‘Iconic’ is a big label. But there’s more to an iconic brand than just the logo. It certainly helps, but you’ll often find that the biggest brands aren’t the ones with the best logs.

That aside…what makes a brand iconic? Ask the experts and they’ll tell you that it’s a combination of things. “We respond to experiences,” says Ben Marshall, creative director at Landor Associates, “stories we can pass on, and frankly, some things that are simply unusual or inspired.”

Michael Johnson of Johnson Banks agrees that an iconic brand should deliver on multiple levels – the product or service itself, the environment it appears in, its tone of voice, and more. “Thinking about ‘branding’ from this cinematic perspective is relatively new,” he admits. “It’s pretty difficult to deliver successfully.”

The truth is, making a brand become an ICON is not an easy task, but the rewards are immeasurable. Iconic brands like Apple and Harley Davidson have a level of brand equity that will sustain the brand’s life for years..

Identity Brands vs. Iconic Brands

The first thing you need to understand if you want to build an iconic brand is the difference between identity brands and iconic brands. There are many identity brands but far fewer iconic brands. The same could be said of celebrities. There are many celebrities but few have reached icon status.

In simplest terms, an identity brand is one that an individual believes represents a lifestyle, personality, emotion, value, or desire that he identifies with directly. For example, Volvo is an identity brand that people who value safety and prefer conservative lifestyles identify with.

Iconic brands take the concept of identity brands a step further by representing a sub-culture of society. Iconic brands often fill a void in consumers’ lives and are typically found in high-involvement categories where consumers are very emotionally invested. Harley Davidson is a perfect example of an iconic brand that a sub-culture of society identifies with and who are highly emotionally invested in the lifestyle the brand represents.

Iconic Brand Evolution

Iconic brands can evolve organically as consumers experience them and identify with them. However, iconic brands can also evolve with the help of effective marketing that changes consumer perceptions and heightens emotional involvement.

For example, Harley Davidson is a brand that evolved into an icon organically over time in response to consumers’ interactions with the brand. Effective marketing supported that organic evolution. On the other hand, Apple successfully created a perception of high-emotional involvement in the technology category through brilliant marketing. Today, Apple is an iconic brand that an entire sub-culture of society is highly loyal to. Apple created a perceived void and filled it.

And, as you may have read or seen on my sight, I believe the Flatiron building in NYC, is one of the best, most ICON brands of buildings…in the world! Yes, a strong statement. But just read about how this building began, and where it is today more than a century later, and I am sure you will agree.

To read more about the origins of the Flatiron building, click here.

Brand equity refers to the importance of a brand in the customer’s eyes, while brand value is the financial significance the brand carries. Both brand equity and brand value are educated estimates of how much a brand is worth.

What’s the Difference Between Brand Equity & Brand Value?

Brand equity and brand value are similar, but not the same. Oftentimes, there is confusion around how each differs so let’s look at exactly what each means:

Brand Equity

Brand equity is a set of assets or liabilities in the form of brand visibility, brand associations and customer loyalty that add or subtract from value of a current or potential product or service driven by the brand. It is a key construct in the management of not only marketing, but also business strategy.

In the late 1980s, brand equity helped create and support the explosive idea that brands are assets that drive business performance over time. That idea altered perceptions of what marketing does, who does it, and what role it plays in business strategy.

Brand equity also altered the perception of brand value by demonstrating that a brand is not only a tactical aid to generate short-term sales, but also a strategic support to a business strategy that will add long-term value to the organization.

Brand Value

Brand value, on the other hand, is the financial worth of the brand. To determine brand value, businesses need to estimate how much the brand is worth in the market – in other words, how much would someone purchasing the brand pay?

It is important to note that a positive brand value does not automatically equal positive brand equity.

How Should Brand Equity & Brand Value Be Measured?

While measuring brand value is fairly straightforward, the process for brand equity is not quite so simple. Brand equity is a set of assets or liabilities in the form of brand visibility, brand associations and customer loyalty that add or subtract from value of a current or potential product or service driven by the brand. Here we’ll dive into each.

Brand Visibility

This means that the brand has awareness and credibility with respect to a particular customer need—it is relevant. If a customer is searching for a buying option and the brand does not come to mind, or if there is some reason that the brand is perceived to be unable to deliver adequately, the brand will not be relevant and not be considered.

Brand Associations

Brand associations involve anything that created a positive or negative relationship with or feelings toward the brand. It can be based on functional benefits but also a brand personality, organizational values, self-expressive benefits, emotional benefits or social benefits.

Customer Loyalty

Customer’s loyalty provides a flow of business for current and potential products from customers that believe in the value of the brand’s offerings and will not spend time evaluating options with lower prices. The inclusion of loyalty in the conceptualization of brand equity allows marketers to justify giving loyalty priority in the brand building budget.

Driving Brand Value in the Short Term

The value of a brand represents its impact on the short-run and long-run flow of profits that it can generate. With respect to short-term profitability, the problem is that programs that are very good at driving short-run products – like price promotions – can damage brands.

Looking at the ways a brand can help drive short-term financial performance can help mitigate this tendency:

  • Brand Loyalty

    • Reduced Marketing Costs
    • Trade Leverage
    • Attracting New Customers via Awareness & Reassurance
    • Time to Respond to Competitive Threats

  • Brand Visibility

    • Anchor to Which Other Associations Can Be Attached
    • Familiarity Which Leads to Liking
    • Visibility That Helps Gain Consideration
    • Signal of Substance/Commitment

  • Brand Associations

    • Helps Communicate Information
    • Differentiate/Position
    • Reason-to-Buy
    • Create Positive Attitude/Feelings
    • Basis for Extensions

Improving Brand Value in the Long-Run

One of the ongoing challenges of brand equity proponents is to demonstrate that there is long-term value in creating brand equity. The basic problems are that brand is only one driver of profits, completive actions intervene, and strategic decisions cannot wait for years.

There are, however, some perspectives that can be employed to understand and measure the long-term value of brand equity:

Brand Value Approach #1: Estimate the Brand’s Role in Business

One approach is to estimate the brand’s role in a business. The value of a business in a product-market such as the Ford Fiesta in the UK market is estimated based on discounting future earnings. The tangible and intangible assets are identified and the relative role of the brand is subjectively estimated by a group of knowledgeable people, taking into account the business model and any information about the brand in terms of its relative visibility, associations and customer loyalty.

The value of the brand is then aggregated over products and markets countries to determine a value for brand.  It can range from 10 percent for B2B brands to over 60 percent for brands like Jack Daniel’s or Coca-Cola.

Brand Value Approach #2: Observe Investments in Brand Equity

A second approach is to observe that, on average, investments in brand equity increase stock return, the ultimate measure of a long-term return on assets. Evidence comes from a series of studies I conducted with Professor Robert Jacobson of the University of Washington, using time series data which included information on accounting-based return-on-investment (ROI) and models that sorted out the direction of causation.

The consistent finding was that the impact of increasing brand equity on stock return was nearly as great as that of an ROI change, about 70 percent as much. In contrast, advertising, also tested, had no impact on stock return except that which was captured by brand equity.

Brand Value Approach #3: Reflect on Other Valuable Brands

A third approach is to look at case studies of brands that have created enormous value. Consider, for example, the power of the Apple personality and innovation reputation, BMW’s self-expressive benefits connected to the “ultimate driving machine,” and the ability of Whole Foods Market brand to define an entire subcategory.

Or, the fact that from 1989 to 1997 two cars were made in the same plant using the same design and materials and marketing under two brand names, Toyota Corolla and Chevrolet (GEO) Prism. The Corolla brand was priced 10% higher, had less depreciation over time, and had sales many times more that the Prizm. And consumers and experts both gave it higher ratings. The same car! Only the brand was different.

Brand Value Approach #4: Consider the Conceptual Model

It’s important to consider to consider the conceptual model surrounding a business strategy. What is the business strategy? What is the strategic role of the brand in supporting that strategy? How critical is it? Is price competition the alternative to creating and leveraging brand equity? What impact will that have on profit streams going forward? Management guru Tom Peters said it well:

“In an increasingly crowded marketplace, fools will compete on price. Winners will find a way to create lasting value in the customer’s mind.”

Final Thoughts

Brand equity continues to be a driver of much of marketing, indeed business strategy. For it to work, it needs to be understood conceptually and operationally. And it is important that it be tied to brand value in credible ways.

Discover how Prophet helps companies establish a brand strategy that drives business growth.

From Investopedia – By Sandra Lim

Brand personality is a set of human characteristics that are attributed to a brand name. A brand personality is something to which the consumer can relate; an effective brand increases its brand equity by having a consistent set of traits that a specific consumer segment enjoys. This personality is a qualitative value-add that a brand gains in addition to its functional benefits.

Understanding Brand Personality

Brand personality is a framework that helps a company or organization shape the way people feel about its product, service, or mission. A company’s brand personality elicits an emotional response in a specific consumer segment, with the intention of inciting positive actions that benefit the firm.

Customers are more likely to purchase a brand if its personality is similar to their own. There are five main types of brand personalities with common traits:

  1. Excitement: carefree, spirited, and youthful
  2. Sincerity: kindness, thoughtfulness, and an orientation toward family values
  3. Ruggedness: rough, tough, outdoorsy, and athletic
  4. Competence: successful, accomplished and influential, highlighted by leadership
  5. Sophistication: elegant, prestigious, and sometimes even pretentious

Dove, for example, chooses sincerity as its brand personality, to attract feminine consumers. Luxury brands, such as Michael Kors and Chanel, aims for sophistication. Their brand personality focuses on an upper-class, glamorous, and trendy lifestyle, which attracts a high-spending consumer base. REI, the outdoor recreation retail store, has a rugged brand personality; they focus on inspiring their audience—who are typically outdoorsy, adventurous people—to be strong and resilient.

Brand Personality Versus Imagery

A company’s brand personality should not be confused with its imagery. A company’s imagery is a series of creative assets that communicate the tangible benefits of its brand. Conversely, a firm’s brand personality directly creates an emotional association in the mind of an ideal consumer group.

It is important for a company to accurately define its brand personality so it resonates with the correct consumer. This is because brand personality results in increased brand equity and defines the brand’s attitude in the marketplace. It is also the key factor of any successful marketing campaign. In order to choose a brand’s personality, companies consider the five personality types and select the one the company wishes to convey.

If, for example, a new outdoor apparel company wants to resonate with consumers, the natural inclination is to create a brand personality that is rugged. However, it is possible that the company’s competitor may have already positioned itself as the rugged outdoor apparel brand. Instead, the new apparel company can position itself uniquely in the mind of the customer by adopting a brand personality of sophistication. This differentiates the brand as an upscale, high-end option to outdoor apparel, which attracts a specific type of consumer.