Sunday, August 30, 2009

More on the Brand Community (Chapter 1/5)

Let's look a bit deeper into Muniz and O'Guinn's brand community concept.

Muniz and O'Guinn identify three markers of brand communities:
* Consciousness of kind
* Rituals and traditions
* Moral responsibility
and give some examples of each as they relate to the three brand researched, Saab, Macintosh, and Ford Bronco.

There are two ideas within the "consciousness of kind" marker, legitimacy and oppositional brand loyalty. With legitimacy, there is a ranking of brand users with some brand users feeling that they may be more "legitimate" than other brand users or that some other brand users may not be using the brand for the right reasons. In the case of both Saab and Bronco, Muniz and O'Guinn found that Saab and Bronco users questioned the motivations of some fellow brand users. The assumption was that current mass popularity of both brands may have caused some of their fellow brand users to choose Saab and Bronco, rather than a belief that Saab was very well-designed/manufactured (and should be owned for a long time to bear this out) vs. other automobile brands. Some Bronco fans felt that other Bronco owners had purchased the brand not based on its off-road heritage/performance, but more because the brand had become popular beyond the off-road enthusiasts. This issue of "legitimacy" was not present in Macintosh users.

Oppositional brand loyalty was present in all three brands studied and simply means that it is not enough for brand loyalists to love their brand, but with that loyalty comes a strong opposition to competitive brands. Examples include Mac users with strong dislike of Microsoft and PCs to such an extent that they feel threatened by the larger market segment. Saab users resent the comparison to Sweden's other car company, Volvo, and note that while Volvo may be as safe a car as Saab, Volvo also makes tractors while Saab also develops airplanes. This idea was reinforced on many Saab fan websites. Bronco fans did not assault any one SUV brand but generally chose to discredit the entire 4x4/SUV brands as a group.

Rituals and traditions were also noted in all three brands studied. The two ways this marker takes shape is in celebrating the history of the brand and telling brand stories. All three brands have colorful histories, with Saab's heritage in airplane design and manufacturing being touted quite a bit. All of the technological innovations of Apple and the fact that Bronco has been an off-road brand experience since 1965 were a part of many fan-created websites.

Interestingly, many brand stories may have gotten started from advertising or other marketing communication but this does not matter to brand loyalists. Not only do members of a brand community continue to tell their favorite brand stories, but the researchers witnessed other enthusiasts listening to stories they had already heard, adding the comments, "I really love that story" or "cool story" at the end of the brand storytelling. One interesting insight from the researchers was a fascination with older brand logos that may have been updated but with a reverence to the historical logo, too, even though it was no longer in use.

Moral responsibility is the third marker and strong brand communities have expectations of the brand and members of the brand community in terms of how they conduct themselves. Saab users told stories of stopping to help other Saab motorists who were in need. Some loyal Mac users actually felt betrayed by former Apple users who had moved to PCs, calling someone "a Mac turncoat." A Saab user referred to another Saab user who had left the fold by buying another brand of automobile as having "betrayed the brotherhood." An important aspect of moral responsibility is the recommendation of dealerships, parts suppliers and good sources for technical information other users might need.

One interesting insight from the researchers was a fascination with older brand logos.

Muniz and O'Guinn conclude their paper with an observation that "brand communities are largely imagined communities" that have become social gatherings around commercial ventures. While many critics of our free market system have argued that business commerce has destroyed much of traditional community, Muniz and O'Guinn observed three positive aspects to brand communities:
* Brand communities represent a form of consumer agency by nature of their ability to make brand users congregate.
* Brand communities offer a valuable way for important information to be exchanged by knowledgeable users.
* Brand communities offer social benefits to members in addition to voice and information.

How strong is your brand community? Do you recognize some of these markers? Add a comment here if you'd like.

Thanks for reading! More to come.

Sunday, August 16, 2009

Toward the Brand Community (Chapter 1/4)

The subject of brand communities has been very popular in marketing literature over the last few years. The landmark academic white paper that initiated all this discussion was titled, "Brand Community" and first appeared in the Journal of Consumer Research. Albert Muniz, Jr. and Thomas O'Guinn authored that piece in 2001 and I think it may be one of the most important studies I have read in quite a while. Albert Muniz is assistant professor of marketing at DePaul University and Thomas O'Guinn is professor of advertising, business administration and sociology at University of Illinois. Numerous marketing writers have certainly written about the subject since then, but I thought readers might find it interesting to know more about the subject as it was discussed in that original white paper. I will be writing much more about brand communities in future posts.

Muniz and O'Guinn define a brand community as "a specialized, non-geographically bound community, based on a structured set of social relationships among admirers of a brand." In researching the paper, the authors studied three strong brand communities associated with Jeep, Macintosh computers, and Ford's Bronco SUV.

There are "markers" or essential characteristics of any community and brand communities are no different. They are: "consciousness of kind," rituals/traditions and moral responsibility. These markers must exist in any community, brand community or otherwise.

The most important of these is "consciousness of kind," according to Muniz/O'Guinn, with members feeling a strong connection to others in that particular brand community. Interestingly, the brand relationship is not dyadic (consumer to brand), but triangular (consumer to brand to consumer), forming strong human relationships around the commercial entity.

Rituals and traditions generally revolve around shared brand consumption experiences, according to Muniz/O'Guinn and serve to maintain the culture of the community. One common tradition of a brand community is the celebration of the history of the brand. Another is the sharing of brand stories with others members.

The third characteristic of the brand community is moral responsibility, defined here as "a sense of duty to the community as a whole and to individual members of the community." Moral responsibility achieves two functions for any brand community: integrating/retaining members and ensuring the proper use of the brand.

Another way of looking at these markers is from a time perspective: past, present, future. (This concept is not from the Muniz/O'Guinn paper but my own observation.) "Consciousness of kind" is a present perspective: "I am (here and now) with this group who feels the same way I do about this product or service." The rituals/traditions is obviously a past perspective: "There is a history to this product/service that I relate to and want to be a part of." The third marker, moral responsibility, is all about a future perspective. Responsibility, by definition, is concerned with what you should be doing in the future: "What must I be doing in the days to come if I am to be a responsible member of this community?"

Brand: Past/Present/Future

I will be writing a lot more about brand communities as we go forward. How to recognize or build them, what role the brand organization can play, how marketing can encourage a brand community to form. Most important, however, is to recognize that there is what Muniz and O'Guinn call a "social nature" to brands. And the stronger the particular brand community, the greater the likelihood that the value of the brand will be perceived as strong in its competitive marketplace.

Let me know what brand communities you belong to, why they are important to you and if you can relate to Muniz/O'Guinn's characteristics of brand communities.

Thanks for reading! More to come.

Sunday, August 2, 2009

Chapter 1/3

Another study by the CMO (Chief Marketing Officer) Council in 2007-2008 titled, "Losing Loyalty: The Consumer Defection Dilemma," tracked 34 million shoppers and 685 grocery and pharmacy brands at 24,000 retail stores. The news is not good.

In that study, one third of those considered "brand loyal" actually switched to another brand during the study. About half that many again began switching to other brands from time to time, perhaps because of special promotions but, in any event, were no longer completely brand loyal. Combining these two groups, 52% of those thought to be loyal to the brand they were using at the beginning of the study had begun using another brand either exclusively or from time to time.

While this study was among consumer packaged goods brands, we see this trend in virtually every industry. And small business owners may want to think about their own customers as they interpret this secondary research and consider the implications for their own customer base.

Is customer loyalty dead? Not by a long shot. There are still plenty of businesses that have strong customer loyalty.

In fact, Bob Hill recently provided us with PeopleMetric's Annual Customer Engagement Study that named the ten companies that customers are most loyal to. Who are they?
1. Ritz-Carlton
2. Google
3. The Four Seasons
4. Netflix
5. Cartier
6. Armani
8. Wegman's Food Market
9. Coach
10. Costco

Now I have done business with seven of these companies and I can agree that my experiences with them would lay the foundation for loyalty on my part. But that is just one guy talking.

More importantly, Mr. Hill offers some insights into why people are loyal to these organizations/brands. What can small businesses learn from these organizations?

Mr. Hill observed that each of these organizations has something in common with all of the others and that, he maintains, is the crux of the brand loyalty that each of these companies experiences.

First, all ten of these companies treat their employees very well. These companies recognize employee contributions with bonuses and other incentives for those who go above and beyond the norm to demonstrate that they and their companies value customers' business. When employees feel valued, they will most assuredly pass that attitude on to their customers.

How valued do each of your employees feel? Well, that is about how valued some of your customers feel!

Second, when problems arise with either products or service, the companies resolve the issue immediately. There is not time for the customer to even wonder if they will be treated fairly. Or doubt their importance to the organization. Employees in these companies have authority to handle most issues to customers' satisfaction. As part of this, there is a strong "life-time value of the customer" philosophy operating to ensure that little problems do not become big problems for either the company or the customer. In addition, these companies are continually verifying that each encounter with the organization is a positive one for that customer.

How empowered are your employees to handle complex customer problems? If the problem has to go to the owner of the small business to be resolved, it has gone way to far in the customer's opinion.

When your employees feel valued, they will most assuredly pass that attitude on to your customers.

Don't for a second think that just because these organizations are large entities that their job is easier. No, in truth, the larger the organization, the harder it is to garner brand loyalty and customer satisfaction. With the addition of each new employee, any organization increases the risk of a bad customer experience. It is actually much more difficult to achieve the level of customer loyalty these larger companies have attained. Small businesses should find it much, much easier to build customer loyalty. But, do they?

Please post a comment to what you read. Thanks for checking in.

More to come!