Q&A with Dr. Kevin Lane Keller, Renowned Brand Strategy and Marketing Management Expert
We’re thrilled to welcome Kevin Lane Keller, E. B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College, as GBK’s latest academic advisor. Kevin is a renowned marketing strategist and best-selling author of Strategic Brand Management, which has been adopted at top business schools and leading firms across the globe. He is also the co-author with Philip Kotler and Alex Chernev of Marketing Management, the most widely used MBA textbook in marketing around the world, now in its 16th edition.
In the Q&A below, GBK President Jeremy Korst interviews Kevin on what goes into building a successful brand strategy, how marketing and brand measurement have evolved, the importance of segmentation, along with advice for CMOs and marketers to maximize the value of their brand.
Jeremy: I have your best-selling book, Strategic Brand Management on my bookshelf as most every other marketer does today. It’s been called “the bible of branding”. You cover a ton of important topics including the key elements of defining a brand strategy and how to build, measure, and manage brand equity. The book is now in its 5th edition, with the 6th edition in development. What's changed since you first wrote the book 25 years ago?
Kevin: I'll start with what hasn't changed because while it’s easy to focus on the changes, you don’t want to lose sight of what’s enduring and essential. The power and benefits of having a strong brand and many of the basic branding principles still hold true. When you talk about brands, their value is in their ability to reduce risk, set expectations, and improve consumers' lives. Whatever form a brand takes – a product, a company, a person, a country, whatever it is – that's what brands fundamentally do.
At the same time, branding is about differentiation and avoiding commoditization. A brand, technically, is your trademarks – your name, symbol, etc. – but it signifies much more than that in terms of meaning and can represent a lot of different things. A great brand is rooted in a great product. While it is easy with branding to focus on the intangibles, nothing beats having a great product for building brand equity.
The power of a brand resides in the minds and hearts of customers. If you really want to build a great brand, you have to figure out how to make people's lives better in ways that others aren't. A lot of great brands, such as Starbucks, Nike, Uber and Airbnb, were born from seizing opportunities in the marketplace. There was an unmet consumer need, and then they just relentlessly delivered on that.
Those are just a few of the most important enduring branding principles. At the same time, there also have been so many changes since I wrote the first edition of the book. Probably the biggest one is how technology has altered the dynamics of marketing, notably in how marketers can engage, communicate and sell to customers. Because of technology, consumers today are in many ways more empowered than ever. But at the same time, marketers have to be careful, because only some of the consumers want to engage with some of their brands and even then, only some of the time. There is quite a continuum in customer engagement for any brand
“ A lot of great brands, such as Starbucks, Nike, Uber and Airbnb, were born from seizing opportunities in the marketplace. There was an unmet consumer need, and then they just relentlessly delivered on that.”
We are continuing to see the classic four Ps of marketing remain relevant, but often in a different kind of way, as with the emergence of dynamic pricing for example. Brands continue to grow by stretching their brand into new categories via brand extensions. One interesting point here is that success for marketers as they scale their brands often comes back to observing a fundamental marketing principle that we cover in the first chapter of the Marketing Management text. Marketing is about satisfying customers' needs and wants better than competitors. With that realization, you don't define your brand and business in terms of the products you sell, rather you define it in terms of the customer needs you're satisfying, the benefits you're supplying, and the problems you're solving.
If you define yourself in that way, then you start thinking about your brand more as a platform, where there's a suite or collection of related and often integrated products and services that help to perform those roles. As brands grow, they naturally evolve away from a product-centric view to a much more customer-centric and needs-driven view, which is, ironically, what we've been preaching to do for a long time.
Other significant changes in the marketing landscape include the rise of direct-to-consumer selling and omnichannel strategies, as well as the proliferation of even more varied integrated marketing communication options. Technology and AI are playing a pivotal role across these areas and all of marketing.
In addition to these changes, it's also important to understand the role of culture and societal shifts in branding. Consumers and other brand stakeholders care about what companies do with their products and marketing, but also about how they run their business and treat the environment, the communities where they operate, and their employees. How are they contributing to social welfare? Brand purpose has to be defined and corporate social responsibility efforts have to be developed with all of these interests in mind, but also in a way that aligns with the brand strategy and positioning too.
In short, while many of the core principles of branding remain the same, the methods of building, communicating, and sustaining brands have evolved quite significantly over the past 25 years. Branding in the 21st century really requires a different skillset and mindset than before.
Q: Your brand equity model is widely used today. For the benefit of our readers, tell us more about the core elements of the model and how marketers can effectively use it to enhance their brand's value?
Kevin: The logic behind the model is simple. To build a strong brand, you need to create the right awareness and image, elicit the right responses, and forge strong customer bonds or relationships. Ideally, all experiences customers have with your brand should contribute to achieving those goals. If that happens, you are creating real value for your brand and building brand equity.
Formally, my Brand Resonance Model is structured like a pyramid. Think of the levels of the pyramid as the rungs of a ladder that you must climb to build a strong brand from the ground up.
At the base of the pyramid is Identity. Who you are in the minds of consumers? Brand salience or the depth and breadth of brand awareness is critical here. Customers need to think of your brand easily and often, at all the right times, in all the right places, and, importantly, in all the right ways.
The next level is the defining the Meaning of your brand – what are you in the minds of customers? This level is composed of two parts: Performance (what are the more tangible or intrinsic associations to your brand in terms of how it functions) and Imagery (what are the more intangible or extrinsic associations to your brand in terms of what it represents, e.g., brand history, heritage, personality or character).
The third level, Response, is about the reactions your brand elicits from customers in terms of how it affects their “head” and their “heart.” What judgments are customers making and what feelings do they have towards your brand based on the meaning it has acquired?
At the top of the pyramid is Relationships, and the ultimate goal, to achieve resonance for your brand. Resonance is defined in terms of an intense, active loyalty relationship. Customers who feel a deeper connection with your brand are more likely to be loyal and advocate for it with others.
The left-hand side of the pyramid is the more rational route to brand building; the right-hand side of the pyramid is the more emotional route. Strong brands go up both sides of the pyramid and establish a rich duality with their customers.
Jeremy: That is such a powerful model. One of the ongoing areas of discussion with our clients is the evolution of brand measurement. How do you see brand measurement and valuation evolving?
Kevin: That's a good question, Jeremy. As you know, traditionally, brand measurement has been approached in two main ways: Sources (inputs) and Outcomes (outputs). Sources refer to the consumer or customer mindset in all the ways described by the brand resonance model. Outcomes relate to the marketplace performance of a brand, as measured in different ways, as well as its overall brand valuation. Brand valuation tries to put a dollar figure on what a brand's worth, and there are always new developments there with various methodologies you can apply.
But to me, it all starts with the sources or inputs. I want to understand what's driving my marketplace performance and brand value – that directly affects the decisions I make. And there, I think the biggest way that brand measurement is evolving is marketers are having to assimilate much more data. With so many different sources of information, there is not one holy grail or silver bullet approach to brand measurement. Each source has pros and cons. The key is to use multiple approaches and pull all the information together to create a more comprehensive and cohesive view of the state of the brand.
As an example, when American Express upgraded their brand tracking to a more holistic brand health measurement system, they adopted a modular approach, combining consumer perceptions, marketplace behaviors, online commentary and other components to gain some really deep and broad insights. In that spirit, I think the keys to success with brand measurement are to first assemble and analyze the best data available and then triangulate findings to gain reliable, actionable insights.
Conceptually, we’re seeing a shift towards using frameworks like the brand resonance model that can integrate diverse information sources to build a thorough understanding of brand health. This evolved thinking goes beyond basic awareness and preference to include concepts like salience, attachment, community, and engagement to generate a much richer and more nuanced view of brand equity.
Brands can collect a ton of information on customers, but the key question is what are you going to do with all of that data? That's where frameworks like the brand resonance model can help to develop a more comprehensive, holistic view of a brand and its strengths and weaknesses.
Jeremy: Do you think that brands and marketers have become too dependent on data or data-driven approaches?
Kevin: I do worry that there's sometimes too much reliance on data leading to overly tactical decisions, e.g., with programmatic advertising and other areas where decisions seem to be very “stimulus-response” driven. These decisions may move the needle and yield short-term gains, but you may not be building the brand in the long run in the way that you need to. The challenge is similar to what we saw with coupons and promotions in the past, where the emphasis became too much on bumping short-term sales and too little on building and sustaining long-term brand value.
Effective branding requires a concerted strategic thrust that communicates what the brand stands for and how it differs from competitors. Activating the brand in a meaningful way is crucial, but this doesn't have to be an either/or situation. For example, promotions can be conducted in a way that are still supportive of the brand, rather than simply offering financial discounts that may ultimately degrade the brand's value. The key is to use data in a way that supports both goals you want to achieve – driving sales in the short run and building the brand in the long run.
Jeremy: That point resonates with the conversations we’re having with clients, as well as other GBK advisors, such as Wharton Professor Stefano Puntoni, who actually just wrote a book on the importance of making data-informed decisions. What recommendations or advice would you share with CMOs and marketers to better understand and maximize the value of their brands?
Kevin: One piece of advice would be for CMOs and marketing teams to always lead with empathy. One of the most important traits for marketers is empathy. You need to put yourselves in consumers’ shoes and see things through their eyes. I still believe this is absolutely essential. It's not new at all – it’s been talked about for years – but it is a challenge for many marketers. A common marketing mistake is to not listen to customers closely enough and mistakenly rely on the way you want consumers to think.
As already discussed, brands today have more ways to learn about how consumers think, feel and act than ever before. The challenge is to leverage this abundance of information to gain a deep, visceral understanding of consumers’ needs and wants, as well as their hopes and dreams. Brands like Nike exemplify this kind of innate understanding. They are hardwired to their brand – what it stands for, what consumers think about it, and what they want to do with their marketing.
The best marketers and brands in the world have the ability to do and think that way. It’s something that they have learned through past experiences, information acquired and constant interactions with consumers.
Jeremy: One of the areas many of our clients struggle with, as do CMOs and marketers, is the trade-off between wanting to have a highly differentiated brand with selective appeal and wanting to have a more accessible brand with appeal to a larger audience. With the latter, more populist strategy, however, you can run the risk of almost becoming generic. Brands can’t afford to be everything to everyone. Segmentation and understanding your target customers are key, yet not every leader fully embraces segmentation.
From your experience, how do brands tackle this? Is segmentation effective? How should they consider being meaningful and to whom?
Kevin: That’s a great question. We often discuss positioning and what the brand should stand for. This discussion includes various conceptual approaches, such as points-of-parity and points-of-difference, which inherently do involve segmentation and targeting. Yet, as crucial as segmentation and targeting are, they are perhaps not emphasized as much as they should be. These are often the most critical – and challenging – decisions you will have to make in formulating your brand strategy.
I'll give you an example. I worked with a craft beer brand called Harpoon, a beloved New England IPA. Their question was where should they fit in the brand engagement pyramid of craft beer drinkers? Do they want to focus on the top of the pyramid, which represents hardcore craft beer enthusiasts or connoisseurs, or at the bottom of the pyramid, which represents the broader mainstream market of casual drinkers who might get a craft beer only every once in a while?
Similarly, when I worked with Dockers, there was the same strategic question. Who should the brand target with respect to the brand engagement pyramid? At the top of the pyramid with those who want to be fashion-forward versus at the bottom of the pyramid with those who just want to be sure that they are fashionable enough? One last example. When I worked with LL Bean, they had to address the same types of questions: How much should the brand try to appeal to the more active outdoors lovers vs. the more everyday person who just needs something warm when going outdoors.
“Segmentation and targeting is vital to help ensure the brand remains relevant to the right customers and avoids stretching too much across the market. Ultimately, brands must make conscious choices about their segmentation, targeting and positioning strategies, and not try to be all things to all people.”
Figuring out how to position each brand and where to focus within each space is a huge issue to your point. How do I find a good place where I'm not trying to be too many things to too many people? Can I design a product lineup and brand architecture strategy to appeal to highly engaged, more extreme consumers at the top end, while still appealing to less engaged, more moderate consumers at the bottom end? It's not easy. In general, vertical stretches are really hard with brands.
That’s why segmentation is so important. There are a lot of ways to segment, but a benefits or needs-based approach generally works well and is a least a good start point. What problems am I trying to solve for each target customer segment? What kinds of benefits do they want? These questions tie back to the platform discussion we were having earlier.
And that's where taking a customer pyramid approach is fascinating because it allows you to explore a lot of different issues: How is this brand relevant to each type of customer segment? How does communication travel horizontally and vertically within and across different segments? And what happens if a brand's known to be most relevant for one segment vs. others?
Segmentation and targeting is vital to help ensure the brand remains relevant to the right customers and avoids stretching too much across the market. Ultimately, brands must make conscious choices about their segmentation, targeting and positioning strategies, and not try to be all things to all people.
Q: What are your top recommendations for today’s CMOs to prepare for all the technology and behavior trends that are happening and will likely continue to happen?
Kevin: As I said earlier, empathy is critical. You also have to stay really plugged in as to what is happening in the marketplace. You have to be on top of all the meaningful developments, from changes in consumer behavior to how technology is evolving. Learning from marketing thought leaders can be helpful too as they can inform or even guide you as to how to think about emerging trends.
Learning from case studies of what top brands are doing right or wrong is also valuable. Case studies can be hugely helpful, but you've got to know how to use them. You have to understand how they relate back to your brand, your company, your market, your situation, etc. They are not always directly relevant to how you should be thinking and what exactly you should be doing. They require the right interpretation and adaptation. Nevertheless, good case studies can provide so many valuable lessons if applied correctly.