Its mf 2012 symposium brand presentation manfredo 8.12
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  • Explanation of the methodologyThe methodology employed in the BrandFinance® Global 500 uses a discounted cash flow (DCF) technique to discount estimated future royalties, at an appropriate discount rate, to arrive at a net present value (NPV) of the trademark and associated intellectual property: the brand value.Five Steps - Royalty Relief Valuation1. Determine forecast revenuesDetermine future revenues attributable to the brand over a five year explicit forecast period. This is done by referencing historic trends, market growth estimates, competitive forces, analyst projections and company forecasts.2. Assess the Brand StrengthDetermine the strength of the brand using the ßrandßeta® Index.3. Establish Royalty RateReview comparable licensing agreements. Analyse margins and value drivers. Establish average royalty rate range for relevant sector. Apply ßrandßeta® Index to royalty rate range to determine royalty rate for the brand.4. Determine the Discount RateDetermine discount rate to calculate the net present value (‘NPV’) of future brand earnings (accounting for the time value of money and the associated risk). 5. Brand Valuation CalculationThe NPV of post-tax royalties equals the brand value.Royalty Relief approachThe Royalty Relief approach is based on the assumption that if a company did not own any trademarks it would need to license them from a third party trademark owner instead. Ownership therefore ‘relieves’ the company from paying a license fee (the royalty) for the use of the third party trademarksThe Royalty Relief method involves estimating likely future sales, applying an appropriate royalty rate to them and then discounting estimated future, post-tax royalties, to arrive at a Net Present Value (NPV). This is held to represent the brand value.Brand Finance uses the Royalty Relief methodology for three reasons:Firstly, it is the approach that is most recognised by technical authorities worldwide and favoured by accounting, tax and legal users because it calculates brand values by reference to comparable, third-party transactions.Secondly, it ties back to the commercial reality of brands - their ability to command a premium in an arm’s length transaction.Finally, because it can be performed on the basis of publicly available financial information.Brand ratingsThese are calculated using Brand Finance's ßrandßeta® analysis which benchmarks the strength, risk and potential of a brand, relative to its competitors, on a scale ranging from AAA to D. It is conceptually similar to a credit rating. The data used to calculate the ratings comes from various sources including Bloomberg annual reports and Brand Finance research. Brand ratings definitions:AAA -- Extremely strongAA -- Very strongA -- StrongBBB-B -- AverageCCC-C -- WeakDDD-D -- FailingValuation date: All brand values in the report are for the year ending December 31, 2011.

Transcript

  • 1. Branding and Marketing IT: Take control of your brand: If you don’t, others will! Joel A Manfredo Managing Director, CIO Practice Acies Consulting Corp. 6-Nov-2012
  • 2. AGENDA Background and IT’s risk of irrelevance Brand Background •What is a brand? •The world’s most powerful brands IT •Brand blunders •Why branding is important What to do? •Where do you start? •Generic approach – Sandra Selllani •IT specific approach – Gartner strategies in different markets Example •County of Orange Conclusions and Questions & Answers
  • 3. Background… The Story: OverviewEnvironment, Goals and Results: How: Organization: Combination: 1. A culture built on Heroics 1. Leadership 2. Bad relationship w/ vendor (expiring K) 2. Soft skills introduction 3. Siloed organization 3. Sustained ―drumbeat‖ 3. Assigning blame 4. The persuader 4. Resistance to change 5. ITSM principles 5. No priorities Method: Goals: 1. Plan 2. Implement 1. GET BETTER 3. Absorb 2. GET TRANSPARENT 4. Measure 3. GET CUSTOMERS Results: 1. Moved to top 10% against benchmark 2. Reduced Budget 27% 3. Increased customer satisfaction 16% 4. Reduced SLA exceptions by 77% 5. Reduced incidents by 38% “Be transparent, or be gone” 6. Improved incident resolution from 5 days to 2 days
  • 4. Background… The Story: Actions
  • 5. Background… The Story: Actions
  • 6. Risk of Irrelevance Gartner Source: “Building the IT Brand: Impacting the Front Office and Beyond”, Meehan & McMullen, Gartner Executive Programs, October 2011
  • 7. Risk of Irrelevance Look at the press… Source: 37 Signals, Feb., 2011 Source: ComputerWeekly.com, August 2012
  • 8. Risk of Irrelevance – Frightening Dichotomy Uh oh… Is this where we’re headed? External forces that can impact organizations Necessary evil Necessary Unnecessary? Sources: ―The Great IT Freezeout: Is IT Becoming Irrelevant? ‖, Unisys Disruptive IT Trends, July, 2011 ―Leading Through Connections, Insights from the CEO Study‖, IBM Institute for Vusiness Value, May 2012
  • 9. Risk of Irrelevance Why are we failing? Great brands communicate a But, we do good stuff! consistent message over and over and over again Do we run like a business Is there Marketing? Sales? Finance? Peter Drucker: “Because its purpose is to create a customer, the business has two – and only two - functions: marketing and innovation. Marketing and innovation create value, the rest are all costs.” What do we communicate to the business? The network is currently experiencing an outage…
  • 10. Risk of Irrelevance Framing the Marketing and Communication Problem Great brands communicate a consistent message over and over and over again Source: ―Marketing IT: Avoiding the Road to Disenfranchisement and Disempowerment ‖, Gartner, April 2012
  • 11. What is a Brand? A brand is: “the gut feeling that people have about your product or service” Marty Neumeier The Brand Gap “the ability to create in the mind of the prospect the perception that there is no other product quite like yours’ Al and Laura Ries “the internalized sum of all impressions… resulting in a Duane Knapp distinctive position in the customer’s minds eye” The Brand Mindset “proprietary visual, emotional, rational and cultural image that you associate with a product or service” Charles Pettis “a promise comprising both a commitment that sets expectations… and a definition of the provider’s expected Gartner capabilities”… “in short, it’s what users say about you.” “Name, term, design, symbol, or any other feature that identifies Wikipedia one sellers good or service as distinct from those of other sellers.“ “Brand is strategy conveyed to your target audience” Sandra Sellani
  • 12. the World’s top Brands of 2012 Source: brandirectory.com Source: Forbes
  • 13. Brand Blunders: please don’t self - inflict You’ve got to be kidding  Three examples Legal Practice: Leadership Integrity Excellence LIE Transportation: South Lake Union Trolley Utilities: Comprehensive Commercial Construction Program ―From each according to his ability, to each according to his need‖ CCCP - Союз Советских Социалистических Республик, meaning the Union of Soviet Socialist Republics, or USSR in English
  • 14. Brand Blunders: please don’t self - inflict You’ve got to be kidding  Learn from the big boys? GM: Another death related bad translation took GM to a new low. GM translated their advertising campaign‘s tag line ‗Body by Fisher‘ as ‗Corpse by Fisher‘ in Belgium. Schweppes: A translation for Italy leads Schweppes Tonic Water to be translated as ‗Toilet Water‘. Nestle: In central Africa, people are used to labels of packaged foods picturing the inside contents. Nestle caused an uproar when they released their Nestle baby milk with a smiling caucasan baby on the front. KFC: KFC‘s famous ‗Finger licking good‘ slogan translated as ‗eat your fingers off‘ in China. Colgate: Market research disregard: Colgate releases a toothpaste in France called Cue which was similar to the name of a popular porn magazine.
  • 15. Why is branding important? Four simple reasons: 1. Branding can deliver the message clearly 2. Branding can create business credibility 3. Branding can create a connection between the product and the clientele 4. Branding helps motivate the buyer 1911 Morton starts adding magnesium carbonate (an anti-caking agent) to salt, creating a table salt that flows freely, even in humid weather. This additive has since been changed to calcium silicate.
  • 16. Where do you start? Three questions: 1. Who are you? 2. Who do you need to be? 3. Who do you want to be? “Be transparent, or be gone”
  • 17. Where do you start? Who are you? 1. Who are you? – four questions 2. What are your brand elements? 3. VRIO Analysis Survey: Southwest Airlines is USAs most desired brand Feb. 22, 2012
  • 18. Where do you start? Who are you? – Brand Archetypes ARCHETYPE EXAMPLE Dove soap, Ben & Jerry‘s ice cream Indiana Jones, Jeep, Marlboro BBC, CNN, Gallup, PBS Nike, Superman Harley-Davidson, Apple also called ―Outlaw‖ Disney, Dreamscape Multimedia, Oil of Olay Home Depot, Wendy‘s Victoria‘s Secret, Lady Godiva Motley Fool, Muppets Mother Teresa, Johnson‘s Baby Shampoo Lego, Sony, Crayola IBM, Microsoft
  • 19. Where do you start? Who are you? – Brand Archetypes Motto: The truth will set you free. Driving desire: to find truth Goal: to use intelligence and analysis to understand the world Biggest fear: being duped, misled—or ignorance. Strategy: seeking out information and knowledge; self-reflection and understanding thought processes Weakness: can study details forever and never act Talent: wisdom, intelligence Also known as: expert, scholar, detective, advisor, thinker, philosopher, academic, researcher, thinker, planner, professional, mentor, teacher, contemplative, guru Sage archetypes in the wild: •provide expertise or information to customers •encourage customers to think •based on new scientific findings or esoteric knowledge •supported by research-based facts •differentiate from others whose quality or performance is suspect Archetype examples: BBC, CNN, Gallup, PBS
  • 20. Where do you start? Who are you? 1. Who are you? – four questions “Southwest is a customer service organization that just happens to fly airplanes” – Colleen Barrett, President
  • 21. Where do you start? Who are you? 2. What are your brand elements?
  • 22. Where do you start? Who are you? 3. VRIO analysis - it’s about THEM (customers) Piano Works example: - Valuable - Rare - Costly to Imitate - Organizational Leverage – every part of the organization communicates the brand
  • 23. Gartner Approach Building ITIT Brand Impact Building Brand Impact Source: ―Building the IT Brand: Impacting the Front Office and Beyond‖, Meehan & McMullen, Gartner Executive Programs, October 2011
  • 24. Gartner Approach Building ITIT Brand Impact Building Brand Impact SEE Shine in captive IT markets Captive markets comprise the traditional back-office IT services and support: HR, finance and operations (such as supply chain). Strong IT brands shine in the back office, going beyond merely delivering on expectations. Expand into adjacent internal IT markets The key to enabling the business to engage adjacent markets is IT‘s ability to move its own capabilities from back-office support to those that will increase front-office digitization. This requires expanding IT‘s brand as a shining back-office innovator such that it also becomes a credible provider of market-facing business solutions. Externalize IT’s brand impact IT branding is not solely internal; though IT‘s external brand impact is often the sum of its internal efforts in the front office, leading CIOs have a plan for external brand impact. In other words, they can answer the question, How does our IT brand help the enterprise keep its promise? Source: ―Building the IT Brand: Impacting the Front Office and Beyond‖, Meehan & McMullen, Gartner Executive Programs, October 2011
  • 25. Gartner Approach Building ITIT Brand Impact Building Brand Impact Source: ―Building the IT Brand: Impacting the Front Office and Beyond‖, Meehan & McMullen, Gartner Executive Programs, October 2011
  • 26. Gartner Approach Building ITIT Brand Impact Key Strategy Mechanisms in captive IT Markets Building Brand Impact – Branding strategy at this stage demands excellence in products, user satisfaction and efficiency; mechanisms: • Product-focused branding strategy differentiates IT based on the products it delivers to internal customers, as when IT acts as a broker for third party providers • Service-focused branding strategy differentiates IT based on the quality of service interactions • Intimacy-focused branding strategy resembles one that is service focused, but it concentrates on knowing the end user, anticipating user needs and behaving more like a business consultancy. CIOs must select one branding strategy to excel at while maintaining a high level of competency in the other two. Source: ―Building the IT Brand: Impacting the Front Office and Beyond‖, Meehan & McMullen, Gartner Executive Programs, October 2011
  • 27. Gartner Approach Building ITIT Brand Impact Key Strategy Mechanisms in adjacent internal IT Markets Building Brand Impact – Three adjacent market strategy mechanisms: • Examine your stakeholder base to determine where your power base lies, e.g., third-person spokesperson • Look for holes in business strategy where a CIO can make an impact by lowering business risk and organizational resistance • Understand new channel opportunities for the business Source: ―Building the IT Brand: Impacting the Front Office and Beyond‖, Meehan & McMullen, Gartner Executive Programs, October 2011
  • 28. Gartner Approach Building ITIT Brand Impact Key Strategy Mechanisms externalizing IT‘s brand Building Brand Impact – Answers the question: How does our IT brand help the enterprise keep its promise? Map your past impact on the external enterprise brand: Source: ―Building the IT Brand: Impacting the Front Office and Beyond‖, Meehan & McMullen, Gartner Executive Programs, October 2011
  • 29. Gartner Approach Communication: (this is a quiz ) Building IT Brand Impact Source: ―Redefining ―Marketing IT‖ From Telling to Engagement‖, May 2011
  • 30. Gartner Approach Communication: Old school, New school Building IT Brand Impact Source: ―Redefining ―Marketing IT‖ From Telling to Engagement‖, May 2011
  • 31. Example County of Orange – Marketing Brochure Logo Tag line
  • 32. Example County of Orange - Marketing Brochure
  • 33. Example County of Orange – Marketing Brochure
  • 34. Example County of Orange – other materials… The Brand is Always There PowerPoint Presentations Service Catalog
  • 35. Conclusions Where do we go from here? • IT is at risk of irrelevance • Branding IT can help • What should I do? • Start with the generic approach – it doesn’t take long or cost much • Move to the Gartner framework for captive IT markets • Leverage strengths and bolster weaknesses • Become transparent, a necessity • COMMUNICATE especially to the business folks • Establish a “drumbeat” – always on message from the whole IT organization • Look into other branding resources such as the 12 archetypes • Have fun! 
  • 36. Questions? Joel A Manfredo joel.manfredo@aciesconsulting.com