First of, great companies don’t just create great brands, they also create movements. Indeed, it’s always dangerous to make direct business analogies from sport, nevertheless, there are some useful things to learn about brand equity from Kaizer Chiefs. Still, with the majority of the continent hoarse from shouting, urging their teams to glory or to new depths of despair at the AFCON, it dawned on me that this week the Under 30 CEO had to diarize information about brand equity.
One football club from Soweto in Johannesburg, had fascinated me with how easily it managed to leverage the success of its brand as a platform to enter the landscape of a new sport,that is 7’s rugby, whilst managing to maintain the same hype that surrounds the football brand.
Certainly, the club has managed to leverage the success of its brand to create a platform for new products thereby sampling the benefits of having a powerful brand, whilst continuing to be the trendsetter in South African sport. This tremendous value attached to the brand by the paying customers is brand equity and it’s an intangible asset.
Interestingly, they even put together a 7’s Rugby technical team comprising, team coach- Gcobani Bobo, a former Springbok (National Rugby Team player), team manager- Makhaya Ntini, a former national Cricket team player, and team captain- Breyton Pulse, another former Springbok, who are easily recognizable to the rugby community.
Already, I can hear grumblings of discontent, “we don’t have the same marketing budgets or financial resources like them, in addition, the economic climate is currently hostile and we can’t afford brisk spending,” are always the major reasons that emanate from the minds and mouths of most entrepreneurs. However, brand equity is not created overnight. Building brand equity requires a significant effort; you need to invest strategically in market education and the communication channels that you use. Fortunately, the costs of communication have been significantly reduced with the advent of the excessive use of social media,and the social media evolution has become the court of public opinions. Furthermore, the brand will appreciate in value through market share growth, economic growth in profit margins.
In “Managing Brand Equity”, a paper published in 1989, Peter H. Farquhar outlined the most notable stages that are required in order to build a strong brand, as follows:
– Introduction– a hero (quality) product should be introduced with the intended strategy of using the brand as a platform from which you can launch future products. A positive evaluation by the consumer is important and augurs well for the organization.
– Elaboration- a brand should be easy to remember and develop repeat usage. There should be accessible brand attitude at all times, that is, the consumer should easily remember their positive evaluation of the brand.
– Fortification-the brand should carry a consistent image over time to reinforce its place in the consumer’s mind and develop a special and lasting relationship with the consumer. Brand extensions can further fortify the brand, but only when the related products have a perceived fit in the mind of the consumer.
Nigerians are fascinating sometimes, when they embark on any career path they become world class, think Ngozi Okonjo-Iweala, D’Banj, Austin ”Jay-Jay” Okocha etc. These are recognizable names globally; they have managed to create brand equity for themselves by being memorable, and more easily recognizable. Furthermore, the superiority and reliability of them producing a scotching album or a captivating performance on the football pitch is what endears or what endeared them to the global populace, because of the positive association they managed to instill in the minds of people. Not to forget, Africa’s richest man, Aliko Dangote, who is also among the World top 100, always unwillingly trouble statisticians and wealth teams of publication, who have to endure the pain of going through the same old mundane ritual of validating the movements in their net worth.
Brand Equity describes the value of having a well-known brand name, based on the idea that the owner of the well-known brand can generate more money from products with that brand name than from products with a less well-known name, as consumers believe that a product with a well-known name is better than products with less well-known names, according to Wikipedia. One of the most valuable assets a company can have is brands;and brand equity is one of the factors that have the potential to increase the financial value of your brand.
Normally, when a brand begins to embody the promise about the goods that it identifies- usually a promise pertaining to quality, performance, for example, this can have an influence on consumers’ choice among competing products.
Another case in point, which also validates the importance of positive brand equity, is how Kaizer Chiefs (‘Amakhosi 4 life!’ as loyal fans call them) have also managed to offer insurance products that are not doing badly on the market because in the eyes of the paying customers, the products can be associated with their existing and successful brand, and there is a lower risk of failure from their perspective. Noteworthy is the fact that another real return from having a powerful brand name, is the club’s monumental sponsorship deal with its sponsor Vodacom sealed last year, which could be north or south of R500 million ($57 million) over 5 years, depending on whom you want to listen to and believe.
Interestingly, Kaizer Chiefs have managed to ensure that the brand equity that they borrowed to extend the brand name to the other initiatives that they undertook, didn’t dilute the original brand equity, which is an unnecessary pitfall of brand extension.
Add to that Kaizer Motaung Snr, the founder, has become a personal ambassador for Kaizer Chiefs’ approach both inside and outside the organization.
You can imagine the free publicity the club would generate by rightly making an appearance at the FIFA World Club Championship, a springboard to sealing the status of your brand globally, despite the fact that the Soweto Derby– a match against their arch-rivals Orlando Pirates, is broadcast globally and is a useful brand awareness campaign. Obviously, Kaizer Chiefs has the strongest football club brand in South Africa, and have been positioned as a premium brand, the consistency and authenticity of their products is never in doubt, and the consumer’s perception of the brand is legendary in South African sport. However, it wouldn’t hurt them as a club if they could put together concrete plans to join the annual pilgrimage to the club extravaganza, whose sole invitation card is only available to the African Champions League winners. Unfortunately, the bureaucrats of world football won’t aim a friendly smile in your direction if you try to gate crash the party on your own terms other than the one alluded to earlier because they can only accommodate one African club at the annual extravaganza.
Looking ahead, an enterprise should focus on creating brand equity, and then work out how to invest in the brands that create an advantage. Surely, lack of brand equity will never give you an insurmountable advantage over your competitors, and the ugly fantasy of stagnation of your business will become real. This phenomenon in no way undermines equality of opportunity.