Building Value-Based Branding Strategies

Building value-based branding strategies

PETER DOYLE

Warwick Business School, University of Warwick, Coventry CV4 7AL, UK

Marketing professionals oversimplify the problem of building successful brands. As

companies such as Xerox and Procter & Gamble have learned, brands can have strong

consumer franchises yet still not generate value for investors. Brands that create shareholder

value have to meet four requirements: (1) a strong consumer proposition, (2) be

effectively integrated with the Ž rm’s other value-creating assets, (3) be positioned in a

sufŽ ciently attractive market and (4) be managed in order to maximize the value of the

brand’s long-term cash Џ ow. This paper shows that, when managers attend to all four

determinants, they can enhance brand values and develop more effective marketing

strategies.

KEYWORDS: Brands; shareholder value analysis; marketing; strategy

INTRODUCTION

In recent years many of the companies most renowned for their branding and marketing

skills have been seen to stumble on the stock market. Coca-Cola, Procter & Gamble, Marks &

Spencer, Gillette, Xerox and British Airways have all jettisoned their chief executives in the face

of sliding share prices. Brands have not been the promised panacea in today’s highly competitive

environment. In contrast, many of the companies that have dramatically succeeded in creating

value for investors, such as Dell, Vodafone and General Electric, have not been noted for their

branding investments.

Many marketing-orientated companies such as Procter & Gamble and Gillette have oversimpli

Ž ed how brands add value to the performance of a business. Marketing has overwhelmingly

focused