The Impact of Consumer-Brand Relationships on Market value
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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. 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
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The Impact of Consumer-Brand Relationships on Market value
- 1. The Impact of Consumer-Brand Relationships on Market Value May 2013
- 2. 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
- 3. 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)
- 4. 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
- 5. 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
- 6. 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.
- 7. 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
- 8. 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 LinkedIn Discover Lowes Target Goldman Sachs MasterCard 3M Facebook American Express Home Depot CitibankBank of America Visa BP Pfizer JP Morgan Chase WellsFargo Johnson & Johnson Google 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 PredictedMarketCapitalisation($000) Actual Market Capitalisation ($ 000)
- 9. 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
- 10. 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
- 11. 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
- 12. 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
- 13. The Reinforcement relationship: superior brand performance and high satisfaction makes me feel and look better and smarter to others BrandPanorama LLC YouTubeLinkedIN Google Facebook Apple Red Robin Olive GardenFriendly'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 Self-Esteem
- 14. The Identification relationship: I am strongly attached to the brand; it communicates to others who I am BrandPanorama LLC YouTube LinkedIN Google Facebook Apple Red Robin Olive GardenFriendly's Outback SteakhouseDenny'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.comWalMart Target Sears Lowes JC Penney Home Depot Best Buy Mitt Romney Barack Obama Pfizer Johnson & JohnsonGeneral Electric Exxon Mobil Chevron BP 3M PanteneL'OrealHerbal EssencesHead & 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 Self-Expression
- 15. The Role Model relationship: the brand’s charisma makes it a leader and inspires me to be one also BrandPanorama LLC John FriedaClairol Dove Hair Care Head & ShouldersHerbal EssencesL'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 AmericaCitibank Goldman Sachs JP Morgan Chase Wells Fargo Applebees Denny's Outback Steakhouse Friendly's Olive GardenRed Robin Apple Facebook Google LinkedIN 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 Mentoring
- 16. 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'OrealPantene 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.comlowes.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 Facebook Google LinkedIN 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 ThereforMe
- 17. 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
- 18. 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 lf-E s te e m Performance/Satisfaction
- 19. 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 Self-Expression
- 20. 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 Mentoring
- 21. 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 ThereforMe
- 22. 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 Pleasure
- 23. 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
- 24. 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
- 25. Different brand relationships predominate at different stages across the arc of franchise development BrandPanorama LLC 48.9 33.0 30.4 23.7 21.3 27.9 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 20.3 20.5 17.6 20.7 17.6 19.2 17.7 23.2 14.7 11.8 16.5 18.8 20.8 20.2 15.2 14.1 11.4 14.5 16.2 17.7 13.2 19.0 26.3 21.7 26.0 24.9 20.5 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
- 26. 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
- 27. 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 RelevantExperiences 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 RelevantExperiences Brand A Brand B
- 28. 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
- 29. 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
- 30. 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
- 31. 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
- 32. 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
- 33. 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
- 34. 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
- 35. Our difference: new approaches, improved results BrandPanorama LLC
- 36. 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.
- 37. BrandPanorama FROM INSIGHT TO OUTLOOK Contact Mark Stapylton (845) 702-2045 mark.stapylton@brandpanorama.com www.brandpanorama.com @brandpanorama