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Brand Equity and the CEO

Brands exist in the mind and our minds are full of familiar images that we instantaneously recall when prompted by sights, sounds, smells and other stimuli. How do these imprints get etched in customer’s mental product grids? And, what is the role of the CEO in this process of creating and maintaining these brand images or …

Brands exist in the mind and our minds are full of familiar images that we instantaneously recall when prompted by sights, sounds, smells and other stimuli. 

How do these imprints get etched in customer’s mental product grids? And, what is the role of the CEO in this process of creating and maintaining these brand images or positions in the mind? 

Marketing authors Reis & Trout described the mind as a dripping sponge. They maintain that the only way to build brand equity is to replace one brand value perception with another in the mind. 

This is really what marketing is all about isn’t it? Creating a brand value proposition in the mind and keeping it there by constantly reinforcing that value position with the investment in the total marketing mix of promotions day-in day-out. 

Once you stop investing in maintaining your brand position in the mind you are giving your competition a wonderful opportunity to replace your brand with theirs in the customers mind.

Since customers requirements are constantly changing, maintaining your value proposition and position in the mind is a perpetual challenge for any CEO. There are many examples of this, most recently with Starbucks. 

When CEOs and their management teams become complacent with the status quo and start to take the customer for granted, or fail to realize that customer requirements have changed, they are surprised to find out that other brands have replaced theirs in the minds of many of their now lost customers.  

Needless to say, this has been the signal for demise of many inattentive CEOs. General Motors is the classic example of this tenet of marketing 

Likewise, the market is littered with company’s that realized this situation when it was too late for them to do anything about it. I’m sure you still recall retail brands that no longer exist like Woolworth, Bradlees, Caldor and maybe even EJ Korvettes. The retail wars almost squeezed out another familiar brand – K Mart, until they merged with Sears. But even now their collective share of mind is shrinking. 

We are all conscious of the ongoing cola, beer and car battles for share of mind. Even the master of brand identity marketing P&G came to this realization as it entered the new millennium. It was able to reestablish its pre-eminence as the consumer product leader under its customer conscious CEO, A.G. Lafley, who was honored as the 2006 Chief Executive of the Year for reinventing his company by Chief Executive magazine. 

 You may want to read about his process in his new book “The Game Changer” where he emphasizes that the key to innovation which he acknowledges as the source of all organic growth is understanding changing customer requirements, or in his words “what customers want” by “keeping the customer at the center of all of our decisions”.      

How do you really “value” brand equity? The ultimate measure is what someone is willing to pay for the stock or the acquisition of the brand. Not too long ago Dunkin Donuts was sold for $2 billion and now Absolute for $8 billion +. Conversely, Chrysler and the Jaguar/Land Rover collection of car brands were sold for less than their owners paid to acquire them. 

How much do you think Apple or Nike is worth? Haven’t we been seeing the red and white Target bullseye everywhere along with the unforgettable bull terrier? As a result of Target investing $1.2 billion last year recent surveys indicate that an unbelievable 97 percent of us recognize the Target brand. Wow – what a share of mind! 

Target’s investment in brand identity over the past decade has grown their revenues on average 12 percent a year to $63 billion last year.  

In their market segment an interesting fact is that the brands that compete directly with the Target brand, namely Wal-Mart and Kmart, all started in the same year – 1962. Interestingly, 45 years later all three are now fighting for basically the same share of mind. 

Let’s see what value proposition resonates best with their customers and consequently, which brand stays or is replaced in the respective minds of more or less of them over the next years, as each brand competes for share of mind.    

The question is what is your brand worth?  And more importantly what are you doing to maintain your position in your customer’s mental product grid as their requirements change? Lastly, what are you doing to replace competitive brands with yours in the minds of their customers? 

In this age old battle for share of mind your role as CEO is the driving force to create brand equity for your stakeholders.  

Let’s start a dialogue on this issue by emailing me any questions that you have on how to win the battle for the customers mind. 

An entrepreneur himself, Bob has spent most of his career involved with starting, growing and selling businesses. Having held managerial positions with IBM, Pfizer and Exxon, he draws upon extensive organizational experience with large and small companies in advising CEOs of growing firms. He is available online to answer questions from Chief Executive readers, as well as offer workshops, tips, books to read and a monthly online column about common issues facing CEOs of growing firms. Bob has been featured in USA TODAY for his work with Inc 500 firms and is associated with NYU’s Stern Graduate School of business in their Center for Entrepreneurial Studies where he is a Venture Mentor, Marketing Strategist and Business Plan Reviewer.


He is the author of GUIDEBOOK TO PLANNING – A Common Sense Approach to Building Business Plans for Growing Firms, which has recently been reprinted. He is a past contributor to Chief Executive and one of his articles was featured in The Best of Chief Executive.  Email Bob at: rmdonnelly@chiefexecutive.net

About bob donnelly

bob donnelly
Bob Donnelly is CMO of Flo-Tite Valves & Controls, a U.S. based supplier of valves and components to the process control industry in North America. A coach, educator, and advisor to founders/CEOs of growing firms, he is a serial entrepreneur, having started, grown and sold several technology based businesses. Previously he held executive positions at IBM, Pfizer and Exxon.