About the authors: DAVID AAKER is Vice-Chairman of Prophet Brand Strategy, a strategic professional services firm, and a Professor Emeritus at the Haas School of Business, University of California, Berkeley. He is widely acknowledged as the preeminent authority on brand equity and brand strategy. Dr. Aaker has published more than 90 articles and 11 books including Managing Brand Equity, Developing Business Strategies and Building Strong Brands. He graduated with a B.S. from MIT and a MS Ph.D. from Stanford University. For more information on David Aaker, see http://www.prophet.com or http://www.davidaaker.com. ERICH JOACHIMSTHALER is CEO of The Brand Leadership Company, a strategy consulting and management education firm, and Visiting Professor of Business Administration at the Darden School, University of Virginia. He is the author of more than 40 articles and case studies and is a sought-after speaker and consultant. Dr. Joachimsthaler completed his formal education with a Post Doctorate Fellowship at Harvard Business School. For more information on Erich Joachimsthaler, see http://www.brandleadershipcompany.com MAIN IDEA ABOUT THIS BOOK Creating and progressively building strong brands is an important commercial activity for most business enterprises since:
- • Brands are important and substantial financial assets that add significantly to the market value of the overall commercial entity.
- • Brands that are well positioned can deliver sustainable competitive advantages – allowing firms to differentiate themselves.
- • Brands enhance profitability – they allow companies to sell products and services at prices higher than the prevailing market rate.
The New Paradigm – Achieve brand leadership
The traditional brand management system is being superceded by the brand leadership paradigm because of the need to deal with new market complexities – competitive pressures, the evolution of channels, global competition, multiple brands, aggressive brand extensions and the arrival of complex subbrands. Supporting Ideas The new brand leadership paradigm is based on a number of assumptions:- The brand building strategy should be aligned with the business strategy of the overall business enterprise.
- Brand leaders should be strategic and visionary rather than reactionary and focused on tactics.
- Brands are long-term intangible assets of the business, and programs which build the brand creates assets that underpin the future success of the business enterprise.
- Brands enable a business to avoid the need to compete on price and instead sustain premium pricing levels.
- The actual value of the brand is difficult to quantify precisely but it can be estimated as a percentage of the earnings stream generated by each major product.
- Virgin Atlantic Airways – founded and led by Richard Branson with the objective of “providing all classes of traveler with the highest quality of travel at the lowest cost”.
- L.L. Bean – with its legendary “Guarantee of 100% satisfaction”
- Marriott – which is in the process of extending its brand by creating Marriott Residence Inns, Courtyard by Marriott and Fairfield Inn by Marriott.
- Adidas – with a new focus on participation in sport rather than attempting to equip just the elite sports people.
- Nike – with the successful introduction of its flagship stores, NikeTown, and Air Jordans.
- Swatch – which, since its 1983 launch, has built its brand around the concept of fun, youthful and provocative watches.
- MasterCard – which has become a brand leader by sponsoring the soccer World Cup.
- • Fixed assets – plant and equipment.
- • Intangibles – patents, systems, people or processes.
- • The brand.
- 1. Brand Awareness
- 2. Percieved Equity
- 3. Brand Associates
- 4. Brand Loyalty
- Brand awareness – is important because customers like the familiar. Awareness effects perceptions and consumer tastes. Any brand that achieves high levels of awareness is more likely to be chosen over its competitors.
- Perceived quality – is a special type of association in the mind of the consumer. Brands that are perceived as being high quality are more profitable because they can demand and receive premium pricing.
- Brand associations – are what connects the customer and the brand. This will be a dynamic mix of images, product attributes, organizational attributes, symbols and the brand personality. A large proportion of brand management activities are involved with forming and shaping these associations.
- Brand loyalty – lies at the heart of the value of a brand. The greater the loyalty, the higher the brand is valued, but even those brands which have a small customer base can have high brand equity if those customers are sufficiently loyal and passionate.
Challenge #1
Positioning: To originate a strategy which provides identity, differentiation and empathy. Every strong brand actually has two key elements: 1. An identity – a vision of how the brand should be perceived by its target audience. 2. Positioning in the marketplace – a communication strategy to prioritize and focus the brand identity. Businesses that succeed in building strong brands excel at creating a rich, clear and unambiguous brand identity and supplement that with a positioning program which clarifies and elaborates on that brand identity. The brand identity states what the organization wants the brand to stand for – the specific set of associations the brand strategist aspires to create or maintain. Since the brand identity drives and correlates all the brand-building activities carried out, a strong brand identity will always have depth and richness. To develop strong brand identities: 1. Avoid viewing the brand too narrowly. Instead, have a broad and rich brand identity which is aspirational. A brand identity will always be more complex than just a simple tagline or three-word phase. 2. As far as possible, always link the brand to one specific functional benefit which is compelling and expressive. Everything else should then be linked to that benefit by association. Ideally, if you have a strong visual metaphor which can be used, it will become easier to communicate that attribute. 3. Ignore the temptation to use too many dimensions in defining a brand. Instead, focus on just one or two key dimensions that fit and help the building of the brand identity. Ignore everything else. 4. Take cues from the insights provided by loyal customers and build on the relationship they already have with the brand. Supplement those customer insights with analysis of competitors and your own perspective, but discount what customers are telling you at your own peril. 5. Understand how competitors have positioned their brands and create a differentiated identity which takes into account whatever those competitors are doing. Understand their approach and do something different. 6. Wherever possible, have a single brand identity which applies across the entire range of products and in every geographic marketplace. Often, this involves having a single brand identity but emphasizing different elements in different markets. 7. Let the brand identity drive the execution, not the other way around. Get buy-in from throughout your organization so there is no disconnect between brand identity and implementation. 8. Project the brand identity. Don’t let it become ambiguous. Be definitive in stating precisely what the brand stands for. Do this well and the brand identity will influence every decision the organization makes in the future. Once a brand identity has been decided upon, it needs to be clarified and elaborated if its to be used to maximum effect. Brand identities can be elaborated four ways:- By identifying role models. Role models capture the emotion of a brand and say something about its vision. Internal role models can personalize the brand and build a heritage within the organization of actions which make up the company culture. Meanwhile, external brands can be inspirational – identifying world class performers the company would like to have as its peers or role models.
- Through the use of visual metaphors. Visual metaphors which are aligned with the brand identity are powerful emotive devices. They can add depth and color to the way the brand is viewed. Strong visual metaphors are memorable and provide strategic direction for the brand identity.
- By setting priorities amongst the various dimensions. Many brands are complex with a number of attributes, dimensions, associations and more. A good brand identity will set priorities, deciding which single attribute is most important in representing what the brand stands for. The brand identity will also help determine which legacy attributes should be maintained and which should be updated.
- With an audit of identity-support programs. Viable brand identities have substance. That builds over time through the use of multiple strategic imperatives – investments in assets or programs that enable the business to deliver on what’s promised. Strategic imperatives provide substance and execution power to the brand. These are supplemented by proof points – the programs, initiatives and assets already in place. Proof points provide the substance of what is presently in place while strategic imperatives focus on what will be put in place in the future. Periodically, both need to be audited and monitored so effective alignment can be achieved.
- Presentations by a brand spokesperson.
- Workshops.
- Videos.
- Books or written manuals.
- Home study materials or internal training courses.
Challenge #2: Architecture
To build a comprehensive architecture providing strategic direction. The brand architecture is the relationship which exists between brands and subbrands within the firm’s portfolio. An effective brand architecture will: 1. Link all the brands together productively to create synergies and clarity in customer offerings. 2. Avoid confusion by allowing each brand to be positioned carefully and deliberately. Businesses that succeed in developing a good brand architecture are well placed to grow the value of each brand within the portfolio. Supporting Ideas From a practical perspective, the brand architecture is an organizing structure with five elements: 1. The brand portfolio – all the brands and subbrands owned by the business, as well as any co-brands owned in partnership with other groups. 2. The role of each brand in the portfolio – whether they are strategic brands (generating meaningful revenue streams), linchpin brands (critical to the future of the firm), silver bullet brands (which enhance the image of other brands) or cash cow brands (established and revenue generating). Note that these roles are not mutually exclusive – a brand may simultaneously be considered both a linchpin and a silver bullet. 3. Product-market context roles – co-brands (where different firms collaborate), endorsers (where one brand augments another), benefit brands (where one feature, component or service enhances the perceived value of the branded offering) or drivers (where a brand drives the purchase decision). These context roles specify how all of the brands within the portfolio work in harmony to generate synergy or add value in other ways. 4. The portfolio structure – the relationship of the brands to each other and the logic of that structure. The brand structure may be represented graphically as a tree. For example: 5. The portfolio graphics – the visual representations used by each brand. This will include the logo, packaging, symbols, product design, the layout of print advertisements, taglines, the look and feel of how the brand is presented. All of these graphic elements send signals about the brand. Brand architectures are important because:- Effective and powerful brands can be created. Strong brands resonate with customers and have clear-cut differentiation. They appeal to customers on many levels. A good brand architecture can identify when new brands or subbrands can be added to the existing components to create a stronger architecture.
- The efficient allocation of resources can be made. The brand architecture makes clear which brands have the greatest potential to generate revenues in the future. Thus, instead of funding subbrands solely on the basis of their current revenue streams, the brand architecture ensures the high producers of the future will attract adequate resources to grow into their roles.
- Synergy can be created. A good brand architecture creates synergy by enhancing the visibility of brands, creating and reinforcing associations and by creating cost efficiencies. It will also avoid potential conflicts that may potentially destroy value in the future.
- Product offerings can be clarified and simplified. Strong brands not only resonate with customers but also have a clear identity with employees and partners. A good brand architecture will clarify how the various elements work together collaboratively.
- The brand equity can be leveraged. To leverage a brand means to increase its impact and expand its influence. The brand architecture shows where brands can be extended, whether in the vertical or horizontal directions. The architecture also provides structure and discipline for those brand extension initiatives.
- A platform for future growth can be created. A thorough brand architecture supports strategic advances into new markets. Periodic realignment of the portfolio can create room for the architecture to grow and expand.
Challenge #3: Programs
To develop effective programs and a system to track the results. Brands are formed and built through memorable programs which bring the brand to life. This is more than just advertising, possibly including elements such as: 1. Sponsorships. 2. The Web and other interactive media. 3. Public relations and other initiatives. Smart companies execute these brand-building programs exceptionally well and measure the results achieved quantitatively so the programs can be evaluated and enhanced over time. Supporting Ideas Building the brand requires more than just advertising, even for world-class brands like Nike and Adidas who both went through tough times in the 1980s before coming back stronger than ever in the 1990s. To build their brands, Nike and Adidas:- Used innovation and new ideas – for example, Nike build flagship stores known as “NikeTowns” while Adidas introduced a breakthrough basketball competition called “the Adidas Streetball Challenge”.
- Ran high-impact advertising – Nike with ads teemed around the “Just do it” slogan and Adidas with “Earn it” themed ads.
- Had substance as shown by new products – Nike with Air Jordans and Adidas with Feet You Can Wear.
- Developed strong brand personalities – with emotion, self-expression and association to famous sports personalities. Nike developed an in-your-face, aggressive brand personality whereas Adidas added personality to its traditional emphasis on performance.
- Went through initial brand refocusing efforts but then enjoyed stable brand identities.
- Harnessed experienced management teams – who were closely involved in developing and running the brand strategy rather than delegating these key tasks to outside partners or consultants.
- Worked hard at connecting with customers on an emotional level – by finding ways to interact directly with the end customer in situations where they used the products.
- Used subbrands intelligently – to build the value of the main brand. For example, both Adidas and Nike covered the high end with Adidas Equipment and Nike Alpha. Nike enjoyed a silver bullet brand in Air Jordan. Many branded technologies were introduced, including the Adidas Feet You Wear and Nike Air.
- Motivating employees and other brand partners to strengthen their identification with the brand.
- Providing an experience for customers which will encourage them to be more receptive to other marketing initiatives.
- Showcasing new products or technology in a unique setting, which often generates additional publicity.
- Creating awareness of the brand.
- Forming associations in the mind of the customer between the brand and the qualities of the sponsored event or well known participants.
- Becoming part of the emotional bond between an event and its most passionate followers.
- Provide great experiences for key customers.
- Introduce exciting new products with a blaze of publicity.
- Mobilize the organization to brand building.
- Interject the brand into the customer relationship.
- It is interactive and involving.
- It can offer rich, current information.
- The Web experience can be seamlessly personalized.
Challenge #4 : Organization
To create a viable brand building organization. A good brand building organization will operate globally within a culture and organizational structure which nurtures and build the brand. That generally requires four elements: 1. A brand champion who will oversee the long-term progress of the brand – avoiding ad-hoc decisions. 2. An international communication system – allowing sharing of insights, ideas and best practices. 3. A common global brand planning process. 4. The ability to execute effective brand-building programs. Supporting Ideas Global brands are easy to describe but exceptionally difficult to build and maintain. In essence, a global brand has a high degree of similarity across countries in terms of brand identity, positioning, advertising strategy, personality, look and feel. The key to successfully building a global brand is to find a position that works and resonates equally well in all markets. Building a leading global brand is not simply a matter of deciding to go international, even if you already own a successful premium brand that is well established domestically. Without effective, proactive management and the resources needed, a global brand strategy is unlikely to succeed. In fact, any company which aspires to global brand leadership must create an organization with four key elements: 1. The Brand Champion. Unless there is a global brand champion or manager, local bias will sink the global brand building effort. Most local managers will believe their market is unique, and what works elsewhere doesn’t apply to them. The brand champion has to offset that internal bias by centralizing the decisions for brand building in one place he or she can control. The brand champion can then form a team to manage the overall brand planning process. 2. The International Communication System. The main purpose of this system will be to share insights, methods and best practices. That way, the customer insights derived in one country can be used in another country, generating synergy and added value for the brand. Creating just such a system will be difficult because of two common problems:- Information overload – people will already feel overwhelmed by the vast amount of information coming to them every day.
- A feeling that “it won’t work here” – the reluctance of people in one country to take advantage of market information derived from another.
- A strategic analysis which looks at customers, competitors and brand positioning.
- A brand strategy specifying how the brand is to be managed and linked to other brands as well as the customer value proposition.
- The strategic initiatives and other elements of the brand building programs proposed.
- Objectives and the criteria by which progress towards goals is to be measured and reported on.