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Social Brand Value
The document discusses the evolving concept of social brand value, emphasizing that consumer communities now play a crucial role in establishing brand identity and customer loyalty. It highlights how traditional marketing, focused solely on product features, must adapt to incorporate community insights and interaction for brands to succeed in today's digital landscape. Key findings indicate that brands like Apple excel in leveraging their user communities, significantly impacting customer willingness to pay a premium price.
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Social Brand Value
- 1. fL IC kR SOCIAL BRAND VALUE brand value through social interaction - fA C the Germany ranking 2009 EBO Ok k OO EB AC O Nf AZ AM R E ppL fLICk COC RA Ck fLI ACO BE fA k CEBO OO CO L A Ok w EB fAC LAN IkIpE DIA CO C A OkI VZ AfA fA DI CE TU E B AY CEB BO S AY Ok OO EB XING fL BE kYO IC TU kR U UTU Ap YO pL Ok BE E BO RE CE wA fA ER NG p XI Up NG kT fA OO CE B CE BO fA Ok AY EB YO ER GOO U IT T GLE TU w App ET DIVZ BE UB LE N EB OkIA RE ppERwA AY MCD k STU ONA OSOfTTU DI A fIR S AY MICR TU LD‘S Ef IT TER EB IpE DI YO U OX TUB YOU TUBET w Ik VZ BOO E Tw CEBOO k w A M IT TE L A NOkIA fA Ok AZ R EB COCACO BO ON AC E AY CE fA fA fA C BE ON f CE EB BO TU OO Ok OU kS MA Z fL RY TU I Ck D
- 2. This craving for The pursuit of community is one of the most basic desires of community is the mankind. Eversince people have craved for the security and orientation of communities. However in the 19th and 20th chief misery century, industrialization led to an anonymization of our daily living- and working-environment. Similarly, as traditional communities were on the decline, brands took an ever more of every man important role in the pursuit of personal identity-construc- tion projects of consumers. Recently, mainly due to the rapid diffusion of digital techno- individually and all logies, a re-emergence of the community can be observed in the context of consumption practices. These communities are, contrary to their ancient counterparts, based on shared humanity from the passions and interests of consumers. Never has it been so easy to identify like-minded people and exchange thoughts beginning of time. and ideas about shared interests than it is nowadays. fyodor M. Dostoyevsky, 1881
- 3. Community- Orientation of Successful marketing leads to unique customer benefits. Given the altered behavioural patterns of consumers, mar- keting needs a fresh perspective that takes into account the dynamic development regarding communities. Marketing thinking and practice used to be dominated by product spe- cifications, advertising messages and one-sided top-down Marketing communication. Today a brand cannot create true added value without taking social structures into account. The value of a brand seems to be less and less based on product charac- community teristics, but rather on the benefits a brand provides in daily focus usage situations and its relation to others. The Harley David- service son Owners Group (HOG) with over one million members is customer focus only one example of how a brand creates value beyond the product. focus selling focus product production focus 2000 Marketing orientation focus 1990 is changing towards the 1980 consumer. In the future, community will play 1960 an important role in 1950 determining a brand’s 1960 success.
- 4. Changing Benefits of aBrand Although the success of a brand has always been based on social acceptance and social exchange within communities, it has never been easier to facilitate this dialogue among consumers than in the digital world of today. Consider micro- blogging sites, social networks or business communities. what all these platforms and tools have in common is, that they all focus on the individual consumer and his or her con- nections. This development is not limited to the digital world. Also in the offline world, consumer communities seem to Benefits of a Company Community How the community influences brand impact impact the benefit re-emerge. In the case of Tupperware consumer communities Orientation/in- product ratings and user expe- are even an crucial aspect of the brand´s business model. formation rience reports reduce one’s own The traditional benefits of a brand, however, are not lapsing. search costs what has changed though, is that brands are not under Trust Trust in like-minded people is total control of companies anymore. Trust in other commu- much higher as trust in compa- nity members for instance is already higher than the trust in nies and brands brands among consumer. Also the information and orienta- prestige The prestige benefit of a brand tion benefits of a brand are increasingly created by the com- is negotiated within the user munity and its members. “The brand in the user’s hand” thus community is not a temporary hype but rather an increasingly important Identity The rapid access to information aspect of successful brand management. Just as differenti- and experiences of other uses, ation on the basis of product specifications becomes incre- affect the personal identifica- asingly difficult, facilitating and managing communication tion with brands effectively among customer groups becomes increasingly important. The consumer as a trustful believer of advertising messages is dying out.
- 5. The Social BrandValue occurs at the interface between the Social Brand Value consumer and the brand. The Social Brand Value is the value, which is based on the interactions between users of a certain brand. Today successful brand management is impossible wi- thout an understanding of the role a brand plays in the social context of the consumer. Thus the Social Brand Value is an important and valuable performance indicator for optimizing customer-based brand equity. g mon y. ns a t ctio mmuni ra o nte ea nd i thin a c xch ang sers wi m e rand u s fro b e sult s… ch r l ue i whi ns ctio y. an d Va ed valu e, cia era l int ompan al Br rceiv m so of the c Soci s : the pe fro ults ontrol fo r user res hich under w ly c ity ’s equ t direct rand h is no fab sha re o nd whic : the users a a nies brand rc ompamong fo
- 6. Relevance of aSocial Brand Value ranking Monetary brand valuation approaches focus primarily on the underlying financial performance indicators of a company or brand. Even though community brands such as facebook et al yield an enormous brand value from a consumer`s perspec- r- tive they fail to be recognized in this perspective due to their pu nde i- low financial returns. A Social Brand Value Ranking allows to dee mmun s, a assess brands from a psychographic perspective in their soci- nst ruct ithin co e brand al context and stresses the value of a brand that lies beyond r s ci al co nds is w he futu succes so t the purchase decision – in the daily life of consumers. s as g of bra nt and nd nin bra me ta nds ial mea anage This study verifies the significant impact of the Social Brand ders he soc rand m r in pea se e un of t b t ap Value on customer loyalty (apart from well-known factors If on ding for t he e o no ause th l fi- such as product quality and brand image): On average about n sta ntrall y ds d c a 15% of customer loyalty are driven by social interaction in s ce it y bran ures, be classic etc.) tie mun proced ide fromcebook communities. Brand image building is not sufficient to drive om t s usage and preference of a brand anymore. To successfully ng C essmen other ntly (fa ro ss s st the cie manage a brand today, also means to understand the conver- erou rands a lue on y insuffi um al b e in th f sation between consumers and their communities. N va nl and c la ssic e brand e data o f a br anding n o th nanc eo t io valu unders e decis Approximately a third of brand perception is shaped through gr asp e s th he as interaction within those communities. In spite of this signifi- grasp tends t e purch cant influence, today far less than 10% of brand budgets are dV alue eby ex he pur allocated to measures that stimulate and steer social interac- al Bran nd ther “ after t Soci text a value tion within communities. The l con rand a „b soci
- 7. The structure of Social Brand Value • Community members pro- vide relevant knowledge rund um around brands, • Reciprocal • Joint consumption support experiences create in solving emotional ties The Social Brand Value study examines both big, commer- ti- problems rma between cially successful brands and strong community brands (par- Info alue users, ticularly online). To calculate the Social Brand Value the five on al V n • Social liato dimensions informational value, affiliation value, brand evan- • Communities represent a Affi ue interaction platform to identify Val between communi- gelism, conversational value and identity value were opera- with brands ty members tionalized into 28 items in total. These items were surveyed • Members ial express and Soc creates feeling through an representative online survey. tity d Bran of security and reas- live their I den e e surance Valu personality within the Valu The results: Apple comes out ahead of all examined brands • Com- in the Social Brand Value study, followed by StudiVZ (biggest brand Br and munity • community lism members German social network) and Google. Established powerhouse nge • Newsand know- eva promo- brands such as Coca-Cola or McDonalds find themselves at - erti te their the bottom of the ranking. Although many of the legacyb- ledge about a Conv brands and brand spread alue rands possess a high monetary brand value, the study results fast and che- n al V convince others aply among to use/buy it suggest that they are insufficiently prepared for the new chal- • Community mem- • community mem- bers defend brands lenges of community interaction. bers, Brands stir con- from external at- versations and stay top-of-mind tacks
- 8. The comparison betweenthe Social Brand Value and the Social Brand Value: Overall customer’s willingness to pay a premium price draws even clearer picture. Among the examined brands, Apple mana- ges it best to play out its perceived Social Brand Value into a premium price. This shows that it is not only the product and the brand image which are responsible for a brand’s success. 33 % The success of Apple rather stems from the company´s out- 32 % standing capabilities in handling and nurturing its user com- 31 % munity - based on an open and cooperative communication 30 % approach. 29 % In the case of Coca-Cola the consumers` distinct willingness 28 % to pay a premium price mainly originates from its establis- 28 % hed brand image. As our results indicate however, Coca-Cola 27 % seems to create only little value in daily usage situations of its 27 % German customers. The brand´s ability to cause social value is 26 % rather limited today. Brands such as Nokia and Starbucks are 26 % should aim to ramp up their capabilities and efforts to crea- 24 % te value the daily life of their customers in order to increase 24 % their Social Brand Value. 21 % 21 % Those brands, which are not able to create a high willingness to pay a premium price, nor offer a high Social Brand Value, 20 % are the clear underdogs of the study. Due to the increasing 15 % exchangeability of brands, these brands would be well ad- 15 % vised to increase their social value, because it is the Social 13 % Brand Value which more and more is responsible for the 0% 10 % 20 % 30 % customer’s willingness to pay a premium price.
- 9. Social Brand Value andprice premium Brands with a high social value, which is Brands with a high social value, which currently not commercialized through an also leads to an increased willingness to The 5 key insights form the study: increased willingness to pay a premium pay a premium price among customers price (e.g. due to exchangeability on the (however price premium is not only 1. Besides traditional factors such as product quality and Internet) based on the Social Brand Value). brand image, a significant part of customer loyalty is exp- lained by the Social Brand Value (about 15 %) winner 2. In terms of offering true customer value through social in- of the teraction, Apple, Google and studiVZ outperform all other study Apple high brands in the study studiVZ Google 3. Apple and Tupperware are two high performing product firefox Social Brand Value Tupperware brands in the Social Brand Value ranking. from the very wikipedia facebook Xing beginning their business model was based on a strong Amazon Microsoft user community and social interaction. This pays off! Twitter 4. On the other hand, an online-only business model does MySpace eBay not guarantee high levels of social value as the example flickr Starbucks YouTube demonstrates. The mere distribution of content Nokia low to a large and anonymous group of users does not auto- matically lead to community benefits. Loser Coca Cola 5. Even though the social value of a brand originates from in- of the McDonalds YouTube teractions within the user community, companies do have study the chance to actively facilitate and manage the creation low high of Social Brand Value. price premium * * Readiness to pay more for the respective brand than for an otherwise identical no name product Brands with a low social value, for which Brands that can rely on a high willingness to the user is not willing to pay a premium pay a premium price, which is not based on price. the brand’s social value. To maintain this, the- se brands are well advised to increase their social value in the future.
- 10. facts & figures aboutthe Study Study Background The increased networking and social interaction of consu- mers on the internet has yielded new communities around brands. The goal of this study is to identify, examine and asssess the resulting value of this development – both from a consumer and company perspective. The study thereby aims to identify specific success factors for effective brand ma- nagement in community contexts Research Design • Online survey (representative) • Total number of respondents (sample size): 1.301 • Number of sampled brands: 19 • Region: Deutschland • Survey period: September 2009
- 11. Autoren Hyve AG, München Vivaldi partners, München Dr. Johann füller ist Vorstand der HYVE AG in Mün- Dr. Markus pfeiffer ist Managing Director der Vivaldi chen, Research Affiliate am MIT – Massachusetts partners Büros in München und in London. Institute of Technology in Cambridge und Habilitand In rund zehn Jahren Beratungstätigkeit hat er sich am Institut für Strategisches Management, Marketing auf die Entwicklung von wachstumsorientierten Mar- und Tourismus an der Universität Innsbruck. Er hält kenstrategien spezialisiert und betreut klienten im regelmäßig Vorträge und Vorlesungen zu Open deutschsprachigen Raum und eine Reihe internatio- Innovation, Online Communities, Innovationsmanage- naler klienten. Er spricht regelmäßig auf internatio- ment und virtueller kundenintegration in die pro- nalen Marketingkongressen, ist Gastprofessor an der duktentwicklung. Im Anschluss an seine Dissertation zum Thema “Com- Solvay Business School in Brüssel und hat mehr als 20 Bücher und Artikel munity Based Innovations“ arbeitete Johann zwei Jahre als Assistant zu verschiedenen Themen des Marketings veröffentlicht. In vielen Jahren professor an der Universität Innsbruck. Zuvor war er 3 Jahre als Unterneh- Strategie- und Markenberatung hat er über 40 klienten bei komplexen mensberater bei pricewaterhouseCoopers im Bereich Strategic Change Marketing- und Markenstrategieprojekten betreut. Er verfügt über weit- tätig. weitere Erfahrungen sammelte Dr. füller bei Mckinsey & Comp., reichendes wissen bei der Entwicklung von kreativen und faktenbasierten Siemens und Allied Signal. Im Zuge seiner forschung veröffentlichte er Lösungen – der Entwicklung von Markenstrategien, Optimierung von mehr als 60 Artikel in unterschiedlichen Zeitschriften. Dazu zählen das Markenarchitekturen, Entwicklung von Brand Extensions und Markencont- Journal of product Innovation Management, das Journal of Business rolling. Research, das Journal of Travel Research, der Harvard Business Manager Bevor sich Dr. pfeiffer Vivaldi partners anschloss, war er als Marketingbera- und Technovation. Im Rahmen seiner Tätigkeit als Vorstand der Hyve AG ter für verschiedene deutsche und internationale klienten aus der konsum- begleitet Johann seit mehr als 8 Jahren namhafte internationale Unter- güter-, Informations-, kommunikations- und Unterhaltungsindustrie (z.B. nehmen bei der Entwicklung kundenzentrierter Innovationen. philip Morris, Burda) tätig. Als Geschäftsführer eines deutschen Beratungs- unternehmens war er für den Ausbau des Neugeschäfts und die Betreuung kontakt: johann.fueller@hyve.de oder der Hauptklienten verantwortlich. jfueller@mit.edu kontakt: mpfeiffer@vivaldipartners.com
- 12. Autoren Vivaldi partners, München Tobias Honer ist als Senior Consultant im Münchner Büro von Vivaldi partners tätig. Er arbeitet schwerpunkt- mäßig für nationale und internationale kunden im Dienstleistungs-, Technologie- und fMCG-Sektor. Seine Expertise bringt er inbesondere bei Entwicklung von Marken- und wachstumsstrategien, sowie bei frage- stelllungen des Innovations- und portfoliomanage- ments ein. Zudem beschäftigt er sich intensiv mit der Entwicklung von Strategien im Online- und Social-Media Bereich. Tobias Honer verfügt über umfangreiche projekterfahrung in quantitativer und qualitativer Marktforschung und übernahm vor seiner Tätigkeit bei Vivaldi Vivaldi partners, München partners diverse Marketingfunktionen u.a. bei Booz & Co., der Lufthansa AG Dr. Markus Zinnbauer berät als Director im Münchner und dem fraunhofer Institut. Sein Studium der Betriebwirtschaftslehre mit Büro von Vivaldi partners vor allem klienten aus den Schwerpunkten strategisches Marketing und Distributionspolitik hat er Dienstleistungs-, Technologie- und fMCG-Unterneh- in pforzheim und Sydney absolviert. men. Besondere fachliche Expertise bringt er in den kontakt: thoner@vivaldipartners.com Bereichen Markenstrategie und -controlling, Budget- planung und -effizienz, quantitativen Methoden und Social-Media-Strategien ein. Vor seiner Tätigkeit bei Leopold-franzens Universität, Innsbruck Vivaldi partners sammelte er langjährige Erfahrung als Roland Schroll ist Doktoratsstudent und wissenschaftli- projektmanager einer Münchner Beratung und unterstützte internationa- cher Mitarbeiter am Institut für Strategisches Manage- le sowie mittelständische Unternehmen bei strategischen Marketingthe- ment, Marketing und Tourismus der Leopold-franzens men sowie bei finanziellen und organisationalen problemstellungen. Universität Innsbruck. Im Rahmen seines Doktoratsstu- Markus Zinnbauer hat sein Betriebswirtschaftsstudium an der Ludwig- diums beschäftigt er sich mit Themen wie Brand Com- Maximilians-Universität München und dem M.I.T., Cambridge, absolviert munities, user-generated brands sowie dem Einfluss und am Institut für Marktorientierte Unternehmensführung der Ludwig- von Communities auf Marken. Zuvor studierte Roland Maximilians-Universität promoviert. Er ist regelmäßiger Referent auf Schroll wirtschaftsinformatik sowie Strategisches konferenzen und Autor in nationalen und internationalen fachzeitschrif- Management mit Spezialisierung auf Strategie und Branding. praktische ten. Erfahrung sammelte er unter anderem im In- und Ausland bei firmen wie Siemens, Hilti und Vivladi partners. kontakt: mzinnbauer@vivaldipartners.com kontakt: roland.schroll@student.uibk.ac.at
- 13. Impressum ©2009, HYVE AG,Vivaldi partners Herausgeber HYVE AG Schellingstr. 45 80799 München www.hyve.de Mail: info@hyve.de Vivaldi partners Burgstr. 8 80331 München www.vivaldipartners.com Mail: munich@vivaldipartners.com in kooperation mit MIT und UNIVERSITÄT Innsbruck Layout & Grafik Melanie Eckl, HYVE AG