Copenhagen Business SchoolIMM International Marketing Management

BRAND MANAGEMENT PROCESSAPPENDIX

Uriel Alvarado CancinoFrederik Güldner Kolenda

Advisor: Richard JonesSecondary Advisor: Larry Light

November 2007

TABLE OF CONTENTS

1. History of the Financial Service Industry 3

2. Historical Background of Marketing and Brand Management 3

................................................................................The Origin of Branding 3

..................................................Branding during the Industrial Economy 5

.................................................................The Origin of Brand Advertising 6

...............................................................The Origin of Brand Management 8

.......................................................The Origin of the Marketing Concept 10

..................Marketing Communication, Positioning and Differentiation 12

..................................................................The 80s-90s and Brand Equity 15

3. Interview List 20

4. Case Material - Saxo Bank 21

...................................................................4.1 Saxo Bank Annual Report 21

.............................................................................4.2 Engagement Survey 21

1. History of the Financial Service Industry

Banks in general are as such a very old phenomenon, that dates back to the ancient world, where

gold in shape of plates were stored in temples, as these were believed to be the safest place to

store valuable goods at a time around the 18th century BC. This was the first known evidence of

the activity that is today better known as banking. Further evidence of trading dates back to the

ancient Greece, where financial transactions like money exchange and even credit were con-

ducted. In return for money a moneylender would write a credit note in one port and the client

could then cash it in another port, saving the client the danger of traveling with coins. The an-

cient Rome adopted and improved on this financial system by introducing greater administration

as well as charging interest on loan and paying interest to the moneylenders. Along with the fall

of the Roman Empire, collapsed the trading, making bankers less necessary than before. The

Christian church hastened their demise by its hostility towards the charging of interests. The

church prohibited this kind of usury as it was seen as immoral. However as the economic activity

expanded, and the Christian Church´s power increased, the papacy were the first to insist that

interest should be paid on loans related to a risk. Following this shift in the Churchs policy re-

garding usury, it became more acceptable to be a financier and the development of the financial

system took pace17.

2. Historical Background of Marketing and Brand Management

The Origin of Branding

Branding started in Sweden in the middle age (476-1492) when the ruling economy was the

agrarian and commodities were extracted from the natural world: animal, mineral, vegetables,

etc. A brand was the action of burning a symbol into the flesh of a Norse in order to signify own-

ership of the animal1. Entomology tells us that the word “brand” is a degenerate of the old Norse

word “brandr”. The Vikings may have spread the word “brandr” in England, where it was even-

1 Larry Light meeting Connecticut 2006 [Origin: bef. 950; ME, OE: burning, a burning piece of wood, torch, sword; c. D brand, G Brand, ON brandr; akin to burn1]

tually incorporated into daily language2. Similarly this action was adopted in the late twelfth and

early thirteenth centuries, through the practice of abjuration. The practice of abjuration meant

rejecting or exiling a criminal from England forever. To communicate the status of the exiled

person to the world-at-large and in order to identify them as not trustworthy, abjurers’ thumbs

were branded with an “A.”3

In trade law, the term trademark is used instead of the word “brand”. Patents and Trademarks

were legally recognized for the first time with the establishment of the Venetian Patent law in

1474.4 The meaning of a brand was later registered in the dictionary in 1552 as “identifying mark

made by a hot iron” 5. It was in between the mid 16th century and the beginning of the 19th that

the word “brand” began to be related to trade, emotions and trust. A trademark was a symbol that

would differentiate the goods between manufacturers.

The oldest brands which exist today were introduced into the market in the 18th century and are

from the alcoholic drinks sector. This is due to the fact that these products are non-perishable

(because they are alcohol based) and thus needed a distinguishing name/symbol so that they

could be marketed over a wider area and during a longer time period. Some examples of the old-

est brands include “Twining 1706”, “Schweppes 1798” and “Ballantine’s 1809” 6.

Even though the first brands had been launched, it was not legally possible to patent something

in the U.S. until after the establishment of the Constitution in 1790 and in France with the estab-

lishment of the patent law one year later in 1791.

3 http://www.law.harvard.edu/students/orgs/crcl/vol38_2/logan.php#fn41 Norman Maclaren Trenholme, The Right of Sanctuary in England: A Study in Institutional History 4 (1903).

4 http://www.jpo.go.jp/seido_e/rekishi_e/nenpyoe.htm

5 Online Etymology Dictionary, © 2001 Douglas Harper

6 Rik Riezebos, Brand Management a Theoretical and Practical Approach (2003) pg., 3

In the pre-industrial era (1760-1830), agriculture still formed the foremost source of income and

employment and most “consumers” produced their own food products. By the end of this era, in

1827, the word brand was broadened and registered in a dictionary as “a particular make of

goods”7.

Branding during the Industrial Economy

During the Industrial Revolution (1830-70) a clear shift was seen with the arrival of brands such

as C&A 1841 and Levi’s 1850 (clothing sector); Tabasco 1868 and Heinz 1869 (fast moving con-

sumer goods FMCG sector)8. However, in those days the power of the distribution chain was in

the hands of the wholesale traders and as a result most producers made articles without brand

names, for which little or no advertising was done (King and Bullmore 1974; Chernatony and

McDonald 1992) 9.

In the second half of the nineteenth century, the construction of railways and sea routes were im-

portant impulses for the development of the manufacturer-owned brand. The consumer was now

given a choice between different alternatives: locally manufactured products vs. products im-

ported via railways and waterways. At the same time there was an increasing demand for pre-

packaged articles which guaranteed a certain constant price and quality. This increasing supply

of goods and consumer demand, made it increasingly necessary to give manufactured goods a

brand name, so that one manufacturer’s products could be distinguished from those of other

manufacturers (Murphy 1990).

By the end of the nineteenth century the manufacturer-owned brand started to blossom as the

power in the distribution chain shifted more and more in the direction of the producer. This is

reflected on the arrival of brands from the FMCG sector such as Lever’s “Pure Honey Soap”

7 Online Etymology Dictionary, © 2001 Douglas Harper

8 Rik Riezebos, Brand Management a Theoretical and Practical Approach (2003) pg., 3

9 Rik Riezebos, Brand Management a Theoretical and Practical Approach (2003) pg., 3

1874 (today Unilever) and Procter’s “Ivory Soap” 1879 (today Procter and Gamble P&G)10;

Coca-Cola 1886 and Pepsi-Cola 1898 (soft drinks sector); Kodak 1887 and Philips 1891 (con-

sumer electronics sector)11.

From this brief background, we can conclude that “Branding” surged as a need to distinguish a

product and make it identifiable to a consumer through the use of a name or symbol. Following a

trademark was created as a legal mechanism to protect the right of a company to claim owner-

ship of a product name and symbol. Finally as more brands appeared it was necessary to adver-

tise them and describe their unique characteristics.

The Origin of Brand Advertising

In the last decades of the 19th century and the beginning of the 20th, manufacturers started mak-

ing use of advertising and representatives in order to avoid the power of the wholesale traders 12.

One of the first advertising agencies was founded in New York in 1864 as Carlton and Smith, an

advertising broker buying and selling space in the popular religious journals of the nineteenth

century, the firm was purchased and renamed by James Walter Thompson in 187813.

It is said that as early as 1874 William Hesketh Lever, one of the founders of Unilever, began

advertising and selling a soap called Lever’s Pure Honey in Europe14. Similarly in the US five

years later (1879), Harley Procter, one of the founders of Procter and Gamble (P&G), branded a

white soap with the name “ivory”. Ivory’s ad from 1881 is one of the earliest copy ads identified

today. This ad from P&G highlighted the attributes and functional benefits of the product. Stating

that the “ivory soap” “floated” and that it was “99 44/100% pure,” a dual claim which today is

one of the oldest and most famous ad slogans ever15.

10 Wally Olins, On Brand, Wally Ollins (2003) pg., 53 and David A. Aaker, Managing Brand Equity (1991) pg., 1

11 Rik Riezebos, Brand Management a Theoretical and Practical Approach (2003) pg., 3

12 Rik Riezebos, Brand Management a Theoretical and Practical Approach (2003) pg., 3

13 http://library.duke.edu/specialcollections/hartman/guides/jwt-history.html

14 Wally Olins, On Brand, Wally Ollins (2003) pg., 54

15 David A. Aaker, Managing Brand Equity (1991) pg., 1

Another good example of one of the first copy ads ever is the first Coca-Cola ad from around

1886:

COCA-COLA SYRUP AND EXTRACT For Soda Water and other Carbonated Beverages. This Intellectual Beverage and Temperance Drink contains the valuable Tonic and Nerve Stimulant properties of the Coca plant and cola (or

Kola) nuts, and makes not only a delicious, exhilarating, refreshing and invigorating Beverage (dispensed from the soda water fountain or in other carbonated beverages), but a valuable Brain Tonic and cure for all nerve affections-

Sick Head-Ache, Neuralgia, Hysteria, Melancholy, etc. The peculiar flavor of COCA-COLA delights every palate.

This early ad already attempts to identify Coca-Cola with a personality: “Intellectual Beverage”;

with emotions “Temperance Drink”; functions “delicious, refreshing, brain tonic and cure for all

nerve affections” and emotional benefits “exhilarating, invigorating beverage”.

Through this example we can see that “branding” was ahead in the business world compared to

its academic development already from before the 20th century. However this is a very innova-

tive example for that period. At that time most of “branding” was based on basic advertising

strategies which included the name of a product and a description of the product’s characteristics.

In this way, by 1911 Coca-Cola became the largest single advertiser in the US with a budget of

1$ million per year16.

This is basically how “brand advertising” surged in the business world, as a development of writ-

ing copy and placing advertisements in journals and magazines. Furthermore, this services were

generally outsourced and done by agencies and representatives which meant that there was little

or no strategic management involved.

In the beginning of the 20th century, James Walter Thompson published a house ad explaining

trademark advertising, in an early commercial description of what branding meant17. During the

following three decades one of the best known advertising copywriters was Claude C. Hopkins.

His work was based on direct response and “Scientific Advertising” (counting the number of

16 Wally Olins, On Brand, Wally Ollins (2003) pg., 51

17 http://en.wikipedia.org/wiki/James_Walter_Thompson

sales orders generated by a coupon in a print advertising and quantifying the cost per order)18.

Advertisements written by Hopkins were full of copy, giving rich detail of “why” the reader

should buy a brand.

Another important evolution came in the early 1920s when Bruce Barton turned General Motors

(GM) into a metaphor for the American family, “something personal, warm and human,” while

for him, “GE” was not so much the name of the faceless General Electric Company (GE) but

rather “the initials of a friend.” In 1923 Barton said to the GM president Pierre du Pont “I like to

think of advertising as something big, something splendid, something which goes deep down

into an institution and gets hold of the soul of it19.”

In other words, Barton’s work meant analyzing and understanding an organization’s “soul” to

then communicating its personality and characteristics externally through ads. This example

shows the early evolutions which lead to the leap from pure advertising to a more management

lead activity.

The Origin of Brand Management

Soon after these evolutions, as more brands appeared within same market sectors while competi-

tion within categories increased, managing the creation of ads and resulting images was not

enough. It is said that in 1931, Neil McElroy changed marketing forever when he wrote the clas-

sic memo at Procter and Gamble (P&G), which lead to the creation of the discipline of brand

management (Aaker, Joachimsthaler, 2000; Larry Light, 2004; et al).

In this memo McElroy said that in addition to having a person in charge of the advertising of

each brand, there should be a substantial team of people devoted to thinking about every aspect

of marketing it. This dedicated group should attend to only one brand. The new unit should in-

clude a brand assistant, several "check-up people," and others with very specific tasks 20.

The concern of these managers would be the brand, which would be marketed as if it were a

separate business. In this way it would be possible to solve “sales problems” by analyzing sales

18 John Philip Jones 2002, The ultimate secrets of Advertising, Sage Publications pg., 3

19 Naomi Klein 2000, No Logo, Harper Perennial, pg., 7

20 David A. Aaker & Erich Joachimsthaler, Brand Leadership, Free Press Business, 2000, pg., 3

and profits for each market area in order to identify problem markets21. Moreover, through brand

management, the features and benefits of every brand would be distinguished from those of

every other22.

This evolution came from McElroy’s identified need of focusing and coordinating the marketing

efforts for Camay soap. McElroy’s idea was that a brand management team would be responsible

for creating a brand’s marketing program and coordinating it with sales and manufacturing. The

process of managing a brand meant dealing with a complex system - often involving R&D,

manufacturing, and logistics in addition to advertising, promotion, and distribution-channel is-

sues. A brand management team had to include planners, doers, and motivators; while successful

brand managers needed to have exceptional coordination and motivational skills. According to

Aaker, the classic brand management system was usually limited to a relevant market within a

single country and the brand manager tended to be tactical and reactive, observing competitor

and channel activity as well as sales and margin trends. Under this model Strategy was often

delegated to an agency or simply ignored 23. From McElroy’s description, we can see that brand

management began as a process responding to the need, identified by middle management, for a

multidisciplinary, multifunctional team to manage a brand.

In the academic world brand management attracted the interest of numerous scholars from a

wide variety of disciplines as psychology, sociology, anthropology, economics and strategy. In

this way, two decades after McElroy’s important contribution to brand management, during the

1950s, Roose Reeves developed the idea of the Unique Selling Proposition (USP) and described

it in a widely selling book “Reality in Advertising” published in 1960. Also at around that time,

David Ogilvy, introduced the concepts that we know today as brand image and personality in

1955: Products, like people, have personalities, and they can make or break them in the market-

place... Every advertisement should be thought of as a contribution to the complex symbol which

21 David A. Aaker & Erich Joachimsthaler, Brand Leadership, Free Press Business, 2000, pg., 3

22 Larry Light, Brand Design, Corporate Manuscript, Arcature June 28, 2006

23 David A. Aaker & Erich Joachimsthaler, Brand Leadership, Free Press Business, 2000, pg., 3

is the brand image24. Thus, even-though McElroy had already introduced a management based

branding process; during the 1960s, the predominant and most widely used strategy was based

on advertising the product advantages through “unique selling propositions” (USPs)25. As more

products and brands focused on advertising their USPs, it became increasingly difficult to distin-

guish the unique characteristics of the offering.

The Origin of the Marketing Concept

After the second world war, in 1950, the service economy first employed more than 50 percent

of the US population. Marketing’s modern origins as a normative management discipline

emerged in the 1950s (Baker, 1999)26. Baker (1974, 1991) presented a broad treatment of mar-

keting definitions which positions marketing as a hybrid management field intertwined from mi-

croeconomics, statistical mathematics and psychology. Brand Management has been couched by

marketing management to a great extent.

In 1960 the American marketing Association (AMA) proposed a definition of a brand stressing

primarily its logo and visual aspects with the main purpose of identification and differentiation.

“A name, term sign, symbol or design, or a combination of them, intended to identify the goods

or services of one seller or group of sellers and to differentiate them from those of competitors.”

In the marketing world, a clear distinction appeared in the 60s between those who based their

strategies in purely advertising and promotional techniques and those who believed as Theodore

Levitt, that “marketing should be tied more closely to the inner orbit of business policy”. In this

way in 1960, Levitt who was then a lecturer in business administration at the Harvard Business

School, former editor of the Harvard Business Review and who later became head of the Market-

ing Area at Harvard, wrote the now classic article “Marketing Myopia”.

24 David Ogilvy, 1955 speech to AAAA, quoted by Roman, K (2004) “David Ogilvy: The most famous advertising man in the world.” www.gandalf.it/m/ogilvy2.htm c.f. John Grant (2006) “Brand Innovation Manifesto” p.g., 18

25 Rik Riezebos, Brand Management a Theoretical and Practical Approach (2003) pg., 4

26 Chris Hackley, Marketing and Social Construction (2001) Routledge London pg., 67

In this article Levitt claims that “Management must think of itself not as producing products but

as providing custom-creating value satisfactions." Levitt claims that firms that define their busi-

ness myopically in product terms can stagnate even though the basic customer need they serve is

enjoying healthy growth. His key contribution was based on defining the business in terms of the

basic customer need rather than the product.

We believe that this contribution was very important, as in this way a company would inherently

increase internal creativity and encourage the continuous creation of new strategic options. Or in

Levitt’s words “what survival always entails, that is, changing.”

Already at that time, Levitt claimed that “what usually gets emphasized is selling”, while market-

ing “a more sophisticated and complex PROCESS, gets ignored.” and would often receive a

“step child treatment”. This is one of the few contributions from that period not centered solely

on advertising and communication as for him “the view that an industry is a customer-satisfying

process, not a goods-producing process, is vital for all businessmen to understand... the entire

corporation must be viewed as a customer-creating and customer-satisfying organism.

In a retrospective commentary published 15 years later, Levitt recognized that Peter Ferdinan

Drucker, in “The concept of the corporation, 1946” and “The practice of management, 1954”,

originally provided him with a great deal of insight. In his 1954 work Drucker placed marketing

at the centre of the organization and proposed what became widely known as a marketing phi-

losophy of business. The following quote has been reproduced in hundreds of marketing texts

and articles including Kotler, 1994; Doyle, 1995; Deshpande, 1999; etc. “Marketing is not only

much broader than selling, it is not a specialized activity at all. It is the whole business seen

from... the customer’s point of view (Drucker, 1954, pp. 35-6).

Hence, already by 1960, the need for a marketing process based on satisfying consumer needs

rather than on selling a product, had already been identified. This was following the management

and corporation concepts introduced by Peter Ferdinan Drucker in the mid 50s.

In line with this emerging “normative marketing ideology” 27, various marketing tools, concepts

and frameworks were proposed in the following decades. These include the “Product Life Cycle

(PLC) Theory” (Patten, 1959; Cox, 1967; Smallwood, 1973), Market Segmentation (Wendell R.

Smith, 1956; Russel I. Haley, 1968; Plummer J.T., 1974) and the marketing mix which was first

coined by Bordern, 1964 (McCarthy, 1981; Baker, 1995) and among various formulations of the

marketing mix model the “Four Ps” (product, price, promotion, place) became widely utilized

and popular for its simplicity.

Finally, in 1967, Philip Kotler, today recognized as one of the most influential authors in the

field, published the now classic book: “Marketing Management: Analysis, Planning, and Con-

trol.” In this book Kotler claims that “the marketing concept is a business philosophy that arose

to challenge the previous concept (production and sales concepts). Although it has a long history,

its central tenets did not fully crystallize until the mid 1950s’ (Kotler, 1967, p. 17). He further

defined marketing management as a “process” which consists of analyzing marketing opportuni-

ties, researching and selecting target markets, designing marketing strategies, planning marketing

programmes, and organizing, implementing, and controlling the marketing effort.

Marketing Communication, Positioning and Differentiation

All the various marketing management contributions of the 60s based on Druckerian Manage-

ment philosophy, did not stop those who believed that the emphasis was to be put on advertising

and selling. In this way, Other general models and frameworks about marketing communications

were presented and evolved from the 60s. These include models such as the hierarchy of effects

approach, the AIDA (attention, interest, decision, action) (Lavidge and Steiner, 1961; Barry and

Howard, 1990), etc.

27 Chris Hackley, Marketing and Social Construction (2001) Routledge London pg., 67

In the early 70s in a series of Advertising Age articles published in 1972, two marketing consult-

ants, Jack Trout and Al Ries, recognized the need of positioning a product as a response to what

they called the “over-communicated society”.

Their concept was simple: the success of a new product depended on how consumers thought

about that product or, in their own words, how the product was positioned in the consumer’s

mind. In 1980 Trout and Ries published their thoughts in the classic book “Positioning: The Bat-

tle for Your Mind”, where in addition to the concept of positioning they urged companies to look

not only at their strengths but also at the competitor’s weaknesses28. The concept of positioning

as defined by the authors in the 20th anniversary edition of the book “starts with the product...

but it is not what you do to the product... but what you do to the mind of the prospect. That is,

you position the product in the mind of the prospect.29”

As more media channels and strategies for communicating a company’s products raised, in the

early 1980s Don E. Shultz, proposed the concept of Integrated Marketing communications

(IMC)30. This concept meant that all components of a brand’s communication should follow a

common strategy and be planned to work cooperatively. The main communication elements that

should be integrated in the common plan were to be “highly selective” advertising, direct mar-

keting, public relations, selling to the retail trade, sales promotions directed to the consumer, in-

store activities, packaging, influencing opinion leaders and word-of-mouth. This evolution meant

a broader analysis and a need for a strategy to coordinate different medias and advertising possi-

bilities. At around that time too, large communication conglomerates surged with the objective to

provide a “one-stop shopping” solution to coordinate the different communication activities.

28 Positioning: The Battle for Your Mind By Al Ries, Jack Trout 1980, 1985, 2001, etc pg., 5

29 Positioning: The Battle for Your Mind By Al Ries, Jack Trout 1980, 1985, 2001, etc pg., 2, 3

30 Don E. Schultz, Stanley J. Tannenbaum, and Robert F. Lauterborn, Integrated Marketing Communications (Chi-cago: NTC Business Books, 1993)

During the early 80s while the IMC was the latest development in marketing communications,

the corporate world began to shift the focus from producing products to images of their brands.

The focus was no longer in manufacturing but rather on marketing and more specifically on ad-

vertising.

Most of the concepts presented until then are part of the evolution of the advertising and com-

munication functions (Scientific Advertising, 1920s; USPs, 50-60s; AIDA, 1961; Positioning,

mid 70s; IMC, 1980). These concepts however, had little or no emphasis on the economic value

or strategic management of brands. Furthermore, this approach created a gap between the prom-

ise of the offering, communicated through advertising and other mechanisms, and the reality de-

livered.

In 1972 and 1973 in the midst of the service economy, Levitt published two titles related to serv-

ice marketing: Production-line approach to service and the industrialization of service. Also in

1973, at a time when advertising was still the driving force of marketing, Drucker presented the

notion of the importance of marketing and innovation to satisfy genuine consumer needs.

“because it is the purpose to create a customer, any business enterprise has two-and only two-basic functions: mar-keting and innovation... There will always, one can assume, be need for some selling. But the aim of marketing is to

know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then, is to make the product or service

available.” Management: Tasks, Responsibilities, Practices (by Peter Drucker 1973)

In the beginning of the 80s and throughout the 90s Michael Porter contributions to Strategic

Management had a great influence in Marketing. With his various models including the five

forces, the value chain, generic strategies of cost leadership, product differentiation and segmen-

tation, the market positioning strategies of variety based, needs based, and access based market

positions, etc. These various contributions helped with the development of the academic field

dealing with “strategy content”, in other words the “what” of strategy (De Wit & Meyer, 2003)

and hence the “what or content” of strategic marketing.

At a time when most companies where focused on selling and communicating differences, also

in 1980, Ted Levitt published the article “Marketing success through differentiation of anything”.

In this article Levitt introduces the importance of the services, intangible aspects and behavior

involved closely related to an offering.

We believe that some of these industry insights presented by Levitt, combined with increased

competition across industries, improved technologies and increased consumer sophistication,

were early signs of what would lead to what today is widely recognized as the experience econ-

omy31.

The 80s-90s and Brand Equity

It is not clear who invented the expression of brand equity, but few uses of it have been traced

before the mid-eighties (Ambler & Styles 1995)32. In the mid 80s academics such as Kevin Lane

Keller, began studying the effects and importance of memory factors in advertising and its rela-

tion with consumer brand evaluations in the moment of purchase, “Memory Factors in Advertis-

ing: the effect of advertising Retrieval Cues on Brand Evaluations, 1987”. In this article Keller

was already studying the importance of having memorable brand associations that could improve

the performance of advertising, these were some of the early foundations of the concept of

“brand equity”.

Soon the value of a brand image became more evident in the management world, as some of the

most important events in the history of brand management occurred in 1988 with a series of

brand acquisitions including when Philip Morris purchased Kraft for $12.6 billion - six times its

book value. The price difference between balance sheet valuations and the price paid was attrib-

uted to the value of the word and images related to “Kraft”. This meant that for the first time a

31 Levitt, T. (1972), "Production-line approach to service", Harvard Business Review, Vol. 50 No.5, pp.20-31.

Levitt, T. (1976), "The industrialisation of service", Harvard Business Review, Vol. 54 No.5, pp.32-43.

32 Paul Feldwick, What is brand equity anyway, and how do you measure it? Best Paper Award, Market Research Society Conference 1996

big monetary value had been assigned to something that had previously been abstract and un-

quantifiable: a brand name.

One year after this and other similar incidents, Abratt, R. presented a model aiming at integrating

the external and internal marketing approaches in his article “A new approach to the corporate

image management process, 1989”. In this article he argues that there must be a fit between the

corporate brand identity, the employees’ view of the identity (the internal culture), the marketing

communication, and stake-holders (the external environment).

In the early 90s David A. Aaker and Keller published articles such as “Consumer Evaluations of

Brand Extensions” 1990; and Managing Brand Equity: The Impact of Multiple Extensions”

1990”. These two articles were followed by the now classic book Managing Brand Equity by

David A. Aaker 1991. In this book Aaker presented the concept of brand equity accompanied by

various historical examples and cases. The model of brand equity was presented by Aaker fol-

lowing the need to manage brands strategically by creating, developing and exploiting each of

the five assets that would create value; namely: Brand Loyalty, Brand Awareness, Perceived

Quality, Brand Associations and other proprietary brand assets. This model would finally come

to clarify for managers exactly how brand equity contributes to value.

In the first page of his classic book, David Aaker quoted Larry Light, who was then described as

a prominent advertising research professional; and who today is CEO of Arcature a brand man-

agement consultancy company and former McDonalds Chief Marketing Officer 2002-2005

(CMO, Im lovin’ it campaign).

“Larry was asked by the editor of the Journal of Advertising Research for his perspective on

marketing three decades into the future. Light’s analysis was instructive:

The marketing battle will be a battle of brands, a competition for brand dominance. Businesses and investors will recognize brands as the company’s most valuable assets. This is a critical concept. It is a vision about how to de-

velop, strengthen, defend, and manage a business... It will be more important to own markets than to own factories.

The only way to own markets is to own market dominant brands.” 33

33 Also quoted by Leslie de Chernatony, Categorizing Brands, Journal of Marketing Management, 1993 pg., 173

Today we believe that Larry was right, in fact following the publication of the Aaker’s classic

book managing brand equity, this concept became one of the most widely discussed topics both

in the managerial and academic marketing world. In America, the Coalition for Brand Equity

chaired by Larry Light was founded in 19913435. Following in 1992 Jean Noel Kapferer pub-

lished another influential book “Strategic Brand Management - Creating and sustaining brand

equity long term, where the concept of brand identity was first conceptualized. Since then, there

have been a numerous amount of publications on branding, definitions, approaches, models and

strategies.

Some of the most influential perspectives, introduced throughout the 90s include brand as a legal

instrument: Crainer (1995); differentiating device: Aaker (1991), Kotler et al (1996); Company/

Corporate: Diefenback (1992), Aaker (1996); Identity System: Kapferer (1992), Aaker (1996);

Image: Keeble (1991); Relationship: Woodward (1991), Arnold (1992), Blackston (1992); Add-

ing value: de Chernatony and McDonald (1994); Evolving entity: Goodyear (1996), etc36.

Also in the mid nineties, in 1994, the Agreement on Trade Related Aspects of Intellectual Prop-

erty Rights (TRIPS) broadened the legal definition of trademark to encompass "any

sign...capable of distinguishing the goods or services of one undertaking from those of other un-

dertakings". This means that if a company can prove that its consumers are able to perceive a

certain sign as a distinguishing factor for their offering, this can be legally protected. In the legal

world of brands (trademarks), after an enhanced distinctiveness through use has been proven, in

the US and Europe, today it is possible to register colors, holograms (picture sequence), shapes,

34 Paul Feldwick, What is brand equity anyway, and how do you measure it? Best Paper Award, Market Research Society Conference 1996

35 Raymond Perrier, Brand Valuation, Interbrand Group plc, premier books second edition 1991 pg.,8

36 Leslie de Chernatony and Francesca Dall’ Olmo Riley, Brand consultants’ perspectives on the concept of “the brand” Marketing and Research Today 1997

sounds (e.g. MGM lion’s roar, Pentium Processor, McDonald’s 5 tone logo “Dabadabada” Im

lovin’ it, etc) and even smell.

Academically speaking, today there are as many brand management books as there are brands

and as many branding definitions as there are managers. In an effort to reduce confusion among

executives and academics L. de Chernatony has categorized brands into thirteen main purposes:

as logo (symbol/design/name), legal instrument, as company (corporate branding), as shorthand

(simplifying decision making process by facilitating the processing of large amount of informa-

tion), as risk reducer (decision based on least perceived risk), as positioning device (brand asso-

ciation with a particular category), as personality (functional and emotional values related to a

person’s traits)37.

37 Leslie de Chernatony, Categorizing Brands, Journal of Marketing Management, 1993 pg., 173 From Brand Vision to Brand Evaluation 2001, 2006. pg., 28-41

Table 1.1 source: Own

3. Interview List

Please see Interview Folder with audio files

Below the interviews conducted in the three levels are outlined

Management Level Industry Level Company Level

3.1 Dr. Larry Light, Brand Man-agement Expert Practitioner

3.4 Kontrapunkt Jasmi Bonnén, Senior Strategy Consultant; Marie Andersen, Communication Con-sultant

3.8 Rabbe Ekholm Chief Commer-cial Officer (CCO)

3.2 Dr. David Aaker, Brand Man-agement Expert Academic

3.5 Hello Group Bo Damgaard, Marketing Consultant; Martin Lin-degaard, Senior Consultant

3.9 Kasper Grønnegaard, Director of global marketing

3.3 Margo Georgiadis, Executive Vice President and CMO, Discover Financial Services LLC

3.6 Jyske Bank Frank Pedersen, Director of Marketing and Com-munications

3.10 Birgitte Juel Christensen, Head of Corporate Brand

3.7 E*Trade Christian Mørk Lauridsen, Senior Retail Sales Manager

3.11 Ulrik Branner, Director of global business development

3.12 Morten Skov, Human Re-sources manager

3.13 Kim Fournais, CEO and Co-owner

3.14 American Marketing Association Marketing Strategy Forum General Interviews

4. Case Material - Saxo Bank

4.1 Saxo Bank Annual Report

4.2 Engagement Survey