What Is Branding?

A comprehensive guide to the world of branding
It is an exciting time for branding. As everything becomes global, good branding becomes more crucial. "What is Branding?" is an accessible guide that makes sense of this complex subject. It explores the process of branding, and shares insights that can be applied to practical challenges.
Outlining the components of branding (positioning, storytelling, design, price, and relationships), what it can be applied to, and what it can achieve, "What is Branding?" will help ensure the success of branding for any product, service, person, or place.
Case studies included in the international portfolio of campaigns explain what makes them work, why they matter, and what can be learnt from them. Analysis focuses both on design know-how and on theory, looking at how professionals wrestle with abstract notions of perception, culture, and love while at the same time solving the nuts-and-bolts problems of package design, sign making, and web technology.

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Lufthansa Italia

winging it?
There is an air war brewing that is changing the way European airlines operate. Driven by a sputtering economy, airlines in Europe are gradually departing from the one government/one airline model. They are increasingly looking to cross-country mergers, sometimes involving private investors, as a means of survival.

Alitalia is a case in point. The Italian government-owned airline filed for bankruptcy last August, and a group of private Italian investors stepped in. Then, in January 2009, Air France-KLM (itself a merged airline) bought a stake in Alitalia.


That action precipitated the creation of another airline’s new brand: German carrier Lufthansa quickly launched a separate operation, christening it Lufthansa Italia.
Lufthansa had an interest in buying a stake in Alitalia but lost out to Air France-KLM. Rather than cede the lucrative Italian routes, Lufthansa took a calculated risk and created its own new brand. It’s the first time Lufthansa has established a carrier outside its home market of Germany.
Granted, Lufthansa is an established worldwide brand. Known for its German punctuality and efficiency, Lufthansa has fared better than most European airlines. Still, the question is, will Lufthansa be able to bring the same magic to Lufthansa Italia?
Lufthansa Italia may have taken off suddenly, but Lufthansa has already shown commitment to the integrity of the new brand. Lufthansa has set up the airline as a separate subsidiary based in Milan, Italy. The airline adorned two Airbus jets with the new airline’s name and designated the planes “Milano” and “Varese” after two Italian cities. Previously, Lufthansa had named its planes only after German cities. Lufthansa Italia started operations in early February 2009, flying out of Malpensa (Milan) Airport to Paris, France, and Barcelona, Spain. More aircraft were scheduled to be added in March, and routes to Brussels, Bucharest, Budapest, Lisbon, London and Madrid were scheduled to be online by the end of March.
Lufthansa says it will imbue the new Lufthansa Italia with “reliability and high quality blended with Italian flair.” The airline says it has developed “special Italian-style in-flight services” for Lufthansa Italia (although it doesn’t specify what they are). The planes are configured to seat 138 passengers in business and economy class. Lufthansa’s operations at Malpensa Airport will be upgraded to include dedicated check-in counters, more quick check-in terminals, refurbished gate and baggage reclaim areas, and a new and improved Lufthansa lounge.
Also in February, Lufthansa Cargo announced the launch of freighter services between Milan and New York and Chicago, taking advantage of Alitalia’s failed cargo operations. Lufthansa said it will use the freight capacity of its Lufthansa Italia jets to increase the company’s Italian cargo business.
There was another motivation to starting Lufthansa Italia. Lufthansa Executive Vice President Karl Ulrich Garnadt told ATWOnline.com that the airline will seek an Italian Air Operators Certificate so that it can gain the right to fly to Eastern Europe and other non–European Union destinations.
For the present, at least, Lufthansa Italia will need to operate primarily as a budget airline. That’s because there is heavy competition for the Malpensa routes. But according to Der Spiegel, competition could also benefit Lufthansa Italia: “… there's a good chance Lufthansa will obtain flight rights on the lucrative route between Milan and Rome for the first time. Until now, the lucrative route has been largely reserved for Alitalia and Air One, but after their merger there is significant probability that the European Commission will require that the route be opened up to other competitors” (January 13, 2009).
Upstart airline brands have succeeded in Europe before. Richard Branson’s Virgin Atlantic famously came on the scene in 1984 to challenge British Airways’ monopoly. The two airlines have been fierce rivals ever since. Ryanair, arguably Europe’s most successful low-fare airline, began flying between Ireland and London in 1985. By 2006, Ryanair had carried a record 42.5 million passengers, and became the world’s first airline to carry more than four million international passengers in one month. Today Ryanair owns 30 percent of Aer Lingus, Ireland’s national airline and Ryanair’s former archrival.
Lufthansa Italia may have a different kind of challenge ahead, however. Alitalia is still a formidable brand. It has been in existence since 1946, and it has carried the colors of the Italian flag in its logo, a stylized capital A, since 1969. Italian air travelers could well remain committed to a brand that has been closely tied to their homeland for more than sixty years.
On the other hand, Alitalia has endured union strikes, poor service, management problems and a recent bankruptcy. With private investors and Air France as part owner, Alitalia is moving further away from, not closer to, its Italian roots. That presents a market opportunity for Lufthansa’s new venture. If Lufthansa Italia can show it is well run, competitive and respectful of Italian culture, this upstart airline could quickly make gains with Italian travelers. They will likely pick superior economical service over loyalty to a former national airline that is in serious need of a makeover. This is the new global economy, after all.

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China court sides with Starbucks

A Chinese court has sided with the Starbucks coffee house chain in its battle with a Shanghai rival over their use of the same Chinese name, news reports said.
The dispute in China's booming market for gourmet coffee highlights the country's struggle to mediate trademark disputes, a new concept for the communist legal system.
A Shanghai court ordered Shanghai Xingbake Cafe Corp. Ltd. to stop using the name Xingbake, the name used in Chinese by Starbucks Corp., the Shanghai Daily and China Daily newspapers said. Xing, pronounced "shing," means star in Chinese, and bake, or "bah kuh," sounds like bucks.
The Shanghai No. 2 Intermediate People's Court said the Shanghai firm engaged in "illegitimate competition" by using Starbucks' Chinese name and imitating the design of its cafes, the China Daily said.
Judge Lu Guoqiang's ruling Saturday also ordered Shanghai Xingbake to pay Starbucks 500,000 yuan, or $62,000, in damages, the reports said.
Starbucks opened its first cafe in China in 1999. It later caused a stir by adding outlets in Beijing's imperial palace and at the Great Wall, north of the Chinese capital.
Foreign rivals and Chinese upstarts have jumped into the market to compete for well-heeled customers who pay up to $6 for a cup of coffee — more than the average Chinese worker makes in a day.
Starbucks sued Shanghai Xingbake in 2003.
The Shanghai coffee house argued that its name was valid because it was registered in 2000, before Starbucks applied for its own Chinese trademark.
Starbucks rejected that, saying its name and mermaid trademark were registered in China beginning in 1996.
The Shanghai Daily report Sunday said the Starbucks ruling was the first of its kind under a 2001 Chinese law meant to protect well-known international trademarks.
Foreign companies have complained for years that the Chinese government is failing to stamp out piracy of copyrighted or trademarked goods such as movies or designer clothes.
More recently, Chinese companies have begun to turn to the courts to protect their own names. A Shanghai soft drink maker, Yaqing Industry and Trade Co., lost a lawsuit last January against the Coca Cola Co. and its local bottler over the name of a new beverage.
Yaqing claimed the characters for Coke's Qoo fruit drink — "Ku-er" in Chinese — were too close to those of Yaqing's Kuhai drink. But a Shanghai court ruled that the two names were different enough that consumers wouldn't confuse them.

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Franchising For Dummies

If you want to own your business but don't want to start from scratch, maybe buying into a franchise is the right choice for you! Franchising can be a great way to get started in small business without taking the huge risk of founding and building a company on your own. But before you jump in there's plenty you need to know in order to make sure you do it right.Franchising For Dummies, Second Edition gives you all the inside insight and smart advice to make sure you pick the right investment opportunity and make the most of it. Written by one of the nation's leading franchise consultants and by the late Dave Thomas, founder of Wendy's International, this fun, friendly guide is packed with guidance from top industry professionals. Packed with practical resources you need to succeed, this handy guide will help you: Pick the perfect franchise opportunity for you Find an ideal location Raise the capital you need to launch your franchise Manage daily business operations Understand complex legal issues Work and communicate with your franchisor and other franchisees Read and understand a Uniform Franchise Offering Circular Expand your business and buy new franchises Full of handy resources-including sample forms and agreements and a listing of available government resources-Franchising For Dummies, Second Edition is a great way to discover a great franchising opportunity, get started, and achieve your dream of small business success and independence.Note: CD-ROM/DVD and other supplementary materials are not included as part of eBook file.

Franchising For Dummies
by: Michael Seid, Dave Thomas
Edition: 2, illustrated, revised
Diterbitkan oleh For Dummies, 2006
ISBN 0470045817, 9780470045817
408 page.

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Starbucks - The coffee giant under attack?

Since founding an entire industry around brewed coffee 15 years ago, Starbucks has enjoyed roaring success - and the success continues. The third quarter results in 2007 showed that the revenues increased 20% to US$2.4 billion and net income increased 9% to US$158.3 million.
But as always, such success attracts competitors. Starbucks has no dearth of competitors. McDonald's, Dunkin' Donuts and Burger King are some of the fiercest of competitors of Starbucks in the United States. So serious are these other players that a 2007 Consumer Reports' head to head comparison of coffee from all these four brands declared McDonald's the winner. McDonald's, a new entrant into the coffee sector beat Starbucks. Such reports beg the question: Is Starbucks under attack?
Competition is the reality of business. Successful companies and their brands have always attracted competition. Well managed companies have always thwarted such competition and have succeeded. But in this case, it is not just competition. An underlying change in Starbucks' main customer base is altering the strategic landscape for the coffee giant.
Affluent women and professionals earning an average US$92,000 a year were the core customer base of Starbucks. These customers bought the Starbucks' idea of coffee with a context rather than just a product. As such, they were not too price sensitive. But over the years, Starbucks' quest for growth both within the United States and also globally has acquired a new set of customers. Compared to the original group, this new generation of customers is less educated, less affluent and more price sensitive. To complicate the matter further, many of the aforementioned competitors have decided to compete on price. Given the combination of factors, Starbucks seems to be under attack.
What can Starbucks do to retain the leadership position? For starters, Starbucks will have to strengthen the brand, its brand equity and its many touch points. In many affluent cities in the US such as New York City and Boston, Starbucks outlets get too crowded and customers just walk out to a competitors' café. That has to be corrected right away. More importantly, Starbucks should focus the attention once again on the brand experience. Starbucks is not just about a cup of coffee, but is about the ambience, a third alternative between home and work. Such a focus on the overall brand experience will divert the customers from a singular focus on price.
Finally, Starbucks should launch new products (new combinations of coffee) to cater to its changing base of customers. These actions should allow Starbucks to continue to have a strong hold on the coffee market, refresh its brand and gain new territory for its brand equity.

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BRand Sense

Martin Lindstrom's groundbreaking new book BRAND sense, has just been released worldwide by Simon & Schuster. With a foreword by one of the all-time masters of marketing, the distinguished Dr Philip Kotler, Professor of International Marketing at the Kellogg School of Management, and endorsed by CEOs and chairmen from various companies ranging from McDonald's to Disney and Mattel. BRAND sense is being touted as the marketing book of 2005.
Three neglected senses From the first newsprint ads that appeared over 150 years ago, to the computer-generated, special-effects bonanzas that dominate our lives in the 21st century, brands have been built and emotions tapped into by using only two of our five senses. Sight and sound! Brand communication has reached a new frontier. In order to successfully conquer future horizons, brands will have to find ways of appealing to the three neglected senses.
It can be done! BRAND sense will tell you how.
The fresh smell of a new car...
Drawing heavily on the data of his extensive research, Lindstrom's discovered some remarkable facts. BRAND sense proves how the smell of a new car, or the perfect sound of a closing car door, plays a major role in selecting what model is purchased. Ironically, a new-car smell simply doesn't exist. What the consumer smells is an artificial odor that's been sprayed into the interior, creating a sense of quality. Now the generic "new car smell" is about to be branded along with the sound of a closing door - just like Singapore Airlines has patented the smell in their cabin. Likewise, the sound and feel of Kellogg's cornflakes crunching in our mouth has been created in sound labs.

40% of all brands are to include Sensory Branding by 2006
If brands want to build and maintain loyalty, they are going to be forced to establish a strategy that appeals to all our senses. This is a fact that no serious brand-builder can ignore. It is estimated that 35 per cent of the world's Fortune 500 brands will include a sensory branding strategy in their marketing plan by the end of 2006. Quite simply, their future survival will depend on it.

BRAND sense offers to show you how to turn your brand from a two-sense product into a five-sense phenomenon. In a fail-proof six-step process it will help brands cross the all-important sensory frontier. There are innovative branding tools for evaluating where your brand is on the sensory scale. You can analyze your brand's future sensory potential, and then follow a clear pathway to build and optimize its sensory appeal. Lindstrom cites companies like Cadillac, Apple, Mercedes-Benz, Nokia, McDonald's, Louis Vuitton, Nestle, and Disney, all of whom have recently adopted a sensory approach and have seen their brands perform superbly under this new direction.

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Thoughts on Re-Branding

When does a company know it’s time to re-brand?
What process should they take to go from old and tired to current and relevant?
What are some hits and misses in re-branding recently?
When does a company know it’s time to re-brand?
Except in rare instances, which we’ll mention in a minute, it doesn’t.
Like most branding “principles” there’s little that’s black and white on this issue.

Re-branding is a judgement call that far too often, companies undertake prematurely or unnecessarily, shooting their brands in the foot instead of launching them to the new heights predicted by the change meisters. In fact, pre-mature rebranding is a serious disease that’s generally caused by three factors :

1) The NMD Phenominon (New Marketing Director) -- who feels the need to justify his being hired by putting his stamp on a new campaign, regardless of whether the current one is successfully building brand equity or not.

2) The Steinbrenner Syndrome (As in George Steinbrenner) Acting on the shortsighted
urge, because of impatience, to meddle with a brand structure that’s not
broken, and would indeed build equity over time and exposure--because
management demands more instant gratification.

3) FT-itus—(False Tired itus). There’s a notion among managers that brands
become “tired” over a finite period of time and need to be refreshed. This notion
is caused by projecting the managers’ own familiarity or boredom with a campaign onto the public, who may be experiencing an entirely opposite effect.
Great brands work because of familiarity and repetition of a great, original idea of
value, not in spite of familiarity and repetition. People love this familiarity and the trust it builds over time and through consistent performance. Changing core brand components (tagline, look and feel, key visuals, naming,etc.) too early and too often is one of the “12 Great Amateur Mistakes” noted in our book “Why Johnny Can’t Brand.” The only chance your carefully planted brand sapling has to grow into a mighty tree, is not to pull it out by the roots every 6-12 months the way too many companies do, vaulting themselves back to the starting line every time, short-circuiting any equity that might develop, and ultimately confusing their public.
Professionals fundamentally understand this and for them, re-branding as a last
resort vs. a first. They are well aware that great brands, the household names,
often remain unchanged and fully effective for decades. And there are too
numerous accounts of great, abandoned campaigns—that still, stubbornly, score
the highest in current recall and awareness studies—even though the advertising
hasn’t run for 25 years. As a result, many companies finally wake up, stop trying
to fight the brains of their public who are still playing the original messaging in
their heads like a song, and resurrect what they should never have re-branded in
the first place.
In fact, last night we saw a Saab commercial that featured jet fighters flying past
their new convertible named Aero. The announcer said—“Saabs are built by
aircraft engineers,” (doesn’t that make you believe in the design and quality?)
The “new tagline” is Born from Jets. This campaign is a resurrected classic that
Saab had departed from for many years. Saab is indeed the Swedish Jet Aircraft
Manufacturer who also builds cars. A Saab dashboard looked and felt like an
aircraft cockpit. Saab, recently purchased by General Motors, was loosing its
identity. They brought back their original Dominant Selling Idea – The cars built
with Jet Plane Standards.
We also noticed that KFC has been going back to Kentucky Fried Chicken in
recent campaigns. Another return to heritage story.
So after all the above, when do you know you should re-brand? As a flight
instructor once said to a student who was strapped into a parachute and asked,
“when will I know if I should jump,” the instructor replied “ONLY if you look out the
door and see the soles of my shoes.”
In other words, the decision to re-brand is black and white when your brand
equity has suffered a hit or a disaster that’s turned your brand impression
inalterably negative—usually because of bad product performance, a decline in
service, or some other mishap (like a major technology or market shift) that may
or may not have been in your control.
ValuJet was literally flying high the day before it’s famous crash into the
Everglades because of faulty operating procedures. Instantaneously, the brand
ValuJet no longer meant low cost, convenient airline. It meant death in a swamp.
ValuJet made the decision to rename itself, re-build its entire identity. Today it’s
doing well as AirTran.
ValuJet is an extreme case.
A less extreme but relevant example of the right decision to re-brand was
Cadillac. Cadillac finally accepted the reality that through old, tired, uninspired
product style, performance and marketing, it had driven itself into a dead end
with no room for a U-Turn. The brand that once meant the pinnacle of American
personal success, now meant blue hair grandmothers going 20 miles under the
speed limit in St. Petersburg. It meant shabby construction and sluggish handling
that had literally dropped off the radar of consideration if you were looking for a
luxury car. It reached a low point when GM thought it could fool its customers
with what was called “badge branding”—building Cadillacs on Chevy frames,
then adding leather seats and a Cadillac emblem. GM was fooling no one except
itself, delivering slow death to the brand, while the Europeans and Japanese
were adding the coffin nails with quality, innovation and panache of their own.
Cadillac had nowhere to go but up. It did too critical things:
1) It began the now famous “Breakthrough” Campaigns, set to the Music of Led
Zeppelin—hip, energetic, youthful and familiar rock n roll. But most importantly,
2) it radically changed the design and engineering of the product. So that the new
ads didn’t point me to the same old thing. It said, this is the challenging
breakthrough. See it, drive it and believe it.
Cadillac with models ranging from the Escalade to the STS and hot new sports
coupes has been resurgent—a model re-branding success story.
The process of going from old and tired to current and relevant
There is one overarching thing to remember here: Re-branding is not a
matter of painting new tail colors on the airliner, then delivering the same old
crappy service. That re-brands nothing. You have to do what Cadillac did. You
have to re-engineer the performance, the tangible experience, the perceived
value at trial—you have to change the walk—then do the talk. A “brand” is
ultimately not a logo, set of colors and a tagline. All those communications
components do is invite the audience to think about the brand the way you want
them to. The brand has to perform as advertised, or great communication only
accelerates your destruction. With some exceptions for extremely image
dependent products like fashion or perfumes for example, 90% of the brand
happens in the product experience. 10% in the telling about it. Some big re-brand hits and misses Again, Cadillac. BP oil has re-branded itself now as the “green” oil company. Can’t tell you how this has quantitatively affected sales or perception, but we hear, anecdotally, that the effort is positive. For one thing, other major oil
companies like shell are trying to emulate them now, the sincerest form of
flattery. BP is thinking about the long term equity of their brand. Misses? ATT trying to convince the world that suddenly, it was the world’s networking company, not too long ago. Another key reason re-branding’s fail,aside from changing too early and often, is the lack of credibility factor. A successful brand idea is superlative, important and believable.
You can’t just slap slogans on your company and product and attempt to
advertise it—if the public can’t believe it coming from you. If a brand proposition
isn’t credible for any reason, it’s automatically dismissed by the customer. It’s as
good as invisible. That was one of ATT’s problems.©

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