Mon, 25 Aug 2003

Brand: The real soul of a product or service

Cepi Husada, Contributor, Jakarta

This is probably a record-breaking figure. Until mid-2003, every month McDonald's Indonesia has been selling at least one million fried chickens to meet the demands of its customers, who, obviously, are enthusiastic consumers or "aficionados" of the special menu available at the world's most renowned fast-food outlet.

In its country of origin, America, McDonald's popularity initially depended on its burgers and french fries. In Indonesia, however, the introduction of fried chicken to the menu -- pioneered by McDonald's Indonesia -- has increased its popularity and consequently opened up new market segments.

It was Bambang N. Rachmadi, the franchisee for Indonesia, who came up with the idea: McD fried chicken. His decision years back to open McDonald's outlets here as the franchisee for Indonesia was applauded by many as this is a brand recognized around the world for its reputation for quality products and excellent service. On top of that, McDonald's has always been famous as the place that gives its customers a special experience, much of it fun-related.

In this context, food, or any other product for that matter, has to be presented or, rather, enveloped in a brand with all its ambience as well as the trust it has built and maintained among its customers. As a brand, McD can be cited as being exemplary in successful branding incorporated in its customer-oriented marketing.

For some years now every modern company's marketers have realized the importance of a brand and its maintenance. Enhancing a brand does not always entail grand and expensive strategies, but even the smallest giveaway or extra something, like reward points or the specially created gifts handed out by McD, can do a lot for the brand and, naturally, sales at the end of the day.

Another strategic branding story is that of Park Hyatt Tokyo, which has been successful in positioning itself as one of world's best hotels. From its very early days in the early 1990s, it positioned itself as the most expensive hotel among Tokyo's hotels. Even during Japan's economic recession, it kept its rates higher than other hotels in the city. Those who thought this strategy was tantamount to harakiri, or suicide, were proven wrong. It not only retained its market share but sales even grew significantly. This was attributable to the hotel's brand, meaning not only the products and services in the physical sense but more about the ambience along with the other frills.

This proves that brand equity -- the soul of a brand -- is one asset to be nurtured consistently by giving customers more than they expect. "When we say 'give the customers the best', we mean it and act on it. It's not merely a slogan. That's how we take care of our brand image," said its marketing director, Hirohide Abe. Designwise, Park Hyatt Tokyo is also unique, as quite different from what one may expect, the hotel looks more like a museum or an art gallery. This design also lends an air of class to Park Hyatt Tokyo. Famous for its excellent service, the hotel's 178 rooms are almost always fully occupied year in year out. Seventy percent of its guests are those who want to escape from the daily humdrum routine and discover another kind of world here. The hotel's restaurants, likewise, enjoy huge sales and are fully booked most of the time. For the New York Grill, one often has to be on the waiting list, which is sometimes one week.

Another feather in the hotel's cap is the survey conducted by Nikkei Business Magazine on top Japanese executives who voted the Park Hyatt Tokyo as the best business hotel in Japan. Conde Nest Traveler magazine, based in England, also ranked the hotel as the world's number two hotel for excellence in all categories. This goes to show how a brand with all it encompasses can make a product or service a winner in today's fierce competition.

In the automotive industry, brand has also proved to be a vital asset in marketing. The New Beetle, for example, manufactured by Volkswagen (VW) of Germany, is today one of the favorite cars among American teenagers. Its small size -- a huge contrast to the large American cars years back -- plus unique design and superior features have for some time been an inspiration for some of the world's major car makers, like Chrysler and BMW.

VW cars with their strong brand equity for years have proven themselves as respected contenders with last year's sales increasing by 14 percent and market share by 2.5 percent (including Audi's figures, its sister company). With a price range that is 20 percent higher than its competitors in the same category does not impede its marketing performance. Until this very day the VW Beetle, with up-to-date designing, features and enhanced engine, remains the favorite car of many.

In the world of computers, Macintosh has a success story of its own. "Other PC makers have customers. Apple has fans, even believers," said Steve Jobs as quoted by Fortune. The CEO and one of the founders of Apple Incorporated further said that Apple had always been a company, and more, a faith. He claimed the reason was the company and its products had a soul. A soul, he explained, that consisted of more than just features that far exceeded the customers' expectations. The result was skyrocketing sales of iMac within six weeks after its launch in 1997: 278,000 units. The profit for the company was a staggering US$309 million. This was in contrast to the one billion dollar loss suffered by the company one year before Jobs returned. Jobs and his branding strategy contributed to this achievement, which strengthened the image of the brand in the eyes of its consumers.

Hence, it has now dawned upon many marketers that a brand is much more than a collection of product features or purely functional benefits. It is a psychological element, more like the soul of a product or a service. It works most effectively in the consumers' minds, where choices are made, or, like advertising executives say, the battle of mind-share occurs. If a company wishes to win, its brand has to reign. Tom Peters must be right then when he wrote the line: "Brand! Brand! Brand! That's the message for the late 1990s and beyond." in his book The Cycle of Innovation. -- The writer is Community Marketing Manager of McDonald's Indonesia.