Branding Strategy Insider helps marketing oriented leaders and professionals like you build strong brands. BSI readers know, we regularly answer questions from marketers everywhere. Today we hear from Maria, a Marketing VP in Australia writes…
I have a question for you relating to the correlation between brand value and share price. Do you think that marketers could aim at increasing share price directly through marketing campaigns? I recognize that PR definitely can but I do not understand where marketing fits in.
Maria, thanks for asking. Indirectly, brand marketing affects share price, especially over time. For instance, by building brand awareness or reinforcing a unique and compelling brand benefit, marketing can increase three items that can lead to higher share price in the future:
• Customer loyalty
• Product/service sales
• Ability to charge a price premium
Strong brands also help attract and retain competent employees, sometimes at a salary discount, if the brand’s reputation is strong enough. This, in turn should lead to increased sales and profitability in the long run.
I think it is overly ambitious to think that a brand marketing campaign could increase share price in the short term unless its message was similar to that of a press release targeted at the financial community. But, that would be more of a financial analyst campaign then a traditional brand marketing campaign.
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One comment
David Koopmans
February 6, 2009 at 5:26 pm
I think you’re being optimistic about the value of brand advertising, even in the cautious way you put it…
I wouldn’t want to be the marketing exec pitching the idea of brand advertising to increase share price. In todays’ marketing environment where people are cynical about advertising it’s far more powerful to have others tell you’re story, through PR, word of mouth etc. There are FAR better ways to spend your budget.
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