Excellence in Advertising

Leslie Butterfield

• Publisher: Routledge
• Year: 2009
• Print ISBN: 9781138171664
• eBook ISBN: 9781136404511
• Topic: Business
• Subtopic: Advertising
• Index: Business

While many books on advertising are written by people whose experience of the industry is either limited or else rather distant in time, Excellence in Advertising, has been created by a group of people who are directly involved in the business currently and are at the very top of their profession. The first edition of this book, published in 1997, proved to be a huge success both in the UK and internationally. This new edition is substantially updated and enlarged - with new authors added and new subjects covered. The cast list of authors, headed by Leslie Butterfield as editor and contributor, reads like a veritable Who's Who of advertising and marketing: John Bartle, Steve Henry, Professor Peter Doyle, Mike Sommers and now also Richard Hytner, Tim Broadbent, Tim Pile and others. Together their contributions present an authoritative view on what constitutes best practice in a wide range of key areas that are the context for the creation of effective advertising: Building successful brands Strategy development The analysis and interpretation of qualitative research Creative briefing Media strategy AND NEW IN THIS EDITION: Managing relationships Evaluating advertising Loyalty Shareholder value Total communication strategy Combining state-of-the-art thinking and practical advice, this book will be of value to those who use advertising to build brands, those who study advertising and its role and to those actively engaged in producing excellence in advertising on a daily basis. Leslie Butterfield is Chairman of Partners BDDH, the agency he founded in 1987. He is one of the UK advertising industry's most respected strategists, and a regular contributor to advertising conferences and publications. He was Chairman of the IPA's Training and Development Committee from 1989 to 1997 and is now a Council Member and Fellow of the IPA.

Overview: Chapter I

Peter Doyle and Stage 5 of the IPA’s Seven Stages training programme have become almost synonymous. In fact Peter ran the first course on Advertising and Business Effectiveness in 1979, and has done so in every subsequent year. Ratings of the course never stray far from excellent and many agencies have become regular and loyal users.

While the structure of the course has evolved, its core purpose is unchanged: to enhance the strategic understanding of people in advertising of current business management and marketing techniques. As such, it aims to place advertising in its proper context: one tool among many (albeit an important one) in the businessperson’s armoury.

The chapter included here was never presented in its entirety on the course. It does, however, do justice to the ‘spirit’ of the course, in particular by examining the issue of brands and branding, and by painting an honest picture of how advertising can contribute to these. Specifically, it covers:

• The value of successful brands
• The role of quality, service and communications in creating such brands
• The case for building as against acquiring brands
• Brand-extension strategies.

In its coverage, it sets a kind of framework for all that is to follow. Great advertising does not exist in a vacuum, it is there to serve a commercial goal. Enhancing the value of a brand is its greatest prize.

Chapter I

Building Successful Brands

Peter Doyle

Introduction

The role and valuation of brands has recently become a controversial issue. Not only is the importance of successful brands emphasized by marketing managers, some financial executives have developed a new enthusiasm for brands, having seen that their inclusion in the balance sheet enhances shareholder funds, reduces company gearing, and so facilitates further growth by acquisition. This chapter explores five key questions about brands: (1) What is a successful brand? (2) What is the value of a brand? (3) How are successful brands built? (4) What are the comparative advantages of buying brands versus building and developing them internally? and (5) What are the logic and economics behind brand-extension strategies?

The Successful Brand

Before defining a brand it is first necessary to define a product. The concept of a product is not straightforward. First, products and brands are mistakenly often associated only with fast-moving consumer goods. But today, the most rapidly growing and profitable products are in services – financial, retail and management. Also, besides products and services, people, places and ideas can be thought of as ‘products’. Politicians, movie-stars and privatization schemes are now marketed in much the same way as Coca-Cola or Crest toothpaste.

Second, products mean different things to people inside the business than they do to people outside. Inside, to the firm’s managers and accountants, a product is something produced in the factory or the office. It is about materials, components, labour costs, quality and output specifications. But outside, to the consumer, a product is something different - it is a means of meeting his or her needs or solving their problems. These needs and problems are as likely to be emotional and psychological as functional and economic. It is a product’s ability to meet these needs and aspirations which creates its value. The value of a product is not what the producer puts in but what the consumer gets out. As the chief executive of Black & Decker put it, ‘Our job is not to make quarter-inch drills, but to make quarter-inch holes’. Or the chairman of Revlon Cosmetics, ‘In the factory we make cosmetics, but in the store we sell hope’. Similarly, IBM has always maintained it ‘doesn’t sell products. It sells solutions to customers’ problems’ (Rodgers, 1986).

A product then is anything which meets the needs of customers. When several companies are offering rival products, they will want to identify and distinguish their particular offering. This is called ‘branding’, so there is a Black & Decker brand, a Revlon brand and an IBM brand. But the focus here is not on brands per se but on successful brands. Just because people are aware of a specific brand does not mean that it is successful. People recognized brands like the Sinclair C5, the Ford Edsel, the Co-op, or Wimpy restaurants, but they did not develop preferences for them. Some years ago a Landor Survey found, for example, that British Telecom was in the UK’s top ten brands for awareness, but in terms of esteem it was rated number 300. BT has been referred to as a strong negative brand. It was known for all the wrong reasons.

A positive or successful brand can be defined as follows. A successful brand is a name, symbol, design, or some combination, which identifies the ‘product’ of a particular organization as having a sustainable differential advantage.

‘Differential advantage’ means simply that customers have a reason for preferring that brand to competitors’ brands. ‘Sustainable’ means an advantage that is not easily copied by competitors. That is, the business creates barriers to entry, for example by developing an outstanding reputation or image for quality, service or reliability. Brands like IBM, Coca-Cola, Sony and Tesco are successful brands because they have such sustainable differential advantages, which, as shown below, invariably result in superior profit and market performance. Successful brands are always brand leaders in their segments.

Two implications of this definition can be noted. First, brands are only assets if they have sustainable differential advantages. If they are negative or neutral brands like BT, Woolworth’s, or the Austin Maestro, they should not appear on the balance sheet, however much is spent on advertising. Any profit these brands achieve is through their property or distribution investments rather than through the brand’s differential advantage.

Similarly, if the differential advantage is not sustainable, it should not appear on the balance sheet. In some markets such as games or children’s toys, a successful brand often has a life expectancy of only six months and thereafter has no value.

Second, like most other assets, brands depreciate without further investment. If management fails to reinvest in enhancing quality, service and brand image then the brand will decline. Hoover, Singer, Frigidaire and MG are examples of brands which were once so successful as to be almost generic names for the product, but which have since declined or disappeared due to lack of investment.

This is often underestimated. Most models suggest that brands tend to decay logarithmically (e.g. Parsons and Schultz, 1984). This means that in the short term managers can increase profits without damaging the brand’s market share by cutting back brand support. However, the mistake is in thinking that brand disinvestment can be continued. Without adequate support, typically after around a year or two (Clarke, 1976), the brand enters a period of spiralling decline.

How Brands Work

Brands work by facilitating and making more effective the consumer’s choice process. Every day an individual makes hundreds of decisions. He or she is besieged by countless products and messages competing for attention. To make life bearable and to simplify this decision-making process, the individual looks for short-cuts. The most important of these short-cuts is to rely on habit – buy brands that have proved satisfactory in the past. This is particularly the case for low-involvement purchases, which make up most of the things people buy. This does not mean that people are totally brand loyal of course, since most of them know that many brands will satisfy their needs. Most people ask for Coca-Cola but they are not too disappointed when they are offered Pepsi.

But this habit rule is not just based upon experience of use, it can also be based upon long-standing perceptions. People can have quite strong brand preferences even though they have never bought the product. This is especially true for aspirational products. My son has had a long preference for a Porsche, even though he has still to wait another three years before he is old enough for a driving licence. Such preferences or brand images are based upon cultural, social and personality factors, as well as commercial stimuli like advertising, public relations and prominence of distribution.

Even with non-routine, supposedly highly rational purchasing situations in the industrial sector, where decisions are taken by technical personnel, it is remarkable how important brand image is in the choice process. Even industrial buyers tend to rely on experience and long-held attitudes about the brand, rather than undertake a zero-based approach to the wide range of alternative options (see Levitt, 1983a). As the cynical IBM salesman is supposed to have said to a purchasing manager, ‘Nobody’s ever been fired for buying IBM’.

Successful brands are those which create this image or ‘personality’. T...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Dedication
• Contents
• List of contributors
• Foreword
• Preface
• Acknowledgements
• 1. Building successful brands
• 2. The advertising contribution
• 3. An overview of the pressures on the client
• 4. Strategy development
• 5. Quantitative data and advertising strategy development
• 6. Analysis and interpretation in qualitative research: a researcher’s perspective
• 7. Creative briefing
• 8. Creative briefing: the creative perspective
• 9. Getting the best out of people in advertising
• 10. The strategic importance of media
• 11. Evaluating advertising
• 12. Total communications strategy
• 13. Is there a role for advertising as a driver of loyalty?
• 14. Advertising and shareholder value
• Index