Brand Masterclass Week Two

Slide 1: Session Two: How are brands built? Managing brand meanings. Idris Mootee CEO Idea Couture Inc. Sept 8 2007

Slide 2: All brand names mentioned and logos included in this presentation are registered trademarks of their respective owners and are legally protected. Their inclusion in this presentation is only for the purpose of illustration, criticism and analysis. Disclosure: Starbucks, Nike, Kitchen Aid, Jordan, Virgin, BMW, Nintendo, Crate & Barrel are clients of Blast Radius Inc. which I was formerly employed as Senior VP and Chief Strategist. The mentioning of these names are solely for academic purposes and should not be considered as case studies. The material here was prepared solely with public information supported by the author’s analysis during the writing of the book 60-Minute Brand Strategist which was published in four languages. Other brand names including Levis, Apple, Mercedes Benz, Sony, Coca Cola, Macys, Target, Daimler Chrysler, Citibank mentioned here were at some point a client of mine in association with previous firms under which I was employed or co-founded. No confidential or proprietary information were used or mentioned here. This series of presentation is designed to provide relevant and up-to-date information for brand and marketing practitioners and it is not to be used in marketing or rendering of professional services. Some rights reserved. Idris Mootee 2001-2007. Presentation can be freely embedded in any website or blog under creative commons license with prohibition of any commercial use.

Slide 3: “We spent eight months and a lot of energy on a brand strategy and all that’s changed is the logo and tagline.” - CEO Financial Services Company

Slide 4: “We hired a brand consultancy and developed a grand brand strategy. Our ad agency went on to create and produce an ad campaign that stepped way ahead of our capability to deliver the brand promise. We ended up with customer disappointment, internal conflicts and brand credibility erosion.” - CEO Utilities Company

Slide 5: “From a brand management perspective, there are just too any cooks in the kitchen. It is one thing to allow consumers in participating in meaning creation. It is quite another to bring in everyone to let them loose in the crazy world of consumer generated content.” - CMO Consumer Goods Company

Slide 6: “Many companies are simply not ready to deal with or anticipate identity obsolescence, much as they anticipate the obsolescence of products lines or business models.” - CMO Media Companies

Slide 7: Management do not understand why we need to have a brand strategy. Sales and marketing Cannot justify the aren’t reading the cost for brand re- same book, let positioning. alone the same Where’s the ROI? page. Management thinks branding is just another logo with a new tag line. Brand vision and company reality do not match.

Slide 8: Best Practices + Strategic Outsourcing + ERP = ? Not only are brands similar, even companies are now more or less the same or nearly identical. Sameless is the worst thing you can have for marketing.

Slide 9: The very technologies that make it faster and cheaper to innovate also help us to imitate. The competitive pace switching back and froth from innovation to imitation. The increasing difficulty in differentiating between products, services and the speed with which competitors take up innovations will assist in the rise and rise of the brand.

Slide 10: In a world that is predisposed to sameness, there are few things in life more satisfying than building brands that disrupts predisposition. Some develop brands that move market share. Some develop brands that win advertising award. Some create brands that build culture. Some do all.

Slide 11: If you are planning for one year, grow sales. If you are planning for three years, grow channel. If you are planning for business that is build-to- last, grow a brand.

Slide 12: The traditional thinking around branding was to endow a product or service with unique characteristics through the creative use of name, slogan, packaging and advertising. However, in a world where there is a muddle of images and messages, it is extremely difficult for a brand to rise above the noise to be noticed or remembered.

Slide 13: The romanticized view of advertising is that it can change what people think about your brand; however, the realistic view is that advertising does not change what people think about your brand (which has always been very hard), but only has them think about your brand at all.

Slide 14: Too much advertising too little meanings? Customer Value Customer Value Brand Meaning Brand Meaning Brand Advertising Brand Advertising

Slide 15: The rationale behind branding is all about creating positive differentiation that in consequence leading to a dominant or at least profitable brand shares. Brand marketers must deliver tangibles and/or intangibles that differentiate a brand among others. This differentiation not only needs to be perceived, but also valued.

Slide 16: QUESTION: How do you create and deliver intangible benefits for brands?

Slide 17: Brand has meanings beyond functionality that exists in people's minds. Part art, part science, brand is the intangible yet visceral impact of a person's subjective experience with the product, the personal memories and cultural associations that orbit around it. Lyle's Golden Syrup was named as Britain's oldest brand, with its green and gold packaging having remained almost unchanged since 1885.

Slide 18: … brand is the difference between a bottle of soda and a bottle of Coke……

Slide 19: … brand is the difference between a mp3 player and an iPod ….

Slide 20: … brand is the difference between a cup of coffee and a cup of Starbucks….

Slide 21: … brand is the difference between a luxury car and a Mercedes Benz…..

Slide 22: … brand is the difference between a designer’s hand bag and a Hermes Birkin……..

Slide 23: Psychological differential are often more resilient than functional differential advantages. Intangible emotional associations are difficult to copy: once an emotional territory is occupied by a well known brand, it is more difficult to displace than a brand with a functional claim that can be beaten.

Slide 24: “Globalization is an influential driver behind global brand development and in particular, there is a direct connection between technology trends and global brand building that should not be underestimated.” - John Quelch Harvard Business School

Slide 25: Social Networks The Expanded Brandsphere Mobile Googlism Video Location Based Service

Slide 26: “You can say the right thing about a product, and nobody will listen. You've got to say it in such a way that people feel it in their gut. Because if they don't feel it, nothing will happen.” - The Late Bill Bernbach Founder DDB

Slide 27: A good brand strategy is about finding ways to tap into emotions and connect with other. That’s when they that transcend product. A brand is a metaphorical story that connects with something very deep — a fundamental appreciation of mythology. Stories create the emotional context people need to engage themselves in a larger experience.

Slide 28: “In technocratic and colorless times, brands bring warmth, familiarity and trust.” - Peter Brabeck Nestle

Slide 29: QUESTION: Although it is logical to assume that brand marketers see the main objective of branding is to create high involvement situations. Indeed if the branding exercise fails to deliver a relevant and valued differentiation for its targeted segments, then can it be argued that its efforts are unsuccessful?

Slide 30: QUESTION: What if consumers were not in anyway prepared to pay for that differentiating activity by way of perceiving or appreciating any differences between brands in certain categories?

Slide 31: ….. then there would be no economic justification for brand marketers to invest in branding exercises. In a product category, if differences are not valued, buyers tend to discriminate between products or brands on the bases of price and availability.

Slide 32: QUESTION: Does it really make sense to invest in building brands in low involvement markets? Or is it even possible to generate high brand involvement in the face of low category involvement?

Slide 33: Here is a case that needs to be made: a good branding strategy should be capable of completely transforming categories to the extent that the brand effectively creates new, or at least sub- categories.

Slide 34: Can you name a few brands that have been successful in transforming their categories or inventing new ones?

Slide 35: Brands that transform categories……

Slide 36: Consumers often don’t buy products, they buy the personalities associated with those products. Big K cola and Coke are equal in taste tests … but not in market share. Brand personalities help consumers define their own self concepts and express their identities to others. People can find meanings only on those brands with personalities.

Slide 37: Brand personalities help firms differentiate their products from the competition and build brand equity (value). Stand for something or you’ll fall for anything!

Slide 38: QUESTION: How do you create and measure brand personalities?

Slide 39: INFORMATIVE AFFECTIVE Think Feel High Involvement Designers SUV Hand Bag Min Van Personal Plasma TV Cigars Computer Digital Skateboard Perfume Camera Sneakers Spaghetti DVD Player Air Conditioner Tea Bags Low Involvement Diapers Toaster Detergent Milk Bottled Water Paint Pencil Salt HABITUAL SATISFACTION The Involvement Grid

Slide 40: There are voices about the no-brand movement. This anti-brand movement is well-understood. Companies have even been successful in branding commodities such as bricks, paper, chickens, diamonds, milk, salt, sugar, oranges, bananas, microprocessors and even air, water and sand. The question is: What more can you brand?

Slide 41: As long as there are humans, there will be brand marketing. Brand humanizes products and personifies them with distinct personalities and sensibilities to reflect our very own and help products differentiate from the competition.

Slide 42: A quick reminder for us. Brand awareness does not equate = brand differentiation.

Slide 43: QUESTION: What creates brand differentiation?

Slide 44: Most common mistake brand marketers made is they think attitude = behavior. In this case you are confused between “I love you” with “I want you”.

Slide 45: 35 % 19 % Pseudo Die hard YES loyals loyals LOYALTY: Repeat Purchase 42 % 4% (BEHAVIOR) Occasional Potential Impulse loyals NO buying NO YES BRAND EQUITY: I Relate to the Brand (ATTITUDE) Customer loyalty (behavior) might be different from brand image (attitude). Loyalty might be the result of price, or availability, and not of a good relationship with the brand (pseudo loyals). A good relationship with the brand is not always enough to bring loyalty. Customers like the brand, but not its offerings (potential loyals). Source: SONY

Slide 46: QUESTION: Does market leadership = loyalty leadership? If not, then you need to decide which one is your prime branding objectives.

Slide 47: Why do we need a theory for strategic brand management? Because theory is eminently practical. Managers are the world’s most voracious consumer of theories. Every time a brand marketing decision is made, it is usually based on some implicit understanding of what causes what and why. The real problem is they often use a one-size-fits-all theory. There are many ways to build great brands. Here are the four approaches:

Slide 48: planning imageries Branding customer experience Philosophies self-expression

Slide 49: Types of Brand Philosophies Branding by Branding by Self- Branding by Branding by Customer Expression Imageries Planning Experience Louis Vuitton Procter and Gamble Abercrombie & Fitch Starbucks Converse Coca Cola Calvin Klein Tiffany Prada Johnson & Johnson Ralph Lauren Southwest Airline Swatch Nestle BMW Hertz Apple Intel Absolut Disney VW Beetle Gillette Milk Costco Herman Miller Kodak Marlboro Marriott IBM Thinkpad GM Tag Heuer Yahoo

Slide 50: Branding by Planning. Branding is approached as part of a formal planning process. The typical approach includes application of portfolio and product life cycle concepts together with competitive positioning. The information is distilled and analyzed through each individual brand’s performance in terms of market share and margin contribution.

Slide 51: Branding by Planning.

Slide 52: Branding by Imageries. Branding is being approached in a more functional manner. Usually advertising agencies take a leading role and advertising is linked to branding. The levers of brand building consist mainly advertising. Marketers and agencies closely link the brand to advertising creative execution. Sometimes the burden is given to celebrated art directors and photographers.

Slide 53: Branding by Imageries.

Slide 54: Branding by Experience. Companies see customers taking functional benefits, product quality and a positive brand image as a given. What they want is products, services and marketing communications that dazzle their senses, touch their hearts and stimulate their minds. Here the customer becomes the most important part of the brand. Service design and/or usability usually a core part of these experiences.

Slide 55: Branding by Experience.

Slide 56: Branding by Self-Expression. Companies put the role of brand building partially into the hands of customers. Consumers also do not want to use the brand to endorse or reflect his or her personality; rather it contributes to building a personal or individual brand. Users are actively participating in creating meanings for the brand and using it as a symbolic representation of his or her innerself.

Slide 57: Branding by Self-Expression..

Slide 58: “(Customers) are involved with a collectivity of brands so as to benefit from the meanings their add to their lives.” - Susan Fournier Formerly Harvard Business School

Slide 59: QUESTION: If a brand does not have vital consumer meaning, may be it is not worthwhile investing in its leadership financially and organizationally. Does it still justify the enormous financial resources which it will take to build or maintain; nor is it worthwhile living the value relationships which comes out from the branding process.

Slide 60: Ries and Trout suggested that “owning a word in the prospect’s mind” is the most powerful concept. It is when the association is so strong that any word can immediately be linked to a brand. But today’s brands have become very sophisticated. Owning “category words” and “benefit-related words” are not enough; one can easily find themselves under attack from competitors who will try to undermine the association.

Slide 61: The most powerful concept is actually to be able to own a set of values beyond the narrow focus of functional benefits. “Benefit-related” word association is becoming less powerful when those are at par and companies aggressively expand their product range targeting different segments.

Slide 62: Mercedes owns the word “engineering”, BMW owns the word “performance”, and Volvo owns the word “safety” and each of them comfortably occupied those words and their associations until now. But when Mercedes launches the C-series to appeal to the younger segments; BMW launches the highly sophisticated 7 series targeted at those who appreciates state-of-the-art engineering and Volvo revamps its product range and change to a more sporty look suggesting speed, those associations can quickly become quite meaningless

Slide 63: “You can’t survive floating on the tide, assessing the competition, conducting surveys to find out what your customers want right now. What do you want? What do you want to tell the world in the future? What does your company have that will enrich the world? You must believe in that ‘it’ strongly enough to become unique at what you do.” - Jesper Kunde A Unique Moment

Slide 64: “The idea that business is just a numbers affair has always struck me as preposterous. For one thing, I’ve never been particularly good at numbers, but I think I’ve done a reasonable job with feelings. And I’m convinced that it is feelings - and feelings alone - that account for the success of the Virgin brand in all of its myriad forms.” - Richard Branson Virgin Group

Slide 65: A brand is only a trademark without deeper meanings. That’s the most important thing about a brand strategy. Colonization of physical space is now extending to the mental space and happening at an even faster pace.

Slide 66: “We are in the twilight of a society based on data. As information and intelligence become the domain of computers, society will place more value on the one human ability that cannot be automated: emotion. Imagination, myth, ritual rich — the language of emotion — will affect everything from our purchasing decisions to how we work with others. Companies will thrive on the basis of their stories and myths.” - Rolf Jense Copenhagen Institute for Future Studies

Slide 67: “Most people can’t understand what would drive someone to profess his or her loyalty for our brand by tattooing our logo onto his or her body—or heart. My fellow employees and I understand completely. We also understand very clearly that this indescribable passion is a big part of what has driven and will continue to drive our growth.” - Richard Teerlink Harley-Davison

Slide 68: Companies used to be all “product producers” now they all need to become “meaning brokers” Brand Managers should now be Meaning Brokers (BM vs. MB)

Slide 69: CMO should really stand for Chief Meaning Officer

Slide 70: One big question for a brand strategy to answer is to articulate in an authentic manner what does your brand stand for?

Slide 71: So what does your brand stand for? fearless unexpected bold radical dreamer resolute poetic security undaunted classy daring adventurous gentle futuristic individual power passionate unwavering provocative idyllic visionary wild sexy undaunted soulful caring dynamic authentic brave unorthodox daring trustful kind innovative curious human intriguing active uncommon irreverent cool absolute joyful unusual technological fun sensible smart sensuous hopeful

Slide 72: Session two of eight. For notes and discussion visit www.mootee.typepad.com OPEN SOURCE Idris Mootee CEO Idea Couture Inc.