Brand management is a dynamic and a continuous process that needs consistent investment of time and money. The boardroom must ensure that brand management is allocated a specific budget as it is much more than mere marketing communications. Due to the intangible nature of branding, the results may not accrue in a short period of time a it takes time and reinforcement to build customer loyalty.

Many companies increasingly complain that financial markets focus on short-term results and give little credit for long-term value creation strategies. These claims are contradicted by empirical evidence.

A McKinsey study has shown that expectations of future performance are the main driver of shareholder returns. Across industries and stock exchanges, up to 80 percent of a company's market value can be explained only by cash flow expectations beyond the next three years. These expectations are driven by growth judgments and long-term profitability. An examination of stock prices of leading consumer product companies illustrated that future growth accounts for 54% of the stocks' total value.

Another study by McKinsey of Standard & Poors 500 companies from 1984 to 2004 illustrated that the average total returns to shareholders was 9.4 percentage points better among the companies that balanced short- and long-term performance compared to less balanced peers.

The best performers also survived longer in the market, the CEOs of these companies generally remained in office three years longer, and their stock prices were significantly less volatile.

Therefore, corporate management must align short-term and long-term objectives and expected outcomes of branding, and be committed to support it accordingly with well-balanced strategies and time horizons.

A strong brand is defined and characterized by the following 9 dimensions:

1. A brand drives shareholder value
2. The brand is led by the boardroom and managed by brand marketers with an active buy-in from all stakeholders
3. The brand is a fully integrated part of the entire organisation aligned around multiple touch points
4. The brand can be valued in financial terms and must reside on the asset side of the balance sheet
5. The brand can used as collateral for financial loans and can be bought and sold as an asset
6. Customers are willing to pay a substantial and consistent price premium for the brand versus a competing product and service
7. Customers associate themselves strongly with the brand, its attributes, values and personality, and they fully buy into the concept which is often characterized by a very emotional and intangible relationship (higher customer loyalty)
8. Customers are loyal to the brand and would actively seek it and buy it despite several other reasonable and often cheaper options available (higher customer retention rate)
9. A brand is a trademark and marquee (logo, shape, colour etc) which is fiercely and pro-actively protected by the company and its legal advisors

Since founding an entire industry around brewed coffee 15 years ago, Starbucks has enjoyed roaring success - and the success continues. The third quarter results in 2007 showed that the revenues increased 20% to US$2.4 billion and net income increased 9% to US$158.3 million.
But as always, such success attracts competitors. Starbucks has no dearth of competitors. McDonald's, Dunkin' Donuts and Burger King are some of the fiercest of competitors of Starbucks in the United States. So serious are these other players that a 2007 Consumer Reports' head to head comparison of coffee from all these four brands declared McDonald's the winner. McDonald's, a new entrant into the coffee sector beat Starbucks. Such reports beg the question: Is Starbucks under attack?

Competition is the reality of business. Successful companies and their brands have always attracted competition. Well managed companies have always thwarted such competition and have succeeded. But in this case, it is not just competition. An underlying change in Starbucks' main customer base is altering the strategic landscape for the coffee giant.

Affluent women and professionals earning an average US$92,000 a year were the core customer base of Starbucks. These customers bought the Starbucks' idea of coffee with a context rather than just a product. As such, they were not too price sensitive. But over the years, Starbucks' quest for growth both within the United States and also globally has acquired a new set of customers. Compared to the original group, this new generation of customers is less educated, less affluent and more price sensitive. To complicate the matter further, many of the aforementioned competitors have decided to compete on price. Given the combination of factors, Starbucks seems to be under attack.

What can Starbucks do to retain the leadership position? For starters, Starbucks will have to strengthen the brand, its brand equity and its many touch points. In many affluent cities in the US such as New York City and Boston, Starbucks outlets get too crowded and customers just walk out to a competitors' café. That has to be corrected right away. More importantly, Starbucks should focus the attention once again on the brand experience. Starbucks is not just about a cup of coffee, but is about the ambience, a third alternative between home and work. Such a focus on the overall brand experience will divert the customers from a singular focus on price.

Finally, Starbucks should launch new products (new combinations of coffee) to cater to its changing base of customers. These actions should allow Starbucks to continue to have a strong hold on the coffee market, refresh its brand and gain new territory for its brand equity.