Keys to Successful Branding Prof. David Dunne, Rotman School of Management, University of Toronto, October 2009

Oct 091 Questions/Agenda What is a brand? Why would people buy brands in a poor country? Why would a business invest in building a brand? What should you do to make a brand successful in Nepal?

Oct 092 Starbucks

Oct E S P xperience ervice roduct The Rock and the Pond

Oct 094 Third place Lighting Seating Music Aroma Atmosphere Training Autonomy Profit share Recruitment Buying Roasting/ blending New products Culture

Oct 095 The 360 o brand Company/ brand Image Company/ brand Image Social Conduct Social Conduct Business Conduct Business Conduct Sales Force Sales Force Communications Product Employees Conduct Employees Conduct Contributions Conduct Contributions Conduct Distribution Channels Distribution Channels Service Support Price

Oct 096 As you prepare for the FY 08 strategic planning process, I want to share some of my thoughts with you. Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand. Howard Schulz February 2007 …

Oct 097 The romance is fading in the Starbucks customer relationship. First-quarter numbers told a dire tale: a 1-per-cent decline in U.S. comparable store sales and a 3-per-cent decrease in U.S. transactions, causing the dreaded words "negative traffic" to fall from the lips of research analysts. There is the increasing noise in what Mr. Schultz calls the "coffee space," including the announcement from McDonald's that it is entering the barista business with coffee bars. And there is the relentless layering of grim economic news south of the border, causing, simply, the U.S. consumer to spend less. … and February 2008

Oct 098 Marketing Myopia September 20098

Oct 099 No Customer, No Business Making Selling Buying (Counting, employing, planning...) COMPANY CUSTOMER

Oct 0910 FactoryQuality Cost Mass production Mass selling Profits through Sales volume Production Concept Starting Point Focus MeansEnds Target market Customer needs Integrated marketing Profits through customer satisfaction Marketing Concept Lab Cures for major illnesses Profits through scientific reputation Science Concept Develop first, then sell Some Business Concepts

Oct 0911 Customer Value and Company Value 11 Competitors Customer segments Needs Value Zone Goals Resources Tribes Buying behaviour Usage Relationships Competences People Assets Networks Leadership Performance Measures Positioning Value

Oct 0912 Questions/Agenda What is a brand? Why would people buy brands in a poor country? Why would you invest in building a brand? What should you do to make a brand successful in Nepal?

What is a brand?

Oct 0914 Official definitions … A brand is a name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition (Keller). Brand equity is a set of assets such as name awareness, loyal customers, perceived quality, and associations (e.g. being pure and it floats that are linked to the brand (its name and symbol) and add (or subtract) value to the product or service being offered (Aaker, Managing Brand Equity).

Oct 0915 Unofficially (and more powerfully) … A brand is the promise you make to consumers Brand equity is your reputation for delivering on that promise

Oct 0916 A brand is the relationship between a product and the consumer Every point of contact builds and modifies the impression the brand creates … the 360- degree brand Consumers build brands (!) like birds build nests, from scraps and straws they chance upon O&Ms Perspective on Branding

Why would people buy brands in a poor country? Why would you invest in building a brand?

Oct 0918 Brand Equity: Name, Symbol Enhances: Interpretation/processing of information Confidence in the purchase decision Use satisfaction Customer Value Company Value Brand Loyalty Name Awareness Perceived Quality Brand Associations Other Proprietary Brand Assets Aaker, Building Strong Brands The Value of Brands Enhances: Efficiency/effectiveness of Marketing programs Brand loyalty Prices/margins Brand extensions Trade leverage Competitive advantage

Oct 0919 What does it take to make a brand successful?

Oct 0920 Ten Dos of Branding 1.Understand your customers needs, wants, desires and values 2.Deliver what they really want 3.Develop an emotional connection with them 4.Provide adequate support 5.Price appropriately 6.Be consistent 7.Integrate marketing communications 8.Integrate the companys efforts behind the brand 9.Plan for and manage crises effectively 10.Monitor and protect brand equity

Oct 0921 Four Donts 1.Overextend 2.Confuse consumers 3.Devalue your brand 4.Offend, frighten or insult consumers

Oct 0922 A Model of Marketing September DesirabilityViability Feasibility Value Creation Integrated Value Delivery Contextualization & Communication Pricing Performance Measurement Understand Create Deliver Capture

Oct 0923September Desirability Understanding Customers Market Segmentation Buyer Behaviour

Oct 0924

Oct 0925 How Coke Forgot Itself

Oct 0926September Viability Understanding Markets Markets Competition

Oct 0927 Market Environment 27 P E S T S Political and regulatory Economic Social and demographic Technological Societal (sustainability)

Oct 0928September Turbulence… Political/regulatory Economic Social/Demographic Technological Societal/Sustainability

Oct 0929September Feasibility Understanding Resources & Fit People Relationships Assets & liabilities Core competencies

Oct 0930September Value Creation Matching Offering to Needs Competitors Customer segments Needs Value Zone Goals Resources Tribes Buying behaviour Usage Relationships Competences People Assets Networks Leadership Performance Measures

Oct 0931September Providing Value Integrated Value Delivery What you deliver How you get it to customers What you charge for it

Oct 0932 E S P xperience ervice roduct The Rock and the Pond

Oct 0933 Managing the Experience 33

Oct 0934September How Delivers

Oct 0935 Marlboro Friday: April 2, 1993 Collapse in share prices of all major branded manufacturers: observers questioned the future of brands The real lesson: value is relative The Day the Marlboro Man Fell Off His Horse

Oct 0936September Contextualization & Communication Demonstrating Relevance Integrated Marketing Communications What You Say How You Say It Where You Say It How You Build a Relationship

Oct 0937 Doing a Lot With Very Little

Oct 0938September Pricing Performance Measurement Reaping Rewards How You Make Money How You Know How Youre Doing

Oct 0939 Making Money 39 AttitudesBehaviourRelationships Brand equity ROI Short term accounting Long term accounting Net Income Margin Volume Total Market Size Market Share Price Cost X X -

Oct 0940 In the late 1980s, Disney conducted a brand audit and tracking study Found : –Widespread endorsements with little logic –Characters were seen as overused –Annoyed that children were involved in purchase decisions –All product endorsements had an effect on Disneys brand equity As a result, Disney established a brand equity team to ensure a consistent image for Disney across all product endorsements Monitors Its Brand

Oct 0941 Integration and the 360 o brand Company/ brand Image Company/ brand Image Social Conduct Social Conduct Business Conduct Business Conduct Sales Force Sales Force Communications Product Employees Conduct Employees Conduct Contributions Conduct Contributions Conduct Distribution Channels Distribution Channels Service Support Price

Oct How Apple Changed and Stayed the Same

Oct 0943 The 360 o brand Company/ brand Image Company/ brand Image Social Conduct Social Conduct Business Conduct Business Conduct Sales Force Sales Force Communications Product Employees Conduct Employees Conduct Contributions Conduct Contributions Conduct Distribution Channels Distribution Channels Service Support Price

Oct 0944 Summary: Can You Answer the Following? Why do people buy brands? How do brands create value for producers and consumers? What is customer value? How do successful brand marketers deliver it? Can you build a brand without investing huge amounts of money? How do marketers measure success? September

What should you do to make a brand successful in Nepal?