David Aaker Dont Let Your Brand Become Irrelevant

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You may think you know a thing or two about marketing. But odds are you don't know even half as much as David Aaker.

Aaker is vice chairman of Prophet, a San Francisco-based marketing consultancy, and Professor Emeritus of Marketing Strategy at UC Berkeley’s Haas School of Business.

One of the world’s leading experts on branding and the winner of three awards for lifetime contributions to the science of marketing, Aaker has published more than 100 articles and fourteen books.

If that wasn’t enough, on Thursday, he will be inducted into the American Marketing Association’s New York Chapter's 2015 Marketing Hall of Fame.

Defining a Brand

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Aaker is the creator of the Aaker Model, a marketing model that views brand equity as a combination of brand awareness, brand loyalty and brand associations.

He thinks companies should beat their competitors by making them irrelevant and defines loss of relevance as the biggest threat facing brands today. As he puts it:

The ultimate tragedy is to achieve brilliance in achieving differentiation, win the preference battle, create a better-than-ever offering with incremental innovations, and build a powerful brand...only to have that effort wasted because of a relevance problem.

CMSWire caught up with Aaker in advance of his induction into the Marketing Hall of Fame to talk about branding, brand relevance and a career well lived.

Sobel: How did your academic background at MIT and Stanford help you become a top consultant in marketing and branding?

Aaker: I came out of Stanford as a statistician interested in advertising and promotions, which led me to build statistical models. As my interests expanded I continued to build statistical models but the subject matter changed from advertising and promotion effectiveness to strategy and then branding.

Sobel: How did you get into branding?

Aaker: In the mid 1980’s, I was teaching and writing a book on business strategy. I came to believe business executives were putting way to much weight on short-term profits and needed to emphasize building assets instead. 

I wanted to contribute to that thrust. Given my background in strategy, advertising and market research, it seemed clear the logical asset for me to advance was brand equity. That judgment was buttressed by a study in which I ask executives from over 300 firms what was their key asset. Out of over thirty named assets, two of the top three were brand based, as was number ten.

Sobel: How do you define brand equity?

Aaker: I now summarize brand equity into three dimensions. 

The first is visibly and credibility, the basis of being relevant. 

The second is brand associations, which include not only benefits but organizational values (which are particularly important for service and B2B contexts), brand personality, self-expressive benefits and more. 

The third is brand loyalty. 

When I wrote Managing Brand Equity in 1991, brand equity was based on awareness and image, but I felt that the loyal customer base was central to brand strength. Adding loyalty qualitatively changed branding because it provided a long-term, asset view of brand equity and dramatically changed how brands were perceived, managed and measured.

Sobel: Let’s talk about this notion of winning by making competitors irrelevant.

Aaker: I believe that with some exceptions the only way to grow is to innovate by creating “must haves” that define new subcategories. Confirmation can be found by looking at any category over a few decades and observing what causes spurts of brand growth.

It is nearly always the creation of a new subcategory

This strategy requires an innovative culture from which substantial innovations can merge, the capability of generating and putting into the market real “must haves,” an ability to manage those subcategories to win and make your brand the most relevant brand for the subcategory, and a plan to build barriers to inhibit competitors to become relevant. 

The payoff is simply huge as illustrated by Prius, Tesla, Whole Foods Markets, Uniqlo, Pampers’s in China, SalesForce.com, Enterprise Rent-A-Car, Google, Uber and many others.

Sobel:  How can brands avoid becoming irrelevant in today’s dynamic marketplace?

Aaker: There are three threats to relevance. You are longer making what customers want to buy, you lack energy or a reason not-to-buy your brand has emerged.

The first can be addressed by convincing customers they should still buy what you are making (it is OK be indulgent occasionally by going to In & Out), by developing parity to the market disruptors (McDonalds adding healthy items) or by innovating and leap frogging them (by being more organic). 

The second involves adding energy in the offering or around the brand. 

The third can be addressed by refutation or by changing the conversation.

Sobel: What's your take on digital?

Aaker: There are actually four faces of digital.

Augment the offering (Uber’s digital connection to riders), support the offering (Toyota’s website describing their models), amplify a brand building platform (Avon’s Walk for Breast Cancer is supported by a digital program including a website), and be a driver of a brand building platform (Sephora’s BeautyTalk engages customers around a subject the are passionate about). 

The last role focuses on what I call the customer sweet spot defined by customer’s interests and activities. 

Sobel: Can you describe your last book, Aaker on Branding?

Aaker: It is a “best of” concepts and methods from my seven books on branding and strategy plus my articles and blogs. So it is compact way to get the essence of my thinking and writing organized into the 20 principles of branding. 

Sobel: Can you give us a preview of the presentation you'll make when you are inducted into the AMA Hall of Fame?

Aaker: Branding started in 1931 when a 28 year old advertising manager, Neil McElroy, wrote a three page memo setting forth the P&G brand management system. Over the next 70 years it has evolved from products to categories to master brands, from country-based to global, from short-term sales driven to brand equity focused, and from being run by middle management to top executives. 

I see the future as an acceleration of two more recent trends.

First, there is a trend from “my brand is better than your brand” brand building to subcategory competition driven by the fast pace of innovation in the marketplace and the willingness of consumers to change what they buy. 

Second, there is a growing shift from communicating facts about the brand, offering and firm to developing content that interests and involves customers, content that may be unrelated to the offering and will tend to use stories instead of lists of facts and draw in digital media.