Strategic Brand Management Advanced understanding of ...

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Strategic Brand Management Advanced understanding of consumer and brand value

Sneak Preview

Roland Berger

New York, Paris, Munich October 2002

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• The brand strategy has a direct impact on the brand's corporate value, i.e. success on the market, growth, market share, price, margins, and earnings – and thus on market capitalization and corporate value

The "right" or "wrong" brand strategy has immediate impact on business success, profitability – and thus on corporate value

• The importance of brands is ever increasing: Consumers are increasingly "bombarded" with advertising messages and information. As a consequence of this information overkill, a brand has become the abbreviation of all its positive and negative rational and emotional associations – brands increasingly give people orientation and identity in a "crazy" world

• Brand companies are ever battling against numerous "imperfections"– Sales managers, marketing managers, and product developers often work in isolation from each other.

As a result, the marketing mix is usually individually optimised, "overloaded“ and not entirely conclusive

– The results of the various players along the strategic brand development process are not compatible with each other, i.e. a huge "loss of information" between market researchers, strategists, and advertising creatives is the consequence

– The success or failure of a particular brand strategy is often difficult to explain. Discussion about the strategic development of brands tend to be abstract and are generally subject to the emotional, subjective impressions of the people involved: the "language" is prone to misunderstandings

Thus, the strategic development of brands often happens "by coincidence"

Source: Roland Berger

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QualitativeResearch

Pitch? Communication Execution

5

Packaging Execution6

Point-of-sales Execution7

Promotion Execution8

Approval5

Approval6

Approval7

Approval8

Adv

ertis

ing

Com

mun

icat

ions

Age

ncie

s

IdeaManagement

CreativeBrief

QualitativeSWOT

QuantitativeSWOT Brand Strategy Approval

AFollow up ?

ProductAssortment

Price

Place/ Distribution

Execution1

Execution2

Execution3

ActionPlan

Approval1

Approval2

Approval3S

trat

egy

Con

sulta

nts

StructurePlan

Follow up ?

OrganisationalTransformation

Execution4

Approval4

ApprovalB

QuantitativeResearch

Source: Roland Berger - Strategic Brand Development Group

Brands are developed "by coincidence" – the strategic brand management process is fragmented

Qual/QuantResearch

Qual/QuantSWOT

Brand StrategyRecommendation

Brand Diagnosis Brand Strategy Development Brand Strategy Implementation

MarketResear-cher

Launch

Core competence, area of expertise of external service providerAdditional services Little or no coordination between processes

SolutionCreation

SolutionApproval

ExecutionStrategy Conception

StrategyApproval

MarketResearch

SWOTAnalysis

Up to 8 independent approvals and executions by different standards

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Coca-Cola

Redbull MTVViva

Nike

McDonalds

Pro7

RTLNivea

Tempo

TesaSAT1

Uhu

ARD

ZDF

Aspirants Aspirants Champs Champs

Red giants

Sony

Wrigleys

Varta

Dritte

Siemens

Source: Roland Berger – German Brand Championship 2002 (TNS Emnid Data, March 2002, n=1.500, Population 14-65 yrs. CATI)

The consequence: The overwhelming majority of leading brands have little or no effect

Lift

Drift

High

Low

Low

High

Energyof brand core

i.e.thrust to

acceleratebrand

MassActive brand user base

Black holesGravity center

Whitedwarfs

Best Performer Lift/ Drift StarBest Performer Lift/ Drift Star

Hopefuls Hopefuls Mainstream Mainstream

Telekom

Ideal position(virtual)

Yellowsuns

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A brand strategy must result in a conclusive, focused and efficient marketing mix – and must be economically viable

Source: Roland Berger- Strategic Brand Development Group

What is the "actual" position of a brand from the consumer's perspective?i.e. what is the Actual Value Perception (AVP), Projection (PVP), Actual Consumer Base, competitive environment

What "ideal" target position should the brand take in the competitive environment?i.e. the Target Value Proposition (TVP) that is strategically differentiated from the competition

What is the optimal brand strategy from the "actual" to the "ideal" brand position?i.e. Road map including mile stones from actual to target position of a brand

What are corresponding measurements for the entire marketing mix? i.e. Action plan, Future Execution (FX) that are consistent across the entire marketing mix

What are the costs involved and what is the impact on the business plan?i.e. Cost of re-positioning, consequences for turnover, margin and profitability in the short, mid, and long term

The five key questions for developing a brand strategy

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StrategyOption AOption BOption C

StrategyOption AOption BOption C

Step 1 Step 2 Step 3 + -Step 1 Step 2 Step 3 + -

E

+

R

Solidarity Stimulation

Solution

T

C

P

VCC

T

Q

–

"Price"

F

S

N

P

P

C N

2

P

StrategyRoad map to TVP

StrategyRoad map to TVP

T

Roland Berger has developed a unique "platform" – the rb Profiler –for the entire strategic brand development process


Brand Account Projection/ Past Execution Brand Account Projection/ Past Execution

A A

B B C C

33

22

11

Marketing MixMarketing Mix

CompetitionCompetition

Trends, eventsTrends, events

ExecutionFuture Execution Execution

Future Execution

Translate into marketing mix

Product Product

Price Price

Place Place

Promotion Promotion

TargetValue Proposition

TargetValue Proposition

E

+

R


Solution

T

C

P

VCC

T

Q

–

"Price"

F

S

T

N

P

P

C N

2

P

"Big picture"Good Branding Practise

Market Rules

E

+

R


Solution

NN

TT

CC

PP

22

VV

PP

PP

CCCC

TT

Q

CC

SS–

"Price"

FF

SS

TT

NN

PP

rb Profilerrb Profiler

!

Translate into "Profiler-Language"

ActualValue Perception

ActualValue Perception

• Product• Price• Place, POS• Promotion, Pull/ Push

• Product• Price• Place, POS• Promotion, Pull/ Push

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Smart Shopping

Smart Shopping

Total CostTotal Cost

NatureNature

FairFair

PurismPurismTranquilTranquil

Thrill&FunThrill&Fun

New&CoolNew&Cool

CarefreeCarefree

VitalityVitality

ClanningClanning

PassionPassion

ClassicClassic

CustomizedCustomized

Personal EfficiencyPersonal Efficiency

24/7 Protech

24/7 Protech

Service Service

QualityQuality

ProvenProven

The rb Profiler is a "Map" of 19 general consumer values, desires and dreams


Solutions Price

E

+–

R

Value cluster

EE = EmotionalR = Rational+ = More- = Less

Fair

Midfield area, high degree of consensus

Value poleValue poleLegend Legend

Consumer value,value proposition


Smart Shopping

Smart Shopping


NatureNature

FairFair

PurismPurismTranquilTranquil


New&CoolNew&Cool

CarefreeCarefree

VitalityVitality

ClanningClanning

PassionPassion

ClassicClassic


Personal EfficiencyPersonal

Efficiency

24/7 Protech

24/7 Protech

Service Service

QualityQuality

ProvenProven

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The perceived value system of the Nike brand is of a progressivehedonist – with anti-minimalist and anti-traditional demarcations

NikeAVP - Actual Value Perception

(415 vs. 1.085; zmax=12.7)

NikeAVP - Actual Value Perception

(415 vs. 1.085; zmax=12.7)

User Non-User


Solutions Price

E

+–

R

Value cluster

EE = EmotionalR = Rational+ = More- = Less

Fair

Midfield area, high degree of consensus

Value poleValue poleLegend Legend

! Conflict with other value

Pro-Value

Anti-Value, demarcation

Warning, too much, should be less intenseWarning, too weak, should be more intense

Consumer value,value proposition

Anti-minimalism

pattern

Anti-traditional

pattern

Service Service

NatureNature

Smart Shopping

Smart Shopping




FairFair

PurismPurism New&CoolNew&Cool

CarefreeCarefree

VitalityVitality

TranquilTranquil

QualityQuality

ClanningClanning

PassionPassion

ClassicClassic


24/7 Protech

24/7 Protech

ProvenProven

Consumer values that the users of the brand most often disagree with

– i.e. "aversions" that the brand might satisfy

Consumer values that the users of the brand most often disagree with

– i.e. "aversions" that the brand might satisfy

Consumer values that the users of the brand most often agree with –

i.e. the most recognized value proposition of the brand

Consumer values that the users of the brand most often agree with –

i.e. the most recognized value proposition of the brand

Progressivehedonism

pattern

Source: Roland Berger - Strategic Brand Development Group, Emnid Data (Germany, März2002, n=1.500, Population 14-65 yrs., CATI)

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Compared to adidas, Nike activates more drivers and deactivates more prohibitors of consumption – resulting in more "Energy"

EnergyA C

MH

High

Low

Low

415 569

High

NikeAVP

d = 415 vs. 1.085l = 0,732776

E

+–

R

adidasAVP

d = 569 vs. 930l = 0,566923

E

+–

R

0,732776

0,566923

Consumptiondrivers

Consumptiondrivers

Consumptionprohibitors

Consumptionprohibitors

Mass

IdealIdealActive brand user base

Active brand user base

0,276 0,379

Aspirants Aspirants Champs Champs

Hopefuls Hopefuls MainstreamMainstream

Source: Roland Berger – German Brand Championship 2002 (TNS Emnid Data, March 2002, n=1.500, Population 14-65 yrs. CATI)

Drift

LiftDrift-Strategy1)

Lift-Strategy2)

1) Drift Strategy: Increase mass, use brand energy to broaden consumer base

2) List Strategy: Increase energy, energize brandto prevent loss of mass

Nike

adidas

DeutscheTelecomDeutscheTelecom

Red Bull

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The rb Profiler is capable of measuring brand positions from many different markets and industries

...NikeE

+–

R

...Sony ElectronicsE

+–

R

...BMWE

+–

R

...T-MobileE

+–

R

...ARDE

+–

R

...AldiE

+–

R

Source: Roland Berger - Strategic Brand Development Group, Emnid Data (Germany, März 2002, n=1.500, Population 14-65 yrs., CATI)

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The rb Profiler is capable of comparing the positions of the same brand across different countries

Nike – United KingdomAVP (634 vs. 857; zmax=12.7)

Source: Roland Berger – Strategic Brand Development Group, Data from Ipsos, Metris, Emnid (UK,PT,D, Aug/Oct/Nov.2001, n*=1.500, Population 15-65 yrs., CATI)

NatureNature

Smart ShoppingSmart

Shopping

ProvenProven




FairFair


CarefreeCarefree

VitalityVitality

TranquilTranquil

QualityQuality

Service Service

ClanningClanning

PassionPassion

ClassicClassic


24/7 Protech

24/7 Protech

E

+–


Solutions Price R

Nike - GermanyAVP (454 vs. 1.046; zmax= 12.7)

NatureNature

Smart ShoppingSmart

Shopping

ProvenProven




FairFair


CarefreeCarefree

VitalityVitality

TranquilTranquil

QualityQuality

Service Service

ClanningClanning

PassionPassion

ClassicClassic


24/7 Protech

24/7 Protech

E

+–


Solutions Price R

Stimulation E

+–

Solidarity

Solutions Price R

Nike - ChinaAVP (654 vs. 3.020; zmax=12.7)

• Overall maximalist orientations• Very strong polarization• Least price-sensitive

CN

NatureNature

Smart ShoppingSmart

Shopping

ProvenProven




(Fair)(Fair)

PurismPurismNew

& CoolNew

& Cool

CarefreeCarefree

VitalityVitality

TranquilTranquil

QualityQuality

Service Service

ClanningClanning

PassionPassion

ClassicClassic


24/7 Protech

24/7 Protech

AspirationAspiration

• Overall maximalist orientations• Peak in <24/7 Protech>• Anti-traditional feature

• Overall maximalist orientations• Peak in <New&Cool>• Most price-sensitive

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The rb Profiler also assesses the projected value proposition ofpast advertising campaigns

1972 1974 1985 1990

Typisch traditionelleKombination

E

+–

R

• Built-up trad. hedonism• Build-up pro-traditionalism

!!

„Years later“„Years later“


LeistungDisziplinLeistungDisziplin

Est. 1862Est. 1862

!!

WunschWunsch

E

+–

R

• Build-up pro-traditionalism

2000

Source: Roland Berger – PX Evaluation Panel

The Bacardi brand first builds up very progressive-hedonistic value propositions – and completely reverses its position from the 90s on

!!

„Rum Bacardiverzaubert!“


Anti-minimalistisch

!!

!!

E

+–

R

• Build-up hedonism• Build-up anti-minimalism

... als Protest gegen „geht nicht!“

„Mit Bacardigeht alles!“ ...

Anti -minimalistisch

!!

Anti -traditionell

E

+–

R

• Build-up progres. hedonism• Build-up anti-traditionalism • Build-up anti-minimalism

„Be what you wanna be ...“

Anti -minimalistisch

Anti-traditionell

E

+–

R

• Build-up progres. hedonism• Build-up anti-traditionalism

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Brand ProjectionE

+–

R JP

• The brand's intention is 1:1 translated into key Marketing Mix elements- TV/ Print advertising- Point-of-sales- Packagingand consistently projected over the last 6 years

• The combination of Pro-Proven, Pro-Purism and Anti-Stimulation projection results in an indirect Pro-TotalCost value proposition

Case study: Brand "X" is in opposition to market drivers –the brand's protagonists are antagonists of the market

Brand "X" IntentionE

–

ClassicClassic

Service Service +

R

• The brand's intention is based on traditional (product) performance orientations

• Rejection of expressive, attention seeking, hedonistic orientations (i.e. under-promise –over-deliver)

• Rejection of progressive/ innovative orientations (i.e. "the second mouse gets the cheese")

• Subtle minimalist/ purist extensions

Brand ProtagonistsE

+–

R8686

• The brand's protagonists comply with the brand's intention and projection for the most part

• The brand's protagonists are foremost consumer with clear Anti-Clanning and Pro-TotalCost orientations, i.e. socially isolated, reclusive and price-concerned people

!!

Market DriversE

+–

R

• The department store cosmetics market is driven by satisfying expressive, attention-seeking attitudes and the rejection of price-orientations, i.e. Pro-Passion and Anti-TotalCost

• The brand's intention is in opposition to market drivers

• The brand's protagonists are antagonists of the market

Brand PerceptionE

+–

R178178

• The brand's perception consists of progressive performance orientations in combination with expressive, attention-seeking attitudes and anti-altruistic positions

• The brand's perception is opposite to the brand's intention, projection and protagonists

• The brand's perception does not enough address the key market driver Pro-Passion and Anti-TotalCost

Source: Roland Berger - Strategic Brand Development Group, TNS Data (Country "Y", March 2002, n=1.997, Population 15-60 yrs. female, CATI)

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As a consequence, the market share of Brand "X" has declined by over 40% over the past decade

2,0%

5,0%

8,0%

11,0%

14,0%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Brand "X"

Brand A

Brand BBrand C

13.4%

10.8%

7.5%


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Strategic Brand Management by Roland Berger –is a five-step process


BrandBrandConsumerConsumer

AVPAVP

Perception Perception

Phase 1 Brand Diagnosis

PVP

Phase 1 Brand Diagnosis

PVP

Creative CheckFX-Pretest

Creative CheckFX-Pretest

??

Moment of truth

Moment of truth

Phase 5TrackingStrategy review

Phase 5TrackingStrategy review

AVP'AVP'PVP: Projected Value Propositions : The past and current value projections of a brand through the entire marketing mix including all communicationAVP: Actual Value Perception: The actual value perception of a brand as seen by the consumers – as sum of all factors influencing a brand accountTVP: Target Value Proposition: "Ideal" brand position in the future as result of the strategic process – “directions” for adjustment of entire marketing mixFX: Future Execution/ Projection : Future value projections to be executed in the future marketing mix of the brand including communication

Moment-of-truth: The consumer "tests" the projections/ promises of a brand and creates/ adjusts the brand‘s perception in his or her mind

PVP: Projected Value Propositions : The past and current value projections of a brand through the entire marketing mix including all communicationAVP: Actual Value Perception: The actual value perception of a brand as seen by the consumers – as sum of all factors influencing a brand accountTVP: Target Value Proposition: "Ideal" brand position in the future as result of the strategic process – “directions” for adjustment of entire marketing mixFX: Future Execution/ Projection : Future value projections to be executed in the future marketing mix of the brand including communication

Moment-of-truth: The consumer "tests" the projections/ promises of a brand and creates/ adjusts the brand‘s perception in his or her mind

FXFX

Phase 4 Execution

Transformation

Phase 4 Execution

Transformation

ProjectionProjection

Creative Brief for entire Marketing MixCreative Brief for entire Marketing Mix

!!

TVPTVP

ProductProductMarketing MixMarketing Mix

PropositionProposition

Phase 2Brand Strategy Master Plan

Target Value PropositionTarget brand delimiter, consumer segments

Road map to TVP, key measurementsEconomic verification, EBIT effect

Phase 2Brand Strategy Master Plan

Target Value PropositionTarget brand delimiter, consumer segments

Road map to TVP, key measurementsEconomic verification, EBIT effect

Phase 3Detailed Action Plan

for adjustment of entire marketing mix Creative interpretation of TVP

Phase 3Detailed Action Plan

for adjustment of entire marketing mix Creative interpretation of TVP

16Source: Roland Berger - Strategic Brand Development Group

Strategic Brand Management by Roland Berger –the deliverables of each step

Brand Strategy

• Brand Strategy Master PlanLift/ Drift Strategy

• Target Value PropositionTVP

• Migration PathMile Stones from AVP to TVP

• Target Brand DelimiterNew protagonists/ antagonistsTarget segments

• RoadmapKey measurements

Optional:• Top-down business plan• Economic verification

EBIT effect

2

Action Plan

• Detailed Action Plan/full conception for entire Marketing Mix

• Creative Briefing• Communication• Product/ Assortment• Packaging• Price level• Place/ Distribution• Point-of-sales• Lift-Promotion• Drift-Promotion

• Organisational structureStructure follows strategy

Optional:• Bottom-up Verification• Detailed Business Plan

3

Brand Mentoring

• Facilitating/ coordinationof strategy implementationwith a steering committee

• Orchestrating team efforts• Identifying task managers • Assigning responsibilities • Allocating resources • Controlling progress• Decision making

• Organizing "Pitch"• Selecting long/short listof ad/com agencies

• Requesting proposal• Assessing proposals• Assisting in decision

• Creative Checkof creative interpretationsprior execution

4

5

TrackingBrand Diagnosis

• Intention ProfilingVision, intended brand position

• Projection ProfilingPVP, communication, POS

• Perception Profiling AVP, competition brands

• Actual Brand DelimiterActual protagonists/ antagonists

• Lift/ Drift PositionBrand energy, mass

• Market Driver IdentificationEnabler/ differentiator

• Consumer SegmentationRelevant market segments

• Consumer Base TensionTensions within consumer base

• Brand Diagnosis- Strengths/ weaknesses- Risks/ opportunitieswithin market/ competition

1 Strategy Review

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Phase 1 and 2 of the Strategic Brand Management process to definea conclusive and efficient brand strategy take about 12-14 weeks

Set-up• Generation of hypothesis• Definition sample, questionnaire• Selection market researcher

Market research• Quantitative market research• Qualitative market research (optional)

Projection profiling (PVP)• PVP Advertising/ communications• PVP Product/ Packaging • PVP Point-of-sales

Perception profiling (AVP)• AVP Brand Perception Profiling• Actual Brand Delimiter• Market Driver Identification• Signature Segmentation

Brand Diagnosis (SWOT) • Brand strength/ weaknesses• Brand risks/ opportunities• relative to competitive environment

Brand strategy (TVP)• Definition brand strategy master plan• Roadmap to Target Value Proposition• Target segments, Target Delimiter

Action Plan• Detailed action plan, full conception• Creative briefing for marketing mix• Organisational structure plan• Bottom-up verification business plan

Set-up• Generation of hypothesis• Definition sample, questionnaire• Selection market researcher

Market research• Quantitative market research• Qualitative market research (optional)

Projection profiling (PVP)• PVP Advertising/ communications• PVP Product/ Packaging • PVP Point-of-sales

Perception profiling (AVP)• AVP Brand Perception Profiling• Actual Brand Delimiter• Market Driver Identification• Signature Segmentation

Brand Diagnosis (SWOT) • Brand strength/ weaknesses• Brand risks/ opportunities• relative to competitive environment

Brand strategy (TVP)• Definition brand strategy master plan• Roadmap to Target Value Proposition• Target segments, Target Delimiter

Action Plan• Detailed action plan, full conception• Creative briefing for marketing mix• Organisational structure plan• Bottom-up verification business plan

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Some of the most dynamic and successful corporations worldwide use Strategic Brand Management by Roland Berger

• Fiat• Financial Times• Focus• Ford• Freenet• FT Deutschland• Fujitsu-Siemens Computer• Gabor• Geha• GAP• General Motors• Giorgio Armani• Grundig• G-Star• Gucci• H&M (Hennes & Mauritz)• Henkel One-a-day• Heineken• Herta-BSC• Honda• Hugo Boss• HypoVereinsbank• IBM• Quelle• Legend Computers

• Adidas• Aktren• Aldi• Allianz• American Express• AOL• Aprillia• Aral• ARD• Aspirin• Audi• Bang & Olufsen• Bayern München• Bacardi Rum• Becks• BMW• British Petrol• Brigitte• Clinique• Calvin Klein• Chrysler • Citibank• CNN• Coca-Cola• CP Portuguese Railway

• Commerzbank• Compaq• Consors• Cross• CSU• D2_Privat• Dallmayr Prodomo• Davidoff• Debitel• Dell• Deutsche Bank 24• Die Bunte• Die Welt• Die Zeit• Dresdner Bank• Edding • Eduscho• Estee Lauder• Erdinger• Ericsson• Escada• Faber-Castell• Fachinger

Mineralwasser• FAZ

• Levis• MasterCard• Marlboro• Mercedes-Benz• MTV• Master Card• Mustang Jeans• Neckermann• Nike• Opel• Pepsi• Photo Porst• Porsche• Portuguese Railways• PRO 7• SAT 1• Sony • Springfield• Spiegel• Stabilo• Swatch• Vodafone• Walmart• Woolworth• Yahoo!

AVP/Caseavailable

AVP/Caseavailable

Referenceproject

Referenceproject

Source: Roland Berger - Strategic Brand Development Group (October 2002)

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