February 2007 - Marketing Methods

The Value of Branding

By Peter Koeppel

I started my career in marketing working in brand management on the Heinz Ketchup business. Working on a brand that was a household name and that had more than a 50-percent market share provided me with an appreciation of the value of a strong brand. In our industry, many marketers overlook the power of branding and the value it can create for your company.

In the direct response industry, the marketers who understand the power of branding seem to be the ones who are most successful and have the longest running campaigns. Brands such as Bowflex and Proactiv Solution come to mind when I think of successful direct response brands. Having a well-known brand can dramatically increase the value of your company. Just look at Orange Glo. I’m certain the reason Church & Dwight was willing to pay $325 million to buy Orange Glo was because of the company’s profitability and the value of the OxiClean brand.

Direct response marketing provides marketers with the opportunity to both sell and brand their products simultaneously. If you can establish your brand as the leader in the marketplace, it can help differentiate your product from the competition, and it makes it harder for competitors to gain market share. For example, my company works with a leading ladder product. In only a few years, that product went from nothing to the leading brand in its category and knock-off products haven’t been able to gain traction. This was accomplished through effective branding and marketing of the product.

If you have a hot brand, it allows you to branch into new product areas. It’s allowed OxiClean to launch a full line of products, Google to branch into radio and video, Apple to offer video and Motorola to come out with new products based on the success of the RAZR. Last year, Google’s brand value increased by 46 percent, to more than $12 billion, which represented the biggest gain of any brand, according to an August 2006 BusinessWeek article.

In this age of blogging and instant information on the Internet, a brand also can be undermined faster than ever. For example, Dell’s “service and quality were denounced by bloggers” on a popular website and this publicity negatively impacted its brand, according to a December 17 New York Times article. I’m certain the publicity surrounding the recent FTC fines for some of the leading diet supplements has created a great deal of negative buzz among consumers, which has likely impacted their sales and brand value. On the other hand, positive word of mouth magnified by the Internet can be a boon, as Toyota discovered with its hybrid Prius sedan.

No matter what type of product or service you are marketing, nowadays, it’s more important than ever to build brand value through your marketing efforts and to understand how the power of the Internet and its bloggers, online communities, message boards, etc., can affect those efforts.

Peter Koeppel is president of Koeppel Direct Inc., a full service media buying agency based in Dallas. He can be reached at (972) 732-6110, or via e-mail at [email protected].


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