QUESTION: Last month, your column on customer intimacy ended by saying: “The power of the brand is an effect and not a cause of customer intimacy.” Frankly speaking, that didn’t sound right to us who are aspiring brand managers and members of the Junior Philippine Marketing Association in our school.
Isn’t customer intimacy a new concept? But brand has been around for so long. How can something new be the effect of something very old?
Our own marketing professor who used to be a Unilever brand manager also told us that it’s the brand’s marketing activities and campaigns that create and direct customer intimacy and behavior.
We’ve read several MRx columns where you were answering students. We remember your saying that you like hearing from students. So please help us understand why the power of the brand is not the cause of customer intimacy.
Answer: Thank you for allowing me to connect again with marketing students.
Let’s start with your first question: “How can something new be the effect of something very old?” Customer intimacy is what you regard as new while what’s old is brand power. What we need is to clarify our understanding of the two terms. What is meant by “the power of the brand” and what is customer intimacy?
The power of the brand is known as “brand equity.” According to its inventor, Professor David Aaker, brand equity comes from: (1) consumer awareness of the brand, (2) its perceived quality, (3) the consumer’s brand associations, and (4) consumer loyalty.
These fiyr “pillars” or determinants of brand equity are all consumer based. It is when consumers become more aware of a brand, perceive different kinds and levels of quality in it, associate the brand with positive values and experiences, and give the brand their cognitive, affective and behavioral attachment that a strong brand equity is built. So in this concept of brand equity or the power of the brand, it is an effect and not a cause.
What about customer intimacy? It’s the term that is new. But its concept is old and as old as, if not older than, the brand concept. Your marketing professor spoke of customer intimacy as an effect. He said it’s an effect because it’s “created and directed by marketing activities and campaigns.” That’s speaking from the marketer side of marketing. It’s the traditional and conventional definition of marketing.
The new millennium marketing posits that for an optimal marketing decision and problem solving, you should always start from where the consumers are and not from where you are as the marketer. The literature and research on customer intimacy tell us that it’s all about consumer top-of-mind brand awareness, perceived quality, brand associations and consumer loyalty. These are the consumer behaviors defining and building brand equity or the power of the brand. That’s customer intimacy as a cause and not as an effect.
There’s what my grandson calls another “cool” way to see through the cause-and-effect confusion. You guessed it. It’s in the cause-and-effect chain analysis. Let’s refer to your marketing professor’s cause-and-effect statement. Let’s extend the statement into a chain: For example, the brand’s A&P and pricing led its consumers to repeat brand purchase and raise behavioral loyalty. Then more repeat purchase and raised loyalty encouraged more brand A&P plus price deal.
In the chain’s first leg, it’s the brand action that is the cause while the customer intimacy was the effect. In the second leg, it’s now customer intimacy that’s the cause and brand action the effect. So what’s the true cause?
In philosophy, there’s a concept of the “first cause” and the “subsequent” cause, which is the effect of the first cause. So the issue of the true cause is about the first cause. Is the first cause the consumer behavior (customer intimacy) or the brand behavior (brand equity) from the marketer?
We know that the consumer can decide to buy or not to buy the brand, to be more loyal or less loyal. The consumer is not dependent on the brand for her decision and sentiments. However, it is the brand that is dependent on the consumer for its brand action. If the consumer decides on a no-purchase choice, then the needed brand action gets no support. The first cause is from the consumer and that’s the customer intimacy.
Why bother? When we get into this issue, my students and clients never fail to ask why I take the trouble to explain as fully as I can. I bother because this is an extremely critical issue. The required explanation takes us to the very core of the marketing concept. That tells us that marketing has two related sides. There’s the old marketer side which says that marketing success is first about the marketing mix or the 4 Ps. There’s also the consumer side that says marketing success is first about understanding the consumer needs and values. This is the STP (Segmenting, Targeting, Positioning) side of marketing. Success comes with both. But if you start with the consumer side and the 4Ps only after, then you’re along the path of optimal success while if you jump immediately into the 4Ps and the consumer side only after, then you get sub-optimal success. It matters then where you start first. Start with the first cause; start with the consumer side. Keep your questions coming. Send them to me at ned.roberto@gmail.com.