I ran across this article, Brand Asset Management: Driving Profitable Growth Through Your Brands, by Scott M. Davis, that was published a couple of years ago. I have been thinking a lot lately about getting back to basics… really connecting with the importance of the discipline of managing your brand with an eye on the long term. This article is a great refresher on brand basics. Re-reading this article kinda clear away the cobwebs of current distractions and fired up the old creative juices for brand strategies. At Covenant, we believe in the power of strategic, creative marketing communications. And if you are going to do it, we believe it should be done with excellence. If this article excites you, let’s talk.
Brand Asset Management: Driving Profitable Growth Through Your Brands, by Scott M. Davis
Brands are among a company’s most valuable assets, and smart companies today realize that capitalizing on their brands is important. Doing so can help them achieve their growth objectives more quickly and more profitably.
These companies know that brands are more than just products and services. They know that brands are also what the company does and, more importantly, what the company is. Usually brands are why a company exists, not the other way around.
But most companies are not maximizing their potential financial returns because they are not maximizing the power of their brands. With proper brand management, for instance, your company’s sales of $100 million today can be increased by $30-$50 million in five years. However, this will happen if and only if you take advantage of the most important growth weapon at your disposal: your brand.
What Is a Brand?
A brand is an intangible but critical component of what a company stands for. A consumer generally does not have a relationship with a product or a service, but he or she may have a relationship with a brand. In part, a brand is a set of promise. It implies trust, consistency, and a defined set of expectations. The strongest brands in the world own a place in the consumer’s mind, and when they are mentioned almost everyone thinks of the same things. 3M invokes innovation, Hallmark stands for caring, FedEx means guaranteed delivery. Conversely, certain words connect you back to certain brands. Family entertainment conjures up Disney. Personal service suggests Nordstrom’s. Irreverence represents Virgin, and individual performance most often will connect you back to Nike.
A brand differentiates products and services that appear similar in features, attributes, and possible even benefits. Is Tide that much better than Surf? Is Starbucks that much better than Caribou Coffee? Is Sony that much better than JVC? Probably not.
What makes leading brands better is the PATH they travel in the human mind? PATH is an acronym for promise, acceptance, trust, and hope. This PATH is intangible and can be emotional. It strikes at the core of who we are as humans. Can you actually buy promise, acceptance, trust, and hope? Well, yes. A strong brand makes these intangibles tangible in the consumer’s mind. Weak brands do not.
A Mercedes buyer may indeed be getting a well-engineered durable, and reliable automobile, but is probably also paying for German engineering, prestige, and a statement that he or she has “made it.”
Similarly, buyers of Nike shoes may also be after better athletic performance; FedEx users buy reassurance that whatever they send will get there on time; John Deere purchasers believe it’s the best piece of machinery around; and Volvo buyers assume they are buying greater safety.
A brand is about confidence and security. On an average day consumers are exposed to six thousand advertisements and, each year, to more than twenty-five thousand new products. In such a world, brands take away the confusion. Brands help consumers cut through the proliferation of choices available in every products and service category.
The most common misperceptions managers have about brands have to do with the variety of marketing tools and tactics we are all familiar with. We may think any or all of the following are appropriate definitions of a brand:
Sure, all these help bring the brand to life and into consumers’ streams of consciousness, but in reality they are simply well-executed marketing and selling tactics.
The Benefits of Effective Brand Management
Let’s look at brand strength from two perspectives: customer actions and company strategies. Without doubt, customers perceive the importance of a strong brand: