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ALIGNING INTERNAL AND EXTERNAL BRANDING STRATEGIES Samit Sinha ECP, DMS, IIT Delhi

June 23 2012

A Corporate Branding PerspecFve

INSIDE OUT BRANDING

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Samit Sinha: DMS-‐IITD

Albert Einstein

Everything should be made as simple as possible, but not simpler.

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First, A Common Vocabulary

June 23 2012 Samit Sinha: DMS-‐IITD

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One Day In The Forest

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EvoluFon of Branding

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Trademark

(As a legal proof of ownership)

Sign of recogni@on

(A means to help idenFfy & disFnguish)

Means of discrimina@on

(A set of unique superiority associaFons)

Basis of a rela@onship

(Shared meanings & beliefs)

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The Brand, UlFmately

At its simplest the brand is An indicator of origin An assurance of delivery

A common frame of reference for all consFtuencies (It is not just a name, logo or tag-‐line)

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Intangible Asset, But Tangible Worth

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Investors bet on something that is above and beyond the company’s basic ability to make and provide a product or service!

COMPANY’S MARKET CAPITALIZATION

– DEBT

– CURRENT REPLACEMENT VALUE OF ALL TANGIBLE ASSETS

– ESTIMATED VALUE OF INTANGIBLE ASSETS (IPRs, cerFficaFons etc.)

= FINANCIAL VALUE OF BRAND/S

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The Brand Asset

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The only assurance of future income A`racFng new customers Retaining exisFng ones CreaFng preference for itself Increasing purchase frequency

Commanding a premium Fostering deep loyalty

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Branding Is Decommodifying

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Commodity Brand

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When people don’t care whose product they buy, it is a commodity, and it has no other value above and beyond its material value.

The primary func@on of brands is to reduce our anxiety in making choices. The more we sense we know about a product, the less anxiety we feel.

SimplificaFon of choice

Brand’s Key Role

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Why Customers Stray


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1. DissaFsfacFon

2. For variety

3. Lifestyle shic 4. DisaffecFon

And Why They Stay

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• REAL LOYALTY • Considera@on set of ONE • Not subs@tutable

Emo@onally Bonded

• Habit • Familiarity • Momentum

Contented

• Cost/effort of switching • Indifference/low involvement

Through InerFa

• RaFonal & deliberated by process of eliminaFon

By EvaluaFon

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Commodity To Brand

RaFonal

Do I need it?

What does it do? What does it cost?

How does it compare?

EmoFonal

I want it!

It is cool! I'm going to get it!

I only want this one!

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Commodity Characteris@cs Brand Characteris@cs

Brand Image Vs IdenFty

The brand image can only be controlled by first establishing the brand idenFty Brand image

How it is perceived

Brand idenFty What we want it be

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Michael Eisner, CEO Disney

“A brand is a living enFty – and it is enriched or undermined cumulaFvely over Fme, the product of a thousand small gestures”

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Brand Impressions


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Customer

Compe@tors

Employees

Partners

Customers

Marke@ng Communica@ons

Digital Experience

Unplanned Communica@ons

Retailers

“Everyone experiences far more than he understands – yet it is experience, not understanding, that influences behavior.”

Marshall McLuhan

The Brand Is Experienced

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EXPERIENCES

Environments

Behavior

Product

Service

PROMISES

Media

Literature

Signage

Advertising

Experience ≥ Promise

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BRAND MANAGEMENT

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The Top Global Brands – 2012


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APPLE AT&T

GOOGLE VERIZON

MICROSOFT HSBC

IBM NTT GROUP

WALMART TOYOTA

SAMSUNG WELLS FARGO

GE BANK OF AMERICA

COCA COLA McDONALD’S

VODAFONE SHELL

AMAZON INTEL

Brand Architecture Systems


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Branded House

• Yamaha • Virgin • GE

Sub-‐Brands

• HP LaserJet • Sony Walkman

• Cadbury 5 Star

Endorsed Brands

• Maggi – Nestle

• Obsession – Calvin Klein

• Vivanta – Taj

House of Brands

• Dove (Unilever)

• Pringles (P&G)

• Tic Tac (Ferrero)

STRONG Responsibility Of Company As Brand Driver WEAK

WEAK Responsibility Of Product As Brand Driver STRONG

Product Vs Corporate Brands

Lesser obvious connecFon with parent organizaFon Connects to consumers with a category benefit

Brand acts essenFally as a markeFng concept

Blurred disFncFon between company and product brand Helps company relate with all stakeholders

Brand acts as broader organizaFonal concept

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Product branding Corporate branding

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BRAND

Policy Makers

Public

Partners

Suppliers

Trade

Customers

Investors

Employees

The Corporate Brand Interest Groups

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Corporate Brand Facets

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Enterprise

• A successful commercial en@ty • Investors, employees, vendors…

Product

• A marketer and seller of products & services • Customers, trade…

Ins@tu@on

• A socially responsible corporate ci@zen • Government, media, public…

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The Brand Opportunity

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RELEVANCE

What people want most

DIFFERENTIATION

What your compeFtors struggle at

LEGITIMACY

What you can (and want to) be the best in the

world at

Sweet Spot

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Key to Corporate Branding

Determining The Field of LegiFmacy

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What can you be the best

at?

What drives your

economic engine?

What is your deep & abiding passion?

Legi@mate Space

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The Alchemist Brand Tree™ A HolisFc Branding Framework

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PRODUCT EXPERIENCEQualityDesignService

VISIONPurpose/Values/Goals

COMPETENCEStrengths/Talents

FIELD OFLEGITIMACY

RELEVANCESegmentation

Strategy

DIFFERENTIATIONPositioning

Strategy

MARKETINGSTRATEGY

BRANDIDENTITY

&ARCHITECTURE

COMMUNICATION EXPERIENCEMessage

PersonalitySensorial Cues

ORGANIZATIONAL EXPERIENCEPhilosophy

PeopleBusiness Practices

OVERALLCATEGORY

PERCEPTIONS

BRAND IMAGE

INTERNAL Branded House

Emphasis

EXTERNAL House Of Brands

Emphasis

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“If you don’t stand for something, you’ll fall for anything.”

VISION = Purpose + Values + Goals

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The Vision Framework

Core purpose OrganisaFon’s broad, fundamental &

enduring raison d'être, beyond mere commercial moFve Perpetual guiding principle, separate from

specific goals or business strategies “Leaders die, products become obsolete,

markets change, new technologies emerge, and management fads come and go, but core ideology in a great company endures as a source of guidance and inspiraFon”

Core values OrganisaFon’s essenFal & enduring tenets

Principles, standards & acFons that people in the organizaFon represent and consider worthwhile and important

Big Hairy Audacious Goals ArFculaFon of core ideology has to be

followed by type of progress one wants to sFmulate “A vision is good. It gives cohesion to

the organizaFon and provides shared values. But to really mobilize the organizaFons you need a strategic goal (or possibly a few goals). The vision is unachievable and permanent. Your goal achievable and temporal. It may not look achievable when you first set it and all the best strategic goals seriously stretch the organizaFon, but it is achievable in principle and in a fixed period. Goals that are ten to ficy years in the future are most effecFve.”

Allan Engelhardt

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Core Ideology Envisioned Future

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Examples of Core Purpose

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3M “To solve unsolved problems innovaFvely”

Mary Kay "To give unlimited opportunity to women”

McKinsey “To help leading corporaFons and governments be more successful”

Merck "To preserve and improve human life”

Nike "To experience the emoFon of compeFFon, winning, and crushing

compeFtors” Walt Disney

"To make people happy"

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Examples of Core Values

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HP Respect and concern for the individual

The Body Shop No tesFng of cosmeFcs on animals

Sony Being a pioneer, not following others

BMW Not sacrificing quality to price

Walt Disney The worth of the family

Procter & Gamble Honesty and fairness

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A strategic business statement which is created to focus an organisaFon on a single medium-‐long term organisaFon-‐wide goal which is audacious, likely to be externally quesFonable, but not internally regarded as impossible.

Big Hairy Audacious Goals

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BHAGs Examples

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QuanFtaFve “Become a $ 125 billion company by the year 2000” (Wal-‐Mart, 1990)

QualitaFve “Become the company that most changes the world-‐wide image of Japanese products as

being poor quality” (Sony, early 1950s) “Become the best entertainment company in the world” (Walt Disney)

“Become the most powerful, the most serviceable, the most far-‐reaching world financial insFtuFon that has ever been” (CiFbank)

“To become "the pulse of the planet." (Twi`er)

David Vs. Goliath “Crush Adidas” (Nike, 1960s)

Role model “Become Harvard of the West” (Stanford University)

Simply audacious “…put a man on the moon by the end of the decade…” (JFK, 1962)

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It is not a goal, strategy or plan to be the best.

It is an understanding of what you can be best at.

Core Competence

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What Are You Really Good At?

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“The fox knows many things, but the hedgehog knows one BIG thing.”

Archolus, 7 B.C.

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The Fox Versus The Hedgehog

Foxes pursue many ends and see the world in all its complexity

The Fox has smart, new strategies each day And is fast, sleek & cracy and tries all kinds of ways to prevail

Hedgehogs simplify a complex world into a single organizing idea

The hedgehog has just one defense mechanism Quickly roll up into a li`le ball and become a sphere of sharp spikes

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The Fox Way The Hedgehog Way

The fox never wins!

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The Brand As A MarkeFng Concept

TABLESTAKES

Important features/benefits offered by many

DRIVERS

Important features/benefits not offered by

others

NEUTRALS

Common features/benefits of li`le or no

value to people

FOOL’S GOLD

Unique features/benefits but of li`le or no value

to people

Low

Relevan

ce

High

Low Differen@a@on High

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Personality Its implicit character

Reflection

Brand user’s public perception

Relationship Its role in

people’s lives

Culture

The brand’s core values

Self-image

Brand user’s self-perception

picture of sender

picture of receiver

inte

rnal

exte

rnal

BRAND ESSENCE (The most permanent

part of the brand)

The Brand IdenFty Kapferer’s Brand IdenFty Prism

Physique

Its sensorial associations

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• Perfec@onist • Sophis@cated • Dependable

• Name • 3-‐pointed star

• Premium • Build quality

• Rich & famous

• Badge of

success • German engineering

• Successful owner

Engineering Perfec@on

The Mercedes Brand

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• Young • ExciFng • Passionate • Sporty

• Name

• Propeller • Premium

• Rich & famous, youthful

• Pleasure Machine

• German high-‐performance

• Driving enthusiast

The Joy Of Driving

The BMW Brand

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Brand’s Value ProposiFon

Brand’s Expression

Brand’s Psychological Benefits

Brand’s Func@onal Benefits

Brand’s Features/Aiributes

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Value ProposiFon Ladders

Pride

Status • Success • Pres@ge

Luxury • Reliability • Safety

Premium • German • Well-‐built

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Joy

Thrill • Youthfulness • Fun

Luxury • Performance • Driving pleasure

Premium • German • Well-‐built

Brand ManifestaFons

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Why People Ma`er


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The best way to develop a brand that has a high degree of relevance and consistency is to ensure that the employees of an organiza@on understand and believe in the values of the organiza@on

These cannot be invented – they have to come from the essence of the organizaFon

However, they do have to be lived sincerely Living brands have to be built on solid ground but they also have to be capable of evoluFon and change

“Culture is always a collec@ve phenomenon, because it is at least partly shared with people who live or lived within the same social environment, which is where it was learned. It is the collec@ve programming of the mind which dis@nguishes the members of one group or category of people from another.”

Geert Hofstede

Building Brand Culture

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Brand Values DisseminaFon Geert Hofstede

Symbols

Role Models

Rituals

Core Values

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Two Views On Human Nature

No fundamental difference between humans and animals

Behavior is determinisFc Determined by anterior

factors, either inherited or environmental, rather than by free will

Air, water, food, shelter, rest, sex and pain avoidance is all that we really need

People are fundamentally trustworthy, self-‐protecFng, self-‐governing, and naturally inclined towards growth and love

Cruelty, violence and dishonesty are not typical of human nature, but occur only when people are deprived of their needs

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Sigmund Freud Determinist View

Abraham Maslow Humanist View

The Hierarchy Of Human Needs


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Truth, goodness, beauty, unity, holism, harmony, aliveness, uniqueness, perfecFon, necessity, compleFon, jusFce, order, simplicity, richness, effortlessness, playfulness, self-‐sufficiency, meaningfulness…

Strong Brands Connect With Meta-‐needs

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Internalizing The Brand

Intellect

(Capacity to think)

Mindset

(Capacity to learn)

Body

(Capacity to act)

Heart

(Capacity to relate)

Effec@ve

Deployment

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IdenFfy Brand Champions

SABOTEURS"- Working actively"against the idea"

CYNICS"- Not involved"with the idea"

AGNOSTICS"- Interested but"not committed"

CHAMPIONS"- Storytellers"who spread the idea"

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Entrepreneurship + Discipline = Great Company

Start-‐up Organiza@on

Great Organiza@on Hierarchical Organiza@on

Bureaucra@c Organiza@on

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Balancing Freedom & Responsibility


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THANK YOU

QuesFons? June 23 2012

Samit Sinha: DMS-‐IITD 54

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