It seems that every page I turn in the business press, I see “brand.” Recent headlines from the New York Times, the Wall Street Journal and MSNBC include “Berkshire Is Still A Brand Name,” Motorola’s Goals Are Modest Given Their Strong Brand Name Recognition,” “U.S. Auto Brands Attract World Of Bidders” and “Republican Party Rebranding Itself.”
Why has the subject of corporate and product branding become so hot? What has caused this particular subject to capture the strong attention of senior management of successful companies, companies that enjoy strong corporate and brand images in the investment world and in their market places?
There are many reasons for this relatively recent phenomenon but I believe that the major reason is that some top executives now see spending on brand development and brand maintenance as not just a cost but rather a business tool – a tool that allows the brand to receive a premium in its market place, and a corporation’s stock to receive a premium in the stock market. “Brand” has become in essence a company’s tool to increase corporate profitability, even though the green eye shade guys don’t (yet) allow asset values of a company’s brands to play a significant role in a company’s balance sheet.
Unfortunately, these perceptive leaders are still flying largely on intuition and personal experience. No financial formulas yet exist that specify appropriate and acceptable brand building and maintenance spending. Still relevant today is what Sam Wanamaker said – the owner and builder of one of the largest and most successful department stores in America in its time (the early 1900’s) – when asked how he could justify spending so much money on advertising. His answer was that he knew that half the money he was spending was wasted – but he didn’t know which half.
Walter Margulies taught me this in the 1970s, and it is still the case: the more branding specialists position their services to management as a driver of increased corporate profits, the more significant the role of professional branding specialists will become to top management.