ANAGERS AROUND THE WORLD ARE MAKING MULTI-MILLIONDOLLAR DECISIONS ON INCOMPLETE INFORMATION ABOUT WHAT MAKES THEIR BRAND PERFORM ORNOT PERFORM. PATRICK COLLINGS EXPLORES A NEW MODEL THAT FILLS IN THE GAPS.
(SEE BRAND VALUE CREATOR MODEL ON PAGE 34)
The Brand Value
uch is written about brand
positioning and communication butneither is worth much if the brand owner is unable to deliverthe brand to the intended market as promised. Often, to reach themarket, brands have to navigate a myriad production, logistical, legaland competitive challenges that can negate a brand’s promise andperformance.Despite the bedrock importance of brand delivery it has largely been ignored in traditional market research, which has tended to focuson survey numbers such as advertisement recall and overall customersatisfaction, as well as purchase intent and behavioural information. While these statistics are indicative of the likely performance of a brand,they fail to fully address whether the brand will be purchased.Simply stated, brand owners and managers around the worldare making multi-million dollar decisions every day on incompleteinformation about what makes their brand perform or not perform.In seeking to address this, Jannie Hofmeyr, Director of Innovationin global research house Synovate’s brand and communication practice,has developed a new research model known as the Brand Value Creator. The model takes a more holistic approach to brand research and looksat all the important factors that inﬂuence and affect consumers, and notjust the marketing communication.In looking at the model, I am going to largely skirt its empiricalelement (consumer psychology in opinion forming and decision making)and its predictive element (the translation of brand equity measures intomarketing investments and sales performance) in order to concentrateon its holistic focus, which highlights the type of research informationbrand managers should be factoring into their decision-making process. The Brand Value Creator model moves left to right through the broadstages of branding and selling and on to modelling and forecasting.Starting at the left, the model identiﬁes three areas as key in the creationof brand value.
The ﬁrst important area is in
the development of a superiorbusiness process that enhances the customer experience.
Examples of innovative business process include Dell’s logisticalinfrastructure which cut out the middle man and delivered made-to-order computers to the customer. Toyota also built very reliable carsthrough its “just in time” and “zero defects” manufacturing systems.“These brands also created value in other ways. But they illustratethe point that business engineering is one of the keys to brand valuecreation. And a key point is this: the business processes they pioneeredled to an enhanced customer experience. In other words, the new business process didn’t just create greater efﬁciency or better margins.It also improved the customer’s experience of the brand – and so, builtthe brand,” Hofmeyr said. The reverse is, however, also true. Poor internal processes can hurtbrands and their bottom line. Sony’s production delays in releasing itsPlayStation 3 gaming console allowed Microsoft and Nintendo to gainmarket share for their competing game consoles. Sony is now trailing itscompetitors and having to cut prices to catch up.
The second area where
brand value can be created is themarketing environment and relates to how brand valuecan be created in the market place through marketdominance.
Hofmeyr offers the example of Coca-Cola as a brand thatdominated the soft drink retail space to the detriment of its competitors.“There is probably no company that has understood [marketdominance] better through history than The Coca-Cola Company. They designed the ﬁrst stand-alone fridges because they understoodthat delivering the brand cold would be the key to creating impulseconsumption,” Hofmeyr says.