The Future of Branding

This publication has been discontinued on July 19, 2011.

Introduction

Abstract

Overview

Introduction

Branding is becoming ever more important as companies face an increasingly global and competitive marketplace. But what should companies be focusing on when managing this key intangible asset? This report provides in-depth analysis of the key challenges of branding and how companies can respond effectively.

Scope

• Covers the key challenges facing brand strategists, with case studies of how particular industries have been affected.
• Each case study's conclusions are applicable to all industries looking for best practice ideas.
• Industries covered include consumer markets, utilities, financial services, logistics and healthcare.

Report Highlights

There are two important insights into managing brand through mergers and acquisitions successfully. Firstly, serious problems can be created by not actively managing the brand through such developments, which can cause brand equity to suffer. Secondly, ongoing communication to all parts of the value chain is essential.

For intermediaries, the quality and range of products is far more important than brand when assessing providers. Nevertheless, providers should look to appeal to both intermediaries and end customers, by looking to offer a high level of service and wide product portfolio, as well as build up a reputation for trust, leadership and social values.

Reasons to Purchase

• Understand the main challenges of branding and how your company can respond.
• Learn from the experiences that other industries have gone through to improve your branding strategy.

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
    • Brand
  • 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

Related Reports