BRANDS AND BRANDING

OTHER ECONOMIST BOOKS
Guide to Analysing Companies
Guide to Business Modelling
Guide to Economic Indicators
Guide to the European Union
Guide to Financial Markets
Guide to Management Ideas
Numbers Guide
Style Guide
Dictionary of Business
Dictionary of Economics
International Dictionary of FinanceBusiness Ethics
Business Strategy
China’s Stockmarket
E-Commerce
E-trends
Globalisation
Successful Innovation
Successful Mergers
Wall Street
Essential Director
Essential Finance
Essential Internet
Essential Investment
Pocket Asia
Pocket Europe in Figures
Pocket World in Figures

BRANDS AND BRANDING
Rita Clifton and John Simmons
withSameena Ahmad
Tony Allen
Simon Anholt
Anne Bahr Thompson
Patrick Barwise
Tom Blackett
Deborah Bowker
Chuck Brymer
Deborah Doane
Kim Faulkner
Paul Feldwick
Steve Hilton
Jan Lindemann
Allan Poulter
Shaun Smith

THE ECONOMIST IN ASSOCIATION WITHPROFILE BOOKS LTD
Published by Profile Books Ltd
58A Hatton Garden, London ec1n 8lx
Copyright © The Economist Newspaper Ltd 2003
Text copyright © Sameena Ahmad, Tony Allen, Simon Anholt,
Anne Bahr Thompson, Patrick Barwise, Tom Blackett, Deborah Bowker,
Chuck Brymer, Rita Clifton, Deborah Doane, Kim Faulkner, Paul Feldwick,
Steve Hilton, Jan Lindemann, Allan Poulter, John Simmons, Shaun Smith 2003
All rights reserved. Without limiting the rights under copyright reserved above, nopart of this publication may be reproduced, stored in or introduced into a retrieval
system, or transmitted, in any form or by any means (electronic, mechanical,
photocopying, recording or otherwise), without the prior written permission of boththe copyright owner and the publisher of this book.
The greatest care has been taken in compiling this book.
However, no responsibility can be accepted by the publishers or compilers
for the accuracy of the information presented.
Where opinion is expressed it is that of the author and does not necessarily coincidewith the editorial views of The Economist Newspaper.
Typeset in EcoType by MacGuru
info@macguru.org.uk
Printed and bound in Great Britain by
Creative Print and Design (Wales), Ebbw ValeA CIP catalogue record for this book is available
from the British LibraryISBN 1 86197 664 x

Contents
The authorsvii

Preface
Patrick Barwise

xii

Introduction
Rita Clifton

1

Part 1 The case for brands
1 What is a brand?
Tom Blackett
2 The financial value of brands
Jan Lindemann
3 The social value of brands
Steve Hilton
4 What makes brands great
Chuck Brymer
Part 2 Best practice in branding
5 Brand positioning and brand creation
Anne Bahr Thompson
6 Brand experience
Shaun Smith
7 Visual and verbal identity
Tony Allen and John Simmons
8 Brand communications
Paul Feldwick
9 The public relations perspective on branding
Deborah Bowker
10 Brand protection
Allan Poulter
Part 3 The future for brands
11 Globalisation and brands
Sameena Ahmad
12 An alternative perspective on brands: markets and morals
Deborah Doane

11
13
27
47
65

77
79
97
113
127
143
157

169
171
185

v

BRANDS AND BRANDING

13 Branding in South-East Asia
Kim Faulkner
14 Branding places and nations
Simon Anholt
15 The future of brands
Rita Clifton
Index

vi

199
213
227

242

The authors
Rita Clifton is a leading practitioner, author and commentator on
brands and branding, and has worked with many of the world’s
most successful companies. After graduating from Cambridge, shespent her early career in advertising, becoming vice-chairman andstrategic director at Saatchi & Saatchi. A frequent speaker at conferences around the world, she is also a regular contributor on cnn andthe bbc and to all the major broadsheets and business magazines.
Since 1997 she has been ceo and then chairman at Interbrand, a
global brand consultancy, and she was the editor of its recent book
The Future of Brands.
John Simmons pioneered the discipline of verbal identity and has consulted for brands around the world such as Guinness, Lever Fabergéand Air Products. He is a consultant and author, and his two books We,
Me, Them & It and The Invisible Grail have become widely valued as
authoritative and engaging texts on the role of language in branding.
Previously he was a director of Newell and Sorrell and then of Interbrand, where he was verbal identity director and led major brand programmes for companies such as Royal Mail and Waterstone’s.
Sameena Ahmad is a business correspondent with The Economist, who
has written about marketing and brands. Formerly based in New Yorkand London, she now covers Asian business from Hong Kong.
Tony Allen graduated from Cambridge University with a degree inPhysical Anthropology. He then joined McCann-Erickson where heworked on some of the agency's biggest accounts, and was involved inlaunching Diet Coke into the UK. In 1985 he joined corporate identity
company Newell and Sorrell, known for its work with such clients as
British Airways and Waterstone's the book sellers. He set up the firm’s
office in Amsterdam in 1995 where he worked on a number of crossborder merger projects including those for PriceWaterhouse and Coopers & Lybrand and Pharmacia and Upjohn. Following the purchase of
Newell and Sorrell by Interbrand in 1997, he returned to London to
become the joint managing director of the new company in 1999 andthen its CEO in 2002.

vii

BRANDS AND BRANDING

Simon Anholt is one of the UK’s best-known international marketing
thinkers. After graduating in modern languages at Oxford University, heworked as international creative co-ordinator at McCann-Erickson
before founding World Writers, a culture consultancy, in 1989, which heran until 2001. He has specialised in the branding of places for over a
decade, and advises many cities, regions and countries on public diplomacy and brand strategy, including the governments of the UK (and separately Scotland), Slovenia, Croatia, the Czech Republic, Germany and
New Zealand. He also advises the World Bank, the un, the World Travel
and Tourism Council, the World Technology Network and several otherorganisations. He is the author of the best-selling AdWeek book, Another
One Bites the Grass, and Brand New Justice: The Upside of Global Branding, which was published in 2003. He is a founding director of Placebrands, an international consulting firm.
Anne Bahr Thompson has worked as a consultant and strategist in
marketing, planning and research, and with brands including Chase,
Citibank, Fidelity, Kraft Foods, Quaker Oats, Random House and ubs
Switzerland. She was formerly vice-president of market research andplanning at Bankers Trust and held product management and strategicplanning posts at Chemical Bank. She has an mba (International Business and Finance) from Darden Graduate School of Business at the University of Virginia and a ba in Communications and English from
Rutgers University. She is currently head of consulting at Interbrand.
Patrick Barwise is professor of management and marketing and chairman of the Future Media Research Programme at London Business
School. He joined lbs in 1976 having spent his early career with ibm. He
is the author of Television and its Audience, Accounting for Brands, Strategic Decisions, Predictions: Media and Advertising in a Recession, as well as
numerous articles and academic papers, mostly on brands,
consumer/audience behaviour and new media. His current projects
include a major study of global Marketing Expenditure Trends andSimply Better, a book on customer-driven strategy, to be published by
Harvard Business School Press.
Tom Blackett has been a leading expert on brands and branding for over
20 years. He is the author of Trademarks and the co-editor of Co-branding: the science of alliance and Brand Medicine and a contributor to manyother key texts about brands. During his career the international brandviii

THE AUTHORS

owners he has worked with include Heineken, Unilever, GlaxoWellcome, bp Amoco and Volvo. Now group deputy chairman of Interbrand,
he is a regular conference speaker, media commentator and writer.
Deborah Bowker has experience in strategic planning, change communication, media and government relations. Before joining BursonMarsteller she was director of PricewaterhouseCooper’s Centre of
Excellence for Strategic Communications and a technical adviser incommunications and marketing planning to numerous pwc clients. She
has also served as an assistant postmaster general and vice-president at
the US Postal Service, and has directed major projects for usps, a worldwide Olympic sponsorship and a national literacy programme. Her promotion of the Elvis postage stamp earned her a place in the Ad Age 100.
She is a Sloan Fellow of the Massachusetts Institute of Technology,
where she earned a Master of Science in Management.
Charles (Chuck) Brymer began his career at bbdo, opening its Houston office in 1982 before moving to the head office in New York. Since
moving into branding, he has led branding programmes for mci,
Compaq, Samsung, Discover, Procter & Gamble, Gillette and at&t. As
group chief executive of the Interbrand Group based in New York, he is
responsible for managing the company’s global interests as well as
remaining involved in client projects. He has written and lectured extensively on brands, corporate identity, naming and brand valuation.
Deborah Doane is programme director, Transforming Markets, at the
New Economics Foundation, a leading think-tank aiming to build a justand sustainable economy. She is an active campaigner and researcher in
the area of corporate social responsibility and chair of the core
(Corporate Responsibility) Coalition, campaigning for stronger corporate accountability of business. She is a frequent speaker at international
conferences, to both business and government audiences and contributes to broadcast and broadsheet media, including the bbc, theGuardian and the Independent. Previously, she was head of the International Humanitarian Ombudsman Project, and she started her career asa senior policy analyst with the Canadian government. She earned a
Masters in Development Studies from the London School of Economics.
Kim Faulkner has 20 years of experience in branding, marketing communications and design management, working with a diverse range ofix

BRANDS AND BRANDING

international and local client organisations in Asia. She was a founding
partner of Interbrand’s office in Singapore and is now chairman of theoffice, as well as sitting on the board of directors of International Enterprise Singapore. She is also a council member of the DesignSingapore
Council and of the Action Community for Entrepreneurship, Singapore.
Paul Feldwick joined bmp (then known as Boase Massimi Pollitt), an
advertising agency, in 1974. Today he is executive planning director forthe same company (bmp ddb) and worldwide brand planning director
for ddb. He has been chairman of the Association for Qualitative
Research and of the Account Planning Group, and is a Fellow of the ipa
and the Market Research Society. He has spoken at the US Account Planning Group Conference and twice won “best” paper at the Market
Research Society Conference (UK). He is the author of What is Brand
Equity, Anyway?.
Steve Hilton is the founding partner of Good Business, a leading corporate responsibility consultancy. He is a prominent commentator on thesocial role of business, and the author Good Business – Your World Needs
You, a constructive riposte to the anti-globalisation movement. Previously, he was campaign co-ordinator for the Conservative Party’s successful 1992 general election campaign and then worked at Saatchi &Saatchi, where he combined commercial and social marketing disciplines with clients ranging from British Airways to Boris Yeltsin.
Jan Lindemann is global managing director, brand valuation, at Interbrand Group, responsible for the company’s brand valuation practiceworldwide. He has extensive experience in advising on brands, marketing and financial issues in all major industries and countries, with clients
who include American Express, at&t, axa, Bank of America, bbc, bp,
bt, Gucci, Fujitsu, ge, Heineken, ibm, Japan Tobacco, L’Oreal, MasterCard, Nestlé, nyce, Olivetti, Orange, Pilsner Urquell, Prada, Powergen,
Prudential, rhm, Samsung Electronics, Texas Instruments, tnt, Vodafone and Wells Fargo. His work has been widely published on thesesubjects and he is a frequent lecturer, commentator and broadcaster onbrand related issues, including the creation of the league table on theleading global brands. Previously he worked as mergers & acquisitions
adviser for Chase Manhattan Bank.

x

THE AUTHORS

Allan Poulter is a partner at Field Fisher Waterhouse, a London-basedlaw firm, practising within its Trade Marks and Brand Protection Group.
He is qualified as a solicitor and as a registered trade mark attorney, andwas previously managing director of Markforce Associates. He has
managed the international trade mark portfolios of several householdname clients and has particular expertise in Community Trade Mark
proceedings. He is a member of International Trade Mark Association’s
publications board and is editor of the inta publication on the Community Trade Mark. Conferences he has spoken at around the world
include Eurolegal’s Annual Trade Mark Conference and inta’s MadridProtocol Forum in Washington, Chicago and San Francisco.
Shaun Smith is a leading expert in helping organisations create anddeliver customer experiences that differentiate their brands. A consultant to a wide range of organisations covering many different industry
sectors, he is also author of Managing the Customer Experience andUncommon Practice. He started his career at British Airways, becoming
head of Customer Service, Sales and Marketing Training worldwide
before moving to Asia for 11 years as managing director of CathayPerforma consulting. He later joined the Forum Corporation as senior
vice-president of The Customer Experience Business with responsibility
for their customer experience consulting practice in Europe. He now
runs his own businesss focussing on speaking internationally and advising companies in the area of brand experience.

xi

Preface
his collection of essays comes at an interesting time for brands. The
past few years have seen the apparent triumph of the brand concept: everyone from countries to political parties to individuals in organisations is now encouraged to think of themselves as a brand. At its best
this means caring about, measuring and understanding how others seeyou, and adapting what you do to take account of it, without abandoning what you stand for. At its worst it means putting a cynical gloss or
spin on your product or your actions to mislead or manipulate thoseyou seek to exploit. These are hardly new ideas. What is new is theubiquitous and often confused use of branding terminology to describe
them.
This timely book aims to bring greater understanding into this complex and, to some, emotive area. Written by leading practitioners andanalysts, it puts brands and branding into their historical context,
describes current thinking and best practice, and ventures somethoughts about the future.
Part of the confusion about brands is that the word is used in at least
three separate but interrelated senses:

T In most everyday use (for example, “which brand did you buy?”)a brand is a named product or service.

 In some contexts (for example, “which brand shall we use forthis new product?”) brands are trade marks.

 In other contexts (for example, “how will this strengthen or

weaken our brand?”), brand refers to customers’ and others’
beliefs and expectations about products and services sold under aspecific trade mark or about the company which provides them;
the best term for this is “brand equity”.

The use of the same word to mean three categorically different things
does not aid clear thinking; and the thinking gets muddier when the antiglobalisation movement refers to “brands as bullies”, when really they
are attacking the mostly American multinationals that own global
brands.
Again, brand valuation is an attempt to attribute part of the total valueof a firm to brand equity. But brand equity – especially for a corporation,xii

PREFACE

such as Microsoft, ibm or ge, as opposed to a product, such as Windows
or Persil – is like reputation: it cannot be bought or sold. In contrast, a
trade mark can be sold but has little inherent value apart from the associated brand equity.
This is not to deny that brands – that is, brand equity – can be an
extremely important component of a firm’s value. Most successful businesses today are valued by the market at far more than the value of
their tangible assets. Brand equity, whether it is or is not a separable
asset to which we can assign a single valid financial value, is often themost important intangible factor accounting for this difference. The
financial markets now understand this and are starting to require top
management to act as good stewards of this crucial aspect of businessperformance.
If top managers are becoming brand stewards, what issues should
they think about?
Brand measurement, accountability and understanding. To manage
brand equity (or anything) requires current, valid data. This includes
diagnostic data about why the brand is where it is. Few brand owners
do this well. Part of the failure of American “public diplomacy” (government pr aimed at foreigners) stems from not having bothered tounderstand systematically how “Brand America” is perceived. This failure poses a potential threat to American lifestyle brands such as CocaCola, Marlboro and McDonald’s, although it is too soon to tell how real
the threat is. Another accountability issue relates to marketing metrics
such as market share, customer loyalty, relative price and relative perceived quality. Managers should see these metrics regularly and report
the main ones to shareholders.
Brand support. Including a range of marketing metrics in performancemeasurement systems such as the balanced scorecard (to complement
short-term financial measures) should make it easier to maintain investment in activities that will build and develop brand equity. The main
trends are a gradual shift of resources away from traditional media
advertising towards direct and interactive marketing, and a gradualconcentration of resources on fewer, bigger brands, each capable ofsupporting more products. Relating back to measurement and accountability, managers should insist on quantitative evaluations (post-audits)of all brand investments even though these are unlikely to pin down
the full long-term effects. The three criteria for a post-audit should bexiii

BRANDS AND BRANDING

effectiveness (did the campaign reach its objectives?), efficiency (was it
good value for money?) and learning (what have we learned which will
help us do better in future?).
The brand owner’s social and ethical stance. There is no consensus
about the net social impact of businesses, brands or branding, either ingeneral or in particular cases. Nor is there consensus about the implications for public policy (for example, regulation, investment incentives)or for businesses themselves; but because of attacks from diverse
groups (both consumerist and anti-consumerist) brand owners must
address these issues. Brand owners rightly argue that many of the criticisms of them are confused and ill-informed; that, for instance, thelabour and environmental standards of multinationals in developing
countries are usually higher than those of local competitors; and thatthose who criticise their involvement in these countries rarely spell out
the likely consequences if that involvement were to cease. These arguments, however, are insufficient either to address the substantive issues
or to win the battle for hearts and minds. Brand owners today need totake account of the fact that these issues are starting to affect not only
the brand choices of some consumers but also areas such as graduate
recruitment and government relations, and that in a digitally connectedworld anti-brand websites and e-mail campaigns can have a dramatic
impact within a few days.
Making the experience of buying and using the brand reliably live
up to the promise. A recurrent theme in this book is that successful
brand management goes well beyond the cosmetics of branding (brand
name, packaging, advertising, and so on). All great brands are built on a
bedrock of trust derived from customers’ experience of buying andusing products and services sold under the brand name. The resulting
brand equity is then reinforced by excellent branding, usually playing a
supporting role. Of those brands ranked the top ten in 2002 by Interbrand, a brand consultancy firm, in association with JP Morgan (seepage 29) only Coca-Cola and Marlboro have been created primarily bybranding, supported by a good product and great distribution. Intelowes some of its strength to its Intel Inside “ingredient branding” campaign, but more to its products’ price-performance, its strategic alliancewith Microsoft and its dominance of standards. The rest of this top ten– Microsoft, ibm, ge, Nokia, Disney, McDonald’s and Mercedes-Benz –are primarily customer experience brands.

xiv

PREFACE

This represents the biggest opportunity for top management as brandstewards. After 25 years of total quality management (tqm), customer
relationship management (crm) and other such management prescriptions, there is still a huge gap between promise and delivery for mostbrands, especially service brands.
I recently read a review of a book on “building great customer experiences”. The reviewer tells how he settled down to read the bookcoming back from Brussels to London by Eurostar, having had his original train cancelled and … don’t ask. (This was a few weeks after Eurostar
left several hundred passengers stranded for five hours.) Imagine hisreactions on finding the managing director of Eurostar quoted threetimes in the book on his company’s wonderful customer-led culture. Did
this md have any idea of customers’ actual experience with the brand?
My hope and expectation is that the next big brand thing will be top
managers, as brand stewards, working to close the gap between thepromised and the delivered brand experience.
Brands create customer value because they reduce both the effort
and the risk of buying things, and therefore give suppliers an incentive
to invest in quality and innovation. Branding can also enhance the customer’s experience aesthetically and psychologically. Today, there is far
more interest in brands and recognition of their importance than therewas 10 or 20 years ago, but there is still great ignorance and misunderstanding of many of the issues. This book is aimed at any open-mindedperson who seeks a better understanding of the social and financial
value of brands, current best practice in branding, and some of theemerging issues around this important, complex and ever fascinating
topic.
patrick barwise
September 2003

xv

This page intentionally left blankIntroduction
Rita Cliftonn great part, this book, and its treatment of the subject of brands andbranding, was inspired by the leader article “Pro Logo” whichappeared in The Economist on 8th September 2001. The date of publication may give some clue as to why the subject did not generate as muchfollow-up debate as it might have done.
But there were, and are, other factors which have subdued the kindof support that the article advocated for brands. The title “Pro Logo” wasa witty response to the title and arguments in Naomi Klein’s 1999 book
No Logo. The book had become an unofficial “bible” for the anti-capitalist and anti-globalisation movement, arguing that global brands
essentially had too much power and were the cause of a variety of evils
and injustices in world society. The Economist article essentially advised
Naomi Klein and her followers to grow up, and to recognise the importance of globalisation and brands to the economic and social development of all nations. Brands have been successful because people wantthem; and every organisation’s need to protect its reputation (and so its
corporate value) is a rather efficient impetus for them to behave well.
The fact that The Economist article was a rare example of a sophisticated publication clearly highlighting the nonsense that lay behind somany of the anti-capitalist arguments was also thought-provoking in its
own right. Why is it that there seems to be less high-level advocacy forthe collective importance of brands than seems justified by the facts?
Is it a lack of understanding of their nature and role? Is it a form of
personal denial about how much we are influenced by brands, a kind ofdeveloped-world guilt? Certainly, there is little evidence of this kind ofsoul-searching in a country like China, where the government has
explicitly stated that it sees “branded commodities” as China’s way forward in world success.
Contrast this with the sentiment of a letter from a ftse company
ceo in response to an approach from a brand consultancy. No one
could blame the ceo for rebuffing such an approach from a supplier,but it was the reason given that was illuminating: “Branding is not our
main preoccupation at the moment.” The letter was polite, but theI

1

BRANDS AND BRANDING

implication was clear. Basically, in the face of difficult market conditions, the ceo was preoccupied with “more important” things such as,presumably, cutting costs and restructuring. In contrast, branding was,to him, a discretionary cost and most probably to do with expensivelogo-twiddling. To equate “brand” with such superficial cosmetics is theequivalent of saying that people are really only the sum of their name,face and clothes.
Thinking about all of these differently expressed (and indeed unexpressed) views, it seemed important for this book to air and explore themany different angles on brands and branding, both positive and negative, for a range of different audiences. This is indeed what the book has
set out to do, as is reflected in the chapter subjects and contributors.
However, we should be clear that there is a central tenet for thisbook, whether it is reflected in the individual contributions or not. The
brand is the most important and sustainable asset of any organisation –whether a product- or service-based corporation or a not-for-profit concern – and it should be the central organising principle behind every
decision and every action. Any organisation wanting to add value to
day-to-day process and cost needs to think of itself as a brand.

The economic importance of brands
Certainly, all the hard economic evidence is there for the central importance of the brand. While the brand clearly belongs in the “intangible”
assets of an organisation, this hardly makes its economic contribution
and importance any less real. For example, the intangible element of the
combined market capitalisation of the ftse 100 companies has
increased to around 70%, compared with some 40% 20 years ago, and it
is likely to grow even further as tangible distinctions between businesses become less sustainable. The brand element of that combined
market value amounts to around one-third of the total, which confirms
the brand as the most important single corporate asset. Globally, brands
are estimated to account for approximately one-third of all wealth; andthat is just looking at their commercial definition. Some of the world’s
most recognised and influential brands are, of course, those of not-forprofit organisations, such as Oxfam and the Red Cross. This is an aspectof “global brands” all too rarely considered in the public debate aboutbrands and branding.
The economic importance of brands on a national and international
stage is undeniable. As an example, when the gdp of Thailand wasaround $115 billion in 2001, the combined value of the world’s two most2

INTRODUCTION

valuable brands (Coca-Cola and Microsoft) was $134 billion. If the financial clout wielded by these companies makes some commentators nervous, it should not. The owners of brands are also highly accountable
institutions. If a brand delivers what it promises, behaves in a responsible fashion, and continues to innovate and add value, people will continue to vote for it with their wallets, their respect and even theiraffection. If, however, a brand begins to take its position for granted andbecomes complacent, greedy or less scrupulous in its corporate practices, people will stop voting for it, with potentially disastrous effects forthe brand and its owner.
In a word-processed, all-seeing digital world, where the ghosts ofcorporate malpractice are never laid to rest, there is every incentive forcompanies to behave well. One of the ironies of the recent anti-globalisation movement, in its original targeting of global brands, is the failure
to acknowledge that the importance of brand reputation provides thestrongest incentive for a company to do everything to protect the reputation of its brand, its most valuable corporate asset. If the ability toincrease the value of that asset is the “carrot” for companies, then the“stick” is the knowledge of how worthless the once-proud names ofAndersen and Enron have now become.
From an investment perspective, the brand provides a more reliable
and stable indicator of the future health of a business. Inspection ofbrand value, equity measures and audience relationships will give amore complete and realistic basis for underlying value than short-term
financial results, which often reflect short-term priorities. A recent study
by Harvard and South Carolina Universities compared the financial
performance of the world’s most valuable 100 brands with the averageof the Morgan Stanley Capital Index and the Standard & Poor’s 500. The
dramatic difference in performance gives further quantified substanceto what is qualitatively obvious. Strong brands mean more return, forless risk.

The social and political aspects of brands
Brands, however, are not simply economic entities.
Apart from the obvious social benefits of wealth creation on
improvements in standards of living both nationally and internationally, there are less recognised social effects and benefits. Most of theworld’s most valuable brands have been around for more than 50 years.
Brands are the most stable and sustainable assets in business, living onlong after the passing of most management teams, offices, technological3

BRANDS AND BRANDING

breakthroughs and short-term economic troughs. Clearly, to deliver thissustainable wealth, they need to be managed properly. But achieving
sustainable wealth means more reliable income for companies, whichmeans more reliable earnings. All this in turn leads to more security andstability of employment, which in itself is an important social benefit.
Related to the social perspective, there is also strong political significance in brands. Quite apart from the fact that political parties all over
the world now employ professional branding practices, there have been
many articles and studies on issues such as “Brand America”. These
have looked at the role and global dominance of American brands, andat how these are being used as political symbols, for good or ill.
Although initially the presence of McDonald’s was greeted enthusiastically in the former Soviet Union as symbolic of Russia’s new found “liberation”, more recently McDonald’s has been targeted for anti-American
demonstrations, despite its best efforts at emphasising local management structures and locally sensitive approaches to tailoring productoffers and practices.
An interesting development that goes beyond the idea of boycotting
has been the launch of competitive initiatives such as Mecca-Cola,
introduced in 2002 by Tawfik Mathlouthi, a French entrepreneur; thisis another demonstration of the highest level of symbolic and economic importance of brands. The strongest brands have always
worked at the level of personal identity. So even if Mecca-Cola is not
an immediate financial challenge to the $70 billion brand value ofCoca-Cola, it has highlighted new possibilities for actively expressing
fundamental differences of view, with the nicely ironic touch that the“alternative statement” brand has almost exactly the same physicalcharacteristics as the mainstream one. However, before commentators
get too carried away in this area, the nature of competition in brands
has always meant competition between product characteristics andbroader brand values, image and associations. Whatever the motivation for launching a competitive brand, its long-term success will
depend on its ability to satisfy a critical mass of customers on product,
service and image grounds.
But a powerful political point about brands is their ability to crossborders, and potentially to bind people and cultures together more
quickly and effectively than national governments, or the bureaucratic
wheels of international law, ever could.
Increasingly, tv has acted as the second superpower. Whereas it
used to take decades and centuries for one culture to seep into another,4

INTRODUCTION

now lasting and transforming images of different cultures can be transferred in seconds. America’s dominance of the tv and media markets
has ensured that American brands (and, indeed, Brand America) havedominated global markets in their turn; and although the production
and servicing facilities for brands benefit from regional flexibility, thosethat own the brands own the greatest wealth. However, any successful
brand, of any provenance, must continue to understand and anticipatechanges in its audiences in order to remain successful. It is beyond irony
that the internet – essentially an American invention and “supplied” byAmerica – has become such an instrument of challenge to its brands andits institutions. It will be interesting indeed to see how the world’s mostvaluable brands continue to adapt to the complex and unsettlingchanges in the new world order.
This book will explore these and other issues, such as how Asian
brands could emerge as serious global players. What is certain, however, is that the strongest brands have, in their lifetime, already seen off
seismic changes in political, social and economic circumstances, andcontinue to thrive through deserving trust and long-term relationships.
Brands of all kinds do have extraordinary power: economic power,
political power and social power. It is no exaggeration to say that brands
have the power to change people’s lives, and indeed the world. For thisclaim, think not just about the “one free world” images introduced by
Coca-Cola advertising over the years, and the universality of the Red
Cross, but also consider the more recent emergence of Microsoft andNokia as inspirers and enablers of social change.

Understanding the role of brands
If brands are so demonstrably powerful, and since the definition andbenefit of brands embrace every type of business and organisation, thequestion to ask is why every business and organisation would not wantto concentrate their resources, structure and financial accountability
around this most important asset. Indeed, there is a clear need for organisations to be consistently preoccupied with maintaining the sustainable
competitive advantage offered by the brand. The clarity of focus that astrong brand positioning gives organisations will always create more
effectiveness, efficiency and competitive advantage across all operations; and from a pragmatic financial perspective, research among
investment communities confirms that clarity of strategy is one of thefirst criteria for judging companies.
So why are brands sometimes not taken as seriously as the data

5

BRANDS AND BRANDING

show us they should be? There seem to be several potential explanations.
Lack of understanding
Perhaps the first and most obvious is a lack of full understanding amongsome senior managers about what successful branding really is. If
branding is treated as a cosmetic exercise only, and regarded merely as
a new name/logo, stationery and possibly a new advertising campaign,
then it will have only a superficial effect at best. Indeed, if this “cosmetic” approach is applied in an effort to make a bad or confused business look more attractive, it is easy to see why these so-called“rebranding” exercises encourage such cynicism. Reputation is, after all,reality with a lag effect. Branding needs to start with a clear point ofview on what an organisation should be about and how it will deliver
sustainable competitive advantage; then it is about organising all product, service and corporate operations to deliver that. The visual (andverbal) elements of branding should, of course, then symbolise that difference, lodge it memorably in people’s minds and protect it in law
through the trade mark.
Terminology
The second explanation for why branding is sometimes not central in
the corporate agenda seems to be to do with terminology. The term“brand” has now permeated just about every aspect of society, and canbe as easily applied to utilities, charities, football teams and even government initiatives as it has been in the past to packaged goods. Yet
there still seems to be a residual and stubborn belief that brands are relevant only to consumer goods and commerce. Clearly, this is nonsensewhen every organisation has “consumers” of some kind; furthermore,some of the world’s most valuable brands are business to business, butthat does not make them any less “consumers”. However, rather thanget deeply embroiled in the broader meanings of consumption, it isprobably more helpful to talk about audiences for brands today. Thesecan be consuming audiences, influencing audiences or internal audiences. All of these audiences need to be engaged by the brand – whether
it is a product, service, corporate or not-for-profit brand – for it to fulfil
its potential.
If there are still those who would say “yes, but why does it have to
be called brand?”, it is worth remembering that every successful business and organisation needs to be set up and organised around a dis-6

INTRODUCTION

tinctive idea of some kind. To distinguish itself effectively and efficiently from other organisations, it is helpful to have some kind of
shorthand: visual or verbal symbols, perhaps an icon that can be registered and protected. To make up another term for all this would
seem perverse, as branding is already in existence. Rather, it is worth
exploring why some people and organisations might have this aversion or misunderstanding and tackle the root cause. In the case ofsome arts and charitable organisations, there can be a problem withcommercial overtones; for commercial organisations working in thebusiness-to-business arena, or in heavy or technical services, there may
be concerns that branding feels too soft and intangible to be relevant.
With the former, it is a harsh truth of the new arts and not-for-profit
worlds that they are competing for talent, funding, supporters andaudiences, and need to focus their efforts and investment with theeffectiveness and efficiency that brand discipline brings. With thelatter, there is nothing “soft” about the financial value that strong
branding brings, in all and any sector; nor is it “soft” to use all possible
competitive levers to gain every customer in a hypercompetitive international market. Price will always be a factor in choice. But acting like
a commodity, rather than a trusted and differentiated brand, will eventually lead only to the lower-price road to perdition.
Ownership
The third area to examine is that of ownership within organisations.
Whereas the more established consumer goods companies grew up
around their individual brands, more complex and technical organisations may often be run by people who have little experience in marketing or selling. As a result, the brand may simply be regarded as the
specialist province of the marketing team, or, since the visual aspects ofbrands are the most obvious manifestation, brand management may bedelegated to the design manager. This is not to cast aspersions on thespecialist marketing and design functions, since their skills are vital inmaintaining the currency and aesthetics of the brand; however, unlessthe chief executive of the organisation is perceived to be the brandchampion, the brand will remain a departmental province rather thanthe driving purpose of everyone in an organisation. Although marketingis critical in shaping and presenting a brand to its audiences in the mostpowerful way, brands and marketing are not the same thing. And as far
as the need for ceo attention is concerned, if the brand is the mostimportant organisational asset, it makes rational sense for it to be the7BRANDS AND BRANDING

central management preoccupation. Business strategy is, or should be,brand strategy, and vice versa. Effective and efficient corporate governance is brand-driven governance.
Tangible and intangible elements
The last area to cover in explaining any remaining ambivalence aboutbrands relates to their particular combination of tangible and intangible
elements. The tangible area is always easier, since today’s senior business culture is still often happier concentrating on the tangible, rationaland quantifiable aspects of business. As far as quantification is concerned, brands can certainly now be measured, and it is critically important that they are. If their financial contribution is not alreadyself-evident, there are many formally recognised ways to put a hard andquantifiable value on them.
It is the intangible, more creative, visual and verbal elements ofbrands that can sometimes be taken less seriously by senior management than they deserve. Yet it is these elements that will engage andinspire people, externally and internally, to the advantage of the organisation. When John McGrath, former ceo of Diageo, describes the creation of the Diageo corporate brand, and the vision and values tosupport it, he speaks warmly of the vision that clarified and inspired thecompany for a new future. He adds wryly that the £1m that was paid tobrand consultants for helping the company create this was a high-profile topic of media discussion at the time. This was in contrast to themany more millions of pounds in fees and commissions that werereportedly paid to lawyers and financiers, and which passed withbarely a murmur. Creativity and imagination are crucial to the successof a brand. It is the easiest thing in the world for people to approach
new naming, product development, design and advertising ideas with
an open mouth and a closed mind. In turn, brand practitioners need tohave the courage of their convictions in publicly presenting new ideas,
and to recognise that the most effective creative solution may even challenge their own professional conventions.

About this book
The following chapters in this book are divided into three parts.
Part 1 looks at the history and definition of brands, and their financial
and social importance. Also examined are the world’s most valuable
brands and the lessons that can be learned from their experiences andthe challenges they face.

8

INTRODUCTION

Part 2 examines a number of crucial practical areas of brand management such as the disciplines of brand positioning and brand value
management. This includes the need for brand alignment through all
aspects of an organisation’s operations, stretching across products andservices, human resources practices and corporate behaviour, environments and communications. Also covered is the role of visual andverbal brand identity in engaging audiences and the ever more complex
area of brand communications in the round. A chapter on public relations highlights the increasing need to ensure that internal and external
messages are consistent in their representation of the brand. Anotherchapter looks at the importance of taking the necessary steps to ensurethat a brand is legally protected.
Part 3 considers the future for brands of all kinds. It analyses theeffects and opportunities of globalisation and examines the potential
for Asian brands. One chapter considers the area of corporate social
responsibility and the effect of the anti-capitalism and anti-globalisation
movements; another puts the case for nations to take advantage ofbrand disciplines. The last chapter pulls together the trends that will
shape the future of brands, business and society, and highlights whatorganisations need to focus on if they are to make the most of their mostvaluable asset: their brand.

9This page intentionally left blank

1
THE CASE FOR BRANDS

This page intentionally left blank1 What is a brand?
Tom Blackett

Ancient and modern
The Oxford American Dictionary (1980) contains the following definition:
Brand (noun): a trade mark, goods of a particular make: amark of identification made with a hot iron, the iron used for
this: a piece of burning or charred wood, (verb): to mark with a
hot iron, or to label with a trade mark.
Similarly, The Pocket Oxford Dictionary of Current English (1934) says:
Brand. 1. n. Piece of burning or smouldering wood, torch,(literary); sword (poet.); iron stamp used red-hot to leave an
indelible mark, mark left by it, stigma, trade-mark, particularkind of goods (all of the best bb.). 2. v.t. Stamp (mark, object,skin), with b., impress indelibly (is branded on my memory)
These two entries, in the order in which they list the definitions andin the definitions themselves, illustrate how, over 50 years, the primary
use of the word “brand” now has a commercial application. However,the definitions also underline a common origin. Almost irrespective of
how the word is used today, it has always meant, in its passive form,
the object by which an impression is formed, and in its active form theprocess of forming this impression.
The following pages develop the use of the word brand, both passive
and active (albeit in human consciousness rather than on the flank of ananimal), and explain how “branding” has become so important to business strategy. But first, there is a short history of brands.

A short history of brands
The word brand comes from the Old Norse brandr, meaning to burn,and from these origins made its way into Anglo-Saxon. It was of course
by burning that early man stamped ownership on his livestock, and13

BRANDS AND BRANDING

with the development of trade buyers would use brands as a means ofdistinguishing between the cattle of one farmer and another. A farmer
with a particularly good reputation for the quality of his animals wouldfind his brand much sought after, while the brands of farmers with alesser reputation were to be avoided or treated with caution. Thus theutility of brands as a guide to choice was established, a role that hasremained unchanged to the present day.
Some of the earliest manufactured goods in “mass” production wereclay pots, the remains of which can be found in great abundancearound the Mediterranean region, particularly in the ancient civilisations of Etruria, Greece and Rome. There is considerable evidence
among these remains of the use of brands, which in their earliest form
were the potter’s mark. A potter would identify his pots by putting his
thumbprint into the wet clay on the bottom of the pot or by making his
mark: a fish, a star or cross, for example. From this we can safely saythat symbols (rather than initials or names) were the earliest visual formof brands.
In Ancient Rome, principles of commercial law developed that
acknowledged the origin and title of potters’ marks, but this did not determakers of inferior pots from imitating the marks of well-known makers
in order to dupe the public. In the British Museum there are even examplesof imitation Roman pottery bearing imitation Roman marks, which weremade in Belgium and exported to Britain in the first century ad. Thus astrade followed the flag – or Roman Eagle – so the practice of unlawful imitation lurked close behind, a practice that remains commonplace despite
the strictures of our modern, highly developed legal systems.
With the fall of the Roman Empire, the elaborate and highly sophisticated system of trade that had bound together in mutual interdependence the Mediterranean and west European peoples gradually
crumbled. Brands continued to be used but mainly on a local scale. The
exceptions were the distinguishing marks used by kings, emperors andgovernments. The fleur-de-lis in France, the Hapsburg eagle in AustriaHungary and the Imperial chrysanthemum in Japan indicated ownership or control. (Interestingly, the chrysanthemum signifies death inKorea, intermittently over the centuries a Japanese colony.) In a similar
fashion the cockleshell, derived from the legend attached to the shrineof St James at Santiago de Compostella in north-west Spain, a favourite
medieval centre of pilgrimage when the holy places of Palestine wereclosed to pilgrims by the Muslims, was widely used in pre-Renaissance
Europe as a symbol of piety and faith.

14

WHAT IS A BRAND?

In the 17th and 18th centuries, when the volume manufacture of fineporcelain, furniture and tapestries began in France and Belgium, largely
because of royal patronage, factories increasingly used brands to indicate quality and origin. At the same time, laws relating to the hallmarking of gold and silver objects were enforced more rigidly to give thepurchaser confidence in the product.
However, the widescale use of brands is essentially a phenomenonof the late 19th and early 20th centuries. The industrial revolution, with
its improvements in manufacturing and communications, opened up
the western world and allowed the mass-marketing of consumer products. Many of today’s best-known consumer brands date from thisperiod: Singer sewing-machines, Coca-Cola soft drinks, Bass beer,
Quaker oats, Cook’s tours, Sunlight soap, Shredded Wheat breakfast
cereal, Kodak film, American Express travellers’ cheques, Heinz bakedbeans and Prudential Insurance are just a few examples.
Hand in hand with the introduction of these brands came early trade
mark legislation. This allowed the owners of these brands to protect
them in law (indeed, the Bass “Red Triangle” trade mark was the very firstregistered in the UK in 1876, and the beaming Quaker, who adorns thepack of the eponymous oats, is now well into his second century). The
birth of advertising agencies such as J Walter Thompson and NW Ayer inthe late 19th century gave further impetus to the development of brands.
But it is the period since the end of the second world war that has
seen the real explosion in the use of brands. Propelled by the collapse ofcommunism, the arrival of the internet and mass broadcasting systems,
and greatly improved transportation and communications, brands havecome to symbolise the convergence of the world’s economies on the
demand-led rather than the command-led model. But brands have notescaped criticism. Recent anti-globalisation protests have been significant events. They have provided a timely reminder to the big brandowners that in the conduct of their affairs they have a duty to society,as well as customers and shareholders.

Elements of the brandThe dictionary definitions quoted above suggest that brands are intrinsically striking and that their role is to create an indelible impression.
Intrinsically striking
The visual distinctiveness of a brand may be a combination of any of
the following: name, letters, numbers, a symbol, a signature, a shape, a

15

BRANDS AND BRANDING

slogan, a colour, a particular typeface. But the name is the most important element of the brand as its use in language provides a universal reference point. The name is also the one element of the brand that should
never change. All other elements can change over time (Shell’s famous
logo has evolved significantly from the early line drawing and PepsiCola switched to all-blue livery a few years ago), but the brand nameshould be like Caesar: “as constant as the northern star”.
This is not to say that brands achieve true visual distinctivenessthrough their names alone. Nike without its tick-like swoosh, Camelcigarettes without “Old Joe”, the supercilious dromedary, Michelin without exuberant Monsieur Bibendum, McDonald’s without its Golden
Arches would be paler properties indeed. Brands like these – and many
thousands of others – rely for their visual distinctiveness on the harmonious combination of these elements and the consistency with which
this is maintained.
This said, in certain markets where the use of branding is highly
developed and consumers are particularly sophisticated, these rules are
sometimes tested. In the fashion-clothing market, for example, brands
like Mambo and Diesel have experimented with the use of completely
different logos; Diesel even changed the name for a season (although allother visual aspects of the brand remained the same). The success ofsuch tactics depends upon the awareness of the consumer. These twobrands enjoy almost “cult” status, and the loyalty with which they arefollowed by their devotees has assured success.
Name changes of products and services are rare; they are uncommon
too among companies, but perhaps a little more frequent. With products
and services, the main reasons for change are either to extend theappeal of a brand to new markets where the original name may not be
optimal, or to standardise the company’s international trade mark portfolio. The Lucky Dog Phone Company, an at&t subsidiary, changed its
name to Lucky Guy in the United States because no counterpart to the
lucky dog exists in the American Chinese, Japanese and Korean markets,
all important targets. Mars changed the Marathon name to Snickers in
the UK to bring the product’s name into line with the rest of the world.
Companies generally change their names either because their function or their ownership has changed, or because their name is in some
way misleading. Sometimes they revert to initials: Minnesota Mining
and Manufacturing became 3m, a name that is both handier and more
flexible strategically. Sometimes they combine the names of the merging
companies: GlaxoSmithKline. Sometimes they opt for an entirely new16WHAT IS A BRAND?

name: Altria is now the name of the tobacco, beer and foods group once
known as Philip Morris. There is no right or wrong way of renaming
businesses; it is as much a matter of what the company feels comfortable with and what it feels it can make work. The key is commitment
and good communications.
Sometimes these rules are not observed as faithfully as they should
be. When Guinness merged with Grand Metropolitan the holding company adopted the name Diageo. Shareholders were not impressed,
thinking that the decision to adopt a meaningless, foreign-sounding
name, when perfectly good names like Grand Met or Guinness wereavailable, amounted to corporate treachery. At the extraordinary general meeting held to approve the new name outbursts of booing
enlivened the proceedings at each mention of “Diageo”.
Name changes following mergers can be highly charged events, andcloser communication with all stakeholder groups – particularly private
shareholders, who may also be pensioners of the firms involved – mayhelp ease the transition. In the case of Diageo, a name that has now“bedded down”, the company should have explained why it had
decided to adopt a neutral name for the new holding company andissued firm reassurances regarding the famous trading names – particularly Guinness – that it would continue to use.
Diageo, like Aviva, an insurance business, and Altria, mentioned
above, is strictly a holding company name (as was the unfortunate Consignia, a name briefly adopted by the Post Office and now consigned tohistory). These names are not intended for “public consumption” –although a mischievous press made great play of post offices becoming“consignias” – so clarity is paramount; the rationale for change must be
communicated to – and understood by – all stakeholder groups.
Creating an indelible impression
In developed economies consumers have an astonishing – often bewildering – array of choice. There are, for example, dozens of car manufacturers, hundreds of car models and thousands of different vehicle
specifications to choose from; the days when Henry Ford offered “anycolour you want as long as it’s black” are now long gone. This diversityof choice puts pressure on those making or selling products or services
to offer high quality, excellent value and wide availability. It also puts
pressure on them to find more potent ways of differentiating themselves and securing competitive advantage. According to Fortune magazine (in 1997):

17

BRANDS AND BRANDING

In the twenty-first century, branding ultimately will be the only
unique differentiator between companies. Brand equity is now
a key asset.
Much of the skill of marketing and branding nowadays is concernedwith building “equity” for products whose characteristics, pricing, distribution and availability are really quite close to each other. Take cola
drinks, for example. Coca-Cola and Pepsi-Cola are able to dominate theworldwide cola market. The power of their bottling and distribution
systems no doubt plays a part in this, but the main factor is the strengthand appeal of the two brands to consumers. The strong, instantly recognisable names, logos and colours of these two brands symbolise theirmakers’ promise that consumers’ expectations will be fulfilled, whatever the subtleties of these might be.
Brands allow the consumer to shop with confidence, and they provide a route map through a bewildering variety of choices. The customer does not have to be an expert on the complexities of mobile
telecommunications to choose between one service supplier andanother. The brand name, the tariff and the method of payment are allthat is required to make an informed choice. And as tariffs and methodsof payment are largely the same among competing companies, it is thebrand – and consumers’ appreciation of its underlying appeals – thatwill ultimately drive the purchase decision. It is the inculcation of these“underlying appeals” – the bedrock of brand equity – that concerns
brand owners and has become the subject of unceasing attention andinvestment. Brands with strong equity embed themselves deeply in thehearts and minds of consumers.
The real power of successful brands is that they meet the expectations of those that buy them or, to put it another way, they represent a
promise kept. As such they are a contract between a seller and a buyer:
if the seller keeps to its side of the bargain, the buyer will be satisfied; if
not, the buyer will in future look elsewhere.

Brands as business assets
The value to businesses of owning strong brands is incontestable.
Brands that keep their promise attract loyal buyers who will return tothem at regular intervals. The benefit to the brand owner is that forecasting cash flows becomes easier, and it becomes possible to plan andmanage the development of the business with greater confidence. Thus
brands, with their ability to secure income, can be classed as productive

18

WHAT IS A BRAND?

assets in exactly the same way as any other, more traditional assets of abusiness (plant, equipment, cash, investments and so on).
The asset value of brands is now widely recognised, not just bybrand owners but by investors. Brands can generate high-quality earnings that can directly affect the overall performance of the business andthus influence the share price.
The stockmarket value of The Coca-Cola Company, for example,
was around $136 billion in mid-2002, yet the book value (the net asset
value) of the business was only $10.5 billion. A vast proportion of thevalue of the business (around $125 billion) is therefore dependent uponshareholders’ confidence in the intangible assets of the business, and theability of the company to manage these profitably. Coca-Cola owns few
intangibles other than its “secret recipe”, its contracts with its global network of bottlers and its brand names. An independent analysis estimated that the value of the Coca-Cola brand name in mid-2002 wasalmost $70 billion, well over half of its intangible value. Similarly, highprofile consumer brands like McDonald’s can attribute a huge proportion (around 70%) of their market value to their brands. At the other endof the scale, for two of the world’s largest companies, General Electricand Intel, the ratio of brand values to intangible value is much lower.
Both ge and Intel are rich in intangibles, but as these are linked to thetechnology in which these companies excel, they probably take theform of patents and know-how agreements.
It is not surprising that much of the merger and acquisition activity ofthe past 20 years or so has involved brand-owning businesses. The
durability of brands, the quality of their earning power (unlike shortlived technology assets such as patents) and their widespread appeal
make them highly desirable properties. The globalisation of trade isdriving consolidation in many industries; a recent example is the purchase, for $21 billion, of Bestfoods by Unilever. Bestfoods owns many
famous food brands, notably Knorr stock cubes and Hellmann’s mayonnaise. These brands have truly global potential, which is more likely
to be tapped by a company of the size and scale of Unilever than byBestfoods, which is large but lacks Unilever’s global resources.
Equally, in 1998 Volkswagen concluded a deal to acquire Rolls-Royce
Motor Cars from Vickers, a UK engineering group, for around £400m.
vw’s interest was not in acquiring a pile of fully depreciated manufacturing assets in Derby, the home of Rolls-Royce, but in the famous RollsRoyce and Bentley brands, crown jewels of the global automotive
industry. However, although Vickers owned the Bentley name, it only

19

BRANDS AND BRANDING

had a licence for Rolls-Royce. In an interesting twist to this tale, RollsRoyce Aero Engines, the owner of the Rolls-Royce brand name, refused
to grant a licence in perpetuity to vw, handing this instead to bmw,
vw’s old German rival. There can be little doubt that these brands will
thrive under new ownership, as both bmw and vw have state-of-theart manufacturing and truly global resources far exceeding those of theformer maker.

The explosion of branding
The scale of adoption of branding has been breathtaking. An activity
that for three-quarters of the 20th century was mainly confined to consumer goods and services now features in industrial and business-tobusiness sectors, the public and voluntary sectors, utilities andnon-governmental organisations. Within the consumer sector, the development of technology has added thousands of new products and services: computer games, laptops, mobile telephones, the internet and the
myriad services it distributes. Football teams, political parties and pop
stars all now consider themselves brands; and the Church of England
was recently urged in the media to adopt a more “branded” approach to
the recruitment of clergy.
In parallel, we have seen the emergence of two new practices inbranding: the application of branding techniques to corporations, andthe “internalisation” of brands and their management, particularly
within services businesses where the employee is pivotal in delivering
customer satisfaction.
Corporate branding
Corporations have learned how important it is to be understood andappreciated, not just by investors, customers, suppliers and employees
but also by opinion formers, activist groups and the general public. In
shareholding societies there is intense interest in both the behaviour andthe performance of quoted companies; and with the advent of the internet such companies find themselves increasingly in the “global fishbowl”, where damaging news or opinions travel fast and wide.
Reputation is paramount, and companies that are known for the qualityof their products and services, their integrity and the transparency of
their actions are the ones best placed to sustain a competitive advantage.
In the pharmaceuticals industry, for example, large corporations such
as GlaxoSmithKline, Merck, Pfizer, Roche and Novartis all depend upon
the development of successful new drugs for future profitability. With

20

WHAT IS A BRAND?

the declining productivity of in-house r&d, they compete fiercely forpromising new products being developed by smaller, research-basedorganisations, such as those specialising in biotechnology. Here the reputation of the bidder is as critical as the price and the royalty terms
being offered. The bidder must have a spotless record for the quality
and effectiveness of its products, and for the way it conducts itself in the
public arena. The reputations of several of the leading pharmaceuticals
companies were damaged recently through their involvement in the
supply of hiv and aids drugs to southern Africa. The South African
government threatened to overrule their patents and allow local manufacturers to produce the drugs, unless these companies reduced theirprices, which – after negotiations that involved Oxfam, itself a conspicuous brand – they eventually did.
Even the mighty Coca-Cola has been brought up short by inattention to the particular needs and sensitivities of its stakeholders. In 1999
it was forced to withdraw Coke from the Belgian market following acontamination scare. The scare was dealt with quickly and efficiently,
but it succeeded in attracting a great deal of attention. Around thesame time the company had been involved variously in a discriminatory employment suit, an antitrust investigation in France and a failed
attempt to buy the soft drink brand Orangina. The Belgian affair, exacerbated by some clumsy remarks by the then ceo, led analysts andinvestors to question the grip the Coca-Cola board had on its business.
The share price fell and a planned acquisition – of Quaker – was abandoned. As a result the board was shaken up and the management of
the company’s global businesses devolved to a more local level to getcloser to the consumer.
The companies referred to above have largely recovered the reputational ground they lost. The same cannot be said of such notorious casualties as Enron and WorldCom. Both these corporations were relative
newcomers, but cheating your shareholders (your owners) so spectacularly represents a betrayal of trust that not even long-established brands
can survive.
Services branding
The developed world has seen a huge shift in output from industry andmanufacturing to services, and as demand for financial and leisure services increases, brands will play an increasing role in a “brand savvy”
world in which people have become more and more discriminating anddifficult to please. Brand owners therefore need to ensure that they21

BRANDS AND BRANDING

deliver high-quality services that are aligned with a compelling visionand delivered with a genuine commitment to customer satisfaction.
Thus the next journey for the brand is inside. Some of the most successful branded companies use the brand as their central organisingprinciple. Richard Branson’s determination to give the man in the street
a better deal – whether it is in financial services, train services or air
travel – animates the organisation and acts as a filter for corporate development. Not all of Branson’s enterprises have been successful, notably
Virgin Rail, but he is widely admired for his commitment and enthusiasm, even if these qualities are not always matched by service delivery.
Fliers with Virgin Atlantic can readily sense the difference; not only is
the flight cheaper, but the whole experience is different. It may not be toeveryone’s taste, but the friendliness and informality of the staff reflect
the personality of Branson himself. The result is a well-managed customer experience, distinctive and memorable.
Contrast this with the financial services sector. Banks, in particular,
have struggled to create and deliver a well-differentiated customer experience. Years of overclaiming in advertising – “the bank that likes to say‘yes’”, “Come and talk to the listening bank” – have led to customer cynicism. Unlike the Virgin Atlantic experience, which is almost palpable,banks seem to lack a really big idea. (Perhaps this is the result of over a
century of trying not to be different.) Some have experimented with
telephone and internet banking, and it is notable that the most successful have been those that have adopted new names, such as First Direct
and Egg, and have distanced themselves from their owners (Midland
Bank and Prudential Assurance respectively). But in truth it is exceptionally difficult for banks to differentiate; all have broadly the same
products, premises and services, and all seek to recruit the same type of
employee. Employees can make a difference, however, as anyone who
has had a memorable experience when dealing with their bank branch
will know. Employees can make or mar a long-standing relationship,
and as banking has traditionally been the business of “relationships”,
investment in staff training is clearly one of the most important commitments to brand management that a bank can make.
Other than our health, our wealth (or lack of it) is an aspect of lifethat is closest to most people’s hearts. It is also an aspect of life where
we frequently need advice and where “trust” carries a high premium.
Brands have always been about trust, and it is instructive to reflect on
how the level of trust we may have in our medical adviser contrasts
with the level of trust we may have in our bank and other financial

22

WHAT IS A BRAND?

advisers. The financial institutions were once greatly esteemed by theircustomers – “safe as the Bank of England” – but with the general drive
towards greater operational efficiencies (downsizing) the personal contact with customers on which relationship building depends is now
greatly reduced. Automatic teller machines and remote banking (via theinternet) may be a boon to banks’ balance sheets, but they remove theopportunity to help customers with the more complicated decisions
they need to make in their lives, particularly those concerning investments and pensions. Increasing familiarity, and comfort, with the internet may eventually enable banks and other financial services providers
to engage with customers at a more intimate level. But in the meantime,a return to good old-fashioned relationship building, based on staff
training that embraces business and social skills, will help restore someof the credibility these brands once had.
Overall, the best services brands are built around a unique businessidea or a compelling vision. When employees are excited by the proposition they will help to sustain it and communicate it to customers, suppliers and others through their enthusiasm and commitment.

Guidelines for good brand management
Some of the guidelines given below are eternal truths that apply equally
to product, services and corporate brands, and some apply particularly
to one category of brand or another.

 Protect your brand. Trade mark law offers provision for theprotection of your brand and corporate names, your logo andcolours, the shape of your packaging, smells, and the advertising
jingle you use. This protection can last indefinitely, subject topayment of a fee and the observation of some none too onerous
rules of use. Patent law allows you to protect your product forperiods of up to 20 years, provided the product is your invention
and is a novel or non-obvious idea. Copyrights allow you toprotect artistic, literary, dramatic and musical works for up to 50
years after the death of the author or originator. Protect theseelements of your brand on a wide geographical scale: you may
not yet be an international player, but the real opportunities arefor brands whose appeals are potentially universal.
 Honour your stakeholders. Your customers expect attractive,
well-differentiated products and services that will live up to their
expectations and are well priced. Your employees want to work

23

BRANDS AND BRANDING

for a company with a compelling business idea, where they feelengaged and where they can make a difference. Your
shareholders expect sound corporate governance and a wellmanaged company with a commitment to growing shareholder
value. Your trade partners want fairness and respect in theirdealings with you, and they want your reputation to enhancetheir own. Opinion leaders and industry commentators expect
performance, innovation, transparency and a sense of social
responsibility. Interest groups want you to listen and to act.
 Treat your brand as an investment, not a cost. Brands areamong the most important assets that a business can own, andstrong brands can ensure business continuity in times ofdifficulty. Brands must remain relevant to their customers,
contemporary and appealing. This means that sufficientinvestment must be made in advertising and marketing as well asin new product development. For many businesses active inmature markets, brand support and development is often the
single biggest item of overhead cost. Investors and analysts will,quite rightly, expect the management of the business to accountfor the effectiveness of this expenditure; but they will look in
vain at the balance sheet for evidence of this. Periodic valuationsof the brands in the business will help explain how successfully
management is steering the brands for the benefit of shareholders.
 Exploit the financial potential of your brand. As well as
seeking ways to extend the brand through new productdevelopment, companies should look at opportunities to exploit
the equity in their brands through co-branding, licensing andfranchising. Co-branding can be a highly cost-effective way ofentering new markets and geographical areas; the art is in findinga suitably compatible partner. Licensing is the granting of a rightto use a brand in relation to similar goods or services. However,the licensor must retain control over the quality of the goods andservices produced by the licensee and marketed under the brand(the practice is common in the brewing industry). Franchising is
the granting of a right to a number of licensees in different
geographical areas to use the brand together with a businesssystem developed by the licensor (this practice is common in fast
foods, print shops, florists and so on). Co-branding, licensing andfranchising can be highly lucrative ways of exploiting a brand,
broadening its exposure and enhancing its message.

24

WHAT IS A BRAND?

 Understand that successful brand management nowadays is acomplex task. It requires skills not normally associated with thetraditional marketing function. The ability to brief marketresearch companies, advertising agencies and designers, to liaise
with the sales and distribution people and to survive the odd
skirmish with the “bean counters” is no longer enough. Brand
managers certainly need to be adept in all these areas, but theyalso need to understand how a brand can be managed for the
benefit of shareholders. This requires an understanding of how,in financial terms, a brand contributes to the success of a businessand the creation of shareholder value. Managers of services
brands need to become adept at internal communication andtraining, to ensure that customer satisfaction is delivered
consistently in support of their brand’s promise. And if the brandis the corporation, the brand manager needs to understand notjust the subtle art of corporate communications but the infinitely
more demanding role of stakeholder accountability.

25

This page intentionally left blank2 Brand valuation
Jan Lindemann

If this business were split up, I would give you the land and bricks and mortar,and I would take the brands and trade marks, and I would fare better than you.
John Stuart, chairman of Quaker (ca. 1900)

n the last quarter of the 20th century there was a dramatic shift in theunderstanding of the creation of shareholder value. For most of the
century, tangible assets were regarded as the main source of businessvalue. These included manufacturing assets, land and buildings or financial assets such as receivables and investments. They would be valued
at cost or outstanding value as shown in the balance sheet. The market
was aware of intangibles, but their specific value remained unclear andwas not specifically quantified. Even today, the evaluation of profitability and performance of businesses focuses on indicators such as returnon investment, assets or equity that exclude intangibles from thedenominator. Measures of price relatives (for example, price-to-bookratio) also exclude the value of intangible assets as these are absent fromaccounting book values.
This does not mean that management failed to recognise the importance of intangibles. Brands, technology, patents and employees werealways at the heart of corporate success, but rarely explicitly valued.
Their value was subsumed in the overall asset value. Major brandowners like The Coca Cola Company, Procter & Gamble, Unilever and
Nestlé were aware of the importance of their brands, as indicated bytheir creation of brand managers, but on the stockmarket investors
focused their value assessment on the exploitation of tangible assets.

I

Evidence of brand value
The increasing recognition of the value of intangibles came with thecontinuous increase in the gap between companies’ book values andtheir stockmarket valuations, as well as sharp increases in premiums
above the stockmarket value that were paid in mergers and acquisitionsin the late 1980s. A study by the US Federal Reserve Board (see Figure2.1) shows the dramatic increase in the importance of intangibles tooverall corporate value in the second half of the 20th century.

27

BRANDS AND BRANDING

2.1

Hard to touchTangible assets as a percentage of all assets of non-financial businesses

80

70

60

50
1955

60

65

70

75

80

85

90

95

2000

Source: Federal Reserve Board

Today it is possible to argue that in general the majority of businessvalue is derived from intangibles. Management attention to these assets
has certainly increased substantially.
The brand is a special intangible that in many businesses is the mostimportant asset. This is because of the economic impact that brands
have. They influence the choices of customers, employees, investors andgovernment authorities. In a world of abundant choices, such influenceis crucial for commercial success and creation of shareholder value.
Even non-profit organisations have started embracing the brand as a key
asset for obtaining donations, sponsorships and volunteers.
Some brands have also demonstrated an astonishing durability. The
world’s most valuable brand,1 Coca-Cola, is more than 118 years old;
and the majority of the world’s most valuable brands have been aroundfor more than 60 years. This compares with an estimated average life
span for a corporation of 25 years or so.2 Many brands have survived astring of different corporate owners.
Several studies have tried to estimate the contribution that brands
make to shareholder value. A study by Interbrand in association with JP
Morgan (see Table 2.1) concluded that on average brands account for
more than one-third of shareholder value. The study reveals that brands

28

BRAND VALUATION

Table 2.1 The contribution of brands to shareholder value
Company
Coca-Cola
Microsoft
IBM
GE
Intel
Nokia
DisneyMcDonald’s
Marlboro
Mercedes-Benz

2002 brandvalue ($bn)
69.6
64.1
51.2
41.3
30.9
30.0
29.3
26.4
24.2
21.0

Brand contribution to market
capitalisation of parent company (%)
51
21
39
14
22
51
68
71
20
47

2001 brandvalue ($bn)
69.0
65.1
52.8
42.4
34.7
35.0
32.6
25.3
22.1
21.7

Source: Business Week, Interbrand/JP Morgan league table, 2002

create significant value either as consumer or corporate brands or as a
combination of both.
Table 2.1 shows how big the economic contribution made by brands
to companies can be. The McDonald’s brand accounts for more than
70% of shareholder value. The Coca-Cola brand alone accounts for 51%
of the stockmarket value of the Coca-Cola Company. This is despite thefact that the company owns a large portfolio of other drinks brands
such as Sprite and Fanta.
Studies by academics from Harvard and the University of South Carolina3 and by Interbrand4 of the companies featured in the “Best Global
Brands” league table indicate that companies with strong brands outperform the market in respect of several indices. It has also been shownthat a portfolio weighted by the brand values of the Best Global Brands
performs significantly better than Morgan Stanley’s global msci index
and the American-focused s&p 500 index.
Today leading companies focus their management efforts on
intangible assets. For example, the Ford Motor Company has reduced
its physical asset base in favour of investing in intangible assets. In
the past few years, it has spent well over $12 billion to acquire prestigious brand names such as Jaguar, Aston Martin, Volvo and Land
Rover. Samsung, a leading electronics group, invests heavily in its
intangibles, spending about 7.5% of annual revenues on r&d and29

BRANDS AND BRANDING

another 5% on communications.5 In packaged consumer goods, companies spend up to 10% of annual revenues on marketing support. As John
Akasie wrote in an article in Forbes magazine:6
It’s about brands and brand building and consumer
relationships … Decapitalised, brand owning companies canearn huge returns on their capital and grow faster,
unencumbered by factories and masses of manual workers.
Those are the things that the stockmarket rewards with highprice/earnings ratios.

Brands on the balance sheet
The wave of brand acquisitions in the late 1980s resulted in large
amounts of goodwill that most accounting standards could not deal
with in an economically sensible way. Transactions that sparked thedebate about accounting for goodwill on the balance sheet included
Nestlé’s purchase of Rowntree, United Biscuits’ acquisition and later
divestiture of Keebler, Grand Metropolitan acquiring Pillsbury andDanone buying Nabisco’s European businesses.
Accounting practice for so-called goodwill did not deal with theincreasing importance of intangible assets, with the result that companies were penalised for making what they believed to be valueenhancing acquisitions. They either had to suffer massive amortisation
charges on their profit and loss accounts (income statements), or they
had to write off the amount to reserves and in many cases ended up
with a lower asset base than before the acquisition.
In countries such as the UK, France, Australia and New Zealand it
was, and still is, possible to recognise the value of acquired brands as“identifiable intangible assets” and to put these on the balance sheet ofthe acquiring company. This helped to resolve the problem of goodwill.
Then the recognition of brands as intangible assets made use of a grey
area of accounting, at least in the UK and France, whereby companies
were not encouraged to include brands on the balance sheet but nor
were they prevented from doing so. In the mid-1980s, Reckitt & Colman,a UK-based company, put a value on its balance sheet for the Airwick
brand that it had recently bought; Grand Metropolitan did the samewith the Smirnoff brand, which it had acquired as part of Heublein. At
the same time, some newspaper groups put the value of their acquired
mastheads on their balance sheets.
By the late 1980s, the recognition of the value of acquired brands on

30

BRAND VALUATION

Average monthly return and risk of Interbrand Brand Portfolio
vs. market

2.2
2.1

%
2.0
Market (13,409 companies quoted at US exchanges)
Interbrand weighted portfolio by brand value
according to Best Global Brands studies

1.5

1.0

0.5

0.0
Average monthly return

ß (Risk of portfolio, 1 = market)

Source: Madden, T.J., Fehle, F. and Fournier, S.M., Brands Matter: An Empirical Investigation of Brand-building Activities and the Creation of Shareholder Value

the balance sheet prompted a similar recognition of internally generated
brands as valuable financial assets within a company. In 1988, Rank
Hovis McDougall (rhm), a leading UK food conglomerate, played heavily on the power of its brands to successfully defend a hostile takeoverbid by Goodman Fielder Wattie (gfw). rhm’s defence strategy
involved carrying out an exercise that demonstrated the value of rhm’s
brand portfolio. This was the first independent brand valuation establishing that it was possible to value brands not only when they had
been acquired, but also when they had been created by the company
itself. After successfully fending off the gfw bid, rhm included in its
1988 financial accounts the value of both the internally generated andacquired brands under “intangible assets” on the balance sheet.
In 1989, the London Stock Exchange endorsed the concept of brandvaluation as used by rhm by allowing the inclusion of intangible assets
in the class tests for shareholder approvals during takeovers. This
proved to be the impetus for a wave of major branded-goods companies to recognise the value of brands as intangible assets on their balance sheets. In the UK, these included Cadbury Schweppes, Grand
Metropolitan (when it acquired Pillsbury for $5 billion), Guinness, Ladbrokes (when it acquired Hilton) and United Biscuits (including theSmith’s brand).
Today, many companies including lvmh, L’Oréal, Gucci, Prada and31

BRANDS AND BRANDING

ppr have recognised acquired brands on their balance sheet. Some companies have used the balance-sheet recognition of their brands as aninvestor-relations tool by providing historic brand values and using
brand value as a financial performance indicator.
In terms of accounting standards, the UK, Australia and New Zealandhave been leading the way by allowing acquired brands to appear on
the balance sheet and providing detailed guidelines on how to deal withacquired goodwill. In 1999, the UK Accounting Standards Board introduced frs 10 and 11 on the treatment of acquired goodwill on the balance sheet. The International Accounting Standards Board followed suitwith ias 38. And in spring 2002, the US Accounting Standards Board
introduced fasb 141 and 142, abandoning pooling accounting and layingout detailed rules about recognising acquired goodwill on the balance
sheet. There are indications that most accounting standards, includinginternational and UK standards, will eventually convert to the US
model. This is because most international companies that wish to raise
funds in the US capital markets or have operations in the United States
will be required to adhere to US Generally Accepted Accounting Principles (gaap).
The principal stipulations of all these accounting standards are that
acquired goodwill needs to be capitalised on the balance sheet andamortised according to its useful life. However, intangible assets such asbrands that can claim infinite life do not have to be subjected to amortisation. Instead, companies need to perform annual impairment tests. If
the value is the same or higher than the initial valuation, the asset valueon the balance sheet remains the same. If the impairment value is lower,
the asset needs to be written down to the lower value. Recommended
valuation methods are discounted cash flow (dcf) and market value
approaches. The valuations need to be performed on the business unit
(or subsidiary) that generates the revenues and profit.
The accounting treatment of goodwill upon acquisition is an
important step in improving the financial reporting of intangibles
such as brands. It is still insufficient, as only acquired goodwill isrecognised and the detail of the reporting is reduced to a minor footnote in the accounts. This leads to the distortion that the McDonald’s
brand does not appear on the company’s balance sheet, even though
it is estimated to account for about 70% of the firm’s stockmarket
value (see Table 2.1), yet the Burger King brand is recognised on thebalance sheet. There is also still a problem with the quality of brandvaluations for balance-sheet recognition. Although some companies

32

BRAND VALUATION

use a brand-specific valuation approach, others use less sophisticatedvaluation techniques that often produce questionable values. The
debate about bringing financial reporting more in line with the realityof long-term corporate value is likely to continue, but if there isgreater consistency in brand-valuation approaches and greater reporting of brand values, corporate asset values will become much moretransparent.

The social value of brands
The economic value of brands to their owners is now widely accepted,
but their social value is less clear. Do brands create value for anyone
other than their owners, and is the value they create at the expense ofsociety at large?7 The ubiquity of global mega-brands has made branding the focus of discontent for many people around the world. They see
a direct link between brands and such issues as the exploitation ofworkers in developing countries and the homogenisation of cultures.
Furthermore, brands are accused of stifling competition and tarnishingthe virtues of the capitalist system by encouraging monopoly and limiting consumer choice. The opposing argument is that brands create substantial social as well as economic value as a result of increased
competition, improved product performance and the pressure on brandowners to behave in socially responsible ways.
Competition on the basis of performance as well as price, which isthe nature of brand competition, fosters product development andimprovement. And there is evidence that companies that promote theirbrands more heavily than others in their categories do also tend to be
the more innovative in their categories. A study by pims Europe for theEuropean Brands Association8 revealed that less-branded businesses
launch fewer products, invest significantly less in development andhave fewer product advantages than their branded counterparts.
Almost half of the “non-branded” sample spent nothing on product r&dcompared with less than a quarter of the “branded” sample. And while
26% of non-branded producers never introduced significant new products, this figure was far lower at 7% for the branded set.
The need to keep brands relevant promotes increased investments in
r&d, which in turn leads to a continuous process of product improvement and development. Brand owners are accountable for both thequality and the performance of their branded products and services andfor their ethical practices. Given the direct link between brand value andboth sales and share price, the potential costs of behaving unethically

33

BRANDS AND BRANDING

far outweigh any benefits, and outweigh the monitoring costs associated with an ethical business.
A number of high-profile brands have been accused of unethicalpractices. Interestingly, among these are some of the brands that havebeen pioneering the use of voluntary codes of conduct and internalmonitoring systems. This is not to say that these brands have successfully eradicated unethical business practices, but at least they aredemonstrating the will to deal with the problem.
The more honest companies are in admitting the gap they have tobridge in terms of ethical behaviour, the more credible they will seem.
Nike, a company once criticised for the employment practices of someof its suppliers in developing countries, now posts results of external
audits and interviews with factory workers at www.nikebiz.com. The
concern of multinational companies is understandable, considering thata 5% drop in sales could result in a loss of brand value exceeding $1 billion. It is clearly in their economic interests to behave ethically.

Approaches to brand valuation
Financial values have to some extent always been attached to brands
and to other intangible assets, but it was only in the late 1980s that valuation approaches were established that could fairly claim to understand and assess the specific value of brands. The idea of putting aseparate value on brands is now widely accepted. For those concernedwith accounting, transfer pricing and licensing agreements, mergers andacquisitions and value-based management, brand valuation plays a keyrole in business today.
Unlike other assets such as stocks, bonds, commodities and realestate, there is no active market in brands that would provide “comparable” values. So to arrive at an authoritative and valid approach, anumber of brand evaluation models have been developed. Most havefallen into two categories:

 research-based brand equity evaluations; purely financially driven approaches.
Research-based approaches
There are numerous brand equity models that use consumer research toassess the relative performance of brands. These do not put a financial
value on brands; instead, they measure consumer behaviour and attitudes that have an impact on the economic performance of brands.

34

BRAND VALUATION

Although the sophistication and complexity of such models vary, they
all try to explain, interpret and measure consumers’ perceptions that
influence purchase behaviour. They include a wide range of perceptive
measures such as different levels of awareness (unaided, aided, top ofmind), knowledge, familiarity, relevance, specific image attributes, purchase consideration, preference, satisfaction and recommendation.
Some models add behavioural measures such as market share and relative price.
Through different stages and depths of statistical modelling, thesemeasures are arranged either in hierarchic order, to provide hurdles thatlead from awareness to preference and purchase, or relative to theirimpact on overall consumer perception, to provide an overall brandequity score or measure. A change in one or a combination of indicators
is expected to influence consumers’ purchasing behaviour, which inturn will affect the financial value of the brand in question. However,these approaches do not differentiate between the effects of other influential factors such as r&d and design and the brand. They therefore do
not provide a clear link between the specific marketing indicators andthe financial performance of the brand. A brand can perform strongly
according to these indicators but still fail to create financial and shareholder value.
The understanding, interpretation and measurement of brand equity
indicators are crucial for assessing the financial value of brands. Afterall, they are key measures of consumers’ purchasing behaviour uponwhich the success of the brand depends. However, unless they are integrated into an economic model, they are insufficient for assessing the
economic value of brands.
Financially driven approaches
Cost-based approaches define the value of a brand as the aggregationof all historic costs incurred or replacement costs required in bringing
the brand to its current state: that is, the sum of the development costs,
marketing costs, advertising and other communication costs, and so on.
These approaches fail because there is no direct correlation between thefinancial investment made and the value added by a brand. Financial
investment is an important component in building brand value, provided it is effectively targeted. If it isn’t, it may not make a bean of difference. The investment needs to go beyond the obvious advertisingand promotion and include r&d, employee training, packaging andproduct design, retail design, and so on.

35BRANDS AND BRANDING

Comparables. Another approach is to arrive at a value for a brand on
the basis of something comparable. But comparability is difficult in thecase of brands as by definition they should be differentiated and thus
not comparable. Furthermore, the value creation of brands in the same
category can be very different, even if most other aspects of the underlying business such as target groups, advertising spend, price promotions and distribution channel are similar or identical. Comparables canprovide an interesting cross-check, however, even though they should
never be relied on solely for valuing brands.
Premium price. In the premium price method, the value is calculated as
the net present value of future price premiums that a branded productwould command over an unbranded or generic equivalent. However,the primary purpose of many brands is not necessarily to obtain a pricepremium but rather to secure the highest level of future demand. The
value generation of these brands lies in securing future volumes rather
than securing a premium price. This is true for many durable and nondurable consumer goods categories.
This method is flawed because there are rarely generic equivalents towhich the premium price of a branded product can be compared.
Today, almost everything is branded, and in some cases store brands
can be as strong as producer brands charging the same or similar prices.
The price difference between a brand and competing products can be
an indicator of its strength, but it does not represent the only and mostimportant value contribution a brand makes to the underlying business.
Economic use. Approaches that are driven exclusively by brand equity
measures or financial measures lack either the financial or the marketing
component to provide a complete and robust assessment of the economic value of brands. The economic use approach, which was developed in 1988, combines brand equity and financial measures, and has
become the most widely recognised and accepted methodology forbrand valuation. It has been used in more than 3,500 brand valuations
worldwide. The economic use approach is based on fundamental marketing and financial principles: The marketing principle relates to the commercial function thatbrands perform within businesses. First, brands help to generate
customer demand; customers can be individual consumers aswell as corporate consumers depending on the nature of the36

BRAND VALUATION

2.3
2.1

Brand valuation process
MARKET/CUSTOMERS

Financialanalysis

Demanddrivers

Competitive
benchmarking

Intangible
earnings

Role ofbranding

Brand
strengthBrand
earnings

Discount
rate

BRAND VALUE(net present value of future brand earnings)

business and the purchase situation. Customer demand translates
into revenues through purchase volume, price and frequency.
Second, brands secure customer demand for the long term
through repurchase and loyalty.
 The financial principle relates to the net present value of future
expected earnings, a concept widely used in business. The
brand’s future earnings are identified and then discounted to a
net present value using a discount rate that reflects the risk of
those earnings being realised.
To capture the complex value creation of a brand, take the following
five steps:
1 Market segmentation. Brands influence customer choice, but the
influence varies depending on the market in which the brand operates.
Split the brand’s markets into non-overlapping and homogeneousgroups of consumers according to applicable criteria such as product orservice, distribution channels, consumption patterns, purchase sophistication, geography, existing and new customers, and so on. The brand isvalued in each segment and the sum of the segment valuations constitutes the total value of the brand.

37

BRANDS AND BRANDING

2 Financial analysis. Identify and forecast revenues and “earnings
from intangibles” generated by the brand for each of the distinct segments determined in step 1. Intangible earnings are defined as brand revenue less operating costs, applicable taxes and a charge for the capital
employed. The concept is similar to the notion of economic profit.
3 Demand analysis. Assess the role that the brand plays in driving
demand for products and services in the markets in which it operates,and determine what proportion of intangible earnings is attributable tothe brand measured by an indicator referred to as the “role of branding
index”. This is done by first identifying the various drivers of demand
for the branded business, then determining the degree to which eachdriver is directly influenced by the brand. The role of branding index
represents the percentage of intangible earnings that are generated by
the brand. Brand earnings are calculated by multiplying the role ofbranding index by intangible earnings.
4 Competitive benchmarking. Determine the competitive strengths
and weaknesses of the brand to derive the specific brand discount ratethat reflects the risk profile of its expected future earnings (this is measured by an indicator referred to as the “brand strength score”). This
comprises extensive competitive benchmarking and a structured evaluation of the brand’s market, stability, leadership position, growth trend,
support, geographic footprint and legal protectability.
5 Brand value calculation. Brand value is the net present value (npv)of the forecast brand earnings, discounted by the brand discount rate.
The npv calculation comprises both the forecast period and the period
beyond, reflecting the ability of brands to continue generating future
earnings.
An example of a hypothetical valuation of a brand in one market segment is shown in Table 2.2.
This calculation is useful for brand value modelling in a wide rangeof situations, such as:

 predicting the effect of marketing and investment strategies; determining and assessing communication budgets; calculating the return on brand investment;
 assessing opportunities in new or underexploited markets; tracking brand value management.

38

BRAND VALUATION

Applications
The range of applications for brand valuation has widened considerably since its creation in 1988, and it is now used in most strategic marketing and financial decisions. There are two main categories ofapplications: Strategic brand management, where brand valuation focuses

mainly on internal audiences by providing tools and processes tomanage and increase the economic value of brands.
 Financial transactions, where brand valuation helps in a variety
of brand-related transactions with external parties.
Strategic brand management
Recognition of the economic value of brands has increased the demandfor effective management of the brand asset. In the pursuit of increasing
shareholder value, companies are keen to establish procedures for the
management of brands that are aligned with those for other businessassets, as well as for the company as a whole. As traditional purely
research-based measurements proved insufficient for understanding
and managing the economic value of brands, companies have adopted
brand valuation as a brand management tool. Brand valuation helps
them establish value-based systems for brand management. Economic
value creation becomes the focus of brand management and all brandrelated investment decisions. Companies as diverse as American
Express, ibm, Samsung Electronics, Accenture, United Way of America,bp, Fujitsu and Duke Energy have used brand valuation to help themrefocus their businesses on their brands and to create an economic rationale for branding decisions and investments. Many companies havemade brand value creation part of the remuneration criteria for seniormarketing executives. These companies find brand valuation helpful forthe following: Making decisions on business investments. By making the brandasset comparable to other intangible and tangible company
assets, resource allocation between the different asset types canfollow the same economic criteria and rationale, for example,
capital allocation and return requirements.
 Measuring the return on brand investments based on brand value
to arrive at an roi that can be directly compared with otherinvestments. Brand management and marketing service providers

39

Year 1
250,000,000

Year 2
258,750,000
4%Year 3
267,806,250
4%Year 4
277,179,469
4%Year 5286,880,750
4%Market share (Volume)
VolumePrice ($)
Price change

15%37,500,000
10

17%43,987,500
10
3%

19%
50,883,188
10
2%

21%
58,207,688
11
2%

20%
57,376,150
11
2%

Branded Revenues
Cost of sales
Gross margin

375,000,000
150,000,000
225,000,000

450,871,875
180,348,750
270,523,125

531,983,725
212,793,490
319,190,235

621,341,172
248,536,469
372,804,703

625,326,631
250,130,653
375,195,979

Marketing costs
Depreciation
Other overheads
Central cost allocation

67,500,000
2,812,500
18,750,000
3,750,000

81,156,938
3,381,539
22,543,594
4,508,719

95,757,071
3,989,878
26,599,186
5,319,837

111,841,411
4,660,059
31,067,059
6,213,412

112,558,794
4,689,950
31,266,332
6,253,266

EBITA (Earnings Before Interest, Tax
and Amortisation)
Applicable taxes
35%

132,187,500

158,932,336

187,524,263

219,022,763

220,427,638

46,265,625

55,626,318

65,633,492

76,657,967

77,149,673

NOPAT (Net Operating Profit After Tax)

85,921,875

103,306,018

121,890,771

142,364,796

143,277,964

Market (Units)
Market growth rate

BRANDS AND BRANDING

40
Table 2.2 Sample brand value calculation

Capital Employed
Working capital
Net PPE
Capital Charge

8%

Intangible Earnings

Year 1

Year 2

Year 3

Year 4

Year 5

131,250,000
112,500,000
18,750,000

157,805,156
135,261,563
22,543,594

186,194,304
159,595,118
26,599,186

217,469,410
186,402,351
31,067,059

218,864,321
187,597,989
31,266,332

10,500,000

12,624,413

14,895,544

17,397,553

17,509,146

75,421,875

90,681,606

106,995,227

124,967,243

125,768,819

59,583,281

71,638,469

84,526,229

98,724,122

99,357,367

55,477,916

62,106,597

68,230,515

74,200,384

69,531,031

Role of Branding Index 79%
Brand Earnings
Brand Strength Score
66
Brand Discount Rate 7.4%
Discounted Brand Earnings

NPV of Discounted Brand Earnings (Years 1-5) 329,546,442
Long term growth rate 2.5%
NPV of Terminal Brand Value (beyond Year 5) 1,454,475,639
Brand Value

1,784,022,082
BRAND VALUATION

41

BRANDS AND BRANDING

can be measured against clearly identified performance targets
related to the value of the brand asset.
 Making decisions on brand investments. By prioritising them bybrand, customer segment, geographic market, product or service,
distribution channel, and so on, brand investments can beassessed for cost and impact and judged on which will produce
the highest returns.
 Making decisions on licensing the brand to subsidiary companies.
Under a licence the subsidiaries will be accountable for thebrand’s management and use, and an asset that has to be paid forwill be managed more rigorously than one that is free.
 Turning the marketing department from a cost into a profit centre
by connecting brand investments and brand returns (royalties
from the use of the brand by subsidiaries). The relationshipbetween investments in and returns from the brand becomestransparent and manageable. Remuneration and careerdevelopment of marketing staff can be linked to and measured
by brand value development.
 Allocating marketing expenditures according to the benefit eachbusiness unit derives from the brand asset.
 Organising and optimising the use of different brands in thebusiness (for example, corporate, product and subsidiary brands)
according to their respective economic value contribution.
 Assessing co-branding initiatives according to their economic
benefits and risks to the value of the company’s brand.
 Deciding the appropriate branding after a merger according to aclear economic rationale.
 Managing brand migration more successfully as a result of abetter understanding of the value of different brands, andtherefore of what can be lost or gained if brand migration occurs.
 Establishing brand value scorecards based on the understandingof the drivers of brand value that provide focused and actionablemeasures for optimal brand performance.
 Managing a portfolio of brands across a variety of markets. Brand
performance and brand investments can be assessed on an
equally comparable basis to enhance the overall return from thebrand portfolio.
 Communicating where appropriate the economic value creationof the brand to the capital markets in order to support shareprices and obtain funding.

42

BRAND VALUATION

Financial transactions
The financial uses of brand valuation include the following: Assessing fair transfer prices for the use of brands in subsidiarycompanies. Brand royalties can be repatriated as income tocorporate headquarters in a tax-effective way. Brands can belicensed to international subsidiaries and, in the United States, tosubsidiaries in different states.
 Determining brand royalty rates for optimal exploitation of thebrand asset through licensing the brand to third parties.
 Capitalising brand assets on the balance sheet according to US
gaap, ias and many country-specific accounting standards.
Brand valuation is used for both the initial valuation and theperiodical impairment tests for the derived values.
 Determining a price for brand assets in mergers and acquisitions
as well as clearly identifying the value that brands add to atransaction.
 Determining the contribution of brands to joint ventures toestablish profit share, investment requirements and shareholdingin the venture.
 Using brands for securitisation of debt facilities in which therights for the economic exploitations of brands are used ascollateral.

Conclusion
As global competition becomes tougher and many competitive advantages, such as technology, become more short-lived, the brand’s contribution to shareholder value will increase. The brand is one of the few
assets that can provide long-term competitive advantage.
Despite the commercial importance of brands, the management ofthem still lags behind that of their tangible counterparts. Even thoughmeasurement has become the mantra of modern management, it is astonishing how few agreed systems and processes exist to manage the brandasset. When it comes to managing and measuring factory output the
choice of measures is staggering, as are the investments in sophisticatedcomputer systems that measure and analyse every detail of the manufacturing process. The same is true for financial controlling. But, strangely,
this cannot be said for the management of the brand asset. Althoughmany brand measures are available, few can link the brand to long-term
financial value creation. Nor has investment in brand management43

BRANDS AND BRANDING

reached a level or sophistication comparable with other controllingmeasures. As the importance of intangibles to companies increases,
managers will want to install more value-based brand management systems that can align the management of the brand asset with that ofother corporate assets.
There is a similar lack of detail about the contribution of brands inthe financial reporting of company results. Investments in and returns
from tangible assets are reported at sophisticated and detailed levels,
but this is not true for intangible assets. For example, Coca-Cola’s balance sheet, income statement and cash flow calculation tell us about
working capital, net fixed assets and financial investments, but little
about the performance of the most important company asset, the CocaCola brand. The same is true for most other brand-owning companies.
Current accounting regulations are deficient in their treatment of intangible assets. The increasing value placed on intangibles through mergers
and acquisitions over the past two decades has forced accounting standards to acknowledge and deal with intangible assets on the balance
sheet. However, the standards deal only with the bare minimum
accounting for acquired intangibles, formerly known as goodwill. As abizarre consequence, the value of acquired brands is included in companies’ balance sheets but the value of internally generated brands
remains unaccounted for.
Overall, there is an increasing need for brand valuation from both amanagement and transactional point of view. With the development of
the economic use approach, there is at last a standard that can be used
for brand valuation. This may well become the most important brandmanagement tool in the future.

Notes and references
1 “The Best Global brands”, BusinessWeek, August 6th 2002.
2 Foster, R. and Kaplan, S., Creative Destruction: Why Companies That
Are Built to Last Underperform the Market – And How to Successfully
Transform Them, Doubleday, 2001.
3 Madden, T.J. (University of South Carolina), Fehle, F. (University ofSouth Carolina) and Fournier, S.M. (Harvard University), Brands
Matter: An Empirical Investigation of Brand-Building Activities and theCreation of Shareholder Value, unpublished paper, May 2nd 2002.
4 Interbrand, Brand Valuation, March 2003, p. 3.
5 K.W. Suh, manager, global marketing, Samsung Electronics,
interview, August 6th 2003.

44

BRAND VALUATION

6 Akasia, J.F., “Ford’s Model E”, Forbes, July 17th 2000, pp. 30–34.
7 Examples are Klein, N., No Logo, Picador, 1999; Philip Kotler,interview in the Financial Times, May 31st 2003.
8 PIMS (Profit Impact of Marketing Strategy), “Evidence on thecontribution of branded consumer business to economic growth”,
PIMS Europe, London, September 1998.

45

This page intentionally left blank3 The social value of brands
Steve Hilton

ew propositions are more likely to unleash a barrage of antiglobalisation chuntering than the suggestion that brands have asocial value. Ask consumers to explain their brand preferences in thelimited context of their own personal experience, and they will happily
extol the virtues of McDonald’s, Coca-Cola, Nike, and so on: “greatvalue”, “a refreshing treat”, “cool shoes” are typical responses. But tip
the conversation into the more abstract arena of the role that thesebrands play in society, and you may well get the response “the Americans are taking over the world”, “junk food is making our kids fat” and“third-world workers are being exploited”. Open any newspaper andyou may find praise in the business pages for a leading brand’s financial
performance, tempered elsewhere in the same publication by agonised
hand-wringing over the impact of this or that brand on our communities, our values and our way of life. Brands, it seems, are great for “us”
but disastrous for “them” – good for business, bad for society.
When so much of the wealth that underpins personal and family
well-being derives from the commercial success of brands, it is curiousthat brands’ overall social impact is generally regarded in a negative
light. When so many of the innovations that improve the quality of life
for individuals and communities around the world are generated bybrands, it seems extreme to label them all as members of a sinister anddestructive McAxis of Evil. Given the energy, brainpower and creativity
that are devoted to creating and building brands, there must be a moreconstructive analysis available than an angry assumption that big business is basically bad. Could it not be argued that the very things that areeasiest to dislike about brands – their cultural power, their economic
clout, their global reach – might actually serve as positive forces forgood in society?
These are the questions that this chapter tackles. The aim is to offer apositive re-evaluation of the role of brands in society, a counterpoint tothe criticism of brands that has aroused such attention in recent years.
Of course, it would be fatuous to suggest that brands’ social role is consistently and universally positive. But any balanced assessment of their

F

47

BRANDS AND BRANDING

true social value has to start by acknowledging that brands are not, apriori, the enemies of social progress. It is possible to go further than thisand argue that brands are in fact a great ally of social progress:

 Brands foster customer loyalty, leading to more reliable company
earnings and therefore higher and more sustainable levels of
employment and wealth creation.
 Brands are a spur to innovation, ensuring that companies cancapture appropriate returns from investments they make inimproved products and services.
 Brands provide a reliable mechanism for consumer protection.
 Brands create pressure for corporate social responsibility.
 Brands provide a platform for corporate social leadership.
 Brands play a progressive social role through the opportunities
they create for the not-for-profit sector.
 Lastly, there is a sense in which brands promote social cohesion,both nationally and globally, by enabling shared participation in
aspirational and democratic narratives.

These are the “seven social wins” of brands, and it is no exaggeration
to argue that branding, in these seven crucial ways, represents one of
the most powerful and wide-ranging forces at our disposal for positivesocial change.

Brands and wealth creation
The rise of the consumer society in the developed world is frequently
blamed for many ills but rarely praised for its principal social contribution: generating the wealth that pays for and sustains social progress.
Long-term improvements in health, education, living standards andopportunities depend on the process of wealth creation, and although
wealth creation is a process normally associated with “capitalism”
alone, the connection between capitalism, consumers and brands israrely made explicit. But capitalism cannot work without a consumer
society, and a consumer society is impossible without brands.
Brands arose in the 19th century as a form of consumer protection in
the industrial age. Mass migration to cities meant that people no longer
knew the precise provenance of the various products they bought, andbranding provided a useful substitute for personal knowledge of producers. But branding also provided the crucial component for economic
growth and development: the possibility of scale. Without brands, pro-48

THE SOCIAL VALUE OF BRANDS

ducers of consumer goods would have been limited to selling their products to a small pool of local customers. Through their newly createdbrands, pioneers like Cadbury’s and Kellogg’s were able to expand theiroperations from the local to the national and then the global.
More customers led to increased sales and to more need for theindustrial infrastructure to meet growing consumer demand. Workers
became more productive, and because there were more than enoughcustomers who wanted to buy the goods they made, the workers
became more valuable, and were therefore paid more. This in turnmade more money available to pay for the increased supply of goods
produced, and so on. At the same time, global trade meant that goods
could be bought from and sold to people in other countries, and raw
materials could be imported in order to turn them into higher-priced
goods that other people wanted to buy. This upward spiral – actuallynothing more complicated than people making, buying and selling moreof the things they wanted – made possible a huge growth in tax revenues that could be spent on social goods such as sanitation, health careand education.
This first great leap forward in global prosperity and living standards
was of course limited to North America and Europe, and it is no coincidence that the world’s biggest and most successful brands today arebased in the world’s richest countries. But these brands aren’t there
because the countries are rich: the countries are rich because they havethe brands. Without brands, modern capitalism falls apart. No brand: noway to create mass customer loyalty; no customer loyalty: no guaranteeof reliable earnings; no reliable earnings: less investment and employment; less investment and employment: less wealth created; less wealth:lower government receipts to spend on social goods.

Brands and socially beneficial innovation
The social value of brands in the process of wealth creation is important, but indirect. It lies principally in brands’ contribution to the publicpurse. When it comes to innovation, however, the social value ofbrands can be seen more directly. Here, it lies in brands’ contribution topersonal and community well-being through the development ofsocially beneficial new products and services.
This contribution is by no means universally understood or accepted.
Indeed, it is easy to criticise the seemingly unstoppable brand marketingjuggernaut that forces new and increasingly decadent branded fripperies into the shopping baskets of gullible consumers. Detractors might49

BRANDS AND BRANDING

ponder whether a world in which billions of people still do not have areliable source of clean water really needs toilet paper infused with aloevera; or whether the invention of mobile phones that alert their owners
to an incoming call with demotic approximations of much-loved tunes
is a sensible priority when developing countries cannot offer basic education to most of their children.
But it is more constructive to examine how brands affect the processof innovation, which can lead directly to better social outcomes. In
doing so, it is important to remember that the brand, not the company
or its inventors, is the essential component. Without a brand, companies
would not risk innovating, since they would not be able to associate
new products and services with their own efforts and investments, andwould therefore not be able to capture the benefits of innovation.
In Brazil, Unilever’s Ala brand detergent was created specifically tomeet the needs of low-income consumers who wanted an affordable
but effective product for laundry that is often washed by hand in riverwater. In India, Unilever’s sales in rural areas represent as much as 55%
of turnover. The company has therefore developed specifically affordable products, such as low-cost tooth powder and fortified staple foods,
including flour enriched with extra iron and vitamins (six in every ten
women and children in India are iron-deficient). It has also created arange of pack sizes for products such as salt enriched with iodine thatcan be bought in small, affordable units. In Tanzania, where half the
population earns less than $1 a day, Unilever’s new company has set up
a bicycle brigade of salespeople drawn from local unemployed youngsters to supply small shops with products such as Key soap, sold insmall units for a few cents. A year after its launch, the soap’s affordability and availability earned it a market share of around 10%. All thesebranded innovations deliver direct business benefits to Unileverthrough increased sales. And yet they deliver powerful social benefits
too, contributing to improved hygiene and nutrition and thereby helping to tackle disease and infant mortality.
In the UK, mobile phone brand O2 is pioneering ways to harness its
technology for social applications. One example is an innovation that
benefits asthma sufferers. Using an electronic peak-flow meter connected to O2’s xda product (a colour personal digital assistant or pda
with integrated pc capability and mobile handset), patients can gather,record and submit accurate asthma data in real time, allowing theirdoctor to monitor their health and manage their treatment in a moreproactive and responsive way than has previously been possible.

50

THE SOCIAL VALUE OF BRANDS

Patients benefit through greater reassurance and improved quality oflife, and the health-care system benefits through fewer avoidable emergency hospitalisations and call-outs, resulting in time and cost efficiencies. Mobile phone picture messaging, on the surface a candidate for theuseless fripperies pile, is demonstrating its social value in an increasingly broad range of contexts. For example, it enables local-authority
tree surgeons to take pictures of fallen trees and send them immediately
to colleagues to help assess the type of response needed, saving time
and taxpayers’ money, and improving local environments.
Behind every great brand lies a valuable social benefit delivered
through innovation. Procter & Gamble’s Pampers brand of nappies
bases all its innovation and marketing on a simple proposition: a dry
baby is a happy baby. As a result, millions of mothers all over the world
have happier babies thanks to Pampers products. Take away the Pampers brand, and you take away any incentive for Procter & Gamble todevelop new products that make babies (and mothers) happy. Even themost trenchant critics of Bill Gates and Microsoft would acknowledge
the social value unleashed by enabling individuals, businesses andsocial organisations to transform their effectiveness through personal
computing and accessible software. But would any of it have happened
if consumers had not been able to associate the new computing products with the Microsoft name? For those on the Apple side of the global
software divide, the point remains the same: it’s the Apple brand thatenables people to “Think Different”. Wal-Mart, the world’s biggest company, is as successful as it is because it continues to find new ways todeliver what is an indisputably social brand mission: to lower the costof living for everyone.
Value, choice, effectiveness, taste, functionality, convenience: inorder to prosper, businesses have to offer consumers these benefits, andwhen they do, people’s lives are improved. Without brands, there
would simply be no point in businesses competing, investing and innovating in order to offer ever-greater numbers of people around theworld more and more of these valuable social benefits.

Brands and consumer protection
As well as any specific social benefits that brands may create, they canalso act as a powerful mechanism for consumer protection. It is often
assumed that regulation is the consumer’s best protection against poorquality goods and services. Of course it is true that regulation plays avital role in enforcing and raising standards in this field as in many

51

BRANDS AND BRANDING

others. But how could regulation work without brands? What would
the regulators regulate? What could the inspectors inspect?
Even without a regulatory constraint, brands provide an in-built
market mechanism for consumer protection. The need of brands tocreate and maintain customer loyalty is a powerful incentive for themto guarantee quality and reliability. Sony endeavours to ensure that its
televisions do not malfunction so that those who buy them might subsequently return to the Sony brand for a video-games console that theyknow will work. The management of Electrolux does not need a regulator to force it to make domestic appliances that do not electrocute theirusers. When something does go wrong, as in well-known instances suchas Johnson & Johnson discovering that bottles of its Tylenol painkiller
capsules had been laced with cyanide, or Perrier water and benzene
contamination, consumers are best protected when a brand is involved,
as the company that owns the brand will urgently want to put things
right.
In this sense, famous and striking brands perform a far more positivesocial role than, as their detractors often claim, simply polluting public
space with garish logos and images. Brands are a mark of standards ofquality and reliability as powerful as any regulator’s kitemark or stampof approval. Certain types of western tourists, keen to visit parts of theworld that afford them a different cultural and aesthetic experiencefrom the one back home, may throw their hands up in horror when
they see the famous and ubiquitous Coca-Cola logo dogging their every
footstep as they press on optimistically in search of an unspoiled
ancient civilisation, desert, temple, jungle or beach. But with the promiseof elephants bathing in the local river the following day, there is a surprising lack of revulsion at the ubiquitous yellow of the Kodak film
boxes that fill the local shops. Kodak yellow means the film will work;
Coca-Cola red means the drink will quench your thirst and not poison
you; Nivea blue means the cream will not give you a rash. These are nottrivial advantages, and they are guaranteed by brands.
Anti-corporate campaigners regularly advise consumers to boycott
big brands and to support small, local businesses. There may be anumber of good reasons to do this, but consumer protection is not oneof them. In May 2003, the UK’s Food Standards Agency published areport warning of the severe dangers to public health associated with
fast-food outlets in the UK. Guess what? The agency was not talking
about McDonald’s with its valuable brand to protect: it was warning
consumers about the small, local fast-food outlets that have a barely52THE SOCIAL VALUE OF BRANDS

nodding acquaintance with health and safety regulations. If we are concerned about consumer protection, it is not well-known brand-namecompanies we should be worried about, but the little-known or
unbranded ones.

Brand pressure for corporate social responsibility
Product health and safety is one dimension of a tide that is lapping evermore insistently at the feet of policymakers in the private, public andnot-for-profit sectors alike: corporate social responsibility (csr). To
observers of a sceptical disposition, csr represents either the apogee ofcynical spin, or just the latest gimcrack management fad. It highlights thealleged social costs of brands, rather than their social value, since csr ischiefly concerned with identifying and making good these social costs.
Frankly, the costs are often real ones. There is no need to don a balaclava and participate in a May Day protest in order to be troubled bymany aspects of contemporary business behaviour. Companies bothlarge and small behave in ways that fully deserve the strongest condemnation. Too many think nothing of despoiling the environment,
damaging local communities, covering up health risks associated with
their products, exploiting their workers, misleading their customers andgenerally trying to make a quick buck whatever the social or environmental consequences. The purpose of csr is to reduce such negative
impacts of business activity by making the case, and providing the management tools, for companies to minimise risks arising from their socialand environmental performance.
But the pressure for csr is felt most by companies that have brandreputations to build and protect, because they have the greatest incentive to ensure that their social and environmental impact is as positive
as possible. This works in two ways.
First, there is a straightforward, and positive, commercial process atwork. Building and protecting a brand reputation, as described elsewhere in this book, is not just a question of maintaining a consistentvisual identity and commissioning memorable advertising campaigns. It
means being seen as a decent place to work, a trustworthy business
partner and a good neighbour, welcome in any community. These
values (along with useful and reliable products and services) are thebuilding blocks of csr, and are instinctively the practice of most successful brands. For decades, and certainly long before the current prominence in business discourse of the language of csr, brands like Shell,
McDonald’s and Nike have been carrying out what would today be

53

BRANDS AND BRANDING

What are the things that matter most to you in forming
an impression of a particular company?
Responsibility (employee treatment,
community commitment,
ethics, environment)

56%

Product/
brand quality

Business/financial
performance

3.1
2.1

40%

34%

Source: MORI/Environics, 25,000 adults in 23 countries, May 1999

described as csr activities, simply because they are part and parcel ofbuilding a successful brand. Shell’s commitment to its employees,
McDonald’s support for the local communities near its restaurants andNike’s emphasis on environmental stewardship are good examples.
The selection of these three brands is deliberately provocative, since
they illustrate the second way in which brands create pressure for csr:
by ensuring that companies react to criticism and adapt to society’schanging expectations (Figure 3.1). Although this second process is moredefensive than the one outlined above, it too highlights an important
aspect of the social value of brands.
Shell, shocked by activists’ campaigning against both its planned disposal of the Brent Spar oil platform in the North Sea and its humanrights record in Nigeria, has in recent years transformed itself from
corporate pariah to corporate paragon, inspiring and teaching a wide
range of global companies to follow suit. But without the Shell brand totry to tarnish, the activists would have struggled to make an impact, andthe now considerable body of progressive work on csr that Shell has
pioneered would never have been undertaken.
McDonald’s, stung by criticism of its supply chain policies, has pioneered new standards of animal welfare that have won the praise offormer critics such as Compassion in World Farming. Its commitment to54

THE SOCIAL VALUE OF BRANDS

csr, combined with its marketplace clout as a global brand leader, has
led to significant improvements throughout the agricultural supply
chain around the world, the benefits of which extend far beyond theimmediate requirements of McDonald’s itself. Indeed, the fact that
McDonald’s is a successful global brand means that it exports higher
csr standards when it enters new, less-developed markets. Critics in the
United States may not think that a “McJob” adds up to much, but informer communist countries, the training and superior working conditions at McDonald’s make employment there one of the most soughtafter options available. Similarly, the need to achieve cost efficiencies
through global standardisation means that environmental or health andsafety standards will usually be set in line with the most stringent global
requirements, meaning that in many countries the local McDonald’s
restaurant is a beacon of best practice.
Nike, reeling from the “sweatshops” scandals of the 1990s, has
become a leading player in tackling the complex causes of poor working
conditions and human rights abuse in the developing world. This is not
to condone practices like child labour and forced overtime, merely tonote that these were not created by Nike (or any other western brandthat sources its products in East Asia) and that without brands, there
would be precious little awareness of the problems today. The brutal
truth is a simple one: no logo, no knowledge of what is going on in thedeveloping world. Global brands make the connection on a mass scale
between consumer choices “here” and economic and social realities“there”. Brands are the transmission mechanism through which we canmost clearly understand the consequences – good and bad – of businessbehaviour, and work to eliminate the bad in favour of the good.
In other words, the argument is the opposite of the one that anti-globalisation and anti-capitalist activists would have us believe. Far from
causing bad outcomes for society, brands are revealing them. Brands do
not lead to social and environmental damage; they are helping to deal
with it in their capacity as the public face of private-sector activity.
Brands are a battering ram for positive social change. In part, positivesocial change is a process that goes hand in hand with economic development, in the same way that social conditions in the rich West have
improved since the Victorian era. But in the developing world today, it
is happening more quickly than it otherwise would specifically becauseof corporations’ need to protect brand value by meeting consumers’
expectations of how companies should behave.
Importantly, these positive csr effects can be seen not simply in the55

BRANDS AND BRANDING

direct activities of brands themselves, but in the activities of all the othercompanies that are involved in producing the products or services thata brand represents. Brands face risks both from their own behaviour insociety, and from the behaviour of their multiplicity of suppliers. So
brand owners are now working to help their business partners improvetheir own social and environmental performance, in the process spreading best practice around the world and down to the grass roots. No one
doubts that there is an enormous distance to travel before we can confidently assure ourselves that the social and environmental impact ofbusiness is wholly positive; but equally, no one should doubt the vitalrole of brands in this optimistic journey.
However, there is more to the social value of brands than the pressure they create for companies to be more responsible. They offer theopportunity for companies to go further than simply complying withsociety’s expectations. They offer companies a way to carry out, andbenefit from, activities that make a direct and active business contribution to tackling social and environmental problems. Brands can be theplatform for corporate social leadership.

Brands and corporate social leadership
The difference between corporate social responsibility and corporatesocial leadership is the difference between defence and attack in football. One is mainly reactive: responding to attacks; the other is always
proactive: actively scoring goals. Responsibility and leadership, defence
and attack: every good business, like every good football team, needs
both. But while the contours of the csr landscape are becoming increasingly well defined, the exhilarating opportunities for corporate social
leadership by brands are not yet well enough understood. The threemost important ways in which brands create social leadership opportunities for corporations are:

 harnessing the cultural power of brands for positive socialchange; harnessing innovation for social gain;
 applying brand power to the urgent task of spreading the benefitsof globalisation more widely.

Elsewhere in this book, readers will gain an understanding of the economic value of brands; how many calculate their worth with forensic
actuarial rigour so they can be included on corporations’ balance sheets;

56

THE SOCIAL VALUE OF BRANDS

how these valuations often place the brand way above tangible assets
as a source of long-term value. Marketing professionals treat theirbrands’ customer relationships with the greatest respect, often going to
extraordinary lengths to understand consumer needs and desires. Moreoften than not, they seek to imbue brands with a sense of meaning thatconveys more than just the functional benefits of whatever is being promoted. Brands lay claim to a social role too. However, it is rare to see
these claims backed up by concrete social action. More usually, they are
artificial constructs designed solely to identify with consumers’ social
concerns, rather than to do anything about them. This does not makebrands a bad thing, but it does help explain why some anti-corporate
critics profess to hate them so much.
When communicating with consumer audiences, companies invest
far more time, effort and money in building a positive image for theirbrands than they do in promoting their reputation as a corporation.
Indeed, one of the primary aims of anti-globalisation campaigners is to
expose what they see as the vast gulf between the wholesome, upbeat
images that companies develop for their brands, and the allegedly
destructive, irresponsible behaviour of the brands’ corporate parents.
They are starting to succeed, with opinion polls regularly recording low
levels of trust in “large companies” (Figure 3.2). But when consumers are
asked for their opinions of individual brands, their views are far morefavourable – particularly in the United States (Figure 3.3); and this trustin brands, as opposed to business generally, gives corporations a readymade tool for social leadership. Consumer trust in brands could become
a valuable asset in campaigns for social change, and campaigning forsocial change could become an additional source of value for the corporations behind the brands.
Think about the range of social issues that governments and not-forprofit organisations wrestle with on a daily basis. Many of them are
hard to deal with using conventional tools: passing laws and spending
money. Issues such as literacy, where in rich societies the greatest needis not for more books, but for more parents to read with their children
from an early age. Issues such as health, where more informed and positive lifestyle choices, rather than more effective (and expensive) treatments, are the real policy prize. Issues such as youth crime andanti-social behaviour, care for the environment, giving young people asense of purpose, galvanising community spirit, mental health problems
and drug abuse. For all these and more, the social policy requirement isfor a change of attitude and a change of behaviour. It is the same in the57

BRANDS AND BRANDING

2.1
Trust in institutions’ ability to operate in society’s best interests 3.2
Armed forces
26
32
NGOs
36
Education system
34
UN
Religious institutions
38
Police40
Health systems
40
WTO
39
Government
43
Press/media
43
Trade unions/labour
45
41
World Bank
Legal system 49
41
IMF
Global companies
48
Large national companies 52
Parliament/Congress 51

69
59
62
55
57
57
57
44
50
49
47
43
47
39
39
42
33

NET RATING
+43
+27
+26
+21
+19
+17
+17
+5
+3
+3
+2
+2
-2
-2
-9
-10
-13

Source: Gallup/Environics poll for World Economic Forum 2003

developing world: governments and aid agencies can pump billions intodisease-eradication programmes, but these will only work if attitudes
and behaviours also change.
The institutions that are best placed to help change people’s attitudes
and behaviour are brands, and this is why brands’ cultural power, as
well as their economic power, is potentially such a huge component of
their social value. Using their brands for social change is one of the mosteffective ways in which corporations can quickly move beyond csr todemonstrate real leadership. This is emphatically not the same asbrands linking up with charities or good causes for mutually beneficial
promotional campaigns. This is about a corporation using its brand’s
ability to change consumer behaviour as a way of changing social
behaviour at the same time, thereby strengthening that brand’s reputation.
Still the best example of this approach in action is the “pro-social” (asit calls it) brand agenda of mtv. For two decades, mtv has placedsocial-issue campaigning at the heart of its brand, and has used this technique as a powerful and distinctive method of communicating andidentifying with its target audience. In the process, it has done morethan any other commercial organisation to tackle cultural taboos andchange youth attitudes on issues such as hiv and aids, environmental
protection and human rights – not to mention its pioneering role in pro-58

THE SOCIAL VALUE OF BRANDS

3.3
2.1

Levels of trust in brands in the United States%

69

Johnson & Johnson
Coca-Cola
Microsoft
Ford Motor
McDonald’s
Bayer
PfizerWorld Wildlife Fund
Merck
Nike
Amnesty
Greenpeace
Dow Chemicals
Citicorp
Monsanto
BASF
ExxonMobil
Deutsche BankRoyal Dutch/Shell
Unilever
Oxfam
HSBC

66
59
56
55
54
52
49
47
47
45
41
40
37
36
36
35
30
29
25
16
13
0

10

20

30

40

50

60

70

Source: Fourth Edelman Survey on Trust and Credibility

moting youth participation in the electoral process through its high profile “Rock the Vote” campaign.
More recent examples demonstrate the range of potential applications:

 the UK’s Sky satellite service harnessing the youth appeal of its

brand to inspire teenagers about their future choices through its“Reach For The Sky” initiative; Kia cars encouraging its customers to use their vehicles
responsibly through its “Think Before You Drive” campaigning,
and its support for walking buses that enable children to walk toschool safely, reducing traffic congestion from the school run; Coca-Cola using its marketing expertise to help create sexual
health campaigns in Africa, the best long-term solution to theaids pandemic;
 Avon cosmetics raising awareness of breast cancer and offering
its customers practical advice and support;
 Asda supermarkets in the UK using their trusted role in local
communities to campaign on issues from crime prevention todomestic violence.

59

BRANDS AND BRANDING

It is simply a question of finding creative connections between brandtrust and those social issues where a change of attitude can make all thedifference.
The second way in which brands can demonstrate social leadershipis through making explicit one of the aspects of brands’ social value
reviewed earlier: their role in producing socially beneficial product andservice innovation. By incorporating social needs in the innovation process, commercial brands can often make a more tangible and sustainable impact on social and environmental problems than governments
can. On a grand scale, this can be seen in the development by theworld’s leading car manufacturers of vehicles that run on alternative
fuels, or the investment by oil companies like bp and Shell in solar
power and other renewable energy sources. On a more localised level,
the creation by hsbc of financial services products, including mortgages, that are consistent with Sharia law, shows how it is possible forbrands in any sector to turn social needs into market opportunities.
The third way in which brands can deliver corporate social leadership is the most ambitious, but it is also the most important. Just as
brands have become the transmission mechanism for raising awarenessof issues such as sweatshops and child labour, they could also be thetransmission mechanism for raising awareness and spurring action on
the principal cause of global poverty, the real reason why globalisation’s
benefits are not spread more widely. This is the stark division of the
global economy between the formal and informal sectors. This division
is rarely one between countries; rather it is one that is present within all
countries, the proportions varying depending on whether you happen
to be in the developed West or the developing rest of the world. In theformal economy, most things work: rights to physical and intellectual
property can be enforced; assets can be used to borrow money and generate wealth; taxes are collected; and utility and other essential businessservices are provided. But in the informal economy (which represents
most of the global economy), many or all of these preconditions for a
successful and prosperous consumer society are absent. Eliminating thisdivision will be the central global policy challenge of the 21st century.
Brands are well placed to help tackle this vast challenge, since they
are often the only institutions present on both sides of the divide. CocaCola, for example, is as much a part of life in the slums as of life in theskyscrapers. Brands could use their grass-roots presence to foster local
institutions that start to break down the barriers between these divided
worlds. They could use their media and cultural power to argue more

60

THE SOCIAL VALUE OF BRANDS

firmly and more publicly for good governance and commercial infrastructure. Through their trading relationships, they could forge closer
links between the two divided sectors of the world economy, enabling
more and more people to enjoy the benefits of globalisation. Most of all,brands could take on a campaigning role: raising awareness, mobilising
opinion and forcing the pace of change.
These three dimensions of corporate social leadership – harnessing
cultural power, harnessing innovation and campaigning for socialchange – are often best demonstrated by the brands that have used asocial or environmental platform to define and differentiate themselvesin the marketplace. For example, the Co-operative Bank raising awareness of ethical investment; the Body Shop creating cosmetics products
not tested on animals; and Café Direct demonstrating through Fairtradethat an inclusive global business model is achievable. With the increasing interest of consumers in the social and environmental consequencesof their purchasing decisions, the successful brands of the future arelikely to be those that embrace corporate social leadership as a corecomponent of their strategy, thereby adding a powerful additional
dimension to the social value of brands.

Social brands
So far, the discussion has focused on the social value created by brands
in the commercial sector. But in the not-for-profit sector too, brands
create value for society by enabling charities, non-governmental organisations (ngos) and multilateral institutions to accomplish their goals
more effectively. Indeed, some activists have remarked with chagrinthat leading ngos, with their professional logos and identities, sophisticated communications strategies and partnerships with commercial
brands are themselves beginning to resemble the big corporations thatthey have traditionally seen as their enemies. That this should be acause for regret probably says more about the prejudices of suchactivists than their commitment to social progress, since polling evidence shows that the public’s trust in and respect for ngos – crucial factors in their ability to influence positive social change – have risen
enormously in recent years as the ngos have embraced the benefits ofbranding.
There are three important ways in which brands confer benefits to
not-for-profit organisations, and thereby to society. They are all linked totrust, the essential component of brand strength in any sector.

61

BRANDS AND BRANDING

Giving NGOs a role as social arbiters
Trust in ngo brands gives them a powerful role as arbiters in complex
social and environmental issues where competing claims are being
made. Global brands such as the Red Cross, Médecins Sans Frontières
and the un are increasingly called upon to make sense of international
events where trust is in short supply. This may be either because information is scarce and these organisations have first-hand, on-the-groundknowledge and expertise, or because other organisations (like governments or private-sector companies) have a vested interest in one particular outcome, whereas these social brands are assumed to be motivatedby the best interests of society. This independent, arbiter role is essential
in a world of instant information and opinion, and is only made possible by the brand. A report or comment by the Red Cross on a particular
humanitarian situation is more likely to be believed, and acted upon,than that of, say, a famous academic. The credibility of the Red Cross
derives not from the qualifications or expertise of individual Red Cross
employees, but from global trust in the Red Cross brand. Of course, thishigh degree of trust comes with significant responsibilities, and this is anarea, as we shall see, where social brands have some progress to make.
Another important manifestation of social brands’ arbiter role is in
their interactions with the private sector. Commercial brands seeking tothread their way through the minefields of corporate social responsibility are increasingly turning to trusted ngo brands to serve as their
guide. Shell pioneered this approach, entering into constructive dialogue
with formerly implacable ngo critics such as Greenpeace and Amnesty
International in order to better understand the social and environmental
issues connected with its business and to seek advice on how to deal
with them. This trend towards constructive engagement and open dialogue rather than the traditional confrontation is now seen as best practice in the private sector. It extends to companies seeking the public
endorsement of trusted ngo brands for their corporate responsibility
activities. Many company social and environmental reports now feature commentary, some of it critical, from social brands. The proliferation of cause-related marketing schemes, whereby charities and ngos
establish fundraising or public education campaigns in partnership withleading commercial brands, is another example. These developments
are an implicit recognition by large corporations of the higher levels oftrust that reside in the not-for-profit sector when it comes to social andenvironmental matters.
Clearly, this changing relationship between companies and not-for-62

THE SOCIAL VALUE OF BRANDS

profit organisations needs to be nurtured carefully. ngos need toensure that their trust is not compromised by sacrificing their independence and credibility in exchange for a seat at the boardroom table or a
sizeable corporate donation. Equally, businesses need to make sure thatin an effort to accommodate their critics, they do not lurch into an
unthinking acceptance of often highly partisan, unrepresentative andessentially political points of view. But overall, there can be no doubtthat real social value is being created by the application of social brands’
experience and expertise to the social and environmental challenges
faced by business, and that in an increasingly complex and interconnected world, social brands often perform a vital arbiter role.
Providing a campaigning platform
The second way in which social brands deliver social value is throughtheir campaigning platform. By using their trust and credibility to raiseawareness of important public issues, they make a vital contribution to
tackling those issues. Sometimes this can be a direct appeal to citizens, asin the case of the US charity madd (Mothers Against Drunk Driving)and its high-profile campaigning to seek an end (as the charity’s brutally
direct branding suggests) to the scourge of drink-driving. But it also
encompasses less direct campaigning activity, where the objective is tochange public policy (or the policy of corporations) in order to advancesocial or environmental objectives. Examples include the work of development ngos such as Oxfam, Christian Aid or Jubilee 2000 on issues
such as third-world debt, trade policy or corporate behaviour in developing countries. Again, it is the platform provided by the brands associated with these causes that ensures the effectiveness of the campaigns.
A lone scientist, however well qualified, would struggle to make an
impact on public consciousness, regardless of the merits of his or hercase. Backed by the Greenpeace brand, however, the impact would betransformed.
Enabling the provision of beneficial social services
The third way in which social value is created by brands in the not-forprofit sector is through their role in enabling beneficial social services(and sometimes products) to be provided directly. At a grass-roots level,charities around the world are working at the sharp end of the social
problems that policymakers seek to tackle. To do this they need income,just as a business needs sales to deliver its products and services. And
just as commercial organisations use branding to compete for consumer

63

BRANDS AND BRANDING

2.1
3.4

Seven social wins of brands
EMOTIONAL

Social cohesion
Social change
Corporate social leadership
Corporate social responsibility
Product and service leadership
Consumer protection

RATIONAL

Wealth creation

Source: Good Business, 2003

expenditure, so charities are increasingly using their brands to compete
for philanthropic spending, either in the form of direct donations fromcitizens, or through partnerships and contractual arrangements withcompanies and government. The reasons brands are important to charities in this regard are exactly the same as in the private sector: they serve
as signals of quality, effectiveness and trust.

Brands and social cohesion
The last component of brands’ social value is perhaps the least tangible, but it relates to a fundamental human desire: to come together
with other people. This is the positive counterpoint to one of themost frequently cited criticisms of brands: that they impose homogeneity on a diverse world. The important point to remember is that
if to some extent they do this, it is because individual people havechosen to do it. Brands promote social cohesion, both nationally andglobally, by enabling shared participation in aspirational and democratic narratives.
The greatest brands in the world today seek to be social unifiers.
Coca-Cola sought to teach the world to sing; Nike celebrates humanendeavour; Nokia connects people; Lux soap gives Asian women selfconfidence; Budweiser made heroes of the blue-collar workers who
built the land of the free.
In the years ahead, the challenge for brands will be to champion new
ideas, new stories, and new and more inclusive ways to achieve social
solidarity. In so doing, they will continue to make an incalculable contribution to social progress.

64

4 What makes brands great
Chuck Brymer

n a global economy subject to changing market dynamics and heightened competition, the role of brands has never been greater. They
serve as a route map for purchasing behaviour and, when managed
properly, generally accrue significant value to their owners. But how doyou evaluate a brand and evaluate what makes it special?
Chapter 2 dealt with brand valuation. This chapter examines whatmakes brands great, but first it is helpful to briefly review valuation andevaluation approaches. For years, most brand owners relied on marketing-oriented measures such as awareness and esteem. Today they use
more innovative and financially driven techniques to better quantify
the value that brands represent.
These new techniques draw from a mix of traditional business valuation models and economic tools that measure brand performance interms of monetary quantification, historical benchmarking, competitive
assessment and return-on-investment analyses. This has enabled companies to evaluate their brands more rigorously and to establish criteriawith which to govern their development in the future.
But what is the right answer for evaluating brand performance?
Some would argue that financial models in isolation are unreliable,
given fluctuations in corporate profitability. Some would contend thatmarketing measures alone are unsuited to the realities of today’s management needs. Others would argue that no single methodology is credible enough to encompass all the dimensions and complexities of a fullevaluation of a brand. These different points of view mean that today
there is a proliferation of measurement approaches that attempt tobridge the traditionally separate considerations of finance and marketing needed to provide a more holistic view of brand performance.
For the purposes of this chapter, 23 models that assessed the value
and benefits of brands were examined (see list at end of this chapter).
Some were more financially driven and others employed traditional
marketing techniques. Many offered brand rankings based on their
methodologies. From those rankings, the brands that repeatedly appear
at the top of the different list of rankings (see Table 4.1) were identified

I

65

BRANDS AND BRANDING

4.1
2.1

The range of brand ranking systems

Objective-based

Subjective-based

Financial
Tangible
Rational

Emotive
Perceived
Personal

in order to determine why they come out on top regardless of the criteria used to rank them.
That they do is perhaps no surprise, as they are widely recognised as
being leaders in best practices in brand investment and management.
These “usual suspects” among brand leaders appear to perform consistently well against a broad range of factors, including tangible equity,
customer purchasing habits and market stature. The reason is that theyshare certain characteristics and approaches that contribute to their success as a brand and as a business.

What great brands share
There are five notable qualities that leading brands share.
Three principal attributes …
1 A compelling idea. Behind every brand is a compelling idea, which
captures customers’ attention and loyalty by filling an unmet or unsatisfied need.
2 A resolute core purpose and supporting values. These remain inplace even though the business strategy and tactics have to be regularly
revised to address and take advantage of the circumstances of a changing, and in the detail often largely unanticipated, world and businessenvironment.
From the 7 Series to the Mini, the bmw brand stands for “the ultimate
driving machine”. The target audience for each bmw model differs andthe communications about them project different expectations, but thecore purpose remains the same: to deliver an outstanding experiencethrough superior car performance. The Mini represented an opportunity
to sell to a new market segment and to introduce people to the bmw
experience. The company set out to accomplish this by marrying the66

WHAT MAKES BRANDS GREAT

Table 4.1 Brands most often cited as leading or great
Coca-Cola
American Express
BMW
IBM
Microsoft
Nike
Pepsi
ToyotaColgate-Palmolive

DisneyFedEx
Hewlett-Packard
Kellogg’s
SonyStarbucks
Intel
Kodak
Nokia

values and aspirations of a younger, hipper demographic to the experience promised by owning a Mini. The imagery, typography and tone of
the communications identify who is a “Mini” kind of person. This strategy illustrates an opportunity captured by connecting with a wider
market without eroding the core purpose and positioning of the parent
company.
3 A central organisational principle. The brand position, purpose andvalues are employed as management levers to guide decision-making.
This becomes so ingrained in leading organisations that they consciously ask themselves, “How will this decision impact upon thebrand?” or “Is this on-brand?” According to Shelly Lazarus, chairman of
Ogilvy & Mather, “Once the enterprise understands what the brand is allabout, it gives direction to the whole enterprise. You know what products you’re supposed to make and not make. You know how you’re supposed to answer your telephone. You know how you’re going topackage things. It gives a set of principles to an entire enterprise.”… and two characteristics
1 Most leading brands are American. Of the 20 leading brands, 15 are
American. Does this mean that although a leading brand can originate
from anywhere, the United States is better at the practice of branding
than other countries? Its dominance of the list of leading brands may be
attributed to the nature of American society. Its entrepreneurial culture
recognises and rewards those successful in business, and encourages
risk-taking and the kind of innovation that produces the big idea fromwhich a leading brand may develop. In effect, the United States has an

67

BRANDS AND BRANDING

established and natural incubator for business innovation rooted in thecore purpose and values of the country.
There is also the fact that Americans are credited if not with inventing the practice of branding, certainly with embracing it as a management discipline. The rise of consumer-product brands in the UnitedStates after the second world war was simultaneously a response toprosperous times and a signal to consumers to spend because times
were indeed better. Goods were plentiful, and choice, in the form ofbrands, was apparent on shelves across the country.
Brands and branding practices within the United States became moresophisticated through product and line extensions, corporate identity
programmes and pitched advertising wars that were waged throughout
the 50 states and the world. American companies recognised that to succeed in business they needed to differentiate themselves in ways that
could not be copied by other companies. Management books of the last
30 years reflect this primary tenet. Whether it is a differentiated strategy,
product, service, technology or process, it will have been based on“what we have” versus “what they don’t have” or the fact that “we just
do it better”.
If differentiation is the goal, branding is the process. And if a brand isa major source of value, it requires investment and dedicated management. This is precisely what the mostly American firms that own theleading brands do: they nurture the brand, grow its value and evaluate
its performance like any other holding.
2 Most leading brands are commodities. Coca-Cola, Pepsi and Starbucks products and services are easily substituted; bmw, Toyota andHarley-Davidson face plenty of competition; and there are many cellular phone alternatives to Nokia. Brands are about choice, and thesebrands have to compete in a crowded and noisy space. They have therefore had to continually search out what makes them special to so many
people and how they can continue to innovate and meet these people’s
needs. They know that customers have a choice, and that if the benefitsof their product or service are not readily apparent and consistently
delivered, people will choose something else.

What makes brands great
Leading brands have three attributes and two common characteristics as
described above. They also reflect five distinctive traits.

68

WHAT MAKES BRANDS GREAT

4.2
2.1

The promises and verifications of a brand
PROMISESVERIFICATIONSMedia

Environments

Corporate
literature

Behaviour

BRAND

Signage

Product

Advertising

Clientdecision

Service

1 Consistency in delivering on their promise. Leading brands communicate their promise to the market, encouraging customers to purchase the product or service. At the time of customer decision, they mustdo everything within their power to deliver on the promise. Everything
the customer experiences in the process of evaluation, trial, purchaseand adoption is a verification of the original promise (see Figure 4.2).
By observing the habits of the 20 leading brands listed earlier inTable 4.1, it is clear that to deliver on their individual promises requires
taking a stand and not wavering for short-term benefit. It demands consistency and clarity within the organisation to succinctly articulate benefits. Nike has consistently delivered on its promise with healthy doses
of innovation along the way. In the process it has achieved near legendary status as a company and a brand. Nike represents a destination
never fully reached in the pursuit of individual fitness and wellness
goals. The idea is inspirational and aspirational, appealing to a wide
audience seeking personal betterment.
2 Superior products and processes. Brand leaders are well aware of
the sources of brand value. To attract customers and maintain their loyalty, brand leaders must offer them products or services that are superior to others, thereby reducing the risk that the customer will not be

69

BRANDS AND BRANDING

satisfied. Nokia has taken the view that it cannot rely solely on suppliers
to deliver the components that comprise the products, so it is buying up
its suppliers in order to have control of the whole process.
3 Distinctive positioning and customer experience. Brand leaders
capture what is special about their offering, convey it to the desiredaudience and allow customers to experience it. Ikea has opened up thefurniture showroom to touch like no other retailer. Chairs are poundedwith machinery to demonstrate durability, displays are elaborate andconstantly changing, and customers are invited to stay by means of arestaurant, events and product-knowledge sessions.
Unlike many retailers, Ikea has developed an emotional connection
with its customers. The offering is elevated above the mundane andfunctional while being competitive on price and selection. The shopping
experience is highly customer-centric and personal. Most large retail
environments are confusing, noisy and impersonal, yet Ikea has managed to customise the experience even though the product is mass-produced. The ability to deliver a wide range of well-designed, functional
products at a low cost has paid off; Ikea’s turnover tripled between 1994
and 2002, from €4 billion to €12 billion.
4 Alignment of internal and external commitment to the brand. Marketing and branding managers focus their strategies on the customer. In
general, employees have been the last to know about the latest marketing campaign or have not been appropriately trained in the brandvalues. Leading brands understand that an internal culture supportive of
the brand strategy has a far better chance of delivering a consistent yet
differentiated experience. The internal values are aligned with brandvalues to shape the organisation’s culture and embed the core purpose.
The true test of a leading brand is whether employees’ commitment tothe brand is high, as that will help keep customer commitment high. If
those who make and sell the brand are not committed to it, why should
anyone else be? In other words, those who live the brand will deliver
the brand.
Harley-Davidson has created a cult following because of the consistency between its internal beliefs and practices and what it communicates and delivers externally. Both Harley customers and Harley
employees embody the basic attitudes of freedom, individualism,
enjoyment, self-expression and self-confidence. This has resulted in aenviable loyalty rate where 45% of current owners have previously

70

WHAT MAKES BRANDS GREAT

owned a Harley. The brand is also popular with non-bike owners as asignificant component of revenue is derived from the licensing of merchandise and clothing.
If branding is about belonging to a club, then Harley-Davidson has
established an active and loyal membership largely because of the connection that employees and customers make and maintain. John Russell,
vice-president and managing director of Harley-Davidson Europe, says:
We actively engage with our customers; we encourage ourpeople to spend time with our customers, riding with ourcustomers, being with our customers whenever theopportunity arises.
This marriage of the internal employee experience and the externalcustomer experience strengthens brand loyalty, as Russell confirms:
If you move from being a commodity product to an emotional
product, through to the real attachment and engagement thatcomes from creating an experience, the degree of differences
might appear to be quite small but the results are going to bemuch greater.
5 An ability to stay relevant. Leading brands constantly maintain theirrelevance to a targeted set of customers, ensuring ownership of clear
points of difference compared with the competition. They sustain their
credibility by increasing customers’ trust of and loyalty to them.
However, for every great brand there are scores of failures. Even oncesuccessful brands lose their way, and in most cases the causes are obvious but are recognised too late.

What makes brands leaders lose their way
The most common cause of lost leadership is taking the brand for
granted. This can happen when the brand owners treat the asset as acash cow. This causes erosion of the original brand idea as it
marginalises the customer experience. There is a popular story told inbusiness schools around the world. For many years a man ran a successful roadside restaurant. Word-of-mouth recommendations from
regular customers were so effective that the restaurant itself became thedestination, rather than a passing stop, for its good value, high-quality

71

BRANDS AND BRANDING

home cooking and its smart, well-trained and well-paid staff. It was nota showy place but standards were high. It was a decently profitablebusiness.
The owner was proud when his son got a place at a good businessschool and he gladly paid for the education he had never received. Following his studies, the son joined his father in the business, perhaps
with the goal of franchising the concept. Following a detailed analysisof the restaurant, he recommended reducing the number of staff andbringing in more junior people who could be paid less, and buying
lower-grade food which would be cheaper. The father was wary of thechanges and concerned for his current staff, but he went along withthem.
The result was that standards of food, service and cleanliness all
went down and staff turnover became a big problem. Regulars deserted
their once-favourite restaurant and word-of-mouth recommendations
stopped. The son decided to advertise on billboards in the city and along
the road to the restaurant, and to run special promotional offers. At first,
there was a small lift to the business, but the new customers were quick
to decide that their expectations were not met. The restaurant limped
along until it was forced to close.
This story is used to encourage business students not to be rigid in
their approach and to be sure to include employees and customers inany changes. But the tale also has brand lessons. The son saw a cash
cow that could be manipulated for greater profit. He did not recognisethat if he disturbed what made the “brand” great in the first place, he ran
the risk of breaking its promise. It also shows that a good product is only
as good as the accompanying service. This issue is being faced today by
McDonald’s. As The Economist wrote on April 10th 2003:
McDonald’s, once a byword for good service, has been ranked
the worst company for customer satisfaction in America fornearly a decade – below even health insurers and banks.
The current management is endeavouring to return to the basics thatonce made the concept and the chain great.
There is no magic formula for creating a successful brand. However,brands that lose their shine should compare their past with their present
and look to the future with regard to three things: relevance, differentiation and credibility. Once a brand loses touch with its customer or
ignores a potential new audience, it has lost relevance. Successful72

WHAT MAKES BRANDS GREAT

brands understand the wants and needs of their stakeholders and tailor
their offering to maintain its relevance. Differentiation is a critical component of the branding process. And, because brands are based on
promises and trust, they must be credible. Customers grant companies
the right to provide them with what they need. As Adam Smith wrote
many, many years ago in The Wealth of Nations: “Money is merely aclaim on goods and services.” Today we know that customers who
experience a breach in trust will take that claim elsewhere.

Recovering lost ground
Jim Collins, a business author, says in his book Good to be Great that tobuild a great company you “have to have a strong set of core values”
that you never compromise.
If you are not willing to sacrifice your profits, if you’re notwilling to endure the pain for those values, then you will notbuild a great company.
Brands that lose direction often do so because they depart from theircore values. Thus it follows that they can recover by returning to themand by asking and answering such questions as: what is our lasting
influence? What void will exist if we were to disappear? A frankappraisal of what made the brand great in the first place, coupled withan innovative reinvention of it, can make it as relevant and great as it
used to be.
ibm is an example of a great brand bouncing back. The company
dominated the mainframe computer market but was outflanked in the
personal computer age by companies such as Compaq and Dell. It has
since reinvented itself as an it services provider. It was a high-risk strategy and a challenging journey, during which ibm invented and pioneered large-scale brand management. It centralised brand strategy andfocused the marketing spend for overall leverage. It used the brand as acentral management tool to drive behaviour internally and communicate consistently. It provided enough flexibility to be nimble in the fastmoving technologies segments but maintained control and discipline toensure integrity. Brand equity was measured to gauge performance andensure a brand-driven culture, which would never again take the customer for granted.
As a result, ibm has become the largest it service provider in theworld, and the brand communicates both innovation and reliability.

73

BRANDS AND BRANDING

Table 4.2 Great brands: summary of attributes, observations and practices
The three attributes of thegreat brands

Three observations of thegreat brands

The five great practices of thegreat brands

Built from a great idea

Largely American

Continually deliver on thebrand promise

Holds true to core purpose
and values

Predominantly commodity
businesses and industries

Possess superior products,
services and technologies

Employs brand as the central
organising principle

Represent clear choices

Own a distinct position anddeliver a unique customer
experience
Focus on “internal” branding
Improve and innovate

When it claims that it can provide “deeper” services to clients, ibm
comes across as highly credible.

Brand-building skills
Anyone with responsibility for building a brand needs to be creative,
intelligent, innovative, venturesome, nurturing, disciplined and servicefocused. They must also master three primary tasks:

 Embody the brand itself. This is the most important task. The

communications and the actions of the individual must alignwith the core purpose and values reflecting the brand. The
organisation looks to brand managers as role models who
portray appropriate behaviour and act in the best interests of thebrand and company. Conversely, they must also challenge
convention to keep the brand fresh by questioning what has
become the status quo.
 Understand the underlying sources of brand value and protect
and build on them.
 Continually search out what makes the brand unique. Customer
preferences, competitive frameworks and market conditions are
incredibly dynamic. Renewing and refreshing the brand to ensure
continuing relevance, differentiation and credibility are the moststrategic tasks and perhaps the most consuming tactically. Brand

74

WHAT MAKES BRANDS GREAT

managers must determine what cannot change and what mustchange.

References
Specific rankings
Brandchannel.com, Brand of the Year
BrandEconomics, Valuation Model
Interbrand, World’s Most Valuable Brands
Semion, Brand Evaluation
Young & Rubicam, Brand Asset Valuator
Wunderman, Brand Experience Scorecard
Brand valuation models, rankings and surveys
The A.C. Nielson Brand Balance Sheet
The A.C. Nielson Brand Performance
Aker, Brand Equity Approach
BBDO, Brand Equitation Evaluation Systems (bees) ranking
BBDO, Brand Equity Evaluator
BBDO, Five-level Model
Brandchannel.com, Brand of the Year Survey
Consor, Licence-based Brand Valuation
Emnin/Horiont, Brand Barometer
Emnin/Horiont, Brand Positioning Models
icon, Brand Trek Approach
Interbrand, Brand Valuation
Kapferer, Brand Equity Model
Keller, Brand Equity Approach
Kern, Brand valuation based on the concept of enterprise value
McKinsey Consulting, Brand Valuation System
Repenn, Brand valuation based on the concept of enterprise value
Sander, Crimmins and Herp, Price Premium-oriented Brand Valuation
The Sattler Brand Value Approach
The Semion Brand Value Approach
Simon and Sullivan, Capital Market-oriented Brand Valuation
Wunderman, Brand Experience Scorecard
Young & Rubicam, Brand Asset Valuator
Bibliography
BBDO, Brand Equity Evaluation, November 2001.

75

BRANDS AND BRANDING

BBDO, Brand Equity Analysis, September 2002.
Brandchannel.com, website
BrandEconomics, website“Famous Brands – Half Off!”, Fortune Magazine, August 13th 2002.
“The Brand Report Card”, Harvard Business Review, January–February
2000.
Interbrand, Brands – The New Wealth Creators, 1998.
Interbrand, Brand Valuation, 1997.
Interbrand, The Future of Brands, 2000.
Interbrand, The World’s Greatest Brands, 1997.
Interbrand, Uncommon Practice, 2002.
“AC Puts Number of Global Brands at 43”, Wall Street Journal,
November 1st 2001
Wunderman, website

762
BEST PRACTICE IN BRANDING

This page intentionally left blank5 Brand positioning and brand creation
Anne Bahr Thompson

f a brand is to be a source of value for an organisation, its positioning
in the market and the minds of consumers will be critical to the actual
value created.
There are many definitions of brand positioning, each a variation on
the same basic themes. It is interesting, though, to pick out a couple ofdefinitions from different decades and from different sides of theAtlantic.

I

Positioning starts with a product. A piece of merchandise, aservice, an institution, or even a person. But positioning is notwhat you do to a product. Positioning is what you do to themind of the prospect.
This was the definition given by Al Ries and Jack Trout in their 1981
book Positioning: The Battle for Your Mind.1 More than 15 years later, thefollowing definition was given in Understanding Brands:2
Positioning means owning a credible and profitable “position”
in the consumer’s mind, either by getting there first, or byadopting a position relative to the competition, or by repositioning the competition.
Clearly, both definitions emphasise that, first and foremost, you must
think about the minds and emotions of your audience. The former still
feels contemporary in its broad definition of product (that it is as muchto do with institutions and people as with things). The latter adds thedimension that sometimes you must try to define markets through yourstance, rather than just mapping your brand in an existing market or category in relation to the current competition.
If there are elements that should be added or emphasised today, theywould be broadening the definition of “consumer”, and the importanceof “taking up a position” for your brand – and that means a leadership
position of some kind – over and above product categories.
In the constant search for competitive advantage, the importance of79

BRANDS AND BRANDING

an organisation’s employees with regard to brand positioning cannot be
overstated, whether an organisation owns many brands or just one.
“Taking up a position”, in the sense of showing leadership and vision in
how your brand will deliver its promise, meet people’s needs and satisfy their expectations and desires, is increasingly important. This is not
only because today people expect (or at least desire) higher standards,
but also, crucially, because of blurring and fusing marketplaces. Thismeans that a strong category positioning in relation to your competitors
now may be inadequate if your market is attacked from outside by abrand with a strong position and customer relationship in a previously
discrete category. The traditional financial services brands in the UK
found this to their cost when “retail” brands such as Tesco and Marks &Spencer entered the market with a strong service proposition, andindeed when Virgin entered the market with its brand positioning of“consumer champion”.
The Virgin example reinforces another crucial point about brandpositioning in today’s business environment. Although complex andmulti-layered brand positioning models and frameworks can be useful,brand positioning must always be capable of being explained andexpressed in a couple of words, a sharp sentence, or a clear image – nota slogan or an advertising end line or tag line, but the core idea of thebrand. This might be called the “ceo test”. What would the ceo say
when asked: “So what is this brand/organisation really about?” Whether
it is to shareholders, to investors, to the media, to employees or to consumers, the response must clearly and vividly set out how this brand isdifferent and better.
Such focus has helped Richard Branson turn Virgin into the categoryleaping brand it is today; “consumer champion” is a positioning that is
simple to grasp, and it can work in just about every category. This is
assuming, of course, that the product and service reality is delivered.
Even allowing for the trials and errors of markets that the Virgin brandhas entered, the clarity of its brand positioning has provided an effective and efficient platform for innovative product and service development. Indeed, such category-defying positioning acts as a spur toinnovation and entrepreneurship, and it is interesting that classic consumer goods companies have started to embrace this broader philosophy. For instance, Procter & Gamble has adopted a “happy baby” brandpositioning for its Pampers brand, thus allowing the brand to reachbeyond the nappy category and stretch into all kinds of products andservices that make babies happy.

80

BRAND POSITIONING AND BRAND CREATION

5.1
2.1

The brand positioning process
Understanding
all stakeholder
needs anddesires

Opportunity
modelling

Brand
platform

Brand
identity

BrandarchitectureContinuous
evaluation anddevelopment

The brand positioning process
There are many methodologies for brand positioning, but the basic process involves:

 the need to understand your stakeholders in the broadest sense,
both internally and externally;

 the generation of information, insights, ideas and possibilities;
 an active definition of your “position” or your brand platform,

and the expression of that position through visual and verbal
identity, products, services and behaviours; the disciplined application of a brand architecture system tooptimise the value of the positioning; the continuous development, management and evaluation of thepositioning over time.
Figure 5.1 illustrates the positioning process. The rest of the chapter isconcerned with the “how”.

Stakeholders
The brand positioning process begins with identifying an organisation’s
stakeholders, or audiences, assessing how important different stakeholders are, and defining the ideal relationship needed with each toenable business goals and objectives to be met. Different stakeholders
will define the brand differently, according to their needs and their distinctive agendas. Deciding the priority each brand audience should begiven is not as easy as it may seem, particularly when the brand is a corporation rather than a product.
So although the brand must address the varying needs of many
stakeholders simultaneously, the roles it plays with each audienceclearly need not be identical. For example, a corporate brand such as
Procter & Gamble primarily has resonance with employees, investors,
channel partners and suppliers, whereas the company’s product brands
such as Tide and Ariel speak to consumers. Although consumers may

81

BRANDS AND BRANDING

trust Procter & Gamble products, many continue to be unaware that thecompany now manufactures Oil of Olay. Would this knowledgechange their purchase decision when choosing Oil of Olay over Nivea?
Probably not, as Oil of Olay was an established brand before being purchased by Procter & Gamble. Investors, however, will always be keenlyinterested in understanding the breadth and depth of and the strategy
behind Procter & Gamble’s portfolio. Thus they would have wanted toknow why Procter & Gamble purchased Richardson Vicks and how andwhere Oil of Olay fits in. Richardson Vicks employees, however, would
have wanted to know how secure their jobs were and which company’s
performance evaluation criteria would form the basis for their next
review. When it comes to sales and distribution, are channel partners
more likely to offer Oil of Olay extra display space when approached
by a Procter & Gamble salesman rather than a Richardson Vicks one?
Once the different key stakeholder audiences have been identified,
however, positioning should not be based on the lowest common
denominator that unites them but, rather, should aim to focus their differing points of view towards shared perceptions in the future.

Modelling the opportunity for positioning
Almost every strong brand begins with a great idea, and for it to succeed
it needs to have great positioning. To some extent inspired intuition canhelp identify the positioning opportunity, but in practice it requires theperspiration of systematic research and analysis that takes into accountstrategic options, core competencies, current and future market trends,
and customers’ wants, needs and perceptions.
Those involved in strategic planning or financial analysis generally
use languages and terms that are well understood – by themselves, atleast. For example, business strategists have the Boston Consulting
Group model, McKinsey’s 7S Strategy Framework, or Porter Analysis towork with. Brand planning has no such equivalents and this lack ofcommonly used frameworks often limits the ability of brand managers
to identify, and indeed justify, a core idea that will effectively assist
them in positioning their brand to achieve business goals and objectives.
To identify the core idea for positioning, there are four things to focuson.

 Relevance. Strong brands connect with customers. They meetfunctional needs and also tap into, and satisfy, emotional needs
and desires. By understanding how existing and potential

82

BRAND POSITIONING AND BRAND CREATION

customers define ideal experiences and perceive the world withwhich they interact, you can determine what they are missing
from existing products and services and thereby identify suitable
opportunities to stake an unclaimed (or underclaimed) territory.
 Differentiation. Strong brands add value, which makes themstand out from their competitors. By evaluating the current andfuture competitive landscape and the strengths and weaknessesof product and service offerings – in view of customers’
perceptions, customers’ needs, and real organisational
competencies – we can identify leadership opportunities tochange the category debate, or, indeed, to supersede existing
categories.
 Credibility. For customers to be loyal to a brand, the brand mustbe true to itself and keep the promises it makes. Analysing anorganisation’s aspirations in the context of its financial resources,
core competencies, research and development, and values, thenpairing these findings with customer insight to understand thegaps between real and perceived competencies, allows thedevelopment of a believable proposition. It also identifies areas
where competencies must be improved or expanded.
 Stretch. A brand’s continued success lies in its ability not only toremain relevant in a changing world but also to foster innovationand to bring new products and line extensions into its value
proposition. To determine where and how the brand can be
stretched requires a good understanding of current and potential
customers, good judgment about future market trends, good
information about all these things and, above all, inspiration.
Together these criteria form a framework, which can be called opportunity modelling (see Figure 5.2). It provides the lenses through which toreview internal data, customer knowledge, marketplace intelligence andtrend analysis in a structured way to identify a brand opportunity thatlives in the future as well as the present. The core idea for brand positioning is often first recognised through relevance and differentiation,
through developing a deep appreciation for customers’ functional andemotional needs and a thorough grasp of the marketplace and competitive dynamics. It is then balanced with credibility and stretch; in otherwords, it is scrutinised on the basis of organisational priorities, resources
and aspirations.
A ladder of customer needs is a useful way to identify relevance and83

BRANDS AND BRANDING

5.2
2.1

Brand opportunity modelling
Relevance

Credibility

BRAND
OPPORTUNITY

StretchDifferentiation

connect divergent audience perspectives (see Figure 5.3). As you move
up a hierarchy of needs, the emotional and aspirational benefits for different audience groups start to mingle. Furthermore, ideas for differentiation and stretch – added value services or new business models to
explore – often emerge from an understanding of desired functional andemotional benefits.
Overall, the sources of information for opportunity modelling are
broad. Management interviews, employee focus groups, business plans,
syndicated and other industry studies, and desk research all contributeto forming a picture for each of the four lenses.
As far as customer research is concerned, attitudes and perceptions ofbrands are often based on experiences and prejudices, and will only
take you so far. Hence observation of behaviour is valuable, regardlessof whether this is done by formally commissioned ethnographic studies
or less empirical investigation. Spending an afternoon in a shop, officeor cafeteria watching people can offer a new point of view. New technology gives us new means for observation as well as formally conducted research; for example, chat-room discussions or bulletin-board
postings can provide useful information on unmet needs and desires
and “real” customer language.
It is important to map the experiences customers desire when making
purchasing decisions and using products and services, and then compare these desired or “ideal” experiences with the ones that exist now.

84

BRAND POSITIONING AND BRAND CREATION

5.3
2.1

Laddered hierarchy of customer needs
Differentiated
Increasing brandcompetition
Aspirational
benefits

Emotional
benefits

Increasing market
sophistication
Functional
benefits

Increasing category
maturity

Functional
attributes

Generic, price of entry

Doing so provides an understanding of how existing and potential customers define “reality” and thereby identify the perceptions and symbols they assign to their relationships with brands. This “experiential
mapping” involves five primary areas of questioning.

 What is the customer’s connection with the category today? Whatis their frame of reference or context?

 What defines ideal experience? How would this make thecustomer feel?

 How does this compare with what exists today? Do any brands

come close to meeting the ideal today? Which ones are furthest?
Which sit in between?
 What other associations does the customer have with key
competitors? With your brand?
 What would your brand need to do to make customers believe itmeets the criteria for the ideal?
In getting answers to these questions, it is essential that group or oneto-one interviews start as broadly as possible so as not to bias participants with fixed viewpoints on the marketplace. Asking people to define
the ideal experience is a broader question than asking them about theirperceptions of what is available today. Determining the best starting
point can be quite tricky.

85

BRANDS AND BRANDING

For example, if you were seeking to define a brand for a company
that provides business software, you could begin a discussion in threeways, each of which would elicit a different response. You could ask
people to describe their uses and perceptions of office tools today, andto explain where they think these tools are lacking. You could enquire
about the tasks they do at work, the tools they have to help them perform these tasks and what they think will be available in the future. Or
you could ask them what makes them feel engaged or confident atwork. Similarly, if you were seeking to develop a brand for a yogurt
drink you could begin by exploring the different products people drink,perceptions of yogurt, or perceptions and attitudes regarding healthyliving and eating.

Taking up a position: the brand platform
The underlying aim of a brand position should be to enable it to survive
and thrive forever, regardless of how competitive dynamics and business needs evolve over time. The challenge, therefore, is to identify acore idea that frames an ambition or aspiration for the brand that will
be relevant to target audiences over time. Focusing on an inherent
human need or desire is the way to do this.
The marketplaces in which brands exist are evolving faster than everbefore. The speed of innovation has increased competitors’ ability toimitate one another, and the proliferation of media vehicles makes longlasting differentiation on basic product grounds increasingly difficult.
Articulating a core idea as a longer-term ambition or aspiration is theessence of developing a brand strategy that will last for more than 3–5
years. Vision, mission and values are the terms most often used todefine the central building blocks for the brand, and they form the“brand platform”. The vision gives the brand a reason for being; the mission provides it with specific strategic objectives to accomplish; andvalues underpin all actions taken concerning the brand and the perception of it among different stakeholders. Overall, the brand platform isdesigned to: impart a common understanding of the brand throughout anorganisation;

 influence behaviours that shape stakeholder perceptions overtime; serve as the creative brief for visual and verbal identity
development, as well as communications in the round.

86

BRAND POSITIONING AND BRAND CREATION

5.4
2.1

Brand platform
Brand communications –internal and external
Brand manifestation
and area of competence
Brand personality

BRAND PLATFORM
Brand vision, mission
and values

The ‘tone of voice’
Products, services
and behaviours
Bringing the brand tolife for all audiences

Vision. The reason for being, based on recognised and unrecognised customer needs or desires. An audacious statement,
the vision articulates the brand’s aspirations, frames its long-term ambitions and essentially captures its point of viewof the world.
Mission. A statement that describes how the vision can be accomplished, embodying practical business goals. It isambitious yet achievable over time, and generally reassessed as markets change and the company grows.
Values. The tenets that guide an organisation’s relationships – with employees, consumers, the media and so on –thereby capturing the spirit of the brand and reinforcing the vision and mission. In the same way that individuals’
morals and ethics form their behaviours, core values remain constant in the face of changing marketing strategies.

A working example
There are many examples of brands with strong brand platforms, suchas Apple’s “humanising computers” and Disney’s “making people
happy”, which have been used to drive the companies’ products, services, communications and indeed corporate behaviour over the years.
More recently, Marks & Spencer, a retailer that in the 1990s suffereda rapid decline after years as one of the UK’s most admired companies,
turned its business fortunes around by regenerating its brand platform.
It did this after extensive customer, supplier and staff research and by
taking into account the brand’s history and likely consumer and market
trends in future. The vision developed was “To be the standard against
which all others are measured”, with a mission “To make aspirational
quality accessible to all”. This brand platform was then the driving force
behind new products and service and corporate behaviour, as well as a
new visual and verbal style. It also provided a benchmark and filter for
all new developments. All the business had to do then was live up to thepromise of its brand platform.

87

BRANDS AND BRANDING

5.5
2.1

Symantec brand opportunity model
Relevance
The end-game for both consumers
and corporate customers was loss ofcontrol. While scalability was a key
functional need for corporate
customers, so too waspartnership in development
efforts and personalisation.

Relevance

Credibility
Credibility
Although a smaller player
than some competitors,
Symantec had strengths fromwhich to build: experienced, reliable,
leadership, innovation, friendly,
young. Equity had to trade up from
Norton to Symantec. The company
had too many product brands, mostof which were not universally known.

StretchIntegration of acquisitions andinternal processes.
Managing and optimising the digital
environment.
Refocusing a heavily consumeroriented organisation on
corporate customers.
Differentiation
Security + manageability= peace of mind
Competitors all positioned
themselves as detectives
hunting out viruses andhackers. No company had
established itself as the single
authority. The market desired avisionary leader because of theincreased presence of high-profile
viruses and potential internet fraud.

StretchDifferentiation

When John Thompson left ibm in April 1999 to become ceo of
Symantec, a network and security systems company whose products
include Norton AntiVirus software, his goal was to be the leader in internet and security solutions for individuals and businesses both large andsmall. Internet usage was growing rapidly at the time among consumers
and businesses were expanding into e-commerce. Thompson recognised that to be the leader in the field Symantec needed to broaden its
range of products and services and become less dependent on Norton
AntiVirus, and that it would need to invest in acquisitions and put moreresources into r&d, product development and customer service. He
believed a new brand positioning and identity would be the inspiration
for the organisation to change.
A comprehensive “discovery” phase in the brand positioning processincluded interviews with management, analysis of the competition andcompetitive advantages, global customer research, discussions withindustry and financial analysts, and working sessions with senior managers and the global operations committee. This culminated in some
opportunity modelling, the highlights of which are summarised in
Figure 5.5.
Based on the understanding that individuals take pride in being interconnected and networked but feel that their dependency on technology
puts the flow of their work at risk, the insights from the opportunity
model indicated that confidence – confidence that the work flow would

88

BRAND POSITIONING AND BRAND CREATION

not be disrupted by viruses, systems breakdowns and so on – wasimportant. The core positioning idea was later summarised by the ceo
as “pure confidence”, with the following brand platform: Vision. People should be free to work and play in a connectedworld without interruptions.

 Mission. To collectively create products and services thateliminate distractions.

The defining pillars of the Symantec brand are its values, which its
employees continuously strive to live up to.

 Customer-driven. “Every decision we make will be based on

customer needs” (Thompson, ceo). Symantec’s success depends
on consistently providing value for its customers. Consequently,
employees need to be attentive listeners able to respondpassionately, quickly and decisively.
 Trust. “The greatest quality is to be considered dependable”(Anon). Trust is earned through the consistent display of attentive
consideration and delivery of effective solutions. By listening tocustomers, employees demonstrate they care, and by responding
to what they hear, they show they are dependable.
 Innovation. To be considered innovative, Symantec needs to be
one step ahead of the high-tech revolution. Through an intuitive
understanding of what is needed, the company anticipates new
developments and problems before they arise.
 Action. Success flows from the effectiveness of products andservices. Effectiveness stems from the provision of appropriate,
intelligent, responsive, and proactive solutions.
This brand positioning work has enabled Symantec to think ambitiously about its current and future market, and about what it needs toprovide for its audiences in the round, both practically and emotionally.

Reflecting brand positioning in the name and broader identity
It is said that the first face of the brand is its name. With this in mind, it
is not difficult to understand why name creation, especially for a brandthat intends to cross geographic and cultural boundaries, is a challenge
in itself. In the same way that parents choose a name for a child, a brandmanager’s choice of a name, even for a line extension, often becomes89

BRANDS AND BRANDING

5.6
2.1

Spectrum for generating and considering brand names
DESCRIPTIVEASSOCIATIVEABSTRACT

British Airways
Deutsche Telekom

Go
Ford Mondeo

OrangeKodak

personal. Complicating this further is the need not to grow overly fondof any particular name until legal and linguistic screenings are completed. Developing a name in close association with the brand platform
helps to mitigate subjectivity, and provides the basis for objective evaluation. Since appealing names that meet their strategic objectives are
difficult to come up with in today’s cluttered product and service environment, it is important to recognise that although the name may be thefirst face of the brand, it works in tandem with the brand identity andbroader communications.
In generating positioning ideas, it is helpful to consider a spectrum
from what a brand does (for example, consumer champion), throughthe end benefit it provides (for example, “pure confidence”), to more lateral possibilities. Figure 5.6 illustrates a similar spectrum for generating
and considering brand names.
The naming process will use the brand platform (see Figure 5.4), andthe competitive and stakeholder insights within it, and will develop
potential creative themes. Whether the name derives from the descriptive or the abstract end of the spectrum will depend on the history andculture of the organisation, the competitive situation (for example, what
will give this brand name the most distinctive position, as with the core
brand platform work) and future aspirations.
Descriptive names are the easiest to come up with and often the mostdefensible in media coverage and rational business discussions, butthey can be constraining when it comes to future aspirations. For
instance, Carphone Warehouse is no longer just about car phones, andthe stores no longer look anything like warehouses. This does not matterin the UK, where the company has built a strong and broader set of service associations around the brand name, but it might have some
explaining to do if expanding internationally. Equally, ibm was originally named International Business Machines. Although the company
has established the initials ibm as the brand name property over time,
names abbreviated to sets of initials risk losing personality and distinctiveness. However, many companies today use initials because they90

BRAND POSITIONING AND BRAND CREATION

have extended beyond their core business and keeping to their fullname limits the credibility of their offering. Interestingly, many that use
initials in their letterhead still keep their original name as their legal
entity.
Abstract names might be highly and immediately differentiated andmore easily registered, but they also require substantial investment incommunicating what they are about. Not surprisingly, many companies
settle somewhere in the middle of this spectrum with a name that suggests the right associations (for example, Ford Mondeo with its associations of world, or Invensys or Zeneca with, respectively, theirassociations of invention and wisdom), but that goes beyond a straight
description.
Abstract (and sometimes even associative) names can be the subjectof criticism, even ridicule, when they are announced, and this can makean organisation fearful of going down this route. But unusual names areoften more memorable than more predictable ones, and even those thatare lampooned at first can become accepted and even admired in time.
Diageo, Orange and Accenture are names that had their fair share of criticism when first launched but nevertheless have become familiar.
Another reason for choosing an unusual name is that you are less likely
to encounter the problem of someone having a claim to it in any of thecountries where you want to register it.

Brand architecture: organising to deliver value
Brand architecture orchestrates the relationship between the corporate
brand and its businesses, product lines and product brands. Brand architecture creates value through clarifying all levels of branding based on: the needs and priorities of target audiences; expressing the breadth and depth of the offering; generating economic efficiencies; extending and transferring brand equity between corporate andproduct and sub-brands;

 making brand strategy credible.
Defining brand architecture begins by returning to the role abrand plays with different stakeholder audiences and, again, isbased on an understanding of the ambitions for the brand. A comprehensive understanding of the organisation’s lines of business (current and planned), purchase drivers by target audience and the91

BRANDS AND BRANDING

5.7
2.1

Brand architecture structures
CORPORATE AND PRODUCT BRANDS WORKING
MasterbrandOverbrand

Endorsed brandFreestanding brandA single brand spans a
set of offerings that
operate only withdescriptive offerings;
continual productinnovation, newreleases, and so on.

Individual business unit
or product brands
operate under a strong
family brand. Dual levelof communications:individual offering
establishes a uniqueposition while leveraging
credibility of the source.

”Source” brand provides
the business or productwith an aura ofcredibility. It may bedifficult to understand interms of the personal
relevance to theendorsement brand.

An organisation consistsof independent standalone brands, eachmaximising its impact on
the market with little orno connection to its
parent. There is acompetitive need todevelop distinct equities
for line of businessbrands. Source branddoes not fit or carries
negative baggage.

potential of customer relationships to run within and across productlines is often required. From this knowledge and an appreciation ofstrategic partnerships, it is possible to determine which existing brands(if any) are the best sources of credibility for communicating organisational competencies and the breadth of product offerings to target
audiences. In “masterbrand” models (ge, Cisco, 3Com), the corporate
brand is the primary source of credibility, and organisational competencies are identified by descriptive phrases. In “overbrand” models(Microsoft, Kellogg’s) and other “endorsement” models (Viacom,
Nabisco), the corporation is still the source of credibility, albeit to varying degrees. However, business units or product lines independently
add something to the organisation and, as such, are branded with proprietary names (for example, Nabisco Ritz Crackers and Nabisco Oreo
Cookies; Pratt & Whitney, a United Technologies Company and Otis, a
United Technologies Company). Brand valuation and brand equity
studies help this decision process.
Implementation of brand architecture systems should be sensitively
managed throughout an organisation. Managers and employees
strongly relate to the individual brand names that appear on their business cards or within their job titles, and these affiliations will beaffected by the introduction of a new brand architecture system.
Although brand architecture does not necessarily need to reflect organisational structure and processes (or vice versa), the two should support
one another. For this reason, discussions regarding restructuring the
r&d functions, customer services or sales processes often go hand in92

BRAND POSITIONING AND BRAND CREATION

hand with a revised architecture. Even more than an identity change,
new brand architecture systems may act as an impetus for a culturalshift.
Although there are various strategies for managing brand systems,
many corporations are moving away from creating and supporting multiple abstract product brands, regardless of the nature of their business.
This is not to imply that all organisations are moving towards developing the all-powerful masterbrand, but rather to indicate that overbrandand endorsement strategies are becoming stronger options. There arethree reasons for this trend: The communications environment. There are no closed

channels of communications today. All audiences, regardless ofwhether they are defined as business-to-business or business-toconsumer, can be exposed to all messages. Clearly, breaking
through the clutter of messages and managing multiple freestanding sub-brands in such an environment is expensive and thecompanies that do it are usually among the top global media
spenders. As you move up the ladder from an free-standing
model to a masterbrand one, marketing costs generally diminish.
 Technological advancement. People expect the brands theypurchase to evolve and remain relevant. Product life cycles are
becoming shorter, so return on investment for a newly branded
product launch is lower than in the past. It therefore makes sense
for a corporate brand or its signature product and service brands
to be seen as evolving. Furthermore, many financial analysts
believe that, for companies with diverse or changing lines ofbusiness, the equity accrued from new business strategies
branded under loosely endorsed or abstract names does notnecessarily translate to sustainable financial value for the
corporation.
 Customer focused marketing. If simplicity of decision-making is
the aim, a brand architecture system that makes purchasing
simpler is essential. Building on both the communications
environment and the pace of innovation, there is a need to makenew products readily identifiable to potential buyers. Consumer
scepticism is high as the public grows ever more savvy aboutmarketing tactics and wary of new, potentially fly-by-night
brands. Research has shown that when purchasing products andservices, consumers strongly consider the source brand – that is,93

BRANDS AND BRANDING

the manufacturer or product lineage – before deciding topurchase a new product brand.
Hybrid brand architectures and the need to develop them are notuncommon, since individual business lines often require different
levels of association with the corporation to establish credibility.
Nestlé is a classic example of this hybrid structure, with some businesses totally branded Nestlé (Nescafé, Nesquik), some endorsed (Kit
Kat, Crunch) and some free-standing (Buitoni, Perrier). However, evenhybrid structures must be carefully delineated and articulated toaccommodate new products and services appropriately and pay full
attention to existing businesses.
Many companies carefully delineate their corporate brand architecture but then fail to implement it through to product and service
naming. The value gained from a well-structured corporate brand architecture can be minimised or even destroyed when a mix of sub-brandnaming styles exists. Once such an architecture is decided, it is equallyimportant to move forward and determine “nomenclature conventions”(better called naming architecture) for existing and future sub-identities.
Naming decision trees have historically been used, but more sophisticated web-based tools that combine naming issues with product life
stages, marketing expenditures and strategic opportunities are now
available.
Although the initial outlay for technology-based systems can be
more than desired, the return on investment for larger organisations ishigh and fast, as ibm found to its financial and operating advantage. In
2001, the company comprehensively reviewed its naming architecture
in an effort to further reflect and strengthen the equities of the ibm masterbrand. Through strategic use of “family names” (such as WebSphereand ThinkPad), it further enhanced associations with the ibm brand. It
also aided the sales process by supporting the corporate goal “ibm iseasy to do business with”. Through the use of descriptors (such as Application Server) and identifiers (Version 4.1), it organised its vast portfolio
of products so that customers could appreciate the product range andvariety, and it established a cost-effective approach to manage namedevelopment. The investment quickly paid back, saving the company
several millions of dollars in the first year on name development andmaintenance of trademarks. Not measured, but equally significant, were
the savings on marketing expenditure dedicated to supporting fewer
product lines.

94

BRAND POSITIONING AND BRAND CREATION

Long-term development and brand management
A well-thought-out brand positioning is as fundamental as a solid financial plan in creating long-term value for a business. It is the engine ofsustainable brand value. This is particularly important as a result of thegrowth of intangible assets in business and the ability of competitors to
mimic product developments more quickly.
The long-term horizon of the brand platform provides direction forinteractions with all stakeholder audiences and is thus the engine
behind brand positioning. Brand architecture and nomenclature systems
present practical guidance to ensure business strategies and brand planning work in support of one another. Together, these essential elementsof brand strategy can be used as the framework for long-term brandmanagement and the basis on which a company is organised andrewarded. The discipline of brand strategy also generates the leadership,
distinction and trust necessary to build long-term relationships with customers, investors, employees and the marketplace as a whole.
References
1 Ries, A. and Trout, J., Positioning: The Battle for Your Mind, McGrawHill, 1981.
2 Cowley, D. (ed.), Understanding Brands: By 10 People Who Do, Kogan
Page, 1996.

95

This page intentionally left blank6 Brand experience
Shaun Smithart 1 of this book argued for making the brand the central organisingprinciple of an organisation. Why, then, do so few companies do
this? In Uncommon Practice: People who deliver a great brand experience,1
it is found that although the notion of organising around the brand isgaining acceptance and becoming a strategic aim for many companies,
it remains uncommon in practice because it is so hard to implement
without a guiding framework. It requires leaders to take a holistic viewof the brand that transcends the marketing function and makes it the rallying cry for the whole organisation. More importantly, it requires theorganisation to align its people, processes and products with its proposition in order to deliver the promise it makes to customers every day.
Delivering the promise your brand makes may not be easy but it isvery satisfying. In late 2002 researchers at Satmetrix Systems conducteda study to determine if there was a link between improved customer satisfaction and higher price/earnings ratios. They discovered that the p/eratios of companies with above-average brand loyalty scores were
almost double the ratios of their competitors.
So what is it that drives customer loyalty? For many years we havebeen told that a brand’s success is a result of skilfully applying the “4P’s” of the marketing mix: product, price, promotion and place. Gallup, a
research company, conducted a poll of 6,000 consumers between
November 1999 and January 2000 and found that the fifth “p”, people,
is by far the most important driver of brand loyalty. In motor vehicle
retailing, Gallup found that customers who feel their dealer representative “stands out from all others” were 10–15 times more likely to choose
the same brand for their next purchase. The same ratio holds true for theairline industry, and in the banking sector the influence of people on thebrand is even greater, with customers saying they were 10–20 times
more likely to repurchase from those organisations with outstanding
employees.2
Stelios Haji-Ioannou, chairman of easyGroup and founder of easyJet,
makes this clear by saying:P

97

BRANDS AND BRANDING

You can spend £15m on advertising, go bankrupt and yourname can still mean nothing to people. Your brand is createdout of customer contact and the experience your customers
have of you.
Taking a broad view of branding has important and far-reaching
implications for organisations. It places the responsibility squarely on
the shoulders of the whole executive team, particularly the ceo, and itmeans that the “product” cannot simply be mass-produced, qualityassured and packaged. Customers experience the brand in many ways
– through the people who sell it, the product itself, the people who provide after-sales service, the reactions to it of friends and colleagues andso on – and customers are sometimes irrational, inconsistent and difficult to manage.

The holistic view of brands
Brands traditionally have been the province of the marketing department. The main focus has been on communicating a brand in a distinctive way to target customers and managing their expectations. The resultof a brand positioning exercise was often a thick book that carefully
specified a number of design rules that had to be adhered to, such as
pantone numbers and type faces. Soon, company vehicles would beseen sporting the new logo and signage would appear on office buildings and warehouses announcing the new tag line.
In the case of an airline, the rebranding process can take years as
aircraft wait for their turn to be repainted in the new livery. But forcustomers and employees not much else changes: the service levels are
no better, the planes are delayed as often, and management is as
remote from customers and employees as it was before. In otherwords, the experience of the brand does not change. The exercise isoften cosmetic and fails to deliver any lasting benefit. The UK’s nationally owned Post Office spent millions of pounds rebranding itself as
Consignia, yet failed to tackle the underlying performance problems
that were driving customers away. The result was public derision overthe choice of name, public criticism over the expense involved andwidespread scepticism that the rebranding would make any difference. The organisation is now rebranding itself as the Royal MailGroup.
This is just as true for fast-moving consumer goods. A case in point
was Pepsi’s Project Blue some years ago. In an effort to combat Coca-98

BRAND EXPERIENCE

Cola, Pepsi rebranded its cola with a new blue identity. To promote thisit launched its “Pepsi blue” day, which involved printing a blue banneron the front pages of national newspapers, repainting the supersonicConcorde with a blue livery and extensive media advertising. Despite
costing millions of dollars, the campaign failed to achieve its objectives.
Advertising and promotional stunts are unlikely to have a lasting impact
on brand loyalty.
No wonder consumers and employees have seen branding exercises
as the corporate equivalent of rearranging deck chairs on the Titanic.
This analogy is particularly apt as traditional branding exercises concentrate on the tip of the iceberg, changing what is visible, while below
the surface the organisation functions much as before.
The attraction of consumers to a brand is much more fundamental
than a simple marketing exercise. The Carlson Marketing Group conducted a survey in 2003 that quantifies the quality of the relationshipbetween a consumer (or employee or channel partner) and the brand.3
Their survey of 16,000 UK consumers found a direct relationshipbetween the strength of the relationship and profitability. Customer
spend, retention and their willingness to recommend the brand to others
were all influenced by the strength of the relationship. Those organisations in the lower quartile had retention levels of just 32% comparedwith 87% for those brands with the strongest relationship scores. The
brand rated highest was First Direct. So what is relationship strength?
The researchers defined this as: Trust. Consumers believe that the brand will deliver its promise,respect them, and be open and honest with them Commitment. Consumers feel some longer term emotional
attachment to their relationship with the brand Alignment and mutuality. A two-way affinity between

consumers and the brand; with mutual respect, shared values andexpectations met – which results in a continually rewarding
experience.

Tom Lacki, Carlson’s Senior Director for Knowledge Management,sums it up this way: “The consistency of the customer experience is key,
because consistency enables trust, and trust is a fundamental enabling
condition for the development of productive and authentic relationships.”4
A holistic view of brands carries the implication that the brand is, or

99

BRANDS AND BRANDING

should be, no less than the dna of the organisation, the fundamentalbuilding block and expression of its existence. In an ideal world, the customer should be able to experience any customer process, talk to any
employee, examine any product and the essence of the brand shouldshine through. ana, a Japanese airline, understands this. A recent ana
advertisement read:
Attention to detail isn’t written in our training manuals, it’s in
our DNA.
Amazon.com, the Carphone Warehouse, Harley-Davidson, First
Direct and Starbucks all have the same clarity of purpose and holistic
approach to managing their brand, even though they are all in very
different markets. What they have in common is a leading position,enthusiastic customers and exceptional growth rates.

The brand management iceberg
Subsequent chapters look at how to position and create brands. This
chapter focuses on the management of brands according to a holistic
approach that requires aligning the traditional marketing activities thatlie “above the water” with the organisational capabilities that lie“below the water”, as in the brand management iceberg illustrated in
Figure 6.1.
Clear proposition
Successful brands begin with a clear proposition. Unless a brand has aclear idea of the value it brings and to whom, it will have difficulty inever making the brand stand for anything distinctive.
First Direct is a UK telephone and internet bank that is part of thehsbc group. If you visit its website, www.firstdirect.com/whyjoinus,
you will find the following statement:
The real difference about First Direct is simple, most banks areabout money. First Direct is about people. Simple but
revolutionary.
Unlike most retail banks First Direct then proceeds to deliver this simple
proposition every day. No wonder it has the highest customer satisfaction ratings of any bank, with 82% of customers being willing to recommend the bank to others. In this way it attracts a new customer every

100BRAND EXPERIENCE

6.1
2.1

The brand management iceberg

Proposition

Managing the expectation

PeopleProcesses

Managing the experience

four seconds through direct referral. Peter Simpson, the bank’s commercial director, describes it thus:
What First Direct did was to realise that people were changing
their habits and would want to bank 24 hours a day, sevendays a week.
As a result, the brand conceived the idea of centralised telephonebanking built around an intimate knowledge of the customer backed upby simple processes and exceptionally friendly people. Paradoxically,
First Direct is able to provide better customer service on the telephonethan its competitors are providing face-to-face in branches.
So why is it that some organisations are able to deliver on their brandpromise and others fall short? The answer lies in having a rigorous process for designing a customer experience that consistently delivers thebrand promise.
The Forum Corporation, a training consultancy, undertook an
employee survey with leading American companies in 2002 and identified that the dimension which most closely correlated with differentiating the brand from the employees’ perspective was the extent to which
the “leaders deliver a branded customer experience”.5 In other words, it
starts at the top. As Simpson says:

101

BRANDS AND BRANDING

You can’t pretend to be one style of brand to your consumers
if you’re a different style of brand to your people.
This takes us to the first element that lies at the brand waterline: people.
PeoplePeople are at the waterline level because, for most companies, they represent the point at which customers finally interact with the brand. Customers have seen the advertisements or promotional activity and areinterested – they have an expectation – now it is all about the experience. It is at this point that the brand delivers or not. Employees are theconduit through which all the careful product design, manufacturing,packaging and processes are finally delivered to customers; they are themeans to bring the brand alive. In Managing the Customer Experience:
Turning customers into advocates,6 four steps are suggested to bringbrands alive through people:

 Hire people with competencies to satisfy customer expectations.
 Train employees to deliver experiences that uniquely fit yourbrand promise.

 Reward them for the right behaviours.
 Most importantly, drive the behaviours from the very top of theorganisation.

Take, for example, the Carphone Warehouse. This chain of mobile
phone stores was once again voted the UK’s best retailer in April 2003.
The brand started out with the simple proposition of offering “simple,
impartial advice” to consumers wishing to navigate the minefield of cellular phone contracts. The company is now offering value-added services and will be competing against bt, among others. Its new brandproposition “for a better mobile life” reflects this shift. However, what
has not changed is its focus on differentiating the brand on the basis of
the customer experience. Fundamental to the brand is the performanceof its people. The company philosophy is summed up in five simple
operating principles: If we don’t look after the customer, someone else will.
 Nothing is gained by winning an argument but losing a customer.
 Always deliver what we promise. If in doubt, underpromise andoverdeliver.

102

BRAND EXPERIENCE Always treat customers as we ourselves would like to be treated.
 The reputation of the whole company is in the hands of eachindividual.

These principles are unusual in that they focus people on behaviours
rather than high-level values like “trustworthy, valued or responsive”.
The way in which the Carphone Warehouse applies them also sets itapart. For example, it invests four times the industry average in training.
New employees must undergo two weeks of intensive training and arigorous assessment before they are allowed in front of a customer. The
message here is that successful brands focus less on brand image andmore on brand action.
There is probably not a large organisation in the UK that does nottrain its staff or have recognition systems of some kind, yet the fact
remains that for most brands the experience that their customers have islargely undifferentiated. The reason for this is simple: companies’ training and recognition schemes are generic, that is, they are much the sameas their competitors’ schemes and insufficiently tied to their brandproposition. This is particularly true when companies go to the samelarge consultancies for essentially repackaged service training or reward
systems. The answer is to provide a learning experience designed tobring the brand to life for employees.
J. Sainsbury, a UK supermarket group, recently trained all 130,000“colleagues” using a series of three-hour modules built into the rhythmof the operation and delivered by departmental managers. Each of themodules focused on one element of Sainsbury’s brand promise and the
behaviours necessary to bring it alive for customers. The desired
behaviour was reinforced by aligning its mystery shopper survey with
the new customer experience. The company has recently recruited
10,000 new employees to work in its stores to make the checkout experience easy for customers (one of the elements of its brand promise). At
the same time, it has reduced its head-office staff by 25% in order tospeed up decision-making and improve support for the stores. There is
no doubt that the company is trying hard to differentiate itself from its
closest competitors.
Recruitment also needs to be “on-brand”. Most organisations use thesame generic interview processes for hiring staff, yet their brands may
require very different interpersonal qualities. Contrast this with Southwest Airlines, one of the few consistently profitable airlines in the
United States. The company has won an enviable reputation for its

103

BRANDS AND BRANDING

fun-loving, friendly cabin attendants. The airline does not recruit; itholds auditions where would-be employees are encouraged to sing, act
or anything else they choose. The process is designed to allow candidates to demonstrate their ability to bring their personalities to work.
Would this recruitment process be appropriate for anyone else? Probably not, which is exactly the point.
Pret a Manger, a fast-growing UK sandwich chain, takes a very different approach. Prospective employees are asked to work in a store fora day, at the end of which the store’s employees are asked to vote onwhether they should be hired or not. Only 5% of the people who apply
for jobs at Pret are accepted. The reason for this unusual recruitment
method is that the company believes that “one of the biggest responsibilities of management is to look after the corporate dna”7.
For a brand to mean something different to customers it must behave
differently internally, and that includes its processes.
Process
One recurring fad is the attention that organisations give to their processes. We have seen total quality management (tqm), bpr (businessprocess re-engineering), customer relationship management (crm), customer managed relationships (cmr) and the re-emergence of the SixSigma Way. There is nothing inherently wrong with any of theseconcepts (which always seem to have three initials) as they encouragecompanies to focus on improving those processes that create the mostvalue. Unfortunately, all too often these approaches are used simply asa means to take cost (or rather frontline people) out of the system without really examining whether the revised process is adding value to thebrand and delivering the promise to customers. So UK high-street banks
now have impersonal processing centres and customers can no longer
phone their friendly bank manager directly. The banks may argue that
this is to improve service, but their customers know that the main
reason for the change is to cut costs.
crm has been said to be the management tool that most often fails
to meet management expectations. This is because it is essentially a“dumb” technology that is used to capture more and more information
about customers without thinking about how it can be used to create
value for customers or how it will improve customers’ experience of thebrand. Lengthy voice-activated response systems and more targeted
direct mailshots are a poor substitute for processes that truly add value
to the customer.

104

BRAND EXPERIENCE

Amazon.com is one of the most widely recognised and respected
brands in the world today. Jeff Bezos, the company’s ceo, has said:
It has always seemed to me that your brand is formed,
primarily, not by what your company says about itself, but bywhat the company does.
An example is Amazon’s “One-Click” ordering process. The Amazon
brand promises reliability and simplicity, and to demonstrate thesevalues the ordering process was reviewed. Amazon’s web designers
came up with the idea of One-Click, a system which remembers customers’ payment and shipping details so that subsequent items can bepurchased with literally one mouse click. When it was tested, customers
were sceptical because of concerns about security and confidentiality.
However, Bezos insisted on introducing One-Click because he felt thatthe simplified process was on-brand for Amazon and that his customers’
trust in the Amazon brand would overcome their reservations. He wasright and it has proved extremely successful.
Likewise, First Direct has helped turn its brand promise into reality
through simple processes. Switching banks used to involve a lot of
hassle so that customers who were dissatisfied with their bank could
rarely be bothered to move their accounts. First Direct tells its prospective customers:
We can now transfer your standing orders and direct debits
for you – so transferring bank accounts has never been easier.
And it does. With one simple click on the “I agree” button, it swings into
action and contacts your current bank to arrange everything on yourbehalf.
These examples raise another interesting question about this notionof holistic branding. What is the product? It used to be easy: it was thecan of cola or the airline seat or perhaps the pair of jeans. But the
expanded definition of brand means that the product is now muchbroader. It is the totality of the experience.
Product
It used to be said that the difference between a product and a service isthat customers are actively engaged in experiencing a service but theyacquire and use a product. Customers experience a restaurant but

105

BRANDS AND BRANDING

cannot take it home; they buy a doughnut and consume it, but thedoughnut does not provide a service. If this is true, what is the Starbucks
product? Is it the coffee or the service experience? Howard Schultz, thecompany’s chairman, believes that the advantage Starbucks has overtraditional brands is that “our customers see themselves inside our company, inside our brand, because they’re part of the Starbucks experience”. Starbucks’ customers seem happy to pay a premium for thatprivilege.
This is true too for many other sectors, including professional services. Clifford Chance, one of the world’s largest law firms, sees thelegal expertise that it provides as vital but expected and that the true
differentiator for its brand is the relationship it builds with its clients.
Clifford Chance is investing in training to help its lawyers deliver amore seamless and client-focused experience.
Some years ago the Greater China division of Leo Burnett, an advertising agency, was under threat from other agencies and was losing
clients and employees. By taking a holistic view of the brand and working on improving the creative processes and upgrading the skills of its
people, the division’s products steadily improved. Leo Burnett cut
employee turnover by 40%, raised new account profitability by 63% androse from sixth to first place in total billings. Two years later it was voted
Agency of the Year.8
Brands are now emerging that create experiences connected to thepurchase or the use of a product, but they offer value to the customerthat goes beyond the product alone and becomes synonymous with thebrand.
The brand promise of Harley-Davidson, an American motorcyclemaker, is “We Fulfil Dreams”. As it says in the company’s 1999 annual
report:Fulfilling dreams for people from all walks of life who cherish
the common values of freedom, adventure and individual
expression, involves much more than building and sellingmotorcycles. The secret to our enduring brand lies in delivering
an experience rather than just a collection of products andservices.
If you think that this is just pr spin, Harley-Davidson has over
750,000 active members in its Harley Owners Group (hog) and theseenthusiasts typically spend 30% more than Harley owners who are non-

106

BRAND EXPERIENCE

members. This increased expenditure is on clothing, holidays andevents – in other words the experience.
Harley’s bundling of customer experiences with product and direct
involvement with customers has led to 17 straight years of financial
growth and a 50% share of the big bike market. A shareholder who
invested $10,000 when the organisation went public in 1986 would now
be a millionaire.
Redefine
When you think of Harley-Davidson, do you think of grizzly, tattooed
middle-aged Hells Angels? Think again. Harley recently launched its“Riders Edge” programme, a motorcycling safety course designed to
attract new riders. Of the 4,000 people who went through the programme in 2002, nearly 45% were female and half of these were aged
under 35. J.D. Power and Associates, a global marketing information services firm, puts the median income of American motorcyclists at
US$67,000. The reality is that a Harley-Davidson is more likely to beridden by a professional female than by a middle-aged tearaway.
Harley has redefined itself.
At a weekend rally in Austria in mid-2001, 25,000 people showed up
including all the company’s senior managers. Harley-Davidson management refers to these events as “super-engagement” because the leaders
are all active participants in hog activities. In this way the leaders keep
tuned in to the changing needs of their customers and combat competitive
threats. This has meant new processes and new products, including the VRod motorcycle that embodies all the traditional Harley-Davidson brandvalues in a state-of- the-art bike for which customers were clamouring.
Perhaps this is why Harley-Davidson celebrates its centenary in 2003
when so many other motorcycle brands have died.
Contrast this with another icon that has even higher brand recognition: McDonald’s. Although it is one of the best-known brands in theworld, it has recently declared its first loss and is currently shutting
stores around the world. It came last in a 2002 Wall Street Journal customer satisfaction survey and achieved a lower customer satisfaction
index than the US Inland Revenue Service in a survey conducted by the
University of Michigan.9
Pick up any management textbook published during the last decadeand the chances are that you will find a reference to McDonald’s and its
promise to provide consistent quality, service and value. These values
are still there, but the problem is that consistency is now the entry price107

BRANDS AND BRANDING

for any brand that wants to do business. Consumers now want brands
to offer products and experiences that complement their lifestyles. Pret
A Manger, in which McDonald’s has acquired a stake, is consistent but
also offers wholesome food with great service. Its proposition “Passionate about food” is evident in every detail. The brand has responded tocustomers who are now looking for fast food that is healthy and servedin a pleasant environment by friendly employees. The message here isthat tastes change, and unless brands can be dynamic and move quickly
to meet emerging and changing needs they will decline. Mounting a new
advertising or promotional campaign, launching a revised logo or evenchanging the brand promise is not enough. The response can and should
include these activities, but unless it is accompanied by fundamental
changes to the processes, upgraded products, and employees who arebriefed and trained to be able to deliver the revised proposition, themarketing effort will be worthless.
A consequence of this concept is that the marketing department may
still lead but no longer wholly own the brand. It has to be jointly owned
by marketing, human resources and operations because each has a vitalrole to play in delivering the brand to consumers. The role of the chief
executive is crucial in setting this agenda and ensuring that the threefunctions work together. This kind of alignment is called “Triad Power”
and it will define how organisations will function in the future. What isneeded now is a simple framework or tool for facilitating this alignment.
The brand management process (see Figure 6.2) answers this need.

Using the brand management iceberg
Although the process will vary according to the nature and needs of thebrand, Figure 6.2 represents a logical framework for managing the activities that align both the expectation and the experience that customers
have of the brand.
Customer experience audit
Begin by measuring the current experience of the brand. What is thetotal experience customers have of the organisation and the brand interms of the following?

 Proposition. How clear is the offer and what does the brandpromise? Is this valuable to target customers?

 People. To what extent do people behave in a way that meets
customer expectations and delivers the brand promise?

108

BRAND EXPERIENCE

6.2
2.1

The brand management process
6

Customerexperience
audit

1

Proposition

External
comms

Createbrand
platform

People2

5Processes

Internal
comms

4

3

Customerexperience
design Processes. Do processes create value for customers and deliver
the brand promise?

 Products. Are products differentiated and valuable to target
customers?

Creating the brand platform
Some of this work is usually already in place, but make sure that it isabsolutely clear and fully effective, as without clarity around the brandplatform the following phases cannot be undertaken. It involves the following: Brand positioning. How can you position your brand withclarity and precision?

 Brand naming. Choosing a name for the brand that is distinctive
and creates the right emotional associations.

 Brand architecture. How should the brand or sub-brands work
together to communicate the proposition?

 Brand identity. How best can the brand be portrayed visuallyand verbally?

109

BRANDS AND BRANDING

Customer experience design
Having audited the current situation and created clarity around thebrand positioning and values, you can design the new experience thatwill consistently deliver the brand to target customers. Attention should
be given to the same dimensions as for the customer experience audit.

 Proposition. What can the brand promise in specific terms totarget customers that will create competitive advantage?

 People. How must people behave to bring this promise to life at
every point where the organisation interacts with the customer?

 Processes. What processes need to be improved, eliminated or
added to enable employees to behave in this way?

 Products. How can products be improved to highlight ordemonstrate the brand values?

Communicating the brand internally
Having designed the new experience, you are ready to communicate itinternally. At this point, many organisations rush out a new advertising
campaign and end up overpromising and underdelivering because theirpeople are not fully prepared. As much effort must go into marketinginternally as into marketing externally.

 Communication. Make sure everyone knows who the target

customers are, what they expect, what the brand stands for andwhat it promises.
 Leadership. Prepare managers to lead the brand and demonstrate
their own commitment to the promise.
 Training. Develop “on-brand” training that will emotionallyengage managers and employees and equip them with theknowledge, attitude and skills to deliver the brand promise.
 Measurement. Align measurement systems so that everyone isaware of the extent to which the organisation is meetingcustomer needs and is rewarded for delivering the promise.
Communicating the brand externallyNow, and only now, are you ready to communicate the proposition
externally. Much of this work may have been done in preparation, but
you will want to make sure the organisation is ready to deliver the experience before you raise the expectation by going live. The focus needs to
be on:

110

BRAND EXPERIENCE Brand communication. How best can the brand becommunicated to its intended audience? This includes
advertising, promotion, packaging, and so on.

Continuing management, audits and redefinition
Lastly, the brand must be protected and refreshed over time to keep it
current with target customer needs and competitively strong. Thisrequires the following: Management. Cross-functional sponsorship and leadership toensure all the activities that support the brand are aligned andmanaged.
 Audits. Regular measurement of brand image, reputation and thecustomer experience against the desired proposition.
 Redefinition. Periodic refreshing and upgrades to ensure that theoffer stays current with target customer expectations andcombats competitive threats.
Using the brand management iceberg allows senior managers toalign an organisation’s people, processes and products with the brandproposition to create value for target customers. As was said at the startof this chapter, this is common sense but still uncommon practice.

Notes and references
1 Smith, S. and Milligan, A., Uncommon Practice: People who deliver agreat brand experience, Financial Times Prentice Hall, 2002.
2 McEwen, B., “All Brands are the same”, www.gallup.com.
3 Carlson Marketing Group Relationship Builder Survey 2003.
4 Lacki, Thomas D. (2003), ‘Achieving the Promise of CRM’, Interactive
Marketing, Vol. 4, No. 4, pp. 355–375.
5 Smith, S. and Wheeler, J., Managing the Customer Experience: Turning
customers into advocates, Financial Times Prentice Hall, 2002.
6 Smith and Wheeler, Managing the Customer Experience.
7 Andrew Rolfe, former ceo.
8 1995 Asian Ad Awards.
9 Sunday Times, April 6th 2003.

111

This page intentionally left blank7 Visual and verbal identity
Tony Allen and John Simmons

In 1955, the president of ibm asked the following question:
Do you think it’s possible that IBM could look like the kind ofcompany it really is?
The president was Thomas J. Watson Jr, son of ibm’s founder. The
man who answered the question in the affirmative – and then did something about it – was Eliot Noyes, ibm’s industrial design consultant.
Watson and Noyes realised that ibm was about to be eclipsed by
Olivetti. That was the conclusion you would have reached if you had
looked at the two companies side by side. Both of them were vying to
be recognised as “leader of the modern world”, but ibm looked more
like the leader of Caxton’s world. So a programme was born to introduce the discipline of corporate identity to ibm, spurred on by the man
described by Fortune magazine as “the greatest capitalist who everlived”.
“Visual identity” is a recent term that was probably coined to avoid
lengthy arguments about the meaning of “brand” versus “corporate
identity”. In the 1980s, the term brand migrated from soap powders andcame to mean virtually anything on the planet with an ability to sustain
an attraction or influence among people. Politics, countries, movements,
artists, celebrities and educational establishments as well as companies
and chocolate bars all became brands. So brand came to mean more orless what had been described as corporate identity: the total experienceoffered by a company to its staff, customers and others, a heady anddistinctive concoction of intangible promises and tangible attributes andbenefits.
Visual identity is a component in branding – the part you see, obviously. As such it is an important part because what you see is more
likely to influence you than what you are told or what you comprehend
from an 80-deck slide presentation.

113

BRANDS AND BRANDING

Visual identity
Visual identity comprises the graphic components that together provide a system for
identifying and representing a brand. The “basic elements” of a brand’s visual
identity might comprise distinctive versions of the following: Logotypes
 Symbols
 Colours Typefaces
Think of the way IBM consistently reproduces its name in its logotype; theMcDonald’s arches symbol; the Royal Mail’s use of pillar-box red; the Johnson
typeface created exclusively for London Underground. These basic elements areoften supplemented by other graphic elements such as patterns, approaches toillustration and photography, and a range of icons.

bmw uses the visual design and styling of its cars, key-rings, graphics, showrooms and communications to express its now powerful andeasily recognised global brand identity. bmw’s visual expression isclear, attractive, distinctive and noticeably consistent wherever you see
it. Each part of a customer’s journey to purchase or experience owningor driving a bmw is carefully orchestrated to send the same messages
about the brand. The bmw brand is an often-quoted example of an
exceptionally high standard in visual identity expression.
By contrast, despite being a truly mighty automotive brand, Ford
made visual and verbal errors with the Edsel in 1957. A car whose visual
quirkiness might work well now, the Edsel had an unpopular “horsecollar” grille, designed to stand out from other cars but described by one
customer as looking like “a vagina with teeth”. Moreover, the name(after Edsel Ford, son of Henry Ford and a former company president)
lacked appeal as the public thought it sounded odd, and, indeed, theFord family is thought to have disapproved of the use of it. These two
factors were not the only ones to bring the Edsel to an early end, butthey were crucial in sealing the unpopularity of the car and the brand,leading to discontinued production after 1960.
This chapter is also about verbal identity. This is another recent

114

VISUAL AND VERBAL IDENTITY

term that was coined to make it clear that identity is also expressed
through words and language, whether we mean it to be or not. Some
organisations have changed their language to be more “customer
friendly” (tax offices, government agencies and charities). Some organisations still cling to powerfully bad verbal identities, so bad on occasion that you can only navigate them with a professional guide. For
example, IT firms often still befuddle their audiences with technicalterms, jargon and bad English, and many lawyers continue to intimidate their clients with arcane phrases and technical (sometimes Latin)
terms.

Verbal identity
Verbal identity’s “basic elements” aim to make a brand’s language distinctive. Thesemight comprise the following: The name
 A naming system for products, sub-brands and groups A strapline Tone of voice principles
 The use of stories

Combining the visual and the verbal provides the means to makebrands that really work. Ben & Jerry’s ice creams, for example, have selfindulgent and tasty names like Phish Food, Chunky Monkey and Cherry
Garcia, an edible tribute to the late Jerry Garcia of the Grateful Dead, afamous American rock band. Such carefully orchestrated naivety takes
more effort to do well than, say, achieving the gleaming polish of
Haagen Dazs (a made-up name). It is strange that the “soul” of Ben &Jerry’s was thought to be at risk when it was bought by one of the mostcareful consumer branding companies of all – Unilever – which understands that brands need to have souls.
Any company, product, service or anything else will make little
progress if it cannot show what it is about and why it is different. Showing this means having a purpose behind the way names are created andused, the creation of logos and symbols, the uses of colours and typography, illustration and photography, pattern, style and the use of language.

115

BRANDS AND BRANDING

2.1
7.1

Perceptions of identity

Products andservices

Communications

IDENTITY

Buildings andenvironments

People andbehaviour

This chapter examines the tactics and strategy of identity using
examples of well-known companies and brands, several of which arefeatured in the colour plate section which appears in the book. But inorder to put the subject in context, where does the idea of identity comefrom?

From brandr to today
As explained in Chapter 1, the word brand comes from the Old Norsebrandr, meaning to burn, and mass branding existed in the ancient civilisations of Etruria, Greece and Rome, where potters made their markson the pots they made. Today in Texas there are some 230,000 registered cattle brands, many of them showing a fusion between the visualand the verbal – see the symbol, read the name and vice versa – in thesame way as the brands of organisations such as the Red Cross, Shell,
Penguin Books and “3”, a mobile telecommunications company. Since
the 1930s there have been certain identifiable trends relating to the creation of brand identities.
Designer-driven identity
In the 1950s and 1960s, especially in the United States, corporate bosses
put their faith in the creative skills of a number of unusually talented
designers. These included, among others, Paul Rand, designer of the ibm

116

VISUAL AND VERBAL IDENTITY

and ups corporate identities; Saul Bass, designer of at&t, United Airlines, Minolta, General Foods, Rockwell International identities; Raymond Loewy, designer of “Lucky Strike” in 1940 and Shell in 1967; andMilton Glaser, designer of the “I love New York” logo. But one of the earliest notable grand-scale visual projects was Egbert Jacobsen’s 1930s
design of nearly “every surface” of Walter P. Paepcke’s company, theContainer Corporation of America (cca), including its factories, vehicles, packaging, invoices, brochures and advertising. Paepcke was convinced that good design was an integral component of corporate culture,taking the view that just as national culture is shaped by its use of visual
symbols and icons, so too are corporations by the symbols and icons
they use. Jacobsen’s work for cca, William Golden’s famous late-1940s“eye” identity for the Columbia Broadcasting System (cbs) and Rand’s
original design for ups played an important role in establishing theimportance of design in creating powerful visual logos and brand ownership symbols. It is also at this time that we see the beginnings of associations between corporations and the colours they used to identify
their products and services, for instance yellow belonging to Kodak, red
to Coca-Cola, green to bp, brown to ups and blue to ibm and at&t.
American corporations were largely responsible for establishing theprofessional role of corporate design, but the nature of the work often
owed more to a relationship between the company owner and thedesigner than the intervention of the marketing department. This waspartly because “marketing” was seen as more or less interchangeablewith “sales” and therefore had a lower status. Similarly, the notion of
corporate identity as a strategic tool was in its infancy.
One of the most famous examples of an owner-designer relationshipis that of Thomas J. Watson Jr, son of the founder of ibm. In 1955,
Watson recognised, partly as a result of prompts from a colleague inEurope, that ibm’s designs and buildings were substantially “off thepace” for a company then entering the electronic era. In fact, at that time
it was Olivetti, not ibm, that had an ultra-contemporary New York City
showroom. Watson visited Adriano Olivetti in Milan and saw at firsthand the extent and ingenuity of the identity programme which had
been started by Olivetti and which included buildings, offices,
employee housing, products, brochures and advertisements. Olivetti
was even involved in bringing new functional and aesthetic designs tothe urban planning. Watson wrote that it was then that he decided to“improve ibm design, not only in architecture and typography, but
colour, interiors, the whole spectrum”. The experience of seeing

117

BRANDS AND BRANDING

Olivetti’s work in Milan resulted in one of the most succinct quotations
on the subject of identity and its meaning, which is included in the first
sentence of this chapter.
The landmarks that followed included a series of changes to thefamous ibm logotype masterminded by Rand, who had been brought
into ibm and had quietly got on with redesigning the company’s
brochures and printed material. Rand was also responsible for building
up ibm’s design capacity, bringing new talent into the monolithic business and helping to spark a golden era of expressive identity design,
matched by a vast array of building and architectural projects, notably
ibm’s pavilion at the New York World Fair in 1964.
ibm’s story is an impressive illustration of visual identity. Morerecently, while remaining true to the principles of a consistent visual
identity, the company has negotiated a transition from stolid and solid
hardware manufacturer to cerebral “creative” solutions provider. Itsvisual identity has evolved seamlessly. Its verbal identity has changed
subtly too, perhaps exemplified by the advertising line “I think thereforeibm”. ibm’s language has become less technologically obsessed, less to
do with bits and bytes and more to do with having an interesting wayof thinking. Indeed, in terms of verbal identity, it drew the response
from Apple “Think different”, which was a blow aimed at ibm’s supposed weak spot: its association with “blue suit” conformity.

Strategy-driven identity
In the 1970s, as a result of the boom in marketing, particularly market
and customer research, and the vogue for change management initiatives, the ownership of corporate identity was transferred to the marketing department as one of an armoury of tools to be used and linked
to other tools. Identity had to mature and be measured and accountable.
It was not enough to say that the logo was the signature of the company.
Was the logo the right logo for the customer?
Arguably, this was a time when designers, who formerly had freerein to work with corporate bosses on anything they wanted, looked for
new creative opportunities in the growing non-mainstream areas, suchas publishing, music and entertainment, where graphic design enjoyedboom times, especially with punk towards the end of the 1970s. Visual
identity moved into a different kind of creative period as designers andmarketers began to understand and play with new possibilities. Having
established that the logo itself was the basis for a consistent visual identity, questions started to be asked about the memorability or recognis-

118

VISUAL AND VERBAL IDENTITY

ability of the mark. If this was to represent the company’s business strategy, could it really be achieved by a “dynamic typographic rendition”?
Or would more creative visual symbols help companies to express theirstrategies with a clearer sense of energy and novelty?
In this context, some visual identities stand out as landmarks. The
Bovis identity, with its use of the humming bird as a symbol, was a
breakthrough in the early 1970s. The humming bird itself was, from theadvantage of hindsight, easy to justify as “nimble” and “industrious”.
But, more importantly, in the context of its time, it made a statement
about the company’s belief in aesthetic principles and its focus on thecustomer. After all, Bovis was aiming not to be just any old construction
company; it was carefully creating the modern environments in whichpeople would live and work.
From the 1970s until the mid-1980s, a new benchmark became apparent. It was about creating a visual symbol that had “artistic” quality
while representing a clear commercial articulation of business strategy.
This strand of visual identity continues today, but perhaps reached its
pinnacle in Michael Wolff’s work for 3i in the early to mid-1980s. Herethe mark itself was a thing of beauty – a watercolour painting of thenumeral 3 with an eye – but the logo became almost irrelevant in theoverall scheme of the company’s new identity.
First, it was a bold piece of renaming. The Industrial and Commercial
Finance Corporation became Investors in Industry, known as 3i. This set
the tone for a radical approach to marketing financial services and venture capital. Using illustrations by Jeff Fisher, the new 3i advertising
burst out of the pages of business magazines, proclaiming through its
visual and verbal style “we are different and we will support venturesthat are different too”. The challenge then was to maintain this sense ofdifference. The annual 3i calendar, using cartoons, helped to do this.
Poetry by Christopher Logue, for example, reinforced the effect. But“being different” is a hard act to sustain, even if it is the goal of every
identity programme. 3i survives, and prospers, with the basics of its
1980s identity intact, even if nowadays nobody speaks of it in quite thesame hushed tones as they did then. Its market positioning, as well as its
identity, is no longer as pioneering as it once was.
At the same time as being both strategic and creative, companies
became more proficient at running identity programmes, which presented fresh problems.

119BRANDS AND BRANDING

Controlling and category identity: the “CI manual” and thelookalikes
During the 1970s, 1980s and 1990s a vast number of powerful international identities were launched for companies such as Akzo Nobel, bt,
ici, bp and Unisys; and with them came weighty corporate identity
manuals. These valuable management tools or “dead-hands”, according
to your point of view, were often to be found propping open a door
instead of being pored over for their timely and topical advice.
Interestingly, this “professionalising” of visual identity probably did
more to reduce differentiation between companies than at any othertime. Professional standards were rapidly shared and copied, and many
companies started to share similar visual cues. But in its way, the lookalike factor helped spur the rapid expansion of branding and identity inthe past 30 years. This is because there has been a tendency to react in
two ways to new breakthrough identities within a particular businesscategory. The first is to acknowledge a rival’s success in differentiation
through identity by creating a completely different approach to the task.
The second is to recognise success by saying “we’ll have some of thesame”. So, for example, the 3i identity led to a plethora of illustrationbased visual identities. Not all of them were bad, and because theyfound something new to say, they were not purely imitative. But, asever, there were fashionable trends in design and identity, and sometimes these trends became more entrenched than the one-off, copycat,
flash-in-the-pan reactions. In many cases, companies from one sector or
category of business ended up “borrowing” ideas and learning fromothers; and often the borrowing was creative and catalytic for a different sector of business.
Commercialisation of the public sector in the UK has created many
branding opportunities. One category could be called the lookalikehigher education sector. In the late 1980s, polytechnics were able to rebrand as universities but to succeed they had to look like a university.
Dozens of former polytechnics marched into corporate identity programmes to emerge looking the same. Category identity had taken off
by the late 1980s, but it reached its zenith during the late 1990s as
dotcom companies raced to portray the ethereal nature of their services
and excited possibly the biggest spate of lookalike identities ever seen.
There were endless flowing, single-line “swooshes” usually accompanied by a mad name and intended to convey a sense of energy anddynamism. But Nike’s swoosh design mark has stayed the course, perhaps because of its sheer omnipresence.

120

VISUAL AND VERBAL IDENTITY

But lookalike strategies may have a kind of “flocking” advantage. In atest with pharmacists during the Pharmacia and Upjohn merger in 1995,
logos of famous drug companies were jumbled up, with the symbol of
one paired with the logo of the other, and so on. Boards with these on
were rotated to reveal the correct and incorrect versions. In six out of ten
cases, pharmacists asked to identify the correct board got it wrong. In
the second question, they were shown another board where the drug
companies’ logos had been redesigned to look like other well-known
brands (Hoecsht made up as Heineken, for example). This time no one
was in any doubt about which company was supposed to be represented. Maybe this illustrated that pharmacists do not care about drug
company logos. Perhaps they simply recognised the category and thatwas enough for them to be able to do their job properly. After all, pharmacists are more likely to recognise a particular drug than the company
responsible for it. So perhaps there is an advantage in adopting theclothes of the category to which you belong. By looking like a pharmaceuticals company, or a law firm, or a university, or a high-tech company, you can benefit from the legitimacy of the category. You may
even be able to channel more funds into product sales as your corporate
credentials will be confirmed by the category identity itself. This wasparticularly true of the bigger accountancy and management consultancy firms prior to 1998 and is largely true of banking and law firms
today.
But a category identity will not be enough in a merger or acquisition
where the idea of the new company has to be sold as offering something “truly new and better”. In 2000, at the peak of the merger boom,
the total value of announced mergers and acquisitions globally was $3.5
trillion, roughly equal to 10% of world gdp. A merger brings substantial
challenges in terms of identity: what to call the new company; whether
there should be elements of the legacy identities; how to communicate
the sense of “new vision”; how to be the first to establish a “new category”.
Novartis broke new ground on two levels. It was formed from themerger between Sandoz and Ciba in 1996 and was among the firsthighly visible pharmaceuticals companies to move away from its legacy
elements, Ciba and Sandoz, and create a non-pharmaceutical or conceptual name (what has “Novartis” to do with pharmaceuticals?). Novartis
also devised a new category title, life sciences (to replace simply “pharmaceuticals” or even “drugs company”), which has since been adopted
as the buzz definition for the total category.

121

BRANDS AND BRANDING

The merger boom of the 1990s brought experimentation. Identities
had to be created faster than ever before. Huge sums were spent getting
messages out quickly to a global workforce. And great attention was
paid to combating the negative effects of a merger, including anti-climax
and that “meaningless feeling” among the workforce, and even the disaffection felt towards a new partner who up till then had been an archrival.
This internet-speed period in identity created a new approach, that ofdiversifying identities.

Diversifying identities
The history of corporate identity is littered with examples of powerfulstructural identities that labelled every department and every functionin the same way. By the 1990s, such an approach was considered to be
overcontrolling and was even compared by some to the identities of
Hitler’s national socialism and Russia’s communism. For many, thecorporate identity manual, intended to be a vibrant source of inspiration
for company-to-customer communication, became associated with negative regulation or a police-state environment. The unofficial job title“logo cop” came into being.
The explosive nature of the digital age, the recognition that a job was
no longer for life and the concept that quality of work was more important than financial reward, promoted by magazines such as Fast Company, Wired and even Fortune, meant that identity, if it was going tosucceed, had to be tackled differently, more intelligently and creatively
than before.
In 1997, British Airways launched a new identity that took the idea ofdiversity to a height not seen before, at least not in the airline world. The
reaction to it was mixed and often critical. The old ba identity had beenclassically “British”, heraldic and sober, and the image-tracking studies
carried out by the company in the mid-1990s had picked this up. Certainly, ba had an image of being global but hardly caring. The Britishness exemplified by the silver-grey crest on the tailfin said more about acool and possibly unforgiving attitude to customer service than it did
about a top-notch travelling experience for millions of economy-classpassengers.
To combat this, the new identity was designed to make a highly visible display of the company’s real interest in serving customers from allover the world. This was symbolised through a ground-breaking project:artists from different world communities were invited to display their122

VISUAL AND VERBAL IDENTITY

work as an integral part of ba’s visual identity, including placing artworks on the tailfins themselves, the traditional branding space reservedfor only the most formal of identifiers.
What might have appeared as a surface treatment, possibly even a
shock tactic, had serious ambitions in the area of employee retraining
and behaviour. ba rightly observed that a change in perception in theminds of its customers would come only through a change in the experience they enjoyed from the beginning to the end of their encounter
with the airline. The identity, with its obvious message of diversity, wasa catalyst in significant internal change, and, perhaps, a reflection ofinternal change that was already taking place and becoming visible. As
a result, ba people would master more languages in the future; theywould be encouraged to be themselves with passengers; they would
strive for the highest standards in service; and they would make this aself-fulfilling prophecy.
Interestingly, the reaction to the new identity included as much opposition to the loss of British uniformity as praise for the globally diverse
perspective taken by a British company. The visual identity, itself an
expression of a radical change of business direction, became an easytarget for those, internally and externally, who were unhappy about thecompany’s new direction. This was exacerbated by the fact that airlines
are, inevitably, partly representatives of national identities. Those who
attacked the new ba identity most bitterly were also those who
defended most stoutly the established view of the British national identity. Other airlines, in other parts of the world, have found themselves ina similar position to ba when considering their identity. A changing identity reflects a company, organisation or even a nation in a state of flux
and forces the question: “Are you comfortable with the way you aregoing?” Inevitably, in some cases, the answer has been “No”. ba backtracked on the diversity of the new identity and the chief executive stood
down not long after. The basic elements of the visual identity remained
but the tailfins used the version of the Union Jack flag originally intended
for use only on Concorde. A diverse identity had become monolithic.
Some of the issues touched on above, particularly the growing
ambitions for identities to influence the behaviour of customers andemployees, brought language into the identity mix more prominently.
Perhaps for the first time language, or tone of voice, was identified asa “basic element” of identity. As such it was seen as a way to differentiate a brand and to reach out to audiences with a message about its
diversity. Orange, a UK mobile telecommunications company, was123BRANDS AND BRANDING

much admired in the 1990s for doing this. So the logic of visual andverbal identity supporting each other to create a more engaging,rounded identity became accepted.
Like its visual companion, verbal identity has a number of possible
elements that can be used separately or in isolation. Its equivalents tologo, colours, typography and photographic or illustrative style include
name(s), straplines, stories and tone of voice. The identity mix becomesricher, while allowing individual elements of it to stand out. Arguably,
the line “Just do it” became an identity element for Nike that was just as
important as its swoosh design mark.
As with visual identity, corporations are keen to own and control
their verbal identity. McDonald’s has gone to the trouble and expense ofregistering ownership of more than 100 phrases. It is as if to say “this is
our linguistic territory, no one else can enter it”. Such a legalistic
approach, though, is limited and limiting, because it also means that abrand’s own language does not stray far outside those narrow borders.
Brands such as Guinness have discovered that by being expansive
rather than restrictive, by telling stories, they can connect more emotionally with audiences (see the example in the colour section). Thismight be with customers and potential customers, particularly throughadvertising, or with their own employees, suppliers and partners
through a range of communications, including books, videos ande-mails. In doing so, they establish a storytelling approach that is verbally and emotionally rich.

Innocent Drinks
From Innocent’s Company Rule Book
Always ask an expert
What’s the answer? We don’t know. Most of the time we don’t even know thequestion. But there’s always someone we can turn to. And that’s you, dear reader.
We couldn’t have done it without you …
In the summer of ’98, we bought £500 worth of fruit, turned it into smoothies
and sold them from a stall at a little music festival in London. We put up a big sign
saying “Do you think we should give up our jobs to make these smoothies?” and put
out a bin saying “YES” and a bin saying “NO”. At the end of the weekend the “YES”
bin was full so we went in the next day and resigned.

124

VISUAL AND VERBAL IDENTITY

It is this desire for emotional connection that is encouraging brands
to be more creative and adventurous with the words they use to express
their personalities. Increasingly, humour can be employed as a deliberate strategy rather than a one-off campaign tactic. Brands like Innocent
Drinks in the UK and Tazo in the United States take risks with humour
and language that would have been unimaginable by serious marketers
a few years ago. The logo cops would be making wholesale arrests. But
if your brand name is Innocent, which expresses an innocent personality and approach to life, then that personality should be expressed consistently through an innocent visual and verbal identity.
So what next? What are the conclusions that can be made aboutvisual and verbal identity and their relationship to brands in the future?
There are a few easy pointers:

 Verbal identity will for a while become a more important tool forbrand expression. Totally “new” visual identities will be limited
as long as merger activity remains suppressed by market
conditions.
 Management of an existing visual identity will become a realconcern. Brand owners will increasingly look for better
integration between the languages of identity and advertising.
 Naming will undergo a regenerative period following years ofcynical jibes from the media. Names will be sensible or extreme,
but “manufactured” Latinate names (such as Consignia) have had
their heyday.
 Photography and illustration will also go through a period ofrethinking. Whereas the last ten years have been dominated by anoticeable style to show “real people in real situations”, this willreach saturation point. Even the image banks will start to balk at
the trend. Illustration with all its magical self-gratifying andartistic qualities will make a long overdue comeback.
 Controlling identities will reappear, not in the same way as in the
1970s and 1980s but in a practical, no-nonsense way. They will be
implemented using simple automating technology so that themechanics are swept out of the way of people’s daily lives.
 The economies of Asia, Russia, China and Africa will leapfrog thebranding learning curve. They will spark a new wave ofidentities combining “native” elements with familiar European orAmerican visual cues. The result will be a heady mix to challenge
the most staid patterns of our established markets, raising issues

125

BRANDS AND BRANDING

of intellectual property, trademark protection and ethics between
the developing and developed worlds.
 There will be a renewed emphasis on honesty, practicality andcost of implementation. But alongside this, perhaps, will be therealisation that brands and branding have not had the best deal
recently and now is time to fly a flag for originality and freshness.
Visual identity and verbal identity are part and parcel of brands andbranding. They exist and will make a statement even if brand owners
choose to ignore them. When not controlled they can do damage, so it isbetter to lock them firmly into the brand management of a business.
An identity should be reviewed frequently and maintained like anyother asset. Unlike pure science, identity is a triumph of opinion backed
up by assertion. Its subjectivity is the very property that allows you to
be bold and get away with it. The world’s greatest identities are irrational, just like brands. Create them in this way and you will not go far
wrong. Indeed, you might find the whole world casting admiring
glances at you and hanging on your every word.

Recommended reading
If you would like to read further around the subject of this chapter, you
may find the following books interesting and useful.
Fletcher, A., The Art of Looking Sideways, Phaidon Press, 2001.
Haig, M., Brand Failures, Kogan Page, 2003.
Heller, S., Paul Rand, Phaidon Press, 1999.
McKenzie, G., Orbiting the Giant Hairball, Penguin Putnam, 1998.
Ogilvy, D., Ogilvy on Advertising, Orbis, 1983.
Olins, W., Corporate Identity, Thames & Hudson, 1989.
Pentagram, Ideas on Design, Faber and Faber, 1986.
Simmons, J., We, Me, Them & It: The Power of Words in Business,
Texere, 2000.
Simmons, J., The Invisible Grail: In Search of the True Language ofBrands, Texere, 2003.
Vincent, L., Legendary Brands: Unleashing the Power of Storytelling toCreate a Winning Market Strategy, Dearborn, 2002.
Whyte, D., Crossing the Unknown Sea: Work and the Shaping of Identity,
Penguin Books, 2002.

126

8 Brand communications
Paul Feldwick

verything a brand does is communication. As Paul Watzlawick, acommunications theorist, wrote: “It is impossible not to communicate.”1 The way the packs are designed, the words used, the way thephones are answered (or not), the products the name is put to, the shops
in which these are sold: all these can say powerful things about a brand.
(Other messages about the brand are not under the control of the brandmanager, such as the things that people who use the brand or others sayor write about it.)Some important aspects of brand communication are already wellcovered elsewhere in this book, especially in the chapter on verbal andvisual identity. But as well as managing the brand’s design and language, most brand managers also invest money in communicating
directly to the brand’s various stakeholders through direct mail and pr,
telemarketing and website design, events and sponsorship programmes,
and, not least, through the various advertising media of tv, print,
cinema and radio.
From their beginnings as mass phenomena in the 19th century,brands and advertising (in the broadest sense of that word) have
evolved together. Early mass-market brands, from Pears Soap to Kodak
to Coca-Cola, built their business on heavy advertising investments; by
1912, Coca-Cola was spending over $1m a year on advertising. Right up
to the present day, it is exceptional to find a large or successful brandthat does not continue to invest heavily in communications.
Traditionally, brand communications have been segregated into categories known as “above the line” and “below the line”. These names
were originally connected with agency accounting procedures. The
media paid commission for activities above the line but not for thosebelow the line (an advertising agency’s clients did not pay directly for its
services; the agency made its money as sales agent for the media). Press,
tv, outdoor, radio and cinema were above the line; direct mail, pr, sales
promotions of various sorts, events and sponsorships were generally
below.
Originally, advertising agencies would offer all these services andE

127

BRANDS AND BRANDING

could subsidise the below-the-line activities with the commissions fromthe others. Over time, below-the-line activities became more specialised
and separate agencies grew up to deal with them, and as advertisers
negotiated to have rebates on commissions or to switch to fee payment,
the economics of the old-style full service became unsustainable. Todaya wide range of communications agencies offer specialised services, sothat a brand’s communications are normally fragmented among a
number of different suppliers. The expressions above and below theline linger on, but there is now much talk about the importance of “integrated marketing”, or “through the line”, which is about how best to
bring back together the fragmented pattern of activities in the betterinterests of the client.
It is fashionable at present to predict the “death of advertising”,
meaning the classic above-the-line media. This is unlikely to happen.
Certainly things have changed in the advertising business. It is no longer
easy to obtain the huge, monolithic mass-market audiences that UK or
American network television delivered until the 1970s; the vcr, theremote control, and now tivo and the pvr (personal video recorder)
make it easier for audiences to avoid commercials. Meanwhile,advances in computing power have made individual targeting of consumers appear more practical, and the direct-mail industry has solditself hard on this basis.
However, it is probable that all types of paid-for brand communication will continue to play an important role in building brands in the
future, much as they have in the past. tv, despite the prophets of doom,
is still one of the world’s fastest-growing media, with the worldwide
number of tv homes trebling in the past 20 years (one-quarter of them
are now in China). And it still seems to work. Many advertisers who
thought that they could get more efficient results by shifting their tv
money into sponsorship or direct mail have found the results disappointing. This is not to say that sponsorship or direct mail are not valuable, but few brands have created or maintained strong brand identities
using these channels alone.

How do communications build brands?
Certain types of brand communication give information, or are aimed atleading directly to a transaction: brochures, coupons, mailshots, directresponse advertisements, and certain uses of websites and of most othermedia. But taking brand communications as a whole, through all channels, past and present, a great deal cannot be explained in either way.

128

BRAND COMMUNICATIONS

Sponsoring a Rolling Stones tour, or the large proportion of advertisingthat contains no actual information about the brand: what exactly arethese doing? How do they work, and how do they justify the large
shares of profits that successful brand owners often invest in them?
Some marketers may believe that any communication not directly
involved in selling must be an indulgence, but history shows that, withfew exceptions, strong brands are not built on this kind of thinking.
Communications with an immediate selling aim may appear moreproductive. Their direct results may be more easily measurable, but interms of the long-term health of the brand it may be others that create
more competitive advantage. Brand strength, although it involves sales,
is also about more than sales. It is about the ability of a brand to resist
competition, to support a premium price, to weather negative publicity
and thus to offer to shareholders a more reliable promise of future cash
flows.2 Brand owners will want to ensure that their communications not
only stimulate sales, but also enhance the underlying strength of thebrand.

Evaluating brand communications
Broadly, there are two types of measurable outcomes of brand communications:effects on sales or business and consumer responses. Both are important.
It used to be thought that sales effects of advertising could never besatisfactorily separated from other factors affecting the business. However, theproblem is not such a great one, as long as reliable data exists, especially with theuse of modern modelling techniques.
Consumer responses include reactions to the advertising itself – recall, liking –and attitudes to the brand. Of these, brand responses are ultimately the more
important.
Longer-term effects of brand communications on the strength of a brand may beseen through attitudinal questions and by the brand’s marketplace performance,such as its ability to command a price premium or resist competitive pressures.
Source: Feldwick, P., What is Brand Equity, Anyway?, WARC Publications, 2002

Stimulating short-term behaviour
Single-source panels are research sources that record both individual
buying behaviour and individual exposure to specific advertisements.

129

BRANDS AND BRANDING

Analyses of these have shown repeatedly that in about 45–50% of cases,
exposure to even one advertisement in a short period before buying
measurably increases the probability of buying the advertised brand,
sometimes by a very considerable degree. Thus advertising gives a real
short-term nudge towards increased choice of the brand. Interestingly,
one such analysis shows that the most effective communications are
not only biased towards information, but also seek to play on emotions
and to entertain.3
Longer-term effects on brand behaviour
However, the short-term effects of advertising in themselves are rarely
economic; profits on most brands would increase in the short term if
spending on communications were cut. But the return on these investments lies in the long-term economic value of advertised brands. Brands
that are supported with effective communications are more profitable,
can command a premium price and are resilient to competitive activity.
There is evidence for this in many specific case histories and in multibrand studies such as the pims database, as well as the continued
behaviour of most big brand marketers.4

How do brand communications influence behaviour?
Any attempt to explain mental processes inevitably oversimplifies, butthree common strands of thinking can be used to explain the process bywhich communications about brands have an influence on people’s
behaviour. These are loosely based on a 1990 study by Mike Hall andDoug Maclay, two British researchers.
By communicating information
Claude Hopkins, an early and influential theorist, claimed that this waswhat really mattered. “Give people facts … the more you tell, the more
you sell,” he thundered in 1922. In Hopkins’s view, humour, unusual
visuals, even white space, were all wasteful or counterproductive.
Within the limits of his own experience, Hopkins was more rightthan wrong. His experience was writing what were then called “mailorder” advertisements, those with a coupon for the reader to close asale, or at least send for more information. By careful measurement ofresponses, Hopkins and his contemporaries learnt from experience
exactly what worked most efficiently.
Hopkins’s rules are still good ones for most direct-response advertising, and for any situation when, in Hopkins’s words, you want to “hail130

BRAND COMMUNICATIONS

a few people only” and give them information that will be of interest tothem. However, not all brand communications work this way.
Hopkins wrote:
The sole purpose of advertising is to sell … it is not to keep yourname before the public. It is not to help your other salesmen.
But why not? Much advertising, perhaps most, does precisely thesethings. To say that the purpose of advertising is to sell is as helpful assaying that the purpose of a football team is to score goals. In one sense,
this is absolutely correct, but it is misleading in so far as actual shots at
the goal form a tiny part of what footballers actually do on the pitch(and indeed, off it) which is necessary to make those goals possible. In
the words of Stephen King, the founder of account planning at the J
Walter Thompson agency in the 1960s, the most important role ofadvertising is not to sell, but to create “sale-ability”. This begins to
explain why much effective advertising not only contains no factual
information, but also can break any or all of Hopkins’s other rules.
By creating awareness, fame, familiarity or “salience”
This cluster of ideas is based on the fact that we have a general tendency, other things being equal, to choose things we are more familiar
with, recognise or think of first.
We know this works at the individual level, from both advertisingexamples and psychological experiments. There is a social dimension toit as well. If a brand is famous, people generally assume it is popularand has the endorsement of others. ddb’s Brand Capital survey has
shown the power of this “contagious demand”, in that brands withmore “friends” almost invariably have a higher proportion of thosefriends as “lovers”; in other words, they have a stronger average attachment to the brand. In view of these findings it is important to think ofbrand communications not just as one-to-one messages from the brandto an individual, but also as public rituals creating shared meanings. Not
only do I see an ad, but I know everyone else sees it too, and in manycases I am aware of how they react to it.5
There is such strong evidence to support the importance of this“salience” model (in Hall and Maclay’s term) that some theorists believe
this is all that is necessary to explain communication effects. Andrew
Ehrenberg, a professor at South Bank Business School in London, argues
that this is all that advertising does. The role that creativity or distinct

131

BRANDS AND BRANDING

brand properties play in the process is simply to enhance the salience
effect, rather than to attach distinct meanings to brands. This may be an
extreme view, but there is no doubt that the role that fame and publicity play in advertising effect, quite independently of advertising content,
is often underestimated.

The Bud Light InstituteTo promote Bud Light beer in Canada, Anheuser Busch’s agency DDB invented the(ﬁctitious) Bud Light Institute. Its purpose is to help men spend more time with
their male friends, preferably drinking Bud Light, by creating elaborate strategies tohelp them escape from their wives or girlfriends.
TV commercials launched the institute by showing how, for instance, they could
provide a horde of Vikings to break up a family barbecue, or create the ﬁrst 48-hourromantic movie that would keep women occupied for an entire weekend. Anothercommercial was a spoof advertisement for a compilation of romantic songs withtitles such as I love you because you let me go out with my friends on a weekly basis.
(The interest in this was so great that a real CD called Ulterior Emotions was madeavailable through the Bud Light Institute website, and at one point this became thesecond best selling CD in Canada.)
Bud Light also covered a new office building in Vancouver with a huge hoarding
announcing that this was to be the headquarters of the Bud Light Institute. It
advertised for a director, held interviews and eventually announced the“appointment” of a real applicant.
In these and other ways the idea originally created for TV was developed into anelaborate joke through many different channels and devices. (As jokes are by theirnature analogic, this digital summary totally fails to reﬂect the fact that the
campaign is also very funny.)
The content of this campaign says nothing about the product, and indeed beer isfeatured only peripherally or not at all. The campaign works by a witty sharing of
men’s feelings about women, creating a sense of complicity and a friendly
relationship with the brand.
Although one-to-one communications (website, promotions, direct mail) work
well as part of this campaign, its overall effect depends entirely on the public,
shared nature of the joke.

132

BRAND COMMUNICATIONS

By creating involvement
As well as these simple ideas, which could be called facts and fame,
there is also a third strand, often recognised but more difficult to put
into words. Hall and Maclay christened this involvement. James Webb
Young of J Walter Thompson, writing in 1960, talked of how advertising“creates a value not in the product”. Ernest Dichter and other Freudinfluenced advertising psychologists of the 1960s wrote about motivation, and stressed the importance of symbol and metaphor incommunication. Others have used the words enhancement and transformation. If you look at any selection of successful campaigns you willprobably agree that there is an element of persuasive communication
which is not based just on information or salience. Can we get closer todefining what this is?
This would be useful because this third strand is the one most likely
to be overruled in practice. As the hardest to define and analyse, andtherefore hardest to measure, it often has least force in the world ofcorporate decision-making. It is often subsumed under such unbusinesslike terms as emotion, intuition or artistry, resulting in frequent dialogues of the deaf between those who demand clarity and proof andthose who “just know what feels right” (often, but not always, the client
and the creative department respectively).
By drawing together some different ideas from neuroscience andcommunications theory, we can do something to legitimise this area.
Some of the following ideas are recent, some less so, but generally they
have not been applied enough to thinking about brand communications.
By creating associations that will influence behaviour
One idea that may help dates back exactly 100 years to the first serious
academic study of how advertising works: The Psychology of Advertising by Walter Dill Scott of Northwestern University published in 1903.
Scott’s theory, formulated long before Hopkins’s model of informationtransfer had achieved its hegemony, was based on the simple and longestablished idea of associations. As a psychological theory this goesback to Aristotle, and it was a key concept for 18th century philosopherssuch as David Hume and John Locke. It states that any idea or sense
experience automatically triggers connections in the mind to other ideas
and feelings, and that although these connections may not always be
conscious ones, they can be powerful enough to influence our
behaviour.

133

BRANDS AND BRANDING

Scott thought that advertising works by creating the right kind of
associations for the brand. This process does not have to be conscious orverbal. He writes about the effects of pictures in advertisements, criticising a picture of a frog in a coffee advertisement because coffee
should not be associated with a “disgusting, slimy reptile”. He also
quotes examples of how advertising can influence people’s attitudes tobrands without them being able to consciously recall seeing the advertising itself:
One young lady asserted that she had never looked at any of
the cards in the [street]cars in which she had been riding foryears. When questioned further, it appeared that she knew byheart every advertisement appearing on the line … and that the
goods advertised won her highest esteem. She was not awareof the fact that she had been studying the advertisements, andflatly resented the suggestion that she had been influenced bythem.
These ideas, which were subsequently sidelined in most advertising
thinking for almost a century, are now strengthened by some recent
findings in the study of the brain. Antonio Damasio in his book
Descartes’ Error6 writes of neural connections called “engrams” andlinks between thoughts and feelings which he calls “somatic markers”,
thus founding our whole decision-making process not in reason but inour emotions and unconscious memories. Daniel Schacter in Searchingfor Memory7 confirms Scott’s observation (one that, incidentally, mostadvertising researchers have been inclined to ignore or deny):
You may think that because you pay little attention tocommercials on television or newspapers, your judgements
about products are unaffected by them. But a recent
experiment showed that people tend to prefer products
featured in ads they barely glanced at several minutes earlier –even when they had no explicit memory for having seen thead.
The topics of the emotive nature of brand decisions, and the powerof implicit or low involvement processing, have been well reviewed byRobert Heath in his book The Hidden Power of Advertising.8
We can develop this third model, then, by arguing with Scott that134

BRAND COMMUNICATIONS

advertising works by creating associations that will influence behaviour.
These associations may well be non-verbal and also non-conscious. We
now understand from recent research that such implicit learning, farfrom being weak, can be extremely powerful.

Integration
Effective brand communications can be integrated in three different ways:

 Functional integration
 Brand integration
 Thematic integration
Functional integration means thinking about how the brand’s different actions
relate in real time and space to each other and to (for instance) the purchasedecision process. So to encourage employees to sign up for a health care plan, theymight need to go through a process of: recognising their need for health care; being aware of a particular brand; requesting information;
 reading the brochure; making an appointment for a sales meeting; keeping the appointment; concluding the agreement.
Moreover, the general effect of the brand’s mass communications on “saleability” is likely to have a signiﬁcant effect on conversion at each step of the process(though measuring response rates to each communication separately is unlikely toshow this).
This level of planning requires a good understanding of the prospect’s “road topurchase”, and the practical or mental barriers at each step. It should acknowledge
that creating sale-ability may be as important as closing a sale.
Brand integration means ensuring that everything the brand does in some way
reﬂects and contributes to its unique identity as a brand: its values, its tone of voice,the kind of relationship it aspires to have with others. This is broader and deeper
than a visual identity manual, although at a practical level this would also reﬂect thebrand’s identity in a tangible way.

135

BRANDS AND BRANDING

If a brand’s sense of identity is strong, this may be enough to ensure that any of
its communications will be unmistakably linked to the brand. (Early Volkswagen
advertisements were unlike other American car advertising, with simple black andwhite photographs of the car in white space, when everyone else was using coloured
drawings, propped with glamorous people and surroundings.) The use of visual orother brand cues – the Dulux dog, the Pillsbury doughboy, the colours of Mastercard– is another common and more tangible way of linking a brand’s communications
together, without necessarily going quite as far as thematic integration.
Thematic integration, unlike the ﬁrst two, should be regarded as optional but
nevertheless has powerful effects. This is when a speciﬁc creative idea is developed
through multiple channels or multiple messages: TV, outdoor, direct mail, internet
promotions. The Bud Light Institute is a good example of this.
Theoretically, the creative idea that links this kind of campaign together could
originate in any communication channel, from sponsorship to direct mail. In reality,
however, it is hard to ﬁnd examples of such big ideas that did not start in TV or print.
This suggests that the greater creative freedom of these channels, when they areused fully, will continue to be a crucial ingredient in effective brandcommunications.

Digital and analog communications
We need to realise, however, that if communication is non-verbal or
non-conscious, it is a very different type of communication from theconscious, verbal sort that we find so comfortable to analyse. Indeed, at
this point some readers may be worrying about the spectre of thehidden persuaders and sinister brainwashing techniques. But nonverbal, non-conscious communication is not something dreamt up byevil scientists or advertising people: it is simply the way we communicate most of the time in all our lives. In everyday interactions between
people, it has been shown that between 55% and 95% of communication
is non-verbal. We respond to gestures, tone of voice, physical appearance, clothes and context rather more than to what may be being said,
and most of the time we do this without being consciously aware of it.
Brands are no different.
We also interpret this non-verbal communication in a different way.
Watzlawick makes an important distinction between what he called“digital” and “analog” communications (using an analogy between different types of computers). Other terms for the same idea are “denota-

136

BRAND COMMUNICATIONS

tive/connotative”, or even “explicit/implicit”. Digital communication
aims to be precise; a word or symbol stands for one, unambiguous idea,
almost as in a code. In analog communication, meanings are not fixed;
they may vary from one recipient to the next, or in context, or simply
show a multiplicity of possible interpretations. (John Hartley Williams,
a poet, has written about “one dimensional and three dimensional language”, the latter including poetry.)
In business we have been conditioned to believe that digital (precision) is good and that analog (ambiguity or vagueness) is bad. Yet all
non-verbal communication, according to Watzlawick, is essentially analogic. This explains both the powerful effect that images, gestures ormusic can have and the unease that they can create in a business environment.
What is more, the function of analog communication is often different. For Watzlawick, every act of communication is about two things:
the actual content, and the relationship between the parties communicating. If we stop to think about much of our everyday conversation, forinstance (to say nothing of body language), small talk about weather,
sports or fashion has more to do with our relationships with each otherthan with its ostensible content.
This applies to brand communications too. If an advert, event or
mailshot is entertaining, shocking or informative, these choices ofintended effect, quite independent of content, say something important
about the brand and the relationship it proposes to have with theviewer. Looked at through this lens, many advertisements that seem
pointless when considered in terms of content take on a whole newlevel of meaning, one which the audience has no difficulty intuitively
responding to. (Max Blackston, a researcher, has argued that a person’s
relationship with a brand depends not just on what they think about thebrand, but what they think the brand thinks of them.)

The case of Degree
Degree antiperspirant was launched in 1990 in the United States, and by 2000 itenjoyed high consumer awareness for its body-heat activated positioning. Then new
research uncovered an emotional concern among men about perspiration, thatsweating was a sign of weakness or failure: “If you sweat, you’re toast.”
This insight created an opportunity to take body-heat activated to the next levelwith male consumers, and an integrated marketing programme was built around a137

BRANDS AND BRANDING

new male-targeted product differentiator: “Kicks-In In the Clutch.” Cartoon-styleadvertisements featuring action heroes in dramatic situations appeared in print andtv programming.
Building on the “Clutch Time” campaign, in 2003 Degree became the exclusive
antiperspirant licensee of the Ironman Triathlon, a brand that brought to life
Degree’s endurance and high-performance credentials. A complete integrated
programme featured creation of a Degree Ironman Team of athletes, brandsponsored TV programming, advertising and publicity, and even a new product,
Degree Ironman Protection.
Since the “Kicks-In In the Clutch” campaign was launched, the brand has gained
4% share, and independent testing revealed that Degree’s brand communications
received from men the highest awareness scores in its category in 2002.
This is a good example of “thematic integration”. It also illustrates some otherpoints made in this chapter: basing brand communications on consumer insight;
 understanding the emotional basis for consumer decisions, not just productfeatures; creating strong brand cues (in this case mainly visual) that strongly differentiate
the brand and stand for its distinct values; the leap from a strategic insight to artistry and imagination (from digital to analog).
With acknowledgements to Unilever

Watzlawick makes one further point of great relevance: it isextremely difficult to translate analog communication into digital. We
need only to discuss any successful advertisement with a group ofpeople to see this in action. Ask a simple question such as “What makes
this advertisement work?” and you will get a multiplicity of answers.
Many will contain some truthful element, but none will be the truth. Yet
marketers continually struggle to translate the visual or audio visual language of advertisements and brands into a digital, verbal language ofanalysis. We look at Budweiser’s well-known TV commercial “Whassup” and say it is about camaraderie; we look at the Michelin baby andsay it is about trust. But in the process we have lost everything thatmade those campaigns successful.
This is why Scott was not necessarily right when he complained
about the disgusting slimy frog in a coffee ad. That was only one possi-

138

BRAND COMMUNICATIONS

ble reading of the image. It might equally have been seen as, forinstance, playful, friendly, natural, organic, lively, jumping or fresh. Yet
these too are just words, none of which fully does justice to the image.
Images like this are powerful precisely because they are volatile andmultifaceted, so their interpretation in decision-making is never simple.
Many people might have wondered why chimpanzees were an appropriate vehicle to promote tea, as in the UK pg Tips campaign that ran for
35 years, or why frogs and lizards are an effective way to sell Budweiser.
One answer in both these cases is that because the creatures werestrongly anthropomorphised, their human characteristics predominatedover what might have been negative animal associations. But such rational analysis has its limitations when talking about successful brandcommunications.
Businesses that dream of certainty will always be uncomfortablewith the analog side of brand communications. But it would be a mistake to think that brands can do without this high-octane fuel, andequally wrong to think that the same results can be obtained byacknowledging only those aspects of communication that can be safely
digitised and analysed. This does not mean we are powerless to makegood decisions about creative work. We are all capable of making intuitive judgments as long as we are allowed to, and as long as we develop
our intuition rather than suppress it. We also have a useful, if not infallible, guide in the voices of the target audience, as long as we knowwhat kind of questions to ask them and how to make sense of their
responses.
But if we acknowledge that this level of communication is importantin advertising, it also explains why much that is important defies simple
analysis. Bill Bernbach, voted the most influential person in the advertising business in the 20th century by Ad Age, once said:
Logic and overanalysis can immobilise and sterilise an idea. It’s
like love – the more you analyse it, the more it disappears.
He also said:
Is creativity some obscure, esoteric art form? Not on your life.
It’s the most practical thing a businessman can employ.
Referring to a famous and successful mail-order advertisement for acorrespondence course, which ran for years from the 1920s onwards

139

BRANDS AND BRANDING

under the headline “They laughed when I sat down at the piano …”,
Bernbach remarked:
What if this ad had been written in different language? Would
it have been as effective? What if it had said, “They admired
my piano playing”, which also plays to the instinct of being
admired? Would that have been enough? Or was it the
talented, imaginative expression of the thought that did thejob? That wonderful feeling of revenge.
Suppose Winston Churchill had said “We owe a lot to the
RAF” instead of “Never was so much owed by so many to sofew”. Do you think the impact would have been the same?

Conclusion
Brand communications may do three things for a brand. They can: provide information about the brand; make a brand famous and familiar;
 create distinctive patterns of associations and meanings thatmake the brand more attractive and saleable.

These associations and meanings may be non-verbal and non-conscious. The communication will be analog as well as digital and its purpose is about creating a relationship with the brand as well as about its
actual content.
This may all sound theoretical, but is simply trying to find words tobring into consciousness things that we all experience every day in all
types of communication. These ideas may not be ones we could ever
objectively call right or wrong, but they may be more useful in conceptualising the ways in which communications build brands. Certainly,
these ideas help make sense of many aspects of successful advertisingwhich are poorly explained by the models of information/persuasion or
simple saliency.
They also have big implications in practice: The return on communications budgets should not be measured

only in the short term or in sales responses that can be directly
linked to specific activities. For many brands, investment incommunications, at a level comparable with competitors, should
be regarded as a continuing cost of doing business and ensuring140

BRAND COMMUNICATIONS

the future cash flows of the brand.

 Not all effective brand communications can be intellectualised interms of content. Rational decision-making processes may destroy
the analog communications that could become a major source ofadded value.
 Research techniques for evaluating advertising or othercommunications, whether before or after exposure, can easily
become biased towards things that are easy to measure, such asverbal understanding of information or conscious memory. These
do not necessarily reflect the effectiveness of communications.
Lastly, there are two caveats:

 To be clear, this chapter does not mean to argue that analog isgood and digital is bad. Human beings communicate in bothways. Sometimes precise information is the most persuasive
thing to offer, and offering information in itself creates a certain
kind of relationship. With the current decline of the “‘long copy”
ad, there are undoubtedly many missed opportunities in such
categories as it and finance for brands to differentiate themselves
positively by having an intelligent dialogue with their customers,
rather than paying for yet another full page in a broadsheet
newspaper containing a picture of a flower and a portentous
phrase like “inventing the future”.
 Effective communication frequently defies simple analysis, but
this does not mean that the process of planning brandcommunications should be without any discipline. Importantquestions should always be asked, such as what is the objectiveof the communication, who are the target audience, what action
does the communication seek to influence? And they should
always be answered on the basis of the best and most sensitive
understanding of the people you are seeking to communicate
with. Consumer understanding and insight are an essential
starting point, but effective communication at some point needs
to take a leap into the realm of intuition and artistry. To quote Bill
Bernbach again:
There are two attitudes you can wear: that of coldarithmetic or that of warm human persuasion. I will urge
the latter on you. For there is evidence that in the field of141

BRANDS AND BRANDING

communications the more intellectual you grow, themore you lose the great intuitive skills that make for thegreatest persuasion – the things that really touch andmove people.

Notes and references
1 Watzlawick, P., Pragmatics of Human Communication, W. W. Norton,
1967.
2 See Chapter 2.
3 Jones, J.P., When Ads Work, Lexington Books, 1994.
4 Doyle, P., Value Based Marketing, John Wiley & Sons, 2000.
5 Crimmins, J. and Anschuetz, N., “Contagious Demand”, Market
Research Society Conference, 2003.
6 Damasio, A., Descartes’ Error: Emotion, Reason, and the Human Brain,
Putnam, 1994.
7 Schacter, D., Searching for Memory: The Brain, The Mind, and The
Past, Basic Books, 1997.
8 Heath, R., The Hidden Power of Advertising, WARC, 2002.

142

9 The public relations perspective on
branding
Deborah Bowker

erceptions, accurate or not, are the basis of decision-making. The
power to shape perceptions is contingent on credibility, which only
too quickly disappears when corporations or their managers are seen tobe behaving in a way that undermines trust in their standards andmotives. Public relations is increasingly about communicating crediblywith key audiences who affect business results, such as media analysts,
policymakers and policy influencers, customers and shareholders. It is
an important element in supporting the power and value of an organisation’s brand to all stakeholders.
All the elements of a corporate brand, from tone and personality,
functional and emotional benefits, core message and end goal, to its reputation – if fully leveraged with internal and external audiences – canhelp raise performance and credibility. Enhancing the awareness,understanding and commitment to a brand through a pr/communications strategy is usually an essential part of any overall strategy aimed
at sustaining and raising standards of performance and credibility.

P

Putting the brand in context
A brand is far more than a visual symbol and memorable tag line; itanchors the mission and vision, operating principles and tactics of anorganisation. Internally, the brand is central to all decisions, actions andvalues, thus enabling employees to deliver the brand promise. The internal and external messages about the brand must tell the same story and be
seen as part of the same narrative, and they should relate to the following: Values – the organisation’s core beliefs; what it and the brandstands for.

 Behaviours – how the organisation interacts with internal andexternal stakeholders.

 Positioning – what the organisation wants stakeholders to think
about a brand.

 Identity – names, logos, visual standards, verbal themes.

143

BRANDS AND BRANDING

2.1
9.1

Brand organisational context
MISSION
Our purpose: what we do,what we are about today

VISIONAn aspirational statement of what wewant to become at some point in the
futureOPERATING PRINCIPLESHow we conduct businessat this point in time

BRAND
Essence/dimensions
ValuesCore beliefs/
what we stand for

Positioning
What we want stakeholders
to think about a brandBehaviours
How we interact withinternal/external stakeholders

Identity
Names, logos, visual standards,
verbal themes

Business objectives
What we want to accomplish
at this point in time
Business strategies
How we can achieve ourcurrent objectives

Business tactics
Marketing &communications

Product/service
development

Operations

FinanceTechnology

Human
resources

Product/service
delivery

Source: Burson-Marsteller

A brand’s value can be judged by an organisation’s performance andthat depends on interconnections. Recognising and reinforcing a brand’sinterconnections with an organisation’s culture and performancethrough a communications campaign focused on employee alignment
with business results and reputation can have powerful effects.
Brand identity must be built from within, across geographies, levels
and functions. The notion of a winning culture is reinforced over timethrough recruitment, training, structure, reward and recognition alignedwith the brand dimensions of values, employee behaviours, external
positioning and symbols.
Brand-based values rather than vacuous slogans help people to “walkthe talk”, and defined behaviours, relevant to individual employees’ dayto-day life, bring these brand-based values to life. Creating a communityof employees who share an understanding of these values andbehaviours brings a vibrancy and momentum to an organisation andhelps focus people on the need for consistently high standards of performance. This is the source of customer satisfaction and corporate reputation.

144

THE PUBLIC RELATIONS PERSPECTIVE ON BRANDING

9.2
2.1

Brand organisational linkages
Build the brandfrom within

Brand

Employee alignment

CultureCreate awinning culture

Performance

Improvedbusinessresults

Solidreputation

Drive behaviours that
improve performance

Source: Burson-Marsteller

The linkage with performance and reputation
High-performance organisations share certain characteristics at every
location and level:

 Focus – a few key measures of success are clearly understood.
 Unity of purpose – a “one company” mentality with everyone
pulling together.

 Energy – a sense of urgency, often emanating from the desire tofulfil a customer need.

 Agility – an ability to adapt to a changing business environment.
 Learning –a desire to share knowledge and the organisational
infrastructure to enable knowledge to be shared.

 Identity – an individual and collective identification with anorganisation’s mission, values, business strategy and brandpromise.

If all the above characteristics are fostered, high standards ofperformance can be sustained even in the face of fierce competition.
High-reputation organisations share certain robust drivers of reputation. For example, companies on Fortune’s Most Admired Companies
list are rated by surveying perceptions of their reputation drivers amongindustry analysts, directors and managers. These drivers include: quality of management; quality of products and services;145

BRANDS AND BRANDING

 innovativeness; value as a long-term investment; soundness of financial position;
 wise use of corporate assets; ability to attract, develop and keep talented people;
 responsibility to the community and/or environment.
These drivers are given different weight and priority in different
industries. But it is fair to say that they are perceived as strong or weakin a particular corporation based not only on actual financial performance, but also on perceptions of management reputation and credibility,
and commitment to human assets and community relationships. A
brand that is consistently perceived as representing high standards ofquality and integrity is a strong and valuable brand.
Brand-owning organisations that are highly regarded share certain
things: Leadership – a recognition that the brand is personified by theceo and the whole senior management team.

 Pride – an appreciation that individual employee pride leads tocollective quality.

 Innovation – evidence that sharing of ideas and the responsibility
for taking risks is encouraged and rewarded.

 Long-term view – a focus on what is right in the longer term
rather than what is expedient in the short term.

 Citizenship – an organisational commitment to acting as a good
citizen.

 Talent – a recognition that talent must be valued and nurtured.
A brand can embody all of the above if there is a conscious choice tobroaden its meaning beyond product benefits in order to connect withstakeholders in a holistic way. Public relations can help make that connection though a wide range of activities, as the following examples
demonstrate.
Brand and performance: Unilever
Unilever, a global company based in London and Rotterdam, owns
many famous brands, ranging from Dove soap to Lipton tea to Birds Eyefrozen foods. The company believes that agility, innovation and a focus
on sustainable growth are keys to success.

146THE PUBLIC RELATIONS PERSPECTIVE ON BRANDING

In addition to product advertising and promotion, in recent years asignificant emphasis has been placed on communicating the Unilevervalues and behaviours that drive growth. A multimedia internal communication programme has been implemented at all levels from theplant floor to the ceo.
Shared values have been identified and desired behaviours defined,
and rewards and recognition have been aligned around thosebehaviours. In an organisation that has traditionally functioned as separate units, all employees now focus on a consistent set of measures ofsuccess, with an eye on creating a winning culture. The focus on values
and growth at every level is working well. In 2002, Unilever’s leading
brands in the home and personal care division surged with sales growthof 6.7%, while overall sales increased by 5.2%. This was in line with
Unilever’s Path to Growth strategy that is being implemented globally.
In Unilever’s 2002 annual report, the letter from the chairman states:
We can only meet and sustain the objectives of our Path toGrowth strategy if our people have passion for winning and aculture that encourages and rewards enterprise. The
development of Leaders into Action programmes, and the days
we spend with our young leaders of tomorrow, are part of an
overall programme to drive change. The results are evident in
the enthusiasm to win we see throughout the business andexamples of innovation that are driving fast growth andimproved results.
Brand and reputation: Coca-Cola
Coca-Cola, a global beverages company which owns one of the world’s
most famous brands, faces a number of challenges to its reputation as aresult of increased antagonism to global brands, especially those sostrongly identified with the United States.
Coca-Cola has taken several steps to recover any loss of reputation it
has suffered. On obesity, which some have attempted to link to softdrinks, the company and its bottling partners have emphasised the
choice of “diet” and other drinks. Its guidelines say that there should be
no overt marketing of soft drinks to children who are 12 or under, vending machines offer a “portfolio” of beverages (soft drinks, water, fruit
juice), and sponsored programmes in schools reinforce an active lifestyle.
As far as anti-Americanism is concerned, Coca-Cola may be an American brand, but its philosophy and the way it operates are international.

147

BRANDS AND BRANDING

Outside the United States it has local managers and employees andtakes care to demonstrate good local citizenship.
Doug Daft, Coca-Cola’s ceo, states in the company’s 2002 annual
report:
The values that underpin our success are integrity, quality,
accountability, diversity, relationships based on our respect foreach other, for the communities where we do business and for theenvironment. People know what to expect from the Coca-Cola
Company precisely because we have always lived by our values.
When a consumer enjoys a bottle of Coke, when people invest inus, when partners do business with us, or when we operate in acommunity, we keep our promise to benefit and refresh them. We
create value – economic and social – reliably and predictably.

The brand is the corporation
Ken Chenault, ceo of American Express, said recently:
Our brand is, in essence, the litmus test for every businessdecision we make, and for the way we conduct thosebusinesses. Because of this, our brand values and our
corporate values must be consistent.
A survey of 137 American companies’ executives, included in the
April 2001 Conference Board report, Engaging Employees through yourBrand, states:
Executives told us their brand was being used as a rallying
point for employees in a time of extensive change. Moreover,they expected employees to exemplify the promises the brandmakes to the firm’s customers.
From academia, Don Schultz, a professor at Northwestern University,offers:1
A key to success appears to be the ability to develop
appropriate internal systems to support the brand or brands
and foster a unified, co-ordinated and cohesive execution of thebrand promise in all its many dimensions, from
communication to product development to customer service.

148

THE PUBLIC RELATIONS PERSPECTIVE ON BRANDING

A robust corporate brand should: inform public policy and corporate positioning; support change initiatives; stand for credibility in difficult times;
 underscore employee values and guide behaviours.
This should happen if the corporate communications function
assumes its responsibilities in championing the brand, protecting its reputation and demonstrating its values.
If a financial services organisation’s goal is to be positioned as trusted
adviser, then questions of corporate transparency must be weighedfrom many different viewpoints. What will be the short- and longerterm impact on the organisation’s financial position, assets, values, andso on?
If a technology company is moving from selling boxes to selling solutions, then the brand needs to take into account and adapt according to
how the change enhances core assets, strengthens functional benefits
and aligns with evolved values.
As companies contemplate choices confronting them – for example, executive remuneration packages, sponsorships, reaction to a
newsworthy issue – focusing on the core brand values can help themmake the right decisions. It is often the vice-president for corporate
communications or a pr consultant who will be the “conscience” inthe debate.
Employees need to live according to the values of the brand and the
behaviours that support those values. Southwest Airlines, US Postal Service and Four Seasons Hotels, for example, place customer-focusedbrand promise at the forefront of their new employee orientation, training, and reward and recognition programmes.
Herb Kelleher, a former ceo of Southwest Airlines, says:[Our people] know what needs to be done and they do it. Our
culture is our true competitive advantage.
In quantifying the difference the engagement of employees canmake to a business, in an article in the Harvard Business Review
Anthony Rucci et al. stated:2
A 5 point improvement in employee attitudes will drive a 1.3

149

BRANDS AND BRANDING

point improvement in customer satisfaction, which in turn will
drive a 0.5% improvement in revenue growth.
To get the most value out of a brand, it must be: defined by behaviours that will bring the brand to life; interconnected with elements driving organisational
performance;

 recognised by leadership as a source of strategic focus;
 launched internally with a sustaining plan; reinforced by pr efforts in times of crisis or celebration.
To leverage the value of their brands, organisations need to recogniseand communicate with the full range of stakeholders. Public relations
can play a crucial role in this.
pr is not simply about making statements and issuing press releases.
Today’s best corporate communications functions recognise that accurately assessing and strategically shaping corporate perceptions musttake account of the full array of influencers who drive issues, shape perceptions and have an impact on media coverage, and ultimately corporate reputation.
An affirmation of “who this corporation is and what we promise ourcustomers, our shareholders, our employees, our communities” serves
any organisation in times of crisis or celebration.
US Postal Service: in crisis
The US Postal Service as a brand has been tested over time, from “goingpostal”, referring to violence in the workplace, to “the mail moment”,
representing the anticipation and value of the mix of mail in a mailbox.
The “We Deliver” tag line neatly encapsulates both the delivery of the
mail and the brand promise.
Measures of the usps brand reveal that it has enduring relevance andvalue to consumers, despite negative images of “snail mail” that attach
to the medium itself. The brand attributes of traditional, reliable, trustworthy, and “cares about customers” served it particularly well throughout the anthrax crisis that followed the terrorist attacks of September
11th 2001.
Letters containing the deadly anthrax virus were delivered throughthe mail to the US Senate in Washington, dc, and to news media offices
in New York and Florida. Some 800,000 employees were potentially at

150

THE PUBLIC RELATIONS PERSPECTIVE ON BRANDING

9.3
2.1

360-degree audiences

Community• New geography• Community leaders• Public legislators• Regulators• Academics

Organisation• Leadership• Employees• Suppliers• Partners

Market• Current customers• Potential customers• Competitors• Industry analysts• Opinion leaders

Financial community• Shareholders• Prospective investors• Lenders• Analysts• Rating agencies

Source: Burson-Marstellerrisk and 28,000 facilities were potentially contaminated. The safety ofthe mail was in question.
The challenge was to restore confidence and trust in the postal
system among employees, who were handling and delivering the mail;major businesses and other organisational users of the mail system; andthe public, who were continuing to receive their mail each day. Every
stakeholder had to be reassured.
Tactically, the usps managed the crisis in innovative ways, including: A special mailing for every American household with safety
guidelines for mail handling.

 A redesigned internet site, created in just days, with a dedicatedsection on “keeping the mail safe and moving” with audiencetailored facts, videos, questions and answers, posters and mailservice updates.
 A daily or twice daily facts update posted on the website andsent via e-mail and fax, eliminating thousands of customer andmedia calls.

151

BRANDS AND BRANDING

 A daily update for local postmasters with facts and messages fortheir discussions with employees, customers, and communities.

 A three-tiered spokesperson cadre and daily press briefings withmajor media when needed.

 Mandatory all-employee meetings for the 800,000-person

workforce with supervisors using crisis discussions and toolkits.

 An employee hotline for illness reports and general information.
 A summit with executives of major customers to discuss ways tokeep the mail safe and moving.

The usps moved through the crisis with its credibility intact and evenenhanced. It demonstrated a communications function that was capableof more effectively managing information and stakeholder relations.
Two surveys carried out in late 2001 showed that the brand’s reputation
was intact:

 A public opinion poll indicated 97% of respondents approved of

its overall handling of the crisis; 96% said it was doing everything
within reason to protect against future terrorism.
 Of the 90,000 employee respondents to a “Voice of the
Employee” survey, 71% responded favourably to the statement: “I
am proud to work for the Postal Service.”
The strength of the usps brand had given it a reservoir of public trust.
The decision to provide continuously updated, reliable information
reinforced that trust. By continuously providing reporters with facts andthe public with consistent advice, ill-founded rumours were quickly
quashed. Competence, caring and common sense prevailed.
Coca-Cola: in celebration of a promise
Pure celebration is one of Coca-Cola’s everyday brand messages. The
task of pr is not to echo the marketing message, but to build on it
through a range of stories that might involve local relationships, marketplace innovations, corporate responsibility and business results. prshould connect the dots between the product and citizenship, bottlers
and community relationships.
Doug Daft, the ceo, explains:
Some people would say our business is selling soft drinks.
Others would say that our business is creating a special

152

THE PUBLIC RELATIONS PERSPECTIVE ON BRANDING

moment of refreshment, an experience. After more than 30
years of working in this great company, I would say ourbusiness is building relationships. These relationships must be
based on mutual benefit, trust and shared values. This is theessence of the Coca-Cola promise.
Ensuring that we operate as a good corporate citizen isessential – to the strength of our brands, to the value we buildfor our share owners and to our success as a company.
Building a bright future for our business rightfully includes acommitment to helping build healthy, sustainablecommunities.
Ways that Coca-Cola builds its relationships and reputation include: Associations with a world of sports. Coca-Cola is the longest

continuous sponsor of the Olympic Games, starting in 1928. CocaCola and its bottling partners support more than 50 sports in 200
countries, from grassroots soccer clinics in the Philippines tointernational competitions such as the World Cup.
 Through pr, highlighting innovation in connection with new
products, techniques and technologies. In Asia alone, 21 new
products were introduced in 2001, including fruit juices, waters,
energy drinks, teas and coffees.
 Forming alliances with those who seek solutions toenvironmental challenges, such as the World Wildlife Federationand the National Geographic Society.
Managing the array of pr opportunities requires a disciplined
approach: A worldwide team of corporate communications professionals

linked through technology who are all fully aware of what CocaCola’s position and message are on scores of issues.
 Constant multinational dialogue and examination of “local”
issues which can become “global” issues.
 A clear understanding of worldwide, major media perceptions
and relationships.
 An increasingly tighter linkage between marketing and pr
objectives.
 Consistent image and messages wherever they are to appear,153

BRANDS AND BRANDING

from the annual report to a report on citizenship to regional
employee publications.
 A redesigned intranet site highlighting continuously updated facts
and corporate points of view on complex issues.
 The credibility and value of the corporate communications
function underscored by reporting of results.
Clearly, Coca-Cola manages all the challenges to its reputation successfully as the company consistently stands at the top of worldwide
lists of corporate brands ranked by value. It also leads in its industry on
measures of long-term value.

Conclusion
pr gives “legs” and life to brand attributes and the essential brandpromise by telling credible stories and providing support for the truth ofa brand’s advertising images. This is all the more important in an evolving media and business environment.
Information sources have multiplied and consumers have become
increasingly sceptical and weighed down by information overload. A
National Quorum telephone survey of 1,007 American residents, conducted in February 1999 by Wirthlin Worldwide, a research and strategic consulting company, and published in The Wirthlin Report,3
indicated that four out of five respondents thought that news articles
were more believable than advertising. Three out of four felt that ads
stretched the truth about the products they advertise.
The proliferation of television channels and niche magazines, theeasy availability of 24-hour news and the exponential growth of theinternet mean that organisations have no place to hide. They have to beup to the mark, ready to rebut damaging stories, and they must always
make sure that they get their message across. The reality is that, according to Thomas L. Harris research, companies in the top 200 of Fortune’s
Most Admired Companies list spent twice as much on pr as those in thebottom 200.
All this illustrates how important pr is to brand strategy and to building and sustaining corporate reputation. The development of a successful pr strategy involves four elements:

 Identification of the various attributes and characteristics of thebrand; for example, its values and supporting behaviours, its
positioning and identity. Once these have been identified an

154

THE PUBLIC RELATIONS PERSPECTIVE ON BRANDING

assessment must be made of their implications with regard to anorganisation’s culture and opportunities for motivating
performance. Then a public relations platform can be built on thebrand’s attributes, characteristics and promise.
 The perceptions of all external stakeholders must be assessed.
This should extend beyond perceptions about products to include
such drivers of reputation as leadership, innovation, financial
value, quality of management and corporate citizenship.
 The corporate communications function should use the brand’s
attributes and characteristics internally to inform employees of
the company’s positioning on different issues to support change
initiatives, to underscore credibility in crisis and to guidebehaviour.
 An annual, measurable pr plan should be created, anchored by
the brand promise, with the objectives of shaping key audiences’
perceptions of leadership, customer connections, marketplaceinnovation and corporate responsibility.

Notes and references
1 Ad Age, October 30th 1998.
2 Rucci, A.J., Kirn, S.P. and Quinn, R.T., “The Employee-Customer-Profit
Chain at Sears”, Harvard Business Review, February 1998.
3 The Wirthlin Report, Vol. 9, No. 3, March 1999. National Quorum is atwice-monthly omnibus telephone survey; The Wirthlin Report ispublished bi-monthly.

155

This page intentionally left blank10 Brand protection
Allan Poulter

ow do we go about protecting this valuable yet intangible asset
known as a brand? This chapter is not concerned with how thebrand’s values are retained and developed from a commercial perspective (which is more than adequately covered elsewhere), but rather how
we can use the law to protect certain physical manifestations of thebrand from misuse or unauthorised use by third parties. In other words
how do we maintain the exclusivity in the use of the distinctive featuresof the brand?
The first task is to identify the features of a business that serve to distinguish that business from its competitors or, indeed, any other business. The most obvious example is the brand name. But there are manyother features that make up or represent the brand: logos, slogans,colours, sounds, the shape of a product, the “get-up” of packaging or“trade dress”, layout of retail outlets, and so on. Which of these features
would a brand owner want to prevent a third party from adopting?
Then there is the question of the geographical extent or aspirations ofa business (and any local variations of the distinctive features that havebeen identified). Once these decisions have been taken it should be possible to identify what protection may be available in each relevant
country.
Lastly, there is the crucial question of cost. What budget is available
to protect the features that have been identified as important? It is
unlikely that the allotted funds will be sufficient to allow for all possible available protection to be sought in all the countries of interest. It
will be necessary to prioritise and determine what gives the best value
in terms of the extent of protection afforded.
The area of law that is most useful in providing protection to thebrand owner is that of intellectual property rights. There has been a fairdegree of harmonisation of intellectual property laws throughout theworld, and many of the principles discussed below are of general application in many of the major commercial jurisdictions. The need for aconsistent approach to the protection of intellectual property rights on
an international scale has long been recognised through a number ofH

157

BRANDS AND BRANDING

international initiatives that have supported the concept of reciprocal
protection for such rights between countries. Although there may belocal variations (particularly in procedure), the principles of protection
are broadly the same. The position is continually evolving, but the trend
is certainly towards harmonisation. This chapter concentrates on thegeneral principles that apply in common law jurisdictions like the UK
and the United States, referring also to EU and international initiatives.

Trade marks
By far the most important weapon in a brandowner’s armoury is a comprehensive portfolioof trade mark registrations. Trade mark rights
are territorial and it is now possible to fileapplications for registration in just about
every country of the world. The first application filed in the UK for trade mark registration
was in 1876 for the Bass “Red Triangle” label
mark and it remains on the register today.
Indeed, many trade marks still on the register
have celebrated their centenary, including
household names such as Kodak, Coca-Cola and Wedgwood, to namebut a few.
The legislation relating to trade mark registration has attempted tokeep pace with changes in commercial practices, and there has been afair degree of harmonisation of trade mark law, particularly within theeu. For example, the UK Trade Marks Act 1994 reflects the European
Trade Mark Harmonisation Directive. Its definition of trade mark is verybroad:A trade mark is any sign which is both a) capable of being
represented graphically; and b) capable of distinguishing goods
or services of one undertaking from those of other
undertakings (Section 1(1)).
It goes on to state – and this is not an exhaustive list – that a trade
mark may consist of… words (including personal names), designs, letters, numerals,
or the shape of goods or their packaging.

158

BRAND PROTECTION

This marks a significant change, because under the previous legislation (Trade Marks Act 1938) an application had
been filed for registration of the shape of the Coca-Colabottle as a trade mark. The application was refused and thedecision was upheld on appeal at the highest level. The basisof the refusal was that what was being sought to be registered was the product itself rather than something that wasapplied to the product. Following the implementation of the1994 act, a new application was filed for the shape of thebottle and this went through without difficulty. Indeed, many shapes
have now been registered as well as the colours, sounds and evensmells that form part of the “get-up” of products.
The European Harmonisation Directive has served as a model formany other countries that have adopted new legislation governing trade
mark rights in recent years.
What should be registered?
When considering what should be the subject of trade mark protection,
the first step is to identify the features of a business that serve to denotethe origin of the goods produced and/or services provided by that business. For example, Nike has protected, among other things, its word
mark Nike, the swoosh design mark and the strapline “Just do it”.
The Intel Corporation has registered its name Intel and the distinctive
jingle that features prominently in its advertising and promotional campaigns. Sounds are becoming increasingly more important in commerce,and sonic branding is an area where there are likely to be further developments. This is particularly the case in the area of mobile telephony,which certainly lends itself to such marks because the visual imaging on
handsets is, of necessity, limited.
Orange Personal Communications has registered both the name
Orange and the colour orange for telecommunications services andrelated goods.
There are also examples of smells being registered, including “thestrong smell of bitter beer applied to flights for darts”. However, a recent
decision of the European Court of Justice has called into the question theregistrability of smell marks having regard to the difficulty in representing such marks graphically with sufficient clarity to define the scope of
the protection afforded. The US Patent Office has accepted smell markregistrations, including the smell of plumeria blossom applied to thread.
Registrations have been secured for the shape and get-up of products,

159

BRANDS AND BRANDING

holograms, animated marks, the distinctive layout of retail outlets andeven gestures.
Classification of goods and services
Once the relevant distinctive features have been identified, the next stepis to decide on the range of goods and services for which protection isrequired. This is, predominantly, a commercial decision based on thenature of the business being conducted and any likely expansion of its
commercial activities.
Most trade mark registries have adopted the Nice classification
system, which divides the register into 45 classes. When the range ofgoods and services for which registration is to be sought have been identified, it is necessary to determine the specific classes within which thesegoods or services fall. In many countries it is possible to file a single
application covering any number of classes, paying an additional fee foreach class, whereas other countries still require separate applications to
be filed for each class. This can be costly.
Different countries take different positions on what is an acceptablespecification. For example, the United States requires specifications to be
restricted to those goods or services for which use of the mark can beestablished. The UK, however, allows for broad specifications as long as
the applicant has an intention to use the mark for the goods and services
claimed. In many other countries it is possible to file for all goods andservices.
To avoid registers becoming cluttered with registrations of marks thatare not being used, there is usually provision within the local legislation
providing for the possibility of a registration being attacked on the
grounds of (usually five years) non-use.
Where should registration be sought?
Having identified the mark or marks for which protection is required andthe relevant goods and services to be covered, consideration has to begiven to the geographical extent of protection that should be sought. This
will normally be governed by a company’s current activities and its shortto medium-term ambitions. Of course, it may be that different marks will
be used in different jurisdictions and the range of goods or services provided may also differ. However, once a decision has been made as towhat protection is required and where, the next step is to identify how
best to obtain appropriate protection in the most cost-effective manner.
One possibility is to file applications in each of the countries of inter-

160

BRAND PROTECTION

est directly through the national registration system of that country. This
would normally require the instruction of lawyers in each country to
file the application. However, an international registration system (theMadrid Agreement and Madrid Protocol) allows for a single application
to be filed at the World Intellectual Property Organisation (wipo) in
Geneva, nominating the member countries for which applications are
required. Where this is possible it can result in significant savings, as
local lawyers will only need to be instructed if there is opposition or an
objection to the application. A list of member countries of both theagreement and protocol can be found at www.wipo.org/madrid/
en/index.htm. A notable exception is the United States, although it isscheduled to join the protocol in November 2003.
Within the eu it is also now possible to file a single application for a
Community trade mark registration through the Office for Harmonisation in the Internal Market (ohim), which is based in Alicante, Spain(colloquially known as the Community Trade Mark Office). This is not
merely a system for filing applications within the eu countries; it is alsoa unitary system resulting in a single registration that is enforceable
throughout the eu, effectively recognising the eu as a single market. As
well as being significantly cheaper than filing separate applications ineach of the eu countries (either directly or through the international
system), there are other significant substantive advantages of using theCommunity trade mark system. For example, it is possible to get an euwide injunction to stop anyone infringing the trade mark, and the genuine use of the mark in any of the eu countries should be sufficient toprotect the registration from an attack on the grounds of non-use. This isparticularly useful for companies that have no current trading activity
in most eu countries but intend gradually to expand their commercial
activities across the region.
Why register?
A registered trade mark provides its owner with the right to prevent theunauthorised use of the mark by a third party in circumstances wheresuch use is not justified. Again, in most countries, the rights conferred byregistration extend beyond merely being able to prevent use of the markin respect of the goods covered by the registration. In certain circumstances, they may allow the proprietor to prevent the use of “similarmarks” being used in respect of “similar” goods or services and, in somecases, the use of the mark in respect of “dissimilar” goods. The remedies
that are normally available include the grant of an injunction to prevent

161

BRANDS AND BRANDING

the continued use of the mark and an award of damages to compensate
for the loss attributable to the unauthorised use.
A registration is also a property right which can be assigned andwhich can underpin any licensing activity. This is particularly importantfor businesses involved in merchandising or franchising activities.
Maintaining a trade mark portfolio
The phrase “use it or lose it” is relevant to trade mark protection. If amark is not used within a country for the goods or services covered by
the registration, it is likely to become vulnerable to an attack. Furthermore, token use designed solely to maintain the validity of a registration
will normally be disregarded. Only genuine use of the mark within therelevant territory is likely to be sufficient.
Renewals
Trade mark registrations last for a defined period, usually ten years, andhave to be renewed if they are to be retained. It is, therefore, imperativethat effective mechanisms are put in place to ensure that renewal deadlines are not missed. One important advantage of registered trade markprotection over other intellectual property rights is its potentially perpetual nature.
Watching services
It is, of course, only possible to take action against potential infringements if and when you become aware of them. It is important that
employees, local distributors and other parties involved in the company’s business are made aware of the need to report instances ofpotentially infringing activities, and that there is in place a reporting linethat enables such information to reach the desk of the person or department within the organisation responsible for handling these issues. It is
certainly worthwhile subscribing to a watching service so that notification is received of any attempt by a third party to register a mark that issimilar to your mark. You can then take action to prevent registration
and, if appropriate, to prevent the use of the mark by the applicant.
Record keeping
It is essential to keep comprehensive records of the use of the mark ineach country as well as copies of promotional and marketing materials
and evidence of sales in each country. The first line of defence in an
infringement action is for the defendant to attack the validity of the reg-

162

BRAND PROTECTION

istration on the grounds of non-use. It is not uncommon for companies
to have difficulty in obtaining evidence of their use of marks even
where such use may have been extensive. This information will also be
relevant in infringement proceedings or passing off (see below) or
unfair competition actions where it is necessary to establish goodwill or
reputation within a particular jurisdiction.
Creating a new mark: searching
There is no point in selecting a new mark where, because of earlier conflicting rights, the use of the mark is likely to be prevented by the ownerof such earlier rights. As well as ensuring that the new mark satisfies thecommercial demands of the company and does not have any unfortunate linguistic or cultural connotations, sufficient legal clearance
searches have to be conducted. Although the cost of these searches may
seem daunting, they can represent a fraction of the cost of having tochange the name or fight infringement proceedings following a rebranding project or the launch of a new product or service.
You can save money by allowing sufficient time in the name creation
process for straightforward searches for identical (or almost identical)
names and marks before embarking on the more comprehensive fullclearance searches that are required to enable legal advisers to make an
informed decision about the availability of the chosen mark.
Searching is a form of risk assessment or insurance. The more comprehensive the searches conducted, the less likely it will be that significant problems will be faced. A properly conducted search programme
will help to avoid both the embarrassment of launching a brand whosename you do not own in territories that matter and the cost of withdrawing it and rebranding.
The legal aspects of creating a new name should never be underestimated. There are more than 500,000 registrations on the UK register
alone with over 35,000 new applications being filed each year. Since its
launch in 1996, over 300,000 trade mark applications have been filed at
the Community Trade Mark Office. The procedure is even more difficult in the United States, where there are well over 1m current trade
mark registrations.
It is uncommon for any search report to conclude that there are no
risks associated with the proposed adoption of a new mark. However,this does not necessarily mean that such a mark should be disregarded.
Many options may be available to overcome any conflicting rights identified by the searches. Earlier trade mark registrations may no longer be

163

BRANDS AND BRANDING

in use for all or even any of the goods or services covered by the registration and may be open to a challenge on the grounds of non-use. In
other circumstances, where there is a technical legal risk that has been
identified, it may be that further investigations could establish that there
is no commercial overlap with the activities of the proprietor of the earlier right and that a co-existence agreement can be negotiated to avoid or
reduce any potential conflict between the parties. Earlier rights can also
be purchased or licences negotiated. It has even been known for the proprietor company to be purchased in order to secure the rights in a name.
You should also be prepared to allow time and budget for any further investigations or negotiations that may be necessary.
In general, the less distinctive the chosen mark, the more likely it is to
run into problems. Furthermore, rights conferred on marks that are of a
descriptive nature are likely to be construed restrictively. Indeed, mostregistries refuse to register a mark that consists exclusively of words thatare descriptive of the goods or services or their characteristics unless it
can be established that the mark has become distinctive as a result of its
use by its owner. The more descriptive the mark is, the harder it is toestablish acquired distinctiveness.
The failure to conduct appropriate clearance researches can haveexpensive consequences. Although trade mark infringement claims following the launch of a new brand or company name do not often cometo the public’s attention (usually because any subsequent settlementagreement will include a confidentiality clause), it is not uncommon forsuch claims to be made. Substantial payments have been made within
the context of a co-existence agreement to avoid the need to cancel alaunch, remove a product or rebrand. There are examples of sevenfigure sums being paid to avoid the possibility of a negative result
within litigation even where the alleged infringement claim has had
little prospect of success, thereby removing the slight risk of the additional expense, inconvenience and embarrassment associated with anaborted rebranding exercise.
Trade mark portfolio audit
An audit of a company’s existing portfolio of trade mark registrations willalmost certainly reveal gaps in the protection, inaccuracies of details
recorded on the register and possibly vulnerable, unnecessary or redundant registrations. As organisations become larger, particularly where
growth has been by merger or acquisition, it is likely that these deficiencies
will be even more significant. Multi-brand and international organisations

164

BRAND PROTECTION

are also more likely to have large and complex portfolios, which increases
the likelihood of records being incomplete or containing inaccuracies.
The “clearing up” of such a portfolio should not be seen merely as anadministrative problem but also as an essential process to ensure thatthe protection required to maintain the value of a brand is kept in place.
Such an audit will also identify opportunities for cost savings.
Passing off and unfair competition
In many jurisdictions, it is possible in certain circumstances to bring anaction to prevent the unauthorised use of a mark even in the absence ofa trade mark registration. The elements of such a cause of action varyfrom country to country, but common features include the necessity toestablish goodwill in the mark within the country and the likelihood ofconfusion arising from the defendant’s activities. Such “passing off”, as
it is called in the UK, allows the owner of goodwill in a mark to prevent
another party from benefiting from or damaging that goodwill throughmisrepresenting that its business or goods are in some relevant commercial way connected.
As Lord Halsbury stated the principle in the case of Reddaway vsBanham (1896), “nobody has any right to represent his goods as the
goods of somebody else”.
Bringing proceedings for passing off can be expensive as it is usuallynecessary to establish not only that goodwill exists but also that there
has been a relevant misrepresentation that is likely to cause confusion
and lead to damage. It is not uncommon for survey evidence to have tobe obtained to help substantiate such a charge.

Copyright
The law of copyright is designed to protect original works (the most relevant to branding being artistic works and, in respect of sonic branding,musical works) from copying. Copyright arises automatically upon creation of the work and, with certain exceptions, copyright will initiallybelong to the creator of that work. The main exception is a work createdby an employee in the course of his or her employment, in which casethe copyright is normally vested in the employer.
There is no requirement to register copyright, although in the UnitedStates and some other countries it is possible to register it, which isimportant from an evidentiary viewpoint should there be any dispute
about ownership of a copyright.
The obvious relevance of copyright to branding is where an original

165

BRANDS AND BRANDING

logo or get-up has been created specifically for a brand. The required
level of “artistic” merit for copyright to exist is low, and the principal
factor in establishing copyright in a work is that of originality.
The rights conferred by copyright are more limited than registeredtrade mark rights to the extent, as suggested by the term, that copyrightprovides the owner with the right to prevent copying of the work. If thealleged infringing work has been created quite independently, there will
be no grounds for a breach of copyright action. However, unlike trade
mark rights, a copyright in an artistic or musical work is not specific toany goods or services to which it is applied but extends to any copying,subject to certain defences.
Unlike registered trade mark rights, which, subject to certain conditions being met, can be renewed in perpetuity, copyright in an artistic ormusical work is of a defined and limited duration, usually the life of theauthor plus a further 70 years. Where an artistic work has been appliedcommercially, this period may be reduced further.
Copyright should not be seen as a substitute for trade mark registration, but it can provide a useful additional basis for attacking unauthorised use of visual marks and sound marks. Where the “work” has beencreated by someone who is not an employee of the company, such as
an independent design contractor, it is important to secure an assignment of the copyright. This requirement should be spelt out in the contract with the design contractor.

Registered designs
As an intellectual property right, design rights have been consideredsomething of a poor cousin to the other rights discussed above. However, recent changes in the legislation governing registered designs
within the eu have raised their profile and their potential significance inthe area of branding. Following the implementation of the eu’s Design
Harmonisation Directive and the introduction of a new European Registered Community Design right, the scope of what can be registered as adesign has been extended significantly. It now includes such things aslogos, get-up and packaging, which traditionally would have been protected through trade marks or copyright.
As with copyright, registered designs do not limit the scope of protection to specific goods, and the registration process is reasonably
cheap and quick. The rights conferred by registration are also not
restricted to the prevention of copying. However, the period of protection for registered designs is limited to an initial period of five years,

166

BRAND PROTECTION

which can be renewed for subsequent five-year periods up to a total of
25 years.

Domain names and the internet
Although undoubtedly a valuable commercial asset, the ownership of adomain name does not of itself give any rights in the name (other than
the fact that it will prevent a third party from obtaining the identicaldomain name). For example, the ability of Amazon.com to prevent third
parties from using “Amazon” or any confusingly similar name foronline retailing does not arise from its ownership of the top-leveldomain www.Amazon.com. It will be dependent upon its having
secured appropriate trade mark registrations and goodwill in the
Amazon name as a result of extensive use and promotional activities
within the countries where protection is desired.
The internet has had a significant impact on trade mark legal practiceas a result of the dichotomy between the territorial nature of trade markprotection and the unconstrained geographical boundaries of the internet. This has raised some interesting issues in terms of the location of
the “use” of a mark within infringement proceedings. In countries
where the question of use has been considered by the courts, there
seems to be a degree of conformity in treating the internet merely as a
medium for communication. This requires an analysis of the facts ofeach case to be considered to determine where use of the mark has actually taken place (notwithstanding that any website can be accessedfrom anywhere in the world).
There are other questions relating to trade mark law arising from theuse of marks on the internet. For example, is it possible to infringe a
trade mark registration where the alleged infringement is in the form ofa meta-tag which can be picked up by a search engine but is not visible
to potential customers? Courts in several jurisdictions have held thatsuch use can constitute an infringement.
It has become clear that the ownership of relevant trade mark registrations has played a significant role in allowing the proprietors of suchregistrations to secure the removal or transfer of relevant domain names
incorporating the registered mark through procedures operated bydomain-name registries such as icann and Nominet.
Conclusion
So what does the future hold for brand protection? From a trading perspective, the world is shrinking and brand owners are increasingly

167

BRANDS AND BRANDING

having to consider protecting their brands beyond their traditional geographic boundaries. Careful thought needs to be given to the appropriate nature and extent of protection sought.
Starting from the viewpoint that a brand is worth protecting, thisexercise should not merely be treated as an administrative inconvenience. A company’s legal advisers on brand protection should be
actively involved in devising and implementing a strategy for securing,
maintaining and enforcing appropriate intellectual property rights in a
cost-effective manner. The protection secured should be reviewed on aregular basis to ensure that it retains its relevance to the business as it
develops. Too much effort is expended in creating and developing abrand to risk jeopardising the value created through failure to secureadequate legal protection.
The following are some of the questions that should be addressed:

 What are the identifiable distinctive features of the brand?
 For what range of goods or services is brand protection required?
 In which countries does the brand have or is likely to have acommercial presence?

 Have appropriate trade mark registrations been secured?
 Has ownership of copyright been established in any artistic ormusical work that underpins any element of the brand?

 If outside contractors are being used to create a mark, have theyagreed in writing to assign any rights in it?

 Are the identified features of the brand covered by a watching
service?

 Is there a mechanism in place to report instances of unauthoriseduse or misuse of the brand?

 Is there a mechanism in place for the central collection ofevidence to establish use, goodwill and so on?

 How are renewals of registered rights dealt with?
 Has an audit of the portfolio of intellectual rights been conducted
recently?

168

3
THE FUTURE FOR BRANDS

This page intentionally left blank11 Globalisation and brands
Sameena Ahmad

lobalisation has become a dirty word. Although the benefits ofopen markets, free trade and internationalisation are all around us,
most people – in the West, at least – believe that globalisation is to blame
for the inequalities they observe in developing countries and the loss ofjobs they see at home. This has put brands, as the public face of companies in the dock – as easy scapegoats for the worst excesses of global
capitalism. The arguments made by critics of globalisation and capitalism against brands and big business have moved off the streets of Seattle and Genoa and into the political and social mainstream. Brands andtheir creators are accused of manipulating our desires, exploiting ourchildren, spoiling the landscape, using their financial and political clout
to control us, homogenising our culture and taking advantage of theworld’s poorest to make the things we crave.1 It has become so fashionable to decry brands that even those who promote labels for a living are
eager to join in the assault. European marketing bosses at luxury icons
Gucci, De Beers diamonds and Dunhill all confess to being worried that“branding has gone too far”.2
That this argument has become so widely accepted makes it dangerous – all the more so because the guardians of brands, mostly large
multinational corporations, have made such a poor fist of defending
their case.

G

The case for brands
Although in the West we increasingly bemoan consumerism,3 brands
are anything but superficial. They are an important indicator of economic health. At its most basic, a brand is a way for a product or service
to distinguish itself from another. Like a string of would-be suitors,
brands compete for our attention. To win it, they must offer us something better than what went before: a superior product, a lower price orsome intangible attraction such as exclusivity. Either way, we as consumers stand to gain from higher quality, lower prices and productinnovation. The more brands there are and the more ferociously they
compete for our hearts and wallets, the more of those benefits we will

171

BRANDS AND BRANDING

garner. This competition leads to better, cheaper and cleverer things,
and helps stimulate economic growth. Having lots of brands aroundtells us that the economies we live in are competitive and open. And
as studies from institutions including the World Bank4 and the Fraser
Institute5 show, economic openness is one of the best indicators of
future prosperity.
This is important, because critics of brands like to claim that big
brands stifle competition and reduce choice. To see how wrong thatargument is we only have to look at the former Soviet Union. In communist Russia, brands did not need to exist because there was no competition. Everything was supplied by state-owned companies at set
prices. Since there was no incentive for suppliers to improve quality or
innovate, the result was economic stagnation and falling living standards. Compare this with Wal-Mart stores and Starbucks. The discountstore giant6 and coffee chain are frequently used to point to everythingthat seems wrong with big business: the relentless spread of ugly facias,
boring sameness and standardisation, reduced choice, the destruction ofsmall towns and small competitors in America and the exploitation of
suppliers.
In reality, Starbucks can be said to have revived a dying industry, notdestroyed a healthy existing one. In America, Starbucks has helped
reverse a decline in coffee consumption outside the home, doubling
consumption since the mid-1980s. The group’s focus on quality and service has forced local operators to match or beat it to stay in business.
The result is that independent coffee shops are both proliferating andthriving. Nationwide independents accounted for half of the industry’s
growth between 1996 and 2001 when, according to research publishedin January 2002 by Mintel Consumer Intelligence, the number of coffee
houses in America doubled to 13,300, including Starbucks. Most of thelarge independents have survived in the past decade, and being near to
Starbucks actually helps. Tully’s Coffee Corp, a Seattle chain, says it
deliberately opens outlets near to a Starbucks to benefit from theincreased traffic. Starbucks, admit rivals, educates and expands themarket. It also scares many chains into improving their service and quality: Kansas City’s Broadway Cafe banned smoking and began roasting
its own beans when Starbucks opened next door. Similarly, the arrivalof additional Starbucks shops in Long Beach, California, prompted thefive-store “It’s a Grind” chain to spend thousands on cosmetic improvements as well as staff training, customer service and quality control.
Sales have been rising by 8% to 15% since Starbucks arrived in 2003.7

172

GLOBALISATION AND BRANDS

Wal-Mart has had an even more profound impact on the American
economy. A report by McKinsey, a management consultancy, in 20018
found that better management at the retail giant probably played abigger role in America’s productivity miracle of the late 1990s than thehuge surge in investment in information technology. The report foundthat almost one-quarter of the productivity growth – from 1.4% a year
between 1972 and 1995 to 2.5% between 1995 and 2000 – came fromthe retail sector and most of that was due to huge gains at Wal-Mart,
whose emphasis on low prices and big stores increased its efficiency
and sales and forced other companies to follow its lead. Wal-Mart has
not only increased productivity, but also boosted ordinary people’s
spending power by saving them money. In his autobiography, Sam
Walton, its founder, calculated that by operating efficiently, between
1982 and 1992 alone the company had saved its customers a “very conservative” $13 billion, or 10% of sales, over the decade. “Wal-Mart has
been a powerful force for improving the standard of living in ourmostly rural trade areas, and our customers recognise it,” he wrote.9
Wal-Mart’s “productivity miracle” can be partly credited to the fact
that, like Starbucks, its presence forced rivals to raise their game.
Walton devoted a chapter in his book to describing how companies
could compete: not by trying to beat it (Wal-Mart) on price (where theworld’s biggest retailer has a clear advantage), but by offering things it
could not, such as specialist product know-how or a cosy store ambience. It is a lesson that Toys ‘R Us, for one, has taken on board. After
its decision to copy Wal-Mart’s cheap prices and big box format
proved disastrous, the company is now finding new ways to distinguish itself.10

Who really holds the power?
The idea that big, established brands are all-powerful is simply
wrong. As the troubles of McDonald’s, Coca-Cola or Marks & Spencer
show, being big often leads to complacency and the inability torespond nimbly to change. These companies suffered from the complacency of being dominant, from failing to respond quickly to newcompetition and ultimately to the changing tastes of their customers.
At all three the reason was arrogance at the top. For years McDonald’s
failed to react to a proliferation of stylish “fast casual” chains thatwere serving better quality food in nicer surroundings and eating into
its market share. McDonald’s share price and profits became as soggy
as its burgers. Only after Jack Greenberg, then its chief executive,

173

BRANDS AND BRANDING

stepped down in December 2002 did the world’s biggest restaurant company fight back by improving service, sprucing up its menu and making
sure that basic things like toilets and floors in its outlets were clean.
Coca-Cola suffered similarly from complacency – failing to react withproper concern to a poisoning scare in Belgium – which cost its boss
Doug Ivestor his job. And Marks & Spencer also basked for too long in
its past successes, and did not see that its once loyal customers weredeserting it for more stylish and cheaper chains.
In truth, what determines the power of a company is not its size,
but the presence of competition. In the 1950s the three biggest companies in the media and automotive markets in America were muchsmaller in absolute size than they are today. However, they had considerably more power since competition was more or less fixed andthey controlled some 90% of their markets. Today, companies relax attheir peril. Competition can come from anywhere. Who would havethought that banks would have to consider supermarket chains asrivals? Yet Britain’s Tesco and Japan’s Seven-Eleven are competingwith them in financial services. Or that a quintessentially British
retailer like Marks & Spencer would have to compete with foreign
clothing chains like Zara (Spanish), The Gap (American), Uniqlo(Japanese) and Hennes (Swedish).
Banks and airlines are still monopolies in many ways – banks
because it is a hassle to move money around and airlines because theirroutes are limited. But even these sectors are being forced to improve as
start-ups come in and offer cheaper prices and better service. Britain’sFirst Direct telephone bank (part of hsbc) raised everyone’s expectations about how good a bank can be if it tries. And the low-cost carrier
jetBlue has become one of the few profitable airlines in America
because it is getting the basics right – like treating passengers withrespect and adding little comforts like leather seats.11
The truth is that brands don’t control anyone – and consumers control everything. Brands are the ultimate guarantee, making companies
accountable. In the West, if our Gap jeans fray or our Mercedes car
breaks down, we know exactly where to go to complain. We may not
get a perfect response, which may lead us to shop elsewhere nexttime, but if we are regular customers the best brands will fall overthemselves to put the problem right. In the unbranded Soviet Union,customers had no recourse if something went wrong. Indeed, the quality of goods and services fell so much as a result that in the 1950s,
Soviet planners in central office decided to artificially introduce brands

174

GLOBALISATION AND BRANDS

on some goods to make their producers more accountable and force
them to improve.
That companies are more powerful than governments is simply not
the case. The financial resources of most companies are tiny comparedwith the gdp of most countries. Governments have the power to tax,
imprison and change laws. Moreover, while companies use their size
and importance to lobby governments, so do other groups like unions
and non-governmental organisations (ngos) and consumer groups.
And financial resources are only one source of influence; media pressure and votes count too. Anyone worried about drug companies influencing academic research, or Coca-Cola influencing the curriculum ofschools, should also note how effective America’s huge steel and textile
unions have been at persuading politicians to protect their domestic
markets from cheap imports and the power of ngos like Greenpeace
and Oxfam (both well-funded brands; Oxfam even advertises in
Vogue), whose political and media lobbying denied genetically modified maize to millions of starving people in Zaire. Lobbying is a sign ofa healthy democracy, and in a healthy democracy, commercial interests will always be weighed against others.

Goodness and guilt
A more fundamental misconception is that companies need to be
moral entities in order to do good. The fact is that companies are neither good nor evil. They are simply structures designed to look after
other people’s money: that of their owners or shareholders – andthrough our mutual funds and pension plans we are all shareholders.
It is exactly by looking after this money, by trying to grow their profits, that companies are able to use those profits to invest, create jobs
and generate more growth. It is a good thing not a bad thing thatcompanies put profits first. By giving them the freedom to focus on
their long-term financial health, society can secure a long-term sourceof jobs, investments and tax revenue. That is the most exciting aspectof the free-market system. When firms, acting within the law andwith a view to their reputation, pursue profits, the result is toadvance social good, almost by accident. At this point, critics will cite
the recent glut of corporate scandals and say that most businesses donot, in fact, act within the law. It is a naive argument. As non-moral
entities, some companies will of course be tempted to break the law
to boost their stock prices and profits, but they are a minority. And
free markets governed by democratically elected politicians and175

BRANDS AND BRANDING

underpinned by carefully crafted, relevant corporate regulation are thebest methods for swiftly rooting out bad behaviour and punishing it.
That critics of brands, of companies, of free trade and even of capitalism have lost sight of these truths reflects a western middle classincreasingly ill at ease with its own success. People in developed countries are mostly long-lived, leisured and comfortable. They also are
inclined to romanticise the past and take relatively recent innovations
like computers, cell phones and cancer drugs for granted. Rather thantrying to understand the complicated and exciting reasons for our success – free trade and globalisation – we in the West will claim that world
has got worse and that materialism has made us less caring. Yet there isno evidence for this. In fact concern – for people and the environment –is a feature of economically well-off societies. People who have enoughfood in their mouths can afford to think about others, to give their timeto good causes or their money to charities.
Leisure to think about happiness is a by-product of our progress,
impossible without our timesaving washing machines, microwaves,newspapers and convenience food. Our wealth pays for access to theinternet and television channels, which remind us daily of how easy
our lives are compared with those of people in the developing world.
But as our grandparents could tell us, it would be hard to argue thatsaving up a year’s wages to buy a bicycle, living without heating andexpecting early illness and death were better.
Still, an increasing number of westerners feel some need to protect
people in the developing world from becoming shallow consumerists,
obsessed by brands, fascinated by American culture, mesmerised by
television. In doing so, however, they are attempting to deny the vast
majority of humanity the opportunities and material progress that will
eventually allow them the time, as we have, to cultivate a guilty conscience. But meanwhile poor labourers in Africa and the aspiring middle
classes in India and China have no time for such scruples: the Chinese
open almost all their direct mail, an Indonesian farmer may find thetaste of a Chicken McNugget exotic, and upwardly mobile Indians are
hungry to acquire western brands. Westerners may be sated, but thosestill climbing the economic ladder want exactly the same sort of consumer culture that we already possess.

What globalisation can do for you
In fighting globalisation, its high-minded critics are opposing the verymechanism that can deliver greater wealth to the less-developed parts

176

GLOBALISATION AND BRANDS

of the globe. Globalisation is a stepping-stone to prosperity. Countries
that open themselves up to trading their products and ideas freely withother countries raise everyone’s standard of living. Rich countries areforced to shift out of manufacturing and build new, more productive,
more advanced industries to make room for countries that can makegoods more cheaply. Poor countries get a leg up out of poverty, moving
their economies from farming to manufacturing and eventually services. It happened to Hong Kong. It is happening across Asia from China
and Vietnam to Malaysia and South Korea. Developing countries that
open their markets to foreign investment are seeing their income perhead grow fast; at some 5%, even faster than western countries that are
growing at some 2%. Those countries that are not globalising (mainly
African and Arab countries) are slowing down.12 Their economic
malaise makes them dissatisfied and unstable.
One of the most effective tools for promoting globalisation is foreign direct investment (fdi). When established western multinationals
move into the developing world, it is often assumed that they exploit
workers who toil in sweatshop conditions. Yet exploitation happens
far more at faceless, unbranded local companies, which can abuse
their workers and pay derisory wages without fear of being noticed.
Multinationals have their brands, their reputations and their shareprices to worry about. That is exactly why they make such ready targets for activists. Yet it is those very multinationals that set the highest
standards in pay, benefits and conditions. By attacking them, western
activists are threatening some of the best jobs that foreign workers arelikely to get.
Nike, a sports shoemaker that has been criticised for its operationsin the developing world, is a case in point. A survey from the University of Minnesota, published in a World Bank report in December
2000, found that workers in Vietnam employed in foreign-owned
companies were less likely to be living below the poverty line. The figures showed that although 37.4% of the population as a whole lived
below the official poverty line, the percentage was just 8.4% for thoseworking for wholly owned foreign companies and 21.4% for thoseworking for companies managed as a joint venture (partly foreign,
partly local). An Australian survey found that Nike factories in Indonesia paid its women factory workers 40% higher wages than local companies. Another report by the University of Michigan found that Nike
paid above-average wages in its foreign-owned export factories inVietnam (above five times the legal minimum wage) and Indonesia

177

BRANDS AND BRANDING(about three times the legal minimum). In Vietnam, Nike is the country’s second-largest exporter and has helped cut poverty in half in thepast ten years. Since Nike set up a third-party-run factory in Samyang,near Ho Chi Minh City, employing 5,200 people in 1995, it has helped
to create an economic hot spot, which has spread beyond its own factory as other local companies have been forced to compete for workers. Samyang currently pays three times the wages paid bystate-owned factories and twice the local wage. Four times more residents in the area have telephones than when Nike moved in; two in
three have motorbikes (compared with one in three before); 8% areearning less than $10 a month compared with 20% before; and 75%
own televisions compared with 30% in 1995.13
In the Philippines, locals working at Nestlé’s milk factory in Cabayo
near Manila need no encouragement to explain how desirable jobs at
multinationals are. Workers there are paid an average of $27 a daycompared with the $8 legal minimum wage. Three-quarters are eligible for healthcare and receive benefits of food and housing loans.
Juan Santos, aged 64, head of Nestlé Philippines, is proud that his
daughters now live in America, possible because he was given an
overseas posting with Nestlé. Patricio Garcia, manager of the Cabayo
factory, has used his savings to put his children through medical
school, something he says he could not have afforded to do had heworked in a local factory. He points to the 20,000 applications that
he receives for every new job at the factory: “People know that weare fortunate and that Nestlé is an excellent employer.” And Jovy
Colcol, who at 28 has worked for Nestlé since she left school, is able
to use her own money to pay for a new house, helped by a loan
from Nestlé, rather than relying on her unemployed husband to support her and their two children. For her, Nestlé has meant economic
independence.14

Think about intentions
Certainly big international companies do not always behave well inemerging markets, particularly if they are operating in countries
where corrupt politicians encourage and protect bad behaviour. However, as Daniel Litvin’s account of multinationals in developing markets describes,15 throughout history western observers, susceptible tomanipulation by local activists, have exaggerated or misjudged therole that western corporations play in the problems of developing
countries, with serious consequences for how those problems are

178

GLOBALISATION AND BRANDS

subsequently dealt with. Shell in Nigeria is a case in point. The corruption endemic in Nigerian politics did far more damage to the livesof its people than Shell. Indeed, the government resisted attempts by
Shell to share the profits of its oil exploration and now relies on thecompany, stung badly by criticism from the West of its role in Nigeria, to fund schools and hospitals: in other words, to do its job. As Mr
Litvin makes clear, companies are more often just clumsy and incompetent when they enter a new market, rather than setting out withany intent to exploit. Their mistakes at least result in them trying tochange, which cannot be said for most of the world’s nastiest political regimes.
The case of Shell also illustrates the dangers of grafting western
moral values on to countries at a different stage of economic development. The $40m a year that the oil group now spends on good causes in
Nigeria might possibly have led to greater prosperity if Shell had been
allowed to invest it in its core business, creating permanent jobs throughlong-term investment. Similarly, in Pakistan, the western campaign thaturged consumers to boycott Nike products in the 1980s, because thesports firm was using children to stitch footballs, cost thousands of children jobs that their families depended on, forced them into more dangerous, more poorly paid employment and did nothing to change thefact that over 200m children in Pakistan work and probably will until
the country becomes rich enough to afford to develop a moral conscience about the practice. The campaign had another unintended side
effect: it cost many women their economic independence since the boycotts forced Nike to take the stitching work out of homes, where women
could work, and into dedicated factories to which they were unable totravel because of strict societal rules.16 Although branded multinationals
are obviously easier targets than local organisations or governments,
western activists do not always understand that their campaigns canhave unintended consequences that may hurt the very poor people they
are trying to help.

Time for a new approach
Multinationals, however, have only themselves to blame for becoming
so vulnerable. Brands and companies would not be under such fierce
attack if they had not lost their connection with mainstream consumers. Fierce competition and increasingly fragmented media make it
hard for brands to be heard. In the West, people are so saturated withbrands that it is hard for them to see they have any value at all.

179

BRANDS AND BRANDING

Westerners are exposed to over 3,000 messages a day: pop-up advertisements on computers, increasingly intrusive e-mail spam, billboards, television commercials, product placement in films. We takemarketing classes in universities: around one-quarter of students in
America learn about the art of marketing that way. We know theenemy and understand how big companies try to sell to us. We haveaccess to books, which claim to expose how the marketing machines
at companies like McDonald’s17 or Wal-Mart18 manipulate us. Thesedays, many of us find marketing a yawn. Only ten years ago, when
there were fewer advertisements and fewer television channels, marketing campaigns could easily become embedded in our popular culture, remembered as fondly as pop songs or television hit shows of thetime: Coca-Cola’s “I’d like to teach the world to sing”, for example.
Today, advertisements aimed at western consumers have lost thatstatus. We are less susceptible to being manipulated by advertisements
than we used to be.
Yet the majority of marketers have been unable to respond quickly
enough to change. A lot of advertising is still based on old ways of defining markets – for example by pigeonholing target audiences into stereotyped categories. The reason is the innate conservatism in big marketing
departments and simply that human beings are complicated – it is hardto understand our desires and motivations especially with blunt tools
like focus groups or software that can only crudely predict what we’ll
buy next from the mess of data routinely collected on our shopping
habits. Meanwhile, while marketing remains a soft subject, financedirectors increasingly want hard proof that the money spent is worthwhile. Planning, advertising and commissioning market research is nolonger enough. Marketing must be linked closely with business strategy
and able to prove its contribution to shareholder value.

The need for honest answers
The marketing profession is in crisis. Books abound with gloomy titles
like The End of Advertising as We Know It19 and Big Brands, Big Trouble.20
Most big branded consumer-goods companies, from Gillette, McDonald’s and Disney in America to Unilever and Nestlé in Europe and Panasonic in Japan, are facing slowing growth, declining market share or
worse. Brands are getting weaker not stronger. As well as being underattack from the anti-corporate brigade, a lack of global economic growth
has put pressure on corporate profits and share prices. Marketers areunder pressure to produce better results with fewer resources, to “do180

GLOBALISATION AND BRANDS

more with less”. They have to demonstrate the true value of marketing
to chief executives and the board or face further cuts. Company managements, meanwhile, are questioning the effectiveness of advertisingand are busy streamlining marketing departments; the purge of layers ofmarketing management at Procter & Gamble in 2003 will surely not be
the last such restructuring.
Many marketers are reacting to such pressures by focusing not on thenuts and bolts of building brands and margins with product improvements, high prices and ensuring their customer base remains loyal, but
on desperately trying to hang on to the customers they have, tempting
them with price cuts, free offers and loyalty programmes. Chasing
short-term sales at the expense of brand building is a dangerous andshort-sighted strategy.
In order to regain appeal for their brands, marketers will have tolearn to adopt new tactics that are only gradually catching on, such as
guerrilla marketing (one-off events designed to be startling enough thatpeople talk about them), sponsoring events and product placement inhit shows like Sex in the City. bmw’s series of series of mini-movies
from famous directors and starring bmw cars are one example of how
to do things differently. Companies will also have to face up to the factthat they need to overhaul their recruiting procedures, incentive programmes and career structures to improve the quality of people thatchoose marketing as a career.
At the same time, companies should be much more forthright aboutboth the weaknesses and the strengths of their brands. An example is
McDonald’s, which currently denies any link between its fast food andobesity. The company is acting defensively, fighting in the law courts
rather than the court of public opinion, not unlike the tobacco companies a few years ago. Would it not be wiser, perhaps, for McDonald’s toadmit that eating too many of its burgers and fries is unhealthy and thatobesity is a real problem? The fast-food giant is introducing salads andputting the number of calories on its products in response to criticism.
But it is doing little to engage openly in the debate or to persuade thepublic that these issues are not ones for the court but for parents.
Similarly, when it comes to facing their critics, companies should berobust enough to stress the enormous benefits of their branded products, in terms of lower prices, higher quality and innovation in theWest and jobs and wealth created in the developing world. Rather
than being the Achilles heel of globalisation, brands have the potential
to become colourful, appealing motifs that could help the public

181

BRANDS AND BRANDING

understand the great benefits of globalisation and free trade. Brands
could be used to turn people on to concepts that at the moment turnthem off. Already a marketing consultant in San Francisco has composed an “American Brandstand” billboard of the most mentioned
brand names in the pop music charts. They may be anathema toactivists, but brands are becoming cool icons for musicians. For rap
artists, it may be just that words like Mercedes, Burberry and Gucci
lend themselves to interesting rhymes. But if consumers understandthat buying Nike shoes is one of the most effective ways to provide
people in Indonesia with a secure wage, wearing them should becomecool even for those who waved placards on the streets of Seattle. They
must relearn – and it is now the job of companies to help teach them– that brands are good for us.

Notes and references
1 Klein, N., No Logo: Taking Aim at the Brand Bullies, Picador, 1999.
2 Interviews with the author, February 2003.
3 Frank, R.H., Luxury Fever: Why Money Fails to Satisfy in an Era ofExcess, Free Press, 1999.
4 Dollar, D. and Kray, A., Trade, Growth, and Poverty, World Bank
Working Paper, June 2001.
5 Gwartney, J. and Lawson, R., Economic Freedom of the World: 2002
Annual Report, The Fraser Institute, June 2002.
6 Ortega, R., In Sam We Trust. The Untold Story of Sam Walton and
How Wal-Mart is Devouring America, Times Books, 1998.
7 Helliker, K. and Leung, S., “Despite Starbucks Jitters, Most
Coffeehouses thrive”, Wall Street Journal, September 24th 2002.
8 McKinsey Global Institute, U.S. Productivity Growth, 1995-2000,
October 2001.
9 Walton, S. with Huey, J., Sam Walton. Made in America. My Story,
Doubleday, 1992.
10 The Economist Annual Marketing Roundtable, “From brand champion
to corporate star – recognising the value of marketing”, March 2003.
11 The Economist Annual Marketing Roundtable, March 2003.
12 Dollar, D. and Collier, P., Globalization, Growth and Poverty: Building
an Inclusive World Economy, World Bank Policy Research Report,
December 2001.
13 Legrain, P., Open World: The Truth About Globalisation, Abacus,
2002.
14 Interviews with the author, September 2002.

182

GLOBALISATION AND BRANDS

15 Litvin, D., Empires of Profit. Commerce, Conquest and Corporate

Responsibility, Texere, 2003.
16 Schlosser, E., Fast Food Nation: The Dark Side of the All-American

Meal, HarperCollins, 2002.
17 Litvin, Empires of Profit.
18 Ortega, In Sam We Trust.
19 Zyman, S., The End of Advertising as We Know It, John Wiley & Sons,

2002.
20 Trout, J., Big Brands, Big Trouble. Lessons Learned the Hard Way, John

Wiley & Sons, 2001.

183

This page intentionally left blank12 An alternative perspective on brands:
markets and morals
Deborah Doaneaomi Klein’s bestselling anti-brand book No Logo, which came out
just after the protests against the World Trade Organisation in Seattle, was anathema to the business world and a call to arms for anti-globalisation protestors the world over. No Logo put the case for people tolook more closely at both the good and bad sides of global corporations
and to acknowledge the legitimate role of “activists” in seeking to keep
global corporate power up to the socially responsible mark. So influential was it that The Economist felt the need for rebuttal and ran a “ProLogo” special that it featured on the cover.
The anti-brand argument goes like this: brands are bullies; they commodify cultures and they are unaccountable. The pro-brand argument,
however, holds that brands are accountable and transparent, and thatthey provide more value and economic benefits for people than everbefore. The reality is probably somewhere in between.
In the world of branding things move fast and so, too, has the debate
about brands in relation to globalisation. The main issue is still how corporations, both big and small, behave in a global marketplace. But thequestion is whether or not this behaviour is a cause or a consequence of
the “branding” phenomenon. Here it is necessary to look at the conductof markets themselves, which generally dictate the behaviour of thebrand.
Nonetheless, corporate leaders and others have turned a blind eye tothe reality of the marketplace, failing to acknowledge the limitations ofquestionable corporate social responsibility programmes. In an optimistic world, though, businesses will finally see not just that theiractions are causing harm to the environment, but also that short-sighted
approaches to our social future will eventually fail us all.

N

No Logo or Pro Logo?
In the sparring between the No Logo and Pro Logo camps, who is right?
The awareness of brands has held them up to more scrutiny than ever185

BRANDS AND BRANDING

before. It is difficult for global corporations like Gap, Nike, Coca-Cola or
McDonald’s to evade criticism, even when they are doing more thantheir unbranded counterparts. Consumers can probably put more trust,for example, in a Nike shoe than a non-branded shoe from their local
store, not just because of better quality, but also because of the knowledge that Nike has to ensure higher standards of working conditions for
those who make its shoes because it is under the eye of the global
watchdog.
At the same time, signs of the brand bully are everywhere. Big brands
threaten local competition and buy up successful smaller brands. In
places like India or South Africa, if you want coffee, you generally findthat you can only get a “Nescafé”.
A brand’s purchasing power extends its ability to gain access on the
shelves, squeezing out other, newer competition too. Supermarkets provide better shelf space for well-known brands, ensuring they have abetter chance of being seen and bought by consumers. At the same time,high streets around the world are looking increasingly familiar, making
it difficult to distinguish between a street in Munich, Tokyo or Toronto.
Brands also have a tendency to dilute cultural diversity. Branding
demands immediate knowledge and recognition, ideally on a global
basis. You can ensure that if you walk into a Gap in North America,
Japan or Germany you will be getting the same thing. Michelle Lee, an
American fashion writer, laments the “McFashion” era that the battle forthe brand has created. She argues that, while the strengths of the fastfood approach to clothing give us affordability and reliability of style,“the consistency has bred a scary level of homogeneity”. In the UnitedStates, 75% of men own a pair of Dockers Khakis, and 80% of Americans
own at least one pair of Levi’s jeans.1 As styles from other countries
become fashionable, such as the Chinese chemise or Indian-style
dresses, they are also at risk of being devalued through the market. The
originality that gives rise to their value as fashion items will fade andthe styles will become little more than another commodity to buy, sell
and replicate, eventually to their cultural detriment.
Is the brand accountable or not? Many think not, especially when it
comes to social or environmental concerns. Over the past couple ofdecades brands have worked in chameleon-like ways. When they arechallenged for poor ethical behaviour, they change names: so Altria
emerged from Philip Morris, many argue as a misguided attempt toshield its non-tobacco business from the “drag” brought down by thenegative reputation of tobacco and impending law claims. The Ameri-186

AN ALTERNATIVE PERSPECTIVE ON BRANDS: MARKETS AND MORALS

can Journal of Public Health charged that the name change was the culmination of a long-term effort by the tobacco giant to manipulate consumers and policymakers.2 In the last few years, victims of the Bhopal
disaster in India have found it difficult to make claims against Union
Carbide over the incident that took place in 1986 but has yet to beresolved. In 2001, Union Carbide was bought by Dow Chemical, which
as recently as May 2003 denied any responsibility for the disaster.3
When you are buying a brand, whose brand are you really buying?
Few consumers know that Kraft Foods is owned by a tobacco company,or that Ben & Jerry’s ice cream is now part of Unilever. It makes it difficult for people to choose brands for their ethical stance when the brands
themselves have been subsumed by large multinationals. Part of bp’s
strategy for demonstrating its green credentials has been to buy up existing producers of solar energy. It now owns about 17% of the global solar
market without having had to add any new production in solar.4 Social
investment groups have argued that the problem with this approach isthat the companies continue to have their main activity in a wholly
unsustainable business, such as oil. In the case of bp, investment in solar
is less than 0.1% of the business.
Brands may have the power and the resources to ensure that economic might wins over social good. But many would argue that in themain they do not, citing the rise of the corporate social responsibility
movement over the last few years.

Social responsibility and brand behaviour
Corporate social responsibility (also known as csr) has been the business-led response to the No Logo critique. Post-Seattle, a csr policy has
become de rigueur for top companies, which make statements on everything from environmental performance to labour standards. Given thecsr hype, it would be easy to believe that things have moved much further along and that companies are taking the issue of their responsibility
rather more seriously than a few years ago.
The corporate conference circuit is now dotted with monthly gatherings on “social responsibility” and “reputation management”. Big
accountancy and pr firms now have whole units dedicated to corporatesocial responsibility, with firms like Burson-Marsteller having co-opted
the activists themselves. Lord Melchett, previously head of Greenpeacein the UK, has been on their roster of top-level consultants.
The mantra of the csr world is that business can “do well” and “dogood”: the proverbial win-win. Pharmaceuticals companies such as

187

BRANDS AND BRANDING

GlaxoSmithKIine (gsk) point to their programmes for improved accessto medicines in developing countries and partnerships with non-governmental organisations (ngos) such as Médecins sans Frontières, andeven British American Tobacco is aiming to be the world’s most socially
responsible “tobacco company”.
But is it really all so rosy? The “face” of a company’s csr programme
is usually demonstrated through its corporate social and environmental
report. From a few deep greens such as The Body Shop or Traidcraft, to“ethically challenged” companies such as Shell just a few years ago,companies as wide ranging as Cadbury’s, Unilever and British
Aerospace have prepared such a report. These are particularly popularin the UK. Just two years ago, fewer than 25 UK companies reported on
their social performance alongside their annual report. Econtext, a consultancy group, now finds that 50% of ftse 250 companies are reporting5 on their social and environmental impacts on a voluntary basis, andSustainAbility, another consultancy, has found 234 companies reporting
globally.6
However, the quantity of csr-type reports says little about the quality of what really goes on. csr, it seems, is now more about public relations than anything else. Repeated studies, including SustainAbility’s
Global Reporters Survey released in November 2002, confirm that there
is little meaningful social and environmental reporting by companies toindicate that they are grappling with the great issues of our time, fromclimate change to tackling poverty.
gsk’s drugs programme has come to fruition as the company has
finally had to face critical competition from generic manufacturers andthe threat of regulation by governments. Its temporary climb-down is adefensive move against losing critical intellectual property rights and toprotect its reputation. It is certainly not a result of the moral impetus oftackling aids or malaria in sub-Saharan Africa. And most people would
still argue that attempts such as gsk’s are still inadequate to deal withthe mammoth health challenges that developing countries face.
bp has had immense success with its social responsibility policies. Sir
John Browne, its chief executive, has effectively been the poster child of
the csr movement. But ngos are highly critical of bp’s attempts todemonstrate social responsibility. In 2001, when it tried to rebrand itself
as “beyond petroleum”, activists pointed out that it was not actually
moving away from hydrocarbon production. In the end, bp was forced
into an embarrassing climb-down.7 In the latest challenge by a consortium of ngos, bp has found itself at the front end of a challenge to the188AN ALTERNATIVE PERSPECTIVE ON BRANDS: MARKETS AND MORALS

oecd Guidelines on Multinational Enterprises over its work in Azerbaijan. The group, which includes Friends of the Earth, claims that bp andits partners sought or accepted exemptions related to current social,labour, tax and environmental laws, while exerting undue influence
over the government to free it of any future liabilities. bp’s approach to
managing its reputation has been effectively to ensure that it manages
risk, which means passing off risk to governments that rely heavily on
its foreign income.
Why are these the outcome of csr, rather than anything more substantial? Because csr is voluntary. Even codes of conduct, like the oecd
Guidelines for Multinational Enterprise, are unenforceable. csr managers have to ensure that the “business case” can be made to promote
investment in social causes, especially where there is no regulatory
requirement to do so. Other than through a few “eco-efficiency” arguments, which can see a pay-off over a shorter period of time, the case ismade for pitching sustainability programmes under the headline of“brand reputation”. Indeed, a recent issue of Brand Strategy magazine isdedicated to the subject of “branding success” and ways of communicating sustainability.8
This is the fundamental problem with csr. It should come as no surprise that many csr programmes are now staffed by people with marketing expertise, rather than those with an environmental background.
As a result, we find prescriptions that are more about image than anything deeper.
One of the biggest crimes in csr is cause-related marketing (crm),
which results in companies such as Cadbury’s providing sports-equipment vouchers in exchange for consuming enough chocolate. Suchsuperficial attempts to improve a company’s reputation and contributeto a social good make a mockery of good intentions. Childhood obesity
is now one of the leading causes of concern for health activists. McDonald’s, purveyor of the ultimate in childhood indulgence, is now beingsued because it is accused of making people fat.9

The myth of the ethical consumer
Corporate social responsibility is driven in part by the expectation that consumers
will ultimately reward those companies with a better social and environmental
record.
To some extent this is true. The 2002 Ethical Purchasing index conﬁrms that189

BRANDS AND BRANDING

businesses that have a social aim, such as Café Direct, will be duly rewarded. The Fair
Trade company is now the sixth-largest coffee brand in the UK, having grown at a
rate of almost 20% in 2002, capturing 8% of the coffee market. There are a few otherexamples of fast-growing deep green ethical businesses out there, but by and large,
these continue to capture less than 1% of their overall market share.10
But consumers, although conscious, are a fairly passive lot. The National
Consumer Council notes that consumers are often unwilling to make changes in theirhabits. A poll by MORI shows that although 83% of us intend to act ethically, only
18% do so (and only occasionally), while less than 5% could be considered “global
watchdogs”.11
In spite of the perceived increase in anti-globalisation activism and demands forgreener products, these trends appear to be worsening over time. The annual Roper
Green Gauge study in the United States found that Americans are less concerned
about the environment than they have been over the past ten years. The 2002 survey
found that although 23% of consumers bought products made with recycled goods,
this was 3% less than the year before; and almost half of consumers, 45%, thought it
was the responsibility of businesses, not consumers, to do more.12
Much of this comes back to people’s wallets. According to one American study,
consumers would gladly make the greener choice if the product did not cost more or
require a change in habits, if it could be purchased where they already shopped, andif it was at least as good as its competition.13 This is echoed in the UK, where theInstitute of Grocery Distributors found that consumers are more concerned withprice, taste and sell-by date than ethics.14
Although there appears to be scope to encourage consumers to be more activeand “ethical”, the evidence to date suggests that if we rely on them to deliver socialand environmental change, we will be waiting a very long time.

Misguided intentions
csr has ultimately failed to provide the answers to the No Logo critique.
Business cannot always “do well” and “do good”. What the mantra is
missing is the caveat to the phrase: business can “do well and do good …
up to a point”.
csr strategies are part of the microcosm of the failure of markets
themselves. They work only in so far as they help to protect the brand.
But there is a wide chasm between what is good for a brand and what
is good for society.
Fifty or 100 years ago, when many of the big multinationals
started, the aim was to provide an affordable product or service to190

AN ALTERNATIVE PERSPECTIVE ON BRANDS: MARKETS AND MORALS

people and make a reasonable profit at the same time. It is doubtfulthat the founders of any major multinationals ever set out on a pathaiming to subsume other cultures, cut down forests and exploit cheap
labour halfway around the world. But the role of a company has,over the past century, taken on a life of its own, where its primaryfunction is to return capital to the anonymous shareholder, not toserve the needs of society. In today’s capital markets, companies needto grow, to find new markets in which to trade and to keep theircosts down through anything from ensuring “affordable” labour toreducing tax liabilities.
When a company gives a “profits warning”, the markets downgrade
its share price. Consequently, investing in things like the environment orsocial causes, which promise longer-term and peripheral pay-offs rather
than immediate pay-offs to the bottom line, becomes a luxury, and they
are often placed on the sacrificial chopping block in a crisis. Littlewoods,
a high-street retailer, recently backed out of the UK’s ethical trading initiative, and the Dole Food Company in the United States slashed its
entire csr programme in 2001 as part of a cost-cutting exercise.
This is no different from how markets deliver value to shareholders
outside of the ethics regime, even if it means sacrificing other parts ofthe business in the process, as in the value-destroying mergers andacquisitions frenzy of the late 1990s. In the most grotesque examples ofmarket behaviour, the product itself becomes almost irrelevant. In thecase of the now infamous Enron, the company changed from a middlesized energy provider to a de facto Wall Street bank through its various
energy trading schemes.15 Its eventual collapse was the first in a series ofcorporate scandals that contributed to the worst economic downturn inover 30 years.
If there is a business case for brands to enshrine their value throughsocial goods, then this should be done through voluntary means. Business has always had to innovate and try different things and seek newsources of competitive advantage. But pretending that these businessintentions will always provide the best outcomes in the interests of thegreater public good is simply naive, especially when shareholders’ interests are part of the equation. Marjorie Kelly, publisher of the Americanbased Business Ethics Magazine, contends that our assumption thatvoluntary actions by progressive business people would transform capitalism was misguided. She writes in her book The Divine Right of Capital that “it is inaccurate to speak of stockholders as investors, for moretruthfully they are extractors”.

191

BRANDS AND BRANDING

There is a significant risk in business assuming the role of the socialwelfare provider through misguided csr programmes. In the UnitedStates, Cisco Systems “adopts” schools that have inadequate funding. In
parts of Africa, Unilever helps to distribute condoms through its distribution network to combat the aids crisis. Both are probably well-intentioned programmes to deal with immediate problems. Cisco needs an
educated workforce; and most companies operating in Africa are feelingthe impact of the aids crisis. But they represent a more worrying trend,
about which both activists and businesses should be concerned: theincreased blurring of the lines between public and private, and the abdication of state responsibility to uphold the public good.
Nike’s and others’ investment in labour-standards monitoring indeveloping-country factories is a laudable attempt to ensure at least that
their workers are protected and that their brand values are upheld. But,
as Daniel Litvin writes, the complexity of trying to monitor 700 factories
employing 500,000 people around the world is immense.16 It puts thebrand itself at risk, as activists continue to seek out poor working conditions, whether in suppliers’ factories or their suppliers’ factories. So
firms such as Nike are constantly on the defensive.
Nike can tackle labour standards, up to a point. But even with theconstant onslaught from protestors and continuous improvement, it
actually has limited power in the wider economy in developing countries that keeps wages low and, in some countries, means that a job in a
Nike factory can be more desirable than being a doctor or a teacher
because the wages are higher and workers’ rights are protected.
In this sense especially, csr is a false economy. Would it not bebetter to ensure that systems in these countries – laws, regulations andso on – are developed to strengthen institutions that protect a wider portion of the population? As Patrick Neyts, head of corporate responsibility in Europe at Levi-Strauss, notes, it is not unusual in a developing
country to find a well-known product being manufactured in a pristinesetting on one side of a wall in a factory, while on the other side people
continue to be subject to unsafe conditions, longer working hours andpoorer wages.
Business is, in part, to blame for contributing to the institutional
vacuum in the first place. In the United States, there is no longer a school
system that is adequately supported by the state because businesses,
increasingly, fail to pay their share of common taxes. Corporate income
taxes in the United States fell from 4.1% of gdp in 1960 to just 1.5% of
gdp in 2001.17 The oecd attributes this, in part, to countries wanting to192

AN ALTERNATIVE PERSPECTIVE ON BRANDS: MARKETS AND MORALS

reduce taxes in order to lure foreign investment or maintain inward
investment. But this is having perverse effects, limiting governments’ability to invest in common assets, such as the environment or education. Nowhere is the issue more pressing than in developing countries,
where states are already weak. The corporate sector, rather than looking
for tax exemptions, should be finding ways to ensure adequate support
for governments and the development of strong public services thatwould provide a healthy economic and social environment in which tooperate.
These issues go well beyond traditional brand protection and reputation management. They are issues which owners of brands themselves
should consider how best to respond to, if they want to protect their
domain. Indeed, multinationals have the power, but currently lack thecourage, to break ranks and call for another way forward.

Redefining brand value?
It is difficult to dispute the economic importance of brands. According toInterbrand, a brand consultancy, 70% of the average ftse company’svalue is based on “intangibles”. But this heavy weighting of the brandmakes many of us more vulnerable. As the values of companies on thestockmarket tumble, usually because of a lack of faith in the “brand”,
our savings and our pensions are at risk. In the latest economic downturn, even trusted brands like British Airways have lost their coveted
place on the ftse 100 index.
Right now, brand valuation methods such as Interbrand’s focus
solely on the economic use of the brand, with occasional considerationsof things like staff training included in the equation. At least a partial
way out of this quagmire is for us to make “brand value” far lessdependent on traditional economic intangibles and more dependent on
genuine measures of social and environmental performance.
Inroads are already being made in defining how to measure thesethings. The Global Reporting Initiative, an international multiparty
endeavour aimed at providing common indicators for reporting onsocial and environmental performance, is something that brand valuation experts should look at.18 In recent years, a number of organisations
have made efforts to measure “social capital”, but the methodologies fordoing so are not shared with the public, so it is almost impossible to tellwhat is being measured, let alone compare the approaches to arrive atcommon standards. Social capital, as a form of trust, should be able toincorporate measures of real commitment to communities, such as

193

BRANDS AND BRANDING

using local labour. There is an added business benefit to this. ShokoyaEleshin Construction, a fast-growing UK construction firm, reported thatwhen it used local labour its buildings were not vandalised in an urban
area traditionally experiencing high levels of crime.
There is a dual purpose in making the intangibles more tangible andbasing them on social and environmental outcomes. Measurement will
help policymakers ensure that companies pay for the real costs of theirsocial and environmental impact (internalising externalities, ineconomists’ terms). It will also help ensure that businesses do not makecompromises in business practice that favour financial outcomes rather
than non-financial ones, because all will eventually contribute to thebottom line.

A case for leadership
No corporate brand is produced with the specific intention of doing
harm. But corporate leaders often avoid looking at the wider complexityof the issue. As with csr, a business generally does what it can rather
than what it should within the confines of the market. This is where
corporate leaders need to confront the dilemma head-on. The No Logocrew is not calling for a mere tampering at the margins, a small increase
to a charity budget or a cause-related marketing attempt at improving
brand image. It is calling for a revolution in the way that business is
done.
Take, for example, companies that depend on commodities, such as
Nestlé and Cadbury’s. Although their work with the Biscuit, Cake,
Chocolate and Confectionery Alliance aiming to eliminate the use ofchild labour in cocoa plantations is crucial, they do not confront the fundamental issue of how their products perpetuate poverty in the firstplace. The vulnerability of people who are dependent on commodities
is not something that can be brushed aside. How can commodity markets be transformed so that fair trade is no longer needed? So that a
quality product is still available to consumers, but producing it does notkeep people in poverty unnecessarily? It is not just a matter of protecting the corporate brand and reputation through individual defensivemeans: it involves the entire system. All companies will be vulnerable tocriticism and consumer backlash until we recognise that fact.
In the oil sector, companies such as bp and Shell should make bigger
investments in renewable energy and stop using the facade of buying
up small solar producers to add to their green credentials; investing lessthan 2% of profits in renewables is just a drop in the ocean. Why aren’t

194

AN ALTERNATIVE PERSPECTIVE ON BRANDS: MARKETS AND MORALS

12.1
2.1

Mapping business impact: positive or negative?
Peace and stability

Economic stability

Democratic control andfair competition
Conflict andinsecurity
Social exclusion
Economic
and concentration
instabilityof power
Environmental
vulnerability
Poverty
DiseaseEnvironmental
sustainability,
ie biodiversity

Economic security

Healthy communities

Businesses traditionally consider the impact of social and environmental issues on reputation andfinancial outcomes for the business; but turning this equation around provides a different perspective
and potentially allows businesses to be far more proactive in defining future strategic directions.
Within its sphere of influence, can a business play a more proactive role in sustainable development?
Source: New Economics Foundation and EIRIS

these corporate leaders aiming to have 50% of the business in renewableenergy in ten or 15 years’ time? How can these companies lobby governments more effectively to ensure that tax incentives and other formsof policy intervention make such goals ultimately profitable? It is traditional for the oil industry to fight regulation, not to ask for it.
The question that society should be asking is this: what businesses
and institutions do we need to deliver sustainable development? Big
business and, by extension, big brands have been intent on responding
to the concerns of activists by trying to minimise their negative impact
on society and the environment and marketing these interventions as
having solved the world’s problems. However, by promoting csr as a“competitive advantage”, big business is effectively holding people toransom and inhibiting the bold changes that are really needed. csr
should have been about solving the big global problems without compromise, not about brand reputation management.
Ironically, at the moment, the more good a company does, the more

195

BRANDS AND BRANDING

Table 12.1 Global issues: can business really help?
Issue
Poverty, exclusion andconcentration of power

Problems
 Growing gap between rich andpoor.
 Lack of participation ineconomic and political life.
 Huge inﬂuence of large
corporations on national
economies has led to loss of
democratic control.
 Poor suffer from irresponsible
business practice.
 Low investment in deprived
areas.
 Poor-quality investment thatfails to stimulate local economic
activity.

What can business do?
 Invest in deprived areas andmeasure the local impact ofinvestment.
 Rely where possible on local
procurement and employment.
 Involve stakeholders incorporate governance.
 Be aware of and apply things
like the Global Reporting
Initiative to improvetransparency.

Environmental vulnerability

 Over-consumption of resources,
particularly fossil fuels.
 Global warming, rise in sea level
and increased frequency ofhigh-intensity storms andﬂooding.
 Increased risk to poor
communities caused by effects
of climate change.

 Reduce consumption of fossil
fuels.
 Ensure marketing does not
become a tool for“greenwashing”.
 Cease lobbying to maintainenergy subsidies; call for ﬁscal
incentives to increase
investment in renewables.
 Transparent reporting on
environmental impacts,
including full-cost green
accounts.

Disease and access to medicine

 Lack of sanitation and healthcare services in poor countries
means many die of preventablediseases.
 Patents keep drugs out of reachto the poor.
 Spread of HIV virus, decimating
populations in some poor
countries.

 Release patent rights on drugs
 Contribute to development andmaintenance of community
water and sanitation services.
 Contribute to public researchfunds for affordable drug
treatments.

Economic instability

 Short-term portfolio investment
and currency speculation has
destabilised national
economies.
 Fall in commodity prices coupledwith crippling debt has hit poor
countries hard.

 Support national economies bypaying in local currency.
 Procure goods, services andemployment locally.
 Undertake appropriate longterm investment.
 Limit lobbying on policy areas
which can contribute toeconomic destabilisation.

Conflict and insecurity

 Many regions are plagued byarmed conﬂict.
 War economies undermine longterm social and economic
development.
 This can inadvertently be fuelled
by businesses operating in
conﬂict zones.

 Screen locations for investment.
 Transparent reporting ofbusiness activities in conﬂict
areas.
 “Zero tolerance” policy onbribery and corruption,
including facilitation payments.

196

AN ALTERNATIVE PERSPECTIVE ON BRANDS: MARKETS AND MORALS

it is open to scrutiny by global activists. Never could there be a morecompelling argument than this for companies to look at their role insociety, and to call for appropriate levels of regulation by governments
to level the playing field. Ed Crooks, economics editor of the Financial
Times, says:
The balance between making money, protecting theenvironment and looking after individual rights affects all ofus. We should all be able to take some responsibility for the big
decisions – and that means not leaving it all to business.19
Brands are unlikely to disappear any time soon; even smaller companies with an ethical aim, such as Café Direct, eventually succumb to
the temptations of “growth” and need to achieve brand recognition for
long-term success. But let us hope that the smaller, up-and-coming ethical brands do not compromise their morals and their methods in theprocess.
The issue is not brands as such. It is how big brands, often with nearmonopoly power, have behaved. Brands do have the potential to be aforce for good, so long as we consider the ways in which they arevalued, and couple the natural instincts of the market with appropriate
regulation.

Notes and references
1 Lee, M., Fashion Victim, Broadway Books, NY, March 2003.
2 Smith, E.A. and Malone, R.E., “Altria means tobacco: Philip Morris’s
identity crisis”, American Journal of Public Health, Vol. 93, No. 4,
April 2003, pp. 553–6.
3 Vosters, H., “Partial Chronology of Union Carbide’s Bhopal
Disaster”, CorpWatch, May 15th 2003.
4 Lean, G. and Anderson, A., “Does BP mean Burning the Planet?”,Independent, September 3rd 2000.
5 SalterBaxter and EContext, 2002.
6 SustainAbility, Trust Us: The Global Reporters 2002 Survey of
Sustainability Reporting.
7 Buchan, D., “BP Driven to the Back and Beyond”, Financial Times,
April 20th 2001.
8 Brand Strategy, Issue 165, November 2002.
9 Buckley, N., “Big Food’s Big Problem”, Financial Times, February 17th
2003.

197

BRANDS AND BRANDING

10 Co-operative Bank and the New Economics Foundation, Ethical

Purchasing Index 2002.
11 Co-operative Bank, Who are the Ethical Consumers?, London, 2000.
12 Roper Green Gauge Report, Roper-Strach Worldwide, New York,2002.
13 Makower, J., Consumer Power, RAND, IP 203, 2001.

www.rand.org/scitech/stpi/ourfuture
14 “Food shoppers appear to shun ethical goods”, Financial Times,

November 21st 2002.
15 Partnoy, F., Infectious Greed: How Deceit and Risk Corrupted the

Financial Markets, Times Books, 2003, p. 299.
16 Litvin, D., Empires of Profit: Commerce, Conquest and Corporate

Responsibility, Texere, 2003, p. 245.
17 Miller, J., “Double Taxation Double Speak”, Dollars and Sense

Magazine, March/April 2003.
18 www.GRI.org
19 Sustainable Development Commission, Business @boo.m&bust,

2001. www.sd-commission.gov.uk/pubs/ar2001/04.htm

198

13 Branding in South-East Asia
Kim Faulkner

he Asian tiger economies of the early 1990s are recovering after thesevere setbacks they suffered during the economic crisis that hit
them in 1997. Although the more recent global recession has slowed
their recovery somewhat, countries such as Singapore, Malaysia, Thailand, the Philippines and Indonesia have recognised that there is muchthey can do to renew economic growth and investment interest in theirmarkets.
According to the report on “Global Economic Prospects and theDeveloping Countries 2003” by the World Bank, developing countries
will on average grow at 3.9%. However, this global average masks wide
regional differences, with East Asia leading the pack at 6.1%, followed bySouth Asia at 5.4%.
Of the many important lessons learnt from the Asian financial crisis,
good governance, sound institutions, as well as the development ofstronger Asian brands, stood out as being key to economic recovery, thelatter being one of the few means of helping local Asian companies diversify geographically, thus providing greater stability and reducing overdependence on the domestic market for growth. This coupled with the factthat Asian consumers are among the most brand conscious consumers in
the world has made many Asian companies review their intangible assets.
This chapter focuses primarily on branding in South-East Asia, aregion where a “West is Best” culture – in terms of lifestyle, entertainment and standard of living – and the aspirations of consumers have led
to a pent-up demand for western brands. However, lower levels of disposable income as well as the Asian predilection for getting a “gooddeal” (that is, getting something of value at a much lower price) led to a
counterfeiting culture that became prevalent in many developing countries of Asia. Thus counterfeit Rolex watches, Chanel perfumes andGucci bags were sold on many street corners and snapped up by the
locals (not to mention the western tourists). The lack of importanceattached to protecting intellectual property and intangible capital islikely to change, however, with the creation and development of strong,internationally distributed Asian brands. Furthermore, higher levels ofT

199

BRANDS AND BRANDING

disposable income among the population will lead to a gradual preference for genuine brands rather than the cheap counterfeits.
So far, even though Asians are acknowledged to be some of the most“brand conscious” consumers in the world, this has not, outside ofJapan, translated into Asian companies generating many powerfulglobal brands. This is not to say that they have not generated any significant brands, but rather that few of these brands have achieved
recognition as leaders in their respective categories outside their homemarkets. This could be partly explained by the fact that the focus has
been on manufacturing and increasing productivity through greater production efficiencies, often at the expense of innovation, creativity andthus also branding.
Some markets in Asia have been insulated from international
competition by their governments, with “strategic” sectors such as airlines, agriculture, shipping, financial services, the media and telecommunications controlled by the public sector. In countries such as
Indonesia, it has been more important for firms to get access to distribution, which has been controlled by local conglomerates, than to createstrong brands. These factors have lulled many Asian companies into
thinking purely in terms of their home markets and national interests;
there has been less compulsion to build brands for overseas markets.
But with economic liberalisation, there are signs of new thinking.

Asian brands hold their own
However, although there may be few Asian brands of international
stature, it would be wrong to assume that there are no strong Asian
brands. In many consumer-goods categories in Asia home-grownbrands proliferate and hold their own against foreign competition.
These brands are not only highly recognised in their home market, butalso very much a part of the day-to-day lives of many people.
Traditional brands such as Rabbit milk sweets were well-loved treats
for children, as were Bee Cheng Hiang Chinese barbecued sweetmeats
during the Chinese Lunar New Year. If the Malaysian consumer woke up
to a cup of tea, it had to be Boh Tea because “Boh ada Uumph!”, and if theyneeded a bit more of a boost, they drank Yomeishu tonic because it was“trusted by generations”. Many young women smothered Hazeline Snowon their faces to attain that smooth, fair complexion prized for centuries in
Asia, long before the new whitening and anti-ageing formulas currently
marketed by L’Oréal and other international cosmetic brands existed.
Tiga Kaki (literally “three legs” in Malay) headache pills stopped

200

BRANDING IN SOUTH-EAST ASIA

people’s headaches and Darkie toothpaste (complete with a smilingblack minstrel on the packaging) gave them gleaming teeth – politicalcorrectness was not an issue then. These were brands that their parents
and grandparents trusted and used, and they were familiar names inmany households.
There are five main categories of Asian brands:

 Traditionalists
 Revitalised New Asia
 Challengers
 Established
Traditionalists
Traditionalist brands are, by definition, those that have held on to the
traditions and heritage that made them so trusted and relied upon. They
are brands that have been developed over decades, if not centuries, intheir respective home markets. Before these markets were liberalised,traditionalist brands dominated the categories in which they operated,leveraging their wide domestic distribution network, heritage and highbrand awareness in the marketplace.
However, as their home markets started to open up and international
brands began competing in their territory, some of these brands cameunder pressure to evolve or risk extinction. One is Tiger Balm from Singapore, a topical, pain-relieving ointment used by generations of consumers throughout South-East Asia for their aches and pains. In the faceof competition from international over-the-counter brands marketed byinternational pharmaceuticals firms, a number of new applications
were developed for the brand.
The original Tiger Balm product was a thick, hard, waxy balm sold intiny hexagonal glass jars which was used judiciously to relieve
headaches and muscle aches. Haw Par, the company that manufactured
and marketed the product, faced two main challenges:

 Only a tiny amount of the product was used in each application,

which meant that repeat purchases by even the most ardent
loyalists were few and far between.
 It was a product and brand associated with people who were oldand ailing, and younger Asian consumers appeared to have little
use for it. It was therefore operating in a shrinking market.

201

BRANDS AND BRANDING

By the late 1980s the brand had expanded into new product formats, such as medicated plasters, muscle rubs, oils and liniments, targeting sportsmen and a new generation of fitness enthusiasts andjoggers. This extension coincided with the brand’s overseas expansion
into western markets in the United States and Europe, where it sponsored and distributed free samples of its products at sporting events togain awareness and to encourage people to try them. With its distinctive packaging and tiger trade mark design, and its new positioning
and new product lines, the brand was able to tap new markets. It has
since added more products to its portfolio including headache pills,
bath salts and mosquito repellent. It is marketed in over 100 countries
worldwide, and overseas sales account for almost 60% of Tiger Balm’s
total revenue.
Revitalised brands
While some traditional brands faced the brave new world by extending
the usage of and applications for their products, others, such as Brand’s(essence of chicken) by Cerebos Pacific, decided that a radical revitalisation of the brand was necessary. The revitalisation meant not justextending the product format from the traditional tonic drink to themore portable and palatable caplets, but also reinventing the brandproposition and venturing out of the “essence of chicken” category into
new health supplements which did not contain any “chicken essence”.
Brand’s, which is currently marketed in seven different markets
across South-East Asia and Greater China (China, Hong Kong andTaiwan), owes its product formulation to the court of George IV, a
British king. It was produced while he was convalescing from a serious
illness. It arrived in Malaya in the 1920s, and because of its strong linkwith the Chinese belief in the restorative powers of double-boiled
chicken soup it quickly became popular. It has a long history in Asia asa brand that students rely on to improve their mental stamina during thelong hours spent studying for those all-important school exams.
Although the brand continued to dominate the “essence of chicken”
category, with market shares of 85–90% in each of its Asian markets,sales started to decline in the mid-1990s. This set alarm bells ringing at
Cerebos Pacific, by then owned by Suntory. By 1998 the company had
embarked on an aggressive brand revitalisation exercise in all its sevenmarkets. One of its main objectives was to win back the growing
number of lapsed users: the students who did not return to the brandonce they got through their exams, and the working population who

202

BRANDING IN SOUTH-EAST ASIA

turned to more modern health-supplement brands such as Kordels, gnc
or Blackmores. Other objectives included attracting new and younger
users to supplement its loyal but ageing customer base, leveraging thetrust and heritage of the brand, enhancing its credibility and positioning
it as a trusted health supplement for consumers throughout every stageof their lives.
This meant a number of changes, starting with the introduction of anew product format for the core range, the caplets, and then extending
into other health-supplement products, such as glucosamine, and a newrange of sesame-based products sub-branded Sesamin. The brand image
was updated through a new brand identity, packaging and marketing
communications aligned throughout all markets. Activities to build anunderstanding of the new brand proposition included a website
offering tips on a balanced life, a personalised “Health Mate” healthmanagement information programme and an enhanced global
customer-loyalty programme.
The brand relaunch resulted in sales increases in key markets, tapping into the trend towards greater consciousness and management of
their health as Asians grappled with the financial crisis, global recession
and increasingly stressful urban lifestyles. The new product offerings
have encouraged lapsed users to return to the brand and have been particularly successful in markets such as Singapore, Taiwan and Thailand
where the health-supplement category has enjoyed double-digit growthsince the late 1990s.
New Asia brands
Even as the traditionalist and revitalised Asian brands have evolved or
reinvented themselves to face the challenge of international brands
entering their home market, a slew of “New Asia” brands have emergedin sectors traditionally dominated by international brands. These new
brands leveraged the culture, history and identity of their homelands tocreate distinctive brand experiences that are internationally appealing
and contemporary but also distinctively Asian in inspiration.
In the hospitality sector, for example, the once-dominant Hiltons andHyatts are now challenged by Asian brands such as Shangri-La and Raffles International, as well as resort brands such as the Banyan Tree andAman. In travel, Singapore Airlines and Cathay Pacific have gainedinternational recognition and won accolades for in-flight service andinnovation. What these brands have done is to capitalise on the innate
warmth and graciousness of Asian hospitality and translated them into

203

BRANDS AND BRANDING

a seamless customer experience that encompasses design and aesthetics,
with refreshing product and service innovations.
The Banyan Tree resorts, for instance, have departed from the reassuring consistency and sameness that was the basis of many hotel
brands, whose goal was to make customers feel as if they had never left
the United States even when they were on the other side of the world.
Asian hospitality brands are determined that people should experience
an authentic Asian experience but with all the creature comforts andluxury that modern technology offers. Banyan Tree resorts and others
like it have created brand consistency around an experiential idea (intheir case the idea of romance and intimacy). They also infuse subtle
variations of the brand in each of the locations in which they operate,
such that the individual experience remains true to the core proposition
yet offers a refreshing difference in each interpretation.
For example, the resorts adopt the architectural styles and interior
design finishes of the country or province in which they are located. So
the Banyan Tree resort in Phuket has Thai architecture and uses Thai
crafts in its interior furniture and fittings as well as in the resort merchandise; by contrast, the Bintan resort adopts an Indonesian style anduses local Indonesian crafts. The same applies to resorts in the Maldivesand Seychelles. In all Banyan Tree resorts, the staff, who are locals, areproud to ensure guests have an experience that authentically reflects thenuances of Thai, Indonesian, Maldivian and Seychelles customs, culture
and style of hospitality.
What characterises these New Asia brands is their pride in theirprovenance. This reflects the new confidence in their roots and sense ofidentity that many Asian companies now have. They have recognisedthat internationalism does not mean trying to be western in Asia. This is
more obvious in countries such as Thailand and Indonesia, which havetaken great pride in the richness and diversity of their cultural history
and local crafts.
A good example of an Asian brand that has remained true to its cultural origins is Jim Thompson, a Thai silk manufacturer and retailer. Thisis a brand that has thrived under a shroud of myth and mystery. Its
founder, a successful American businessman and well-known residentof Bangkok, disappeared on a trip to the Cameron Highlands in
Malaysia. He went out for a walk one evening and never returned; hisbody was never found and to this day his fate remains unknown. His
mysterious disappearance became the stuff of legend, but this businessman left behind more tangible legacies.

204

BRANDING IN SOUTH-EAST ASIA

Thompson almost single-handedly revived the Thai silk industry. By
the end of the second world war, there were only a handful of Laospeaking villagers still weaving the fabric as cheaper and more efficientmachine-made silk took over the market. Thompson was excited by theraw, shot-silk texture of this hand-woven fabric, which was so different
from the smooth, almost featureless machine-made silks. He collected as
many samples as he could and took them to the editors of Vanity Fair
and Vogue in the United States. There, the story goes, Edna Woolman
Chase, editor of Vogue, took one look at the lengths of Ban Krua silkspread across her desk and fell in love with them. The rest, as they say,is history.
Thompson went on to found the Thai Silk Company in 1948. Butinterestingly and to his credit, despite advice to centralise production
and to set up a mechanised factory, he insisted that things be done thetraditional way so that the Thai Silk Company would retain its individuality and unique appeal. It went on to supply the unique fabric aroundthe world, making it available not just to the fashion industry but also to
the furnishings and furniture industries. The company set up a chain ofretail stores in Bangkok and other important tourism sites in Thailand,selling the fabric as well as finished items such as scarves, handbags,
tote bags, wallets, cushion covers, tablecloths and other home accessories.
Today, the brand is sold throughout Asia. As well as the core merchandise, the range includes beautifully designed, modern, high-end furniture that is distinctively Asian in inspiration but crafted in acontemporary, minimalist style. The company has also recently introduced a Wedding and Gift Registry Service, which offers “Living with
Jim Thompson” home interior gifts for couples as they embark on their
new life.
In contrast to brands such as Jim Thompson that have retained many
facets of their provenance but modernised their product ranges andretail strategies to suit changing demands, more cosmopolitan countries
like Singapore have taken a different route to building indigenous New
Asia brands. In fact the term “New Asia” was coined by the Singapore
Tourism Board as it identified Singapore’s niche in Asian tourism as
being the “gateway to Asia”, presenting the cultural diversity of Asia in
a compact, contemporary context.
This island state has long striven to carve a unified identity from its
multiracial, multicultural roots, but its desire to create cohesion andfusion out of multiple ethnicities presents challenges. Singapore has

205

BRANDS AND BRANDING

been accused of being “faceless” and “sterile”. Yet out of its New Asia
identity have emerged brands such as osim, a health-conscious,
lifestyle brand offering customers a wide range of “healthstyle” products from massage chairs costing US$3,000 to smaller, more inexpensive
gadgets such as hand-held massagers, eye massagers, blood-pressure
monitors, water-based vacuum cleaners and water purifiers. Although
the osim brand originates in Singapore, its core products, such as thehigh-end massage chairs, are made in Japan and its other gadgets are
made all over the world.
osim’s image is neither overtly Asian nor western. The brand identity, packaging and retail designs are international in style and the brandname is Asian, as is the brand’s outlook and philosophy. The models
and celebrities who advertise and endorse osim products are alsoproudly Asian. For instance, Gong Li, a Chinese (now Hollywood)actress, was recently signed up to promote the osim range of Mermaid
vacuum cleaners. Although it may be stretching the imagination tobelieve that she still pushes a vacuum cleaner around her own home,
Asian consumers identify her as someone who has earned international
success while remaining true to her Asian roots, and in that context she
is a role model for many.
Challenger brands
Challenger brands are those that have attempted to impersonate theirwestern counterparts with pseudo-European names such as Bonia or
Fion in leather goods and handbags, and Riccino in shoes. They havemade full use of their knowledge of the local market and local tastes,
but offer western-styled products at a fraction of the price of imported
brands.
These brands sought to inject a cosmopolitan appeal and sophistication to their products by projecting a western image, and who canblame them? After all, young men in Asia were shunning the Crocodile
and Three Riffles t-shirts they had worn for years in favour of Lacoste
and Ralph Lauren Polo t-shirts even though they cost ten times as much.
Challenger brands reflect the enterprising spirit and determination ofAsia’s small and medium-sized enterprises, which are flexible andresponsive enough to tap into the latest trends and tastes in Asia. However, challenger brands are not limited to “copycat” brands seeking to
exploit Asians’ love for western designer labels.
BritishIndia, for instance, which originated in Malaysia, is a fashionand lifestyle brand that has created a style and look of its own. The style

206

BRANDING IN SOUTH-EAST ASIA

of the brand is the Asian “colonial look”, with cottons and linens thatwill certainly give international brands like Gap or Ralph Lauren a run
for their money when it makes its foray into western markets. BritishIndia is evocative of the romance and gracious tropical living of thecolonial era without being traditional, or overly Victorian. The colonialism in the brand, which extends to homeware and furniture, is best
described as tropical, contemporary and “luxuriously utilitarian”, a termcoined by Patricia Liew, BritishIndia’s founder.
The brand’s origins can be traced to Metrojaya, a large department
store chain in West Malaysia, where Liew was formerly the merchandise director. It was there that she became involved in brand development and created a number of successful in-house labels for the
department store, among them East India Company. In 1997, a management change at Metrojaya prompted her to venture out on her own. She
created BritishIndia, which clearly took its inspiration from her East
India Company label, one of the most successful of Metrojaya’s inhouse labels.
Today the brand is available in seven countries in Asia and the
Middle East, including Malaysia, Singapore, Thailand, Indonesia andDubai. It appears to be going from strength to strength, despite difficult
economic conditions, and has won a loyal following not just among
Asians but also among the western expatriate community in these countries. Its sizing policy suits both the petite, small-boned Asians and theirtaller, bigger-boned western counterparts.
Established brands
One of the most established brands in Asia is Singapore Airlines. In theearly 1970s, the airline realised that to compete effectively against the big
European and American airlines it had to offer a strong and meaningful
differentiation, particularly as it did not have a huge domestic market torely on. It identified a simple gap: quality of service. Planes were hollow
steel tubes which transported people thousands of miles with minimum
comfort, and it was only after they had landed that the passengers
would begin to enjoy themselves. So Singapore Airlines decided to offer
the experience of enjoying the magic of Asia from the moment passengers boarded the plane. The famous “Singapore Girl” was born, with her
beautiful uniform, grace and charm symbolising the enchanting service
that passengers would get. It is an approach that has gained the airline
recognition around the world as a leader in the industry.

207

BRANDS AND BRANDING

Table 13.1 Top 50 Asian Brands, 1999
Rank Brand

Category

Origin

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50

AirlineApparelHospitality
Food & Beverage
Alcoholic Beverage
AirlineIT
IT
Media
AirlineHospitality
Financial Services
Hospitality
AirlineAlcoholic Beverage
Alcoholic BeverageMedia
Hospitality
Electronics
ApparelHome Furnishing
RetailFood & Beverage
Food & Beverage
Automotive
Hospitality
Food & Beverage
Consumer ProductsHome FurnishingMedia
Hospitality
Hospitality
Food & Beverage
Food & Beverage
AirlineMedia
Electronics
Home Furnishing
Alcoholic Beverage
Food & Beverage
RetailFood & Beverage
AirlineMedia
ApparelFood & Beverage
ApparelApparelConsumer Products
LeisureSingapore
Australia
Singapore
Hong Kong
Australia
Australia
Singapore
TaiwanHong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
ThailandPhilippines
Singapore
Australia
Singapore
Korea
Hong Kong
Australia
Hong Kong
Singapore
New Zealand
Korea
Singapore
TaiwanSingapore
Malaysia
Hong Kong
Hong Kong
Hong Kong
Australia
Hong Kong
TaiwanHong Kong
Korea
Thailand
China
Hong Kong
Hong Kong
New Zealand
Malaysia
Hong Kong
Australia
New ZealandAustralia
Hong Kong
Singapore
Singapore

Singapore Airlines
SpeedoShangri-La Hotels
Lee Kum Kee
Foster’s
QantasSound Blaster
Acer
Star TV
Cathay Paciﬁc
Regent Hotel
HongkongBank
Mandarin Oriental
Thai Airways
San MiguelTiger Beer
Lonely Planet
Banyan Tree
Samsung Electronics
Giordano
SheridanWatson’s
Brand’sAnchorHyundai Motor
Raffles Hotel
Want Want
Tiger Balm
Royal Selangor
Far Eastern Economic Review
Aman Resorts
Peninsula Hotel
Arnott’sAmoy
EVA AirTVB
LG Electronics
Jim Thompson
Tsingtao Beer
Vitasoy
DFS
AnleneMalaysia Airlines
Channel V
Quick Silver
ChesdaleCountry Road
G2000
HazelineStar Cruise

Source: Interbrand

208

BRANDING IN SOUTH-EAST ASIA

Table 13.2 Top Singapore brands, 2002
Rank Brand
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

SingTel (ﬁxed/mobile)
DBS
UOB
APBb
OCBC
Great Eastern
SIA (airline)
Tiger Balm
F&N (soft drinks)b
Creative
Informatics
Brand’s
OSIM
Eu Yan Sang
Hour Glass

Brand value (S$m)

Market cap (S$m)

3,000
1,000
950
820
625
400
380
110
95
90
75
75
45
30
20

31,373
19,966
19,953
1,165
14,152
4,689
13,400
146
2,247
1,079
344
650
107
54
51

Brand value as% of market capa
n/a
5
5
n/a
4
9
n/a
75
n/a
8
n/a
n/a
42
55
39

a n/a indicates that only a segment of the company’s business was considered.
b Valuation reﬂects all brands within their respective portfolios.
Source: Interbrand

Where things standIn 1999, Interbrand’s survey of the Top 50 Asian Brands (see Table 13.1)
showed that a significant number of the strongest brands were in thetravel and hospitality sectors where service is crucial to the customer
experience and therefore to brand distinctiveness and loyalty. In 2002,
in a separate study commissioned by the Singapore government, Interbrand provided a “benchmark value” of the top Singaporean brands(see Table 13.2). There were three notable findings from the study: Despite the fairly low valuations themselves, the brand was

becoming the most valuable single asset for the businesses
surveyed.
 The brands that succeeded were not single-product brands, they
were services or range brands.
 Many of the strongest brands were characterised by a focus on

209

BRANDS AND BRANDING

customers’ attitudes and lifestyle needs and not on image orfunctional benefit.

Looking ahead
Economic and political upheaval in the late 1990s and the sars outbreak in 2003 were body blows to the travel and tourism industry (andother sectors) of a number of South-East Asian countries. Yet despite
these upheavals, local companies remain determined to survive andsucceed, and to build and sustain strong brands.
It is true that outside of Japan (and more recently South Korea) there
are few Asian brands that stand out in the global marketplace, but it may
just be a matter of time before there are more. Since the economic shocksof the late 1990s, crony capitalism, where who you know matters morethan what you do and how well you do it, is on the decline, and deregulation and economic liberalisation are gathering pace. Companies are
discovering the need to focus on their core businesses and to develop
their competencies.
They have also started to recognise that they need to become lessdependent on their home markets and to develop strong brands that cancompete internationally as well as at home. Name recognition alone,they have discovered, does not necessarily imply that they have a powerful brand, capable of securing consumer preference and loyalty. As aresult, many local companies have embarked on branding programmes,
driven by pure necessity, to meet the challenges of a more liberal andincreasingly global economy. This combination of “push” and “pull”
factors will result in many more Asian brands appearing on the global
stage.
Gradually, the region will emerge from its mindset of having to playcatch-up with the West. It will increasingly embrace and celebrate its
own identity and build on what makes South-East Asia distinctive andunique to develop strong brands, as the Asia-originating brands
described above have done. Singapore Airlines and Banyan Tree havemade the most of the concept of Asian hospitality. osim, Tiger Balmand Brand’s have positioned themselves around the Asian holistic
approach to health management. Jim Thompson and BritishIndia havelooked to the past to develop a modern Asian concept of style and fashion.
The can-do, never-say-die attitude of South-East Asian companies
will stand them in good stead as they find their own voice and identity
in the global marketplace. They have recognised that the factors that210

BRANDING IN SOUTH-EAST ASIA

Asian consumers are looking for in international brands – the focus on
added value and unique experiences – are exactly the attributes thatcharacterise the best of Asia and the best of Asian brands. Specifically,
the growing demand among consumers around the world for authenticity, for diversity not sameness, for personalised service, for a holistic
and alternative approach to health, and for new culinary experiences issomething from which Asia can profit.
So although today consumers around the world may not feel comfortable with putting a “Rabbit” in their mouths, a “Tiger” on theiraching muscles and a “Crocodile” on their backs, this probably will not
apply forever in the western search for new experiences.
Tips for brand builders in Asia
 Be true to yourself. Asian consumers are increasingly looking
for authenticity not western clones.
 Don’t overpromise. Asian consumers value good value andexpect you to deliver what you have said or implied you will.
 Appeal to universal needs. Avoid cultural stereotyping;consumers the world over have similar human desires.
 Don’t be too culturally sensitive. It is important to understandreligious customs (for example, halal meat in McDonald’s) but
don’t take at face value claims that certain colours, for instance,
won’t work.
 Do be culturally literate. Understand what the different cultural
nuances are; for example, in a Chinese dominated country, makesure you understand feng shui.
 Protect, protect, protect. Make sure that all elements of thebranded experience are properly protected through intellectual
property law and pursue any counterfeiters, frauds or pirates asbest you can.

211

This page intentionally left blank14 Branding places and nations
Simon Anholt

laces have always been brands, in the truest sense of the word. Mentioning this fact invariably upsets people, yet countries have beenbranding themselves deliberately and systematically for centuries. The
reputations of places have always been managed and occasionallyinvented by their leaders, who have often borrowed from others to augment their political skills: poets, orators, philosophers, film-makers,
artists, writers. If nowadays governments use advertising or pr agencies, that does not seem like a particularly dramatic development, or anespecially unpredictable one either. It is important to clarify, however,that the people who are upset by the idea of branding countries usually
come from rich countries. The notion that a country can be actively marketed to the rest of the world – for growth, for tourism, for trade and for
positive “image” generally – appears to cause none of this hand-wringing in most poor and developing countries, unless it is because notenough of it is being done.
Of course, branding places is different from branding products, andnobody in their right mind would claim that you can approach bothtasks in exactly the same way. Most of the controversy, as Wally Olins
points out,1 is created simply by the use of the word “brand”.
The fact is that most countries actively engage in the business oftaking care of their good names, as they have always done, and anincreasingly large number of cities and regions, both supranational andintranational, are beginning to do the same. They may not do it well,and almost none do it with anything like enough rigour, consistency,
patience and single-mindedness, but most do it, and if they don’t do it,they talk about doing it.
The marketing profession has been judged only quite recently tohave something useful to contribute to the business of improving
places. But marketing is coming of age in many ways. As the developed
world has become organised more and more along commercial lines, it
has become clear that a science which shows you how to persuade large
numbers of people to change their minds about things or part with hardearned income has various interesting applications.

P

213

BRANDS AND BRANDING

So it is no longer merely businesses which recognise the usefulnessof marketing. Political parties, governments, good causes, state bodies,even non-governmental organisations are turning to marketing as they
begin to understand that profound truth about human endeavour
which marketers always knew: that being in possession of the truth is
not enough. The truth must be sold.

Place branding
What is meant by branding a place is, at least in principle, quite simple.
A place-brand strategy is a plan for defining the most realistic, mostcompetitive and most compelling strategic vision for the country, region
or city; this vision then has to be fulfilled and communicated. The better
strategies recognise that the principal resource of most places, as well asa primary determinant of their “brand essence”, is as much the people
who live there as the things which are made and done in the place. They
therefore concentrate on finding ways to direct some of the energies ofthe population towards better communication of its qualities and aspirations: it is the exact place-branding equivalent of “living the brand”2 inthe commercial field. In all cases, it is fundamental to ensure that thevision of the place is supported, reinforced and enriched by every act ofcommunication with the rest of the world.
This coherence of communication is necessary because in the globalised world in which we now live, every place has to compete withevery other place for share of mind, share of income, share of talent,share of voice. Unless a place can come to stand for something, it stands
little chance of being remembered for long enough to compete for anyof this precious attention. Most of us spend no more than a few seconds
each year thinking about a country on the other side of the world or acity at the other end of the country. So unless that country or city always
seems exactly like itself every time it crops up, there is little chance thatthose few seconds of attention will ever add up to a preference for its
products, a desire to go and visit the place, an interest in its culture, or, if
we were prejudiced against the place in some way beforehand, achange of heart.
The acts of communication in which places commonly engage may
include: the brands which the country exports;
 the way the place promotes itself for trade, tourism, inward
investment and inward recruitment;

214

BRANDING PLACES AND NATIONS

14.1
2.1

The place branding hexagon
Tourism

Export brands

Foreign anddomestic policy

PeopleCulture and heritage

Investment and immigration

Tourism

Investment and immigration

Often the most visible aspect of place branding, tourism
is usually also the biggest spender and the mostcompetent marketing force. But it only presents a partof the picture, and needs careful alignment with theother channels of communication in order to achieve
its full potential as “flagship” for branding the nation,city or region.

Many of the best examples of rapid growth during thelast century have happened because certain places
became magnets for talent, investment and businessventures. A powerful and consistent place brand canhelp create positive preference and get places on theright shortlists.

Export brands
A powerful, distinctive, broad-based and appealing
national brand is the most valuable gift which a country
or region can give to its exporters: think what “Made inJapan” does for electronics, or “Made in Italy” forfashion. Today, branded exports form one of the mostpotent ways of building and sustaining national image.

Foreign and domestic policy
Places are also judged by the part their leaders play inforeign and domestic affairs, and this activity, just likeevery other, needs to be performed with sensitivity to
the strategic imperatives of the brand. When policy isin synergy with the other channels, there are few fasterways to establish a place’s position in the global
community.

Culture and heritage
Places which treat growth as a purely economic issue
run the risk of developing a two-dimensional brandimage, of interest only to investors, tax exiles andcurrency speculators. Culture, heritage and sport provide
the third dimension, giving places richness, dignity,
trust and respect abroad, and quality of life at home.

PeopleOne “channel of communication” which is fully equal tothe huge task of communicating the complexities andcontradictions of a place to the global marketplace is
its people. When each ordinary citizen – not justdiplomats, media stars and politicians – becomes apassionate ambassador for his or her home country orcity, positive change can really happen.

Source: www.placebrands.net

 the way it behaves in acts of domestic and foreign policy, and theways in which these acts are communicated; the way it promotes and represents and shares its culture withother places; the way its citizens behave when abroad and how they treat
strangers at home; the built and natural environment it presents to the visitor;
 the way it features in the world’s media;
 the bodies and organisations it belongs to; the other countries it associates with;215

BRANDS AND BRANDING

 the way it competes with other countries in sport and entertainment;
 what it gives to the world and what it takes back.
These and the other ways in which places express themselves usually
fall under one or another of the six basic categories of communication
which form the place branding hexagon (see Figure 14.1).
Place branding aligns as many of these “channels” as possible into
accomplishing and communicating the development strategy of the cityor country or region. If done well, such a strategy can make a big difference to both the internal confidence and the external performance of aplace, as places like Ireland, New Zealand, Spain, Bilbao, Bangalore andLiverpool have shown in recent years. These countries and cities havecompletely changed, in a relatively short time, the way in which people
think about them, and they have done it quite deliberately.
The best example of national rebranding from our own times isundoubtedly that of modern Japan. The effect of Japan’s economic miracle on the image of the country itself was quite as dramatic as its effecton the country’s output. Only 40, or even 30, years ago “Made in Japan”
was a decidedly negative concept, as most western consumers had
based their perception of “brand Japan” on their experience of shoddy,
second-rate products flooding the market. The products were cheap, certainly, but they were basically worthless. In many respects, the perception of Japan was much as China’s has been in more recent years.
Yet Japan has now become synonymous with advanced technology, manufacturing quality, competitive pricing, and even of style andstatus. Japan, indeed, passes the best branding test of all: whether consumers are prepared to pay more money for functionally identicalproducts, simply because of where they come from. It’s fair to say thatin the 1950s and 1960s, most Europeans and Americans would only
buy Japanese products because they were significantly cheaper than awestern alternative. Now, in certain valuable market segments – suchas consumer electronics, musical instruments and motor vehicles –western consumers will consistently pay more for products manufactured by previously unknown brands, purely on the basis that they areperceived to be Japanese. Little wonder that Dixons, a UK retailer ofconsumer electronics, gave its new house brand a mock-Japanesename, Matsui, in order to borrow a little of the “public domain” equityof brand Japan.
Image and progress unfailingly go hand in hand. Although it is usually true that a positive image is the consequence of progress, rather

216

BRANDING PLACES AND NATIONS

than vice versa, it is equally true that when both are carefully managedin tandem, they help each other along and create accelerated change.
Place branding gives equal prominence to perception and to reality.
This is because the first lesson that marketing has to teach is that people
are often more influenced by what they believe than by what is true.
The second lesson is that other people are less interested in you than
you are, so if you care about what they think, it is your responsibility tomake yourself properly understood. Objectivity becomes a cardinalvirtue when branding a place. It is hard enough for marketers to be dispassionate enough about a fizzy drink or a training shoe to really getunder the skin of an indifferent consumer, let alone about a “product” inwhich they and their forefathers were born and raised.
Marketing also teaches that people cannot be deceived for long; thatthe higher you raise their expectations, the more completely they reject
your offering when they are disappointed; and you can’t make people
buy a bad product more than once. So every good marketer knows that
his or her primary responsibility is to ensure that the product matches
up to the promise, because misleading marketing is ineffective marketing.

The power of country of origin
Wherever you go in the world, the most desirable brands in the shops
nearly always come – or appear to come – from the same places: America, England, France, Germany, Italy, Japan, Scandinavia, Scotland,
Switzerland or South Korea. These places are the top ten as far as brandimage is concerned. Tell people that a brand is made in one of thesecountries or regions, and they will immediately expect a certain kind of
brand image and a certain level of quality, and will be prepared to pay
a certain price for it.
If Coca-Cola or Marlboro or Nike were not American, if Ferrari or
Gucci or Barilla were not Italian, if Chanel or Dior were not French, and
if Burberry or Rolls-Royce were not (originally) English, they would
truly be half the brands they are today.
The country images which so often guide our buying decisions are sofamiliar to us that we accept them pretty much without hesitation, alongwith the qualities with which we believe they endow their products andservices. It is for this reason that a powerful and appealing national
brand is the most valuable gift that any government can give to its
exporters: it is their “unfair advantage” in the global marketplace.
There are fewer and fewer good reasons why developing countries

217

BRANDS AND BRANDING

should not also benefit from the synergy of a strong nation brand andbranded goods and services. The Bangalore technology cluster, forexample, spearheaded by companies like Wipro and Infosys, is rapidly
updating the brand image of India as modern, innovative,
entrepreneurial and global, just as the emergence of consumer brands
like Samsung, Daewoo and lg have done in recent years for South
Korea, and Sony, Toyota and others did for Japan in earlier decades.
“Brand India” is clearly capable of embracing other values too, as several emerging Indian brands are beginning to demonstrate through theirexport success. Perhaps the most striking of these is Urvâshi, a perfume
created by Deepak Kanegaonkar, a Mumbai industrialist, which is currently enjoying remarkable success in the department stores of Paris,and playing its own part in reaffirming India’s more traditional brandqualities of exoticism, mystery, luxury and sensuality.
The importance of the country-brand/product-brand effect has not
escaped the Chinese government. In a recent symposium on “China’s
Rising Famous Brand” in Beijing, Wu Bangguo, the vice premier, calledon the Chinese nation “to make efforts to promote the development ofChina’s brand commodities so as to benefit the world’s people … development of brand commodities concerns China’s economic growth andsocial progress”. A report published for the symposium noted that the
top ten most valuable Chinese brands have shown an average increaseof 30.9% in annual sales, and will be strong enough to challenge theworld’s top 500 on the global stage in 3–5 years’ time. There are enoughexamples of thriving Chinese brands – such as Legend computers,
which aims to become the world’s leading pc manufacturer within ten
years, and Haier, already the world’s second-biggest refrigerator brand –to suggest that this may be more than idle boasting.3
There is more to a good place brand than boosting exports, however.
If we pursue the thought to its logical conclusion, a country’s brandimage can profoundly shape its economic, cultural and political destiny,
because global policymakers, just like the rest of us, are ruled by boththeir heads and their hearts.
What ultimately makes the European Commission decide whichcountries will be considered for membership of their elite club, and inwhich order? Consciously or not, their deliberations also relate to thebrand image of each applicant state, and what it might or might not ultimately contribute to the brand image of the European Union. Whencomplex wars erupt between countries, and even experts are hardpressed to say which is truly the victim and which the aggressor, it is218

BRANDING PLACES AND NATIONS

surely the brand image of each country that sways world opinion
towards its customary black-and-white view. And world opinion, as weknow, acquires a more and more pronounced influence on the outcomes of these matters as time goes by.
More than just a fashionable way to create “competitive edge” for thecountries which are rich and smart enough to practise it, branding places
is an absolute imperative in a globalised world. Ever since Adam Smith
made the connection between a free-market economy and the wealth of
the nation-state, the need to brand places has become clearer andclearer. More recently, Michael Porter’s The Competitive Advantage of
Nations probably marked the point at which it became obvious that
there is no other way for a country to prosper than by considering itself
as a competitor in a single marketplace.

Marketing at the top
The elevation of ordinary commercial marketing disciplines to the dizzying heights of national strategy unavoidably creates certain tensions,chiefly between what branding experts believe their discipline canachieve, and what their clients in governments or city councils believe it
is capable of achieving. This may have something to do with the qualityof the people who customarily work in marketing, or it may not; it certainly has a lot to do with the poor “brand image” of marketing itself.
At the heart of the issue is the old question of whether marketing ismerely about communications or something altogether more strategic. It
does not help that so many politicians and statesmen, like most lay
people, have little understanding of the proper meaning of “brand” andoften believe that it is simply a matter of designing an expensive newlogo for their country and a slogan to go underneath it. They barely distinguish between nation branding and tourism promotion.
Managing a national brand is both more complex and less glamorous
than this. Most countries of any size or age already have a brand image,whether they like it or not. People have heard of them and believe certain things about them. In many cases, the country neither needs nor
could sustain a new image, but it can benefit enormously by challenging
people’s prejudices and opening their minds to hearing something new
and relevant about the place once in a while.
Many places suffer from an image which is out-of-date, unfair,unbalanced or cliché-ridden. This “starlight effect” occurs because theimage of places which most people hold in their minds is often nothing
more than the distant echo of associations created decades or centuries

219

BRANDS AND BRANDING

earlier. This makes the brand images of places incredibly hard to shift:some of them seem positively rusted into place. Of course, wars, catastrophes and World Cup wins can have a sudden and dramatic effect on
the image of a place, but the more rapid the effect, the shorter-lived it
often proves to be.
Naturally, there are widely different agendas to be found among thestakeholders of a national or regional brand. One common example ofthis is the disconnection between the tourism authority – which often
likes to present the country as remote, unspoilt and sparsely populated
by picturesque, warm-hearted rustics speaking vanishing dialects – andthe inward investment board, which finds this kind of image mostunhelpful when it is trying to persuade a Korean multinational to build
its next semiconductor plant there.
So the kind of branding which nations undertake is much more likely
to be brand management than rebranding. Brand management is quite ahumble activity: the cautious husbandry of existing perceptions and thepainstaking reconciliation of diverse elements into a harmonious yet
distinctive whole. It is a process as unglamorous as it is unscandalous,
and, not coincidentally, hardly the stuff to get journalists excited.
In many cases, place branding may be simply a matter of helping“consumers” to join up the dots between the things they already know
and understand about a place, but whose relationship to each other has
so far eluded them. The UK, for example, suffers from a widespread
perception that it lives in the past, and yet surveys show that, once
prompted, most people around the world are well aware of its modern
fashion, design and youth cultures. A key component in “branding” theUK is therefore simply reminding people that Stratford-upon-Avon andCovent Garden are both to be found in the same country. Indeed, it was
the recognition of this need to “join up” the traditional and the innovative in the UK’s international image which gave rise to the public diplomacy programme which became popularly known (and derided) as“Cool Britannia”.
There was little to fault in the strategic thinking behind this initiative;
what went wrong was the way it was presented to the media and to thegeneral public at home. In the UK, there is a widespread and perhaps
idealistic or even naive feeling that public affairs and international relations are, or should be, purely about deeds and facts. Marketing, however, is seen by many as a dirty and unprincipled business, dealing withsurface and illusion, vanity and deception: lies, in short. So the news
that the Blair government was planning to rebrand the whole country

220

BRANDING PLACES AND NATIONS

naturally caused instant outrage, and the vital message was somehow
never communicated that this was nothing more than telling the worldsome good, true things about the UK which they didn’t already know.
In the end, of course, places are not soap-powder, and this is the central paradox of place branding: places are intensely complex and often
contradictory, yet the essence of all effective branding is simplicity. Tofind a branding strategy which is believable, relevant to the “consumer”,
true to the reality and the aspirations of the place, yet capable of encompassing this variety without becoming a boring compromise or alienating the population, is a task far bigger and trickier than anything
marketing service agencies have had to tackle before. Cultural relations
can play a critical part here in helping to restore the richness and dignity
to the place brand which the rigours of practical international marketingtake out.4

Is branding equal to the task?
It does seem an odd place for a humble commercial service like brandmanagement to find itself: almost, in a sense, above national government. Yet there is a compelling case for the national branding strategy todirect, or at least embrace, the full gamut of political, economic, culturaland social development. After all, the argument for nation branding
hinges on the acceptance that in a globalised world, all nations need tocompete with each other for a share of the world’s attention and wealth,and that development is as much a matter of positioning as anythingelse. So it makes perfect sense for governments to do everything possible to ensure consistency of behaviour in every area.
It also makes sense to say that anything which does not fall under theremit of brand is therefore a weak link in the strategic chain, and canundermine the efforts and investments made in other areas. There is, forexample, simply no point in investing in a brand strategy which portrays the country as a peaceful and beautiful tourist destination and an
exporter of ethically produced quality consumer goods if the government is busily oppressing minorities, polluting rivers or behaving belligerently towards its neighbours. This line of thought leads to theirresistible conclusion that place branding can actually encourage more
moderate and benign foreign policy, because it concentrates the mindsof political leaders so wonderfully on the real importance of their international reputation.
Furthermore, making ordinary citizens feel instrumental in shaping
and realising the international aspirations of the country may help to221

BRANDS AND BRANDING

create a stronger sense of national identity and promote social inclusion.
The whole country can be united in an objective examination of its
strengths and weaknesses through an open and public process of focus
and improvement.
Everything hinges on the basic need for consistency of behaviour
and the representations of that behaviour, and if there is no hope ofachieving consistency, then there is no hope of building a brand. Just as
the development of corporate and product branding has led to the conclusion that branding, if it is done properly, must affect every aspect of
the corporation both inside and out, so the same conclusion applies tonation branding.
However, another paradox of place branding is that achieving thisdegree of consistency is likely to be a great deal easier under a contract of
employment than under a social contract, especially a democratic one. In
the commercial sector, it is openly acknowledged that a certain amountof heavy-handedness has often proved essential to achieve the kind ofruthless adherence to strategy which companies need to build theirbrands. There is, in fact, little that is democratic in the way that most companies are run, and powerful brands are often the result of a singleminded, even mildly deranged visionary, who tolerates no deviationfrom the company line. This is understandable, since so much of the success of any branding venture is attributable to the degree of consistency
the company manages to achieve in its internal and external communications. It is also permissible to an extent, since, supposedly, the employees are there of their own free will and are being paid to perform in a way
which the management decides is in the best interest of the company. It
may not be nice, or ultimately very productive, but that is another matter.
Obviously, countries are different. The same approach by the leaderof a country is called tyranny and is frowned upon in international circles, however good it may be for the national brand. Yet we know fromexperience that getting many independent people and organisations (allwith very different interests, opinions and agendas) to speak with asingle voice is a hard thing to achieve through consensus. But one thingis clear: unless a government can find a way of achieving in its committees the same single-minded sense of purpose and control that the crazybrand visionary achieves within a privately owned company, anational brand programme is guaranteed to fail.

Hope for branding
When examining what is involved in branding places, it is easy to see

222

BRANDING PLACES AND NATIONS

why people without inside experience of first-class marketing can be
sceptical about whether the discipline is really up to the task.
In reality, branding theory and practice have something of value tooffer in virtually any area of endeavour. Few other disciplines so fully
explain and allow for the management of human enterprise. Branding
and marketing embrace scientific clarity of thought and rigorous observation of human psychology, culture and society with a deep sympathy
for the mystery of creativity. They combine advanced knowledge management (as is found in the way the better brands are policed in all theircomplex variants) with sensitive intercultural management (as is foundin the way the better brands are communicated worldwide). Branding isa clear set of universally applicable rules for building successful endeavours. It brings commerce and culture together as a potent force for creating prosperity. It can harness the power of language and images tobring about widespread social change. Good branding, uniquely, has
the humanism and wisdom to know that there is a difference between
what makes sense on paper and how people actually behave; it has theintelligence of academia combined with the worldliness of practice.
There are many people who feel far from comfortable at the thoughtof marketers mingling freely with politicians and helping them determine the fate of nations. It is possible to sympathise with this view, but
the influence of the art and science of branding on governments, if
responsibly and intelligently applied, can be enormously positive. If it isgood branding, it will bring a much-needed dose of practical, rigorous,
egalitarian, good-humoured, quick-witted humanism to an area wheresuch qualities are all too often entirely absent.
Brand building is one of the great achievements of the westernworld, even if it has usually been used for somewhat trivial ends,
merely increasing wealth where more wealth is least needed. Placebranding is one of the ways in which the discipline can begin to realise
its full potential, providing an opportunity for marketers to demonstratethat they have something to contribute above and beyond that tired oldlitany of “increasing shareholder value”. Branding has a unique power
to create a fairer distribution of the world’s wealth by adding the miracle of intangible value to products, and the places that produce them,beyond the “first world”. This process has just begun, judging by the success of Urvâshi noted earlier and the several hundred other nascentglobal brands created in developing and poor countries.
Place branding has big implications for the future role of brands
and marketing in general, and is the industry’s best and quite possibly

223

BRANDS AND BRANDING

last chance to create a lasting and significant future role for itself
beyond its traditional boundaries of promoting products and services
and helping rich companies get richer. During the last 100 years or so,much of the wealth of rich countries has been generated through marketing. These skills should now be transferred to poorer countries, andso help them graduate from being mere suppliers of low-margin
unbranded commodities to brand owners and branded places in theirown right.
Branding is part of the reason there is such a wide gap between therich and poor places of the earth. It would be a fine thing if it could now
turn some of its attention towards reversing that trend.

The eight principles of place branding
1 Purpose and potential
Place branding creates value for a city, region or state in three main ways:

 aligning the messages which the place already sends out, in accordance with apowerful and distinctive strategic vision; unlocking the talent of the people who live there to reinforce and fulﬁl thisvision; creating new, powerful and cost-effective ways to give the place a more effective
and memorable voice and enhance its international reputation.
2 TruthPlaces often suffer from an image which is out-of-date, unfair, unbalanced, or
cliché-ridden. It is one of the tasks of place branding to ensure that the true, full,contemporary picture is communicated in a focused and effective way; never tocompromise the truth or glamorise it irresponsibly.
3 Aspirations and betterment
The place brand needs to present a credible, compelling and sustainable vision for
its future, ﬁrmly in the context of our shared future. This will support the overall aim
of a real increase in the economic, political, cultural and social well-being of thepeople who live there, while contributing in a more than token way to the well-beingof other people in other places.
4 Inclusiveness and common good
Place branding can and should be used for achieving societal, political and economic

224

BRANDING PLACES AND NATIONS

objectives. Inevitably, a workable strategy will favour certain groups or individuals
over others, and this creates an inalienable responsibility to ensure that those lessfavoured are supported in other ways.
5 Creativity and innovation
Place branding should ﬁnd, release and help direct the talents and skills of the
population, and promote the creative use of these in order to achieve innovation in
education, business, government, environment and the arts. Furthermore, only
creativity of the highest order can “square the circle” of translating the complexityof a place into purposeful, distinctive and effective brand strategy (see Principle 6).
6 Complexity and simplicity
The reality of places is intricate and often contradictory, yet the essence of effective
branding is simplicity and directness. It is one of the harder tasks of place branding
to do justice to the richness and diversity of places and their peoples, yet tocommunicate this to the world in ways which are simple, truthful, motivating,appealing and memorable.
7 Connectivity
Place branding connects people and institutions at home and abroad. The clear andshared sense of purpose which good brand strategy engenders can help unite
government, the private sector and non-governmental organisations; it stimulates
involvement and participation among the population; externally, it helps build
strong and positive links to other places and other people.
8 Things take time
Place branding is a long-term endeavour. It need not and should not cost more thanany place can comfortably afford, but is neither a quick ﬁx nor a short-term
campaign. Devising an appropriate place brand strategy and implementing it
thoroughly takes time and effort, wisdom and patience; if properly done, the longterm advantages, both tangible and intangible, will outweigh the costs by far.
Source: Placebrands Ltd, 2003

References
1 Olins, W., “Branding the Nation – the historical context”, Journal of
Brand Management, Vol. 9, No. 4–5, April 2002.
2 See Ind, N., Living the Brand, Kogan Page, 2001.

225

BRANDS AND BRANDING

3 Anholt, S., Brand New Justice: The Upside of Global Branding,

Butterworth-Heinemann, Oxford, 2003.
4 Anholt, S., “Editor’s Foreword”, Journal of Brand Management, Vol. 9,

No. 4–5, April 2002.

226

15 The future of brands
Rita Clifton

he future of brands is inextricably linked to the future of business. In
fact, the future of brands is the future of business if it is to be aboutsustainable wealth creation. Further, because of the interaction ofbrands with society, and since so many socially influential brands are in
the not-for-profit sector, the future of brands is also inextricably linked
to the future of society.
This chapter examines some future trends and predictions, both inbusiness and in broader society, and looks at how brands may affectand be affected by those changes. It also explores the categories andcountries that seem likely to yield some of the world’s greatest brands inthe future, and makes observations on what brands of all kinds willneed to do to be successful.
But first, it may be useful to recap on the main themes and arguments
outlined in previous chapters:T Branding has been in existence for hundreds of years and has

developed into a modern concept that can be applied to anythingfrom products and services to companies, not-for-profit concernsand even countries.
 Well-managed brands have extraordinary economic value andare the most effective and efficient creators of sustainablewealth. Understanding the value of a brand, and how to create
more value, is essential management information.
 Brands can also have a critical social importance and benefit inboth developed and developing countries. This applies as muchto commercial brands as not-for-profit organisations.
 Most of the world’s greatest brands today are American owned,
largely because of America’s “free” political, commercial andsocial systems. But the knowledge and practice of what creates
great brands can be (and is now being) applied around the world.
 Every brand, if it is to be successful, needs a clear positioning,
expressed through name, identity and all aspects of products,
services and behaviour. For corporate effectiveness and227

BRANDS AND BRANDING

efficiency, the brand and its positioning should be used as a clear
managing framework for portfolio management and business
unit relationships.
 Increasingly, brands require a distinctive customer experience inthe round. Indeed, increasingly a brand is that experience, notleast through the behaviour of its people. The brand should be
the central organising principle for everyone and then every
thing.
 Every brand needs a strong creative idea to bring it to life throughvisual and verbal identity. This creative process needs not only
innovation and imagination, but also the courage and conviction
to carry it through.
 The strongest brand communications may work at the levels of
information, fame creation and by creating (often unconscious)
associations. Those elements which are harder to measure andjustify are no less important; in fact, they are often the mostimportant elements.
 Public relations for brands will succeed only if they are based on
the brand promise and the internal reality of the company;
people have become increasingly sceptical, and in a 24-hour news
culture, organisations have nowhere to hide, either inside oroutside.
 If a company is going to invest in a brand long term, it must giveits “identifiable distinctive features” adequate legal protection;and it must enforce that protection vigorously, increasingly on a
global basis.
 Leading global brands can, and should, help the wider public
understand the benefits of globalisation and free trade. But they
can do this only if they open up, behave well and collectively
educate about their benefits. They must also ensure they continue
to innovate.
 Brands need better and socially broader measures of success.
Corporate social responsibility should be about genuinely solving
problems, not just about brand reputation management.
 Asia shows every sign of becoming a global brand generator, notonly in terms of cost advantage in manufactured product-brands,
but also because of its heritage in areas such as personalised
services and holistic health.
 In a “globalised” world, nations need to compete with each otherfor the world’s attention and wealth. Active and conscious nation

228

THE FUTURE OF BRANDS

branding can help them do this, and at its best, it can be argued, it
presents an opportunity to redistribute the world’s wealth more
fairly in the future.
If the last theme in particular makes anyone baulk, it is worth
remembering the importance that China is attaching to growing its“branded commodities” as its way forward in the world and “so as tobenefit the world’s people”1. While many western nations are fashionably wringing their hands about the nature of capitalism, and aboutbrands as their highest profile manifestation, developing nations arecoming to see branded businesses, and indeed their own images, as theiropportunity for development and more stable wealth and economic
control. Whether it is ironic or not, western consumers’ constant search
for novelty and authenticity may also help ensure that the “newer”
economies have an interested audience for their propositions.
But before reflecting on whether and how the main themes of thisbook may be carried forward in the future – and before speculating on
the provenance of the world’s most successful brands of the future – itis worth considering the broader future context.

The future thing
The future certainly isn’t what it used to be, but nevertheless a recent
article by Martin Rees, the Astronomer Royal, made rather depressing
reading.2 The opening line was:I think that the odds are no better than 50-50 that our present
civilisation on earth will survive to the end of the century.
He puts this down to the potential for “maverick” misuse of science
and/or weapons of mass destruction. In the meantime, of course, there
is always the possibility of super-volcanoes or asteroid hits.
At the other extreme, Watts Wacker, an American futurist, made itpart of his working philosophy to encourage organisations to develop“500-year” plans. This was meant to be symbolic rather than literal, butdoes rather stretch the point.
Steering a slightly less radical course either way, it was interesting toconsider a range of predictions for the year 2025, drawn from various
think tanks and futurists.3 These included market wars over ice on the
moon; widespread “designer” babies; a truly pregnant man; a derelict
Silicon Valley, overtaken by technologies such as quantum, optical and229

BRANDS AND BRANDING

dna computers; and one which would bring Rees’s doomsday scenariorather closer, widespread cyber-terrorism.
You only have to look at a random selection of sci-fi films and futurology books to understand the dangers of publishing-specific predictions. Even as recently as the mid-1990s, Nicholas Negroponte wasreportedly predicting that by the year 2000, more people would beentertaining themselves on the internet than watching tv networks. We
shall see whether Toshitada Doi, president of Sony’s Digital Creatures
Laboratory, is right in saying that robots will eclipse pcs in productgrowth worldwide within 30 years (or even within 10–15 years).4 However, as Alvin Toffler says in his introduction to Future Shock, “Theinability to speak with precision and certainty about the future … is no
excuse for silence.”5
It is obviously important to try to understand general trends and possibilities in scientific, economic and social terms if we are to plan andadapt brand futures, whether for new or for existing brands. Even thestrongest brands today can get stuck in a complacent time warp, overtaken by new and baggage-free competitors.

Future brand issues
From past trends, the odds might seem in favour of the top brands today
still being up there in 25 years’ time. As the introduction to this bookpointed out, over half of the 50 most valuable brands have been aroundfor more than 50 years. However, it is difficult to see how past performance will give quite so much reassurance in the face of the extraordinary changes we are likely to see in world power and economics in thenext ten years.
The most successful technology and telecommunications brands
have already shown how quickly they can progress if they read and act
on consumer and business trends in the right way (look at Microsoft,
Nokia and Intel). Their challenge is to maintain their position and sustain their value. To do this, they will have to continue to innovate and,critically, to deepen and extend their brand relationships with customers well beyond the level of technological prowess; for long-termvalue, brands need emotional as well as technological appeal. Indeed,
they will have to invest in their brand as their major sustainable competitive advantage.
It is not unreasonable, for instance, to imagine that a new killer application will emerge from somewhere like Bangalore in the near future.
Nor is it unreasonable to suppose that the service and branding skills

230

THE FUTURE OF BRANDS

required to build that proposition into a sustainable brand will havedeveloped to such a degree in India itself that global brand status iswithin reach. What is more, the “skill cost” difference between India
and America or Europe, which has already seen global organisations
such as Citibank and ge outsourcing their services to the subcontinent, means that price differentials will make their brands even more
attractive. For comparison, look at the wages differential around theworld: in 2003, the minimum wage per hour was $5.15 in the UnitedStates and £4.20 in the UK, equivalent wages in China 18 pence (29cents) and in India 7 pence (11 cents).6 As far as service expertise isconcerned, a recent study by Deloitte Research concluded that in thenext five years, 2m jobs in western financial institutions will be
moved overseas, which means that around $356 billion worth offinancial services activity will move away from first-world
economies. Established brands will indeed have to continue to leverage their trust and heritage, even while the core of their own service
offering is on a passage to India to cut costs and satisfy Wall Street
and the City. To take up the opportunity properly, however, India
will need to work on its nation brand in terms of reliability of infrastructure and the taint of corruption.
With 1.3 billion consumers, China is the world’s biggest potential consumer market. It is currently difficult to attend a conference on world
trade and financial issues without speakers speculating on the extraordinary impact China is having and will continue to have. A study by theEngineering Employers’ Federation in the UK7 suggested that one-thirdof manufacturing firms were considering shifting production to China.
A vivid case study is Hornby, a venerable British company, manufacturer of classic toy train sets, owner of the Scalextric brand and recently
brought back to fame by the Hogwarts Express featured in the Harry
Potter films. In speaking about the advantages of moving production to
China, the ceo says:
The strain on the bottom line began to ease immediately. We
were able to use the savings to increase the quality and detailsof the models so that sales began to pick up.
Essentially, the company retained just the designers and managers at its
UK head office in Margate, reducing the head count from 550 to 130,even though some observers were sceptical of the long-term viability ofseparating innovation and production.

231

BRANDS AND BRANDING

One other thing Hornby’s ceo outlined was his view of the fate of
the company had he not moved production: “Hornby would haveclosed, or been taken over by a Chinese company, if we hadn’t moved.”
This was no idle boast in the light of the case of Haier. Almost 20 years
ago the Qingdao Refrigerator Plant bought the production-line technology from Liberhaier, a German company, and used this as the basis for
its brand name. As noted in the previous chapter, Haier is now theworld’s second biggest refrigerator brand. How much of this is to dowith the ‘borrowed’ belief among some buyers that they are of German
origin is debatable.
This kind of false provenance, whether real or assumed, is hardly a
new idea. In the electronic goods category alone, it has been customaryfor UK electrical retailers to give their own-label products Japanesesounding names, as this would give better quality associations than
British-manufactured electrical goods. Think also of Haagen-Dazs, Estée
Lauder, Hugo Boss and Sony as brands with a name at odds with thereal country of origin and ownership. Clearly, although provenance,
and authenticity in that provenance, is important in such categories as
luxury and cars, so much depends on how the brands are built andmanaged. Many of the world’s most valuable brands now transcendtheir country of origin. A Chinese company such as Legend computerswill need all these world-class branding skills if its global ambitions areto be realised. As we have discussed before, its ambitions to become theworld’s biggest pc manufacturer within ten years will not necessarily
make it the world’s most valuable pc brand. However, there is a particularly strong Asian brand case study that may serve to inspire them forthe future.
Samsung, from South Korea, is one of the most spectacular global
brand success stories of recent years. From a brand value of just under$2.5bn in 1997, it grew to almost $11bn in 2003, and seems likely to continue its success. It is the reason for its success that is of interest here. In
the mid-1990s, Samsung’s managers realised that they would be on thecommodity and low-price road to perdition if they did not develop theirown brand. They saw a real opportunity in the digital platform,
invested heavily in premium quality innovation and r&d and, mosttelling of all, invested in their own brand rather than be condemned tothe uncertainty of oem8 status indefinitely. They built brand awarenessaround the world, and resolved to use their brand value (rather than juststraight financials) as a key performance measure. As the company’s
president and ceo said at the time:232THE FUTURE OF BRANDS

Competing successfully in the 21st century will require morethan just outstanding product and quality functions.
Intangibles such as corporate and brand image will be crucial
factors for achieving a competitive edge.
This concern for other measures, and ways of measuring performance to ensure that everyone in a company continues to build brandvalue rather than trading on it, is perhaps something that more westerncompanies, particularly publicly quoted companies, and the equity markets need to reflect on.
Brand America may appear to have taken a series of body blows in
the early years of the 21st century. However, while it might be true tosay that there are slightly fewer American-owned brands in the top 100
today compared with a few years ago, this is as much to do with market
changes and self-inflicted corporate wounds as American heritage. Morethan 60% of the world’s most valuable brands are still American owned.
Despite opinion polls and anti-American demonstrations, consumers
can be radical at the research questionnaire and reactionary at thecheckout.
However, other countries are beginning to learn the global brandgame, and companies such as Coca-Cola and Nike will need to keep onreflecting their sensitivity to local cultures and habits in their management and marketing approaches. It is interesting that, whereas for the
past 50 years America itself has been a strong brand, standing for freedom and lifestyle aspiration, increasing familiarity and the spread of
democracy have meant that these previously “magic” qualities have losttheir cachet. American-owned brands will have to work that muchharder on more imaginative positionings, operations and communications for their brands if they are to withstand the challenge from allcomers.
An interesting battle of retail brands and operating philosophies ispotentially emerging between the mighty Wal-Mart and Tesco, a UKbased retailer. In many ways, Wal-Mart is the archetypical Americanbusiness success story. It has in Sam Walton a founder with a distinctive
home-cooked philosophy, with a strong service and moral ethic, and azealous evangelism for giving people American-style life opportunities.
Wal-Mart’s expansion internationally has been cautious so far, as has its
behaviour around its purchase and management of the Asda brand in
the UK. While the retail giant has made a simple philosophy of low
prices and genuine customer service work well in the United States, and233

BRANDS AND BRANDING

has made much of its respect for employees, there are perhaps lessons tobe learned from the innovation, own-brand building and customer relationship management of the best UK grocery retailers. There are several
margin-point differences between the average grocery retail businesses
in the UK and those in America. While some of this difference is down to
the dominant position of major retail chains in the UK, it is also becauseof their success in building their own brand values, and using their ownbrand products and services to sustain their quality image, rather thanjust being price fighters against manufacturer brands. Tesco is now not
only the UK’s number one retailer and one of its most respected companies; it is also the world’s largest online grocer, and its joint venture with
iVillage.com has created the largest women’s online destination in theworld. Out of the ten countries in which it operates, Tesco is currently
market leader in six. Its stated core purpose, to “create value for customers
to earn their lifetime loyalty”, has driven its ability to extend its brandwell beyond grocery into banking, health care and mobile telephony. It isa brand that is trusted by people in whatever area it is operating.
This ability of a strong brand to transcend categories, and to betrusted by consumers in whichever category it chooses to involve itself,
would seem to be an important property of the world’s greatest brands
in the future. In a hyper-competitive, over-communicated and complicated world, people will increasingly want and need to simplify theirpurchases and time management. What is more, in a blurring physicaland virtual world, any brand will have the ability to be a powerful
medium and a power retailer – if only in virtual space. Trusted brands
provide ideal navigation for consumers across sectors, and as thestrongest will be able to leap into categories without having a previous
product or service track record, no brand will be sacred in its marketplace any more. Although it has its financial challenges, the Virgin brandis another good example of this “leaping” ability. It has a strong visionand values around being “people’s champion”, innovative and irreverent, and through popular support has managed to transcend markets
from airlines to cosmetics, from financial services to mobile telephony,from soft to hard drinks and many more.
The issue of category-defying life brands is also relevant when looking at those new or growth categories that would seem most likely to
produce strong brand growth in the future. These include: health and well-being, including more holistic and organic
lifestyles;

234

THE FUTURE OF BRANDS

 leisure, entertainment and “new adventure” experiences; physical and emotional security; services for a new generation of the “new old” (a critical trend inindustrialised countries); lifelong education;
 information and lifestyle management (relevant to the predictionof Sony’s “personal robots”);

 biotechnology and genetics.
These areas could yield entirely new global brands in the future; it may
well be that the most valuable brand in the next 25 years has not been
invented yet. However, it is equally possible that an existing, trusted
brand may extend or cross into these new areas. As part of this, the blurring of the online and offline worlds (a distinction that is already barely
recognised by global teenagers) will mean that any brand can become
powerful both as a medium and as a retailer, virtual or otherwise.
Current product-based brands will find it harder than service or retailbrands to deepen and broaden their relationships with their audiences.
This is not just because they are having to invest so much of their marketing support in retail distribution, rather than spending it on consumer
communication. It is also because in their current form, they lack theability to control the total customer experience, and so engage theiraudiences as fully as they would like. Chapter 6 of this book highlights
the increasing importance of experience in building brands, and weshould expect to see in the future many more “manu-retailers”: productbased brand companies developing their own retail experiences anddirect relationships with their consumers, both offline and online.
Unilever’s experiment with “myhome”, a home cleaning and laundry
service, was interesting in its extension of Persil and Cif as service
brands. Although it did not progress beyond its test market, it nevertheless demonstrated the company’s interest in developing core brands
beyond the product form. To facilitate this process of concentration on
resources, innovation and investment behind its most successful
brands, Unilever has been culling its smaller and weaker brands inrecent years, either selling them or dropping them. As other conglomerates have been doing the same, an interesting possibility is on the cards.
Not only will we continue to see further brand consolidation andcorporate “musical chairs”, but some of the brands that are being soldoff could end up in the newer economies, fired up by entrepreneurial
spirit and a new angle for selling. Think of Haier many times over.

235

BRANDS AND BRANDING

Other areas of brand activity that are likely to increase in the future
are co-branding (for example, Sony Ericsson) and celebrity branding (asin current examples like David Beckham and Jennifer Lopez). The challenge for the former is to generate clarity about the joint brand proposition (never easy in partnership), and for the latter, to identify how to
generate long-term sustainable value after the flush of celebrity fades.
It is also interesting as a trend that major corporations such as Marsand Estée Lauder have either launched or acquired brands which feellike explicit “social enterprises”, and have allowed them to operate withno obvious brand connection with the corporate owner. Mars acquired
Seeds of Change in 1997; it had been launched in 1989, with a stated purpose of preserving biodiversity and sustainable development. Estée
Lauder later acquired Aveda, a brand connecting “beauty, environment
and wellbeing”. At a conference shortly afterwards, Leonard Laudersaid that Estée Lauder itself was committed to phasing out synthetics
entirely, following the lead of Aveda. Using new ventures of this kind as
operating test-beds for new business principles indicates that major corporations recognise that business may have to be conceived and conducted in rather different ways in the future.
Another area to mention for brand growth is the ngo (nongovernmental organisation) sector. When national governments, forwhatever reasons, cannot or choose not to act, non-governmental andnot-for-profit organisations can play the role of “guardian brands”. A
recent example is the role Oxfam has played in the developing-world
coffee crisis, where coffee farmers in the poorest countries are facing
falling prices and new levels of poverty. In a 2002 report, Oxfam
demanded that the multinational companies involved in coffee purchasing and marketing demonstrate a “long-term commitment to ethicalpurchasing”.9 In the future, raising funds will be as much of a challenge
for such organisations as it has always been. To avoid the danger of
appearing compromised by expedient corporate partnerships, theyshould perhaps think more about “selling” or licensing their intellectual
property about best practices in ethical processes and measurement.

Further brand management considerations
In maximising and sustaining the value of brands in the future there
needs to be more focus on: Understanding the value and value drivers of a brand. As canbe seen from the Samsung case, a focus on brand value and236

THE FUTURE OF BRANDS

measuring performance on the basis of the brand value added
can build momentum and create sustainable growth. It is also
crucial management information for mergers, acquisitions anddivestments, which will continue in the future as markets shakeout and consolidate. Few mergers currently deliver long-term
shareholder value, largely because of overemphasis on financials
and practical operations. Greater focus on brand value would
help mergers succeed – as well as generating real organic growth.
 Clarity of brand positioning. Clarity of vision, values andpositioning overall are often given insufficient attention inpractice. The majority of corporate and brand visions areinterchangeable, bland and viewed with cynicism. In an overcommunicated world, lack of clarity will substantially reduce
effectiveness and efficiency; and complex brand and sub-brandstructures without a real audience rationale will reduce this still
further. Clarity of strategy is also one of the leading criteria bywhich companies are judged.
 Brands as total experiences, and as central organisingprinciples, rather than just products and logos. The success ofexperience-based brands at building deeper customer
relationships at the expense of solely product-based brands
argues strongly for every brand to think about its total “chain ofexperience” – from visual identity to advertising, product,
packaging, pr, in-store environment – and increasingly round-theclock presence and availability online. Technology will provide
the opportunity to build an even greater sensory experience into
brands through touch, smell and sound. Whatever emerges,
distinctive value can and will need to be added at every stage ofthe experience, or at the very least, not lost.
 More compelling and more imaginative expressions of abrand’s identity and brand communications. Senior executives
may not feel entirely comfortable in this area, but the ability to
break through brand proliferation and communications clutter
depends on imaginative and innovative creative expression. In
the developed world, audiences are knowledgeable and savvy
about marketing, and will increasingly “edit out” communications
that they find boring or irritating. Imagination will need to be
applied not just to the creative message, but also to the medium.
Product placements in editorial and appropriate sponsorship ofevents, programmes and computer games will become more

237

BRANDS AND BRANDING

important. In particular, young people around the world havehigh expectations from brands, and are increasingly difficult toreach and satisfy.
 The need for internal and external operations to be aligned –and transparent. In an all-seeing digital world, and in a sharper
business environment where employees at all levels can beambassadors or saboteurs for the company’s reputation, there
really will be no hiding places any more. Organisations will haveno choice but to be transparent in their dealings and fulfil theirpromises, or to have transparency forced on them. On a morepositive note, numerous studies have confirmed that investment
in a company’s employees, and their good treatment, translates
into significantly better customer satisfaction. Customer
satisfaction and loyalty are, and will be, the drivers of long-termsustainable brand value.
 Rigorous legal protection around the world. It is estimated that
9% of world trade is counterfeited.10 Although international law isincreasingly being upheld, even in the previous counterfeiting
capitals of the world, it is likely that while there are still brands tocopy, there will be willing makers and buyers of copies. Brand
owners must use the full weight of the law, quickly and publicly,
to prevent value loss and degradation. Brand valuation, which
can demonstrate how much economic loss might be attributed topassing off, is an effective way of supporting cases such as these.
 Corporate social responsibility as a core corporate
responsibility. Corporate social responsibility (csr) seems to be
an overused buzz term in too many organisations today, and awhole new industry has grown up around it. Although goodintentions may be there, all too often organisations look at csr as
an insurance policy, or a more sophisticated form of causerelated marketing, rather than as core to their operations. Many
responsible companies produce elaborate csr reports, including
social and environmental performance. However, it is necessary
to ask whether the basic principle of separate reports is the rightone, or whether there should be a more integrated and central
way of dealing with these issues in the future if we are going tohave the kind of world we would all want. Or at least to mitigate
the pessimistic scenarios of environmental destruction andterrorism breeding in areas of poverty and exclusion that wemight all fear.

238

THE FUTURE OF BRANDS

For those who would say “but what has this to do withbusiness and brands”, the fact that brands have the power tochange people’s lives and indeed shape the world we live in is nota fanciful notion, but a demonstrable fact. Brands haveextraordinary economic power, often transcending national
governments, and are able to connect with people’s lives,
behaviour and purchases across borders. If there are those who
say that business’s only concern should be to make a profit, thenthis would not only to be missing the point about csr at its basic
level – that csr by definition demands more than the profit
motive – but also missing out on opportunities for brandleadership in the future. From more than 3,000 studies of brands
around the world, leadership is the characteristic most closely
correlated with the strongest long-term value.
Any brand seeking to succeed and to be most valuable in the future
will need to think and behave like a leader: at the basic levels of product and service distinction, and at the more emotional levels of creativity, values and core social contribution.

The future of brand leadership
It is appropriate from time to time for governments, businesses andindeed any organisation to ask themselves what they are there for. Procter & Gamble recently restated its core purpose of improving the lives of
its consumers; Samsung talks about creating superior products and services and “contributing to a better global society … to the prosperity ofpeople all over the world – a single human society”; and the UK government published its “quality of life” indicators in 1999 in answer to challenges on how to create a more sustainable society.
It is easy, but probably not helpful, to be cynical about these kinds ofstatements. Ironically, one of the brakes to progress on environmental
and social issues for companies has been a fear that their actions will beinterpreted cynically. Although the stick is an important incentive forcompanies not to misbehave, opinion-forming media might think sometimes about the carrot of encouragement for corporations trying to do
the right thing and struggling to balance the interests of shareholders,consumers and the public at large.
This balancing act also leads on to discussions about how businesses(and indeed governments) are measured and rewarded, as well as how
to truly measure the wealth and well-being of society in general. A recent

239

BRANDS AND BRANDING

study by the Future Foundation concluded that the increase in wealthand possessions in the UK was poorly correlated with happiness,10 and
the UK government’s Sustainable Development Commission found thesame in its study of prosperity.11 While it is easy to sit in the wealthy
west and philosophise about these things when people in developing
countries are dying through lack of basic services, it does neverthelessraise questions about the goal of development. Will our prioritising of
economic success in preference to any other be as appropriate in the
future, in either developed or developing countries? There are several
references to alternative, more broad-based measurement systems forbusiness and society in this book. These would give a broader base to
the priorities of ceos and governments.
It would of course be better for organisations to take an active lead insetting standards in different markets. What can be termed a “ leader
brand” is not a brand leader in the old-fashioned sense, reflecting scale
and muscle alone; rather it reflects a newer, restless and agenda-setting
leadership across all areas of philosophy and operations, inside and out.
Leader brands also need to take it upon themselves to explain the wider
benefits of branding, and increasingly show sensitivity to local cultures,
so that they continue to have licence to operate (and hopefully be welcomed) in even the most difficult parts of the world. As discussed
throughout, brands can be uniting influences, and powerful social andeconomic developers. It is important for all brand owners and influencers to manage their brands well, and as a discernible force for good,
and to ensure that they help people understand the benefits in a more
informed way.
The balance of this book has been quite unashamedly “Pro Logo”,
but there is a conditional “Pro” here. Brands will continue to succeed ifthey deserve it, and, since the future of brands is the future of sustainable business and fundamental to developments in society, it is important to us all to see that they do.

References
1 Chinese Vice Premier Wu Bangguo, reported in the China People’s
Daily.
2 “The end of the road?”, Sunday Times, 20 April 2003.
3 “Chronicle of the future”, Sunday Times.
4 “Sony re-dreams its future”, Fortune, 10 November 2002.
5 Alvin Toffler, Future Shock, Bantam Books.
6 Quoted in “The great Indian takeaway”, Sunday Times, 8 June 2003.

240

THE FUTURE OF BRANDS

7 Ibid.
8 Original equipment manufacturer.
9 “Mugged: poverty in your coffee cup”, Oxfam, 2002
10 “High anxiety screws up our hi-tech heaven”, Sunday Times, 27 July
2003.
11 “Re-defining prosperity”, Jonathon Porritt, Chair of Sustainable
Development Commission, June 2003.

241

IndexNumbers in italics indicate Tables;
those in bold indicate Figures.

A“3” 116
3Com 92
3i 119, 120
3M 16
7 Series 66“above the line” activities 127
Accenture 39, 91
accountability xiii, 148
stakeholder 25
accountancy firms 121, 187
accounting 34
Accounting Standards Board (UK) 32
acquisitions 19, 27, 30, 34, 43, 44, 164
AdAge 139
advertising xiii, xiv, 23, 35, 99, 108, 111,
124,
125, 127, 237
advertisements’ loss of status 180
campaigns 180
how it works 133–5
language 138
role of 131
short-term effects of 130
advertising agencies 15, 25, 106, 127–8
Africa 176, 177, 188
AIDS crisis 192
economy 125
agility 145
agricultural supply chain 54–5
AIDS 58, 59, 188, 192
airline industry 97, 98, 103–4, 122–3, 174,
203, 207
Akasie, John 30
Akzo Nobel 120
Ala brand 50
alignment 9, 99, 111
Altria 17, 186
Aman 203
Amazon.com 100, 105, 167“American Brandstand” billboard 182
American Express 15, 39, 67
American Journal of Public Health 186–7
Amnesty International 62242

amortisation 30, 32
ANA 100
Andersen 3
Anheuser Busch 132
animated marks 160
anthrax virus crisis 150–52
anti-brand campaigns xiv, 185anti-capitalism 1
anti-globalisation xii, 3, 15, 47
Apple 51, 87, 118
Arab countries 177
Ariel 81
Aristotle 133
Asda 59, 233–4
Asia
Coca-Cola products in 153
economy 125, 199
emergence of Asian brands 5
signs of becoming a global brandgenerator 228
tiger economies 199
see also under South-East Asia
associations 133, 134, 135
Aston Martin 29
AT&T 16, 117
audits 111
Australia: brands on the balance sheet
30, 32Austria-Hungary 14
automatic teller machines (ATMs)
23
Aveda 236
Aviva 17
Avon cosmetics 59
awareness 65
Azerbaijan 189

Bbalance sheet, brands on the 30–32,
44, 56balanced scorecard xiii
Ban Krua silk 205
Bangalore 216, 218, 230
Bangkok 204, 205
Bank of England 23
banking 22–3, 97, 104, 121, 174, 191
Banyan Tree resorts 203, 204, 210

INDEX

Barilla 217
Bass, Saul 117
Bass beer 15“Red Triangle” trade mark 15, 158
Beckham, David 236
Bee Cheng Hiang sweetmeats 200
behaviours 143, 144, 147, 150, 154“below the line” activities 127, 128
Ben & Jerry’s ice creams 115, 187
benchmarking
competitive 38
historical 65
Bentley 19
Bernbach, Bill 139–40, 141–2“Best Global Brands” league table 29
Bestfoods 19
Bezos, Jeff 105
Bhopal disaster, India 187
Big Brands, Big Trouble (Trout) 180
Bilbao 216
billboards 179
Bintan Banyan Tree resort 204
Birds Eye frozen foods 146
Biscuit, Cake, Chocolate andConfectionery Alliance 194
Blackmores 203
Blackston, Max 137
Blair, Tony 220
BMW 20, 66–7, 67, 68, 114, 181
Body Shop 61, 188
Boh Tea 200
Bonia 206
Boston Consulting Group model 82
Bovis 119
BP 39, 60, 117, 120, 187, 188–9, 194
BPR see business process
re-engineering“Brand America” xiii, 4, 5, 233
brand architecture 91–4, 92, 109
brand communications 127–42
evaluating 129
how do brand communications
influence behaviour? 130–40
by communicating information
130–31by creating associations that will
influence behaviour 133–5
by creating awareness, fame,
familiarity or “salience” 131–2
by creating involvement 133
digital and analog
communications 136–40
integration 135–6

how do communications build
brands? 128–30
longer-term effects on brandbehaviour 130
stimulating short-term behaviour
128–9
brand consultants 8brand discount rate 38
brand equity xii–xiii, xiv, 18, 73, 91
brand experience 97–111
the brand management iceberg
100–108
clear proposition 100–102
people 102–4
process 104–5
product 105–7
redefine 107–8
the holistic view of brands 98–100
using the brand management
iceberg 108–111
communicating the brandexternally 110–111
communicating the brandinternally 110
continuing management, audits
and redefinition 111
creating the brand platform 109
customer experience audit 108–9
customer experience design 110
brand identity see visual and verbal
identitybrand integration 135–6
brand investments 42
brand leadership, the future of
239–40brand management 7, 111
exploit the financial potential ofyour brand 24
honour your stakeholders 23–4
long-term development and 95
protect your brand 23
strategic 39, 42
treat your brand as an investment,
not a cost 24
understand that successful brandmanagement is a complex task 25
brand management iceberg see underbrand experience
brand measurement xiii, 8
brand migration 42
brand name xiv, 109, 157
change of 16–17
creating 89–91, 90

243

BRANDS AND BRANDING

the most important element of thebrand 16brand owners
and communications 129
and customer satisfaction 21–2
and legal protection of brands 238
and loyal buyers 18
quantifying the value that brands
represent 65
social reponsibility xiv, 15, 33
and underlying appeals 18
brand performance 42, 65–75
brand-building skills 74–5
most leading brands are American
67–8
most leading brands arecommodities 68
rankings 65–6, 66
recovering lost ground 73–4
what great brands share 66–8
a central organisational principle
67
a compelling idea 66
a resolute core purpose andsupporting values 66–7
what makes brands great 68–71
alignment of internal andexternal commitment to thebrand 70–71
an ability to stay relevant 71
consistency in delivering on theirpromise 69, 69
distinctive positioning andcustomer experience 70
superior products and processes
69–70
what makes brands leaders lose
their way 71–3
brand platform 86, 87, 87, 90, 95, 109
brand portfolio 42
brand positioning 79–95, 109, 143, 144,
154, 237
brand architecture: organising todeliver value 91–4, 92
the brand positioning process 81
long-term development and brandmanagement 95
modelling the opportunity for
positioning 82–6
reflecting brand positioning in thename and broader identity 89–91,
90
stakeholders 81–2

244

taking up a position: the brandplatform 86, 87
a working example 87–9, 88
brand promise 102, 103, 108, 109, 110,
145, 149, 155, 228
brand protection 157–68
copyright 165–6
domain names and the internet 167
registered designs 166–7
trade marks 158–65
classification of goods andservices 160
creating a new mark: searching
163–4
maintaining a trade markportfolio 162
passing off and unfair
competition 165
record keeping 162–3
renewals 162
trade mark portfolio audit 164–5
watching services 162
what should be registered?
159–60where should registration besought? 160–61
why register? 161–2
brand returns 42
brand royalties 43
brand strategy 91, 95, 221
Brand Strategy magazine 189“brand strength score” 38
brand support xiii–xiv
brand valuation 27–44
applications 39, 42–3
financial transactions 43
strategic brand management 39,
42
approaches to 34
brands on the balance sheet 30–33
evidence of brand value 27–30,
238
financially driven approaches
brand value calculation 38
comparables 36
competitive benchmarking 38
cost-based 35
demand analysis 38
economic use 36–7, 44
financial analysis 38
market segmentation 37
premium price 36
process 37

INDEX

redefining brand value 193–4
research-based approaches 34–5
sample brand value calculation
40–41
the social value of brands 33–4
sources of brand value 69, 74
brand-building skills 74–5
branding
explosion of 20–23
corporate branding 20–21
services branding 21–3
Brand’s 202, 210
brandsas bullies xii, 185
as business assets 18–20
challenger 206–7
definitions 13
economic importance of 2–3
elements of the brand 15–18
creating an indelible impression
17–18
intrinsically striking 15–17
established (Asia) 207
history of 13–15, 48–9, 116
most valuable 100 brands 3
power of 5, 47, 56, 58, 60–61, 186, 197
revitalised 202–3
social and political aspects 3–5
understanding the role of 5–8
lack of understanding 6
ownership 7–8
tangible and intangible elements
8terminology 6–7
use of the word in three senses xii
Branson, Richard 22, 80
Brazil: and socially beneficial
innovation 50
Brent Spar oil platform, North Sea 54
brewing industry 24
British Aerospace 188
British Airways 122–3
British America Tobacco 188
BritishIndia 206–7, 210
Broadway Café, Kansas City 172
Browne, John 188
BT 102, 120
Bud Light beer 132“Bud Light Institute” 132, 136
Budweiser 64, 138
Buitoni 94
Burberry 182, 217
Burger King 32

Burson-Marsteller 187
Business Ethics Magazine 191
business process re-engineering (BPR)
104business strategy 8, 119, 145
business-to-business sector 20
buyer/seller contract 18

C
Cabayo, near Manila 178
Cadbury Schweppes 31
Cadbury’s 49, 188, 189, 194
Café Direct 61, 190, 197
Camel 16
capitalism 33, 48, 49, 171, 176, 229
crony 210
Carlson Marketing Group 99
Carphone Warehouse 90, 100, 102–3
cash flows, forecasting 18
category identity 120, 121
Cathay Pacific 203
cattle brands 116
cause-related marketing (CRM) 189
celebrity branding 236
CEO: need for CEO attention to brands
7–8“CEO test” 80
Cerebos Pacific 202–3
challenger brands 206–7
Chanel 199, 217
charities 63–4, 115
Chase, Edna Woolman 205
Chenault, Ken 148
chief marketing officer (CMO) 180
child labour 55, 60, 194
China 177
government approval of “branded
commodities” 1, 229
and direct mail 176
economy 125, 218
and television 128
wages 231
world’s biggest potential consumer
market 231“China’s Rising Famous Brand”
symposium (Beijing) 218
choicediversity of 17–18
influence of brands 28, 37
limiting 33
Christian Aid 63
Church of England 20
Ciba 121

245

BRANDS AND BRANDING

Cif 235
cinema 127
Cisco Systems 92, 192
Citibank 231
citizenship 146, 152, 154
Clifford Chance 106
co-branding 24, 42, 236
Co-operative Bank 61
Coca-Cola Company, The xiii, xiv, 3, 4, 5,
15, 18, 19, 21, 27, 28, 29, 29, 44, 47, 52, 59,
60, 64, 67, 68, 98–9, 117, 127, 147–8, 152–4,
158, 159, 173–4, 175, 180, 186, 217, 233
Colcol, Jovy 178
Colgate-Palmolive 67
Collins, Jim: Good to be Great 73
colours 114, 115, 117, 124, 136, 157, 159, 211
Columbia Broadcasting System (CBS)117
commitment 99
communicating the brand 110–111
communications
digital and analog 136–40
effective 141
environment 93
Community Trade Mark Office see
Office for Harmonisation in theInternal Market companies’ bookvalues 27
Compaq 73
comparability 36
Compassion in World Farming 54
competitionon the basis of performance andprice 33in brands 4, 172, 179
global 174
local 186
pharmaceutical industry 21
stifling/increasing 33
competitive advantage 6, 20, 43, 79, 110,
149, 195
competitive assessment 65
Concorde 99, 123
Conference Board report: Engaging
Employees through your Brand 148
confidence 88–9, 90, 216
conflict 196
Consignia 17, 98, 125
consistency 99, 107–8
consumer groups 175
consumer protection 48, 51–3
consumer sector 20
consumerism 171, 176

246

consumers
corporate 36–7
individual 36
myth of the ethical consumer 189–90
needs and desires 57
purchasing behaviour 35
see also customers
Container Corporation of America(CCA) 117
Cook’s tours 15“Cool Britannia” 220copyright 23, 165–6, 168
corporate branding 20–21
corporate governance 8, 24
corporate identity 113, 117, 118, 120, 122corporate social leadership 48, 56–61,
58, 59corporate social responsibility (CSR) 24,
48, 53–6, 54, 185, 187–9, 190–92, 194,
195, 228, 238–9
corporate value 33
corporations
average life span 28
need to protect brand value 55
see also multinationals
cost advantage 228
cost of living 51
Cowley, D., ed.: Understanding Brands
79
credibility 74, 83, 91, 92, 94, 154, 155, 203
crime 57, 59, 194
Crocodile 206, 211
Crooks, Ed 197
Crunch 94
cultural relations 221
customer relationship management(CRM) xiv, 104
customer service 122
restructuring 92
customer value xv
customers
data on 180
demand 36–7
expectations 23, 72, 102, 108, 217
experience 105–7, 111
loyalty xiii, 16, 18, 37, 48, 49, 52,
69–71, 203, 210, 234, 238
misleading 53
needs 89, 145
ladder of 83–4, 85
satisfaction 20, 22, 72, 97, 144, 150,
238
see also consumers

INDEXD
Daewoo 218
Daft, Doug 148, 152–3
Damasio, Antonio: Descartes’ Error 134
Danone 30
Darkie toothpaste 201
DDB 132
Brand Capital survey 131
De Beers diamonds 171
Dell 73
Deloitte Research 231
demand analysis 38
designers 25, 116–18
designs, registered 166–7
developing countries
corporate behaviour in 63
and globalisation 176–8
view of branded businesses 229
Diageo 8, 17, 91
Diesel 16
differentiation 73, 74, 83, 86, 120
Dior 217
direct mail 127, 128, 176discounted cash flow (DCF) 32
disease 196
Disney xiv, 29, 67, 87, 180
distribution 25
diversity 122–4, 148
Dixons 216
Dockers Khakis 186
Doi, Toshitada 230
Dole Food Company 191
domain names and the internet 167
dotcom companies 120
Dove soap 146
Dow Chemical 187
downsizing 23
drug companies see pharmaceuticalindustry
Dubai 207
Duke Energy 39
Dulux 136
Dunhill 171

E
e-mail spam 180
East Asia 55, 199
East India Company 207
easyGroup 97
easyJet 97
economic instability 196
economic liberalisation 200
Economist, The 1, 72

Econtext 188
Edsel 114
education 48
see also training
effectiveness 89
Egg 22Ehrenberg, Andrew 131
Electrolux 52
employees
attitudes 149–50
behaviours 144
pride 146
recruitment 103–4, 144, 181
retraining and behaviour 123
rewarding 102
satisfaction 23–4
stability of employment 4
training 35, 102, 103, 108, 110
value 27
End of Advertising as We Know It, The(Zyman) 180
energy 145
Engineering Employers’ Federation 231“engrams” 134
Enron 3, 21, 191
environment 53, 57, 58, 62, 153, 185, 190,
191, 196, 215
Estée Lauder 232, 236
ethical consumer 189–90
Ethical Purchasing Index (2002) 189–90
European Brands Association 33
European Commission 218
European Court of Justice 159
European Registered Community
Design right 166
European Trade Mark Harmonisation
Directive 158, 159
European Union 161, 218
Design Harmonisation Directive 166
Eurostar xv
events 127, 237
export brands 214

F
Fairtrade 61
Fanta 29FASB 141 and 142 32
Fast Company magazine 122
FedEx 67
Ferrari 217
financial analysis 38
financial principle 37
financial services 80, 149

247

BRANDS AND BRANDING

Financial Times 197
financial transactions 39, 43
Fion 206First Direct 22, 99, 100–101, 105, 174
Fisher, Jeff 119
focus 145, 146
Food Standards Agency 52
football teams 20
Forbes magazine 30
Ford, Edsel 114
Ford, Henry 17, 114
Ford Mondeo 91
Ford Motor Company 29, 114
Fortune magazine 17–18, 113, 122
Most Admired Companies list 145,
154
Forum Corporation 101
Four Seasons Hotels 149
franchising 24
Fraser Institute 172
free markets 175
free trade 176, 182, 228
FRS 10 and 11 32
FTSE 100 companies 2, 193
FTSE 250 companies 188
Fujitsu 39
functional integration 135
funding, obtaining 42
future of brands 227–40
brands as total experiences, and as
central organising principles 237
corporate social responsibility at
the core 238–9
more compelling/imaginative
expressions of a brand’s identityand brand communications
237–8
need for internal and external
operations to be aligned – andtransparent 238
rigorous legal protection aroundthe world 238
further brand management
considerations 236–9
clarity of brand positioning 237
understanding the value andvalue drivers of a brand
236–7
the future of brand leadership
239–40the future for brands 230–36
future views 229–30
Future Foundation 239–40

248

G
Gallup 97
Gap 174, 186, 207
Garcia, Jerry 115
Garcia, Patricio 178
Gates, Bill 51
General Electric (GE) xiii, xiv, 19, 29, 92,
231
General Foods 117
Generally Accepted Accounting
Principles (GAAP) (US) 32, 43“get-up” 157, 159, 166
Gillette 180
Glaser, Milton 117
GlaxoSmithKline (GSK) 16, 20, 187
global economy 60
global recession 199
Global Reporting Initiative 193
globalisation 1, 19, 56, 60, 61, 171–82,
185, 228
goodness and guilt 175–6
the need for honest answers 180–2
the case for brands 171–3
think about intentions 178–9
time for a new approach 179–80
what globalisation can do for you
176–8
who really holds the power?
173–5
GNC 203
Golden, William 117
Gong Li 206
Goodman Fielder Wattie (GFW) 31
goodwill 32, 44, 165, 168
government agencies 115
government relations xiv
graduate recruitment xiv
Grand Metropolitan 17, 30, 31
graphic design 118
Grateful Dead 115
great brands see brand performance
Greater China 202
Greenpeace 62, 63, 175, 187
growth 146, 147, 150, 172, 173, 180, 197,
199
Gucci 31, 171, 182, 199, 217
Guinness 17, 31, 124

H
Haagen-Dazs 115, 232
Haier 218, 232, 235
Haji-Ioannou, Stelios 97–8
Hall, Mike 130, 133

INDEX

hallmarking 15
Halsbury, Lord 165
Harley Owners Group (HOG) 106–7
Harley-Davidson 68, 70–71, 100, 106–7
Harley-Davidson Europe 71
Harry Potter films 231
Harvard Business Review 149
Harvard University 3, 29
Haw Par 201
Hazeline Snow 200
health 48, 50–51, 57, 59, 200–202, 210,
228
“Health Mate” health-management
information programme 203
Heath, Robert: The Hidden Power ofAdvertising 134
Heineken 121
Heinz baked beans 15
Hellmann’s mayonnaise 19
Heublein 30
Hewlett-Packard 67
higher education sector 120
Hilton 31, 203
HIV 58Hoechst 121
holistic branding 98–100, 105, 106
holograms 160
Hong Kong 177, 202
Hopkins, Claude 130–31
Hornby 231–2
hospitality sector 203–4
HSBC 60, 100, 174
Hugo Boss 232
human rights 55, 59
Hume, David 133
Hyatt 203I
IAS 38 32, 43
IBM xiii, xiv, 29, 39, 67, 73–4, 88, 90, 94,
113, 114, 116, 117, 118
ICANN 167
ICI 120“identifiable intangible assets” 30
identity 143, 145, 154
see also visual and verbal identity
Ikea 70
illustration 114, 115, 125
impairment value 32
income statements 30
India 186, 230–31
brand image 218
and socially benificial innovation 50

wages 231
and western brands 176
Indonesia 176, 182, 199, 204, 207
Industrial and Commercial FinanceCorporation 119
industrial revolution 15
industrial sector 20
industry commentators 24
information technology (IT)firms 115
investment in 173
Infosys 218
initials 90–91
Innocent Drinks: Company Rule Book
124
innovation 24, 86, 89, 146, 153, 155
socially beneficial 49–51
insecurity 196
Institute of Grocery Distributers 190
intangible assets 27–32, 28, 44, 193, 194
integrated marketing 128, 137–8
integration 135–6
brand 135–6
functional 135
thematic 136
integrity 148
Intel Corporation xiv, 19, 29, 67, 159, 230
Intel Inside “ingredient branding”
campaign xiv
intellectual property 162, 168, 188, 199,
236
laws 157–8
Interbrand xiv, 28, 31, 193, 209
interest groups 24“internalisation” of brands and their
management 20
International Accounting Standards
Board 32
International Business Machines 90
internet
arrival of 15
banking 22, 23
BMW’s series of short films 181
challenges US brands andinstitutions 5
damaging news or opinions 20
distribution of myriad services 20
domain names and 167
expansion of usage 88
Invensys 91
Investors in Industry 119
Ireland 216
Ironman Triathlon 138

249

BRANDS AND BRANDING

IT see information technology“It’s a Grind” chain 172–3
iVillage.com 234

J
J Walter Thompson (advertising
agency) 15, 133
Jacobsen, Egbert 117
Jaguar 29
Japan 14, 210, 216
J.D. Power and Associates 107
jetBlue 174
Johnson & Johnson 52
joint ventures 43
JP Morgan xiv, 28
Jubilee 2000 63

K
Kanegaonkar, Deepak 218
Keebler 30
Kelleher, Herb 149
Kellogg’s 49, 67, 92
Kelly, Marjorie 191
The Divine Right of Capital 191
Key soap 50
Kia cars 59“Kicks-in-the-Clutch” campaign 138
King, Stephen 131
Kit Kat 94
Klein, Naomi: No Logo 1, 185
Knorr stock cubes 19
know-how agreements 19
Kodak 15, 52, 67, 117, 127, 158
Kordels 203
Korea 14
Kraft Foods 187

Llabourchild 55, 60, 194
local 194
Lacki, Tom 99
Lacoste 206
Ladbrokes 31
Land Rover 29
language 115, 118, 123, 124, 125, 138
law firms/lawyers 115, 121
Lazarus, Shelly 67
leadership 110, 111, 146, 155, 194–5, 197,
239
Legend computers 218, 232
Leo Burnett advertising agency 106
Levi-Strauss 186, 192

250

Liberhaier 232
licensing 24, 42, 43
agreements 34
Liew, Patricia 207
Lipton tea 146
literacy 57
Littlewoods 191
Litvin, Daniel 178–9, 192
Liverpool 216
living standards 48, 49, 172
lobbying 175
Locke, John 133
Loewy, Raymond 117
logos 16, 18, 23, 52, 98, 108, 117, 118, 121,
124, 157
logotypes 114
Logue, Christopher 119
London Stock Exchange 31
London Underground 114
Lopez, Jennifer 236
L’Oréal 31, 200
Lucky Dog Phone Company (later
Lucky Guy Phone Company) 16“Lucky Strike” 117
Lux soap 64
LVMH 31

M
McDonald’s xiii, xiv, 4, 16, 19, 29, 29, 32,
47, 52, 53–5, 72, 107–8, 114, 124, 173–4,
180, 181, 189, 211
McGrath, John 8
McKinsey 173
7S Strategy Framework 82
Maclay, Doug 130, 133
MADD (Mothers Against Drunk
Driving) 63
Madrid Agreement 161
Madrid Protocol 161“mail order” advertisements 130, 139–40
Malaya 202
Malaysia 177, 199, 206, 207
Maldives 204
Mambo 16
management consultancy firms 121
manufacturing 177
Marathon 16
market segmentation 37
market share xiii, 180
market value approaches 32
market-research companies 25
marketingboom in (1970s) 118

INDEX

customer-focused 93–4
direct and interactive xiii
expenditures 42
and improving places 213
integrated 128, 137–8
metrics xiii
misleading 217
perception of 220
a profession in crisis 180
role of 7
university classes in 180
usefulness becoming widely
recognised 214
marketing department 42, 108
marketing principle 36–7
Marks & Spencer 80, 87, 173–4
Marlboro xiii, xiv, 29, 217
Mars 16, 236
Mastercard 136
Mathlouthi, Tawfik 4
Matsui 216
measurement systems 110
Mecca-Cola 4
Médecins Sans Frontières 62, 188
medicine, access to 196
Melchett, Lord 187
Mercedes-Benz xiv, 29, 174, 182
Merck 20
mergers 19, 27, 34, 42, 43, 44, 164
merger boom (1990s) 122
Metrojaya 207
Michelin 16, 138
Microsoft xiii, xiv, 3, 5, 29, 51, 67, 92, 230
Midland Bank 22
Mini 66–7
Minneosota Mining and Manufacturing
16
Minolta 117
Mintel Consumer Intelligence 172
mission 86, 87, 89, 145
mobile telecommunications 18, 50–51,
68, 102–3, 116, 123–4, 159
money quantification 65
monopoly 33
morality issues 185–97
a case for leadership 194–5, 197
misguided intentions 190–93
the myth of the ethical consumer
189–90No Logo or Pro Logo? 185–7
redefining brand value? 193–4
social responsibility and brandbehaviour 187–9

Morgan Stanley Capital Index 3, 29
MORI 190
MTV 58–9
multinationals xii, xiv, 171, 177, 178, 179,
187, 190–91, 193
mutuality 99“myhome” home cleaning and laundry
service 235

N
Nabisco 30
Oreo Cookies 92
Ritz Crackers 92
name see brand nameNational Consumer Council 190
National Geographic Society 153
National Quorum 154
nations see places and nations,branding
NCR 180
Negroponte, Nicholas 230
Nescafé 94, 186
Nesquik 94
Nestlé 27, 30, 94, 180, 194
Nestlé Philippines 178
net present value (NPV) 38“New Asia” brands 203–6
New York World Fair (1964) 118
New Zealand 216
brands on the balance sheet 30, 32
newspaper groups 30
Neyts, Patrick 192
Nigeria: Shell human rights record 54,
178–9
Nike 16, 47, 53–4, 55, 64, 67, 69, 120, 124,
159, 177–8, 179, 182, 186, 192, 217, 233
Nivea 52, 82
No Logo critique 1, 185, 187, 190, 194
Nokia xiv, 5, 29, 64, 67, 68, 70, 230
Nominet 167
non-governmental organisations(NGOs) 20, 61, 62–3, 175, 188, 214, 236
non-profit sector 28, 48, 53, 61, 62–3, 227
Norton AntiVirus 88
Novartis 20, 121
NWAyer (advertising agency) 15O
O2 50
OECD (Organisation for Economic Cooperation and Development) 192–3
Guidelines on Multinational
Enterprises 189

251

BRANDS AND BRANDING

Office for Harmonisation in theInternal Market (OHIM) (known as
the Community Trade Mark Office)161, 163
Ogilvy & Mather 67
OHIM see Office for Harmonisation in
theInternal Market
oil sector 187, 194–5
Oil of Ulay 82
Olins, Wally 213
Olivetti, Adriano 117, 118
Olympic Games 153
One-Click 105
opinion leaders 24
opportunity modelling 83, 83, 84, 88–9,
88Orange Personal Communications 91,
123–4, 159
Orangina 21
OSIM 206, 210
Mermaid vacuum cleaners 206
Otis 92
overall asset value 27
overall corporate value 27
Oxfam 2, 21, 63, 175, 236
Oxford American Dictionary 13

Ppackaging xiv, 23, 35, 111, 157, 237
Paepcke, Walter 117
Pakistan 179
Pampers 51, 80
Panasonic 180“passing off” 165, 238
patents 19, 21, 27
patent law 23
Pears Soap 127
Penguin Books 116
Pepsi-Cola 16, 18, 67, 68, 98–9
performancebrand see brand performancebusiness 19, 24, 27
high standards of 144, 145
product 33
targets 42
Perrier 52, 94
Persil xiii, 235
Pfizer 20
PG Tips 139
pharmaceuticals industry 20–21, 121, 175,
187–8
Pharmacia 121

252

Philip Morris 17, 186
Philippines 178, 199
photography 114, 115, 125
Phuket Banyan Tree resort 204
Pillsbury 30, 31, 136
PIMS database 130
PIMS Europe 33
places and nations, branding 213–25
the eight principles of placebranding 224–5
hope for branding 222–4
is branding equal to the task? 221–2
marketing at the top 219–21
place branding 214–17, 215
place branding hexagon 215, 216
the power of country of origin
217–19Pocket Oxford Dictionary of Current
English 13
political parties 4, 20, 214
pop stars 20
pop-up advertisements on computers
180
Porter, Michael: The Competitive
Advantage of Nations 219
Porter Analysis 82
positioning see brand positioning
Post Office 17, 98
post-audits xiii–xiv
potter’s mark 14, 116
poverty 60, 177, 196
PPR 32PR (public relations) 127, 143–55, 187, 237
the brand is the corporation 148–54
Coca-Cola: in celebration of apromise 152–4
US Postal Service: in crisis 150–52
the linkage with performance andreputation 145–8, 145
brand and performance: Unilever
146–7
brand and reputation: Coca-Cola
147–8
putting the brand in context 143–4,
144
Prada 31
Pratt & Whitney 92
premium price 36
press 127
Pret a Manger 104, 108
price relatives 27
price-to-book ratio 27
price/earnings ratios 97

INDEX

private sector 53“Pro Logo” (article in The Economist) 1
processes 109, 110
Procter & Gamble 27, 51, 80, 81–2, 181,
239
products xii, xiii, 105–7, 109, 110
design 35
development/improvement 33
life cycles 93
profit and loss accounts 30
profit share 43
profitability 27“profits warning” 191
Project Blue (Pepsi) 98–9
promotions 35, 108, 111, 127
Prudential Insurance 15, 22
public health 52–3
public relations see PR
public sector 20, 53
Qingdao Refrigeration Plant 232
Quaker 15, 21, 27
quality 148

retail outlet layouts 160
return on investment (ROI) 39, 65, 93
Riccino 206
Richardson Vicks 82
Ries, Al and Trout, Jack: Positioning: The
Battle for Your Mind 79
risks 146
Roche 20
“Rock the Vote” campaign 59
Rockwell International 117“role of branding index” 38
Rolex 199
Rolls-Royce 19, 20, 217
Rolls-Royce Aero Engines 20
Rolls-Royce Motor Cars 19
Roper Green Gauge study 190
Rowntree 30
Royal Mail Group 98, 114
Rucci, Anthony 149–50
Russell, John 71
Russiaeconomy 125
McDonald’s in 4
see also Soviet Union

R

S

R&D
branded/non-branded 33
investment in 35
pharmaceuticals industry 21
restructuring 92
Rabbit milk sweets 200, 211
radio 127
Raffles International 203
Ralph Loren 206, 207
Rand, Paul 116–17, 118
Rank Hovis McDougall (RHM) 31“Reach for the Sky” initiative 59
Reckitt & Colman 30
recruitment 103–4, 144, 181, 214
Red Cross 2, 5, 62, 116
Reddaway v Banham 165
redefinition 107–8, 111
Rees, Martin 229, 230
relative perceived quality xiii
relative price xiii
relevance 82–3
repurchase 37, 97
reputation xiii, 6, 20, 24, 53, 111, 144, 145,
147, 149, 150, 153, 154, 177, 187, 189, 228,
238
responsibility 155
retail design 35

S&P 500 index 29
Sainsbury, J. 103
sales
and brand value 33
restructuring 92
salespeople 25, 50
short-term 181
salience 131, 132, 133
Samsung 29–30, 39, 218, 232–3, 239
Samyang, near Ho Chi Minh City 178
Sandoz 121
Santiago de Compostella, Spain 14
Santos, Juan 178
SARS outbreak 210
Satmetrix Systems 97
Scalextric 231
Schachter, Daniel: Searching for
Memory 134
Schultz, Don 148
Schultz, Howard 106
Scott, Walter Dill 138
The Psychology of Advertising 133,
134
Seattle 182, 185
Seeds of Change 236
services xii, 21–3
Sesamin 203

Q

253

BRANDS AND BRANDING

7 Series (BMW) 66
Sex in the City 181
Seychelles 204
Shangri-La 203
share price(s) 177, 180
and brand value 19, 33
and profits warning 191
supporting 42
shareholder value 24, 25, 27, 28–9, 29, 35,
39, 43
shareholders
expectations 24
returning capital to 191
Sharia law 60
Shell 16, 53–4, 60, 62, 116, 117, 179, 188,
194
Shokoya-Eleshin Construction 194
Shredded Wheat breakfast cereal 15
Silicon Valley 229–30
Simpson, Peter 101–2
Singapore 199, 201, 203, 205–6, 207
Singapore Airlines 203, 207, 210
Singapore Tourist Board 205
Singer sewing-machines 15
single-source panels 129–30
Six-Sigma Way 104
Sky satellite service 59
slogans 157
smell marks 159
Smirnoff 30
Smith, Adam 219
The Wealth of Nations 73
Smith’s 31
Snickers 16
social brands 61
social capital 193–4
social cohesion 64
social responsibility see corporate social
responsibilitysocial value of brands 33–4, 47–64
brand pressure for corporate social
responsibility 53–6
brands and consumer protection
51–3
brands and corporate social
leadership 56–61
brands and social cohesion 64
brands and socially beneficial
innovation 49–51
brands and wealth creation 48–9
social brands 61
enabling the provision of
beneficial social services 63–4

254

giving NGOs a role as social
arbiters 62–3
providing a campaigningplatform 63
solar energy 187, 194“somatic markers” 134
Sony 52, 67, 218, 232, 235
Digital Creatures Laboratory 230
Sony Erikson 236
sounds 157, 159
South Africa 86
South Asia 199
South Korea 177, 210, 218
South-East Asia 199–211
Asian brands hold their own
200–207
challenger brands 206–7
established brands 207
new Asia brands 203–6
revitalised brands 202–3
top 50 Asian brands 1999 208,
209
top Singapore brands 2002 209,
209
traditionalists 201–2
looking ahead 210–211
tips for brand builders in Asia 211
where things stand 209–210
Southwest Airlines 103–4, 149
Soviet Union: unbranded 172, 174
see also Russia
Spain 216
sponsorships 127, 149, 153, 237
sport 153, 216
Sprite 29
stakeholders
identifying 81–2
understanding 81
Standard & Poor’s 500 3
standards of living 3, 176, 177
Starbucks 67, 68, 100, 106, 172
stockmarket valuations 27
stories, use of 115, 124
strapline 115, 124, 159
stretch 83
Stuart, John 27
subsidiary companies 42, 43
Sunlight soap 15
Suntory 202
SustainAbility 188
Global Reporters Survey 188
Sustainable Development Commission
240

INDEX

sweatshops 55, 60, 177“swooshes” 16, 120, 124, 159
Symantec 88, 89
symbols 114, 115, 119, 143T
Taiwan 202, 203
Tanzania 50
tax offices 115
Tazo 125
technology
advancement 93
and branding as a sensory
experience 237
dependence on 88
development of 20“dumb” 104
new 84social applications 50
value 27
television 4–5, 127, 128, 176
commercials 180
terminology 6–7
Tesco 80, 174, 233, 234
Thai Silk Company 205
Thai silk industry 204–5
Thailand 2, 199, 203, 204, 205, 207
thematic integration 136“Think Before You Drive” campaign
59
ThinkPad 94
third-world debt 63
Thomas L. Harris research 154
Thompson, Jim 204–5, 210
Thompson, John 88, 89
Three Riffles 206“3” 116
3Com 92
3i 119, 120
3M 16“through the line” 128
Tide 81
Tiga Kaki headache pills 200–201
Tiger Balm 201–2, 210, 211
tobacco companies 181, 186–7, 188
Toffler, Alvin: Future Shock 230
tone of voice 115, 124
total quality management (TQM) xv,
104
tourism 214
Toyota 67, 68, 218
Toys ‘R Us 173
TQM see total quality management

trade marks xii, xiii, 6, 27, 94
first registered in the UK (1876) 15
legislation 15
trade mark law 23
see also under brand protection
Trade Marks Act (1938) (UK) 159
Trade Marks Act (1994) (UK) 158
trade policy 63
trade unions 175
Traidcraft 188
training 35, 102, 103, 108, 110, 144
transfer pricing 34transparency 24, 149, 238“Triad Power” 108
Trout, Jack 79
trust xiv, 21, 22–3, 57, 59, 59, 60, 62, 64,
82, 89, 95, 99, 138, 149, 152, 153, 186, 234
Tully’s Coffee Corp 172
Tylenol 52
typography 114, 115, 124

U
Uncommon Practice: People who delivera great brand experience (Smith andMilligan) 97
Understanding Brands (ed. Cowley) 79
Unilever 19, 27, 50, 115, 146–7, 180, 187,
188, 192, 235
Leaders into Action programmes 147
Path to Growth strategy 147
Union Carbide 187
Unisys 120
United Airlines 117
United Biscuits 30, 31
United Kingdom
brands on the balance sheet 40, 43
classification of goods and services
160
government “quality of life”
indicators 239
increase in wealth poorly correlatedwith happiness 239–40
rebranding 220–21
United Nations (UN) 62
United States“Brand America” xiii, 4, 5, 233
classification of goods and services
160
corporate income taxes 192
domination of the TV and media
markets 5
most leading brands are American
67–8, 227, 233

255

BRANDS AND BRANDING

non-member of the Madrid
Agreement and Madrid Protocol
161
productivity miracle (late 1990s) 173“public diplomacy” xiii
trade mark registrations 163
United Technologies 92
United Way of America 39
University of Michigan 107, 177
University of Minnesota 177
University of South Carolina 3, 29
Upjohn 121
UPS 117
Urvâshi 218, 223
US Accounting Standards Board 32
US Federal Reserve Board 27
US Inland Revenue Service 107
US Patent Office 159
US Postal Service 149, 150–52
utilities 20

Vvalue
adding 2, 3
and brand equity xiii
corporations ranked by 154
getting the most value out of abrand 150
as a long-term investment 146
value-based management 34
values 86, 143, 144, 145, 147, 153, 154
Vanity Fair 205
Vickers 19
Vietnam 177–8
Virgin 80, 234
Virgin Atlantic 22
Virgin Rail 22
vision 86, 87, 89
visual and verbal identity 113–26
controlling and category identity: the“CI manual” and the lookalikes
120–22
designer-driven identity 116–18
diversifying identities 122–6
from brandr to today 116

256

strategy-driven identity 118–19
Vogue 175, 205
Volkswagen 19, 20
voluntary sector 20
Volvo 29

W
Wacker, Watts 229
wages differential 231
Wal-Mart 51, 172, 173, 180, 233
Wall Street Journal 107
Walter Thompson agency 131
Walton, Sam 173
watching services 162, 168
Watson, Thomas J., Jr 113, 117–18
Watzlawick, Paul 127, 136, 137
wealth creation 48–9
WebSphere 94
Wedgwood 158
Western Malaysia 207
Windows xiii
Wipro 218
Wired magazine 122
Wirthlin Worldwide: The Wirthlin
Report 154
Wolff, Michael 119
World Bank 172, 177“Global Economic Prospects and theDeveloping Countries 2003” 199
World Cup 153, 220
World Intellectual Property
Organisation (WIPO) 161
World Trade Organisation 185
World Wildlife Federation 153
WorldCom 21
Wu Bangguo 218
www.Amazon.com 167

Y
Yomeishu tonic 200
Young, James Webb 133

Z
Zaire 175
Zeneca 91