IF you were asked in a survey what is the world’s best-known soft drink, you may very well respond Coca-Cola.
Microsoft would come to mind in the case of computer software, Google for internet services and IBM for computer services and consulting.
In fact, these companies were ranked the top four global brands in 2011 by Interbrand, the world’s largest brand consultancy.
The former Proctor & Gamble executive, Robert Blanchard, famously said, “A brand is the personification of a product, service or even entire company.”
A brand is a promise to the customer and what the customer comes to expect from a product or company, which differentiates them from competitors, and usually takes the form of a name, image, symbol or any other distinguishing feature. It is the perception of the marketplace, whether positive or negative.
The benefits of a strong and leading brand are enormous and are quantified in a concept called brand equity.
A strong brand commands a premium price and makes the buying decision easier, as the consumer has established trust and has a clear set of expectations. It creates loyalty, share of mind, preservation of market share, and dramatically enhances profitability and shareholder value.
A simple definition of brand equity is the marketing benefits and effects that a product or service acquires as a consequence of the brand name compared to the effects if the product did not have the
brand name, in other words the added value of the brand.
The brand value for Coca-Cola, for example, is estimated to be US$72 billion, approximately half of the company’s market capitalisation.
There are many methods of calculating the value of brand equity.
The company-level approach subtracts tangible and measurable intangible assets from market capitalisation to quantify brand equity value.
The product-level approach compares the price of a no-name product to a comparable branded product, the price differentiation deemed to be due to the brand.
Finally, the consumer-level approach measures consumer awareness and brand image to ascertain attributes and attitudes about the brand, high-equity brands having strong levels of awareness and favourable associations.
The journey of defining and building a brand may very well begin with establishing the corporate brand personality, which should reflect values, actions, words and characteristics of the employees of a company, individually and collectively.
The benefits and features of the product or service should be crafted in a simple, clear and concise message that includes what the brand stands for, what makes it special or unique, the market it is targeting and brand promise.
Most of the world’s great brands have a highly recognisable logo. Modern logo design typically follows the principles of simplicity and geometric abstraction. Most companies also have taglines or slogans.
Some of the more memorable for example are “Just do it” from Nike, and “Don’t leave home without it” from American Express.
One of the most important principles in brand management is to be consistent, as failure to do this may cause a brand to fail.
Once the brand is established, to remain successful, it has to deliver on its promise, because that is what the brand message has led customers to expect.
Anthony Galliano is chief executive of Cambodian Investment Management.