PRODUCT AND BRAND MANAGEMENT

Introduction............................................................................................................................ 3
How do you classify new products and what is the product mix?................................... 3
Concept of product mix...................................................................................................... 5
Discussion and real-life example........................................................................................5
What is the product life cycle?............................................................................................. 6
Introductory phase..............................................................................................................7
Maturity phase....................................................................................................................7
4 basic product strategy............................................................................................... 8
How to calculate demand for your product......................................................................... 9
Estimated Demand Formula.............................................................................................11
Estimating Market Supply.................................................................................................11
Where Supply and Demand Intersect.............................................................................. 12
How to develop and launch new products........................................................................ 12
What is a brand and how do you develop them?..............................................................14
Inputs for developing your brand......................................................................................15
How to analyze your competitors..................................................................................... 18
A Brand Guide: The Power of Branding........................................................................... 20
The key ingredients of any brand....................................................................................... 20
Defining your brand.......................................................................................................... 21
The big idea................................................................................................................21
Vision..........................................................................................................................22
Values.........................................................................................................................23
Personality..................................................................................................................24
Putting it all together...................................................................................................24
Brand management techniques....................................................................................... 25
Storytelling..................................................................................................................25
Credibility....................................................................................................................25
Differentiation............................................................................................................. 25
Engaging with customers........................................................................................... 25
Your product portfolio................................................................................................. 26
Multiple brands and brand ‘stretch’.................................................................................. 26
Endorsed brands........................................................................................................ 27
Reinvigorating your brand.......................................................................................... 27
Naming....................................................................................................................... 27
Descriptive............................................................................................................27
Consistency.......................................................................................................... 28
Evolution or revolution................................................................................................ 28
Branding for different sectors..................................................................................... 29
Start-up businesses..............................................................................................29
 Public sector......................................................................................................... 30
Service companies............................................................................................... 30
Business to business............................................................................................31
Mechan: B2B branding......................................................................................... 31
Design and branding.................................................................................................. 31
Key design ingredients......................................................................................... 31
Defining your brand model............................................................................................... 32
What is a brand essence and why is it so important?...................................................... 34
At the centre of our peach, we had the seed which is the core because is what allows us,
the fruit to last over time. The same happens with a brand essence. It is the heart and
soul of the brand. Which should last a long time..............................................................34
What are brand values and why do you need them?....................................................... 36
Product strategy: Portfolio management concepts, types and tools................................ 38
Element that make up a product................................................................................ 38
Physical attributes................................................................................................ 39
Packaging.............................................................................................................39
Psychological/ Emotional attributes......................................................................40
The brand................................................................................................................... 40
Brand Identity............................................................................................................. 42
Typology of brand strategy......................................................................................... 44
Classification of product............................................................................................. 45
Consumer good.................................................................................................... 45
Intraindustrial good............................................................................................... 46
Services................................................................................................................47
Managing a portfolio of a product...............................................................................48
Developing your brand strategy......................................................................................... 48
Connecting all the dots: Translating your brand into a positioning statement.................. 48
Evaluating your brand strategy...........................................................................................49
Brand Architecture...............................................................................................................51
Brand equity and its relevance in your business.............................................................. 52
Which are the different models of brand architecture?.....................................................54
What a branded house is and when to use it................................................................... 55
What a hybrid model is and when to use it.......................................................................59
How to develop a brand architecture................................................................................61
Top 5 indicators of a brand architecture issue or opportunity........................................... 63
Things to consider when naming your brand................................................................... 64
Product and brand portfolio................................................................................................64
The relationship between brand portfolio and brand architecture.................................... 65
How to develop your brand portfolio.................................................................................67
Managing your brand portfolio..........................................................................................69
The customer experience journey...................................................................................... 73
Purchase funnel............................................................................................................... 73
The touchpoint concept.................................................................................................... 74
Identifying your touchpoints........................................................................................76
 Prioritizing the key touchpoints...................................................................................77
Defining the touchpoints roles.................................................................................... 79
Implementing the brand at the key touchpoints..........................................................80
Brand engagement...............................................................................................................81
Defining your internal communication and training program............................................ 82
Embedding the brand throughout the organization.......................................................... 84
Measuring and tracking internal brand behavior.............................................................. 86
Key success factors for your brand engagement program...............................................88

Introduction
The main content of the lesson is an introduction to the first course in the Specialization of
Marketing Mix Implementation, which is Brand and Product Management. The course will be
led by Luis Rodriguez Baptista, an expert in product and branding. The course will cover
topics such as moving from idea to product, launching new products, managing the life
cycle, developing a compelling brand, inspiring critical stakeholders, brand communication,
brand portfolio building, translating the brand into customer experiences, and engaging
employees to deliver the brand promise.

The course emphasizes the importance of product and brand management in the success of
a company's long-term growth. It also provides insights into the rational and emotional
aspects of branding, the definition of a brand as a promise reflected in the client's
experience, and the strategic asset it represents for an organization.

The course will use Apple as an example of effective product and brand management,
discussing Apple's brand strategy, product strategy, implementation through various
interfaces, and metrics of success. The course will also include a practical component,
where participants will develop a lemonade business from scratch, applying the tools
discussed throughout the course.

The MOOC is organized into six modules, each containing approximately six lectures, with
specific and condensed content.

How do you classify new products and what is the

product mix?
For example, products can be categorized by the way clients purchase them.
Convenience products are bought normally, without being given much thought, and are
typically available in many channels. So and if not we might find playing cards. Then we
need products, they require more planning and there's much more product comparison
before the purchase is done. For example, like a dining room at Fnac we might find a mobile
phone and then we have specialty products. Their demand is more elastic and depending on
the category there's less comparison before the purchase because they're sold through
specific channels. Consumers instead choose specialty goods primarily based on quality or
in style or scarcity or personal preference. Sellers of specialty goods do not need to be
conveniently located because buyers will seek them out even if it involves considerable
effort. For example a car at Fnac, we can find drones. Some goods may be considered need
goods by some buyers and specialty goods by other buyers. The key is to understand your
target customer.

So let's discuss another criteria commonly used to categorize products. By the level of
involvement in their purchase. Low involvement means that they'd require little discussion
from the potential client. For example, hamburgers or fast food and if not, we can find toner
for our printing needs. Or high-involvement products, they require time and effort from
customers during the purchase process. For example, your first home at Fnac, I think a TV
or a smartwatch requires high involvement. Before I continue sharing other criteria, I want to
see if you can begin to understand the implications of why we need to understand this
categorization. Think about it, what kind of marketing and sales support do you think is
needed to sell a convenience versus a need versus a specialty product? What about a low
involvement versus a high involvement.

Let's look at another criteria commonly used, by the benefits they provide consumers. It could be
functional benefits paired up with rational and logical benefits. For example, at Fnac we can find
paper clips. But it could also be emotional benefits, products that satisfy the ego expression
needs of consumers. For example, a diamond ring. We could also classify them by their physical
state, tangible products consumers can touch, or intangible, services, events, ideas. They don't
necessarily result in the possession of an end product like lodging, legal services, consulting, etc.
At Fnac, you could buy, for example, online remote assistance for your PC.

But in order to draw conclusions that will impact how you market them, you should look at
products in the categorization using more than one dimension. For example, functional, and
tangible, like a cup of coffee. Here at Fnac, we could find examples of a laptop or functional and
intangible, like your telecom service, which they also sell here, by the way. Or emotional and
tangible, like a purse or a watch. Or emotional and intangible, like a vacation. Another important
element to consider is that our products can offer more than one benefit. We'll use this later on
when we talk about the product's life-cycle.

The essential product is what customers are really buying their direct benefit. The coffee at
Starbucks or the camera at Fnac. The augmented product are these additional or secondary
benefits. The WiFi, or the app, at Starbucks. The insurance that might come with our camera, or
the photography class that is included when you purchase it. In summary, when launching new
products, you should think of having clarification of which consumer need you're trying to satisfy
and what type it is. Secondly, verifying that your essential product is capable of satisfying that
consumer-specific need. Otherwise, redesign your product's main benefit. If you have an online
product you can also prototype and test and learn, so you can adapt your product by listening to
customers. Third, understand how to recommend your essential product to create the
consumer's experience more gratifying and protect your competition down the line.
Concept of product mix
The product mix includes all product lines. The amplitude of the product mix refers to the
quantity of the product lines within the categories that the organization place in. For
example, here at Fnac, we can see that Sony is present in consoles, in watches, in cameras,
in TVs, in phones, etc, etc. Therefore, a product line is a group of products that fulfil the
same function. Each product line can be described in terms of their longitud, the total
number of elements of product line. We can see here at the TVs that we are under the same
name brand. We have UHD 4K or LED or Smart TVs. Then we have the def, the number of
version and variants of each product within the same line. For example, within Sony UHD 4K
and 49 inches we have once that may have a higher resolution or they have 4K reality pro
with MHL or they have more USB ports or they have a 1000 Hertz and then we have.
Another ones which have different resolutions, and they have different ports, and they have
what's called SCART with 200 Hertz, among others. As you can see, understanding your
product mix is also crucial, because it needs to be differentiated enough to address
distinctive needs from the customer's point of view. And I want to clarify that not from RND's
point of view. Why else are we continue talking about this? Because the main challenges
that you will encounter in managing your product mix are that your organization must
determine the optimal number of product lines as well as the longitude and the depth of each
one. And you should consider the consistency of a product mix. Understand which
characteristics are shared by product lines. For example, do they have the same technology
that we can leverage, or are the products addressed at the same market segment? Are they
commercialized through the same channels, etc.? All of these questions will impact the
development of your new product and your marketing and sales approach.

Discussion and real-life example

Here are some real-life examples related to the lecture content:

● Convenience products: Items like snacks, toiletries, and everyday household items that
are easily accessible and require little thought before purchase. Examples include candy
bars, toothpaste, and laundry detergent.
● Need products: These are products that require more planning and comparison before
purchase. Examples include furniture, appliances, and electronics like smartphones or
laptops.
● Specialty products: These are products that have a specific target market and are often
sold through specialized channels. Examples include luxury cars, high-end fashion
brands, and rare collectibles.
● Low involvement products: These are products that require little discussion or
consideration from the consumer. Examples include fast food, basic office supplies, and
everyday consumables like bottled water.
● High involvement products: These are products that require more time and effort from the
consumer during the purchase process. Examples include buying a house, a car, or
expensive electronics like a home theater system.
● Tangible products: These are physical products that consumers can touch and possess.
Examples include clothing, books, and electronic devices.
 ● Intangible products: These are services, events, or ideas that do not result in the
possession of a physical product. Examples include consulting services, online courses,
and concert tickets.
● Product mix: The product mix refers to all the product lines within an organization. For
example, a technology company may have product lines for smartphones, laptops,
tablets, and accessories.
● Product line: A product line is a group of products that serve a similar function or target a
specific market segment. For instance, within a smartphone product line, there may be
different models with varying features and specifications.

These examples illustrate how different products can be categorized and how understanding
their classification can impact marketing and sales strategies.

Understanding the categorization of products is crucial for developing effective

marketing and sales strategies:
1. Targeting the right audience: Categorizing products helps identify the target market
and understand their needs and preferences. By knowing whether a product is a
convenience product, a needed product, or a specialty product, marketers can tailor
their strategies to reach the appropriate audience and communicate the product's
value effectively.

2. Differentiation and positioning: Categorization helps in positioning the product in

the market. By understanding the level of involvement in the purchase decision (low
involvement or high involvement), marketers can determine the appropriate
messaging, branding, and promotional activities to differentiate their product from
competitors and create a unique selling proposition.

3. Resource allocation: Different product categories require different levels of

marketing and sales support. For example, convenience products may require less
information and hand-holding, while specialty products or high-involvement products
may require more extensive product knowledge, demonstrations, and customer
support. Understanding the categorization helps allocate resources effectively to
meet the specific needs of each product category.

4. Product development and innovation: Categorization provides insights into

consumer needs and preferences, allowing companies to identify gaps in the market
and develop new products or improve existing ones. By understanding the benefits
provided by different product categories (functional, emotional, tangible, intangible),
companies can innovate and create products that align with customer expectations.

5. Brand management: Categorization helps in managing the brand portfolio and

brand architecture. By understanding the product mix and the relationship between
different product lines, companies can make strategic decisions about brand
extensions, brand hierarchy, and brand associations. This ensures consistency and
coherence in brand messaging and enhances brand equity.

What is the product life cycle?

Products are like human beings. They are born, they grow, they reach maturity and then they
enter their old age, the declining stage and they die. The best way to picture this is through a
curve in the product's life cycle. On the x axis we have time and on the y axis we have demand
which can be expressed in sales volume. It is important to understand and even try to predict
each phase so you can act on them in an offensive fashion with a well thought product strategy.

Introductory phase
Generally bringing a new product to the market is filled with unknown risk. Because demand
has to be created. How long it takes to pick up or for a customer's adoption depends on the
product's complexity units, but most of all in how well does it solve potential customer needs
better than substitute products or even how well does it satisfy a new need? For example,
when the first versions of smart phones were introduced in some markets between 200 and
2001 by a company called Kyocera, it took a while before people began to buy them. The
duration of this phase will vary in every particular situation. And it will be determined by various
internal and external factors such as recognition of the product's benefit, switch in cost from the
current solution, competitive pressure, etc. Your objective is to create awareness of the product
to capture as much market share as feasible before competitors come in. The interest of
competitors will grow the market and then take you to the next phase, the growth phase. In this
phase, sales grow rapidly. Early adopters repeat their purchases and influence the rest of the
potential customers. Also, distribution has grown and thus the product is more easily accessible
to the customer. In this phase, other companies have realized the potential benefits of your
growth market, and they launch competitor products. Why have they waited to launch? Because
almost all of the risk of a failure was assumed by the first entrant. As competition increases the
price of a product would normally decrease. Your objective as a marketer is to maximize sales
and market share by ensuring that your product is differentiated from the rest through branding
and achieving loyalty. In this phase there are many competitors that despite having a temporary
success might run out of feeling and stay in the market place and drop out. For example, in our
phone example pawn pilots came and capitalized the growth of demand as a market group
Blackberry launched their first version of smartphone. Notice how in the first phase, our
projective was to get a trial. In this phase, it was all about preferring our brand.

Maturity phase
Almost everybody of your target customers have tried or used regularly the product. And growth
only comes from substitution or new customers coming in to your target customer group. Sales
grow at par with population. One of the key features of this market is that companies use
segmentation to try to cover the different needs of the marketplace through different models and
brands. Competitive attempts to achieve and hold brand preference now involve making finer
and finer differentiation in product. For example, a toothpaste that freshens breath. That fights
cavities. That removes plaque, etc. In customer service also and in promotional practices. This
stage also forces the manufacturer to concentrate on holding space in distribution outlets also
many company begin to compete on price, forced by their access capacity. The number of
competitors tends to decrease. Our objective is to try to keep our high market share in the
segment or segments so that we compete, while maintaining high margins. This phase could last
a long time. But there will come a time when demand will begin to disappear and thus, we will
find ourselves in the next phase. There are many reasons for your product to enter the declining
stage. It can be changes in technology. For example, the fax, Changes in consumption or
purchase habit. For example, your fixed telephone line at home. Changes in the environment,
whether political, society or economic, for example, and see what is the global impact of Uber in
the taxi industry.In this phase, your objective as a marketer is to re-benefit. It is possible that
your company will be able to keep a residual demand that could be very profitable. But, it's
crucial to maintain a balanced part of the portfolio. In this phase we normally see mergers or
buyouts as production gets concentrated into few hands. The product life cycle tool is a
conceptual reference that will allow us to envisualize our products and competitors position in the
market, and plan ahead to take advantage of the opportunities and avoid the threats. The key
question you might be asking yourself is what to do to break free from the product life cycle.

Managing growth effectively required that new products fit within the firm's missions,
organizational strength, and existing products. Imagine a two by two matrix, on the x-axis, you
have a product category. Which could be an existent or a new one. On the Y axis, you have
markets. Again, you can have existent or new ones. Ansoff suggested that there are four basic
formulas to grow your offer. And each of them is at the intersection of product category and
market.

4 basic product strategy

1. Market penetration
Market penetration seeks to achieve four main objectives, maintain or increase the market share
of your current products. This can be achieved by a combination of competitive pricing strategies,
advertising sales, and promotion. And perhaps more resources dedicated to personal selling.
Another objective is to secure dominance of the growth market. Also, you could restructure a
mature market by driving out competitors. This will require a much more aggressive promotional
campaign, supported by pricing strategy. Designed to make the market unattracted for
competitors. Or you could increase usage by existing customers. For example, by introducing
loyalty schemes. A market penetration marketing strategy is very much about business as usual.
The business is focusing on markets and products it knows well. And it is likely to have good
information on competitors and customer needs. This strategy works best in industries where
economic scales apply. When the firm's average cost of producing and distributing products
decreases as the size of its operation increases. To execute a market penetration strategy, the
company requires a dependable competitive position. To avoid likely retaliation from competitors.

2. Product development
This strategy may require development of new competencies, and requires the business to
develop modified products. Which can appeal to existing markets. The strategy of product
development is particularly suitable for a business where the product needs to be differentiated in
order to remain competitive. A successful part of the development strategy places the market
emphasis on research, and development, and innovation. Detail insight into customer needs and
how they change. Being first to market. The organization needs to develop modified products
that appeal to existing customers. In order to encourage them to spend more on these products.
This strategy is likely to develop new organizational competences and requires improved sales
coordination. Uncompetitive or immature products in the portfolio create risk that can be
counterbalanced by a strong customer focus and innovation processes. An example might be the
launch of the new versions of the iPhone or the Coke Zero.

3. Market development
Where the business seeks to sell its existing products into new markets. There are many
possible ways of approaching this strategy, including new geographical markets. For example,
supporting the product to a new country, new product dimensions or packaging. For example, of
having a large bottle of family Coke. New distribution channels, moving from selling via retail to
selling using e-commerce and mail order.

Or different pricing strategies to attract different customers or create new market segments.
Market development is a more risky strategy than market penetration. Because you are targeting
new markets. An example might be, when the iPhone began to sell in China, later than in other
western markets, or when it began to be sold online. Or Coke, when it offered a new large family
form of, like I said before.

4. Diversification
This is an inherently more risky strategy. Because the business is moving into markets in which it
has absolutely little or no experience. For a business to adopt a diversification strategy therefore,
it must have a clear idea about what it expects to gain from the strategy. And an honest
assessment of the risks. However, for the right balance of risk and reward, a marketing strategy
of diversification can be highly rewarded. An example might be the iWatch or the iPad. The
selection of a gross strategy depends on your firm's level of risk. It's current set of products and
markets and the organizational preference for either products or markets. As a drawback the
Matrix [INAUDIBLE] firms products and markets portfolio must be coordinated. But it provides no
insight on trimming products in markets. Which many times is necessary. Thinking of our
lemonade business, I think it might be too early to begin launching other products. But please
keep this framework in mind when you finally decide that it is time.

How to calculate demand for your product.

With the assumption that the product will be bought by a specific group of clients in a specific
period under the expected market conditions and with the help of your marketing plan. The
simplest form of effort is calculation is market volume is equal to the number of buyers times the
quantity of your product acquired per buyer in a given period. Market value is market volume
times the average price per unit.

If you're like most people you don't have the time or the resources to conduct an extensive,
qualitative research to calculate the number of buyers or the quantity they will buy in a given
period. Let's calculate the market of female shavers in your country for next year.

Ideally we would have a number of women who shave but it is unlikely that this is readily
available information. Therefore you can begin by asking your female friends or colleagues if
they shave or if they know someone who shaves and interview them to find out their habits. You
would be surprised at how much information you can collect to develop your hypothesis. For
example, how many times per week they shave. How many times do they use their shavers
before throwing it away? When did they begin shaving? Do they think that they will shave
throughout their lifetimes? How much do they pay for their average shaver?
Once you've collected enough information, you can begin putting together the pieces of this
puzzle. Let's begin with volume, market volume is equal to the number of buyer times the
quantity acquired in a given period. The number of buyers, we could calculate from inferring how
many of your female friends shave. If you ask ten and only two shave, a simplistic way to say
that 20% of the female population in the age range of shaving buy shavers. Notice that from the
information collected we know at which age your friends began shaving. So we need to take that
factor into account, thus we will calculate our first variable. Number of buyers in the total market
is equal to the number of women in your country from age x to y times a percentage of your
friends who shave.

We could also consider other factors, such as population growth for next year. If you recall, our
second variable was the quantity of your product acquired in a given period. We will begin by
simply calculating the amount of product for the total market, not only of your product in a given
period. Let's assume that they use one shaver for x amount of shaves and they shave once a
week. Then the 52 weeks in a year divided by the number of shaves per shaver is equal to how
many shavers per person buys every year. Again we could also consider other factors such as, if
they shave more in a different season. Are there other variables which have an impact on how
many times they shave, like fashion? Do they buy and stock shavers at home? How many
shavers do they buy every time? Or if they alternate shaving with wax, etc., etc. Thus we have
solved our two variables and we now have market volume. In order to calculate market value, we
multiply the above number by the average price paid per shaver. Again, we could also consider
factors like how many times does your friend buy on discount or bundles, etc. The tricky part
comes now because you need to find out what percentage of that market could be yours. In the
absence of any data, simply run scenarios. If you can capture 1% of that market it would
represent 1% of the volume, or value numbers we've just discussed. If you want to improve your
odds, you should try to find out the market share of your potential competitors. Because it will
provide you with a reference in which part of the market is available to you. You could talk to
retailers to find out or if your business is only online, look at visits or downloads of competitor
products and make some assumptions. I can almost hear you saying that your product has no
competition because it is disruptive, a new product in a new category. I suggest that you use the
information you can collect about the customer's needs that you will satisfy. Before the iPhone
other smartphones existed. In calculating its match we could have made assumptions for the
preexisting target. Or we can even draw conclusions from looking at web surfing patterns or time
spent on emails. I have had other students mention that instant messaging was also disruptive.
Again, you could make assumptions based on text messaging in every country and the trend in
pricing. I don't want to over complicate things for you because some of these topics will be
covered in other MOOCS in this certificate.

Estimated Demand Formula

The experts at Economics Help provide the formula Qd = a - b(P) to chart the
demand curve, where "Qd" stands for the quantity demanded and "a" represents all
factors affecting the price other than your product's price. The "a" is calculated using
surveys, statistics and trends to estimate the factors of your target market that are
not related to the price of your product. Then, "b" represents the slope of the demand
curve.
The slope is determined by the change in the y-axis over the change in the x-axis
between any two points on the curve. In almost all cases, the slope is negative. "P"
should equal the price of your product or service.
The curve of the market demand trends negative overall, which makes sense when
you think about it. As a product becomes more expensive, consumers become less
willing to purchase it. So at what point along the market demand curve does the
supply curve intersect, indicating that any further supply would be an excess and
therefore wasted investment?

Estimating Market Supply

Whereas the demand curve trends negative, the supply curve trends positive. The
writers at Lumen Learning explain that the Law of Supply is a principle of economics
that indicates an increase in the quantity supplied to a market in correlation to the
increase in price.
Quickonomics offers the formula of Qs = m(P) + b, wherein "Qs" represents the
quantity of supplied product or services, and "m" stands for the slope of the supply
curve. The slope is determined by the change in the y-axis over the change in the
x-axis between any two points on the curve. In almost all cases, the slope is positive.
"P" represents the changing price of the product or service along the y-axis. Then, "b"
stands for the value of the y-axis (price), where the supply curve's x-axis value (the
quantity supplied to the market) is 0. This is called the y-intercept and represents the
supply required to meet demand if the price of your product is $0.00.
The supply curve represents the quantity of items or service instances your sources
are willing to provide, given an assumed price point. As the price goes up, your
suppliers will be willing to provide more units.
Where Supply and Demand Intersect
The intersection of the demand curve and supply curve is the estimated point of
maximum profit. When you supply more units than there is demand for your product,
you have to store the excess or may never be able to sell it.
If you supply less than the ideal intersection, you sell all of your inventory and miss
out on potential sales as more customers request and seek your product or service.

How to develop and launch new products.

As you can see, this list is very comprehensive and you should make sure that you have
answered the above. Before you overcommit to your new product. Keep in touch with the
marketplace. Although this sounds obvious, companies don't always keep open ended
conversations with customers or potential customers. For example, identifying who are the early
adapters and risk takers, allows you to know the evolution of their needs and where the gaps are.
Sharing with them the information. Asking them questions, such as, what will help you achieve
your objectives. Or what are your cost constraints? What are the desired features, what are the
redundant features? Will actually help you fine tune your product. Successful companies also talk
to the distribution channels to understand their perspective and their needs. Market research is
crucial to measure the interaction between potential customers and concepts or prototypes. But it
is important that the market research be relevant and open versus confirming. What does this
mean? It means that it arrives on time, to actually make decisions and not after. It means that it's
rich in facts to make a relevant decision. For example, it helps to estimate the cannibalization of
existing products. It means that it doesn't document what is obvious. For example, consumers
want the best quality at the least price. It also means that it's not to confirm a point of view
that we already have. That it is specific and non standardized. And that it takes into
consideration the functional needs of all of your team whether it's RD or marketing or production.
Listening to consumers can also be done by developing prototypes that you can test and learn.
Your prototypes might not be perfect but they will allow you to learn what customers appreciate
most and least. What attributes they missed.
The feedback helps your developers reconcile the desired features with the constraints of time
and cost. Building a prototype also has the added benefit of getting all the internal stakeholders
excited and energized about your product. That leads to my second success factor, getting
everyone onboard, including those areas or functions not directly involved with the development
process. And do it early on, if possible, from the project's launch. I will illustrate why this is
important with a simple example. While working for a real estate company, the team had
developed a whole set of customization options for the new homes, that would be soon
launched. After having the models ready and the personnel trained to sell these features. The
development team approached IT and accounting to communicate these new options. As it
turned out, their internal system did not have enough "feels" to capture the customization
options, or even to invoice them. The necessary changes in programming and testing would cost
a three month delay in the launch of the new product. Which meant Hundreds of thousands of
dollars. As you can see, something that seemed unrelated to the product could set back your
launch and add to your costs. My third success factor is to set specific go-no go milestones with
specific decision-making criteria and stick to them.

Some years back, I purchased the rights to an American franchise to open up stores in Spain.
Having a well-thought out business plan, we had to find the key premises for each store to be
profitable. One of the premises was the highest amount that we could pay as a rent for where the
stores would be. And also the traffic footfall, the amount of people that we need to pass in front of
our store everyday. In this line of business, the most difficult task was to get the retail space.
After visiting all shopping mall owners, realtors, etcetera. We were eagerly awaiting to find
something to open up. After some months, we finally got a call from a major mall owner, offering
a space in his new mall. Next to Carford and Ikea, we were amazed. How lucky could we be?
However the price was 30% more than our business plan and the conditions required a
significant upfront cash payment. Despite having a go-no go milestone and a criteria for deciding
on locations. We let the best or our hype on gut make the decision, launching the first store in
this mall. It proved to be a disaster. At the beginning, we could not sell enough products to pay
the rent. As we began to sell more and get acceptance of our product, the footfall of the mall
decreased. And thus our sales went down. At the end, we had to close down within 18 months of
opening. My fourth success criteria, when launching your products, is to consider the competitive
advantages of your organization. For example, is your company small and with a flat structure?
Then one of the advantages that you may have, is that you communicate very well and can make
joint decisions very quickly. How can you incorporate this in your product launch? Maybe defining
a plan for monitoring the launch. And a system to make quick changes in pricing, in promotion, in
features, etc. That will allow you to test and learn. Let me share another example. I work with a
company that makes products for body shops. But they don't sell directly but rather through
distributors. However, this company has a technical team which visits body shops regularly. To
help the owners get the most out of the product. These visits allow them to capture lots of
customer insight that could provide a competitive advantage to the company. But how can the
user launch in your product? Well, beyond the obvious which is feeding back the needs that
could be the seed of new products. They can also help in developing grade value propositions for
both the distribution and the body shop. They can be the door openers for the new products.

They can also through their job of training. They can facilitate the quick adoptions of the new
products, etc. On the other hand, you should also include in your product action plans, how to
develop the capacities needed for the launch. Which are those critical competencies to reach our
objectives? Which ones are the nice to have? I think the best case is to illustrate this our
software companies. How many times they have launched a software addressing a mainstream
consumer. And they dont' have the support hotline to help you navigate through them or answer
questions. It is also very common in the Telco Industry, where they might launch a new plan. But
nobody has been trained to activate it in their systems. The fifth success factor is to generate a
business case, that summarizes the concept's viability. We also look at the new product in the
context of the company financials, and not as a standalone business. Well, if it is to be
sustainable, we should definitely evaluate what other resources that it requires. And develop a
model with scenarios from pessimist to optimist. We should even do a stress test, and evaluate
the organizational capacities and competencies required for success. To ensure that we are able
to deliver them within our model cost structure. Think of it. If we're a start-up, a new product
might eat up all of our resources. And at least we should be aware of the parameter of the risk
that we're taking. There are many other factors to consider when developing and launching new
products.

What is a brand and how do you develop them?

There are so many perceptions about brand, here is a survey for 100 people when they were
asked their perception about brands

But the more important question might be, why do you need a brand?
Brands are a worthwhile investment for at least four simple reasons.

The first one is that a strong brand adds value to your product and how? By differentiating you
from competitors, by helping you achieve recognition or even by clarifying to customers what to
really expect for you.

Let’s imagine that, when you buy a car, would you buy a car if it had no brand? No, definitely
no. Because we trust the brand. It's a brand that has a history that I feel comfortable
with.
Second is people tend to do business with companies they're familiar with. If your branding
is consistent and easy to recognize, it can help people feel comfortable at ease purchasing your
products and services. Secondly, a strong brand is capable of building loyalty towards your
product. It generates referrals. People love to tell others about the brands they like. People wear
brands, eat brands, listen to brands and they're constantly telling others about the brands they
love. On the flip side, you can't tell someone about a brand you can't remember.

So here is a conversation with a man who is shopping for a camera for his girlfriend and is
looking at this one that is pink and he likes it for her, but I don't think I'm going to buy this one in
particular because he doesn't trust the brand at all. It's a purchase that requires a lot of effort in
finding which one because he is going to pay a certain amount of money for it. He’s always going
to choose a brand that he trusts, that he thinks is going to give him a good product.

Third, your brand provides motivation and direction for your team. A clear brand strategy
provides the clarity that your staff needs to be successful. It tells them how to act, how to win and
how to meet the organization's goals. It also helps them by providing clarity and focus on what
your brand stands for.

Lastly, a brand also creates value for your organization by generating an asset. For those of you
who have seen the reports about the most valuable brands in the world, these are real values in
the balance sheet of companies. If they are sold, they can achieve higher prices because of their
brands. Think about the brands that you purchase, Coca-Cola, Apple, Ford, Frito-Lays, etc. Are
these companies really worth their equipment, their products, their warehouses, or factories? No,
these companies are worth much more than their physical assets. Their brand has created a
value that exceeds their physical value.

Inputs for developing your brand.

Let me begin by saying that if you're going to invest money in this brand, you might as well spend
the time developing by using a thorough methodology. I have seen people come up with brands
overnight. Only to realize that it's either not sufficient to engage the customer or not differentiated
versus competitor or not credible or even worse not even aligned with our business strategy.
There are many ways for developing brands. However I am warning you, it takes time to develop
because you need to do some homework. I like to think of this methodology as a puzzle with at
least five pieces. At the center of the puzzle is the Business Strategy. I don't want to spend a lot
of time talking about it. However before you begin you should have a clear understanding of your
long term goals. Where will you compete, and how will you compete in the marketplace? Your
brand has to be in sync with it. Imagine that you come with a line of ready to eat package meals,
and you brand it with Colgate. There is definitely a disconnect between selling more meals and
your brand.
The second piece of our puzzle is understanding your existing brand image. If you're developing
a new brand, you don't need to consider this point. However, if you're developing a brand for the
product which you launch only with a logo or a new brand altogether, you do need to think about
it. The goal of this part of the analysis is to identify what are the existing perceptions that your
target customers have about your brand. This can be done via listening to social media postings
or surveys, or focus groups. Whichever method of consumer research you have available. You
need to know this, because you will need to either build on this perceptions or chain them
altogether. In any case, it is a starting point.

I had a client that thought that the fact that their sales people were perceived as nice to deal with,
was a positive image for their brand. As it turned out, it was quite the opposite, because
customers wanted to deal with the brand that was efficient, professional people instead of nice
sales people. In addition, you should also consider including the perceptions of the people within
your organization. The best way to engage them is to invite them to participate in providing their
opinions. You will be surprised what you can learn from them. The third piece of the puzzle is to
identify the market trends that can have an impact on customers and the brand. For example, if
we were to develop a brand for a lemonade business, we need to consider the trends related to
the current perception of lemons in our health or trends in people drinking natural juices versus
other types of drinks. Also, we might look up growing preference for fresh made versus ready to
drink beverages or greatly demand for exotic flavors and variety.
Another possible analysis is to look at sales volumes into different drinks sub categories to learn
which ones are growing or declining. All of these methods might be useful in determining how we
frame the market for a brand. We might also look at trends in retailing. Are people expected to
spend more time in the street? As with these first two pieces of the puzzle, we can draw
conclusions from these trends that will have an impact on how we define our future brand. The
fourth piece of our puzzle is customer analysis. The goal of this is to determine which benefits we
can offer that motivates customers to buy and use our brand.

Qualitative research is generally best to uncover these benefits. Their real insights will come from
probing those areas that are not obvious to the customer, but that are influential in the brand
choice and the user experience. After we have uncovered them, it is crucial to determine their
relative importance for the customer. And if they can be clustered into different segments. This
can be done by identifying major categories or dimensions of motivations that summarize how
customers organize information and develop their attitudes towards brands in a specific product
category.
For me, what has worked in every case is to identify their unmet needs, those that are not met by
existing brands in the market. I suggest that you use the five whys techniques. Ask why multiple
times in an iterative process for getting to the root cause of a perceived need of the target
customer. By asking why and answering at least five times, most people will be able to dig down
and clearly articulate their core issue. For example, let's say that you are a potential customer
and I will use this technique to uncover your needs. My product is a PC notebook. I could begin
by asking you, why would you use notebooks? Imagine that your answer is that it is convenient
for you to be able to take everything from home to work, instead of relying on the cloud.

The fifth factor is competitors.

How to analyze your competitors.

The reason that you analyze competition is because your brand ultimately has to be
differentiated versus competitors. You need to have a credible positioning. What good is your
brand if you offer the same benefits as your competitor? Customers will then decide on other
elements such as price or availability. You want to avoid that. Credibility is also very important for
your brand. Imagine that you claim something which in the minds of customers is unbelievable.
We can learn from competitors which are the ones most commonly used in the industry and the
ones that your customers value more. So how do we do a competitive assessment? Step 1 is to
define your competitor set, which are the companies that target your customers? Whether they
are products competing head to head with yours, or they might be substitute products. Step 2 is
to gain insight into how local competitors position their brands in the minds of the customers. By
collecting and analyzing their communication, such as looking at ads, their website, through
online research, blogs, brochures and through personal interviews with industry people. Step 3 is
to dissect the different elements of their positioning. Let's work with this model whereby we will
try to find two components of their position. The first one we will call the differentiating benefits or
attributes. These are the unique elements that convey the brand, what the brand represents in
the marketplace. Our analysis should answer what is the end benefit of the brand? What is in it
for our target customers?

Imagine a sales associate at a bicycle store was struggling to get the prospective customer, a
man in his mid 30s, to understand his point. He kept explaining that the bicycle has an advanced
foam seat. And that is a reason for being so more expensive as compared with other bicycles of
the prospect that was evaluating. The look of confusion would not leave the prospect's face, he
wanted to say so what, this is an attribute of the bicycle. It is rare that consumers made the
connection between the attribute and the benefit it provides. In this case, the salesperson
assumed that the customer would be able to figure out the benefit on his own. Which of course
we know was the writer's rear end would hurt less when he was writing. The second component
we will call reasons to believe. What supports that differentiating claim we have identified? It
outlines the proof points or what the brand is claiming to credibly deliver on the positioning.

For example, in our previous story, by claiming that the foam was made from a special material
that was tested to be more comfortable among 50 customers doing 50 miles daily, you can begin
to deliver credibility. Alternatively, you could also claim that it is the foam used by a famous bike
racer in all of his races. An indirect endorsement from the racer provides the credibility that the
brand requires. In the analysis as well as through customer research it is important to
differentiate those components which are the differentiators versus those which are table stakes.
What do I mean by this? In some industries, there are certain benefits, attributes or proof points
which you must offer, only to be considered by customers. For example, nowadays, smartphones
almost need to have a camera to even be considered by any segment of customers. This is a
tablestake attribute. If your smartphone immediately improves your photo by correcting for light
movement and even your wrinkles. Then that's a differentiator.

Having explained these concepts, I want to share with you a real life example in an industry that
most of us are exposed to. Residential real estate. Some years back, we worked with a very
large developer in defining their brand. In step one, we have to define their comparative set. We
ask ourselves, should we consider only those in his neighborhood? In the surrounding
neighborhoods? In the city? In the county? In the state or nationwide? Since he was building in
more than one city located in two states but with plans to grow to the western part of the country,
we decided to consider larger players that actually played in the same field. However, we also
took into consideration how customers made their decisions where purchasing residential real
estate. Was it because they wanted a local, a state, a regional or a national brand? For the
started customers, the geographical presence was a decisive factor in their purchase. In step
two, we collected all of the communication available from each of the developers. We went to
each of their sales offices, collected brochures, pretended to be clients, visited their websites,
etc. We also interviewed people in the industry and collected their thoughts on how they
perceived each competitor. In step 3 we analyze this communication, and let me share some
results. All the benefits and attributes of the company's analysis can be categorized into specific
functional and emotional themes. An example of a functional benefit might have been location.
Developers claim to have the ideal location. An example was to claim the most convenient
location in an urban and business center because it provided proximity to other businesses.
Those facilitate having everyone close. Job, home, retail etc. So this was particularly attractive
for people who dislike driving and prefer a city life. An emotional benefit was that they offered an
enrichment of your customers' lives.

Enrichment lifestyle meant different things, but it could be summarized as beyond the physical
property, end users would actually obtain a whole lifestyle with their property. Or they could
maximize their time by striking the balance between working and leisure time. Then we analyze
the proof points or the reasons to believe. For those who claim location, they provided the
distances between major business center and their buildings, or travel time in public transport or
walking. Or they provided a map that showed all of the stores and services available within a
short distance over the building. For those who claimed enrichment, they actually mentioned that
you could have build long lasting friendships in their development because of the integrated
mixed use concept such as a gym, the children's park, the supermarket, etc. It was easy to meet
others alike. However, we also discover other tables take elements. Which all developers have to
have in order to be considered by customers. These were track record, number of delivered
properties, number of dollars invested, number of clients in credentially, it was all about
endorsement or partnerships or awards. As you can see, these analysis yields lots of information
that will allow us to know how to develop your differentiated and credible brand. Furthermore, we
can develop a positioning map to know where there are opportunities to position our brand, let's
look at one. In this one, we have chosen two key variables that our target customers used to
purchase, amenities and the second one is customisation options. When you place the benefits
of obtained from step three above you can clearly see where every competitor focus their
position. The positioning map is a great tool to locate white spaces in the competitive landscape.
The empty space on the map that no competitor has claimed or filed for yet. You can claim it.
The next step in creating your brand is to define which method and model you want to use. The
one that laps better to your organization.
A Brand Guide: The Power of Branding
What is branding?

If a brand results from a set of associations and perceptions in people’s minds, then branding is
an attempt to harness, generate, influence and control these associations to help the business
perform better. Any organization can benefit enormously by creating a brand that presents the
company as distinctive, trusted, exciting, reliable or whichever attributes are appropriate to that
business.

While absolute control over a brand is not possible due to outside influences, intelligent use of
design, advertising, marketing, service proposition, corporate culture and so on can all really help
to generate associations in people’s minds that will benefit the organization. In different industry
sectors the audiences, competitors, delivery and service aspects of branding may differ, but the
basic principle of being clear about what you stand for always applies.

How brands are changing

In the last few years the digital communications revolution has completely transformed this
balance of control. The consumer's voice has become louder and much more public. Consumers
can publish their experience of a brand and compare it with the experience of others. The ability
of a brand to respond to this can have a profound affect on the way they are perceived. It's also
affecting the types of brand that achieve prominence. There is even a thriving market in brands
whose primary strategy is to champion the consumer's voice, Tripadvisor is one of the most
famous (or infamous depending on your point of view) of these.

Let's return to Coca-Cola briefly. After 13 years of dominance in 2013 they were knocked off the
top spot in Interbrand's influential listing of the leading 100 global brands. The two brands that
overtook it were indicative of the way the world has changed. At number one was Apple, and at
number two - Google. Both companies are rooted in technological innovation, but perhaps more
importantly both brands are focussed on providing products and services that make people's
lives easier.

Apple's transformation from a computer manufacturer to a media giant didn't happen just
because of the introduction of the iPod and iPhone. It happened because they developed
revolutionary new services around those products - iTunes and the App Store. They thought very
hard about their customer and what would make their life easier. Whilst Google has started to
develop hardware products its brand is rooted in its incredibly popular search service.

Both those brands are resolutely customer-focussed, and great branding and responsive
behaviour allowed them to build the right kinds of connections with their customers to thrive.
Although eclipsed by the two technology giants on that particular chart, Coke too continues to
use its brand clout to create the closer connections with people that today's communications
landscape demands. A great example of that is the 'Share a Coke' campaign they launched in
the Summer of 2013, allowing people to buy a bottle of Coke with their name on.

The key ingredients of any brand

In this section we outline the four cornerstones of any good brand using examples from the
business world.
Defining your brand
If you’re thinking about how to rebrand your business, its products or services, or if you want to
assess where your brand stands at present, there are a few key aspects you should consider:

● The big idea – what lies at the heart of your company?

● Values – what do you believe in?
● Vision – where are you going?
● Personality – how do you want to come across?
● If you can start to answer these questions with clarity and consistency then you have the
basis for developing a strong brand.

Let’s take each of these in turn.

The big idea

The big idea is perhaps a catch-all for your company or service. It should encapsulate what
makes you different, what you offer, why you’re doing it and how you’re going to present it. The
other ingredients are slightly more specific, but they should all feed from the big idea.

The big idea is also a uniting concept that can hold together an otherwise disparate set of
activities. Ideally, it will inform everything you do, big or small, including customer service,
advertising, a website order form, staff uniforms, corporate identity, perhaps right down to your
answer machine message.

To pin down your own big idea you will need to look very carefully at your own business and the
marketplace around you, asking these types of questions:

● How can you stand out?

● What is your offer?
● What makes you different?
● What is your ‘personality’?
● What do consumers want or need?
● Is there a gap in the market?

To aid this process it’s usually very helpful to get an outside perspective on things too, so
consider working with a management consultant, business development consultant or design
consultancy.

Once decided, the articulation of these ideas can be put into action through branding techniques
such as design, advertising, events, partnerships, staff training and so on. It is these activities
that set up the consumer’s understanding and expectation of your company; in other words, its
brand. And once you’ve set up this brand ‘promise’, the most important thing is to ensure that
your products and services consistently deliver on it.

IKEA: the big idea

IKEA is a good example of a company with a big idea. Its brand is based around the notion that
good design is for everyone, not just design snobs. Past campaigns have urged us to ‘chuck out
the chintz’ and fit out our homes with well-designed furniture and products at affordable prices.

Their branding plays on this central idea of the democratisation of design. In the last few years
they have created advertisements featuring house parties in IKEA homes, campaigns where
customers could appear on the front cover of their own IKEA catalogue and in 2013 they
demonstrated their commitment to providing design for everywhere even the smallest spaces
with the smallest IKEA store in the world.

In stores, products are given individual names and customers stack up their trolleys from the
warehouse themselves (saving IKEA money in the meantime). This is all in keeping with the idea
that you don’t need specialist, privileged knowledge to go out and buy good design.

Vision
Generating a vision for your company means thinking about the future, where you want to be,
looking at ways to challenge the market or transform a sector. A vision may be grand and
large-scale, or may be as simple as offering an existing product in a completely new way, or even
changing the emphasis of your business from one core area to another.

Although corporate visions and mission statements can often appear to be little more than hollow
dictums from top management, a well-considered vision can help you to structure some of the
more practical issues of putting a development strategy into action. If you’re clear on what you’re
aiming at, it’s obviously easier to put the structures in place to get there.

Example: Microsoft

Microsoft: vision
An example of vision on a large scale comes from Microsoft chairman Bill Gates, who knew
exactly where he was going with his company even in the early days:

And this comes from a company which until 2013 had never actually made computers. The vision
lies in seeing where the market is going and asking where you want to be: in this case, providing
the operating software for the computers that sit in offices and homes around the world.
The Microsoft brand which resulted is inextricably linked with computing. Most PCs come with
Windows as standard, even though the computer hardware can be run with a number of different
operating systems.

Values
Like the word brand itself, the term brand values is perhaps a little over-used in design and
marketing circles, but it does relate to important aspects of how people see your organisation. It’s
what you stand for and it can be communicated either explicitly or implicitly in what you do. But
imbuing your company’s brand with a set of values is tricky for a number of reasons.

Firstly, everybody wants the same kinds of values to be associated with their business. A survey
by The Research Business International (now part of Synovate) found that most companies
share the same ten values, namely: quality, openness, innovation, individual responsibility,
fairness, respect for the individual, empowerment, passion, flexibility, teamwork and pride.

Secondly, it’s not easy to communicate values: overt marketing may seem disingenuous, while
not communicating your values in any way may result in people not seeing what you stand for.
And lastly, any values you portray have to be genuine and upheld in the way your organisation
operates. Branding and design consultants can help you clarify what your organisation or
business stands for and then they can develop ways for you to communicate that effectively. This
might be through graphic design, language, advertising, staff training, the materials used in
product manufacture and so on.

Branding and design consultants can help you clarify what your organisation or business stands
for and then they can develop ways for you to communicate that effectively. This might be
through graphic design, language, advertising, staff training, the materials used in product
manufacture and so on.

Pret A Manger: values

Pret A Manger makes a big play of valuing fresh food and minimising wastage. So, all its food is
made on location each morning (with no sell by dates) and any left over at the end of the day is
given to homeless charities and shelters.

In this way the company has laid out a value and has followed it through with the way it runs its
service.

Burberry: rediscovering values

Burberry is an example of a brand that for a while, lost it's core values and was beginning to
underperform.

Originally a luxury manufacturer of raincoats, it had become near ubiquitous. The famous
Burberry check was appearing on everything from dog leashes to t-shirts. Consistency of the
brand had been lost, with customers around the world getting a different experience. In 2006 new
CEO Angela Ahrendts brought luxury firmly back to the agenda, appointed a single creative
director to oversee the brand worldwide and ruthlessly cut away the baggage that had begun to
attach itself to the brand, reducing the product line back to the luxury, high-end of the market.
Coupled with a creative and considered use of new technology this has resulted in the revenue
of the company rising from $1190 million in 2006 to over $3000 million in 2012.
Personality
Once you have established your ‘big idea’, vision and values, they can be communicated to
consumers through a range of channels. The way you decide to present this communication –
the tone, language and design, for example – can be said to be the personality of your company.

Personality traits could be efficient and businesslike, friendly and chatty, or perhaps humorous
and irreverent, although they would obviously have to be appropriate to the type of product or
service you are selling.

It need not have anything at all to do with the personalities of the people running the company;
although it could, if you want to create a personality-driven company in the way that Richard
Branson is very much the figurehead for Virgin.

And for smaller companies, the culture and style of the business can often reflect the founder, so
its values and personality may be the same.

Here are a few examples of how you can start to control the elements of your company’s
personality, conveying certain aspects to customers in different ways:

● Graphic design: The visual identity – hard corporate identity or soft, friendly caricature?
● Tone of voice: Is the language you use (both spoken and written) formal or relaxed?
● Dialogue: Can your users or customers contribute ideas and get involved in the
organisation? Or is it a one-way communication?
● Customer service: How are staff trained to communicate with customers? What level of
customer service do you provide?

As companies grow, their personality and values are reflected more in internal culture and
behaviour than through the characteristics of the founders. This personality then defines how the
companies express their offer in the market.

John Smith's: personality

A few years ago John Smith’s Bitter built its brand almost entirely out of personality: in this case
the traits of a bluff, 'no nonsense' straight-talking Yorkshireman. This ‘no nonsense’ strapline and
sentiment carries through all the company’s communications with customers. The use of the
celebrity Peter Kay to front recent campaigns was a natural fit.

Putting it all together

Using the key ingredients that we’ve outlined here – and bringing in consultants to help you
define and implement them – will give you a solid understanding of your organisation’s brand, as
well as strategies on how to present it to people.

Starting with the big idea, you can then go on to refine and set out your company’s vision, values
and personality. And once these are all in place, you can think about hiring designers to turn your
brand blueprint into tangible communications.
Brand management techniques
Once your encompassing brand ‘promise’ is in place, you need to consider how you will
communicate it and then how you will manage and develop it over time.

When it comes to communicating your brand to the public, there are a few techniques and issues
that are worth considering:

Storytelling
An established technique in branding a business is to tell its story through communication
elements such as corporate identity, packaging, stationery, marketing materials and so on. This
can be quite low key, but it paints a picture of the provenance of the company and its products.

Sheffield butcher John Crawshaw, for example, hand-picks the meat sold in his three shops,
whilst most of his competitors have their meat delivered in vacuum packs from an abattoir.

So, to illustrate this aspect of his service - or brand offer - a logo showing a butcher carrying a
carcass over his shoulder was designed for Crawshaw’s business.

Credibility
The credibility of your brand’s offer must also be solid. For example, a Yorkshire drainage
company called Naylor launched a range of lifetime-guaranteed flower pots, but the Naylor brand
was inappropriate to market this range because it was associated too directly with the drainage
side of the business. So the company set up a new brand called Yorkshire Flowerpots, with its
own tone of voice, personality and visual identity so that it could sell the products with greater
credibility.

Differentiation
A great deal of branding is about defining and presenting a point of differentiation in the sector
you’re operating in. Get this right and your organisation will stand out brightly against your
competitors.

Construction company Hilti provides an example of differentiation in a sector. Whilst most other
construction companies use technical images of buildings and products in their communications,
Hilti emphasised its relationship with the people involved in construction, showing black and
white photographs of workers using Hilti tools, which are highlighted in the company’s corporate
red.

Engaging with customers

Part and parcel of creating differentiation is engaging with your customers or users. If you stand
out of the crowd for positive reasons and your tone of voice and communications are credible,
customers will look at what you’ve got to say.

When Orange launched in the mobile phone market in 1994, its identity, language and offer were
very distinctive from its established rivals. It presented an optimistic vision of the future based on
technology, but from a human rather than technical point of view. Its logo and name were
abstract, creating a stand out against BT Cellnet, T-Mobile and Vodafone, and its services were
organised into simple talk plan packages.

For over a decade, this approach has remained more or less unchanged. For instance, the 2008
Orange campaign revolved around the slogan 'I am who I am because of everyone'. Adverts
featured a series of individuals (including recognised entrepreneurs, artists and writers) listing the
people that have most influenced the course of their lives.

By appealing to everyone's sense of individualism and focusing on the value of human

interaction and communication rather than competitive price plans or the latest technology,
Orange are able to extol the benefits of their service without ever having to mention mobile
telephones.

Your product portfolio

If you have a number of different products or services it may help to consider how you can
streamline or organise them to make the offer easy for consumers to understand. Sometimes,
the logic of internal company structures can dictate how a product offer is organised, but this
does not necessarily make sense to an external customer. So think carefully about the best way
to present what you do, even if it means setting things up differently from your internal
organisation.

Rationalisation of products or services might also allow you to focus your investments more
efficiently. After working with the Design Council, household cleaning product manufacturer
Challs shifted its focus to four key products, rather than the 92 it had previously been promoting.

Multiple brands and brand ‘stretch’

If your company operates in more than one sector you will have to consider how you present the
business in each area. One approach, as illustrated by Virgin, EasyGroup and Tesco, is to have
a single brand identity which is applied to sub-brands for the areas you operate in. So we have
Virgin Money and Virgin Atlantic, Easy Pizza and Easy Cruise, Tesco Entertainment and Tesco
Finance and so on.

Just how far you can ‘stretch’ your primary brand in this way depends on the core ideas, values
and associations you have to start with. In some cases it may actually be more effective to
develop a completely distinct brand for the different sectors you want to operate in, rather than
stretch your existing brand to meet new markets. As mentioned above, for Naylor’s flower pot
business it made more sense to set up a dedicated brand called Yorkshire Flowerpots than to
associate it with the existing Naylor drainage business.

There have been some notable and high-profile failures when it comes to brand stretch. A natural
cleaning vinegar launched by Heinz bombed as a product because people associate Heinz with
food, not cleaning. Harley Davidson (over-)extended its range to include perfume. This failed
because it was perceived as being at odds with the Harley Davidson brand values of masculinity
and strength.
Endorsed brands
A slightly more sophisticated possibility is to set up ‘endorsed’ brands. This is where you create a
new brand in its own right but allow the ‘parent’ brand of your main company to feature as an
endorsement of the new brand. Playstation, for example, is a powerful brand in its own right, but
it has always been endorsed as Sony Playstation, leveraging the reputation of Sony Corporation.

Reinvigorating your brand

Whatever sector you work in, keeping your communications fresh is essential. Using designers to
help reassess your designs, language or identity every few years should be seen as an ongoing
investment in your company rather than a costly extra.

All successful companies revisit their communications periodically, even the world's most
recognisable brands. But reinvigorating your brand doesn’t necessarily mean you have to start
from the very beginning, reconsidering your big idea or vision and so on.

Take Coca-Cola for instance. They are constantly reviewing all aspects of their brand and
refreshing them. In 2007 they commissioned design agency Turner Duckworth to produce a
range of new packaging designs that would breathe new life into the cornerstones of Coke's
visual identity; the classic logo, the contour bottle and the use of red and white. In 2009 they
launched a new strap line 'Open Happiness' and in 2013 they created personalised labels for
their bottles.

If you're happy with your company's big idea, vision and personality, these things can remain the
foundations of what you’re doing - but the implementation of your brand should be refreshed to
keep things on track and ensure it remains relevant to your target audience.

Naming
Brand names are an important aspect in setting the tone and personality of your brand, as well
as being a key element in marketing activity. Along with design and tone of voice, a name can be
a means of differentiation and should reflect the overall brand strategy you’ve developed.

Choosing a name can be a difficult task in itself, but it’s made even harder because so many are
already in use and trademarked. Be sure to check carefully that any names you’re considering
for a company, product or service aren’t already in use and protected by law.

On the whole, a name falls into one of a few types, which can be arranged along a kind of
spectrum of attributes.

These attributes are:

Descriptive
Names which simply say what the company/brand does. For example:
● Easyjet – makes flying easy
● Toys ‘R’ Us – is all about toys
● AA (Automobile Association) – is for motorists
● Evocative
Names which suggest associations to the brand but do not try to describe the offer precisely. For
example:
● First Direct – first bank to offer instant telephone banking
● Innocent – natural purity of the fruit juice
● Abstract

Names that break sector rules and stand out. They make no clear reference to the nature of the
business. For example:
● Google – quirky, accessible, positive and suggests curiosity
● Aviva – an invented name than suggests dynamism and movement
● Toast – suggests familiarity and warmth

Consistency
In branding and brand management a lot of importance is placed on achieving consistency, so
that the same attributes and characteristics are evident in all areas of the business’ operations.
Essentially, 'the big idea’ touches and informs everything you do.

Some contemporary brands are less heavily ‘policed’ in this way. There is a trend towards
encouraging customers to generate their own content or interpretations within a framework of
branded elements or templates. The London 2012 Olympics logo, for example, was designed by
Wolff Ollins with these types of user-generated adaptations in mind.

Evolution or revolution
An important question when undertaking any reassessment of your brand is whether to go for
small, incremental changes as a refresher, or to plump for a major overhaul of your company’s or
product’s image.

Broadly speaking, evolution is preferable if you are already in a strong position with a solid
customer base and you just need to keep up with a growing or developing market. Revolution, on
the other hand, might be more appropriate if your customer base is in decline, the market has
changed substantially since the inception of your current brand or you have no point of difference
from your competitors.

To work through these kinds of questions it is a good idea to consider hiring a designer to look at
the current status of your organisation and explore possibilities for developing it.

BP: evolution, then revolution

A BP corporate identity designed in the early 1920s was used for over 80 years, with refreshed
versions appearing periodically to keep the logo looking contemporary. However, in 2000 there
was a break from the past when the corporate identity was completely redesigned to create the
current tessellated 'sunflower' or Helios identity. This change was a reflection of a change in the
company’s approach to environmental concerns.

BP's emphasis on the development of renewable energy sources was encapsulated in the
tagline ‘Beyond Petroleum’, along with other similar aspirational, environmentally themed
messages, such as ‘bigger picture’ and ‘better products’.

Apple: revolution, then evolution

The original Apple Computer logo was a complex, illustrated picture of Isaac Newton sitting
under a tree. Company chief executive Steve Jobs thought the overly detailed logo had
something to do with the slow sales of the Apple I computer, so he decided on a complete
change in identity – a revolution of the corporate visual design - and commissioned the rainbow
striped logo, which then ran for 22 years. A revolution in branding was needed to kick-start
demand for the company’s products. But by 1998, Apple was firmly established as a successful
computer manufacturer and so the rainbow identity underwent an evolution to become today's
simpler more contemporary monochrome logo.

Durex: evolution
Condom manufacturer Durex decided to broaden its appeal by positioning the company as being
concerned with sexual wellbeing, rather than just condoms. It’s an evolution of the existing Durex
brand that adapts to a changing marketplace and keeps the company’s identity and associations
fresh.

Lucozade: revolution
Carrying the slogan ‘Lucozade aids recovery’, the product was originally manufactured by a
Newcastle chemist as a source of energy for people who are unwell. But its market share was
declining in the 1980s, so the company opted for a revolution of the brand, targeting a completely
new customer base. Its energy-giving qualities were promoted to the sports performance market
and an advertising campaign featuring athlete Daley Thompson used the new slogan ‘Lucozade
replaces lost energy’. Product packaging was completely redesigned and sales subsequently
tripled between 1984 and 1989.

Branding for different sectors

In this section we explore the similarities and differences between branding in different market
sectors.

Start-up businesses
If you’re launching a new business, you’re in a unique position to operate as what is often called
a ‘challenger brand’. This means that you can take a look at a market sector from the outside,
assess all the players, opportunities or gaps in the market and then launch your product with a
brand that challenges and shakes up the conventions of the sector. It’s hard to do this once
you’re established as there’s more to lose, so think carefully about how brave and ‘rule’-breaking’
your product or service can be if you’re about to launch to market.

Another benefit you may have as a start-up is that the business is likely to be small and therefore
responsive and adaptable, with no existing processes that have to be changed to create a new
brand. In short: you’ve got one shot to do something exciting, relatively cheaply, so go for it.

Gü: start-up brand

Gü was launched into the chilled desserts market as a premium product whose name (an
invented word) simultaneously hints at a European origin and evokes thoughts of gooey
chocolate or treacle.

The name and graphic black and white packaging all broke the ‘rules’ of design and branding in
the desserts sector and the product consequently stands out strongly in supermarkets.
The brand has subsequently been extended with the launch of Frü, a range of fruit desserts.

Public sector
Although all branding is about communicating a clear offer to your customers or users, branding
in the public sector is not necessarily as concerned with maximum market stand-out, as it
typically is in the commercial/private sector. For public sector organisations, such as the police
force and health services, the focus may be on clarity and access to important information. So
branding and design may focus on signposting this information or communicating issues clearly
in order to change people’s behaviour – a Department of Health quit smoking campaign, for
example.

Clarity can sometimes fall foul of the complex nature of public sector services, which are often
run by a network of stakeholder organisations or partners. In branding terms, putting the logos of
all such partners on ‘customer’-facing communications can lead to visual clutter, a lack of clarity
and confusion. It’s important, therefore, to be clear when a brand or branded campaign is needed
and to ensure that its identity is distinct and clear for users.

GOV.UK: public sector

In 2012 GOV.UK moved out of Beta mode to replace the two main government digital brands
Directgov and Business Link. The launch of the site was the culmination of a huge review
process conducted by a newly formed Government Digital Service. Prior to its release the
government's digital presence had been spread across multiple confusing sites and internal and
security needs took priority over user needs. By creating one brand to deliver governmental
information online the confusion was lessened. The site itself was developed based on the user
needs of the huge range of people that would need to use the site. The brand itself developed
directly out of that. Simple, clear and fast to use, a focus on openness and transparency defines
the aesthetic and crucially, the tone of voice.

Service companies
Whilst most companies and organisations are providing a service of one type or another, for
some businesses customer service is the dominant part of the offer. For these companies
particular attention needs to be paid to how the brand (the big idea and all its components) are
reflected in the way the service is provided and the way staff interact with customers.

In essence, service brands are built on the people who deliver them. This means that staff need
to be trained to get an understanding of the company’s culture, its 'promise' to customers and
how they will be put into practice on a day to day basis. In this scenario, the human resources
department is closely linked to brand management.

First Direct: service

First Direct was the first company to bring a 24-hour banking service to the market and its level of
service was a key message in promoting the bank to potential customers.

To ensure the delivery of high quality service, First Direct recruits people with customer service
skills rather than those who are already in the banking industry. This ensures that the company’s
service delivery matches its brand ‘promise’.
Business to business
A lot of the brands discussed in this guide are consumer-facing brands, but many businesses
market their products and services directly to other businesses, not the public. But the principles
of effective branding apply in just the same way in the B2B sector as elsewhere. As in consumer
products, B2B companies need to use branding to differentiate, stand-out and create a distinct
personality, even if that personality is more corporate and business-like in its tone.

Mechan: B2B branding

Mechan designs and manufactures mechanical handling equipment for the rail industry, but by
2005 its image was starting to look dated. At the same time the company was faced with a static
UK market and growing competition from abroad, so it needed stronger communications to
create impact with potential business customers.

Working with a designer the company researched what the brand actually stood for (the big idea)
and then a branding consultancy created a visual identity that is strong, clean and simple and
works across all the company’s communications, including products, website, trade stands and
literature.

Design and branding

An organisation’s brand is a whole set of associations which people make when they think about
or encounter that business.

A common misconception – and one that designers are always at pains to correct – is that a
brand is simply a logo or identity. The logo is just one manifestation of a brand, although it’s often
a top-level communication, seen most frequently by the greatest number of people. It should
therefore embody the key ingredients of the brand in a distinctive, recognisable marque.

Take the Nike ‘swoosh’ for example. Designed in 1971 by Carolyn Davidson, then a graphic
design student at Portland State University, the swoosh is a simple yet effective logo that
conveys energy and movement, appropriate to a company that makes performance sportswear.

So, while brand building and branding are complex, strategic activities, there is almost always a
vital creative design component too.

Design is what translates the ideas into communication. And many designers will work through
both the strategy and the implementation to ensure that the results are consistent, adaptable and
in-keeping with your original brand attributes.

Key design ingredients

There is a range of design elements that can be used to convey a brand proposition. Here are a
few of them, with an example in each case:

● Colour – Orange
● Shape – Toilet Duck
● Name – LOVEFiLM
● Touch/materials – iPhone
● Sound – Intel
 ● Illustration – Lloyds TSB
● Typography – BBC
● Environment – Guinness Storehouse

After working through a branding project with designers you should be left with something called
brand guidelines. This is a document which details exactly how the different design elements
(typically visual) should be applied in different situations. It will give information on things like
typography, graphics, colors, materials, templates and photography used in the visual
manifestation of the brand, providing instructions on how to apply them in different contexts, at
different scales and so on. More detailed brand guidelines may include things like cultural or
behavioral directions for staff training.

The organization can use these brand guidelines to manage the brand after the designer’s work
on the project is completed without losing the original consistency and clarity of the designs and,
most importantly, with losing sight of your original big idea.

Defining your brand model.

There are many models out there to develop your brand strategy. Every good agency consultant
has developed one. I will share with you a simple way of thinking about it which has worked for
me. It is based on David Acker's brand identity model. Why do I use this particular one? Because
it is simple to use and to explain. Think about it, this is like your elevator pitch for your brand. You
need to be able to explain it in a few words and make a compelling reason for your stakeholders
to buy into it. And I say stakeholders, because on the one hand you have your customers. Let's
stop and think of a peach.

At the core of a peach, you have the seed which is the basis of the fruit. You can plant
it and it will hopefully grow again with the same quality as always. Next, you have the flesh,
which is what you actually experience when you eat that peach. It provides the flavour and
delivers all of the nutrients that you receive from the fruit. On the outside you see the peel or the
skin, which is what you see before you actually eat the skin. If you think of it, the peel is the part
of the fruit that defines how you perceive it before actually buying or eating it.
The brand identity model works similarly. If we start from the center, there is a brand essence.
The heart and the soul of the brands, which it lasts for a long time. It guides a strategy. It
summarizes who we are and what our key promises are. For Philips, for example, it is technology
designed around customers. For Starbucks, it's rewarding everyday moments. For BMW, it's
sheer driving pleasure. We will discuss more on brand essence during our next lecture. Next is
the flesh or the equivalent to our brand values. Externally it is what we experience when we
consume the brand. Internally it is the most important competencies that will be consistent across
our offering. They are the drivers of strategic initiatives. For example, some of Philips' values are
breakthrough technology, accessibility, and deep customer understanding. Some of Starbucks'
values are quality and variety of product, sustainability and customer service. For BMW, they are
performance, safety and sustainability.

The equivalent of the peel or the skin we called the extended identity. It defines the brand
personality or the character. It is how the brand connects with the stakeholders. Or how it wants
to be perceived. For Philips some of the attributes that describe the extended identity are
imaginative, helpful and curious. For Starbucks they are friendly, cozy and responsible.

For BMW, some are inspiring and challenging. So how do these actually translate into
perceptions that we might experience? Look at this advertising and notice how the brand
personality challenging is reflected.
Or to provide the perception of inspiration, BMW has a co-creation site, which is a virtual meeting
place for individuals interested in cars. And all of the related topics who want to share their ideas
and opinions on tomorrow's automotive world with BMW. As you might have guessed, it is very
difficult to define our brand identity and launch it tomorrow. You develop your brand identity and
build it over time. It is the foundation of the relationship between your brand and your customer.

What is a brand essence and why is it so important?

At the center of our peach, we had the seed which is the core because is what allows us, the fruit
to last over time. The same happens with a brand essence. It is the heart and soul of the brand.
Which should last a long time.
In three to five words, it phrases the highest order customer benefit that the brand delivers. It
summarizes our key promise. Let's look at some examples. Please note that these have either
been mentioned in the press by the brands or inferred by their published materials. Google.
Google's original essence was to organise the world's information and make it more accessible
and useful. Notice how this provides a clear strategy for anyone within the company. It should
focus on their work. Their map application, their mail application, their news application, all fall
under this essence. You might be asking yourself, what does this self-driving car have to do with
essence? Well, I expect that Google will either launch a new brand for their product or revise
their brand essence to accompany other strategic areas which they might be working on. Apple,
Apple's brand essence is empowering people through technology. Notice how this is much
broader than Googles, and it composes any product from their pipeline that has been developed
today. At the same time, it provides clarity for employees. If a product does not somehow
empower people through the use of technology, it is not for them to develop. Disney is in
essence magic family fun. And every product or service under the Disney brand is addressed at
providing magic family fun for their target audience. Again, notice that when Disney purchased
Marvel Studios, which does not fit under its essence, the brands were kept separate. Disney also
owns other brands like Touchstone Pictures, which doesn't fulfil this brand essence and thus has
a different brand altogether. BMW, BMW brand essence is to provide sheer driving pleasure.
Notice how this is different from Mini, or Rolls Royce which are also owned by the same group.
BMW is not about performance or engineering. It is about providing driving pleasure, which is an
emotional benefit. So how can we define your brand's essence? Let me share the possibilities
that we have by looking at the hierarchy of benefits in the brand essence. On the bottom of the
pyramid, we have functional benefits. In answer to the customer question, what does this brand
provide? Or looking at it from your angle you are telling customers that owning this brand delivers
a specific functionality and utility to them. On the middle pyramid, we have emotional benefits in
answer to the customer's question. How does this brand make me feel? Looking at it from your
angle, you're telling customers that owning this brand influences how they feel about themselves
and their choice of brand.

This feeling occurs every time the product is used. On the top of the pyramid, we find a
self-defining benefit. It answers the customers question, what does this brand say about me
when I own it? We're looking at it from your angle. You are telling customers that by owning this
brand, they define who they are and how they want to be perceived and stand out by others.
Notice how functional benefits are easier to develop. They're less relevant and easier to copy. As
you move up the pyramid, benefits become more relevant for customers and more difficult to
copy. But they are also tougher to develop and keep. Let's look at an example of luxury watches,
comparing Rolex versus Breitling.

Rolex states that owning a Rolex demonstrates that I am successful, confident, and I can expect
to be respected and admired. Heuer Brighton is also a very successful brand that addresses a
different customer. And their anchor benefit from brand instances needs, Brighton has
technologies, experiences and people to build a product that is exceptionally robust, reliable and
precise. Can you identify which type of benefit each brand essence has? If you said the Rolex
uses a self defining benefit and Breitling uses a functional benefit, then you have fully understood
the hierarchy of benefits. If you haven't, I encourage you to go back and revise it. Be aware these
brands might have supportive benefits, not part of their brand essence, they're different. For
example, it could be that owning a Rolex makes me feel proud and important. Well, the Rolex
offers quality, precision and durability. So how do we define which ones to use? Depending on
the market context and the competitor's strategy, either of the three types of customer band can
be used to define the brand essence. More to come on the next lectures. Before we continue, let
me mention some important caveats. Brand assistance around emotional and self defining
benefits require a strong functional foundation, or otherwise they will fail. For example, BMW
needs to deliver on the functional benefits related to drive pleasure.

Another one is marketing investments required to sustain brand identity with emotional or self
expressive essences are typically higher than those to build brand identities based on functional
benefits. Functional benefits can drive a variety of emotional self defining benefits. Making them
the better choice for brands that target multiple customer segments with different emotion or self
defining needs. Example, Nike. Nike targets both athlete and fashion conscious consumers with
very different emotional needs. And therefore, it anchors its essence on functional benefits,
authentic athletic performance. Watch out. A brand essence is not a slogan or a tagline. These
are created from the essence or the positioning to translate the desired message into consumer
language. For example, GE's essence was solutions to help solve some of the world's toughest
problems, and for years the tagline was imagination at work. Following a specific position
concept. Or Apple's empowering people through technology, and for years the tagline was
different. Therefore, a brand essence is a long term promise commitment to all stakeholders. It
acts as a beacon for the organisation providing direction and inspiration in what the brand is all
about. A tagline on the other hand is a short term message. It only lasts from 12 to 18 months. It
evolved with a market and a position to keep relevant, but it acts as a platform to communicate
the brand's benefit to all stakeholders.

What are brand values and why do you need them?

Brand values are the most important competences. They will be consistent across offerings to be
able to deliver our essence. They are the drivers of strategic initiatives. For example, if you're a
Disney, whose brand essence is magic, family, fun, could you have a value that is challenging?
Doesn't make a lot of sense that you have initiatives which are perceived as challenging for
customers if your promise is magic, family, fun, does it? Values seem easy to define, but they're
actually one of the most daunting tasks because you have to be very precise in what you want
your organisation to focus on.

Later on, values will be the drivers or definers of brand-customer experience in the fifth module.
The greatest challenge is selecting those three to five values, and then defining them precisely.
For example, I've seen many companies that have innovation as a value. However, in their
explanation, there is a clear description of what it means. At Apple, it means design and ease of
use. But at Virgin, innovation is defined as new markets, new business models, or new value
added solutions. At 3M, innovation means inventive technology or first mover unique solutions.
And at Nike, innovation is all about enhancing performance through the use of technology.

How does this translate into strategic initiatives that build a brand? Think of airlines. How difficult
it is to innovate in an industry that's fiercely competitive and capital intensive. Well, Virgin Atlantic
is an example of how to differentiate itself in a commoditized industry. Through the innovation,
they were the first one to offer chauffeured service for passengers, checking from the car via
drive thru, limo bikes for those in a hurry, invite therapists for a relaxing service like massages, or
hair, or nails done, their revival lounge for those who arrive and need to go straight to the office,
an in flight bar area, that separated from the cabin, is a great space to socialise with fellow
passengers, a mood lighting system. There's a program to create unique calming environments
for passengers. But they also innovate in things that customers can't experience directly. For
example, as sustainability is another one of their values, they have also differentiated themselves
by setting an ambitious target of reducing the carbon emissions from every mile they fly by 30%
between 2007 and 2020. And to fulfil that promise, in October 2011, they announced the world's
first low-carbon aviation fuel. They're delivering with a new fuels company.

On the ground, 99.5% of the electricity they're currently buying in the UK where their major
ground operations are is generated from a mixture of renewable sources such as wind,
hydroelectric, and biomass power. Let's look at another example that probably all of you can
relate to, Starbucks. Think for instance, what do you think of the core values or competency of
Starbucks, the thing that Starbucks is especially good at? In our opinion, Starbucks is good at
quality and variety of coffee, customer service, sustainability, and providing a lifestyle.

Product strategy: Portfolio management concepts, types and

tools.

Element that make up a product

There are two different ways to look at a product.
Firstly, we can view it as a sum of physical attributes or characteristics (a chemical formula, a
package, a special design). Secondly, we can consider the perceived or psychological
attributes that constitute the symbolic content of the product and which are as important as
the technical components. The best way to add differential value for consumers is to
understand the product from the point of view of the needs it satisfies, envisaging the
benefits its use or consumption will bring the buyer and how he or she perceives them. This
approach helps avoid us falling into the "marketing myopia" about which Theodore Levitt
spoke in his article published in.

Physical attributes
Products can have two types of physical characteristics: internal and external. The internal
characteristics are those which are not immediately visible, and include factors such as the
technique or formula used to make the product or the internal processes by which a service
is provided. It is important to highlight and explain these internal characteristics as they are a
fundamental part of the product's performance, but as we shall see, they are only one part of
the quality perceived by consumers. From the marketing point of view, quality means the
capacity of the product to meet consumers' needs or requirements. Thus, the best product
from the technical point of view is not always the best for a particular consumer group. In
marketing, quality is therefore a subjective concept that is relative and changing. It is
subjective because it depends on the consumer's perception, relative because two
customers can have different perceptions of the same product, and changing because
expectations, and therefore perceptions, vary over time. The external characteristics are
those that can be perceived at first glance by consumers. These characteristics differentiate
a product from its rivals. Some of the external characteristics of a product might be, for
example, its design or packaging. The design is the set of characteristics which influence the
appearance and functions of a product in the eyes of consumers. This is fundamental for
both consumer and industrial goods, although in the case of the former, the ubiquity of
self-service supermarkets makes it even more important. Good product design can facilitate
marketing in many ways, such as, for example, by making the product easier to handle,
extending its useful life, reducing manufacturing costs, making transporting and stacking it
easier for both the distribution channel and the consumer, and it can serve as a promotional
and sales tool.

For Tom Peters, "the design is the main reason for emotional connection (or disconnection) with
a product, service or experience. The design, as I see it, is probably factor number 1 in deciding
whether a product-service-experience stands out or not."

Packaging
Packaging is a key part of product design.
Packaging is defined as the "set of activities aimed at the design and manufacture of the product
container or wrapper."

Packaging has several functions:

● It identifies the brand.
● It transmits descriptive and persuasive information.
● It protects the product and enables it to be transported safely.
● It can be used to store it at home.
 ● It can help the consumer to use the product.

Packaging design relates to both aesthetic components (size, colour, text and typography,
materials, etc.) and the functioning of the product (reusable packaging, ease of opening,
ergonomics, etc.). Particularly in sales modes where visual sales and impulse purchases are
important, the packaging may be the final element in the product's marketing, giving it a key role
in whether the consumer opts for one brand or another.

Therefore, the packaging can be a means of differentiation for the brand and even influencing
customers' perceptions (whether intermediate or final customers) about the performance of the
product. Moreover, in recent years environmental standards and product recycling requirements
have caused important changes in the design of new product packaging. These are some of the
reasons why companies invest huge amounts of time and resources in modifying and designing
new packages.

Psychological/ Emotional attributes

We have seen that products are made up of physical attributes which are fundamental for
the product to fulfil its objective. However, these attributes do not bind the consumer,
especially in developed societies where the formula, the packaging and other attributes are
easy to imitate. As well as the product's purely functional attributes, it is essential to consider
it with emotional attributes which bind the consumer.

Figure 2 shows these functional attributes in relation to the benefits of a toothpaste brand .

The brand
One of the main instruments in building a relationship between consumers and products is
the brand. From the point of view of marketing the brand is one of the key elements of the
commercial strategy used for products and services of all types. The brand is what allows a
product to be much more than a simple bundle of functional attributes which do something
for the consumer. The brand, as well as clearly articulating the functional and emotional
benefits of the product, is the mechanism by which closer bonds can be built with customers,
thereby increasing customer loyalty and the profitability of whatever type of product or
service. It is basically the brand which makes Harley-Davidson more than a motorcycle, the
iPod more than an mp3 player, and Coca-cola more than a soft drink. According to David
Aaker, "for a company the brand is the main source of resources and a valuable strategic
asset."7 Aaker also says that "the challenge for any brand is to have a clear and different
image which is important to consumers and really makes it stand out from the rest."

Traditionally a brand, or more specifically a trademark, has been understood as "any sign
capable of graphical representation that may be used in the marketplace to distinguish the
products or services of one company from those of others."8 These signs may, in particular,
be:
● Words or combinations of words, including those used to identify people.
● Images, figures, symbols and drawings.
● Letters, numbers and combinations thereof.
● Three-dimensional shapes, including wrappers, packaging and the form of the
product or its presentation.
● Sounds.
● Any combination of the signs given as examples in the points above.

However, over the last few years the concept of a brand has gone beyond the idea of the
graphical elements that are used to "distinguish a company's products or services in the
marketplace" and it has become an intangible asset with a high strategic value for the
company.

Today, a brand is understood as the promise a product or service makes to meet customers'
functional and emotional needs such that it is highly significant to them, differentiates the
product or service from competitors, and is credible and consistent. Moreover, the brand
may come to define aspirational factors as it helps customers define the lifestyle they aspire.
Just think of the attraction of luxury brands and how they help customers feel elegant and
sophisticated, or Nike's Just do it slogan which tries to inspire sporting confidence and the
feeling that the consumer can become the best possible sportsperson.

The brand has advantages for consumers, for the manufacturer and for intermediaries:

● It allows consumers to distinguish the product from its competitors

● It transmits information about the product
● It gives greater consistency to the product's quality image
● It enables the introduction of new products
● It serves as a vehicle for communications
● It encourages loyalty
● It reduces and simplifies the effort involved in searching for information
● It facilitates the decision-making and buying process
● It reduces the risk associated with the purchase
According to Aaker, some of the main assets on which brand equity is based are: brand
loyalty, brand awareness, perceived quality, brand associations and other proprietary assets
of the brand, such as patents, trademarks, or relationships with the channel.

There are a series of key requirements which, in principle, every brand should meet, such as
the brands being:

● Memorable: Is it easy to recognise and remember?

● Meaningful: Does it represent the category? Does it suggest the advantages of the
product?
● Pleasant: Is it pleasant for consumers?
● Transferable: Can it be used on other products, segments, markets?
● Adaptable: How adaptable is it over time?
● Protectable: Can it be given legal protection?

Increasingly, globalisation and the international presence of major multinationals makes it

harder to find brands that meet all these requirements, thus making the process of the
construction and architecture of brands more complex.

Brand Identity
Developing a brand starts with the strategic process of defining exactly what the company
wants the brand to promise and to represent in consumers' minds. This brand identity is the
"set of assets linked to a brand’s name and symbol that adds to the value provided by a
product or service to a firm and/or a firm’s customers."10 In general these brand attributes
are defined by making a detailed analysis of the answers to the following questions:

1.- What are the most important and most relevant functional and emotional benefits for
customers? (Relevance)
2.- What are the main factors differentiating the brand from its competitors? (Differentiation)
3.- What elements of the offering are highly credible and defendable? (Credibility)
4.- What factors are essential in fulfilling the business strategy? (Strategic alignment)

One of the most important elements of the brand is undoubtedly to ensure its relevance with
a target audience such that the brand is perceived as something that really addresses
customers' needs and provides the most important functional and emotional benefits. For
many brands the product's attributes are given priority in the search for differentiation,
without having a clear idea whether these aspects of differentiation are genuinely important
to the customer. Moreover, many brands focus on functional aspects of the product or
service without highlighting the emotional benefits they can provide to their customers. It
should be borne in mind that it is the emotional bonds between the customer and the brand
that give strength to the relationship.

In the computer industry there are numerous examples of companies that focus their brands
on functional aspects of the product and try to differentiate themselves on the basis of the
outstanding technological features of their products, when from the consumers' point of view
the products offered may look very similar and these features might have only limited
relevance. A case in point is Apple, which almost never talks about the technological
features of its products but focuses instead on the benefits for customers such as innovation,
simplicity and design. For its target audience, these factors are much more important. It
further demonstrates how Apple understands perfectly that customers want technology that
is intuitive and simple. Apple's growth over the last few years in all its business lines
demonstrates the power of creating a truly relevant brand. Ironically, the relevance of the
Apple brand has become its point of differentiation. It is important to understand that Apple
has always tried to meet the needs of customers (relevance) before worrying about
differentiating itself from the competition.

One of the tools brand managers use to develop a brand identity is a hierarchy of benefits.
This model makes it possible to identify the connection between the product attributes and
the functional and emotional benefits they provide, and finally, the aspirational values, which
consciously or unconsciously may be the basis for the emotional bond between the
customer and the brand.

Following Professor David Aaker's brand development model, once all the attributes have
been identified (these may be product attributes, functional and emotional benefits, values of
self expression, graphical elements, taglines, etc.), these are organised into three main
groups in order to define the final identity of the brand.

● Extended identity: this includes elements and associations organised and arranged
into significant groups around the central identity which defines the global identity of
the brand.
● Core identity: comprising the associations which constitute the most important
aspects of the brand and which allow it to be considered unique. They are what
establish the value proposal and credibility of the brand.
● Brand essence (brand promise): a unique creative concept which combines all the
attributes of the brand and captures its essence in a simple, clear and powerful way.
Figure 4 shows the various levels of brand identity, using Nike as an example.

Typology of brand strategy

Brand strategies can be classified according to various different criteria. The classifications
outlined below are those most commonly used by companies. Single brand strategy: this
consists of putting the same brand on all the products a company markets. This is also
known as umbrella branding. The advantages of this strategy are clearly the savings in
brand promotion costs, particularly when introducing new products on the market. The
downside is the impact the bad image of one of the products can have on all the others. This
strategy is normally used when a company competes with similar products on similar
markets, although there are always exceptions. Some of the companies that follow this
branding strategy are Nivea, Yamaha, Kellogg’s, General Electric, etc.

Multi Brand strategy: this consists of using different brands for different products. This
strategy is sometimes driven by the fact that multinationals have acquired local companies
whose brands have significant local market share, and so the brand needs to be retained.
The main advantage is the flexibility this approach allows when serving individual market
segments with different brands, without exposing the name of the company. The downside is
the much higher cost of promoting the brands.
This is the situation of many manufacturers of mass consumption products, such as Procter
& Gamble –with brands such as Gillette, Ariel, Braun, Pringles, Pantene, H&S, Duracell,
etc.–Henkel, Unilever, and many more.

Some authors talk of a strategy of a brand per product line, brands accompanied by
product names, etc. We think it is simpler to bear in mind that a lot of combinations are
possible between the first strategy (branded house) and the second (house of brands).

Given their growing market share, we also think it is worth mentioning own brands or house
brands, which are a phenomenon which is gaining in significance, particularly in retail
markets. Distributors’ own brands include a variety of types of brands which are not linked to
the manufacturer producing the goods but commercialised by a particular distributor, which
gives them its own, or in some cases another, name. It is the distributor who does all the
marketing work.

Distributor own brands cover a wide range of typologies, and like manufacturer's brands,
they may follow different strategies depending on where they lie in the value chain. Thus a
retailer may decide to follow an own-brand strategy in order to ensure a strong presence of
its name in the store (for example, Carrefour in Europe, Wal-Mart in the US); the retailer may
use a different brand for each line of products (as does Mercadona in Spain, with the
Hacendado, Deliplús, Bosque Verde and Company brands for different product lines), or it
may follow a strategy of having individual product brands along with their own brand (Lidl,
Aldi). As in the case of manufacturers, distributors and retailers may opt for a portfolio of
their own brands according to their needs and the markets they operate in at any given time.

Classification of product
As mentioned earlier, the term product refers to a diverse variety of different things. A wide
variety of product classifications has been developed, some depending on how tangible the
product is (products and services), or its durability (instant or durable), others in terms of
consumer behaviour in the market it is aimed at (convenience, shopping or speciality), or the
type of buyer (private consumption or industry). In the classification we are going to look at
below we will distinguish between consumer goods, industrial goods and services.

Consumer good
These are goods bought by individuals or households for their personal use or consumption.

Based on a consumer's buying behaviour, Stanton, Etzel and Walker13 distinguish four
types of consumer products:

1- Convenience goods: these are products the consumer finds convenient to buy without
searching for much information and is able to purchase with a minimum of effort. Consumers
often do not have a clear brand preference, so they buy whatever is most readily accessible.
Light bulbs, Christmas cards and certain foods are examples of products of this kind. The
distribution policy is essential in the case of products of this type.

2- Comparison Shopping goods: these are products for which the consumer compares
criteria such as quality, price, style and features before making the purchase. The process of
searching for and obtaining information is lengthy. Household electrical appliances, fashion
clothing, electronics and cars are some of the products in this category. Distribution and
communication are essential in the case of this type of product.

3- Speciality goods: these are products for which the consumer has a strong brand
preference and so dedicates more time and effort to finding them. Clothes for special
occasions, photographic or sound equipment, health-care products and certain sorts of cars
are in this category. Communication becomes one of the fundamental aspects when
marketing this kind of product.

4- Unsought goods: these are new products that the consumer does not yet know about or
is unfamiliar with and has not yet felt a need for them. The Segway (self-balancing personal
transport device), funeral services or technological innovations are just some examples.
Making the product known, creating familiarity with it by testing and communicating its
attributes and characteristics are very important elements in the case of this type of product.

Intraindustrial good
These are goods traded on B2B markets used by businesses and other organisations for
final use or as part of the production process. Industrial goods can be classified into five
categories: raw materials, materials and component parts, installations, accessory
equipment and supplies.

● Raw materials: these are goods which are partially transformed into another tangible
product or which help in the process. They can be products found in their natural
state, such as minerals, timber, products of the sea, etc. or agricultural produce such
as fruit, cotton, or animal products such as cattle, eggs, etc.
● Materials and component parts: these are parts and materials that are turned into
the finished product by means of a process of transformation. Ingots of iron and flour
are materials, whereas microchips and zips are manufactured components that are
added to other components without further changes.
● Installations: these are manufactured products that comprise the organisation's
main high-cost, long-lasting equipment. Elevators, factories or offices, generators at
the foot of a dam, etc. are examples of installations.
● Accessory equipment: this refers to high value tangible goods used in a company's
operations. Machines, office equipment, electronic terminals, etc. are a few examples
of this category.
● Supplies and services: these are industrial goods that are not included in the
finished product. Supplies are usually goods that are commonly used in production,
such as lubricants, coal or paper, or in maintenance, such as paint or nails. Services
may include repair and maintenance (for example, cleaning or repairing machinery),
or consultancy (whether legal, administrative, training, etc.)

Each of these industrial products has its own specific characteristics in terms of the buying
process, type of negotiation, channel management, etc.
Services
Kotler defines service as "any activity or benefit that one party can offer to another that is
essentially intangible and does not result in the ownership of anything. Its production may or
may not be tied to a physical product."

Services are intangible activities which may be individually identified and which are not
necessarily linked to the sale of other products or services. They can be used by individuals,
families, firms or other organisations. Services basically have three components: the
physical medium (a hotel room, an aircraft or a cinema theatre), the contact staff (the
receptionist, pilot or usher), and the customer (the guests of a hotel, the passengers on a
flight or the audience in a cinema). Although services may be based mainly on physical
media (cash dispensers, car washes, the Internet, etc.) or persons (training, cleaning, legal
services, etc.), the customer is an essential part of the service as he or she has a
fundamental role in the final perception of the service. In certain cases the physical presence
of the customer is necessary (hairdressers, hotels, classroom training, etc.) and in others it
is not (repairs, goods transport, etc.).

In general, services typically have the following characteristics:

● Intangibility. They are intangible goods, therefore cannot be measured in advance.
They are sold based on the utility derived from the service itself. What is sold is trust
in the brand or the seller. Thus the image the customer has through the brand and
other indicators is very important.
● Perishability. Services are highly perishable and cannot be stored. It is therefore
necessary to watch fluctuations in demand closely.
● Inseparability. Services are normally inseparable from the person providing them
and the moment in time they are provided.
● Variability. Services are usually difficult to standardise. Given that they are often
provided by people, it is difficult to ensure that the level of quality remains the same.

All these characteristics have given rise to the development of specific studies on the
marketing of different types of services in recent years (financial services, public services,
etc.)

Some of the strategies proposed for services marketing include:

● Making the service tangible: here the aim is to develop a tangible medium for the
service that somehow makes it visible. This may be a presentation folder or dossier,
a customer card for a hotel, etc. Thus while it is necessary to add abstract ideas and
services to the sale of physical products, in the sale of services it is necessary to add
physical evidence and images.
● Identifying the service: by means of a name or brand that differentiates it. This
includes not just the brand or logo, but also uniforms, interior design and everything
relating to corporate identity.
● Bolstering the selection and training of salespeople: as they will be responsible
for transmitting the image of the company and therefore creating trust in it.
● Counteract the perishability of services: by encouraging demand at times when it
is usually slack, setting price policies, or developing complementary services. New
 technologies (advanced booking systems, last minute offers, advance sale of seats,
etc.) have greatly mitigated many of these common problems. The challenge faced
by most companies is that of improving their quality of service, regardless of the type
of product they offer. Therefore, systems of communication, staff training and
measuring customer satisfaction are absolutely essential in achieving effective
differentiation and building loyalty among customers.

Managing a portfolio of a product

Most companies have a variable number of products which cover different needs in the
markets in which they compete. The set of products offered by a company is known as its
portfolio, range, assortment or mix of products.

A product range can be measured along three dimensions: breadth or number of product
lines in the range, depth or number of products per line, and length, or sum of all the
products manufactured or sold by the company.

For example, retail banking is a line of products for a bank and investment banking is
another. The various retail banking products (accounts, mortgages, cards, etc.) determine
the depth of the line. In turn, each product/brand can give rise, as we will see in the next
example, to a new range.

The example in Figure 6 shows what the global portfolio of a consumer goods manufacturer
like P&G might look like (not all the brands are included). In turn, each of the brands is
further subdivided into new ranges with different lines. For example, as Figure 7 shows, the
Pantene brand has different finishes, colors, and beauty variants, etc.

Developing your brand strategy

Connecting all the dots: Translating your brand into a
positioning statement.
If the customer and competitor dimensions are different, then try to find explanations for these
differences. Ask yourself, are there other dimensions not represented that could be the basis of
our new identity? Afterwards, you should begin with your essence. What is the core promise that
will resonate more with your customers over time? Define more than one line of thought and
discuss it internally. Let it rest. Come back to it. Use your best judgement to evaluate whether
you think this is relevant for your customers and differentiated from competitors. Above
everything, keep it short, because that will mean that it'll be understandable to everyone, and
focused. Once you have defined a short list of essences, now move to values. What are those
most important competencies you will need to deliver on that particular brand essence? Your list
should have no more than five. Synthesis will define the focus for every organisational effort. It
will have an impact on how everyone works and how they evaluate it.

Essence and values are strategic. They should last a long time, so spend time and think through
the options to evaluate. Lastly, let's define what are the attributes that define your extended
identity. They have to be consistent with your essence and your values, because otherwise you
will confuse customers. Your extended identity, however, can change over time through your
positioning. I will pause here to introduce you to the concept of positioning. The positioning
guides how the brand is communicated to stakeholders by defining your target audience, the
frame of reference where the brand wants to be perceived as part of. The point of difference with
competitors, which should be your key benefit, and the reasons to believe that you can actually
deliver on that key benefit.

Positioning identifies the key messages and helps to ensure consistency. It is where your
customers will proceed throughout the marketing activities of your brand. It is the vehicle that
helps communicate the brand's point of differing versus competition. As we discussed in lectures
ago, when you launch or relaunch your brand, the brand ID is aspirational because it takes time
to fully deliver on it. The framework to move from your current image to your brand ideal is
through positioning.

They are the bridge between the existing reality and that desired state. Let's look at an example.
At some point, we can infer that FedEx brand's identity was the following. The brand essence
was business solutions for your peace of mind. Their positioning would evolve according to
what they could offer in each stage.

Evaluating your brand strategy.

Before you begin investing your money in that new brand, you just want to be sure
that it will be successful with your target customers in the marketplace. Think of your
favorite brand, mine is Apple. And the reason that I value what they do is because
they solve my needs, which is to provide a holistic platform to manage my personal
and my professional life across all of the devices. I travel for work every week, and I
want to have every piece of information and entertainment in one place. And to be
able to look at it from all of my devices any time, any place, Apple does this for me.
So then you bring this to the first of the criteria for evaluating your brand strategy,
being relevant to your target customers. I would even suggest that the brand should
be relevant to all of your stakeholders, why? Because nowadays, companies are
competing for talent. So you want to ensure that you capture the right people that are
excited to work for your company because you have to be relevant for them. If you
have shareholders, for sure you want to be relevant to them. If you want the press
talking about your brand in a positive way, you also have to be relevant to them. Just
keep your brand valued by your stakeholders, beginning with your target customers.
Also for me, Apple is different to competitors in many respects. First is that the
employees are passionate about what they do whether you call on the phone, or
receive an email, or go to the stores, there's always consistency to that passion.
Another thing I value is their honesty. I don't have the time to research when making
a decision to purchase a device, but I know, because I've experienced it. When I go
to the Apple store, the sales person will ask me the right questions to understand my
needs and point to the right product. In my experience, only Apple does this. Does
the second evaluation criteria be different from your competitors, whether direct
competitors or substitute products. Another thing I value is that I believe Apple can
deliver what they claim. If they announce something, I have the perception that they
will fulfil that promise, because they have done it in the past. It might come sooner or
later in the promised date, but it always comes. That is the third criteria for evaluating
your brand, ensuring the target customers have the perception that you can fulfil the
promise that you're making. If Apple said tomorrow that they are working on the next
rocket to Mars, despite the trust that I have in them, I would have my doubts on them
being able to fulfil that promise. Simply because they haven't built enough brand
equity, a concept that we will discuss in our next module, to be credible for me in that
expertise. The last evaluation criteria is an internal one. Is your brand aligned with
your organisation's business strategy? You don't want to be promising something
and having your organisation working projects that will deliver a different promise.
We call it strategic fit. Let's look at another example, FedEx. Some years back, when
they relaunched their brand essence, guaranteed overnight delivery. They were very
relevant to the target and possibly required the package to be in its destination on
the next day. At the time, they were also differentiated, they were the first ones to
claim and own it. A brand essence should be as unique as possible, realising the
true differentiation may only often occur through execution. They also ensure
through a strong marketing campaign that they had the credibilities to do it. In fact, it
was something that they could achieve. Lastly, although we don't know FedEx
business strategy, we can infer from information their employees publish on the
Internet some years back. That the brand essence guided every important decision
for them. How do we know? There used to be a site called fedexstories.com in which
employees shared great war stories of them all over the world doing amazing things
for delivery of the brand promise. In one case, they were delivering a kidney
transplant and the aeroplane had to land at a different airport because of the storm.
The FedEx employee decided to rent a helicopter to make sure that the kidney
arrived in time for the receiving patient. Since there is only so much time from when
the kidneys are removed from the donor and is transplanted into the receiving
patient. Going through the storm, the helicopter made it in time, and the patient was
able to receive the kidney. What do you think happened to the employee who made
the decision to rent the helicopter? If you're thinking he got fired, you're wrong. He
got a big praise from the company because at the moment of the difficult decision,
the brand got him to deliver on the promise. When we talk about new brands with
new companies, you should think about how to ensure you meet these criteria. Since
we have discussed relevance and differentiation in previous lectures, strategic fit is
something that you can figure out on your own, I encourage you to think through how
to become credible. Do you need an endorsement from a credible source like a professional
association, a reputable spokesperson, a certification, etc.? Alternatively, you could have your
own customers develop the credibility for your brand by sharing their great stories on social
media.

Brand Architecture
Let's imagine that your telecommunications provider, for example, Vodafone, or AT&T, decides to
buy Facebook. How should either company be called now? If you are the buyer I need to decide
if I want to let it be known commercially that Facebook is part of my portfolio. You might be
thinking of names such as Vodafone Facebook or Vodafone Social Media by Facebook, etc, etc.
However, if you are the Facebook CEO, you are facing the same dilemma. Do you want to let it
be known that your company and Vodafone are now family?
How do you choose your potential options? Think about it. These are real life situations. For
example, when Facebook bought WhatsApp they deliberately decided to keep their brands
separate. Let's imagine another situation closer to you. Imagine that you decide to launch a new
anti-virus software in your company. How would you name it? Is it your brand of anti-virus? Is it
an anti-virus by your brand? Or is it a new brand of anti-virus? How do you decide?

That is why brand architecture was born. It is the underlying structure and relationship of brand
assets in a given portfolio. The objective of brand architecture is to achieve clarity, synergy, and
leverage by optimising the hierarchy linkages and identity systems or brands in a portfolio. Watch
out. Brand architecture is neither how the organisation is structured, nor a corporate naming
system, nor the web pane navigation architecture. Brand architecture describes how the
consumer must perceive the links and relationships between the portfolio. It must maximise
brand input within your target group. The term brand architecture was used for the first time in
1994. Research Hammer & Prahalad presented the concept of how to organise brands
strategically and the use of a master brand. You might be asking yourself, but what happened
before?

Organisations were less complex, selling less brands or brand extensions. There was less
activity in mergers and acquisitions. The focus was in finding a logical hierarchy that was
understood internally. After 25 years of experience, trust me. The lack of a system for dealing
with brand architecture can generate many problems for your organisation, which can have an
impact on your sales. We only discuss the issue of not having a clear plan for integrating recently
acquired brands into the existing architecture, but there are many more issues. This module is
structured so you can first learn of the different brand architecture concepts and models with
examples, followed by a guide on how to develop your own brand architecture system. We wrap
the module with two very practical lectures, the top indicators of brand architecture issues and
opportunities, and things to consider when naming your brand.

Brand equity and its relevance in your business.

What is brand equity? Dave Acker, that brand guru, defined it as a set of assets and liabilities
linked to a brand's name and symbol. That adds or subtracts from the value provided by a
product or service to a firm and or the customers. In other words, it is an intangible valuation of
the brand. I like to think of it from the consumer's perspective, that it is a value that a company or
a product generates with its recognized name, versus if it had a generic name. For example
brand equity can be explained as the additional money consumers are willing to pay for a coke
versus a no brand cola from the supermarket. But in terms of companies, it is the additional
money that an organisation is willing to pay for the Coca Cola company versus another one. Let's
call it the drinks company, for owning that goodwill created with all of its stakeholders. Acker in
his book, Managing Brand Equity, describes that brand equity generates value to the customers
by helping them process information. Generating confidence in the purchase decision, and in the
used satisfaction. For the company, brand equity generates value by enhancing the efficiency of
their marketing programs, brand loyalty, prices and margins, brand extensions, trade leverage,
and ultimately, by providing a competitive advantage. So how do organisations generate brand
equity? With a clear, relevant, and differentiated identity. That is aligned with their strategic intent.
That they can actually implement in a compelling customer experience. By the way, there also
exists negative brand equity. For example, BP with the Mexican Gulf oil spill, or when a product
gets recalled, or the Volkswagen emission scandal. Most likely, if you try to sell your Volkswagen
after that scandal, you would've gotten a lower sales price than before the scandal, because of
the negative brand equity built around it. So why do we need to talk about this? Because our goal
is to generate positive, measurable brand equity, that we can tag along to build our offering.

For example, a critical situation for brand equity, is when the organization wants to expand into
new markets and businesses. If it has a positive brand equity in that specific field, it is more likely
that consumers will want to try the products, because of the association with a known brand.
Another important topic with brand equity, is that for some organizations, the interrelationship
between brands in a portfolio is so dynamic that it's advisable to track the overall brand equity
flow. This includes understanding how much of the corporate, or master brand, is reflected in
your product's brand. Whether or not your stakeholders know that brands are in the corporate
portfolio, and determine the equity flow, the direction, the volume between brands. Equity flow
means if the brand shares and or transfer equities between them. For example, between GE and
each of its business units just like GE turbines. Or volume and direction. How much equity is
being shared or transferred? And which brand received the balance of the share of transferred
equity? For example, between the Coca-Cola Company and each of its commercial brands, such
as Coke, Minute Maid or Fresca, etcetera. The polarity. This one brand sends or upshore more
than negative or positive equity. For example, between the Heavenly Bed and the Westin Hotels.
In our next lesson, we will discuss more in detail, the different modules of brand architecture that
you can follow for your organization. To decide, you will use the brand equity concept. It will allow
you to understand the implications of what to do every time you launch a new product or brand.

One way to strengthen your customers’ perception of your brand is to apply the Customer Based
Brand Equity Model created by Kevin Lane Keller, a marketing professor and author of the
textbook, Strategic Brand Management. These steps build from a base to form a brand equity
pyramid.

Step 1 – Identity: Build Awareness.

Begin at the base with brand identity. Build basic awareness of your brand. Make sure customers
recognize your brand and see it in the way you intend.

Step 2 – Meaning: Communicate What Your Brand Means and What It Stands for.
Know what your brand means (“performance”) and what it stands for (“imagery”). Performance
describes how well your product meets customer needs. Imagery refers to the social and
psychological aspects of this. For example, a company that is genuinely committed to being
environmentally responsible will build loyalty from customers and attract employees who identify
with and support those values. You can develop greater brand meaning through targeted
marketing, word of mouth and positive direct customer experience.

Step 3 – Response: Reshape How Customers Think and Feel about Your Brand.
Customers respond to your brand through judgments and feelings. Judgments relate to things
like quality, credibility, how relevant your product is to customer needs, and whether your brand is
superior to those of your competitors. Positive feelings could include warmth, fun, excitement,
security, social approval and self-respect.

Step 4 – Relationships: Build a Deeper Bond With Customers.

The most powerful – and difficult to attain – level in the brand equity pyramid is resonance. This
refers to building deeper customer relationships. Achieving this means that your customers have
formed a deep psychological bond with your brand. They make repeat purchases and they feel
an attachment to your brand or product. They might feel a sense of community with other
consumers and company representatives. And they can be actively engaged as brand
ambassadors by taking part in online chats, attending events or following your brand on social
media, such as Twitter or Facebook. That brand equity connection can be tremendously
valuable.

Which are the different models of brand architecture?

On the lower part of the slide you will see what's called an ingredient brand which is nothing
more than a name which adds additional credibility to the commercial brand or product. Can you
think of one? If you answer any of these you are right.

If you're a Windows user your PC has one ingredient brand sticker looking at you everyday. Yes
Intel inside. Now let's move up and center to talk about Sub Brands. The variant name of a
commercial brand. In theory, launching a successful brand extension should be easy. All you
have to do is take a familiar name and slap it on a new product in another category. Well, it
doesn't work that way. The brand should be a logical fit with a parent brand. The parent should
give the extension and edge in the new category and the extension should have the potential to
generate significant sales. For example, think of Thai To Go, Diet Coke, Virgin Airways, etc. Now,
let's talk about commercial brands, the name under which a product with customer-facing
visibility is sold. Any product or service that doesn't have a last name and doesn't use the
parent's company brand is a commercial brand. For example in the hotel industry Sheraton, in
consumer goods dove, the iPhone etc. Lastly we have the chord per brand, the under which the
organization operates which can be used for commercializing it's products. The corporate brand,
sometimes also referred to as the master brand, defines the organization and is used as an
umbrella brand under which customers find products and services. It uses a corporate attribute of
the organization to transfer brand equity to the products and services it commercializes.
Examples are GE, Coca-Cola, Disney, Virgin, etc.

So what is the role of the corporate brand? On the one side it might be of leadership and
visibility. This means that the organization is visibly present supporting products and services. It
uses the brand to target all stakeholders groups, from shareholders to consumers. When used in
this role the corporate brands transfer the positive and the negative associations to each of the
products and services. Almost all GE business units are called GE something, but there exists
flexibility for certain exceptions. What is another potential word for the corporate brand?
One of endorsement and shadow. Yes, in this role the corporate brand acts as differentiator, and
provides a warranty that individual brands will actually fulfill their own promise. It is targeted at
specific stakeholders, for example it could be shareholders, it could be media or sometimes,
even consumers. In this role, the individual commercial brands are responsible for generating the
purchase decision and defining the customer experience. Each one of them focusing on
maximizing their impact on the market place. For example, Unilever uses the individual brands to
target specific segments with their own needs and it allows them to be differentiated in a relevant
way versus the offering of competitors. Lipton and Dove have nothing to do with each other. And
they both belong to Unilever. Why use a corporate brand? Strong corporate brands can help
organizations grow and improve their performance, among other benefits.

We can also find that corporate brands help organizations boost their growth. When entering a
new market it allows access to channels or products and services. It also allows businesses to
really find their markets. A great example is Virgin, whose portfolio expands from airlines to
banking to gyms to radio stations, etc. It also helps improve their reputation. It strengthens
the preference for products and services and the perception of the organization. Think about it,
would you buy the iPad if an unknown company like Foxconn made it? Probably not. But they're
the actual manufacturer of the iPad. It also improves the shield or spillover from negative events
which could impact the brand. For example, in the Volkswagen scandal with diesel emission
tampering, if this were to have been done by a lesser known brand, Probably the company would
have gone broke.

Despite damage to the reputation, the fact that Volkswagen is behind this provides a warranty
that the brand will make it right by customers. Another benefit, it has helped with internal
alignment, it provides clarity in the reason for being of the organization. And it's a great platform
to develop a unique corporate culture. The reason to have provided you with all of these is to
explain the brand architecture models. The spectrum of potential brand relationships, moved
from a branded house which is as corporate master brand to span a set of offerings operating
with only descriptive sell brands. Examples of this are Virgin, Cisco, Goldman Sachs, BMW,
AT&T, etc. On the other side of the spectrum is a house of grand strategy which involves an
independent set of stand-alone brands, each focusing on maximizing its impact on the market.
With a differentiated target and unique brands. Examples are Unilever, Proctor and Gamble,
Volkswagen, Inditex, the owner of Zara, Yum brands, the owner of Taco Bell, KFC, and Pizza
Hut, etc, and there's also a hybrid model. This is a mix of both systems, the commercial brands
can be linked to a corporate brand by a visual endorser.

Companies according to their business strategy use it flexibly. An example of these are Marriott
Hotels, which endorses some of its brands like Courtyard or Residence Inn, but they don't
endorse others such as Renaissance or Ritz-Carlton. Let's look at the chart from the beginning of
our lesson today and see if you can identify which type of brand is each of the brands in it.

What a branded house is and when to use it.

By definition, a Branded House means that all of your products are commercialized under one
single powerful brand that spans a broader breadth of offerings that you have. It is a key point of
reference. Its role is to drive the customer relationships. The objective of using this strategy is
really to provide clarity to the customer, because it is an easily understood offering set with the
script that articulates what it sells. It also provides synergy between products, because you share
and spread the positive associations. It also allows to leverage the brand strength of the master
brand across more context. Let's look at an example. I know it is from some years back, but it
illustrates very well the points involved so you can grasp them. In the early days of the century,
Dell, the PC manufacturer, had various brands for their offering, an online shopping site called
Gigabuys. A search engine called Ask Dudley. Support.ap.dell for support, a single source for
integrated and custom factory solutions called DellPlus etc, etc.

Dell decided to shift its focus from its service channel of brands to a single master brand, by
positioning master brand as a unified platform of product and services.

Dell strengthened the equity of the master brand and clarified its offering for customers.
Simplifying that the architecture enabled Dell to drive equity to its master brand more efficiently.
Gigabuys became Dell Accessories. And Ask Dudley became Dell Online Instant Answers. And
support.ap.dell became Dell Support. And DellPlus became Dell Customer Factory Integration,
etc, etc. Dell's change in brand architecture, where all of their products and services became
aligned under a corporate brand, caused that the master brand Dell, is the one playing the driver
role for customers purchase decisions. So let's do an analysis to see if Dell's architecture actually
maximized customer clarity and optimized the spending efficiency. On the advantages side,
reducing the number of sub-brands and using descriptives definitely provided clarity for
customers.
The marketing investment and personal resources focused on building a single brand. It enables
scale investment and child resource allocation. The fact that one brand provided Exoft solution in
this field built credibility, and thus equity into one master brand. Lastly, Dell was able to leverage
the strength of the Dell original offering, building customized PCs, into their service businesses.
On the disadvantages front, for Dell, there could have been negative synergies. Like bad
experiences with one business or offering could negatively affect a customer's perception of
other businesses under the same master brand. Also, something which doesn't apply to all
brands, but targeting unique customer segments can be challenging if a brand's extendibility is
limited. So how do you decide where to use a Branded House Model when growing your
offering? You should at least think of the following. Are the target customers of your product the
same, or similar enough, that you can target them with one encompassing brand? For example,
from a pricing perspective, are some of them cost oriented and others willing to pay for a
premium? If this is the case, you might want to use a different brand architecture model.
Remember, in a Branded House, you should maintain a consistent brand meaning and
messaging across your categories. Because at the end, all your brand-building efforts should
focus on growing and enhancing the strength of that one master brand.
By definition, in a house of brands, all of your products are commercialized under different
brands. They are a set of independent, stand-alone brands, with little connection to the parent.
The objective of using this strategy is to be able to target unique and separate customer needs.
For example, to be able to enter new markets with other brands that lack the credibility to do it. If
Louboutin wanted to launch a construction business, it should probably do it under a different
brand. Also, it is a strategy to distance the brand products or orphans from the master brand's
association, to reduce the risks of the master branding. In addition it is to fill the shelf for
customer choices. For example, P&G's offering in the hair care categories spans across many
segments. Those that suffer from dandruff need a Head and Shoulders product. Those looking
for strong and beautiful hair via Pantene. Those of Generation Y interested in natural and herbal
ingredients via Herbal Essence, etc, etc. This P&G example is a great one because they have
kept their brand architecture strategy since its origins. Whereas brands, most survive on their
own or they're not worthwhile having. This is a direct relationship with their business strategy.
Since P&G gets rid of brands that are not in growth markets, or that don't have at least one billion
dollar revenues. This focuses their efforts and capitalizes on those brands that have taken so
much time to build. Look at the advantages of this strategy.

It allows your company to position brands more easily on functional benefits and to dominate in
niche segments because they can be very specific in the promise that they make.

It also avoids a brand association that would be incompatible with an offer. For example, would
you buy a Pantene that helped remove dandruff, probably not. It also facilitates building
breakthrough developments or advantages, because you can focus your resources on marketing
that unique benefit which you offer.

It allows targeting multiple and conflicting product lines in our segments. Think of Audi versus
Skoda, both built by the same Volkswagen group. It also enables market entry when the master
brand is not credible or limited because of competitive issues. On the other hand, the
disadvantages of having a house of brands are that we sacrifice the economies of scale that
come with leveraging a brand across multiple businesses. Each brand requires a brand building
investment and the segment-specific brands are unable to support investment in themselves, risk
stagnation and decline. So how do you decide whether to use a branded house model when
growing your offering?

What a hybrid model is and when to use it.

By definition, in the hybrid model, company's use their master brand as a driver or endorser role
in some of its offerings. But they also have stand-alone commercial brands. Companies use it
flexibly according to their business strategy.
Let's look at the example of Sony. In the 1990s, Sony was the brand to have in consumer
electronics. TVs, the famous Walkmans, the handycams, etc. All the products had their own sub
brands.

The Sony batch was always very prominent on the actual product and its marketing efforts. In
essence, Sony had created a strong shadow endorsement. This strategy allowed sub-brands to
infuse Sony master brand with associations such as innovative, creative, entertaining, high
quality. This strategy also allowed them to expand into new business, by leveraging the corporate
brand efficiently. Think of Sony Pictures, Sony Ericsson, Sony Music, etc. However, Sony's
proliferation of sub-brands like Vaio, Clie, Brava, Curio, among others made their architecture
unmanageable and inefficient. Confusing consumers in understanding what was their actual
promise. This is a typical case where Sony's business strategy and product breath may have
outgrown its brand architecture. What is happening is that some of the sub-brands like
PlayStation are now actually revitalizing the Sony brand by transferring some of their equity. If we
look at the advantages of the strategy, its sub-brand has allowed them to enter new markets. And
some like PlayStation have even contributed to energize and expand the master brand Sony. As
a disadvantage each one of the sub brands has required a large investment across more than
one category.

Also, the hybrid model has caused significant damage to Sony equity when the news of
customer's accounts being hacked made the headlines. The Sony case highlights the fact that
brand architecture models are not static. They should be re-evaluated in order to maintain
relevance with the customers and alignment with the business strategy. A great example is
Marriott hotels. Under their old brand architecture, the master brand kept more distance among
the brands in the portfolio, with only a light endorsement for some brands. In their current brand
architecture, they have a more explicit linkage of its Marriott family of brands. So specific
products for each segment.
If you said a house of brands, then you're right.

How to develop a brand architecture

I have seen many companies develop a brand architecture logic sitting down in a meeting
between marketing sales and RND. This is a very dangerous outcome, because they all think
that they're either a target customer or they understand the target customers. Most probably they
have never talked to any target customer. I will share with you a four step process that is simple
and effective to develop a brand architecture for your organization. Given that this is a process
which takes time, I have divided it into two lessons. In the first one, we will cover the first two
steps, assessing your current state and developing brand architecture alternatives. In the second
one, I cover the last two steps: deciding on the best alternative and developing a migration plan.
So let's begin with step one which is assessing your current state. The objective of this phase is
to clearly illustrate and articulate the strengths and challenges of your current architecture. If
you're a new company, look at your business strategy and identify how you expect to grow.
Examples of the key questions that you should be asking yourself are, how are brand decisions
about new products or acquisitions made? Are there any organizing or guiding principles? What
future plans or strategic business directions will impact the architecture? For example, will we
focus more on solution selling versus product selling? How do customers view the architecture or
group and link brands together versus how they view it internally? Understand how competitors
are doing and water the best practices from the customer's point of view. Customer research
should focus on understanding how customers view and define the category. Understanding how
customers group and link brands together in a portfolio. Sample questions might be, please
indicate which of the following brands are ones that you know that this company offers. How
strongly if at all do you feel each of the following brands is connected to this company? If this
company were to explicitly promote the idea that it offers each of the following brands, how if at
all would impact your desire to purchase each of these specific brands? Etc., etc. At the end of
the state, you should literally be able to generate a map of the current state of the brand
architecture from both an internal and an external perspective. It will highlight both challenges to
address and opportunities to leverage. Let's talk about step two which is developing architectural
alternatives. The objective of this phase is to look at various solutions, but most importantly to
define an objective way to evaluate that optimal alternative. The first aspect to consider is
determining what are the most logical organizing principles for architecture. To do this, you need
to understand the critical drivers of choice for customers. This will usually be evident based on
the assessment conducted in step one. For example, Excedrin brand has been a leader in
headache pain relief for decades. They understand how customers choose headache pain
medicine and organize the products by the type of headache. Excedrin migraine, Excedrin
tension headache for headaches with pain in the neck and shoulders, Excedrin PM headache for
nighttime headaches, or Excedrin extra strength a combination pain reliever. Another crucial
component is to determine the appropriate levels or hierarchy of branding and naming elements
to provide clarity and logical structure for customers. For example, if you're the brand manager at
McDonald's you have to consider that you might have premium McWrap, but it comes in three
variations, chicken and bacon, chicken and ranch, and sweet chili chicken. However, each of
these comes in two options: buttermilk, crispy or grilled. Imagine if brand architecture didn't exist.
How complicated it would be just to order a hamburger. Another aspect is determining which
screening criteria you will use to evaluate the potential options in order to be objective about the
final outcome. I suggest using a combination of brand, business, and customer screening criteria.
A brand criteria might be protecting your current brand equity. A business criteria might be
operational visibility to execute. A customer criteria might be, it offers clear benefits. I encourage
you to generate two to three viable alternatives and analyze their pros and cons. Also work with
your graphic designer to illustrate how these options might look. Make sure that you look at
examples of how the architecture would be executed on a website, etc. Now that you have
developed brand architecture alternatives, it's time to evaluate.

Let's begin with the options and understand how to generate a recommendation. First, you profile
those alternatives against the screening criteria and evaluate. Remember the screening criteria
should include brand, business, and customer screening issues. Such as, if it is lined with your
vision does it provide a platform for growth and new initiatives. There's a minimized confusion
and maximized clarity. Is it operationally feasible to implement, etcetera, etcetera. Be rational
about your decision. As when it comes to this topic, many marketers tend to look at, look and feel
versus a solid rationale for selecting the ideal option. Beware, everybody in your office will want
to have an opinion. That should not be the driver of your decision.
Once you have decided on a brand architecture model, you should develop a toolkit and
migration plan. Which is the fourth and last step. The objective of this step is to make the brand
architecture actionable, and to begin implementing. So, outlining a migration plan for achieving
architecture, the goal is to ensure that it is actionable and that it provides enough direction so
that your company knows what to do in the next 30, 60, and 90 days. Other useful tools are
brand guidelines manual, to clarify key nomenclature and levels of granting in the recommended
architecture. Clarify this scope and strategic intent for key brands outline the scope and strategic
intent for them, in other words. What is in scope versus what is out of scope for each brand?

Another one is at the session tree to help guide future decision making and outline exceptions to
the rule. Also which are the key brand matrix to monitor success? Remember Architecture should
enhance clarity, awareness etcetera. Which will then impact customer acquisition. As you can
see, developing brand architecture is not only about using logic to see the product's name. It
requires a much deeper understanding of the business and the brand intent. And the target
customers. I have seen many company's products fail, because they haven't considered it
important enough to spend time on it.

Top 5 indicators of a brand architecture issue or opportunity.

The first indicator of an issue is when brands are cluttered and confusing, both to customers and
employees. The second indicator we have covered in previous lectures, and it is when there is
no internal system for managing how new brands or sub-brands are developed. For example, at
a global telco company, they had an informal rule, whereby the person in R & D who led the
development of the product or service was the one to name it. This was always an engineer who
saw the world in a different way from the target customers. The result was that products like a
financial ticker on your phone screen were called the M channel. As you can imagine, the
success of that service was short-lived. The third indicator of an issue is where there is no clear
plan for integrating recently acquired brands into the existing architecture. On a different level,
the fourth indicator is not getting enough leverage from your key brands, such as your corporate
brand. Lastly, as we analyze in the Sony case, another issue is when your brand architecture is
not aligned with your business strategy, or is not set up to allow the company to explore new
growth opportunities. If you had to summarize this module, what do you think is brand
architecture for? I hope you came up with these points. It clarifies your offering to make it easier
for customers to buy what they need. It facilitates internal operations to manage the strategic
opportunities through a framework and a system.

And it helps companies clarify what they stand for and communicate their brand clearly to
customers and other stakeholders. Now that you're an expert in brand architecture, we need to
shift our focus to growing your business by building your brand portfolio.

Things to consider when naming your brand.

In our years of experience, this is a field where everybody wants to participate. And they feel that
you only require creativity to do it successfully. In reality it is a bit more complicated, because
there are many variables involved such as language barriers, website availability, trademarks,
etcetera, etcetera. The process we have developed begins with a selection of the criteria for key
success attributes for your name. Some of these criteria can be, is it descriptive of what your
business does or does it evoke what your brand promises? Does it provide a reference to the
unique product or service you offer?

Is it easy to pronounce and spell by your target customers? Remember, if you're a startup, you
won't have the luxury of a big budget for creating awareness. So it will mostly be shared online or
via word of mouth.

Is it memorable or sticky and easy to remember?

If your market extends beyond English-speaking countries, make sure to answer if it's respectful
of other cultures. Also consider executional issues, such as a website or the trademark
availability. Once you have that criteria defined, get a group of colleagues in a room to do an
ideation of alternatives. Think of what are the best routes of names that fit with the product or
service concept, and fit the specified criteria. Once you have a long list, use internal product and
customer knowledge to shortlist the best naming alternatives. Don't be tempted to test inside
your company. Go out, do target consumer testing. This can be done very easily online. The
types of questions you want to ask are, what are the name associations and potential
improvement areas? What things stand out from these names? What kind of experience will the
name provide? What is it comparable to? After you've had your final selection, create a name
guide development. So that the process gets documented in your organization for future use.
This is the end of this module. I hope you're now aware of the strategic implications of either not
having a brand architecture or having the wrong one for your business strategy.

Product and brand portfolio

Many companies generate 80 to 90% of their profits with less than 20% of their brands they sell.
You might be asking yourself, why do companies have so many brands? Especially since, in the
eyes of consumers. They might be perceived as more of the same. This is one of the reasons
that we need to have a brand portfolio strategy. Let me share with you another scenario that
could help to explain the relevance of this topic. Imagine that you're working in a high-tech
company. Consumers and competitors are pressuring the development of new products every six
months. You are now even facing competition from your own distribution channels through their
own brands. On top of that, consumers are changing habits and attitudes in your categories
every year. But of course, your shareholders want growth. Inside your company, there are many
initiatives for new products. They always come from decisions made mostly by the CEO in
isolation. Or R and D without any customer insight to support them. From a brand perspective,
how do you deal with the situation, do you continue launching brands, do you use existing
brands, do you reposition your brands? That is why brand portfolio strategy was born. It is the
finest, effective creation, deployment and management of brand assets to support top and
bottom line growth. The objective of the brand portfolio is to maximize its value by strategically
growing, leveraging, and protecting brands to ensure optimal coverage across a market with
minimal overlap. It will allow us to determine the right number of products and brands, and thus,
rationalize our portfolio to achieve economies of scale. Determine the right level of investment for
each brand. Create new platforms for growth into a new segment or value tier. Provide a
comprehensive perspective to foster collaboration between functions or business units. But also,
it will help us achieve revenue synergies following mergers and acquisitions activity. This module
is structured so you can first understand the relationship between brand architecture and
portfolio, which sometimes people confuse. Then we talk about how to develop and manage your
portfolio. We wrap the module with a lesson from my experience on which are the key symptoms
that you might be suffering from a brand portfolio issue.

The relationship between brand portfolio and brand architecture

If you recall from our last module, brand architecture answers the question of how I should best
structure and communicate my portfolio brands. For example, what should these brands be
called? Or how should it have a relationship with our master or corporate brand? When you have
already decided that you are going to launch a new product, you look at your brand architecture
guidelines in order to name it. On the other hand, brand portfolio answers to the question of how
to use my brands to achieve top or bottom line growth.

For example, is this the right brand to generate the expected 15% growth in revenues? Or is this
the right category to generate the expected 5% growth in margins? Let's look at an example in
the auto category. The Daimler Corporation. Under Daimler, you find commercial brands. Such
as Mercedes-Benz, AMG, Smart, Fuso, Car2Go, etc. But let's focus on Mercedes-Benz which
you probably have heard of. The sub product brands are named with a letter. For example the A
class, or the B class, or the E class, or the G class, etc.
Below their sub brands, they have product names, like the Mercedes A250 or the A250 Sport
4Matic etc, etc. Therefore, Mercedes-Benz brand architecture is about the categorization of their
vehicles and the linkages between them and their master brand. However, when Daimler, the
parent company, pursues any opportunity to move into a different customer segment, or even
within the same customer segment but with a different price point, this is a portfolio issue. After
they answer whether there is an opportunity worthwhile to pursue, then and only then will
Daimler apply their brand architecture rules to name it. In a hypothetical case, if Daimler decides
to analyze a premium car address at the city freak segments. Those people who only want a
vehicle to roam around within the city. This is a strategic portfolio question that requires a
thorough analysis. Notice that Daimler already has a vehicle for city freaks, but in the lower end
of this price spectrum, the Smart. In other words, in our little example, the portfolio answers the
question of whether it is worthwhile for Daimler to pursue the development of a product and a
brand for this specific target segment in this price range. Notice that, ultimately, it would also
have a brand architecture implication. What do we call this new offering? Will it be part of the
Smart family, or will it be part of the Mercedes family? Let's discuss another example. GAP
Incorporated, owner of the brands GAP, Old Navy, Banana Republic, Intermix, and Athleta. Let
me give you a brief about the brands. GAP is the brand of dress that people who want to always
wear a casual style. One that is clean, confident, comfortable, and accessible, but also classic
and modern. For a little exercise, let's provide the price of the GAP brand product in the
mid-price range. Old Navy on the other hand promises to make American fashion essentials
accessible for every family. They claim to be the place where you can find all of your wardrobe
must-haves at prices you can't believe.

Let's place the price of Old Navy in the value range. Banana Republic promises that they are the
true outfitters of modern American style. They enable customers to live their true style. Their
price is more on the premium end of the spectrum. Intermix is a multi-brand fashion retailer that
offers a mix of trendy prices for the most coveted designers that celebrate each customer's
personal types of style. They're in the luxury price range. And lastly, there is a Athleta, which
designs versatile and fashionable performance apparel for the gym, the studio, and everything in
between. It is addressed to women whose fitness is their oxygen. Their price is between mid and
premium. As you can see, these brands have different target customers. Different brands. And
different pricing. If tomorrow the GAP Incorporated decides to create a timeless classic brand for
the active seniors who like to go out and explore the world, that would be a strategic opportunity
and require an analysis. That is a portfolio question. From a brand architecture perspective,
given the House of Brands model of the GAP Incorporated, they would need to either create a
brand from scratch or buy an existing one that has equity with that specific target segment. Now
that you know the relationship between portfolio and architecture, we can discuss in detail how to
manage your brand portfolio.

How to develop your brand portfolio

Given that this is a complex topic, I have decided to divide it into lessons. So please watch them
both to get the full picture. Remember from our last lesson, portfolio strategy is about the
effective creation, deployment and management of brand assets in support of top and bottom
line growth. Our objective is to maximize the portfolio value by growing, leveraging and protecting
brands to ensure optimal coverage across a market map with minimal brand overlap. For
example, let's think about the non-alcoholic drinks business. The market map includes different
types of needs that customers have that we identify as segments. One segment might be the
people who drink to satisfy their thirst. Another segment is the one who drinks to have a sweet
flavor sensation. Another one, to keep on going during that high energy activity. Another one, to
rehydrate after an enduring activity. Another one might be for health reasons, etc, etc. On the
other hand, let's believe that we are Coca-Cola and we have developed different products for all
of these segments. Could we use the Coca-Cola brand to cover all of them?

Do you think that we have the credibility to stretch our brand? I hope you came to the conclusion
that the answer is no. Because Coca-Cola's brand essence doesn't answer to the needs of those
consumers. But the key question is, how many brands do we really need? That is what we're
trying to solve. So what are the key business issues that portfolio management addresses? First,
creating new platforms for growth, for example, into a new segment or value tier. In our previous
example, it might be to target the people who want to rehydrate after an enduring activity.
Second might be rationalizing a portfolio with too many brands to achieve economies of scales.
Imagine if instead of having Coke Lite or Diet Coke or Coke Zero, Coca-Cola had created new
brands for them. Then they would start thinking of rationalizing their brands. And third might be to
achieve revenue synergies following merger and acquisitions activity. Imagine if Coca-Cola is
buying PepsiCo. It would have to reanalyze whether they would need all of those brands
because there might be overlaps addressed at the same segments. For example, between
Gatorade and Powerade. So how do you develop a brand portfolio strategy? We will talk about
five steps. First one is connecting the brand to business impacts. Second is, building a fact base.
Third is, developing customer insights. Fourth is, creating portfolio scenarios. And five is to define
a roadmap to achieve growth. Let's begin with step one, connecting the brand to business
impacts. This step is all about clarifying the current state of the business and brand portfolio. You
should answer the following questions. What is the gap between the current business
performance and the five-year growth goals? For example, do you want to grow your business
20% in five years? Do you know where that growth will be coming from? Remember what we
discussed back in lesson 1.3 about growth strategies. Second is, where and how does the
business make money?

What role should the brand portfolio play in closing that gap? For example, analyze whether you
need more or less brands to achieve this growth. What does the current state brand
portfolio look like and how is it managed?

How can the organization balance short-term results with long-term objectives? The most useful
tools in this stage are first, your growth matrix. Define through which strategy of the ones that we
discussed in Lesson 1.3, will you reach your plan growth. That will provide information to
understand where the future business will come from? The second great tool is mapping your
brand portfolio. Map all of those brands in the portfolio to the axis that make most sense. For
example, price, value, and product category. Or channel and product category in the y-axis
against your segment in your x axis. It will help you to visualize the white spaces where there are
opportunities. Step two is all about building the foundations of a fact-based decision. In this
phase, you collect all the relevant market and customer information to develop hypotheses and
make the right decisions. The key questions to address in this step are, what is the market
structure in terms of numbers, sizes and characteristics of customer segments? How do
customers view your brand portfolio? Which segments represent the greatest opportunity for the
brands and what is required to win them and how are they accessed? In our drinks example, we
could calculate the market size of those segments where Coca-Cola is not present and analyze
how to go after them. What trends and dynamics are impacting channel, distribution, and pricing,
etc?
The focus of this lesson, we will talk about the last three steps of the process which are,
developing customer insights, creating portfolio scenarios, and developing a road map to achieve
growth. So let's begin with step three, which is to develop deep customer insights that can cover
new opportunities, where we can leverage the brand to drive value through growth or greater
efficiency. The key questions to answer are, what are the perceptual barriers as well as
perceptual license for brand extensions? How does a customer view the business? What unmet
customer needs can the brand fill? We should be able to identify the overlap between market
opportunities and a brand's relevance and organizational capabilities. For example, imagine we
wanted to target a segment that wanted ready-to-drink hot water before their meals, for health
reasons, or insights to reveal whether we can use one of our existing brands. In the case of Coca
Cola, it might be Dasani or Glaceau.

Or if we needed a new brand. Also, could we, as a company, deliver on a ready-to-drink hot
water since it might require different capabilities that we just currently don't have? Because we
haven't needed them with our current portfolio. In step four, our goal is to develop the optimal
brand portfolio strategy and quantify the impact, meaning, the expected resource requirement,
cost, and return on investment of the different scenarios. Leverage what you learned in steps two
and three, and what you initially hypothesized in step one, to identify value creation opportunity
areas. For example, wide space or underserved segments.

Consider different strategies for pursuing attractive opportunities, including extending brands into
new areas. For example, could we go after that ready-to-drink hot water? Launching a new
business. For example, should we get into the liquid food business, or change the offering and
business model. For example, should we sell drinks where customers can decide how much they
drink and only pay for that amount? Once you have highlighted those opportunity areas, there
are different ways to tackle the resulting and different portfolio options.

The objective is to develop a manageable number of realistic scenarios with backup the
envelope calculations to test and build business cases. For understanding marketing or
operational readiness implications. Any brand move within the portfolio can have a ripple effect
on customer experience, offering, and even our organizational structure. Take this into
consideration when determining the optimal portfolio strategy. Also, during this step, you should
evaluate business and financial impact to determine the optimal solution. This is where we build
the detailed business case to make go or no-go decisions and come up with an ultimate strategy
which could be composed of elements from different scenarios.

Finally, step five is to generate a road map to migrate from our current state to the desired future
state portfolio. How will the organization migrate its brand portfolio over time to support this
articulated business strategy? For example, if we had pursued the ready-to-drink hot water
opportunity with one of our existing brands, how would we manufacture price, and communicate
to our channel, and ultimately to our customers? What are the quick wins that we can gain to
build momentum for this strategy? Developing your portfolio is an activity that you should do from
the beginning of your business if you're launching an e-venture, and you should revise every so
often. The tendency is for companies to forget about portfolio and begin launching brands. Why?
Because brands are emotional, and many people will have, want to have, a legacy built on a
brand they launch.

Managing your brand portfolio

In order to effectively manage a portfolio brand, you need to think like a banker. What does this
mean? Your focus should be in protecting and building your brand assets to manage the tension
between achieving near term P&L performance and quitting long term value. Why protect?
Because you might be tempted to expand in a different target segment such as a value one, you
need to ask yourself will expanding into the value segment cannibalize my existing sales.

Could or should we use a different brand to do it? When we talk about building your asset, it's all
about maintaining margins that have been built through brand equity.

For example, you could be asking yourselves, how do we grow revenues without impacting
brand equity, like the negative effects of couponing? When we talk about leverage it refers to
how to use the existing brand platforms for growth. If you move into a new category, think of
which brand should be used to expand into the new category. Or if you want to establish a
partnership, will this partnership branding agreement enhance or denigrate the brand equity? So
what are the main challenges of portfolio management? The first one is that we may have too
many brands to manage. So, then, when launching a new brand, you need to ask yourself, does
this initiative generate sufficient revenues and return to support on-going products? If I use an
existing brand, could it inhibit or take away attributes to that product's brand promise? Can the
new product diminish or confuse the positioning message of the existing brand? For example,
Nestle, the maker of chocolates and other great foods, also owns a pet food called Purina. They
would never want to associate both brands. So you ask yourself, is there a strong reason to
launch a new brand? Do we need to own a specific benefit in the category?
For example, if we were PNG, we use Head And Shoulders to own the dandruff category and
Pantene for the vitality category. Another reason might be, they need to provide a different brand
promise and values. For example, in the hotel business, you create different brand promises for
each targeted segment. Thus, you might have the W hotels, the Luxury Collection, the Meridian
Element, the Sun Regions, and others, all belonging to Starwood Hotels. Another reason might
be because your offering creates a new sub-category in the marketplace. When your offering is
so innovative it might change the game, you want to capture that equity. A great example is the
iPad. Lastly, you might want to consider a new brand when you have a need to solve a
distribution channel conflict. For example, L'Oreal has Lancome, L'Oreal, and Maybelline New
York brands for different channels. The second challenge of portfolio management is having
scattered priorities. If this is your case, you should define which are the relevant brands. How do
you do that? Define an evaluation criteria. You could use brand equity, such as awareness,
reputation, differentiation, or brand strength such as sales, market share, margins, growth, or
strategic fit, extendibility, a growth platform, etc. Then you need to prioritize based on what we
learn throughout this MOOC. Is there a cash cow role for one of the brands? Are there any that
could be eliminated or reduced to the scripter status? Can we merge some of these? The last
challenge is not exploiting the existing brands to their fullest potential in order to generate new
opportunities. Can your brand become a platform for expansion? Think of Dove that came from
being a soap brand with $200 million in sales into a whole beauty category of brand with more
than 4 billion in sales. The way to determine if your brand can become a platform is by thinking if
there is a driver to be leveraged. What does a driver to be leveraged mean? It can come in the
form of a brand value such as innovation.
For example, Samsung Galaxy with the phones and the smart watches. Also, it can be product
category credibility such as BMW who knows cars. Or the brand's personality such as Harley
Davidson clothing. Or credibility in categories related to the product Samsonite, selling purses or
clothing, or credibility in the distribution channel, such as Amway and in-home selling. The brand
growth platforms are broader when the essence and the values are not focused on the
product-specific benefits, but rather on customer benefits to apply to more than one category.
Think of Amazon. What a great example it is. You could trust most any products sold online
through Amazon, because they have credibility and the channel. Lastly, there is your brand's
geographical expansion. You should think about where I am traveling, and how to prioritize
market opportunities. Use this frame of reference to help you out. Is a new market attractive in
size and growth? Are there favorable trends that support this? How fierce is competition in that
market? How long have they been there?

What is the presence and the customer loyalty levers of those competitors?

Are there political uncertainties that add risk? Can the company develop an existing business
model? Or are there cultural barriers that prevent it? Can the organization's product really add
value to that market? Now that you know how to manage a brand portfolio, I will share with you
my list of symptoms that indicate that you might have a portfolio issue.

This is a list from experience and it's by no means comprehensive. It can help you detect if there
are symptoms that require further attention. The first symptom as obvious as it may seem is your
revenue. If your revenue growth is slowing or your competitors are growing faster in your key
categories, you might have a portfolio issue. The second symptom is if you are loosing market
share to all competitors or new entrants. These would mean that your brand or brands are not
relevant anymore to our target customers. The third potential symptom, is if you are having to
increase your advertising or marketing spending to get the same impact. The fourth symptom is if
you have no clear brand driven growth platforms to fuel future growths, but rather you have to
launch new brands every time you want to launch a new product. The fifth potential issue is when
you have overlapping brands in a portfolio offering with similar products and services targeted to
the same customer. The sixth potential symptom, is when there is an inefficient allocation of
brand building resources to support your brands in your portfolio, you might have too many. The
seventh one is related to the sixth. And it is when you have gone through an M&A activity and it
has resulted in an inflated portfolio with too many branches to support. I encourage you to take a
hard look at your business and consider if you experience any of these. Look back at the
previous lecture of this module to know how to address them. This is the last lecture of this
module. Now that we have brand architecture and a portfolio, we need to start working on how to
translate our brand into a compelling customer experience.

The customer experience journey.

Like Howard Schultz, chairman of Starbucks, used to say, a brand is something unique bought
by a customer but a branded experience is a deep long term relationship that triggers emotions
beyond the purchase. It is timeless and therefore priceless. So, what is our goal in developing in
a customer experience is to capture and retain loyal customers who are passionate about your
brand. Why? Well, research by for example, Banynan company suggest their returning customer
spend on average, 67% more than first time customers. Another research by the center for retail
management on North West University founded up to 15% of a business small loyal customers,
account for 70% of the companies total sales. On the flip side, research conducted by the US
small and business administration found that 68% of customers leave a brand because they are
unhappy with a service they received. But, only 14% left because they were unhappy with the
product, so what is the cost of lost customers? Well first, negative word of mouth. Research by
the White House official office of consumer first found out that a satisfied customer will tell
between 9 and 15 people about their experience. The 30% will actually tell more than 20 people.
Also, lost customers means that you have to capture new ones. But the cost of bringing a new
customer to the same level of profitability as a lost one is up to 16 times more expensive,
according to a research by Lynn Grady.

Purchase funnel
Let's begin by having you think of the last relevant purchase you made. For example, for me, it
was my last holiday trip. Once I decided that I was going on a trip, I needed to decide where to
go. If you're an avid explorer like me, you want to go to a new place. But the only way to get me
to research potential destination is if I am aware of their existence. Thus the first step of the
purchase funnel is having your target customers be aware of your brand. After I was aware of
various destination brands, I began to research them. And narrow down my choices to only
consider two options. This is the stage we call consideration, the second one in the purchase
funnel. Afterward, I decided to purchase my trip to South Africa. And this is the third stage of the
purchase funnel. Once I traveled to South Africa and came back, depending of my experience, I
could share enthusiastically with others and encourage them to go. I could also say it was a nice,
but I would erase it from my bucket list. Or I could simply didn't say anything or even rant about
it. However, if I did share it enthusiastically and even travelled there again many times, I became
a loyal fan of South Africa. Loyalty is the last phase of the purchase funnel. How do we take this
example and apply it to our marketing world? If you think of it, the effectiveness of an
organization's marketing efforts can be assessed by examining the absolute level of awareness
of your target consumer and the rate at which those target consumers convert from awareness to
loyalty. In my example, imagine that 99% of the avid explorer's target group, like me, is aware of
the brand South Africa. But only 67% of those people actually consider to travel to South Africa
on their next holidays. It means that only 66% of the total target group moves to the
consideration text because 99% times 67% is 66%. However, that 66%, after research in South
Africa and other destinations, only 33% actually bought the holiday to South Africa. This means
that only 22% of the original target customers aware of South Africa brand have actually bought
a holiday for that destination because 66% times 33% is 22%. Let's say that of those 22% who
travel, 75% became loyal to the South Africa brand and repeat every year. This means that 17%
of the total target population converged through the entire funnel. If we analyze what happens in
this funnel, the 33% rate of conversions from consideration to purchase is low relative to the
conversion rates at other stages and represents what we call a bottleneck.

This analysis highlights and begins to diagnose where your marketing activities are having
impact in which phase of the funnel and where there is an opportunity to improve. With this
information, you can make more strategic decisions about what your marketing approach should
be. And it gives you a benchmark for knowing when you've been successful. A relative low
conversion from one phase to the next indicates a bottleneck. And you may want redistribution of
investments to remedy that. Understanding customer conversion should be part of a larger effort
to turning inside into action. Think about it. We could identify the customer revenue value of
addressing each prioritized bottleneck. Since based on the average purchase of your target
customer, you can estimate the additional revenue you could capture if you improve just 1% in
any phase of the funnel.

You can also know how does your brand compare versus competitors or your opportunities in
different segments. See, you should calculate the funnel for each of these, and compare the
conversion rate at each step of the purchase funnel. This is especially useful when you're
launching a new brand or product, because you can use your competitor's information to know
where you can turn their weaknesses into your strength. Lastly, let me clarify two points. First,
that purchase funnels vary by industry since the process that customers use for buying in
different categories is different. Secondly, McKinsey, the management consultant firm, did a
research some years back that proved that the funnel in certain markets and in certain categories
doesn't have a funnel shape anymore. Why? Because there is so much information nowadays
that consumers can be aware of certain brands and even consider them. But as soon as they
begin to research on the Internet or in stores, they might discard some brands in their
considerations, say. But the salesperson, or even friends, might convince them otherwise and
bring them again into their consideration segment. Even after your purchase, when you share
your experience through a review site or social networks, this have an influence on future buyers.
In summary, one of the most relevant uses of the purchase funnel is to identify where the brand
should invest in customer experience. Higher conversion rates result from focusing on the
bottlenecks, through a branded customer experience that addresses customer needs at each
step of the funnel. Now that you know what a purchase funnel and how to use the information to
improve the bottlenecks, let's talk about the touchpoint concept.

The touchpoint concept.

You will need these two concepts to develop compelling customer experiences. Think about if
we were going to launch a rocket. Our engineers would have developed the blueprints for it.
These are the precise idea of how we want our rocket to be. However, from blueprint to a
tangible result, it is a long way and it requires hard work. Left of the screen, you can see a
simplified blueprint for the Russian Soyuz rocket. You don't have to be a rocket scientist to
imagine how much work it was actually to build something that could successfully launch a space
mission. In a way, that is where we are with our brand. We have a blueprint. Now we need to
build it. So let's roll up your sleeves. What are touchpoints? Brand touchpoints are all the
different ways that a brand interacts with, and makes an impression on, the different
stakeholders, such as consumers, reviewers, analysts, etc. To implement a brand, we use the
touchpoint wheel. Let's first work on the touchpoint concept by looking at Starbucks. Since a
touchpoint is the point at which a customer touches or interacts with a brand, it could be the
actual coffee, or the retail staff, called baristas. Or perhaps the press articles about Starbucks.
But let me clarify that a touchpoint is not a quality, an attribute, or a behavior, such as Starbucks
fair trade or the friendliness of the staff, or even their environmental policy. In order to design a
customer experience, we need to have a map of the potential touchpoints. The touchpoint wheel
looks like a gear. Think of it as the engine of our organization that drives every activity. The
example on the screen is taken from a company that makes and sells industrial goods. You have
20 seconds to memorize them. No, I'm just teasing you. I wanted to encourage you to pause the
video and read through so you realize how complex this task can be. We separate three stages
of brand customer interactions. It starts with everything that happens before a customer makes
the decision, things like advertising, trade shows, website, and so on.

The next stage deals with interaction during the purchase decision. In our example, mostly
interaction between sales people and customers. Lastly, there are a number of interactions after
the purchase decision was made, which includes service, billing, and many more. Each business
has its own touchpoint wheel. And depending on the nature of the offer, these three stages can
have different names. So how does a brand generate a customer experience at any given
touchpoint? Its touchpoint experience needs to be designed and managed with the brand
strategy in mind. Think of a total different experience that you have when buying one brand of car
versus another, even when they're within the same price range. In a touchpoint, there could be
one or more processes that customers get confronted with. For example, take this service for our
technical product. Customers touch the brand during a phone call to make an appointment for a
service technician to come. The next touchpoint is when the service vehicle pulls up. Then, the
technician himself is another touchpoint, and so on. From this example, we can see that on top of
the actual process, other factors are important in generating the touchpoint experience. One of
these factors is the tool that comes to play. Just think of the automated phone system to
schedule the service appointment, interacting with a computerized phone system is a very
different experience from talking to a person. Which brings us to the most important aspect of
defining touchpoints, people.

They are ambassadors of our brand and have a significant impact on how a brand is
experienced. Eventually, consistent brand building requires established metrics to monitor and
manage touchpoints. But we will leave all of that for module six. Let's talk about the different
touchpoint categories. Let's begin with the pre-purchase touchpoints, which are those that drive a
potential customer to place your brand in their consideration set, prior to making the actual
purchase. I hope you're already realizing the connection between our purchase funnel stages
and our touchpoint map. Secondly, we talk about the purchase experience, which comprises of
all of those touchpoints that are involved with the customer actually making the purchase. Up to
the point when they have either received the product or service. Also, we can include the
touchpoints that are required or needed for the customers to use the actual product or service.
Third, we have the post-purchase experience, which are all of those touchpoints. They're our
leverage after the sale, and after you have used your product or service. And serve to maximize
your brand experience. Lastly, we have other influencing touchpoints, which are those that
indirectly help to make an impression on the brand on its customers and various stakeholders.
Now, if we think of our lemonade business, which ones do you think are the touchpoints? Now
that you have an understanding of the touchpoint concept, let's identify the touch points for your
brand.
Identifying your touchpoints.

To identify the touchpoints you have to see the process through the eyes of a target customer
segment. Thus we have to put on the hat of the customer of our brand. Let's think of our
lemonade customer. Imagine the scenario, you and I are walking down the street in a hot
summer day. We meet a friend who is drinking a lemonade and shares how wonderful it is. We
look at the cup which is very cool because it looks like the peel of a lemon and it actually smells.
Our friend mentions that the lemonade stand is just around the corner. Immediately, we decide to
go over to the stand. On our way, we look at some posters on the street that point to the
lemonade offering. Also, as we approach, we get a push message on our phone offering
lemonade nearby.

When we arrive there is a line of people waiting to be served. I get close to the stand and the
person preparing lemonade offers us a trial cup. It is amazing, a flavor completely different from
any lemonade I've ever tasted before. As we are queuing, we can smell an incredible scent of
fresh lemon. We can even see the lemons being cut and notice other ingredients which are
shown with an incredible presentation. The people preparing to lemonade are impeccably
uniformed and seem awfully clean, at least to be preparing lemonade all day. There is a music
that reminds me of a beach or a pool. It is at the right volume, not too high, not too low. After
ordering, we receive our lemonade cups and he says that there is a full refund, if we don't like the
lemonade. Also, as we are about to leave, he offers us a business card followed by a message.
Remember, if you share your experience in social media, the first one is on us. The card offered
fresh lemonade delivery to our home or office everyday of the year. Let's pause our story here.
Have you been able to identify the touchpoints? Let's begin with the pre-purchase touchpoints,
which in this case are word of mouth from my friend, the posters on the street, and the push
message on our phones. The purchase touchpoints include the location, the decor of the stand,
the music, the product comprised of the actual lemonade and the cup, the ingredients and the
personnel with their uniform. The post-purchase touchpoints are the card that he gave us and the
loyalty promotion. Let's look at another example now from a real case study that we consulted
for. The client was a young hotel chain with less than ten hotels throughout Spain. They had little
to none brand awareness. The team was young, energetic, with lots of enthusiasm. When asked
what was their issue, they described that they compete with other hotels that are in the adequate
category and needed some differentiation. We were appalled. What does the adequate category
mean? Their team wanted to create a unique and differentiating experience to stand out and
offer an appealing reason to try their brand. After running some internal workshops and
conducting minor research with guests, we developed a brand strategy. However, the research
yielded issues with specific touchpoints that prevented clients from returning to the hotel. Let's
look at one family we interviewed. These are Peter and Anne from Madrid. They are a young
couple in their thirties with two young childrens that travel mostly within Spain by car and like to
go places where there is lots to do for the kids, but also fun for him and his wife. They don't
expect to spend a lot of time in the room, so he looks for hotels that have a convenient location,
good rates, and dependable service. What he really appreciates are small extras for the kids and
rooms that feel updated. They have set their sights on going to Valencia because of the
existence of both the beach and the oceanographic site. Peter asked a colleague from work who
had recently visited Valencia, and he recommended our client's hotel. Petey immediately went
online, looked at the hotel's website pictures, and once he got approval from Anne, he decided to
go ahead and book it. It took him 45 minutes browsing through the different booking agents to
actually make the reservation. Because pricing was different in every website, which really
annoyed him. Let's fast forward to the actual arrival at the hotel. After the long drive, Peter and
Anne began their check in process. The kids were roaming around the lobby playing with the
luggage. Anne got really nervous that they would knock down some vases that are part of the
decor. One finished the checking process, they took the elevator up to their rooms, only to find
out that they weren't connecting rooms. Annoyed, Peter went downstairs and after a long
discussion with the reception clerk, he came up with the keys to connecting rooms. When they
entered the rooms, the decor was updated but the bed was hard as wood. And the bathroom had
no bathtub for the kids. And the shower hadn't been updated in a while. Now, let's fast forward
again to their departure day. Early in the morning they receive an envelope with the bill under the
door. After revising it, Peter realizes that there were some mini-bar charges that weren't theirs.
He went downstairs to the reception to find a long queue. During his wait he decided to write a
review of the hotel on the Internet. After 15 minutes and a bit of discussion, he finally was able to
sort out the bill and complete the checkout process. Let's pause our story again.

Think of the experience that Peter had. Can you identify which are the touchpoints? Notice how
in the absence of other research, we can also probably hypothesize where are the bottlenecks to
move this target customer from one face of the purchase funnel to the next one. Can you guess?
Now that you know how to identify and map touchpoints, we can begin to work on prioritizing
those that are key to the customer experience.

Prioritizing the key touchpoints.

Our first task is to identify overlaps between our touchpoint map and our purchase funnel. How
do we do this? We screen those overlaps by considering impact on conversion and revenue,
ability to differentiate versus competitors, the link to our business strategy. If you're launching a
new brand simply by the fit with your brand vision.

The next step is to align our resources to improve touchpoint efficiency. So how do we do this?
We compile our spending against each touchpoint. Then we evaluate those allocations relative to
the conversion impact. Once we have completed this task, it is time to redesign or design, if
you're launching a new brand, the touchpoints. This is the fun part, why? Because we develop
alternative scenarios for each of these touchpoints. We evaluate those alternatives on fit with our
strategy, cost, scalability and likelihood of improving customer experience. We also create test
and implementation plans. We'll talk more about this in the next module, on the lesson of how to
embed the brand in the organization. If you think of the steps that we have followed, we now
have a measurement system that links customer experience to business outcomes. First, by
overlapping touchpoints with a purchase funnel, we define which are the relevant touchpoint
activities that need to be designed or redesigned.

Then we actually re-thought the touch points based on our brand values. Afterwards, we tested
and learned which of attitudes and behaviors we could influence through our customer funnel
data. And finally we could link each of these changes to a specific metric. Whether we'd be
creating awareness, revenue growth, return on marketing investment, etc. You're very thorough,
you should analyze this for every target segment. Let's look at the small hotel chain example
from our last lecture. We began with our formal research. So we had to interview some guests to
determine the ten most impactful touchpoints for both the business and the leisure traveler
targets. We use this data to understand the overlap between the customer touchpoints and the
purchase funnel. Since there is a lot of information, you might want to pause the video to take a
quick look so you can get an understanding of what this case looks like. So you might be asking
yourself, how do you actually prioritize high impact touchpoints? I like to think of high impact
touch points as those that have the ability to influence, in a compelling way, the behavior of a
target customer. When evaluating which are those high impact touchpoints, think of the
frequency of a touchpoint, how many times your customers will experience it, and the influence
of the touchpoint in the actual purchase decision. Be realistic about your possibilities. For
instance, consider your organization's true ability to deliver that new brand strategy. Therefore,
let's agree that high impact touchpoints are those that make or break the brand experience.
They're the ones that either convince you to buy, or turn you away. In which touchpoints can your
customers be truly more influenced? Think of the last time you purchased something. Which was
the critical touchpoint? I have a short cut to help you prioritize those high impact touchpoints. In
this tool, we have a graph with two axes. On the x-axis we use the criteria, ease of
implementation. And this can mean cost, time, or resources. And it goes from complex or high
costs on the left to simple and lower costs on the right. On the y-axis we have relevance for the
customer. And it moves from less relevant on the bottom to very important on the top.

Defining the touchpoints roles.

In the prioritization, we used various criteria. But to make things easy for you, in our hotel
example, I had provided you with a cost estimate of the redesigned touchpoint. However, in your
brand you first need to decide what is the role that you want each touchpoint to play in your
holistic customer experience. Let's look at a useful framework to guide you through that decision.
If we start at the top of the pyramid, we have what's called branded differentiators. Those that will
definitely provide the most accurate experience of your brand and offer a clear customer benefit.
In most industries, you can only have just so many branded differentiators. In your hotel
example, they were those that would definitely differentiate the experience from other adequate
level hotels. Alternatively, you could have signature items.

These are the ones where there are many visual and experiential cues that communicate your
brand. In our hotel example, they're the unique and pleasantly surprising elements of the guest
experience that can be delivered consistently across all of the properties. Then we have category
redefiners. These are the guest ideal touchpoints that are not expected or delivered by
competitors consistently. So we can take advantage of this. Lastly, at the bottom of the pyramid
we have guest expectations, those requirements that every target customer expects are
consistently delivered by competition. In our hotel example, those elements that all hotels in the
adequate category have. So what did our hotel chain design? The client decided to focus on
differentiators rather than cleaning up existing issues. We decided on two key branded
differentiators to deliver the revamp brand strategy. The bed and the shower. We also included
some signature icons. Visual and experiential cues that support the hotel's brand and
consistently reinforce the unique and pleasantly surprising nature of the hotel experience. These
were the small in room icons, the employees' uniforms, the grab and go breakfast, high-speed
Internet, and the lobby. Finally we summarized the budget for each of the different touchpoints.
The brand differentiators, the signature icons, and the category redefiners.

Implementing the brand at the key touchpoints.

Remember, before we even begin we need to clearly articulate what we want our customers to
experience at each impact touchpoint. You will learn more on this topic in lecture 6.3. Let's
suppose that we are calling the telephone service of your insurance company to make a
complaint. The first thing that we experience is that there is an automated reply. And read a
menu of options. Once we have gone through at least two menus, we are placed in a queue.
Which elements do we have to consider for the customer experience? The waiting time. The
background music. Providing a rim back option when absolute waiting time is too long, etcetera.
Now all of a sudden a person comes up and says a greeting. Which element do we need to
consider in the customer experience? The answer text. The way she calls you, the tone of voice,
the level of friendliness of the greeting, what information to collect, and how she needs to ask the
questions. Their routing process if she's not responsible for the query you are making, etc., etc.

Also we should think of the actual waiting time of her system, to actually bring up your
information. And then when confirming your information or making changes for your file, there's
also another waiting time. Now we move to the actual staff interaction. We need to consider the
person's experience, the level of decision making that she or he has, the efficiency of handling
the call, and the level of specialization required in their vocabulary. The ability to handle different
situations etc, etc.

Think about all of these details and KPI's and we need to define for the branded customer
experience. And we haven't even mentioned our complaint yet. Going through this level of details
and being thorough is what it takes to be successful in generating compelling customer
experiences. Let's go back to our small hotel chain example from our last lectures. We had to
find, as branded differentiators, the bed and the shower. We had also defined other signature
icons such as a grab and go breakfast or the high speed internet. Restaurant with a detailed
description of these touchpoints, we've prepared the right budget for what's required to develop
these touchpoints. We separate major innovations from conversions, which were those that only
required a facelift. Then we developed a brand launch plan. A two-year plan, the timeline and
actions for each functional area to launch and implement the new brand prototype. We also
created a two-year plan with operational activities, to manage the migration of existing properties
to the new brand. So how would you implement our brand at our lemonade business? I hope you
have enjoyed this module on developing a compelling customer experience. I know you might be
overwhelmed and thinking, will I need to do all of these on my own?

Brand engagement
Beyond the obvious, the branded customer experiences are more efficient in delivering
business results. Research done in various geographies indicates that having engaged
employees means that their performance is at least 20% higher than those who are
averagely engaged. Their retention rate is significantly higher and they achieve scores of
customer loyalty which are twice the level of companies with average employee engagement
levels. So, how do you achieve this? Through a brand engagement program. That is, a
conceptual framework around which we develop a particular form of connection between
employees and the brand. The brand engagement program works at three levels. At the
rational level, because we need employees to understand what is the essence and the
values of the brand so they can guide their business decisions. For example, at Virgin, they
develop a brand values video which shows how to apply that brand value in each touchpoint.
Second, at a behavioral level, because we need them to have the tools that help them apply
the brand at each assigned touchpoint. For example, a conglomerate, we develop a
checklist that they could use every time they were making a decision that involve
customer-facing touchpoints, but what, in our experience, is most important in generating
actual change, is to convince them at an emotional level, because by providing a meaningful
purpose of they can relate to. For example, a consumer goods company in the division of
prepared foods was having difficulty in delivering their brand promise because most of their
team had lost enthusiasm and creativity.

Their CEO created a brand engagement program that was focused on creating a higher order
purpose to engage all the employees. The essence of the brand was wholesome meals in little
time. The emotional connection was created using the research that supported that employees of
this brand were actually enable families to have meals together, which is proven to drastically
improve the quality of their lives because the children do better at school, because couples who
eat together stay longer, etc., etc. In this module, you will learn the different components of the
brand engagement program. Namely, how to create and deliver a brand communication training
program, how to embed the brand in the different touchpoints, and how to reward and measure
the success of your program. We will talk about the Brand Engagement Tool Kit, those elements
that, in our experience, work most efficiently in helping employees understand and embrace a
brand. We will also talk about brand champions, or brand ambassadors, those individuals within
organizations that are already engaged with their brand and how we can leverage their passion
to pass on to others. Our ultimate goal is to create brand passionate employees. It will require a
development phase, whereby the employees become aware of what the brand stands for. We
have to make the case for them. Then, it requires getting them hyped about how they can
participate in building that brand, and lastly, once there, locating that end of the brand motivation
spectrum, we need them to help others to build a strong brand. Those are our passionate
employees. So how will we know what engaged employees feel like?

Defining your internal communication and training program.

The conceptual framework around which we develop the particular form of connection between
employees and the brand. We also mentioned that it consisted of three types of activities.
Employee communication and training, embedding the brand throughout the organization and
measuring and rewarding brand behavior.

The best way to make employees aware of the brand engagement initiative is through internal
communication. An internal campaign allows articulation of the brand role and values in a way
that is relevant to the different internal stakeholders. It also presents a platform for everyone to
view the brand as important in achieving the organization's success. And it helps employees to
see themselves as essential in delivering the brand promise. So what is the process to define an
internal communication campaign? First you need to understand your audience. You need to
define your key messages. You need to define the delivery channels. And lastly, you need to
define the timings of delivery of each message. Let's begin with the first step, understanding your
audience.

The best way to approach this step is to ask your audience. Whether it's via an internet online
survey or if your organization is small enough you can do one on one interviews, or a mix of both.
At minimum what you want to evaluate is, what is their understanding of the existing culture,
what kind of culture do they actually want. How likely are they to participate in a brand building
effort? Their understanding of what a brand is and what your brand means for them. And whom
do they believe is responsible for building the brand? And which touchpoints they think are most
important to customers. The outcome should be the emergence of at least one or more
segments according to their level of engagement with the brand.

With the information you collected, you should be able to define segment profiles. And identify
where they are in that brand building motivation graph. As with external marketing, audience
segmentation is key to set realistic objectives in the brand engagement program. It is imperative
to tailor the efforts to meet the specific needs of each of the audience segments within the
organization. For example, at one company the analysis yielded two employee segments. The
enthusiastic employees who felt that the brand was important and understood that everyone
must help to deliver the brand. And the indifferent ones, those employees who think that the
brand is important for the organization but they're not really interested in either defining them or
participating in how it should be implemented.

You need to decide what are your key program objectives for each segment. The second step is
to define key messages that resonate with each segment. The messages should focus on the
brand essence and values. Providing a brief explanation in consumer language. They should
also show tangible examples of how each of these values translate into behavior for your
employees internally and externally towards your customers and other stakeholders. Step three
Is defining the channels and tools to best engage your employees. The channels to deliver the
messages should be strategically deployed. We recommend using different types of media to
communicate the messages. You should consider at least two variables when designing your
delivery channels, complexity of delivery and impact in time. For example, simple elements which
are more short term oriented we call attention grabbers, such as a wall poster or a screensaver.
We can also use online devices such as Facebook, Yammer, Pinterest, or Instagram to launch
either campaigns or contests. Such as asking people for example, of how brand values are
already being implemented or should be implemented or simply for sharing their experiences in
the program.

Other attention grabbers could be company fact sheets. Another example we've used
are mouse pads with the brand values. Another great attention grabber is having a conversation
with a person in management who embodies the brand. In some companies we have even
organized regional chat rooms with the CEO. Introductory or brand materials such as videos,
webinars or in person workshops are good for delivering messages and tools that would
generate a more lasting impact.

Training should cover why brands are important, what your customer's are and their needs, how
the brand was developed based on those customer needs, what the brand means, how
employees can bring the brand to life through their personal activities and interaction Videos
bring the brand to life in a way that are two dimensional presentation can't.
In any case a brand training session is recommended for all employees. Because it actually
calibrates the brand or branding definitions and concepts it provides tangible examples of what
other organizations do that can be implied in yours. It generates ideas on how the organization
can bring to life its brand and it tangibilize the benefits of building a brand culture.

Lastly, elements such as the intranet or a brand kit or the ones that despite being more complex
in creating will continue the brand engagement for the long term. If you think of brand kits, we
suggest using something that employees can wear, which has the dual purpose of helping
employees demonstrate pride in the company both in and outside of the office and serve as a
daily reminder of the brand values they are bringing to life. For the longer term, the best resource
is having a dedicated Internet site that can serve as a hub for employees where they can find
and share brand training materials, tools to help them implement the brand in their daily tasks,
such as touchpoint exercises, updates on brand champions activities and other initiatives. We'll
talk about brand champions in the next session. Information about brand related rewards and
recognition. Visual identity tools such as letterhead and logos, etcetera, etcetera. Step four is
about defining an immediate plan to sequence the different messages and channels. In a way
that develops momentum during the program and afterwards. Lastly, I would like to highlight a
crucial element to consider when launching your brand engagement program. You need to have
top management's commitment.

Employees will only participate and engage if they see that the organization's leadership is
committed to delivering the brand.

Embedding the brand throughout the organization.

However, before we begin, you need to select some key people who will be your brand
champions, or brand ambassador teams. These are individuals that meet at least two criteria.
They identify themselves with the company more than the average, and they have the capacity to
communicate and lead initiatives. If you're a start-up with a small group of employees, you might
want to recruit an outside person to help you with the task at hand.

The brand champion team will have the responsibility of the daily operations of the brand
engagement program. The team defines how to embed the values in every prioritized touchpoint
in the short term, and plans and leads the brand engagement program in the long term. Since
they will be responsible for developing the communication campaign and trainings that we
discussed in our last session, you should consider enlisting support from a creative or graphic
designer, or copy writers that can help you. However, what we have seen is that in some of start
ups, the best works comes from internal people through contest, we'll talk about this. Member of
this team also have individual responsibilities at their functional or department level. Their role is
to ensure that the brand is brought to life in the key touchpoints, those we discussed in our last
module. They will do this by defining sub-teams, which many times involve more than one
function, that work on embedding the desired experience at the prioritized touchpoint. In
summary, the brand champion team defines priorities, divides in functional sub-teams. Defines
outcomes and work plans for each initiative, recruit functional people, provide guidance in
implementing, are the go to persons for assistance, create communication content and training.
And follow up on the implementation of metrics. And finally, ensure the rewards initiatives are
followed through. What time commitment does it require from brand champions? In our
experience, this group requires an initial two to three working sessions to establish priorities and
a master plan. Once activities are defined, it is a part time job which also requires recognition
from the organization, ideally from top leadership. We will talk about it. So let's dive into the five
steps of embedding values at key touchpoints.

1. First, you should analyze whether you need to divide your touchpoints into
sub-touchpoints.
2. Second, you need to define that ideal experience.
3. Third, you refine the ideal experience.
4. Fourth, we test the ideal experience, and fifth, we generate an implementation plan. Let's
begin with the first of these steps. Breaking down your touchpoint into sub-touchpoints.
For example, a real estate company had a touchpoint of a sales and leasing center.

What are the sub-touchpoints that you would consider? Examples of sub-touchpoints might be
the parking, the furniture, the music, the sales and leasing agents, very important. The amenities
offered, food and drinks, etc.

Once we've identified these sub-touchpoints, you want to define the minimum required that each
needs to be competitive. In our sales and leasing center example, the parking would need to
have at least a specific number of parking spots. Or the furniture should be clean and easy to
maintain. Or the music should serve as a background to enhance customers' tastes. Now we
move into the second step, which is defining that ideal experience. You need to look at each of
your brand value definitions and evaluate how they can be represented. For example, if one our
brand values is that the brand is defined as being sustainable, you might consider having a
self-lighted car parking using solar panels. Or, the sub-touchpoints, you would consider whether
materials used are recycled or recyclable. You should highlight all of these details with
communication throughout your touchpoints. And the third step is to refine that ideal experience.
You want to identify elements which could potentially enhance the ideal experience that you have
defined.

How do you do this? Make an analysis of the same touchpoint, or sub-touchpoint, for your major
competitors, or another company in the industry which you admire in an out of category
organization. Then, use this information to revise the outcome of the previous step. Make sure
that what you've added is aligned with definitions of your brand values. The fourth step is to test
that ideal experience. The best way to test this is to present these touchpoint explanations
through images to your target customers, or your most loyal customers, because that will make
them even more engaged with your brand. However, many times, we don't have the luxury of
being able to access them. And you should carry out roleplaying with friends or colleagues from
work, where they become your target customers. If you give them a thorough explanation of your
customers' behaviors and attitudes, they can become your sounding board for testing. The last
step is to generate an implementation plan. Once all critical touchpoints are designed,
implementation follows the general rules for any complex project management. Just as a
reminder, here are the key elements of successful implementation.

First, you need to define action items, take that touchpoint design and translate into tangible
action items and metrics. Second, take the desired ideal experience, the customer view, aligned
with brand values, defined with metrics that will guide the performance of the sub-touchpoints
and identify the organizational requirements that you need. You should consider what processes
are involved in the delivery, what people skills are needed, and what implications in systems that
the experience requires. These organizational requirements will be the basis for your
activity plan.Afterwards, you should determine milestones and timings, define the most critical
elements during the process and set a completion date. Also, you should assign roles and
responsibility to determine who is responsible for what, and who should be consulted. You should
establish tracking mechanisms to monitor implementation progress on a regular basis. Lastly,
you can define a touchpoint governance initiative. Our recommendation is to have a steering
committee that meets regularly to oversee the performance. Although this part of the brand
engagement seems like a daunting task, it is something that you don't do holistically every year,
but every so often, or when you launch or relaunch your brand. Or even when faced with a
difficult competitive situation. Also remember to focus on those key touchpoints that make or
break the customer experience. Now let's think about our small lemonade business. Suppose
that we have a website and five stands of lemonade in your neighborhood, each with two
employees. Think about how you would embed a brand at these touchpoints. Now that we know
how to embed the brand throughout the organization, we need to learn how to measure and
reward brand behavior.

Measuring and tracking internal brand behavior.

The focus of this lesson is that you learn to measure and reward brand behavior. Why should
you measure brand related efforts? Because it provides a benchmark on how your program is
performing. It also demonstrate your organization's commitment to the brand and to the program.
It shows tangible result that employees can relate to and reinforces the development of a
cohesive culture within the organization. Remember, everyone across all functions has a role in
bringing the brand to life. If they are in product development you should motivate them to ask
themselves whether the product they create delivered the shared values of the brand. But if they
are in HR, they should also be asking themselves whether the people being recruited have the
right capabilities to help deliver the brand. In an ideal world matrix should reflect the different
functional areas for delivering the brand promise. Our experience is that ultimately on brand
behavior needs to be experienced by everyone internally and perceived by external
stakeholders. If we recall from our introductory lesson in this module, developing a strong culture
is a phased process. In the first phase the objective is to create awareness of the brand, which
we call, the hearing phase. The second phase is about making employees believe the
importance of the brand. We call it the believing it phase. The last phase is where employees are
passionate about the brand and we call it the living it phase. In line with these phases, we should
have metrics and reward that consider the phase where the organization stands. Of course,
since you have identified segments not everyone will be on the same page, but you should
consider having a mix that will capture everyone's interest. We should use recognition and
reward for both groups, our employees and our brand champions. When we talk about
employees first, are objectives for them to become aware of the brand. I had one company we
needed to raise employees awareness of the program itself. So we decided on a contest with
peer to peer voting. First, we sent an email to all supervisors and brand champions to nominate
the brand ambassadors of the period. After nominations were received, a message was sent to
all company employees with the following question. Among the following persons that were
nominated, who do you think best embodies a particular brand value during this period? The
description of the brand values was included, of course. It was announced that the person who
got selected would have his or her poster around the office. Beyond this actual recognition, small
prizes were given as well as a five minute conference call with a C level person in their region. In
the second phase our objective is for employees to believe the brand values. And begin to
embed them in their functions. At another client we created a Oscar type of award and gala. The
Brand Champion Committee predefined a criteria for selecting entries that would be
communicated throughout the organization. Such as most on-brand department, the best
implementation process for embedding the brand, the best implementation of metrics, the best
on-brand behavior for a specific value, etc. Employees submitted their short videos that everyone
could watch, comment, and vote through their Internet. At the end, pre-selected finalists were
flown to their headquarters for a gala event.

The statues were something everyone shared and proudly showed in their place of work. Every
step of the process had internal and external communication that amplified the message. In the
third phase, our objective is to have employees embrace and bring to life the brand values
across touchpoints in the different functions while supporting others. Since everyone is
responsible for the delivery of the experience, we suggest that you implement additional KPIs
with a tangible objective and metric that considers the delivery of the brand. For example, the
KPI might be the launch of a specific initiative that embedded the brand values in your critical
touchpoints in which they have participated. Or the number of brand values that each initiative
considers in their touchpoint. Or the improvement in the customer satisfaction or loyalty scores,
etc., etc. . The second type of recognition and reward that we should consider is for our brand
champions. For this dedicated group of individuals we also need to consider how their roles
evolve during the different phases. During the initial hearing phase, their role is to become the
living example of brand behavior. This is an individual effort. During the believing it phase, their
role evolves to support others in promoting initiatives for embedding the brand in the differing
departments. During the living it phase, their role is more of a team effort that develops and
follows through the initiatives for embedding the brand across touchpoints in the different
functions. For example, an organization will work with every quarter of the brand champion
presented, every touchpoints team's result to the management committee. The latter chose
which was the best brand champion team of the period based on completion of the touchpoint
activities plan, assistance and participation to the team meetings the team that had both more
activities completed and more participation got recognized and rewarded. A specific how-to guide
with the tool was created for the management committee to apply. Their reward came in the form
of a range of activities from a simple treat to a group lunch at a nice restaurant to a team building
event. In summary, the benefits of rewarding on-brand behavior are many. So it's just maintaining
excitement among employees and brand champions, demonstrating organizational commitment,
drawing attention to the behaviors of the company which is to reinforce. And in creating tangible
models for employees to understand how to act on specific brand attributes. Remember, use a
sequential approach to implementing recognition or reward initiatives which short term focus first
to pay their way for more ambition. Begin with simple and high profile initiatives and develop a
test and learn approach to raise awareness and generate interest in the program.
Key success factors for your brand engagement program.
The first success factor is to select the right individuals and definitely involve the organization's
leadership. Having the right people will make or break your initiative. When working with one of
the largest real estate developers in EMEA we launched a brand engagement program
immediately after a long rebranding exercise that had the full participation of top management.
The brand engagement program was a joint initiative of H.R. and marketing, but had the
endorsements of some of top leadership. However, when they were in meetings with internal or
external stakeholders, their actions were in contradiction with what the brand stood for. They had
not changed their behaviors according to the new brand values. Furthermore, the CEO never
appeared in the communication or in any of the events.

After investing in communications, training and having teams work for six months on key
touchpoints, the program began to fade away. No one thought that it was a priority and
abandoned all of the initiatives. The company was back to square one.
With a brand that meant nothing to customers because all they communicated in advertising and
not delivered at the key touchpoints. The second success factor is to develop a goal
measurement system which is public and ubiquitous. For example, at a large entertainment
conglomerate there were dashboards throughout the organization, they showed real time key
metrics. Such as the number of guests that had entered their parks, the amount of time that was
spent at them, the number of positive or negative comments left on key review sites, etc. In fact,
every two hours the right side of the dashboard would show a positive and a negative comment
so people could understand and follow-up on the issues at hand. When employees saw what
was going on it became an organizational priority to ensure that issues were solved expediently.
The third success factor is to adopt employee source initiatives alive with the brand values, such
as contests for example. Because it helps the company effectively communicate the kind of
behavior it wants to promote, and also create a sound competitive environment. BP for years ran
its Helios award scheme, which honored projects and work that embodied the company's brand
values, green, innovation, performance, and progressive. Every year an Oscar type ceremony
was held with the fields nominated for the project. For almost 1500 entries, 6 winners were
chosen from 16 finalist projects. The Helios award program acted as a powerful way to unify over
100,000 people or 1 single brand with 1 sense of purpose. The program recognized the
achievements of their people who had put the brand values into practice and celebrated their
success. Also a vast amount of knowledge was gathered through entry submissions. The
program provided a platform for sharing creativity and best practices to bring in business benefits
across all the groups. The fourth success factor is a brand engagement initiative should be given
the opportunity to complete their own cycle. The longest lasting impact comes from programs
that have been perfected through continuous iterations. The 3M brand has sustainability and
innovation at its core. It means protecting natural resources and empowering individuals and
communities throughout the world to encourage progress.

3M's annual energy recognition program boosts employee participation and provides an
individual the sense of accomplishment in its manufacturing plants. The program was established
in 2003 and formulates a 4 level rating system from bronze to platinum based on their internal
energy program dashboards and scorecards. Winning teams are rewarded with a variety of
prizes, ranging from certificates to dinners with 3M management. It has enabled 3M to implement
more than 1,900 employee inspired projects from 2005 to 2009. These projects have realized a
22% improvement in energy efficiency and yielded more than 100 million in energy savings from
2003. Also, 3M has an internal design workbook compass, which guides 3M designers to
address sustainability issues throughout the innovation process. Another success factor is to
maintain continuous communication of your program. Initiatives that are communicated
relentlessly and where the objectives and characteristics are made publicly and readily available
to all employees achieve significantly better results than the average. A sixth success factor is to
delegate a recognition share to employees through peer-to-peer programs.

Because it transfers to employees the responsibility of defining, identifying, and rewarding those
behaviors that are best aligned for the brand values. For example, at American Express,
American Express Incentive Services definition of recognition is showing an employee that you
value them for their contributions as a worthwhile person. The incentive system has several
initiatives, but one stands out for a cohesive effect on its ability to engage all employees of the
company. The program Customer First is a peer-to-peer recognition program that allows
employees to recognize one another with points for exceeding customer expectations or making
it easier to do business with American Express incentive services. In customer first, every
employee is given 150 points on an annual basis to recognize fellow employees in any amount
up to 150 points. By the way, points have a one-to-one dollar value. The last of the success
factors is to set a brand-based culture as your greatest asset. Always keep generating and
maintaining brand engagement initiatives as one of the highest priorities within the organization.

Zappos epitomizes the case for building the right brand-based culture and recruiting people who
further develop it. All new hires including manager's positions have to undergo a four week
immersion program that includes answering customer calls. The program called Check-to-Leave
consists of negative rewards. If you want to stay at Zappos after your first week, you must forgo
$2,000 offered only if you leave the company. In other words, after one week at Zappos, you're
offered $2,000 to leave and never come back. Think about it. The business risk of incurring in the
cost of bringing a person who doesn't epitomize the brand values, is higher than paying him off to
leave. We have come to the end of the MOOC, I hope you have learned and enjoyed as much as
I have.