Archive for February, 2021

Brand Creation and Criteria for Development

February 24th, 2021

Brands can be defined in two ways. Firstly, a brand can be an identification or a mark that differentiates one business from another (through a name or a logo, for example). Secondly, a brand symbolises how people think about your business.Building a brand helps customers in their decision-making, creating a perceived knowledge of what they are going to buy – before they buy it. Brands are based on three related criteria.

Confidence in a business, product or service doing exactly what the customer already believes it will do. For example, a 24-hour convenience store brand can be based on customers’ confidence that it will be open, whatever the time of day or night.The emotional response of the customer to purchasing a product or service. For example, a clothing retailer can create a brand based around making its customers feel good about what they wear, how they look, how good they feel about buying clothes from that shop and what it says about them to their peers.( Josephine Collins,(March 2008)

A brand builds a unique personality for a business, and therefore attracts a defined type of customer.Most importantly, branding is based on consistently rewarding the confidence and delivering the expected emotional response. For example, a domestic cleaning company can build its brand successfully if customers’ homes are always thoroughly cleaned, the owners believe that they are using the best cleaning company and feel good about returning to their newly cleaned homes. Your brand can cover your business as a whole or separate products and services. (Josephine Collins,(March 2008)

When starting your own business, one of your most important concerns is to develop your company’s face to the world. This is your brand. It is the company’s name, how that name is visually expressed through a logo, and how that name and logo extend throughout an organization’s communications. A brand is also how the company is perceived by its customers – the associations and inherent value they place on your business.

A brand is also a kind of promise. It is a set of fundamental principles as understood by anyone who comes into contact with a company. A brand is an organization’s “reason for being”; it is how that reason.( Josephine Collins (March 2008)

is expressed through the various communications to its key audiences, including customers, shareholders, employees, and analysts. A brand should also represent the desired attributes of a company’s products, services, and initiatives.

Apple’s brand is a great example. The Apple logo is clean, elegant, and easily implemented. Notice that the company has altered the use of the apple logo from rainbow-striped to monochromatic. In this way they keep their brand and signal in a new era for their expansive enterprise. Think about how you’ve seen the brand in advertising, trade shows, packaging, product design, and so on. It’s distinctive and it all adds up to a particular promise. The Apple brand stands for quality of design and ease of use.

Brand is a big buzzword in today’s market, but what exactly does it mean? Simply defined, is the brand essence and purpose of what your business stands in the minds of your customers, that they thought what they purchase, both tangible (physical) and intangible (subtleties and feelings ).For example, Nike products provides sports physical. Nike also “selling” speed, fitness, strength, and style.

The brand is not accident, you should deliberately Show&Tell the public what you want them to know and remember about your business unique.

Branding is the action of transferring the brand to target market and create emotional tie to your unique product or service. Branding attract, satisfy and retains customers. Nike work through their consistent visual, logos and slogans determined using well-known athletes as spokespeople for the transfer of non-tangible of their brand.

The brand is important because it solves a problem for consumers. The brand helps them to choose that product or service quality, safety, or function cannot be complete until after the purchase is made is identified. Branding builds trust although cannot remove some risk, especially when doing business with big corporations located outside a local geographic area (credit card companies, broker, online shopping).

Without brand name, products and services easily be compared with each other, any financial institution, insurance representative mix, chocolate bar, coffee, beans, and athletic shoes will be indistinguishable from another, even if in reality a big difference in quality, price, taste, and service can exist.

The Logic behind branding is very simple: If your target market is familiar with your brand and good imagination, they more likely to purchase products and services. But consumers do not know what your business is all about unless you tell them!

Is your company branded? If a distinct graphic, slogan, or feeling doesn’t emerge when buyers hear or see your company name, the brand of your business has yet to be defined and developed. Customers must clearly understand and agree with the nature, character and purpose of your product or service before they’ll buy it. And how they know if you don’t inform them? Hire a professional graphic designer, copywriter, advertising agency to help create and promote your brand of.

It’s never too late to embark on your own branding campaign, regardless of size and age of your business. Creating a successful brand takes deliberate thought and execution, but the sooner you start, the faster the results you see on your bottom line. Here’s how to start:

* Who you are defines what you offer, your method of business, their audiences, and why customers should believe in your products and services is placed.

* The transfer decision and its recognition of all other companies with strong reference image, logo, typeface, colors, slogan, jingle, theme, or tagline. For best results, work with professional skill in graphic design and copywriting.

* Commit to consistently carry your brand through every aspect of your business- stationery, marketing materials, advertising, signage, product packaging, customer service, etc.

Invest in your brand is investing in the success of your company. Clearly know that you are and what you offer, then loudly and consistently portray the image with your target market. Brand of your business is a powerful asset, and therefore maximize its value!

In fact, a brand is mental real estate’. It’s a set of expectations a company instills in its customers and prospects, as well as its employees, suppliers and competition. Further, it’s a service/product or concept that’s easily distinguishable from others. Most important, a brand should enhance how you communicate with customers. I believe that successful branding begins with the recognition that everything a company does/says must drive profits and increase value for the customer. Sounds easy. But what is the true value of branding initiatives (i.e., your ROI), and why invest time and money this seemingly non-revenue-generating activity? In truth, there are many rational reasons, including:

Market Differentiation (competitive advantage)

Customer buying preference (retain a positive impression)

Supports the highest possible tolerance to price (perceived value)

Increased cross-sales opportunities (better profit margins)

Better awareness and recognition (leadership in the market)

Investor confidence (plus employees and external alliances), etc.

Without question, successful branding initiatives can have immense payback and add genuine value to your company, whether new or well-established. However, your brand’s success depends on an implementation strategy comprising four essential must’ principals. It must be a genuine reflection on your core strengths-values-management commitments and align with your customers’ values.

Your brand must also identify a unique position that clearly differentiates you from competitors. It must carry through every aspect of an organization, meaning you must articulate your brand identity into a series of actions, beliefs and tools. Finally, and perhaps most important, it must be consistent over time.

In every brand development process, we employ four distinct elements, each weighted equally. First, the Value Proposition; it defines the uniqueness you provide to customers. Brand Character Definition and Expression follows; the character of your brand must make sense to your most important customers (While your logo is part of your branding, other important elements include corporate identity, company boilerplate, and collateral materials such as brochures, ad templates, website identity, etc.) Next, Positioning Statements must express your place in the market to help suppliers, investors, customers and competitors understand your intent; these concepts often form a mission statement or a byline tagged to your company logo. And lastly, Key Messages must consistently communicate your chosen information; these must promote the brand intent and be consistently employed by the entire team.

Looking further, brand launch must comprise a continuous monitoring process to measure value over time to ensure maximum impact and benefit is being derived. This stage may also include press releases, promotional programs, presentation and memorable methods of reaching the marketplace.

It’s accurate to conclude that your brand gives your company identity, character, presence in the market and, yes, even respect. There is substantial evidence that this structured process works, in both the short and long view. A brand grows successfully by leaving a lasting mental picture a positive mark upon everyone inside and outside your company. A true value picture like none other. As Rodney blurted out on stage at Dangerfields’ that night years ago,” Why am I sweating, I’ve got the job it’s my Club”.

Look after your club’; the benefits of a professionally developed and well managed brand could astound you.

1.1 Do I need a brand?

Every business has already got a brand, even if it doesn’t treat it as one. Your customers (and potential customers) already have a perception of what your business means to them. Building a brand just means communicating your message to them more effectively so they immediately associate your business with their requirements. Brands can help increase turnover by encouraging customer loyalty and are particularly useful if you are in a fast-moving sector. If your business’s environment changes rapidly, a brand provides reassurance to customers and encourages their loyalty.

If you operate in a crowded marketplace a brand can help you stand out. For example,

there are many kinds of adhesive tape, but there is only one Sellotape. If you have no other points of difference and when customers are confronted with a wide choice of comparable suppliers, they will always choose the brand they feel will suit them best. Your suitability for a customer is portrayed through your brand.

Moreover, if you want to add value to your business a successful brand can make businesses more attractive to potential buyers or franchisees.

1.2 Branding a Start up

For start-up and small businesses, branding often takes a backseat to all of the other considerations – such as funding and product development. This is unfortunate, for a company’s brand can be vital to its success. Dollar for dollar, it is as important and needed as any other start-up activity.

Recently, a software management company, temporarily named TallyUp, invested in a branding assignment. Its flagship product, a software suite that tracks and runs bonus incentive plans, needed a clear identity and platform to appeal to its target audience – primarily financial executives. The name TallyUp, while somewhat descriptive, didn’t capture the appropriate and required level of sophistication to attract the desired clientele. TallyUp retained a branding consulting company; they recommended the name Callidus, which is Latin for expert and skillful to effectively and in an instant communicate their position. While both names communicate a similar concept, the new one works on a completely different level. Callidus better suits the ideal position of the company.

Serial entrepreneurs have a great deal of wisdom to share about branding and positioning. You can gather additional useful advice on the challenge of brand development from someone like Thomas Burns, whose story is covered in our article, Building a Credible Brand for Your Small Business.

If you’re concerned about the cost of brand development, take heart. While it’s easy to spend a lot to create a brand, you don’t have to. Read our article, How Much Does a Brand Cost? to understand the price range of brand development.

1.3 Creating a Brand

Once you have worked out your core competencies, brand values, perceived quality and brand stretch, you can communicate them to your customers. Build the message into everything your customer or potential customer sees and hears before they have any direct contact with your business. Make sure your company literature reflects your brand values. If necessary, redesign your logo and company stationery so it provides an immediate visual link to your brand values. (Kenneth A. Fox,Nov-Dec 2002)

For example, if speed is a brand value, add an indication of movement into your company’s designs.Reconsider any advertising you may do. Is it in places that reflect your brand values?

Does the copy reflect your brand values?

Make sure your staff understand the brand values and believe in them. Your staff’s attitude and behaviour will influence the success of your brand more than any promotional activity. Remember that if you make strong customer service a brand value, the brand is damaged if one customer feels that whoever they are talking to doesn’t care about service. Review your systems and make sure every point of contact that a customer or potential customer has reflects your brand values. For example, if being friendly is one of your brand values, make sure anyone who answers the telephone or has direct contact with customers is friendly. (Kenneth A. Fox,Nov-Dec 2002)

1.4 How Much Does a Brand Cost?

How much you can expect to pay for the creation of your brand is the $64,000 question. The answer is that the fee doesn’t have to be astronomical, but it can be depending on who you decide to do business with.

Creating a brand is often a classic case of getting what you pay for. Your cousin may create a name and commensurate logo (without applications like letterhead, signage and packaging) for $500, or you can pay an international identity and branding company $100,000. In theory, that $100,000 should by you higher quality images and plenty of targeted branding theory, but that isn’t always the case. (Kenneth A. Fox,Nov-Dec 2002)

Our recommendation is that emerging companies look for an in-between solution. Look for a company that is experienced in branding small or start-up businesses, and that understands your timing and budget constraints. Reputable firms charge anywhere from $25,000 to $40,000 for a name and logo. You should be thrilled with the product and get terrific results from a firm in this range. (Michael Long et al,June 2007)

Before choosing a branding, naming or identity company, scrutinize its portfolio to make sure their style matches your tastes. Also, don’t hesitate to ask for references-they should be proud to provide them. Call a couple of the references and find out whether they liked working with the firm.

Finally, remember that branding is a serious, long-term investment. If you’re going after or have received outside financing, it should be a line item in your budget. Building a brand is a core business activity, as important as leasing office space, recruiting the right people and developing your product or service. (Michael Long et al,June 2007)

1.5 Finding the Right Branding Company

Companies that create branding and identity are often difficult to distinguish from graphic design firms, but how they go about creating your brand may be much different. There are several important steps to select the right company to help you to brand your new business.

First, ask your contacts which companies they know that specialize in branding. Conduct Internet searches for “naming” and “corporate identity” and “branding.” Think extensively about what types of names and logos appeal to you. Research the firms that created the brands that you most admire. Be aware of the firms’ creative styles. Choose a company with

a track record for unique and original names, not one that has a history of creating coined names. However, don’t go with a highly creative firm if your constituency is very conservative and traditional. (Michael Long et al,June 2007)

Contact a handful of companies and take note of how quickly they get back to you. Do they seem motivated or preoccupied? Is the person who returns your call a partner or a sales representative? Meet with a few different companies and trust the chemistry. If it’s there you will know it; if it’s not, keep looking. Make sure that the person with whom you initially meet? usually a partner or owner – will do, or at least direct, the work. That way they will be personally motivated to produce results for you. (Michael Long et al,June 2007)

Ask each company about its process. How forthcoming are they? Are the representatives willing to talk about their procedures and the steps that they’ll take to create your brand? Make sure you talk about money; they may ask you if you have a projected budget for this project. It’s acceptable for them to ask, but it’s also okay for you to hear first how much it will cost, without disclosing your budget. How quickly do they get back to you with a written proposal? If you agree on Tuesday to work with them and you haven’t heard from them by the end of the week, this might not be a good sign. Again, be smart and go with your instincts.

2.0 Top Branding Mistakes

Branding, a commonly used term throughout the business world, essentially means to create an identifiable entity that makes a promise of value. It means that you have created a consciousness, an image, an awareness of your business. It is your company’s personality. Numerous businesses try, but many fail at creating a successful brand. For more on the definition of a brand, read What Is a Brand?

Here are 10 of the most common mistakes:

1. Not thinking analytically. Too many companies think of branding as marketing or as having a catch phrase or a logo. It is more than simply vying for attention. A brand warrants attention on a consistent basis, represents something that your audience wants but does not get from your competitors. For example, it could be providing the best customer service in your industry – not just through your tagline or logo – by actually providing the best customer service in your industry.

2. Not maintaining your brand. Too often, in a shaky economy, businesses are quick to change or alter their identity. Too much of this confuses your steady customers. For guidance, think of big brands – Nike, for instance, has used “Just Do It” as a logo for years. One rule of thumb is that when you have become tired of your logo, tagline, and branding efforts, that’s when they begin to sink in with customers.

3. Trying to appease everyone. You will never be able to brand yourself in such a way that everyone will like you. Typically the best you can do is to focus on the niche market for your product.

4. Not knowing who you really are. If you are not the fastest overnight delivery service in the world, do not profess to be. Too many business owners think that they are providing something that they don’t. Know your strengths and weaknesses through honest analyses of what you do best.

5. Not fully committing to branding. Often business owners let the marketing and advertising department handle such things as “branding,” while they work on sales and other important parts of the business. But sales and branding are tied together as integral aspects of your business. Many Fortune 500 companies are where they are today because smart branding made them household names.

6. Not sharing the joke. If only the people in your office get a joke, it is not going to play to a large audience. The same holds true for branding. If your campaign is created for you and not “them,” your brand will not succeed.

7. Not having a dedicated marketing plan. Many companies come up with ideas to market themselves and establish a brand identity but have neither the resources nor a plan as to how they will reach their audience. You must have a well-thought out marketing plan in place before your branding strategy will work. For help putting together a marketing plan, see How to Build a Sound Marketing Plan for Your Business.

8. Using too much jargon. Business-to-business-based companies are most guilty of piling on the jargon. From benchmark to strategic partnering to value added, jargon does not benefit branding. If anything, it muddles your message.

9. Trying too hard to be different. Being different for the sake of being different is not branding. Yes, you will be noticed, but not necessarily in a way that increases sales.

10. Not knowing when you have got them. Companies that have succeeded in branding need to know when to stop establishing their brand and when to maintain that which they have established. Monitor the results of your branding campaign. If your small business is a local household word, you can spend more time maintaining your professional image.

2.1 First Steps for developing a brand

Before you develop your brand identity, you have to assess your business, how it operates and the messages that you want to – and are able to – deliver consistently to your customers. You must be realistic right from the start. There are five key areas to consider.

1. Work out your business, product or service’s core competencies. These are what you achieve for your customer, not necessarily what you do. For example, a good wine shop’s core competence is selling wine that its customers enjoy – not just selling wine.

2. Assess who your existing and potential customers are and find out what they like and what they don’t. For example, if they are driven by competitive pricing, there is little point in you presenting yourself as a premium-price supplier of the same products offered by your competitors.

3. Find out how your customers and your employees feel about your business. Reliable? Caring? Cheap? Expensive? Luxurious? No-frills? Later in the process, these emotional responses (brand values) will form the basis of your brand message.

4. Define how favourably your business is viewed by customers and potential customers – this is your perceived quality. Do they trust your business, product or service? Do they know exactly what it does for them? What do they think of when your brand is mentioned to them? Low perceived quality will restrict or damage your business. High perceived quality gives you a platform to grow. (Stephen M. Wigley, et al,July 2005)

5. Consider how far you can develop your business with its current customer perception without moving away from your core competencies. The amount you can change your offer is your brand stretch. For example, a shop known for selling fresh sandwiches could also consider selling homemade cakes and biscuits without going outside its core competencies. But selling frozen ready meals too may stretch its brand too far. (Stephen M. Wigley, et al,July 2005)

2.2 Managing the Brand

A brand will not work instantly – it will develop strength over time as long as your business consistently communicates and delivers your brand values to customers. Keep all your staff involved in your brand and your business. As your staff will be responsible for delivering the brand, they all need to feel a part of it and believe in it. Discuss your brand values regularly with your staff so they are clear about them.(R.E. Rios et al,Jan 2009)

Encourage them to offer suggestions to improve your systems so the brand values can be more easily delivered. Monitor your customers’ response to the brand regularly and continually review how your brand values are communicated to them. Get regular feedback from friendly customers and find out if what your business is doing for them matches the expectation your brand creates. Ask dissatisfied customers or former customers too – you learn useful lessons about your brand through honest criticism. (R.E. Rios et al,Jan 2009)

Regularly review your products, services and systems to make sure they efficiently back up your brand message. For example, if freshness is one of your brand values, are there ways you can deliver the product even more quickly?

Once the brand is developed within your own business and your existing customers, you can use it to attract new customers. Use your core competencies to show the benefits of your business to potential customers. Show what your business can do for them, not just what you do. Make sure every communication with potential customers is also consistent with your brand values. Advertisements and sales literature to potential customers must be visually and emotionally consistent with what you provide to existing customers.

2.3 Extending the Brand

A successful brand can offer opportunities for a business to grow. However, if you are introducing new products or services, you must make sure they are consistent with your existing brand values.

Stretching a brand too far reduces its strength and can damage it. If you are introducing new products or services, consider carefully if they fit with your core competencies and brand values. If they do, brand them in the same way as your existing products and services so they benefit from your existing branding. If they don’t, you should consider branding them separately.

If your new products or services remain within your core competencies but not your brand values, you can consider a diffusion brand. A diffusion brand is a different message with its own identity tied to your existing brand. For example, an insurance company’s core competence is getting things put right after they go wrong. If it introduces a new service that repairs items rather than pays for their replacement, it should be a diffusion brand: the Fixit Service from XYZ Insurance.

Remember that any problems with a diffusion brand will also damage your main brand, so treat the diffusion brand with similar care. If your new products or services fit neither your core competencies nor your brand values, you must brand them separately.

2.4 How Long Will My Brand Last?

Your brand should last as long as you want it to. Barring unforeseen circumstances, such as the sale of your company, a change in leadership, or a major shift in your audience or product offering, your brand is the most important and permanent manifestation of your company and its values. It used to be conventional wisdom that your brand should last 20 years. In the information age, that seems like a long time – and it is. (Tim Ambler et al,July 1996)

Your brand might not last that long because your company might change into something else in months, not years. Still, you shouldn’t plan on changing your brand with any regularity. It takes discipline and vigilance to build and maintain a brand. You want it to work for you in the long haul. In time, it will assume a life of its own that transcends the company itself.

3.0 Conclusions

Having consider all the above mention results if a company wants to stand out in his field and make a distinction between themselves and their competitor there is no cast of shadow that they need a branding to explain an unusual line of business through which earn above average return other wise if they don’t have a dedicated marketing plan they have to lose the market.As you learned you must have a well-thought out marketing plan in place before your branding strategy will work. As a result we found that branding is one of the undeniable segments of our business.

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When Brands Hack Your Brain and Work As Placebos

February 24th, 2021

In the previous article we discussed how placebos are excellent problem solving tools. They are ideas that are planted in our minds. When these ideas stick, they trigger beliefs. And beliefs trigger change. In a sense they hack our brains.As instruments of change, placebos have an important role to play in medicine, marketing, product development, religion etc.

It doesn’t really matter what the facts are but belief in the potency of a weird tasting energy drink, military flags and uniforms, homeopathy, a swoosh sign or some female beauty exotic potion have led to creation of large companies, institutions and brands. These ideas or brands are long-lasting since they trigger a significant positive change in their consumers or followers.

Placebos, in the field of medicine, have helped alleviate chronic pain, depression, rheumatoid arthritis, high blood pressure, angina, asthma, ulcers,Parkinson’s disease and even cancer.Placebos in medical terms are ‘pharmacologically inert medications’.Medically speaking, placebos can be a pill or an injection.In a non-medical world the placebos could also be ideas or brands, a good-luck charm, a ritual, a perfume that we wear on a first date.

In this article we explore the thesis that powerful brands are not any abstract, obtuse constructs. Good brands are effective placebos. Brands work because placebos do. In this article we explore instances of how brands work as placebos. We also give a preview to how the brands harness the phenomenon of placebo effect to trigger a set of beliefs in their consumers.

The ‘Real Thing’ is not so real after all

For those who swear by their brand of cola (it’s unique taste, flavour etc.) it is pertinent to ask whether ‘the taste’ is really such a big deal. Do you actually ‘taste the thunder’ or ‘taste the feeling’? Or is it all in the mind, a placebo. The effect of a brand as a placebo was proven when Baba Shiv and team proved that a cola tastes very differently when the respondent knows that it is the ‘real thing’ (a Coke) versus the same cola being labeled as a generic brand. Subsequent researches by other researchers showed that if the image of Coke was shown the perceived impact of the taste was higher.

Are you having a ‘branded headache’?

Another study done on women respondents in the UK, regularly suffering from headaches by Daniel E. Moerman highlighted the impact of branding on efficacy of analgesic pills.Women respondents were given four options- a branded analgesic (of a widely advertised and known brand), generic analgesic, branded placebo, generic placebo. The branded analgesic was perceived to be more effective than the generic analgesic, similarly the branded placebo was more effective than generic placebo. The branding of the pill enhanced the perceived effectiveness of both the active and the inert drug. Thankfully, the active drug was perceived as more effective than the placebo inert drug. Thank God, for small mercies.

Is the money spent on expensive branded shoes worth it?

Similarly a study by Frank Germann answered the question whether you will golf better with a branded putter? In other words it poses a question that all of us want an answer to – whether all the money that we have spent in buying expensive shoes or sport gear is worth it. And the answer is ‘Mostly Yes’.

In the Germann study the participants were tasked to complete putts on a putting green using an identical quality of putter. Half of the golfers were told that they were using a Nike putter, and the other half were not told the brand name of the putter. On an average participants who thought they were using the Nike golf putter needed fewer putts to sink the golf ball.

In a similar type of experiment conducted in a very different arena (of a scholarly maths test as opposed to a sporty golf game) the results were very similar. The participants of the study were given the same quality of foam ear plugs during a maths test to improve concentration. One half was told that it was a 3M ear plug and another half didn’t know the brand. Akin to the golf experiment, the group wearing 3M ear plugs got more questions right.

Germann’s results indicate that strong performance brands can cause an effect akin to a placebo effect. The use of an iconic performance brand which performs a related task, boosts the confidence level of participants by providing greater self-esteem and lowering the performance anxiety of the participants. This leads to better performance outcomes.

Another interesting observation was that the impact of the performance brand as a placebo was strongest in novices. The efficacy of the placebo effect was inversely proportional to the skill level of participant. In other words, expert golfers or brilliant math students received little or no performance boost through usage of the performance brands. This explains the ‘Mostly Yes’ part of the answer. So unless you are a good mathematician or a brilliant golfer, the money spent on the performance brand was worth it, at least in part.While we are on this topic, an interesting trivia is that when Nike signed up Michael Jordan in the 80s, and named a shoe after him, they expected sales of 3 million US dollars in a year. They eventually ended up selling 100 million plus worth of “Air Jordans”.

Does a ‘Beauty Patch’ work?

Dove conducted an actual ‘placebo test’ called the beauty patch experiment wherein they claimed that the participants who took part in the experiment would enhance the perception of their own beauty after the use of the ‘beauty patch’. Participants reported a significant increase in their perception of their own beauty and was surprised to discover that the patch was a placebo. Dove was truthful in a sense that they told their participants that this patch would change ‘perceptions of beauty,’. The patch managed to change perceptions fairly effectively, as echoed by the participants themselves.

So there is overwhelming evidence that brands work like placebos by improving performance or changing perceptions. Brands as placebos give us a confidence boost, reduce our anxiety in doing tasks and help us perform better.

The role of brands as placebos in the urban jungle, rat race

While we are at it, let us discuss the need for brands as placebos in our fairly stressful life in a fast paced urban environment. Living in a dense city and a hyper-competitive environment is quite unnatural and very stressful for a human being (who until a couple of centuries ago was living in villages). As a result, we require a fair dose of self-esteem building,confidence-inducing placebos to help us navigate the urban jungle & the debilitating rat races. Brands thus play a crucial role, and act as placebos boosting our confidence, improving our performance, changing our perceptions and altering our beliefs.

Jonathan Haidt talks about self-placebbing, wherein we spend a considerable amount of time administering a placebo to ourselves. These placebos work as signaling mechanisms to ourselves and our peers. Many products that we use have a utility and an ulterior placebo function. At a utility level, a Ferrari is car which does the job of transporting you from A to B. In dense & congested cities, in terms of utility it is a rather average means of transport, where a two wheeler is generally faster. But at an ulterior placebo level, Ferrari serves as an excellent aphrodisiac, a huge confidence booster or a very effective signal to humiliate a business rival.So even though a Ferrari goes at twenty kilometers an hour in a bumper to bumper Mumbai traffic, as a confidence or self esteem boosting placebo, it rather outclasses a Honda Civic.

Is 10x priced wine, 10x more tasty?

Likewise, there are a lot of luxury brands that have a basic utility function, but deliver extremely well on the ulterior placebo function. Expensive suits, thousand dollar cigars, gadgets, obscenely priced single malts etc. are all products that deliver strong placebo effects to the rich & famous men. An expensive wine is not ten times more enjoyable than a good affordable one, but it does administer a huge confidence-inducing social status placebo.

The female beauty industry is not just about beauty

So while men splurge on their placebo toys, the women have perfected the usage & rituals of self-placebbing into a fine art form. They have patronized a huge industry that delivers powerful doses of placebos to womankind- the female beauty industry, which is bigger in size than the education industry. A lot is made of utility function of the industry i.e. of enhancing the beauty or ‘the sex-appeal’ of women. The fact of the matter is it takes very little to attract the attention of the opposite sex. You need basic grooming and a sexy outfit to attract attention of the opposite sex. It does not take a long and tiresome regimen of two hours to appeal to the opposite sex. The two hours of beauty regime is actually a process of administering a confidence placebo to oneself.

In India, marriages are great occasions to observe these self-placebbing rituals. In North India, one usually finds that marriage procession are generally delayed. One of the primary reasons for this is that the women on the groom’s side take ostensibly long to get decked up. And amongst the women folk the grannies, usually take the longest time and have to be literally begged to finish their beauty regimen. On occasions they need to be dragged out of beauty parlours so that the marriage procession can depart. One would imagine that the grannies would not be very keen in attracting the attention of grandpas that would show up at the event. But they have an acute need to give themselves a big confidence placebo. One of the grannies I know went for an expensive set of teeth transplant just so she could smile confidently in marriage pictures.

Placebos need to be slightly absurd to work and need to follow a certain set of rules to be perceived as effective. We discuss these rules in the forthcoming article. Suffice it is to say the cosmetics work well as a placebo because they follow some of the basic rules of an effective placebo.The cosmetics are insanely overpriced (and therefore assumed more effective) and very time consuming to administer(a lot of extra effort heightens the placebo effect).

In mature markets, the ulterior placebo attribute is critical to differentiate

Firms spend a lot of time innovating and crafting a differentiated product proposition focusing on the features and utility function of their products. However in mature markets where products and services are more or less similar, tapping into a belief system, and positioning the brand based on its ulterior placebo attribute may be a more potent way for the brand to gain traction. In fact to take this argument a bit further, building in product or packaging attributes or usage rituals into the product or service may heighten the placebo effect and therefore the perceived value.

Having said that, not every placebo works with everyone, and the efficacy of a placebo also differs based on various factors, which we shall cover in subsequent articles. For a brand to take a shot at being an effective placebo, the brand has to tell a story which latches onto the belief system of a subset of population. This subset must believe your story to be authentic for them to buy into the story of your brand. They must connect with the story at a deep, meaningful level and ‘perceive’ it to be true. This encourages trial for the brand. Recently, there has been a huge outrage in India concerning Hindustan Unilever’s brand Fair & Lovely, so much so that the brand has to re-name & position itself as Glow & Lovely. But there was a time, when a big subset of population brought into the insecurity linked with dark skin colour, and the brand delivered a steady dose of fairness linked confidence placebo to millions of women.

Obviously it goes without saying that a premium brand has to deliver well on the utility function, maybe marginally better than a lower priced variant. So an expensive bag has to be well stitched, well crafted. But for the brand to be truly perceived as premium it has to deliver a strong placebo effect. The brand has craft a unique story and possibly include some attributes that heighten the placebo effect. And thereafter, the brand has to deliver on the brand experience being consistent to the story told.

If the story connects to the core customer’s beliefs then the brand has a decent shot of delivering a strong placebo effect. These core customers then become your brand’s early adopters and evangelists. They narrate the brand story as their own, and convert other consumers. They help grow a small market into a large one.

So for example if you believe, as a consumer, that your brand of sneakers XYZ is cooler than competition ABC, and wearing XYZ makes you feel cooler, then for all purposes you perceive yourself to be cooler than your friends wearing ABC. And with the brand’s placebo effect at play, you get a significant boost to your confidence and self esteem. This emboldens you to give your cool avatar a shot, and helps you overcome any insecurities that you may have had. This acts like a self fulfilling prophesy, and one confident step leads to another. And lo & behold, you are the new cool person in town! Now that you have clearly brought into the story of XYZ it is time for you to validate the story you are telling yourself. One good way of doing that is to persuade your friends wearing ABC to switch to XYZ.

Communication strategy vital to accentuating the placebo effect

Besides the brand story, the communication or persuasion strategy also plays a key role in accentuating the placebo effect of brands. Cacioppo and Schumann conducted a study wherein they manipulated participants’ interest in an ad for the “Edge razor”. They informed the participants that the participants could select from brands of razors (high relevance to the ad) or brands of toothpaste (little relevance to the ad) as compensation for participating in the study. Subsequently they subjected the participants to a strong arguments ad (Edge blade gave twice as many close shaves than nearest competitor) or weak arguments ad ( Edge blade gave no more nicks or cuts than competition).Both these arguments were presented by a celebrity endorser or an ordinary citizen.

The study found more persuasion for strong than weak arguments when the razor advertisement was higher in personal relevance (razors as compensation) versus when lower in relevance (toothpaste as compensation). Besides there was a larger impact of the celebrity endorser when the ad was low as opposed to high in personal relevance.

To conclude, good brands work more effectively because of the placebo effect. Like all placebos, good brands are ideas that are planted in our minds. When these brand ideas stick, they trigger beliefs. Belief is a powerful drug. It is a drug that works best at the deepest levels of the human mind, affecting it both consciously and subconsciously. So it is not possible to fully understand how a placebo or a good brand works at a subconscious level.

Good brands are well positioned and packaged placebos. And like all good placebos they serve a real need, and solve a real problem. They are excellent problem solving tools. And like all placebos, they do so without incurring any significant side-effects. After all, when compared to more violent options, Ferrari is a relatively harmless way to humiliate a business rival.

Sarvajeet Chandra writes on issues that are usually brushed under the carpet, or are too everyday-ish for armchair strategists. He writes on making strategic plan robust, how to execute strategy well and other tactical issues for everyday business success.

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