Brand development process

The brand development process

Why read this? : Your brand is how customers recognise you and understand what you can do for them. We share the 5 key steps which make up the brand development process. Learn what’s needed at each step, and how to pull the different outputs together. Read this to perfect the process of brand development.

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Customers also look at factors like the logo, the packaging, and the customer experience. These help them distinguish between different brands.

The way brands do their advertising, copywriting and graphic design, their website and many other communication activities also influence how customers perceive the brand. These tell the customer who you are, and what you stand for.

If your brand seems relevant to their needs, then they’re more likely to choose you over competitors.

Your brand then is how customers identify, evaluate and differentiate your products and services.

So your brand’s more than just a name. It’s all the associations which go with the name too.

The brand development process is a basic building block of your marketing skills. It’s important to make it work well so you can be more confident you’ll hit your business goal.

But before we cover the process, we should first look at why brands matter. What’s the value they offer your business?

Why brands matter

There’s a lot of evidence to show strong brands drive overall company performance. Look at this Brand Z study from Kantar Millward Brown, for example.

This study tracks the market value performance of “Strong Brands” against the average of the S&P 500 and against the MSCI (a global weighted average of all stocks).

You can see that as far back as 2007, strong brands deliver superior value and shareholder return over a longer period of time. In this case, the return on $1 invested in a ‘strong brand’ company would be almost 4x higher than that invested in the ‘average’ company.

This extra return from strong brands is driven by 2 key factors.

First, the higher price the customer is willing to pay for a ‘strong’ brand.

And then, strong brands occupy more space. That can mean physical space such as in-store, or on an online shop. It can also mean more awareness of the brand name.

This means strong brands are (a) more likely to be chosen the first time someone buys and (b) more likely to be chosen when that person buys again.

Let’s look at a couple of category examples to bring this to life.

Example : Kitchen towels

(source : Woolworths online)

In this first example, we chose a category where the basic product is quite similar in terms of functional benefit and raw ingredients. All these products clean up kitchen spills and are made from paper.

It’s also a product category that’s quite functional. There’s no strong emotional attachment behind the category. You literally throw the product away after use.

So with those facts in mind, you’d think the price customers would pay would be similar for all products in the category. But, that’s clearly not the case.

Look at the differences in the price comparison per 100 sheets. It varies from $0.85 (the Woolworths own label Essentials pack) up to $2.44 (the Handee Ultra). The Handee product costs you almost 3x as much per sheet as the Essentials product. And yet, it does exactly the same task.

The power of the brand

That extra value comes down to the power of the brand. Handee’s brand strength makes customers OK with paying so much more for it.

Even if you strip out the own label product, the other products range in price from $1.79 up to $2.44. So you still pay more than a third again premium for Handee on the second cheapest available product.

Customers make many judgements about the “value” of products over and above the functional benefits it delivers.

In this case, customers who pay for the most expensive product may feel it’ll last longer. Or is better for the environment. Or will soak up spills better. These are all examples of perceived brand-led benefits.

Example : Bottled water

(source : Coles online)

Let’s look at an even more striking example. In this case, bottled water in Coles.

Among these 12 products, you can pick up the Frantelle at $0.76 per 1L. But you could also pay $8.33 per 1L for the Voss Artesian Still water.

But functionally, these are the same essential product (H2O). They satisfy the same functional need of thirst relief.

But the power of the brand created by Voss drives a more than 10x premium in the price between the cheapest and most expensive products.

Think of any category – cars, computers, insurance, fashion – and you see a common thread where ‘stronger’ brands charge a premium over competitors because they know customers will be willing to pay it.

This isn’t to say “strong brands” necessarily mean “expensive brands”. Many strong brands play in the middle of the price range. Look at Kleenex in the kitchen towel example, or Evian in the bottled water example. But there’s a consistent trend in almost every category that strong brands charge more.

Strong brands build a price premium that customers are willing to pay

When products have similar functional benefits, it’s often the intangible perceptions of the brands which drive the purchase decision. And make customers not always be driven by the cheapest product available.

Strong brands also often have less need to run price discounts and promotions to generate sales.

They might run a promotion if they need to drive trial. Especially with new customers. But they know loyal customers will buy the brand no matter the price. So they only use price promotion tactics for short-term objectives.

Long-term, strong brands don’t rely on price promotions.

The first key take-away on why brands matter then is that custmers pay more for strong brands.

This leads us on to the second area of why brands matter. Strong brands take up more “space” in the mind of the customer. They come easier to mind when they decide what to buy. This can be because the product is the most popular (the market leader) or it’s a challenger brand that changes the way people think about the category (a thought leader).

Let’s look at another couple of online grocery examples.

Example : Breakfast cereal

(source : Woolworths online)

In this example, these are the first 12 products you see when you go to the cereals “aisle” at Woolworths online.

We can see 8 Kellogg’s products, 3 Weet-bix products and an advert for Nestle.

There are 129 products in total available in the cereals category, but data that tracks shopper behaviour shows that most consumers do not review all the choices available. These twelve choices would be enough for most people. Unless they were looking for something specific.

With 129 choices, there’s literally TOO much choice. This is a phenomenon known as Choice Overload. In fact, the famous “Jam experiment” where customers could choose from a small selection or a large selection of jams in a store showed that less choice is more likely to drive a purchase decision.

Too much choice overwhelms people and they walk away.

How much choice to avoid overload?

It used to be thought a choice of 7 options plus or minus 2 was the optimal amount to drive customer decisions. This goes back to famous psychology experiment in the 1950s by Harvard Professor George A. Miller.

However, as per our design psychology article, more recent research by Nelson Cowan showed the maximum number of chunks in working memory is more like 4 (plus or minus 1).

If you’re the market leader in your category, you can use that insight with retailers to maximise the space you take up in a physical or online store. You can keep smaller competitors out, or push them to the sidelines. You make sure your products dominate the number of choices customers can handle.

It’s often easier from a customer point of view to pick from the trusted / valued brands they know than invest the time to research or choose something different. Smaller brands need to become challenger brands to overcome this.

Example : Toothpaste

(source : Coles online)

This habitual repeat purchase behaviour creates loyal customers for brands like Kellogg’s and Weet-bix in breakfast cereals, or Colgate and Sensodyne in the very similar toothpaste example we can see here.

In the toothpaste example, there are only 2 choices available. So these brands clearly dominate the space and keep any other brand from getting in.

This again is down to the power of the brand.

That’s not to say other brands can’t compete against the market leaders in those categories. But it makes the job more of a challenge.

As a challenger brand, you need to find a way round this entrenched customer behaviour.

Customers choose brands they trust / value because it’s just easier for them to do so. In many categories, they habitually buy the same thing over and over.

This consequence of repeat buyers and loyal customers is the other key area where strong brands add value. This shopper behaviour drives sales and profit.

So, if the price premium and creation of loyal repeat customers are the outcome of creating a strong brand, where do strong brands actually start?

For that, let’s move on to the brand development process itself.

The brand development process

There are many views on the best ways to create and develop brands.

From academic marketing books to the powerpoint decks of agencies and consultants, there’s no single process which works for everyone.

However, most of the processes follow a similar flow.

They have the same underlying logic, even if they use different words.

These usually consist of the 5 key steps we outline below. It starts with analysing your market and takes you all the way through to brand activation.

Step 1 : Analyse your market

Your aim in this step is look for opportunities and issues.

Opportunities come from unmet or poorly met customer needs. Issues come from not meeting customer needs, or having a competitor who does it better.

To find the opportunities and issues, you need to collate and analyse your marketing data. You need to carry out research by talking directly to customers (with qualitative or quantitative research), or doing secondary research.

As per our market research in the marketing plan guide this information gathering and analysis is the end of one process – market research. But it’s also the start of a new one – the brand development process.

Step 2 : Define your brand goal

You define your brand goal through creating your brand purpose and vision.

Brand purpose

Your brand purpose is your brand’s reason for being. Why does it exist?

This could be as simple as “make money”. But there’s an assumption every business needs to make money. So the purpose is usually at a higher level. It’s a more motivating idea around changing your customers’ attitudes and / or behaviours.

It’s sometimes also called a brand mission. What is your brand trying to do?

Brand purpose examples

Look at Starbuck’s, for example. Their purpose / mission is to “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”

Or look at Apple’s mission statement “to bring the best user experience to its customers through its innovative hardware, software, and services.”

These statements define what the brand does, and what it stands for.

For Starbucks, it sets the focus on the individual and community connection of their stores. For Apple, it sets the focus on customer centricity, innovation and design.

The clearer you can articulate this brand purpose, the easier it is for you to prioritise and plan the activities needed to deliver that purpose.

So Starbucks CAN clearly expand into overseas markets based on its purpose. But it wouldn’t expand into an adjacent category like soft drinks, because it doesn’t fit the purpose.

Apple CAN look to improve its operating system because that fits the purpose. But it wouldn’t get into selling branded T-shirts because they wouldn’t fit the purpose.

So your brand purpose makes it clear what you do and don’t do. It informs decisions you’ll make on brand identity and brand activation.

Brand vision is about the future

A logical follow-on to the brand purpose is the brand vision. This is more around painting a picture of what the future looks like for the brand. Where the purpose is what the business does now.

It can be a description or an image or a video which brings to life the 3-5 year ambition of the brand. And in some businesses even further out than that.

As global branding expert, Professor David Aaker puts it, it’s …

“… ideas behind a brand that help guide the future … it reflects and supports the business strategy, differentiates from competitors, resonates with customers, energizes and inspires employees and partners, and precipitates a gush of ideas for marketing programs”.

Step 3 : Segment, target, position

The segmentations, targeting and positioning stage is where your market analysis and brand goals come together. This is where you make key marketing decisions.

You tighten and define who you’ll go for, and how you’ll persuade them to choose your brand.

There’s 3 key actions in this step.

First, you look at the total market and segment customers into groups based on similar attributes they share.

You then look at the attractiveness of each segment and prioritise which ones to go for. You target the segments which best fit your brand, goals, purpose and vision.

And then you define the positioning your brand needs to occupy in the minds of its target audience to deliver against the goal. You do this by creating a positioning statement and map.

(See our separate segmentation, targeting and positioning guide for more detail on how to do this part of the process).

Step 4 : Brand identity

Your positioning statement helps you start the process of building your brand identity.

This brand identity is a working document and library of how to build and create your brand.

It ensures consistent delivery across all activity your brand undertakes. It includes your brand essence, brand values, and a description of its personality.

Your identity also includes the key tangible assets which define what the brand look and sounds like. These assets cover the visuals, designs and tone of voice which help customers identify your brand. It’s the DNA of your brand.

Step 5 : Brand activation

Your brand identity then goes into your brand activation. There’s 2 steps to this. First, your marketing plan. Then specific activity briefs and performance measurement you do over the course of the year.

See our brand activation guide for more on this, plus our specific guides on communications and digital marketing.

Final point on the brand development process and it’s an important one. Once you hit the end of the process, you need to set up a measurement system to see if it works. This sixth step in the process takes you back to the start, as you analyse the market with your updated measures.

This is about gathering marketing data. Sales numbers. Brand health tracking. Customer feedback. Digital data. And so on.

Your brand’s actions, and those of competitors change the nature of the market. So, this new analysis of the market kicks off the process again. It drives any changes you need to make on your brand.

Key tips to manage the brand development process

Tip 1 - Flex the process to fit your business

And not the other way around.

Many agencies and consultancies make great claims about being the experts in branding.

However, in our experience, many of them develop a standardised approach to the brand development process. They then force fit it to your business.

We don’t recommend this approach. What works on one brand or in one industry won’t always transfer to another brand or industry. Look for agility around how the process will be used.

Bigger agencies bring teams of consultants (with the fees to match) to craft your brand. If you’re a big business, this can run into hundreds of thousands of dollars, as was the case with Diageo, for example. The Diageo name was created from the Latin for ‘day’ and the Greek for ‘world’ and is now embedded in the company’s brand identity. But at the time, it received a lot of mocking press coverage for the expense in creating the name.

Our experience is that involving more people and spending more money doesn’t always lead to better results.

Find brand experts flexible enough to adapt to you and your business

Ask them questions to make sure they can tailor their approach to suit your needs. Do they feel engaged and interested in you and your brand? Do you feel they’ve put in the effort to understand the challenges in your category?

A strong brand is a valuable asset for your business. It’s worth searching for the right expert to help you build it. (See also our marketing agency evaluation article for more on how to find a good marketing partner).

Tip 2 - Put yourself in the customer’s shoes

Customers choose brands, because of what the brands can do for them. And in most categories, they have a lot of brands to choose from.

As you build your brand, you should consistently have customers in mind. What is it you uniquely can do for them? What is it you can do that will make you meaningful and distinctive? Why would customers care about your positioning or your brand assets?

If you can keep this customer mind-set, it stops you falling down the rabbit-hole many businesses fall into when they try to create a brand.

Agencies often have an agency-centric view of the world. There’s often a lot of jargon and psycho-babble in what they say. While some of this may be helpful, it’s not what the customer is going to see.

Customers look for the benefit your brand can offer them. There’s a famous marketing quote from Theodore Levitt – “customers don’t want quarter-inch drills, they want quarter-inch holes”.

Keep this in mind, so you don’t get hung up on what you or your agency want, and lose sight of what the customer wants.

Tip 3 - Have a clear brand owner who makes decisions

Our final tip is more pragmatic. As you start to develop brand assets beyond the brand name and purpose, the need for someone to own decisions about the brand becomes clear.

There’s a lot of decision making to finalise brand assets.

Is this shade of blue better than that one? Should the logo be in a circle or a square?

Now, these sorts of decisions should be tested with market research. But ultimately, there should be a ‘brand owner’ who makes the final marketing decisions.

In bigger businesses this might be a brand manager or marketing manager. In smaller businesses it’s often the owner or founder. But someone has to be responsible for ensuring the consistency of the brand. To ‘own’ the brand.

This role becomes especially important when you start to work on the brand identity.

We’ve had too many hours wasted in the past arguing the difference between very similar sounding words. Is the brand ‘playful’ or ‘mischievous’? Is the brand ‘clever’ or ‘considered’? These sorts of semantic arguments happen all the time in the brand development process. But they slow the process down, and create frustration and disputes.

This ownership and accountability when you have a brand owner helps speed up the decision making process. And it helps to have someone to resolve disputes and issues. We highly recommend this role is identified and made clear to everyone at the start of the brand development process.

Conclusion - The brand development process

This guide covered why branding is important. You use it to drive more value, either via higher prices or more loyal customers. Strong brands drive growth.

We outlined the 5 key steps you of through to create brands. And we highlighted the importance of measurement to go back and continue to refine and define the brand.

We finished with 3 key tips on how to make the brand development process run more smoothly. Those were – find the right branding expert, think from the customer point of view and have a clear brand owner.

Following these steps and tips is a great way to start building your brand.

Three-Brains and brand strategy

Need help building your brand strategy? Confused by the amount of information and the many claims of agencies who say they can solve all your problems? Before you’ve even told them what the problems are?

We have many years of experience as marketers building successful brands. We offer coaching and consulting services to listen to your marketing challenges and get you to successful and pragmatic answers quickly. Contact us to find out more about what we can do for you.

The brand development process

Brand development process

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