How to build a world class brand

Cambridge Annual Marketing Lecture ALUMNI BRIEFING PAPER 2010 How to build a world class brand Prepared by Rita Clifton Cambridge Marketing Coll...
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Cambridge Annual Marketing Lecture

ALUMNI BRIEFING PAPER

2010

How to build a world class brand

Prepared by

Rita Clifton

Cambridge Marketing Colleges

Dec 2010

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Cambridge Annual Marketing Lecture

15th July 2010

CONTENTS

page

CAMBRIDGE ANNUAL MARKETING LECTURE How to build a world class brand RITA Clifton

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When all else fails, let’s think up a new name

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Brand it like Beckham

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No Logo vs. Pro Logo

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Research by Interbrand

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The tip of the iceberg

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The world’s top ten brands

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McDonald’s: I’m Lovin’ It

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Google

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Amazon.com

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Apple

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To Conclude

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MONOGRAPH THE BRANDING ICEBERG © Hugh Davidson

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Cambridge Annual Marketing Lecture

15th July 2010

How to build a world class brand Rita Clifton Thursday 15th July saw the Cambridge Marketing College Annual Dinner at St Johns College, Cambridge. The Lecture was provided by Rita Clifton, Chairman of Interbrand, the world’s largest branding consultancy. As former vice chairman and executive planning director of Saatchi & Saatchi she was well qualified to speak about branding in today’s market place. What follows is a summary of what she had to say.

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Cambridge Annual Marketing Lecture

15th July 2010

When all else fails, let’s think up a new name  Far too many companies see a brand simply as the face of the company, the external facade that stakeholders buy into - or not as the case may be. This attitude makes it all too easy to simply try to ‘re-badge’’ a company with a shiny new name and logo when actually what needs doing is a more fundamental rebranding exercise across the business, inside and out. Of course there are valid reasons behind rebranding; some companies will have been forced to create a new identity following deregulation or privatisation or they may be searching for an improved image in a business environment that has become very different from the one they entered. However, when PricewaterhouseCoopers (PwC) set out to rebrand its consulting arm, renaming it “Monday”, headlines suggested “PwC Rebranding is just as exciting as a Monday morning”. The new name had been intended to denote fresh thinking and new beginnings, rather than the unwelcome start of the working week after two days of freedom. ‘Rebranding’ in this case was perceived as a failure, although in fact it was never given time to prove long term effectiveness one way or another, as the division was acquired just six weeks later. The general point is that a new name is not going to make a bad or confused company any better; proper and relevant rebranding, which address all business operations, may well succeed. Brands are any company’s greatest assets, but this is a realisation that is coming much too slowly to many companies. “Our people are our most important asset” is a sentiment thrown around far too often; businesses need to realise that “...brands are the most important assets. People die, buildings fall down, but what lives on are the brands, in any category... Strong and sustainable brands are the only way to generate the kind of wealth we need to pay for civil society, and to build hospitals and schools, etc”.  One chief executive of a FTSE 100 corporation fell foul of underestimating the importance of his brand suggesting “...branding is not our main preoccupation...” on the receipt of a new book about branding. What he really meant was “we have a logo thank you” – the CEO in question lost his job within six months. 

Brand it like Beckham  Branding is not something that just applies to companies and products. In today’s competitive global market, nations are realizing that their reputation and the image of them that the rest of the world sees is vital to their growth and development. The brand image that the rest of the world puts on them can be either a valuable asset or

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Cambridge Annual Marketing Lecture

15th July 2010

“...to promote the development of China’s brand commodities so as to benefit the world’s people....development of brand commodities concerns China’s economic growth and social progress” Wu Bangguo, Chinese Vice Premier

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a harmful detriment to their economy, industry, and relations with other countries. It is therefore not surprising that the business of nation branding has become a popular marketing strategy among federal governments and national tourism sectors in recent years.  Interbrand recently worked with Estonia to promote its image in the international community. As a country formerly under Soviet occupation it lacked a firmly established national identity. Aiming to increase foreign investment and tourism a marketing campaign to brand Estonia was established. In this instance, the reality of Estonia was so much better than the perception, and so the role of marketing and a new brand identity was to promote the attractive reality. “Welcome to Estonia” was the phrase chosen for Estonia’s campaign logo. With a strategic design and typeface, this logo has become widespread throughout the country, supported by Estonia’s national airline, businesses, tourism industry, and shipping docks.   It’s not only countries which have realised how important branding is. Celebrities are increasingly wanting to turn themselves into brands, using their fame to succeed in business or attract lucrative advertising and sponsorship deals. The challenge for celebrities is to go from being just a short term marketing phenomenon to become a sustainable brand, able to generate long term sustainable business beyond the immediate reasons for celebrity.

Cambridge Annual Marketing Lecture

15th July 2010

No Logo vs. Pro Logo  The Naomi Klein book No Logo has become a cultural manifesto for the critics of unfettered capitalism worldwide. The book suggests we live in an era where image is nearly everything, where the proliferation of brand name culture has, to take one hyperbolic example, created “walking, talking, life-sized Tommy [Hilfiger] dolls, mummified in fully branded Tommy worlds”. The validity of Klein’s arguments are however, widely challenged, with The Economist running a leader article explaining why mainstream opinion should have a “Pro Logo” attitude; after all, brands with reputations to protect are likely to do the right thing. Developing countries want strongly branded businesses to invest in their countries and provide development and employment, knowing that these organisations will not want to damage their reputation. Further, a strong brand means a more loyal ‘customer’, more secure income and earnings for that organisation (including not for profit organisations) and more secure employment – an important social benefit in its own right.

Research by Interbrand Interbrand continuously researches into the value of brands and people’s attitude towards them. Evidence shows that the best global brands consistently outperform stock market indices. The fact that a brand is the most important and sustainable asset any organisation has should mean that it is used as a core driver to the operations of a business. However, when asked ‘does your brand influence all decisions made at your organisation?’, only 36 per cent of Chief Marketing Officers/Seniors marketers said yes. Two thirds of companies do not see their brand as a central organising principle, where brand is perhaps still following the old model of a concept limited to the marketing department, rather than a driver of behaviour and actions across the whole business to deliver a branded experience to their customer. A further question reveals the primary inhibiting factor to changing how a brand is delivered throughout the company is perceived to be the inability to prove the financial benefit of the brand. However, this is something that Interbrand pioneered in the 1908s, and is now accepted as best practice. If it was understood that metrics and appropriate incentives can be so easily created, CEOs and Chief Financial Officers may be more willing to accept brand value.

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Cambridge Annual Marketing Lecture

15th July 2010

The tip of the iceberg 

Visual identity 3D - environments

Names

Product ranges External communications Vision

Values

Business processes

Management controls

Training and recruitment Sense of purpose Shared sense of fate

Methods of rewards

Employee communication Beliefs and personality Clear brand strategy

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A brand’s visual identity, including the name, product range, marketing activity and logo, is the tip of the iceberg in terms of what a brand represents. Companies are often too concerned with only the top of the iceberg. The aspects of a brand which really define it are found deeper within the business; these include a brand’s vision, values, business processes, purpose, training and recruitment, brand strategy, management controls and beliefs.   There are hundreds of textbook definitions of branding but the one originally created by Interbrand was this “...a mixture of tangible and intangible attributes, symbolised in a trade mark which, if properly managed, creates influence and generates value”. But of course in practice it is a lot more than this, it is living business asset which over time becomes a key source of value and competitive advantage to the business. A brand should also represent a central organising principle.   To succeed in building a strong and reliable brand the entire organisation must deliver it; this requires rethinking the delivery of the business strategy. Brand strategy should no longer be seen as just the responsibility of the marketing department, it should be the alter ego of business strategy, integrated into every aspect in the business, with all segments of the business working with brand strategy at the core of their activities.  To deliver this successfully there are three key concepts: Clarity, Consistency and Leadership. 

Cambridge Annual Marketing Lecture

15th July 2010

BMW provides a good example of this. BMW has a clearly defined profile and value system. Its brand identity specifies characteristics and describes the way in which the brand aims to clearly differentiate itself from its competitors’ offer. Its brand identity acts as a guideline for its products and services, people and behaviours, environments and channels and communications. For example the BMW training facility, ‘Group Academy UK’ is a purpose-built training and development centre which reflects BMW values, with clean lines, organised rooms and an environment of discipline, order and inspiration. It is not a place where you would wish to turn up late or looking scruffy. This consistent training and development engages staff and partners in the BMW brand, as well as bringing the best practice and knowledge for the management to share.

The world’s top ten brands Each year Interbrand produces a list of “Best Global Brands” by calculating the value of the world’s biggest brands. The brand value given to each company is a financial representation of businesses’ earnings due to superior demand created for its products and services through the strength of its brand.

McDonald’s: I’m Lovin’ It At number six of the best global brands is McDonald’s, a brand recognised

Making the top ten in 2009 we re:

1. Coc a-Cola 2. IBM 3. Mic rosoft 4. GE 5. Nok ia 6. McD onald’s 7. Goo gle 8. Toy ota 9. Inte l 10. Disn ey

throughout the world. This global dominance has meant it has been in the critics’ firing line more often than most in the same industry. For example the film “Super Size Me” by Morgan Spurlock asked the intriguing: What would happen to a normal 33-year-old man in perfect health who stands six feet two and weighs 185 pounds if he ate nothing but McDonald’s fast food for thirty days? The results did not show McDonald’s in a positive light at that time. Despite being ranked number nine in 2006, McDonald’s set out to deliver a single motivating brand value proposition that would enhance the brand globally, without diminishing local relevance or sales. This value proposition focused on simple, easy enjoyment. As part of this new value proposition McDonald’s have made various menu innovations and improvements in the restaurant experience and environments. McDonald’s also recognised there was a large market for coffee which it had been

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Cambridge Annual Marketing Lecture

15th July 2010

missing out on, with companies like Starbucks cashing in. It was recognised that a coffee experience was more than just coffee. Being able to provide a quality coffee at the convenience and price of McDonald’s, and in an agreeable space is a competitive brand advantage.

Google Placed at number seven in 2009 Google is one of the list’s greatest risers, with a 25 per cent increase in its brand value. Since its establishment in September 1998 Google has revolutionised the internet and how people interact with it. Prior to Google search pages were crowded and messy. The clean, simple and easy to use interface provided by Google was a highly attractive proposition for millions of people, and reflected the clarity of its vision to organise the world’s information. Google has had a strong corporate philosophy which underpins its values and is translated to its brand. These core principles guide their actions:

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1.

Focus on the user and all else will follow

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It’s best to do one thing really, really well

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Fast is better than slow

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Democracy works on the web works

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You don’t need to be at your desk to need an answer

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You can make money without doing evil

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There’s always more information out there

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the need for information crosses all borders

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You can be serious without a suit

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Great just isn’t good enough

These principles are not just something written in a corporate manifesto and then forgotten. At Google they are brought to life everyday, whether it is through the health facilities provided for staff at the work place or lava lamps and scooters dotted around the office.

Amazon.com Almost everyone is familiar with the Amazon.com brand, and a large number of us will have had some form of interaction with the company. The internet giant’s brand proposition can be best summarized as convenient, low-priced, efficient, personalized, and customer-friendly service. These key qualities in an online retail brand go a long way to explain Amazon.com’s popularity.

Cambridge Annual Marketing Lecture

15th July 2010

The Chief Executive Officer of Amazon is very clear as to what his company’s primary value should be, his mission is “... to be the earth’s most customer -centric company...” and this is reflected throughout the value chain with a strong emphasis on customer relationship management. Consumer research confirms that Amazon. com is the top performing brand in the U.S. based on “trust” and “recommendation.” 

Apple Apple is an iconic brand with a base of core fans that are truly passionate about Apple and its products. Again, as with other top brands, Apple’s vision, mission and values are strongly evident in its people and behaviours, products and services, environments and communications. For example even its retail spaces truly reflect the brand’s values of being different and designed for humans, unlike so many other stores on the high street. The values and principles of the world’s top brands may sit in stark contrast to one another but what allows them all to succeed in their own unique way is consistency. Their brands are a true representation of the founding beliefs of the company and these are delivered and understood by every channel of the business. They also share the sense of restlessness and innovation that characterises true leader brands.

To Conclude Branding is not just about advertising and packaging — it’s about how you train and develop staff, develop distinctive products and services and maintain a consistent idea. A logo is the visual bit, but the substance is the most important thing. It’s what under the shiny logo that adds the truly sustainable value to businesses.    

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Cambridge Annual Marketing Lecture MONOGRAPH Rita referred in her speech to the Iceberg model. This is The Brand Iceberg created by Professor Hugh Davidson in his book ‘Even More Offensive Marketing’. It is a very useful construct for thinking about Brands and I have asked Hugh to produce the following Monograph on his famous model. Charles Nixon

THE BRANDING ICEBERG © Hugh Davidson The concept of ‘The Branding Iceberg’ originally appeared in Hugh Davidson’s keynote speech to the Marketing Society Annual Conference in 1989, and was later included in his book, “Even More Offensive Marketing”, Penguin 1997. This update on and expansion of ‘The Branding Iceberg’ was written at the request of Charles Nixon, CEO of Cambridge 10

Marketing College in October 2010. The Branding Iceberg© is a graphic way to demonstrate that most of the elements contributing to a brand’s reputation – things like superior innovation, highly motivated employees or excellent quality – are invisible to the customer, and outside the direct control of marketers. Using the iceberg analogy, they are below the waterline. Only one seventh of the typical iceberg is visible above the water. In the case of the Branding Iceberg, the elements most visible to customers include presentation, communication, names/symbols, price, and products/services. These are important, but they are dependent on the invisible skills and competencies below the waterline which power them. The invisible elements provide innovation, quality, value and operational efficiencies. Without this powerhouse below the waterline, the Iceberg would melt or break up, and the visible elements of the Branding Iceberg would then disappear. The Branding Iceberg demonstrates that the brand promise is delivered by the whole organisation, not just by the Brand Manager or the Marketing Department. The graphic of the Branding Iceberg illustrates that brands are business systems, not just names and advertising. Branding goes well beyond names and symbols. Strong branding is the result of successful business strategy. It is not a matter of

Cambridge Annual Marketing Lecture MONOGRAPH manipulating advertising, name and presentation. Is your brand just a name, or is it shorthand for a distinctive business proposition? Most so called brands are merely names masquerading as brands. To deserve the title ‘brand’ a product or service needs to be perceived by its customers as different, or better, or cheaper than its competitors, ideally all three. Unfortunately, most so called brands are undistinctive, pimply Me-Toos or Me-Threes, offering identical benefits to their competitors. Strong brands are distinctive, and deliver superior value for money. They achieve this mainly through continuous improvement, deeply held values and a superior business system, invisible to the customer, below the water line.

Figure 1 illustrates the Branding Iceberg for Fairy Liquid, which achieved brand leadership in the dishwashing market three months after launch in 1959, and has retained it ever since, for over 50 years. In constructing a Branding Iceberg, you should identify below the waterline elements which are different or superior. The exact elements of the Branding Iceberg will differ by market, although most of those in Figure 1 would be included. For instance, ‘Presentation’ would be packaging for consumer goods companies, store fascias and interiors for retailers, and branch offices, people and literature for mortgages. You will have noticed that elements below the waterline are company-related competencies or assets, while those above the waterline refer to a specific brand. This is because the business system driving most brands below the waterline is organisation wide and will often cover a number of brands. The elements below the water line contribute most to building and developing strong brands. Unfortunately many marketers do not fully appreciate this. They spend a disproportionate amount of their time on what you can see, especially sales promotion and advertising/communication. This is partly because many marketers find these

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Cambridge Annual Marketing Lecture MONOGRAPH ‘creative’ activities more interesting, partly because they have direct control over these areas, which are usually implemented by outside agencies under their direction. The most effective marketers are both left and right brained – creative yet strong with numbers and analysis. They are good at motivating colleagues in other departments, who do not directly report to them, such as Operations, Sales, Supply Chain and Finance. They recognise that the skills of these colleagues, below the waterline of the Branding Iceberg, are critical to brand success. They are complete Brand Managers. The Branding Iceberg is applicable to any type of brand – from products to services, from universities to charities. Figure 2 analyses Tesco, a leading service brand, which is one of the largest and best managed supermarket brands globally.

Figure 2 is a summary and could easily be expanded. For example, clear and consistent strategies, almost unchanged over 14 years, are a key asset for the Tesco brand below the waterline.

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The Branding Iceberg highlights that the strength of many brands derives more from powerful underlying business systems than from advertising or promotion. Another reason why the Iceberg analogy is apt for brands is that icebergs will melt unless they enjoy the right environment. The natural progression for brands is to melt, as they are attacked by new competitors or diffuse their customer franchise with too many line extensions. The melting tendency in the brand life cycle can only be countered by innovation and continuous improvement, largely below the water line. A final point on the Branding Iceberg. It demonstrates why Marketing is so misunderstood by both the general public, and non-marketers. They only see what is above the waterline, and therefore think that Marketing is only about advertising, ‘spin’ and sales promotion. Marketers need to emphasise at every opportunity, their key role in activating and managing the diverse elements below the waterline, in order to deliver better value for customers.

For further information: Tel: 01954 234940 Email: [email protected] Web: www.marketingcollege.com

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