Identity-Based Brand Management: Fundamentals―Strategy―Implementation―Controlling [2 ed.] 3658401885, 9783658401887

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Christoph Burmann Nicola-Maria Riley Tilo Halaszovich · Michael Schade Kristina Klein · Rico Piehler

Identity-Based Brand Management Fundamentals—Strategy— Implementation—Controlling Second Edition

Identity-Based Brand Management

Christoph Burmann · Nicola-Maria Riley · Tilo Halaszovich · Michael Schade · Kristina Klein · Rico Piehler

Identity-Based Brand Management Fundamentals—Strategy— Implementation—Controlling Second Edition

Christoph Burmann markstones Institute of Marketing Branding & Technology, University of Bremen Bremen, Germany

Nicola-Maria Riley markstones Institute of Marketing Branding & Technology, University of Bremen Bremen, Germany

Tilo Halaszovich Business & Economics, Jacobs University Bremen, Germany

Michael Schade markstones Institute of Marketing Branding & Technology, University of Bremen Bremen, Germany

Kristina Klein markstones Institute of Marketing Branding & Technology, University of Bremen Bremen, Germany

Rico Piehler Department of Marketing, Macquarie University, Sydney, NSW, Australia

ISBN 978-3-658-40188-7 ISBN 978-3-658-40189-4  (eBook) https://doi.org/10.1007/978-3-658-40189-4 Originally published under Burmann, C., Riley, N.-M., Halaszovich, T., Schade, M.; English Translation of the 4th original German edition published by Springer Fachmedien Wiesbaden, Wiesbaden, 2021 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2017, 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer Gabler imprint is published by the registered company Springer Fachmedien Wiesbaden GmbH, part of Springer Nature. The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany

Preface

We are pleased to present the completely revised 2nd edition of our textbook “IdentityBased Brand Management”. This textbook provides students and practitioners with an up-to-date, theoretically sound and easily understandable overview of the concept of identity-based brand management. In this second edition, we have revised the management process of identity-based brand management (i.e., brand positioning, internal brand management, selection of brand elements, brand control). Moreover, we have added a new chapter on identity-based brand management in specific contexts, such as the international context, the retail sector, social media and online brand platforms (electronic marketplaces). All chapters have been updated with new content, including the latest research findings and practical examples. This edition’s extensive revision would not have been possible without the support of various members of the markstones Institute of Marketing, Branding & Technology at the University of Bremen and the Department of Business & Economics at Jacobs University Bremen. We would especially like to thank David Brüninghaus, Ole Gardewin, Anna-Sophie Hollstein, Sonja Mattfeld, Franziska Frese, Gesa Marieke Schewe, Sophie Gerdemann and Paulina Krüger. We were fortunate to have the support of Ariana Brodsky and Martha Cruz in ensuring that this edition balances contextual accuracy with idiomatic fluency. The integration of practical examples would not have been possible without the support of numerous companies, to whom we would also like to express our gratitude. Finally, we would like to thank the team at Springer Gabler for their excellent cooperation. In particular, we would like to thank Birgit Borstelmann and Barbara Roscher. Due to the very positive feedback on the German (fourth edition in 2021) and English (first edition in 2017) language editions, we also published this textbook in Chinese language (second edition in 2017). The third Chinese language edition will be available soon with additional case studies from Chinese enterprises. In addition, the concept of identity-based brand management is explored in greater depth in almost 100 successfully completed doctoral theses at the University of Bremen and at the Leipzig Graduate

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School of Management (HHL). Almost all of them have been published in the Springer Gabler book series “Innovatives Markenmanagement” (in German and English). This book provides a set of electronic learning cards (so-called “flashcards”) to help readers test their knowledge. Readers may individualize their own learning environment via an app and add their own questions and answers. Access to the flashcards is provided via a code printed at the end of the first chapter of the book. We wish you many interesting new insights while reading and look forward to feedback from our readers. Bremen, Germany Bremen, Germany Bremen, Germany Bremen, Germany Bremen, Germany Sydney, Australia

Christoph Burmann Nicola-Maria Riley Tilo Halaszovich Michael Schade Kristina Klein Rico Piehler

Contents

1 Basics of Identity-Based Brand Management . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Current Challenges in Brand Management. . . . . . . . . . . . . . . . . . . . . . . . 1.2 The Emergence of Identity-Based Brand Management. . . . . . . . . . . . . . . 1.3 Identity-Based Brand Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 The Basic Concept of Identity-Based Brand Management. . . . . . . . . . . . 1.5 Comparison with Other Brand Management Approaches. . . . . . . . . . . . . 1.5.1 Approach by Kevin Lane Keller . . . . . . . . . . . . . . . . . . . . . . . . . 1.5.2 Approach by David A. Aaker. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5.3 Approach by Jean-Noël Kapferer . . . . . . . . . . . . . . . . . . . . . . . . 1.5.4 Approach by Leslie de Chernatony. . . . . . . . . . . . . . . . . . . . . . . 1.6 Current State of Identity Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.1 Social Science Identity Research. . . . . . . . . . . . . . . . . . . . . . . . . 1.6.1.1 Social Science Approaches. . . . . . . . . . . . . . . . . . . . . 1.6.1.2 Constitutional Features of Brand Identity. . . . . . . . . . 1.6.1.3 Groups as Identity Objects in the Process of Ascribing Identity. . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.2 Economic Identity Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.2.1 New Institutional Economics. . . . . . . . . . . . . . . . . . . 1.6.2.2 Corporate Culture Research. . . . . . . . . . . . . . . . . . . . 1.6.2.3 Corporate Identity Research. . . . . . . . . . . . . . . . . . . . 1.7 Conceptual Design of the Brand Identity. . . . . . . . . . . . . . . . . . . . . . . . . . 1.7.1 Brand Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7.2 Brand Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7.3 Brand Competence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7.4 Brand Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7.5 Brand Personality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7.6 Brand Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 Conceptual Design of Brand Image. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8.1 Purpose of Brand Image . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2 5 13 14 15 15 16 17 17 18 19 19 21 24 25 25 26 27 28 30 35 36 38 40 44 46 46

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1.8.2 1.8.3 1.8.4

Stimulus processing in the brain to create brand images. . . . . . . Storing Brand Images in Memory. . . . . . . . . . . . . . . . . . . . . . . . Neuroscientific Implications for Identity-Based Brand Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 Authenticity in Identity-Based Brand Management . . . . . . . . . . . . . . . . . 1.9.1 Relevance and Object of Brand Authenticity. . . . . . . . . . . . . . . . 1.9.2 Implications for Identity-Based Brand Management . . . . . . . . . 1.10 Management Process of Identity-Based Brand Management. . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Strategic Brand Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Situation and Identity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Brand Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1 Objectives of Internal Brand Management . . . . . . . . . . . . . . . . . 2.2.1.1 Brand Citizenship Behaviour as a Behavioural Internal Objective. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1.2 Brand Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1.3 Brand Understanding . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 Objectives of External Brand Management. . . . . . . . . . . . . . . . . 2.2.2.1 External Behavioural Objectives . . . . . . . . . . . . . . . . 2.2.2.2 Brand Attachment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2.3 Brand Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Brand Positioning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.1 Definition and Importance of Brand Positioning. . . . . . . . . . . . . 2.3.2 Process of Identity-Based Brand Positioning . . . . . . . . . . . . . . . 2.3.2.1 Determining Target Groups and Competitors. . . . . . . 2.3.2.2 Identifying Potential Benefit Dimensions Suitable for Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.2.3 Selection of Appropriate Benefit Dimensions . . . . . . 2.3.2.4 Formulation of the Brand Promise. . . . . . . . . . . . . . . 2.3.2.5 Communication of the Brand Promise. . . . . . . . . . . . 2.3.3 Brand Repositioning as a Distinct Form of Positioning . . . . . . . 2.4 Brand Architecture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.1 Classification and Definition of Brand Architecture. . . . . . . . . . 2.4.2 Hierarchisation of a Brand Portfolio. . . . . . . . . . . . . . . . . . . . . . 2.4.3 Strategic Design of Brand Architecture. . . . . . . . . . . . . . . . . . . . 2.4.3.1 Designing the Vertical Dimension of Brand Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.3.2 Designing the Horizontal Dimension of Brand Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 Brand Evolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48 49 51 53 53 55 56 58 69 70 71 72 72 74 77 79 79 79 81 85 85 87 89 89 91 93 94 96 100 100 102 103 103 110 111

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2.5.1 2.5.2

Classification and Definition of Brand Evolution. . . . . . . . . . . . Brand Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.2.1 Immediate Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . 2.5.2.2 Skimming. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.2.3 Focusing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.2.4 Brand Migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3 Brand Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.1 Line Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.2 Category Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.3 Geographical Expansion. . . . . . . . . . . . . . . . . . . . . . . 2.5.3.4 Brand Licensing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.5 Co-Branding Strategy. . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.6 Autarky Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 Brand Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.1 Tasks of Brand Budgeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.2 Budgeting Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111 113 114 115 115 116 118 121 122 125 125 127 129 130 130 133 134

3 Operational Brand Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Internal Operational Brand Management. . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.1 Moderating Influences on Brand Citizenship Behaviour. . . . . . . 3.1.1.1 Structure and Process Fit . . . . . . . . . . . . . . . . . . . . . . 3.1.1.2 Resource and Competence Fit . . . . . . . . . . . . . . . . . . 3.1.2 Tools for Influencing Brand Understanding, Brand Commitment, and Brand Citizenship Behaviour. . . . . . . . . . . . . 3.1.2.1 Internal Brand Communication . . . . . . . . . . . . . . . . . 3.1.2.2 External Brand Communication. . . . . . . . . . . . . . . . . 3.1.2.3 Brand-Oriented HR Management. . . . . . . . . . . . . . . . 3.1.2.4 Brand-Oriented Leadership . . . . . . . . . . . . . . . . . . . . 3.2 External Operational Brand Management. . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1 Selection of Brand Elements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1.1 Brand Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1.2 The Brand Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1.3 The Brand Logo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1.4 Brand Characters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1.5 Slogans and Jingles. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.2 Designing the Marketing Mix: Product and Program Policy . . . 3.2.2.1 Product Design and Packaging. . . . . . . . . . . . . . . . . . 3.2.2.2 Emotionalization through Brand Experiences . . . . . . 3.2.3 Designing the Marketing Mix: Pricing Policy. . . . . . . . . . . . . . . 3.2.4 Designing the Marketing Mix: Distribution Policy. . . . . . . . . . . 3.2.5 Designing the Marketing Mix: Communication Policy. . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

145 148 148 148 149 150 151 159 162 167 170 171 172 174 176 178 179 180 181 184 188 189 193 195

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4 Identity-Based Brand Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Internal and External Brand Performance Measurement. . . . . . . . . . . . . . 4.1.1 Conceptualisation of Internal and External Brand Strength . . . . 4.1.2 Selected Tools for Brand Performance Measurement. . . . . . . . . 4.2 Brand Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.1 Customer Equity vs. Brand Equity as Top Indicators of Brand Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.2 The Necessity of Brand Valuation and Criteria for Its Usefulness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.3 Balance Sheet Requirements for Brand Valuation. . . . . . . . . . . . 4.2.4 Brand Valuation Approaches. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.5 Identity-Based Brand Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

207 209 209 213 217

5 Special Identity-Based Brand Management Use Cases. . . . . . . . . . . . . . . . . . 5.1 International Identity-Based Brand Management. . . . . . . . . . . . . . . . . . . 5.1.1 Standardisation vs. Differentiation in International Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.2 Important Determinants of Consumer Behaviour Toward Brands in International Markets . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.2.1 National Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.2.2 Level of National Economic Development. . . . . . . . . 5.1.2.3 Sociodemographic Structure of Society. . . . . . . . . . . 5.1.2.4 Brand Origin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.3 Strategic and Operational International Brand Management . . . 5.1.3.1 Market Entry Timing . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.3.2 Brand Positioning in an International Context. . . . . . 5.1.3.3 International Brand Architecture . . . . . . . . . . . . . . . . 5.1.3.4 Internal Brand Management in an International Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Identity-Based Brand Management in Retail. . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Retail-Oriented Brand Management of Manufacturers. . . . . . . . 5.2.2 Identity-Based Management of Retail Brands. . . . . . . . . . . . . . . 5.2.3 Identity-Based Management of Private Label Brands. . . . . . . . . 5.3 Identity-Based Brand Management Online and on Social Media. . . . . . . 5.3.1 Challenges for Brand Management Posed by Digitalisation. . . . 5.3.2 Online and Social Media Communication Tools. . . . . . . . . . . . . 5.3.3 Brand Management on Social Media . . . . . . . . . . . . . . . . . . . . . 5.3.3.1 Differentiation Between Brand-Generated Content and User-Generated Content. . . . . . . . . . . . . . . . . . . . 5.3.3.2 Influencer Branding . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.3.3 Measuring Performance on Social Media. . . . . . . . . .

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5.4

Identity-Based Brand Management on Platforms. . . . . . . . . . . . . . . . . . . 5.4.1 Growing Significance of Platforms. . . . . . . . . . . . . . . . . . . . . . . 5.4.2 Success Factors in the Platform Economy. . . . . . . . . . . . . . . . . . 5.4.3 Risks of the Platform Economy. . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.4 Implications for Identity-Based Brand Management on Platforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311

1

Basics of Identity-Based Brand Management

Contents 1.1 1.2 1.3 1.4 1.5

1.6

1.7

1.8

Current Challenges in Brand Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Emergence of Identity-Based Brand Management. . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Identity-Based Brand Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 The Basic Concept of Identity-Based Brand Management. . . . . . . . . . . . . . . . . . . . . . . . 14 Comparison with Other Brand Management Approaches. . . . . . . . . . . . . . . . . . . . . . . . . 15 1.5.1 Approach by Kevin Lane Keller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.5.2 Approach by David A. Aaker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.5.3 Approach by Jean-Noël Kapferer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.5.4 Approach by Leslie de Chernatony. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Current State of Identity Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 1.6.1 Social Science Identity Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1.6.1.1 Social Science Approaches. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1.6.1.2 Constitutional Features of Brand Identity. . . . . . . . . . . . . . . . . . . . . . 21 1.6.1.3 Groups as Identity Objects in the Process of Ascribing Identity . . . . 24 1.6.2 Economic Identity Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 1.6.2.1 New Institutional Economics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 1.6.2.2 Corporate Culture Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 1.6.2.3 Corporate Identity Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Conceptual Design of the Brand Identity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 1.7.1 Brand Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 1.7.2 Brand Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 1.7.3 Brand Competence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 1.7.4 Brand Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 1.7.5 Brand Personality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 1.7.6 Brand Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Conceptual Design of Brand Image. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 1.8.1 Purpose of Brand Image. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 1.8.2 Stimulus processing in the brain to create brand images. . . . . . . . . . . . . . . . . . . 48

© The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 C. Burmann et al., Identity-Based Brand Management, https://doi.org/10.1007/978-3-658-40189-4_1

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1.8.3 Storing Brand Images in Memory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 1.8.4 Neuroscientific Implications for Identity-Based Brand Management. . . . . . . . . 51 1.9 Authenticity in Identity-Based Brand Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 1.9.1 Relevance and Object of Brand Authenticity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 1.9.2 Implications for Identity-Based Brand Management. . . . . . . . . . . . . . . . . . . . . . 55 1.10 Management Process of Identity-Based Brand Management. . . . . . . . . . . . . . . . . . . . . . 56 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

1.1 Current Challenges in Brand Management In the realm of corporate management, brand management has been a key topic for many years. In 2019, almost 79,000 new brands were registered with the German Patent Office, and as of publication, a total of around 830,000 brands are currently registered in Germany (Deutsches Patent- und Markenamt, 2020, p. 23 ff.). These figures attest to the weighty importance afforded to brands by both employees and consumers, and their subsequent high economic value. In 2021 for example, the Google brand had an estimated value of 323.6 billion US$ (cf. Kantar, 2021). The importance of brands is a consequence of their numerous important functions for consumers, employees, and other stakeholders. In terms of transaction costs, brands can reduce search and information costs. A brand can thus be “cheaper” for the consumer than a brandless product because the sum of the price and transaction costs is relevant to buying behavior (Kaas, 1990, p. 543). From a behavioural point of view, brands provide orientation. Brands increase market transparency, enabling consumers to more quickly and easily identify the offers that suit them best. However, because the number of interchangeable brands is drastically increasing in many markets today (brand inflation)—especially in the context of e-commerce— the orientating function of brands is lost. As a result, it is increasingly difficult for brands to highlight the features that distinguish them from the mass of competing offers, and thus achieve differentiation (cf. Bohmann, 2011; Enke et al., 2014). For example, Fig. 1.1 shows the positions of insurance companies in Germany using multidimensional scaling. This figure is based on a 2009 representative survey of 6666 people in Germany who had just taken out an insurance policy. From the point of view of the German consumer, almost all the listed insurance companies belong to an undifferentiated group of interchangeable brands (see the red area in Fig. 1.1). Only four companies, split across two quadrants stand out (positively and negatively) as brands with very low prices or as “expensive and impersonal corporate group brands.” This analysis shows that, from the consumer viewpoint, there is a lack of differentiation between many insurance brands. This leads to strong growth in the use of price comparison portals and the predominance of purchasing decisions based solely on price. Consequently, the only provider that prevails is the one that still makes a profit amidst perpetually falling prices. Preventing interchangeability is therefore the first important challenge in brand management.

1.1  Current Challenges in Brand Management

3

“Price” Brand E

Brand F

Brand G

Brand H

Brand J

“Service quality”

Brand I

Brand K Brand L Brand M

Brand P

Brand N

Brand C

Brand Q Brand D

Brand S Brand R

Brand A Brand B

“Impersonal, distanced corporate group brands“

Fig. 1.1   Weak differentiation of corporate brands in the German insurance market

A second important challenge for manufacturer brands is the market penetration of retailers’ private label brands. Previously, brands were manufactured exclusively by specialized producers, who were responsible for bringing the products to the sales market via wholesalers and retailers. Today, however, retailers often enter into direct competition with manufacturer brands by developing their own brands—often at very aggressive prices—and having them produced by third parties. The less differentiation manufacturer brands achieve, the more they come under pressure from retailers’ own brands. According to a study of 1000 consumers surveyed in Germany, 73% perceived the products sold under private labels to be at least equal in quality to those made by manufacturer brands (cf. Ipsos/Lebensmittelzeitung, 2018, p. 7). The third and most important challenge for brand management is digitalization (cf. Meffert & Meffert, 2017, p. 17 ff.). Competition between brands is intensifying tremendously. Many new competitors are becoming visible to consumers on their smartphones via the internet and both price comparison portals and electronic marketplaces (i.e., platforms) are massively increasing market transparency. At the same time, consumers are demanding more and more as they expect an attractive presence of brands through many

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sales channels at the same time (e.g., in physical stores, in brand-owned internet shops, at online retailers, and in online marketplaces, such as Amazon and Alibaba). Digitalization has radically increased the amount of information consumers are presented with, both in the form of commercial communication from brands as well as private communication between people. For example, every minute, worldwide, more than 400 h of new video content is uploaded to YouTube, more than 63,000 new photos are posted on Instagram, and there are more than 563,000 new tweets (cf. Brandwatch, 2020; Internet Live Stats, 2021). 14- to 29-year-olds in Germany spend an average of 388 min a day on the internet (total population: 204 min; cf. ARD/ZDF, 2020), and 42% of Germany’s internet usage takes place on smartphones (cf. SZ-Medienhaus, 2019). As a result of this explosive growth in information consumption and because internet use—especially on smartphones—is extraordinarily image-dominated, digitalization is changing information processing in humans in favour of image-dominated processing of information with strong emotional influences. As early as 1995, the marketing researcher Kroeber-Riel referred to images as “quick shots to the brain.” When presented with large amounts of information, humans use a biological mechanism to quickly evaluate, select, and store information: emotional information processing. This is because emotions can be processed much more efficiently and effectively in the brain than rational information (Bielefeld, 2012; Roth, 2003). With all this in mind, brand management must adapt to these developments in information consumption. Digitalization and the near-constant use of smartphones and other electronic devices everywhere and by nearly everyone has led not only to a wide range of new opportunities within brand management, (Sects. 5.3 and 5.4) but also to new possibilities for major brands to monitor and manipulate consumer behaviour (cf. Zuboff, 2018). Large digital corporations in particular—such as Amazon, Alphabet/Google, Meta/Facebook, Apple, Alibaba, and Tencent—now possess an unimaginable amount of highly detailed information about the behaviour and preferences of billions of consumers. Many people unquestioningly permit their smartphones, laptops, smart speakers, in-car navigation devices and data glasses to record their entire daily routine and simultaneously make their individual movement and usage profiles available to companies free of charge. This has led to a concentration of power among a tiny number of large digital corporations, who, in turn, restrict the branding opportunities of many other brands (e.g., by manipulating online advertising), imitate successful brands, and hinder competition (Nadler & Cicilline, 2020). At the same time, many large digital corporations and other large companies consistently avoid paying taxes and thus do not participate in the financing of the public infrastructure that they depend on and profit enormously from. This parasitic behaviour threatens the long-term economic existence not only of many smaller brands, but also of states and municipalities (Zand, 2021). For this reason, the U.S. government has proposed to introduce a minimum corporate tax rate of 21% worldwide. The U.S. has also initiated measures to prevent anti-competitive behaviour by Amazon and other large digital corporations at the legal level (cf. e.g., Nadler & Cicilline, 2020).

1.1  Current Challenges in Brand Management

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Digitalization has also increased the importance of internal brand management. Because many brands now represent themselves on numerous social media channels, digitalization has opened a multitude of new brand touchpoints, at which employees can interact with consumers and represent their brand (cf. Piehler et al., 2015, p. 52 f.). Due to this development, it is important for companies to manage their brand internally in order to expand knowledge among their employees about the brand, to create an emotional bond between employees and the brand, and to ensure work behaviour that strengthens the brand. In addition, because demographic change is generating intense competition to attract highly qualified specialists and managers, many companies now use modern employer branding as a successful tool for attracting new employees (cf. Piehler & Burmann, 2013, p. 224; Böttger, 2012, p. 344 ff.). Given these increasingly tough market conditions, brands are now more important than ever (see Swaminathan et al., 2020, p. 32). Brands can only be successful if their brand identity conveys a distinctive mindset both internally among employees and externally to consumers. A strong sense of identity creates meaning while enriching the brand and setting it apart from the competition, especially in terms of its functional performance (cf. Burmann & Barth, 2020). Identity-based brand management is particularly well suited as a strategy to empower companies to master the challenges outlined above. As identity-based brand management differs considerably from older brand management approaches, its development will be briefly outlined below.

1.2 The Emergence of Identity-Based Brand Management With the emergence of classic branded goods at the beginning of the twentieth century (cf. Domizlaff, 1939), the concept of the “brand” changed. Since then, there have been a variety of different ways of conceptualising “brand” and multiple approaches to brand management. Greatly simplified, researchers can identify five phases of brand development. Tab. 1.1 lists the implications of these five phases for brand management. In the mid-nineteenth century, industrialization and the mass production of many previously handcrafted consumer goods led to a loss of personal business relationships between manufacturing companies and the end consumer (cf. Leitherer, 2001). Because production technologies were relatively immature in many sectors, the quality of industrial finished products could fluctuate substantially. In addition, the production and coordination know-how of manufacturing companies was still rudimentary, limiting their potential size. The structure of available goods thus remained strongly regional, and unbranded products dominated in almost all product groups. In the early twentieth century, price competition grew on the retail side as department stores, chains and co-operatives emerged as innovative business types (cf. Berekoven, 1978). During this time, the branding of goods was primarily used as a symbol of ownership, providing proof of origin (cf. Linxweiler, 2001). The understanding of “brand” was shaped by the literal process of labelling or branding. Brand management as a business management concept

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6 Table 1.1  Five phases of brand management Period

Mid-nineteenth to early twentieth century

Environment

• Industrialization • Economic and mass growth, production demand pull • Variations in • Numerous quality technological • Anonymous goods innovations (staple goods) • Seller’s predominant markets

Retailer– manufacturer relationships

• Personal customer • Warehouse • Introduction relationships function of of private label between manufac- retailers brands turers and retailers • Manufacturer • Popularization • Strong position of brands’ of marketing retailers monopoly • Asymmetrical of public brand opinion know-how • Productivity in favour of leaps in manufacturers retailing • Strong expansion of classic manufacturer brands

Brand • Brand as sign of understanding ownership and proof of origin

Early twentieth Mid-60s to century to mid-70s mid-60s • Recession/1st oil crisis • Abolition of fixed prices (1967) • Buyer’s markets

Mid-70s to end 2000s of the 90s • Saturated • Information markets society, brand • High speed of management imitation on the internet • Information • Crowded overload positioning in • Quality as the minds of dealbreaker consumers criterion • Shift of responsibility from individual brands to (corporate) umbrella brands • Growing commercial power and escalating conflicts • Introduction of generic brands • Increasing brand know-how of retailers

• Information monopoly of retailers • Private labels increasingly displacing manufacturer brands • Intensification of direct manufacturer-customer channel

• Focus on • Production and • Generation of • Bundle of goods distribution demand benefits with • Brand as a method • Subjective sustainable catalogue of • Marketing form brand differentiation characteristics identification • Brand identity as brand’s self-image • Brand image as external image of the brand

(continued)

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1.2  The Emergence of Identity-Based Brand Management Table 1.1   (continued) Period

Mid-nineteenth to early twentieth century

“Modern” brand management

Early twentieth Mid-60s to century to mid-70s mid-60s

Mid-70s to end 2000s of the 90s

• Instrumental approach, brand engineering

• Imageoriented approach • Technocratic, strategy-oriented approach

• Functionoriented approach

• Identitybased brand management

Fig. 1.2   Beiersdorf’s first dental care brand Pebeco. (Beiersdorf AG, 2017, p. 9)

Toothpaste, 1905

Toothpowder, 1921

was non-existent. Nevertheless, Pebeco, Beiersdorf managed to successfully establish a brand for dental care products (cf. Fig. 1.2). The development and rapid propagation of the concept of the classic branded product, shaped primarily by Domizlaff, must be understood against the background of these mid-nineteenth century conditions (cf. Domizlaff, 1939). The concept of the classic branded product provided manufacturers of consumer goods an opportunity to re-establish indirect contact with consumers and significantly increase their influence over their product sales. Manufacturers were able to achieve these objectives by offering high— and, above all, consistent—quality products in uniform packaging and marketing them using classic advertising techniques on a nationwide scale. For the most part, the numerous technological innovations that had developed during industrialization and the advent of mass production provided the cornerstone for successful brand communication and branding. Strong economic growth and the prevalence of a seller’s market across most product lines facilitated the rapid spread of the concept of the classic branded product. Under these market conditions, the promise of reliable, high-quality products, a heightened awareness of products due to advertising, and unprecedented convenience (price parity and availability at every major retailer) were the key factors that led to a brand’s market success.

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The concept of the classic branded product was initially met with approval among retailers, as fixed prices and authorized distribution prevented cut-throat competition. Furthermore, significant progress in retail productivity followed the introduction of self-service and the transfer of design, packaging, quality assurance and information functions to manufacturers (cf. Meffert & Burmann, 1991). This development resulted in the expansion of manufacturing companies through mass production and landed branded product manufacturers in positions of power. Soon, retailers complained they had become nothing more than tools and accused manufacturers of holding the “branded products’ monopoly of public opinion” (cf. Berekoven, 1978). During this second stage of development brands were described using terms from a catalogue of characteristics, and only existed in the realm of tangible consumer goods. Services, investment goods and primary products were not brandable according to the understanding of the day (cf. Mellerowicz, 1963). Consequently, in everyday business life, in scientific circles and even in legislation, brand was only discussed in the context of branded products and branded merchandise. Mellerowicz, for example, defines brands as “goods manufactured for private demand, available across a larger sales area with an origin-specific distinguishing attribute (brand) in uniform packaging, always containing the same quantity and exhibiting consistent or improved quality; due to these characteristics as well as the advertising carried out on their behalf, brands acquire the recognition of the business community (consumers, retailers, and manufacturers)” (Mellerowicz, 1963, p. 39). If any one of these requirements was not fulfilled by a product, under a strict interpretation of this attribute-oriented understanding of brand, the product did not constitute a branded good. An instrumental understanding of brand prevailed in brand management at the time (cf. Findeisen, 1925, p. 32; Goldack, 1948, p. 22). This instrumental approach found its expression in the concept of brand technique, which was primarily concerned with finding and designing names, devising forms of packaging, and using classic advertising. Fixed rules, when followed—as if akin to the laws of nature—would allow a brand to succeed almost automatically, independent of the situation of the company and the market (cf. Domizlaff, 1951, p. 27 f.). Domizlaff thus formulated “22 basic laws of natural branding” in 1939. These basic laws addressed the fundamental attributes of brands and described tools necessary for the development and maintenance of a brand. The third development phase, beginning around the middle of the 1960s, was characterized by recessionary tendencies and the first oil crisis. The seller’s market became a buyer’s market in numerous industries and the skyrocketing supply of goods for everyday consumption as well as durable consumer goods initially met many basic needs. Sales developed into a key area and increasingly became the focus of attention (cf. Meffert, 1994), in part this was because the most reliable factor in sales until that point—the stable unit price—became a seemingly incalculable variable when the statutory price-fixing of resale items was abolished in Germany in 1967. As a result of this change, manufacturers of branded products increasingly engaged in a methodical design of the sales segment. Within German companies, this led to the popularization of

1.2  The Emergence of Identity-Based Brand Management

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marketing know-how developed in the USA and thus to an asymmetrical distribution of knowledge between manufacturers and retailers. Manufacturers used this gap in marketing know-how as a tool to improve the image of their branded products with respect to quality, thus consolidating their market position. The retailers attempted to counteract the manufacturers’ drive to stand out from the rest with a “me-too” strategy: introducing retail brands (cf. Schenk, 1994). These replicas of successful manufacturer brands were founded on the era’s understanding of brand, primarily emphasizing consistent quality and packaging as well as availability across a large sales area. However, focusing solely on these fundamental principles, retailers were unable to effectively establish strong brands. Retail brands were only able to maintain their position on the market by offering significantly lower prices. During this stage, the understanding of brand was related to product range and was linked to the production and marketing methods of the time (cf. Dichtl, 1978). The branded product was defined as a “closed marketing system” (Hansen, 1970, p. 64), and its purpose was to make direct contact with the consumer and attain the highest possible degree of proximity to the end customer. Experts understood the branded product to be a specific form of marketing, not just a bundle of characteristics (cf. Alewell, 1974). At this time, a function-oriented approach emerged in brand management. Replacing the instrumental approach, this new function-oriented approach drastically increased the scope of brand management and allowed it to become a much wider field. While proponents of the instrumental approach did not include market research, product development, or pricing and distribution policies within the remit of brand management (cf. Hartmann, 1966, p. 13 f.), these areas were integrated into function-orientated brand management (cf. Hansen, 1970, p. 30 f.). This new method focused on designing operational functions to ensure the success of a branded good. In contrast, proponents of the instrumental approach were exclusively interested in identifying the sales instruments that would turn anonymous goods into branded products. Within the function-oriented approach, marketing functions boosted the brand’s competitive advantage. Sales played a prominent role in this approach (cf. Hansen, 1970, p. 41 f.). In contrast, the instrumental approach focused on literal branding and packaging design. In the fourth stage of development, around the mid-1970s, overall economic conditions were characterized by a growing tendency toward saturation in many markets, rapid imitation of technological innovations, more critical and price-sensitive consumers, and increasing “information overload” due to brand inflation (cf. Kroeber-Riel, 1988). Consequently, brand manufacturers tried to develop ways to reach target groups that moved beyond classical advertising (sponsoring, event marketing, and so on). Whereas the core of a brand could previously have consisted of technological innovations alone, the accelerating speed of imitation meant that by this time, innovation could often only be used for brand profiling in the short term. Consistent high quality as a characteristic of branded goods also began to wane in importance.

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A higher concentration of options in the retail sector turned intermediaries into “gatekeepers,” who controlled the path of a branded product from the manufacturer to the consumer. At the same time, retailers responded to consumers’ increased price consciousness by introducing generic brands (cf. Meffert & Bruhn, 1984). Scarce shelf space led retailers to demand listing fees and hidden discounts in exchange for the inclusion of new brands in their product range offerings, exacerbating the conflict between retailers and manufacturers. During this stage of development, demand-related, subjective perception characterized the understanding of brands. According to this approach, products and services were identified as branded products only if consumers perceived them as such (cf. Berekoven, 1978). This subjective understanding of brands was also reflected in brand management. During this phase, the image-oriented approach to brand management spread (cf. Murphy, 1987, p. 1 f.; Aaker & Keller, 1990, p. 27 f.). This approach had its basis in the growing mass of research on brand image (cf. Trommsdorff, 1992, p. 458 f.; Keller, 1993). Experts used these studies to develop recommendations for action steps that could be taken to influence the particular way in which consumers perceived brand image. Whilst the function-oriented approach understood brand management as purely an aspect of marketing, the image-oriented approach put marketing and brand management on equal footing. At its root, the image-oriented perspective was founded on the belief that all marketing parameters are essential to brand image. Though this approach to brand management was fundamentally much wider in scope than previous conceptions, its focus on image led to an overemphasis on methodical aspects of the task (for example, operationalization of brand image) and the neglect to integrate all the measures necessary for successful brand management. As the image-oriented approach was evolving, a technocratic-strategic approach to brand management developed in parallel (cf. Meffert, 1988, pp. 115 f. and 289 f.; Brandmeyer & Schulz, 1989; Franzen et al., 1994; Haedrich et al., 2003). The technocratic-strategic approach tried to eliminate the deficits of the image-oriented approach, integrating a greater breadth of brand management measures. Instead of fixating on buying behaviour, proponents of this approach concentrated on actions that could be taken at the corporate management level. The focus was on planning, controlling, and coordinating all brand management measures directed at the sales market. The profound preoccupation with economic brand equity that began in the 1980s led to the further popularization of the technocratic-strategic approach. Its highly formal explanations, however, led to a mechanistic conception of the goals and tasks of brand management. By the fifth phase of development, the technological and objective qualities of products had become increasingly consistent inside markets. This was primarily a consequence of the increasing modularization of product concepts (in computers, smartphones, and automobiles, for example) as well as the associated tendency toward standardization. An increase in outsourcing also led to many brands’ services exhibiting the same level of quality—direct competitors’ suppliers and components are now often identical.

1.2  The Emergence of Identity-Based Brand Management

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As competition has become more global, the dissemination of new technological know-how has only continued to accelerate. This development has also contributed to technological and objective product characteristics becoming increasingly consistent across competing brands. This homogenization of quality has extended beyond consumer goods into services and capital goods. As a result, service providers, capital goods manufacturers, and suppliers also are increasingly resorting to developing their own brands as a means of differentiating their services. The market penetration of corporate brands should also be viewed in light of this. Firstly, compared to other brand strategies, the use of corporate brands is usually more advantageous for service companies (cf. Meffert et al., 2015, p. 301). Secondly, focusing on corporate brands makes it easier for brands to differentiate and position themselves in the jungle of brand inflation. Consumer demand is also a driver of the move toward corporate brands, as consumers’ broader view of company responsibility has resulted in a shift in responsibility away from individual product brands and towards whole corporations. Another important circumstance has been the rapid development of information and communication technologies. The internet has led to a significant increase in market transparency, enabling consumers to easily gain a comprehensive overview of the market before making a purchasing decision. Consumers can thus compare prices online and procure services from providers that, until recently, were too far away to be part of the consumer’s evoked set. The changes in the manufacturer–retailer relationship have led to retailers gaining tremendous influence and know-how. Profiting from customers’ trust in large retail chains and the margin benefits of their private-label brands, retailers have been able to further expand their brand catalogue. Manufacturers’ ample production capacity has also supported this development. The ubiquity of barcode scanners and the resulting collection of customer data has given retailers a monopoly on information. Retailers have been attempting to use this advantage to strengthen their own brands, expanding their brand know-how by poaching brand specialists from manufacturers. Category management has arisen out of this development. With their growing wealth of brand know-how, retailers have been increasingly taking over functions previously fulfilled by manufacturers (cf. Meffert & Burmann, 1991). Perpetually increasing retail concentration is another factor which strengthens the position of retailers to the detriment of manufacturers. In the light of this, only the strongest manufacturer brands in a category (A-brands) are likely to have a realistic chance of holding a place in the retail market of the future (cf. Steffenhagen, 2008). These changes have altered our understanding of brands. Today, the socio-psychological aspects of a brand carry much more weight. Whereas the technocratic, strategy-oriented approach was paired with a formalized conception of brand management, the identity-based approach to brand management emphasises subjective influences and emotions. The foundation of identity-based brand management consists of internal and external perspectives interlinked to build a competitive advantage.

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In business administration, there are three distinct theoretical explanations for the emergence of competitive advantage: the market-based view, the resource-based view, and the competence-based view (cf. Meffert et al., 2019, p. 35 ff.). In the first explanatory approach, the emergence of competitive advantage is explained by companies’ market orientation. A company is understood to be market-oriented when all management decisions and activities are oriented toward the sales market (Narver & Slater, 1990). Market orientation is reflected in the market-based view (MBV) (cf. Teece et al., 1997, p. 510). The MBV attempts to explain competitive advantage exclusively through a view of the market from the outside in. The MBV thus assumes complete resource homogeneity among all companies operating in a market (cf. Zahn et al., 2000, p. 49). Against this backdrop, the resource-based view (RBV) emerged. (cf. Freiling, 2009, p. 5). The RBV abandons the understanding of companies as “black boxes,” criticizing the dominance of external, market-side factors in the market-based view and assuming that a company’s internal strengths and weaknesses determine its level of success. The RBV is criticized for its static perspective however, as questions regarding the genesis and evolution of a company’s unique resource endowment remain unanswered (cf. Rasche & Wolfrum, 1994, p. 512). Emerging from the resource-based view, the competence-based view (CBV) is the most modern approach that attempts to explain competitive advantage. In contrast to the RBV, the CBV is primarily concerned with skills, which, unlike resources, can only be conceived of in terms of activities and captured dynamically within the context of processes. Competency is always nonmaterial and emanates from experiential knowledge (cf. Freiling et al., 2008, p. 1147 ff.). This knowledge is codified over time as it becomes embedded in rules and processes, making it accessible to employees within the company (cf. Burmann, 2002, p. 184 ff.). These three theoretical approaches are not contradictory. Neither the MBV, the RBV, nor the CBV alone can offer a comprehensive explanation for market success. Competence management within a company always draws on internal resources as well as external market information to develop skills that create value. Without taking this broader picture into account, companies run the risk of building and improving competence in areas which are irrelevant to the buying behaviour of customers. Just as the synthesis of the MBV, RBV and CBV creates a coherent understanding of market success, the newest orientation in the realm of brand management also combines several pre-existing techniques. Whereas brand management was previously founded exclusively on the outside-in perspective (demand orientation), today the identity-based approach extends this understanding to include an inside-out perspective (employee orientation). Ultimately, brand management can only be successful in the long term if both perspectives are considered.

1.3  Identity-Based Brand Definition

13

1.3 Identity-Based Brand Definition  The concept of “brand” as defined within identity-based brand management can be traced back to the work of Meffert (1974), Meffert and Burmann (1996) and Keller (1993), where a brand is conceived as “a bundle of functional and non-functional benefits which, from the target groups’ point of view, differentiate the brand from competing offers in a sustainable way.” This definition integrates the perspectives stemming from internal management and external brand perception. The internal management perspective refers to the intended benefits that external target groups are meant to associate with the brand to produce a particular demand. The intended benefit bundle conceived by internal management is communicated to external target groups through brand touchpoints (cf. Fig. 1.3). The chronological sequence of all brand touchpoints experienced by a consumer during the purchasing process (consisting of the pre-purchase, purchase, and post-purchase phases) constitutes the customer journey (cf. Dierks, 2017). The perception and evaluation of a brand by external target groups is analysed within the framework of the effect perspective. Ideally, the bundle of benefits as perceived by the external consumer will match the bundle that internal management intends to convey (Sect. 1.8.1). To influence the behaviour of target groups, a brand’s benefit bundle must satisfy the target groups’ needs (behavioural relevance of a brand).

Brand = "a bundle of functional and non-functional benefits which, from the target groups’ point of view, differentiate the brand from competing offers in a sustainable way" Effect perspective

Management perspective

Brand Intended bundle of benefits

touch points (Customer

Perception of bundle of benefits

journey)

Internal target groups

Fig. 1.3   Structure of identity-based brand management

External target groups

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1  Basics of Identity-Based Brand Management

This identity-based understanding of branding is distinct from other approaches that likewise apply the internal perspective (cf. Aaker, 1996; Esch, 2014; Kapferer, 1992). While Kapferer (1992) lacks a clearly defined understanding of brands, Aaker (1996) views brands as just formal symbols (cf. Welling, 2003, p. 73). An extremely reductive understanding of brands put forward by Esch (2014) only takes the external impact perspective into account. Thus, identity-based brand management stands alone among modern understandings of brands, combining management and impact perspectives to form a comprehensive approach.

1.4 The Basic Concept of Identity-Based Brand Management The concept of identity-based brand management, founded on the work of Meffert and Burmann (1996), transcends a unilateral focus on consumer brand perception (brand image). In this identity-based approach, the “classic” outside-in view of brand management that has dominated the marketing discipline for decades is augmented by an insideout perspective. The approach calls for analysis of a brand’s self-image from the point of view of all internal target groups (management, employees, and owners). This self-image is termed brand identity. While brand identity can be actively anchored and developed within a company with immediate effect, brand image, like external image arises from external target groups as a reaction to initial brand management activities after a period of delay (cf. Meffert & Burmann, 1996, p. 34). The reciprocal influence of identity and image on a brand is shown in Fig. 1.4. The first step in building a strong brand is to formulate a clear brand promise. This promise encompasses the benefits that are relevant to external target groups’ purchasing decisions. It is created by condensing the brand identity, as previously developed internally, into a succinct statement that is easy for consumers to understand. The brand promise should also differentiate the brand from its competitors and address the target groups’ most important needs (brand needs). Brand needs are primarily shaped by consumers’ conception of the ideal product as well as their past experiences. To a limited extent, brand needs can also be actively shaped by the brand itself. Brand behaviour includes a brand’s products and services (comprising all the activities in which the employees of a brand are directly or indirectly involved, including creation, marketing, and disposal), the behaviour of employees who are in contact with consumers, and all other means by which consumers encounter a brand (for example, classic advertising and social media). Brand behaviour stands opposite the consumer’s subjective brand experience, which consists of the consumer’s interactions with a brand at brand touchpoints during the individual customer journey. These experiences are compared against subjective brand needs to form the consumer’s image of a brand.

1.5  Comparison with Other Brand Management Approaches

15 Brand image

Brand identity

Brand promise

Brand

Brand needs

touch points

Self-image of internal target groups

External image of external target groups

(Customer journey)

Brand behavior

Brand experience

Fig. 1.4   Basic concept of identity-based brand management

1.5 Comparison with Other Brand Management Approaches 1.5.1 Approach by Kevin Lane Keller Keller’S approach (1993, 2013)—augmented by Keller and Swaminathan (2020)—is one of the best-known brand management approaches internationally. However, it only treats the external view of brand management (outside-in perspective), focusing on customer-based brand equity (CBBE). Keller (2013, p. 69) defines CBBE as “the differential effect that brand knowledge has on consumer response to the marketing of that brand.” According to this understanding, a brand has a high CBBE if consumers react significantly more positively to a branded product than to an unbranded product. This positive response arises from the consumer’s brand knowledge. Keller distinguishes between two dimensions of brand knowledge: brand awareness and brand image. Whereas brand awareness is “related to the strength of the brand node or trace in memory,” brand image is “the consumers’ individual perception of a brand, as reflected by the brand associations held in consumer memory” (Keller, 2013, p. 72). Brand awareness consists of brand recognition (consumers’ ability to confirm prior exposure to a brand when prompted with a brand-related cue) and brand recall (consumers’ ability to retrieve the brand from memory when given a cue like the product or service class) (cf. Keller, 2013). When a sufficient level of brand awareness has been reached, brand managers can start to strengthen their brand image. A brand enjoys a strong image when associations with it are powerful, favourable, and unique. These associations (brand image) can be further differentiated into brand attributes and brand benefits. Brand attributes consist of consumer knowledge about the characteristics of

16

1  Basics of Identity-Based Brand Management

the brand (e.g., product range and price level). Brand benefits are defined, according to Keller (1993, p. 4), as “the personal value consumers attach to the product or service attributes—that is, what consumers think the product or service can do for them.” Keller differentiates these benefits, in turn, into functional (e.g., quality of the branded product), symbolic (e.g., social recognition through brand use) and experiential benefits (e.g., aesthetic design). These components of a brand’s image determine consumers’ overall attitude toward the brand. An internal view, in the sense of brand identity, does not form a part of Keller’s approach (cf. Keller, 2013, p. 548). This is problematic, as employees are largely responsible for fulfilling the brand promise. The internal perspective must, therefore, be integrated into modern brand management. In addition to Meffert and Burmann’s approach (1996), well-known brand management approaches have been proposed by Aaker (1996, 2010), Kapferer (1992, 2012) and de Chernatony (2001, 2006, 2010). The three mentioned will be covered briefly.

1.5.2 Approach by David A. Aaker Brand identity is a central component in Aaker’s approach (1996, 2010). It is defined as “a unique set of brand associations that the brand strategist aspires to create or maintain. These associations represent what the brand stands for and imply a promise to customers from organisation members” (Aaker, 2010, p. 68). Brand identity consists of four dimensions (cf. Aaker, 2010, p. 78 ff.): 1) “brand as product” (product characteristics, quality/value, uses, users, country of origin), 2) “brand as organisation” (organisational characteristics, local vs. global), 3) “brand as person” (personality, brand-customer relationship) and 4) “brand as symbol” (visual imagery/metaphors, brand heritage). Brand management should focus on the dimensions best suited to communicate the core messages of the brand to consumers. According to Aaker (2010), brand identity should, above all, help to build a relationship between the brand and its external target groups (cf. Aaker, 2010, p. 95). Aaker’s brand identity system (2010, p. 79) focuses on brand identity as an internal statement. Detailed consideration of the external, market-side perception of the transmitted brand identity (i.e., brand image) is missing in this approach. Furthermore, Aaker neglects to interrogate the interaction between internal and external target groups. The identity-based brand management approach proposed in this textbook, on the other hand, considers brand image as the external perception of the transmitted brand identity. It examines the interaction between internal and external target groups by incorporating both an inside-out and an outside-in perspective.

1.5  Comparison with Other Brand Management Approaches

17

1.5.3 Approach by Jean-Noël Kapferer While Aaker’s approach focuses exclusively on brand identity, Kapferer (1992, 2012) considers both internal and an external perspectives. The internal perspective is represented by the brand identity, which consists of the six components represented in the Brand Identity Prism: 1. Physique—physical characteristics (e.g., product design) and quality of the brand 2. Personality—how the brand communicates and what personality it displays 3. Culture—according to Kapferer, culture is the most important component of brand identity because it represents the ideology and vision of the brand 4. Relationship—the brand as the centre of transactions between people 5. Reflection—most brands are associated with an image of the typical user of that brand 6. Self-image—brands can improve the self-image of consumers (for example, consumers can buy a Porsche to prove to themselves that they are successful and can afford such a car.) The external perspective refers to the perception of the brand by external target groups (brand image). Kapferer postulates that brand identity is upstream of brand image: “Before projecting an image to the public, we must know exactly what we want to project” (Kapferer, 2012, p. 151). Brand identity is then communicated to external target groups through the brand name, visual symbols (e.g., brand logo), products, advertising, sponsoring, and typical users. The decoding of these messages by consumers results in a subjective brand image. In line with this textbook’s identity-based brand management approach, Kapferer also considers internal and external target groups. However, he focuses on the inside-out perspective, detailing how the brand as sender conveys the brand identity by means of messages to external target groups. These external target groups decode the messages and use them to form the brand image. Due to the largely ignored outside-in perspective, Kapferer’s approach does not explicitly consider the mutual exchange between internal and external target groups.

1.5.4 Approach by Leslie de Chernatony De Chernatony’s approach (2001, 2006, 2010) also considers both an internal and an external perspective. Brand identity is defined here as the “central idea of a brand and how the brand communicates this idea to its stakeholders” (de Chernatony, 2010, p. 53). Core components of brand identity under de Chernatony are brand vision (which provides a clear direction for the brand’s development), and brand culture (which consists of employees’ beliefs in certain values and managers’ shared ideas about the brand’s development). Other components are positioning (which manifests the functional values of the

18

1  Basics of Identity-Based Brand Management

brand), and personality (which embodies the brand’s emotional values). By shaping its positioning and personality, a brand can differentiate itself in its presentation to stakeholders (brand presentation). These components of brand identity are founded on a clear understanding of the relationships that employees have with each other, with customers, and with other stakeholders. De Chernatony understands brand image as the perception of a brand by consumers (cf. Fig. 1.5). While de Chernatony clearly distinguishes between internal and external perspectives, the interactions between these two perspectives are not described in a detailed manner. Similarly, brand image is not thoroughly conceptualized. In summary, the identity-based brand management approach presented in this textbook is the only approach that represents a modern understanding of brands and their management by considering both internal and external target groups as well as the interactions between these groups.

1.6 Current State of Identity Research The term “identity” is used within numerous scientific disciplines. Etymologically, the term “identity” derives from the Latin word “idem,” meaning “the same”. In social science research, the term is used very differently depending on the purpose of the research

Internal perspective

External perspective

Brand presentation

Positioning

Personality

• Brand vision • Culture

Brand image as perception of the brand by consumers

Relationships: Employees to employees Employees to customers Employees to other stakeholders

Fig. 1.5   Brand management approach by de Chernatony (2001, 2006, 2010). (Based on de Chernatony, 2010, p. 54)

1.6  Current State of Identity Research

19

(cf. e.g., Achterholt, 1988; Conzen, 1990; Deichsel et al., 2017; Frey & Haußer, 1987; Gugutzer, 2002). In sociology, for example, the concept of identity is often used as a label for an individual’s bundle of typical roles (Petzold & Mathias, 1982). In psychology, identity represents the self-conception of individuals (cf. Alsaker & Kroger, 2007; Hogg et al., 2000; Rosenberg, 1979), while moral theologians and philosophers use identity to describe a set of personal values, attitudes and ethical principles that remain relatively stable over time. Psychiatry describes identity as the integrity and function of all the organizational activities of the nervous system (cf. Conzen, 1990). In colloquial language, the terms “identity” and “personality” are often used interchangeably, but identity is a more comprehensive construct. In psychoanalysis, identity represents the totality of all of an individual’s personality traits, which merge into more than the sum of their parts. Irrespective of changes and developments in the realm of individual personality traits, this totality enables us to identify a person as “the same” and to recognize them as an individual who remains the same over time (cf. Conzen, 1990, p. 69 f.). Brand identity is also based on the findings of social science identity research. The following pages thus present the central results of identity research in the social sciences, from which brand identity are then derived.

1.6.1 Social Science Identity Research 1.6.1.1 Social Science Approaches The origin of identity research resides in the work of John Locke (1632–1704), who distinguished between an individual’s “identity of men” and “identity of persons”. An individual’s “identity of men ” refers solely to the existence of the physical body and is thus a given. Consequently, a dead man’s identity only ceases to exist when his body has decayed. An individual’s “identity of persons,” on the other hand, rests within the existence of consciousness and thought (cf. Welling, 2003, p. 13 ff.). According to Locke, the latter conception of identity requires a self-referential consciousness from which an individual establishes their identity by linking past and present. This “identity of persons” is thus a subjective construction of identity, often referred to as “self-identity” or “personal identity.” An individual forms their identity by processing their knowledge about themselves along with their past and present experiences. In the context of this self-concept, the subject and object of this search for identity unite in one person (cf. Frey & Haußer, 1987, p. 20). An important psychoanalytical approach to identity research stems from the work of Erik Erikson and is based on Freudian psychoanalysis (cf. Abels, 2009, p. 323). In Erikson’s model, a person’s identity emerges out of an individual psychological development process. Erikson’s work is based on three fundamental assumptions (cf. Becker, 2012, p. 32; Lührmann, 2006, p. 154 f.):

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1  Basics of Identity-Based Brand Management

• Identity is the result of a psychosocial development process. • Crises arise from the interplay between psychological and social mechanisms, and the overcoming of these crises forms the basis for identity development. • An individual retains the solutions to these crises throughout their life, and these solutions shape all aspects of their life. Erikson (1950) describes identity as a person’s sense of independence and wholeness despite all their experiences and the contradictions associated with those experiences. Identity thus has its origins primarily in the crises that arise in the early phases of life and emerges out of a person’s capability to perform internal, subjective synthesis (cf. Lührmann, 2006). Continuity and consistency are, therefore, two of Erikson’s constitutional characteristics of identity. More recent approaches criticise Erikson’s process of identity development primarily because he understood identity formation as a one-time process that could be definitively concluded. Against the backdrop of a modern society in which there is constant change, this finality lacks a foundation (cf. Keupp, 1989, p. 60). In reaction to this change in the social environment, psychoanalytic identity research produced the open identity process, coined by Marcia (1980). The open identity process understands the development of an individual identity to be a lifelong developmental task. Over the course of this open development, individuals repeatedly work out temporary identities that remain stable for a relatively short period. As crises occur throughout life, these identities need to be restabilized and adapted. Consequently, the characteristic of consistency (sameness) put forth by Erikson loses significance, and that of coherence (similarity) gains in importance (cf. Keupp et al., 1999, p. 90). A fundamental criticism of all approaches from the field of psychoanalysis concerns the fact that they view identity only from the perspective of the individual. Even though the formation of identity occurs at the interface between the individual and society, the psychoanalytical understanding of identity is constrained to the subjective perception of the person concerned (cf. Lührmann, 2006, p. 178). In contrast, communication and interaction processes in the formation of identity play a larger part in interactionist approaches. From the interactionist perspective, identity is formed more from the outside in (cf. Keupp et al., 1999, p. 98). According to the work of Mead (1973), a distinction must be made between the “I” and the “me.” The “I” describes the individual characteristics of a person and is largely congruent with the psychoanalytical understanding of identity. However, in contrast to these psychoanalytical approaches, Mead assumes that the “I” cannot recognize itself— to do that, the “me” is required. The “me” describes the image an individual has of themselves through their interaction with others (cf. Joas, 2000). This image is not always consistent. On the contrary, it consists of a multitude of different attributions made by the many people with whom an individual interacts (cf. Mead, 1973). In most cases, a person’s social perception and self-perception are not congruent. The individual characteristics reflected in the “I” differ from the roles ascribed to the “me.” An identity is

1.6  Current State of Identity Research

21

formed by the continual weaving together of an individual’s self-perception and social perception (cf. Keupp et al., 1999). The increase in momentum, complexity and uncertainty in daily life have led to new developments in the realm of identity concepts. The foremost concept here is patchwork identities, stemming from the work of Keupp et al. (1999). In the patchwork identities approach, the word patchwork has both a temporal and content-related meaning. From a temporal perspective, unlike in Erikson’s approach, identity formation does not follow a linear course with a clear goal. Individuals are constantly confronted with new experiences that call their identities into question. Identity formation is thus an ongoing process in which individuals must integrate new experiences into their pre-existing conceptualization of their own identity. Continuity in this understanding becomes a temporal link used to create a coherent overall concept of an individual’s identity, encompassing the past, present, and expected future. According to Keupp et al. (1999), the content-related perspective addresses the individual’s need to do justice to all the different roles they are faced with as a member of society. This includes, for example, the different roles they play at work, in their family, and among friends (cf. Becker, 2012, p. 41). Partial identities are built around these different roles and are adjusted to match the expectations that come with each role (cf. Luhmann, 1994, p. 193). Considering this, the integration of all an individual’s partial identities into one single holistic identity is not always feasible. Additionally, these partial identities cannot exist entirely separately from one another, as contradictions between them would otherwise result in a loss of authenticity for the individual (cf. Lührmann, 2006). The central aim of identity formation is achieved when a person’s partial identities are coherently linked, forming a structure that Keupp et al. (1999) call the meta-identity. At this superordinate level, the contradictions between the individual partial identities must be kept to a minimum, in order to maximise coherence across all parts. To this end, individuals must determine where their partial identities overlap to find the core of their identity (cf. Keupp et al., 1999).

1.6.1.2 Constitutional Features of Brand Identity As we have seen, social science identity research generally distinguishes between two perspectives that define a person’s identity. Identity always emerges through the interplay between the internal perspective—a person’s self-image—and the external perspective—the external image. The external image is shaped by third parties’ expectations as to how a person should behave in a certain role (e.g., as a colleague). These role expectations held by outsiders can be referred to as a person’s image. From an internal perspective, this image is contrasted with role perceptions, which are reflected in an individual’s partial identities. An understanding of roles is thus a component of identity. Furthermore, a distinction must be made between individuals and groups of people as the reference objects of identity (Keupp et al., 1999). In the context of assigning brand identity, brands are conceived of as groups of people primarily consisting of the managers and

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1  Basics of Identity-Based Brand Management

employees of a brand (cf. Table 1.2). In the case of owner-managed brands, this group is widened to include the owners (e.g., in family businesses). In contrast, the shareholders of larger (listed) public corporations are not usually part of the group of people who represent the brand and bear the group identity. When referring to people, the word identity expresses the existence of an image the individual has of themselves (cf. Conzen, 1990, p. 72 f.). It provides them with information they can use to distinguish themselves from others and acts as a guiding framework for their behaviour. The core of an individual’s understanding of themselves is based in self-reflection and the reciprocal exchange between the internal and external perspectives (cf. Table 1.2). The person constantly compares their internal identity with third parties’ external perceptions and revises it when discrepancies arise (cf. Weidenfeld, 1983, p. 19). As a result, it is only possible to form an identity when at least two people establish a relationship (cf. Haußer, 1995, p. 3 f.). Regardless of the definition of identity under consideration, four constitutional features of the concept of identity can be derived from social science research on identity (cf. Table 1.3): Reciprocity: Identity can only arise in the interaction between people. This reciprocal exchange inherent to identity is also referred to as the “paradigm of identity research” (cf. Frey & Haußer, 1987, p. 17). Brands are no different: the identity of a brand is only formed and changed within the context of its relationship with consumers and other reference groups. Continuity signifies the retention of a person or group’s essential characteristics over a period of multiple years. These essential characteristics describe the essence of the identity object or the core of its identity. If these essential characteristics are lost, the identity becomes obsolete. These essential characteristics mark the identity as an institution (cf. Bonus, 1994). Unlike the essential characteristics, accidental characteristics of an identity object can change without the person or group losing its identity (cf. Böhm, 1989, p. 48 f.). Continuity of accidental characteristics is thus unnecessary for the Table 1.2  Perspectives and reference objects of assignment of identity. (Based on Haußer, 1995) Reference object of identity assignment

Perspective of the verification of identity Internal perspective (self-perception)

External perspective (social perception)

Individual

Identity of a person

Image of a person

Group of people

Group identity (Identity of a group as perceived by its own members)

Group image (Subjective image of a group as attributed to the group by non-members)

Brand (Managers and employees of a brand)

Internal self-perception of the brand  = Brand identity

External public image of the brand  = Brand image

1.6  Current State of Identity Research

23

Table 1.3  Constitutional characteristics of the concept of identity. (Based on Meffert & Burmann, 1996, S. 29) Constitutional characteristics

Individuals

Brands

Reciprocity

A personal identity is formed by establishing a relationship between a person and other people.

A brand identity is formed by establishing a relationship with consumers and other reference groups.

Continuity

Essential characteristics retained over time serve to identify a person (period-dependent). These characteristics describe the nature and essence of the person. Nonessential features of an identity can change over time.

A brand identity is established by maintaining essential brand characteristics that define the core identity over time.

Coherence

The individual forms a non-contradictory combination of different but compatible personality traits.

Coherence is achieved by avoiding fundamental contradictions in the brand’s self-presentation at all brand touchpoints as well as in the behaviour of brand managers and employees.

Individuality

Individuality results from the biologically and sociologically determined uniqueness of the individual.

Individuality results from the uniqueness of fundamental identity characteristics compared to competing brands.

construction of a clear identity. Even so, accidental characteristics also influence identity, as the level of harmony between accidental and essential characteristics shapes the clarity and behavioural relevance of an identity. A person’s essential identifying characteristics include, for example, their date and place of birth and certain physical features. An individual can be identified as the same person consistently throughout their lifetime by their essential characteristics. By contrast, a person’s occupational status, economic situation and style of dress are among the accidental characteristics of their identity. Unlike continuity, coherence does not refer to a period of time but rather to a point in time. It describes the avoidance of contradictions between essential identity characteristics. A clear, behaviourally relevant identity can only be generated through a combination of essential characteristics free from contradictions. As a result, to create a clear brand identity, a brand must coordinate and integrate all internal and external brand characteristics and behaviours, including those of its employees. In the case of brands, the necessity of integration does not imply a dull uniformity of identifying characteristics in the sense of restrictive and rigid consistency, but rather a combination of identifying characteristics that enables recognition of the brand’s core identity despite differences within the brand.

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1  Basics of Identity-Based Brand Management

Individuality describes the uniqueness of an identity object. This uniqueness can derive from a single characteristic or a combination of characteristics. In the person-related understanding of the concept of identity, the characteristic of individuality is fulfilled for biological reasons. Many current brands, however, suffer from a weak identity precisely because they lack individuality in the perception of their customers and often of their own employees. In such cases, the term “brand” no longer applies—a more accurate designation would be “labels” in the sense of uniformly marked products and services. Within the framework of reciprocity, the role expectations stemming from the social environment are of great importance for an individual (cf. Abels & König, 2010, p. 94). Since a person can seldom fulfil all the roles expected of them by society and is thus often forced into role conflicts, they need a very clear concept of their own identity. In other words, they need a secure sense of self to avoid being demoralized by these conflicts (cf. Bonus, 1994, p. 3). A brand’s identity fulfils the same function for its employees in the face of diverse and conflicting demands on the brand. A person’s identity is characterized by a high degree of consistency over time, and a change in identity always unfolds slowly. A person’s identity is rooted in their biography (cf. Krappmann, 1988), while a brand’s identity is rooted in its origin. A clear identity is a prerequisite for the emergence of trust (cf. Sect. 2.2.2; Luhmann, 2014). An identity generates clear expectations and later fulfils them through behaviour that conforms with this identity and is thus deemed authentic. Trust has not only sociological but also economic significance (cf. Ripperger, 2005). For the provider, the existence of trust reduces transaction costs and provides a crucial competitive advantage (cf. Kenning, 2003). For the buyer, growing trust in the provider reduces the perceived risk of disappointment, sparing the buyer costs that would otherwise be incurred for the sake of risk reduction (cf. Plötner, 1995, p. 11 f.).

1.6.1.3 Groups as Identity Objects in the Process of Ascribing Identity Group identity can be used to describe social systems (e.g., cultures, associations, cities, regions, and companies). The self-reflection of group members on their existence as part of a group is fundamental to the group identity. A group’s identity consists of the characteristics of the group that remain constant even if individual group members leave (cf. Werthmöller, 1994, p. 39). Group identity is expressed, for example, in common values and behaviour, and it distinguishes the group from other groups (cf. Schein, 1985, p. 185 f.; Deichsel et al., 2017, p. 82 ff.). A strong group identity becomes a component of all the individual group members’ identities and acts like a bracket that encompasses the group members and creates cohesion, thus leading to more effective and efficient processes within companies. The economic value of brands primarily stems from these outgrowths of strongly developed group identities. Given that in the social sciences, identity is fundamentally viewed as the result of human interaction and reflection, the concept of identity cannot be transferred to brands if they are regarded merely as property rights or bundles of symbols (cf. Welling, 2003, p. 10

1.6  Current State of Identity Research

25

f.). The identity of a brand must, therefore, refer to the identity of the group of people behind the brand. The specific collection of people driving a brand has an identity created through self-reflection which is distinguished from the identities of other collections of people (e.g., competitors) and other individuals (e.g., customers). The collection of people who shape a brand is not necessarily consistent with the group of people who form the legal corporate affiliation. For example, a brand identity can also be shared by the employees of a sales agency devoted to the particular brand, even if the agency is economically and legally independent (cf. Maloney, 2007, p. 17; König, 2010, p. 7).  Within this framework, brand identity can be defined as “those characteristics of a brand which sustainably define the character of the brand from the perspective of internal target groups” (cf. Burmann et al., 2003, p. 16). Brand identity is established in two ways: • Through a collective, self-referential process of becoming aware of one’s own existence within a group as well as one’s own affiliation to that group, contextualized among all the employees of the brand. • Through interactions with people and groups of people who are external to the brand, as well as encounters with outsiders’ perceptions of both the brand and the people behind the brand. Just as the identity of a person or group encompasses various roles or components, a brand’s identity also arises out of interactions between its components. Even so, brand identity, like the identity of a person, is perceived holistically. The expression and combination of the individual components of a brand’s identity must forge a coherent “form” (Gestalt) that differentiates itself from other service offerings in the relevant market (cf. Meffert & Burmann, 1996, p. 36 f.; Deichsel et al., 2017, p. 213).

1.6.2 Economic Identity Research 1.6.2.1 New Institutional Economics Having examined the effects of group identity as represented within the social sciences, brand identity is clearly of high economic relevance. The field of economics offers additional proof of the economic significance of identity (cf. Dörtelmann, 1997) within new institutional economics (e.g., Erlei et al., 2016). To understand new institutional economics—particularly the work of Nobel Prize winner Douglas C. North—it is necessary to transcend the narrow conception of humans as “homo oeconomicus.” The introduction of mental models (internal, subjective representations of the external world), as well as path-dependent processes (the consideration of coincidences and states of disequilibrium; cf. North, 1992, p. 96 f.), enabled economists to come closer to solving complex

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1  Basics of Identity-Based Brand Management

problems in the realm of national economics (cf. Denzau & North, 1994, p. 10 f.; Bonus, 1995, p. 2). New institutional economics understands an institution as “a system of values and standards that, in the event of a violation, has penalties attached to it” (cf. Bonus, 1995, p. 4). Institutions create general conditions for human action. Institutions are mental models of the individual (cf. Denzau & North, 1994, p. 4). Because they are stable over time, they serve as a source of orientation for individuals. Theorists make a distinction between fundamental and secondary institutions (cf. Dietl, 1993, p. 71 f.). Fundamental institutions are anchored in the history of a nation and can only change very slowly. They cannot be directly altered by human effort. In contrast, secondary institutions can be consciously shaped. Secondary institutions are only “effective” if they are embedded in the system of values and norms at work within the fundamental institutions in which they operate. For example, a population’s sense of justice can be described as a fundamental institution, while the concrete laws and administration of justice within a society can be classified as a secondary institution. Laws and the administration of justice can only fulfil their purpose if they harmonise with the population’s sense of justice (cf. Bonus, 1995, p. 5). Identity can also be interpreted as a system of values and norms that is highly stable over time and serves as a framework for an individual’s behaviour. Identity is also an internal, subjective representation of the external world. Thus, the group identity of all employees of a brand can be understood as a secondary institution. Brand identity can only influence behaviour when embedded in the set of values and norms within the surrounding society. In this respect, according to new institutional economics, the regional or national culture in which a company or brand organization is located serves as a fundamental institution undergirding a brand’s identity. Brand identity is therefore vital to explain and influence economic circumstances. Brand identity can only change slowly—it cannot be manipulated in the short term, and is rarely directly influenced in terms of a deterministic relationship. Furthermore, a clear brand identity can only be established if it harmonizes with the identity of the company as a whole and is meaningfully embedded within it.

1.6.2.2 Corporate Culture Research The concept of identity has been addressed not only within new institutional economics, but in other areas of business administration as well. Research in this area developed in connection with studies of corporate culture. Analysing the relevant publications, it is first of all striking that many authors broadly equate the concept of culture with the concept of identity (cf. e.g., Deal & Kennedy, 1982, p. 137). According to these authors, a strong corporate culture is primarily characterized by a strong group identity among all the company’s members. Conversely, a company’s identity can be cultivated and made visible by means of appropriate rituals and jointly lived values and norms (cf. Deal & Kennedy, 1982, p. 59; Schein, 1985, p. 14; Bonus, 1994, p. 15).

1.6  Current State of Identity Research

27

Though the concepts of culture and identity share much in common, the two terms must not be equated. Most organizational and brand researchers view corporate culture as a contextual factor that shapes brand identity (cf. Hatch & Schulz, 1997, p. 358; Berggold, 2000, p. 27 ff.; Meffert, 1994, p. 427 f.). Corporate culture comprises all basic assumptions, values and norms that are shared by company members and transferred to new members. It shapes the perception, thinking, decisions and behaviour of company members (cf. Schein, 1992, p. 12). Basic assumptions are mostly self-evident, often unconscious, and consist of longstanding beliefs about the environment, reality, human nature, actions, and relationships. In corporate culture, values express what is desirable to the company members in the long term. Norms are concrete rules of conduct that are accepted by the members of the company and linked to sanctions when violated. Corporate culture is always rooted in company history, having evolved within the group over a long period. Over time, culture becomes a more and more independent entity and increasingly eludes targeted control by management. Thus, in contrast to brand identity, corporate culture is not a management tool. Brand identity is also more strongly and explicitly connected to the sales market (e.g., by means of the brand promise and intentional differentiation from competitors).

1.6.2.3 Corporate Identity Research Corporate identity research is also concerned with the concept of identity. John M. T. Balmer is an influential researcher in this field (cf. Balmer, 2017a; van Riel & Balmer, 1997). While many of the first publications about corporate identity were written by practitioners, van Riel and Balmer established corporate identity as a field within marketing research. They define corporate identity as “an organisation’s unique characteristics which are rooted in the behaviour of members of the organisation” (van Riel & Balmer, 1997, p. 341). Corporate identity addresses the central question: “What are we?” (cf. Balmer, 2001, p. 257). The definitions of corporate identity and brand identity thus overlap substantially. Both concepts concern the essential characteristics of a reference object (a company or brand) that emanate from the group’s behaviour. For corporate brands, there is no difference between the concepts of corporate identity and brand identity (or corporate brand identity) within our approach. However, Balmer (2008, p. 894) clearly differentiates between corporate identity and corporate brand identity: “To me, corporate brands are more appropriately viewed as a distinct identity type which can have a life of its own in that they can be bought, sold and borrowed […] As a distinct category of (institutional) identity we should not lose sight that they can be separate and divisible from the institution […] from which they evolved.” (cf. Fig. 1.6). Examining these components, the similarities between corporate identity and the brand identity of corporate brands become apparent. As components of corporate identity in Balmer’s model (cf. Balmer, 2017b), corporate culture, corporate strategy, organizational structure, and communication overlap with origin, competencies, values, personality, vision, and offer as components of brand identity in our model (Sect. 1.7).

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1  Basics of Identity-Based Brand Management CHARACTER (Corporate identity) “What we indubitably are”

CULTURE (Corporate culture) “What we feel we are”

COMMUNICATION (Corporate communications) “What we say we are”

CONCEPTUALIZATIONS (Corporate reputation and image) “What we are seen to be”

CONSTITUENCIES (Customers and stakeholders) “Whom we seek to serve”

COVENANT (Corporate brand identity) “What is promised and expected” Fig. 1.6   Corporate Marketing-Mix. (Based on Balmer & Greyser, 2006, p. 735; Balmer, 2011, p. 1334 ff.)

In terms of the definitions and components, there is great overlap between Balmer’s concept of corporate identity and our exposition of brand identity. The main difference lies in the reference object—in corporate identity, it is the company; in brand identity, it is different types of brands. These can be, for example, corporate brands, business unit brands, product line brands, and product feature brands. To summarize, in our view, corporate identity and corporate brand identity are largely identical for corporate brands, although Balmer introduces differentiations here.

1.7 Conceptual Design of the Brand Identity Section 1.6 illustrated the process of identity formation that must take place in order to create a clear and consolidated identity. According to Keupp et al. (1999, p. 217 ff.), the central aim of identity formation is to condense all the partial identities present in a person into a meta-identity and to form a concise core identity as a common interface. This demand for conciseness means that the core of a clear identity should consist solely of a few prominent characteristics. In contrast, a diffuse identity is characterized by the absence of this reduction and the presence of numerous features that are not well differentiated. The interactionist approaches within identity research (Sect. 1.6.1.1) also

1.7  Conceptual Design of the Brand Identity

29

highlight the fact that identity formation is an ongoing process that involves continual questioning and adaptation. Every adaptation of one’s own identity involves risks. People who shy away from these risks and strive to maintain their personal status quo prevent the adaptation of their own identity, even when crises make adaptation necessary. On the other hand, a clear identity is characterized by a willingness to take risks in order to resolve role conflicts, thus enabling the further development and consolidation of one’s identity over time. Further guidelines for successful identity formation can be gleaned from the reciprocal influence of self-image and the perspective of others. A person can only preserve the self-determined individuality of their identity if they do not completely adapt their self-image to the perspective of others. Since foreign images depend on the role expectations associated with them, complete adoption of these outside perspectives would prevent the formation of a consistent core identity. As a result, a salient feature of clear identity is deeply rooted personal values, the same is true for vision. To prevent the unthinking adoption of external influences into one’s self-perception, a high level of self-confidence is necessary and thus this becomes another characteristic of a clear identity. In addition, John Locke called attention to the importance of a self-referential consciousness that connects past experiences with the present. This concept persists in modern identity research (cf. Keupp et al., 1999, p. 95 f.). When a person has a clear identity, a self-referential awareness of their achievements and accomplishments in the past provides motivation for ongoing work on their identity. A diffuse identity, on the other hand, is characterized by the absence of this awareness and a corresponding lack of motivation. Table 1.4 shows that clear human identities are characterized by an accentuation of one’s exceptional features coupled with an awareness of their own abilities and individual past. This applies to the identities of individuals as well as the identities of groups of people. The above observations can thus also be adopted for the identity-based management of brands; essential characteristics of human identity can be transferred to brand identity yielding six components of brand identity. These can be used to precisely describe, analyse, and design a brand’s identity (cf. Fig. 1.7). Brand origin is the foundation of brand identity. Without an origin, a brand will lack a point of reference for self-reflection. Brand competencies establish and secure competitive advantages. The brand offer determines the ways in which a brand is usable for its consumers as well as the concrete work performed by its employees. The design of a brand’s identity is shaped in the long term by its competencies and motivated by its brand vision. Brand values specify the beliefs of a brand and its representatives. Brand personality defines a brand’s verbal and non-verbal communication styles. As Fig. 1.7 shows, origin and vision provide the framework that gives the other components shape. The weighty importance of these two components of identity, respectively looking to the past and the future, can be derived from the competence-based view (cf. Burmann, 2002, p. 139 ff.).

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1  Basics of Identity-Based Brand Management

Brand identity

Brand image

Vision

Values

What do we believe in?

Competences

What are we capable of?

Offer

Personality

How do we communicate?

What are we marketing?

Where are we going?

Origin

Where do we come from?

Brand identity as self-image of internal target groups

Brand image as external image of external target groups

Fig. 1.7   Components of brand identity. (Closely based on Burmann et al., 2003, p. 7)

Table 1.4  Characteristics of diffuse and clear identities in people and brands Transfer to brand identity

Characteristics of: Diffuse human identity

Clear human identity

Many indistinct identity characteristics

A few distinct identity characteristics

Brand promise and brand offer

Risk-averse, “fearful” preserva- Role conflicts are actively used Personality tion of the status quo to further develop and consolidate one’s own identity Adoption of the beliefs of others

Shaping one’s own convictions Values

Strong orientation toward one’s Formation of a clear, personal current context vision without being restricted by one’s current context

Vision

Low self-confidence

High self-confidence

Competences

Lack of awareness of one’s own achievements and accomplishments in the past

Past achievements and accomplishments provide motivation for new projects

Origin

1.7.1 Brand Origin A brand’s origin forms the foundation of its identity. It provides an answer to the question: “Where do we come from?” As brands are first and foremost perceived and interpreted by internal and external target groups, brand origin is highly relevant in the

1.7  Conceptual Design of the Brand Identity

31

field of brand management—“Knowing the roots of a person, place, or firm can help create interest and a bond. The same is true for a brand” (Aaker & Joachimsthaler, 2000, p. 249). Origin is also an important concept in psychoanalysis and new institutional economics. The same can be said of management theory within the concept of path dependency, where the “history matters” argument describes the process by which past decisions shape future decisions. Here, the number of possible paths of action diminishes over time as responsible actors become increasingly dependent on the decision paths forged at their origin (cf. Burmann, 2002; Schreyögg et al., 2003). A brand’s origin is closely linked to its history, but the two must not be confused. The history of a brand encompasses all past events related to the brand. A brand’s origin, however, is constructed from specific facets of its history which are purposefully singled out, emphasised and interpreted. In contrast to brand history, brand origin is thus a shapable component of brand identity. Ideally, it lends a high degree of credibility and authenticity to all further brand management activities. Brand origin can thus also be regarded as a kind of symbolic memorial of prior achievements (cf. Menninger & Robers, 2006, p. 256). Brand origin has three facets: geographic origin, company origin, and industry origin (cf. Becker, 2012, p. 59). Country-of-origin research consists of the analysis of the connection between a product’s country of manufacture and the customer’s perception of the product’s quality (cf. Usunier, 2006, p. 68). The influence of geographical origin is closely linked to the specific skills assigned to a country or region (cf. Stolle, 2013, p. 95). For instance, Germany is traditionally regarded as a nation that is skilled in the realm of engineering. However, the country-of-origin effect can also be negative if consumers have a negative attitude toward a country (cf. Andrews & Chew, 2017, p. 88). A central problem within country-of-origin research lies in the increasing trend toward company globalization. As part of international business activity, many companies are no longer physically producing their goods in their brand’s country of origin. Bearing this development in mind, the country-of-origin approach has been augmented in recent years, resulting in concepts that distinguish between country-of-manufacturer, country of corporate ownership, country-of-design and country-of-parts (i.e., the country in which suppliers are located) (cf. Becker, 2012, p. 52). An individual brand’s country of origin as designated by consumers (brand origin), can be any one, or a combination of the above. Figure  1.8 shows an example of the designated origin of the “Swedish” brand IKEA, which can only be described as Swedish according to the country-of-design approach. Both, the origin communicated by a brand and the perceived origin of the brand in the eyes of the consumer are important (cf. Thakor & Kohli, 1996, p. 27 ff.). For example, the gin brand Gin Sul of the Altona Spirits Manufacture is distilled in Hamburg (Germany), but their marketing communication—“Saudade distilled in Hamburg”—contains deliberate nods to Portuguese culture. They also include Portuguese components of origin, such as unusual ingredients like rockrose. These marketing choices combined

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1  Basics of Identity-Based Brand Management Origin references of the IKEA brand

Country of manufacture Final production by the subsidiary Swedwood in 12 countries on 3 continents (e.g., China, Germany, Poland, Portugal, Sweden, Hungary, USA).

Country of corporate ownership The IKEA Group is owned by Stichting INGKAFoundation (the Netherlands).

Country of design

Country of parts

Product development by IKEA of Sweden AB in Älmhult (Sweden).

1,200 suppliers from 55 countries, principally China (20%), Poland (18%), Italy (18%), Germany (6%) and Sweden (5%).

The trademark rights are owned by IKEA Services B.V. and IKEA Services AB (the Netherlands and Sweden).

Fig. 1.8   Origin references of the IKEA brand. (Based on Becker, 2012, p. 52)

with the gin’s name—“sul”, meaning “south” in Portuguese—imply the spirit has two countries of origin, Germany, and Portugal (cf. Täubner, 2017, p. 56 ff.; Gin Sul, 2017). Consumers thus perceive the gin to be partially Portuguese, even though it is only distilled in Germany (Fig. 1.9). This method of designating origin is referred to as “foreign branding” and, depending on its execution, can have negative effects (cf. Melnyk et al. 2012). However, identity-based brand origin does not only refer to geographic origin. Building on culture of brand origin research, cultural origin can also shape the identity of a brand. Due to the widespread international configuration of corporate activity, it is often difficult for consumers to identify a singular country as a brand’s country of origin. As a result, consumers resort to cultural cues to help them identify brand origin (cf. Lim & O’Cass, 2001). For example, the name of the car brand Hyundai evokes an Asian origin, regardless of whether the consumer knows it is a Korean brand. Similarly, the beer brand Paulaner can be identified as a beer brand influenced by Bavarian culture, not merely as German beer. The regional and cultural origin of a brand thus encompasses all influences springing from the countries and regions of origin associated with the identity of the brand (cf. Becker, 2012, p. 9 ff.; Charmasson, 1988; Leclerc et al., 1994, p. 263 f.). However, all approaches presented thus far focus primarily on the perception of origin by external target groups. Thus, based on the concept of identity-based brand management established above, they all fall short.  Within the context of the identity-based brand management approach, brand origin describes the part of a brand’s identity that arises from the identification of the

1.7  Conceptual Design of the Brand Identity

33

Fig. 1.9   Communication of the Portuguese and German origin in the brand “Gin Sul” (Gin Sul, 2017)

organization managing the brand with an area (culture), an industry sector, or an organization (based on Becker, 2012, p. 59). Company origin concerns the assignment of a brand to an organization or company. When a company only has one brand, this assignment is trivial. If, on the other hand, a company has several brands, the brands can be linked to the corporate brand to varying degrees (Sect. 2.4). Consequently, brand management has significant creative leeway when it comes to define brand origin (cf. Becker, 2012, p. 59). Other important determinants are corporate culture, the company founders, and prominent leadership personalities of the past. Company founders and leaders are particularly decisive in shaping brand origin. For example, the company founders of Aldi (a discount chain from Germany), Theo and Karl Albrecht, have strongly shaped the identity of the Aldi corporate brand, which is oriented toward thrift and efficiency. Company origin can also be shaped by the product development of a brand. For example, Fig. 1.10 shows the model development of the Ford Mustang. Numerous products, each with a clear reference to brand origin, have been successfully relaunched in recent years using this strategy. The company also often has scope for shaping the industry origin (cf. Schaefer, 2006, p. 170 ff.). For example, Siemens is active in the following sectors: drive technology, industrial automation, energy, building technology, healthcare, financing, and mobility. The brand can choose which of these sectors of the company it communicates

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1  Basics of Identity-Based Brand Management

Ford Mustang - 1968

Ford Mustang - 2021

Fig. 1.10   Model development Ford Mustang (Ford, 2021)

as its origin (cf. Becker, 2012, p. 60). In 2021, to make the brand appear more modern, Siemens is emphasizing the connection between the physical and digital worlds across all its services. Similarly, the perception of watches, handbags, sunglasses, perfume, and shoes created by the Gucci brand is shaped by the brand’s origins in the clothing industry. While German automotive brands have an image-related advantage in the realm of quality and reliability, they also have significant image-related disadvantages, especially with respect to digitalization. This is because political decision-makers have massively neglected the expansion of digital infrastructure in Germany over the course of many decades (e.g., autonomous driving, e-mobility). As a result, German car manufacturers are now at a considerable competitive disadvantage compared to Tesla (US-American) and Chinese car brands because their German origins convey a lack of digital performance and future viability (Feld et al., 2021; von Gehlen, 2020). Unfortunately, many start-ups from Germany also suffer from the same image-related disadvantage in the digital realm. Brand management can change the perceived origin of a brand in the long term by emphasizing specific individual facets of origin. Likewise, a brand’s origin can be enriched—but also diluted—through collaborations and corporate mergers. The latter can be seen in an extreme form in the acquisition of the Monsanto corporate brand (USA) by the Bayer corporate brand (Germany). Bayer is known for medical technology and restrained market behaviour that is typical of German companies. Monsanto, on the other hand, is known for a background in agricultural chemicals and an aggressive sales approach typical of US brands. Many facets of the two brands’ origins are thus diametrically opposed to each other, and they effectively cancel each other out and destroy the brand value of both brands. Furthermore, outsourcing decisions or the relocation of crucial parts of a company abroad can have a long-term impact on perceived brand origin and brand strength. This can be observed, for example, in the case of the German airline brand Lufthansa. By outsourcing numerous core functions to countries with the lowest possible labour costs, the

1.7  Conceptual Design of the Brand Identity

35

company has undermined its German origin as well as consumers’ trust in its safety and quality (cf. ZDFzoom, 2017).

1.7.2 Brand Vision Brand vision specifies the direction in which a brand wants to develop in the long term. This vision should cover a time period of at least five to ten years. The brand vision should provide a crucial motivating factor for all internal and external target groups, whether in connection with their engagement at work or with their buying and communication behaviour. Ind (2003, p. 395) speaks here of an ideology all employees can identify with. Sinek speaks of purpose instead of brand vision. For him, purpose is the answer to the question “why”—it speaks to the motivation for one’s own actions (Sinek et al., 2017). In essence, the concept of brand vision is about identifying the long-term inspiration for one’s own actions. Once identified and articulated, this inspiration is often more attractive and appealing to other people than individual actions are. For that reason, good leaders first talk about their long-term inspiration—and thus reveal their inner convictions. Brands should therefore speak first and foremost about their inner convictions and not (only) about individual products. Given the accelerating speed of imitation of products and services, focusing on a brand’s identity—and, above all, its vision—is a good measure to take to both differentiate a brand from the competition and secure its competitive advantage. A company’s brand vision should clarify the tremendous significance of the brand in the realization of its long-term corporate goals by means of pictorial-emotional guidelines. The corporate philosophy, or, synonymously, the mission of the company, should be distinguished from its brand vision. The corporate philosophy of a company embodies its fundamental values and assumptions (cf. Melewar & Karaosmanoglu, 2005, p. 855), whereas the brand vision can be viewed as a concretized, simplified, and sharpened form of the corporate philosophy and mission. Compared to brand vision, brand objectives are even more concrete and have a shorter time horizon. Brand vision ensures that all corporate activity remains coordinated across time and is coherent throughout all levels of the company. To impart a high level of motivation and forge a strong group identity internally, a company’s brand vision must express a dream that is attainable in the long term (cf. Kapferer, 1992, p. 110 f.). At the same time, a clearly formulated vision acts as a guideline for the brand’s employees as they work to identify the capabilities that need to be developed to fulfil the vision. If, on the other hand, the brand vision incorporates unrealistic or utopic expectations, it loses its ability to guide corporate activity and, in most cases, its motivational power, as an unattainable goal does not motivate. Mercedes-Benz AG has twice been affected by this “utopia problem.” Under Edzard Reuter (chairman of the board of management appointed in 1987), the brand’s vision was to transform the company from a car manufacturer into an integrated technology

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group. As a result, Mercedes-Benz made numerous large acquisitions, including the electrical company AEG and the aerospace group Dornier. Within a few years, the company’s brand identity had eroded, leading to considerable problems. In 1995, Reuter left the company, whereupon his successor, Jürgen Schrempp (chairman of the board from 1995 to 2005), also pursued a utopian brand vision. Under his leadership, the MercedesBenz brand was to become a status symbol for a powerful, global corporation. To this end, a merger was carried out with Chrysler, the third-largest American car manufacturer at the time, and shares were acquired in numerous automotive and aircraft manufacturers around the world. This vision of a “global corporation” demotivated the workforce, overstretching their skills and resources. For many years, this utopic vision led to serious quality issues at Mercedes-Benz Automobiles and the loss of their earlier high-rung position as a brand focused on quality (cf. Tietz, 2009, p. 220 ff.).

1.7.3 Brand Competence Alongside brand origin, a brand’s identity is primarily founded on the specific skills (or competencies) of the institution leading the brand. This encompasses the specific organizational capabilities of a company as exercised to identify, refine, and combine resources in line with the market (cf. Freiling & Reckenfelderbäumer, 2010, p. 78 ff.). Competitiveness, or dominance over competitors, is only possible if a brand provides at least equal—or, preferably, superior—benefits to the customer. Superior customer benefits that endure always have their roots in the core competencies of a brand (cf. Freiling, 2009). From the perspective of identity-based brand management, the economic value of competencies and core competencies can be assessed by examining the willingness of customers to pay for the customer benefits on offer. For brand management, the necessary competency of a company can be divided into three areas: refinement, market supply, and meta-competencies (cf. Fig. 1.11). Refinement competency refers to the ability to absorb information as well as the ability for strategic planning. Together, these generate a brand’s capacity for action with respect to employee motivation. In order to absorb information, a company must be able to recognize relevant market information—e.g., trends—and to react adequately to it. The task of strategic brand planning is to ensure that the value chain is consistently focused on fulfilling the brand promise. This affects, for example, decisions to insource or outsource sub-areas of the value chain. In addition, the future strategic development of the brand promise must be grounded on this competence (cf. Blinda, 2007, p. 326). Market supply competency facilitates the design of goods and services. Contingent on a brand’s ability to evolve, it adapts over time to changing environmental and competitive conditions. The competence for internal brand assertion includes all brand management measures aimed at internal target groups. This involves, for example, building brand knowledge, encouraging brand commitment, and strengthening brand citizenship behaviour among employees (Sect. 3.1). The competence for brand implementation

1.7  Conceptual Design of the Brand Identity

37

Meta-competences Customer retention competence Customer acquisition competence

Refinement competences

Market supply competences

Information absorption competence

Evolution competence

Strategic planning competence

Internal assertion competence

Implementation competence

Fig. 1.11   Structuring competences in identity-based brand management. (Based on Blinda, 2007, p. 320; Freiling & Welling, 2005, p. 107 ff.)

ensures harmony between the brand identity, the brand promise and the operative measures taken by brand management at all brand touchpoints. In addition to these competencies related to refinement and market supply, two superordinate meta-competencies play a decisive role in identity-based brand management. With the competence to acquire new customers and the competence to retain customers, a company can acquire new customers for the brand and bind existing customers to the brand. The skills and core competencies of a brand are based on knowledge-related advantages and are always temporary (cf. Burmann, 2002, p. 157 ff.). To defend the brand’s knowledge-related advantages, it is vital to make permanent investments in the renewal of competences and core competencies—this means continuous investment in the retention of the human resources responsible for the brand’s competencies and core competencies. Identity-based brand management, therefore, always concerns employee management first and foremost.

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1  Basics of Identity-Based Brand Management

1.7.4 Brand Values Brand values are the fundamental beliefs of the people behind a brand. They express important emotional components of the brand identity, clarifying what the brand “believes in.” Condensed into just a few statements, brand values should primarily convey the non-functional benefits of the brand. In corporate practice, brand values are often far too generic and overloaded with too many messages. For example, the fast-moving consumer goods company Henkel KG & Co. KGaA (the company behind German product brands such as Persil and Somat) list their brand values online. Among others, these include: “We place our customers and consumers at the centre of our actions,” “We value, challenge and promote our employees,” and “We strive to steadily expand our leading role in sustainability” (Henkel KG & Co. KGaA, 2021). When brand values are as unspecific as this and full of easily replaceable statements, they do not differentiate or strengthen a brand. Brand activity that is simultaneously value-based and socially responsible has long been studied in business research under the term corporate social responsibility (CSR). For example, Hanisch (2016) investigated whether it is economically worthwhile for brands to focus on their values and concentrate on taking responsible action as a company with those values in mind. In his Germany-wide study of 1335 current and potential buyers of brands from five different industries (cars, food, banks, fast food restaurants, and airlines), he showed that value-based and responsible behaviour strengthens emotional identification with (i.e., brand attachment), and loyalty to the brand. He demonstrated that the CSR activities of a brand do not directly influence customer buying behaviour in the short term, but it does affect buying behaviour indirectly and in the long term through growing attachment to the brand. In a cross-sector comparison, the coefficients of a structural equation analysis in Fig. 1.12 show that the CSR image of a brand (i.e., perceived responsible conduct toward society and the environment) has a significant positive influence on brand attachment for banks, low-cost airlines, and companies in the food sector, but not in the other sectors examined. In contrast, the CSR image of a brand does not have a significant direct effect on the purchase intention of consumers in any industry. Instead, purchase intention is influenced in all sectors by brand attachment and brand image with respect to corporate ability (i.e., the competence of a company as perceived by the consumer) (cf. Hanisch, 2016, p. 91 ff. and 174 ff.; Burmann, 2016, p. 34 ff.). Furthermore, brand values play an important role in the perceived authenticity of a brand (cf. Adomeit, 2020; Dietert, 2018; Schallehn et al., 2014). These brand values must be genuinely lived out by the brand’s employees—only then can the brand values increase trust in the brand and contribute to emotional brand differentiation. An example of a brand with particularly distinctive brand values is The Body Shop. Anita Roddick, the founder of The Body Shop, has formulated five clear values for her brand and maintained and consistently implemented them over a long period: 1) Against Animal

1.7  Conceptual Design of the Brand Identity Determinant (independent variable)

39

Automobiles

Banks

System gastronomy

Low-cost airlines

Food

0.438***

0.378***

0.463***

n.s.

n.s.

CSR image of the brand

n.s.

0.274*

n.s.

0.507***

0.719***

Corporate ability image of the brand

0.182*

0.266*

0.441***

0.585***

0.518***

n.s.

n.s.

n.s.

n.s.

n.s.

0.659***

0.505***

n.s.

0.176*

0.214**

Dependent variable

Corporate ability image of the brand Brand attachment

CSR image of the brand

Brand attachment

Purchase intention

Significance: * = 0.10; ** = 0.05; *** = 0.01; n.s. = not significant (no influence)

The coefficients of a structural equation analysis (shown here) can vary between + 1.0 and - 1.0 and show how strong (positive or negative) the influences of independent variables are – e.g., corporate capability or CSR image – on brand attachment and purchase intention.

Fig. 1.12   Relevance of the CSR image of brands for purchasing behaviour in an industry comparison. (Based on Hanisch, 2016, p. 165)

Testing, 2) Support Community Fair Trade, 3) Activate Self-Esteem, 4) Defend Human Rights, and 5) Protect the Planet (cf. Backstage Tales, 2017). Even when she sold the company to the large corporation L’Oréal in 2006, she stipulated in the contract that The Body Shop would remain true to its original brand values (cf. Dierig & Wüpper, 2017). However, the contradictory values of L’Oréal and The Body Shop led consumers to doubt The Body Shop’s brand values and authenticity (Backstage Tales, 2017). The resulting loss of trust had a direct impact on sales; while the natural cosmetics market steadily grew, The Body Shop sales declined for many years. Possibly due to these diminishing sales, L’Oréal sold The Body Shop in June 2017 to the Brazilian natural cosmetics manufacturer Natura & Co. The positive effects of an authentic embodiment of brand values can be seen in an example from the German drugstore market. The drugstore chain dm, in contrast to its former competitor Schlecker, consistently focuses on its brand values. Götz W. Werner, founder and supervisory board member of the company, summarizes the brand’s philosophy as follows: “If there were no people, there would be no economy. Consequently, the economy is there for people and not vice versa.” With this mindset at its core, dm is guided by three values: “Living Responsibly, Being Human, and Acting Sustainably”. In contrast, Schlecker, a brand that was repeatedly criticized in public for serious deficiencies in employee management, focused solely on the minimization of costs in its brand management. In 2009, for example, Schlecker closed around 800 smaller shops and opened “XL” shops in their place. Instead of continuing to employ those who worked in

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the smaller shops, Schlecker offered former employees the opportunity to work as temporary workers in the new shops through a temporary employment agency. Having been paid 12 € per hour by Schlecker, the temporary employment agency paid these workers just 6.50 € per hour. Employees unwilling to accept this wage reduction were transferred to branches further away. Schlecker had to file for insolvency in January 2012. The fact that the Schlecker brand did not have a clear brand identity as its guiding star was also reflected in the behaviour of the founder, Anton Schlecker. He was never visible to his employees, going so far as to enter the company headquarters via the underground car park and a private lift. Even after the insolvency, he did not address the staff or make any statements directed toward them (cf. Amann & Tietz, 2012, p. 68 ff.). The market impact of the brand identities of dm and Schlecker were exposed on the rating portal dooyoo.de: dm always achieved a very good rating of five stars, while Schlecker scored a maximum of three stars (dooyoo GmbH, 2017). Adidas is an example of a brand that, in practice, disregards the brand values it declares in public. The value of sustainability is put forward as a corporate goal at Adidas, and its employees are identified as an important supporting pillar for achieving this goal: “… [We] empower people to exercise their rights and develop their potential” (Adidas Group, 2017). Adidas sneakers are manufactured in factories in Cambodia, among other places. Workers employed in these factories work for an hourly wage of around 60 cents, often in unhealthy working conditions. To prevent the reality of these working conditions from damaging the image and identity of the brand, Adidas’ production sites are protected with surveillance cameras and security guards. Public statements regarding the conditions in sneaker production facilities are categorically denied (cf. SWR Fernsehen, 2017). Similar behaviour was witnessed again at Adidas after the start of the COVID-19 pandemic in the spring of 2020. After taking office in 2016, the new CEO of Adidas, Kaspar Rohrsted, used up the company’s financial reserves for share buyback programs and increased dividend payments (thereby securing his own bonus payments). As a result, Adidas quickly ran into financial trouble after retail shops were closed at the beginning of the pandemic. On these grounds, Adidas stopped paying rent for its shops and applied for financial support from the German government, which was quickly granted (cf. Burmann & Barth, 2020, p. 605 f.). These instances demonstrate that the lived behaviour of the board and managers has often stood in clear contradiction to the official brand values.

1.7.5 Brand Personality Originally, the concept of personality was limited to character descriptions of human beings. But as early as 1919, Gilmore concluded in his book, the Theory of Animism, that people tend to “animate” inanimate objects by endowing them with human characteristics to simplify their interactions with them. This means that brands can also be

1.7  Conceptual Design of the Brand Identity

41

described as having human characteristics (Aaker, 1997; Fournier, 1998; Hermann et al., 2005; Schade, 2012).  Azoulay and Kapferer (2003, S. 151) define brand personality as “the set of human personality traits that are both applicable and relevant for brands.” Brand personality is vital for brand management, especially because it offers vast potential for brand differentiation. Just as people differentiate themselves from one another through various personality traits (e.g., sociable, curious, reserved), brands can use personality traits in the same way. The two competitors Coca-Cola and Pepsi demonstrate this well. While the brand offer produced by Coca-Cola and Pepsi differs only slightly (e.g., in taste), the two brands’ personality traits are very different (cf. de Chernatony & McDonald, 1998). US-American consumers describe the Coca-Cola brand using terms such as “cool” and “joie de vivre,” while Pepsi is characterised as “young,” “trend-conscious,” and “sporty” (cf. Aaker, 1996, p. 142). Brand personality is expressed through a brand’s verbal and non-verbal communication styles. The history of the Apple brand illustrates this well. To bring the brand back to its former strength during a crisis in the 1990s, Apple’s founder and CEO, Steve Jobs, initiated the “Think Different” campaign. The central goal was to convey that Apple’s brand is a “non-conformist, creative personality” and (“[…] to re-establish Apple’s counter-culture image that it had lost during the 90s”; Jobs, 1997). In TV commercials and print ads, Apple featured famous personalities who represented this “non-conformist, creative personality” (e.g., Albert Einstein, Pablo Picasso, Nelson Mandela, and Maria Callas). Figure  1.13 shows an example of a print advertisement picturing Albert Einstein (non-verbal communication style) in which Apple’s brand personality is also described verbally (verbal communication style). According to the current CEO, the message stemming from the “Think Different” campaign is still influential for the brand today (“Think Different is still very deeply embedded in Apple,” Cook, 2019). To determine the perception of brand personality among internal and external target groups, brand personality must be rationalised and made measurable. This measurement process is then conducted using brand personality scales. In recent years, numerous brand personality scales have been developed in scholarship and practice. These scales are based on findings from the field of personality psychology. According to these findings, human personality can be described in terms of five dimensions, or the Big Five (cf. Fisseni, 1998, p. 405 ff.). The Big Five are extraversion, agreeableness, conscientiousness, emotional stability, and openness (cf. McCrae & Costa, 1997, p. 514 f.). The first approaches to measuring brand personality were developed in 1957 by Wells et al., and then in the following years by Plummer (1984), Alt and Griggs (1988) and Batra et al. (1993). However, none of these approaches could be empirically proven. The most prominent—albeit heavily criticized—approach to date was advanced in 1997 by Jennifer Aaker with the Brand Personality Scale (BPS). Aaker likewise identifies five

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Fig. 1.13   Ad motif of the Apple “Think Different” campaign (Apple, 1997)

dimensions of brand personality: sincerity, excitement, competence, sophistication, and ruggedness. The BPS has been the subject of many studies in recent years which have aimed to prove its general validity—thus far without success. It has instead been shown that the BPS is not applicable across all countries or product categories (cf. Aaker et al., 2001; Ferrandi et al., 2000, among others). The scale developed by Geuens et al. (2009) to measure brand personality across countries and industries is likewise only convincing to a limited extent, as its measurement of brand personality is highly condensed and very abstract (cf. Czuba, 2021). This kind of approach does not do justice to the diverse options available for shaping brand personality. More recent approaches attempt to measure brand personality using C. G. Jung’s twelve human personality types as a foundation. The psychoanalyst Jung developed these types based on extensive study of images, myths, and symbols in a variety of cultures. His archetypes describe specific traits embodied in every human being, which are expressed differently and to varying degrees in each individual and can be easily stored in the memory as images with strong emotional components. These human archetypes were adapted by Mark and Pearson in 2001 to capture the personalities of brands. The resulting twelve brand personality types (the innocent, the explorer, the wise, the hero, the outlaw, the magician, the normal type, the lover, the fool, the nurturer, the creator, and the ruler) offer a promising basis for the development of powerful brand personality

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scales that hold true across industries and cultures, as they are clearly represented and well-anchored in psychology (cf. Burmann & Varvier, 2021). Because there are no convincing universal brand personality scales, many brand personality scales have been developed for specific countries and/or product categories (cf. Schade et al., 2014). To give a few examples, the following illustrates two specific brand personality scales: Background Information Schade et al. (2014) developed a specific brand personality scale for professional sports clubs in Germany using a multilevel approach that consists of four dimensions (cf. Table 1.5). The content overlap with Aaker’s BPS is small, given that their only shared characteristics are “cheerful,” “family-oriented,” and “hard-working”. Through their brand personalities, sports clubs can build an emotional bond with their target groups in an individual way. The “rebellious” characterization, for example, offers sports “underdogs” a good opportunity for differentiation. FC St. Pauli (German professional football club from Hamburg) communicates this personality dimension via a “rebellious” communication style and the use of the skull and crossbones symbol, which establishes a differentiated brand image (cf. Schade, 2012, p. 187 ff.; Fig. 1.14). Table 1.5  Brand personality scale for professional sports clubs in Germany (Schade et al., 2014) Brand personality dimensions

Extraversion

Rebellious

Open-mindedness

Conscientiousness

Brand personality traits

Traditional

Rebellious

Open-minded

Hard-working

Faithful

Bold

Tolerant

Fighting spirit

Sociable

Alternative

Sophisticated

Diligent

Family-oriented Humorous Cheerful

Fig. 1.14   Fan article of FC St. Pauli. (FC St. Pauli Shop, 2017)

Socially responsible Tough

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Herbst and Merz (2011) developed a specific brand personality scale for industrial B2B brands in Germany. This scale consists of 39 characteristics that are summarized in three dimensions (performance orientation, sensation, and credibility). This scale, too, only overlaps with Aaker’s BPS in a few instances. The lack of overlap emphasizes the need for specific brand personality scales to be developed for the B2B sector as well. The emergence of the “sensation” dimension proves that emotional aspects are also relevant for B2B brands (cf. Herbst & Merz, 2011, p. 1079). An international study of freight carriers conducted by the markstones Institute of Marketing, Branding & Technology at the University of Bremen in 2014 revealed this emotional component. In the five countries studied—Germany, France, England, Poland, and Russia—the study showed that, in terms of statistically relevant explanations for behaviour, emotions are responsible for around 40% of the purchasing decisions of freight carriers when buying truck trailers.

1.7.6 Brand Offer The decision as to what basic types and forms of products and/or services a brand offers is primarily contingent on its brand competencies. The concrete design of products and services on a technical and functional level is usually carried out by the brand’s research and development department or specialized service providers. The brand offer determines how consumers are able to use the brand. The design of this component of a brand’s identity establishes which functional benefit(s) the brand should offer to its customers. It is crucial to make a clear distinction between decisions regarding the company’s basic type of brand offer and its detailed product policy (cf. Meffert et al., 2019, p. 393 ff.). The Dyson brand exemplifies this distinction. The original product with which James Dyson founded his company in the 1980s was a revolutionary vacuum without a bag. However, in terms of offer type, the brand offer at Dyson is not limited to bagless vacuums. Instead, according to James Dyson, his brand’s typical offer consists in making existing products of all kinds better. Rooted in this aspiration, many other products have emerged in a variety of categories, far beyond the Dyson series of cordless and bagless vacuums. The Sea Truck, for example, is an efficient means of water transport. The Ballbarrow, a wheelbarrow with a rubber ball instead of a wheel, became the market leader in England within just three years (cf. Dyson, 2017). The Dyson product range also includes innovative hair straighteners, combined wash-and-dry hand dryers for use in restaurants, fans without propellers, air cleaners, and lights (cf. Fig. 1.15). In summary, when it comes to the concrete expression of brand identity, the importance of the six components of identity can only be assessed on a case-by-case basis. Aaker and Joachimsthaler (2000, p. 57) developed four questions to help identify which components of identity are particularly important in individual cases: 1. Does It Help to Differentiate the Brand from Its Competitors? The question of differentiation potential plays the most important role in shaping a brand’s identity. Components of identity that offer high potential for differentiation in the perception of internal and external target groups should always be emphasized.

1.7  Conceptual Design of the Brand Identity

First vacuum

Current vacuum

45

Sea truck

Hand washer and dryer

Ballbarrow

Fan

Workplace lights

Fig. 1.15   Selected products from the company Dyson (Dyson, 2021)

2. Does it resonate with the customer? The more an individual component of identity makes a positive contribution to the brand’s image and the more relevant it is to buying behaviour, the more the component should be emphasized. 3. Does it energize employees? Components of identity should be able to motivate brand employees. The more power an individual component of identity has to motivate, the more central it should become to the management of the brand. Here, brand vision (or “purpose”) is often the most important component. 4. Is it believable? The fact that the credibility of an individual component of identity can come under question underlines the relevance of brand authenticity to successful brand management (Sect. 1.9). Only an authentic brand can have a lasting influence on the behaviour of internal and external target groups. The more an individual component of identity contributes internally and externally to the perceived authenticity of a brand, the more it should be emphasized within brand management. Ultimately, the importance of individual components of identity also depends on the product category under consideration (cf. Schaefer, 2006, p. 122 ff.). Other essential determinants that shape brand identity include the structure of the target group, the type

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of central brand benefit, the brand identity of the main competitors, the structure of the company’s brand portfolio, and the relevant legal, technological, and social frameworks.

1.8 Conceptual Design of Brand Image The term brand image refers to a consumer’s subjective perception of the brand developed through the decoding of all signals emitted by a brand. Through this process, consumers evaluate a brand’s suitability for satisfying their needs.  Brand image is a multi-dimensional attitudinal construct (cf. Foscht et al., 2015, p. 126; Trommsdorff, 2011, p. 133) that represents the perception of a brand in the minds of external stakeholders. The first subject to cover here is the concept of brand image. Subsequently, we will examine the storage of brand images in human memory and, building on this science, we will consider how a brand’s image is formed from a neuroeconomic perspective. Neuroeconomics aims to explain the behaviour of consumers by examining neural connections in the brain (cf. Kenning, 2014). In contrast to classical approaches used to explain consumer behaviour (cf. e.g., Kroeber-Riel & Gröppel-Klein, 2013), neuroeconomics combines psychological, neurological, and economic findings to explain the mental processes that take place in the brains of consumers (cf. Bielefeld, 2012).

1.8.1 Purpose of Brand Image A prerequisite for the formation of a brand image is brand awareness. Brand awareness refers to a person’s ability to remember a brand mark (e.g., wordmark logo, pictorial mark logo)—expressed by the term brand recall—or to recognize a brand’s logo again after supportive auditory and/or visual cues and assign this knowledge to a product category—termed brand recognition (cf. Aaker, 1991, p. 61). Brand recall is synonymously referred to as unaided brand awareness and brand recognition as aided brand awareness. As brand awareness is a prerequisite for the formation of an image in the mind, it is a precursor to, not a component of, brand image. In the context of identity-based brand management, brand image is split into two main components (cf. Fig. 1.16): the subjectively perceived brand attributes and the brand benefits (cf. Vershofen, 1940; Keller, 1993, p. 17). Brand attributes are descriptive characteristics of a brand and represent a person’s knowledge about a brand. The degree to which the needs of a customer are satisfied by a brand’s attributes (as those attributes are perceived subjectively) is known as the brand benefit (cf. Perrey, 1998, p. 12).

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Brand identity Functional and nonfunctional brand benefits

Brand image Brand attributes Offer Vision Personality Values Competences Origin

Brand awareness Brand identity as internal selfimage of the brand

Brand image as external image of the brand

Fig. 1.16   Components of brand image

Brand benefits can be divided into functional brand benefits and non-functional brand benefits. Functional brand benefits are closely related to the technical and functional characteristics of the products or services the brand offers. In contrast, non-functional brand benefits emerge when a brand creates an additional benefit for the customer that is detached from its functional benefits (e.g., aesthetics or prestige). Functional brand benefits are mostly linked to basic human needs or safety-related needs and satisfy a consumer’s desire to solve an acute problem (e.g., transport from A to B by renting a car) or to prevent future problems (e.g., taking out car insurance to cover financial damage in the event of an accident). A brand’s ability to deliver functional benefits is primarily based on the physical and/or technical quality of its product or services. The brand’s perceived price-performance ratio is also considered a functional benefit (cf. Keller, 1993, p. 4; Stolle, 2013, p. 250 ff.). However, it has become almost impossible for a brand to achieve differentiation through functional benefits alone, as product life cycles are becoming ever shorter, and the speed of imitation ever faster. Even technologically outstanding innovations usually only result in a short period of differentiation from competitors. Especially in mature and saturated markets, therefore, non-functional benefits are really important for achieving brand differentiation (cf. Burmann et al., 2007, p. 10). Non-functional brand benefits are related to the feelings of a consumer when using products or services (cf. Keller, 1993, p. 4). For example, aesthetic design can satisfy a desire to behold beauty—in the case of a car, for instance, there can be beauty in the design of the autobody and the interior. In addition, when a brand offer is specially designed, it can satisfy hedonistic needs for enjoyment or stimulation (e.g., in a car, a high-quality audio system or intuitive connection with mobile devices). Non-functional

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brand benefits can also satisfy a desire for external appreciation or group membership (cf. Stolle, 2013, p. 262). To offer these benefits, a brand must authentically stand for certain values (e.g., “social responsibility”) or personality traits (e.g., “glamorous”) that match the target group’s actual self-concept—“how one sees oneself”—or its ideal selfconcept—“how one would like to be”. Then, using the brand, consumers can demonstrate these values and personality traits in their social environment and thus bolster their self-esteem (cf. Sirgy, 1985). The importance of non-functional brand benefits is exemplified by Apple. Apple has succeeded in linking its brand to non-functional brand benefits that are relevant to customers, thus differentiating itself from competitors who offer functionally similar products. To satisfy users’ desire for beautiful objects, all Apple brand products are designed according to a “simplicity design philosophy” (cf. Shelley, 2015). As explained in Sect. 1.7.5, Apple also stands for a “non-conformist, creative personality.” By using Apple products, consumers can portray these personality traits to the outside world, thus satisfying their desire for external esteem and group affiliation.

1.8.2 Stimulus processing in the brain to create brand images Brain research (cf. e.g., Roth, 2003) has shown that all sensory impressions of brands are stored in the brain as neural networks (i.e., interconnected nerve cells) (cf. Bielefeld, 2012, p. 152 f.). All facts, experiences, evaluations, interactions, and emotions that are subjectively linked to a brand are stored in these neural networks. The part of this neural network that can be verbalized by the consumer is called the associative brand network (cf. Spitzer, 2008, p. 243). In addition to the associations controlled by brand managers, consumers incorporate further brand-related information into their associative brand networks, including episodic memories (short stories about personal experiences with a brand) (cf. Bielefeld, 2012, p. 135 f.). When stored in the memory, a brand’s image is divided into the two main components explained in Sect. 1.8.1—attributes and benefits. These are arranged hierarchically within an associative brand network. On the first level, consumers identify attributes that they associate with the brand. These attributes are linked to functional and/or non-functional benefits in the next level. An example of these connections is depicted in Fig. 1.17 using the example of the McDonald’s brand. At the initial levels, the brand is associated with concrete attributes (e.g., products, such as “burger,” or an advertising figure, such as “Ronald McDonald”). These attributes can also be linked to each other (e.g., “Ronald McDonald” with “Happy Meal”). On further levels of the network, these concrete memory contents are linked with more abstract functional and non-functional benefits (e.g., products, such as “burger” and “fries” with benefits, such as “high quality”). These benefit associations can also be linked to each other (e.g., “high quality” with “enjoyment”).

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49

Speed

Happy Meal

Familyfriendly

Convenient

Ordering process

Ronald McDonald

Equipment

Good service

Advertising Fries Breakfast Vegetarian, salads, wraps Wide range

Attributes

Meat, fish, halal

Burger

High quality

Dessert Soft drinks

Enjoyment

Benefits

Fig. 1.17   Associative network using the McDonalds brand as an example. (Based on the results of a workshop with students from Macquarie University, Sydney 2020)

The importance of individual fragments of memory content within an associative brand network varies from consumer to consumer. The more important an association is for a person, the easier and faster it can be recalled. The subjective importance of a fragment of memory derives from its reward value, which corresponds to the degree to which it satisfies personal needs. Using McDonald’s as an example, this can be illustrated by looking at the benefit of the brand being “family-friendly”. For a consumer with children, this benefit is presumably significantly more important (high reward value) than for a consumer without children (low reward value), as it satisfies the personal needs of child caregivers more than non-caregivers. As a result, the corresponding associations (e.g., “Ronald McDonald,” “Happy Meal,” and “family-friendly”) are likely to be more quickly and easily retrieved by a consumer with children than one without children. The part of a brand network associated with a high degree of satisfaction of personal needs—and thus a high reward value—is relatively small, and it alone is directly recalled by a consumer when making a purchase decision (cf. Bielefeld, 2012, p. 158 f.).

1.8.3 Storing Brand Images in Memory From a neuroeconomic perspective, strong brands are characterized by extensive and highly consolidated neural networks. This connection between the brand and the consumer can also be described in terms of the familiarity of the consumer with the brand. When buying a branded product, brand familiarity gives consumers confidence that they

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will receive the reward they subjectively consider to be most important (cf. Birbaumer & Schmidt, 2006, p. 617). The fulfilment—or else absence—of this expected reward is stored in the consumer’s memory. Rewards experienced in the past motivate the consumer to select a brand again (cf. Roth, 2007, p. 149 ff.). The process of storing information associated with the formation of a brand image is shown in Fig. 1.18. Information processing begins with the first perception of brand stimuli. These are pre-processed in the ultra-short-term memory. Here, the stimulus disintegrates without being consciously perceived– provided it is noticed very briefly (no longer than 50 ms) and is not the focus of attention, or else superimposed by stronger stimuli or classified as unimportant (cf. Roth, 2003). If, on the other hand, a stimulus is sufficiently strong, priming takes place. Here, the stimulus activates pre-existent memory content, thus facilitating somewhat easier processing. In this way, priming allows consumers to perceive a stimulus faster if it has been presented repeatedly, for instance when searching for a brand they are only vaguely and fleetingly familiar with on a supermarket shelf (cf. Roth, 2003). If the effect of a brand stimulus continues to increase, perceptual processing of the stimulus takes place. This processing is initially limited to the perception of the formal brand design—without activation of the entire neural brand network. The brain compares the stimulus with the information stored in its memory, enabling recognition of the brand

Memory systems

Neuropsychological processes

Brand effects

7. Autobiographical memory

7.1 High importance of brand associations for the identity of consumers (self-reference)

7.2 Strong personal identification with the brand and high brand attachment

6. Episodic memory

6.1 Events and experiences in time and space (e.g., habits)

6.2 Symbolically communicated value experience

5. Emotional memory

5.1 Emotional significance

5.2 Symbolic benefit associations and emotional charge

4. Semantic memory

4.1 Cognitive significance

4.2 Recognition of the brand promise

3. Perceptual memory

3.1 Perceptual processing

3.2 Passive (visual) brand recognition (aided brand recognition)

2. Priming

2.1 Priming effect: "faciliation"

2.2 Pre-conscious "familiarity" as a result of repetition

1. Perception of brand stimuli (ultra-short-term memory)

1.1 Subliminal, not consciously processed stimuli

1.2 Stimuli disintegrate immediately after being perceived in the ultra-short-term memory

Fig. 1.18   Process of information processing, memory systems and brand effects. (Closely based on Bielefeld, 2012, p. 213)

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51

through a recognition of the typical packaging design or logo for example. In a concrete sense, this is aided brand recognition. The next level of processing occurs in semantic memory. At this level, the consumer perceives the name and cognitive meaning of the brand. The cognitive meaning includes, for example, the brand’s products, characteristics, and price. This processing level involves a purely rational understanding of the brand (cf. Roth, 2003, p. 91). Emotional interpretation of the recognized brand takes place at the next level of stimulus processing, in emotional memory. To generate this emotional interpretation, brand stimuli are evaluated and weighted based on the emotions stored in memory. This step is crucial for brand management, as the brand becomes emotionally charged when the brand stimuli are linked with stored emotions. The brand promise, previously perceived on a rational level, is transformed into emotional benefit associations, endowing the brand with a higher reward value for the consumer (cf. Bielefeld, 2012, p. 216). When a brand is used repeatedly, this information is connected in episodic memory to form stored behaviour patterns (action sequences). If the brand is used repeatedly on regular occasions, such as using the same cosmetic brand daily in the morning facial care routine, this behavioural habit is also connected with the other brand associations. A brand attains the highest level of emotional relevance when it is endowed with autobiographical meaning—impacting the consumer’s self-image—and is stored in autobiographical memory. As a result, the benefit-related associations with the brand become connected to the consumer’s personal identity, leading to strong identification with the brand (Brand attachment Sect. 2.2.2). This is especially applicable to brands that are important to the consumer in the aspiration for prestige, recognition, or self-reward (cf. Bielefeld, 2012, p. 217).

1.8.4 Neuroscientific Implications for Identity-Based Brand Management Firstly, it is important to note that brand images are created in the brain when consumers compare perceived brand stimuli with the content of their memory. As a result, consumers generally do not perceive brands in the way that brand management intends. In many cases, the brand image generated in the brain of the consumer diverges from the intended brand identity and the brand promise. To ensure the prevalent perception of the brand is, nonetheless, as consistent as possible, the brand’s conceptual design must be reassessed frequently, paying special attention to the emotions and feelings the brand intends to communicate. The distinction between emotions and feelings is important here. Even though the two terms are often used synonymously in ordinary language, from a neuroscientific point of view, they refer to two different things. Emotions as physical states of arousal are triggered upstream of feelings, and emotions elicit feelings. Emotions are not directly connected to the object that triggers them. Rather, they are routine processes. The six

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widely recognized universal emotions are fear, happiness/joy, sadness, anger, surprise, and disgust (cf. Damasio, 2013, p. 67 ff.). The emotions that an object evokes— for example, the joy of a cool glass of beer of a particular brand on a warm summer evening—are experienced by humans as a feeling (consciously and verbally) and neurally linked to this object. In memory, the feeling is stored in connection with the object (the brand of cool beer) and, if necessary, recalled later. The emotion, on the other hand, is not remembered. The feelings elicited in the consumer by a brand form the core of the brand experience and, as a differentiating feature and purchase driver, are the most important design lever for identity-based brand management. All the information about a brand—e.g., the brand’s logo, packaging, products, and jingle—is not perceived and stored as a whole by the consumer. Rather, this information is broken down into the smallest units of information, perceived and then assembled and stored in the form of associative, neural brand networks. If a brand’s formal design features are recognizable as typical of the brand, the neural brand network will be consolidated in the mind of the consumer more successfully. The more consolidated the network, the more behaviourally relevant—and thus stronger—the brand becomes in the mind of the consumer. The opposite is also true: if there is a lack of consistency and coherence in the brand design, the brand weakens. Frequent changes to the design, or inconsistency at the various brand touchpoints, increase in the number of neural sub-networks needed for brand perception, as a separate network must be formed for each variant of the design. This prevents the consolidation of a single core network, thus weakening the representation and behavioural relevance of the brand in the brains of consumers (cf. Bielefeld, 2012, p. 390). From a neurological point of view, the extent to which a brand is anchored in the neural network of a consumer can be understood as brand strength or, consequently, the behavioural relevance of a brand. Strong brands secure an abundance of synaptic connections (a large neural network). Neural brand networks are strengthened when a brand is perceived repeatedly and certain patterns of behaviour become associated with the brand. Information is stored about an individual’s own behaviour (e.g., purchase, use, and occasions for use), as well as experiences tied to use (e.g., affirmation by third parties). In every subsequent similar situation, this consolidated brand network is re-activated and thus exerts control over the behaviour of the consumer (cf. Bielefeld, 2012, p. 393). These neuroscientific findings are extraordinarily valuable because they impart a deeper understanding of consumer behaviour. Even so, the findings are not especially radical—rather, they confirm and provide a slightly more detailed insight into previously accepted relationships. The existence of a connection between neural processes and behaviour was first investigated in the field of psychobiology in the 1970s (cf. Birbaumer, 1975, p. 3). At that early date, researchers recognized that stimuli are perceived through processes of pattern matching—the comparison of new stimuli with previously stored knowledge—and that information is stored in neural cell clusters (cf. Birbaumer, 1975, p. 147). The vital importance of feelings in purchasing decisions has

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also been understood in marketing for over 50 years, but these neurobiological analyses prove the theory in a well-founded and transparent way. The popularity of neuroeconomics is partially due to technological developments which have allowed researchers to visualize processes in the brain. These imaging procedures—e.g., functional magnetic resonance imaging (fMRI)—allow researchers to clarify which regions of the brain are activated by certain stimuli. Where brands are concerned, however, the findings from these studies should be viewed with great caution. Firstly, the resolution quality of imaging procedures remains insufficient to provide clear evidence, and medical knowledge about the functioning of the human brain remains limited. Secondly, imaging can be greatly influenced by the user (cf. Vul et al., 2009), and many self-proclaimed experts provide factually incorrect, “short, puffery” interpretations of imaging analyses (cf. Bielefeld, 2012, p. 240 ff.; Kenning, 2014, p. 124 f.). In summary, in contrast to brand identity, brand image cannot be directly controlled through brand management. Rather, brand image is an indirect result of the activity of brand management. Furthermore, brand image is influenced by consumers (e.g., recommendations from influencers) and competitors, as well as social, political, and technological changes (e.g., the spread of streaming offers due to more powerful mobile data transfer).

1.9 Authenticity in Identity-Based Brand Management 1.9.1 Relevance and Object of Brand Authenticity Today, brand managers are faced with the challenge of a cross-industry loss of trust in brands (cf. Bialek, 2019; Craft, 2019). As a result of banking and financial crises, fraud scandals in the automotive industry, and tax evasion by many global corporations—especially corporations from Silicon Valley (cf. United Digital Group, 2017)—consumer trust in brands is declining, thus undermining the stability of brand loyalty (cf. Burmann & Barth, 2020, p. 598 f.). This development has led to a growing interest in the concept of brand authenticity, which is considered the most important tool in building brand trust (cf. Adomeit, 2020). In addition to damaging trust in a brand, a lack of brand authenticity also leads to a reduction in purchase intention and negatively influences brand image (cf. Gilmore & Pine II, 2007, p. 5). Authenticity has therefore become an increasingly essential feature for brand differentiation in recent years (cf. Adomeit, 2020; Dietert, 2018; Schallehn et al., 2014). For a brand to be perceived as authentic, the brand promise must be fulfilled at all brand touchpoints (cf. Fig. 1.19). When this is true, every aspect of the brand’s behaviour aligns with its identity.  The authenticity of a brand is the degree to which the brand’s behaviour is causally linked to brand identity (cf. Schallehn, 2012, p. 38).

54

1  Basics of Identity-Based Brand Management Brand image

Brand identity

Vision

Values

What do we believe in?

Competences

What are we capable of?

Offer

How do we communicate?

What are we marketing?

Personality

Brand promise

Brand authenticity as the degree to which brand behavior is causally linked to brand identity

Brand needs Brand attributes Brand touch points (Customer journey)

Brand behavior

Brand benefits

Where are we going?

Offer Vision Personality Values Competences Origin

Brand experience

Origin

Where do we come from?

Self-image of internal target groups

External image of external target groups

Fig. 1.19   Brand authenticity in the model of identity-based brand management

This understanding of brand authenticity focuses on the actions of the employees working for and with a brand. Brand employees’ motivations for action can be intrinsic or extrinsic. Extrinsic motivation is determined by external environmental stimuli. When extrinsically motivated, brand employees’ activity is a reaction to new environmental conditions. They orient their behaviour opportunistically, taking advantage of new market profit opportunities. For example, competitors may be copied without reflection, and short-term trends integrated into the brand. Intrinsic motivation, on the other hand, describes behaviour rooted in and driven by a brand’s self-image (brand identity). For consumers, it is often difficult to directly assess the motivations of brand employees. Instead, consumers indirectly form their judgments regarding the authenticity of a brand, comparing the officially communicated brand promise with their personal experiences at the brand touchpoints. Information communicated by third parties (e.g., media, friends, and influencers) about the brand is also integrated into the consumers’ own judgment of authenticity. According to the identity-based understanding of brands, brand authenticity has two dimensions: integrity and originality. A valid, cross-industry and cross-brand scale was developed by Adomeit (2020, p. 187 ff.) to measure these two dimensions. The scale was primarily shaped by studies written by Schallehn (2012) and Dietert (2018), and it was validated and tested for practicality in a study of 18 brands from six industries. The study demonstrated that due to its simplicity, the scale can be used effectively in practice. Figure  1.20 illustrates the scale’s dimensions and shows the strong effect of brand authenticity on the global image of a brand, brand trust and purchase intention. The dimension of integrity concerns the dominance of intrinsically motivated brand behaviour and is defined as “the avoidance of brand exploitation by aligning

1.9  Authenticity in Identity-Based Brand Management

55

brand behaviour with fundamental brand values and beliefs” (Dietert, 2018, p. 85). Two important components of the dimension of integrity are coherence and continuity. Coherence refers to a specific point in time, describing how well consumers’ experiences at the various brand touchpoints fit together (cf. Adomeit, 2020, p. 64.). Continuity refers to the extent to which the brand retains essential characteristics over an extended period (Schallehn et al., 2014, p. 194). The dimension of originality refers to the refusal to imitate other brands while designing a brand promise and is defined as the “perceived originality of the brand positioning” (Adomeit, 2020, p. 68).

1.9.2 Implications for Identity-Based Brand Management For a brand to be perceived as authentic, it must demonstrate integrity (including coherence and continuity) and originality. An example of a brand that consistently strives to maintain a high level of integrity across all its brand touchpoints is Tesla. The Tesla brand stands for an inner drive (brand identity) to accelerate the transition from conventional energy (combustion engines) to sustainable energy (e-cars) (cf. Tesla, 2021). In keeping with this brand identity, Tesla founder and CEO, Elon Musk, announced in 2014 that he would discontinue any patent suits against other car manufacturers who use the technologies developed by Tesla “in good faith.” The Tesla brand is convinced that they alone will not be able to produce enough electric vehicles to counteract the climate crisis, thus the brand sees the opening of patents as indispensable for achieving its goal. With this open-source philosophy, Tesla has accepted that in certain fields of application, it will not be able to differentiate itself from the competition through innovative advantages. Here, Tesla prioritizes the fulfilment of its brand values over the pursuit of profit (cf. Musk, 2014). Such decisions also demonstrate the high level of continuity in Tesla’s brand management strategy. At a presentation to investors in January 2014, Elon Musk

Coherence Integrity Continuity

0.73*

0.95*

Brand authenticity 2 (R = 80%**) 0.19* Originality

Global image*** (R2 = 90%**)

0.96*

Brand trust (R2 = 92%**)

0.81*

Purchase intention (R2 = 66%**)

* The coefficients of a structural equation analysis (shown here) can vary between + 1.0 and - 1.0 and show how strong (positive or negative) influences are – e.g., integrity on brand authenticity. All five coefficients shown here are significant with a probability of error of less than 1%. ** The coefficient of determination R2 indicates what percentage of the construct can be explained on the basis of the empirical investigation. *** Agreement with the items: I like the brand very much; the brand is great; the brand stands for fun and enjoyment.

Fig. 1.20   Dimensions and effects of brand authenticity. (Closely based on Adomeit, 2020)

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1  Basics of Identity-Based Brand Management

said: “Our goal when we created Tesla a decade ago was the same as it is today: to drive the world’s transition to electric mobility.” (Stringham et al., 2015, p. 86). Tesla also provides an example of how a brand might develop originality. Tesla’s brand identity is strongly influenced by ideas of sustainability. In keeping with this brand identity, Tesla’s first product was the Tesla Roadster, presented in 2008. As the first purely electric car, the Roadster was captivating, not only on account of its ecological advantages but also because of its sports car level performance. Following the Tesla Roadster, Tesla introduced its Model S sedan in 2012. Thanks to the Model S’s innovative design, impressive driving performance and very long-range, Tesla has succeeded in making waves in the e-mobility industry worldwide (cf. mobile, 2020). In terms of Tesla’s brand positioning, therefore, the brand can be viewed as extraordinary. Tesla’s cars are undoubtedly free of imitation, and it requires the buyer no effort to connect the brand’s products to the inner convictions and actions of Elon Musk—the human embodiment of Tesla’s brand identity. Tesla’s deeply authentic behaviour likely also explains the high level of trust among investors, resulting in its high market capitalization (stock market value). In February 2021, the Tesla brand (founded in 2003) had a higher market capitalization—642 billion €—than all other car manufacturers worldwide combined (see Freitag, 2021).

1.10 Management Process of Identity-Based Brand Management The management process of identity-based brand management shown in Fig. 1.21 assists in the planning, coordination, and control of all measures needed to build a strong brand. It consists of three sub-processes: strategic brand management, operative brand management, and brand control. These three sub-processes should not be understood as a one-time procedure. On the contrary, the ongoing results of brand control continually reveal areas for improvement in strategic and operative brand management, both of which must be perpetually adapted. Chapters 2, 3 and 4 of this textbook address these three steps in the process of identity-based brand management. Chapter 2 first deals in detail with strategic brand management, while Chap. 3 is dedicated to operational brand management. Chapter 4 discusses brand control, and the fifth chapter concludes with some special applications of identity-based brand management. SN Flashcards

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1.10  Management Process of Identity-Based Brand Management

2. Strategic brand management

2.2 Brand objectives 2.3 Brand positioning 2.4 Brand architecture 2.5 Brand evolution

3. Operational brand management

2.6 Brand budgeting

4. Brand control

1. Concept of identity-based brand management

2.1 Situation and identity analysis

Concretisation and integration: 3.1 Internal brand management: Enforcement and implementation of the brand identity in the organization

3.2 External brand management: Enforcement and implementation of the brand promise in all relevant markets.

4.1 Internal & external brand performance measurement

4.2 Identity-based brand valuation

Fig. 1.21   Management process of identity-based brand management

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Contents 2.1 Situation and Identity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Brand Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1 Objectives of Internal Brand Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1.1 Brand Citizenship Behaviour as a Behavioural Internal Objective. . . . . 2.2.1.2 Brand Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1.3 Brand Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 Objectives of External Brand Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2.1 External Behavioural Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2.2 Brand Attachment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2.3 Brand Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Brand Positioning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.1 Definition and Importance of Brand Positioning. . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.2 Process of Identity-Based Brand Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.2.1 Determining Target Groups and Competitors. . . . . . . . . . . . . . . . . . . . . . 2.3.2.2 Identifying Potential Benefit Dimensions Suitable for Positioning. . . . . 2.3.2.3 Selection of Appropriate Benefit Dimensions. . . . . . . . . . . . . . . . . . . . . 2.3.2.4 Formulation of the Brand Promise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.2.5 Communication of the Brand Promise. . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.3 Brand Repositioning as a Distinct Form of Positioning . . . . . . . . . . . . . . . . . . . . . 2.4 Brand Architecture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.1 Classification and Definition of Brand Architecture. . . . . . . . . . . . . . . . . . . . . . . . 2.4.2 Hierarchisation of a Brand Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.3 Strategic Design of Brand Architecture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.3.1 Designing the Vertical Dimension of Brand Architecture . . . . . . . . . . . . 2.4.3.2 Designing the Horizontal Dimension of Brand Architecture. . . . . . . . . . 2.5 Brand Evolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.1 Classification and Definition of Brand Evolution . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.2 Brand Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . © The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023 C. Burmann et al., Identity-Based Brand Management, https://doi.org/10.1007/978-3-658-40189-4_2

70 71 72 72 74 77 79 79 79 81 85 85 87 89 89 91 93 94 96 100 100 102 103 103 110 111 111 113 69

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2.5.2.1 Immediate Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.2.2 Skimming. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.2.3 Focusing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.2.4 Brand Migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3 Brand Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.1 Line Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.2 Category Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.3 Geographical Expansion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.4 Brand Licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.5 Co-Branding Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5.3.6 Autarky Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 Brand Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.1 Tasks of Brand Budgeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.2 Budgeting Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114 115 115 116 118 121 122 125 125 127 129 130 130 133 134

2.1 Situation and Identity Analysis An essential prerequisite of identity-based brand management is the sound analysis of a brand’s current situation. The first step is to carry out an identity analysis (self-image of the brand) rooted in the six components of brand identity (Sect. 1.7). To perform an identity analysis, various internal target groups should be interviewed—not only the marketing or branding department managers but also employees from all company levels and all functional areas. Undertaking a comprehensive internal survey is the only way to ensure that the brand promise is founded on an identity that all the internal groups can both support and perform. This is important as all employees of the brand must fulfil the brand promise through their behaviour (Sect. 1.4). Identity analysis is of the utmost importance for successful identity-based brand management. To illustrate, below is an identity analysis of an insurance brand (conducted by the University of Bremen). Researchers first conducted 75 personal, in-depth interviews with managers and employees from the head office and field staff to record the views of the various internal groups within this insurance brand. The aim of the interviews, using the six components of brand identity as a basis, was to capture the subjective views of the brand held by its managers and employees. The typical characteristics ascribed to the brand identity in the interviews formed the foundations of the subsequent quantitative survey. In an internal online survey of all the company’s managers and employees, researchers used closed questions to evaluate the extent to which the various identity characteristics shaped the insurance brand. Considering each of the six identity components, the answers were analysed to determine the characteristics that most strongly shape the brand (cf. Fig. 2.1). Beyond identity analysis, brand specialists must also carry out other analyses in order to successfully manage a brand. These further analyses stem from what is known in marketing as situation analysis (cf. Meffert et al., 2019, p. 165 ff.). External situation

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2.2  Brand Objectives

Vision

Becoming the #1 in service quality in the German insurance market

Personality

Down-to-earth, hardworking, honest, friendly, serious

Values

Partnership in working with clients

Competences

Very customer-oriented office and field service

Offer

Insurance allrounder for private customers and small commercial customers with high service quality

Origin

Rural roots, insurance association close to the people, only brandexclusive agents

Fig. 2.1   Result of the identity analysis of an insurance brand in Germany

analyses focus on capturing and understanding the needs of the target group and the perceived brand benefits compared to competing brands. They must also identify every brand touchpoint along the customer journey and examine the contribution of each individual touchpoint to the brand experience, as well as the costs that they incur. Internal situation analyses aim to capture the strengths and weaknesses of the organisation itself. These situation and identity analyses enable investigators to formulate a set of brand objectives.

2.2 Brand Objectives Brand objectives must be operational—that is to say, precisely formulated in terms of content, scale, timeframe, and segment. Only then are they suitable for the work of managing a brand, offering a good framework for later monitoring (cf. Meffert et al., 2019, p. 279 ff.). An appropriate brand objective, for example, is a five per cent increase (scale) in

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brand awareness (content) in the 30- to 59-year-old male target group (segment) within two years (timeframe) in Germany. Brand objectives often have a one-year time horizon and can usually be divided into economic and pre-economic (i.e., behavioural and psychographic) objectives. Economic brand objectives such as brand equity, customer equity, and customer acquisition and retention costs are closely linked to corporate objectives. The pre-economic behavioural and psychographic brand objectives need to be defined primarily for the employee target group (internal brand management) and the customer target group (external brand management).

2.2.1 Objectives of Internal Brand Management Just a few years ago, internal brand management (synonymously referred to as internal branding or behavioural branding; cf. Burmann & Piehler, 2016, p. 2) played a subordinate role in corporate practice. A company’s marketing department was almost exclusively responsible for the management of the brand, something that was primarily conceived of in terms of communication (“The advertising department at our company takes care of our brand”). The brand had little or no influence on any of the other functional areas in the company. This view of brand management has changed substantially. In many cases, employees have now become the only differentiating factor between brands. Employees now lend companies a competitive advantage where functional brand offers have become increasingly similar and often interchangeable. The concept of employer branding should be distinguished from internal brand management. Employer branding is focused on attracting potential employees, whereas the aim of internal brand management is to attend to current employees (cf. Böttger, 2012; Burmann & Piehler, 2013; Hoppe, 2018; Sect. 3.1). The central objective of internal brand management is to ensure that employee behaviour fulfils and aligns with the brand promise at all brand touchpoints along the customer journey. To achieve this, the brand promise—and the identity from which it derives—must be anchored in the minds of the internal target groups, and, ultimately, in their daily behaviour. When the promise communicated by the brand corresponds to the actual behaviour of brand employees, consumers start to develop trust for the brand as they perceive it as authentic.

2.2.1.1 Brand Citizenship Behaviour as a Behavioural Internal Objective  Brand citizenship behaviour (BCB) is defined as all employee behaviours that are consistent with the brand identity and brand promise and thus strengthen the brand (Piehler et al., 2015, p. 54). BCB plays a central role in brand management because a company’s brand identity is ultimately only “brought to life” through employee decisions and actions. This is

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particularly true in service-intensive industries, but it is not limited to employees who come into direct contact with customers. Gummesson (1987) coined the term “part-time marketer” for employees outside of the marketing and distribution sectors, stressing that they, too, have a major indirect influence on the customer experience, as they are responsible for the quality of the brand’s products and services. Internal brand strength is dependent on a combination of behaviours and therefore BCB is conceptualised multi-dimensionally. It comprises three dimensions: brand compliance, brand endorsement and brand development (cf. Piehler, 2011, 2018; Piehler et al., 2016, 2019). Brand compliance refers to the internal acceptance of rules and behavioural guidelines. This is reflected, among other things, in employee behaviour that complies with the established guidelines. Brand endorsement relates to employees’ conscious, self-initiated commitment to the brand. This involves recommending the brand to others and defending it against threats. Brand development is understood as behaviour intended to actively influence the brand’s further development and improve the customer experience. This primarily involves the further development of employees’ brand-related knowledge, skills, and abilities, as well as the development of ideas for new products and services. The efficacy of these three dimensions in successful brand management has been empirically proven in numerous studies (cf. Maloney, 2007; Piehler, 2011, 2018; Piehler et al., 2016, 2019). The external effects of BCB have been assessed by many researchers. In a survey of 481 employees from 93 German companies, Baumgarth and Schmidt (2010, p. 1255 f.) were able to empirically confirm that BCB has a positive influence on external brand value. Using internal company data from employee surveys (n = 265) and external company data from customer surveys, Baker et al. (2014) proved that BCB has a positive influence on service quality as perceived by customers. Through a survey of 523 employees and 1,046 customers of the Turkish Airlines brand, Erkmen and Hancer (2015) demonstrated BCB’s positive effect on consumers’ brand trust. It is common practice today for companies to manage not just one but several brands. This practice has consequences for internal brand management. For example, employees of Phaeton, a pricey product brand of the Volkswagen Group, were faced with the challenge of having to behave in line with the values of both the exclusive Phaeton brand and the mass-market Volkswagen brand. It is also not uncommon for employees to work for several brands (e.g., at BSH GmbH for the four household appliance brands Bosch, Siemens, Gaggenau and Neff). From a strategic perspective, therefore, each employee should be provided with clear instructions as to which brand’s behaviour (BCB) they should primarily focus. Ideally, the structural and procedural organisation of a company should be designed such that employees only work for one brand at a time (cf. Jentschke, 2016). BCB is determined by brand understanding and brand commitment. Based on several large employee surveys of German service companies, Piehler (2011, 2018) and Piehler et al., (2015, 2019) proved that brand understanding and brand commitment positively influence brand citizenship behaviour. The studies also demonstrated brand

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understanding’s positive effect on brand commitment (cf. Fig. 2.2). Studies by Xiong et al. (2013) and Piehler et al. (2016) arrived at similar results in international contexts.

2.2.1.2 Brand Commitment  Brand commitment is defined as “[an] employee’s emotional attachment to the brand” (Piehler et al., 2015, p. 55). Brand commitment has its original source in organisational research. As various empirical studies have shown, brand commitment is an important factor influencing BCB (cf. Burmann et al., 2009; King & Grace, 2010, 2012; Piehler et al., 2016, 2018, 2019; Piehler, 2018). Furthermore, it has been shown that employees with a high level of brand commitment have almost 40% fewer absenteeism days than employees with no brand commitment (cf. Gallup, 2019). Employees’ recommendation behaviour also differs significantly depending on their sense of connection to the brand (see Fig. 2.3). Brand commitment consists of two components: employee identification with the brand and employee internalisation of the brand identity (cf. Zeplin, 2006, p. 91 ff.). Identification refers to employees’ acceptance of social influences in order to feel a sense of belonging to the internal group of the brand, as well as their sense of being connected to the fate of this group. Identification is founded on the interpretation of the brand identity as a group identity (cf. Xiong & King, 2020). The stronger an individual employee’s identification with the group, the more strongly they perceive the organisation’s successes as their own successes (cf. Mael & Ashforth, 1992, p. 103). Strong

Brand relevance

Behavior relevance

Brand understanding

Brand knowledge

Brand compliance

+

Brand confidence

+

+

Brand citizenship behavior

Brand endorsement

Brand development

Identification Brand commitment Internalization

Fig. 2.2   Relationship between the outcomes of internal brand management, including the dimensions. (Based on Piehler et al., 2015, p. 55)

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2.2  Brand Objectives Employees with high brand commitment Employees with low brand commitment

80%

Employees without brand commitment

62% 60%

40%

20%

55% 38%

32%

10%

7%

0% Willingness to recommend products / services to friends and family

Willingness to recommend the employer to friends and family

n = 1,000 employees from Germany aged 18 and above

Fig. 2.3   Behavioural differences between employees with high, low, and no brand commitment. (Closely based on Gallup, 2019, p. 6)

identification encourages labour input, as employees have a sense of personal commitment to their co-workers and superiors. Internalisation describes the complete or partial adoption of the brand identity into the employee’s self-concept (the totality of an individual’s thoughts and feelings about themself; cf. Rosenberg, 1979, p. 7) (cf. Piehler, 2011; Xiong & King, 2019). This socialisation process consists of both formal communication and informal transmission of the brand identity through co-workers. Ideally, employees entering the brand organisation would already have a self-concept that was aligned with the brand’s identity. The brand commitment of an employee is the result of both components (cf. Fig. 2.4). In field “0,” no internalisation has taken place. Here, the employee’s personal identity conflicts with the brand identity. In this case, even when there is a high level of identification, brand commitment remains very weak. If the employee is indifferent to the brand identity, the level of internalisation is weak. If, at the same time, the employee enjoys a high level of identification with their co-workers, a moderate level of brand commitment can arise in the form of “blind loyalty” (Box 3). However, this level of brand commitment can shift quickly if there is a change in the object of identification—e.g., the CEO, direct supervisor, or team of co-workers. This phenomenon was revealed, for example, after the charismatic founder of the low-cost airline EasyJet, Stelios Haji-Ioannou, withdrew from the board of management (cf. Schmitt, 2003). When the levels of identification are low and those of internalisation are high, brand commitment emerges as a “moral obligation” (Box 4). The highest and most stable form of brand commitment is “balanced brand commitment” (Box 5), which is rooted in strong brand internalisation and profound brand identification.

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4 Identity congruence

Brand commitment as a moral obligation

High, balanced brand commitment

1 Identity indifference

3

Medium brand commitment as blind loyalty

Very weak brand commitment

0 Identity incongruence

5

2

No brand commitment

Weak brand commitment

Low

High

Identification with the group (other employees)

Fig. 2.4   Characteristics of brand commitment. (Based on Zeplin, 2006, p. 93)

As part of a study conducted by the University of Bremen in 2014, the level of brand commitment exhibited by a bank’s employees was measured using these two components (identification and internalisation). 357 employees from across all departments and levels within the company hierarchy were surveyed. Figure 2.5 shows the bank’s outcome analysed against the TOP and FLOP values of service brands in Germany (database of the markstones Institute of Marketing, Branding & Technology at the University of Bremen). The bank was close to the top value for identification but approached the flop value for internalisation. Overall, commitment to the brand was middling, and it emanated exclusively from the employees’ high level of attachment to co-workers and superiors. To sustainably increase brand commitment at this bank, the brand identity should be clearly defined and communicated to all employees using appropriate measures. This example demonstrates that brand commitment can only be accurately assessed when both identification and internalisation are taken into consideration. Employees of multi-brand companies are in contact with various brands. Consequently, these employees show multiple brand commitments, often to varying degrees (cf. Jentschke, 2016). In general, their commitment to product brands is higher than their commitment to the corporate brand. The “nested groups” theory explains this

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2.2  Brand Objectives Very high

Very low

1

2

3

4

5

6

Brand identification: "Sense of belonging to the group"

2.3

Measure of the employees' perceived sense of belonging to the group that constitutes the brand identity, and the employees‘ evaluation of this sense of belonging.

Brand internalisation: "The brand is like me" Measure of the congruence perceived by employees between their own identity and the brand identity

1.9

Bank

2.5

3.3

TOP value

3.8

3.5

FLOP value

Fig. 2.5   Characteristics of identification and internalisation among employees of a bank in Germany

phenomenon (cf. Lawler, 1992). According to this theory, different social groups are nested within each other (e.g., inhabitants of a city and inhabitants of a country). The sense of belonging an individual feels within subordinate social groups (e.g., inhabitants of a city) is in most cases higher than their sense of belonging within superordinate social groups (e.g., inhabitants of a country). This finding can be transferred to multi-brand companies, where employees usually show a higher level of commitment to the subordinate product brand compared to the corporate brand. Product brands are also more concrete than corporate brands, once again contributing to employees’ higher level of commitment to subordinate product brands.

2.2.1.3 Brand Understanding  Brand understanding is defined as “the employees’ comprehension of brand-related information” (Piehler et al., 2015, p. 55). Brand understanding is an important determinant of both brand commitment and BCB, as has been proven in various empirical studies (cf. Ngo et al., 2019; Piehler et al., 2016, 2019; Terglav et al., 2016; Xiong et al., 2013). Like BCB and brand commitment, brand understanding is multidimensional. Researchers have identified four dimensions (cf. Piehler et al., 2016, p. 1579 f.; Xiong et al., 2013, p. 350 ff.): (1) understanding of the relevance of the brand (brand relevance), (2) understanding of the relevance of one’s own behaviour (behaviour relevance), (3) knowledge of the brand (brand knowledge) and (4) knowledge of specific brand-compliant behaviours (brand confidence).

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First, brand management must develop an understanding among employees that the brand is important for the success of the organisation. This message does not yet concern the importance of a particular brand—instead, it pertains to a fundamental understanding of the connections between a brand, the behaviour of internal and external target groups, and the success of the company (relevance of the brand for success). BMW fulfils this step through its brand academy. First, BMW employees are taught about the relevance of brands for consumer behaviour in general. Only after that are they educated on the specific brand identity of BMW, along the dimensions of “innovation,” “dynamics,” and “aesthetics,” as well as the brand promise—“joy of driving”(cf. Burmann & Kranz, 2008). The second aspect of brand knowledge is understanding the high relevance of one’s own behaviour to the brand and its success. The role that individual behaviour plays in the success of the brand as a whole must be made clear to every employee (cf. Kimpakorn & Tocquer, 2009, p. 536). Knowing the relevance of their own behaviour contributes significantly to an employee’s motivation to behave in accordance with the brand promise. Empirical evidence has shown that employees of successful brands are very aware of their personal contribution to brand success (cf. de Chernatony & Cottam, 2006, p. 621). Comprehensive brand knowledge includes, first and foremost, an employee’s knowledge of the brand’s identity and its brand promise (cf. Murillo & King, 2019). If an employee does not have sufficient knowledge of their own brand, it is impossible to embed knowledge of specific brand-compliant behaviours. This is the most important aspect of brand knowledge. The challenge here is to translate the often-abstract brand promise into concrete actions for all employees at each workplace. Many brand promises initially offer a lot of room for interpretation as to how they should be reflected in daily employee behaviour. For instance, statements like “Wir lieben Lebensmittel” (“We Love Food”) by the German supermarket chain EDEKA are unspecific—they do not express how employees should demonstrate their “love” for food. Potential examples would be constant monitoring of expiration dates, paying special attention to hygiene, and offering expert advice at the meat, fish, and cheese counters. If brand communications include demonstrations of concrete employee behaviours, it must be ensured that these behaviours can also be implemented in reality. Internal Brand Management in the Context of City Branding The concept of internal brand management is not limited to the corporate context, it is also relevant in contexts such as cities, regions, and nations (place branding). Internal city branding is a new field of research in the realm of city brand management. In the past, scientific publications and the practice of city brand management primarily examined cities’ external target groups (e.g., tourists), whereas internal city branding focuses on the inhabitants of a city. Much akin to employees in companies, residents are not only the most important internal target group but also co-creators and important ambassadors of the city. Pursuing these ideas, Rößler (2019) has applied the concept of internal brand management according to Piehler (2011; cf. Fig. 2.2) to the city branding context. In this framework, the central

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behavioural outcomes are the residents’ intention to remain in the city and their city brand citizenship behaviour (CBCB). The latter is understood as all resident behaviours that are consistent with the brand identity and brand promise of the city, and therefore strengthen the brand of the city. In her empirical study (n = 442 residents of the city of Bremen), Rößler (2019) was able to prove that city brand understanding (the knowledge of specific city brand-related information) and city brand commitment (the extent of a resident’s psychological attachment to the city brand) significantly influence CBCB. There was insufficient evidence of a direct correlation between city brand satisfaction and CBCB. The study showed that both city brand satisfaction and city brand commitment have a positive influence on residents’ intention to remain in the city. Rößler’s study (2019) proved that the concept of internal brand management stemming from the corporate brand context is also applicable in the context of city branding.

2.2.2 Objectives of External Brand Management 2.2.2.1 External Behavioural Objectives The most important behavioural objective of brand management is external brand strength—the brand’s relevance to the behaviour of external target groups. Behavioural relevance refers to purchasing and/or communication behaviour—for example, regularly purchasing the brand (brand loyalty), accepting a premium price for the brand, or recommending the brand. The internal reflection of external brand strength is brand citizenship behaviour, thus BCB can also be interpreted as internal brand strength. These behavioural objectives are preceded by psychographic objectives, such as brand awareness, brand image, customer satisfaction (cf. Skala-Gast, 2012), purchase intention, and recommendation intention (cf. Nee, 2016). Due to their potent effect on purchasing behaviour, brand attachment (cf. Kleine-Kalmer, 2016) and brand trust (cf. Hegner, 2012) are two central objectives of identity-based brand management. 2.2.2.2 Brand Attachment The term attachment derives from psychology, where it is used to describe the strong emotional bond between two people (cf. Bowlby, 1979). Naturally, a person can feel intensely attached not only to other people but also to objects, such as places or brands (cf. Thomson et al., 2005, p. 77 ff.). If an individual is strongly attached to a brand, this usually leads to regular repurchasing over a long period, even if the buyer is dissatisfied with the performance of the brand offer (cf. Kleine-Kalmer, 2016, p. 65 f.; Lienemann, 2021, p. 118 ff.). For example, a comprehensive empirical longitudinal analysis by Skala-Gast demonstrated that the repurchase of Mercedes-Benz, BMW and Audi branded goods was completely independent of customer satisfaction. Satisfaction thus cannot explain the future purchase of these three brands (cf. Skala-Gast, 2012, p. 145 ff.). In contrast, Park et al. (2010) proved in a study of brands from various industries (including Apple and Nike) that repurchasing behaviour and share of wallet (percentage of expenditure a consumer spends on a particular brand in a product category) are very

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strongly influenced by brand attachment. Similarly, Kleine-Kalmer was able to prove in her study of 4,548 Facebook users and numerous brands (consumer goods, automobiles, and gastronomy) that brand page attachment can account for 64% of user reactions to brand pages on Facebook (cf. Kleine-Kalmer, 2016, p. 192; Sect. 5.3). Lienemann also showed that the behaviour of followers of social media influencers (SMI) on Instagram is largely determined by their attachment to the SMI (cf. Lienemann, 2021, p. 140). If the level of attachment to a social media influencer is low, the collaboration of a brand with that influencer can have a negative impact on the purchasing behaviour of consumers. Conversely, Lienemann demonstrated that social media influencers whose followers are highly attached to them could successfully advertise almost any brand on their Instagram page. Even if a promoted brand did not match the influencer (low brand fit), a brand endorsement by the SMI had a strong positive effect on the purchasing behaviour of the influencer’s followers (cf. Lienemann, 2021, p. 131 ff.; Sect. 5.3). High brand attachment is the result of a stable parasocial relationship between individuals and brands in which brands are perceived as legitimate, good, “flesh and blood” friends (cf. Fournier et al., 2015). In her empirical study, Hiddessen (2021) revealed that parasocial relationships between followers and SMIs positively influenced the image of a promoted brand. In Hiddessen’s study, the development of a parasocial relationship was dependent on whether the SMI and their followers interacted on Instagram, and if so, how intensively (cf. Hiddessen, 2021, p. 206; cf. Ch. 5.3). Due to its immense behavioural relevance and predictive value, brand attachment is the most important psychographic objective in identity-based brand management. In the literature, authors have offered various approaches to defining and conceptualising brand attachment (cf. Kleine-Kalmer, 2016, p. 57 ff.; Lienemann, 2021, p. 73 ff.). In recent years, the approach proposed by Park et al. (2010) has prevailed. The authors conceptualise brand attachment two-dimensionally and define the term as follows:  Brand attachment is defined as “the strength of the bond connecting the brand with the self. […] Two critical factors reflect the conceptual properties of brand attachment: Brand-self connection and brand prominence” (Park et al., 2010, p. 2). Brand-self connection describes the importance of a brand for a consumer’s self-concept and can arise in two ways. Firstly, the brand can reflect the pre-existing identity of a consumer. This can occur, for example, when an outdoor brand stands for “naturalness, risk-taking and courage.” By wearing this brand’s products, the customer can express their own identity as a person who leads a natural, risk-taking, courageous lifestyle (cf. Kleine-Kalmer, 2016, p. 63). Brand-self connection can also arise when a brand helps the consumer achieve their personal goals. For example, a particularly high-quality pair of climbing shoes from an outdoor brand may enable a person to climb a formidable mountain, thus helping them to fulfil a dream and increase their self-esteem.

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Brand prominence expresses how present a brand is in a consumer’s memory. Brand prominence is fundamental for measuring brand attachment, as it reveals the true strength of the consumer’s connection with the brand. Even when there is a strong connection between the brand and the consumer’s self-concept, if the brand is not prominently anchored in the consumer’s memory and able to be quickly retrieved, the level of brand attachment will be low.

2.2.2.3 Brand Trust Another important prerequisite for building a strong brand is consumer brand trust (cf. Burmann & Barth, 2020, p. 598 f.). Influenced by the economic crisis of 2008, numerous subsequent brand scandals, and consumers’ increasing uncertainty linked to the Covid pandemic, maintaining brand trust has become an increasingly challenging aspect of brand management. Brand trust is also an important differentiator: in a study with 1,026 respondents in Germany, TNS Infratest (2009) demonstrated that trust is an important driver of brand differentiation. This is especially true, for example, in the automotive sector. The study found that, although car brands in Germany are known for their technical quality, this does not have the same differentiating power as trust. In view of this finding, the Volkswagen Group’s fraud scandal has been particularly destructive. As a result of its unethical behaviour, the company has given new competitors such as Tesla an advantage in the realm of trust and forfeited an effective means of differentiation. In an international study, Hegner (2012) also proved that brand trust has a very strong effect on the buying behaviour of consumers across cultures and countries (cf. Hegner, 2012, p. 248). Despite the high relevance of brand trust, in practice, companies unfortunately still need to act. Annual studies conducted by Sasserath Munzinger Plus make this evident. The consulting company’s annual survey concerning brand trust, conducted since 2008, has shown that the average level of brand trust across all brands surveyed lies around just 40% (cf. Sasserath Munzinger Plus, 2021). In the 2020 study, dm (a German drugstore brand) and Miele (a German appliance brand) achieved the highest values, at 73% and 70% respectively (cf. Fig. 2.6). The immense importance of trust for brand success is no longer disputed in academia (cf. Chaudhuri & Holbrook, 2001; Kenning, 2003; Li et al., 2015; Portal et al., 2019; Veloutsou et al., 2013). In practice, however, this finding is only slowly trickling into the awareness of companies. Various scandals involving Deutsche Bank, for instance, illustrate that a massive loss of trust reduces a company’s perceived legitimacy in society and thus its economic profitability (cf. Fichtner et al., 2016; Bartz & Clausen, 2015, p. 30 ff.). With this in mind, Pampers’ management posted on Facebook as part of a 2010 product recall campaign: “TRUST: To those of us who work at Pampers, trust is more than a word. It’s our mission. Parents trust us with their babies, and that is a responsibility that we take to heart. For nearly 50 years, we’ve worked with parents and babies to continually improve the way our diapers wrap babies in comfort and protect

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Top 10 Flop 10

2020 dm Miele PayPal Rossmann Samsung Nivea Edeka ALDI Nord/Süd Siemens Lidl LinkedIn Instagram Facebook BlaBlaCar Bild Twitter TikTok Uber Alibaba.com Parship

73% (63% 1) 70% (63%1) 70% (-) 69% (55% 1) 69% (-) 68% (60% 1) 67% (52% 1) 65% (-) 64% (-) 64% (-) 26% (-) 25% (-) 25% (17% 1) 24% (-) 22% (6% 1) 20% (12% 1) 20% (-) 19% (-) 18% (-) 15% (-)

⌀ across all brands 40% N (2020) = 1.096 Top 2 boxes on a scale of 1 to 5 (1 = "I trust the brand very much"; 5= "I do not trust the brand at all") Figures in percent 1) 2016

Fig. 2.6   Trust in brands in 2020. (Our illustration is based on Sasserath Munzinger Plus, 2021, 2017)

them as they grow. We’re humbled by the trust parents place in us, and we work hard each day to earn and keep it.” This clear communication of trust in the context of a product recall demonstrates another positive aspect of brand trust: If consumers trust a brand, their trust acts as a protective shield against potential brand damage in future crises (cf. Burmann, 2005; Edelmann, 2011).  Brand trust is the willingness of consumers to make themselves vulnerable to the brand. This willingness is based on the conviction that a brand has both the ability and the willingness to fulfil its brand promise (cf. Hegner, 2012, p. 59). Brand trust is only relevant to consumer behaviour if there is a subjectively perceived risk at play—otherwise, the consumer is not “vulnerable.” As levels of subjectively perceived risk rise (e.g., functional risk, financial risk, social risk), brand trust becomes increasingly important. Brands can enjoy consumer trust if they keep the promises they make. Brand trust encompasses four dimensions (cf. Fig. 2.7). The cognitive dimensions of trust, which capture brand performance, include the level of competence attributed to a brand as well as its predictability. In contrast, a brand’s perceived goodwill and its integrity make up the affective dimensions. If trust could be assessed on a purely cognitive basis, it would be a matter of assured knowledge. In a purely affective assessment, blind faith would be the more appropriate term (cf. Hegner, 2012, p. 14).

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2.2  Brand Objectives Cognitive dimensions of trust Measurement

Dimensions

Product competence Market knowledge

Competence

Quality of performance

Consistency

Predictability Safety

Brand Trust

Interest in customers Customer focus

Goodwill

Problem focus Fairness Openness

Integrity

Honesty

Affective dimensions of trust

Fig. 2.7   Model to explain brand trust including measurement. (Based on Hegner, 2012, p. 111)

Hegner analysed the effect of the perceived competence of a brand on consumer trust, showing that there are three relevant factors: product competence, market knowledge and quality of performance (cf. Fig. 2.7). Product competence and quality of performance relate to the brand’s ability to implement the brand promise on an organisational level. Market knowledge is a measure of consumers’ impression that a company possesses relevant information about its market and therefore understands both its consumers and its competitors. The predictability of a brand relates to the extent to which its behaviour is perceived to be consistent (cf. Einwiller, 2003, p. 81), this encompasses consistency and safety (cf. Hegner, 2012, p. 235). Consistency presupposes the existence of a clear brand identity. Safety aims to give consumers the feeling that they can rely on a brand’s quality standards. The Porsche brand is successful in the realm of consistency (cf. Burmann & Schallehn, 2010, p. 60). Porsche asserts in its brand identity: “Porsche is a unique company with strong ideals. Everything we do is shaped by our values and philosophy. We have a clear idea of who we are and how we do things. This is how we manage to stay

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true to our principles and fulfil the high demands we place on ourselves” (Porsche, 2011, p. 5). Product safety is also ensured by high-quality standards at Porsche. Goodwill refers to the consumer belief, that the brand cares about, and attaches great importance to the interests of its customers (cf. Li et al., 2008). In concrete terms, this means consumers must perceive the brand to give high priority to customer orientation. The severe loss of trust suffered by many banks in Germany is mainly due to their loss of goodwill—the result of behaviour exclusively characterised by “greedy” maximisation of their managers’ personal profit (cf. Fichtner et al., 2016). Goodwill can be operationalised by demonstrating an interest in customers, a customer focus and a problem focus (cf. Hegner, 2012, p. 236). Interest in customers expresses the perceived degree of a brand’s sincere interest in its customers and their problems. Customer focus means that the interests of customers have the highest priority in the company. Problem focus promises that problems encountered by customers will be solved quickly and in a satisfactory manner. In order to make interest in customers and customer focus tangible, a brand can, for example, involve customers in the innovation process (cf. Füller et al., 2009, p. 198 ff.; Dahl et al., 2014) or maintain intensive interaction with customers via social media (cf. Hiddessen, 2021, p. 47 ff.). To demonstrate a deep problem focus, brand management must be able to rapidly identify potential customer problems and implement solutions. This can be achieved, for instance, through the establishment of a professional complaint management (cf. Stauss & Seidel, 2014). Social media is a critical tool for complaint management. By monitoring social media, information about customer problems can be collected quickly. Companies can then address customer complaints directly and find tailored solutions (cf. Nee, 2016, p. 51 ff.). Finally, integrity is defined as consumers’ subjective belief that a brand takes care of customers in an exemplary manner (cf. Füller et al., 2008; Ipsos Mori, 2009). Integrity can be further subdivided into three facets: fairness, openness, and honesty (cf. Hegner, 2012, p. 237). Fairness requires a brand not to take advantage of its customers. Openness is understood as the open exchange of all relevant information between the brand and its customers. Honesty requires a brand to communicate information that is exclusively correct and true. In essence, honesty requires that the company carefully monitors the truthfulness of all statements communicated to customers, otherwise “firestorms” can quickly ensue (cf. Hansen et al., 2018; Himmelreich & Einwiller, 2015; Scholz & Smith, 2019; Sect. 5.3). Figure 2.8 summarises the most important objectives of internal and external identity-based brand management.

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2.3  Brand Positioning Final economic brand objectives (brand equity, customer equity, etc.)

Brand citizenship behavior

Behavioral objectives

(Re)purchasing behavior

Brand commitment / Brand understanding

Psychographic, pre-economic objectives

Brand attachment / Brand trust

Brand identity

Brand image

Brand promise

Brand needs

Brand touch

Self-image of the internal target groups

External image of the external target groups

points (Customer journey) Brand behavior

Brand experience

Brand awareness

Fig. 2.8   Important objectives of internal and external identity-based brand management

2.3 Brand Positioning 2.3.1 Definition and Importance of Brand Positioning An important component of identity-based brand management is the brand promise (cf. Sect. 1.4). It incorporates the functional and non-functional benefits that should be fulfilled and conveyed to external target groups via the brand touchpoints. The development and communication of the brand promise is termed brand positioning (cf. Fig. 2.9 for classification in the management process).  Brand positioning is the development and communication of a brand promise that has its foundation in the brand identity, is aligned with customer needs, differentiates the brand from its competitors, and can be realised using the company’s own skills and resources (based on Feddersen, 2010, p. 29). Both in theory and in practice, positioning is of great importance for a brand’s long-term success (cf. Blankson et al., 2008; Iyer et al., 2019; Keller et al., 2012, p. 104). Practical experience has revealed that many problems suffered by brands can be traced back to deficits in brand positioning. Brand managers are often unable to clearly articulate

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2.1 Situation and identity analysis 2.2 Brand objectives 2.3 Brand positioning

1. Concept of identity-based brand management

2.4 Brand architecture 2.5 Brand evolution 2.6 Brand budgeting

Concretization and integration: 3.1 Internal brand management: Enforcement and implementation of the brand identity in the organization

3.2 External brand management: Enforcement and implementation of the brand promise in all relevant markets

4.1 Internal and external brand performance measurement

4.2 Identity-based brand valuation

Fig. 2.9   Integration of brand positioning in the management process of identity-based brand management

their brand’s promise and implement it coherently at the brand touchpoints. To prevent these problems and succeed, brand positioning must fulfil five requirements:

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1. Behavioural relevance: The strength of a brand stems from its behavioural relevance (cf. Sect. 2.2.2). Positioning can therefore only be successful if the brand promise is behaviourally relevant—that is to say, if it satisfies important needs of the target groups. Benefits with little or no behavioural relevance are not suitable for brand positioning. 2. Differentiation: Many brands are unsuccessful due to their high level of interchangeability, as functional benefits can be imitated quickly by competitors (cf. Bohmann, 2011; Enke et al., 2014). This is especially apparent in saturated markets and B2B markets. Successful brand positioning must therefore include benefits—especially non-functional benefits—that, from the perspective of target groups, differentiate the brand from its competitors over a long period. 3. Identity fit: Brand employees must be fully involved in the development of the brand promise. This is the only way to ensure that they will fulfil the brand promise through their daily behaviour in the workplace, thus making the brand promise tangible for consumers. To be successful therefore, brand positioning should only incorporate benefits that fall fully in line with the brand identity. 4. Unique brand experiences: The brand promise must be translated into clear and unique sensory brand experiences. Brand management should target multiple senses, as the more senses engaged in the communication of the brand promise, the better and longer the brand will be anchored in consumer memory (cf. Springer, 2008; Steiner, 2018). 5. Brand authenticity The brand promise must be authentically fulfilled at all brand touchpoints. Consumers only trust a brand when the brand promise is genuinely fulfilled through concrete activity. Thus, successful positioning should only incorporate benefits that can be fulfilled at all the brand touchpoints (cf. Sect. 1.9).

2.3.2 Process of Identity-Based Brand Positioning To develop a positioning that fulfils the requirements mentioned above, it is necessary to carry out a five-stage process. In Fig. 2.10, this process is integrated into the basic concept of identity-based brand management and supplemented with these requirements (for more details regarding the communication of the brand promise, see Chap. 3). In the following subsections, we will demonstrate the process of identity-based brand positioning using examples taken from a consultancy project in which the University of Bremen assisted a restaurant brand with its brand positioning efforts. The results have been anonymised and modified slightly.

5

1

3

Brand behavior:

Identify potential benefit dimensions suitable for positioning.

Select appropriate benefit dimensions

4

Formulate the brand promise

1. Translate the brand promise into unique brand experiences 5. Ensure Authentizität an allen Touch Points gewährleisten 2. authenticity atBrand all brand touchpoints

Zweirequirements Anforderungen Phase Two in in phase 5: 5:

(See internal and external operational identity-based brand management in Chapter 3)

2

Convey the brand promise through brand behavior of all managers and employees that delivers the brand promise at all brand touchpoints

Determine target groups and competitors

Development of an appropriate brand promise:

3. Create an identity fit

2. Ensure differentiation

Fig. 2.10   Process of identity-based brand positioning

Brand identity

1. Promise relevant benefits

Three requirements in phases 2 & 3:

points

touch

Brand

Brand experience

Brand needs

Brand image

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89

2.3.2.1 Determining Target Groups and Competitors The competitors that need to be included in the brand positioning process should be selected after delineating the relevant market (cf. Meffert et al., 2019, p. 217 ff.). Potential future competitors should also be taken into account. For example, German automotive companies compete not only with other established manufacturers (e.g., Toyota) and new providers (e.g., Tesla), but also with technology companies such as Apple, Alphabet, and Sony, all of which are developing self-driving cars (cf. Hage & Nefzger, 2021). To determine the company’s target groups, consumers in the relevant market must first be divided into relatively homogeneous segments based on pertinent characteristics (socio-demographic, purchasing behaviour-oriented, psychographic, etc.). Profitable segments can then be selected, thus forming the brand’s target groups (cf. Meffert et al., 2019, p. 221 ff.). The relevant market for the restaurant brand under review is the “fast-food market for hamburgers in Germany.” The dominant competitor in this market was determined to be the main competitor. The fast-food market for hamburgers in Germany is made up of a total of 35 million consumers per year. For the purpose of market segmentation, 5,000 respondents from this target group aged between 14 and 65 answered questions about their socio-demographic characteristics, their eating habits (behavioural criterion) and their attitude toward fast food (psychographic criterion) in a representative online study. A cluster analysis of the data (cf. Backhaus et al., 2016, p. 455 ff.), allowed researchers to identify the following four market segments: “fast-food fans” (40%), “families and social eaters” (25%), “health-conscious gourmets” (20%) and “dispassionate lowprice shoppers” (15%). The “fast-food fans” group was selected as the target group for the brand positioning project. 2.3.2.2 Identifying Potential Benefit Dimensions Suitable for Positioning In the process of brand positioning, the final formulation of the brand promise can only contain benefits that were identified as potential benefits at the beginning of the process. It is therefore critical to identify as many brand benefits as possible at the second stage of the process. To ensure the list is as comprehensive as possible, methods of qualitative market research should be combined with secondary research (desk research). The most common methods of qualitative market research are group discussions and in-depth interviews (cf. Kuß et al., 2014, p. 51 ff.). Secondary research involves the evaluation of existing data from studies, the internet and social media (cf. Meffert et al., 2019, p. 181 ff.). In the case of our restaurant brand, more than 25 in-depth interviews were conducted with internal target groups (executive managers from the company headquarters, employees, and franchisees), each lasting between one and two hours, to identify potentially suitable brand benefits. The focus was on analysing the brand identity (cf. Section 2.1). In addition, 25 current and potential customers of the brand from the “fastfood fans” target segment were surveyed by means of in-depth interviews. These interviews were held to determine the most important motives for buying the fast-food brand,

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existing obstacles to buying the brand, and the current perception of the brand’s image compared to its competitors. As part of the secondary research, the self-presentation of several restaurant brands was analysed at the brand touchpoints (websites, TV advertising, online advertising, product ranges, pricing, etc.). Existing empirical studies of the restaurant market in Germany were also evaluated. Based on these extensive analyses, researchers identified 79 brand benefits that were potentially suitable for positioning (e.g., healthy products, broad product range, uncomplicated ordering process, family friendliness, the appealing interior design of the franchises, opening hours and parking, wait times, staff friendliness, ecological responsibility, and humour). When there is a vast number of potentially suitable benefits, further analyses are hardly feasible (to read about the necessity of condensing large variable sets, see Backhaus et al., 2016, p. 386). In addition, consumers themselves reduce the complexity of their decision-making processes each time they evaluate a brand prior to making a purchase. They, too, accomplish this by condensing a profusion of detailed individual benefits into a few, overarching benefits. This mental condensation in the buyer’s real purchase situation is mirrored by a statistical condensation that occurs during an explorative factor analysis (EFA)—in our case, of the 79 benefits of the restaurant brand (cf. Backhaus et al., 2016, p. 386). The aim of an EFA is to identify similar brand benefits and group them together. In statistics, these groups of benefits are referred to as factors, and in practical applications as benefit dimensions. In the project for the restaurant brand, the 79 benefits were condensed into the following twelve benefit dimensions: good taste, healthy products, good value for money, good special product offering, good availability (franchise network density, opening hours), family friendly, trendsetting, adventurer, masculine, socially & ecologically

confident

innovative

clever

dynamic

modern

trendsetting

cool

young

metropolitan

tolerant

Fig. 2.11   Individual benefits within the benefit dimension “trendsetting” in the context of positioning a restaurant brand

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responsible, intelligent & humorous, and typically American. Figure 2.11 shows an example of the benefit dimension “trendsetting” with its corresponding individual benefits.

2.3.2.3 Selection of Appropriate Benefit Dimensions Structural equation models are usually used as a statistical method to test behavioural relevance (cf. Weiber & Mühlhaus, 2014). These models show the effect of benefit dimensions on purchasing behaviour. Based on the online survey of “fast-food fans,” researchers performed a structural equation analysis to determine the effects of the twelve benefit dimensions on purchasing behaviour at fast-food hamburger restaurants (cf. Fig. 2.12). For the restaurant brand, Fig. 2.12 shows that six benefit dimensions—masculine, socially & ecologically responsible, intelligent & humorous, typically American, family-friendly, and good special product offering—have no significant positive influence, sometimes even a negative influence, on purchasing behaviour. These six benefit dimensions are therefore unsuitable for the positioning of the restaurant brand. The coefficients

good taste

0.45*

good availability

0.38*

trendsetting

0.28*

healthy products

0.27*

adventurer

good value for money

*) Significant with a probability of error of less than 1%. n.s. = not significant

0.27* 0.20*

Purchasing behavior

n.s. masculine n.s. socially & ecologically responsible intelligent & humorous typically American

family friendly good special product offering

n.s. -0.15 -0.18 -0.20* Shown are the coefficients of a structural equation analysis, which can vary between + 1.0 and - 1.0. The larger the coefficient, the greater the positive or negative effect on purchasing behavior.

Fig. 2.12   Purchasing behaviour relevance of benefit dimensions for positioning a restaurant brand

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of the remaining six dimensions show their importance to purchasing behaviour. The benefit dimensions with the highest coefficients are particularly relevant for positioning. To test the level of differentiation between the brand and its competition, the image of the brand to be positioned is compared with the images of its competitors. For this purpose, a mean value should be calculated for each behaviourally relevant benefit dimension for each brand. The next task is to review whether these mean values differ significantly between brands (cf. Backhaus et al., 2016, p. 207 ff.). The results will fit one of the following three scenarios per benefit dimension: 1. The target groups give the brand to be positioned a significantly weaker rating than the brand(s) of the main competitors in terms of benefit dimension A. The brand to be positioned therefore has a competitive disadvantage in this dimension and positioning using benefit dimension A does not make sense. 2. The target groups view the brand to be positioned as significantly better than the brand(s) of the main competitors in terms of benefit dimension B. Here, the brand has a competitive advantage. Thus, benefit dimension B should be used for positioning. 3. The brand to be positioned does not differ significantly from the brand(s) of the main competitors in terms of benefit dimension C. Although there is currently no differentiation between the brand and its competitors here, positioning via benefit dimension C may make sense. For our restaurant brand analysis, this procedure was used to evaluate the brand’s image in the relevant benefit dimensions compared to its main competitor (cf. Fig. 2.13).

Do not agree at all

1

2

3

4

5 Agree completely

adventurer * Image of the restaurant brand good taste

Brand image of the main competitor

good availability *

trendsetting *

healthy products *

good value for money * *) The difference in means is significant by less than 1%.

Fig. 2.13   Image of the restaurant brand in comparison to its main competitor

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As can be seen in Fig. 2.13, the target group judged the restaurant brand to be significantly weaker than the main competitor brand in four benefit dimensions (“good availability,” “trendsetting,” “healthy products,” and “good value for money”). Since the brand had a competitive disadvantage in these benefit dimensions, they were not considered for its final positioning statement. In contrast, the calculation demonstrated that the restaurant brand had a significant advantage in the benefit dimension “adventurer” (with the individual benefits “adventurous,” “cheeky,” “bold,” and “passionate”). For the benefit dimension “good taste” the restaurant brand and the investigated competitor brand were rated equally. As a result, the level of fit with the brand identity was only tested for the two benefit dimensions “adventurer” and “good taste.“ The identity fit is examined by comparing the remaining benefit dimensions with the previously identified brand identity. This helps to identify “evidence” that the suggested benefit dimensions can be credibly honoured. In brand management, this “evidence” is also referred to as “reason why” or “reason to believe” (RTB). If there is no “evidence” that a benefit dimension can be credibly honoured, the brand promise risks seen as inauthentic. In the case of the restaurant brand, researchers further evaluated the identity fit in several workshops with managers and employees of the brand. In addition, a quantitative survey of all managers and employees could have been conducted to validate the results of the analysis. For the restaurant brand, the workshops demonstrated that the two remaining benefit dimensions (“adventurer,” and “good taste”) had a good fit with the brand identity.

2.3.2.4 Formulation of the Brand Promise The final brand promise is the consummation of all the previous steps and contains statements about the target group, the promised benefit, and the “evidence” (RTB) ascertained in the identity analysis. All benefit dimensions that are behaviourally relevant, differentiating, and fit the brand identity should be included in the brand promise (provided it remains short and concise). When it is formulated in this way, the brand promise facilitates points-of-difference (POD) positioning because the brand is significantly positively differentiated from the competition (cf. Reeves, 1960; Ries & Trout, 2001, p. 19 f.). POD positioning has the highest potential for success in brand positioning. In the restaurant brand’s case, the benefit dimension “adventurer” fulfilled all three requirements and enabled the brand to use POD positioning. This dimension, therefore, became an important component of the brand promise. To concretise adventurous associations, the individual benefits of the dimension “adventurer” were used in the formulation of the brand promise: “adventurous,” “cheeky,” “bold” and “passionate”. Even if a benefit dimension does not yet contribute to differentiation from competitors, it can still make sense to use the dimension if it is highly behaviourally relevant and fits well with the brand identity. An approach of this kind is termed points-of-parity (POP) positioning and is recommended for benefit dimensions that consumers consider

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essential (known as “hygiene factors;” cf. Keller & Swaminathan, 2020, p. 82 ff.). For the restaurant brand, the benefit dimension “good taste” had a high identity fit and the highest level of behavioural relevance, but it did not presently contribute to differentiation from the brand’s main competitor. The high identity fit partly stemmed from the fact that only this restaurant brand freshly grilled all dishes over an open flame. Furthermore, grilling is very important “evidence” of a hamburger’s good taste for “fast-food fans.” “Good taste” was thus integrated into the final brand promise with the rationale that the brand was unique in grilling food over an open flame (cf. Fig. 2.14). The brand also formulated a goal of achieving long-term differentiation from its main competitor in this benefit dimension. The final brand promise of the restaurant brand included both a functional benefit (“good taste”) and a non-functional benefit (“adventurer”). Especially in saturated markets (e.g., fast-food restaurants), the inclusion of solely functional benefits usually only facilitates POP positioning. Differentiation (POD positioning), on the other hand, can often be achieved through the inclusion of non-functional benefits in the brand promise.

2.3.2.5 Communication of the Brand Promise As illustrated by the example of the restaurant brand, a brand promise is a rhetorical, and thus relatively abstract, concept. The brand promise, which usually consists of just a few words or sentences, is only not that suitable for communication with target groups, as it leaves too much room for interpretation and is not sufficiently emotional. It is, therefore, crucial to make the brand promise comprehensible to both external and internal target groups by means of concrete symbols. In addition to direct communication, the brand promise must also be conveyed through the behaviour of internal target groups.  Brand symbols are sensory signs that represent a brand, facilitating identification of the brand and communicating information about the brand. In this way, brand symbols convey the brand promise (cf. Müller, 2012, p. 26). For example, the German insurance brand Provinzial uses the image of a guardian angel to communicate its brand promise of “reliability,” “trust,” “protection,” and “lifelong support” (see Fig. 2.15). This symbol is transmitted to the brand’s target groups through all its communication channels. In order for communication to be successful, a company

For "fast-food fans," [restaurant brand] offers the best taste, because our food is freshly grilled over an open flame. We always show ourselves to be adventurous, cheeky, bold and passionate. Fig. 2.14   Final brand promise of the examined restaurant brand

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Fig. 2.15   Advertising image of Provinzial Insurance. (Westfälische Provinzial, 2017)

must ensure that the symbol it chooses to represent the brand has commonly understood connotations—only then will the symbol be decoded by recipients in the target group as the brand intends. Marlboro provides a classic example of communication using symbols (cf. Müller, 2012, p. 27 ff.). Marlboro’s brand promise used to incorporate “freedom,” “masculinity,” and “adventure.” Symbols from the American Wild West were used to convey these qualities. The world of Westerns, as displayed in a plethora of films and novels, is linked to just these kinds of characteristics: “freedom,” “masculinity,” and “adventure”. In Marlboro’s communication, cowboys and the things they typically did (e.g., lassoing or sitting around the campfire) were depicted. The brand also capitalised on a Western acoustic symbol, using theme music from the Western classic “The Magnificent Seven” as the soundtrack to scenes in its commercials. In addition, the brand’s target groups were invited into the “Marlboro world” with the slogan “Come to Marlboro Country.” In all these ways, the Marlboro brand used the socially entrenched symbols of the Wild West to evoke their brand promise. Communicating the brand promise to the consumer at all brand touchpoints using understandable and purposeful symbols is a critical challenge for brand management. It is therefore a central task of operational brand management to develop appropriate brand symbols (also called brand elements). In addition to the brand name and logo, these include slogans, advertising characters, colours, and sounds. The work of designing brand elements and communicating the brand promise across all brand touchpoints is outlined in detail in Chap. 3.

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2.3.3 Brand Repositioning as a Distinct Form of Positioning Once a brand has positioned itself, it generally cannot maintain this fixed position. External market conditions—e.g., new competitors or a change in customer preferences—can make it necessary to revise the brand’s positioning. Ongoing review and reactive modification is imperative, a process which is termed brand repositioning (cf. Feddersen, 2010, p. 30). The concept of positioning can thus be divided into two consecutive phases: the first phase, initial positioning, followed by a dynamic phase, repositioning.  Brand repositioning is the modification of the brand promise for a brand that has already been introduced to the market by adding, deleting, or modifying functional and/ or non-functional benefits (cf. Feddersen, 2010, p. 33). Repositioning can be supported by positioning models, which illustrate both the actual position of the brand and the target position after repositioning. The distance between the two points is known as repositioning intensity (cf. Fig. 2.16). Recke (2011) defines repositioning intensity as follows:  “Repositioning intensity indicates the extent to which relevant consumers perceive the brand position to have changed with regard to its functional and/or non-functional benefit dimensions when comparing two distinct points in time” (cf. Recke, 2011, p. 62). Within the framework of repositioning, three important courses of action are possible: 1. Ensuring up-to-dateness 2. Rejuvenation 3. Addition or deletion of benefits Ensuring up-to-dateness is a continuous process of brand management. The aim is to be perceived as contemporary and fresh. This capacity is grounded on a high degree of market orientation, which facilitates early recognition of trends (cf. Meffert et al., 2019). The Adidas brand is adept at remaining current, having managed to recognise trends at an early stage for decades. Adidas is able to achieve this because it has, among other things, around 20 concept stores worldwide. These retailers are particularly closely connected to trendsetting target groups and are simultaneously influencers themselves. Through these concept stores, Adidas secures street cred and gleans inspiration for new product ideas. The trendsetter target group only interact with their own kind in the concept stores. The Adidas brand itself, symbolic of a large, unapproachable, globally active corporation, keeps a low profile. New products by unorthodox designers are released in very

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2.3  Brand Positioning Benefit dimension “price“ High price Consumer´s ideal brand

A1 C

Competitor brand C

Low quality

High quality B

A0 Original position of brand A in t0

Competitor brand B

Benefit dimension “quality“

Repositioning intensity

New position of brand A in t1

Low price

Fig. 2.16   Repositioning intensity in the positioning model. (Based on Burmann & Recke, 2009, p. 313)

small, limited series, generally at the same prices as their regular product range, and sold by the concept stores. These limited product lines are only sold globally through the concept stores’ own online shops. If Adidas receives positive feedback about a particularly limited series, the products, which can be eccentric, are adapted for a broader target group, and then sold in large numbers through other distribution channels. Brand positioning is kept up to date for existing target groups, rejuvenation, however, is aimed at appealing to a new, younger target group (without losing previous target groups). The Old Spice brand provides a prime example here. After years of declining sales and associations with a significantly older target group, Old Spice’s brand management decided to reposition the brand by revising its product line and concentrating on a younger target group in its brand communication. After airing various TV commercials designed to appeal to a younger target group, the brand launched a very successful worldwide viral campaign with the commercial “The Man Your Man Could Smell Like.” A campaign goes viral when a small number of people initially share the campaign, spreading it to a “critical mass,” after which it spreads “explosively” across various media (cf. Gladwell, 2012). This most often happens through social media. With its

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campaign, Old Spice and its videos reached 175 million people (cf. Visible Measures, 2012). In a subsequent step, “The Man Your Man Could Smell Like” answered questions posed by celebrities, bloggers, and consumers on Twitter with personalised videos which were posted on YouTube. As a result, viral distribution of the spots soared. Old Spice posted over 180 video responses on YouTube within three days, engaged widely in direct interactions with consumers, and managed to create a lasting brand experience with the personalised video responses. Rejuvenation is also relevant for brands in the area of employer branding, as demographic change in many countries has increased the importance of attracting young employees (cf. Sect. 3.1). The addition or deletion of benefits is usually necessary when there are major changes in a brand’s environment. Changes in consumer needs might render previous brand benefits irrelevant (deletion of a benefit) or necessitate the addition of a new benefit to the brand positioning. In performing these adjustments, finding the right, balanced fit between continuity and novelty is critical to success. A change in positioning should not be too drastic, if it was consumers would be unable to reconcile the new brand promise with the previous brand image. An intermediate fit between new and old brand information is therefore crucial. The model developed by v. Weizsäcker (1974) can be used to determine the proper fit. On the horizontal axis, the change in the brand promise is plotted as the ratio between new and old brand information (significant changes = low fit between new and old brand information). On the vertical axis, the impact on communication resulting from the change is recorded (cf. Fig. 2.17).

Communication impact

Wmax

Successful repositioning: transfer of new meanings to the brand

W0

Increase in awareness

F0

0% 100%

too small fit

Brand stabilization

medium fit

Confirmation Novelty

too large fit

Fmax

Fit

100% 0%

Fig. 2.17   Application of v. Weizsäcker’s model for brand repositioning. (Based on Nitschke, 2006, p. 186)

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According to von Weizsäcker, successful repositioning is only possible if enough essential benefits (brand core) remain unchanged, and first-time non-essential benefits supplement the brand core. This balanced mix ensures maximum communication impact. Too many innovations (too small fit) are just as unsuitable as too few innovations (too large fit). In the first case, the high impact of all the surprises on consumer attention leads to an increase in brand awareness, but not to the desired change in brand image. The FRoSTA brand is a manufacturer of frozen food that saw a considerable decline in sales and market share between the end of the 1990s and the beginning of the 2000s (cf. Burmann & Feddersen, 2007). This was partly due to the brand’s insufficient differentiation from private label brands that offered similar product quality as Frosta at lower prices. Frosta’s brand managers decided to reposition the brand. The new brand promise stipulated that Frosta would not use flavour enhancers or artificial additives in its products and that all ingredients used in frozen dishes would also be listed on their respective packaging. This transparency far exceeded legal requirements. The new brand promise had the potential to be both relevant to consumers and differentiate the brand from competitors. To communicate the new brand promise, the brand managers substantially altered Frosta’s appearance at the brand touchpoints. They dispensed with the well-known slogan “Frosta is there for everyone” and the well-known advertising figure of “Peter von Frosta,” and raised their prices significantly. In this repositioning effort, Frosta hoped to win back the market shares it had previously lost. Instead, Frosta continued to lose market shares in the year following the repositioning (2003) and sales fell by 42%. Research carried out at the University of Bremen concluded that Frosta’s repositioning was too radical, as it mainly affected essential brand benefits. As a result, Frosta retracted some of the changes. First and foremost, the company returned to its old brand personality, reactivating the slogan “Frosta is there for everyone” and the advertising figure of “Peter von Frosta.” The brand also reduced its prices to their previous level, ensuring visibility by changing the packaging sizes. These measures led to an increase in sales and market share. Ten years later, Frosta was the fastest growing brand in the frozen food category. As the Frosta case demonstrates, brand repositioning should be a gradual process rather than a radical one, and great caution should be exercised when dealing with essential characteristics. Another well-known example of the addition of benefits is McDonald’s recent addition of “healthy eating” to its list of brand benefits. The reason for the repositioning was consumers’ increased health awareness, and the growing criticism of fast food in general, which led to the disparagement of McDonald’s in particular as the market leader. In connection with this new positioning effort, the franchise design was revised, the corporate colour, red, was replaced with green in Europe, Heidi Klum (a model from Germany) gave testimonials, and salads and natural farming suppliers were showcased in TV commercials (cf. Fig. 2.18).

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Modification of the logo

until 2006

2009

Change in corporate color using the example of the façade of a branch

Fig. 2.18   Repositioning by means of the addition of benefits using the example of McDonald’s. (McDonald’s 2017)

2.4 Brand Architecture If a company owns several brands, identity-based management of the brands must be coordinated. This coordination takes place within the framework of brand architecture (cf. Fig. 2.19).

2.4.1 Classification and Definition of Brand Architecture The term brand architecture is often used synonymously with other terms like brand hierarchy (cf. e.g., Keller, 2013), brand structure (cf. e.g., Laforet & Saunders, 1994, 2007), brand system (cf. e.g., Aaker, 1996) and brand/branding strategy (cf. e.g., Kapferer, 2008; Kotler et al., 2017; Rao et al., 2004). A company’s brand portfolio is the collection of brands they own (cf. Meffert & Burmann, 1996; Nguyen et al., 2018), it encompasses all the brands the company is entitled to use as per contractual agreements (licenses, alliances, etc.) or as brand owner (cf. Aaker & Joachimsthaler, 2000, p. 134). This includes brands jointly managed with other companies. The term brand hierarchy describes how the brands in a brand portfolio are assigned to the various organisational levels of a company. Several levels are important in the

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2.1 Situation and identity analysis 2.2 Brand objectives 2.3 Brand positioning

1. Concept of identity-based brand management

2.4 Brand architecture 2.5 Brand evolution 2.6 Brand budgeting

Concretization and integration: 3.1 Internal brand management: Enforcement and implementation of the brand identity in the organization

3.2 External brand management: Enforcement and implementation of the brand promise in all relevant markets

4.1 Internal and external brand performance measurement

4.2 Identity-based brand valuation

Fig. 2.19   Integration of brand architecture in the management process of identity-based brand management

brand hierarchy: the overarching company level, the business unit level, the product range level, the product level, and the product characteristic level (cf. Abraham, 2021). Creating a hierarchy within the brand portfolio makes it easier to present all the company’s brands in a clear, orderly manner, assisting in the analysis of the brand portfolio. The basis for the design of a company’s brand architecture is the brand architecture strategy, an overarching (abstractly formulated), long-term (time horizon of 5–10 years),

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conditional (linked to premises), behavioural plan for the management of the entire brand portfolio. Within the framework of the brand architecture strategy, managers must clarify whether it is sensible to buy or sell brands in keeping with the existing brand portfolio. This strategy facilitates the pursuit of two core objectives: leveraging internal synergies and fully exploiting market potential (cf. Aaker, 2004, p. 13 f.; Burmann & Meffert, 2005, p. 165). The brand architecture as subjectively perceived by consumers can deviate from the company’s true brand architecture. Despite its potential factual invalidity, the company’s perceived brand architecture matters greatly because it determines consumer behaviour, thus ultimately governing whether the brand meets its targets. To design the brand architecture strategy different strategic options for action can be used. It is crucial here to distinguish between the strategic perspective required when designing brand architecture and the much more detailed perspective required when implementing it. Putting brand architecture in place involves the implementation and realisation of the adopted brand architecture at the brand touchpoints, translating the brand architecture into a strategy and recommending measures for each individual brand within the portfolio. The brand architecture should be subjected to a regular performance assessment, allowing it to be systematically adjusted based on empirical target achievement levels. For example, brand managers must assess how readily employees and managers accept the brand architecture, as well as how the brand architecture is perceived and evaluated by customers. In the following subsections, we present the process of brand architecture development—shown in Fig. 2.20—in detail.

2.4.2 Hierarchisation of a Brand Portfolio The identity-based process for brand architecture development is modelled on the work of Aaker (1996). The hierarchy levels considered in this process are the overall company level, the business unit level, the product range level, the product and the product feature level (cf. Fig. 2.21). Working on a case-by-case basis, not all these levels need to be

2. Strategic design of the brand architecture 1. Hierarchization of the brand portfolio

Identification of options for action

Evaluation and selection of options for action

3. Translation of the brand architecture into brand strategies and measures for each portfolio brand

4. Internal and external performance measurement

Fig. 2.20   Identity-based process of brand architecture design. (Based on Burmann & Kanitz, 2010, p. 39)

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Company brand: Volkswagen Aktiengesellschaft Business unit brands: VW, Audi, Skoda, Seat, Bentley, Porsche, Scania, MAN, Bugatti, Lamborghini, Ducati, etc. Product range brands: -----Product brands (selected): A3, Q7, A1, TT, R8, Polo, Up, Golf, Beetle, Passat, Touran, Sharan, Tiguan, Tuareg, Fabia, Octavia, Leon, Tarraco, etc. Product feature brands (selected): quattro, GTI, TDI, etc.

Fig. 2.21   Hierarchisation of the brand portfolio using the example of the Volkswagen Group (excerpt)

occupied by brands. Reflecting the concept of ingredient branding (cf. Desai & Keller, 2002; Moon & Sprott, 2016; Sivaramakrishnan & Carvalho, 2019), product feature brands are understood to be commodities (e.g., raw materials, input materials, product components) that, from the perspective of the relevant target group, form an independent brand (cf. Freter & Baumgarth, 2005, p. 462). These are components or by-products of product brands that can therefore be managed as independent brands (cf. Aaker, 1996, p. 243).

2.4.3 Strategic Design of Brand Architecture To systematise options for action from the manufacturer’s point of view, there is a well-established procedure using two dimensions (cf. Fig. 2.22). The retailer perspective in brand architecture design is covered in Sect. 5.2.

2.4.3.1 Designing the Vertical Dimension of Brand Architecture The vertical dimension of brand architecture has its roots in the Brand Relationship Spectrum introduced by Aaker and Joachimsthaler (2000). At one end is branded house architecture, also known as corporate branding or umbrella branding. In branded house

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Master brand as driver Sub-brands Strong sub-brand

Co-drivers Strong endorsement Endorsed brands Token endorsement House of brands Single brand strategy

Multi-brand strategy

Horizontal dimension

Fig. 2.22   Strategic options for action in brand architecture design from the manufacturer’s point of view. (Based on Burmann & Kanitz, 2010, p. 41 f.)

Fig. 2.23   House of brands architecture by Procter & Gamble. (Procter & Gamble, 2017)

architecture, all of a company’s services are marketed under just one brand. When the product range is very broad, this corporate brand is usually supplemented by factual and descriptive information, termed descriptors, to help orient the various target groups (e.g., the descriptors “Services,” “Express,” “Ground,” and “Freight” at FedEx; see Business Segments and Services FedEx, 2021). House of brands architecture is at the other end of the scale. Here, each of a company’s services has its own brand which acts completely independently of all the other brands in the portfolio. An example of a company that uses the house of brands structure is Procter & Gamble, a corporation that includes Pampers, Gillette, Ariel and Febreze (cf. Fig. 2.23). Mixed forms exist between the two extremes, where at least two brands are used to mark a service. Sub-brands architecture incorporates cases in which there is a dominant umbrella brand. Here, the umbrella brand is the primary driver of purchasing decisions, but the brand that is subordinate in the organisational hierarchy plays more than a purely

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descriptive role (cf. Aaker, 2004, p. 57 f.). This form of brand architecture is useful when it is desirable to transfer the strong image of the umbrella brand to the subordinate brand, but the heterogeneous market segments and diverse consumer require a differentiated brand presence Brexendorf & Keller (2017) (cf. Fig. 2.24). In the master brand as driver model, the superordinate brand is clearly the focus and merely supplemented with an add-on (e.g., Ariel with the Professional brand). Strong sub-brand architecture combines a subordinate brand with a dominant umbrella brand above it in the hierarchy (e.g., Nestle with the Pure Life brand). This option differs from the master brand as driver architecture because the subordinate brand has a strong presence. Co-drivers architecture treats hierarchically superordinate and subordinate brands as equals (cf. Aaker, 2004, p. 54 ff.). In endorsed brands architecture, the brands that are subordinate in the organisational hierarchy (e.g., product brands such as Ristorante) dominate. The umbrella brand (e.g., Dr. Oetker) only plays a supporting role, while the subordinate brands are the primary driver of purchasing decisions (cf. Aaker, 2004; Brandao et al., 2020). Endorsed brands architecture can be further subdivided: token endorsement only bears a weak, symbolic reference to the superordinate brand, while it offers more comprehensive support

Vertical dimension Branded house Master brand as driver Subbrands

Strong sub-brand

Co-drivers

Strong endorsement Endorsed brands Token endorsement

House of brands

Fig. 2.24   Examples of characteristics of the vertical dimension of brand architecture

etc.

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in strong endorsement architecture. Figure 2.24 illustrates the various options for action using concrete examples. In the next step, brand management must evaluate the various options for action using relevant internal and external evaluation criteria (cf. Fig. 2.25). The main internal criterion for successful implementation of brand architecture is that all employees demonstrate internal acceptance of it. If a decision is made in favour of a brand with a low level of brand commitment (BC), management runs the risk that employees may not behave in the spirit of the brand, ultimately weakening the brand. The Seat brand, which is part of the VW Group can be cited as an example here. Seat has consistently made losses over the past few decades. For many years, the brand tried to differentiate itself, using the slogan “auto emoción” and emphasising Spanish temperament and passion (brand promise) in its marketing. This differentiation however was absent in its product policy—Seat, VW, and Audi vehicles remained remarkably similar. The brand promise was also implemented poorly internally. In 2010, Seat’s then CEO, James Muir, commented: “If you really wanted to get rid of the company, you would still have to pay the buyer money to take Seat.” (Krogh, 2010). Statements of this kind from top management suggest a very low level of brand commitment from managers and employees. When a British-born CEO questions the economic existence of the company, he destroys the brand from within. Clearly, SEAT has now recognised this misfit and no longer uses the slogan “auto emoción” or the associated brand promise. Another internal criterion for the successful implementation of brand architecture is resource requirements. These include market investments in brand awareness and image building, synergies, implementation time, and inter-brand coordination requirements. If a brand is used in multiple business areas, the effect of brand image transfer across sectors can create synergies and potentially increase brand awareness. For example, the Essity company exploits synergies by using the Tempo brand for both tissues and moist toilet wipes. Similarly, synergies can develop when companies use the same components in different brands (common parts strategy). If a company uses several brands in the same business segment that operate completely independently of one

Internal criteria

Internal acceptance of employees

Resource requirements

External criteria

Strategic flexibility

Acceptance of external stakeholders

Market potential

Balance of risk

Fig. 2.25   Evaluation criteria for assessing options for action in brand architecture design on the vertical dimension

2.4  Brand Architecture

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other (multi-brand strategy), marketing costs shoot up. The toilet paper brands Zewa and Tempo, both part of the Essity company, provide an example of a multi-brand strategy. Increasing the complexity of a company’s brand portfolio leads to higher costs and lower synergies, but the market’s sales potential can be fully exploited. This practice allows companies to align individual brands more precisely with the needs of the respective target groups, and some consumers who choose to buy a new brand (brand switchers) can be kept in the brand portfolio. The last internal criterion is strategic flexibility. Strategic flexibility is a company’s ability both to efficiently multiply operational processes, related organisational capabilities, and relevant resources for multiple brands (replication capability,) and to comprehensively rearrange and further develop resources and skills (reconfiguration capability). The latter enables companies to acquire new organisational capabilities (cf. Burmann, 2002). In the context of brand architecture design, strategic flexibility is the ability to successfully use a company’s brand portfolio to adapt to changes in the market environment. If a company is active in multiple business areas that change in different ways, branded house architecture would hinder flexible adaptation. When using house of brands architecture, on the other hand, it is generally not necessary to consider the market situation in other business areas. Here, the brands in the brand portfolio are independent of each other, offering greater strategic flexibility. Procter & Gamble’s house of brands architecture illustrates this point. The company owns two brands that use masculine brand positioning, Old Spice and Meister Proper (a cleaning powder). However, the company’s portfolio also includes the brands Always, Ariel, and Gillette Venus, all aimed at feminine target groups. If the products were marketed under a common umbrella brand or referenced one another, the individual brands would become more interdependent and have less strategic flexibility. The sale or acquisition of brands would also become more difficult, once more reducing strategic flexibility. For these reasons, if a company is aiming for a high level of strategic flexibility, it is generally better to have numerous individual brands that operate independently (house of brands). In addition to these internal criteria, there are two important external criteria to consider when choosing a brand architecture. The first criterion concerns acceptance of external stakeholders. These stakeholders include not only consumers but also alliance and cooperation partners as well as shareholders. It should be noted here that brands at different hierarchical levels can have a varying level of influence on consumer behaviour. Kanitz (2013) investigated this aspect of brand architecture in a study with 1,100 consumers and almost 3,000 brand combinations across eight sectors in Germany. In summary, the study offered three interesting findings: • Both corporate brand image and product brand image have a significant positive influence on consumer buying behaviour.

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• Across all industries, product brands have a significantly higher level of behavioural relevance than corporate brands. • The perceived breadth of the product range offered by a corporate brand has a significant influence on the behavioural relevance of both corporate and product brands. The broader the perceived range of products offered by a corporate brand, the lower the behavioural relevance of the corporate brand. If the range of products is broad, consumers have great difficulty grasping the diverse array of products and integrating them into a single brand image (cf. Kanitz, 2013, p. 124). If a brand’s positioning is too complex or too generic, the corporate brand loses behavioural relevance, but the relevance of product brands increases. This is because specific benefits can be communicated more precisely and credibly when attached to individual product brands. For these reasons, either house of brands or endorsed brands architecture is often appropriate for a broad range of products. Kanitz (2013) also conducted an industry-specific analysis of the study’s results (cf. Fig. 2.26). In this analysis, product brands had a particularly high level of behavioural relevance in the realms of food, electronic devices, and pharmaceuticals, as the perceived product range of company brands is very broad in these sectors. Danone’s Actimel brand, for example, builds all the company’s communication about the brand around the product brand. The corporate brand, Danone, is in the background. The only indication that the brand belongs to Danone is its logo on the product packaging. Another clear indication that the focus is on the product brand is the independent product brand page, www. actimel.de. In the realm of cars, the situation is different. Here, the co-drivers option makes more sense. The Mercedes-Benz C-Class provides an example of co-drivers architecture: in the C-Class’s brand appearance, the corporate brand and the product brand are used in equal measure. Kanitz’s results (2013) revealed that the two brands had a similar influence on purchasing behaviour. This correlates with Mercedes’ relatively narrow product portfolio, which is limited to automobiles and has been familiar to its target groups for decades. The results of Kanitz’s study reveal that it is advisable for brand managers to intensively consider the sub-brands, co-drivers, and endorsed brands models when designing the architecture of a brand. In all of these brand architecture options, combining two brands can increase the brand bundle’s relevance to purchasing behaviour. A further external evaluation criterion is the full exploitation of market potential. This encompasses the extent to which the company is currently exploiting the core market, the potential extent of exploitation, and the potential for cross-selling. Here, it is crucial to determine which brand architecture model facilitates the greatest exploitation of market potential, bearing in mind that there may be cannibalisation effects (gaining brand buyers from other brands in the portfolio rather than gaining brand buyers from

Volkswagen – Golf

Bayer – Aspirin

Deutsche Bank – DWS Investments

Accor – Mercure

Football BL – Bayern München

Spain – Andalusia

Automobile (N=380)

Pharma (N=385)

Finance (N=358)

Hotels (N=263)

Sports (N=369)

Destinations (N=393) Italy – Toskana

Basketball BL – Alba Berlin

Marriott – Courtyard

Mercedes-Benz – C-Class

Microsoft – Xbox 360

Danone – Actimel

Austria – Tirol

Handball BL – THW Kiel

Starwood – Sheraton

Volksbank – Union Investment

Johnson & Johnson – Dolormin

Sparkasse – Deka Investments

Novartis – Voltaren

Opel – Astra

Apple – iPhone

Kraft – Philadelphia

0.447***

0.358***

0.360***

0.542***

0.454***

0.163**

0.620***

0.297***

0.689***

0.036 (n.s.)

0.415***

0.365***

0.686***

0.146***

0.800***

0.023 (n.s.)

R² = 32.8%

R² = 42.3%

R² = 23.3%

R² = 47.3%

R² = 47.7%

R² = 30.5%

R² = 49.2%

R² = 64.1%

Shown are the coefficients of a structural equation analysis. Significance levels: *** = p