Our definition of a brand adheres to a model which shows the extent to which a product or service can be augmented to provide added value to increasing levels of sophistication. This model, views a brand as consisting of four levels:
The generic level is the commodity form that meets the buyer, or user’s basic needs, for example the car satisfying transportation need. This is the easiest aspect for competitors to copy and consequently successful brands have added values over and above this at the expected level.
Within the expected level, the commodity is value engineered to satisfy a specific target’s minimum purchase conditions, such as functional capabilities, availability, pricing, etc. As more buyers enter the market and as repeat buying occurs, the brand would evolve through a better matching of resources to meet customers’ needs (e.g. enhanced’ customer service).
With increased experience, buyers and users become more sophisticated, so the brand would need to be augmented in more refined ways, with added values satisfying non-functional (e.g. emotional) as well as functional needs. For example, promotions might be directed to the user’s peer group to reinforce his or her social standing through ownership of the brand.
With even more experience of the brand, and therefore with a greater tendency to be more critical, it is only creativity that limits the extent to which the brand can mature to the potential level. For example, grocery retail buyers once regarded the Nestle confectionery brands as having reached the zenith of the augmented stage. To counter the threat of their brands slipping back to the expected brand, level, and therefore’ having to fight on price, Nestle shifted their brands to the potential level by developing software for retailers to manage confectionery shelf space to maximize profitability. Experienced consumers recognize that competing items are often similar in terms of product formulation and that brand owners are no longer focusing only on rational functional issues, but are addressing the potential level of brands.