leader brands analysis

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London, 21st December 2010

AN ANALYSIS OF LEADER BRANDS

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Are We a Leader or a Challenger?

• Xxxxx is a leader brand in 25 markets and a challenger brand in 9 markets

• Expressed as a percentage, 74% of markets are leader, with only 26% being challengers

ChallengerLeader

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Leader Markets

• Confirmed markets where we are a leader brand:

Australia Hungary RussiaBelgium Ireland SlovakiaChina Israel SloveniaCroatia Italy South AfricaCzech Republic Latvia SpainDenmark Lithuania TurkeyEstonia Mexico UKFinland PolandGreece Portugal

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Challenger Markets

Brazil to SunFrance to SunCyprus TBCGermany SomatJapan Kao (P&G brand)Netherlands to SunNorway TBCSweden TBCUS Cascade

• Confirmed markets where we are a challenger brand:

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Overview

• Brand leader – the most widely sold and recognised product in a particular market segment. Also called market leader, a brand leader usually also commands the largest profit margins.

• But is it easier to be a challenger brand? Attack rather than defend?

• Brand leaders can learn from the tactics used by successful challengers, in order to curb their inroads into the dominance of the leader

• In mature categories especially, it is the brand leader that often comes up hardest against the challenge of maintaining growth

• What follows are a number of examples of brand leader success where there are strategies that are worth noting

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Behaving like a leader

• Sometimes the constant attrition of a challenger brand, chipping away at the dominant share of the leader, can incite knee-jerk response that undermines the very strength they seek to defend

• Leaders can start to behave defensively; sometimes attacking challengers explicitly

• This has two unwanted effects:

1) It shows fear - thereby encouraging the belief that other brands have something to offer

2) Which marks the abandonment of the confident ownership of the key category benefit that built leadership in the first place

• The following examples highlight the problems faced by different leader brands in different sectors, and how they responded to the challenge

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Loss of Category Leadership

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Loss of Category Leadership

• Sometimes it takes the loss of category leadership to jolt the brand out of this, as Ariel found in Germany and Austria

• The brand's relentless 'problem/solution' approach to category benefits (increasingly involving competitive comparisons) had allowed more emotionally-engaging competitors to steal leadership

• The solution was to learn from the challengers by adopting a more engaging, light-hearted approach to the communication of product performance that created a distinctive identity for the brand

• Ownership of the key category benefit was restored, and dramatic share gains and a return to leadership followed

• In the first 6 months, Ariel Colour & Style grew volume share by +77% in Germany and +20% in Austria, far exceeding its +15 % objective

• In Germany, Ariel Colour & Style resumes branded colour-market leadership and all-time high volume shares of 6.2% within 6 months after re-vitalisation

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Category Developments Undermine Leader

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• Telstra BigPond experienced a familiar leadership threat: category developments undermine the authority of the leader and open it up to competition

• Exploiting the brand's lack of broadband authority – a vulnerability of its telephony heritage – challengers rapidly eroded Telstra's leadership position in the Australian telecommunications category

• The brand wisely judged that it would be a mistake to adopt a conventional leader approach of focusing on the rational benefits of speed and price and chose, an emotional approach instead


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• A new emotional category high ground resulted, built upon the desire of all parents to give their kids the best possible start in school and in life

• Humorously, the campaign observed the risk of misinformed kids making fools of themselves (and by extension of their parents) http://www.youtube.com/watch?v=KEDIligjXQs

• Growth was restored and the key challenger sent into decline. Even more valuable, the campaign unlocked revenue for the brand, generating higher average revenue per user than competitors

• Not only did BigPond arrest its share decline (pre-campaign, it had dropped from 42.1% to 39.7%) but it increased it from 39.7% to 43.8%, whilst key competitor Optus suffered significant losses, decreasing from 23.6% to 20.1%.


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When the Highest Order Benefit is Worn Out

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• Hahn Premium Light beer found its leading position in the Australian market under multiple attack, with share on the decline

• It faced a classic brand leader conundrum: to continue to restate the highest-order benefit of 'taste‘, on which the brand had been built, or move on?

• Happily, they realised that the light beer category was ready to move on, that there was an opportunity to make 'responsible drinking' less dull and un-masculine

• A campaign celebrating the confidence of drinkers and their ability to behave irresponsibly restored the brand to rude health

http://www.youtube.com/watch?v=0TCgRqKbTIM

• But not only that – a more valuable advantage of emotional campaigns resulted: the ability to reduce price sensitivity. Hahn Premium Light prices were raised at a time when competitors were aggressively cutting theirs

• Hahn Premium Light not only halted its decline, but increased volume share from 34% to 38%

When the Highest-Order Benefit is Worn Out

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Surviving the Financial Storm

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• In early 2008 Barclays claimed the highest share of all high street banks

• Before the crisis, Barclays’ consistent success was accredited to their in-branch sales effort. Advertising served a secondary role of supporting this drive.

• Trust in banks virtually imploded and dramatic falls in savings and customers liquidating their assets threatened to bring the company down

• As banks were held accountable for the financial crisis; consumers quickly began to regard them as faceless, greedy institutions with little interest in their personal wellbeing

• Barclays had to rethink their entire communications model to simply survive.

• Key objective: to rebuild trust with customers by helping them to regain control of their finance

• “Take one small step” TV campaign was devised to fulfil this aim


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• Informative but fresh, witty and upbeat executions carved out a distinctive tone of voice that met the consumer’s real desire for some positivity

• Communications delivered a substantial ROI of £6.78 (for every £1)

• Barclays emerged with a stronger, more engaging brand than it went in with

• Testament to this progression, is their (more recent) ‘waterslide’ and ‘rollercoaster’ TV ads


< Where’s the money

< Savings piggybank

< Coin spin

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Tackling Over-familiarity / Embracing the Unfamiliar

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• Walkers has led the crisps and potato snacks category for 50 years and been running with the nations most recognisable advertising campaign for 16 years

• From 2002, year on year, sales declined: flavour news just wasn’t selling the way it used to

• Consumers had begun to find Walkers a bit predictable; becoming less and less excited about the things they were doing with flavours

• The brand had entered a space that all big, established brands dread... being seen as overly-familiar married partner (as apposed to the exciting new lover)

• As they were still best known for inventing and delivering great flavours, the strategy became to talk about flavour in a less familiar, more involving way than ever before

• Launched a fully integrated campaign entitled ‘Do us a Flavour’

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• Idea: to invite the British public to submit a flavour idea and/or vote for their favourite (online)

• 6 flavours would be created and distributed, then the public would again vote for the best flavour

• Campaign utilised several media platforms to keep the campaign in the public consciousness, with TV acting as the main portal to the wider range of activity

• The take-out from each channel was designed to be ‘what should I do now?’, rather than ‘what are you telling me?’

360 programme

Campaign process

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• Involving consumers and inviting participation and ownership - instead of announcing messages at them - gives an established brand new relevance and connection

• Walkers didn’t reinvent their brand; the campaign still used Gary Lineker as brand ambassador, still focused on flavour, still used TV as the campaign’s fulcrum

• Simply re-defined the role of TV and usual campaign structure / use of media

Do us a flavour 60s

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From Familiarity and Persuasion to Fame and Love

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• More than a century old, Cadbury's remains Britain's number one chocolate (it is nearly double the size of its nearest competitor, Galaxy)

• Cadbury's dairy milk accounts for nearly half of Cadbury UK's chocolate revenue sales

• Experience an unprecedented flat-lining in sales

• Believed to be caused by several factors

• Most notably; loosing relevance among younger generations and ‘persuasive’ advertising model growing tired

• Brand quickly becoming public furniture

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• Strategy focused entirely on appealing to over-45s, who comprise 54% of UK confectionary sales

• Established ‘persuasion model’: good at building familiarity, introducing new products and having an ongoing conversation with the brand's core consumers

• Ineffective for appealing to a universal audience, giving the brand fame and creating genuine love, affection and loyalty for the brand

• Consistently scored much lower-than-average salience and involvement scores

1. show the chocolate ‘snap’ moment (reveal what's inside the chocolate)

2. show an eating moment (how enjoyable the chocolate is to eat)

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• Objectives: to deliver greater brand love and involvement, keep core consumer target engaged while re-engaging younger audiences and to build the brand’s profile

• Strategy: create joyful content (relatable to Cadburys Milk Chocolate)

• Glass and a Half Full Productions campaign. We all know the ads: Gorilla, Eyebrows, Trucks, Zingolo (Fairtrade)

• Did the strategy deliver on these demanding business objectives…?^Gorilla ^Eyebrows ^Zingolo

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• Below chart compares actual sales and an econometric forecast of sales if Cadburys had continued past September 2007 with the ‘traditional’ advertising-led approach (rather than switching to Glass and a Half Full Productions).

• Shows that the previous approach to advertising does not return the brand to growth in the way that Glass and a Half Full Productions has.

GHFP = glass and a half full productions

CDM = cadburys dairy milk

£10m difference in annual value salesBetween models

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• The overall return on investment per £1 spent

• Safe to say Glass and a Half Full Productions has proven to be far more effective in delivering Cadbury’s business objectives and reinstating Cadbury’s Dairy Milk as marker leader…

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Observations

• As a market leader, a brand will come under attack on specific issues from challenger brands

• The easy response is often to start comparing yourself to the competitors

• However, the consumer viewed the brand as a clear leader, but now is unsure as it seems to be competing with smaller brands

• The leader brand must remember why it is leader, and not lose sight of this in their communications

• A leader brand has nothing to prove, so can set about establishing an emotional attachment to consumers

• As a challenger, this tactic is not available. Firstly, you must establish your product and its effectiveness

• The leader brand can grow the market, and is obviously enjoys the majority of the benefits

• Some of the greatest advertising produced has been for leader brands looking to establish an emotional relationship with consumers

leader brands analysis

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