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Slide 2 Keys to Successful Branding Prof. David Dunne, Rotman School of Management, University of Toronto, October 2009 Slide 3 Oct 091 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? Slide 4 Oct 092 Starbucks Slide 5 Oct 093 3 E S P xperience ervice roduct The Rock and the Pond Slide 6 Oct 094 Third place Lighting Seating Music Aroma Atmosphere Training Autonomy Profit share Recruitment Buying Roasting/ blending New products Culture Slide 7 Oct 095 The 360 o brand Company/ brand Image Company/ brand Image Social Conduct Social Conduct Business Conduct Business Conduct Sales Force Sales Force Communications Product Employees Conduct Employees Conduct Contributions Conduct Contributions Conduct Distribution Channels Distribution Channels Service Support Price Slide 8 Oct 096 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 Schulz February 2007 Slide 9 Oct 097 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 Slide 10 Oct 098 Marketing Myopia September 20098 Slide 11 Oct 099 No Customer, No Business Making Selling Buying (Counting, employing, planning...) COMPANY CUSTOMER Slide 12 Oct 0910 FactoryQuality Cost Mass production Mass selling Profits through Sales volume Production Concept Starting Point Focus MeansEnds Target market Customer needs Integrated marketing Profits through customer satisfaction Marketing Concept Lab Cures for major illnesses Profits through scientific reputation Science Concept Develop first, then sell Some Business Concepts Slide 13 Oct 0911 Customer Value and Company Value 11 Competitors Customer segments Needs Value Zone Goals Resources Tribes Buying behaviour Usage Relationships Competences People Assets Networks Leadership Performance Measures Positioning Value Slide 14 Oct 0912 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? Slide 15 What is a brand? Slide 16 Oct 0914 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). Slide 17 Oct 0915 Unofficially (and more powerfully) A brand is the promise you make to consumers Brand equity is your reputation for delivering on that promise Slide 18 Oct 0916 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&Ms Perspective on Branding Slide 19 Why would people buy brands in a poor country? Why would you invest in building a brand? Slide 20 Oct 0918 Brand Equity: Name, Symbol Enhances: Interpretation/processing of information Confidence in the purchase decision Use satisfaction Customer Value Company Value Brand Loyalty Name Awareness Perceived Quality Brand Associations Other Proprietary Brand Assets Aaker, Building Strong Brands The Value of Brands Enhances: Efficiency/effectiveness of Marketing programs Brand loyalty Prices/margins Brand extensions Trade leverage Competitive advantage Slide 21 Oct 0919 What does it take to make a brand successful? Slide 22 Oct 0920 Ten Dos of Branding 1.Understand your customers needs, wants, desires and values 2.Deliver what they really want 3.Develop an emotional connection with them 4.Provide adequate support 5.Price appropriately 6.Be consistent 7.Integrate marketing communications 8.Integrate the companys efforts behind the brand 9.Plan for and manage crises effectively 10.Monitor and protect brand equity Slide 23 Oct 0921 Four Donts 1.Overextend 2.Confuse consumers 3.Devalue your brand 4.Offend, frighten or insult consumers Slide 24 Oct 0922 A Model of Marketing September 200922 DesirabilityViability Feasibility Value Creation Integrated Value Delivery Contextualization & Communication Pricing Performance Measurement Understand Create Deliver Capture Slide 25 Oct 0923September 200923 Desirability Understanding Customers Market Segmentation Buyer Behaviour Slide 26 Oct 0924 Slide 27 Oct 0925 How Coke Forgot Itself Slide 28 Oct 0926September 200926 Viability Understanding Markets Markets Competition Slide 29 Oct 0927 Market Environment 27 P E S T S Political and regulatory Economic Social and demographic Technological Societal (sustainability) Slide 30 Oct 0928September 200928 Turbulence Political/regulatory Economic Social/Demographic Technological Societal/Sustainability Slide 31 Oct 0929September 200929 Feasibility Understanding Resources & Fit People Relationships Assets & liabilities Core competencies Slide 32 Oct 0930September 200930 Value Creation Matching Offering to Needs Competitors Customer segments Needs Value Zone Goals Resources Tribes Buying behaviour Usage Relationships Competences People Assets Networks Leadership Performance Measures Slide 33 Oct 0931September 200931 Providing Value Integrated Value Delivery What you deliver How you get it to customers What you charge for it Slide 34 Oct 0932 E S P xperience ervice roduct The Rock and the Pond Slide 35 Oct 0933 Managing the Experience 33 Slide 36 Oct 0934September 200934 How Delivers Slide 37 Oct 0935 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 Slide 38 Oct 0936September 200936 Contextualization & Communication Demonstrating Relevance Integrated Marketing Communications What You Say How You Say It Where You Say It How You Build a Relationship Slide 39 Oct 0937 Doing a Lot With Very Little Slide 40 Oct 0938September 200938 Pricing Performance Measurement Reaping Rewards How You Make Money How You Know How Youre Doing Slide 41 Oct 0939 Making Money 39 AttitudesBehaviourRelationships Brand equity ROI Short term accounting Long term accounting Net Income Margin Volume Total Market Size Market Share Price Cost X X - Slide 42 Oct 0940 In the late 1980s, 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 Disneys 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 Slide 43 Oct 0941 Integration and the 360 o brand Company/ brand Image Company/ brand Image Social Conduct Social Conduct Business Conduct Business Conduct Sales Force Sales Force Communications Product Employees Conduct Employees Conduct Contributions Conduct Contributions Conduct Distribution Channels Distribution Channels Service Support Price Slide 44 Oct 0942 19841995 2006 How Apple Changed and Stayed the Same Slide 45 Oct 0943 The 360 o brand Company/ brand Image Company/ brand Image Social Conduct Social Conduct Business Conduct Business Conduct Sales Force Sales Force Communications Product Employees Conduct Employees Conduct Contributions Conduct Contributions Conduct Distribution Channels Distribution Channels Service Support Price Slide 46 Oct 0944 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 200944 Slide 47 What should you do to make a brand successful in Nepal?