or perhaps as an endorser to support a strategic entry into another product class, providing a platform that will deliver awareness and positive associations such as perceived quality. A brand can also be leveraged vertically to support an upscale or downscale offering. However, under the “brand as asset” model the goal is not just to create a successful brand extension but to enhance the brand and the whole brand portfolio. A strategic, broader perspective is introduced.
ORGANIZATIONAL SILO ISSUES NEED TO BE ADDRESSED
Nearly all brands span different silo organizations defined by products, markets, or countries. At some firms (GE or Toshiba, for example), a brand could drive customer relationships in a thousand product markets. When brands are viewed tactically, silo autonomy appears to work as it allows those organizational units closest to the customer to adapt the brand to their needs.
However, losing control over silo brand-building creates inefficiencies, lost opportunities, and diminution of the brand. When the brand is allowed to be taken in different directions by different silos, it will become confused and weak. Further, effective and efficient brand building often requires scale and the motivation to share best practices. As a result of these issues and others, it has become clear that centralized coordination is needed across the countries and products that are using the brand to drive the business.
BRAND MANAGER AS COMMUNICATION TEAM LEADER
In the old days, the brand manager often just acted as the coordinator and scheduler of tactical communication programs. It was a simpler time, with a limited number of media levers to pull and a simpler charge: generate sales.
Brand builders now face a very different world, a world with a set of communication vehicles that are numerous, complex, and dynamic. Creating and managing an integrated communication program (IMC) is much tougher. Further, the communication task now has a charge beyond sales generation; it needs to build brand assets guided by a clear brand vision in part by strengthening brand associations and customer relationships. Not easy. And the task is made more difficult as increasingly a master brand is spread over products and countries, raising difficult budget allocation decisions.
The brand-as-asset driven communication needs to also generate understanding and buy-in inside the organization, because the brand will only deliver on the brand promise if the employees “believe” and live the brand in all the customer touchpoints. The need is thus to build the brand internally as well as externally.
WHY IS IT HARD?
Why has such a compelling concept been slow to be accepted? And why is it slow to be implemented even when accepted? Three main reasons:
First, the power of short-term financials is overwhelming. Managers look to these measures for evaluation in part because there is instant gratification in seeing immediate results of actions and programs. Further, finance theory has “proven” that the role of business is to maximize stock return and the reality is that stock return responds to short-term earnings changes because alternative measures are either unavailable or unreliable. As a result, managers learn that careers advance when they deliver short-term improvements in financials.
Second, building brand assets is no easy feat. Getting the brand vision right and then finding breakthrough ways to bring it to life ranges from difficult to impossible. And if the payoff is three to five years out, it is hard to convince executives that the performance is on track when the short-term financials are flat or declining, in part because convincing surrogates for long-term performance are hard to generate. As a result, even organizations that believe can find it hard to deliver.
Third, some organizations do not have a marketing capability in the form of people, processes, or culture, and therefore will be slow to accept the brand-as-asset view. This is more likely for organizations in BtoB or high-tech settings and for firms in countries like China, which have operated under the protection of a government and are focused on manufacturing and distribution rather than on brands. Executives in such environments are slow to accept the strategic quality of brands and find it difficult to allocate resources in that direction.
THE BOTTOM LINE
It is hard to overemphasize the importance of the brand-as-asset concept. In the history of marketing there are a few concepts that have truly transformed the practice of marketing. Mass marketing, the marketing concept, and segmentation would surely be named. But the “brand as asset” view of brands and brand building, although not always easy to implement, needs to be on the list as well.
Chapter 2
BRAND ASSETS HAVE REAL VALUE
Brand value is very much like an onion. It has layers and a core.The core is the user who will stick with you until the very end. —Edwin Artzt, former CEO P&G
Brand assets have real value. This assertion is critical to living in the new brand-as-asset world, with all its implications, from business strategy to marketing programs to the resourcing and management of brand building. But as branding becomes strategic and earns a seat at the executive table, the CEOs and CFOs of the world, who may have sympathy with the brand asset concept, will ultimately need proof that value actually exists. A conceptual argument will be part of the persuasion, but more empirical evidence may be necessary as well.
Investments in brand were easy to justify under the classic brand management paradigm, which focused on short-term sales. Brand programs either delivered immediate sales and profits or they did not. Building brand assets, however, may involve consistent reinforcement over years and only a small portion of the pay-off may occur immediately—in fact, in the short run brand building may depress profits. So the need is to measure long-term brand impacts or its surrogates. We have left the tactical world, in which short-term measures work.
There are a variety of ways that brand asset value can be demonstrated, including case studies, brand valuations, quantitative studies of the impact of brand equity, and the role of brand assets in conceptual business strategy models.
CASE STUDIES
A vivid, convincing, and memorable way to demonstrate brand asset value is to look at case studies. Look to brands that have undeniably contributed to the creation of enormous value. The Apple brand, for example, with its creative, independent personality and reputation for being a leading innovator, is a driver of one of the most valuable firms in the world. BMW has gotten traction in large part because of a brand defined around the “ultimate driving machine” and the self-expressive benefits that the badge lends to the driver. Trader Joe’s has dominated a subcategory with a brand that has crystalized a set of values and life-style that delivers both self-expressive and social benefits.
Consider also the value of creating a brand that is so strong it can survive business blunders that sometimes undercut the brand promise. Such brands can lead a come-back that otherwise would be infeasible. Apple had a down period in its product line and business performance before Steve Jobs returned in 1997, but its brand allowed the business to come back when the product problems were remedied and innovation returned. The same can be said about Harley-Davidson, which went through a period of quality problems and saw the brand lead the business back once those problems were resolved. AT&T, the leading communication brand for three generations prior to the 1980s, spent almost two decades shouting price and fighting service issues, and yet today it is still one of the strongest and most relevant brands in its category. These stories testify to the resilience and asset value of a strong brand.
Consider finally those brands that did collapse when managed badly, thereby losing enormous enterprise
