Year: 2005

Brand System – The Identity

As mentioned before, brand identity provides the information consumers use to make determinations about whether to purchase your products or services and what they should expect from the experience. It’s the calculated way you characterize, package, and position your offering.

AllAboutBranding.com defines brand identity as a unique set of associations that the brand strategist aspires to create or maintain. These associations represent what the brand should stand for and imply a potential promise to customers. It is important to note that a brand identity refers to the strategic goal for a brand; while brand image is what currently resides in the minds of consumers.

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Brand System – The Offer

The first step, in building a brand as a system, is at once the most important and sometimes the most difficult. The business has a product or service to offer, in many cases more than one of each. Each product or service must be carefully studied to determine what is special about it. Once the firm has done this, it must deal with the underlying question of why people should buy from this business rather than some other. What does this firm do that is singular or unique, that sets it apart from all other firms? What constellation of skills and resources does it have that gives it the potential to do other things as well?

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Beyond Brands – Lovemarks

Lovemark is a new term coined by advertising agency Saatchi and Saatchi, defined as the next step beyond branding. A key idea is that lovemarks inspire “Loyalty Beyond Reason“.

What differentiates the brands that struggle from those that perform well is that the latter are lovemarks, explained Micky Denehy, marketing director for Europe, the Middle East & North Africa, of Saatchi & Saatchi London. According to him, lovemarks transcend brands as they deliver your expectations of great performance. Unlike simple brands, they manage to create an intimate, emotional connection with the consumer.

“Take a brand away and people will find a replacement. Take a lovemark away and people will protest its absence,” he said.

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Brand Extension

According to AllAboutBranding.com, brand extension is

“the application of a brand beyond its initial range of products, or outside of its category. This becomes possible when the brand image and attributes have contributed to a perception with the consumer/user where the brand and not the product is the decision driver”.

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Brands Value Growth – Top 10

The Next Generation of Growth Brands is based on compound annual growth rate in brand value between 2001 and 2005. The report describes the growth brands as having “outperformed their peers in their respective markets during the past four years and are likely to continue to do so into the future”.

Apple, creator of the iPod, is the fastest growing brand in the world, with internet brands Google, Amazon, Yahoo! and eBay following close behind, pushing notoriously powerful brands like Coca-Cola off the list.

According to marketing consultants Vivaldi Partners and Forbes, Apple has managed to increase its brand value by 38% in the last four years — largely thanks to the ubiquity of its portable music device iPod.

Power brands like Coca-Cola and McDonald’s, which typically spend the most on advertising, did not even make it into the top 20.

Here is the top 10:

Brand – Value Increase
1. Apple – 38%
2. Blackberry – 36%
3. Google – 36%
4. Amazon – 35%
5. Yahoo! – 33%
6. eBay – 31%
7. Red Bull – 31%
8. Starbucks – 24%
9. Pixar – 23%
10. Coach – 22%

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Brand management in lean times

Anyone can do marketing with a blank check. Lean times, or even the threat of lean times, force us to be more careful in our decision making. Which brands should we push? Where should we promote our brand? How can we avoid duplication? Who is our target audience?

Cost-cutting measures include co-branded advertising, consolidating outside vendors, and cutting down on printing costs by creating more electronic promotional materials. More than that, here are 4 key areas, proposed by Lippincott & Margulies, to review in order to increase brand and branding efficiency in slowing economy:

1. Tighten the communications reins

During prosperous times, when companies are constantly unveiling new products and services, marketing materials can often grow out of control. An objective communications audit is the first step to ensuring that all marketing efforts are consistent and not wasteful.

A review of all marketing support materials can help companies to identify what materials are being produced, who’s producing them, the cost for each, and then the total marketing communications cost. This is often a surprisingly large pot of cash. It also results in identifying the audience for each communications vehicle. Completing this kind of company audit can help companies identify where their efforts are repetitive, and possibly even unnecessary.

2. Brand head count

Through a brand portfolio analysis, companies can take a serious look at their products and services to determine their target audience. After evaluating each brand by grouping it in a designated category and assigning it to a key audience, a company can then step back and decide if support for some of those brands can be consolidated, cut back or eliminated.

3. Assess advertising spending

Heavy advertising spending is not a prerequisite for building a strong brand. Understanding who your targets are, and then prioritizing those audiences, can help in ascertaining where advertising is a necessity and where it’s a luxury. By narrowing the focus and sharpening the message content, companies can use creative, less expensive alternatives to communicate to who’s critical and not to who isn’t.

4. Centralize brand management

Develop decision-making tools based on a set of criteria to manage naming, co-branding and marketing expenditure. Developing a permanent set of criteria will also ensure that future branding issues are decided upon consistently and efficiently.

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Brand valuation – 7 applications

Since seven seems to be the magic number which relates with brand value and brand valuation let’s check seven applications of brand valuation:

External investor relations
Mergers and acquisitions were the original driving force for brand valuation. Now many successful companies use brand valuation as an ongoing business performance indicator: to help ensure that brand strength is reflected in share value.

Internal marketing management
Brand valuation is increasingly being used as a management tool in leading organizations. For example: brand valuation figures can be used to evaluate new product and market development opportunities, to set business objectives or allocate budgets.

Internal royalty rates
Across a large organization there may be many affiliates, subsidiaries or divisions that make use of any particular brand. As the profit potential of brands becomes more clearly understood more companies are charging royalties, across their business operations, for the use of these brand assets.

Licensing and franchising
Where companies allow outside organizations to use their brand, on a licensing or franchising basis, a brand valuation can lay the foundation for appropriate charges.

Tax planning
As the management of brands as financial assets becomes more sophisticated, so tax authorities around the world have started to take an interest in how these assets are managed. The result is that more and more international organizations are planning the most cost-effective domicile for their brand portfolios and are organizing their tax affairs with their brands in mind.

Securitized borrowing
Even in the conservative world of banking, the asset value of brands has been recognized. As a result brands have been used to secure loans, especially in the US, where companies such as Disney have borrowed significant amounts of money against their brand name.

Litigation support
Brand valuations have been used to support litigation against the illegal use of a brand name (as a basis for calculating damages, for example) and also in cases of receivership, to prevent the assets of the business being undervalued.

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Brand-Customer Relationship

Brand is often limited in its definition to awareness of a product or service. A company markets its brand – creates the name, broadcasts it to target customer segments, and applies it to its corporate identity or a set of products and services. The brand makes the company, product, or service recognizable.

This limited view of brand is destined to fail in today’s business environment. Marketing, which orchestrates only a small part of the brand-customer relationship, puts the face on the brand, making a set of promises.

Creating a coherent brand experience requires aligning every touchpoint of your organization with your brand. The more perfect that alignment, the more perfect the customer brand experience. You can’t escape your brand. Either you make the customer experience, or it gets made without you. Brands are essentially the collective perceptions of an organization’s key constituents (customers, suppliers, investors, employees, etc.) and are defined more by deeds than by words. Brand is how your customer experiences what you do.

Visionary companies recognize that responsibility for brand management belongs with the organization as a whole.

It’s your choice: deliver an effective brand experience or don’t. If you’re active in shaping the customer experience you can develop a rich and long-lasting relationship, firmly based in your brand. Where you fail to create a strong relationship with customers, a competitor will. Here are five places to start:

1. Clearly articulate your brand identity. If you can’t clearly articulate your brand identity, you’ll be unable to control how customers interpret it. A clear brand identity sets expectations across your organization for your products and services.

2. Establish a customer value proposition and use it to guide each department. The various departments responsible for delivering against your customer value proposition need to understand what the customer value proposition means to them.

3. Define the optimal customer experience. Identify the contact points where customers interact with your company.To create a holistic brand experience, you need to create a consistent and compelling experience at each of these touchpoints.Take an outside-in perspective when aligning each department with your customer value proposition and brand identity.

4. Cultivate relationships with customers. Treat these relationships carefully. Listen attentively to what you’re being told, learn from it, and respond.

5. Strengthen your brand over time. Based on what you learn from your customers, recalibrate your brand. Always be aware of how your brand can strengthen your brand-customer relationship.

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