Overview
Branding, and all of its associated connotations, has taken on new meaning with the advent of Web‐based selling with its virtual showrooms and no‐travel means of instant comparison of products and pricing on a global scale. If today’s marketers in this Internet age are to avoid succumbing to competing on a price‐warfare footing, then this book is a must‐read.
The author asks, “Is Tide better than Surf? Starbucks better than Caribou Coffee?” Maybe not, but a company’s brand has the power to differentiate its products and services from those of its competitors – even when those products and services are exactly the same. As marketers know, when 70 percent of customers are willing to pay a premium for their brand of choice, then a strong brand is a company’s most valuable asset. The name “Coca‐Cola” has been valued at $47 billion, while Rolls‐Royce was sold with a brand value of $66 million and Pam‐Am’s brand image was valued at over $40 million at the time of sale.
Brand Asset Management goes beyond the typical and time‐proven discussion concerning recognition, loyalty, and inelastic demand benefits of effective branding. It provides a company’s management team with approaches to estimate the value of their own brand, manage it as a business asset, and use that asset to drive their business strategy. According to the author, for a company effectively to unleash the power of its brand, managers have to stop thinking of it as just another marketing tactic. They need to see it as a vehicle for their company’s growth, the key to their customer’s loyalty, and the basis for their internal operations. Scott Davis lays out a proven process that everyone in a firm can follow to position their company’s brand in the most advantageous way possible and use it to drive development, pricing, marketing, communications, and sales. This book is based on his extensive consulting experience with hundreds of organizations from Fortune 10 to start‐up companies.
Scott Davis’ experience is the result of being the managing director at the Chicago office of Prophet Brand Strategy and a former marketing and distribution manager at Procter & Gamble. He is also an adjunct professor at Northwestern University’s Kellogg Graduate School of Management and a contributing editor at Brandweek, and an editorial board member of The Journal of Consumer Marketing. His work has been featured in such publications as the Wall Street Journal, Fortune, and USA Today.
Background
Starting with the most basic premise, the author explores the question, “What is a brand?” Although intangible, a brand is a critical component of the company’s image. A consumer generally does not have a relationship with a product or a service, but he or she may have a relationship with a brand. In part, a brand is a set of promises. It implies trust, consistency, and a defined set of expectations. The strongest brands in the world own a place in the consumer’s mind, and when they are mentioned almost everyone thinks of the same things. The company 3M invokes innovation, while Hallmark stands for caring, and FedEx means guaranteed delivery. Conversely, certain words connect you back to certain brands. Family entertainment conjures up Disney. Personal service suggests Nordstrom’s. Irreverence represents Virgin, and individual performance most often will connect you back to Nike.
A brand differentiates products and services that appear similar in features, attributes, and possibly even benefits. What makes leading brands better is the PATH they travel in the human mind. According to the author, PATH is an acronym for promise, acceptance, trust, and hope. This PATH is intangible and can be emotional. It strikes at the core of who we are as humans. Can you actually buy promise, acceptance, trust, and hope? A strong brand makes these intangibles tangible in the consumer’s mind while weak brands do not. A brand is about confidence and security. On an average day, consumers are exposed to 6,000 advertisements and, each year, to more than 25,000 new products. In such a world, brands take away the confusion. Brands help consumers cut through the proliferation of choices available in every product and service category.
How might a company benefit by having a strong brand? First, loyality drives repeat business. The cost of the first sale to a new customer should be the most expensive when compared to repeat sales to that same customer. Additional benefits include brand‐based price premiums, which allow for higher margins. Strong brands lend immediate credibility to new product introductions. An example is the Gillette Mach 3 became the number one personal shaver within a month of its introduction. Strong brands allow for greater shareholder and stakeholder returns. Strong brands embody a clear, valued, and sustainable point of differentiation relative to the competition. A recent survey indicated that 66 percent of executives would not buy personal computers for their company if they do not run on Intel chips. Strong brands mandate clarity in internal focus and brand execution. Employees of firms with such brands generally understand what the brand stands for and what they need to do to uphold its reputation or promise. The more loyal the customer base and the stronger the brand, the more likely customers will be forgiving if a company makes a mistake. Brand strength is a lever for attracting the best employees and keeping satisfied employees. Finally, 70 percent of customers want to use a brand to guide their purchase decision. Most customers do not enjoy the purchase process and a strong brand image saves countless hours and perceived risks associated with purchases.
The book’s contribution
The advantages of a strong brand image are obvious and the preceding comments are made by the author primarily as a means of positioning his main thrust of this book embodied in the question, who in the corporation owns the brand? Most would respond that marketing owns the brand since marketing is held responsible for nurturing, developing, and maximizing the impact of the brand in the marketplace. If we accept that, then we need to determine whether routine events in the pursuit of a normal business day are all the responsibility of marketing. What about the customer’s bill, does it enhance the brand’s image? Yet the bill is the purview of the finance department. The customer with a question contact – customer services not the marketing department. The direct contact with the customer is the domain of the sales department, not marketing. The customer’s knowledge and perception of the brand will be formed by every manager and employee’s actions, behaviors, activities, and contacts.
The only resulting conclusion that can be accepted in today’s highly competitive world is that the brand is literally owned and should be managed by every employee in the organization. This means the brand must be enhanced and guarded at every point where the organization touches the customer, regardless of industry and regardless of company. These touchpoints build the consumer’s perceptions about the brand – good or bad. Brand, next to people, is the most important asset your company owns. Yes, it is intangible. No, it is not on the balance sheet, as it is in the UK, Hong Kong, and Australia.
In the USA, brand is generally considered part of the value of goodwill – not a specific line item under assets. It is not easy to place a financial value on a brand. However, to manage brand ultimately as a profit driver, you have to rethink your management approach. Your brand must be considered an asset, and as such must be developed and strengthened. This requires that financial support must be directed to that purpose with the associated budgetary commitments necessary to evolve the brand sufficiently so that the benefits of a strong brand might be manifested to the bottom line. Strong brands drive overall value, income, profitability, and long‐term growth. Those that believe this will agree it is worth investing in a new approach to maximize your brand’s value.
Brand asset management is a balanced investment approach for building the meaning of the brand, communicating it internally and externally, and leveraging it to increase brand profitability, brand asset value, and brand returns over time. Getting to this new approach is tough; staying there may be even tougher. Do not forget what delivered you to a successful point. Those same principles must be maintained and can never be neglected or the consequence will be the loss of everything gained in relatively short order. The reason why brand asset management has not taken better hold in modern business is the associated costs over a three‐ to five‐year period with limited returns. Most companies need to satisfy short‐term expectations to the bottom line so that long‐term objectives such as brand asset management are not readily pursued. Adherence to the principles espoused by the author will deliver meaningful long‐term results.
Structure
The author’s approach to developing the subject is transparent upon examining the structure of the book. Phase one involves Elements of a brand vision, and consists of one chapter. Phase two consists of three chapters, “Determining your brand’s image”, “Creating your brand’s contract”, and “Crafting a brand‐based customer model” with the phase being entitled “Determining your brand picture”. Five chapters encompass phase three, entitled, “Developing a brand asset management strategy”. The chapters are: “Positioning your brand for success”, “Extending your brand”, “Communicating your brand’s positioning”, “Leveraging your brand to maximize channel influence”, and “Pricing your brand at a premium”. The final phase of the book, “Supporting a brand asset management culture”, consists of two chapters entitled, “Measuring your return on brand investment” and “Establishing a brand‐based culture”.
The work covers 251 pages consisting of 11 chapters. The index is well‐developed, permitting the book to be a reference source once the initial read is completed. Each chapter averages 22 pages and can be digested easily in a couple of days. The effort exerted to absorb the material can beneficially change the cultural approach of any business today toward moving in a positive direction to secure a place in today’s competitive marketplace.
