Branding in financial services

When several companies are offering rival products they will want to identify and distinguish their offering. This is called

branding

MA/PhD thesis: dimensions of emotional branding in financial services

Purpose and definitions “a seller’s promise to consistently deliver a specific set of

features, benefits and services to buyers.” Philip Kotler “a name, symbol, design or some combination which

identifies the product as having a sustainable differential advantage.” Peter Doyle

“no more and no less than peoples’ perception of a thing” Lucian Camp

“a name, term,sign,symbol or design, or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors” Philip Kotler

Creating the brand promise

PRODUCT

PRICE

PLACE

PROMOTION

PEOPLE

PROCESS

PHYSICALEVIDENCE

BRAND

SELFIMAGE

QUALITY

COST

EXPECTEDPERFORMANCE

DIFFERENTIATION

Consumer’s outputBrand owner’s input

Building blocks of the branded article

Non-distinguishing intrinsic attributes

Distinguishing intrinsic attributes

Brand name, brand sign, logo, message

Other extrinsic attributes (price, package

PRODUCT

BRAND

Consumerconnection

Consumerrejection

Mortgage

House purchaseInstalments

Fixed, capped, Discount, tracker

NatWest“another way”

BR+85bpBundle price and benefits

Hierarchy of attributes and evaluation of the branded article

1

2

3

4

5

n

Attributes of branded articleConsumer

Evaluation of branded article

After Brunswick 1952,1955

Evaluation of extrinsic and intrinsic attributes

Influence of extrinsic attributes

LOW HIGH

INTRINSIC ATTRIBUTES

Search articles Experience articles

revealed hidden

After Riezebos 1994

Extrinsic attributes and branding A consumer is more or less dependent on the

extrinsic attributes of the branded article when it is difficult to evaluate the intrinsic attributes before purchase

Where the performance of the branded article cannot be guaranteed before purchase the influence of the brand name can be extremely high

Often financial products cannot be evaluated directly even after consumption (referred to as “credence articles” by Darby and Karni 1973) and are therefore very sensitive to influence of extrinsic attributes

Positioning “the brand” as evaluative attribute The brand must be positioned to create

meaning for customers through marketing communications such that it becomes the most important attribute

The brand evaluation comes to override evaluation of other attributes

This is why brands must consistently deliver the promises made in marketing communications

Mutual attribute influence – “irradiation” (Kroeber- Riel 1980)

Intrinsic attributes not seen as important can influence evaluation of intrinsic attributes that are important (eg colour/taste ice cream and oranges, colour/spreadability – margarine, scent/strength – detergent)

Extrinsic attributes can influence the evaluation of intrinsic attributes (eg packaging/freshness – bread, packaging/taste – alcohol)

Other distorting evaluative influences Information processing of attributes may

be distorted in favour of a brand that consumers (unconsciously) prefer. (Russo et al 1998,Predecisional distortion of product information, Journal of Marketing Research 35)

Consider the implications of this for financial product purchase from new financial providers

Functional and expressive characteristics of products FUNCTIONAL Emphasis in

consumption on intrinsic attributes

Maximisation of physical function

EXPRESSIVE Fulfils consumers’

consumption goals in psychosocial world

Reference group symbolism

Brand names have greater communicative value

Recap The extent to which the intrinsic attributes of a

branded article are not perceptible before sale and the extent to which the brand may function as a social symbol determine whether the consumer decision making process is sensitive to brands

The extent to which the branded article is a “credence article” determines the importance of extrinsic attributes

For “credence articles” consider whether the “branding of the distributor” is an attribute in the consumer decision making process.

Strategic functions of brands (based on de Chernatony 2001)

FUNCTION CHARACTERISTICS

As company Embodies personal/core values:Easy, Virgin, Body Shop

As shorthand Heinz= “quality, premium, reliable, well packaged, respectable”. Acts as “chunk” to aid info processing

Risk reducer Minimise risk rather than maximise utility. Mitsubishi cars- few performance claims, many features, low price

Position Functional benefits valued by customers. Volvo=safety, Subaru=performance

Personality Symbolism with emotional role. BMW, Rolex, Cunard

Value cluster Differentiation through values. Virgin= value, fun, innovation. AGA=tradition, constant, efficient,welcoming

Vision The world the brand could create. IKEA=function, resource efficiency. Apple=enabling creativity

Added value Relative to competitors, product in use. SEBO=“superb performance with German engineering as standard

Identity Vision and culture with resonance for staff and customers. Apple=challenge status quo. IKEA=challenge convention

Image Your perception of reality. Renault=as individual as you

Relationship Translate brand values into relationship. Tesco= “the more we sell the less we charge”

Branding benefits (Harrison 2000)

BUYER BENEFITS Product identification Shorthand cue of features

and benefits Distinguishes products of

similar type Reduces buyer search time Increases buyer assurance Assists in quality

evaluation Psychological reward Brand association

SELLER BENEFITS Product awareness Helps launch new product Secures demand Facilitates repeat purchase Fosters brand loyalty Enables premium pricing Provides equity value Offers proprietary brand

assets

Value gap analysis and branding opportunities

“How do you rate existing services?” versus “What’s important to you?”

Brands and semiotics Semiotics is the study of meaning and is

concerned with the symbolism conveyed by objects and words

Meaning is a product of the interaction between sign system and de-coder

Meaning derives from perception based on knowledge and attitudes

Brands use sign systems to create meaning (name, logo, colour, design)

Levels of meaning in brand symbols Utilitarian: functional aspects, reliability,

fitness for purpose, effectiveness. Commercial: exchange values, value for

money, cost-effectiveness. Socio-cultural: social effects of buying,

aspirational groups, social roles Myths: association with heroic stories

Financial services brand images....

Celebrity links and brand association

....and more

How to screw up your brand Remember Kotler: “a seller’s promise to

consistently deliver a specific set of features, benefits and services to buyers.”

Like how to lose£900 million?

How does this resonate withthe consumer?

How to screw up your brand continued Believe that financials not customers are the lever for

improved performance Believe in demographic, psychographic segmentation

rather than profitability segmentation Collect data without understanding the 3 or 4 most

important attributes valued by customers Stalk customers without wooing them Believe that loyalty schemes create loyalty Spend millions on branding without communicating what

value the brand creates for customers Provide vanilla customer service Believe that customer satisfaction is the means to win

New versus old providers “it is more than giving a product like a

current account a name. It is about identifying a target market and then developing a product and brand personality that the target market will identify and prefer.”

Saunders and Watters 1993

Discussion For financial services discuss the

relationship between perceptibility of intrinsic attributes and the influence of extrinsic attributes on the consumer evaluation process.

Discuss the implications for marketing of financial services.