376 The Marketing Book
they would be able to recall the brand’s
attributes rapidly, since the brand name would
enable fast accessing of a highly informative
chunk in the memory.
The task facing the marketer is to facilitate
the way consumers process information about
brands, such that ever larger chunks can be
built in the memory which, when fully formed,
can then be rapidly accessed through associa-
tions from brand names. Frequent exposure to
advertisements containing a few claims about
the brand should help the chunking process.
What is important, however, is to reinforce
attributes with the brand name rather than
continually repeating the brand name without,
at the same time, associating the appropriate
attributes with it.
Conceiving brands as shorthand devices
forces managers to think about the way they
emphasize quality of information rather than
quantity of information in any brand commu-
nication. As our minds cannot cope with more
than seven bits of information at once, one test
to apply to any brand communication is
whether there are more than seven bits of
information.
Brand as risk reducer
When people choose between brands they do
not always base their decision on choosing the
brand which maximizes their utility, as
economic theory suggests. Rather, there are
situations where consumers perceive risk, for
example the perceived risk of friends dis-
approving of a particular style of clothing. It is
not uncommon to find consumers choosing
between competing brands according to the
extent to which they perceive least risk. Bauer
(1960) was one of the early writers to suggest
this notion and a stream of research has since
evolved showing the importance of perceived
risk, i.e. the uncertainty consumers perceive
that buying a particular brand will result in a
favourable outcome.
Customers perceive risk along several
dimensions such as:
performance risk (will the brand meet the
functional specifications?);
financial risk (will the customer get good value
for money from the brand?);
time risk (will the customer have to spend
more time evaluating unknown brands and if
the brand proves inappropriate, how much
time will have been wasted?);
social risk (what associations will the
customer’s peer group link with them as a
result of their brand choice and will this
enhance or weaken their views about the
customer?);
psychological risk (does the customer feel right
with the brand in so far as it matches their
self-image?).Brands are more likely to succeed when time is
taken to understand what dimensions of per-
ceived risk customers are most concerned
about. From this analysis, a way needs to be
found of presenting the brand to minimize
customers’ perceptions of risk along the dimen-
sions that particularly concern them.
Building trust through brands is a strategy
that many firms have followed. Dell’s brand
investment makes it difficult for new entrants
to match the image they have for rapidly and
efficiently fulfilling telephone and Internet
orders.
To capitalize on the brand as a risk reducer,
marketers should segment customers by sim-
ilar risk perceptions. If any one of the segments
has sufficient customers and if the firm is
profitably capable of developing the brand as a
risk reducer to meet the segment’s needs, this
strategy should be considered.Brand as positioning
Another perspective managers adopt when
interpreting brands is in terms of positioning, i.e.
ensuring customers instantly associate a brand
with a particular functional benefit, or a very low
number of functional benefits. For example,
BMW as performance and Volvo as safety. In the
information age people are bombarded with