How Are Our Brands Doing?

by Susan Nelson , May 14, 2009

Already this recession seems to go on and on. But almost worse, and certainly more annoying than the real financial damage to so many, is the cacophony of punditry on what it means for the brands of the United States.

Some are saying that this crisis demands focus on immediate product selling and brand building, and that maintenance needs to be on temporary hold. That may be true for companies on verge of collapse (and you know who you are), but that sort of thinking creates a paradox. While it is critical to sell product today, doing so by damaging impressions of the brand can shorten the life span.

So who is hanging in there? Who is succeeding at growing its brand and who is already showing slippage? Who will emerge stronger, and who is in danger of drowning?

To answer these questions we tapped into the BrandAsset® Valuator (BAV), our powerful brand research tool. BAV is based on the knowledge that healthy brands share some fundamental traits, and that taken together, these traits build strong brands that maintain longevity. We started collecting data in 1993 and have done so yearly ever since. As a member of the BAV consortium, we are fortunate to have early 2009 data. This allows us to compare today (considered by many to be the bottom of the recessionary economy) with the last robust time frame - 2007.

The 20 strongest brands overall for 2007 are shown in the chart below. On the whole, these are brands that are part of our everyday lives; they are helpful, mainstream/not niche-y, and importantly stand alone both in their categories and in our culture. It would be hard to imagine life without so many of these brands.

Strongest brands in 2007 and the change from '07 to Q1 '09:

1. Disney -14%
2. Hallmark -18%
3. Band-Aid 2%
4. The Discovery Channel -7%
5. Coca-Cola 19%
6. Craftsman 16%
7. Hershey's - 32%
8. Microsoft -5%
9. Walmart -19%
10. Kraft Foods 4%
11. Sony -2%
12. Crayola -6%
13. Microsoft Windows 9%
14. Johnson & Johnson 25%
15. Tylenol -17%
16. Kodak -11%
17. Tupperware 0%
18. Levi's -21%
19. Rubbermaid 0%
20. Nike -7%

Nevertheless, by the end of the first quarter of 2009, 12 of these Top 20 have declined on their overall brand health scores, and seven of them have declined by more than 10 percent. There is no clear pattern of which categories they belong to and none of the Top 20 are in the most troubled segments (automotive, financial services, credit cards, insurance). Disturbingly, this list shows that some of our most iconic brands are weakening while brand health scores across all 3,000 BAV brands grew by an average of 15 percent. Clearly, American consumers aren't rejecting the concept of brands and branding, but rather some (certainly not all) of our biggest brands.

So what's the difference between gainers and losers in the Top 20? In order to diagnose what's going on, we assessed changes on the four pillars that constitute brand health in BAV: differentiation, relevance, esteem, and knowledge. Taking away the jargon we think of these four components as the degree to which a brand is unique and special (differentiation); how much people want to use or purchase products or services (relevance); the degree to which they love and respect a brand (esteem); and how well a brand is known and understood (knowledge).

Scores for the top brands showing the steepest declines dropped on both measures that predict future health: brand strength (relevance and differentiation) and brand stature (esteem and knowledge). Conversely, our growing brands in the Top 20 improved their scores on all these metrics.

What this tells us, is that in these rough times maintaining a healthy brand requires powering on all cylinders, not just picking and choosing based on what you can afford or believe will help in the short term. Continuing to improve differentiation through innovation and being seen as unique and special. Growing relevance by offering products and services at a price point that makes people want to take you home.

Maintaining esteem by being likeable, reliable, and being perceived as a quality leader. And, continuing to grow knowledge by staying visible and helping consumers understand who you are and what you stand for. A lot to think about, yes. Sounds daunting, yes. But may be essential to stand tall in 2010, when this is finally, hopefully, over.

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brand marketing, commentary, research

1 comment about "How Are Our Brands Doing? ".

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Mickey Lonchar from Quisenberry, May 15, 2009 at 2:53 p.m.
I realize those of us in the brand development biz tend to get all tingly when it comes to metrics that attempt to reflect the "power" of a brand relative to others. If we're honest, however, we have to admit that many of the conclusions we draw, while making great meeting fodder, have little to do with what's happening in the real world. Is Nike really lesser-known than a year ago? Is Coke "liked" by millions more people this year than last? Doubtful on both accounts.
Awareness, intrigue, preference and other metrics work as stand-alone measurements, and arguably tell a more powerful story than trying to connect the dots in a "BAV continuum."
I would also take issue with the statement that the high ground in brand enhancement is "helping your customers understand who you are and what you stand for." It's more by demonstrating that you understand who your customers are and by finding ways to make yourself irreplaceable to them.
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SUSAN NELSON,