Table of Contents
- DATAMONITOR VIEW
- CATALYST
- SUMMARY
- METHODOLOGY
- OVERVIEW ANALYSIS
- Branding is becoming increasingly important
- There are five key challenges of fundamental importanceto all
- Building brand symbolism and trust
- Managing corporate brand
- Managing brand in intermediated markets
- Managing brand during mergers and acquisition
- The challenge of declining returns
- Success will depend upon a number of factors
- Consumer-facing brands must reflect people's lifestylesand aspirations
- Corporate brands must deliver on their promise to actresponsibly
- Brands in intermediated markets must appeal to bothintermediaries and
end customers
- Active brand management is essential to successfulmergers and
acquisition
- Adapting promotional activities is key to ensuringoptimum ROI
- CONSUMER BRANDS MUST REFLECT PEOPLE'S LIFESTYLES ANDASPIRATIONS
- Catalyst
- Summary
- Brands have important symbolic meanings that can be usedto build brand
equity
- There is a difference between product and brandassociations
- The symbolic associations of brands mean that they playan important
role in shaping self-concept
- Social identification and image are important brandsymbols
- When brands fulfill symbolic functions marketers canbuild
profitability more effectively via premium pricing
- Consumers are becoming increasingly skeptical of brandsymbolism
conjured via emotional branding ploys
- Symbolic meanings combined with a clear focus onfunctional benefits
create a compelling brand proposition
- Engendering trust should be a primary focus of brandingefforts
- Brand trust relates to expectations of the brand'sreliability and
intentions
- Four different types of trust exist
- Trusted brands form personal connections with consumersand are more
likely to be given a second chance
- Trust is most important for brands in markets withlittle
differentiation
- Future brand strategies must alleviate growing consumerskepticism
- Consumers are becoming more fearful, skeptical anddistrusting
- Trust perceptions vary by industry and category
- Where consumers perceive risk or trust is low theydevelop
trust-orientated strategies accordingly
- Marketers can leverage the attributes and communicationcues that
consumers perceive as trustworthy
- CORPORATE BRANDS MUST DELIVER ON THEIR PROMISE TO ACTRESPONSIBLY
- Catalyst
- Summary
- Corporate branding is ideal in commoditized markets
- Branding has been of little importance to utilitiescompared to other
sectors
- Rather than customer empathy, utilities brandsoriginally had regional
company focus
- There is a trend to corporate branding in UK energysuppliers, after a
period of intense M&A activity
- In supplying a commodity, brand differentiation isdifficult
- Enhancing the commodity with a good corporate profile isthe most
appropriate branding strategy
- Commodity companies cannot hide wholesale activitiesfrom their corporate
profile
- Companies have environmental and social responsibilities
- Tariff increases and profits on wholesale activitiesattract bad press
- Commodity companies have the responsibility of ensuringcontinuity of
supply
- Exploiting natural resources may help the bottom line,but it won't
help the brand
- Investment in the corporate brand has to focusinternally as well as
externally
- The company has to act in the manner it promoted throughits corporate
profile brand
- To act in this manner, internal stakeholders have to bealigned with
the brand profile
- All subsidiaries of the company and distant operationsshould operate
under the same principles
- Leading commodity companies are investing internallywhen developing a
corporate profile brand
- The corporate profile can be easily damaged byactivities that do not fit
with it
- Short-term damage to a corporate profile is difficult torepair
- A profile brand cannot be replaced in the same manner asa family
sub-brand
- Bad PR through poor internal activities is the easiestway to damage a
profile brand
- BRANDS MUST APPEAL TO BOTH INTERMEDIARIES AND ENDCUSTOMERS
- Catalyst
- Summary
- The Financial Services market illustrates the challengeof brand in a
complex market
- Brand must have no bearing on sales throughintermediaries in financial
services
- Product providers continue to market their brand tocustomers and
intermediaries
- Brand is important to a high proportion of the targetclients of
intermediaries
- Clients prefer well-known brands and are more likely totrust providers
with strong brands
- Brand is important to a proportion of the target clientsof
intermediaries
- Intermediaries are largely unaffected by brand promotion
- Providers should focus branding efforts on both endcustomers and
intermediaries
- Advertising focused on IFAs is almost as effective asadvertising
focused on customers
- Sponsorship and social projects are an important aspectof improving
brand perception
- Intermediaries are skeptical of brand promotion withoutsubstance
- Providers with a strong brand are seen as reputable andproduct-focused
- Weaker brands are those which have a poor product andservice offering
- Strong brands rely on a combination of values appealingto intermediaries
and their clients
- Even in intermediated markets, soft values can beimportant to brand
perception
- Raising visibility among clients through a clearbranding strategy is
key to maximizing effectiveness
- ACTIVE BRAND MANAGEMENT IS ESSENTIAL TO MERGERS ANDACQUISITIONS
- Catalyst
- Summary
- Companies must manage their brands to maximise theirchances of success
- A company's brand can be a powerful tool
- Merger and acquisition activity has been rife in recentyears, which
can cause brand problems
- Brand management is therefore essential
- For many companies, the policy of 'accumulate andassimilate' has worked
well
- The four largest express players have followed similarstrategies
- Two main areas to tackle to minimize disruption:external and internal
environments
- Timing and composition of brand transition strategyvaries
- However, there are some common general steps thatintegrators take to
maximize a successful transition
- DHL/Airborne case shows that detailed planning is key
- Acquisition of Airborne Express was a good strategicmove for DHL
- Detailed plan drawn up and implemented for all elementsaffecting brand
- Advertising key in communicating to customers andemployees
- Presentations to stakeholders were also key
- But there have still been problems with the transition
- UPS/Overnite case offers further pointers to bestpractice
- Overall, integrators have been successful in managingtheir brand
during M&A activity
- DHL re-branding shows that communication is key
- Action required by Deutsche Post due to multiple brands
- Five elements to integrating separate business unitsinto one brand,
with communication being key
- New color scheme helped quickly establish the new brand
- DHL brand management process has continued and evolved
- While brand management can yield problems, there arefive steps to
maximize the benefits
- Serious problems are created by not managing the brand
- Definite benefits can be yielded through brandmanagement
- There are five steps to help decrease the chances ofdamaging the brand
- BRAND MANAGERS MUST OPTIMIZE ROI IN A MARKET WITHDECLINING RETURNS
- Catalyst
- Summary
- Pharmaceutical branding has traditionally led toconsiderable returns
- Intense advertising activity has led to pharmaceuticalbrand
recognition, rapid uptake and blockbuster sales
- Brand awareness is a key tool for protecting against newcompetition
- Unique selling points can be key to brand success
- ROI has been declining as new advertising regulationsand media have been
created
- Increased use of alternative media has reduced the valueof traditional
pharmaceutical marketing campaigns
- Physician detailing has become less effective
- The new PhRMA guiding principles for DTC advertisinghave led to
significant changes in marketing
- Several companies took the new DTC guidelines a stepfurther
- Cost constraints will further reduce ROI
- The lack of direct-to-consumer advertising in Europe hasled to
patients preferring face-to-face contact
- Physicians are a more suitable target for branding inEurope
- Generic substitution is mandatory in many Europeancountries, leading
to a limited ROI on marketing
- The future of pharmaceutical branding is uncertain
- Drug safety scares have led to negative associationswith some
household pharmaceutical brands
- In the future brand will have less influence overprescription choice
than in the community
- Companies will have to adjust their measurement ofmarketing
effectiveness
- APPENDIX
- Definitions
- Further reading
- Ask the analyst
- List of Tables
- Table 1: The percentage of consumers who considervarious financial,
automotive, utilities and packaged goods variables tobe trustworthy, 2004
- List of Figures
- Figure 1: Consumer value brands that reflect theirattitudes and values
on life
- Figure 2: Preference for customization is influencedby the growing
importance of identity building consumption
- Figure 3: Brand must combine symbolic and functionalpositioning to
create perceived differentiation
- Figure 4: Trust can build brand loyalty and equitywhich provides a wide
range of marketing benefits
- Figure 5: Both consumer and industry opinion perceivethat prior
experience and endorsement from professional bodies are themost influential
factors in (re)gaining consumer trust
- Figure 6: UK utility retail and corporate brands
- Figure 7: Brand affects clients more thanintermediaries, and is most
likely to influence financially uncertainclients
- Figure 8: Advertising is the most effective method ofstrengthening brand
perception
- Figure 9: Financial advisers say provider offeringsand performance are
key brand values
- Figure 10: Distinctive Integrator Colours MinimizesBrand Confusion
- Figure 11: DHL's advertising for the Airborneacquisition
- Figure 12: DHL Brand Integration
- Figure 13: DHL's "Yellow Offensive"
- Figure 14: Viagra accounted for almost a third oftotal PDE5 inhibitor
sales in 2005
- Figure 15: The 'purple pill' - AstraZeneca's brandingfor Prilosec and
Nexium has been key to the franchise's success
- Figure 16: Patients in Europe prefer to receive drugand disease
information through face-to-face contact rather than via themedia or
brochures
- Figure 17: An average of 91% of promotional spend inthe EU is for
physician detailing while in the US this accounts for 52
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