Branding Strategies Assessing the Influence

Branding Strategies

Assessing the Influence of branding on consumer purchase behavior is begins with an analysis of how the accumulated effects of marketing strategies contribute to the permanency of branding and their accumulative effects on consumers. The impact of Web 2.0 technologies (Bernoff, Li, et.al.) is re-ordering the dynamics of branding on a global scale based on social networking. Broader still is the cultural assimilation of branding on a global scale. Learning and cultural assimilation is actually becoming more pervasive as a result of more effective branding strategies that are being implemented. This cultural assimilation and focus isn't at the expense of cultural richness and identity at a local level however. Research completed in this dissertation shows that branding and messaging is interpreted and synthesized into local cultures more quickly than before due to the pervasive availability of the Internet, greater focus on global brands by consumers, more effective use of non-traditional approaches to public relations, branding, and communications; and a greater level of fluidity of promotional, selling, and services strategies through nations' cultures.

Using a multi-phased research methodology to capture the most critical success factors to enterprises who are actively using branding strategies globally to attract, sell and service prospects and customers, this research discovered that globally there is a definite trend towards being a trusted advisor to prospects and customers alike as connoted by the execution of branding strategies both through traditional marketing channels and those emerging from social networking's rapid adoption globally. One of the key objectives of this research is to evaluate how effective traditional strategies and techniques for branding compare in effectiveness relative to the emerging social networking approaches that are now becoming pervasive globally.

Branding as a communications and teaching mechanism and as an overt and focused strategy by the most successful enterprises is anticipated to emerge from the research, and underscoring this role of brands as an educational approach is the deliberate strategy of invoking, sustaining and retaining the trust of prospects and customers. As a result of this dynamic of brands evoking trust, this dissertation also concentrates on how brands can nurture and foster the creation of trusted advisors. It is a position that a brand cannot "purchase" however, it must be earned through a continual and consistent strategy of execution. The defining of this specific aspect of branding is one of the cornerstones of the research to be completed.

As a result of this focus it is anticipated that one of the primary critical success factors that will come out this research is that the most effective brands are continually in the pursuit of trust, and especially for services companies, the need for attaining the status of trusted advisor in the prospect and customer base is critical. The criticality of the role of trusted advisor pervades the survey results, with the majority reporting that attaining this role as critical for their long-term growth globally. It is anticipated that when the data is analyzed by the relative growth rates of enterprises it will become apparent that those companies, both privately held and publicly traded, are orders of magnitude more profitable and stronger financially long-term as a result of choosing to pursue and excel at attaining the role of trusted advisor via their branding and marketing execution. This dynamic of becoming the trusted advisor in a given global marketplace has a strong correlating effect with long-term profitability and growth, and is an area of future research that needs to be addressed within this dissertation.

The critical nature of branding however as a series of initiatives, programs, and strategies is clear when the most predominant approach to attaining and keeping the role of trusted advisor with prospects and customers alike is captured in the proposed research

The second anticipated critical success factor is the challenge of continually defining value both from a product and services perspective across multiple geographies through the use of coordinated branding strategies. It is anticipated that respondent scores will reflect a global focus of retaining credibility through stressing value-based selling over features, functions, benefits and other product-centric messaging. This second critical success factor centers on positioning and messaging with high credibility to support the trusted advisor role. This second critical success criteria reflects the impact of market-driven organizations on product strategies and accuracy of branding. It is anticipated that the market-driven organizations in the sample will report a significant statistical link between marketing, branding, analyst relations, and investor relations. Imagining an overlapping Venn diagram of these items a best practices model emerges for messaging synchronization across a global enterprise

It is anticipated that a third major finding from the research will be the reliance on measuring the value generated from branding activities over time. The Return on Investment (ROI) of branding is a major focus within the companies achieving the highest revenue and profit growth globally. Hand in hand with this focus on the ROI of branding specifically and marketing overall is an increased reliance on key performance indicators, or KPIs. The combined effects of tracking ROI and supplanting this effort with a reliance on analytics is re-aligning the relationship between public relations, marketing, sales, support, and advertising functions in the companies achieving the highest ROI on their branding investments. The implications for marketing departments and the trajectory of growth they are already experiencing speak to greater structural changes in the companies interviewed as part of this research program. As part of the literature review for this project, the re-alignment of branding as part of the marketing function is also analyzed and reviewed. The concepts of brand equity measurement and value are also discussed.

Respondents to the surveys ranking the measurability and accountability of branding in their companies as growing the need for better analytics is changing the nature of how branding strategies are initiated, maintained, and modified over time. This shift in branding practices away from the more static approaches of communicating to the more fluid and interactive forms of communicating with audiences, prospects, and customers is also critical in the overall direction of the strategic mix of branding strategies in firms globally.

Blogs, Wikis, and the rise of user-generated content have a much greater potential for affecting a company today than does the publishing of a simple press release or the defining of more statistically. This point ties into becoming a trusted advisor, as secondary research suggests that press releases are not as trusted as blog entries made by actual consumers relative to a product or service. The dynamics of social networking need then to be taken into account from the standpoint of branding with greater focus on analysis than ever before.

This makes the point of being a trusted advisor all the more critical, and a strategy of being a trusted advisor throughout all served segments is the cornerstone of an effective branding strategies. Blogs, Wikis, and other forms of user-generated content's uncontrollable aspects make them especially challenging for branding teams to manage for companies globally today. Traditional forms of communicating through branding activities are not nearly as trusted as user-generated forms of content, and the globalization of branding activities is large part due to this fact.

Emergence of the Branding Maturity Model

Based on an analysis of literature reviews and research completed, the cumulative responses a Branding Maturity Model begins to take shape, and is shown in Figure 1.

This model defines the relative level of synchronization or integration of branding to the many other organizations and functions within the enterprises scaling their operations on a global level. What became apparent from the analysis of results was the fact that enterprises when they choose to pursue a globally-based strategy have to content with both Process Maturity and Information Maturity.

Figure 1: Branding Maturity Model

At the highest levels of maturity, what would be considered "best practices" in the context of this research model is the level of orchestrating functions across a federation of departments, divisions and even like-minded corporations who form joint ventures and alliances.

As would be expected, only a small percentage of respondents fit into the Orchestrating layer of the Maturity Model. This is primarily due to the fact that many of the joint ventures and alliances where branding has become an integral part of the total operating strategy are not as pervasive as the lower layers of the model and companies sharing those attributes.

Companies occupying the second highest layer, Collaborating, are using portals and other Internet-based tools to maximize information sharing and co-development of strategies and the co-sharing of communications tools and ultimately platforms. Collaborative Branding strategies, as they are defined from the research completed, are marked by their shared use of Voice of the Customer (VoC) programs and shared ownership of branding strategy results.

Anticipating, the second highest level in the maturity model, is where the majority of companies are today, which is to say "every branding team for themselves." The focus on making a strong correlation between making information flow optimized vs. striking a collaborative focus with other global branding partners. This level of the maturity model is a transitory one and is focused more on either small, incremental gains from the first level, which is Reacting. In the Reacting layer of this proposed Branding Maturity Model, the majority of brand departments have a decidedly "every department for itself" approach to process maturity and have information flow that is purely dependent on personal productivity applications only. That is to say specifically that at this low level of performance in the model, branding departments focuses first on tactical wins at the expense of global victories. This mindset in turn creates an isolated approach to branding throughout entire global industries. One of the key attributes of this level of the Branding Maturity Model is the neglecting of the many user-generated from of content including blogs, Wikis and other forms of interactive customer feedback. The short-sighted nature of being a company in the Reacting layer of this model forces branding teams more into firefighting and letting the bloggers who complain the loudest direct their firms with the greatest impact. The focus on results then is in minimizing pain and public embarrassment vs. creating lasting value through the pursuit of being a trusted advisor, defining products as value- and solution sets, and proving the value of branding through ROI work and extensive use of analytics.

In summary, the three critical success factors of becoming a trusted advisor, focusing on value-based differentiation and less on features and functions, and the strong trend towards the quantification of branding's value to organizations including its ROI signal a shift in the priorities of many SMEs in their approach to globally communicating their position and value. Underscoring all this in the research is the acceptance that blogs, Wikis, and user-generated content is here to stay and is aiding in the globalization of branding activities by enterprises. Finally, the correlation of a company's ability to attain trusted advisor status with its customers and retain that status through continual reinforcing has an effect on long-term profitability and sales. This last point is the subject of future research and shows the extent of contribution branding can make to firms who are scaling globally.

Chapter 2: Literature Review

Executive Summary

There is a reciprocal relationship emerging between brandings' critical success factors globally and the increasing reliance on user-generated media including blogs, Wikis, and in the past, bulletin board systems. The growth of Web 2.0 technologies defined by O'Reilly (2005) is re-ordering the dynamics of branding globally. Table 1 in the Appendix of this report provides an overview of the collection of technologies that comprise Web 2.0. Figure 1 is the map O'Reilly and Battelle created showing how both market and user dynamics are defining social networking (O'Reilly, 2005. et.al.)

Figure 1: Web 2.0 Explained

Inherent in the user dynamics of the map completed by O'Reilly and Battelle are the theoretical foundations of branding being more socially oriented and interactive, and more communicative and collaborative in nature. There is a rapidly evolving level of transparency, trust and interactivity with consumers than has been the case in the past. These collections of technologies have made the managing of credibility critical in any branding strategy, and the role of social networking in branding critical. It is in fact infeasible to discuss branding today without taking into account the fundamentals of social networking according to branding industry experts including Mairinger (2008) and Blakely (2007).

Branding's Revolution: Collaborating & Participating with consumers

Branding's long-term value or brand equity (Market Research Executive Board, 2005) is based on consistency of messaging and the development of emotions that are evoked from messaging. From the initial development of a branding strategy to initial feedback through branding research, the lag time prior to consumer-generated media including social networking applications was months. Today with Web 2.0-based technologies and social networking, it's possible to get feedback on branding messaging effectiveness within days of the initial launch of the campaign. Given how transparent social networking is making branding, it's imperative that consistency and credibility be continually achieved and strived for.

Creating branding strategies had been focused on unidirectional communication and the development of branding strategies that have tended to be push-oriented in their messaging (Thomas, 2005). The transition to Web 2.0-based approaches to branding brings immediacy that must be based on transparency. This requires a departure in thinking away from the more traditional and slower-to-react approaches of evaluating and fine-tuning branding. For brand marketers the transparency inherent in Web 2.0 needs to be harnessed through the development of collaborative communities (Jones, 2008, p. 10, 11). These collaborative communities online can also become the foundation of creating levels of trust with consumers not possible through traditional branding strategies.

Creating and Sustaining Trustworthy Brands with Web 2.0 brand is by definition the identity of a company, regardless if the company is producing products or selling services. Advertising and marketing strategies on the part of companies have as their catalyst the association of emotional and imagery-based attributes to a brand. A case in point are the many efforts of financial services firms including Fidelity Investments to link their brand with being a trusted advisor to others looking for guidance in managing their investments (Gill, 2008). The breakdown in trust within many financial services industries was precipitated by Enron, Tyco and many other scandals that also impacted the value of investor's portfolios. The current mortgage meltdown is leading to a high level of distrust of any brand associated with mortgage banking or financials services involved with home financing.

Yet for a brand to be successful, it needs to generate a high level of trust, turning customers into advocates (Blasberg, J & Vishwanath, V., Allen, J., 2008). Take Apple Computer for example and the role of their technical evangelists in getting software written for the entire series of Apple Macintosh systems, and the passion these customers have for the product (Kawasaki, 1990).

Successful brands evoke positive emotions; it is up to those managing the brand to associate the brand with which emotions they choose to continually align themselves with. The use of the Internet as a means of branding products and services has led to a greater concentration on trust as a differentiator between companies than ever before (Elliott, R & Yannopoulou, N., 2007). Trust is the foundation for the development and sustaining of all exceptional brands. In the services arena is aspect of trust is a critical aspect of any branding strategy. Trust is as much about branding a service as any given products' benefits are to its unique positioning. Trust is one of the most potent differentiators between brands, especially in Business-to-Consumer (B2C) markets (Lee, Ang, Dubelaar, 2005).

Through the use of Web 2.0-based technologies, it's becoming more important than ever for companies to aspire to be trusted advisors in their chosen markets. Becoming a trusted advisor in a market is a more powerful differentiator than any demographic or psychographic segmentation variable, and certainly more powerful and longer-lasting than price alone as a product differentiator (Urban, 2005).

Internal Collaboration Critical for Branding Consistency

When the concepts of Web 2.0 technologies for creating branding are combined with Porter's Determinants of Competitive Advantage (1985), a new paradigm begins to emerge for creating competitive advantage. This paradigm centers on creating long-term differentiation on trust that leads to segmenting markets based on earning and retaining trust. Porter (1985) sees competitive advantage growing "fundamentally out of the value a firm is able to create for its buyers" (p. 3). Taking this concept from Porter (1985) and applying it to the collaborative nature of Web 2.0 technologies, branding strategies within leading companies are becoming much more collaborative in scope. Figure 2 provides an example of how Web 2.0 technologies can be used to create a higher level of collaboration in the branding process internally. Each of the functional areas of the company is represented in brand consistency and message execution.

Figure 2: Collaboration Internally Is Critical for Branding Consistency

Source: Based an analysis of Bernoff & Lee (2008); Thomas (2005)

What's most important about this internal coordination in brand execution is the ability to define a synchronized, well-orchestrated pre-launch, launch and post-launch plan. Figure 3, Internal Launch Planning Timeline provides an example of how AMD, SAP and Siemens are managing this process.

Figure 3: Internal Launch Planning Timeline Examples

Source: based on analysis of the research presented in (Kotlarsky, Fenema, Willcocks, 2008)

Once internal coordination of a branding campaign has been accomplished external launch of messaging is completed. The defining and strengthening of segmentation strategies using branding is the next step in many organizations' branding strategic plans.

Using Branding to Reinforce Segmentation Strategies

Over the last two decades, the emphasis in the strategic management literature has shifted from a view of competitive advantage as primarily determined by branding factors to a resource-based view that highlights ways in which the deployment of unique and idiosyncratic organizational resources and capabilities can result in sustained superior performance (Lado et al., 1992). Underlying this shift is a recognition that sustained competitive advantage grows out being able to set expectations with customers and consistently exceed them. Taking this point a step further, segmentation has little to do with demographics and much more to do with segmenting on the expectations of customers. A customer at Wal-Mart will not expect a salesperson to help them pick out a color that matches their favorite shoes, yet at Sak's Fifth Avenue this happens all the time. The point being made is that segmenting on expectations relies entirely on the strength of a brand to invoke and sustain trust. There is the trust that the brand can fulfill the expectations it creates, and the trust that the brand's future expectations are accomplishable.

There's nothing more powerful in terms of branding's contribution to segmentation in being able to set high customer expectations and fulfill them over time.

This is a departure from existing branding theory being focused on enhancing a more resourced-based vs. expectation-based approach to brand execution.

The resource-based view is basically an enactment-based view of strategy formulation and implementation (Lado & Wilson, 1994) in which firms are seen as proactively managing and shaping their environments instead of simply responding to uncontrollable factors. By shifting the focus from adapting to leveraging and developing resources to committing to expectation levels with customers and then fulfilling those takes more effort yet has a much longer-term competitive advantage (Blasberg, J & Vishwanath, V., Allen, J., 2008).

Porter's (1985) approach to strategy built on the structure-conduct-performance tradition, the resource-based view saw industry structure as reflecting efficiency outcomes rather than the power of setting and achieving expectations that further support branding strategies. A resource-based view of branding execution shifted attention away from barriers to competition and factor-market impediments and toward resource flows. This approach to branding has consistently led to a marginalized approach to getting long-term results. What's necessary is a revised focus on defining high yet achievable expectations for the branding strategy and then consistently measuring performance relative to plan. The use of branding within segmentation requires more of a focus on how expectations can also be the catalyst of change within a company culture. The traditional approach to branding, being constrained by resources in terms of expectations set with customers and fulfilled needs to be re-considered for more of a values-based branding model that directly drives segmentation. Considering the branding of regional clothing store Nordstrom's provides insights into how branding can be used as an effective segmentation strategy.

Nordstrom's Moments of Truth and Branding Consistency

Nordstrom's has successfully interlinked their branding strategy with segmentation by creating a culture that intensely focuses on every customer interaction as a moment of truth for their brand. Founded in 1901 in Seattle, Washington, Nordstrom's has continually grown from a base of local strength to international prominence in high-end retailing. Today the company operates a chain of stores both across the U.S. And internationally, selling men's, women's and children's clothing, accessories, shoes, luggage, sundries and home decorating products. Nordstrom has also pioneered the development of online retailing and customization of apparel and shoes for men, women and children.

At the center of Nordstrom's success is their ability to create a culture that focuses on enhancing the lifetime value of the customer by delivering exceptional service and an attitude to do whatever it takes to turn a shopper into a loyal customer for life. This culture has become their brand, and reciprocally, their branding efforts continually support the internal culture and communicate it to consumers.

To a large extent this capability has been created through the efficient use internal and external branding strategies that over time have stayed consistently focused on setting the expectation of Nordstrom being a trusted advisor in mid- to high-end retailing. In many of these communications, sales representatives are portrayed as trusted advisors. Spector, R., & McCarthy, P.D. (1995) note that the Nordstrom culture is so open-ended that associates, from the most senior department managers, to the most junior sales clerks, learn quickly in the culture that the value of creating a life-long customer is much greater than saving a few dollars on a sale. The culture promotes independence and initiative in the service of customers, Achrol, R.S. (1991).

Chatman and Cha (2002), in their research to complete a chapter of the book Next Generation Business Series: Leadership (2003) report that peer pressure within Nordstrom's is great, and the brand infuses associates with a sense of "whatever it takes" attitude to accomplish whatever task a client asks to be done. The example is given of one of the authors coming in and asking for a new shoe, only to find the store is sold out, and all surrounding Nordstrom's stores are as well. Just when one associate is about to give up, another interrupts and calls a local Macy's store, and finds the shows there. The other associate offers to buy the shoes and have them shipped to the customers' home. The author buys the shoes, and hears the one associate chastise the other "you let us down on that one!."

The culture is so strong; members sanction one another for higher performance. This one scenario shows how tightly intertwined culture and brand are within this company. Expectations being exceeded are the brand at Nordstrom's.

Another aspect of Nordstrom's ability to create and fulfill expectations of superior customer service is the fact that the company communicates often about key successes with customers and makes accomplishment with customers' part of the core values of the company. The Nordstrom culture is very unique in this regard (Chung, B.G., 2001) because it has embraced the concept of differentiating itself on service first and foremost, and relying on the quality of high-branded products to define their own value. The assessment made by Chung shows that inherent in the brand strategy of Nordstrom is uniqueness on exemplary service, and that social norms and pressures force excellent service as an approach to assisting customers.

Further research by Antonacopoulou and Kandampully (2000) illustrate that the more norms and values in a company culture promote high performance, the greater the tendency to attract these types of employees and contributors over others, further supporting the core brand positioning. Further, the works of these two researchers also show that empowerment, or the freedom of an associate to define their own problem-solving approaches with faced with a customer need is critical for the viability of a service business. This is consistent with taking a more valued-based approach to branding vs. A resource-centered one, a point made earlier in this paper.

Also according to Zemke and Schaf (1989) there are two dimensions to empowerment - one organizational, one personal. Nordstrom's brand strategy succeeds because it capitalizes on these differences between organization and personal empowerment, and creates an internal culture gives the employee freedom in defining the best solution for the customer's best interests.

Clearly the challenge for Nordstrom is to develop multiple sales channels including their websites and online initiatives while at the same time delivering exceptional service in every customer interaction to further reinforce their brand. Much research has been done in this area by market research and advisory firms, as in the academic community. Curtis (1985) and Judd (1987) and others are defining the best practices for interactive and relationship marketing relating the brand consistency. The focus of these research and others is on expanding the scope of the personal experience with the customer, creating in effect a trusted advisor role of Nordstrom over and above their competitors. The trusted advisor role and the expectations it carries with it are critical for the ongoing success of the Nordstrom brand.

The collaborative processes that Web 2.0 has made possible in other companies are illustrated with how interwoven branding and customer experience are in the Nordstrom culture. Instead of having to filter customer comments or put a customer through the effort of filing out forms for a rain check for a specific pair of shoes, a sales associate goes to a competitor and gets them. This is an extreme example yet shows how branding must be executed within companies to be a long-term differentiator. Nordstrom has been able to use the underlying collaborative processes that Web 2.0 is making globally available to successfully interlink their culture, branding, and sales execution and training programs into a unified strategy. Ultimately branding's ability to be a catalyst for interweaving all these elements of a strategy together is one of the most important elements of a company's identity long-term.

Summary

The intent of this paper has been to provide insights into how branding strategies and techniques are changing to become more agile in responding to changing internal and external organizational constraints. Examples of how branding is becoming increasingly used as an approach to values-based segmentation is illustrated in the Nordstrom's case study. This study illustrates how creating a brand based on being a trusted advisor requires well-integrated marketing, sales, service and training programs, as every interaction with every customer is seen in the Nordstrom culture as a proof point of their branding strategy. The Nordstrom example is also useful as it illustrates how critical transparency and honesty are in creating a superior brand.

The world is more transparent than ever before due to Web 2.0 technologies. Branding is becoming more all about setting expectations and exceeding them rather than trying to appear to be something they are not. The underlying need to collaborative internally prior to a brand launch, and after launch, to collaborate with customers is critical for a brand to succeed.

Chapter 3

Exploring the Interrelationship of Trusted Advisors and Branding

Porter (1985) saw competitive advantage as growing "fundamentally out of the value a firm is able to create for its buyers" (p. 3). In essence, firms create competitive advantage by creating some product or service that their customers cannot easily create for themselves for which those customers are willing to pay. Firms that fail to create competitive advantage eventually fail because they are unable to generate the value their customers demand. Developing competitive advantage becomes critical at the market entry stage and remains important throughout the life of the business as firms adapt to changing environments. Porter (et.al.) argued that a fundamental aspect of competitive adaptation is the specialization of suppliers to meet variations in buyer demand. Porter was also the first to recognize that firms should strive to create unique characteristics that distinguish them from competitors in the eyes of the consumer. Later, Hamel and Prahalad (1989) and Dickson (1992) discussed the need for firms to learn how to create new advantages that will keep them ahead of the competition De Chernatony, L., & McDonald, M. (1998).

Differentiating and Segmenting on Trust

The superior performers generally possess something special and hard to imitate that allows them to outperform their rivals, and is typically called their competitive advantage De Geus, a. (1997). This competitive strength or distinction can arise from many sources. For many high tech companies, it is their patents, intellectual property and engineering prowess, Dickson, P.R. (1992). For financial services firms, it is the ability to attract and retain key fund managers who are adept at navigating investments on behalf of clients. For manufacturers, the ability to produce products at a substantially lower cost with higher quality delivers greater value. As disparate and different as these business models are, their unifying uniqueness is the fact that in defining their own values, they have connected with the values of their customers. Trust is a primary differentiator for any successful company, and the nurturing of this trust is crucial for the long-term viability and effectiveness of any brand (Gummesson, 1999).

These unique sets (resources) are considered sources of competitive advantage (Stalk et al., 1992). The basis for the long-term success of a firm is its ability to achieve and maintain a sustainable competitive advantage. Thus, understanding which resources and firm behaviors lead to such an advantage is fundamental to marketing strategy (Varadarajan & Jayachandran, 1999). A competitive advantage can result either from the implementation of a value-creating strategy not employed by current or prospective competitors or from superior execution of the same strategy as competitors (Bharandwaj et al., 1993). Competitive advantage is sustained when other firms are unable to easily duplicate the benefits of this strategy (Barney, 1991). Sustainability is achieved when the advantage resists erosion by competitor behavior or environmental shifts (Porter, 1985). Winter (2004) stated that there are three characteristics of competitive advantage. First, it must be able to generate customer value. Customers may define customer value in terms of speedy delivery, lower prices, convenience, or other characteristics. Second, the customer must be able to perceive the increased value of the product or service. Whether or not the product is superior is not as important as whether the customer perceives it to be so. Third, for competitive advantage to be effective, it should be difficult for competitors to copy. Taken together these factors need to be tightly integrated into a brand's execution and ongoing value, and long-term, its equity attained.

The dynamics of pricing strategy have a direct influence on the perceived value of a company's products and therefore its brand as well. This is one of the foremost factors that influence consumer behavior in conjunction with branding. The price/quality relationship as defined by (Sethuraman and Cole 1997) show that a low-price strategy does influence the perception of trust by consumers over time, and is a strategy that must be continually reinforced and adhered to for a brand to be seen as credible according to Winer, R.S. (2004). A case in point is Wal-Mart and their pricing policies that focus on being the low price leader, successfully attracting consumers with their shared values around thriftiness. Where the challenges come into play with using pricing as a key determinant of value is in changing direction and price to compensate for slower sales. When price moves from being a positioning point to a tactical and strategic variable, many companies find that their value proposition itself becomes more mired in confusion.

Porter (1980) defined three generic competitive strategies: cost leadership, differentiation, and focus. Each involves a different route to competitive advantage, and successful firms make a clear choice among these strategic options. The management of such firms recognizes that trying to be all things to all people generally lead to poor performance. This goes beyond the logistical and resource challenges to the fact that no one trusts a company to be all things to them; there are core competencies a firm has and combined with the earned right to be a trusted advisor, creating highly unique value for customers over the long-term.

Firms pursuing cost leadership strive to be the low-cost producer in their industry and to sell their products or services either at average prices (to earn higher margins than competitors) or at below-average prices (to grow market share). A low-cost producer must find and exploit all sources of cost advantage, such as economies of scale, asset utilization, and proprietary technology, preferential access to raw materials, optimal outsourcing, and vertical integration. In order to adopt a differentiation strategy, a firm must have a product or service offering with unique attributes that are valued by customers and are perceived to be more desirable than those offered by competitors. Finally, Porter (1980) argued, focus means concentrating on a narrow segment and attempting to achieve a cost or a differentiation advantage in that segment. All of these factors contribute to the successful execution of global branding strategies as once defined and implemented, all these factors need to be synchronized to attain the maximum level of effectiveness possible.

Branding Contributes to Values-Based Segmentation Strategies

Research continues to show that what had been once seen as primary differentiators of performance between competitors were only limited in the extent of their influence. The role of values, cultural norms, social system definition and development, and social networking, in addition to the quantification of trust have all played key roles in re-defining how value-based segmentation is monitored, measured, and modified. The fact that external factors including government intervention, costs of compliance, and responses to the many tactics of competitors all point to a common longer-lasting differentiator, and that is trust. The focus on building an equity account of trust with customers and preserving, growing and paying dividends on that trust is crucial for the long-term viability of any company.

Day and Wensley (1988) initially focused on two sources of sustainable competitive advantage: superior skills and superior resources. Barney (1991) stated that not all firm resources have the potential to create sustainable competitive advantage. Rather, he argued, such resources must possess four attributes: rareness, value, inability to be imitated at a competitive cost, and inability to be substituted. Similarly, Hunt and Morgan (1995) proposed that resources can be most usefully categorized as financial, physical, legal, human, organizational, informational, and relational. Prahalad and Hamel (1990) suggested that firms combine their resources and skills into core competencies, loosely defined as those things that a firm does distinctively well in relation to competitors. By combining resources, firms can focus on collectively learning how to coordinate branding efforts to facilitate the growth and nurturing of specific core competencies.

Over the last two decades, the emphasis in the strategic management literature has shifted from a view of competitive advantage as primarily determined by environmental (industry/market) factors to a resource-based view that highlights ways in which the deployment of unique and idiosyncratic organizational resources and capabilities can result in sustained superior performance including branding (Lado et al., 1992). Underlying this shift is a recognition that sustained competitive advantage grows out of valuable, revenue-generating, and firm-specific resources and capabilities that cannot be easily imitated or substituted. The resource-based view is basically an enactment-based view of strategy formulation and implementation (Lado & Wilson, 1994) in which firms are seen as proactively managing and shaping their brands and environments instead of simply responding to exogenous forces. By shifting the focus from adapting to leveraging and developing brands for sustainable advantage, managers can re-conceptualize their businesses.

Whereas Porter's approach to strategy built on the structure-conduct performance tradition, the resource-based view saw industry structure as reflecting efficiency outcomes rather than market power. In this tradition, differences in performance signal differences in resource endowments (Barney, 1991). The resource-based view shifted attention away from barriers to competition and factor-market impediments and toward resource flows. Identifying abnormal returns as rents to unique resource combinations, rather than market power alone, this perspective, first named and defined by Wernerfelt (1984), emphasized the importance of specialized, difficult to imitate resources including brands.

Organizational and Customer Value Alignment and Brand Relationships

There is considerable evidence that an organization must remain faithful to its core values and branding if it is to enjoy lasting success (Collins & Porras, 1996; de Geus, 1997). According to Collins and Porras (1996), organizational values as defined and clarified by consumers through brands are essential and enduring tenets that are intrinsic to the firm's mission and unaffected by the external environment. The multiplicity of relationships that a firm has can create tensions between the firm's intrinsic values and disparate values and demands from external constituencies. Managing these tensions requires that firms either compromise their own brands and its values in an attempt to satisfy all external constituents or focus on developing and maintaining successful relationships with those external constituents that possess congruent values. Indeed, recent conceptual and empirical research has suggested that shared brand values may play a significant role in the development maintenance of relationships with external constituents (e.g., Dwyer et al., 1987; Wilson, 1995). Voss et al. (2000) argued that organizational values affect (a) relational attitudes towards external constituents, which translate into (b) behaviors that serve to build and maintain relationships with external constituents, and which ultimately result in - relational outcomes manifested as financial support from external constituents.

Brand ROI Analysis Literature Review

Branding initiatives consistently rank among the "softest" elements in the communications mix. As such, analysts view the corresponding challenge in measuring branding's impact and effectiveness as a key driver behind the comparatively low levels of corporate marketing spend dedicated to the function. During a down economy, branding professionals face additional pressure to justify their budget and staffing due to senior management insistence on ROI accountability for marketing investments. However, Marketing and Branding departments' reduced budgets often hinder their ability to allocate resources toward demonstrating branding's contributions to executives.

June 2001 Patrick Marketing Group survey of corporate leaders gauged opinions regarding the primary impediments to creating a consistent corporate identity through coordinated branding and advertising.

Yet even given these measurement concerns, branding experts disagree as to the specific variables needed to measure value, as correlating increased share of mind among the company's target audience with a specific dollar value remains nearly impossible. Industry analysts often attribute this disagreement to a difference between advertising and branding: advertising seeks to motivate sales, while branding seeks to optimize positive impressions. Increased positive perceptions, though possibly linked to increased sales, may not manifest themselves in financial data, hindering executives' search for traditional ROI data, Conference Board (2003).

Agency professionals fear that in searching for branding tactics with demonstrable ROI, companies may settle for low return initiatives such as direct mail or free-standing inserts simply because ROI data exists. Although such direct outreach may generate sales calls or inquiries, branding experts believe they fail to increase long-term brand or corporate reputation. Demonstrating sales returns from marketing activities remain especially pertinent during economic recessions, further diminishing executives' support for impression-generating branding, according to Conference Board (2003).

In place of financial ROI, professionals indicate that branding initiatives consist of four indicators that if measured correctly, may discern increases in positive stakeholder impressions within required financial constraints, as described below, Conference Board (2004).

Budget Parameters -- "To minimize cost overruns, project leaders decide the amount of money the company remains willing to spend in order to achieve the desired result. Experts caution budget leaders not to understate the funds required for pre - and post-project research that measure stakeholder impressions.

Target Audience -- "Successful branding initiatives understand the stakeholder group important to the project's success, becoming familiar with messaging strategies that resonate with the group's demographic or psychographic profile.

Objectives -- "Project managers may design each initiative by determining the behaviors or opinions of the target audience that the project seeks to change, defining success by the impressions stakeholders should hold upon project completion.

Communication Channels -- "Channel selection mirrors the target audience, reaching out to stakeholders through appropriate media. Experts assert that repeated core messages in the correct channels yield the greatest chance for project success.

2001 Corporate Council survey reveals that marketers across business sectors appear highly engaged in attempting to quantify difficult-to-capture elements such as branding. Indeed, among survey respondents conducting branding activities, 79% strive to measure their returns. Beyond the Council study findings outlined on the previous page, research indicates that companies across industries most often utilize the following methods to measure the value of their brand placements:

Simple Counts -- "Research indicates that many companies manually count the number of press clippings to measure the value of brand initiatives. However, this method fails to account for positive or negative coverage, or the value of editorial commentary -- "an element that greatly influences the quality of the audience connection according to Alvesson, M. (1990).

Further, press clippings present quantitative measurement only of outputs, not outcomes. As such, the method also fails to indicate whether target audiences read, viewed, or heard the information and, if they did, whether the information influenced attitude or behavior.

Content Categorization -- "In an attempt to provide qualitative assessment of editorial media coverage, some firms group press clippings into positive, negative, or neutral categories. However, this method involves a high degree of subjectivity and ultimately fails to prove that positive messages reached the target audiences.

Essentially, while articles may contain positive messages about a company, they may not prove strategically significant.

Advertising Value Equivalents -- "To assess the value of their branding initiatives, some companies employ advertising value equivalents (AVEs), which attach an advertising value to the media coverage received. Research indicates that this method can greatly undervalue favorable publicity as well as misrepresent the value of branding initiatives that do not influence a company's target audiences.

Branding's Changing Role in Enterprises

Beyond defining the identity of an organization and what its core values and branding define in terms of trust to consumers, branding maintains the promise to develop and manage audience perceptions of the corporate image. Indeed, growing consumer skepticism regarding corporate ethics prompts many leading companies to consider a favorable corporate image among its most valuable assets, requiring proactive care as well as vigorous defense should the need arise.

As such, organizations utilize branding strategies to achieve the following business goals:

Actively manage perceptions regarding a company's products, business practices, and philosophies

Spread brand messaging to all stakeholder groups, including employees, clients, industry thought leaders, and consumers

Rehabilitate a corporate image during and after negative press or crisis -causing circumstances

Proactively communicate company news to shareholders, appropriate media outlets, and industry thought leaders

Conduct lobbying activities on legislative issues in the corporation's interest

Research indicates that chief marketing officers increasingly view branding as an important function within the overall marketing mix, leveraging branding to maximize corporate reputation and unaided awareness. Results from a CMO survey conducted by the Council of Public Relations Firms reveal prominent understanding of the value provided by branding, as shown in Figure 1, titled Percentage of CMOs Understanding Branding's Value. This is based on research completed by Harris (2005).

Figure 4: Percentage of CMOs Understanding Branding's Value (Source: Harris, 2005)

Research indicates that leading companies strive to integrate marketing activities with branding initiatives through the two key methods described below:

1. Mutually supportive branding and advertising efforts -- "Research indicates that branding initiatives often lend credibility and substantiation to advertising claims, prompting organizations to dedicate more resources toward brand-building activities. To illustrate, brand -based spending grew at nearly twice the rate of advertising across the late 1990s, according to the Interpublic Group (2003). In addition, despite an 11.2% drop in reported branding revenue across the first half of 2008 -- "a period of reduced marketing communications budgets across functions -- "Interpublic predicts that branding revenue will grow between 3 and 3.5% percent in 2008 rising to 6% growth through 2009. Given this financial commitment to branding, leading organizations increasingly expect branding practitioners to coordinate efforts with related marketing disciplines, such as advertising, to enhance marketing communications efforts.