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Branding Coherence

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Achieving consistency in a world of complexity. …

Achieving consistency in a world of complexity.
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  • 1. Branding CoherenceAchieving consistency in a world ofcomplexityWhite paper | August 2012
  • 2. Shikatani Lacroix is a leading branding and design firm located inToronto, Canada. The company wins commissions from all aroundthe world, across CPG, retail and service industries, helpingclients achieve success within their operating markets. It doesthis by enabling its clients’ brands to better connect withconsumers through a variety of core services including corporateidentity, naming and communication, brand experience,packaging, retail, wayfinding and product design.About the AuthorJean-Pierre Lacroix, R.G.D., President and Founder ofShikatani LacroixJean-Pierre (JP) Lacroix provides leadership and direction to hisfirm, which was founded in 1990. He has spent the last 30 yearshelping organizations better connect their brands withconsumers in ways that impact the overall performance of theirbusiness. Mr. Lacroix was the first to coin and trademark thestatement “The Blink Factor” in 1990, which today is acornerstone principle of how brands succeed in themarketplace. JP has authored several papers, has been quotedin numerous branding and design articles, and in 2001 he co-authored the book “The Business of Graphic Design” which hassold over 10,000 copies. JP can be reached atjplacroix@sld.com and you can follow his thought leadershipwebinars at: www.sldesignlounge.com.Other Articles and BooksBelonging Experiences: Designing Engaged BrandsBusiness of Graphic DesignWhite paper | August 2012 | Brand Coherence | 1
  • 3. Yesterday’s marketing speakBuzz marketing. Bricks and clicks. Shopper marketing. Thereis not a month that goes by that a new marketing term isn’tbeing introduced or featured as the next best thing fororganizations. Most of these, however, focus on marketing andnot on the holistic impact of brand alignment required toensure a higher level of brand engagement. Thediscussion in marketing boardrooms for the pastseveral years has focused around a theme thatallows companies to create loyal customers throughan integrated brand engagement strategy:multichannel marketing. My curiosity piqued whenmultichannel marketing was first mentioned and mysearch on Google took me to an article by ClickZ in2003, which introduced the concept as part of itsimpact on cannibalizing conventional media due thegrowth of online marketing.Today, multichannel has evolved. It consists of leveragingmany different marketing channels, such as a retail store, aweb site, a mail-order catalogue, or direct, personalcommunications by letter, email or text message, to reachcustomers. The premise of the concept was to make itconvenient for consumers to buy from retailers in whateverway is most appropriate to them.White paper | August 2012 | Brand Coherence | 2
  • 4. The level of complexity in a global marketplace, and thedegree of sophistication in its response, has significantlyaccelerated since multichannel marketing was first introduced.This has allowed companies to create a finer, targetedapproach as they engage through certain channels, variousdemographic segments of the market, or different socio-economic groups of consumers.Although there remains a high level of interest in and usage ofmultichannel marketing, the concept as an overall approachlacks depth in global infrastructure and brand alignment totruly deliver long-term results. To meet these requirements wehave defined a new marketing approach: brand coherence.The commoditization law of physicsSimilar to a gravitational force, industries, irrespective of thesector, cannot easily overcome the pull of commoditization.As categories mature, and innovation becomes a riskierbusiness, features that differentiate one product from anotherare reduced to table stakes and organizations must rethinktheir value proposition and portfolio structure.As a recent Booz&Co article by Samrat Sharma confirmed,scale and capabilities remain important for emerging marketsbut not so in mature, established countries. The maturemarket opportunity of guaranteed growth by marketing to themiddle class, currently a shrinking opportunity, or findinggreater efficiencies is no longer a lucrative, sustainablebusiness. Many organizations are being forced to rethink theirgo-to-market approaches.White paper | August 2012 | Brand Coherence | 3“Our recentresearch hasdemonstrated thatcompanies withgreater portfoliocoherence (that is,those whosebusiness units havemutually reinforcingcapabilities thatdistinguish thecompany as awhole) outperformtheir peers in termsof operatingmargin.”Traci Entel, Booz&Co.,presentation on The Power ofthe Coherence Premium
  • 5. The emergence of brand coherenceGiants within their industries, Kraft, IBM, and PG are realizingthat being big is not necessarily better and have started toreview their portfolio structure to identify competencies thatthey can better leverage.In 2011, Kraft announced the formation of two divisions, onethat will be focused on the global snack foods business andthe other on North American grocery businesses likebeverages and cheese. Based on current revenues, the snacksbusiness will comprise about two-thirds of the current Kraftbusiness and it will have considerably more growth than themore stable (yet slow-growing) grocery businesses.Kraft’s strategy follows other large CPG companies such asPepsiCo which, in late 1995, split its restaurant and food/beverage business into two separate companies and then in2010, split its beverage from its food brands into two separatebusiness units.In both of these cases, the organizations have structured theirbusinesses to allow for greater focus on their core capabilities,allowing each to gain growth by filling the white spaces andfinding greater operational efficiencies. More importantly, byseparating companies along competencies and evolvingcapabilities beyond operational efficiencies, organizationshave realized greater market share growth and revenues. Thisalignment behind very focused value propositions is one ofthe fundamental principles in creating strong brandcoherence.White paper | August 2012 | Brand Coherence | 4
  • 6. Brand coherence is the end result of aligning all of the brand’smoments of truth and offerings behind one central valueproposition which is clearly articulated as part of a brand card.Allowing each facet of the organization – manufacturing,distribution, marketing, operations, finance – to clearlyunderstand the value of the brand andalign its culture to deliver the brand’spromise ensures strong brandcoherence.To better understand the fundamentalprinciples of brand coherence, weneed to define what supports itsmomentum and direction. We havemirrored this coherence model and itsprinciples to an infinity loop that startsand ends with Brand Equity. The loopconsists of two equal interconnectionloops, one which establishes thefoundation for Brand Equity while theother allows this equity to be personified and executed in acontinuous never ending process with each marketingelement of the Brand Coherence Loop helping buildconsistent brand equity.White paper | August 2012 | Brand Coherence | 5Brand Coherence Infinity LoopFoundationMomentum
  • 7. In order to ensure the brand has a coherent strategy, it muststart by clearly understanding its core equities that supportthe brand pillars, or more importantly, the timeless challengethe brand must overcome for itself and its core target group.Based on clearly defined brand pillars that help support abrand’s long-term equities, the loop takes into account brandvalue – the one key attribute that allows the brand todifferentiate itself from competitors Brand value is anchoredin both cognitive and emotive dimensions.Leveraging a clearly defined brand value, the loop takes intoconsideration the brand persona in addition to the position,mission and vision. Ultimately these steps within the BrandCoherence Infinity Loop lead back to Brand Equity, which issummarized in a single brand essence statement.Only once the Brand Equity is clearly defined can the brandcraft an effective brand identity that assists the varioussupporting elements of the brand. From the development of astrong and differentiated brand identity, which would includea corporate identity, company culture, supporting proof-points and a visual manifestation of the brand, the processwould move to the next level, namely the brand portfolio.This stage would consist of clearly aligning the variousofferings within the portfolio to the Brand Equity, allowingeither a restructuring of the portfolio or the elimination ofcertain products that do not support its value proposition.White paper | August 2012 | Brand Coherence | 6
  • 8. Only when the brand identity and portfolio have been clearlydefined can the brand consider marketing and supportinitiatives, such as social media, online, and offline marketingactivities. This leads to the in-store presence, better known asshopper marketing. Each one of the elements of the BrandCoherence Infinity Loop helps build and support the brand’sequity.In isolation, each of these elements haslittle power to grow brand equity, butcombined they have the cumulative impactto shape the brand in a highly competitivemarketplace. Brand coherence requiresthat each element of the brand equity issupported and aligned to a single andcompelling value proposition and essence.Only when all of these elements work inunison can the marketing initiatives sustaingrowth and margin for the brand.White paper | August 2012 | Brand Coherence | 7
  • 9. The two sides of the brand coherence pendulumFor the past 37 years, I have witnessed and been party toorganizations that align all of their divisions behind onecentral value proposition, which results in significant marketclout and efficiencies that allow for a higher margin and returnon investments.Most large multinational companies have implemented suchinitiatives. Today, this is the trend for the banking, technologyand consumer packaged goods industry. In the majority ofcases, the integration behind one brand message and valueproposition is primarily driven by the need to consolidate thevarious business acquisitions that fueled the organization’sgrowth.However, once organizations have optimized their operationalefficiencies and market share consolidation, they tend toexplore counter coherent strategies that focus on regionalnuances and local marketing initiatives. The risk and challengefor these brands is to ensure that their market-share growthinitiatives align with a coherent brand strategy that ensures astrong foundation and minimizes the risk of brand equityerosion. We have identified a branding model that goesbeyond finding efficiencies to clearly identify the differentfactors that support a coherent strategy.White paper | August 2012 | Brand Coherence | 8
  • 10. ConclusionAs industries mature and the differentiation between offeringsnarrow, organizations are reconsidering the impact and costof divergent branding strategies. In addition, as brandsbecome global, there will be greater pressure in defining whatmakes the brand unique across cultures, countries andlanguages. Defining a Brand Coherent strategy will enableorganizations to evolve their need for consistency andefficiency by linking each of their initiatives towards buildingstronger brand equity. Ultimately, Brand Coherence is aboutthe power of focus and the ability to leverage scale through aconsistent and highly integrated branding strategy.The Brand Coherence Infinity Loop will also alloworganizations to evolve their multi-channel strategies toensure that their products remain relevant, meaningful anddifferentiated, irrespective of the individual brand’s momentsof truth. The process must start with a strong foundation, thereason for the brand’s existence, and be supported by themomentum to enable marketing and executional initiatives. Awell-defined brand position and essence that is poorlyexecuted has the same inherit long-term drawbacks as apoorly positioned brand that is well executed. Neither is aviable option for sustainable growth, greater margin andbrand affinity.White paper | August 2012 | Brand Coherence | 9
  • 11. For more information, contact:Jean-Pierre Lacroix, PresidentShikatani Lacroix387 Richmond Street EastToronto, OntarioM5A 1P6Telephone: 416-367-1999Email: jplacroix@sld.comWhite paper | August 2012 | Brand Coherence | 10

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