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Irish businesses may be reducing their commitment to brand building at the wrong time

Date: 16 Jun 2009

Publication: Sunday Independent Business

Author: Professor Damien McLoughlin

The reductions in advertising spend at RTE, TV3 and other media outlets are worrying signals that Irish businesses may be reducing their commitment to brand building at the wrong time.  Marketing textbooks list the benefits of such investments, including the willingness of consumers to pay higher prices and to be more loyal when purchasing.  Is there any company not interested in such qualities right now?  Well, there is considerable evidence that these benefits are achievable even in the current economic circumstances.

The Millward Brown annual BrandZ survey measures the value of the top 100 global brands (no Irish brands are included).  This year’s survey highlights the combined value of the world’s 100 leading brands as actually increasing in value by 2 per cent since 2008, to $1.95 trillion.  The identity of the top brands, Google, Microsoft and Coca Cola, is unsurprising but their contrasting approaches to brand building offers important insights.

For Google, brand building means creating and distributing a stream of products that are free, simple to use, relevant to people’s lives and encourage users to discuss them with others – no TV advertising was used to promote the world’s most valuable brand in 2009.  In contrast, Coca-Cola uses an elaborate mix of marketing communications to build its brand.  However, long term its investment in marketing has had a simple objective – to get a Coke within an arm’s reach of everyone.

The general lesson is that what is done in terms of brand investment is less important than a commitment to making an investment in meeting customer needs over time, altering as culture and society changes, but always focusing on communicating this commitment to consumers through a brand.

Prof Damien McLoughlin is Senior Lecturer in Marketing at UCD Michael Smurfit Graduate Business School