Corporate Brand Advertising

Dean M. Krugman, Ph.D., ProfessorJameson L. Hayes, Doctoral Student

Overview

• Brand Promise and Value• Brand Contact• Advertising as an Investment • Advertising and Equity Development• Brand Equity Creates Value• Making Equity Tangible

Brand

• A name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers.

• May identify one item, a family of items, or all items of that seller.

Landor and Associates

• Focus on creating recognizable brand that drives business

• “Start with your brand promise.”

• “A brand is an experience.”

Brand is a Promise (and Path)

The brand’s promise determines how every facet of the organization-- product development, manufacturing, marketing, distribution – work to fulfill that promise.

Philip Kotler, Branding

Interbrand Valuation

• Market leadership• Trends• Diversification• Support • Stability

Interbrand World’s Most Valuable Brands

2009Rank

2008 Rank Brand

1 1 Coca-Cola

2 2 IBM

3 3 Microsoft

4 4 General Electric

5 5 Nokia

6 8 McDonald’s

7 10 Google

8 6 Toyota

9 7 Intel

10 9 Disney

2009Rank

2008Rank Brand

11 12 Hewlett-Packard

12 11 Mercedes Benz

13 14 Gillette

14 17 Cisco

15 13 BMW

16 16 Louis Vuitton

17 18 Marlboro

18 20 Honda

19 21 Samsung

20 24 Apple

Brand Contact

“Any and all messages, incentives, activities or methods by which a customer consumer or prospect comes in contact with the brand and leaves some trace of brand information and impact.”

Shultz and Walters, Measuring Brand Communication ROI

Times Square is the Theme Park of Brands CBS News

Times Square in Different Context

But Not All Contacts Are Positive

“Toyota Sinks in Quality Survey After Recalls.” Bloomberg Business Week headline

• Toyota’s worst score in J.D. Power & Associates new vehicle quality survey

• Toyota went from a perennial top brand to below the national average.

• High scoring brands have the highest customer retention.

Negative Contact Information

Study: Kids' meals loaded with fat, salt and calories Joan Lowy | Associated Press , August 4, 2008

Advertising and Marketing Communication

are and Investment!

Advertising Is An Investment Helps Develop Equity!

Every ad (program element) should be thought of as a contribution to the complex symbol which is the brand message.

David Ogilvy

Advertising is an Intangible Asset

Many of the most important assets of a firm (people and brand names) are “intangible assets” that are not capitalized and do not appear on a balance sheet. Depreciation is not assessed, on “intangible assets,” and maintenance must come out of cash flow or short-term profits.

David AakerManaging Brand Equity

Advertising is an Intangible Asset

Everyone understands that even in bad times a factory or plant must be maintained, in part because of the depreciation term in the income statement and also because the needs are usually visible. An intangible asset, by contrast is more vulnerable, and its “maintenance” is more easily neglected.

Lets Make it More Tangible!

Brand Equity Creates Brand Value!

What is Brand Equity?

Brand equity is a set of brand assets and liabilities linked to a brand that add to or subtract from the value provided by a product to a firm and that firm’s customers.

David AakerManaging Brand Equity

Understanding Equity or Value Added

Changes in the value added by the brand name should be as routine a part of annual reviews and plans as changes in brand volume.

James C. Crimmins,

Better Measure and Management of Brand Value

.

Can We Measure The Value Added By a Brand Name?

If my brand and a competitor’s are equally desirable, when mine costs $110 and my competitor’s costs $100, the amount of value added by my brand name relative to my competitor’s:

$110 — 1 = 10%$100

James C. Crimmins, Better Measurement and Management of Brand Value

.

Aaker’s Big Ten Asset Areas

David Aaker, Managing Brand Equity

Brand Loyalty

Loyal customer base reduces vulnerability to competitive action.

• Price Premium– How much more are you willing to pay?

• Satisfaction/Loyalty– satisfied? buy again? recommended?

.

Perceived Quality and Leadership

• Perceived Quality – high, average, low?– best, average?

• Leadership/Popularity– leading brand, growing?– Innovative?

Associations/Differentiation

Image dimensions that are unique to product or product class.

• Value – good value for the money– reasons to buy over your competitors

Associations/Differentiation

• Brand personality – brand as person. Link to emotional/self expressive.

Differentiation when limited physical difference Social consumption

-- Is brand unique? Interesting? clear image of user?

Associations/Differentiation

• Organizational Associations -- brand as organization.

– I trust McDonalds and like it more because of Ronald McDonald House

– I think Patagonia makes quality clothing and is environmentally friendly

Brand Awareness

• Brand Awareness — Brand salience Brand must enter evoked set as a reasonable

alternative. - recall- top of mind- recognition

Market Behavior

• Market Share

• Market Price and Distribution Coverage – relative market price that is not deep discounted.– relative product price– distribution

You Can Keep Score of All Ten Annually

Price PremiumSatisfaction/LoyaltyPerceived QualityLeadership/PopularityValueBrand PersonalityOrganizational AssociationsBrand AwarenessMarket BehaviorMarket Price & Distribution Coverage

Another Method to Measure Equity

What Do We Mean By “Added Value?”

From the buyer’s/user’s perspective, the value added by

a brand name has three dimensions:

1. The amount of value added by the brand

name in the category.

2. The breadth of the added value. The range of product

categories in which the name has value.

3. The content of the added value. The specific

qualities that are implied by the brand name.

These qualities are not usually visible at the

time of purchase. For example, service and

reliability are reasons why brand name adds value.

James C. Crimmins,

Better Measurement and Management of Brand Value

Can We Measure the Value Added By a Brand Name?

We often measure the content (qualities) implied by the brand name. We rarely measure the amount and the breadth.

The amount of value added can be measured if we note three basic issues:1. Value added is a relative concept, “Value added

to what?”2. Brand value is abstract and needs to be removed

from such factors as special pricing, and special promotions, which only serve to cloud the issue.

3. The metric which is most understandable for value added is dollars.

Equity Exercise

• Select one of your products or services in one of your markets.

• Product or service?• Market?• List content of value added. Specific qualities implied

by brand name. Such qualities may or may not be visible at time of purchase (e.g. service, support, reliability).

Equity Exercise Continued

• Content of value added?• Better, worse or same as competition? Why?• Compared to last year?• Division Breadth. Compared to other products and

services, does the product benefit and contribute more, less, or the same to the brand name?Compared to last year, is the breadth better, worse or the same?

Equity Exercise Continued

• Amount of Breadth. Can you estimate the amount on the basis of price?

• Compared to last year, is the amount better, worse or the same?

Lintas Equity Audit

• Brand Awareness• Market Share, Price-elasticity, share of voice• Brand Sensitivity – importance of brand to

other factors in purchase, price, package size, model

• Assumed Leadership – customer perception

Lintas Equity Audit

• Consistency of brand’s communication over time

• Image, attribute ratings, rankings• Distribution, pricing, product quality, product

innovation• Brand Loyalty – proportion of people who buy

it (regularly?)

Negotiation/ Collaboration

Promise/ Trust

Ownership/ Market Power

Contact

Valuation

Brand

Image/ Meaning