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number one in Seltzer's new Design Intelligence Breakfast Forums series b r a n d v a l u e is your brand strong enough to weather the down economy?

Brand & Value: Is Your Brand Strong Enough to Weather the Down Economy?

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Slide presentation from the Seltzer Design Breakfast Forum #1 (9.08) on branding in a down economy. Talk was given by Rochelle Seltzer, Annie Smidt, and Shelley Hall.

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Page 1: Brand & Value: Is Your Brand Strong Enough to Weather the Down Economy?

number one in Seltzer's new Design Intelligence Breakfast Forums series

b r a n d v a l u eis your brand strong enough to weather the down economy?

Page 2: Brand & Value: Is Your Brand Strong Enough to Weather the Down Economy?

r o c h e l l e s e l t z e rs e l t z e r

how to supercharge your brand

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a brand is:

A person’s perception of a product, service, »»experience or organization.

The promise made to the client»»

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brands with tribes of brand loyalists

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They build trust when the brand personality »»attributes are authentic and the brand is consistent.

brands help people make connections

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Define a clear vision and mission»»

Nail your positioning —based on a »»specific focus

getting started:

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Who are you?1»

What do you do?2»

Why does it matter?3»

Your position must differentiate + be desitinctive!

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it’s time to execute!

Use strong visual design and an authentic »»“voice” to attract your prospects.

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differentiates and connects with »»target audiences

breakthrough design…

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and more profitable than their competitors.»»

design contributes to brandsthat are leaders…

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Distinctive »»Relevant »»Memorable »»Extendable »»and have Depth»»

Be sure your materials are:

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why now?

The “Attention Economy” throws too many »»choices at us. Brands that communicate value help us make choices.

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DO:

Stay true to strong positioning»»Be innovative, creative and consistent»»Train for strong verbal branding»»Be visible in your market»»Become a thought leader»»Use these times as an opportunity»»Stay focused, positive and enthusiastic»»

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Use electronic media to reach audiences »»regularlyUse print creatively»»Be sure your website is great»»Promote your site»»Develop a strong tagline»»

Spend your marketing budget wisely!

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print using limited colors and economical papers

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use online printers

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print campaign componentstogether

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use interesting papersand formats

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create a compelling website

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create a compelling website

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taglines

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taglines

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taglines

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taglines

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taglines

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taglines

jwa. orgJewish Women’sArchive

where history lives and grows

jwa. org jwa. org jwa. org jwa. orgjwa. orgJewish

Women’sArchive

where history lives and grows

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taglines

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what’s in your omelet?

positioning

website

reputation

PR andadvertising

articles speakingbooks

verbalbranding

physicaldeliverables

offering

name

tagline

visualidentity

printcollateral

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stronger by the dozen

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a n n i e s m i d ts e l t z e r

your brand’s short- and long-term roi

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I like to look good, but…

is it worth it?

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target: product design

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target: communications design

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target: prioritizing brand

1

uniquely: TargetThough we operate about 1,600stores from coast to coast, our guests understand there is only oneTarget. Our Expect More. Pay Less.brand promise means that we bringoutstanding quality and great designtogether at an incredible price; we combine innovative marketing with clean, bright stores and friendlyteam members, creating a delightfulexperience for our guests every timethey walk through our doors. Add it all up and no matter how many stores we open, Target will remain one of a kind.

3

uniquely: InnovativeOur GiftCards continue to lead the industry in creativity,convenience and popularity. We offer a broad, seasonallyfresh assortment of distinctive GiftCard designs—including an innovative card made of PHA, a 100 percentbiodegradable and compostable material—to help reinforce our brand and fuel incremental sales and profit.

uniquely: FunThe Target culture can be explained in three simple words:Fast, Fun and Friendly. Our team members bring those wordsto life in our stores by delighting our guests with great serviceand helping them find the products they want and need,whether it’s vitamins or the latest video game.

4

uniquely: StyledWe are committed to a shopping experience that constantlyevolves to fit the ever-changing wants and needs of ourguests—even our shopping carts and baskets are designedwith our guests in mind. We remain true to the fundamentalsthat make us uniquely Target: clean, wide store aisles, fullystocked shelves, friendly team members and distinctive storeexteriors thoughtfully designed to fit the local landscape.

uniquely: EngagedAs a responsible steward of the environment, we have a solid record of making environmentally friendly decisions.To fulfill our commitment, we engage in activities as simple as carrying organic produce and reusing garment hangers,and as visionary as utilizing renewable energy resources—all because it’s the right thing to do for our communities and our business.

5

uniquely: Value DrivenWe continue to delight guests with unbeatablevalues on a variety of offerings, which include:limited-edition collections in apparel, accessoriesand home, seasonal assortments that capturethe latest fashion and trends, food and basiccommodities, and exceptional values in ourfront-of-store treasure trove, See.Spot.Save.

2

uniquely: BrandedGuests expect great things from Target—a responsibility we take seriously. Our brand’s strength shows in our iconicBullseye, which today is recognized by 96 percent ofAmericans. But it’s about more than the Bullseye alone. We’reconstantly finding new and exciting ways to delight our guests—in our stores, online, through our advertising campaignsand our extensive community involvement.

source: Target Corporation 2007 Annual Report

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target: growthFinancial Highlights – Continuing Operations

$42,

025

$46,

839

$52

,620

$59

,490

Total Revenues (millions)

2007 Growth %: 6.5%Five-year CAGR: 11.1%

$3,

159

$3,

601

$4,3

23 $5,

069

Earnings Before Interest Expense and Income Taxes (EBIT) (millions)

2007 Growth %: 4.0%Five-year CAGR: 13.4%

$1,6

19

$1,8

85 $2,

408

$2,

787

Earnings from Continuing Operations (millions)

2007 Growth %: 2.2%Five-year CAGR: 15.7%

$1.7

6

$2.

07

$2.

71 $3.

21

$63

,367

$5,

272

$2,

849

$3.

33

Diluted EPS

2007 Growth %: 3.9%Five-year CAGR: 17.1%

2007 Capital Expenditures($4.4 billion)

• New Stores• Remodels & Expansions• Information Technology, Distribution & Other

71%7%

22%

2007 Sales Mix($61.5 billion)

• Consumables & Commodities• Electronics, Entertainment, Sporting Goods & Toys• Apparel & Accessories• Home Furnishings & Décor• Other

22%

19%

3%

34%

22%

Financial Highlights – Continuing Operations

$42,

025

$46,

839

$52

,620

$59

,490

Total Revenues (millions)

2007 Growth %: 6.5%Five-year CAGR: 11.1%

$3,

159

$3,

601

$4,3

23 $5,

069

Earnings Before Interest Expense and Income Taxes (EBIT) (millions)

2007 Growth %: 4.0%Five-year CAGR: 13.4%

$1,6

19

$1,8

85 $2,

408

$2,

787

Earnings from Continuing Operations (millions)

2007 Growth %: 2.2%Five-year CAGR: 15.7%

$1.7

6

$2.

07

$2.

71 $3.

21

$63

,367

$5,

272

$2,

849

$3.

33

Diluted EPS

2007 Growth %: 3.9%Five-year CAGR: 17.1%

2007 Capital Expenditures($4.4 billion)

• New Stores• Remodels & Expansions• Information Technology, Distribution & Other

71%7%

22%

2007 Sales Mix($61.5 billion)

• Consumables & Commodities• Electronics, Entertainment, Sporting Goods & Toys• Apparel & Accessories• Home Furnishings & Décor• Other

22%

19%

3%

34%

22%

source: Target Corporation 2007 Annual Report

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target: profits vs. walmart

Walmart Target Walmart Target Target Walmart

source: Saj Karsan blogging at Barel Karsan Value Investors barelkarsan.com/2008/08/walmart-vs-target.html

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service and b2b companies that brand strongly

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sullivan shuman freedberglogo before + after

after

before

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sullivan shuman freedbergrebranded materials

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design council

Helping businesses become more successful, »»public services more efficient and designers more effective

We believe design can help people to do »»what they do, better. We demonstrate that design can play a vital role in strengthening our economy and improving our society.

source: http://www.designcouncil.org.uk/

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design index + emerging index

1993-2004»»

March 1995 - March 2000 March 2000 - March 2003 2003 - December 2004

source: http://www.designcouncil.org.uk/

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design index companies

3i GroupAEA TechnologyAllied DomecqAstraZenecaBAABAE SystemsBarclaysBarr (A.G.)Body Shop InternationalBoots GroupBPBritish AirwaysBritish Sky Broadcasting GroupBT GroupCadbury SchweppesCambridge Antibody Technology GroupCentricaDiageoEasyjetEggEidos

EmapEMI GroupGallaher GroupGKNGlaxoSmithKlineGUSHilton GroupHSBC HoldingsImperial Chemical IndustriesInvensysManchester UnitedMarks & Spencer GroupMatalanMFI Furniture GroupMorrison (Wm) SupermarketsOxford InstrumentsPearsonPsionReckitt BenckiserRentokil InitialReuters GroupRM

Rolls-Royce GroupRoyal Bank Of Scotland GroupSainsbury (J)Scottish & NewcastleScottish & Southern EnergyShell Transport & Trading CoSmith & NephewSmith (WH) GroupSSL InternationalTescoTomkinsUltra Electronics HoldingsUnileverVodafone GroupWetherspoon (J D)WhitbreadWoolworths GroupWPP Group

source: http://www.designcouncil.org.uk/

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emerging index companies

Associated British Ports HoldingsAbacus GroupAggregate IndustriesAegis GroupAlliance & LeicesterAmecArena LeisureArrivaAutonomy CorporationAvivaAvis EuropeBabcock International GroupBradford & BingleyBarratt DevelopmentsBG GroupBTGBiocompatibles InternationalBerkeley Group HoldingsBritish Land Co.Bloomsbury PublishingBOC GroupBPBBritish VitaBovis Homes GroupCapital Radio

Chemring GroupChrysalis GroupCarphone Warehouse GroupCorus GroupCable & WirelessDairy Crest GroupDomnick Hunter GroupDe La RueDiplomaElementisFirst Choice HolidaysFKIGeestGreene KingGWR GroupHBOSHalmaHornbyInterContinental Hotels GroupImagination Technologies GroupImperial Tobacco GroupInternational PowerIntec Telecom SystemsITV

Johnson MattheyKelda GroupKingfisherLiberty InternationalLloyds TSB GroupLastminute.comLaing (John)LogicaCMGLondon Stock ExchangeMcAlpine (Alfred)Marconi CorporationMisysMothercareNational Grid TranscoNextmmO2Paragon Group of CompaniesPace Micro TechnologyPilkingtonPrudentialPatientlineRACRexamRoyal & Sun Alliance Insurance Group

RenishawRestaurant GroupStagecoach GroupSage GroupSignet GroupShanks GroupSmiths GroupSomerfieldSevern TrentTate & LyleTrafficmasterTrinity MirrorTrifastTTP CommunicationsTaylor WoodrowUnited UtilitiesViridian GroupWilmington GroupWilson BowdenWarner Estate HoldingsWolverhampton & DudleyXansa

source: http://www.designcouncil.org.uk/

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a quick definition

FTSE 100 =»» Index of the 100 most highly- capitalised companies listed on the London Stock Exchange.

FTSE All Share Index =»» Index containing the 700 largest companies on the London Stock Exchange.

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findings

Findings

1.1 Introduction

This report updates ‘The Impact of Design on Stock Market Performance’, a seminal pieceof research commissioned by the Design Council in 2003 to analyse the relationship betweendesign and the financial performance of companies.

That report reviewed the performance of UK FTSE-quoted companies between 1994 and2003, encompassing a long bull market period, from March 1995 to March 2000, the bearmarket period from March 2000 to March 2003, and the more recent recovery period. Thekey finding of that study was that a group of 63 companies identified as effective users ofdesign outperformed the FTSE 100 index over the full period by 200 per cent, beating theirpeers in both bull and bear markets.

Since December 2003, the Design Council has been working with FTSE on the developmentand monitoring of two indices based on that research, consisting of the leading companies(the Design Index) and a wider group (the Emerging Index) identified as being emergingusers of design. This new edition of the report reviews the performance of the two indices inthe intervening 12 months to December 2004, and their performance over the longer periodassessed by the original study.

1.2 General overview

The companies have significantly outperformed the FTSE-100 and FTSE-All Share indicesover a ten-year period:

Chart 1: Ten-year performance 1995-2004

Design IndexEmerging IndexFTSE 100FTSE All Share

4000

3500

3000

2500

2000

1500

1000

5001994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

06

Findings

1.1 Introduction

This report updates ‘The Impact of Design on Stock Market Performance’, a seminal pieceof research commissioned by the Design Council in 2003 to analyse the relationship betweendesign and the financial performance of companies.

That report reviewed the performance of UK FTSE-quoted companies between 1994 and2003, encompassing a long bull market period, from March 1995 to March 2000, the bearmarket period from March 2000 to March 2003, and the more recent recovery period. Thekey finding of that study was that a group of 63 companies identified as effective users ofdesign outperformed the FTSE 100 index over the full period by 200 per cent, beating theirpeers in both bull and bear markets.

Since December 2003, the Design Council has been working with FTSE on the developmentand monitoring of two indices based on that research, consisting of the leading companies(the Design Index) and a wider group (the Emerging Index) identified as being emergingusers of design. This new edition of the report reviews the performance of the two indices inthe intervening 12 months to December 2004, and their performance over the longer periodassessed by the original study.

1.2 General overview

The companies have significantly outperformed the FTSE-100 and FTSE-All Share indicesover a ten-year period:

Chart 1: Ten-year performance 1995-2004

Design IndexEmerging IndexFTSE 100FTSE All Share

4000

3500

3000

2500

2000

1500

1000

5001994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

06

source: http://www.designcouncil.org.uk/

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This table summarises the performance over all the key periods:

Table 1: Performance relative to FTSE indices

Indices

Absolute Performance

FTSE 100

FTSE All-Share

Design Index

Emerging Index

Relative to FTSE 100

Design Index

Emerging Index

Relative to FTSE All-Share

Design Index

Emerging Index

No ofcompanies

100

700+

61

97

61

97

61

97

Full period28 Dec

1994 to 29Dec 2004

+57.0%

+58.5%

+262.6%

+305.6%

+205.5%

+248.6%

+204.1%

+247.2%

Bull market27 Mar

1995 to 31Mar 2000

+108.4%

+102.2%

+231.0%

+235.1%

+122.6%

+126.6%

+128.9%

+132.9%

Bear market31 Mar 2000

to 31 Mar2003

-41.7%

-41.3%

-24.7%

-29.7%

+17.0%

+12.0%

+16.7%

+11.7%

Recoveryperiod

31 Mar 2003to 29 Dec

2004

+26.2%

+32.1%

+43.0%

+74.3%

+16.8%

+48.1%

+10.9%

+42.1%

07

performance relative to FTSE indices

source: http://www.designcouncil.org.uk/

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some inspiration/aspiration

Brands that stay strong and survive no »»matter what the weather are those that stay consistent. Your brand has meaning and strength only if it owns something in the mind.

– laura ries ries & ries

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s h e l l e y h a l lc a t a l y t i c m a n a g e m e n t

your brand is a promise made to your clients

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Organizational Dimension Moment of Truth

Practice Areas Sales

Departments Customer Service

Positions Service or Product Delivery

Client Support

map your customer interactions

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conduct a brand audit

Sales»»Internal»»External»»

Service / Product Delivery»»Customer Service / Support»»Operations»»New Hire Orientation»»

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stages of brand support

Where would your organization and its »»employees rank on brand support?

awareness knowledgable believer enthusiast

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are you keeping your brand promise?

Train and Retrain»»Employees»»Business Partners»»Contractors»»Referrers»»Vendors»»

Can they sell and support Your Brand?»»Is their Brand Message consistent?»»

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Re-engineer to Support Your Brand

Business Processes »»Identify Barriers for Employees»»Create system for monitoring brand support »»internallyCreate system to monitor client perceptions of »»brand and share throughout your organization

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cmo council

As market pressures increase and margins »»erode, the commitment to operational excellence frequently lags, often under- mining the quality and consistency of the customer experience and the level of brand advocacy and affinity

– cmo council report on customer affinity 2008

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some inspiration

Accept and embrace that your “Brand” is your »»first sales call!