In today's competitive marketplace, brand has become more important than ever before as it is a key factor in consumers' choice of products and services.

Traditional branding has relied on intuition and creative sensibility. However, this is no longer enough, and only by adopting a scientific approach based on data and evidence can branding be more effective and reliable.

The importance of a scientific approach to branding was also confirmed at the Borderless Marketing Community (BMC) event hosted by XICA in April 2024. Experts from various fields, including Hoshino, professor at the Faculty of Economics of Keio University and director of the Institute of Economic Research at Keio University, and Takagi, deputy director of the Analysis Department and head of the Research Division at XICA, discussed methods for quantitatively grasping brand equity and conditions for enhancing the effectiveness of branding from both an academic and business perspective.Read the full report hereYou can see from.

In this article, we will take a closer look at the "scientific approach to branding" and provide detailed explanations of the steps and specific examples of its application.

Traditional Branding

Traditional branding often relies on intuition and creative instincts. However, this approach has limitations. For example, certain brand elements and messages may be liked by some consumers, while others may have a negative impression. Executing without evidence based on data or other evidence can be risky and sometimes counterproductive.

What is a scientific approach to branding?

The scientific approach has five important steps: observation, problem identification, hypothesis setting, experimentation and analysis. Following these steps in branding will lead to more reliable results. For example, you can observe to understand market trends, make hypotheses and develop strategies. Then, you can conduct experiments and analyze the data to verify the effectiveness of your strategies.

• Observation:We study market and consumer trends. We closely monitor consumer behavior and preferences, as well as competitor trends, through our own sales data, customer data, market research, consumer surveys, and social media analysis.
• Identifying the issue:Identify current issues based on your observations. Identify the problems your consumers face and the gaps in the market. Identifying issues will help you identify specific areas for improvement and develop hypotheses.
• Hypothesis:Once the problem is clear, formulate a hypothesis. The hypothesis should be specific and measurable, so that it will be easier to conduct experiments and verify the hypothesis after data analysis.
• Experiment:You conduct experiments to test your hypotheses. The purpose of an experiment is to find out if your hypotheses are correct. However, the experiment itself simply collects data, and further analysis is required to understand what the data tells you.
• Analysis:Finally, we conduct detailed analysis of the experimental results to evaluate the validity of the hypothesis. We perform statistical analysis of the collected data to determine whether the hypothesis was correct or not. We draw implications from the data and incorporate them into our strategy.

As a concrete example, when a food manufacturer introduces a new packaging design, they first conduct market research to observe the preferences of the target consumers. Then, they set the hypothesis that "simple and beautiful designs will increase sales," and experimentally sell both the old and new designs in different stores. Finally, they analyze sales data to verify the effectiveness of the new design.

By repeating these steps, you will be able to implement branding that is based on actual observations and data, and that is always adapted to the latest market trends and consumer needs.

Note that a scientific approach does not have to be a set of fixed steps, but represents general principles. It is important to adopt a flexible scientific approach to branding as well.

The benefits of a scientific approach to branding

Taking a scientific approach offers the following benefits:

Data-driven decision making

One of the biggest advantages of a scientific approach is that it enables data-driven decision-making. Unlike traditional methods that rely on intuition and experience, decisions are made based on data and evidence, which can lead to more certain results.

For example, when considering the market launch of a new product, analyzing past sales data and market research results can clarify the target market, appropriate pricing, and effective sales strategies. This helps to avoid unnecessary risks and increase the probability of success. Also, analyzing consumer behavior data can help determine which products are popular and which marketing methods are effective, enabling more efficient marketing activities.

Brand Differentiation

Brand differentiation is a key factor for success in a competitive market and adopting a scientific approach can give you a competitive advantage.

For example, market research can clarify what consumers want and what values ​​they value, so you can use the results of this research to strengthen your brand message and product features, making it more unique to consumers. Also, by analyzing consumer feedback and reviews, you can understand your brand's strengths and weaknesses and review your strategy to always aim to be a brand that meets consumer expectations.

Alignment with consumer needs

By utilizing data, it is possible to accurately understand consumer behavior and preferences, thereby aligning company strategies closer to consumer needs and tastes.

For example, we use consumer surveys and social media analysis to understand what products and services consumers are looking for. We use the results of these surveys to shape our product development and messaging, and make adjustments to make our brand more appealing to consumers. We also track changes in consumer purchasing behavior and respond quickly to keep up with consumer expectations.

Measuring brand impact

By utilizing data, you can concretely evaluate the effectiveness of your branding and clarify which marketing measures are effective and which measures have room for improvement.

For example, you can quantitatively measure brand awareness and consumer engagement to evaluate the effectiveness of your marketing efforts, and analyze sales data to understand the impact of your efforts on sales. This allows you to identify areas that need improvement and make corrections. As a result, your strategy will become more accurate, leading to increased long-term brand value.

Improve efficiency and ROI of marketing initiatives

By adopting a scientific approach, we can improve the efficiency and ROI of our marketing efforts through optimized brand investments.

For example, we use data to measure the effectiveness of marketing initiatives and analyze which media are most effective. This allows us to reduce investment in less effective media and focus on more effective media. As a result, we can prevent resource waste and expect to improve the efficiency and ROI of our marketing initiatives. In addition, by analyzing operational processes with data and finding room for efficiency, we can reduce costs and improve productivity.

Applying a scientific approach to branding

Below are some concrete examples of branding that apply a scientific approach.

Brand positioning

Through market research, consumer observation, and competitive analysis, we are able to clarify the brand's position in the market and foster a strong brand image.

First, we conduct market research to understand its characteristics. Next, we gain a deeper understanding of consumer needs and expectations through consumer surveys and interviews. In a competitive analysis, we analyze the strengths and weaknesses of competitors and clarify our own positioning. Finally, by integrating these data and identifying the unique value of the brand, we are able to differentiate the brand.

Brand Identity

Creating a brand identity involves using data about consumer perceptions, associations, and preferences – specifically, deciding on a brand’s name, logo, tagline, etc., and considering how consumers will perceive these elements.

For example, research the impression consumers have of a brand name. If your brand offers environmentally friendly products, including keywords that directly reflect the brand's values, such as "eco" or "green," in the name will leave a strong impression on consumers and make them more likely to remember your brand.

You can also choose your brand colors based on how consumers feel about certain colors. Red is associated with passion and energy, while blue is associated with trust and calm. Use these insights from color psychology to shape your brand's visual identity.

Brand Experience

To optimize your brand experience, A/B testing can help you identify the most effective approach to your brand touchpoints, including packaging, advertising, and customer experience.

For example, to compare the impact of each package design on purchase intent, we conduct an A/B test. Group A is given a package with design A, and Group B is given a package with design B, and we observe the purchasing behavior of each. This allows us to identify which design is more attractive to consumers and increases their purchase intent.

In advertising, too, by testing different messages and visuals and finding the most effective combination, you can streamline your advertising investment and maximize its effectiveness.

In terms of customer experience, repeated testing to optimize in-store layouts and online shopping processes can provide consumers with a smooth purchasing environment and lead to increased satisfaction.

Brand Equity Measurement

Brand equity is the visualization of the unique value of a brand in the minds of consumers as an asset of a company. In other words, measuring brand equity is crucial to understanding a brand’s positioning and value in the market. The Aaker and Keller model is known as a practical framework to achieve this objective.

Aaker Model

In Aaker's model, four elements contribute to brand equity:

• Brand Awareness:It is an indicator of how well consumers recognize a brand - how quickly they can recognise or recall the brand name when they hear it.
• Perceived Quality:It is an index of how consumers evaluate the quality of a product or service. It is an evaluation based on consumers' expectations and experiences, such as the reliability, durability, and functionality of the product.
• Brand Associations:It refers to the positive or negative images or feelings associated with a brand, including the perception consumers have of the brand and the memories associated with it.
• Brand Loyalty:It indicates the tendency of consumers to choose a brand over competing products, such as their willingness to make repeated purchases and their loyalty and attachment to the brand.

Keller Model

According to Keller's model, six elements contribute to brand equity:

• Brand Salience:It is an indicator of how strong a brand is in the minds of consumers, and how easily they can recall or recognize the brand when making a purchase.
• Brand Performance:It is an index of how well a product or service meets consumer needs. It is an evaluation based on consumer expectations and experience, such as the reliability, durability, and functionality of the product. It is similar to the "perceived quality" advocated by Aaker, but "perceived quality" focuses more on the "evaluation and recognition" of quality, which does not necessarily match the actual performance of the brand.
• Brand Imagery:It is the associations that consumers have with a brand. It is based on consumer values ​​and experiences and focuses on abstract and symbolic elements rather than functional aspects.
• Brand Judgments:It is the evaluation or opinion that a consumer has of a brand. It is the consumer's personal view of the brand's quality, reliability, value, etc.
• Brand Feelings:It is the emotional response a consumer has to a brand. It includes the emotional experiences they have from using the brand, such as pleasure, excitement, or security.
• Brand Resonance:It is a deep psychological connection between a consumer and a brand that reflects strong brand loyalty and active engagement.

When applying these models in practice, market research and data analysis are essential. Through surveys, focus groups, social media analysis, etc., these factors can be quantified and brand equity can be evaluated. It is also important to compare your brand with competitors and understand your relative position.

Measuring Brand Equity with XICA's MMM (Marketing Mix Modeling)

By using XICA's MMM, you can measure the contribution of each marketing initiative to results and evaluate long-term effects = brand equity.

When using MMM to measure contribution, there is always a baseline (unknown portion) that cannot be explained by marketing measures or external factors, but XICA thought that this baseline might include "purchasing factors influenced by the brand over a long period of time." In other words, the idea is that brand equity gradually accumulates in the baseline through the implementation of continuous marketing measures. In order to uncover this, it is necessary to measure "the extent to which marketing measures from several years ago have influenced current results," and by doing so, it was thought that the effects of brand equity could be visualized.

You can find more detailed information about XICA's MMM service "MAGELLAN," which enables the visualization of MMM and brand equity, by visiting this page.

Identifying brand success factors through XICA's CMM (Consumer Mix Modeling)

CMM is a unique analysis method developed by XICA that uses consumer awareness data to clarify the purchasing mechanism between your company and your competitors, maximizing the probability that your brand will be selected. In addition to competitive factors, it also analyzes the impact that the 4Ps of marketing (products/services, channels, price, promotions), CX (customer experience), and accumulated brand assets have on consumer brand selection (i.e., purchasing behavior). This not only clarifies to whom and what brand elements and messages should be delivered, but also allows you to calculate the impact of how much of a switch from your competitors you can make.

For more details about CMM and XICA's CMM service "COMPASS," you can download information here.

Key challenges in the scientific approach

Although a scientific approach to branding offers many benefits, it also comes with challenges:

Ensuring data quality and quantity

A scientific approach requires a large amount of reliable data. However, collecting and managing the right data is not easy, so it is a good idea to consider introducing a system that enables this as needed. In addition, since it is particularly difficult to continuously collect high-quality data on consumer behavior and sentiment, it is effective to utilize external data sources and collect data through engagement with consumers.

Availability of analytical skills

Securing talent with advanced analytical skills, such as data scientists and analysts, is a challenge. These professionals are in high demand and can be difficult to recruit, so it is important to implement in-house talent development programs and build collaborative relationships with external experts.

Balancing creativity and data

An overemphasis on scientific approaches can lead to the neglect of the creative and intuitive elements of branding. It is important to balance creativity and data, so it is best to have creative and data analytics teams work closely together to adopt an integrated approach that leverages the strengths of both.

Proof of return on investment

This is not limited to branding, but adopting a scientific approach requires initial investment, introduction of tools, construction of systems, hiring and training of specialized personnel, etc. It is often difficult to show concrete results for these investments in a short period of time, so an approach that starts with gradual introduction and small-scale experiments and accumulates success stories is required. It is also important to set evaluation indicators from a long-term perspective.

Changing organizational culture

In order to spread data-driven decision-making throughout an organization, it is necessary to shift away from traditional decision-making processes based on intuition and experience, but this change in organizational culture takes time and effort. Therefore, it is important to first involve management and work to increase data literacy throughout the organization. Then, gradually share success stories and introduce a system to evaluate data utilization.

By addressing these challenges appropriately, you can effectively adopt a scientific approach to branding and maximize its benefits. The key is to take a gradual approach and continually improve and learn.

In businessImplementing a scientific approach

It is effective to adopt a scientific approach across departmental boundaries, not just in branding. However, there are some points to be careful of, so we will explain them here.

Interdepartmental collaboration and cooperation

A successful scientific approach requires collaboration between marketing, analytics, product development, and other departments, which share information and work together in a unified manner to maximize the overall results.

For example, the marketing team can work with the analytics team to analyze the survey data they obtain and share it with the product development team, enabling them to develop products and services that are optimally tailored to consumer needs.

Data collection and analysis skills

Investing in data collection and analysis skills is also important: collecting quality data and adopting the tools and skills to properly analyze it will lead to more accurate decision-making.

For example, by collecting consumer panel data from a research company and analyzing it with the most suitable in-house or external analysis team, you can accurately understand the needs and behavioral patterns of your target audience. In addition, by using advanced analysis methods and tools, you can derive useful suggestions from complex data and reflect them in your strategy.

A culture of experimentation and learning

It's also important to foster a culture of experimentation and continuous learning - encouraging experimentation to test new ideas and strategies, and learning from the results, will enable you to continually improve your results.

For example, testing different marketing messages and creatives and comparing their effectiveness can help you find the most effective approach. Also, having a culture of taking on challenges without the fear of failure can foster innovation and give you a competitive edge.

In conclusion

Brands are the primary deciding factor when consumers choose products and services, and branding is a key element for a company's success. And that success depends heavily on a scientific approach using data. By adopting a scientific approach, you can establish brand differentiation and competitive advantage even in today's competitive market, and maximize the power of your brand.

XICA has been providing services in the field of data science in marketing for over 10 years, and has a track record of supporting over 250 companies, mainly domestic enterprise companies. Our analysts and consultants with extensive and deep expertise in a wide range of industries use data science to help clients make better decisions. XICA will continue to pursue the strengthening and evolution of branding through data and science.

If you are interested in using data in branding, implementing a scientific approach, or learning about MMM and CMM, please feel free to contact us.