By Bob Grant

Integrated marketing expert, Professor Don E. Schultz, in a recent article in Marketing Management magazine describes quite accurately the importance of the value of brand as an asset.  He points out that the value of the brand makes up 48% of Coca-Cola’s enterprise value and 37% of that of Google. However, the point of his article is that marketing and brand managers do not understand that relationship which makes it difficult for them to get the support of financial officers to back brand and marketing initiatives. From my experience it is just the opposite.

While I don’t doubt for a second that big brand companies like Coca-Cola, Google, IBM and Apple  senior financial management totally understand the value of brand and I imagine that they are in sync with their marketing and brand managers. However, in smaller and less brand visible companies, it is my experience that the marketing and brand managers understand the financial benefits of the company brand and struggle to convince the financial managers to support brand initiatives.

Mr. Schultz does point out that short-term fiscal year accounting systems work against support for long-term brand funding. This may be why financial managers of small to medium size companies find it difficult to justify expenditures on brand development.

I would be interested in hearing from others about who has the better understanding of the company’s brand value.  Is it the marketing and brand managers, or is it financial managers?

by Bob Grant

Facing poor sales in September, 2010 The Gap decided to make a logo change, as if an updated logo was going to turnaround slumping sales. The new logo immediately received negative reaction from customers, publications and independent bloggers. The Gap quickly reverted back to their old logo.

According to the April 8, issue of the NY Times, in March with Gap’s North American sales of same store sales down 9% The Gap recently announced a reassessment of its brand. According to John Seifert of Olgivy, the Gap, “sort of lost its story and lost its focus on what made it different and special.” Seth Farman, Gap’s chief global marketing officer, is reported to have said, the Gap “needs to set a clear point of view for the brand.”

It was at first surprising that a large corporation like the Gap would think that a logo change would change the brand of the company. Logos, being a visible representation of a company, are often thought of as the company brand. The very definition of a brand goes back to the wild west days when cattle ranchers “branded” their cattle so one ranch’s cattle could be differentiated from another ranch. Today, well established logos do connect us immediately to the company, think Nike, IBM, and Apple. However, the logo is just a recognizable reminder of the company it represents, but the true brand of a company is what the company itself represents in the minds of it customers, potential customers, and its employees.

Developing one’s brand is not an easy process. A company needs to evaluate who they are as a company and who they want to be as a company. It’s important to ask stakeholders and employees inside the company about their perceptions of the company. It is equally important to uncover what customers and potential customers think about the company and what the company is promising to them. Once the research is complete, how do you synthesize that research into brand messaging and positioning statements that will resonate with audiences inside the company and outside the company. Then comes the awesome task of turning that brand into reality by altering the way the company does business and getting everyone inside the company on board to back up the company’s new brand.

The Gap is on the right track and it will be interesting for us brand strategist and marketers to see how they will improve their brand and increase their sales.