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© IMD International, Lausanne, Switzerland; 2011 - Not be used or reproduced without permission. Developing Global Brands Developing.

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Presentation on theme: "© IMD International, Lausanne, Switzerland; 2011 - Not be used or reproduced without permission. Developing Global Brands Developing."— Presentation transcript:

1 © IMD International, Lausanne, Switzerland; Not be used or reproduced without permission. Developing Global Brands Developing Global Brands by Professor Dominique Turpin President of IMD London, July 2011

2 Why is (global) brands management so critical today? What are the key ingredients of great (global) brands? Guide How to manage a (global) brand portfolio?

3 Why Do We Need A Global Brand Strategy? “The marketing battle is increasingly a battle of brands, a competition for brand dominance... … “Businesses and investors recognize brands as the company’s most valuable assets.” … “It is increasingly more important to own markets than factories. The only way to own markets is to own market- dominant brands ” Guide

4 Objectives: To differentiate ourselves from the competition To simplify consumers’ choice To establish a clear identity and a unique top-of-mind position To minimize price competition Global Brand Strategy: Objectives & Benefits Guide

5 Benefits: Top of mind for new business Repeated experience Price premium Good reputation and benefit of the doubt Opportunities to attract more talents Increased value of the company Global Brand Strategy: Objectives & Benefits Guide

6 ProductsBrands Made in the factoryMade in consumer’s mind Can be copiedIs unique and proprietary Have functional valueHave functional and emotional value Can become outdatedCan become timeless A Brand Is More Than A Product! Guide

7 A Brand Is More Than A Product! Guide What's next Air Transportation from A to B Planes Crew Reservation Alliance Network Lounges Frequent Flyer Program Docu- mentation (Tickets, Boarding passes) Baggage Handlers Advice & Information Meals Ground Transpor- tation Assistance & Problem Solving Entertain- ment Amenitis' (pillows, blankets) A380 Computer / Internet Servers Fax on board Ex: The Singapore Airlines Brand “The Singapore Girl”

8 Global Brands from China

9 Global Brands from Latin America

10 A Brand Is Much More Than The Core Product ProductServicesImagePeople FeaturesDeliverySymbol Competence PerformanceInstallationsAtmosphere Courtesy ConformanceConsultingMedia Credibility SafetyTrainingEventsReliability ReliabilityEtc.Etc.Responsiveness PackagingEmotions Name (i.e LC1 vs. Actimel) Etc. Etc. Guide

11 What is a Strong Brand? A strong brand does not depict a physical product but a RELATIONSHIP with the customer that results into TRUST! Guide

12 Guide P&G’s “Icon Brands” “Brands with clearly differentiated features and benefits, exceptional attachment, loyalty and engagement!” Brands, Power Brands, Icons Brands

13 Awareness (Some recognition, understanding, knowledge) Acquaintance (Significant familiarity, reliability, heritage) Relationship (Solid Trust, credibility, empathy) Respect (Great respect, warmth, excitement) Icon (Exceptional attachment, loyalty, engagement) The Brand Ladder (Source: Dominique Turpin, IMD, 2004) From Products to Power Brands to Icon/Passion Brands Guide

14 Guide The Ultimate Test of Passion Brands?

15 Brand: The Ultimate Differentiation Factor “Products and features can be copied, but brand image is yours and only yours! Guide

16 Global brands: Your ultimate differentation! What are the key ingredients of great (global) brands? Guide How to manage a (global) brand portfolio?

17 1. Establish a clear identity/philosophy 2. Commit to continuous support 3. Be consistent in your communications 4. Keep in touch with customers and staff 5. Defend differentiation proactively 6. Watch out for complacency 7. Turn employees into brand ambassadors Seven Building Blocks of a Successful Global Brand Strategy Guide

18 1. Great global brands are generally very focused Guide

19 A clear product/ concept focus An answer to a universal human “headache” A meaningful and differentiated value proposition A clear positioning and/or corporate philosophy Easy to communicate internally and externally 1. Great global brands are generally very focused Guide

20 Source: Adapted from Nirmalya Kumar Brand Values California Non-conformist Fun Brand Purpose Great design, easy to use, fun! Brand Character Artists Creative, Liberated Guide 1. Establish a Clear Identity With A Simple Brand Strategy

21 Brand Values “The Swiss Who Shake the World” From Whom? Brand Purpose “Fun, Fashionable, Sporty” Why? Brand Character “Young at Heart” For Who? Guide 1. Establish a Clear Identity With A Simple Brand Strategy Source: Adapted from Nirmalya Kumar

22 Guide Brand Values The most ambitious Italian motorbike manufacturer (From whom?) Brand Purpose Premium performance and timeless Italian style (For what?) Brand Character The most fanatical riders (For whom?) 1. Establish a Clear Identity With A Simple Brand Strategy Source: Adapted from Nirmalya Kumar

23 “When business is good, it pays to advertise When business is bad, you've got to advertise!” Konosuke Matsushita, Founder of Matsushita Electric Industrial (recently renamed Panasonic) 2. Commit to Continuous Support… in terms of Money, Technology, Talents… Guide

24 3. Be Consistent Over Time! Guide

25 Consistency, Consistency, Consistency … 1978 Nitani Hideaki 1979 Eto Toshiya 1979 Aida Yusuke 1981 Goto Sumio 1981 Ishimaru Hiroshi 1981 Agawa Hiroyuki 1982 Yamamoto Kansai 1983 Kanze Hideo 1984 Yura Takuya 1985 Sawai Hideo Guide

26 Consistency, Consistency, Consistency … Guide In building our brand, we learnt the following three ingredients are absolutely essential: 1. A consistent and relevant message to consumers, 2. A consistent transmission of this message across all channels of communications with consumers (advertising, web, catalogues, brochures, packaging, exhibititions, products, etc.), 3. That the message to consumers is consistent over time!

27 Your brand isn’t what you say you are... Your brand is what your customers and your own people THINK you are! 4. Keep in Touch With Customers & Staff! Conceived vs. Perceived Value Guide

28 4. Keep in Touch With Customers! Conceived vs. Perceived Values Conceived value in HQ: “Lexus is a better car than Mercedes-Benz” Perceived value by German consumers (… and some staff members) “M-Benz is a better car than Lexus¨!” Ex: Lexus in Germany Guide

29 5. Defend Your Differentiation Proactively! Gillette continues to grow by constantly raising the standard of product performance with respect to a single benefit (ever-closer shaves) Guide

30 5. Defend Your Differentiation Proactively! Guide

31 5. Defend Your Differentiation Proactively! Guide

32 5. Defend Your Differentiation Proactively! Guide

33 5. Defend Your Differentiation Proactively! Guide Abba Seafood Antonio Puig Bacardi Martini Balhsen Barilla Beiersdrof AG Bitburger Brauerei Bourjois Bristol Myers Research Results from leading FMCG companies* Cadbury Schweppes Campina Melkunie Chanel Douwe Egberts Electrolux Fort James Heineken Henkel ICI Paints Kimberly Clark Mars McCain Foods Merloni Nestlé P&G Pampryl Pernod Ricard Philips Lighting Reckitt & Colman Sara Lee SCA Hygiene Smiths Foods Group Unilever Foods Unilever HPCE Waterford Crystal Wella AG *Source: Kamran Kashani, IMD; PIMS Europe; the European Brand Association

34 1. Innovation2. Enhancement of3. Improved Consumer Value Economics More innovative brandsGrowth is a function ofBrands with higher outgrow the restconsumer value creationperceived value spend relatively less on advertising Share and Sales Growth (%) % Sales from New Products Relative to Competitors 3% 1% 8% 2% 18% 5% LowerSimilarHigher 0% 5% 10% 15% 20% Sales Growth Share Growth Index: Advertising/ Sales Revenue Starting Brand Preference Third or lower Second preference Most preferred Improvement in Perceived Consumer Value Sales Growth (%) Share Change (points) No ChangeSmallLarge 0% 10% 20% 30% Sales Growth Share Growth *Source: Kamran Kashani, IMD 5. Defend Your Differentiation Proactively! IT PAYS OFF!!!! Guide

35 Guide

36 Guide

37 Guide

38 « What is key to the intangible benefits of the brand? The daily behavior of our staff and all who represent the face of Shell to customers and other stakeholders!» Venetia Howes, Global Brands Strategy Manager for Shell International 6. Turn Every Employee Into An AMBASSADOR of Your Brand Guide

39 7. Watch Out For Complacency! The weakening of a strong brand is frequently self-inflicted by: - Not respecting the inherent values of the brand - Jeopardizing the long term with the short term - Not creating measurable perceived value - Poor communication and execution of the brand strategy Guide

40 Global Brands: Your Ultimate Differentation Tool Guide KSFs of a Successful (Global) Brand Strategy: Simple, Meaningful, Distinctive,Credible & Consistent! How to manage a (Global) brand portfolio?

41 Guide “Niche” Out- performing A problem!“Value” Low delivered costs High perceived value Source: X. Gilbert and P. Strebel Strategy is About Making Some Tough Choices!

42 Source: X. Gilbert and P. Strebel Low delivered costs Niche Middle of the Road Value Low delivered costs High perceived value Hi Low ACME Out- performing Can You Have One Brand to Serve Several Strategies? Guide

43 Guide Source: Adapted from X. Gilbert and P. Strebel Low delivered costs High perceived value Hi Low One Can Overcome This Challenge By Managing A Portfolio of Brands… Example: The Volkswagen Group

44 Guide … And Therefore Thinking Segments!

45 Guide Purchasing Design and Engineering Manu- facturing Marketing Distribution and Sales Service Only best is good enough Luxury, comfort, performance By hand, customized, “perfect” Prestige, snob-appeal, high price State of the art materials and components Total adequacy to image Short-series superb finish Comfort, safety, performance, style % robots or low labour cost countries, huge quantities “Lowest price tag in town”, high mileage, low upkeep Everywhere and cheap, “popular” or anti-snob snobbism Minimal maintenance Profits only through volume Red carpet, exclusive, downtown Discreet, excellent, not cheap... Performance, image, in special media Selective, fan clubs, rallies etc... Qualified, efficient, not cheap... Coverage, middle-class, efficient, easy credit Regular, 10,000 km, warranties, no surprises Value Middle of the road Out- performer Niche Last drop of subcontr’s blood squeeze again, then shift... Lowest cost no frills, few options, economy Just-in-time, partnerships, suppliers’ dependency Reliability, flexibility, tight costing, for robots Robotics 1000/day +, multiple equip- ment options... Each Chosen Strategy Requires Different Emphasis And “KSFs” In The Business Process

46 Single brand high Do nothing ! (Costs of change probably exceed benefits) low Umbrella brand with sub-brands Multiple independent brands most attractivemay be attractive low high Cost of maintaining brands ** Potential for generating value through segmentation * *Discrete customer segments, multiple channels, clearly differentiated value proposition, low break-even volumes **Minimum level of marketing spending, channel costs, product supply costs (including R&D) Guide When Do Multiple Brands Make Sense?

47 Guide At The Same Time, Multiple Brands Add To Management Complexity

48 Low delivered costs High perceived value Some Best Practices in Global Brand Portfolio Management: Guide

49 The Swatch Group Manages The Business System for Consistency DesignPartsAssemblyMarketing DistributionMarketingAssemblyPartsDesign Customer Target FewTailoredBy hand "MadeVery“The Elite" in Geneva"Selective Blancpain Swatch Omega ManyFew,Automated "Made inIntensive"Young Standardized Switzerlandat Heart" LimitedMany,Outsourced “Made forSelective"ABC" Standardizedfor economies the Stars” of scale The Business System in the Watch Industry Guide

50 Three Key Learning Points From Swatch (and others): 1. Think customer segments 2. Clearly differentiate brands with distinctive value propositions 3. Manage the business system consistently Guide

51 Global Brands: Your Ultimate Differentation Tool! Guide Managing a (Global) Brand Portfolio Implies Tough Choices And Discipline in Execution! KSFs of a Successful Global Brand Strategy: Meaningful, Distinctive, Simple, Credible & Consistent!


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