Excerpt of further issues topics: Brand Equity and Brand Strategy, Brand Equity and Brand Diffusion, Brand Equity and Company Success, Brand Equity and Sales and Acquisition of Brands or Companies, Brand Equity and Marketing Investment

Alternative Approaches in Brand Leadership in Demand

The sheer number of brands, the costs involved in managing them, the exhausted retentiveness of consumers, force companies to rethink their brand leadership. In many companies brand equity is still seen as kind of a “hidden asset”.

To sum it up: This should be changed, if it is the case. Brands are no hidden assets. They are so essential for the current and future success that they need to be managed as a property asset, nurtured and protected. Just as property values of companies are utilized profitably nowadays, the same has to be the case with brands.

Without doubt there have been a series of organizational systems in brand leadership in the past few years which accommodate the increasing significance of brands in regard to the company success and company value, also in consideration of the monetary value. However, they are often not very stable, because in times of intensified competition, benchmarking and the inclination to take cues from the competition, those responsible for companies and brands are “forced” to think in quarterly earnings.

Thus long range brand leadership is coming more and more under pressure. Financial pressure, relocating channels of distribution and missing brand development based on customer oriented data, deprive brand leadership additionally of more funds and clout. In general, brand leadership today works with a small number of employees and they are often only concerned with events securing consistent branding, the coordination of sub-brands for different product lines and for the efficiency and uniformity for media purchases and PR. It is surely correct that consumers have turned away from brands in many industries over the past few years or they have terminated the mutual trust. Not because consumers really wanted to terminate this trust, but because they were disappointed by brands. It is imperative more than ever to create trust through qualified brand leadership and continuity within the communications process.

Even though the commitment to the brand is very high at the board room level, at least according to their own proclamations, in practice distinct weaknesses within the organizational principle of brand leadership can be ascertained. For instance, the analysis of the ZMM Scientific Center for Brand Management and Marketing in cooperation with the GfK Group (Growth for Knowledge Market Research Institute) in regard to relevancy to the practice of brand research topics shows that the relevance of the organizational integration of brand management is assigned only a 50% significance whereas questions in regard to the successful implementation of brand strategies (90.9%) or the best investments into brands (70.3%) were assigned much higher values.

A glance at board structures in the 10 leading DAX companies of Germany shows a similar picture: Only in one company (adidas) exists a board for brands. Only three companies have a marketing department on the board that, among other things, also attends to marketing (BMW, EON, SAP); while the other six companies have attached the topic marketing to the department for distribution or corporate communication.

While in Anglo-Saxon countries the brand equity has long been recognized as currency for the substance of a company, German businesses are slowly discovering that brands are not only an imaginary superstructure for fashion, cosmetics and computers. One reason for this is that brands, despite their accepted significance for a company are still seen more or less as a psychological phenomenon, consisting of a series of more or less exactly defined factors.

Often they are also attributed a myth that can be dominated and interpreted accordingly. With the consequence that in regard to the monetary value of brands exist more estimates and assessments rather than tangible figures and facts.

With the SchmidPreissler Brand Equity+Performance© Program, we have developed a program to calculate the monetary value of a brand, based on the fact that brand equity has to be interest-bearing. This “self-imposed responsibility” towards interest yield causes brand equity to be a practical value, corresponding to a realistic current market value.

If you do have questions in regard to our program, we are at your disposal.