I’ve stated many times before that the only way to grow, with some exceptions, is to innovate and create “must-haves” that define a new subcategory (or category) and then manage that subcategory so that it wins in the marketplace and so that your brand becomes an exemplar. When this happens, subcategory competition becomes the focus rather than brand competition, and this can be a foreign concept to most marketers.

Subcategory/ Category Labels

A key part of the process is the subcategory or category label or “brand.” The brand that can define and manage the label will be in a position to both help the subcategory win and become its exemplar. A recent article in the Sloan Management Review provides insight into the importance and dynamics of category labels based on a study of several categories. They observed that categories usually start with multiple labels before a dominant category label emerges. Premature labels exit because the category technology changes over time.

The “credit card” label, which describes cards sponsored by banks, was preceded by “charge cards” and “charge-a-plate” as the technology changed over some 30 years. Sometimes, early efforts to describe the category emphasize different aspects and become obsolete as the category evolves.

So “smartphones” were variously called a “camera phone,” “game deck,” or “PDA.” Sometimes the early labels just aren’t very good. Snowboards were first called Snurfers. There is a fine line between a brand like Telsa creating a subcategory label and being an exemplar for a category that is not defined by any label but by a set of characteristics that may be a half dozen or more in number.

“The only way to grow, with some exceptions, is to innovate and create “must-haves” that define a new subcategory.”

Creating a label means that the brand has more control over the subcategory. A brand that aspires to be the category leader should make an effort to be the brand that introduces the dominant label, or identifies it early and becomes its exemplar. The goal is to infuse the category with the characteristics on which the brand is strong so that the brand can obtain exemplar status. Think of stories like Burton, who created the Snowboard label and proceeded to imbue it with characteristics that the Burton board excelled at.

Parity with Defining Characteristics of the Category

A late mover needs to conform to the label and demonstrate parity with respect to the defining characteristics of the category. The assumption is that the category, when defined by a dominant label, is unlikely to change in any brand idiosyncratic way. In overlaying my ideas onto the research stated in the article, I would make the following observations.

1. While category dynamics are important, there is actually more action in subcategories because they occur more frequently. So instead of accepting a fixed category and striving to become relevant, a latecomer should try to innovate and add a new “must-have” to the category thereby creating a subcategory for which the brand can dominate.
2. The concept of reliance helps the dynamics with respect to subcategory (and category) competition. A goal of category or subcategory creation is to make all other options irrelevant. Competitive brands lose not just because they are not preferred, but rather because they are not considered. One objective of the dominant brand is to manage the subcategory definition over time, changing or adding “must-haves” so that it’s harder for competitors to stay relevant. They are always on the defense fighting a relevance challenge.
3. There are times when the label of a subcategory (or category) is the brand itself. Xerox represents copy machines, and Google represents search engines. People “Xerox reports” and “Google it.” Tesla competes in the “electric vehicle” category but because of its set of “must-haves” it really defines a subcategory of which it is the only member. It thus achieves the ultimate goal of subcategory-based competition—forming a subcategory in which all competitors are irrelevant.
4. There are times in which a subcategory gets a very descriptive label such as “low fat” or “organic” food. The exemplar brand often gets to define the subcategory. Making it complex can mean the customer might have a hard time understanding and recalling the boundaries. However, it also means that competitors will have a hard time becoming a relevant player. I have suggested elsewhere that subcategory (and category) competition can be more important than brand competition. The ability to develop and control good labels is part of the process.

For more on my thoughts of the topic, see my books Brand Relevance and Aaker on Branding.

Brand building is key for sustained, positive customer relationships that lead to increased recognition and sales. How do you build a brand?

It starts with a brand vision, which provides an articulated description of the aspirational image for the brand: what you want the brand to stand for in the eyes of customers and other relevant groups, such as employees and partners. It ultimately drives the brand-building component of the marketing program and greatly influences the rest.

When the brand vision clicks, it will reflect and support the business strategy, differentiate the brand from competitors, resonate with customers, energize and inspire employees and partners, precipitate a gush of brand-building ideas, and generate consistent, “on-brand” brand building over offerings and segments. When absent or superficial, the brand will drift aimlessly, and marketing programs are likely to be inconsistent and ineffective.

7 Steps for Building a Successful Brand

When building a brand, use the brand vision model (formerly the brand identity model) as your starting point, as it provides the structural framework for the development of a brand vision with a point of view that distinguishes it from others in several ways.

Follow these seven initial steps, based on the brand vision model, when building your brand:

1. Define the Key Elements of Your Brand

It may be based on six to 12 vision elements. A single thought or phrase cannot define most brands, and the quest to find this magic brand concept can be fruitless or, worse, can leave the brand with an incomplete vision missing some relevant elements. The vision elements are prioritized into the two to five that are the most compelling and differentiating, termed the “core vision elements,” while the others are labeled “extended vision elements.”

The core elements will reflect the value propositions going forward, and drive the brand-building programs and initiatives. For the University of California, Berkeley Haas School of Business’s brand, for example, they are: “question the status quo,” “students always,” “beyond yourself” and “confidence without attitude.”

2. Identify Extended Vision Elements

They add texture to the brand vision, allowing most strategists to make better judgments as to whether a program is “on brand.” The extended vision affords a home for important aspects of the brand, such as a brand personality, that may not merit being a core vision element, and for elements, such as high quality, that are crucial for success but may not be a basis for differentiation.

Such elements can and should influence branding programs. Too often during the process of creating a brand vision, a person’s nominee for an aspirational brand association is dismissed because it could not be a centerpiece of the brand. When such an idea can be placed in the extended vision, the discussion can go forward. An extended vision element sometimes evolves into a core element, and without staying visible throughout the process, that would not happen.

3. Customize the Model to Your Brand’s Specifics

Key elements of your business— what types of good or services you offer, how you interact with customers, and what segment of the market you serve, to name a few— affect how you should use the brand vision model. Organizational values and programs are likely to be important for service and B-to-B firms but not for consumer packaged goods, for example. Innovation is likely to be important for high-tech brands but less so for some packaged goods brands. Personality often is more important for durables and less so for corporate brands. The dimensions that are employed will be a function of the marketplace, the strategy, the competition, the customers, the organization and the brand.

4. Prioritize Brand Associations

It is the associations that the brand needs to have going forward, given its current and future business strategy. Too often, a brand executive feels constrained and uncomfortable going beyond what the brand currently has permission to do. Yet most brands need to improve on some dimensions to compete and add new dimensions in order to create new growth platforms. A brand that has plans to extend to a new category, for example, probably will need to go beyond the current image.

5. Find Your Brand Essence

When the right brand essence is found, it can be magic in terms of internal communication, inspiration for employees and partners, and guiding programs. Consider “transforming futures,” the brand essence of the London Business School; “ideas for life” for Panasonic; or “family magic” for Disneyland. In each case, the essence provides an umbrella over what the brand aspires to do. The essence always should be sought.

However, there are times when it actually gets in the way and is better omitted. Mobil (now ExxonMobil) had leadership, partnership and trust as the core brand vision elements. Forcing an essence on this brand likely would be awkward. If the essence does not fit or is not compelling, it will soak up all of the energy in the room. In these cases, the core vision elements are better brand drivers.

6. Adapt Your Brand to Product-Market Contexts

Having the same brand vision in all of your brand’s product-market contexts is elegant and convenient but not feasible in today’s complex marketplace. The goal should be to create strong brands everywhere, not the same brand everywhere. Managers need flexibility to adapt the brand to their context while still avoiding programs that are inconsistent with the vision. The brand vision can be adapted in several ways. Those employing the brand in different brand contexts can emphasize different elements of the brand vision, can interpret vision elements such as quality or innovation differently or can augment the vision with additional elements.

7. Create a Communication Guide Using Brand Position

The current positioning often emphasizes the brand vision elements that will appeal and are now credible and deliverable. As organizational capabilities and programs emerge or as markets change, the positioning message might evolve or change. The centerpiece of the position often is a tagline communicated externally that need not and usually does not correspond to the brand essence, which is an internally communicated concept.

“When the brand vision clicks, it will reflect and support the business strategy, differentiate the brand from competitors, resonate with customers, energize and inspire employees and partners.”

What is your higher purpose? Sales and profit goals can no longer be the prime motivator if they ever were. In my book, Aaker on Branding, I note that more and more brands have a higher purpose that is meaningful. It is increasingly becoming more about “why” in addition to “what.” A higher purpose can provide inspiration, an aspirational goal, a work-together logic, respect, motivation for social programs and paths to growth. In particular, it can:

Inspire employees

P&G’s purpose to improve the lives of the world’s consumers, now and for generations to come elevates the work experience of all employees. General Motors’ passion for “earning customers for life” affects employee decisions on a day-to-day basis.

Set a high aspirational performance bar that can stretch the organization

Apple’s Steve Jobs famous mission to create “insanely great products” removed the ceiling from product development at Apple. The Virgin mission, “to embrace the human spirit and let it fly” provides energy to employees to be sure.

Help promote cross-silo collaboration

Develop a common purpose that encourages people to perceive colleagues as teammates instead of being irrelevant or competitors. Employees should inherently ask, “How can I make us succeed?” before “How can I get ahead?” IBM has used its drive toward “a Smarter Planet” to overcome the inhibiting power of silos units by providing a rationale for creating and leveraging synergy.

Provide a route to customer relationships

Abbott’s quest to help customers live life to the fullest provides a way to connect that means something. Patagonia is the ultimate in having environmental considerations in their heritage, products and programs, and that attracts customer loyalty among those that share their values.

Provide an umbrella under which a host of social programs can live

Nike’s passion for sports and fitness has led to programs to create facilities that enable more kids to participate. PepsiCo’s intent to have a positive imprint on society and to become a truly sustainable company provides a home for a host of social programs.

Stimulate growth options

Roche’s diabetes team has a higher purpose, to “enable people with diabetes to live their lives as unrestricted as possible.” It’s a purpose that provides direction for both product development and brand building. Further, it can foster innovation. If Crayola conceives itself as making crayons that would define a narrow production/sales operation. But if its goal is “to help parents and teachers raise inspired, created children” there are a host of routes to product innovation.

“A higher purpose can provide inspiration, an aspirational goal, a work-together logic, respect, motivation for social programs and paths to growth.”

Nearly all firms that look to a higher purpose have several or even many of them, each of which direct programs. For example, Unilever has a set of purposes that include sustainability (the Unilever Sustainable Living Plan), give, a better future for children (oral health and nutritional programs), and a healthier future (the hand-washing program that reached over 200 million people in 2012), enhancing women self-esteem (Dove’s Campaign for Real Beauty), and more. Whole Foods Market strives to provide the highest quality natural and organic products, strives to “delight and nourish” customers, serve and support the local communities, and celebrate the sheer love and joy of food.”

What strategies are behind the success of Uniqlo, a Japanese casual wear designer, manufacturer and retailer?

I was recently in the Uniqlo store on 34^th street in Manhattan and was blown away by the quality and styling of the clothing, the store size and product scope, the presentation, the breathtakingly low prices, the service experience, the innovations and the energy. How did Uniqlo pull that off?  And why has Uniqlo experienced dramatic profitable growth over two decades?

“In fiscal 2014 it will continue a sharp sales trajectory with sales around 14 billion dollars.”

In 1994 it had approximately 100 stores in Japan. In 2015, it will have 840 stores in Japan and 1,170 stores outside of Japan, 820 of which are under the Uniqlo brand (and another 270 under the GU brand, which is a low-priced version of Uniqlo). In fiscal 2014 it will continue a sharp sales trajectory with sales around 14 billion dollars becoming a top-five global “own brand” clothing retailer.

6 Key Strategies Behind the Success of Uniqlo

Uniqlo’s success didn’t just happen by chance. There are certain strategies that have been key contributors to the company’s noteworthy progress. Here are six key elements that other brands can learn from.

1. Uniqlo has a clear vision of its brand.

To provide high-quality, performance-enhanced, basic casual wear at the lowest prices. Its clothing is up-to-date and fashionable, but not trendy.

Its fabric innovation and in-house design provide exceptional and unique functional performance. Uniqlo provides “made for all’ clothing that can be worn whenever and wherever. It is not, like some competitors, a firm that sells copies of the latest runway fashions.

2. Uniqlo brands its innovations.

This provides substance to its quality and performance positioning and sets it apart from most price-driven, value retailers. One of their signature innovations is HeatTech, a fabric developed in conjunction with a material science firm that turns moisture into heat and has air pockets in the fabric to retain that heat.

The HeatTech fabric is thin, comfortable and enables stylish designs very different from the standard for warm clothing. The HeatTech innovation keeps improving over time with new fiber technology. In 2003, 1.5 million HeatTech products were sold while in 2012 over 130 million units were sold over 250 items.

Not to mention their AIRism (a stretchy fabric) and Lifewear (a blend between casual and sportswear) technologies and more. All are branded, which means competitors have an uphill struggle to match this point of differentiation.

3. Its operational strategy gives it both a cost and agility advantage.

Its low-cost operation is based on Uniqlo’s ownership of product planning, design, manufacturing and distribution. The direct link between the stories and a stable group of suppliers means that what is being sold is directly translated into manufacturing orders.

There is no six or nine-month planning cycle, but stock is upgraded in weeks or even days. The customer thus has a direct influence on the ordering process, because what is being made is based on what they are buying.

4. The driving force is a charismatic owner-founder.

Tadashi Yanai is a hands-on leader who supports a strong, unique culture that is hard to duplicate. His influence is everywhere, as the values and goals of Uniqlo are translated into processes, measures, organizational structure and people. The organization is flat, and employees are encouraged to make suggestions.

He made a decision, a very rare one in Japan, to conduct all the business of the firm in English. Without question, this has enabled international success. He also has managed to avoid the most serious silo problems that hold back most Japanese firms, in fact, most firms, which go global. The culture he has put in place supports innovation, customer experience, teamwork and organizational goals.

5. The emphasis on the in-store experience is over-the-top.

And, it involves hiring, training, and micro-managing all touchpoints. Every activity undertaken by every employee, from a person’s folding technique to the way advisers (floor salespeople are called advisers) return charge cards to customers (Japanese style, with two hands and full eye contact) are recorded and analyzed. Each morning, employees practice the ways in which they are taught to interact with shoppers including the six standard phrases such as “Hello, my name is (blank), how are you today?” The financials are completely transparent, and sales are charted and posted each day. The firm is now building a Uniqlo University in Tokyo where 1,500 new store managers will be trained each year.

6. The firm thinks big.

Yanai wants to move beyond the primary mission to enrich people’s lives by providing truly great clothing to offer customers everywhere the world’s best stores, services and products. He wants to exceed Zara and become the top private label retailer in the world. Already tied for the number 2 brand spot in Japan (and HeatTech is in the top 50), Yanai wants to become the number one brand in every country where Uniqlo operates.

In 2004, that ambition grew as the Uniqlo Way was developed under the theme, “Changing Clothes. Changing conventional wisdom. Change the world.” There is an element of corporate social responsibility there that shows how serious Uniqlo is about contributing to the world. Their recycling effort, for example, has moved tens of millions of discarded Uniqlo clothing to needy people around the world.

Test your organization by asking employees two questions.

• What does your brand stand for?
• Do you care?

If employees are unsure of the brand vision or don’t care, there is little chance that you will successfully implement your business strategy. There are several benefits to having a strong internal brand. A clear, compelling internal brand provides direction and motivation to employees and partners. People and teams will be more likely to know if a decision or program is “on-brand” if the internal brand is successfully communicated.

The internal brand can inspire employees to find and implement creative, breakthrough brand-building programs, to stretch for a “big” idea. An employee base that is energized by a strong brand will be motivated to talk about the brand to others on social media and elsewhere. A solid brand, especially one with a vision that includes a higher purpose, is likely to provide an employee with meaning and job fulfillment. An activated internal brand strategy can support the organizational culture which can be a foundation of a strategy and its implementation. As Peter Drucker once said “culture eats strategy for lunch.”

So how do you communicate the brand to employees?

There are three stages involved: learning about the brand vision, believing the vision and that the brand can deliver it and living the brand by feeling inspired, empowered and becoming a brand advocate internally and externally.

Learning About the Brand Vision

The learning path can and should involve all the communication vehicles available such as newsletters, workshops, brand videos, brand books and personal efforts by individuals such as brand ambassadors, senior managers and influencers.

A brand vision can both capture the vision and reflect its importance to the culture especially if the CEO uses it regularly. But the learning effort should go beyond communication. It should link the vision to the business strategy and make clear that there is a reason for it to live. Executives explaining the “what and why” behind the business strategy and the role of the internal brand vision should play a key role in person. The learning effort can be motivated by highlighting gaps between the aspirational brand vision and the current reality.

Believing in the Brand Vision

Problems such as “the customer experience is not on-brand” or “the innovation stream is not adequate” can be posed to get traction. If there is excessive focus on the vision itself, there is a risk of precipitating an “I disagree” position. The believing stage involves putting substance behind the vision to signal organizational commitment. Three steps can make the point.

1. Put visible programs in place to make the brand vision and its associated business strategy actually succeed. That might mean a culture-changing training program, offering an innovation plan, an advertising program or a customer experience enhancement. It should have substance and will involve investment.
2. Align the evaluation and reward people and programs around the new initiative. Measurement and rewards drive behavior. In the early 1990s, IBM was poised to be broken up into seven parts, but CEO Lou Gerstner entered with a brand vision to deliver integrated solutions for clients—solutions that spanned the firm. As part of his culture-changing effort, employee evaluation was changed to emphasize organizational rather than silo performance and the company added a dimension reflecting the ability of people to demonstrate cross-organization cooperation. This sent a huge signal to the firm.
3. Create a brand champion—an individual or a team that is in charge of the brand vision and willing to carry the flag. He or she should be a primary internal brand spokesperson and communicate the brand idea to colleagues and encourage them to find creative ways to communicate the brand to others. The brand champion might create a team of brand ambassadors—credible people to represent the brand throughout the organization.

Living the Brand Vision

The living stage, where people are inspired to action, is the most difficult and crucial. Participative workshops where employees are asked to build visual montages, find role models, evaluate existing programs, portray a customer interaction or develop new programs can play an important role. Task forces can add energy, visibility and action. Microsoft, for example, has the “Microsoft Green Teams” that look for ways to further the “green” initiative through outreach programs into the community or through internal communication programs.

“An activated internal brand strategy can support the organizational culture.”

Getting employees in front of customers can be one way to make the brand vision come alive. P&G, for example, puts executives in front of customers regularly in the home (living it) and in the store (with shop-alongs or as behind-the-counter participants). Zappos.com encourages its people to engage by tweeting, and more than 500 do so regularly. An organization that lives the brand will use brand values as a criterion for selecting and retaining employees. Zappos.com has values that include delivering “wow” experiences and being a bit weird. One of the screening questions is to name something weird that you have done.

The Zappos trial period evaluation focuses on a fit with its brand values. Harrah’s, which hires people who are exceptionally upbeat and positive, holds an “American Idol”-type audition with a set of judges to screen candidates. The Haas School of Business admits students in part by how well their personality matches the school’s values. Power brands are built from the inside out, and internal branding needs to be a priority. It must go far beyond brochures and a CEO pep-talk.

There is a compulsion to focus in on functional benefits. It comes perhaps from the legacy of the Rosser Reeves unique selling proposition that brought us the candy that “melts in your mouth instead of your hand.” A functional benefit is appealing. Our instinct, especially if we reside in the high tech or a B2B sector, is to assume that customers are rational and will be swayed by functional benefits.

Further, when asked why customers buy this brand or avoid that one, we assume they will give functional reasons. The resulting insights often have an inordinate influence on strategy. But we have too much evidence from behavioral economists and market researchers that shows customers are far from rational. We see it every day. Even an airline, when buying a plane, will, in the end, be influenced by their gut even with piles of proposal details in front of them.

“When a brand provides a self-expressive benefit, the connection between the brand and the customer is likely to be heightened.”

In most contexts, customers lack the motivation, the time, the information or the competence to make decisions that will maximize performance outcomes and project functional benefits from other brand associations. Even worse, strategies based on functional benefits are often strategically ineffective or limiting:

• Customers may not believe that a brand has a functional advantage because of competitors’ conflicting claims, and they may not believe the benefit represents a compelling reason to buy the brand.
• If the functional benefit represents a point of differentiation, competitors may quickly copy it.
• The benefit may not represent a basis of a strong, long-term relationship because there is no emotional attachment.
• A strong functional association confines the brand, especially when it comes to responding to changing markets or in exploring brand extensions.

A Crest that is about toothpaste will be less able to win in other categories than a Crest that enables people to feel healthy and shine confidently in social settings. Thus, it makes sense to move beyond functional benefits and consider self-expressive, social and emotional benefits as a basis for the value proposition.

Self-Expressive Benefits

Brands and products, as symbols of a person’s self-concept, can provide a self-expressive benefit by providing a vehicle by which a person can express his or her self. “When I buy or use this brand, I am___.” A brand does not have to be Harley-Davidson to deliver self-expressive benefits. A person can be cool by buying clothes at Zara, successful by driving a Lexus, creative by using Apple, frugal and unpretentious by shopping at Kmart, or adventurous and active by owning REI camping equipment.

Using a Schwab account is a signal that a person can manage an investment portfolio. When a brand provides a self-expressive benefit, the connection between the brand and the customer is likely to be heightened. For example, consider the difference between the brand connection of using Lancôme, which may heighten one’s self-concept of being sophisticated, exotic, and mysterious versus using Jergens or Vaseline Intensive Care Lotion.

Social Benefits

The drive to have friends, colleagues, family and groups with common interests is intense and can generate immediate and long-term rewards. People are not only fulfilled with social relationships, they are influenced as well. Many brands have the capability of participating or even driving social benefits. “When I buy or use this brand, the type of people I relate to are ____.”

There are several types of social benefits. The Hyatt brand has focused on enabling a social feel and experience. Sephora created a community with Beauty Talk that provides a social dimension to the brand. Others can involve affinity groups: “When I go to Starbucks I am part of a closed club of aficionados, even if I don’t interact with any.” Still others can involve aspirational groups: “When playing with a Titleist Pro V1, I am among a group that contains some really good golfers.”

Emotional Benefits

An emotional benefit relates to the ability of the brand to make the buyer or user of a brand feel something during the purchase process or use experience. “When I buy or use this brand I feel___.” Thus, a customer can feel safe in a Volvo, excited in a BMW, refreshed with Coca-Cola, or warm when receiving a Hallmark card. Evian associated itself with the satisfied feeling that comes from a workout with its “Another day, another chance to feel healthy” tagline. Cars.com takes the stress out of the car buying experience.

Emotional benefits add richness and depth to the brand and the experience of owning and using the brand. Without the memories that Sun-Maid raisins evokes, the brand would border on commodity status. The familiar red package links many users to the happy days of helping mom in the kitchen (or the idealized childhood for some who wished that they had such experiences.) The result can be a different user experience, one with feelings and a stronger brand.

For those involved with building a brand, there are certain challenges to keep in mind that are essential to your success.

After writing my latest book, Aaker on Branding, a book that contains an overview of 20 key branding principles, I included an epilogue that identifies 10 additional branding challenges to keep in mind as you work to build your brand. If you are involved with building a brand or brand portfolio, you will benefit from appraising how you are facing each of the challenges below:

1. Treating brands as assets

The ongoing pressure to deliver short-term financial results coupled with the fragmentation of media will tempt organizations to focus on tactics and measurables and neglect the objective of building assets.

2. Possessing a compelling vision

A brand vision needs to differentiate itself, resonate with customers and inspire employees. It needs to be feasible to implement, work over time in a dynamic marketplace and drive brand-building programs. Visions that work are usually multidimensional and adaptable to different contexts. They employ concepts such as brand personality, organizational values, a higher purpose and in general they simply move beyond functional benefits.

3. Creating new subcategories

The only way to grow, with rare exceptions, is to develop “must have” innovations that define new subcategories and build barriers to inhibit competitors from gaining relevance. That requires substantial or transformational innovation and a new ability to manage the perceptions of a subcategory so that it wins.

4. Generating breakthrough brand building

Exceptional ideas and executions that break out of the clutter are necessary in order to bring the brand vision to life. These ideas and the execution of them are more critical than the size of your budget. “Good” is just not good enough. That means making sure you get more ideas from more sources, and that you make sure you have the mechanisms in place to recognize brilliance and bring those ideas to market – quickly.

5. Achieving integrated marketing communication (IMC)

IMC is more elusive and difficult than ever in light of the various methods you have to choose from such as advertising, sponsorships, digital, mobile, social media and more. These methods tend to compete with each other rather than reinforce because the media scene and options have become so complex, so dynamic, and because product and country silos reflect competition and isolation rather than cooperation and communication.

“A brand vision needs to differentiate itself, resonate with customers and inspire employees.”

6. Building a digital strategy

This arena is complex, dynamic and in need of a different mindset. The reality is, the audience is in control here. New capabilities, creative initiatives and new ways to work with other marketing modalities are required. Adjust the digital marketing focus from the offering and the brand to the customer’s sweet spot, which is to say the activities and opinions in which they are interested or even passionate about. Develop programs around that sweet spot in which the brand is an active partner, such as Pampers did with Pampers Village or what Avon did with their Walk for Breast Cancer.

7. Building your brand internally

It is hard to achieve successful integrated marketing communications or breakthrough marketing without employees both knowing the vision and caring about it. The brand vision that lacks a higher purpose will find the inspiration challenge almost impossible.

8. Maintaining brand relevance

Brands face three relevance threats: Fewer customers buying what the brand is offering, emerging reasons not-to-buy, and loss of energy. Detecting and responding to each requires an in-depth knowledge of the market, plus a willingness to invest and change.

9. Creating a brand-portfolio strategy that yields synergy and clarity

Brands need well-defined roles and visions that support those roles. Strategic brands should be identified and resourced, and branded differentiators and energizers should be created and managed.

10. Leveraging brand assets to enable growth

A brand portfolio should foster growth by enabling new offerings, extending the brand vertically or extending the brand into another product class. The goal is to apply the brand to new contexts where the brand both adds value and enhances itself.

While much attention is paid to building brands, too often the brand portfolio is neglected. The result is marketplace confusion, paralysis in naming new products, under-supported brands and misallocation of brand-building resources. We need to better identify brand roles and, more particularly, distinguish between the strategic brands and their roles.

A strategic brand is one with strategic importance to the organization. It is a driver of reputation, differentiation, loyalty, sales and cash flow. Identifying your strategic brands will be a huge step toward ensuring that brand-building resources are not misallocated.

In general, there are four types of strategic brands:

Current power brands

Current power brands will be the ones currently generating significant sales and profits and projected to maintain or grow their position. Large dominant brands such as Microsoft Windows or Coke Zero would qualify, as would high-energy growth brands such as Chobani or Dove.

Future power brands

These brands are the ones projected to generate significant sales and profit in the future. Future power brands may be small or even yet to be introduced, but they earn status because of their potential and place in the portfolio of the future.

Linchpin brands

These will indirectly influence (as opposed to generate) significant sales and market position in the future. These brands are the linchpin or leverage point of a major business area or of a future vision of the firm and are likely to be branded differentiators. Hilton Rewards is such a brand for Hilton Hotels because it represents the future ability to control a substantial and critical segment in the hotel industry—travelers involved in loyalty programs.

Niche brands

Niche brands have become dominant in a profitable niche market but will not become power brands. They do have a strategic role in controlling a market that has value in generating profits and enhancing a brand’s image. It could be an upscale market entrant such as Mobil 1 or GE Monogram that provide both margin and image enhancement. Or it could be a protected niche, such as Yoplait’s Go-Gurt.

One classic problem is that future power brands and lynchpin brands get starved of resources. The current power brands and often the niche brands as well receive the lion’s share of both the budget and the organizational power. Often there is no organizational mechanism to take a total portfolio view, thus the brands of the future get starved.

“The current power brands and often the niche brands as well receive the lion’s share of both the budget and the organizational power.”

A second problem is the danger of wishful thinking from optimistic brand managers that will result in an excessive number of strategic brand nominees. The new brands and offerings become vested with substantial professional and personal commitment, which results in over-branding and too many strategic brands. The result is underfunding and an inability of the portfolio brands to become successful.

Sometime in the late 1980s, an explosive idea emerged that brands are assets, have equity and drive overall business strategy and performance. That idea altered perceptions of what marketing does, who does it, and to what end is its purpose. It’s also the focal point of the first chapter of my latest book, Aaker on Branding. It truly transformed marketing, comparable in impact to other transformational ideas that have appeared in the last century such as mass marketing, segmentation and globalization.

“Brands are assets, have equity and drive overall business strategy and performance.”

When firms adopt this asset view of branding, marketing is no longer perceived as a tactical arm of the business run by middle and lower-level managers (or an outside agency) in order to generate short-term sales for a single brand, offering and organizational unit. Rather, marketing is seen as:

Strategic and visionary

Marketing contributes to the business strategy through its first-hand knowledge of customer insights and marketplace trends, plus its expertise with respect to segmentation, brand portfolio strategies, the value proposition, growth strategies and global brand strategies.

Being managed by top executives

From a strategic view, the brand is usually managed by people higher in the organization, often the top marketing professionals in the business organization. For marketing-driven organizations, the ultimate brand champion can be the CEO. In any case, marketing now gets a seat at the strategy table becoming a participant at creating and managing the business strategy.

Charged with building brand assets

Shifting the emphasis from tactical measures such as short-term sales to strategic measures of brand equity and other indicators of long-term financial performance is a monumental change. The guiding premise is that strong brands can be the basis of competitive advantage and long-term profitability going forward. A primary brand-building goal will be to build, enhance or leverage brand equity, the major dimensions of which are awareness, associations and loyalty of the customer base.

Leveraging brand assets

When a brand is viewed as an asset, the opportunity will arise to leverage that asset to generate growth. It can be used as a master brand or perhaps as an endorser to support a vertical extension or a strategic entry into another product class by providing awareness, credibility, customer relationships and positive associations. It can also be used to frame a subcategory, thereby rendering competitor brands less relevant.

Managing the brand portfolio

As offerings and brands proliferate, it’s clear that marketing needs to manage the brand family to foster clarity, synergy, energy, relevance and leverage. That means that each brand needs to be assigned well-defined role sets and managed so that they are successful in those roles. The possible brand roles include strategic brands, cash-cow brands, master brands, endorser brands sub-brands and more.

Addressing the organizational silo issues

Nearly all brands span different silo organizations defined by products, markets or countries. Marketing is charged with fostering communication and cooperation across silos without which there can be inefficiencies, lost opportunities to scale effective programs and brand diminution. The brand-as-asset view has faced resistance for various reasons. The power of short-term financials is overwhelming and pay-off from brand building is difficult to quantify, especially in the short term. Building brand assets is no easy feat. Nevertheless, the time has come to prioritize brands as assets – its impact on marketing can be transformational.

The concept of brand equity and the science and practice of building and managing brands strategically have been with us for more than a quarter-century. Taking stock, what are the most powerful and impactful ideas that have emerged during that time?

I addressed that question when writing my book, Aaker on Branding: 20 Principles That Drive Success. Drawing on my previous branding books, my articles and the work of others in the field, I identified some four dozen ideas and packaged them into 20 principles. The result is an overview of what has emerged during the brand era that has allowed strong brands to win in tough marketplaces. Of these ideas, here are the home runs that have changed, if not transformed, marketing:

Think of brands as assets, with strategic value

In the late 1980s, the idea that a brand was an asset with equity began to get traction. That concept has since transformed marketing, which had been dominated for a half-century by the tactical view of marketing developed in the halls of Procter & Gamble. Starting in the ’80s, marketing was managed by a CMO who had a seat at the executive table. Marketing was now intimately involved in—if not a driver of—business strategy, and was no longer relegated to being a tactical arm. Marketing was now measured by brand equity in addition to short-term sales, and marketing resources were allocated to strategic brands and programs rather than to the big silos rich with funds and political power.

We have seen mass marketing, segmentation and globalization as transformational ideas in marketing. Considering brands as assets with equity should be in that set.

Communicate a multidimensional, strategic and flexible brand vision

There was a time when markets were stable, segmentation was simple, and a brand just needed a unique selling proposition that could be captured in a three-word phrase and worked everywhere. No more. A brand vision for today should be multidimensional and allow the brand to express itself. Some brands will aspire to have a personality that adds interest and energy as well as communicates attributes. Some may feature organizational values that provide a point of differentiation. Some will deliver social or self-expressive and functional benefits. What will differentiate and resonate will depend on the brand context and the brand strategy going forward. The brand vision thus cannot be constrained by a “fill in the box” model with pre-specified dimensions and no sense of priorities.

A brand vision should be strategic. It should reflect not only the existing offering but also the role that the brand will play in future offerings and in supporting other brands. The brand vision also should be flexible, as the goal should be to have strong brands in every product category or country. The adjustment can be made by interpreting a vision dimension differently, by changing the priority within the vision or by augmenting the vision in some contexts, and it may change as the market and strategy changes.

Find opportunities to create new subcategories

Growth, with some exceptions, only occurs by engaging in transformational or substantial innovation that creates “must-haves” that define new subcategories. Brand teams thus need to nurture “big” innovations in offerings, services or programs. One implication is that the competition in dynamic categories is shifting from “my brand is better than your brand” marketing to the creation of subcategories, and to managing their defining image so that the right subcategory wins, and so that your brand is the most—or the only—relevant brand.

“Subcategories have to be protected or the advantage of the innovator can be short-lived.”

Another implication is that subcategories have to be protected or the advantage of the innovator can be short-lived. One way to protect a subcategory is to brand the innovation, thereby creating a branded differentiator that can not only help communicate the “must-have,” but also provide a way to own it. Competitors can copy the innovation but not the brand.

Look to the customer sweet spot instead of selling the offering, brand or firm

The driving logic is that customers will seek out, discuss and be engaged in what they are interested in, and, with rare exceptions, offerings or firms do not qualify. The alternative is to become an active participant using a shared interest program around a customer’s “sweet spot.” For example, Pampers went beyond diapers by “owning” a “go-to” website for baby care.

A sweet spot reflects customers’ “thinking and doing” time, beliefs and values, activities and passions or possessions. Ideally, it would be a part of, if not central to, their self-identity and lifestyle, and reflect a higher-order value proposition much beyond the benefits provided by the offering. Connecting with a shared interest area provides avenues to a relationship much richer than that of an offering-based relationship. The positive feelings associated with the shared-interest area can lead to positive feelings about the brand. Further, people attribute all sorts of good characteristics to brands that they like, and with which they share values and interests. And a shared interest program should stimulate a social network because people talk about what they are interested in.

Manage the brand portfolio strategically

Naming a new product on an ad hoc basis potentially leads to brand confusion, brand damage and the loss of an opportunity to build brand platforms to support future strategies. Instead, a new product should have a brand that will support the new offering, will enhance the brand and will be effective in needed roles when additional products make their appearance. Branding new products strategically involves working with the brand relationship spectrum where descriptors, sub-brands, endorsed brands and shadow endorsers are employed to control the distance from the master brand. A sub-brand will allow some distance from a master brand, an endorsed brand more, a shadow endorser even more and a new brand the most.

Vertical extensions are risky but sometimes necessary when business realities dictate a vertical move. When moving into a value market, a brand may be put at risk, and even a strong brand may lack the prestige and credibility to support a super-premium offering. The use of a sub-brand or endorsed brand can reduce such risk when creating a new brand simply is not feasible.