Brand Definitions for Business Leaders by Mary Olson

Do you know the value of branding? If not, this is an essential guide for you and your business. __________________

Brand Definitions for Business Leaders

Written and edited by Mary Olson President and CEO Transition Networks Defining, designing and marketing premiere brands Mary.Olson@Transitionet.com 917.656.1856 Transitionet.com MaryOlson.biz

CONTENTS 1.0

2.0 3.0

4.0 5.0 6.0 7.0

8.0

9.0 10.0 11.0

Defining Branding Brand Branding Brand Identity Brand Image Brand Promise Strategic Imagination Branding and Business Basic Components of Branding Graphic Logo Mark Brand Position Brand Positioning Tag (Marketing Tag) Brand Language Brand Story The Graphic Designer's Role in Branding Brand Language - The Writer's Role Brand Identity System The Customer's Influence & Role in Branding Ideal Market Market Position Brand Positioning Brand Relationship What Makes a Brand Valuable? Customer Experience CEM Systems Brand Touch Points Brand Equity/Brand Value Brand Equity Brand Value Resources for Measuring Brand Equity How to Measure Brand Value/Brand Equity How to Write the Value of a Brand Name The Danger of Double-Counting the Value of a Brand Name Value Proposition Return on Relationship (ROR) Branding and Marketing Transition Networks defines, designs, and markets premiere brands. Our primary services include strategic business planning, corporate and personal branding, eCommerce design and development, investor prototypes, and marketing. Our mission is help our clients build online businesses and ensure the brand experience.

2 Â

1.0

Defining Branding, (4-Parts)

1.1 A brand is a name of a product, service, person, or business that is positioned and designed as a visual extension of a mission statement. Brand planning defines the business and its character. The brand is ultimately, the marketplace perception of an organization or individual. It is the combination of identity, meaning and image to everyone who makes a connection. 1.2 Branding is the graphic design, creative development process, and positioning of a name that results in an identity and a customer experience. Some business types are good candidates for building financial value through branding. A company is not a candidate if it's growth is based on competitive pricing only. 1.3

Brand Identity

Personal/professional brand identity is who you are. Product or service brand identity is what it is. Identity includes positioning. 1.4

Brand Image

Brand image is how the brand is viewed by others. Brand image includes all related visual aspects. 1.5

Brand Promise

It is the essence of the brand delivered. It is the commitment to the customer. It is the anchor of the brand. 1.6

Strategic Imagination

An ability to understand and align business goals with creative strategy and expression. Strategic imagination is a powerful attribute for establishing the following" • Branding objectives • Brand equity • Customer relevancy 2.0

Branding and Business

Designing and developing a brand identity that is sustainable and increases business value and equity requires a deep understanding of the business and the ability to communicate the brand visually, verbally and experientially. It's impact is quantifiable. 3.0

Basic Components of Branding, (5 Parts)

3.1 Graphic Logo Mark A logo is a graphic representation or symbol of a company or product name, uniquely designed to evoke ready recognition.

3.2

Brand Position

It is how the brand is perceived in the context of competitive alternatives. It is the clear definition of how an organization or individual will be perceived by those you seek to motivate. 3.3

Brand Positioning Tag (Marketing tag)

Commonly referred to as a marketing tag or tagline. A marketing tag is used to summarize your mission and the products or services you offer. The tag is a positioning word or phrase or slogan that visually conveys the company's promise of its value to its customers. It is always based on what your customer cares about. A marketing tag can be used alone or combined with a graphic logo. Companies use their tag lines on every piece of marketing and communications materials including brand identity systems like business cards, stationery, press releases, and cross channel marketing (website, mobile, social, etc. A marketing tag is a primary element in a total brand identity system. Sample brand positioning taglines: Membership has its privileges The ultimate driving machine

You're in good hands with Allstate Say it with flowers

Corning incorporated: Uncommon knowledge about an extraordinary material 3.4

Brand Language

Brand language is the body of words, phrases and terms that identifies a company, differentiates it from competitors and helps customers experience the brand. Brand language is an optimal component of branding. It reinforces the entirety of the brand identity. 3.5

Brand Story (Brand Storytelling, Story Branding)

A brand story is a tool for articulating the brand positioning by answering the deepest truths about the brand. It can begin with an insightful question that shapes the model and conveys the value. A brand story humanizes the brand and makes it personally relevant and accessible to the stakeholder. The primary benefit of creating a compelling brand story results in a stakeholder's desire to engage. Sample effective brand story: UNREALâ&#x201E;˘. Unjunked candy It started with a kid's question and became a mission. http://getunreal.com/our-story/ 4.0

The Graphic Designer's Role in Branding

A graphic designer's role in branding, including logo design and brand identity systems, cannot be underestimated. Every element must be there for a reason (Logo, family of fonts, selection of photos on a home page.) The designer defines and shapes the visual essence of the brand, resulting in a meaningful, powerful, and effective visual identity for anyone who comes in contact with the brand.

4 Â

The design process has its own unique requirements. It begins with a clear understanding of the individual (personal branding) or company (business branding), continues with a rigorous integration of requirements and objectives, and culminates in the delivery of a strong and influential design and brand. Top tier graphic capabilities provides clear and effective design aimed at the user/customer and performs the critical tasks of communicating your value and selling your message, service, or product. Brand design elicits response and builds brand equity. 5.0

Brand Language - The Writer's Role

Brand language is the copywriting and tone of voice for a brand. It is the verbal extension of graphic brand identity. A writer's words can influence how a brand is perceived by either reinforcing or undermining the brand. Phrases and terms that identify a company differentiate it from competitors and helps customers experience the brand. Brand language is an critical component of branding. It reinforces the entirety of the brand experience. Just like digital graphic design, brand language must be crystal clear and consistent . 6.0

Brand Identity System

The process of creating a brand identity (ID) system demands a combination of investigative strategic thinking, design excellence, astute brand language writing and project management skills. It also requires an extraordinary amount of patience, an obsession with getting it right, and the ability to synthesize large amounts of information to create a consistent set of standards. A Brand ID System or program comprising a discrete identity includes a combination of digital and print formats: Name, logo development (color, visual style, tone of voice, language), marketing positioning tag, website, mobile site, social media templates; Letterhead, business cards, envelopes, labels, presentation folder, packaging and/or signage. 7.0

The Customer's Influence & Role in Branding, (8-Parts)

7.1 Ideal Market An ideal market is a group of customers or participants that the business has decided to aim its marketing efforts and ultimately its services towards.[1] A well-defined market is the first element of a marketing strategy. The market and the marketing mix of variable services, place (distribution), promotion and price are the four elements of a marketing mix strategy that determine the success of a brand in the marketplace. (Ref: Wikipedia) 7.2 Market Position Market positioning is customer need, frame of reference, point of differentiation, reason to believe [in the brand].

5 Â

7.3 Brand Positioning A brand is positioning. It is defined and differentiated in relation to other brands in the mind of the customer. The V7 Network Development Community defines branding as securing a unique position of credibility in the mind of a customer: eBay is the auction brand CNN is the news brand Network Solutions is the domain brand These brands garner more brand equity because they not only claim the customer mindshare, but an entire market segment. 7.4 Brand Relationship A brand is also a relationship where the customer reflects upon him or herself through the experience of using a product or service. 7.5

What Makes a Brand Valuable? Brand success is built upon three critical factors: • Understanding the key values in the mind of your customer • Knowing how to put the customer's values into your product or service • Effectively associating your brand with those values [Ref. Defining Branding, V7 Network, http://www.v7n.com/branding.php]

7.6

Customer Experience

Customer experience is the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. From awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy. It can also be used to mean an individual experience over one transaction; the distinction is usually clear in context. Wikipedia 7.7

CEM Systems

One of the key features of successful CEM implementations is their ability to manage multichannel interactions. Customer experience solutions address the cross-channel (contact center, Internet, self-service, mobile devices, brick and mortar stores), cross-touchpoint (phone, chat, email, Web, in-person), and cross-lifecycle (ordering, fulfillment, billing, support, etc.) nature of the customer experience process. By contrast, CRM solutions tend to offer point solutions for specific customer-facing functions such as, but not limited to, sales force automation, customer analytics, and campaign management. Wikipedia 7.8

Brand Touch Points

Brand touch points are wherever the customer comes into contact with the brand. The goal is for each touch point to reinforce and fulfill your brand promise.

8.0

Brand Equity/Brand Value, (6-Parts)

8.1 Brand Equity is the addition of the brand's attributes including reputation, symbols, associations and names. Then the financial expression of the elements of brand equity is called Brand Value. Brand equity is also a phrase used in the marketing industry to try to describe the financial value of a brand's attributes. 8.2

Brand equity is synonymous with brand value.

The value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products or services with that brand name than from products with a less well known name, as the target market believes that a service with a wellknown name is better than services with less well known names. Some marketing researchers have concluded that brands are one of the most valuable assets a company has, as brand equity is one of the factors that can increase the financial value of a brand to the brand owner. (Wikipedia) 8.3

Resources for Measuring Brand Equity

There are business rankings of every sort, Firtue 100, Alexa Web Traffic Ranking, Facebook and Twitter have real time brand data and rankings. There are rankings for socially good brands such as Brandkarma,com; PSFK Good Brands. Of course there are already rankings for brand financial value: Interbrand; Millward Brown BrandZ; Credit Suisse Great Brands; brand equity: Equitrend; and brand word-of-mouth buzz/promoting: McKinsey; Net Promoter Score -- all of which correlate a brand's score with its bottom line. Add Brand Social Currency's inaugural study about the most important investment companies can make to diagnose build and monitor the long-term health and value of their "brand" assets in this shifting market place, according to Kevin Randal, MIT Sloan, Lightspeed Research. The methodology was developed in conjunction with MIT Sloan statisticians and Lightspeed Research. Brand Social Currency is defined as the extent to which people share the brand and/or information about the brand as part of their everyday social lives at work or at home. It is made up of six key dimensions or "levers"--Utility; Affiliation; Identity; Conversation; Advocacy; and Information. The study surveyed 1000 respondents on more than 60 brands across a dozen categories. Questions for each lever were posed to brand users. Results then rolled up into a composite Social Currency score. [Kevin Randal, Fast Company]

The Marketing Accountability Standards Board (MASB) is not the only organization paying attention: The International Organization for Standardization (ISO) set its own standard for valuations in 2010.

7 Â

8.4

How to Measure Brand Value/Brand Equity

According to Aswath Damodaran, NYU Stern School of Business, From Net Income to Operating Income and Equity to Value, a brand name is easiest to compute for products and services where the only or primary reason for price differences is brand name). The value of a brand name • One of the critiques of valuation is that is fails to consider the value of brand names and other intangibles. • The approaches used by analysts to value brand names are often ad-hoc and may significantly overstate or understate their value. Firms with well known brand names often sell for higher multiples than lesser-known firms. The standard practice of adding on a 'brand name premium', often set arbitrarily, to discounted cash flow value, can lead to erroneous estimates. • One of the benefits of having a well-known and respected brand name is that firms can charge higher prices for the same products, leading to higher profit margins and hence to higher price-sales ratios and firm value. The larger the price premium that a firm can charge, the greater is the value of the brand name. 8.5

How to Write the Value of a Brand Name

Value of brand name ={(V/S)b-(V/S)g }* Sales (V/S)b = Value of Firm/Sales ratio of the firm with the benefit of the brand name (V/S)g = Value of Firm/Sales ratio of the firm with the generic product Illustration : Valuing a brand name: Kelloggs The following is an analysis of brand name value at Kellogg Corporation. The estimates for Kellogg were obtained from 1994 financial statements. The after-tax operating margin for the generic substitute was obtained by looking at a private-brand cereal manufacturer. The expected growth is assumed to be: Expected growth in after-tax operating income = Retention Ratio * Return on Assets Pre-tax Operating Margin After-tax Operating Margin Return on Assets Retention Ratio Expected Growth Length of High Growth Period Cost of Equity E/(D+E) D/(D+E) Value/Sales Ratio

Kellogg's 22.00% 14.08% 32.60% 56.00% 18.26%

Generic Substitute 10.50% 6.72% 15.00% 56.00% 8.40%

13.00% 92.16% 8.50% 3.39

13.00% 92.16% 8.50% 1.10

Value of Kellogg Brand Name = ( 3.39 - 1.10) ($6562 million) = $15,026 million Value of Kellogg as a company = 3.39 ($6562 million) = $22,271 million Approximately 67.70% ($15026/$22271) of the value of the company can be traced to brand name value. ©Transition Networks. All rights reserved.

8.6

The Danger of Double-Counting the Value of a Brand Name

The value of a brand name results in higher growth and higher value for the firm owning it. There are some analyses where the brand name value is double counted. To provide an illustration of how this could happen, assume that Coca Cola is valued using a discounted cashflow model and that the expected growth rate used in the valuation is 29.55%. This value already incorporates the value of the brand name through the use of the high growth rate. If an additional value is now assigned to the brand name, the brand name value is double counted. Ref: NYU Stern School of Business, Aswath Damodaran on Valuation (Wiley) http://pages.stern.nyu.edu/~adamodar/New_Home_Page/lectures/brand.html

9.0

Value Proposition

A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. A value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services. Creating a value proposition is a part of business strategy. Kaplan and Norton say "Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation."[1] Developing a value proposition is based on a review and analysis of the benefits, costs and value that an organization can deliver to its customers, prospective customers, and other constituent groups within and outside the organization. It is also a positioning of value, where Value = Benefits - Cost (cost includes risk)(2) 1. Cindy Barnes; Helen Blake; David Pinder (3 October 2009). Creating & delivering your value proposition: managing customer experience for profit. Kogan Page Publishers. ISBN 978-0-7494-5512-5. Retrieved 21 September 2011. 2. Robert S. Kaplan; David P. Norton (1 February 2004). Strategy maps: converting intangible assets into tangible outcomes. Harvard Business Press. ISBN 978-1-59139-134-0. Retrieved 21 September 2011.

10.0

Return on Relationship (ROR)

"ROR simply put, is the value that is accrued by a person or brand due to nurturing a relationship, whereas ROI is simple dollars and cents", say Ted Rubin and Kathryn Ross, authors of the new book, Return on Relationship™. Rubin and Ross break with the past by creating authentic connection, interaction, and engagement rules. They offer one of the most innovative modifications of ROI rules, thus increasing the value of an ROI model. Adapt ROR to measure your brand equity. Collaborate with your CFO to modify your company's ROI and revise financial worksheets with ROR. 11.0 Branding and Marketing Branding is the foundation of all marketing communications programs. Marketing strategies leverage branding by communicating and promoting the value of a product or service to customers.

Mary Olson President and CEO Transition Networks LLC Transitionet.com Mary.Olson@Transitionet.com MaryOlson.biz/blog 917.656.1845 Transition Networks defines, designs, and markets premiere brands. Our primary services include strategic business planning, corporate and personal branding, eCommerce design and development, investor prototypes, and marketing. 2013

10 Â