Opinion - Experience - Therapy

Branding: Why It Matters to Your Company

By: Ed Foster and Steve Herskovitz Friday, March 06, 2009

In 1989, the Exxon Valdez oil tanker entered Alaska’s pristine Prince William Sound, ran aground, and began spilling what eventually became a 12-square mile slick of oil. Instead of rushing to contain the spill, apologize, and communicate its actions, Exxon stalled and stonewalled. The disaster was expensive for the company as well as for the environment. The spill cost $7 billion, punitive fines were $5 billion, and the company slipped from being first among the world’s oil companies to third.

In 1990, Perrier, then the number one brand of bottled water in the US and virtually synonymous with purity, was found to have benzene contamination in one of its springs.  Through one botched communication after another, the company lost so much market share that within a few years it had virtually killed its business.

This is Brand management at its worst. But managed properly, Brand can add real and definable value. Guard the Brand, and you help the company to prosper. Damage it, and you lose hard dollars and cents value.

Everyone has a Brand, whether you’ve invested in it or not. Think of it as your “first impression” upon meeting someone, and your “lasting impression” thereafter. You cannot keep a Brand from being formed, but you can manage it.

A Brand is not simply a logo or tagline. A powerful Brand includes both messaging and strategy-driven creative. Brand is what a company believes of itself, what its customers and the marketplace think of it, and the company’s performance. These items are a hallmark of companies in the top tier of market performers. They are powerful tools in building recognition and awareness in the marketplace.

One study has determined that Brands account for more than a third of shareholder value, and are among the strongest of companies’ investor relations tools. Many European companies even list their Brands on their balance sheets as an asset with real, tangible value. Further, there is strong evidence that customers value Brand extensions – new products from companies with known corporate Brands – much more highly than they do newly branded products.

An example is Ralph Lauren, which began in 1967 as a tie manufacturer and has since moved into upscale apparel, perfume, and home furnishings – all carefully and methodically designed to convey the company’s Branded “aspirational lifestyle”. The effort has paid off in double-digit revenue increases, with current annual sales in the billions.

Strong corporate Branding is not without risk. It exposes companies to great scrutiny, because when companies go through the effort of establishing strong reputations they are obliged to live up to them. Corporate Branding also requires strategic, top-level buy-in and top-to-bottom commitment throughout the organization. It cannot be simply externally believable – it must also critically be internally executable.

But once a Brand is defined, the effort is well worth it. Strong Brands build loyalty, confidence, trust, and perhaps most importantly preference that often overcomes price barriers. Whether the goal is differentiating oneself in a crowded industry, establishing a solid launching point for products or services, or simply building internal consensus for future business decisions, a strong and well-maintained Brand will only add value for corporations’ employees, partners, and customers.


Authors Ed Foster (Foster Design Group) and Steve Herskovitz (Hammond Hill) have helped dozens of industry-leading companies formulate branding strategies that build value. Foster is Founder and President of Foster Design Group in South Natick, MA. Herskovitz is President of Hammond Hill Marketing Lab in Acton, MA.

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