Entrepreneurial Branding and the Virtue of Foolishness
By: Yanto Chandra, Ph.D.
How do expert entrepreneurs1 make decisions concerning brand choice amid inexistent markets? Unlike marketers (who work for firms whose market is already created) , entrepreneurs face more challenging decisions as they have to deal with two challenges: creating new ventures and new markets that do not yet exist. The question is, in the face of inexistent markets should decision makers rely on technologies of rationality (using formal models of rational choice) a la the MBA style or technology of foolishness (using strategies or heuristics to deal with goal ambiguity) in making their branding decisions? While branding is one of the core issues for marketers and marketing scientists, it has received little attention in the entrepreneurship domain. This is the challenge at the interface of entrepreneurship and marketing. It’s a question of ‘entrepreneurial branding’.
A century ago Coca Cola was a cough syrup and looked green. Imagine that someone who tried to create a market for it was thinking of the branding decisions. Today’s brand managers at Coca Cola will find the task of planning to create and launch “satellite” markets like Coke Diet or Zero (surrounding the “core” market called Coke) much easier, simpler and has a lower probability of failure compared to creating an entirely cola market from ground up – a big task facing the founder of Coca Cola long ago. The founder faced true uncertainty, a situation that is unknown and unknowable, while the marketers face a situation called risk, unknown but knowable like calculating the probability of a ball from a jar in which the person knows what’s inside it via experience and trial and error or Bayesian updating. For nearly a century of entrepreneurial and marketing efforts, Coca Cola has successfully legitimized the taste of cola as a new dominant design of soft-fizzy drink and Coke as a brand that stands for it. Coca Cola has defeated the Liability of Newness associated with new venture, product and brand. A new brand like Coca Cola in its early days was being punished twice; first for being small and second for being unknown or so-called Double Jeopardy. What a contrast with Coca Cola that is currently ranked as one of the world’s most legitimate brand.