What is a Brand? The American Marketing Association defined brand as “ A name, term, symbol, or design, or combination of these, which is intended to identify goods or services of one seller or group of sellers and to differentiate them from those of competitors.”
Why Do People Want Brands? We don’t buy products only for what they ARE: a car as a means of transportation or a watch as a way to measure time. We don’t buy products only for what they HAVE: a car with 5 seats and 200 HP or a watch with 99.999% precision. We buy products for what they MEAN to us and to others: a Volvo (safety) or a BMW (driving pleasure), a Swatch (informal, youthful) or a Rolex (lavish luxury). Inspired from Levy: Symbols for Sale
To stand out and differentiate the company in a crowded and noisy global marketplace!
To become better at expressing who the company is compared with others!
To permit premium pricing of products, services, concepts!
To promote trust and credibility in the relationships with key stakeholders!
TO BUILD CORPORATE REPUTATION!
LEGO Group: Family Owned Through Three Generations Since 1932 1932 1949
LEGO Group Had its Own Financial Crisis! Net profit development 1998 - 2008
Trying to do Too Much! LEGO MEDIA Virtual and real LEGO Studios Robolab eLAB Play sets LEGOLAND Billund Windsor Carlsbad Günzburg Mindstorms Intelligent brick 1998 Serengeti Belville DUPLO dolls Watches LEGO stores Imagination centers Kids Wear Books Magazines Book club LEGO TV Learning concepts Theme parks Dolls Lifestyle Paradisa Fiction Technic Control Center Mini Figure Figure based play Robotics Bricks Wheels Motion Motor Sub brands/ Play themes LEGO System 1955 LEGO Technic 1979 LEGO DUPLO 1969 1949 1960 1970 1980 1990 2000 Wooden toys 1932 2001 1958 1978 Software Construction based play Retail TV, characters and publishing From Hatch & Schultz 2008: The history of LEGO brand extensions 1932-2003 . Source: The LEGO Group 2003
LEGO Turn-around: In Need of a New Vision for the Company LEGO Aligning Vision with Culture and Image: Rethinking the LEGO Identity Based on Hatch & Schultz 2008 From closed and hostile to open and engaging From shadow market to innovative lead users From mass market to premium niche High commitment among employees, but no shared direction Dusty, non-cool old fashioned image and confusion about vision for the brand Distance between experienced culture and brand promises Organization Culture Stakeholder Images Strategic Vision?
Who am I? What do others think about me? Two Basic Identity Questions: The “I” The “me” According to psychologist G.H. Mead, identity is formed in conversation between the “I” and the “me”.
Identity Conversation Applied to Organizations Organizational ”I” Grounded in how we do things around here (Organizational Culture) Organizational ”Me” Grounded in images projected onto us by others (Organizational Image) What do they think of us? Who are we?
Identity expresses cultural understandings Identity mirrors the images of others Reflecting embeds identity in culture Expressed identity leaves impressions on others Respond Listen Organizational Identity is a Dynamic Conversation between Culture(s) and Images Culture Image Identity
Two common identity problems . . . Narcissism Hyper-Adaptation Self-seduction Loss of culture CULTURE IMAGES IDENTITY Source: Hatch & Schultz (2002)
Brand identity Organization Culture Stakeholder Images Strategic Vision Corporate Brand Misalignment When globally generated expectations collide with local executions and ambitions When local stakeholders’ mistrust managements aspirations for the company When local employees conduct their own inde-pendent execution of the strategic direction
Time Organization-wide implementation Cycle 1: STATING WHO YOU ARE Balancing past and future: LEGO Values & Reason for Being Cycle 2: ORGANIZING FOR YOUR BRAND Align organizational structures & processes Establish platform company Need to Agree on vision Need for organization Wide execution Need to involve all internal subcultures Need to generate local brand ownership Need for cross-functional knowledge Cycle 3: INVOLVING YOUR STAKEHOLDERS Listen to internal & external stakeholders Brand School & Consumer involvement Cycle 4: INTEGRATING Align company wide brand behavior Cycle 1 TRACK REPUTATION & BRAND PERFORMANCE: ONGOING
Time Cycle 1: STATING WHO YOU ARE Brand identity balancing past and future Need to agree on vision Organization-wide implementation The Cycles of Corporate Branding
Second Round: Reconnecting with Past Slide med skiltet Carpenter founder handcarved motto: Only the Best is Good Enough
Time Organization-wide implementation Cycle 2: ORGANIZING Align organizational structures, processes and relationships New business model Need for organization wide execution The Cycles of Corporate Branding at LEGO Group
From Product Brands to Corporate Branding? Product A Brand? From …. … .To Marketing Commu. A Consumer Experience A Product B Marketing Commu. B Consumer Experience B Brand Values Products Distribu-tion Innova-tion Marke- ting People Consumer experience
Reorganizing For Corporate Brand: Fighting Turf wars & Rethink Functions Marketing & Sales Business Development Corporate Communication Innovation Simplify & reduce number of agencies From patchwork to network Deliberate stakeholder relations Translating the LEGO Values to people People & Culture LEGO Brand School Revitalize core values New user involvement Clean up global mess Refocus Business lines New Direct Business Unit
Reorganize Management team ” Rightsize ” Management team Platform Company: Closedown product lines and focus on profitable core products Rethink licensing & interplay with movies To ”Right-sizing” & Platform Company
Time Organization-wide implementation Need to involve all subcultures Cycle 3: INVOLVING STAKEHOLDERS Listen to internal & external stakeholders The Cycles of Corporate Branding
“ Making It Happen!” 3000 employes attend LEGO Brand School
LEGO Employees Seeing Brand Challenges Source: LEGO Group There are too many skeletons in the closet Misunderstanding the customers’ needs Too much income from one source? We have some unpredictable trade partners The competition killed our Cash cow We got hung up by the safety net
Photo from LEGO BrickFest 2005 by Yun Mi Antorini Involving Consumer Communities: BrickFest 2005
Time Organization-wide implementation Need to generate local brand ownership Cycle 4: INTEGRATING Align brand behavior across the company and balance global coherence with local adaptation & stakeholder involvement The Cycles of Corporate Branding
Active user involvement in brand innovation Too many unrelated brand extensions Turf wars and brand fragmentation 1998 2000 2002 2004 2006 200x NEXT UP: GLOBAL GROWTH Restate LEGO core values Translate values into everyday practices Redefine brand essence as ‘ Systematic Creativity’ A new business model: perfor-mance driven vision tied to core identity Moving Towards Stronger Alignment
LEGO Turn-around as Aligning Stakeholders LEGO Group Aligning the Corporate Brand Based on Hatch & Schultz 2008 Revitalizing culture balancing stability and change Reinventing “cool” balancing control and sharing of brand ideas Redefiningvision balancing past and future Mobilizing employee ideas and commitment Listening to fans, consumers and retailers when redefining vision Creating engagement between employees and consumers Organization Culture Stakeholder Images Strategic Vision