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aaKeR on BRanDing

three Ways to Build a

Competitive, Compelling,
purposeful Brand
By DavID aakEr


n my view, there are three accelerating branding

trends that are affecting nearly every business. The
winners of tomorrow are going to be riding these
waves, rather than swimming against them.

First, there is a trend from brand

preference competition to subcategory
competition. Brand preference
competition, driven by incremental
innovation and my brand is better than
your brand marketing, rarely results in
growth and is so not fun. Subcategory
competition, driven by substantial
innovation that creates new must haves
in the marketplace that define new
subcategories for which competitors are
not relevant, is almost always associated
with any meaningful brand growth spurt.
The evidence that subcategory
competition is driving growth is
abundant. For me, the insight started
with my analysis of some 40 years of
Japanese beer data. During that time,
there were only four major changes in
market share trajectory, three of which
were caused by new subcategories being
formed or solidified: dry beer, ichiban
and happoshu. The fourth was when
two subcategories, dry and lager, were
simultaneously repositioned.
I have found the same pattern in dozens
of subcategories within the automotive,
financial services, computer, retail, water
and airline industries, and many more.
Growth, with rare exceptions, comes only
when new subcategories are formed. In the


automobile space, for example, we know

that was true for the Chrysler minivan,
Prius, Tesla and others. There are several
implications. Firms need:
To shift some investments from
incremental innovation to big
The ability to recognize what is a
must have in the marketplace and
what is not.
To become the representative or
exemplar of the new subcategory by
being its leader and spokesman. The
exemplar brand should evolve the
subcategory with new innovations
and refinements of existing ones
so that it becomes a moving target
for competitors wishing to become
The will and capability to manage
subcategories, rather than brands.
To own the subcategory by creating
barriers to competitors. One route is
to brand the must have innovations.
A branded technology, like Uniqlos
HeatTech fabric that retains heat,
is hard to duplicate because that
technology becomes proprietary.
Second, there is a trend from
communicating facts about the brand,

offering or firm to developing what I

call the customer sweet-spot content:
content that interests and involves
customers. The tragic reality is that
people are not interested in your brand,
offering or firm. They just arent. Find
out what they are interested in, what
activities occupy them, what they talk
about, what their passions arethe
customer sweet spot. Then find or
develop content around that interest
area with the brand as an involved
partner. That content, when it works,
will tend to be populated by stories in
addition to facts. For example, people
are not interested in:
Diapers, but they are interested in
baby care and Pampers Love, Sleep
& Play baby care site.
Cosmetic products, but they are
interested in beauty and Sephoras
Beauty Talk.
Farm equipment, but they are
interested in improving farming
and the rural lifestyle, and in John
Deeres Furrow magazine, which is
now more than 100 years old and is
read by more than 2 million farmers
around the world.
Hardware products, but they are
interested in building homes for the
homeless and thus Home Depots link
with Habitat for Humanity.
Beer, but those in Canada are
interested in hockey and the story
of 11 Canadians selected to play on
Molsons rink built in a remote valley
in the Canadian Rockies.
A sweet-spot-driven content program
almost always can create or enhance
perceptions and engender trust and
authenticity far more than the most
meaningful product advances told by
the cleverest advertisements. Further,
sweet-spot programs can generate brand
energy, an increasingly important brand
characteristic and one that can seldom
be product-driven. This energy can
stimulate a social network, the elusive
holy grail of many marketing efforts.
A sweet-spot program also elevates
the role of signature or strategic stories.
The story of Leon Leonwood Bean,

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aaker on branding

buzz bit

who invented a boot in 1912 with a

rubber bottom when he got tired of
wet feet after hunting, represented for
a century the L.L.Bean firms interest in
innovation, quality, customer satisfaction
and the outdoors. The story about how
a Nordstrom employee in Fairbanks,
Alaska, after only two weeks on the job,
took back two worn snow tires even
though Nordstrom never sold tires
represents employee empowerment and
customer concern at Nordstrom more
effectively than just communicating
policy standards.
Research has shown that when facts
are packaged into stories, they are
more attended to, more likely to be
remembered and more persuasive
by a huge margin. Brand building is
increasingly about content and stories
around customer sweet spots.
Third, the trend toward having and
elevating a higher purpose should
continue to grow. In addition to being
the right thing to do and addressing
real societal problems, a companys
higher purpose can provide inspiration
and meaning for employees. Being
engaged in reducing global warming or


enabling students to be more creative

is more rewarding than just increasing
sales and profits. And a higher purpose
can promote cross-silo collaboration
by providing a common goal that
encourages people to perceive colleagues
as teammates.
A higher purpose also can provide
a route to customer relationships.
Patagonia, the ultimate heritage
brand in the environmentally minded
corporate space, attracts customer
loyalty among those who share the
companys values. Crayolas goal
to encourage creativity in children
builds bonds between the brand and
parents. Starbucks quest to inspire and
nurture the human spirit one person,
one cup and one neighborhood at a
time means something to customers.
Even if a modest percentage of the
market is motivated to buy based on
the respect and shared values of the
higher purpose, the result can be the
difference between struggling in the
marketplace and success.
A higher purpose can beand often
issimply empty words. To make an
impact internally and externally, the

higher purpose needs to be, and to

feel, genuine and substantial. More and
more firms are supporting a higher
purpose with links to organizational
culture, assets, skills and strategies, and
with tangible, measureable objectives.
However, for the higher purpose to help
foster stronger customer relationships,
the companys higher purpose
and its outcomehas to be visible to
customers, for example, in the form
of environmental programs such as
Patagonias or products and programs at
Crayola that foster creativity.
Developing a must have innovation
that defines a new subcategory, creating
content that truly connects with
customers, and making a brands higher
purpose known and meaningful to
customers are huge branding challenges
going forward, but these trends represent
forces in the marketplace that are making
a real difference, determining winners
and losers. m
David Aaker is vice chairman of San
Francisco-based marketing consultancy
Prophet and author of Aaker on Branding:
20 Principles That Drive Success.

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