Do you have a business or a brand?

Just because you have a trademarked brand name does not mean that you have a brand. I make a strong distinction between a brand and business because while both of them are there to make money for their owners, they are structurally very different.

Let us first examine what a brand is. Different people have different definitions of what a brand is. Most of these definitions are very elaborate, complicated and impressive-sounding but like many things in life, the truth is actually a lot simpler. Plus, most branding definitions miss the point.

Brands exist only in the minds of customers. They are not something that is tangible. So, in order to define what a brand is, you have to look at what brands stand for in the minds of customers. A brand is simply an idea that you own in the minds of your customers. One idea. Not ten. Not a hundred. One.

If you want to know what a brand is all about, you find the one idea that the brand owns in the minds of customers. Take a look at the brands listed in the table below. These are strong brands because they each own one idea in the minds of their customers. Every strong brand that you can think off has one thing in common – they each own one big idea in the mind.

You can find out what idea (or ideas) that your brand owns in minds of your customers through a brand audit which is essentially a perception map of your brand. This is the minimum that you need to do because if you don’t even know how your brand is perceived, whatever strategy you put in place will be flawed. In 99.9% of brand audits that I have seen, what the company thinks the brand is all about is very different from what customers think!

A Brand Is Driven By Vision
How do brands get to own that one idea in the minds of their customers? They need to be driven by a vision. They are focused on one vision. They are obsessed with that vision. All they do is try to achieve that vision. They are willing to make sacrifices in order to achieve that vision.

For example, BMW is driven by the vision of being “The Ultimate Driving Machine”. It is not just a meaningless advertising slogan like what most car companies wave around. BMW is actually driven in all the things that it does by this vision. To make cars that drive like an ultimate driving machine should, BMW makes sure they have 50:50 weight distribution. They mount their engine so far back behind the front wheels that part of it is actually sitting in the passenger compartment. They even move the battery into the boot to ensure that this target is achieved. All of these compromises space but BMW is willing to accept that tradeoff. Because they are driven by a singular vision, BMW managed to become the best-selling premium car in the world. They have overtaken Mercedes-Benz, believe it or not.

What is your brand’s vision? Do you even have one? Is this a vision that is shared throughout the company? Is this a vision that unifies and drives the company in all its decision-making? Are you a BMW?

A Business Is Driven By Opportunities
A business is different from a brand because while it may have a vision statement, that vision statement is largely meaningless because nobody knows what it is, nobody cares, nobody believes in it, it doesn’t drive the company’s strategy and above all, it sounds exactly the same as what every other company is saying. Does that sound familiar to you?

A business is different from a brand because it is driven by opportunities rather than vision. While a brand will give up nine opportunities to chase the one that it really wants, a business will chase everything. Whatever makes money today,that is what a business will do. Very short term.

A brand will try to own 50% of one category while a business thinks that it is too risky to put all your eggs into one basket. A business would rather have 5% of ten categories. A finger in every pie. Does that sound familiar? If you try to have 5% of ten categories instead of 50% of one category, you put yourself at risk because any category that is mature or maturing will be dominated by the two top players. Take microprocessors. Intel and AMD own 98% of the market. I don’t even know who No. 3 is because it is just irrelevant. In database software, Oracle and IBM own 72%. In MP3 players, Apple and Creative own over 80%.

Most Singapore companies are businesses. They are driven by opportunities, not by a vision. Can you still make money if you are driven by opportunities rather than by vision? Yes, you can but without a strong brand, your business can be easily overwhelmed by competitors. Strong brands have the ability to fight off challengers more effectively.

If you have a strong brand, you can weather economic downturns better. I remembered a conversation I had with Professor Charles L. Massingham from the University of Hull some years back. He has done a lot of work in Asia and was troubled to find that 90% of Asian companies are fundamentally weak. They do well when the economy does well. In a downturn, they can be wiped out overnight. And the Asian Financial Crisis did just that.

So, let’s get back to question I asked in the title of this article. Do you have a business or a brand? Be honest with yourself. If you don’t have a brand, you should start to build a strong brand now before it’s too late. The Chinese and Indian companies are learning fast. Plus, they have scale and cheap labor on their side. If you don’t have a brand, how are you going to survive? 

Jacky Tai, Principal Consultant, StrategiCom