 As-Salam-Alaikum-Khabateena-Hazrat, I welcome you to the Virtual University of Pakistan. We are into lecture number 12 of Brand Management, MKT 624. I started talking about the brand management process as a phased approach a couple of lectures ago. The first step that I talked about was about the building of brand vision. And after that, I started talking about the next step, which is about building the brand picture. There are different steps as part of the whole process or as part of this approach. The first step referring to the vision is just one step, meaning just about the vision itself. Once we have created the right vision of the brand, that brings us to the next series of steps, of which determining brand's image is the first one. So in other words, determining brand image is one of the steps of the brand picture. In order to have a very clear understanding of where we started discussing the concepts and where we are today and where we want to reach in the next couple of lectures, let us take a look at the graphic illustration that I have prepared for you. Taking a look at this screen, we see that developing a brand vision is the first step and that also forms the first phase. The whole process consists of four or five phases, which I will keep on explaining in a step by step. And each phase has a few steps, barring the first one, which has only one step. And this is the way the author of the book Brand Asset Management expresses the whole concept all along the book. So the first step is developing a brand vision. We have developed that vision, we have a clear understanding what a brand vision is, and that brought us to the next topic, which we discussed in the previous lecture, and that was about determining brand's image. Once we are clear about the brand's image, meaning we are clear what is the levels of associations which consumers have in the minds. And also the brand persona, the way company looks at the brand in terms of human characteristics, that takes us to the next step within the phase two, as you can see from this illustration, and that is creating your brand's contract. What is brand's contract? How it is created? What is the significance? These are a few of the factors which I am going to discuss and talk with you in today's lecture. Let us see the significance. Because of the fact that we keep using brands day in, day out, brands have become part of our lives. And having said so, I can state that brands have become a memory. The reason I say that, we start our day with brands, bread, margarine, butter, jam, biscuits, tea, the clothing we have on, the watch that we have on, the bikes that we drive, the bikes that we ride, and the cars that we drive, we are dealing with brands day in, day out. And it is because of that, that I say that brands have become a living memory. We just cannot lose sight of brands. And we also know that brand memory is a series of brand experiences developed over time. And we also know that the image of a brand grows out of cumulative memory, which basically is formed by a brand's associations and persona. I think they are quite very clear. If we succeed in developing the right associations, and if we define the brand's persona right, there is no way that we cannot generate the right image. From consumers' perspective, we are clear that this part of brand development is very externally driven, meaning it has to be a reflection of the consumers. So having said that, toward the brand contract, one thing that we have to make sure is that we maintain that image. And when I say we have to maintain that image, it does not really mean that we stay static, that we stay put. No. What I mean is that we have to change the image also in relation to the changing needs in the marketplace. I keep talking about the fact that the marketplace is a dynamic place. And with the passage of time needs change, expectations change, preferences, likes and dislikes, biases, they all change. And brands have to improve themselves. They have to create their new and renewed standards, which are basically enhanced standards. And having done so, the brands have to respond to the changing needs. And that is why it is said that brands have to change with the passage of time and yet meaning the same. And when I say the meaning of the same, what I mean is that people still expect the same kinds of benefits and the same level of expectations or maybe a higher level of expectations, but the characteristics that are there in their minds as different levels of associations, they expect those to be fulfilled and they expect those to be maintained by the company or by the marketing people all the time. So anything and everything which has gone by goes into the past. And anything that we are doing right now in order to respond to the changes that are taking place is the present. And anything that we are planning to bring about further improvements in order to be prepared to respond to the anticipated changes that deals with the future. The past is memory. In order to understand how we keep the image, which I was talking about, how we keep the image contemporary and up to date in relation to the changing needs and yet keeping the brand, brands meaning the same, we have to understand the memory part because until we understand the whole thing in its past perspective, we cannot really respond to the changes that are taking place in the market. So in other words, keeping the brand's contemporary or keeping them belong to the present means that we have to understand memory part as one part and the future part as a program, which in turn means that there is a program which deals with the present and the future by taking into account the past and past is all memories. To further elaborate the concept, I can say the memories deal with the past and future is managed through a well-guided program that deals with the present and sets the ground for future evolution. Brand managers therefore must define the ground where the brand belongs and carve out the territory from where it will grow in the future. What does that mean? Let me explain that with the help of another concept that I talked about earlier. Remember, brand strategies are all about segmentation and differentiation. So in other words, brands are born out of the strategies of differentiation and segmentation. If you as brand managers can identify the need right, chances are you have identified the segment right. And if you are in the right segment and if you also are in a position to define in very good consumer terms the part of difference or the differentiation, you are all set and on your way to defining the brand contract. In other words, the underlying program indicates the purpose and meaning of both former and future products. And it goes without saying that whatever we have discussed in relation to associations, in relation to segmentation, in relation to differentiation. Having had a very clear understanding of all that, there's no way that we cannot come up with the right program. In other words, with the help of that program, we have to maintain certain consistencies for which we go to things like the historical perspective, which has to be right, so that we can deal with the present right, and so that we can move into the future era with the right moves. The moves, in other words, have got to be free of any distortions of brand character. When I say no distortions, what I mean is that consumers must not have any misunderstandings in their minds in relation to the contemporariness of the brand. They must think all the time that the brand is up to date, the brand is very contemporary and the brand belongs to the present. The moment they start feeling that the brand is outdated, you know the consequences. Sales will drop, profitability will drop, earnings will vanish, so on and so forth. So, in other words, when we talk about responding to the market changes and responding to the market dynamism, this is what we are talking about, that we have to have a program which gives us a good picture into the past, which portrays the present in front of us in the rightmost way and which gives us a very good level of preparedness to go into the process of evolution for future products or for future changes of future improvements. Having had an understanding of the memory part and the role the memories play and the genetic program whereby brands take birth as a result of strategies of segmentation and differentiation, we now move on to the question, what is it that gives brands contemporariness? How can we keep brands very up to date belonging to the present time, meaning very contemporary? The factors that come into play or that we have to address, we have to look into while we are getting ready and getting all set to bring about those changes to stay up to date, the first one is technology. This is something which has been discussed so far in extensive details. You have to look into the need for bringing about any change in technology so that you can improve the quality parameters. I can give you the example of a juice pack if you recall the juice packs or the milk packs that we have on the market in this country are not the same as that we had just a few years ago. Take a close look at the nozzle from where you pour the liquid into the glass and you will know what I'm talking about. Somebody took the lead and others followed and when somebody took the lead, that somebody was the leader and others were the followers and the followers had to follow in order to keep pace, in order to be in step with the market, otherwise they would have lost it. So this is one of the changes which I have told you as an example. You can think of similar examples across various categories. What we should bear in mind is the importance of bringing about a change or in other words, responding to a change in order to stay up to date and in order to be very contemporary so that consumers may not start having the feeling that the brand has become outdated. I think it goes without saying that we would like to maintain, if not stronger, at least the same level of associations which consumers have with our brand. The second area which you might consider is environment. Here again, I can give you the example of the packaging. You may take a look at any package relating any brand which is environmentally friendly. We did talk about this kind of an example in one of the earlier lectures. Any package which keeps the environment from getting more and more littered, any same company or any company which is very socially responsible would like to go for that kind of packaging. The question is, somebody has to take the lead and tell the market that this is the changing need or this is the changing standard to which we have responded. You should always try to make the consumer very important by giving him this feeling that it is he or she that identified the need. The company capitalized on that and as a result of that, the company has fulfilled a responsibility which falls within the domain of social responsibility and hence the company is a very responsible corporate citizen in this market. This is one of the changes which might take place in order to keep your brand or brands up to date. The third example I can give you relates ergonomics E-R-G-O-N-O-M-I-C-S ergonomics. Those of you who have not heard the terminology before, let me tell you that this is a scientific study of humans in relation to their working environment. We have people working in the operations area, we have machines there, we have equipment there and we have so many systems in place because people are working. You have to relate those people with that setup in a way that people working there can optimize their operational efficiencies and this is what ergonomics is all about. To give you an example of a business category, let us talk about the fast food. You walk into fast food restaurants and day in, day out you see people dishing out the same kind of food with the same looks, with the same standards, with the same smell advice that it is the product of a process which they have industrialized even if they are working in a kitchen and when I say industrialized what I'm saying is they have standardized the process so much to the point that everybody and anybody knows where they should be working, how they should be working and the working area and the working conditions have been created in a way that they find themselves working there with optimal efficiency. You may go to any part of the world you will find these products standardized. They will look the same, they will taste the same, meaning they will have the same taste profile that they have in this country and that's what they have all over the world. That's the beauty of standardization. I was talking about the role ergonomics plays. It is not the whole factor of the behind industrializing the process, it is one of the variables and I talked about that as one of the examples for you to be prepared to go for changes in response to the changing needs or in response to the changing times in response to the changing standards. I can also give you an example in the area of physical manifestations. Now this relates to the area of technology. I gave you the example of the juice bag and milk bag and like to talk about that once again in terms of the physical manifestations. You can think of any product, any change that you bring about the way it looks like is a change in its physical manifestations. Now the question is whether you have brought that change just for the sake of change or you have brought about that change because it serves certain purpose but that is something upon you to decide and I'm sure you would like to opt for the latter while bringing about the change. You will not go for the change for the sake of it. Another example I can give you is in the area of communication which is very symbolic. It is not part of the physical manifestations. You have to stay at the very up-to-date or in other words the communication the brand carries out has got to be very up-to-date in relation to the present time, in relation to the present vernacular. What I'm saying is the language that we speak, the slangs that we use, the gestures that we have, brand communication must respond to that and I will give you a classic example of our market. Look around yourself, look at the big hoardings or billboards big companies have all over the place and read the slogans. They are in Urdo but they are written in Roman alphabet. I mean they're written in English. This is a changing trend and this amounts to staying up-to-date and in line with the present times. I think it's a beautiful example of a brand staying very contemporary by using communication which is responding to the present time. So to sum up we can say that a brand must always belong to its present time. It's a simple statement period and it must also be able to respond to changes in consumer behavior caused by one or a combination of the factors that I have just talked about. Staying contemporary means bringing about innovations in response to consumers' likes and expectations and this amounts to engaging into a contract. So in simple words a contract is that you've got to fulfill the expectations, the needs and all the changes that are taking place in relation to those with the help of your brand. That's a brand contract. I will define it further in a few moments but I think our understanding for the time being is clear that we have talked about brand memories or brands being a living memory. We talked about brands being a genetic program and brands coming into being with the help of a genetic program and program is a function of different marketing strategies of which segmentation and differentiation are the prime strategies because it is there that a brand takes birth and then I talked about the need of looking into the past so that we can make the right moves for the present and be prepared for the future. So that is what a brand contract is. I shall keep talking about that until the time I realize that we really have a very clear understanding of the concept. What bears importance at the moment is that a brand must respect its contract, it must attract customers and must assume all the implications and responsibilities in order to satisfy customers needs. How does it fulfill the responsibilities and see to it that implications are taken care of is with the help of certain promises that the brand makes. What are those promises that we should look into those but a few more words on the brand contract. Let me also tell you that it is through consistency and persistence over time that brands create loyal customers. If a brand has loyal customers and it keeps the promises, what will happen? It will deliver the promises and the customers will keep coming back. They will buy the brand. So it has a two way traffic and brand managers therefore have got to make sure that this pattern of traffic goes on. It doesn't get disturbed. Let me also tell you that having said that I can state that brand contract is very economic in nature. It is not something legal. There is something that we have to bear in mind. Why? Because it is not a set of properties or it is not a set of characteristics which are stipulated by a governmental body or some private organization which defines certain quality standards and parameters and says here is a set of all those variables which you've got to fulfill before you can qualify to be a good brand and therefore get into a contractual situation with your customers. It is not that. It is something which happens and which takes place in the market. You develop a good brand. You develop very good levels of associations while I would say that you have hit the highest level of association. Let us assume that. What's going to happen? That's going to bind your customers into a moral contract and into an emotional contract that the customer is going to come back to your brand again and again. That's taken for granted. Until the time you make some big mistakes. You drift, for example, from your basic marketing philosophy or something happens on the competitive front because of a massive onslaught for which again you've got to be prepared. So it is the level of preparedness that we're talking about. It is the changes to which we should be bringing about and innovations that we should be bringing about in order to keep the brands very up to date and contemporary for customers not to lose sight from our brands and not to start considering other competitive brands. You remember one of the questions as part of the marketing research during the brand image process. Why did you consider our brand? What are your perceptions of the strengths and weaknesses of a brand? Did you consider competition, for example? If you did, why? If your brand is not on top, why? If competition is on top, what is the way out to dislodge that? So these are the kind of things which you already have learned and the whole thing boils down to satisfying your customer's needs and keep on satisfying those in relation to the changing needs. So the brand contract gets stronger and stronger if the level of association in the minds of your customers keeps enhancing, keeps going up and up. So there is a direct correlation between the level of association and your ability to maintain the contract. If the level drops in relation to associations, it means you have breached the contract. Something has gone wrong somewhere and there's a breach. You have to be very sure that what consumers, what customers have in the mind, you rule that territory. And you rule that territory only with the help of the characteristics which you offer with the help of your brand. And those are the characteristics which form or which develop associations in consumers' minds. I'm going back and forth the concepts only in order to have you develop a very clear understanding of the concepts, the way they are related. When I talk about vision and when I talk about developing brand image and when I talk about developing brand picture, I'm not talking about all those things out of a one particular box at a time. In a way, I am because I really want you to have a very clear understanding. But then try to relate these concepts with whatever we have learned so far. And you will see that all these things, all these conceptual points converge on one thing and that is to be able to create the point of difference which is going to make your product different from rest of competition and make it sell in the market. Anyway, back to the discussion about brand contract. The territory that you rule in the minds of the customers must be maintained and must be kept all the time. Now, this is the way the brand managers must think. But the reality on ground could be very different. Maybe you cannot rule that all the time because you have threats, you have challenges from competition. What do you do that to make sure that brand contract remains in place? You have to fulfill certain requirements. Let us take a look at those requirements. Before we fulfill those requirements, we must not lose sight of one fact that any company and any brand, however strong they may be, they're not immune from attacks or they're not immune from constraints and limitations. Any brand has limitations and constraints somewhere. So, you've got to be very sensitive to those limitations and those constraints while you are in the process of creating a brand contract. Can you answer my question if I ask you the why? Well, before you do that, let me give the answer to you because I wouldn't like you to start talking about a promise which you cannot deliver because you have certain limitations and constraints. And given those limitations and constraints, you must not talk about anything that cannot be delivered because once you try to deliver that, you are making a deliberate attempt to breach the contract. The contract must not be broken. So, that's about limitations and constraints in relation to creating a brand contract. Another factor that you must not lose sight of before start fulfilling the requirements of the brand contract is the understanding of branding as a concept on the whole. Having said that, I will say here that branding requires internal as well as external marketing. Now, this is one of the factors, important factors that we keep talking from time to time because there are so many different areas within marketing that will invite our attention to the importance of internal as well as external marketing. Just in order to stay contemporary and up to date, we create ever increasing standards day by day. Well, when I say day by day because I'm talking proverbially, it doesn't mean that every day you have a new standard. What it really means is that from time to time we increase standards and we offer those to our customers and we redefine our benchmarks because that's the way to rule the category and to be at the top of the brand value pyramid. Okay, having said so, we can do that only if we really can mobilize the internal resources of the company to work that. To further explain this concept, I would say that all the people within the company, all the management, even people at the workers level, they've got to be convinced of the idea of the brand that you are developing or that you are maintaining through good sales. They must lend you total support because it is the sum total of all the resources which must converge at one point and that point is the development of your brand and the development of the point of reference. Unless all the people within the company are sold to the idea of the kind of brand that you have envisioned, there's no way that you can get total support and therefore there are going to be some people or there are going to be some areas where your efforts might be undermined. So you have to see to it that internal mobilization takes place to the fullest extent within the company and everybody is totally bought in. The importance of external marketing goes without saying and you know the kind of efforts that we all have to carry out out in the market in order to make sure that anything that could be done to prop up the brand and in order to spin it into the winner's circle are being undertaken. So having said that, I can state that it is only upon getting that kind of support from within the company and from outside of the company meaning for the market and from all the stakeholders. Maybe they are banks, maybe they are members of the trade, maybe they are customers and maybe they are any governmental agencies that have stakes in one way or the other in your company. So these are the kind of constraints and limitations and variables that you have to study and analyze before you move on to the kind of requirements that you need to fulfill. Let me give you a few examples of the kinds of requirements that are to be fulfilled in order to have a very good brand contract. You have to for example closely monitor the needs and expectations of the buyer through the marketing research. This is something that we talked during the discussion on brand image. You have to know what are the needs and expectations in relation to the existing products and what are going to be those which will fulfill the need for products to come or for changes to come. So in other words, while carrying out that research you have to be sensitive to discovering new needs. So you have to monitor that area very closely and that is the area of marketing. This was kind of a recall of a concept that we already have discussed but this is a concept which really fits into the requirements of the brand contract. The next one could be from the area of R&D and operations. You have to react to the technological changes as soon as those changes can provide you with a competitive advantage. That is something to keep in mind that you have to have the competitive advantage in the marketplace because that competitive advantage is going to keep your differentiation alive. You have to make sure that the goods that are being sold and that are being sent to the marketplace go to the marketplace in the right volumes and they are of the right quality. This might sound like a very simplistic kind of a requirement but the fact of the matter is that companies do fail at times. They fail because they have certain problems in the areas which directly impact this ability or they may run into problems only because they cannot cope with the increasing demand. Now if you run into that kind of a situation you might think to yourself that this is one of those pleasant problems to deal with. The demand is increasing, you're producing more and more, you're selling more and more, the more and more revenues are coming your way and everybody is laughing their way to the bank so to say, proverbially but that should not be the case. You've got to be prepared all the times to deliver the right volumes to the marketplace and of the right quality. Nothing dissatisfies your partners in the market more than the fact that they are not getting the right quantity and the right quality. You have to keep all of them very satisfied all the time in order to have their support. The next requirement which you've got to fulfill before moving on is that it is not the quantity and the quality that you have to deliver, it is that you have to deliver that very consistently all the time. One break and you're going to have it, complaints are going to start pouring in, that's going to make your life miserable in the sense that you will be devoting attention to addressing to those complaints instead of working on things you are supposed to be working on. So when you are consistent in providing your goods to your members of the trade in the market and who of course are your partners, you are gaining the support and helping them optimize their performance and their performance toward selling your brand. This is an example which falls within the area of shipping and sales. Another requirement that you have to fulfill is about the area of communication. You've got to give meaning to the brand by communicating with your target audience. This sounds like an obsolete kind of a statement which I've been talking about so many different times but it has very different implications here. I'm talking about this statement in the context of brand contract. In other words, in the context of keeping your brand up to date and contemporary in terms of communication and when I talk about giving meaning to the brand, it automatically means that we have the past in view, we have that perspective and we're dealing with the present and while dealing with the present we've got to be very up to date and very contemporary in our approach while we communicate with the target market. So in other words to sum it up I will say I've given you an example from the marketing area, the one example from the technological area, the one example from shipping and sales, one from R&D and the one from communication advertising. Having had all these examples, I think we're now all set to go to the definition of brand contract as given by Mr. Scott Davis, the author of the book Brand Asset Management. I would like to read that out for you and you will see it encompasses all the points from all the angles that we've covered so far. Mr. David says that brand contract is a set of promises that the brand makes to its customers. It is created internally but defined and validated externally by the marketplace. This is a very important definition and this really warrants a little bit of explanation if not a lot. Internally driven and externally validated, these are the terms which we must talk about. It is created internally means that it is the job of the brand manager and then the marketing department and then of course the whole company to first create and then validate that concept or that contract within the company and you're going to do that in the light of your strategies that you have for the brand for your benefit. Of course these strategies of differentiation, of segmentation, the pricing and advertising and this and that all those come into play while you are preparing a brand contract. It is not that you have to look at the strategies outside of the strategic framework. You have been a part of that and you very much are a part of that. You made sure and you keep making sure all the time that the strategies that you have at work and the execution patterns that you have in place, they all are aligned very well. They're very closely related. They have such relationships and such connection points, a contact points rather that there is nothing which is taking place in a vacuum and that is what is meant by brand contract effort being internally driven. Let us talk about the external validation. It goes without saying that whatever internal mobilization that you are caring about within the company about convincing your peers and colleagues and whatever resources that are committed to and whatever is happening in order to get to or in order to converge to that single point from where you go ahead start promoting the brand and initiating all the action it has done in order to create the right image because if the brand carries the right image, it leads to the right associations. If the brand has the right associations, it leads to sales and that is the name of the game. If you succeed in doing all that, the image that you develop and the strategies and all the internal mobilization that you put in place to reach that image is going to be externally validated. The customers in other words are going to say, yes, this is the right image that I have in my mind and I love this product and that is what is meant by external validation because everything that you do within the company has got to be done in consumer terms and if consumers are going to validate that, going to approve that, endorse that, it means you have been successful in your efforts and having said that or rather having given you that interpretation of the definition, I hope that the definition is very clear in your mind. In relation to the brand contract with the being internally created and externally validated, I would like to bring to your knowledge another definition put forward by the Cap Ferrer who has written a beautiful book on the brand management. It's a little higher level book. What he says about this concept is that strong brands bring about internal mobilization and external federalization. This is a beautiful statement which warrants expression in a few more words. Internal mobilization relates to all the efforts that are being carried out within the company. All the resources which are going to converge toward the brand management, that's very clear. By external federalization what he means is that all the units that comprise the stakeholders and units in the form of the members of trade, units in the form of maybe banks that have stakes in the business, units in the form of customers, units in the form of maybe some governmental agencies, anybody else, individuals, organizations, institutions that have interest in the brand or that can be impacted by the movement of the brand. They all unify on a common purpose and that is the brand movement. They unify like a federation only because they have certain purposes which are common to them. So that is what is meant by external federalization. A very brief statement but it speaks volumes. The reason I'm not getting into too much details because I did talk about the importance of stakeholders to be in the same wavelength and then looking at the brand, brand development and brand management of which the brand contract is a part but they must have the same perspective like the management of the company has. Internal mobilization is also very clear. Internal mobilization is also very clear. Now after having talked about that let me make another statement in the end which may sound like very simplistic and you might think to yourself what is so fancy about it and what is so exciting about it and that is the companies have got to stake the very honest. They've got to be very, very careful in determining the need they're going to satisfy therefore determining the right segment and therefore determining the set of promises which they're going to claim and then deliver. Unless a company is 100% careful about all these factors it is not going to be as successful as it should be. Never ever think of trying to deliver those promises which are not built into the product. What comes next? We shall be talking about that in the next lecture. Let me summarize what I talked about today. I started with the concept of brand contract and in relation to that I explained to you the role memories play toward branding. I also talked about brands being a genetic program, the role that program plays in letting us look into the past to have a very realistic perspective of the historical developments that have been taking place to be able to make the right decisions about the present and to be prepared for the future in terms of brand evolution. Then I touched upon a few fundamental requirements that ought to be fulfilled in order to create the rightmost brand contract and converged all the points of discussion on the definition given by Scott David. I shall continue my discussion on brand contract from a few more angles that are important to the concept. Until then, Allah Hafiz.