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Strategic Brand Development

Prepared for

Prepared by

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Assignment

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1. Establish a long term brand strategy

2. Develop a new high-level approach

3. Elevate the Parex brand to a higher level

4. Position LaHabra as the stucco brand

3Brand Strategy

Left brain reality vs. right brain perceptionPart

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What’s the difference between sales and marketing?

Sales

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“Sales” happen in the streets, stores, offices, malls, at lunch or dinner in restaurants, on the golf course, on the phone, etc.

Marketing“Marketing” happens in the mind of the

consumer

• Brand Strategy and Positioning

– Strategy: what the brand stands for– Positioning: how we want consumers to

think and feel about the brand– Positioning: answers three critical

questions

1. Target market2. Competitive frame3. Leverage

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Left brain reality vs. right brain perception

“Left brain” management deals with reality

“Right brain” marketing deals with perception

Left brain management believes . . .

“If we change the reality of the brand, that will easily change consumers’ perception of the brand.”

Right brain marketers know that’s NOT true.

Changing “perception” is the most difficult job in marketing

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Right Brain Functions• Holistic thought• Intuition• Creativity• Art and music

Left and Right Brain Functions

Left Brain Functions• Analytic thought• Logic• Language• Science and math

Left brain reality vs. right brain perception, cont’d

What’s a Hyundai?• Ask anyone and they’ll say, “A car

company that’s doing great because it’s inexpensive and has a great warranty”

• Management changed the “reality” of the brand by introducing the Genesis and Equus

• But, they couldn’t change the perception

“Hey Honey, I’m getting you a $75,000 Hyundai instead of a Mercedes-Benz”

• How will that go over?• Perception vs. reality

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Genesis: $40,000

Equus: $75,000

Sonata: $21,195 - $27,595

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Left brain reality vs. right brain perception, cont’d What’s a Volkswagen?

• In the mind, it’s a small, cheap, reliable car

• That’s what made the Beetle such a huge success

Management changed reality

• Introduced the $65,000+ Phaeton

• Reviewers loved it – it’s a great car

• Competition: Mercedes-Benz “S” class, Lexus LS, BMW 7-Series

• The problem – perception of a VW

• Results were a disaster – in 5 years VW sold only 3,354 Phaetons in the U.S.

“Hey Honey, I‘m getting you a $65,000 VW instead of a Mercedes-Benz”

• How will that go over?

• Perception vs. reality

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VW Beetle: $20,790

VW Phaeton: $65,000

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Left brain reality vs. right brain perception, cont’d

What’s a Toyota?• The average person will say, “A

reliable car” What’s a Prius?

• The best “hybrid” car What’s a Scion?

• The best “youth” car What’s a Mercedes-Benz?

• The best “luxury” car

Four brands . . . four leaders

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Camry: $22,235 – $30,465

FR-S: $24,500

S-Class: $93,255

v Three : $27,415

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Left brain reality vs. right brain perception, cont’d

How about hamburgers?

• Research shows Burger King makes a better burger than McDonalds – it doesn’t matter

• McDonalds has a better brand

How about coffee?

• Consumer Reports says McDonalds makes a better coffee than Starbucks – it doesn’t matter

• Starbucks has a better brand

What about cola?

• All taste tests show consumers prefer the taste of Pepsi compared to Coca-Cola, it is a better product – it doesn’t matter

• Coca-Cola has a better brand

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Vs.

Vs.

Vs.

Reality Perception

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1. It’s product-centric – not brand-centric

2. It’s a “generic, parity claim” – any competitor can make it

3. It’s not unique or differentiating

4. It’s not ownable or defensible

5. In fact, we understand competitors are adopting this direction

6. Why are we promoting generic, parity product attributes?

7. Instead, promote what’s unique and differentiating

What about Parex USA? What’s wrong with a strategy promoting the product attributes, “Any shape. Any color. Any texture.”

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By promoting a relevant brand promise, the entire ParexUSA family will be more successful

This is a good brand promise• It has both emotional and rational appeal• It supports two of the three brand pillars: state-of-the-art technology and innovation

The problem is . . . it’s invisible• Rather than promoting the “brand promise”, the Company is promoting generic, parity

product attributes: “Any shape. Any color. Any texture.”

This is the wrong strategy

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“As ParexUSA moves into the future the focus will be onstate-of-the-art technology, innovation, and unsurpassed customer service.”

– Rodrigo Lacerda President and CEO

“If you can envision it, ParexUSA can bring it to life.”

What’s a ParexUSA

ParexUSA brand promise

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TAKE AWAY

Better “brands” always win in the marketplace, better “products” seldom do

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13Brand Positioning

Leveraging reality to create a leadership positionPart

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What’s a Parex?

• Website: “Exterior Insulation Finishing Systems (EIFS)” – A generic descriptor• Campaign communication: “Envision . . . Any shape. Any color. Any texture.”

A parity product descriptor• Google: “A leading EIFS and coatings manufacturer, who entered the industry

in 1986 with a complete line of EIFS products and a focus on innovation, quality and . . .” – A parity/generic description most competitors are using

What’s a LaHabra?

• Website: “Stucco Solutions” – A generic descriptor• Campaign communication: “Envision . . . Any shape. Any color. Any texture.”

A parity product descriptor• Google: “LaHabra Stucco Solutions, the leading manufacturer of exterior

stucco and Exterior Insulation Finish Systems (EIFS) products, has been the leading . . .” – A parity/generic description most competitors are using

Key observations of reality vs. perception vs. parity

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Key observations of reality vs. perception vs. parity, cont’d

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The Problem – Promoting parity/generic product attributes will not build the brand• They’re not unique or differentiating• They’re not ownable or defensible

The Solution – Company should be taking the high road• Promoting brand strengths• Positioning itself as a leader• Leverage unique and differentiated attributes and benefits

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Current EIFS/Stucco brand familiarity and product quality perceptions among architects

Source: Architect & Builder magazines’ 2013 Brand Use StudyN=225 Registered Architects

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Future EIFS/Stucco brand familiarity and product quality perceptions among architects

Source: Total Spectrum Advertising, July, 2013

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Based on key competitors’ positioning lines and descriptions, there’s a gap and opportunity

KEY OBSERVATION: • Not one company is positioning itself as the

“performance” leader, or “innovator”, or “state-of-the-art”, or “technology” leader – this leaves a gap and opportunity

• BASF – “The Chemical Company”

• Dryvit – “Energy Efficient Exteriors Since 1969”

• Parex – “Any shape. Any color. Any texture.”

• Senergy (A BASF Co.) – No tag

• Sto – “Building with conscience”

ParexUSA, Parex and LaHabra each has “state-of-the-art technology” and “innovations” to be leveraged

2007 – 2009 2009 – 2010 2010 – 2011 2012 2013

• Select Finishes• NTS (New Tech. Stucco)• Tuffstone Granite• Wall Sanded One-Coat &

BasiC926 Sanded Scratch & Brown

• Stucco Level Coat• Armourwall • Stucco Ass.

• DPR Optimum Premium Acrylic Finishes 45% more polymer content

• 121 Optimum Base Coat and Adhesive

• Hydro Guard SP-1• Accel-Pak• 121 Optimum Wet Base

Coat and Adhesive

• Perma-Flex Stucco Grade Acrylic Finish

• QuickBase EIFS Base Coat & Adhesive in a box – first product of its kind

• LaHabra EIFS• Accel-Dry• Allegro II• Burst• 856 XLF• Ultra e-lastic Finishes• WeatherSeal BG

• AquaSol Enhanced DPR

Acrylic Finish and Coating with Enhanced Hydrophobic and Photocatalytic Technology

• ColorFast Pigment System

• MicaMax 3 – First all-in-one acrylic finish, basecoat, EIFS adhesive

• Fracture Guard 7000 – first liquid membrane for crack isolation up to 3/8”

• 121 Cool Base and 121 Dry Hi

• Pro Patch XF

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Among architects, Parex/LaHabra is one of the least familiar EIFS/Stucco brands

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Source: Architect & Builder magazines’ 2013 Brand Use Study N=225 Registered Architects

According to Architect and Builder magazines’ 2013 Brand Use Study, architects are . . .

• Most familiar with Dryvit• Least familiar with

Parex/LaHabra and Omega

Brand Familiarity

Architects’ EIFS/Stucco “brand usage” in the past three years . . . top three brands

Dryvit used most often

BASF and Omega least often

Parex/LaHabra was used by 4 percent of architects surveyed in 2012, and tied with . . .

• Finestone (4%)

• Senergy (4%)

Parex/LaHabra did not have sufficient mentions to be in the top three 2011 or 2013 surveys

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Source: Architect & Builder magazines’ 2013 Brand Use Study N=225 Registered Architects

0%

10%

20%

30%

40%

50%

2011 2012 2013

Brand Usage

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Architects’ EIFS/Stucco “brands specified/used most” past three years . . . top three brands

Dryvit dominated all brands for all three years

Sto made significant headway in 2013

Parex/LaHabra captured 3 percent of mentions in 2011

Parex/LaHabra had insufficient mentions to rank among top three brands in 2012 or 2013

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Source: Architect & Builder magazines’ 2013 Brand Use Study N=225 Registered Architects

0%

5%

10%

15%

20%

25%

2011 2012 2013

Brands Specified/Used Most

2323Parex USA, Parex, LaHabra

Introducing the new brand strategy and positioningPart

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The evolution of ParexUSA – building a stronger brand with higher-level strategy, positioning and messaging

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“As ParexUSA moves into the future the focus will be on state-of-the-art technology, innovation, and unsurpassed customer service.”

– Rodrigo Lacerda President and CEO

“Science” is knowledge (facts or principles) of the physical or material world gained by systematic study using recognized scientific practices. Source: Merriam-Webster Collegiate Dictionary, Eleventh Edition

State-of-the-arttechnology + Innovation = Science

Build Betterwith Science.™

Anatomy of a great positioning line is . . .

Build Betterwith Science.™

An aspirational promiseRelevant, unique, differentiating

Ownable and defensible. (Based on a multitude of proof statements)

Appropriate for all divisions and levels of the organization

Is timeless. (As long as the Company produces state-of-the-art, innovative products, the brand promise and positioning line is valid)

Reflects the Company’s DNA

This new high-level approach is an evolutionof the Envision campaign

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Brand building should revolve around a single, aspirational “brand” promise, not “product” attribute

A relevant, unique, and defensible brand promise will lift all brands simultaneously

Proposed key messaging will focus on how ParexUSA “science” makes

• The product stronger

• More durable

• More colorfast

• Easier to work with

• And many other benefits

Parex USA

LaHabraParex

Merkrete

Build Betterwith Science.™

27Creative Strategy

Building brands with a hammer and nailPart

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How a hammer and nail builds a brand

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The “hammer” is an ownable visual representation (not necessarily a logo)

The “nail” is the words

The Marlboro cowboy is the emotional hammer and the words, “Come to where the flavor is” is the nail

Coke’s unique contoured bottle is their visual hammer, “It’s the real thing.” slogan is their nail

How a hammer and nail builds a brand, cont’d

Where would Aflac be without the duck?

• Before the duck, Aflac had 12% name recognition

• After the duck, 94% name recognition

Where would Susan G. Komen for the Cure be without the pink ribbon?

• The pink ribbon is the visual hammer

• Today, it is the world’s largest non-profit

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How a hammer and nail builds a brand, cont’d

Apple improved their hammer (the multi-colored logo) by using a single color for a more sophisticated look

Target uses the “target” as their hammer everywhere and on everything, including the poor dog

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How a hammer and nail builds a brand, cont.

E-Trades’ hammer is the talking baby, their nail – “So easy even a baby can do it”

Ralph Lauren is a good brand, but it’s a much better brand with a visual hammer

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32Sample Brand Executions

Parex USA hammer and nailPart

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Concept exploration

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Concept #1

“Story”

Build Betterwith Science.™

I HAVEA STORYFOR YOU.

This campaign tells the story of “Building Better with Science.” What it means to architects, designers, building owners, and contractors. All of the stories are told from their perspective.

Their stories are interesting and factual – telling how the science behind the product makes it “stronger,” “more durable,” “more colorfast,” “faster drying,” “easier-to-use,” and any number of other attributes and benefits.

Why did they select ParexUSA products? We’ll find out as they tell their story noting specific product and performance characteristics that proved to be critical to the success of their project.

Ultimately, we envision this campaign for all ParexUSA products – Parex, LaHabra, Merkrete, El Rey, TEIFs and Variance.

Using an iconic red chair as a visual hammer, a signature look will be created establishing continuity for the campaign for years to come – for any product, any target audience, any medium, any country.

Imagine, an architect, like above, telling her story on the 7th Street bridge in downtown Los Angeles. A designer in the same red chair in Golden Gate Park. A contractor in the red chair, with hard hat, in Times Square.

Each person can be shot against a green screen with any cityscape of the world dropped-in – allowing for a truly global campaign.

This high-impact, clean design is guaranteed to substantially raise brand visibility, brand stature and create the perception of a category leader.

The visual hammer(The red chair)

The nail

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Concept #2

“Build”

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Build Betterwith Science.™

The visual “hammer” is the striking design and imagery. This signature character would become the brand persona and would be an on-going visual element in all communications.

The “nail” is the positioning line, “Build Better with Science.”

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Concept #3

“Strong Suit”

Science has never been a strong suit.

Building always has been.This campaign tells the story of Building Better with

Science – the practical side of why it’s important to contractors.

Their stories are personal, factual and have a bit of attitude.

“All I know about science, I learned on the job. When it’s 31⁰, I can use Parex Accel-Pak – a dry admix to accelerate drying time. My crew stays busy, and the job gets done faster. It’s as simple as that.”

Build Betterwith Science.™

The visual “hammer” is the dramatic and sophisticated look and style of photography. The dramatic lighting and poignant imagery are difficult to ignore. The talent could be any on-the-job contractor or job site. The story is always authentic and factual.

The “nail” is the slogan, “Build Better with Science.”

Additional considerations

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LaHabra national rollout considerations Co-sponsored regional roadshows Regional tradeshows Spot market CRM program

targeting builders• 3-dimensional, high-impact,

engaging piece• Builds awareness, builds the

database, generates leads

Regional webinars Public/press relations with spot

market trade pubs and Business Journals

Push email campaign

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42Next Steps

Immediate next steps

Appoint TSA AOR Discuss benefits

• Retainer-based relationship• Project based• Time and material

Agree to compensation formula Get to work

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A Winning Combination

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