BACHELOR IN LANGUAGE AND BUSINESS COMMUNICATION 05.05.2011
Degree in Marketing and Management Communication
Table of content
1 Introduction 2
1.1 Thesis statement 3
1.2 Research questions 3
1.3 Theory of science 4
1.4 Theoretical framework 5
1.4.1 Jean-Noël Kapferer 6
1.4.2 David Aaker 6
1.4.3 Grönroos 7
1.4.4 Susan Fournier 7
1.5 Delimitation 7
1.6 Structure 8
2 Theoretical background 9
2.1 Brand identity 9
2.1.1 Jean-Nöel Kapferer 10
2.1.2 Aaker 12
2.2 Brand Loyalty 14
2.2.1 Aaker 14
2.2.3 Grönroos 15
2.2.2 Fournier 16
4. Introduction to the Case Study – B&O 17
4.1 Bang & Olufsen 17
4.2 Bang and Olufsen’s brand Identity 18
5. “Speaker docking gets serious with Bang & Olufsen” 21
5.1 Analysis of the video 22
5.1.1 Visual and musical elements 23
5.2 The video and brand identity 24
5.2.1 Kapferer 24
5.2.2 Aaker 26
6. Discussion 29
7 Conclusion 31
1 Introduction
The technology market is one of the most rapidly changing markets today, where changes happen all the time making it hard for companies to keep up the innovation and differentiation of products. Technology is everywhere and it has become a major part of today’s world, and it can be argued that it has resulted in a technology culture. This has also lead to a major saturation of today’s market with more brands than ever before and therefore also more competitors than ever. (Hamann et. al. 2007) This kind of market saturation calls for strong brands which can differentiate themselves from the many other brands on the market. (Hamann et. al. 2007)
However, technology firms often find it hard to accept the importance of branding. According to Mohanbir Sawhney technology firms find it difficult to accept the importance of brand building because they see branding and technology as complete opposites. Branding is consistency but technology is change, as technology firms believe that their success lay in innovation, product feature enhancements, and improving price performance. However it can be hard to differentiate if the focus is solely on product features and price. (Sawhney 2004, p. 201)
This is also a problem according to Nilson who argues that it is hard to differentiate a product as the difference in product attributes is decreasing both concerning product performance, but also in connection to the more tangible objects of products. In other words the difference between ‘poor’ and ‘bad’ product alternatives has in most sectors narrowed significantly. (Nilson 2000, p. 7) Therefore, there needs to be something more to a brand than just the product – there must also be a brand identity system, which will support the brand’s differentiation strategy. (Aaker 2002, p. 68) This is specially a problem in the worlds of high-tech products, where the managers often focus on product attributes and see consumers as rational human beings. (Aaker 2002)
With the above in mind it would be interesting to look at a luxury technology brand like Bang & Olufsen (B&O), which offers products at up to three times the competitor’s prices. B&O specialises in luxury audio and video solutions with an emphasis on quality and design.[1] However this company is also interesting to look at because it is facing challenges in part due to the financial crises. The company faced a massive decline in market value due to the financial crises in 2008,[2] (Appendix 1) where other luxury brands such as Louis Vuitton did fine. According to luxury good analysts Merrill Lynch, brand strength is the key to survive in a turbulent economy. [3] (Appendix 2)
B&O are still running and today the company is turning its economy around. If their stock courses are viewed it is clear that their stocks are increasing and stabilising. (Appendix 3) But if their financial statement from the financial year 2009/2010 is viewed it is clear that this has been due partly to major cut backs and the reducing cost within several fields. Furthermore ,their Business-to-Business with several automobile dealers has made a significant impact on their results. (Appendix 4)
In light of the challenges B&O faces, its perceived status as a luxury brand and the increased focus on luxury brand survival in a period marked by credit crunch, it is therefore interesting to dive into the case of B&O to understand them better from an academic and business perspective. Furthermore B&O is, as mentioned, a luxury brand and their prices range way above competitors which calls for a strong brand, because it demands a strong brand to demand higher prices. (Anderson and Carpenter, 2005 p.184)
1.1 Thesis statement
Taking its departure in this setting, the thesis wishes to examine how B&O communicates its brand identity system, with focus on their recently launched commercial video on YouTube and in continuation of this discuss how B&O deals with aspects of brand loyalty as part of the identity system.
To deal with this problem statement in a structured approach the thesis wishes to include the following research questions as means to understand, learn and reflect on the theoretical disciplines.
1.2 Research questions
1. How is the concept of brand identity understood from the paradigm of;
a. Jean-Nöel Kapferer
b. David A. Aaker
2. How is the concept of brand loyalty understood from the paradigm of
a. David A. Aaker
b. Susan Fournier
c. Chrisitan Grönroos
3. How does the commercial video for the BeoSound 8 communicate B&O’s brand identity from the perspective of:
a. Jean-Nöel Kapferer
b. David A. Aaker
4. How does the brand identity deal with elements of loyalty from the theoretical perspective of:
a. David Aaker
b. Susan Fournier
c. Christian Grönross
1.3 Theory of science
Theory of science provides a framework for providing meaning and understanding of an individual phenomenon. (Skinner 1986)
For the writing and researching of this thesis the scientific approach of philosophical hermeneutics and the hermeneutical circle will be applied.
Philosophical hermeneutics was envisioned by the German philosopher Hans-Georg, who studied under Heidegger and extended his hermeneutical philosophy. Gadamer supports the traditional idea of understanding an unfamiliar text or way of life as a holistic process, and the notion of operating within a hermeneutic circle where a person moves back and forth between specific parts of the ‘text’ and his or her conception of it as a totality. (Skinner 1986) So in order to understand a certain text or situation you must understand the context which in term cannot be understood without understanding the parts making up the text or situation. Therefore, it works as circles where the investigator moves back and forth. However, unlike the traditional hermeneutic tradition, Gadamer argues that you cannot make understanding possible without prior knowledge of a subject so you can never enter a field as tabula rasa but will always be affected by prior knowledge. He argues that:
‘Understanding is not a matter of forgetting our own horizon of meanings and putting ourselves within that of the alien texts or the alien society; it means merging or fusing our own horizons with theirs.’ (Skinner 1986, p. 25)
He argues that it is about combining our own horizons with the horizon of what we wish to investigate. Therefore, the result will always be affected by the author’s preconceptions and prejudices of the investigated topic;
‘…preconceptions and prejudices are what make understanding possible in the first place. They are bound up with our awareness of the historical influence or effectivity of the text; and without this awareness we would not understand it.’ (Skinner 1986, p. 25)
Furthermore, Gadamer argues that there can be no final truth as there will always be more to look into. (Skinner 1986)
The hermeneutical circle will be used by moving in and out from an overall perspective into specific parts. First an overall understanding has been established and in order to understand this the thesis will look into specific parts of this understanding, in order to create meaning. In the video analysis (cf. 5.1) a semiological approach will be applied in order to understand the different elements constructing the meanings of the movie and the context the product is placed in. However, according to the semiological approach these elements could not be understood without a prior knowledge and the whole of the movie could not be understood without the parts (Barthes 1977) – it therefore fit with the approach of the hermeneutical circle.
1.4 Theoretical framework
This theoretical framework will provide an overview and justification of the theories which will be applied in the answering of the problem statement and research questions.
This thesis will look into the concept of brand identity on the basis of two main authors Jean-Noël Kapferer and David Aaker. The focus will be on how B&O creates and communicates brand identity through their campaign video for the new BeoSound 8. Furthermore, the discussion will employ theory about brand loyalty. David Aaker links the two concepts, but in order to explore the concept of brand loyalty even further, and give it an additional perspective, the theory of Susan Fournier and Christian Gönroos will be applied.
These four main authors will be presented further below and their theoretical perspectives will be elaborated in the theoretical background section. (p. 10)
1.4.1 Jean-Noël Kapferer
Jean-Noël Kapferer is considered an expert within the field of branding. He has published six books on branding, advertising and communication. He is a professor of marketing and works as a consultant to many European, Asian and U.S. corporations. (Kapferer 2008)
In this thesis, his book “The New Strategic Brand Management” will be applied. Kapferer puts a large emphasis on the product and argues that without a product there would not be a brand. (Kapferer 2008)
‘Brands cannot exist without a support (products or service). This product and service becomes effectively an embodiment of the brand, that by which the brand becomes real.’(Kapferer 2008, p. 10)
He does not solely focus on the product but acknowledges the fact that there are more to a brand than just the products. However he does have a very strategic view on branding and emphasises the importance of branding as a technique for a company to gain profit. (Kapferer 2008, p. 9) Kapferer’s view on identity is mainly presented in his identity prism, which will be elaborated on later and applied in the case of B&O. (cf. 4.2 and 5.2.1)
1.4.2 David Aaker
David Aaker is, like Kapferer, a much acknowledged author within the field of branding. Aaker is the author of 10 books and more than 80 articles. In his book “Building Strong Brands” Aaker presents a lot of relevant thoughts to discuss both in connection to brand identity and brand loyalty. Aaker argues strongly for the fact that a brand is more than a product (Aaker 2002, p. 75) and presents a brand identity system. Aaker generally emphasises the identity perspective of branding more than Kapferer who emphasises the strategic view.
The identity system will be the basis for the discussion of brand identity from Aaker’s point of view. He argues that this system should end up with a brand-customer relationship. This leads to the next main author applied in this thesis, Grönroos, who argues for a connection between brand loyalty and brand-customer relationship. The concept of brand loyalty will first be presented from Aakers strategic approach and move on to two more relationship oriented perspectives.
Aaker’s thoughts about interpretation as an individual process fit well with the thoughts of philosophical hermeneutics. However he has a bias towards essentialism, which does not fit with the thoughts of philosophical hermeneutics, as this tradition does not believe in one final truth. (Skinner 1986) Furthermore, his emphasis on measuring is contradicting with the philosophical hermeneutic approach.
1.4.3 Grönroos
Grönroos will be the third main theoretician contributing to this thesis. He is a professor of marketing at the Centre for Relationship Marketing and Service Management in Finland. He has published several books and articles on the subject of relationship marketing. Two of these “Relationship Marketing: strategic and tactical implications” (Grönroos 1996) and “The Value Concept and Relationship Marketing” (Ravald and Grönroos 1996) will be applied in this thesis and will contribute to the discussion of brand loyalty and how it is connected to relationship marketing.
Grönroos puts a large emphasis on the relationship part of brand loyalty and argues that there has been a shift in marketing from the more traditional marketing paradigm with the 4 P’s of marketing to a relationship marketing paradigm. (Grönroos 1996)
1.4.4 Susan Fournier
The final main author who will contribute to the answering of this thesis is Susan Fournier and her article “Consumers and their Brands” (Fournier 1998) Fournier is an assistant professor of Business Administration at Harvard University, Cambridge.
Fournier, like Grönroos, puts a large emphasis on the relationship part of branding and in the building of brand loyalty. Her article is built on a study which shows that consumers form different kinds of relationship with certain brands in their lives. Her article is therefore interesting for the discussion of brand loyalty. (Fournier 1998)
1.5 Delimitation
Brand identity is a very broad topic with many different aspects to discuss, however, due to the limited size of this thesis it will only be viewed from the perspective of the Kapferer and Aaker, presented above. Furthermore, the concept of brand loyalty will only be view from the perspective of Aaker, Grönroos and Fournier, even though this field also contains many other interesting aspects. This means that many other theoreticians have been left out. However, as argued above, the four chosen theoreticians have been chosen because they have some complementary views on brand identity and loyalty, which will broaden the analysis and discussion.
The limited size also means that the main focus will be on a specific B&O product and the communication related to this product. This means that the many other products the company produce and sell will not be included in the analysis or discussion. However there will be a chapter providing information on B&O derived from their own website and articles about the company.
The focus will also solely be on Business-to-consumer communication even though B&O has a lot of Business-to-business initiatives.