The Real Impact of the Toyota Quality Issues

The automaker may not be able to regain its quality premium position.

Recently there have been dramatic sales increases for Ford and GM and other automotive firms while Toyota experienced a small sales decline. Why? Certainly, the quality issues that Toyota has faced, around the “sudden acceleration” hypothesis and a series of visible recalls is a primary reason.

There is little question that the Toyota brand has been tarnished to the point that some view it now as just another brand with respect to quality. There has been significant short-term damage. However, in my view, the Toyota quality image, while it has suffered, will be resilient. Toyota will get its actual and perceived quality back over time. It is too good of a company not to.

In my view, the real long-term news is not that Toyota has faltered, but that Ford, GM, Hyundai, and other automobile brands have broken through the glass ceiling. Heretofore, these brands have not been able to get full credit for their quality improvements. The quality of many brands has been equal to Toyota’s for some time, but they have not been given credit for it because the unshakable perception in the marketplace was that Toyota was the gold standard.

“The Toyota quality image, while it has suffered, will be resilient.”

Competitor brands were not judged with respect to their actual quality or their quality improvement. They were instead judged in comparison to Toyota, and the perception was that no other brand was as good as Toyota. There was a glass ceiling, no matter how good the cars of Ford, GM, Hyundai and the others were, there would always be inferior to Toyota. The situation has changed. The glass ceiling has shattered. That is the real implication of the Toyota quality stories.


Toyota may get its quality perception back but may never get back the quality premium position. And it will now become possible for other brands to have their actual quality achievements translate into positive perceptions in the marketplace. This hypothesis is speculative and I would enjoy hearing if others agree.


Why Wasn’t the iPod a Sony brand?

In electronics, success is sometimes as much about the timing as it is about the tech.

In October 2001, Apple launched the iPod which was an instant success and sold over 220 million units over the next eight years. The iPod became the exemplar for a new entertainment category. Why was it Apple and not Sony that created the iPod?

Sony has always been the brand for portable personal music using clever compact vehicles. From the portable radios of the 50s to the Walkman introduced in the late seventies and beyond Sony, has been the innovative brand. The iPod was classic Sony. The answer is timing. Apple got the timing right by entering the market when the technology came together.

Of course, the Apple design flair, its brand, and its iTunes store were all important, but the timing was the key. Technology that was just emerging made the Apple iPod feasible. In particular, one enabling advance was an inexpensive, 1.8-inch hard drive from Toshiba that could hold over one thousand songs. Remarkably, Sony introduced not one but two iPod-like digital music players at the huge Las Vegas Comdex trade show in fall 1999, fully two years before the iPod appeared.

One, developed by the Sony Personal Audio Company, was the Memory Stick Walkman, which enabled users to store music files in Sony’s memory stick, a device that resembled a large pack of gum. The other, developed by the VAIO computer group, was the VAIO Music Clip, which also stored music in memory and resembled a stubby fountain pen. Both failed in large part because the technology was not yet ready. Each had 64 megabytes of memory that stored only twenty or so songs, and each was priced too high for the general market.

The timing was not the only problem. Not only did the two offerings confuse the market, but the lack of cooperation of Sony Music which was more concerned with avoiding piracy than with the success of the new digital product also were factors. But the timing was pivotal. Timing is a factor in most efforts to create new categories or subcategories especially in the high tech space as the research for my book Brand Relevance: Making Competitors Irrelevant showed.

In fact, Apple had its own premature products. One was the Newton, a personal digital assistant introduced in 1993, designed to manage schedules and lists using a human writing recognition system. Despite terrific introductory marketing, the product failed because it was priced high, was both unreliable and sluggish, and had a hard-to-read screen.

“Timing is a factor in most efforts to create new categories or subcategories especially in the high tech space.”

In 1996, Palm, with more advanced technology and a less ambitious product vision, came out with the PalmPilot, a simpler PDA that was a resounding success. An implication is that a firm needs to be close to technology and be capable of determining exactly when advances needed to support a product concept will emerge. That involves people who are conversant with the technology and are following it through various channels, a system to collect and analyze the intelligence that emerges, and a decision process that encourages action.

Another route is to be engaged in the technology so that its progress is not only monitored but influenced. Samsung’s engagement in semiconductor development and manufacture has led to new product enhancements in its consumer electronics and cell phone products.


The best concept needs to get the timing right. The market, the organization, and the technology have to be aligned. Arriving too early or too late can be fatal.


Is Macy’s Name Change a Disaster or Brilliant?

Short term, the choice might not have been wise. But in a longer time frame, the one-brand framework makes sense.

In 2005 Macy’s decided to change the brand names among their portfolio of brands which included Marshall Fields, Bon Marche, Rich’s, May, Lazarus, Foley’s, Filene’s, Burdine’s and Goldsmith’s. Each of these brands had a rich history often associated with a beloved family and a customer connection that goes back to see Santa for the first time.

The decision was pronounced as idiotic or worse by many – including me. Why would you throw away such powerful brand equities and customer relationships involving emotional benefits? After two years the decision seemed as bad as predicted. Sales were substantially down, possibly caused in part by merchandise and promotion decisions. However, resentment over the change from loyal customers, although not quite as virulent as the reaction to New Coke, was very visible and, without question, was one factor affecting sales.

After five years, however, it seems very possible that the decision was the right one for Macy’s. Financially, the brand was having its best year and the pay-offs from the name change were materializing. One advertising effort accessing national media replaced some 16 different advertising campaigns. Further, 16 different product assortments were replaced with a high level of commonality.

The single-brand helped generate a cohesion that made that process feasible. Perhaps as important, the Macy’s Thanksgiving Day parade, a centerpiece symbol of Macy’s, could be justified and fully leveraged. It no longer applied to just a few stores. The parade, owned by the Macy’s brand, is a unique brand, a real energizer and its impact was severely restricted without scale.

“The single-brand helped generate a cohesion that made that process feasible.”

One Macy’s brand, Bloomingdales, survived the one-brand initiative. Bloomingdales is more upscale and New York fashion-forward than the other Macy’s brands. It is one thing to replace a brand with one with comparable associations but it is quite another to replace a super premium brand with one of lesser stature. Macy’s made the right call on that one. It is somewhat reminiscent of Marriott’s decision to maintain Ritz-Carlton as a separate brand.


Macy’s was able to take the long-run view and ride out the difficult few years. They were blessed with deep pockets and an economic environment that was not unduly challenged. Not all firms will be in that category and have the luxury of a five-year time frame and might have to take a less aggressive name transition strategy.


David Aaker’s 10 Ways to Excel at Building a Brand

Role models, differentiators, energizers–consider one of these proven wake-up calls.

Out of my five brand books, what precepts stand out as one of the top ten? Which are the most critical “to do” tasks for someone charged with creating or managing a business? What do you need to know to excel at building a brand? Here is my top ten list:

1. Treat brands as assets.

Acceptance of the concept that brands are assets and have equity really changes not only branding and marketing but also business strategy. No longer is branding a subset of marketing to be managed as a communication problem. It becomes strategic, both reflecting and enabling the business strategy. Importantly, a brand is more than image and awareness—it also includes the size, engagement and loyalty level of the customer base. That means that brand strategy needs to be developed in tandem with the business strategy, both need to be clear on the target market, the value proposition, and the investment priorities over time.

2. Show the strategic pay-off of brand-building.

Part of the challenge of getting brands accepted as strategic is to demonstrate that they pay off. Unlike tactical marketing which can demonstrate short-term results, the long-term effects of brand building are difficult to demonstrate. One way is to observe the success of a business strategy and show how dependent that strategy was on-brand assets. Another is to use surrogates for the long-term impact such as measures of customer loyalty. But it is reassuring to know that, on average, brand building does pay off. I have conducted four studies with Professor Bob Jacobson of the University of Washington which explored the relationship between brand building and financial returns. Our study of brand equity and stock return is typical. A well-known fact in finance is that there is a strong relationship between earnings changes and stock prices. We found that the impact of building a brand on stock return was nearly as great as earnings, actually 70% as much effect.

3. Recognize the richness of brands–go beyond the three-word phrase.

Brand building starts with determining the aspirational associations, what associations should come to mind when the brand is cued. In general, this set should be from six to twelve associations. Of this set, two to four should be identified as the most important and the ablest to drive effective marketing programs, and the most likely to resonate with customers. In the brand identity model, they have termed the core identity elements. There may be a unifying concept termed the brand essence that provides an umbrella summary of the brand’s thrust but in some cases, it just gets in the way.

4. Get beyond functional benefits.

There is a tendency to focus on attributes and functional benefits because they are assumed to be what customers are buying and because market research is often functionally focused. The fact is–customers are not logical and functional benefits rarely provide a basis for sustainable differentiation or a deep customer relationship. Look instead toward emotional and self-expressive benefits. Thus, a customer can feel safe in a Volvo, excited in a BMW, energetic with Coca-Cola around, or warm when receiving a Hallmark card. A person can be cool by buying clothes at Zara, successful by driving a Lexus, creative by using Apple, a nurturing mother by preparing Quaker Oats hot cereal, frugal and unpretentious by shopping at Kmart, or adventurous and active by owning REI camping equipment. Consider also brand personality. Should the brand be confident, competent, fun, warm, or energetic, or some combination of these? Sometimes a brand is best expressed through a personality.

“A brand is more than image and awareness—it also includes the size, engagement and loyalty level of the customer base.”

5. Consider organizational associations.

While most offerings struggle to be differentiated, an organization will have people, programs, values, strategies, and heritage that will almost always be unique. Further, the organizational characteristics can be meaningful to customers. They can provide credibility with respect to the offering by demonstrating or suggesting that the firm has the capability and will to deliver on its promise. Consider the visible commitment of to Wow! Service. Further, organizational values and programs can provide a basis for a relationship. The policy of providing one percent of their product, time, and sales to public service. For some, that policy reflects shared values that lead to a respect-driven relationship that goes beyond products.

6. Look to role models.

Knowing aspirational associations is a crucial first step, but how to get there is a practical issue. Looking at role models that can be adapted or leveraged nearly always provides useful insights. Suppose a brand aspired to be considered warm and friendly. Find other brands that have succeeded in doing so, including brands in disparate industries. How did they get that reputation? Can anything they did be adapted? Or look within your own firm. What people or programs best exemplify those characteristics to customers? Can their efforts be expanded or extended to other parts of the organization?

7. Understand the brand relationship spectrum.

Brand portfolios can be so messy and dysfunctional that a firm’s new product process is paralyzed because there is no concept of which brand to use on a new offering. Customers may be so confused that they can’t even buy. The brand relationship spectrum can help create clarity, leverage, and synergy in the portfolio. The idea is that a master brand may work for a new offering if its associations are consistent and helpful and will be reinforced by the new role. However, there are times in which the master brand will be inconsistent or confining and the new offering requires some separation. The spectrum suggests that a subbrand will generate some separation, an endorsed brand more, and a separate brand the most. The challenge is to find the right degree of separation and to create brands that can perform these roles.

8. Look for branded differentiators.

It is difficult to create differentiation especially involving functional benefits because a competitor will quickly copy or appear to copy or otherwise neutralize the advantage. Unless you brand it. A competitor cannot copy the brand. If the innovation is branded and the brand established, the competitor’s task of creating and communicating an enhancement will be formidable. When Westin created a superior bed and sleeping experience and branded it the Heavenly Bed, they changed the way that many looked at the hotel experience and the branded differentiator made it difficult for imitators to get traction.

9. Use branded energizers.

We now know that brands across the globe have declined in terms of perceived quality, loyalty, and visibility over the last decade. The exceptions, those brands that have energy, have resisted the decline and still drive financial results. Energy may be the most important imperative for brand builders. The best form of energy, innovative new products, is not available on a regular basis for most firms and not available at all if your offering is an unexciting one like hot dogs or life insurance. In that case, an option is to find some branded program or person, a branded energizer, and attach your brand to it. Avon’s Walk for Breast Cancer is an example of a program that added energy for a brand that could never achieve it with products.

10. Win the brand relevance battle.

The way to gain market position, often the only way, is to develop offerings so innovative that they create new categories or subcategories making competitors irrelevant. The goal is to encourage the customer to select a new category or subcategory for which your brand is the only one with credibility and visibility. In virtually every industry, an analysis will show that market positions are very stable in the absence of such innovation. Relevance is also a threat to the leading brands who must be concerned with having customers — who respect and maybe love their brand — decide that they no longer want to buy what the firm is making, its brand has become irrelevant.


It’s unlikely that any brand would need to follow all ten suggestions. But chances are good that all established brands are could benefit from a closer look through one of these lenses.


The Brand Story of the Decade: Nintendo

This gaming brand soars not on high-tech promises, but on its commitment to straightforward fun.

My nominee for the brand story of the decade is Nintendo: a brand I have studied with a colleague, Professor Akutsu of Hitotsubashi University. The story of Nintendo’s astounding brand success is documented by BrandJapan, an annual survey, now in its tenth year, measuring the strength of over 1,000 brands in the Japanese market.

In the 2005 findings, Nintendo was ranked 135 in the survey. From that point on its status rose to 67 in 2006, to 7 in 2007, and finally to a number one position in 2008 and again in 2009. It fell in 2010 but still gained a place in the top 15.

In contrast, other brands had remarkably stable equity ratings. The products were clearly the drivers. Nintendo DS was a mega-hit, reaching its worldwide accumulated sales of 26.8 million units in less than two years after its December 2004 introduction. The Nintendo DS brand was so successful that it was a top-six brand in Japan in 2008, 2009, and 2010. Having a subbrand in the top six was unprecedented.

“Nintendo DS was a mega-hit, reaching its worldwide accumulated sales of 26.8 million units in less than two years.”

Then came Wii, a new form of a game that incorporated user movement into gaming allowing the user to dance, golf, box, play guitar, and on and on. Within a year after its introduction, it was already ranked a top 60 brand by the BrandJapan survey and in 2009 and 2010 it became a top 20 brand — meaning that out of 1,000 Japanese brands, three of the strongest were Nintendo brands.

A constant parade of branded features and new games provides ongoing energy and competitive advantage to both Wii and DS and the Nintendo brand. Four interrelated explanations reflecting both strategy and execution can be identified: A move away from competing on high technology.

Sony and Microsoft focused on graphics technology that appealed to the heavy users, namely young males. Nintendo, in contrast, reached back to their heritage as a simple toymaker and decided to focus instead on involvement and “fun” with products that were relatively low-tech. A different, broader target market. Nintendo decided to refocus the target population away from the hard-core young males who were into action games and high-quality graphics toward a broader audience.

One goal is to have the mom be a participant and an advocate rather than a cynic and opponent, hence a wide array of easy-to-use games including some that were learning vehicles. Another is to involve the whole family, so the games are not simply related to the boy’s interests. Instead of focusing on the heavy user and beating the competition, Nintendo defined new categories for which competitors were less relevant. A talented game developers group.

Nintendo was blessed with a talented group that was extremely good at creating games and had a track record of doing so over three decades. The new strategy liberated this group to be creative and fulfill its potential. Both DS and Wii had a host of games that connected with a wide range of family members. In fact, these Nintendo game titles created a new market categorized as “casual games,” a video game that requires fewer skills and less experience and is characterized by simple and intuitive rules.

A new CEO. At the outset of the strategy, a new CEO was brought in: a young, energetic, entrepreneurial person. With exceptional people and organizational skills, he was able to gain acceptance and excitement around the new strategy and marshal the talent needed to implement it. It all came together: a differentiated strategy, a new target market, supporting competencies, innovative offerings, an energized CEO and nearly flawless execution. All were needed. The result was an amazing brand story. What is your nominee for brand of the decade?

Nintendo’s done it again with PokemonGo, learn more about what augmented reality means for brands.


Amid the universe of devoted gamers who are passionate about their platforms, Nintendo wins with a steady stream of branded features and new games. And instead of competing on high tech, it revels in its heritage as a simple toy maker.


Manage the Category Not the Brand

From minivans to home rentals, it pays to focus on the advantages the subcategory provides.

Two brand stories caught my eye today, HomeAway and Nissan’s Quest.

I argue in Brand Relevance: Making Competitors Irrelevant that the path to winning is to create new categories or subcategories rather than engaging in brand preference competition in established categories.

HomeAway is on the Super Bowl with an ad asking “Why hotel when you can HomeAway?” The ad shows some of the struggles to get comfortable in the cramped quarters of a hotel and showcases the space and freedom of a vacation rental. Whether the execution of the ad is effective is another issue, but the idea of creating a new category, defining its dimensions and becoming its exemplar is exactly where potential growth is at. HomeAway is a classic case study. It will be interesting to see what happens. Established brands can also focus on category management even with existing categories.

“Creating a new category, defining its dimensions and becoming its exemplar is exactly where potential growth is at.”

Nisson Quest has been also run in the minivan category pioneered by Chrysler in 1982 and joined by Toyota and Honda in 1998. As the minivan category got tired in the last ten years, brands have tried to move the category a bit away from soccer moms and toward more style and fun. In an extreme example, Ford introduced its Galaxy in the late 1990s in the UK as a vehicle that allowed business people to “Travel First Class.” Ford was trying to create a minivan subcategory very removed from soccer moms.

Nissan Quest is going the other way. It is attempting to return the category to its soccer mom routes with a 2011 model that is a bit more traditional. Its ads emphasize the functional benefits of family-friendly storage, accessibility and features. This approach can potentially make the Nissan Quest more relevant to the core minivan market, namely soccer moms.

Further, for some, it can go beyond relevant to authentic. If the subcategory is redefined to be classic soccer mom rather than something different, Nissan might enjoy some degree of authenticity. It is the real minivan.


Authenticity is gold standard for relevance. Some brands need to engage in brand preference competition to retain their relevance and market position. However, I think it is always worthwhile to look at the positioning from a category or subcategory perspective rather than only a brand point of view. It can change strategy and make communication more effective.


Managing Brand Equity

David Aaker


In a fascinating and insightful examination of the phenomenon of brand equity, Aaker provides a clear and well-defined structure of the relationship between a brand and its symbol and slogan, as well as each of the five underlying assets, which will clarify for managers exactly how brand equity does contribute value.

The most important assets of any business are intangible: its company name, brands, symbols and slogans, and their underlying associations, perceived quality, name awareness, customer base and proprietary resources such as patents, trademarks and channel relationships. These assets, which comprise brand equity, are a primary source of competitive advantage and future earnings, contends David Aaker, a national authority on branding. Yet, research shows that managers cannot identify with confidence their brand associations, levels of consumer awareness or degree of customer loyalty. Moreover in the last decade, managers desperate for short-term financial results have often unwittingly damaged their brands through price promotions and unwise brand extensions, causing irreversible deterioration of the value of the brand name. Although several companies, such as Canada Dry and Colgate-Palmolive, have recently created an equity management position to be guardian of the value of brand names, far too few managers, Aaker concludes, really understand the concept of brand equity and how it must be implemented.

He opens each chapter of “Managing Brand Equity” with a historical analysis of either the success or failure of a particular company’s attempt at building brand equity: the fascinating Ivory soap story, the transformation of Datsun to Nissan, the decline of Schlitz beer, the making of the Ford Taurus and others. Finally, citing examples from many other companies, Aaker shows how to avoid the temptation to place short-term performance before the health of the brand and, instead, to manage brands strategically by creating, developing and exploiting each of the five assets in turn.

“Managing Brand Equity” is available at Amazon, Barnes & Noble, or wherever books are sold.


William Wells
Executive Vice-President, DDB Needham Worldwide

Brand equity is among the hottest topics in advertising and marketing today. This book is the most comprehensive and most insightful source available.

About the Author

David Aaker, is the author of over one hundred articles and 18 books on marketing, business strategy and branding that have sold over one million copies. A recognized authority on branding, he has developed concepts and methods on brand building that are used by organizations around the world.


Want to interview Dave or feature him on your next podcast? Please connect with us or David Aaker directly.


Brand Portfolio Strategy



In this long-awaited book from the world’s premier brand expert and author of the seminal work Building Strong Brands, David Aaker shows managers how to construct a brand portfolio strategy that will support a company’s business strategy and create relevance, differentiation, energy, leverage and clarity. Building on case studies of world-class brands such as Dell, Disney, Microsoft, Sony, Dove, Intel, CitiGroup and PowerBar, Aaker demonstrates how powerful, cohesive brand strategies have enabled managers to revitalize brands, support business growth and create discipline in confused, bloated portfolios of master brands, sub-brands, endorser brands, co-brands and brand extensions.

Renowned brand guru Aaker demonstrates that assuring that each brand in the portfolio has a clear role and actively reinforces and supports the other portfolio brands will profoundly affect the firm’s profitability. Brand Portfolio Strategy is required reading not only for brand managers but for all managers with bottom-line responsibility to their shareholders.

“Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage, and Clarity” is available at Amazon or wherever books are sold.


  • Brands are underleveraged
  • The business strategy is at risk because of inadequate brand platforms
  • The business faces a relevance threat caused by emerging subcategories
  • The firm’s brands are tired and bland
  • Strategy is paralyzed by a lack of priority among the brands
  • Brands are cluttered and confusing to both customers and employees
  • The firm needs to move into the super-premium or value arenas to create margin or sales volume
  • Margin pressures require points of differentiation


Bernhard Eggli
Head of Brand Management, UBS

There’s no authority on branding to equal David Aaker, and here he shows again his weight of experience and keenness of insight. This is a thoughtful exploration of how to structure, manage, and extend a brand portfolio for maximum value. The passages on how to energize and differentiate a brand are especially illuminating. Excellent.

Sam Hill
President, Helios Consulting; former Vice Chairman, DMB&B

Brand portfolio optimization will be the value-creating management approach of the next decade, and will change the way we do business as fundamentally as has business process reengineering or six sigma. Dr. Aaker has written a simple and pragmatic guidebook that will be tremendously useful to strategists. He has almost single-handedly transformed branding from an art into a science, and no one is better qualified to lead the discussion on brand portfolio strategy.

Anna Catalano
Group Vice President, Marketing, BP

Aaker’s epilogue of 20 takeaways should be a bible for all brand managers who want to drive business success.

Peter Sealey Ph.D.
Former Chief Marketing Officer, The Coca-Cola Company

Brand Portfolio Strategy hits the mark dead center into the most relevant and hotly debated topic in marketing today. Aaker builds on his previous trilogy of seminal branding books with his best offering yet — a great strategic and practical read.

Philip Kotler
Professor of International Marketing, Kellogg School of Management, Northwestern University

Brand Portfolio Strategy is a ‘must’ read for any company saddled with brands whose roles and relationships go begging for clarification and wiser direction. David Aaker, our most original conceptual thinker on branding, has again pushed brand management into exciting new territory.

About the Author

David Aaker, is the author of over one hundred articles and 18 books on marketing, business strategy and branding that have sold over one million copies. A recognized authority on branding, he has developed concepts and methods on brand building that are used by organizations around the world.


Want to interview Dave or feature him on your next podcast? Please connect with us or David Aaker directly.

Explore how David Aaker and Prophet can help your business create signature stories that resonate with your customers and employees.


Building Strong Brands



In his book, “Building Strong Brands,” Aaker uses real brand-building cases from Saturn, General Electric, Kodak, Healthy Choice, McDonald’s and others to demonstrate how strong brands have been created and managed.

A common pitfall of brand strategists is to focus on brand attributes. Aaker shows how to break out of the box by considering emotional and self-expressive benefits and by introducing the brand-as-person, brand-as-organization and brand-as-symbol perspectives. The twin concepts of brand identity (the brand image that brand strategists aspire to create or maintain) and brand position (that part of the brand identity that is to be actively communicated) play a key role in managing the “out-of-the-box” brand.

A second pitfall is to ignore the fact that individual brands are part of a larger system consisting of many intertwined and overlapping brands and sub-brands. Aaker shows how to manage the “brand system” to achieve clarity and synergy, to adapt to a changing environment and to leverage brand assets into new markets and products.

Aaker also addresses practical management issues, introducing a set of brand equity measures, termed the brand equity ten, to help those who measure and track brand equity across products and markets. He presents and analyzes brand-nurturing organizational forms that are responsive to the challenges of coordinated brands across markets, products, roles and contexts. Potentially destructive organizational pressures to change a brand’s identity and position are also discussed.

As executives in a wide range of industries seek to prevent their products and services from becoming commodities, they are recommitting themselves to brands as a foundation of business strategy. This new work will be essential reading for the battle-ready.

“Building Strong Brands” is available at AmazonBarnes & Noble, Books-A-Million, or wherever books are sold.


Joseph W. Tripoli
Senior Vice President, Global Marketing, Products and Services, MasterCard International Incorporated

Rarely is the sequel as good as the original. This time it’s better! With compelling case studies and insightful discussion, Aaker extends the concepts put forth in Managing Brand Equity to create the first true owner’s manual for brand managers. Aaker is the brand name in brand management!

Peter A. Georgescu
Chairman and Chief Executive Officer, Young & Rubicam Inc.

Rarely is the sequel as good as the original. This time it’s better! With compelling case Aaker’s “brand system” and his discussion of brand equity measurement should fundamentally change our perspectives on marketing.

Peter Sealey, PH. D.
Former Senior Vice President, Global Marketing, The Coca-Cola Company; presently Executive Consultant to the President, Sony New Technologies Inc.

A must read…will take us to a new level of understanding…a treasure!

About the Author

David Aaker, is the author of over one hundred articles and 18 books on marketing, business strategy, and branding that have sold over one million copies. A recognized authority on branding, he has developed concepts and methods on brand building that are used by organizations around the world.


Want to interview Dave or feature him on your next podcast? Please connect with us or David Aaker directly.

Explore how David Aaker and Prophet can help your business create signature stories that resonate with your customers and employees.


Brand Asset Management



Price, quality, availability and service: these are all aspects of your business that your competitors can imitate. But your brand is unique. In this book, an experienced brand manager shows you how to turn your brand from the logo on your letterhead into the driving force behind your company’s growth, operational success and long-term profitability.

Drawing from methods developed in his highly successful consulting and training programs, Scott Davis provides a thorough grounding in brand strategy. He presents tested ways to assess the value of your brand, maximize its potential, and use it to better develop, sell, price, and market your products and services. His hands-on guide also includes extensive case studies and worksheets to help your company capitalize on the most under-leveraged–and the most powerful–asset it owns.

“Brand Asset Management” is available at AmazonBarnes & Noble, or wherever books are sold.


Phil Kotler
S. C. Johnson & Son Distinguished Professor of International Marketing, Kellogg School of Management, Northwestern University

“Most companies do a poor job of managing their brands. Scott Davis vividly illustrates well-managed and poorly managed brand programs and provides the best methodology I have seen for improving your brand asset management.”

Ft. Worth Morning Star-Telegram
Ft. Worth, Texas

“Davis sets forth a process that everyone, from the CEO to the marketing manager, can follow to position a company’s brand in the most advantageous way and use it to drive development pricing, marketing, communication, and sales.”

Amy Kelm
Worldwide consumer brand manager, Hewlett-Packard

“Scott Davis has put together a gem. Brand Asset Management is a practical handbook for managers looking to maximize the strength and value of their brands.”

About the Author

Scott M. Davis is a managing partner at the Chicago office of Prophet, and a former marketing and distribution manager at Procter and Gamble. He is an adjunct professor at Northwestern University’s Kellogg School of Management, a contributing editor to Brandweek and an editorial board member of the Journal of Consumer Marketing. His work has been featured in such publications as the Wall Street Journal, Fortune and USA Today. Davis is the author of Brand Asset Management (Jossey-Bass).


Want to interview Scott or feature him on your next podcast? Please connect with us or Scott Davis directly.

Explore how Scott Davis and Prophet can help your business today.


Brand Portfolio and Brand Architecture in Single Brand Companies

How customer-centricity can guide strategic decisions, leading to uncommon growth.

Top marketers are increasingly concerned with brand architecture and brand portfolio strategy due to increasing: M&A activity creating vast, complex and overlapping portfolios; technology convergence blurring the lines between product types and changing the way customers think about and shop the category, and cost pressures making it increasingly difficult for companies to support large numbers of products and brands.

What is the Difference Between Brand Portfolio and Brand Architecture?

The two terms are often misunderstood and so clarification can often help demystify the meaning and importance of each concept. Brand portfolio strategy aims to maximize market coverage and minimize brand overlap through the effective creation, deployment, and management of multiple brands within a company. It serves as an inward-facing tool for the organization to ensure that the company’s brands are effectively targeting all key segments within the marketplace, working together to maximize sales rather than competing against one another for customers’ attention.

In contrast, brand architecture serves as an outward-facing navigation tool for customers. It helps minimize customer confusion by laying out the product structure in a way that makes it easy for customers to find what they are looking for and to understand what the company has to offer.

How Can Single-Brand Companies Utilize Brand Portfolio and Architecture to Maximize Business Results?

While many multi-brand companies such as Unilever or RBS have traditionally been more aware of the benefits that come from optimizing their brand portfolio and architecture strategies, we believe that these concepts and practices are just as important for single-branded companies like AT&T and IBM. Single-brand companies can apply the same theories and techniques to strategically develop and present a product and sub-brand portfolio in which offers can be bundled and presented in a way that is more relevant and clear for customers. This approach ultimately maximizes business results.

Case Study: AT&T

In 2001, AT&T’s flagship “Managed Services” division was facing falling sales. It had over 12,000 offerings, the majority of which were sold to customers under the AT&T “Managed Services” brand. At this time, two major problem areas became apparent: (i) both customers and the sales force were confused by AT&T’s vast and complex offering, and (ii) customers perceived AT&T as a “ports & pipes” product company rather than a company capable of providing value-added services as the “Managed Services” name implied.

In order for AT&T to optimize its product architecture, it had to first understand what its target customers wanted from a telecommunication solutions provider. AT&T uncovered two distinct customer segments, each having fundamentally different needs and ways of thinking about telecoms solutions.

  • “Product Buyers” look for specific product sets and sophisticated components and thus require a wide variety of distinct products.
  • “Solutions buyers” are less expert and seek holistic business solutions that are all-inclusive and off-the-shelf.

Armed with this insight, AT&T developed a dual-brand architecture model that presented the same products in two different ways enabling each segment to find what they were looking for. This new, restructured architecture allowed “Product Buyers” to navigate offerings by product category and type, while “Solutions Buyers” could choose between different groupings of offers that met their overall needs.

As a result, customers could more easily access AT&T’s entire product portfolio based on their specific purchasing mentality and the sales force could more easily speak about and explain what AT&T could offer. Additionally, AT&T renamed the division “AT&T Enterprise” in order to reflect the broader focus on strategic business functions.

Case Study: IBM

In the mid-1990s, like most technology companies, IBM was organized internally around product types (i.e., personal computing, software, and servers divisions) resulting in them presenting their offer in a product-led rather than customer needs-driven way. Sales with the B2B sector were lagging, as many B2B customers wanted solutions rather than separate products and services. Additionally, IBM’s “stodgy, mainframe” associations prevented the brand from resonating with B2B customers who wanted a more flexible, dynamic, services-oriented provider.

In order to become a customer-centric company, IBM rearranged its offering to be more solutions-based. They arranged their portfolio into categories that made sense to the customer, anchored around solutions by industry or functional area. Additionally, they created the “e-business” brand, which helped to address customer needs, simplify purchase decisions and improve relevance for customers. This new sub-brand also helped reposition IBM as a leading, agile, cutting-edge IT service company.

As a result, IBM grew its services business significantly—from 29% to 41% in 5 years as part of global IBM revenues.

Other Examples of Brand Portfolio & Architecture Success

Prophet has worked with global brands on product portfolio and architecture projects helping clients to become more customer-centric and thus achieve greater strategic focus and growth.

Our creativity and analytical capabilities coupled with customer insight expertise enable us to help our clients realize great business results.
For example, Prophet helped UBS translate their corporate objective into a single brand strategy, and then migrate to the new single brand worldwide, using the now well-known “You&Us” campaign. Since the announcement of the single-brand strategy, UBS’s share price has risen by 70% and UBS is one of the top 50 global brands.

Prophet helped Philips build a strong co-branding strategy. After analyzing different possibilities, a partnership with Nike was recommended. Philips has subsequently gone on to develop and successfully market a range of innovative sports technology products. This helped Philips develop desired brand associations of “stylish”, “youthful” and “leading technology.”

BP has become one of the worldwide largest energy corporations through a number of acquisitions (e.g. Aral, Amaco, Costal). In “Bringing the global brand to life”, Prophet conducted comprehensive brand portfolio work (including market-, competition- and customer-needs analyses within the respective business areas) and developed customized sub-brands for each of these. Today, these sub-brands live under the master brand BP in a market portfolio that efficiently covers the market. Between 2000 and 2003, after launching the optimized brand portfolio, BP was able to increase its profit by 32%.

Key Takeaways

  • Become more customer centric. Organize your portfolio in a customer-centric way—for instance, ensure that the portfolio strategy drives your R&D strategy rather than allowing R&D to determine how your company goes to market. Both AT&T and IBM saw strong business growth as a result of this shift in mentality.
  • Create clarity of offerings through architecture. Make sure that your product/service offering is clear to both your customers and your employees. If they are not able to understand what you are offering, it is a signal that the current architecture is not working. As the example of AT&T shows, arranging the offer in more than one way may be a viable way forward.
  • Simplify product navigation. Product portfolios that are targeted at multiple customer segments need multiple navigation possibilities—IBM has four ways of navigating through their product portfolio online to match the way different customers think about the category and purchase their products.
  • Keep your portfolio up to date. Portfolio strategy should not be static. Remember that customer needs change over time, particularly in technology categories, and new entrants change the way customers think about the marketplace.

Companies with customer-centric brand architectures and portfolios, offering clear solutions and easy product navigation and selection, will ultimately be more successful than those companies with an inside-out approach.

Prophet has worked with global brands on product portfolio and architecture projects helping clients to become more customer-centric and thus achieve greater strategic focus and growth.

Our creativity and analytical capabilities coupled with customer insight expertise enable us to help our clients realize great business results.


Simplifying product navigation, updating portfolios and clarifying brand architecture all work best when done through the lens of customer-centricity. Single-brand companies can use these questions to maximize business results.


Building Brands from the Inside

Start at the top with a brand boot camp, then develop strategic pilot initiatives.

No longer do forward-thinking companies view branding as merely an advertising campaign or catchy slogan. The brand is better understood as the set of expectations and associations evoked from experience with a company or product — how customers think and feel about what that business or product actually delivers across the board. As such, a brand is built from the customer’s entire experience with a company, its products and its services. And if everyone in the organization helps bring the brand’s promise to life, it’s a sure way to market success. Call it brand operationalization—an organizational discipline that’s reaping rewards for a growing number of businesses.

Itron is a good example. This Spokane-based company transformed itself in the minds of its customers from just a meter-reading company into a provider of energy marketplace data and knowledge. “We recognized that we had to shift both the position of the brand and the way in which we managed it,” says LeRoy Nosbaum, chief executive of Itron.

In doing so, the company made sure all employees were fully educated on the new brand strategy and understood how their roles would help bring the new Itron brand to life. Profit-sharing was even tied to its employees’ ability to live the brand. During the first year of the new brand focus, Nosbaum believes these efforts helped contribute to a huge jump in Itron’s stock price—from $3.70 to more than $32 a share—and an all-time high in employee morale.

Itron has built a brand-driven business in which employees across all organizational levels and functions understand and strive to uphold the brand’s promises and the goals of the brand strategies. But many companies still face the challenge of figuring out how to bring their brand to life in order to similarly fuel long-term, sustainable growth.

To build the kind of brand-based culture and discipline that fosters business growth, Itron “operationalized” its brand, bringing it to life through its people, systems, and processes. Essentially, this means moving the brand’s role and influence well beyond the marketing department so it becomes an integral part of the company’s way of doing business. Achieving that goal hinges on success within five specific brand-driven areas. (See Exhibit 1.)

Exhibit 1: Key tenets of success

  • Align brand and business strategy
  • Demonstrate commitment to brand at the top
  • Make a consistent impression with customers and stakeholders
  • Become a brand-driven organization and culture
  • Implement a measurement system

Branding Meets Strategy

Total alignment between business and brand strategy is a crucial starting point. Think about it: Strategies about customers, distribution, pricing, and communications are crucial links between business and brand strategy. Business strategy cannot be developed in a vacuum. Neither can brand strategy. The connection between them must be aligned and strengthened. If organizations hope to maximize their strategic decision making and brand-building capacity, they must understand the brand and its role within the overall strategy. is a great example of a company that achieved this alignment and assessed its business issues using the context of the Amazon brand. When customer service costs became a concern, it didn’t do the typical quick fix of cutting people or call center facilities. Rather, its team looked at the roots of the problem, evaluating the issue and possible solutions against Amazon’s brand promise of providing friendly, easy access to products at a fair price.

To keep costs low while responding to customer requests for more specificity with regard to order shipments, Amazon completely overhauled its customer service department and added more self-service components—all without cutting staff or reducing the number of call centers. The results were optimized operations, lower costs, improved service and strengthened brand relevance in the mind of consumers.

Organizations seeking to integrate their brand and business strategies may want to consider three jump-starting tactics:

  1. 1. Redefine marketing’s role. Redefining the role of the traditional marketing function means expanding beyond marketing communications activities. This can be done by upgrading the quality of people in the brand management roles within the organization, establishing new corporate brand teams, or hiring an executive team-level individual into a CMO role.
    2. Launch strategic pilot initiatives. Selecting and implementing a few highly visible strategic brand initiatives (i.e., a brand vision or brand positioning) will allow key people to experience the new “brand informed” approach. If that approach is too aggressive, another related option would be to choose a specific business problem (i.e., a distribution channel issue or an acquisition opportunity) and demonstrate how attacking the issue in a brand-informed way would lead to a better resolution.
    3. Develop a senior leadership brand boot camp. The goal here is to immerse senior leadership in the brand through a combination of outside reading, facilitated discussion, and hands-on problem-solving. This will help senior management be more effective when it comes to functioning in a brand-informed strategic environment.

Start at the Top

For the brand to become fully operationalized, the chief executive officer must demonstrate clear and consistent commitment to the brand, and this must be embraced by the senior management team. The CEO must champion the message that the brand is the responsibility of the entire organization, and senior management must support that message.

The CEO of 3M, for example, leads its branding efforts, supported by a brand management committee that’s focused on strategy. The committee is made up of high-level, cross-functional representatives, including the senior vice president of R&D, senior lawyers, and brand experts. As a result, brand involvement is extremely high throughout the organization.

In some organizations, that type of senior-level team is referred to as an executive brand council (EBC). Typically, an EBC brings together the heads of business units and functional areas to act as a team and tackle the tough brand-building issues that may arise, like the acquisition of new brands, the launching of a major new product and licensing agreements.

Kodak is among the companies that have successfully implemented an EBC. Paula Dumas, Kodak’s vice president of industry marketing, says its EBC, composed of the chief executive, chief operating officer, chief financial officer, chief marketing officer, business unit presidents, and external consultants, basically serves as a board of directors for the company’s CMO. The corporation’s annual operating plan reflects specific strategies the brand council has approved. If the company is interested in changing policies tied to the brand or wants new investments to support the brand, these requests must go through the EBC for approval. With the implementation of the EBC, Dumas says, “Brand stewardship is shared by everybody within the company.” The executive brand council ensures commitment at the top, which then filters down throughout the organization.

Stay Consistent

The CEOs of both 3M and Kodak have also recognized that, while they are the linchpins in building a brand-based culture, it takes buy-in from each employee and their consistent delivery of the brand promise across every customer touchpoint to really achieve brand-driven success.

Brand touchpoints are all of the different ways that an organization’s brand interacts with and makes an impression on customers, employees, and other stakeholders. A touchpoint is represented by every action, tactic, or strategy taken to reach a customer or stakeholder. Thus, each time a customer sees one of your ads or makes a call to the customer service center, an opinion is being formed about your brand. Each of these activities falls within the three stages of the customer experience—(1) pre-purchase, (2) purchase (or usage), and (3) post-purchase.

“Each time a customer sees one of your ads or makes a call to the customer service center, an opinion is being formed about your brand.”

Pre-purchase experience touchpoints represent the various ways potential customers interact with your brand prior to deciding to do business with your company. Each pre-purchase touchpoint interaction should be designed to shape perceptions and expectations of the brand, heighten brand awareness, and drive its relevance. They should also help prospects understand the brand’s benefits over competing brands and the value it brings in fulfilling their personal wants and needs.

Purchase or usage experience touchpoints are those that move a customer from considering your brand to actually “purchasing” it. The main objective of these points of interaction is to maximize the value prospects see in your offerings and instill confidence that they have made the right decision in choosing your brand.

Post-purchase experience touchpoints come into play after the “sale” and should maximize the customer experience. Out of all of the brand touchpoints, the ones that fall into this category are the most under-leveraged, even though they offer one of the best opportunities for businesses to drive sustainable and profitable growth. The goals of post-purchase experience touchpoints are to deliver on the brand promise, meet or exceed customer performance and usage expectations, and increase brand loyalty and advocacy.

Often, time and resource constraints keep companies from focusing on every single touchpoint and making sure they’re consistently delivering on your brand. Therefore, you will want to identify those touchpoints that drive the desired brand experience and allocate your resources against them. There are four steps to help determine which touchpoints should be leveraged:

Step 1. Identify the touchpoints that influence customer perception of your brand and then categorize them by the three stages of the customer experience. To ensure the right touchpoints are identified, it’s a good idea to ask multiple departments within your company for their input because many of these touchpoints will come from areas outside of marketing.

Step 2. Develop a deep understanding of how you’re performing from both an internal and external perspective against each of the identified touchpoints. This is crucial in achieving touchpoint alignment because this process helps you learn what affects customer perceptions of the brand and begin to recognize your touchpoint vulnerabilities vs. those of the competition. During this phase eventual touchpoint, “owners” need to get involved so they can better understand the challenges that lie ahead in getting the touchpoint to the desired end state.

Step 3. Prioritize the identified touchpoints and determine which will have an immediate effect on brand perception and experience. Some objective screens to consider include the impact on customers’ perception of the brand; size of the gap; cost of implementation; cost-benefit assessment; the touchpoints’ ability to help the organization achieve its long-term goals and objectives.

Step 4. Implement and manage your high-impact touchpoints on an ongoing basis. At this stage, the touchpoint “owner” is now responsible for executing it as well as educating others on its value and leveraging metrics that ideally will be used in future decisions tied to that touchpoint.

GE’s technology businesses are an excellent example of brand consistency across touchpoints. It continues to invest in integrating its technology and solutions with the right level of customer care and service—particularly at the post-purchase touchpoints—to create a customer experience consistent with the company’s brand promise.

GE has positioned itself as the smartest, safest, and best overall option. To that end, Power Systems designed a comprehensive post-purchase experience to continue to reinforce its promise of being the smartest and safest. It has an account team dedicated to helping solve problems with the company’s current product offerings and regularly provides value-added services. GE continues to invest in new diagnostics, monitoring systems, and business products to help customers lower ongoing operating costs and reduce downtime. It also provides educational and technical information through the Internet, seminars, and customer conferences to maximize the brand customer experience.

Become Brand-Driven

Achieving brand-driven success requires a decided mind shift across the organization. To truly transform your company, all employees must understand the brand’s promises and their role in bringing the brand to life within their functional areas. Additionally, the organization needs to be structured to support, sustain, and develop a brand-based culture.

The first step toward this transformation involves educating the employees about the brand and inspiring them to behave in a way that’s consistent with its promise. When employees understand the brand’s rationale and its emotional components and have the tools and processes to facilitate day-to-day decision making, they’ll start to develop a lasting connection to the brand.

Even well-established brands sometimes need to refresh or realign their culture with their brand. After 7-10 years of “Just do it” and aggressive growth, Nike had hit a wall. With a depressed economy and slowing growth, Nike realized it needed to realign its employees with its brand to help get its business back on track. After reviewing some of the core beliefs about the Nike brand and how they relate to what employees do on a daily basis, Nike developed a set of maxims that communicated the Nike brand. These “Nike Maxims” included statements such as “It is in our nature to innovate,” “Simplify and go,” and “The consumer decides.” The maxims sought to build direct connections between the employees, the company, and the brand and were based on the core belief that Nike’s mission is “to bring inspiration and innovation to every athlete in the world.” The maxims also spoke to the types of behaviors, decision-making styles and attitudes that are consistent with the Nike brand. The team executed a comprehensive worldwide rollout of this initiative through a series of events using multimedia, interactive forums, and local employees talking about how they brought the brand to life in their job.

By using examples of desired employee behavior, providing frameworks and tools for employees to use, and sharing insight and rationale behind the brand, Nike was able to reinvigorate its workforce and inspire them to live the brand.

Measure Your Progress

But how do you know if brand-building activities are working and your efforts are paying off? Internally, such efforts will have more credibility if a measure of progress is in place. The same is true for external brand-building efforts. Implementing measures to gauge brand-building efforts is the fifth step toward operationalizing the brand.

Itron, for example, was able to attribute part of its surge in stock price directly to its brand-building initiatives. How? Internally, Itron used two key metrics: tying brand-building efforts to employee profit-sharing and measuring employee morale.

To motivate employees to live the brand, management devised a reward system. In order to reach a certain level of profit-sharing, its employees had to create a plan for how they would live the brand.

One employee commented that the company’s logo wear was expensive to purchase and that many believed it was really only for those select people who attended marketing events. In response, Itron devised a plan to provide each employee with “brand dollars” to spend on logo wear so they could see and feel the new logo and brand image. Other employees came up with a plan to host “product fairs” and quarterly business meetings as additional ways to share knowledge and ensure all employees fully understood the industry and the products Itron offers.

These are just a few of the ways employees have devised to show their commitment to living the brand every day. At the end of each year, Itron evaluates its employees against its plan to live the brand to determine what level of profit-sharing they’ll receive.

Management also measures employee morale because it provides a good gauge as to whether a positive shift occurred in employees’ attitudes about, and belief in, the company and the Itron brand. Randi Nielson, Itron’s vice president of marketing, says, “Employee morale and belief in the company are higher than they’ve been in 11 years.”

The external perception of the brand is equally important to measure. For Itron, the metrics take on many forms, including the ongoing gathering of real-time feedback. The company also conducts year-end customer satisfaction evaluations as a way to measure progress and jump-start the next year’s brand goals.

A good set of brand metrics will enable your organization to develop the brand strategically and should follow these basic underlying rules:

  • Is it simple to use? If the data that is collected isn’t fairly straightforward, you may find that you’ll spend more time measuring the brand rather than on using the information provided by the metric.
  • Is it meaningful? To be meaningful and ultimately help improve the brand and in turn the company’s overall performance, the metric must be tied directly to either your corporate goals/objectives, or to a brand touchpoint.
  • Is it actionable? You should be able to make a business decision based on this metric.
  • Is it repeatable? The way you gather the data must remain consistent each time the metric is measured. Only consider using metrics that will need to be measured once or at most twice per year.
  • Is it touchpoint-oriented? You will need to select metrics that best measure the brand touchpoints that matter most to you. Ideally, brand metrics should be set up for each stakeholder group.

It’s important to keep in mind that, when measuring the perception and performance of your brand, the focus must be on the activities that push the organization closer to achieving its business performance goals. This, in turn, will allow you to improve the overall value of the brand. This will be effective only if the company’s brand touchpoint activities are tied directly to improving brand value.


In today’s increasingly competitive environment, businesses need to find a way to stand out from the rest of the pack. One sure way is to take a hard look at the brand and what it stands for and then make sure the structure is in place to deliver that promise across the entire organization. As the real leaders have been able to demonstrate, it pays off by creating not just a stronger brand, but a stronger business.