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New Brand v Brand Extension The Costs And The Rewards Mike Rocha, Managing Director, Brand Finance plc FDIN: Brand Innovation – Turning Ideas Into Profit.

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Presentation on theme: "New Brand v Brand Extension The Costs And The Rewards Mike Rocha, Managing Director, Brand Finance plc FDIN: Brand Innovation – Turning Ideas Into Profit."— Presentation transcript:

1 New Brand v Brand Extension The Costs And The Rewards Mike Rocha, Managing Director, Brand Finance plc FDIN: Brand Innovation – Turning Ideas Into Profit Thursday 24 th January 2008

2 About Brand Finance Brand Transactions Value Based Marketing Value Based Marketing Brand Valuation Brand Valuation ‘What is the value of my intangible assets?’ ‘What is the value of my intangible assets?’ ‘Is it a good deal?’ ‘Can I leverage my intangibles?’ ‘Is it a good deal?’ ‘Can I leverage my intangibles?’ ‘How can I increase the value of my brands?’ ‘How can I increase the value of my brands?’ brandgenius

3 About Brand Finance

4 Where’s the real value in your brand? brandgenius

5 The relentless demand for growth brandgenius

6 The obsessive desire for more brandgenius

7 The unlimited scope of possibility brandgenius

8 The fundamental questions to ask brandgenius

9 Where’s the real value in your brand? brandgenius Many companies have creative ideas, act on them and then measure the impact. Few identify the best opportunities first, and then focus creatively on them. Most innovation is blind, and therefore fails to deliver the best results. Few companies realise the maximum potential of their brands, their most valuable assets.

10 The demand for innovation brandgenius

11 Where’s the real value in your brand? brandgenius Brand innovation can take many forms … new markets, new positioning, new audiences, new applications, new identity, new products, new services, new channels, new business models … The point is to first understand where the value is, in your brand, in your portfolio, in your market (now and in the future). Then focus innovation on unlocking the best value opportunities.

12 Value innovation has 4 phases brandgenius Concept Zone Impact Zone Concept Zone Creative Zone Future Zone

13 Value innovation has 4 phases brandgenius Concept Zone Impact Zone Concept Zone Creative Zone Future Zone Where are the best opportunities? What are the creative possibilities? Which are the best innovations? How much value would it create? Identify markets and and products of most potential value Focus creativity where it can have most impact More rigorously evaluate and connect the best ideas Value impact is more measurable and greater

14 brandgenius Future Zone 1

15 Future Zone: Where are the best opportunities? brandgenius 1

16 Future Zone: Where are the future opportunities? 1

17 Future Zone: Where are the adjacent markets? 1 brandgenius

18 Growth Profit Analysis could be done for markets, segments, key accounts, brands, categories. products, or channels Future Zone: Which markets have most potential? brandgenius Identifying the most profitable opportunities high growth markets optimal competitive position profitable customer segments 1

19 brandgenius Creative Zone Future Zone Creative Zone 2

20 Creative Zone: What are all the possibilities? brandgenius 2

21 Creative Zone: Gaining new perspectives brandgenius 2 Business narrow view Business narrow view Customer broader view BusinessCustomer

22 Exploring Commercialising Focusing Creativity Opening up Closing down Innovation Creative Zone: Creatively stretching the possibilities 2 brandgenius

23 Creative Zone: What are all the possibilities? 2 brandgenius

24 Concept Zone Creative Zone Future Zone Concept Zone 3

25 Concept Zone: Which are the best ideas? brandgenius 3

26 Iconic design iPod Brand U2 Vertigo iTunes Podcasting iPod Phone Special Edition Exclusive Releases Music Store Legalising Filesharing Success Story Apple White cables Imitation And buzz Ad Graphics 60G Photo Video Desperate Housewives Mini Shuffle Nano Motorola (RED) Steve JobsiMac Concept Zone: Fusing the best ideas together 3 brandgenius

27 Concept Zone: Shaping new value propositions brandgenius 3 Articulating brands through compelling propositions leveraging brand power for customers maximising value to each segment optimising price elasticity

28 Concept Zone: Evaluating how best to deliver them brandgenius 3 Extending brands to reach further, faster and more profitably leveraging power in adjacent markets licensing and franchising maximising new profit streams Core business model Useful extension strategy Total business format Brand and related services ProductsFormats Locations

29 brandgenius Concept Zone Impact Zone Concept Zone Creative Zone Future Zone Impact Zone 4

30 Impact Zone: What will be the impact? 4 brandgenius

31 Impact Zone: What will be the impact? brandgenius 4 Market Market scope and dynamics Size and profitability Customers Segments and profitability Needs and perceptions Channels Distribution channels Reach and profitability Competitors Direct and indirect Positioning and performance Financials Revenue, growth, cost trends Economic profitability Business Case Best allocation of budgets and resources to deliver short and long-term returns Best mix channels and communication media to each audience Clear and compelling business case outlining Future trends Creative options and concepts Resource allocation Financial impact (scenarios) $ Today Short-term revenue and profitability Longer-term growth and shareholder value

32 Impact Zone: What will be the impact? brandgenius 4 SEGMENT 1 SEGMENT 2 SEGMENT 3 SEGMENT 4 SEGMENT 5 SEGMENT 6 TOTAL BRAND METRICS Brand Investment $X $ $ $ $ $ $ Brand Equity Index x x x x x x Market Share % % % % % % Brand Value $200 $ $ $ $ $ $ Brand Investment $X $ $ $ $ $ $ Volumes/ Revenues x x x x x x Market Share % % % % % % Brand Value $200 $ $ $ $ $ $ Brand Investment ? $ $ $ $ $ $ Brand Equity Index x x x x x x Market Share Y% % % % % % % Brand Value $Z $ $ $ $ $ $ Brand Investment ? $ $ $ $ $ $ x x x x x x Market Share Y% % % % % % % Brand Value $300 $ $ $ $ $ $ Base CaseTarget Scenario Target Value Creation Target Brand Investment Volumes/ Revenues X%£££

33 Impact Zone: What will be the impact? brandgenius 4 Original Value Final Value Increased Customers New Channels Additional investment Synergies £ Incremental value New Markets

34 Impact Zone: What will be the impact? brandgenius 4 Investor Relations Marketing becomes key part of analyst briefings and annual report Business Performance Key reports produced for CEO and directors, driving priorities and investment Personal Performance Linked to manager and team’s objectives, KPIs, reviews and compensation Market research Linked into ongoing market research tracking program Financial analysis Linked into ongoing financial systems and auto-analysis Articulating the real value of brands and innovation to the wider business to finance and the boardroom to investors and analysts

35 Unlocking the real value of brands brandgenius Where are the best opportunities? What are the creative possibilities? Which are the best innovations? How much value would it create? Identify markets and and products of most potential value Focus creativity where it can have most impact More rigorously evaluate and connect the best ideas Value impact is more measurable and greater Concept Zone Impact Zone Concept Zone Creative Zone Future Zone

36 Some Brand Genius clients brandgenius

37 Brand innovation that delivers extraordinary results brandgenius Innovation is relatively easy. But innovation that has real impact, that drives sustained profitable growth, that creates significant value, is much rarer and harder. So why not focus your creative energy on where it can have most impact - using the fusion of analysis and creativity to drive innovation with extraordinary results?

38 A couple of ideas we wouldn’t necessarily recommend Harley Davidson cake making kit Evian Water- Filled Bras

39 brandgenius A partnership between Brand Finance and the Genius Works unlocking the real value of your brand


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