Cristina Campos, Managing Director, Brand Dialogue Spain.
The general and unconscious perception of a company is what we understand by brand. In this sense, brand managers, whether in communication, marketing or branding, must keep in mind the levers that enhance the value of their brands when designing their strategies.
Many financial directors consider the brand as an intangible asset of great value to their business, which can have a tangible economic value, improve consumer perception and willingness to pay more, and facilitate the company's expansion into new markets. Therefore, companies must invest in building and maintaining a strong and recognised brand to ensure their long-term financial success.
The purchasing process begins with brand awareness followed by the degree of familiarity the consumer has with the brand, essential objectives are visibility and communication strategy. Brand recognition and familiarity are the first steps to making it the brand that meets our needs or desires.
A brand's popularity is, therefore, a critical factor for its success, and brand visibility is key to increasing its popularity, if the brand is not visible, it is unlikely that consumers will remember or choose it at the time of purchase.
Companies need to use effective marketing strategies to give visibility to their brands and increase their popularity. This includes promoting the brand through various advertising channels, social media, public relations, events or sponsorships. The brand must be consistent across all these channels so that consumers associate it with a clear and positive image.
If a brand is not getting adequate visibility, its popularity will likely decrease, which can negatively impact sales and the brand's market position. Therefore, companies must ensure they are using the right levers to give visibility to their brand and keep it top of consumers' minds.
At Brand Finance we have created a model, called BrandBeta®, which can be used to predict long-term sales growth as a result of brand value and awareness. However, in addition to this shared prediction, we also need to understand the factors driving the conversion of consideration and familiarity.
Alex Haigh, Managing Director Asia Pacific explains it in detail in his latest article "Brand Beta - What is a brand?": “The BrandBeta® model is highly predictive of share. It refers to the position brands occupy in the minds of customers: awareness and perception. It is about how customers currently perceive the brand, and it is an essential part of any brand evaluation. Analysing the impact of familiarity and conversion of consideration, we find that familiarity explains approximately 65% of the variation in share, while conversion of consideration explains approximately 35%. BrandBeta® is therefore a combination of the two measures in the proportion (65:35)."
Brand popularity levers: Are we giving adequate visibility to our brand?
However, in addition to this shared prediction, we also need to understand the factors driving the conversion of consideration and familiarity. To better understand the concept of brand, we can take as an example two of the most popular and valuable Spanish brands in 2023: Mercadona, representing the distribution sector, and Iberia, in the airlines sector. According to the market research we conduct annually at Brand Finance, Mercadona is, of the 10 most valuable brands in Spain, the one with the highest score in familiarity (94%) and conversion of consideration (93%).
Iberia, with a 90% familiarity rate and 93% conversion of consideration, is the most popular airline among Spanish consumers. These high scores in familiarity and consideration directly impact its market share. Iberia's brand purpose has remained the same for over 95 years: "connecting people generating prosperity" and always with a Spanish accent and emotions. Examples of this are two campaigns they launched in 2022. The aim of the 'Purpose' campaign was to tell everything Iberia has done over so many years and the effect of its activity. Months later, the 2022 Christmas campaign 'based on real flights' also uses emotions and real stories to connect emotionally aligned, once again with the brand's purpose. They use massive broadcast channels such as television, cinema, and digital, to reach the general population.
*2022 Christmas campaign 'based on real flights', Iberia.
Mercadona's visibility strategy is very different but equally effective. Its key is word of mouth. Television is not the main communication channel for Mercadona, however its online presence is growing, registering more than 47 million views in 2022, mainly through short videos. It maintains consistency in the messages that reach the consumer: 'We maintain low prices'. Like Zara, Mercadona does not invest in advertising but its customers are loyal and adore it and its reputation continues to grow. Its corporate communication is very active on social media and in the media (11 press releases in 2022).
The brand goes beyond the logo and is built through multiple factors, including the interaction people have with a brand's staff and the experience a service or product offers a user. All this goes into building the brand's reputation.
The brand experience is one of the most important levers for brands. According to neuroscience, if a brand has provided a satisfactory experience, our brain will tend to skip the task of having to rationally decide between two options. When a brand earns people's trust, loyalty is generated. And when people become loyal, they buy more. Therefore, the brand and finances are directly related to the brand.
Choosing a brand is one of the determining factors in the purchase decision and is considered one of the brand drivers. There are several reasons why we opt for well-known brands, such as the sense of belonging to a group, the security they provide by reducing the risk of disappointment, the convenience of saving time at the time of purchase or the differentiation they provide. Of all these factors, I have been particularly struck by the categorisation. Brands have become a classifying element that allows us to define our identity: whether we prefer iPhone or Samsung, Pepsi or Coca-Cola, Apple or Microsoft, McDonald's or Burger King. Some brands connect with our emotions more effectively than others, which makes brand storytelling one of the most powerful tools in a company's marketing strategy. The key to generating an emotional connection with a brand lies in telling stories that impact our emotions and allow us to feel empathy and engage with the brand.
In short, investing in good brand visibility means investing in brand growth and long-term brand success. If companies did not invest in building their brands, they would probably find it difficult to differentiate themselves from competitors and to attract and retain customers. Brands are an important way of communicating a company's identity and values, as well as creating an emotional connection with consumers. Without a strong brand, companies could struggle to establish a loyal customer base and generate the kind of brand recognition that leads to repeat business.
They could also have problems expanding into new markets or launching new products or services. A strong brand can provide a solid platform for innovation and growth, as consumers already trust the company and its reputation.