Value of Marketing

Many business owners (going concern or pre-revenue) are surprised that a key starting point for MacDuff Partners' engagements, after conducting a 360° business audit, is to begin defining a company's brand. We start with "brand" based on experience that strongly demonstrate branded companies and products lead to superior profitability.

Brand is the character of a business, along with the essence of what is promised and delivered to customers every day. As important to company owners, brand strategy provides the organizing concept, a theme, from which to lead an entire company. By extension, having a clearly articulated brand integrates the company's vision and mission and is the platform for sustainable wealth creation when the company is sold.

As small business owners struggle accepting brand as the core asset for a company, it appears management of Fortune ones do as well. A recent article in Advertising Age discussed a finding that on a global basis only P&G and Reckitt Benekiser communicate the importance of brand to the bottom line. The article summarizes a global survey by the Institute of Practitioners in Advertising in the UK covering the top 50 marketing spenders on all continents.

Ad Age gives an example of P&G as a thought leader in business communication based on their annual reports. The article pointed out that P&G's marketing strategy was integrated into the company's overall business commentary. A.G. Lafley, Chairman, explained throughout the report on a brand-to-brand basis how his company's focus on innovation and understanding customer needs delivers high value. (See our discussion of customer focus.)

An analyst, Seamus Gillen, concluded:"There's a correlation between how a company talks about its business and how it runs its business. The stronger the role played by brands in generating a company's revenues, the more important it is for there to be appropriate disclosure on the role of brands in developing and delivering the value proposition." Net, net, even for publically traded companies, strong brands translate to revenue, and revenue to value, thus value to wealth.

Many books and programs are dedicated to methods and practices for developing brands. Look in the MacDuff "Resources" section from some tools to use. A terrific quick read on brand building was written by Allen Gorman, President of Brandspa, "Briefs for Building Better Brands".

All business owners must spend time re-thinking the value of their company's and product's brands. Despite day to day operating challenges, time conflicts and emotional hurdles we go through running our businesses, long term brand equity is the critical asset for wealth creation.

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