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Brand report-card

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  • 1. The Brand Report Cardby Kevin Lane Keller Reprint r00104
  • 2. JANUARY– FEBRUARY 2000 Reprint NumberMICHAEL MACCOBY Narcissistic Leaders: The Incredible Pros, the Inevitable Cons R00105C.K. PRAHALAD AND Co-opting Customer Competence R00108VENKATRAM RAMASWAMYKATHLEEN M. EISENHARDT AND Coevolving: At Last, a Way to Make Synergies Work R00103D. CHARLES GALUNICPETER CAPPELLI A Market-Driven Approach to Retaining Talent R00101SUZY WETLAUFER Common Sense and Conflict: R00111 An Interview with Disney’s Michael EisnerDEBRA E. MEYERSON AND A Modest Manifesto for Shattering the Glass Ceiling R00107JOYCE K. FLETCHERETIENNE C. WENGER AND WILLIAM M. SNYDER Communities of Practice: The Organizational Frontier R00110 FORETHOUGHTJERRY STERNIN AND ROBERT CHOO The Power of Positive Deviancy F00101ANS KOLK Green Reporting F00102A CONVERSATION WITH KATHLEEN VALLEY The Electronic Negotiator F00103HERMANN SIMON AND MAX OTTE The New Atlantic Century F00104DICK GROTE Performance Appraisal Reappraised F00105JOHN PHILIP JONES The Mismanagement of Advertising F00106REGINA FAZIO MARUCA AND HBR CASE STUDYJOHN M. MILHAVEN When the Boss Won’t Budge R00106ADRIAN J. SLYWOTZKY; CLAYTON M. PERSPECTIVESCHRISTENSEN AND RICHARD S. TEDLOW; The Future of Commerce R00112AND NICHOLAS G. CARRKEVIN G. RIVETTE AND THINKING ABOUT...DAVID KLINE Discovering New Value in Intellectual Property R00109KEVIN LANE KELLER MANAGER’S TOOL KIT The Brand Report Card R00104J. BRADFORD DELONG AND BOOK IN REVIEWA. MICHAEL FROOMKIN Beating Microsoft at Its Own Game R00102
  • 3. MANAGER’S TOOL KIT The world’s strongest brands share ten attributes. How does your brand measure up? by Kevin Lane Keller B uilding and properly managing brand equity has become a priority for companies of all sizes, in all types of industries, in all types of markets. After all, from strong brand equity flow customer loy- alty and profits. The rewards of having a strong brand are clear. The problem is, few managers are able to step back and assess their brand’s particular strengths and weaknesses objectively. Most have a good sense of one or two areas in which their brand may excel or may need help. But if pressed, many (understandably) would find it difficult even to identify all of the fac- tors they should be considering. When you’re im- mersed in the day-to-day management of a brand, it’s not easy to keep in perspective all the parts that affect the whole. In this article, I’ll identify the ten characteristics that the world’s strongest brands share and construct a brand report card – a systematic way for managers to think about how to grade their brand’s performance for each of those characteristics. The report card can help you identify areas that need improvement, recog- nize areas in which your brand is strong, and learnCopyright © 1999 by the President and Fellows of Harvard College. All rights reserved. 3
  • 4. MANAGER’S TOOL KIT • Th e B ra n d R e p o r t Ca rd more about how your particular duce, something to be bagged and brand is configured. Constructing sent home with the groceries. We similar report cards for your com- stayed one big step away from the petitors can give you a clearer picture heart and soul of what coffee has of their strengths and weaknesses. One caveat: Identifying weak spots meant throughout centuries.” And so Starbucks began to focus Rating for your brand doesn’t necessarily its efforts on building a coffee bar mean identifying areas that need more attention. Decisions that might culture, opening coffee houses like those in Italy. Just as important, the Your Brand seem straightforward – “We haven’t company maintained control over paid much attention to innovation: the coffee from start to finish – from let’s direct more resources toward the selection and procurement of the R&D” – can sometimes prove to be beans to their roasting and blending Rate your brand on a scale serious mistakes if they undermine to their ultimate consumption. The of one to ten (one being another characteristic that custom- extreme vertical integration has paid extremely poor and ten ers value more. off. Starbucks locations thus far have being extremely good) for successfully delivered superior bene- The Top Ten Traits each characteristic below. fits to customers by appealing to all Then create a bar chart The world’s strongest brands share five senses – through the enticing these ten attributes: aroma of the beans, the rich taste of that reflects the scores. Use 1. The brand excels at delivering the coffee, the product displays and the bar chart to generate the benefits customers truly desire. attractive artwork adorning the discussion among all those Why do customers really buy a prod- walls, the contemporary music play- individuals who participate uct? Not because the product is a ing in the background, and even the in the management of collection of attributes but because cozy, clean feel of the tables and your brands. Looking at those attributes, together with the chairs. The company’s startling suc- the results in that manner brand’s image, the service, and many cess is evident: The average Star- other tangible and intangible factors, bucks customer visits a store 18 should help you identify create an attractive whole. In some times a month and spends $3.50 a areas that need improve- cases, the whole isn’t even some- visit. The company’s sales and prof- ment, recognize areas in thing that customers know or can say its have each grown more than 50% which you excel, and learn they want. annually through much of the 1990s. more about how your partic- Consider Starbucks. It’s not just a 2. The brand stays relevant. In ular brand is configured. cup of coffee. In 1983, Starbucks was strong brands, brand equity is tied It can also be helpful to a small Seattle-area coffee retailer. both to the actual quality of the prod- Then while on vacation in Italy, uct or service and to various intangi- create a report card and chart Howard Schultz, now Starbucks ble factors. Those intangibles include for competitors’ brands chairman, was inspired by the ro- “user imagery” (the type of person simply by rating those mance and the sense of community who uses the brand); “usage imagery” brands based on your own he felt in Italian coffee bars and cof- (the type of situations in which the perceptions, both as a com- fee houses. The culture grabbed him, brand is used); the type of personality petitor and as a consumer. and he saw an opportunity. the brand portrays (sincere, exciting, As an outsider, you may “It seemed so obvious,” Schultz competent, rugged); the feeling that know more about how their says in the 1997 book he wrote with the brand tries to elicit in customers Dori Jones Yang, Pour Your Heart (purposeful, warm); and the type of brands are received in the Into It. “Starbucks sold great coffee relationship it seeks to build with its marketplace than they do. beans, but we didn’t serve coffee by customers (committed, casual, sea- Keep that in mind as you the cup. We treated coffee as pro- sonal). Without losing sight of their evaluate your own brand. core strengths, the strongest brands Try to look at it through the Kevin Lane Keller is the E.B. Os- stay on the leading edge in the prod- eyes of consumers’ rather uct arena and tweak their intangi- born Professor of Marketing at the than through your own bles to fit the times. Gillette, for example, pours mil- knowledge of budgets, Amos Tuck School of Business at lions of dollars into R&D to ensure teams, and time spent on Dartmouth College in Hanover, that its razor blades are as technolog- various initiatives. ically advanced as possible, calling New Hampshire. He is the author of attention to major advances through Strategic Brand Management (Pren- subbrands (Trac II, Atra, Sensor, Mach3) and signaling minor im- tice-Hall, 1998). provements with modifiers (Atra 4 harvard business review January–February 2000
  • 5. Th e B ra n d R e p o r t Ca rd • MANAGER’S TOOL KITscore The brand excels at delivering the benefits The brand makes use of and coordinates a full customers truly desire. repertoire of marketing activities to build equity.Have you attempted to uncover unmet consumer needs Have you chosen or designed your brand name, logo,and wants? By what methods? Do you focus relentlessly symbol, slogan, packaging, signage, and so forth toon maximizing your customers’ product and service maximize brand awareness? Have you implementedexperiences? Do you have a system in place for getting integrated push and pull marketing activities thatcomments from customers to the people who can effect target both distributors and customers? Are you awarechange? of all the marketing activities that involve your brand? Are the people managing each activity aware of one another? Have you capitalized on the unique capabili- The brand stays relevant. ties of each communication option while ensuring that Have you invested in product improvements that the meaning of the brand is consistently represented?provide better value for your customers? Are you intouch with your customers’ tastes? With the current The brand’s managers understand what themarket conditions? With new trends as they apply brand means to consumers.to your offering? Are your marketing decisions based Do you know what customers like and don’t like abouton your knowledge of the above? a brand? Are you aware of all the core associations people make with your brand, whether intentionally The pricing strategy is based on consumers’ created by your company or not? Have you created perceptions of value. detailed, research-driven portraits of your targetHave you optimized price, cost, and quality to meet or customers? Have you outlined customer-drivenexceed customers’ expectations? Do you have a system boundaries for brand extensions and guidelines forin place to monitor customers’ perceptions of your marketing programs?brand’s value? Have you estimated how much valueyour customers believe the brand adds to your product? The brand is given proper support, and that support is sustained over the long run. Are the successes or failures of marketing programs The brand is properly positioned. fully understood before they are changed? Is the brandHave you established necessary and competitive points given sufficient R&D support? Have you avoided theof parity with competitors? Have you established temptation to cut back marketing support for the branddesirable and deliverable points of difference? in reaction to a downturn in the market or a slump in sales? The brand is consistent.Are you sure that your marketing programs are not The company monitors sources of brand equity.sending conflicting messages and that they haven’t Have you created a brand charter that defines thedone so over time? Conversely, are you adjusting your meaning and equity of the brand and how it should beprograms to keep current? treated? Do you conduct periodic brand audits to assess the health of your brand and to set strategic direction? Do you conduct routine tracking studies to evaluate The brand portfolio and hierarchy make sense. current market performance? Do you regularlyCan the corporate brand create a seamless umbrella distribute brand equity reports that summarize allfor all the brands in the portfolio? Do the brands in that relevant research and information to assist marketersportfolio hold individual niches? How extensively do in making decisions? Have you assigned explicitthe brands overlap? In what areas? Conversely, do the responsibility for monitoring and preserving brandbrands maximize market coverage? Do you have a brand equity?hierarchy that is well thought out and well understood?harvard business review January–February 2000 5
  • 6. MANAGER’S TOOL KIT • Th e B ra n d R e p o r t Ca rd Plus, SensorExcel). At the same pany reported its highest profit mar- helped Visa stake out a formidable time, Gillette has created a consis- gins in 21 years. position for its brand. Visa became tent, intangible sense of product su- 4.The brand is properly positioned. the consumer card of choice for fam- periority with its long-running ads, Brands that are well positioned oc- ily and personal shopping, for per- “The best a man can be,” which are cupy particular niches in consumers’ sonal travel and entertainment, and tweaked through images of men at minds. They are similar to and dif- even for international travel, a for- work and at play that have evolved ferent from competing brands in cer- mer American Express stronghold. over time to reflect contemporary tain reliably identifiable ways. The Of course, branding isn’t static, trends. most successful brands in this regard and the game is even more difficult These days, images can be tweaked keep up with competitors by creat- when a brand spans many product in many ways other than through tra- ing points of parity in those areas categories. The mix of points of par- ditional advertising, logos, or slogans. where competitors are trying to find ity and point of difference that “Relevance” has a deeper, broader an advantage while at the same time works for a brand in one category meaning in today’s market. Increas- creating points of difference to may not be quite right for the same ingly, consumers’ perceptions of a achieve advantages over competi- brand in another. company as a whole and its role in so- tors in some other areas. 5. The brand is consistent. Main- ciety affect a brand’s strength as well. The Mercedes-Benz and Sony taining a strong brand means striking Witness corporate brands that very brands, for example, hold clear ad- the right balance between continu- visibly support breast cancer research vantages in product superiority and ity in marketing activities and the or current educational programs of match competitors’ level of service. kind of change needed to stay rele- one sort or another. Saturn and Nordstrom lead their re- vant. By continuity, I mean that the 3. The pricing strategy is based spective packs in service and hold brand’s image doesn’t get muddled on consumers’ perceptions of value. their own in quality. Calvin Klein or lost in a cacophony of marketing The right blend of product quality, and Harley-Davidson excel at pro- efforts that confuse customers by design, features, costs, and prices is viding compelling user and usage sending conflicting messages. very difficult to achieve but well imagery while offering adequate or Just such a fate befell the Michelob worth the effort. Many managers are even strong performance. brand. In the 1970s, Michelob ran ads woefully unaware of how price can and should relate to what customers Maintaining a strong brand means striking the think of a product, and they there- fore charge too little or too much. right balance between continuity and change. For example, in implementing its value-pricing strategy for the Cas- Visa is a particularly good example featuring successful young profes- cade automatic-dishwashing deter- of a brand whose managers under- sionals that confidently proclaimed, gent brand, Procter & Gamble made stand the positioning game. In the “Where you’re going, it’s Michelob.” a cost-cutting change in its formu- 1970s and 1980s, American Express The company’s next ad campaign lation that had an adverse effect on maintained the high-profile brand trumpeted, “Weekends were made the product’s performance under in the credit card market through a for Michelob.” Later, in an attempt certain – albeit somewhat atypical – series of highly effective marketing to bolster sagging sales, the theme water conditions. Lever Brothers programs. Trumpeting that “mem- was switched to “Put a little week- quickly countered, attacking Cas- bership has its privileges,” Ameri- end in your week.” In the mid-1980s, cade’s core equity of producing “vir- can Express came to signify status, managers launched a campaign tually spotless” dishes out of the prestige, and quality. telling consumers that “The night dishwasher. In response, P&G im- In response, Visa introduced the belongs to Michelob.” Then in 1994 mediately returned to the brand’s Gold and the Platinum cards and we were told, “Some days are better old formulation. The lesson to P&G launched an aggressive marketing than others,” which went on to ex- and others is that value pricing campaign to build up the status of plain that “A special day requires a should not be adopted at the expense its cards to match the American Ex- special beer.” That slogan was subse- of essential brand-building activities. press cards. It also developed an ex- quently changed to “Some days were By contrast, with its well-known tensive merchant delivery system to made for Michelob.” shift to an “everyday low pricing” differentiate itself on the basis of Pity the poor consumers. Previous (EDLP) strategy, Procter & Gamble superior convenience and accessi- advertising campaigns simply re- did successfully align its prices with bility. Its ad campaigns showcased quired that they look at their cal- consumer perceptions of its prod- desirable locations such as famous endars or out a window to decide ucts’ value while maintaining ac- restaurants, resorts, and events that whether it was the right time to ceptable profit levels. In fact, in the did not accept American Express drink Michelob; by the mid-1990s, fiscal year after Procter & Gamble while proclaiming, “Visa. It’s every- they had to figure out exactly what switched to EDLP (during which it where you want to be.” The aspira- kind of day they were having as well. also worked very hard to streamline tional message cleverly reinforced After receiving so many different operations and lower costs), the com- both accessibility and prestige and messages, consumers could hardly 6 harvard business review January–February 2000
  • 7. Th e B ra n d R e p o r t Ca rd • MANAGER’S TOOL KITbe blamed if they had no idea when BMW name. At the same time, BMW 7. The brand makes use of and co-they were supposed to drink the created well-differentiated subbrands ordinates a full repertoire of market-beer. Predictably, sales suffered. through its 3, 5, and 7 series, which ing activities to build equity. At itsFrom a high in 1980 of 8.1 million suggest a logical order and hierarchy most basic level, a brand is made upbarrels, sales dropped to just 1.8 mil- of quality and price. of all the marketing elements thatlion barrels by 1998. General Motors, by contrast, still can be trademarked – logos, symbols, 6. The brand portfolio and hierar- struggles with its brand portfolio slogans, packaging, signage, and sochy make sense. Most companies do and hierarchy. In the early 1920s, on. Strong brands mix and matchnot have only one brand; they create Alfred P. Sloan decreed that his com- these elements to perform a numberand maintain different brands for pany would offer “a car for every of brand-related functions, such asdifferent market segments. Single purse and purpose.” This philosophy enhancing or reinforcing consumerproduct lines are often sold under led to the creation of the Cadillac, awareness of the brand or its imagedifferent brand names, and different Oldsmobile, Buick, Pontiac, and and helping to protect the brand bothbrands within a company hold dif- Chevrolet divisions. The idea was competitively and legally.ferent powers. The corporate, or that each division would appeal to Managers of the strongest brandscompanywide, brand acts as an um- a unique market segment on the also appreciate the specific roles thatbrella. A second brand name under basis of price, product design, user different marketing activities canthat umbrella might be targeted at imagery, and so forth. Through the play in building brand equity. Theythe family market. A third brand years, however, the marketing over- can, for example provide detailedname might nest one level below the lap among the five main GM divi- product information. They can show consumers how and why a productBoundaries are important. Overlapping two is used, by whom, where, and when. They can associate a brand with abrands in the same portfolio can be dangerous. person, place, or thing to enhance or refine its image.family brand and appeal to boys, for sions increased, and the divisions’ Some activities, such as traditionalexample, or be used for one type of distinctiveness diminished. In the advertising, lend themselves best toproduct. mid-1980s, for example, the com- “pull” functions –those meant to cre- Brands at each level of the hierar- pany sold a single body type (the J- ate consumer demand for a givenchy contribute to the overall equity body) modified only slightly for the product. Others, like trade promo-of the portfolio through their indi- five different brand names. In fact, tions, work best as “push” pro-vidual ability to make consumers advertisements for Cadillac in the grams – those designed to help pushaware of the various products and 1980s actually stated that “motors the product through distributors.foster favorable associations with for a Cadillac may come from other When a brand makes good use of allthem. At the same time, though, divisions, including Buick and Olds- its resources and also takes particu-each brand should have its own mobile.” lar care to ensure that the essence ofboundaries; it can be dangerous to In the last ten years, the company the brand is the same in all activi-try to cover too much ground with has attempted to sharpen the divi- ties, it is hard to beat.one brand or to overlap two brands sions’ blurry images by reposition- Coca-Cola is one of the best exam-in the same portfolio. ing each brand. Chevrolet has been ples. The brand makes excellent use The Gap’s brand portfolio pro- positioned as the value-priced, entry- of many kinds of marketing activi-vides maximum market coverage level brand. Saturn represents no- ties. These include media advertis-with minimal overlap. Banana Re- haggle customer-oriented service. ing (such as the global “Alwayspublic anchors the high end, the Gap Pontiac is meant to be the sporty, Coca-Cola” campaign); promotionscovers the basic style-and-quality performance-oriented brand for (the recent effort focused on the re-terrain, and Old Navy taps into the young people. Oldsmobile is the turn of the popular contour bottle,broader mass market. Each brand brand for larger, medium-priced for example); and sponsorship (itshas a distinct image and its own cars. Buick is the premium, “near extensive involvement with thesources of equity. luxury” brand. And Cadillac, of Olympics). They also include direct BMW has a particularly well- course, is still the top of the line. Yet response (the Coca-Cola catalog,designed and implemented hierar- the goal remains challenging. The which sells licensed Coke merchan-chy. At the corporate brand level, financial performance of Pontiac dise) and interactive media (theBMW pioneered the luxury sports and Saturn has improved. But the company’s Web site, which offers,sedan category by combining seem- top and bottom lines have never re- among other things, games, a tradingingly incongruent style and perfor- gained the momentum they had post for collectors of Coke memora-mance considerations. BMW’s years ago. Consumers remain con- bilia, and a virtual look at the Worldclever advertising slogan, “The ulti- fused about what the brands stand of Coca-Cola museum in Atlanta).mate driving machine,” reinforces for, in sharp contrast to the clearly Through it all, the company alwaysthe dual aspects of this image and is focused images of competitors like reinforces its key values of “original-applicable to all cars sold under the Honda and Toyota. ity,” “classic refreshment,” and soharvard business review January–February 2000 7
  • 8. MANAGER’S TOOL KIT • Th e B ra n d R e p o r t Ca rd on. The brand is always the hero in nience and for good quality at low special status in the eyes of con- Coca-Cola advertising. prices, Bic’s managers didn’t under- sumers, who now view it as similar 8. The brand’s managers under- stand that the overall brand image to other oil companies. stand what the brand means to con- lacked a certain cachet with cus- Another example is Coors Brew- sumers. Managers of strong brands tomers – a critical element when ing. As Coors devoted increasing at- appreciate the totality of their marketing something as tied to emo- tention to growing the equity of its brand’s image – that is, all the differ- tions as perfume. The marketers less-established brands like Coors ent perceptions, beliefs, attitudes, knew that customers understood the Light, and introduced new products and behaviors customers associate message they were sending with like Zima, ad support for the flag- with their brand, whether created in- their earlier products. But they didn’t ship beer plummeted from a peak of tentionally by the company or not. have a handle on the associations about $43 million in 1985 to just $4 As a result, managers are able to that the customers had added to the million in 1993. What’s more, the fo- make decisions regarding the brand brand image – a utilitarian, imper- cus of the ads for Coors beer shifted with confidence. If it’s clear what sonal essence – which didn’t at all from promoting an iconoclastic, in- customers like and don’t like about lend itself to perfume. dependent, western image to reflect- a brand, and what core associations By contrast, Gillette has been ing more contemporary themes. Per- are linked to the brand, then it careful not to fall into the Bic trap. haps not surprisingly, sales of Coors should also be clear whether any giv- While all of its products benefit from beer dropped by half between 1989 en action will dovetail nicely with a similarly extensive distribution and 1993. Finally in 1994, Coors be- the brand or create friction. system, it is very protective of the gan to address the problem, launch- The Bic brand illustrates the kinds name carried by its razors, blades, ing a campaign to prop up sales that of problems that can arise when managers don’t fully understand their brand’s meaning. By emphasiz- Tapping customers’ perceptions and beliefs ing the convenience of inexpensive, often uncovers the true meaning of a brand. disposable products, the French company Société Bic was able to cre- and associated toiletries. The com- returned to its original focus. Mar- ate a market for nonrefillable ball- pany’s electric razors, for example, keters at Coors admit that they did point pens in the late 1950s, dispos- use the entirely separate Braun not consistently give the brand the able cigarette lighters in the early name, and its oral care products are attention it needed. As one com- 1970s, and disposable razors in the marketed under the Oral B name. mented: “We’ve not marketed Coors early 1980s. But in 1989, when Bic 9. The brand is given proper sup- as aggressively as we should have in tried the same strategy with per- port, and that support is sustained the past ten to 15 years.” fumes in the United States and Eu- over the long run. Brand equity must 10.The company monitors sources rope, the effort bombed. be carefully constructed. A firm of brand equity. Strong brands gen- The perfumes – two for women foundation for brand equity requires erally make good and frequent use of (“Nuit” and “Jour”) and two for men that consumers have the proper in-depth brand audits and ongoing (“Bic for Men” and “Bic Sport for depth and breadth of awareness and brand-tracking studies. A brand audit Men”) – were packaged in quarter- strong, favorable, and unique associ- is an exercise designed to assess the ounce glass spray bottles that looked ations with the brand in their mem- health of a given brand. Typically, it like fat cigarette lighters and sold for ory. Too often, managers want to consists of a detailed internal descrip- about $5 each. They were displayed take shortcuts and bypass more ba- tion of exactly how the brand has in plastic packages on racks at sic branding considerations – such been marketed (called a “brand in- checkout counters throughout Bic’s as achieving the necessary level of ventory”) and a thorough external extensive distribution channels, brand awareness –in favor of concen- investigation, through focus groups which included 100,000 or so drug- trating on flashier aspects of brand and other consumer research, of ex- stores, supermarkets, and other building related to image. actly what the brand does and could mass merchandisers. At the time of A good example of lack of support mean to consumers (called a “brand the launch, a Bic spokesperson de- comes from the oil and gas industry exploratory”). Brand audits are par- scribed the products as logical exten- in the 1980s. In the late 1970s, con- ticularly useful when they are sched- sions of the Bic heritage: “High qual- sumers had an extremely positive uled on a periodic basis. It’s critical ity at affordable prices, convenient image of Shell Oil and, according to for managers holding the reins of a to purchase and convenient to use.” market research, saw clear differ- brand portfolio to get a clear picture The company spent $20 million on ences between that brand and its of the products and services being of- an advertising and promotion blitz major competitors. In the early fered and how they are being mar- that featured images of stylish peo- 1980s, however, for a variety of rea- keted and branded. It’s also impor- ple enjoying the perfumes and used sons, Shell cut back considerably on tant to see how that same picture the tag line “Paris in your pocket.” its advertising and marketing. Shell looks to customers. Tapping cus- What went wrong? Although their has yet to regain the ground it lost. tomers’ perceptions and beliefs often other products did stand for conve- The brand no longer enjoys the same uncovers the true meaning of a 8 harvard business review January–February 2000
  • 9. Th e B ra n d R e p o r t Ca rd • MANAGER’S TOOL KITbrand, or group of brands, revealing cerned that some of its characters reacted when they saw the hundredswhere corporate and consumer (among them Mickey Mouse and of other Disney-licensed productsviews conflict and thus showing Donald Duck) were being used in- and joint promotions. Disney’s char-managers exactly where they have appropriately and becoming over- acters were hawking everything fromto refine or redirect their branding exposed. To determine the severity diapers to cars to McDonald’s ham-efforts or their marketing goals. of the problem, Disney undertook an burgers. Consumers reported that Tracking studies can build on extensive brand audit. First, as part they resented all the endorsementsbrand audits by employing quanti- of the brand inventory, managers because they felt they had a special,tative measures to provide current compiled a list of all available Dis- personal relationship with the char-information about how a brand is ney products (manufactured by the acters and with Disney that shouldperforming for any given dimension. company and licensed) and all third- not be handled so carelessly.Generally, a tracking study will col- party promotions (complete with As a result of the brand inventorylect information on consumers’ per- point-of-purchase displays and rele- and exploratory, Disney movedceptions, attitudes, and behaviors vant merchandising) in stores world- quickly to establish a brand equityon a routine basis over time; a thor- wide. At the same time, as part of a team to better manage the brandough study can yield valuable tacti- brand exploratory, Disney launched franchise and more selectively eval-cal insights into the short-term ef- its first major consumer research uate licensing and other third-partyfectiveness of marketing programs study to investigate how consumers promotional opportunities. One ofand activities. Whereas brand audits felt about the Disney brand. the mandates of this team was to en-measure where the brand has been, The results of the brand inventory sure that a consistent image for Dis-tracking studies measure where the were a revelation to senior man- ney – reinforcing its key associationbrand is now and whether marketing agers. The Disney characters were with fun family entertainment – wasprograms are having their intended on so many products and marketed conveyed by all third-party productseffects. in so many ways that it was difficult and services. Subsequently, Disney The strongest brands, however, to understand how or why many of declined an offer to cobrand a mutualare also supported by formal brand- the decisions had been made in the fund designed to help parents saveequity-management systems. Man- first place. The consumer study only for their children’s college expenses.agers of these brands have a written reinforced their concerns. The study Although there was a family associa-document –a “brand equity charter”– indicated that people lumped all the tion, managers felt that a connectionthat spells out the company’s gen- product endorsements together. with the financial community sug-eral philosophy with respect to Disney was Disney to consumers, gested associations that were incon-brands and brand equity as concepts whether they saw the characters in sistent with other aspects of the(what a brand is, why brands matter, films, or heard them in recordings, or brand’s image.why brand management is relevant associated them with theme parksto the company, and so on). It also or products. The Value of Balancesummarizes the activities that make Consequently, all products and Building a strong brand involvesup brand audits, brand tracking, and services that used the Disney name maximizing all ten characteristics.other brand research; specifies the or characters had an impact on Dis- And that is, clearly, a worthy goal.outcomes expected of them; and in- ney’s brand equity. And because of But in practice, it is tremendouslycludes the latest findings gathered the characters’ broad exposure in the difficult because in many cases whenfrom such research. The charter marketplace, many consumers had a company focuses on improvingthen lays out guidelines for imple- begun to feel that Disney was ex- one, others may suffer.menting brand strategies and tactics ploiting its name. Disney characters Consider a premium brand facingand documents proper treatment of were used in a promotion of Johnson a new market entrant with compara-the brand’s trademark – the rules for Wax, for instance, a product that ble features at a lower price. Thehow the logo can appear and be used would seemingly leverage almost brand’s managers might be temptedon packaging, in ads, and so forth. nothing of value from the Disney to rethink their pricing strategy.These managers also assemble the name. Consumers were even upset Lowering prices might successfullyresults of their various tracking sur- when Disney characters were linked block the new entrant from gainingveys and other relevant measures to well-regarded premium brands market share in the short term. Butinto a brand equity report, which is like Tide laundry detergent. In that what effect would that have in thedistributed to management on a case, consumers felt the characters long term? Will stepping outside itsmonthly, quarterly, or annual basis. added little value to the product. definition of “premium” change theThe brand equity report not only de- Worse yet, they were annoyed that brand in the minds of its target cus-scribes what is happening within a the characters involved children in a tomers? Will it create the impres-brand but also why. purchasing decision that they other- sion that the brand is no longer top Even a market leader can benefit wise would probably have ignored. of the line or that the innovation isby carefully monitoring its brand, as If consumers reacted so negatively no longer solid? Will the brand’sDisney aptly demonstrates. In the to associating Disney with a strong message become cloudy? The pricelate 1980s, Disney became con- brand like Tide, imagine how they change may in fact attract customersharvard business review January–February 2000 9
  • 10. MANAGER’S TOOL KIT • Th e B ra n d R e p o r t Ca rd from a different market segment to parently trendy ad campaigns that really at the heart of brand equity. try the brand, producing a short- failed to resonate with its young tar- This realization has important man- term blip in sales. But will those cus- get market. Its market share in the agerial implications. tomers be the true target? Will their jeans category plummeted in the lat- In an abstract sense, brand equity purchases put off the brand’s original ter half of the 1990s. The result? provides marketers with a strategic market? Levi’s has terminated its decades- bridge from their past to their future. The trick is to get a handle on how long relationship with ad agency That is, all the dollars spent each a brand performs on all ten attributes Foote, Cone & Belding and is now at- year on marketing can be thought of and then to evaluate any move from tempting to launch new products not so much as expenses but as in- all possible perspectives. How will and new ad campaigns. For Levi’s, vestments – investments in what this new ad campaign affect cus- putting in the system was not consumers know, feel, recall, be- tomers’ perception of price? How enough; perhaps if it had adhered lieve, and think about the brand. will this new product line affect the more closely to other branding prin- And that knowledge dictates appro- brand hierarchy in our portfolio? ciples, concentrating on innovating priate and inappropriate future di- Does this tweak in positioning gain and staying relevant to its custom- rections for the brand – for it is con- enough ground to offset any poten- ers, it could have better leveraged its sumers who will decide, based on tial damage caused if customers feel market research data. their beliefs and attitudes about a we’ve been inconsistent? Negative examples and caution- given brand, where they think that One would think that monitoring ary words abound, of course. But it is brand should go and grant permis- brand performance wouldn’t neces- important to recognize that in strong sion (or not) to any marketing tactic sarily be included in the equation. brands the top ten traits have a posi- or program. If not properly designed But even effectively monitoring tive, synergistic effect on one an- and implemented, those expendi- brand performance can have nega- other; excelling at one characteristic tures may not be good investments – tive repercussions if you just go makes it easier to excel at another. the right knowledge structures may through the motions or don’t fol- A deep understanding of a brand’s not have been created in consumers’ low through decisively on what meaning and a well-defined brand minds – but they are investments you’ve learned. position, for example, guide devel- nonetheless. Levi-Strauss’s experiences are opment of an optimal marketing Ultimately, the value to market- telling. In the mid-1990s, the com- program. That, in turn, might lead ers of brand equity as a concept de- pany put together a comprehensive to a more appropriate value-pricing pends on how they use it. Brand eq- brand-equity-measurement system. strategy. Similarly, instituting an ef- uity can help marketers focus, Practically from the time the sys- fective brand-equity-measurement giving them a way to interpret their tem was installed, it indicated that system can help clarify a brand’s past marketing performance and de- the brand image was beginning to meaning, capture consumers’ reac- sign their future marketing pro- slip, both in terms of the appeal of tions to pricing changes and other grams. Everything the company Levi’s tight-fitting flagship 501 brand strategic shifts, and monitor the does can help enhance or detract of jeans and how contemporary and brand’s ability to stay relevant to from brand equity. Marketers who cutting edge the overall Levi’s brand consumers through innovation. build strong brands have embraced was. The youth market was going the concept and use it to its fullest to for a much baggier look; competitors Brand Equity as a Bridge clarify, implement, and communi- were rushing in to fill the gap. Dis- Ultimately, the power of a brand lies cate their marketing strategy. tracted in part by an internal reengi- in the minds of consumers or cus- neering effort, however, Levi’s was tomers, in what they have experi- Reprint r00104 slow to respond and when it did, it enced and learned about the brand To place an order, call 1-800-988-0886. came up with underfunded, trans- over time. Consumer knowledge is 10 harvard business review January–February 2000