6 / INTERBRAND
10 PRINCIPLES OF STRONG BRANDS Today, due to the downturn in the economy and the ensuing reset in customer priorities, corporations need to be more aware than ever before of the many underlying forces that impact a brand’s ongoing strength. Business is changing, but the principles of strong brands still hold true. In the past few years, marketing accountability and a focus on isolated measurements like Return on Investment (ROI) or brand perception have led many brand owners astray from these fundamental principles. As a result, many brands are now seeing
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the consequences of shortsighted decisionmaking. One need only look to Toyota, which was so focused on increasing market share that it compromised the quality and reliability of its products – and the very foundation of its brand – to see the risks in this kind of behavior. Interbrand’s Brand Strength Score, which is comprised of 10 components, all of which have an important and equal role in the brand’s ability to generate value, is an effort to recalibrate the focus. It brings together all aspects of a brand – its people, products, positioning and partners – to create a more
COMMITMENT
A measure of an organization’s internal commitment to or belief in its brand. Commitment is the extent to which the brand receives support in terms of time, influence and investment. This year, the organizations that failed when it came to commitment were perhaps more visible than those that succeeded. BP, which fell off this year’s table, is one example of a company that neglected to incorporate the brand into operational execution and decision-making. If BP had stayed true to its “Beyond Petroleum” positioning, it is likely that a disaster of this magnitude would not have occurred. Instead, as news reports note, executives opted to put the brand at risk by taking shortcuts. Minimal safety precautions, rushed drilling, ignored warning signs that the well was exhibiting indicators that it might explode, and a managerial decision to shut off the Deepwater Horizon fire alarm to prevent waking up workers with 3 a.m. false alarms are all examples of an internal lack of commitment to the brand’s stated beliefs – and the repercussions, as seen here, are great. In a quieter way, Citi has also suffered for its lack of commitment to its brand. While it has vowed to change and refocus on trust, it has yet to translate this to the customer experience. It may want to change, but until it proves that this promise is central to its decision-making process, it will continue to lose brand equity. In contrast, ZARA, which has built its brand on providing customers with fast fashion, has shown a high level of commitment to its organization. ZARA has created internal operations that deliver on its fast fashion proposition, including providing store managers with real-time data in order to make better stock allocation decisions. Overall, ZARA’s commitment to its brand has paid off as it continues to expand each year. – Graham Hales, CEO of Interbrand London
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holistic and accurate way of understanding and evaluating brands. While Interbrand has always looked to these components in our years of valuing brands, the brand strength components have undergone an update for 2010 to better reflect the factors that are reshaping the marketplace. These factors include proliferation of social media, corporate citizenship, audience fragmentation, the increasing role of product design and increased pressure on ROI.
PROTECTION
This component examines how secure a brand is across a number of dimensions – from legal protection and proprietary ingredients to design, scale or geographic spread. Whether it is Coca-Cola’s patent on its exact formula or IBM’s strategic acquisitions, protection is a vital brand component. This year, brands that scored high in this category include Kleenex and Apple, which both focused on protecting the integrity of their brand. Kleenex, in many ways, holds an enviable position: The brand has become a generic term for facial tissue. However, as with other brands in this position, this comes with risks. To ensure that its brand name doesn’t go the way of the escalator, thermos or zipper, Kleenex has taken measures to protect its name by securing trademark rights – and continues to question any brand that uses its name unlawfully. Apple is another brand that scored high in protection this year. Not only did it focus on policing its “i-“ prefix names, but it also assumed an alias when filing “iPad” for trademark status, in an attempt to throw people off and protect its product launch. Additionally, Apple stepped up the registration of all its products, from the shape of its iPod to its desktop icons and apps. Meanwhile, a brand that saw protection lag was Budweiser. Its 14-year battle to trademark its name in the Czech Republic, Germany and Austria with Czech competitor Budejovicky Budvar (which began production of its Budweiser beer in 1895) ended negatively for the brand. Because of its failure to protect its brand name, it must now sell its beer under a different name in these markets. – Frank Chen, CEO of Interbrand Shanghai