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.