Dr. Brad Davis Laurier Chair in Brand Communication

1. Dr. Brad DavisLaurier Chair in Brand Communication Greater Kitchener Waterloo Chamber of Commerce Leadership Series Thursday, November 3, 2011 MARKETING YOUR PRODUCT INTERNATIONALLY

2. The Marketing Communication Educational Trust (MCET) is a registered not-for-profit public foundation created by industry leaders to conduct the private sector fundraising for Canada's first Chair in Brand Communication and new degree program at the School of Business & Economics at Wilfrid Laurier University. • Laurier Chair in Brand Communication established summer 2011 supported by $1.9 million from 45 leading Canadian marketing organizations • Our efforts were supported by the conclusions of a report in 2006 by Interbrand on the state of Canadian branding

3. Marketing Communication Educational Trust (MCET) Donors adbeastACLC Advertising [now CP&B]Air Miles (Loyalty Management Group)BBDO/OMDCadbury Adams CanadaCanWest Global Communication Corp.Capital CCara Operations LimitedCarlson Marketing Group Canada Ltd.Chad Management GroupCHUM TelevisionConAgra Foods Canada Inc.Corus Entertainment GroupCossette Communication GroupCTVglobemediaCundari GroupDare FoodsDDB Canada/OMDDraft FCB GroupDue North GJP (now Blammo Worldwide) John St. JWT Canada Institute of Communication AgenciesLeo Burnett Company Ltd./StarcomMaclaren McCann MBS/The Media Company/GreyMichael WellingMolson CanadaPattison OutdoorPepsi CanadaPublicis CanadaQuarry Integrated Communications Inc.Rogers Communications Inc.Rupert BrendonSharpe Blackmore Euro RSCGStandard Radio Inc. [now Astral]TaxiTBWA/OMDTerham Management Consultants Ltd.Tim HortonsUnilever Canada LtdVenture CommunicationYoung & Rubicam Advertising CanadaZig [now CP&B]

4. Interbrand 2006 Report on Canada Among the reports conclusions were: • “Brand management complacency is making Canadian brands irrelevant internationally…” • “Canadian brands have not articulated what it means to be Canadian…” • “Canadian business leaders need to understand the value found in intangibles…. Intangible assets [have become] the dominant source of value.’’

5. The ‘brand’ is…. • “a perception that lives primarily in the mind of the customer.” • “the sum of a consumers experiences with a product and/or organization.” • “the creation of a mental structure that helps consumers organize their knowledge about products and services…” • “It’s not the Golden Arches. It’s how you feel when you see the Golden Arches.”

6. Performance, Quality & Functionality still essential • NOT implying performance, quality, functionality were unimportant..... still essential requirements • But, does not provide sustainable competitive advantage • Estimate: product innovation becomes industry standard within 6 months • What is the value of the i ? • According to Interbrand, approximately $33.4 billion • “Competing successfully in the 21st century will require more than just outstanding product and quality functions. Intangibles such as corporate image and brand image will be crucial factors for achieving a competitive edge.” Jong Yong Yun, CEO Samsung

7. Interbrand 2006 Report on Canada...... • “A lack of investment in branding education and practice has meant that Canada suffers from a follower mentality, leaving brand leadership to companies from other nations…. Post-secondary institutions in Canada must construct uniquely Canadian curricula in business and branding.” • “The post-secondary education system has not developed uniquely Canadian curricula that prepare future business leaders to focus on intangible value and brand development and management.” • “An overall lack of investment in branding practice causes Canada to be reactive rather than a leader in effective marketing communications.”

8. Remarks by the Chair, spring 2011 “It is more important than ever that organizations have a deep rooted and organic understanding of their brand so they will be able to generate and sustain authentic engagement with consumers. Our goal is to produce graduates who can articulate that understanding and know precisely what is needed to engage consumers in brand-directed interactions. These graduates will be the architects of future Canadian brands. Their success will determine our ability to stay competitive not just internationally but at home.”

9. What does “international” mean today? “Branding” is not a choice. “Social Net” is not a choice. “International” is not a choice. Your choices.... • To manage the brand or let consumers manage it. • You are already on the Social Net – are you going to do anything about it? • You are already in the “international market”. - are you competing against foreign brands? - are you dealing with cross-cultural consumers? • Are you thinking globally?

10. “A Canadian brand can no longer stick its head in the sand in its home market and expect to flourish and be left in peace. If a brand does not actively seek to compete globally, global competitors will seek it out either as an acquisition target or a competitor.” Interbrand Best Canadian Brands 2010

11. Country of Origin influence • Influences consumers, industrial and retail buyers, business executives and foreign investors considering expansion • Provides cue of quality & a promise of performance • Provides status • Daewoo cars with “British handling, Italian styling and German engineering” • Patriotic appeals may generate positive feelings… but don’t necessarily lead to purchases if superior foreign brands are available

12. Russian vodka • Swiss watches • Japanese electronics • German engineering • Italian suits • French wines • Belgian chocolates • British steel • Scotch whiskey • American movies • Canadian _______ What does “Made in Canada” mean? How do we define brand Canada?

13. Interbrand 2010 • Few Canadian brands have “well developed brand recognition outside Canada” • Blackberry & Thomson great exceptions • Blackberries carried in over 160 countries • Thomson Reuters in over 100 countries • Next wave: Lululemon, LaSenza, Imax, Tim Horton’s, TD, RBC, BMO

14. Bi-directional influence • Country of Origin supports the brand but a quality brand helps build CoO • EG. IKEA’s contribution to the Swedish brand greater than Sweden’s contribution to the IKEA brand • the image of brand Japan changed because Japanese products improved • Research suggestions: positive country of origin brand strongly influenced by the success of individual brands

15. Interbrand Study (2010) • Top 25 Canadian brands gained $14.9 billion, up 35% since 2008 • Only 2 dropped from list of 2008 • Vs. Top 25 international brands lost 2.5% over that same period • 14 of top 25 dropped from list • But, to qualify for the Interbrand 100 you must generate 1/3 revenues from outside - 14 of top 25 Canadian brands operate outside North America • “Canadian brands remain domestically focused, selling their wares and telling their stories primarily within our their borders.”

16. Can we provide suggestions? • Think of yourself as a GLOBAL brand from the start. - EG. selection of brand names and visual identity 2. Remember it’s more about CROSS CULTURE than cross border. - Legal, accounting & finance issues handled by specialists - For marketing, it’s about understanding the culture(s) 3. Look for a “universal human condition” - you must adapt to local culture, but some human truths cross borders - EG. we are a social species

17. “Any brand seeking to succeed and to be most valuable in the future will need to think and behave like a leader: at the basic levels of product and service distribution, and at the more emotional levels of creativity, values and core social contribution.” Interbrand study (2006) - recent research: most effective way to influence national image is by focusing on the people of the country: education, standard of living, technical skills and creativity rather infrastructure or economic conditions

18. Suggestions? 4. You don’t need a large marketing BUDGET - 2.0 branding focuses on slower building of solid foundation rather than old “star” system of branding 5. Build solid Marketing practices before - consumer insights, flexible positioning, brand experiences, continuous product & service improvement..... Fundamentals of good marketing are universal • Think globally but deliver locally - “core aspects” of the brand need to be protected and standardization; but, local influence is where customer engagement must happen

19. “Globalize those elements for which there is a resulting payoff in cost or impact and allow the other elements of brand equity to be customized to local markets.” David Aaker

20. Just a couple more suggestions? 7. Take a leadership position - consumers looking to brands lead change: social responsibility, environmentalism, corporate sustainability practices .... - recognize both the social and economic value of brands “Brands need better and socially broader measures of success. Corporate social responsibility should be about genuinely solving problems, not just about brand reputation management.” Interbrand (2008) 8. Include Canada in your brand; invest in CoO building - include Canada in your brand story – invest in Made in Canada as a asset - building our Country of Origin strength will yield long term returns at home and abroad

21. In Conclusion The environment is more favourable for brand innovation and development. Scale and size are becoming obstacles rather than necessities. Agility; innovativeness; speed of response; social responsibility and leadership; and consumer engagement now drive success. The playing field is levelling. It is time for Canadian brands to seek to “win the podium”. Our success in the Vancouver Olympics began with a change in attitude. I believe we are beginning the process of producing a generation of Canadian marketers and entrepreneurs with the same drive for global branding gold.

22. Thank you for your time this morning!