Summary: Brand-Leadership

Review and Analysis of Aaker and Joachimsthaler's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• eBook ISBN: 9782806239914
• Topic: Business
• Subtopic: Advertising
• Index: Business

The must-read summary of David Aaker and Erich Joachimsthaler's book: `Brand-Leadership: The Evolving Paradigm`.

This complete summary of the ideas from David Aaker and Erich Joachimsthaler's book `Brand-Leadership` shows that creating and progressively building strong brands is an important commercial activity for most business enterprises. However, the way that strong brands are built is rapidly changing and evolving. A new paradigm is emerging in which achieving brand leadership is becoming more important than simply building brand equity. In fact, the paradigm for brand building is evolving from the tactical and reactive approach of traditional brand management to the much more strategic and visionary brand leadership approach. 

Added-value of this summary: 
• Save time 
• Understand the key concepts 
• Increase your business knowledge 

To learn more, read `Brand-Leadership` and discover how to overcome and address the challenges brought by today’s new brand paradigm.

Summary of Brand Leadership (David Aaker and Erich Joachimsthaler)

The New Paradigm
Achieve brand leadership

Main Idea

The traditional brand management system is being superceded by the brand leadership paradigm because of the need to deal with new market complexities – competitive pressures, the evolution of channels, global competition, multiple brands, aggressive brand extensions and the arrival of complex subbrands.

Supporting Ideas

The new brand leadership paradigm is based on a number of assumptions:

• The brand building strategy should be aligned with the business strategy of the overall business enterprise.
• Brand leaders should be strategic and visionary rather than reactionary and focused on tactics.
• Brands are long-term intangible assets of the business, and programs which build the brand creates assets that underpin the future success of the business enterprise.
• Brands enable a business to avoid the need to compete on price and instead sustain premium pricing levels.
• The actual value of the brand is difficult to quantify precisely but it can be estimated as a percentage of the earnings stream generated by each major product.

The new paradigm of building brand leadership is rapidly replacing the classic brand management system. The classic system worked well for decades, in part because brand management was always considered a high profile position. Thus, managers who were exceptional planners and doers tended to be attracted to the brand manager role. In an increasingly more complex business environment, however, the old paradigm is becoming less and less relevant. The new brand leadership paradigm is becoming more and more important.

For example, consider the brands which are today competing to achieve brand leadership:

• Virgin Atlantic Airways – founded and led by Richard Branson with the objective of “providing all classes of traveler with the highest quality of travel at the lowest cost”.
• L.L. Bean – with its legendary “Guarantee of 100% satisfaction”
• Marriott – which is in the process of extending its brand by creating Marriott Residence Inns, Courtyard by Marriott and Fairfield Inn by Marriott.
• Adidas – with a new focus on participation in sport rather than attempting to equip just the elite sports people.
• Nike – with the successful introduction of its flagship stores, NikeTown, and Air Jordans.
• Swatch – which, since its 1983 launch, has built its brand around the concept of fun, youthful and provocative watches.
• MasterCard – which has become a brand leader by sponsoring the soccer World Cup.

If the goal of brand leadership is to build strong brands, how do you tell whether or not a brand is strong? Fortunately, it is relatively easy to estimate the value of a brand using straightforward logic:

1. Identify the earnings stream for each major product in the brand family.
2. Decide what proportion of that earnings stream can be attributed to:
   • Fixed assets – plant and equipment.
   • Intangibles – patents, systems, people or processes.
   • The brand.
3. Aggregate the various product market values to determine an overall value for the brand equity.

This will give a subjective measure (plus or minus 30-percent) of the overall brand equity. And that brand equity, in turn, can be broken down into four dimensions:

• Brand awareness – is important because customers like the familiar. Awareness effects perceptions and consumer tastes. Any brand that achieves high levels of awareness is more likely to be chosen over its competitors.
• Perceived quality – is a special type of association in the mind of the consumer. Brands that are perceived as being high quality are more profitable because they can demand and receive premium pricing.
• Brand associations – are what connects the customer and the brand. This will be a dynamic mix of images, product attributes, organizational attributes, symbols and the brand personality. A large proportion of brand management activities are involved with forming and shaping these associations.
• Brand loyalty – lies at the heart of the value of a brand. The greater the loyalty, the higher the brand is valued, but even those brands which have...

Table of contents

• Title page
• Book Presentation
• Summary of Brand Leadership (David Aaker and Erich Joachimsthaler)
• About the Summary Publisher
• Copyright