Managing Global Brands for Economic Prosperity

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What Is A Brand?: 

What Is A Brand?

Slide2: 

“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

Slide3: 

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

Slide4: 

Determinants of Brand Strength “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.” Customer Loyalty and Advocacy Premium Pricing “I would buy again” “I would highly recommend” “I would travel farther” “I would wait longer” “I would pay more”

Investing In Their Brands: 

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

Slide6: 

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

The Role of Marketing: 

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

Slide8: 

“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

The Allure of Global Brands: 

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

The laws of Branding: 

The laws of Branding

The law of expansion the power of a brand is inversely proportional to its scope: 

The law of expansion the 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

Contraction a 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) Contraction a brand becomes stronger when you narrow its focus

Publicity the birth of a brand is achieved with publicity not advertising: 

Publicity the 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

Advertising once born a brand needs advertising to stay healthy: 

Advertising once 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

Word a brand should strive to own a word in the mind of consumer: 

Word a 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”

Credentials crucial ingredient in the success of any brand is its claim to authenticity: 

Credentials crucial 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

Quality Quality is important but brands are not built by quality alone: 

Quality Quality 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

Category a leading brand should promote the category not the brand: 

Category a 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

Name a brand is nothing more than a name: 

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

Extensions the easiest way to destroy a brand is put its name on everything: 

Extensions the 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?

Fellowship to build the category a brand should welcome other brands: 

Fellowship to 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

Generic one of the fastest routes to failure: give a generic name: 

Generic one 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)

Company brands and companies: there is a difference: 

Company brands 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

Sub brands what branding builds, sub branding can destroy: 

Sub brands what 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

Siblings there is a time and place to launch a second brand: 

Siblings there 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)

Shape a brand’s logo should be designed to fit the eyes: 

Shape a 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)

Color use a color that is opposite of the major competitor: 

Color use 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

Borders a brand should know no borders: 

Borders a 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

Consistency a brand is not built overnight: 

Consistency a 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.

Change brands can be changed, only infrequently and very carefully: 

Change brands 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

Mortality no brand will live for ever: 

Mortality no 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)

Singularity most important aspect of a brand is its single-mindedness: 

Singularity most 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

Managing Global Brands For Success: 

Managing Global Brands For Success

Six Steps to Managing Global Brands for Success: 

Six Steps to Managing Global Brands for Success Establish Brand Strategy and Architecture Determine Governance Structure Define the Brand’s Identity Establish a Distinctive Positioning Align All Touchpoints Measure and Report Progress Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

Slide35: 

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 Step 1 Establish Brand Strategy and Architecture

Company Type Affects Branding Approach: 

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

Examples: 

Examples Virgin Virgin Airways Virgin Cola Virgin Records BMW X5 325 525 IBM Thinkpad SONY Walkman Apple ipod Touchstone Pictures PlayStation Proctor & Gamble Tide Crest Pampers Unilever AXE Dove Ponds

Alternative Global Branding Approaches: 

Alternative Global Branding Approaches

Slide39: 

Profile of the Walt Disney Company’s Branding 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 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.

Slide40: 

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 Step 2 Determine Governance Structure

Slide41: 

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

Core Problems: 

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

Slide43: 

Provides organizational touchstone, both internally and externally Basis for strategic roadmap guiding brand positioning, communications, brand extendibility Step 3 Define the Brand’s Identity

Brand Identity Provides Strategic Direction: 

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.

Slide45: 

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

Slide46: 

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 Step 4 Establish a Distinctive Positioning

BMW’s Brand Positioning: 

BMW’s Brand Positioning Brand Essence Performance Passion for driving Core Identity Elements Heritage/engineering Quality Styling Logo Extended Identity Elements Fun Youthful Nimble Status “The Ultimate Driving Machine”

Positioning Challenges: 

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

Slide49: 

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

Challenges in Achieving Local Relevance: Merrill Lynch: 

Challenges in Achieving Local Relevance: Merrill Lynch 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. Merrill Lynch Bull in Russia

Challenges in Achieving Local Relevance: Merrill Lynch: 

Challenges in Achieving Local Relevance: Merrill Lynch Problem Russians saw nothing but food in the realistic depiction of Merrill Lynch “Bull” symbol Solution A highly stylized version of the logo was developed Merrill Lynch Bull in Russia

Challenges in Achieving Local Relevance: Allstate: 

Challenges in Achieving Local Relevance: Allstate Taking into account China’s “one-child” population control policy, the familiar Allstate “good hands” symbol (which depicted a typical two-child American family) was modified to reflect the reality of consumers’ lives in China. Making an American Brand Relevant in China

Challenges in Achieving Local Relevance: Coca-Cola: 

Challenges in Achieving Local Relevance: Coca-Cola When Coca-Cola was first introduced into the Chinese market, Chinese characters selected sounded like Coca-Cola but actually meant, “bite the wax tadpole.” In Russian, “enjoy” was changed to “drink,” because “enjoy” has a particular sensual connotation, in that language, that doesn’t apply to soft drinks. Keeping The Classic Look and Taste Worldwide

Challenges in Achieving Local Relevance: Coca-Cola: 

Challenges in Achieving Local Relevance: Coca-Cola For all non-Roman alphabets — such as Arabic, Cyrillic, Greek, and many others, unique, proprietary Coca-Cola™ typefaces were created that are both culturally appropriate and in sync with the company’s global image. Keeping The Classic Look and Taste Worldwide

Challenges in Achieving Local Relevance: Mitsubishi “Pajero”: 

Challenges in Achieving Local Relevance: Mitsubishi “Pajero” Several years ago, Mitsubishi planned to introduce its popular European SUV, the “Pajero,” in North and South America Although the word “pajero” carries no negative connotations in the Castilian Spanish spoken in parts of Europe, in Latin American slang the term has a seriously derogatory sexual meaning The vehicle was renamed and released in the Americas as the “Montero” — averting a potential global branding disaster Averting a Branding Disaster in the Americas

Slide57: 

Every touchpoint with customers or prospects is an opportunity to reinforce the brand’s position and core messages everywhere the brand is available. Critical to understand and control all touchpoints across the entire customer experience — from the pre-purchase, to purchase, to post-purchase experience. Given instantaneous availability of information and communications, news of a superior customer experience will travel fast — as will news of a bad experience or product. Step 5 Align All Touchpoints

Slide58: 

Create an overarching dashboard on the strength and vitality of the brand relative to competitors in each market Measure interaction with brand at each touchpoint Assess premium brand is capable of commanding. Gauge level of preference and loyalty for brand Reward and recognize marketplace successes Share results across markets and regularly with senior management Refine strategies and set goals based on findings Step 6 Measure and Report Progress

Slide59: 

Advice Be wary of brand extensions Seek local market input — get out of the ivory tower No single approach is right in all instances Ensure employees are immersed in your brand and understand their obligations Share best practices and insights across markets Align management with your brand goals Strategy is about making choices Intensely focus on execution Never underestimate the power of local competitors