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What Is A Brand?

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  1. What Is A Brand?

  2. “A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competition.” American Marketing Association

  3. What Is A Brand? • Asset that drives premium pricing and future cash flows • Signal of quality and a trust mark • Relationship • A set of rational and emotional associations that identify and differentiate a company or its offer • A form of self expression

  4. Determinants of Brand Strength “I would buy again” “I would highly recommend” “I would travel farther” “I would wait longer” “I would pay more” CustomerLoyaltyandAdvocacy PremiumPricing • “It takes 7 to 10 times the cost and effort to secure a new customer as it does to keep an existing customer” • “An increase in customer loyalty of only 5% can lift lifetime profits per customer by as much as 95%” • “50% of customers are willing to try a new product from a preferred brand because of the implied endorsement, credibility and trust.”

  5. Investing In Their Brands Top 20 Global Marketers Source: Advertising Age, November 8, 2004

  6. Ultimately, a brand’s meaning to consumers represents the sum total of the consumers’ experiences with the brand — either through direct or indirect means.

  7. The Role of Marketing • Create superior customer experiences that drive unshakable loyalty, advocacy and profitable revenue growth • Manage, protect, leverage and enhance brands • Engine of innovation and ideas that drives business

  8. “The business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” Peter Drucker

  9. The Allure of Global Brands • Economies of scale across multiple markets • Uniformity of image • Responsiveness to global customers

  10. The laws of Branding

  11. The law of expansionthe power of a brand is inversely proportional to its scope • Chevrolet, Ford • Am Ex (senior, student, membership miles, optima etc) • Levi’s (27 different cuts custom fit – 31-19%) • Crest 38 SKUs 36%, today over 50 SKUs 25% • The power of a brand is not the sales generated by the brand (competition) • Overzealous brand names • Vaseline intensive care suntan lotion • Gillette clear gel antiperspirant

  12. Contractiona brand becomes stronger when you narrow its focus • Starbucks corp. : a coffee shop that specializes in coffee • Toys “R” Us : 20% of toys in US (specialty store or category killer) – Babies “R” US, Kids “R” US • Narrow the focus: contracting the category not expanding it • Stock in depth: 10,000 toys versus 3,000 toys in department store • Buy cheap: makes money buying • Dominate the category • Microsoft 95% desktop computer operating systems • Intel 80% microprocessors • Coca-Cola 70% of cola • NOKIA (paper, chemicals, rubber products, electronics, machinery, computers, mobile phones)

  13. Publicitythe birth of a brand is achieved with publicity not advertising • Body shop: Anita Roddick traveled the world fro publicity pushing ideas about environmental protection • Starbucks, Wal-Mart: brands don’t create publicity, people do • Best way to generate publicity: be first • Band-Aid, CNN, Compaq, Gore-Tex, Time, Hertz, Xerox, Playboy, Intel • Fast development: fax vs internet

  14. Advertisingonce born a brand needs advertising to stay healthy • Shift from publicity to advertising • Should leaders advertise? • Heinz America’s favorite ketchup • Budweiser, king of beers • Coca-cola the real thing • Visa, its everywhere you want to be • Almost every ad makes some type of better product claim. What happens when you say our product is the leader? • Advertising is a powerful tool not to build a brand or leadership but to maintain leadership

  15. Worda brand should strive to own a word in the mind of consumer • Mercedes-Benz: prestige • Volvo: safety • BMW: fun to drive • Own a category word • Kleenex is tissue • Make me a Xerox copy, hand me the Scotch tape • Fed Ex in the delivery business (Emery Air Freight leader), CEO narrowed its focus overnight only: Fed Ex the generic term for overnight delivery • Branding a prestige product or service: • Make it more expensive than competition • Find a core word for prestige • Mercedes “Engineered like no other car in the world”

  16. Credentialscrucial ingredient in the success of any brand is its claim to authenticity • Customers disbelieve most product claims • Coca-cola: the real thing • Credentials will make prospects believe almost anything • Leadership is the most direct way to establish credentials • Polaroid leader in instant photography but the brand couldn’t be stretched to conventional 35mm film against Kodak • Many companies run branding programs devoid of credentials: • Tastes great, saves money, whitens teeth • Find credentials that can be exploited or create credentials by inventing a product category • The leading Mexican beer • The leading ice beer

  17. QualityQuality is important but brands are not built by quality alone • Does quality keep time better than Swatch? • Does coca-cola taste better than Pepsi? • There is no correlation between success in the market place and comparative testing • For a powerful brand build a powerful perception of quality in the minds of consumers • Contraction, name, price • Conventional wisdom: marketing a high quality product at a comparable price: QUALITY STRATEGY • Deliberately start at a higher price then find what you can put in the brand to justify it • Rolex made watches bigger and heavier • Montblanc made pens fatter

  18. Categorya leading brand should promote the category not the brand • Brand new categories: Stolischnaya, Mercedes-Benz, Volkswagen • Narrow the focus down to nothing and start something totally new • Launch the brand in such a way as to create perception that it was the first, the leader. Describe the word in such a way. • Promote the new category • When you are first you can preempt the category – the only brand associated with the category • When competition appears? • Continue promoting the category. Expand the market • Coca cola and Pepsi both benefit from the advertising wars

  19. Namea brand is nothing more than a name • Xerox • Mitsubishi (corporartion, electric, motors, heavy indus., chemical, oil, materials, estate, construction etc)

  20. Extensionsthe easiest way to destroy a brand is put its name on everything • 90% of all new products in the US are line extensions (Bud dry, light, ice) • Manufacturer approach: the volume is going nowhere, lets increase brands to increase sale • Light, clear, healthy, fat-free line extensions mean?

  21. Fellowshipto build the category a brand should welcome other brands • When you broaden a brand you weaken it • Coca-cola & Pepsi-cola • Choice stimulates demand, competition makes customers more conscious, increases the noise level, tends to increase sales in the category • For each category, two major brands (Kodak-Fuji, Nintendo-PlayStation) • Similar businesses located close together (Planet Hollywood – Hard Rock Café) • Market shares higher than 50% consider launching multiple brands – not line extensions • Coca cola 50%, Fed Ex 45% of domestic market

  22. Genericone of the fastest routes to failure: give a generic name • General Motors, General Electric, General Foods • Generic brand name: inability to differentiate from competition (Nature’s Answer, Nature’s Herb, Nature’s Secret, Nature’s Way) • Revolutionary and unlikely to be copied (Kodak, Xerox) • Take a regular word and use it out of context to connote the primary attribute of the brand – Blockbuster video • Intelligent Chip Company – Intel Corp. (Intelligent Chip Inside – Intel Inside)

  23. Companybrands and companies: there is a difference • Company dominates: Microsoft – Microsoft Word • Brand dominates: Tide – P&G • Equal weight: Gillette Sensor • Brand names should take precedence over company names • Best branding strategy to use the company name as a brand name (GE, Coca-cola, IBM) • Cola itself is Coca-Cola the real thing, What is “New Coke” • Microsoft part is redundant: Microsoft Excel - Excel

  24. Sub brandswhat branding builds, sub branding can destroy • Holiday Inn wanted to get into the upscale hotel segment • Invent a sub brand: Holiday Inn Crowne Plaza • Everybody thought it was too expensive for a Holiday Inn • Remained as Crown Plaza

  25. Siblingsthere is a time and place to launch a second brand • A second brand strategy is not for every company • General Motors: Chevrolet, Pontiac, Buick, Cadillac • Let the brands fight among themselves • Each division broadened the scope of its brand, leading to brand confusion • Sibling strategy required top management supervision • Toyota – Lexus (common product area, rigid distinctions – price, different not similar brand names)

  26. Shapea brand’s logo should be designed to fit the eyes • Horizontal shape provides maximum impact for the logo • Legibility: typeface does not express an attribute of the brand.- Rolex?, Rolls-Royce? • The trademark is often overrated. It’s the Nike name that gives meaning to the Swoosh symbol • There are only a handful of simple symbols that make effective trademarks (Mercedes star)

  27. Coloruse a color that is opposite of the major competitor • Cola is a reddish-brown liquid, so it is one of the reasons Coca-cola picked red. • Pepsi picked red for the cola and blue to differentiate. Poor choice. The lack of a unique differentiating color makes Pepsi invisible in the sea of Coca-cola red. • Pepsi –cola is going blue

  28. Bordersa brand should know no borders • Keep the brand narrow focus in its home country • Go global • Crossing a border adds value to the brand • Watches from Switzerland • Wines from France • Clothing from Italy • Need to be first • The product needs to fit the perceptions of its country of origin • Ex: Mercedes Benz Smart - Swatch

  29. Consistencya brand is not built overnight • The market is changing! Change the brand! • Tanqueray gin / Absolut & Stolichnaya high end vodkas, so Tanqueray vodka was created • Volvo, why limit to boring safe sedans, introduce convertible sports cars, dilute safety message • Limit the brand. It has to stand for something simple and narrow in the mind.

  30. Changebrands can be changed, only infrequently and very carefully • Changing occurs in the mind of consumer • If the brand is weak or non existent in the mind, change. If the brand has a unique and distinct perception changing is a great risk. • Kentucky Fried Chicken - KFC

  31. Mortalityno brand will live for ever • What is a Kodak? Conventional camera and conventional photographic film. The market is slowly shifting to digital photography. Kodak is still investing • Kodak is investing in digital (Kodak Digital Science)

  32. Singularitymost important aspect of a brand is its single-mindedness • What is a Chevrolet? A large, small, cheap, expensive car or truck. • What is an Atari? Used to be a video game, tried to be a computer • Singularity helps a brand perform its most important function • Instead of a safe car ask for a Volvo • Instead for a driving machine ask for a BMW

  33. Managing Global Brands For Success

  34. Six Steps to Managing Global Brands for Success Establish Brand Strategy and Architecture DefinetheBrand’s Identity EstablishaDistinctive Positioning MeasureandReport Progress Determine Governance Structure AlignAll Touchpoints Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

  35. Establish Brand Strategy and Architecture Step 1 • Creates the strategic framework for the relationships among the master or parent brand and other brands in the portfolio • Drives clarity in the organization regarding the operating philosophy for the use of the brand and its role

  36. Branded House House of Brands Hybrid Brand House Company Type Affects Branding Approach • Uses single master brand • Spans multiple products and services • Descriptive names used with master brand • Multiple stand-alone brands • No visible connection of brands to parent • Combines use of master brand with secondary brands • Stand-alone brands used strategically

  37. Branded House House of Brands Hybrid Brand House Examples • Virgin • Virgin Airways • Virgin Cola • Virgin Records • BMW • X5 • 325 • 525 • Proctor & Gamble • Tide • Crest • Pampers • Unilever • AXE • Dove • Ponds • IBM Thinkpad • SONY Walkman • Apple ipod • Touchstone Pictures • PlayStation

  38. Alternative Global Branding Approaches

  39. Profile of the Walt Disney Company’s Branding Core Essence: Wholesome Family Entertainment Careful application of the Disney master brand allows it to remain true to its core essence while penetrating new markets using stand-alone brands. • Disney World • Disney Theatrical Productions • Disney Imagineering • Disneyland Resorts • Disney Hand • Disney Cruise Line • Disney Radio • Disneyland Paris/Tokyo • ABC Television • ESPN • Buena Vista Television • Miramax • Touchstone Pictures • Hollywood Records

  40. Determine Governance Structure Step 2 • Governance structure must align with and support brand strategy • Degree of centralization determines level of control and flexibility • Governance model must focus on executional challenges and core problems inherent in managing a global brand

  41. Organization Structure • Centralized • Emphasizes brand as a core asset • Monitors consistency of brand positioning across multiple markets • Typically involves senior executives and CEO as brand champion • Ensures adoption of brand requirements across organization • Limits flexibility • Decentralized • Emphasizes flexibility and adaptation to accommodate local needs • Managed by global brand team that seeks support from upper management • No single person “owns” global brand

  42. Core Problems • Fear of losing local autonomy while being held accountable for results • Lack of awareness of the brand’s shared characteristics and challenges across markets • Poor communications that restrict idea exchange • Little understanding of local marketers’ practices • Inadequate support from corporate center and inflexible and static guidelines

  43. Define the Brand’sIdentity Step 3 • Provides organizational touchstone, both internally and externally • Basis for strategic roadmap guiding brand positioning, communications, brand extendibility

  44. Brand Identity Provides Strategic Direction Brand Essence Summary of the brand’s identity — the heart and soul of the brand. Core Identity Core values, key competencies and associations that remain consistent across products, markets and through time. Extended Identity Elements that provide texture and completeness; personality, organization, product characteristics.

  45. All Brands Must Articulate Their Brand Essence And Manage It Consistently = Performance, passion for driving = Authentic, real, original = Wholesome family entertainment = Innovation = Ubiquity

  46. Establish a Distinctive Positioning Step 4 • What is positioning? • Grows out of the brand’s core identity • The case you make which establishes your relevance and superiority vs. the competition. It is the space you want to occupy on the consumer’s mental map that distinguishes your brand while redefining your competitors

  47. BMW’s Brand Positioning “The UltimateDriving Machine” BrandEssence • Performance • Passion for driving Core Identity Elements • Heritage/engineering • Quality • Styling • Logo Extended Identity Elements • Fun • Youthful • Nimble • Status

  48. Positioning Challenges • Relevance across markets • Ensuring broad understanding across organization • Degree of adaptation permissible while being true to brand essence • Management of partners in consistent implementation • Ongoing monitoring

  49. Achieving Cultural Relevance and Authenticity • Cultural relevance is all about the seemingly small issues needed to make brands feel friendly to a consumer's culture, language, lifestyle, habits, values, etc. • Cultural relevance is more than translation! • Customers notice "abnormalities,” whether it’s an Americanized way of writing dates, tonality of message, or inappropriate syntax, graphics, colors, and many other points of sensitivity. • Achieving cultural relevance starts with development of communications concepts and messaging strategies that are meaningful globally

  50. Challenges in Achieving Local Relevance: Merrill Lynch Merrill Lynch Bull in Russia Problem • “Tagline “Tradition of Trust” did not work in the society where banks are not trusted. Solution • Adapt the tagline to position ML as an educator whose experience deserves trust.