This is one of the three books that I permanently have at grabbing distance on my desk (together with ‘How to Plan Advertising’ by Alan Cooper and  Buddy Rich’s ‘Modern Interpretation of Snare Drum Rudiments’).  Whilst I have to admit I am more often drawn to the latter, the Business of Brands has proven to be an invaluable reference to dip into occasionally over the past couple of years.

What I like about this book is that it very succinctly articulates the business value of strong brands; bringing together a wide range of analyses, case studies and the wisdom of industry luminaries to make a compelling case for investing in a brand. Useful ammunition in the current economic climate – and actually quite motivating too if you happen to be in the business of brands and ever find yourself wondering if all the pain is worth it!

As advertising folk, I think it’s extremely important that we understand and stay focussed on the various ways that our work helps to create value in the context of brand-building, as it ultimately leads to more effective work. The Business of Brands offers an easily digestible and well considered view on this, with a healthy dollop of realism: “Brands are not a cure for cancer, and they won’t reverse global warming…For many years the hyperbole surrounding brands has alienated the more hard-headed and financially astute…Now this is changing: there’s a growing consensus that brand development is a priority for modern business…A brand can create a powerful sense of purpose - rallying not only customers, but also employees, suppliers and shareholders. When all of these stakeholders are aligned, that’s when the value-making really begins - and this is the real value of brands.”

The book handily provides a “Six Minute Read”. This is my ”Three Minute Read” version, in case you really don’t have time!

Part 1: Brands and Business

5 themes essential to understanding brands:

• A brand enhances the value of a product or service beyond its functional purpose - thereby supporting volume and price.
• A brand is a link between an organisation and its stakeholders, providing a badge of continuity and trust.
• A brand is the result of behaviour - everything an organisation does has the potential to impact the brand.
• A brand exists only in people’s minds.
• A brand can provide an organisation with direction and purpose.

Brand strategy should ultimately be regarded as an approach to build shareholder value - the most important driver of which is cash flow.

Part 2: Sources of Business Value

• Strong brands command market share.
• Strong brands create barriers to entry for competitors.
• Strong brands can extend into new areas.
• Strong brands can enter new markets.
• Strong brands have lower price elasticity.
• Strong brands can command a premium.
• Strong brands can deal with market disruption.
• Strong brands can attract and retain talent.
• Strong brands are a store of trust.
• Strong brands can stimulate innovation.

Part 3: Strategic Brand Planning

Identify the strategic challenge:

• Launch (introduce a brand to a market for the first time).
• Challenge (displacing dominant brands).
• Maintain (defending a market position).
• Revitalise (breathe fresh life into an existing brand).
• Re-brand (channge the branding for a product, service or company).
• Acquistion (integrate an acquired brand into an existing portfolio).

Part 4: Brand Biographies

Each of the following brands is discussed in detail in the book, and the value contribution of the brand is outlined.

• American Express
• Ben & Jerries
• Def Jam
• IBM
• Dove
• BP
• The Economist

Part 5: Measurement and Valuation

• Understanding brand strength: a look at a number of techniques to understand brand equity (loyalty, awareness, perceived quality, associations). Techniques include: Brand Asset Valuator, Equitrend, BrandZ.
• Understanding brand value: a look at several approaches for valuing a brand (e.g. proprietary techniques from Interbrand and Brand Finance).
• The business impact of brands: strong brands reduce business risk and create new areas of potential business activity.
• Building strong brands: Ogilvy research shows that there are commonly four factors that influence brand strength; affinity, challenge, fame, price.