Brand Leadership

Brandweek,  Feb 21, 2000  

• E-mail
• Print
• Link

After setting out much of what has become the conventional thinking on branding in two seminal earlier works, David A. Aaker is ready to offer a more updated and unified theory in his latest book, Brand Leadership (The Free Press).

In Brand Leadership, which is based on 300-odd case studies around the world along with insights gleaned through their consulting assignments, Aaker and his consulting partner and co-author, Erich Joachimsthaler, describe how established brand management systems--notably those following the structure outlined by a mid-level Procter & Gamble exec seven decades ago--are giving way to a new paradigm of "strategic brand leadership" that is less reactive in focus, that empowers brand custodians and that harnesses the power of brands to encompass multiple products and markets.

In detailing how organizations must transform themselves to accommodate this change, Aaker and Joachimsthaler examine the issues involved in developing an effective brand architecture, including the roles brands (and sub-brands and endorsed brands) should play within a broader brand system. The authors also decry the clutter of conventional advertising media and make the case for two underanalyzed brand-building vehicles: sponsorship and the Internet.

Aaker is one of the most familiar names in brand strategy in large part thanks to the success of his best-selling Managing Brand Equity (1991) and Building Strong Brands (1996), also from The Free Press. The first argued that brands are a company's key assets, and the second offered methods for cohesively building those brands. Aaker suggests that Brand Leadership should be regarded as the third volume of a trilogy with the other two books.

Aaker is vice chairman of Prophet Brand Strategy and professor emeritus of marketing at the Haas School of Business at the University of California in Berkeley Joachimsthaler is visiting professor of business administration at the University of Virginia's Darden School and has served as CEO of Aaker-Joachimsthaler & Partners, a decade-old brand strategy and executive education consulting partnership whose clients have included AT&T, Adidas, Audi, Compaq, Levi-Strauss, MasterCard and PepsiCo. Putting their branding precepts to work for themselves, Aaker and Joachimsthaler have just relaunched the partnership as The Brand Leadership Co., and relocated it to New York from Charlottesville, Va.

In the following pages, Brandweek excerpts the opening chapter of Brand Leadership, starting with a discussion of the famous memo by P&G's Neil McElroy in 1931 that set out what would become the classic brand management model. They go on to contrast that model with what they argue is the new imperative of brand leadership: more strategic than tactical, broader in focus so as to accommodate more complex brand architectures and geographic reach, less driven simply by the dictates of winning sales and market share.

Brand Management: The Classic Paradigm

In May 1931, Neil McElroy who later rose to be a successful CEO of Procter & Gamble and still later the Secretary of Defense was a junior marketing manager responsible for the advertising for Camay soap. Ivory "99.44% pure" since 1879, was then the king at P&G, while other P&G brands were treated in an ad hoc manner. McElroy observed that the Camay marketing effort was diffuse and uncoordinated, with no budget commitment or management focus, As a result, Camay drifted and languished. Frustrated, McElroy wrote a now-classic memo proposing a brand-focused management system.

The McElroy memo (excerpted on page 32} detailed the solution: create a brand management team responsible for a brand's marketing program and for coordination with sales and manufacturing. This memo, which built on the ideas and activities of several people inside and outside P&G, was a key event in the history of branding and has had a profound effect on how firms around the world manage their brands.

The system McElroy proposed was geared to solve "sales problems." The heart of the system was the analysis of sales and profits by market area and the identification of markets showing weakness. The brand manager conducted research to understand the causes of the problem, developed programs to turn it around, and then implemented those programs using a planning system that helped ensure that things got done and done on time. The response programs used not only advertising, but other marketing tools such as pricing, promotions, displays and packaging.

The classic brand management system was successful at P&G and elsewhere in part because exceptional planners, doers and motivators typically staffed it. The process of managing a complex system--often involving R&D, manufacturing and logistics in addition to communication tasks and distribution channel issues--required management skills and a "get-it-done" ethic. Further, because the brand manager typically had no direct line authority over those inside and outside the company involved in implementing branding programs, successful brand managers needed to have exceptional coordination and motivational skills.