Brand Importance & Measurement

The Economy is Improving.  New Products are Hitting Markets.  Competition is Getting Steeper.  Too Many Overlook A Strong Brand as a Competitive Advantage

The confluence of Consumer Electronics Show (CES), the comments of a CEO and a CES party, and a brand new academic year have one raised the importance of Brand as a core element of market leadership, particularly leadership in technology markets.  How do these elements come together?

According to Dan Nenni on his blog on SemiWiki points out that there were 36 different tablet PC brands on display at CES.  Clearly there will be consolidation but the challenge facing every one of these entries is how do you stake-out a niche?  How do you differentiate from Apple?  Clearly brand, sometimes defined as the “promise” other times defined as an “individual’s experience” will be a huge determinant of success. 

Apple already owns the “innovation”  and “leader” brand.  The challenge for each of the 36 entires (remember that Apple didn’t even go to CES) is to “own” a compelling experience to compete the market leader.

Also at CES, the CEO of major technology company was heard to expound that, “it is all about the numbers.”  In other words, execution is king.  Nothing else matters. What makes this innocuous comment fascinating is that it was made at a party sponsored by one of the company’s technology partners who is making a huge push to increase interest in its role as an alternative source for an extremely sensitive and important technology service.  What unfortunately was overlooked was that the partner had, indeed, increased interest in their service because the CEO was at the event.  He was already “aware” of the partner and was now demonstrating his interest by allocating his valuable time to be in attendance.  In other words, he was experiencing his host’s brand despite his assertion that it was “all about the numbers.”

One of the major reason company’s claim that they don’t invest in brand is that they can not measure the return.  One of the core concepts that will be taught in brand leadership course that I’ll be teaching this quarter is that brand ROI can, indeed, be measured.  There are a number of brand measurement systems.  It is only question of the desired level of sophistication and budget constraints.

Perhaps one of the simplest and most cost efficient brand measurement systems is Kevin Lane Keller’s Brand Report Card.  Keller has isolated 10 brand attributes common to top brands around the globe and provided a methodology for companies to measure the strengths of these attributes on their brands.

David Aaker has developed a somewhat more sophisticated system for measuring Brand Equity.  Aaker’s system looks at five categories … awareness, loyalty, perceived value, perceived quality and market behavior … and invites companies to come up with their own equity index based on their specific needs.

The most sophisticated measurement systems assign a dollar value to the brand.  These systems call upon accounting principles to assign a brand valuation.  Methodologies cover cost, market, income and brand strength assessment approaches. The most widely accepted of these is the brand strength assessment approach because it accounts for a number of business variable.

The economy is improving and consumers have more money to spend. How they allocate their funds will be terminated by the  promise of the experience offered.  A number of new products are coming to market in all categories.  Winners and losers will be determined by how companies differentiate their promises and experiences from their competitors.

Brand, in other words, will play increasingly larger role in a company’s success.  The extent to which management choses to recognize this fact and act upon may largely determine their company’s success at this time next year.

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About businesspracticum

Chuck Byers is the Managing Director of Business Practicum & Adjunct Professor at Santa Clara University
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