Brand in the Value Creation Equation
Is Brand a subset of Marketing?
Is Brand a subset of Marketing?
Or is Marketing a subset of Brand?
Let’s hold that thought and first discuss Value Creation.
And I’ll focus on only 3 areas.
Your Owners
Your Employees
Your Customers
These are the only stakeholders a company needs to focus on when it comes to value creation. In fact, I would argue that it is every company’s core purpose to do so.
Your Owners
The Friedman doctrine, also known as shareholder theory, was introduced by economist, Milton Friedman. In his 1970 essay to the New York Times, he argued that a company has no social responsibility to the public or society and that its sole responsibility is to increase its profits for the benefit of its shareholders.
Over a decade later, R. Edward Freeman, the father of stakeholder theory, in his 1984 book Strategic Management: A Stakeholder Approach argued that companies should consider and create value for all stakeholders, including customers, employees, suppliers, and the community, not just shareholders.
I appreciate the intent of imbuing business ethics, social responsibility, beliefs and values into organizational management, but I do not consider it relevant.
Value creation matters.
But who should companies focus on when creating value?
"Everyone" is a cop-out answer.
I propose that the core purpose of any company is to create value for the owners, its employees, and its customers. Other stakeholders are secondary.
And if I had to prioritize 1 among the triune, it would be Owners.
Your Employees
Richard Branson, the founder of the Virgin Group, once famously said: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
One way that companies can ‘take care of’ or create value for employees is by facilitating their career growth. Peter Senge, Senior Lecturer at MIT's Sloan School of Management, popularized the concept of a ‘Learning Organization’ in his book The Fifth Discipline (1990). He proposed that learning is the only sustainable advantage.
Peter Senge's Disciplines of a Learning Organization: Systems Thinking, Mental Models, Shared Vision, Personal Mastery, & Team Learning.
So much learning, so little time.
Without ensuring value is created for employees, your brand’s value delivery chain to your customers will be broken.
Any value being created for owners or customers will eventually break down if the lifeline of the brand and the company, YOUR PEOPLE, is neglected.
Your Customers
Peter Drucker, father of modern management, argues that while profitability is the crucial oxygen that keeps any business alive, profit maximization is a dangerous myth – not just bad for society, but self-destructive to the company. Brands cannot be pigeonholed into chasing pure profits for shareholders and owners alone.
The purpose of business is to create and keep a customer - Peter Drucker.
And once again, the way to keep a customer, is to continuously create value for them.
To expand on creating value for customers, we take a look at Philip Kotler’s insight into the state of marketing today. While Kotler is dubbed as the ‘Father of Modern Marketing’, he concedes that “If I stop following the latest developments and ideas, my marketing knowledge will quickly lose value.”
In fact, while many traditional marketers still hold on to the sacred 4Ps, Kotler has long moved on.
NOTE: It was Professor Jerry McCarthy, who published “Basic Marketing” in 1960, that proposed the 4P marketing mix—namely product, price, place, and promotion. Kotler then adopted the 4Ps and helped popularize it.
This is Kotler’s preferred 7-component marketing mix today:
Kotler's updated marketing mix: Product, Service, Brand, Price, Incentives, Communication, Distribution.
Even Kotler has moved on from the 4Ps
Promotion is now updated as ‘Communication’ while the original ‘Price Promotion’ component from the Promotional Mix has moved to sit under ‘Incentives’.
Place is now updated as ‘Distribution’.
Product and Price remain.
Service, Brand, and Incentives now sit within Kotler’s updated marketing mix model which is focused on value creation.
Your Brand
Kotler neatly places Brand as a part of the marketing mix.
Yes, brand does create value for the customer.
I’ll never deny that.
But I’d like to emphasize here that Brand creates value for both your shareholders and your employees as well.
Brand value is considered an intangible in accounting. However, the International Organization for Standardization (ISO), a worldwide federation of national standard setting bodies, set up a task force to draft an International Standard (IS) on monetary brand valuation in 2007.
3 years later, they released the IS 10668 which gives brand valuation analysis the institutional credibility which it previously lacked. The sometimes-fuzzy concept of brand equity which was championed by the likes of Aaker and Keller is now able to be quantified albeit typically from an income approach rather than one that focuses on the customer.
Internally, your brand drives employee engagement, a sense of purpose, creates an esprit de corp and builds culture. Experience working with reputable brands becomes a badge of honour as evident with all the Ex-Big Brand mentions on LinkedIn headlines (to which I am personally guilty of as well).
TL;DR
Brand creates value for
Your Owners,
Your Employees, and
Your Customers
Marketing ideally, should be focused on creating value for Your Customers
Brand is NOT a subset of Marketing
Marketing is NOT a subset of Brand
P/S. ~500 Marketing leaders in Europe were surveyed by McKinsey recently and Brand is at the top of the agenda for 2026.
How will you be investing in Brand Building in 2026?
Some references if you'd like to dig deeper:
Brand Valuation: https://brandfinance.com/wp-content/uploads/1/global_500_iso10668_310310.pdf
Kotler on the updated Marketing Mix: https://www.ama.org/2024/03/12/a-lifetime-in-marketing-lessons-learned-and-the-way-ahead-by-philip-kotler/