activity.
Idol: What are the key components that make up a strong global brand?
Kahn: The key components are the brand positioning. That’s the most important thing. You have to figure out who is your frame of reference and what is your competitive set. If you’re a luxury brand or if you’re a brand for the masses, what are the brands that you’re competing with? Relative to that frame of reference, what’s your point of difference? That’s fundamental to brand positioning, to understand who your competitive set is and why you are better than that competition.
The other thing that I think really helps in thinking about a brand is to think about the emotional characteristic and the person characteristics. Frequently, you want to think of a target user for your brand. Your brand may be broader than that target user, but if you have a target user in mind in thinking about the brand positioning, you come up with a much sharper brand. So, for example, while everyone might own an Apple, the target user tends to be someone who’s [design-oriented] or creative; a young design kind of person might be who you would think of as the target user for Apple. It doesn’t limit who might buy the brand, but it gives you a clearer vision of what that brand is. A very clear, consistent image and positioning for the brand are fundamental.
Idol: Do you recommend that all brands have a great brand personality?
Kahn: Brand personality refers to traits of a brand, and you can think of a brand like a person. Sincerity is a brand personality trait. Hallmark is a sincere brand. In the book, I describe about seven personality traits that come from one particular research study that Stanford professor Jennifer Aaker did. The idea is to think about the personality of the brand, the voice of the brand. Going back to social media, a lot of the discussion nowadays is if you have a brand voice within Facebook, what’s the voice of that brand? Is it a consistent voice? That’s another way of thinking about the personality of the brand, thinking about the voice of the brand.
Idol: What are some of the challenges that you see companies today facing in building brands? And what advice can you give them to overcome these challenges?
Kahn: Well, the first one is that it is expensive. That’s another reason I think of brand as a mechanism for growth is so important, because it costs so much money to build a strong, reliable, consistent brand that you want to be able to leverage that investment. The other thing is, as you were alluding to, the competition changes, the market changes and the brand has to continue to be relevant. If you don’t think of a brand as a global brand and you start out with a brand that’s too limited, it’s very hard to let it keep going and changing with changing times and changing strategic directions. Keeping the brand modern, keeping it relevant, responding to customer needs, responding to changes in the marketplace and justifying the investment that you have to put into building a brand, all of those things are the challenges for a brand.
Idol: How do you see social media playing out in terms of branding? Do you think it will help brands moving forward?
Kahn: Social media is here, so you have to play along with it. It can be a great advantage because there’s no stronger recommendation for a brand than one customer to another. If I tell you I love this brand, that’s a very authentic message. When those messages are carried through social media, they are quite compelling. On the one hand, the problem is you don’t always control it. It’s kind of a love/hate relationship that you have with social media. But I don’t think it’s going away. It’s a function more of how to leverage it and how to keep it together and keep it as a positive influence for the brand.
Idol: What are the key brand management tools that you want the business community to take away from your book?
Kahn: The first message is if you want to have a strong brand today, it’s got to be customer-focused. You have to understand the customer and how the customer thinks about the brand on the path to purchase. The second message is you have to think about your brand relative to the competition, so what’s the brand positioning? It has to be a positioning that’s simple, quick, that the customers get immediately and that is a compelling position. The third one is measurement. In order to constantly monitor the brand and justify the investment, you need to monitor what customers think about the brand over time, and you need to measure different brand metrics that tell you about the health of the brand, like a brand report card. Then the next message: Is this brand positioned for growth? Once you have a strong brand, how can you leverage it across other products, into different markets? The last piece is, what are the brand communication mechanisms? How do you use logo, how do you use color, how do you use advertising? What are the tactics for keeping a brand fresh and growing the brand over time?
Idol: Finally, what are the key differences that you see that a strong global brand has versus a brand that’s trying to grow or trying to go global?
Kahn: A global brand is incredibly powerful. We know from the valuation mechanisms that a brand like Coca-Cola is worth $70 billion. A very strong brand is worth millions and millions of dollars. Why is it worth so much? Because people recognize it instantly. You can bring out new brands under that. It has very high brand awareness. When people are thinking about what brand to use, they think about brands that they can recall easily. It’s very clear what the brand means. You don’t have to do a lot of advertising once you have that brand message in a customer’s head, so you can keep your customers very loyal. Once you really have a strong brand, you can have an emotional tie. A strong brand gives you an incredible advantage.