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”

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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

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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

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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:

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Market Cap/Sales

Brand Relationships

Customer Equity

.48 .43

R2=.42

Best Buy

LinkedIn

Discover

Lowes

TargetGoldman Sachs

MasterCard3M

Facebook

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

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


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

Facebook

Google

LinkedIN

YouTube Digital

Casual Dining

Banks

Credit Cards

etail

Mass Market Retail


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

Facebook

Google

LinkedIN

YouTube

Digital

Casual Dining

Banks

Credit Cards

etail

Mass Market Retail


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

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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








-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






-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








-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 neither

likely nor unlikely






-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





lapsed user likely 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

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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.

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Understand Business Goals

Build Consensus

Implement Research Program

Align Enterprise

Measure and Manage

Our difference: new approaches, improved results

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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

[email protected]

www.brandpanorama.com

@brandpanorama

mailto:[email protected]

http://www.brandpanorama.com/