Keys to Successful Branding
Prof. David Dunne, Rotman School of Management, University of Toronto, October 2009
Oct 09 2
Questions/Agenda
• What is a brand?
• Why would people buy brands in a poor country?
• Why would a business invest in building a brand?
• What should you do to make a brand successful in Nepal?
Oct 09 3
Starbucks
Oct 09 44
E
S
P
xperience
ervice
roduct
The Rock and the Pond
Oct 09 5
Third place
Lighting
Seating
Music
Aroma
Atmosphere
Training
Autonomy
Profit share
Recruitment
Buying
Roasting/ blendingNew products
Culture
Oct 09 6
The 360o brand
Company/brand Image
Company/brand Image
SocialConduct
SocialConduct
BusinessConduct
BusinessConduct
SalesForce
SalesForce
CommunicationsCommunications
ProductProduct
EmployeesConduct
EmployeesConduct
ContributionsConduct
ContributionsConduct
DistributionChannels
DistributionChannels ServiceService SupportSupport
PricePrice
Oct 09 7
As you prepare for the FY 08 strategic planning process, I want to share some of my thoughts with you.
Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.
Howard SchulzFebruary 2007 …
Oct 09 8
The romance is fading in the Starbucks customer relationship. First-quarter numbers told a dire tale: a 1-per-cent decline in U.S. comparable store sales and a 3-per-cent decrease in U.S. transactions, causing the dreaded words "negative traffic" to fall from the lips of research analysts. There is the increasing noise in what Mr. Schultz calls the "coffee space," including the announcement from McDonald's that it is entering the barista business with coffee bars. And there is the relentless layering of grim economic news south of the border, causing, simply, the U.S. consumer to spend less.
… and February 2008
Oct 09 9
Marketing Myopia
September 2009 9
Oct 09 10
No Customer, No Business
MakingSelling
Buying
(Counting, employing, planning ...)
COMPANY CUSTOMER
Oct 09 1111
Factory QualityCost
Mass productionMass selling
Profits throughSales volume
Production Concept
StartingPoint
Focus Means Ends
Targetmarket
Customerneeds
Integratedmarketing
Profits throughcustomer satisfaction
Marketing Concept
Lab Cures formajor illnesses
Profits throughscientific reputation
Science ConceptDevelop first, then sell
Some Business Concepts
Oct 09 12
Customer Value and Company Value
12
CompetitorsCustomer segments
Needs
Value Zone
Goals Resources
Tribes
Buying behaviour UsageRelationships Competences
People
Assets
Networks
Leadership
Performance Measures
PositioningPositioningValueValue
Oct 09 13
Questions/Agenda
• What is a brand?
• Why would people buy brands in a poor country?
• Why would you invest in building a brand?
• What should you do to make a brand successful in Nepal?
What is a brand?
Oct 09 15
“Official” definitions …
• A brand is a name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition (Keller).
• Brand equity is a set of assets such as name awareness, loyal customers, perceived quality, and associations (e.g. being “pure” and “it floats” that are linked to the brand (its name and symbol) and add (or subtract) value to the product or service being offered (Aaker, Managing Brand Equity).
Oct 09 16
Unofficially (and more powerfully) …
• A brand is the promise you make to consumers
• Brand equity is your reputation for delivering on that promise
Oct 09 17
• A brand is the relationship between a product and the consumer
• Every point of contact builds and modifies the impression the brand creates … the 360-degree brand
• “Consumers build brands (!) like birds build nests, from scraps and straws they chance upon”
O&M’s Perspective on Branding
Why would people buy brands in a poor country?
Why would you invest in building a brand?
Oct 09 19
Brand Equity:Name, Symbol
Enhances:Interpretation/processing of informationConfidence in the purchase decisionUse satisfaction
Customer Value
Company Value
BrandLoyalty
NameAwareness
PerceivedQuality
BrandAssociations
OtherProprietary BrandAssets
Aaker, Building Strong Brands
The Value of Brands
Enhances:Efficiency/effectiveness of Marketing programsBrand loyaltyPrices/marginsBrand extensionsTrade leverageCompetitive advantage
Oct 09 20
What does it take to make a brand successful?
Oct 09 21
Ten Do’s of Branding
1. Understand your customers’ needs, wants, desires and values
2. Deliver what they really want3. Develop an emotional connection with them4. Provide adequate support5. Price appropriately6. Be consistent7. Integrate marketing communications8. Integrate the company’s efforts behind the brand9. Plan for and manage crises effectively10. Monitor and protect brand equity
Oct 09 22
Four Don’ts
1. Overextend2. Confuse consumers3. Devalue your brand4. Offend, frighten or insult consumers
Oct 09 23
A Model of Marketing
September 2009 23
Desirability Viability Feasibility
Value Creation
Integrated Value Delivery
Contextualization & Communication
PricingPerformance Measurement
Understand
Create
Deliver
Capture
Oct 09 24September 2009 24
Desirability Understanding Customers
Market Segmentation
Buyer Behaviour
25Oct 09
Oct 09 26
How Coke Forgot Itself
Oct 09 27September 2009 27
Viability Understanding Markets
Markets
Competition
Oct 09 28
Market Environment
28
P
E
S
T
S
Political and regulatoryEconomic
Social and demographicTechnological
Societal (sustainability)
Oct 09 29September 2009 29
Turbulence…
• Political/regulatory
• Economic
• Social/Demographic
• Technological
• Societal/Sustainability
Oct 09 30September 2009 30
Feasibility Understanding Resources & Fit
People
Relationships
Assets & liabilities
Core competencies
Oct 09 31September 2009 31
Value Creation Matching Offering to Needs
CompetitorsCustomer segments
Needs
Value Zone
Goals Resources
Tribes
Buying behaviour UsageRelationships Competences
People
Assets
Networks
LeadershipPerformance Measures
Oct 09 32September 2009 32
Providing ValueIntegrated Value Delivery
What you deliver
How you get it to customers
What you charge for it
Oct 09 3333
E
S
P
xperience
ervice
roduct
The Rock and the Pond
Oct 09 34
Managing the Experience
34
Oct 09 35September 2009 35
How Delivers
Oct 09 36
• “Marlboro Friday”: April 2, 1993• Collapse in share prices of all major branded manufacturers: observers questioned the future of brands• The real lesson: value is relative
The Day the Marlboro Man Fell Off His Horse
Oct 09 37September 2009 37
Contextualization & Communication
Demonstrating Relevance
Integrated Marketing Communications
What You Say
How You Say It
Where You Say It
How You Build a Relationship
Oct 09 38
Doing a Lot With Very Little
Oct 09 39September 2009 39
PricingPerformance Measurement Reaping Rewards
How You Make Money
How You Know How You’re Doing
Oct 09 40
Making Money
40
Attitudes Behaviour RelationshipsBrand equity
ROI
Short term accounting
Long term accounting
Net IncomeNet Income
MarginMargin VolumeVolume
Total Market SizeTotal Market Size Market ShareMarket SharePricePrice CostCost X
X
-
Oct 09 41
• In the late 1980’s, Disney conducted a brand audit and tracking study
• Found :– Widespread endorsements with little logic– Characters were seen as overused– Annoyed that children were involved in
purchase decisions– All product endorsements had an effect on
Disney’s brand equity• As a result, Disney established a brand equity
team to ensure a consistent image for Disney across all product endorsements
Monitors Its Brand
Oct 09 42
Integration and the 360o brand
Company/brand Image
Company/brand Image
SocialConduct
SocialConduct
BusinessConduct
BusinessConduct
SalesForce
SalesForce
CommunicationsCommunications
ProductProduct
EmployeesConduct
EmployeesConduct
ContributionsConduct
ContributionsConduct
DistributionChannels
DistributionChannels ServiceService SupportSupport
PricePrice
Oct 09 4343
1984 1995 2006
How Apple Changed and Stayed the Same
Oct 09 44
The 360o brand
Company/brand Image
Company/brand Image
SocialConduct
SocialConduct
BusinessConduct
BusinessConduct
SalesForce
SalesForce
CommunicationsCommunications
ProductProduct
EmployeesConduct
EmployeesConduct
ContributionsConduct
ContributionsConduct
DistributionChannels
DistributionChannels ServiceService SupportSupport
PricePrice
Oct 09 45
Summary: Can You Answer the Following?
• Why do people buy brands?• How do brands create value for producers and
consumers?• What is customer value? How do successful brand
marketers deliver it?• Can you build a brand without investing huge
amounts of money?• How do marketers measure success?
September 2009 45
What should you do to make a brand successful in Nepal?