the brand glossary

THE BRAND GLOSSARY

Jeff Swystun

Edited by

THEBRANDGLOSSARY

Edited by Jeff Swystun

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The most powerful ideas are simple, and brandsadhere to the same rules. Just ask a fewpeople you know, who arent in the industry,and you will find that they are able to articulatethe idea behind a great brand in just a fewshort, focused words. Good branding is there-fore easier said than done.

Creating simple, but powerful, differentiation inthe minds of your customers, your staff, indeedall your stakeholders, requires a clear andcompelling vision that is expressed in every-thing you do; from product to service, throughenvironments, to the people you hire, and theway you talk about yourself. Maintaining suchsimplicity throughout the complex systems,processes, and politics that characterize mod-ern business is a considerable task, requiringabsolute focus, passion, and conviction. Nowonder then, that as competition increases,brands are playing an ever-increasing role inbusiness strategy.

It is now common knowledge that branding isfundamental to business success, and probablywhy our Best Global Brands league table is oneof the top three published business rankings inthe world. At Interbrand we have always placedgreat emphasis on the need for a balancebetween the logical and the creative. Brands,after all, live in our heads and our hearts.

But ultimately, brands are value generators forbusiness and this is our true obsession; usingour creativity and strategic thinking to createvalue. Indeed, increasingly we are serving theneed for a deeper understanding of howbrands generate value and the use of thatinformation to inform better business decisions.

Initially, we thought it strange to be creating aglossary, which by its nature makes complexityeasy to understand, about a subject area thatdemands simplicity! But the language ofbranding simply reflects the depth of thesubject and, as we all know, brand language isvaried, misunderstood, and often abused. Thisbook became our duty, indeed a labour of love!

With this glossary, the people of Interbrandhave set out to demystify, educate, inform, andentertain. We hope to provide a commonlanguage allowing us, the brand practitioners,owners, and otherwise interested parties, tofocus our debate and energy on improving ouruse and understanding of brands as a force for business.

A simple idea indeed.

Jez FramptonGroup Chief ExecutiveInterbrand

Introduction

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Behind every great brand is a great idea

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If you are setting out to edit a glossary (and Iam quite confident that few of you are) thereare three lessons worth sharing. The first is tomore than double your original estimate of thetime required to complete such an effort. Iaffectionately compare the process to that ofcutting off a head of the mythical monsterHydra complete one term and it producestwo more.

The second lesson is to ensure it is not the onlyproject you are pursuing. Diversions willmaintain your sanity and actually offer greatercontext. Through the process I found myself re-examining many areas that are taken forgranted, such as, how we process communica-tions and information, how we purchasebrands, and how subjectivity and objectivitycompete in decision-making. This helped shapethe content.

The third and most important lesson is to haveaccess to the leading subject matter experts. I thankfully had access to over 1,100 of my colleagues, representing different branding disciplines from all regions of the world. Their brainpower is truly impressive and I wish to acknowledge outstanding individualcontributions.

Jason Baer (New York) provided expertise innaming and verbal identity with his infectiousenthusiasm for this aspect of branding. WalterBrecht (Cologne) put himself in the place of hisclients to continually challenge the content.Jean-Baptiste Danet (Paris) provided calmguidance and support during the entireprocess. Rita Clifton (London), a recognizedexpert on global branding, offered valuablefeedback throughout. Julie Cottineau (NewYork), innovator of Brand Tango, lent a hand in

various areas. Matthew Cross (San Francisco)ensured we covered all the terms important tohis clients and students.

Alfredo Fraile (Madrid) provided a distinct andvaluable European perspective. Jan Lindemann(London), a leader in brand valuation andmeasurement, made sure we kept mattersappropriately tangible. Jessica Lyons(Melbourne) lent a hand from down under. Q Malandrino (New York) shared his expertisein brand culture. Jerome McDonnell (New York)focused on brand protection. Andy Milligan(London), author of many brand books, identi-fied current trends. Lorena Noriega (BuenosAires), who has a great passion for brandconsulting, undertook tremendous research.

Larry Oakner (New York) articulated the differ-ences between internal communications andbrand culture. Terry Oliver (Tokyo) made surethat the book took into account the rapidchanges taking place in Asia. Sam Osborn(Melbourne) was a tremendous support incontent, comment, and editing. Sarng Park(Seoul) represented the views of brand-savvySouth Korea. Re Perez (New York) providedguidance in the area of brand culture. RomnPrez-Miranda (New York) offered up the LatinAmerica-Iberia perspective, a region whosebrand sophistication is growing exponentially.

Robin Rusch (New York), the first editor ofleading brand website brandchannel.com,contributed to the online branding and brandautomation areas. Gary Singer (New York) was a great supporter and contributor to keyterms. Bev Tudhope (Toronto) helped on thenexus of branding and investor communica-tions. Thomas Zara (New York) took on termswith vigor and intellect.

Acknowledgements

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Decoding the mystery of consultant speak

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Branding has a huge creative and visualcomponent and this is reflected in the themeand design of this glossary. Chris Campbell ledthe creative direction of the book with supportfrom Gary Ludwig. Lynne Northwood developedthe original concept. John Spicer ensured thatthe dual efforts of content and design woveseamlessly together. Ronan Tiongson andMichle Champagne designed the majority ofthe illustrations and overall layout that helpimmeasurably to bring the terms to life.

Stephen Rutt of Palgrave-Macmillan deservesthanks for his great support and even greaterpatience. Thanks to Steven Schwartz, a thirty-year veteran of written business communications,who worked on the terms and ensured qualityand consistency. A very special thanks to LisaMarsala, who worked tirelessly to see this bookto market from initial concept, to term develop-ment, to design, to marketing and promotion.

What you will find within is a great start, but itis admittedly a work-in-progress. A dictionarycan claim to be definitive while a glossary,though a respected authority, captures a pointin time in the evolution of a certain practice.We expect the glossary will require frequentupdates to stay apace with brandings develop-ment. We also anticipate and welcomefeedback in the hope of establishing a sharedlexicon from which all can benefit. Send your

comments through www.interbrand.com andvisit www.brandchannel.com to contribute tothe brand debate.

From the outset, we intended the glossary tobe a valuable companion rather than a dustyreference book forgotten on a shelf. It containsterms, illustrations big and small, facts, andrelevant quotes, all to help communicate thepractice of branding. The book is designed toinspire you to learn, question, and explore. I will know we have been successful when I seesomeone with their dog-eared copy full ofPost-its, marked pages, doodles, and scribbledideas for the next great brand.

Jeffrey SwystunGlobal DirectorInterbrand

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A valuable brand companion

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A brand is a living entity and it is enriched orundermined cumulativelyover time, the product of athousand small gestures.Michael Eisner


The Brand GlossaryPage 4

Above-the-line CommunicationsThis term refers to marketing communicationsinvolving the purchase of traditional media suchas television, radio, print, and outdoors; mediain which results can be measured. As marketingand communications options have expanded,and advertising agency compensation hasmoved from commission-based to fee-based,this term has become increasingly dated andnow reflects what traditional advertisingagencies included in their base commission raterather than what impact the media would havehad on customers.

Account ExecutiveIn advertising agencies, this term refers to aperson who is the day-to-day contact betweenthe agency and the client. Over the years, theaccount executive function has evolved to exert a more strategic influence in managingagency relationships. Newer titles such asaccount planner and relationship manager areused interchangeably with account executive.Similar terms are used in branding and designconsultancies. The fact remains that one indi-vidual from the agency or consultingorganization must assume responsibility for the satisfaction of the client.

Ad Hoc ResearchThis is a one-off type of research carried out ata specific time for a specific client. Ad hocresearch differs from longer term, ongoingstudies such as sales and profitability monitoring,satisfaction tracking, and perception rankings.

Adapted Marketing MixThis is a combination of product offerings firstmarketed in one geography that is then alteredto suit local conditions in additional markets. Asin a regular marketing mix, the adaptive mixcomprises the Four Ps of product, price,promotion, and place. Also known as distrib-ution, that is, having the product available forpurchase in the target market.

Added-valueThe tangible or intangible benefit provided by aproduct or service that generally commands ahigher price and engenders customer loyaltyand/or overall preference. Frequently, tangibleadded-value components are quickly copied socompanies and brands strive to develop intan-gible ones that are uniquely ownable and moredifficult to replicate.

Addictive ConsumptionThis is a physiological and/or psychologicaldependence on specific products or services.Consumers have been known to be addicted to every possible type of product, but addictiveconsumption more often refers to drugs, alco-hol, gambling, and tobacco. It must be noted,however, that the vast majority of consumerismis not addictive but habitual, and based on individual choice.

AdoptionThis term represents the decision by aconsumer to buy a product or use a service.The consumer weighs available information andmakes a considered choice, which implies alevel of repeat use that may result in brand orservice loyalty.

AdvertisingAdvertising is the communications that takeplace between a company and its targetaudience using any or all of the paid-for massmedia. The process usually employs theservices of various agencies, such as brandingand design consultancies, full-service advertis-ing agencies, market research firms, and

Notes:



media-buying groups. Advertising is employedto inform target markets of available goods andservices; used to remind consumers thatexisting brands continue to be available; anddesigned to create awareness and encourageloyalty. Advertising is also used to reassureconsumers that their buying choice was thecorrect one, known as post-purchase rationalization.

The practice of advertising has been classifiedas informative, persuasive, or manipulative andhas led to debate on its effectiveness and effi-ciency. This debate has created a notable shiftfrom advertising in mass media campaigns toincreasingly targeted activities that can morecredibly claim results while being less intrusivein consumers daily lives. The debate has alsodriven a trend toward integrated marketing,reflecting the broad mix of communicationchannels currently available.

Advertising Wear OutThis is the point when consumers becomeindifferent to an advertising message becauseof overexposure; its when repeated viewingsno longer have any effect. Also called consumerwear out, this can often result in a backlashagainst the offer, which is the completeopposite of the original intent.

Affinity MarketingThis is a form of loyalty development or cus-tomer relationship management designed tocement the emotional bond between consum-ers and brands. It centers on an exchange ofinformation that enables consumers to learnabout brands, while companies gain insightsinto consumers. Unlike loyalty marketing,affinity efforts do not represent an economicexchange, although third parties may benefit,such as consumers rewarding charities basedon credit card points. Affinity marketing mayalso take the form of helplines, membershipclubs, newsletters, chat rooms, and so on.

Agency of RecordA designation assigned to the primary com-munications agency responsible for some or all of a companys or brands media planning,buying, and creative duties. It denotes anongoing relationship, and implies legalagency responsibilities, that is, the ability of the agency to represent the client toproviders and sellers of media services.

AIDA ModelThis is a hierarchy of effect model that standsfor awareness, interest, desire, and action, thefour successive stages a buyer passes throughwhile making a purchase decision. The modelitself refers to a working format for chartingconsumer attitudes and buying behavior.

Aided Recall/Brand AwarenessA line of questioning used in market researchthat prompts respondents about specific com-munications, brands, or services. It is designedto determine any or all associated recall andawareness, and differs from unaided recallduring which respondents are questioned withoutany specific prompts. See Brand Awareness and Recall

AIOs (Activities, Interests, andOpinions)These are variables used in psychographicconsumer research to organize individuals intospecific segments. The variables used for thesegmentation are activities, interests, andopinions, and this research is designed tounderstand buyer behavior rather than just pure demographics. See Psychographic Segmentation

Notes:


AlignmentAlignment is achieved when employees understand and demonstrate a companysbrand and its values through their behavior and actions. It is an increasingly critical aspect of branding as it ensures that the brand experience matches and aligns withthe promises made through external communication. Employees are recognized andrewarded based on their adherence to brand objectives so that consistency, a keyaspect of branding, is delivered.




Alphanumeric NamingThe practice of assigning letters and numbersto differentiate brand names among versions ofproducts. These products are often related, andthe alphanumeric system communicates a hierarchy of value and/or delineates productrelationships. For example, models of cars oftenhave alphanumeric names as evidenced by theBMW car naming system.

AmbassadorsThese are individuals who represent a brandbut are not directly tied to marketing communi-cation functions. Every employee is expected tolive the values of the brand, but brand ambas-sadors go a step further and promote its valuesthroughout the organization even though theymay work in finance, operations, logistics, andso on. See Champion

AnalyticsIn business, analytics is a term used for sophis-ticated forms of business data analysis. Inmarketing and branding, a variety of statisticaland non-statistical methods are used. The valu-ation of branding and marketing activities isbecoming increasingly topical. Brand valuation,return on brand and marketing investment, andbrand scorecards are being introduced asprescriptive tools for improved businessperformance. These promote better decision-

making and add scientific support to areaswhich have largely been guided by intuition andpast experience.

Anchor StoreThis is a major retail store that serves as theprime attraction for shoppers in a mall. Thereare often two anchor stores, placed at eitherend, intended to encourage large numbers ofcustomers to visit the mall, and to generatetraffic for all the stores in the facility. Mallbranding can rely on the image of the anchorstores but runs the risk of overreliance if thosestores were to leave that location.

Annual ReportThis is a yearly record of a publicly heldcompanys financial condition that is presentedat its Annual General Meeting for approval byshareholders. It normally includes a profit andloss statement, a description of the companysoperations, a balance sheet, and a report fromthe companys auditor and president. Anannual report is designed for investors tounderstand a companys current status andfuture plans. This publication often acts as acorporate brochure so the content and designare reflections of the brand.

Architecture See page 8

Art DirectorIn the advertising and branding worlds, an artdirector is responsible for the look and feel of aprint ad, brochure, company logo, or interactivecampaign, and, in a TV commercial, for itsvisual style. Traditionally, an art directors coun-terpart is a copywriter who, obviously, writesthe words. Either or both of them may createan original idea for a brand that develops intosome form of customer communication.

Notes:


ArchitectureBrand architecture is how a company structures and names its brands and how all the brand names relate to each other. Architecture is a critical component forestablishing strategic relationships, and there are three types: monolithic, where thecorporate name is used on all products and services offered by the company;endorsed, where all sub-brands are linked to the corporate brand by either a verbalor visual endorsement; and freestanding, where the corporate brand operates merelyas a holding company, and each product or service is individually branded for itstarget market. There are multiple variations of these three primary structures. The keyrequirement is that any architecture be devised with the customer as primary focus,rather than by internal influences such as accounting, people organization, or history.




ArtworkDigital files of a design or logo that are readyfor print or production. Design work will beartworked following design approval. The art-work file ensures the correct size specification,resolution, colors, fonts, and optimum layoutbefore handing over for print or production.

AssetSomething that possesses attributable valueand earning potential for its owner. There arethree asset types: current, fixed, and intangible.

AssociationsThe positive and negative feelings, beliefs, orknowledge consumers have about a brand,whether purchased or not. These associationsare formed by mass media, word of mouth, trialuse, and/or repeat use. Positive ones are lever-aged, while negative ones are often difficult toovercome once they have taken root.

AttitudeA lasting, but general, evaluation of an object.Attitudes may cover brands, products, services,organizations, advertisements, innovations,ideas, issues, activities, opinions, and individu-als, and they are formed by what consumershear and what their actual experience is.

Attributes Attributes are characteristics of a company,product, or service. They can be either positiveor negative and can be functional (what aproduct does) or emotional (how it makes aperson feel). Attributes are measurable and canbe benchmarked versus important competitors.If attributes are what a brand has, then benefits(what the brand does for a customer) are whycertain attributes are important. Much marketresearch is focused on understanding the mostimportant and powerful attributes of a product,service, or brand.

Audience MeasurementThis is surveying consumers media habits,including viewing, reading, listening, and usage.Audience measurement tracks trends and takesplace over time or at marked intervals. Theresulting insights have historically been basedon behavior tracking, but now include monitor-ing consumer satisfaction. The objective is todetermine attitudes and adjust products andservices accordingly.

AuditAn audit is a comprehensive, systematic, inde-pendent, and periodic examination of anorganizations performance. A brand auditspecifically verifies performance, internal andexternal communications, customer experience,and so on. The results identify performancegaps, competitor advantages, and marketopportunities. An audit is a blend of art andscience employing quantifiable and qualitativedata based on business and brand strategies.See Qualitative and Quantitative Research

AwarenessAwareness is the degree of a consumersknowledge about a specific brand. There areboth quantitative and qualitative research tech-niques used to determine consumers ability toidentify a brand versus competitors in sufficientdetail to make a purchase. Brand awareness isa common measure of the effectiveness ofmarketing communications. Unaided awarenessis spontaneous, while aided or promptedawareness is when a brand is recognizedamong others that are listed or identified. See Aided Recall and Brand Awareness, and see Qualitative and

Quantitative Research

Brand Fact:80 percent of companies believe theydeliver a superior customerexperience, but only 8 percent oftheir customers agree, according toBain & Company.


Brand Fact:On average, prices ofprivate-label goods ofall sorts are approximately27 percent below brandedproducts, based onresearch from InformationResources Inc.

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Balanced Scorecard A technique originated by authors Kaplan andNorton for measuring business performance. Itis based on evaluations of financials, markets/customers, internal processes, and organiz-ational learning and growth. The model is beingadopted and adjusted for brand managementand measurement. The quadrants are adjustedto make it more specific to the brand orgeneral communications.

Banner AdvertisementThis is an announcement that stretches acrossthe entire width of a printed or website page. It is either static or animated and, on webpages, often offers a click-through to accessfurther information.

Barrier to Entry Any defendable factor a company can use tofend off competitors is called a barrier to entryand they can be legal, natural, sunk investment,tactical, good business practices, or brand. Theexpression can also refer to the costs forsomeone new to enter a marketplace.

Barrier to ExitA companys inability to withdraw from certainmarkets or actions, or to redeploy associatedresources to more valuable activities. It may bedifficult to withdraw without retiring a portionor the entire initial investment.

Basic ElementsThese are the essential tools that build a visualidentity. They consist of a name, logotype,symbol, typeface, color palette, style of imagery/photography, and tone of voice. Each of theseelements is combined to create an identitysystem for a brand.

BCG MatrixOriginated by the Boston Consulting Group,this construct has been widely adopted toexplain and guide portfolio management. It wasoriginally developed to chart entire businessesor divisions, but it is now being applied tocustomer segments, brands, product groupings,geographies, and so on.

BehaviorsThe obligatory behaviors that underpin the brandplatform and values. These behaviors havemeaning at the corporate and individual leveland their adoption will ultimately determine thespeed (and/or likelihood) of cultural change.

BeliefBelief is a descriptive thought people haveabout a product, service, innovation, idea, issue,company, or person whether or not theyvehad direct interaction with any of them. Beliefand attitude can be confused because theyreoften used interchangeably, but an attitude isevaluative while a belief isnt.

Below-the-line CommunicationsThis is a term used for communications thatdont involve the purchase of media. Withcommunications becoming more integrated,

Notes:

Regard your good name as the richest jewelyou can possibly be possessed of for creditis like fire; when once you have kindled it youmay easily preserve it, but if you once extinguishit, you will find it an arduous task to rekindle itagain. The way to gain a good reputation is toendeavor to be what you desire to appear.Socrates



this and above-the-line communications arebecoming less and less accurate descriptors.Below-the-line activities may include publicity, direct marketing, promotions, andmedia relations.

BenchmarkingBenchmarking is a performance comparison.The most typical form takes place versuscompetitors or within specific industries. Itsorigins are in manufacturing, but it has beenadopted in other industries, functions, andspecific measurements. Benchmarks can bemisleading if not taken in their proper contextor in concert with additional variables thatdemonstrate a more complete picture of thesituation being examined.

Benefit SegmentationA method of dividing (segmenting) marketsbased on what individual groups want from abrand. For example, the market for beer mightinclude a segment for light beers, another fordark beers, another for pale ales, another forimported brands, and so on.

Best Global BrandsThis is an annual performance report on theeconomic value of the worlds leading brandsproduced by Interbrand employing a proprietarymethodology. Expressed in dollars and as a

percentage of market capitalization, the reportranks the top 100 brands using publicly avail-able data on brands with values greater thanUS$2 billion and which have significant salesoutside the country of origin. Public relationsfirm, Burston-Marsteller, conducted a study onwhich rankings global CEOs pay attention toand the Best Global Brands was number three.Interbrand also conducts over ten country-specific brand rankings including France,Taiwan, and Brazil.

BoilerplateA largely consistent set of written communic-ations that is repurposed multiple times.Boilerplate is often used to produce collateralsor for frequent and similar responses torequests for proposals. Considered a timesaverand consistency tool, boilerplate is also danger-ous as it may be overly generic or inaccuratefor certain audiences and purposes.

Bottom-up PlanningThis is when senior management request plansfrom more junior departments or managers forinclusion in corporate or marketing planning.The process is meant to inspire less seniorlevels to achieve performance targets since theyare actively involved in the planning process. Itis the opposite of top-down planning, wheregoals and objectives are set by senior manage-ment and are handed down through the ranksto be achieved.

BrainstormingAfter an issue or opportunity is presented,stakeholders, subject matter experts, and/orcompletely objective participants are organizedto have a brainstorming session, a free-formdiscussion designed to achieve consensusabout a solution and required next steps.Various methods of facilitation are employed tomanage the process and its success oftendepends on the skill of the facilitator.

Brand Fact:McDonalds has over 30,000eateries globally. Starbuckshas over 9,000 with a planto expand to 30,000 based onsales projections and potentialgeographic locations. Theubiquitous coffee shop opens3.5 stores per day.



BrandA brand is a mixture of attributes, tangible andintangible, symbolized in a trademark, which, ifmanaged properly, creates value and influence.Value has different interpretations: from amarketing or consumer perspective it is thepromise and delivery of an experience; from abusiness perspective it is the security of futureearnings; from a legal perspective it is a separ-able piece of intellectual property. A brand isintended to ensure relationships that create andsecure future earnings by growing customerpreference and loyalty. Brands simplify decision-making, represent an assurance of quality, andoffer a relevant, different, and credible choiceamong competing offerings.

Brand AwarenessBrand awareness is commonly used in market-ing communications to measure effectiveness. Itinvestigates how many target customers haveprior knowledge of a brand as measured bybrand recognition and brand recall. Brandrecognition (also called aided recall ) measuresthe extent to which a brand is rememberedwhen its name is prompted; for example, Areyou familiar with the Sony brand? Brand recall(also called unaided recall ) refers to a cus-tomer being able to remember a specific brandwhen given a category of products withoutmentioning any of the names in the category.

Brand BookA unique articulation of the brand in bothwords and visuals which brings the brand andits story to life. Usually directed at internalaudiences, brand books are now developed totell the brands story for all constituents fulfill-ing a pledge to be consistent in execution.

Brand BriefThis is the planning document for any brand-building project. It sets out the goals, objectives,competitive landscape, current capabilities and performance, timelines, and budget. It

ensures that all stakeholders are aligned toanticipated change and that a sound businesscase is in place to make any significant changesto the brand.

Brand Commitment The degree to which a customer is committedto a given brand in that they are likely to repurchase/reuse in the future. The level ofcommitment indicates the degree to which abrands customer franchise is protected fromcompetitors.

Brand CultureThe Interbrand practice and overarchingprocess of ensuring that the employees of anorganization are the first audience to beexposed to and deeply understand what thebrand is meant to achieve. Incredibly, for manyyears, the internal audience was the last toknow about the brand, and that causedperformance issues as these were the individ-uals who were meant to deliver on the promisemade through external communications. Thisspecialty within branding goes far deeper thaninternal communications and launch events. Itinvolves human resource practices encompass-ing rewards and recognition, compensation,and career path development.

Brand CycleThe process Interbrand uses to create andmanage a clients brand as a valuable asset. Itoutlines the breadth of services and associatedbenefits. It commences with an evaluation of anexisting brand or the creation of a new one andtakes the owner through a robust strategic andcreative series of interventions meant to delivera clear return on brand investment.

Brand EarningsThese are the profits that can fairly be attributedsolely to a brand. They result from the revenuesthe brand generates, and are distributed bydividing the profits between all assets or parties

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that contribute to generating it. This profit splitapproach is the most widely used and recog-nized method for assessing the economic valueof a brand and is employed by the majority ofaccountants and consultants. It is alsobecoming the standard accounting method forcapitalizing goodwill on the balance sheet.

Brand EquityBrand equity is the sum of a brands distin-guishing qualities, and is sometimes referred toas reputational capital. A product or servicewith a great deal of brand equity enjoys acompetitive advantage that sometimes allowsfor premium pricing.

There are different definitions of the term indifferent markets. In the UK, brand equity ismainly used to describe market research-basedmeasurement and tracking models that focuson consumer perceptions. In the US, it is usedfor both research and financially based evalua-tion models. These models use consumerresearch to assess the relative performance ofbrands. They do not provide a brands financialvalue, but they do measure consumer behaviorand attitudes that have an impact on a brandseconomic performance. Some models addbehavioral measures such as market share andrelative price.

Brand Equity InsightsA quantitative evaluation of the three compo-nents that comprise the equity of a brand:knowledge (familiarity, awareness, relevance),distinction (personality of the brand), andcommitment (credibility, loyalty, satisfaction).This proprietary research methodology fromInterbrand produces an understanding of themarket structure and the factors that driveloyalty and commitment within that structure.

Brand EssenceThe brands promise expressed in the simplest,most single-minded term. For example, Volvo =safety; AA = Fourth Emergency Service. The

most powerful brand essences are rooted in a fundamental customer need.

Brand ExperienceSee page 16

Brand (or Product) ExtensionThis is the use of a well-known brand to launcha new product into a different segment of itsoverall market. For example, Jello went tomarket with Jello Instant Pudding as a brand orproduct extension. The benefit of this strategy isclear through leveraging existing equities,however, if the extension is too far away fromthe original category it may actually impact thereputation and value of the original brand.

Brand GuidelinesWithin companies, everyone involved inbuilding and maintaining a successful branduses brand guidelines. They are designed toinform and motivate, and are critical in estab-lishing and reinforcing a strong internal brandculture. Guidelines can include vision andvalues, design and writing requirements,strategy and positioning statements, and even acompany directory of how to contact a brandskey managers. The guidelines are part enforce-ment and part motivation to ensure a consistentexecution of the brand. They provide full infor-mation and empower staff and third-partysuppliers to successfully develop the brandindependently.

Brand LicensingThis is a brand owner leasing the use of itsbrand to another company, most often for a feeor royalty. Though an attractive stream ofrevenue, it is important for the brand owner toensure that the equities of the brand areprotected so that the licensee does no damageto the brand over the term of the agreement.

Notes:


Brand ExperienceThe means by which a brand is created in the mind of a stakeholder. Someexperiences are controlled, such as retail environments, advertising, products/services, websites, and so on. Some are uncontrolled, like journalistic comment and word of mouth. Strong brands arise from consistent customer interactions that combine to form a clear, differentiated, holistic experience.




Brand ManagementThe process of managing a companys brandsto increase long-term brand equity and finan-cial value. It was originally invented andchampioned by Procter & Gamble as acompetitive system for managing individualbrands within a portfolio. Today, however, it isdefined more widely and encompasses strategy,design, and deployment of an organization,product, or service. Organizations are increas-ingly investing in branding for competitiveadvantage, and this is forcing re-examination oftraditional marketing departments, resulting inmore responsibility for the chief marketingofficer or senior marketing executive. Sophisti-cated branding organizations employ brandvalues as guideposts across all functions,ensuring consistent behavior, decision-making,and performance.

Brand ManagerAn individual responsible for the performance ofa product, service, or brand. The brand managermay also oversee a portfolio of brands, aligningthem for maximum effectiveness; ensuring theyarent compromised by tactical errors; anddesigning crisis management plans. He or shemay report to a more senior member of theorganization such as a vice president or chiefmarketing officer.

Brand PlatformAn Interbrand construct for positioning thatoutlines the goals of an organization, product,service, or brand. A brand platform calls for adeep understanding of what differentiates abrand and makes it credible and relevant todefined target audiences. It also requiresinformed decision-making regarding a brandsability to stretch beyond its initial category andcompetition. The platform comprises:

Brand vision: the brands guiding insight Brand mission: how the brand will act on its

insight

Brand values: the code by which the brandlives. The brand values act as a benchmark tomeasure behaviors and performance

Brand personality: the brands recognizableand ownable personality traits

Brand tone of voice: how the brandcommunicates to its audiences.

Brand PositioningPositioning is the unique, strategic location ofthe brand in the competitive landscape. Itestablishes communications to consumers in a way that sets it apart from the competition,ensuring that consumers can differentiatebetween it and others. Basically, positioning isthe place in the marketplace that a brandstarget audience believes it occupies throughthe offer of tangible and intangible benefits.

Brand Positioning StatementThis serves as a companys internal guide to itsmarketing communications strategy concerningan individual brand. It sets out the benefits andassociations that set the brand apart from itscompetition in a meaningful way. A brand posi-tioning statement includes the words, pictures,and/or images that create a common under-standing, and aligns beliefs and actions.

Brand ProtectionBrand protection refers to the legal steps takento register the uniqueness of a brand andprotect it as an asset. Pepsi-Cola has regis-tered its product formulas, packaging shapes

Notes:

Brand Fact:The International Chamber ofCommerce estimates that the counterfeiting industrycomprises 5 to 7 percent ofglobal trade and is worthroughly US$450500 billion.


Brand ValuationBrand valuation assesses the financial value of a brand. Although there is a widerange of methods available, the economic-use approach is now the most widelyrecognized and applied. Economic use assesses the value of a brand by identifyingits future earnings and discounting them to a net present value using a discount ratethat reflects the risk of those earnings being realized. The economic-use approachwas developed by Interbrand in 1988. The methodology integrates structured marketand brand assessment with rigorous financial analysis.

These valuations drive management decision-making in many areas; optimizedbusiness investment, portfolio management, licensing, tax planning, litigationsupport, and mergers and acquisitions transaction support.




and designs, website addresses, advertisingslogans, and so on, to ensure that it protects allPepsis associated distinctiveness.

Brand StrategyBrand strategy is a big picture plan, a clearvision and articulation of how a brand willdeliver distinctive and relevant benefits to targetcustomers. An effective brand strategy answersfive critical questions:

1. What are the most profitable customersegments to which the brand must appeal?

2. What is the single-minded value propositionthat is going to compel these high prioritycustomers to repeatedly choose the brand?

3. Why should these high priority targetsbelieve in the brand?

4. What are the facts that support the valueproposition?

5. How do we communicate and implement thebranding, marketing, and operational plan soemployees and sales channels will adopt it?

There is no prescription or template for devel-oping a brand strategy. Many different modelsexist, but all should be rooted in the brandsvision and driven by the principles of differen-tiation and sustainable customer appeal. Andthey must be based on specific industry andcompetitive variables.

Brand StrengthA portion of Interbrands brand valuationmethodology, this is a detailed assessment todecide if the brands forecast earnings will berealized. A discount rate is determined based

on the risk premium for the brand. This resultsin the net present value of brand earnings.

Brand TangoBrand Tango is a proprietary approach toconsumer branding developed by Interbrand.Its intent is to generate breakthrough ideas byapplying best practices from winning brandsoutside a clients category to inspire freshthinking. It is accomplished through therepeated and multiple pairing of brands insymbiotic, yet often unexpected, combinations.Brand Tango itself takes its inspiration from theArgentinian tango. The tango is a danceexecuted with passion and style, where eachmovement is carefully choreographed and theoutcome of each dance is uniquely dependenton the interaction and synergy of the two indiv-iduals dancing. This makes it the perfectmetaphor for an approach to innovation:inspired combinations of brands for breath-taking results.

Brand Valuation See page 18

Brand ValueThis is the dollar premium resulting fromcustomers commitment to a brand and theirwillingness to pay extra for it as compared to ageneric offering in the same category. It is thefinancial worth attributable to the brand, and it

If this business were split up, I would give you the land and bricks and mortar, and Iwould take the brands and trademarks, and I would fare better than you.John Stewart, Former CEO, Quaker

Brand Fact:Forrester Research found thatword-of-mouth, viral, or buzzmarketing reaches up to 46 percent of North Americanconsumers.



demonstrates the value of the brand (or portfolio of brands) as part of a corporationsintangible assets.

Brand Value CalculationBrand value is the net present value (NPV) ofthe forecast brand earnings, discounted by thebrand discount rate. The NPV calculationcomprises both the forecast period and theperiod beyond, reflecting the ability of brandsto continue generating future earnings. Thiscalculation is part of the proprietary Interbrandvaluation method and helps determine theeffect of marketing strategies, communicationbudgets, return on brand investment, and otherkey business and brand decisions.

Brand Value ManagementInterbrands methodologies for creating andmanaging brand value. This is a comprehensivearray of services and tools employed to positiona brand now and into the future. The goal is toensure loyalty from defined target audiences todeliver economic benefits to the brand owner.

Brand ValuesThe small number of descriptive behaviors that the brand is to exemplify. These are torepresent the company, brand, and employees.Examples include passion, inventiveness,respect, honesty, and/or collaboration.

Brandchannel.comBrandchannel.com was established in February2001 by Interbrand and is an online magazinecommitted to providing a global brandperspective. Brandchannel.com publishesoriginal articles and papers on a weekly basis,and challenges readers to think about theimportant issues that affect brands now andthat will affect them in the future. To furtherenhance brand awareness, the magazine offerstools and information, including conferences,courses, and careers worldwide, and links toother valuable industry resources.

BrandingThis is the strategic and creative practice ofcreating brands and managing them asvaluable assets. See Brand and Brand Management

Business-to-business BrandingThis is brand building and communicationsinvolving inter-business buying and selling. Thesubstance of the communications focuses onrelationships, account management, and solu-tions. Sales cycles tend to be longer and morecomplicated since the size of the transactionstends to be large. An example would be a tech-nology consultant selling a large systemsintegration program to a global financialservices organization.

Business-to-consumer BrandingThis is brand building and communicationsinvolving consumers. Although this activity hastraditionally employed mass-market communi-cations, business-to-consumer brands are nowusing more targeted communications for effec-tiveness and efficiency.

Buyer BehaviorThis is the action taken by consumers duringthe purchasing process, which includes consid-eration, trial, repeat purchase, and loyalty.Understanding the thought processes ofprospective and existing customers allowsorganizations to tailor their offers and commu-nications to facilitate purchase decisions.

Buzz See page 21

Notes:

Brand Fact:Consulting magazine cites the threemain reasons why clients selectconsultants: understanding of specificneeds, depth of functional expertise,and depth of industry experience.Price was fourth.


BuzzThis is a term that refers to media and public attention about a product or service. Iftheres a great deal of buzz, the brand managers are doing something right but ifthe silence is deafening, then its back to the drawing board. Buzz marketing isbased on this phenomenon, and relies on people passing along product informationand recommendations to family and friends. See Viral Marketing



The aim of marketing is to know and understand the customer so well that theproduct or service fits him and sells itself.Peter F. Drucker

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CannibalizationWhat is called cannibalization occurs when abrand extension or line extension takes salesaway from existing and established brandsowned by the same company. Overlap betweenbrands is not unusual, since consumersegments within a product category tend tohave some commonality. But the risk in thisoverlap is that higher margin brands may benegatively affected by lower margin ones, result-ing in overall losses of revenue and brand value.

Category ManagementCredited to Procter & Gamble, this system wasintroduced in the 1980s as an improvementover brand management. In brand manage-ment, managers are very entrepreneurial andpay little attention to competition with otherbrands owned by their company in the same orrelated categories. On the other hand, categorymanagement broadens managers responsibili-ties so they are responsible for the categorysand the brands overall financial well-being.They manage cannibalization (see above), opti-mization, and cross-promotion situations.

Cause BrandingCause branding relates to a for-profit organiz-ation aligning itself with a charitable cause toshare mutual benefits. The cause is generallyan existing nonprofit organization that sharesvalues, beliefs, and audiences with the for-profit. This is often the most visible act ofcorporate philanthropy and social responsibility.With the increasing sophistication of consumerresponse to shallow communications, alignmentwith a nonprofit organization must be a strat-egic and long-term commitment on behalf ofan organization, service, or product.

Challenger Brand A challenger brand is a non-market leader thatmakes a strong effort to take market shareaway from its competitors, or a brand that

already has a strong presence but is trying totake over the leadership position.

Chain of Experience All individual and potential touch points acustomer can experience when interacting witha brand. These involve all five senses and mustbe managed holistically to ensure that thebrand promised is the brand delivered. Thechain of experience is frequently modeled todetermine benefits prior to investment.

ChampionOne step beyond brand ambassadors, brandchampions are individuals within a companywho spread the brand vision and values andcultivate the brand within their organization.This informal role varies from stimulatingawareness, to cases where the champion triesto move a project forward despite the exis-tence of entrenched internal resistance. Themore employees a company can turn intobrand champions, the better it will beequipped to build and maintain strong brandequity. For example, Harley Davidson, Nike,and Google all have well-deserved reputationsas companies with strong brand champions. See Ambassadors

Brand Fact:The New York Times reports that80 percent of all global brandsnow deploy a strategy for thetween segment.



Channel of CommunicationThe three primary components of any commu-nications program are message, audience, andchannel. Channels are communication vehiclesand they include websites, brochures, salesforces, television, radio, newspapers, publicspeaking, publishing, and so on. Choosing theappropriate channels is a significant part of anycommunications strategy, plan, and execution.Channel choice is meant to determine the mostefficient and effective means of reaching targetaudiences with specific messages.

Chief Marketing Officer (CMO)A relatively new title in the corporate hierarchy,the CMO generally has responsibility for allexternal communications and holds primaryresponsibility for brand management execution.It is widely believed that the chief executiveofficer should own the brand but the CMOensures strategic, creative, and consistentexecution of the brand strategy.

Choice Choice is the decision made by consumers toselect a particular brand from a range ofbrands with similar features, benefits, andcosts. A choice set is the final group of brandsfrom which consumers choose, and a choicemodel is an effort that tries to understand howconsumers use and combine information aboutvarious products or services so they can chooseamong them.

ClutterThe sheer number of advertisements andmessages competing for consumer attention in

the same medium or place is referred to asclutter. In order to rise above the clutter andshowcase product and service benefits, moreinnovative and targeted forms of activities arenecessary. The traditional media are often nolonger enough to effectively penetrate forawareness and choice.

Co-brandingThis is a strategy that leverages together two or more brands to form a more compellingoffer than either could alone. In order to besuccessful, however, the two brands must be complementary and jointly promoted to consumers identified as most likely to benefitfrom the arrangement.

Cognitive DissonanceThe state of anxiety or unease that follows adecision to purchase and creates a need forreassurance that the decision was correct iscalled cognitive dissonance.

CollateralThis is marketing and sales promotional printmaterial. Collaterals are often synonymous withbrochures that communicate relevant informa-tion to target audiences in order to increaseawareness, promote purchases, and/or providepost-purchase validation.

ColorColor is an emotional and subjective compo-nent of every companys design andcommunications. Without even being aware ofit, consumers make purchase decisions everyday based on their attitude toward color.People tend to identify with certain colors andmarketers use color to identify a brand, set amood, communicate specific associations, anddifferentiate one brand from another.

Notes:

A house of brands is like a family, each needs a role and a relationship to others.Jeffrey Sinclair, Brand Strategist



CommodityIn economic terms, commodities mean allgoods and services. In branding, however, acommodity is a product or service that tends to compete solely on its functional attributes.Brands create tangible and intangible associa-tions which allow for significant differentiationfrom alternatives and, therefore, greatersecurity, revenue, and profit.

CommunicationCommunication is transmitting and exchanginginformation by writing, speaking, electronicmeans, and the like. It is also the process ofestablishing a commonly understood meaningof facts, thoughts, and opinions betweensenders and receivers.

Communications AuditA review of the portfolio of internal andexternal communications in terms of their lookand feel, tone of voice, and consistency ofmessage, visual or otherwise. This provides aninsight into the current strengths and weak-nesses in communications and where theopportunities lie for future communications.

Community A brand community is everyone inside andoutside a company who is somehow involvedwith building a brand, from internal depart-ments, suppliers, and the media, to customers, prospects, and advertising andpublic relations agencies.

Competitive AdvantageThis is the above-average performance of acompany, product, or service that results inadditional profits. These additional profits aretypically reinvested to maintain continuousadvantage over competitors.

Competitive LandscapeAlmost every brand exists in a competitive envi-ronment that is constantly being modified bytime and changing consumer preferences.Effective brand management requires brandowners to examine their brands regularly, andto understand that future threats may not comefrom brands on the radar screen now, but thosethat will become challengers in the future.

CompetitorCompetitors are brands that are vying with eachother for success in the same market brandsthat are considered viable alternatives byconsumers because they can provide satisfac-tion almost equally well. Competition-orientedpricing is when a company decides on a pricebased more on what a powerful competitorcharges than on consumer demand or produc-tion costs.

Competitor AnalysisThis analysis is usually focused on a companysclosest competitors. The goal here is to under-stand the resources, practices, and results thatset a competitor apart. These can then beemulated, countered, or marginalized, based onstrategic actions.

Concept Development and TestingWhen potential buyers are shown the descrip-tion of a new product and asked for theirreactions, and then, at a later date, shown a prototype of the product and asked for additional feedback. See Prototype

ConditioningVarious marketing and advertising actionstaken by a company to develop and foster a favorable impression of its brand in its markets. Consistent communications arerequired in order to introduce and educate the consumer concerning the brand and itsassociated benefits.

Brand Fact:Frank Perdues chicken slogan,it takes a strong man to make atender chicken was translatedinto Spanish as it takes anaroused man to make a chickenaffectionate.



Consideration Set This is the array of available brands in acategory from which consumers can choose.Consumers form it in a rational and deliberatemanner, focusing on the functional aspects ofthe brands. Once established, the considera-tion set remains largely stable and follows itsown version of the law of diminishing returnswhere choice is impaired when more brandsare added.

ConsistencyConsistency has two meanings in branding:first it refers to the implementation of a brandsvisual identity and tone of voice across allcustomer touch points. BMW is perhaps thebest example of a brand whose visual identityand tone of voice is implemented consistentlyaround the world from the correct placementof its logo, to the correct design format of itsdealerships. Second, consistency is a qualitativeand quantitative measure of a brands ability torepeatedly deliver the experience it promises toits customers. For example, Cokes product isconsistent both over time and internationally,and Apple computers have consistently deliv-ered a user-friendly experience targeted at thecreative market.

Conspicuous ConsumptionThe overt display of a consumers ability toafford luxury brands is called conspicuousconsumption. The term was developed byAmerican economist Thorstein Veblen and nowrelates to brands symbolizing a consumersstatus in society. Brands as status symbols haverecently been extended beyond luxury brandsto include icons embraced by brand loyalists,such as Starbucks and Adidas.

ConsumerA consumer is the ultimate user of goods,ideas, or services who acquires for direct useand ownership, rather than for resale or otherreasons. The term also refers to the finaldecision-maker and, in this sense of the word,doesnt differentiate whether a person is acurrent or potential buyer.

Consumer Choice ModelThis is a construct that tries to understand howconsumers use and combine information aboutvarious products or services so they can chooseamong them. It identifies a hierarchy of decision-making encompassing benefits, image, price,ease-of-use, and so on.

Consumer-perceived RisksWord-of-mouth information about a product,service, or brand. They tend to relate toperformance issues and can affect aconsumers perception of risk prior to decidingwhether or not to buy.

Consumer/Product RelationshipThis is understanding how a particular brandrelates to an individual consumers goals andvalues. Understanding this relationship is basicto developing effective market strategies.Loyalty is the ultimate goal of branding and byunderstanding this relationship, brand ownerscan more accurately match brand to buyer.

Notes:

Every company has its own language, its ownversion of its history (its myths), and its ownheroes and villains (its legends), both historicaland contemporary.Michael Hammer



Consumer ProductsThese are tangible goods produced for finalconsumers, not for businesses. Typically,consumer products are heavily branded, widelyadvertised, and distributed through recognizedretail channels. Well-branded consumerproducts condense the decision process forconsumers by simplifying choice. However,competition in long-established markets isintense, demanding constant brand revitalization.

Consumer ProfileThis is all the distinguishing demographic,lifestyle, and personality characteristics ofconsumers in a particular market segment.Brand values can be mapped to these distin-guishing characteristics for more accuratecommunications to promote adoption andsustained use leading to loyalty.

Consumer Purchasing ProcessThis is the entire process a consumer goesthrough before making the decision topurchase a specific brand. It comprises:

Awareness (understanding there is such a brand)

Interest (learning more about its value) Desire (comprehending the need for it) Action (making the purchase decision) Post-purchase evaluation.

Marketers will use different tactics to moveconsumers from step to step. Specific measuresof success must be developed against eachstep to gain clear understanding of effectiveand efficient branding and marketing practices.

Conversional MarketingThis is an activity designed to get consumers to change their minds, ideas, or attitudes abouta product. This is usually accomplished byoffering it at a lower price, or by increased orspecially designed advertising and promotion.The term also means converting qualifiedprospects into active clients.

Cooperative AdvertisingThis is an agreement between a manufacturerand a retailer to reimburse the retailer in full orin part for placing manufacturer-produced adsand commercials locally, with the understand-ing that their name will be included in the copy.Co-op advertising can also refer to a jointeffort between two or more businesses to pooladvertising money for more buying power. Inthis case, the ads would feature both companynames and benefits. From a branding perspec-tive, the quality and image of the two playersmust be commensurate and offer mutualbenefit in communications.

CopyIn a branding context, copy refers to thespoken words in a commerical, or the writtenwords in advertisements, magazines, news-papers, or any marketing communicationsvehicle. Copy must be compelling, impactfuland fast to grasp given the proliferation ofcommunication and messaging in business.Specific to branding, copy must adopt a distincttone of voice that helps to draw immediate andclear associations with the brand.

CopyrightA legal device designed to protect work/product from being used without authorizationis called a copyright. It is recognized by itssymbol and guarantees the creators legalrights. In theory, it automatically ensurescreator/owner control, but it demands that thework be in a tangible form; that is, ideascannot be copyrighted.

Notes:

A great brand is a story thats never completely told.Scott Bedbury



Copy TestingAn effort to evaluate consumers reactions tothe effectiveness of communication messages.It can happen while a campaign is being devel-oped (pre-testing), during a campaign, or afterit has been launched (post-testing).

Core CompetenciesCore competencies are what a company doesbest, a particular set of skills that contributesmost to its ability to succeed and enables it to deliver benefits to consumers and achievecompetitive advantage. These are generallyintangible attributes that are difficult to copy,thus forming a great part of the brands overall uniqueness.

Corporate IdentityThis is a corporations brand and it is com-municated through the combination of theorganizations name and its use of visuals(logo/color/artwork). Furthermore, corporateidentity includes all an organizations support-ing communications elements such as tone,manner, graphic structure, and music.

Council A permanent working group within a companythat guides and manages the building of abrand, evaluates its success or failure, andtakes steps to reinforce the former and correctthe latter. It should be representative of allinternal stakeholders rather than solely repres-enting marketing and/or customer service. Thecouncil is most effective when empowered tomake change and when it reports to the CMOor equivalent.

Counterfeiting Occurs when an organization or individualproduces an inferior and cheaper product thatlooks like a branded product and is packagedand presented in a manner to deceive thepurchaser. This damages the true brand and

continues to be a significant issue globally. InChina, counterfeits of luxury brands like LouisVuitton proliferate.

Country of OriginThis is the country from which a well-knownand supported brand originates. Long-termtheory has assumed that a brand is partiallyevaluated or chosen based on where its from fine leather goods from Italy, for example, ortimepieces from Switzerland. Current theory,however, is overturning the importance ofcountry of origin as consumers assign moreweight to the quality, convenience, and cost of the brand.

Creative StrategyThis is an outline of the brand messagecompanies want to convey to target audiences.It is the set of guiding principles art directorsand copywriters follow when creating advertis-ing or marketing communications campaigns.Sometimes, creative strategies are called brand platforms.

CredibilityCredibility means that customers believe abrand will deliver what it promises. It is chieflyearned through consistency over a period oftime, but it can also be achieved, in the shorterterm, by the persuasiveness of communications.Credibility is arguably the most important criterion a brand can have. Any erosion ofcredibility impacts reputation and equity andwill impact the financial performance of a brand.

Crisis ManagementA well-rehearsed contingency plan used bycompanies to respond to unexpected negativeevents. Its intent is to reduce and control theharmful impact of whatever situation occurs byusing every communication vehicle at itsdisposal. A strong brand can contribute to cris-is control by drawing on all the equity accum-ulated over time to help weather the crisis.

Notes:

Brand Fact:Scandinavian vacuummanufacturer Electrolux usedthe following in an Americancampaign: Nothing sucks likean Electrolux.


Cult BrandsThese are brands that enjoy customer loyalty that has moved beyond simpleallegiance and into cult-like devotion. Those who drive their Harley-Davidsons to Starbucks daily may qualify. These devotees tend to live the brand and it forms an integral aspect of their life. These are also known as tribal brands.




Critical Behavior DriversThese are the most important aspects ofconsumers buying habits and behavior, andare used by market research companies topredict future trends. These drivers can bemapped to the brands attributes signaling aclear link between consumer wants and needsand the brands benefits and associations.

Cross-sellingCross-selling is encouraging existing customersfor one product or service to buy additionalproducts or services from the same company(as opposed to buying more of the same). Not only is cross-selling designed to generaterevenue, it is also intended to broaden a cus-tomers reliance on a company and, therefore,decrease the likelihood of their buying from acompetitor. This is more effectively achieved ifthe original product or service has a clear andpowerful brand.

Cult BrandsSee page 30

CultureA companys culture is the sum total of thebeliefs, history, practices, policies, and activitiesthat define its unique personality. A companysbrand is part of its culture and a brand actuallyhas a culture of its own, represented by thepeople who work for it, their operating styleand behavior.

Customer Often used interchangeably with consumer, a customer is one who actually purchases abrand, product, or service.

Customer AcquisitionThis is the process of using a variety of market-ing techniques to gain customers who werepreviously unaware of a companys products orservices. Simply stated, the goal of a customeracquisition program is to transform potentionalcustomers into actual buyers. Convincing acustomer to buy is the goal of marketing convincing a customer to continue to buy is the goal of branding.

Customer Characteristics Customer characteristics refer to distinctdemographic, behavioral, and psychographicfeatures, traits, or facts. They include age, sex,earning power, occupation (demographics);propensity to purchase and repeat purchase(behavioral); and expressed self-image, atti-tudes about life, and so on (psychographics).Groups of customers who share the same orsimilar characteristics become a definedcustomer segment, which can then be effec-tively targeted with products and promotionsrelevant to their needs. See Psychographic Segmentation

Customer DefectionCustomer defection measures how long acertain customer or group of customers can beexpected to remain loyal to a product orservice, and the length of time they can realisti-cally be expected to generate income. It is aconsideration in calculating lifetime value. See Lifetime Customer Value

Customer Relationship Management(CRM)This term refers to a technology system and/ora formal program for managing relationshipsbetween organizations and customers. The

Notes:

I am irresistable, I say, as I put on mydesigner fragrance. I am a merchant banker,I say, as I climb out of my BMW. I am ajuvenile lout, I say, as I pour an extra stronglager. I am handsome, I say, as I put on myLevis jeans.John Kay



desired result is extensive knowledge about keycustomer segments, and customized plans tosell to and service them. CRM is designed tofocus on the most profitable customers andfacilitate cross- and up-selling. Effective brandmanagers cull the data from these systems foractionable intelligence that helps guide theirbrand strategies.

Customer RetentionThis term refers to the percentage of customerswho continue doing business with a company. Italso refers to maintaining an existing customerbase by establishing good relations witheveryone who buys the companys product.

Customer Return on Investment This is the value a company receives frominvesting in the acquisition and retention ofcustomers. A critical component of brandanalytics, this calculation helps to determinereturn on brand and marketing investments.

Customer Satisfaction/DissatisfactionSatisfaction means that the needs, desires, andexpectations of customers have been met orsurpassed, while dissatisfaction means theopposite. Satisfaction, however, does not neces-sarily equate with loyalty, since an organizationor brand can have one-time satisfied customers.

Customer ServiceCustomer service is the communication,delivery, and after-sales care of the buyingpublic. In the best organizations, it is the centerpiece of their efforts. It is largely delivered through customer-facing employeesbut also, increasingly, through customer-friendlytechnology (such as the telephone or internet).Unfortunately, in many organizations, customerservice is a department that only handlescomplaints or answers questions, so it is usuallyrelevant to only a small number of customers.

CustomizationCustomization is tailoring products or servicesto the special and unique needs of individualcustomer segments. This is a business strategyfor engendering loyalty by more accuratelydelivering relevant products and services.

Notes:

Were not concerned about having consistencyof brand so much as about consistency ofpurpose that flows throughout the wholeorganization. It doesnt actually matter whatwe write on the napkins or say throughadvertising, all that matters is that whenyou go into a Pret shop you get that set ofexperiences that describes Pret.Andrew Rolfe, Pret A Manger


Brand Fact:According to Interbrand, thethree main tasks for a brandowner are:1. Embody the brand itself in all

words and actions2. Know the underlying sources

of brand value and managethem like any tangible asset

3. Constantly keep the brandrelevant and differentiated.


Marketing is too important to be left to the marketing department.David Packard

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Database MarketingThis is a form of direct marketing that usestechnology and customer (or potentialcustomer) databases to generate personalizedcommunications meant to promote a product orservice. Database marketing emphasizes statis-tical techniques to develop customer behaviormodels, which are then used to target idealcustomers. This form of marketing requires asignificant commitment to maintaining theaccuracy of data.

De-differentiationDe-differentiation is a relatively new phen-omenon that describes the breakdown oftraditional barriers between once-distinctindustries. De-differentiation, or convergence,is when multiple industries form alliances orwhole new businesses with the objective ofbetter serving customers.

Demographics This is a term referring to statistics relating to a population and generally covering sex, age,marital status, birthrate, mortality rate, income,education, and occupation. Demographics arestill commonly used to identify potentialcustomers, but are often augmented by more specific methods that help understandbuyer behavior.

Design See page 37

Design ElementsThe individual components comprising theoverall visual expression of the brand. Thesecan include images, type, color, shape, texture,and so on. These elements work in cooperationwith each other to communicate an overallbrand personality and image.

Design PrinciplesThe set of objectives and parameters that guideconsistency in brand development. Theseensure that equities are retained while allowingsome creative license to extend the brandsvisual vocabulary.

Design to CostIn the development of new products, this is anapproach that considers cost as its own designconsideration, rather than as the outcome of acompleted design. Here, costs would be basedon projections about what consumers canafford and the nature of the competitive land-scape. It helps build a business case prior tosignificant investment.

Differentiated MarketingThis is a market strategy that aims to take thesame brand to several market segments at thesame time but varying the marketing mix foreach segment. It takes into account that eachsegment is unique so that the message andchannel will require adaptation based on pref-erences and norms.

DifferentiationThis is the process of identifying, branding, and communicating the actual and emotionalbenefits that make a product or service uniqueversus competing, but seemingly similar,choices. Differentiation is at the heart ofbranding to simplify choice by providingtangible and intangible benefits to guide the decision-making process.

Notes:

The more modern nations detest each otherthe more meekly they follow each other; for all competition is in its nature only afurious plagiarism.Charles Dickens


DesignAs a verb, design refers to the process of creating and executing a plan for a newproduct, service, or idea. As a noun, it refers to two things: to the final result of theplan (in the form of a model, sketches, blueprints, or other descriptions), or to thefinished, produced product itself. Design in all forms is a powerful method andcomponent of brand building it can differentiate, more effectively communicate,and position a brand in its competitive environment.



Anyone can look for fashion in a boutique or history in a museum. The creative person looks for history in a hardware store and fashion in an airport.Robert Wieder



Differentiator A differentiator is the aspect of a company,product, or service that separates it from thecompetition. It could be a performance differ-ence (facts and figures, for example), or anemotional one (the imagery and associations ofthe company or offering). It was once thoughtthat only one differentiator was required toensure competitive advantage, but currentthinking expresses differentiation as a bundleof multiple differentiators that, when presentedin combination, provide true advantage.

Digital Brand ManagementThis is a response to the complexity and speedrequired to manage truly global brands. In thepast decade, there has been a proliferation ofdigital brand management tools meant tocontrol consistency and distribution of brandassets. These take the form of intranets, appli-cation service providers, and fully outsourcedsystems. Initially, this was simply the automa-tion of traditionally printed brand guidelines,but the tools have grown to encompass imagelibraries, packaging templates, advertisingtemplates, and so on. These systems work bestin widely distributed organizations where manypeople communicate the brand strategy toaudiences. It allows the brand to be controlled,yet also allows it to evolve as it touches themarket. A leading provider of these productsand services is BrandWizard.

Direct MarketingThis is a form of marketing that sendsmessages directly to consumers, usingaddressable media like mail. Direct marketing,therefore, differs from regular advertising inthat its messages arent placed in third-partymedia (like radio, TV, or billboards by theroadside). Direct marketing is attractive tomany marketers because, in many cases, itseffectiveness can be measured directly. Incontrast, measurement of other media mustoften be indirect, since there is no direct

consumer response. While many marketers likethis form of marketing, it is sometimes criticizedfor generating unwanted solicitations, whichare sometimes referred to as junk mail andspam. Direct marketing uses various channels coupons, catalogs, mail, consumerand business magazines, newspapers, tele-phone, and radio to convey an offer that isintended to elicit an almost immediateresponse. Direct marketing is comprised of adefinite offer, all the necessary informationupon which to base a purchase decision, and aresponse mechanism that consumers can usewith limited effort or expense.

Discontinuous New ProductA term often used to describe a new innovation a product that departs significantlyfrom previous products in the same area. Thesenew products are often found in technology,where entirely new markets are created ratherthan just extending existing ones.

Diversion A genuine product is sold to a buyer in onemarket/channel and then resold by the samebuyer into another market/channel, without theconsent or authority of the brand owner, in orderto take advantage of a price arbitrage situation.This definition also applies to parallel trade, graymarket or gray market activities.

Domain Name/AddressThe part of an URL (commonly pronouncedearl) that specifies the source of a website oremail. The domain name in http://www.interbrand.com/services.asp iswww.interbrand.com. Company names are bestto trade under, but product or generic namessuch as brand-effectiveness.com can alsoredirect casual browsers to the main URL. See URL or Uniform Resource Locator

Notes:


Brand Fact:In the 2005 Best Global Brands ranking, the top 10brands were worth a combined US$390 billion.

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80:20 RuleThis is an oft-quoted rule of thumb stating that80 percent of sales (or 80 percent of profits)come from 20 percent of the customers.

End-of-aisle (or End-cap) DisplayThis refers to coveted positions for packagegoods marketers in retail stores. As the namesuggests, these are displays placed at the endsof aisles where they are prominent and veryvisible. End-of-aisle displays generally providedramatic increases in spontaneous purchase ortake-away.

Endorsed Brand A brand that carries the endorsement of asource brand (the parent company), forexample Chips Ahoy! Here, Chips Ahoy!promises a specific taste profile and experi-ence, while Nabisco (the source brand) offersan endorsement of overall quality, heritage, andfood expertise. The source brand is leveragedto communicate value or expertise thatstrengthens the promise of the endorsed brand.

EssenceEssence is a collection of intangible attributesand benefits, the core characteristics thatdefine and differentiate a brand. The easiestway to understand essence is to imagine thatthe brand is a person you are trying todescribe what defines that person, and whatseparates her or him from everyone else.

Every Day Low Pricing (EDLP)This is a retail strategy meant to create consis-tent customer traffic based on low prices. EDLPgrew in importance as Wal-Marts ability tonegotiate low prices from suppliers becameone of their main core business strategies.Short-run pricing strategies such as seasonalor special event sales often confuse and irritateconsumers, while EDLP provides clarity andconsistency in the shopping experience.

Notes:

Companies that enjoy enduring successhave core values and a core purpose thatremain fixed while their business strategiesand practices endlessly adapt to theirchanging world.James Collins


Brand Fact:There are over 886,000 members of the company-sponsored Harley-DavidsonOwners Group. They organizerides, training courses, socialand charity events.


Experiential MappingAn exercise of modeling projected customer interactions that sum their overallexperience when dealing with a brand. It details all possible touch points,frequencies, and situations to ensure that the brand will not disappoint. This is asophisticated process that manages risk and reward while identifying new areas forthe brand to outperform competitive offers.




Exclusion ZoneThe area around an element such as a logo that must remain clear. It is documented in thedesign guidelines with associated rationale. Alsoreferred to as clear space, free space, controlarea, and keep-free zone.

Expectation Expectation is the idea that even before tryinga brand, consumers have already formed anopinion about it. These expectations are theminimum threshold the brand must exceed. If itdoesnt, customers will be disappointed and aptto be vocal to other prospective customers,negatively influencing their purchase decision.

ExperienceThis is when consumers have been exposed tovarious brand attributes. A successful brandexperience happens with exposure to a brandsmost positive aspects, and this can happen in astore, through advertising and websites, orthrough word of mouth. The critical aspect is tohave the experience match or exceed thecustomers expectations based on promisesmade in communications.

Experiential Mapping See page 44

Experiential Marketing An approach that tries to evoke a strongemotional response in potential buyers about aproduct or service. Typical examples might betourism commercials that show beautifulbeaches and dramatic sunsets, or diamondcommunications that suggest romance andeternal love.

ExtensionThis is the act of using an existing (and successful) brand name to help launch a new product or service into a new area orcategory. Since the original brand has strong, positive associations and high levels of awareness, the decision to use it involvesrisk, because if the new venture fails, it maytarnish the original brand.

Notes:

E

Show me a great company and Ill showyou one that has radically changed itselfand is looking forward to the opportunityof doing so again.Lawrence Bossidy


Word of mouth is the best medium of all.Bill Bernbach

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Flanker BrandThis is a product introduced by a company intoa market in which it is already established. Theintent of a flanker brand is to increase overallmarket share in a particular category andaggressively crowd out the competition.

Focus GroupThis is a group of people assembled to discussan issue, idea, or product. Focus groups are astaple of market research, and their successusually depends on the quality and experienceof the facilitator.

Four Ps (Product, Price, Promotion,Place) This is a widely taught concept meant toexplain the vital components of marketing.However, it is now known as oversimplifiedshorthand, because the Four Ps have beenextended to include additional Ps, among thempre- and post-customer service. See Seven Ps

FranchiseA franchise is a legal contractual relationshipbetween a supplier and one or more indepen-dent retailers. The franchisee gains an estab-lished brand name and operating assistance,while the franchiser gains income as well assome control over how the business is run.

Freestanding Brands These are brands that companies use when theywant to maximize the impact of a portfolio ofbrands by leveraging the strength of each onewith little or no connection to a source brand orother (often competing) brands from the samecompany. As examples, Pantene and Pert Plusare freestanding brands from Procter & Gamblethat are in the same shampoo category.

Notes:

Creative thinking may simply mean therealization that there is no particular virtue in doing things the way they have always been done.Rudolph Flesch


Brand Fact:Multi-channel customers spend20 to 30 percent more money,on average, than single-channelones do, according to McKinsey& Company.


Brand Fact:12 percent of companies spend75 percent or more of theirbudgets on customer retention,according to Tivoli Partners andInteractive Marketing &Research.

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GapEvery company develops business strategies forits brands, and every consumer experiencesthese brands individually. A brand gap is thedistance, or difference, between the businessstrategy and the consumer experience. Obvi-ously, companies want that gap to be as smallas possible.

Generic BrandsThese are unbranded products offered byretailers, usually at a lower cost than similarbranded products. Initially, generics were givenminimal packaging, advertising, and promotionsupport but they are now seeing more supportand offering greater competition. Consumershave been educated that the quality of genericsrivals that of their branded cousins, and largernumbers of customers are purchasing generics,regardless of the lack of premium associations.

Generic Name This is a brand name that has become assoc-iated with a product category rather than witha particular brand. Kleenex for tissue has beenwidely noted as the most obvious example ofgeneric naming.

Generic StrategyMichael Porter, from Harvard Business School,developed the theory that there are three basicstrategies for any organization cost leader-ship, differentiation, and focus. Porter initiallyargued that an organization must focus on oneof these to achieve an advantage. Morerecently, however, both anecdotal and empiricalevidence demonstrates that it is a combinationof the three that helps organizations succeed.

Global Branding See page 53

GoodwillAn intangible asset comprising brand value andother assets, such as customer service andemployee morale, that are anticipated to repre-sent higher earning power. The drawback isthat goodwill does not have a generally recog-nized liquidation value and accountingprinciples require that it be written off over aspecific time period.

GradientThe progression of a specific color into thenext complementary color.

Graphic DesignGraphic design is the process of arrangingwords and images to communicate a messageor clarify understanding, and it can appear inalmost every communications medium, fromnewspapers, magazines, and digital, to movies,animation, and packaging. Successful graphicdesign takes into account target audiencesand the message hierarchy meant to beconveyed. Creativity and differentation aresought to stand out amongst competingcommunications and firmly gain awareness inthe market. Graphic design is an invaluableaspect of branding.

Grid SystemsThis refers to the design and structure of infor-mation that should be followed. Also referredto as page layouts, style templates, imagegrids, and templates.

No

the brand glossary

Documents

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brand practitioners

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