Brand identity comparison

Abstract

       Brand Identity is of a major for the brand manager. It leads to brand equity for the company. For a brand identity to be strong enough, a company has to be like Amazon and WH Smith, who both enjoy the many benefits they receive from the longterm associations they have had from their customers. Amazon and WH Smith are both retailers who provide many products and services. Where Amazon provides online books, CDS, games, and the likes through direct selling and auctions, WH Smith is famous for Book, and stationery selling, Travelling business, News agency and Music and Television involvement. They offer their services both online and through physical locations. There are several criteria for assessing the two companies’ strength of brand identity, to determine who is better than the other. The paper looks at each in detail, and finally concludes which company has the stronger brand identity.

Introduction of Amazon

       Amazon is a Washington based company which was founded by Jeff Bezos in 1994 with the mission to transform the conventional physical book buying process into an online experience which is fast, easy, and most enjoyable. It was one of the first companies that initiated selling books over the internet. Amazon initially captured the market of online bookselling, then it moved into new product lines like CDs, video games, pet supplies, computer software, electronics, and provided services like auctions and greeting cards, that brought it in competition with eBay. Amazon has now become the largest e-tailer, and through its successful business strategies and sagacious investments and partnership, owns $19 billion of market value. (Saunders, 2001, pp 1-26).

       Amazon has invested in HomeGrocer.com ad Drugstore.com which means huge market share! Amazon introduced in 1997, 1-click shopping, where customers can designate and preset credit card information and shipping details, adding value to the online shopping experience where customers can repeatedly make purchases with one click of the mouse. Customers are allotted a unique identification system on 1-click system, where they are recognized without having to log on again. (Spector 2000, p.143 and 2004, p.197).

       Amazon’s name recognition reflects the website’s popularity of course because it entertains more than 1.5 million customers. Amazon is the Web’s busiest e-tail location. (Willis, 1998). The brand identity that Amazon has created is powerful and meaningful and represents long term association with the customers. Amazon has a well-defined niche that helps the customers identify with the company.

Introduction of WH Smith

       WH Smith is a leading retailer of Books, Stationery, Magazines and Entertainment titles. WH Smith is a British Retailer, which like Amazon, also is an e-tailer, apart from its conventional physical retail outlets. It has its headquarters in Sweden, Wiltshire and England and is best known for its chain of high street, railway station, airport and motorway service station shops that sell books, stationery, magazines, newspapers and entertainment products.

       WH Smith holds the credit for introducing for the first time the ISBN Book catalog system. When you log on to the website of WH Smith, the first thing you see is the offer of free delivery and a long list of services and products that may consume an entire day of exploration. WH smith also offers affiliation to other e-tailers. According to the WH Smith’s workforce, it is an outward-facing, customer-focused, store-responsive organization. WH Smith intends to build on its position as the UK’s most popular stationer, bookseller and newsagent and continue to grow its strongly performing Travel Business and execute its High Street Plan. (WH Smith’s Annual Report, 2008)

       WH Smith’s competitive strengths are:

• Widely recognized and respected brand
• Prime locations
• Purchasing and sourcing scale, driving value for the customer
• Experienced senior management team

       Both organizations have been present on the e-commerce for quite some time now and are doing tremendously well. They have their niches and posses a strong customer base. Common success factors that both the companies share are: Management strategies and their brand identity. Its their name that brings people to them, which it took them years for people to get close with.

Definition of Brand Identity

       Before we go on to discuss what brand identity is, let’s take a look at some similar concepts, namely, brand, brand name, brand image and brand equity.

       A brand is a name and/or mark intended to identify the product of one seller or group of sellers and differential the product from competing products. (Stanton, p.262)

       Brand name consists of words, letters, and/or numbers that can be vocalized. (Stanton, p.262)

       Brand Equity is the positive differential effect that knowing the brand has on customer response to the product or service. (Kotler, p. 249)

       Brand Identity represents what the brand stands for. It is a unique set of associations that implies a promise for delivering a value to the customers. It establishes a relationship between the brand and the customer through value propositions that foster functional, emotional or self-expressive benefits. (Aaker, 1996:68)

       In contrast with brand image which may seem like a similar concept, brand identity fulfills a strategic role whereas brand image is more of a tactical asset for any company which changes overtime. (Kotler & Pfoertsch, 2006:94). The brand identity constitutes and portrays its background, its principles, its purpose and its ambitions. It is the very context of building up brand identity that strong brand management tactics are implied in companies to foster strong brand equity.

       Brand management can be conducted keeping in view the brand in four different aspects.

       Brand as a product:

       Brand as a product, has its identity associated with its shape, attributes, quality, uses and users and country of origin.

       Brand as an organization:

       Here, the managers shift their focus from product to organization attributes, such as customer-relationship management, innovation, perceived quality, visibility and presence all in an attempt to pass through better value propositions.

       Both Amazon and WH Smith brand themselves as an organization. Their customers are associated and are loyal to their names, and purchase the products they sell due to that very reason. Their brand names, rather identities have developed the perception of satisfaction and quality of delivery, where as their organizational values and visions have transformed and are delivered to their customers through their brand identities.

       Brand as a person:

       This is linked with creating a brand personality and brand-customer relationships.

       Brand as a symbol

       This includes creating the brand identity through visual imagery.

For Amazon, the brand identity promises quality, service and value, which has taken years to establish and it has been proven through the repeated use and satisfaction level of the customers. Where geographically customers were limited, online, Amazon reaches and responds to its customers throughout the global. Accessing Amazon is fast is easy.

This to be precise, constitute the brand identity of Amazon.

WH Smith’s brand identity reflects three things as well: Customer focus, Value and accountability. Those are its business values which are very much shaping up the brand identity.

The above aspects of the brand identity are grouped under the Core and the Extended brand identity of a company and its products.

Core Brand Identity

       The core brand identity captures the brand values and vision, and represents the essence of the brand. It is the core identity elements that sustain the brand, keeping it unique and valuable. (Aaker, 1996: 85-89)

       Amazon treats all of its products and services under the same brand values: quality, service and value. Although, Amazon has the brand identity of providing an excellent online shopping experience. But at a more profound and core spectrum Amazon focuses on two elements: satisfaction and operational frugality. These form its core brand identity.

       WH Smith, on the other hand, constitute the following values into its brands that shape its brand identity:

• Customer focus
• Drive for better results
• Accountability in delivery of products and services.
• Value People

Extended Brand Identity

       The extended brand identity completes the brand, by performing a texture role to funnel the core identity to a direction of the brand. Extended brand identity changes with time and doesn’t confine itself to time frames.

       For Amazon, introduction of 1-Click Shopping Experience was extending the brand identity, which secures customer credit card numbers, and speeds up delivery. Although they were still providing the online shopping experience, but the 1 click technology shaped up the brand further, which was open for advancements in the future, where the core identity remained constant.

       Other than that, Amazon’s extended brand identity is based on two strong models: the conceptual and structural model. The conceptual model includes the concept of a reference catalogue, which helps to uniform product categories. This reference catalog gives users clear understanding of what Amazon.com offers and how it is organised. (Baley, 2003, pp. 382-389).

       Another model is the structural model, which constitutes of the huge content on the web page that makes it look like a hub, whose center contains the product details and category index pages. This model is used as a guide by the surfers or potential buyers to explore the website. (Baxley, 2003, pp. 382-389). This model lets Amazon.com provide clear, brief and relevant information (Farkas & Farkas, 2000, pp.341-358).

       So, the extended brand identity for Amazon became that it provides, speed and promptness in delivering value along with proper provision and location on content on the website.

       In 1966, W H Smith created a 9-digit code, called Standard Book Numbering or SBN. It was developed for uniquely referencing books. They gained ownership of various music stores and also developed UK’s earliest cable television channels. What were they doing? They were extending their brand identity to broader spectrums, other than facilitating prompt and reliable services as retailers of books and stationery, they provided retailing outlets for music, tv and news. Now they are also entering into the travel industry. However the basic core brand identity remains the same, customer focus and accountability.

Value Preposition

       Value proposition of the brand is the full mix of benefits upon which it is positioned. It is the answer to the customer’s question, “Why should I buy your brand?”

Values proposition of Amazon.com is based on its two basic values: These include customer satisfaction and operational frugality. This is further broken down into:

Product focus: to make products that customer will buy with interest.

Customer focus: to find a way to satisfy needs and expectation of customers through a variety of products and services.

Technology focus: to use technology to solve real problems. Now, technology has been used for easy ordering (e.g. One-Click System).

Distribution focus: to expand its business international to ensure distribution to all existing and potential customers. Now, Amazon.com has its retail websites not only in the US, but also in Canada, UK, Japan, Germany, France and so on.

On the other hand, WH Smith Seeks to be honest and fair in dealings with its customers and provide the quality and standard of service that customers have a right to expect, this defines its basis for the value proposition.

WH Smith focuses on:

• Providing and promoting a range of products that are responsive to customer needs; and
• Providing products that are safe, fit for purpose, meet legal standards.

At a more finely tuned level, there are five winning value propositions upon which companies can possibly position their products:

       More for More:

       More for more positioning involves providing the most upscale product or service and charging a higher price to cover the higher costs.

       Wh Smith focuses more on high margin products, like books and stationery, rather than its music and tv products, that have low margins. This increases its sales revenue, making it a brand that offers the value proposition of more for more, where WH Smith justifies the more charge for books based on their high quality and easy accessibility.

       More for the Same:

       Companies can attack a competitor’s more-for-more positioning by introducing a brand offering comparable quality but a lower price.

       The Same for Less:

       Offering the same for less can be a powerful value proposition – everyone likes a good deal.

       Amazon to persue cost-leadership is differentes itself primarily on the basis of price. Due to this strategy, Amazon.com offers the same quality products as other companies for a considerably less price. Therefore, it follows the “same for Less” value proposition. This results in a high amount of traffic at the website. And why not? Everyone wants to pay less the same products that are available everywhere.

       Much for less:

       A market almost always exists for products that offer less and therefore cost less. Few people need, want, or can afford “the vey best” in everything they buy.

       More for less:

       Of course, the wining value proposition would be to offer “more for less.” Many companies claim to do this.

Relationships

       Creating brand identities through value propositions are rendered useless if what is communicated is not delivered. When superior value is delivered to the customers as perceived through the brand identity, that’s when the brand developed long-term profitable relationships with its customers.

       Building relationships with the customers linked with its brands is very important for almost every company that intends to survive in the long run.

       What benefit do relationships provide to the overall brand identity? First of all, building relationships ensures repeat purchases. Secondly, when customers feel associated with the brand, they get involved in viral marketing for the brand through word or mouth or via internet. This helps in fostering a strong brand image. Thirdly, profitable customer relationships mean brand equity.

       Brand Equity is the positive differential effect that knowing the brand name has on customer response to the product or service. A measure of a brand’s equity is the extent to which the customers are willing to pay more for the brand. A brand with strong brand equity is a very valuable asset. (Kotler, p. 249)

       On the Amazon’s website, high importance is given to the customer interface, which includes the technologies such as the 1 click technology, online catalogues, etc, that enable frictionless shopping experience, and give customers whatever they want to buy in a matter of seconds. This customer interface is customized to each user’s preferences. Each time the customer logs in to the website, the content is displayed according to the customer’s preferences, based on their profile (2004, p.188). If this does not result in customer satisfaction then what does! Everyone who once logs on to Amazon, never forgets the experience, and gets associated for a long time. This is the brand-customer relationship at its height.

       It is the very essence of building long-term profitable relationships with the customers to ensure a brand equity that WH Smith treats its customers with paramount importance. It deals with them honestly and fairly. It delivers the quality that the customers expect based on its brand identity. WH Smith Plc treats all customer complaints seriously and provides a readily accessible source of advice and guidance regarding its products and services. (URL: WH Smith Plc). And the result? Strong customer and brand relationship, which have generated the company high revenues and growth all throughout the years.

Conclusion

       Now to answer to the questions as to who is better in terms of brand identity: Amazon or WH Smith. Lets see.

       Both the companies have been around for quite sometime. With WH having 445 Travel units, and 557 High Street Stores, is UK’s most popular Stationer, Book Seller, News Agent and Travel Agent, which operates on physical locations as well as online. On the other hand, we have Amazon, who started off initially with online book selling then moved onto various products and services that it now sells online, which includes online auctions, having more than 1.5 million customers.

       WH Smith had a strong customer base from its physical retail stores before it started to operate online as well. So the traffic it gathered there, was mainly because of the strong brand identity it had managed to create. Whereas, for Amazon, generating traffic from scratch was the obstacle which it managed to do just fine in a matter of a short time. Why? It created a brand identity that was more powerful than any other book sellers, because it had promised to provide a service and experience that was not offered before. Amazon saw and captured a niche, which was online book selling at the time of its formation. And it resulted in cost leadership, market leadership and of course strong brand identity and brand equity. Although, several arguments are against Amazon, that by entering into several market segments, Amazon is beginning to lose its brand identity. But when you look at it this way that, Amazon is present in almost every country, it caters to a lot of customers, and has managed to retain them and sustain its profitability. So has WH Smith, but Amazon captures a larger market, and for that matter, its brand identity seems stronger. WH Smith may not be known that much outside UK but Amazon is worldwide, its offers, services are unique. It’s the market leader in online selling. WH Smith, has customer loyalty no doubt and strong management practices. But compared with Amazon, that is quick with responsiveness to market needs, without having to effect its brand identity.

Looking at the criteria for determining the strength of the brand identity, namely the core brand identity, the extended brand identity, the value proposition and the relationship, Amazon clearly wins the competition.

Amazon offers a larger and more solid pool of core brand identity and with its latest and up to date technological use in improving customer interface, has developed a good and impressive extended brand identity and continues to do so. And as for the value proposition, Amazon is the cost leader and customers prefer it due to the offer of “Same for Less”. And lastly, Amazon continually works hard to improve its customer relationships.

Therefore, it can be rightly said that Amazon has a stronger brand identity.