21ST CENTURY BRAND MANAGEMENT: GROWTH & PROFITABILITY

1. 21ST CENTURY BRAND MANAGEMENT:GROWTH & PROFITABILITY Marketing Association of Thailand March 2011 Kevin Lane Keller Tuck School of Business Dartmouth College

2. Importance of Branding Taught in top business schools andexecutive leadership programs around the world 2

3. My Experience

4. Agenda Session #1 (9:00 am – 10:20 am) Understanding 21st Century Brand Management Session #2 (10:35 am – 12:15 pm) Brand Planning & Measuring Brand Equity Session #3 (1:15 pm – 3:00 pm) Building Strong Brands Session #4 (3:15 pm – 5:00 pm) Brand Growth Strategies & Putting It All Together 4

5. Understanding 21st Century Brand Management 5

6. What is a Brand? A “brand” is a name, term, sign, symbol, or design which is intended to … Identify the goods or services of one seller or group of sellers and to Differentiate them from those of competitors 6

7. What Can Brands Do?Fundamentally, brands are a means tocreate awareness & image for products &servicesBrands can create differentiation &distinctiveness Help to avoid “commodity trap” – pure price competitionBrands offer a company the opportunityto reap the benefits of good branding Necessary … but not sufficient 7

8. The Power of BrandsA strong brand is a promise to customers and ameans to set their expectations Reduce risk from predictable performanceA strong brand motivates and engagesemployeesA strong brand provides a buffer & cushion inthe court of public opinionA strong brand improves marketingeffectiveness & efficiencyA strong brand is one of a firm’s most valuableintangible assets 8

9. The Concept ofCustomer-Based Brand EquityThe customer-based brand equity modeldefines brand equity as … The differential effect that .. customer brand knowledge has on … customer response to brand marketingBrand knowledge is all associationslinked to the brand Thoughts, feelings, images, experiences, beliefs, attitudes, experiences, etc. 9

10. Determinants ofCustomer-Based Brand EquityCustomer is aware of and familiarwith the brandCustomer holds some strong,favorable, and unique brandassociations in memory 10

11. Benefits of Customer-Based Brand EquityMuch academic research & industry experience hasshown that a product or service with positive brandequity should: Enjoy greater brand loyalty & less vulnerability to competitors Command higher margins Receive greater supplier & partner support Enjoy increased marketing communication effectiveness Support new products or services as brand extensions More effectively attract and retain better employees Gain more favorable treatment with public opinion & policy makers 11

12. Customer-Based Brand Equityas a “Bridge”Customer-based brand equityrepresents the “added value”endowed to a product As a result of past investments in the marketing of a brand But also as a result of past customer experiences, whether marketing-driven or notCustomer-based brand equityprovides direction and focus to futuremarketing activities 12

13. The Challenges of BrandingRapid technological developmentsGreater customer empowermentFragmentation of traditional mediaGrowth of interactive & mobile marketing optionsChannel transformation & disintermediationIncreased competition & industry convergenceGlobalization & growth of developing marketsHeightened environmental, community, and socialconcernsSevere economic recession 13

14. Summary Brands are one of a company’s most important intangible assets … because of what they do Brands differentiate and create meaning with customers & employees Brands must be managed properly in an increasingly challenging marketing environment to reap the benefits of strong branding

15. Eight Keys toAchieving Branding ExcellenceConsumer-Centric Brand Vision & PassionSuperior Competitive Brand PositioningClearly Defined Brand ArchitectureFully Integrated Marketing ProgramCultivated Brand RelationshipsPremium-Driven Pricing StrategiesRelevant Marketing InnovationWell-Managed Brand Growth Strategies 15

16. Achieving Branding ExcellenceA Consumer-Centric Brand Vision andPassion Thorough & up-to-date consumer and employee understanding Find higher-order purpose that is anchored in … Consumer aspirations Company capabilities & goals Transcend physical product category descriptions and boundariesExample: 16

17. Nike Brand Mission: To bring inspiration and innovation to every athlete in the world ”If you have a body, you’re an athlete” Brand Values Inspire Innovate Focus Connect Care Brand Mantra Authentic Athletic Performance 17

18. Achieving Branding Excellence Superior Competitive Brand Positioning Define appropriate competitive frames of reference Develop 3-5 unique brand points-of-difference Establish 2-4 shared brand points-of-parity Craft brand mantra Example: 18

19. Visa Goal: Attack American Express & Marginalize MasterCard Strategy: Neutralize & Differentiate Point-of-Difference: Acceptability & Convenience Point-of-Parity: Status, Prestige, & Cachet Tactics Larger merchant network Gold and platinum cards “It’s Everywhere You Want to Be” 19

20. Achieving Branding Excellence Clearly Defined Brand Architecture Understand potential of each brand in portfolio Develop strong power brands with broad market footprints Maximize market coverage and minimize overlap of all brands Only introduce sub-brands of a core brand that have clear strategic roles Example: 20

21. BMWClever straddle positioning withcorporate brand Points-of-parity and points-of-difference Luxury and PerformanceClearly defined sub-brand roles Brand hierarchy: 3, 5, & 7 series New models and brands to expand the brand footprint X3, X5, Z4, M3, 6 series, & Mini 21

22. Achieving Branding ExcellenceFully Integrated Marketing Program Creatively combine sales generation and brand building in all marketing activities Blend consumer-directed “pull” with channel-directed “push” Create a 360° degree “mix” and “match” marketing program Employ range of traditional & non-traditional marketing activities Coordinate when possible to leverage effectsExample: 22

23. Red Bull Employs a full set of brand elements and marketing activities Develops strong on-premise and in- store marketing (push) Communicates directly with consumers (pull) Traditional media advertising Non-traditional events and promotions 23

24. Red BullActivities,Events &Experiences

25. Achieving Branding Excellence Cultivated Brand Relationships Build brand foundation of identity & meaning Establish duality in terms of product performance and brand imagery Elicit positive rational & emotional responses Create resonance and intense, active loyalty relationship Example: 25

26. Harley-Davidson Harley went from near-bankruptcy to over-demand Improved product quality, design and innovation Strong aspirational image of freedom, excitement, and a rebellious nature But with broad appeal (“Rolex Riders”) Grew over 30% for two decades after going public in 1986 Customers literally brand themselves (#1 tattoo in U.S.) 90% say they would buy a Harley again Harley creates a strong sense of community and loyalty 26

27. Harley-DavidsonMany Harley OwnerGroups (H.O.G.’s)events and activities 1,000,000 membersStrong dealer andemployee supportWide variety oflifestyle accessories 27

28. Achieving Branding Excellence Premium-Driven Pricing Strategies Lower costs to create efficiency and effectiveness Create differentiation and maximize customer value Price to capture value premium Example: 28

29. Intel Successfully branded a commodity and ingredient Creates differentiation & customer value Funds extensive co-op advertising program with OEM partners Engages in extensive retail promotions Communicates directly with customers Monitors price premiums closely as measure of brand strength 29

30. Achieving Branding Excellence Relevant Marketing Innovation Be contemporary & relevant Recognize the power of design Introduce imaginative and captivating new products, communications, and other marketing activity Example: 30

31. Apple Sustained product innovation from inception Macintosh personal computers PowerBook laptops iPod portable music player iTunes music download website iPhone mobile phone & apps iPad tablet computer Strong brand promise Performance & design How a product works, looks & feels Personality: “Think different” 31

32. Achieving Branding Excellence Well-Managed Brand Growth Strategies Seamlessly leverage equity into new products and markets Maximize product development Maintain product innovation pipeline Maximize market development Optimize channel mix Embrace multicultural marketing Distinguish developed and developing markets Effective top-down and bottom-up brand management Example: 32

33. Starbucks Starbucks commands a price premium as it offers superior delivery of desired benefits. High quality coffee Wide variety of coffee products & variations Complete vertical integration Controlled retail distribution Motivated & trained employees Rich sensory retail experience (“3rd place”) Positive word-of-mouth & publicity 33

34. Starbucks Product development Coffee driven New Flavors, Bottled Frappuccino, DoubleShot, Ice Cream Complements Starbucks Card Duetto Visa, Hear Music CD series & downloads Market development New outlets Hotels, airports, airlines, book stores, department stores, corporations, etc. New markets 6000 coffeehouses in 48 markets outside North America (with carefully chosen partners) 34

35. B-to-B Branding Addendums Ensure the entire organization understands and supports branding and brand management Emphasize corporate or family brand Establish strong corporate credibility & other intangibles Service delivery Emotional rewards Leverage equity via secondary associations Other companies Segment within & across companies & develop tailored marketing 35

36. Service Branding AddendumsMaximize service quality by recognizing the myriad ofways to affect consumer service perceptions.Employ a full range of brand elements Enhance brand recall and signal more tangible aspects of the brand.Create and communicate strong organizationalassociations.Design corporate communication programs that augmentconsumers’ service experiences.Establish a brand hierarchy Create distinct family or individual brands as well as meaningful ingredient brands. 36

37. Branding Toolkit I Rate your organization as to how well it does for each branding competency (1 = Poor, …, 10 =Excellent). 1. ___ Consumer-Centric Brand Vision & Passion 2. ___ Superior Competitive Brand Positioning 3. ___ Clearly Defined Brand Architecture 4. ___ Fully Integrated Marketing Program 5. ___ Cultivated Brand Relationships 6. ___ Premium-Driven Pricing Strategies 7. ___ Relevant Marketing Innovation 8. ___ Well-Managed Brand Growth Strategies How can you improve in those areas of weakness? 37

38. Brand Planning & Measurement 38

39. Three Models to Facilitate Brand PlanningTo help guide these efforts,three models of increasingscope:1) Brand Positioning Model How to guide integrated marketing to maximize competitive advantages;2) Brand Resonance Model How to create intense, activity loyalty relationships with customers; and3) Brand Value Chain Model How to trace the value creation process to better understand the financial impact of marketing investments. 39

40. 1. Brand Positioning Model Kevin Lane Keller, Brian Sternthal, and Alice Tybout (2002), “Three Questions You Need to Ask About Your Brand,” Harvard Business Review, September, 80 (9), 80-89. 40

41. Brand PositioningBrand positioning is about how we want targetcustomers to think about a brand with respectto competitorsA strong brand positioning guides marketingactivities by 1) clarifying the brand’s essence,2) what the brand helps the customer achieve,and 3) how it is unique in doing so Everyone in the organization should understand the brand positioning and use it as context for making decisions 41

42. The Four Components of aSuperior Competitive Positioning Competitive frames of reference Nature of competition Target market Develop unique brand points-of-difference (POD’s) Desirable to consumers Deliverable by the company Differentiating from competitors Establish shared brand points-of-parity (POP’s) Negate competitor points-of-difference Overcome perceived vulnerabilities Demonstrate category credentials Brand mantras Short 3-to-5 word phrases that capture key POD’s & the irrefutable essence or spirit of the brand. 42

43. SubwayPositioned as unique combination oftaste, health, & convenience Fast food competitors (e.g., McDonald’s) POP – convenience & taste POD – health Health food competitors POP – health POD – taste & convenience 43

44. Brand Positioning Inputs:Understand Brand Meaning Mental maps Accurately portrays in detail all salient brand associations and responses for a particular target market (e.g., brand users) Can create a mental map by asking consumers for their top-of-mind brand associations (e.g., “When you think of this brand, what comes to mind?”). List 10-15 dominant responses 44

45. Starbucks Mental Map sophisticated Seattle wholesome earth colors coffee consistent relaxingcomfortable convenient/everywhere treat/reward predatory fresh faddish/trendy quality exotic snobbish/pretentious variety customized confusing expensive

46. Starbucks Competitive PositioningCompetitor POP PODFast food chains/ —Convenience —Quality convenience shops —Value —Image —Experience —Variety —QualitySupermarket brands —Convenience —Image(for home) —Value —Experience —VarietyLocal cafe —Quality —Freshness —Experience —Price —Convenience —Community 46

47. Brand Mantras Short 3-to-5 word phrases that capture the irrefutable essence or spirit of the brand. Brand mantra must clearly delineate what the brand is supposed to represent and therefore, at least implicitly, what it is not Brand mantras typically are designed to capture the brand’s points-of-difference, i.e., what is unique about the brand. 47

48. Brand Mantra ExamplesNike “Authentic Athletic Performance”Disney “Fun Family Entertainment”Betty Crocker “Homemade Made Easy”American Express “Worldclass Service, Personal Recognition” 48

49. Brand Mantra CriteriaCommunicate A good brand mantra should define the category (or categories) of business for the brand and set the brand boundaries. It should also clarify what is unique about the brand.Simplify An effective brand mantra should be memorable. As a result, it should be short, crisp, and vivid in meaning.Inspire Ideally, the brand mantra would also stake out ground that is personally meaningful and relevant to as many employees as possible. 49

50. Starbucks Brand Mantra“Rich, rewardingcoffee experience” 50

51. STARBUCKS BRAND POSITIONING WORKSHEET Consumer Target Discerning Coffee Contemporary Drinker Consumer Insight Caring Thoughtful ConsumerCoffee and the Takeaway drinking Starbucks 24 hour Triple experience is training of gives me Responsible, Fairly Filtrated often baristas locally Priced the richest water unsatisfying involved possible Brand sensory experience Relaxing, Mantra drinkingConsumer Employee rewarding Rich, Rewarding Coffee Experience Fresh high coffee moments quality coffeeNeed State health & Totally stock Varied, Desire for Rich sensory integrated benefits consumption Convenient, exotic coffeebetter coffee experience friendly drinks systemand a better service Sirenconsumption logo experience Green & Earth ColorsCompetitiveProduct Set Local cafes Fast food & convenience shops

52. A Good Brand Positioning Must balance the complexity of consumer- decision-making with the need for simplicity Must have well-balanced “foot in the present” and “foot in the future” Must have competitively strong POPs & PODs Recognize competitive vulnerabilities Role play competitor’s positioning Surface consumer trade-offs and negative correlations Must take holistic view of POPs & PODs Rational & emotional elements must reinforce Must define sharp & specific POPs & PODs “Confident” vs. “In Control to Resolve Tense Situations” 52

53. Final Word on PositioningOften there will be 2-3 POP’s & POD’s thatreally define the competitive battlefield Articulate them carefully & explicitly (1 slide each)The positioning provides a filter tointerpret any & all marketing activity Does it uniquely reflect the brand? Use the “brand substitution test” In what ways does it build equity? 53

54. 2. Brand Resonance Model Kevin Lane Keller (2001), “Building Customer-Based Brand Equity: A Blueprint for Creating Strong Brands,” Marketing Management, July/August, 15-19. 54

55. Create Brand Resonancewith CustomersChallenge is to ensure customers havethe right types of experiences to createthe right brand knowledgeBuilding a strong brand involves a seriesof steps as part of a “branding ladder”A strong brand is also characterized bya logically constructed set of brand“building blocks.” 55

56. BRAND RESONANCE PYRAMIDStages of Brand Branding Building Blocks Objective at Development Each Stage RELATIONSHIPS: Intense,4 What about you & me? Active Loyalty Resonance RESPONSE: Positive,3 What about you? Accessible Judgments Feelings Reactions MEANING: Points-of-Parity2 What are you? & Difference Performance Imagery IDENTITY: Deep, Broad1 Who are you? Salience Brand Awareness

57. Brand Resonance PyramidTerminologySalience Depth and breadth of brand awareness Recognition and recall at purchase and consumptionPerformance What the brand does to meet customers more functional needs. Brand performance refers to the intrinsic properties of the brand in terms of inherent product benefits.Imagery How people think about a brand abstractly rather than what they think the brand actually physically does. Brand imagery is thus more extrinsic properties of the brand. Four important intangible dimensions are: Type of user Brand personality History & heritage Experiences 57

58. Brand Resonance PyramidTerminology Judgments Customers overall brand evaluations How customers combine performance and imagery associations to form different kinds of brand opinions Feelings Customers emotional responses and reactions to the brand Can be mild or intense; positive or negative; or experiential or enduring in nature. Can also relate to the social currency evoked by the brand. 58

59. Dimensions of Brand FeelingsBrand feelings can be divided into two broad categories: Experiential – immediate, short-lived during purchase/consumption Enduring – private, possibly part of day-to-day lifeBrands should have one, or ideally both, types of feelings Experiential Feelings Enduring Feelings • Warm • Sense of Security (Inner-directed)Increasinglevel of • Fun • Social Approval (Outer-directed)intensity • Exciting • Self-Respect (Actualization) Self-Respect Higher level of values & Sense of Security Social Approval needs Inner-Directed Outer-Directed

60. Brand Resonance PyramidTerminology Resonance The extent to which customers feel that they are “in synch” with the brand Intensity or depth of the psychological bond that customers have with the brand Level of activity engendered by this loyalty Repeat purchase rates The extent to which customers seek out brand information, events, or other loyal customers Etc. 60

61. Brand Resonance Components Behavioral loyalty – Customers’ repeat purchases and the amount or share of category volume attributed to the brand How often do customers purchase a brand? How much do they purchase? 61

62. Brand Resonance Components Attitudinal attachment – When customers view the brand as being something special in a broader context Do customers “love” the brand? Do they describe it as one of their favorite possessions? Do they view it as a “little pleasure” they look forward to? 62

63. Brand Resonance Components Sense of community – When customers feel a kinship or affiliation with other people associated with the brand. Do customers interact with fellow brand users or employees or representatives of the company? Does this occur on-line and/or off-line? 63

64. Brand Resonance Components Active engagement – When customers are willing to invest personal resources on the brand – time, energy, money, etc. – beyond those resources expended during purchase or consumption of the brand Do customers choose to join a club centered on a brand? Do customers receive updates, exchange correspondence with other brand users or formal or informal representatives of the brand itself? Do they visit brand-related Web sites, participate in chat rooms, and so on? 64

65. Any marketing activity can be judged by its total effecton the four dimensions of brand resonance Behavioral Loyalty Attitudinal Sense of Attachment Community Active Engagement

66. Sub-Dimensions of Brand Resonance Pyramid RESONANCE LOYALTY ATTACHMENT COMMUNITY ENGAGEMENT FEELINGS JUDGMENTS WARMTH QUALITY FUN CREDIBILITY EXCITEMENT CONSIDERATION SECURITY SUPERIORITY SOCIAL APPROVAL SELF-RESPECT PERFORMANCE IMAGERY PRIMARY CHARACTERISTICS & USER PROFILES SECONDARY FEATURES PURCHASE & USAGE PRODUCT RELIABILITY, SITUATIONS DURABILITY & SERVICEABILITY PERSONALITY & SERVICE EFFECTIVENESS, VALUES EFFICIENCY, & EMPATHY HISTORY, HERITAGE, STYLE AND DESIGN & EXPERIENCES PRICE SALIENCE CATEGORY IDENTIFICATION NEEDS SATISFIED

67. Nike Brand Resonance Pyramid Attachment Community EngagementRational Fun Emotional Credibility Exciting RouteRoute Superiority Self‐respect Innovative Empowerment Quality Irreverence Stylish Salience – Everything Athletic

68. Starbucks Brand Resonance Pyramid Loyalty Attachment Community Engagement Quality WarmRational Emotional Credibility FunRoute Route Consideration Relaxation Superiority Romantic indulgence Quality ingredients Sophisticated & elegant Exotic variety Casual & comfortable Personalized service “Third Place” Comfortable atmosphere Progressive & cool Salience – Highly accessible & convenient (ideally anywhere & anytime)

69. 3. Brand Value Chain Model Kevin Lane Keller and Don Lehmann (2003), “How Do Brands Create Value,” Marketing Management, May/June, 26-31. 69

70. Brand Value ChainMarketing Customer Market Shareholder Program Mindset Performance ValueInvestment- Product - Awareness - Price premiums - Stock price- Communications - Associations - Price elasticities - P/E ratio- Trade - Attitudes - Cost savings - Enterprise value- Employees - Attachment - Expansion success - Market capitalization- Other - Activity - Market share - Profitability 70

71. Brand Value Chain Marketing Customer Market ShareholderVALUE Program Mindset Performance ValueSTAGES Investment - Price premiums - Product - Awareness - Stock price - Price elasticities - Communications - Associations - P/E ratio - Market share - Trade - Attitudes - Market capitalization - Expansion success - Employee - Attachment - Cost savings - Other - Activity - Profitability Program Marketplace InvestorMULTIPLIERS Quality Conditions Sentiment - Relevance - Competitive reactions - Market dynamics - Distinctiveness - Channel support - Growth potential - Consistency - Customer size and profile - Risk profile - Cohesiveness - Brand contribution

72. ConclusionsThree helpful brand planning models are: Competitive brand positioning model Points-of-parity & points-of-difference Brand resonance model Six building blocks: Salience, Performance, Imagery, Judgments, Feelings, & Resonance Brand Value ChainThese models can be used … Qualitatively to guide & interpret possible marketing actions Quantitatively to measure marketing effects 72

73. Measuring Brand Equity 73

74. 3) Brand Value Chain Model A Comprehensive Marketing Customer Market Shareholder Set of Brand Activity Mindset Performanc Value e Planning Models 2) Brand Resonance Model Resonance Judgments Feelings Performance Imagery Salience1) Brand Positioning Model Points of Points of Parity Difference

75. Brand EquityMeasurement SystemA brand equity measurement system A set of research procedures … designed to provide timely, accurate, and actionable information … to help marketers make the best possible tactical decisions in the short run and strategic decisions in the long-run. 75

76. Brand Equity Measurement System:Key ConceptsBrand audits Assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equityBrand charters Codify brand learnings and provide relevant guidelines within the company as well as with key marketing partnersBrand equity tracking Generate baseline information for tactical insights into the short-term effectiveness of marketing programs and activitiesBrand equity reports Provide descriptive information as to what is happening with a brand as well as diagnostic information as to why it is happening 76

77. Brand AuditsA brand audit is a comprehensive examination of abrand involving activities to: Assess the health of the brand Uncover its sources of equity Suggest ways to improve and leverage that equityA brand audit requires understanding sources ofbrand equity from the perspective of both the firmand the consumer.Specifically, the brand audit consists of twoactivities: Brand Inventory Brand Exploratory 77

78. Brand InventoryThe purpose of the brand inventory is to provide acomplete, up-to-date profile of how all theproducts and services sold by a company aremarketed and branded.For each product, the relevant brand elementsmust be identified, as well as the supportingmarketing program. This information should besummarized both visually and verbally.Although primarily a descriptive exercise, someuseful analysis can be conducted. Consistency 78

79. Brand ExploratoryThe brand exploratory is research activity designedto identify potential sources of brand equity.The brand exploratory provides detailedinformation as to what consumers think of and feelabout the brand.Although reviewing past studies and interviewingrelevant personnel provides some insights,additional research is often required. To allow a broad range of issues to be covered and also permit those issues to be pursued in-depth, qualitative research techniques are often employed first. To provide a more specific assessment of the sources of brand equity, a follow-up quantitative phase is often necessary. 79

80. Brand CharterFormalize company position and philosophyinto a Brand Charter to provide relevantguidelines to marketing managers. Importance of brands and brand equity History of brand Brand positioning Core brand values (POP’s & POD’s) Core brand promise (brand mantra) Brand guidelines Strategic Tactical 80

81. GE Brand ToolsBrand Strategy: Brand Look & Feel:GE Brand Book GE Identity Program 81

82. Brand TrackingTracking studies involve informationcollected from consumers on a routinebasis over time Often done on a “continuous” basis Provide descriptive and diagnostic information Key decisions What to track Who to track When to track

83. Procter & Gamble P&G measures both the sources and potcomes of brand equity based on the resonance model and value chain EquityScan For example, they have found a brand- loyal family pays a $725 premium for a year’s worth of P&G products versus private-label or low-priced brands 83

84. Final Thoughts on Metrics No single number or measure fully captures brand equity. Rather, brand equity should be thought of as a multidimensional concept that depends on What knowledge structures are present in the minds of consumers and What actions a firm takes to capitalize on the potential offered by these knowledge structures. 84

85. Final Thoughts on Metrics There are many different sources of brand equity & many different possible outcomes of brand equity depending on the skill and ingenuity of the marketers involved. Different firms may be more or less able to maximize the potential value of a brand according to the type and nature of their marketing activities 85

86. Branding Toolkit II Conduct mini-brand audit to better understand positioning Capture points-of-parity & points-of- difference Craft brand mantra Communicate learnings

87. BRAND POSITIONING WORKSHEETConsumer Target & Insight Consumer Takeaway Brand Mantra ConsumerNeed State &CompetitiveProduct Set

88. BRAND RESONANCE WORKSHEET RESONANCE JUDGMENTS FEELINGS PERFORMANCE IMAGERY SALIENCE

89. Building Strong Brands 89

90. BuildingCustomer-Based Brand Equity Must adopt 360° view of customer- brand interactions Every brand contact matters At the heart of a great brand are great products & services Great brands go beyond that, however, to ensure all activities of the organization enhance brand equity & profitability 90

91. Marketing IntegrationMust mix & match marketingactivities Different marketing activities can accomplish different thingsMust employ traditional and non-traditional marketing activitiesMust maximize collectivecontribution 1+1=? 91

92. Drivers of Brand Equity Brand elements Brand name, logo, symbol, character, slogan …. Marketing program and activities Product, communications, channel …. Secondary associations Company, other brands, places, people …. 92

93. Brand Elements A variety of brand elements can be chosen that inherently enhance brand awareness or facilitate the formation of strong, favorable, and unique brand associations: Brand Name Character Logo Packaging & Signage Symbol Slogan 93

94. Famous Brand Logos 94

95. Brand Elements Choice CriteriaMemorable Adaptable Easily Recognized Flexible & Updateable Easily Recalled ProtectableMeaningful Legally Credible & Suggestive Competitively Rich Visual & Verbal Transferrable Imagery Within & AcrossAppealing Product Categories Fun & Interesting Across Geographical Aesthetics Boundaries & Cultures 95

96. Brand Element Guidelines Use a collection of brand elements “Mix and match” Create a strong brand identity Visual aesthetic & personality Slogans are powerful branding devices A “hook” or “handle” to positioning 96

97. Leveraging Brand PartnershipsBorrowing appropriate equity from … Other strong brands Well-known people Desirable places & events Etc.by understanding … When equity should reinforce When equity should augment How equity can transfer 97

98. LeveragingSecondary Brand Associations Ingredients Company Co-Brands Other Extensions Brands Country ofEmployees Origin People Brand PlacesEndorsers Channel Things Events Causes Endorsements

99. Understanding theLeveraging ProcessAwareness and knowledge of the otherentity What do consumers know about the other entity?Transferability of the entitys knowledge Does any of this knowledge affect what they think or feel about the target brand when it becomes linked or associated in some fashion with this other entity? 99

100. CBBE Brand Resonance Model as a Guide to Equity Transfer BRAND ENTITY RESO- RESO- NANCE Transfer of equity NANCE JUDG- JUDG- FEELINGS FEELINGS MENTS MENTSPERFORMANCE IMAGERY PERFORMANCE IMAGERY SALIENCE SALIENCE

101. Brand Leveraging Guidelines Must realize that borrowing equity doesn’t come for free Everything can potentially transfer ^&* happens! Aren’t building your own equity in the process Must manage the leveraging process as much as possible to enhance the transfer Sponsorships usually require 2-3 times more in investments Must be creative in execution 101

102. Marketing CRITERIA 1. CoverageIntegration 2. Cost Mail Telephone 3. Direct effects Mobile Interactive 4. Indirect effect Direct Channels Company Stores Personal Selling Advertising OfferingDirectMarketing Personal Product/ Sales Promotion Mass Communi- Services Communi-Interactive cations Prices cations Events &Marketing Experiences Word-of-mouth Public Relations Indirect Dept. Store Discount Store Channels Specialty Store Superstore Supermarket Catalog Showroom Convenience Store

103. “Good Value” Put forth the most compelling value proposition. Being seen as low priced or less expensive is not necessarily the answer The more important consideration is that consumers feel that they are getting appropriate “good value” from a product or service. 103

104. Perceived Brand Value Value is basically the sum of all tangible & intangible costs & benefits Benefits include the perceived monetary value of all the bundle of economic, functional, and psychological benefits Costs include monetary costs but also opportunity costs of time, energy, and any psychological involvement 104

105. Framing Brand Value Marketers must optimally balance the value equation so that consumers feel the “collective benefits outweigh the collective costs.” Marketers may need to frame the brand’s costs and benefits so that they are seen in the most positive light possible 105

106. Channel Issues A number of possible channel types and arrangements exist: Direct channels Personal contacts by mail, phone, electronic means, in- person visits. Indirect channels Third-party intermediaries such as agents or broker representatives, wholesalers or distributors, and retailers or dealers. 106

107. Nike Channel Options Retail Nike products are sold in retail locations such as shoe stores, sporting goods stores, department stores, and clothing stores. Branded Nike Town stores Nike Town stores, located in prime shopping avenues in metropolitan centers around the globe, offer a complete range of Nike products and serve as showcases for the latest fashions. Niketown.com Nike’s e-commerce site allows consumers to place Internet orders for a range of products. Catalog retailers Nike’s products appear in numerous shoe, sporting goods, and clothing catalogs. Outlet stores Outlet stores feature discounted Nike merchandise. Specialty stores Nike product lines such as Nike Golf and Nike ACG are often sold through specialty stores such as golf pro shops or outdoor gear suppliers.

108. Channel Issues Winning channel strategies will be those that can develop “integrated shopping experiences” that combine direct & indirect channels. Execute channel functions Maximize channel efficiency, effectiveness, and dynamics 108

109. Criteria forIntegrating Marketing Channels Channel efficiency Coverage Cost Channel effectiveness Direct & indirect SR sales effects Direct & indirect LR brand equity effects Channel dynamics Balanced conflict/competition vs. coverage/cooperation

110. Integrated Marketing Communicationsand Customer-Based Brand EquityOne implication of the CBBE framework The manner in which brand associations are formed does not matterMarketers should therefore evaluate allpossible communication optionsDifferent communication options havedifferent strengths and can accomplishdifferent objectives 110

111. Mixing and Matching Communication OptionsSales-generating and brand-building What effects are created? How strong are brand linkages? How do the effects that are created affect, directly or indirectly, consumers propensity to purchase & use the brands?“Painting a picture” Brand orchestration 111

112. Class 1 Fluid Milk California Per Capita Consumption (gallons) 30 29.4 29 28.7 28 27.6 27.5 27.6 27.5 27 27.1 26.4 26.3 26.2 26 25.9 25.4Sales 25 24.9 24 24.1 23 22 21 20 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 Year Change 1993 vs. 1980: 18% decrease

113. Marketing Challenge for Milk Consumption in California had declined for decades, recently at an accelerating rate Outspent by competitors who were gaining share Faced with many negative trends in the marketing environment Desperate need to halt the sales erosion 113

114. Development of aMarketing Strategy California Milk Processors formed a commodity board (CMPB) Conducted thorough “brand audit” Brand inventory – profile global marketing milk marketing programs Brand exploratory – gain consumer insights 114

115. The Consumer Insight Consumers already knew about the healthful benefits of milk – wasn’t motivating Consumers ration milk as it is often a shared commodity Milk is indispensable with certain foods – essentially an ingredient 115

116. The Strategy Targeted medium to heavy users Would focus on attracting new users later Reminded them that running out of milk is a real pain Instead of the joy of “milk with food,” emphasized the pain of “food without milk” Relative deprivation 116

117. California Milk Processor Board Developed strong TV ad campaign Smart ad strategy and engaging creative Clever hook: “Got Milk” Leveraged ad message Timely radio, billboards, and P-O-P Partnered with complimentary brands Cookies, cakes, cereal 117

118. The Evolution Evolved campaign forward to keep it fresh and compelling Took misstep with Drysville campaign but quickly returned Developed partnerships to leverage equity of others Food manufacturers 118

119. 800780760 119 mm740 gallons720700 Actual680 Projected660640620600580 91 92 93 94 95 96 97 98 99 00 01 02 03 04 got milk?

120. What Makes GreatBrand-Building Communications? Based on consumer insight & knowledge Balanced between creative & message Well-branded Properly integrated Adequately funded 122

121. The New CommunicationEnvironment Major shifts in media viewing habits Decline of TV advertising Growing use of DVR’s, video gaming and internet broadband Rise of mobile phones as ubiquitous tool Explosion of blogs and social communities Events, experience and buzz marketing 123

122. Modern CommunicationPrograms Top marketers are cost-effectively blending … Traditional, mass media communications Online, interactive communications “Real world,” experiential communications 124

123. IntegratingMarketing Communications Traditional, mass media: greater control Clearer brand messages Interactive media: greater personalization Highly relevant messages Reach different segments Experiences & events: greater activity Combine brand education with entertainment 125

124. Traditional, Mass MediaCommunications Employ print (magazines & newspapers) and broadcast (TV & radio) media Take advantage of broader coverage and greater control Fine-tune and punctuate brand messages 126

125. Interactive Communications Web site Social media Ratings, reviews & (sharing text, feedback images, audio, Company-generated video online) Consumer-generated Communities & E-mails & texts Forums Banner, rich Bloggers (Individuals media, etc. ads & Networks) Facebook Search Twitter advertising YouTube 127

126. Social Media:Classic Campaign ExamplesBMW FilmsDove “Real Beauty” 128

127. BMW FilmsJames Bond film placement GoldenEye Tomorrow Never DiesBMW Films A series of short on-line films using A-list directors and actors where a central character (Clive Owen) helped people through difficult circumstances using deft driving skills—in a BMW. Supported with TV spots that mimicked movie trailers, print and online advertising, designed explicitly to drive consumers to the BMW Films Web site. Nearly 2 million people registered on the site, with 60% of those registrants opting to receive more information via e-mail. 94% of registrants recommended films to others, seeding the viral campaign, and more than 40,000 people voluntarily responded to a survey. 129

128. Dove “Real Beauty” Dove had been backed for decades by traditional advertising touting the brand’s benefit of one-quarter moisturizing cream and exhorting women to take the seven-day Dove test. A significant shift in strategy occurred for Dove in 2003 with the launch of the Real Beauty campaign, which celebrates “real women” of all shapes, sizes, ages, and colors. The multi-media campaign was thoroughly integrated. Traditional TV and print ads were combined with all forms of new media, such as real-time voting for models on cell phones and tabulated displays of results on giant billboards. PR was dialed up; paid media was dialed down. The Internet was crucial for creating a dialogue with women. A website was launched and supplemented with ad videos (“Evolution” & “No Age Limit”). 130

129. Interactive Communications Establish a public voice and presence on the Web Complement and reinforce other communications Ensure innovation & relevance Remember … not everyone participates actively in social media Only some of the consumers want to get involved With some of the brands they use and, even then Only some of the time. 131

130. Integrated MarketingCommunications is the Key No question, some consumers will choose to become engaged with a brand at a deeper and broader level Marketers must do everything they can in the coming years to encourage them to do so But regardless, many consumers will choose not to do so Understanding how to best market a brand given such diversity in consumer backgrounds and interests is crucially important

131. Experiential Communications Employ multiple touch points & multiple senses via special events, contests, promotions, sampling, etc. Make a splash, but pick your spots Capitalize on real news – even if you have to make it 133

132. MARKETING COMMUNICATION INTEGRATION Traditional, mass media communications Online, “Real world,” interactive experientialcommunications communications

133. Mobile Marketing More mobile phones in the world than personal computers BUT many are not smart phones Limits opportunities (for now), ads as tiny static billboards Much action with apps VW launches GTI with iPhone App Need easy payment options to be more than a display medium 135

134. Achieving Resonance First, must create foundation for resonance Proper salience & breadth & depth of awareness Firmly established points-of-parity & points-of- difference Positive judgments & feelings that appeal to the head & the heart Then, must optimize four dimensions of brand resonance 136

135. 1. Behavioral Loyalty Break down barriers at purchase & consumption Broaden customer access point Find appropriate new distribution outlets Elicit additional & new consumption opportunities 137

136. 2. Building Brand AttachmentStake out emotionalterritory Experiential Warm, fun or exciting Enduring Sense of security, social approval, or self-respectCelebrate uniqueness &make indispensable Relevance Immediacy 138

137. Pampers Pampers evolved from a functional to an emotional positioning: Absorbency & dry baby “Caring for Baby’s Development” Pampers changed marketing program accordingly Advertising etc. Web site

138. 3. Sense of CommunityAllow, facilitate, andencourage interaction online& offline with others Learn from and teach others Express and observe loyaltyGive them something to talkabout Product or brand news Social events Marketing activities AXE : “The Axe Effect” 140

139. The “Axe” EffectAXE Deodorant Body SprayGuerilla Marketing Online, created interactive viral campaign with low-budget videos of “The Axe Effect” and girls being exaggeratedly attracted to guys Offline, placed “enhanced” emergency exit signs, promotional black thongs in guys dryers, etc. On-air, ran racy, award-winning TV ads 141

140. Consumer-to-ConsumerEquity Transfer Promotions Sponsorships Events Experiences InformationConsumer 1 Consumer 2 Emotions Blogs Web sites Online ads Bulletin & videos boards 142

141. Building Brand EngagementMust have people readabout, talk about,think about, andengage in activitieswith the brandCreate opportunitiesfor brand involvement Jeep Jamboree Queensland Tourism “Best Job in the World” contest 143

142. Jeep Jamborees & CampsIn addition to the hundreds of local Jeepenthusiast clubs throughout the world,Jeep owners can convene with theirvehicles in wilderness areas acrossAmerica as part of the company’s officialJeep Jamborees and Camp Jeep.Since the inaugural Camp Jeep in 1995,over 28,000 people have attended thethree-day sessions, where they practiceoff-road driving skills and meet other Jeepowners.Jeep Jamborees bring Jeep owners andtheir families together for two-day off-road adventures in more than 30 differentlocations from Spring through Autumneach year. 144

143. Tourism Queensland “Best Job in the World” Contest Winner: Ben Southall Tourism Queenslands groundbreaking THE BEST JOB IN THE WORLD campaign is a PR and viral marketing phenomenon that has generated worldwide media attention, with over $11 million worth of exposure and 627 million media impressions in the U.S. and Canada alone. The concept was simple: post a one-minute video application on TQ’s Web site explaining why you should be chosen as caretaker of Hamilton Island on the Great Barrier Reef and you might get to blog and cam your way through a six-month gig that paid about $100K U.S. Approximately 34,684 people from more than 200 countries applied for the job of Island Caretaker. A social networking frenzy ensued with 336,000 Facebook-referred Web site visits, more than 3,170 @Queensland followers on Twitter and over 338 members on the campaign’s Wiki (islandreefjob.ning.com). 423,000 people voted for their favorite top- 50 finalist.

144. Creating Brand Resonance &Intense Active LoyaltyBehavioral loyalty Break down barriers at purchase & consumption Broaden customer access pointAttitudinal attachment Stake out emotional territory Celebrate uniqueness & make indispensableSense of community Allow, facilitate, and encourage interaction online & offline with others Give them something to talk aboutActive engagement Have people read about, talk about, think about, and engage in activities with the brand Create opportunities for brand involvement

145. Marketing & Resonance Any marketing activity can affect more than one dimension of resonance Interactive or multiple effects Certain categories allow for more resonance Inherently high levels of interest & activities To maximize brand resonance, increase the levels of both the intensity & activity of customer loyalty relationships 147

146. The Duality of Brand ResonanceIntensity of Heirloom BelovedRelationship Brands Brands Heritage Brands Necessity Brands Utilitarian Brands Activity of Brand Resonance Requires Relationship Customer Intensity & Activity

147. Branding Toolkit III Apply the positioning test to your brand marketing activities Saliency? Performance & Imagery? Judgments & Feelings? Resonance? 149

148. Brand Growth Strategies 150

149. Growing Brand EquityAcross Categories & Markets Product development Brand extensions Product acquisitions Market development New channels & outlets New geographies 151

150. Brand Architecture DefinedThe brand architecture for a firmreflects the number and nature ofcommon or distinctive brand elements(names, logos, etc.) applied to thedifferent products sold by the firm How many different brands should be sold by the firm? How many different versions of brands should be sold by the firm? 152

151. Role of Brand ArchitectureBrand architecture involves defining bothbrand boundaries and brand relationships Depth of brand strategy Line extensions Breadth of brand strategy Category extensionsBrand architecture should facilitate brandequity development Clarify and help brand awareness Improve consumer understanding by communicating similarities and differences between products in a brand family Motivate and help brand image Maximize transfer of equity to/from parent brand to improve trial and repeat loyalty 153

152. 154

153. Brand Stretch Successes Some of the world’s strongest brands have been stretched across multiple categories 155

154. But … Don’t Forget the “SpandexRule”“Just because youcan … doesn’t meanyou should!” Scott Bedbury, formerly VP-advertising Nike & VP-marketing Starbucks 156

155. 3 Key Architecture Issues1. Defining brand potential What is the brand vision? How should the brand be competitively positioned? What are the brand boundaries?2. Identifying extension opportunities What products or services will help to achieve that potential?3. Organizing brand offerings How should products and services be branded so that they achieve their maximum sales and equity potential? 157

156. Brand Architecture Decisions:1. Defining Brand PotentialBrand vision What is the higher-order purpose of the brand?Brand positioning What strong, favorable, and unique brand associations (points-of-differences) should exist in the minds of consumers? What are the necessary and competitive points-of-parity required? What should the essence or core elements of the brand be (brand mantra)?Brand boundaries What products or services should it represent? What benefits should it supply? What needs should it satisfy? 158

157. A Consumer-CenteredBrand Vision and Passion Based on keen consumer & customer understanding Find higher-order purpose that is anchored in … Consumer aspirations Brand truths Transcend physical product category descriptions and boundaries 159

158. BEFORE: AFTER:How many “Colorful Arts &crayons in Craftsyour box? For Kids?

159. Assessing Brand PotentialWhat makes a brand“broad”? More “abstract” positioning Able to support higher order promiseWhat makes a point-of-difference“transferable”? Virgin “satisfying Associated with a widely unmet customer relevant benefit needs” cuts across Supported by multiple RTB’s or many categories supporting attributes 161

160. Brand PortfoliosMultiple brands may be employed in acategory to improve market coverage Target different market segmentsMust be careful not to over-brand Focus on fewer, stronger brandsBasic principle of brand portfolios… Maximize coverage Minimize overlap 162

161. GAP Brand Portfolio PRICEHigh BANANA REPUBLIC GAP OLD NAVYLow QUALITY Low High

162. JOSE CUERVO BRAND PORTFOLIO — La Reserva — Dos RealesPrice — 1800 — Gold/Margarita Mix — White — Authentic — Rita’s Knowledge / Experience

163. Brand Architecture Decisions:2. Identifying Product Opportunities What new products or services will help the brand achieve its potential Must articulate brand vision in terms of new products and services Must obtain brand preference for any new products and services from consumers 166

164. “UNSUCCESSFUL” CATEGORY EXTENSIONS CAMPBELL’S tomato sauce LIFESAVERS chewing gum CRACKER JACK cereal HARLEY DAVIDSON wine coolers COCA-COLA C2 cola HIDDEN VALLEY RANCH frozen entrees BIC perfumes BEN-GAY aspirin KLEENEX diapers CLOROX laundry detergent LEVI’S TAILORED CLASSICS suits NAUTILUS athletic shoes DOMINO’S fruit-flavored bubble gum SMUCKER’S ketchup FRUIT OF THE LOOM laundry detergent

165. Brand Extension Checklist Does parent brand have strong equity? Is there a strong basis of fit? Will extension have necessary points- of-parity & points-of-difference? How can marketing programs enhance extension equity? What implications will the extension have on parent brand equity and profitability? How should feedback effects best be managed? 169

166. BRAND EXTENDIBILITY SCORECARD Allocate points according to how well the new product concept rates on the specificdimensions in the following areas: Consumer Perspectives: Desirability 10 pts. _____ Product category appeal (size, growth potential) 10 pts. _____ Equity transfer (perceived brand fit) 5 pts. _____ Perceived consumer target fit Company Perspectives: Deliverability 10 pts. _____ Asset leverage (product technology, organizational skills, marketing effectiveness via channels & communications) 10 pts. _____ Profit potential 5 pts. _____ Launch feasibility Competitive Perspectives: Differentiability 10 pts. _____ Comparative appeal (many advantages; few disadvantages) 10 pts. _____ Competitive response (likelihood; immunity or invulnerability from) 5 pts. _____ Legal/regulatory/institutional barriers Brand Perspectives: Equity Feedback 10 pts. _____ Strengthens parent brand equity 10 pts. _____ Facilitates additional brand extension opportunities 5 pts. _____ Improves asset base TOTAL _____ pts

167. Baby Care NBD “Where to Play” Map (North America) June 6, 2002 Laundry Baby Wash / Strollers/Walkers Beds/Cribs Bedding Shoes Clothing Sun Care Hair Care Skin Care Oral Care Products Soap Mattress Toilet Training Accessories (Potty) High Chairs Disp Accessories - Bed Mats, Changing Mats, etc Infant/Toddler CarSeats Home Clothing Diaper Rash Cream Furnishings Changing Tables & Travel Personal Diaper Bags Cleansing Videos / Music Diapers / Wipes Toys / Books Stimulation & Diaper Disposal Day Care/Baby Learning Sitting Caring For Diapering Mom Hand Care Cleaners Insurance & Your Baby’s & Changing Other services Odor Eliminator and Development Air Products Household Safety Access Surface Cleaners - Safety Baby Clean ‘n Play Gates / Locks /Intercoms / Monitors Environment Bibs Sensors to Locate & HygieneChild: safe zone, etc Baby Water Illness Detection Managing Sensors: e.g. SIDS, Pregnant/Lactant vital signs, etc & Treating Feeding, Woman’s Nutrition Illness Detection Illnesses Nutrition & Sensors: e.g. ear Infant Juices / infect., dehydration Water Drinks RX Baby Vitamins OTC Medicine Breast Pads Wound Patch Re-hydration Prepared/Dried/Other Sterilizing Feeding Access Feeding Access Breast Pumps Formula Bottles/Nipples Drinks Pedialite Baby Foods Products Disposables DurablesLegend for Colors: Home Adjacent Far Off Equity Legend for Borders: TBD Fit w/ Pampers In-Market Staffed Project

168. Pampers NBD“Where to Play” Research “Caring For Your Baby’s Development” Home Diapering & Changing Adjacent Baby Environment & Hygiene Feeding, Nutrition & Water Personal Cleansing Far Clothing Home Furnishings & Travel Safety Managing & Treating Illnesses 172

169. UnderstandingExtension Dynamics Plan optimal sequence of new product introductions to achieve brand potential Grow brand through “little steps” Understand equity implications of each extension in terms of POP’s & POD’s 173

170. Brand Architecture Decisions:3. Organizing Brand Product OfferingsEnsure maximum clarity &understanding to consumers& customers Recognize what they know & want Appreciate how they will behaveSub-brand appropriately Only with distinctive, complementary benefit; otherwise, use a descriptor to designate productEmploy full range of brandelements Nomenclature, product form, shape, graphics, color, versioning, etc. 174

171. Brand Hierarchy Structure Corporate Brand (e.g., Toyota)MasterBrand Family Brand (e.g., Lexus)Sub-Brand Individual Brand (e.g., LS) Individual Item or Model (e.g., Hybrid) 175

172. Brand Hierarchy PrinciplesPrinciple of growth: Investments in market penetration or expansionvs. product development should be made according to ROI opportunitiesPrinciple of survival: Brand extensions must achieve brand equity intheir categoriesPrinciple of synergy: Brand extensions should enhance the equity ofthe parent brandPrinciple of simplicity: Employ as few levels as possiblePrinciple of clarity: Logic and relationship of all brand elementsemployed must be obvious and transparent.Principle of relevance: Create global associations that are relevantacross as many individual items as possiblePrinciple of differentiation: Differentiate individual items and brandsPrinciple of prominence: The relative prominence of brand elementsaffects perceptions of product distance and the type of image created fornew productsPrinciple of commonality: The more common elements shared byproducts, the stronger the linkages

173. BMW "Ultimate Driving Machine" POP/POD - Luxury POP/POD - Performance3 Series 5 Series 7 Series

174. Sub-Branding Effects Using a sub-brand name can cue a subset of parent brand information Can allow for the creation of specific brand beliefs position the extension in new category Can facilitate access to associations and attitudes to the company or family brand as a whole Can serve as a signal to consumers to expect differences in new product Using a sub-brand name can help to protect or shield the parent brand BUT sub-brands require investments and disciplined and consistent marketing to do so 178

175. Branding Strategy Screen Single Sub-brand: Sub-brand: Parent Parent Parent New Brand Primary Secondary Brand-Parent brand equity highly relevant -Parent brand equity less& differentiating relevant & differentiating- More opportunities for positive - Fewer opportunities for positivefeedback for Parent brand feedback for Parent brand- Little risk of negative feedback to - Greater risk of negativeParent brand feedback to Parent brand Evaluate optimal equity upside and risk 179

176. The Brand Relationship Spectrum Sub-brands under House of Brands Branded House Endorsed Brands (Invisible Master (Master Brand) the Master Brand Brand)Master brand plays a Sub-brands specify Brands are endorsed Brands aredominant role in the area of operation by the master brand independent of thedriving purchase of the master brand either by using master branddecisions corporate identity or Both Master- and Sub- Stand-alone brands nameMaster brand is highly Brand play a role in drive purchaserelevant and driving purchase Master brand transfers decisionsdifferentiating decisions credibility and positive associations to the Master brand provides endorsed brand overall credibility More Less Similarities to Master Brand

177. BrandingStrategy Implementation Must apply marketing design elements and touchpoints according to basic principles Principle of prominence: The relative prominence of brand elements affects perceptions of product distance and the type of image created for new products Principle of commonality: The more common elements shared by products, the stronger the linkages Must understand how to “dial up” or “dial down” different brand elements. 181

178. Summary Must apply disciplined, creative approach to brand architecture – a classic blend of “art & science” Three key steps are: Assessing brand potential Identifying product and service opportunities to achieve brand potential Defining a brand extension roadmap 182

179. Brand Architecture Guidelines Must adopt strong customer focus Recognize what they know & want Appreciate how they will behave Must avoid over-branding Too many brands Must be disciplined Consistency is key Flexibility may be need – pure models are rare 183

180. Brand Architecture Guidelines Strong umbrella family brands are highly desirable Maximize synergies & equity flow Sub-brands can play a specific purpose Communicates relatedness & distinctiveness In updating brand hierarchy, must preserve as much brand equity as possible 184

181. NIVEA MENTAL MAP Scent/Feel Care Good Value Blue/White ProtectionHeritage NIVEA Mildness For Family Gentleness Multipurpose/ Trustworthy/ Universal Reliable Honest Simple/Pure

182. Nivea Core Brand Associations Mild & Gentle Trusted & Reliable Friend for a Lifetime Emotional Bonds Natural, Accessible Beauty A Feeling of Well-being for Everyone Todays Expert in Skin Care Effective Yet Understandable

183. A Nivea Brand Mantra Gentle, Mild, Caring & Protective

184. NIVEA SUB-BRAND POSITIONING Points-of-Parity Points-of-DifferenceBody Pleasant Application Gentle & Caring Pleasurable Moisturization IntimacyVisage Youthful Beauty Science with Confidence Modern/ContemporarySun Protection/Safety Gentle & Caring Fun/BeachBath & Shower Convenience/Cleansing Gentle & CaringFor Men Sensual Image Gentle & Caring SoothingDeodorant Efficacy Gentle & CaringShampoo Cleansing Gentle & Caring Appearance

185. NIVEA BRAND HIERARCHY BDF NIVEA Skin Care Personal CareCreme Body Visage Sun Bath & For Deo Shampoo (Milk/ Shower Men Lotion) Q10Soft Vital Beauté

186. Creating a Global Brand Footprint 190

187. Establishing Brand Equity Over Market Segments1. Identify differences in consumer behavior How they purchase & use products What they know & feel about brands2. Assess relevance of brand positioning Impact of existing points-of-parity and points-of-difference? Need for additional points-of-parity and points-of-difference?3. Adjust branding program Choice of brand elements Nature of supporting marketing program Leverage of secondary associations 191

188. Market Development:Building a Global Brand How valid is the mental map in the new market? How appropriate is the positioning? What is the existing level of awareness? How valuable are the core brand associations, points-of-parity, and points-of-difference? What changes need to be made to the positioning? Do any new associations need to be created? Should any existing associations not be created? Do existing associations need to be modified? By what means should this new mental map be created? Can the same marketing activities still be employed? What changes need to be made? What new marketing activities are necessary? 192

189. Building & Managinga Global Brand Adopt a top-down approach: Craft a broadly relevant global positioning Pampers – “Caring for Baby’s Development” Nike – “Authentic Athletic Performance” Maximize relevance & applicability in different markets How does the brand mantra translate in different markets? Understand specific competitive & consumer realities May need to develop separate positioning templates for fundamentally different types of markets Developed vs. developing May need to highlight a specific POP/POD for certain markets 193

190. Ten Commandments ofGlobal BrandingUnderstand similarities and differences in theglobal branding landscapeDon’t take short-cuts in brand-buildingEstablish marketing infrastructureEmbrace integrated marketing communicationsCultivate brand partnershipsBalance standardization and customizationBalance global and local controlEstablish operable guidelinesImplement a global brand equity measurementsystemLeverage brand elements 194

191. Ten Commandments ofGlobal BrandingUnderstand similarities and differences in the global branding landscape. Have you tried to find as many commonalities as possible across markets? Have you identified what is unique about different markets? Have you examined all aspects of the marketing environment (e.g., stages of brand development, consumer behavior, marketing infrastructure, competitive activity, legal restrictions)? Have you reconciled these similarities and differences in the most cost-effective and brand- building manner possible?Don’t take shortcuts in brand building. Have you ensured that the brand is being built from the bottom up strategically by creating brand awareness first before crafting the brand image? Have you ensured that the brand is being built from the bottom up tactically by determining the appropriate marketing programs and activity for the brand in each market given the particular strategic goals?Establish marketing infrastructure. Have you created the appropriate marketing infrastructure—in terms of manufacturing, distribution, and logistics—from scratch if necessary? Have you adapted to capitalize on the existing marketing infrastructure in other countries?Embrace integrated marketing communications. Have you considered nontraditional forms of communication that go beyond conventional advertising? Have you ensured that all communications are integrated in each market and are consistent with the brand’s desired positioning and heritage? 195