KEEPINGOL o age and? - Kantar Millward · PDF filewhat does short-term vs. long-term ... their disruptive power. it’s ... moutai ikea petrochina disney sinopec samsung baidu facebook

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  • KEEP

    ING

    YOUR

    COOL

    From

    disrup

    tive pr

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    t idea

    to

    succes

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  • THE CHALLENGE FOR ANY START-UP IS BUILDING SALES TO BREAK EVEN SOONER RATHER THAN LATER, OR TO DEMONSTRATE ENOUGH GROWTH TO PERSUADE INVESTORS OF FUTURE PROFIT POTENTIAL. AS A RESULT, THE FOCUS IS USUALLY SHORT-TERM MAXIMISE SALES NOW RATHER THAN IN THE FUTURE. THE QUESTION IS WHETHER THIS SHORT-TERM FOCUS IS THE RIGHT ONE. CAN A NEW BRAND AFFORD TO TAKE A LONGER-TERM VIEW? AND IF THIS IS NOT IMMEDIATELY POSSIBLE, AT WHAT POINT CAN IT BEGIN TO SHIFT TO A MORE BALANCED EMPHASIS BETWEEN SHORT AND LONG TERM?

    WHAT DOES SHORT-TERM VS. LONG-TERM ACTUALLY MEAN?

    Firstly, whether we talk about short-term or long-term we are ultimately only interested in one outcome value growth. This can come from topline growth or operational efficiency. Increasingly though, various studies show that the greatest driver of value creation is revenue growth. The ability of public companies to create value is reflected in their share price. Many privately owned businesses work towards the same value creation model so that they can ensure a successful IPO. So, we define short or long-term response as value growth and measure this via share price.

    The second point is that short-term and long-term responses are not mutually exclusive. We know from our marketing effectiveness measurement that different attributes characterise successful short-term marketing versus successful long-term marketing. Creating a short-term response requires offering or saying something new, unique or relevant. If you want that effect to continue in the longer term, a brands communications need to build consistent brand associations that are memorable

    enough to be recalled during future purchase or usage moments. Around 10% of all advertising that we test is able to create both short-term and long-term responses.

    Does brand building accelerate growth?

    In short, the answer is yes. Kantar Millward Browns BrandZ study, has covered 120,000 brands over 400 categories in 51 markets across a 12 year period. It is the most robust source of brand information in the world. Aggregated analysis of the database shows that brands high in meaningful difference grow four times faster than brands low in meaningful difference.

    The clear implication is that start-ups need to consider and balance the short and long term to accelerate growth and maximise potential.

    Here are five simple takeouts which we believe are critical for disruptive brands to be successful:

    #1 Shake things up

    When we ask consumers to think about disruptive brands, we articulate this as brands that are shaking things up. Disruption is not a new flavour variant or a new brand offering a slightly different product or service to existing category competitors. True disruption is about new, unique and motivating ideas that challenge the established order, break boundaries and meet an emerging or unknown consumer need. If a brand is perceived to be shaking things up then this can add significantly to that brands potential to grow in value.

    #2 Think about difference, not just disruption

    Disruption and difference are not the same thing. There is a relationship, but one doesnt completely explain the other. We articulate difference as offering something different in combination with setting trends. This could be related to products or services offered or it could be to do with the way a brand behaves and communicates. Being different is more nuanced than being disruptive and requires the delivery of a crystal clear product advantage in combination with a clarity of brand proposition.

    #3 Question whether your USP has scalable relevance

    Disruption for disruptions sake is not the most reliable indicator of future growth. We know this simply because many disruptive brands fail. However, if a brand shakes things up in a way that is perceived to offer something truly different, then its growth prospects more than double.

    Kantar Millward Brown 2017

    12 year value change2006-2007

    3 year global brand value % change (same 67 brands 2015 to 2017)

    DIFFERENT

    DIS

    RUPT

    ION

    90

    100

    110

    120

    130

    140

    150

    65 85 105 125 145 165 185 205 225 245

    Disruption adds value

    R = 0.56

    Low Medium High

    3 year global brand value % change (same 67 brands 2015 to 2017)

    AmazonGoogleFacebookAldiIKEAPayPaleBay

    DIFFERENT

    DIS

    RUPT

    ION +28%+11%

    +5%-5%

    HighLow

    Hig

    hLo

    w

    53%

    213%

    -1

    5

    30

  • GIVE SOME THOUGHT TO THE LONG-TERMWhile it is impossible for a new brand to ignore the need for immediate sales to create a viable business model, it is a missed opportunity not to understand and heed the long-term drivers of value growth. The first steps are:

    Challenge whether you are really shaking things up

    Articulate and express how you are different to the status quo and will be different to future copycat entrants

    Consider whether your USP has truly scalable consumer relevance

    Once you have established these unique credentials you are ready for the next stage:

    Layer meaning and salience onto the brand to reach a wider audience

    Dont stop being disruptive, even established brands can shake things up

    If you are still wondering if you can afford to think longer-term, perhaps reframe the question and ask if you can afford not to. As this last piece of BrandZ data shows, the share price of dynamic brands that set trends by shaking things up and being different, significantly outperforms all brands, even brands that are strong in other areas.

    #4 Layer meaning onto difference sooner rather than later

    If a differentiated and disruptive brand wants to grow and achieve scale it needs to make sure that it is meaningful so that more consumers will adopt the brand. The battle in the food delivery sector in the UK between Just Eat and Deliveroo is a great illustration of this. Having had a head start, Just Eat has already built Meaning to supplement its point of difference. Deliveroo has been able to disrupt and establish a greater point of difference by pre-empting a consumer desire for restaurant-delivered food. It is also now tapping into breakfast and lunch occasions to maintain difference and drive growth. However, annual revenues are a quarter of those of Just Eat. If Deliveroo can build meaning by continuing to identify functional areas of difference and communicating those in a way that builds an emotional connection, it can create a meaningfully different brand that is primed for significant growth.

    The path from a disruptive and differentiated proposition through to establishing meaning and salience is fairly common. Whether its Facebook or Aldi, YouTube or Santander, all have disrupted in a way that is genuinely different and then layered on meaning and saliency.

    Remember that a clear purpose and truly game-changing innovation can build meaningful difference very quickly and prime a brand for growth - Jio - the Indian telecommunications provider, is a perfect (and very recent!) example. Launched in September 2016 the brand offered a completely free service

    for six months followed by a relatively small subscription charge thereafter, recruiting 150 million subscribers in eight months. This forced the brands main competitors (Vodafone and Airtel) to re-visit their own pricing, resulting in India having the cheapest mobile data in the world.

    #5 Dont stop being disruptive

    Large established brands concerned about becoming the next Nokia or Blackberry are investing in connecting with start-ups, looking for mutually beneficial ways to shake things up. BrandZ data suggests this is a worthwhile investment. Disruption not only adds value in the short term for emerging brands, it is possible to maintain perceptions of disruption in the long term and brands that do this grow faster.

    The Fearsome Five: Apple, Amazon, Facebook, Google and Microsoft are brands with incredible meaningful difference, which has fuelled their meteoric rise and yet they have retained their disruptive power. Its worth pointing out that disruption is not exclusively the domain of tech brands, as brands like Pampers, Ikea and Disney prove.

    Kantar Millward Brown 2017

    BRAND MARKET YEAR M D S

    M - Meaningful S - SalientD - Different

    2017

    2017

    UK

    UK

    Just Eat

    Deliveroo 66 131 75

    158 117 178

    144 132 117

    Launched 1995

    Launched 2007

    Launched 2016

    115Disruption

    Average100

    Meaningful Difference

    Disruption

    APPL

    EPA

    MPE

    RS

    MIC

    ROSO

    FTTE

    SLA

    AMA

    ZON

    MO

    UTA

    IIK

    EA

    PETR

    OC

    HIN

    AD

    ISN

    EY

    SIN

    OPE

    CSA

    MSU

    NG

    BAID

    UFA

    CEB

    OO

    KG

    OO

    GLE

    FED

    EX

    BrandZ Innovative Brands Portfolio

    171.8%

    BrandZ Strong Brands Portfolio S&P 500 MSCI World Index

    124.9% 82.1% 34.9%

    To find out more about maintaining brand growth for the long term, contact:

    Mark ChamberlainMD - Transformation [email protected]+44 (0) 207 126 5017

    Jane BloomfieldHead of Sales & [email protected]+44 (0) 207 126 5169

    148144 143 143

    138 137 136 135 135133

    131127 127126 126

  • About Kantar Millward Brown Kantar Millward Brown is a