This document was developed by Corporate Excellence – Centre for Reputation Leadership and among other sources contains references to the book Brand Premium by Nigel Hollis, VP and Chief Global Analyst at Millward Brown. The book was published by Palgrave in 2013.

1. Any brand may be compared to a medal that
has two sides: the tangible side (functional
values managed by the brand’s owners) and
the intangible side (emotional and social values
rooted in the brand’s identity and controlled by
the brand’s stakeholders through its reputation).
Nigel Hollis, VP and Chief Global Analyst at
Millward Brown, believes that the true risk faced
by companies today is a discrepancy between
these two elements.
In his book Brand Premium, the expert argues that
any brand should have four elements in place in
order to avoid this risk and escape the danger of
managing ideas, attitudes and promises without
understanding the true reality, behaviours and
experiences.
Four keys to creating a Premium Brand
The four vectors that according to Hollis enable
a brand to generate value are the following:
1. Purpose: this is the cornerstone that
furnishes a brand with the meaning and
direction. In fact, a brand without a purpose
today is considered a commodity – a brand
that lacks differentiation.
The purpose should differentiate one
brand from another, it should promise an
improvement of life for the persons targeted
by the brand, an improvement related to basic
human needs: self-esteem, pride, safety and
security. Julian Stubbs, a UK-based expert in
brands says the promise represented by any
brand (buy me and your life will improve)
should be fulfilled. Differentiation is not
an end in itself, differentiation should truly
make a company stand out in some way.
2. Meeting expectations: any interaction with
the stakeholders counts and contributes to
their experience. In other words, it reflects
whether a brand fulfils its promise. A brand
Why do consumers pay more for some products than others? Why talented professio-
nals prefer to work for some companies rather than others? What makes investors and
shareholders favour some values rather than others? Why does the society hold some
organizations and leaders in greater esteem than others?
Strategy documents
L15/2014
Brands that make people’s
lives more meaningful achieve
greater differentiation and
better results
Brand
Book reviews
This document was developed by Corporate Excellence – Centre for Reputation Leadership and among other sources contains references to the
book Brand Premium by Nigel Hollis, VP and Chief Global Analyst at Millward Brown. The book was published by Palgrave in 2013.

2. Insights 2
Brands that make
people’s lives more
meaningful achieve
greater differentiation
and better results
stands for everything: the price, the product
or service, the environment, communication
and customer care.
According to Wally Olins, there are brands
that are quickly blamed (stakeholders don’t
miss any fault with them), and brands that are
by default considered innocent (stakeholders
excuse almost all their faults). However, even
in the second case negative experiences –
like in any human relations – may be easily
excused but not forgotten.
3. Resonance: it’s based on the emotional
response, personal characteristics and brands’
ability to identify with their stakeholders.
Strong, powerful and deep ties between
the brand and its stakeholders increase the
brand equity.
However, these ties may not be based solely
on functional (utilitarian) values – they
should also build on emotionally rewarding
experiences. That’s how the brands’ intrinsic
and extrinsic elements combine to create a
durable link with the stakeholder.
4. Differentiation: there are many companies
that spring to mind easily when we talk about
brands (Virgin, Disney, BMW, Apple or
Coca-Cola are just a few examples), showing
the importance of developing a sustainable
competitive advantage and differentiating
oneself from one’s competition.
These brands are never confused with others
by any of their elements (visual, physical,
sensory or communicative). They are the
leaders in their categories, their sectors and
their markets because they are unique and
impossible to copy.
Abrand’ssuccessandsustainabilityinthemedium
and long run is determined not by one or some
of these factors, but by a correct combination of
all four factors: resonance is greater and easier to
achieve when the objective, differentiation and
experience are all in place, thanks to the defining
effect of these three elements. At the same
time, high resonance makes it easier to achieve
differentiation, objective and experience thanks
to its amplifying effect.
Making the most of amplification
The power of amplification unleashed by
the combination of the four factors may turn
a brand into the most valuable brand in its
segment. However, before reaching this stage, a
brand has to take the following six steps:
1. It should be easily found: it should be readily
available when and where consumers want it,
both physically and digitally, quickly, without
any inconvenience. A brand should offer
opportunities, occasions for its consumption,
and create situations where consumers may
easily reach it, making this brand the most
obvious and immediate choice.
“Brands should
try to escape
the danger of
managing ideas,
attitudes and
promises without
understanding
the true reality,
behaviours and
experiences”
Table 01.a: The power score has a positive relationship with volume sales
Table 01.b: The premium score has a positive relationship with price paid
Source: “Brand Premium”, Nigel Hollis
Power Score Volumen Bought
(Indexed to average of 100)
Low
Medium
High (top 25%)
65
100
324
Premium Score Price Paid
(Indexed to average of 100)
Low
Medium
High (top 25%)
93
100
106

3. Insights 3
Brands that make
people’s lives more
meaningful achieve
greater differentiation
and better results
“Brands with
a clear purpose
and high
differentiation are
five times more
likely to capture
a large market
share, four times
more likely to
increase their
market value,
and set a price up
to 13% higher
than that of their
competitors”
6. Be ready to stand out: when a brand is
strongly present in its stakeholders’ minds,
it’s more likely to stand out, to be prominent,
relevant and important. There is a direct
relationship between the ability to stand out,
the ability to cultivate loyalty and the ability
to increase returns on investments.
Why build Premium Brands
Millward Brown’s studies show that those
brands that have a purpose, are able to stand out
and differentiate themselves are five times more
likely to capture a large market share than their
competitors, four times more likely to increase
their market value in future and set a price up
to 13% higher than that of their competitors.
Therefore, there is a proven positive correlation
between meaningful brands and sales volume as
well as the price that consumers are disposed to
pay.
A comparison of Millward Brown’s BrandZ
study with Standard & Poor’s 500 index, shows
that those brands that follow the described
model achieve 28% higher market value than
other companies. After the economic recession
between 2007 and 2009 these brands increased
their capitalization more than others.
2. Be credible: through on-going innovation
of business models, products and services.
Positive associations with other commercial,
business, personal or geographical brands
which have the same goal and objectives may
help to achieve it.
3. Be able to enjoy life: embracing the present
and looking forward to the future helps
brands to become popular, to be “in”, to be
modern and successful. The best brands are
not the ones that talk about themselves, but
those that encourage others to talk about
them. Aesthetic appeal and good taste, as
well as a combination of sophistication with
simplicity is what makes a brand attractive.
4. Be accessible: not only in terms of price
or quality, but also in terms of a good
relationship between the two variables. It is
not a matter of being cheap or expensive, it
is a matter of offering an opportunity of a
smart purchase, maintaining an adequate
margin and raising brand equity.
5. Be transferrable: a high brand equity makes
it possible to transfer this value to other
categories of products, business sectors or
markets. New instances of consumption as
wellasneweconomicspacesareopportunities
brands have to adapt to, always maintaining
differentiation in the brand’s original market
and segment.
Graphic 01: BrandZTM Strong Brands Portfolio vs. S&P 500 (April 2006- Dec. 2012)
Source: Bloomberg, MB Optimor analysis
60%
-60%
Apr06 Aug06 Dec06
BrandZTM
Portfolio
37,5%
0.4%
S&P 500
Apr07 Aug07 Dec07 Apr08 Aug08 Dec08 Apr09 Aug09 Dec09 Apr10 Aug10 Dec10 Apr11 Apr12Aug11 Dec11
40%
-40%
20%
-20%
0

4. Insights 4
Brands that make
people’s lives more
meaningful achieve
greater differentiation
and better results
Conclusion: brands that create value
All this shows that premium brands, apart from
deeper meaning and higher differentiation,
are able to set higher prices in the markets
and achieve greater values on stock exchanges.
If a brand is committed to its purpose and
promise, examines the experiences that it offers
and makes sure that the experience matches
the promise, it may be certain that it stays in
stakeholders’ minds, further strengthening its
differentiation and economic success.
The balance between tangible and intangible
elements of a brand is an essential aspect that
has to be borne in mind in order to succeed.
The idea is to cultivate loyalty of different
stakeholder groups through an emotional
and social connection, and its alignment with
functional elements. When so many low cost
products and services are available, a company
should convince consumers that it’s worth to
pay more for its product. The main challenge is
to maintain the image of being different, which
should be supported by such characteristics as
superiority, value and credibility, which after all
define a premium brand.

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