– Thoughts on Strategy and Management

I-something – branding in practice

I am quite happy. Since yesterday Germany is back. Back in the club of technology driven countries, where technological options and brands are the main drivers for progress.

What’s on? Yesterday the sale of the world famous iPhone did start in Germany. One of the leading German newspapers, the FAZ (Frankfurter Allgemeine Zeitung) addicted nearly an entire page in its Tuesday section “Technik & Motor” (technology and engine). Who should be interested in this phone? Customers who value design, handling and quality should consider this appliance very carefully. Opposite to this it might not be the very best device for people who want to write tons of e-mails on the road (FAZ).

Technology and handling is one side of the business. More interesting it is a very good example how important marketing techniques (and of course design) have become in fully satisfied markets. Do you have a mobile phone? The probable answer is yes. It is the first multi media mobile phone in the market place? The correct answer is no.

So what did Apple achieve? Using design and stressing the “feel different” aspect of having an apple-whatever or listen to i-something, Apple perfectly decommoditized its products. In the case that Apple’s products would be perceived to be the same as those of other makers, then consumers would be indifferent ands would choose the cheapest (MP3-player etc) or most accessible. Today customers all over the world perceive this brand as superior; hence they prefer it and pay more for those i-products.

So far, so easy. But I would like to highlight an important differentiation: product, brand and successful brand. A product is anything which meets the functional needs of existing or potential customers. This can be a physical product or a service product. Most makers put an emphasis on identifying their own products and differentiate them from products or service of their competitors. A brand is a specific name, design or symbol – sometimes a combination – in order to distinguish a certain product. Awareness is an important fact that has to be achieved for the specific brand. More difficult is the establishment of brand preference. Spending large portions of financial resources can achieve brand awareness, but it can not ensure to establish brand preference.
However, a successful brand goes one major step further. In addition to having a product which meets the functional requirements of customers, it will add value which meets certain of their psychological needs. This can be the feeling or the confidence, that the brand is more desirable or of higher quality related to similar products from competitors.
In summary Apple was able to achieve both, brand awareness and brand preference.

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