4. brand strategy
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4. BRAND STRATEGYTRANSCRIPT
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Contents
Using this guide
Introduction
Checklist
Case studies
© The Chartered Institute of Marketing 2003
4. BRAND STRATEGY“A strong brand will look after itself.”
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Contents
> Using this guide
> Introduction
> What is strategy
> The difference between strategy andtactics
> Who should be responsible for brandstrategy
> Elements of brand strategy
> Considerations for brand strategy
> Importance of strategy for brands
> Checklist
> Case studies
Defining brands
Types of brands
How brands work
Brand strategy
Managing and revitalising brands
Brand portfolio andarchitecture
Measuring brands and their performance
eGUIDE 7
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Using this guide
Navigation
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Restating a goal is notstrategy, execution is
not strategy, and tacticsare not strategy.
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Introduction
“A strong brand will look afteritself.”Brand strategy is one of the most fraughtareas of marketing, though clearly also one ofthe most important. There are many problemswith definition. The key point is you can’t havea strategy without a clear objective. Restatinga goal is not strategy, execution is notstrategy, and tactics are not strategy. A brandcannot function without a strategy and thefunction of brand management is to implementbrand strategy.
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In markets clutteredwith messages, brand
owners have to findever new ways to foster
loyalty.
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What is strategy?
“The objective of strategy is a sustainablecompetitive advantage, which may come fromany part of the organisation’s operation. Themarket is the judge of this advantage. Brandstrategy is the process whereby the offer ispositioned in the consumer’s mind to producea perception of advantage.” [Arnold, 1992]
>Strategy is essentially a discipline ofplanning, of setting a course for the longterm or to achieve a specific goal.
>Its origins lie in game theory and themilitary. The dictionary definition is ‘thescience and art of conducting a militarycampaign in its large scale and long termaspects’. It is mainly used to refer tocorporate strategy and business strategy.
>It was made fashionable in the ’80s byMichael Porter in his classic text, CompetitiveStrategy (1980), in which business isacknowledged as a competitive battle inwhich strategy is essential to winning.Competitive advantage could either beachieved by low cost or differentiation. Sinceonly one brand can be the cheapest, andphysical product attributes are easily copied,
it follows that differentiation is the key tocompeting in today’s marketplace. Brandstrategy therefore is a course of action todifferentiate an organisation or a product instakeholders’ minds.
>A brand’s longevity and strength has to bebuilt less on price and more ondifferentiation. In markets cluttered withmessages, and where a certain level ofquality of product and/or service is expectedby customers, brand owners have to findever new ways to foster loyalty. Considerhow Richard Branson has managed tostretch the Virgin brand into areas farbeyond his original musical activities.
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The difference between strategyand tactics
eGuide 5: Managing brands
>To view branding as naming, design oradvertising is too myopic and will shortenthe brand’s life expectancy.... To take fulladvantage of brands as strategic devices, aconsiderable amount of marketing analysisand brand planning is required. But manycompanies are too embroiled in tacticalissues and so fail to gain the best possiblereturns for their brands. [de Chernatony, L.,McDonald, 1998]
However, all those tactical aspects have tobe carefully managed because if any elementbreaks down, the brand can be damagedand its strength come under attack.
>Branding goes well beyond names andsymbols. Strong branding is the result ofsuccessful business strategy. Davidson[1997] describes this as the ‘brandingiceberg’ (see Figure 4.1).
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Figure 4.1: The ‘branding iceberg’
Source: Davidson, H. (1997) Even More Offensive Marketing.
WHAT YOU CAN SEE
WHAT YOU CAN'T SEE
Key assetsandcompetencies
Symbol
Brand name
Presentation
AdvertisingPrice
High quality
Efficient production
Strong R&D
Low cost operation
High service levels
Effective sellingStrong supply chain
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Brand strategy [hasbecome] too
fundamental a part of acompany’s worth to beleft to a relatively self-
contained marketingdepartment.
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What you can see above the water line ofthe iceberg are price, advertising,presentation, brand name and symbol.What’s below are key assets andcompetencies such as high quality, efficientproduction, strong R&D, low cost operations,high service levels, string supply chain andeffective selling.
Who should be responsible forbrand strategy?
“Corporate conviction and commitment offerthe key to excellence in brand managementand these are things that can originate only atthe highest level within a business, otherwise,like a thinly-rooted plant, good practice will bewashed away by the first winter storm.”[Sir George Bull, Market Leader, Spring 1998]
>For several decades marketing wascharacterised by powerful brandmanagement systems that devolvedmarketing responsibility onto the shouldersof bright but young brand managers eagerto make their mark quickly. They hadsubstantial powers over the brand strategy,image and positioning.
>This is changing irrevocably as brandstrategy becomes too fundamental a part ofa company’s worth to be left to a relativelyself-contained marketing department.Marketing is now too complex a disciplineand one with too many cross-functionalimplications for companies to entrust itentirely to junior managers.
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Even though the CEO isthe guardian of brand
strategy, it is thecollective power of
individuals in anorganisation that
provides and sustainscompetitive advantage.
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>Brand responsibility is thus moving higher upthe line in many companies. In some casesthis means establishing a central strategic unitwhich oversees brand strategy globally whileleaving tactical activities to the local markets.
>Adding impetus to the tendancy to make thechief executive the top brand manager is therealisation of the growing importance ofdevising and implementing a coherentstrategy for the corporate brand.
>Even though the CEO is the guardian ofbrand strategy, ‘it is the collective power ofindividuals in an organisation that providesand sustains competitive advantage. Whenall employees – and not just seniormanagers – are engaged with theorganisation’s purpose, it enables theorganisation to adapt to changingcircumstances, develop plans that arefounded in organisational reality and deliverbottom line value.’ [Ind, 2001]
>Brand strategy development must involve alllevels of marketing management and standsa better chance of success when all otherrelevant internal departments and externalagencies are actively involved. [deChernatony, L., McDonald, 1998]
Elements of brand strategy
eGuide 3: How brands work: Brand positioning
eGuide 5: Managing and revitalising brands:Brand positioning
Targeting
In order to decide how best to choose targetcustomers for your brand, you need to answerquestions, such as:
>Which customers are important to themarket?
>Which are important to my brand?
>How can I get more customers or do morebusiness with each of them?
The current preoccupation, rightly, is analysingwhich customers deliver the most value andhence profit the company most. These maynot necessarily be the largest number of thebrand's customers – in fact it rarely is. In mostbrands, there is some variation of an 80/20rule, where the minority of most loyalcustomers deliver most value to the company.
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Positive customerexperiences are the
fulfilment of the brandpromises.
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CIM 10 minute guide to the 80/20 rule.
Advances in technology have made it easier tocollect, store and utilise more reliable data onwho your customers are, how much and howoften they buy from you, what else they buyetc.
The key strategic choice to make here iswhether you are targeting the most valuablecustomers to keep their custom, targetinginfrequent customers to make them morebrand loyal, or trying to gain new customers?
All those targeting objectives are important tobuilding a strong brand, but the emphasis mayvary depending on the lifecycle of the brand. Anew brand needs to establish itself in themarketplace, but over time customer loyaltywill grow and the brand should reward its mostvaluable customers. Recruiting new customers,however, is a never-ending task and one whichwill ensure the brand's longevity.
Values
>Consumers buy brands because their valuesalign with the brands’ values.
>To keep brands fresh, relevant and at theforefront of customers’ minds, it is vital to beable to have strong links between core brandvalues and positive customer experiences,which are brought to life in innovativeproducts using the best technologies. [BBG,2001]
Core brand values are what differentiate youfrom your competitors and can be expressedin a small number of words, although thewords have to be meaningful in terms of thecontext of the brand.
Positive customer experiences are thefulfilment of the brand promises. Tomaximise the impact you make oncustomers, it is important to explore the fullrichness of the context in which the productis being used, focusing particularly on thebenefits which customers experience.
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Proposition
A proposition is what you choose tocommunicate about your brand to themarket and various stakeholders in yourbrand (see Figure 4.3: Orange brandalignment).
This communication entails more than justthe physical product or advertising. All theintangible communications of the brand, itscustomer service, its availability, its pricingpolicy, have a bearing on how the overallbrand proposition is viewed by customers.
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Figure 4.2.a: Brand leadership – the evolving paradigm
continued/...
Classic brand management model Brand leadership model
PERSPECTIVE Strategic and visionary
From tactical to strategic management
Tactical and reactive
BRAND MANAGER STATUS Higher in the organisation, longer time horizon
Less experienced, shorter time horizon
CONCEPTUAL MODEL Brand equityBrand image
FOCUS Brand equity measuresShort-term financials
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Figure 4.2.b: Brand leadership – the evolving paradigm
continued/...
Classic brand management model Brand leadership model
PRODUCT-MARKET SCOPE Multiple products and markets
From limited to broad focus
Single products and markets
BRAND STRUCTURES Complex brand architecturesSimple
NUMBER OF BRANDS Category focus – multiple brandsFocus on single brands
COUNTRY SCOPE Global perspectiveSingle country
BRAND MANAGER’S COMMUNICATIONS ROLE
Team leader of multiple communication optionCoordinator of limited options
COMMUNICATION FOCUS Internal as well as externalExternal/customer
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Proposition, in other words, is the expressionof values of the brand through everythingthe brand says and does. And although itmay change throughout the lifetime of thebrand, the actual values should remainconstant.
Case study: Skoda
Considerations for brand strategy
Three basic truths have to be borne in mindwhen developing and implementing strategy:
Remember that markets are dynamic, not static>Setting a rigid course which allows no
organisational or operational flexibility isdisastrous in today’s fast moving world. If abrand maintains a very rigid course and isrun only in relation to its own history andstandards while other brands are changingaround it, then often that brand can finditself out of step with the market.
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Figure 4.2.c: Brand leadership – the evolving paradigm
Classic brand management model Brand leadership model
DRIVER OF STRATEGY
From sales to brand identity as driver of strategy
Sales and share Brand identity
Source: Aaker and Joachimsthaler (2000), sleeve notes
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>Remember that part of a successful brandstrategy is defining what is immutable andwhat is flexible. Execution may change whilethe brand strategy remains the same. Tacticsmay vary while the brand strategy remainsthe same.
Case study: Marmite
>There are many ways to respond to marketconditions or even lead them by usingrelevant execution and tactics which are stilltrue to the strategy of the brand.
Remember that in today’s world‘everything communicates’>Brand strategy must be implemented and
executed at every single point of interactiona stakeholder may have with the brand. It isnot something just carried by theadvertising.
>In the service sector this is a particularchallenge for brands as they seek to directthe behaviour of thousands of staff to delivera certain promise. It is now virtuallyimpossible to claim a service advantagewhere one cannot be absolutely consistentlydelivered.
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Figure 4.3: Orange brand alignment among different stakeholders
HONEST Keeps promises Open and fair Open and fair
Source: Davidson (2002)
STRAIGHT-FORWARD
Simple and clear Simple and clear Speed and results
FRIENDLYConfident andtrusted
Trusted partner Respect for people
DYNAMIC Innovative andenergetic
Innovative Innovative and exciting
REFRESHINGBright and customer focused
Delights customers
Delights customers
ORANGE BRAND VALUES SHAREHOLDERS CONSUMERS EMPLOYEES
TRANSLATION TO SHAREHOLDERS:
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Companies that put the emphasis on
customers, employeesand shareholders
significantlyoutperformed those
that focused on only oneor two of these
groups.
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>You have to win support for the brand acrossthe organisation. The individual employee’sability to deliver the brand promiseconsistently makes all the differencebetween a business that merely owns atrademark and a business where brandcapital is constantly augmented. Theproblem is the lack of success of so many‘living the brand’ internal programmes.
>The new way of assimilating the desiredbrand values into the whole businessrequires systems, structures, plans based oncomprehensive gap analysis, and amobilisation programme designed to exploitthe particular skills of brand experts toengage hearts and minds of everyone as‘brand capital generators’. [Gilmore, 2001]
Remember that in today’s world brandshave stakeholders beyond just consumers >Employees and shareholders are the obvious
ones but increasingly there is pressure oncompanies for transparency and standards inall aspects of their enterprise.
>Skilled people can choose where to work;investors have a wide choice of investmentopportunities; customers can choose what tobuy and where to buy it. This choice meansthat your stakeholders have both the rightand the opportunity to understand andinfluence what your company does anddoesn’t do. [Duncan and Moriarty, 1997]
>Kotter and Hesket found that over an 11-year period, companies that put theemphasis on customers, employees andshareholders significantly outperformedthose that focused on only one or two ofthese groups. [Duncan and Moriarty, 1997]
>Social responsibility and the brand as ‘citizen’are growing topics of interest and concern.Recent events surrounding ethical businessin corporate America have furtherexacerbated this.
>Corporate social responsibility (CSR) is not amanagement fad and will become integral toall business and communication strategies.The business case will become betterquantified and increasingly accepted as partof the corporate balance sheet. [BBGNewsletter, summer 2001]
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Importance of strategy to brands
The following are examples of companies withsuccessful brand strategies:
Britvic
When Britvic bought the Robinsons drinksbrand from Reckitt & Coleman in 1995, thepurchase was seen as complementing thecompany’s drinks portfolio by increasing itspresence in the still, as opposed to fizzy,drinks sector. There were a number of issuesto address:
>The brand, in existence for 70 years, neededinvigorating without losing core emotionalvalues
>Its availability had to be widened
>There was almost saturated consumptionamong the core market of children while theadult market penetration was very low.
After a fundamental rethink, by 1997 a newstrategy was in place. Elements included:
>Focusing on leveraging the brand’s strengthsacross different lifestages and consumer-need states
>Identifying three target markets – children,adults and families – with three distinctcommunications
>Underpinning growth through innovation:partnerships with other brands, like Disney,to freshen the category in stores.
The brand now enjoys constant growth, withthe innovation programme contributing over14% of the brand’s volume.
First Direct
From its inception First Direct has beendetermined to match efficiency of operation(eg, by developing a branch-free model) witheffectiveness of service (eg, by having ahighly-motivated staff). It was launched 13years ago in a market that was assumed to beossified – consumers were ‘stuck’ in theirprimary banking relationships – and wheremarket shares hadn’t changed for the past twodecades.
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But, through radical innovation, a very single-minded proposition and a high level of servicedelivery, First Direct was able to attractconsumers away from ingrained primarybanking relationships and also generate a lotof value from those customers by cross-selling.It now has over a million customers.
It has invested substantially in supplementingits telephone network with Internet and mobilephone services. Key elements include thefollowing:
>More than half of customers are now e-customers, which has had the advantage ofcutting down routine calls to the call centre
>That has meant the bank can increasinglyoffer new and more complex services on thetelephone
>An emphasis on constantly updating the Website content within the framework of a strictbrand template and based on constantcustomer feedback
>Trying to make all channels work asseamlessly as possible within the constraintsof technology by resisting a bureaucraticapproach.
Häagen-Dazs
Häagen-Dazs in 1997 was the leading icecream brand in the UK. Because premium icecreams are based on their point ofdifferentiation, the challenge for brand ownersis to make them relevant. Häagen-Dazs didthis very successfully with its provocativeadvertising campaigns.
Over time, however, the advertising was toneddown to attract mainstream consumers. Thechallenge was to build relevance, in the face ofthe early adopters beginning to show signs ofsignificant disaffection for the brand. By 1999rival Ben & Jerry’s was seen to have a moreedgy, informal and trendy character. WhatHäagen-Dazs had to do was to recapture someof its original provocative edge through a newapproach in its advertising.
Häagen-Dazs presentation
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Checklist
>Is there a clear and clearly expressedstrategy for the brand? Is it flexible enoughto change when necessary?
>Is there a well-established brandmanagement process to ensure that thisstrategy encompasses all the touch pointsbrand consumers will encounter?
>Is the brand strategy defined not just inrelation to its own history and standards, butalso in relation to dynamic market changes?
>Is the entire organisation focused ondelivering the brand promise?
>Do you see the brand not just as a promiseto your consumers, but to all yourstakeholders, including employees, investorsand partners?
>How is your brand positioned to differentiateit from the competition and keep yourconsumers loyal?
>Do you know which customers you shouldtarget – and why?
>Is responsibility for the brand at a highenough executive level?
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CASE STUDIES1. Marmite: Where’s my breakfast?
2. Robinsons: Brand rejuvenation
3. Skoda: A joke no longer
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1. Marmite: Where’s my breakfast?
Not many brands survive 100 years. Marmite –created in 1902 by the same man whoinvented Oxo – is one of the most enduringand recognisable fmcg brands and is eaten by25% of UK households. The iconic design hasnot been changed since 1940, the onlymodifications being a change from a metal toyellow plastic cap, and the metrification of theoriginal ‘1lb’ label.
The brand was helped when the word ‘vitamin’was coined in 1912 to describe organicsubstances vital for life. Marmite’s keyingredient, yeast, is a source of five B vitaminsand folic acid.
Since commercial television’s arrival in 1955,Marmite’s advertising has relied on substantialTV campaigns with well-remembered slogans;‘the growing up spread you never grow out of’,then ‘my mate Marmite’ in the 1980s andrecently, the attention-grabbing ‘love it or hateit’ campaign, devised by BMP DDB. This wasone of the first advertising campaigns to beupfront about the fact that not everyone likesthe product. The strategy was successfulbecause it recognised there is no point in
trying to convert people who do not like theproduct, but meant people who do like it couldfeel part of a select group and enjoy the senseof allegiance.
In 1998, Marmite had a staggering 70%market share – its nearest rival, Bovril (whichis virtually identical to the non-connoisseur,and just as well-known a name) had just 20%.After the ‘love it or hate it’ campaign, in 2000Marmite had increased this share to 72%, andBovril had gone down to 15%. Other brandsand own brands barely register [Source:Mintel]. Sales of Marmite increased 16% afterthe first four weeks of ‘I hate Marmite’ adverts[Source: ACNielsen].
There is plenty of opportunity for brandextension for Marmite, but the proprietorstreat the product with respect. The recent linkwith Walker’s crisps was a rare example andhas proved to be successful.
Why is the brand so successful? Marmite hasnot been slow to recognise that the producthas a cult, quintessential Britishness about it –Marmite on toast being a traditional staple forgenerations, like baked beans or cups of tea –and recent PR has focused on how the brand,
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product and packaging has changed littlethrough the years, and how this consistencyleads to strong brand loyalty.
Also, it was the first product in its sector tocome to public attention. According to SimonMottram of The Fourth Room, a creativestrategy group, ‘they wrote the rule book’.Their marketing continues to be relevant. LikeBass, Colmans and Robertsons, they are‘heritage brands’ – Jaguar and the Mini areother obvious examples of these, but humblegrocery products can be just as powerful tothe consumer.
And finally – the large, simmering pot on thefront label is called, in French, a marmite. Nota lot of people know that.
2. Robinsons: Brand rejuvenation
The Robinsons brand can trace its roots backto 1823 and has existed as a fruit drink sincethe Wimbledon tennis championships of 1934.When the brand was taken over by Britvic in1995, Robinsons appeared to be staringdecline in the face, the family market wasdemanding more and more fizzy drinks,demographic trends forecast a decliningnumber of children in the coming decade andthe brand had achieved low penetrationamongst adults of just 2%.
Initially Britvic attempted to market the brandto the adult market and shed their slightlydated image, but by 1997 Robinsons werestruggling to hold their sales volume and hadlargely failed to increase adult consumption.Brand managers realised that they had ignoredtheir core customers, the family, and alsomoved away from many of the brand’s corevalues. A fundamental rethink was needed.
Robinsons built their new ‘innovation’campaign on rejuvenating and invigorating thebrand for the modern market whilst returningto their core values of tradition, Englishnessand healthy lifestyles. Three key consumertypes were identified – family, adults and
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children – and the marketers began to build asingular brand which could leverage their corevalues and achieve growth across each distinctmarket. Sub brands which didn’t fit this modelwhere quickly removed, new ways ofmarketing the brand were identified and newproducts were developed to achieve growth.
For their traditional family market, Robinsonsreturned to their association with Wimbledonand tennis that had served them well in thepast, by sponsoring Tim Henman and risingBritish stars and funding youth tennisinitiatives. A promotional link was arrangedwith Disney for their animated films and thebrand linked up with releases such as A Bug’sLife, Tarzan and Toy Story 2. The slogan ‘feedtheir imagination’ was also adopted to appealdirectly to parents shopping for their children.
For the adult market, where Robinsons hadpreviously had little impact, the brand wassupported by a portfolio of new productsdesigned to appeal to older consumers. HighJuice and Barley Water squashes werelaunched as premium products for the adultpalate and marketed as such. Fruit Break, alow calorie, ready-to-drink spring water andfruit beverage, was launched to target
females. The strength of the Robinsons brand,combined with products aimed specifically atthem, soon attracted adult consumers.
Children were appealed to directly with thelaunch in 2000 of Fruit Shoot, a fruit drink ininnovative ‘sports cap’ packaging designed toappeal to kids by being cool. Heavy advertisingand even a computer game in association withNickelodeon supported the launch. In less thantwo years, Robinsons quadrupled their share ofthe ready-to-drink kids market.
Consistent values and innovation haveinvigorated the Robinsons brand and growthhas been consistent since 1998, growing 34%in the first three years, despite the spectacularlaunch of Sunny Delight and increasedinvestment in fizzy drinks. The brand hasgrown year on year, climbed from the twelfthto the eighth largest grocery brand in the UKbetween 2000 and 2002, and is purchased bymore than half of all UK households. Theinnovation programme already contributesaround 15% to the brand’s volume and thisfigure looks set to grow.
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3. Skoda: A joke no longer
Despite a good reputation in Central andEastern Europe, Skodas became a laughingstock in the West when they were introducedover 40 years ago but in 1991, whenVolkswagon bought a stake in Skoda, a carefulmarketing strategy began to re-position thisnegative view.
First the product was dramatically improvedand launches of the Felicia and the Octavia in1994 and 1998 were greeted with ravereviews. But the results were disappointing:whilst awareness rose briefly, sales wereunimpressive [Source: JATO].
The launch was unsuccessful because itcontinued Skoda’s established strategy thatthere should be no recognition that peoplethought Skodas were terrible. The lesson wasthat product reinvention alone was notenough; marketing would have to perform agreater role.
The most basic challenge was to persuadepeople that a Skoda wasn’t a joke. The Fabiain 2000 was launched with more positive presscomments and was named ‘Car of the Year’but the perception of the average buyer was
that it was still extremely embarrassing to beseen driving a Skoda.
But with half the budget of the Octavia launch,Skoda’s new marketing agency Fallon setspecific objectives – to increase Skoda sales,to make more people consider buying a Skoda,and to improve the image of the Skoda brand.The most startling obstacle to this was thestatistic that 60% of people would ‘definitelynot consider’ buying a Skoda [Source:Quadrangle].
The strategy was to acknowledge the problemexisted, and confront it head-on with a greatcar. The execution of this was a provocativeapproach that showed people making fools ofthemselves by assuming that because the carwas so good, it couldn’t be a Skoda. This ideawas manipulated carefully to ensure thatpeople were in on the joke, subtly movingthem onto Skoda’s side with the tagline, ‘It’s aSkoda. Honest.’
The advertising was almost twice as effectivein getting noticed as the average car ad[Source: Millward Brown]. Skoda sales grewby 34%, topping 30,000, the company had awaiting list for the first time and Skodaachieved a psychologically important 1%
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market share of new cars sold in the UK. Themarket share target has now been revised to2% by 2004 [Sources: SMMT, JATO, Daily CarRegistrations, Skoda UK]. Before thecampaign, 47% of interviewees saw Skodas ascars you couldn’t take seriously. After thecampaign, this had reduced to 32% [Source:Millward Brown].
The campaign recognised that a great productalone is not enough. It employed the basicmarketing tenet of delivering value tocustomers and showed the value of integrationat a strategic level (in this case, advertisingand PR). Recognising that negativity towardsSkoda could be a positive force if handledcorrectly, was an important lesson.
[Main source: The Death of the Skoda Joke, areport by Fallon, January 2001]
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