Brand Leadership – The Evolving Paradigm by David Aaker & Erich Joachimsthaler

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 or 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 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.
For all that, however, the way that strong brands are built is rapidly changing and evolving. A new paradigm is emerging in which achieving brand leadership is becoming more important than simply building brand equity. The Old Paradigm (Build Brand Equity) >> The New Paradigm (Achieve Brand Leadership) To succeed in building brand leadership, a business must overcome and address four key challenges: The 4 Key Challenges of Achieving Brand Leadership: 1. Positioning: To originate a strategy which provides identity, differentiation and empathy. 2. Architecture: To build a comprehensive architecture providing strategic direction. 3. Programs: To develop effective programs and a system to track the results. 4. Organization: To create a viable brand building organization In effect, the paradigm for brand building is evolving from the tactical and reactive approach of t raditional brand management to the much more strategic and visionary brand leadership approach. Similarly, the focus of brand building is evolving from a limited single market scope to a much broader and more complex multiple market focus embracing the global perspective. And, at the same time, the key driver of brand strategy is evolving from measures like sales or market share to a better long-term metric, brand identity.

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.
The new paradigm of building brand leadership is rapidly replacing the classic brand management system. The classic system worked well for decades, in part because brand management was always considered a high profile position. Thus, managers who were exceptional planners and doers tended to be attracted to the brand manager role. In an increasingly more complex business environment, however, the old paradigm is becoming less and less relevant. The new brand leadership paradigm is becoming more and more important. For example, consider the brands which are today competing to achieve brand leadership:
  • 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.

If the goal of brand leadership is to build strong brands, how do you tell whether or not a brand is strong? Fortunately, it is relatively easy to estimate the value of a brand using straightforward logic: 1. Identify the earnings stream for each major product in the brand family. 2. Decide what proportion of that earnings stream can be attributed to:
  • • Fixed assets – plant and equipment.
  • • Intangibles – patents, systems, people or processes.
  • • The brand.
3. Aggregate the various product market values to determine an overall value for the brand equity. This will give a subjective measure (plus or minus 30-percent) of the overall brand equity. And that brand equity, in turn, can be broken down into four dimensions: Brand Equity:
  • 1. Brand Awareness
  • 2. Percieved Equity
  • 3. Brand Associates
  • 4. Brand Loyalty
Lets explain each one by one:
  • 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.
By tracking and measuring each of these dimensions, it becomes feasible to measure whether or not brand equity is being increased by the actions taken. Key Thoughts “In an increasingly crowded marketplace, fools will compete on price. Winners will find a way to create lasting value in the customer’s mind.” – Tom Peters “Interbrand is a firm that generates brand values. In its June 1999 study of brands, sixty brands were estimated to have a value over $1 billion: the leaders were Coca-Cola at $83.8 billion and Microsoft at $56.7 billion. In many cases, the brand value was a significant percentage of the total market capitalization of the firm (even though the brand was not on all its products). Of the top fifteen brands, only General Electric had a brand value under 19-percent of the firm’s market value. In contrast, nine of the top sixty brands had values that exceeded 50-percent of the whole firm’s value, and BMW, Nike, Apple and Ikea had brand-firm value ratios over 75-percent. The Interbrand study rather dramatically illustrates that creating strong brands does pay off and that brands have created meaningful value. It is an important statement about the wisdom and feasibility of creating brand assets.” – David Aaker and Erich Joachimsthaler “You cannot win the hearts of customers unless you have a heart yourself.” – Charlotte Beers, J. Walter Thompson “The key to most strong brands is brilliant execution that bursts out of the clutter, provides a boost to the brand, and creates a cumulative impact over time. The difference between good and brilliant cannot be overstated. The problem, of course, is that there is a lot of good around and little brilliance. The challenge is to be noticed, to be remembered, to change perceptions, to reinforce attitudes, and to create deep customer relationships. Good execution rarely moves the needle unless inordinate amounts of resources are expended.” – David Aaker and Erich Joachimsthaler “The strong brands of tomorrow are going to understand and use interactive media, direct response, promotions, and other devices that provide relationship-building experiences.” – David Aaker and Erich Joachimsthaler “Everyone experiences more than he understands – but it is experience, not understanding, that influences behavior.” – Marshall McLuhan “Successful management involves measurement. Without measurement, budgets become arbitrary and programs cannot be evaluated. The key to effective measurement is to have indicators that tap all dimensions of brand equity: brand awareness, perceived quality, customer loyalty, and associations that include brand personality as well as organizational and attribute associations. Relying on short-term financial indicators alone is a recipe for brand erosion rather than brand building.” – David Aaker and Erich Joachimsthaler “Leadership is part of the core identity for many brands, especially corporate brands, and with good reason. It can inspire employees and partners by setting a high brand aspiration level; the goal of being out in front makes the brand-building task exciting and worthwhile. For many customers, a leadership brand provides reassurance, while for others it implies quality and/or innovation that translates into solid functional benefits. Buying and using a true leadership brand also delivers self-expressive benefits – a feeling of importance and the satisfaction of having good judgement.” – David Aaker and Erich Joachimsthaler “Customers ultimately drive brand value, and a brand strategy thus needs to be based on a powerful, disciplined segmentation strategy, as well as an in-depth knowledge of customer motivations.” – David Aaker and Erich Joachimsthaler “A brand strategy must follow the business strategy.” – Dennis Carter, Intel “We hire eagles and teach them to fly in formation.” – D. Wayne Calloway, former CEO, PepsiCo

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.
Naturally, once a brand identity has been elaborated, it needs to be communicated throughout the organization and to partners. This communication can take several forms. For example:
  • Presentations by a brand spokesperson.
  • Workshops.
  • Videos.
  • Books or written manuals.
  • Home study materials or internal training courses.
Key Thoughts “In order to be communicated effectively, a brand identity needs to be punchy, memorable, focused and motivating.” – David Aaker and Erich Joachimsthaler “Any CEO who cannot clearly articulate the intangible assets of his brand and understand its connection to customers is in trouble.” – Charlotte Beers, J. Walter Thompson “A brand is the face of a business strategy.” – Scott Galloway, Prophet Brand Strategy “To change an organization, you have to change its stories.” – Richard Stone, StoryWork Institute

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.
Many firms now carry out periodic audits of their brand architecture to identify emerging problems and ensure all potential benefits are being derived. Also, whenever a new brand is added to the architecture, serious issues are likely to arise. This is also an appropriate time for an audit to be made, coupled with the appropriate action programs for managing and growing the brand architecture. Key Thoughts “The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.” – Babe Ruth “A well conceived and managed brand architecture can generate clarity, synergy and brand leverage rather than a diffused focus, marketplace confusion and brand-building waste.” – David Aaker and Erich Joachimsthaler “The decisions concerning brand architecture and the brand relationship spectrum are driven in large part by the business strategy of the firm. As a result, the market environment is also an important driver of brand architecture decisions. Brand strategists’ assumptions about the market – the trends, unserved needs, alternative segmentation approaches – are the fundamental issues that need to be evaluated and clarified.” – David Aaker and Erich Joachimsthaler

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.
Specifically, there are three tasks involved in building a brand: 1. Create Visibility 2. Build Associations 3. Deepen Customer Relationships Taking each of these tasks in turn: 1. Create visibility.  Brand visibility is a mix of three factors: 1. Recognition – “Have you heard of this brand?” 2. Awareness – “What brands do you know?” 3. Top-of-mind status – “What do you think of?” Generally, brand builders strive for a mix of all three factors when attempting to create high visibility. 2. Build associations. Making strong associations lies at the heart of brand building, and is a key means of creating differentiation. Emerging brands are usually especially keen to be associated with long established brands that are highly valued and established in the marketplace. Brands are often judged by the company they keep. 3. Deepen customer relationships. The strongest brands succeed in going beyond visibility and associations to develop deep relationships with customers. Simply put, this requires the brand becomes a meaningful part of the customer’s life or the way they perceive themselves. Once a brand achieves that, customers become loyal to and defensive of the brand. In practice, the best ways to build the brand include: 1. Have a clear and concise brand identity that is unambiguous, tightly focused and sharp. And that brand identity should be an integral part of a compelling value proposition the customer relationship is based upon. 2. Understand customers and frame the brand in such a way it addresses factors which are central to their lives. This is the concept of “hitting them where they live”. 3. Rise above the clutter by having one single driving idea which resonates deeply with customers. 4. Get customers involved. Provide a no-risk free trial so they can test drive and experience the brand. 5. Have a rich, multi-media approach. Invite customers to experience the brand from a number of different media vehicles. 6. Reach target customers as intimately as possible. To do that, you’ll need to segment the broader market very tightly. Brand building always falters when segmentation becomes fuzzy. 7. Delight, surprise and, if necessary, shock the customer in a positive way. Strong brands always find creative ways to rise above the background noise and stand out. That often requires innovation and creativity to achieve. 8. Make the brand the centerpiece of everything that’s done. Link everything you do to the brand – and make certain everything gets done brilliantly. 9. Incorporate authenticity and substance. A brand is authentic if it delivers on what it promises. It has substance if the benefit delivered adds value for customers rather than being something superficial. Good brands make authentic claims and provide the substance to deliver on those claims. 10.Expand the circle of influence. Gradually include more and more people into the branding program. Expose as many people as possible to it. Develop strategies by which those who have heard about the program can share the message with their peers. One common strategy for building and enhancing the value of a brand is to use sponsorships. Specifically, sponsorships contribute to brand building by:
  • 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.
As with any commercial activity, sponsorship arrangements can sometimes go wrong. To avoid potential problems, the seven keys of effective and productive sponsorships are: 1. Have clear communication objectives. Is the sponsorship intended to enhance visibility, develop good associations or build relationships? Any of these three objectives may be correct, so be clear about exactly what the communication objective is. 2. Select the sponsorship well. Instead of just choosing from the sponsorship opportunities offered, be proactive in finding sponsorships that are a good fit, and that will add value to the brand. 3. Look for logical fits between events and brands. The best sponsorships allow a product to be demonstrated. Look for sponsorship opportunities that will be exceptionally good fits between the event and your brand. 4. Become part of the event title. Make the brand an inseparable part of the event itself by securing long-term naming rights. That way, over time, the effectiveness of the sponsorship can grow. 5. Exploit every publicity angle. In addition to paying for the event, budget sufficient money to pay for publicity and associated marketing activities. As a rule-of-thumb, this will usually be approx. three- to four-times the sponsorship event cost. 6. Watch for multiple payoff opportunities. As well as creating exposure and good associations for a brand, sponsorships have lots of other potential benefits:
  • 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.
Take advantage of all these opportunities. 7. Don’t let the sponsorship drift. Manage it. The best sponsorships are more like co-branding experiences than anything else. They don’t just happen naturally – sponsorships have to be managed and grown over time to realize the full payoffs. Goals need to be set, objectives specified, programs executed and the results measured for the sponsorship to be effective. And, ideally, you want your extended business organization to be closely involved in utilizing the sponsorship. Truly great sponsorship arrangements substantially further the strategic objectives of the brand. The recent arrival of the Internet has also opened new opportunities for brand building. A number of new online brands have already emerged – including America Online, and Yahoo! Many more digital age brands are likely to grow and prosper in the near future. The Web is an ideal environment for brand building because:
  • It is interactive and involving.
  • It can offer rich, current information.
  • The Web experience can be seamlessly personalized.
The six main tools for building brands on the Web are: 1. Web sites – A Web site dedicated to a brand is the most powerful tool available because it can be tailored to the needs of the brand precisely. 2. Advertising and sponsored content – Banner ads, click-throughs or third-party content can leverage associations with other brands. 3. Intranets – Internal private sites which can communicate the essence of the brand within the organization. 4. Customer extranets – Internal system which allow partners to access information and process orders. Extranets can reflect the brand and enrich the customer experience. 5. Web PR – Personal home pages, discussion groups and so forth. These offer opportunities for happy (and unhappy) customers to share their experiences with others. 6. E-Mail – Can be used to build brands by providing reminders and personalized offers to customers while gathering feedback and information from customers. Of these six tools, most likely a Web site will be the main thrust and emphasis of the majority of the brand building programs. The five key guidelines for using a Web site as a productive and effective brand building tool are: 1. Create a positive experience. If your Web site is easy to use, engaging and adds value on each visit, customers will have a positive experience each time they visit – enhancing their perception of your brand. 2. Reflect and support the qualities of the brand. Good Web sites reflect and support the brand. When the brand identity is the driver, the Web site can incorporate features that are refreshing with an emotional connection. 3. Look for synergy with other communication programs. A good Web site will act as the glue which brings every other brand building activity carried out by the business together in one place. It also enables the brand builder to maintain control over the direction the brand evolves. 4. Provide a home for loyalists. Loyal customers have an emotional attachment to the brand. The Web site should act as central hub where loyalists can obtain information about future events, new products and the brand heritage story. 5. Differentiate with strong content. The functional features of Web sites can be easily cloned and copied. Thus, effective brand building Web sites provide something others cannot duplicate – intangibles, branded services or unique content. As well as being something others cannot duplicate without significant cost, these features add personality and character to a Web site, enhancing its ability to build the customers perceptions of and experience with the brand.

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.
By creating and nurturing a corporate culture where best practices are freely shared and acted upon, companies can create the type of environment global brand leadership demands. 3. A Common Global Brand Planning Process. Global brand leaders tend to use a template approach to brand planning. That is, they have a process which is consistent across a number of products and a number of markets. This template usually has at least four components:
  • 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.
The global brand planning process will be the cornerstone by which the synergy and leverage of the global brand building process is realized. 4. The Ability To Execute Effectively. Finally, building a global brand will require execution brilliance. There are so many internal challenges to overcome and so much background clutter to rise above when building a global brand that implementation brilliance is absolutely required. Key Thoughts “A global brand is seldom best achieved by a simple decree that positioning and other brand-building elements must be common across the world. Rather, it should be achieved by global brand management based on a global planning process, a global brand communication system, an effective organizational structure and a system that will deliver brilliance in brand-building execution. Using these tools, country managers should develop strategies that create the strongest brand possible. The goal is to reduce the number of brand programs to the smallest feasible number: the end result could be a global brand, but it could also be several regional brands.” – David Aaker and Erich Joachimsthaler “The primary goal should be global brand leadership, not global brands. Despite the elegance of creating global brands and the fact it makes brand management much easier, a firm should not arbitrarily move in that direction if brand strength will be sacrificed.” – David Aaker and Erich Joachimsthaler “The challenge of justifying investments to build brand assets is similar to justifying investments in any other intangible asset. Although the three most important assets in nearly every organization are people, information technology and brands, none of these appear on the balance sheet. Quantitative measures of their effect on the organization are virtually impossible to obtain; as a result, only very crude estimates of value are available. The rational for any investment in any intangible, therefore, must rest in part on a conceptual model of the business that is often not easy to generate or defend. Without such a model, though, movement toward brand leadership is inhibited.” – David Aaker and Erich Joachimsthaler]]>

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