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Brand Value & Pricing

Why Brands Drive Financial And Business Results

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Brands Financial Impact

We are often asked about the impact of brands on financial, business performance and growth. Enough research has been conducted on this over time throughout the world that one could write and entire book on this subject. I will not do that here. But I will be a bit more detailed than I have in the past about this.  The bottom line is that strong brands have a very strong positive impact on financial and other business results. Following are data points on some of the ways in which this occurs.

A recent Nielsen study demonstrated that strong brands command higher loyalty rates. Consider the lifetime value of more loyal consumers. The study also showed that strong brands generate three times more market share than brands with moderate reputations.

Millward Brown Optimor reported that its BrandZ Top Most Valuable Global Brands significantly outperformed the S&P 500 in 2013.

In another study, Feng Jui Hsu, Tsai Yi Wang and Mu Yen Chen examined the relationship between brand value and stock performance using Interbrand’s Global 100 Brands ranking. The brand portfolio outperformed the S&P index in various holding periods and generated a significantly positive risk adjusted alpha.

An earlier study (for the period 1994-200) reported by Thomas J. Madden, University of South Carolina, Frank Fehle, Barclays Global Investors and Susan Fournier, Boston University, found that firms that have strong brands create value for their shareholders by yielding larger returns with less risk than industry benchmarks.

Another study conducted by Andrea Guerrini, PhD, assistant professor at the University of Verona and Francesco Zaffin, management consultant, looked at the top 60 brands in Interbrand’s annual ranking between 2006 and 2010 and identified positive correlations between brand value and share prices primarily in the intangible product categories such as business and financial services. 

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Common Brand Problems

The Twenty Most Common Brand Problems

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Brand Strategy Problems

After thirty years experience in brand management and marketing, I have directly advised more than 150 brands and indirectly advised (through educational workshops, Just Ask responses, pro bono work, etc.) more than twice that number. That is to say, I have dealt with many brands’ problems in one way or another. Here is my observation of the twenty most common brand problems.

  1. No one in the organization has a solid understanding of the brand’s consumers or their needs.
  2. The brand does not stand for anything and it does not promise anything. It is just a name and a logo.
  3. The brand touts a clichéd, unsubstantiated, meaningless point of difference (such as, we are the quality leader or the service leader or the innovation leader or, worst of all, just the leader).
  4. Brand messaging is helter-skelter. That is, it varies by audience, message vehicle, campaign, etc.
  5. A crisis occurs that reinforces that the brand was never really serious about its promise.
  6. The brand becomes a “whipping boy” for some social issue. Special interest groups that disagree with the brand’s policies target the brand for attack.
  7. There is little to no awareness of the brand in the marketplace. This could be because it is a start-up brand or because it is new to the specific geographic market.
  8. The brand’s less than stellar perceptions are due to product problems. The product may have quality problems or be inferior to its competitors’ products in other ways.
  9. Internal politics and organizational dysfunction lead to brand and customer service dysfunction.
  10. The brand and the organization behind it have rested on their laurels for far too long, not keeping up with consumer needs and industry innovations.
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Tribal Branding

Tribal Brand Strategy

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Tribal Brand Strategy

With declining trust in traditional institutions, people today are increasingly using brands and consumption to express their identity and signal their values. Tribes come together under what they imagine are a shared set of values or emotions. An astute marketer can often help the tribe to link those shared values or emotions to its brand and its products or services.

The first step is to understand what the group values, what its rituals are and how people in the group behave when they are together. It is also important to understand how the tribe views the world and their place in it. This includes uncovering their beliefs and their hopes, fears, anxieties and aspirations. This requires intense ethnographic research – interviews, observation, and even spending significant time interacting with the group. From this, you discern patterns. Once you have refined and validated the group patterns, you can then determine how your brand might be able to link to or reinforce one or more of those patterns. One such way is through brand storytelling.

Brands that have the potential to become tribal brands (or that already are tribal brands) include Harley-Davidson, FOX News, Patagonia, Star Trek, Apple, Tesla Motors and MINI Cooper. It is important for people not only to have shared values and an intense interest in using the brand to signal those values, but also to seek each other out and share at least some aspect of the brand experience with each other.

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Place Branding

Place Branding Guide

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Place Branding Strategy

According the World Travel and Tourism Council, travel and tourism “contributes 9.5 percent to the global economy in 2013…and could generate as many as 5.1 million jobs by 2015 in the G20 economies.” When one considers that businesses, residents and event and meeting planners also choose one place over another, it is no wonder that cities, regions and countries are branding themselves in earnest.

Places are some of the most interesting things to brand. This phenomenon has been labeled “place branding,” “geo-branding” and “destination marketing” among other labels. In some respects, branding places is no different than branding anything else. Finding the most powerful and unique image for the place (“unique value proposition” or “brand position”) is the most important activity. After that, building awareness is next most important. Both of these activities assume that the requisite research has been done with the most advantageous and receptive target audiences.

Branding municipalities is an interesting and complex activity. The target audiences are myriad and disparate, including at least the following:

  • Residents and potential residents
  • Businesses and potential businesses
  • Tourists/visitors
  • Meeting and an event planners (including convention planners and major sporting event organizers)
  • Transients (people passing through on their way to somewhere else)
  • Corporate commercial traffic

Each of these audiences has its own distinct issues and needs. And, there are typically separate place-based organizations established to market to each of these market’s needs – visitors & convention bureaus, economic development councils, business improvement districts, etc. The stakeholder groups mushroom into a large mix of potentially competing points of view when one adds mayor’s offices and district, county, provincial, state and regional entity executives and business, cultural institution and sports team leaders. This is why carefully orchestrating a branding project and facilitating consensus across all stakeholder groups is critical to a successful place branding effort. That is also why a place branding effort often takes much longer than a comparable product or organization branding effort.

Here is what tends to be important to each major audience:

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Brand Strategy

Building A Likable Brand

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Likeable Brand Strategy

Ultimately, you want people to like your brand. So, what makes a brand likable? Think of a brand as if it were a person. And then think about what makes people likable. Here is my list of attributes that make people likable:

They are secure and self-confident

They are honest and have integrity

They keep their promises and are reliable

They are genuine, sincere and authentic

They are positive, happy and optimistic

They smile

They are not too serious, they laugh and they make people laugh

They ask questions and they truly listen to and try to understand the answers

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