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Jeff Swystun

Edited by

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Edited by Jeff Swystun

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The most powerful ideas are simple, and brandsadhere to the same rules. Just ask a fewpeople you know, who aren’t in the industry,and you will find that they are able to articulatethe idea behind a great brand in just a fewshort, focused words. Good branding is there-fore “easier said than done.”

Creating simple, but powerful, differentiation inthe minds of your customers, your staff, indeedall your stakeholders, requires a clear andcompelling vision that is expressed in every-thing you do; from product to service, throughenvironments, to the people you hire, and theway you talk about yourself. Maintaining suchsimplicity throughout the complex systems,processes, and politics that characterize mod-ern business is a considerable task, requiringabsolute focus, passion, and conviction. Nowonder then, that as competition increases,brands are playing an ever-increasing role inbusiness strategy.

It is now common knowledge that branding isfundamental to business success, and probablywhy our Best Global Brands league table is oneof the top three published business rankings inthe world. At Interbrand we have always placedgreat emphasis on the need for a balancebetween the logical and the creative. Brands,after all, live in our heads and our hearts.

But ultimately, brands are value generators forbusiness and this is our true obsession; usingour creativity and strategic thinking to createvalue. Indeed, increasingly we are serving theneed for a deeper understanding of howbrands generate value and the use of thatinformation to inform better business decisions.

Initially, we thought it strange to be creating aglossary, which by its nature makes complexityeasy to understand, about a subject area thatdemands simplicity! But the language ofbranding simply reflects the depth of thesubject and, as we all know, brand language isvaried, misunderstood, and often abused. Thisbook became our duty, indeed a labour of love!

With this glossary, the people of Interbrandhave set out to demystify, educate, inform, andentertain. We hope to provide a commonlanguage allowing us, the brand practitioners,owners, and otherwise interested parties, tofocus our debate and energy on improving ouruse and understanding of brands as a force for business.

A simple idea indeed.

Jez FramptonGroup Chief ExecutiveInterbrand



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Behind every great brand is a great idea

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If you are setting out to edit a glossary (and Iam quite confident that few of you are) thereare three lessons worth sharing. The first is tomore than double your original estimate of thetime required to complete such an effort. Iaffectionately compare the process to that ofcutting off a head of the mythical monsterHydra – complete one term and it producestwo more.

The second lesson is to ensure it is not the onlyproject you are pursuing. Diversions willmaintain your sanity and actually offer greatercontext. Through the process I found myself re-examining many areas that are taken forgranted, such as, how we process communica-tions and information, how we purchasebrands, and how subjectivity and objectivitycompete in decision-making. This helped shapethe content.

The third and most important lesson is to haveaccess to the leading subject matter experts. I thankfully had access to over 1,100 of my colleagues, representing different branding disciplines from all regions of the world. Their brainpower is truly impressive and I wish to acknowledge outstanding individualcontributions.

Jason Baer (New York) provided expertise innaming and verbal identity with his infectiousenthusiasm for this aspect of branding. WalterBrecht (Cologne) put himself in the place of hisclients to continually challenge the content.Jean-Baptiste Danet (Paris) provided calmguidance and support during the entireprocess. Rita Clifton (London), a recognizedexpert on global branding, offered valuablefeedback throughout. Julie Cottineau (NewYork), innovator of Brand Tango, lent a hand in

various areas. Matthew Cross (San Francisco)ensured we covered all the terms important tohis clients and students.

Alfredo Fraile (Madrid) provided a distinct andvaluable European perspective. Jan Lindemann(London), a leader in brand valuation andmeasurement, made sure we kept mattersappropriately tangible. Jessica Lyons(Melbourne) lent a hand from down under. Q Malandrino (New York) shared his expertisein brand culture. Jerome McDonnell (New York)focused on brand protection. Andy Milligan(London), author of many brand books, identi-fied current trends. Lorena Noriega (BuenosAires), who has a great passion for brandconsulting, undertook tremendous research.

Larry Oakner (New York) articulated the differ-ences between internal communications andbrand culture. Terry Oliver (Tokyo) made surethat the book took into account the rapidchanges taking place in Asia. Sam Osborn(Melbourne) was a tremendous support incontent, comment, and editing. Sarng Park(Seoul) represented the views of brand-savvySouth Korea. Re Perez (New York) providedguidance in the area of brand culture. RománPérez-Miranda (New York) offered up the LatinAmerica-Iberia perspective, a region whosebrand sophistication is growing exponentially.

Robin Rusch (New York), the first editor ofleading brand website,contributed to the online branding and brandautomation areas. Gary Singer (New York) was a great supporter and contributor to keyterms. Bev Tudhope (Toronto) helped on thenexus of branding and investor communica-tions. Thomas Zara (New York) took on termswith vigor and intellect.



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Decoding the mystery of consultant speak

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Branding has a huge creative and visualcomponent and this is reflected in the themeand design of this glossary. Chris Campbell ledthe creative direction of the book with supportfrom Gary Ludwig. Lynne Northwood developedthe original concept. John Spicer ensured thatthe dual efforts of content and design woveseamlessly together. Ronan Tiongson andMichèle Champagne designed the majority ofthe illustrations and overall layout that helpimmeasurably to bring the terms to life.

Stephen Rutt of Palgrave-Macmillan deservesthanks for his great support and even greaterpatience. Thanks to Steven Schwartz, a thirty-year veteran of written business communications,who worked on the terms and ensured qualityand consistency. A very special thanks to LisaMarsala, who worked tirelessly to see this bookto market from initial concept, to term develop-ment, to design, to marketing and promotion.

What you will find within is a great start, but itis admittedly a work-in-progress. A dictionarycan claim to be definitive while a glossary,though a respected authority, captures a pointin time in the evolution of a certain practice.We expect the glossary will require frequentupdates to stay apace with branding’s develop-ment. We also anticipate and welcomefeedback in the hope of establishing a sharedlexicon from which all can benefit. Send your

comments through andvisit to contribute tothe brand debate.

From the outset, we intended the glossary tobe a valuable companion rather than a dustyreference book forgotten on a shelf. It containsterms, illustrations big and small, facts, andrelevant quotes, all to help communicate thepractice of branding. The book is designed toinspire you to learn, question, and explore. I will know we have been successful when I seesomeone with their dog-eared copy full ofPost-its, marked pages, doodles, and scribbledideas for the next great brand.

Jeffrey SwystunGlobal DirectorInterbrand


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A valuable brand companion

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“A brand is a living entity –and it is enriched orundermined cumulativelyover time, the product of athousand small gestures.”Michael Eisner

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The Brand GlossaryPage 4

Above-the-line CommunicationsThis term refers to marketing communicationsinvolving the purchase of traditional media suchas television, radio, print, and outdoors; mediain which results can be measured. As marketingand communications options have expanded,and advertising agency compensation hasmoved from commission-based to fee-based,this term has become increasingly dated andnow reflects what traditional advertisingagencies included in their base commission raterather than what impact the media would havehad on customers.

Account ExecutiveIn advertising agencies, this term refers to aperson who is the day-to-day contact betweenthe agency and the client. Over the years, theaccount executive function has evolved to exert a more strategic influence in managingagency relationships. Newer titles such asaccount planner and relationship manager areused interchangeably with account executive.Similar terms are used in branding and designconsultancies. The fact remains that one indi-vidual from the agency or consultingorganization must assume responsibility for the satisfaction of the client.

Ad Hoc ResearchThis is a one-off type of research carried out ata specific time for a specific client. Ad hocresearch differs from longer term, ongoingstudies such as sales and profitability monitoring,satisfaction tracking, and perception rankings.

Adapted Marketing MixThis is a combination of product offerings firstmarketed in one geography that is then alteredto suit local conditions in additional markets. Asin a regular marketing mix, the adaptive mixcomprises the Four P’s of product, price,promotion, and place. Also known as distrib-ution, that is, having the product available forpurchase in the target market.

Added-valueThe tangible or intangible benefit provided by aproduct or service that generally commands ahigher price and engenders customer loyaltyand/or overall preference. Frequently, tangibleadded-value components are quickly copied socompanies and brands strive to develop intan-gible ones that are uniquely ownable and moredifficult to replicate.

Addictive ConsumptionThis is a physiological and/or psychologicaldependence on specific products or services.Consumers have been known to be addicted to every possible type of product, but addictiveconsumption more often refers to drugs, alco-hol, gambling, and tobacco. It must be noted,however, that the vast majority of consumerismis not addictive but habitual, and based on individual choice.

AdoptionThis term represents the decision by aconsumer to buy a product or use a service.The consumer weighs available information andmakes a considered choice, which implies alevel of repeat use that may result in brand orservice loyalty.

AdvertisingAdvertising is the communications that takeplace between a company and its targetaudience using any or all of the paid-for massmedia. The process usually employs theservices of various agencies, such as brandingand design consultancies, full-service advertis-ing agencies, market research firms, and


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media-buying groups. Advertising is employedto inform target markets of available goods andservices; used to remind consumers thatexisting brands continue to be available; anddesigned to create awareness and encourageloyalty. Advertising is also used to reassureconsumers that their buying choice was thecorrect one, known as post-purchase rationalization.

The practice of advertising has been classifiedas informative, persuasive, or manipulative andhas led to debate on its effectiveness and effi-ciency. This debate has created a notable shiftfrom advertising in mass media campaigns toincreasingly targeted activities that can morecredibly claim results while being less intrusivein consumer’s daily lives. The debate has alsodriven a trend toward integrated marketing,reflecting the broad mix of communicationchannels currently available.

Advertising Wear OutThis is the point when consumers becomeindifferent to an advertising message becauseof overexposure; it’s when repeated viewingsno longer have any effect. Also called consumerwear out, this can often result in a backlashagainst the offer, which is the completeopposite of the original intent.

Affinity MarketingThis is a form of loyalty development or cus-tomer relationship management designed tocement the emotional bond between consum-ers and brands. It centers on an exchange ofinformation that enables consumers to learnabout brands, while companies gain insightsinto consumers. Unlike loyalty marketing,affinity efforts do not represent an economicexchange, although third parties may benefit,such as consumers rewarding charities basedon credit card points. Affinity marketing mayalso take the form of helplines, membershipclubs, newsletters, chat rooms, and so on.

Agency of RecordA designation assigned to the primary com-munications agency responsible for some or all of a company’s or brand’s media planning,buying, and creative duties. It denotes anongoing relationship, and implies legal“agency” responsibilities, that is, the ability of the agency to represent the client toproviders and sellers of media services.

AIDA ModelThis is a “hierarchy of effect” model that standsfor awareness, interest, desire, and action, thefour successive stages a buyer passes throughwhile making a purchase decision. The modelitself refers to a working format for chartingconsumer attitudes and buying behavior.

Aided Recall/Brand AwarenessA line of questioning used in market researchthat prompts respondents about specific com-munications, brands, or services. It is designedto determine any or all associated recall andawareness, and differs from unaided recallduring which respondents are questioned withoutany specific prompts. See Brand Awareness and Recall

AIO’s (Activities, Interests, andOpinions)These are variables used in psychographicconsumer research to organize individuals intospecific segments. The variables used for thesegmentation are activities, interests, andopinions, and this research is designed tounderstand buyer behavior rather than just pure demographics. See Psychographic Segmentation


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AlignmentAlignment is achieved when employees understand and demonstrate a company’sbrand and its values through their behavior and actions. It is an increasingly critical aspect of branding as it ensures that the brand experience matches and aligns withthe promises made through external communication. Employees are recognized andrewarded based on their adherence to brand objectives so that consistency, a keyaspect of branding, is delivered.

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Alphanumeric NamingThe practice of assigning letters and numbersto differentiate brand names among versions ofproducts. These products are often related, andthe alphanumeric system communicates a hierarchy of value and/or delineates productrelationships. For example, models of cars oftenhave alphanumeric names as evidenced by theBMW car naming system.

AmbassadorsThese are individuals who represent a brandbut are not directly tied to marketing communi-cation functions. Every employee is expected tolive the values of the brand, but brand ambas-sadors go a step further and promote its valuesthroughout the organization even though theymay work in finance, operations, logistics, andso on. See Champion

AnalyticsIn business, analytics is a term used for sophis-ticated forms of business data analysis. Inmarketing and branding, a variety of statisticaland non-statistical methods are used. The valu-ation of branding and marketing activities isbecoming increasingly topical. Brand valuation,return on brand and marketing investment, andbrand scorecards are being introduced asprescriptive tools for improved businessperformance. These promote better decision-

making and add scientific support to areaswhich have largely been guided by intuition andpast experience.

Anchor StoreThis is a major retail store that serves as theprime attraction for shoppers in a mall. Thereare often two anchor stores, placed at eitherend, intended to encourage large numbers ofcustomers to visit the mall, and to generatetraffic for all the stores in the facility. Mallbranding can rely on the image of the anchorstores but runs the risk of overreliance if thosestores were to leave that location.

Annual ReportThis is a yearly record of a publicly heldcompany’s financial condition that is presentedat its Annual General Meeting for approval byshareholders. It normally includes a profit andloss statement, a description of the company’soperations, a balance sheet, and a report fromthe company’s auditor and president. Anannual report is designed for investors tounderstand a company’s current status andfuture plans. This publication often acts as acorporate brochure so the content and designare reflections of the brand.

Architecture See page 8

Art DirectorIn the advertising and branding worlds, an artdirector is responsible for the look and feel of aprint ad, brochure, company logo, or interactivecampaign, and, in a TV commercial, for itsvisual style. Traditionally, an art director’s coun-terpart is a copywriter who, obviously, writesthe words. Either or both of them may createan original idea for a brand that develops intosome form of customer communication.


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ArchitectureBrand architecture is how a company structures and names its brands and how all the brand names relate to each other. Architecture is a critical component forestablishing strategic relationships, and there are three types: monolithic, where thecorporate name is used on all products and services offered by the company;endorsed, where all sub-brands are linked to the corporate brand by either a verbalor visual endorsement; and freestanding, where the corporate brand operates merelyas a holding company, and each product or service is individually branded for itstarget market. There are multiple variations of these three primary structures. The keyrequirement is that any architecture be devised with the customer as primary focus,rather than by internal influences such as accounting, people organization, or history.

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ArtworkDigital files of a design or logo that are readyfor print or production. Design work will beartworked following design approval. The art-work file ensures the correct size specification,resolution, colors, fonts, and optimum layoutbefore handing over for print or production.

AssetSomething that possesses attributable valueand earning potential for its owner. There arethree asset types: current, fixed, and intangible.

AssociationsThe positive and negative feelings, beliefs, orknowledge consumers have about a brand,whether purchased or not. These associationsare formed by mass media, word of mouth, trialuse, and/or repeat use. Positive ones are lever-aged, while negative ones are often difficult toovercome once they have taken root.

AttitudeA lasting, but general, evaluation of an object.Attitudes may cover brands, products, services,organizations, advertisements, innovations,ideas, issues, activities, opinions, and individu-als, and they are formed by what consumershear and what their actual experience is.

Attributes Attributes are characteristics of a company,product, or service. They can be either positiveor negative and can be functional (what aproduct does) or emotional (how it makes aperson feel). Attributes are measurable and canbe benchmarked versus important competitors.If attributes are what a brand has, then benefits(what the brand does for a customer) are whycertain attributes are important. Much marketresearch is focused on understanding the mostimportant and powerful attributes of a product,service, or brand.

Audience MeasurementThis is surveying consumers’ media habits,including viewing, reading, listening, and usage.Audience measurement tracks trends and takesplace over time or at marked intervals. Theresulting insights have historically been basedon behavior tracking, but now include monitor-ing consumer satisfaction. The objective is todetermine attitudes and adjust products andservices accordingly.

AuditAn audit is a comprehensive, systematic, inde-pendent, and periodic examination of anorganization’s performance. A brand auditspecifically verifies performance, internal andexternal communications, customer experience,and so on. The results identify performancegaps, competitor advantages, and marketopportunities. An audit is a blend of art andscience employing quantifiable and qualitativedata based on business and brand strategies.See Qualitative and Quantitative Research

AwarenessAwareness is the degree of a consumer’sknowledge about a specific brand. There areboth quantitative and qualitative research tech-niques used to determine consumers’ ability toidentify a brand versus competitors in sufficientdetail to make a purchase. Brand awareness isa common measure of the effectiveness ofmarketing communications. Unaided awarenessis spontaneous, while aided or promptedawareness is when a brand is recognizedamong others that are listed or identified. See Aided Recall and Brand Awareness, and see Qualitative and

Quantitative Research

Brand Fact:80 percent of companies believe theydeliver a superior customerexperience, but only 8 percent oftheir customers agree, according toBain & Company.

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Brand Fact:On average, prices ofprivate-label goods ofall sorts are approximately27 percent below brandedproducts, based onresearch from InformationResources Inc.

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Balanced Scorecard A technique originated by authors Kaplan andNorton for measuring business performance. Itis based on evaluations of financials, markets/customers, internal processes, and organiz-ational learning and growth. The model is beingadopted and adjusted for brand managementand measurement. The quadrants are adjustedto make it more specific to the brand orgeneral communications.

Banner AdvertisementThis is an announcement that stretches acrossthe entire width of a printed or website page. It is either static or animated and, on webpages, often offers a click-through to accessfurther information.

Barrier to Entry Any defendable factor a company can use tofend off competitors is called a barrier to entryand they can be legal, natural, sunk investment,tactical, good business practices, or brand. Theexpression can also refer to the costs forsomeone new to enter a marketplace.

Barrier to ExitA company’s inability to withdraw from certainmarkets or actions, or to redeploy associatedresources to more valuable activities. It may bedifficult to withdraw without retiring a portionor the entire initial investment.

Basic ElementsThese are the essential tools that build a visualidentity. They consist of a name, logotype,symbol, typeface, color palette, style of imagery/photography, and tone of voice. Each of theseelements is combined to create an identitysystem for a brand.

BCG MatrixOriginated by the Boston Consulting Group,this construct has been widely adopted toexplain and guide portfolio management. It wasoriginally developed to chart entire businessesor divisions, but it is now being applied tocustomer segments, brands, product groupings,geographies, and so on.

BehaviorsThe obligatory behaviors that underpin the brandplatform and values. These behaviors havemeaning at the corporate and individual leveland their adoption will ultimately determine thespeed (and/or likelihood) of cultural change.

BeliefBelief is a descriptive thought people haveabout a product, service, innovation, idea, issue,company, or person – whether or not they’vehad direct interaction with any of them. Beliefand attitude can be confused because they’reoften used interchangeably, but an attitude isevaluative while a belief isn’t.

Below-the-line CommunicationsThis is a term used for communications thatdon’t involve the purchase of media. Withcommunications becoming more integrated,


Regard your good name as the richest jewelyou can possibly be possessed of – for creditis like fire; when once you have kindled it youmay easily preserve it, but if you once extinguishit, you will find it an arduous task to rekindle itagain. The way to gain a good reputation is toendeavor to be what you desire to appear.”Socrates

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this and above-the-line communications arebecoming less and less accurate descriptors.Below-the-line activities may include publicity, direct marketing, promotions, andmedia relations.

BenchmarkingBenchmarking is a performance comparison.The most typical form takes place versuscompetitors or within specific industries. Itsorigins are in manufacturing, but it has beenadopted in other industries, functions, andspecific measurements. Benchmarks can bemisleading if not taken in their proper contextor in concert with additional variables thatdemonstrate a more complete picture of thesituation being examined.

Benefit SegmentationA method of dividing (segmenting) marketsbased on what individual groups want from abrand. For example, the market for beer mightinclude a segment for light beers, another fordark beers, another for pale ales, another forimported brands, and so on.

Best Global BrandsThis is an annual performance report on theeconomic value of the world’s leading brandsproduced by Interbrand employing a proprietarymethodology. Expressed in dollars and as a

percentage of market capitalization, the reportranks the top 100 brands using publicly avail-able data on brands with values greater thanUS$2 billion and which have significant salesoutside the country of origin. Public relationsfirm, Burston-Marsteller, conducted a study onwhich rankings global CEO’s pay attention toand the Best Global Brands was number three.Interbrand also conducts over ten country-specific brand rankings including France,Taiwan, and Brazil.

BoilerplateA largely consistent set of written communic-ations that is repurposed multiple times.Boilerplate is often used to produce collateralsor for frequent and similar responses torequests for proposals. Considered a timesaverand consistency tool, boilerplate is also danger-ous as it may be overly generic or inaccuratefor certain audiences and purposes.

Bottom-up PlanningThis is when senior management request plansfrom more junior departments or managers forinclusion in corporate or marketing planning.The process is meant to inspire less seniorlevels to achieve performance targets since theyare actively involved in the planning process. Itis the opposite of top-down planning, wheregoals and objectives are set by senior manage-ment and are handed down through the ranksto be achieved.

BrainstormingAfter an issue or opportunity is presented,stakeholders, subject matter experts, and/orcompletely objective participants are organizedto have a “brainstorming session,” a free-formdiscussion designed to achieve consensusabout a solution and required next steps.Various methods of facilitation are employed tomanage the process and its success oftendepends on the skill of the facilitator.

Brand Fact:McDonald’s has over 30,000eateries globally. Starbuckshas over 9,000 with a planto expand to 30,000 based onsales projections and potentialgeographic locations. Theubiquitous coffee shop opens3.5 stores per day.

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BrandA brand is a mixture of attributes, tangible andintangible, symbolized in a trademark, which, ifmanaged properly, creates value and influence.“Value” has different interpretations: from amarketing or consumer perspective it is thepromise and delivery of an experience; from abusiness perspective it is the security of futureearnings; from a legal perspective it is a separ-able piece of intellectual property. A brand isintended to ensure relationships that create andsecure future earnings by growing customerpreference and loyalty. Brands simplify decision-making, represent an assurance of quality, andoffer a relevant, different, and credible choiceamong competing offerings.

Brand AwarenessBrand awareness is commonly used in market-ing communications to measure effectiveness. Itinvestigates how many target customers haveprior knowledge of a brand as measured bybrand recognition and brand recall. Brandrecognition (also called aided recall ) measuresthe extent to which a brand is rememberedwhen its name is prompted; for example, “Areyou familiar with the Sony brand?” Brand recall(also called unaided recall ) refers to a cus-tomer being able to remember a specific brandwhen given a category of products withoutmentioning any of the names in the category.

Brand BookA unique articulation of the brand in bothwords and visuals which brings the brand andits story to life. Usually directed at internalaudiences, brand books are now developed totell the brand’s story for all constituents fulfill-ing a pledge to be consistent in execution.

Brand BriefThis is the planning document for any brand-building project. It sets out the goals, objectives,competitive landscape, current capabilities and performance, timelines, and budget. It

ensures that all stakeholders are aligned toanticipated change and that a sound businesscase is in place to make any significant changesto the brand.

Brand Commitment The degree to which a customer is committedto a given brand in that they are likely to repurchase/reuse in the future. The level ofcommitment indicates the degree to which abrand’s customer franchise is protected fromcompetitors.

Brand CultureThe Interbrand practice and overarchingprocess of ensuring that the employees of anorganization are the first audience to beexposed to and deeply understand what thebrand is meant to achieve. Incredibly, for manyyears, the internal audience was the last toknow about the brand, and that causedperformance issues as these were the individ-uals who were meant to deliver on the promisemade through external communications. Thisspecialty within branding goes far deeper thaninternal communications and launch events. Itinvolves human resource practices encompass-ing rewards and recognition, compensation,and career path development.

Brand CycleThe process Interbrand uses to create andmanage a client’s brand as a valuable asset. Itoutlines the breadth of services and associatedbenefits. It commences with an evaluation of anexisting brand or the creation of a new one andtakes the owner through a robust strategic andcreative series of interventions meant to delivera clear return on brand investment.

Brand EarningsThese are the profits that can fairly be attributedsolely to a brand. They result from the revenuesthe brand generates, and are distributed bydividing the profits between all assets or parties


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that contribute to generating it. This profit splitapproach is the most widely used and recog-nized method for assessing the economic valueof a brand and is employed by the majority ofaccountants and consultants. It is alsobecoming the standard accounting method forcapitalizing goodwill on the balance sheet.

Brand EquityBrand equity is the sum of a brand’s distin-guishing qualities, and is sometimes referred toas reputational capital. A product or servicewith a great deal of brand equity enjoys acompetitive advantage that sometimes allowsfor premium pricing.

There are different definitions of the term indifferent markets. In the UK, brand equity ismainly used to describe market research-basedmeasurement and tracking models that focuson consumer perceptions. In the US, it is usedfor both research and financially based evalua-tion models. These models use consumerresearch to assess the relative performance ofbrands. They do not provide a brand’s financialvalue, but they do measure consumer behaviorand attitudes that have an impact on a brand’seconomic performance. Some models addbehavioral measures such as market share andrelative price.

Brand Equity InsightsA quantitative evaluation of the three compo-nents that comprise the equity of a brand:knowledge (familiarity, awareness, relevance),distinction (personality of the brand), andcommitment (credibility, loyalty, satisfaction).This proprietary research methodology fromInterbrand produces an understanding of themarket structure and the factors that driveloyalty and commitment within that structure.

Brand EssenceThe brand’s promise expressed in the simplest,most single-minded term. For example, Volvo =safety; AA = Fourth Emergency Service. The

most powerful brand essences are rooted in a fundamental customer need.

Brand ExperienceSee page 16

Brand (or Product) ExtensionThis is the use of a well-known brand to launcha new product into a different segment of itsoverall market. For example, Jello went tomarket with Jello Instant Pudding as a brand orproduct extension. The benefit of this strategy isclear through leveraging existing equities,however, if the extension is too far away fromthe original category it may actually impact thereputation and value of the original brand.

Brand GuidelinesWithin companies, everyone involved inbuilding and maintaining a successful branduses brand guidelines. They are designed toinform and motivate, and are critical in estab-lishing and reinforcing a strong internal brandculture. Guidelines can include vision andvalues, design and writing requirements,strategy and positioning statements, and even acompany directory of how to contact a brand’skey managers. The guidelines are part enforce-ment and part motivation to ensure a consistentexecution of the brand. They provide full infor-mation and empower staff and third-partysuppliers to successfully develop the brandindependently.

Brand LicensingThis is a brand owner leasing the use of itsbrand to another company, most often for a feeor royalty. Though an attractive stream ofrevenue, it is important for the brand owner toensure that the equities of the brand areprotected so that the licensee does no damageto the brand over the term of the agreement.


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Brand ExperienceThe means by which a brand is created in the mind of a stakeholder. Someexperiences are controlled, such as retail environments, advertising, products/services, websites, and so on. Some are uncontrolled, like journalistic comment and word of mouth. Strong brands arise from consistent customer interactions that combine to form a clear, differentiated, holistic experience.

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Brand ManagementThe process of managing a company’s brandsto increase long-term brand equity and finan-cial value. It was originally invented andchampioned by Procter & Gamble as acompetitive system for managing individualbrands within a portfolio. Today, however, it isdefined more widely and encompasses strategy,design, and deployment of an organization,product, or service. Organizations are increas-ingly investing in branding for competitiveadvantage, and this is forcing re-examination oftraditional marketing departments, resulting inmore responsibility for the chief marketingofficer or senior marketing executive. Sophisti-cated branding organizations employ brandvalues as guideposts across all functions,ensuring consistent behavior, decision-making,and performance.

Brand ManagerAn individual responsible for the performance ofa product, service, or brand. The brand managermay also oversee a portfolio of brands, aligningthem for maximum effectiveness; ensuring theyaren’t compromised by tactical errors; anddesigning crisis management plans. He or shemay report to a more senior member of theorganization such as a vice president or chiefmarketing officer.

Brand PlatformAn Interbrand construct for positioning thatoutlines the goals of an organization, product,service, or brand. A brand platform calls for adeep understanding of what differentiates abrand and makes it credible and relevant todefined target audiences. It also requiresinformed decision-making regarding a brand’sability to stretch beyond its initial category andcompetition. The platform comprises:

• Brand vision: the brand’s guiding insight• Brand mission: how the brand will act on its


• Brand values: the code by which the brandlives. The brand values act as a benchmark tomeasure behaviors and performance

• Brand personality: the brand’s recognizableand ownable personality traits

• Brand tone of voice: how the brandcommunicates to its audiences.

Brand PositioningPositioning is the unique, strategic location ofthe brand in the competitive landscape. Itestablishes communications to consumers in a way that sets it apart from the competition,ensuring that consumers can differentiatebetween it and others. Basically, positioning isthe place in the marketplace that a brand’starget audience believes it occupies throughthe offer of tangible and intangible benefits.

Brand Positioning StatementThis serves as a company’s internal guide to itsmarketing communications strategy concerningan individual brand. It sets out the benefits andassociations that set the brand apart from itscompetition in a meaningful way. A brand posi-tioning statement includes the words, pictures,and/or images that create a common under-standing, and aligns beliefs and actions.

Brand ProtectionBrand protection refers to the legal steps takento register the uniqueness of a brand andprotect it as an asset. Pepsi-Cola has regis-tered its product formulas, packaging shapes


Brand Fact:The International Chamber ofCommerce estimates that the counterfeiting industrycomprises 5 to 7 percent ofglobal trade and is worthroughly US$450–500 billion.

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Brand ValuationBrand valuation assesses the financial value of a brand. Although there is a widerange of methods available, the “economic-use” approach is now the most widelyrecognized and applied. Economic use assesses the value of a brand by identifyingits future earnings and discounting them to a net present value using a discount ratethat reflects the risk of those earnings being realized. The economic-use approachwas developed by Interbrand in 1988. The methodology integrates structured marketand brand assessment with rigorous financial analysis.

These valuations drive management decision-making in many areas; optimizedbusiness investment, portfolio management, licensing, tax planning, litigationsupport, and mergers and acquisitions transaction support.

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and designs, website addresses, advertisingslogans, and so on, to ensure that it protects allPepsi’s associated distinctiveness.

Brand StrategyBrand strategy is a “big picture” plan, a clearvision and articulation of how a brand willdeliver distinctive and relevant benefits to targetcustomers. An effective brand strategy answersfive critical questions:

1. What are the most profitable customersegments to which the brand must appeal?

2. What is the single-minded value propositionthat is going to compel these high prioritycustomers to repeatedly choose the brand?

3. Why should these high priority targetsbelieve in the brand?

4. What are the facts that support the valueproposition?

5. How do we communicate and implement thebranding, marketing, and operational plan soemployees and sales channels will adopt it?

There is no prescription or template for devel-oping a brand strategy. Many different modelsexist, but all should be rooted in the brand’svision and driven by the principles of differen-tiation and sustainable customer appeal. Andthey must be based on specific industry andcompetitive variables.

Brand StrengthA portion of Interbrand’s brand valuationmethodology, this is a detailed assessment todecide if the brand’s forecast earnings will berealized. A discount rate is determined based

on the risk premium for the brand. This resultsin the net present value of brand earnings.

Brand TangoBrand Tango is a proprietary approach toconsumer branding developed by Interbrand.Its intent is to generate breakthrough ideas byapplying best practices from winning brandsoutside a client’s category to inspire freshthinking. It is accomplished through therepeated and multiple pairing of brands insymbiotic, yet often unexpected, combinations.Brand Tango itself takes its inspiration from theArgentinian tango. The tango is a danceexecuted with passion and style, where eachmovement is carefully choreographed and theoutcome of each dance is uniquely dependenton the interaction and synergy of the two indiv-iduals dancing. This makes it the perfectmetaphor for an approach to innovation:inspired combinations of brands for breath-taking results.

Brand Valuation See page 18

Brand ValueThis is the dollar premium resulting fromcustomers’ commitment to a brand and theirwillingness to pay extra for it as compared to ageneric offering in the same category. It is thefinancial worth attributable to the brand, and it

If this business were split up, I would give you the land and bricks and mortar, and Iwould take the brands and trademarks, and I would fare better than you.”John Stewart, Former CEO, Quaker

Brand Fact:Forrester Research found thatword-of-mouth, viral, or buzzmarketing reaches up to 46 percent of North Americanconsumers.

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demonstrates the value of the brand (or portfolio of brands) as part of a corporation’sintangible assets.

Brand Value CalculationBrand value is the net present value (NPV) ofthe forecast brand earnings, discounted by thebrand discount rate. The NPV calculationcomprises both the forecast period and theperiod beyond, reflecting the ability of brandsto continue generating future earnings. Thiscalculation is part of the proprietary Interbrandvaluation method and helps determine theeffect of marketing strategies, communicationbudgets, return on brand investment, and otherkey business and brand decisions.

Brand Value ManagementInterbrand’s methodologies for creating andmanaging brand value. This is a comprehensivearray of services and tools employed to positiona brand now and into the future. The goal is toensure loyalty from defined target audiences todeliver economic benefits to the brand owner.

Brand ValuesThe small number of descriptive behaviors that the brand is to exemplify. These are torepresent the company, brand, and employees.Examples include passion, inventiveness,respect, honesty, and/or collaboration. was established in February2001 by Interbrand and is an online magazinecommitted to providing a global brandperspective. publishesoriginal articles and papers on a weekly basis,and challenges readers to think about theimportant issues that affect brands now andthat will affect them in the future. To furtherenhance brand awareness, the magazine offerstools and information, including conferences,courses, and careers worldwide, and links toother valuable industry resources.

BrandingThis is the strategic and creative practice ofcreating brands and managing them asvaluable assets. See Brand and Brand Management

Business-to-business BrandingThis is brand building and communicationsinvolving inter-business buying and selling. Thesubstance of the communications focuses onrelationships, account management, and solu-tions. Sales cycles tend to be longer and morecomplicated since the size of the transactionstends to be large. An example would be a tech-nology consultant selling a large systemsintegration program to a global financialservices organization.

Business-to-consumer BrandingThis is brand building and communicationsinvolving consumers. Although this activity hastraditionally employed mass-market communi-cations, business-to-consumer brands are nowusing more targeted communications for effec-tiveness and efficiency.

Buyer BehaviorThis is the action taken by consumers duringthe purchasing process, which includes consid-eration, trial, repeat purchase, and loyalty.Understanding the thought processes ofprospective and existing customers allowsorganizations to tailor their offers and commu-nications to facilitate purchase decisions.

Buzz See page 21


Brand Fact:Consulting magazine cites the threemain reasons why clients selectconsultants: understanding of specificneeds, depth of functional expertise,and depth of industry experience.Price was fourth.

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BuzzThis is a term that refers to media and public attention about a product or service. Ifthere’s a great deal of buzz, the brand managers are doing something right … but ifthe silence is deafening, then it’s back to the drawing board. Buzz marketing isbased on this phenomenon, and relies on people passing along product informationand recommendations to family and friends. See Viral Marketing

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“The aim of marketing is to know and understand the customer so well that theproduct or service fits him and sells itself.”Peter F. Drucker

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CannibalizationWhat is called cannibalization occurs when abrand extension or line extension takes salesaway from existing and established brandsowned by the same company. Overlap betweenbrands is not unusual, since consumersegments within a product category tend tohave some commonality. But the risk in thisoverlap is that higher margin brands may benegatively affected by lower margin ones, result-ing in overall losses of revenue and brand value.

Category ManagementCredited to Procter & Gamble, this system wasintroduced in the 1980’s as an improvementover brand management. In brand manage-ment, managers are very entrepreneurial andpay little attention to competition with otherbrands owned by their company in the same orrelated categories. On the other hand, categorymanagement broadens managers’ responsibili-ties so they are responsible for the category’sand the brand’s overall financial well-being.They manage cannibalization (see above), opti-mization, and cross-promotion situations.

Cause BrandingCause branding relates to a for-profit organiz-ation aligning itself with a charitable cause toshare mutual benefits. The cause is generallyan existing nonprofit organization that sharesvalues, beliefs, and audiences with the for-profit. This is often the most visible act ofcorporate philanthropy and social responsibility.With the increasing sophistication of consumerresponse to shallow communications, alignmentwith a nonprofit organization must be a strat-egic and long-term commitment on behalf ofan organization, service, or product.

Challenger Brand A challenger brand is a non-market leader thatmakes a strong effort to take market shareaway from its competitors, or a brand that

already has a strong presence but is trying totake over the leadership position.

Chain of Experience All individual and potential touch points acustomer can experience when interacting witha brand. These involve all five senses and mustbe managed holistically to ensure that thebrand promised is the brand delivered. Thechain of experience is frequently modeled todetermine benefits prior to investment.

ChampionOne step beyond brand ambassadors, brandchampions are individuals within a companywho spread the brand vision and values andcultivate the brand within their organization.This informal role varies from stimulatingawareness, to cases where the champion triesto move a project forward despite the exis-tence of entrenched internal resistance. Themore employees a company can turn intobrand champions, the better it will beequipped to build and maintain strong brandequity. For example, Harley Davidson, Nike,and Google all have well-deserved reputationsas companies with strong brand champions. See Ambassadors

Brand Fact:The New York Times reports that80 percent of all global brandsnow deploy a strategy for the“tween” segment.

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Channel of CommunicationThe three primary components of any commu-nications program are message, audience, andchannel. Channels are communication vehiclesand they include websites, brochures, salesforces, television, radio, newspapers, publicspeaking, publishing, and so on. Choosing theappropriate channels is a significant part of anycommunications strategy, plan, and execution.Channel choice is meant to determine the mostefficient and effective means of reaching targetaudiences with specific messages.

Chief Marketing Officer (CMO)A relatively new title in the corporate hierarchy,the CMO generally has responsibility for allexternal communications and holds primaryresponsibility for brand management execution.It is widely believed that the chief executiveofficer should “own” the brand but the CMOensures strategic, creative, and consistentexecution of the brand strategy.

Choice Choice is the decision made by consumers toselect a particular brand from a range ofbrands with similar features, benefits, andcosts. A choice set is the final group of brandsfrom which consumers choose, and a choicemodel is an effort that tries to understand howconsumers use and combine information aboutvarious products or services so they can chooseamong them.

ClutterThe sheer number of advertisements andmessages competing for consumer attention in

the same medium or place is referred to as“clutter.” In order to rise above the clutter andshowcase product and service benefits, moreinnovative and targeted forms of activities arenecessary. The traditional media are often nolonger enough to effectively penetrate forawareness and choice.

Co-brandingThis is a strategy that leverages together two or more brands to form a more compellingoffer than either could alone. In order to besuccessful, however, the two brands must be complementary and jointly promoted to consumers identified as most likely to benefitfrom the arrangement.

Cognitive DissonanceThe state of anxiety or unease that follows adecision to purchase and creates a need forreassurance that the decision was correct iscalled “cognitive dissonance.”

CollateralThis is marketing and sales promotional printmaterial. Collaterals are often synonymous withbrochures that communicate relevant informa-tion to target audiences in order to increaseawareness, promote purchases, and/or providepost-purchase validation.

ColorColor is an emotional and subjective compo-nent of every company’s design andcommunications. Without even being aware ofit, consumers make purchase decisions everyday based on their attitude toward color.People tend to identify with certain colors andmarketers use color to identify a brand, set amood, communicate specific associations, anddifferentiate one brand from another.


A house of brands is like a family, each needs a role and a relationship to others.”Jeffrey Sinclair, Brand Strategist

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CommodityIn economic terms, commodities mean allgoods and services. In branding, however, acommodity is a product or service that tends to compete solely on its functional attributes.Brands create tangible and intangible associa-tions which allow for significant differentiationfrom alternatives and, therefore, greatersecurity, revenue, and profit.

CommunicationCommunication is transmitting and exchanginginformation by writing, speaking, electronicmeans, and the like. It is also the process ofestablishing a commonly understood meaningof facts, thoughts, and opinions betweensenders and receivers.

Communications AuditA review of the portfolio of internal andexternal communications in terms of their lookand feel, tone of voice, and consistency ofmessage, visual or otherwise. This provides aninsight into the current strengths and weak-nesses in communications and where theopportunities lie for future communications.

Community A brand community is everyone inside andoutside a company who is somehow involvedwith building a brand, from internal depart-ments, suppliers, and the media, to customers, prospects, and advertising andpublic relations agencies.

Competitive AdvantageThis is the above-average performance of acompany, product, or service that results inadditional profits. These additional profits aretypically reinvested to maintain continuousadvantage over competitors.

Competitive LandscapeAlmost every brand exists in a competitive envi-ronment that is constantly being modified bytime and changing consumer preferences.Effective brand management requires brandowners to examine their brands regularly, andto understand that future threats may not comefrom brands on the radar screen now, but thosethat will become challengers in the future.

CompetitorCompetitors are brands that are vying with eachother for success in the same market – brandsthat are considered viable alternatives byconsumers because they can provide satisfac-tion almost equally well. Competition-orientedpricing is when a company decides on a pricebased more on what a powerful competitorcharges than on consumer demand or produc-tion costs.

Competitor AnalysisThis analysis is usually focused on a company’sclosest competitors. The goal here is to under-stand the resources, practices, and results thatset a competitor apart. These can then beemulated, countered, or marginalized, based onstrategic actions.

Concept Development and TestingWhen potential buyers are shown the descrip-tion of a new product and asked for theirreactions, and then, at a later date, shown a prototype of the product and asked for additional feedback. See Prototype

ConditioningVarious marketing and advertising actionstaken by a company to develop and foster a favorable impression of its brand in its markets. Consistent communications arerequired in order to introduce and educate the consumer concerning the brand and itsassociated benefits.

Brand Fact:Frank Perdue’s chicken slogan,“it takes a strong man to make atender chicken” was translatedinto Spanish as “it takes anaroused man to make a chickenaffectionate.”

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Consideration Set This is the array of available brands in acategory from which consumers can choose.Consumers form it in a rational and deliberatemanner, focusing on the functional aspects ofthe brands. Once established, the considera-tion set remains largely stable and follows itsown version of the law of diminishing returnswhere choice is impaired when more brandsare added.

ConsistencyConsistency has two meanings in branding:first it refers to the implementation of a brand’svisual identity and tone of voice across allcustomer touch points. BMW is perhaps thebest example of a brand whose visual identityand tone of voice is implemented consistentlyaround the world – from the correct placementof its logo, to the correct design format of itsdealerships. Second, consistency is a qualitativeand quantitative measure of a brand’s ability torepeatedly deliver the experience it promises toits customers. For example, Coke’s product isconsistent both over time and internationally,and Apple computers have consistently deliv-ered a user-friendly experience targeted at thecreative market.

Conspicuous ConsumptionThe overt display of a consumer’s ability toafford luxury brands is called “conspicuousconsumption.” The term was developed byAmerican economist Thorstein Veblen and nowrelates to brands symbolizing a consumer’sstatus in society. Brands as status symbols haverecently been extended beyond luxury brandsto include icons embraced by brand loyalists,such as Starbucks and Adidas.

ConsumerA consumer is the ultimate user of goods,ideas, or services who acquires for direct useand ownership, rather than for resale or otherreasons. The term also refers to the finaldecision-maker and, in this sense of the word,doesn’t differentiate whether a person is acurrent or potential buyer.

Consumer Choice ModelThis is a construct that tries to understand howconsumers use and combine information aboutvarious products or services so they can chooseamong them. It identifies a hierarchy of decision-making encompassing benefits, image, price,ease-of-use, and so on.

Consumer-perceived RisksWord-of-mouth information about a product,service, or brand. They tend to relate toperformance issues and can affect aconsumer’s perception of risk prior to decidingwhether or not to buy.

Consumer/Product RelationshipThis is understanding how a particular brandrelates to an individual consumer’s goals andvalues. Understanding this relationship is basicto developing effective market strategies.Loyalty is the ultimate goal of branding and byunderstanding this relationship, brand ownerscan more accurately match brand to buyer.


Every company has its own language, its ownversion of its history (its myths), and its ownheroes and villains (its legends), both historicaland contemporary.”Michael Hammer

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Consumer ProductsThese are tangible goods produced for finalconsumers, not for businesses. Typically,consumer products are heavily branded, widelyadvertised, and distributed through recognizedretail channels. Well-branded consumerproducts condense the decision process forconsumers by simplifying choice. However,competition in long-established markets isintense, demanding constant brand revitalization.

Consumer ProfileThis is all the distinguishing demographic,lifestyle, and personality characteristics ofconsumers in a particular market segment.Brand values can be mapped to these distin-guishing characteristics for more accuratecommunications to promote adoption andsustained use leading to loyalty.

Consumer Purchasing ProcessThis is the entire process a consumer goesthrough before making the decision topurchase a specific brand. It comprises:

• Awareness (understanding there is such a brand)

• Interest (learning more about its value) • Desire (comprehending the need for it) • Action (making the purchase decision)• Post-purchase evaluation.

Marketers will use different tactics to moveconsumers from step to step. Specific measuresof success must be developed against eachstep to gain clear understanding of effectiveand efficient branding and marketing practices.

Conversional MarketingThis is an activity designed to get consumers to change their minds, ideas, or attitudes abouta product. This is usually accomplished byoffering it at a lower price, or by increased orspecially designed advertising and promotion.The term also means converting qualifiedprospects into active clients.

Cooperative AdvertisingThis is an agreement between a manufacturerand a retailer to reimburse the retailer in full orin part for placing manufacturer-produced adsand commercials locally, with the understand-ing that their name will be included in the copy.Co-op advertising can also refer to a jointeffort between two or more businesses to pooladvertising money for more buying power. Inthis case, the ads would feature both companynames and benefits. From a branding perspec-tive, the quality and image of the two playersmust be commensurate and offer mutualbenefit in communications.

CopyIn a branding context, copy refers to thespoken words in a commerical, or the writtenwords in advertisements, magazines, news-papers, or any marketing communicationsvehicle. Copy must be compelling, impactfuland fast to grasp given the proliferation ofcommunication and messaging in business.Specific to branding, copy must adopt a distincttone of voice that helps to draw immediate andclear associations with the brand.

CopyrightA legal device designed to protect work/product from being used without authorizationis called a “copyright.” It is recognized by itssymbol © and guarantees the creator’s legalrights. In theory, it automatically ensurescreator/owner control, but it demands that thework be in a tangible form; that is, ideascannot be copyrighted.


A great brand is a story that’s never completely told.”Scott Bedbury

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Copy TestingAn effort to evaluate consumers’ reactions tothe effectiveness of communication messages.It can happen while a campaign is being devel-oped (pre-testing), during a campaign, or afterit has been launched (post-testing).

Core CompetenciesCore competencies are what a company doesbest, a particular set of skills that contributesmost to its ability to succeed and enables it to deliver benefits to consumers and achievecompetitive advantage. These are generallyintangible attributes that are difficult to copy,thus forming a great part of the brand’s overall uniqueness.

Corporate IdentityThis is a corporation’s brand and it is com-municated through the combination of theorganization’s name and its use of visuals(logo/color/artwork). Furthermore, corporateidentity includes all an organization’s support-ing communications elements such as tone,manner, graphic structure, and music.

Council A permanent working group within a companythat guides and manages the building of abrand, evaluates its success or failure, andtakes steps to reinforce the former and correctthe latter. It should be representative of allinternal stakeholders rather than solely repres-enting marketing and/or customer service. Thecouncil is most effective when empowered tomake change and when it reports to the CMOor equivalent.

Counterfeiting Occurs when an organization or individualproduces an inferior and cheaper product thatlooks like a branded product and is packagedand presented in a manner to deceive thepurchaser. This damages the true brand and

continues to be a significant issue globally. InChina, counterfeits of luxury brands like LouisVuitton proliferate.

Country of OriginThis is the country from which a well-knownand supported brand originates. Long-termtheory has assumed that a brand is partiallyevaluated or chosen based on where it’s from –fine leather goods from Italy, for example, ortimepieces from Switzerland. Current theory,however, is overturning the importance ofcountry of origin as consumers assign moreweight to the quality, convenience, and cost of the brand.

Creative StrategyThis is an outline of the brand messagecompanies want to convey to target audiences.It is the set of guiding principles art directorsand copywriters follow when creating advertis-ing or marketing communications campaigns.Sometimes, creative strategies are called brand platforms.

CredibilityCredibility means that customers believe abrand will deliver what it promises. It is chieflyearned through consistency over a period oftime, but it can also be achieved, in the shorterterm, by the persuasiveness of communications.Credibility is arguably the most important criterion a brand can have. Any erosion ofcredibility impacts reputation and equity andwill impact the financial performance of a brand.

Crisis ManagementA well-rehearsed contingency plan used bycompanies to respond to unexpected negativeevents. Its intent is to reduce and control theharmful impact of whatever situation occurs byusing every communication vehicle at itsdisposal. A strong brand can contribute to cris-is control by drawing on all the equity accum-ulated over time to help weather the crisis.


Brand Fact:Scandinavian vacuummanufacturer Electrolux usedthe following in an Americancampaign: “Nothing sucks likean Electrolux.”

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Cult BrandsThese are brands that enjoy customer loyalty that has moved beyond simpleallegiance and into cult-like devotion. Those who drive their Harley-Davidsons to Starbucks daily may qualify. These devotees tend to live the brand and it forms an integral aspect of their life. These are also known as tribal brands.

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Critical Behavior DriversThese are the most important aspects ofconsumers’ buying habits and behavior, andare used by market research companies topredict future trends. These drivers can bemapped to the brand’s attributes signaling aclear link between consumer wants and needsand the brand’s benefits and associations.

Cross-sellingCross-selling is encouraging existing customersfor one product or service to buy additionalproducts or services from the same company(as opposed to buying more of the same). Not only is cross-selling designed to generaterevenue, it is also intended to broaden a cus-tomer’s reliance on a company and, therefore,decrease the likelihood of their buying from acompetitor. This is more effectively achieved ifthe original product or service has a clear andpowerful brand.

Cult BrandsSee page 30

CultureA company’s culture is the sum total of thebeliefs, history, practices, policies, and activitiesthat define its unique personality. A company’sbrand is part of its culture and a brand actuallyhas a culture of its own, represented by thepeople who work for it, their operating styleand behavior.

Customer Often used interchangeably with “consumer,” a customer is one who actually purchases abrand, product, or service.

Customer AcquisitionThis is the process of using a variety of market-ing techniques to gain customers who werepreviously unaware of a company’s products orservices. Simply stated, the goal of a customeracquisition program is to transform potentionalcustomers into actual buyers. Convincing acustomer to buy is the goal of marketing –convincing a customer to continue to buy is the goal of branding.

Customer Characteristics Customer characteristics refer to distinctdemographic, behavioral, and psychographicfeatures, traits, or facts. They include age, sex,earning power, occupation (demographics);propensity to purchase and repeat purchase(behavioral); and expressed self-image, atti-tudes about life, and so on (psychographics).Groups of customers who share the same orsimilar characteristics become a definedcustomer segment, which can then be effec-tively targeted with products and promotionsrelevant to their needs. See Psychographic Segmentation

Customer DefectionCustomer defection measures how long acertain customer or group of customers can beexpected to remain loyal to a product orservice, and the length of time they can realisti-cally be expected to generate income. It is aconsideration in calculating lifetime value. See Lifetime Customer Value

Customer Relationship Management(CRM)This term refers to a technology system and/ora formal program for managing relationshipsbetween organizations and customers. The


‘I am irresistable,’ I say, as I put on mydesigner fragrance. ‘I am a merchant banker,’I say, as I climb out of my BMW. ‘I am ajuvenile lout,’ I say, as I pour an extra stronglager. ‘I am handsome,’ I say, as I put on myLevi’s jeans.”John Kay

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desired result is extensive knowledge about keycustomer segments, and customized plans tosell to and service them. CRM is designed tofocus on the most profitable customers andfacilitate cross- and up-selling. Effective brandmanagers cull the data from these systems foractionable intelligence that helps guide theirbrand strategies.

Customer RetentionThis term refers to the percentage of customerswho continue doing business with a company. Italso refers to maintaining an existing customerbase by establishing good relations witheveryone who buys the company’s product.

Customer Return on Investment This is the value a company receives frominvesting in the acquisition and retention ofcustomers. A critical component of brandanalytics, this calculation helps to determinereturn on brand and marketing investments.

Customer Satisfaction/DissatisfactionSatisfaction means that the needs, desires, andexpectations of customers have been met orsurpassed, while dissatisfaction means theopposite. Satisfaction, however, does not neces-sarily equate with loyalty, since an organizationor brand can have one-time satisfied customers.

Customer ServiceCustomer service is the communication,delivery, and after-sales care of the buyingpublic. In the best organizations, it is the centerpiece of their efforts. It is largely delivered through customer-facing employeesbut also, increasingly, through customer-friendlytechnology (such as the telephone or internet).Unfortunately, in many organizations, customerservice is a department that only handlescomplaints or answers questions, so it is usuallyrelevant to only a small number of customers.

CustomizationCustomization is tailoring products or servicesto the special and unique needs of individualcustomer segments. This is a business strategyfor engendering loyalty by more accuratelydelivering relevant products and services.


We’re not concerned about having consistencyof brand so much as about consistency ofpurpose that flows throughout the wholeorganization. It doesn’t actually matter whatwe write on the napkins or say throughadvertising, all that matters is that whenyou go into a Pret shop you get that set ofexperiences that describes Pret.”Andrew Rolfe, Pret A Manger

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Brand Fact:According to Interbrand, thethree main tasks for a brandowner are:1. Embody the brand itself in all

words and actions2. Know the underlying sources

of brand value and managethem like any tangible asset

3. Constantly keep the brandrelevant and differentiated.

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“Marketing is too important to be left to the marketing department.”David Packard

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Database MarketingThis is a form of direct marketing that usestechnology and customer (or potentialcustomer) databases to generate personalizedcommunications meant to promote a product orservice. Database marketing emphasizes statis-tical techniques to develop customer behaviormodels, which are then used to target idealcustomers. This form of marketing requires asignificant commitment to maintaining theaccuracy of data.

De-differentiationDe-differentiation is a relatively new phen-omenon that describes the breakdown oftraditional barriers between once-distinctindustries. De-differentiation, or convergence,is when multiple industries form alliances orwhole new businesses with the objective ofbetter serving customers.

Demographics This is a term referring to statistics relating to a population and generally covering sex, age,marital status, birthrate, mortality rate, income,education, and occupation. Demographics arestill commonly used to identify potentialcustomers, but are often augmented by more specific methods that help understandbuyer behavior.

Design See page 37

Design ElementsThe individual components comprising theoverall visual expression of the brand. Thesecan include images, type, color, shape, texture,and so on. These elements work in cooperationwith each other to communicate an overallbrand personality and image.

Design PrinciplesThe set of objectives and parameters that guideconsistency in brand development. Theseensure that equities are retained while allowingsome creative license to extend the brand’svisual vocabulary.

Design to CostIn the development of new products, this is anapproach that considers cost as its own designconsideration, rather than as the outcome of acompleted design. Here, costs would be basedon projections about what consumers canafford and the nature of the competitive land-scape. It helps build a business case prior tosignificant investment.

Differentiated MarketingThis is a market strategy that aims to take thesame brand to several market segments at thesame time but varying the marketing mix foreach segment. It takes into account that eachsegment is unique so that the message andchannel will require adaptation based on pref-erences and norms.

DifferentiationThis is the process of identifying, branding, and communicating the actual and emotionalbenefits that make a product or service uniqueversus competing, but seemingly similar,choices. Differentiation is at the heart ofbranding to simplify choice by providingtangible and intangible benefits to guide the decision-making process.


The more modern nations detest each otherthe more meekly they follow each other; for all competition is in its nature only afurious plagiarism.”Charles Dickens

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DesignAs a verb, design refers to the process of creating and executing a plan for a newproduct, service, or idea. As a noun, it refers to two things: to the final result of theplan (in the form of a model, sketches, blueprints, or other descriptions), or to thefinished, produced product itself. Design in all forms is a powerful method andcomponent of brand building – it can differentiate, more effectively communicate,and position a brand in its competitive environment.

The Brand GlossaryPage 37

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“Anyone can look for fashion in a boutique or history in a museum. The creative person looks for history in a hardware store and fashion in an airport.”Robert Wieder

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Differentiator A differentiator is the aspect of a company,product, or service that separates it from thecompetition. It could be a performance differ-ence (facts and figures, for example), or anemotional one (the imagery and associations ofthe company or offering). It was once thoughtthat only one differentiator was required toensure competitive advantage, but currentthinking expresses differentiation as a bundleof multiple differentiators that, when presentedin combination, provide true advantage.

Digital Brand ManagementThis is a response to the complexity and speedrequired to manage truly global brands. In thepast decade, there has been a proliferation ofdigital brand management tools meant tocontrol consistency and distribution of brandassets. These take the form of intranets, appli-cation service providers, and fully outsourcedsystems. Initially, this was simply the automa-tion of traditionally printed brand guidelines,but the tools have grown to encompass imagelibraries, packaging templates, advertisingtemplates, and so on. These systems work bestin widely distributed organizations where manypeople communicate the brand strategy toaudiences. It allows the brand to be controlled,yet also allows it to evolve as it touches themarket. A leading provider of these productsand services is BrandWizard.

Direct MarketingThis is a form of marketing that sendsmessages directly to consumers, using“addressable” media like mail. Direct marketing,therefore, differs from regular advertising inthat its messages aren’t placed in third-partymedia (like radio, TV, or billboards by theroadside). Direct marketing is attractive tomany marketers because, in many cases, itseffectiveness can be measured directly. Incontrast, measurement of other media mustoften be indirect, since there is no direct

consumer response. While many marketers likethis form of marketing, it is sometimes criticizedfor generating unwanted solicitations, whichare sometimes referred to as “junk mail” and“spam.” Direct marketing uses various channels – coupons, catalogs, mail, consumerand business magazines, newspapers, tele-phone, and radio to convey an offer that isintended to elicit an almost immediateresponse. Direct marketing is comprised of adefinite offer, all the necessary informationupon which to base a purchase decision, and aresponse mechanism that consumers can usewith limited effort or expense.

Discontinuous New ProductA term often used to describe a new innovation – a product that departs significantlyfrom previous products in the same area. Thesenew products are often found in technology,where entirely new markets are created ratherthan just extending existing ones.

Diversion A genuine product is sold to a buyer in onemarket/channel and then resold by the samebuyer into another market/channel, without theconsent or authority of the brand owner, in orderto take advantage of a price arbitrage situation.This definition also applies to parallel trade, graymarket or gray market activities.

Domain Name/AddressThe part of an URL (commonly pronounced“earl”) that specifies the source of a website oremail. The domain name in Company names are bestto trade under, but product or generic namessuch as can alsoredirect casual browsers to the main URL. See URL or Uniform Resource Locator


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Brand Fact:In the 2005 Best Global Brands ranking, the top 10brands were worth a combined US$390 billion.

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80:20 RuleThis is an oft-quoted rule of thumb stating that80 percent of sales (or 80 percent of profits)come from 20 percent of the customers.

End-of-aisle (or End-cap) DisplayThis refers to coveted positions for packagegoods marketers in retail stores. As the namesuggests, these are displays placed at the endsof aisles where they are prominent and veryvisible. End-of-aisle displays generally providedramatic increases in spontaneous purchase ortake-away.

Endorsed Brand A brand that carries the endorsement of asource brand (the parent company), forexample Chips Ahoy! Here, Chips Ahoy!promises a specific taste profile and experi-ence, while Nabisco (the source brand) offersan endorsement of overall quality, heritage, andfood expertise. The source brand is leveragedto communicate value or expertise thatstrengthens the promise of the endorsed brand.

EssenceEssence is a collection of intangible attributesand benefits, the core characteristics thatdefine and differentiate a brand. The easiestway to understand essence is to imagine thatthe brand is a person you are trying todescribe – what defines that person, and whatseparates her or him from everyone else.

Every Day Low Pricing (EDLP)This is a retail strategy meant to create consis-tent customer traffic based on low prices. EDLPgrew in importance as Wal-Mart’s ability tonegotiate low prices from suppliers becameone of their main core business strategies.Short-run pricing strategies such as seasonalor special event sales often confuse and irritateconsumers, while EDLP provides clarity andconsistency in the shopping experience.


Companies that enjoy enduring successhave core values and a core purpose thatremain fixed while their business strategiesand practices endlessly adapt to theirchanging world.”James Collins

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Brand Fact:There are over 886,000 members of the company-sponsored Harley-DavidsonOwners Group. They organizerides, training courses, socialand charity events.

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Experiential MappingAn exercise of modeling projected customer interactions that sum their overallexperience when dealing with a brand. It details all possible touch points,frequencies, and situations to ensure that the brand will not disappoint. This is asophisticated process that manages risk and reward while identifying new areas forthe brand to outperform competitive offers.

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Exclusion ZoneThe area around an element such as a logo that must remain clear. It is documented in thedesign guidelines with associated rationale. Alsoreferred to as clear space, free space, controlarea, and keep-free zone.

Expectation Expectation is the idea that even before tryinga brand, consumers have already formed anopinion about it. These expectations are theminimum threshold the brand must exceed. If itdoesn’t, customers will be disappointed and aptto be vocal to other prospective customers,negatively influencing their purchase decision.

ExperienceThis is when consumers have been exposed tovarious brand attributes. A successful brandexperience happens with exposure to a brand’smost positive aspects, and this can happen in astore, through advertising and websites, orthrough word of mouth. The critical aspect is tohave the experience match or exceed thecustomer’s expectations based on promisesmade in communications.

Experiential Mapping See page 44

Experiential Marketing An approach that tries to evoke a strongemotional response in potential buyers about aproduct or service. Typical examples might betourism commercials that show beautifulbeaches and dramatic sunsets, or diamondcommunications that suggest romance andeternal love.

ExtensionThis is the act of using an existing (and successful) brand name to help launch a new product or service into a new area orcategory. Since the original brand has strong, positive associations and high levels of awareness, the decision to use it involvesrisk, because if the new venture fails, it maytarnish the original brand.



Show me a great company and I’ll showyou one that has radically changed itselfand is looking forward to the opportunityof doing so again.”Lawrence Bossidy

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“Word of mouth is the best medium of all.”Bill Bernbach

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Flanker BrandThis is a product introduced by a company intoa market in which it is already established. Theintent of a flanker brand is to increase overallmarket share in a particular category andaggressively crowd out the competition.

Focus GroupThis is a group of people assembled to discussan issue, idea, or product. Focus groups are astaple of market research, and their successusually depends on the quality and experienceof the facilitator.

Four P’s (Product, Price, Promotion,Place) This is a widely taught concept meant toexplain the vital components of marketing.However, it is now known as oversimplifiedshorthand, because the Four P’s have beenextended to include additional P’s, among thempre- and post-customer service. See Seven P’s

FranchiseA franchise is a legal contractual relationshipbetween a supplier and one or more indepen-dent retailers. The franchisee gains an estab-lished brand name and operating assistance,while the franchiser gains income as well assome control over how the business is run.

Freestanding Brands These are brands that companies use when theywant to maximize the impact of a portfolio ofbrands by leveraging the strength of each onewith little or no connection to a source brand orother (often competing) brands from the samecompany. As examples, Pantene and Pert Plusare freestanding brands from Procter & Gamblethat are in the same shampoo category.


Creative thinking may simply mean therealization that there is no particular virtue in doing things the way they have always been done.”Rudolph Flesch

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Brand Fact:Multi-channel customers spend20 to 30 percent more money,on average, than single-channelones do, according to McKinsey& Company.

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Brand Fact:12 percent of companies spend75 percent or more of theirbudgets on customer retention,according to Tivoli Partners andInteractive Marketing &Research.

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GapEvery company develops business strategies forits brands, and every consumer experiencesthese brands individually. A brand gap is thedistance, or difference, between the businessstrategy and the consumer experience. Obvi-ously, companies want that gap to be as smallas possible.

Generic BrandsThese are unbranded products offered byretailers, usually at a lower cost than similarbranded products. Initially, generics were givenminimal packaging, advertising, and promotionsupport but they are now seeing more supportand offering greater competition. Consumershave been educated that the quality of genericsrivals that of their branded cousins, and largernumbers of customers are purchasing generics,regardless of the lack of premium associations.

Generic Name This is a brand name that has become assoc-iated with a product category rather than witha particular brand. Kleenex for tissue has beenwidely noted as the most obvious example ofgeneric naming.

Generic StrategyMichael Porter, from Harvard Business School,developed the theory that there are three basicstrategies for any organization – cost leader-ship, differentiation, and focus. Porter initiallyargued that an organization must focus on oneof these to achieve an advantage. Morerecently, however, both anecdotal and empiricalevidence demonstrates that it is a combinationof the three that helps organizations succeed.

Global Branding See page 53

GoodwillAn intangible asset comprising brand value andother assets, such as customer service andemployee morale, that are anticipated to repre-sent higher earning power. The drawback isthat goodwill does not have a generally recog-nized liquidation value and accountingprinciples require that it be written off over aspecific time period.

GradientThe progression of a specific color into thenext complementary color.

Graphic DesignGraphic design is the process of arrangingwords and images to communicate a messageor clarify understanding, and it can appear inalmost every communications medium, fromnewspapers, magazines, and digital, to movies,animation, and packaging. Successful graphicdesign takes into account target audiencesand the message hierarchy meant to beconveyed. Creativity and differentation aresought to stand out amongst competingcommunications and firmly gain awareness inthe market. Graphic design is an invaluableaspect of branding.

Grid SystemsThis refers to the design and structure of infor-mation that should be followed. Also referredto as page layouts, style templates, imagegrids, and templates.


Brand Fact:Spencer Stuart provided a studythat shows average CMO tenureis under 24 months.

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Global BrandingA global brand is one that is available in many nations and, though it may differ fromcountry to country, the local versions have common values and a similar graphicidentity. These are branding initiatives that are consistent, yet are tailored to locallanguages, customs, business practices, and buying behaviors.

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“Well-managed brands live on – only bad brand managers die.”George Bull

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Harmonization Ensuring that all products in a particular brandrange have a consistent name, visual identity,and, ideally, positioning across a number ofgeographic or product/service markets.

HarvestingHarvesting is when sales of a brand begin todecline and companies slowly reduce theirmarketing investment, either to nothing, or to abare minimum. These companies depend on thebrand’s loyal customers to sustain it while theyfree up cash to pursue other opportunities.Brand harvesting usually precedes a brand’stotal elimination.

Hero PiecesA selection of communication pieces that showhow best to use the visual identity that can bereferred to as best practice examples. Theseare profiled in the brand guidelines and areoften never static as the brand and its visualand verbal components evolve to maintain andenhance relevance and differentation.

HierarchySimply stated, hierarchy is the order of things –what comes first, next, and after that. This termcan be applied to brand architecture (that is,corporate name, division, and operating unit);to organizational structure (who reports towhom); or, most interestingly, to needs (that is,it’s more important to customers that wequickly resolve their issues rather than that weachieve 100 percent compliance).

HomepageA homepage is the first page or screen you see on a website. It is the site’s entry point andis intended to greet visitors, supply informationabout the site or its owner, and provide a “tableof contents” that leads visitors to linked suppor-ting pages. It is another opportunity for thebrand to communicate its distinct benefitsgraphically, in copy, and interactively.


Your brand is created out of customercontact and the experience your customershave of you.”Stelios Haji-Ioannou, Chairman, EasyGroup

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Brand Fact:66 percent of executives say true ROI analytics are marketing’s greatest need,according to Booz AllenHamilton.

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“Brand equity is the sum of all the hearts and minds of every single person that comes into contact with your company.”Christopher Betzter

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IconAn icon is the symbol of a brand that is deeplyentrenched in the minds of consumers. Tony theTiger, the Harley-Davidson crest, and the Nike“swoosh” are all brand icons that are indeliblyetched into the conscious and subconsciousminds of consumers. Icons are tremendousassets with incredible value, however, theyrequire regular updating to infuse them withnew and relevant meaning.

Identification DecisionsThese are choices a company makes aboutthe branding identity it wants to give to aproduct. Typically, the choice is from amongfour alternatives – single brand names(Cheerios), product-line brand names (Quisi-nart cookware), corporate brand names(Scope mouthwash) and corporate familyname (Knorr soup).

IdentityThe outward expression of a brand. Thisincludes everything from its name and visualappearance to the way it sounds, feels, smells,and tastes. The brand’s identity is its funda-mental means of consumer recognition andsymbolizes its points of difference. It representsa unique set of associations which affect how abrand appears in consumers’ minds. Identity,however, is a strategic goal (while image is aconsumer’s actual perception of a brand). Thegoal, obviously, is for identity and image to bethe same.

IDMetrics A proprietary quantitative and qualitative Inter-brand research methodology that seeks toassess the existing and potential visual identi-

ties of brands in terms of appropriateness,credibility, and strong positive and negativeassociations, as well as fit-to-concept. Points ofrelevance and disconnect are identified with thebrand audiences, as well as the fit and stretchof each identity with the brand strategy.

ImageImage is the overall impression and unique set of associations a company or brandcommunicates to the public. It is achievedthrough advertising, websites, brochures,annual reports, logos, symbols, and so on, and although it’s not always factual, it is verypowerful. The term gained popularity whenresearch began to make it clear that image influences consumer purchases.

Image LibraryStock shots are photographs, illustrations, andvideo and film footage available for use byanyone for a set fee or, if they are in the publicdomain, for free. An image library is either acompany in this business for profit, or non-profit organizations (like a library, for example)that offer stock shots as a public service.

Impact Model See page 61

ImpressionThe technical definition of impression is thetotal number of exposures to an advertisementin a specified period of time. This is a measure-ment used to determine if a desired targetaudience is absorbing and reacting to aspecific ad.


Brand Fact:79 percent of brand professionalssurveyed on Brandchannel believethe “Made in China” label hurtsChinese brands. The top threeassociation notes were: cheap, poorvalue, and poor quality.

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Brand Inspiration

How much money(Budget setting)



How you spend it(Tactic selection)

What measures(Success metrics)

Target AudienceOpportunity


Brand Experience Value Proposition

What successlooks like andhow it willbe measured

Hypotheses onPriority Targets

Industry, client,and competitorsassessment

Through the eyesof the Who,evaluate currentWhat, Why, How:

(Investigative activitiesrelated to the intendedproject scope anddeliverables)

(This work will alsoconfirm the Whohypotheses)

How you act

Internal BrandAlignment

Namingand taglines

Verbal Identity

What you sayand to whom


How you speak

Tone of Voice

How you look

Visual Identity

What you offerand who offers it

Brand Architecture

CustomerExperienceTouch pointMap



Brand CultureFramework

Creative Brief



Value Proposition

Who + What + Why

HowWhat and Why

Brand Blueprint Brand Expressions Brand Execution

Impact ModelA proprietary Interbrand construct that links brand strategy with creativity andimplementation. The model sequentially answers four fundamental questions – who, what, why, and how? Who are the high priority targets that will drive profit andgrowth? What is the single-minded aspirational brand promise? Why should thetarget believe the promise – now and in the future? How do we internally andexternally bring the value proposition? The model has recently been expanded toinclude a fifth question – how much? The last question quantifies the results of theentire effort so involves a return on brand investment component.

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Impulse BuyThis is a spontaneous purchase made withoutprior deliberation or investigation into thebenefits of the product or service. It is oftenassociated with goods made available atcheckout counters.

Inform–Engage–Align See page 63

InnovationAny new approach to designing, producing, ormarketing can be called an innovation. Innova-tions usually provide the innovator with anadvantage over the competition because theycan supply new products based on establisheddemand, or open up new markets. Inherently,innovations are highly differentiated, allowingthem to be successfully branded.

Innovation-based CultureIn a marketing sense, innovation means intro-ducing new products, ideas, or services into themarketplace; new products that are different, orthat consumers perceive to be different. Thesenew products can either be the next step in anexisting product’s evolution, or a new productentirely. Innovation is an essential component ofa company’s long-term growth, and an innovation-based culture is one in whicheveryone understands this to be true and workstoward it as a goal. Communication innovationis critical to branding to ensure the ongoingrelevance of the brand to desired audiences.

Intangible AssetsIntangible assets like goodwill, trademarks,patents, management expertise, brands, copy-rights, formulas, and so on, have no physicalsubstance, nevertheless, they are perceived ascrucial in creating value. Increasingly themajority of business value is derived from

intangibles, and brands are one of the mostimportant of them because of their far-reachingeconomic impact. Brands have a powerful influ-ence on customers, employees, and investors,and in a world of abundant choices, such influ-ence is crucial for commercial success andcreation of shareholder value.

Until recently, intangible assets weren’t recog-nized on the balance sheet, as most of themwere generated internally and therefore lackeda perceived objective market valuation. The risein the value recognition of intangibles camewith the continuous increase in value gapbetween companies’ book values and theirstock-market valuations, as well as sharpincreases in acquisition premia in the late1980’s. This led to the recognition of the valueof intangible assets in business combinations.Today, most accounting standards require therecognition of acquired intangible assets on thebalance sheet.

Integrated Brand CommunicationThis is ensuring the efficiency and effectivenessof a brand and marketing mix to convey aspecific message to a desired audience. It isboth a process and a plan that considers theneeds of the target audience, the key messagesto be imparted, and the most appropriatechannels to communicate them. The channelscan include sales, promotion, public relations,advertising, and so on.

Brand Fact:IDC CMO Advisory researched theTop 5 Marketing MeasurementMandates from the CEO:• Consistent metrics for ROI of

marketing• Measurement of brand awareness

and reputation• Consistent lead-generation metrics• Improved tracking and

measurement of marketingspending

• Programs that lead to increasedrevenue.

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Know it

Believe it

Live it


Pre-launch Brand Workshop Business Processes

Internal Launch Brand Coaching

Brand Seminars

Brand Ambassador Program

Training and Education

HR Policies

Performance Measurement

Rewards and Recognition






Inform–Engage–Align An approach employed by Interbrand to achieve internal brand alignment. It consists of three primary phases: • Inform – where employees receive communication regarding the brand that gives

them a first-level understanding• Engage – where understanding gives way to action and demonstration so

employees believe in the brand• Align – where the brand values and objectives are entrenched in business process

and human resource practices to encourage the employees to live the brand.

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Integrated MarketingCommunicationsThis is managing all marketing communications(advertising, sales promotion, public relations,and direct marketing) as one cohesive wholerather than as a series of individual activities.This integration assures the clarity, consistency,and maximum impact of a brand’s message.

Intellectual AssetsThese are non-physical business assets thatcan include expertise, knowledge, patents,research and development programs, andknowledge-management systems.

Intellectual PropertyIntangible assets such as a patent, trademark,or copyright whose value results from know-ledge, discovery, invention, or creativity.Intellectual property can cover new productslike software, books, reality game show formats,television rights to sporting events, or even amanufacturing process.

Interactive MarketingThis is a method that combines traditionalmarketing principles with internet techniquesso that customers can interact with whoeversends them a marketing or selling message.The interaction can be asking a question, fillingout a form, or making a purchase. If a companydoesn’t have this specific kind of marketingcapability itself, it can work with a consultancythat has expertise in web design and develop-ment, internet advertising and marketing, ande-business consulting.

InterviewingInterviewing is asking questions to obtain ideas,information, or opinions, and an interview studyis a common marketing research techniquedesigned to gather data. The people asked toparticipate typically complete a written ques-tionnaire, answer questions over the phone, orare interviewed face-to-face.

Investor RelationsThis is both an activity and a department inmost medium-to-large public companies. Itprovides existing and potential shareholderswith accurate information about the companyand its financial performance. This helps inves-tors make informed buy or sell decisions. Overthe past few years, investor relations depart-ments have embraced the power of branding toappeal to the investment communities andmore accurately represent the value of theircompanies and brands.


Good customers are an asset which, when wellmanaged and served, will return a handsomelifetime income stream for the company.”Philip Kotler

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Brand Fact:Omnicom Group is the largestmarketing organization in theworld, according to AdvertisingAge, with revenue of US$10.4billion in 2005.

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JargonJargon is using complicated terms instead oftheir simple common-use equivalents, andmarketers are as guilty of using jargon asanyone. Typically, people using jargon are eithertrying too hard to sound knowledgeable, ortrying to increase their own perceived competence by confusing others.

Jumble DisplayA mixture of products or brands from differentcompanies placed on a single display, such asa clearance table. It is this practice at retail thathas driven many brands to provide their ownin-store displays and product training toremove the risk of the brand being presentedinappropriately.

Key Buying InfluencesMany factors influence a consumer’s decisionwhether to buy a product or not. There areexternal factors like the group a consumer feels part of, a specific current situation, andthe culture as a whole; internal factors likeattitude, lifestyle, personality, and perception;and marketing factors, including the productitself, its price, promotion, and distribution. In addition, many of these facts are intercon-nected and work together to affect the ultimatebuying decision.

Key Performance MeasuresThese are a focused set of metrics that drivespecific management functions. In branding,these metrics may include volume and value ofmarket share, awareness, return on specificbranding investment, and so on. Ideally, the keyperformance measures form a balanced set andare both objective and subjective, and qualit-ative and quantitative. Also, unless theyinfluence management decisions, they are oflittle use to the business and the brand.

Knowledge ManagementThis is the process of capturing, organizing,analyzing, interpreting, and disseminating infor-mation and knowledge possessed by individualsin an organization to the organization as awhole. New technologies have aided thisprocess enormously through use of intranets,databases, and communication tools thatautomate the entire process. Knowledgemanagement systems are entirely dependentupon the quality, timeliness, and frequency ofcontributions made by individuals. Once, know-ledge was power – now knowledge shared iseven more powerful.


Brand Fact:There are over 25,000 products in the average supermarket.

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“The purpose of pricing is not to recover cost but to capture the value of the product in the mind of the customer.”Daniel Nimer

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Brand Fact:The Newspaper Association of America says the averageAmerican is exposed tobetween 1,500 and 3,000 brand messages every day.

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Label GraphicsThese are the designs and illustrations on anypackaging that carry information about theproduct. For example, its name, use, features,benefits, and so on.

Launch The time when a company starts to promote anew product or service using advertising,publicity, internal branding, or initial productsales. Launches can be significantly visible, withlarge budgets and a single starting date, or theycan be “soft” and take place over a longerperiod of time (usually two weeks to onemonth). Even though soft launches may havesmaller budgets and make less “noise,” theycan still be quite effective. See Rollout

LetterheadThis is a sheet of official company stationerywith a printed heading at the top that usuallycontains the company’s name, address, tele-phone and fax numbers, and often includes alogo and other details.

LeveragingThis is when a company uses the power of oneof its successful brands to support one of itsnew products entering a different, but related,market. Consumers have strong opinions abouta brand’s quality, consistency, and value, whichthey often transfer to a “leveraged” brand. Forexample, consumers who are loyal to a certaincomputer might be willing to try that samebrand’s new printer.

LexiconIn a general sense, a lexicon is an inventory of words – a dictionary, for example. It’s thesame with this glossary, except this lexicon isspecifically an inventory of branding, naming,marketing, e-commerce, design, and commun-ication words.

License A license is a document or agreement givingpermission to do something on, or with, some-one else’s property. Between two businesses, itis a contract in which one company is given afee to provide technology, knowledge, or aproduct to another.

Lifestyle BrandThis is a brand targeted at an audience basedon how they live, and it identifies itself with theirinterests and activities, wants and needs, likesand dislikes, attitudes, consumption, and usagepatterns. The attributes of a lifestyle brand aretailored to specific audiences in order toachieve early adoption and sustained use.

Lifetime Customer Value See page 73


Brand Fact:Women buy or influence thepurchase of 80 percent of today’sconsumer goods, according

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Lifetime Customer Value This is an equation and approach that calculates a customer’s value over thatcustomer’s buying lifetime. The goal is to identify the most profitable customers andorganize them into specific segments. Then, incentives can be offered to ensureloyalty. It is a calculation about the value of customers to a brand or company overtheir entire life cycle. This removes the emphasis on individual transactions, andallows companies to focus on very narrow target markets. To calculate lifetime value,the following have to be taken into consideration: how much it costs to acquire thecustomers; how much it costs to retain them; their average lifetime; and the averagevalue they will provide during that period.

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“Quality is remembered long after the price is forgotten.”Gucci family slogan

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Line ExtensionThis is the use of an established and successfulbrand to introduce additional products into itsexisting category (for example regular Cresttoothpaste extending into whitening tooth-paste). Line extensions generally offer newfeatures, flavors, colors, packaging sizes, oringredients. The expected gains are incrementalbecause existing customers will be given morechoice and new customers may be attracted. See Brand Extension

Lock UpA lock up defines the relationship between twodesign elements and how the elements shouldappear together. It recognizes exclusion zones,size and positioning relationships, and rules of independent use. The positioning of a corporatelogo with its tagline is an example.

LogoA logo is the graphic element used to identify acompany, service, or product. It is a distinctivemark, sign, symbol, or graphic (usually of thecompany or brand name) that is in continualuse and typically trademarked to protect it fromother companies. Logos are immediately recog-nizable and act as “brand ambassadors”because they become unmistakably identifiedwith a particular organization or brand.

LogotypeLogotype is a company or brand name set in adistinctive typeface or using special letteringarranged in a particular way. In addition, thecolor and shape of the font should be distinctlydifferent from others in the same market.

LoyaltyLoyalty is the allegiance earned by a brandwhen it delivers such distinctive and meaningfulbenefits that customers choose to come back

over and over again. It is also the result ofsatisfied customers recommending a brand toothers. Loyalty is successfully making the tran-sition from “a brand I use,” to “my brand.”

Loyalty ProgramsThese are specific initiatives that offer an accumulating benefit to consumers whosupport the brand. They can take the form ofpoint programs, discounts, special offers, selectaccess, or even free goods and services.Frequent flyer and shopping programs areprime examples. (Loyalty programs differ fromaffinity programs where there is no directeconomic value.)

Luxury Brands Luxury brands are objects or services that aredesirable but not essential. They are indul-gences rather than necessities and are oftenexpensive or hard to get. Luxury brands oftendeliver superior quality or better performanceand consumers are willing to pay a premiumprice for them. The challenge of accessing dueto either price or supply often results in imita-tions of the luxury brand.


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Brand Fact:Owners of digital videorecorders fast-forward through92 percent of commercials,according to YankelovichMarketing and ForresterResearch.

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Mall InterceptThis is when market researchers in a shoppingcenter stop a sample of passersby and ask if they’re willing to answer a few questions.Those who agree then participate in one-on-one interviews to largely determine how theypurchase and what drives their loyalty.

MantraA mantra is an internally developed shortphrase (usually three to five words) thatcaptures the spirit of a brand’s positioning. It isusually composed of three terms. For examplefor Disney, brand function is first and this isthe nature of the product – entertainment.Descriptive modifier is second and clarifies thefunction – family. Finally, emotional modifierdescribes how the brand provides the benefit,in this case, as fun. So a Disney mantra couldbe entertainment, family, and fun.

MarkThis is the portion of a brand that consists of a symbol, design, or distinctive lettering orcoloring.

MarketThe word “market” has various meanings: it isthe theoretical and actual place where goodsare bought and sold; it can refer to the extentof the demand for a product or service, as in“There is a big market for antique cars”; and it can also refer to the business of buying orselling a specific commodity as in “thesoybean market.”

Market AttractivenessThis is the measure of profit potential in a givenmarket or industry, taking into account suchfactors as size, growth rate, and nature of thecompetition already there.

Market BroadeningMarket broadening is a strategy in which acompany evaluates the wants and needs ofconsumers who already buy its product orservice in order to decide what else to sellthem. For example, a company that sells cellphones might also decide to offer PDA’s.

Market Coverage StrategiesThere are five different strategies companiestypically use to select and target markets:

1. Single market concentration (which focuseson an individual part of the market)

2. Product specialization (which produces asingle product for all markets)

3. Market specialization (which produces allproducts for a single market)

4. Selective specialization (which producesproducts for multiple market niches)

5. Full coverage (which produces a product forevery customer).

Market CrystallizationThis is an exercise that identifies parts of amarket not yet fully established in order toinvestigate similar needs people in that marketmay have for something that doesn’t yet exist –and to meet those needs. The result can be tocreate something entirely new or to expand anexisting product or service whose benefits havenot been fully developed.

Market Defense See page 79


It is an immutable law in business that wordsare words, explanations are explanations,promises are promises – but only performanceis reality.”Harold Geneen

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Market Defense What a company does to repel the advances of an existing or potential competitor is called “market defense,” and there are various available strategies:

1. Building barriers to market entry2. Increasing entry costs3. Reducing the market’s attractiveness by lowering prices.

If none of these strategies is successful, then market defense gets refocused on minimizing damage.

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Market DemandMarket demand is the total volume of a product or service bought by a specific groupof customers in a specified market during aspecific time period.

Market DiversificationThis is a growth strategy in which companiesadd new products and new markets simultan-eously, but products and markets that aren’tcurrently related to their existing activities.

Market Extension StrategyThis is employing a marketing strategydesigned for one country and using it to extendinto another country, and then another. Abrand extension strategy, on the other hand,uses the values of a popular brand to expandinto new markets or market segments.

Market Followers These are companies that don’t have theresources, commitment, market share, orresearch and development expertise to chal-lenge market leaders for a more competitiveposition. Interestingly, these companies can, attimes, take advantage of opportunities createdby the leaders without having to make a signifi-cant marketing investment of their own.

Market FragmentationThis is when new segments with their ownwants, needs, and desires arise out of previ-ously homogenous markets. When thishappens, brand loyalty erodes and massmarketing becomes far less useful.

Market LeaderThe company or brand that is dominant in itsindustry and holds the greatest market share. Ittends to be on the cutting edge of new tech-nologies or new production processes and hasthe most flexibility in crafting strategies. Its veryvisible position, however, makes it the maintarget of competitiors and, sometimes, govern-ment regulatory agencies.

Market PositionMarket position is the relative strength of onebrand (or company) versus other brands orcompanies in a specific market. It can beunderstood as sales versus the competition, orsales as a percentage of the market’s total.With knowledge of a brand’s position, compan-ies are able to devise strategies to improve it.The descriptive terms often applied to marketposition are leader, challenger, or follower.

Market PotentialThis is an estimate of the size of a market, orthe total possible sales of a product or serviceover a specified period of time. It can also bedefined as the market share a particularcompany can reasonably expect to achieve.

Market ResearchThis is the systematic approach to collecting,analyzing, and interpreting the informationrequired to make sound marketing decisions. It is designed to determine the potential salability of a product or service by deter-mining what people want and need. Theinformation can be gathered from secondarysources that are already published and publiclyavailable, or from primary sources such as thecustomers themselves.


About two years ago I realized I was no longer a person but a brand.”Martha Stewart

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Market SegmentationThis is grouping a wide assortment ofcustomers in a market into smaller groupsbased on similar wants, needs, and buyinghabits. In this way, a car manufacturer, forexample, can group younger car buyers withdiscretionary income into a segment, and thentarget that segment with sports car advertisingand promotion.

Market ShareMarket share is the total number of units of aspecific product sold (or the dollar value)expressed as a percentage of the total numberof units sold by all competitors in a givenmarket. (Market size, by the way, is the totaldollar amount of possible sales by everyone inthat market.)

Marketing Marketing is the process that brings ideas,goods, or services to the marketplace throughplanning, pricing, coordinating, promoting, anddistribution. Marketing is the process of identi-fying and reaching specific segments of apopulation in order to sell them something, and

it is also the creation of demand using adver-tising, publicity, promotion, and pricing.Marketing is an organizational functiondesigned to deliver value to customers and tomanage customer relationships in ways thatbenefit the organization and its stakeholders.

In our society, where nearly all production isintended for a market, marketing activities arejust as important as the manufacture of thegood or service. It is estimated that approxi-mately 50 percent of the retail price paid byconsumers is made up of marketing costs.

Marketing AuditA periodic and systematic review, analysis, andevaluation of a marketing group’s structure,objectives, strategies, organization, goals, actionplans, and results.

Marketing Control SystemThis is the system that checks to see if market-ing plans are producing expected results. Itmeasures productivity and profit by types ofproducts, customers, or territories, andmeasures other key marketing variables such as customer satisfaction. If a product isn’tperforming as planned, corrective action istaken until it does.

Marketing Cost AnalysisA tool used in marketing planning thatexamines the costs associated with developing,producing, selling, promoting, and distributinga product or service to certain marketsegments. It also determines the product’sprofitability. Additionally, it is an allocation ofcosts analysis that determines which specificcosts are associated with which specificmarketing activities.


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Marketing IntermediariesSometimes called middlemen, marketing inter-mediaries are people and companies whoassist the flow of products from the people whomake them, to the people who use them.Marketing intermediaries, among others, arefinancial institutions, agents, wholesalers,distribution companies, and retailers.

Marketing MetricsMarketing metrics are measurements that helpcompanies evaluate their overall marketingperformance, such as market share, advertisingand promotion costs, and response ratesobtained by advertising and direct marketing.

Marketing MixThis is a selection of products combined withdecisions about price, place, and promotionthat a single company uses to pursue desiredlevels of sales in target markets. This productselection provides options from whichcustomers can choose, and the advantage tothe company is that more customers are likelyto choose one of their options instead ofbuying elsewhere.

Marketing MyopiaThis term refers to a company’s failure todefine its goals broadly enough. It is a lack ofvision that can result in an overemphasis on aproduct’s specific features and benefits, and anunderemphasis on the wants and needs ofconsumers.

Marketing PlanningThis is a systematic process of assessingmarketing opportunities and resources andformulating marketing objectives. It is theprocess that leads to a marketing plan, which isa detailed description (with schedule) of theobjectives and actual methods a companyintends to use to achieve its marketing goals.

Mass Marketing This is a process of using the mass media tomarket widely a product or service to a largetarget audience. It is based on seeing a marketas one homogeneous whole and, therefore,selling the same product, at the same price, viathe same advertising and promotion vehicles toeveryone. It is designed to sell a large quantityof product to a large number of people.

MasterbrandThis is the principal brand name a companyuses for products and services across abusiness. The masterbrand is usually combinedwith individual names to make sub-brands. For example, General Electric goes to marketwith GE Capital, GE Aviation, and GE FinancialServices, and companies like BMW andMercedes Benz go to market in the same way,except they use letters and numbers to differ-entiate between their various models.

Brand Fact:In 2003, 43 of the 111 songs in theBillboard Top 20 had lyrics with brandreferences, according to Datamonitor.


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MeasurementMeasurement is determining the extent, size,amount, or degree of something, especially incomparison with a known standard of somekind. In business, the accepted wisdom is:“Don’t do it if you can’t measure it, and don’tmeasure it unless it either saves or makes youmoney.” All measurements should help busi-nesses make choices and help them to optimizethe choices they’ve made. Marketing will notachieve equal stature with the other businessdisciplines until it adopts an equally rigorousapproach to measuring impact.

MediaMedia are all the tools of mass communication,from print (newspapers and magazines) toelectronic (radio and television) to computer(websites and so on). Medium is the singularform of the word.

Media BuyingMedia buying is a service offered by certainadvertising agencies that involves negotiatingwith the various media to purchase time orspace to run a client’s ads. A media buy is theadvertising a company pays for.

Media KitThis is a package of promotional materialsdistributed by a media outlet in order to selladvertising. A typical kit includes audiencedemographics, costs, success stories, andrelated materials – all the information aprospective advertiser needs to make aninformed decision.

Media Planning In media planning, companies analyze theirstrategic goals and formulate actionable day-to-day tasks to maximize the investmentsthey intend to make in promotion and advertis-ing. The result of this process is called a“media plan.”

Merchandising See page 84

MergerThis is combining two or more corporationsinto a single entity. Typically one of the corpor-ations survives the other(s) and absorbs all theassets and liabilities. Mergers usually occur ina friendly environment where executives fromthe respective companies co-operate with eachother to ensure a successful outcome. Othertimes, the merger is “hostile,” and a companysimply buys the majority of outstanding sharesof another company’s stock in the open market.

Message–Channel–Market (MCM)An Interbrand construct that simplifies theintent of branding and marketing communic-ations. In its clearest form commercialcommunication identifies a desired market forits offer. Then specific messages are tailored tothat market to entice members to purchase.Finally, the most efficient and effective channelsfor those communications to reach and influ-ence the market are selected and employed.The notion of MCM is to simplify and clarifypractices that are frequently made morecomplex than they have to be.

MessagingMessaging is a concise statement of issues and benefits associated with a product orservice. It’s the theme that’s consistentlyconveyed through a company’s mix of com-munication channels in order to best reach its target audiences.


Brand Fact:In a study conducted by the KellerFay Group, it was discovered that theaverage American mentions specificbrands 56 times a week inconversation.

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Merchandising Merchandising is a term that has many, generally aligned, meanings. It is thepurchase, distribution, and resale of goods at the retail level; it is presenting aproduct to the right market at the right time using advertising and promotion; it isthe attractive and visible presentation of goods within stores; it is also a marketingpractice in which the brand or image from one product or service is used to sellanother (like NASCAR clothing).

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Messaging MatrixA proprietary Interbrand construct which identi-fies the key audiences for a brand that can actas influencers of larger segments. Those influ-encers are prioritized based on the brand’sobjectives and mapped against specific commun-ications that support the overall brand position,yet, appeal to the relevant wants and needs ofthe audience. A brand cannot be everything toeveryone but it must have something foreveryone – the messaging matrix is a commun-ications tool that helps articulate that distinction.

Messaging OptionsOptions for messaging can include testimoni-als, humor, comparisons, slice-of-life,humanistic appeals, and so on, and areselected to best reflect the values and benefitsof a brand. These options are taken intoconsideration along with the channels that willreach target audiences most efficiently. With anincreasing emphasis on integrated marketingcommunications, messaging options must workacross several platforms at the same time inorder to achieve maximum effectiveness.

MetricsIn a general sense, metrics are measurementsdesigned to track product development andallow a firm to measure the impact of process improvements. What is measured caninclude time to market; duration of differentprocess stages; and product developmentoutcomes (such as percentage of total salesdue to new products).

Mission StatementThis is an expression of a company’s history,managerial preferences, environmentalconcerns, available resources, and distinctivecompetencies. It answers the question “Whatbusiness are we in?” with responses that havebroad focus and customer orientation. Amission statement guides a company’sdecision-making and strategic planning.

Monolithic Brand See Masterbrand

Multi-brand StrategyThe strategy of a single company going tomarket with several competing brands insteadof one. Companies do this to create internalcompetition in order to promote efficiencies; todifferentiate brands; to sell to different marketsegments; or to get maximum results out ofestablished brand names. For example,Cadbury sells various chocolate products under different names, and Lever Brothers sells various laundry detergents.

Multi-segment Strategy This is a strategy that targets a number ofdistinct segments in the same market and thendevelops a separate and distinct marketing mixfor each.


Whenever we have compromised on ourprinciples, we and our customers have beenthe losers.”Marcus Sieff

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Name This is the part of a brand that consists ofwords, letters, or numbers. When the word“trademark” is used, it most often meansbrand name.

Names Brand names can be categorized into severalname types that relate to the goods orservices offered:

• Descriptive names use common languagethat isn’t considered trademark protectableto describe the brand’s goods and services.They offer the advantage of being transparentin their communication, but they don’t oftenconvey much differentiation or emotion. Inaddition, due to their literal nature, they aredifficult to stretch beyond their original use.Examples include Computer Associates,PlayStation, and British Airways.

• Suggestive names do not simply describe thebenefits of the goods and services associatedwith them, they also suggest their attributes.They are afforded more trademark protectionthan descriptive names and often providemore category differentiation and emotion.They can also stretch beyond their originaldesignation. Examples include Oracle, Power-Book, and Crest.

• Abstract names – have little or no clear rela-tionship to the goods and services they’reassociated with, but they can be very distinc-tive within a category. Once secured, theyare offered the highest level of trademarkprotection and they can also help extend abrand to encompass new products andservices. Examples include Orange, Xeroxand Blackberry.

• Coined names are word combinations thatdidn’t previously exist. They are most oftencreated by combining word roots (oftenLatin) to create new verbal expressions. Forexample, the name Prozac is a coined namecreated by combining the roots of “Profes-sional” and “Exact.” Coined names, oncesecured, make the strongest trademarks.

• Composite names are existing words that are combined to create new brand names.JetBlue is an example of a composite name.

• Real word names are created by using wordsthat currently exist, but have no obvious linkto the product or service they’re associatedwith. Real word names can make strongtrademarks. Apple Computer is an exampleof a real word name.

Naming See page 89

New Product DevelopmentThis is the overall process a product goesthrough before introduction, and it involvesseven phases: idea generation, screening ideas,concept testing, business analysis, developingthe product, test marketing, and commercializa-tion. New product development almost alwaysrefers to activities within an organization, asopposed to new products acquired fromanother company.

News ReleasesNews releases, or press releases, are written orrecorded communications directed at the mediaannouncing something purported to have newsvalue. Their intent is to encourage journalists todevelop articles on whatever the subject is, andthey are commonly used in public relations as ameans of attracting favorable attention to thePR firm’s client and/or products.


A well-informed employee is the bestsalesperson a company can have.”E. J. Thomas

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Naming This is the practice of developing brand names for corporations, products, andservices. Most often, the objective of naming is to develop ownable trademarks andtrade names that express a brand’s promise and provide an easy way for consumersto identify and interact with it. Brand names are valuable economic assets andshould be carefully created and protected by their owners.

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Niche BrandNiche brands are those targeted at individualmarket segments where a company or productis especially strong. These segments are typi-cally too small to interest companies with largemarket shares, but they are profitable andunlikely to attract competitors.

Nomenclature System A nomenclature system is a structure for establishing a blueprint for name development.These systems now encompass the brand’stone of voice and parameters for language useto ensure differentiation and consistency.

NometricsAn Interbrand proprietary research toolproviding decision support for potential brandname and tagline candidates. Each potentialbrand name is evaluated using specificcriteria, including pronunciation, imagery andpersonality associations, name acceptability aswell as “fit” with brand concept and more.There are both quantifiable and qualitativeaspects within Nometrics.

OfferThere are two general definitions of offer: first, the terms and conditions under which aproduct or service is presented for sale (price,quantity, delivery date, shipping costs, guaran-tee, and so on). And second, the design,features, quality, packaging, and distribution(together with associated services such asfinancing, warranties, and installation) of theproduct or service a company offers for sale.

One-to-one MarketingOften called personalized marketing, this is when a company tries to make a uniqueproduct offering to each potential buyer. It is most practical on the internet because awebsite can track a customer’s preferences

and offer buying suggestions. For example,Amazon tracks individual customer historiesand inclinations and makes specific, customizedproduct suggestions.

Opportunity Model An opportunity model collects and studies pastand present information in order to identifytrends, forces, and conditions to help manage-ment choose appropriate strategies to meetcompany goals. The Interbrand Brand Opportun-ity Model employs a construct of differentiation,credibility, relevance, and stretch to determinethe unique positioning for a brand.

Organic GrowthThis is the rate of business growth that resultsfrom increasing production and sales and rein-vesting revenue back into the company, ratherthan growth that comes as a result of mergers,acquisitions, and takeovers.


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Brand Fact:Centrally managed brands, withconsistent execution globally,are the preferred means ofbrand management by 60 percent of executives. Yet 67 percent agree or stronglyagree that local customizationof a brand has a positive impacton sales, according to theEconomist Intelligence Unit.

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“You can’t build a reputation on what you’re going to do.”Henry Ford

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Packaged GoodsThese are products that are packaged by theirmanufacturer; they typically carry a low unitprice, are distributed through food and drugstores, are heavily promoted (usually in massmedia), and are bought and consumedfrequently (toothpaste, for example).

PackagingGenerally speaking, packaging is all theactivities and materials associated with design-ing and producing a product’s container orwrapper for presentation to the public. Inaddition to protecting products, packagingprovides important information and helpspromote whatever’s inside.

Packaging DesignPackaging design can be viewed in four differ-ent ways: as a means of protecting whatever isinside the container; as a contributor to howmuch the product costs; as the blank slate onwhich to promote a product’s attributes andbenefits; and as part of the product experience.Packaging design has evolved way beyondsimple functional benefits and is now a sophis-ticated and powerful example of designers’capabilities. A package design is on-shelf forapproximately five years, so the design mustmeet a great deal of criteria to be successful.

Parent BrandThe parent is the main brand in a brandfamily. It is the master, primary brand and it takes on an endorsing function for one or more sub-brands.

ParityParity is when a company’s products orperformance are no better and no worse thanthe competition’s. It is also when consumerssee no real difference between brands in thesame category. With gasoline, for example,

consumers see no real difference other thanprice. Brand is a means to overcome parityfrom commodities to luxury items.

Passing Off The name given to a legal action brought toprotect the “reputation” of a particular trade-mark/brand/get-up. In essence, the action isdesigned to prevent others from trading on thereputation/goodwill of an existing trademark/brand/get-up. The action is only available inthose countries that recognize unregisteredtrademark rights (for example the UK and US). In some countries, it is called unfaircompetition action.

PenetrationPenetration is often short for market penetra-tion, and refers to the extent that individuals ororganizations in a particular market havealready purchased a brand, and/or the degreeto which a product or service is known amongpotential buyers. This is a growth strategy inwhich a company concentrates efforts in itstarget market in order to increase market shareor enhance its competitive advantage. Marketshare increase can be accomplished by attract-ing buyers of competitive brands; persuadingcurrent customers to buy more; offering animproved or revised product; and/or by attract-ing consumers who don’t currently buy in theproduct category.

PerceptionPerception is the way individuals interpret thestimuli around them. It’s an impression ofreality based on beliefs, needs, attitudes,events, and people and it influences actionsand behaviors. In a branding context, percep-tions can and do affect buying decisions.


Brand Fact:Most major marketers allocatebetween 4 and 10 percent of theirmeasured media spending to theonline channel, according to BoozAllen Hamilton.

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Personality Personality is attributing human characteristics (particularly emotional or attitudinal)to a brand. For example, Coke is fun, McDonald’s is happy, Volvos are safe, and soon. Investing brands with personality is achieved through advertising, promotion,packaging, and/or corporate graphics, but also increasingly through the qualities of the people who work for the brand. Furthermore, personality should be created to reflect or complement the brand’s target customers, and understanding theircharacteristics aids this. Personality is a critical component of brand buildingbecause product parity exists in most markets, so differentiation and choice maylargely be the result of what a customer “likes” emotionally.

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Perceptual MappingThis is a process used in marketing research tounderstand what selected customers thinkabout current and future products; how theyperceive different companies, products, orbrand attributes; and how they would rankwhatever is being researched versus its compe-tition. One of the tools used in the process is aperception-mapping graphic that visualizeswhere customers place a product or supplier inrelation to other products and suppliers. (Alsocalled position mapping.)

Permission MarketingThis is a type of marketing that offers consumersthe opportunity to receive marketing information(newsletters, for example), new product releaseinformation, or announcements of upcomingevents. Author Seth Godin, in his book Permis-sion Marketing, made up the term. Permissionmarketing allows marketers to communicatemessages relevant to their brand, and todevelop an ongoing positive relationship withconsumers.

Personality See page 95

Point of Purchase (POP)These are promotional materials placed at thecontact sales point in a retail store to attractconsumer interest or call attention to a specialoffer. Point of purchase displays are usuallyplaced near check-out counters, and arepackages, signs, display cartons, and so on,designed to provide additional product informa-tion and to motivate impulse buying.

Point of Sale (POS)This is a term for materials that are designed toincrease sales and introduce products (likeoutside signs, window displays, counter pieces,display racks, and self-service cartons).However, it can also refer to a data collection

system that electronically receives and storesbar code information from sales transactions.

Portfolio This refers to the sum of the brand’s architec-ture or all the brand holdings under control ofownership. The portfolio is managed individuallyand holistically in an attempt to derive benefitsof association and individuality.

Portfolio AnalysisThis is a strategic planning tool that helpsdetermine marketing strategy. It evaluates aproduct’s growth rate and relative marketshare, and compares it with the other productsand services in a portfolio. The outcome objec-tive is to see which products are performingwell and should be continued, and which areunderperforming and should be discontinued.

Portfolio ManagementThis is the business process (based on a port-folio analysis) whereby a business unit decideson its mix of products and services, the staffingthat’s needed, and how the marketing budgetshould be allocated. In a branding context, it isthe practice of managing across and within allthe brands in an owner’s portfolio.

Positioning The distinctive position that a brand adopts inits competitive environment to ensure that indi-viduals in its target market can distinguish thebrand from others. Positioning involves thecareful manipulation of every element of themarketing mix. Positioning defines to whom thebrand is trying to appeal, what the basis of thatappeal is going to be, and why key targetsshould believe the message.

Positioning Statement The positioning statement is the articulation ofthe positioning strategy. It can be an inspira-tional, persuasive, or powerful set of words or


Brand Fact:According to Datamonitor, 4.4 percent of lower incomeconsumers do not consider brand asan important factor in theirpurchasing criteria.

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images that creates a common understandingand aligns beliefs and actions. It becomes theplatform for all brand communications.

Power BrandingA strategy in which every product in acompany’s range has its own brand namewhich functions independently, unsupported byeither the company’s corporate brand or itsother product brands. Power branding is aresource-intensive strategy, since each brandmust be commercially promoted and legallyprotected. The strategy is used mainly by manu-facturers of consumer goods. Lever’s andProcter & Gamble’s detergents are goodexamples of power brands.

PreferenceA basic objective of advertising and promotioncampaigns is preference, establishing that onebrand is more desirable than its competition.Brand preference is necessary for a consumerto buy a product (just as brand loyalty is neces-sary for repeat purchases).

PremiumIn branding, this refers to the price differentiala brand owner receives over like offers. Astrong brand can deliver extra revenue basedon the perceptions of its quality, uniqueness,and other associations.

PrescreenPrescreening helps reduce the risk of wastingtime and money evaluating names that areclearly unavailable for use. Names are screenedfor identical and confusingly similar marks(including exact hits, near identicals, andphonetic variations) in the appropriate trade-mark class(es) for pertinent goods/services.Key considerations take into account whetheror not a particular mark is descriptive, or if themark is in what can be considered a crowdedfield. Results of the prescreen help determinewhether or not a name is a candidate for thenext level of screening – the full legal search.

Primary and Secondary ColorsThe primary colors of a brand refer to thecolors the corporate brand will always appear in, for example, the red and yellow of McDonald’s. The secondary colors arechosen to complement the primary colors and add variety and depth to an identity.

Private Label BrandsPrivate label brands (or services) are usuallyprovided by one company and sold underanother company’s name. They are most oftenlower cost alternatives to regional, national, orinternational brands. Since private labelbranding is most usually done by retailers,wholesalers, or dealers, the result is oftencalled a store brand. In recent years, largeretail and wholesale organizations like Kmart,Sears, and Kroger have begun to advertise theirprivate brands extensively, and market themnationally and internationally.

ProductA product is a combination of functional,psychological, and need-satisfying features thata seller offers to a buyer. These features caninclude goods, services, ideas, places, andorganizations. A product is physical andtangible, while a service isn’t.


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Product DifferentiationThis is a strategy that uses design innovations,packaging, advertising, and positioning to makea clear distinction between products servingthe same market segment. Basically, it is thedevelopment of unique product differences withthe intent to influence demand. The differences,however, can sometimes be very minor, like asimple change in packaging or a new advertis-ing theme.

Product Life CycleProduct life cycle is a concept that says there isa similarity between the life span of a productand that of a human. It suggests that productsgo through four stages from birth to death:introductory (slow sales growth that follows anew product introduction); growth (rapid salesgrowth as a product is accepted); maturity (theleveling off of sales when a product has beenaccepted by most potential buyers); and decline(the weakening of sales as a product isreplaced or falls into disfavor). This idea is usedto formulate marketing strategies for each ofthe four stages, but there is a difference ofopinion about whether products go throughthis cycle in any predictable way or not.

Product/Market Expansion MatrixThis construct from Igor Ansoff, a leadingfigure in strategic management, claims thatbusinesses should focus their strategic thinkingon three key elements: defining their coreobjectives; whether they should diversify forgrowth and, if so, into what areas; and howthey should leverage their current position.Lauded for its simplicity, the matrix is alsodisparaged for the assumption that growthopportunities always exist.

Product Placement This is a form of advertising and promotion inwhich characters in a play, film, television series,music video, video game, or book use an actualcommercial product. In the last few years,

product placement has become rather a largebusiness, with producers enjoying often largeamounts of additional revenue to have theirhero drive a specific car or drink a specific cola.

Product ProliferationThis is a charge sometimes leveled againstcompanies for marketing so many newproducts that economic resources are wasted.The consumer becomes confused, and mistakesare made in product purchase. (Think abouthow many toothpaste choices are currentlyavailable – whitening or not, containing mouth-wash or not, tartar control or not, and so on.)

Proof Points Areas in which the customer has exposureand/or interaction with the brand. Sometimesreferred to as moments of truth, these areopportunities to achieve loyalty or turn thecustomer off. Procter & Gamble speaks of itstwo moments of truth – when a customer pur-chases a product and when they actually use it.

PromiscuityThis is when consumers exhibit an absence ofbrand loyalty, when they change their supportof one brand for a competitor. It is also calledbrand switching and it’s the opposite of brandloyalty (see Loyalty). Often an issue in commoditysituations, promiscuity signals the brand ownerthat the unique value proposition is virtuallynon-existent.


Brand Fact:The Economist Intelligence Unitfound 67 percent of 145 executivessaid their companies had revised orupdated their brand. 21 percent ofthem had engaged a brandconsultancy.

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PromiseA brand promise states the nature of the reciprocal relationship between the brand andits audience. It communicates the benefits andlifestyle enhancements a customer can expectand, like any contract between two parties,defines what each party can expect from theother. A brand must not overpromise or credibility is questioned and consumer disap-pointment will certainly result.

PromotionPromotion is any technique that persuasivelycommunicates favorable information about aseller’s product to potential buyers through thebroadest spectrum of communications media,including advertising, personal selling, salespromotion, public relations, and so on.

PrototypeA prototype is one of the early and importantsteps in new product development. It is a firstworking model (and in the case of a newservice, it is a detailed plan and explanation). Inboth cases, a prototype is made specifically fortesting because, for all intents and purposes, itis the actual product in appearance, character-istics, and performance.

Psychographic SegmentationThis divides markets into individual segmentsbased on a psychographic analysis – a tech-nique that investigates how people live, whatinterests them, and their likes and dislikes. It isalso called a lifestyle analysis or AIO because itrelies on a number of statements about aperson’s activities, interests, and opinions.

Public RelationsSimply stated, public relations is an activityintended to build relationships between anykind of organization and its key audiences. Itcommunicates with chosen sectors of thepublic to influence their feelings, opinions, orbeliefs about a person, product, company, oridea. PR is handled either by an in-housedepartment, or in conjunction with a publicrelations firm – an organization that developsand implements programs to manage publicity,image, and public perceptions.

Publicity Publicity is newsworthy information about aperson, group, event, or product distributedthrough the communications media andintended to attract public notice. It is a formof promotion that makes something known,spreads information, and attracts support.And, unlike advertising, since the informationhas some measure of news value, it is free.(Obviously, costs would be incurred if anagency or consultant were under contract toserve this function.)

Pure Competition This is a marketing situation in which a largenumber of competitive products can’t be differ-entiated from each other. Since no single brandcan significantly influence pricing, the door isopen for additional competitors who might tryto grab market share.

PyramidThe brand pyramid was developed by authorand professor Leslie de Chernatony and iscomprised of attributes, benefits, emotionalrewards, values, and personality traits. It ismeant to match the buyer’s behavior to thebrand in order to instill and maintain loyalty.Often compared to Maslow’s hierarchy ofneeds, but in the context of branding andbrand decision-making.


Our business model doesn’t rely on hitproducts – it relies on the power of our brands.”Bob Eckert, Mattel

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Qualitative ResearchQualitative research focuses on subjective datathat is not easily translated into numbers. It is amethod of gathering information on consumerpreferences, beliefs, and emotions, and it doesso through group interaction and discussion. It investigates perceptions, opinions, brandimages, brand personality, and testing of adver-tisements, and it seeks insights into marketingsituations that don’t require statistical accuracy.

Quantitative ResearchQuantitative research is based on objectivedata that is collected, can be subjected tostatistical analysis, and can be expressednumerically. It is consumer research, oftensurveys, that is conducted with a large enoughsample to produce statistically reliable infor-mation that’s often used to project outcomes. Itis used to determine performance ratings, theimportance of different customer needs, currentproducts and customer satisfaction levels, prob-ability of repurchase, and product preferences.

Range BrandingRange branding is extending a single brandacross several related categories. Harley-Davidson, for example, markets motorcycles,tee shirts, leather jackets, coffee cups, and soon. There is less risk involved in range brandingthan stretching the original brand to entirelynew categories.

Reach This is the percentage of consumers in a targetmarket exposed at least once to a particularadvertisement in a particular period of time. TVcommercials typically have very high reach.(Although cable TV programs have a muchmore limited reach, they are more focused andcan be more effectively targeted.) Reach figureshave no meaning without an associated timeperiod. For example, an illustration of a validreach figure would be “XYZ commercial had aone-day reach of 1,565 per million on October14, 2006.”

RebrandThis is when a company updates or revises abrand based on internal or external pressures.It is often necessary after a merger, or if abrand has outgrown its identity in the market-place. Rebranding can involve radical changesto a brand’s logo, name, image, marketingstrategy, or advertising approach, or thechanges can be superficial. Rebranding can beapplied to new products, mature products, oreven unfinished products. A rebrand for thesake of rebranding offers great risk. Anyrebranding should have a business situation asthe catalyst.


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“The essence of a strategy is not the structure of a company’sproducts and markets, but the dynamics of its behavior.”George Stalk

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Recall Recall refers to a customer being able toremember a specific brand when given acategory of products without any mention ofthe brands in it. This is also called unaidedrecall. On the other hand, aided recall (alsocalled brand recognition) measures the extentto which a brand is remembered when itsname is prompted. For example, “Are youfamiliar with the Sony brand?” Companies areinterested in high levels of unaided recallbecause the first brand mentioned has adistinct competitive advantage over the compe-tition. See Top of Mind

Recognition See Brand Awareness

Refresh See Revitalization

Relationship MarketingThis refers to marketing with the expectation ofa long-term relationship rather than a one-shottransaction. This removes the need for an indi-vidual transaction having to be profitable,because the focus is on the relationship beingprofitable over its lifetime. This approach is ableto work because marketers can now segmenttheir target markets all the way down to indi-viduals, and are able to understand the valueeach one brings to a relationship over time.

Relative Market ShareThis is the size of one company’s share versusits competitors. Having a large share allowsfor economies of scale in product develop-ment, manufacturing, and marketing. It alsoputs a company or brand in a strongerposition in customers’ minds, and this has apositive impact all along the marketing andselling process.

RelaunchThis is a strategy that focuses on finding newmarkets, untapped market segments, new prod-uct uses, and/or ways to stimulate increased

use of a product by existing customers. Arelaunched product has usually been changedin some basic way so it can be promoted as“new and improved.”

Relevance See page 105

RepositioningRepositioning means changing the position of aproduct or service in the minds of customers,either because the original was a failure, orbecause of changes in the marketplace, or toallow for a new product introduction. Somepotentially valuable products don’t meet salesobjectives because they were inadequatelylaunched or positioned ineffectively, and it isalmost always possible to enhance their valueby repositioning them.

ReputationThis is the overall impression made by acompany or brand based on belief systems,values, and practices.

Response RateThe percentage of responses received from adirect marketing campaign (typically a mailing).It is also known as completion rate or returnrate and is the overall number of people whoresponded divided by the total number of mail-ings, expressed as a percentage. For example, if100 surveys are sent and 25 are completed andreturned, the return rate is 25 percent.

Retail AuditA retail audit is the systematic evaluation of acompany’s total retailing effort (although it canconcentrate on one specific aspect of it). Acompany conducts a retail audit to study whatit’s doing, to evaluate how it’s performing, andto make decisions about future actions.


Brand Fact:In his book, Profit from the Core,Chris Zook states that 47 percent ofnew product launches fail after thefirst three years in market.

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Relevance Relevance is the appropriateness or “fit” of a brand with the functional andemotional needs of its target market. Ultimately, customers determine relevance;that is, a brand is only relevant if customers perceive it to be. The history of businessis strewn with brands their owners thought would be relevant but consumersdecided weren’t, like the Edsel.

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RetailingRetailing is selling products and services toconsumers for their personal or family use. (Inthis sense, service providers like dentists, hotels,hair salons, and online stores like amazon.comare also retailers.) By contrast, wholesale isselling goods and services for resale.

Many businesses, like Home Depot, are bothretailers and wholesalers because they sell toconsumers and also to building contractors.Other businesses, like The Limited, are bothretailers and manufacturers. Regardless of their other functions, these businesses are stillconsidered retailers when they interact with thefinal user of their product or service.

RetentionRetention can be used in two business senses:the percentage of customers who return on aregular basis to do business with a company orbrand, and in a sense similar to recall, aconsumer’s ability remember a specific brand.

Return on (Brand) InvestmentThis is a method companies use to calculate a brand’s financial value compared with theamount of money being spent on it. Thebrand’s profitability, or lack of profitability, isexpressed as a percentage. Further, theseanalytics provide prescriptive information onwhich to base sound business decisions forfuture investment in the brand.

RevitalizationRevitalization is energizing a once-popularbrand that has lost its appeal due to changesin the marketing environment, competitors’strategies, consumer behavior, and so on. It’s aprocess undertaken either by the company thatoriginally launched the brand, or by a differentcompany that has acquired it. Repackaging andrepositioning are usually necessary steps ifsuccess is to be achieved, and are often a lesscostly strategy than creating a new brand. Revi-talizing a brand can provide a company with asignificant advantage in a mature market.

Role of BrandAn aspect of Interbrand’s brand valuationmethodology, this is the assessment of theproportion of intangible earnings that can beattributed to the brand in each marketsegment. This is calculated by first identifyingthe various drivers of demand for the brandedbusiness, then determining the degree to whicheach driver is directly influenced by the brand.

Rollout Similar to a soft launch, a brand rollout employsa measured step-by-step timetable to commun-icate with one audience after another, often indifferent geographic or demographic segments.


There is a very fine line between goodcustomer service and stalking.”Tara Lemmey

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Brand Fact:The Economist Intelligence Unit found that 81 percent of senior executives believetheir corporate brand is critical,very important, or important asan asset of the business. 79 percent said their products’brands were critical, very important, or important.

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“All the great things are simple, and many can be expressed in a single word: Freedom. Justice.Honor. Duty. Mercy. Hope.”Winston Churchill

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SalesThe confirmation of a commercial exchange. Inretail, a sale refers to products offered at lessthan the original price to increase store trafficand attract new customers. Sales can be donein person or over the phone, through email orvia mail. The sales process generally includes:assessing customer needs; presenting productfeatures and benefits that address those needs;and negotiation on price, delivery, and otherconsiderations. The primary function of profes-sional sales is to turn prospective customers intoactual customers by generating and closingleads, educating prospects, and satisfying needs.

SalienceSalience is defined both as top-of-mind brandawareness and as overall brand prominencebased on various performance measures.Salience explains why certain brands performbetter than others even though there may onlybe minor tangible differences between them.

SamplingSampling is based on the idea that a smallnumber of randomly chosen people from atarget audience will tend to have the samecharacteristics, in the same proportion, as thetotal population of that audience. After asample is determined (typically by a marketresearch firm), a survey is distributed that isdesigned to poll those selected about whateversubject the survey was designed to investigate.

SegmentA segment is a group of buyers within a marketwho have relatively similar wants and needs.

SegmentationThis is a marketing strategy in which large,heterogeneous markets are broken down intosmall, more homogeneous segments, and thenindividual marketing programs are developedfor each.

Segment–Target–Position StrategySegmentation means dividing a market intodistinct groups of customers (segments) whobehave in the same way or have similar needs.Each of these segments can then be targetedwith specific marketing strategies such as:

• Expansion, in which one product is targeted toseveral segments, thus expanding its market

• Concentrated, in which a company targetsone product to one segment

• Product line, in which new products in thesame category are introduced into thesegment, giving customers greater choice andthe company protection from competition

• Differentiated in which a company operatesin several or all segments at the same timeand targets different products to each.

Self-imageThis is when consumers buy certain brandsprimarily to make a statement about who theythink they are and how they see their place insociety. See Luxury Brands

Service Brand/MarketingThe service sector of the business world dealswith marketing and selling intangible productsinstead of physical goods. Nail salons, travelagencies, insurance companies, lawyers, and soon are in the service sector, and what they sellrequires branding and marketing just astangible products do.

Seven P’sIn addition to the widely recognized Four P’s(product, pricing, promotion, place), morerecent discussion has included three more variables known together as the extendedmarketing mix. These are:

• People: any person representing the brandand interacting with customers impacts thebrand experience. As a result, these resourcesmust be appropriately trained in the brand’sattributes and values, be well motivated to


Brand Fact:Red Stripe beer sales increased by 50 percent after Tom Cruise wasshown drinking it in the film The Firm, according to Datamonitor.

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70/30 Rule Applied more for context than numerical accuracy, 70/30 concerns the relativeweighting given to the elements that must remain absolutely consistent in managinga brand versus the flexibility granted to its managers. Consistency is a key principleof branding, but a brand must be allowed to adjust appropriately to local markets;capitalize on new strategic directions; and evolve to keep a competitive edge. So, 70 percent consistency and 30 percent flexibility.

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support and evolve the brand, and be anambassador and representative of the brand.

• Process: these are the detailed situationswhere a customer can come in contact withthe brand and that are critical to brandloyalty.

• Physical evidence: this readily exists in therealm of tangible products but in the case ofservices the brand cannot be truly experi-enced before it is delivered. Potentialcustomers may perceive a greater risk whendeciding whether or not to use a service. Tomitigate this potential risk, customers mustbe allowed to test the service, be exposed toactual advocates, or be provided with a risk-free trial to help in the decision.

70/30 Rule See page 111

Share of MindAlthough share of mind is the relative amountof attention a brand commands from its targetaudience, it is more complicated than, forexample, the attention people pay to Pepsiversus Coke. Share of mind involves everythingcustomers are thinking about, and what portionof that is devoted to an individual company,product, or service.

Share of Voice (SOV)This is a brand’s share of all the measuredmedia in a predefined category. For example, iftotal tourism advertising in the US is $100billion and an individual company spends $10billion, they would have a 10 percent SOV.

Share of WalletShare of wallet is a percentage of how muchconsumers spend in total versus how muchthey spend on a specific brand. For example, ifsomeone spends an average of $500/month onall their credit cards and spends $250/monthon their Visa card – Visa would have a 50%share of wallet.

Shelf Impact Shelf impact is the ability of a brand, by virtueof its design, to stand apart from its competi-tion on store shelves. With over 25,000products in the average supermarket, theimportance of shelf impact is clear.

Sonic BrandingSonic branding is using a specific piece ofmusic or a special sound to identify and adver-tise a product, service, or company. Withenough repetitions, the sonic brand is verypowerful and companies are beginning to useit everywhere current or future customers maybe listening – radio and television, web-basedcommunications, and even custom cell-phonerings. Interbrand’s Brand Acoustics practiceintegrates sonic branding into overall brandingprograms as it reflects another touch point forbrand awareness and differentiation.

SponsorshipThis is when a company subsidizes an event,offering funding to a group, association,sporting body, and so on, in return for a rangeof promotional opportunities. Sponsorship is aform of below-the-line advertising, which isadvertising by means other than the five majormediums (the press, television, radio, movies,and outdoors). In addition to sponsorship,below-the-line advertising uses direct mail,merchandising, trade shows, exhibitions, salesliterature and catalogues, and so on.


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Standalone or Freestanding BrandsThese are brand names and identities used forsingle products or services that are unrelated toother products or services in a company’s portfolio. They are supported and managedindependently, and have their own logos, colors,and identity standards. Plus, in some cases, theycan even have their own architecture of sub-brands, product brands, and service brands.

Strategic PlanningThis is the process that determines acompany’s objectives, courses of action,resource allocation, and what results can bereasonably expected. By calling this plan strategic, it is expected to operate on a largescale and take in “the big picture” (as opposedto a tactical plan which would focus more onindividual activities). A SWOT analysis(strengths, weaknesses, opportunities, andthreats) can be part of strategic planning as itevaluates a company in terms of its advantagesand disadvantages versus competitors, therequirements of its customers, andmarket/economic conditions.

StretchRefers to the ability of a brand to stretch withinits category and into adjacent or distant cate-gories. Brand extensions that stretch within thesame category (toothpaste) are prevalent. Sotoo are brands that move into adjacent categories, like cleansers. Less common arebrands that stretch across multiple categories,although Virgin has demonstrated that it canachieve success across a wide variety.

Style GuidesStyle guides generally lay out a brand’scommunications standards in terms of colors,font types and sizes, graphic design, language(sometimes music), and so on. The guideassures that a brand will have visual consis-tency no matter where it is seen or used.

Sub-brandThis is a brand that builds on its associationwith a masterbrand. Even though it has its ownname and visual identity, it is designed toleverage the history and equity of the master-brand and stretch into a new category, benefit,or target.

SubstitutesThese are products that consumers view asalternatives for other products. Consumer motivation to try a substitute can be driven bycost, health, or environmental concerns, and/orby social trends. As examples: sugar versusartificial sweeteners, eyeglasses versus contactlenses, plastic containers versus glass, aspirinversus other types of pain relievers. Substituteshave an obvious effect on brand loyalty andbecome real threats when products of firms inother industries enter a market.

Switching CostsThis refers to the hidden costs a consumerfaces when changing from one product toanother. There can be non-monetary psycho-logical or social costs, researching and learningcosts, or simply the effort needed to informfriends and relatives about a new telephonenumber. Or the costs can be monetary, like exitfees, equipment, installation, and start-up, andso on. Switching costs affect competition.Consumers won’t even switch to a lower costsupplier if the totality of the switching costsoutweigh the price differential. If this happens,consumers are said to be locked-in to asupplier. And if a company manages this lock-in, it can raise prices to a certain point withoutfear of losing customers because the effects ofswitching keep them where they are.

Symbol See Logo


Brand Fact:A 2004 survey of 370 marketers found that 70 percent of marketingdepartments had undergone areorganization in the previous threeyears, reports Booz Allen Hamilton.

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“I see the proper response to change and challenge as increased creativity.”Gene DeWitt

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Tagline/SloganThis is a short, distinctive, and easily recognizable phrase that accompanies a brand,conveys its promise and, in a few memorable words, captures the theme of the ador commercial in which it appears. Taglines aid recall, like Avis’s “We try harder.”

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Tagline/SloganSee page 116

Tangible AssetsTangible assets are defined as having physicalsubstance such as land, buildings, inventory,computing equipment, cash, and often accountsreceivable (even though it can be argued thataccounts receivable don’t have a physical exis-tence). Tangible assets such as machinery aredepreciated according to their useful life andwear and tear in the business, but not alltangible assets can be depreciated – land, forexample. Tangible assets have traditionallydominated the balance sheet. Intangible assetshave recently become more important on thebalance sheet due to changes in accountingregulations around the world. See Intangible Assets

Target AudienceA specified audience or demographic group to which a product or service is marketed. It is often defined by age, gender, and/or socio-economics but target audiences can be internal or external, geographic, or loyal/nonloyal, and so on.

Target MarketingThis is marketing to a specific group ofconsumers (segments) who have similar char-acteristics, who behave in the same way, orwho have similar needs. Once these segmentsare identified, a company develops a targetingstrategy that positions its product or service for

maximum appeal. A targeting strategy includesthe number of segments to target, which onesto target, how many products to offer, andwhich products to offer to which segments.

Thought LeadershipA brand that influences a market based onoriginal and innovative ideas, even though itmay not have a leadership position in marketshare (Apple Computers, for example).

Tone of Voice The personality or attitude of a brand that’scommunicated through its verbal commun-ications is called tone of voice. Another way todifferentiate like design and sonic branding,tone of voice should reflect the unique featuresof the brand and help to define its personalitythrough written and oral communications.


The secret to creativity is knowing how to hide your sources.”Albert Einstein

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Brand Fact:The Association of NationalAdvertisers and Booz AllenHamilton found that 66 percentof senior marketers believetheir greatest need is to develop capabilities in consumer insights and returnon investment (ROI) analytics.

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Top of MindTop of mind is generally a reference to aware-ness. For example, if a consumer is asked in amarketing survey to name the first brandingcompany that comes to mind and she or hesays “Interbrand,” then it can be said that Interbrand has top-of-mind awareness. Top ofmind is alternatively called unaided recall, andcompanies are interested in it because the firstbrand remembered or mentioned has a distinctcompetitive advantage over the competition.

Touch Points Everywhere people come into contact with abrand is called a “touch point.” Touch pointscan be product use, advertising, packaging, in-store displays, casual conversation, and so on.Branding is a holistic experience and brandowners must anticipate all possible interactionsa consumer can have with a brand.

Trade NamesThese are corporate names in a particularbusiness under which a company operates.(PepsiCo and Miller Brewing Co. areexamples). Trade names can also function as trademarks. See Trademark

TrademarkA trademark is a formally registered anddistinctive symbol; it is any name, word, phrase,logo, design, image (or a combination of two or

more) used by businesses to distinguish theirproducts or services from the competition. A trademark is proprietary and is usually registered with global and regional trademarkoffices. It provides legal protection for exclusiveuse by its owner.

Trademark InfringementThis is the unauthorized use of a registeredtrademark by someone other than its owner, or use of a symbol that is confusingly similar.Trademark infringement usually applies whenproducts or services are identical or similar tothose the registration covers. When theproducts or services aren’t identical, infringe-ment will generally be decided by consideringwhether or not there is “likelihood of confusion”that consumers will believe the products orservices originated from the trademark owner.

Trendsetter Someone or something that breaks a traditionalmold or routine and gains a following becauseof that action. iMac is an example of trend-setting in design as office supplies now comein the familiar colors and translucent packagingof an iMac.


When you are headed toward true innovation,you will find yourself in an uncomfortable orunfamiliar area.”Cris Goldsmith

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Umbrella BrandAn umbrella brand is a parent brand thatappears on a number of products that mayeach have separate identities. A strongumbrella brand can help a new productgenerate revenue because of quality andbenefit associations. Individual branding, on theother hand, requires expensive advertisingcampaigns and extensive brand-building costs.

Unique Selling PropositionA unique selling proposition (USP) is one ofthe fundamentals of effective marketing andadvertising. It refers to a particular quality,feature, or benefit offered by a product orservice that is important to customers and notavailable from the competition.

URL or Uniform Resource LocatorOn the internet, this is the address of a webpage on the World Wide Web. An URL(commonly pronounced “earl”) includes aprotocol prefix (http://, ftp://), a domain name(,, andpossibly a path and filename. The path and thefilename are an opportunity to direct viewersbeyond the normal “home” page of a website. In, http:// refers to the internet, Interbrand is the name of thecompany, and the .com shows it’s a company. An URL is unique; no two can be alike.

User SegmentationThis is the process of grouping consumers into market segments based on what theydesire from a product. For example, the tooth-paste market may include one segmentseeking cosmetic benefits such as white teethand another seeking health benefits such asdecay prevention.

Value DriverGenerally defined as any variable that impactsthe health and value of an enterprise. In thecontext of branding, this refers to the tangibleand intangible components of a brand thatrepresent differentiation and relevance to thetarget audiences.

Value PropositionA (brand) value proposition is a short, clear,simple statement containing the main reasonsfor choosing one brand over another. Itincludes what the target market is for a partic-ular product, what key benefits will bedelivered, and how much will be charged. Itprovides the rationale (tangible and intangible)for choosing one brand over another.


The power of intellectual capital is the ability tobreed ideas that ignite value.”JPMorgan Chase 2001 Annual Report headline

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Verbal IdentityThis is the way a brand communicates in wordsits name, its advertising and taglines, itsmarketing communications, its website copy,and the descriptions on its packaging.

Viral MarketingViral marketing is spreading a brand’s messageperson to person via word of mouth. It encour-ages people to pass along marketing messagesto friends, colleagues, and/or family, therebycreating exponential growth in the message’sreach. It is nicknamed “viral” because theexposure to a message mimics passing a virusfrom one person to another. Typical techniquesinclude email messages, jokes, web addresses,funny film clips, and games that get forwardedelectronically by recipients.

VisibilityA desired result from brand investment is togain greater visibility and awareness. This is the first step in communicating with desiredaudiences to try the brand and gain first-handexperience of its tangible and intangiblebenefits. Visibility has often been tied to tradi-tional advertising but now has wider meaningin brands being used visibly by category influ-encers, such as personalities and characters intelevision and film.

Visual IdentityThis is extending a company’s brand in everypossible way with every element contributing toa distinctive visual style. This includes whereand how a logo is used, colors, type fonts andsizes, and imagery. The purpose of a company’svisual identity is to set it apart from its competition and, in order to be effective andmemorable, it has to be consistent across allmedia. See Brand Guidelines

Visual Language ConceptsA number of alternative visual strategies usedto articulate different but related elements ofthe brand. Each concept will reflect the brandpositioning and create a story using visualsrather than words.


Brand Fact:CMO magazine reported that 58percent of chief marketing officerssurveyed agree or strongly agree thatthe marketing function is changingand that their primary challenge is todefine their place in the organization.

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Brand Fact:The IDC CMO Advisory studyfound that the top three marketing measurement mandates from the CEO are:1. Consistent metrics for ROI of marketing2. Measurement of brand awareness and

reputation3. Consistent lead-generation metrics.

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Wear OutThe point reached when a communicationscampaign loses effectiveness, due either torepeated overplay or the audience’s wants andneeds no longer being met by what is promisedin the communication.

WebsiteA website is a collection of linked, intercon-nected pages on the internet used to provideinformation about a company, organization,cause, or person. Websites can be purely informational, can serve marketing and advertising functions, and/or can be a point of interaction or sales. Another touch point inthe brand experience, a website is an oppor-tunity to communicate all that makes the brand unique.

Word of Mouth See Buzz

WordmarkA wordmark is the way you write a name that isunique and ownable. It also refers to alogotype. It typically incorporates one or moreunique characteristics such as a customdesigned font, symbol, or graphic device.


All progress is based upon a universal, innatedesire on the part of every organism to livebeyond its income.”Samuel Butler

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Brand Fact:Spencer Stuart’s annual studyshows that the average tenureof a chief marketing officer is asobering 23.2 months, downfrom 23.6 months in 2004, and23.5 months in 2005.

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(Brand) Yield This is a proprietary process, derived from Interbrand’s Brand Valuation and Brand Equity Insights methodologies, which allows the modeling of anoptimal portfolio of branding activities within a given budget, industry, andcompetitive environment.

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“Good tactics can save even the worst strategy. Bad tactics will destroy even the best strategy.”General George S. Patton, Jr.

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Brand Fact:SelfServiceWorld magazinefound that 55 percent of USonline consumers haveresearched a product onlineand then purchased that sameproduct offline. This equates to more than 40 million consumers – an 8 percentincrease over 2004.

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