Portrait of Canada, 9780070680906, 0070680906

Table of contents :
TITLE
CONTENTS
1 INTRODUCTION TO THE 7 FUNDAMENTAL BRAND MANAGEMENT PRINCIPLES
2 PRINCIPLE 1: LEVERAGE INFORMATION VIA HYPOTHESIS-LEDDATA ANALYSIS
3 PRINCIPLE 2: UNDERSTAND COMPETITION AND MAINTAIN YOUR POINTOF DIFFERENCE
4 PRINCIPLE 3: MANAGE YOUR BUDGETS WITH SCARCITY MENTALITY
5 PRINCIPLE 4: KNOWTHE HURDLE IN YOUR CONSUMER’S LIFE THAT YOUR OFFERING SMOOTHENS
6 PRINCIPLE 5: BE CONSISTENT WITH YOUR POSITIONING OVER TIME AND ACROSS PLATFORMS
7 PRINCIPLE 6: GET THERIGHT PRICING THAT OFFERS VALUE IN THE EYES OF YOUR CONSUMERS
8 PRINCIPLE 7: MOTIVATETHE TEAM BY ENVISIONING AND EARLY BUY-IN
9 TAIL PIECE
REFERENCES
INDEX
AUTHOR'S PROFILE

Citation preview

The

principles of

B R A ND MANAGEMENT

The

principles of

B R A ND MANAGEMENT

Nitish Rai Gupta

Tata McGraw Hill Education Private Limited NEW DELHI McGraw-Hill Offices New Delhi New York St Louis San Francisco Auckland Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal San Juan Santiago Singapore Sydney Tokyo Toronto

Published by Tata McGraw Hill Education Private Limited, 7 West Patel Nagar, New Delhi 110 008 Copyright © 2011 by Tata McGraw Hill Education Private Limited No part of this publication may be reproduced or distributed in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior written permission of the publishers. The program listings (if any) may be entered, stored and executed in a computer system, but they may not be reproduced for publication. This edition can be exported from India only by the publishers, Tata McGraw Hill Education Private Limited. ISBN 13: 978-0-07-068090-6 ISBN 10: 0-07-068090-6 Vice President and Managing Director—Asia-Pacific Region: Ajay Shukla Publishing Manager—Professional: Vibhor Kataria Manager—Production: Sohan Gaur Asst. General Manager—Sales and Business Development—Professional: S Girish Asst. Product Manager—Business and General Reference: Priyanka Goel General Manager—Production: Rajender P Ghansela Asst. General Manager—Production: B L Dogra Information contained in this work has been obtained by Tata McGraw Hill, from sources believed to be reliable. However, neither Tata McGraw Hill nor its authors guarantee the accuracy or completeness of any information published herein, and neither Tata McGraw Hill nor its authors shall be responsible for any errors, omissions, or damages arising out of use of this information. This work is published with the understanding that Tata McGraw Hill and its authors are supplying information but are not attempting to render engineering or other professional services. If such services are required, the assistance of an appropriate professional should be sought.

Typeset at Script Makers, A1-B, DDA Market, Paschim Vihar, New Delhi 110 063 and printed at Rajkamal Electric Press, Plot No. 2, Phase IV, HSIIDC, Kundli, Sonepat, Haryana 131028 Cover Printer: Rajkamal Electric Press Cover Designer: Mukul Khattar RZXCRRYGRCRYD

To Mom and Dad Pillars of Strength for their Loved Ones

PREFACE The 7 Principles of Brand Management is intended for students, working professionals, entrepreneurs—anyone who is keen to understand marketing and what goes behind building a world class brand. The book leverages my brand building experience across a variety of categories in more than 20 countries, combined with countless discussions I have had with brand builders across the globe. As a result, I have been able to understand these seven common traits that lead to the creation of successful global brands. Thus, you will find that each of the principles is explained with copious examples from brands across the globe to help you put them in context of a real-life brand building situation. I would like to take this opportunity to thank my friends, colleagues, and other marketing professionals with whom I have had the opportunity to spend countless hours debating and discussing brand building nuances, which gave me good food for marketing thought. These discussions were always insightful, both in terms of what works and also what typically might not work in brand building endeavors. Specifically, I would like to express my gratitude to Mainak Dhar for opening the world of brand management and being a mentor to me. Thanks to Gaurika Gupta, Leila Castaneda Mehra, Ankur Agarwal and Anupam Jain for being sounding boards and for being there to help. Heartfelt thanks to Ajay Suri for being the leader that I will always aspire to be. Special thanks to Sangeeta

viii

Preface

Pendurkar for teaching me the importance of discipline and perseverance in professional life. I would like to thank my publishers at Tata McGraw Hill for giving me the opportunity to share these fundamentals with individuals interested in understanding how to build brands in today’s marketplace. Finally I would also like to express sincere gratitude towards my family, especially my mother, who has been a source of support and encouragement to me in all walks of life, and to my wife Aditi for her understanding and for always being there. Wishing you all the best in brand building and applying these 7 principles! NITISH RAI GUPTA [email protected]

CONTENTS Preface

vii

1. Introduction to the 7 Fundamental Brand Management Principles

1

2. Principle 1: Leverage Information via Hypothesis-led Data Analysis

9

3. Principle 2: Understand Competition and Maintain Your Point of Difference

25

4. Principle 3: Manage Your Budgets with Scarcity Mentality

39

5. Principle 4: Know the Hurdle in Your Consumer’s Life that Your Offering Smoothens

53

6. Principle 5: Be Consistent with Your Positioning Over Time and Across Platforms

71

7. Principle 6: Get the Right Pricing that Offers Value in the Eyes of Your Consumers

85

8. Principle 7: Motivate the Team by Envisioning and Early Buy-in

99

9. Tail Piece

111

References

115

Index

119

CHAPTER

1 INTRODUCTION TO THE 7 FUNDAMENTAL BRAND MANAGEMENT PRINCIPLES

The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed. – Henry Ford As a man can drink water from any side of a full tank, so the skilled theologian can wrest from any scripture that which will serve his purpose. – Bhagavad Gita

Introduction to the 7 Fundamental Brand Management Principles

3

B

rand management is traditionally defined as the application of marketing techniques for a product or service to increase its perceived end consumer value, usually measured as ‘equity’ of the brand being marketed. Creating this ‘equity’ is a crucial factor that distinguishes an offering from a conventional ‘commodity’. Today if we pick any product category, we will find a number of players in the fray vying for consumer attention. The brands that do end up getting high consumer attention have the ability to differentiate themselves from the rest in a manner relevant to their consumers. What differentiates an Apple in PCs, a Rolex in watches, Google in search engines, a Heinz in ketchups or a Gillette in shaving razors from other brands is the value that their brand managers have been able to create in the minds of consumers

4

The 7 Principles of Brand Management

over time, who then reward the brand with greater sales. This is what ends up driving better shareholder value ultimately. Simply put, the value that a brand can create for a company can be measured as the difference between the market capitalization of the company and the value of assets of the company, i.e., Value created by the brand = Total market capitalization – Value of total physical assets of the company

This is a broad and simplistic way to quantify the value created by the brand, but it does give you an idea of the critical role that building a brand plays for success of any company marketing its products/services. Apple’s market capitalization is greater than $150 billion because its brand value created is greater than the sum total of all the assets that the company possesses. This would not have been possible without the effort put in by the brand builders at Apple over the years across the world. During the course of any brand’s life, it will experience ups and downs in its value driven by factors such as competitive impact or global economy. Usually the brands that are able to tide over tough times and turn their fortunes around are the ones that are led by strong brand builders. Whether it’s the successful global launch of ‘Clear’ brand of shampoos from Unilever or the successful defense of a local Philippines fast food player ‘Jollibee’ from a strong McDonald’s onslaught, brand managers play a critical role in a company’s fortunes. I have had the opportunity and good fortune to interact with some of the best brand builders globally. My experience is

Introduction to the 7 Fundamental Brand Management Principles

5

spread across categories ranging from beauty and personal care at one end to food and beverages at the other. My work also enabled me to understand marketing and brand building nuances across geographies including the United States, Europe, Asia, Middle East and even Africa. Also, having led brands in personal care and foods business across a variety of geographies has created experiences that were instrumental in helping me conceive a set of principles in action for effective brand management. Thus, in this book, I have made an attempt to go beyond theory and leveraged my practical experience to understand what differentiates star brand managers from others. The result is seven fundamental brand management principles that you will find a star brand builder adhering to consistently in comparison to his or her peers. These skills are more about the attitude towards marketing and branding that an individual can consciously adopt that could lead to strong brand value creation. Wherever possible, I have tried to substantiate my point with live industry examples and case studies that will give you clarity in understanding how the idea applies in a reallife situation. The brands in the examples quoted might not have actually followed the structure I am going to propose but it shows how the brand team ended up applying those seven principles whether consciously or not, resulting in strong brand value creation. It is my sincere hope that you enjoy reading this book and find the seven principles insightful for your own brand building endeavors, whether it’s an established brand you are working on or a start-up that you want to build. Before getting into the details of the seven principles, I have tried to represent them in what I call the ‘hour-glass model’. A typical hour glass will have two curved (conical) containers held

6

The 7 Principles of Brand Management

on top of each other with a support at the narrow end. The sand that measures time flows from the top half to the bottom half, i.e., the top feeds into the bottom. The complete hour glass, thus, enables us to get a sense of time elapsed depending on the quantum of time it is supposed to measure.

Fig. 1.1

A Typical Hour Glass

Similarly, for our seven principles, the top half of the hour glass represents the three core principles that enable you to build competence for a successful brand building endeavour. These top-half of the hour-glass principles are the following: 1. Leverage information via hypothesis-led data analysis. 2. Understand competition and maintain your point of difference. 3. Manage budgets with a scarcity mentality. Like the sand in the hour glass, these three skills then percolate into the bottom half of the hour glass, which represents three more principles around developing a superior consumer plan. These bottom-half of the hour-glass principles are as follows: 4. Know the hurdle in your consumer’s life that your offering smoothens. 5. Be consistent with your positioning over time and across platforms.

Introduction to the 7 Fundamental Brand Management Principles

7

6. Get the right pricing that offers value in the eyes of your consumers. Finally, the band or support that holds the two halves of the hour glass together is what represents the seventh principle—it forms the support for the remaining six principles and is defined as follows: 7. Motivate the team by envisioning and early buy-in. Thus, the seven principles in our hour glass model will look as follows: Principle 1: Leverage information via hypothesis-led data analysis Principle 2: Understand competition and maintain your point of difference

Build competence

Principle 3: Manage your budgets with a scarcity mentality Principle 7: Motivate the team by envisioning and early buy-in Principle 4: Know the hurdle in your consumer’s life that your offering smoothens Build consumer plan

Principle 5: Be consistent with your positioning over time and across platforms

Principle 6: Get the right pricing that offers value in the eyes of your consumers

Fig. 1.2

The Hour Glass Model: Seven Fundamental Brand Management Principles

Before we go on to a detailed understanding of the 7 principles and the model, to reiterate the importance of brand building approach to marketing your product or service, I

8

The 7 Principles of Brand Management

would like to quote Sun Tzu from The Art of War: “The art of war is of vital importance to the state. It is a matter of life and death, a road either to safety or ruin. Hence it is a subject of inquiry which on no account can be neglected”. Similarly in today’s marketing arena, the subject of inquiry explained by these seven principles of brand management will help you win in the marketing battlefield.

CHAPTER

2 PRINCIPLE 1: LEVERAGE INFORMATION VIA HYPOTHESIS-LED DATA ANALYSIS

Get the habit of analysis—analysis will in time enable synthesis to become your habit of mind. – Frank Lloyd Wright The habit of analysis, the ability to get under the surface of things and at the vital essentials, gives a man tremendous advantage. – Anon

Principle 1: Leverage Information via Hypothesis-led Data ...

11

A

nalysis is the ability to collect information and convert such information into a forceful rationale for taking the right action for the brand. Just like a heap of stones is not a house, similarly, without analysis, all information and numbers is just a heap of stones. It requires analysis to convert that heap into a beautiful house. Sun Tzu in The Art of War says, “The general who wins a battle makes many calculations in his temple before the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus, doing many calculations leads to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose”.

12

The 7 Principles of Brand Management

Similarly, the general of a brand, the brand manager, needs to ensure that enough analysis and due diligence is done to enable the brand to win in the consumer marketplace. Building a strong brand requires one to leverage data, information, and its analysis to develop optimum marketing plans for the brand. It’s a basic skill that can be consciously developed by a disciplined approach of problem-solving. This approach will always help a brand manager make an objective decision and become a thought leader in the organization. The first step towards starting any analysis for an issue at hand is to formulate the hypothesis as to what potentially would be the solution. Thereafter, one needs to leverage data/information to validate the hypothesis as correct or incorrect. This provides a good starting point for analysis and prevents one from getting swamped with data and not knowing what to do. This also keeps focus on the bigger picture without getting lost in information. Thus, a star brand manager will always be single minded in analysis that could help solve a complex business problem via ‘hypothesis-driven data analyses’. Hypothesis-driven data analysis is a three-step process. Business Understanding Gut / Experience

Problem Issue Definition

Hypothesis 1

Hypothesis 2

Hypothesis 3

Fig. 2.1

Data Analysis

Action Plan Correct

Incorrect

Incorrect

Principle 1: Leverage Information via Hypothesis-led Data ...

13

(a) The first step to start any analysis would be to define the business problem at hand in consumer language, i.e., instead of defining the problem as ‘how to increase sales of our product’, we should define it from the end consumer point of view, i.e., the consumer issue, which in this case could be ‘how to get new consumers to try our product? Or how to get current users to consume more of our product or service? (b) With a clarity on the problem in hand, the next step requires one to leverage his or her business/category experience and gut feel to set a clear list of hypotheses as to what could be the most likely reason/solution for the issue that is being analyzed. There could be more than one hypothesis that one could look at before starting data mining. Anchoring relevant hypothesis is critical because it will help you focus on the relevant and actionable elements for planning. (c) This is the stage where one picks the hypothesis that was set earlier, one by one and systematically looks for data/ information that will help either prove or disprove the hypothesis that was proposed at the outset. The correct hypothesis is then taken to a logical conclusion by developing a suitable action plan. The incorrect hypothesis on the other hand is then discarded.

Case Study 1A: Aleve Let’s look at an example to demonstrate this. In a market where your brand is struggling, setting a clear hypothesis before jumping on to data analysis will help you be focused in your data mining and analysis and the outcome would be a simple yet effective solution to the problem at hand. This analysis model can be effectively applied to what the brand managers at Bayer Consumer Care did for their OTC (over the counter)

14

The 7 Principles of Brand Management

pain relief medicine brand ‘Aleve’. Aleve had been a struggling brand, with mid-single digit market share. The brand team got together to re-invent the brand. Through basic consumer research and insight mining they were able to piece together the ‘dramatic differences’ marketing campaign, targeting the sizable arthritis-affected population. This helped them turn the brand around. This process can easily be represented via the hypothesis-led data analysis model. The first step in the hypothesis-based data analysis would be to define the problem/issue at hand in consumer terms. Thus, the problem of ‘not being able to grow market share’ had to be understood first from consumer stand-point. Based on in-home interviews and profiling of consumers who were heavy users of OTC pain relief medicine, it was found that 35% of them had tried Aleve in the past year but they had been using other brands of pain relief medicines as well. Thus, the problem would have to be re-defined as ‘How do we convince the heavy OTC pain relief medicine users to choose Aleve over all other brands in market?’ Half the battle is won by clearly defining the issue/problem. Through defining a problem this way, the brand team would know that though the consumers were aware of the brand ‘Aleve’ and had also tried Business Understanding Gut

Convince heavy users

Hypothesis 1

Hypothesis 2

Hypothesis 3

Fig. 2.2

Data Analysis

Action Plan

Principle 1: Leverage Information via Hypothesis-led Data ...

15

the medicine, they were not sticking with the brand. This simplifies the next step and subsequent data analysis. Now, the second step would be to define the possible hypothesis that could potentially be the answer to the problem defined initially. A few hypotheses to the Aleve problem could be on the following lines: (a) Our product performance is not as good as competing products. (b) Consumers do not understand what benefit we offer. (c) Our benefit to the consumers is not differentiated or relevant enough as compared to what the competition is offering. As you can see, defining these hypotheses required an overall understanding of the business, consumer needs and drivers for the brand. With the hypotheses in place, the brand managers would then need to prove them as correct or incorrect based on data and information analysis that includes share trends, performance, Business Understanding Gut/Experience

Convince heavy users

Product not good

Consumers don't know benefit

Benefit not relevant

Fig. 2.3

Data Analysis

Action Plan

16

The 7 Principles of Brand Management

consumer feedback, equity scorecards etc. The first hypothesis that the product performance was not good enough could be ruled out based on technical product performance and company R&D benchmarking. Then, based on consumer market research, the brand managers would find that the top two attributes that drive preference for their brand (Aleve) among the sizeable consumer segment suffering from arthritic pain were as follows: (1) Control over pain (Functional) (2) Freedom to do things you want (Emotional). The fact was that majority of the population was not really aware of this benefit that Aleve offered or did not associate the brand with these benefits. Thus, the hypothesis that the target consumers who were suffering from arthritic pain were not aware of their benefit (functional and emotional) was correct and this finding provided the answer to the problem of the brand not growing Business Understanding Gut / Experience

Convince heavy users

Product not good

Data Analysis Incorrect

Consumers don't know benefit

Correct

Benefit not relevant

Incorrect

Fig. 2.4

Action Plan

Principle 1: Leverage Information via Hypothesis-led Data ...

17

its market share. The remaining hypothesis (the brand benefit is not relevant) was also proven incorrect given that those two benefits were actually among the top category needs as well. Armed with this, the brand team would then develop the successful marketing campaign ‘dramatic differences’, which showcased the benefit for arthritic patients and got them to stick to Aleve and not switch brands, resulting in double digit increase in sales and shares hitting all-time high.

Case Study 1B: Adidas Another example of a brand manager using his strong analytical skills to establish one of the all-time great brands is Adolph Dassler, the founder of brand Adidas. Adolf Dassler was a sportsperson himself and moved into the business of making shoes. He envisioned building a strong footwear brand. His approach can easily be understood through our hypothesis-led data analysis model. The issue instead of being simply defined as ‘how to launch a great footwear company’ in our hypothesisdriven data analysis model would be redefined from consumer standpoint as ‘how to differentiate a footwear brand in a market where footwear is sold as a commodity?’ While building the Adidas brand, the key idea in Adolf Dassler’s mind was to manufacture sports shoes that actually help a sportsperson improve his or her performance. The hypothesis defining this requirement of Dassler was that shoes designed for specific sporting requirements could actually help enhance performance in that particular sport. Once this hypothesis is anchored, we would go to the next step—mine for data and collect information to verify whether this hypothesis is correct or incorrect. This could be done by meeting different sports trainers, doctors, and coaches and even utilizing personal sporting experience. Collecting all these data points would not only prove the hypothesis right but also give valuable insights into specific

18 The 7 Principles of Brand Management

requirements for different sports. Thus, it would lead to creation of the brand ‘Adidas’. To summarize this situation in the typical hypothesis-led data analysis format, we define the following: Problem/Issue: How to differentiate a footwear brand in a commodity market? Hypothesis: Shoes designed for specific sports can help enhance performance. Data: Focus group research and discussions with trainers, doctors, sporting personnel Action Plan: Soccer shoes with studs, spikes for athletes, etc. So whether it was the concept of introducing soccer boots with studs that enabled players to get superior grip in wet playing conditions, or shoes with spikes for athletes, Adidas brand established itself as a leading sports shoes brand and continues to be one of the top sport brands today. This demonstrates how analysis can be successfully used to lay foundation for all the product innovations in an iconic brand. Of course, for Adidas, this proposition was combined with good marketing communication as well (creating the three stripes for consistent brand recognition across all the different shoe types, sports sponsorships etc.). But the crucial point is that it all depended on the genius of Adolph Dassler and his ability to analyze and understand how brand Adidas can create a difference in sports industry. Once he was convinced of the potential for sports shoes, it helped him lay the foundations on which brand Adidas was built.

Principle 1: Leverage Information via Hypothesis-led Data ...

19

Case Study 1C: Moet and Chandon Let’s look at Moet and Chandon, probably one of the top most champagne brands. This brand is a status symbol even today and one would want to be seen drinking a Moet and Chandon champagne. Though the brand is more than 250 years old, yet it continues to be relevant and aspirational for its consumers even today. The seeds for this were sown with the launch of the brand when it was positioned as the brand of champagne for the top end of the society. The brand leveraged influence-led PR and word of mouth publicity. The fact that Louis XIV and Queen Victoria were one of the consumers of the brand Moet and Chandon created aspirational appeal for the brand. However, with time, the society evolved and the brand faced one of its biggest challenges, i.e., how could the brand Moet and Chandon still stay relevant in a modern society that had evolved and transformed from the times when it was launched. At the same time, the brand did not want to compromise on the hard earned prestige brand equity. Thus, the brand growth was stagnating and a fresh lease of life was needed to revitalize it. Let’s look at what the brand team did, through our hypothesisled data analysis model. It could have been easily applied here as well. The problem/issue from a consumer standpoint would thus, be ‘how to make the brand relevant in the evolving society of today?’ As the brand managers would go about seeking the solution to this problem, a couple of hypotheses that could be considered are: (a) The brand positioning (brand preferred by the top socioeconomic segment of the society) was not relevant to the consumers any more; (b) The brand positioning was still relevant to the consumers, however, the way it was being communicated was not meaningful to the target audience.

20 The 7 Principles of Brand Management

Thus, the team would then go back to the drawing board to understand what ‘high society’ is in contemporary context. After focus groups and data mining, the conclusion would be that the top end of the society today had evolved from the erstwhile royalty to a variety of profiles like the fashion industry people, bankers, entrepreneurs, etc. To this new segment that had emerged, the inherent positioning of Moet and Chandon as a status brand was still relevant, however the way the brand was taking the proposition to them (i.e., brand of the royalty) was dated and not really meaningful. With the second hypothesis proven right, the brand managers then would go on to define new initiatives for the brand; for example, the launch of miniature versions of Moets in Paris Cafes, thus, targeting their new consumers directly. This is in fact what the team did and it was followed by the brand evolving to sponsor fashion events across key cities globally in Paris, New York, London, etc. This enabled the brand to stay contemporary and yet continue its top end of society association resulting in great business results. To summarize this brand positioning in a simple hypothesisdriven data analysis format would be as follows: Problem/Issue: How to make the brand ‘Moet’ relevant to the evolved consumers of today? Hypothesis: (a) Current ‘high society’ positioning is no longer relevant to the consumers now; (b) The positioning per se is still relevant but it’s not being communicated in a meaningful way to the target audience Data: Focus groups and discussions with the high society of today (bankers, fashion gurus, celebrities, etc.)

Principle 1: Leverage Information via Hypothesis-led Data ...

21

Action Plan: Hypothesis (a) proven incorrect while hypothesis (b) was proven correct. Brand kept the high society positioning but tailored its communication to the high society of today (mini Moets in cafes, fashion show sponsorship etc.) Again we see how good data-driven, hypothesis-based analysis usually forms the core strength around which brand managers can build great campaigns and brands.

Case Study 1D: American Express Brand American Express was launched in mid-1800s as a freight company that transported supplies. It played a critical role in the American civil war when it managed supply logistics for the army. As the company evolved and expanded in business, it utilized its freight business network to also start offering financial services like funds transfers. The fund transfer was done primarily for Europeans settled in America to their respective home countries. This offering from American Express, i.e., ‘convenience in handling cash’, started creating good business for the company and brand American Express. Now, the brand team was faced with the challenge of ‘what next’, i.e., how could American Express as a brand evolve and grow from here. Let’s look at what they did from our hypothesis-driven data analysis format. Thus, the problem of ‘how to grow the business?’ will have to be rearticulated from the end consumer point of view. Thus, the brand team would go about understanding consumer needs better and the problem would be redefined as ‘how to leverage the American Express expertise in cash management to offer more and better solutions for its consumers?’ This in effect would mean that the team would be looking to grow the business in cash management by developing more consumer-relevant innovations, i.e., convenience in handling cash is needed not just when they

22 The 7 Principles of Brand Management

have to transfer money home but potentially in other financial transactions as well. This in effect provides American Express the opportunity to leverage its cash handling expertise for many more occasions. With this insight on cash management occasions, a key hypothesis that comes up as a solution to the problem is that for the consumers, convenience in handling cash when they are traveling is an unarticulated need. With this hypothesis defined, the team then undertakes consumer research and finds that cash management when traveling is among the top needs for their target audience. This thus, validates the hypothesis and the brand team would work with the development team. The result is the launch of revolutionary ‘travelers cheque’, the first of its kind offering. It provides cash convenience to travelers. In fact, this very analytical thinking is what later helped American Express to evolve and launch credit cards (i.e., convenience in everyday cash handling). In our hypothesis-led data analysis format, we could summarize the American Express case as follows: Problem/Issue: How to leverage American Express expertise in cash management for end consumers at more occasions? Hypothesis: Managing cash for consumers when they are traveling will offer great convenience and value for them. Data: Market research with the target consumer group. Action Plan: Hypothesis proven correct as convenience in handling cash when traveling came up as one of the top needs.

Principle 1: Leverage Information via Hypothesis-led Data ...

23

Thus, leads to development of ‘travellers cheque’, which revolutionized the way people handled money during travel. All these examples clearly indicate how the general of the brand, i.e., the brand manager is uniquely placed in any company to leverage his/her analytical skills to leave longlasting impact on a brand and define how the brand will evolve in the future.

Personal Brand Building Brand management, practiced objectively, has amazing application on personal front as well. Applying similar logic and skills to our everyday life can actually help us build a strong brand for ourselves. Let’s evaluate the first principle (hypothesis-led data analysis) in the context of our life decisions. Imagine a situation on job front where an individual is not making progress in terms of moving to the next organizational hierarchy level. This individual is hitting the ceiling in career progression and hence would be experiencing frustration. Looking at this as an individual brand building exercise, hypothesis-driven data analysis can actually help this individual to objectively arrive at a solution to the problem. As discussed in the analysis model, the first step is to ‘define the problem’. So, the problem of the individual not moving ahead in career will need to be rearticulated from the consumer (manager of the individual) view point. A possible articulation of the same issue could be as ‘I am not being perceived as a promotion ready candidate by the management’. Once the problem definition is done, the possible hypothesis to the solution can be listed, which in our case could be as follows: (1) Need to develop more technical skills to move to

24

The 7 Principles of Brand Management

the next level or (2) Need to develop more ‘people’ skills to get to the next level or (3) The current job is not really a fit with my values. Once the hypotheses have been articulated and understood, the individual needs to gather information or data to prove them correct or incorrect. In this case, different kind of data points that could be considered are colleague/peer feedback, manager feedback, subordinate feedback, skill assessment or even talking to more successful colleagues. For the individual in our case if the feedback indicates that he or she does infact have the required technical skills, it is actually his or her relationship management with others in the organization that is preventing him or her from moving ahead in career, then the action plan is clear: the individual needs to get a good mentor in the organization who can help him or her plan career progression in accordance with the company norms. The beauty of applying these branding principles in personal life is that it forces one to objectively look at the issues and resolve them keeping the long-term mission in mind.

CHAPTER

3 PRINCIPLE 2: UNDERSTAND COMPETITION AND MAINTAIN YOUR POINT OF DIFFERENCE

Competition is a painful thing, but it produces great results. – Jerry Flint in Forbes And while the law [of competition] may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department. – Andrew Carnegie

Principle 2: Understand Competition and Maintain ...

27

C

onsumers today are spoilt for choices. If we look at any product or service category, there will be a number of brands vying for consumer attention. For any brand, inevitably we will find that competition is aggressive and that will require you to act or react against their actions. Thus, all the brand building and marketing executions for your product/service will be seen by the end consumer in context of what’s happening in the market and what your competing brands are doing or offering. Thus, it is critical to understand not only what your plans are for the brand, but also what competition is doing and how your plans and ideas stack up against theirs. The importance of knowing the competition and yourself is best indicated in the Art of War as follows by Sun Tzu, “If you

28 The 7 Principles of Brand Management

know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle”. Leveraging this knowledge ensures victory as mentioned further in the art of war: “The good fighters first put themselves beyond the possibility of defeat and then wait for an opportunity of defeating the enemy. To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself”. Similarly, in building a strong brand, you need to know your own brand as well as what competing brands are offering. To drive consumers to choose your brand over competition, you will need to evaluate your proposition on two vectors: (a) How relevant is it for your target consumers? and (b) How differentiated is it in the category? Please note that by proposition it is not just the actual product you are selling but the whole benefit concept that you are driving behind the offering. The first vector (relevance to the target consumer group) refers to the fact that based on consumer needs and understanding of their habits for your category, your offering needs to be relevant enough to make a difference in their life. Positioning your offering on a proposition that is not a driver for your category will result in consumers not even considering your brand for consumption. The second vector (proposition that is differentiated in the category) refers to the fact that consumers notice the proposition you are offering as different from what others are offering. These two factors drive the preference of your brand over competition when the actual purchase happens. The two need to go hand in hand. The diagram below represents

Principle 2: Understand Competition and Maintain ...

29

the two propositions in a simple 2 × 2 matrix. The X-axis indicates consumer relevance (on the left is low consumer relevance of the proposition while on the right it refers to highly relevant proposition). The Y-axis indicates how differentiated is the proposition going from low differentiation to high differentiation in the category along the line. Thus, you need to evaluate your offering in the context of this 2 × 2 matrix to understand how relevant and differentiated your offering is. Having a very relevant proposition to the consumers (i.e., a benefit that consumers want from the category they are purchasing) but not differentiated enough for the consumers to take notice (quadrant A in the diagram) will result in the brand playing catch-up to competition and consistently declining in market share. This is because your brand is not being associated uniquely with the proposition and hence consumers would have no reason to switch to your brand. For instance, launching a new baby diapers brand on the proposition of good absorption benefit (very relevant proposition in the category but currently owned by market leader brands say, Huggies or Pampers) will not be differentiated enough in the category and hence not give

Competition Context

High High Differentiation Differentiation

Quadrant C: Builds brand awareness but does not sell

Quadrant D: Builds the brand and business

Low Differentiation

Quadrant B: Sub optimal use of resources

Quadrant A: Plays catch-up, loses market share

Low Relevance

High Relevance

Consumer Context

Fig. 3.1

30 The 7 Principles of Brand Management

the consumers a reason to try your offering. Since consumers already associate that relevant benefit with the competition, it will not create a point of difference for this brand and hence not drive sales adequately. Propositions that have low consumer relevance and low differentiation (quadrant B in the diagram) in the market result in suboptimal use of resources and fail to establish the brand and sell the product. These propositions are not noticed by the consumers and they will appear very ordinary to them. Consequently, all the marketing resources spent will be communicating the wrong message, which will go unnoticed. For instance, positioning a shampoo brand on the proposition of a product that has different colors will have low relevance in the category and also not differentiate the brand. The color of the product is not really a category driver for shampoo purchase and the fact is probably all the players do have colored products already. This offering will just not be relevant for the consumers nor differentiated in the category. Hence the brand will not be able to create a meaningful point of difference and will go unnoticed in the market. Propositions that are highly differentiated in the category but low in consumer relevance (quadrant C in the diagram) typically will get the brand noticed but not convert such visibility into sales. The consumers will know your brand but will not want to buy the same because the benefit it is offering is not relevant for their category purchase decision. For instance, positioning a tomato ketchup brand on ‘great smelling ketchup’ platform will be very distinctive and differentiated in the category since not many ketchup players are talking about this benefit. However, fragrance is not a consumer driver for tomato ketchup purchase and hence not relevant to the target consumers.

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Thus, this brand will drive awareness among the consumers but not necessarily give them a valid reason to buy the product because the proposition though differentiated is not relevant to them. Finally, propositions that are not just relevant to the consumers but also are highly differentiated in the category (quadrant D). This is where you would want your brand to play. It ensures that the proposition you offer is what consumers want from the category and the differentiation from competition ensures that your brand can uniquely own the benefit proposition, thus, strengthening loyalty with the target consumers. It is this combination of meaningful consumer differentiation that will create a point of difference for the brand, thus, driving strong consumer pull and consequently resulting in gaining market share. For instance, Dove personal care range is positioned on the benefit of soft/smooth results it offers and the fact that it contains moisturizing milk. This is very relevant in the hair care and skin care category where a product resulting in soft/ smooth hair or soft/smooth skin is one of the key category drivers. Further, the ingredient moisturizing milk in Dove has been consistently promoted by the brand for a long time and hence it uniquely owns the same. Probably no other brand in the category owns this ingredient association. Thus, with a meaningful consumer offering, Dove has been able to create its point of difference (relevant and differentiated) and hence is one of the top global billion dollar mega-brands. Staying in quadrant D requires a good understanding of the category and then a disciplined approach to ensure that your brand’s differentiated yet meaningful positioning (i.e., the point of difference for the brand) is maintained. This will ensure that the brand is not just reacting to competitive activity

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but focusing on its point of difference. This will go a long way in ensuring that you build a healthy brand to last and that you are playing to your strengths in the competitive marketing scenario.

Case Study 2A: Pepsi vs Coca Cola A great example of a brand maintaining its relevant point of difference in the face of intense competitive onslaught can be seen in the traditional Pepsi–Coke rivalry in India. Coca Cola managed to get sponsorship rights for 1996 cricket world cup in India, one of the biggest sporting events in the cricketing world, especially with cricket enjoying a huge fan following in India. This was bound to create good mileage for Coke simply because of the involvement and reach that this event generated among the Indian target audience. The sponsorship itself was poised to create best ever visibility and drive for Coke, thus, creating significant threat for the other cola player in market, Pepsi. The immediate reaction to the imminent competitive pressure typically is to follow suit and try to beat the competition at their game. The Pepsi brand team on the other hand, instead of trying to find alternate sponsorship slots, stuck to their point of difference (positioning of youthful rebellion), which was relevant to their target consumers and well differentiated in the category. This ensured that Pepsi was playing to its strengths in the market while trying to tackle the enormous Coke sponsorship challenge. They launched the breakthrough ‘Pepsi, nothing official about it’ campaign that ran in parallel to the cricket world cup. The campaign showcased iconic cricket player preferring Pepsi because there was nothing official about it (i.e., staying true to the youthful rebellion positioning while taking

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on Coke, the official drink for the cricket world cup). In the competitive context, it proved to be an amazing campaign that built the desired brand equity for Pepsi, yet differentiated it from what Coke was doing in market. Needless to say, the campaign was successful in helping Pepsi maintain and strengthen their strong cola market in India at that time.

Case Study 2B: Moov vs Iodex Another example from India is what the launch of ointment brand ‘Moov’ did to the existing market leader. In the pain relief balm category, Iodex (a Smithkline Beecham brand) was the market leader commanding a staggering greater than 70% share at one time. A local Indian company, Paras group, launched their pain relief balm brand in this category and called it ‘Moov’. They very well understood the competition and one of its major weaknesses—Iodex was greasy and black, which led to staining of clothes. Armed with this understanding, the Paras group created a significant point of difference for Moov in the minds of consumer as a white, non-greasy and effective ointment (relevant benefit for the target consumers and sufficiently differentiated in the category context). Hitting the D quadrant, pain relief performance became a point of parity and not being black and greasy became the meaningful point of difference for Moov. Again this is an example of the brand manager understanding the competitive context in which his or her brand would be playing and ensuring that the brand offering is meaningfully differentiated. The results were clearly visible. Staying true to its point of difference as the non-greasy yet effective ointment, Moov displaced Iodex from its leadership position and forced it to a low market share consequently.

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Case Study 2C: CNN CNN, one of the top news and media brands in the world, has had to withstand intense competitive pressure, especially in today’s environment with high media saturation taking place. The brand has traditionally thrived on reinventing how news is bought home to the viewer. Typically the viewers know CNN as a brand of trust, which they can depend on for authenticity and reliability. CNN has differentiated itself as the news channel of choice that innovated broadcasting news in different ways to its viewers. For instance, CNN was the first news channel that started the concept of 24 hours news coverage and broadcasting. As the media and news market saw an exponential increase in new news channels entering the fray (like CNBC, Fox News, Al Jazeera, etc.), the brand managers at CNN ensured that the brand continued to build on its distinctive positioning and that it meaningfully differentiates itself from competition through innovation in how news is bought to its viewers (i.e., staying in the D quadrant by understanding what competition is doing and ensuring that CNN sticks to its point of difference)—the concept of aston bands delivering rolling news headlines at the bottom of the TV screen or through first-of-its-kind live coverage of the Gulf War or even 9/11 attacks on the US soil. Thus, the best way for CNN to ward off the threat posed by new entrants was to continue to innovate and devise newer offerings for taking news to its viewers and consequently differentiating itself meaningfully in their eyes. This forced competition to play to CNN’s strengths as they tried to reapply what CNN would start doing. Moving forward, the CNN brand team is carrying this point of difference forward by venturing into launching other specialist news channels like CNN

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Headline News channel and CNN for financial news – catering to specifically targeted viewers to prevent them from moving to other channels—while at the same time not compromising CNN brand positioning and staying true to its point of difference (POD).

Case Study 2D: Ben and Jerry’s vs Haagen Daz Any talk of competition is incomplete without the mention of Ben and Jerry’s vs. Haagen Daz. Ben Cohen and Jerry Greenfield, the founders of Ben and Jerry’s, built the brand on a proposition of socially responsible, fun and lively positioning. The brand actually brought this positioning to life through a variety of clutter-breaking marketing activities (like staging free summer movie festivals, free cone days), through genuine social responsibility activities (Ben and Jerry foundation using 7.5% of pre-tax profits for community projects) and instituting positive employee welfare programs (paid family leave, stock options, daily free tubs of ice-cream etc). These three principles helped the brand connect with its consumers who saw it as a genuine player out there to make a positive difference for the society where it is selling its products; this was something not many corporations would be doing. The brand stayed true to these three founding principles even when it faced severe competitive onslaught by the big icecream brand Haagen Daz. Ben and Jerry’s ensured that it stayed within the quadrant D (i.e., maintaining its point of difference despite what competition was doing), which helped the brand gain valuable positive mileage with its target consumers. When Haagen Daz tried to use its financial muscle and scale in the ice-cream business to limit Ben and Jerry’s distribution, it generated negative public relations for Haagen Daz (kind of a David vs Goliath story) while at the same time

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Ben and Jerry’s gained valuable word of mouth publicity as the good, socially conscious underdog brand being bullied by a big corporate. This mileage consequently helped Ben and Jerry’s to continue to grow in sales. This happened because consumers connected with the brand and Ben and Jerry’s did not react negatively to Haagen Daz antics. They did not participate in any form of mudslinging but focused on leveraging the right legal channels to challenge Haagen Daz. This further strengthened the bond Ben and Jerry’s had with its consumers, which consequently not only strengthened its differentiation from the big player but enabled it to comfortably defend and expand its turf without the financial clout it would have otherwise needed.

Case Study 2E: Evian Evian, a top drinking bottled water brand, competes with a whole variety of products and brands ranging from free available drinkable tap water, most soft drinks that are cheaper than its packaged water bottle and even other drinking bottled water brands, most of which are significantly cheaper than Evian. It’s not the product that differentiates and sustains the brand but it’s the differentiated and consistent ‘purity’ positioning that the brand managers have built and sustained for Evian. Evian water is positioned as ‘pure’ because water bottled under the brand Evian spends at least 15 years slowly filtering down through a protected aquifer within the Alpine mountains. Many Evian advertising campaigns leveraged the selling line ‘Untouched by Man. Perfected by Nature’. Evian has consistently endeavored to keep the brand in quadrant D (i.e., consumer-relevant ‘purity’ positioning differentiated from competition) no matter what competition is

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doing. Thus, even if competition is driving variety of product innovations, Evian has not launched a line extension— (multiple flavors or sparkling water format). The drink continues to be bottled at one source (Evian France) and that purity is what consumers continue to pay premium for. Thus, understanding what the competition is doing and ensuring that the brand Evian continues to have a meaningful and differentiated proposition helps the brand managers in building an evergrowing and loyal consumer base.

Personal Brand Building A similar analogy to personal life is also true where it is critical that we as individuals understand and define our ‘positioning’ and stay true to it no matter what social pressure (competition) we are under, i.e., we need to ensure that our brand also stays in quadrant D during the ups and downs of life. Let us take job interview as an example; they usually tend to be very competitive where you want the ‘consumer’ (the interviewer in this case) to accept you among all other competing brands (the interviewees). For simplicity sake, let’s assume that the final selection is to be made between you and candidate X. Here, both of you have demonstrated the requisite technical and personal skills suitable for the job. You come to know that the other candidate had extraordinary sports record having played at national levels in tennis, while you are not much of a sports person. In this situation where your competitor is sure to leverage her sports background as an edge over you, you need to hold your fort. Maintain the D quadrant thinking— understand what competition is doing and maintain your point of difference. Instead of trying to talk about how you had participated in cross-country run for your house in school, you would be better off focusing on your own point of difference

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whether it’s captaining the university debating team or having worked for a non-governmental organization, which is your point of difference. This will ensure that in your consumer’s mind (the interviewer) you are able to demonstrate your individual superiority by playing to your strengths, instead of trying to catch up with what competition is doing. Thus, staying true to what you really are and trying to market that with excellence is what will give you the best chance of getting the job offer rather than getting perplexed at what others are doing and hence losing focus.

CHAPTER

4 PRINCIPLE 3: MANAGE YOUR BUDGETS WITH SCARCITY MENTALITY

People actually ask me why I bring in projects on budget and on time. It seems I am not living up to the fashionable genius role. I really enjoy when a project gets down to the wire and through sheer force of will and faith in our process, we cross the goal line, when most people thought it impossible. – Curtis W. Fentress A budget tells us what we can’t afford, but it doesn’t keep us from buying it. – William Feather

Principle 3: Manage Your Budgets with Scarcity Mentality

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A

part from excelling in marketing, as a brand manager, you are the business owner and hence managing the budget is important to ensure that the right plans get the right spends over the financial year to help you build your brand. Like any other resource in the world, the money you have will be limited and you need to be judicious about spending it. The objective for any brand manager is to create more value for the brand and that will require investments to be made, whether behind product development, packaging, communication, trade deals or consumer promotions. A star brand manager always ensures that the money being invested is always creating more value for the brand in the long run. Taking shortterm decisions like over-promoting your offering to meet fiscal year sales target can badly hurt the brand equity and hence the

42 The 7 Principles of Brand Management

brand value in long run. The key therefore is to operate with scarcity mentality and judiciously evaluate each dollar spent. Having scarcity mentality will ensure that you evaluate all your plans with ROI (return on investment) intention and make right choices to ensure that the brand grows. You would evaluate each decision to spend your dollars with the question, ‘Is this the best way to spend money on marketing my brand or is this money better spent elsewhere to generate greater returns in the long run?’ Typically you will take a 3 to 5 year horizon to look at the net present value of the returns versus the expenses on the project you are leading for your brand. This kind of mind-set for instance will help you evaluate whether your money is better spent in correcting price by, say, 5% or using that amount to support a second line of advertisement on the brand and hence create more value for the company. This happens because incremental sales value for incremental marketing spends follows the law of diminishing returns as in the graph below:

Incremental Sales Value ($)

Point of diminishing return

Activity A

Activity B

Activity C

Incremental Spends ($)

Fig. 4.1

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As you can see, the decision to spend every incremental dollar should be evaluated from its potential to generate incremental sales. In the above scenario, with limited resources at disposal, you are better off to maximize your gains from activity A and B before venturing into activity C. For instance, say, you are launching a fairness cream in market and your target audience for the same is 20 to 30 year-old females. Their habit profiling shows that 80% of them watch reality dance shows on TV, another 60% listen to FM radio and say another 60% are regular readers of Femina magazine. Let’s assume that you have $1 million marketing budget for the objective of driving awareness of your product among these women. Based on their media profiling, you find that spending say $700,000 on TV gives you say 60% reach whereas spending $1 million all on TV gets you 70% reach (law of diminishing returns). On the other hand, leveraging the remaining $300,000 on radio or print gives you incremental 20% reach. Thus, you would be better off spending $700,000 on TV and $300,000 on radio to get 80% reach rather than spending all $1 million on TV with 70% reach. This example, though a simplification, gives you an idea as to how you need to judiciously evaluate each dollar being spent to maximize returns for the brand. Identify the point of diminishing returns for the planned activity spend and use that incremental budget on another plan that will generate greater returns. The importance of managing budgets with a scarcity mentality is delved at length in The Art of War by Sun Tzu: “It is only one who is thoroughly acquainted with the evils of war that can thoroughly understand the profitable way of carrying it on. The skillful soldier does not raise a second levy; neither are his supply wagons loaded more than twice. Bring war material with you from home, but forage on the enemy. Thus, the army will have enough food for its needs. Contributing to maintain an army at a distance causes the state and people to

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be impoverished”. Further, to make a war profitable, Sun Tzu talks about right spending: “Therefore, in chariot fighting, when ten or more chariots have been taken, they should be rewarded to those who took them first. This is called using the conquered foe to augment one’s own strength. In war then let your great objective be victory, not lengthy campaigns”. Thus, the marketing activities that you support need to generate enough value to fund more campaigns. It is possible to get an understanding of the potential value that a particular marketing investment can generate by looking at historic trends in your category or if it’s a new product/category launch, then you need to study historic trends in a benchmark category or geography, the learning from which will be applicable for you and your brand campaign. A typical trend analysis of different brand building spends can look like the following table: Hypothetical Data

OND 07

JFM 08

AMJ 08

JAS 08

OND 08

JFM 09

AMJ 09

JAS 09

OND 09

JFM 10

Volume Share

5%

6%

7%

7%

6.5%

6.5%

8%

9%

11%

11%

Value Share

7%

8%

9%

9%

8.5%

8.5%

9.2%

9.8%

11.5%

11.5%

TV Campaign

Yes

Buy 1 get 1 free Print Campaign 10% off Trade Deal

Yes Yes Yes

This hypothetical table for simplicity looks at 10-quarter performance measured as volume and value share in market. This is mapped with the variety of activities behind which the brand building investments were made (TV campaign, print campaign, buy 1 get 1 free promotion, and 10% off for trade).

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To explain the trend analysis idea, it’s assumed here that only one activity/investment has happened at a time. In reality, though the activities would be overlapping and hence you will need to look at recurring patterns to form your ROI conclusions. In the table above, we see that TV campaign has had a direct correlation to volume and value share increase. Print campaign, on the other hand, has been ineffective in building market share. A promotional (buy 1 get 1 free) offer helps build trial, i.e., increase in volume share is more than the increase in value share. Finally, a trade deal (10% discount to distributor) at best helps you sustain market position. With this kind of an understanding of your category or a benchmark category, you can take informed decisions as to where your marketing spend priority should be, depending on the objective. For example, if you see intense competitive activity happening, probably running a short-term promotion (buy 1 get 1) will help you retain your consumers and prevent them from shifting to competition. On the other hand, if you see your brand distribution and availability dropping, then you would rather spend your incremental money on driving distribution via trade deals. Of course, in this hypothetical case, as a base case for supporting your brand and keeping its awareness fresh in the minds of the consumers, you will want to prioritize spends on a good TV campaign. Thus, depending on the situation, this kind of a trend analysis will help you make the right investment choices for the brand that generate positive ROI.

Case Study 3A: Starbucks Starbucks, one of the top coffee chains in the world, has had the fortune of having brand managers extremely adept in their budget management. Truly operating from a scarcity mind-set,

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the team thought through choices in their marketing strategies. Defying standard retailing convention, instead of spending their money on TV advertising to build equity, they choose to spend on covering an area with multiple stores, thus, increasing total revenue and market share. This is contrary to what

Incremental Sales Value ($)

Point of diminishing return

Open New Store

New Flavor

ATL support

Incremental Spends ($) For Starbucks

Fig. 4.2

established retailing houses did at that time, i.e., not locate stores nearby so that they do not cannibalize into sales of existing outlets. For Starbucks, covering a particular area with a number of stores resulted in reducing supply costs and also enabled managing the stores become cheaper, thus, more than making up for sales lost to cannibalization. This also increased visibility of the brand ‘Starbucks’. Thus, they were able to fund for expansion from internal cash flow, resulting in a really judicious use of their resources and money. Starbucks spends just 1% of its revenues on marketing and advertising (compared to more than 10% for other companies of same size) and relies more on clustering and good word of mouth their brand generates. Most of the money is spent on store expansion and launching new products and coffee flavors, generating far

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greater ROI for them and without doubt today, Starbucks is one of the most successful brands in the world. Having maximized through this strategy and with the emergence of many competing brands, only recently have they started leveraging print and outdoor media campaigns to drive the Starbucks brand.

Case Study 3B: Amazon.Com Budgeting is not just about spending more or spending less, it’s also about spending right. Amazon.com is one prime example of this. ‘Spending right’ is what helped Amazon.com survive the dot-com bust and go on to become one of the most successful brands of the new era. It was in mid-1990s that the brand Amanzon.com was born as an online bookstore. To sustain and grow, the brand ‘Amazon.com’ had to be built and awareness driven across consumer spectrum. Internet as a medium ensured that what was known as ‘availability’ in marketing parlance was no longer an issue. Anyone, anywhere in the world could have access to Amazon.com online. The critical aspect, however, was to ensure that the consumers get to know the brand and its benefit. Since the brand started as a small business, it did not have huge marketing budget to launch big TV campaigns and drive its presence and awareness across consumer segments. Unlike many other dot-coms of the era, Jeff Bezos ensured that the money the brand had was spent right. Instead of highexpenditure TV campaigns, he focused all the resources on what was called ‘affiliate marketing’. This was an online version of ‘distributor’ model made simpler and effective. The idea was to have different sites promote Amazon.com and in return get a percentage incentive for the sales on Amazon.com coming through their site. It was like a win-win model for both the parties. Amazon.com was able to snowball its presence and

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visibility on Internet, so much so that majority of the sites would have products to sell via Amazon.com. Partner sites benefited because not only they got a margin cut in the sales (3.5%), but they were able to offer more value-added services to their visitors; for instance a health and wellness site could sell yoga and fitness books, a business site could sell corporate and business books, a women’s site could now easily sell any self-help or other relevant books. In the 1990s itself, this affiliate program expanded across hundreds of thousands of sites, making Amazon.com one of the most visible brands on the Internet. This success was thus, the result of focus and well-managed budgets, i.e., money spent right on giving a part of the margins to the partner sites instead of intensive TV campaigns.

Case Study 3C: Dell Dell is a good brand to study how adroit budget management led to right investments and building of a business model that helped a university student start-up compete with the likes of IBM. Michael Dell understood how best he could differentiate his offering and minimize his costs by making selective spend choices, thus, offering better value to his customers. A good understanding of what the consumers wanted helped him make the right choices for building the brand ‘Dell’. Unlike IBM he offered his customers the choice to pick and choose the features they wanted in their computers from Dell. This was taking customization to technology front. The customers could actually order these specific computers over phone and the product was actually couriered to their homes. There were no distributor or retail shop margins in between. So the margins saved could be passed on to the consumers. Even in terms of inventory management, Dell only ordered what the customers wanted instead of stocking up and blocking warehouse space. Thus, the Dell offering became very

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distinctive as a result of good choices the brand manager made to spend and drive maximum returns consequently. Spending on customization while removing spends on intermediate margins for dealers, shops etc. enabled Dell to create a new brand that took on the mighty IBM. Today Dell is the among the top computer vendors in the world and one of the biggest PC brands in the globe. It is interesting to note that in terms of design or working efficiency, Dell computers might not be the best. However, since Dell customizes its computers for the consumers and saves money, it has become a strong brand. Thus, right spending and budgeting for what is relevant to the consumer drove brand positioning while eliminating non value-adding spends helped Dell become one of the top brands in the world today.

Case Study 3D: Domino’s Pizza Talk about right spending and budget management, Domino’s Pizza as a brand offers copious insights. The brand was launched at a time when the market was saturated with a variety of pizza shops. So competing on price or quality would not really differentiate the brand. Based on consumer understanding, it was found that delivering pizzas fast was a top unmet need for home-delivered pizzas. Thus, the whole proposition of Domino’s was created around that. The brand operated with scarcity mentality and judiciously cut the non value-added costs to be able to deliver the proposition it promised. All budgeted expenditure happened on activities that would help it stay true to the ‘fast delivery’ proposition to consumers. Thus, instead of spending on mega advertising campaigns or innovative toppings and menu designs, the brand focused on developing a system that would enable it to not only make pizzas efficiently but also deliver them in the most optimal

50 The 7 Principles of Brand Management

manner. Despite the debts and financial difficulties that the brand ran into, unlike other pizza companies, it continued to invest in people training as it was critical to bring its proposition to life. Apart from training, considerable expenses for Domino’s go into developing innovative solutions for faster pizza delivery. One of the issues that home-delivered pizzas faced was that the box in which they were delivered would get soggy and weakened due to the food warmth and moisture. Staying true to their proposition, Domino’s invested in developing sturdy pizza boxes. They were thick and corrugated and hence helped maintain the heat without running into problems of soggy, weak boxes. This improvisation enabled superior homedelivered pizza experience for the consumers. In the kitchen, they started the concept of a spoodle—it was basically a spoon that doubled up as a ladle, thus, increasing the efficiency of the pizza-making process. For the pizza oven, Domino’s invested in mesh trays instead of conventional wooden or stainless steel trays to get pizzas to cook more evenly faster. They also introduced the patented heat wave hot bags, which used electric heating system to keep pizzas hot during delivery. Even the raw material procurement system that Domino’s developed for its stores ensures superior efficiency. The stores do not need to order individual ingredients like flour to make the dough or individual topping ingredients. Instead, to save time, they order prepared ingredients from their suppliers. Thus, based on its consistent brand positioning, Domino’s operates with a clear focus to cut wasteful expenditure while at the same time ensuring each dollar is spent only on those elements that create value for its end consumers.

Personal Brand Building Same principle will be true if you put this discipline while treating yourself as a brand. Again, managing the ‘budgets’ and trying to optimize the return on whatever you spend your hard-

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earned money on will ensure that you reap good dividends. For instance, let’s assume that you have had a stellar year of business results and your company has decided to reward you with a hefty bonus. You had always dreamed of owning a Mercedes car and your bonus amount is just right one to top up your savings so far to help you buy one. The question is, should you do it or not? Well, you should evaluate this in context of what brand you are. If you are in a business that requires you to interact with high net worth individuals and hence you need to project the right image so that they can have confidence in you, then going ahead with the purchase might be a good idea. The returns from loyal clients in the long run will more than payout for the investment you will make. On the other hand, if you have a family to take care of and you being the sole earning member in the family, then it might make sense not to buy the car yet and invest the bonus amount in instruments that can guarantee a safe 5–6% return. This will generate steady cash flow for you and give you the peace of mind that your family is well taken care of. Thus, in both the situations, depending upon the context of ‘your brand’ taking the appropriate decision maximizing the value creation will help strengthen your character and brand.

CHAPTER

5 PRINCIPLE 4: KNOW THE HURDLE IN YOUR CONSUMER’S LIFE THAT YOUR OFFERING SMOOTHENS

The individual choice of garnishment of a burger can be an important point to the consumer in this day when individualism is an increasingly important thing to people. – Donald N. Smith (President of Burger King) The consumer’s side of the coffin lid is never ostentatious. – Stanislaw J. Lec

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W

ith this fourth principle, we will now be entering the bottom half of the hour glass model. The first three principles so far were from the top half and more about the building of skills and attitudes of the individual brand manager. The next three bottom half of the hour-glass principles will now concentrate on the critical elements in developing a superior consumer marketing plan. The plinth on which a marketing plan stands is made of insights from the lives of the target consumer for whom the offering is made. Knowing who your target consumer is ensures that you have the right focus and you are able to make the right choices in terms of what product features to have, what distribution channels to maximize, what kind of promotions to run and what kind of PR plan and influencers to utilize. This goes beyond just knowing how the consumer

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behaves. Instead the objective of this principle is to explain why the consumer behaves the way she does. Gaining insights into the needs of your target consumer will require you to walk in her shoes to be able to leverage those insights for a tangible offering that creates a positive difference in her life. Insight generation can be structured as a multistep process. Step 1: The Consumer What – Understanding what the consumer does or wants to do. This refers to a typical observable everyday fact or activity. For example: I go for a jog everyday; this is a simple fact that can be observed. Step 2: The Consumer Why – This basically refers to the need driving the observation in step 1. This could be anywhere in the Maslow’s hierarchy of needs (from baser needs to satisfy hunger, security to higher order needs like well-being or happiness). For our example in step 1 above, it could be a variety of reasons—because it keeps me fit or because it keeps me active for the whole day. Step 3: The Hurdle – This is what generates the insight lever that is used to develop marketing plans. It refers to the impact that particular want has in the consumer’s life. It sort of revolves around the reason why the consumer is not able to experience the ideal ‘what’. For our example in steps 1 and 2 above, the hurdle could be: it’s so difficult to get up early in the morning everyday or I just don’t have enough time. This hurdle, thus, leads to new concepts and ideas and offers an opportunity for consumer delight. The stronger the hurdles, the higher the consumer ‘aha’ it can help create.

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For example, Dettol, one of the iconic brands, has been hugely successful with its ‘absenteeism’ campaign, which showcases how by using dettol soaps kids are protected from infection and hence can attend school without absenteeism. Looking at this from our insight generation process, the three steps will look as follows: 1. The Consumer What: My kids go to school regularly. 2. The Consumer Why: So that they can learn and educate themselves. 3. The Hurdle: But the kids fall sick and end up missing school. Thus, going by simple observations and understanding the reason why and the associated hurdle gave Dettol valuable life insights that helped it play a critical role in consumer’s life—by enabling the kids to attend school regularly and thus, continuing with their learning uninterrupted. This insight has enabled Dettol establish itself as a top brand in many markets. Finally, before going ahead with your marketing plan for the consumer segment, you have identified and the insights you have unraveled; always remember to do a sense check on two fundamental consumer parameters: 1. Is this consumer segment sizable enough to meet my growth and revenue targets? That is, the particular target consumer group should be big enough in the population to make economic sense for your business. 2. Do I have the capability to win with this consumer segment? That is, both in terms of organizational capability to take the product to the target consumers as well as the design of the offering for which the target consumers have enough traction, will the consumers have enough pull for the brand offering?

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A yes to both these questions will ensure that your marketing plan will be sustainable and built on a strong foundation. The importance of knowing the consumer and tailoring the plans to their needs is well documented in the Art of War by Sun Tzu, as follows: “Do not repeat the tactics which have gained you one victory, but let your methods be regulated by the infinite variety of circumstances. Military tactics are like the nature of water which runs from high places and hastens downwards. Water shares its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe that he is facing. He, who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain”.

Case Study 4A: Fair and Lovely A good example of consumer-insight-led victory in marketing is the brand Fair and Lovely in India, a fairness cream brand from Unilever. The brand managers for this mammoth brand constantly leverage consumer insights around fair skin and how it is indicative of you being perceived superior by others in their marketing campaign and hence the brand commands market leadership in India. They do not simply sell a fairness cream product. The brand understands the consumer and connects with her. They tapped into the insight that fair skin is considered an asset, which can become an enabler for women. This was leveraged across a variety of life insights to build the brand. A typical life insight that Fair and Lovely fairness cream maximized looked as follows: The Consumer What: I want a good job. The Consumer Why: So that I can support my parents financially, a role traditionally given to male members of the family.

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The Hurdle: I am scared that I will not be seen as competent enough in the job interview. This life insight is integrated with the product to showcase that by using Fair and Lovely, you get fairer skin, which improves perception of others about you. Because of fair skin, others will think that you are competent and hence that gives you the confidence to face a job interview (i.e., you look good and hence you face the interview with confidence). The beauty here is how a relevant life insight is maximized by the fairness cream category. They leveraged similar insights over time and the promise of ‘fair skin opening doors for you’ is what resonated with the consumers and consequently the brand has risen to record shares across the Indian market. As evident here, it was just not enough to have a good product. The brand team had to walk in the shoes of their target consumer and understand her basic motivations in life and thus, created a big brand.

Case Study 4B: Folgers Coffee The billion dollar coffee brand, Folgers created path-breaking marketing campaigns based on good consumer insights in Unite States. Initially the brand was established on the platform of good taste and flavors. The brand talked about Folgers coffee taste and flavor as the best, like a fine coffee. However, around the mid-1980s, the brand was stagnating and needed to be revived through a fresh marketing campaign. The brand managers went to consumers and tried to understand the basic life motivations so that they could unearth some relevant insights. They finally came up with the idea of not just marketing the coffee based on flavors. Instead, they understood that their target consumers consumed coffee in the mornings to

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kick start their day. The insight was built on fundamental consumer understanding as follows: The Consumer What: I like to be full of zest and energy. The Consumer Why: This keeps me active as I go about doing my work. The Hurdle: It is toughest to have that zest and energy when I get up in the morning. This understanding of a relevant life insight was then mapped with the Folgers coffee campaign, resulting in the most successful ‘The best part of waking up is Folgers in your cup’ initiative. The campaign highlighted how the Folgers coffee aroma enables you to kick start the day, i.e., get that zest and energy when you get up. The campaign worked wonders for the brand, revitalizing it from stagnant market share.

Case Study 4C: Pampers Pampers, one of the top billion dollar brands in the world today, has been built on thorough understanding of its target consumer, the baby and the mother. This has been mapped well across all communication platforms and product design. For instance, the diaper sizes are categorized as per baby’s stage of development (for new born baby, for active baby, etc.) and not the conventional (small, medium, large) sizing methodology. This maps with the age group and makes it easier for the shopper to choose the right size. By positioning the sizes more on baby needs rather than number helps the brand connect with the parents. This thinking also drives innovation for the brand. For instance, Pampers positioned and designed the diapers for

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infants as ‘push up pants’ since they have grown beyond the traditional ‘toddler’ definition and are more active than ever. The constant consumer focus has helped Pamper to innovate and come up with breakthrough marketing campaigns. For example, a basic need that Pampers brand team maximized was as follows: The Consumer What: I want my baby to have uninterrupted long sleep at night. The Consumer Why: So that she grows fully (both physically and mentally). The Hurdle: Unfortunately she gets up when the nappy is wet or the diaper needs to be changed during the night. This insight gets the consumers to think about Pampers in a different light. Coming from a superior absorbing product, that benefit is relevant for uninterrupted sleep insight and links well to the need of the mothers to see their babies grow tall and develop mentally. Pampers campaign, thus, talked about how Pampers helped babies get full night’s undisturbed sleep, which is critical in helping the baby grow.

Case Study 4D: Louis Vuitton Louis Vuitton (LV), one of the world’s top luxury brands valued at around $20 billion, has tapped into consumer understanding and insights to become an aspirational brand. The brand was launched in the late 1800s as LV-branded luggage and suitcases for travelers. During that time, travel and tourism industry was starting to pick up and was limited to the top end of the socioeconomic class. Travel then was considered a luxury afforded by the wealthier section of the society. Consequently, the brand LV became a symbol of status and

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prestige, leveraging the core consumer need to differentiate them from the rest, i.e., a brand that helped them showcase how they are different from others. So the brand taps into a basic human need as follows: The Consumer What: I belong the socioeconomic class A+. The Consumer Why: I am among the top income/wealth groups in the world. The Hurdle: It is difficult to showcase my prestigious socioeconomic status in everyday action. This basic class-conscious human insight helped the LV brand to extend to shoes, apparels and bags—a highly extended brand with strong consumer pull. All of this was possible because LV was able to position the brand not just on a category-specific functional need (like storage, strength etc. for suitcases), instead it tapped into deeper emotional human needs and insights to connect with the consumers. This gave the brand the leverage to extend across seemingly unrelated categories, which very few brands have been able to do. The brand continues to maintain its prestige positioning even today via celebrity endorsements so that it can continue to leverage the luxury and differentiation human insight and keep the brand aspirational.

Case Study 4E: J&J Johnson and Johnson, a trail blazer global brand, was launched and built around superior consumer understanding. The Johnson and Johnson products are designed as a result of thorough consumer understanding. Launched in the late 1980s, the brand for the first time introduced ready-to-use surgical antiseptic

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dressings. This addressed a core consumer unmet need to prevent air-borne germ infection for the first time. This was a significant innovation based on understanding what would make a genuine difference in their target consumer’s life. They followed this up with other equally insightful products meeting unmet consumer needs—Band-aid, Johnson’s baby cream to name a few. All these products were designed based on understanding of consumer needs and were commercialized in an ethical manner. The innovations were extremely insightful as can be seen below for surgical anti-septic dressing: The Consumer What: Injury/wounds tend to get infected very often. The Consumer Why: This is because of air-borne germs. The Hurdle: Unfortunately there is no easy way to prevent those germs from infecting the wounds. Thus, the antiseptic dressings created a meaningful difference in the consumer’s life and hence the brand even today has a very loyal consumer base. In mid-1900s, the founder of J&J company Mr. Robert Johnson developed J&J company principles, which spelled out that the people associated with J&J need to put consumers first and stockholders last. This was path-breaking since most of the corporations are focused on delivering shareholder value, which in the long run could compromise on consumer value. This premise continues to help build and sustain J&J as one of the most powerful brands today. The Consumer What: There are so many corporations wanting me to buy the products they offer

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The Consumer Why: This is because they want to generate profit out of the sales. The Hurdle: I wish their focus was my benefit and not just making money The way the company handled their painkiller brand ‘Tylenol’ crisis is exemplary. The packaging of Tylenol tablets were somehow tampered with, resulting in the presence of cyanide in the packs, leading to death of 7 people in Chicago. The company understood that it needs to maintain the trust with its consumers who would understand the reasons for this fiasco if the company took the right corrective actions. Tylenol brand team did not deny the problem or hide behind any excuse. Instead they took the responsibility upfront and recalled millions of tablets. They swapped free capsules for the tablets and initiated a consumer understanding-based innovation process. This resulted in development of tamper-proof sealed packaging, which the consumers appreciated. In fact other pharmaceutical companies later adopted tamper-proof packaging as well. The market share of Tylenol went down from more than 30% to single digits during the crisis but because of the consumer understanding-led action, actually bounced back to initial levels within months. Thus, the consumer focus helped the brand J&J manage toughest of crises that one of their products had landed into.

Case Study 4F: MAC (Make-up Art Cosmetics) MAC (Make-up Art Cosmetics) offers great learning as to how a new brand in a complex fast-moving consumer goods environment not only establishes itself but also goes on to become the brand of choice for its consumers, all because of focus on what the consumer wants. Launched as late as mid-1980s, the

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brand took a phased marketing approach. Phase 1 focused on influencing the influencers in the cosmetics industry. This included celebrities, fashion models and photographers, the celebrity make-up artists etc. The key insight they tapped into for this target segment (celebrities) was the fact that the celebrities or other influencers having made it this far were always on the look out to give something back to the society. This could be articulated as follows: The Consumer What: I buy top end beauty and cosmetic products. The Consumer Why: Being a celebrity, I have to maintain my looks in line with the latest trends The Hurdle: This makes me feel guilty about spending so much on myself and not giving back to the society. Thus, the target celebrity consumers are socially conscious and want to assuage the guilt of ‘pampering’ themselves by somehow giving back to the society. This insight provided a distinctive leverage to MAC. The brand launched within the fashion industry, promising good quality product with a commitment to society, i.e., they committed to spend a part of their earnings for social causes (for instance, earnings from their Viva Glam Lipsticks are donated to MAC AIDS Fund to support individuals and children living with HIV and AIDS). This got them noticed with the right influencers (celebrities, models, make-up artists, fashion photographers, etc). Without turning to high-spend advertising, the brand differentiated itself and built considerable word-of-mouth influence with their celebrity customers. This slowly gathered steam and as more celebrities (Paris Hilton, Nicol Ritchie, Elton John, etc.) were seen using MAC products, it automatically created an aspirational appeal for the masses.

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As the brand started mass marketing, they leveraged a couple of insights as drivers for mass consumer segment. Firstly, when it comes to make-up and cosmetics, consumers want to get the glamorous look that celebrities have, which is a kind of ‘gold standard’ for them. The Consumer What: I use cosmetics The Consumer Why: So that I look more beautiful The Hurdle: Celebrities have the best beauty look, which is very difficult for me to achieve. This is where the phase 1 of marketing helped them since consumers had started associating MAC as a brand of cosmetics that celebrities prefer and hence it became a brand of choice for those who could afford it. As a result, once mass marketing started, the brand had a considerable and credible buzz about itself and thus, gained widespread consumer acceptance. Secondly, when buying cosmetics, the consumers need someone who can explain the different looks that are ‘in’ and help them decide what suits them best. The Consumer What: I use cosmetics. The Consumer Why: So that I look more beautiful. The Hurdle: It’s very difficult for me to decide what kind of ‘look’ will suit me the best. Building on this insight, the team opened MAC studios with knowledgeable ‘Retail Artists’ on board. They advise the consumers about the latest trends in fashion industry, how to apply different make-ups, or eye brow shaping, thus, giving the consumers a great cosmetic buying experience.

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Thus, armed with understanding of its target consumer aspirations, MAC was able to break barriers and establish itself with authority as a top make-up cosmetics brand despite being a late entrant in the category.

Case Study 4G: Hello Kitty Hello Kitty, a phenomenal brand, has defied conventional marketing thinking. The more the brand diversifies, the more it grows. The brand taps into human insights that enable it to generate appeal across age segments and across consumer categories. It understands that in the world which has a lot of harsh, tough masculine elements in it, the consumers have a need for expressing their cuteness and softer side. This is the very attribute that the brand Hello Kitty brings to them. The Hello Kitty brand today endorses a variety of products ranging from television sets to watches to bags to mobile phones and even cars. The brand appeal is not restricted just to kids but also extends to adults who want to show their cute, soft side. The Consumer What: I routinely use a variety of products. The Consumer Why: This helps me in my everyday activities. The Hurdle: Most of the product designs are very functional and masculine in nature. I wish there was a way to reflect my softer cuter side in these products that I can associate with. This broad consumer life insight is what Hello Kitty has leveraged successfully across the variety of merchandise it endorses. Hello Kitty has a number of celebrity fans like Tyra Banks and Sarah Jessica Parker who have been seen using Hello Kitty

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merchandise. The brand understands this consumer need that it taps into and remains cutting edge by constantly launching new products under its brand franchise. The owner company, Sanrio, launches almost hundreds of new Hello Kitty products every month while phasing out many old ones. The brand lends its cuteness to the products it endorses while at the same time stays in tune with the consumer trends and needs. Thus, even though the brand is more than 30 years old, it still continues to grow with the young consumers simply by updating its range. The Hello Kitty cuteness appeal helps it endorse a wide variety of products it offers to its consumers whom it understands very well. It’s not just the functional product they need but a personality that they aspire to represent.

Personal Brand Building Knowing the consumer is equally important and critical in your personal life as well. Let us take the institution of marriage as an example. In a brand management context, it would mean that you want your spouse to accept the brand ‘you’ and vice versa. Technically meaning that your spouse is the consumer you want to positively influence so that you have a fulfilling and fruitful marriage. Thus, to do that, it’s imperative that you know your spouse well and only then can the two of you truly gel together in marriage. This will require a conscious effort to get to know what the other person wants and does not want. What are his/her aspirations and how you two together can have a common vision for life? As a man, you should be able to understand what your wife actually wants when she is saying or even not saying something. As a woman, again you need to understand, say the need for your husband to have some space and time-out with the ‘boys’. All of this falls in place easily if you go the extra mile to know your consumer well. The end result of this will be a long-lasting happy

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marriage for the two of you. Similarly, this kind of consumer insight mining will help you in managing your kids and babies as well. For example, if your toddler hits you when you tell her ‘no’ for something, you need to understand that she is hitting you not because she is angry or you have done something wrong as a parent. It’s probably because she is feeling overwhelmed and has not yet learnt other means to express the emotions. Hitting her back will only make matters worse. Seen from the baby’s point of view, the understanding can be articulated as follows: The Consumer What: I want to learn about new and different things. The Consumer Why: New experiences arouse my interest and involve me. The Hurdle: It gets frustrating when am not able to explain what I want. Having this insight will help you stay calm and distract her when you see her getting worked up, thereby channeling her frustration onto something constructive.

CHAPTER

6 PRINCIPLE 5: BE CONSISTENT WITH YOUR POSITIONING OVER TIME AND ACROSS PLATFORMS

To you I’m an atheist; to God, I’m the loyal opposition. – Woody Allen I’ve always found paranoia to be a perfectly defensible position. – Pat Conroy

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E

xecution is the only strategy that is visible to the consumer. Thus, as part of your marketing plan, you need to apply due diligence to how the marketing strategy will be brought to life. This becomes critical because it will help you build a longlasting relevant brand for your target consumers. The acid test that separates a star brand builder from others is the ability to develop a strong positioning for the brand and ensuring that when brand is brought to life, the execution elements (whether it is the advertising, the packaging, a PR campaign or in-store visibility) across all consumer touch points are consistent with it. This is then done not just once but continuously over a period of time to ensure that consumers start associating your brand with the desired positioning.

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Creating a relevant and distinctive position in the mind of consumers for your product/brand will create the urge in consumers’ mind to choose your offering over others. So no matter what line extension or commercial innovation you are planning on your brand, as long as it builds on and strengthens the positioning for the brand, you can be assured that you are building a strong brand. Deciding what positioning to take for your brand will require an understanding of the functional as well as the emotional benefits that your brand/offering can provide to the target consumers. Thus, the proposition could be a mix of functional tangible benefits and emotional intangible benefits. The mix of the tangible and the intangible will depend on the brand life cycle and category benefit expectations. The positioning matrix below maps intangible benefits on the Y-axis to tangible benefits on the X-axis. Quadrant A products are typically the categories playing in the conventional ‘commodities’ land. These are the offerings that consumers buy for the core functional benefit and are not loyal to any one particular brand. Typically playing in the low price point bands, these offerings rely on large volumes and low margins to drive sales of their products where there is not much difference between the products on offer. The positioning matrix: High Intangibles

Quadrant C: Brand Creation (Carbonated drinks)

Quadrant D: Brand Connect (iPod)

Low Intangibles

Quadrant B: Void

Quadrant A: Commodities (Wheat, Sugar)

Proposition

Low Tangibles

High Tangibles

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Quadrant B is the one to avoid as it implies an offering with no tangible or intangible benefit to the consumers. Consumers have no reason to buy these offerings and usually are obsolete or not relevant products. Positioning in quadrant C enables brand creation in the truest sense. It connects emotionally with the consumers, even if the tangible functional benefit is low. For instance, brands in the carbonated soft drinks category though low on functional benefit per se connect with the consumers at an emotional (intangible) level. So whether it’s Coke with its ‘Enjoy’ positioning or Pepsi with its ‘Rebel’ positioning, the brands in this quadrant can definitely work around involving consumers and hence connect with them. Finally the quadrant D brands offer both functional as well as emotional benefits to the consumers. These brands are able to successfully create a difference in the life of their target consumers and connect with them at an emotional level as well. For instance, iPod offers the convenience of carrying large quantity of music and videos in a compact player. At the same time, it is also the coolest and the best gadget to own and instills in its owners a sense of pride. Thus, for a brand proposition, you need to understand the category and define the positioning that best drives purchase preference among the target consumers. Defining this proposition and staying true to it will ensure that you are competing in the market place from a position of strength. Having knowledge of the consistent brand positioning will ensure that when you enter the market place, you have already assured yourself of victory. This is something that is advocated by Sun Tzu as well in his military treatise The Art of War: “Hence, the skillful fighter puts himself into a position which

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makes defeat impossible and does not miss the moment for defeating the enemy. Thus, it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterwards looks for victory”. Further highlighting the importance of staying true to your positioning, Sun Tzu mentions, “The skillful tactician may be likened to the Shuai-jan. Now the Shuai-jan is a snake that is found in the Chung Mountains. Strike at its head, and you will be attacked by its tail; strike at its tail and you will be attacked by its head; strike at its middle and you will be attacked by head and tail both”. Thus, staying true to its natural positioning is what ensures its victory. Once you have understood the consumers and category and zeroed in on the positioning for the brand, it becomes critical that it is brought to life across all consumer touch points consistently, whether it’s the communication vehicle (TV, print, and billboard) or the product/packaging design or the in-store visibility design. You will need to evaluate executions across all consumer touch points with two questions: (a) Is this about the proposition? (b) Does it engage the consumers? The answer to these two questions can help you objectively evaluate the execution quality and take suitable corrective actions if needed. Keeping positioning consistent across platforms by evaluating it in the execution matrix below:

Principle 5: Be Consistent with Your Positioning Over Time ... About the proposition

Quadrant C: Equity building

Quadrant D: Equity building and connecting

Not about the proposition

Quadrant B: Suboptimal use of money and resources

Quadrant A: Only engaging

Low consumer engagement

High consumer engagement

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Quadrant A represents executions that manage to engage the consumers but are not about the proposition. Thus, they will entertain but not really sell the product. For instance, Heinz baked beans in U.K. came up with a breakthrough ‘Beans means Heinz’ campaign. The core idea here was to build on the popular Heinz baked beans and drive the point that ‘Heinz’ means ‘beans’, i.e., Heinz = baked beans. The point being to get the consumers to think of Heinz whenever they think of beans. The campaign had a variety of executions from TV, print to outdoors. In one of the print executions, the creative intent was to leverage the word ‘means’ and bring it out in a hyperbolic manner. The advertisement showcased an old lady in a public rail transport system standing next to a seat on which a ‘bean’ is sitting. The drama is around showing that it’s a ‘mean bean’ that does not give an old lady the seat in a public transport. On our two key questions, this execution will definitely come out as entertaining and engaging, being relevant to the consumers. However, looked at from the proposition standpoint (as we defined it), it takes away from the intent of benefit and hence is not really about the proposition. Such an execution will definitely get noticed by the consumers but probably will struggle to build market share. Quadrant B executions that are not noticed by the consumers and not about the propositions are simply wastage of resources

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and will fail to deliver any sort of impact on the consumers or for the business. Quadrant C executions are about the proposition but not meaningfully engaging for the consumers. These will help build the brand benefit association. However, they run the risk of not being noticed by the consumers or creating a negative impact. For instance, a print advertisement for a cooking classes school showcased a dog on a dining table, vomiting. The selling line read ‘Its time to go to school’ and mentioned the cooking classes school details. This is a typical quadrant C execution, i.e., driving home the benefit of the need to go to a cooking class. However, the way the drama plays out, though very different, borders on mocking the target consumer and is low on relevance. This execution drives home the benefit but runs the risk of alienating the consumers. The quadrant D executions that are about the proposition and meaningfully relevant to the consumers are the ones that we need to strive for whether it’s the packaging or the advertisement design that one is working on. These executions connect with the consumers and tell them the benefit of using the brand, thus, translating into sales. For instance, an out-ofhome execution for iPod hi-fi system in a mall had the iPod docked onto a speaker hi-fi system. This was put on displayed in a mall which the passersby could see in the window. The creative difference was that the window glass had been stickered with an effect that created the illusion that it has cracked. To the watchers, it appeared that the sound from the hi-fi system is so incredibly high that it has actually cracked the display window glass.

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Clearly this execution brings the proposition to life in a clutter-breaking consumer-engaging manner. This will be noticed by the consumers and will drive home the benefit as well, thus, translating into increased sales. Thus, to build a strong brand, it is critical that we evaluate our executions across platform with the two questions that we posed earlier and strive to ensure that they are in quadrant D. This needs to be done consistently over time to reap benefits of a strong brand that connects with the consumers. Let us look at a few examples of global brands that have stayed true to this principle of staying consistent on their positioning over time and across platforms to build a strong consumer relevant brand.

Case Study 5A: ESPN ESPN, an iconic brand better known for its sports channel, is positioned as the biggest sports fan. They have taken this positioning and extended the brand into a variety of platforms (the channel, the ESPN magazine, ESPN Zone restaurants, video games and even cell phones where they can deliver sports data and images to fans). Across all the diverse ‘product’ forms and communication, we see that ESPN looks and feels like the biggest sports fan, i.e., it’s positioning in the minds of its consumers has remained consistent, no matter what platform or when the new initiative launch is happening. This is driving value for the company and its consumers. It is also relevant to note that some initiatives and executions will work and some will not, due to a variety of reasons for any brand. It is however the responsibility of the brand builders to

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ensure that across consumer touch points, the positioning remains consistent.

Case Study 5B: Dove This is something that the personal care brand ‘Dove’ does best and has become one of the top mega brands in the world. The brand has extended across personal care categories ranging from skin care (soap, body wash, moisturizers, creams) to hair care (shampoos, conditioners, treatments) and others such as deodorants. Dove, a beauty care mega brand, has positioned itself on ‘soft/smooth’ platform. It is seen as the brand that contains moisturizing milk to make your driest skin/hair soft and smooth. This positioning is consistently brought to life across all the categories that the brand plays in. Even its deodorants are positioned as leaving the underarms feeling soft and smooth. This is one consistent message that it communicates across its product lines. It’s important to note that the brand has extended itself only in those categories where these ‘soft/smooth’ and ‘contains moisturizing milk’ equities are relevant and something that consumers would want, and as a result the brand managers were able to ensure consistency of positioning. This positioning and connect, thus, builds the brand in the minds of the consumers as the product that will help their personal care regimen by giving soft/smooth results.

Case Study 5C: Harley Davidson Harley Davidson, despite not having the fastest or the most environment-friendly or even the best performing motorcycles, is probably one of the top most motorcycle brands in the world. The brand is more a cult that has a huge fan following. People do not buy a Harley Davidson bike to transport themselves

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from one place to another but to associate with the masculine attributes that Harley Davidson embodies. All this has been possible because the brand was able to identify a unique positioning, which was brought to life across all marketing touch points consistently over time. Whether it’s being used by Jack Nicholson in Easy Rider or being featured at the center of the best selling book Zen and the Art of Motorcycle Maintenance, the brand positioning has been consistent and hits you at the right spot. Now this positioning will not necessarily appeal to all bike lovers, but to the intended target audience, it had a dramatic effect over time. This is what Harley Davidson’s positioning did and hence built a very loyal base of consumers as evident from the Harley Davidson clubs where ‘Harley owners like to drive a Harley together’.

Case Study 5D: IKEA The beautiful thing about single-minded brand positioning is that it actually simplifies things both for the brand managers as well as for the end consumers. What better example than IKEA for this. A brand that promises the designs and concepts to give you good looking, functional and economic furniture. Ever since its launch in Sweden to its global expansion today, the brand has been true to this philosophy. The positioning, thus defined, even today the brand ensures that it is able to stay true to it—whether by identifying low-cost sourcing sites or by removing nonvalue-added costs (for instance IKEA designs its furniture in such a manner that for the customers it’s easy to assemble it and hence they don’t have to pay for the additional logistical and assembly costs that other furniture makers charge).

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IKEA even asks its customers to return the packaging so that it can recycle them—again staying true to its positioning. This proposition helps IKEA reduce costs while at the same time leverage its ideas for what is best for customers. All of this happens while IKEA furniture design continues to be true to its founding ethos of simplicity, functionality and minimalism (which we can see in any product being sold at IKEA—a bed or a food container) as against the ornate and opulent living style that some furnishing brands promote. Ultimately this is what the consumers expect from IKEA and continue to visit its stores globally to get it.

Case Study 5E: Absolut Vodka When talking about brand positioning, Absolut Vodka is one brand that can offer loads of learning. In the alcohol category, usually consumers are very loyal to their preferred brand of liquor and hence launch of a new vodka brand had a massive challenge to convert the loyal competitive consumers to its fold. This is exactly what Absolut did, in a ‘Absolut’ way in the United States. The three critical elements of Absolut Vodka positioning that have been leveraged across platforms and over time are (a) Shape and design of the bottle, (b) Sweden, the country of origin and (c) ‘Absolut XX’ advertising campaign. The Absolut Vodka bottle distinctly showcases how it is different from all other liquors in the category. The bottle design reflects clarity, simplicity and perfection—whether it’s the first bottle produced in 1979 or today. Sweden as a country of origin is highlighted on the bottle and created a point of difference for the brand in America during the time when most of the market-leading vodkas were of Russian origin. Finally, the advertising campaign uses the product as the hero and reflects some good adjective about the same. The headline

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consists of two words: Absolut and one more word. The campaigns started with Absolut Perfection and covered a range of executions—Absolut Peak, Absolut Fax, Absolut Wonderland and so on. This consistency of positioning has enabled it to gain significant market share despite being a relatively new entrant in the US market.

Personal Brand Building The same principle of staying consistent to the positioning over time and across platforms is true in our everyday life as well. This refers to having an understanding of ‘who you really are’ (i.e., your positioning) and staying consistent with it across all walks of life. It will lead to your understanding of your strengths and weaknesses and accordingly making a conscious effort to ‘market’ the strengths while addressing your weakness, i.e., consistent with the positioning. Let us look at this in the context of a real-life situation, say, in your endeavor to find the right life partner. As you will agree, this situation warrants that we take a longer term view of things and not look at immediate gain. Thus, it is critical that when you are meeting or dating, you stay consistent with who you are as a person and not get tempted to ‘impress’ via exaggerated promises and claims. This will help the two of you assess each other with honesty and consequently progress the relationship only if there is a genuine match. On the other hand, if you are not really clear about your own positioning and try to ‘please’ the person you are dating, there is a likelihood that things will not work out in the long run if there is no genuine fit. Very often it happens that we forget the bigger picture, and for immediate short-term gratification, do things that are not really in line with our true core. This often leads to our straying away from our positioning

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and consequently your brand faces a tough time. For instance, if you are an ‘out doors’ kind of a person who thrives on adventure and sports (i.e., your positioning), it is best that you understand this and market these very qualities to a potential partner and not try to mold yourself to an indoors movie watching enthusiast to appease your date. Thus, if there is a fit and your partner appreciates your attributes, things will and should progress. On the other hand, if your partner does not prefer those attributes and is looking for a different kind of mate, it again is in best interest of both that things do not proceed further.

CHAPTER

7 PRINCIPLE 6: GET THE RIGHT PRICING THAT OFFERS VALUE IN THE EYES OF YOUR CONSUMERS

Free-market capitalism is a network of free and voluntary exchanges in which producers work, produce, and exchange their products for the products of others through prices voluntarily arrived at. – Murray N. Rothbard Oil prices have fallen lately. We include this news for the benefit of gas stations, which otherwise wouldn’t learn of it for six months. – Bill Tammeus (in Toronto’s national newspaper)

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ne of the four key pillars of marketing is pricing and a star brand manager gives this aspect its due. After all it’s the pricing that determines the value of the offering and actually closes the deal with the consumer. Consumer value perception of your brand is directly proportional to the perceived benefits of the brand (functional and emotional) and inversely proportional to the pricing. Thus, pricing needs to be evaluated in the context of the perceived benefits from your offering as that will determine the value that consumers get from using the brand. Consumer Value = Perceived Benefit/Price Thus, if this value is less than 1 (i.e., perceived benefits are less than the pricing cost), it can be detrimental to brand health and your business.

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This is especially important given that consumers will have the option to compare your offering with all other competitive offerings in market. A star brand manager will always keep the value equation in mind and will look beyond internal financials. She will put pricing strategy in context of competition and category market scenario. Once the right pricing is decided based on competitive and consumer value context, a star brand manager will then strive hard to make it work financially, i.e., work with the supply team to reduce development cost or develop plans to drive the concept and distribution harder to generate sufficient volumes that will justify the price point she is recommending, from a positive return on investment standpoint. As the brand manager, the onus is on you to ensure that your product or service reaches the consumers at the right price, at which they perceive its value. Thus, consumer perceived value from the brand = sum total of benefits (equity, product, packaging, relevant information, usage experience, quality, shop-ability of the product) / (divided by)/ pricing consumer has to pay to get those benefits. As you can see from the equation, the end objective is to increase the perceived value to the consumer. This can be done either by increasing the sum total of benefits or by reducing the pricing in line with the perceived value. In context of the category you are playing in, different brands will have different benefit versus pricing combinations. The table below demonstrates the consumer value equation in context of all the brands playing in the category. The X-axis maps the pricing of the brand relative to the market average or the market leader brand. So a brand at a relative pricing of 0.8 means that it is 20% cheaper than the category average or the

Principle 6: Get the Right Pricing that Offers Value in the Eyes ... 89 Strong market leading brands

1.3 1.2 Relative intent to purchase

Big brands not adapting fast enough

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Brands trying to establish Brands with problems that need to be fixed

0.9 0.8 0.7

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0.8

0.9

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Fig. 7.1

market leader pricing as the benchmark may be. Similarly a brand at 1.0 is in line with category average or market leader pricing while a brand at say 1.1 is priced 10% higher than the category average or the market leader. Thus, the X-axis gives you a quantified measure to evaluate different brands on a pricing scale. You just need to know all the players and their pricing for a similar-sized SKU to get these measures. The Y-axis measures the consumer intention to purchase the brand relative to the category average or the market leader. This will be an indication of the pull or the equity that the brand has in the minds of the consumers. Similar to relative pricing, a brand at say 0.8 will have 20% less consumer pull than the category average or the market leader. A brand at 1.3 will have 30% higher consumer interest to purchase it than the category average or the market leader. You can gauge these measures either by quantitatively asking a statistically valid consumer sample, their purchase intention (i.e., will they like to buy?) for all the brands and then compare the scores accordingly. Alternatively, you could look at the number of

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players in the category and determine the average share per brand if all of them were the same size. Then you can divide the actual market share by the average share to get the relative purchase intent measure. (e.g., if there are 5 players in the category, then their average share will be 20%. Say player A has a 10% market share, then its score will be 10/20 that is 0.5). The slant line in the graph maps similar relative pricing and relative purchase values. Thus, the overall objective for any brand will be to stay above the slant line in the graph as it will mean overall relative brand pull or equity perception is greater than the relative pricing of the brand and hence it will be gaining market share. The brands that are above this line and have greater than 1 relative intention to purchase and greater than 1 pricing are usually the strong market leaders. Brands above the line but less than 1 value for relative purchase intent and pricing typically are newer in the category and are building market share by a combination of equity building activities and penetration-driven pricing. The brands below the neutral line on the other hand would have declining market shares. The ones below the line and having less than 1 relative purchase intent and relative pricing would typically have very marginal appeal and are not really noticed by the masses. The brands below the line but around 1 need to reinvent their marketing strategy either by creating an innovative equity building campaign or a drastic pricing strategy change or both. Brands below the line but with higher than 1 value are typical old brands that have strong consumer equity but with time have been rendered less relevant by competition either in terms of their equity or pricing or both.

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The graph below shows a hypothetical plotting of various shampoo brands in India on the scales mentioned above. Please note that this is only to explain the role of pricing and perceived value in context of a category. The numbers and positions are all hypothetical as provided in the graph but this gives you an idea how by looking at this graph, a brand can decide its corrective pricing and value strategy.

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Fig. 7.2

Thus, pricing for any brand needs to be looked at in the context of the category to ensure that it delivers net positive value for the consumers. Creating the optimum mix of benefit and pricing that creates positive consumer value helps you remove any resistance from the consumers in purchasing your brand, thus, ensuring that you are on track to build a strong brand. This has similarities to what Sun Tzu talks about in Art of War as breaking the enemy’s resistance without fighting. He says,: “Hence, to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting”. This is what an adroit

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mix of benefit and pricing does for your brands as well—break the shopper’s barriers to purchasing your brand.

Case Study 6A: Sony PlayStation 3 The video gaming console market has seen tremendous pricing activity across brands and editions. When Sony launched their PlayStation 3 version, sales were sluggish because of intense competitive activity. X-Box 360 and Wii (Nintendo) stole the show with their innovations and hence enjoyed better perceived consumer benefit. At that time, all the three products were priced within the price elasticity band (i.e., their price differences were not relevant for the consumer to force them to switch). At this juncture, Sony announced a 20% drop in their PS3 prices and immediately saw huge incremental increase in their sales. In fact, some channels like Amazon saw almost 2500% increase in sales of PS3 and it became the best-selling gaming console. The point here is that it is critical that your brand hit the sweet price spot, which drives value in the eyes of your consumer. This pricing could vary depending on the market. If you have low penetration of your brand, you might want to look at a lower than competition penetration pricing for a similar product. On the other hand, you could leverage a premium brand positioning and innovation to drive higher price points than competition for your brand. This is precisely what Gillette does.

Case Study 6B: Gillette The brand managers at Gillette have been smart in their pricing strategy for their flagship men’s razors and blades brand. They

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have been regularly upgrading their razors and blades and hence increasing prices on their newest offerings. The innovations are consumer significant, so much so that they are ready to pay a premium to upgrade to the latest offering— higher price for more perceived benefits. Thus, the brand is able to drive right value in the eyes of its consumers despite premium pricing. Right from their twin blade to triple blade Mach 3 to Mach 3 turbo (with vibrating motor) to Gillette fusion (with an additional trimming blade), their upgrades have been significant and hence they have been able to charge more than 10% premium and consumers have been willing to oblige. This strategy has been paying off very well for their brand team as Gillette continues to hold market leadership position and has been consolidating that position across the globe. This has helped Gillette tier their offerings depending on the target consumers where they have a product at entry level pricing (Sensor), at mid-tier pricing (Mach 3) and at premium tier pricing (Turbo), thereby maximizing value for the respective consumer segments.

Case Study 6C: Mercedes-Benz Mercedes-Benz is a classic case of how to leverage pricing to drive value for consumers. The brand is built around the promise of superior engineering—Mercedes E class launched with superior engineering innovations like electro-hydraulic braking system and electronic stability program (for emergency situations). These features created a meaningful differentiation for the brand, resulting in its resounding global success with market leadership in its category across many markets. However, a key lever that actually helped make it the iconic brand is its premium pricing. This enabled it to target the top end of society lending it a premium image though the brand was not explicitly being positioned so. The positioning

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continued to be on providing innovative engineering solutions in the various Mercedes models; however, pricing strategy was used as a lever to target premium clients. The brand understood that to be able to command the pricing premium, it had to deliver better perceived value to its customers, which it did through the engineering innovations and the emotional promise of prestige on being seen driving a Mercedes. The brand focused on delivering superior consumer value (functional and emotional) for which it could charge a premium price, consequently establishing its prestige value and thus, building a strong global brand.

Case Study 6D: Timex Timex watches are a great example to learn how a brand defined its mass market value positioning and then went about working on the product offer to deliver it at the desired low cost without compromising on the features and the perceived consumer value. It was launched at a time when the likes of Rolex had been positioned at the top end of the spectrum with prohibitively high prices catering to the wealthy section of the society. What was available to masses at that time were wrist watches that were unreliable and broke easily. Thus, the brand was conceived around the positioning to offer its consumers a durable watch at low price points to drive mass affordability. The brand took the route of pricing low to drive volumes and made this model work financially. The watch built from strong plastic materials was advertised for its durability with torture test demos (like tying it to a baseball bat and hitting the ball with it, freezing it in ice, being sucked in a vacuum cleaner etc) that drove immense word of mouth publicity for the brand and built strong appeal because of the strength feature it showed. This coupled with low prices resulted in Timex overtaking almost 50% market share in United States. Thus, a brand was

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built through a focused pricing strategy coupled with innovative marketing business model that helped it become one of the top global brands.

Case Study 6E: McDonald’s McDonald’s is a branding phenomenon, which among many things, has smartly leveraged its pricing strategy to drive business and consumer value. The brand launched with the promise of offering burger, fries and malt drink to its patrons, i.e., simple staple food served fast. With Ray Croc taking over, the brand became a phenomenal success globally. The key premise of offering good quality fast-food in a clean environment and with high service quality helped the brand connect with its consumers. McDonald’s today is present in virtually every corner of the globe. Once growth from geographical expansion tapered, the brand started expanding its menu offering. Thus, further growth from either geographical or menu offering was not substantial. It was also a time of economic scarcity and consumers in general were turning frugal and footfalls into restaurants in general were on a decline. Under such a scenario, a smart consumer relevant pricing strategy is what enabled McDonald’s turn the tide. Consumers were coming to their outlets and buying only limited items, say, a burger or small coke, which had low percentage margins. To increase brand consumption, the team evaluated alternatives to get them to buy more. A couple of hypothesis came forth: (a) up-size and sell them jumbo packs of fries or (b) keep the same size and if consumers want more, they will buy two packs. Based on consumer research and tests, they found that while consumers wanted to buy more fries but they did not want to appear greedy and glutton-like by ordering two packs. Thus, the idea

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of up-sizing at better value was executed. It was like a win-win situation: Consumers get more products at better price; McDonald’s make more money through better absolute margins. Consequently, this up-sizing strategy boosted the company’s profits and put it on a high-growth trajectory. Thus, we see how a clearly evaluated pricing sizing strategy around consumer understanding not only helped the brand drive more consumption by customers but also increased its profitability. (Later, because of the obesity debate that took over United States and the badly handled negative PR that the brand landed in, it is now looking to reinvent and connect better with the consumers.)

Personal Brand Building Right pricing holds true even in context of treating your own self as brand. You just need to understand that the ‘price’ in this context will not just be monetary. In this context, let’s treat pricing more broadly as some resource that the potential consumer has to spend to consume the benefits offered by the brand ‘you’. This can now stretch across a variety of consumers for your brand. For instance, your employer pays your ‘price’, i.e., your salary based on the value you as a brand bring to the company. Again here any employer will look at your salary as the price of all the benefits the company will get from hiring you. As long as the benefits are higher than the salary, there will be net value creation for the employer, hence justifying your salary. So, if you want to negotiate a pay hike with your manager, do your homework to tell her how the value you are creating outweighs the salary you are negotiating and hopefully your manager will see light in your argument.

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Stephen Covey, in the iconic book Seven Habits of Highly Effective People, talks about the concept of emotional bank account. He refers to the fact that anyone with whom we have a relationship with, whether it is our co-workers, friends or family, we maintain a personal ‘emotional bank account’ with them. This account starts with a zero balance (as with the conventional bank account). We can make deposits into and withdrawals from this emotional bank account—the only difference is that instead of currency monetary units, it is the ‘emotional units’ that we trade in. When we make such deposits in an emotional bank account, our relationship with them develops and grows. By keeping a positive reserve in this bank account, there will be greater tolerance for mistakes and more open communication with the individual. Depending on the strength of this reserve will you be able to make withdrawals as well. In case the reserve is low or negative, that results in bitterness and mistrust. He further lists various types of ways in which one can make these deposits (understanding the individual, keeping commitments, clarifying expectations, attending to little things, showing personal integrity and apologizing sincerely when we make a withdrawal). Taking a cue from the brand value equation discussed in this chapter, our brand should have a net value perception in the eyes of the consumers. Thus, Personal brand value = Sum total of deposits in the emotional bank account / (divided by)/ Sum total of withdrawals from the emotional bank account. This value should be greater than 1 to ensure that the brand resonates with the target consumer. In other words, we should have more deposits than withdrawals in the emotional bank account to build a strong brand.

CHAPTER

8 PRINCIPLE 7: MOTIVATE THE TEAM BY ENVISIONING AND EARLY BUY-IN

Prince Caspian— I do not think I am ready. Aslan—It is for that very reason that I know you are. – C.S. Lewis (Chronicles of Narnia, Prince Caspian) Leadership is communicating to people their worth and potential so clearly that they come to see it in themselves. – Stephen Covey (The 8th Habit)

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he key to building a strong brand ultimately depends on the people working for the brand. Effective brand management requires demonstrating strong leadership not just by virtue of position or hierarchy, but primarily through ‘thought leadership’. Not having any ‘formal’ authority over others, yet getting them to passionately do what you know is right for the brand is the true hallmark of great brand leadership in the organization. This is a very liberating thought because looking at it another way, it means that you do not need be high up in the hierarchy and even a new person joining a team can act as a change agent with his/her leadership. The two fundamental parameters that will enable you to leverage leadership for the brand are the following: (1) Envisioning (2) Early buy-in

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Envisioning refers to fact that to be able to lead the brand team effectively, you need to know where you want the brand to get to. As immortalized by Lewis Carroll’s Cheshire cat, if you don’t know where you want to go, then any road you take is okay. Thus, envisioning is what will set the goal for the brand and give the team a common purpose to which they bind and then work collectively to achieve it. The entire multifunctional team can then leverage their specialist skills to enable right decisionmaking and actions for the brand. Envisioning requires a genuine on-the-ground understanding of business reality as that will not only make the vision more practical but also inspire confidence in the team. For instance let’s take the time when you are setting growth and volume targets for the brand in a financial year. You need to ensure that you benchmark the growth indices/targets to actual market share projection it would get you to. This will help your team gauge the numbers in the right market scenario and force the team to plan accordingly. If your growth target for the next year is, say, 15% and putting that in context of market share means gaining and sustaining 2 points in each of the markets you operate in, then you need to be realistic whether you have achieved that in the past or have you identified enough marketing opportunity areas to get you that growth. The second parameter, early buy-in, builds around the fact that to make optimum brand-building plans you need to leverage the insights and experience of the team that will be working to deliver the results. It’s the best way to ensure that

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the people are passionate about the vision and get associated with it. This is where early buy-in will help you. Involving the key members early on when the envisioning and planning starts will enable them to contribute meaningfully to the plans. This will ensure that individual inputs are valued, which would lead to improved plans because of inclusion of their points of view. Thus, it will be a joint team vision for the brand and not an individual vision. The team being part of the planning process from the beginning will feel collective ownership of the brand, which in turn will create passion and commitment from all and hopefully result in excellence in execution. Thus, envisioning and early buy-in from the team members will get them to work smart on the priorities for the brand. Right clarity about what the brand is and where it wants to be will help the team identify the key priorities that they need to focus on, rather than spending time and energy on non-brandbuilding issues. This importance of envisioning and communicating the same effectively with the team via early buy-in is dealt at length in Sun Tzu’s Art of War. He says: “On the field of battle, the spoken word does not carry far enough; hence the institution of gongs and drums. Nor can ordinary objects be seen clearly enough; hence the institution of banners and flags. Gongs and drums, banners and flags are means whereby the ears and eyes of the host may be focused on one particular point. The host, thus, forming a single united body makes it impossible for the brave to advance alone or for the cowardly to retreat alone. This is the art of handling large masses of men”. Thus, clearly the importance of setting a vision or a focal point around which the whole brand team becomes like a single unit cannot be undermined.

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Case Study 7A: Lee Kwan Yew (Brand Singapore) A brilliant example for this kind of leadership in building a truly global brand was shown by Lee Kwan Yew, the Minister Mentor of Singapore also regarded as the creator of brand Singapore. Singapore, a former British colony, became fully independent in 1965 and faced tough challenges. With no natural resources at its disposal, a weak economy and low military strength, it was rejected from being a part of Malaysian peninsula, thus, threatening its very survival. This is when Lee Kwan Yew built the foundations of modern Singapore on trust and truth. He envisioned a prosperous and developed Singapore and hence did the due diligence to understand how he could go about doing the same. He learnt from policies of other British colonies that had gained independence (India, Pakistan, Ghana and Nigeria) to realize what has worked and what has not worked. This enabled Lee Kwan Yew to leverage his thought leadership as he envisioned the future of brand Singapore. Economic stability was his top priority and he reached beyond his immediate neighbors to export to markets like United States and Europe. His objective, to turn Singapore from a third world island to a first-world oasis, was to be fulfilled by his strategy of making Singapore a communications and transportation hub by establishing the right infrastructure. Further, he realized that development is not possible without a cohesive society with people at peace with each other. He dealt with this by encouraging everyone to learn two languages, English and their mother tongue. Then he envisioned that every Singapore resident should own a house as that would prevent communal tensions and keep the country more stable (no one would like to burn down his/her house). He eradicated corruption from the government

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system by requiring complete accountability and separateness between personal assets and public funds. He created the right motivations and incentive system to attract the best people to government. He was instrumental in all these choices being made and of course he had an able team of ministers to help him develop that vision and bring it to life. This is where ‘early buy-in’ helped to ensure that his team contributed meaningfully to the plan. For his housing vision for Singapore, a quote from Lee Kwan Yew back in 1964 goes as, “I had seen the contrast between low cost rental flats, badly misused and poorly maintained, and those of proud owners, and am convinced that if every family owned its home, the country would be far more stable”. Sharing this vision with him was Mr. Kim Lim San, the first Housing Development Board (HDB) Singapore chairman. When Singapore gained independence, majority of Singaporeans were living in crowded squatter colonies, which lacked proper sanitation and were fire hazards. The population was growing rapidly, with immigration adding further stress on the housing shortage. The government’s immediate priority was to build as many flats as possible in the quickest time possible to solve this crisis. The HDB was set up in 1960 to tackle the problem. In the first 5 years of its existence, the HDB built 50,000 flats. This was a remarkable feat, considering that the previous colonial government had taken 30 years to build 23,000 flats. Within 10 years, the housing shortage was largely solved. It was because of the team led by Kim Lim San that cost-effective and good housing was created in such a short span of time. Thus, leveraging the two principles of envisioning and early buy-in from the team, in less than 30 years, Singapore had

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turned a big tide from being a third world equatorial forest to a cutting-edge first world organization and one of the most prosperous brands in the world with a star brand manager Lee Kwan Yew as the mentor.

Case Study 7B: Helen Gurley Brown (Brand Cosmopolitan) Successful brands have had the fortune of being managed by individuals with strong leadership and organizational skills. Cosmopolitan, since its launch in the late 1980s, had been positioned on a broad ‘for the family’ appeal. It carried fiction and journalism suitable for all ages. This saw the magazine build a solid reader base. However by the mid-1990s, it sort of lost its appeal with a consistently declining readership. The magazine, in its attempt to cater to all, was not able to stand for something specific in the minds of its consumers. It was at this point, somewhere in the 1960s, that its reins were handed over to Helen Gurley Brown who had a clear objective in her mind to turn the magazine brand around. The first thing she did was to sharply define the target audience that the brand wanted to go after and then rallied the whole brand team to deliver the product, which would appeal to the identified target audience. This required vision and foresight on the part of Gurley Brown. Based on her understanding of the consumer and the society, she formed the vision about where the brand should head and aimed at the strongly emerging segment of progressive, careeroriented, successful and open-minded women. The team then came up with innovations that would help create the brand Cosmopolitan appeal for that target consumer. This included the first time ever glossy format, inspirational articles and writings and talking frankly and truly about various issues and needs of the women that the brand was targeting. With a clear

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and single-minded focus provided by its leader, the magazine was able to break sales records and become a global player. The success was phenomenal with the first print run of about 350,000 was sold out by the end of the publication day. The magazine built on this vision launched about 50 international editions, all of which were equally successful. Thus, the ability of a leader to define the direction for the brand and rallying the team behind that vision through early buy-in ultimately led to creation of one of the top magazine brands in the world.

Case Study 7C: Fred Deluca (Brand Subway) Fred Deluca, the leader for brand ‘Subway’, provides another great example of a brand being built by strong and focused leadership. With the launch of Subway in the late 1900s, Fred Deluca understood the fast food market very well. Dominated by a variety of players like McDonald’s, Burger King and KFC, it was a daunting task to launch and establish a new brand. The current players panning across global geographies had entrenched and loyal consumer base. Fred Deluca, based on his and his team’s understanding of the market, understood that ‘healthy eating’ is one benefit that not many fast food giants are able to deliver. Instead, they are trying to fight the negative image associated with burgers, fries and soft drinks, especially with ‘obesity’ gaining high public attention. Fred understood these undercurrents and positioned the offering based on natural ingredients and low fat content. He simplified the work for his team by focusing everyone’s effort on delivering the best submarine sandwiches. Unlike other fast food chains, which had to handle 50 to 100 items on their menu card, he got his people to focus on just one. The sandwiches remained the same and only the ingredients changed. This also made it easy for the people actually making the sandwiches to

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learn the art really well. Of course, all of this came with the promise of natural ingredients and low calorie count. Thus, the leader with his clear focus and early buy-in from the team was able to steer the brand and the team to spend energy and resources on the right elements that added value for the consumer and enhanced the brand proposition. Today, Subway is fast becoming one of the most respected brands in the world, having its presence in more than 75 countries and giving the traditional giants like McDonald’s, Burger King and KFC definitely a wake up call.

Case Study 7D: Bill Gates (Brand Microsoft) Talk about leadership and organization and you cannot ignore Bill Gates, the founder of brand Microsoft, one of the top brands built globally because of his focus and ability to foresee and plan accordingly. Having started his company in Seattle, Washington, the brand only took off after Bill Gates was able to broker a big deal with IBM. IBM then was the dominant PC player in the world and was looking for someone to do the software design. Bill Gates understood the importance of this problem and using an operating system purchased from another company and rebranding it as MS-DOS (Microsoft Disc Operating System), he was able to virtually dominate the software market. IBM never realized how big and important software would become in the future. In fact, the deal that Bill Gates was able to broker with IBM got them to fund the development of the system while Microsoft held exclusive rights to sell the software to other PC manufacturers. Even though it was not the best or most efficient software, it broke conventional barriers and leveraged the IBM distribution network to become the market leader. This was in contrast to Apple, which had a better operating system and design but that was limited to only Apple PCs. Microsoft used this base to

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saturate the software market so that when other PC players came in and when IBM was no longer the market leader, they too used Microsoft software. Going further, Bill Gates continued to keep his team focused on developing consumer solutions and extended the Microsoft brand to launch applications like Word, Excel and PowerPoint. Technically consumers could have used other office applications but they had become such loyal users of Microsoft brand that they felt more comfortable using MS Office. Clearly, Bill Gates realized the importance of consumer franchise that the brand Microsoft owned and leveraged early buy-in to get his team to develop more meaningful products for the consumers. Had Bill Gates with his vision and perseverance not been able to crack the deal with IBM, we would not have known the brand ‘Microsoft’ as we do today. Bill Gates had the vision to strike the deal and then get his team rallied behind his vision. They got the product from another vendor, tailored it to IBM’s requirements and rest as they say is history. Thus, we see how a brand was built on the ability of its leader to see the opportunity, have the courage to follow it through and then work smartly with his team to deliver the results.

Personal Brand Building As evident, ability to envision (i.e., know where you want the brand to head) and get early buy-in form the team are critical pillars that will enable you to build a strong personal brand. You need to take ownership of the brand ‘you’ and lead it from the front. What that means is you need to be conscious of decisions that need to be taken and then take them. Because if you do not make the decisions, then someone else will do it for you and that probably will not be in line with what you want the brand ‘you’ to become. For instance, after high school as you embark on your undergraduate studies, you need to be

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clear in your mind potentially the direction you want to take in your life. This might mean talking to people who can guide you, meeting with career counselors, talking to people who are already in the profession that you aspire to be in, talking to students and alumni of the potential school you wish to join. This due diligence and analysis has to be done by you so that you can arrive at a vision and direction where you want to head. If you want to become an actor, then its better you join the right graduate study program that gets you the opportunity to improve your communication and acting skills. Joining a medical school will not really help in that case. Many times, you will tend to flow with the masses, go on and do what the majority ‘others’ are doing and not really step back. True leadership to build your own brand will require you to step back and understand where you want to head to and then diligently work toward getting there. Of course, you will need assistance and guidance of others in doing this and it will come as long as you are passionate and have the vision that is communicated to others. Taking inputs from your parents, family and friends will ensure that you have their early buy-in. This will give you different career and life perspectives that will enable you to make the choice. Consequently, if you have already taken their inputs into consideration, in all likelihood your family and friends will be more than willing to support you in whatever direction you take and help you need.

CHAPTER

9 TAIL PIECE

“The only thing in life achieved without effort is failure” – Author Unknown “Change your thoughts and you change your world” – Norman Vincent Peale

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he 7 principles of effective brand management, thus, need to be looked at from its entirety perspective. They need to be applied simultaneously to the marketing and brand building endeavor that you are embarking upon. In nature, carbon turning to diamond happens when all four covalent carbon bonds are formed under intense pressure. Having only three of the bonds and not all four of them results in formation of its poorer cousin, coal. Similarly, following some of the brandbuilding principles and not following the rest will not result in optimum brand creation. As brand builders, you need to strive for demonstrating all the 7 principles which will guide you in creating and sustaining successful brands.

114 The 7 Principles of Brand Management

A recap of the principles: Competence building (top half of the hour glass): 1. Leverage information via hypothesis-led data analysis 2. Understand competition and maintain your point of difference 3. Manage your budgets with a scarcity mentality These three principles then feed into the consumer plan building principles (bottom half of the hour glass): 4. Know the hurdle in your consumer’s life that your offering smoothens. 5. Be consistent with your positioning over time and across platforms. 6. Get the right pricing that offers value in the eyes of your consumers. Finally all of this is held together by the leadership principle: 7. Motivate the team by envisioning and early buy-in. Wishing you success on a fruitful brand-building journey!

REFERENCES Jay Conrad Levinson, Guerrilla Marketing: Easy and Inexpensive Strategies for Making Big Profits from Your Small Business, 4/E. Kevin Lane Keller, Best Practice Cases in Branding for Strategic Brand Management, 3/E. Melissa Davis and Jonathan Baldwin, More Than a Name: An Introduction to Branding. Duane E. Knapp and Orin Smith, The Brand Promise: How Ketel One, Costco, Make-A-Wish, Tourism Vancouver, and Other Leading Brands Make and Keep the Promise That Guarantees Success. Philip Kotler and Gary Armstrong, Principles of Marketing, 13/E. David A. Aaker, Brand Relevance: Making Competitors Irrelevant. Uche Okonkwo, Luxury Fashion Branding: Trends, Tactics, Techniques. Philip Kotler, Hermawan Kartajaya and Iwan Setiawan, Marketing 3.0: From Products to Customers to the Human Spirit. Al Ries and Jack Trout, Positioning: The Battle for Your Mind. Joseph Hancock, Brand/Story: Ralph, Vera, Johnny, Billy, and Other Adventures in Fashion Branding. Martin Lindstrom, Brand Sense: Sensory Secrets Behind the Stuff We Buy.

116

References

Seth Godin, Permission Marketing: Turning Strangers into Friends and Friends into Customers. Jesko Perrey and Dennis Spillecke, Retail Marketing and Branding: A Definitive Guide to Maximizing ROI. David A. Aaker, Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage, and Clarity. Alexander Chernev and Philip Kotler, Strategic Marketing Management, 5/E. Alice M. Tybout, Bobby J. Calder and Philip Kotler, Kellogg on Marketing. James R. Gregory, The Best of Branding: Best Practices in Corporate Building. Al Ries and Laura Ries, The 22 Immutable Laws of Branding. Paul Temporal, Asia’s Star Brands. Allen P. Adamson and Martin Sorrell, Brand Simple: How the Best Brands Keep it Simple and Succeed. Tom Duncan and Sandra Moriarty, Driving Brand Value: Using Integrated Marketing to Manage Profitable Shareholder Relationships. Marty Neumeier, The Brand Gap: How to Bridge the Distance Between Business Strategy and Design. Ian P. Buckingham, Brand Champions: How Superheroes Bring Brands to Life. David Vinjamuri, Accidental Branding: How Ordinary People Build Extraordinary Brands. Klaus Fog, Christian Budtz, Philip Munch and Stephen Blanchette, Storytelling: Branding in Practice. John Gerzema and Edward Lebar, The Brand Bubble: The Looming Crisis in Brand Value and How to Avoid It. Douglas Holt: How Brands Become Icons: The Principles of Cultural Branding.

References

117

Larry Light and Joan Kiddon, Six Rules for Brand Revitalization: Learn How Companies Like McDonald’s Can Re-Energize Their Brands. Philip Kotler and Waldemar Pfoertsch, Ingredient Branding: Making the Invisible Visible.

INDEX Symbols 2 × 2 matrix 29 7 principles 113 9/11 attacks 34

A Absenteeism campaign 57 Absolut 83 Absolut Vodka 82 Adidas 17 Adolph Dassler 17, 18 Affiliate marketing 47 Africa 5 Aleve 13 Al Jazeera 34 Amazon.com 47 American Express 21 Analysis 11, 12 Andrew Carnegie 25 Apple 3, 108 Apple’s 4 Arthritic pain 16 Art of War 27, 91, 103 Asia 5 Assets 4

B Band-aid 63 Bayer Consumer Care 13 Beauty 5 Ben and Jerry’s 35 Beverages 5 Bhagavad Gita 1

Bill Gates 108, 109 Billion dollar mega-brands 31 Bill Tammeus 85 Brand builder 5 Brand management 3 Broadcasting news 34 Budgets 6 Burger King 107, 108

C Capitalization 4 Cash management 21 Category 28 Ceiling 23 Chandon 20 Cheshire cat 102 Clear 4 CNBC 34 CNN 34 Coca Cola 32 Coffee 59 Coke 33 Commercial innovation 74 Commodity 3 Competition 27 Consistent 6 Consumer language 13 Consumer marketplace 12 Consumer relevance 30 Consumer value 87 Cosmopolitan 106 Cricket 32 C.S. Lewis (Chronicles of Narnia, Prince Caspian) 99

120 Index

Curtis W. Fentress 39 Customization 48

Fred Deluca 107 Free cone days 35

D

G

Data analysis 17 Dell 48, 49 Dettol 57 Differentiated 28 Distribution channels 55 Domino’s 50 Domino’s Pizza 49 Donald N. Smith (President of Burger King) 53 Dove 31, 80 Dramatic differences 14

Gillette 3, 92 Gillette fusion 93 Google 3 Grow market share 14 Gulf War 34 Gut feel 13

E Early buy-in 7, 102, 103 Easy Rider 81 E class 93 Elton John 65 Employee welfare programs 35 Envisioning 7, 101, 102, 103 Equity 3 ESPN 79 Europe 5 Evian 36

F Fair and Lovely 58, 59 Fairness cream 58 Fast delivery 49 Fast food 4 Financial 41 Financial services 21 Folgers 59 Folgers coffee 60 Food 5 Footwear company 17 Fox News 34 Frank Lloyd Wright 9

H Haagen Daz 35, 36 Harley Davidson 80, 81 HDB 105 Heinz 3, 68 Heinz baked beans 77 Helen Gurley Brown 106 Hello Kitty 67, 15 Henry Ford 1 Highly differentiated 30, 14 HIV and AIDS 65 Hour-glass 6, 55 Hour-glass model 5 Housing Development Board (HDB) 105 Huggies 29 Hurdle in your consumer’s life 6 Hypotheses 13 Hypothesis 12 Hypothesis-driven data analyses 12 Hypothesis-led data analysis 6

I IBM 48, 49, 108, 109 IKEA 81, 82 India 32 Information 6 Innovations 21 Innovative 49

Index

Insightful 5 Intangible 74 Iodex 33 IPod 75, 78

J Jack Nicholson 81 Jerry Flint in Forbes 25 J&J 62 Johnson & Johnson 62 Johnson, Robert 63 Johnson’s baby cream 63 Jollibee 4

K Ketchup 30 KFC 107, 108 Kim Lim San 105

L Leadership 101 Lee Kwan Yew 104, 105 Lewis Carroll’s 102 Line extension 74 London 20 Louis Vuitton (LV) 61 Louis XIV 19 Low differentiation 30

M MAC 65, 66, 67 Mach 3 93 Mach 3 turbo 93 MAC (Make-up Art Cosmetics) 64 McDonald’s 4, 95, 96, 107, 108 Mercedes 94 Mercedes-Benz 93 Michael Dell 48 Microsoft 108, 109 Middle East 5

121

Moet 20 Moet and Chandon 19 Moisturizing milk 31 Moov 33 Motivate the team 7 MS-DOS 108 MS Office 109 Murray N. Rothbard 85

N New consumers 13 New product/category launch 44 New York 20 Nicol Ritchie 65 Norman Vincent Peale 111

O Official 32 OTC (over the counter) 13

P Pain relief 33 Pampers 29, 60, 61 Paras group 33 Paris 20 Paris Cafes 20 Paris Hilton 65 Pat Conroy 71 Pepsi 32, 31, 75 Perceived benefits 87 Personal brand building 23, 30, 96, 109 Personal care 5 Philippines 4 Pizza 50 PlayStation 3 92 Point of difference 6, 29 Positioning 6 PR 19, 96 Pricing 87, 91 Principles 5

122 Index

Problem 13 Promotions 55 Proposition 28 Prove or disprove 13 PR plan 55 Purity 36

Q Queen Victoria 19

R Ray Croc 95 R&D 16 Relevance 28 Relevant 31 Retail artists 66 Right pricing 7 ROI (return on investment) 42 Rolex 3, 94 Russian 82

S Sanrio 68 Sarah Jessica Parker 67 Scarcity mentality 6 Search engines 3 Seven principles 6 Shareholder value 4 Singapore 104, 105 Sony 92 Sponsorship 32 Stanislaw J. Lec 53 Starbucks 45 Stephen Covey (The 8th Habit) 99 Subway 107, 108 Sun Tzu 8

Sun Tzu’s 103 Sweden 81

T Tangible 74 Target consumer 28 The Art of War 8, 75 Timex 94 Travellers cheque 23 Tylenol 64 Tyra Banks 67

U Unilever 4, 58 United States 5 Untouched by Man. Perfected by Nature 36

V Value 4 Value strategy 91 Viewer 34 Viva Glam Lipsticks 65

W Wii (Nintendo) 92 William Feather 39 Woody Allen 71 Word of mouth 19

X X-Box 360 92

Z Zen and the Art of Motorcycle Maintenance 81

Author’s Profile Having completed his MBA from IIM Calcutta, Nitish had the opportunity to work with Procter and Gamble International Operations, based out of Singapore. There he worked with Beauty Care business unit, handling Hair-Care brand for the ASEAN (Philippines, Thailand, Indonesia, Malaysia, Vietnam, and Singapore), India and Australasia markets. He worked on launching new brands as well as aggressively growing existing brands across these markets. Thereafter, he moved to Dubai where he was handling the complete Ketchup and Condiments portfolio for Heinz Africa and Middle East. As the marketing manager there, he helped build the Heinz portfolio in more than 20 countries across the Africa continent and Middle East Asia. Currently he is based out of Gurgaon, India, where he is handling innovations and marketing for an American MNC. Apart from building brands in international markets, he is passionate about teaching and takes lectures in marketing at business schools. He can be reached at: [email protected]