Functional and emotional benefits

1. THE BRAND LEADER Exploring your brand’s potential functional and emotional benefits In the new economy, Brand Love is the new currency, with marketing shifting to building big ideas, leveraging purpose-driven stories that are in the moment, creating consumer experiences that people talk about, managing ubiquitous purchase moments all helping to steer the brand’s reputation. Marketing has to focus on creating a brand reputation with consumers, and equally creating an organizational culture that reflects the brand’s soul. Instead of shouting your message at every consumers, the best brands confidently whisper to those most motivated by what they do, who then scream with influence to their friends. In the new world, the best brands now fight for a place in the minds and hearts of consumers. Beloved Brands 1 We make brand leaders smarter

2. Brands need to be better, different, cheaper or not around for very long. One of the biggest mistakes that brands make is “yelling at” the consumer with features (what you do) rather than “speaking with” the consumer, about the functional benefits (what they get) and the emotional benefits (how they feel). Watch half an hour of TV one night and you will see brand after brand yelling at the consumer. Feature after feature after feature. This type of Marketing just forces the consumer to have to figure out what they get from your brand. In a crowded media world where consumers see 7,000 brand messages per day, you have just lost out on the opportunity to find a set of consumer oriented benefits that your brand can use to motivate the consumer and own as you build the reputation of your brand. Brands have to stand out or die. If we look the chart below, the Winning Zone for your brand forces you to think about finding the ideal space where your brand matches up to a distinct consumer need better than anyone else. If not, your brand won’t be around for very long. You should avoid competing in the Losing Zone, which goes head to head with a competitor that can deliver the consumer needs better than you can. The area with the yellow arrow is the Risky Zone is a relative tie with your competitor. You can win the tie is by being first, being more innovative and creative or by finding the right emotional connection that makes the functional tie less relevant to the consumer decisions. Avoid the Dumb Zone, where you wage a competitive battle in a space that the consumer does not care about. When you find yourself competing in this space, you will find yourself eventually just talking to yourself. Beloved Brands 2 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. What consumers want What your competitor does best What your brand does best Losing Zone Risky Zone Dumb Zone Winning Zone

3. Finding your brand’s core strength While the temptation for most Marketers is to do a little of everything, it is the best Marketers who come to a decision point and make the tough choice by picking one. Most of our tools are forced decision-making tools that will help the debate and guide your focus. When it comes to the core strength of your brand, we give you four choices: product, promise, experience or price. Many brand leaders have their marketing strategy wrong, simply because they don’t know their core strength. Here’s a simple little game that we play with executive teams. We provide them with 4 chips against the 4 choices of product, promise, experience or price. They have to put one chip on the one choice they believe they have the highest potential to win behind, two chips at the mid level and then force one chip to be at the low level. Try it and you will be surprised that your team will struggle to agree. You may also find that you are at one strength now and figure that your brand has matured and it might be the right time to shift your brand marketing to become focused on something else. For instance, many brands start off as products and then move to either building a promise or an experience. • Product: Your main strategy should focus on being better. You have to invest in Innovation to stay ahead of competitors, remaining the superior choice in the category. The classic product brands in the market include Samsung, Tide, Ruth’s Chris, Google, Rolex and Five Guys. • Promise: Your strategy should focus on being different. To tell that story, you need to invest in emotional brand communication. You want to connect consumers on a deep emotional level with the concept. The promise brands in the market include Apple, Nike, Tesla, Virgin and Dove. • Experience: your strategy and organization should focus on linking culture very closely to your brand. After all, your people are your product. As you go to market, invest in influencer and social media that can help support and spread the word of your experience. The experience brands in the market include Starbucks, Amazon, AirBnB, Ritz-Carlton, Netflix and Emirates airlines. • Price: focus on efficiency and drive low-cost into the products you sell and high turns and high volume. You have to be better at the fundamentals around production and sourcing. The price Beloved Brands 3 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. What is your brand’s core strength? PromiseProduct Price Experience Highly Competitive Medium LowFocus on what you are best at. Let go what matters the least. We give 4 chips, forcing one at the high, two at the middle to support the strength, and let go of one at the low.

4. brands include Walmart, Kia, Expedia, McDonald’s, Old Navy and Payless shoes. Just like any decision, it is hard to just pick one. Each has a different focus of investment and a different type of selling and marketing that is required to be successful. The problem is that brands that fail to realize who they are will start to apply the wrong strategy to the wrong brand situation. Many brands choose to be a little both. These brands end up with a confused internal organization and a confused external consumer reputation. Consumer Benefits Ladder The next decision is the main benefit you want to focus on. Doing a Consumer Benefits Ladder helps to organize your thinking as a great tool for bringing the benefits to life. The best way to work the Consumer Benefits Ladder is to hold a brainstorming session with everyone who works on the brand so you can: 1. Leverage all the available research to brief the team, helping define the consumer target and get all the consumer insights and need states out. 2. List out all the features that your brand offers, and the brand assets it brings to the table. Make sure that these features are competitive advantages. 3. Find the functional Beloved Brands 4 We make brand leaders smarter

5. benefit by putting yourself in the shoes of the consumer and seeing the brand features from their eyes: start asking yourself over and over “so if I’m the consumer, what do I get from that?”. Ask up to 5 times and push the answers into a richer zone. 4. Then find the emotional benefit by asking “so how does that make me feel?” As you did above, keep asking, and you’ll begin to see a deeper emotional space you can play in and own. What are the functional benefits? To help brand leaders, we have mapped out 9 functional benefit zones and then expanded that to 50 overall functional benefits. As you look through the list, start matching up those benefits that you think will be something consumers want, something that can be unique for your brand and something you can own in the future. What are the emotional benefits? From my experience, Marketers are better at the rational benefits than they are at the emotional benefits. I swear every brand out there thinks their brand should be the trusted, reliable and yet like- able brand. As a brand, you want to own the emotional space in the consumer’s heart as much as Beloved Brands 5 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. Makes you smarter Works Better Helps your family Helps you be healthier Faster More powerful Safer Lasts Longer Keeps you organized Saves time Social Latest Fashions Latest technology Sounds Taste Smell Sights Education Comfort Life Stages Mental Health Better Home Prevents Weight/ExerciseLower Risk Track Success Resale value Invest for future Advice Solutions Teaching Helping hand Sensory Appeal Simplifies your life Stay Connected Hassle Free Functional benefits Easier to use Touch/Feel Good value Quality Reduces Soothes Cultural How it is made Saves you money Experience Variety Personal Service In touch Moments Responsiveness Memorable Occasion Rituals Updates Luxurious Performance IntegratedEfficient Subconscious

6. you own the rational space in the consumer’s mind. It seems that not only do consumers have a hard time expressing their emotions about a brand, but so do Brand Managers. Companies like Hotspex have mapped out all the emotional zones for consumers. I’m not a researcher, but if you are interested in this methodology contact Hotspex at http://www.hotspex.biz We have taken this research method and created an Emotional Cheat Sheet for Brand Leaders. This lists out the 8 major emotional consumer zones, optimism, freedom, being noticed, being liked, comfort, be myself, be in control and knowledge. To own a space in the consumer’s heart, you want to own and dominate one of zones, always thinking relation to what your competitor may own. Do not choose a list of emotions from all over the map, or you will just confuse your consumer as much as trying to own a long list of rational beneﬁts. Once you narrow the major emotional zone you can own, you can use the supporting words of the Emotional Cheat Sheet to add ﬂavor. Beloved Brands 6 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. Curious for knowledge Feel optimistic Stay in control Feel comfortable Feel myself Motivated Special Successful Inspired Interesting Alive Cool Playful Popular Trendy Like-able Friendly Intimate Happy Easy- going Nurtured Compassion Down-to--earth Relaxed Honest Family Trust Safe Respect Reliable Informed Wisdom Smarter Competent Feel liked Feel free Get noticed Excited Emotional benefits Consumer Values

7. Build your brands around clusters of benefits As you are looking for the benefits to that your brand stand behind, we recommend that you look at clusters of the functional and emotional benefits, that you believe match up with what consumers want and what your brand does better than other competitors. Look at our example below, we have mapped out the positioning clusters of three distinct car brands (Volvo, Honda, Ferrari) to showcase how different the functional and emotional benefits. • The Volvo brand is notorious for safety, but can also look at quality and how it is made as part of the “Works Better” functional benefit zone. Volvo also makes you smarter and helps your family. The emotional zones where Volvo wins is in are being in control and curious for knowledge. • The Honda mini-van is all about family and value for money. Its functionality also can simplify your life. As it is a family car, the emotional zones that Honda can win are being myself and comfort. • The Ferrari brand is built around speed and performance, part of the “works better” functional benefit zone. The brand also delivers against experience and sensory appeal. Beloved Brands 7 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. Build your brand around unique benefit clusters Helps your family Keeps you organized Life Stages Better Home Resale value Simplifies your life Saves you money Moments Efficient Feel comfortable Feel myself Easy-going Nurtured Down- to--earth Relaxed Honest Family Functional Emotional Curious for knowledge Stay in control Trust Safe Reliable Informed SmarterWisdom Makes you smarter Works Better Safer Life Stages Better Home Solutions Helping hand Quality Helps your family How it is made Works Better Faster Sights Sensory Appeal Touch/Feel Quality Experience Responsiveness Subconscious Luxurious Performance Alive Cool Playful Popular Feel free Get noticed Excited Comfort Comfort Memorable Sounds Good value Stay in control

8. Sorting the benefits When we brainstorm around a given brand, we normally end up with too much information. Building on the work from the cluster of benefits to the Consumer Benefit Ladder, we see this type of output for our fictional Gray’s Cookie brand. Following this brainstorm, there are way too many potential benefits to really begin building your brand. You can use your working knowledge of the brand to begin looking at which of the functional and emotional benefits will help your brand win in the market. Then use Market Research with consumers to sort through the possible benefits to find the ones that are the most motivating to consumers and own-able for your brand. The grid we use looks at two dimensions: 1. How motivated consumers are by the benefit 2. How own-able is this benefit for you brand. Looking at the grid below, you want to focus and build your brand around those consumer benefits that land in the highly motivating and highly own-able quadrant. This Winning Zone matches up to the venn diagram we showed earlier. Avoid the losing and dumb zones while any benefits that end up in the risky zone will require speed to market, more creativity and emotional marketing. Beloved Brands 8 We make brand leaders smarter

9. Looking at the Gray’s Cookie example, we can see how “guilt free alternative” consumer benefit has the highest potential to motivate consumers and the highest potential for ownership by the brand. The benefits of “new favorite cookie” are highly motivating, but would be owned by the major mass brands in the category. Support points to the main benefit I took one logic class at University and sat there for 13 straight weeks of premise-premise conclusion. Easy class, but the lesson has stuck with me: • All fish live in water (premise) • Tuna are fish (premise) • Therefore, tuna live in the water (conclusion) In a positioning statement, the main consumer benefit would be the conclusion. And the reason to believe (RTB) would be the supporting premise. I say this for a few reasons. First, the RTB should never be the conclusion. The consumer doesn’t care about what you do, until they get something from it. The benefit has to come from being the consumers’ shoes to realize what they get and how it makes them feel. Second, if pure logic teaches two premises are enough to draw any conclusion, then you really only need two RTBs. Brands with a laundry list of RTBs are not doing their job in Beloved Brands 9 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. Sort through the possible benefits to find the ones that are most motivating to consumers and own-able for your brand. How OWN-ABLE is this benefit for your brand How MOTIVATED are consumers by your benefit High High Low Low Losing Zone Winning Zone Dumb Zone Risky Zone Guilt Free Alternative Low Calorie Less Fat All Natural Ingredients Lose 5 pound in 2 weeks Feel Smarter about food Feel in control of your weight Feel more confident Feel more comfort in choices New Favorite Cookie

10. making a decision on what the best support points are. You either force the ad agency to decide what are the most important or the consumer to decide. By deferring, you’re weakening your argument. Claims can be an effective tool in helping to support your Reason to believe. We look at four types of claims: process, product, third person and behavioral. Process • Detail how your product works differently • Showcase your point of difference in the production process. • What do you do differently within the production process • What added service/details do you provide in the value chain Product • Usage of an ingredient that makes you bette • Process or ingredient that makes you safer Third person • Experts in the field who can speak on the brand’s behalf. • Past users/clients with proof support of their stories. Behavioral • Clinical tests • In market usage study • Before and after studies Bring the 4 elements together to create a winning Brand Positioning statement After doing all the homework, you should be able to put together a winning Brand Positioning Statement that addresses: 1. Who is in the consumer target? What slice of the population will be the most motivated to buy what you do? The first thing to decide is the consumer target, which should be your first point of focus, so that you can find the slice of the Beloved Brands 10 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. 4 elements of a brand positioning statement To (Target) • Who is in the consumer target? What slice of the population will be the most motivated to buy what you do? Your brand is the (Category) • Where do you play? What is the frame of reference that helps to define the space in the marketplace that you compete in? That is the (Benefit) • Where do you win? What is the promise you will make to the consumer target, thinking about the main benefit (rational/emotional) you are promising to deliver? That’s because (Support Points) • Why should they believe us? What support points help to back up the main benefit? 1 2 4 3

11. population that will be the most motivated by what you do. The mistake for many Marketers is they think about who you want, and they forget to ask who wants you. Who is the most motivated to buy what you do? 2. Where do you play? What is the frame of reference that helps to define the space in the marketplace that you compete in? We then frame the positioning by determining the category you play in, defining the competitors you will position yourself against. No one really operates in a blue ocean space, as positioning is always relative to some other choice the consumer can make. 3. Where do you win? We then need to determine the main promise you will make to the consumer target, in the sense of a benefit for the consumer, both the rational and emotional. Think about what does the customer get, and how does it make them feel? 4. Why should they believe us? Finally, we will look to understand what support points are needed to back up the main promise you are making. These support points have to support the main benefit, not just random claims or features that you want to jam into your brand message. Moving from the brainstorm of the Consumer Benefit Ladder, using the research to focus on “Guilt Free Cookie” as the most motivating and own-able benefit, we can see the final brand positioning statement for Gray’s Cookies.  Beloved Brands 11 We make brand leaders smarter We make brands stronger. We make brand leaders smarter. 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.

12. Beloved Brands: Who are we? At Beloved Brands, we promise that we will make your brand stronger and your brand leaders smarter. We can help you come up with your brand’s Brand Positioning, Big Idea and Brand Concept. We also can help create Brand Plans that everyone in your organization can follow and helps to focus your Marketing Execution. We provide a new way to look at Brand Management, that uses a provocative approach to align your brand to the sound fundamentals of brand management. We will make your team of Brand Leaders smarter so they can produce exceptional work that drives stronger brand results. We oﬀer brand training on every subject in marketing, related to strategic thinking, analytics, brand planning, positioning, creative briefs, customer marketing and marketing execution. Beloved Brands Training program At Beloved Brands, we promise to make your team of BRAND LEADERS smarter, so they produce smarter work that drives stronger brand results. 1. How to think strategically: Strategic thinkers see “what if” questions before seeing solutions, mapping out a range of decision trees that intersect and connect by imagining how events will play out. 2. Write smarter Brand Plans: A good Brand Plan provides a road map for everyone in the organization to follow: sales, R&D, agencies, senior leaders, even the Brand Leader who writes the plan. 3. Create winning Brand Positioning Statements: The brand positioning statement sets up the brand’s promise to the consumer, impacting both external communication (advertising, PR or in- store) as well as internally with employees who deliver that promise. 4. Write smarter Creative Briefs: The brief helps focus the strategy so that all agencies can take key elements of the brand plan positioning to and express the brand promise through communication. 5. Be smarter at Brand Analytics: Before you dive into strategy, you have to dive into the brand’s performance metrics and look at every part of the business—category, consumers, competitors, channels and brand. 6. Get better Marketing Execution: Brand Leaders rely on agencies to execute. They need to know how to judge the work eﬀectively to ensure they are making the best decisions on how to tell the story of the brand and express the brand’s promise. 7. How to build Media Plans: Workshop for brand leaders to help them make strategic decisions on media. We look at media as an investment, media as a strategy and the various media options—both traditional and on-line. 8. Winning the Purchase Moment: Brand Leaders need to know how to move consumers on the path to purchase, by gaining entry into their consumers mind, help them test and decide and then experience so they buy again and become a brand fan. Beloved Brands 12 We make brand leaders smarter

13. Graham Robertson at Beloved Brands A NEW WAY to look at Brand Management. Graham is one of the voices of the modern Brand Leader. He started Beloved Brands knowing he could make brands stronger and brand leaders smarter. Beloved Brands will challenge you to think strategically so you can create a Brand Positioning, a Brand Concept and a Big Idea for your brand. Graham will help write Brand Plans that focus everyone who work on the brand and make your team of Brand Leaders smarter so they can produce better work that drives stronger brand results. 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. Graham played a major role in helping Pﬁzer win Marketing Magazine’s Marketer of the Year. His public speaking appearances inspire brand leaders to love what they do. Over 4 million marketers have visited his website,beloved-brands.com with the desire to become smarter. Graham has served as a contributing author to Advertising Age in the US and Marketing Magazine in Canada. To contact Beloved Brands, email graham@beloved-brands.com or call 416-885-3911. You can also follow us on Twitter @belovedbrands. Beloved Brands 13 We make brand leaders smarter

Functional and emotional benefits

Beloved Brands Inc.

Functional and emotional benefits