click here to add master your title - Amazon Simple Storage ...
4/13/2016
BRAND MANAGEMENT Session 1 & 2 Marketing Revisited. Brand Management and Brand Equity Don O’Sullivan [email protected]
1
4/13/2016
Market Orientation Focus on a competency to serve a customer and outperform a competitor
Company
Competitor
Inter-functional coordination:
Competitor Orientation: Detailed understanding of the strengths, weaknesses, capabilities and strategies of competitors
Processes and routines to recognise and respond to changes in the market
Customer Customer Orientation: Understanding target customers’ needs and creating superior value for them
7
2
4/13/2016
Choices…..
Most leaders do not like to make choices. They’d rather keep their options open. Choices force their hands, pin them down, and generate an uncomfortable degree of personal risk
A.G. Lafley
Making Choices: P&G divest, discontinue or consolidate 100 brands
3
4/13/2016
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our
strategy? 5. How will we execute?
Revenue
Valuable
Retention/ Referral
Brand Promise
Profit
Rare
Market Share/ Customer Share
Visibility
Capital Efficiency
Difficult to Imitate
Price Premium
Promise Delivery
Market Leadership
Organized to Capture Value
Addressable Market
Leverage 10
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our strategy? 5. How will we execute?
Revenue Valuable
Retention/ Referral
Brand Promise
Rare
Market Share/ Customer Share
Visibility
Difficult to Imitate
Price Premium
Promise Delivery
Organized to capture value
Addressable Market
Leverage
Profit
Capital Efficiency
Market Leadership
4
4/13/2016
5
4/13/2016
6
4/13/2016
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our strategy? 5. How will we execute?
Valuable Revenue
Rare Profit
Capital Efficiency
Market Leadership
Difficult to Imitate
Organized to capture value
Retention/ Referral
Brand Promise
Market Share/ Customer Share
Visibility
Price Premium
Promise Delivery
Addressable Market
Leverage
7
4/13/2016
Assets and Competitive Advantage Valuable, Rare, costly to Inimitable, Organized (VRIO)
The assets are….. Valuable?
No
Competitive disadvantage
Yes
and is the firm…. Rare? Yes
Yes
Costly to imitate?
No
Yes
No
Yes
Sustainable growth model
No Unused competitive advantage
Temporary competitive advantage
Competitive parity
Organized to capture value?
18
180o shift in firm value over 30 years Market to Book Value S&P 500 – 1980-2010 100% 90%
20% 20%
80%
45% 45%
70% 60%
85% 85%
50% 40%
75% 75%
80% 80%
95% 100%
80% 80%
30%
55% 55%
20% 10%
15% 15%
0% 1980
1990
2000
Tangible Book Value
25% 25%
20% 20%
2002
2010
5% Facebook
Remaining Market Value
8
4/13/2016
21
Most Valuable Brands
9
4/13/2016
Brand Finance Methodology
*
23
10
4/13/2016
Target’s ‘mind blowingly stupid’ rebates
“What is so disappointing about this is that people have made the decision, probably through an implied pressure, to do something that was mind-blowingly stupid,” “If we reported Target’s performance as $53 million rather than $74 million, we would have said `this is a disappointing financial outcome ... but we still think there has been progress in terms of the quality of the business’.” Westfarmers MD Richard Goyer April 2016 28
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
Revenue
Valuable
Profit
Rare
Capital Efficiency
Difficult to Imitate
Market Leadership
Organized to capture value
2. Where can we grow? 3. Where should we grow?
Retention/ Referral
Market Share/ Customer Share
Price Premium
Addressable Market
4. What is our strategy? 5. How will we execute?
Brand Promise
Visibility
Promise Delivery
Leverage
11
4/13/2016
Leveraging Brand Assets: Key Indicators
1. 2. 3. 4. 5. 6.
Retention – Our customers buying for longer Share of Customer – Our customers buying more from us Referral – Our customers advocating our product/ service Margin – Our customers paying a higher price Share of market / Organic Growth – Winning customers / business from competitors Addressable Market – Expanding the size of the potential market
33
Evaluate fit between current capabilities and future opportunities
36
12
4/13/2016
“The decline in coffee-drinking was due to the fact that most of the coffee people bought was stale and they weren't enjoying it. Once they tasted ours and experienced what we call "the third place".. a gathering place between home and work where they were treated with respect.. they found we were filling a need they didn't know they had.” Howard Schultz CEO Starbucks
13
4/13/2016
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our strategy? 5. How will we execute?
Revenue
Valuable
Retention/ Referral
Brand Promise
Profit
Rare
Market Share/ Customer Share
Visibility
Capital Efficiency
Difficult to Imitate
Price Premium
Market Leadership
Organized to capture value
Addressable Market
Promise Delivery
Leverage
Four elements of brand management Brand Promise
Visibility
Promise Delivery
Leverage
14
4/13/2016
Promise (positioning) Points of parity Brand Promise
Company
Competitor
Promise Delivery
Customer Points of differentiation
Visibility
Points of differentiation Leverage
Points of differentiation – potential advantages within the category
Points-of-difference Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand
Points-of-parity Associations that are not necessarily unique to the brand but may be shared with other brands. Associations that other brands develop as points of difference
Four elements of brand management Brand Promise
Visibility
Promise Delivery
Leverage
15
4/13/2016
Marketing Tasks Across the brand Pyramid Promise Delivery (post purchase)
Bonding
Points of difference and support What are the reasons to believe in the brand promise What are the Unique (functional, emotional, social) benefits offered?
Advantage
Frame of reference and points of parity What category does it compete in & what common benefits does it provide ? Target Who is the brand for? Visibility
Performance Relevance Awareness
55
Inflation in advertising as a % of sales Brand Promise
Visibility
Promise Delivery
Almost 50% increase in advertising / sales ratio Leverage
Global adspend 2015: = $540bn - Carat
58
16
4/13/2016
Four elements of brand management Brand Promise
Visibility
Promise Delivery
Leverage
Brand Promise
Visibility
The restaurant manager trumps the brand manager every time in terms of our ability to deliver the brand promise. Russ Klein, CMO Burger King
Promise Delivery
Leverage
17
4/13/2016
To what extent do you agree with the following statement (0= strongly disagree, 10 = strongly agree)
Brand Promise
Visibility
We have a customer oriented organizational culture
Promise Delivery
Leverage
Brand Promise
A company's culture and a company's brand are really just two sides of the same coin. The brand is just a lagging indicator of the culture.
Visibility
Promise Delivery
Your b Leverage
Tony Hsieh CEO Zappos
18
4/13/2016
Revenue Growth
67
Brand Promise
Visibility
Promise Delivery
Zappos 2015 rank Avg. base pay (for hourly employee) Avg. extra comp. (for hourly employee)
Mars 2015 Rank Avg. base pay (for hourly employee) Avg. extra comp. (for hourly employee)
86 $28076.00
Leverage
$4099.00
85 $38325.00 $7489.00
Over 30% difference in average pay 68
19
4/13/2016
Brand Promise
Visibility
The best customer service is if the customer doesn’t need to call you, doesn’t need to talk to.
Promise Delivery
Leverage
Jeff Bezos founder and CEO of Amazon
Four elements of brand management
Brand Promise
Visibility
Promise Delivery
Leverage
71
20
4/13/2016
Leveraging Brand Assets: Key Indicators Brand Promise
1. 2. 3. 4. 5. 6.
Retention – Our customers buying for longer Share of Customer – Our customers buying more from us Referral – Our customers advocating our product/ service Margin – Our customers paying a higher price Share of market / Organic Growth – Winning customers / business from competitors Addressable Market – Expanding the size of the potential market
Visibility
Promise Delivery
Leverage
72
#1 Retention Customer Effort Score Brand Promise
Visibility
Promise Delivery
Leverage
73
21
4/13/2016
# 2 Share of Customer Brand Promise
Visibility
Promise Delivery
Leverage
Source: CNBC 2012
# 3 Referral NPS
=
% Promoters (9 & 10) Detracto rs
Not Likely
0
1
2
3
4
% Detractors (0 to 6)
-
Passives
5
6
7
8
Promote rs
9
10
Brand Promise
Visibility
Extremely Likely
Promise Delivery
Leverage
22
4/13/2016
# 4 Margin Brand Promise
“The single most important decision in evaluating a business is pricing power…….
Visibility
If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.
Promise Delivery
Leverage
And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
# 4 Margin Mean Impact of Price Change on S&P 1500 Company (%)
Profit increase of 8%
Price increase of 1% 1
Brand Promise
13.5
101.0
12.5
1
Visibility
Promise Delivery
Leverage
68.3
100.0
19.2 Revenues
Fixed Costs
Variable Costs
Operating Profits
Source: Compustat; Mckinesy Analysis
23
4/13/2016
# 5 Market Share Brand Promise
Visibility
Promise Delivery
Leverage
80
# 6 Size of Addressable Market Brand Promise
Visibility
Promise Delivery
Leverage
Salesforce Analyst Day 2014
81
24
4/13/2016
From market to brand element to tactical activity Market Dynamics
Category Performance
Buying Behaviour
How many people
Value market size ( )
Volume share ( )
Value market size ( )
Value share ( )
Brand Promise
Visibility
How much they buy
Penetration
Brand Element
Brand Promise
Tactical Activity
•Innovate offer •Broaden offer (SOC / TAM) •Enhance proposition
Loyalty & Consumption
Promise Delivery
Promise Delivery
Visibility
Leverage
•Quality •Service /Culture •Support for brand promise
•Owned, earned & paid media •Mental & physical availability
82
Contextual attributes of the brand: heritage, values & mission Heritage
Values
Brand Promise
Values
Mission
Heritage
Values
Visibility
Values
Mission
Heritage
Values
Promise Delivery
Values
Mission
Heritage
Values
Leverage
Values
Mission 83
25
4/13/2016
Four elements of brand management – 8 questions Evaluate your brand on a scale of 1 to 10 (1 poor, 10 excellent) Brand Promise
Clear, compelling promise of unique value: Strong, positive brand associations:
High levels of awareness of promise in target market: Visibility Awareness achieved through paid, earned and owned media:
Promise Delivery
High awareness and alignment on promise internally: Strong promise delivery across all touch-points:
Leveraged to grow in customer retention/ share/ referral or margin Leverage
Leveraged to grow market share or addressable market:
Management of a Brand Portfolio Brand Promise
Visibility
Promise Delivery
Leverage
93
26
4/13/2016
Lifecycle assumptions and their implications
Sales Profit
Introduction / Growth
Maturity / Decline
Time
Lifecycle assumptions and brand management implications
DON’T ASK ME TO TAKE RISKS… …WHEN YOU ARE SQUEEZING ME FOR CASH TODAY
JUST BECAUSE I WANT CASH TODAY… …DON’T CALL ME RISK AVERSE
27
4/13/2016
BRAND MANAGEMENT Session 1 & 2 Marketing Revisited. Brand Management and Brand Equity Don O’Sullivan [email protected]
28
BRAND MANAGEMENT Session 1 & 2 Marketing Revisited. Brand Management and Brand Equity Don O’Sullivan [email protected]
1
4/13/2016
Market Orientation Focus on a competency to serve a customer and outperform a competitor
Company
Competitor
Inter-functional coordination:
Competitor Orientation: Detailed understanding of the strengths, weaknesses, capabilities and strategies of competitors
Processes and routines to recognise and respond to changes in the market
Customer Customer Orientation: Understanding target customers’ needs and creating superior value for them
7
2
4/13/2016
Choices…..
Most leaders do not like to make choices. They’d rather keep their options open. Choices force their hands, pin them down, and generate an uncomfortable degree of personal risk
A.G. Lafley
Making Choices: P&G divest, discontinue or consolidate 100 brands
3
4/13/2016
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our
strategy? 5. How will we execute?
Revenue
Valuable
Retention/ Referral
Brand Promise
Profit
Rare
Market Share/ Customer Share
Visibility
Capital Efficiency
Difficult to Imitate
Price Premium
Promise Delivery
Market Leadership
Organized to Capture Value
Addressable Market
Leverage 10
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our strategy? 5. How will we execute?
Revenue Valuable
Retention/ Referral
Brand Promise
Rare
Market Share/ Customer Share
Visibility
Difficult to Imitate
Price Premium
Promise Delivery
Organized to capture value
Addressable Market
Leverage
Profit
Capital Efficiency
Market Leadership
4
4/13/2016
5
4/13/2016
6
4/13/2016
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our strategy? 5. How will we execute?
Valuable Revenue
Rare Profit
Capital Efficiency
Market Leadership
Difficult to Imitate
Organized to capture value
Retention/ Referral
Brand Promise
Market Share/ Customer Share
Visibility
Price Premium
Promise Delivery
Addressable Market
Leverage
7
4/13/2016
Assets and Competitive Advantage Valuable, Rare, costly to Inimitable, Organized (VRIO)
The assets are….. Valuable?
No
Competitive disadvantage
Yes
and is the firm…. Rare? Yes
Yes
Costly to imitate?
No
Yes
No
Yes
Sustainable growth model
No Unused competitive advantage
Temporary competitive advantage
Competitive parity
Organized to capture value?
18
180o shift in firm value over 30 years Market to Book Value S&P 500 – 1980-2010 100% 90%
20% 20%
80%
45% 45%
70% 60%
85% 85%
50% 40%
75% 75%
80% 80%
95% 100%
80% 80%
30%
55% 55%
20% 10%
15% 15%
0% 1980
1990
2000
Tangible Book Value
25% 25%
20% 20%
2002
2010
5% Facebook
Remaining Market Value
8
4/13/2016
21
Most Valuable Brands
9
4/13/2016
Brand Finance Methodology
*
23
10
4/13/2016
Target’s ‘mind blowingly stupid’ rebates
“What is so disappointing about this is that people have made the decision, probably through an implied pressure, to do something that was mind-blowingly stupid,” “If we reported Target’s performance as $53 million rather than $74 million, we would have said `this is a disappointing financial outcome ... but we still think there has been progress in terms of the quality of the business’.” Westfarmers MD Richard Goyer April 2016 28
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
Revenue
Valuable
Profit
Rare
Capital Efficiency
Difficult to Imitate
Market Leadership
Organized to capture value
2. Where can we grow? 3. Where should we grow?
Retention/ Referral
Market Share/ Customer Share
Price Premium
Addressable Market
4. What is our strategy? 5. How will we execute?
Brand Promise
Visibility
Promise Delivery
Leverage
11
4/13/2016
Leveraging Brand Assets: Key Indicators
1. 2. 3. 4. 5. 6.
Retention – Our customers buying for longer Share of Customer – Our customers buying more from us Referral – Our customers advocating our product/ service Margin – Our customers paying a higher price Share of market / Organic Growth – Winning customers / business from competitors Addressable Market – Expanding the size of the potential market
33
Evaluate fit between current capabilities and future opportunities
36
12
4/13/2016
“The decline in coffee-drinking was due to the fact that most of the coffee people bought was stale and they weren't enjoying it. Once they tasted ours and experienced what we call "the third place".. a gathering place between home and work where they were treated with respect.. they found we were filling a need they didn't know they had.” Howard Schultz CEO Starbucks
13
4/13/2016
Growth decisions at the portfolio & brand level Goals & Expectations?
1. What is our competitive advantage?
2. Where can we grow? 3. Where should we grow?
4. What is our strategy? 5. How will we execute?
Revenue
Valuable
Retention/ Referral
Brand Promise
Profit
Rare
Market Share/ Customer Share
Visibility
Capital Efficiency
Difficult to Imitate
Price Premium
Market Leadership
Organized to capture value
Addressable Market
Promise Delivery
Leverage
Four elements of brand management Brand Promise
Visibility
Promise Delivery
Leverage
14
4/13/2016
Promise (positioning) Points of parity Brand Promise
Company
Competitor
Promise Delivery
Customer Points of differentiation
Visibility
Points of differentiation Leverage
Points of differentiation – potential advantages within the category
Points-of-difference Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand
Points-of-parity Associations that are not necessarily unique to the brand but may be shared with other brands. Associations that other brands develop as points of difference
Four elements of brand management Brand Promise
Visibility
Promise Delivery
Leverage
15
4/13/2016
Marketing Tasks Across the brand Pyramid Promise Delivery (post purchase)
Bonding
Points of difference and support What are the reasons to believe in the brand promise What are the Unique (functional, emotional, social) benefits offered?
Advantage
Frame of reference and points of parity What category does it compete in & what common benefits does it provide ? Target Who is the brand for? Visibility
Performance Relevance Awareness
55
Inflation in advertising as a % of sales Brand Promise
Visibility
Promise Delivery
Almost 50% increase in advertising / sales ratio Leverage
Global adspend 2015: = $540bn - Carat
58
16
4/13/2016
Four elements of brand management Brand Promise
Visibility
Promise Delivery
Leverage
Brand Promise
Visibility
The restaurant manager trumps the brand manager every time in terms of our ability to deliver the brand promise. Russ Klein, CMO Burger King
Promise Delivery
Leverage
17
4/13/2016
To what extent do you agree with the following statement (0= strongly disagree, 10 = strongly agree)
Brand Promise
Visibility
We have a customer oriented organizational culture
Promise Delivery
Leverage
Brand Promise
A company's culture and a company's brand are really just two sides of the same coin. The brand is just a lagging indicator of the culture.
Visibility
Promise Delivery
Your b Leverage
Tony Hsieh CEO Zappos
18
4/13/2016
Revenue Growth
67
Brand Promise
Visibility
Promise Delivery
Zappos 2015 rank Avg. base pay (for hourly employee) Avg. extra comp. (for hourly employee)
Mars 2015 Rank Avg. base pay (for hourly employee) Avg. extra comp. (for hourly employee)
86 $28076.00
Leverage
$4099.00
85 $38325.00 $7489.00
Over 30% difference in average pay 68
19
4/13/2016
Brand Promise
Visibility
The best customer service is if the customer doesn’t need to call you, doesn’t need to talk to.
Promise Delivery
Leverage
Jeff Bezos founder and CEO of Amazon
Four elements of brand management
Brand Promise
Visibility
Promise Delivery
Leverage
71
20
4/13/2016
Leveraging Brand Assets: Key Indicators Brand Promise
1. 2. 3. 4. 5. 6.
Retention – Our customers buying for longer Share of Customer – Our customers buying more from us Referral – Our customers advocating our product/ service Margin – Our customers paying a higher price Share of market / Organic Growth – Winning customers / business from competitors Addressable Market – Expanding the size of the potential market
Visibility
Promise Delivery
Leverage
72
#1 Retention Customer Effort Score Brand Promise
Visibility
Promise Delivery
Leverage
73
21
4/13/2016
# 2 Share of Customer Brand Promise
Visibility
Promise Delivery
Leverage
Source: CNBC 2012
# 3 Referral NPS
=
% Promoters (9 & 10) Detracto rs
Not Likely
0
1
2
3
4
% Detractors (0 to 6)
-
Passives
5
6
7
8
Promote rs
9
10
Brand Promise
Visibility
Extremely Likely
Promise Delivery
Leverage
22
4/13/2016
# 4 Margin Brand Promise
“The single most important decision in evaluating a business is pricing power…….
Visibility
If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.
Promise Delivery
Leverage
And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
# 4 Margin Mean Impact of Price Change on S&P 1500 Company (%)
Profit increase of 8%
Price increase of 1% 1
Brand Promise
13.5
101.0
12.5
1
Visibility
Promise Delivery
Leverage
68.3
100.0
19.2 Revenues
Fixed Costs
Variable Costs
Operating Profits
Source: Compustat; Mckinesy Analysis
23
4/13/2016
# 5 Market Share Brand Promise
Visibility
Promise Delivery
Leverage
80
# 6 Size of Addressable Market Brand Promise
Visibility
Promise Delivery
Leverage
Salesforce Analyst Day 2014
81
24
4/13/2016
From market to brand element to tactical activity Market Dynamics
Category Performance
Buying Behaviour
How many people
Value market size ( )
Volume share ( )
Value market size ( )
Value share ( )
Brand Promise
Visibility
How much they buy
Penetration
Brand Element
Brand Promise
Tactical Activity
•Innovate offer •Broaden offer (SOC / TAM) •Enhance proposition
Loyalty & Consumption
Promise Delivery
Promise Delivery
Visibility
Leverage
•Quality •Service /Culture •Support for brand promise
•Owned, earned & paid media •Mental & physical availability
82
Contextual attributes of the brand: heritage, values & mission Heritage
Values
Brand Promise
Values
Mission
Heritage
Values
Visibility
Values
Mission
Heritage
Values
Promise Delivery
Values
Mission
Heritage
Values
Leverage
Values
Mission 83
25
4/13/2016
Four elements of brand management – 8 questions Evaluate your brand on a scale of 1 to 10 (1 poor, 10 excellent) Brand Promise
Clear, compelling promise of unique value: Strong, positive brand associations:
High levels of awareness of promise in target market: Visibility Awareness achieved through paid, earned and owned media:
Promise Delivery
High awareness and alignment on promise internally: Strong promise delivery across all touch-points:
Leveraged to grow in customer retention/ share/ referral or margin Leverage
Leveraged to grow market share or addressable market:
Management of a Brand Portfolio Brand Promise
Visibility
Promise Delivery
Leverage
93
26
4/13/2016
Lifecycle assumptions and their implications
Sales Profit
Introduction / Growth
Maturity / Decline
Time
Lifecycle assumptions and brand management implications
DON’T ASK ME TO TAKE RISKS… …WHEN YOU ARE SQUEEZING ME FOR CASH TODAY
JUST BECAUSE I WANT CASH TODAY… …DON’T CALL ME RISK AVERSE
27
4/13/2016
BRAND MANAGEMENT Session 1 & 2 Marketing Revisited. Brand Management and Brand Equity Don O’Sullivan [email protected]
28
