As we gradually emerge from the COVID-19 crisis, corporations are considering how to best adjust to a new reality. During the pandemic, many managers focused on the optimal way to allocate resources - in a new article in The European Business Review, Ashok Som (ESSEC Business School) and Kazuhiro Asakawa (Keio University) argue that managers and corporations now need to focus on brand-based strategies, rather than those resource-based strategies, to optimize operations.
Resource vs brand-based views
The resource-based approach has traditionally been favoured. It consists of five stages: acquiring the resources by identifying a gap in the market, developing competencies, defining the core competencies of the organization, outlining the competitive advantage these give the organization, and then directing the strategy. This has been seen as a safe, easy way to maximize product value and succeed in a competitive market. In a nutshell, the resource-based view sees the organization as a collection of resources and competencies that can be leveraged for a competitive advantage. However, this method tends to focus on physical resources and more tangible competencies, which means it can overlook less conventional, but still valuable resources like product insight from a cultural perspective.
The brand-based view goes beyond this approach to focus, as the name suggests, on the brand itself. This means reflecting on the motivation behind the product, what makes it different, who the consumers are, and the history of the product. For instance, consider Apple, which has gone from a more basic technology provider to a pricey, in-demand purveyor of must-have tech. Nissan’s Infiniti brand has done the opposite, by “trading down” and offering executive models of its luxury vehicles. While the brands have taken different approaches, both were driven by the need to see their brands succeed and survive in a changing market. Som and Asakawa propose a framework called Brand-Based Value that helps us understand why some brands are successful for many generations, why others are not.
The Brand-Based Value Framework
The BBV framework consists of several key elements: the 3P idea, the story, the DNA, Codes, and Brand Identity, and making the brand aspirational.
3P Idea: This represents the Person, Philosophy, and sense of Purpose behind an idea.
The Story: This refers to the use of storytelling to share the founders’ vision, the brand’s history and heritage, and convey the brand identity. Storytelling makes a brand memorable to its audience: like horses and Hermès, Burberry’s iconic tartan, Marilyn Monroe wearing Chanel No. 5 to bed.
DNA, Codes, and Brand Identity: A brand’s DNA is what makes it unique and different from its competitors: the brand’s Codes are the visual depiction of this DNA. For instance, Chanel’s DNA is composed of women’s liberation from restrictive clothing, chicness, comfort, and elegance, embodied in the practical 2.55 handbag and the sleek silhouettes of the Chanel tweed suit and little black dress. Brands need to show that they are still relevant and desirable in a modern context.
Aspiration and desirability: Since many products are not essential, they need to find a way to appeal to our desires. This refers to how the brand’s DNA is marketed and communicated to consumers, and how the marketing needs to be tailored to regional audiences.
The new business landscape
Over the last few years, we’ve seen a sharp pivot to e-commerce with the ubiquity of technology and the pandemic. This has made it more important than ever to think about brand identity and build an innovative strategy. A brand that can appear both timeless and contemporary can be successful for decades to come. This means that managers need to rethink their strategies. There are a few concepts to keep in mind: using innovation to create consumer desire, communicating the brand’s value rather than the product’s usefulness, capturing consumers’ attention and imagination to build an emotional connection, and offering seamless, personalized consumer experiences, and establishing credibility, legitimacy, and authenticity. By focusing on the Brand-Based Value Framework, a brand can establish its identity, thus establishing a long-term competitive advantage - the brand-based advantage.
Som, A., & Blanckaert, C. (2015). The road to luxury: The evolution, markets, and strategies of luxury brand management. John Wiley & Sons.
Som, A. and Asakawa, K. (2022). When Building-a-Brand is Strategy? The Brand Based View. The European Business Review, January-February, pp. 48-54.