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					Unleashing the power of brands
Strategic Brand Management by Roland Berger

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Roland Berger
Strategic Brand Development Group
Beijing, New York, Munich, July 2004




                                              1
 A brand strategy must result in a conclusive, focused and efficient
 marketing mix – and must be economically viable
 Strategic Brand Management by Roland Berger


   What is the "actual" position of a brand from the people's perspective?
   i.e. what are the brand's Actual Value Perception, Projection, Delimiter in the competitive environment


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


   What is the most effective brand strategy to reach the "ideal" brand position?
   i.e. the Road Map to Target Value Proposition, including mile stones from actual to target position of a brand


   What are corresponding measurements for the entire marketing mix?
   i.e. the detailed action plan for a consistent adaptation of the entire marketing mix


   What are the costs involved and what is the impact on the business plan?
   i.e. the cost of re-positioning and effect of brand strategy on revenues, margin and profitability

Source: Roland Berger- Strategic Brand Development Group                                                                    2
 The Roland Berger philosophy of brands reverses conventional
 wisdom

         Conventional wisdom                                                  Roland Berger philosophy


                               'Product'                                                       'Product'
                               Marketing mix                                                    Marketing mix
                                                            defines
                                                                               recruits
      influences                                                                                                        defines
                                is sold to


                                                                                                                              Inside
                                                                     Inside
              Consumer                          Brand                                People                     Brand


                                  boosts sales                                                defines
                                                                                                                    Outside
                                                           Outside


         Product-driven brand philosophy                                      People-driven brand philosophy
         Companies produce products …                                         People buy brands …

Source: Roland Berger- Strategic Brand Development Group                                                                               3
 The more a person's value system matches a brand's perceived value
 system, the more likely a decision to consume will be made

                                                                    Shared values
                                                              Buying decision
                      Moments                                   for or against a brand
                      of truth



               Personal                                                                                                        Brand value
           value system                      VS                                                         VP                     propositions

   Requirements, desires                                                                                                      Brand name, symbols
             Behaviour                                                                                                        Marketing mix (all 4 P's)
                                                                                                                              Brand user community



                                                  Perception                         Projection
                        The consumer 'tests' the projections/                        Consumer tries to understand the value proposition
                    promises of a brand and creates/adjusts                          of a brand as it 'appears' through the marketing mix
                    the brand‘s perception in his or her mind                        and the stereo type of the brand user community

                                                                 Shared values 1)
                                                         Consumer assesses compliance
                                                         of perceived value propositions
                                                         with his or her own value system

1) the more perceived value propositions of a brand match with a consumer‘s value system, the more likely is his or her buying of the brand
Source: Roland Berger, William Shakespeare                                                                                                            4
Paul's value system includes progressive performance orientations,
is not hedonistic, rejects altruism and shows some luxury tendencies

                                                    E-                       E                      E+

                                                                         Passion                  Thrill&Fun
                             'Paul'                 Fair
                                                                                                                          BLUE =
                                                                                                                           BLUE =
                                                                                                                    Consumer values
 ICP – Individual Consumer Profile
                                                                                                                     Consumer values
                                                                                    Vitality                        that the individual
                                                                                                                     that the individual
                        (ID 0335) Level 1                                                                              agrees with
                                                                                                                        agrees with
                                         Level 2                         Classic                                         i.e. 'likes'
                                                                                                                          i.e. 'likes'
                                      Disagreement       Nature                                Carefree
                          RED =
                           RED =                                                                                           Legend
                   Consumer values
                    Consumer values                             Tranquil          Clanning                                  Fair   Consumer value
                   that the individual            Purism                                           New&Cool
                    that the individual                                                                                     E-     Altruism
                     disagrees with
                     disagrees with                                                                                         R-     Minimalism
               i.e. 'dislikes, aversions'
                i.e. 'dislikes, aversions'                                                                                  E0     Traditional hedonism
                                                                                                                            R0     Traditional performance
                                                                                      Service                               E+     Progressive hedonism
                                                                                                       24/7                 R+     Progressive performance
                                                                                                      Protech                      Midfield area,
                                                            Smart              Quality                          Level 1            high degree of consensus
                     • 25 year old                         Shopping                                           Agreement
                                                                                                                                   Pro-Value
                                                                                                 Personal
                            • Male                                                               Efficiency                        Anti-Value, Demarcation
                          • Single
                                                                                Proven                                             Warning, too weak,
                • Medium income                                                                                                    should be more intense
                                                 Total Cost
             • Medium education                                                                   Customized                       Warning, too much,
                                                                                                                                   should be less intense
               • Fulltime working
                                                                                                                             !     Conflict with other value
           • 4 person household                     R-                       R                      R+

Source: Roland Berger - Strategic Brand Development Group, TNS Data (Germany, March 2002, n=1.500, Population 14-65 yrs., CATI)                                5
Pauls's value system includes progressive performance orientations,
is not hedonistic, rejects altruism and shows some luxury tendencies

                                                                                                  Pro-Service
                        Anti-Nature                                                      Pro-Quality

                                                    Anti-Classic              Anti-TotalCost
                                                                                                            Pro-Protech
                                                                                                                                      Pro-Customized

                                                E
                                                                                                                  +




                                                                                                                                  R

                                            –




Source: Roland Berger - Strategic Brand Development Group, TNS Data (Germany, March 2002, n=1.500, Population 14-65 yrs., CATI)                        6
Roland Berger has identified a number of typical value-demographic®
consumer segments in China – the Archetypes

Chinese Archetypes (Big City Metropolitan Area)



                                                                                 Traditionalists
                                                                                 Traditionalists
                                                                                            Progres.
                                                                                             Progres.
                                                                                  6%         Maximal.
                                                                                              Maximal.
                                                       Self-                             7%
                                                   centered
                                                                                                    Modern
                                                                                                    Modern
                                                               29                                   Performer
                                                                                                    Performer
                                                                                              8%


                                                                                               9%     Emotional.
                                                                                                      Emotional.

                                                               14
                                                                                         12
                                                    Traditional
                                                    Maximalists             13%                Minimalists

                                                                          Conformists




Source: Roland Berger - Strategic Brand Development Group, Gallup/ Data (China, Nov2001/Dec2003, n=5.600/3.800, Population yrs., CATI)   7
Maximalists and Modern Performer are the economically most relevant
segments for luxury goods in China

Chinese                   Progressive Traditional
                          Maximalists Maximalists
                                                             Modern
                                                            Performer     Self-centered     Traditional    Conformists      Emotional    Minimalists
Archetypes


Values




Size                            7%             14%              8%             29%              6%             13%              9%          12%
      Big City Standard
      Big City Standard
   Costal Area Standard
   Costal Area Standard         8%             10%             13%              9%             21%             11%               -           8%

Consumption                Very High       Very High         Medium         Medium            High             Low           Medium      Very Low
             Spending
             Spending
               Saving
               Saving      Very Low         Medium            High          Very Low        Very High          High           Low        Very High

Affinity1)                 Very high          High          Very high       Medium             High            Low             Low       Very Low
               Index 1
               Index 1          110            162              43            64            11                   1               7           6
               Index 2
               Index 2          46              63              90            43             -                   -               -           -
                                                                     Decreasing Economic Relevance
Economic
Relevance1)                     1.             2.               3.             4.               5.              6.              7.           8.


1.) for luxury goods in China
Source: Roland Berger - Strategic Brand Development Group, Gallup/ Data (China, Nov2001/Dec2003, n=5.600/3.800, Population yrs., CATI)                 8
While 'Paul' drives a BMW – he would probably not read the
National Geographic magazine


BMW                                                        'Paul'                                                    National Geographic
AVP (109 vs. 1.391; zmax=12.7)                             ICP (#0335; zmax= 5)                                      AVP (155 vs. 1.358; zmax=12.7)
      E-                  E                    E+               E-                  E                    E+               E-                  E                     E+
                       Passion
                       Passion                Thrill&Fun
                                              Thrill&Fun                         Passion
                                                                                 Passion                Thrill&Fun
                                                                                                        Thrill&Fun                          Passion
                                                                                                                                            Passion                Thrill&Fun
                                                                                                                                                                   Thrill&Fun
    Fair
    Fair                                                      Fair
                                                              Fair                                                      Fair
                                                                                                                        Fair
                                 Vitality
                                 Vitality                                                  Vitality
                                                                                           Vitality                                                   Vitality
                                                                                                                                                      Vitality
                       Classic
                       Classic              Carefree
                                            Carefree                             Classic
                                                                                 Classic              Carefree
                                                                                                      Carefree                              Classic
                                                                                                                                            Classic              Carefree
                                                                                                                                                                 Carefree
       Nature
       Nature                                                    Nature
                                                                 Nature                                                    Nature
                                                                                                                           Nature

               Tranquil
               Tranquil          Clanning
                                 Clanning New&Cool                       Tranquil
                                                                         Tranquil          Clanning
                                                                                           Clanning New&Cool                       Tranquil
                                                                                                                                   Tranquil           Clanning
                                                                                                                                                      Clanning New&Cool
                                          New&Cool                                                  New&Cool                                                   New&Cool
   Purism
   Purism                                                    Purism
                                                             Purism                                                     Purism
                                                                                                                        Purism

                                  Service
                                  Service                                                    Service
                                                                                             Service                                                    Service
                                                                                                                                                        Service
                                                  24/7
                                                   24/7                                                     24/7
                                                                                                             24/7                                                      24/7
                                                                                                                                                                        24/7
                                                 Protech
                                                 Protech                                                   Protech
                                                                                                           Protech                                                    Protech
                                                                                                                                                                      Protech
             Smart
             Smart        Quality
                          Quality                                      Smart
                                                                       Smart         Quality
                                                                                     Quality                                      Smart
                                                                                                                                  Smart         Quality
                                                                                                                                                Quality
            Shopping
            Shopping                                                  Shopping
                                                                      Shopping                                                   Shopping
                                                                                                                                 Shopping
                                             Personal
                                             Personal                                                  Personal
                                                                                                       Personal                                                   Personal
                                                                                                                                                                  Personal
                                             Efficiency
                                             Efficiency                                                Efficiency
                                                                                                       Efficiency                                                 Efficiency
                                                                                                                                                                  Efficiency
                           Proven
                           Proven                                                    Proven
                                                                                     Proven                                                     Proven
                                                                                                                                                Proven
  Total Cost
  Total Cost                                                Total Cost
                                                            Total Cost                                                Total Cost
                                                                                                                      Total Cost
                                             Customized
                                             Customized                                                Customized
                                                                                                       Customized                                                 Customized
                                                                                                                                                                  Customized
      R-                  R                    R+               R-                  R                    R+               R-                  R                     R+




Source: Roland Berger - Strategic Brand Development Group, TNS Data (Germany, March 2002, n=1.500, Population 14-65 yrs., CATI)                                                 9
The value projection of the Deutsche Bank combines progressive
performance and traditional hedonism in a maximalistic way
Deutsche Bank – A Passion to perform




  • Everyday you            • Aiming higher …         • Breaking new            • You demand more          • And Deutsche           • That is why the
    challenge the           • A capable person          ground …                  …                          Bank shares your         world's most
    status quo …              writes advanced         • A cinematographer       • A person is                passion, aiming          demanding clients
  • A person with his         math on a glass           gets an imagination       passionately playing       higher … pushing         trust Deutsche
    jacket over his           board                     of her next shooting      an invisible violin in     harder                   Bank …
    shoulder is looking     • A person with grey      • An engineer is            his messy office         • Airborne view to the   • Deutsche Bank, a
    to the event horizon      hair in a business        looking at a                                         Hi-tech building of      passion to perform!
    while traffic is          suit and sunglasses       miniature model                                      the Deutsche Bank      • A person runs fast
    passing in the            is dancing                of a new car                                         in Frankfurt,            through offices,
    background in fast        expressively on                                                                Germany                  takes two stairs at
    motion suggesting         a terrace                                                                    • People are engaged       once
    time stands still                                                                                        in an thorough
    while he is looking                                                                                      discussion, one        • People celebrating
    into the future                                                                                          appears to be very       success
                                                                                                             convincing




Source: Roland Berger - Strategic Brand Development Group, PVP Assessment Panel China                                                                       10
The Deutsche Bank tries to reverse it's traditional performance image
by actively addressing Progressive Maximalists and Modern Performer

                                       Deutsche Bank                                         A passion to perform
                                               PVP of Outlet                                 PVP of Advertising
 Attracted




0
 Distracted




                                                            Decreasing Economic Relevance
                 PMA            TMA              MPE              SEL             TRA             CON               EMO          MIN
              Progressive    Traditional        Modern       Self-centered     Traditional     Conformists        Emotional   Minimalists
              Maximalists    Maximalists       Performer
Source: Roland Berger - Strategic Brand Development Group, Simulation                                                                       11
Roland Berger has developed a unique 'platform' – the rb Profiler –
for the entire strategic brand development process


   Brand Sway                                  Actual                    Target                                   Strategy                   Execution
      Past Projection                   Value Perception          Value Proposition                            Road map to Target          Detailed Action Plan

                                           Diagnosis tool               Strategy tool                           Controlling tool
 People                                           E
                                                                        "Battle Field"
                                                                                                                       E                       Product
 • Market driver, trends                                                    5                  4                                             Features & Design
                                                                                                   3
                                                                            B        TVP
                                                                  6
 Marketing Mix                                                                                         E                                          Price
 • Product, Packaging                                                   A                                                                   Calculation scheme
                                    –                        +                                             –                       +
 • Price                                                          AVP
 • Place, POS
 • Promotion, Pull/ Push                  Q!                                        PVP
                                                                                                       2
                                                                                                                                                 Place
                                                                  7         C                                                          Retail channel & Point of Sales
                                                                                           D           1
                                                                                8
 Competition                                      R                                                                    R
                                                                                                                                             Promotion
                                                                      Archetype Segments                                                Campaign & Media channel
                                                                      Brand Position
                                                                      Competitor's Positions

                                                            Strategy Step 1 Step 2 Step 3 + -
                                                                       Step 1 Step 2 Step 3 + -
      Translate brand sway into                             Option I                                                Translate brand strategy into
        'rb Profiler-Language'                              Option II                                                      Marketing-Mix
                                                            Option III



Source: Roland Berger - Strategic Brand Development Group                                                                                                          12
Roland Berger's Strategic Brand Development Group consists of highly
skilled professionals striving to solve branding issues around the globe
• An interdisciplinary team of 25 seasoned experts dedicated to Strategic Brand
  Management and Advanced Consumer Research; extended team accounts
  for 55 strategists
• A team of rich diversity and capability, ranging from philosophy and psychology to
  statistical science and strategic planning … combining, bridging and integrating
  qualitative and quantitative aspects of the same matter
• A full scale statistical science & processing center
• Spending considerable amount of revenues on ongoing Research & Development
• Global reach with projects in Europe, China, Japan, Brazil, Mexico, United States
• Serving world class clients such as Bayer, Clinique, Coca-Cola, Estée Lauder,
  General Motors, Mercedes-Benz, MasterCard, Vodafone, Marks & Spencer
• Successfully completed more than 80 brand strategy projects in the last 5 years
• Publishing in leading management magazines such as Harvard Business Review
• Operating from New York, Beijing and Munich

Source: Roland Berger - Strategic Brand Development Group                              13
Some of the most dynamic and successful corporations worldwide
use Strategic Brand Management by Roland Berger




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