a refresher on brands branding and business strategy

October 14, 2010copyright [email protected]

A Refresher on Brands, Branding and Business Strategy


A consistent investment in a high-performing brand is an assurance to shareholders of the promise of future cash flows


“Consumers like brands ‘coz they package meaning”.

“They form a kind of shorthand that makes choice easier. They spare the consumer from a feature-by-feature analysis of category alternatives”

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- Alex Biel, former head of Ogilvy centre for R&D

October 14, 2010 copyright [email protected] 4

What great brands share?

A compelling idea BMW – “the ultimate driving machine” Nike – “Authentic Athletic Performance” Disney – “Fun with Family & Friends” FedEx – “When it absolutely, positively needed overnight”

A resolute core purpose and supporting idea Mini from BMW

A central organizational principle “Is this on brand?”


How do we go about building brands?

Point A: How consumers see our brand today?

Point B: How do we want them to see our brand tomorrow as a result of an investment in a marketing program?

Strategy is the route map laying down how we will get from “Point A” to “Point B”


Ten Strategy Checkpoints

1. Be Single-minded Essence of strategy/positioning is sacrifice (e.g. in NY there are

many attractions but focus is on Broadway)

2. Make it fit an overall plan Mac – simple, user-friendly, professional user

3. Keep your objectives reasonable Change brands / change behavior

4. Make your strategy easy to use Brief is typically less than one page

5. Decide where your business will come from Nutrasweet r/ sugar


Ten Strategy Checkpoints

6. Make a meaningful promise to the customers QTips – 50% more cotton tip – best for babies

7. Understand the importance (or unimportance) of your product Badge product / rice

8. Set yourself apart $B spent on five words: new, white, cool, power, relief

9. Relate the unknown to the known Frame of reference

10. Keep your strategy up-to-date “Take the brand out of bedroom slippers into nikes”


“All men can see the tactics whereby I conquer, but none can see the strategy out of which great victory is evolved”

- Sun Tzu

Art of War


The consumer decision making model

The Environment

The ConsumerSegments

CategoryBenefits

CompetitiveChoices

Risk Assessment• Performance Risk• Social Risk• Self Image

Brand Choice Hierarchy• Considered• Neutral• Rejected

Purchase


Risk Assessment in Buying Decision

High Involvement

Low Involvement

Thinking Feeling

• Automobiles• Washing Machine• Music System

Cigarettes

TV

Perfumes

Deodorants


The ‘So-what’? Test for Marketers

The feature we offer include:• • • • •

Which means that

Customers benefit as follows• • • • •

So what?

Benefits are broadly the same as offered by competitive products

Benefits are greater than those delivered by competitive products

Need to re-think existing benefits

These provide the basis for marketing differentiation


Brands and the rising emotional charge

The emotional charge The main issues for the consumer

The role of the brand

The social expression

e.g. Rolex

Will someone love me for loving it?

To facilitate conspicuity

Satisfaction or pleasure in use

e.g. Dulux Paints

Will I love it? To win a premium price

A promise of performance in use

e.g. Duracell

Will it do what I want it to do?

To influence choice

A guarantee of authenticity

e.g. Kellogg’s

Is it the real thing? To make choice easy (even unthinking)


“We are in the business of connecting human needs to commercial needs and making it all seem a lot of fun”

- Anonymous

Likewise, Advertising is about doing things to consumers, not saying things for manufactures.

Advertising is an art of delivering a sales proposition in an attention-getting, involving vehicle and positioning the product uniquely in the consumer’s mind.


Some Positioning Options

Particular Attribute (Clove Oil) Specific User Benefit (Fresh Breath) Specific User (Mac for Graphic Designers) Benefits of Heritage (Tata-Trust) Reference to Competition (Avis) Status in the Category (Google for Search)


Perceptual Mapping

BMW

• Lada

• Ford• Vauxhall

• VW

• Merc• Jaguar

• Porche

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Key questions addressed by analytics

Past Present Future

Information What happened?

(Reporting)

What is happening?

(Alerts)

What will happen?

(Extrapolation)

Insight How & Why

(Modeling, Experiential Design)

What is the next action?

(Recommendations)

What is the worst/best that can happen?

(Prediction, optimization, simulation)


Strategy Statement : Dove Soap

1. Objective: Try / 14 days / Compare

2. Who: 25+, has dry skin

3. Key Consumer Insight or Idea: Dove does not dry your skin as other soaps can

4. Reason to Believe: ¼ moisturizing lotion

5. Tone: always real; always honest


MISSIONOur purpose: What we do, what we are about today

VISIONAn aspirational statement of

What we want to becomeat point of time in the future

OPERATING PRINCIPLESHow we conduct business

at this point in time

BrandEssence / DimensionsValues

Core BeliefsWhat we stand for

BehaviorsHow we interact with external or internal stakeholders

PositioningWhat we want stakeholdersto think about our brand

IdentityNames, logos. Visual stdsVerbal themes

Business ObjectivesWhat we want to establish

at this point in time

Business StrategiesHow can we achieve our current

objectives?

Business Tactics

Marketing Communications

Product / ServiceDevelopment

Operations Finance Technology HumanResources

Product / ServiceDelivery

Brand Organizational Context


Brand Value ChainStrategic Brand Management – Kevin Lane Keller

Value Stages

MarketingProgramInvestment

• Product• Communication• Trade• Employee• Others

ConsumerMindset

• Awareness• Association• Attitude• Attachment• Activity

MarketPerformance

• Price Premium• Price Elasticity• Market Share• Expansion Success• Cost Structure• Profitability

ShareholderValue

• Stock Price• P:E Ratio• Market Capitalization

Multiplier ProgramQuality*

• Clarity• Relevance• Distinctiveness• Consistency

MarketCondition

• Competitor Effort• Channel Support• Customer Size and Profile

Investor Sentiments

• Market Dynamics• Growth• Risk Profile• Brand Contribution


*Ten Rules of Effective Language

Simplicity Brevity Credibility Consistency Novelty

Sound Aspiration Visualization Questions Context


Three Value Drivers…in identifying and implementing business strategy

Operational Excellence IKEA

Product Leadership Microsoft

Customer Intimacy Nordstrom

* The discipline of market leaders - Michael Treacy & Fred Wiersema


The Value Context

1. Getting more for more (Starbucks, Haagen Daz)

2. Getting more for same (Lexus)

3. Getting more for less (Wal-Mart)

4. Getting same for less (Tesco – “Rip off Britain”)

5. Getting less for much less (Easy Jet)

Giving part of the equation does not always have to be money – it could be sacrifice of amenities, an acceptance of risk or ‘manageable’ level of discomfort


Ten Most Significant Potential Competitive Advantages

1. Superior product or service benefit: First Direct, Toyota, Disney, Samsung

2. Perceived Superiority: Marlboro3. Low-cost operations: Wal-Mart4. Global skills, global experience, global coverage: Coca

Cola, McDonald’s5. Legal advantages: Patents etc.6. Superior contacts and relationships: Suppliers,

distributors, customers …7. Scale8. An attitude of competitive toughness: P&G9. Superior competencies: IKEA10. Superior assets


Ten Key Elements of World-class Marketing

1. Profound understanding of the marketplace2. Creative segmentation and market selection3. Powerful differentiation, positioning and branding4. Effective marketing planning process5. Long-term integrated marketing strategies6. Institutionalized creativity and innovation7. Total supply chain management8. Market-driven organizational structures9. Careful recruitment, training and career

management10. Vigorous line management implementation


References

Understanding Brands Peter Cheverton

• The Sunday Times Series Brands and Branding

Articles by Experts• The Economist

A New Brand World Scott Bedbury

• Ex-marketing chief of Nike and Starbucks Analytics at Work

Thomas H Davenport, Jeanne G Harris Words that Work

It is not what you say, it’s what people hear• Dr Frank Luntz

Strategic Brand Management Building, Measuring and Managing Brand Equity

• Kevin Lane Keller Marketing Payback

Robert Shaw & David Merrick

a refresher on brands branding and business strategy

Business

business strategy

point of time

strategy checkpoints

strategy easy

strategy statement

strategy uptodate

brand identity names

time business strategies