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Thebe Ikalafeng

CORPORATE REPORT

THE BRAND LEADERSHIP GROUP

Financial Mail -9/7/2006 3:28:38 PM

Financial Mail -9/8/2006 10:27:42 AM

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Brand valueA brand is made up of muchmore than simply a logo, it is‘a promise made and apromise kept’

The days are long gone when “brand-ing” meant simply finding a graphic de-signer to slap up a logo and a letterheadfor your company.Since the late 1980s brands have been

viewed as creators of shareholder value.In 1989 Nestlé paid £2,5bn — double themarket valuation of Rowntree — to gainaccess to Rowntree’s main brands, suchas Kit Kat, and in 1988 Phillip Morrisacquired Kraft for 600% more than itsbook value.In the past 10 years, branding has

become knownas a holisticbusiness con-cept involvingresearch, strat-egy, identityand design. In-tellectual prop-

erty and brand valuation has become aglobal phenomenon. It is about every-thing from the design of your businesscards to how your staff answers thephone; it’s about how a company ex-presses its personality and its soul and,most importantly, it’s a vehicle for cre-ating value for shareholders.In SA, branding has become popular

for small and large businesses alike, ascompanies either rebrand to align theirorganisations to the new South Africa orsimply seek to update their brands suchas Standard Bank and Old Mutual. Goodbranding should align marketing, com-munication and identity strategies withbusiness strategies.

WHAT IT MEANS

> Branding createsvalue forshareholders

> Group practises whatit preaches to clients

Unisa The new university was merged fromthree diverse institutions

tellectual property management; and Re-becca Roderick and Innocentia Liphokofocus on research. The group consists ofthree distinct but integrated businesses:Brand Leadership (research and strat-egy), Brand Leadership PR (reputationand relationship management) and The

CORPORATE REPORTTHE BRAND LEADERSHIP GROUP

As former HP chairman andCEO Carly Fiorina said:“Strong branding is not just apromise to our customers,partners, shareholders andcommunities; it is also apromise to ourselves. In thatsense, it is about using thebrand as a beacon, as a com-pass, for determining the rightactions, for staying on course,for evolving a culture, and forinspiring a company to reachits full potential.”

Branding supports how abusiness grows, how it’s per-ceived, how it projects itself,and determines the extent ofits success.

But as branding has becomea popular catchphrase, outfitsthat call themselves brandingcompanies have mushroomed.

Enter The Brand LeadershipGroup, which offers an inte-grated solution that coversstrategy, research, visual iden-tity and design, intellectualproperty and valuation.

Brand Leadership was set upin 2002 by Thebe Ikalafeng, abrand and marketing expert and a for-mer executive director of marketing forNike Africa. The directors each bringspecific expertise: MD Ikalafeng is headof strategy and integration; Prof RogerSinclair is a specialist in brand valuation;attorney Hans Muhlberg focuses on in-


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Identity Practice (design, architectureand interiors). Henk van den Berg, whohas overseen all the group’s creative pro-jects, is the creative director for TheIdentity Practice and Tendayi Gwata isMD of Brand Leadership PR.

The group’s central concept is thatbrands are business assets and driversof bottom-line results and should bemanaged in the same manner as otherbusiness assets.

Ikalafeng says: “All of us understandhow to bring ideas to life. We strive to bea group of thought leaders in the market-place. Our partners run specialist prac-tices themselves and The Brand Lead-ership Group brings them together todeliver an integrated solution.”

The group has worked on some of thecountry’s biggest public-sector brands,including the national coat of arms, Gau-train and the Cradle of Humankind. Thegroup has consulted in the public andprivate sectors. Its corporate clients in-clude ABB, Afrox, Sun International, Ap-ple, Standard Bank, Media24 and John-nic Publishing.

It’s quite a track record for only fouryears of working together. Ikalafengremembers how it all started, when hewas still marketing director for Nike

not just a logo,” says Ikalafeng. “A brandis a promise made and a promise kept.”

He says there are some good examplesof how SA companies have kept theirpromises to consumers. For example, thePick ’n Pay cyanide scare reportedly costthe company R200m, “but it respondedquickly.

“CEO Sean Summers set a new bench-mark in dealing with a brand in crisis.Pick ’n Pay offered a R5m reward [forinformation leading to the arrest andconviction of the person who plantedcyanide in a product] and reinforced thetrust consumers have in the Pick ‘n Paybrand.”

Ikalafeng says: “Conversely, a lack ofbrand integrity killed the Arthur An-dersen and Enron brands. The mark oftrue brand leadership is clarity, relevanceand consistency.”

It’s a promise made not just once. “Thepromise must be made and reinforcedover time. Look at big brands such asCoca-Cola, established in 1886 — they’rea brand built over time.”

So enough of the theory, let’s get tosome case studies.

Unisa is an interesting case. The newuniversity was merged from three diverseinstitutions — the old Unisa, TechnikonSA and Vista University’s Distance Ed-

Standard Bank Sport sponsorship with a purpose

Africa. “When I was atNike, I met Roger Sinclairand I learnt about theconcept of brandvaluation. I met Hans[Muhlberg] at a confer-ence on brand manage-ment, where he wasspeaking on intellectualproperty. Rebecca [Roder-ick, who recently emi-grated to Hong Kong]used to do valuation andresearch for Brand Met-rics. I was fascinated byboth of them. These werethree areas I was not anexpert in.”

Ikalafeng brought thesedifferent experts together.“To the outsider, this part-nership might haveseemed disparate, but itwas a whole new conceptof an integrated approachto building brands. We put an interestingproposition in the market — a 360° lookat branding from concept through to thebottom line.

“Building brands requires stronginsights into markets and customers,

developing strongand clear brandpropositions forthose consumers andthe experience to de-liver the brands con-sistently.

“The brand is thefundamental an-chor,” he adds. “Forexample, for leadingglobal brands, suchas Coca-Cola, Micro-soft and GE, thebrand accounts forup to 50% of thecompany’s marketcapitalisation. AsFortune predicted in1997, brand equity isnow a key asset.”

Educating boardson what brandingentails is a challengefor people in thebranding field. “It’s

Formed in 2002

Offers an integrated branding solution, comprising strategy,research, visual identity and design, intellectual propertyand valuation

Core values are integrity, partnership, accountability,curiosity, honesty and passion

Group's directors each bring specific expertise:

MD Thebe Ikalafeng is head of strategy

Prof Roger Sinclair is a specialist in brand valuation

Attorney Hans Muhlberg focuses on brand intellectualproperty management

The group has three distinct businesses:

Brand Leadership (research & strategy)

Brand Leadership PR (reputation and relationshipmanagement)

The Identity Practice (Design, architecture & interiors)

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THE BRAND LEADERSHIP GROUP

SOURCE: FM RESEARCH




ucation Campus — on January 1 2004,creating a mega-university of about300 000 students and more than 6 000full-time staff. The move catapulted

Unisa on to the list of the world’s 10biggest universities.

Gerard Grobler, Unisa director of cor-porate communications and projectleader of the rebranding exercise, saysthe branding of the merger aimed toconvey the identity of an SA universitywith an African footprint. “We wanted tocreate something new, without losing thesense of tradition [the three institutionstogether had a collective history of about180 years]. It was also an exercise inbreaking down barriers.”

Roderick, who was in charge of theresearch for the group, explains: “We didintercepts with students; discussions withstaff, including admin and teaching staff,even security guards; and a Web survey,all in five weeks. Our Web survey went tomore than 80 000 staff and students andwe received 6 600 responses.”

Says Grobler: “I’ve been involved withseveral branding and rebranding exer-cises. This one demonstrated that it ispossible to achieve the impossible.

“What I like about Brand Leadership isits strategic approach. It’s all aboutproper positioning. They gave us so manysound business tips. They were passion-ate and proactive. When we launched thenew identity at the official academicassembly, there was spontaneous ap-plause. It was wonderful.”

Brand Leadership also worked on therepositioning of the SA Revenue Service(Sars), helping to move its identity from a“Big Brother is watching you” feel to afriendlier image that projects paying taxesas a commitment to nation-building.

“We had started to reposition ourselveson the basis of a strategy we had in ourheads,” says Tasneem Carrim, who was the

assistant general manager of communi-cations at Sars in 2005, when BrandLeadership started to work on the brand,and now heads taxpayer education. “Ourobjective was to promote sustainable com-pliance and we wanted Brand Leadershipto help us articulate our new identity.”

She says Brand Leadership helped Sarsto think about how it should positionitself in the mind of the public.

Brand Leadership also helped Stan-dard Bank to rethink its sponsorshipstrategies. Khanyi Mlambo, now Stan-dard Bank private banking director, butpreviously in charge of sponsorship forthe bank, says: “Brand Leadership wasone of the first companies we engaged inour quest to align Standard Bank’s spon-sorship with business objectives. Throughthe initial work done by the companyand following the audit Brand Lead-ership conducted on our sponsorships,we were able to clear out the spon-sorships that weren’t giving value to ourbusiness and brand.”

For example, Mlambo says, StandardBank has invested a lot more in its soccersponsorships. “Brand Leadership’s advicewas: ‘Do it big or go home.’ Subsequentto Brand Leadership’s initial involvement,Standard Bank has increased its involve-ment in soccer throughout Africa. Thebank is now sponsoring the African Cupof Nations tournament and has renewedthe sponsorship of Kaizer Chiefs andOrlando Pirates. Now you can’t open anynewspaper or turn on the TV withoutseeing Standard Bank and soccer. It’s nowsponsorship with a purpose.”

In the vein of creating new brands fornew times, The Brand Leadership Grouphas worked this year on the launch of a

Hans Muhlberg Focuses onintellectual property management




new brand identity for the merger ofThebe Risk Services and Prestasi Bro-kers, to create one of the country’sbiggest comprehensive insurance brokers,Indwe Broker Holdings, with a combinedheritage of more than 100 years. Indwenow serves more than 120 000 indi-vidual, commercial and corporate clients.

Says Indwe CEO Giel Muller: “We’rebringing together two different culturesas far as staff and clients are concerned.Brand Leadership designed a new feel,logo and corporate identity.

“They did research among our staffand client base and helped us launch anew brand internally and externally. Totake the customer loyalty and traditionbehind the two brands and channel itinto a new identity was daunting, butthey did it brilliantly. The feedback hasbeen positive.”

Muller says rebranding is a long-terminvestment. “Positioning a new brand isnot a short-term project. You can’t throw

a few rand at it and walk away.”Brand Leadership was also involved in

the repositioning of City Press, helping toreturn the brand from a historical low of140 000 readers to an average singlecopy sale of 175 000. The newspaper wascatapulted from the fifth most-admiredbrand in its category, to the number-twoposition (Markinor Top Brands Survey2006), behind the Sunday Times, sincethe group was engaged more than twoyears ago. When the new strategy waspresented group CEO Jan Malherbe said:“It’s a pleasure to take advice from peoplewho know what they are talking about.”

Ikalafeng says: “We’re developing intoan integrated group of specialist com-panies. We’ve done extensive trainingand internalisation for organisations suchas the GCIS and Unisa and are de-veloping a holistic training offering toempower internal customers to deliverthe brand consistently and align the in-ternal and external brand.” ■

“ Strongbranding isnot just apromise to ourcustomers,partners,shareholdersandcommunities;it is also apromise toourselves”

- CARLY FIORINA




QUESTIONS AND ANSWERS

Value judgmentTara Turkington spoke to BrandLeadership MD Thebe Ikalafeng aboutwhat makes and breaks brands in SA

What are SA’s top brands and why?MTN. One of SA’s (and indeed Africa’s),biggest challenges is to create and buildconsumer brands that are South African,but transcend borders. If you lookthrough the World’s 100 Most ValuableBrands, you’ll see the US dominates thelist, with 69%. MTN has made a case forAfrica. Next, the world!

The more MTN-type brands SA has,the more SA is seen as a nation thatcontributes to a way of living in theworld.

Having said that, Vodacom knows howto create communication that connectswith the SA consumer, no doubt a reasonfor its dominant SA share. OnceVodacom and Vodafone settle the Africanterritorial divide, it will be an Africanstory to watch, though MTN must have alead in the battle.

For the same reasons, SABMiller is aninspirational brand. Taking a leaf fromgreat US corporate brands, SABMillerhas set the pace for SA corporations indetermining the consumer brand agenda,and creating new ways to express our-selves through brands.

Cape Town and the Western Cape —Cape Town is a great SA city brand, withglobal appeal.

About 47% of all films and TV com-mercials in SA are shot in Cape Townand surrounds, so Cape Town formsmuch of the visual tapestry in our com-munication.

Stoned Cherrie — one of SA’s tragediesis our lack of confidence in our selfidentity. Nkhensani Manganyi-Nkosi’sStoned Cherrie brought a new appre-ciation for the African aesthetic. Thebrand, which has spawned many other,possibly more successful, brands, such asSun Goddess, has made it fashionable fornonblack consumers to buy into thetraditional option for social functions.

If you could be a brand (other thanThebe Ikalafeng), what would you beand why?Richard Branson is the ultimate align-ment of a personal brand and a corporatebrand. One of the greatest challenges isaligning your work and home environ-ments, so they reinforce each other.Richard has created an organisation thatenables him not to work for the Virgin




group, but to live the Virgin life, withoutcompromising his personality and per-sonal values.

What will be the defining trends inbranding in SA in the next five years?With the first 10 years [in the democraticSA] defined by BEE, mergers and ac-quisitions, the next phase will be definedby how these partnerships deliver ondefining a new South African identityand building an enabling culture.

The real test is how Cyril Ramaphosa,Tokyo Sexwale and Patrice Motsepe canleverage their new economic might toleave a legacy and brands that, 100 yearsfrom now, can be referenced. Thus, in theabsence of creating whole new brands,there’ll be a trend towards emulatingorganisations such as Robert Gumede’sGijima, which merged with AST to createGijimaAST, or Indwe Risk Services,which is the result of the merger betweenPamodzi and Thebe Investment Corp.Mergers will remain a trend.

What have been the defining trends inthe past five to 10 years?Brand, brand, brand. To reassert ournewly reclaimed Africanness, recogniseour heritage and assert our power, manyof the new South Africa’s people, placesand institutions have gone on a re-branding spree.

Gauteng premier Sam Shilowa becameMbhazima Shilowa. Sheppard Mdladlanabecame Membathisi Mdladlana. TerrorLekota is now Mosioua Lekota. DFMalan became Beyers Naude. HarrowRoad became Joe Slovo. JohannesburgInternational, which recently changedfrom Jan Smuts, has become OR TamboInternational.

Of course, the biggest focus has beenon trying to understand the oft-ignoredblack consumer, and develop brandpropositions — products, services andcommunication — that speak to a newSA consumer and SA identity. This hasbeen demonstrated in campaigns such asVodacom’s Yebo Gogo, Telkom’s MoloMhlobo ‘Wam, Polka’s Internet serviceand Opel’s Raj.

Do you have any role models?As a growing brand community, we haveonly to look at the World’s 100 Most

Valuable Brands for inspiration. Thegreat brand and business thinkers suchas Bill Gates, Branson, Tom Peters, DavidAaker, Philip Kotler and Jack Welch,among others, have created a legacy ofhow to build brands.

Locally, people such as SABMiller’sGraham Mackay, Pick ’n Pay’s RaymondAckerman, McCarthy’s Brand Pretorius,former president Nelson Mandela,MassMart’s Mark Lamberti, Vodacom’sAlan Knott-Craig, Bidvest’s Brian Joffe,finance minister Trevor Manuel andRembrandt’s Anton Rupert, who spanthe range of personal, national and

proposition, a promise made and apromise kept. Even Pick ’n Pay’s NoName brand is a brand.

Which business sectors in SA aremost desperately in need of a brand-ing revamp and why?The sector that most needs branding —SMEs (small and medium-sized enter-prises) — has the least appreciation ofthe concept.

Branding is the strategic tool the com-panies require to clarify and differentiatetheir proposition, and present a distinctoffering to the market.

If you were CEO of Brand SA, whatstrategies would you implement?Despite creating countless institutions,and investing billions in developingtourism, investment and citizenship ini-tiatives, and unmatched national enthu-siasm and optimism, SA still struggles tocreate a unique global brand and a senseof national identity.

We need a co-ordinated plan to chan-nel the energy into a great brand. Second,there’s too much focus on messagingrather than partnering to develop prod-uct and service propositions. SA’s productand service creators (hospitality, heritageand security initiatives) need to worktogether to deliver the brand. Just saying“alive with possibility” is not a goodproposition if it’s not reinforced by ex-periences that citizens and visitors haveof our country. But the recent 2010National Communication PartnershipConference is a good start towards in-tegrating messages.

Tourism’s local initiative “sho’t left” is agood example of how the message folks(tourism) and creators of products andservices can work together.

What are the most important thingsthe management in any businessshould know about branding?The brand is the interpretation of busi-ness strategy into a consumer propo-sition. It is the link between the businessand the consumer. The brand is thecreator of wealth. Leading brands, Coca-Cola, Microsoft and GE, are among thetop five brands globally, at betweenUS$35bn and $67bn. This underscoresthe value of the brands. ■

MTN

Vodacom

SABMiller

Cape Town and the Western Cape

Stoned Cherrie

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THEBE’S TOP SA BRANDS

SOURCE: FM RESEARCH

commercial branding, prove that SAhas the resources and ability to createand lead great brands.

What books on branding would yourecommend to someone who knowsnothing about the subject?Seminal books include Al Ries and JackTrout’s Positioning, Tom Peters’ BrandYou on personal branding, David Aaker’sBrand Leadership, Kevin Lane Keller’sStrategic Brand Management, PhilipKotler’s Marketing Management, MarketSegmentation by Prof Malcolm MacDon-ald, Kellogg on Branding from the Kel-logg School of Management, and TimAmbler’s Marketing & the Bottomline.

You’ve dubbed the times we’re livingin as “an age in which everythingis a brand”. Is there anything thatcan’t be?If one accepts that everything is a propo-sition to fulfil a need, whether physical,emotional or spiritual, then one can ac-cept that everything is brandable.

Brands are a response to a need, a




What lies behind the brandGroup developed anintegratedapproach tobranding

Behind every great brand there arethinkers and doers, producing terabytesof strategy, research and creativity.

Brand Leadership has integrated thedisciplines required for coherent brand-ing. The group covers the following ar-eas:❑ Intellectual property — one of themost important offerings is ensuring thatclients have ownership and protection oftheir brands. This area is led by attorney

Hans Muhlberg, the author of The Lawof Branding and an expert in intellectualproperty, particularly trademarking. “Al-most anything can be trademarked,” ex-plains Muhlberg, who’sbeen in the business formore than 20 years. “Youcan trademark a distin-guishing name, a sign, alogo, a pay-off line, acolour — the BP green orthe FNB blue — you caneven trademark sounds,shapes and, in unusual cases, smells,though not in SA.”

Brands need to be protected, Muhlbergsays, because a large portion of a com-pany’s equity is held in the brand. “TakeGoogle, for example, all the equity restswith the name.”

Muhlberg says trademark legislation inSA is in line with the top legislation inthe world, though the process ofregistering trademarks is slow.

“Until recently, it tookabout three years to reg-ister a trademark, and itstill takes about two years.”

He is critical of TheCompanies & IntellectualProperty Registration Of-fice (Cipro), a subdepart-ment in the department of

trade & industry, which is responsible fortrademark registrations. “They messedthis up, but things do seem to be im-proving.”

SA, he says, is about to sign theMadrid Protocol, which will assist in-ternational companies to register trade-

WHAT IT MEANS

> Great brands need tobe protected

> Developing a brandcosts aboutUS$100m




marks in SA, and which will requiretrademarks to be registered within 18months, which will require Cipro to actfaster. Muhlberg says cobranding has be-come a new trend. “For example, in SADiscovery Health and Ster-Kinekor arecobranding. Even the World Cup is aform of cobranding. “It is much cheaperto take a brand from one company toanother. The king of it all is Virgin, andthere’s going to be a lot more of it.”❑ Research — Brand Leadership pridesitself on the quality of its research, whichinforms its branding exercises.

Before moving to Hong Kong recently,Rebecca Roderick, who remains a di-rector of the group, headed the com-pany’s research division. There are fiveprinciples underpinning good research,says Roderick. First, knowledge of thelandscape, including the business dy-namics, environmental issues and ap-propriate legislation, must be established.Second, there must be access to qualityinformation — internally and externally.

Third, the latenttruths about abusiness must beuncovered. Forexample, saysRoderick, whenBrand Leader-ship was workingon the Unisabranding, “weidentified 12 fac-tors that encour-aged students togo to a university.This knowledgethen needed tobe translated intobrand communi-cation.”

Fourth, shesays, is analysis— a sharp inter-pretation of theinformation gath-ered. Prof Roger Sinclair Not just tangible assets can be sold



Fifth and most importantly in the re-search cycle, comes the courage and con-viction of the client to implementchanges. This goes back to the firstprinciple. “If you have understanding andinsight upfront, you can deliver winningsolutions at the end.”

Fellow director of research InnoLiphoko says research “allows you to lookat brands from different angles. Unlessyou understand what drives your con-sumers, the emotional ties that bindthem to your brand, and the particularneed your brand fulfils, you will notsucceed.”❑ Brand valuation — the “need for brandvaluation is relatively new”, says ProfRoger Sinclair, director in charge of val-uation in the group. “It was only in the1980s that businesses began to recognisethat if they bought companies, theybought more than the tangible assets.There are things you can’t drop on thefloor, including licences, legacies andleadership.”

He says research done in the US eightyears ago suggested that it cost aboutUS$100m to invent, create and launch abrand, and the chances of that brandsucceeding were only one in four.

At first, conventional accounting meth-ods couldn’t deal with brand valuation.Last year, a new international accountingstandard, IFRS3, was introduced, whichregularises the purchase of brands andenables companies to place brands ontheir balance sheets.

In 1999 Sinclair launched an inter-nationally acclaimed, Web-based brandvaluation methodology called Brandmet-rics. The model has four inputs —finance, dilution, brand category and


research — and its complexity lies in thealgorithm that joins the four.

Using this method, Sinclair has con-ducted some world firsts in brand val-uation, including valuing SA as a brand afew years ago, which estimated the brandvalue for the country at about $55bn.❑ PR and branding — Tendayi Gwatajoined the group in 2006 to head thegroup’s PR offering, which focuses onreputation management.

Gwata, who has international jour-nalistic experience and local PR expe-rience, met Ikalafeng when they wereboth working on the National Ports Au-thority’s brand. She says they soon bothrealised that it “makes sense to worktogether. If you’re going to build a brand,you need PR support, and the best en-vironment is a partnership that under-stands the brand positioning and theintended relationships with the variousstakeholders of the brand.”

Gwata says: “PR is a key driver forbuilding the reputation and relationshipswith the brand.”

She says that PR today is about “build-ing the reputation of the brand and therelationships with the various stakehold-ers, with the brand as an anchor.”

Henk van den Berg has just steppedinto the role of executive creative directorfor The Identity Practice, the group’screative offering.

Van den Berg says: “Creating brandidentity requires a strong foundation ofstrategy and an understanding of con-sumer insights to create meaningfulbrands.” ■

Tendayi Gwata If you’re going tobuild a brand, you need PR support

Special Report written by Tara TurkingtonAdvertising executive: Andile Kona

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