A BRAND IS ‘OWNED’ BY THE MARKETING DEPARTMENT

This myth is stubbornly persistent. The issue of ownership is more complex than it might first appear.

In a strict legal sense, the brand belongs to the entity or individuals that has ownership of the trademarks. In many instances the trademarks will be owned by the business that trades under them, but this is not always the case. Some businesses trade under licence, meaning they pay a third party for the privilege of being able to use their intangible assets, namely their trademarks and IP. This model is frequently used in the drinks industry, when a local manufacturer produces and brands drinks under licence from a third-party owner. In some instances (mostly to minimize their tax exposure), businesses will even license their brand back to their own local operating businesses. Brands are incredibly powerful and valuable assets and as such are usually held, procured or licensed centrally. They are rarely owned by the marketing department.

While it is true that a brand, by virtue of its trademarks and IP, can be legally owned, the really interesting thing about brands is that in two other significant ways, it is the customer who owns the brands. Firstly, as an intangible the brand actually exists and vests within the mind of the customer and secondly, due to a little-known legal concept called ‘transference of rights’, once a customer has bought a branded product, for example a Mars chocolate bar, at the moment of purchase the product actually becomes the property of the customer.

It is not unlike the Catholic understanding of transubstantiation: at the moment of communion, the wafer and wine become the actual body and blood of Christ. Similarly, at the point of purchase the brand becomes the property of the customer. Until they have consumed the product, and for as long thereafter as they care to believe it has an effect on their life, that very specific branded product belongs to them. And yet of course the intangible asset called the Mars brand remains the property of Mars Corporation, just as the intangible concept of God remains God’s.

It’s all about the customer

This distinction is important for several reasons. First, your brand is really just the sum of all of the things that you have ever said and done. As Jeff Bezos, CEO of Amazon reputedly remarked, a brand is ‘what people say about you when you are not in the room’. It is the impression that you leave in the mind of your customer. Secondly, if you lose sight of what your customer wants then your brand is likely to quickly lose relevance and appeal. Thirdly, if your customer owns your brand then the CEO is the one who is now in charge of managing it.

Why marketing was perceived to own the brand

In the early days of post-war consumerism, brands were initially performing a badging and signposting function. They were a simple way of differentiating one product or service from that of another. Businesses didn’t tend to pay huge amounts of attention to the intimate needs and requirements of their customers. A business typically made a product and then looked for ways to sell more of it. A product was made, badged and then depending on the size and resources of the company, advertised. In this context it is easy to see why businesses believed that the marketing department owned the brand; they were the ones branding the product and developing the messaging.

It wasn’t really until the late 1960s and early 1970s that many businesses began to ask their customers what they actually wanted. This caused a lot of business angst and industrial turmoil. Suddenly markets were flooded with new and exciting products manufactured to reasonable quality levels at highly competitive prices. Entire industries were disrupted as new brands like Honda, Datsun and Sony were made available to an eager public. Over the subsequent decades marketing departments in most businesses became necessarily more sophisticated. They conducted qualitative and quantitative research, segmented and prioritized their customers, built a portfolio of brands and launched integrated campaigns across TV, radio, newspapers, direct and field marketing. Marketing was professionalizing itself, reinforcing the sense that they ‘owned’ the brand; after all they had people called ‘brand managers’.

At the same time businesses were also structured so that each department broadly mirrored their place on the value chain. Purchasing, engineering, production, finance, sales, marketing and human resourcing – all operating in their individual silos and getting their job done. Each owned its area of expertise. Of course in reality the brand still resided in the mind of the customer but it didn’t feel like that. Perceptually and practically the brand still belonged to the marketing department.

Then in 1989 the internet was invented and the starting gun was fired on what was to eventually become the digital revolution. The growth in computing power, mobile technology, data transfer and convergence changed the world forever. Fast-forward to the present and we exist in a world where we can interact with brands in any way and via any medium we like. If we want to buy a product on our mobile phone and get it delivered the next day then we expect this to happen seamlessly. If we contact someone in customer services then we expect relevant people inside the business to be made aware of the issue and be on hand to quickly and speedily resolve it. When we revisit a retailer’s website we expect it to remember what we were looking at last time or make helpful suggestions around what we might find new and interesting. If we want to hail a cab instantly or customize a product at the touch of the button then we have a reasonable expectation that this will happen. We live in a world where Amazon can deliver most of its inventory to our doors within twenty-four hours, where we can order a product from Argos at 5.30pm and have it delivered to our homes at 8.30pm, where we can transact with HSBC bank across a multitude of channels and devices and receive a fast, secure and seamless experience.

The changing role of the CEO

Of course, behind the scenes, giving customers the kind of seamless and fluid experiences they have come to expect is difficult and complex. It requires businesses to be joined up and responsive and to act coherently across all parts of the customer journey, to recognize that technology and the power of social media mean that brands can’t afford to have a gap between what they say and what they do. In many markets businesses are now finally aligning and organizing around the customer – a physical acknowledgment that the brand is (and always was) owned by the customer and that the orchestration and delivery of the branded customer experience is now expected. The CEO has effectively become the senior brand manager.

The CEO has to ensure that the brand is intimately connected to the voice of the customer, that the business understands what customers need and that this is reflected in the way the customer journey is organized. As well as having an intimate understanding of the financials, a CEO needs to develop a suite of forward indicators, things that help to ensure continuing relevance and appeal.