Cisco Case Study (incomplete)

Well Planned and Executed Brand Repositioning Help Cisco Increase Brand Value and Sales
Closely aligned with corporate strategy, regular investments in brand positioning or repositioning constantly renew the brand’s relevance and maintain its connection with customers
Network Supplier with Premier Technology Products
Secure Network and Products to Safeguard Your Online Experience
Brand Positioning Evolution
Communications Convergence Products and Solutions to Improve Everyday Life
The Self-Defending Network2
(2003-2004)
Welcome to the
Human Network3
(2006-2007)
The Human
Network Effect4
(2008-2009)
+
Established Cisco’s relevance in a time with intensified concerns about Internet security
Built an emotional connection with consumers by establishing relevance in the world of new Internet technologies
Media Spend:
$31M
Media Spend:
$50M-$100M
Media Spend5:
Est. $80M

2004: Revenue Up $3.2B (17%)
2004: Brand Value6 Grew $159M (ROI > 500%; reversed the downward trend from 2001-2003)
2007: Revenue Up $6.4B (23%)
2007: Brand Value6 Grew $1.5B (ROI > 1500%)

CAGR (2003-2006): 11%
CAGR (2006-2008): 12%
Source:
Cisco PR 1998 and Bizjournal (http://www.bizjournals.com/sanjose/stories/1998/08/24/story8.html)
Effie Awards Winner Case Study 2004
Effie Awards Winner Case Study 2008; CNET news (http://news.cnet.com/2100-1036_3-6123103.html)
Cisco PR 2008
AdWeek news 2008 (http://www.adweek.com/aw/content_display/news/e3i991563eaf426e2a24c48b9dba7250136
Brand Value tracked by Interbrand, 2001-2008 (http://www.interbrand.com/best_global_brands.aspx)

Branding Campaigns Lifted Cisco’s Brand Equity, Helped Gain Shares and Grow Sales
The Self-Defending Network (2003-2004)
Media Expenditure: $31M
Business Challenge: Security breaches have become a key issue in IT decision making process by 2003. Cisco wants to establish credibility in the IT security space and gain market share in the highly competitive yet fragmented security products market.
Target Audience: Technology decision maker and business decision maker
Creative Strategy: Cisco’s approach to security was about protecting people. Creatives were focused on untold human stories around security: business travelers, telecommuters, executives and their kids.
Media Strategy: Media was focused on engaging audience in lifestyle, entertainment, and business environments rather than technology-centric vehicles.
Brand Value: $15.9B in 2004 (up $159M from prior year and overturned the negative trend since 2001)
Brand Measure:

Strengthened overall brand recognition and exceeded Cisco average on core brand measures including “is technologically innovative”, “is a technology leader”, “offers products that help your organization stay competitive”
Firmly positioned Cisco into the security space by lifting IT security brand consideration by 54% among tech audience in 6 months since campaign launch

Market Share:

Cisco gained 7 points of share in overall security market ($175M of business in Q1 2004)
All of Cisco’s security products market share increased including VPN, firewall applications, secure routers, and intrusion detection products.

Revenue Growth: Overall revenue grew 17% as compared to -0.2% from a year ago
Welcome to the Human Network (2006-2007)
Media Expenditure: $50-$100M
Business Challenge: Cisco wants to reposition itself from an industrial brand to a communications “convergence” brand at the forefront of a new generation of internet technologies.
Creative Strategy: The Internet is a network of people, not of computers. Creatives were focused on telling inspiring stories of people living life better together and how Cisco as an Internet company can play a vital role to their online experience
Media Strategy: Media was focused on lifestyle and entertainment with both traditional mass marketing vehicles (TV, print) and online presence in new media (blog, community posting, viral videos).
Brand Value: $19.1B in 2007 (up $1.56B in a year!)
Brand Measure:

833% increase in positive PR mentions for Cisco
Perception of Cisco as a technology leader among technical decision makers jumped 80%
Cisco became number 9 in Barron’s most respected companies in the world (from #30 a year ago)
Familiarity and favorability ratings among technical decision makers increased

Market Share:

Strengthened dominant share in core market (72% in switching; 80% in routers)
Expanded share in newer products (41% in web conferencing; 21% in video conferencing; 6% in messaging applications)

Revenue Growth: Overall revenue grew 23% in 2007 (compared to 15% in 2006)

Rapid growth in core products (routers by $855M; switches by $1.1B)
Growth in critical newer products (e.g. video systems by $1.2B; home networking by $240M; security products by $240M)

Results
Results

Paying Off Brand’s Promises by Aligning Brand with Overall Corporate Strategy is Critical
The success of Cisco’s brand repositioning relies heavily on its close alignment with overall corporate strategy including acquisitions, product positioning, channel/alliance strategy and sales enablement, which synergistically “pays off” Cisco’s brand promises to its customers.
In Dec 2006, Cisco’s CEO John Chambers said on Cisco’s forward-looking vision and strategy,
“Cisco is in the midst of a market inflection point that is changing the face of networking… It is no longer about the physical network alone but the human network based on the fundamental belief that when you connect people, you change things for the better.”
In 2003, security breaches
affected 90% of US businesses and cost $17 billion annually. As a leader in information technology, Cisco wanted to gain a more sizeable piece of the burgeoning market.
Starting 2004, a new generation of Internet technologies (Web 2.0) that aims to facilitate communication and collaboration has emerged. While growth in the enterprise market starts to slow, Cisco looked into expansion in the consumer market.
In light of the global economic downturn, the second phase of the Human Network campaign is focused on highlighting tangible business and social benefits of using the network.
Changing Business Background
The Self-Defending Network Campaign launches at the end of 2003
Welcome to the Human Network Campaign launches
at the end of 2006
Human Network Effect (Part II of the Human Network Campaign) launches at the end of 2008
Major Branding Campaigns
1
2
3
4
6
5
8
9
10
11
7
9. August 08: Announced expansion of global strategic partnership with HP to focus on unified communications
(UC). The relationship includes joint initiatives in the realm of sales enablement, marketing activities, and demand generation.
5. Aug 06: Acquired Arroyo, a provider of on-demand TV
1. Oct 02-Jan 03: Acquired Psionic and Okena, provider of intrusion detection and network security software
3. March 04: Acquired Riverhead, a company that provides technology that protects against Distributed Denial of Service ("DDoS") attacks
7. Oct 06: Introduced TelePresence, a product that provides experience of in-person meetings to physically remote participants
Key Acquisition, Product, and Partnership Milestones
11. Jan 09: Offers EOS social networking platform to media and entertainment companies
2. March 03: Acquired Linksys (supplier of home and small office network products)
6. Oct 06: Acquired Orative, a company that provides applications to extend UC portfolio to mobile devices
4. July 05: Acquired KiSS Technology to develop network entertainment products for consumers
8. March 07: Acquired WebEx, a provider of web conferencing software
10. Sept 08: Acquired Jabber, a provider of presence and messaging software

Appendix: How to Valuate a Brand
Most common brand valuations are driven by both brand equity measures and financial measures.
Five steps to valuate a brand1
Step 1:
Market Segmentation
The brand’s influence on customer choices vary among market segments, and its value need to be assessed individually in each segment.
Step 2:
Financial Analysis
Identify and forecast revenues and earnings from intangibles for each segment determined in Step 1.
Step 3:
Demand Analysis
Identify the drivers of demand for the branded business and determine what proportion of intangible earnings is attributable to the brand.
Step 4: Competitive Benchmarking
Determine the competitive strengths and weaknesses of the brand to derive the specific brand discount rate that reflects the risk profile of its expected future earnings.
Step 5: Brand Value Calculation
Derive the net present value (NPV) of the forecasted brand earnings, discounted by the brand discount rate.
Source:
Interbrand, Brand Valuation, A Chapter from Brands and Branding, An Economist Book, April 2004

Appendix: Interbrand’s Top Global Brands in 2008