Developing Global Brands
by
Professor Dominique Turpin
President of IMD
London, July 2011
© IMD International, Lausanne, Switzerland; 2011 - Not be used or reproduced without permission.
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Guide
Why is (global)
brands management
so critical today?
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What are the key
ingredients of great
(global) brands?
How to manage a
(global) brand
portfolio?
Guide
Why Do We Need A Global Brand Strategy?
“The marketing battle is increasingly a battle of brands, a
competition for brand dominance...
… “Businesses and investors recognize brands as the
company’s most valuable assets.”
… “It is increasingly more important to own markets than
factories. The only way to own markets is to own marketdominant brands”
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Global Brand Strategy: Objectives & Benefits
Objectives:
To differentiate ourselves from the competition
To simplify consumers’ choice
To establish a clear identity and a unique top-of-mind position
To minimize price competition
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Global Brand Strategy: Objectives & Benefits
Benefits:
Top of mind for new business
Repeated experience
Price premium
Good reputation and benefit of the doubt
Opportunities to attract more talents
Increased value of the company
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A Brand Is More Than A Product!
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Products
Brands
Made in the factory
Made in consumer’s mind
Can be copied
Is unique and proprietary
Have functional value
Have functional and
emotional value
Can become outdated
Can become timeless
Guide
A Brand Is More Than A Product!
A380
Advice & Information
Baggage
Handlers
Fax
on
board
Meals
Planes
Documentation
Air
(Tickets,
Boarding
“The Transportation
passes) Singapore
Frequent
Flyer
Program
Girl”
Lounges
from
A to B
Reservation
Ground
Transportation
Assistance
Crew & Problem
Solving
Entertainment
Amenitis'
(pillows,
blankets)
Computer /
Internet
Servers
Alliance Network
What's next
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Ex: The Singapore Airlines Brand
Global Brands from China
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Global Brands from Latin America
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A Brand Is Much More Than The Core Product
Product
Services
Features
Delivery
Performance Installations
Conformance Consulting
Safety
Training
Reliability
Etc.
Packaging
Name (i.e LC1 vs. Actimel)
Etc.
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Image
People
Symbol
Atmosphere
Media
Events
Etc.
Competence
Courtesy
Credibility
Reliability
Responsiveness
Emotions
Etc.
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What is a Strong Brand?
A strong brand does not depict a physical product
but a RELATIONSHIP with the customer that
results into TRUST!
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Brands, Power Brands, Icons Brands
“Brands with clearly differentiated features and
benefits, exceptional attachment, loyalty and
engagement!”
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From Products to Power Brands to Icon/Passion Brands
Icon
(Exceptional attachment, loyalty, engagement)
Respect
(Great respect, warmth, excitement)
Relationship
(Solid Trust, credibility, empathy)
Acquaintance
(Significant familiarity, reliability, heritage)
Awareness
(Some recognition, understanding, knowledge)
The Brand Ladder (Source: Dominique Turpin, IMD, 2004)
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The Ultimate Test of Passion Brands?
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Brand: The Ultimate Differentiation Factor
“Products and features can be copied,
but brand image is yours and only yours!
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Global brands:
Your ultimate
differentation!
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What are the key
ingredients of great
(global) brands?
How to manage
a (global) brand
portfolio?
Guide
Seven Building Blocks of a Successful Global Brand Strategy
1. Establish a clear identity/philosophy
2. Commit to continuous support
3. Be consistent in your communications
4. Keep in touch with customers and staff
5. Defend differentiation proactively
6. Watch out for complacency
7. Turn employees into brand ambassadors
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1. Great global brands are generally very focused
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1. Great global brands are generally very focused
A clear product/ concept focus
An answer to a universal human “headache”
A meaningful and differentiated value proposition
A clear positioning and/or corporate philosophy
Easy to communicate internally and externally
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1. Establish a Clear Identity With A Simple Brand Strategy
Brand Character
Artists
Creative,
Liberated
Brand Purpose
Great design, easy to use, fun!
Source: Adapted from Nirmalya Kumar
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Brand Values
California
Non-conformist
Fun
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1. Establish a Clear Identity With A Simple Brand Strategy
Brand Values
Brand Character
“The Swiss Who
Shake the World”
“Young at Heart”
For Who?
From Whom?
Brand Purpose
“Fun, Fashionable, Sporty”
Why?
Source: Adapted from Nirmalya Kumar
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1. Establish a Clear Identity With A Simple Brand Strategy
Brand Character
The most fanatical riders
(For whom?)
Source: Adapted from Nirmalya Kumar
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Brand Values
The most ambitious Italian
motorbike manufacturer
(From whom?)
Brand Purpose
Premium performance and timeless Italian style
(For what?)
2. Commit to Continuous Support… in terms of Money,
Technology, Talents…
“When business is good, it pays to advertise
When business is bad, you've got to advertise!”
Konosuke Matsushita, Founder of Matsushita Electric Industrial
(recently renamed Panasonic)
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3. Be Consistent Over Time!
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Consistency, Consistency, Consistency…
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1978
1979
1979
1981
1981
Nitani Hideaki
Eto Toshiya
Aida Yusuke
Goto Sumio
Ishimaru Hiroshi
1981
1982
1983
1984
1985
Agawa Hiroyuki
Yamamoto Kansai
Kanze Hideo
Yura Takuya
Sawai Hideo
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Consistency, Consistency, Consistency…
In building our brand, we learnt the following three
ingredients are absolutely essential:
1. A consistent and relevant message to consumers,
2. A consistent transmission of this message across
all channels of communications with consumers
(advertising, web, catalogues, brochures, packaging,
exhibititions, products, etc.),
3. That the message to consumers is consistent over
time!
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4. Keep in Touch With Customers & Staff!
Conceived vs. Perceived Value
Your brand isn’t what you say you are...
Your brand is what your customers and
your own people THINK you are!
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4. Keep in Touch With Customers! Conceived vs. Perceived
Values
Conceived value in HQ:
“Lexus is a better car than Mercedes-Benz”
Perceived value by German consumers (… and some staff members)
“M-Benz is a better car than Lexus¨!”
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5. Defend Your Differentiation Proactively!
Gillette continues to grow by constantly raising the
standard of product performance with respect to a single
benefit (ever-closer shaves)
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5. Defend Your Differentiation Proactively!
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5. Defend Your Differentiation Proactively!
dominique.turpin@imd.ch
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5. Defend Your Differentiation Proactively!
dominique.turpin@imd.ch
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5. Defend Your Differentiation Proactively!
Research Results from leading FMCG companies*
Abba Seafood
Cadbury Schweppes
Kimberly Clark
Reckitt & Colman
Antonio Puig
Campina Melkunie
Mars
Sara Lee
Bacardi Martini
Chanel
McCain Foods
SCA Hygiene
Balhsen
Douwe Egberts
Merloni
Smiths Foods Group
Barilla
Electrolux
Nestlé
Unilever Foods
Beiersdrof AG
Fort James
P&G
Unilever HPCE
Bitburger Brauerei
Heineken
Pampryl
Waterford Crystal
Bourjois
Henkel
Pernod Ricard
Wella AG
Bristol Myers
ICI Paints
Philips Lighting
*Source: Kamran Kashani, IMD; PIMS Europe; the European Brand Association
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5. Defend Your Differentiation Proactively! IT PAYS OFF!!!!
More innovative brands
outgrow the rest
20%
Sales Growth 18%
Share Growth
Share 15%
and
Sales 10%
Growth
(%) 5% 3%
0%
30%
5%
Sales
Growth
(%) 10%
Higher
0%
8%
1%
2%
Lower
Similar
1. Innovation
*Source: Kamran Kashani, IMD
Brands with higher
perceived value spend
relatively less on advertising
6
Sales Growth
Share Growth
4 Share
20%
% Sales from New Products
Relative to Competitors
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Growth is a function of
consumer value creation
Change
(points)
2
No Change Small
Large
0
Improvement in
Perceived Consumer Value
2. Enhancement of
Consumer Value
400
Index: 300
Advertising/
Sales 200
Revenue
100
0
253
165
100
Third
Second
Most
or
preference preferred
lower
Starting Brand Preference
3. Improved
Economics
Guide
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6. Turn Every Employee Into An AMBASSADOR of Your Brand
« What is key to the intangible benefits of
the brand? The daily behavior of our staff
and all who represent the face of Shell to
customers and other stakeholders!»
Venetia Howes, Global Brands Strategy Manager for Shell International
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7. Watch Out For Complacency!
The weakening of a strong brand is frequently self-inflicted by:
- Not respecting the inherent values of the brand
- Jeopardizing the long term with the short term
- Not creating measurable perceived value
- Poor communication and execution of the brand strategy
dominique.turpin@imd.ch
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Global Brands:
Your Ultimate
Differentation Tool
dominique.turpin@imd.ch
KSFs of a Successful
(Global) Brand Strategy:
Simple, Meaningful,
Distinctive,Credible &
Consistent!
How to manage a
(Global) brand
portfolio?
Guide
High perceived value
Strategy is About Making Some Tough Choices!
“Niche”
Outperforming
A problem!
“Value”
Low delivered costs
Source: X. Gilbert and P. Strebel
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Can You Have One Brand to Serve Several Strategies?
High perceived value
Hi
Niche
Outperforming
ACME
Middle of
the Road
Value
Low
Hi
Source: X. Gilbert and P. Strebel
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Low delivered costs
Low
One Can Overcome This Challenge By Managing A
Portfolio of Brands…
Example: The Volkswagen Group
High perceived value
Hi
Low
Hi
Source: Adapted from X. Gilbert and P. Strebel
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Low delivered costs
Low
Guide
Guide
… And Therefore Thinking Segments!
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Each Chosen Strategy Requires Different Emphasis And
“KSFs” In The Business Process
Purchasing
Niche
Outperformer
Middle
of the
road
Value
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Only best
is good
enough
State of the art
materials and
components
Just-in-time,
partnerships,
suppliers’
dependency
Last drop of
subcontr’s blood
squeeze again,
then shift ...
Design and
Engineering
Luxury,
comfort,
performance
Total
adequacy
to image
Manufacturing
Marketing
Distribution
and Sales
By hand,
customized,
“perfect”
Prestige,
snob-appeal,
high price
Red carpet,
exclusive,
downtown
Service
Discreet,
excellent,
not cheap ...
Short-series
superb
finish
Performance,
image, in
special media
Selective,
fan clubs,
rallies etc...
Reliability,
flexibility,
tight costing,
for robots
Robotics
1000/day +,
multiple equipment options...
Comfort,
safety,
performance,
style ...
Coverage,
middle-class,
efficient,
easy credit
Regular,
10,000 km,
warranties,
no surprises
Lowest cost
no frills, few
options,
economy
100% robots or
low labour cost
countries, huge
quantities
“Lowest price
tag in town”,
high mileage,
low upkeep
Everywhere and
cheap, “popular”
or anti-snob
snobbism
Minimal
maintenance
Profits only
through volume
Qualified,
efficient,
not cheap...
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When Do Multiple Brands Make Sense?
most attractive
may be attractive
Single brand
Umbrella brand
with sub-brands
high
Cost of
maintaining
brands **
Do nothing !
(Costs of change probably
exceed benefits)
Multiple
independent brands
low
low
Potential for generating value
through segmentation *
high
* Discrete customer segments, multiple channels, clearly differentiated value proposition, low break-even volumes
** Minimum level of marketing spending, channel costs, product supply costs (including R&D)
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At The Same Time, Multiple Brands Add To Management
Complexity
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High perceived value
Some Best Practices in Global Brand Portfolio Management:
Low delivered costs
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The Swatch Group Manages The Business System for Consistency
The Business System in the Watch Industry
Design
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Parts
Design
Assembly
Parts
Assembly
Marketing
Customer
Target
Marketing
Distribution
Few
Tailored
By hand
"Made
in Geneva"
Very
Selective
“The Elite"
Many
Few,
Standardized
Automated
"Made in
Switzerland
Intensive
"Young
at Heart"
Limited
Many,
Standardized
Outsourced
for economies
of scale
“Made for
the Stars”
Selective
"ABC"
Guide
Three Key Learning Points From Swatch (and others):
1. Think customer segments
2. Clearly differentiate brands with distinctive value propositions
3. Manage the business system consistently
dominique.turpin@imd.ch
Guide
Global Brands:
Your Ultimate
Differentation Tool!
dominique.turpin@imd.ch
KSFs of a Successful
Global Brand Strategy:
Meaningful, Distinctive,
Simple, Credible &
Consistent!
Managing a (Global)
Brand Portfolio Implies
Tough Choices And
Discipline in Execution!