CREATING POWERFUL BRANDS IN A NEW MARKETING WORLD:

Five Golden Rules

Kevin Lane KellerTuck School of Business

Dartmouth College

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STIMAInternational Marketing Congress

December 5, 2014

One-Time Market Leaders

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Successful Challengers

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Five Golden Rules of Branding

The customer is not in charge … and companies are more empowered too

Simplify … but don’t oversimplify Storytell ing is nice … but great products

and services are better There is no silver bullet … mix and match

activit ies around a brand promise Too much change or not enough change is

deadly … strike the right balance between continuity and change

1. The Customer is Not in Charge

Consumers are obviously more empowered They have the ability to collect information online, check reviews,

and do all kinds of things that they could never do before. But most customers have no interest in being

the “de facto brand manager” of Brand X . They already have a job, a family and many other things that

matter much, much more! Certainly some people do want to get more

involved with a brand Companies should do all they can to accommodate them in the

right way But the fact is i t ’s only some of the people with

some of the brands and even then only some of the time. 5

Not Very or At All Engaged

ModeratelyEngaged

HighlyEngaged

Brand Engagement Pyramid

Brand

Consumers

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Casual Athletes (“If you have a body, you are an athlete”)

“Weekend Warriors”

TopAthletes

Nike “Trickle Down” Engagement Model

Established Broad Access Point

Nike Innovations: Developing an “Ecosystem of Engagement”

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Nike+ FuelBand

NIKEiD Nike+ iPod

“Measurable Personal Improvement through Exercise”

1. … Companies are Being Empowered Too! Technology is empowering companies

as much as it is empowering consumers.

That can be a very good thing. The hope is that this wil l generate more productive exchanges. Companies can create products and deliver

marketing programs that better satisfy customers. Customers can better understand what suits their

needs and inform companies in return.9

2. Simplify … But Don’t Oversimplify

Beware of one word “brand essences” Purity of purpose – good Adequately accommodating consumer and

competitive dynamics – bad The reality is … most consumers

consider multiple factors and multiple brands in making choices

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Competit ive Brand Positioning Model Develop 3-5 unique points-of-difference

Desirable to consumers Deliverable by the company Differentiated from competitors

Establish 2-4 shared points-of-parity Negate competitor PODs Overcome perceived vulnerabilities from own PODs Demonstrate category credentials

With Brian Sternthal & Alice Tybout

Volvo Key point of difference

Safety But a safe car can be a …

Boring car Does Volvo need to be seen as

an excit ing car? No … just not boring!

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Uber Like many new

brands, Uber must establish points-of-parity to allow points-of-difference to matter

Points-of-parity Safe Legal Trusted

Point-of-difference Convenient Comfortable Cool

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BMW Positioned as unique combination of

luxury & performance Luxury cars (e.g., Lexus)

POP – Luxury POD – Performance

Sports cars (e.g., Porsche) POP – Performance POD – Luxury & Comfort

Reflected in U.S. slogan as the “Ult imate Driving Machine”

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Subway

Positioned as unique combination of taste, health, & convenience Fast food competitors (e.g.,

McDonald’s) POP – convenience & taste POD – health

Health food competitors POP – health POD – taste & convenience

Coke’s Misstep Coca-Cola “Real” campaign is

designed to reflect “genuine, authentic moments in l i fe and the natural role the brand plays in them.” The campaign wil l vary from country to country to reflect the differences in reality. Chris Lowe, CMO, January 2003

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What Happened to Coke? “In one ad, actress Penelope Cruz

guzzled a Coke and belched.” “In another ad, a sweaty basketball

player stuck a cold can of Coke in his armpit before offering it to his buddy.”

“Those spots, hallmarks of the doomed "Real" campaign were just the latest in a series of advertising mishaps at Coke.”

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Wall Street Journal, March 30, 2006

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Coca-Cola Posit ioning Points-of-difference

Distinctive taste profile Optimistic view of life Classic, iconic symbolism & imagery

Points-of-parity Contemporary, up-to-date Refreshing flavor

Brand mantra “Uniquely Optimistic Refreshment”

Ad slogan “Coke Side of Life” (Marc Mathieu) “Open Happiness”

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Brand Mantras Short 3-to-5 word phrases that capture the

irrefutable essence or spir it of the brand. Brand mantras typically are designed to

capture the brand’s points-of-difference, i.e., what is unique about the brand.

Key criteria Communicate Simplify Inspire

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Brand Mantra Examples

Nike “Authentic Athletic

Performance” Disney

“Fun Family Entertainment”

American Express “Worldclass Service,

Personal Recognition”

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GE Brand Tools

Brand Strategy: GE Brand Book

Brand Look & Feel: GE Identity Program

3. Storytel l ing is Nice … But Great Products & Services Are Better

Storytell ing can pull together various aspects of a brand and provide an appealing brand backdrop

But fundamentally … the strongest brands are also rooted in product performance

Emotional appeals are often most effective when l inked to functional benefits … it ’s not either/or!

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Power of Strong Value Proposit ions

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VS. VS.

Pampers Pampers evolved from a

functional to an emotional positioning: Absorbency & dry baby “Caring for Baby’s Development”

Pampers changed marketing program accordingly Product development Marketing communications

Caring For Your Baby’s Development

Stimulation&

Learning Care

Diapering& Changing

Managing & TreatingIllnesses

HomeFurnishings

& Travel

Safety

Clothing

Sensors to Locate Child: safe zone, etc

RX

Baby Water

Baby Vitamins

SterilizingProducts

Gates / Locks /Intercoms / Monitors

High Chairs

Bottles/NipplesFormulaPrepared/Dried/Other

Baby FoodsBreast Pumps

Breast Pads

Infant Juices / Drinks

Feeding AccessDisposables

Illness DetectionSensors: e.g. ear infect., dehydration

Mom Hand Cleaners

Diaper Disposal

Infant/Toddler CarSeats

Household Safety Access

Day Care/Baby Sitting

Toys / Books

Videos / Music

Changing Tables

Strollers/Walkers BeddingBeds/Cribs

Diapers / Wipes

Diaper Rash Cream

Bibs

Diaper Bags

Mattress

June 6, 2002Baby Care NBD “Where to Play” Map (North America)

Disp Accessories - Bed Mats, Changing Mats, etc

Personal Cleansing

Feeding, Nutrition &

Water

OTC Medicine

AdjacentHome

Shoes Clothing

In-Market Staffed Project

Re-hydration Drinks Pedialite

Legend for Colors:

Pregnant/LactantWoman’s Nutrition

Feeding Access Durables

Surface Cleaners -Clean ‘n Play

Odor Eliminator and Air Products

LaundryProducts

Hair Care Baby Wash / Soap

Skin Care

Baby Environment

& Hygiene

Sun Care Oral Care

Toilet TrainingAccessories (Potty)

Insurance &Other services

Far Off Equity

Illness DetectionSensors: e.g. SIDS,

vital signs, etc

Wound Patch

Legend for Borders: TBD Fit w/ Pampers

Pampers Communications

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Importance of BlendingFunctional & Emotional

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Facil i tates growth outside the category

Facil i tates choice inside the category

More abstract posit ioning

More concrete posit ioning

Products Can Always Be Differentiated Must stay innovative and relevant

in product and service development

There are so many means of product and service differentiation Must always aspire to push boundaries

and better achieve potential & the “ideal” product or service

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Warby Parker With material for frames from a family-owned

Italian company, assembly in China, and no middleman, it promises quality comparable to that of well-known designers at a fraction of the cost.

Warby Parker eyeglasses sell for a f lat $95 (or $145 for t i tanium frames) with free shipping and free returns.

To assess fit, customers can use a virtual try-on tool employing facial recognition technology or have up to five sample pairs shipped to try on in person.

Promoting “eyewear with a purpose,” Warby Parker donates one pair for every pair sold .

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Brand Resonance Model

RELATIONSHIPS:What about you & me?

RESPONSE:What about you?

MEANING:What are you?

IDENTITY:Who are you?

Intense,Active Loyalty

Positive,AccessibleReactions

Points-of-Parity& Difference

Deep, BroadBrand

Awareness

Resonance

Judgments Feelings

Performance Imagery

Salience

Stages of Brand Development

Branding Objective at Each Stage

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Building Blocks

4. There is No Silver Bullet … Mix and Match Around a Brand Promise

Brands benefit from a range of marketing activit ies Develop fully integrated channel and

communication strategies Make the whole of the branding

program greater than the sum of the parts “Mix & match” to optimally blend strengths &

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Traditional, mass media

communications

“Real world,” experiential

communications

Online, interactive

communications

MARKETING COMMUNICATION INTEGRATION

Mobile,interactive

communications

IntegratingModern Communications

Tradit ional, 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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“The AXE Effect” Online, created interactive viral campaign

with low-budget videos and girls being exaggeratedly attracted to guys

On-air, ran racy, award-winning TV ads Off-air, has concentrated grassroots

marketing efforts on college campuses with brand ambassadors who hand out products, host part ies and generate buzz

With mobile, a Twitter account dispenses advice and giveaways

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Oreo “Celebrate the Kid Inside”

In the U.S., the highly successful campaign was buoyed by celebrations of the brand’s 100 t h birthday anniversary.

Ads and in-store contests created a birthday party atmosphere and focused on the “Twist, Lick and Dunk” method of eating Oreos with milk.

The 100-day “Daily Twist” promotion paired the brand with various cultural images and icons.

The Oreo birthday page received 25 mil l ion l ikes and sales increased 25 percent.

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“Last night, Oreo hit it big with a real-time marketing effort that became the talk–and tweet–of the Super Bowl.”

Oreo “Togetherness” in India

Launch ads reflected Oreo’s updated global posit ioning based on moments of togetherness and featured a father and son in the “twist, l ick, dunk” r itual.

Social media has Indian parents sign an “Oreo Togetherness Pledge” promising to spend more quality t ime with their children.

An Oreo Togetherness Bus roams the country providing a platform for parents and children to catch fun family moments.

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Benefits of Cause Marketing Improving social welfare (“win-win”) Creating differentiated brand positions Elicit ing emotional responses from

consumers Building strong bonds with consumers Enhance company’s public image Create reservoir of good wil l Boost employee morale Drive sales

Five Classic Cause Programs

American Express & Charge Against Hunger

The Avon Breast Cancer Crusade Ronald McDonald House

Charit ies Tesco – Computers for Schools Brit ish Airways – Change For

Good

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5. Avoid Too Much Change or Not Enough Change: Strike the Right Balance Between Continuity and Change

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

modernizing, over-discounting Avoid death by “1000 cuts”

It is easy to take advantage of a successful brand “The brand is so strong, so what if this is ‘off

brand’? How can this one little decision matter?”

Multiple compromises add up and can create big problems

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Respect the Brand Understand and appreciate the

brand and what it could be Cultivate internal brand experts and

advocates Preserve the legacy and integrity of the

founder

Help The Brand Reach its Potential Develop appropriately

aspirational brand positioning Have a “foot in the present” and a

“foot in the future” With the optimal “weight” on each foot

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What Are These Brand Potentials?

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Cisco Cisco seeks to transform its

image … from largest seller of switches and

routers to … a provider of voice, video, data and

wireless products to facilitate collaboration

Launched $100 mill ion marketing campaign

New logo, TV & print ads and product placement (“The Office”), Web blogs, chat rooms

“Welcome to the Human Network”

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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

Virgin Brand strategy is to enter

categories where customers needs are not well met and … Do different things & Do things differently

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Compromising Brand Promise Too Often? Going into markets where consumer needs

are being reasonably well-met by others Over-Drawing Brand “Bank

Account” With Consumers? “Good things” – deposits “Bad things” – withdrawals

Virgin Mistake?

What’s a Brand Worth? It ’s worth what you can do with it … Consider Snapple

Quaker buys Snapple for $1.7 bil l ion in 1994 Sold to Triarc for $300 mill ion in 1997 Sold to Cadbury-Schweppes (with Mistic, Royal

Crown, etc.) for $1.45 bil l ion in 2000 Snapple value estimated at $1 bil l ion

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Snapple Was a Strong Brand Established “New

Age” beverage category

Points-of-dif ference All-natural Variety Down-to-earth Quirky

Points-of-parity Quality Accessible Taste

Mantra “Fun, Fresh, & Real”

Well-executed marketing program

Distinctive, wide-mouthed bottles

Constant innovation Humorous “Snapple

Lady” ads Oxymoronic

spokespeople Rush Limbaugh Howards Stern

Quaker Changes Cut number of f lavors (and didn’t introduce new

products quickly enough) Couldn’t capitalize on independent distribution

system Changed packaging to accommodate

supermarkets (e.g., 64 oz. bott les) Changed advertising & promotions (targeted

Coke & Pepsi) Fired Rush Limbaugh, Howard Stern, & Wendy Ignored seasonality of the business Underestimated competit ion & market trends

Triarc Revital ization Strategies Emphasize seasonality – dove into

summer Motivate distribution network

Drop supermarket packaging Develop product innovations

Whipper Snapple, Elements, Farms Re-engage advertising & promotions Update graphics on packaging

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The Five Golden Rules of Branding

The customer is not in charge … companies are also becoming more empowered

Simplify … but don’t oversimplify Storytell ing is nice … but great products

and services are better There is no silver bullet and there are no

short-cuts … mix and match around a brand promise

Strike the right balance between continuity and change … your past and your future

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Final Thought Good branding is an art and a science Success in brand marketing involves:

Achieving balance in all brand planning and execution

Finding the “win–win” sweet spots! By being …

Analytical & systematic – applying key concepts Creative & inspired – guided by a philosophy

Thank You & Good Luck!

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