2013 navigate-managing your brand as an asset
TRANSCRIPT
Australian Marketing Institute Managing Your Brand as an Asset
John Gregg
JULY 18, 2013
Agenda
Why is Brand Asset Management Important?
What are the Key Steps to Brand Asset Management?
The Top Determinants of Brand Strength
Customer Loyalty Price Premium
“An increase in customer loyalty of only 5% can lift lifetime profits per customer by as much as 95%”
“In some sectors, an increase of customer loyalty of just 2% is equivalent to a 10% cost reduction”
“Over 50% of customers would be willing to pay 20-25% price premium to the brand that they are most loyal to”
“A 1% increase in brand equity can result in a 1% increase in stock price”
“50% of customers are willing to try a new product from a preferred brand because of the implied endorsement, credibility and trust.”
“It takes 7 to 10 times the cost and effort to gain a new customer as it does to keep an existing customer”
“I Would Travel Further”
“I Would Pay More”
“I Would Wait Longer”
Agenda
Why is Brand Asset Management Important?
What are the Key Steps to Brand Asset Management?
Eight ways to manage your brand as an asset
1. Formally link business and brand strategy
2. Create a unique and relevant Brand Identity
3. Create a clear and distinct Positioning
4. Extend your brand strategically
5. Build a strategic Brand Architecture
6. Evaluate and align touchpoints
7. Consistently deliver on your Brand Contract
8. Practice effective global brand management
Managing Your Brand as an Asset
1. Formally link business and brand strategy
Resonate
Differentiate
Credibility
Brand Strategy
With Customers
And Employees
Vs. Competitors
Business Strategy
Viable business model
Viable profit model
Execution Planning (e.g.,communications road
map, marketing, site plans, etc.)
Implementation
– Internally (e.g. communications, brand behaviors, culture)
– Externally (e.g. brand customer relationship)
Linkage Between Business and Brand Strategy
Connecting the brand vision to a financial growth gap helps demonstrate the importance of bringing it to life
2010
(3.5%)
5-YearCAGR
2005
$430 million
$630 million
8% $100 million
$100 Million
$70 million
= Current Business = Acquisitions = New Products = Brand Building
Options to fill the brand-driven growth gap:
– Build and leverage your brand more successfully—through strategic line extensions, premium pricing, partnerships, licensing opportunities, etc.
5 Year Growth Gap = $270 million
2. Create an aspirational and relevant Brand Identity
Today
FutureTime
BrandAnd
Customer Value
Current perceptions of the brand
Platform to move the brand along its path to its
aspirational identity. Demonstrates the unique and
beneficial differentiation of the brand; resonates and
is credible with customers.
Brand
Positioning
Brand
Positioning
Brand
Image
Brand
Identity
Aspirational goal of the brand;
Aspirational associations customers
should have after repeated exposure
to/experiences with the brand.
Brand
Positioning
Brand Identity provides strategic direction
Brand Identity is…
Future-focused, aspirational and provides a vision for the organization to strive for
The emotional link desired between product and customer
Brand Identity will provide…
Organizational touchstone, both internally and externally
The basis for crafting the strategic roadmap, guiding Brand Positioning, Communications, Brand Extendibility and Metrics
Brand EssenceGuides internal strategy; summary of the Brand Identity
Core Identity Core values, key competencies. Associations that will remain consistent across product, markets and through time.
Extended IdentityElements that provide texture and completeness; personality, organization, product characteristics
Virgin’s Brand Identity
Essence of
the Brand
IrreverenceCore Identity
Elements
Innovation
Fun &
Entertainment
Value
Service
Quality
Extended
Identity ElementsUnderdog
Personality
Richard
Brand Identity
1. Communicates the elements of the identity that resonate and are most credible with customers
2. Differentiates and demonstrates competitive advantage
It is the foundation for all external communications
3. Serves as the platform to move the brand along its path to the aspirational identity
4. Will evolve over time as the brand is able to deliver on elements of the Brand Identity and as customers’ needs change
Four Fundamentals Of Brand Positioning
3. Create a clear and distinct Positioning
Most meaningful &
most difficult to imitate,
but hardest to deliver
Easiest to deliver,
but least meaningful
& most easily
imitated
Functional Benefits
Attributes
Emotional &
Self-Expressive
Benefits
The emotional & self-
expressive benefits
customers receive
The functional benefits
customers receive
Features or processes
that must be
demonstrated to
customers
Benefits Hierarchy
Extended
Identity
Elements
Core Identity
Elements
Essence of
the Brand–Irreverence
–Service Quality
–Value
–Fun
–Innovation
–Underdog
–Exciting
–New Rules
Virgin’s Brand Positioning
Positioning
A Personal Way to
Flexibly Shop for
Wines at a Great
Value
“Wine Buying Like Never Before”
Brand Identity
A global Positioning statement can be tailored to
support local needs
USA
Zippo’s Core Global Positioning StatementZippo’s resilience, ruggedness, and dependability is
legendary, and has earned it the continuing respect,
confidence, and loyalty of its users. Combined with its
classic design, American heritage, and individual sense of
style, Zippo has become the quintessential brand for those
who demand the perfect flame.
GLOBAL Mexico
Japan
Germany
• Sporty and young-at-heart
• Patriotic and respectful of American ideals,
but not lost in nostalgia or sentimentalism
• Cosmopolitan, fashionable
• Socially active
• Proud of, but not arrogant
• Seeking and achieving success
• Outdoorsy, rugged
• Classic cool (e.g. James Dean)
• Worldly, modern, contemporary
• Rugged but friendly, outgoing and approachable
Is the extension consistent with your longer term brand vision and strategy?
Does the extension actually add value to your brand?
Will you be able to deliver on the branded customer experience?
Is the benefit consistent with your Positioning?
If this extension fails, will it be a major or minor setback for your brand?
Does the extension make sense for all regions?
4. Extend your brand strategically
Brand Extendibility: Critical Questions to Ask
Stronger brands allow for more differentiated product line extensions
Office
(e.g., Scotch
Tape)
Transportation Safety
(e.g., Reflective
Coatings)
Industrial
(e.g. Abrasives)Health Care
(e.g., Surgical
Supplies)
Beliefs and Values
Benefits
Attributes
High LowDegree of Product
Differentiation
Level of Brand Meaning
Example:
Pioneering Innovative
Technologies &
Products
Brands with lower brand meaning cannot support much extension
??
Beliefs and Values
Benefits
Attributes
High LowDegree of Product
Differentiation
Level of Brand Meaning
Bottled Water
Pure Water
Example:
Sainsbury’s Bank
Faster Chips
The Blue Card
Consulting
X Box
Knowing when to extend your brand…
Successful Extensions
Unsuccessful Extensions
Mercedes C-Class
Coke Clothes
Wine Coolers
Mouthwash
…and knowing when not to is a key driver of brand success
Brand extension ideas should be evaluated for fit in all regions
USA
GLOBAL
Germany
Japan Mexico
GLOBAL
Germany
Japan Mexico
USA
USA
GLOBAL
Germany
Japan Mexico
USA
GLOBAL
Germany
Japan Mexico
Pocket Flashlight Sunglasses Camp Stove Lighter Wand
Purchase Interest
High Medium Low
5. Build a strategic Brand Architecture
The logical, strategic and relational structure for all of the brands in the organization’s brand portfolio
The objective is to maximize clarity, synergy and leverage to maximize customer value and internal efficiencies
Should clarify what role each of your brands and products play in different markets, and may result in a brand rationalization
Brand Architecture is the organizing structure of a brand
portfolio
– David A. Aaker, Brand Leadership
Master brand
Subbrands
Product brands
The Brand Architecture spectrum
A Branded House
uses a single Master
Brand to span a set
of offerings that
operate only with
descriptive offerings.
A House of Brands
consists of independent
stand-alone brands,
each maximizing its
impact on the market
with little connection to
its parent.
Significant investment in multiple Brands
Build Brand Equity in Master Brand
Maximize synergies among business units
Target unique & separate customer base
Reinforce comprehensive solution focus
Key Issues Driving The Spectrum:
Branded
House
House of
Brands
Sub-Brands
Stand-Alone
A flexible architecture can be used to address local differences
The Sony brand system uses the Sony brand in a variety of ways, in different markets, to target specific customers with unique value propositions
Endorser
IngredientDriver
Stand-AloneCorporate
Play Station and Columbia Tri-
Star are not visibly connected to
Sony, but many consumers know
about the link. This shadow
endorsement provides positive
associations, but allows the
strong brands to stand on their
own
The ProAudio brand augments
the Sony brand by
communicating cutting edge
technology across multiple
Sony Electronics product lines
Endorser brands usually represent
organizations, rather than products, and
provide credibility to the offering. Since the
Sony brand is somewhat insulated from the
product brand, poor performance of Metreon
is unlikely to affect the Sony brand
A driver brand has the primary
responsibility for a purchase
decision and owns the
customer’s brand experience.
Sony uses their master brand
with a descriptive, “Pictures,”
to drive the film division
Sony chooses a
flexible architecture
and leverages their
corporate brand in
several different
ways
6. Evaluate and align touchpoints to deliver
Each touchpoint can reinforce or denigrate the brand, therefore the touchpoints must be evaluated and aligned to deliver the brand Positioning, and ultimately reach the desired Brand Identity
Pre-Purchase
Experience
Post-Purchase
Experience
Purchase
Experience
Touchpoint Wheel
Website
Advertising
Collateral
Product/Service
Assortment
Point-of-Purchase
Displays
Sales Force
Customer Service
Billing
Loyalty Programs
Product Quality
Whirlpool’s Touchpoint Wheel
Pre-Purchase
ExperiencePost Purchase
Experience
Purchase
Experience
Influencing
Touchpoints
• Print & TV Advertising
• Coupons or Special Offers
• Website
• Viral Marketing
• Direct Mail
• New Product Launches
• Public Relations
• Consumer Reports
• Marketing Speeches
• Sponsorships
• Home Builders, Contractors,
Architects
• Partners like P&G
• Whirlpool Customers
• Retail Partners
• In-Store Displays
• Sales Force
• Financing Plans
• Installation Technicians
• Customer Service Agents
• Customer Service Reps
• Service Technicians
• Inspired Cooking Class
• Customer Satisfaction
Survey
• Bill
• Community Work
College/
MBA Recruiting
Company
Alumni
Vendors/
SuppliersAnalysts
Annual Shareholder
MeetingAnnual Report
Internal
Newsletters
Employees
Understand the specifics of the Brand Contract from your customers’ perspective.
Translate the specifics of the brand into product, service and delivery standards that employees can understand and technology can fulfill.
Fulfill the “positive” expectations of the Brand Contract to develop a more lasting, powerful brand. Uncover and address the “negative” expectations of the Brand Contract to improve and transform perceptions of the brand.
Uphold the Brand Contract or risk undermining the brand and losing trust from customers.
Deliver on the Brand Contract consistently through all touch points
7. Consistently deliver on your Brand Contract
A Brand Contract includes all the promises that the brand makes to its customers. Once you have identified and evaluated critical touchpoints, ensure that you have an action plan to deliver on your Brand Contract.
The result of NOT delivering on your Brand Contract
Brand Contract
Consistent, fast, friendly service
Reasonably priced
Fresh, tasty food
Family fun and safe
Enjoyable experience
High value
High quality
Wall Street Journal, July 16th - cites a University of Michigan study on customer service that found McDonald’s ranked among the poorest-performersrelative to customer satisfaction.
“on any given day, 11% of McDonald’s customers are dissatisfied with their visit”
Nearly 70% of the dissatisfied customers are further dissatisfied with the way their complaint was handled
Over half of all dissatisfied customers reduce their visits to McDonald’s and tell up to 10 others about their unsatisfactory experience.
The article quantified the financial losses tied to poor customer service as potentially costing McDonald’s $750 million annually.
What do you expect from a visit at McDonald’s?
What do you experience from a visit at McDonald’s?
8. Practice effective global brand management
A company’s primary goal should be global brand leadership, not a global brand
Effective
Global Brand
Management
Share Insights
and Best
Practices Across
Countries
Assign
Responsibility for
Cross-Country
Synergy
Execute Brilliant
Brand-Building
Programs
Support a Global
Brand Planning
Process
+ Holds a global meeting at its headquarters every quarter to spark internal community spirit, provide education regarding the direction of the company, and rally associates around the brand
+ Senior management prefaces internal newsletters and status reports with brand vision
+ Employees who demonstrate the company’s core values receive company-wide recognition through reward programs such as the highly acclaimed Chairman’s Award
+ Actively use intranet to share best practices
+ Provides complete “Brand Book” and “Brand Execution Guidelines”
+ Regular conferences
+ Global Brand Director frequently travels to educate, learn, and share
Bayer Self Testing Segment has an inconsistent global brand structure
Product oriented company; lacks umbrella brand
No senior management support; no internal communication
Brand does not tie its diabetes offerings together, resonate with consumers, or differentiate from competitors
Companies use different methods for encouraging sharing of best practices and brand insights
There are varying degrees of centralization of brand management
Options for Global Brand Management
1. Single, Unified Global Brands & Positionings, w/ Regional Variances
2. Regional Brands w/ Common UmbrellaPositionings, & Regional Autonomy
3. Distinct Global Brand Postionings, w/ Regional Brand Autonomy
4. Common Global Brand-Building Platforms(products, sales force, marcom), Distinct Brands by Price Point
Examples
Track specific brand metrics
ROBI Metrics
ROBISM
Measurement
Analysis
Decision Making
Benchmarking Diagnosing
Allocating Resources
Compensating Employees
Informing Markets
Setting Future Goals
There is only one kind of valuable brand metric –one that drives to a business action
Business Action
Touchpoint Metrics
Metrics that diagnose the
brand’s performance across
the touchpoints of the brand-
customer relationship.
Metrics that diagnosis the
brand’s impact on the
business’ performance.
Strategic Metrics (Impact)
Eight ways to manage your brand as an asset
1. Formally link business and brand strategy
2. Create a unique and relevant Brand Identity
3. Create a clear and distinct Positioning
4. Extend your brand strategically
5. Build a strategic Brand Architecture
6. Evaluate and align touchpoints
7. Consistently deliver on your Brand Contract
8. Practice effective global brand management
Managing Your Brand as an Asset