Every brand is a promise. And like any promise, brands attract and excite us; they capture our hearts and minds; they give us a glimpse of a better life. But most importantly, brands create tangible value. They are a retailer's most powerful connection to the outside world. Brands enable retailers to form deep and lasting attachments to customers and potential employees, and even investors, that translate into higher sales, stable profits, superior capabilities, and above-average stock market performance.
This chapter explores the three principal elements of superior brand management – art, science, and craft – and presents a wide range of case examples, illustrating how leading retailers bring these elements to bear on the management of their brands.
Branding is the secret weapon of retail marketing: it can create substantial value, but it is under-leveraged by most retailers.
Brands have many benefits, but above all, they create value. Brands help companies achieve price premiums, and they save costs due to their inherent appeal to customers. Companies with strong brands consistently outperform their peers in the stock market. According to a recent McKinsey analysis, brands with a top ranking in BusinessWeek's annual “Best Global Brands” report have consistently outperformed traditional benchmarks like the MSCI World or the S&P 500 index over the past 10 years (Exhibit 1.1 ...