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Building Strong Brands HawkPartners Approach to Developing and Maintaining a Strong Brand April, 2005 For further information contact: Scott Wilkerson Partner (301) 941-1824 [email protected] A strong brand can offer competitive advantage – driving significant equity A strong brand provides…. Example Estimated Brand Equity* A signal of quality $44B Increased leverage with channel partners $18B A pricing premium over competitors $21B “Defense” against competitive tactics $61B Improved customer loyalty and retention $67B Increased shareholder value $5B A platform for new market entry $25B *Source: Business Week, The 100 Top Global Brands, August 2004 However, building a brand is complex – often involving multiple tactics and diverse stakeholders Managing a brand often requires a broad array marketing tactics… “Traditional” marketing tactics • Mass media (TV, print, radio, etc.) • Direct mail/e-mail • Internet • Public relations • Event sponsorship Non-Traditional tactics • Product placement • Viral marketing/word-of-mouth • Web logs • Podcasting …Intended to reach a diverse group of potential stakeholders • Customers (current, lapsed, and past) • Employees • Business partners (distributors, suppliers, etc.) • Investors • Media Building and maintaining a strong brand is an iterative, multi-stage process HawkPartners Approach to Brand Management n Develop/ Refine Brand Strategy • Align on brand identity & desired positioning • Assess current brand image • Evaluate brand assets and liabilities o Develop & Test Value Proposition • Develop multiple concepts to communicate value proposition • Test creative concepts with target customers • Prioritize and refine messages based on customer feedback p Execute Campaigns q Measure & Track Impact • Develop communication/ marketing plan • Define performance metrics • Buy/place media • Execute tracking study to measure performance • Execute multichannel campaigns • Assess return-oninvestment • Link performance to management systems The first step in strategy development is to establish the brand vision Develop/Refine Brand Strategy A brand identity framework should be developed in order to guide future brand planning, creative development, and execution. HawkPartners can facilitate brand planning workshops among firm leadership and other key stakeholders to help establish this brand vision Illustrative Brand Identity Framework* Brand Identity: How strategists want the brand to be perceived Brand as Product: • Product scope • Product attributes • Quality/value associations • Uses • Users Brand as Organization: • Organizational attributes, i.e. • Innovation • Process • Performance Brand as Person: Brand as Symbol: • Personality/firm culture • Visual imagery and icons • Customer relationships (i.e. trusted advisor) • Brand heritage, and other associations Value Proposition: • Functional benefits • Emotional benefits • Self expressive benefits *Adapted from David A. Aaker, Building Strong Brands Market research can then be used to assess your current brand image Develop/Refine Brand Strategy HawkPartners can gather insights using a variety of quantitative and qualitative techniques, including in-depth interviews, focus groups, online, in-person or phone surveys, and analysis of news media. Analysis can be conducted among one or more stakeholder groups – including customers, employees, and business partners Key Questions To Be Answered By Research • How is your brand currently perceived? • How do perceptions differ by stakeholder group and by customer segments? • How do these perceptions differ from your desired brand identity? • Which attributes are associated with your brand? • What levels of awareness and consideration does your brand have? • What are your brand’s competitive assets & liabilities? • How are your competitors positioned? Where is the “white space”? A brand image assessment can identify brand assets and liabilities… Financial Services Brand A vs. Competitor Higher Relative Parity Advantage Liabilities Cost of Entry Assets Provides good value Potential Liabilities Innovative For someone like me Is a respected leader Cares about me Non-Differentiators Has a strong heritage Is a global firm Lower Illustrative Disadvantage Has low fees Relative Importance (Top 2 Box Ratings) Develop/Refine Brand Strategy Is in my neighborhood Makes me feel in control Makes managing money easy Secondary Assets Trustworthy …And identify gaps between desired brand identity and actual brand image Develop/Refine Brand Strategy Pharmaceutical Brand Image Ratings on Key Attributes Illustrative The most effective brand 100 Is right for me 80 Few Side Effects 60 40 Treats Underlying Causes 20 Brand I Can Trust 0 #1 Doctor Recommended Can Take Every Day Promotes a Longer, Healthie Life Recommend to a Loved One The value proposition is a key output of the brand strategy Develop & Test Value Proposition A compelling value proposition must be developed to promote the core message The value proposition must communicate your brand positioning, associated benefits, and “reasons to believe” to your target audience Sample Value Proposition: Professional Service Firm To: • Mid-sized business with difficulty hiring and retaining talent Professional Services Brand Target audience Brand logo & positioning Is The: • Consulting firm with a human capital expertise That: • Offers the most personalized service and customized solutions Benefit statement Because: • They take pains to understand my business, spending time with me and offering advice even when there is not an immediate opportunity for them. So That: • When I have a problem, they can mobilize quickly and climb the learning curve quickly Reasons to believe Multiple ways to articulate the desired value proposition should be explored Develop & Test Value Proposition • Multiple creative concepts – each with a unique way of expressing the value proposition – can be tested and refined based on customer feedback Multiple Concept Statements Objectives of Customer Research • Prioritize/select the most impactful communication(s) Concept A • Ensure that concepts are clear to customers and use appropriate language • Test imagery for use in branded communications • Test appropriate names and claims for product or service A communications plan provides the blueprint for campaign execution Execute Campaigns • An integrated, multi-channel campaign is likely to most effectively promote key brand messages. • The communications plan will outline the most effective tactics that will align with the media and channel preferences of the target audience Marketing Strategy Development Identify Identify Target Target Customer Customer • Demo & PsychoGraphics • Channel Usage & Media Consumption • Lifetime Value Develop Develop Budget Budget Marketing Marketing Mix Mix •• Determine Determine pricing pricing •• Promotional Promotional channels channels •• Distribution Distribution && fulfillment fulfillment strategy strategy •• Refine Refine Messages, Messages, Value Value Props Props&& Offers Offers • Identify partners • Internal organization Campaign & Content Development Execution & Rollout Measurement & Controlling Develop Develop Iconography Iconography &&standards standards Execute Execute Campaigns Campaigns Measure Measure &&Monitor Monitor Results Results Create Create Mktg Mktg Collateral Collateral Create Create Sales Sales Tools Tools&& Manuals Manuals Develop Develop Media MediaPlan Plan Develop Develop Public PublicRelations Relations &&Internal Internal Comm’tions Comm’tions Plan Plan Modify Modify As-Needed As-Needed Develop Develop Measurement Measurement System System Periodic Periodic Briefings Briefings Knowledge Knowledge Sharing Sharing Workshops Workshops Revision Revision Of Of Plan Plan &&Budget Budget Illustrative We then define a set of metrics to measure brand performance Measure & Track Results • HawkPartners works with clients to identify a set of metrics to measure brand performance and track how well the brand is “on strategy”. • These measures should align with, and be linked to, key business objectives. – We often combine in-market and survey data – We measure performance among key stakeholders, including brand users, non-users, and employees -- and vs. competitors over time Sample Brand Metrics – Financial Services Client Brand Performance Metrics Business Objectives: • Double brand awareness in three years • Convert awareness into higher consideration and usage levels • Build equity in key image attribute areas • Increase market share by 10% in three years • • • • Brand Performance Overall brand image Brand awareness Consideration Usage Brand Equity* Relevance Differentiation Esteem Knowledge • • • • • • • • • Brand Associations Provides good value Makes me in control Is in my neighborhood Innovative Cares about me In-Market Performance • Sales/revenues • Sales/revenue growth • Market share • Profitability *Based upon Young & Rubicam’s “Brand Asset Valuator” Measure & Track Results Performance on these metrics should be tracked over time • Through periodic or continuous tracking, we can monitor brand performance vs. key competitors over time • Tracking can also be used to assess the impact of brand building/marketing campaigns Illustrative Brand Tracking Results - Professional Services % of customers 100% 80% Awareness 60% Print-only campaign pilot launched in 2 markets Integrated print, web campaign in 3 markets Campaign expansion into 6 markets Marketing spend (000s) $2500 $2000 $1500 Consideration 40% $1000 20% $500 $0 0% 1H00 2H00 1H01 2H01 1H02 2H02 1H03 2H03 1H04 2H04 Driver models can assess the impact of the brand on financial performance Measure & Track Results • HawkPartners can utilize advanced analytic techniques such as structural equation modeling to identify the drivers of brand strength and estimate their impact on key financial metrics. Illustrative Brand Driver Model – Financial Services Brand Strength Drivers Brand Performance Metrics Financial Metrics Provides good value Makes me in control Sales/revenue Trustworthy Overall Brand Image Is a global firm Consideration Is in my neighborhood Innovative Cares about me Market share A brand scorecard can provide a valuable briefing tool for senior management Measure & Track Results • Scorecards are an important part of any brand management system designed to anticipate and react to emerging threats and opportunities. Sample Brand Scorecard – IT Client Industry Segment All Aerospace Marine Automotive Electronics All Country Americas Timeframe Number of Target Customers 200 +2 500M +5M Average Revenue Growth (%) 10 0 Average Product Spend ($) 25M -3M Satisfaction and Loyalty Thru June 31 03 Company Size Med – 500 - 1,000 Employees Product Line Focus Servers April 2002 Trend (’02-’03) Average Total Revenue ($) Geography Jan 01 02 Market Performance Metrics April 2002 Trend (’02-’03) Segment Composition/ Firmographics Filters 65 0 Overall Consideration (%) Overall Satisfaction: (Index 1-100) 35 0 75 -8 Overall Loyalty (Index 1-100) 70 +10 Above Historical Levels Upwards 4B 0 Market Share (% of total Spend) 35 0 45 -3 10M +1 Market Penetration (% customers/total companies Average Transaction Size ($) Key Loyalty Drivers (Index 1-100) April 2002 Trend (’02-’03) Overall Awareness (%) Total Revenue ($) April 2002 Trend (’02-’03) Account Coverage 65 0 Order Fulfillment 90 10 Product Line 85 Customer Service/support 70 In-Line with Historical Levels Unchanged -7 -5 Below Historical Levels Downwards Marketers must address key questions in order to successfully strengthen their brand Key Questions For Brand Managers to Consider • Has senior management aligned on a consistent brand strategy? • Have we established performance objectives for our brand? • Are we able to assess our current brand image among key stakeholders? • Do we fully understand how our brand is different from competitors? • Is our brand communicated through a unique and compelling value proposition? • Do all of our internal and external communications effectively communicate this value proposition? • Are we able to measure and track the performance of our brand over time? • Can we accurately assess the impact of our marketing efforts on financial performance?
