Week 1: Launching new products and the challenge of managing their life-cycle
Week 1: Launching new products and the challenge of managing their life-cycle
“Introduction to the course…How do you classify new products and what is the product mix?…What is the product lifecycle?…How to grow your product offering?…How to calculate demand for your product…How to develop and launch new products…Defining your product pipeline…What is a brand and why do you need one?…Inputs for developing your brand…How to analyze your competitors…Defining your brand model…What is a brand essence and why is it so important?…What are brand values and why do you need them?…Connecting all the dots: Translating your brand into a positioning statement…Evaluating your brand strategy…”
1.1 How do you classify new products and what is the product mix?
1.2 What is the product lifecycle?
1.3 How to grow your product offering?
1.4 How to calculate demand for your product
1.5 How to develop and launch new products.
1.6 Defining your product pipeline.
2.0 What is a brand and why do you need one?
2.1 Inputs for developing your brand.
2.2 How to analyze your competitors.
2.3 Defining your brand model.
2.4 What is a brand essence and why is it so important?
2.5 What are brand values and why do you need them?
2.6 Connecting all the dots: Translating your brand into a positioning statement.
2.7 Evaluating your brand strategy.
1.0 Introduction to the course.
I would like to introduce you to the first course in this specialization which is Brand and Product Management.
The professor that is going to be running this course is Luis Rodriguez Baptista which is an expert in product and branding.
It’s going to take us in a series of modules that will begin in model one with the moving from idea to product, launching new products and the challenge of managing the life cycle.
Model two is going to be about developing the brand, a compelling brand for your product and to inspire your most critical stakeholders and impact your bottom line.
Module three is going to be about knowing how to communicate your offer in the brand architecture and naming.
Module five is going to be about translating your brand into compelling customer experiences.
Module six is going to be about engaging employees to deliver the brand promise.
Hi, my name is Luis Rodriguez Baptista and I’ll be your guide through the journey into product and brand management.
Let me ask you, how many packaged good products are launched this year? If you said around 33,000 you’re right.
How many packaged good products fail each year? If you said between 75% and 95% you’re right again.
So the product is very successful in the marketplace but the company cannot support the demand.
There’s a product called Mosquito Magnet, research it.
Another reason is that the product cannot fulfill the brand promise.
The product might exist in a sort of limbo, because the consumer is not interested in its main benefits.
There was a product called Coke C2. This is an alternative Cola product for those people who prefer the taste of Coke to that of Diet Coke, but only half the calories.
Another reason is the consumer don’t understand the products, how to use it or what is its purpose.
Also it might be a revolutionary product without a market or too soon for its time.
So why do these companies continue to invest in new products? Because continued innovation is necessary for the success of company long term growth.
Organizations need to have multiple product development initiatives at any point in time, probably even in various product categories.
Thus comes our white horse marching in, management of products and brands.
That means choosing which products and which brands the organization launches and gets rid of.
In this first module, we will talk about product management.
A strong brand provides rational and emotional benefits.
What is a brand? A brand is a promise, it’s reflected in the clients experience with the organization.
For me, in the most simplified world, product and brand management encompasses three areas, product and brand strategy, brand implementation, and brand metrics.
To bring these areas to life, I want to talk about one of the best examples of product and brand management there is out there nowadays, Apple.
The product that Apple provides allow you to work and play with that information according to your need.
Notice how they don’t float us with 10 versions of products but only with those we can manage.
Their physical product like the Mac Air or the iPhone are simple, nicely designed and yet very innovative.
Also their software products like iTunes or the iCloud share these features.
If we think of other interfaces like the store, they are precise delivery of their brand, empowering people to technology.
When you go in an Apple store all you see is tables with product that you can touch and play with.
Another interface is the service product like the genius park or the one to one training session.
As you can see, to captain a strong brand is imperative to manage their holistic experience, from beginning to end.
I hope that you’re convinced that having a strong product and brand management actually pays off.
From defining our product, branding it, managing the customer experience, engaging your employees, then pricing it, defining its communication campaign, its distribution, etc.
I will share what I consider are the crucial elements of product and brand management, those issues which I have learned through many mentors.
1.1 How do you classify new products and what is the product mix?
The focus of this lesson Is to learn how to classify products and the concept of product mix so you can apply it later on the module when launching your new product or defining your product pipeline.
I will begin by sharing some of the criteria commonly used to categorize products.
Products can be categorized by the way clients purchase them.
Convenience products are bought normally, without being given much thought, and are typically available in many channels.
Then we have need products, they require more planning and there’s much more product comparison before the purchase is done.
So let’s discuss another criteria commonly used to categorize products.
Think about it what kind of marketing and sales support do you think that is needed to sell a convenience versus a need versus a specialty product? What about a low involvement versus a high involvement.
It could be also emotional benefits, products that satisfy the ego expression needs of consumers.
We could also classify them by their physical state, tangible products consumers can touch, or intangible, services, events, ideas.
At Fact, you could buy, for example, online remote assistance for your PC. But in order to draw conclusions that will impact how you market them, you should look at products in the categorization using more than one dimension.
Another important element to consider, is our products can offer more than one benefit.
The essential product is what customers are really buying their direct benefit.
The augmented product are these additional or secondary benefits.
In summary, when launching new products, you should think of having clarification of which consumer need you’re trying to satisfy and what type it is.
Otherwise, redesign your product’s main benefit.
If you have an online product you can also prototype and test and learn, so you can adapt your product by listening to customers.
Third, understand how to recommend your essential product to create the consumer’s experience more gratifying and protect your competition down the line.
Now let’s talk about the concept of product mix.
The amplitude of the product mix refers to the quantity of the product lines within the categories that the organization place in.
A product line is a group of products that fulfill the same function.
Each product line can be described in terms of their logical, the total number of elements of product line.
We have UHD 4K or LED or Smart TVs. Then we have the def, the number of version and variants of each product within the same line.
As you can see, understanding your product mix is also crucial, because it needs to be differentiated enough to address distinctive needs from the customer’s point of view.
Why else are we continue talking about this? Because the main challenges that you will encounter in managing your product mix are that your organization must determine the optimal number of product lines as well as the longitude and the depth of each one.
You should consider the consistency of a product mix.
Understand which characteristics are shared by product lines.
Do they have the same technology that we can leverage, or are the products addressed at the same market segment? Are they commercialized through the same channels, etc.
All of these questions will impact the development of your new product and your marketing and sales approach.
1.2 What is the product lifecycle?
The focus of this lesson is for you to learn the concept of the product lifecycle.
The best way to picture this is through a curve in the product’s life cycle.
It is important to understand and even try to predict each phase so you can act on them in an offensive fashion with a well thought product strategy.
Generally bringing a new product to the market is filled with unknown risk.
How long does it take to pick up or for a customer adoption depends on the product’s complexity units, but most of all in how well does it solve potential customer needs better than substitute products or even does it satisfy a new need? For example, when the first versions of smart phone were introduced in some markets between 200 and 2001 by a company called Kyocera, it took a while before people began to buy them.
It will be determined by various internal and external factors such as recognition of the product’s benefit, switch in cost from the current solution, competitive pressure, etc.
Your objective is to create awareness of the product to capture as much market share as feasible before competitors come in.
The interest of competitors will grow the market and then take you to the next phase, the growth phase.
Distribution has grown and thus the product is more easily accessible to the customer.
In this phase, other companies have realized the potential benefits of your growth market, and they launch competitor products.
As competition increases the price of a product would normally decrease.
Your objective as a marketer is to maximize sales and market share by insuring that your product is differentiated from the rest through branding and achieving loyalty.
Almost everybody of your target customers have tried or used regularly the product.
Competitive attempts to achieve and hold brand preference now involve making finer and finer differentiation in product.
There are many reasons for your product to enter the declining stage.
The product lifecycle tool is a conceptual reference that will allow us to envisualize our products and competitors position in the market, and plan ahead to take advantage of the opportunities and avoid the threats.
The key question you might be asking yourself is what to do to break free from the product life cycle.
Now that you know how product has a lifecycle just like humans, let’s discuss how to grow your brand offering.
1.3 How to grow your product offering?
If you recall from the last lecture, we discussed the importance of understanding and managing your product’s life cycle.
The focus of this lecture is to learn how to grow your product offering.
Imagine that you have launched your first product and it has been a success in the marketplace.
Now your R&D team comes back to you with an idea for a second product.
Although this sounds counter-intuitive, the most successful companies begin to develop products by identifying customer needs.
Managing growth effectively required that new products fit within the firm’s missions, organizational strength, and existing products.
Imagine a two by two matrix, on the x-axis, you have product category.
Each of them is at the intersection of product category and market.
Which is a name given to a growth strategy where the business focuses on selling existing products into existing markets.
Market penetration seeks to achieve four main objectives, maintain or increase the market share of your current products.
A market penetration marketing strategy is very much about business as usual.
The business is focusing on markets and products it knows well.
When the firm’s average cost of producing and distributing products decreases as the size of its operation increases.
Product development, which is a name given to a growth strategy where a business aims to introduce new products into existing markets.
This strategy may require development of new competencies, and requires the business to develop modified products.
The strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive.
A successful part of the development strategy places the market emphasis on research, and development, and innovation.
The organization needs to develop modified products that appeal to existing customers.
In order to encourage them to spend more on these products.
Noncompetitive or immature products in the portfolio create risk that can be counter-balanced by a strong customer focus and innovation processes.
The third strategy is market development, which is the name given to the growth strategy.
Where the business seeks to sell its existing products into new markets.
Supporting the product to a new country, new product dimensions or packaging.
Market development is a more risky strategy than market penetration.
Which is the name given to the grow strategy where a business markets new products in new markets.
Its current set of products and markets and the organizational preference for either products or markets.
As a drawback the Matrix firms products and markets portfolio must be coordinated.
It provides no insight on trimming products in markets.
Thinking of our lemonade business, I think it might be too early to begin launching other products.
One crucial criteria for deciding which of the above strategy you want to follow is being able to calculate the demand for your product.
1.4 How to calculate demand for your product
With the assumption that it will be bought by a specific group of clients in a specific period under the expected market conditions and with the help of your marketing plan.
The simplest form of effort is calculation is market volume is equal to the number of buyers times the quantity of your product acquired per buyer in a given period.
Market value is market volume times the average price per unit.
Let’s calculate the market of female shavers in your country for next year.
Ideally we would have a number of women who shave but it is unlikely that this is readily available information.
Therefore you can begin by asking your female friends or colleagues if they shave or if they know someone who shaves and interview them to find out their habits.
How many times do they use their shavers before throwing it away.
When did they began shaving? Do they think that will shave throughout their lifetimes? How much do they pay for their average shaver? Once you’ve collected enough information, you can begin putting together the pieces of this puzzle.
Let’s begin with volume, market volume is equal to the number of buyer times the quantity acquired in a given period.
The number of buyers, we could calculate from inferring how many of your female friends shave.
If you ask ten and only two shave, a simplistic way to say that 20% of the female population in the age range of shaving by shavers.
Notice that from the information collected we know at which age your friends began shaving.
Number of buyers in the total market is equal to the number of women in your country from age x to y times a percentage of your friends who shave.
We will begin by simply calculating the amount of product for the total market, not only of your product in a given period.
Let’s assume that they use one shaver for x amount of shaves and they shave once a week.
Then the 52 weeks in a year divided by the number of shaves per shaver is equal to how many shavers per person buys every year.
Again we could also consider other factors such as, if they shave more in a different seasons.
Are there other variables which have an impact on how many times they shave, like fashion? Do they buy and stock shavers at home? How many shavers do they but every time? Or if they alternate shaving with wax, etc.
In order to calculate market value, we multiply the above number by the average price paid per shaver.
If you can capture 1% of that market it would represent 1% of the volume, or value numbers we’ve just discussed.
I encourage you to spend some time calculating and continuously improving your market demand.
How would you calculate the market demand for lemonade business in your neighborhood? I provided some ideas which might help.
1.5 How to develop and launch new products.
In the last lecture we calculated the demand for your product.
The focus of this lecture, is for your to learn the fundamentals of developing and launching new products.
I will give you my key success factors to launching and developing new products.
I assume that after lecture 1.3, you have defined your product strategy.
Who is the target of your new product? What specific need of these target customers will your product satisfy? Which specific benefits should the new product have? How will you market and sell the new product? How will you manage costs to develop a profitable new product without cannibalizing others in your product mix? When is the best time to expand a product line, and with what strategy? How should your organization respond to similar competitive products? How should my company organize their pipeline of new products? As you can see, this list is very comprehensive and you should make sure that you have answered the above.
Although this sounds obvious, companies don’t always keep open ended conversations with customers or potential customers.
Or what are your cost constraints? What are the desired features, what are the redundant features? Will actually help you fine tune your product.
Successful companies also talk to the distribution channels to understand their perspective and their needs.
That it helps to estimate the cannibalization of existing products.
The feedback helps your developers reconcile the desired features with the constraints of time and cost.
Building a prototype also has the added benefit of getting all the internal stake holders excited and energized about of your product.
Do it early on, if possible, from the project’s launch.
While working for a real estate company, the team had developed a whole set of customization options for the new homes, that would be soon launched.
The development team approached IT and accounting to communicate these new options.
The necessary changes in programming and testing would cost a three month delay in the launch of the new product.
As you can see, something that seemed unrelated to the product could set back your launch and add to your costs.
We finally got a call from a major mall owner, offering a space in his new mall.
How lucky could we be? However the price was 30% more than our business plan and the conditions required a significant upfront cash payment.
We let the best or our hype on gut make the decision, launching the first store in this mall.
At the beginning, we could not sell enough product to pay the rent.
As we began to sell more and get acceptance of our product, the footfall of the mall decreased.
My fourth success criteria, when launching your products are to consider the competitive advantages of your organization.
Is your company small and with a flat structure? Then one of the advantages that you may have, is that you communicate very well and can make joint decisions very quickly.
How can you incorporate this in your product launch? Maybe defining a plan for monitoring the launch.
I work with a company that makes products for body shops.
This company, who had a technical team which visits body shops regularly.
These visits allow them to capture lots of customer insight that could provide a competitive advantage to the company.
How can the user would launch in your product? Well, beyond the obvious which is feeding back the needs that could be the seed of new products.
They can facilitate the quick adoptions of the new products, etc.
On the other hand, you should also include in your product action plans, how to develop the capacities needed for the launch.
How many times they have launched a software addressing a mainstream consumer.
It is also very common in the Telco Industry, where they might launch a new plan.
We also look at the new product in the context of the company financials, and not as a standalone business.
If we’re a start-up, a new product might eat up all of our resources.
There are many other factors to consider when developing and launching of new products.
Which is how you organize your product launches, so you can maximize the return of each of your products.
1.6 Defining your product pipeline.
In the last lecture, we discussed how to launch new products.
The focus of this lecture is for you to learn how to define your product pipeline.
One way you could do it is by using your internal knowledge to develop new alternatives or versions of your product.
This matrix has on the X axis, your products relative position in the market place or market share.
What is the relative market share? It is the ratio of the sales of your product to that of your largest competitor.
It is not the same to be a diet cola product within the drinks category, than within the diet drinks category.
Products with high market share, normally have better net result.
In high growth markets, their investment required to reach and maintain market share, are high.
Pure marketing effort can move our products to the left upper graph, but it becomes more difficult if the growth is slower.
Competitors marking effort if you don’t answer to them, could move our products to the right of the graph.
With time, as we saw in the product life cycle, the market matures, then growth slows.
Thus we can see four quadrants, that will help us define where our product is, and where our next product should be.
Stars, are product in high growth markets and high market share.
So cash cows have high market share in markets with slow growth.
The main objective is to use the funds generated by this products to invest in this products to invest in others.
Dogs are product with low market share in slow growth market.
Does you increase market share or your cash? The BCG matrix can help by defining and managing your pie plan according to where your product is located.
In turn, this helps you to decide where to invest your resources for product development.
The inventor of the BCG matrix, Bruce Henderson, wrote that to be successful, a company should have a portfolio of products.
You need to have the product stream for at least two years, and use it to manage all of your company’s activities.
This map defines a string of products that a company is committed to develop.
Why? Because the product pipeline will have an impact on areas such as marketing, sales, distribution, technology, service etc.
You need to ensure that they can meet their resources to the project, when they are schedule on your product map, and not when they consider it a priority.
Second tool is to develop a platform products or services.
These are the ones that inspire and support whole new line of derivative products.
The third tool is that when defining your platform product, also generate an exhaustive product strategy that leaves no holes for competitors to exploit.
Understand who’s buying your products and why, so you can fill the gaps in the market that your new products will create.
Imagine if Gillette had gone from shavers to selling a full line of beauty care products for men.
Instead of selling per shaving gel and then evolve into a full line of products.
Although we will discuss more about this in the next modules, make sure that the consumers frame of preference for your brand includes the next product in your partner.
If you’re about to launch your product internationally, don’t assume that you’re home product would work there.
Questions that you should be evaluating are, is the new market attractive in size and growth? Are their favorable transit supporters? How fierce is competition? How long have they been there? What is their presence and customer loyalty levels? What is the political risk? Can the company develop its existing business model or are there cultural barriers that prevent it? With these topic, we end this module, where we had an idea on how became a product and hopefully, more than one in your pipeline.
If you have a break through product, you want to maximize the benefits of it and one of the best way to do it by developing a compelling brand.
2.0 What is a brand and why do you need one?
The focus of this module is to develop a compelling brand for your product.
The first topic that we will discuss is of course brands.
Well for me a brand is to be comfortable buying a product and to trust it, to trust the product, and to trust the brand at the end.
A brand can be what a consumer thinks of a, once she or he listens the name of the brand.
What type of promise this brand is making to a consumer and what benefits it can provide to them.
A brand could be like a sort of promise a company makes to you, or maybe also an experience you enjoy when you buy any specific product.
As you can see, there are different perceptions of what a brand is.
By watching the lectures of this module, you will come to your own conclusion of what a brand is.
The more important question might be, why do you need a brand? Let’s look at the answers from some of the people in the store.
Because a brand provides the consumer another type of trust, credibility.
I hope that by the end of the MOOC you’re convinced that brands are a worthwhile investment for at least four simple reasons.
The first one is that a strong brand adds value to your product and how? By differentiating you from competitors, by helping you achieve recognition or even by clarifying to customers what to really expect for you.
So would you have bought that car if it had no brand? No, definitely no.
Why not? Because I trust the brand.
It’s a brand that has a history that, I don’t know, I feel comfortable with it.
So do think you’d like to do business with companies or brands that you’re familiar with? Yes, yes, absolutely.
Yes, just with brands that I have known, I don’t know, since forever.
If your branding is consistent and easy to recognize, it can help people feel comfortable at ease purchasing your products and services.
Secondly a strong brand is capable of building loyalty towards your product.
People love to tell others about the brands they like.
People wear brands, eat brands, listen to brands and they’re constantly telling others about the brands they love.
On the flip side, you can’t tell someone about a brand you can’t remember.
Will you consider a different brand? No I don’t think so.
I’m always going to choose a brand that I trust, that I think their going to give me a good product.
Third, your brand provides motivation and direction for your team.
A clear brand strategy provides the clarity that your staff needs to be successful.
Lastly, a brand also creates value for your organization by generating an asset.
Their brand has created a value that exceeds their physical value.
Since we need to collect the input which will help us to make your brand puzzle.
2.1 Inputs for developing your brand.
In the last lecture, we discussed the concept of branding and why you need a brand.
The focus of this module is to learn what are they to develop your brand? Let me begin by saying that if you’re going to invest money in this brand, you might as well spend the time developing by using a thorough methodology.
Where will you compete, and how will you compete in the marketplace? Your brand has to be in sync with it.
Imagine that you come with a line of ready to eat package meals, and you brand it with Colgate.
There is definitely a disconnect between selling more meals and your brand.
Thus, we need to capture the implications that it has in developing your brand strategy.
The second piece of our puzzle is understanding your existing brand image.
If you’re developing a new brand, you don’t need to consider this point.
If you’re developing a brand for the product which you launch only with a logo or a new brand altogether, you do need to think about it.
The goal of this part of the analysis is to identify what are the existing perceptions that your target costumers have about your brand.
You need to know this, because you will need to either build on this perceptions or chain them altogether.
I had a client that thought that, the fact that their sales people were perceived as nice to deal with, was a positive image for their brand.
As it turned out, it was quite the opposite, because customers wanted to deal with the brand that was efficient, professional people instead of nice sales people.
The third piece of the puzzle is to identify the market trends that can have an impact on customers and the brand.
If we were to develop a brand for a lemonade business, we need to consider the trends related to the current perception of lemons in our health or trends in people drinking natural juices versus other types of drinks.
All of these methods might be useful in determining how do we frame the market for a brand.
As with these first two pieces of the puzzle, we can draw conclusions from this trends that will have an impact on how do we define our future brand.
The goal of this is to determine which benefits we can offer that motivates customers to buy and use our brand.
Their real insights will come from probing those areas that are not obvious to the customer, but that are influential in the brand choice and the user experience.
This can be done by identify major categories or dimensions of motivations that summarize how customers organize information and develop their attitudes towards brand in a specific product category.
For me, what has worked in every case is to identify their unmet needs, those that are not met by existing brands in the market.
Ask why multiple times in an iterative process for getting to the root cause of a perceived need of the target customer.
I ask you, why do you need to have the same information both at home and at work? And you answer that most of the times, you need to take home some of the work.
Our PC Notebook brand, we provide you with a solution that will improve your productivity to succeed faster and enjoy more.
2.2 How to analyze your competitors.
In the last lecture, we learned how to interpret market trends to incorporate in the analysis required for developing your compelling brand.
The focus of this lecture is for you to learn how to do a competitive assessment that will allow you to determine what is the space available for your brand.
The reason that you analyze competition is because your brand ultimately has to be differentiated versus competitors.
What good is your brand if you offer the same benefits as your competitor? Customers will then decide on other elements such as price or availability.
Imagine that you claim something which in the minds of customers is unbelievable.
We can learn from competitors which are the ones most commonly used in the industry and the ones that your customers value more.
So how do we do a competitive assessment? Step 1 is to define your competitor set, which are the companies that target your customers? Whether they are products competing head to head with yours, or they might be substitute products.
Step 2 is to gain insight into how local competitors position their brands in the minds of the customers.
These are the unique elements that convey the brand, what the brand represents in the marketplace.
Our analysis should answer what is the end benefit of the brand? What is in it for our target customers? I will stop here, to clarify the concept of benefits versus attributes.
Imagine a sales associate at a bicycle store was struggling to get the prospective customer, a man in his mid 30s, to understand his point.
In this case, the salesperson assumed that the customer would be able to figure out the benefit on his own.
What supports that differentiating claim we have identified? It outlines the proof points or what the brand is claiming to credibly deliver on the positioning.
In our previous story, by claiming that the foam was made from a special material that was tested to be more comfortable among 50 customers doing 50 miles daily, you can begin to deliver credibility.
An indirect endorsement from the racer provides the credibility that the brand requires.
In the analysis as well as through customer research it is important to differentiate those components which are the differentiation versus those which are table stakes.
What do I mean by this? In some industries, there are certain benefits, attributes or proof points which you must offer, only to be considered by customers.
Nowadays, Smartphone’s almost need to have a camera to even be considered by any segment of customers.
We work with a very large developer in defining their brand.
We also took into consideration how customers made their decisions where purchasing residential real estate.
Was it they wanted a local, a state, a regional or a national brand? For the started customers, the geographical presence was a decisive factor in their purchase.
All the benefits and attributes of the company’s analysis can be categorized into specific functional animal show themes.
An emotional benefit was that they offered an enrichment of your customers life.
Which all developers have to have in order to be considered by customers.
As you can see, these analysis yields lots of information that will allow us to know how to develop your differentiated and credible brand.
We can develop a positioning map to know where there are opportunities to position our brand, let’s look at one.
In this one, we have chosen two key variables that our target customers used to purchase, amenities and the second one is customization options.
When you place the benefits of obtained from step three above you can clearly see where every competitor focus their position.
The next step in creating your brand is to define which method and model you want to use.
2.3 Defining your brand model.
In the last lecture, we’ll discuss how to analyze your competitors as an input to developing your brand.
The focus of this lecture is to define the model to develop your brand strategy.
There are many models out there to develop your brand strategy.
It is based on David Acker’s brand identity model.
Think about it, this is like your elevator pitch for your brand.
You also need your fellow colleagues to buy what your brand stands for, which will be the subject of our sixth module.
If you think of it, the peel is the part of the fruit that defines how you perceive it before actually buying or eating it.
If we start from the center, there is a brand essence.
The heart and the soul of the brands, which it lasts for a long time.
We will discuss more on brand essence during our next lecture.
Next is the flesh or the equivalent to our brand values.
Externally it is what we experience when we consume the brand.
Some of Philips’ values are breakthrough technology, accessibility, deep customer understanding.
Some of Starbucks’ values are quality and variety of product, sustainability and customer service.
So how do these actually translate into perceptions that we might experience? Look at this advertising and notice how the brand personality challenging is reflected.
All of the related topics who want to share their ideas and opinions on tomorrow’s automotive world with BMW. As you might have guessed, it is very difficult to define our brand identity and launch it tomorrow.
You develop your brand identity and build it over time.
It is the foundation of the relationship between your brand and your customer.
You might have noticed that we have collected much information in previous lectures.
Once I explain in more detail the brand essence and the brand values, which are the topics of our next lectures.
2.4 What is a brand essence and why is it so important?
In the last lecture, we discussed the model to develop your brand strategy.
The focus of this lecture is to deep dive into the brand essence and learn how you can define one for your brand.
In three to five words, it phrases the highest order customer benefit that the brand delivers.
You might be asking yourself, what does this self-driving car have to do with essence? Well, I expect that Google will either launch a new brand for their product or revise their brand essence to accompany other strategic areas which they might be working on.
Apple, Apple’s brand essence is empowering people through technology.
Every product or service under the Disney brand is addressed at providing magic family fun for their target audience.
Disney also owns other brands like Touchstone Pictures, which doesn’t fulfill this brand essence and thus has a different brand all together.
BMW brand essence is to provide sheer driving pleasure.
So how can we define your brand’s essence? Let me share the possibilities that we have by looking at the hierarchy of benefits in the brand essence.
In answer of the customer question what does this brand provide? Or looking at it from your angle you are telling customers that owning this brand delivers a specific functionality and utility to them.
How does this brand make me feel? Looking at it from your angle, you’re telling customers that owning this brand influence how they feel about themselves and their choice of brand.
You are telling customers that by owning this brand, they define who they are and how they want to be perceived and stand out by others.
Hewer Brighton is also a very successful brand that addresses a different customer.
Their anchor benefit from brand instances needs, Brighton has technologies, experiences and people to build a product that is exceptionally robust, reliable and precise.
Can you identify which type of benefit each brand essence has? If you said the Rolex uses a self defining benefit and Breitling uses a functional benefit, then you have fully understood the hierarchy of benefits.
Be aware these brands might have supportive benefits, not part of their brand essence, they’re different.
Depending on the market context and the competitor’s strategy, either of the three types of customer band can be used to define the brand essence.
Brand assistance around emotional and self defining benefit require a strong functional foundation, or otherwise they will fail.
Another one is marketing investments required to sustain brand identity with emotional or self expressive essences are typically higher than those to build brand identities based on functional benefits.
Making them the better choice for brands that target multiple customers that commends with different emotion or self defining needs.
A brand essence is a long term promise commitment to all stakeholders.
It acts as a beacon for the organization providing direction and inspiration in what the brand is all about.
It evolved with a market and a position to keep relevant, but it acts as a platform to communicate the brands benefit to all stake holders.
2.5 What are brand values and why do you need them?
The focus of this lecture is to deep-dive into the brand values and how to find them.
If you recall from our brand strategy model, brand values are the most important competences.
If you’re a Disney, whose brand essence is magic, family, fun, could you have a value that is challenging? Doesn’t make a lot of sense that you have initiatives whoever see this challenge of your customers if your promise is magic, family, fun, does it? Values seem easy to define, but they’re actually one of the most daunting tasks because you have to be very precise in what you want your organization to focus on.
Later on, values will be the drivers or definer of brand-customer experience in the fifth module.
The greatest challenge is selecting those three to five values, and then defining them precisely.
I’ve seen many companies that have innovation as a value.
Innovation is defined as new markets, new business models, or new value added solutions.
At 3M, innovation means inventive technology or first mover unique solutions.
As sustainability is another one of their values, they have also differentiated themselves by setting ambitious target of reducing the carbon emissions from every mile they fly by 30% between 2007 and 2020.
Think for an instance, what do you think of the core values or competency of Starbucks, the thing that Starbucks is especially good at? In our opinion, Starbucks is good at quality and variety of coffee, customer service, sustainability, and providing a providing a lifestyle.
Look at the following videos for examples of how these values are demonstrated in initiatives.
Those values generate strategic initiatives that drive actions and behaviors which should be measured.
Stay tuned because it’s time to roll up your sleeves and develop your brand strategy.
2.6 Connecting all the dots: Translating your brand into a positioning statement.
In the last lecture, we’ve discussed the different elements of your brand identity.
The customer, the competitor, yourself image if you are an existing brand, and the trends.
What is the core promise that will resonate more with your customers over time? Define more than one line of thought and discuss it internally.
What are those most important competencies you will need to deliver on that particular brand essence? Your list should have no more than five.
Lastly, let’s define what are the attributes that define your extended identity.
Your extended identity can change over time through your positioning.
I will pause here to introduce you to the concept of positioning.
The positioning guides how the brand is communicated to stakeholders by defining your target audience, the frame of reference where the brand wants to be perceived as part of.
Positioning identifies the key messages and helps to ensure consistency.
It is where your customers will proceed throughout the marketing activities of your brand.
It is the vehicle that helps communicate the brand’s point of differing versus competition.
As we discussed in lectures ago, when you launch or relaunch your brand, the brand ID is aspirational because it takes time to fully deliver on it.
The framework to move from your current image to your brand ideal is through positioning.
At some point, we can infer that FedEx brand’s identity was a following.
The brand essence was business solutions for your peace of mind.
Their positioning would evolve according to what they could offer in each stage.
The positioning for this particular essence was four.
Also notice how in the ladder, since they have built the capabilities that provide culpability for their brand, the company can even use their own brand in their tag line because it already embodies what customers want.
I encourage you to test your short list of brand identities and positioning before customers.
What should be its brand identity? What about the positioning statement? We need to work together on this before we move on.
Once we have a final brand identity, we want to evaluate in order to ensure that it meets effective criteria that improves your likelihood of success in the marketplace.
2.7 Evaluating your brand strategy.
In the last lecture, we finally connected all of the dots and defined your brand strategy.
The focus of this lecture is to do a stress test and evaluate your brand strategy.
Before you begin investing your money in that new brand, you just want to be sure that it will be successful with your target customers in the marketplace.
So then you bring this to the first of the criteria for evaluating your brand strategy, being relevant to your target customers.
I would even suggest that the brand should be relevant to all of your stakeholders, why? Because nowadays, companies are competing for talent.
So you want to ensure that you capture the right people that are excited to work for your company because you have to be relevant for them.
If you want the press talking about your brand in a positive way, you also have to be relevant to them.
Just keep your brand valued by your stakeholders, beginning with your target customers.
That is the third criteria for evaluating your brand, ensuring the target customers have the perception that you can fulfill the promise that you’re making.
If Apple said tomorrow that they are working on the next rocket to Mars, despite the trust that I have in them, I would have my doubts on them being able to fulfill that promise.
Simply because they haven’t built enough brand equity, a concept that we will discuss in our next module, to be credible for me in that expertise.
Is your brand aligned with your organization’s business strategy? You don’t want to be promising something and having your organization working projects that will deliver a different promise.
When they relaunched their brand essence, guaranteed overnight delivery.
A brand essence should be as unique as possible, realizing the true differentiation may only often occur through execution.
That the brand essence guide every important decision for them.
How do we know? There used to be a site called fedexstories.com in which employees shared great war stories of them all over the world doing amazing things for delivery of the brand promise.
He got a big praise from the company because at the moment of the difficult decision, the brand got him to deliver on the promise.
When we talk about new brands with new companies, you should think about how to ensure you meet these criteria.
You could have your own customers develop the credibility for your brand by sharing their great stories on social media.
I hope you have enjoyed it and are working on your own brand.
In my experience, after launching your brand, the next big topic is that we have to deal with how to manage the growth of your offering from a branding perspective.
Week 1: Launching new products and the challenge of managing their life-cycle