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
“I would buy again”
Customer
Loyalty
and
Advocacy
“I would highly recommend”
“I would travel farther”
“I would wait longer”
“I would pay more”
Premium
Pricing
“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.”
Investing In Their Brands
Top 20 Global Marketers
2003 Expenditures
In Measured Media
(In Billions)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Procter & Gamble
Unilever
General Motors
Toyota Motor Corp.
Ford
Time Warner
Daimler Chrysler
L’Oreal
Nestlé
Sony Corp.
Source: Advertising Age, November 8, 2004
$5,762
3,540
3,412
2,669
2,537
2,378
2,230
2,180
1,737
1,684
2003 Expenditures
In Measured Media
(In Billions)
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Walt Disney
Nissan
Johnson & Johnson
Honda
Altria
Volkswagen
PepsiCo
Pfizer
McDonald’s
Coca-Cola Co.
$1,680
1,674
1,665
1,542
1,514
1,435
1,255
1,229
1,213
1,195
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 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)
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
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
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
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
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
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
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
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
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
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 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
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
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
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
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
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
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
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
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
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
Step 1
Determine
Governance
Structure
Step 2
Define
the
Brand’s
Identity
Step 3
Establish
a
Distinctive
Positioning
Step 4
Align
All
Touchpoints
Step 5
Measure
and
Report
Progress
Step 6
Step 1
Establish Brand
Strategy and
Architecture
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
Company Type Affects Branding
Approach
Branded House
House of Brands
Uses single master
brand
Multiple stand-alone
brands
Spans multiple
products and services
No visible connection
of brands to parent
Descriptive names
used with master brand
Hybrid Brand House
Combines use of
master brand with
secondary brands
Stand-alone brands
used strategically
Examples
Branded House
House of Brands
Virgin
• Virgin Airways
• Virgin Cola
• Virgin Records
Proctor & Gamble
• Tide
• Crest
• Pampers
BMW
• X5
• 325
• 525
Unilever
• AXE
• Dove
• Ponds
Hybrid Brand House
IBM Thinkpad
SONY Walkman
Apple ipod
Touchstone Pictures
PlayStation
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
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.
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
Step 2
Determ
ine
Govern
ance
Structu
re
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
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
Step 3
Define
the
Brand’s
Identity
Provides organizational touchstone, both internally and
externally
Basis for strategic roadmap guiding brand positioning,
communications, brand extendibility
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.
All Brands Must Articulate Their Brand
Essence And Manage It Consistently
= Performance, passion for driving
= Authentic, real, original
= Wholesome family entertainment
= Innovation
= Ubiquity
Step 4
Establi
sh a
Distinc
tive
Positio
ning
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
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
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
Merrill Lynch Bull in Russia
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.
Challenges in Achieving Local Relevance:
Merrill Lynch
Merrill Lynch Bull in Russia
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
Challenges in Achieving Local Relevance:
Allstate
Making an American Brand
Relevant in China
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.
Challenges in Achieving Local Relevance:
Coca-Cola
Keeping The Classic Look
and Taste Worldwide
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.
Challenges in Achieving Local Relevance:
Coca-Cola
Keeping The Classic Look
and Taste Worldwide
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.
Challenges in Achieving Local Relevance:
Mitsubishi “Pajero”
Averting a Branding Disaster
in the Americas
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
Step 5
Align
All
Touchp
oints
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 6
Measure
and Report
Progress
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
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