Comment: Bank Brokerages Can Build on Parent's Positive Brand

As financial services become more consumer-driven, banks and other providers are recognizing the importance of building and reinforcing their brand names to ensure the long-term success of their organizations.

Providers of investment products through banks should be aware of the importance of their parent's brand and how a strong brand can be an invaluable asset in protecting them from competitors in the bank and competing securities distribution channels.

People often think of a brand as the name or symbol that helps identify a company's goods and services and that differentiates its products from those offered by competitors. However, the brand also represents intangible associations and an emotional link between the client and the product or service.

Consumers' associations with a bank's brand, which may be positive, negative, or neutral, have an important impact on a firm's success marketing both banking and investment services.

Banks can gauge the value of these associations by measuring their "brand equity"-a set of assets and liabilities linked to a brand name, trademark, and symbols that either add to or subtract from the value of services provided. Some bank executives may not be aware of how to measure brand equity and are therefore unable to discern the impact of brand- building programs. As a result, they are hesitant to invest in these efforts.

David Aaker, a marketing professor at the University of California at Berkeley, has identified the following categories as the assets and liabilities which make up brand equity: brand associates, brand awareness, brand loyalty, and perceived quality. An analysis of each is vital in helping banks best position their investment services units.

An important aspect of a brand name's value is tied to a set of intangible associations-in other words, its meaning to prospects and clients.

Associates can create a positive feeling linked to the brand name. For example, Merrill Lynch & Co.'s 60-year head start in offering investment services, its nationwide presence, and its ubiquitous bull logo help associate the firm with the expertise needed to invest successfully. The brand associations of other, more traditional investment firms include American Express Financial Advisors with financial planning, Quick & Reilly with value, and E-Trade with electronic trading.

The fact that most bank brokerage firms can only claim approximately 5% of their parent's customer base as clients indicates a substantial effort is required to convince consumers to associate bank brands such as Chase Manhattan Corp. and First Chicago NBD Corp. with investing in addition to savings, checking, and loans.

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