Marketing Factoids

  • Fewer than 10% of the London Financial Times Stock Exchange Index companies have marketing directors on their boards source ›
  • Of those people that recently made consumer electronics purchases in a store, 80 percent visited the store's website first. - Nielsen Online survey source ›
  • V users watch more TV than before (127 hrs, 15 min per month) and also spend 9 percent more time using the internet (26 hrs, 26 min per month) than they did last year source ›
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JUL 2006

Guarding the Brand

Report from Economist Intelligence Unit

Economist, July 1, 2006 — Brand matters. In a global economy, with fiercely competitive firms rapidly commoditizing

products, strong brands help companies to stand out from the crowd and differentiate themselves on a basis other than cost.

Related Factoids

An average of just one-third of executives believe their company’s brand is maintained entirely consistently across six different sets of customer touch-points, such sales collateral, websites and physical retail outlets. Interestingly, more than one in ten US executives believe their company’s brand is completely inconsistent across global, regional and country-specific websites, compared to about 8% in Asia and only 2% in Europe. Whereas the US appears to have a greater appreciation of the brand, European companies seem to be doing more to cater for different languages and cultures.
Brand issues are being led from the top, but middle management support is often lacking. Considering its importance to the firm, there is little surprise that nine out of ten of those surveyed say their chief executive takes active consideration of brand issues across the company. However, there are warning signs that the same enthusiasm may not extend to all levels of the business: approximately 30% of those surveyed in the US and Asia agreed that senior executives in their organization simply pay lip service to brand considerations, while nearly half (46%) in Europe believe the same.
Executives say cultural differences (63%), along with language and translation issues (44%) are the two primary barriers to maintaining their brand effectively in international markets. However, efforts to localize brands, through translation and cultural adaptation, do pay off: two-thirds of survey respondents agreed that such efforts had a positive impact on sales in those regions.
Firms are planning to spend more on brand management, typically shifting up from between 1% and 5% of revenues to between 6% and 10% over the next two years. Interestingly, many large firms expect to decrease their spending slightly. The proportion of big companies spending more than 10% of their revenue on brand management is expected to decline from 29% to 24%. Meanwhile smaller companies expect to be more aggressive: 37% expect to spend more than 10% of revenue on their brand, up from 28% currently.
Firms are putting their resources behind a few star brands. Maintaining a large stable of brands is no longer financially feasible for most companies, with the majority choosing to focus their marketing spending on a few star brands. Companies show a clear preference for their corporate brands ahead of individual product brands. Eighty-one percent of companies surveyed rate their corporate brand as critical, while just 64% think the same about their product brand.
Forty-five percent of firms polled for this report agree that it is difficult to deliver a consistent customer experience across both online and offline channels, while 33% describe themselves as ineffective when it comes to online marketing.
More than 40% of firms surveyed believe that outsourcing business processes, such as customer call centers, represents a risk to their brand.
Successful brands create a consistently positive customer experience that encourages repeat business. In particular, it is important not to forget the role that employees play in delivering a strong brand experience. This may be one reason why 65% of executives believe that face-to-face customer contact represents the biggest challenge for maintaining a consistent customer experience, far ahead of any other channel.
Three lessons for firms aiming to optimize and standardize their brand experience in a global, multi-channel market: 1. Globalization and technology are driving market maturation in many sectors. Building, maintaining and leveraging the brand is the basis of most competitive advantage, especially in a global market. 2. The dominance of services, multiple channels to market, globalization and acquisition policies are all serving to make managing the brand experience more difficult. 3. Response to these challenges appears not to be the reinforcement of traditional command and control systems. Instead, managing brands in a global multi-channel market requires a more subtle, value-focused and technology enabled approach to the brand experience.
What have you done to define and articulate your company’s brand over the past two years? 67% Revised/updated our corporate brand 56% Trained employees on what our brand represents 54% Documented what our brand stands for 48% Measured the perception of our brand in the market 21% Employed a brand consultancy
What is your typical approach to managing brands? 60% Centrally managed, with consistent global implementation 20% We have global brands, but they can be slightly adjusted to local needs 9% We have global brands which are heavily tailored at a country level 9% We develop distinct local branding for each market
Which of the following channels represent a considerable challenge for maintaining a consistent customer experience across your entire business? (% respondents) 65% Face-to-face customer contact (eg, retail staff or field sales teams) 39% External marketing (eg, brochures, direct mail) 31% Customer-facing physical presences (eg, offices, retail outlets) 27% Online channels (eg, corporate and product websites) 27% Administrative contact (eg, invoicing, emails) 24% Telephone channels (eg, call centre scripts) 19% Product lines (eg, packaging, documentation) 18% Physical logistics and delivery

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