Kellogg on Branding by Kellogg School of Management

Kellogg on Branding by Kellogg School of Management

The Big Idea: a strong brand is one of the most important economic moats a company can build. Building a brand is not easy but, if done well, can pay dividends for many years.

Intro

  • A brand is much like a reputation.
  • A strong brand will reshape perception.
  • Cash: Executives are pressured to focus on short-term financial results, however, brand building is a long-term project.
  • Consistency: Brands are built at every touchpoint with the customer.
  • Clutter: A strong brand needs to be focused and unique to stand out from the clutter.

1. Brand Positioning

  • Develop a formal brand positioning statement to guide internal marketing managers.
  • Once a brand is well-established, it is difficult to change.
  • Who is this brand for?
  • What does it help the customer accomplish?
  • How is it different from the alternatives?

2. Designing Brands

  • Begin with a strong brand concept.
  • Incorporate specific cues into the design.
  • The best technique for evaluation of brand design is to expose the design briefly and then ask consumers what they remember.

3. Brand Meaning

  • A strong brand is differentiated from the competition in a meaningful way. Consumers are willing to pay a premium and to repeat purchases over time.
  • Effective brand management involves the discovery, creation, and constant revision of stories.
  • Brands can promote and proclaim brand affiliation (Harley Davidson, Apple.)
  • Conduct a brand meaning audit to track and guide brand management efforts.
  • Brand stewards must become astute meaning managers.

4. Competitive Brand Strategies

  • The pioneer who creates, then dominates, a category enjoys a significant advantage for years and, sometimes, decades.
  • Late entrants have three broad competitive strategies: fast-follower, differentiation, and innovation.

5. Brand Extensions

  • A familiar brand name signals trust which can persuade consumers to try a new product launched with the brand name.
  • The brand extension must make sense.
  • Too many brand extensions can confuse consumers.
  • Sub-brands are sometimes a better choice. Eg., Sony Walkman, where Sony is the parent brand and Walkman is the sub-brand.

6. Brand Portfolio Strategy

  • Brands are a long-term asset.
  • A company with many brands has two broad strategies: house of brands or branded house.
  • House of brands: Proctor and Gamble, the brands are kept distinct and little effort is made to market the parent company to the consumer.
  • Branded house: Apple, the parent company has a strong brand and the sub-brands are natural extensions of the parent brand.

7. Building Brands Through Effective Advertising

  • Advertising should reflect the consumer’s aspirations.
  • Advertising should resonate with prior beliefs, not try to change them.
  • Advertising should resonate with existing goals.
  • Some advertising strategies: hard sell (Visa and “we’re everywhere you want to be”), big idea (Delta stands for convenience because of X, Y, Z), story grammar (follow a character from problem to solution.)
  • Keys: selecting the right media and the right timing.

8. Relationship Branding and CRM

  • CRM can be used to build a personal connection with the brand.
  • First, subsegment the market.
  • Second, personalize the touch points to improve the customer experience.
  • Segmentation methods: monetary value, sociodemographics, purchase behaviors.
  • Cluster analysis is a statistical method used to find natural groups.
  • Well-defined rewards (loyalty club benefits) generally work better than discretionary rewards (complimentary upgrades).

9. Brand Strategy for Business Markets

  • Managing business brands presents unique challenges.
  • The foundation of branding is positioning.
  • A positioning statement declares who that target customer is, what you offer, and why it’s customers should prefer your offering.
  • Brand equity is determined by the associations that are established in the customer’s mind with your brand.
  • The brand associations can be functional (easy to use, high quality, affordable) or they can emotional (exciting, fun, trustworthy, exclusive.)

10. Services Branding

  • A brand name is a promise made to the customer.
  • Customers are either delighted, satisfied, or disgruntled.
  • In contrast to goods, services are generally more intangible, complex, variable in their delivery, process-dependent.
  • For services, the front-line employee (the primary touch point) is the brand.
  • Since the front-line employee is the brand, marketing the brand internally is critical.
  • Front-line employees must view their role as partners. Treat employees like part of the brand.
  • Using self-service technology can reduce variation in customer experience. Service machines make remaining human employees even more valuable.
  • Since the company is the brand, be careful to control communications of the company identity (from sponsored events to ethics to social media.)
  • To manage and improve the customer experience, map all the touch points.
  • Service blueprinting is a mapping of all the touch points with the customer.
  • The blueprint will help identify bottlenecks, ensure consistency, and reveal opportunities to distinguish the brand from competitors.
  • Ex. Mayo Clinic “patientfirst”.
  • Be careful when selecting partners because they become an extension of the brand, for better or worse.

11. Branding in Technology Markets

  • There has been a cultural bias in technology towards engineering and features and against branding.
  • Technology firms need to learn from the CPG firms.

12. Building a Brand-Driven Organization

  • The strongest, most resilient brands have a strong internal company culture that upholds the brand promises.
  • A strong brand leads to customer loyalty, which leads to lower marketing costs, more repeat purchases, and a higher customer lifetime value.
  • A strong brand leads to a higher willingness to pay, which leads to more revenue per customer, and a higher customer lifetime value.
  • A strong company culture motivates employees, reduces employee turnover, and lower operating costs.
  • A strong company culture motivates employees, which improves touch points with the customer, which leads to a strong brand.
  • The touch point wheel consists of interactions during pre-purchase, purchase, and post-purchase.
  • At companies with a strong brand, CEO is the lead brand builder. But all leaders must build the brand in their departments or business units.
  • Form an executive brand council (EBC).
  • To communicate the brand to the employees, segment them like you would segment customers. Then customize the message and the delivery for each employee segment.
  • 1. Make the Brand Relevant to Employees. (What does this mean for me?)
  • 2. Make the Brand Accessible to Employees. (What is our brand, more specifically?)
  • 3. Reinforce the Brand Continuously to Employee. (What is our brand, again?)
  • 4. Make Brand Education Part of New Employee Training
  • 5. Reward On-Brand Behaviors (What’s in it for me?)
  • 6. Hire Based on Brand Fit
  • What gets measured gets managed. Set up employee-focused brand metrics. Surveys, suggestion boxes, focus groups.
  • Common pitfalls: relying on broadcast instead of conversation, not allocating sufficient resources, being seduced by sexy but shallow tactics, and relying too much on technology.

13. Measuring Brand Value

  • What gets measured gets managed.
  • Book: Managing Brand Equity (1991) by David Aaker
  • 1. Customer-centric metrics: qualitative and quantitative measurements of consumer awareness/attitudes, eg. BrandDynamics model
  • 2. Sales-centric metrics: marketing mix modeling (measure ROI via statistical analysis), predictive modeling (customer most likely to respond, Customer Brand Value)
  • 3. Company-valuation-centric metrics: specialists determind brand valuation using accounting and finance principles, for M&A or brand management via scorecards

14. Using Positioning to Build a Mega-brand

  • 1999, NetZero invested remaining capital to position itself against AOL and MSN as “Defenders of the Free World.”
  • The campaign was a big success, NetZero launched premium extensions, and NetZero eventually became United Online.
  • 1. Start with a tangible point of difference that resonates with consumers.
  • 2. Create the impression that you’re bigger than you are.
  • 3. Be nimble in responding to changes in the marketplace, but be true to your brand.

15. Marketing Leverage in the Frame of Reference

  • Do not underestimate the impact of the right frame of reference.
  • 1. Broaden the frame of reference: BMW is not a sports car, it’s the ultimate driving machine; DeBeers is not in the diamond business, it’s in the gift business
  • 2. Compare your offering to the gold standard even if it’s not your primary competitor: it’s not delivery, it’s Digiorno; Visa positioned itself as better than Amex even though its primary competitor was Mastercard
  • 3. I am what I’m not: it’s not TV, it’s HBO

16. Finding the Right Brand Name

  • If your brand name is distinctive and memorable, it can make the difference in winning.
  • Your name must be memorable and ownable.
  • Be careful of descriptive names, fad-ish names, or names that define a product or benefit too narrowly.
  • The brand and its name should convey a personality.
  • Eg. Mrs. Dash

17. Building Global Brands

  • The ideal strategy is to complement global standardization with local customization.
  • Consumers have high expectations of global brands, so it’s best to focus on superior benefits.
  • The brand essence should stay consistent globally, with a little bit of flex for local tastes.
  • Local changes include: sizing, pricing, distribution.
  • Eg. Philadelphia Cream Cheese

18. Branding and Organizational Culture

  • Strong brands in healthcare begin with a strong internal culture.
  • Begin with a clear mission and value statement.
  • If your brand is tied to your employees, they must buy into the mission and purpose of your organization.
  • Eg. Northwest Memorial Healthcare.

19. Branding and the Organization

  • 1. Match the brand to the internal culture and reality.
  • 2. Involve senior management in the branding process.
  • 3. Manage the brand actively with marketing professionals.
  • There is an advantage to scale in building a brand, but there is also an advantage to small size in maintaining a strong company culture and strong core values.

20. Internal Branding

  • Don’t forget your employees when communicating the brand.
  • Employees can be powerful brand ambassadors.
  • Good internal branding can motivate employees to provide exceptional service.