Prophet is a consultancy specializing in creating and implementing integrated business, brand, and marketing strategies We are thought leaders dedicated to advancing the management of brands as corporate assets – applying more than 20 years of David Aaker’s thought leadership in the field, including our most recent book Brand Portfolio Strategy We have a strong track record of creating quantifiable impact for global companies Our consultants bring a unique blend of operating, management consulting, and agency experience to our clients’ challenges Founded in 1992, Prophet’s global network includes offices in San Francisco, Chicago, Hamburg, Houston, London, New York, Tokyo, and Zurich
Brand Extensions: Determining when and where to extend your brand into new markets November 17, 2005 To view the archive of this presentation with voice over, please visit http://www.marketingpower.com/webcast231.php Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 1 What You’ll Learn From This Webcast How to manage your brand portfolio to drive business results How to identify opportunities in your brand portfolio for new products and services Ensure success when expanding into new geographies Q&A Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 2 Introduction to Prophet Prophet is a consultancy specializing in creating and implementing integrated business, brand, and marketing strategies We are thought leaders dedicated to advancing the management of brands as corporate assets – applying more than 20 years of David Aaker’s thought leadership in the field, including our most recent book Brand Portfolio Strategy We have a strong track record of creating quantifiable impact for global companies Our consultants bring a unique blend of operating, management consulting, and agency experience to our clients’ challenges Founded in 1992, Prophet’s global network includes offices in San Francisco, Chicago, Hamburg, Houston, London, New York, Tokyo, and Zurich Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 3 Our clients come from a variety of industries and geographies and represent a mix of B2B and B2C companies Introduction to Prophet – Our Client Relationships Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 4 More than 30,000 new product introductions will be launched in the marketplace this year, the vast majority of which will represent extensions of existing brands… But fewer than 25% will ever achieve annual retail sales of $7.5 million Setting the Context Source: Information Resources Inc. Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 5 Recent Brand Extensions Dr. Phil’s Shape Up Nutrition Bars Maxine Magazine Hair Color Tropicana Ice Cream The Successes… …And the Failures W hy do so many new products and services fail? Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 7 Traditional Model For Driving Business Value Strategic growth priorities Organizational Capabilities Market Opportunities Most organizations look at an incomplete picture when assessing the feasibility of brand extensions Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 8 Brand Driven Model For Driving Profitable Growth And many successful companies fail when entering new markets following the traditional model Organizational Capabilities Market Opportunities Brand Sweet Spot New Model Organizational Capabilities Market Opportunities Brand Relevance Traditional Model Proprietary and confidential property of Prophet. Do not distribute.TITLE — Slide 9 Case Study – Building Brand Relevance Starwood Hotels saw an opportunity to leverage its capabilities into a new, hip hotel franchise; however, they did not have the brand to best exploit the opportunity Organizational Capabilities Market Opportunities Brand Relevance Starwood did have the capabilities to develop and manage first-class hospitality offerings The W brand of hotels was created – leveraging Starwood’s capabilities and seizing the opportunity to create a brand targeted at an under reserved segment Starwood did not have the right brand in their portfolio to take advantage of the market opportunity to create a hip hotel chain [...]... Your brand extension goals (e.g., revenue growth, brand- building, etc.) should be clearly defined as early as possible to ensure that executives agree and employees are on-board and can support launch efforts and ongoing brand management Your brand s equities will affected based on how your brand extension fairs – if it is a success, brand equities will be reinforced and may be expanded Include brand. .. Brand Driven Model For Driving Profitable Growth Our focus for today Developing New Capabilities TITLE — Slide 15 Brand Relevance Organizational Capabilities Market Opportunities Creating New Markets Building New Brand Relevance Proprietary and confidential property of Prophet Do not distribute Examples of Successful Brand Extensions Brand Existing Category Association New Category Extending a brand. ..Case Study – Building Brand Relevance Positioning a new brand to take advantage of a high-growth opportunity in a competitive sector NCR wanted to increase awareness and preference for their data warehousing unit by effectively branding and positioning it to compete with strong big brand competitors so they created the ‘Teradata’ brand Brand Relevance Organizational Capabilities... Determine Key Associations that Define the Brand as it Exists Today Hypotheses on influencing factors E.g.: • Category perceptions, frames of reference • Past brand extensions • Competitive moves Qualitative Research Key Outputs 6-8 Key associations that define the brand and the category which represent the most closely held beliefs customers have with your brand + Sample Questions Who do you view as... service adds to your brand s strong equity is to include the all-important 3rd component of the credibility footprint – brand relevance Yes, it increases the time, effort, and money required, but the investment will be worthwhile if your brand extension is a success! TITLE — Slide 23 Proprietary and confidential property of Prophet Do not distribute Questions? Building Great Brands and Businesses... their capabilities and offerings, UBS worked to align its brand portfolio with its corporate strategy and drive greater awareness of the UBS brand UBSs strategy of growth through acquisition had resulted in a complex brand portfolio, which limited its ability to pursue an integrated business model of cross-group synergies Organizational Capabilities Brand Relevance Market Opportunities TITLE — Slide 11... “far out” relative to where customers perceive the brand to be today Proxies TITLE — Slide 20 Proprietary and confidential property of Prophet Do not distribute Validate Concepts Use associations from first round of consumer research to generate concepts for extending the brand, and test with consumers for relevance and brand fit ILLUSTRATIVE Current Brand Associations Determined in Step One Exploratory... PWC into the IBM brand Although there were several competitors, no one was able to handle full-scale technology integration like IBM believed it could Proprietary and confidential property of Prophet Do not distribute Case Study – Creating New Markets Apple had a powerful brand and abundant capabilities to move into the emerging market of digital music Apple had established a strong brand that stood... opportunity to revolutionize the way we work, communicate, entertain ourselves and relax while mobile Through customer insights, Boeing learned that their brand alone did not have the brand equities for this new business and Connexion by Boeing was born Brand Relevance Organizational Capabilities Market Opportunities TITLE — Slide 14 Boeing created a separate business unit made up of many seasoned Boeing... concepts to understand customer rationale for why an idea does or does not fit with the brand Proprietary and confidential property of Prophet Do not distribute Create Guidelines for Effective Ongoing Brand Management IMPERATIVE Any new product opportunity must satisfy all three of these criteria to be considered brand- relevant ILLUSTRATIVE Cuisine: Familiar family favorite food IMPORTANT High Fit Convenience: . Slide 16 Examples of Successful Brand Extensions Brand Existing Category New Category Association Extending a brand to create new sources of revenue Extending a brand to create a strong affiliation. reference • Past brand extensions • Competitive moves 6-8 Key associations that define the brand and the category which represent the most closely held beliefs customers have with your brand Sample. Study – Building Brand Relevance Positioning a new brand to take advantage of a high-growth opportunity in a competitive sector Organizational Capabilities Market Opportunities Brand Relevance