Brand-oriented companies are almost twice as successful as others.

A study carried out by Booz Allen Hamilton showed that the operating profit of 80% of companies with a strong brand focus is almost twice as high as other companies in the same sector (survey of Top 500 European companies, 2005).

90% of those companies surveyed believed that brand orientation is a key factor in their company’s success.

In the banking sector, brand-oriented companies realised a return on equity of 19% compared with just 8% among the other companies.

A winner in the crisis: According to a GfK study, marketing is more efficient in times of crisis.

In times of recession, companies can win – or lose – market shares very rapidly.

Companies often respond incorrectly during a recession, with marketing budgets being slashed when the company’s management and shareholders call for savings to be made.

A study carried out by the GfK (“Gesellschaft für Konsumforschung” or Association for Consumer Research) analyzed the behaviour of 700 brands during the last recession after the internet bubble burst in 2002-2003.

 

The most important results:

  • 54% of companies that recorded growth in sales and market share during the last recession maintained or raised their marketing budgets.
  • Market shares shift faster during times of recession than in times of growth.
  • The losers are often brands in the mid segment as they cannot increase their marketing expenditure and offer favourable prices.
  • 63% of winners in the last recession introduced new products, compared to just 19% of the losers.

The clear winners during the last recession were those companies that did not reduce their marketing budgets but instead invested anti-cyclically. They were able to achieve significantly higher growth than in normal times.