The table below gives an idea of when these routes are more optimal:
|Offering is sustainably unique||Offering is getting commoditized or there are many competing players|
|Company’s DNA is delivery and/or product oriented||Company is sales and marketing centric|
|Offering is a first entrant||Offering is not the first, but is delivered differently or has new features|
|Offering is not high-engagement or interactive||Offering impacts users self-image, or level of interaction with the service is high|
|Management is not keen on personal publicity, and is tightly focused on business||Management has a flair for publicity and is interested in playing a larger industry or national role|
Table 4.1: Core vs Context Branding
In core branding you have to be really, really good at what you do. So good that you own the category. It’s even better for you if you can create or carve out a category (and hang on to your leadership). Your branding and communication platform is built around what you offer your clients.
I started using Google back in 1998 after a colleague went into raptures about how useful it was compared to AltaVista which was then the favoured engine. Google is an example of a firm that created its own category – categorising all the information in the world – and established leadership. Most of their other offerings are built around this core premise.
Core brands are not necessarily the first in their category. But they are usually the first to provide a service that meets all the users’ requirements of competence in an affordable or convenient manner. Microsoft, Amazon, Wipro have all adopted a core branding strategy.
In general, a core brand is very good at what it does, invests a lot in staying ahead in its chosen field, and builds its communication program around its service or product excellence.
I find that the downside of a core branding approach is that even for offerings which are truly unique, constantly building the better mousetrap is not required in all industries, or by all customers. After a point the quest for excellence ceases to be relevant to the consumers and unprofitable. (How many of you actually USE all the features on that cool TV? Do you want MORE? And would you pay for all those extras?). It may also get more and more difficult to sustain the core promise – for example, Indigo Airlines lives (and dies) by its on-time arrival statistics, but crowded runways will make that progressively harder.
Take the example of hotmail – definitely a great product, and excellent marketing. Putting the self-publicity line “Get Your Free Email at Hotmail,” Was brilliant advertising. But Hotmail was always a functional offering – people didn’t feel “cool” about using hotmail over, say, Yahoo. Contrast this with how google positioned gmail. Sure the offering was superior (more storage) but because it was “by invitation only” in the beta phase it became hip. People ditched their other ids to adopt gmail, which now accounts for over a quarter of emails read.
It’s incredibly arrogant for a company to believe that it can deliver the same sort of product that its rivals do and actually do better for very long. That’s especially true today, when the flow of information and capital is incredibly fast.
Michael Porter, Interview with Fast Company, February 2001.
Google is a good example of a brand that switched from a core to a context strategy. In its launch phase it was very focused on the excellence of its search engine. As that offering matured, it has moved to a context branding approach.
It isn’t always possible to have a simple, easy to define service or product. Nor is it always possible to create a new category based just on excellence. If the service isn’t differentiated in the basic offering and derives its market value from the way it is sold or consumed, then I think core branding is not a sustainable strategy.
That brings us to the second route to differentiation. Context branding. In this case you may not be the first or even the best. But you can find a specific context in which you are superior, and use that as a differentiator.
In the Indian IT industry, Infosys is a great example of this type of branding.
Infosys wasn’t the first big IT company (IBM was). It wasn’t the first big IT firm in India (that credit goes to Tata Consultancy Services). It wasn’t even the first to do remote projects from Bangalore (that honour goes to Texas Instruments). Yet, by 1999 Infosys was being voted “India’s most admired company” by the Economic Times Survey of Most Admired Companies, and featured in the Forbes list of “20 most promising small companies in the world”1. How did they achieve this status? The answer lies in their positioning strategy.
Infosys – the poster-child of context branding
In the early 90s Indian businesses in general were not known for their swanky workspaces, governance standards, or wealth sharing policies. Yes, there were other companies which adhered to these principles, but they did not publicize them and certainly were not well known outside India for these aspects. Mr N R Narayana Murthy long-time Chairman & CEO of Infosys had a guiding philosophy that “we must do something different”.
Infosys’ core offering, IT services delivered from India, wasn’t all that unique. But Infosys decided to differentiate itself from its Indian competition on all the other aspects of an organization – Finance, HR, Marketing, Sales, Corporate Governance, Facilities, Management.
Figure: 4.1 Infosys’ brand elements
Aligned with Infosys’ vision statement to garner “global respect”, each of these departments was encouraged to get global acknowledgement, in the form of awards. This then fed into communications and created a virtuous cycle. And at a time when India had a reputation for being dusty and backward, there was not a speck of rubbish in the Infosys campus – in fact, Mr Murthy was known to personally supervise the cleaning of the cobblestone paths, with toothbrushes!
Of course, none of these features were uncommon in the US, but Infosys stood out because of the context. A clean, ethical, swanky company that shared its wealth with its employees and shareholders in India? In a country then best known for elephants, fakirs, snakes, dust, mud huts and shady business practices? Wow!
Was all of this required to produce great software? Not really. But it did make Infosys one of India’s most desirable employers, make clients proud to work with them, and have international journalists scramble to cover this Indian anomaly.
If you choose the context branding route, you will have to invest in maintaining this differentiation in ADDITION to ensuring that your core business continues to be superior. This is in contrast to core brands which just have to keep excelling in their basic business to keep their engine running.
The principle downside of context branding is that over a period of time others will imitate these features and they won’t be unique any more. So you will have to try harder and harder to “be different”.
Let me use a diagram to summarize what can be used as levers for context branding and core branding respectively.
Fig: Core and Context Branding Elements
An organization can choose any or all of the elements as the ingredients of its branding program.
A more recent example would be Nike’s choice of Kaepernick, a controversial NFL player as their brand ambassador. While it doesn’t change any of their core, functional attributes, it does dramatically change their surround position. In today’s US context it positions Nike as edgy and a bit of a rebel, appealing to both youth and people of colour through this choice.