Over the last few years, we have seen big shifts in terms of what consumers are expecting from and how they are engaging with brands. So, companies are now rethinking the role of Marketing.  It is no longer sufficient for brands to just make a promise and then try to live up to it. There is a lot of research that shows how consumers resonate much more with brands that make a real difference; and love brands that have a purpose.

I am delighted that Ajay Dang, who leads Marketing for Home Care for GCPL India has written this week’s edition. Ajay makes a persuasive case on why the foundation of a brand has to be built on purpose.

Please read on…

purpose
ˈpəːpəs/
Noun

The reason for which something is done or created or for which something exists.

There are two very important days in a person’s life,
The day a person is born, and the day he/she discovers why?

The new world order

The traditional bucketing of consumers is breaking down, aided by changing media and technology. Segmentation like life-stage, income and occupation, while still important, is much less relevant in defining aspirations. Instead, consumers now unite through values and beliefs, thoughts and ideas.

Conventional marketing wisdom said that any product or service needed to have a competitive advantage over the rest in order to be successful. According to Michael Porter, who crafted the theory of competitive advantage, a brand or business has competitive advantage if it has a cost advantage or differentiation.

This logic worked perfectly well in an era where there weren’t too many brands or even categories. Mere product or service differentiations were enough to provide a clear advantage. With categories themselves constantly evolving, newer brands automatically had the benefit of being different.

But there are no sustainable technology or product advantages in most categories today. Any brand of soap, cola, airlines or adhesive can easily replicate every feature that another brand offers. Some benefits can be offered instantly, others in time. Even in hi-tech categories such as biotech or electronic goods, any technology breakthrough at best offers transient ‘patent’ advantages.

“The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, coming up with similar ideas, producing similar products, with similar prices and similar quality.” – Kjell Nordström and Jonas Riddlerstråte, Funky Business

This is when brands get into battles on degrees of comparison…“I wash whiter”, “I’m cleaner”, “30% bigger” etc. The ‘er’ factor.

Besides, the speed at which brands operate today and the ambitious global spread they cover, an innovator brand’s advantages can be matched or subsumed instantaneously. Product and service parity are therefore the death knell of competitive advantage.

Not just that, brands can no longer just compete in their own arenas. They need to compete against all other compelling experiences and indulgences!

Shifting cultural movements are reframing, redefining, reinterpreting and reshaping our values today. We are exploring ourselves, our belonging and participation in the world. We are defined less by tangibles, and more focused on experiences. We are also searching for work and experiences in line with our passions.

So, in this era of consumer empowerment, active engagement, search for meaning, and lack of trust in traditional institutions, how can a brand connect with consumers, both meaningfully and significantly?

Here’s the shift – It’s no longer about what people buy, it’s about what they buy into.

What does that mean? In most categories brands, even leader brands are trapped around being (1) known for good functional things and (2) known for things that are different in the category.

To break out of this trap, a brand needs to find a new connect. A ‘purpose’ or ‘unique point of view’ that leads the conversation in the category or beyond that, in the society. For a brand to thrive today, it’s beyond competing for headspace. It’s about competing for desire and having meaning. In essence, it’s about having a ‘point of view’ or ‘purpose’. Brands and businesses need to be known for things that they believe in – the ‘brand purpose’. They become conversation leaders and inspire advocacy or evangelism.

Tremendous benefits to having a ‘purpose’

Brands with strong, meaningful and relevant purposes are more successful than those without. As Harish Bhat, Member, Group Executive Council, Tata Sons, puts it: “In a world littered with brands jostling each other for consumer mind space, distinctive views offer the best chance of cutting through the clutter instantly and form passionate relationships.”

In fact, without it, brands are in danger of becoming schizophrenic; inconsistent actions and communications lead to greater scrutiny by consumers and societies.

1. The 400% advantage

In the book Grow, Jim Stengel, the former Chief Marketing Officer of P&G, together with Millward Brown, complied a basket of the 50 most ‘purpose-driven’ brands. They found that these brands outperformed the US S&P 500 by almost 400%!

In a recent talk, Jan Zijderveld, President of Unilever Europe, mentioned that brands with a clear purpose in their portfolio were growing at more than two times the rest of the portfolio.

2. Liberating, not restrictive

A purpose enables a brand to transcend its category and stand for something more powerful. It invites like-minded individuals to be a part of something bigger than themselves – something very much desired today. It ‘humanises’ a brand, allowing it to connect with individuals on a more personal level.

Highly adaptive and flexible, a purpose is not tied to a particular business model. It has no expiry date. It generates effective new business models, strategies, and tactics before the current ones have lost their freshness and begun to produce diminishing returns.

3. Engaging and inspiring

Purpose has the power to inspire, provoke and stimulate. It has enabled brands like Dove and companies like Nike and Chipotle to grow much beyond their territory.

Shoes may be about walking or running, but Nike has a point to make not just about shoe performance but about what it means to be an athlete.

Purpose: If you have a body, you’re an athlete
Promise: Maximising personal performance (Just do it)

Watch the Find Your Greatness campaign:

Soap may be about cleansing skin, but Dove has a point to make not just about beautiful skin, but real beauty itself.

Purpose: Beauty comes in all shapes, sizes and ages
Promise: A healthier view of beauty that all women can own and enjoy (Real Beauty)

Watch the Choose Beautiful campaign:

Always has done a great job of its messaging around what it means to be a girl

Watch the #LikeAGirl campaign on

The impact is very real. Consumers who connect with brands via shared values are more receptive, less price sensitive, more tolerant of mistakes and more likely to spread positive word of mouth. That’s pretty much everything that we want!

How to go about building a ‘purpose’

1. Defining purpose

To start with, you need to define the purpose of your brand – how it uniquely touches and improves lives. You could think of it as the ‘soul’ of your brand.

2. Reinforcing the core benefit

That purpose must spring from and reinforce the essence of the core benefit of your brand. So, at the end of the day, while people will buy into a purpose, they will also buy a benefit. In fact, the great thing about a purpose is that it can open up new possibilities to deliver that benefit to your consumers. 

3. Starting to look at consumers differently

Unilever’s Chief Marketing and Communications Officer, Keith Weed, unabashedly declared: “We have to stop looking at consumers as armpits that need deodorising.” Marc Pritchard, Global Brand Officer of P&G echoes the same sentiment: “Consumers and shoppers are people, not demographic profiles.” With purpose-inspired brands, you need to look more broadly at consumers as people and how we can make their everyday lives just a little bit better with our brands.

4. Looking differently at consumer insights

Find insights that are not just about the product benefit but go beyond that. That look at a broader human insight that really motivates people and motivates action. Look for insights that represent human truths; motivations and tensions that only our brands’ benefits can solve.

5. The big idea

“Big ideas are the currency of our industry. Big ideas have to lift the entire brand and make it relevant in people’s lives. Big ideas that are so engaging and surprising that they invite people to participate in our brand communities and that can take many forms from word-of-mouth advocacy and PR, to passing along YouTube videos, to engaging fans on Facebook, to getting on the website, to making a donation to charity, and, of course, participation means purchase. The key is that people become personally associated with the brand and the become loyal members of the community, and even ambassadors.” says Pritchard, as he explains how P&G is implementing this strategy to deliver market share growth and increased sales in targeted consumer markets. Do watch his message when you get the chance: http://www.ana.net/miccontent/showvideo/id/anc2010-pandg

6. Not just fancy words

The surest route to business obsolescence is ignoring or misunderstanding the significance of purpose. As Alfredo Gangotena, the Chief Marketing Officer of MasterCard World Wide, told Sports Business Journal: “You see many brands doing good with cause-related marketing, but honestly, if the cause they are involved in is not fundamental to their brand, what good does it do? Brands are like humans. You can see quickly if they’re faking it.”

A big thanks to Ajay for sharing very insightful perspectives.

We want our consumers to continue to love our products. And love what we stand for. But remember, that at the end of the day, this is not just about our products and our brands.

So, please reflect on what Ajay has written. And commit to playing your part in making our brands and our company more purposeful.