Professional Documents
Culture Documents
on the Internet
Received (in revised form): 17th January, 2001
HELENA RUBINSTEIN
co-founded the lab after almost 20 years of experience of working on strategic, planning and marketing issues.
She has worked as an inner city business adviser, a health facilities management consultant, and a strategic
planning director in a communications agency prior to specialising in brand strategy, organisation and
communications. In recent months she has researched the developing e-commerce marketplace and has been
focusing on bringing commercial and marketing disciplines to bear on the new online world.
CAROL GRIFFITHS
has 18 years of client-side experience in developing and implementing service brand strategies with blue-chip
companies. As head of brand strategy at NatWest she led the brand work stream within a complete overhaul of
the group’s direction, developing the new brand strategy, internal staff mobilisation and advertising and
promotional programmes.
In 1999 she moved to management consulting, initially within NatWest, where she developed the customer
proposition and media launch programme for NatWest’s Internet bank. She now specialises in bringing the
disciplines of conventional marketing to bear on dot.com developments — identifying and delivering cohesive
external and internal strategies, activities and staff behaviours to achieve consistent, branded customer service.
She regularly lectures on brands and organisational development across Europe.
Abstract
The bubble appears to have burst in high-tech stocks — or at the very least has deflated. Investors
seem to be returning to the safe long-term bets of the old-economy companies. This correction in
the market is an ideal opportunity to review what has been happening to those companies that
have been establishing themselves on the Net.
This paper takes a look at what lessons the new economy can learn from the old, and also how
the Internet is fundamentally changing how companies manage their brands. The basic premise is
that on the Internet the brand itself must be at the heart of the business strategy. The emphasis
shifts from brand to ‘branded experience’, and becomes an issue for the whole company. The key
principles of how to develop your brand remain the same, but the need for speed means that how
you manage it will change forever.
This paper draws on the authors’ extensive experience of building brands online and offline, and
of aligning/integrating internal values and behaviours with external manifestation of the brand.
‘There’ll be two types of business in the year many attributes in common. One of
2000: those online . . . and those out of the chief contributions to their staying
business’. power is that they have developed and
Bill Gates sustained strong brands.
For many years, branding has been
recognised as one of the fundamental
Helena Rubinstein
Managing Director, The Lab,
SETTING THE SCENE: WHY BRANDING tenets of a successful business be-
Waterside House, 47 Kentish MATTERS TO BUSINESSES cause good branding confers many
Town Road, London NW1 8NX
Those companies that have dominated advantages on a company. This sounds
E-mail:
helena_rubinstein@thelabuk.com the FTSE or the Fortune 500 have like the sort of textbook reading from
394 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET
51% 75% 63% 64% 64% 76% 70% 61% 66% 71% 59% 110% 151%
150
BRAND VALUE AS A
PERCENTAGE OF TOTAL
100 MARKET CAPITALISATION
(US$Million)
50
US$,000M
Source: InterBrand
the marketing section of any MBA able to command a higher price and
course, but time and time again strong hence ensure future sales and profits.
brands translate into real equity and In the end, strong brands trans-
sustained profitability. How do they do late directly into superior shareholder
this? returns.
This can be clearly demonstrated
by Figure 1, which shows the value
Benefits of branding attributed to a brand as a propor-
Any even half-savvy consumer will tion of the market capitalisation. Com-
tell you that brands have meanings for panies such as Coke and Ford, which
them over and above the basic are among the most highly valued in
characteristics of the product or the world, have more than half of
service being offered. Coke is not just their value accounted for by the brand.
a brown fizzy liquid but ‘the most Some companies, such as Hertz and
friendly and ubiquitous drink in the Adidas, have a greater proportion of
world’; Fedex is not just a parcel their value attributable to the brand
delivery service but ‘an utterly reli- than to their tangible assets.
able business partner’. These complex But brands also confer other ad-
promises are developed over time and vantages. They can be an inspiration
often after considerable effort and for employees and act as a rallying
expense have been spent on ensuring point; they provide a focus for consis-
that the brand promise can be tency of communications and action;
delivered and then communicated. they help to differentiate from com-
The ultimate aim for companies is to petitors; they can act as a touchstone
create something distinctive that is for the development of new products
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001 395
RUBINSTEIN AND GRIFFITHS
Q XL
F T .c o m
F ir e d u p .c o m
L e tsb u y it.c o m
T r a in lin e .c o m
and services; and they enable com- There are two critical reasons why
panies to appeal appropriately to mul- this is true:
tiple target audiences.
— brands help people to make choices
— branding is transparent on the In-
BRANDING MATTERS MORE ON THE ternet.
INTERNET
396 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET
Marketing
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tenfold. There are literally thousands of fulfilment and delivery is visible to the
vendors selling their wares. What are consumer (Figure 3), and says some-
buyers going to do? They are going to thing about the way you deliver on
tap in the name they have heard of and your (even implicit) brand promise.
believe in. This obviously gives the This begins with the way you
established players (often high-street market to and target potential cus-
names) an advantage. It explains why tomers (what you communicate). Once
so much effort and money goes into people have accessed your site they
securing memorable domain names and need to be able to navigate their way
why the new breed of dot.com com- around it easily and quickly and be able
panies is spending so much on conven- to register without it taking up too
tional advertising (Figure 2). But most much time or asking for unnecessary
have not yet gone beyond awareness to information. Once they have registered
thinking about what they have to do to and decided to buy, consumers must
build the trust and promise required to feel that any financial transaction is safe
be a true brand. and private and they will expect the
goods to be delivered on time, at a
time and place which is convenient
Branding is transparent on the and with the right items. Should there
Internet be a problem, after sales service needs
This brings us to the second reason to be exemplary. All these activities are
why branding matters more. The representative of your brand’s promise.
whole process from downloading and It was not that these activities did not
navigating the site through to all the occur offline but that online they
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001 397
RUBINSTEIN AND GRIFFITHS
are more transparent and very much the authors, you have been disap-
faster. pointed when buying from some of the
well-known brands now trading on the
Internet, you will know that the basic
ARE THERE NEW RULES? rules warrant reiteration.
A growing realisation of the vital role
of brands on the Internet is leading
people to re-examine the approaches A sound economic base for the
they take to branding on the Internet. proposition
Do we need completely new ways of
doing things, or are we in danger of
throwing the baby out with the bath Sound economic basis
water? The answer to both questions is The demise of Boo.com, e-Toys
‘yes’. and letsbuyit.com has proved to
be a wake-up call to many
investors in the sector. In the case
THE FUNDAMENTAL PRINCIPLES STAY of Boo.com a good idea on paper
THE SAME was undermined by unrealistic
Experience tells us that it is unwise to roll-out plans (eight languages in
pretend that you are starting with a 18 countries), an overly com-
blank sheet of paper. While the In- plex ordering process and poor
ternet is encouraging people to ‘break delivery. As with the off-line
the rules’, ‘think out of the box’ and world, it pays to test the concept
seek to make a ‘step change’, there out in one area, and iron out the
seems no valid reason why the logic of service wrinkles before trying to
commerce should disappear altogether. expand. There is a similar les-
Yet recent newspaper headlines would son for letsbuyit.com, where the
suggest otherwise. Wiser voices have fundamental lessons of a scale
recommended caution, but the new threshold seem to have been
gold rush fever has proved too great. ignored.
The recent correction in the market
suggests that the sceptics may have
been right.
In the authors’ view, this is because This is the most basic rule of all. The
the following rules of thumb must still big question is can I provide something
apply: better, cheaper or different online than
I could anywhere else? Even then,
— have a sound economic base (and being cheaper may give you a short-
a clear customer promise) for term advantage but is not usually a
developing an Internet proposition sustainable way to get growth and
— understand and have knowledge of profits.
your consumers and customers Understanding how the Internet
— decide what role the Internet is will help you to deliver sustained
going to play. shareholder value (low-cost supply,
sophisticated customer management,
This is not rocket science. But if, like faster fulfilment, disintermediation,
398 䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 8, NO. 6, 394–404 JULY 2001
BRANDING MATTERS MORE ON THE INTERNET
unique niche offering, for example) is obvious, but we are dealing with a
critical to this debate but so too is technical world, where too often the
understanding the ‘consumer promise’. fascination is with a technological
At base, great brands satisfy a human capability rather than with meeting real
need. If the service or product cannot needs.
fulfil this basic promise then it will not Many of the companies the authors
survive. In other words, the acid test is have worked with have organised
still can I deliver something genuinely themselves around the technology
different, more efficiently and effec- rather than around customer needs. For
tively than anyone else? example, a new start-up based on WAP
technology grouped its divisions
around the different types of technol-
Understand and know your ogy delivery rather than around
consumers and customers customers who would be signing up
for sports services or financial services.
Furthermore, once you have under-
Know your customers stood the needs and dreams of your
Another example of understand- customers, can you meet those needs
ing the customer base concerns profitably? Understanding the correla-
global brands. If you are global tion between profitability and the
then consumers will have global relationship value in your business will
expectations of you. The Gap is help you to decide how far you can
one such brand. It has an excel- realistically go. What are the key
lent website where you can or- indicators of lifetime value — length of
der from a good range of basic relationship/breadth of product take-
clothes . . . if you live in the USA. up/share of customer wallet? Are there
Yet customers in Europe are also clear segments? Is the relationship
loyal to the brand. Compare this determined by speed or information or
with River Island, which stocks a geography? It is important to look at
different range in the USA but the underlying causal relationship not
will happily mail these clothes to just the short-term effects, because
people in the UK. brand loyalty (unless you have first-
mover advantage coupled with first-
class customer service and fulfilment) is
pretty non-existent on the Internet.
Again, this sounds like a truism, but it Information provided by your users
is critical to the success of any will help you to identify and cherish
enterprise. Maintaining a profound and your best customers, enable you to
intuitive insight into human nature and protect them from competitors and
values that goes beyond that of your encourage their loyalty.
competitors will help to confer a
genuine sustainable advantage. You
need to research into emotional as well Decide what role the Internet is going
as rational drivers. This means being to play in your company
tuned in to the needs, wants and The Internet is providing many com-
dreams of your consumers. It sounds panies with a unique opportunity to
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RUBINSTEIN AND GRIFFITHS
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RUBINSTEIN AND GRIFFITHS
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BRANDING MATTERS MORE ON THE INTERNET
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RUBINSTEIN AND GRIFFITHS
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