How successful brands use Monitoring Brand Assets©
....to find levers for growth, make decisions and improve their ROI?
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In 1988, the Marketing Science Institute (MSI) established the premise that defining, measuring and managing brand value was a priority. 25 years have passed since that day! Significant research has been undertaken in order to better define and measure the concept of brand value, yet it is now obvious that the program's third component has been sidelined. Paradoxically, while the brand is an essential part of any marketing approach, brand capital all too often becomes a financial tool (as an asset), an investment tool (as capital), or a strategic tool (as a resource). Our goal is to demonstrate how an approach based on the comparative evaluation of brands from a consumer standpoint and the analysis of collected data geared towards the optimization of branding action plans can help an organization reposition its brand with emphasis on more managerial focus. In this way, marketing efforts can return to their true mission: the building of strong brands.
What is the central message of your marketing approach? What is important, useful, new, or counterintuitive about your idea? Why do managers need to know about it?
Brand value has become an essential asset for all commercial organizations, as well as the focus of numerous investments (innovation, R&D, communication, etc.), yet brand value management is rarely the result of a fully integrated process. The creation of a Brand Manager role has definitely been a sign of progress, yet it also brings to light the lack of operational tools in this area. In this context, the Monitoring Brand Assets© approach – which rests upon consumer data collection, growth factor models and action plan simulation software – bridges the gap by allowing for true brand management in close connection to market realities and client/prospect expectations.
More precisely, three specific commitments form the basis of the approaches' originality. On the one hand, brand value is measured from a consumer standpoint, not from a corporate point of view, allowing for the approach to be focused on the market. On the other hand, brand value is measured based on a series of parsimonious indicators (18 indicators grouped into 5 families) with one distinctive characteristic: they can be used for a wide variety of business sectors, which is conducive to a more generalized approach. Finally, a model is created based on the strength of the links between these indicators, in order to simulate a "winning" strategy and create a scenario which allows for the quantified target to be reached as closely as possible (for example: penetration rate, market share, retention rate, etc.) while minimizing both costs and risks (the reactions of competitors and the impact of a changing environment). Strategic and operational thinking are now fully integrated into a generalized perspective.
How can your idea be applied in business today?
Our tool, and in a more general sense it's underlying approach, may be called upon to provide organizations with operational knowledge: in any given market, which is defined as a full set of competing brands, how can they sort action priorities into a hierarchy, from reputation to image, distribution strength, product quality and offer differentiation? With the return of the marketing approach in the management of brand strategies. A structured, three-step dynamic process is replacing static brand value assessments, and includes measuring the "zero mark", implementing corrective actions and reporting achievements. Taking into account upstream resources during the simulation allows for performance optimization and an effective determination of brand development ROI.
The decision of measuring all 18 indicators as indexes enables us to compare one brand's score with the performance of other brands in the marketplace (benchmarking), to quantify the growth of these results over time (tracking), and finally to compare one brand's scores across several markets (portfolio management). Therefore, this tool can cater to marketing management, strategic management and general management, depending on the issue at hand.
For which kinds of companies would the idea not work well? For which kinds of companies would it work especially well? Why?
The approach can be adapted to a wide variety of industries, as long as brand assets are a strategic business resource. That being said, it is best deployed in those industries where branding is particularly vital. Over the past 8 years, the approach has been implemented in nearly 30 countries, for over 200 brands belonging to 40 different international groups in the following industries: fashion (purses, shoes, and luxury apparel), cosmetics (perfumes, skin care products and makeup) and selective distribution.
What research have you conducted to support the argument in your approach?
The database of standards gathers the comparative performance of 250 brands across 15 industries, located in 30 countries in Asia, Europe and North-America. This database is one of the first bodies of normative data which describes the luxury and cosmetics industries.
The model is based upon 18 measurement indicators with psychometric properties which have been validated in a cross-cultural context. The simulation software uses structural equations pathway modeling (PLS) to process aggregated data for predictive purposes. In the end, brand value can be summarized into 5 major components: an organization's ability to make itself known, to attract consumers and to differentiate itself (the "attitude" dimension), which are explanatory factors of the organization's growth and buy-out potential (the conative dimension).
On what previous work does this idea build? What is the source of your authority? What academic, professional, or personal experience will you draw on?
This article is based on 20 years of academic work by Pr Philippe Jourdan, an associate professor, focused on brand value, and on practical experience gained through consulting services (Promise Consulting Inc.) for top international brands in the luxury, fashion and cosmetics industries (Dior, Louis Vuitton, Fendi, Chloé, Kenzo, Chanel, Givenchy, Guerlain, Shiseido, Benefit, Makeup for Ever, Sephora, Douglas, Nocibé, etc.).
The Monitoring Brand Assets© model, which supports the consulting approach with the same name, summarizes, and also extends, the research efforts that are either directed or initiated by David A. Aaker and Kevin L. Keller. It integrates Aaker's operational experience, as well as Keller's more conceptual knowledge. Keller's exploratory model in particular is also the subject of a robust empirical validation.
Philippe Jourdan graduated from HEC Paris and holds a doctorate in Management Sciences and is a university professor. He is a founding partner of Promise Consulting. Jean-Claude Pacitto also holds a doctorate in Management Sciences and is a university professor. He sits on the scientific council of Promise Consulting.