Social Brand Value
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SOCIAL BRAND VALUE
brand value through social interaction -
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- 2. This craving for The pursuit of community is one of the most basic desires of
community is the
mankind. Eversince people have craved for the security and
orientation of communities. However in the 19th and 20th
chief misery
century, industrialization led to an anonymization of our daily
living- and working-environment. Similarly, as traditional
communities were on the decline, brands took an ever more
of every man important role in the pursuit of personal identity-construc-
tion projects of consumers.
Recently, mainly due to the rapid diffusion of digital techno-
individually and all logies, a re-emergence of the community can be observed
in the context of consumption practices. These communities
are, contrary to their ancient counterparts, based on shared
humanity from the passions and interests of consumers. Never has it been so
easy to identify like-minded people and exchange thoughts
beginning of time. and ideas about shared interests than it is nowadays.
fyodor M. Dostoyevsky, 1881
- 3. Community-
Orientation of
Successful marketing leads to unique customer benefits.
Given the altered behavioural patterns of consumers, mar-
keting needs a fresh perspective that takes into account the
dynamic development regarding communities. Marketing
thinking and practice used to be dominated by product spe-
cifications, advertising messages and one-sided top-down
Marketing
communication. Today a brand cannot create true added
value without taking social structures into account. The value
of a brand seems to be less and less based on product charac- community
teristics, but rather on the benefits a brand provides in daily focus
usage situations and its relation to others. The Harley David- service
son Owners Group (HOG) with over one million members is
customer focus
only one example of how a brand creates value beyond the
product.
focus
selling
focus
product
production focus
2000
Marketing orientation focus
1990
is changing towards the
1980
consumer. In the future,
community will play 1960
an important role in
1950
determining a brand’s
1960
success.
- 4. Changing Benefits
of a Brand Although the success of a brand has always been based on
social acceptance and social exchange within communities,
it has never been easier to facilitate this dialogue among
consumers than in the digital world of today. Consider micro-
blogging sites, social networks or business communities.
what all these platforms and tools have in common is, that
they all focus on the individual consumer and his or her con-
nections. This development is not limited to the digital world.
Also in the offline world, consumer communities seem to
Benefits of a Company Community How the community influences
brand impact impact the benefit re-emerge. In the case of Tupperware consumer communities
Orientation/in- product ratings and user expe- are even an crucial aspect of the brand´s business model.
formation rience reports reduce one’s own The traditional benefits of a brand, however, are not lapsing.
search costs
what has changed though, is that brands are not under
Trust Trust in like-minded people is total control of companies anymore. Trust in other commu-
much higher as trust in compa- nity members for instance is already higher than the trust in
nies and brands brands among consumer. Also the information and orienta-
prestige The prestige benefit of a brand
tion benefits of a brand are increasingly created by the com-
is negotiated within the user munity and its members. “The brand in the user’s hand” thus
community is not a temporary hype but rather an increasingly important
Identity The rapid access to information
aspect of successful brand management. Just as differenti-
and experiences of other uses, ation on the basis of product specifications becomes incre-
affect the personal identifica- asingly difficult, facilitating and managing communication
tion with brands effectively
among customer groups becomes increasingly important.
The consumer as a trustful believer of advertising messages is
dying out.
- 5. The Social Brand Value occurs at the interface between the
Social Brand Value
consumer and the brand. The Social Brand Value is the value,
which is based on the interactions between users of a certain
brand. Today successful brand management is impossible wi-
thout an understanding of the role a brand plays in the social
context of the consumer. Thus the Social Brand Value is an
important and valuable performance indicator for optimizing
customer-based brand equity.
g
mon y.
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ctio y.
an d Va ed valu
e,
cia
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al Br rceiv m so of the c
Soci s : the
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ults ontrol
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- 6. Relevance of a Social
Brand Value ranking Monetary brand valuation approaches focus primarily on the
underlying financial performance indicators of a company or
brand. Even though community brands such as facebook et
al yield an enormous brand value from a consumer`s perspec-
r- tive they fail to be recognized in this perspective due to their
pu nde i- low financial returns. A Social Brand Value Ranking allows to
dee mmun
s, a assess brands from a psychographic perspective in their soci-
nst ruct ithin co e brand al context and stresses the value of a brand that lies beyond
r s
ci al co nds is w he futu succes
so t the purchase decision – in the daily life of consumers.
s as g of bra nt and
nd nin
bra me
ta nds ial mea anage This study verifies the significant impact of the Social Brand
ders he soc rand m r in
pea se
e un of t b t ap
Value on customer loyalty (apart from well-known factors
If on ding for t
he e
o no ause th l fi- such as product quality and brand image): On average about
n
sta ntrall y ds d c a 15% of customer loyalty are driven by social interaction in
s ce it y bran ures, be classic etc.)
tie mun proced ide fromcebook
communities. Brand image building is not sufficient to drive
om t s usage and preference of a brand anymore. To successfully
ng C essmen other ntly (fa
ro ss
s st the cie manage a brand today, also means to understand the conver-
erou rands a lue on y insuffi
um al b
e
in th f sation between consumers and their communities.
N va nl and
c la ssic e brand e data o f a br anding n
o
th nanc eo t io
valu unders e decis
Approximately a third of brand perception is shaped through
gr asp e
s th he as interaction within those communities. In spite of this signifi-
grasp tends t e purch cant influence, today far less than 10% of brand budgets are
dV alue eby ex he pur allocated to measures that stimulate and steer social interac-
al Bran nd ther “ after t
Soci text a value tion within communities.
The l con rand
a „b
soci
- 7. The structure of
Social Brand Value
• Community members pro-
vide relevant knowledge
rund um around brands,
• Reciprocal • Joint consumption
support experiences create
in solving emotional ties The Social Brand Value study examines both big, commer-
ti-
problems rma between cially successful brands and strong community brands (par-
Info
alue users,
ticularly online). To calculate the Social Brand Value the five
on al V n • Social
liato dimensions informational value, affiliation value, brand evan-
• Communities represent a Affi ue interaction
platform to identify Val between
communi-
gelism, conversational value and identity value were opera-
with brands
ty members tionalized into 28 items in total. These items were surveyed
• Members ial
express and Soc creates feeling through an representative online survey.
tity d
Bran
of security and reas-
live their
I den e e surance
Valu
personality
within the Valu The results: Apple comes out ahead of all examined brands
• Com- in the Social Brand Value study, followed by StudiVZ (biggest
brand
Br and munity
• community
lism members German social network) and Google. Established powerhouse
nge
• Newsand know- eva promo- brands such as Coca-Cola or McDonalds find themselves at
-
erti te their the bottom of the ranking. Although many of the legacyb-
ledge about a
Conv brands and
brand spread alue rands possess a high monetary brand value, the study results
fast and che- n al V convince others
aply among
to use/buy it suggest that they are insufficiently prepared for the new chal-
• Community mem-
• community mem-
bers defend brands lenges of community interaction.
bers, Brands stir con-
from external at-
versations and stay top-of-mind
tacks
- 8. The comparison between the Social Brand Value and the Social Brand
Value: Overall
customer’s willingness to pay a premium price draws even
clearer picture. Among the examined brands, Apple mana-
ges it best to play out its perceived Social Brand Value into a
premium price. This shows that it is not only the product and
the brand image which are responsible for a brand’s success. 33 %
The success of Apple rather stems from the company´s out- 32 %
standing capabilities in handling and nurturing its user com- 31 %
munity - based on an open and cooperative communication
30 %
approach.
29 %
In the case of Coca-Cola the consumers` distinct willingness 28 %
to pay a premium price mainly originates from its establis- 28 %
hed brand image. As our results indicate however, Coca-Cola 27 %
seems to create only little value in daily usage situations of its 27 %
German customers. The brand´s ability to cause social value is 26 %
rather limited today. Brands such as Nokia and Starbucks are 26 %
should aim to ramp up their capabilities and efforts to crea-
24 %
te value the daily life of their customers in order to increase
24 %
their Social Brand Value.
21 %
21 %
Those brands, which are not able to create a high willingness
to pay a premium price, nor offer a high Social Brand Value, 20 %
are the clear underdogs of the study. Due to the increasing 15 %
exchangeability of brands, these brands would be well ad- 15 %
vised to increase their social value, because it is the Social 13 %
Brand Value which more and more is responsible for the
0% 10 % 20 % 30 %
customer’s willingness to pay a premium price.
- 9. Social Brand Value
and price premium Brands with a high social value, which is Brands with a high social value, which
currently not commercialized through an also leads to an increased willingness to
The 5 key insights form the study: increased willingness to pay a premium pay a premium price among customers
price (e.g. due to exchangeability on the (however price premium is not only
1. Besides traditional factors such as product quality and Internet) based on the Social Brand Value).
brand image, a significant part of customer loyalty is exp-
lained by the Social Brand Value (about 15 %) winner
2. In terms of offering true customer value through social in- of the
teraction, Apple, Google and studiVZ outperform all other study
Apple
high
brands in the study studiVZ
Google
3. Apple and Tupperware are two high performing product firefox
Social Brand Value
Tupperware
brands in the Social Brand Value ranking. from the very wikipedia
facebook
Xing
beginning their business model was based on a strong Amazon
Microsoft
user community and social interaction. This pays off! Twitter
4. On the other hand, an online-only business model does MySpace
eBay
not guarantee high levels of social value as the example flickr Starbucks
YouTube demonstrates. The mere distribution of content Nokia
low
to a large and anonymous group of users does not auto-
matically lead to community benefits. Loser
Coca Cola
5. Even though the social value of a brand originates from in- of the McDonalds
YouTube
teractions within the user community, companies do have study
the chance to actively facilitate and manage the creation low high
of Social Brand Value. price premium *
* Readiness to pay more for the respective brand than for an otherwise identical no name product
Brands with a low social value, for which Brands that can rely on a high willingness to
the user is not willing to pay a premium pay a premium price, which is not based on
price. the brand’s social value. To maintain this, the-
se brands are well advised to increase their
social value in the future.
- 10. facts & figures
about the Study
Study Background
The increased networking and social interaction of consu-
mers on the internet has yielded new communities around
brands. The goal of this study is to identify, examine and
asssess the resulting value of this development – both from a
consumer and company perspective. The study thereby aims
to identify specific success factors for effective brand ma-
nagement in community contexts
Research Design
• Online survey (representative)
• Total number of respondents (sample size): 1.301
• Number of sampled brands: 19
• Region: Deutschland
• Survey period: September 2009
- 11. Autoren
Hyve AG, München Vivaldi partners, München
Dr. Johann füller ist Vorstand der HYVE AG in Mün- Dr. Markus pfeiffer ist Managing Director der Vivaldi
chen, Research Affiliate am MIT – Massachusetts partners Büros in München und in London.
Institute of Technology in Cambridge und Habilitand In rund zehn Jahren Beratungstätigkeit hat er sich
am Institut für Strategisches Management, Marketing auf die Entwicklung von wachstumsorientierten Mar-
und Tourismus an der Universität Innsbruck. Er hält kenstrategien spezialisiert und betreut klienten im
regelmäßig Vorträge und Vorlesungen zu Open deutschsprachigen Raum und eine Reihe internatio-
Innovation, Online Communities, Innovationsmanage- naler klienten. Er spricht regelmäßig auf internatio-
ment und virtueller kundenintegration in die pro- nalen Marketingkongressen, ist Gastprofessor an der
duktentwicklung. Im Anschluss an seine Dissertation zum Thema “Com- Solvay Business School in Brüssel und hat mehr als 20 Bücher und Artikel
munity Based Innovations“ arbeitete Johann zwei Jahre als Assistant zu verschiedenen Themen des Marketings veröffentlicht. In vielen Jahren
professor an der Universität Innsbruck. Zuvor war er 3 Jahre als Unterneh- Strategie- und Markenberatung hat er über 40 klienten bei komplexen
mensberater bei pricewaterhouseCoopers im Bereich Strategic Change Marketing- und Markenstrategieprojekten betreut. Er verfügt über weit-
tätig. weitere Erfahrungen sammelte Dr. füller bei Mckinsey & Comp., reichendes wissen bei der Entwicklung von kreativen und faktenbasierten
Siemens und Allied Signal. Im Zuge seiner forschung veröffentlichte er Lösungen – der Entwicklung von Markenstrategien, Optimierung von
mehr als 60 Artikel in unterschiedlichen Zeitschriften. Dazu zählen das Markenarchitekturen, Entwicklung von Brand Extensions und Markencont-
Journal of product Innovation Management, das Journal of Business rolling.
Research, das Journal of Travel Research, der Harvard Business Manager Bevor sich Dr. pfeiffer Vivaldi partners anschloss, war er als Marketingbera-
und Technovation. Im Rahmen seiner Tätigkeit als Vorstand der Hyve AG ter für verschiedene deutsche und internationale klienten aus der konsum-
begleitet Johann seit mehr als 8 Jahren namhafte internationale Unter- güter-, Informations-, kommunikations- und Unterhaltungsindustrie (z.B.
nehmen bei der Entwicklung kundenzentrierter Innovationen. philip Morris, Burda) tätig. Als Geschäftsführer eines deutschen Beratungs-
unternehmens war er für den Ausbau des Neugeschäfts und die Betreuung
kontakt: johann.fueller@hyve.de oder
der Hauptklienten verantwortlich.
jfueller@mit.edu
kontakt: mpfeiffer@vivaldipartners.com
- 12. Autoren Vivaldi partners, München
Tobias Honer ist als Senior Consultant im Münchner
Büro von Vivaldi partners tätig. Er arbeitet schwerpunkt-
mäßig für nationale und internationale kunden im
Dienstleistungs-, Technologie- und fMCG-Sektor. Seine
Expertise bringt er inbesondere bei Entwicklung von
Marken- und wachstumsstrategien, sowie bei frage-
stelllungen des Innovations- und portfoliomanage-
ments ein. Zudem beschäftigt er sich intensiv mit der
Entwicklung von Strategien im Online- und Social-Media Bereich. Tobias
Honer verfügt über umfangreiche projekterfahrung in quantitativer und
qualitativer Marktforschung und übernahm vor seiner Tätigkeit bei Vivaldi
Vivaldi partners, München partners diverse Marketingfunktionen u.a. bei Booz & Co., der Lufthansa AG
Dr. Markus Zinnbauer berät als Director im Münchner und dem fraunhofer Institut. Sein Studium der Betriebwirtschaftslehre mit
Büro von Vivaldi partners vor allem klienten aus den Schwerpunkten strategisches Marketing und Distributionspolitik hat er
Dienstleistungs-, Technologie- und fMCG-Unterneh- in pforzheim und Sydney absolviert.
men. Besondere fachliche Expertise bringt er in den
kontakt: thoner@vivaldipartners.com
Bereichen Markenstrategie und -controlling, Budget-
planung und -effizienz, quantitativen Methoden und
Social-Media-Strategien ein. Vor seiner Tätigkeit bei
Leopold-franzens Universität, Innsbruck
Vivaldi partners sammelte er langjährige Erfahrung als Roland Schroll ist Doktoratsstudent und wissenschaftli-
projektmanager einer Münchner Beratung und unterstützte internationa- cher Mitarbeiter am Institut für Strategisches Manage-
le sowie mittelständische Unternehmen bei strategischen Marketingthe- ment, Marketing und Tourismus der Leopold-franzens
men sowie bei finanziellen und organisationalen problemstellungen. Universität Innsbruck. Im Rahmen seines Doktoratsstu-
Markus Zinnbauer hat sein Betriebswirtschaftsstudium an der Ludwig- diums beschäftigt er sich mit Themen wie Brand Com-
Maximilians-Universität München und dem M.I.T., Cambridge, absolviert munities, user-generated brands sowie dem Einfluss
und am Institut für Marktorientierte Unternehmensführung der Ludwig- von Communities auf Marken. Zuvor studierte Roland
Maximilians-Universität promoviert. Er ist regelmäßiger Referent auf Schroll wirtschaftsinformatik sowie Strategisches
konferenzen und Autor in nationalen und internationalen fachzeitschrif- Management mit Spezialisierung auf Strategie und Branding. praktische
ten. Erfahrung sammelte er unter anderem im In- und Ausland bei firmen wie
Siemens, Hilti und Vivladi partners.
kontakt: mzinnbauer@vivaldipartners.com
kontakt: roland.schroll@student.uibk.ac.at
- 13. Impressum
©2009, HYVE AG, Vivaldi partners
Herausgeber
HYVE AG
Schellingstr. 45
80799 München
www.hyve.de
Mail: info@hyve.de
Vivaldi partners
Burgstr. 8
80331 München
www.vivaldipartners.com
Mail: munich@vivaldipartners.com
in kooperation mit MIT und UNIVERSITÄT Innsbruck
Layout & Grafik
Melanie Eckl, HYVE AG