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Jack Buckner

Strategic Brand ManagementStrategic Brand Management

Exeter MBA Exeter MBA Day 5Day 5

Implementation and conclusionImplementation and conclusion

Jack Buckner

Brand

Product / Service

Consumers

Strategic Brand Management

Customers

Consumer Focussed / Customer Aware

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Jack Buckner

Brand

Product / Service

Consumers

Strategic Brand Management

Customers

Retailers / channel

Corporate structure

Internal partners

Jack Buckner

Brand Management and customer relationshipsBrand Management and customer relationships

RetailersRetailers

Head / regional office Head / regional office corporate structurecorporate structure

Internal departments Internal departments sales, finance and sales, finance and

logisticslogistics

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Jack Buckner

Brand

Product / Service

Consumers

Strategic Brand Management

Customers

Retailers / channel

Corporate structure

Internal partners

Jack Buckner

Retailers and channel managementRetailers and channel management

For most consumer brands For most consumer brands retailers and retailers and

channel management represent a channel management represent a

fundamental challengefundamental challenge

Retailers are a barrier to the consumerRetailers are a barrier to the consumer

Phil KnightPhil Knight

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Jack Buckner

Retail trendsRetail trends

Growth of key account managementGrowth of key account management

European and global retailersEuropean and global retailers

Decline of the independent retailerDecline of the independent retailer

Survival of the specialistSurvival of the specialist

Retail consolidation and range / brand Retail consolidation and range / brand rationalisationrationalisation

Growth of private labelGrowth of private label

Internet for certain product categoriesInternet for certain product categories

Jack Buckner

Channel alternativesChannel alternatives

Cost effective Cost effective

managementmanagementProduct / brand Product / brand

innovationinnovationStrong brand messageStrong brand messageInternetInternet

Retail managementRetail managementLimited editionLimited edition

Flagship for brandFlagship for brand

Strong brand messageStrong brand messageOwn retailOwn retail

Brand controlled by Brand controlled by

retailerretailerBusiness opportunityBusiness opportunityMass merchandisingMass merchandisingCategory Category

BreakerBreaker

OwnOwn product ranges product ranges

and communicationand communication

Private labelsPrivate labels

Sales turnover ScaleSales turnover ScaleMass consumer baseMass consumer baseKey AccountsKey Accounts

Less control of brand Less control of brand

message.message.

Developing their own Developing their own

brand identitybrand identity

Good qualityGood qualityBroad consumer profile, Broad consumer profile,

competition with major competition with major

brandsbrands

MultipleMultiple

Distribution Distribution Brand messageBrand messageQuality distribution Strong Quality distribution Strong

brandsbrandsIndependentIndependent

Stock Distribution Stock Distribution

Trade termsTrade terms

Credibility & Credibility &

Influential consumersInfluential consumers

Often premium brands, Often premium brands,

wide choice, high wide choice, high

knowledgeknowledge

SpecialistSpecialist

ConsConsPros Pros CharacteristicsCharacteristicsChannelChannel

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Jack Buckner

The product mix conundrumThe product mix conundrum

Easier / CheaperEasier / CheaperKey AccountKey AccountMain range Main range

low pricelow price

MultipleMultipleMain range Main range

mid pricemid price

IndependentIndependentQuality productsQuality products

Harder / Harder /

expensiveexpensiveSpecialistSpecialistPremium, niche Premium, niche

productsproducts

SOURCING SOURCING

LOGISTICSLOGISTICSRETAIL RETAIL

CHANNELCHANNELPROUCT PROUCT

RANGERANGE

Jack Buckner

adidas and Footlockeradidas and Footlocker

Footlocker (Footlocker (VenatorVenator) group ) group biggest sports retailer in the biggest sports retailer in the

worldworld

adidas business declined by 50% adidas business declined by 50% -- 1999 1999 20012001

Reebok Reebok BlacktopBlacktop programme exclusivityprogramme exclusivity

Nike Nike Tuned AirTuned Air technology exclusivitytechnology exclusivity

Adidas Adidas Superstar Superstar volume salesvolume sales

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Jack Buckner

The adidas SL rangeThe adidas SL range

SL SL sports lightsports light

Exclusive to Exclusive to Venator Venator group (Footlocker and Champs)group (Footlocker and Champs)

Joint advertising (funded by adidas)Joint advertising (funded by adidas)

Objective Objective raise profile & sales of adidas brandraise profile & sales of adidas brand

Use SL range as a silver bulletUse SL range as a silver bullet

Jack Buckner

The SL rangeThe SL range

SubSub--brandbrand

Difficulty in establishing main brandDifficulty in establishing main brand

Addiction to exclusivesAddiction to exclusives

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Jack Buckner

Brands and retailersBrands and retailers

A battle of strength, priorities and brandsA battle of strength, priorities and brands

Puma Puma global distribution strategy (1 global distribution strategy (1 6)6)

Retail partnerships and alliancesRetail partnerships and alliances

Key accounts will increasingly demand Key accounts will increasingly demand

exclusive ranges / brandsexclusive ranges / brands

Balancing brand objectives with market Balancing brand objectives with market

realitiesrealities

Jack Buckner

Brands versus Private LabelsBrands versus Private Labels

The private label threatThe private label threat

Improved qualityImproved quality

Development of premium private label brandsDevelopment of premium private label brands

European supermarkets successEuropean supermarkets success

Emergence of new channelsEmergence of new channels

Creation of new categoriesCreation of new categories

Brand StrengthBrand Strength

Purchase process favours brandsPurchase process favours brands

Brands have a solid foundationBrands have a solid foundation

Brand strength parallels the economyBrand strength parallels the economy

National brands have value for retailersNational brands have value for retailers

Excessive emphasis on private labels dilutes strengthExcessive emphasis on private labels dilutes strength

Quelch & Harding: HBR Jan/Feb 1996

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Jack Buckner

Brands and Private labelsBrands and Private labels

Quelch Quelch & Harding argue the true cost of private & Harding argue the true cost of private

labels is often underlabels is often under--estimatedestimated

Use category profit pools as a performance measure Use category profit pools as a performance measure

Take private labels seriouslyTake private labels seriously

Since 1996Since 1996

Growth of retailers as brandsGrowth of retailers as brands

Explosion of subExplosion of sub--brandsbrands

Increase discounting of national brands (transparency)Increase discounting of national brands (transparency)

Jack Buckner

Brand

Product / Service

Consumers

Strategic Brand Management

Customers

Retailers / channel

Corporate structure

Internal partners

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Jack Buckner

Global organizationGlobal organization

Weak global Weak global

brandbrandStrong country Strong country

managementmanagementDeDe--centralisedcentralised

Confusion and Confusion and

duplication of duplication of

functions/ functions/

resourcesresources

Brand and Brand and

local local

management management

balancebalance

MixMix

Weak country Weak country

managementmanagementStrong brand Strong brand

controlcontrolCentralisedCentralised

DisadvantagesDisadvantagesAdvantagesAdvantagesSTRUCTURESTRUCTURE

Jack Buckner

Branding functionsBranding functions

Brand direction Brand direction logos, core branding decisionslogos, core branding decisions

R & DR & D

Product ranges Product ranges range management, core rangerange management, core range

Communication Communication advertisingadvertising

Own retail strategyOwn retail strategy

Communication Communication prpr

Retail Retail instoreinstore, pos, pos

SponsorshipSponsorship

Range localisation, advertising and distribution Range localisation, advertising and distribution traditionally the most fought over functionstraditionally the most fought over functions

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Jack Buckner

P & GP & G

$43.38 billion sales$43.38 billion sales

$5.18 billion net earnings$5.18 billion net earnings

300 brands 300 brands

5 billion consumers5 billion consumers

160 countries160 countries

Jack Buckner

Some P & G brandsSome P & G brands

Ariel, Tide, Flash, Bold, Pampers, Ariel, Tide, Flash, Bold, Pampers, TampaxTampax, ,

Always, Pantene, Olay, Head & Shoulders, Always, Pantene, Olay, Head & Shoulders,

Max factor, Camay, Ivory, Max factor, Camay, Ivory, Clariol Clariol Herbal Herbal

Essences, Old Spice, Cover Girl, Vicks, Essences, Old Spice, Cover Girl, Vicks,

Crest, Folgers, Pringles, Sunny Delight, Crest, Folgers, Pringles, Sunny Delight,

TorengosTorengos

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Jack Buckner

P & G organizationP & G organization

Brand Management in 1930Brand Management in 1930ss

Brand manager responsible for all aspects of assigned Brand manager responsible for all aspects of assigned brandbrand

Competing brands in the 1950Competing brands in the 1950s onwardss onwards

Category management in the 1980Category management in the 1980ss

Improved coImproved co--ordination and rationalisationordination and rationalisation

IIm running a company called m running a company called DryelDryel..

Global Strategic Planning Groups in the 1990Global Strategic Planning Groups in the 1990ss

Global and local branding policiesGlobal and local branding policies

GlocalGlocal strategies strategies allow strategy to emerge from allow strategy to emerge from successful local rootssuccessful local roots

Jack Buckner

P & G 2005P & G 2005

Cohort managementCohort management

Bundling of brands around consumersBundling of brands around consumers

Improve understanding of consumer Improve understanding of consumer

relationshipsrelationships

Understand consumer value and identify Understand consumer value and identify

emerging consumer groupsemerging consumer groups

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Jack Buckner

Interface with customers, local Interface with customers, local

understandingunderstanding

Create strong brand equitiesCreate strong brand equitiesGeneral RoleGeneral Role

Act LocallyAct LocallyThink GloballyThink GloballyPhilosophy Philosophy

North AmericaNorth America

Greater ChinaGreater China

Western EuropeWestern Europeetcetc

Baby, feminineBaby, feminine

Beauty CareBeauty Care

Fabric & Home CareFabric & Home Care..etc..etc

ComprisesComprises

Market Development Market Development

OrganizationsOrganizations

Global Business UnitsGlobal Business UnitsPillarsPillars

Ensuring cutting edge, fully Ensuring cutting edge, fully

integrated, functional capabilityintegrated, functional capability

Single quality , costSingle quality , cost--efficient, efficient,

quick servicesquick services

General RoleGeneral Role

Be the smartest / bestBe the smartest / bestMinimize administration costsMinimize administration costsPhilosophyPhilosophy

Customer BDCustomer BD

Finance & AccountingFinance & Accounting

IT, HR, Legal, MarketingIT, HR, Legal, Marketing

GBS AmericasGBS Americas

GBS AsiaGBS Asia

GBS Europe etcGBS Europe etc

ComprisesComprises

Corporate FunctionsCorporate FunctionsGlobal Business ServicesGlobal Business ServicesPillarsPillars

Global Business Units and Market Development Organizations

Global Business Services and Corporate Functions

Jack Buckner

The Matrix OrganizationThe Matrix Organization

Joint responsibilitiesJoint responsibilities

Risk of being slowRisk of being slow

Requires coRequires co--operationoperation

Can lead to confused Can lead to confused

loyaltiesloyalties

Allows flexibilityAllows flexibility

Teamwork can emergeTeamwork can emerge

Personal growthPersonal growth

Successful with highSuccessful with high--

performance cultureperformance culture

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Jack Buckner

Corporate Structure DebatesCorporate Structure Debates

How do you expand but keep close to the How do you expand but keep close to the consumer?consumer?

How do you define emerging consumer How do you define emerging consumer groups?groups?

What are the boundaries to consumer What are the boundaries to consumer groups?groups?

How do you balance responsibility with How do you balance responsibility with motivation?motivation?

How can a matrix respond quickly?How can a matrix respond quickly?

Jack Buckner

Brand

Product / Service

Consumers

Strategic Brand Management

Customers

Retailers / channel

Corporate structure

Internal partners

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Jack Buckner

Internal Brand ManagementInternal Brand Management

Brand management linked to marketingBrand management linked to marketing

Global brand management and local Global brand management and local marketing?marketing?

Relationship between brand management Relationship between brand management and financeand finance

Shared objective settingShared objective setting

Difficulty of assessing extensionsDifficulty of assessing extensions

Creative aspects of branding can conflict with Creative aspects of branding can conflict with financefinance

Jack Buckner

Organizational Structure and DebatesOrganizational Structure and Debates

Executive Team

Brand /Marketing

Logistics

Finance

Sales

Legal

HR

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Jack Buckner

LetLets extend our brand ups extend our brand up--market?market?

Executive Team

Brand /Marketing

Logistics

Finance

Sales

Well need to

invest in the

brand Better margins

for extra

marketing?

Reduced

capacity? Well lose

customers

Jack Buckner

LetLets extend our brand downs extend our brand down--market?market?

Executive Team

Brand /Marketing

Logistics

Finance

Sales

Become more

competitiveReduced

margins?

Too much

capacity?Great! increased

sales

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Jack Buckner

New ideas and conclusionNew ideas and conclusion

The Tipping PointThe Tipping Point

The Experience EconomyThe Experience Economy

Jack Buckner

The Tipping PointThe Tipping Point

How little things can make a differenceHow little things can make a difference

Unlock the viral potential of a product, Unlock the viral potential of a product,

brand or service to create an epidemic of brand or service to create an epidemic of

demanddemand

Malcolm Gladwell: The Tipping Point, Abacus

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Jack Buckner

The Tipping PointThe Tipping Point

The Law of the few The Law of the few -- key socially key socially

infectious early adopters determine the infectious early adopters determine the

spread of a product, service or brandspread of a product, service or brand

The Stickiness factor The Stickiness factor the intrinsic the intrinsic

contagiousness of a product, service or contagiousness of a product, service or

brand influences adoptionbrand influences adoption

The power of context The power of context the context must fitthe context must fit

Jack Buckner

The Tipping Point in applicationThe Tipping Point in application

Post It notesPost It notes

Microsoft Microsoft Windows launchWindows launch

PfizerPfizer

P & G P & G connector panelconnector panel

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Jack Buckner

Brands and the Tipping PointBrands and the Tipping Point

Role of viral branding / marketingRole of viral branding / marketing

Accelerates decline of traditional brand Accelerates decline of traditional brand

building activitiesbuilding activities

But longevityBut longevity..

Jack Buckner

The Experience EconomyThe Experience Economy

A new economic era A new economic era staging eventsstaging events

You are a performer. Your work is You are a performer. Your work is

theatre. Now act accordingly.theatre. Now act accordingly.

What productions do you want to stage?What productions do you want to stage?

Disney, Starbucks, Nike, ESPN, Weight Disney, Starbucks, Nike, ESPN, Weight

Watchers, Jeep and lots of filmsWatchers, Jeep and lots of films

J. Pine & J. Gilmore: The Experience Economy. HBS press

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Jack Buckner

Experience EconomyExperience Economy

Extract Commodities

Make Goods

Deliver Services

Stage Experiences

Differentiated

Undifferentiated

Competitive

Position

Market Premium

Irrelevant to

Relevant to

Pricing

Needs of

Customers

Jack Buckner

Experience EconomyExperience Economy

Extract Commodities

Make Goods

Deliver Services

Stage Experiences

Differentiated

Undifferentiated

Competitive

Position

Market Premium

Irrelevant to

Relevant to

Pricing

Needs of

Customers

Guide transformationsCUSTOMIZATION

COMMODITIZATION

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Jack Buckner

New Branding IdeasNew Branding Ideas

Expand the techniques available to build Expand the techniques available to build

brands and market productsbrands and market products

Accelerate further the decline of traditional Accelerate further the decline of traditional

marketing and brand buildingmarketing and brand building

Make brand equity evaluation even more Make brand equity evaluation even more

difficultdifficult

But do they render more traditional But do they render more traditional

approaches obsolete?approaches obsolete?

Jack Buckner

Strategic Brand ManagementStrategic Brand Management

The basic concepts are the same:The basic concepts are the same:

Focus on the consumerFocus on the consumer

Understand the brandUnderstand the brand

Awareness of the customerAwareness of the customer

Build brand equityBuild brand equity

Brand image and brand identityBrand image and brand identity

Market positionMarket position

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Jack Buckner

Brand

Product / Service

Consumers

Strategic Brand Management

Customers

Consumer Focussed / Customer Aware

Jack Buckner

Planning Brand StrategyPlanning Brand Strategy

BRAND IMAGE

How the brand is now

perceived

BRAND IDENTITY

How strategists want the

brand to be perceived

Consumer Perceptions Company IntentionsMarketing

Communication

Process

Understand Image Develop identityMarket position

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Jack Buckner

Brand ManagementBrand Management

BRAND IMAGE

How the brand is

now perceived

BRAND IDENTITY

How strategists want the

brand to be perceived

Consumer PerceptionsCompany Intentions

Product

Marketing

Communication

Process

Understand Image

Develop identity

Market position

Jack Buckner

The Brand as a network?The Brand as a network?

Consumer Image Brand Strategy

Market Position

Brand Network

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Jack Buckner

What is ChangingWhat is Changing

Speed Speed

Rapid growth and decline of brandsRapid growth and decline of brands

The sensitivity of the environment (driven by The sensitivity of the environment (driven by

technology)technology)

The range of nonThe range of non--traditional techniques available traditional techniques available

(CRM, viral marketing, experience building)(CRM, viral marketing, experience building)

The expectation for resultsThe expectation for results

Consumer possibilitiesConsumer possibilities

Customer pressuresCustomer pressures

Jack Buckner

Strategic Brand ManagementStrategic Brand Management

Stick to a small number of strong principlesStick to a small number of strong principles

Study the environment Study the environment especially the especially the

consumer and the customerconsumer and the customer

Be courageousBe courageous

And Good luckAnd Good luck..