The concept of brand contract revolves around brand’s ability to always stay up to the expectations of consumers. Owing to the associations developed with the brands of their choice, consumers do not want to see those brands deviate from the strong impressions and image they have about those brands.
What consumers expect of brands is a positive change and development in relation to changing technologies, environment, and any other factors that may have a bearing on consumer behavior. To continually remain in favor of consumers, brands uphold consumers’ franchise by remaining up-to-date. This is the only way for brands to remain relevant.
For brands staying contemporary means bringing about innovations and living up to consumers’ likes and expectations. This further means engaging into a “contract”. In other words, brands must respect the contract, attract customers and assume all implications, which they do through fulfilling the promises.
Brands make promises with the customers by providing benefits and developing associations. Any deviations - lowering of quality, non-availability of brands at the point of customers’ choice, or not keeping pace with changing technologies - amount to not keeping the promise and hence in customers’ perception breaching the “contract”. The contract, as such, is not legal; it is purely economic and emotional in nature.
The need to stay contemporary
Because of the fact that we use brands day in and day out, brands are a part of our memories. These memories are developed over time through a series of brand experiences. The image of a brand, as such, grows out of cumulative memory, which basically is formed by brand’s associations and persona.
Whereas consumers expect to reap the same benefits always, the expectations they have must carry an element of contemporariness. To keep brands contemporary, that is keeping them belong to the present, we have to understand the memory part and the future part as a program. The memories deal with the past and future is managed through a well guided program that deals with the present and sets the ground for future evolution. Brand managers must define the ground where the brand belongs and carve out the territory from where it will grow in future. Memory is central to understanding how brands function and should be managedl.
The underlying program indicates the purpose and meaning of both former and future products. We should study brand’s history from production and marketing points of view and make them a basis of our moves for the future. The historical perspective enables us to maintain consistencies for our future moves.
Consistencies offer smooth transition from one era to another as part of the same program that continues on a perpetual basis. You never stop working on what is past and what exists as present. Understanding of the present on the basis of the past gets us into the future free of any distortions. The result is a strong brand character, which is contemporary in nature.
Through consistency and persistence over time, brands create loyal customers. Brand keeps the promise and in return customers buy the brand and the contract goes on.
Brand contract requirements
Maintenance of the brand contract is subject to certain requirement. It is not always easy. You may make a wrong move in trying to improve packaging and the outer looks of the brand that may fall out of consumers’ favor. You may introduce certain features in a consumer durable product that customers may see out of your brand’s character. You may adjust ingredients of your brand to achieve cost efficiencies, disappointing your customers in the process. Or, you may just not have the requisite resources to catch up with the latest technologies, thereby frustrating your customers of your inability to stay contemporary. In other words, there are constraints in seeing the contract go through at all times.
The brand concept, as a whole, assumes that branding requires internal as well as external marketing.2 Since brands set their own ever-increasing standards to stay “contemporary” they need company-wide support - internal marketing in addition to external marketing.
External marketing is subject to the quality of internal marketing that is in practice for any brand within a company. Conviction or lack of it among all employees of the company about maintaining brand’s promise can make or break a brand.
All functions of the organization must converge on one point to lend support to the brand. Only upon getting that kind of support, the brand contract can be maintained. Following are some of the requirements:
We can sum it up in the words of Scot Davis, “Brand contract is a set of promises that the brand makes to customers. It is created internally but defined and validated externally by the marketplace.”
Brand contract principles
There are four basic principles that we use in creating a contract1. The principles are pretty straight forward. Use the same market research that you used for brand image exercise. Add a few more questions and the model for research is ready. Never forget to include competition in your research projects. Without comparisons, you may not come up with the best contract.
Understand customers’ perspective
Go back to the sandwich project and see the kind of questions you should ask:
The basic objective is to make this exercise customer driven. You must take into account the opinions of the key purchase influencers. Be ready to face a few negative comments. Fix the situation if the comments make sense.
A hypothetical brand contract
With the understanding of mechanism of a contract, we can proceed toward hypothetically creating a brand contract of the fast food company we discussed earlier. This company has decided to talk about all the relevant promises on the package of the product. The terminology of “contract” is very intra-company and is not used when it comes to communicating with the market. Although not using any head is generally the norm of the market, this company has chosen to label its promises under the head of “product integrity”.
As brand manager, you may like to retain the above promises as they appear, discard a few, or make adjustments in line with the dynamics of the market. Even if you do not wish to communicate the above contract on the package, you must have this as guidelines for your own staff. Keeping all employees mindful of what the company wishes to deliver amounts to strengthening their commitment toward the product and stands as part of the internal marketing. Brand contract therefore represents total consensus and commitment on everyone’s part.
Since the contract is validated by the market, it is important that the market is adequately educated on all the promises and the factors that make those promises deliverable. Should the customers find the promises fulfilled, the contract stands upheld.
Promises change with changing strategies and circumstances. The fast food business started as lunch-time delivery service. Assuming that the service has been successful, the business would like to expand itself by creating small restaurants. The induction of restaurants will bring a change in promises, which may look like the following:
If customers feel the same kind of satisfaction from their product and service, it is a reflection of the brand contract that the management has created. That wins customers’ trust and gives the brand value and power.
Summary
Companies should be very careful and honest in understanding their target market first, the need they are going to satisfy, and the promises they are going to make. Good promises reflect good features of the product and benefits to customers.
Once used to good benefits, customers expect brands to continually offer those benefits and address values they endear. Not only that, brands must also stay contemporary to stay relevant on the scale. It is the contemporariness that upholds the contract a brand offers to its customers. Upholding the contract is the ultimate win-win situation for a brand. There are certain requirements that need to be fulfilled for the contract to stay valid in the marketplace. Toward that, internal marketing and mobilization takes the driver’s seat. Rest follows.
What consumers expect of brands is a positive change and development in relation to changing technologies, environment, and any other factors that may have a bearing on consumer behavior. To continually remain in favor of consumers, brands uphold consumers’ franchise by remaining up-to-date. This is the only way for brands to remain relevant.
For brands staying contemporary means bringing about innovations and living up to consumers’ likes and expectations. This further means engaging into a “contract”. In other words, brands must respect the contract, attract customers and assume all implications, which they do through fulfilling the promises.
Brands make promises with the customers by providing benefits and developing associations. Any deviations - lowering of quality, non-availability of brands at the point of customers’ choice, or not keeping pace with changing technologies - amount to not keeping the promise and hence in customers’ perception breaching the “contract”. The contract, as such, is not legal; it is purely economic and emotional in nature.
The need to stay contemporary
Because of the fact that we use brands day in and day out, brands are a part of our memories. These memories are developed over time through a series of brand experiences. The image of a brand, as such, grows out of cumulative memory, which basically is formed by brand’s associations and persona.
Whereas consumers expect to reap the same benefits always, the expectations they have must carry an element of contemporariness. To keep brands contemporary, that is keeping them belong to the present, we have to understand the memory part and the future part as a program. The memories deal with the past and future is managed through a well guided program that deals with the present and sets the ground for future evolution. Brand managers must define the ground where the brand belongs and carve out the territory from where it will grow in future. Memory is central to understanding how brands function and should be managedl.
The underlying program indicates the purpose and meaning of both former and future products. We should study brand’s history from production and marketing points of view and make them a basis of our moves for the future. The historical perspective enables us to maintain consistencies for our future moves.
Consistencies offer smooth transition from one era to another as part of the same program that continues on a perpetual basis. You never stop working on what is past and what exists as present. Understanding of the present on the basis of the past gets us into the future free of any distortions. The result is a strong brand character, which is contemporary in nature.
Through consistency and persistence over time, brands create loyal customers. Brand keeps the promise and in return customers buy the brand and the contract goes on.
Brand contract requirements
Maintenance of the brand contract is subject to certain requirement. It is not always easy. You may make a wrong move in trying to improve packaging and the outer looks of the brand that may fall out of consumers’ favor. You may introduce certain features in a consumer durable product that customers may see out of your brand’s character. You may adjust ingredients of your brand to achieve cost efficiencies, disappointing your customers in the process. Or, you may just not have the requisite resources to catch up with the latest technologies, thereby frustrating your customers of your inability to stay contemporary. In other words, there are constraints in seeing the contract go through at all times.
The brand concept, as a whole, assumes that branding requires internal as well as external marketing.2 Since brands set their own ever-increasing standards to stay “contemporary” they need company-wide support - internal marketing in addition to external marketing.
External marketing is subject to the quality of internal marketing that is in practice for any brand within a company. Conviction or lack of it among all employees of the company about maintaining brand’s promise can make or break a brand.
All functions of the organization must converge on one point to lend support to the brand. Only upon getting that kind of support, the brand contract can be maintained. Following are some of the requirements:
- Closely monitor the needs and expectations of the buyer. Carry out market research both to optimize the existing products and to discover needs that have yet to be fulfilled. This effort falls within the realm of marketing.
- React to technological progress as soon as it can create a competitive advantage for the brand. This signifies that operations department stays abreast of all developments and plays its role toward maintaining brand’s promise. Promise is delivered by keeping the brand contemporary through research and development in the operations department.
- Provide both volumes and quality. This requirement again is to be fulfilled by the operations department to make sure that repeat purchases take place. Insufficient volumes can undermine loyalty due to non-availability at certain points of sale and quality problems can jeopardize reputation of the brand and its loyalty.
- Deliver products to intermediaries (trade members) consistently over time for them to optimize the role they play in selling the brand. This responsibility belongs to shipping and sales. Both departments play significant roles in maintaining the vital supply chain.
- Give meaning to the brand and communicate its meaning to the target market through advertising, a function that is a hallmark of marketing department.
- Make sure that finances are available according to the budget and there are no disturbances in the cash flow of the company. This is a responsibility of the finance department and also sales that helps the finance department in getting receivable amounts.
We can sum it up in the words of Scot Davis, “Brand contract is a set of promises that the brand makes to customers. It is created internally but defined and validated externally by the marketplace.”
Brand contract principles
There are four basic principles that we use in creating a contract1. The principles are pretty straight forward. Use the same market research that you used for brand image exercise. Add a few more questions and the model for research is ready. Never forget to include competition in your research projects. Without comparisons, you may not come up with the best contract.
Understand customers’ perspective
Go back to the sandwich project and see the kind of questions you should ask:
- In purchasing our sandwich, what benefits you expected?
- Did it meet your expectations? If yes, how? If no, why?
- Tell us the most important aspects of product quality - taste, freshness, smell, size, filling, and overall presentation.
- What promises our brand makes?
- Do other brands make different promises? If yes, how?
- What really triggered your decision to buy our brand and do you see your decision worth making?
- What is it that we can do more to improve our service and product?
The basic objective is to make this exercise customer driven. You must take into account the opinions of the key purchase influencers. Be ready to face a few negative comments. Fix the situation if the comments make sense.
A hypothetical brand contract
With the understanding of mechanism of a contract, we can proceed toward hypothetically creating a brand contract of the fast food company we discussed earlier. This company has decided to talk about all the relevant promises on the package of the product. The terminology of “contract” is very intra-company and is not used when it comes to communicating with the market. Although not using any head is generally the norm of the market, this company has chosen to label its promises under the head of “product integrity”.
- The company promises to offer you world class quality of meat, and a compatible level of quality breads.
- The company maintains all the critical control points involved in maintaining the minus 20-degree temperature for its meat ingredients. It makes sure there is no bacterial growth in the vital ingredients.
- All other condiments have been selected with the sophistication of a world class chef for your eating pleasure.
- Our kitchen is immaculately clean; if you were to see that you not only will overindulge in eating but also recommend our sandwich forcefully to others.
- We undertake to deliver the order within 30 minutes.
- Our staff is efficient, skillful, and courteous who deliver on time with a smile.
- We claim to have revolutionized the lunch service - unique product that couples efficient service, and hence offer you a unique experience.
- The value for money that we offer is second to none. Compare our prices with those of competitors.
As brand manager, you may like to retain the above promises as they appear, discard a few, or make adjustments in line with the dynamics of the market. Even if you do not wish to communicate the above contract on the package, you must have this as guidelines for your own staff. Keeping all employees mindful of what the company wishes to deliver amounts to strengthening their commitment toward the product and stands as part of the internal marketing. Brand contract therefore represents total consensus and commitment on everyone’s part.
Since the contract is validated by the market, it is important that the market is adequately educated on all the promises and the factors that make those promises deliverable. Should the customers find the promises fulfilled, the contract stands upheld.
Promises change with changing strategies and circumstances. The fast food business started as lunch-time delivery service. Assuming that the service has been successful, the business would like to expand itself by creating small restaurants. The induction of restaurants will bring a change in promises, which may look like the following:
- Our restaurant is a modern, utility based set-up. No frills, no make-ups, straight forward, down to earth atmosphere and pricing make it an experience of a life time!
- The atmosphere is friendly, warm, and home-like in the real sense of the word.
- Our preparation procedures are highly industrialized, that is, we do the same thing again and again to maintain standardization.
If customers feel the same kind of satisfaction from their product and service, it is a reflection of the brand contract that the management has created. That wins customers’ trust and gives the brand value and power.
How to create a brand contract?
The objective of this lecture is to learn how a company should go ahead with creation of a brand contract in a way that its brand gets duly leveraged
The key to developing the contract lies in making the promises known to customers. The more customers are knowledgeable of the brand’s promises, the more they are inclined to be bound into a contract. A customer bound by a contract is a loyal customer.
Promises present themselves in two different forms - implicit and explicit. Implicit promises are taken for granted, that is, customers must see those delivered whether the brand talks about those or not. Tea is an excellent example of carrying implicit promises of smell, color, and taste regardless of what brand name it carries. Any good brand of tea has to have the features mentioned in the example.
Some promises are explicitly claimed through well-designed communication. A personal computer with features relating processor’s specifications, the size of the hard disk, and the capacity of the random access memory (RAM) have got to be communicated very specifically, not left to customers’ imagination. Any promises that the company makes but cannot deliver amount to a breach of the contract.
A brand contract may also contain some negative promises that must be eradicated from the contract. Negative promises creep into the contract due to company’s inability to address certain problems or challenges. One example of negative promises can be of an automobile company falling short on its promise of 3S - sales, spares, and service. If the company cannot cope with the challenge of maintaining free availability of spares at affordable prices, the company has unintentionally brought a negative promise into the contract.
As another example, think of a cellular phone company that may talk a lot about efficiency of service, low rates at particular time of the day, and many other options to its subscribers. If the service cannot catch up with the growing demand of customers by way of frequency distortions or non-connectivity, then the company has definitely brought into the contract a negative promise.
The two companies (car and cell phone) have to fix the negative contracts and then prove they no longer deprive the customers of their needs or inflict the service. Powerful brands have the resilience to bounce back if corrective action is taken in timely manner.
Companies should be very careful and honest in understanding their target market first, the need they are going to satisfy, and the promises they are going to make. Good promises reflect good features of the product and benefits to customers.
Once used to good benefits, customers expect brands to continually offer those benefits and address values they endear. Not only that, brands must also stay contemporary to stay relevant on the scale. It is the contemporariness that upholds the contract a brand offers to its customers. Upholding the contract is the ultimate win-win situation for a brand. There are certain requirements that need to be fulfilled for the contract to stay valid in the marketplace. Toward that, internal marketing and mobilization takes the driver’s seat. Rest follows.
Multi-Product Branding, also known as family branding, or corporate branding is when a company uses one brand name for all of its products within a class. The benefits of Multiproduct branding strategy is brand equity return, lower promotion costs, and growing brand awareness.
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