This reflects the current brand architecture The architecture emphasizes the equity of NCR – those equities are an established, old company that makes cash registers NCR doesn’t have credibility in the new economy Given limited budgets, Teradata will get minimal visibility, this minimizes the current Data Warehousing related equities of the brand This option may require the same investment as the other options in order to modify these negative NCR perceptions This NCR masterbrand strategy would create synergies with other corporate NCR marketing and advertising efforts Enables a stronger and more powerful identity and positioning for the Teradata brand Leverages existing equities of the Teradata brand – Data Warehousing – equities that are relevant to NCR’s Data Warehousing strategy NCR as an endorser allows leverage of the financial stability, reliability, and trust associations of NCR This option will require about the same investment than NCR as the driver Teradata does not have high enough awareness or credibility to stand entirely on its own today This option does provide clarity of focus because there are no other brands associated with it This may be the “answer” for the longer term after awareness of Teradata is increased, its image and identity further defined, and its positioning established in the marketplace This option would require a larger investment than the other two options in order to establish the Teradata brand
Relevant Aspects of Corporate & Brand Strategy Brand Architecture Strategic Intent Business Marketing Strategy Marketing Metrics Advertising & Sponsorship Framework Gas, Power & Renewables Chemicals Long-term Retail Framework Integrated Marketing Mix Sponsorship Evaluation Measuring Effectiveness Customer Insight Short-term Retail Framework
BMA Southern California Chapter: Managing Your Brand as an Asset ANDREW FLYNN JULY 18, 2002
The Top Determinants of Brand Strength Customer Loyalty Price Premium “ An increase in customer loyalty of only 5% can lift lifetime profits per customer by as much as 95%” “ In some sectors, an increase of customer loyalty of just 2% is equivalent to a 10% cost reduction” “ Over 50% of customers would be willing to pay 20-25% price premium to the brand that they are most loyal to” “ A 1% increase in brand equity can result in a 1% increase in stock price” “ 50% of customers are willing to try a new product from a preferred brand because of the implied endorsement, credibility and trust.” “ It takes 7 to 10 times the cost and effort to gain a new customer as it does to keep an existing customer” “ I Would Travel Further” “ I Would Pay More” “ I Would Wait Longer”
Connecting the brand vision to a financial growth gap helps demonstrate the importance of bringing it to life 2006 (3.5%) 5-Year CAGR 2001 $430 million $630 million 8% $100 million $100 Million $70 million = Current Business = Acquisitions = New Products = Brand Building
Options to fill the brand-driven growth gap:
Build and leverage your brand more successfully—through strategic line extensions, premium pricing, partnerships, licensing opportunities, etc.
5 Year Growth Gap = $270 million
2. Create an aspirational and relevant Brand Identity Today Future Time Brand And Customer Value Current perceptions of the brand Platform to move the brand along its path to its aspirational identity. Demonstrates the unique and beneficial differentiation of the brand; resonates and is credible with customers. Brand Image Brand Identity Aspirational goal of the brand; Aspirational associations customers should have after repeated exposure to/experiences with the brand. Brand Positioning Brand Positioning Tagline Messages Brand Positioning Touch points
Future-focused, aspirational and provides a vision for the organization to strive for
The emotional link desired between product and customer
Brand Identity will provide…
Organizational touchstone, both internally and externally
The basis for crafting the strategic roadmap, guiding Brand Positioning, Communications, Brand Extendibility and Metrics
Brand Essence Guides internal strategy; summary of the Brand Identity Core Identity Core values, key competencies. Associations that will remain consistent across product, markets and through time. Extended Identity Elements that provide texture and completeness; personality, organization, product characteristics
Virgin’s Brand Identity Brand Identity Essence of the Brand Irreverence Core Identity Elements Innovation Fun & Entertainment Value Service Quality Extended Identity Elements Underdog Personality Richard
Teradata’s Brand Identity To here From here...
Where they were…and where they wanted to go….
Powerful Experienced Commitment to Excellence Personality Simplicity Single view Actionable Information Driving growth Better, faster decisions Symbol
Communicates the elements of the identity that resonate and are most credible with customers
Differentiates and demonstrates competitive advantage
It is the foundation for all external communications
Serves as the platform to move the brand along its path to the aspirational identity
Will evolve over time as the brand is able to deliver on elements of the Brand Identity and as customers’ needs change
Four Fundamentals Of Brand Positioning
Benefits Hierarchy Most meaningful & most difficult to imitate, but hardest to deliver Easiest to deliver, but least meaningful & most easily imitated Functional Benefits Attributes Emotional & Self-Expressive Benefits The emotional & self-expressive benefits customers receive The functional benefits customers receive Features or processes that must be demonstrated to customers
Virgin’s Brand Positioning Extended Identity Elements Core Identity Elements Essence of the Brand
Brand Identity Positioning A Personal Way to Flexibly Shop for Wines at a Great Value “ Wine Buying Like Never Before”
Case Study: Teradata Inputs Testing & Screening Recommended Identity & Positioning Brand Implementation Future Positioning Valued by customers Fit with Teradata Brand Statement Perceptions of Teradata’s ability to deliver Unique among competitors VALUE CREDIBILITY FIT UNIQUENESS Internal Management Interviews Customer & Prospect Interviews - Purchase criteria -Brand perceptions -Ideal experience Analyst Interviews Industry Research Partner/Alliance Interviews
A global Positioning statement can be tailored to support local needs USA Zippo’s Core Global Positioning Statement Zippo’s resilience, ruggedness, and dependability is legendary, and has earned it the continuing respect, confidence, and loyalty of its users. Combined with its classic design, American heritage, and individual sense of style, Zippo has become the quintessential brand for those who demand the perfect flame. GLOBAL Mexico Japan Germany
Sporty and young-at-heart
Patriotic and respectful of American ideals, but not lost in nostalgia or sentimentalism
Is the extension consistent with your longer term brand vision and strategy?
Does the extension actually add value to your brand?
Will you be able to deliver on the branded customer experience?
Is the benefit consistent with your Positioning?
If this extension fails, will it be a major or minor setback for your brand?
Does the extension make sense for all regions?
Brand Extendibility: Critical Questions to Ask
Stronger brands allow for more differentiated product line extensions Office (e.g., Scotch Tape) Transportation Safety (e.g., Reflective Coatings) Industrial (e.g. Abrasives) Health Care (e.g., Surgical Supplies) Beliefs and Values Benefits Attributes High Low Degree of Product Differentiation Level of Brand Meaning Example: Pioneering Innovative Technologies & Products
Brands with lower brand meaning cannot support much extension ?? Beliefs and Values Benefits Attributes High Low Degree of Product Differentiation Level of Brand Meaning Bottled Water Pure Water Example:
Knowing when to extend your brand… Sainsbury’s Bank Faster Chips The Blue Card Consulting X Box Successful Extensions
…and knowing when not to is a key driver of brand success Unsuccessful Extensions Mercedes C-Class Coke Clothes Wine Coolers Mouthwash
Brand extension ideas should be evaluated for fit in all regions USA GLOBAL Germany Japan Mexico GLOBAL Germany Japan Mexico USA USA GLOBAL Germany Japan Mexico USA GLOBAL Germany Japan Mexico Pocket Flashlight Sunglasses Camp Stove Lighter Wand Purchase Interest High Medium Low
The logical, strategic and relational structure for all of the brands in the organization’s brand portfolio
The objective is to maximize clarity , synergy and leverage to maximize customer value and internal efficiencies
Should clarify what role each of your brands and products play in different markets, and may result in a brand rationalization
Brand Architecture is the organizing structure of a brand portfolio – David A. Aaker, Brand Leadership Master brand Subbrands Product brands
The Brand Architecture spectrum A Branded House uses a single Master Brand to span a set of offerings that operate only with descriptive offerings. A House of Brands consists of independent stand-alone brands, each maximizing its impact on the market with little connection to its parent. Significant investment in multiple Brands Build Brand Equity in Master Brand Maximize synergies among business units Target unique & separate customer base Reinforce comprehensive solution focus Key Issues Driving The Spectrum: Sub-Brands Stand-Alone Branded House House of Brands
A flexible architecture can be used to address local differences
The Sony brand system uses the Sony brand in a variety of ways, in different markets, to target specific customers with unique value propositions
Endorser Ingredient Driver Stand-Alone Corporate Play Station and Columbia Tri-Star are not visibly connected to Sony, but many consumers know about the link. This shadow endorsement provides positive associations, but allows the strong brands to stand on their own The ProAudio brand augments the Sony brand by communicating cutting edge technology across multiple Sony Electronics product lines Endorser brands usually represent organizations, rather than products, and provide credibility to the offering. Since the Sony brand is somewhat insulated from the product brand, poor performance of Metreon is unlikely to affect the Sony brand A driver brand has the primary responsibility for a purchase decision and owns the customer’s brand experience. Sony uses their master brand with a descriptive, “Pictures,” to drive the film division Sony chooses a flexible architecture and leverages their corporate brand in several different ways
Teradata’s Brand Architecture NCR brand is tied to cash registers and has limited credibility in DW space. Leading with NCR also limits the positive equities of the Teradata brand NCR Teradata Teradata as the driving brand with continued endorsement by the NCR brand leverages the positive equities of both brands Teradata A division of NCR Teradata The Teradata brand awareness is not broad enough to stand on its own
College/ MBA Recruiting Company Alumni Vendors/ Suppliers Analysts Annual Shareholder Meeting Annual Report Internal Newsletters Employees
7. Consistently deliver on your Brand Contract
A Brand Contract includes all the promises that the brand makes to its customers. Once you have identified and evaluated critical touchpoints, ensure that you have an action plan to deliver on your Brand Contract.
Understand the specifics of the Brand Contract from your customers’ perspective .
Translate the specifics of the brand into product, service and delivery standards that employees can understand and technology can fulfill.
Fulfill the “positive” expectations of the Brand Contract to develop a more lasting, powerful brand . Uncover and address the “negative” expectations of the Brand Contract to improve and transform perceptions of the brand.
Uphold the Brand Contract or risk undermining the brand and losing trust from customers.
Deliver on the Brand Contract consistently through all touch points
The result of NOT delivering on your Brand Contract Brand Contract
Consistent, fast, friendly service
Fresh, tasty food
Family fun and safe
Wall Street Journal , July 16 th - cites a University of Michigan study on customer service that found McDonald’s ranked among the poorest-performers relative to customer satisfaction.
“ on any given day, 11 % of McDonald’s customers are dissatisfied with their visit”
Nearly 70% of the dissatisfied customers are further dissatisfied with the way their complaint was handled
Over half of all dissatisfied customers reduce their visits to McDonald’s and tell up to 10 others about their unsatisfactory experience.
The article quantified the financial losses tied to poor customer service as potentially costing McDonald’s $750 million annually.
What do you expect from a visit at McDonald’s? What do you experience from a visit at McDonald’s?
A company’s primary goal should be global brand leadership, not a global brand
Effective Global Brand Management Share Insights and Best Practices Across Countries Assign Responsibility for Cross-Country Synergy Execute Brilliant Brand-Building Programs Support a Global Brand Planning Process
Companies use different methods for encouraging sharing of best practices and brand insights
Holds a global meeting at its headquarters every quarter to spark internal community spirit, provide education regarding the direction of the company, and rally associates around the brand
Senior management prefaces internal newsletters and status reports with brand vision
Employees who demonstrate the company’s core values receive company-wide recognition through reward programs such as the highly acclaimed Chairman’s Award
Actively use intranet to share best practices
Provides complete “Brand Book” and “Brand Execution Guidelines”
Global Brand Director frequently travels to educate, learn, and share
Bayer Self Testing Segment has an inconsistent global brand structure
Product oriented company; lacks umbrella brand
No senior management support; no internal communication
Brand does not tie its diabetes offerings together, resonate with consumers, or differentiate from competitors
There are varying degrees of centralization of brand management Options for Global Brand Management 1. Single, Unified Global Brands & Positionings, w/ Regional Variances 2. Regional Brands w/ Common Umbrella Positionings, & Regional Autonomy 3. Distinct Global Brand Postionings, w/ Regional Brand Autonomy 4. Common Global Brand-Building Platforms (products, sales force, marcom), Distinct Brands by Price Point 5. Shared Brand Management Processes, Tools & Knowledge Management Examples
Assimilate the brand strategy within the organization:
Utilize a communications framework to increase support for the change
Select appropriate vehicles for communicating with and educating employees
Track specific brand metrics ROBI Metrics ROBI SM Measurement Analysis Decision Making Benchmarking Diagnosing Allocating Resources Compensating Employees Informing Markets Setting Future Goals
There is only one kind of valuable brand metric – one that drives to a business action Business Action Touchpoint Metrics Metrics that diagnose the brand’s performance across the touchpoints of the brand-customer relationship. Metrics that diagnosis the brand’s impact on the business’ performance. Strategic Metrics (Impact)
The foundation for successful internal brand development is assimilating it into the culture
As employee support for change increases, the intensity and the difficulty of activities intended to drive change also increases
“ Believing It” “ Believing It” Contact Awareness Understanding Ready to Defend Ready to Promote Cultural “ Hearing It” Phase Phase “ Living It” Phase Acceptance Conceptual Superficial Emotional & Personal Personalize Contact Awareness Understanding Ready to Defend Ready to Promote Utilize & Internalize Cultural Experience Degree of Support for Change Time “ Hearing It” Phase Phase “ Living It” Employee Motivation and Morale Acceptance Conceptual Superficial Emotional & Personal Personalize Passionate Advocacy
A plan for implementing change enables a company to build a brand-based culture Develop Strategy Build a Foundation Implement Cultural Change
Define Company’s Internal Audience Segmentation
Develop Internal Cultural Identity
Develop detailed 18-Month Assimilation Road Map
Create Success Metrics
Develop Materials for Workshops
Conduct Workshops and Train the Trainers
Identify Key Vehicles for Implementation
Prioritize and Schedule for Implementation
Assess need for comp system overhauls
Conduct Training/ Workshops with Employees in All Regions
Use Communications to Educate, Motivate and Internalize Brand
What Impact Does This Approach Have on Brand Asset Management?
Objectivity through measurement
Unique and valued brand
What Impact Does This Approach Have on Brand Asset Management? M anagement guidelines O rganizational alignment R ealized synergies E xperience based F ocused resources O bjectivity through measurement C ustomer driven U nique and valued brand S tronger relationships
BMA Southern California Chapter: Managing Your Brand as an Asset ANDREW FLYNN JULY 18, 2002