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Unlocking the Secrets of Successful Brand Building by xiuliliaofz


									Study Summary              Second Annual             Americas                           September 2006
                           Breakaway Brands Study

Unlocking the Secrets of
Successful Brand Building
The Second Annual Breakaway Brands® Valuation Study
FORTUNE magazine, in partnership with                The emphasis now is on seeing
Landor Associates, recently published a list of      the market from these groups’
the Top Ten Breakaway Brands for 2006. Now in        viewpoints. What are their
its second year, this unique study measures the      priorities and needs? Does the
impact of inspired and well-managed brands on        product or service being offered
the corporate bottom line.                           truly meet those needs? How can
                                                     it be improved in ways that are
Based on quantitative consumer perception            proprietary to the brand and hard
data paired with in-depth financial analysis of      for others to copy? Of all the
brand performance over a three-year period, the      customer-focused strategies and
Breakaway Brands Study provides an objective basis   tactics employed by this year’s
for identifying the top performing brands in the     Breakaway Brands winners,
United States, while providing insights into how     three trends emerged:
they’ve become so successful.
                                                     • Building on a Foundation of Trust                                     Landor’s second annual
This annual study is conducted by Landor Associates, • Cultivating a Brand Community                                         Breakaway Brands Study ran
one of the world’s leading strategic branding and    • Empowering Customers With Knowledge                                   in the September 18, 2006 issue
design consultancies. Landor defines Breakaway                                                                               of FORTUNE magazine
Brands as those that have distinguished themselves    More than half of the 2006 Breakaway Brands
from their competition in the minds of consumers      exhibited all three of these best-practice
and consequently, are driving top-line growth and     brand behaviors.
delivering superior financial results.
                                                      The           Breakaway Brands
Looking to dig deeper into the Whys and Hows
                                                      BRAND                                 BRAND STRENGTH*                    VALUE GAINED
behind these brand transformation stories, Landor
                                                                                        2002         2005        GAIN
set out to investigate what these brands have been
doing that might account for their success.           iPod – Consumer Electronics         37           84          47                $4.5 Billion

                                                      Viking – Kitchen Appliances         37           75          38            $147.0 Million
What we observed was a pronounced shift in the
thinking of brand owners and managers. In the         Converse – Athletic Shoes           47           76          29            $298.0 Million
past, the language of branding has drawn heavily
                                                      Robitussin – Cough & Cold           56           78          22               $51.0 Million
on metaphors of construction, architecture and
property development. For example, we frequently      Best Buy – Electronics Retailer     62           83          21                $1.4 Billion
hear about brand platforms and brand architecture
                                                      Kohl’s – Department Store           55           74          19                $1.2 Billion
as part of the initial process of brand building.
Today, with the basics of branding being more         French’s – Condiments               75           92          17               $21.0 Million
established, we see a natural progression from
                                                      Geico – Insurance                   21           37          16                $4.2 Billion
internal questions of structure and positioning
to a much sharper focus on people: customers,         Dove – Personal Care                78           93          15                $1.2 Billion
employees and intermediaries such as agents and
                                                      eBay – Online Auction               90           96           6               $22.5 Billion
distributors. Collectively, they inhabit the space
in which a brand operates.                                                               * Brand strength is expressed as a percentile rank score.

                                                      Five Brands to Watch
                                                      BRAND                                             BRAND STRENGTH*
                                                                                                    2004         2005        GAIN

                                                      Curves – Fitness                                 10          54          44
Study Summary               Second Annual                Americas                    September 2006
page two                    Breakaway Brands Study

Building on a Foundation of Trust
In an effort to grow business, more and more brands      and other humorous campaigns. The gecko is seen
are rethinking the context of their operating and        on TV in millions of American homes daily and on
competitive environments, and expanding into new         innumerable highway billboards. While younger
products, services and experiences.                      audiences might not be in the market for Geico’s
                                                         insurance products just yet, they’re already enam-     Innovative package design can
Too often though, these risky endeavors fail because     ored with its “spokeslizard,” and this affection is    help your brand break away from
consumers do not trust the brand enough to move          likely to translate into brand trust down the road.    copycats while solving functional
with it into new category spaces. The key is to firmly                                                          and emotional needs for the
establish trust with your core consumers so that they    Best Buy:                                              consumer at the same time.
in turn will give your brand the benefit of the doubt    Marketing is a science
when it moves into new spaces.                           Faced with price competition from giants like
                                                         Wal-Mart, Best Buy recognized that the best way
French’s:                                                to break away from its competition was to deliver
Face lifts should be functional                          superior in-store and in-home experiences for          Clever communications can
Some brands such as French’s can draw on over            customers. This strategy led to the “Customer          serve as a regular reminder of your
a century of history: its red-capped yellow bottle       Centricity” campaign: both an internal engagement      brand’s positioning for internal
of mustard has become an iconic symbol for the           program to ensure employees deliver the brand          and external audiences, while
popular hot dog condiment. Despite French’s status       promise and a store segmentation strategy based        keeping them engaged.
as a category leader, however, parent company            on different customer types. This helps to make
Reckitt Benckinser recognized an opportunity to          certain that every customer’s question is answered
wake up both the brand and the stagnant mustard          and every need met. Paired with the acquisition
category. First, a packaging overhaul made copycat       of Geek Squad to bring a superior tech experience
design too expensive for competitors to follow suit.     into homes, the campaign has helped consumers
Then an extensive PR campaign worked in tandem           trust the Best Buy brand when they are faced
with a re-designed, recipe-friendly and contest-         with complex and often-confusing electronics           Fully understand your customer’s
promotional Web site to reconnect French’s with          purchase choices.                                      unmet needs, then apply strategic
its Americana roots and re-invigorate the brand in                                                              discipline to deliver highly relevant
the minds of consumers. Empowered by consumers’          Even eBay, with less than 12 years of company          brand experiences to your clearly
trust, French’s found itself in an excellent position    history under its belt has successfully managed        defined target consumer segments.
to introduce new products and variants and expand        to establish trust by diligently proving its commit-
itself inside of its category.                           ment to online safety. By ensuring the security of
                                                         customers’ online transactions through the acquisi-
 Geico:                                                  tion of PayPal, eBay has shown that it delivers on
 Make your promise memorable                             its promises through action. Few brand behaviors
“Younger” brands face a slightly different               could possibly be more effective at establishing
 challenge when trying to build consumer trust.          trust and guaranteeing loyalty. No matter how it
 Geico (originally an acronym for Government             is achieved, trust is a crucial step in the customer
 Employee Insurance Company) has been around             connection process.
 since 1936, but it was largely unknown to the
 general public before the 1996 Berkshire Hathaway
 acquisition gave it the financial power to leverage
 large-scale marketing efforts. In 2000, it began
 to establish real consumer awareness when it
 introduced the now wildly popular Geico gecko
Cultivating a Brand Community
Today, leadership brands are capitalizing on the        Kohl’s:
basic human need for belonging by sowing the            Leverage the power of partnerships
seeds for brand communities and watching them           Thanks to its diligent consumer research efforts,
grow. From company Web sites to personal blogs,         Kohl’s discovered critical insights into its target
the Internet provides fertile soil for these brand      audience (active middle-income moms, ages 25-40)
communities to take root. Others are sprouting          as it planned for its national expansion. For one, this   If your users are emotionally
up organically through buzz and word of mouth           group not only proactively seeks out a good deal to       connected with your brand, let them
among early adopters and aspirational users.            stretch their dollars, but because they grew up with      tell your story; they offer sincerity
                                                        brands, they equate brand names with quality. Now         that’s impossible to replicate.
Whenever possible companies should let enthu–           Kohl’s advertising focuses less on the brand (and its
siastic consumers borrow the brand and shape           “Expect Great Things” promise) and more on the
it to express a collective community voice. These       exclusive brands it offers. The other key learning
customers offer a level of sincerity and energy that    was that these active moms pass along information
is impossible to replicate by traditional marketing.    five times more frequently than other moms,
                                                        creating a unique opportunity for organic buzz            Reinforce consumers’ trust in your
Converse:                                               around sales and new brand selections. By working         brand by providing them with tools
Co-create with your consumers                           hard to cater to this key consumer community,             to help them establish a community
On its Web site, Converse lets its consumers custom-    Kohl’s has been able to drive its growth through          with other excited users.
design not only their own shoes (parent company         its own brand and its strategic brand partnerships.
Nike does the same), but also their own commer-
cials, some of which end up as national TV spots       iPod:
(a major accomplishment for a new generation           Great brands never rest
of aspiring directors and designers). By allowing      Perhaps the most prolific brand community
customers to co-create the brand expression,           represented by this year’s Breakaway Brands                When your target audience values
Converse sets the stage for a community of brand-      revolves around little white “earbuds” and a               brand name products, strategic
championing trendsetters to be born. Today the         promise of self-expression and easy-to-transport           alliances can be your greatest
brand has achieved a dialogue with its customers       personal music collections. Making the list for            marketing ally.
that is both meaningful and constructive.              a second year in a row, iPod (and its community
                                                       of brand enthusiasts) is everywhere you look today.
eBay:                                                  By continuously innovating to offer entry-level
Consumers crave community                              options for new users and keep early adopters
The online auction pioneer eBay similarly uses         coming back for the newest technology, the
the Internet as a platform for community, with every   community of iPod lovers continues to prosper.
consumer-to-consumer transaction ensconced in the
eBay brand and its promises of self-empowerment
and connection. Its phenomenal success at bringing                                                                Answer a universally unmet need,
buyers and sellers together has certainly fueled                                                                  constantly innovate, stay accessible
its growth. However, eBay has done more than                                                                      and allow your brand to evolve
establish an online marketplace: it has also created                                                              from a status symbol into an
one of the largest and most significant virtual                                                                   enduring icon.
communities on the planet.
  Study Summary                  Second Annual                 Americas                       September 2006
  page four                      Breakaway Brands Study

 Empowering Customers With Knowledge
  Rather than bombarding consumers with                        generation of aspirational customers, Viking
  messaging and empty promises that are easily                 introduced a line of smaller kitchen appliances
  copied by competitors, this year’s Breakaway Brands          including blenders and toaster ovens to give them
  are arming their consumers with easily accessible            access to the brand despite their smaller budgets.    Solve even a simple problem that
  and acutely relevant information, and none too soon.         It went on to create a global community of culinary   consumers don’t recognize, and
  With 73 percent of Americans using the Internet on           enthusiasts composed of Viking customers, major-      you’ll earn brand loyalty in return.
  a regular basis¹, a wealth of knowledge is available         appliance distributors, high-end dealers, home
  at consumers’ fingertips. By proactively educating           decorators and builders by sharing their knowledge
  customers, brands can better manage their images,            of the world of food.
  and get valuable feedback in return.
                                                               Dove:                                                 Make your brand more relevant
  Robitussin:                                                  Make hard work look easy                              by rethinking the context of your
  Your customer’s problems are never too small                 Clearly Dove has received ample praise from           business environment to give
  Cluttered spaces like the cough-and-cold category            the business world for successfully building a        consumers greater opportunity
  are often the hardest to break away from. Because            community around its revitalized iconic brand         to experience your brand.
  of this, “mother trusted” Robitussin had a significant       all over the globe. However, perhaps the most
  challenge to overcome. Today its re-designed                 strategically unique decision that Dove made
  packaging aids self-diagnosis thanks to a highly             following the formation of its global brand team
  disciplined packaging system that highlights key             was to play back its research findings to empower
  information elements for the customer by using               women. When Unilever decided to undertake
  a combination of color-coding and symptom                    a repositioning of the Dove brand, the brand          Consumers will align themselves
  descriptions. This is supported by a Web site that           team started with diligent research that unearthed    with your brand if you can
  enables the customer to see the local incidence of           a nearly universal emotional truth among today’s      communicate emotional insight
  cough-and-cold ailments (and the right Robitussin            modern woman: she doesn’t think that she is,          with simplicity.
  formula to treat them) by entering their ZIP Code.           or could be, “beautiful” because of unrealistic
  The TV advertising, using the phrase “There’s a              contemporary standards of beauty. From that
  Robitussin with your name on it,” is aligned with            point forward the brand became a platform for
  this same strategy to enable self-diagnosis.                 education about these preconceptions of beauty,
                                                               and their negative impact on young girls, rather
  Viking:                                                      than just another campaign about soap.
  Innovate your mindset
  Viking, the pioneer of chef-quality large kitchen
  appliances, recognized that its brand is about more
  than just top-of-the-line stoves and ranges: it is
  about delivering the ultimate cooking experience.
  Driven by this insight, Viking Hospitality Group was
  born, with its own hotel, restaurant, spa and cooking
  school at the Greenwood, Mississippi headquarters.
  Viking decided to move farther afield when it began
  offering culinary tours and cruises around the world
  for foodies and novice cooks alike. For the younger

1 Pew Internet and American Life Project, Internet Penetration and Impact Report, 26 April 2006
                                                         The           Breakaway Brands
Summary                                                  BRAND                                 BRAND STRENGTH*                     VALUE GAINED
                                                                                            2002        2005        GAIN

Speaking recently at the Association of National        In addition to the Top Ten Breakaway Brands this
                                                         iPod – Consumer Electronics   37       84        47                               $4.5 Billion
Advertisers 2006 conference in Orlando, A. G. Lafley,   year, five “brands to watch for” were also identified.
                                                         Viking – Kitchen Appliances   37       75        38                         $147.0 Million
CEO of Procter & Gamble said, “The power is with        These brands showed the most significant improve-
the consumer…. Consumers are beginning in a very        ment in brand strength over a47
                                                         Converse – Athletic Shoes               period, 29
                                                                                        one-year76                                   $298.0 Million
real sense to own our brands and participate in their   and as such are well on their way to achieving
                                                         Robitussin – Cough & Cold     56       78        22                            $51.0 Million
creation. We need to learn to begin to let go.”         breakaway status in their categories in the years
                                                        to come. –The challenge for these brands will be 21
                                                         Best Buy Electronics Retailer 62       83                                         $1.4 Billion
 Stephen F. Quinn, Senior Vice President for            find the unique mix of brand-led business strategy
                                                         Kohl’s – Department Store     55       74        19                               $1.2 Billion
 Marketing at Wal-Mart, echoed Lafley’s words:          and customer empowerment to foster a productive
“Today the customer is in charge and whoever                                            and
                                                        dialogue–between their brands75 consumers. 17
                                                         French’s Condiments                    92                                      $21.0 Million
 is best at putting the customer in charge makes
                                                         Geico – Insurance                    21          37          16                   $4.2 Billion
 all the money.”                                        That’s how this year’s Breakaway Brands are
                                                         Dove to the top of
                                                        rising – Personal Care their game. Other smart brand
                                                                                          78         93           15   $1.2 Billion
Even for large global organizations such as BP,         managers should now seriously consider how these
                                                         eBay – Online Auction            90         96            6  $22.5 Billion
the shift is happening. Once concentrating on           best-practice brand behaviors could help their own
products and production, companies that employ          brands transcend their categories and break away as a percentile rank score.
                                                                                        * Brand strength is expressed
several hundred thousand people are refocusing          from the competition.
their resources to understand the needs of their
customers, to trace the way value is added along the     Five Brands to Watch
supply chain, and to create products and services
                                                         BRAND                                             BRAND STRENGTH*
packaged as solutions. The result is the creation of
                                                                                                        2004         2005        GAIN
brand preference for them over their competitors.
                                                         Curves – Fitness                                 10          54           44
Although Landor’s study concentrated on the
                                                         Tampico – Beverages                              20          50           30
U.S. consumer market, we believe the insights
about Breakaway Brands are truly applicable              Blue from American Express – Financial             9         37           28
industry-by-industry and client-by-client
                                                         Cole Haan – Shoes/Accessories                    55          77           22
regardless of category or location.
                                                         Hennessey – Cognac                               36          51           15

                                                                               * Brand strength is expressed as a percentile rank score.
Study Summary                 Second Annual               Americas                           September 2006
page six                      Breakaway Brands Study

Frequently Asked Questions
What is Landor’s Breakaway Brands Study about?
The Landor Breakaway Brands Study identifies a
list of ten brands every year that have grown and

                                                               Di erentiation
been transformed through excellence in brand
building. These are brands that have achieved the

most meaningful improvements in brand health

and subsequently in business value. Because
investments in brand building take time to be
realized, the study looks at the growth of brands
over a three-year period.
                                                            The brand’s point     How appropriate             How you regard           An intimate under-
                                                            of di erence.         is the brand to you.        the brand.               standing of the brand.
The list is constructed using BrandAsset®  Valuator
                                                            Relates to margins.   Relates to market           Relates to perception.   Relates to consumer
research, a global study that has continuously                                    penetration.                                         experience.
tracked brand health for more than a decade.
To demonstrate the importance of brand as a
determinant of financial performance, we then             • Brands that exhibited “pogo stick” patterns in                   Essential Dimensions:
apply the BrandEconomics® methodology to                    brand strength (up 2002-03, down 2003-04, up                     the Four Pillars
each brand on the list and calculate the change             2004-05) were eliminated as we are looking for                   Brands are built in a very specific
in business value that can be traced to the change          sustained brand strength performance over time.                  progression, as demonstrated above
in brand health. For each brand, we also list the                                                                            by the four essential dimensions of
actions taken to create change in brand strength           How is this study different from others?                          the BrandAsset® Valuator frame-
and calculate the resulting payoff to shareholders         The Breakaway Brands Study’s greatest strengths:                  work. The Breakaway Brands Study
in brand-driven increases in market-capitalization.       • Explicitly links brand activity to business impact.              ranking is based primarily on change
                                                          • Focuses on the overall change in business value,                 in brand strength, a composite
 What is the methodology for Breakaway Brands?              not on a single brand number.                                    function of Differentiation and
 We looked at all 2,500 brands in BrandAsset              • It’s not about the biggest brands, but about the                 Relevance, and the leading indicator
 Valuator’s U.S. database to determine the ten              brands that drive the biggest business performance.              of brand and business success.
 brands that had the most significant gains in            • By identifying the actions taken that build brand
 Brand Strength over a three-year time period               health, our cases studies are instructive.
 (2002 to 2005). Some caveats:                            • Our methodology is objective, being grounded in
• Brands had to have a research sample base size            a globally respected and referenced consumer
  of at least 500 in BrandAsset Valuator. (Samples          survey (BrandAsset Valuator) and economic
  smaller than this make the results subject to too         framework (EVA ).
  much error.)                                            • Our survey goes beyond formulas to link
• Brands had to have a minimum threshold for                brand power to quantitatively analyzed
  percentile scores in the Esteem and Knowledge             consumer perceptions.
  categories to ensure the exclusion of regional and
  niche brands.                                           What about the big guys, such as Coca-Cola?
• Non-profit brands were excluded because we are          Why aren’t they on the list?
  looking at the impact of brand on business value.       Our study focused on those brands that drove
• Media brands were eliminated from the set as they       the biggest increase in business value through
  exhibit different branding patterns than other          improvements in brand performance between
  segments. They have exceptionally high brand            2002 and 2005. Our ten Breakaway Brands
  strength levels for their overall levels of maturity,   outperformed every brand not on the list.
  making it difficult to compare them objectively
  with other brands.
Why aren’t there any non-U.S. brands in
the study?                                                                 Brand Strength
The study is limited to domestic brands in the                         Di erentiation & Relevance
BrandAsset Valuator database for consistency,
as BrandAsset Valuator studies outside the
United States are only conducted every two years.                  Current                   Opportunity
Once the study builds more momentum, its range               Sales & Pro tability              for Future
and scope will be expanded. Also, while the study                                         Sales & Pro tability
is comprehensive, it is restricted to brands in the                                                                  Correlating Brand Strength
BrandAsset Valuator database and all BrandAsset                                                                      to Value
Valuator limitations apply.                                                                                          Business value is made up of
                                                                  Current                       Future               current operating value and future
What do the ten brands have in common?                        Operations Value               Growth Value            growth potential. Brand strength –
What are their differences?                                                                                          a function of Differentiation and
This list represents an excellent cross section of                                                                   Relevance – impacts both of these
brands, in many categories that appeal to a wide                                                                     dimensions. Differentiated brands
variety of audiences. The list also has brands of                                                                    command greater premiums and
various ages – there are well-known, established                                                                     thus improve current profitability.
brands like Robitussin and Viking, as well as newer                                                                  Relevant brands have broader
ones like eBay and iPod. Additionally, you’ll see                       Total Business Value                         sales footprints. Improvements
that some are mono-brands like Converse and                 Future Growth Value + Current Operations Value           in current sales and profitability
Best Buy, and others are portfolio brands like                                                                       directly impact current operations
Dove and French’s.                                                                                                   value. Brand strength also allows
                                                                                                                     a brand greater leverage in
Can you really tie brand performance with                  What is the point of brand valuation?                     expanding into new categories,
financial performance?                                     From the Landor/BrandEconomics perspective,               new geographies and new
Yes. BrandEconomics research demonstrates that             the purpose of brand valuation is not to generate a       businesses, thus having an effect
a large part of the intangible value of companies         “box number.” Rather, it is far more useful to show        on future growth potential.
in certain sectors can be explained by the health          why a brand may have fallen in value, lag behind its
of their brands as measured by BrandAsset Valuator.        competitors or not realize its potential. This provides
For a detailed explanation of the econometric              pragmatic insight and direction (through BrandAsset
analysis findings, please see their white paper            Valuator) on how to remedy such situations. Equally
entitled “Bringing New Clarity to Brand                    important, the BrandEconomics data shows the
Management and Strategy.”                                  payoff in shareholder value from improvement
                                                           in brand health. This can be extremely useful in
What is brand value?                                       setting brand portfolio strategy (which brands
In purely theoretical terms, it is the present value       to invest in, which to manage for cash) and in
of all future profits that the brand owner will realize    persuading finance departments that a proposed
because of the brand’s contribution to sales and           investment in brand building will have positive,
margins. Simply put, it is the financial benefit from      measurable returns for shareholders.
investment in brand, or “Brand ROI .”
Study Summary   Second Annual            Americas                      September 2006
page eight      Breakaway Brands Study

                                                                                        OFFICES   |   AMERICAS
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                                         The professionals at Landor Associates                   |   MIDDLE EAST
                                         approach branding from a unique point                        D ubai
                                         of view. They take inspiration from the
                                         company’s founder, Walter Landor, who                    |   EUROPE
                                         in  purchased a retired ferryboat                        G eneva
                                         called the Klamath and repurposed it                         Hamburg
                                         as Landor’s headquarters.                                    Istanbul
                                         Today, the Klamath remains a symbol                          M adr id
                                         of transformative thinking. It represents                    M ilan
                                         Landor’s determination to look at the                        Oslo
                                         world, our clients and their particular                      Par is
                                         branding challenges with fresh eyes.

                                         We bring this same philosophy to                             w w w.lan d o r. co m
                                         understanding the branding industry
                                         and the market in general. It is what sets                   1.888.2L A N D O R
                                         Landor apart and makes us the most
                                         sought after authority on branding.                          more_in fo @ l a n d o r. co m

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