The Power and Importance of Branding

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Good evening, I’m Stephen ZierhutThe concept that I will be covering tonight is “the power and importance of branding” – next slide

People took these messages and interpreted them, creating customer perception:Customer perception being: What they (the customers)think you are, is who you are.The holy grail of branding today is to create the right customer perceptionthat will drive hoards of customers your way.Historically, the best way to“create” that perception has been:a louder, bigger message that is put in more places! - next slide

Calvin Klein's sales division has expanded from clothing to fragrances, watches, sunglasses, wallets, handbags, shoes, house ware, and household goods.Some people cannot resist this branding power. – next slide

Today we live in a branded world, one that many would agree is oversaturated with brands in every aspect of our livesTo illustrate this, I want to share a short story with you – next slide

Meet John… - next slide

John lives in Los Angeles, CA – next slide

A typical day for him involves waking up to his favorite music played by his Apple iTouch through his iHome – next slide

After getting out of bed and showering…John shaves his face with a Gillette Fusion shaver and splashes on some AcquadiGio After Shave Balm and cologne – next slide

Puts on his Tag Heuer

For breakfast he grabs a fast, healthy Odwalla Bar on the way out the door – next slide

John hops into his BMW 3 series – next slide

Some of you will be graduating this Saturday, congratulations…In this brief presentation I hope to reinforce this idea of how important branding isAnd to the rest of you, hopefully impart some useful information to take with you into a future class – next slide

His BMWproudly displaying an Obama sticker and USC license plate frame (from his alma mater) on the bumper. – next slide

On the way to work John stops at Startbucks to pick up his morning coffee – next slide

While waiting in line John pulls out his blackberry with at&t service– next slide

Having just enough time to check last night’s score of his favorite team, the Lakers - next

This was an ultra condensed version of John’s morning, and you can see how many brands he interacts with..While John’s might not be your typical morning, think about YOUR day…We can’t choose a product, use a service, or interact with oneanother without talking about or referencing brands.How many brands did you encounter today? What does your branding story look like? – next slide

Now that all of you are hopefully thinking about and aware of branding…Lets take a look at what brands really are in the modern sense of the word – next slide

To help with the definition, I thought it would first be useful to first to explain what brands are not – next slide

Brands are not trade marks, copyrights, or rights reserved…These are legal properties or you product or service– next slide

Brands are also NOT mission statementsThese are the foundation of the purpose of the organization and act as reminders to that effect – next slide

Brands are NOT solely logos or slogansThese acts like a signature – next slide

To help us understand how it has evolved to where it is today… I thought we would start with brief example from history of how branding has been used – next slide

Neither are Brands merely the product or service of a company…And that is because these are the purchased items, not the broader meaning behind identity – next slide

According to Scott Bedbury, an advertising executive who worked for Nike and Starbucks…A brand is NOT a product.It is the sum total of everything a company DOES— the GOOD, the BAD and eventhe off strategy —that creates a largecontext or an IDENTITYin the consumer’s mind.”– next slide

And lastly, Brands are NOTAdvertising…Advertising is merely the vehicle for the organization’s message – next slide

Now that we have established what brands are not, we can focus on what they are – next slide

First, Brands arethe personification of an organization, product, or service – next slide

Second, Brands are the set of associations that enhance or detract from the related product or service – next slide

Third, Brands area person’s gut feeling about a product, service, or organization– next slide

A gut feeling because brands are defined by the individual, not companies, markets, or publicsA gut feeling because people are emotionally intuitive beings…Emotion being the driving force for this woman’s ultimate purchaseThink of yourselves, everyone here inevitably has at least one, if not many products or services for which they have made a purchase based on a gut feeling…Maybe it is not shoes, but brand of handbag, car, watch – next slide

So, it makes sense that brands arethe source ofemotional connection with the customerDoes anyone here have a product or service they are very emotionally attached to?– next slide

Additionally, brands are the single idea or concept imbedded into the mind of the customer– next slide

In the beginning, there were cows - the four-legged property of ranchers…But how to tell one cow from another? How about we burn a unique mark into their hide — next slide

Brands are the source of promise to customers, or a trust mark– next slide

Trust marks influence the level of emotional connection between customer and company…Customers derive trust from the reliability and delight they receive from a product or service and tend to base their buy choices on this trust – next slide

Here are some examples of brands with a positive trust mark…AppleIKEADellThey promise something, deliver on that promise, and their brand personifies the expectation of trust they have in the marketplace – next slide

Lastly, Branding is truly EVERYWHERE because EVERYTHING is a brand.Products, services, political ideologies…Think back to the Branding Story and John’s morning, everything he encountered was a brand, not just a product or service…His music player, cellular service provider, alma mater; presidential candidate (clearly branded as change); sporting entertainment; coffee; even the city and state he lives in(CA is a brand that even advertises its message, its persona - sure some of you have seen commercials – next slide

We started off by just thinking about branding…We went into what brands really are…And now we can get into the heart of the matter, why branding is so important – next slide

First, brands are assets and should be treated as such…The better the brand has been established, the more it is worth… Interbrand, a global branding consultancy firm, conducts brand valuation yearly and publishes a list of the top 100 brands - change slide

Here are three of the top 10 most valuable brands as of 2008…each the most valuable from its respective industry…In beverages you have the coca cola brand worth 66.6 billion dollarsFrom computer services, the IBM brand worth just over 59 billion dollarsAnd in media, the Disney brand worth 29.2 billion dollars – next slide

To put into perspective the gravity of the brand as an asset, lets take the #1 most valuable brand in the world, Coca Cola…As of 2008, Coca Cola had 40.59 billion $ in assets…But This represents only 38% of their total assets when including their brand value – next slide

The second reason branding is so important is that it alters tastes…Branding creates a perception of a product or service in the consumer’s mind…This perception can lead to favoring a product or service over another when there really is not true differentiation among choices – next slide

In a creative test to help determine the power of branding…Researchers gave children a variety of healthy foods, some in McDonalds’s packaging…Can anyone guess what the results were, which packaged food earned the highest score for taste?Yes, the McDonaldss packaged food earned the highest marks for tastes even though the foods were identicalWhile this was only one test, it is clear that with enough branding strategy, firms can have an enormous impact on the public's perception and actually alter taste – next slide

Let’s “brand” themThe more cows, the more marks – next slide

The third reason branding is so important today is differentiation…Even though roughly $280 billion is spent yearly on marketing to the american public (that is about $950 per person), differentiation among products are services is low…Most offerings have similar quality and features…Product proliferation has created so many choices…The buyer’s ability to differentiate and choose is overloadedIncreasingly, consumers choose brands, not products or services - next slide

If you were in the market for a camera, how would you decide which to buy?

We covered earlier that brands are a promise, a trust markAnd that people buy according to this trustBranding helps us choose, helps us differentiate – next slide

The idea of differentiation is closely associated with the forth reason that branding is so important…That being a commodity is a bad thing – next slide

Philip Kotler,Professor at the Kellogg School of Management, said that…“The art of marketing is the art ofBRAND BUILDING. If you arenot a brand, you are acommodity. Then price iseverything and the low-costproducer is the only winner.”– next slide

Reason #5…Branding is not tactical, it is not developed overnight, or even the span of weeks or months…Branding is strategic and leads to relationships that secure future earnings by securing customer loyalty– next slide

Lastly, I want to bring home the importance of branding to each of you…To highlight the importance of branding as if affects all of our lives – next slide

First, think of the brandscape of higher education today…Its like a sea of applesWhat brought you all here to CLU?There is not a lack of schools and it was not simple price- next slide

In some way, CLU’s branding – the promise, message, distinction – made you choose to attend – next slide

This concept of powerful and important branding not only applies to the products and services you purchase or interact with…But also extends to yourself as a brand…There is no shortage of applicants for jobs or individuals looking to advance in an organization…So How do you make yourself stand out? – next slide

But, the better known rancher’s cattle stood out – click…And business flourished.People thought “What a great idea, what else could this concept be applied to?” – next slide

Branding is what makes a potential employee or someone already in an organization stand out…Branding is so important because it give you the control in determining reputation, image, and the intangibles and perceptions and that other people have about you – next slide

Thank you everyone…I hope there was something that you can take away from this presentation…Does anyone have any questions?

The same was done with companies - next slide

And the more people who saw the branding, the more successful the company became – next slide

Then came the brand as a message. It wasn’t enough to simply have a recognizable logo, companiesneeded to tell people what they needed to know.In addition to the logo, the message would shape how people would think aboutthe company, its products and services.For example, Calvin Klein sparked a controversial campaign in the early 80s with 15 year old Brook Shields saying in a commercial…\"You wanna know what comes between me and my Calvin's? Nothing\" Thanks to the message that \"modern, practical fashion, and minimalist-chic,\" were cool…Calvin Klein's empire has gone on to continued success,encompassing lifestyle fashion, thanks greatly to their message– next slide