TWO great Business Week articles on the building of great brands today
Article One: Jeff Bezos on the Power of Word of mouth.
Interesting fact: in the 2004 Interbrand/BusinessWeek Amazon is one of the few “new companies” to have built a valuable brand in today’s world; most brands in the top group have been around for more than 100 years.
In the 2004 survey Amazon’s brand value gained 22% while many of the traditional brands either failed to grow, or grew only weakly.
Q. What does Amazon’s Jeff Bezos use as a strategy to achieve this success?
A. Word of mouth.
Q. What is his strategy to achieve sustainable, ongoing word of mouth?
A. Innovation in and surpassing people’s expectations for customer service.
Here are a choice excepts from the articles (both are well worth reading in full)
From: BW’s interview with Amazon’s CEO
Q: How important is advertising to building the brand?
A: We don't do any television advertising, and we take all of the money that we would put into television advertising, and instead put it into things like free SuperSaver shipping [free shipping on most orders over $25], lower product prices, category expansion, and invention of new features.
We take those funds that might otherwise be used to shout about our service, and put those funds instead into improving the service. That's the philosophy we've taken from the beginning. If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.
From: BW’s article about building Cult brands
This seismic shift in clout from companies to their customers is creating opportunities, especially for younger brands that grew up with the Internet and have become adept at building user communities.
Meanwhile, some traditional brands, such as Coca-Cola and Microsoft, are struggling to retain their mammoth leads in a market where consumers increasingly resist what they see as bland ubiquity and a surfeit of power.
Even brands that have enjoyed decades of success and have instant recognition with consumers can lose some sparkle. Over the past year heavyweights like Microsoft, Coca-Cola, and Walt Disney saw their brand values erode.
Others, like Finnish mobile-phone giant Nokia Corp, No. 8, are struggling to regain momentum. "Nokia used to differentiate but I don't think people would know what to associate with it now," argues Jan Lindemann, Interbrand's global director of brand valuation.
Nokia's head of global branding, Tapio Hedman, admits that "some young people may find Nokia too everyday, too middle of the road." But he disputes the notion that his brand could plummet 18% over 12 months, as it did this year in our ranking, arguing that brand equity takes years to win and lose. "Once you have it, it's a bit like insurance," says Hedman. "It's not likely to be eroded very fast unless you make one mistake after another."
That may be a dangerous point of view to take. Just ask Royal Philips Electronics new chief marketing officer, Andrea Ragnetti, who blames the lack of buzz around the Dutch electronics giant, which dropped 2% in the rankings, to No. 65, on years of underinvesting in the brand. "It's seen as a dull, solid, reliable brand but nothing really special, nothing sparkling," says Ragnetti,
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