Apple is the world’s most valuable brand according to media research company Millward Brown Optimor in its 2011 study of the Most Valuable Global Brands. The study measures the share of company earnings driven by brand identity.
Many attributes contribute to the value of a consumer-facing brand. There are personality type characteristics such as “friendly” and “trustworthy” as well as qualities like “value for money” that are more service oriented.
Not surprisingly, logistics-related attributes such as, say, “efficient network” or “excellent on time delivery” do not tend to feature in consumers’ perceptual maps of brands. In general people are far less concerned about how a product got to the shelf than the fact that it is there waiting to be purchased.
Should freight professionals care? Well, there is no need to lose sleep over the knowledge that your truckload operation commands a lower mindshare among consumers than the latest iPod. However, logistics does make a significant contribution to brand value. End customers need not be aware of this, but corporate functions such as sale and marketing should.
This is the case in leading companies such as Apple. The company can point to attributes such as superb technology, an uncanny grasp for what excites consumers, and slick marketing, as core competencies. But it also places a high premium on supply chain management.
Demand for Apple’s best-selling products often outstrips supply, and the company relies on a complex web of suppliers to get its products to market. Managing this global supply chain well is crucial to the organization’s success. Respect for the function goes all the way up to the C-suite; COO Tim Cook is in charge of supply chain management at the consumer electronics giant.
Brands can take a beating when a supply chain malfunctions. Companies that have endured a high-profile product recall caused by inadequate quality control in the supply chain can attest to the pain inflicted by this kind of failure.
The integrity of the supply chain is critical to perishable products brands. New food safety regulations in the food and beverage industry require companies to comply with tougher standards in areas such as traceability and hygiene practices. The challenges are described in the recent white paper from C. H. Robinson Worldwide titled Emerging Best Practices in Food & Beverage Shipping: Fulfilling the Perfect Order. The paper points out that as companies “eliminate exceptions, they also maximize productivity and profits, protect brand equity, improve their competitiveness, and increase their customers’ satisfaction.”
Consistently failing to deliver product when consumers want to make a purchase is a surefire way to sully a market reputation. Procter & Gamble’s well known moment of truth – the point at which a consumer decides to buy a product – loses relevancy when there is a gap on the store shelf where the desired item should be. Brand attributes such as “availability” and “reliability” are undermined when buyers are disappointed in this way.
But the evidence is not all negative. Some companies are using supply chain to leverage their reputations for environmental stewardship. Rail carrier CSX has an advertising campaign that touts its low fuel consumption when moving goods, for example. More companies will use transportation to enhance their green credentials as innovations such as electric trucks are introduced.
It is possible to quantify the sales losses caused by late or missed deliveries. And the revenue generated when a transportation provider saves the day with an expedited shipment that meets an unexpected spike in demand can be calculated. But research is needed to shed more light on the connection between logistics and brand equity.
Proving such a correlation will not give operations a seat at the marketing strategy table. Nor will future ad campaigns for consumer products wax lyrical about truckload performance metrics.
But raising the profile of logistics and supply chain management as brand equity builders will elevate the reputation of operations across the enterprise. Maybe the next time you implement a transportation management system or pitch a proposal for a new freight management strategy, it will be easier to get buy in from those parts of the organization that currently regard logistics as a fringe activity.
Worlds Most Valuable Brands 2011
Source: Millward Brown Optimor