Unformatted Attachment Preview
8 Developing a Brand Equity Measurement and Management System
Learning Objectives
After reading this chapter, you should be able to
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1. Describe the new accountability in terms of ROMI.
2. Outline the two steps in conducting a brand audit.
3. Describe how to design, conduct, and interpret a tracking study.
4. Identify the steps in implementing a brand equity management system.
Marketers must adopt research methods and procedures so they understand when, where, how, and why consumers buy.
Source: David Noton Photography/Alamy
Preview
The previous six chapters, which made up Parts II and III of the text, described various strategies and approaches to building brand
equity. In the next three chapters, which make up Part IV, we take a detailed look at what consumers know and feel about and act
toward brands and how marketers can develop measurement procedures to assess how well their brands are doing.
The customer-based brand equity (CBBE) concept provides guidance about how we can measure brand equity. Given that customerbased brand equity is the differential effect that knowledge about the brand has on customer response to the marketing of that brand,
two basic approaches to measuring brand equity present themselves. An indirect approach can assess potential sources of customerbased brand equity by identifying and tracking consumers’ brand knowledge—all the thoughts, feelings, images, perceptions, and
beliefs linked to the brand. A direct approach, on the other hand, can assess the actual impact of brand knowledge on consumer
response to different aspects of the marketing program.
The two approaches are complementary, and marketers can and should use both. In other words, for brand equity to provide a useful
strategic function and guide marketing decisions, marketers must fully understand the sources of brand equity, how they affect
outcomes of interest such as sales, and how these sources and outcomes change, if at all, over time. Chapter 3 provided a framework
for conceptualizing consumers’ brand knowledge structures. Chapter 9 uses this information and reviews research methods to
measure sources of brand equity and the customer mind-set. Chapter 10 reviews research methods to measure outcomes, that is, the
various benefits that may result from creating these sources of brand equity.
Before we get into specifics of measurement, this chapter offers some big-picture perspectives of how to think about brand equity
measurement and management. Specifically, we’ll consider how to develop and implement a brand equity measurement system. A
brand equity measurement system is a set of research procedures designed to provide marketers with timely, accurate, and actionable
information about brands so they can make the best possible tactical decisions in the short run and strategic decisions in the long run.
The goal is to achieve a full understanding of the sources and outcomes of brand equity and to be able to relate the two as much as
possible.
The ideal brand equity measurement system would provide complete, up-to-date, and relevant information about the brand and its
competitors to the right decision makers at the right time within the organization. After providing some context about the heightened
need for marketing accountability, we’ll look in detail at three steps toward achieving that ideal—conducting brand audits, designing
brand tracking studies, and establishing a brand equity management system.
THE NEW ACCOUNTABILITY
Although senior managers at many firms have embraced the marketing concept and the importance of brands, they often struggle with
questions such as: How strong is our brand? How can we ensure that our marketing activities create value? How do we measure that
value?
Virtually every marketing dollar spent today must be justified as both effective and efficient in terms of return of marketing
investment (ROMI).1 This increased accountability has forced marketers to address tough challenges and develop new measurement
approaches.
Complicating matters is that, depending on the particular industry or category, some observers believe up to 70 percent (or even more)
of marketing expenditures may be devoted to programs and activities that improve brand equity but cannot be linked to short-term
incremental profits.2 Measuring the long-term value of marketing in terms of both its full short-term and long-term impact on
consumers is thus crucial for accurately assessing return on investment.
Clearly marketers need new tools and procedures that clarify and justify the value of their expenditures, beyond ROMI measures tied
to short-term changes in sales. In Chapter 3, we introduced the brand resonance model and brand value chain, structured means to
understand how consumers build strong bonds with brands and how marketers can assess the success of their branding efforts. In the
remainder of this chapter, we offer several additional concepts and perspectives to help in that pursuit.
CONDUCTING BRAND AUDITS
To learn how consumers think, feel, and act toward brands and products so the company can make informed strategic positioning
decisions, marketers should first conduct a brand audit. A brand audit is a comprehensive examination of a brand to discover its
sources of brand equity. In accounting, an audit is a systematic inspection by an outside firm of accounting records including analyses,
tests, and confirmations.3 The outcome is an assessment of the firm’s financial health in the form of a report.
A similar concept has been suggested for marketing. A marketing audit is a “comprehensive, systematic, independent, and periodic
examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view of
determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance.”4
The process is a three-step procedure in which the first step is agreement on objectives, scope, and approach; the second is data
collection; and the third and final step is report preparation and presentation. This is an internally, company-focused exercise to make
sure marketing operations are efficient and effective.
A brand audit, on the other hand, is a more externally, consumer-focused exercise to assess the health of the brand, uncover its sources
of brand equity, and suggest ways to improve and leverage its equity. A brand audit requires understanding the sources of brand equity
from the perspective of both the firm and the consumer. From the perspective of the firm, what products and services are currently
being offered to consumers, and how they are being marketed and branded? From the perspective of the consumer, what deeply held
perceptions and beliefs create the true meaning of brands and products?
The brand audit can set strategic direction for the brand, and management should conduct one whenever important shifts in strategic
direction are likely.5 Are the current sources of brand equity satisfactory? Do certain brand associations need to be added, subtracted,
or just strengthened? What brand opportunities exist and what potential challenges exist for brand equity? With answers to these
questions, management can put a marketing program into place to maximize sales and long-term brand equity.
Conducting brand audits on a regular basis, such as during the annual planning cycle, allows marketers to keep their fingers on the
pulse of their brands. Brand audits are thus particularly useful background for managers as they set up their marketing plans and can
have profound implications on brands’ strategic direction and resulting performance.
DOMINO’S PIZZA
In late 2009, Domino’s was a struggling business in a declining market. Pizza sales were slumping as consumers defected to healthier
and fresher dining options at one end or to less expensive burger or sandwich options at the other end. Caught in the middle, Domino’s
also found its heritage in “speed” and “best in delivery” becoming less important; even worse, it was undermining consumer’s
perceptions of the brand’s taste, the number-one driver of choice in the pizza category. To address the problem, Domino’s decided to
conduct a detailed brand audit with extensive qualitative and quantitative research. Surveys, focus groups, intercept interviews, social
media conversations, and ethnographic research generated a number of key insights. The taste problem was severe—some consumers
bluntly said that Domino’s tasted more like the box than the pizza. Research also revealed that consumers felt betrayed by a company
they felt they no longer knew. A focus on impersonal, efficient service meant that in consumers’ minds, there was no Domino’s
kitchens, no chefs, not even ingredients. Consumers were skeptical of “new and improved” claims and felt companies never admitted
they were wrong. Based on these and other insights, Domino’s began its brand comeback. Step one—new recipes for crust, sauce, and
cheese that resulted in substantially better taste-test scores. Next, Domino’s decided not to run from criticism and launched the “Oh
Yes We Did” campaign. Using traditional TV and print media and extensive online components, the company made clear that it had
listened and responded by creating a better pizza. Documentary-type filming showed Domino’s CEO and other executives observing
the original consumer research and describing how they took it to heart. Surprise visits were made to harsh critics from the focus
groups, who tried the new pizza on camera and enthusiastically praised it. Domino’s authentic, genuine approach paid off. Consumer
perceptions dramatically improved and growth in sales in 2010 far exceeded the competitors’.6
A thorough, insightful brand audit helped to convince Domino’s they needed to confront their perceived flaws head on.
Source: Domino’s Pizza LLC
The brand audit consists of two steps: the brand inventory and the brand exploratory. We’ll discuss each in turn. Brand Focus 8.0
illustrates a sample brand audit using the Rolex brand as an example.
Brand Inventory
The purpose of the brand inventory is to provide a current, comprehensive profile of how all the products and services sold by a
company are marketed and branded. Profiling each product or service requires marketers to catalogue the following in both visual and
written form for each product or service sold: the names, logos, symbols, characters, packaging, slogans, or other trademarks used; the
inherent product attributes or characteristics of the brand; the pricing, communications, and distribution policies; and any other
relevant marketing activity related to the brand.
FIGURE 8-1 Red Hat Brand Wall
Source: Photo courtesy of Red Hat, Inc.
Often firms set up a “war room” where all the various marketing activities and programs can be displayed or accessed. Visual and
verbal information help to provide a clearer picture. Figure 8-1 shows a wall that software pioneer Red Hat created of all its various
ads, brochures, and other marketing materials. Managers were pleasantly surprised when they saw how consistent all the various items
were in form, look, and content, although they were left scratching their heads as to why the Red Hat office in Australia had created
branded underwear as a promotional gift. Needless to say, the “tighty whities” were dropped after being deemed off-brand.7
The outcome of the brand inventory should be an accurate, comprehensive, and up-to-date profile of how all the products and services
are branded in terms of which brand elements are employed and how, and the nature of the supporting marketing program. Marketers
should also profile competitive brands in as much detail as possible to determine points-of-parity and points-of-difference.
Rationale.
The brand inventory is a valuable first step for several reasons. First, it helps to suggest what consumers’ current perceptions may be
based on. Consumer associations are typically rooted in the intended meaning of the brand elements attached to them—but not always.
The brand inventory therefore provides useful information for interpreting follow-up research such as the brand exploratory we
discuss next.
Although the brand inventory is primarily a descriptive exercise, it can supply some useful analysis too, and initial insights into how
brand equity may be better managed. For example, marketers can assess the consistency of all the different products or services
sharing a brand name. Are the different brand elements used on a consistent basis, or are there many different versions of the brand
name, logo, and so forth for the same product—perhaps for no obvious reason—depending on which geographic market it is being
sold in, which market segment it is being targeted to, and so forth? Similarly, are the supporting marketing programs logical and
consistent across related brands?
As firms expand their products geographically and extend them into other categories, deviations—sometimes significant in nature—
commonly emerge in brand appearance and marketing. A thorough brand inventory should be able to reveal the extent of brand
consistency. At the same time, a brand inventory can reveal a lack of perceived differences among different products sharing the brand
name—for example, as a result of line extensions—that are designed to differ on one or more key dimensions. Creating sub-brands
with distinct positions is often a marketing priority, and a brand inventory may help to uncover undesirable redundancy and overlap
that could lead to consumer confusion or retailer resistance.
Brand Exploratory
Although the supply-side view revealed by the brand inventory is useful, actual consumer perceptions, of course, may not necessarily
reflect those the marketer intended. Thus, the second step of the brand audit is to provide detailed information about what consumers
actually think of the brand by means of the brand exploratory. The brand exploratory is research directed to understanding what
consumers think and feel about the brand and act toward it in order to better understand sources of brand equity as well as any possible
barriers.
Preliminary Activities.
Several preliminary activities are useful for the brand exploratory. First, in many cases, a number of prior research studies may exist
and be relevant. It is important to dig through company archives to uncover reports that may have been buried, and perhaps even long
forgotten, but that contain insights and answers to a number of important questions or suggest new questions that may still need to be
posed.
Second, it is also useful to interview internal personnel to gain an understanding of their beliefs about consumer perceptions for the
brand and competitive brands. Past and current marketing managers may be able to share some wisdom not necessarily captured in
prior research reports. The diversity of opinion that typically emerges from these internal interviews serves several functions,
increasing the likelihood that useful insights or ideas will be generated, as well as pointing out any inconsistencies or misconceptions
that may exist internally for the brand.
Although these preliminary activities are useful, additional research is often required to better understand how customers shop for and
use different brands and what they think and feel about them. To allow marketers to cover a broad range of issues and to pursue some
in greater depth, the brand exploratory often employs qualitative research techniques as a first step, as summarized in Figure 8-2,
followed by more focused and definitive survey-based quantitative research.
FIGURE 8-2 Summary of Qualitative Techniques
Interpreting Qualitative Research.
There are a wide variety of qualitative research techniques. Marketers must carefully consider which ones to employ.
Criteria.
Levy identifies three criteria by which we can classify and judge any qualitative research technique: direction, depth, and diversity.8
For example, any projective research technique varies in terms of the nature of the stimulus information (is it related to the person or
the brand?), the extent to which responses are superficial and concrete as opposed to deeper and more abstract (and thus requiring
more interpretation), and the way the information relates to information gathered by other projective techniques.
In Figure 8-2, the tasks at the top of the left-hand list ask very specific questions whose answers may be easier to interpret. The tasks
on the bottom of the list ask questions that are much richer but also harder to interpret. Tasks on the top of the right-hand list are
elaborate exercises that consumers undertake themselves and that may be either specific or broadly directed. Tasks at the bottom of
the right-hand list consist of direct observation of consumers as they engage in various behaviors.
According to Levy, the more specific the question, the narrower the range of information given by the respondent. When the stimulus
information in the question is open-ended and responses are freer or less constrained, the respondent tends to give more information.
The more abstract and symbolic the research technique, however, the more important it is to follow up with probes and other questions
that explicitly reveal the motivation and reasons behind consumers’ responses.
Ideally, qualitative research conducted as part of the brand exploratory should vary in direction and depth as well as in technique. The
challenge is to provide accurate interpretation—going beyond what consumers explicitly state to determine what they implicitly mean.
Chapter 9 reviews how to best conduct qualitative research.
Mental Maps and Core Brand Associations.
One useful outcome of qualitative research is a mental map. A mental map accurately portrays in detail all salient brand associations
and responses for a particular target market. One of the simplest means to get consumers to create a mental map is to ask them for
their top-of-mind brand associations (“When you think of this brand, what comes to mind?”). The brand resonance pyramid from
Chapter 3 helps to highlight some of the types of associations and responses that may emerge from the creation of a mental map.
It is sometimes useful to group brand associations into related categories with descriptive labels. Core brand associations are those
abstract associations (attributes and benefits) that characterize the 5–10 most important aspects or dimensions of a brand. They can
serve as the basis of brand positioning in terms of how they create points-of-parity and points-of-difference. For example, in response
to a Nike brand probe, consumers may list LeBron James, Tiger Woods, Roger Federer, or Lance Armstrong, whom we could call
“top athletes.” The challenge is to include all relevant associations while making sure each is as distinct as possible. Figure 8-3
displays a hypothetical mental map and some core brand associations for MTV.
Figure 8-3a Classic MTV Mental Map
Source: MTV logo, MCT/Newscom
Figure 8-3b Possible MTV Core Brand Associations
A related methodology, brand concept maps (BCM), elicits brand association networks (brand maps) from consumers and aggregates
individual maps into a consensus map.9 This approach structures the brand elicitation stage of identifying brand associations by
providing survey respondents with a set of brand associations used in the mapping stage. The mapping stage is also structured and has
respondents use the provided set of brand associations to build an individual brand map that shows how brand associations are linked
to each other and to the brand, as well as how strong these linkages are. Finally, the aggregation stage is also structured and analyzes
individual brand maps step by step, uncovering the common thinking involved. Figure 8-4 displays a brand concept map for the Mayo
Clinic (the subject of Branding Brief 8-2) provided by a sample of patients.
One goal from qualitative, as well as quantitative, research in the brand exploratory is a clear, comprehensive profile of the target
market. As part of that process, many firms are literally creating personas to capture their views as to the target market, as summarized
in The Science of Branding 8-1.
FIGURE 8-4 Sample Mayo Clinic Brand Concept Map
Conducting Quantitative Research.
Qualitative research is suggestive, but a more definitive assessment of the depth and breadth of brand awareness and the strength,
favorability, and uniqueness of brand associations often requires a quantitative phase of research.
The guidelines for the quantitative phase of the exploratory are relatively straightforward. Marketers should assess all potentially
salient associations identified by the qualitative research phase according to their strength, favorability, and uniqueness. They should
examine both specific brand beliefs and overall attitudes and behaviors to reveal potential sources and outcomes of brand equity. And
they should assess the depth and breadth of brand awareness by employing various cues. Typically, marketers will also need to
conduct similar types of research for competitors to better understand their sources of brand equity and how they compare with the
target brand.
Much of the above discussion of qualitative and quantitative measures has concentrated on associations to the brand name—for
example, what do consumers think about the brand when given its name as a probe? Marketers should study other brand elements in
the brand exploratory as well, because they may trigger other meanings and facets of the brand.
For instance, we can ask consumers what inferences they make about the brand on the basis of the product packaging, logo, or other
attribute alone, such as, “What would you think about the brand just on the basis of its packaging?” We can explore specific aspects of
the brand elements—for example, the label on the package or the shape of the package itself—to uncover their role in creating brand
associations and thus sources of brand equity. We should also determine which of these elements most effectively represents and
symbolizes the brand as a whole.
Brand Positioning and the Supporting Marketing Program
The brand exploratory should uncover the current knowledge structures for the core brand and its competitors, as well as determining
the desired brand awareness and brand image and points-of-parity and points-of-difference. Moving from the current brand image to
the desired brand image typically means adding new associations, strengthening existing ones, or weakening or eliminating
undesirable ones in the minds of consumers according to the guidelines outlined in Chapter 2.
John Roberts, one of Australia’s top marketing academics, sees the challenge in achieving the ideal positioning for a brand as being
able to achieve congruence among four key considerations: (1) what customers currently believe about the brand (and thus find
credible), (2) what customers will value in the brand, (3) what the firm is currently saying about the brand, and (4) where the firm
would like to take the brand (see Figure 8-5).10 Because each of the four considerations may suggest or reflect different approaches to
positioning, finding a positioning that balances the four considerations as much as possible is key.
A number of different internal management personnel can be part of the planning and positioning process, including brand, marketing
research, and production managers, as can relevant outside marketing partners like the marketing research suppliers and ad agency
team. Once marketers have a good understanding from the brand audit of current brand knowledge structures for their target
consumers and have decided on the desired brand knowledge structures for optimal positioning, they may still want to do additional
research testing alternative tactical programs to achieve that positioning.
THE SCIENCE OF BRANDING 8-1: The Role of Brand Personas
To crystalize all the information and insights they have gained about their target market(s), researchers can employ personas.
Personas are detailed profiles of one, or perhaps a few, target market consumers. They are often defined in terms of demographic,
psychographic, geographic, or other descriptive attitudinal or behavioral information. Researchers may use photos, images, names, or
short bios to help convey the particulars of the persona.
The rationale behind personas is to provide exemplars or archetypes of how the target customer looks, acts, and feels that are as trueto-life as possible, to ensure marketers within the organization fully understand and appreciate their target market and therefore
incorporate a nuanced target customer point of view in all their marketing decision-making. Personas are fundamentally designed to
bring the target consumer to life.
A good brand persona can guide all marketing activities. Burger King’s brand persona is a cool, youngish uncle, who—although
somewhat older than the chain’s early-teens male target—is younger than their parents. The corresponding brand voice appears online,
in ads and promotions, and wherever the brand expresses itself.
Although personas can provide a very detailed and accessible perspective on the target market, it can come at a cost. Overly focusing
on a narrow slice of the target market can lead to oversimplification and erroneous assumptions about how the target market as a
whole thinks, feels, or acts. The more heterogeneity in the target market, the more problematic the use of personas can be.
To overcome the potential problem of overgeneralization, some firms are creating multiple personas to provide a richer tapestry of the
target market. There can also be varying levels of personas, such as primary (target consumer), secondary (target consumer with
differing needs, targets, goals), and negative (false stereotypes of users).
Burger King adopted a persona as the “cool youngish uncle” to help guide the irreverent tone and personality of its marketing
communications.
Source: Charles Harris/AdMedia/Newscom
Sources: Allen P. Adamson, Brand Digital: Simple Ways Top Brands Succeed in the Digital Age (New York: Palgrave-MacMillan, 2008); Lisa Sanders, “Major
Marketers Get Wise to the Power of Assigning Personas,” Advertising Age, 9 April 2007, 36; Stephen Herskovitz and Malcolm Crystal, “The Essential Brand
Persona: Storytelling and Branding,” Journal of Business Strategy 31, no. 3 (2010): 21. For additional information on storytelling, see Edward Wachtman and
Sheree Johnson, “Discover Your Persuasive Story,” Marketing Management (March/April 2009): 22–27.
FIGURE 8-5 John Roberts’s Brand Positioning Considerations
Source: Used with permission of John Roberts, ANU College of Business and Economics, The Australian National University.
DESIGNING BRAND TRACKING STUDIES
Brand audits are a means to provide in-depth information and insights essential for setting long-term strategic direction for the brand.
But to gather information for short-term tactical decisions, marketers will typically collect less detailed brand-related information
through ongoing tracking studies.
Brand tracking studies collect information from consumers on a routine basis over time, usually through quantitative measures of
brand performance on a number of key dimensions that marketers can identify in the brand audit or other means. They apply
components from the brand value chain to better understand where, how much, and in what ways brand value is being created,
offering invaluable information about how well the brand has achieved its positioning.
As more marketing activity surrounds the brand—as the firm introduces brand extensions or incorporates an increasing variety of
communication options in support of the brand—it becomes difficult and expensive to research each one. Regardless of how few or
how many changes are made in the marketing program over time, however, marketers need to monitor the health of the brand and its
equity so they can make adjustments if necessary.
Tracking studies thus play an important role by providing consistent baseline information to facilitate day-to-day decision making. A
good tracking system can help marketers better understand a host of important considerations such as category dynamics, consumer
behavior, competitive vulnerabilities and opportunities, and marketing effectiveness and efficiency.
What to Track
Chapter 3 provided a detailed list of potential measures that correspond to the brand resonance model, all of which are candidates for
tracking. It is usually necessary to customize tracking surveys, however, to address the specific issues faced by the brand or brands in
question. Each brand faces a unique situation that the different types of questions in its tracking survey should reflect.
Product–Brand Tracking.
Tracking an individual branded product requires measuring brand awareness and image, using both recall and recognition measures
and moving from more general to more specific questions. Thus, it may make sense to first ask consumers what brands come to mind
in certain situations, to next ask for recall of brands on the basis of various product category cues, and to then finish with tests of brand
recognition (if necessary).
Moving from general to more specific measures is also a good idea in brand tracking surveys to measure brand image, especially
specific perceptions like what consumers think characterizes the brand, and evaluations such as what the brand means to consumers. A
number of specific brand associations typically exist for the brand, depending on the richness of consumer knowledge structures,
which marketers can track over time.
Given that brands often compete at the augmented product level (see Chapter 1), it is important to measure all associations that may
distinguish competing brands. Thus, measures of specific, “lower-level” brand associations should include all potential sources of
brand equity such as performance and imagery attributes and functional and emotional benefits. Benefit associations often represent
key points-of-parity or points-of-difference, so it is particularly important to track them as well. To better understand any changes in
benefit beliefs for a brand, however, marketers may also want to measure the attribute beliefs that underlie those benefit beliefs. In
other words, changes in descriptive attribute beliefs may help to explain changes in more evaluative benefit beliefs for a brand.
Marketers should assess those key brand associations that make up the potential sources of brand equity on the basis of strength,
favorability, and uniqueness in that order. Unless associations are strong enough for consumers to recall them, their favorability does
not matter, and unless they are favorable enough to influence consumers’ decisions, their uniqueness does not matter. Ideally,
marketers will collect measures of all three dimensions, but perhaps for only certain associations and only some of the time; for
example, favorability and uniqueness may be measured only once a year for three to five key associations.
At the same time, marketers will track more general, “higher-level” judgments, feelings, and other outcome-related measures. After
soliciting their overall opinions, consumers can be asked whether they have changed their attitudes or behavior in recent weeks or
months and, if so, why. Branding Brief 8-1 provides an illustrative example of a simple tracking survey for McDonald’s.
Corporate or Family Brand Tracking.
Marketers may also want to track the corporate or family brand separately or concurrently (or both) with individual products. Besides
the measures of corporate credibility we identified in Chapter 2, you can consider other measures of corporate brand associations
including the following (illustrated with the GE corporate brand):
BRANDING BRIEF 8-1: Sample Brand Tracking Survey
Assume McDonald’s is interested in designing a short online tracking survey. How might you set it up? Although there are a number
of different types of questions, your tracking survey might take the following form.
Introduction: We’re conducting a short online survey to gather consumer opinions about quick-service or “fast-food” restaurant
chains.
Brand Awareness and Usage
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a. What brands of quick-service restaurant chains are you aware of?
b. At which brands of quick-service restaurant chains would you consider eating?
c. Have you eaten in a quick-service restaurant chain in the last week? Which ones?
d. If you were to eat in a quick-service restaurant tomorrow for lunch, which one would you go to?
e. What if you were eating dinner? Where would you go?
f. Finally, what if you were eating breakfast? Where would you go?
g. What are your favorite quick-service restaurant chains?
We want to ask you some general questions about a particular quick-service restaurant chain, McDonald’s.
Have you heard of this restaurant? [Establish familiarity.]
Have you eaten at this restaurant? [Establish trial.]
When I say McDonald’s, what are the first associations that come to your mind? Anything else? [List all.]
Brand Judgments
We’re interested in your overall opinion of McDonald’s.
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a. How favorable is your attitude toward McDonald’s?
b. How well does McDonald’s satisfy your needs?
c. How likely would you be to recommend McDonald’s to others?
d. How good a value is McDonald’s?
e. Is McDonald’s worth a premium price?
f. What do you like best about McDonald’s? Least?
g. What is most unique about McDonald’s?
h. To what extent does McDonald’s offer advantages that other similar types of quick-service restaurants cannot?
i. To what extent is McDonald’s superior to other brands in the quick-service restaurant category?
j. Compared to other brands in the quick-service restaurant category, how well does McDonald’s satisfy your basic needs?
A whole range of questions can be used to understand McDonald’s sources and outcomes of brand equity in a tracking survey.
Source: Kim Karpeles/Alamy
We now want to ask you some questions about McDonald’s as a company. Please indicate your agreement with the following
statements.
McDonald’s is …
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a. Innovative
b. Knowledgeable
c. Trustworthy
d. Likable
e. Concerned about their customers
f. Concerned about society as a whole
g. Likable
h. Admirable
Brand Performance
We now would like to ask some specific questions about McDonald’s. Please indicate your agreement with the following statements.
McDonald’s …
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a. Is convenient to eat at
b. Provides quick, efficient service
c. Has clean facilities
d. Is ideal for the whole family
e. Has delicious food
f. Has healthy food
g. Has a varied menu
h. Has friendly, courteous staff
i. Offers fun promotions
j. Has a stylish and attractive look and design
k. Has high-quality food
Brand Imagery
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a. To what extent do people you admire and respect eat at McDonald’s?
b. How much do you like people who eat at McDonald’s?
c. How well do each of the following words describe McDonald’s? Down-to-earth, honest, daring, up-to-date, reliable, successful,
upper class, charming, outdoorsy
d. Is McDonald’s a restaurant that you can use in a lot of different meal situations?
e. To what extent does thinking of McDonald’s bring back pleasant memories?
f. To what extent do you feel that you grew up with McDonald’s?
Brand Feelings
Does McDonald’s give you a feeling of …
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a. Warmth?
b. Fun?
c. Excitement?
d. Sense of security or confidence?
e. Social approval?
f. Self-respect?
Brand Resonance
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a. I consider myself loyal to McDonald’s.
b. I buy McDonald’s whenever I can.
c. I would go out of my way to eat at McDonald’s.
d. I really love McDonald’s.
e. I would really miss McDonald’s if it went away.
f. McDonald’s is special to me.
g. McDonald’s is more than a product to me.
h. I really identify with people who eat at McDonald’s.
i. I feel a deep connection with others who eat at McDonald’s.
j. I really like to talk about McDonald’s to others.
k. I am always interested in learning more about McDonald’s.
l. I would be interested in merchandise with the McDonald’s name on it.
m. I am proud to have others know I eat at McDonald’s.
n. I like to visit the McDonald’s Web site.
o. Compared to other people, I follow news about McDonald’s closely.
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• How well managed is GE?
• How easy is it to do business with GE?
• How concerned is GE with its customers?
• How approachable is GE?
• How accessible is GE?
• How much do you like doing business with GE?
• How likely are you to invest in GE stock?
• How would you feel if a good friend accepted employment with GE?
The actual questions should reflect the level and nature of experience your respondents are likely to have had with the company.
When a brand is identified with multiple products, as in a corporate or family branding strategy, one important issue is which
particular products the brand reminds consumers of. At the same time, marketers also want to know which particular products are
most influential in affecting consumer perceptions about the brand.
To identify these more influential products, ask consumers which products they associate with the brand on an unaided basis (“What
products come to mind when you think of the Nike brand?”) or an aided basis by listing sub-brand names (“Are you aware of Nike Air
Force basketball shoes? Nike Sphere React tennis apparel? Nike Air Max running shoes?”). To better understand the dynamics
between the brand and its corresponding products, also ask consumers about their relationship between them (“There are many
different products associated with Nike. Which ones are most important to you in formulating your opinion about the brand?”).
Global Tracking.
If your tracking covers diverse geographic markets—especially in both developing and developed countries—then you may need a
broader set of background measures to put the brand development in those markets in the right perspective. You would not need to
collect them frequently, but they could provide useful explanatory information (see Figure 8-6 for some representative measures).
It is perhaps no coincidence that one of the strongest B-to-B brands—GE—is also one of the best-managed.
Source: Courtesy of GE
How to Conduct Tracking Studies
Which elements of the brand should you use in tracking studies? In general, marketers use the brand name, but it may also make sense
to use a logo or symbol in probing brand structures, especially if these elements can play a visible and important role in the decision
process.
You also need to decide whom to track, as well as when and where to track.
Whom to Track.
Tracking often concentrates on current customers, but it can also be rewarding to monitor nonusers of the brand or even of the product
category as a whole, for example, to suggest potential segmentation strategies. Marketers can track those customers loyal to the brand
against those loyal to other brands, or against those who switch brands. Among current customers, marketers can distinguish between
heavy and light users of the brand. Dividing up the market typically requires different questionnaires (or at least sections of a basic
questionnaire) to better capture the specific issues of each segment.
It’s often useful to closely track other types of customers, too, such as channel members and other intermediaries, to understand their
perceptions and actions toward the brand. Of particular interest is their image of the brand and how they feel they can help or hurt its
equity. Retailers can answer direct questions such as, “Do you feel that products in your store sell faster if they have [the brand name]
on them? Why or why not?” Marketers might also want to track employees such as salespeople, to better understand their beliefs
about the brand and how they feel they’re contributing to its equity now or could do so in the future. Such tracking may be especially
important with service organizations, where employees play profound roles in affecting brand equity.
When and Where to Track.
How often should you collect tracking information? One useful approach for monitoring brand associations is continuous tracking
studies, which collect information from consumers continually over time. The advantage of continuous tracking is that it smoothes out
aberrations or unusual marketing activities or events like a high profile new digital campaign or an unlikely occurrence in the
marketing environment to provide a more representative set of baseline measures.
The frequency of such tracking studies, in general, depends on the frequency of product purchase (marketers typically track durable
goods less frequently because they are purchased less often), and on the consumer behavior and marketing activity in the product
category. Many companies conduct a certain number of interviews of different consumers every week—or even every day—and
assemble the results on a rolling or moving average basis for monthly or quarterly reports.
FIGURE 8-6 Brand Context Measures
MILLWARD BROWN
Millward Brown has led the innovation and implementation of tracking studies for the last 30 years. In general, the firm interviews
50–100 people a week and looks at the data with moving averages trended over time. Then it relates specific marketing activity and
events to the trend data to understand their impact. Client brands are typically compared to a competitive set to determine relative
performance within the product category. Millward Brown collects data on a variety of topics as dictated by the client needs. Modules
include brand equity (current and future potential), brand positioning, value perceptions, awareness and response to marketing
communications and in-store promotions, consumer profiles, and so on. The survey data is analyzed in conjunction with a variety of
other data sources (traditional and social media, search data, sales data, etc.) to provide guidance on improving marketing ROI.
Interviews on average run from 15 to 20 minutes in length (on the Web, the phone—both landline and mobile—and in-person in
emerging markets). A 20-minute weekly interview with 50 nationally representative consumers can cost roughly $300,000 annually
for a typical consumer product, depending on modality.11
When the brand has more stable and enduring associations, tracking on a less frequent basis can be enough. Nevertheless, even if the
marketing of a brand does not appreciably change over time, competitive entries can change consumer perceptions of the dynamics
within the market, making tracking critical. Finally, the stage of the product or brand life cycle will affect your decision about the
frequency of tracking: Opinions of consumers in mature markets may not change much, whereas emerging markets may shift quickly
and perhaps unpredictably.
How to Interpret Tracking Studies
To yield actionable insights and recommendations, tracking measures must be as reliable and sensitive as possible. One problem with
many traditional measures of marketing phenomena is that they don’t change much over time. Although this stability may mean the
data haven’t changed much, it may also be that one or more brand dimensions have changed to some extent but the measures
themselves are not sensitive enough to detect subtle shifts. To develop sensitive tracking measures, marketers might need to phrase
questions in a comparative way—“compared to other brands, how much …” or in terms of time periods—“compared to one month or
one year ago, how much …”
Another challenge in interpreting tracking studies is deciding on appropriate benchmarks. For example, what is a sufficiently high
level of brand awareness? When are brand associations sufficiently strong, favorable, and unique? How positive should brand
judgments and feelings be? What are reasonable expectations for the amount of brand resonance? The cutoffs must not be
unreasonable and must properly reflect the interests of the intended internal management audience. Appropriately defined and tested
targets can help management benchmark against competitors and assess the productivity of brand marketing teams.
Marketers may also have to design these targets with allowance for competitive considerations and the nature of the category. In some
low-involvement categories like, say, lightbulbs, it may be difficult to carve out a distinct image, unlike the case for higherinvolvement products like cars or computers. Marketers must allow for and monitor the number of respondents who indicate they
“don’t know” or have “no response” to the brand tracking measures: the more of these types of answers collected, the less consumers
would seem to care.
One of the most important tasks in conducting brand tracking studies is to identify the determinants of brand equity.12 Which brand
associations actually influence consumer attitudes and behavior and create value for the brand? Marketers must identify the real value
drivers for a brand—that is, those tangible and intangible points-of-difference that influence and determine consumers’ product and
brand choices. Similarly, marketers must identify the marketing activities that have the most effective impact on brand knowledge,
especially consumer exposure to advertising and other communication mix elements.
Carefully monitoring and relating key sources and outcome measures of brand equity should help to address these issues. The brand
resonance and brand value chain models suggest many possible links and paths to explore for their impact on brand equity. (Chapters
9 and 10 discuss several measures in more detail.)
ESTABLISHING A BRAND EQUITY MANAGEMENT SYSTEM
Brand tracking studies, as well as brand audits, can provide a huge reservoir of information about how best to build and measure brand
equity. To get the most value from these research efforts, firms need proper internal structures and procedures to capitalize on the
usefulness of the brand equity concept and the information they collect about it. Although a brand equity measurement system does
not ensure that managers will always make “good” decisions about the brand, it should increase the likelihood they do and, if nothing
else, decrease the likelihood of “bad” decisions.
Embracing the concept of branding and brand equity, many firms constantly review how they can best factor it into the organization.
Interestingly, perhaps one of the biggest threats to brand equity comes from within the organization, and the fact that too many
marketing managers remain on the job for only a limited period of time. As a result of these short-term assignments, marketing
managers may adopt a short-term perspective, leading to an overreliance on quick-fix sales-generating tactics such as line and
category extensions, sales promotions, and so forth. Because these managers lack an understanding and appreciation of the brand
equity concept, some critics maintain, they are essentially running the brand “without a license.”
To counteract these and other potential forces within an organization that may lead to ineffective long-term management of brands,
many firms have made internal branding a top priority, as we noted in Chapter 2. As part of these efforts, they must put a brand
equity management system into place. A brand equity management system is a set of organizational processes designed to improve
the understanding and use of the brand equity concept within a firm. Three major steps help to implement a brand equity management
system: creating brand charters, assembling brand equity reports, and defining brand equity responsibilities. The following subsections
discuss each of these in turn. Branding Brief 8-2 describes how the Mayo Clinic has developed a brand equity measurement and
management system.
BRANDING BRIEF 8-2: Understanding and Managing the Mayo
Clinic Brand
Mayo Clinic was founded in the late 1800s by Dr. William Worral Mayo and his two sons, who later pioneered the “group practice of
medicine” by inviting other physicians to work with them in Rochester, Minnesota. The Mayos believed that “two heads are better
than one, and three are even better.” From this beginning on the frontier, Mayo Clinic grew to be a worldwide leader in patient care,
research, and education and became renowned for its world-class specialty care and medical research. In addition to the original
facilities in Rochester, Mayo later built clinics in Jacksonville, Florida, and Scottsdale, Arizona, during the 1980s. More than 500,000
patients are cared for in Mayo’s inpatient and outpatient practice annually.
In 1996, Mayo undertook its first brand equity study and since then has conducted regular, national qualitative and quantitative
studies. Mayo’s research identifies seven key brand attributes or values, including (1) integration, (2) integrity, (3) longevity, (4)
exclusivity, (5) leadership, (6) wisdom, and (7) dedication. Although some of these values also characterize other high-quality medical
centers, integration and integrity are more nearly unique to Mayo.
In terms of integration, respondents described Mayo as bringing together a wealth of resources to provide the best possible care. They
perceived Mayo to be efficient, organized, harmonious, and creating a sense of participation and partnership. For example, one person
described Mayo as “A well conducted symphony … works harmoniously … One person can’t do it alone … Teamwork, cooperation,
compatibility.”
For integrity, respondents placed great value on the fact that Mayo is noncommercial and committed to health and healing over profit.
One participant said, “The business element is taken out of Mayo. … Their ethics are higher … which gives me greater faith in their
diagnosis.”
Although none of Mayo Clinic’s brand attributes are solely negative, perceptions of exclusivity pose some specific challenges. This
attribute was sometimes described positively, in perceptions that Mayo offers the highest quality care and elite doctors, but inaccurate
beliefs that it serves only the rich and famous and the sickest of the sick were emotionally distancing and made Mayo seem
inaccessible.
In a more recent quantitative study, overall awareness of Mayo Clinic in the United States was 90.2 percent, and a remarkable onethird knew at least one Mayo patient. One of the key questions in the survey asked, “Suppose your health plan or personal finances
permitted you to go anywhere in the U.S. for a serious medical condition which required highly specialized care, to which one
institution would you prefer to go?” Mayo Clinic was the most popular choice, earning 18.6 percent of the responses, compared with
5.0 percent for the next most frequently mentioned medical center. Word-of-mouth has the most influence on these preferences for
highly specialized medical care.
From its research, Mayo Clinic understands that its brand “is precious and powerful.” Mayo realized that while it had an
overwhelmingly positive image, it was vital to develop guidelines to protect the brand. In 1999, the clinic created a brand management
infrastructure to be the “institutional clearing-house for ongoing knowledge about external perceptions of Mayo Clinic and its related
activities.” Mayo Clinic also established guidelines for applying the brand to products and services. Its brand management measures
work to ensure that the clinic preserves its brand equity, as well as allowing Mayo to continue to accomplish its mission:
The Mayo Clinic knows the importance and value of its brand and carefully monitors and manages its image and equity.
Source: Courtesy Mayo Clinic
•
To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical
practice, education and research.
Sources: Thanks to Mayo Clinic’s John La Forgia, Kent Seltman, Scott Swanson, and Amy Davis for assistance and cooperation, including interviews in October
2011; www.mayoclinic.org; “Mayo Clinic Brand Management,” internal document, 1999; Leonard L. Berry and Neeli Bendapudi, “Clueing in Customers,”
Harvard Business Review (February 2003): 100–106; Paul Roberts, “The Agenda—Total Teamwork,” Fast Company, April 1999, 148; Leonard L. Berry and
Kent D. Seltman, Management Lessons from Mayo Clinic: Inside One of the World’s Most Admired Service Organizations (New York: McGraw Hill, 2008).
Brand Charter
The first step in establishing a brand equity management system is to formalize the company view of brand equity into a document,
the brand charter, or brand bible as it is sometimes called, that provides relevant guidelines to marketing managers within the
company as well as to key marketing partners outside the company such as marketing research suppliers or ad agency staff. This
document should crisply and concisely do the following:
•
•
•
•
•
•
•
• Define the firm’s view of branding and brand equity and explain why it is important.
• Describe the scope of key brands in terms of associated products and the manner by which they have been branded and marketed
(as revealed by historical company records as well as the most recent brand audit).
• Specify what the actual and desired equity is for brands at all relevant levels of the brand hierarchy, for example, at both the
corporate and the individual product level (as outlined in Chapter 11). The charter should define and clarify points-of-parity,
points-of-difference, and the brand mantra.
• Explain how brand equity is measured in terms of the tracking study and the resulting brand equity report (described shortly).
• Suggest how marketers should manage brands with some general strategic guidelines, stressing clarity, consistency, and
innovation in marketing thinking over time.
• Outline how to devise marketing programs along specific tactical guidelines, satisfying differentiation, relevance, integration,
value, and excellence criteria. Guidelines for specific brand management tasks such as ad campaign evaluation and brand name
selection may also be offered.
• Specify the proper treatment of the brand in terms of trademark usage, design considerations, packaging, and communications. As
these types of instructions can be long and detailed, it is often better to create a separate Brand or Corporate Identity Style Manual
or guide to address these more mechanical considerations.
Although parts of the brand charter may not change from year to year, the firm should nevertheless update it on an annual basis to
provide decision makers with a current brand profile and to identify new opportunities and potential risks for the brand. As marketers
introduce new products, change brand programs, and conduct other marketing initiatives, they should reflect these adequately in the
brand charter. Many of the in-depth insights that emerge from brand audits also belong in the charter.
Skype’s brand bible, for example, outlines the branding and image of its products and services.13 The document clearly states how
Skype wants to be seen by consumers, how the firm uses its branding to achieve that, and why this is important. It also explains how
Skype’s logo of clouds and the vivid blue color are designed to make clean lines and foster a creative and simple look. The brand bible
explains the “do’s and don’ts” of marketing Skype’s products and services and the dangers for the company image of working outside
the brand guidelines.
Skype’s brand bible provides important guidelines about how the brand should look and behave.
Source: Skype
Brand Equity Report
The second step in establishing a successful brand equity management system is to assemble the results of the tracking survey and
other relevant performance measures for the brand into a brand equity report or scorecard to be distributed to management on a regular
basis (weekly, monthly, quarterly, or annually). Much of the information relevant to the report may already exist within the
organization. Yet it may have been presented to management in disjointed chunks so that no one has a holistic understanding of it. The
brand equity report attempts to effectively integrate all these different measures.14
Contents.
The brand equity report should describe what is happening with the brand as well as why it is happening. It should include all relevant
internal measures of operational efficiency and effectiveness and external measures of brand performance and sources and outcomes
of brand equity.15
In particular, one section of the report should summarize consumers’ perceptions of key attribute or benefit associations, preferences,
and reported behavior as revealed by the tracking study. Another section of the report should include more descriptive market-level
information such as the following:
•
•
•
•
•
•
• Product shipments and movement through channels of distribution
• Retail category trends
• Relevant cost breakdowns
• Price and discount schedules where appropriate
• Sales and market share information broken down by relevant factors (such as geographic region, type of retail account, or
customer)
• Profit assessments
These measures can provide insight into the market performance component of the brand value chain. Management can compare them
to various frames of reference—performance last month/quarter/year—and color code them green, yellow, or red, depending on
whether the trends are positive, neutral, or negative, respectively. Internal measures might focus on how much time, money, and labor
was being spent on various marketing activities.16
Dashboards.
As important as the information making up the brand equity report is the way the information is presented. Thus firms are now also
exploring how best to display the right data to influence marketing decision makers. Top digital agency R/GA, for example, has
created a data-visualization department to reflect the growing importance of presenting information to its clients.17
A number of firms have implemented marketing dashboards to provide comprehensive but actionable summaries of brand-related
information. A marketing dashboard functions just like the dashboard of a car. Although they can be valuable tools for companies, if
not designed and implemented properly dashboards also can be a big waste of time and money. An early leader on the subject, Pat
LaPointe has identified four success factors in developing a successful dashboard:18
•
•
•
•
1. Senior-level executives must devote the necessary resources to its development and stay actively involved—delegating the task
to lower levels of the organization rarely pays off.
2. The investment in resources doesn’t stop with launch. Additional resources are required to gather, align, and properly interpret
the right information.
3. Graphics and analytics matter. Excel may be cheap and easy to use, but it can also constrain thinking.
4. Executives should focus on what can be measured today but also learn more about how to improve the dashboard in the future.
IT company Unisys successfully developed a dashboard that covered all its geographical areas and applied to all its divisions and
business units. Data was collected from a variety of sources—brand tracking, CRM programs, tradeshows, media reports, satisfaction
studies, and Web logs—offering views for all levels right up to the CMO.19
To provide feedback on marketing performance to boards of directors, former Harvard Business School faculty Gail McGovern and
John Quelch advocate quarterly tracking reports of the three or four marketing or customer-related metrics that truly drive and predict
the company’s business performance—the behavioral measures specific to a company’s business model.20 As an example, they note
how the board of casino operator Harrah’s focuses on three metrics: share of its customer’s gaming dollars (share of wallet), loyalty
program updates (an indicator of increased concentration of a customer’s gaming at Harrah’s), and percent of revenue from customers
visiting more than one of Harrah’s 30 casinos (an indicator of cross-selling). To support its tracking, Harrah’s has spent $50 million
annually on a customer information system.
Harrah’s has an extensive customer information system that helps the company track key metrics.
Source: Craig Moran/Rapport Press/Newscom
Similarly, Ambler and Clark offer three recommendations.21 First, marketers must work with their CFO to develop marketing
dashboards and to shift metrics and forecasting responsibilities to the finance department. Second, marketers should develop with each
agency a detailed brief with measurable objectives and a results-driven compensation component (for agencies). Third, marketers need
to dedicate extra time to securing buy-in from colleagues on their business model, strategy, and metrics.
In terms of choosing specific metrics for a brand equity report or dashboard, Ambler and Clark offer three additional guidelines.22
First, marketers must select metrics that suit their business model and strategy. Two, they need to balance their metrics portfolio
across audiences, comprehensiveness, efficiency, and other considerations. Three, marketers should review and modify their metrics
portfolio as their needs change.
With advances in computer technology, it will be increasingly easy for firms to place the information that makes up the brand equity
report online, so managers can access it through the firm’s intranet or some other means. For example, early research pioneer NFO
MarketMind developed a brand management database system that integrated continuous consumer tracking survey data, media weight
(or cost) data, warehouse sales and retail scan data, and PR and editorial content.
Brand Equity Responsibilities
To develop a brand equity management system that will maximize long-term brand equity, managers must clearly define
organizational responsibilities and processes with respect to the brand. Brands need constant, consistent nurturing to grow. Weak
brands often suffer from a lack of discipline, commitment, and investment in brand building. In this section, we consider internal
issues of assigning responsibilities and duties for properly managing brand equity, as well as external issues related to the proper roles
of marketing partners. The Science of Branding 8-2 describes some important principles in building a brand-driven organization.
THE SCIENCE OF BRANDING 8-2: Maximizing Internal Branding
Internal branding doesn’t always receive as much time, money, or effort as external branding programs receive. But although it may
require significant resources, it generates a number of benefits. Internal branding creates a positive and more productive work
environment. It can also be a platform for change and help foster an organization’s identity. For example, after employee turnover
became too high, Yahoo! created the “What Sucks” program in which employees could send their concerns straight to the CEO.
Branding expert Scott Davis offers a number of insights into what it takes to make a brand-driven organization. According to Davis,
for employees to become passionate brand advocates, they must understand what a brand is, how it is built, what their organization’s
brand stands for, and what their role is in delivering on the brand promise. Formally, he sees the process of helping an organization’s
employees assimilate the brand as three stages:
•
•
•
1. Hear It: How do we best get it into their hands?
2. Believe It: How do we best get it into their heads?
3. Live It: How do we best get it into their hearts?
Davis also argues that six key principles should guide the brand assimilation process within an organization, offering the following
examples.
•
•
•
•
•
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1. Make the brand relevant. Each employee must understand and embrace the brand meaning. Nordstrom, whose brand relies on
top-notch customer service, empowers sales associates to approve exchanges without manager approval.
2. Make the brand accessible. Employees must know where they can get brand knowledge and answers to their brand-related
questions. Ernst & Young launched “The Branding Zone” on its intranet to provide employees easy access to information about its
branding, marketing, and advertising programs.
3. Reinforce the brand continuously. Management must reinforce the brand meaning with employees beyond the initial rollout of
an internal branding program. Southwest Airlines continually reinforces its brand promise of “a symbol of freedom” through
ongoing programs and activities with a freedom theme.
4. Make brand education an ongoing program. Provide new employees with inspiring and informative training. Ritz-Carlton
ensures that each employee participates in an intensive orientation called “The Gold Standard” that includes principles to improve
service delivery and maximize guest satisfaction.
5. Reward on-brand behaviors. An incentive system to reward employees for exceptional support of the brand strategy should
coincide with the roll-out of an internal branding program. Prior to its merger with United, Continental Airlines rewarded
employees with cash bonuses each month that the airline ranked in the top five of on-time airlines.
6. Align hiring practices. HR and marketing must work together to develop criteria and screening procedures to ensure that new
hires are good fits for the company’s brand culture. Pret A Manger sandwich shops has such a carefully honed screener that only 20
percent of applicants end up being hired.
Part of the success of Nordstrom’s legendary customer service is that it empowers employees to take brand-consistent actions.
Source: REUTERS/Rick Wilking
Davis also emphasizes the role of senior management in driving internal branding, noting that the CEO ultimately sets the tone and
compliance with a brand-based culture and determines whether proper resources and procedures are put into place.
Sources: Scott M. Davis, Building the Brand-Driven Business: Operationalize Your Brand to Drive Profitable Growth (San Francisco, CA: Jossey-Bass, 2002);
Scott M. Davis, “Building a Brand-Driven Organization,” in Kellogg on Branding, eds. Alice M. Tybout and Tim Calkins (Hoboken, NJ: John Wiley & Sons,
2005); Scott M. Davis, The Shift: The Transformation of Today’s Marketers into Tomorrow’s Growth Leaders (San Francisco, CA: Jossey-Bass, 2009).
Overseeing Brand Equity.
To provide central coordination, the firm should establish a position responsible for overseeing the implementation of the brand
charter and brand equity reports, to ensure that product and marketing actions across divisions and geographic boundaries reflect their
spirit as closely as possible and maximize the long-term equity of the brand. A natural place to house such oversight duties and
responsibilities is in a corporate marketing group that has a senior management reporting relationship.
Scott Bedbury, who helped direct the Nike and Starbucks brands during some of their most successful years, is emphatic about the
need for “top-down brand leadership.”23 He advocates the addition of a chief brand officer (CBO) who reports directly to the CEO of
the company and who:
•
•
•
• Is an omnipresent conscience whose job is to champion and protect the brand—the way it looks and feels—both inside and
outside the company. The CBO recognizes that the brand is the sum total of everything a company does and strives to ensure that
all employees understand the brand and its values, creating “brand disciples” in the process.
• Is an architect and not only helps build the brand but also plans, anticipates, researches, probes, listens, and informs. Working
with senior leadership, the CBO helps envision not just what works best for the brand today but also what can help drive it forward
in the future.
• Determines and protects the voice of the brand over time by taking a long-term (two to three years) perspective. The CBO can
be accountable for brand-critical and corporate-wide activities such as advertising, positioning, corporate design, corporate
communications, and consumer or market insights.
Bedbury also advocates periodic brand development reviews (full-day meetings quarterly, or even half-day meetings monthly) for
brands in difficult circumstances. As part of a brand development review, he suggests the following topics and activities:24
•
•
•
•
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• Review brand-sensitive material: For example, review brand strength monitors or tracking studies, brand audits, and focus
groups, as well as less formal personal observations or “gut feelings.”
• Review the status of key brand initiatives: Because brand initiatives include strategic thrusts to either strengthen a weakness in the
brand or exploit an opportunity to grow the brand in a new direction, customer perceptions may change and marketers therefore
need to assess them.
• Review brand-sensitive projects: For example, evaluate advertising campaigns, corporate communications, sales meeting
agendas, and important human resources programs (recruitment, training, and retention that profoundly affect the organization’s
ability to embrace and project brand values).
• Review new product and distribution strategies with respect to core brand values: For example, evaluate licensing the brand to
penetrate new markets, forming joint ventures to develop new products or brands, and expanding distribution to nontraditional
platforms such as large-scale discount retailers.
• Resolve brand positioning conflicts: Identify and resolve any inconsistencies in positioning across channels, business units, or
markets.
Even strong brands need careful watching to prevent managers from assuming it’s acceptable to “make one little mistake” with brand
equity or to “let it slide.” A number of top companies like Colgate-Palmolive, Canada Dry, Quaker Oats, Pillsbury, Coca-Cola, and
Nestlé Foods have created brand equity gatekeepers for some or all their brands at one time.25 Branding Brief 8-3 contains a checklist
by which firms can assess their marketing skills and performance.
One of senior management’s important roles is to determine marketing budgets and decide where and how to allocate company
resources within the organization. The brand equity management system must be able to inform and provide input to decision makers
so that they can recognize the short-term and long-term ramifications of their decisions for brand equity. Decisions about which
brands to invest in, and whether to implement brand-building marketing programs or leverage brand equity through brand extensions
instead, should reflect the current and desired state of the brand as revealed through brand tracking and other measures.
Organizational Design and Structures.
The firm should organize its marketing function to optimize brand equity. Several trends have emerged in organizational design and
structure that reflect the growing recognition of the importance of the brand and the challenges of managing brand equity carefully.
For example, an increasing number of firms are embracing brand management. Firms from more and more industries—such as the
automobile, health care, pharmaceutical, and computer software and hardware industries—are introducing brand managers into their
organizations. Often, they have hired managers from top packaged-goods companies, adopting some of the same brand marketing
practices as a result.
BRANDING BRIEF 8-3: How Good Is Your Marketing? Rating a
Firm’s Marketing Assessment System
Famed former London Business School professor Tim Ambler has a wealth of experience in working with companies. He notes that in
his interactions, “most companies do not have a clear picture of their own marketing performance which may be why they cannot
assess it.” To help companies evaluate if their marketing assessment system is good enough, he suggests that they ask the following 10
questions—the higher the score, the better the assessment system.
1.
Does the senior executive team regularly and formally assess marketing performance?
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•
•
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•
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a. Yearly—10
b. Six-monthly—10
c. Quarterly—5
d. More often—0
e. Rarely—0
f. Never—0
2.
What does the senior executive team understand by “customer value”?
•
•
•
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a. Don’t know. We are not clear about this—0
b. Value of the customer to the business (as in “customer lifetime value”)—5
c. Value of what the company provides from the customers’ point of view—10
d. Sometimes one, sometimes the other—10
3.
How much time does the senior executive team give to marketing issues?
•
•
•
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a. >30%—10
b. 20–30%—6
c. 10–20%—4;
d.