Post on 01-Apr-2015
New Brand v Brand ExtensionThe Costs And The Rewards
Mike Rocha, Managing Director, Brand Finance plc
FDIN: Brand Innovation – Turning Ideas Into ProfitFDIN: Brand Innovation – Turning Ideas Into ProfitThursday 24Thursday 24thth January 2008 January 2008
About Brand Finance
Brand Transactions
Brand Transactions
Value BasedMarketing
Value BasedMarketing
BrandValuation
BrandValuation
‘What is the value of my intangible assets?’
‘What is the value of my intangible assets?’
‘Is it a good deal?’ ‘Can I leverage my intangibles?’
‘Is it a good deal?’ ‘Can I leverage my intangibles?’
‘How can I increase the value of my brands?’
‘How can I increase the value of my brands?’
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About Brand Finance
Where’s the real value in your brand?
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The relentless demand for growth
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The obsessive desire for more
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The unlimited scope of possibility
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The fundamental questions to ask
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Where’s the real value in your brand?
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Many companies have creative ideas, act on them and then measure the impact. Few identify the best opportunities first, and then focus creatively on them.
Most innovation is blind, and therefore fails to deliver the best results. Few companies realise the maximum potential of their brands, their most valuable assets.
The demand for innovation
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Where’s the real value in your brand?
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Brand innovation can take many forms … new markets, new positioning, new audiences, new applications, new identity, new products, new services, new channels, new business models …
The point is to first understand where the value is, in your brand, in your portfolio, in your market (now and in the future). Then focus innovation on unlocking the best value opportunities.
Value innovation has 4 phases
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Concept Zone
Impact Zone
Concept Zone
Creative Zone
Future Zone
Value innovation has 4 phases
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Concept Zone
Impact Zone
Concept Zone
Creative Zone
Future Zone
Where are the best opportunities?
What are the creative possibilities?
Which are thebest innovations?
How much valuewould it create?
Identify markets and and products of most
potential value
Focus creativity where it can have
most impact
More rigorouslyevaluate and connect
the best ideas
Value impactis more measurable
and greater
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Future Zone
Future Zone1
Future Zone: Where are the best opportunities?
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1
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Future Zone: Where are the future opportunities?1
Future Zone: Where are the adjacent markets?1
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Growth
Profit
Analysis could be done for markets, segments, key accounts,brands, categories. products, or channels
Future Zone: Which markets have most potential?
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Hot Spotswhere the newcompetition is
Cool Placeswhere latest
trends emerge
White Spaceswhere nobodyhas ventured
Black Holeswhere oldbrands die
Hot Spotswhere the newcompetition is
Cool Placeswhere latest
trends emerge
White Spaceswhere nobodyhas ventured
Black Holeswhere oldbrands die
Identifying the most profitable opportunities• high growth markets• optimal competitive position• profitable customer segments
1
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Creative Zone
Future Zone
Creative Zone2
Creative Zone: What are all the possibilities?
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2
Creative Zone: Gaining new perspectives
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2
Businessnarrowview
Businessnarrowview
Customerbroader
view
Business Customer
Exploring
Commercialisi
ng
Focusing
Creativity
Openingup
ClosingdownInnovation
Creative Zone: Creatively stretching the possibilities2
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Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
M arketInnovation
Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
ProductInnovation
Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
M arketInnovation
Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
ConceptInnovation
Generate ideasGenerate ideas
O peningup
ProductInnovation
Creative Zone: What are all the possibilities?2
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Concept Zone
Concept Zone
Creative Zone
Future Zone
Concept Zone3
Concept Zone: Which are the best ideas?
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3
Iconicdesign
iPodBrand
U2Vertigo
iTunes
Podcasting
iPodPhone
SpecialEdition
ExclusiveReleases
MusicStore
LegalisingFilesharing
SuccessStory
Apple
Whitecables
ImitationAnd buzz
AdGraphics
60G
Photo
Video
DesperateHousewives
Mini
Shuffle
Nano
Motorola
(RED)
Steve JobsiMac
Concept Zone: Fusing the best ideas together3
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Concept Zone: Shaping new value propositions
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3
Articulating brands throughcompelling propositions• leveraging brand power for customers• maximising value to each segment• optimising price elasticity
Value ofbenefits
to customer
Perceivedworth
relativeto others
Priced
to offervalue formoney
Returnto investors
Value ofbenefits
to customer
Perceivedworth
relativePricedto offer
money”Return
to investors
Value ofbenefits
to customer
Perceivedworth
relativeto others
Priced
to offervalue formoney
Returnto investors
Value ofbenefits
Perceivedvalue
Price
Return
Reducing uncertaintyFor example by• Strong customer loyalty• Long NPD pipeline• Brand extensions
Reducing uncertaintyFor example by• Strong customer loyalty• Long NPD pipeline• Brand extensions
Reducing uncertaintyFor example by• Strong customer loyalty• Long NPD pipeline• Brand extensions
Value to customer
• Perceived by individuals• Relative to alternatives• Relative to cost
Reducing uncertaintyFor example by• Strong customer loyalty• Long NPD pipeline• Brand extensions
Reducing uncertaintyFor example by• Strong customer loyalty• Long NPD pipeline• Brand extensions
Reducing uncertaintyFor example by• Strong customer loyalty• Long NPD pipeline• Brand extensions
Value of customer
• Price less costs of sale• Plus future purchases• Plus efficiency
Colour
Memory
Price
Size
Support
Availability
etc.
ImportancePerception
CompetitivenessCost
Concept Zone: Evaluating how best to deliver them
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3
Extending brands to reach further,faster and more profitably• leveraging power in adjacent markets• licensing and franchising• maximising new profit streams
Core business
model
Useful extension
strategy
Total businessformat
Brandand relatedservices
Products Formats
Locations
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Concept Zone
Impact Zone
Concept Zone
Creative Zone
Future Zone
Impact Zone4
Impact Zone: What will be the impact?4
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Impact Zone: What will be the impact?
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4
Market• Market scope and dynamics
• Size and profitability
Customers• Segments and profitability
• Needs and perceptions
Channels• Distribution channels
• Reach and profitability
Competitors• Direct and indirect
• Positioning and performance
Financials• Revenue, growth, cost trends
• Economic profitability
BusinessCase
Best allocation of budgetsand resources to deliver
short and long-term returns
Best mix channels andcommunication media
to each audience
Clear and compelling business case outlining• Future trends• Creative options and concepts• Resource allocation• Financial impact (scenarios)
$
Today
Short-term revenue and profitability
Longer-term growth and
shareholder value
Impact Zone: What will be the impact?
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4
SEGMENT 1
SEGMENT 2
SEGMENT 3
SEGMENT 4
SEGMENT 5
SEGMENT 6
TOTAL
BRAND
METRICSBrand
Investment
$X
$
$
$
$
$
$
Brand EquityIndex
x
x
x
x
x
x
MarketShare
%
%
%
%
%
%
BrandValue
$200
$
$
$
$
$
$
Brand Investment
$X
$
$
$
$
$
$
Volumes/Revenues
x
x
x
x
x
x
MarketShare
%
%
%
%
%
%
BrandValue
$200
$
$
$
$
$
$
Brand Investment
?
$
$
$
$
$
$
Brand EquityIndex
x
x
x
x
x
x
MarketShare
Y%
%
%
%
%
%
%
BrandValue
$Z
$
$
$
$
$
$
Brand Investment
?
$
$
$
$
$
$
x
x
x
x
x
x
MarketShare
Y%
%
%
%
%
%
%
BrandValue
$300
$
$
$
$
$
$
Base Case Target Scenario
Target Value CreationTarget Brand Investment
Volumes/Revenues
X%£ ££
Impact Zone: What will be the impact?
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4
OriginalValue
FinalValue
Increased Customers
NewChannels
Additional investment
Synergies
£
Incremental value
NewMarkets
Impact Zone: What will be the impact?
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4
Investor RelationsMarketing becomes keypart of analyst briefingsand annual report
Business PerformanceKey reports produced forCEO and directors, drivingpriorities and investment
Personal PerformanceLinked to manager and team’s objectives, KPIs,reviews and compensation
Market researchLinked into ongoing marketresearch tracking program
Financial analysisLinked into ongoing financialsystems and auto-analysis
Articulating the real value of brands and innovation• to the wider business• to finance and the boardroom• to investors and analysts
Unlocking the real value of brands
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Where are the best opportunities?
What are the creative possibilities?
Which are thebest innovations?
How much valuewould it create?
Identify markets and and products of most
potential value
Focus creativity where it can have
most impact
More rigorouslyevaluate and connect
the best ideas
Value impactis more measurable
and greater
Concept Zone
Impact Zone
Concept Zone
Creative Zone
Future Zone
Some Brand Genius clients
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Brand innovation that delivers extraordinary results
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Innovation is relatively easy. But innovation that has real impact, that drives sustained profitable growth, that creates significant value, is much rarer and harder.
So why not focus your creative energy on where it can have most impact - using the fusion of analysis and creativity to drive innovation with extraordinary results?
A couple of ideas we wouldn’t necessarily recommend
Harley Davidson
cake making kit
Evian Water-Filled Bras
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A partnership between Brand Finance and the Genius Works www.brandfinance.comunlocking the real value of your brand www. brandgenius.com