Proprietary and confidential Do not distribute

Making Competitors Irreverent

DAVID A. AAKERVice Chairman, Prophet

Blog: davidaaker.com

Top Marketing Forum, MoscowApril, 2012

Brand Relevance 2

BrandRelevance

MarketDynamics

Brand Relevance 3

0

10

20

30

40

50

60

70

1971 1975 1980 1985 1990 1995 2000 2006

Kirin

Asahi

Asahi-Kirin Beer War

Brand Relevance 4

Brand PreferenceBrand Relevance

SUV BMW

Select Brand to Buy

Lexus BMW Cadillac

Select Product Category or Subcategory

Customer Decision Process

DetermineBrands

To Consider

Brand Relevance 5

Routes to Winning

BrandPreference

BrandRelevance

VS.

Competitor Brand

Not Preferred

Competitor Brand

Not Considered

WinningMeans

Brand Relevance 6

Innovation Continuum

Innovation Incremental Substantial Transformational

OfferingEnhancement

NoticeableImpact on

Brand Preference

New CategoryOr Subcategory

GameChanger

Body Armor with

duPont Kelvar

Hybrid &Electric

Fleet

Brand Relevance 7

Test—New Category/Subcategory?

• Can we deliver?• Is there a “must have”?• Business worthwhile?• Legs?

Brand Relevance 8

The Payoff

1982-1998 No Competition

Brand Relevance 9

The Pay Off

• 108 Business launches: Those creating new categories subcategories:

• 14% of sample• 38% of revenue• 61% of profits

• McKinsey Study: 1,000 firms, 40 years• New entrants• Return premium over average for their industry• First year 13%• 3% in fifth year• 1 % in tenth year

• New Product Success Correlated with Differentiation

Brand Relevance 10

How?

Create Barriers to CompetitorsBecome the Exemplar

Brand Relevance 11

Create Barriers

• Execute over the top

• Continuously innovate

• Branded differentiators

Nano Shuffle Touch Ipad

Brand Relevance 12

Alpine Class Fill

OuterStyle OuterStyle

The Power of Brands

Proprietary and Confidential PROPHET13

Branded Ingredients

Shampoo/ConditionerWith

Weightless Moisturizer

Brand Relevance 14

Branded Service

Proprietary and Confidential PROPHET15

Branded Package

Brand Relevance 16

Branded Technology

Brand Relevance 17

How?

Create Barriers to CompetitorsBecome the Exemplar

Brand Relevance 18

Become the Category or Subcategory Exemplar

The Exemplar BrandRepresents Category or Subcategory

Defines

Connects

Brand Relevance 19

Becoming an Exemplar

• Market the category/subcategory and not the brand• Be the early market leader• Be the authentic brand

Brand Relevance 20

Swiffer

Exemplar Brands

iPod

Brand Relevance 21

You do not merely want to be considered just the best of the best,

You want to be considered the only onewho do what you do.

Jerry Garcia, The Grateful Dead

Brand Relevance 22

Staying Relevance

No longer makewhat customersare buying

Lose EnergyOr Credibility

Energy bar for Women

Brand Relevance 23

BrandRelevance

MarketDynamics

Proprietary and confidential Do not distribute

Making Competitors Irreverent

DAVID A. AAKERVice Chairman, Prophet

Blog: davidaaker.com

Top Marketing Forum, MoscowApril, 2012