ESSENTIALS

OF BRAND
BUILDING
STRATEGIES, TIPS & TECHNIQUES

Nick Wreden
Nickwreden@gmail.com

NEXT GENERATION BRANDING

AGENDA: Outline
Branding principles
New rules for a new business era
Malaysia boleh!
A Malaysian brand success story
Action items for success
How to build your brand
Participate!

BRANDING PRINCIPLES
WHY BRAND?: Branding advantages
Shortens sales cycles
Maximizes marketing spend
Facilitates repeat sales
Enables premium pricing
Blocks competitors
Independence from OEM relationships
Attracts strategic alliances & partners
Best path toward profitability

BRANDING PRINCIPLES
BRANDING: Definition
What is a brand?
Logos?

TV?

Advertising?

Expensive?

Brochures?

International?

SuperBrand award?

Positioning?

BRANDING PRINCIPLES
A name, term, sign, symbol or design, or a combination of these that
identifies the goods or services or one seller or group of sellers and
differentiates them from those of competitors.
The sum of all the images and associations customers have
concerning a company.
Great brands are born from people who are having fun. Their
excitement is reflected in the meaning of the brand.

A brand is a long-term profitable bond between an

offering & a customer. This relationship is based on
economic, emotional and/or experiential value, backed
by everyday operational excellence & consistently
measured for accountability, usually by customer
profitability.

BRANDING PRINCIPLES
MYTH
You need a big budget to
brand

REALITY

Brands are based not on spending but

on continuing customer relationships
Only companies selling to Businesses selling to businesses
consumers can brand
can establish dominant brands
Branding effectiveness is Branding effectiveness is
determined by the awards measured by sales, profitability &
won
growth
Only marketing
Everyone in an organization is
experts can brand
responsible for branding
The more ads you see, the ????
bigger the brand

BRANDING PRINCIPLES
MARKETING v. BRANDING: Which is which?
What is the difference between marketing &
branding?
Answer is key, because it helps establish our
activities & measurements.

BRANDING PRINCIPLES
MARKETING v. BRANDING: Which is which?
Marketing
Encourages firsttime purchases
Advertising
Public relations
(PR)
Promotion
Merchandising
Etc.

Branding
Delivers customer economic,
experiential & emotional value
that encourages repeat
purchases
Price
Operations
Culture
Key differentiator
Experience (2)
Talent
Service

BRANDING PRINCIPLES
Customer
economy
(1996-2007)

Im
me
dia
cy

y/s
erv
ice
Qu
alit

on
ati
liz

Ad
ve
rt

a
on

Sales

rs
Pe

Metrics:

Databases

n
tio

Driver:
Marketing
Marketing
Dept.dept.

Sell what
customers
buy

ra
eg

Market research

nt
s/i

Sell what
we make

Demand
economy
(2008-??)

es
oc
Pr

g
nin
itio
os
P

is in
g,
etc
.

Mass
economy
(1920-95)

Provide
customer
solution

Real-time enterprises

Organization

Supply chain

Profitability

Relationship depth

BRANDING PRINCIPLES

Product
Strategy

Targeting, Positioning
Pricing
Strategy

Promotion
Strategy

Place
Strategy

Implementation, Monitoring & Control

What two critical branding factors are missing?

Company-driven

Old
Brandi
ng

Product Development

BRANDING PRINCIPLES
DEFINE VALUE

Understand
competitors

Segment
customers

Sense market
trends

Target
profitable
segments

Understand
customers
Identify
opportunities

Craft value
propositions
Validate value
propositions

REALIZE
VALUE

SUSTAIN
VALUE

Develop
offerings

Improve
retention

Meet
customer
demands for
economic,
experiential,
emotion value

Increase
customer,
product &
account
penetration

Measure
value

Personalize
relationships

Find. Grow. Measure. Profit.

Customer-driven

SENSE VALUE

BRANDING PRINCIPLES
Strategic

BRANDING:
Planning
priorities

Branding
Customer

Ads,
PR,
etc.

FAQ:
How long
does it
take to
establish
a brand?

BRANDING PRINCIPLES
BRANDING: 4 types
Acquisition branding
Targeting & segmentation

Retention branding

Keep customers longer &

purchasing more
Brand penetration
Customer, account, product
Advocacy
Get customers to sell to
others

Acquisition
(Ads, PR,
etc.)
Retention/
recovery
(Reduce
defection,
loyalty)
Brand
penetration
Advocacy
(word of
mouth)

P
R
O
F
I
T
S
!

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention
The purpose of business is not to make a
keep a customer
make and _______________.
sale, but to _____
-- Peter Drucker
Legendary management consultant

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention
Acquisition
Dedicated staff
Average acquisition cost:
$113
Cost-to-serve higher
Price sensitive
2/3s of new buyers fail to
make repeat purchase

YET: 80-90% of
marketing budgets

Retention

No dedicated staff

80/20 profitability rule

Cost-to-serve lower

Trust & loyalty fuel

purchases

Tell 8-10 others about

happy experiences
YET: 10-20% of budgets

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention
ACQUISITION VS. RETENTION
Investment

Revenue

$1 acquisition

$5

$1 quality, value,
communications
(help retention)

$60

Creative Good
* Michigan State
Business School

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention
Average customer loss rate = 20% a year
20% customer loss rate cuts profits 17%
Retention increase of 5% = lifetime profit
increase of 95%
Existing customers 3-8 times cheaper to serve
HOW TO INCREASE SALES
Odds of selling to new customer

5-15%

Odds of selling to existing customer

50%

Odds of selling to a former customer

10-15%

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention

MALAYSIA BOLEH!
HOE PHARMACEUTICALS: Background
Sdn Bhd. headquartered in KL
Manufactures skin cream & liquid
preparations for prescriptions & OTC
Also manufactures herbal & cosmetic
products
Meets standards of WHO, Ministry of
Health in Malaysia & other countries
Extensive international investment

MALAYSIA BOLEH!
BRANDING: Challenges & opportunities
Foot problems very common
Cracked heel
Ladies & sandals

Extensive local/international competition

Dissatisfaction with competitive products
Quality product able to effectively solve
customer problem
Key!

Branding not offering a capability, but solving

a customer problem

Certifications offer third-party credibility

MALAYSIA BOLEH!
BRANDING: Secrets of success
Long-term commitment
We have always looked at this as a longterm strategy; branding is not something that
is done overnight.

-- George Soh, General Manager

Followed a brand plan

Lack of planning shortcut to failure
Malaysias Best; Tak Nak campaigns

Planned growth in stages

First Malaysia, then Singapore, Thailand,
Hong Kong, Taiwan, more

MALAYSIA BOLEH!
BRANDING: Secrets of success
Extensive market research
Target market: high-income 30+ females
Pharmacies, physicians
How product is used
Follow-up surveys for benchmarking

Operational excellence
High-quality manufacturing

Excellent integrated marketing execution

PR
Advertising
Collateral

Web
Promotion
Training

MALAYSIA BOLEH!
SECRETS OF SUCCESS: PR
Variety of targets
Local & monthly
Well-targeted message
Open shoes
Overweight
Education
Reason to
No moisture, dry out
buy from
Consequences
customer
Infection
viewpoint
Doctor care

MALAYSIA BOLEH!
SECRETS OF SUCCESS: Advertising
Testimonial theme
Targeted message
Reflects target customer

Strong graphic image

Credibility
3-day proofpoint

Reference for purchase

Package

MALAYSIA BOLEH!
SECRETS OF SUCCESS:
Collateral
Visual identification of problem
Inside: Education
How it works
What makes it better
Credibility

Before/After photos
Shows benefit from customer
perspective

Note consistency of graphics

MALAYSIA BOLEH!
SECRETS OF SUCCESS: Web
Good design
Easy to navigate
Easy to read

Complete product info

Contact info
Responsiveness

Current

MALAYSIA BOLEH!
SECRETS OF SUCCESS:
Promotion
Promotion/contest

Linked to target market

1 ct. diamond

Prospect involvement
Match slogan

Leveraged with PR
I have been using

Elgy Plus cracked heel

for some time & I am so
excited to be one of the
winners.

MALAYSIA BOLEH!
SECRETS OF SUCCESS: Training
Retail detail
Pharmacies, physicians

Educate
Why use
Use product after cure

MALAYSIA BOLEH!
SECRETS OF SUCCESS: Results
#1 or #2 in each target market
70-80% market share

SECRETS OF BRANDING
FIRST RULE OF BRANDING
It is not about you; it is about the prospect &
customer

SECOND RULE OF BRANDING

All customers (and prospects) are not
created equal.

THIRD RULE OF BRANDING

Measurement is critical.

METRICS-DRIVEN BRANDS
MAIN LESSONS: Remember this!
The purpose of business is not to make a
sale, but to _____ and _______________.
-- Peter Drucker
Legendary management consultant

!!
!
T
N
A
T
R
O
P

BRAND PLANNING: PLAN

KEY ELEMENTS

T
S
O
M

IM

I. Executive overview
II. Market, product, business & competitive review
III. Situation analysis
IV. USP (Unique Selling Proposition)
V. Strategies, objectives, goals & tactics
VI. Execution
VII. Budgeting
VIII. Timetables & responsibilities
IX. Measurement, evaluation & feedback

METRICS-DRIVEN BRANDS
BRANDING: Profitability imperatives
All customers are not created equal
Customers define brands based on their experience,
emotion & functionality
Companies can no longer position brands

Brands are only tools to build customer equity

Magnet to attract new customers
Anchor to hold existing customers

Goal is profitability, not sales or market share

Measurement is critical
Establishes accountability

RETENTION BRANDING
Retention pays!
Satisfied customers tell 3-5 others about a pleasant
experience
It can cost up to 10 times more to generate revenue
from a new customer than from an existing one
A 5% retention rate increase can increase profits by 60100%
Loyal customers who refer others generate business at
a very low or no cost

RETENTION BRANDING
Unhappiness costs!

Dissatisfied customers tell 7-13 others

Unhappy customers complain for up to 23 years!
Negative word-of-mouth: 2X as much impact on
purchase intentions as positive word-of-mouth
Make-goods/expediting are expensive
Find replacement customers

RETENTION BRANDING
80/20 rule

20% of your customers account for 80% of your profits

Knowing this is not as important as knowing WHICH
20% (as well as the bottom 15%)
Conventional accounting only tells us profit from 100%
of the customers

Branding imperatives

Identify & increase profitability of customers

Make intelligent customer acquisition/retention

PROFILES IN BRANDING
INDUSTRY EXCELLENCE AWARDS 2004
Awarded by MITI in March 2005
Categories: Product excellence, export
excellence, quality management

Special award -- Malaysian brand names

Hoe Pharmaceutical
Noor Arfa Batek
Carotino

Special award -- Innovative product

CCM Pharma
Others

METRICS-DRIVEN BRANDS
TRADITIONAL BRANDING

How profitable is this product?

How should I price this

product?

Are we doing enough newproduct development?

How can we extend the

product life cycle?

What is our share of market?

PROFITABLE BRANDING
How profitable is this
customer?
How should I price this
customer?
Are we doing enough
new-customer
development?
How can we extend the
customer life cycle?
What is our share of
customer wallet?

SECRETS OF BRANDING
EXCELLENT RESOURCES

Ministry of
Health
Malaysia

MATRADE

Branding Association of Malaysia

THANK YOU!
QUESTIONS?

Nick Wreden
Nickwreden@gmail.com