The Brand Bubble E-Book

John Gerzema

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 365

Veröffentlichungsjahr: 2008

Beschreibung

How to use brands to gain and sustain competitive advantage Companies today face a dilemma in marketing. The tried-and-trueformulas to create sales and market share behind brands arebecoming irrelevant and losing traction with consumers. In thisbook, Gerzema and LeBar offer credible evidence--drawn from adetailed analysis of a decade's worth of brand and financial datausing Y&R's Brand Asset Valuator (BAV), the largest database ofbrands in the world--that business is riding on yet another bubblethat is ready to burst--a brand bubble. While most managers stillsee metrics like trust and awareness as the backbone of how brandsare built, Gerzema asserts they're dead wrong--these metrics do notadd to increased asset value. In fact, by following them, theyactually hasten the declining value of their brands. Using a five-stage model, The Brand Bubble reveals howtoday's successful brands--and tomorrow's--have an insatiableappetite for creativity and change. These brands offer consumers apalpable sense of movement and direction thanks to a powerful"energized differentiation." Gerzema reveals how brands withenergized differentiation achieve better financial performance thantraditional brands have. Plus, Gerzema helps readers developenergized differentiation in their own brands, creatingconsumer-centric and sustainable organizations.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Foreword

PART ONE - INTRODUCTION

CHAPTER ONE - TULIPMANIA AND INFLATED BRANDS

THE IMPENDING BRAND BUBBLE

MEASURING THE WORTH OF AN ENTERPRISE IN INTANGIBLE VALUE

BRANDS AS DRIVERS OF INTANGIBLE VALUE

SNAP, CRACKLE, POP GOES BRAND VALUE

MARKETING’S PERFECT STORM

NOT THE WAY TO ESCAPE THE BUBBLE

CHAPTER TWO - CAN YOU SAY “IRRESISTIBLE”?

FINDING LINKS BETWEEN BRAND PERFORMANCE AND STOCK RETURN

ISOLATING THE NATURE OF ENERGY

ADD ENERGY, BECOME IRRESISTIBLE

THE ROLE OF ENERGY IN CREATING IRRESISTIBLE BRANDS

WHAT ENERGY ADDS TO BRANDS

NOT JUST DIFFERENTIATION . . . ENERGIZED DIFFERENTIATION

THE PLOTTING THICKENS

IRRESISTIBLE BRANDS ELEVATE FROM THEIR CATEGORY

IRRESISTIBLE BRANDS ALSO CREATE MAGNETISM

STAGNANT BRANDS: PROOF OF THE BRAND BUBBLE

PUTTING OUR MONEY WHERE OUR DATA IS

THE KEY TO DIFFERENTIATION: KEEP BEING DIFFERENT

CHAPTER THREE - WALL STREET, MEET MAIN STREET

FIVE PARALLEL BEHAVIORS OF CONSUMERS AND INVESTORS

A HISTORICAL PERSPECTIVE

THE RATIONAL CONSUMER: MAXIMIZING VALUE

THE DELAYED IMPACT OF ENERGY ON SALES

TYSON FOODS DISCOVERS BRAND IMMORTALITY

POWER OF BRANDS TO CHANGE INDUSTRY VALUATION MULTIPLES

IMPACTING PRICING POWER AND VOLUME, TODAY

BUILDING FUTURE VALUE

CHAPTER FOUR - THE POSTMODERN CRAVING FOR CREATIVITY

FOUNTAIN OF YOUTH

CREATIVITY: ELIXIR OF HAPPINESS

THE WOW FACTOR

IRRESISTIBLE BRANDS TELL THE TRUTH

CREATIVITY AND IRRESISTIBLE BRANDS

CHAPTER FIVE - WELCOME TO CONSUMERLAND

OF COMPUTER MICE AND MEN: INNOVATION AND HUMAN NATURE

CONSUMERS AS PRODUCERS OF CONTENT

WE DON’T WANT TO BE “HERD,” JUST PERSONALLY SEEN

SEEKING COMMUNITY AND EXPERIENCES AMONG FRIENDS

SEEKING CONVERSATION AND DIALOGUE

WANTING INFORMATION AND A SENSE OF DISCOVERY

TODAY’S CONSUMERLAND IS AN ECOSYSTEM

LESSONS LEARNED

PART TWO - APPLICATION

CHAPTER SIX - STAGE ONE—EXPLORATION Performing an Energy Audit

THE ANATOMY OF BRAND STRENGTH

THE YIN AND YANG OF ENERGY AND DIFFERENTIATION

PERFORMING YOUR ENERGY AUDIT

THE OBSTACLE TO BEAT BACK

THE FIRST LAW OF ENERGY

THE NEW RULE OF BRAND MANAGEMENT

CHAPTER SEVEN - STAGE TWO—DISTILLATION Identifying the Energy Core

RIGHT ON TARGET

A FIRST PASS AT YOUR ENERGY CORE

USING THE ENERGY CORE TO SYMBOLIZE A PURPOSE-DRIVEN BUSINESS

JOURNEY TO THE CENTER OF THE BRAND

THE OBSTACLE TO BEAT BACK

THE SECOND LAW OF ENERGY

THE NEW RULE OF BRAND MANAGEMENT

CHAPTER EIGHT - STAGE THREE—IGNITION Creating an Energized Value Chain

IGNITION IN PRACTICE

THE OBSTACLE TO BEAT BACK

THE THIRD LAW OF ENERGY

THE NEW RULE OF BRAND MANAGEMENT

CHAPTER NINE - STAGE FOUR—FUSION Becoming an Energy-Driven Enterprise

EXAMPLES OF ENERGY-DRIVEN ENTERPRISES

THE OBSTACLE TO BEAT BACK

THE FOURTH LAW OF ENERGY

THE NEW RULE OF BRAND MANAGEMENT

CHAPTER TEN - STAGE FIVE—RENEWAL Active Listening and Constant Refreshing of ...

THE OBSTACLE TO BEAT BACK

THE FIFTH LAW OF ENERGY

THE NEW RULE OF BRAND MANAGEMENT

EPILOGUE

NOTES

Acknowledgements

THE AUTHORS

INDEX

Praise forThe Brand Bubble

“The 21st century business will see two types of winners: the low-price /low-cost products and services, and strong brands. Today, margins, profits, and equities are driven by powerful brands. The grave danger is that brands are losing their way. The Brand Bubble explains the greatest risk to world business and how to avoid it. If you are in the brand business, only the intuitive geniuses should get dispensation from reading this brilliant, analytical, data-rich guide to sustained profitable growth in what will continue to be an extraordinarily competitive and challenging environment.”

—Peter Georgescu, chairman emeritus, Young & Rubicam, and author, The Source of Success

“With a subject written about ad nauseam by both practitioners and academics, in The Brand Bubble John Gerzema and Ed Lebar have identified a significant trend that leaves most of the other theories in the dust. Building off the fifteen-year investment Young & Rubicam has made into the proprietary Brand Asset Valuator, John and Ed have captured the concept of energized differentiation in an easily understood and recognizable fashion. They have reinforced that although brands are ‘owned’ by the consumer, the financial rewards to the manufacturer or service provider are significantly greater when their brands are continually energized through creativity, innovation, and well-paced change. The book provides a well-thought-out approach to keeping brands vibrant and relevant in today’s highly competitive environment.”

—Jim Murphy, chairman and CEO, Murphy & Co., and retired chief marketing and communications officer, Accenture

“After reading this book, you’ll never think of brands the same way again. It will open your eyes to a new way of thinking and executing.”

—Dermot Boden, chief marketing officer, LG

“This book is a must for anyone interested in the strategy and value of brands—a riveting read with serious implications for investors, corporate strategists, and brand managers. The intersection of brand strategy and shareholder value has been underserved by the literature, but these authors serve up something that is timely, big, and useful, with new thinking based on their research and real-world experience.”

—Justin Pettit, partner, Booz & Company

“This book is a must-read for anyone who manages brands or invests in companies that manage brands. Through a brilliant analysis that charts shareholder value to brand value, Gerzema and Lebar identify a brand bubble that puts most companies at significant downside risk, and they then chart a path that the more savvy companies could follow to find their way through to the other side when the bubble almost inevitably bursts.”

—Mark Penn, worldwide president and CEO, Burson-Marsteller, and president, Penn, Schoen & Berland

“This is a business book that happens to be about brands. Any manager in any line of business must learn how to protect and nurture their most cherished asset. Brands are under attack, and boardrooms need to pay attention.”

—John Rose, senior vice president and managing director, the Boston Consulting Group

“Gerzema and Lebar propose a startling idea—that the value of a brand lies not in the stability and consistency of its promise, but in its constancy of motion. The implications are profound, and will keep even the most seasoned brand managers up late at night.”

—Chris Trimble, coauthor, Ten Rules for Strategic Innovators

“This book is an indispensable tool for brand stewards who compete in today’s dynamic, global, and digital marketplace, where the paths that lead to brand performance are ever more complex.”

—Chris Shimojima, vice president, global digital commerce, Nike, Inc.

“The Brand Bubble will help companies navigate the complexity of driving consumer delight in an ever more complex and crowded world where media and messages can blur into a collage of confusion. Their insights provide a stimulating guide to building brand value through sound analysis and execution.”

—Michael Tatelman, vice president and general manager, sales and marketing, Dell Consumer

“John Gerzema and Ed Lebar offer very creative and innovative insights about how to establish consistency between the financial market performance measure of a brand and the measure of the customers’ esteem toward a brand, thus avoiding the fallout of a brand bubble. Empirical evidence provided for their concerns about current brand management and for their prescribed remedies is indeed impressive and well founded. It is an excellent book for brand managers to read and refer to for a successful brand management career.”

—C.W. Park, professor of marketing, USC Marshall School of Business

“This book has been meticulously researched to provide a comprehensive yet accessible understanding into how great brands are built today to sustain competitive advantage and generate asset value.”

—Cammie Dunaway, executive vice president, sales and marketing, Nintendo

“John Gerzema and Ed Lebar lay out a very dynamic way to think about brands and shareholder value. We are convinced that the Brand Asset Valuator is a valuable tool to assess the financial impact of your brand and the power of its marketing.”

—Joseph Plummer, chief research officer, Advertising Research Foundation

“The Brand Bubble raises thought-provoking challenges and paradoxes. Can a company meet its demise through misguided efforts at brand building? Providing a compelling argument that long-term financial success is closely linked to what consumers truly perceive about your brand, the authors offer valuable insights on how to refocus brand building on fulfilling your brand promise to consumers.”

—Anne-Flore Goldsberry, vice president of worldwide marketing, Logitech

Copyright © 2008 by Young & Rubicam Brands

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Library of Congress Cataloging-in-Publication Data

Gerzema, John. The brand bubble : the looming crisis in brand value and how to avoid it / John Gerzema, Ed Lebar ; foreword by Peter Stringham. p. cm. Includes bibliographical references and index.

eISBN : 978-0-470-44939-4

FOREWORD

This book has an important message—not just for marketers, but also for CEOs, financial analysts, and anyone who invests in consumer-facing companies. Every professional today must be acutely aware of the creative and management efforts required to launch a brand and sustain its profitability in the marketplace. We live and die on the strategic decisions that we must invent each day to ensure that our products capture not only dollars but also imaginations.

That’s why the theories in this book are so critical. The message of The Brand Bubble will no doubt be as much of a shock to you as it was to me: that many, many brands are in serious trouble. I have no doubt that this bubble is already occurring, and it will probably continue. I applaud John and Ed for bringing this story out and making sense of it all. Their analysis of the problems devaluing brands today and their recommendations for possible solutions are insightful and worthy of attention.

Those who read this book will need to interpret its thesis in terms of the metrics they use to assess their own brand’s performance. The same is true for the management and marketing recommendations presented in the second half of the book. No one knows for certain how to transform a brand caught in the brand bubble. While this book gives you some remedies, we are entering a whole new area of marketing thought. Discovering what solutions are right for you will require some testing and learning. Frankly, we do not have all the answers, but what we do have is the ability to assess how much individual brands are affected by this worrisome trend.

If there is one thing I can confirm, it is that this book is based on evidence from an amazingly accurate research tool that Y&R has maintained for more than fifteen years, BrandAsset® Valuator, (BAV). I can attest to the BAV’s accuracy from personal experience as an agency executive and as a CMO.

I first learned of BAV in 1997 when Peter Georgescu and Alex Kroll, the original champions of BAV recruited me for a position at Y&R. I was, first of all, very impressed that an agency would invest tens of millions of its own dollars researching brands and consumer attitudes. But then I was even more impressed by the fact that it was the only analysis of how brands are built that had been tested against the financial metrics that create enterprise value. In the end, the BAV was one of the factors that led me to accept a job with Y&R as CEO of its North American operations.

Then, in 2001, I left to join HSBC in London as CMO, responsible for global marketing and brand development. Prior to my arrival, HSBC had been struggling to create a unified brand message in the minds of the millions of customers the company had picked up through dozens of acquisitions. Having originated as the Hong Kong and Shanghai Banking Corporation, HSBC was by this time the world’s second-largest bank, composed of individual banks in dozens of countries around the world, all rebranded with the HSBC livery. To understand what the brand needed, I contacted one of my old colleagues at Y&R and asked him for the BAV profile on the banking industry.

The data and insights in that profile revealed what had to be done to make a world-class brand for HSBC. With the BAV data setting the guideposts, coupled with qualitative research that gave insight into what I call the DNA of HSBC, we created the positioning of “The world’s local bank.” The results were remarkable. In five years, HSBC went from a brand value of $100 million to $11 billion!

When I returned to Y&R in 2007 as its worldwide CEO, I discovered that in my absence, the company had discovered something new in the BAV data—the rumblings of the brand bubble described in this book. It proved to me that BAV is a living, evolving study. It constantly throws out new ways of looking at brands. It is a marvelous sieve that dredges up some amazing nuggets, if you have the right people to assay them and the determination to apply their advice. John and Ed lay out some very intriguing and challenging dilemmas in this book, which should occupy us all for some time. I hope you enjoy the challenge!

New York CityJuly 2008PETER STRINGHAM CEO, Young & Rubicam Group

PART ONE

INTRODUCTION

Today, a dilemma faces marketing and the larger enterprise. The tried-and-true formulas to create sales and market share behind brands are becoming irrelevant and losing traction with consumers. We know this through extensive research we’ve been conducting through our BrandAsset® Valuator (BAV), an empirical model that, based on global consumer research, is designed to explain how brands grow, decline, and recover.

Between 1993 and today, BAV has grown into one of the most respected brand models based on its construction of the largest brand and financial databases in the world. In speaking at the Leaders in Dubai Business Forum in November 2007, professor Philip Kotler said, “There are few effective ways to measure the value of a brand, but one of the best is Y&R’s Brand Asset Valuator.” We’ve watched brands achieve popularity, blaze like comets, and come crashing to earth. We’ve seen brands build slowly from humble beginnings, and we’ve seen others that weakened, only to be resurrected. We’ve marveled as still others have changed the way consumers see in the world in which they live.

In the summer of 2004, we discovered several curious trends that took us by surprise. Our research clearly established that consumer attitudes about all sizes and segments of brands were severely declining. Across the board, we saw significant drops in consumer top-of-mind awareness, trust, regard, and admiration for not a few but thousands of brands. We found that most brands were not adding to intangible value of their enterprises. Instead, the majority of brands were stalled in the consumer marketplace, like cars on a Friday afternoon on the 405.

At the same time, however, brands were creating more and more value for their companies and shareholders. Our econometric models demonstrated this value creation was evident in increased share prices and significant bursts in intangible value. Because bullish investors believed that brands were growing, they expected future revenue growth and an increase in share prices, driving their value even higher. Why?

When all the facts were put together, we discovered that yes, there is an increasing expansion of intangible value, but this value is actually the by-product of fewer and fewer brands. The number of high-performance, value-creating brands is diminishing across the board. Sure you can say Google, Apple, and Nike and think all brands are financial juggernauts. But the reality is that while brand valuations on the whole keep appreciating, brand perceptions and actual value creation are crumbling.

This is a recipe for ruin.

This book lays out credible evidence that points to a developing problem that, if not corrected, could drive down valuation multiples and stock prices around the world. We’ve concluded from a detailed analysis of a decade’s worth of brand and financial data that business is riding on yet another bubble: a brand bubble.

Why is this happening?

It’s clear to us that the traditional business models and strategies marketers have used for generations no longer work. Their failure is not simply the result of living in a world of high technology, it stems from the birth of a fundamentally different consumer. Consumer behavior has changed so rapidly and so profoundly it requires an entirely new vision of brand management. While most managers still see metrics like trust and awareness as the backbone of how brands are built, our analysis shows they’re dead wrong—these metrics do not add to increased asset value. In fact, the effort to follow them leads marketers astray, actually hastening the declining value of their brands.

The good news, however, is that our research also helped us identify the way to jump-start the power of branding again. Through our studies, we began noticing a new dimension coalescing around a few brands that were successfully performing. In BAV, we observed consumers being captivated by a certain property in successful brands—a quality that reflected a more exciting, dynamic, and creative experience. In essence, they’re concentrating their passion, devotion, and purchasing power on an increasingly smaller portfolio of special brands—brands that keep exciting and evolving.

We now know the brands that are thriving already—and will succeed in the future—have an insatiable appetite for creativity and a questing spirit for change. What they have is a more powerful form of differentiation, one that is constantly evolving and leading consumers forward. It’s something we call Energized Differentiation. Brands with this quality become irresistible to consumers by offering a palpable sense of movement and direction. We’re now able to demonstrate the economic value of irresistible brands and explain how they break out to impact the future financial performance of their firms.

The implications are far-reaching: We’re at the dawn of a new age in brand management and marketing. Both must undergo a great transformation in business today. Only in learning new rules of brand management will enterprises broaden the impact of their innovation and more closely align their brand and marketing efforts to desired outcomes in their overall business strategy.

We wrote this book to be valuable and practical for anyone involved in managing a company or a brand, or working in any capacity in product management, marketing, and sales. We are speaking to a wide assortment of people, from CEOs and chief marketing officers to brand managers to entrepreneurs and small company owners who may be launching brands of their own.

The literature on branding is extensive, but we promise you will find in this book significant new thinking to inspire your brand and, we hope, shift the foundation of your business and marketing models. Our analysis and recommendations pertain to companies of all sizes and degrees of reach. You can be a local grocer or a global conglomerate, it doesn’t matter; if you have a brand, this book’s for you. Cheers.

The Brand Bubble provides both analysis and prescription. The first half explains the research we performed at Y&R that caused us to recognize the existence of the brand bubble and to identify the attributes of energy infusing irresistibility into today’s leading brands. We analyze the new consumer behaviors, expectations, and mind-set we call ConsumerLand, which demands that brands embrace speed, openness, and a commitment to constant change.

In the second half of the book, we guide you in detail through a five-stage model to show you how to develop an irresistible brand as well as how to completely alter your organization to become consumer-centric and embrace the brand as an organizing principle. These are the keys to ensure sustainable, profitable performance.

As you think about your brand management going through these stages, we offer a free invitation to assess your brand using our research. We have thousands of brands on hand, and chances are we have yours. Please visit www.thebrandbubble.com, where you can gather deeper, more comprehensive online data about your brand, along with reading additional information and updates to this book.

Our goal is to inspire you to find the energy in your brand and make it irresistible through new brand management rules that are in synch with today’s world. Not only do we believe that you will find bigger profit and greater success following our principles, we also think that irresistible brands can help change the world to make life easier, more creative, and happier for people everywhere on this planet.

CHAPTER ONE

TULIPMANIA AND INFLATED BRANDS

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one!

—CHARLES MACKAY

In 1841, Charles Mackay wrote his famous book to describe various marketing phenomena. Of special note was his passage on “Tulipmania,” an occurrence that took place in Holland in the early decades of the 1600s. The madness began when tulip bulbs imported from Turkey were found to grow extremely well in Dutch soil. The Dutch aristocracy acquired an immense taste for their beauty, and seeing how much could be made from tulips, thousands of average citizens sold their assets and began buying the bulbs. People from all economic classes began trading in tulip bulbs at exorbitant prices. Speculators even took out futures contracts on unplanted bulbs, convinced that some varieties were slated to become the most expensive objects in the world. But at the height of the hysteria, which financial records trace to a few months between 1636 and 1637, the craze for tulips suddenly withered, leaving thousands of Holland’s most successful businessmen holding worthless contracts while the less affluent who had invested in the flower lost entire life savings over a bunch of dried bulbs.