Cultural Branding & the Psychology Behind Building Unforgettable Brands

By: Giulia Palombo

How do companies build a brand empire? What makes people wait twenty extra minutes while already late to work for a cup of overpriced Starbucks coffee? What makes young white girls everywhere tredge through the snow in Ugg boots for months until they receive their backordered LL Bean boots? What keeps us from looking away whenever we flip the channel to the Kardashians?

According to our readings, there are many factors of marketing strategy that can be identified as catalysts of this consequence. However, after reading the excerpt from Douglas B. Holt and researching his work, I stumbled across his published book, How Brands Become Icons: The Principles of Cultural Branding. In his book, Holt suggests that iconic brands win the hearts of consumers not only because they deliver innovation, high quality, or clear benefits- they also succeed because they “forge a deep connection with the culture.” Companies do this by communicating through myths that play on symbolism that aims to smooth over social anxieties and target inner aspirations of the consumer (such as work and lifestyle aspirations, gender and sexuality, etc.). Cultural branding creates competitive advantages for companies who can master the art because it varies so greatly from standard marketing practices: the main difference being that the strategic focus is on what the brand stands for, not how the brand performs.

Iconic brands are identity-forging brands worthy of admiration and respect. These brands play on identity myths, or simple fictions that address cultural anxieties from afar. By nature, these myths are more imaginary than they are literal and aim to express an audience’s aspired identity. These myths, usually communicated through advertisements, try to smooth over consumer tensions and create an identity consumers aspire towards in both their personal lives and society’s ideology. They create “ritual action”, or the consumer perception that an experience lies within the brand makers’ name, logo, etc., so they purchase the product to engage in the myth.

The most interesting example I found within Holt’s content was the identity myth consumers associated with Corona Beer in the 1980’s. At the time, Corona was a “basement beer”, sold at $4 a case, and branded as an authentic Mexican beer. The 1980’s were also the time American college students across the country began ‘Spring Breaking.” As more and more broke college students made their way to Mexico to spend a week of binge drinking on a budget, they began purchasing Corona in higher volume. The brand exploded, but not just because college students were buying it to try to save money. Corona found that the beer drinkers did not necessarily value partying as a generic concept associated with the brand. Rather they valued beer brands that were associated with the best partying story that resonated best with American college culture. People bought into the Corona brand because drinking it brought an experience of college spring break on a beautiful Mexican beach. Since then, Corona has harnessed this myth and created very successful advertising campaigns such as “Find Your Beach”.

Creating these myths, however, is no easy feat. As I continued reading about these identity myths, I became curious about the psychology behind what it would take to create such a myth, with the overall question: what is the psychology behind branding? Recognizing cultural branding strays far from the standard marketing strategies by targeting consumer anxieties, I then researched articles on the psychology behind branding. My research noted five general features of branding consumer psychology; Personality, Color, Font, and Social Class Associations.

  • Personality: AMA research (3) suggests that there are five common types of personalities that consumers associate with brands:
    • Sincerity: honesty, genuity, and cheerfulness.
    • Excitement: daring, spirited, and imaginative.
    • Competence: reliable, responsible, and dependable.
    • Sophistication : glamorous, presenting, charming, romantic.
    • Ruggedness: tough, strong, outdoorsy.
  • Color: Communicating through color can provoke different emotions and responses from consumers, although research proves that consumer responses to color depend on their individual experiences and cultural background. For example, red can provoke excitement while green can provoke tranquility.
  • Font: Fonts work similarly to colors, and can communicate different messages and tones as well.
  • Patterns: very simply put, using consistency in communication and design can create a brand personality.
  • Social Class Association: by understanding who the ideal customer is and how your brand fits into their concept of themselves, brands can reinforce the positive traits consumers already believe about themselves.

My general takeaways from my research brought me to this conclusion; marketing has become so much more than just the 4 P’s. In such a highly competitive, overpopulated marketing world, marketers such as Holt are continuously redefining the status quo of marketing to continue to make lasting impressions on already overstimulated customers. Through my research on this topic, it was also interesting to think about all the identity myths of brands that I buy into, such as believing I’m a true yogi while wearing a pair of Lululemon yoga pants, or that I’m somehow more corporate when I come into work holding a Starbucks cup instead of Dunkin’ cup. All in all, I believe through this research that marketing strategies will continue to become more complex and detailed as consumer buying power and competitive options increase.

References

  • Holt, Douglas. (2004). How Brands Become Icons: The Principles of Cultural Branding. Boston, Mass.: Harvard Business School Press.
  • Jennifer L. Aaker. (1997). Dimensions of Brand Personality. American Marketing Association. Journal of Marketing Research. Vol. 34, No. 3 (Aug., 1997), pp. 347-356.
  • Odjick, D. (2014, February 1). Why Brands Are Lovable: A Crash Course in the Psychology of Branding. Retrieved September 27, 2015.
Advertisements

Brand Equity and Employee Pay

By: Ashleigh Sargent

In the battle for customers, companies typically focus on branding to promote and build trust in their products and services. While brand equity often allows firms to increase their consumer base and pricing, establishing a strong brand presence can negatively impact employee salaries. Research by Nader Tavassoli, Alina Sorescu, and Rajesh Chandy shows that strong brands actually reduce total payroll costs because employees at the executive and entry levels are willing to accept lower pay (2014). Their study, titled “Employee-Based Brand Equity: Why Firms with Strong Brands Pay Their Executives Less,” proposes new ideas about the scope of marketing campaigns and raises ethical questions about pay grades.

Tavassoli, Sorescu, and Chandy’s article focuses on the ideas of self-identity and self-enhancement. Past research shows that humans feel the need to define their identities both by how they view themselves and how others perceive them. Therefore, individuals will identify more strongly with products, services, and companies associated with success and social status. Research shows that the majority of people use brand affiliations to express and enhance their public and private identities. Consumers select particular brands of goods and services, while employees seek to work for firms with highly recognizable brands. Company executives, many of whom hold positions in the public realm, often identify more with their brands than lower level employees because they strongly define themselves through brand equity transfer. Both CEOs and company executives perceive opportunities for self-enhancement by associating with strong brands because they may accrue social and psychological benefits from the brand equity.

After compiling data from 1,200 consumers as well as compensation data, Tavossoli, Sorescu, and Chandy closely examined interactions between total pay, salary, and brand strength (2014). After controlling for factors such as firm size, external social capital, and corporate reputation, they found statistically significant support for their hypothesis that brand equity impacts employees and consumers in the same way. Brand strength, defined as brand familiarity, quality, distinctiveness, and relevance, negatively affects and lowers total pay for CEOs and younger executives, regardless of the quality of the employees. The researchers also found that the difference in pay between CEOs and non-CEOs decreases as brand strength increases.

These findings have significant implications for the ways marketing teams approach branding because of the financial gains that firms can accrue by reducing payroll costs. The research suggests that strong brand equity allows firms to increase profits by decreasing hiring costs. If firms can better leverage their brand to decrease costs, they can increase profits and potentially improve their market positions. With strong brand equity, companies can also attract and employ outstanding candidates more cheaply. The potential savings are significant, especially when CEOs and executives, who on average receive $5 million in total compensation each year, are willing to receive lower wages. This research calls for deeper thinking about how brands create value, measure marketing returns, and engage marketers with human resource and finance departments.

At the other end of the spectrum, firms may also be able to recruit top talent for entry-level positions at a lower price. New recruits may sacrifice higher salaries to work for firms with strong brands because they may think that working for such companies will improve the strength of their resumes for future opportunities. HR departments and recruiters can strategically use brand equity to show the advantages of accepting positions within their companies. HR departments and hiring committees can also use this leverage in negotiations for executive pay. Perceptions of CEOs usually focus on power, influence, and wealth, which can make salary negotiations challenging. Hiring teams who emphasize the equity benefits of strong brands can adjust salary benchmarks and expectations to reduce payroll costs.

Tavassoli, Sorescu, and Chandy’s findings are positive for companies with strong brand equity, but may have negative ethical implications tied to decreasing salaries, particularly for entry-level employees and recent college graduates. Younger employees often face expenses such as student loans and costs associated with relocating to new cities. Firms with strong brand equity can use resume building to potentially hurt the financial standing of individuals who are just starting their careers. Similar to educational access, certain people who cannot afford lower salaries may not have the opportunity to work for a well-known company and gain the potential future opportunities associated with working for well-known organizations. Smaller firms may also suffer as larger firms convince individuals of the value of their brands, despite offering lower salaries. Marketing departments in small and large companies may need to adjust their branding strategies to focus on a new segment of the market: potential employees. Strategists need to build brand reputation and find ways of quantifying the value of their brand for certain segments of the population when setting salaries or recruiting employees. As more research builds on the findings from this study, companies with varying levels of brand equity will need to evaluate their marketing strategies and goals to best align themselves to an ever-changing, competitive marketplace.

References

Tavassoli, N.T., Sorescu, A., & Chandy, R. (2014). “Employee-based brand equity: Why firms with strong brands pay their employees less.” Journal of Marketing Research, 51.