IN DEFENSE OF BRANDING
Does Branding in the Defense Industry Matter?
The U.S. economy, by any measure, is by far the largest economy in the world, larger than the combined economies of China, Japan, Germany, the UK, and France. In fact, any of the top 10 U.S. industries would, by themselves, rank among the largest 20 GDPs in the world. The defense and aerospace industry is a substantial segment of this economy. It is part of the 6th largest industry sector in the U.S. (manufacturing) which has a 6.5% U.S. GDP share ahead of retailing which is 5.8% GDP¹. Yet how many brands can you name in the defense and aerospace industry? Does it matter?
What does Northrop Grumman, McDonald’s, Raytheon, and Starbucks have in common? They are all companies on the Fortune 500 list, lead their respective industry sectors, and each has revenue in excess of $20B. They are all successful businesses.
Two of these brands are universally recognized and have strong personality perceptions associated with who they are. The other two are less familiar to the general public and have much lower awareness around their brand character and personality. Yet they are prominent brands in one of the largest U.S. industry sectors. The difference in brand recognition might easily be explained in that Northrop Grumman and Raytheon are B2B/B2G businesses, don’t saturate the market with advertising and promotion, or have presence on every street corner. Starbucks and McDonalds, of course, spends millions of dollars on advertising and have high brand presence through retail and product B2C brand exposure. Does that make branding less important for the players in the defense industry?
Branding is important in any industry whether it is B2C, B2B, or B2G and defense brands are no exception. They have more in common than you might think.
Why brand matters from a marketing perspective:
Defense brands need to establish awareness and recognition just like retail brands. They need to promote their key points of distinction — over and beyond what they manufacture or how much they cost. Defense brands need to reinforce what they stand for, especially in an industry where ethics, transparency, reliability, and trust is so important. Just because they are selling to another company or the government, doesn’t mean that they are not, in fact, selling to a consumer. Companies don’t buy products or services, people do. While these people might be a purchasing manager, procurement officer, or senior executive, they are buying iPhones, watching Netflix, drinking Starbucks or shopping at Target like everyone else.
Everyone is a consumer and all consumers are influenced by branding.
While making a decision in a B2B transaction is heavily dependent on functional and economic considerations, the emotional drivers inherent in any purchasing decision cannot be overlooked. Several research studies have shown that emotion is an intrinsic ingredient in almost all decisions. Antonio Damasio, professor of neuroscience at the University of Southern California, in his book Descartes Error² makes the case that choice is not just about rational analysis but in many cases driven by emotional feelings. Emotion and emotional connection is what separates great brands from ordinary brands.
Studies show that positive emotions toward a brand have far greater influence on consumer loyalty than trust and other judgements, which are based on brand attributes”³
On the surface the idea that emotion plays any part in a defense related transaction may seem counter intuitive. It is none the less an indispensable component of branding that applies to all kinds of brands. B2B companies are recognizing this and are devoting more attention and resources towards brand building initiatives as a way to establish competitive differentiation, be top of mind with buyers, and reinforce their stock price. In a B2B market study conducted by B2B International, it found that 60% of the companies it surveyed revealed that:
Branding is the top strategy for growth over product development, market segmentation, or even customer satisfaction.”⁴
Why brand matters from an internal perspective
Defense brands need to ensure, like everyone else, that their employees understand what their brand stands for, believe in, and be passionate about. That understanding and clarity can help inspire and motivate everyone in the organization to live the brand in all that they do. The benefit to the company is that employees who are motivated by their brand has proven to lead to higher levels of engagement which have translated into greater productivity. A Gallup study on employment engagement found:
High employment engagement outperformed lower engagement in productivity by 21% and profitability by 22% with significantly lower turnover, absenteeism, fewer safety incidents and quality defects.”⁵
Productivity, of course, is a key competitive advantage in the defense industry. The challenge is defining the brand so that it stimulates engagement by being distinctive and meaningful to the employees as it is to the customers it is trying to reach. Understanding and believing in the corporate mission is a beginning.
The following mission statements belong to two of our 4 brand giants (Northrop Grumman, Raytheon, McDonalds and Starbucks). Can you match which statement goes with which brand?
To build and leverage a diverse and inclusive workforce and workplace by building leadership capability and organizational capacity?”
To inspire and nurture the human spirit — one person, one cup, and one neighborhood at a time?”
One of these is clearly the mission statement for Starbucks and the other not so clear mission is for Northrop Grumman. Which is more inspiring? More meaningful? More distinctive? It is not that one is right and one is wrong. It is a matter of taking full advantage of the opportunity to create a brand platform that is truly ownable. A brand that stands out in the market and be what the organization believes in is a brand that everyone can be proud of, loyal to, and an advocate for.
Evidence of a successful brand is the loyalty of its employees as well as its customers.
In an industry that is mission driven, having clarity around a brand’s mission provides something that everyone can rally behind. It is a critical part of internal brand building so that those who are the strongest advocates are clear about what the brand they work for stands for, what makes it unique and meaningful to them, and the impact they seek to make over and beyond the products they sell or revenue generated.
Creating a brand for a defense business, or any predominantly B2B brand, requires the same considerations of the more recognized B2C brands. It is important to know and understand audience segments, competitive distinction, portfolio linkage, market trends, and many other drivers that factor into a well-defined brand. Vision and mission are essential but defining the brand character and personality is what ultimately creates the internal and external connection that will lead to a long and successful BrandLife™.