sustaining your brand in the economic downturn

www.myCNI.com.my www.OOBEY.com

SUSTAINING YOUR BRAND IN THE ECONOMIC DOWNTURNCase Study, Concepts, and Debatable Ideas

Kenny OngCNI Holdings Berhad


http://www.mycni.com.my/

http://www.oobey.com/




Intro: CNI

1. 20 years old2. Core Business: MLM3. Others: Contract Manufacturing, F&B Retail,

Export/Trading, eCommerce, Shared Services4. Malaysia, Singapore, Brunei, Indonesia, India,

China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam

5. Staff force: ± 5006. Distributors: 200,0007. Products: Consumer Goods and Services




Agenda

1. Branding regardless of economic situation

2. Branding in a Downturn




Branding regardless of downturn, upturn or u-turn




Branding today…

13th April 2009

•Two Domino’s employees

•YouTube

•Apology from Domino’s after 48 hours

•1 million hits

•Twitter: questions on silence

•LinkedIn: suggestions by users in forum

BusinessWeek, May 4, 2009




Branding

And what this means to businesses today







The real goal of Marketing and Branding

Understanding our role in the whole scheme of things







What is the purpose of Marketing & Branding?

Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”

Sergio Zyman

“Retention and Loyalty are useless if No Conversion is happening.”








“Retention and Loyalty are useless if No Conversion is happening.”

“Communication is useless if No Conversion is happening.”







What is the Objective?

1.Comm = Relationship (something like Dating)

2.Comm ≠ Media glitz 3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL4.Comm ≠ CSR5.Comm = Get more people, to buy

more, more frequently, at higher prices







Components of Branding

Positioning

Execution

Communication







Summary of Branding

Branding in its simplest form

(and it saves cost too…)






Communicate


Business Model in Branding

The biggest impact







Alignment & Consistency

USP

Market Discipline

Profit Model

•Google

•Air Asia

•Tata Nano





"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy







Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Alignment & Consistency: Market Disciplines











Alignment & Consistency: Market Disciplines




Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Alignment & Consistency: Disciplines, Priorities, and KPIs







The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007












HP well-balanced portfolio, mass customization

Acer super lean cost structure, aggressive pricing

Apple powerful products, premium

pricing, limited range

Still Doing well in 2009




Alignment & Consistency: Business Model

USP

Market Discipline

Profit Model




Branding in a Downturn



Business Strategy vs. Consumer


The Five Branding Ideas in a Downturn

The best solutions are usually not obvious







The Five Branding Ideas in a Downturn

1. Reduce Cost by Reducing Focus

2. Integrate Communications (Consistency)

3. Feed you, Feed me

4. Bad News

5. Targeted Communications







Downturn Idea #1: Reduce Cost by Reducing Focus







Strategy vs. Focus

Upturn Flat Downturn

Fight Complacency

Sharpen Edge

Keep Momentum

Conquer

NPD Cycle Time

Improve Edge

Extensions

Counter Competitor

Innovation

Acquire

Profits

Build momentum

Sales

Cash Flow

Innovation/R&D

Focus ‘Breakthroughs’

JV, In-source, Out-source

Eliminate bottom 20%

Improve Top 15% revenue-generating products

↓ R&D, ↑Sales







Side Notes on Cost Reduction Strategy

Cost Reduction

Business Model

•USP

•Profit Model

•Market Discipline

Operational

•Finance and HR

•Supply Chain

•R&D

•Sales & Marketing

5% - 30%

30% - 80%




Business Situation vs. Sales

Upturn Flat Downturn

Fight Complacency

Sharpen Edge

Keep Momentum

Conquer

‘Change’ mgmt

Reduce Fat

Continuity

Everyone Happy

Innovation

Acquire

Profits

Build momentum

Sales

Cash Flow

Talent Mgmt

Innovation/R&D

Early wins

Slow Down HR Costs


1. Reduce price by reducing non-product prices

2. Optimize customers’ current assets

3. Offset customers’ costs 4. Focus market share 5. CEO and Sr. Mgmt in the field 6. Sell up the buyer chain 7. Motivate troops 8. Add extra services 9. Control troop emotions

Improve Top 15% revenue-generating products

↓ R&D, ↑Sales






Downturn Idea #2: Consistency Integration







Communications Integration and Consistency

Communications

Internal External

Mgmt Customers

Suppliers

Media

Government

Public

Authorities

Associations

Universities

NGOs

Investors

Proactive Reactive Proactive Reactive

COMM Tools COMM Tools


Employees






Alignment & Consistency: Business Model

USP

Market Discipline

Profit Model




Alignment: 4-Wheels Model

Culture

Business

ModelBrand

Strategy

StructurePerson

Leadership

Resources




Alignment & Consistency: The 6 Sins of Greenwashing

1. Sin of the Hidden Trade-Off

2. Sin of No Proof

3. Sin of Vagueness

4. Sin of Irrelevance

5. Sin of Fibbing

6. Sin of Lesser of Two Evils

Study by: TerraChoice, December 2007








1. Sin of the Hidden Trade-Off

“Energy-efficient” electronics that contain hazardous materials. 998 products and 57% of all environmental claims committed this Sin.

2. Sin of No Proof

Shampoos claiming to be “certified organic,” but with no verifiable certification. 454 products and 26% of environmental claims committed this Sin.

3. Sin of Vagueness

Products claiming to be 100% natural when many naturally-occurring substances are hazardous, like arsenic and formaldehydeSeen in 196 products or 11% of environmental claims.





4. Sin of Irrelevance

Products claiming to be CFC-free, even though CFCs were banned 20 years ago. Seen in 78 products and 4% of environmental claims.

5. Sin of Fibbing

Products falsely claiming to be certified by an internationally recognized environmental standard like EcoLogo, Energy Star or Green Seal. Found in 10 products or less than 1% of environmental claims.

6. Sin of Lesser of Two Evils

Organic cigarettes or “environmentally friendly” pesticidesThis occurred in 17 products or 1% of environmental claims.




Downturn Idea #3: Feed you, Feed me







Integrating Internal/External

Internal External

Feed

Feed







Integrating Internal/External

Internal• Halal Committee• Social Education

(e.g. SCK)• Umrah trip• China Trip• RBOS• CFA/HFA• Coffee Van

External• Sponsorship• Donations• News clippings• Newspaper Ads• MHI• Awards• Corporate Profile• AGM• Gov. Celebrity• Analyst research







Downturn Idea #4: Corporate Reputation

Handling Bad News and Good News before it becomes a Cost







PR Challenges

“Good news for stockholders can be bad news for other

stakeholders.” Gregory Miller, Assoc. Prof., Harvard Business School.






Audiences – Good News? Bad News?

• money saved by tough bargaining with a union

• announcing a dividend: to employees

• announcing a dividend: to environmentalists

• setting up Diversified business

Attachment 2 - Building Trust with One Group Can Destroy Trust with Another





News vs. Controllability

Can Control Cannot Control

Internal Attribution

External Attribution


Born StupidDidn’t study hard enough

Lousy Teachers

Sudden high extreme marking stds

E.g. Failed SPM




Good News vs. Controllability





?




Good News vs. Controllability





?

Foreign investor

Segment growth

R&D breakthrough




Bad News vs. Controllability








Bad News vs. Controllability





Oil spill

Product recall

Marketing strategy

Bad debts (NPL)

Pandemic

Economy crisis




Downturn Idea #5: Right Tools at the Right Time with the Right

AudienceThe power of targeted branding

communications





The Right Tools for the Job

Reach of Communication

Qua

lity/

Inte

nsity

of

Com

mun

icat

ion

Personal (exp)

Personal (info)

Impersonal (info)

Individual Mass

Mass Traditional, In-home, Out-Of-Home

Mass Unconventional

Mass Online


Refer Attachment 3






Qua

lity/

Inte

nsity

of

Com

mun

icat

ion

Personal (exp)

Personal (info)

Impersonal (info)

Individual Mass

Mass Targeted Conventional

Mass Targeted Online

E.g. Annual Reports, Analyst Briefings, IR Roadshows, IR Website


Refer Attachment 3






Qua

lity/

Inte

nsity

of

Com

mun

icat

ion

Personal (exp)

Personal (info)

Impersonal (info)

Individual Mass

Individual Targeted Conventional

Individual Targeted Online


Contests

One-on-One

Refer Attachment 3




Downturn: Customer Types vs. Branding

Hand brake

Surviving

Well Off

Don’t Care

Customer Types

Ess

entia

ls

Tre

ats

Pos

tpon

able

s

Exp

anda

bles

Your Products/Services





Your Products/Services

Essentials Treats Post-ponables

Expan-dables

•Necessary•Survival

•Well-being

•Indulgences•Justifiable

•Needed or desired

•Can be put off

•Unnecessary•Unjustifiable





Hand brake

Surviving

Well Off

Don’t Care

Customer Types •Price

•Smaller Pack•Private Labels

•Low-cost ‘Value’ products•Fighter Brands

•Less Variety/Customization•Immediate cash back

Essentials





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Shrink sizes•Hold down prices•“You Deserve It”

•Less Variety/Customization•Immediate cash back

Treats





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Low-cost Financing•Exceptional Deals

•“Danger of Postponing”•Immediate cash back

Postponables





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Offer D.I.Y. versions•Awareness

•Immediate cash back

Expandables





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Lower Price options•Bonus Packs (Stockpile)

•“Dependability”•“Good enough”


Essentials





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Reward Loyalty•“Improve Morale”

•Affordable vs. Luxury•Immediate cash back

Treats





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Simpler Models, Lower Prices

•Lower TCO models•Repair services


Postponables





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Awareness•R&D of Core Products•Immediate cash back

Expandables





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Awareness

Essentials





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•“Outstanding Quality”•“You deserve it”

Treats





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•“Save from Buying Now”•“You are missing out”

Postponables





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Discreet purchase (avoid flaunting)

•“Impress Your friends”

Expandables





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Awareness•“You can’t live without it”

Essentials





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•A.R.O.•“Seize the moment”

Treats





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•Monthly Payment Plans•“Quality of Life”

Postponables





Hand brake

Surviving

Well Off

Don’t Care

Customer Types

•New products•“Must Have”

•“For exclusive people…”

Expandables




End Notes





Branding in a Downturn




Way back in 2004…

• Thomas Cup, Indonesia




In 2007…

CNI ‘Beemax’ Factory Visit, China

1. Top Leaders

2. Product Development

3. Media





Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”

Sergio Zyman




Thank You.

soft copy of slides: http://totallyunrelatedrandomanddebatable.

blogspot.com/