Contemporary Research in E-Marketing_7 pot

For a brick-and-mortar brand to excel in the online environment, the brand manager must appreciate some of the key features of the Internet and make adjustments to the traditional brand

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Chapter VII

Key Success Requirements for Online Brand

Management

Subir Bandyopadhyay, Indiana University Northwest, USA

Rosemary Serjak, Graduate Student, University of Ottawa, Canada

Abstract

In recent years, many online brands (or e-brands) have emerged For a brick-and-mortar brand to excel in the online environment, the brand manager must appreciate some of the key features of the Internet and make adjustments to the traditional brand management strategy For example, the control of communication in case of online brand management lies with both the brand manager and the consumer, whereas from the traditional branding perspective, the control by and large rests with the brand manager only We highlight the differences between traditional brand management and online brand management We then focus on several key success factors in building a successful online brand, which we believe will help guide the brand manager through a series of steps leading to successful online branding.

Consumer enthusiasm for online shopping is on the rise This underlines thedichotomy of supply side and demand side of the online business Today’s onlineconsumers demand more—they do not like limited selection, slow downloads,and inadequate navigation The e-tailers who are unable to meet rising customerexpectations are destined to fail To operate successfully, e-tailers need a clearcompetitive advantage based on an attractive offering, a viable business model,and a dedicated brand management team Success also depends on loyalcustomers who keep on buying products and, more importantly, bring in moreloyal customers through positive word-of-mouth communication Because theInternet is in a continuous dynamic state, firms need to follow a flexible e-brandmanagement policy Recent trends indicate that one viable business model couldencompass both a physical brick-and-mortar presence and an Internet presence.Marketing over the Internet implies a whole new dimension in which to engage,retain, and transact with the consumer The future looks bright for the brandmanager because the number of potential customers seems boundless It wasprojected that (1) the number of computers connected to the Internet grew from2.2 million to over 43 million worldwide between January 1994 and January 1999and (2) the number of Internet users was over 160 million as of March 1999, withover 90% of these users having joined in the last 5 years (Hanson, 2000) Arecent report showed that all of these projections have been greatly exceeded;

as of December 2002, there are 580 million Internet users worldwide NetRatings, 2003)

(Nielsen-Today’s most successful companies, along with companies that desire to meetwith financial success, are quite aware of the power of the Internet (such aseconomy of scale, direct communication with the consumer across the globe,etc.) However, it is still considered a relatively new mechanism with respect tothe opportunity for online brand development Due to the relative newness of theInternet and its unknown potentials, many companies do not have a results-drivenpath toward developing a brand on the Internet A preliminary step includesdissecting what brand management entails for the online marketer Although anumber of recent books (see, for example, Braunstein & Levin, 2000; Carpenter,2000; Kania, 2000; Ries & Ries, 2000) and articles (see, for example, Aaker,2002; McWilliam, 2000; Murphy, Raffa, & Mizerski, 2003; Sealy, 1999) haveaddressed the issue of e-branding, no one has articulated the critical differencesbetween traditional and online brand management For a brand manager, it isimperative to appreciate these differences It is natural for a brand manager toapply his/her off-line brand experience to online branding While this approachwill work to some extent, it will fail to appreciate some of the unique features ofthe Internet For example, the control of communication in case of online brand

management lies with both the brand manager and the consumer, whereas fromthe traditional branding perspective, the control mainly rests with the brandmanager only.

In the following paragraphs, we will highlight two brands—one traditional line brand foraying into online branding, and the other a purely online brand—toshow how online branding differs from traditional branding The first brand isProcter & Gamble’s Pampers diaper Similar to many name brands, Procter &Gamble struggles to differentiate its Pampers from its competitors’ Fortunately,its Web site (www.pampers.com) has enabled Pampers to augment its coreproduct in a variety of ways The notable online strategies are as follows: (1) thepopular “Vantastic Sweepstakes” offered a Chrysler van full of diapers; (2) a

off-“gift pack” provided a convenient way to send a supply of Pampers along with

a Fisher-Price toy to a friend; (3) a playing center, a sharing center, and a learningcenter offer visitors an opportunity to explore a plethora of practical issues; and(4) the Parenting Institute offers advice from experts on a myriad of issues such

as health, development, and child care (see Aaker, 2002, for more details) Theseunique features have made the Pampers Web site the second most popular baby-care products It is important to note that all the strategies mentioned above areunique to the Web and are difficult to duplicate in the traditional brick-and-mortarbusiness

The second brand we are going to highlight is Amazon.com—a brand builtprimarily on the Web Amazon.com has utilized many techniques that are unique

to the Web to catch the imagination of so many people Some of the importantfeatures of Amazon’s brand management strategy are as follows (see Dayal,Landesburg, & Zeisser, 2000; and Roberts, 2003 for more details):

• Personalization: Amazon has developed a comprehensive database

cus-tomer purchase history and buying interests As a result, it can reach asingle customer with a customized offer Customers have the control tocustomize their own page and also to make recommendations directly to thecompany

• Collaboration: Amazon collaborated with Gary Trudeau, the creator of

the “Doonesbury” cartoon strip to organize a contest on the Web First,Trudeau posted the first set of a Doonesbury strip and invited visitors to thesite to complete the cartoon Each day Trudeau would evaluate eachposting and selected a winner Trudeau finally created the last section andthe 11-section cartoon was completed

• Self-service option: Amazon offers a variety of self-service options in its

“My Account” page These services range from reviewing personalaccount transaction to changing personal information

• Streamlined purchase process: Amazon offers the unique “1-Click”

sys-tem that stores payment information for customers so that they do not have

to fill in an order form every time they make a purchase

• Dynamic pricing: Amazon offers an auction page where site visitors can

observe the price variations of a product and bid for it In the off-line world,

a customer can learn about the price variations only if he/she takes thetrouble to check out the prices in retail stores in the neighborhood

It is evident that the strategies outlined above are unique to the Web An onlinebrand manager must appreciate the strength of these innovative tools in brandbuilding To that extent, a brand like Pampers, which has both an off-line and anonline presence, must blend the best of off-line and online techniques to buildstrong brands on the Web Online brand managers must learn to select the besttechnique for the branding task at hand Unfortunately, very few studies havearticulated these critical differences in off-line (or traditional) and onlinebranding techniques

Our paper intends to fill this important void in the online branding literature First,

we outline the importance of, and challenges to, online brand management Next

we summarize the critical differences between online and traditional brandmanagement Finally, we present a set of critical success factors in building asuccessful online brand

The Importance of Online Brand

Management

We cannot overemphasize the importance of online brand management to anonline company According to Carpenter (2000), there are a variety of differ-ences between online and off-line branding Carpenter states: “In the onlineworld, distribution has emerged as being even more important than moretraditional brand-building tools If you don’t have Web allies that can get yourbrand in front of large numbers of people at a reasonable cost, it’s unlikely thatyour business will thrive.” One must also keep account of the market momentum,

or the “Mo Factor” (Carpenter, 2000) He emphasizes the need to communicate

a constant sense of momentum Smart online marketers are aware that by havingmomentum behind them, the barriers to business success get dissolved Alongwith the sharply focused marketer will come the strategic partner eager todevelop an alliance As a result, potential competitors will think twice aboutentering the category Customers will see this particular company as a winner,

which in turn, strengthens the perceived quality of the brand Hence, momentum

is a critical factor to the success of an online brand

For an existing brand, the Internet can provide a central organizing platform forintegrating marketing communication functions of a company Instead of looking

at the Internet as another medium for information and transaction, firms musttake a broader view for the brand-building process with the Internet being acritical element of the process (Aaker, 2002) The brand manager should thinkabout joint strategy that will leverage the reach and power of the Internet to boostthe sales of an online as well as an off-line brand

Challenges to Online Brand Management

The following are challenges faced by online brand managers:

1 Insufficient use of Internet tools: Online marketers have yet to utilize the

available online tools to an optimal level For example, according to abusiness media expert, in 2003, only 5% of a company’s online marketingbudget is spent on permission-based e-mail, which is generally considered

to be a very effective method of reaching the consumer (Ottawa BusinessJournal, 2003) There is also not sufficient investment in customer-friendlytools that reduce operating costs Banks are an exception in this respectwhere ATMs along with online banking and telephone banking havereduced the labor cost to service customers

2 Price- and service-sensitive customers: Many retailers worry that a large

percentage of price-sensitive customers shop online to hunt for bargains.This can cause problems for them because they are forced to compete onthe basis of price, making them vulnerable to bankruptcy In addition,studies indicate that a common complaint related to online shopping is thatthe product the consumer wants is out of stock Other complaints includethe following:

• The customer did not want to pay for shipping and handling

• The site performed too slowly

• The customer was uncomfortable submitting credit card informationonline (security concerns)

• The customer was concerned about ability to return items

3 Lack of understanding customer expectation: One reason that many

dot-com companies fail is due to their negligence toward recognizing theircustomers’ expectations A static Web site or a site that is inaccessible due

to the construction of the site will at the very least annoy the potentialcustomer, hence lowering the chances of a return visit In addition, manyusers become comfortable with the layout of the Web site and drasticchanges to the appearance and navigation of the Web site may makecustomers uncomfortable and require that users “relearn” how to use thesite

4 Use of inaccurate performance metrics: Another recurring problem lies

in the inability for e-tailers to sustain their customers An organization cancount the number of “eyeballs” that its site receives; however, the actualnumber of returns is unquestionably more important and more difficult todetermine The trick is to determine if your target customers are likely tovisit your site and not how many “eyeballs” your site receives

5 Misperception about the appropriate online branding strategy: A final

problem with online brand management is the marketer’s perception that anentire shift of marketing priorities is in order Knowledge of traditionalmarketing should not be shelved As of 2004, we are still in a transitionmode It is a combination of print, television, radio, and electronic advertis-ing that will strengthen a brand Advertising and promotional communica-tions should be within the context of the investment of your customers Forexample, some customers do not see the need in upgrading their PentiumIII processor to a Pentium IV processor, or changing the mode of theircellphone from analogue to the improved digital mode Instead, they wantnew products to be interchangeable with their existing medium of technol-

ogy What should be emphasized and promoted here is the loyalty and trust

of the customer Brand managers should adhere to keeping their onlinecustomers, along with their non-Internet customers, aware of their brand,and satisfied with the goods or services they receive Hence, it is importantthat online marketers realize that the Internet is not the only medium andthat some Internet users are not on the “cutting edge” of technology

Given the problems faced by online brand managers, it is clear that most of theseproblems are attributable to a lack of understanding of the online brandmanagement Specifically, brand managers often assume erroneously that asuccessful off-line or traditional branding strategy will also work for onlinebranding

Brand Management:

Traditional Versus Online

What we have been implying is summed up in the following: there exists aknowledge gap between the traditional marketing approach of a brand and thisnew and dynamic method of e-branding on the Internet For example, manybrand managers assume erroneously that a successful off-line or traditionalbranding strategy will also work for online branding Conversely, many othermanagers believe in a complete overhaul of the traditional brand management

It is clear from the foregoing discussion that the online brand managers are notclear about the differences, if any between traditional and online brand manage-ment Therefore, it is important for the marketer to be aware of some of theissues regarding the differences between traditional and online brand manage-ment Exhibit 1 below outlines these key differences

Focus

Traditional brand management primarily focuses on the product and its ship with the consumer Kapferer (1992) posits that the strength of a brand isreflected by the number of its customers who are brand sensitive He charac-

relation-Criterion Traditional Brand

2 Scope Mostly a line of product Mostly corporate branding

3 Management structure Retail managers New breed of technomanagers

4 Control of communication Rests with the brand manager Rests with both the brand

manager and the customer

6 Scope of creating brand personality Through noninteractive television

and print ads

Through interactive online chat rooms and communities

Exhibit 1 Differences between traditional and online brand management

terizes brand sensitivity in terms of the relationship among brands for a givenconsumer for a given product category The marketing strategy, therefore,draws more attention to the general makeup of the product The product ismarketed to better appeal to the consumer, resulting in increased sensitivity andultimately, to better profitability.

Online brand management, on the other hand, focuses principally on bettercustomer relations Building a relationship with the customer through personalprofiles, e-mail, video, and knowledge of their journeys on the Internet is the key

to the online brand manager (Kania, 2000) Introducing a brand online requiresgreat commitment and organization The online brand manager is better posi-tioned to creatively meet the needs of the customer faster and more efficientlydue to the speed and the personal service option that the Internet provides Theonline brand manager can also attempt to influence customers without overtmarketing by utilizing customer personalization The relationship building pro-cess allows the brand manager to get to know the likes and dislikes of his/hercustomer; therefore, “suggestion” advertising or guiding the customer can bepossible Amazon.com is a great example of personalized service Once acustomer has purchased a book from its Web site, Amazon.com keeps a record

of the purchase When that same customer returns to the site for anotherpurchase, suggestions are given regarding similar literature (dependent on theprevious purchase and the profile of the individual) available through its Web site.One-stop shopping is also very attractive to the average consumer who ideallywants to be able to do his/her purchasing at one time, on one site, with someonehe/she knows and trusts, and save money on shipping The brand manager hasthe ability to design the Web site to meet the need of the average customer Thisgives the online brand manager the opportunity to retain customers and increasesite visitation Simplifying the customer’s life is what the aim of a virtual storeshould be, and therefore one-stop shopping is a popular trend that must beaddressed

Online brand management involves branding a Web site not as an actual product,but rather as a service Since a majority of online purchases involve the sameproduct, online brand management needs to creatively position its Web site overits competitors’ who are selling the same product Online brand management can

be more complex than traditional brand management because online purchasersare much more price sensitive For example, Proctor & Gamble (P&G) hasproven to be very effective at creating brands such as Tide and Downy P&G

is able to distinguish its brand based on physical characteristics such as how well

it cleans, how nice it smells, and so forth On the other hand, Web sites distinguishthemselves by their level of service (ease of use, personalization, security) andprice rather than through product characteristics

The traditional brand manager is primarily involved in the marketing of oneparticular line of product that accommodates concentrated efforts at planningnew product campaigns, promotional activities, and advertising Although brand-ing is done at different levels of brand hierarchy, such as corporate brand, familybrand, and product brand, product branding is the more common approach tobrand management where each product requires individual branding

Corporate branding, as opposed to product branding, is more prevalent in onlinebrand management, especially for the click-and-mortar companies It is benefi-cial to the brand manager, not only for centering of branding efforts onto onebrand but also for the clarification of the organization’s position in the mind of theconsumer The Internet has produced corporate brands such as CD Now,E*trade, Yahoo!, eBay, and Autobytel These corporate brands are challengingtraditional brands for the customer’s top-of-mind awareness The classicexample is the online competition between BarnesandNoble.com andAmazon.com Studies have consistently ranked Amazon higher thanBarnesandNoble.com in brand awareness We believe this is because Amazonhas successfully created an online corporate brand while Barnes and Noble hasnot been able to create this type of online brand recognition

It is true that many famous brands (such as Tide, Ivory, and Vicks) have Websites of their own However, the link with other brands in the same corporatefamily remains strong in brand-specific Web sites For example, the Web site ofTide, a P&G product, heavily cross-promotes the fabric softeners made by P&Gsuch as Downy, Bounce, Febreze, Dreft, and Dryel

Famous corporate brands such as GE and Kraft leverage the Web even more toaugment the corporate brand For example, GE outlines its entire product line inthe Web site (ge.com) under two broad categories: home products and businessproducts Under the home products category, GE lists its products in such diverseproduct lines as appliances, lighting, consumer electronics, television programs,home comfort, and safety GE’s business products include its brands in aviation,automobiles, energy, healthcare, retail, and transportation Similarly, Kraft listsits product line under five major food categories: beverages (e.g., MaxwellHouse coffee and Kool-Aid), convenient meals (Oscar Meyer bacon andDigiorno frozen pizza), cheese (e.g., Philadelphia cream cheese and Kraft gratedcheese), grocery (e.g., Grey Poupon condiments and Post cereals), and snacks(Chips Ahoy! cookies)

In traditional brand management, retailers work in collaboration with brandmanagers to make pricing and merchandising decisions Manufacturers intro-duce their products to the public through stores such as Wal-Mart or Target.These retail stores sell products purchased from many manufacturers along withtheir store brands or private labels Retail managers think of a marketing strategy

to persuade consumers to purchase goods from their establishment For ample, Wal-Mart’s marketing strategy demonstrates that it will always havelower prices than its competitors

ex-Online brand management demands a diverse form of management Unliketraditional brand managers, this new breed of technomanagers must executeduties pertaining to their corporate Web site An online brand manager’s dutiesconsist of measuring Web site traffic, purchases, and frequency of guest visits.The information gathered on visitors’ preferences is utilized to develop futuremarketing strategies In addition, the online brand manger is responsible forfinding out why users do not complete a transaction and correct the problem ifthere is one Dot-com businesses started with an intimate knowledge of Internettechnology and Web audience Online brands are marketed by people who aretechnically savvy, and are adept in using interactive dialogue to bring together theuser and the brands

Successful online brands are managed by individuals who consider brandmanagement as management of values These brand managers view their role

as that of conductors, providing brand leadership but leaving the community ofcustomers to jointly define the brand personality (de Chernatony, 2000)

Conversely, customers are in control of communications online The bidirectionalnature of online communication allows the customer to control communication

by leaving comments at a site This is more direct and effective than leavingcomments at a retail store This can help the brand manager create a one-to-one

relationship with the customer by showing that the company cares about eachand every consumer and responds to each comment Furthermore, commentsand suggestions help online managers develop Web sites that promote increasedone-to-one customer communication.

Targeting

Marketers traditionally identify segments within a broader market and designbrand messages to these selected segments or target markets While there is adistinct trend toward targeting smaller segments or niches, there is a logical limit

to how small a target market can become Cost of design, manufacturing,promotion, and distribution restrict the number of product lines Thus, targeting

is done on one-to-many basis in traditional brand management The companywants to expand its product to a large magnitude of customers Currently, there

is no way to successfully create a close relationship with customers whenproducts are being sold in large retail stores such as Wal-Mart These types ofstores cater to large groups of people to make purchases, and hence cannotcustomize their offerings according to each customer’s likes and preferences

On the Web, segmentation can be even more precise because online brandmanagers routinely collect information on customer profiles and their onlinebehavior patterns For example, Amazon.com keeps preferences of previouscustomers When a customer returns to the Web site, suggestions for new booksare displayed on the Web page based on criteria from the past visit or purchase.This helps the customer feel like the company knows what he/she wants All ofthis can be accomplished with the use of sophisticated Internet tools available tothe online brand manager

In fact, some online companies even go one step further and target individuals.This strategy of one-to-one marketing is possible when a message or product can

be targeted to one individual The Internet makes this possible by allowing thecompany to address each of its customers individually Unique Web featuressuch as e-mail, an online community, chat, Web conferencing, auctions, andcookies help in one-to-one marketing Many sites feature elements of one-to-onemarketing For example, Dell makes custom computers as per the specificationsupplied by its customers Also, CNN allows its registered users to personalizetheir site, MyCNN, to include news of their choice

The ability to interact and chat with the customer one-on-one enables a brand tocustomize and even personalize its offerings (Travis, 2001) The online environ-ment enables the customer to customize his/her choice of product attributes fromthe list of options offered by the manufacturer on its Web site However, that isnot the end—the customer may decide to become a co-creator of the product by

collaborating with the brand to develop the exact product he/she needs This isquite common for the business-to-business customers Engineers representingsuppliers and customers often collaborate intimately to produce a piece ofsoftware or hardware specially designed for the customer The advantage ofsuch personalization is that the customer tends to stay with the manufacturerbecause he/she does not want to repeat the process with another supplier

Scope of Creating Brand Personality

Online branding offers a broader scope of creating a brand personality

Re-searchers found that the exposure to the brand Web site increases the brandpersonality (Muller & Chandon, 2003) They also found that the brand isperceived younger and more modern, as well as more sincere and trustworthy,when a visitor has a more positive attitude toward the Web site Moreover, theyfound that the effect of exposure to a Web site depends on the product category:for functional/utilitarian products (such as mobile phones), the effect of exposure

on youthfulness and modernity is superior than for autoexpressive products (such

as luxury clothes) These results clearly indicate that the Internet offers uniqueopportunity to the brand manager to augment online brand personality

Traditionally, a company tries to create a unique personality for its brand so that

a customer can identify or associate with the brand This gives a reason for thecustomer to return to the site over and over again Online brands can createelectronic chat rooms for discussions where actual customers represent thepersonalities of the brands Interactions between customers or between cus-tomer and company produce a much more potent association than a print ortelevision ad that uses a model to represent the target audience In fact, there isempirical evidence to show that online communities increase repeat site visitsand time spent in a given site (Kania, 2000)

But there is much more to creating a brand personality than purely offeringInternet features; customers want a balance between online and off-linefeatures Everything that a company does and does not do contributes to its brandpersonality The way it treats its employees is reflected by the way they treat thecustomers Customers also see how the item the company sells is packaged,what type of delivery trucks the company uses, what events the companysponsors, and the way the company handles problems (Zyman, 2002)