Brand Equity
By Michael Alan Hamlin
April 5, 1999

Asia and the Philippines are emerging from the Asian financial crisis to find that the rules of doing business in Asia have undergone a profound shift. Liberalization and globalization require that companies develop an effective competitive strategy distinguished by its world-class attributes. Credible value propositions are critical components of that strategy because customers have more choices and are better informed. And, many marketing strategists will find that communicating a meaningful value proposition consistently requires the development of strong brand equity.

Observers for years wondered why there were no really strong Asian brand names outside of Japan and more recently Korea. Even Taiwan has for all practical purposes, just one global brand: Acer. But the fundamental reason why there are no Asian brand names is that they haven’t been necessary. Product and corporate image aren’t important in protected marketplaces.

Now, that’s all changed, which means that corporate and product image consultants are enjoying recognition, for once, and record-setting levels of business. Note that advertising is different from building corporate image. The difference is this: image is the message; advertising is the medium. That doesn’t mean that advertising agencies can’t be image consultants. But, that’s not what they do best, and it’s certainly not what they spend most of their time doing.

Okay, for you advertising executives and marketing specialists who disagree with me, send me an e-mail and I will bring up your objections in my next column. And I’ll be fair. Honest.

Back to business. The purpose of corporate image building is attaining brand equity. By equity, we mean goodwill, trust, and acceptance by the marketplace. Many studies of the retail industry show that if a well-known brand is not available in one store, consumers will more frequently look for the desired product in another store rather than purchase a substitute. This is why retailing is about having the right product in the right place at the right time.

Building brand equity begins with selecting the name of the company or product. Philip Kotler, Northwestern University’s renowned marketing guru, provides an excellent guide for selecting a name in his just published book, Kotler on Marketing: How to Create, Win, and Dominate Markets. First, Mr. Kotler advises, the brand name "must be consistent with the value positioning of the brand. A ‘more for more’ offering must carry a brand name suggestive of high quality, or at least not suggesting something of low quality.

"Recently," he explains, "the photos of two beautiful women were shown to a group of men who were asked which was the more beautiful woman. The vote was equally split. Then the researcher wrote that the first woman’s name was Elizabeth and the second woman’s name was Gertrude. Now the vote was 80 percent in favor of Elizabeth. Names do make a difference."

Apologies to any Gertrudes who may read this column. I’m sure you’re lovely, but your parents certainly didn’t have the equity of your name in mind when you came along. Hmm. I’m getting in more trouble here.

Mr. Kotler says there are at least five desirable qualities a brand name should communicate. Here they are:

In considering possible brand names, Mr. Kotler says it is next important to consider the associations. He uses McDonald’s as an example, and notes that among the associations are kids, fun, and quality. But also paper waste and high calories. Companies need to ask themselves three questions about the associations its brand provokes.

"In trying to build a rich set of positive associations for a brand, the brand builder should consider five dimensions that can communicate meaning: attributes (features), benefits (perks), company values (priorities), personality (affinity), and users (constituency)," Mr. Kotler advises (parenthetical terminology is mine). "The brand builder’s job is to create a brand identity that builds on those dimensions."

The next step in building brand equity involves putting certain tools to work. These include owned words, slogans, colors, symbols and logos, and even a set of stories. The role of stories in creating brand equity is particularly noteworthy. Mr. Kotler cites the case of the "Ritz-Carlton bellboy who found that an important guest left for the airport without his briefcase and took it upon himself to rush to the airport, only to arrive late, but then took the next plane and found the guest and gave him the briefcase. The Federal Express driver who, when his truck broke down, hailed a cab and carried as many packages as he could to the airport to get them there in time. Such stories serve to exemplify and deepen consumers’ appreciation of the brand."

Companies that are examining the competitive landscape and developing marketing strategy will find that effective corporate and product branding will be at least as important as the product or service they sell.

Copyright © 1999 The Events & Awards Managers of Asia and
Hamlin-Iturralde Corporation. All rights reserved.

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