The document outlines essential strategies for brand building, emphasizing the importance of customer relationships and long-term profitability. It distinguishes between marketing and branding, highlights the significance of acquisition versus retention, and provides a case study of Hoe Pharmaceuticals as a successful Malaysian brand. Key takeaways include the necessity of effective measurement, understanding customer value, and leveraging market research for targeted branding efforts.

1. ESSENTIALS OF BRAND BUILDING STRATEGIES, TIPS & TECHNIQUES Nick Wreden [email_address]

2. NEXT GENERATION BRANDING AGENDA: Outline Branding principles New rules for a new business era Malaysia boleh! A Malaysian brand success story Action items for success How to build your brand Participate!

3. BRANDING PRINCIPLES WHY BRAND?: Branding advantages Shortens sales cycles Maximizes marketing spend Facilitates repeat sales Enables premium pricing Blocks competitors Independence from OEM relationships Attracts strategic alliances & partners Best path toward profitability

4. BRANDING PRINCIPLES BRANDING: Definition Logos? Advertising? Brochures? “ SuperBrand award”? TV? Expensive? International? “ Positioning?” What is a brand?

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. 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. BRANDING PRINCIPLES MARKETING v. BRANDING: Which is which? What is the difference between marketing & branding? Answer is key, because it helps establish our activities & measurements.

8. BRANDING PRINCIPLES MARKETING v. BRANDING: Which is which? Marketing Encourages first-time purchases Advertising Public relations (PR) Promotion Merchandising Etc. Branding Delivers customer economic, experiential & emotional value that encourages repeat purchases P rice O perations C ulture K ey differentiator E xperience (2) T alent S ervice

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. 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. SUSTAIN VALUE Improve retention Increase customer, product & account penetration Personalize relationships SENSE VALUE Understand competitors Sense market trends Understand customers Identify opportunities DEFINE VALUE Segment customers Target profitable segments Craft value propositions Validate value propositions REALIZE VALUE Develop offerings Meet customer demands for economic, experiential, emotion value Measure value BRANDING PRINCIPLES Find. Grow. Measure. Profit. Customer-driven

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. BRANDING PRINCIPLES BRANDING: 4 types Acquisition branding Targeting & segmentation Retention branding Keep customers longer & purchasing more Brand penetration Customer, account, product Advocacy Get customers to sell to others Acquisition (Ads, PR, etc.) Retention/ recovery (Reduce defection, loyalty) Advocacy (word of mouth) Brand penetration PROFIT S!

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. BRANDING PRINCIPLES Acquisition Dedicated staff Average acquisition cost: $113 Cost-to-serve higher Price sensitive 2/3s of new buyers fail to make repeat purchase Retention No dedicated staff 80/20 profitability rule Cost-to-serve lower Trust & loyalty fuel purchases Tell 8-10 others about happy experiences BRANDING: Acquisition vs. retention + YET: 80-90% of marketing budgets YET: 10-20% of budgets

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. BRANDING PRINCIPLES Average customer loss rate = 20% a year 20% customer loss rate cuts profits 17% Retention increase of 5% = lifetime profit increase of 95% Existing customers 3-8 times cheaper to serve 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. BRANDING PRINCIPLES BRANDING: Acquisition vs. retention

19. MALAYSIA BOLEH! HOE PHARMACEUTICALS: Background Sdn Bhd. headquartered in KL Manufactures skin cream & liquid preparations for prescriptions & OTC Also manufactures herbal & cosmetic products Meets standards of WHO, Ministry of Health in Malaysia & other countries Extensive international investment

20. MALAYSIA BOLEH! BRANDING: Challenges & opportunities Foot problems very common Cracked heel Ladies & sandals Extensive local/international competition Dissatisfaction with competitive products Quality product able to effectively solve customer problem Branding not offering a capability, but solving a customer problem Certifications offer third-party credibility Key!

21. MALAYSIA BOLEH! BRANDING: Secrets of success Long-term commitment “ We have always looked at this as a long-term strategy; branding is not something that is done overnight.” -- George Soh, General Manager Followed a brand plan Lack of planning shortcut to failure “ Malaysia’s Best;” “Tak Nak” campaigns Planned growth in stages First Malaysia, then Singapore, Thailand, Hong Kong, Taiwan, more

22. MALAYSIA BOLEH! BRANDING: Secrets of success Extensive market research Target market: high-income 30+ females Pharmacies, physicians How product is used Follow-up surveys for benchmarking Operational excellence High-quality manufacturing Excellent integrated marketing execution PR Advertising Collateral Web Promotion Training

23. MALAYSIA BOLEH! SECRETS OF SUCCESS: PR Variety of targets Local & monthly Well-targeted message Open shoes Overweight Education No moisture, dry out Consequences Infection Doctor care Reason to buy from customer viewpoint }

24. MALAYSIA BOLEH! SECRETS OF SUCCESS: Advertising Testimonial theme Targeted message Reflects target customer Strong graphic image Credibility 3-day proofpoint Reference for purchase Package

25. MALAYSIA BOLEH! SECRETS OF SUCCESS: Collateral Visual identification of problem Inside: Education How it works What makes it better Credibility Before/After photos Shows benefit from customer perspective Note consistency of graphics

26. MALAYSIA BOLEH! SECRETS OF SUCCESS: Web Good design Easy to navigate Easy to read Complete product info Contact info Responsiveness Current

27. MALAYSIA BOLEH! SECRETS OF SUCCESS: Promotion Promotion/contest Linked to target market 1 ct. diamond Prospect involvement Match slogan Leveraged with PR “ I have been using Elgy Plus cracked heel for some time & I am so excited to be one of the winners.”

28. MALAYSIA BOLEH! SECRETS OF SUCCESS: Training “ Retail detail” Pharmacies, physicians Educate Why use “ Use product after cure”

29. MALAYSIA BOLEH! SECRETS OF SUCCESS: Results #1 or #2 in each target market 70-80% market share

30. SECRETS OF BRANDING FIRST RULE OF BRANDING It is not about you; it is about the prospect & customer SECOND RULE OF BRANDING All customers (and prospects) are not created equal. THIRD RULE OF BRANDING Measurement is critical.

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. BRAND PLANNING: PLAN KEY ELEMENTS I. Executive overview II. Market, product, business & competitive review III. Situation analysis IV. USP (Unique Selling Proposition) V. Strategies, objectives, goals & tactics VI. Execution VII. Budgeting VIII. Timetables & responsibilities IX. Measurement, evaluation & feedback MOST IMPORTANT!!!

33. METRICS-DRIVEN BRANDS BRANDING: Profitability imperatives All customers are not created equal Customers define brands based on their experience, emotion & functionality Companies can no longer “position” brands Brands are only tools to build customer equity Magnet to attract new customers Anchor to hold existing customers Goal is profitability, not sales or market share Measurement is critical Establishes accountability

34. RETENTION BRANDING Retention pays! Satisfied customers tell 3-5 others about a pleasant experience It can cost up to 10 times more to generate revenue from a new customer than from an existing one A 5% retention rate increase can increase profits by 60-100% Loyal customers who refer others generate business at a very low or no cost

35. RETENTION BRANDING Unhappiness costs! Dissatisfied customers tell 7-13 others Unhappy customers complain for up to 23 years! Negative word-of-mouth: 2X as much impact on purchase intentions as positive word-of-mouth Make-goods/expediting are expensive Find “replacement” customers

36. RETENTION BRANDING 80/20 rule 20% of your customers account for 80% of your profits Knowing this is not as important as knowing WHICH 20% (as well as the bottom 15%) Conventional accounting only tells us profit from 100% of the customers Branding imperatives Identify & increase profitability of customers Make intelligent customer acquisition/retention

37. PROFILES IN BRANDING INDUSTRY EXCELLENCE AWARDS 2004 Awarded by MITI in March 2005 Categories: Product excellence, export excellence, quality management Special award -- Malaysian brand names Hoe Pharmaceutical Noor Arfa Batek Carotino Special award -- Innovative product CCM Pharma Others

38. METRICS-DRIVEN BRANDS TRADITIONAL BRANDING How profitable is this product? How should I price this product? Are we doing enough new-product development? How can we extend the product life cycle? What is our share of market? PROFITABLE BRANDING How profitable is this customer? How should I price this customer? Are we doing enough new-customer development? How can we extend the customer life cycle? What is our share of customer wallet?

39. SECRETS OF BRANDING EXCELLENT RESOURCES Ministry of Health Malaysia MATRADE Branding Association of Malaysia

40. THANK YOU! QUESTIONS? Nick Wreden [email_address]