Content area
Full Text
What is a stronger brand name: Kodak, American Express, Mercedes, Ford or IBM? Why is a brand strong or weak? How do brand strength levels change over time? Why? How do brand strengths vary by country and markets and why?
Such questions are fascinating and also practical. Most businesses, if they measure brand equity at all, restrict their measures to brands in the immediate product class and market of interest. Expanding the perspective to include multiple product classes and markets can have significant practical value in that it can enhance a firms capability to manage a portfolio of brands and markets, benchmark against the best, and develop a valid brand equity measurement system.
Managing a Portfolio of Brands and Markets-Many organizations offer a number of brands across a variety of markets. If these brands are managed separately and independently or on an ad hoc basis, overall resource allocation among the brands may be less than optimal. For example, if Grand Metropolitan, which owns a host of worldwide brands including J&B, Bailey's, Smirnoff, Pillsbury, Green Giant, Hagen-Dazs, and Burger King, does not treat its brands and their markets as a cohesive portfolio, then strategic decisions made for the benefit of individual brands might in the end hurt the company's overall performance.
Good management of a portfolio of brands and markets starts with having common measures of performance. Of course, well-developed and accepted financial measures such as sales, cost, margins, profit, and ROA usually dominate brand objectives and performance measures. However, these measures tend to be short term and to provide little incentive for investment in brand building. Also needed are brand equity measures that can be used to evaluate the brand-building activities of managers in different product markets. Which managers have been successful at strengthening their brand and which have presided over a decline in brand health?
Benchmarking against the Best-Benchmarking is common when undertaking cost improvement programs. Why not in branding? Too often managers believe that their positioning alternatives are restricted to what has always been done in their category. Considering brands in other categories, some of which may share some common characteristics and challenges, can suggest new positioning options. The observation that Ford increased its perceived quality, and an analysis of how it was...