In David Aaker's pathbreaking book, MANAGING BRAND EQUITY, managers discovered the value of a brand as a strategic asset and a. As industries turn increasingly hostile, it is clear that strong brand-building skills are needed to survive and prosper. In David Aaker's pathbreaking book. Pdf Download eBook Free Building Strong Brands By David A. Aaker DOWNLOAD EBOOK PDF KINDLE #Audiobook.
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Editorial Reviews. From Publishers Weekly. Aaker (marketing, Univ. of California- Berkeley) Building Strong Brands - Kindle edition by David A. Aaker. Editorial Reviews. From Publishers Weekly. Aaker (marketing, Univ. of California- Berkeley) Look inside this book. Building Strong Brands by [Aaker, David A.]. As industries turn increasingly hostile, it is clear that strong brand-building skills are needed to survive and prosper. In David Aaker's.
Click on the cover image above to read some pages of this book! Formatting may be different depending on your device and eBook type. As industries turn increasingly hostile, it is clear that strong brand-building skills are needed to survive and prosper. Now, in this compelling new work, Aaker uses real brand-building cases from Saturn, General Electric, Kodak, Healthy Choice, McDonald's, and others to demonstrate how strong brands have been created and managed. A common pitfall of brand strategists is to focus on brand attributes.
The winner of the Paul D. Converse Award for outstanding contributions to the development of the science of marketing and the Vijay Mahajan Award for Career Contributions to Marketing Strategy, he has published more than ninety articles and eleven books, including Strategic Market Management, Managing Brand Equity, Building Strong Brands, and Brand Leadership co-authored with Eric Joachimsthaler. Building Strong Brands. As industries turn increasingly hostile, it is clear that strong brand-building skills are needed to survive and prosper.
In David Aaker's pathbreaking book, Managing Brand Equity, managers discovered the value of a brand as a strategic asset and a company's primary source of competitive advantage. Now, in this compelling new work, Aaker uses real brand-building cases from Saturn, General Electric, Kodak, Healthy Choice, McDonald's, and others to demonstrate how strong brands have been created and managed.
A common pitfall of brand strategists is to focus on brand attributes. Aaker shows how to break out of the box by considering emotional and self-expressive benefits and by introducing the brand-as-person, brand-as-organization, and brand-as-symbol perspectives. The twin concepts of brand identity the brand image that brand strategists aspire to create or maintain and brand position that part of the brand identity that is to be actively communicated play a key role in managing the "out-of-the-box" brand.
A second pitfall is to ignore the fact that individual brands are part of a larger system consisting of many intertwined and overlapping brands and subbrands. In the film category, where the bulk of Kodak's sales and profits reside, the brand enjoys both a U. In addition, Kodak is aggressively expanding its presence in the worldwide market, in which it holds a 40 percent share.
The Kodak story shows how brand equity can be created and managed. This chapter provides an overview of brand equity and, in so doing, expands on the conceptualization that was first offered in my book Managing Brand Equity. Although the conceptualization is the same, new research, case studies, and perspectives have been added. Chapter 1 also sets the stage for the key points that will be made in this book about building strong brands.
The chapter's final section includes some observations about why it is so difficult to build strong brands in today's dynamic, competitive marketplaces. The major asset categories are: Brand name awareness 2.
Brand loyalty 3. Perceived quality 4. Brand associations Several aspects of the definition deserve elaboration. First, brand equity is a set of assets. Thus, the management of brand equity involves investment to create and enhance these assets.
Figure , drawn from and discussed in Managing Brand Equity, provides a compact overview of how brand equity generates value. Note that a fifth category of assets, other proprietary assets, is included for completeness in Figure This category is meant to cover assets such as channel relationships and patents that are attached to the brand.
In order to manage brand equity effectively and to make informed decisions about brand-building activities, it is important to be sensitive to the ways in which strong brands create value. Third, brand equity creates value for the customer as well as the firm. The word customer refers to both end users and those at the infrastructure level.
Thus, Hilton needs to be concerned with its image among not only consumers who travel, but also travel agents. And Coke's image among retailers -- particularly its perceived customer acceptance -- can be critical to market success. Finally, for assets or liabilities to underlie brand equity, they must be linked to the name and symbol of the brand.
If the brand's name or symbols should change, some or all of the assets or liabilities could be affected and even lost, although some might be shifted to the new name and symbol. Several observations will be made below about each of the four principal brand asset categories that will serve to recap, extend, and update the extensive discussion that appeared in Managing Brand Equity.
The intent is to provide an understanding about exactly how each category underlies brand equity. If consumers' minds were full of mental billboards -- each one depicting a single brand -- then a brand's awareness would be reflected in the size of its billboard. Awareness is measured according to the different ways in which consumers remember a brand, ranging from recognition Have you been exposed to this brand before?
As psychologists and economists have long understood, however, recognition and recall are signals of much more than just remembering a brand. Goodwrench is much like a "box" in someone's head. As information about GM service programs is received, a person will file it away in the box labeled Mr. After time passes, little in the box might be retrievable.
The person knows, however, if it is heavy or light. He or she also knows in which room it is stored -- the room with the positive boxes that is, objects that have earned positive feelings and attitudes or the one with the negative boxes. Brand Recognition: Familiarity and Liking Recognition reflects familiarity gained from past exposure. Recognition does not necessarily involve remembering where the brand was encountered before, why it differs from other brands, or even what the brand's product class is.
It is simply remembering that there was a past exposure to the brand. Research in psychology has shown that recognition alone can result in more positive feelings toward nearly anything, whether it be music, people, words, or brands. Studies have demonstrated that, even with nonsense words like "postryna" vs. Thus, when a brand choice is made -- even when the decision involves products like computers or advertising agencies -- the familiar brand will have an edge.
In a study that dramatically demonstrated the power of a recognized brand name, respondents were asked to taste each of three samples of peanut butter. One of these samples contained an unnamed superior preferred in blind taste tests 70 percent of the time peanut butter. Another contained an inferior not preferred in taste tests peanut butter labeled with a brand name known to the respondents but neither downloadd nor used by them before.
Remarkably, 73 percent of the respondents selected the brand-name inferior option as being the best-tasting peanut butter. Thus the fact that a name was recognized affected what should have been a very objective taste test, making the peanut butter with a known brand name seem to taste better.
Economists tell us that consumer affinity for the familiar brand is not just an instinctive response. When consumers see a brand and remember that they have seen it before perhaps even several times , they realize that the company is spending money to support the brand. Since it is generally believed that companies will not spend money on bad products, consumers take their recognition as a "signal" that the brand is good. How a company can use such signaling to its advantage is illustrated by the "Intel Inside" program described in the boxed insert.
The familiarity factor can be especially important to the brand that has a familiarity handicap with respect to more visible and established competitors. In such a case, awareness-building may be necessary to reduce this liability. Brand Recall and The Graveyard A brand for example, MetLife is said to have recall if it comes to consumers' minds when its product class for example, life insurance companies is mentioned.
Whether or not a customer recalls your brand can be the deciding factor in getting on a shopping list or receiving a chance to bid on a contract. The relative power of recall versus recognition is shown in Figure , which depicts the "graveyard model" developed by Young and Rubicam Europe under the guidance of Jim Williams. In this model, brands in a product class are plotted on a recognition versus recall graph.
For example, the recall and recognition of each of twenty automobile brands could be measured, and these measurements could be used to position each brand on the graph.
One finding consistent across dozens of product classes is that brands tend to follow the curved line shown in the figure. There are two exceptions, each of which reveals the importance of recall.
Their successive product generations were called the , , , and microprocessors. Unfortunately, Intel did not obtain trademark protection on its numbering system, and thus the and names were available to competitors such as AMD, Chips and Technologies, and Cyrix who made their own chips and applied the X86 name to them.
Intel responded in by encouraging computer firms like IBM, Compaq, Gateway, and Dell to put the "Intel Inside" logo in their ads and on their packages.
The enticement was a cooperative advertising allowance from Intel amounting to 3 percent of the companies' Intel downloads 5 percent if they used the logo on packaging.
An Intel Inside ad is shown in Figure It generated more than ninety thousand pages of ads in an eighteen-month period, which translated to a potential 10 billion exposures. During that period, the recognition of Intel among business end users increased from 46 percent to 80 percent, the same level that Nutrasweet enjoyed among consumers after years of exposure of the Nutrasweet logo.
The brand equity of Intel, as measured by the price discount needed to get a customer to accept a computer without an Intel microprocessor, appeared to be positively affected. During , the first full year of the Intel Inside campaign, Intel's worldwide sales rose 63 percent. Why should the Intel Inside program make a difference to consumers? No reason was provided as to why an Intel microprocessor was better. In fact, it is likely that many customers did not even know what a microprocessor was.
A customer's logic might have been something like this: Computer makers, including industry leaders like IBM and Compaq, are expending a lot of money and effort to tell me that Intel makes a part of this computer. These people are not dumb. Therefore the component must be an important one, and Intel must be a good supplier.
I could do some research to determine what a microprocessor is and how much better Intel is than its competitors, or I could just pay a little more and get Intel. An easy decision -- I will simply rely on the reassurance of the Intel brand name. Interestingly, the Intel Inside campaign actually originated in Japan, where Matsushita used it as a way to build high-tech credibility for its computers.
Japan is a country in which the prestige and visibility of corporate names is extremely important. By building up the Intel corporate name, Matsushita created credibility for itself.
A postscript: The Pentium chip, which succeeded the in late , was found to make some arithmetic errors under certain conditions.
Instead of immediately acknowledging the error and offering to replace the involved products -- few customers may have actually gone through the bother -- Intel claimed the problem was rare and could be ignored. Intel belatedly did adopt a customer-oriented return policy, but only after a storm of damaging protest from the press and the public.
Because Intel's equity was based on awareness and the presumption that a customer did not have to know what happens "inside," the incident had considerable potential for damage. Although initial sales were not affected, recovering from the incident presents a challenge for Intel. One exception is healthy niche brands, which fall below the line because they are not known to a substantial group of consumers, and therefore have relatively low overall recognition.
But because they do have high recall among their respective loyal customer groups, their low recognition is not necessarily an indication of poor performance.
And healthy niche players sometimes have the potential to expand recognition and thus the scope of their customer base.
The second exception is the graveyard, an area in the upper-left-hand corner populated by brands with high recognition but low recall. Being in the graveyard can be deadly: Customers know about the brand, but it will not come to mind when considering a download.
Breaking out of the graveyard can actually be hindered by high recognition, because there is little reason for people to listen to a story however new about a familiar brand. One point of the graveyard model is that high recognition is not necessarily the mark of a strong brand -- it is associated with weak ones as well.
The dynamics of brands located in the upper-middle or upper-right part of the figure can be important predictors of future brand health. Movement toward the graveyard is associated with sliding sales and market share. If, however, the brand is moving away from the graveyard, sales and market share can be expected to increase.
Thus the graveyard model provides evidence that recall is as important as recognition. Brand Name Dominance The ultimate awareness level is brand name dominance where, in a recall task, most customers can only provide the name of a single brand -- e.
Ironically, this ultimate success can be tragic if the brand name becomes such a common label for the product that it is not legally protectable and is lost. Such a fate occurred with Aspirin, Cellophane, Escalator, and Windsurfer. In order to avoid losing a trademark, a firm should begin protecting it early in its life, starting with the selection of the name itself. Beware of descriptive names such as Windows because they become harder to distinguish from the generic product and thus harder to protect.
Sometimes it is helpful and even necessary to create a generic name so that the brand does not become one. The generic name "copier" helped Xerox protect its trademark. Windsurfer belatedly attempted to create the term "sailboard" to mean the generic product.
It is also important to be rigorous about how the brand name is used. Chrysler states that "Jeep is a registered trademark of Chrysler" and never allows the use of Jeep to describe a type of product. Creating Awareness Because consumers are bombarded every day by more and more marketing messages, the challenge of establishing recall and recognition -- and doing so economically -- is considerable.
Two factors are likely to be increasingly important as firms struggle with this challenge. First, given the resources required to create healthy awareness levels, a broad sales base is usually an enormous asset. It is expensive and often impossible to support brands with relatively small unit sales and a life measured in years instead of decades. For this reason, corporate brands such as General Electric, Hewlett-Packard, Honda, or Siemens have an advantage when it comes to building presence and awareness, because multiple businesses support the brand name.
Firms are thus attempting to reduce the number of their brands in order to provide focus to brand-building efforts. More on this subject and on the value of spreading brands over different businesses follows in Chapters 8 and 9. Second, in the coming decades, the firms that become skilled at operating outside the normal media channels -- by using event promotions, sponsorships, publicity, sampling, and other attention-getting approaches -- will be the most successful in building brand awareness.
For example, WordPerfect created instant visibility and credibility in Europe for its word processing software by sponsoring one of the top three bicycle racing teams. Media coverage of the team, both during and outside the races, established WordPerfect as a recognized brand. A yellow race car sponsored by Kodak similarly created over a billion individual impressions in Getting consumers to recognize and recall your brand thus can considerably enhance brand equity.
As will be emphasized throughout this book, however, simple recall, recognition, and familiarity are only part of the awareness challenge. The strongest brands are managed not for general awareness, but for strategic awareness.
It is one thing to be remembered; it is quite another to be remembered for the right reasons and to avoid being remembered for the wrong reasons. Perceived Quality Drives Financial Performance There is a pervasive thirst to show that investments in brand equity will pay off. Although linking financial performance to any intangible asset whether it is people, information technology, or brand equity is difficult, three studies have demonstrated that perceived quality does drive financial performance: Perceived quality contributes to profitability in part by enhancing prices and market share.
The relationship holds for Kmart as well as Tiffany: Improve perceived quality, and ROI will improve. Figure portrays the relative impact of changes in perceived quality and ROI on stock return. Remarkably, the impact of perceived quality was nearly as great as that of ROI an acknowledged influence on stock return , even when the researchers controlled for advertising expenditures and awareness levels. Perceived Quality as a Strategic Thrust Perceived quality is a key strategic variable for many firms.
Total quality management TQM or one of its relatives has been central to many firms for the past decade, and perceived quality is usually the end goal of TQM programs. Many firms explicitly consider quality to be one of their primary values and include it in their mission statement. For example, one of the guiding principles put forth by IBM's president, Lou Gerstner, is an "overriding commitment to quality.
Perceived quality is often the key positioning dimension for corporate brands such as Toshiba or Ford and other brands that range over product classes such as Weight Watchers, Kraft, and store brands such as Safeway Select. Because these brands span product classes, they are less likely to be driven by functional benefits, and perceived quality is likely to play a larger role. Further, for many brands perceived quality defines the competitive milieu and their own position within that milieu.
Some brands are price brands, and others are prestige or premium brands. Within those categories, the perceived quality position is often the defining point of differentiation. Perceived Quality as a Measure of "Brand Goodness" Perceived quality is usually at the heart of what customers are downloading, and in that sense, it is a bottom-line measure of the impact of a brand identity.
More interesting, though, perceived quality reflects a measure of "goodness" that spreads over all elements of the brand like a thick syrup. Even when the brand identity is defined by functional benefits, most studies will show that perceptions about those benefits are closely related to perceived quality. When perceived quality improves, so generally do other elements of customers' perception of the brand.
Creating Perceptions of Quality Achieving perceptions of quality is usually impossible unless the quality claim has substance. Generating high quality requires an understanding of what quality means to customer segments, as well as a supportive culture and a quality improvement process that will enable the organization to deliver quality products and services. Creating a quality product or service, however, is only a partial victory; perceptions must be created as well.
Perceived quality may differ from actual quality for a variety of reasons. First, consumers may be overly influenced by a previous image of poor quality. Because of this, they may not believe new claims, or they may not be willing to take the time to verify them. Suntory Old Whiskey, Audi automobiles, and Schlitz beer all found that making excellent products was not enough to erase consumer doubts raised by previously tarnished quality.
Thus it is critical to protect a brand from gaining a reputation for shoddy quality from which recovery is difficult and sometimes impossible.
Second, a company may be achieving quality on a dimension that consumers do not consider important. When Citibank dramatically increased back-office efficiency by automating its processing activities, the expected impact on customer evaluations was disappointing. Customers, it turned out, either did not notice the changes or did not recognize any benefit from them. There is a need to make sure that investments in quality occur in areas that will resonate with customers.
Third, consumers rarely have all the information necessary to make a rational and objective judgment on quality -- and even if they do have the information, they may lack the time and motivation to process it. As a result, they rely on one or two cues that they associate with quality; the key to influencing perceived quality is understanding and managing these cues properly.
Thus, it is important to understand the little things that consumers use as the basis for making a judgment of quality. If consumers kick a car's tires to judge its sturdiness, then the tires had better be sturdy. Fourth, because consumers may not know how best to judge quality, they may be looking at the wrong cues.
For example, jewelry, stores that cater to first-time diamond downloaders must educate consumers that quality is not necessarily reflected in price tags or carat claims. A metaphor or visual image can help consumers see the context in the right way. This metaphor provides some insight into the brand management problem and the cast of characters.
The brand manager is the captain of the ship, who must know where his or her ship is going and keep it on course. The other brands in the firm, like other ships in a fleet, need to be coordinated to achieve the maximum effectiveness.
Competitors correspond to enemy ships; knowing their location, direction, and strength is critical to achieving strategic and tactical success. The perceptions and motivations of customers are like the winds: It is important to know their direction, their strength, and possible changes.
There are at least two reasons, however, why it is appropriate and useful to include it. First, a brand's value to a firm is largely created by the customer loyalty it commands. Second, considering loyalty as an asset encourages and justifies loyalty-building programs which then help create and enhance brand equity. Loyalty and Brand Value Brand loyalty is a key consideration when placing a value on a brand that is to be bought or sold, because a highly loyal customer base can be expected to generate a very predictable sales and profit stream.
In fact, a brand without a loyal customer base usually is vulnerable or has value only in its potential to create loyal customers. Further, the impact of brand loyalty on marketing costs is often substantial: It is simply much less costly to retain customers than to attract new ones. A common and expensive mistake is to seek growth by enticing new customers to the brand while neglecting existing ones. The loyalty of existing customers also represents a substantial entry barrier to competitors in part because the cost of enticing customers to change loyalties is often prohibitively expensive.
All organizations should estimate the value of their existing customers. The results are usually surprising and instructive. Reducing defections by just 5 percent generated 85 percent more profits in one bank's branch system, 50 percent more in an insurance brokerage, and 30 percent more in an auto-service chain.
At MBNA, a financial services company, it was estimated that a 5 percent increase in customer retention increased the company's profits by 60 percent by the fifth year. Credit card companies have found that newly acquired customers use the card slowly at first, but that in the second year the usage grows and the card becomes more profitable.
A similar trend was found in more than one hundred companies in two dozen industries. For one industrial distributor, net sales per account continue to rise into the nineteenth year of the relationship. Loyalty Segmentation A focus on loyalty segmentation provides strategic and tactical insights that will assist in building strong brands.
A market can usually be divided into the following groups: The challenge is to improve the brand's loyalty profile: Two segments in which firms often underinvest are the passively loyals and the committed customers. The passively loyal customer is often neglected or taken for granted. Active management of this segment does not really involve identity building; rather, it requires efforts to avoid distribution gaps or out-of-stocks that might precipitate a decision to switch brands.
It also means having the sizes, colors, or flavors that might be desired, even though providing a wide line may seem economically unattractive. The appropriate analysis of line breadth needs to include the impact upon the habitual behavior of the passively loyal segment. At the other extreme are the committed or highly loyal customers.
Firms also tend to take this group for granted. Yet there may be a significant potential to increase business from the very loyal. For example, the loyal Marriott customer might be encouraged to select Marriott even more often with an improved portfolio of business support services such as fax machines in rooms. Further, there is a risk that loyal customers can be enticed away by a competitor if the performance of the product or service is not improved. For these reasons, firms should avoid diverting resources from the loyal core to the noncustomers and price switchers.
Enhancing Loyalty One approach to enhancing the loyalty of fence sitters and the committed is to develop or strengthen their relationship with the brand. Brand awareness, perceived quality, and an effective, clear brand identity can contribute to this goal Increasingly, however, programs that can build loyalty more directly are becoming important and even critical in many product classes.
Included among these are frequent-downloader programs and customer clubs. The GM MasterCard, launched in , provides customers with a rebate on the download of a GM car or truck excluding Saturn equal to 5 percent of their credit card downloads.
After the first year and a half, GM had sold , cars and trucks to these downloaders and had issued more than 12 million cards. A frequent-downloader program provides direct and tangible reinforcement for loyal behavior. Not only do such programs enhance the value proposition of a brand and often its point of differentiation as well, they also affirm the commitment that the firm is making to loyal customers. It is clear that their loyalty is not taken for granted.
Customer Clubs A potentially more intense loyalty level can be precipitated by customer clubs. Kids who joined the Nintendo Fun Club and received newsletters and access to on-call advisers , for example, were rabid Nintendo users and the heart of the firm's early success. Claridge Hotel and Casino has without question increased the intensity of customer loyalty with its ,member Claridge CompCard Gold club.
The club's members receive discounts, news of upcoming events, and special offers ranging from monogrammed bathrobes to door-to-door limo service. Apple Computer users groups provide support and assistance, as well as the chance for customers to express their interest in computers and their loyalty to Apple.
Members received a regular full-color newsletter with editorials about Tuscany and Italy, information about the lifestyle of Italians, pasta recipes, and discount vouchers. Membership benefits also included a toll-free line for cooking advice, chances to win an invitation to visit the original Casa Buitoni villa in Tuscany, cookery weekends, opportunities to sample new products, and numerous suggestions as to how members could create their own events.
Like the frequent-downloader programs, a customer club provides visible evidence that the firm really cares about its clientele. While the frequent-downloader program is somewhat passive and inclusive, however, a customer club is potentially more involving. The customer club provides a vehicle by which the customer can identify with the brand, express his or her brand perceptions and attitude, and experience the sharing of a brand relationship with like-minded people.
Database Marketing A by-product of frequent-downloader programs and clubs, customer data can be used for database marketing targeted at narrow, focused segments.
News about new products and special promotions can be tailored to those segments most likely to respond. Targeted customers will feel the firm is connecting with them individually, and the brand-customer relationship will become stronger.
Each customer is invited to be a member of "Club Bev" and is given a card that is used to track all downloads. In addition to a newsletter and a frequent-downloader program, customers receive personal notification of special downloads, products, or events that are relevant to people with their download profile.
In addition to matching products to customers, the interaction pattern shows that the store is involved enough to care about the interests of each individual customer. These associations might include product attributes, a celebrity spokesperson, or a particular symbol. Brand associations are driven by the brand identity -- what the organization wants the brand to stand for in the customer's mind.
A key to building strong brands, then, is to develop and implement a brand identity. One of the goals of this book is to expand the concept of brand identity. A common pitfall is to focus on the product attributes and tangible functional benefits of a brand. Chapter 3, in which brand identity is formally defined and discussed, encourages strategists to expand their concept of brand identity by 1 considering emotional and self-expressive benefits as well as functional benefits, and 2 employing four brand identity perspectives: Chapter 6 covers the brand identity implementation process and introduces strategic brand analysis and brand positioning.
Chapter 7 discusses the delicate problems of managing brand associations over time. One, just discussed, is to develop the concept of brand identity: How can you create an identity that is clear, connects with the customer, can be implemented so that its potential is realized, and is rich enough to provide guidance to those implementing it?
How do you manage it over time in the face of a shifting environment and changing competitors and customers? Chapters 3, 4, 5, 6, and 7 will address these questions. A second objective is to move beyond the management of a brand to the management of brand systems. Most organizations need to manage not only multiple brands but also large varieties of subbrands, ingredient brands, brand extensions, co-brands, and branded services. Further, each brand can take on different roles, which vary from simply being an endorser such as Marriott's role in "Fairfield by Marriott" to playing a driver role that is, being the brand that will drive the download decision.
Management of brand systems involves determining the roles that brands play and understanding how they relate to and impact each other. Chapters 8 and 9 will sort out these issues. A third objective of the book is to address the critical measurement issue. How do you measure brand equity, especially across product classes and markets? Several major efforts to do just that will be described in Chapter A fourth objective is to consider how to develop organizational forms and structures that will be effective at building brands.
A variety of approaches will be discussed in Chapter The overall goal of this book is to help managers build strong brands. Because knowing the terrain is indispensable to traversing it successfully, it is useful to understand why this task is hard and what pressures the brand builder must face. Therefore, I now turn to a general discussion of why it is hard to build brands.
It is not easy to build brands in today's environment. The brand builder who attempts to develop a strong brand is like a golfer playing on a course with heavy roughs, deep sandtraps, sharp doglegs, and vast water barriers. It is difficult to score well in such conditions. The brand builder can be inhibited by substantial pressures and barriers, both internal and external.
To be able to develop effective brand strategies, it is useful to understand these pressures and barriers. Toward that end, eight different factors that make it difficult to build brands will be discussed. The first, pressure to compete on price, directly affects the motivation to build brands. The second reason, the proliferation of competitors, reduces the positioning options available and makes implementation less effective.
The third and fourth reasons, the fragmentation in media and markets and the involvement of multiple brands and products, describe the context of building brands today, a context that involves a growing level of complexity.
The remaining reasons reflect internal pressures that inhibit brand building. The fifth reason, the temptation to change a sound brand strategy, is particularly insidious because it is the management equivalent of shooting yourself in the foot.
The sixth and seventh reasons, the organizational bias against innovation and the pressure to invest elsewhere, are special problems Facing strong brands.
The final reason is the pressure for short-term results that pervades organizations. The irony is that many of the formidable problems facing brand builders today are caused by internal forces and biases that are under the control of the organization. The fact that many brands fail to reach their potential or maintain their equity is neither surprising nor puzzling when the various pressures against building strong brands are examined.
The real curiosity may be that strong brands exist at all in the face of these pressures. Pressure to Compete on Price There are enormous pressures on nearly all firms to engage in price competition.
In industry after industry -- from computers to cars to frozen dinners to airlines to soft drinks -- the picture in today's market is the same: Price competition is at center stage, driven by the power of strong retailers, value-sensitive customers, reduced category growth, and overcapacity often caused by new entrants and by old competitors hanging on, sometimes via bankruptcy. In presentations on brand equity, I often ask executives to raise their hand if their industry is one in which brutal price competition is not the norm or becoming the norm.
Of the thousands of executives who have attended these presentations, only one person has ever held up his hand -- the director of the Panama Canal!