Discuss How a Small Business Should Build an Effective Online Brand
Discuss How a Small Business Should Build an Effective Online Brand
The assignment will discuss how a new company launching on the internet, or indeed an existing small bricks and mortar company looking to diverse on to the web, can build a strong brand identity online. When a product launches on the Internet, the brand becomes more than a mere name, it becomes an interactive brand experience. As soon as the brand becomes recognised by the public, it can increase the level of trust in the product or in fact the company itself. However, a company must be aware of the fact that brand identity can also have diverse effects.
Lines et al (1996) define a small business as one which has, 'limited financial resources which has little or no power over its market-place'. The government uses the more precise definition of a firm with fewer than 200 employees.
Chernatony and McDonald (1992) define a brand as, 'an identifiable product or service augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in the face of competition'. An online brand can therefore be explained as using the internet through various forms of media, such as a PC, interactive TV or mobile phones, in order to sustain those added value characteristics which increase the perception of the business to existing and potential customers.
The company I have decided to look at is Falcon Computers. It is a UK business with only two branches and therefore I will assume employs less than 200 people although this is difficult to predict as there could be extra employees to deal with online issues. The company is also relatively unknown and so I will also use this as a basis for defining it as being small. Falcon Computers started out as a one branch store in Sunderland, building computers to meet the needs of its consumers. The website was very basic and was simply a list of prices on an Excel spreadsheet (appendix 1). Now the business has opened another branch in Houghton-le-Spring and its website has become more professional and interactive.
Many bricks and mortar companies have started with a very successful brand name and easily integrated this to their online business. Most notably is Tesco who were already a well recognised brand before moving on to the internet and are now recognised as one of the most popular sites for consumers to shop online. Other companies have been successful by solely launching on the Web, above all Amazon.com which is seen by many as the pinnacle of the online brand and interactive experience.
This assignment is a 'discussion' and focuses on 'how' a small business should build an effective online brand. For this reason the assignment will not focus on the advantages and disadvantages but will look at what Falcon Computer's aims and objectives are and how it can successfully build its brand by using a brand plan and incorporating models such as Smith and Chaffey's Five S Model as well as the Eleven Immutable Laws of Branding identified by Ries and Ries. The assignment will be looking at the method of building an online brand as well as comparing to successful and unsuccessful online brands.
Building a successful online brand is not simply about creating a website and adding a few colours, it is concerned with making the consumer feel like they are visiting a quality, professional and fully interactive site that will be perceived as a true reflection of the company as a whole. In order to do this the company may wish to create a 'brand plan'.
The first issue to address in the creation of the plan is to perform a situation analysis by looking at the current state of brand development. Two years ago the website was in its very early stages with a simple list of prices on an excel spreadsheet. There were no links, pictures or menus - all the things which make up a good website and online brand. Now, however, it is evident that a lot of time and effort has gone into the site as it is very interactive with menus, pictures and even an account and checkout facility. The site contains the falcon logo which can be found at both of its branches providing a consistent and familiar feel to its customers.
It is safe to assume that the aim for Falcon Computers is to increase profits as it is a small business. In order to do this one of its objectives may be to build a strong online brand. The brand has already been introduced into the marketplace but is relatively unknown, therefore it would be necessary to improve brand identity, increasing brand awareness and in turn gaining brand loyalty. Another objective of the business may be to appeal to new customers by increasing company profile, increasing the customer base and not just selling to clients on the loyalty ...
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It is safe to assume that the aim for Falcon Computers is to increase profits as it is a small business. In order to do this one of its objectives may be to build a strong online brand. The brand has already been introduced into the marketplace but is relatively unknown, therefore it would be necessary to improve brand identity, increasing brand awareness and in turn gaining brand loyalty. Another objective of the business may be to appeal to new customers by increasing company profile, increasing the customer base and not just selling to clients on the loyalty ladder.
In order to achieve its objectives, a strategy must be devised. To increase brand identity more money must be invested in the website. It is noticeable that there is no advertising on the current website and this could be an avenue to explore in order to raise funds for re-investment. Aaker and Joachimstaler (2000) realise that creating a brand plan is important in communicating the brand identity. The brand identity is not just the name of the business but is, 'the totality of brand associations including name and symbols that must be communicated' (Chaffey, 2002). The Falcon logo is very eye catching and in my opinion should be used more. The site should not have any links to excel spreadsheets but should be fully web based, as the prices on excel are hard to understand. Once this is overcome the website will be fully interactive and of a much more professional format. When this is achieved it will be followed by brand awareness in that people will perceive your products as being quality if they have been impressed with the website. If an order is then placed and met to their satisfaction and beyond (in terms of good customer and after sales service), repeat purchases will be made and brand loyalty will be formed. Although word of mouth is the main way in which Falcon Computers build their customer base, advertising (especially local) is very important and must be pursued.
The fourth step and arguably the most important one in creating a brand plan is the message. A business must work out what it wants its customers to believe about the brand. The message will be defined by brand drivers of the integrated brand model (figure 1). These include the brand principle, brand personality and associations of the
Figure 1.1: Integrated Brand Model
brand. The brand principle is how Falcon Computers can differentiate its brand from another, for example PC World. It is the business' unique approach to what it does and should be based on the brand promise, incorporating the strengths of the company. I consider myself to be an experienced online shopper and can confidently say that Falcon Computers offer the latest technologies at very competitive prices. A good brand principle could therefore be, 'Innovative and affordable PC ware'. Alternatively they could concentrate on the fact that their main business comes from building PCs to meet the needs of each individual and derive a principle from this. The brand personality is, 'The attribution of human personality traits (seriousness, warmth, imagination, etc.) to a brand as a way to achieve differentiation' (taken from www.brandchannel.com) and it should complement the principle. The brand principle for Falcon Computers will reflect both its online and off-line business such as, 'approachable, knowledgeable, affordable, and quality and customer driven'. Brand associations are, 'The feelings, beliefs and knowledge that consumers (customers) have about brands. These associations are derived as a result of experiences and must be consistent with the brand positioning and the basis of differentiation' (taken from www.brandchannel.com). This includes things such as the logo, any sounds associated with the brand (e.g. Intel Processors), and any specific colours. These three factors together create the brand identity and are essential in delivering its promise.
The business must now decide on its tactics by specifying activities for each part of the strategy. This will undoubtedly involve the use of brand associations. The logo, its design and any factors associated with the brand must be consistent on all correspondence, shop exteriors and website, in order to heighten brand awareness.
The final element of the brand plan is benchmarking. This is comparing the brand with previous years and reviewing it in order to make any changes which will allow the brand to continually improve. Benchmarking can also be performed against other companies, and seeing what they do, however there is a danger of setting the standards too high when doing this. It would be too unrealistic to compare the brand and a website to Amazon.com for example. Falcon Computers could benchmark against other local computer shops based elsewhere in the UK such as Castle Computers in Lancaster.
In order for a business to build an effective online brand, a lot of time and effort (as well as investment) must be put into the creation or improvement of the website. Upon creation of a website the Five S Model of Smith and Chaffey may be considered. This model consists of five elements relevant to online sales which are sell, serve, speak, save and sizzle.
The ability to sell is one of the major and most obvious advantages for a business to go online. It cuts costs in the long run as it takes less staff to complete a single transaction. It is also easier for most consumers and less time consuming. It may not be practical for some products but is for Falcon Computers. Having a good online ordering system further enhances the customer's view that this business is at the forefront of technology (very beneficial when selling technology yourself!). It also supports buying decisions through traditional methods as someone who is not confident about purchasing online may view the website before making a purchase in store. It also, 'offers opportunities to sell into new markets and reach particular segments' (Smith & Chaffey, 2002).
The purpose of serve is to add value to the customer's buying experience by using a web presence as a customer service tool. Falcon Computers would do this in terms of pre, during and post-sales service. This would include services such as emailing customers when out of stock items are back in stock, emailing of order confirmations and dispatch notices and allowing the customer to email the business with any post sales queries. This information should all be easily available on each customers individual online account, wit the option to view and query past orders.
Another advantage of having a business online is the ability to use the internet as a communication tool i.e. speaks to customer. It also allows customers to leave feedback on any aspects of the business which can be turned into improvements. Falcon Computers would achieve this by use of a questionnaire or a feedback/comments link on the website. Speak is therefore used to increase awareness, build the brand and shape customer opinion - all essential in building an effective online brand. It also helps to explore the other four aspects of the Five S Model.
Save has already been mentioned but would include savings for Falcon Computers in terms of customer service, transactional costs, print and distribution. This is the part of the model which will encourage the use of a website for financial reasons.
Sizzle is where the online brand can really be enhanced and come alive by adding value. It relies on how good the website and brand are perceived by any customers that visit it. The Disney website (http://disney.go.com) is an excellent example of how a site can 'sizzle'. Not only is the web address quite unique, it is a fully interactive and enjoyable experience, providing excellent visuals as well as fun jingles and plenty of activities. It instantly gives the impression of a quality brand and successful company. Although following the Disney website would be unrealistic for Falcon Computers, there is a lot more it could do to make its website sizzle by adding jingles or animations. Achieving trust with security and confidentiality is also an issue here.
Finally, in order to complete the building of an effective online brand, it would be beneficial to look at the Eleven Immutable Laws of Internet Branding by Ries and Ries (2001).
The first law is that of either/or, with the internet is being used as a medium or a business. Falcon Computers uses it as a business due to the fact that it sells tangible products of many variations at low prices.
The law of interactivity is the key attribute of the internet. It can be associated with the sizzle aspect of the Five S Model and is essential in allowing the website and brand to move forward.
The law of the common name and the law of the proper name are realised by Falcon Computers as it is short, unique, easy to remember and has the potential to burn in someone's mind. It is a unique rather than generic name. Another example of this is www.Amazon.com being the top retailer of books on the internet rather than www.books.com.
The law of singularity is very difficult and realistically unattainable for Falcon Computers as there are so many PC companies on the internet it would be impossible to take over the big businesses such as PC World and Dell.com.
It is necessary at the present time for Falcon to look at the law of advertising. Advertising off the net will be bigger than advertising on the net due to the interactivity of the internet making it very easy for customers to move to a different website if another is cluttered with adverts.
The seventh law is that of globalism. The Internet will continue to demolish barriers, boundaries and borders for Falcon.
As a seller of innovative technology, the law of time is particularly relevant to Falcon. It is better to be first in the field and iron out the problems over time rather than wait for perfection and allow its competitors to be the first in every market or segment.
The law of vanity is not particularly relevant to Falcon as they are too small a company but it is an area they must be wary of if they are to expand. It is necessary to keep the brand focused and work on increasing its share in the market. It would be a good to have well recognised affiliates of the brand, increasing the status of your own brand as well as offering customers the ease of browsing between relevant sites.
Falcon must be aware of the uncertainty of the internet. The law of divergence disagrees with technology converging. For example there are now many types of radios and telephones now available on the market which all originated from one idea and initial invention.
The eleventh immutable law of internet branding is the law of transformation. Ries and Ries predict that paper directories are doomed, paper catalogues face an uncertain future and the expensive four colour brochure will become rare therefore suggesting that any business not on the internet or preparing to do so will be left far behind in the future.
The combined use of a brand plan, Smith and Chaffey's Five S Model and Ries and Ries' Eleven Immutable Laws of Internet Branding will undoubtedly be a large step in creating an effective online brand. Falcon Computers' current customer base lies with consumers who mostly have some degree of knowledge about PCs and specifically ask for what they would like when ordering one. Other accessories that are sold on the website include sound cards, video cards and various other PC peripherals, therefore requiring some degree of knowledge when purchasing. It would therefore be a good for the business to expand their customer base online to include those customers who have little or no knowledge of PCs and are looking for their first purchase. In order to do this, more less technical packages should be offered like for example Time Computers.
The obvious constraints such as money and expertise are factors when building an online brand and therefore another option may be to outsource the development to another business such as www.terencenet.com. Falcon Computers must also be aware of not making too many mistakes when building an online brand, some of which are identified by Gary Stein (2004) in appendix 2. It would also have been a good idea to look into the twenty-two immutable laws of internet branding had there been a sufficient word limit to do so.
'Every online customer impression counts. It can instantly build or tear down your brand....52% of all your future customers will check out your site before they decide to become a customer' Martin Lindstrom (taken from www.martinlindstrom.com).
The quote from Martin Lindstrom indicates the significance of having a strong online presence and effective online brand if over half of potential customers use the quality of the website to decide on whether to become a customer.
References
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Chaffey D (2002), E-Business and E-Commerce Management, Pearson Education Limited, Harlow.
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Falcon Computers, URL: www.falconcomputers.co.uk, [18th Dec 2004].
Lines et al (1996), The Complete A-Z Business Studies Handbook, Hodder & Stoughton Educational, London.
Martin Lindstrom, URL: www.martinlindstrom.com, [20th Dec 2004]
Ries A & Ries L (2001), The 11 Immutable Laws of Internet Branding, HarperCollins Business, London.
Smith P & Chaffey D (2002), E-Marketing Excellence, Butterworth-Heinemann, Oxford.
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