What does “brand” mean? A brand encompasses not only tangible objects, but also intangible information, such as historic reputation, legal significance, the market economy, social culture, psychological connotations, and much more. So tangible + intangible = brand.
Let’s look at Fenjiu [a major baijiu producer] as an example of a company with an old brand. At the end of the 20th century, Fenjiu accounted for over 50 percent of the market share among the eight major alcohol producers. Now, however, Fenjiu is the last among the eight majors, and has in fact faded into a second-tier brand. What led to this state of affairs? Nothing changed in Fenjiu’s production, and there was no drop in quality. The drop in sales indicates that the company was slow in brand construction. It is the author’s opinion that the following must all be improved.
First is brand positioning. Maotai has positioned itself as the “national liquor.” Shuijingfang has for many years called itself “ancient liquor.” Jiannanchun has positioned itself as a high-end liquor. Fenjiu positions itself as the liquor that the common folks can afford to drink; this may sound good, but it gives the impression that the liquor is low-end. I think it’s China’s oldest and highest-end liquor, and as such it should bear the demeanor of a returning sovereign.
Second is the brand system. Many companies, upon growing big, release a series of products; with too many brands, it becomes difficult to manage. Fenjiu has employed over 300 brands, but ordinary people can’t remember which brand represents “Fenjiu.” This is a case of a poor resolution of the question of a brand system. In 1998 Tsingtao Beer’s annual production was 900,000 tonnes; within two years after our strategic brand redesign, they were producing 3.4 million tonnes a year. We helped them resolve the problem of brand system construction. After we’d built them an operable brand system, Tsingtao merged with 18 other beer companies and exploded in size, winning back their title as “leader” of the Chinese beer industry. That was the result of a successful brand system.
Third is brand image. Without processing, the details of corporate culture remain nothing but raw materials. Without being integrated into the brand, they cannot be propagated or acknowledged by the public. So these raw materials should be processed and refined, and incorporated into the brand in a highly condensed manner, to allow more people to identify with and help disseminate the brand value of Fenjiu; this is the only way to establish a brand. Otherwise, even the best cultural resources can never be turned into a brand image.
There are three kinds of brand characteristics. The first is distinguishing characteristics: brand name, logos, or other symbolic characteristics. The second is value characteristics: those that define corporate image as a result of superior qualities and services. The third is guiding characteristics: those that allow the brand to lead market trends owing to business principles that are a cut above the rest. Starbucks is a classic example of a company that rapidly transformed a traditional product into a global brand; a small cup of coffee became a third space in people’s lives. A cup of coffee and a space became a new mode of living. It’s obvious that the Starbucks brand is not simply about a cup of coffee anymore.
The road to branding for the vast majority of companies is as follows: honesty, innovation, and responsibility. The soul of a brand is, thus, brand culture. Without a good brand culture to serve as the brand soul, there will be problems in quality, technology, operations, and management. It is not permissible at any time to make the mistake of dishonesty, nor to become slack in innovation, nor to forget responsibility to society. Honesty is a company’s baseline and its lifeline. Honesty represents the performance of good deeds, whereas innovation represents your real capacity for performing good deeds. If you seek only to make money and are not responsible to anyone, how can your brand take root?