THE NEW BRANDING IMPERATIVES

Kevin Lane Keller

Tuck School of Business Dartmouth College

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MSCOM Excellence-in-communications Lecture

BMW, Dielsdorf

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My Textbooks

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My Experience

The New Branding Imperatives   Fully and accurately factor the consumer

into the branding equation   Go beyond product performance and

rational benefits   Make the whole of the marketing program

greater than the sum of the parts   Understand where you can take a brand

(and how)   Do the right thing with brands   Take a big picture view of branding effects

and know what is working (and why) 4

Branding Imperative #1

  Fully and accurately factor the consumer into the branding equation   Recognize what consumers know and don’t

know about brands   Recognize what consumers want and don’t want

from brands   Recognize how consumers actually make

decisions   Recognize consumer diversity

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Nike   Brand Mission: To bring inspiration and innovation

to every athlete in the world   ”If you have a body, you’re an athlete”

  Brand Values   Inspire   Innovate   Focus   Connect   Care

  Brand Mantra   Authentic Athletic Performance

Interactive Communications   Web site

  Ratings, reviews & feedback

  Company-generated   Consumer-generated

  E-mails & texts   Banner, rich

media, etc. ads   Search

advertising

  Social media   Communities &

Forums   Bloggers (Individuals

& Networks)   Facebook   Twitter   YouTube

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Interactive Communications

  Establish an active public voice and presence on the Web   Allow consumers to engage at a deep & broad level   Complement and reinforce other communications   Ensure innovation & relevance

  But remember … not everyone participates actively in social media   Only some of the consumers want to get involved with   Only some of the brands they use   Only some of the time.

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Branding Imperative #2

  Go beyond product performance and rational benefits   Craft well-designed products and

services that are functionally and aesthetically appealing

  How they work, look, feel, etc.

  Provide reinforcing rational and emotional benefits

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Apple   Sustained product innovation from inception

  Macintosh personal computers   PowerBook laptops   iPod portable music player   iTunes music download website   iPhone mobile phone & apps   iPad tablet computer

  Strong brand promise   Performance & design

  How a product works, looks, & feels

  Personality & character   “Think Different”

Feed-back

Expan-sion

Dimensions of Brand Feelings

Brand feelings can be divided into two broad categories:   Experiential – immediate, short-lived during purchase/consumption   Enduring – private, possibly part of day-to-day life Brands should have one, or ideally both, types of feelings

Experiential Feelings

•  Warm

•  Fun

•  Exciting

Increasing level of intensity

Enduring Feelings

•  Sense of Security (Inner-directed)

•  Social Approval (Outer-directed)

•  Self-Respect (Actualization)

Self-Respect

Sense of Security Social Approval

Inner-Directed Outer-Directed

Higher level of values & needs

Branding Imperative #3

  Make the whole of the marketing program greater than the sum of the parts   Develop fully integrated channel

and communication strategies   “Mix & match” to optimally blend

strengths & weaknesses

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Red Bull

  Employs a full set of brand elements and marketing activities   Creative brand name, logo, packaging and

slogan (“Red Bull Gives You Wings”)   Strong on-premise and in-store marketing   A variety of direct-to-consumer

communications   Traditional media advertising & sponsorship   Non-traditional events & promotions

Red Bull Activities, Events & Experiences

Modern Communication Programs

  Traditional, mass media communications   Greater control

  Online interactive communications   Greater relevance

  “Real world” experiential communications   Greater engagement

  Mobile interactive communications   Greater timeliness

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Traditional, mass media

communications

“Real world,” experiential

communications

Online, interactive

communications

FUTURE MARKETING COMMUNICATION INTEGRATION

Mobile, interactive

communications

Communication Option A (e.g., TV)

Communication Option C (e.g., Event)

Communication Option B (e.g., Internet)

Audience Communication Option Overlap

Note: Circles represent the market segments reached by various communication options. Shaded portions represent areas of overlap in communication options.

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Evaluating IMC Programs

  Coverage   Cost   Contribution   Commonality   Complementarity   Versatility

Branding Imperative #4

  Understand where you can take a brand (and how)   Design and implement a new product

development and brand architecture strategy

  Understand brand potential   Introduce appropriate brand extensions   Brand extensions properly

  Maximize long-term growth across customer segments and geographical markets

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Nivea “caring and “gentle” cuts across

many categories

Selected Brand Extension Research Findings

1. Successful brand extensions occur when the parent brand is seen as having favorable associations and there is a perception of fit between the parent brand and the extension product.

2. There are many bases of fit: product-related attributes and benefits, as well as non-product-related attributes such as common usage situations or user types.

3. Fit may also be based on technical or manufacturing commonalties or more surface considerations such as necessary or situational complementarity.

4. Knowledgeable “experts” are more likely to use technical or manufacturing commonalities to judge fit; less knowledgeable “novice” consumers are more likely to use superficial considerations.

5. Consumers may transfer associations that are positive in the original product class but become negative in the extension context.

6. Consumers may infer negative associations about an extension, perhaps even based on other inferred positive associations.

7. High quality brands stretch farther than average quality brands, although both types of brands have boundaries.

8. A brand that is a product category prototype or exemplar can be difficult to extend.

9. It can be difficult to extend into a product class that is seen as easy-to-make.

10. A successful extension can contribute to the parent brand image and enable a brand to be extended even farther.

11. An unsuccessful extension does not prevent a firm from “backtracking” and introducing a more similar extension.

12. An unsuccessful extension hurts the parent brand only when there is a strong basis of fit between the two.

13. The most effective advertising strategy for an extension is one which emphasizes information about the extension (rather than reminders about the parent brand).

Selected Brand Extension Research Findings

BRAND EXTENDIBILITY SCORECARD

Allocate points according to how well the new product concept rates on the specific dimensions in the following areas:

Consumer Perspectives: Desirability 10 pts. _____ Product category appeal (size, growth potential) 10 pts. _____ Equity transfer (perceived brand fit) 5 pts. _____ Perceived consumer target fit

Company Perspectives: Deliverability 10 pts. _____ Asset leverage (product technology, organizational skills, marketing

effectiveness via channels & communications) 10 pts. _____ Profit potential 5 pts. _____ Launch feasibility

Competitive Perspectives: Differentiability 10 pts. _____ Comparative appeal (many advantages; few disadvantages) 10 pts. _____ Competitive response (likelihood; immunity or invulnerability from) 5 pts. _____ Legal/regulatory/institutional barriers

Brand Perspectives: Equity Feedback 10 pts. _____ Strengthens parent brand equity 10 pts. _____ Facilitates additional brand extension opportunities 5 pts. _____ Improves asset base

TOTAL _____ pts

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Brand Stretch Successes

  Some of the world’s strongest brands have been stretched across multiple categories

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But … Don’t Forget the “Spandex Rule”

  “Just because you can … doesn’t mean you should!”   Scott Bedbury, formerly

VP-advertising Nike & VP-marketing Starbucks

  Especially a worry with luxury brands   Defined in part by

lifestyle

Branding Imperative #5

  Do the right thing with brands   Embrace corporate social

responsibility   Develop point-of-view on societal,

environmental and community issues   Create “win-win” cause marketing programs

and activities

  Manage brands for the long-run   Avoid over-exposing, over-extending, over-

modernizing, over-discounting

  Avoid death by “1000 cuts”

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Benefits of Cause Marketing   Improving social welfare (“win-win”)   Creating differentiated brand positions   Eliciting emotional responses from consumers   Building strong bonds with consumers   Enhance company’s public image   Create reservoir of goodwill   Boost employee morale   Drive sales

Branding Imperative #6

  Take a big picture view of branding effects and know what is working (and why)   Achieve greater accountability for

marketing investments in brands   Adopt comprehensive, cohesive, and

actionable models to help develop ROI insights and interpretations

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Three Models to Facilitate Brand Planning

  To help guide these efforts, three models of increasing scope can be used: 1) Brand Positioning Model

  How to guide integrated marketing to maximize competitive advantages;

2) Brand Resonance Model   How to create intense, activity loyalty

relationships with customers; and

3) Brand Value Chain Model   How to trace the value creation process

to better understand the financial impact of marketing investments.

Customer Mindset

Marketing Activity

Market Performance

Shareholder Value

Points of Difference

Points of Parity

A Comprehensive Set of Branding

Metrics

3) Brand Value Chain Model

2) Brand Resonance Model

1) Brand Positioning Model

Resonance

Judgments Feelings

Performance Imagery

Salience

Conclusions   Brands will survive and can thrive the

more they provide the basic functions of branding   Reduce risk; set expectations; deliver on

promises; create differentiation

  Successful branding requires doing a variety of different things well in an increasingly challenging environment   Six new branding imperatives

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Conclusions   Building a powerful 21st century brand

will involve   Tackling old problems   Addressing new challenges

  By being ...   Analytical & systematic

  Creative & inspired

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Thanks!