(2000). The Brand report card. In

The Brand Report Card

by Kevin Lane Keller

Reprint r00104

JANUARY– FEBRUARY 2000

Reprint Number

Narcissistic Leaders: The Incredible Pros, the Inevitable Cons R 0 0 1 0 5

Co-opting Customer Competence R 0 0 1 0 8

Coevolving: At Last, a Way to Make Synergies Work R 0 0 1 0 3

A Market-Driven Approach to Retaining Talent R 0 0 1 0 1

Common Sense and Conflict: R 0 0 1 1 1An Interview with Disney’s Michael Eisner

A Modest Manifesto for Shattering the Glass Ceiling R 0 0 1 0 7

Communities of Practice: The Organizational Frontier R 0 0 1 1 0

FORETHOUGHTThe Power of Positive Deviancy F00101Green Reporting F00102The Electronic Negotiator F00103The New Atlantic Century F00104Performance Appraisal Reappraised F00105The Mismanagement of Advertising F00106

HBR CASE STUDYWhen the Boss Won’t Budge R 0 0 1 0 6

PERSPECTIVESThe Future of Commerce R 0 0 1 1 2

THINKING ABOUT.. .Discovering New Value in Intellectual Property R 0 0 1 0 9

MANAGER’S TOOL KITThe Brand Report Card R 0 0 1 0 4

BOOK IN REVIEWBeating Microsoft at Its Own Game R 0 0 1 0 2

MICHAEL MACCOBY

C.K. PRAHALAD AND

VENKATRAM RAMASWAMY

KATHLEEN M. EISENHARDT AND

D. CHARLES GALUNIC

PETER CAPPELLI

SUZY WETLAUFER

DEBRA E. MEYERSON AND

JOYCE K. FLETCHER

ETIENNE C. WENGER AND WILLIAM M. SNYDER

JERRY STERNIN AND ROBERT CHOO

ANS KOLK

A CONVERSATION WITH KATHLEEN VALLEY

HERMANN SIMON AND MAX OTTE

DICK GROTE

JOHN PHILIP JONES

REGINA FAZIO MARUCA AND

JOHN M. MILHAVEN

ADRIAN J. SLYWOTZKY; CLAYTON M.

CHRISTENSEN AND RICHARD S. TEDLOW;

AND NICHOLAS G. CARR

KEVIN G. RIVETTE AND

DAVID KLINE

KEVIN LANE KELLER

J. BRADFORD DELONG AND

A. MICHAEL FROOMKIN

uilding and properly managing brand equity has become a priority for companies of all sizes, in all types of industries, in all types of markets.

After all, from strong brand equity flow customer loy-alty and profits. The rewards of having a strong brandare clear.

The problem is, few managers are able to step backand assess their brand’s particular strengths andweaknesses objectively. Most have a good sense ofone or two areas in which their brand may excel ormay need help. But if pressed, many (understandably)would find it difficult even to identify all of the fac-tors they should be considering. When you’re im-mersed in the day-to-day management of a brand, it’snot easy to keep in perspective all the parts that affectthe whole.

In this article, I’ll identify the ten characteristicsthat the world’s strongest brands share and constructa brand report card –a systematic way for managers tothink about how to grade their brand’s performancefor each of those characteristics. The report card canhelp you identify areas that need improvement, recog-nize areas in which your brand is strong, and learn

Copyright © 1999 by the President and Fellows of Harvard College. All rights reserved. 3

M A N A G E R ’ S T O O L K I T

The world’s strongest brandsshare ten attributes. How does

your brand measure up?

by Kevin Lane Keller

B

more about how your particularbrand is configured. Constructingsimilar report cards for your com-petitors can give you a clearer pictureof their strengths and weaknesses.One caveat: Identifying weak spotsfor your brand doesn’t necessarilymean identifying areas that needmore attention. Decisions that mightseem straightforward – “We haven’tpaid much attention to innovation:let’s direct more resources towardR&D” – can sometimes prove to beserious mistakes if they undermineanother characteristic that custom-ers value more.

The Top Ten TraitsThe world’s strongest brands sharethese ten attributes:

1. The brand excels at deliveringthe benefits customers truly desire.Why do customers really buy a prod-uct? Not because the product is acollection of attributes but becausethose attributes, together with thebrand’s image, the service, and manyother tangible and intangible factors,create an attractive whole. In somecases, the whole isn’t even some-thing that customers know or can saythey want.

Consider Starbucks. It’s not just acup of coffee. In 1983, Starbucks wasa small Seattle-area coffee retailer.Then while on vacation in Italy,Howard Schultz, now Starbuckschairman, was inspired by the ro-mance and the sense of communityhe felt in Italian coffee bars and cof-fee houses. The culture grabbed him,and he saw an opportunity.

“It seemed so obvious,” Schultzsays in the 1997 book he wrote withDori Jones Yang, Pour Your HeartInto It. “Starbucks sold great coffeebeans, but we didn’t serve coffee bythe cup. We treated coffee as pro-

duce, something to be bagged andsent home with the groceries. Westayed one big step away from theheart and soul of what coffee hasmeant throughout centuries.”

And so Starbucks began to focusits efforts on building a coffee barculture, opening coffee houses likethose in Italy. Just as important, thecompany maintained control overthe coffee from start to finish – fromthe selection and procurement of thebeans to their roasting and blendingto their ultimate consumption. Theextreme vertical integration has paidoff. Starbucks locations thus far havesuccessfully delivered superior bene-fits to customers by appealing to allfive senses – through the enticingaroma of the beans, the rich taste ofthe coffee, the product displays andattractive artwork adorning thewalls, the contemporary music play-ing in the background, and even thecozy, clean feel of the tables andchairs. The company’s startling suc-cess is evident: The average Star-bucks customer visits a store 18times a month and spends $3.50 avisit. The company’s sales and prof-its have each grown more than 50%annually through much of the 1990s.

2. The brand stays relevant. Instrong brands, brand equity is tiedboth to the actual quality of the prod-uct or service and to various intangi-ble factors. Those intangibles include“user imagery” (the type of personwho uses the brand); “usage imagery”(the type of situations in which thebrand is used); the type of personalitythe brand portrays (sincere, exciting,competent, rugged); the feeling thatthe brand tries to elicit in customers(purposeful, warm); and the type ofrelationship it seeks to build with itscustomers (committed, casual, sea-sonal). Without losing sight of theircore strengths, the strongest brandsstay on the leading edge in the prod-uct arena and tweak their intangi-bles to fit the times.

Gillette, for example, pours mil-lions of dollars into R&D to ensurethat its razor blades are as technolog-ically advanced as possible, callingattention to major advances throughsubbrands (Trac II, Atra, Sensor,Mach3) and signaling minor im-provements with modifiers (Atra

4 harvard business review January–February 2000

M A N A G E R ’ S T O O L K I T • The Brand Repor t Card

Rate your brand on a scaleof one to ten (one being extremely poor and ten being extremely good) foreach characteristic below.Then create a bar chart that reflects the scores. Usethe bar chart to generatediscussion among all those individuals who participatein the management of your brands. Looking at the results in that mannershould help you identify areas that need improve-ment, recognize areas inwhich you excel, and learnmore about how your partic-ular brand is configured.

It can also be helpful tocreate a report card and chartfor competitors’ brands simply by rating thosebrands based on your ownperceptions, both as a com-petitor and as a consumer.As an outsider, you mayknow more about how theirbrands are received in themarketplace than they do.

Keep that in mind as youevaluate your own brand.Try to look at it through theeyes of consumers’ ratherthan through your ownknowledge of budgets,teams, and time spent onvarious initiatives.

Rating Your Brand

Kevin Lane Keller is the E.B. Os-

born Professor of Marketing at the

Amos Tuck School of Business at

Dartmouth College in Hanover,

New Hampshire. He is the author of

Strategic Brand Management (Pren-

tice-Hall, 1998).

harvard business review January–February 2000 5

The Brand Repor t Card • M A N A G E R ’ S T O O L K I T

The brand excels at delivering the benefits customers truly desire.

Have you attempted to uncover unmet consumer needsand wants? By what methods? Do you focus relentlesslyon maximizing your customers’ product and serviceexperiences? Do you have a system in place for gettingcomments from customers to the people who can effectchange?

The brand stays relevant.Have you invested in product improvements that provide better value for your customers? Are you intouch with your customers’ tastes? With the currentmarket conditions? With new trends as they apply to your offering? Are your marketing decisions basedon your knowledge of the above?

The pricing strategy is based on consumers’perceptions of value.

Have you optimized price, cost, and quality to meet orexceed customers’ expectations? Do you have a systemin place to monitor customers’ perceptions of yourbrand’s value? Have you estimated how much valueyour customers believe the brand adds to your product?

The brand is properly positioned.Have you established necessary and competitive pointsof parity with competitors? Have you established desirable and deliverable points of difference?

The brand is consistent.Are you sure that your marketing programs are notsending conflicting messages and that they haven’tdone so over time? Conversely, are you adjusting yourprograms to keep current?

The brand portfolio and hierarchy make sense.Can the corporate brand create a seamless umbrella for all the brands in the portfolio? Do the brands in that portfolio hold individual niches? How extensively do the brands overlap? In what areas? Conversely, do thebrands maximize market coverage? Do you have a brandhierarchy that is well thought out and well understood?

The brand makes use of and coordinates a fullrepertoire of marketing activities to build equity.

Have you chosen or designed your brand name, logo,symbol, slogan, packaging, signage, and so forth to maximize brand awareness? Have you implemented integrated push and pull marketing activities that target both distributors and customers? Are you awareof all the marketing activities that involve your brand?Are the people managing each activity aware of one another? Have you capitalized on the unique capabili-ties of each communication option while ensuring thatthe meaning of the brand is consistently represented?

The brand’s managers understand what thebrand means to consumers.

Do you know what customers like and don’t like about a brand? Are you aware of all the core associations people make with your brand, whether intentionally created by your company or not? Have you created detailed, research-driven portraits of your target customers? Have you outlined customer-driven boundaries for brand extensions and guidelines formarketing programs?

The brand is given proper support, and thatsupport is sustained over the long run.

Are the successes or failures of marketing programs fully understood before they are changed? Is the brandgiven sufficient R&D support? Have you avoided thetemptation to cut back marketing support for the brandin reaction to a downturn in the market or a slump insales?

The company monitors sources of brand equity.Have you created a brand charter that defines the meaning and equity of the brand and how it should betreated? Do you conduct periodic brand audits to assessthe health of your brand and to set strategic direction?Do you conduct routine tracking studies to evaluate current market performance? Do you regularly distribute brand equity reports that summarize all relevant research and information to assist marketers in making decisions? Have you assigned explicit responsibility for monitoring and preserving brand equity?

score

Plus, SensorExcel). At the sametime, Gillette has created a consis-tent, intangible sense of product su-periority with its long-running ads,“The best a man can be,” which aretweaked through images of men atwork and at play that have evolvedover time to reflect contemporarytrends.

These days, images can be tweakedin many ways other than through tra-ditional advertising, logos, or slogans.“Relevance” has a deeper, broadermeaning in today’s market. Increas-ingly, consumers’ perceptions of acompany as a whole and its role in so-ciety affect a brand’s strength as well.Witness corporate brands that veryvisibly support breast cancer researchor current educational programs ofone sort or another.

3. The pricing strategy is based on consumers’ perceptions of value.The right blend of product quality,design, features, costs, and prices isvery difficult to achieve but wellworth the effort. Many managers arewoefully unaware of how price canand should relate to what customersthink of a product, and they there-fore charge too little or too much.

For example, in implementing itsvalue-pricing strategy for the Cas-cade automatic-dishwashing deter-gent brand, Procter & Gamble madea cost-cutting change in its formu-lation that had an adverse effect onthe product’s performance under certain – albeit somewhat atypical –water conditions. Lever Brothersquickly countered, attacking Cas-cade’s core equity of producing “vir-tually spotless” dishes out of thedishwasher. In response, P&G im-mediately returned to the brand’sold formulation. The lesson to P&Gand others is that value pricingshould not be adopted at the expenseof essential brand-building activities.

By contrast, with its well-knownshift to an “everyday low pricing”(EDLP) strategy, Procter & Gambledid successfully align its prices withconsumer perceptions of its prod-ucts’ value while maintaining ac-ceptable profit levels. In fact, in thefiscal year after Procter & Gambleswitched to EDLP (during which italso worked very hard to streamlineoperations and lower costs), the com-

pany reported its highest profit mar-gins in 21 years.

4.The brand is properly positioned.Brands that are well positioned oc-cupy particular niches in consumers’minds. They are similar to and dif-ferent from competing brands in cer-tain reliably identifiable ways. Themost successful brands in this regardkeep up with competitors by creat-ing points of parity in those areaswhere competitors are trying to findan advantage while at the same timecreating points of difference toachieve advantages over competi-tors in some other areas.

The Mercedes-Benz and Sonybrands, for example, hold clear ad-vantages in product superiority andmatch competitors’ level of service.Saturn and Nordstrom lead their re-spective packs in service and holdtheir own in quality. Calvin Kleinand Harley-Davidson excel at pro-viding compelling user and usageimagery while offering adequate oreven strong performance.

Visa is a particularly good exampleof a brand whose managers under-stand the positioning game. In the1970s and 1980s, American Expressmaintained the high-profile brand in the credit card market through aseries of highly effective marketingprograms. Trumpeting that “mem-bership has its privileges,” Ameri-can Express came to signify status,prestige, and quality.

In response, Visa introduced theGold and the Platinum cards andlaunched an aggressive marketingcampaign to build up the status of its cards to match the American Ex-press cards. It also developed an ex-tensive merchant delivery system todifferentiate itself on the basis of superior convenience and accessi-bility. Its ad campaigns showcased desirable locations such as famousrestaurants, resorts, and events thatdid not accept American Expresswhile proclaiming, “Visa. It’s every-where you want to be.” The aspira-tional message cleverly reinforcedboth accessibility and prestige and

helped Visa stake out a formidableposition for its brand. Visa becamethe consumer card of choice for fam-ily and personal shopping, for per-sonal travel and entertainment, andeven for international travel, a for-mer American Express stronghold.

Of course, branding isn’t static,and the game is even more difficultwhen a brand spans many productcategories. The mix of points of par-ity and point of difference thatworks for a brand in one categorymay not be quite right for the samebrand in another.

5. The brand is consistent. Main-taining a strong brand means strikingthe right balance between continu-ity in marketing activities and thekind of change needed to stay rele-vant. By continuity, I mean that thebrand’s image doesn’t get muddledor lost in a cacophony of marketingefforts that confuse customers bysending conflicting messages.

Just such a fate befell the Michelobbrand. In the 1970s, Michelob ran ads

featuring successful young profes-sionals that confidently proclaimed,“Where you’re going, it’s Michelob.”The company’s next ad campaigntrumpeted, “Weekends were madefor Michelob.” Later, in an attemptto bolster sagging sales, the themewas switched to “Put a little week-end in your week.” In the mid-1980s,managers launched a campaigntelling consumers that “The nightbelongs to Michelob.” Then in 1994we were told, “Some days are betterthan others,” which went on to ex-plain that “A special day requires aspecial beer.” That slogan was subse-quently changed to “Some days weremade for Michelob.”

Pity the poor consumers. Previousadvertising campaigns simply re-quired that they look at their cal-endars or out a window to decidewhether it was the right time todrink Michelob; by the mid-1990s,they had to figure out exactly whatkind of day they were having as well.After receiving so many differentmessages, consumers could hardly



Maintaining a strong brand means striking theright balance between continuity and change.

be blamed if they had no idea whenthey were supposed to drink thebeer. Predictably, sales suffered.From a high in 1980 of 8.1 millionbarrels, sales dropped to just 1.8 mil-lion barrels by 1998.

6. The brand portfolio and hierar-chy make sense. Most companies donot have only one brand; they createand maintain different brands fordifferent market segments. Singleproduct lines are often sold underdifferent brand names, and differentbrands within a company hold dif-ferent powers. The corporate, orcompanywide, brand acts as an um-brella. A second brand name underthat umbrella might be targeted atthe family market. A third brandname might nest one level below the

family brand and appeal to boys, forexample, or be used for one type ofproduct.

Brands at each level of the hierar-chy contribute to the overall equityof the portfolio through their indi-vidual ability to make consumersaware of the various products andfoster favorable associations withthem. At the same time, though,each brand should have its ownboundaries; it can be dangerous totry to cover too much ground withone brand or to overlap two brandsin the same portfolio.

The Gap’s brand portfolio pro-vides maximum market coveragewith minimal overlap. Banana Re-public anchors the high end, the Gapcovers the basic style-and-qualityterrain, and Old Navy taps into thebroader mass market. Each brandhas a distinct image and its ownsources of equity.

BMW has a particularly well-designed and implemented hierar-chy. At the corporate brand level,BMW pioneered the luxury sportssedan category by combining seem-ingly incongruent style and perfor-mance considerations. BMW’sclever advertising slogan, “The ulti-mate driving machine,” reinforcesthe dual aspects of this image and isapplicable to all cars sold under the

BMW name. At the same time, BMWcreated well-differentiated subbrandsthrough its 3, 5, and 7 series, whichsuggest a logical order and hierarchyof quality and price.

General Motors, by contrast, stillstruggles with its brand portfolioand hierarchy. In the early 1920s, Alfred P. Sloan decreed that his com-pany would offer “a car for everypurse and purpose.” This philosophyled to the creation of the Cadillac,Oldsmobile, Buick, Pontiac, andChevrolet divisions. The idea wasthat each division would appeal to a unique market segment on the basis of price, product design, userimagery, and so forth. Through theyears, however, the marketing over-lap among the five main GM divi-

sions increased, and the divisions’distinctiveness diminished. In themid-1980s, for example, the com-pany sold a single body type (the J-body) modified only slightly for thefive different brand names. In fact,advertisements for Cadillac in the1980s actually stated that “motorsfor a Cadillac may come from otherdivisions, including Buick and Olds-mobile.”

In the last ten years, the companyhas attempted to sharpen the divi-sions’ blurry images by reposition-ing each brand. Chevrolet has beenpositioned as the value-priced, entry-level brand. Saturn represents no-haggle customer-oriented service.Pontiac is meant to be the sporty,performance-oriented brand foryoung people. Oldsmobile is thebrand for larger, medium-pricedcars. Buick is the premium, “nearluxury” brand. And Cadillac, ofcourse, is still the top of the line. Yetthe goal remains challenging. The financial performance of Pontiacand Saturn has improved. But thetop and bottom lines have never re-gained the momentum they hadyears ago. Consumers remain con-fused about what the brands standfor, in sharp contrast to the clearlyfocused images of competitors likeHonda and Toyota.

7. The brand makes use of and co-ordinates a full repertoire of market-ing activities to build equity. At itsmost basic level, a brand is made upof all the marketing elements thatcan be trademarked – logos, symbols,slogans, packaging, signage, and soon. Strong brands mix and matchthese elements to perform a numberof brand-related functions, such asenhancing or reinforcing consumerawareness of the brand or its imageand helping to protect the brand bothcompetitively and legally.

Managers of the strongest brandsalso appreciate the specific roles thatdifferent marketing activities canplay in building brand equity. Theycan, for example provide detailedproduct information. They can showconsumers how and why a product is used, by whom, where, and when.They can associate a brand with aperson, place, or thing to enhance orrefine its image.

Some activities, such as traditionaladvertising, lend themselves best to“pull” functions –those meant to cre-ate consumer demand for a givenproduct. Others, like trade promo-tions, work best as “push” pro-grams – those designed to help pushthe product through distributors.When a brand makes good use of allits resources and also takes particu-lar care to ensure that the essence ofthe brand is the same in all activi-ties, it is hard to beat.

Coca-Cola is one of the best exam-ples. The brand makes excellent useof many kinds of marketing activi-ties. These include media advertis-ing (such as the global “AlwaysCoca-Cola” campaign); promotions(the recent effort focused on the re-turn of the popular contour bottle,for example); and sponsorship (itsextensive involvement with theOlympics). They also include directresponse (the Coca-Cola catalog,which sells licensed Coke merchan-dise) and interactive media (thecompany’s Web site, which offers,among other things, games, a tradingpost for collectors of Coke memora-bilia, and a virtual look at the Worldof Coca-Cola museum in Atlanta).Through it all, the company alwaysreinforces its key values of “original-ity,” “classic refreshment,” and so

Boundaries are important. Overlapping twobrands in the same portfolio can be dangerous.



on. The brand is always the hero inCoca-Cola advertising.

8. The brand’s managers under-stand what the brand means to con-sumers. Managers of strong brandsappreciate the totality of theirbrand’s image – that is, all the differ-ent perceptions, beliefs, attitudes,and behaviors customers associatewith their brand, whether created in-tentionally by the company or not.As a result, managers are able tomake decisions regarding the brandwith confidence. If it’s clear whatcustomers like and don’t like about a brand, and what core associationsare linked to the brand, then itshould also be clear whether any giv-en action will dovetail nicely withthe brand or create friction.

The Bic brand illustrates the kindsof problems that can arise whenmanagers don’t fully understandtheir brand’s meaning. By emphasiz-ing the convenience of inexpensive,disposable products, the Frenchcompany Société Bic was able to cre-ate a market for nonrefillable ball-point pens in the late 1950s, dispos-able cigarette lighters in the early1970s, and disposable razors in theearly 1980s. But in 1989, when Bictried the same strategy with per-fumes in the United States and Eu-rope, the effort bombed.

The perfumes – two for women(“Nuit” and “Jour”) and two for men(“Bic for Men” and “Bic Sport forMen”) – were packaged in quarter-ounce glass spray bottles that lookedlike fat cigarette lighters and sold forabout $5 each. They were displayedin plastic packages on racks atcheckout counters throughout Bic’sextensive distribution channels,which included 100,000 or so drug-stores, supermarkets, and othermass merchandisers. At the time ofthe launch, a Bic spokesperson de-scribed the products as logical exten-sions of the Bic heritage: “High qual-ity at affordable prices, convenientto purchase and convenient to use.”The company spent $20 million onan advertising and promotion blitzthat featured images of stylish peo-ple enjoying the perfumes and usedthe tag line “Paris in your pocket.”

What went wrong? Although theirother products did stand for conve-

nience and for good quality at lowprices, Bic’s managers didn’t under-stand that the overall brand imagelacked a certain cachet with cus-tomers – a critical element whenmarketing something as tied to emo-tions as perfume. The marketersknew that customers understood themessage they were sending withtheir earlier products. But they didn’thave a handle on the associationsthat the customers had added to thebrand image – a utilitarian, imper-sonal essence – which didn’t at alllend itself to perfume.

By contrast, Gillette has beencareful not to fall into the Bic trap.While all of its products benefit froma similarly extensive distributionsystem, it is very protective of thename carried by its razors, blades,

and associated toiletries. The com-pany’s electric razors, for example,use the entirely separate Braunname, and its oral care products aremarketed under the Oral B name.

9. The brand is given proper sup-port, and that support is sustainedover the long run. Brand equity mustbe carefully constructed. A firmfoundation for brand equity requiresthat consumers have the properdepth and breadth of awareness andstrong, favorable, and unique associ-ations with the brand in their mem-ory. Too often, managers want totake shortcuts and bypass more ba-sic branding considerations – such as achieving the necessary level ofbrand awareness –in favor of concen-trating on flashier aspects of brandbuilding related to image.

A good example of lack of supportcomes from the oil and gas industryin the 1980s. In the late 1970s, con-sumers had an extremely positiveimage of Shell Oil and, according tomarket research, saw clear differ-ences between that brand and itsmajor competitors. In the early1980s, however, for a variety of rea-sons, Shell cut back considerably onits advertising and marketing. Shellhas yet to regain the ground it lost.The brand no longer enjoys the same

special status in the eyes of con-sumers, who now view it as similarto other oil companies.

Another example is Coors Brew-ing. As Coors devoted increasing at-tention to growing the equity of itsless-established brands like CoorsLight, and introduced new productslike Zima, ad support for the flag-ship beer plummeted from a peak ofabout $43 million in 1985 to just $4million in 1993. What’s more, the fo-cus of the ads for Coors beer shiftedfrom promoting an iconoclastic, in-dependent, western image to reflect-ing more contemporary themes. Per-haps not surprisingly, sales of Coorsbeer dropped by half between 1989and 1993. Finally in 1994, Coors be-gan to address the problem, launch-ing a campaign to prop up sales that

returned to its original focus. Mar-keters at Coors admit that they didnot consistently give the brand theattention it needed. As one com-mented: “We’ve not marketed Coorsas aggressively as we should have inthe past ten to 15 years.”

10.The company monitors sourcesof brand equity. Strong brands gen-erally make good and frequent use ofin-depth brand audits and ongoingbrand-tracking studies. A brand auditis an exercise designed to assess thehealth of a given brand. Typically, itconsists of a detailed internal descrip-tion of exactly how the brand hasbeen marketed (called a “brand in-ventory”) and a thorough externalinvestigation, through focus groupsand other consumer research, of ex-actly what the brand does and couldmean to consumers (called a “brandexploratory”). Brand audits are par-ticularly useful when they are sched-uled on a periodic basis. It’s criticalfor managers holding the reins of abrand portfolio to get a clear pictureof the products and services being of-fered and how they are being mar-keted and branded. It’s also impor-tant to see how that same picturelooks to customers. Tapping cus-tomers’ perceptions and beliefs oftenuncovers the true meaning of a



Tapping customers’ perceptions and beliefsoften uncovers the true meaning of a brand.

cerned that some of its characters(among them Mickey Mouse andDonald Duck) were being used in-appropriately and becoming over-exposed. To determine the severityof the problem, Disney undertook anextensive brand audit. First, as partof the brand inventory, managerscompiled a list of all available Dis-ney products (manufactured by thecompany and licensed) and all third-party promotions (complete withpoint-of-purchase displays and rele-vant merchandising) in stores world-wide. At the same time, as part of abrand exploratory, Disney launchedits first major consumer researchstudy to investigate how consumersfelt about the Disney brand.

The results of the brand inventorywere a revelation to senior man-agers. The Disney characters wereon so many products and marketedin so many ways that it was difficultto understand how or why many ofthe decisions had been made in thefirst place. The consumer study onlyreinforced their concerns. The studyindicated that people lumped all theproduct endorsements together. Disney was Disney to consumers,whether they saw the characters infilms, or heard them in recordings, orassociated them with theme parksor products.

Consequently, all products andservices that used the Disney nameor characters had an impact on Dis-ney’s brand equity. And because ofthe characters’ broad exposure in themarketplace, many consumers hadbegun to feel that Disney was ex-ploiting its name. Disney characterswere used in a promotion of JohnsonWax, for instance, a product thatwould seemingly leverage almostnothing of value from the Disneyname. Consumers were even upsetwhen Disney characters were linkedto well-regarded premium brandslike Tide laundry detergent. In thatcase, consumers felt the charactersadded little value to the product.Worse yet, they were annoyed thatthe characters involved children in apurchasing decision that they other-wise would probably have ignored.

If consumers reacted so negativelyto associating Disney with a strongbrand like Tide, imagine how they

reacted when they saw the hundredsof other Disney-licensed productsand joint promotions. Disney’s char-acters were hawking everything fromdiapers to cars to McDonald’s ham-burgers. Consumers reported thatthey resented all the endorsementsbecause they felt they had a special,personal relationship with the char-acters and with Disney that shouldnot be handled so carelessly.

As a result of the brand inventoryand exploratory, Disney movedquickly to establish a brand equityteam to better manage the brandfranchise and more selectively eval-uate licensing and other third-partypromotional opportunities. One ofthe mandates of this team was to en-sure that a consistent image for Dis-ney – reinforcing its key associationwith fun family entertainment –wasconveyed by all third-party productsand services. Subsequently, Disneydeclined an offer to cobrand a mutualfund designed to help parents savefor their children’s college expenses.Although there was a family associa-tion, managers felt that a connectionwith the financial community sug-gested associations that were incon-sistent with other aspects of thebrand’s image.

The Value of Balance Building a strong brand involvesmaximizing all ten characteristics.And that is, clearly, a worthy goal.But in practice, it is tremendouslydifficult because in many cases whena company focuses on improvingone, others may suffer.

Consider a premium brand facinga new market entrant with compara-ble features at a lower price. Thebrand’s managers might be temptedto rethink their pricing strategy.Lowering prices might successfullyblock the new entrant from gainingmarket share in the short term. Butwhat effect would that have in thelong term? Will stepping outside itsdefinition of “premium” change thebrand in the minds of its target cus-tomers? Will it create the impres-sion that the brand is no longer topof the line or that the innovation isno longer solid? Will the brand’smessage become cloudy? The pricechange may in fact attract customers

brand, or group of brands, revealingwhere corporate and consumerviews conflict and thus showingmanagers exactly where they haveto refine or redirect their brandingefforts or their marketing goals.

Tracking studies can build onbrand audits by employing quanti-tative measures to provide currentinformation about how a brand isperforming for any given dimension.Generally, a tracking study will col-lect information on consumers’ per-ceptions, attitudes, and behaviorson a routine basis over time; a thor-ough study can yield valuable tacti-cal insights into the short-term ef-fectiveness of marketing programsand activities. Whereas brand auditsmeasure where the brand has been,tracking studies measure where thebrand is now and whether marketingprograms are having their intendedeffects.

The strongest brands, however,are also supported by formal brand-equity-management systems. Man-agers of these brands have a writtendocument –a “brand equity charter”–that spells out the company’s gen-eral philosophy with respect tobrands and brand equity as concepts(what a brand is, why brands matter,why brand management is relevantto the company, and so on). It alsosummarizes the activities that makeup brand audits, brand tracking, andother brand research; specifies theoutcomes expected of them; and in-cludes the latest findings gatheredfrom such research. The charterthen lays out guidelines for imple-menting brand strategies and tacticsand documents proper treatment ofthe brand’s trademark – the rules forhow the logo can appear and be usedon packaging, in ads, and so forth.These managers also assemble theresults of their various tracking sur-veys and other relevant measuresinto a brand equity report, which isdistributed to management on amonthly, quarterly, or annual basis.The brand equity report not only de-scribes what is happening within abrand but also why.

Even a market leader can benefitby carefully monitoring its brand, asDisney aptly demonstrates. In thelate 1980s, Disney became con-



from a different market segment totry the brand, producing a short-term blip in sales. But will those cus-tomers be the true target? Will theirpurchases put off the brand’s originalmarket?

The trick is to get a handle on howa brand performs on all ten attributesand then to evaluate any move fromall possible perspectives. How willthis new ad campaign affect cus-tomers’ perception of price? Howwill this new product line affect thebrand hierarchy in our portfolio?Does this tweak in positioning gainenough ground to offset any poten-tial damage caused if customers feelwe’ve been inconsistent?

One would think that monitoringbrand performance wouldn’t neces-sarily be included in the equation.But even effectively monitoringbrand performance can have nega-tive repercussions if you just gothrough the motions or don’t fol-low through decisively on whatyou’ve learned.

Levi-Strauss’s experiences aretelling. In the mid-1990s, the com-pany put together a comprehensivebrand-equity-measurement system.Practically from the time the sys-tem was installed, it indicated thatthe brand image was beginning toslip, both in terms of the appeal ofLevi’s tight-fitting flagship 501 brandof jeans and how contemporary andcutting edge the overall Levi’s brandwas. The youth market was going for a much baggier look; competitorswere rushing in to fill the gap. Dis-tracted in part by an internal reengi-neering effort, however, Levi’s wasslow to respond and when it did, itcame up with underfunded, trans-

parently trendy ad campaigns thatfailed to resonate with its young tar-get market. Its market share in thejeans category plummeted in the lat-ter half of the 1990s. The result?Levi’s has terminated its decades-long relationship with ad agencyFoote, Cone & Belding and is now at-tempting to launch new productsand new ad campaigns. For Levi’s,putting in the system was notenough; perhaps if it had adheredmore closely to other branding prin-ciples, concentrating on innovatingand staying relevant to its custom-ers, it could have better leveraged itsmarket research data.

Negative examples and caution-ary words abound, of course. But it isimportant to recognize that in strongbrands the top ten traits have a posi-tive, synergistic effect on one an-other; excelling at one characteristicmakes it easier to excel at another. A deep understanding of a brand’smeaning and a well-defined brandposition, for example, guide devel-opment of an optimal marketingprogram. That, in turn, might lead to a more appropriate value-pricingstrategy. Similarly, instituting an ef-fective brand-equity-measurementsystem can help clarify a brand’smeaning, capture consumers’ reac-tions to pricing changes and otherstrategic shifts, and monitor thebrand’s ability to stay relevant toconsumers through innovation.

Brand Equity as a BridgeUltimately, the power of a brand liesin the minds of consumers or cus-tomers, in what they have experi-enced and learned about the brandover time. Consumer knowledge is

really at the heart of brand equity.This realization has important man-agerial implications.

In an abstract sense, brand equityprovides marketers with a strategicbridge from their past to their future.That is, all the dollars spent eachyear on marketing can be thought ofnot so much as expenses but as in-vestments – investments in whatconsumers know, feel, recall, be-lieve, and think about the brand.And that knowledge dictates appro-priate and inappropriate future di-rections for the brand – for it is con-sumers who will decide, based ontheir beliefs and attitudes about agiven brand, where they think thatbrand should go and grant permis-sion (or not) to any marketing tacticor program. If not properly designedand implemented, those expendi-tures may not be good investments –the right knowledge structures maynot have been created in consumers’minds – but they are investmentsnonetheless.

Ultimately, the value to market-ers of brand equity as a concept de-pends on how they use it. Brand eq-uity can help marketers focus,giving them a way to interpret theirpast marketing performance and de-sign their future marketing pro-grams. Everything the companydoes can help enhance or detractfrom brand equity. Marketers whobuild strong brands have embracedthe concept and use it to its fullest toclarify, implement, and communi-cate their marketing strategy.

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Documents

(2000). The Brand report card. In