2005 saw the launch of Landor's Breakaway Brands Valuation Study - a
new piece of research designed to provide a rigorous assessment of the
value created by brands and to identify those that have undergone transformation. Hayes Roth and Lulu Raghavan introduce the study.
LEADER$ OF THE PACK
The Landor Breakaway Brands Valuation Study
identifies the 50 US brands that have achieved the most meaningful improvements in brand health over the past two years, enabling them to "break away" from their competitors. These are brands that have demonstrated significant gains in brand strength, helping them realize improvements in sales and margins and, in many cases, giving them the ability to move into whole new product or service categories.
These Breakaway Brands represent victories not just for marketing departments, but also for shareholders. Brands are among the most valuable and enduring assets in today's business world and companies that score notable improvement in brand health produce breakaway value for their investors as well.
|The four pillars of BAV
Sample pillar profile of a niche brand
Relationships between these four metrics show the true picture of a brand's health.
The brand's point of difference Relates to margins
How appropriate the brand is Relates to market penetration
How well-regarded the brand is
An intimate understanding of the brand Relates to consumer experience
Our analysis for this study began with Young and Rubicam Brands' Brand Asset Valuator (BAV)
database and methodology. BAV makes clear that brands are built in a very specific progression of four consumer perceptions: Differentiation, Relevance, Esteem and Knowledge. After more than 400,000 consumer interviews worldwide since 1993, tracking over 20,000 brands across nearly 60 different consumer metrics, we know these four measures - the four pillars of BAV - are consistently linked to each brand's ability to deliver revenue and profit for its owners.
The Landor Breakaway Brands team looked at all 2500 brands in BAV's US database to determine the 50 that had the most significant changes in Differentiation, Relevance or both over a two-year time period. Minimum threshold scores on Esteem and Knowledge ensured the exclusion of non-national, non-mainstream brands. The result is the most rigorous and objective assessment of brands anywhere, evaluating their most relevant issues.
From there we selected 10 brands that have evidenced the most significant momentum and transformation in that period. These are the brands featured in the Landor Honor Roll.
It's not about who is "biggest". We are far more interested in which brands have been most successfully transformed by their owners - and the value these efforts have created. While numbers are interesting, stories are instructive. Therefore we have focused on 10 brand transformation stories that illustrate how better branding can lead companies - and their shareholders - to more profitable returns on their investment.
|The BAV Power Grid
The BAV Power Grid is a model for mapping and determining the life of a brand.
BAV uses a two-dimensional plot to measure Brand Strength and Brand Stature.
Position on the BAV Power Grid determines where in the cycle of brand development the brand resides at a given point in time.
A brand's position on the BAV Power Grid also impacts financial performance.
To demonstrate the importance of brand as a determinant of financial performance, we have calculated the change in business value for each of these 10 brands that can be traced to their change in brand health. These value calculations were made by BrandEconomics, a unit of the financial consulting firm Stern Stewart & Co, using the analytical rigor of its Economic Value Added (EVA) methodology.
Case study: Google
Since its founding six years ago, Google has established itself as a breakaway, global leader on the strength of a simple brand promise and powerful viral marketing support. Google is an exceptional example of how the successful application of branding fundamentals can generate real impact on the bottom line.
Singularly focused on its mission, Google seeks to organize the world's information and make it quickly and universally accessible. The brand is positioned around simplicity, intuitive clarity and relevance, served up to consumers in a fun and quirky way.
Indeed, in consumers' minds, Google has become a verb and an everyday, indispensable tool for quick information access on the internet. The complexity of its proprietary search algorithms is cloaked by a clean, simple-to-use consumer interface that consistently delivers on the promise of robust, relevant results with every search. Its brand identity, including the highly memorable name and friendly, colourful, yet straightforward wordmark, clearly communicates easy functionality.
|Google brand value ($m)|
||Gross sales $m
||Business val $m
||Due to brand $m
A brand whose 2004/05 revenues are estimated at roughly 45 times those of 2001 - while its core search technology has not been altered appreciably since introduction - Google's extraordinary increase in business value can be largely credited to insightful brand positioning and management.
Leveraging its core equity of "best in search", Google has smartly extended its brand into areas such as image search, yellow pages, news, e-mail and, most recently, a desktop application. Despite the proliferation of offerings and subbrands, Google has maintained a customerfocused brand architecture that makes it easy for consumers to find and understand its products and services.
Numerous independent brand-tracking studies confirm that Google earns higher scores on customer loyalty than any of its competitors - a leading indicator of profitability on the internet. If Google can stay focused on its superior brand experience without getting distracted by the short-term demands of a publicly held company, it is sure to remain a Breakaway Brand offering significant future value.
Source: Atticus 12 (2006), p62