The Impact of Consumer-Brand Relationships on Market value
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Transcript of The Impact of Consumer-Brand Relationships on Market value
The Impact of Consumer-Brand Relationships on Market Value
May 2013
BrandPanorama Research & Consulting LLC
• BrandPanorama LLC helps clients choose the marketing and communications strategies that will build brand equity, grow the customer franchise, drive marketing power and increase financial return.
• In today’s digitally connected world the relationships between consumers, brands and the bottom line are constantly changing. Marketers are creating meaningful and personally relevant brand experiences and engaging with consumers through every available touchpoint, not just building awareness through mass media. Consumers are increasingly motivated to participate with brands through co-creation and co-ownership.
• We are a full-service, independent custom market research firm specializing in research-based consulting. We develop, model, measure and manage effective brand equity, customer equity and marketing strategies. Our expertise in understanding consumer decision-making helps clients develop strategies that resonate with and engage customers, delivering superior growth, asset value and profitability.
BrandPanorama LLC
BrandPanorama’s distinctive approach is in part a response to the Consumer-Brand Paradigm shift
BrandPanorama LLC
Creating brand awareness, relevance, experience and demand
Outbound, inbound, and surround
Any and every consumer touchpoint
Relationship, and Co-ownership
Engagement and Participation
Age of the Mass Market (20th Century)
Creating brand awareness
One-way communication
Major mass media
Interrupt and Repeat model
Reach
Age of Digital (21st Century)
Unlocking the full market value of your brand: Consumer-Brand Relationships are the key
• Relationships connect the Brand to the Customer. Decoding these relationships is key to building brand equity, growing the customer franchise, driving marketing power and increasing financial return.
BrandPanorama LLC
The BrandPanorama Brand Model gives prominence to “why I am attracted the brand” and “how it makes me feel”
BrandPanorama LLC
Attachment
• Brand Emotion and Fit with Self-Image
Meaning
• Personal Relevance and Brand Experiences
Attraction
• Positive Differentiation and Brand Charisma
Salience
• Brand Registration and Familiarity
Our research shows the development of Brand Equity and the health of Customer Equity are highly related
BrandPanorama LLC
Correlations among brand users (maintain; vulnerable) and non-users (grow; unavailable). Respondent level data across 48 brands, 9 categories, 1500 respondents.
We find certain Consumer-Brand Relationships have a greater than expected impact on market value
• Brand Relationships and Customer Equity jointly explain about 40% of the variance of Market Value Multiple (market capitalization/sales).
• Brand Relationships are about 90% as important as Customer Equity
• Brand Relationships account for about one-quarter of the variance of same-period customer equity development.
• Brand Relationships connect the Brand to the Customer. They shape and are shaped by customer segmentation, messaging and selection of marketing channels.
• Specific types and styles of Consumer-Brand Relationship are important at each stage of customer equity development and maintenance:
• Attracting new users
• Promoting trial and adoption
• Increasing purchasing frequency
• Building loyalty, and
• Winning back lapsed users
BrandPanorama LLC
Measuring the impact of Consumer-Brand Relationships on Market Value
• Brand Relationships and a Stable Franchise size (Customer Equity) each have significant impact on market capitalization multiple:
• Actual vs predicted model fit with MV/S:
BrandPanorama LLC
Market Cap/Sales
Brand Relationships
Customer Equity
.48 .43
R2=.42
Best Buy
Discover
Lowes
TargetGoldman Sachs
MasterCard3M
American Express
Home Depot
CitibankBank of America
Visa
BP
Pfizer
JP Morgan Chase
Wells Fargo
Johnson & JohnsonGoogle
WalMart
Chevron
General Electric
ExxonMobil
Apple
.00
50000.00
100000.00
150000.00
200000.00
250000.00
300000.00
350000.00
400000.00
450000.00
0 100000 200000 300000 400000 500000 600000
Pre
dic
ted
Mar
ket
Cap
ital
isat
ion
($
00
0)
Actual Market Capitalisation ($ 000)
How the brand is positioned to the consumer: Brand Perceptions (personality, imagery, attributes)
• Brand Perception factors across 48 brands and 9 categories:
BrandPanorama LLC
Responsible & Reputable
Relaxed & Stylish
Charismatic Positively Differentiated
Smart
Prestigious
Visionary
High Quality
Helpful
Socially Responsible
Trustworthy
Caring
Sensible
Fun
Cool
Easy
Friendly
Stylish
Different
Dynamic
Excitingly innovative
Leader
Progressive
Distinctive
Unique
Functionality Emotional Values What You See is What You Get
Performs well
Gives satisfaction
Love
Fit with Self-Image
Open and transparent
Authentic
How the consumer experiences the brand: Brand Experiences are powerful elements of positioning and creative strategy
• Many brand strategies focus on the brand’s promise to the customer but ignore how the customer experiences or relates to the brand. Brand Experience is therefore a source of competitive positioning advantage as well as being inherently insightful.
• BrandPanorama’s validated proprietary Brand Experience segmentation can be used to identify the predominant styles of relationship for any brand. This is invaluable for messaging and tone of marketing communications:
BrandPanorama LLC
Self-Esteem Self-Expression Mentoring There For Me Pleasure
Makes me look good to others
Makes me feel good about myself
Simplifies my life
Helps me to express myself
Frees me to be myself
Challenges me to think differently
Teaches me
Inspires me
Shares my values
Appreciates my business
Is recommended by people I care about
Responds to my needs
Has my interests at heart
Brings back good memories
Provides a little treat for me
Excites me
BrandPanorama defines a Consumer-Brand Relationship as the co-occurrence of a Brand Perception and a relevant Brand Experience
• These 5 “power relationships” styles have emergent or superadditive properties i.e. the combination of the two components is greater than the sum of their parts .
BrandPanorama LLC
Brand Experiences
Brand Perceptions
Self-Esteem Self-Expression Mentoring There For Me Pleasure
Performance/ Satisfaction
Reinforcement
Emotional Attachment
Identification
Brand Charisma
Role Model
Positive Differentiation
Self-Differentiating
Relaxed & Stylish
Entertaining
BrandPanorama’s “Power Relationships”
• Reinforcement Superior brand performance and high satisfaction
makes me feel and look better and smarter to others
• Identification I am strongly attached to the brand; it communicates to
others who I am
• Role Model The brand’s charisma makes it a leader and helps me be one also
• Self-Differentiating The brand’s difference includes me and makes me feel different too
• Entertaining Just for the sheer fun of it.
BrandPanorama LLC
The Reinforcement relationship: superior brand performance and high satisfaction makes me feel and look better and smarter to others
BrandPanorama LLC
YouTube LinkedIN Google
Facebook Apple
Red Robin
Olive Garden Friendly's Outback Steakhouse
Denny's
Applebees
Wells Fargo JP Morgan Chase
Goldman Sachs
Citibank Bank of America
Visa
MasterCard
Discover
American Express walmart.com lowes.com
jcpenney.com
homedepot.com
amazon.com WalMart
Target
Sears Lowes
JC Penney
Home Depot
Best Buy
Mitt Romney
Barack Obama Pfizer
Johnson & Johnson
General Electric
Exxon Mobil
Chevron
BP 3M
Pantene L'Oreal
Herbal Essences Head & Shoulders Dove Hair Care
Clairol
John Frieda
Digital
Casual Dining Banks
Credit Cards etail
Mass Market Retail
Presidential Candidates Gas
Corporate (excl gas)
Haircare
0
0.05
0.1
0.15
0.2
0.25
0.3
3 3.5 4 4.5 5 5.5 6 Performance/Satisfaction
Se
lf-E
ste
em
The Identification relationship: I am strongly attached to the brand; it communicates to others who I am
BrandPanorama LLC
YouTube
Apple
Red Robin
Olive Garden Friendly's Outback Steakhouse Denny's
Applebees
Wells Fargo JP Morgan Chase
Goldman Sachs
Citibank Bank of America
Visa
MasterCard
Discover American Express
walmart.com
lowes.com jcpenney.com homedepot.com
amazon.com WalMart
Target
Sears
Lowes
JC Penney
Home Depot
Best Buy
Mitt Romney
Barack Obama
Pfizer
Johnson & Johnson General Electric
Exxon Mobil Chevron
BP
3M
Pantene L'Oreal Herbal Essences Head & Shoulders
Dove Hair Care
Clairol
John Frieda
Digital
Casual Dining
Banks
Credit Cards
etail Mass Market Retail
Presidential Candidates
Gas
Corporate (excl gas)
Haircare
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
2.75 3.25 3.75 4.25 4.75 5.25 5.75 Emotional Attachment
Se
lf-E
xp
res
sio
n
The Role Model relationship: the brand’s charisma makes it a leader and inspires me to be one also
BrandPanorama LLC
John Frieda Clairol Dove Hair Care
Head & Shoulders Herbal Essences L'Oreal Pantene
3M
BP
Chevron Exxon Mobil
General Electric
Johnson & Johnson
Pfizer
Barack Obama
Mitt Romney Best Buy
Home Depot
JC Penney
Lowes
Sears
Target
WalMart
amazon.com
homedepot.com
jcpenney.com
lowes.com
walmart.com
American Express Discover
MasterCard
Visa
Bank of America Citibank
Goldman Sachs
JP Morgan Chase Wells Fargo
Applebees
Denny's
Outback Steakhouse Friendly's
Olive Garden Red Robin
Apple
YouTube Digital
Casual Dining
Banks
Credit Cards
etail
Mass Market Retail
Presidential Candidates
Gas
Corporate (excl gas)
Haircare
0
0.05
0.1
0.15
0.2
0.25
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5
Brand Charisma
Men
tori
ng
The Self-Differentiation relationship: the brand’s difference includes me and makes me feel different too
BrandPanorama LLC
John Frieda
Clairol
Dove Hair Care Head & Shoulders
Herbal Essences L'Oreal Pantene
3M
BP
Chevron Exxon Mobil
General Electric
Johnson & Johnson
Pfizer
Barack Obama
Mitt Romney
Best Buy
Home Depot
JC Penney
Lowes
Sears
Target
WalMart
amazon.com
homedepot.com jcpenney.com lowes.com
walmart.com
American Express Discover
MasterCard
Visa
Bank of America
Citibank
Goldman Sachs
JP Morgan Chase
Wells Fargo
Applebees
Denny's
Outback Steakhouse
Friendly's
Olive Garden
Red Robin
Apple
YouTube
Digital
Casual Dining
Banks
Credit Cards
etail
Mass Market Retail
Presidential Candidates
Gas
Corporate (excl gas)
Haircare
0.05
0.1
0.15
0.2
0.25
0.3
0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 Positive Differentiation
Th
ere
fo
r M
e
Identification and Reinforcement are the most dominant power relationship styles across all brands and categories
BrandPanorama LLC
6.4% 9.0%
14.8%
32.8%
37.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Entertaining
Role Model
Self Differentiating
Reinforcement
Identification
Reinforcement: Self-Esteem builds first with trial; Performance and Satisfaction lag but build preference among users
BrandPanorama LLC
never used unlikely to use
never used neither likely nor unlikely
never used likely to use
infrequent and occasional users one of several
regular users one of several
infrequent and occasional users one I prefer
regular users one I prefer
- 0.5
- 0.4
- 0.3
- 0.2
- 0.1
0
0.1
0.2
0.3
0.4
0.5
- 0.6 - 0.4 - 0.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4
S e l f - E s t e e m
Performance/Satisfaction
Identification: developing the franchise requires growing both Emotional Attachment and the experience of Self-Expression at the same time
BrandPanorama LLC
never used unlikely to use
never used neither likely nor unlikely
never used likely to use
infrequent and occasional users one of several
regular users one of several
infrequent and occasional users one I prefer
regular users one I prefer
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
-0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4
Emotional Attachment
Se
lf-E
xp
res
sio
n
Role Model: movement up the franchise development funnel requires growing brand charisma and the experience of mentoring at the same time
BrandPanorama LLC
never used
unlikely to use
never used neither
likely nor unlikely
never used likely to use
infrequent and occasional users one of several
regular users one of several
infrequent and occasional users one I prefer
regular users one I prefer
-0.5
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
-0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1
Brand Charisma
Men
tori
ng
Self-Differentiation: growth in purchase intent requires strong differentiation; preference requires both differntiation and mentoring
BrandPanorama LLC
never used unlikely to use
never used neither likely nor unlikely
never used likely to use
infrequent and occasional users one of several
regular users one of several
infrequent and occasional users one I prefer
regular users one I prefer
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
-0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5
Positive Differentiation
Th
ere
fo
r M
e
Entertaining: movement up the franchise development funnel requires communicating fun and experiencing pleasure at the same time
BrandPanorama LLC
never used unlikely to use
never used neither
likely nor unlikely
never used likely to use
infrequent and occasional users one of several
regular users one of several
infrequent and occasional users one I prefer
regular users one I prefer
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
-0.6 -0.4 -0.2 0 0.2 0.4 0.6
Relaxed & Stylish
Ple
asu
re
Power Relationship styles among brand users vary dramatically across (and within) categories
BrandPanorama LLC
40.7
25.6
31.7
42.1
20.8 20.6
27.7 25.2
16.4 16.9
26.0
14.5
17.7
13.7
3.8
21.9 24.0
29.3
17.2
8.8
19.9
17.3
13.0
30.6 27.9 26.6
18.2 18.3
18.3
24.3
6.4
26.8
19.8
12.7
16.3 16.3 15.5
13.7 15.2
15.5
21.5
23.8
17.1 16.4
19.1
9.8 10.4 12.1
25.3 21.9
9.2 11.8
44.6
19.3 20.6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Entertaining
Self - Differentiating
Role Model
Identification
Reinforcement
Brands within a category (e.g. haircare) may have very different levels of franchise development
BrandPanorama LLC
33.8
22.8
6.4 10.5 13.0
20.3
10.7
10.5
6.1
3.1
2.6
4.9
5.6
4.8
4.5
2.5
1.8
2.4
1.9
2.9
2.5
2.6
3.6
2.5
3.9
2.7
2.7
5.0
21.2
30.3
32.0 25.6
34.6
32.4
29.3
3.9
5.4
12.7
7.5
6.4
5.0
8.3
6.0
4.6
5.7
7.7
6.6
6.9
7.6
7.1
5.9
16.6
17.0
10.1
10.5
16.1
2.4
3.6 4.3
4.3 4.3
2.7 2.9
3.7
6.3 3.7
6.1 6.2
5.6 4.3
3.7 7.3 7.4
11.4 8.2
3.8 7.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
John Frieda Clairol Dove Hair Care
Head & Shoulders
Herbal Essences
L'Oreal Pantene
lapsed user unlikely to use
lapsed user neither likely nor unlikely
infrequent users only if no alternative
occasional and regular users only if no alternative
regular users one I prefer
infrequent and occasional users one I prefer
regular users one of several
infrequent and occasional users one of several
lapsed user likely to use
never used likely to use
never used neither likely nor unlikely
never used unlikely to use
Different brand relationships predominate at different stages across the arc of franchise development
BrandPanorama LLC
48.9
33.0 30.4
23.7 21.327.9 27.0 26.7
34.6
25.6 27.3
42.2
2.9
4.4 7.0
9.2 13.2
18.9 21.8
29.8 15.2
8.4 7.8
3.5
17.4
19.7 22.2
20.320.5
17.6
20.7
17.6
19.2
17.7
23.2
14.7
11.8
16.5
18.8
20.820.2
15.2
14.111.4
14.5
16.2
17.7 13.2
19.0
26.321.7
26.0 24.920.5
16.4 14.5 16.5
32.1
24.2 26.4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Entertaining
Self-Differentiation
Role Model
Identification
Reinforcement
Example: a Consumer-Brand Relationship diagnostic footprint
BrandPanorama LLC
Brand Experiences
Brand Perceptions
Brand Perc eptions& Brand Experiences are in sync. They synergize each other to create a
strong Consumer-Brand Relationship
The Brand has strong perceptual equities, but
customers’ experiences do not match up to expectations. The
brand needs to stop “talking at” the customer and start
engaging
Brand Experiences are positive, but customers don’t know what the brand stands for. Brand communication needs sharpening in order to build a strong relationship
Case Study: Relationship Footprints of two competing big-box retailers
BrandPanorama LLC
Reinforcement
Identification
Role Model
Self-Differentiating
Entertaining
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
-0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2
Brand Positioning
Rele
van
t E
xp
eri
en
ces
Reinforcement
Identification
Role Model Self-Differentiating
Entertaining
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
-0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2
Brand Positioning
Rele
van
t E
xp
eri
en
ces
Brand A Brand B
In Summary
• C-Suite executives, corporate researchers and their agencies recognize that we are no longer driving on a one-way street. We have always known how important it is to manage both brand equity and customer equity. What’s different today is that the full power of marketing will come from understanding and managing them jointly.
• Our new research has clear implications for strategy and creative. It shows that personally relevant experiences with a brand -- the specific experiences that are really meaningful to consumers -- are highly correlated with brand usage and preference, and even more so with growing the customer base: acquiring new customers and winning back lapsed customers.
• Now more than ever, growing and sustaining strong brands requires insight into the relationships between brands and consumers, as well as understanding the rational and emotional drivers of consumer choice.
• At BrandPanorama, we help clients unlock the full value of their brands by understanding how brand equity builds customer equity and how we can forge and sustain these dynamic relationships between brands and consumers.
BrandPanorama LLC
About BrandPanorama Research & Consulting
• BrandPanorama is a custom market research and consumer insights firm offering research services and research-based consulting. We help clients develop branding, communications and marketing strategies that will build brand equity, grow customer equity, drive marketing power and maximize financial return. Our goal is to provide senior-level expertise and deliver actionable business-focused insights.
• Creating and growing strong brands requires a keen understanding of the rational and emotional drivers of consumer choice, as well as insight into the relationships between a brand and its customer. Our expertise in understanding consumer decision-making and consumer-brand relationships helps our clients develop successful strategies.
• BrandPanorama specializes in brand equity and customer equity research. In particular: – Brand Strategy
– Brand Performance
– Customer Strategy and Loyalty
– Marketing Strategy
BrandPanorama LLC
BrandPanorama’s Services
BrandPanorama LLC
Research-based Consulting and full-service custom research on brand strategy and performance, customer strategy, and marketing strategy
Project Management Services Expert support and advising for project design and management, special projects, analysis and reporting, or trouble-shooting, without adding to your headcount
Creative Research Visualization for high-impact reports and presentations. Custom data visualizations, infographics, explanatory diagrams and brand narratives that facilitate internal and external communication and promote organizational alignment
BrandPanorama’s Solutions
BrandPanorama LLC
Brand Strategy • Brand Equity Assessment • Brand Essence, Promise and Story • Value Proposition • Brand Positioning • Brand Architecture • Brand Portfolio and Extension • Brand Communications Strategy
Development • Employee Alignment • Reputation Management Brand Performance • Brand Equity Measurement • Brand Monitoring and Tracking • Brand Performance Optimization Modeling • Brand Metrics • Financial Return on Brand Investment • Brand Valuation
Customer Strategy and Loyalty • Customer Equity Measurement • Consumer-Brand Relationship Assessment • Customer Acquisition, Retention and Win-back • Customer Experience and Touchpoints • Consumer Journey • Employee Engagement and Alignment
Marketing Strategy • Opportunity Space Assessment • Market Description, Structure and Sizing • Customer Segmentation, Targeting and Profiling • Consumer Insights • Product and Service Innovation
BrandPanorama’s Approaches
BrandPanorama LLC
• BrandPanorama’s research and consulting services are high-quality and affordably priced. Our low cost base, agility and flexibility, ability to scale, and global network of associates represent meaningful value and a competitive advantage for our clients.
• Our research-based consulting makes a measurable difference to your brand, customer or marketing strategy. We have the experience and expertise to use the right approaches and tools for each engagement.
Evaluative (quantitative) Research
• Online surveys
• Telephone surveys
• Social media monitoring
• Marketing analytics
• Modeling
Generative (qualitative) Research
• Focus groups
• In-person interviews
• Online communities
• Online video groups
• Ethnographies
• Laddering
Listening & Discovery
• Fact-finding Brand Scans
• Immersive Branding
Audits
• Alignment & Consensus-
building Workshops
Visualization
• Research visualization
• Visualizing brand vision
& strategy
• Creative expression
• Brand stories/narratives
BrandPanorama’s Experience
BrandPanorama LLC
Industries Served
• Automotive
• Banking/Finance
• Business services
• Casual dining
• Consumer services
• Durable goods
• Economic development
• Education
• Entertainment
• Hospitality
• Insurance
• Packaged goods
• Retail
• Technology/Telecom
• Transportation
• Travel/Tourism
Your Process is Our Process
• Our approach is consultative and very collaborative. We tailor each engagement with our clients’ needs and goals foremost in our minds. Our experience tells us that this is the most helpful, useful, approachable route. It puts you in the driver’s seat.
BrandPanorama LLC
Understand Business Goals
Build Consensus
Implement Research Program
Align Enterprise
Measure and Manage
Our difference: new approaches, improved results
BrandPanorama LLC
Mark Stapylton
BrandPanorama LLC
BrandPanorama is led by Mark Stapylton, a customer insight and brand strategy specialist with deep global brand experience. He has led research practices for global research firms such as Hall & Partners, Harris Interactive, Wirthlin Worldwide, Knowledge Networks and Research International, and was a co-developer of BrandAsset Valuator at Young & Rubicam. Among other adventures, he has explored market opportunities for American beer brands in Eastern Europe, American motorcycle brands in China, and American beef in Japan.
BrandPanorama FROM INSIGHT TO OUTLOOK
Contact
Mark Stapylton (845) 702-2045
www.brandpanorama.com
@brandpanorama