What makes brands great?

In a global economy subject to changinng market dynamics and height-ended competition, the role of brands has never been greater. They serve as route map for purchasing behaviour and when managed properly, generally accrue significant value to their owners. But how do you evaluate a brand and evaluate what makes it special?

For years, most brands owners relied on marketing-oriented measures such as awareness and esteem. Today they use more innovative and financially driven techniques to better quantify the value that brand represent.

These new techniques draw from a mix of traditional business valuation models and economic tools that measure brand performancein terms of monetary quantification, historicalbenchmarking, com­pe­titive assessment and return-on-investment anlyses. This has enabled companies to evaluate their brands more rigorously and to establish criteria with which to govern their development in the future.

But what is the right answer for evaluating brand performance? Some would argue that finan­cial models in isolation are unreliable, given fluctuations in corporate profitability. Some would contend that marketing measures alone are unsuited to the realities of today’s management needs. Others would argue that no single methodology is credible enough to encompass all the dimensions and complexities of a full evaluation of a brand. These different point of view mean that today there is a proliferation of measurement approaches that atttempt to bridge the traditionally separate consi­dera­tions of finance and marketing needed to provide a more holistic view of brand performance.

What great brands share

There are five qualities that leading brands share.

Three principal attributes...

1. A compelling idea. Behind every brand is a compelling idea, which captures customers’attention and loyalty by filling an unmet or unsatisfied need.
2. A resolute core purpose and supporting values. These remains in place even though the business strategy and tactics have to be regularly revised to address and take advantage of the circumstances of a changing and in detail often largely unanticipated, world and business environment.

From the 7 series to the Mini, the BMW brand stands for „the ultimate driving machine”. The target audience for each BMW model differs and the communictions about them project different expectations, but the core purpose remain the same: to deliver an outstanding experience through superior car performance. The Mini represented an opportunity to sell a new market segment and to introduce people to the BMW experience. The company set out to accomplish this by marrying the values and aspirations of a younger, hipper demographic to the experience promised by owning a Mini. The imagery, typography and tone of the communications identify who is a „Mini” kind of person. This strategy illustrates an opportunity capturated by connecting with a wider market without eroding the core purpose and positioning of the parent company.

3. A central organisational principle. The brand position, purpose and values are employed as management levers to guide decision-making. This becomes so ingrained in leading organisations that they consciously ask themselves, „How will this decision impact upon the brand?”According to Shelly Lazarus, chairman of „Ogilvy and Mather”, „Once the enterprise understands what the brand is all about, it gives direction to the whole enterprise. You know what products you’re supposed to make and not to make. You know how you’re supposed to answer your telephone. You know how you’re going to package things. It gives a set of principles to an entire enterprise.”

...and two characteristics

1. Most leading brands are American. Of the 20 leading brands, 15 are American. Does this mean that altough a leding brand can originate from anywhere, the United States is better at the practice of branding than other countries? Its dominance of the list of leading brands may be attributed to the nature of American society. Its entrepreneurial culturerecognises and rewards those succesful in business, and encourages risk-taking and the kind of innovation that produces the big idea from which a leading brand may develop. In effect, the United States has an established and natural incubator for business innovation rooted in the core purpose and values of the country.

There is also the fact that Americans are credited if not with inventing the practice of branding, certainly with embracingit is a management discipline. The rise of consumer-product brands in the United States after the second world war was simultaneously a response to prosperous times and a signal to consumers to spend because times were indeed better. Goods were plentiful, and choice, in the form of brands, was apparent on shelves across the country.

Brands and branding practices within the United States became more sophisticated through product and the line extensions, corporate identity programmes and pitched advertising wars that were waged throughout the 50 states and the world.

If differentiation is the goal, brannding is the process. And if a brand is a major source of value, it requires investment and dedicated management. This is precisely what the mostly American firms that own the leading brands do: they nurture the brand, grow its value and evaluate its performance like any other holding.

2 Most leading brands are commodities. Coca-Cola, Pepsi and Star-bucks products and services are easily substituted; BMW, Toyota and Harley-Davidson face plenty of competition; and there are many cellular phone alternatives to Nokia. Brands are about choice, and these brands have to com­pete in a crowded and noisy space. They have therefore had to continually search out what makes them special to so many people and how they can continue to innovate and meet these people’s needs.

What makes brands great

Leading brands have three attributes and two common characteristics as described above.

1. Consistency in delivering on their promise.
2. Superior products and processes.
3. Distinctive positioning and customer experience.
4. Alignment of internal and external commitment to the brand.
5. An ability to stay relevant.

Anyone with responsibility for building a brand needs to be creative, intelligent, innovative, venturesome, nurturing, disciplined and service-focused.

References:

Brands and branding,[ 2003], The Economist

Pringle, Hamish and Gordon, William [2003], Brand Manners, London, John Wiley & Sons, LTD.