The corporations that own brands are under fire from some quarters: not the concept of brands. So far as economic and social welfare are concerned, brands provide consumer benefits of three kinds: economic (value for money), functional (quality) and psychological (personal satisfaction).
On the other side, British companies do not fully recognise the importance and significance of brands. Marketing is the business of understanding and liberating the sources of cash flow. Brand equity is the upstream reservoir of cash flow before it hits the profit and loss account. The boards of British companies spend only about 10% of their time worrying about marketing and brand equities. They need to put formal measures in place to ensure these matters go to the top of their agenda.
In world terms, British brands are dominated by American. According to Interbrand ratings, 42 of the top 75 are American, eight are British but none of those rank above 46. 73% of the total brand values are American. At 4% Britain is behind Japan and Germany, but ahead of France and other Europeans.
In the British market, four of the top ten advertising spenders are British, if Unilever can be said to be British, but none of the other three has any significant presence overseas.
This should be a wake up call to the top management of British firms. Do not look for help from the British government. With the best of intentions, government help is too often counter-productive, apart from ensuring that markets are open and fair.
Fair play for brands and consumers alike, freedom of choice and the same rules for all are important for brands in both British and foreign markets.
Many British brands are very successful. Top management has the tools both to make those more successful and to raise their game with the others. Marketing metrics are an intrinsic part of that and so is ambition. The issue is not about keeping shareholders quiet but about brand stewardship. We are talking about the shareholders’ greatest assets and they are entitled to know how their companies are going to make them greater still.
The full text of this lecture is available in the attachment below.
This article was first published on brandrepublic.com