Posts Tagged ‘brand equity’

VI. Monetizing Your Successful Brand

Tuesday, January 25th, 2011

Part VI of an extended exploration of nature and value of “Branding” and practical discussion of how to create, strengthen and extract greater value from your ‘Brand’

The foundation of successful branding – whether you’re a start-up entrepreneur or leader of a corporate marketing department – is a solid business strategy, solidly executed:

– An offering that promises to satisfy the needs and expectations of your customers

– An organization that consistently delivers the values and experiences you promise 

Creating a successful brand requires investing ample time, $$$ and effort in building and maintaining the excellence of your business.

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While communication is the first priority of start-up and new product branding, the brand-building imperatives of established companies are more varied:

1.  To nurture, strengthen and protect the reputation you’ve already earned

2.  To use your good name and reputation to deepen relationships with customers you already have

3.  To open doors to new markets and to successfully launch new products.

In this part of the product life cycle, four tools are key to strengthening your brand and expanding its influence and value-creating power:

Foresight:  Anticipating, and developing innovations to answer your customers’ evolving needs and changes in the marketplace. 

Execution:  Consistent, trouble-free performance that is focused on keeping a step ahead of your customers’ evolving needs and preferences

Communication:  Messaging which explains and reinforces the value and satisfaction that your products deliver, and the benefits that your company brings to the large community.

Diligence:  Protecting your brand from decision within your company that would dilute or neglect the reputation your have earned, and from outsiders who would misuse your products and good name.     

You’ve invested in building the value of your brand and the reputation that stands behind it.  They’re your guarantee to deliver what customers have come to value and expect.  You’ve earned that trust, now here are ways to monetize your brand equity:

– By charging a premium price – National brands of canned tuna are almost always more expensive, for an essentially identical product

– Through greater market share – Coke and Pepsi dominate the grocer’s soft drink shelf, although there are plenty of other fizzy cola brands 

– Through easier access to new customers and new markets – New consumer electronics?  Sony and Apple have a big head start over any new competitor.

– By launching new products, more quickly and with lower risk

III. The Value Creating Power of ‘Brand’

Thursday, January 13th, 2011

Part III of an extended exploration of nature and value of “Branding” and practical discussion of how to create, strengthen and extract greater value from your ‘Brand’

Successful branding can be hugely valuable, far beyond the mere functioning of the product or service itself.  Think Google and Facebook, Coca Cola, Mercedes Benz, Apple, Nike, Whole Foods, the Rolling Stones ….  

LYCRA brand elastane fibers, a phenomenal money-maker for its inventor, the DuPont Company (and for current owner, Invista) is a great story of branding success.  Even though DuPont didn’t make the LYCRA swimsuit or lingerie, or even the stretchy fabric that the garment is cut from, DuPont’s investment in branding has made LYCRA one of the most respected, well known and valuable names in fashion and functional apparel.   

During its heyday, DuPont’s LYCRA fibers commanded huge market shares –and prices often 50 percent higher than competing spandex fibers – translating into hundreds of millions of dollars of extra profits, year after year, for DuPont.  This, even though the LYCRA fiber was often technically inferior – in the length of its stretchiness, the strength of its snap-back, its resistance to repeated trips through the washing machine and dryer – compared to the competing brands. 

DuPont pursued a decades-long, comprehensive, coordinated strategy to reinforce the mystique and exclusivity of the LYCRA name, including:

   – Targeted advertising and co-promotions

   – Support, encouragement and publicity for innovative fashion designers

   – Support for sports science research, product development and promotion

   – Leadership in end user focused product and technology development

The resulting avalanche of profits, year-in year-out, was DuPont’s reward for years of aggressive investment in building, maintaining and protecting the LYCRA brand.

Other examples of the value added by a company’s or product’s good name and reputation?  Look no further than Facebook, Intel microprocessor chips, or Gucci bags, a Niemann Marcus, GatorAide or your latest i-accessory.   

The extra value represented by this ‘brand equity’ isn’t just a psychic reward for market success.  It has real, money-in-the-bank consequences:

   – Enhanced market share points and growth rates

   – Opportunities to charge premium prices

   – Opening up new markets and reducing the risks of introducing new products

    – Greater market value for your company

And a final, cautionary, note:  “Brand” isn’t necessarily forever.  Neglect and abuse can degrade the value of your brand just as surely as they can wreck the value of your house.  Think Lehmann Bros, Lindsay Lohan, Oldsmobile or Gateway computers. 

 Maintaining the hard earned value of your brand requires continuing attention and investment – in new product development, in perfecting news ways of relating with your customers, in diligent conversation with your marketplace, and in continuing excellence in execution.