Dow Chemical Company has grown its brand equity 34 percent over the past five years, from 12.13 percent of its market capitalization to 16.22 percent, according to a study conducted by CoreBrand, a leading brand consulting firm, which credits the company’s consistent communications program. According to TNS Media advertising the Dow ad budget has grown from $3.6 million in 2001 to over $57.3 million in 2006.
In contrast, the consulting firm says, fellow chemical company FMC Corporation has lost considerable brand equity over the past five years, with its brand equity dropping from 3.73 percent of its market cap to 1.16 percent. FMC has been not committed any significant effort to building its brand, the firm says, spending less than $1 million per year on its corporate brand over the past five years.
“When you think of the chemical industry you don’t often associate it with dynamic and powerful brands,” says James Gregory, CEO of CoreBrand. “Yet, a commodity industry is exactly the kind that can create leverage and differentiation in its brand, which translates into tangible value.”
Other companies with strong brand equity include Sherwin Williams, DuPont, and 3M, while industry laggards include Air Products & Chemicals, A. Schulman, and Lubrizol.
“Business-to-business companies often have difficulty developing brand metrics that senior management understands,” says Gregory. “Measuring ROI can be daunting when it comes to gathering data over time, which might seem to be a challenging task even for the most ardent brand champion. We’re often asked if it is worth the effort for B2B companies, like chemical manufacturers, since they aren’t marketing to consumers.
“However, the connection between corporate branding and financial performance is well established, if not widely understood. “