What Is A Brand?

“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

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

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.”

CustomerLoyalty

andAdvocacy

PremiumPricing

“I would buy again”

“I would highly recommend”

“I would travel farther”

“I would wait longer”

“I would pay more”

Investing In Their BrandsTop 20 Global Marketers

2003 Expenditures In Measured Media

(In Billions)

2003 Expenditures In Measured Media

(In Billions)

1. Procter & Gamble $5,762 11. Walt Disney $1,680

2. Unilever 3,540 12. Nissan 1,674

3. General Motors 3,412 13. Johnson & Johnson 1,665

4. Toyota Motor Corp. 2,669 14. Honda 1,542

5. Ford 2,537 15. Altria 1,514

6. Time Warner 2,378 16. Volkswagen 1,435

7. Daimler Chrysler 2,230 17. PepsiCo 1,255

8. L’Oreal 2,180 18. Pfizer 1,229

9. Nestlé 1,737 19. McDonald’s 1,213

10. Sony Corp. 1,684 20. Coca-Cola Co. 1,195Source: Advertising Age, November 8, 2004

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

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

“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

Economies of scale across multiple markets

Uniformity of image

Responsiveness to global customers

The laws of Branding

The law of expansionthe 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

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)

Contractiona brand becomes stronger when you narrow its focus

Publicitythe 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

Advertisingonce 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

Worda 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”

Credentialscrucial ingredient in the success of any brand is its claim

to authenticityCustomers 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

QualityQuality is important but brands are not built by quality

aloneDoes 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

Categorya 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

Namea brand is nothing more than a name

Xerox

Mitsubishi (corporartion, electric, motors, heavy indus., chemical, oil, materials, estate, construction etc)

Extensionsthe easiest way to destroy a brand is put its name on

everything90% 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?

Fellowshipto build the category a brand should welcome other

brandsWhen 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

Genericone 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)

Companybrands 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 brandswhat 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

Siblingsthere 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)

Shapea 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)

Coloruse 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

Bordersa 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

Consistencya 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.

Changebrands 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

Mortalityno 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)

Singularitymost 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

Six Steps to Managing Global Brands for Success

Establish Brand

Strategy and Architecture

Determine Governance

Structure

Definethe

Brand’s Identity

Establisha

Distinctive Positioning

AlignAll

Touchpoints

Measureand

Report Progress

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

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

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

House of BrandsBranded House Hybrid Brand House

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

House of BrandsBranded House Hybrid Brand House

Alternative Global Branding Approaches

Examples

Master brand SONY, BMW, Virgin, IBM, McDonalds, Starbucks, Dell

Endorser An IBM Company, IBM Thinkpad

Ingredient Intel Inside, Powered by HP

Stand-alone Touchstone Pictures, Tide, Crest, PlayStation

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.

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

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

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

Provides organizational touchstone, both internally and externally

Basis for strategic roadmap guiding brand positioning, communications, brand extendibility

Step 3 Define the Brand’sIdentity

Brand Identity Provides Strategic Direction

Brand EssenceSummary of the brand’s identity — the heart and soul of the brand.

Core IdentityCore values, key competencies and associations that remain consistent across products, markets and through time.

Extended IdentityElements that provide texture and completeness; personality, organization, product characteristics.

All Brands Must Articulate Their Brand Essence And Manage It Consistently

= Performance, passion for driving

= Authentic, real, original

= Wholesome family entertainment

= Innovation

= Ubiquity

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

Brand Essence• Performance• Passion for driving

Core Identity Elements • Heritage/engineering• Quality• Styling• Logo

Extended Identity Elements • Fun• Youthful• Nimble• Status

“The UltimateDriving Machine”

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

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

Problem“Tagline “Tradition of Trust” did not work in the society where banks are not trusted.

SolutionAdapt the tagline to position ML as an educator whose experience deserves trust.

Merrill Lynch Bull in Russia

Challenges in Achieving Local Relevance: Merrill Lynch

ProblemRussians saw nothing but food in the realistic depiction of Merrill Lynch “Bull” symbol

SolutionA highly stylized version of the logo was developed

Merrill Lynch Bull in Russia

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 BrandRelevant in China

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

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”

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

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 5Align All Touchpoints

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 Measureand ReportProgress

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