Corporate Brand Advertising Dean M. Krugman, Ph.D., Professor Jameson L. Hayes, Doctoral Student

1. Corporate Brand Advertising Dean M. Krugman, Ph.D., Professor Jameson L. Hayes, Doctoral Student

2. Overview • Brand Promise and Value • Brand Contact • Advertising as an Investment • Advertising and Equity Development • Brand Equity Creates Value • Making Equity Tangible

3. Brand • A name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. • May identify one item, a family of items, or all items of that seller.

4. Landor and Associates • Focus on creating recognizable brand that drives business • “Start with your brand promise.” • “A brand is an experience.”

5. Brand is a Promise (and Path) The brand’s promise determines how every facet of the organization-- product development, manufacturing, marketing, distribution – work to fulfill that promise. Philip Kotler, Branding

6. Interbrand Valuation • Market leadership • Trends • Diversification • Support • Stability

7. Interbrand World’s Most Valuable Brands

9. Brand Contact “Any and all messages, incentives, activities or methods by which a customer consumer or prospect comes in contact with the brand and leaves some trace of brand information and impact.” Shultz and Walters, Measuring Brand Communication ROI

10. Times Square is the Theme Park of Brands CBS News

11. Times Square in Different Context

21. But Not All Contacts Are Positive

22. “Toyota Sinks in Quality Survey After Recalls.” Bloomberg Business Week headline • Toyota’s worst score in J.D. Power & Associates new vehicle quality survey • Toyota went from a perennial top brand to below the national average. • High scoring brands have the highest customer retention.

23. Negative Contact Information Study: Kids' meals loaded with fat, salt and calories Joan Lowy | Associated Press , August 4, 2008

24. Advertising and Marketing Communication are and Investment!

25. Advertising Is An Investment Helps Develop Equity! Every ad (program element) should be thought of as a contribution to the complex symbol which is the brand message. David Ogilvy

26. Advertising is an Intangible Asset Many of the most important assets of a firm (people and brand names) are “intangible assets” that are not capitalized and do not appear on a balance sheet. Depreciation is not assessed, on “intangible assets,” and maintenance must come out of cash flow or short-term profits. David Aaker Managing Brand Equity

27. Advertising is an Intangible Asset Everyone understands that even in bad times a factory or plant must be maintained, in part because of the depreciation term in the income statement and also because the needs are usually visible. An intangible asset, by contrast is more vulnerable, and its “maintenance” is more easily neglected.

28. Lets Make it More Tangible!

29. Brand Equity Creates Brand Value!

30. What is Brand Equity? Brand equity is a set of brand assets and liabilities linked to a brand that add to or subtract from the value provided by a product to a firm and that firm’s customers. David Aaker Managing Brand Equity

31. Understanding Equity or Value Added Changes in the value added by the brand name should be as routine a part of annual reviews and plans as changes in brand volume. James C. Crimmins, Better Measure and Management of Brand Value .

32. Can We Measure The Value Added By a Brand Name? If my brand and a competitor’s are equally desirable, when mine costs $110 and my competitor’s costs $100, the amount of value added by my brand name relative to my competitor’s: $110 — 1 = 10% $100 James C. Crimmins, Better Measurement and Management of Brand Value .

33. Aaker’s Big Ten Asset Areas David Aaker, Managing Brand Equity

34. Brand Loyalty Loyal customer base reduces vulnerability to competitive action. • Price Premium • How much more are you willing to pay? • Satisfaction/Loyalty • satisfied? buy again? recommended? .

35. Perceived Quality and Leadership • Perceived Quality • high, average, low? • best, average? • Leadership/Popularity • leading brand, growing? • Innovative?

36. Associations/Differentiation Image dimensions that are unique to product or product class. • Value • good value for the money • reasons to buy over your competitors

37. Associations/Differentiation • Brand personality – brand as person. Link to emotional/self expressive. Differentiation when limited physical difference Social consumption -- Is brand unique? Interesting? clear image of user?

38. Associations/Differentiation • Organizational Associations -- brand as organization. • I trust McDonalds and like it more because of Ronald McDonald House • I think Patagonia makes quality clothing and is environmentally friendly

39. Brand Awareness • Brand Awareness — Brand salience Brand must enter evoked set as a reasonable alternative. - recall - top of mind - recognition

40. Market Behavior • Market Share • Market Price and Distribution Coverage – relative market price that is not deep discounted. • relative product price • distribution

41. You Can Keep Score of All Ten Annually Price Premium Satisfaction/Loyalty Perceived Quality Leadership/Popularity Value Brand Personality Organizational Associations Brand Awareness Market Behavior Market Price & Distribution Coverage

42. Another Method to Measure Equity

43. What Do We Mean By “Added Value?” From the buyer’s/user’s perspective, the value added by a brand name has three dimensions: 1. The amount of value added by the brand name in the category. 2. The breadth of the added value. The range of product categories in which the name has value. 3. The content of the added value. The specific qualities that are implied by the brand name. These qualities are not usually visible at the time of purchase. For example, service and reliability are reasons why brand name adds value. James C. Crimmins, Better Measurement and Management of Brand Value

44. Can We Measure the Value Added By a Brand Name? We often measure the content (qualities) implied by the brand name. We rarely measure the amount and the breadth. The amount of value added can be measured if we note three basic issues: 1. Value added is a relative concept, “Value added to what?” 2. Brand value is abstract and needs to be removed from such factors as special pricing, and special promotions, which only serve to cloud the issue. 3. The metric which is most understandable for value added is dollars.

45. Equity Exercise • Select one of your products or services in one of your markets. • Product or service? • Market? • List content of value added. Specific qualities implied by brand name. Such qualities may or may not be visible at time of purchase (e.g. service, support, reliability).

46. Equity Exercise Continued • Content of value added? • Better, worse or same as competition? Why? • Compared to last year? • Division Breadth. Compared to other products and services, does the product benefit and contribute more, less, or the same to the brand name? Compared to last year, is the breadth better, worse or the same?

47. Equity Exercise Continued • Amount of Breadth. Can you estimate the amount on the basis of price? • Compared to last year, is the amount better, worse or the same?

48. Lintas Equity Audit • Brand Awareness • Market Share, Price-elasticity, share of voice • Brand Sensitivity – importance of brand to other factors in purchase, price, package size, model • Assumed Leadership – customer perception

49. Lintas Equity Audit • Consistency of brand’s communication over time • Image, attribute ratings, rankings • Distribution, pricing, product quality, product innovation • Brand Loyalty – proportion of people who buy it (regularly?)

50. Ownership/ Market Power Promise/ Trust Image/ Meaning Brand Negotiation/ Collaboration Contact Valuation