Brand The Holy Grail of Advertising

1. BrandThe Holy Grail of Advertising Mktg 340 Lecture 2

2. What do these companies have in common? • Coca Cola • IBM • Microsoft • GE • Nokia

3. Top 5 Global Brands of 2009, according to Interbrand

4. These? • Coca Cola • Microsoft • IBM • GE • Nokia

5. Top 5 brands in 2001, according to Interbrand

6. What’s a brand? • 'Customers must recognize that you stand for something.' - Howard Schultz, Starbucks • 'Brands are the express checkout for people living their lives at ever increasing speed.' – Brandweek • 'Products are made in the factory, but brands are created in the mind.' - Walter Landor

7. Tangible elements The product The retail environment Factories Advertising and marketing communications Name and logo Packaging Employees/Service Intangible elements Corporate, personnel and environmental policies Values of corporation Culture and country issues Media reports/publicity Personality and attitude BrandWhat the consumer believes the product delivers

8. Brand identity vs. brand equity • Brand identity • The elements of the brand promise as communicated through logos, colors, packaging, retail channel, philosophy, jingles, personality, attitude, management, corporate culture, etc. • Brand equity • The value delivered back to the company based on the product’s market domination and the consumers’ belief that the promise is delivered

9. Best Global Brands 2009 http://www.businessweek.com/interactive_reports/best_global_brands_2009.html • 1. Coca-Cola $68,734 ($m) • 2. IBM $60,211 ($m) • 3. Microsoft $56,647 ($m) • 4. GE $47,777 ($m) • 5. Nokia $34,864 ($m) • ….based on what?

10. Brand metrics: what’s a brand worth? • Interbrand uses • Financial analysis of the global corporation, determination of earnings based on brand preference, likelihood of future earnings based on brand stability and consumer choice • Alix Partners uses: • Level of awareness, consumer trust

11. Why brand? • Differentiation in a crowded field • The average Fortune 1000 company manages 240 brands • The number of brands in a company portfolio has increased • 76% of Fortune 1000 companies manage more than 100 brands

12. Consumers Assurance of product quality Confidence of category Reduces uncertainty Psychological and social acceptance Simplifies choice Company Easier new product introduction Can charge a higher price Customer loyalty Increased purchases Positive word of mouth Resists competition better Attract better employees Positive attention from financial analysts More power with channel Brand Benefits for consumers and firms

13. Brand image as a strategic advantage • Built on the strengths of the company (“salient features”) • Nike = athletic performance • Apple = stylish and advanced electronics • Viewed through the consumers eyes • Informs firm decisions about communications, product development, distribution (is the decision true to the brand image?) • May require adjustment or total change

14. Positioning the brand • Helping the consumer distinguish between a product/firm and its competitors • Can position by • User -- attributes • Against competitor -- product class • Use/application -- cultural symbol • Price

15. By attribute/benefitwhitens teeth By competitorbetter than Colgate By pricecheapest cavity prevention By userfor children By usefor after coffee By cultural symbolclean and fresh as snow By product classbetter than mouthwash Different approaches to toothpaste positioning

16. Brand Identifiers • Name and logo: • enhances recognition and understanding of the brand attribute/distinction • Allows for easier new product introduction (brand extension) • Packaging: • enhances decision making at the point of purchase

17. Brand Strength • Qualities of great brands: • A compelling idea • A core purpose and supporting values • Management commitment • Consistency • Superior products • Distinctive positioning and experience • Internal/external alignment • Relevance

18. Harley Davidson • http://www.youtube.com/watch?v=U2olCKnTVPI • Apple • http://www.youtube.com/watch?v=jULUGHJCCj4 • Others?

19. Industry in Transition • Consolidation • Globalization • Client demands • Media clutter • Media fragmentation • Budget fragmentation • Drive for quantification • Consumer demand for customization

20. Transition • Time of purchase • Increasing importance of brand • Consumer fatigue and cynicism • Rise of Integrated Marketing Communications • New technology • Compensation

22. Agency financial models • Commission-based compensation • Fee for Services • Mark-ups • Pay for Results

23. U.S. Top 10 Advertisers (traditional media Jan-Dec 08-09) Company 2008 2009 • Procter and Gamble $3.2 b $2.7b • General Motors $2.2 b $2.2 b • At&T $2.0 b $1.9 b • Verizon $2.1 b $2.2 b • Johnson & Johnson $1.3 b $1.25 b • Time Warner $1.3 b $1.2 b • Toyota $819 m $427 m • General Electric $807 m na • Ford $742 m $467 m • Pepsi $730 m na

24. 2008 Ad spending trends

25. Actually…. • Media spending for 2009… • Internet advertising +7.3 • Network tv -7.6 • Spot tv -23.7 • Newspaper -19.7 • Consumer magazines -16.6 • Radio -20.3 • Total spending change 08-09 -12.3

26. Media allocations 2008

27. Media allocations 2009

28. Change in ad spend by category 08-09

29. Top product placements (Jan – Nov) • Biggest Loser 6,248 • American Idol 4,636 • Extreme Makeover 3,371 • America’s Tough Jobs 2,807 • One Tree Hill 2,575

30. Brand placement vs. advertising Q4/09

31. Find these agencies • Adweek Agency Report Card 2008http://www.adweek.com/aw/content_display/special-reports/report-card/e3i9797ecafefe6fc8b5b4a7feb271b553a • View work from: • Ogilvy (C-) • Crispin Porter Bogusky (B+)