Posh Spice & Persil: Jeremy Bullmore argues that every corporate action and decision influences peoples perceptions of brands
Consumers know that value-for-money is a calculation that they make, as individuals, often intuitively; and that price is just one factor within that calculation. Like the image of a brand, and for the same reason, value for money is an individual concept, individually arrived at - however widely shared it may turn out to be.
From time to time I try to identify a significant consumer market sector - detergents, toilet tissue, beans, packaged cakes, confectionery, cigarettes, canned beer - where the brand with the lowest price is also the market leader. In countries where choice is still a distant concept, there are of course many such examples. But in our more fortunate world, accustomed as we've been for 50 years or more now to a range of options in everything we buy, I can still think of none.
And this is not, as the rationalists would have us believe, because the gullible masses are lured into paying for some intangible image; it's because the masses are made up of individuals, each of whom is perfectly capable of determining which price demanded most accurately matches which set of satisfactions delivered: not universally, of course - but for himself or herself.
One of the many functions of price is famously encapsulated, and with great marketplace success, by Stella Artois: "Reassuringly expensive."
Promotions are almost as deceptive a stimulus as price and for much the same reason. Surely a two-for-the-price-of-one, a banded offer of that new CD, the chance of a free holiday in the Caribbean: surely such bargains must lead to more sales and therefore be good for the brand?
Maybe the first; but not necessarily the second.
People - in which I continue to include you and me: not some remote and alien consuming body - people interpret all brand clues with instinctive intelligence.
Marketing people give a great deal of thought to what people think of brands. What brands appear to think of people is at least as interesting.
When brands make clear and often impertinent assumptions about us, we notice. When I get yet another invitation to apply for a platinum credit card, I know exactly the assumption that this brand has made about me. It has assumed that I will enjoy flashing a platinum card in front of headwaiters; that I will appreciate an automatic if expensive overdraft facility of £10,000; that I drive a car with a personalised number plate and wear open-backed driving gloves while doing so. I resent these assumptions deeply. And I would, of course, resent them at least as deeply if they were absolutely accurate.
Most promotions fall neatly into one of two categories: bribes or bonuses.
The bonus makes this assumption about me: that I will appreciate some token of gratitude for my continued custom.
The bribe makes this assumption about me: that I will buy something I never wanted in the first place because it's now cheaper.
The first congratulates and flatters me; the second insults me.
The signal that the bonus sends out is one of generosity and confidence; the bonus enhances the brand. The signal that the bribe sends out is one of insecurity and desperation; the bribe diminishes the brand.
So the promotion - the offer - is more than a short-term sales incentive. It's another clue to brand character: one of those many scraps and straws from which people build brands inside their heads.
Advertising, packaging, price and promotions have this in common: they are all within the control of the marketing company. To be rather more accurate: the transmission of these brand stimuli is within the control of the marketing company. Their reception, however, is not.
Among all my deeply disturbing brand facts, this is the one most calculated to cause distracted CEOs sleepless nights - which is probably why they choose not to think about it.
I said at the start: "The only way to begin to understand the nature of brands is to strive to acquire a facility which only the greatest of novelists possess and which is so rare that it has no name." The last part of that sentence is not quite true.
In her 1996 Reith Lecture, Jean Aitchison wrote: "An effective persuader must be able to imagine events from another person's point of view. In fashionable jargon, he or she must have A Theory of Mind."
A Theory of Mind may be fashionable jargon among academics and psychiatrists but it's far from fashionable anywhere else; nor does it deserve to be. It is a hopelessly inadequate term for a rare and priceless facility. And 'empathy' is in its own way worse, since we think we know what it means but don't.
The ability "to imagine events from another person's point of view..." to see things through other people's eyes ... to put oneself in someone else's shoes: it might be a more respected skill were it only to have a decent name.
I've been brooding about this rare ability for a very long time.
When I was about seven years old, I was taken to have tea with the only rich relation we had. As we were about to leave, she reached for her purse, took out five one pound notes and gave them to me.
I was, at the time, on two shillings a week pocket money. What I held in my hand was one year's gross income.
Then she peered at the notes and said, "Oh dear. Those two are very dirty. I couldn't possibly let you go away with notes like that." And she took back two of the one pound notes - and didn't replace them.
My aunt did not possess a complete understanding of The Theory of Mind. There was no meanness in her action; only a kind of blindness. She saw those two notes through her eyes only.
We were both looking at the same notes. They had a measured, agreed, universally accepted worth: they were worth one pound each. But to me they represented riches beyond imagination and to her they were a Boxing Day tip for the milkman. There is, I believe, no commonly accepted name for this form of blindness but it is widespread - and not only in marketing.
Most of us in the rich and fortunate West are genuinely bewildered to discover that the way of life we know with such untroubled certainty to be civilised seems, with an equivalent certainty, to be the epitome of blasphemy and greed to others.
Jean Aitchison is right. The ability to imagine events from another's point of view is the first qualifying talent of the would-be effective persuader. Those scraps and straws over which we painstakingly pore have no universal significance.
Through different eyes, a single bank note can represent enough Smarties for the entire summer holidays, with a balsa wood glider thrown in; or a handy wedge to stop the table wobbling.
The poor old focus group has had a thoroughly hostile press in recent years - unfairly, I believe. And the reason for that hostility is a confusion in the minds of many commentators between the knowledge you gain from a focus group - and the use you put that knowledge to.
If focus groups tell you that the single European currency is regarded with deep hostility but that corporal punishment has acquired a new popularity, you will deserve every bit of odium hurled at you if, with absolutely no further thought, you pull out of Europe and bring back the birch.
But it is irresponsible government - and potentially suicidal management - deliberately to stay ignorant of the content of other people's minds.
You do not have to agree with what you discover. You should certainly not expect people to tell you what to do next. Nor should you be surprised if what people say they want turns out to be very different from what they subsequently choose. But you should never find yourself ambushed.
I cannot believe that Marks & Spencer was anything other than astonished by the severity of their fall from grace; yet neither can I believe that the signs weren't there for years before it happened.
Marks & Spencer has competitors: and the tiresome thing about competitors, other than their very existence, is that what they do has a significant effect on your own reputation.
We all have invisible maps in our heads, on which we plot the position of competing brands. Every brand is allocated its own, unique space. There may or may not be such things as parity products; there are certainly no parity brands.
Fifteen years ago, our mental map of the daily broadsheet newspaper market in this country would have allocated clear positions for The Daily Telegraph, The Guardian and The Times. And then The Independent was launched with considerable effect, and all the existing co-ordinates subtly changed: because reputations, as well as being subjective, are also relative. A brand is defined in our minds at least as much by its competitors as by its own behaviour.
These changes to brands take place all the time. A new competitor may occasion a perceptible change - but the really dangerous changes are the daily, tiny, immeasurable, imperceptible changes that accumulate invisibly over time until they've gained often unstoppable significance.
It is all this that leads me to say that brands are living, organic things - because all the time, those with knowledge of a brand are changing. They may grow richer or poorer and will certainly grow older; and as the perceiver changes, so inevitably, does the perception. If a marketing company closes both its eyes and its ears; if it relies on the single dimension of current sales; if it believes that yesterday's successful strategy is an infallible guide to tomorrow's profit: then it's heading for disillusionment of barometric severity.
A commitment to monitoring changes in brand perception demands constant vigilance - and an unusual degree of corporate humility. But it's an absolutely essential procedure for all brand stewards anxious to protect themselves from extremely unwelcome surprises.
The means by which these scraps and straws infiltrate the human mind remain something of a mystery.
The advertising world, in the teeth of instinct and much evidence, insisted for years that brand choice was the result of persuasive argument consciously processed.
Consumers were assumed to notice an advertisement; become engaged by its overt promise or proposition; and be thereby consciously persuaded to buy. It was a neat, linear, deterministic model that brought great comfort to disorientated advertisers and communications researchers alike: it offered consistency, rationality and some deeply desirable opportunities for measurement. The model put much emphasis on both attention and memory: and, what luck, both could be readily quantified.
It was always a deeply unsatisfactory model and, in practice, was widely ignored by advertising practitioners. But despite the occasional guerrilla attack on its underlying premise, it remained the least worst respectable model in town.
This year, Robert Heath has published an important monograph: I quoted from it earlier. It's called The Hidden Power of Advertising but its subtitle is a much more accurate label: How low involvement processing influences the way we choose brands.
I will not attempt to take you through his own processes of thought; it is enough for you to know that it's a rigorous work and draws on new understanding from the worlds of neuroscience and psychology. But I will quote at some length from his own summary.
"Consumers in general regard most reputable brands as performing similarly and because of this they do not regard learning about brands as being very important. Brand decisions tend to be made intuitively rather than rationally."
"Because it is not seen as very important, most brand information tends not so much to be actively 'sought' as passively 'acquired'. Brand communication, such as advertising, tends to be processed at very low attention levels and we generally do not work very hard to learn or understand what we are being told about the brand."
"Mostly we process brand communication using an automatic mental process called low involvement processing. Low involvement processing is a complex mixture of semi-conscious and subconscious activity. Much of it involves what is known as 'implicit' learning - learning that takes place without you knowing that you are learning."
"The way our long-term memory works means that the more often something is processed alongside a brand, the more permanently it becomes associated with that brand. Thus, it is the perceptions and simple concepts, repeatedly and 'implicitly' reinforced at low levels of attention, which tend over time to define brands in our minds. And because implicit memory is more durable than explicit memory, these brand associations, once learned, are rarely forgotten."
To me, that makes absolute sense. It feels right.
When I examine the inside of my own head, and look at some of the brand reputations that reside there, I cannot for the life of me trace their source.
I have learnt without knowing I was learning; I have absorbed, by some unconscious osmotic process, a range of stimuli - and from these, equally unconsciously, I have constructed a coherent brand character.
So let me return to these scraps and straws from which we, as individuals, infer so much.
And let me move from those brand communications over which the marketing company has theoretical control - product, advertising, packaging, price, promotions, for example - to brand encounters of a far more accidental nature.
You see a truck, boldly branded, driving badly on the M25. You see a pack in the house of someone you dislike. You read that the company that makes the product has been taken to court for racial discrimination. The daughter of a friend is fired by the parent company. You receive an illiterate and ill-spelt letter from head office. After holding on for 25 minutes, you have still to speak to a human being at the company's call centre.
Like people, brands have body language; and it's a language we understand. Every time we encounter a brand, we make an infinitesimal and subconscious adjustment to our personally constructed brand picture: and in each of the instances mentioned above, those adjustments will not be in the brand's favour.
And the reason it matters is this. The luxury of choice that we all enjoy; the fact that, however crassly sometimes, competitive companies are fighting for our cash and our custom; all this means that, in allocating our loyalty, we welcome reasons to reject a brand almost as eagerly as reasons to prefer it.
As Professor Ehrenberg and others have long demonstrated, and as Robert Heath reminds us, what is called brand loyalty is very rarely a truly exclusive matter. We assume all alternatives to be broadly acceptable; we all have favoured repertoires within each brand category; and we all want to make brand decisions with a minimum of anguish. So however infinitesimally negative a brand encounter may be, the damage it may do to that brand's competitive standing may be serious.
The way we interpret the body language of brands means that the apparently trivial can be greatly significant.
In the performing arts, or so I'm told, they preach something called 'transitive action'. And what this means, or so I'm told, is that good writers and directors encourage an audience to deduce character and motivation not from what is explicitly said but from what that audience observes being done.
The best brand stewards, too, encourage their potential customers to deduce character not just from claim and assertion - from presentation - but from transitive action: from brand behaviour.
I have long admired a supermarket in the States. Proud of their reputation for fresh produce, they had always removed the outside leaves of lettuces before putting them on display. One day, a lowly member of staff made a modest suggestion: and from then on, those outside leaves, instead of being consigned to the garbage bin, were popped into plastic bags and given away free at the checkout - to families whose children kept pet rabbits. Naturally, they called them BunnyBags. I don't think it absurd to suggest that, as a result, 15 years on, those children will choose to take their own children to that very same supermarket.
Some years ago, a friend of mine was a lunch guest in the Connaught Hotel dining room - and noticed his host first of all patting his pockets ineffectively and then peering miserably at the menu. No word was said: but within a minute, a waiter had appeared with a velvet-lined tray on which were displayed ten pairs of reading glasses of different levels of magnification. My friend, the guest, has been a loyal Connaught user ever since; and remember - it wasn't even him who needed the glasses.
BunnyBags and reading specs: two very small examples of brand behaviour with much in common.
Both showed an understanding of A Theory of Mind: they put themselves in the place of their customers; they understood what it was like to be a small child with pet rabbits or an embarrassed businessman finding small print difficult.
Both understood the importance of transitive action, of brand body language. They invited their customers to infer, from behaviour, rather than to accept from boastful claim or assertion.
And both realised - or simply, perhaps, instinctively felt - that the apparently trivial can, in interpretation, take on quite disproportionate and positive significance.
I believe the best brand stewards of the future will recognise the potential power of such body language; and demand much more in the way of brand action and rather less in the way of empty self-praise.
They will also, I believe, have to come to terms with perhaps the most daunting of my propositions.
There was once a time when most brands had no publicly recognised parents. You bought your packet of Persil or your jar of Marmite and knew absolutely nothing, and cared rather less, about the company behind them. For two quite different but converging sets of reasons, that is changing fast - and will continue to do so.
The age of the free-standing brand is nearly over. For reasons widely understood, most brands now - and nearly all new brands - trumpet the name of their parent. The parent may be a company or an already established brand but the reasoning is the same: let's leverage our brand equity; let's trade on the trust we've already so painstakingly and expensively built.
But of course, just as the good news can be shared and spread through such linkages, so can the bad. Free-standing brands - orphan brands, with no known parents - may be non-contagious. But when brand relationships are not just public but widely publicised, bad news from one can rapidly become an epidemic.
The effect of the internet is to accelerate the chances of brand contagion. The internet means that there is nowhere to hide. You cannot charge $350 for a pair of chinos and pay third world workers $3.50 a day to make them and hope to go unnoticed. You cannot deprive your own workforce of knowledge of your company's performance when they have ready access to it elsewhere. You cannot ignore the conversations that your networked employees are having with your networked customers. For more on this, consult the The Cluetrain Manifesto: a splendidly anarchic rant, of internet origins. Once you have read it, feel free to ignore quite a lot of it; but don't fail to read it and don't ignore it all.
And - as Tim Ambler pointed out - Naomi Klein's book No Logo is not, as is widely supposed, an attack on brands; it's an exposé, as she sees it, of the double standards of multinational corporations and the risks they run.
This convergence of company and brand, this reckless openness of communication, this threat to general reputation that any specific transgression now poses, is quite enough reason for the chief executive to take a very close interest indeed in the management of his brands. Or perhaps I should say, his brand.
But there's another, more positive reason.
Today, to a marked extent, all brands are service brands. Other than street traders, few businesses now see their only function as being simply to make a sale. After-sales service, relationship marketing, the concept of lifetime value, the growth of interactive media: all these trends and developments mean that the creation and maintenance of a valued brand should now quite clearly be the responsibility not of some relatively lowly brand manager but of the chief executive of the enterprise itself.
This is not just a defensive measure: the competitive opportunities presented by the deliberate creation of a corporate brand are immense. They are described in detail, with impressive case studies, in a book called The Masterbrand Mandate by Lynn Upshaw and Earl Taylor.
The extension of the principles of branding from product to company means opening up the whole marketing strategy to absolutely everyone within that company. It means recognising that every corporate action, every corporate decision, every corporate communication will be seen as a clue - as one of those all-important scraps and straws from which people build brands.
It means confiding in your workforce and training them and asking them for constructive suggestions. It means trusting them to respond to customer dissatisfaction both immediately and personally, without cowering behind head office instructions. It means as conscious an application of internal marketing "internal communications - as we give to our external marketing."
If you want to get a feel for the corporate brand, think of some successful first generation companies - companies such as Dyson or Pret à Manger. Still led by their forceful founders, they embody and broadcast a single-minded and unifying set of values. And that which is done instinctively and obsessively by such pioneers can be done equally well by the chief executives of long established companies: but only if they are prepared first to understand and then to undertake the role of brand steward.
The value to the company, of course, if they get it right, extends well beyond sales levels and profit margins: it extends into labour relations and press relations and investor relations; it helps in the retention of valued executives; it gives them a competitive edge when recruiting new graduates.
But while recognising and recommending the masterbrand strategy, let me return to the Niall FitzGerald warning.
However brilliantly reputation management may be masterminded, and however much that reputation contributes to differentiation and competitive success, if there's anything fundamentally wrong with the product, then ultimate failure - I'm extremely happy to report - remains inevitable.
The authors of The Masterbrand Mandate devote a whole page of praise to a giant American company which was "transforming itself into a brand-based organisation." They report that "Messages about creativity and innovation are sent to employees through their intranet, via T-shirts, in print and television advertising, at employee meetings, in self-training programs." This is the corporation that won Fortune magazine's "Most Innovative US Company" award four times in the mid-1990s - and it's called Enron.
It's stories like this that give immense comfort to brand-averse CEOs. "There you are," they say, "it's all smoke and mirrors stuff. Only charlatans rabbit on about brands. All puff and no substance. Never lasts. Now let's get back to counting things."
But of course, the authors weren't wrong to recognise what Enron was doing. If the fundamentals of the Enron operation had been solid, what Enron was doing would have indeed been admirable. An obsession with the management of brands must never be at the expense of functional efficiency. Indeed, as I hope I've stressed, and stressed indelibly, functional efficiency is a strong brand's first prerequisite. But that simple thought seems to get forever lost.
I was very happy to accept your invitation to deliver this lecture. I was even foolish enough, as I began to write it, to believe that I might be able to bring a little enlightenment to the subject - and encourage some of those hesitant CEOs to take on their rightful mantle of chief brand steward.
Instead, as I now realise, I started with 13 daunting brand facts and ended by inviting you to admire Enron. I must have put the brand cause back by at least 10 years.
Victoria Beckham, Learning to Fly, The Autobiography, Michael Joseph, 2001
Tim Ambler, British Brands Group Inaugural Lecture, 2000
David Boyle, The Tyranny of Numbers, HarperCollins, 2001
Niall FitzGerald, Marketing Society annual lecture, 2001
Jean Aitchison, 1996 Reith Lecture
Robert Heath, The Hidden Power of Advertising, Admap Publications, 2001
Rick Levine & others, The Cluetrain Manifesto, FT.com, 2000
Naomi Klein, No Logo, Flamingo, 2000
Lynn Upshaw and Earl Taylor, The Masterbrand Mandate, John Wiley, 2000