Brand Admiration

Building A Business People Love

C. Whan Park, Deborah J. MacInnis, Andreas B. Eisingerich

• Publisher: Wiley
• Year: 2016
• Print ISBN:
  9781119308065
• Edition: 1
• eBook ISBN:
  9781119308096
• Topic: Business
• Subtopic: Marketing
• Index: Business

Brand Admiration uses deep research on consumer psychology, marketing, consumer engagement and communication to develop a powerful, integrated perspective and innovative approach to brand management. Using numerous real-world examples and backed by research from top notch academics, this book describes how companies can turn a product, service, corporate, person or place brand into one that customers love, trust and respect; in short, how to make a brand admired. The result? Greater brand loyalty, stronger brand advocacy, and higher brand equity. Admired brands grow more revenue in a more efficient way over a longer period of time and with more opportunities for growth.

The real power of Brand Admiration is that it provides concrete, actionable guidance on how brand managers can make customers (and employees) admire a brand. Admired brands don't just do the job; they offer exactly what customers need (enabling benefits), in way that's pleasing, fun, interesting, and emotionally involving (enticing benefits), while making people feel good about themselves (enriching benefits). Providing these benefits, called 3 Es, is foundational to building, strengthening and leveraging brand admiration.

In addition, t he authors articulate a common-sense and action based measure of brand equity, and they develop dashboard metrics to diagnose if there are any 'canaries in the coal mine', and if so, what to do next. In short, Brand Admiration provides a coherent, cohesive approach to helping the brand stand the test of time.

A well-designed, well-managed brand becomes a part of the public consciousness, and ultimately, a part of the culture. This trajectory is the fruit of decisions made from an integrated strategic standpoint. This book shows you how to shift the process for your brand, with practical guidance and an analytical approach.

SECTION 1

THE BIG PICTURE

Chapter 1
Why Brand Admiration?

Admired brands create blockbuster value for companies and customers alike.

Introduction

Yes, we have heard about it and seen it with our own eyes, but it is still hard to fully grasp Apple’s miraculous comeback during the first 16 years of the 21st century. In 1999, Microsoft’s stock was at a record high, with its market capitalization close to $620 billion. Apple was teetering on bankruptcy. The notion that Apple would ever match Microsoft’s financial firepower, let alone surpass it, was unthinkable. In a 1998 Vanity Fair interview, Bill Gates “couldn’t imagine a situation in which Apple would ever be bigger and more profitable than Microsoft.” Nearly 17 years later, Apple’s market capitalization stands at $683 billion, more than double that of Microsoft’s. Sales of the iPhone 6s have been phenomenal, and more than 48 million iPhone 6 and 6s units were sold during the last quarter of 2015 alone.¹ Indeed, in July of 2015 Microsoft’s chief executive Satya Nadelia stated that if Microsoft is to compete with Apple, Google, and others, Windows must become desired. Microsoft’s Windows operating system has endured as a must-have work tool, not because it’s an object that customers love. From his perspective, making customers love Windows was the critical objective.²

We don’t know what will happen to Apple five or 20 years from now. But the answers to two important questions might help Apple strengthen its success over time. The first asks how Apple turned itself around. The second asks what Apple must do to ensure continuous growth and prosperity. As to the first question, we’ve heard a lot about the things that Apple did right when it introduced the iMac, iPod, and iPhone. However, we do not understand how these and other factors created the powerful Apple brand. Knowing a list of factors is one thing. Understanding how they work together to produce such a strong impact on customers is another. Unless we can answer the first question, it is hard to answer the second.

Microsoft needs to ask why it failed to make people love Windows, despite its must-have usefulness. It also needs to ask whether creating brand love is the ultimate and true destination point to which Microsoft should aspire. We think the answer is no. While important for developing prosperous customer relationships, love alone is limited in its power to sustain customer relationships over time. To create prosperous and sustainable customer relationships, Windows needs to go beyond brand love. Like the world’s most successful brands, it needs to become admired. A fundamental goal of this book is to discuss what admired brands are, how to develop them, how to strengthen them, and how to leverage them over time so that they reap maximal benefits for customers and the company alike. Why does this matter? Let’s explore the brand’s value to companies and customers alike.

The Value of a Brand

The American Marketing Association defines a brand as a name, term, symbol, and/or design that’s intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of the competition.³ However, we argue that a brand is more than a mere name that helps with identification and differentiation. Identifying a brand and differentiating it from competing brands only makes sense when the brand offers value. We define a brand as a value-generating entity (name) relevant to both customers and the brand owner. If no one wants to buy the brand, the name doesn’t have much market relevance. Such a brand fails to provide value to either the company or customers. But what does it mean to say that a brand offers value to customers and companies? Let’s first consider what we mean by brand value to companies.

Value to Companies

Surprisingly, we have paid so much attention to brands as identifiers and marketplace differentiators that we have not paid much attention to the substantial, real, and strategic benefits that brands can provide to companies. But these benefits are numerous and significant, as Table 1.1 (and Figure 1.1, later in the chapter) suggests.

Table 1.1 Value of an Admired Brand to a Company

Types of Value	What an Admired Brand Does
Revenue Generator	An admired brand increases customer loyalty and attracts new customers.
Cost-Efficiency Enhancer	An admired brand is in demand, which allows the company to take advantage of economies of scale and allows the company to enjoy cost-saving customer brand loyalty and brand advocacy behaviors.
Growth Facilitator	An admired brand facilitates the introduction and success of its extensions to other markets and other products.
Human-Capital Builder	An admired brand helps recruit and retain talented people who will ultimately determine the company’s success in the market place.
Employee-Morale Booster	An admired brand motivates employees to protect and strengthen the brand.
Second-Chance Provider	An admired brand enhances customers’ willingness to forgive mistakes made by a company.
Market Protector	An admired brand serves as a barrier to entry to future competitors.
Alliance Facilitator	An admired brand facilitates alliances with desirable and powerful external partners.
Asset Builder	An admired brand enhances the company’s marketplace value, and also allows it to demand a premium price in a brand-selling situation.

Figure 1.1 The Brand Admiration Management System

Revenue Generator

An admired brand increases customer loyalty and attracts new customers. These twin outcomes enhance a brand’s revenue. Although producing a soft drink is not rocket science, new entrants find it incredibly hard to compete in this market, since most customers have a strong and long-standing preference for a particular soft drink brand. And this holds true worldwide! A strong brand also increases revenue by making customers less price sensitive, allowing companies to charge a higher per-unit price. Think about the price premium brands such as McKinsey and Goldman Sachs can charge in the marketplace.

Cost-Efficiency Enhancer

An admired brand is in demand, which allows the company to take advantage of economies of scale. Strong brands also create favorable word of mouth (WOM) and customer evangelists who further contribute to marketing efficiency by lowering marketing costs. In fact, some brands became marketplace successes purely through WOM. Trader Joe’s is an example. Think about the stories customers relate about the unique products they can get only at Trader Joe’s. China’s Xiaomi, a tech company, relies entirely on brand communities and WOM from its fans for publicity and brand-promoting activities. Or consider the pride customers take in their durable Patagonia jackets and the stories they share about them. Since advertising and promotion costs often eat up a substantial portion of companies’ budgets, enormous cost efficiencies are realized by fan-based WOM.

Growth Facilitator

An admired brand can be leveraged and extended, creating growth (and revenue) from new product or market categories. An admired brand makes it easier for companies to grow and grow efficiently, through product and brand extensions that use the brand name. Such extensions help the company’s overall growth. Oracle grew by extending its brand to a portfolio of cloud and mobile solutions. Apple’s extensions have allowed it to grow from $19.3 billion in 2006 to $234 billion in December of 2015.⁴

Human-Capital Builder

An admired brand helps recruit and retain talented people who will ultimately determine the company’s marketplace success. Talent is the most difficult core competency for competitors to copy. Think about Google and Tesla’s abilities to attract top talent. Admired brands attract top talent at all levels of the organization.

Employee-Morale Booster

An admired brand also motivates employees to protect and strengthen the brand. Employees of admired brands are more committed to nurturing customers than are employees working for brands with no discernable equity. Why? Because they believe in the brand and are proud of what they do to help it flourish.⁵ Costco, w...

Table of contents

• Cover
• Title Page
• Copyright
• Table of Contents
• List of Figures
• List of Tables
• About the Authors
• Foreword
• Preface: What Makes This Book Different?
• SECTION 1: THE BIG PICTURE
• SECTION 2: BUILDING ADMIRED BRANDS
• SECTION 3: STRENGTHENING AND LEVERAGING ADMIRED BRANDS
• SECTION 4: ASSESSING THE VALUE OF ADMIRED BRANDS TO FIRMS AND CUSTOMERS
• Afterword: Concluding Thoughts
• Index
• End User License Agreement