In a global economy subject to changing market
dynamics and heightened competition, the role of
brands has never been greater. They serve as a route
map for purchasing behavior and, when managed
properly, generally accrue significant value to their
owners. But how do you evaluate a brand and
evaluate what makes it special?
This chapter examines what makes brands great,
but first it is helpful to briefly review valuation and
evaluation approaches. For years, most brand
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 brands represent.
These new techniques draw from a mix of traditional
business valuation models and economic tools that
measure brand performance in terms of monetary
quantification, historical benchmarking, competitive
assessment and return-on-investment analyses.
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 points of view mean that today there is
a proliferation of measurement approaches that
attempt to bridge the traditionally separate considerations
of finance and marketing needed to provide
a more holistic view of brand performance.
For the purposes of this chapter, 23 models that
assessed the value and benefits of brands were
examined (see list at end of this chapter). Some were
more financially driven and others employed traditional
marketing techniques. Many offered brand
rankings based on their methodologies. From those
rankings, the brands that repeatedly appear at
the top of the different list of rankings (see Table 4.1)
were identified in order to determine why they
come out on top regardless of the criteria used to
That they do is perhaps no surprise, as they are
widely recognized as being leaders in best practices
in brand investment and management. These “usual
suspects” among brand leaders appear to perform
consistently well against a broad range of factors,
including tangible equity, customer purchasing
habits and market stature. The reason is that they
share certain characteristics and approaches
that contribute to their success as a brand and
as a business.
What great brands share
There are five notable qualities that leading brands
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 remain 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 the 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 communications about them project different
expectations, but the core purpose remains
the same: to deliver an outstanding experience
through superior car performance. The Mini
represented an opportunity to sell to 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 captured by connecting with
a wider market without eroding the core purpose
and positioning of the parent company.
3. A central organizational principle. The brand
position, purpose and values are employed as
management levers to guide decision-making.
This becomes so ingrained in leading organizations
that they consciously ask themselves,
“How will this decision impact upon the brand?”
or “Is this on-brand?”
According to Shelly Lazarus, chairman of
Ogilvy & 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 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 although a leading 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 culture recognizes
and rewards those successful 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 embracing it as 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 line extensions, corporate
identity programs and pitched advertising warsthat were waged throughout the 50 states and
the world. American companies recognized that
to succeed in business they needed to differentiate
themselves in ways that could not be copied
by other companies. Management books of
the last 30 years reflect this primary tenet.
Whether it is a differentiated strategy, product,
service, technology or process, it will have been
based on “what we have” versus “what they
don’t have” or the fact that “we just do it better.”
If differentiation is the goal, branding 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.
This marriage of the internal employee experience
and the external customer experience
strengthens brand loyalty, as Russell confirms:
“If you move from being a commodity product to
an emotional product, through to the real
attachment and engagement that comes from
creating an experience, the degree of differences
might appear to be quite small but the results
are going to be much greater.”
5. An ability to stay relevant. Leading brands
constantly maintain their relevance to a targeted
set of customers, ensuring ownership of clear
points of difference compared with the competition.
They sustain their credibility by increasing
customers’ trust of and loyalty to them.
However, for every great brand there are scores
of failures. Even once-successful brands lose their
way, and in most cases the causes are obvious
but are recognized too late.
What makes brands leaders lose their way
The most common cause of lost leadership is taking
the brand for granted. This can happen when
the brand owners treat the asset as a cash cow.
This causes erosion of the original brand idea as
it marginalizes the customer experience. There is
a popular story told in business schools around
the world. For many years a man ran a successful
roadside restaurant. Word-of-mouth recommendations
from regular customers were so effective
that the restaurant itself became the destination,
rather than a passing stop, for its good value, highquality
home cooking and its smart, well-trained and
well-paid staff. It was not a showy place but standards
were high. It was a decently profitable business.
The owner was proud when his son got a place at
a good business school and he gladly paid for
the education he had never received. Following his
studies, the son joined his father in the business,
perhaps with the goal of franchising the concept.
Following a detailed analysis of the restaurant,
he recommended reducing the number of staff and
bringing in more junior people who could be paid
less, and buying lower-grade food which would be
cheaper. The father was wary of the changes and
concerned for his current staff, but he went along
The result was that standards of food, service
and cleanliness all went down and staff turnover
became a big problem. Regulars deserted their
once-favorite restaurant and word-of-mouth
recommendations stopped. The son decided to
advertise on billboards in the city and along
the road to the restaurant, and to run special promotional
offers. At first, there was a small lift to
the business, but the new customers were quick
to decide that their expectations were not met.
The restaurant limped along until it was forced
This story is used to encourage business students
not to be rigid in their approach and to be sure to
include employees and customers in any changes.
But the tale also has brand lessons. The son saw a
cash cow that could be manipulated for greater
profit. He did not recognize that if he disturbed
what made the brand great in the first place,
he ran the risk of breaking its promise. It also
shows that a good product is only as good as
the accompanying service.
This issue is being faced today by McDonald’s.
As The Economist wrote on April 10, 2003:
“McDonald’s, once a byword for good service, has
been ranked the worst company for customer satisfaction
in America for nearly a decade – below
even health insurers and banks.”
The current management is endeavoring to return
to the basics that once made the concept and the
There is no magic formula for creating a successful
brand. However, brands that lose their shine should
compare their past with their present and look to
the future with regard to three things: relevance,
differentiation and credibility. Once a brand loses
touch with its customer or ignores a potential new
audience, it has lost relevance. Successful brands
understand the wants and needs of their stakeholders
and tailor their offering to maintain its relevance.
Differentiation is a critical component of the
branding process. And, because brands are based
on promises and trust, they must be credible.
Customers grant companies the right to provide
them with what they need. As Adam Smith wrote
many, many years ago in The Wealth of Nations:
“Money is merely a claim on goods and services.”
Today we know that customers who experience
a breach in trust will take that claim elsewhere.
Recovering lost ground
Jim Collins, a business author, says in his book
Good to be Great that to build a great company
you “have to have a strong set of core values” that
you never compromise.
“If you are not willing to sacrifice your profits,
if you’re not willing to endure the pain for those
values, then you will not build a great company.”
Brands that lose direction often do so because they
depart from their core values. Thus it follows that
they can recover by returning to them and by asking
and answering such questions as: what is our
lasting influence? What void will exist if we were
to disappear? A frank appraisal of what made
the brand great in the first place, coupled with
an innovative reinvention of it, can make it as relevant
and great as it used to be.
IBM is an example of a great brand bouncing back.
The company dominated the mainframe computer
market but was outflanked in the personal computer
age by companies such as Compaq and Dell. It has
since reinvented itself as an it services provider.
It was a high-risk strategy and a challenging journey,
during which IBM invented and pioneered
large-scale brand management. It centralized
brand strategy and focused the marketing spend
for overall leverage. It used the brand as a central
management tool to drive behavior internally and
communicate consistently. It provided enough flexibility
to be nimble in the fast-moving technologies
segments but maintained control and discipline
to ensure integrity. Brand equity was measured to
gauge performance and ensure a brand-driven
culture, which would never again take the customer
As a result, IBM has
become the largest IT service
provider in the world, and the brand communicates
both innovation and reliability. When it claims that
it can provide “deeper” services to clients,
IBM comes across as highly credible.
Anyone with responsibility for building a brand needs to be creative, intelligent, innovative, venturesome, nurturing, disciplined and servicefocused. They must also master three primary
- Embody the brand itself. This is the most important task. The communications and the actions of the individual must align with the core purpose and values reflecting the brand. The organization looks to brand managers as role models who portray appropriate behavior and act in the best interests of the brand and company. Conversely, they must also challenge convention to keep the brand fresh by questioning what has become the status quo.
- Understand the underlying sources of brand value and protect and build on them.
- Continually search out what makes the brand unique. Customer preferences, competitive frameworks and market conditions are incredibly dynamic. Renewing and refreshing the brand to ensure continuing relevance, differentiation and credibility are the most strategic tasks and perhaps the most consuming tactically. Brand managers must determine what cannot change and what must change.
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The Economist book Brands and Branding was launched in February 2004. It is widely available at booksellers in-store and on-line. Contents of Brands and Branding:
Part 1: The Case for Brands
What is a Brand?
Tom Blackett, Interbrand
The Financial Value of Brands
Jan Lindemann, Interbrand
The Social Value of Brands
Steve Hilton, Good Business
What Makes Brands Great?
Chuck Brymer, Interbrand
Part 2: Best Practice in Branding
Brand Positioning and Brand Creation
Shaun Smith, consultant
Visual and Verbal Identity
John Simmons and Tony Allen,
Paul Feldwick, BMP
The Public Relations Perspective on Branding
Field Fisher Waterhouse
Part 3: The Future for Brands
Globalisation and Brands
Sameena Ahmad, The Economist
An Alternative Perspective on Brands
New Economics Foundation
Branding in South-East Asia
Kim Faulkner, Interbrand
Branding Places and Nations
Simon Anholt, Placebrands
The Future of Brands
Rita Clifton, Interbrand