Essentials Of Branding


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This is an introduction to branding for people that have had little exposure before.It looks at branding basics, compares marketing to branding, and briefly looks at successful marketing tactics. It also covers the elements of a marketing plan.

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  • Essentials Of Branding

    2. 2. NEXT GENERATION BRANDING <ul><li>AGENDA: Outline </li></ul><ul><ul><li>Branding principles </li></ul></ul><ul><ul><ul><li>New rules for a new business era </li></ul></ul></ul><ul><ul><li>Malaysia boleh! </li></ul></ul><ul><ul><ul><li>A Malaysian brand success story </li></ul></ul></ul><ul><ul><li>Action items for success </li></ul></ul><ul><ul><ul><li>How to build your brand </li></ul></ul></ul><ul><ul><li>Participate! </li></ul></ul>
    3. 3. BRANDING PRINCIPLES <ul><li>WHY BRAND?: Branding advantages </li></ul><ul><ul><li>Shortens sales cycles </li></ul></ul><ul><ul><li>Maximizes marketing spend </li></ul></ul><ul><ul><li>Facilitates repeat sales </li></ul></ul><ul><ul><li>Enables premium pricing </li></ul></ul><ul><ul><li>Blocks competitors </li></ul></ul><ul><ul><li>Independence from OEM relationships </li></ul></ul><ul><ul><li>Attracts strategic alliances & partners </li></ul></ul><ul><ul><li>Best path toward profitability </li></ul></ul>
    4. 4. BRANDING PRINCIPLES BRANDING: Definition <ul><li>Logos? </li></ul><ul><li>Advertising? </li></ul><ul><li>Brochures? </li></ul><ul><li>“ SuperBrand award”? </li></ul><ul><li>TV? </li></ul><ul><li>Expensive? </li></ul><ul><li>International? </li></ul><ul><li>“ Positioning?” </li></ul>What is a brand?
    5. 5. BRANDING PRINCIPLES “ A name, term, sign, symbol or design, or a combination of these that identifies the goods or services or one seller or group of sellers and differentiates them from those of competitors”. “ The sum of all the images and associations customers have concerning a company”. “ Great brands are born from people who are having fun. Their excitement is reflected in the meaning of the brand”. “ A brand is a long-term profitable bond between an offering & a customer. This relationship is based on economic, emotional and/or experiential value, backed by everyday operational excellence & consistently measured for accountability , usually by customer profitability.”
    6. 6. BRANDING PRINCIPLES Brands are based not on spending but on continuing customer relationships Only companies selling to consumers can brand Businesses selling to businesses can establish dominant brands Branding effectiveness is determined by the awards won Branding effectiveness is measured by sales, profitability & growth Only marketing experts can brand Everyone in an organization is responsible for branding ???? The more ads you see, the bigger the brand You need a big budget to brand REALITY MYTH
    7. 7. BRANDING PRINCIPLES <ul><li>MARKETING v. BRANDING: Which is which? </li></ul><ul><li>What is the difference between marketing & branding? </li></ul><ul><ul><li>Answer is key, because it helps establish our activities & measurements. </li></ul></ul>
    8. 8. BRANDING PRINCIPLES <ul><li>MARKETING v. BRANDING: Which is which? </li></ul><ul><li>Marketing </li></ul><ul><li>Encourages first-time purchases </li></ul><ul><li>Advertising </li></ul><ul><li>Public relations (PR) </li></ul><ul><li>Promotion </li></ul><ul><li>Merchandising </li></ul><ul><li>Etc. </li></ul><ul><li>Branding </li></ul><ul><li>Delivers customer economic, experiential & emotional value that encourages repeat purchases </li></ul><ul><ul><li>P rice </li></ul></ul><ul><ul><li>O perations </li></ul></ul><ul><ul><li>C ulture </li></ul></ul><ul><ul><li>K ey differentiator </li></ul></ul><ul><ul><li>E xperience (2) </li></ul></ul><ul><ul><li>T alent </li></ul></ul><ul><ul><li>S ervice </li></ul></ul>
    9. 9. BRANDING PRINCIPLES Marketing Dept. Mass economy (1920-95) Customer economy (1996-2007) Demand economy (2008-??) Advertising, etc. “ Positioning” Market research Quality/service Process/integration Databases Immediacy Personalization Real-time enterprises Marketing dept. Organization Supply chain “ Sell what we make” “ Sell what customers buy” “ Provide customer solution” Sales Profitability Relationship depth Driver: Metrics:
    10. 10. BRANDING PRINCIPLES Product Development Targeting, Positioning Product Strategy Pricing Strategy Promotion Strategy Place Strategy Implementation, Monitoring & Control What two critical branding factors are missing? Old Branding Company-driven
    11. 11. <ul><li>SUSTAIN VALUE </li></ul><ul><li>Improve retention </li></ul><ul><li>Increase customer, product & account penetration </li></ul><ul><li>Personalize relationships </li></ul><ul><li>SENSE VALUE </li></ul><ul><li>Understand competitors </li></ul><ul><li>Sense market trends </li></ul><ul><li>Understand customers </li></ul><ul><li>Identify opportunities </li></ul><ul><li>DEFINE VALUE </li></ul><ul><li>Segment customers </li></ul><ul><li>Target profitable segments </li></ul><ul><li>Craft value propositions </li></ul><ul><li>Validate value propositions </li></ul><ul><li>REALIZE VALUE </li></ul><ul><li>Develop offerings </li></ul><ul><li>Meet customer demands for economic, experiential, emotion value </li></ul><ul><li>Measure value </li></ul>BRANDING PRINCIPLES Find. Grow. Measure. Profit. Customer-driven
    12. 12. BRANDING PRINCIPLES Strategic Branding Customer Marketing Product Ads, PR, etc. BRANDING: Planning priorities FAQ: How long does it take to establish a brand?
    13. 13. BRANDING PRINCIPLES <ul><li>BRANDING: 4 types </li></ul><ul><li>Acquisition branding </li></ul><ul><ul><li>Targeting & segmentation </li></ul></ul><ul><li>Retention branding </li></ul><ul><ul><li>Keep customers longer & purchasing more </li></ul></ul><ul><li>Brand penetration </li></ul><ul><ul><li>Customer, account, product </li></ul></ul><ul><li>Advocacy </li></ul><ul><ul><li>Get customers to sell to others </li></ul></ul>Acquisition (Ads, PR, etc.) Retention/ recovery (Reduce defection, loyalty) Advocacy (word of mouth) Brand penetration PROFIT S!
    14. 14. BRANDING PRINCIPLES BRANDING: Acquisition vs. retention “ The purpose of business is not to make a sale, but to _____ and _______________.” -- Peter Drucker Legendary management consultant make keep a customer
    15. 15. BRANDING PRINCIPLES <ul><li>Acquisition </li></ul><ul><li>Dedicated staff </li></ul><ul><li>Average acquisition cost: $113 </li></ul><ul><li>Cost-to-serve higher </li></ul><ul><li>Price sensitive </li></ul><ul><li>2/3s of new buyers fail to make repeat purchase </li></ul><ul><li>Retention </li></ul><ul><li>No dedicated staff </li></ul><ul><li>80/20 profitability rule </li></ul><ul><li>Cost-to-serve lower </li></ul><ul><li>Trust & loyalty fuel purchases </li></ul><ul><li>Tell 8-10 others about happy experiences </li></ul>BRANDING: Acquisition vs. retention + YET: 80-90% of marketing budgets YET: 10-20% of budgets
    16. 16. BRANDING PRINCIPLES Creative Good * Michigan State Business School BRANDING: Acquisition vs. retention $60 $1 quality, value, communications (help retention) $5 $1 acquisition Revenue Investment ACQUISITION VS. RETENTION
    17. 17. BRANDING PRINCIPLES <ul><ul><li>Average customer loss rate = 20% a year </li></ul></ul><ul><ul><li>20% customer loss rate cuts profits 17% </li></ul></ul><ul><ul><li>Retention increase of 5% = lifetime profit increase of 95% </li></ul></ul><ul><ul><li>Existing customers 3-8 times cheaper to serve </li></ul></ul>BRANDING: Acquisition vs. retention HOW TO INCREASE SALES 10-15% Odds of selling to a former customer 50% Odds of selling to existing customer 5-15% Odds of selling to new customer
    18. 18. BRANDING PRINCIPLES BRANDING: Acquisition vs. retention
    19. 19. MALAYSIA BOLEH! <ul><li>HOE PHARMACEUTICALS: Background </li></ul><ul><ul><li>Sdn Bhd. headquartered in KL </li></ul></ul><ul><ul><li>Manufactures skin cream & liquid preparations for prescriptions & OTC </li></ul></ul><ul><ul><li>Also manufactures herbal & cosmetic products </li></ul></ul><ul><ul><li>Meets standards of WHO, Ministry of Health in Malaysia & other countries </li></ul></ul><ul><ul><li>Extensive international investment </li></ul></ul>
    20. 20. MALAYSIA BOLEH! <ul><li>BRANDING: Challenges & opportunities </li></ul><ul><ul><li>Foot problems very common </li></ul></ul><ul><ul><ul><li>Cracked heel </li></ul></ul></ul><ul><ul><ul><li>Ladies & sandals </li></ul></ul></ul><ul><ul><li>Extensive local/international competition </li></ul></ul><ul><ul><li>Dissatisfaction with competitive products </li></ul></ul><ul><ul><li>Quality product able to effectively solve customer problem </li></ul></ul><ul><ul><ul><li>Branding not offering a capability, but solving a customer problem </li></ul></ul></ul><ul><ul><li>Certifications offer third-party credibility </li></ul></ul>Key!
    21. 21. MALAYSIA BOLEH! <ul><li>BRANDING: Secrets of success </li></ul><ul><ul><li>Long-term commitment </li></ul></ul><ul><ul><ul><li>“ We have always looked at this as a long-term strategy; branding is not something that is done overnight.” </li></ul></ul></ul><ul><ul><ul><ul><li>-- George Soh, General Manager </li></ul></ul></ul></ul><ul><ul><li>Followed a brand plan </li></ul></ul><ul><ul><ul><li>Lack of planning shortcut to failure </li></ul></ul></ul><ul><ul><ul><ul><li>“ Malaysia’s Best;” “Tak Nak” campaigns </li></ul></ul></ul></ul><ul><ul><li>Planned growth in stages </li></ul></ul><ul><ul><ul><li>First Malaysia, then Singapore, Thailand, Hong Kong, Taiwan, more </li></ul></ul></ul>
    22. 22. MALAYSIA BOLEH! <ul><li>BRANDING: Secrets of success </li></ul><ul><ul><li>Extensive market research </li></ul></ul><ul><ul><ul><li>Target market: high-income 30+ females </li></ul></ul></ul><ul><ul><ul><li>Pharmacies, physicians </li></ul></ul></ul><ul><ul><ul><li>How product is used </li></ul></ul></ul><ul><ul><ul><li>Follow-up surveys for benchmarking </li></ul></ul></ul><ul><ul><li>Operational excellence </li></ul></ul><ul><ul><ul><li>High-quality manufacturing </li></ul></ul></ul><ul><ul><li>Excellent integrated marketing execution </li></ul></ul><ul><ul><ul><li>PR </li></ul></ul></ul><ul><ul><ul><li>Advertising </li></ul></ul></ul><ul><ul><ul><li>Collateral </li></ul></ul></ul><ul><li>Web </li></ul><ul><li>Promotion </li></ul><ul><li>Training </li></ul>
    23. 23. MALAYSIA BOLEH! <ul><li>SECRETS OF SUCCESS: PR </li></ul><ul><ul><li>Variety of targets </li></ul></ul><ul><ul><ul><li>Local & monthly </li></ul></ul></ul><ul><ul><li>Well-targeted message </li></ul></ul><ul><ul><ul><ul><li>Open shoes </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Overweight </li></ul></ul></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><ul><ul><li>No moisture, dry out </li></ul></ul></ul></ul><ul><ul><li>Consequences </li></ul></ul><ul><ul><ul><ul><li>Infection </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Doctor care </li></ul></ul></ul></ul>Reason to buy from customer viewpoint }
    24. 24. MALAYSIA BOLEH! <ul><li>SECRETS OF SUCCESS: Advertising </li></ul><ul><ul><li>Testimonial theme </li></ul></ul><ul><ul><li>Targeted message </li></ul></ul><ul><ul><ul><li>Reflects target customer </li></ul></ul></ul><ul><ul><li>Strong graphic image </li></ul></ul><ul><ul><li>Credibility </li></ul></ul><ul><ul><ul><li>3-day proofpoint </li></ul></ul></ul><ul><ul><li>Reference for purchase </li></ul></ul><ul><ul><ul><li>Package </li></ul></ul></ul>
    25. 25. MALAYSIA BOLEH! <ul><li>SECRETS OF SUCCESS: </li></ul><ul><li>Collateral </li></ul><ul><ul><li>Visual identification of problem </li></ul></ul><ul><ul><li>Inside: Education </li></ul></ul><ul><ul><ul><li>How it works </li></ul></ul></ul><ul><ul><ul><li>What makes it better </li></ul></ul></ul><ul><ul><ul><li>Credibility </li></ul></ul></ul><ul><ul><ul><ul><li>Before/After photos </li></ul></ul></ul></ul><ul><ul><ul><li>Shows benefit from customer perspective </li></ul></ul></ul><ul><ul><li>Note consistency of graphics </li></ul></ul>
    26. 26. MALAYSIA BOLEH! <ul><li>SECRETS OF SUCCESS: Web </li></ul><ul><ul><li>Good design </li></ul></ul><ul><ul><ul><li>Easy to navigate </li></ul></ul></ul><ul><ul><ul><li>Easy to read </li></ul></ul></ul><ul><ul><li>Complete product info </li></ul></ul><ul><ul><li>Contact info </li></ul></ul><ul><ul><ul><li>Responsiveness </li></ul></ul></ul><ul><ul><li>Current </li></ul></ul>
    27. 27. MALAYSIA BOLEH! <ul><li>SECRETS OF SUCCESS: Promotion </li></ul><ul><ul><li>Promotion/contest </li></ul></ul><ul><ul><ul><li>Linked to target market </li></ul></ul></ul><ul><ul><ul><ul><li>1 ct. diamond </li></ul></ul></ul></ul><ul><ul><ul><li>Prospect involvement </li></ul></ul></ul><ul><ul><ul><ul><li>Match slogan </li></ul></ul></ul></ul><ul><ul><ul><li>Leveraged with PR </li></ul></ul></ul><ul><ul><ul><ul><li>“ I have been using Elgy Plus cracked heel for some time & I am so excited to be one of the winners.” </li></ul></ul></ul></ul>
    28. 28. MALAYSIA BOLEH! <ul><li>SECRETS OF SUCCESS: Training </li></ul><ul><ul><li>“ Retail detail” </li></ul></ul><ul><ul><ul><li>Pharmacies, physicians </li></ul></ul></ul><ul><ul><li>Educate </li></ul></ul><ul><ul><ul><li>Why use </li></ul></ul></ul><ul><ul><ul><li>“ Use product after cure” </li></ul></ul></ul>
    29. 29. MALAYSIA BOLEH! <ul><li>SECRETS OF SUCCESS: Results </li></ul><ul><ul><li>#1 or #2 in each target market </li></ul></ul><ul><ul><li>70-80% market share </li></ul></ul>
    30. 30. SECRETS OF BRANDING <ul><li>FIRST RULE OF BRANDING </li></ul><ul><li>It is not about you; it is about the prospect & customer </li></ul>SECOND RULE OF BRANDING All customers (and prospects) are not created equal. THIRD RULE OF BRANDING Measurement is critical.
    31. 31. METRICS-DRIVEN BRANDS MAIN LESSONS: Remember this! “ The purpose of business is not to make a sale, but to _____ and _______________.” -- Peter Drucker Legendary management consultant
    32. 32. BRAND PLANNING: PLAN <ul><li>KEY ELEMENTS </li></ul><ul><li>I. Executive overview </li></ul><ul><li>II. Market, product, business & competitive review </li></ul><ul><li>III. Situation analysis </li></ul><ul><li>IV. USP (Unique Selling Proposition) </li></ul><ul><li>V. Strategies, objectives, goals & tactics </li></ul><ul><li>VI. Execution </li></ul><ul><li>VII. Budgeting </li></ul><ul><li>VIII. Timetables & responsibilities </li></ul><ul><li>IX. Measurement, evaluation & feedback </li></ul>MOST IMPORTANT!!!
    33. 33. METRICS-DRIVEN BRANDS <ul><li>BRANDING: Profitability imperatives </li></ul><ul><ul><li>All customers are not created equal </li></ul></ul><ul><ul><li>Customers define brands based on their experience, emotion & functionality </li></ul></ul><ul><ul><ul><li>Companies can no longer “position” brands </li></ul></ul></ul><ul><ul><li>Brands are only tools to build customer equity </li></ul></ul><ul><ul><ul><li>Magnet to attract new customers </li></ul></ul></ul><ul><ul><ul><li>Anchor to hold existing customers </li></ul></ul></ul><ul><ul><li>Goal is profitability, not sales or market share </li></ul></ul><ul><ul><li>Measurement is critical </li></ul></ul><ul><ul><ul><li>Establishes accountability </li></ul></ul></ul>
    34. 34. RETENTION BRANDING <ul><li>Retention pays! </li></ul><ul><ul><li>Satisfied customers tell 3-5 others about a pleasant experience </li></ul></ul><ul><ul><li>It can cost up to 10 times more to generate revenue from a new customer than from an existing one </li></ul></ul><ul><ul><li>A 5% retention rate increase can increase profits by 60-100% </li></ul></ul><ul><ul><li>Loyal customers who refer others generate business at a very low or no cost </li></ul></ul>
    35. 35. RETENTION BRANDING <ul><li>Unhappiness costs! </li></ul><ul><li>Dissatisfied customers tell 7-13 others </li></ul><ul><li>Unhappy customers complain for up to 23 years! </li></ul><ul><li>Negative word-of-mouth: 2X as much impact on purchase intentions as positive word-of-mouth </li></ul><ul><li>Make-goods/expediting are expensive </li></ul><ul><li>Find “replacement” customers </li></ul>
    36. 36. RETENTION BRANDING <ul><li>80/20 rule </li></ul><ul><li>20% of your customers account for 80% of your profits </li></ul><ul><li>Knowing this is not as important as knowing WHICH 20% (as well as the bottom 15%) </li></ul><ul><li>Conventional accounting only tells us profit from 100% of the customers </li></ul><ul><li>Branding imperatives </li></ul><ul><li>Identify & increase profitability of customers </li></ul><ul><li>Make intelligent customer acquisition/retention </li></ul>
    37. 37. PROFILES IN BRANDING <ul><li>INDUSTRY EXCELLENCE AWARDS 2004 </li></ul><ul><ul><li>Awarded by MITI in March 2005 </li></ul></ul><ul><ul><ul><li>Categories: Product excellence, export excellence, quality management </li></ul></ul></ul><ul><ul><li>Special award -- Malaysian brand names </li></ul></ul><ul><ul><ul><li>Hoe Pharmaceutical </li></ul></ul></ul><ul><ul><ul><li>Noor Arfa Batek </li></ul></ul></ul><ul><ul><ul><li>Carotino </li></ul></ul></ul><ul><ul><li>Special award -- Innovative product </li></ul></ul><ul><ul><ul><li>CCM Pharma </li></ul></ul></ul><ul><ul><ul><li>Others </li></ul></ul></ul>
    38. 38. METRICS-DRIVEN BRANDS <ul><li>TRADITIONAL BRANDING </li></ul><ul><li>How profitable is this product? </li></ul><ul><li>How should I price this product? </li></ul><ul><li>Are we doing enough new-product development? </li></ul><ul><li>How can we extend the product life cycle? </li></ul><ul><li>What is our share of market? </li></ul><ul><li>PROFITABLE BRANDING </li></ul><ul><li>How profitable is this customer? </li></ul><ul><li>How should I price this customer? </li></ul><ul><li>Are we doing enough new-customer development? </li></ul><ul><li>How can we extend the customer life cycle? </li></ul><ul><li>What is our share of customer wallet? </li></ul>
    39. 39. SECRETS OF BRANDING <ul><li>EXCELLENT RESOURCES </li></ul>Ministry of Health Malaysia MATRADE Branding Association of Malaysia
    40. 40. THANK YOU! QUESTIONS? Nick Wreden [email_address]