Chapter Synopses

CHAPTER 1 The Need

In this lead-off chapter we identify what we believe are the key issues. We talk about why CEO’s and CMO’s have such a difficult time creating value in today’s environment. We focus in on the issues with accounting for and managing intangible assets – the major engine for driving long-term profitability. We make our case for the need to consider a new guiding principal of enterprise leadership and management.

CHAPTER 2 What’s the Solution?

Chapter 2 begins a parable that tells the story of a CEO who is in trouble – and the issues at hand. It introduces the role of using outside resources to help diagnose the problem. It suggests many of the ideas that will prove successful. While this chapter is fictional in form, it contains a powerful story.

CHAPTER 3 What Is a Brand? What Isn’t?

Here we review the elements that comprise a brand, and terms associated with brand. This chapter is a basic primer on brand. However, it also introduces new ways of thinking about what a brand is, and the role of brand in the enterprise. This is a particularly good chapter for non-marketing people.

CHAPTER 4 Brands as Financial Assets

Chapter 4 makes the case for brands as key assets of the firm and provides the rationale for integrating brand asset values to financial reporting. We point out why current accounting procedures do a lousy job of accounting for the value of brands and other intangible assets. We provide a better understanding of the linkages between brand value, brand equity, market value, EVA and stock price.

CHAPTER 5 Value Creation/Value Destruction

Chapter 5: Value Creation/Value Destruction demonstrates on a more granular level how brand value is created and how it is depreciated or destroyed. Here we demonstrate how management actions can grow strong brands into powerhouses of profitability. We also demonstrate how misalignment of values can severely depreciate a brand’s asset value over both the short term and the long term. The relationship of Brand to the Business Model, Values (based on Discipline of Market Leaders), Quality, and LCV (Lifetime Customer Value) is discussed. There are plenty of examples.

CHAPTER 6 The Current State of Brand Measurement

In Chapter 6, The Current State of Brand Measurement, we establish the criteria for a comprehensive brand value measurement system. We then apply that criteria to some of the more popular brand value/brand equity measurement systems and demonstrate why they’re not meeting those criteria. We review the confused state of brand value definitions. We introduce the Brand Value Equation, and establish a rationale for brand value and brand equity.

CHAPTER 7 Understanding Brand Value and Brand Equity

In Chapter 7 we establish how a brand creates value (brand value) and equity (brand equity), the definition of each term, why they are different, and why they are important to the firm and its shareholders. We introduce the conceptual (and visual) model of total brand value and its component parts, including brand equity We continue this chapter with the conceptual framework for measuring the components of total brand value, including brand equity, and demonstrate the model – including how to use that information. In a separate section we discuss how to apply two-stage choice modeling to implement the model.

CHAPTER 8 Brand Loyalty and Brand Performance

In Chapter 8, Brand Loyalty and Brand Performance, we more deeply explore the connections between Brand Value and Brand Equity, and how they work over time to create loyalty among customers, employees, and suppliers. The chapter addresses the salient differences between attitudinal loyalty and behavioral loyalty, and the implications for brand performance and value creation.

CHAPTER 9 What Is Branding?

Chapter 9, What is Branding? This chapter discusses branding - the process of creating and maintaining a brand as a corporate asset. The chapter expands on some of the precepts introduced in Chapters 4 and 5 in terms of a quality-based process. It discusses some of the realities of controlling the branding process. We also look at how branding standards are set and who sets them. The ‘Who’, ‘What’, ‘Why’, ‘Where’ and ‘When’ of branding are examined. The process of continuous improvement (CQI) is applied to the branding process and discussed as a template for that process. It’s a “must” chapter for the serious reader – anyone in a leadership, management or advisory position.

CHAPTER 10 Brand Success Profiles

Chapter 10, Brand Success Profiles, presents real-life examples of successful applications of some of the principles we have discussed in previous chapters. We examine how Kellogg Company, Starbucks, Mayo Clinic and Cascade Engineering values and programs create brand value and brand equity, and where appropriate, the key drivers of the equity.

CHAPTER 11 Values-Based Market Segmentation

Chapter 11 addresses Values-Based Market Segmentation. One of the most powerful questions every enterprise should ask and answer is: “Who should be our customer, and why?” We demonstrate how derivation of the Brand Value Model naturally leads to a powerful values-based segmentation scheme. We show how that segmentation scheme is superior to any others for deeply understanding market structure and uncovering your best target markets. We also discuss a powerful choice simulator for ‘what if’ scenarios. We think this chapter is really important for effective strategic implementation of Values Based Management.

CHAPTER 12 Leveraging the Brand Value Model and Brand Performance

In Chapter 12, Leveraging the Brand Value Model and Brand Performance, we discuss practical ways to apply measures of brand performance to different audiences – senior corporate leaders, chief financial officers, senior brand managers, the sales force, and employees. We tie the metrics to share of choice, pricing premium, share of served segments, and Economic Value Added (EVA).

CHAPTER 13 Salient Lessons for Marketing Service Providers

Chapter 13: Salient Lessons for Marketing Service Providers, discusses ‘how to’ apply the lessons discussed in the rest of the book for service brands, especially in a changing business environment. It also includes requirements and pitfalls to be aware of in a service provider organization, including ad agencies, pr firms, and professional services firms, and how to become a ‘trusted advisor.’ If it applies to you, read it.

CHAPTER 14 The Value Creation Process

In Chapter 14, The Value Creation Process, we visit some of the practical issues that impact the application of branding practices within most companies and organizations. ‘Pull Thinking’ is reviewed. The roles of HR, IT, Sales, Marketing, Customer Service and Finance are discussed. CRM and SFA are discussed. Internal branding to employees is addressed. Examples are provided. Values-Based Leadership, Values-Based Management, Values-Based Outcomes are discussed. This chapter is of particular value to CEO’s in terms of ‘harmonizing’ the various departments of the enterprise.

CHAPTER 15 The Solution

Chapter 15, The Solution, is the companion parable to chapter 2. We lay out the steps that are necessary to begin applying the ideas in the book. The framework begins with an assessment of the culture of the organization and its values, then extends out to the brand and branding structure in terms of positioning and discipline, then the organizational levers (segmentation, recruiting practices, compensation, recognition, communications, training, etc.), the operating results, and finally, the financial outcomes. A must read if you are serious about implementing our approach.

TECHNICAL ADDENDUM

In the Technical Addendum we provide more detail on deriving the Brand Value Model and we address several other statistical techniques that are useful for successful implementation of the values creation process.