Digital transformation exerts an ongoing influence on brand leadership. Companies will continue to succeed only if they can preserve their brand’s essence – while at the same time adapting to evolving contextual circumstances or pursuing their own visionary momentum. To accomplish that, various models for targeted market positioning in the digital age are being developed, such as the Brand Holosphere Model or the Brand Key. We would like to introduce another concept: brand cultivation, an approach used by the BMW Group and developed in cooperation with the University of St. Gallen.
Brand cultivation – a systematic brand leadership approach
For nearly thirty years, the core of modern brand leadership has been identity-oriented brand management. Companies first develop a brand identity, then implement this identity in every “touchpoint” of the brand (such as product design, communication, and trade). Doing so achieves a true “360 staging.” But in the era of digital transformation, a merely static identity is no longer sufficient. Accordingly, the BMW Group, together with the University of St. Gallen, has designed a new brand leadership model. The core of this new model is the notion of brand transformation, which confronts the paradigm of perpetual change and agility. This concept encompasses new forms of both cooperation and culture, as well as developing, promoting, and refining the brand. The argument is that successful companies will master these forms by sustainably cultivating their brands. For this reason, developers in this area speak of “brand cultivation.”
In the past, the main question was whether brand strategy should follow company strategy or vice versa. The brand cultivation model regards both strategies as being united in a single cycle—meaning that the brand itself creates context for further development of the company strategy. In turn, the company strategy will characterize the brand and the brand development.
Contextual and context-independent brands
This model encompasses two main categories in which brands can be classified – context-independent and contextual brand identities. Context-independent brand identities are intertwined with abstract concepts, which, in many industries and sectors, can be “translated.” For example, it is possible for BMW to integrate the idea of “enjoyment” into its brand strategy—not only for driving, but also for other industries.
Developing contextual brands, however, poses more difficulty, because the context upon which their brand identity and their value are based may shift over time. For example, such changes affect a fashion brand such as Abercrombie & Fitch, whose elitist-collegiate image once struck a chord with the spirit of the times. Yet if this highly contextual zeitgeist no longer corresponds with current trends, then Abercrombie will find itself struggling to transform its brand identity.
Furthermore, the model necessitates a networked brand leadership that will determine the development of the company itself. This brand development will require the company to reevaluate its mindset, and for this reason companies must remain open to change. The challenge lies in the fact that sometimes employees will strongly believe in the brand’s tradition—and as a result, frequently will maintain a rather skeptical stance regarding new developments.
If everyone at the company does not get on board, conflicts (“culture clashes”) can arise. Yet, through networked brand leadership, companies can serve as intermediaries among consumers, markets, and employees, and promote new perspectives within the company. Networked brand leadership mediates the exchange of information with both outside and in-house stakeholders, in order to facilitate relationship building and to broker the brand in every direction.
Brand relationships – from brand value to consumer value
By dint of digitalization, the relationship of consumers to brands is gaining immense importance. In the future, brand significance will be more relevant to consumers than brand value. Whereas it used to be a matter of “having” something or “being” someone, today it is more important to “become” something or someone – and this concept is what characterizes the so-called “experience society.”
Moreover, the digital platforms now being used for advertising are fundamentally “dialogue-based” in their structure. Thus, brands must adapt their strategies so that consumers in the experience society sense a direct appeal. Via direct online communication with companies, consumers also have the opportunity to shape the brand by making recommendations and getting the word out.
As a result of digitalization, companies are facing numerous new challenges in brand leadership. But the example from the BMW Group shows that business has to be ready and willing to develop and experiment with new strategies, methods, and models for further brand development and transformation. Even more, it is of the utmost importance to create an intra-company culture that accepts progress and change – because the only way that brands can foster greater cultivation adeptness is through flexible structures and employees.