The chapters in this book do not have to be read in order, although the first two are worth reviewing first as they are so basic to the concept of strategic branding. After that, you might flip through the remaining chapters and identify those that relate to current pain points. Or look for chapters that intrigue or seem provocative and may be a possible source of new perspectives.
Here is how I divided the book thematically:
Part 1: Recognize that brands are assets with strategic value. The breakthrough idea that changed marketing over two decades ago is that brands are strategic assets. Brands are platforms for future success and create ongoing value for the organization. Thus, brand building is strategic, very different than tactical efforts to stimulate sales
Part 2. Have a compelling brand vision that guides and inspires. A brand vision should attempt to go beyond functional benefits to consider organizational values; a higher purpose; brand personality; and emotional, social, and self-expressive benefits. Look for opportunities to create and own innovations that customers “must have” and to position categories and subcategories as well as brands.
Part 3. Bring the brand vision to life. Create initiatives and brand-building programs that support the brand. Look to customer sweet spots—areas customers are interested if not passionate about—and develop programs around them with the brand as partner. Let digital programs lead or amplify. Strive for brand vision and brand execution consistency over time. Develop rich, strong internal branding connected to the values and culture of the organization in part through stories.
Part 4. Maintain relevance. Recognize and respond to the three threats to relevance and learn how to energize the brand.
Part 5: Manage and leverage the brand portfolio. Create a strategy that identifies brand roles (such as strategic brands or endorser brands), leverage the brand into new product arenas, analyze the risks and options of vertical brand extensions, and manage silo organizational units, where the brand spans products and countries.
THE BOTTOM LINE
A brand will benefit if it can develop an actionable higher purpose. This book, like my other brand books, also has a higher purpose. It is intended to advance the theory of branding and the practice of brand management and, by extension, the practice of business and organizational management. The purpose is to give marketing strategists a counter weight to the dominance of short-term financials in managing businesses. There should be a drive to build strategic brand assets that will provide the platforms for future success. This book will hopefully provide a role in that quest.
PART I
RecognizeThat BrandsAre Assets
Chapter 1
BRANDS ARE ASSETS THAT DRIVE STRATEGY
A brand is the face of a business strategy. —Prophet dictum
Sometime in the late 1980s, an explosive idea emerged, the idea that brands are assets, have equity, and drive business strategy and performance.
Conceiving of brands as assets started a dramatic and far-reaching cascade of change. It altered perceptions of marketing and brand management, how brands are managed and measured, and the role of marketing executives. Those firms that adopted and successfully implemented this view saw brand building shift from a tactical effort that could be safely delegated to a communication team to a driver of business strategy.
It was an idea whose time was right. A critical mass of executives believed that key brands in their portfolio were inadequate in vision or strength to support the business strategy, but they no longer looked at tweaking communication tactics as the solution. Unless there were brand assets that enabled the business strategy and resonated with the customers, the strategy was all but doomed. That view was particularly clear for executives who were managing a strategy change. The net result? More and more executives realized that tactical brand management was inadequate and a strategy-led brand vision, plus organizational processes and skills to implement that vision, was critically needed.
The acceptance of the “brand as asset” concept was enhanced by the fact that the prevailing belief—that brand marketing’s prime role was to stimulate sales—had failed in many contexts. In packaged goods, there was the disastrous experience in the early 1980s stimulated by the advent of scanner-based, real-time data. This data enabled experiments that clearly showed that price promotions such as 20 percent off or two-for-one were incredibly effective at generating sales. The natural outcome was a huge spurt in price programs which taught consumers to wait for the next deal and avoid buying at the regular price. As a result, price became the important purchase driver and brand differentiation fell. Brands like Kraft took years to recover their equity and loyal customer base.
Executives also saw that brand assets were needed to create top-line growth which became an imperative for many firms because cost-reduction programs had past the point of diminishing returns and lost their ability to materially affect profitability. The most effective path to growth, to create an innovative new offering, required the ability to develop a new brand or adapt an existing one to support the new offering. Further, brand-extension strategies, extending an existing master brand into new products or into value or super-premium segments, was viable only if the brand assets were developed and managed strategically with future extension options in mind.
The brand-as-asset view had both face validity and quantitative support. Face validity came from a realization that, especially in service and BtoB contexts, customers were making buy decisions and appraising their use experience on brand elements that went beyond price and functional attributes. Quantitative support was based on data-based efforts that showed that brands did have substantial asset value and made the new paradigm palatable to the CFOs and CEOs of the world.
The academic world played a role in the elevation of brands to strategic status as well, stimulated by the influential 1988 brand conference hosted by Marketing Science Institute (MSI), a consortium of firms that both funds and guides academic research. The conference provided an outlet for top marketing executives to signify the need to elevate brand to a strategic level. After this conference, brand equity research vaulted to the number one academic research priority. Academic research in brand extension decisions, quantifying the impact of brands on financial performance, refining relevant tools such as brand personality measurement, and conceptualizing brand equity was accelerated.
It was a perfect storm of ideas and timing. However, the surge of interest and organizational change did not immediately impact all industries and firms. Many firms were slow to join the parade, particularly those in which marketing strengths were not in evidence and/or those that were highly decentralized. One barrier, in addition to buying into the message, was the difficulty of actual implementation. However, the willingness of firms to adopt the brand-as-asset view and, as important, their ability to implement the new perspective, has grown steadily over time, proving this is not some management fad.
The implications were and are extraordinary.
FROM TACTICAL TO STRATEGIC
One paradigm, once dominant, posits brand management as tactical. Brand management is something that can be delegated in part to an advertising manager or agency because it is mostly about managing the image, creating an advertising campaign, managing a distribution strategy, developing sales promotions, supporting the sales force, getting packaging