See below for an excerpt of Erich Joachimsthaler and David Aaker’s article published in the Harvard Business Review:
If you take as a given—and we do—that companies must build strong brands to be competitive, then you are faced with a simple yet staggering challenge: How?
In the United States, mass-media advertising has long been the cornerstone of most brand-building efforts. But that norm is threatening to become obsolete. Fragmentation and rising costs are already inhibiting marketing through traditional mass media like television. And new communication channels—which, in some cases, allow individuals to bypass advertising as they peruse entertainment options, obtain information, or shop—are already in use.
Perhaps the new media scene will take more time to develop than the two or three years that the pundits have predicted. Perhaps it will not affect everyone: some people may not want (or may not be able) to pay to access ad-free media. It is not hard to imagine, however, that the media landscape as a whole will be very different in only a few years.
To build strong brands in this uncertain environment, U.S.-based companies would do well to study their counterparts in Europe. Because they were forced to, companies in Europe have long operated in a context that seems to mirror some of the harsher realities of the post-mass-media era. Media options for branded manufacturers in Europe historically have been limited and relatively ineffective. Europeans have had access to fewer commercial television stations, many of which bundle advertisements to avoid program interruptions. It is still rare to see media spanning several countries, despite the hype. What’s more, because of the limited media availability, costs have been high. Even as new cable and satellite television channels were gradually added in European countries, costs did not decline—in part because new brands added to the demand. And powerful retailers in many nations usurp much of the available media capacity to engage in corporate advertising and to strengthen their private-label efforts.
In short, managers of brands in Europe have found that communication through traditional mass media has been ineffective, inefficient, and costly. As a result, many European-based companies have long relied on alternative communication channels to create product awareness, convey brand associations, and develop loyal customer bases. Their brand-building approaches may point the way for others to succeed in the new media age.
Here we focus on the approaches of six companies: the Body Shop, Hugo Boss, Cadbury-Schweppes with its Cadbury chocolate line, Nestlé with its Buitoni brand, Grand Met with its Häagen-Dazs brand, and SMH with Swatch. Drawing on and extrapolating from those approaches, we have developed guidelines that we believe will serve all companies well, regardless of their location, their ability to access traditional mass media, or their desire and ability to involve themselves in the as-yet-undefined new-media opportunities.
Read the full article here.