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Workshop to help brand leaders be better at brand finance,
with every formula you need to run your brand.
Brand Finance 101
We make brands stronger.
We make brand leaders smarter.
Define
the
Brand
Think
Strategically
Big
Idea
At Beloved Brands, w...
We make brands better.
We make brand leaders better.
The role of a brand is to create a
bond with your consumers, that mus...
People always ask me,
“Why does brand love matter?”
Brand Love
The more loved your brand is by your consumers,
the more powerful and profitable your brand will be.
Brand Love ProfitPower
We make brands stronger.
We make brand leaders smarter.
1
Consumers move along Brand Love
Curve tightening their bond with...
We make brands stronger.
We make brand leaders smarter.
Here’s how a beloved brand can generate more
competitive power thr...
The tighter the bond the brand creates with their consumers,
the more powerful that brand will be with all stakeholders
Co...
We make brands stronger.
We make brand leaders smarter.
The economics and accounting of how beloved brands
turn power into...
The 8 ways that Brands can use their power to drive more profit
1
Premium
Pricing
2
Trading
Up
3
Lower
cost of
goods
4
Effi...
We make brands stronger.
We make brand leaders smarter.
Beloved brands use brand LOVE and POWER to drive PROFITS with
incr...
The more loved a brand is by consumers,
the more powerful and profitable that brand will be
Brand Love ProfitPower
We make brands stronger.
We make brand leaders smarter.
Apple uses their brand love and power to increase
prices, lower co...
We make brands stronger.
We make brand leaders smarter.
Apple has used brand love to command power and
enable them to driv...
We make brands stronger.
We make brand leaders smarter.
Doing some very simple math
shows three potential major
problems r...
Look at Gross Margins % by dividing the
overall gross margin by the overall sales.
• The gross margin % is down from 43% t...
We make brands stronger.
We make brand leaders smarter.
Price
Costs
Share
Market Size
Premium Price
• Perceived quality al...
We make brands stronger.
We make brand leaders smarter.
Pricing is a weapon a powerful brand can
wield to drive more margi...
10%	price	increase	against	a	10%	volume	decrease
Current New
Price 2.50 2.75
COGS 1.00 1.00
Margin 1.50 1.75
Margin % 60% ...
We make brands stronger.
We make brand leaders smarter.
Pricing Waterfall analysis
StatedPrice
InvoicePrice
ActualPrice
Gr...
We make brands stronger.
We make brand leaders smarter.
Define your Pricing Strategy in
alignment with your business
strat...
We make brands stronger.
We make brand leaders smarter.
Pricing Management System
• Annual Rates
• One-time charge
• Cost-...
We make brands stronger.
We make brand leaders smarter.
Pricing Quality Relationships
Indifferent
Like It
Beloved
relative...
We make brands stronger.
We make brand leaders smarter.
• COGs Decreases: power over
suppliers, potential raw material
cha...
Cost of Goods (COGs) formula
Direct Materials $1.30
Direct Labor cost $0.90
Manufacturing Overhead $0.50
 
Cost of Goods S...
We make brands stronger.
We make brand leaders smarter.
Marketers always face
limited resources…
Target Market
Brand Posit...
We make brands stronger.
We make brand leaders smarter.
Focus your marketing activities by prioritizing on
return on inves...
We make brands stronger.
We make brand leaders smarter.
Formulas in Detail – Program ROI (Return on Investment)
Companies ...
We make brands stronger.
We make brand leaders smarter.
• Offensive: Competitive
Advantage, Untapped Needs,
Opportunistic,...
We make brands stronger.
We make brand leaders smarter.
Formulas in Detail – Compound Annual Growth Rate
Knowing the compo...
We make brands stronger.
We make brand leaders smarter.
86%
82%
63%
16%
2%
98%
96%
85%
43%
4%
Like It Brand Beloved Brand
...
We make brands stronger.
We make brand leaders smarter.
Using the Brand Funnel can help to do the Brand Math.
Leveraging t...
We make brands stronger.
We make brand leaders smarter.
• When there is an untapped
or underserved need.
• Changing demogr...
We make brands stronger.
We make brand leaders smarter.
Formulas in Detail – Launch ROI (Return on Investment)
Year 1
New ...
We make brands stronger.
We make brand leaders smarter.
How to dig in on the 8 areas on the Profit
Statements to help unco...
We make brands stronger.
We make brand leaders smarter.
As you make investment decisions on your portfolio
of brands, firs...
We make brands stronger.
We make brand leaders smarter.
As you make investment decisions on your portfolio
of brands, then...
We make brands stronger.
We make brand leaders smarter.
Questions to understand the financials of the brand
1. Your CAGR? ...
We make brands stronger.
We make brand leaders smarter.
To determine where are we, you need to look at
health, as a signal...
We make brands stronger.
We make brand leaders smarter.
Internal Health:
What is the internal beacon that helps all
employ...
Brand
Plan
Example of how to lay out the brand health and wealth
Internal Health:
Divided team on whether to go after new ...
We make brands stronger.
We make brand leaders smarter.
Turn analytical thinking
into projections
Extrapolating data into ...
Brand
Plan
Example of how you fill out the Profit Projections
2014 2015 2016
$ g% $ g% $ g% Comments
Net Sales 21,978 44% ...
We make brands stronger.
We make brand leaders smarter.
What’s involved in the Brand’s annual financial forecast?
• Sales:...
Brand
Plan
Example of the Marketing Budget Breakout
Activities 2014 2015 2016 Comments
Merchandisers Artwork 68 55 50 Merc...
We make brands stronger.
We make brand leaders smarter.
The Stake in the Ground: A Comparison Measure
• Find a comparative...
We make brands stronger.
We make brand leaders smarter.
Example of Making Projections
Brand X is a new molecule in the med...
Brand
Plan
Example of the building blocks of a Sales Projection
Forecast for 2015 $27,354 Current LE for the year.
Forecas...
We make brands stronger.
We make brand leaders smarter.
We will help you unleash
your full potential
Brand Coaching Servic...
We make brands stronger.
We make brand leaders smarter.
We make brands stronger.
We make brand leaders smarter.
Our role i...
We make brands stronger.
We make brand leaders smarter.
Define
the
Brand
Think
Strategically
Big
Idea
At Beloved Brands, w...
We make brands stronger.
We make brand leaders smarter.
We make brands stronger.
We make brand leaders smarter.
We lead a ...
We make brands stronger.
We make brand leaders smarter.
We will lead a 360 brand assessment, looking at the
marketplace, c...
We make brands stronger.
We make brand leaders smarter.
Define a focused consumer
target profile with insights,
enemies and ...
We make brands stronger.
We make brand leaders smarter.
Brand’s
Big Idea
We will help create a Big Idea that will transfor...
We make brands stronger.
We make brand leaders smarter.
2
4
31 Strategic questions to
help frame the key issues
5
We will ...
We make brands stronger.
We make brand leaders smarter.
We make brands stronger.
We make brand leaders smarter.
Promise Br...
We make brands stronger.
We make brand leaders smarter.
We will build a Brand Management Training Program,
to unleash the ...
Investing in your people pays off with smarter strategies,
amazing execution and stronger brand results
We will unleash th...
We make brands stronger.
We make brand leaders smarter.
Graham spent 20 years in Brand Management leading some of the worl...
We make brands stronger.
We make brand leaders smarter.
Graham Robertson at Beloved Brands
Significant career experience i...
We make brands stronger.
We make brand leaders smarter.
Do you want to get smarter
about Marketing?
Visit beloved-brands.c...
We make brands stronger.
We make brand leaders smarter.
We would love the opportunity to
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Brand Finance 101

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The more loved a brand, the more powerful the brand and in turn, the more profitable the brand. This will help the brand manager be better at driving profit for their brand.

Published in: Economy & Finance, Business

Brand Finance 101

  1. 1. Workshop to help brand leaders be better at brand finance, with every formula you need to run your brand. Brand Finance 101
  2. 2. We make brands stronger. We make brand leaders smarter. Define the Brand Think Strategically Big Idea At Beloved Brands, we use a branding approach Vision Analysis Key Issues Strategies Execution • Advertising • In-Store • Innovation • Consumers • Category • Channels • Competitors • Brand Values, Goals • Experience Brand Plan Create Brand Plans Inspire creative execution Analyze performance Sm art Creative Ideas
  3. 3. We make brands better. We make brand leaders better. The role of a brand is to create a bond with your consumers, that must lead to a power and profit beyond what the product alone could achieve.
  4. 4. People always ask me, “Why does brand love matter?” Brand Love
  5. 5. The more loved your brand is by your consumers, the more powerful and profitable your brand will be. Brand Love ProfitPower
  6. 6. We make brands stronger. We make brand leaders smarter. 1 Consumers move along Brand Love Curve tightening their bond with brands 2 Consumers connect with big idea and expect consistency at every touch-points 3 The tight consumer bond creates brand power with key stakeholders 4 The brand power drives profit through price, cost, share, market size Promise Experience Purchase Moment Innovation Brand Story Consumer Premium Prices Trading Up Lower COGS Efficient Spend Stealing Share Users to use more New markets Find new uses Brand 8 ways Marketers can drive more profits Why does brand love matter? The more loved a brand is by consumers, the more powerful and profitable that brand will be. Channels Competitors New Entries Suppliers Media Influencers Employees Consumers Brand Power Big Idea Love It Indifferent Beloved Like It
  7. 7. We make brands stronger. We make brand leaders smarter. Here’s how a beloved brand can generate more competitive power through Michael Porter’s model Competitive Rivalry Power of Buyers Power of Suppliers Threat of Substitutes Threat of Entrants New Brands just can’t break through the emotional bond of a beloved brand. Consumers feel more and think less. Desire and crave. They become brand fans who can’t live without the brand. Suppliers serve at mercy of the beloved brand. High volumes drive down costs & margins. Suppliers build completely around brand. Channels are powerless against beloved brand. Consumers would switch stores before brands. Stores cannot stand up to beloved brand. Substitutes cannot match emotional bond that the beloved brand has with their brand fans. They have a monopoly on feelings.
  8. 8. The tighter the bond the brand creates with their consumers, the more powerful that brand will be with all stakeholders Consumers switch stores before they switch brands Willing to cut costs to be part of the beloved brand. Cannot duplicate emotional connection of the beloved brand Struggle to break bond and momentum the beloved brand has Proud, fully engaged, motivated, outspoken fans. Strong culture. Outspoken brand fans carry influence over the purchase All media (paid, earned, search, social, home) favor the beloved brands Channels Competitors New EntriesSuppliers Media Influencers Employees Outspoken fans who think less and feel more Consumers Brand Power
  9. 9. We make brands stronger. We make brand leaders smarter. The economics and accounting of how beloved brands turn power into stronger growth and profit Price& Quan+ty& Supply& Demand' Increased' Demand' $400$ $250$ 10M$ 15M$ Driving demand gives your brand the ability to drive the price up, and higher quantities gives better economies of scale. Profitability = Margin x Quantity Prices ShareCosts Market SizeMargins Volume Premium Pricing Trading Up Lower cost of goods Efficient Program Spending Stealing Competitive Users Get loyal users to use more Enter new markets Find new uses
  10. 10. The 8 ways that Brands can use their power to drive more profit 1 Premium Pricing 2 Trading Up 3 Lower cost of goods 4 Efficient Program Spending 5 Stealing Competitive Users 6 Get loyal users to use more 7 Enter new markets 8 Find new uses Higher Prices Higher Share Lower Costs Bigger Market Higher Margins Higher Volume
  11. 11. We make brands stronger. We make brand leaders smarter. Beloved brands use brand LOVE and POWER to drive PROFITS with increased prices, lower costs, share gains and entering new markets Price Costs Share Market Size Premium Price • Perceived quality allows you to command price pricing Trading up/down • Take loyalists up to a better premium-priced version of brand Lower cost of goods • Economies of scale and use your power over suppliers. Efficient marketing • Higher volume helps spend ratios, use the media power. Stealing Share • Use brand momentum to gain tipping point. Higher usage • Get loyal users to use more, building routines/rituals. Enter new markets • Take brand idea to new products, getting loyalists to follow. Find new uses • Increase the ways that your brand can fit into the consumers life. Higher Margins % Higher Volumes
  12. 12. The more loved a brand is by consumers, the more powerful and profitable that brand will be Brand Love ProfitPower
  13. 13. We make brands stronger. We make brand leaders smarter. Apple uses their brand love and power to increase prices, lower costs gain share and enter new markets Case Study
  14. 14. We make brands stronger. We make brand leaders smarter. Apple has used brand love to command power and enable them to drive both revenue and profits Case Study
  15. 15. We make brands stronger. We make brand leaders smarter. Doing some very simple math shows three potential major problems right away. • Gross Margin is falling each year—dig in to find problem with either price or COGs? • Contribution Margin falling— Gross Margins, Spend Increases. • Spend growing faster than sales. Investment mode? 1 3 2 1 2 3 2008 2009 2010 Net Sales 21,978 24,616 27,569 Cost of Goods Sold 12,866 14,925 17,313 Gross Margin 9,482 9,862 10,256 Research Development 346 352 360 Total Spend 3,444 4,202 5,127 Ad Merch 568 858 1,296 TV - - 175 On Line 28 70 175 Print 57 75 100 PR 59 77 100 Sampling 3 13 50 Sponsorship 132 73 40 Research 200 100 5 Packaging 133 100 75 Display 4 29 200 Trade 426 400 376 Other SG&A 2,172 1,433 989 Contribution Income 5,763 5,244 4,772 12% 22% Look at the Wealth of the Brand by knowing how to use the Financial Statements Brand Finance
  16. 16. Look at Gross Margins % by dividing the overall gross margin by the overall sales. • The gross margin % is down from 43% to 37%. Either overall pricing has been cut or the costs are up. Dig in deeper. Quick assessment of the brand’s financial statements 2008 2009 2010 Sales 21978 24616 27569 Gross Margin 9482 9862 10225 Gross Margin % 43% 40% 37% Look at Contribution Margins % by dividing overall contribution income by overall sales. • The CM% fell from 26% to 17%. Not only is there is there a problem at the top line margin, but gross margin is not covering off the increase in spend. 2008 2009 2010 Sales 21978 24616 27569 Contribution Income 5763 5244 4772 Contribution Margin % 26% 21% 17% One other quick tool is to compare the sales growth versus the spend growth. • The sales are growing at a healthy 12%, however total spend is outpacing sales growth with 22% spend increase. We are now seeing two issues with profits: Above the falling gross margin plus the high increases in below the line spend. 2008 2009 2010 Growth Sales 21978 24616 27569 12% Total Spend 3444 4202 5127 22% 1 3 2
  17. 17. We make brands stronger. We make brand leaders smarter. Price Costs Share Market Size Premium Price • Perceived quality allows you to command price pricing Trading up/down • Take loyalists up to a better premium-priced version of brand Lower cost of goods • Economies of scale and use your power over suppliers. Efficient marketing • Higher volume helps spend ratios, use the media power. Stealing Share • Use brand momentum to gain tipping point. Higher usage • Get loyal users to use more, building routines/rituals. Enter new markets • Take brand idea to new products, getting loyalists to follow. Find new uses • Increase the ways that your brand can fit into the consumers life. Higher Margins % Higher Volumes Using LOVE and POWER to drive PROFITS with increased prices, lower costs, share gains and entering new markets
  18. 18. We make brands stronger. We make brand leaders smarter. Pricing is a weapon a powerful brand can wield to drive more margin • Increases: If the market or brand allows you. Passing along cost increases. Healthy brand, healthy market, power vs competition and channel. • Decreases: Fighting off competitor, sluggish economy, channel pressure. • Trading Up: Can you carve out a meaningful difference that goes beyond your current brand? Does your brand image/ratings allow it? • Trading Down: Risky, but you see un-served market, with minimal damage to image/ reputation of the brand. • Difficult to execute because it has to go through retailers. Understand power relationships. • Competitors will (over) react. So your assumptions you used to go will change right after. • It’s not easy to change back. • Premium skus, can feel orphaned at retail world—missing ads or displays. • Managing two pricing levels can be difficult—what to support, price differences etc. • Don’t lose focus on your core business. Can’t be all things to everyone. • Image risk, especially when trading downward. When to use What to watch out for Price Trading up or down Premium Pricing 1 2 Brand Finance
  19. 19. 10% price increase against a 10% volume decrease Current New Price 2.50 2.75 COGS 1.00 1.00 Margin 1.50 1.75 Margin % 60% 64% Unit Forecast 100,000 90,000 Impact On Revenue $250,000 $247,500 Impact on Profit $150,000 $157,500 Formulas: Impact on Revenue Price x Units Current: 2.5 x 100 = $250k New: 2.75 x 90 = $247.5k Impact on Profit Margin x Units Current: 100 x 1.5 = $150k New: 90 x 1.75 = $157.5k When looking at a price increase it is crucial to make assumptions as to what will happen to the unit volumes and then do the overall resulting revenue and profit for the options. Price Increase Formula
  20. 20. We make brands stronger. We make brand leaders smarter. Pricing Waterfall analysis StatedPrice InvoicePrice ActualPrice Gross Margin Retailer program discounts Off-Invoice Discounts or Rebates Prom otional Price discounts Cost of Freight Custom Packaging or displays Cost of Programs Package Returns Cost Cost of Goods Sold Service Costs Volum e Discount Transactional and cost to serve the customer Target Price to the customer BasePrice Segm ent Geography/Regions Channel Base value of product sold Marketing Sales Stated Price on the customer’s invoice Actual Price (less discounts and cost to serve) Actual Gross Margin
  21. 21. We make brands stronger. We make brand leaders smarter. Define your Pricing Strategy in alignment with your business strategy and business objectives and based on a deep understanding of your own competitive position, customer insight and cost-to-serve 1. Pricing Strategy Implement Pricing Strategy and Price Determination framework into daily sales activities and transactional processing 3. Price Execution Operationalize Pricing Strategy in marketing activities and generate all required input for Price Execution 2. Price Determination Enable pricing capability by monitoring and provision of tools, systems and processes related to pricing in an integrated manner 5. Monitoring and System Support Pricing Management System Define pricing capabilities and skill sets, establish pricing organization and assure consideration of legal requirements 4. Governance
  22. 22. We make brands stronger. We make brand leaders smarter. Pricing Management System • Annual Rates • One-time charge • Cost-plus pricing • Price for Value • Maintenance Charges • Usage rental (by the hour) • Bundled Pricing • Market Price • Value Price • Strategic Price • Life Time Value (LTV) Pricing • Short vs. Long-term Revenue Pricing • Portfolio Pricing (Price Points) • Competitor Responses • Not-in-Kind (NIK) Replacements • Reduce/Increase attractiveness of business • Keep out competition • Setting Visible Market prices • Customer Reaction Product Pricing Cannibalization • Buying Power • Supplier Power • Place in the Value Chain • Price Elasticity • Global vs. Local Supply and Demand • Capacity • Substitute products 1. How do you Price? 2. What Price Should 
 you Charge? 3. What is the effect 
 of your Price on the Market? 4. What Ability do you have to Control Price? Business Strategy • How does your Pricing Strategy support the overall Business Strategy?
  23. 23. We make brands stronger. We make brand leaders smarter. Pricing Quality Relationships Indifferent Like It Beloved relative perceived valuelow high relative perceived price low high Risk of losing 
 customers and related volume Under-pricing vs potential, loses margins
  24. 24. We make brands stronger. We make brand leaders smarter. • COGs Decreases: power over suppliers, potential raw material change, process improvement, off-shore manufacturing. • COGs Increases: suppliers pass along costs, new technology, investing in brand’s improved image, going after higher end, new benefit or a format change. • Selling Cost Decrease: to counter changes in the P&L (price, volume or cost), short term P&L management, change in go-to-market model, product life cycle • Selling Cost Increase: Investment mode, proven payback in higher sales, defensive move to hold share. • With cuts, make sure the product change is not significantly noticeable. • Understand consumer impact on your brand’s performance and image. • Can the P&L cover these costs, either increased sales or efficiency elsewhere. • Always be in an ROI mindset: Manage your marketing costs as though every DOLLAR has to efficiently drive sales. • Short term cuts can carry longer term impact. • Competitive reaction can influence the impact of investment stance. When to use What to watch out for Cost Marketing Costs Product Costs Cost decreases come from economies of scale and power over suppliers 3 4 Brand Finance
  25. 25. Cost of Goods (COGs) formula Direct Materials $1.30 Direct Labor cost $0.90 Manufacturing Overhead $0.50   Cost of Goods Sold $2.70 Formulas: Per Unit Cost of Goods = direct materials + direct labor + manufacturing overhead 1.30 + 0.90 + 0.50 = 2.70 Overall Cost of Goods = beginning inventory + manufacturing cost - ending inventory 10,500 + 23,000 - 5,500 = 28,000 Gross Margin = Sales - COGS 500 – 300 = 200 Gross Margin % = (Sales – COGS) / Sales (500 – 300)/500 = 40% Per Unit COGS Beginning Inventory Cost $10,500 Manufacturing Cost for year $23,000 Ending Work in Process Costs $5,500   Cost of Goods Sold $28,000 Inventory COGS Sales $ 500 Cost of Goods Sold (COGS) $ 300 Gross Margin $ 200   Gross Margin % 40% Gross Margin
  26. 26. We make brands stronger. We make brand leaders smarter. Marketers always face limited resources… Target Market Brand Positioning Strategic Options New Product Ideas Execution Activities Financial Time People Partnerships …as they deploy against an unlimited list of choices We need to make decisions to limit the choices to match the limited resources we can deploy against those choices.
  27. 27. We make brands stronger. We make brand leaders smarter. Focus your marketing activities by prioritizing on return on investment and effort (ROI and ROE) For each strategy, you want to find the “Big Easy” • Put all of the ideas on to post it notes, then map each idea onto the grid as to whether they will have a BIG versus SMALL impact on the business, and whether they are EASY versus DIFFICULT. • The top ideas will be in the BIG EASY top right corner. JUST DO IT Brainstorm ways to make these ideas even bigger THE BIG EASY Big Wins, Easy to do AVOID Bad ROE, drain on resources MAKE EASIER Brainstorm easier ways to get it done Easy Difficult Small Win Big Win Implementation Business Impact Idea Idea Idea Idea Idea Idea Idea Idea Idea Idea Idea Idea Idea
  28. 28. We make brands stronger. We make brand leaders smarter. Formulas in Detail – Program ROI (Return on Investment) Companies seem to measure ROI differently. Ask Your Finance Person how they Measure and Calculate ROI Program Incremental Sales Volume $5000 Cost of Goods Sold (COGS) $3000 Gross Margin $2000 Gross Margin % 40%     Total Spend $1500 Contribution Income $500 Formulas: Gross Margin = Revenue - COGS 5000 - 3000 = 2000 Contribution Margin = Gross Margin – Spend 2000 - 1500 = 500 Option 1: Against just the Spend ROI = Contribution Margin/Spend 500/1500 = 33% Option 2: Against the Total Investment ROI = Contribution Margin / (COGS + Investment) 500/(1500+3000) = 11% Assumes program cost of $1500 generates $5000 in incremental revenue
  29. 29. We make brands stronger. We make brand leaders smarter. • Offensive: Competitive Advantage, Untapped Needs, Opportunistic, first mover advantage on new technology. • Defensive: Hold the fort until you can catch up on technology, maintain profitability, loyal base of followers needs protecting. • When there is an opportunity to turn loyal users into creating a potential routine. Changing behaviors is more difficult than enticing trial. • When getting further trial might be capped out. • Attacking competitors can be difficult. It could just become an spend escalation. After the war, no winners, just losers. • Brand loyalty, trade-offs beyond unsatisfied area or just habit. • Channel could play one competitor against another for their own gain. • There has to be a real benefit connected to using more or it might look hollow/shallow. • Driving routines is a challenge. Even with “life saving” medicines, the biggest issue is compliance. • Find something in their current life to help either ground it or latch onto. (brushing routine) When to use What to watch out for Market Share Get users to use more Steal other users Share and volume game are traditional tools for brand. Either an offensive or a defensive game. 5 6 Brand Finance
  30. 30. We make brands stronger. We make brand leaders smarter. Formulas in Detail – Compound Annual Growth Rate Knowing the compound annual growth rate is a crucial volume step to the ROI calculation. Scared off by Math, use the online CAGR Calculator at the Investopedia website Year 1 Year 2 Year 3 Year 4 Year 5 Revenue $500k $600k $650k $700k $800k Annual Growth   20% 8% 8% 14% Formulas: Average Growth Rate = ((Y5 – Y1)/Y1))/# of years ((800 – 500)/500)/5 = 12% CAGR = ((Y5 / Y 1) to the power of (1/#years)) – 1 (800/500 to the power of 1/5) – 1 = 9.85%
  31. 31. We make brands stronger. We make brand leaders smarter. 86% 82% 63% 16% 2% 98% 96% 85% 43% 4% Like It Brand Beloved Brand 25% 95% 50% 98% 77% 88% DirectionImplication Aided Awareness Familiarity (Unaided) Consideration Purchase Loyalty 2 1 2 1 12% 9% Leaky Funnel: Consumers falling out at consideration stage. Brand X is a “new” brand. Consumers’ go with trusted usual brand. Focus awareness at first point of consideration. Invest in on-line to keep consumer engaged In-store Switching: Significant drop off at purchase stage means Consumers are moved to other brands as they go in-store. Manage the shopping experience through purchase phase. 1 2 How the Brand Funnel can showcase brand issues. Tracking via Brand Funnel is a great tool to show relative strength of one brand vs another. Highlights leaks.
  32. 32. We make brands stronger. We make brand leaders smarter. Using the Brand Funnel can help to do the Brand Math. Leveraging the brand funnel, you can do the math. ➢ Purchase: 2.5 Million x $5 = $12.5 Million ➢ Repeat: 1 Million x $5 $ 5.0 Million ➢ Loyal: 200K x $5 $ 1.0 Million TOTAL $18.5 Million Assumptions 10 Million ppl @$5 per item Awareness 90% 9 million aware of it Familiar 75% 7.5 million familiar Consider 50% Half the people consider it. Purchase 25% 2.5 million buy it at $5 per Repeat 10% 1 million buy it a 2nd time at $5 Loyal 2% 200k buy a 3rd time at $5 The Brand Funnel Awareness Familiar Consider Purchase Repeat Loyal Unknown Indifferent Love It Like It Beloved The Brand Love Curve
  33. 33. We make brands stronger. We make brand leaders smarter. • When there is an untapped or underserved need. • Changing demographic that impacts your base. • You’re able to translate/ transfer your reputation to a new user group. • Format Line Extensions that take your experience or name elsewhere . • Able to leverage same benefit in convenient “on the go” offering. • There should be something within your product/brand that helps fuel the brand post trial. • Trial without repeat, means you’ll get the spike but then bust. • Substantial investment required. Don’t let it distract from protecting the base loyal users. • Make sure current brand is in order before you divert attention, funding and focus on expansion area. • Investment needed, could divert from spend on base business. • Legendary stories (Arm and Hammer) don’t come along as much as we hope. When to use What to watch out for Market Size Create new uses Find New Users Game Changers are about finding new users or even new uses for the consumer. 7 8 Brand Finance
  34. 34. We make brands stronger. We make brand leaders smarter. Formulas in Detail – Launch ROI (Return on Investment) Year 1 New Product Sales $500 Cost of Goods Sold (COGS) $300 Gross Margin $200 Gross Margin % 40%     Total Spend $150 Contribution Income $50 Formulas: Gross Margin = Revenue - COGS 500 - 300 = 200 Contribution Margin = Gross Margin – Total Spend 200 - 150 = 50 Option 1: Against just the spend ROI = Contribution Margin/spend 50/150 = 33% Option 2: Against total investment = Contribution Margin / (COGS + Investment) 50/(150+300) = 11% Many companies seem to measure ROI differently. Ask Your Finance Person how they Measure and Calculate ROI
  35. 35. We make brands stronger. We make brand leaders smarter. How to dig in on the 8 areas on the Profit Statements to help uncover the story for your brand Pricing Price cut? Customer discounts to drive volume? Trading Up/Down Product Mix Changed? More lower margin sales? Product Costs COGs went up due to supplier or materials? Marketing Costs Spend is up? Launching? Stealing share? Stealing Other Users Investing to steal competitive users? Defensive stance? Get Users to Use More Discounts to encourage volume per customer? New Category Investment to Enter into a new category? New Uses Education investment on potential uses? 1 2 3 4 5 6 7 8 The Good News: to simplify your thinking and make it easier on you, these are eight key levers of the P&L that you need to focus on. Brand Finance
  36. 36. We make brands stronger. We make brand leaders smarter. As you make investment decisions on your portfolio of brands, first look EXTERNALLY to the market How strong is your brand’s competitive position in the market? Major Investment to grow brand Invest strengthen the brand Investment to grow category Leverage power of leadership Maintain brand performance Focus on niche you can own Re-focus around niche stance Divest, milk or exit Maintain share, milk brand How attractive is the market? High Medium Low HighMediumLow Invest Maintain Divest Brand Finance
  37. 37. We make brands stronger. We make brand leaders smarter. As you make investment decisions on your portfolio of brands, then look INTERNALLY to the profitability How healthy are the profit margins? Invest to leverage growth Invest to grow brand Invest to grow brand Maintain share and growth level Maintain, smartly manage costs Increase prices to drive up margins Reduce costs, consider price Milk brand with minimal spend How strong is the brand growth? High Medium Low HighMediumLow Invest Maintain Divest Divest, milk or exit Brand Finance
  38. 38. We make brands stronger. We make brand leaders smarter. Questions to understand the financials of the brand 1. Your CAGR? (Compound Annual Growth Rate) 2. What are your contribution margins over last 5 years? Margins broken out by product line? 3. What is your budget breakout? Working dollars versus non-working dollars? Media versus production? Consumer versus trade? 4. Pricing Elasticity studies? 5. How are you performing overall and by line of business? 6. What are your current brand/business performance measures? 7. What programs are driving the highest ROI? 8. What is driving your profit? What are you focusing on right now? 9. What are your forecasting error rates? Fill rates? 10. What are the financial pressures you face? Quarterly results? Brand Finance
  39. 39. We make brands stronger. We make brand leaders smarter. To determine where are we, you need to look at health, as a signal to the future wealth of the Brand. Brand Health WEALTH measures what you can easily see. HEALTH are those measures you can’t easily see. Looking deeper uncovers new questions. Brand Wealth Sales Market Share ROI Profit Stock Prices Growth Rate Price Premium Share Position Brand Funnel Competitive Advantages Voice of Customer Regulatory Satisfaction Scores New Products Internal Alignment Market Trends
  40. 40. We make brands stronger. We make brand leaders smarter. Internal Health: What is the internal beacon that helps all employees understand and live the brand? How much has been communicated about the strategy? The idea of the brand has to be embedded right into the culture in a consistent manner. They have to realize their impact of the brand on the end customer. Internal Wealth: Everyone focused on Profit and Value. Assets, IP, culture, contracts, ownership. Lining up and delivering the brand promise to a clear set of objectives, helps employees see that they are contributing to and sharing in the brand wealth. Everyone should understand where and how they impact profitability. External Wealth: Healthy win in the marketplace. Beloved Brands can leverage success into power and drive wealth. Beloved Brands are more efficient, higher sales, lower costs, better margins, higher over all profits. External Health: Connecting with consumers is a source of power for brands. Understand the brand funnel and how your consumer sees your brand, going through the brand funnel through awareness, trial, repeat to brand loyalty. Build on your strengths and attack your weaknesses Brand Wealth Brand Health Assess situation, looking at health and wealth of the brand, both internally and externally Internal External
  41. 41. Brand Plan Example of how to lay out the brand health and wealth Internal Health: Divided team on whether to go after new users or drive frequency among core users. Advertising programs has not created awareness. Channel strength has not reached beyond Food. Innovation has not been consistent. External Health: Gray’s is a beloved brand among a core niche (“Preventers”) but relatively indifferent and unknown among broader audience. Even among loyalists, frequency is very weak. Gray’s is a special treat rather than a usual brand. Internal Wealth: Gray’s has a unique recipe. With marketing investment, profit margins have fallen from 12% to 9%, without seeing the growth ROI from the programs. Debate on whether Gray’s should focus on channel growth vs. marketing led programs. External Wealth: Gray’s has a strong growth rate at +20% CAGR. Sales of $25Million with a 48% gross margins, above category norm of 42%. Gray’s has achieved a 3.3% share at grocery but only 0.4% in the other channels. Internal Brand Wealth External Brand Health Case Study
  42. 42. We make brands stronger. We make brand leaders smarter. Turn analytical thinking into projections Extrapolating data into the future, starts with what you are see in the current.
  43. 43. Brand Plan Example of how you fill out the Profit Projections 2014 2015 2016 $ g% $ g% $ g% Comments Net Sales 21,978 44% 27,354 24% 30,385 11% With 2 competitors launching, growth will slow to +11% Cost of Goods Sold 10,333 40% 12,606 22% 13,237 5% New plant production has given lower cost of goods. Gross Margin 11,645 49% 14,748 27% 17,148 16% Gross margins continue to make efficiency gains. GM % 53% 54% 56% R&D 346 3% 352 2% 360 2% Holding steady R&D flavor innovation budget. Marketing Budget 5,528 22% 7,962 44% 8,850 11% Spending up in line with the sales forecast. Ad Merchandisers 568 22% 855 51% 850 -1% TV 1200 42% 900 -25% 1200 33% Increased budget as part of defense plan On Line 233 3% 480 106% 900 88% Staying competitive with shift to on line. Print 1355 22% 1050 -86% 1000 -100% Continued use of specialty health magazines PR 59 15% 77 31% 200 160% Sampling 500 4% 1200 140% 1400 17% Sampling is part of the mix to drive trial. Defense Plan. Sponsorship 100 33% 500 400% 0 -100% Research 200 55% 300 50% 500 67% Added tracking of two competitive launches. Packaging 133 66% 100 -25% 50 -50% Display 430 44% 1300 202% 1400 8% Lock up displays during the competitive launches. Trade 750 1200 60% 1350 13% Increased trade spend to stay competitive. Other SG&A 2,000 22% 289 -86% 989 242% Contribution Income 3,771 22% 6,145 63% 6,949 13% Gains coming from production efficiencies. CI % 17% 22% 23% Case Study
  44. 44. We make brands stronger. We make brand leaders smarter. What’s involved in the Brand’s annual financial forecast? • Sales: Project the growth rate for the year, and break it out on a quarterly basis, and then depending on the business a monthly sales forecast. • Market Share: This is like showing your work on the math test. It’s important that you map out the category size with related market share movement that helps to back up the sales call. • Product Costs: Roll up of plant manufacturing costs, related to the materials, production, shipping. Brands heavily reliant on materials that fluctuate on costs should flag the risk potential. • Marketing Spend: Mostly incremental spend by activity versus last year. It could be to support new product launch, an awareness building campaign or a defensive spend versus a competitor. Where it’s not incremental, you could do a specific test market with spend or use a comparable brand as a reference point. • Other Forecasts: Overhead, Headcount, Seasonal needs, R&D costs, Partnerships or Royalties and one-time investments that could be capitalized.
  45. 45. Brand Plan Example of the Marketing Budget Breakout Activities 2014 2015 2016 Comments Merchandisers Artwork 68 55 50 Merchandising went up significantly in 2015, we are expecting it to hold through 2016. Signage 200 300 300 Fees 300 500 500 TV Advertising Production 350 0 350 We make a new TV spot every 2 years, needs re-fresh behind new message for 2016 Talent 50 50 50 Media 800 850 800 TV media holding at 800, as we shift some spend to on line. Print Production 155 200 150 Major part of plan. Decline is more that we are shifting to on line version of same magazines. Talent 100 100 100 Media 1100 850 750 On Line Production 50 100 100 Talent 15 20 80 Media 100 260 520 On line continues to grow as we look to online to target Healthy Proactive Preventers Social Media 20 100 200 Using social media to connect to our most loyal users and creating a following for Gray’s. Sampling Sample costs 100 300 350 Supplier 100 100 125 Both events and retailer sampling shown to drive a high conversion of trial to usage and Event Costs 100 400 425 becoming a Loyal user. This will be a major part of our defense plan to tie up sampling events Retailer Costs 200 400 500 In Q1 to thwart the competitive launch. Research Tracking 100 150 250 Significant increase due to tracking of two new competitors plus ensuring Gray’s is healthy. Testing 100 150 250 Other Marketing Packaging 133 100 50 Sponsorship 100 500 0 Sponsorship did not pay out so it was cut to fund increases in sampling and on line. PR costs 59 77 200 Display Artwork 80 150 150 Display up significantly Signage 200 350 400 Fees 150 700 850 Trade Marketing Coop/Display 750 1200 1350 MARKETING BUDGET 5480 7962 8850 Increased in line with sales growth. Contingency defense spend. Case Study
  46. 46. We make brands stronger. We make brand leaders smarter. The Stake in the Ground: A Comparison Measure • Find a comparative stake in the ground, which will help you to make comparisons—either above or below that stake in the ground. • Examples could include last year’s sales, a competitive brand, a similar program or contract from the past, or a different geography extrapolated to the size of the market, market research projections The + or – Analysis • Put together a chart that shows how it might be bigger or smaller then the stake in the ground projection. Bigger Impact Lower Impact Examples: We have a relatively bigger share More advertising dollars Consumers like that flavor better It has a unique positioning More doctor support Example: We are last in the market. Pricing is lower. Not as much consumer appeal. Canadians don’t like that flavor. We are 4th in market. Put a stake in the ground: Map reasons why it’s bigger or smaller than the stake.
  47. 47. We make brands stronger. We make brand leaders smarter. Example of Making Projections Brand X is a new molecule in the medical market It is a new brand that brings new hope for doctors and pharmacists Stake in the Ground: Brand X could be as big as Y in Year 1 which was an 8% share and $80 Million in Sales Bigger Impact Lower Impact • Expected to get 25% more A&P support then what Brand Y got • It has 24 hour claim while Brand Y was only 12 hours • Doctor recommendation should add 25% more in sales • A 4% dollar share in month two, ahead of the 2% share Brand Y got. • Market is a lot more crowded than it was in 2005 when Y launched • Launching in March, which means we missed the Q1 sell in • While it’s a new molecule, it really has very little to say (congestion) • Launching at a significant price premium Conclusion: Brand X will be slightly bigger than Brand Y in Year 1. It will be 10% share and $100 Million in Sales
  48. 48. Brand Plan Example of the building blocks of a Sales Projection Forecast for 2015 $27,354 Current LE for the year. Forecasted Gains Comments Added Awareness $6,565 New consumers become aware of Grays Higher Trial Rate 2,000 Using awareness and sampling to drive trial Walmart listing 340 New food listing C store Listing 200 Based on success of last year's test New Innovation 1,500 Two new flavors in Q3 Forecasted Declines Two New Launches 4,500 Ipsos predicted impact on Gray's Lost spring displays 630 Cancelled displays to pay for defense plan Discontinued flavors 430 Cutting two worst performers Net Forecast for 2016 $30,385 Expected gain for 2016 will be +11% growth. Case Study
  49. 49. We make brands stronger. We make brand leaders smarter. We will help you unleash your full potential Brand Coaching Services
  50. 50. We make brands stronger. We make brand leaders smarter. We make brands stronger. We make brand leaders smarter. Our role is to challenge you to think differently about your future, so that you can realize your full potential. TM
  51. 51. We make brands stronger. We make brand leaders smarter. Define the Brand Think Strategically Big Idea At Beloved Brands, we use a branding approach Vision Analysis Key Issues Strategies Execution • Advertising • In-Store • Innovation • Consumers • Category • Channels • Competitors • Brand Values, Goals • Experience Brand Plan Create Brand Plans Inspire creative execution Analyze performance Sm art Creative Ideas
  52. 52. We make brands stronger. We make brand leaders smarter. We make brands stronger. We make brand leaders smarter. We lead a 360 assessment of your business, looking at the marketplace, consumers, channels, competitors and the brand. We help you define your brand, with a simple, unique, inspiring, motivating and own-able Brand Positioning Statement. We will create a Big Idea that will transform your brand’s soul into a winning brand reputation. We help you build a strategic Brand Plan that everyone who works on the brand can follow We coach on Marketing execution, helping to tighten the bond with your consumers and drive brand growth We will build a Brand Management training program, to unleash the full potential of your Marketing team. 1 2 3 4 5 6 TM
  53. 53. We make brands stronger. We make brand leaders smarter. We will lead a 360 brand assessment, looking at the marketplace, consumers, channels, competitors and brand Deep Dive Review Macro view of marketplace looking at economic, consumer, technology, trends. Define consumer target, looking at beliefs, buying habits, growth trends and key insights. 2 5 1 3 4 Understand brand performance and reputation. Use brand funnel, tracking results, pricing analysis, distribution gaps and financial results. Look at channel performance, customer strategies, distribution gaps, merchandising performance. Dissect closest competitors by looking at performance, positioning, innovation, pricing, distribution and reputationSummarize the analysis into drivers and inhibitors currently facing brand as well as threats and opportunities for the future. Drivers Inhibitors Factors of strength or inertia that accelerate your brand’s growth. Weaknesses or friction slows brand down, leak to fixi Opportunities Threats Changing consumer needs, technologies, channels, legal, Competitor launch, trade barriers, customer preference. 6 Look at macro subsegments or formats • Some different types of macro views you want to look at includes performance of size, format or benefit segments. Look at the channel performance at the category level. You can also look at macro competitive market share trends. • With each chart, you are looking for a break in the data to tell a story on the category. 0" 10" 20" 30" 40" 50" 60" XL" Large"size" Mid"Size" Travel"size" Overall" 2012" 2013" 2014" 2015" Healthy( Whitening( Freshening( Repair( 0" 20" 40" 60" 80" 100" 120" 140" Grocery" Drug" Mass" Club" Overall" 2012" 2013" 2014" 2015" Size Formats Benefit Segment Where sold Allergy Category $ Share 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% P E D ec 29 01 P E F eb 23 02 P E A pr20 02 P E June 15 02 P E A ug 10 02 P E O ct05 02 P E N ov 30 02 Jan 25 2003 M ar22 2003 M ay 17 2003 July 12 2003 S ept06 2003 N ov 01 2003 D ec 27 2003 Feb 21 2004 A pr17 2004 June 12 2004 A ug 07 2004 O ct02 2004 N ov 27 2004 Jan 22 2005 M ar20 2005 M ay 14 205 Jul9 2005 S ep 3 2005 O ct29 2005 Reactine Benadryl Claritin Aerius Allegra Chlor-Tripolon C/L Competitive Market Share Category Analysis The Brand Funnel Awareness Familiar Consider Purchase Repeat Loyal Unknown Indifferent Love It Like It Beloved The Brand Love Curve 0 15 30 45 60 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Gray's Dad's Sue's Devonshire Competitive market share performance Customer scorecards Customer A Scores Overall Sales Dollars 39 Share of Category 11% % dollar change +19.1% Your Brand Share 33% % change +3.3 points Share Index 105 Your brand’s avg Price $6.33 % change +3.3% Price Index 125 Share of Co-Op Ads 33% % change +18% Co Op Index 143 Share of Merch 25% % change -2% March Index 111 Customer scorecards Customer A Scores Overall Sales Dollars 39 Share of Category 11% % dollar change +19.1% Your Brand Share 33% % change +3.3 points Share Index 105 Your brand’s avg Price $6.33 % change +3.3% Price Index 125 Share of Co-Op Ads 33% % change +18% Co Op Index 143 Share of Merch 25% % change -2% March Index 111 and versus other periods. Pricing Differences by Channel First, look at the average price and change versus year for each channel. Match up the data to what the sales colleagues are saying about the different prices for each ch Depending on channel/brand, you should be looking at deal pricing, % on deal and coop ad points. Compare ea the channels and compare to prior years. Food Drug Mass Club Avg Price $6.55 $6.47 $6.62 $6.54 % change vya -6.4% -2% +3.1% -1.9% Avg Price on Deal 5.99 6.59 5.29 5.49 % change vya +8.3% -12.3% +1.7% +2.7% % on deal 32% 22% 38% 20% +/- vya +7 pts +1 pt +10 pts -2 pts A B We make We make brand Distribution gap analysis Tops Kroger CVS Club A&P Safeway 7-1 Gray’s 8 ct Choc Chip Gray’s 16 ct Choc Chip Gray’s 8 ct Mint Chip Gray’s 16 ct Mint Chip Gray’s 8 ct Lemon W We ma Distribution gap analysis Tops Kroger CVS Club A&P Safewa Gray’s 8 ct Choc Chip Gray’s 16 ct Choc Chip Gray’s 8 ct Mint Chip Gray’s 16 ct Mint Chip Gray’s 8 ct Lemon W We mak Draw conclusions. Compare how you're doing in each channel and versus other periods. We We make Pricing Differences by Channel First, look at the average price and change versus year ago, for each channel. Match up the data to what the sales colleagues are saying about the different prices for each channel. Depending on channel/brand, you should be looking at the deal pricing, % on deal and coop ad points. Compare each of the channels and compare to prior years. Food Drug Mass Club Avg Price $6.55 $6.47 $6.62 $6.54 % change vya -6.4% -2% +3.1% -1.9% Avg Price on Deal 5.99 6.59 5.29 5.49 % change vya +8.3% -12.3% +1.7% +2.7% % on deal 32% 22% 38% 20% +/- vya +7 pts +1 pt +10 pts -2 pts A A B B We make brands stron We make brand leaders sma Distribution gap analysis Tops Kroger CVS Club A&P Safeway 7-11 Gray’s 8 ct Choc Chip Gray’s 16 ct Choc Chip Gray’s 8 ct Mint Chip Gray’s 16 ct Mint Chip Gray’s 8 ct Lemon We make b We make brand l Distribution gap analysis Tops Kroger CVS Club A&P Safeway 7-11 Gray’s 8 ct Choc Chip Gray’s 16 ct Choc Chip Gray’s 8 ct Mint Chip Gray’s 16 ct Mint Chip Gray’s 8 ct Lemon Program tracking shows how well you are doing behind key marketing activities • Program tracking or testing results can compare how well the program has done against key measures. • You will also be able to get scores that match up to the brand funnel such as Awareness (aided, unaided), purchase scores (share of last 5 purchases) and purchase intention. Tracking Results Gray’s Norm Aided Recall 38 62 Unaided Recall 30 46 Brand Recognition 10 23 Brand Link .33 .50 Main Message 64 60 Uniqueness 38 22 Purchase Intent 10 9 Ad Tracking Brand Analysis
  54. 54. We make brands stronger. We make brand leaders smarter. Define a focused consumer target profile with insights, enemies and buying patterns. Use our Benefits Ladder to move from features to rational and emotional benefits We will help you define your brand, with a simple, unique, motivating and own-able Brand Positioning Statement. 2 5 1 Use our benefit cheat sheets to understand the Functional and Emotional benefits you can own. 3Benefits Ladder 4 Determine your winning zone, where your brand is better, different or cheaper. Winning positioning statement that is unique, own- able motivating to consumers Brand Positioning Building a winning brand positioning statement To (Target) • Healthy proactive preventers who want to do more for their health, working moms, who are 35-40 years old. Gray’s is the (Category) • Tasty healthy cookie option That is the (Benefit) • Guilt free cookie that tastes so good that you can stay in control of your health That’s because (Support Points) • In blind taste tests, Gray’s matched the leaders on taste, but only 100 calories and 3g of net carbs. • In a 12-week study, consumers using Gray’s once a night as a desert were able to lose 5-10 pounds. 1 2 3 4 Consumer Target Product features Functional benefits Emotional benefits Works betterFunctional Benefits Simplify Life Make Smarter Make Healthier Saves money Helps family Sensory Appeal Stay Connected Experience Seek knowledgeFunctional Benefits Stay in control Feel myself Feel comfortable Feel optimistic Feel free Get noticed Feel liked
  55. 55. We make brands stronger. We make brand leaders smarter. Brand’s Big Idea We will help create a Big Idea that will transform your internal brand soul into a winning external brand reputation. The Big Idea helps simplify the brand message as an outward expression of the inner Brand Soul We make brands stro We make brand leaders sm Promise Brand Story Innovation Purchase Moment Experience Big Idea Brand Positioning Advertising and Communication Product Development Selling and Retail Operations and Culture Consumer The Brand Big Idea Drive consistency using the brand’s Big Idea to show up the same way at all 5 consumer touch-points Consumers have 7 seconds to connect with a brand’s Big Idea A brand finds its equilibrium when the Big Idea impacts a brand reputation to perfectly match up to the Brand Soul Soul Reputation= Based on their personal experiences, consumers form a reputation they spread to others. 1 2 3 4 5 =Big Idea Brand Soul Consumer
  56. 56. We make brands stronger. We make brand leaders smarter. 2 4 31 Strategic questions to help frame the key issues 5 We will help build a strategic Brand Plan that everyone who works on the brand can follow Drivers and inhibitors currently facing brand. Risks and opportunities for future. Deep dive review looks at every potential area of the brand • Market: Macro view, economic indicators, consumer behavior, technology, political • Consumer: Target, buying habits, trends, consumer enemies, key insights • Channels: growth channels, major customers, available tools and programs • Competitors: Performance, positioning, innovation, pricing, distribution, perceptions. • Brand: Funnel, reputation, tracking results, pricing, distribution, financial analysis. Drivers Inhibitors Factors of strength or inertia that accelerate your brand’s growth. Weaknesses or friction slows brand down, leak to fixi Opportunities Threats Changing consumer needs, technologies, channels, legal, Competitor launch, trade barriers, customer preference. What is the core strength your brand can win on? How engaged are consumers? What is your current competitive position? How tightly connected is your consumer to your brand? What is the current business situation your brand faces? 3 1 5 4 We make brands stronger. We make brand leaders smarter. 1. Where could we be? 2. Where are we? 3. Why are we here? 4. How can we get there? 5. What do we need to do? Before getting started on your Brand Plan, map out your strategic thinking by asking 5 simple strategic questions Vision/Purpose/Goals Situation Analysis Key Issues Strategies Execute & Measure Questions to ask Planning elements 1 2 3 4 5 6 Use “where are we” questions to uncover answers that frame the overall brand plan. Lay out elements of the Brand Plan, on one page and in a formal presentation Brand Plan 2 The Annual “Brand Plan On a Page” Analysis Issues and Strategies Executional Plans P&L forecast • Sales $30,385 • Gross Margin $17,148 • GM % 56% • Marketing Budget $8,850 • Contribution Margin $6,949 • CM% 23% Drivers • Taste drives a high conversion of Trial to Purchase • Strong Listings in Food Channels • Exceptional brand health scores among Early Adopters. Highly Beloved Brand among niche. Inhibitors • Low familiar yet to turn our sales into loyalty • Awareness held back due to weak Advertising • Low distribution at specialty stores. Poor coverage. • Low Purchase Frequency even among most loyal. Threats • Launch of Mainstream cookie brands (Pepperidge Farms and Nabisco). • De-listing 2 weakest skus weaken in-store presence • Legal Challenge to tastes claims Opportunities • R&D has 5 new flavors in development. • Sales Broker create gains at Specialty Stores • Explore social media to convert loyal following. Key Issues 1. What’s the priority choice for growth: find new users or drive usage frequency among loyalists? 2. Where should the investment/resources focus and deployment be to drive our awareness and share needs for Gray’s? 3. How will we defend Gray’s against the proposed Q1 2014 ‘healthy cookie’ launches from Pepperidge Farms and Nabisco? Strategies 1. Continue to attract new users to Gray’s 2. Focus investment on driving awareness and trial with new consumers and building a presence at retail. 3. Build defense plan against new entrants that defends with consumers and at store level. Goals • Increase penetration from 10% to 12%, specifically up from 15% to 20% with the core target. Monitor usage frequency among the most loyal to ensure it stays steady. • Increase awareness from 33% to 42%, specifically up from 45% to 50% within the core target. Drive trial from 15% to 20%. Focus for sales is to close distribution gaps going from 62% to 72%. • Hold dollar share during competitive launches and continue to grow 11% post launch gaining up to 1.2% share. Target zero losses at shelf. Advertising • Use awareness to drive trial of the new Grays. Target “Proactive Preventers”. Suburban working women, 35-40.Main Message of “great tasting cookie without the guilt, so you can stay in control of your health”. Media includes 15 second TV, specialty health magazines, event signage, digital and social media Sampling • Drive trial with In-store sampling at grocery, Costco, health food stores and event sampling at fitness, yoga, women’s networking, new moms. Distribution • Support Q4 retail blitz with message focused on holding shelf space during the competitive launches. Q2 specialty blitz to grow distribution at key specialty stores. Innovation • Launch two new flavours in Q4/15 & Q4/16. Explore new diet claims, motivating and own- able. Competitive Defense Plan • Pre Launch sales blitz to shore up all distribution gaps. At launch, heavy merchandising, locking up key ad dates, BOGO. TV, print, coupons, in-store sampling. • Use sales story that any new “healthy” cookies should displace under-performing and declining unhealthy cookies. Brand Vision: To be the first ‘healthy cookie’ to generate the craving, popularity and sales of a mainstream cookie. $100 Million brand by 2020. Forecast Analysis Brand Vision Strategies Execution Key Issues Goals 1 5 4 3 2 6 5
  57. 57. We make brands stronger. We make brand leaders smarter. We make brands stronger. We make brand leaders smarter. Promise Brand Story Innovation Purchase Moment Experience Big Idea Brand Positioning Advertising and Communication Product Development Selling and Retail Operations and Culture Consumer The Brand Innovation drives ideas, concepts, testing, launches through system.Build culture to support consumer experience creating a brand credo with purpose, values, service behaviors. 2 4 3 1 CREATIVE(BRIEF(( 1.""Why(Are(We(Adver3sing( Drive&trial&of&the&new&Grays&Cookies&as&“The&Healthy&Choice&to&Snacking”&brand&posi>oning.&&& 2.#What’s(the(Consumer(Problem(We(are(Addressing( I’m&always&watching&what&I&eat.&&And&then&BAM,&I&see&a&cookie&and&I’m&done.&&As&much&as&I&look&aHer& myself,&I&s>ll&like&to&sneak&a&cookie&now&and&then.&&" 3.((Who(are(you(talking(to?( “Proac>ve&Preventers”.&Suburban&working&women,&35L40,&&who&are&willing&to&do&whatever&it&takes&to& stay&healthy.&&They&run,&workout&and&eat&right.&For&many,&Food&can&be&a&bit&of&a&stressLreliever&and& escape&even&for&people&who&watch&what&they&eat.&&&&" 4.((Consumer(Insights( L&“I&have&tremendous&willLpower.&&I&work&out&3x&a&week,&watch&what&I&eat&and&maintain&my&figure.&&But& we&all&have&weaknesses&and&cookies&are&mine.&&I&just&wish&they&were&less&bad&for&you”& L&&“I&read&labels&of&everything&I&eat.&&I&s>ck&to&1500&calories&per&day,&and&will&find&my&own&ways&to& achieve&that&balance.&&&If&I&eat&a&400&calorie&cookie,&it&may&mean&giving&something&up.”& 5.(What(does(our(consumer(think(now?( I’ve&never&heard&of&Grays&Cookies.&&But&I’d&likely&need&to&try&it&and&see&if&I&like&it.&&If&it&really&does&taste& that&good,&it’s&something&I&might&consider&as&a&snack.&&& 6.((What(do(you(want(your(consumer(to(think/feel/do?((Desired(Response)( We&want&them&to&try&Grays&and&see&if&they&like&the&great&taste.&&" 7.((What(should(we(tell(them?((S3mulus:((benefit)( With&Grays&Cookies&you&can&s>ll&have&a&great&tas>ng&cookie&without&the&guilt,&so&you&can&stay&in& control&of&your&health.&& 8.((Why(should(they(believe(us?( In&blind&taste&tests,&Grays&Cookies&matched&the&market&leaders&on&taste,&but&only&has&100&calories&and& 2g&of&fat.&&In&a&12&week&study,&consumers&using&Grays&once&a&night&as&a&desert&were&able&to&lose&5lbs.&&& 9.((Brand(Posi3oning(Statement( For&“Proac>ve&Preventers”,&Women&30L45,&Grays&Cookies&are&the&best&tas>ng&yet&guiltLfree&pleasure# so&you&can&stay&in&control&of&your&healthy&lifestyle.&&That’s&because&Grays&combines&the&great&taste&in&a& low&fat&and&calorie&sensible&cookie.&In&blind&taste&tests,&Grays&Cookies&matched&the&market&leaders&on& taste,&but&only&has&100&calories&and&2g&of&fat.&&In&a&12&week&study,&consumers&using&Grays&once&a&night& as&a&desert&were&able&to&lose&5lbs.&&& 10.((Tone(and(Manner( Successful,&Mo>vated,&Reliable,&In&Control,&Natural.& 11.((Media(Op3ons( Main&crea>ve&will&be&in&specialty&health&magazines,&event&OOH&signage&and&inLstore.&&Want&to&carry& the&idea&into&digital,&social&media&and&a&microsite.&&& 12.((Mandatories( The&line:&“best&tas>ng&yet&guiltLfree&pleasure”&is&on&the&packaging.&25%&of&Print&must&carry&the&Whole& Foods&logo&as&part&of&our&lis>ng&agreement&and&include&the&Legal&disclaimer&on&the&taste&test&and&the& 12&week&study.&&& Brief focuses creative & media decisions on positioning & strategy 5 Influence purchase moment through channels, e-commerce, selling and merchandising At Beloved Brands, we promise to make your brand stronger and your brand leaders smarter. We believe big ideas, focus and passion matter, because the more loved a brand is by consumers, the more powerful and profitable that brand will be. We will challenge you to think different, because the thinking that got here may not get you to the next level. Our Credo Align execution to focus on moving consumers through stages of the buying system Consumers connect with Big Idea through 5 supporting touch-points Consider Satisfied Buy Search Fan Loyal Repeat Aware 6 We coach on Marketing execution, helping to tighten the bond with your consumers and drive brand growth Marketing Execution
  58. 58. We make brands stronger. We make brand leaders smarter. We will build a Brand Management Training Program, to unleash the full potential of your Marketing team. Training Program Strategic Thinking Brand Positioning Brand Plans Creative Briefs Brand Analytics and the Business Review Marketing Execution Creating a Beloved Brand Consumer Centricity Managing your Marketing Career 1 2 6 4 5 3 7 8 9 Menu of training programs
  59. 59. Investing in your people pays off with smarter strategies, amazing execution and stronger brand results We will unleash the full potential of your people so you will see a direct impact on your brand’s growth trajectory. We will train your team on the fundamentals of brand management • Address gap on brand analytics and strategic thinking, to ensure you end up with smarter Brand Plans and Creative Briefs. • Improve judgment and decision-making to ensure your Marketing execution pays back. • We can see first hand the impact that training has on your team’s skills, motivations and behaviors. • Our workshop style training provides an immediate impact on their day-to-day jobs.
  60. 60. We make brands stronger. We make brand leaders smarter. Graham spent 20 years in Brand Management leading some of the world’s most beloved brands at Johnson and Johnson, Pfizer, General Mills and Coke, rising up to VP Marketing. In his career, he has won numerous Advertising and Innovation awards. Graham played a major role in helping Pfizer win Marketing Magazine’s “Marketer of the Year” award. Graham started Beloved Brands believing he could make brands stronger and brand leaders smarter. Graham will challenge you and your team to think differently and strategically. He leads workshops that will help define your Brand Positioning Statement, create a Big Idea for your brand, and write Brand Plans to motivate and focus everyone that works on the brand. He will build Brand Management training programs that will help unleash the full potential of your team, so your team can produce exceptionally smart work that drives stronger brand results. The Beloved Brands robust client roster has included the NFL Players Association, Reebok. Acura, Shell, Jack Link’s, 3M, Melitta, Capital One and Pfizer. Graham Robertson at Beloved Brands One of the voices of today’s Brand Leaders.
  61. 61. We make brands stronger. We make brand leaders smarter. Graham Robertson at Beloved Brands Significant career experience in Brand Management Education • MBA, Ivey School of Business, Western University, 1994 • Bachelor of Commerce, Carleton University, 1989 Work History • President, 2009- Present • VP Marketing, 2005-08 • Group Brand Director, 1999-2005 • Senior Brand Manager, 1997-99 • Associate Brand Manager, 1994-96 • Coca-Cola, Summer Marketing Intern, 1993 • Marketing Training Program, 1989-92
  62. 62. We make brands stronger. We make brand leaders smarter. Do you want to get smarter about Marketing? Visit beloved-brands.com Over 5 million views from Marketers getting smarter
  63. 63. We make brands stronger. We make brand leaders smarter. We would love the opportunity to help you unleash the full potential of your brand and the full potential of your team of brand leaders. Graham Robertson • 416 885 3911 • graham@beloved-brands.com

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