1. How Can You Brand A Banana? By Dannielle Blumenthal, Ph.D. March 2010 Disclaimer: This presentation was produced by me independently as an educational document to be shared with other interested communicators. It does not reflect the views of my agency, nor is it intended to promote any agency or organization.

2. Take Charge of Your Communication

3. King Solomon Knew It “A good name is more desirable than great riches.” - Proverbs 22:1Proverbs 22:1 Artist: Lars JustinenLars Justinen

4. And So Did The Leaders of Modern Industry "If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trade marks, and I would fare better than you." - Quaker Chairman John Stuart, ca. 1900, quoted in Brand ValuationBrand Valuation

5. World’s #1 Brand: Coca-Cola Estimated value of the brand alone: $68.7 million Brand is recognized by 98% of the world’s population World’s #1 provider of “sparkling beverages, juices and juice drinks and ready-to- drink teas and coffees” For nearly half a century (47 years), has increased stock dividend every year Sources: 100 Best Global Brands 2009”, Investor report 2008, America’s Greatest Brands, Volume III (2007), Company website; see also here100 Best Global Brands 2009Investor report 2008America’s Greatest Brands, Volume III Company websitehere

6. We Intuitively Know Why People Pay More, But Can We Demonstrate The Impact?

8. Relating Brand to Financial Value Brand = overall image of organization, product, service, person, etc. Image = composite of such things as name, trademark (logo), customer loyalty, reputation, etc. Valuable brands are said to have “brand equity,” or added value due to the brand Brand value = how much a buyer would pay to acquire the brand; usually it is positively influenced by brand equity

9. Brand Creates Value

10. “Brand Blindness” Intangible value consists of brands, human capital, and other assets that can’t be easily quantified. Despite their immense value, organizations tend to ignore their importance precisely because they can’t be measured or controlled. However, numerous studies have shown that intangibles, including brands, make up a greater and greater percentage of organizational value and therefore merit a far greater focus.

11. Intangible Value Is Well-Documented “Accenture estimated that intangibles accounted for almost 70% of the value of the S&P 500 in 2007, up from 20% in 1980.” — John Gerzema, The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It “Brands and other intangible assets now contribute the bulk of shareholder value in many sectors…. 72% of the value of the companies surveyed was not reflected in published balance sheets.” – “Current Practice in Brand Valuation” (June 2000)Current Practice in Brand Valuation

12. Already A Decade Ago, Demonstrated Impact Source: “Current Practice in Brand Valuation” (June 2000); “FTSE” is the Financial Times and Stock Exchange (UK)Current Practice in Brand Valuation

13. The Trend Continues Today “In a year of global financial turmoil, when every key financial indicator plummeted, the value of the top 100 brands increased by 2 percent to $2 trillion.” – BrandZ Top 100 Brands, 2009 BrandZ Top 100 Brands, 2009

14. More Evidence… “The value of the world's top 10 brands exceeds the market capitalization of 70% of U.S. firms.” (John Gerzema, interview with Bloomberg News (2008)John Gerzema, interview with Bloomberg News (2008) “The total worth of the 250 most valuable global brands is more than France's Gross Domestic Product.” (John Gerzema, interview with Bloomberg News (2008)John Gerzema, interview with Bloomberg News (2008) “Brands account for about 30% of the market capitalization of the S&P 500— around $4 trillion of the S&P’s $12 trillion.” (Joanna Seddon, EVP, Millward Brown Optimor, who oversees the Brand Z™ Top 100 report, cited in The Brand Bubble)The Brand Bubble “Brands account for more than one-third of shareholder value.” —Interbrand/JP Morgan Study, 2002Interbrand/JP Morgan Study, 2002

15. Visual Depiction of Brand Contribution to Market Capitalization

16. “Absolut” Proof “In the 1970's, American consumers accounted for 60% of the vodka purchased worldwide. However, 99% of the vodka consumed in the United States was being produced inexpensively by American distillers, the prevailing opinion being that all vodkas were alike.” “If Absolut was to face the challenge of breaking into the American market, it would have to create an image that set it apart from the cheaper American vodkas. “What Absolut needed was a way to show that it was the best vodka available, without actually saying that it was the best vodka available. “After creating Absolut's distinctive packaging…in 1981, the company…created an ad featuring a bottle of Absolut, photographed with a halo over it. The caption: "Absolut Perfection." “When the Absolut ad campaign began in 1981, the company was selling 20,000 cases annually in the U.S. In 1995, sales topped 3 million cases, an increase of 14,900%” Source: “Absolut Vodka: A Branding Case Study”“Absolut Vodka: A Branding Case Study” Versus Compare

17. The Case of UBS During the 1990s, financial services firm UBS grew through mergers and acquisitions. By 2000, UBS found that it “lacked international brand awareness and recognition in key markets.” Brand firm Prophet hired after spokesman himself “stumbled over the group’s confusing brands”. After 5 years: –In 2004, UBS ranked #45 in BusinessWeek’s annual listing of the top 100 global brands (the rankings are done by Interbrand, a competitor to ProphetIn 2004, UBS ranked #45 in BusinessWeek’s annual listing –“UBS' share price increased more than 170%--over 4 times the industry average and over 4 times performance of S&P 500”“UBS' share price increased more than 170%--over 4 times the industry average and over 4 times performance of S&P 500” Sources: Prophet Brand Strategy; The Financial Times; BusinessWeek/InterbrandThe Financial Times

18. A Similar Example: Credit Suisse 2005 - “The group announced its business strategy to unify its global banking businesses…to allow it to communicate as an integrated organisation.” January 2006 – New brand identity launched May 2006 – Financial Times reports rise in net profit of 35%, due to “new integrated ‘one bank’ strategy” (May 3) Source: The Brand UnionThe Brand Union

19. And Don’t Forget Reputation According to a 2009 Reputation Institute study: –57% of consumers would give the most reputable companies across the globe the benefit of the doubt in a time of crisis. –40% people would refuse to support the 20 least reputable global companies in a crisis. Source: Reputation Institute, Global Reputation Pulse study 2009 – “measures the corporate reputations of the world’s 600 largest companies in 32 countries”Reputation Institute In light of the 2010 faulty brakes scandal, what will happen to Toyota?

20. Understanding How Your Brand Builds Value Helps With Business Decisions What kinds of businesses or brands to invest in Requests for marketing dollars Where to spend marketing dollars How to measure return on marketing investment How to use different brands for different parts of the organization What kinds of organizations to partner with How to communicate with stakeholders about these decisions (you can show a logical basis) Source: Adapted from “Brand Valuation: The Financial Value of Brands,” InterbrandBrand Valuation: The Financial Value of Brands

21. Yet Even Top Private Sector Marketing Executives Find Brand Measurement Challenging QuestionChief Marketing Officers/ Senior Marketers Do you quantitatively understand how your brand impacts demand?” 55% - “No” As of today, does your brand influence all decisions made at your organization? 64% - “No” Why not?49% - “Inability to prove financial benefit of brand” 39% - “Metrics do not support the importance of brand” When it comes to proving the effectiveness of branding/marketing initiatives, board/C-suite demands are increasing. 80% - “Yes” If you had a quantified understanding of how, when and where your brand created value, which of the following do you believe would happen? 93% - “It would allow for a more focused investment in marketing” 69% - “It would give you more leverage to secure an investment from the board” 79% - “It would provide a greater influence across the organization for alignment and change” Source: “The Red Thread: The True Power of a Well-Managed Brand,” Interbrand, 2008The Red Thread: The True Power of a Well-Managed Brand

22. Various Brand Measurement Methods Are Available* ModelOwnerProvides Overall Estimate of Brand Value? # of Brands# of Consumers How Inherent Brand Value (Brand Equity) Is Measured BAVYoung & Rubicam No40K in total500K annually (Energized) Differentiation**, Relevance, Esteem, Knowledge BrandZWPPYes23K+ in all650K in all“Bonding” – rational and emotional attachment (Unnamed)InterbrandYes“Several thousand” Not available Not clear (possibly relevance and brand support)(possibly relevance and brand support) BrandMetricsProphetYes360 brands valued Not available Not clear(“strength of feeling”)strength of feeling (Unnamed)Brand Finance Yes500 annuallyN/A (publicly available information is used) Not clear (“customer loyalty, staff retention/recruitment”)customer loyalty, staff retention/recruitment”) * This information is a best estimate given information available via the Internet. **Initially the term was “differentiation”; the authors later added “energized” based on the results of research published in The Brand BubbleThe Brand Bubble

23. Two Perspectives Especially Useful for Communicators Hierarchical—BrandZ Equity is derived from progressively higher score on two attributes –Perception of quality (rational attachment) –Personal affinity (emotional attachment) Overall Impact—BAV Equity is derived from high score on 4 key attributes –Perception that the brand is unique (differentiation) –Perception that the brand is relevant to the customer’s life –Holding the brand in high esteem –Feeling knowledgeable about the brand

24. BrandZ’s Hierarchical Approach* Bonding (the strongest attachment) - Rational and emotional attachments to the brand to the exclusion of most other brands Advantage - Felt to have an emotional or rational advantage over other brands in the category Performance - Felt to deliver acceptable product performance and is on the consumer's short-list Relevance - Relevant to consumer's needs, in the right price range or in consideration set Presence (the weakest attachment) - Active familiarity based on past trial, saliency or knowledge of brand promise *Definitions and graphic are quoted from BrandZ.BrandZ

25. BAV’s Overall Impact Approach Energized Differentiation Vision Innovation Dynamism Relevance EsteemKnowledge Bonding

26. Sample BAV Calculations of Brand Premiums Source: John Gerzema, Young & Rubicam, The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It; numbers at left indicate added multiple, e.g. Consumers are willing to pay twice as much for Starbucks coffee as genericThe Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It

27. You Too Can Learn to Brand A Banana Name Logo/Visual Imagery Customer Loyalty –Differentiation –Relevance –Esteem –Knowledge Reputation –Integrity –Accountability –Transparency

28. Remember—Your Organization Needs You!