So we're in the fourth section of this course and I really want to focus on the importance of branding. So branding is one of the quadrants in the retail success matrix. And of course it's important in and of itself, and if we think about all the disruption that's going on, most of its caused by COVID, there's been a lot of disruption in branding. And I don't really think that's been caused by Covid per se, it's kind of happened in parallel, but what consumers are expecting from brands have changed over time. So let's look at first, what is a brand? I'm sure everybody thinks they know what a brand is, so maybe this will just be review or to introduce vocabulary, so I can say what we think is of interest in a branding. And then I'm going to talk about this new idea that brands have to be more than just telling you product attributes or customer experience, they also have to have purpose. So we'll talk a little bit about how that happened and this was all pre COVID. But as with everything else got accelerated during COVID and I think for parallel reasons, I don't think it has to do with the pandemic, but it is when it happened. And then I'll give you some examples of branding strategies that are kind of trying to contribute to this new definition of branding and finally offer some conclusions for the whole course. So let's start first with what is a brand? If I look at the formal definition, it's basically a trademark for a specific product or service. People think of brands as a modern patent, if you've got a brand name, you should trade market and then you own it. And so there's some value in just having a unique name for your product. It differentiates the product, so as a trademark, that's one advantage of branding for sure. But of course, branding means way more than this just formal definition of a trademark. Conceptually, it's some kind of contract from a company to its customers, it's a promise of specific benefits of quality of value. It kind of brands, this notion of relationship that I've been talking about over all of these sections. And now in our connected world, really, a brand is no longer what the firm tells the consumer it is, it's what consumers tell each other it is. So what a brand is, is what I tell my friends a brand is and that kind of relationship is harder for brands to control, but they must. So the anything that's said about that brand, any kind of nuance you take about that brand is really the brand managers responsibility. And you've got to protect not only the formal trademark you have, but also what people are saying about your brand and what the implicit contracts are about your brand. All of that has to be protected by the brand manager, but what a good brand is, starts from the basic. So if you've ever taken a marketing course or you know anything about basic marketing, this does not change, it's still true. What a good brand is starts from positioning and what is a positioning statement for a good brand? First of all, you have to identify who are the target segments that you're going after, who are the customers that you are targeting your brand for? You should not be a brand necessarily for everyone, it's for a target segment and you need to have in your mind who that target customer is. The second thing you have to think about is, what is the point of difference that your product offers, what's special about your product? And then you have to think about relative to whom, who's your frame of reference? So my product is better than these other products on some particular dimension. Now the point of difference and frame of reference kind of works together because as you change your frame of reference, you might be changing what your point of difference is. And so in thinking about all of this, who your target segment is, what your point of difference is, what your frame of reference is, all of that has to be strategic. But you have to be very clear what your positioning is and what it is not. And that is the core of a really good brand, meaning something specific to a specific target segment. Where you offer some kind of point of difference relative to the competition that's positioning. And the last piece of it is, why should I believe you? Give me reasons to believe that your brand is what it says it is, so be authentic. This is all basic branding, basic positioning, branding one of one, so to speak. And if you have a strong brand, what happens? That brand, the communication, your messaging brings that strategic positioning to life and then good brands buy you a lot of other things. If you have a very strong brand that serves as a quality signal. You believe every time you buy a Starbucks cup of coffee, it's going to be the same coffee each time, you know exactly what it's going to taste like and that consistent quality is guaranteed by the Mermaid brand logo on it. Similarly for all these other brands that I'm sure you recognize, they signal high quality, high consistent quality. This is true not only for consumer brands, but it's true for me to be brands. BCG, the Boston Consulting Group is branded as business services and consulting that you can depend on because they are branded by this well known branding name. And IBM has always been that way, there is a famous saying that said, no one ever got fired for buying IBM, because you would trust that IBM would deliver quality service. So it's the same as for consumer goods as it is in B2B brands. You can also look at brands like, think about the kind of person who would wear Polo as different from the kind of person who shops at urban outfitters. So what's different about these two brands are also communicating identity, and this is a very big term that people are thinking about a lot with brand. The brands that you value, the brands that you frequent, the stores that you go to, the clothing that you wear say something about you as an individual. They signal your identity, you are wearing that brand and so you are intricately involved with that brand identity. That makes a brand very, very, very strong if the brand signals your own identity. So that's a very big concept in modern branding, the idea of brand identity. And of course strong brands create value for companies, if you have a very strong brand, even if the product inside was the same, you can command a price premium. Because people are literally paying a premium for that strong brand for many reasons because of the signal of quality, because of the signal of identity. And all these other reasons that I have talked about, people will pay a price premiums for very strong brands. Now, this is an interesting thing, and this is going to talk about how brands have changed. Here is a product, it's a bread product, that's Dave's bread and they offer a purpose behind every love. So they offer second chances for people that work at their company, so what are they selling? This brand is not about product attributes or customer benefits, it's about the purpose behind every love. And we'll talk about how branding has changed, and this is an example of that kind of branding.
